CGE Budget Presentation 2015-2016: Financial Management Framework and Challenges

Annual Performance Plan 2015-2016 Presentation of the associated budget To : The Portfolio Committee for Women – Parliament of RSA Vote 13

Contents • Introduction • Legislative Mandate • Service Delivery focus areas • The Financial Management framework • The CGE funding in context – A medium term perspective • General nature and structure of the CGE budget baseline • Challenges; Baseline erosion and the effect of recent budgetary reductions • The 2015/2016 proposed budget and matters related Risk Management associated with the Annual Plan Vote 13

INTRODUCTION AND CONTENTS Vote 13

Introduction • In accordance with provisions of the Constitution of South Africa, Act 108 of 1996 (chapter 13), The Public Finance Management Act of 1999 (as amended) – The Commission seek approval by Parliament; • the appropriation of funds to enable the Commission to deliver services in terms of its legislative mandate. The objects and outcomes for the appropriation period are contained in the Annual Performance Plan for 2015/2016 financial year • Furthermore; to fulfil the object for appropriation, this presentation outlines matters relating to the funding of both the short and long as well as the associated Risks relating to the achievement of the objectives stated in the strategic plan previously approved by Parliament Vote 13

Legislative Mandate Authority The Constitution of South Africa, Act 108 of 1996 Commission on Gender Equality Act, Act 139 of 1996 Promotion of Equality and prevention of Unfair Discrimination Act 4 of 2000 (PEPUDA) • In terms of Section 187 the Commission must promote respect for gender equality and the protection, development and attainment of gender equality • The Commission has the power as regulated by national legislation, which includes the power to monitor, investigate, research, educate, lobby, advise and report on issues concerning gender equality • To promote, protect, monitor, research, gender equality by exercising powers which includes investigations, the commission of public hearings , etc • In terms of section 20 of PEPUDA, the Commission must assist complainants and institute legal proceedings in the Equality Courts section 8 specifically tasked the CGE to litigate on behalf of the public against a range of prohibited grounds of unfair discrimination Vote 13

Focus areas by the Commission • Programs to enhance Public awareness and education • Outreach programs • investigation of gender related complaints and provide redress • Investigate systemic violation of gender rights in the Public and private sector (PEPUDA) • Review and ensure the creation of a legislative framework that promotes the attainment of gender equality • Monitor the state adherence to international convention and treaties Vote 13

Relevant legislation – The Financial Management framework • The Constitution of the Republic propagates and advances the values of openness and accountability. Chapter 13 of the Constitution creates the framework • Under Chapter 1 of the PFMA (The Act) the values are bolstered further by provisions stating that the object of the Act is to secure transparency, accountability and sound management of the resources • The Framework for strategic planning and Annual Performance plans of 2010 propagates that operational budgets must be linked to the institutions strategic objectives and their respective legislated mandates • Section 38 of the PFMA and related Treasury regulations promotes the integration of Risk Management practices into strategic planning and financial controls Vote 13

The CGE funding in context A medium term perspective Vote 13

The nature and structure of the CGE baseline budget • The budget of the Commission forms the main division of Vote 18 for the Ministry for women in the Presidency • Three 3 programmes constitute the budget, namely; • Commissioners Governance & Support, • Corporate/Administration Support • Main Service/Core • The top three spending drivers are: • Compensation of Employees 67% ( We are a service driven and therefore & human resources intensive) • Professional Services 7% ( Litigations, audit fees, etc) • Travel& Accommodation, event management & media – 11% (outreach & visibility are at the core our strategy) • Reports production and printing – 3% ( All work published after each research study/investigation • Telecommunications, Courier Services and vehicles expenses – 4% (Offices country-wide) • Therefore over 90% of the total spending is made out of unavoidable expenditure in the main of which majority is fixed (COE for e.g.) -Less flexibility Vote 13

Medium term figures as at Jan 2015 post MTBPS • Operations were sustained by surpluses reported (generated from interest income , donations and savings from COE – vacancies • Growth from Treasury allocation nominal at inflation rate and were eroded by higher cost of living adjustments realized above inflation Vote 13

