Description
Provincial Government Western Cape Provincial Treasury Strategic Plan for the fiscal years 2010 11 2014 15.
Provincial Government Western Cape
Provincial Treasury
Strategic Plan
for the fiscal years
2010/11 – 2014/15
PR: 16/2010
ISBN: 978-0-621-39107-7
To obtain additional copies of this document please contact:
Western Cape Provincial Treasury
Directorate Financial Management
Private Bag X9165
4 Dorp Street
CAPE TOWN
Tel.: (021) 483-5613
Fax: (021) 483-5773
e-mail: [email protected]
Om addisionele afskrifte van hierdie dokument te bekom tree in verbinding met:
Wes-Kaapse Provinsiale Tesourie
Direktoraat Finansiële Bestuur
Privaatsak X9165
Dorpstraat 4
KAAPSTAD
Tel.: (021) 483-5613
Faks: (021) 483-5773
e-mail: [email protected]
Iikopi zolu xwebhu ungazifumana nokuqhagamshelana ne:
Western Cape Provincial Treasury
Directorate Financial Management
Private Bag X9165
4 Dorp Street
CAPE TOWN
Umnxeba: (021) 483-5613
Ifaksi: (021) 483-5773
e-mail: [email protected]
Foreword
Over the years, the Provincial Treasury of the Western Cape has developed a reputation of
being a well-run ship. Naturally, fresh blood comes with new ideas and the desire to do
things even better.
Over the next five years, Treasury will focus its efforts on promoting clean and efficient
governance across all departments, entities and municipalities. In close conjunction with the
Ministry, Treasury will put systems in place that will alert to any potential corruption threats,
to which responses will be prioritised. We will instil a sense of responsibility, across the
board and in cooperation with other departments, that government’s budget must be used
carefully, transparently and with full accountability. In so doing, we will lead this Province
and the local governments within our ambit, to higher levels of service delivery. Treasury
will also ensure that it maintains the efficient allocation of the Province’s budget, and
achieves marginal real growth.
The Provincial Treasury accepts that it has an important role to fulfil which cannot be
performed in isolation from National Treasury. It is therefore committed to strengthening its
relationship with the latter and developing a sound working platform with other provinces,
so that we can learn from their experiences and transfer any knowledge gained.
The modernisation process that was embarked upon in several departments will be phased in
as from 1 April 2010. From that date, Treasury will hand over the Strategic and Annual
Performance Plan of the Internal Audit Component and Corporate Services Component to
the Department of the Premier. Budget shifts for these components will only be reflected in
the adjustments estimates of 2010, once all due administrative and consultation procedures
are duly recorded and in place.
It has become evident that in government, performance information plays an increasingly
important and indispensable role. Rightly so, the contents of these documents are subject to
external auditing and concerted efforts are made to track and monitor their progress on a
quarterly basis. This comprehensive mandate has been duly taken up by the Provincial
Treasury in conjunction with the Department of the Premier, and I have every confidence that
my team will fulfil on its responsibilities.
ALAN WINDE
EXECUTIVE AUTHORITY OF FINANCE, ECONOMIC DEVELOPMENT AND TOURISM
OFFICIAL SIGN-OFF
It is hereby certified that this Strategic Plan:
– Was developed by the management of the Western Cape Provincial Treasury under the
guidance of Mr Alan Winde.
– Takes into account all the relevant policies, legislation and other mandates for which the
Western Cape Provincial Treasury is responsible.
– Accurately reflects the strategic goals and objectives which the Western Cape Provincial
Treasury will endeavour to achieve over the period 2010/11 – 2014/15.
A Gildenhuys (Mr) Signature ________________________
Chief Financial Officer
J C Stegmann (Dr) Signature ________________________
Accounting Officer
Approved by
A Winde (Mr) Signature ________________________
Executive Authority
CONTENTS
i
Contents
Foreword
Contents
PART A: STRATEGIC OVERVIEW
1. Vision 1
2. Mission 1
3. Values 1
4. Legislative and other mandates 1
5. Situational analysis 5
5.1 Performance environment 5
5.2 Organisational environment 5
5.3 Description of the strategic planning process 5
6. Strategic goals of the department 7
PART B: STRATEGIC OBJECTIVES
7. Programme 1: Administration 11
7.1 Programme Purpose 11
7.2 Programme structure 11
7.3 Strategic objectives 12
7.4 Resource considerations 16
7.5 Risk management 16
8. Programme 2: Sustainable Resource Management 18
8.1 Programme Purpose 18
8.2 Programme structure 18
8.3 Strategic objectives 20
8.4 Resource considerations 24
8.5 Risk management 25
STRATEGIC PLAN 2010/11 – 2014/15
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9. Programme 3: Assets and Liabilities 28
9.1 Programme Purpose 28
9.2 Programme structure 28
9.3 Strategic objectives 30
9.4 Resource considerations 33
9.5 Risk management 34
10. Programme 4: Financial Governance 36
10.1 Programme Purpose 36
10.2 Programme structure 36
10.3 Strategic objectives 37
10.4 Resource considerations 39
10.5 Risk management 39
PART C: LINKS TO OTHER PLANS
11. Links to the long-term infrastructure and other capital plans 42
12. Conditional grants 42
13. Public entities 42
14. Public-private partnerships 43
CONTENTS
Abbreviations
Abet Adult Basic Education and Training
AC Audit Committee
ACFS Annual Consolidated Financial Statements
ADP Accelerated Development Programme
AFR Asset Financing Reserve
AFS Annual Financial Statements
AGSA Auditor-General of South Africa
AO Accounting Officer
APP Annual Performance Plan
ASGISA Accelerate and Shared Growth Initiative of SA
ASB Accounting Standards Board
BAS Basic Accounting System
BBBEE Broad Based Black Economic Empowerment
BEE Black Economic Empowerment
BER Bureau for Economic Research
BI Business Intelligence
BIF Business Insight Folder
BPO Business Process Outsourcing
BS Budget Statement
BTO Budget Treasury Office
CASIDRA Cape Agency for Sustainable Development in Rural Areas
CeI Centre for e-Innovation
CFO Chief Financial Officer
CG Conditional grant
CIDB Construction Industry Development Programme
CPD Corporation for Public Deposits
DBC Departmental Bid Committee
DBSA Development Bank of Southern Africa
DLGH Department of Local Government and Housing
DORA Division of Revenue Act
DoTP Department of The Premier
DPWT Department of Public Works and Transport
EA Economic Analysis
EDU Economic Development Unit
EEP Employment Equity Plan
EOC Employer of Choice
EPS Electronic Purchasing System
EPWP Expanded Public Works Programme
ERA Enterprise Risk Assessor
FET Further Education Training
FETC Further Education and Training Certificate
STRATEGIC PLAN 2010/11 – 2014/15
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FMCM Financial Maturity Capability Model
FMIP Financial Management Improvement Plan
FMS Financial Management System
GAMAP Generally Accepted Municipal Accounting Practice
GDPR Gross Domestic Product per Region
GEPF Government Employees Pension Fund
GIAMA Government-wide Immovable Asset Management Act
GRAP Generally Recognised Accounting Practice
HDI Historically Disadvantaged Individual
HOD Head of Department
HOT Head Official Treasury
HR Human Resource
HRD Human Resource Development
HRDS Human Resource Development Strategy
HRM Human Resource Management
HSRC Human Sciences Research Council
IA Internal Audit
ICS Improvement in Conditions of Service
ICT Information Communication Technology
IDIP Infrastructure Delivery Improvement Programme
IDP Infrastructure Delivery Plan
IDP Integrated Development Plans
IDP Individual Development Plans
IE iKapa Elihlumayo
IFMS Integrated Financial Management System
IGCC Intergovernmental Cash Co-ordination
IIA Institute for Internal Auditors
IMFO Institute of Municipal Finance Offices
IMLC Institutional Management and Labour Committee
IPMU Infrastructure Programme Management Unit
IT Information Technology
IYM In-Year Monitoring
LED Local Economic Development
LG Local Government
LG MTEC Local Government – Medium Term Expenditure Committee
LOGIS Logistical Information System
MEC Member of Executive Council
MEDS Micro Economic Development Strategy
MEDSAS Medical Stores Administration System
MFMA Municipal Finance Management Act, 2003 (Act 56 of 2003)
MLO Media Liaison Officer
MPSA Minister of Public Service and Administration
MSP Master Systems Plan
MTBPS Medium Term Budget Policy Statement
MTEC Medium Term Expenditure Committee
CONTENTS
MTEF Medium Term Expenditure Framework
MTFF Medium Term Fiscal Framework
MTREF Medium Term Revenue Expenditure Framework
NMIR National Minimum Information Requirements
NT National Treasury
NTR National Treasury Regulations
OD Organisational Development
PDC Provincial Development Council
PERSAL Personnel and Salary Administration System
PER&O Provincial Economic Review and Outlook
PES Provincial Equitable Share
PFMA Public Finance Management Act, 1999 (Act 1 of 1999)
PGDS Provincial Growth and Development Strategy
PGWC Provincial Government Western Cape
PI Performance Indicator
PMDS Performance Management Development System
PMF Performance Management Frameworks
PMI Performance Measure Indicator
PMU Programme Management Unit
PPP Public Private Partnership
PPPFA Preferential Procurement Policy Framework Act
PPSC Provincial Portfolio Steering Committee
PSCBC Public Service Commission Bargaining Council
PSDF Provincial Spatial Development Framework
PT Provincial Treasury
PTF Provincial Treasury Forum
PTM Provincial Treasury Management
PTRPA Provincial Tax Regulation Process Act
QPR Quarterly Performance Report
REAL Revenue, Expenditure, Assets, and Liabilities
RFP Request for Proposal
RFQ Request for price Quotations
SAQA South African Qualification Authority
SARS South African Revenue Services
SCM Supply Chain Management
SCoA Standard Chart of Accounts
SCOF Standing Committee on Finance
SCOPA Standing Committee on Public Accounts
SDBIP Service Delivery Budget Implementation Plan
SDR Service Delivery Review
SEP Socio-Economic Profile
SER Socio-economic Review
SETA Sector Education and Training Authority
SIP Strategic Infrastructure Plan
SITA State Information Technology Agency
SME Small and Medium Enterprises
STRATEGIC PLAN 2010/11 – 2014/15
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SMME Small Medium and Micro Enterprise
SMS Senior Management Service
SPMS Staff Performance Management System
TCF Technical Committee on Finance
TCO Total Cost of Ownership
TELKOM Telecommunication
TMM Treasury Management Meeting
TQM Total Quality Management
URS User Requirement Statement
WCED Western Cape Education Department
WCGRB Western Cape Gambling and Racing Board
WC-MTBPS Western Cape Medium Term Budget Policy Statement
WCSD Western Cape Supplier Database
WSP Workplace Skills Plan
PART A: STRATEGIC OVERVIEW
1
PART A: STRATEGIC OVERVIEW
1. Vision
Change agent in resource allocation and utilisation practices in pursuing a systematic
reduction in social and economic disparities.
