Framework for Strategic Plans and Annual Performance Plans

1. Framework for Strategic Plans andAnnual Performance Plans Portfolio Committee March 2010 1

2. Background • In May 2007 the National Treasury issued the Framework for Managing Programme Performance Information, which: • Describes the constitutional and legislative framework for performance information • Sets out the concepts of performance information and introduce standards • Describes the structures, systems and processes required to manage performance information • Defines roles and responsibilities for managing performance information • Promotes transparency by providing timely, accessible and accurate information • Section 7.2 of the FMPPI sets out the National Treasury's role in relation to performance information. Through this Framework, National Treasury is seeking to give effect to is role in the following areas: • Developing formats for accountability reporting, particularly in relation to Strategic Plans and Annual Performance Plans • Providing input into the processes to select and define performance indicators • Developing the core sets of performance information in collaboration with sector departments to ensure uniform information is produced to measure service delivery across provinces and municipalities.

3. Aims for Framework • Provide an outline of the various accountability documents, including describing their position within the overall Government-wide Monitoring and Evaluation system, as well as how they relate to each other • Set out the processes that underpin the production of these documents. • Set out a schedule aligned to the budgeting process for the production of these documents. • Provide ‘generic guides’ for the Strategic Plans and Annual Performance Plans that departments and public entities can adapt to their specific circumstances. • Assist the accounting officers and managers of departments and public entities to produce quality accountability documents that use performance information appropriately.

4. Applicability of Framework • The Framework is applicable to: • national departments • provincial departments • national and provincial public entities • Note that ‘public entities’ does not include entities that are state owned enterprises

5. What is prescribed and what are guidelines? • The Framework serves primarily as a good practice guideline • Section 5 of the Treasury Regulations (read together with Part III B of the Public Service Regulations) provide the legal basis • Proposed changes to the Treasury Regulations set out in Annexure D

6. Planning, budgeting and reporting cycle

7. The relationship and timing of the different accountability documents Fiscal Years 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Election Election Election Electoral Cycle 5 Year Election Mandate 5 Year Election Mandate ... Planning & Budgeting MTEF MTEF MTEF MTEF 5-year Strategic Plan 5-year Strategic Plan ... • Strategic Plans Budget Budget Budget Budget Budget Budget Budget Budget Budget • Annual Performance Plans and Budgets (with MTEF) APP APP APP APP APP APP APP APP APP APP APP APP In-year Reporting MR MR MR MR MR MR MR MR MR MR MR MR MR MR MR MR MR MR MR MR MR MR MR MR MR MR MR MR MR MR MR MR MR MR MR MR MR MR MR MR MR MR MR MR MR MR MR MR • Monthly Financial Reports • Quarterly Performance Reports Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 AR AR AR AR AR AR AR AR AR AR AR AR End-year Reporting • Annual Reports (with annual financial statements) Long-term Reporting • End-term Reviews EPR EPR

8. Structure and content planning documents Strategic Plan Annual Performance Plan Part A: Whole Department Part A: Whole Department Strategic Goals Updated Situational Analysis Vision Mission Values Primarily SMART Impact and Outcome Indicators with 5-Year Targets (if possible) Revisions to legislative and other mandates Legislativeand other mandates Situational Analysis Service Delivery Environment Institutional Capacity Overview of Budget and MTEF Part B: Programmes / sub-programmes Part B: Programmes / sub-programmes Programme purpose For each Programme (and selected sub-programme) Strategic Objectives Programme purpose SMART Annual and MTEF Targets for Strategic Objectives For each Programme(and selected sub-programme) Resource considerations Reconciling Performance Targets and Budgets Primarily SMART Output Indicators with 5-Year Targets Programme Performance Indicatorswith SMART Annual and MTEF Targets Quarterly targets for indicators (if possible) Risk management Links to the capital plan Links to the capital plan Other information Other information Annexures: Background information Annexures: Revisions to Strategic Plan (if any)

9. The hierarchy in the relationship between planning concepts

10. Definitions: Vision, Mission and Values • Vision • The vision is an inspiring picture of a preferred future. A vision is not time bound and it serves as a foundation for a system of strategic planning. • Mission • The mission must set out the reason for a state institution’s existence based on legislative mandates, functions and responsibilities. The mission should succinctly identify what the institution does, why, and for whom. • Values • Values identify the principles for the conduct of the institution in carrying out its mission. Institutional values are derived in conjunction with the institution’s mission. It defines the way in which the institution does business by articulating management policies and principles.

