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Presentation to the Standing Committee on Appropriations 12 November 2014. PRESENTATION OUTLINE. Performance of the Department for the first six months of the 2014/15 financial year ending 30 Sept 2014. Expenditure of the department for the first 6 months of the 2014/15 financial year
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Presentation to the Standing Committee on Appropriations 12 November 2014
PRESENTATION OUTLINE • Performance of the Department for the first six months of the 2014/15 financial year ending 30 Sept 2014. • Expenditure of the department for the first 6 months of the 2014/15 financial year • Details and motivation for the virements of 54.5 per cent and 48.8 percent • Implications of funding shifts on service delivery indicators
INTRODUCTION The 2014/15 financial started the with an election in May 2014, ending one administration and beginning a new administration. This then meant that the department had to table a new APP for the 2014/15 financial year after the elections. This provided an opportunity to the department to recraft its indicators, refocus its work and properly align its work to its 6 high level strategic objectives to increase its service delivery and impact. The exercise was intended at sharpening the work of the department, increase service delivery and reemphasise the role of the department to achieve a greater impact.
The EDD’s core roles • Develop strategies and measures to make economic growth more inclusive, especially supporting and encouraging job creation • Encourage and help all state agencies to work together for inclusive growth and job creation • Provide secretariat and technical support for the Presidential Infrastructure Coordinating Commission – act as secretariat to meetings; manage monitoring and evaluation; unblock projects; and propose cross-cutting models and guidelines • Facilitate social dialogue • Oversees the Industrial Development Corporation (IDC) and the Small Enterprise Finance Agency (sefa) • Oversees two national regulators – the competition authorities (the Competition Commission and the Competition Tribunal) and the International Trade Administration Commission (ITAC). • Undertake other activities as required to assist investments and programmes that lead to new kinds of economic activity and job creation, for instance by speeding up bureaucratic authorisations, assisting in obtaining infrastructure or finding sources of financing (although the EDD itself does not provide funding)
ANNUAL PERFORMANCE PLAN FOR 2014/15 Subsequent to the elections in May 2014, the department retabled its APP for the 2014/15 financial year. The performance covered in this presentation reports against the tabled APP which has 22 KPIs which is a consolidation of the earlier version of the APP which had 35 KPIs.
Details and motivation for virements • EDD’s second term of existence in line with the new MTSF, adopted 5 core strategic objectives and re-aligned the Annual Performance Plan (APP) to these. • The revised objectives and APP have necessitated a review of the organisational structure and skills sets required to achieve the mandate. • The governance processes of finalising the revised organisational structure aligned to the new strategic direction is an advanced stage of finalisation • Compensation of Employees’ baseline allocation (ENE 2014) is for 166 funded posts. The targeted number as per the approved APP2014/15 was 146. As at 30 Sept 2014, EDD had 116 filled posts. • EDD is able to meet its targets through overtime and assistance received from entities and this has contributed to the cost saving measures • In the Adjusted ENE, EDD did a straightline projection based on historical spending for the first 5 months of the year and projected for the remainder of the 7 months on a number of posts. • Savings of R30.895 million from the current largely core unfilled posts and the envisaged vacancies for the remainder of the financial year were identified during the AENE.
Details and motivation • Goods and services: Funds (R3.5 mil) were reprioritised for the tenant installations required to house EDD in one office block on the dti campus. Currently EDD officials occupy 3 different building within the campus which is inefficient. • Funding was reprioritised for phase 2 of the innovative building technologies project commission to the CSIR: (R1.6 mil.) • A new transfer was introduced to provide for the 30% of the 1% earmarked for training by PSETA • The biggest amount of the generated savings were recommended to support small businesses as an additional transfer to sefa in order to augment the budget cut of R50 million to the Economic Competitiveness Support Package.
Details and motivation • The aforementioned virements were made in line with the “Technical Guidelines for the preparation of Adjusted Estimates of National Expenditure”, as provided for by section 30 of the PFMA 1 of 1999 Page 9 “Approval is required from the legislature for the virements which: result in utilisation of funds that amount to more than 8 per cent of the amount appropriated for a programme (shifts between different segments within a programme do not affect overall amount appropriated for a programme, only virements from a programme effectively reduce the programme budget”. • EDD’s has observed National Treasury requirements that virements do not exceed 8% of the appropriated allocation including the related reporting requirements.
AENE 2014/15 virements • Programme 2: Economic Policy Development: ENE 2014/15 allocation was R23.075 million and R11.272 million(48.5%) was proposed as virement for legislature’s approval mainly in support of small businesses competitiveness and support package. • The funds was intended for: • Mainly venues, travel and facilities amount in line with the strict enforcement of the cost containment measures to support or increase small business allocation transfer to sefa – R9.062 million • Compensation of employees – posts not yet filled- R2.21 million • Programme 4: Economic Development and Dialogue: ENE 2014/15 allocation was R15.261 million and R8.377 million (54.9%) was proposed as virement mainly in favour of small businesses competitiveness and support package (R6.151 million) and R2.2 million for labour saving devices. • The funds were initially intended to: • Fill posts and as outlined, these are savings realised from vacant posts that will be filled in line with the revised strategic objectives and APP and operational costs that would have been incurred had posts been filled.
Implication of funding shifts on service delivery indicators • As EDD is still in the process of reviewing and finalising its structure, care is being taken that its objectives and targets are achieved and, at times, exceeded. • The HR turnaround strategy is prioritizing the appointments of critical posts to ensure delivery of core business including provincial and local departments initiatives, economic regulatory bodies and job drivers.
THANK YOU SIYABONGA