2. Mission
To obtain financial supportive means and foster the optimal utilisation of resources by means
of sound governance practices.
3. Values
The Provincial Treasury cherishes the following values:
• To give effect to the Public Service Code of Conduct.
• To be of service, to empower people.
• To be an employment equity employer.
• To be aware of, and to cultivate respect for our country’s heterogeneity.
• To benefit all people in the Western Cape.
4. Legislative and other mandates
The legislative mandate within which the Provincial Treasury operates consists of the
following mix of national and provincial legislation:
Annual Division of Revenue Act
To provide for the equitable division of revenue generated nationally, including conditional
grants, amongst the three spheres of government and matters incidental thereto.
Basic Conditions of Employment Act, 1997 (Act 75 of 1997)
To provide regulatory prescripts in addition to the Public Service Act, 1994 and the Public
Service Regulations, 2001 regarding the employment conditions for Treasury staff.
Borrowing Powers of Provincial Government Act, 1996 (Act 48 of 1996)
To provide norms and conditions which the Treasury must adhere to in negotiating loans for
the Provincial Government.
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Employment Equity Act, 1998 (Act 55 of 1998)
To regulate the processes and procedures of the Treasury in achieving a diverse and
competent work force broadly representative of the demographics of the Western Cape and
eliminating unfair discrimination in employment towards implementing employment equity.
Executives’ Members Ethics Act (Act 82 of 1998)
To provide for a code of ethics governing the conduct of members of provincial Executive
Councils, and to provide for matters connected therewith.
Government Employees, Pension Law, 1996 (Act 21 of 1996)
To make provision for the payment of pensions and certain other benefits to employees of
this department and to their dependants or nominees, and to provide for matters incidental
thereto.
Government Immovable Asset Management Act, 2007 (Act 19 of 2007)
To provide for a uniform framework for the management of an immovable asset that is held
or used by a provincial department and to ensure the coordination of the use of an
immovable asset with the service delivery objectives of a provincial department.
Intergovernmental Fiscal Relations Act, 1997 (Act 97 of 1997)
To define the role of the Minister of Finance, Economic Development and Tourism and that of
the Treasury as representative of the Provincial Government in promoting cooperation
between other spheres of government on fiscal, budgetary and financial matters; to provide
insight into the prescribed processes for the determination of the equitable share and
allocation of revenue generated nationally and for matters in connection therewith.
Intergovernmental Relations Framework Act, 2005 (Act 13 of 2005)
To establish a framework for the national government, provincial governments and local
governments to promote and facilitate intergovernmental relations; to provide for
mechanisms and procedures to facilitate the settlement of intergovernmental disputes; and to
provide for matters connected therewith.
Labour Relations Act, 1995 (Act 66 of 1995)
To regulate and guide the Treasury in recognising and fulfilling its role in effecting labour
harmony and the democratisation of the work place.
Local Government: Municipal Finance Management Act, 2003 (Act 56 of 2003)
To regulate financial management in the local sphere of government; to require that all
revenue, expenditure, assets and liabilities of municipalities and municipal entities are
managed economically, efficiently and effectively; to determine the responsibilities of persons
entrusted with municipal borrowing; to make provision for the handling of financial
emergencies in municipalities; and to provide for matters connected therewith.
PART A: STRATEGIC OVERVIEW
3
Money Bills Amendment Procedure and Related Matters Act, 2009 (Act 9 of
2009)
To provide for a procedure to amend monetary bills before Parliament; to provide for norms
and standards to amend monetary bills before provincial legislatures and other related
matters.
Occupational Health and Safety Act, 1993 (Act 85 of 1993)
To provide for the health and safety of persons at work and for the health and safety of
persons in connection with the use of plant and machinery; the protection of persons other
than persons at work against health and safety hazards arising out of or in connection with
the activities of persons at work; to establish an advisory council for occupational health and
safety; and to provide for matters connected therewith.
Public Audit Act, 2004 (Act 25 of 2004)
To provide assistance to the Auditor-General’s Office in recovering outstanding audit fees; to
intervene on matters arising from audit reports and to provide for matters connected
therewith.
Preferential Procurement Policy Framework Act, 2000 (Act 5 of 2000)
To provide the Treasury with a regulatory framework enabling and assisting departments
and potential historically disadvantaged individuals (HDIs) in the sustainable development
and implementation of a preferential procurement system.
Promotion of Access to Information Act, 2000 (Act 2 of 2000)
To give effect to the constitutional right of access to any information held by the State and any
other person that is required for exercising or protecting any rights; and to provide for
matters connected therewith.
Promotion of Administrative Justice Act, 2000 (Act 3 of 2000)
To give effect to the right to administrative action that is lawful, reasonable and procedurally
fair and the right to request written reasons for administrative action as contemplated in
section 33 of the Constitution of the Republic of South Africa, 1996; and to provide for matters
incidental thereto.
Provincial Tax Regulation Process Act, 2001 (Act 53 of 2001)
To regulate the intergovernmental process that must be followed by provinces in exercising
their powers in terms of section 228 of the Constitution to impose taxes, levies and duties, and
flat rate surcharges on the tax bases of any tax, levy or duty imposed by national legislation;
and to provide for matters connected therewith.
Public Finance Management Act, 1999 (Act 1 of 1999) (PFMA)
To regulate financial management in the Treasury to ensure that all revenue, expenditure,
assets and liabilities of the Treasury are managed efficiently and effectively; to provide for the
responsibilities of persons entrusted with financial management in the Treasury and to
provide for matters connected therewith. This Act describes the powers and functions of
Treasuries to direct their responsibilities with respect to other departments and public
entities.
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Public Service Act, 1994 (Act 103 of 1994) as amended
To provide for the organisation and administration of the Treasury and for human resource
management which includes the regulation of conditions of employment, terms of office,
discipline, retirement and the discharge of staff members of the Treasury and matters
connected therewith.
Remuneration of Public Office Bearers Act (Act 20 of 1998)
To provide for a framework for determining the upper limit of salaries and allowances of
Premiers, members of Executive Councils, members of Provincial Legislatures and members
of Municipal Councils; to provide for a framework for determining pension and medical aid
benefits of office bearers; to provide for the repeal of certain laws; and to provide for matters
connected therewith.
Skills Development Act, 1998 (Act 97 of 1998)
To provide an institutional framework to devise and implement national, sector and work
place strategies to develop and improve the skills of the South African work force; to
integrate those strategies within the National Qualifications Framework contemplated in the
South African Qualification Authority Act, 1995; to provide for learnerships that lead to
recognised occupational qualifications; to provide for the financing of skills development by
means of a levy-grant scheme and a National Skills Fund; to provide for and regulate
employment services; and to provide for matters connected therewith.
Skills Development Levy Act, 1999 (Act 9 of 1999)
To provide for the imposition of a skills development levy; and for matters connected
therewith.
Taxation Laws Amendment Act (Act 32 of 1999)
To amend the Marketable Securities Tax Act, 1948, in order to effect certain textual
alterations; to provide that a certain part of the salary of public office bearers is deemed to be
an allowance; to further regulate the taxation of the investment income of controlled foreign
entities and the investment income arising from donations, settlements or other dispositions;
to limit the application of certain exemptions; to provide for further exemptions; to further
regulate the allowance for tax purposes in respect of intellectual property and matters
relating thereto.
Western Cape Direct Charges Act, 2000 (Act 6 of 2000)
To provide for the withdrawal of State moneys from the Western Cape Provincial Revenue
Fund as a direct charge in accordance with the Constitution of the Republic of South Africa,
1996, the Constitution of the Western Cape, 1997 (Act 1 of 1998) and the Public Finance
Management Act, 1999 (Act 1 of 1999), and matters incidental thereto.
Western Cape Gambling and Racing Law, 1996 (Law 4 of 1996)
To provide for regulatory prescripts to support the responsible Minister in ensuring sound
financial administration and management and matters incidental thereto by the Western
Cape Gambling and Racing Board.
PART A: STRATEGIC OVERVIEW
5
Western Cape Law on the Powers and Privileges of the Provincial Legislature
Amendment Act, 1998 (Law 3 of 1998)
To provide the Treasury with regulatory prescripts to assist the Provincial Legislature to meet
its financial obligations as determined by legislation.
5. Situational analysis
5.1 Performance environment
In spite of all the initiatives regarding the fiscal initiatives that have been launched since 1994
both socio-economic disparities and the state of fiscal management within government, plus a
range of other issues, remain a challenge.
The scope of responsibility of Provincial Treasuries has also increased over the last 15 years
with greater involvement in the local sphere of government and an increasing role of fiscal
discipline and direction within provincial departments and associated entities. The aim of the
Provincial Treasury over the next five years will be to enhance allocative efficiency within the
context of marginal real growth in resource allocation and to assist departments and
municipalities to achieve higher levels of service delivery. These endeavours will place more
emphasis on an interactive and cooperative approach, accepting change as a norm. Greater
emphasis will therefore be on day to day practical improvements and to systematically
achieve those targets that were not met over the last 15 years, apart from achieving the goals
as set out in this document.