Funding implications • The baseline is COE sensitive while the CGE rely primarily on staff to execute mandate – A dilemma from budget cuts is the direct negative implication to service delivery • Over the years, increases from national treasury averaged 6% whilst cost of living adjustments for staff and Commissioners realised higher (at 8 to 10%) therefore eroding the base for Goods & Services critical for service delivery • Proclaimed through MTBPS , National Treasury reduced CGE’s baseline by R3.1 m or 4% for period 2015/2016 and R4.6 m in 2016/2017. • As a result. The delivery of services relating to the CGE’s legislated mandate is significantly and negatively impacted • Owing to the COE (fixed cost) and budget structure, the situation poses very significant going concern challenges Vote 13

Impact on planning for the current period Vote 13

Impact of funding deficiencies on 2015/2016 plans • A R16 million budget deficit was noted. The activities for effective realisation of the strategic objectives in the plan were not adequately funded • The establishment will not be populated on unfilled position at head office • The scale of the APP activities was reduced and/or activities removed from plan, impacting on effectiveness in service delivery e.g. Programmes on advocacy, campaigns, number of clinics, staff training, etc Vote 13

Interim mitigating interventions • Cost containment plans implemented stringently • Efficiency gains on: • Use of fleet, telecommunications • Avoiding duplication of service • Use of media and alternative distribution methods for service delivery • Cost control plans target to yield, albeit under severe pressure - R6 million • Curtailment of core APP – R4 million • The establishment not filled with positions at Head office in the main – R6 million • Review the current Business model • Escalation of funding discussions in line with provisions of the CGE Act Vote 13

2015/2016 financial year The proposed budget Vote 13

Subprograms budget – 2015/2016 Strategic Objective 1 – R8.6m Strategic Objective 2 – R20.7m Strategic Objective 3 – R14.4m Strategic Objective 4 – R26m Approved Budget =R67.7m Final Budget = R69.7m Adjustment budget – not transferred from fiscus – R2m Vote 13

Core activities costing Total budget Direct APP goods & Services Vote 13

Medium term allocations – 2015/16 Vote 13

Distribution of allocation • Salaries make up two thirds of allocation – R46.7 m • 57% (R26,.7 m) of COE attributable to core service delivery –SO1 to SO3 • Operating overheads at 19% of full budget Vote 13

Strategic objective 1 Vote 13

SO 1 – Key points • 12% (R8.5m) budgeted of which 62% is COE (R5.3m) • Transformation hearings; a flagship activity to hold public and private sector accountable consumes most of the resources in this strategic objective – R5.5 m • The auditing/administration of gender barometer and related dialogues with policy makers also contributes materially to spending in this SO – R1.3 million Vote 13

Risk management - SO 1 Vote 13

SO 2 – Key points • Taking case from complainants/public and conducts investigation of systemic gender rights is main focus in terms of PEPUDA (s8 & 20) and CGE Act • Also COE reliant – services from internal staff members viz. Education and Legal Officers in the main, supported by HQ and Commissioners • Total allocation for the SO is R20, 7 m where COE amounts to R12.1 m (59% of SO budget) • The SO represents 30% of the total budget Vote 13

SO 3 – Key points • This SO is set to monitor the state compliance to international instruments, in which multi-disciplinary teams are used to research, monitor and develop reports for Parliament and multi-lateral institutions • Key activities for 2015 reporting are: CEDAW, MDG & AGDI, SCW, Beijing PFA • The expenditure of R14.4 m constitutes 33% of the budget for the main program. This is largely made out of by salaries (personnel time) & travel for research and reporting to multi-lateral institutions as well as printing/publications of the related reports Vote 13

SO 4 – Key points • The Governance, administration and management is anchored on this SO: Commissioners, CEO and Support functions carry out activities to ensure accountability, efficiencies, effectiveness of operations. • R27m or 37% (of total budget) and is earmarked for spending as follows; • Salaries –R20 m (Prior year R19m ) – the structure will not be populated with vacant positions for lack of funds • G&S – R6 m compared to prior year budgeted at R10m Vote 13

Thank you!!! CGE Free Call Hotline 0800 007 709 Vote 13

CGE Budget Presentation 2015-2016: Financial Management Framework and Challenges