11. Definitions: Strategic goals • Definition • Strategic goals are areas of institutional performance that are critical to the achievement of the mission. Strategic goals should stretch and challenge the institution, but must be realistic and achievable. They are the measures the institution wants to be used to assess its effectiveness in achieving its mission. • Strategic goals should primarily focus on impacts and outcomes, but may deal with other areas as well. A strategic goal should ideally be written as a performance statement that is specific, measureable, achievable, relevant and time-bound (SMART). • Duration • Strategic goals would normally span at least five years, but may also be applicable to longer periods. • Format • For each strategic goalthe institution must also complete a Technical Indicator Definition (see Annexure C), which must be posted on the institution’s website, along with its Strategic Plan.

12. Definitions: Budget programmes • Every institution must develop, in consultation with the National Treasury, a budget programme and sub-programme structure that is aligned to the main areas of service delivery responsibility within the institution’s mandate. • Definition • A programme is a group of independent, but closely related services or activities, designed to achieve common goals and objectives within the institution’s mandate, and forms one of the main segments of an institutions budget. In most instances a programme should have an identifiable target population. • A programme purpose is a statement that sets out in broad terms the main areas of service delivery for which funds are allocated to the different programmes and sub-programmes. • Duration • Once an institution has an appropriate budget programme structure in place, it should only change in response to a specific expansion or contraction in the institution’s mandate. • Discussion • It is not necessary for the budget structure of a department or public entity to reflect its organisational structure. This is particularly so for departments and public entities that deliver services through institutions such as police stations, courts, prisons, schools, hospitals, museums, theatres or regional offices.

13. Definitions: Strategic objectives • Definition • Strategic objectives must state clearly what the institution intends doing or producing in order to achieve the strategic goals it has set for itself. • Strategic objectives should generally be stated in the form of an output statement, though in some circumstances institutions may also choose to specify strategic objectives in relation to inputs and activities or outcomes. • A strategic goal should ideally be written as a performance statement that is specific, measureable, achievable, relevant and time-bound (SMART). • Strategic objectives must be developed for each programme and, if the institution chooses, also for selected sub-programmes. • Duration • Strategic objectives, like strategic goals, are likely to be applicable to longer periods, but the targets set in the Strategic Plan must span the five-year planning period, while those set in the Annual Performance Plan, must span the current Budget year and the MTEF. • Format • For each strategic objectivethe institution must also complete a Technical Indicator Definition (see Annexure C), which must be posted on the institution’s website, along with its Strategic Plan.

14. Definitions: Programme Performance Indicators • Definition • Programme performance indicatorsare a set of core indicators that the institution identifies in its Annual Performance Plan for tracking and accounting on its on-going performance within a particular programme or sub-programme. • The set of indicators should facilitate the assessment of the overall performance of the department as a whole and its programmes, including issues of value for money in relation to the use of resources, as well as issues of equity. • All programme performance indicators must be SMART. • Duration • Programme performance indicators are likely to be applicable to measuring performance over longer periods, but the targets set in the Annual Performance Plan, must span the current Budget year and the MTEF. • Format • For each indicator the institution must also complete a Technical Indicator Definition (see Annexure C), which must be posted on the institution’s website, along with its Annual Performance Plan.

15. Timeframes for key processes for national departments

16. Timeframes for key processes for provincial departments

17. Strategic Plans:Table of contents

18. Annual Performance Plans:Table of contents

19. Questions for discussion • Are the definitions for each of the key concepts right, especially programmes? • Are the formats for presenting strategic goals and objectives and performance indicators right? • Have we got the focus of the SP and APP right? • Are there any areas that should be left out or included? • Are the timeframes and processes for national and provincial government right? • Is leaving parent departments to manage processes related to public entities appropriate?

20. Questions and Comments

21. Harmonising Concepts (old framework) Link to Performance Indicators Budgeting Concepts (Appropriation Bill) BAS Concepts Strategic / CorporatePlanning Concepts DEPARTMENT VOTE VOTE VISION MISSION AIMUsually the same as the Mission VALUESValues that indicate what the departments regards to be important Targets for Impact and OutcomeIndicators STRATEGIC GOALSStatements of specific things the department wants to achieve in pursuit of its mission OBJECTIVE PROGRAMME PROGRAMME STRATEGIC OBJECTIVESStatements of what concrete things the department intends doing to achieve its strategic goals Targets for Input, Activity and Output Indicators PURPOSEStatement of the overall purpose of the programme, often with reference to the activities being funded ACTIVITY SUB-PROGRAMME SUB-PROGRAMME Targets for Input, Activity and Output Indicators Statement of the overall purpose of the sub-programme, often with reference to the activities being funded MEASURABLE OBJECTIVESSpecific input, activity and output targets for the sub-programme ELEMENT Information on Inputs ECONOMIC CLASSIFICATION ITEM SCOA classifications SCOA classifications