5.2 Organisational environment
New strategic goals were compiled for 2010/11 – 2014/15 for the Provincial Treasury to better
fulfil its constitutional mandate to address the socio-economic challenges of the Province in
tandem with departments, municipalities and other stakeholders. Furthermore, the
Department of the Premier is driving a multi-year modernisation process, which has been
initiated by the new Provincial Government that came into power in May 2009. The changes
in strategic goals therefore also necessitated new strategic objectives and performance
indicators that will become effective as from 1 April 2010.
5.3 Description of the strategic planning process
The new Strategic Plan (SP) and Annual Performance Plan (APP) compiled by the Provincial
Treasury is in line with National Treasury’s latest prescripts applicable to provincial
departments and entities for the new five-year planning period. Provincial Treasury’s SP and
APP processes commenced early in 2009 and was the end result of a culmination of a great
deal of analytical work and the joint effort of managers and their units to recompile their
strategic goals, strategic objectives and performance indicators from a new base. These
individual and team efforts were workshopped with the Minister of Finance, Economic
Development and Tourism early in January 2010 to obtain his final concurrence and support.
The strategic process of planning will carry on over the next six years to achieve even further
refinement and will be based on the measurement of performance at quarterly and annual
intervals. Each performance indicator has to be substantiated for feedback and approval by
STRATEGIC PLAN 2010/11 – 2014/15
6
the Accounting Officer and the responsible Minister. In turn, this information will be
subjected to both internal and external audits.
The effect of the modernisation process will, among others, result in a shift of the Internal
Audit (IA), Human Resource Management (HRM) and Enterprise Risk Management (ERM)
components to the Department of the Premier (DoTP). In the relevant sections, appropriate
notes have been inserted, where these components have been affected by mooted changes
with all performance measures and goals captured within the SP and APP of DoTP.
PART A: STRATEGIC OVERVIEW
7
6. Strategic goals of the department
Strategic Goal 1 Assist the member of the Executive Council and the HoD with the delivery
of the assigned functions to them.
Goal statement Render effective strategic secretarial support, administrative support and
communication services.
Justification Ensure that the vision, mission, strategic goals and objectives of the
Department are achieved.
Links Links to the Provincial Strategic framework objective of clean, value driven,
efficient and effective and responsive government.
Strategic Goal 2 Effective financial management of the department up to a level 3+ financial
capability rating.
Goal statement Deliver financial management and associated advisory services; to make
limited provision for accommodation requirements.
Justification Reduce risk, ensure efficient and effective use of financial resources, and
ensure clean audit reports and sustainability within the department.
Links Links to the Provincial Strategic framework objective of clean, value driven,
efficient and effective and responsive government.
Strategic Goal 3 Revenue adequacy, optimisation and efficiency of revenue collection for
departments and municipalities to achieve a level 3+ financial capability
rating.
Goal statement Efficient revenue sources and fiscal policy, which addresses financing
requirements with no adverse economic effects.
Justification The limited and constraint fiscal envelope requires provincial and local
government to ensure the optimum and efficient collection of all potential
revenue sources.
Links Links to the Provincial Strategic framework objective of clean, value driven,
efficient and effective and responsive government.
Strategic Goal 4 Responsive budgets for all provincial departments, municipalities and
entities to achieve a level 3+ financial capability rating.
Goal statement Promote the development of responsive departmental, municipal and entity
budgets that contribute to improvements of selected socio–economic
outcomes through economic analysis, budget policy formulation, budget
allocations and monitoring of performance.
STRATEGIC PLAN 2010/11 – 2014/15
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Justification Provincial, municipal and entity budgets are meant to play key roles as
policy instruments to address social and economic challenges. The
achievements of socio-economic imperatives need to be supported with
appropriate budget policy and budgetary allocations.
Budgets that address selected socio economic outcomes and government
priorities/goals as well as effective M&E processes to monitor performance of
budget policy and plans are important to ensuring effective resource
allocation.
Links Links to the Provincial Strategic framework objective of clean, value driven,
efficient and effective and responsive government.
Budget and related documents such as municipal integrated developments
plans, spatial development framework, local economic development plans,
which is supported by socio-economic statistics obtainable from Community
Surveys and National Census and the Local Government Turnaround
Strategy.
Strategic Goal 5 Credible budgets within departments, municipalities and entities to achieve
a level 3+ financial capability rating.
Goal statement Budgets that are sustainable, operationally efficient, purpose driven and
implemented as planned.
Justification Improve the sustainability and credibility of provincial, municipal and entity
budgets, the monitoring of implementation to enhance x-efficiency, financial
prudence and fiscal discipline in order to maximise the capacity of provincial
departments and municipalities to deliver services.
Links Links to the Provincial Strategic framework objective of clean, value driven,
efficient and effective and responsive government.
Links to the national Medium Term Spatial Framework’s outcome of a,
“responsive, accountable, effective and efficient local government system”,
and to the strategic objective “financial viability” of the five year strategic
agenda of local government, as well as to “financial management” of the
Local Government Turnaround Strategy.
Strategic Goal 6 Enhance departmental and municipal capacity and performance to achieve a
level 3+ financial capability rating for SCM and moveable asset
management.
Goal statement Assist departments and municipalities in respect of SCM and moveable asset
management to build capacity and enforce good governance practices; and for
departments to enhance relationships with BEE and SMME vendors in support
of preferential procurement imperatives and implement a transversal contract
model for the province that gives effect to economies of scale and value for
money.
PART A: STRATEGIC OVERVIEW
9
Justification Ensure that the vision, mission, strategic goals and objectives of the
Department are achieved.
Links Links to the Provincial Strategic framework objective of clean, value driven,
efficient and effective and responsive government.
Strategic Goal 7 Increase the level of infrastructure delivery to achieve a level 3+ financial
capability rating (departments of Education, Health, Transport and Public
Works and selected municipalities) and the sound management of PPP
projects.
Goal statement Effective and efficient delivery of infrastructure and management of
immovable assets, including PPP projects through institutionalising best
practice, systems, tools and building capacity.
Justification Departments and municipalities still lack the ability in terms of capacity,
business processes, etc. to achieve optimal investment in infrastructure and
sound management of immovable assets.
Links Links to the Provincial Strategic framework objective of clean, value driven,
efficient and effective and responsive government, as well as the National
Government’s Infrastructure Delivery Improvement Programme (IDIP).
Strategic Goal 8 Monitor and evaluate cash flow and investment management so that it is
sustainable and credible and will enhance service delivery and improve
liquidity in departments and municipalities.
Goal statement Ensure sustainable, credible and effective cash flow and investment
management in departments and municipalities.
Justification By ensuring more effective and efficient cash flow and investment
management it will improve service delivery and maintain liquidity in
departments and municipalities.
Links Links to the Provincial Strategic framework objective of clean, value driven,
efficient and effective and responsive government.
Strategic Goal 9 Management, utilisation and implementation of financial systems to achieve
a level 3+ financial capability rating within provincial departments and
selected entities.
Goal statement Provide for the standard implementation, management and technical user
support (helpdesk and training) of existing financial systems and the
transition to the Integrated Financial Management Solutions (IFMS) to
enhance compliance with the PFMA and other relevant legislation.
Justification This goal will contribute to sound financial management, skilled and
capacitated system users and compliance to user requirement statement.
Links Links to the Provincial Strategic framework objective of clean, value driven,
efficient and effective and responsive government.
STRATEGIC PLAN 2010/11 – 2014/15
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Strategic Goal 10 Ensure the development of accounting practices within provincial and local
government that will promote effective and efficient capturing of REAL
movements/accountability and contribute towards attaining level 3 and
higher auditable organisations.
Goal statement Establish a sound and dynamic financial accounting framework to promote
accountability, transparency and good governance.
Justification Improve the quality and integrity of financial accounting and reporting to
fully reflect all transactions and the values and extent of all assets owned
government.
Links This goal will contribute to clean municipal audits by the national target
year of 2014.
Links to the Provincial Strategic framework objective of clean, value driven,
efficient and effective and responsive government.
Strategic Goal 11 Enable departments and municipalities to achieve a level 3+ financial
management capability over the next 5 years.
Goal statement Develop, implement and monitor compliance with corporate governance
norms and standards within local and provincial government.
Justification In terms of S18 of the PFMA and S5 MFMA, PT must set the norms and
standards for financial management, and may assist with the
implementation thereof and thereby improve efficient and economic
utilisation of resources.
Links Links to the Provincial Strategic framework objective of clean, value driven,
efficient and effective and responsive government.
PART B: STRATEGIC OBJECTIVES
11
PART B: STRATEGIC OBJECTIVES
7. Programme 1: Administration
Programme Sub-programme
1. Administration 1.1. Office of the MEC
1.2. Management Services
1.3. Corporate Services (Shifts to the department of the
Premier)
1.4. Financial Management
7.1 Programme Purpose
Give strategic direction and to provide quality financial and other support services to the
Minister and the Head of Department.
7.2 Programme structure
The programme is further structured into the following sub-programmes:
Sub programme 1.1: Office of the MEC
Purpose: assist the Member of Executive Council with the assigned functions of the
Executive.
The Minister’s office renders secretarial and administrative services to assist the Minister with
the performance of his/her legislative responsibilities as MEC and as an elected public
representative. This includes fostering relationships with the media and all other parties
within government and the broader public.
Sub programme 1.2: Management Services
Purpose: assist the Head of Department with the functions assigned by the MEC.
The Office of the Head of Department provides strategic support to the Department as a
whole, including secretariat and other support services. This includes internal
communication and website services, information centre services and managerial
coordination for the Department.
Sub programme 1.3: Corporate Services
The Modernisation Programme, which is in an advanced stage, proposes a shift of the
Human Resource (excluding the Departments of Health and Education), Internal Audit and
Enterprise Risk Management functions to a shared Corporate Services within the Department
of the Premier with effect from 1 April 2010. Therefore the strategic objectives and
performance indicators relating to these functions are only reflected in the strategic and
STRATEGIC PLAN 2010/11 – 2014/15
12
annual performance plans of the Department of the Premier. The financial implications of the
function shift will be finalised during the 2010/11 adjusted estimates process once all of the
human resource and other related issues have been finalised.
