OVERVIEW OF THE PRESENTATION

2. OVERVIEW OF THE PRESENTATION • Introduction • Sources of SAMDI Revenue • Graphic Presentation of Revenue by Source • Background: SAMDI • Brief Historical Background of Cost Recovery • Aim of Cost Recovery • Goals of Cost Recovery • Status of Cost Recovery • Graphic presentation of the Financial Status • Challenges • The Way Forward

3. INTRODUCTION SAMDI’s vision is: the creation of a self sustaining Organisational Transformation Centre of Excellence for Public Service Delivery

4. SOURCES OF SAMDI’s REVENUE

6. BACKGROUND: SAMDI • Before 1994 training and development in the Public Service was provided by the Public Service Training Institute (PSTI), which was then changed to the South African Management Development Institute (SAMDI) • Training and Development was offered free of charge by this body, and focused on technical skills • In October 1999, SAMDI became a schedule 1 Department, with its own Director-General accountable to the Minister for Public Service and Administration.

7. BACKGROUND: SAMDI (continued) • Concerns were raised that SAMDI should compete with other providers and not to enjoy monopoly like the PSTI • This concern is also reflected in the White Paper on Public Service Education and Training • The rationale was that competition would lead to quality service and programmes • Cabinet then mandated SAMDI to embark on Cost Recovery

8. BRIEF HISTORICAL BACKGROUND ON COST RECOVERY • Cost recovery strategy was initiated during 1999 • National Treasury approved the Trade Account in 2001 • National Treasury approved the initial tariffs in 2001 • Shadow invoicing commenced during October 2001 • Implementation of cost recovery from 1 April 2002 • Tariffs amended in October 2002 (More market related)

9. COST RECOVERY • Aim:To support SAMDI business through the recovery of costs on services rendered through fair and recognised outsourcing processes

10. GOALS OF COST RECOVERY Short Term • To recover portion/part of costs • Annually increase the portion of costs to be recovered Long Term • To recover all costs( Break-even) • To be sustainable

11. STATUS OF COST RECOVERY • Total revenue – April 2002 to March 2003 – R 6 778 947 • 1036 Invoices issued to the amount of – R 13 049 089 • Total debtors outstanding – R 4 628 111 • Tariffs revised during October 2002 • Inclusion of consultation fees • Inclusion of professional management fees

13. CHALLENGES • Implementation and monitoring of the Cost Recovery Strategy and Financing of training and development programmes • Willingness of departments to pay for services • Shrinking budget lines versus cost of training and development • Enforcement of payment for training and development services rendered • Expensive Leadership and Management Development Programmes – Cost of external service providers • Government priority programmes versus cost recovery

14. CHALLENGES Continue • Aggressive marketing of SAMDI products and services to departments • Systems for Cost Recovery • GAAP compliant, Booking, Invoicing, Certification and Weekly financial reporting • Management of debtors • Capacity to handle the number of invoices issued • Capacity to handle the follow up of debtors • To achieve an un-qualified audit report • Access to skills development levy

15. THE WAY FORWARD • The strategic plan for SAMDI • Structure linked to the strategic plan • Revisit the strategic marketing plan • Consolidation of the funding structure

16. THANK YOU Please visit SAMDI’s website at www.samdi.gov.za