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2017 Adjustments Appropriation Bill Standing and Select Committees on Appropriations Presented by: Dr Mampho Modise 22 November 2017. Contents. Components of an Adjustments Budget 2017 Adjustments Appropriation Bill Unforeseeable and unavoidable expenditure
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2017 Adjustments Appropriation BillStanding and Select Committees on AppropriationsPresented by: Dr Mampho Modise22 November 2017
Contents • Components of an Adjustments Budget • 2017 Adjustments Appropriation Bill • Unforeseeable and unavoidable expenditure • Expenditure in terms of section 16 of the PFMA • Expenditure announced by the Minister of Finance in the 2017 Budget Speech • Shift of funds between Votes • Virements • Roll-overs • Self-financing expenditure • Declared unspent funds • Declared unspent funds: Home Affairs • Revised National Budget Expenditure 2017/18 • Conclusion
1. Components of an Adjustments Budget • The Public Finance Management Act, Act 1 of 1999 (PFMA), section 30(2), states that the adjustments budget may provide for: • significant and unforeseeable economic and financial events affecting the fiscal targets; • unforeseeable and unavoidable expenditure recommended by the national executive or any committee of Cabinet members; • any expenditure in terms of section 16, which governs the use of funds in emergency situations; • money to be appropriated for expenditure already announced by the Minister during the tabling of the annual budget, for which the details of the annual allocations are now decided; • shifting of funds between and within votes in terms of section 42; • utilisation of unspent funds under a main division of a vote to defray increased expenditure in another main division, in terms of section 43 and section 5 of the Appropriation Act, 2017, which governs the use of virements; and • the roll-over of unspent funds from the preceding financial year.
2.1 2017 Adjustments Appropriation Bill • The Adjustments Appropriation Bill provides for increases or decreases to allocations set out in the main Appropriation Act, including shifts in the anticipated economic classification of this spending • Adjustments to allocations to provinces and municipalities are set out in the Division of Revenue Amendment Bill • The Adjusted Estimates of National Expenditure publication explains national vote changes in detail, together with midyear performance and expenditure information • Shifts of allocated expenditure and other adjustments are subject to the PFMA and its regulations as well as section 5 of the Appropriation Act 2017 • The adjustments budget serves both to effect necessary changes to allocations and to contribute to in-year oversight and management
2.2 Structure of the Bill • A vote purpose is set out for each vote • The Bill is divided by vote and by main division (programme) within a vote • Adjustments to allocations are stated in terms of: • Current payments • Transfers and subsidies • Payments for capital assets • Payments for financial assets • Further details of allocations are listed for some programmes • Headings group some of these listed items • Allocations marked with an (*) refer to specifically and exclusively appropriated amounts e.g. Compensation of employees and conditional grants
3. Unforeseeable and unavoidable expenditure [s30(2)(b) of the PFMA] SECRET
4. Expenditure in terms of section 16 of the PFMA [s30(2)(c) of the PFMA] SECRET
5. Announced by the Minister of Finance in the 2017 Budget Speech [s30(2)(d) of the PFMA] SECRET
7.1 Virements [s30(2)(f) of the PFMA] – focus on those above R100 million
10.1 Declared unspent funds SECRET
10.3 Declared unspent funds: Home Affairs • Baseline exercise aimed at identifying possible underspending and reduce such underspending by declaring savings • The department signed off their chapter acknowledging R100 million declared savings on 12 October 2017 • The department is showing underspending of R53 million for the first half of 2017/18 on goods and services and it may not be able to spend the rest of the budget in the current year • Given the likelihood of the underspending on overall good and services budget, the department will be in a position to reprioritise toward this project during the remainder of the year • The department further received R264 million that they will have to spend in this fiscal year. If there are spending pressures, it may utilise some of these funds towards the WAIO project
12. Conclusion • R3.885 billion upward adjustment for 2017/18 • R17.162 billion in additions: • R8.609 billion for allocations announced in the 2017 Budget Speech • R5.208 billion in expenditure in terms of section 16 of the PFMA • R1.547 billion in self-financing expenditure • R994.8 million for an increase in projected state debt costs • R586.0 million for unforeseeable and unavoidable expenditure • R216.9 million for roll-overs Offset by the following, amounting to R13.277 billion: • R6.0 billion in contingency reserve funds • R4.5 billion in projected underspending • R1.668 billion in declared unspent funds • R870.9 million decrease in skills levy and sector education and training authorities funding • R137.6 million decrease in National Revenue Fund payments • R100.0 million decrease in projected Magistrates’ salaries Total adjustments expenditure estimate level of spending increases from a budgeted R1 409.2 billion to a revised R1 413.1 billion