Due to the modernisation process undertaken by the Department of the Premier clarity has
not yet been reached on all the specific administrative changes. Corporate Services will be
shifted to the DoTP to provide a model in the Province. Training and personnel development
responsibilities have been assigned to the heads of the different programmes within the
Treasury.
Sub programme 1.4: Financial management
Purpose: effective financial management of the department up to a level 3+ financial
capability rating and the provision of limited accommodation requirements and support
services.
This sub-programme is driven by the Chief Financial Officer (CFO) who is appointed in terms
of Chapter 2 of the National Treasury Regulations and reports directly to the Accounting
Officer. The main duties are spread across five sections.
The Management Accounting section is responsible for the compilation of annual and
adjusted budgets, quarterly and annual performance reports, and the monitoring and control
of expenditure.
The Financial Accounting section is responsible for maintaining an effective payments
system, for compiling the annual financial statements and maintaining the ledger accounts of
the Department.
The Supply Chain Management section (SCM) is responsible for providing and developing
the SCM database, maintaining and safeguarding assets and providing administrative
support in respect of the acquisition of goods and services.
The Internal Control section must ensure that effective internal control measures are in place
throughout the Department, particularly in high-risk areas and also ensure the prevention of
adverse internal and external audits.
Currently the Auxiliary Services section still resides under the CFO, which includes the
registry, government vehicles, telephone services, reprographic services, messenger services
and food aid services.
7.3 Strategic objectives
Strategic Objective 1 Provide secretarial and administrative services to the Ministry.
Objective statement Effective, efficient and economic secretarial and administrative services
within the Ministry in alignment with departmental strategic goals.
Baseline Services are currently rendered satisfactorily, but the effectiveness and
efficiency can be improved.
PART B: STRATEGIC OBJECTIVES
13
Justification Secretarial and administrative services within the Ministry are required to
ensure that the Minister is able to perform the responsibilities as Member of
the Executive Council and public representative.
Links Links to the Provincial Treasury’s Strategic Goal 1: assisting the MEC and
the HoD with the delivery of the assigned functions to them.
Strategic Objective 2 Render communication services to the Ministry.
Objective statement Effective communication through media liaison services.
Baseline Current relationship with media is satisfactory, but better relationships
need to be fostered to ensure that media coverage portrays the portfolio
responsibilities of the Minister.
Justification Media coverage will ensure that the public is informed of the Minister’s
execution of the portfolio responsibilities.
Links Links to the Provincial Treasury’s Strategic Goal 1: assisting the MEC and
the HoD with the delivery of the assigned functions to them.
Strategic Objective 3 Assist with strategic management and support to the Ministry.
Objective statement Strategic management and support to aid the Executive Authority in the
execution of the assigned responsibilities.
Baseline Difficult to determine the current level of performance as it is a new
strategic objective.
Justification Strategic management and support to the Minister is necessary to ensure
that the Departments deliver on their mandates and that the Minister
therefore executes the responsibilities as Executive Authority.
Links Links to the Provincial Treasury’s Strategic Goal 1: assisting the MEC and
the HoD with the delivery of the assigned functions to them.
Strategic Objective 4
Build competencies and enhance and maintain strategic support services.
Objective statement
Ensure effective operation of the Head of Department (HOD) office by
rendering strategic support to the Provincial Treasury.
Baseline
Systems in place that captures and tracks progress with the implementation
of the Provincial Treasury key areas.
Justification
Ensure that there is a clear operational plan, inclusive of human capital and
other support services in place for the HOD to provide leadership and
strategic direction to the rest of Provincial Treasury.
Links Links to the Provincial Treasury’s Strategic Goal 1: assisting the MEC and
the HoD with the delivery of the assigned functions to them.
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Strategic Objective 5
Effective communication and event co-ordination within Treasury.
Objective statement
Render strategic support, coordination, communication and information
services.
Baseline
Internal and external communication strategies and information services in
place for the whole department.
Justification
Ensure that all staff members at Treasury are well informed about activities
happening and have access to information required to fulfil their
responsibilities.
Links Links to the Provincial Treasury’s Strategic Goal 1: assisting the MEC and
the HoD with the delivery of the assigned functions to them.
Strategic Objective 6
Responsive and credible budget composition and delivery for the
department.
Objective statement
Ensure a realistic budget that is within the prescribed limits and availability
of funds and to promote efficient financial resource use.
Baseline
Department has a realistic budget that is credible together with a financial
efficiency programme in place.
Justification
Ensuring that the budget prepared can meet the business of the department
and that the variance between Main and Adjusted Budget is less than 2%.
Links
Links to the Provincial Treasury’s Strategic Goal of rendering financial
management advisory services. (Strategic goal 2)
Strategic Objective 7 Full and accurate reflection of all financial transactions of the department.
Objective statement Maintain a proper management of ledgers and achieve a clean audit report.
Deliver a fully effective accounting function to the department to achieve
proper management of ledgers, clean audits, a complete and maintained
asset register and payment of creditors within 30 days.
Baseline Unqualified successive audits, payments are made within 30 days and
ledgers are reconciled monthly.
Justification Financial transactions in ledgers reflect a healthy status of a department that
is auditable.
Links Links to the Provincial Treasury’s Strategic Goal of rendering financial
management advisory services. (Strategic goal 2)
PART B: STRATEGIC OBJECTIVES
15
Strategic Objective 8 Level 3 auditable supply chain management services.
Objective statement Provide and develop SCM databases for stocks, IT equipment and assets,
appropriate policy frameworks, a responsive procurement plan, a revised
accounting officer’s system of delegations and effective monitoring and
evaluation of SCM.
Baseline According to Provincial Treasury’s findings, SCM services are average.
Justification Improve to acceptable levels of level 3 and higher.
Links Links to the Provincial Treasury’s Strategic Goal of rendering financial
management advisory services. (Strategic goal 2)
Strategic Objective 9 Effective internal control measures and risk mitigation.
Objective statement Identify risk mitigation strategies, the improvement of internal control
management and institutionalisation of financial management
improvement.
Baseline Risk management, internal capacity and internal control are not on par and
managers do not always manage their risks effectively.
Justification Proactive planning, correct identification of risks and early remedy of any
financial management risks or deficiencies or capacity.
Links Links to the Provincial Treasury’s Strategic Goal of rendering financial
management advisory services. (Strategic goal 2)
Strategic Objective 10 Provide effective auxiliary and specialised support services.
Objective statement Ensure a proper filing and tracking system and the maintenance of the GG
fleet.
Baseline To provide effective auxiliary support services to the department.
Justification Good auxiliary services ensure a smooth running department.
Links Links to the Provincial Treasury’s Strategic Goal of rendering financial
management advisory services. (Strategic goal 2)
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7.4 Resource considerations
Audited Audited Audited
2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13
Office of the Minister
a
2 774 3 312 3 595 4 465 4 896 5 253 5 612
Management Services 2 029 2 566 2 576 3 341 5 287 5 652 6 006
Corporate Services 8 928 13 371 13 676 12 149 7 758 8 303 8 856
Financial Management 14 993 14 198 20 294 20 049 21 449 23 008 23 532
28 724 33 447 40 141 40 004 39 390 42 216 44 006
Medium-term estimate
Revised
estimate
Sub-programme
R'000
Outcome
1.
2.
3.
4.
Total payments and estimates
Changes over time reflect a variety of policy choices, ultimately resulting in placing greater
responsibility with Programme and sub programme managers for staff development and
those costs that can be directly attributed to the running of their programme or sub
programme. Examples of the latter are printing, audit and staff related costs. The rise in
compensation of employee costs relates to the bolstering of the CFO office and that of the
Minister and HoD, calculated to improve overall financial and strategic management of the
Provincial Treasury as well as to meet regulatory requirements.
Provision has also been made for predetermined IT technology refresh and associated
enhancements to meet the data and information management requirements of the
department. The rollout of the corporatisation model (inclusive of human resource, enterprise
risk management and internal audit services) as well as initiatives to introduce e-filing,
reconfiguration and appropriate placement of support services will take place in due course
7.5 Risk management
Sub-programme 1.1: Office of the MEC, 1.2: Management Services and 1.3: Corporate
Services
The risks relating to the Office of the MEC and the Office of the Head of Department are
taken up in an enterprise risk management model of the Department. No significant risks are
therefore identified for the first two sub-programmes of Programme 1 in terms of the current
model, the low impact and the unlikelihood of these risks manifesting themselves during the
next five year. As indicated under paragraph 7.2 above, Corporate Services has been shifted
to the DoTP.
Sub-programme 1.4: Financial management
Risk:
The management of Supply Chain Management Unit is lower than level 3.
Mitigation:
The mitigation of risks inherent in the SCM process is challenging and is receiving urgent
attention under the guidance of the CFO. Many models that have been developed in the
PART B: STRATEGIC OBJECTIVES
17
2009/10 financial year will be implemented and become operative during the first three years
of the next five-year cycle. Capacity constraints within the unit are being addressed and
training and liaison with the Provincial Treasury is strengthened. In general, external factors
will also have to be guided by both the Provincial and National Treasury to ensure that the
SCM units in all departments receive guidance and support over the next five years.
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8. Programme 2: Sustainable Resource Management
Programme Sub-programme
2. Sustainable Resource Management 2.1. Programme Support
2.2. Fiscal Policy
2.3. Budget Management
2.4. Public Finance
8.1 Programme Purpose
To inform financial resource allocation, to manage the provincial budget and to monitor the
implementation of provincial, municipal and entity budgets to enhance the effective
utilisation of available fiscal resources.
8.2 Programme structure
The programme currently consists of two chief directorates, namely Public Finance and
Public Policy Services, which fall under the branch Fiscal and Economic Services. The
programme is further divided into the following sub-programmes:
Sub-programme 2.1: Programme support
This sub-programme houses the head of the branch: Fiscal and Economic Services and the
two chief directors responsible for Public Policy Services and Public Finance, respectively. It
also provides resources for the structured training and development of the staff in the
programme.
Sub-programme 2.2: Fiscal Policy
Purpose: provide for the effective and efficient development of revenue streams
The Fiscal Policy sub-programme provides guidance on the effective and efficient
development and collection of all available revenue streams. The recent downturn in
economic activity has resulted in a pronounced decline in available resources to provincial
and local governments from the existing tax instruments. Therefore, initiatives in the sub-
programme to improve the sustainability of provincial and municipal budgets include a
variety of actions to explore the full use of available revenue sources. These actions refer to
research, inputs into a new provincial fiscal framework, refining and updating current
research initiatives and developing new revenue proposals where that may prove to be
feasible.
PART B: STRATEGIC OBJECTIVES
19
Sub-programme 2.3: Budget Management
Element: Provincial Government Budget Management
Purpose: provide for provincial economic analysis and advice that informs fiscal policy and
the budget allocation process and to assist, assess and report on policy attainment across the
provincial sphere.
This sub-programme’s key focus area is on improving the responsiveness of the provincial
budget to address socio-economic imperatives through, amongst others, the annual
publication of the Provincial Economic Review and Outlook (PER&O), the medium-term
budget policy statement, associated budgetary allocations over the MTEF and the budget
overview.
In addition, the focus is on informing resource allocations that increasingly respond to socio-
economic imperatives through the assessment of budget and policy plans, initiatives to
improve performance information and reporting in provincial departments, and public
entities and monitoring of budget implementation and performance.
Element: Local Government Budget Management
Purpose: provide for local government economic analysis and advice that informs fiscal
policy and the budget allocation decisions and to assist, assess and report on policy
attainment across the local government sphere.
This sub-programme’s key focus area is on improving the responsiveness of municipal
budgets to address socio-economic imperatives through evaluation and advice on the
appropriateness of these to facilitate the prioritisation of basic needs of communities and the
promotion of their social and economic development.
Sub-programme 2.4: Public Finance
Element: Provincial Government Finance
Purpose: compile the annual main and adjustments estimates and the efficient
implementation thereof, to assist, assess and report on provincial revenue and expenditure
management, including provincial entities and to provide oversight of the Western Cape
Gambling and Racing Board.
This sub-programme is responsible for the assessment of provincial budgets to improve their
sustainability and credibility and for monitoring the implementation of budgets to enhance x-
efficiency, financial prudence and fiscal discipline. A key objective is improving the
credibility and sustainability of provincial budgets by promoting efficient budget
implementation.
Element: Local Government Finance (Groups 1 and 2)
Purpose: assist, assess and report on municipal budgets, revenue and expenditure
management, including municipal entities and to drive the implementation of the Local
Government: Municipal Finance Management Act, 2003 (Act 56 of 2003).
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The sub-programme is divided into two directorates, namely Group 1 (mainly coastal
municipalities) and Group 2 (mainly non-coastal municipalities). They will respectively
concentrate on improving the credibility and sustainability of municipal budgets by
promoting efficient budget implementation and developing the functional ability of
municipalities through the implementation of standards, knowledge-sharing and training
(internally and externally).
Further steps will be taken to improve the interface between municipal budgets and in-year
monitoring by identifying gaps in the interface and implementing remedial steps relating to
revenue and expenditure management in municipalities.
8.3 Strategic objectives
Strategic Objective 11
Build competencies and enhance and maintain the delivery of the
programme.
Objective statement Ensure effective, targeted and efficient operation of the programme.
Baseline
Support services provided to the programme are satisfactory, but the
effectiveness and efficiency of the programme can be improved.
Justification
Ensure that there is a clear operational plan, inclusive of human capital and
other support services for the programme to better meet its business
objectives.
Links
Contributing to the Provincial Treasury’s Strategic Goal 1: assisting the
member of the Executive Council and the HoD with the delivery of the
assigned functions to them.
Strategic Objective 12 Full utilisation of all potential revenue sources available to provincial and
local governments.
Objective statement Provide for the effective and efficient development and collection of all
available revenue streams.
Baseline No new provincial taxes have been implemented over the last five years.
Base research (desktop) on fuel levy, bed levy and tourism taxes have been
done.
The current global economic environment impacted on resource availability
and resulted in major government revenue shortfalls across the world,
including South Africa, which impacted directly on the available resources
to provincial and local governments.
Sharp declines in available funding (other than for statutory payments) to
the provincial government.
Justification The sharp decline in available resources to provincial and local governments
necessitates a fresh look at exploring initiatives aimed at the full use of
available revenue sources, taking into account economic realities.
Links Links to the Provincial Treasury’s Strategic Goal 3: revenue adequacy,
optimisation and efficiency of revenue collection for departments and
municipalities to achieve a level 3+ financial capability rating.
PART B: STRATEGIC OBJECTIVES
21
Strategic Objective 13 Mechanisms for revenue collections in provincial and local governments
that are optimum inclusive of cash management arrangements.
Objective statement Provide for the effective and efficient mechanisms of revenue collection
within provincial and local governments.
Baseline No assessment has been done as yet into whether provincial and local
governments are using effective and efficient mechanisms in optimising
their revenue collection and potential.
The current global economic environment impacted on resource availability
and resulted in major government revenue shortfalls across the world,
including South Africa, which impacted directly on the available resources
to provincial and local governments
Sharp declines in available funding (other than for statutory payments) to
the provincial and local government require new initiatives in becoming
increasingly more efficient and effective.
Justification The sharp decline in available resources to provincial and local governments
necessitates a fresh look at exploring new initiatives aimed at becoming
increasingly more effective and efficient with revenue collection.
Links Links to the Provincial Treasury’s Strategic Goal 3: revenue adequacy,
optimisation and efficiency of revenue collection for departments and
municipalities to achieve a level 3+ financial capability rating.
Strategic Objective 14 Evaluate the responsiveness of budgets within provincial departments and
entities.
Objective statement Evaluate the responsiveness of budgets for provincial departments and
entities to inform resource allocations that increasingly respond to socio-
economic imperatives through the assessment of budget and policy plans,
initiatives to improve performance information and reporting and
monitoring of performance.
Baseline The responsiveness of budgets have been assessed as part of the PG MTEC 1
and 2 processes.
Justification Provincial budgets are meant to play a key role as a policy instrument to
address social and economic challenges. The achievement of socio-economic
imperatives needs to be supported with appropriate budgetary allocations.
In order to assess the effectiveness of the financial resource allocation in
achieving predetermined objectives including improving social and
economic outcomes, quality performance information is required to feed
into the budget allocation process. The determination of an evaluation
criteria and linking of measurement indicators are required to track progress
against plans.
Links Links to the Provincial Treasury’s Strategic Goal 4: responsive budgets for
all provincial departments, municipalities and entities to achieve a level 3+
financial capability rating.
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22
Strategic Objective 15 Conduct economic analysis to inform provincial planning and budgeting
processes.
Objective statement Review, analyse and report on economic parameters and socio-economic
information to inform provincial planning and budgeting processes on an
annual basis.
Baseline One annual publication of a Provincial Economic Review and Outlook,
which provides the socio-economic context to the Medium Term Budget
Policy Statement and Budget Overview.
Justification Research on the economic parameters and socio-economic situation is
required to describe the situation that budgets need to address and to
provide a context, which facilitates and informs the development of a
responsive budget.
Links Links to the Provincial Treasury’s Strategic Goal 4: responsive budgets for
all provincial departments, municipalities and entities to achieve a level 3+
financial capability rating.
Strategic Objective 16 Evaluate the responsiveness and implementation of the budget.
Objective statement Evaluate and advise on the responsiveness of municipal budgets to facilitate
the prioritisation of the basic needs of the community and promotion of
social and economic development of communities through the monitoring of
Service Delivery and Budget Implementation Plans, Mid-Year reports and
Annual Reports
Baseline Achieve a level of responsiveness in municipal budgets that is consistent
with the aims of the local government turnaround strategy. Municipal
budgets that support the provincial strategic objective of clean, value driven,
efficient and effective responsive government.
Justification Improve the responsiveness and implementation of municipal budgets by
providing advice and on-going monitoring and evaluation.
Links Links to the Provincial Treasury’s Strategic Goal 4: responsive budgets for
all provincial departments, municipalities and entities to achieve a level 3+
financial capability rating.
PART B: STRATEGIC OBJECTIVES
23
Strategic Objective 17 Evaluate the credibility and sustainability of the budget.
Objective statement Assessing provincial budgets to improve the sustainability and credibility
and the monitoring of the implementation to enhance x-efficiency, financial
prudence and fiscal discipline.
Baseline Given the legislative financial framework in the provincial government
environment as well as the competency levels of provincial finance officials,
the performance of provincial budgets varies between a 2 and 3 auditable
rating.
Justification Improve the sustainability and credibility of provincial budgets and the
monitoring of implementation to enhance x-efficiency, financial prudence
and fiscal discipline.
Links Links to the Provincial Treasury’s Strategic Goal 5: credible budgets within
departments, municipalities and entities to achieve a level 3+ financial
capability rating.
Strategic Objective 18 Monitor the implementation of the budget in terms of x-efficiency, financial
prudence and fiscal discipline.
Objective statement Ensuring x-efficiency, financial prudence and fiscal discipline in the
implementation of the budget.
Baseline Given the legislative financial framework in the provincial government
environment as well as the competency levels of provincial finance officials
the performance of provincial budgets vary between a two and three
auditable rating.
Justification Monitor value for money spend and budgeting implementation practices.
Links Links to the Provincial Treasury’s Strategic Goal 5: credible budgets within
departments, municipalities and entities to achieve a level 3+ financial
capability rating.
Strategic Objective 19 Develop and capacitate departments and entities through the
implementation of standards, knowledge sharing and training (internally
and externally).
Objective statement Provide policy advice and training, knowledge sharing and the
implementation of standards to ensure sound and sustainable management
of financial affairs of departments and entities.
Baseline No standard operating procedures’ relating to budgets exists.
Justification Ensure standardisation across the Province with regard to the
implementation of budgets and to ensure that standard efficiency practices
are executed.
Links Links to the Provincial Treasury’s Strategic Goal 5: credible budgets within
departments, municipalities and entities to achieve a level 3+ financial
capability rating.
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Strategic Objective 20 Evaluate the credibility and monitor the implementation of the budget.
Objective statement Assessing municipal budgets to improve the sustainability and credibility
and monitoring the implementation thereof to enhance x-efficiency, financial
prudence and fiscal discipline.
Baseline Given the legislative financial reforms in the local government environment
as well as the competency levels of municipal officials, the performance of
municipal budgets varies between a 2 and 3 auditable rating.
Justification Improve the sustainability and credibility of municipal budgets and
monitoring the implementation thereof to enhance x-efficiency, financial
prudence and fiscal discipline.
Links Links to the Provincial Treasury’s Strategic Goal 5: credible budgets within
departments, municipalities and entities to achieve a level 3+ financial
capability rating.
Strategic Objective 21 Develop the functional ability of municipalities through the implementation
of standards, knowledge sharing and training (internally and externally).
Objective statement Structured roll-out of the 16 MFMA implementation priorities relating to
revenue and expenditure management in municipalities.
Baseline Given the legislative financial reforms in the local government environment
as well as the competency levels of municipal officials, the financial
performance of municipal varies between a 2 and 3 auditable rating.
Justification Improve the interface between municipal budgets and in-year monitoring
by identifying the gaps in the interface and the implementation of remedial
steps relating to revenue- and expenditure management in municipalities.
Links Links to the Provincial Treasury’s Strategic Goal 5: credible budgets within
departments, municipalities and entities to achieve a level 3+ financial
capability rating.
8.4 Resource considerations
Audited Audited Audited
2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13
Programme Support 1 742 1 475 1 605 2 473 3 247 3 452 3 679
Fiscal Policy 1 163 230 662 2 954 3 895 4 159 4 413
Budget Management 9 746 10 478 8 974 11 224 13 582 14 684 15 757
Provincial Government
Budgets
7 374 8 154 8 733 9 310
Local Government Budgets 3 850 5 428 5 951 6 447
Public Finance 8 681 9 357 10 105 19 212 26 539 28 313 30 094
Provincial Government
Finance
4 553 3 432 3 157 10 363 14 062 14 964 15 881
Local Government Finance:
Group 1
4 128 5 925 6 948 4 756 7 402 7 899 8 403
Local Government Finance:
Group 2
4 094 5 075 5 450 5 810
21 332 21 540 21 346 35 864 47 263 50 608 53 943 Total payments and estimates
Medium-term estimate
Outcome
4.
2.
3.
1.
Sub-programme
R'000
Revised
estimate
PART B: STRATEGIC OBJECTIVES
25
The increases in the allocations over the MTEF have mainly been to cater for the increased
responsibilities relating to the implementation of the Municipal Finance Management Act
(MFMA), transversal performance audits to be conducted by the Auditor-General across a
number of provincial departments over the 2010 MTEF, and for initiatives aimed at
increasing provincial revenue. The latter includes a review of gambling taxes and of the
national fiscal transfer system to provinces. These additions resulted in concomitant changes
in the economic classification for both goods and services and compensation of employees.
Management considerations
The sub-programmes are evolving and further reconfiguration is therefore being considered.
This entails the possible establishment of a new chief directorate that focuses specifically on
MFMA issues to improve the credibility and sustainability of municipal budgets through
more efficient budget implementation, developing the functional ability of municipalities,
clearer standards, knowledge-sharing and training, and better coordination. In addition, a
refocus of the Chief Directorate: Public Finance to include an additional directorate that will
focus exclusively on data and information management initiatives for Treasury, the relocation
of Immovable Asset Management and Liabilities Management from Programme 3 and
shifting the Research and Modelling unit to the Chief Directorate: Public Policy Services.
8.5 Risk management
Sub programme 2.1: Programme Support
Due to the low impact and likelihood of identified risks to manifest itself over the next five
years, no further discussion of this will take place.
Sub Programme 2.2: Fiscal Policy
Risk:
Further deterioration of the current global economic environment which has a negative
impact on the resources available from the national fiscus, as well as concomitant non-
approval of new provincial revenue proposals by the National Treasury.
Mitigation:
Developing a risk-aversion fiscal framework going forward, moving towards balanced
budgets over the MTEF and creating sufficient cash-backed reserves that would cushion
against unexpected external shocks. This would include an adequate contingency reserve,
the building up a working capital reserve over the MTEF that would assist with liquidity
requirements and rebuilding the asset financing reserve to fund future infrastructure
development.
New tax proposals would be backed by research conducted by reputable institutions giving
consideration only to those that are both economically and politically viable.
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Sub programme 2.3: Budget Management
Element: Provincial Government Budget Management
Risk:
Mismatch between resource allocations to adequately respond to socio-economic imperatives
and actual budget implementation, together with budget allocations and provincial planning
that are not informed by credible socio economic data or considerations.
Mitigation:
Responsiveness of budgets and policies of departments to address socio-economic
imperatives will be assessed. This includes tighter monitoring of budget implementation to
check on responsiveness in addressing socio economic needs via the quarterly reporting
mechanism. This monitoring is intended to better track departmental and entity performance
against stated planned targets and through this to identify improvements in either the
monitoring or stated performance targets, or both, to systematically increase departmental
responsiveness.
Also to be pursued is a better tie-up between the financial (Public Finance) and non-financial
(Budget Management) aspects of budget implementation and composition.
An analytical framework to include clarity on the content of desired socio-economic
information is to be published and this can be used by the different role players, as well as
feeding into the annual publication of the Provincial Economic Review and Outlook.
Element: Local Government Budget Management
Risk:
The need for credible socio economic data that informs the municipal planning process.
Mitigation:
The publication of allocations with targets at ward level is essential together with the
monitoring of performance against targets at the lowest level (wards within local
governments). Socio-economic district profiles for municipalities, which will include assessed
administrative data of municipalities, will be developed over the next five years. This will put
credible data/knowledge management in place that can then be used uniformly by the
different role players in the Province at local government level. This will help to improve the
Integrated Development Plans and the resultant budgets.
Sub Programme 2.4: Public Finance
Element: Provincial Government Finance
Risk:
Provincial budgets (departments and entities) that are unsustainable, operationally
inefficient, not purpose driven and not implemented as planned.
PART B: STRATEGIC OBJECTIVES
27
Mitigation:
Structured assessment of provincial budgets and in-year financial performance monitoring
against a range of financial management and budget performance criteria, as well as
providing feedback to all departments and entities.
Element: Local Government Finance
Risk:
Municipal budgets that are unsustainable, operationally inefficient, not purpose driven and
implemented as planned.
Mitigation:
Structured assessment of municipal budgets and in-year financial performance monitoring
against a range of financial management and budget performance criteria, plus appropriate
feedback to all municipalities. In addition, fully functional intersphere coordinating and
feedback structures to further mitigate any risks and improve the sustainability of municipal
budgets.
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9. Programme 3: Assets and Liabilities
Programme Sub-programme
3. Assets and Liabilities 3.1. Programme Support
3.2. Asset Management
3.3. Liabilities Management
3.4. Interlinked and Financial Support Systems
9.1 Programme Purpose
The aim of this programme is to provide policy direction and to facilitate the effective and
efficient management of financial systems, physical and financial assets, public-private
partnerships and liabilities within the provincial and municipal spheres.
9.2 Programme structure
The Programme currently consists of the following sub-programmes:
Sub-programme 3.1: Programme support
This sub-programme houses the head of the branch: Governance and Asset Management
(who is responsible for Programmes 3 and 4) and the chief director responsible for this
programme. It also provides resources for the structured training and development of the
staff in the programme.
Sub-programme 3.2: Asset Management
Element: Moveable Asset Management
Purpose: enhance departmental and municipal capacity and performance to a level 3+
financial capability for supply chain (SCM) and movable asset management.
The Movable Asset Management section is responsible for the enforcement of SCM
requirements, respectively in terms of the PFMA and the MFMA and their regulations, to
assist, guide and issue best practice guidelines to provincial departments, entities and
municipalities and to investigate any system of control or financial management from a SCM
perspective. This means engaging provincial departments, entities and municipalities on the
implementation of SCM and conducting compliance/capacity assessments.
It also implies implementation of asset management requirements within the Province,
developing Provincial Treasury instructions for SCM and facilitating the arrangements of
transversal contracts. The unit also facilitates initiatives and drives policy towards supplier
development and preferential procurement initiatives.
PART B: STRATEGIC OBJECTIVES
29
Element: Immovable Asset Management
Purpose: increase the level of infrastructure delivery to a level 3+ financial capability rating
(departments of Education, Health, Transport and Public Works and selected municipalities)
and the sound management of PPP projects.
The Immovable Asset Management section is responsible for assessing infrastructure budgets
and infrastructure plans, monitoring and enhancing infrastructure spending performance of
designated departments (Education, Health, Transport and Public Works) and championing
infrastructure delivery improvement processes in these departments.
This section is also responsible for advising municipalities on immovable asset management
and statutory infrastructure reporting, providing views on the infrastructure components of
the draft municipal budgets, monitoring infrastructure spending performance of
municipalities and piloting infrastructure delivery business improvement processes in
selected municipalities.
The PPP section is, amongst other, responsible for advising and assisting provincial
departments and municipalities on PPP projects and monitoring of PPP projects.
Sub programme 3.3: Liabilities Management
Purpose: monitor and evaluate cash flow and investment management so that it is
sustainable and credible and will enhance service delivery and improve liquidity in
departments and municipalities.
The Investments section is responsible for the investment of provincial funds, which are not
immediately required to defray expenditure, at reputable financial institutions in accordance
with an approved investment policy.
The Cash Flow Management section is responsible for controlling the Provincial Revenue
Fund and the prudent management of cash by departments. The section also provides
assistance to municipalities conducting cash flow management assessments to improve
liquidity.
Sub programme 3.4: Supporting and Interlinked Financial Systems
Purpose: Management, utilisation and implementation of financial systems to achieve a level
3+ financial capability rating within provincial departments and selected entities.
The Operations and Implementation section is responsible for the day to day management of
transversal systems (currently BAS, LOGIS and PERSAL), utilised by all departments as well
the Provincial Parliament. In addition, this section is also responsible for providing and
maintaining user access control to all transversal financial systems.
The User Support section is responsible for providing assistance and support to system users,
while the Training section is responsible for the training of a target market of approximately
7 000 employees in all aspects of the systems to ensure its proper utilisation and management.
STRATEGIC PLAN 2010/11 – 2014/15
30
9.3 Strategic objectives
Strategic Objective 22
Build competencies and enhance and maintain the delivery of the
programme.
Objective statement Ensure effective, targeted and efficient operation of the programme.
Baseline
Support services provided to the programme are satisfactory, but the
effectiveness and efficiency of the programme can be improved.
Justification
Ensure that there is a clear operational plan, inclusive of human capital and
other support services for the programme to better meet its business
objectives.
Links
Contributing to the Provincial Treasury’s Strategic Goal 1: assisting the
member of the Executive Council and the HoD with the delivery of the
assigned functions to them.
Strategic Objective 23 Determine policy to drive, assess and assist departments in the attainment of
building capacity, ensuring integrity of data, enforcing transparency and
accountability, balancing commercial imperatives with social responsibility
and addressing economies of scale and value for money for supply chain
and moveable assets.
Objective statement Build departmental capability to address strategic issues in respect of SCM
and moveable asset management to improve efficiency gains and defining
effective procedures for identifying and addressing skills gaps and training
needs and improve departmental performance through the integration of
policy and delivery .
Baseline The manifestation of a high level of non-compliance to supply chain
management, legislation, policy and procedure, has resulted in disparate
expenditure trends, lack in cost effectiveness and value for money as well as
collusive, uncompetitive and non-transparent tender processes within
departments.
Justification Gives effect to a programme to ensure improved transparency,
accountability and capacity for supply chain management and moveable
assets within departments.
Links Links to the Provincial Treasury’s Strategic Goal 6: enhancing departmental
and municipal capacity and performance to achieve a level 3+ financial
capability rating for SCM and moveable asset management.
PART B: STRATEGIC OBJECTIVES
31
Strategic Objective 24 Determine policy to drive, assess and assist municipalities in the attainment
of building capacity, ensuring integrity of data, enforcing transparency and
accountability for supply chain and moveable assets.
Objective statement Build municipal capability to address strategic issues in respect of SCM and
moveable asset management to improve efficiency gains and defining
effective procedures for identifying and addressing skills gaps and training
needs.
Baseline The manifestation of a high level of non-compliance to supply chain
management, legislation, policy and procedure, has resulted in disparate
expenditure trends, lack in cost effectiveness and value for money as well as
collusive, uncompetitive and non-transparent tender processes within
municipalities.
Justification Gives effect to a programme to ensure improved transparency,
accountability and capacity for supply chain management and moveable
assets within municipalities.
Links Links to the Provincial Treasury’s Strategic Goal 6: enhancing departmental
and municipal capacity and performance to achieve a level 3+ financial
capability rating for SCM and moveable asset management.
Strategic Objective 25 Entrenching built-environment business principles and processes for
effective infrastructure delivery that is aligned and contributes to optimal
utilisation of government immovable assets.
Objective statement The promotion of effective and efficient delivery of infrastructure and
management of immovable assets, including PPP projects through
institutionalising best practice, systems, tools and building capacity.
Baseline A diagnostic report was compiled on “Unblocking Infrastructure Delivery”
for the departments of Health and Education as well as the branch: Public
Works.
Justification Address the capacity, business processes, etc. challenges in departments and
selected municipalities that hampers the optimal investment in
infrastructure delivery and the management of immovable assets.
Links Links to the Provincial Treasury’s Strategic Goal 7: increasing the level of
infrastructure delivery to achieve a level 3+ financial capability rating
(departments of Education, Health, Transport and Public Works and
selected municipalities) and the sound management of PPP projects.
STRATEGIC PLAN 2010/11 – 2014/15
32
Strategic Objective 26 Cash Flow management improvement of provincial departments to achieve
a level 3+ financial management capability.
Objective statement Ensure that provincial departments’ expenditure is aligned to available cash
and bank reconciliations are done regularly.
Baseline A substantial variance exists between projected expenditure (Section 40(4)
(a)) that forms the basis for transfers from National and actual expenditure.
Departments tend to exceed their available cash (daily, weekly and monthly)
due to the fact that there is limited alignment between available cash and
expenditure. Pre-payments are made before they are due and bank
reconciliations are not regularly done on a daily basis to detect possible
irregularities and / or fraud.
Justification This objective will enforce more effective management of cash, controls that
exist can be executed and all monies due to the provincial government are
accounted for and promptly banked.
Links Links to the Provincial Treasury’s Strategic Goal 8: monitoring and
evaluating cash flow and investment management so that it is sustainable
and credible and will enhance service delivery and improve liquidity in
departments and municipalities.
Strategic Objective 27 Monitoring and evaluation of cash flow and investment management that is
sustainable and credible to enhance service delivery and improve liquidity
in municipalities.
Objective statement Ensure sustainable, credible and effective cash flow and investment
management in municipalities.
Baseline Financial management performance in municipalities in relation to
unauthorised and wasteful expenditures, capacity, inadequate financial
reporting, mismanagement and political instability as reported by the
Auditor-General, requires stricter monitoring and evaluation to ensure good
corporate governance.
Justification By ensuring more effective and efficient cash flow and investment
management in municipalities, will improve service delivery and maintain
liquidity.
Links Links to the Provincial Treasury’s Strategic Goal 8: monitoring and
evaluating cash flow and investment management so that it is sustainable
and credible and will enhance service delivery and improve liquidity in
departments and municipalities.
PART B: STRATEGIC OBJECTIVES
33
Strategic Objective 28 Financial system management improvement to achieve a level 3+ financial
management capability.
Objective statement Skilled and capacitated system users trained in various functionalities on the
systems and effective information system controls are implemented and
maintained.
Baseline Currently information system controls (as highlighted by the 2008/09
Auditor-General reports), although implemented, are not maintained which
severely diminishes the reliability of other internal controls. No
departmental policies exist to guide and direct access to the systems. System
users are given access to the system without being given formal training at
least in accordance with their profile.
Justification Enforce the effective and efficient management of information system
controls to ensure integrity of data as well as appropriate and timeous
management information.
Links Links to the Provincial Treasury’s Strategic Goal 9: management, utilisation
and implementation of financial systems to achieve a level 3+ financial
capability rating within provincial departments and selected entities.
9.4 Resource considerations
Audited Audited Audited
2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13
Programme Support 898 961 840 1 332 2 350 2 521 2 694
Asset Management 7 582 7 542 8 622 11 536 14 609 15 648 16 702
Moveable Asset Management:
Provincial Government
4 923 4 746 5 223 7 090 8 379 8 973 9 573
Moveable Asset Management:
Local Government
1 1 1
Immoveable Asset Management 2 659 2 796 3 399 4 446 6 229 6 674 7 128
Liabilities Management 1 048 1 465 1 652 2 389 2 327 2 595 2 774
Supporting and Interlinked Financial
Systems
42 009 11 739 11 234 11 868 13 839 14 811 15 785
#REF! #REF! #REF! #REF! #REF! #REF! #REF!
51 537 21 707 22 348 27 125 33 125 35 575 37 955
1.
Sub-programme
R'000
Outcome
2.
Revised
estimate
Medium-term estimate
3.
4.
Total payments and estimates
The reduction in the appropriation over time in comparison to 2006/07 is in respect of
Supporting and Interlinked Financial Systems. This was due to the decentralisation of State
Information Technology Agency costs for transversal financial systems to provincial
departments. This applies mainly to the decrease in goods and service under the Programme.
In general the increases in the Programme over the MTEF make provision for the
strengthening of Provincial Treasury’s MFMA responsibilities and the institution of
transversal financial system access control within the Province. The increase in respect of
goods and services over the MTEF provides for bridging funding for the continuation of the
Infrastructure Delivery Improvement Programme (IDIP), the development and
STRATEGIC PLAN 2010/11 – 2014/15
34
implementation of a business intelligence tool that runs on top of the financial systems and
enhancements to the Provincial electronic purchasing system (EPSI) and its supplier database.
The Programme also caters for the anticipated rollout by National Treasury of the first two
modules (asset and procurement management) of the Integrated Financial Management
Solutions (IFMS). This will have an impact on the ageing provincial computer network, but
provision has been made under DoTP for upgrade of the network over the MTEF.
Management considerations
Nominal provision has been made for the envisaged upgrading of the sub-directorate
Movable Asset Management: Local Government to a directorate as part of the reconfiguration
of the Provincial Treasury.
Management is considering the option to relocate Immovable Asset Management and
Liabilities Management to Programme 2: Public Finance.
9.5 Risk management
Sub programme 3.1: Programme Support
Due to the low impact and likelihood of identified risks to manifest itself over the next five
years, no further discussion of this will take place.
Sub programme 3.2: Asset Management
Element: Movable Asset Management
Risk:
Lack of appropriate systems within the Province to adequately manage moveable assets.
Mitigation:
There are currently no proper national or provincial systems with regard to movable asset
management and to date only accounting standards and guidelines have been issued. In
addition, the National Treasury intends rolling out an asset management module over the
next couple of years to all national and provincial departments, with tests already underway
in selected departments across the country. Negotiations are underway with the National
Treasury to do the same in the Province within the current MTEF. Furthermore, the
Provincial Treasury will support and assist all departments to attain the best achievable
results over the next five years.
Element: Immovable Asset Management
Risk:
Inadequate implementation of the nationally driven Infrastructure Development and
Implementation Plans (IDIP) by departments and municipalities together with associated
skills gaps
PART B: STRATEGIC OBJECTIVES
35
Mitigation:
Extension of the IDIP programme beyond the current contract, using the Provincial
Treasury’s own resources until the revised national initiative kicks in. Furthermore, in liaison
with the DoTP (Organisational Development) to institutionalise the IDIP programme in the
affected department (Education, Health, Transport and Public Works) by designing the
appropriate systems processes and structures.
Sub programme 3.3: Liabilities Management
Risk:
Periodic liquidity shortfalls within the Provincial Revenue Fund due to a combination of
more evenly spread departmental expenditure during the year and a reduced frequency in
cash transfers from the national fiscus.
Mitigation:
Revised management of the Provincial Revenue Fund (including the Asset Management
Reserve) together with a modified accounting and projection framework that ties into
medium-term fiscal modelling and the provision of a working capital reserve over the new
MTEFF.
Sub programme 3.4: Support and Interlinked Financial Systems
Risk:
Uncertainty whether the National Treasury will be able to provide the asset management
module and procurement module as part of the IFMS on 1 April 2010 and 1 July 2010
respectively, for implementation within the Provincial Government of the Western Cape.
Mitigation:
The National Treasury has been formally approached for permission to be included as a pilot
province for the implementation of the two modules. Indications are that this province will
be awarded the opportunity to be a pilot province, but this must still be confirmed by the
IFMS Steering Committee.
STRATEGIC PLAN 2010/11 – 2014/15
36
10. Programme 4: Financial Governance
Programme Sub-programme
• Financial Governance 4.1. Programme Support
4.2. Accounting Services
4.3. Norms and Standards
4.4. Provincial Internal Audit
10.1 Programme Purpose
Development of accounting and financial management practices within provincial and local
government that will contribute towards attaining level 3 and higher auditable organisations.
10.2 Programme structure
This programme together with Programme 3 constitutes the branch: Governance and Asset
Management. It currently consists of a chief director as the head of the programme and is
further divided into the following sub-programmes:
Sub-programme 4.1: Programme support
This sub-programme houses the chief director responsible for the programme and also
provides resources for structured training and development of staff in the programme.
Sub-programme 4.2: Accounting Services
Element: Local Government Accounting
Purpose: improve the standards of accounting and financial reporting within municipalities
and allied entities to a level 3+ financial capability rating.
The unit is busy with the roll-out of the latest GRAP standards (and its further evolvement)
within the municipalities of the Western Cape. The 2009/10 municipal financial year requires
all municipalities to complete their financial statements in terms of the full GRAP
requirements. The unit has and will busy itself with training interventions, explanatory
advice and facilitations (National Treasury, Accounting Standards Board and the Auditor
General) in the event of disputes regarding the interpretation of accounting standards.
Element: Provincial Government Accounting
Purpose: improve the standards of accounting and financial reporting within departments
and entities to a level 3+ financial capability rating.
The key objective of this unit over the next few years is to ensure full and timeous capturing
of financial transactions and associated financial improvements to prevent irregularities and
material financial misstatements allowing for modified cash-based standards within
departments and the accrual standards within entities.
PART B: STRATEGIC OBJECTIVES
37
Sub-programme: Corporate Governance
Purpose: enable departments and municipalities to achieve a general level 3+ financial
management capability over the next 5 years.
The sub-programme’s main objectives are the development, implementation and enforcement
of a generic set of corporate governance norms and standards for departments, municipalities
and entities that are responsive to and compliant with the relevant financial legislative
framework. In addition, the adaptation of a generic set of governance norms and standards
to meet the particular requirements of individual departments is also envisaged.
10.3 Strategic objectives
Strategic Objective 29
Build competencies and enhance and maintain the delivery of the
programme.
Objective statement Ensure effective, targeted and efficient operation of the programme.
Baseline
Support services provided to the programme are satisfactory, but the
effectiveness and efficiency of the programme can be improved.
Justification
Ensure that there is a clear operational plan, inclusive of human capital and
other support services for the programme to better meet its business
objectives.
Links
Contributing to the Provincial Treasury’s Strategic Goal 1: assisting the
member of the Executive Council and the HoD with the delivery of the
assigned functions to them.
Strategic Objective 30 Improving the financial accounting and reporting of municipalities and
municipal entities to a financial maturity capability of level 3 by 2015.
Objective statement Ensure the development, implementation and monitoring of accounting
practises within municipalities and municipal entities that will promote
effective and efficient capturing of Revenue, Expenditure, Assets and
Liability movements/accountability and to achieve level 3 in terms of the
Financial Maturity Capability model.
Baseline Municipalities are currently performing at a level 2 on the Financial
Maturity Capability model.
Justification Will improve municipal accounting and financial reporting to a value
driven, efficient, effective and responsive local government.
Links Links to the Provincial Treasury’s Strategic Goal 10: ensuring the
development of accounting practices within provincial and local
government that will promote effective and efficient capturing of REAL
movements/accountability and contribute towards attaining level 3 and
higher auditable organisations.
STRATEGIC PLAN 2010/11 – 2014/15
38
Strategic Objective 31 Raising the standard of accounting and financial reporting of departments
and entities to a financial maturity capability of level 3+.
Objective statement Ensure the development, implementation and monitoring of accounting
practises within provincial departments and entities that will promote
effective and efficient capturing of Revenue, Expenditure, Asset and
Liability (REAL) movements/accountability and to achieve level 3+ in terms
of the Financial Maturity Capability model.
Baseline Departments and entities are performing at a level 2+ in terms of the
Financial Maturity Capability assessments for 2009.
Justification Will improve accounting and financial reporting of departments and
entities to a value driven, efficient, effective and responsive provincial
government.
Links Links to the Provincial Treasury’s Strategic Goal 10: ensuring the
development of accounting practices within provincial and local
government that will promote effective and efficient capturing of REAL
movements/accountability and contribute towards attaining level 3 and
higher auditable organisations.
Strategic Objective 32 Assess, develop, monitor financial norms and standards and, where
necessary, enforce compliance by departments, municipalities and entities
towards attaining a level 3+ in terms of the Financial Maturity Capability
(FMC) model.
Objective statement Assess, develop, implement and monitor compliance with corporate
governance norms and standards within departments, Provincial
Parliament, municipalities and entities.
Baseline Financial Maturity Capability model assessment in March 2009 measured
most departments to be at a 2+ auditable rating.
Justification In terms of S18 of the PFMA and S5 MFMA, Provincial Treasury must set
the norms and standards for financial management, and may assist with the
implementation thereof and thereby improve efficient and economic
utilisation of resources.
Links Links to the Provincial Treasury’s Strategic Goal 11: enabling departments
and municipalities to achieve a level 3+ financial management capability
over the next 5 years.
Sub-Programme 4.4: Provincial Internal Audit
The Modernisation Programme, which is in an advanced stage, proposes the shift of the
Human Resources (excluding the Departments of Health and Education), Internal Audit and
Enterprise Risk Management functions to a shared Corporate Services within the Department
of the Premier from 1 April 2010. Therefore the strategic objectives and performance
indicators relating to these functions are only reflected in the Strategic and Annual
Performance Plans of the Department of the Premier. The financial implications of the
function shift will be finalised during the 2010/11 Adjusted Estimates process once all of the
HR and other related issues have been finalised.
PART B: STRATEGIC OBJECTIVES
39
10.4 Resource considerations
Audited Audited Audited
2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13
Programme Support 1 169 1 037 1 581 1 746 2 309 2 180 2 303
Accounting Services 3 735 3 806 5 272 7 688 8 717 9 337 9 959
Provincial Government
Accounting
4 729 4 856 5 203 5 551
Local Government
Accounting
2 959 3 861 4 134 4 408
Norms and Standards 3 118 3 551 3 426 4 657 7 379 7 914 8 457
Risk Management 2 926 2 091 2 276 2 813
Provincial Internal Audit 21 395 27 945 24 560 19 860 22 287 23 901 25 517
Sub-programme Support 5 021 4 319 4 602 4 898
G&A Cluster 5 248 5 823 6 254 6 682
Economic Cluster 5 940 7 491 8 045 8 594
Social Cluster 3 651 4 654 5 000 5 343
32 343 38 430 37 115 36 764 40 692 43 332 46 236
Revised
estimate
Medium-term estimate
1.
Sub-programme
R'000
Outcome
2.
3.
4.
5.
Total payments and estimates
The change in allocations over the MTEF period has been mainly for the expansion of the
internal audit function. Similarly, changes in the economic classification from goods and
services to compensation of employees in the 2009/10 financial year and thereafter are the
result of the phasing out of the previously co-sourced internal audit function and the
subsequent internal build-up of internal audit. The contract with the external consortium
came to an end in December of 2008.
Further changes are to be expected over the MTEF with the intended relocation back to the
Department of the Premier in the 2010/11 financial year, with commensurate budget shifts
occurring in the adjusted estimates of 2010/11, and the forthcoming main estimates.
Treasury’s Phase 3 of the reconfiguration in respect of Local Government Accounting
Services will require additional capacity to meet the Treasury’s obligations under the national
Clean Audit 2014 drive, which will be dealt with later.
10.5 Risk management
4.1 Programme Support
Due to the low impact and likelihood of identified risks to manifest itself over the next five
years, no further discussion of this will take place.
STRATEGIC PLAN 2010/11 – 2014/15
40
4.2.1 Local Govt. Accounting
Risk:
Non-achievement of unqualified financial statements by municipalities that were all tabled by
the due date.
Lack of technical skills and capacity to implement accounting reforms (GRAP Standards)
across the Province.
Mitigation:
Development of standard operating procedures for municipalities associated good practice
guidelines and assistance with the preparation of comprehensive audit files, well in advance
of the year-end. Furthermore, to obtain clarification of the practical implication of current and
new accounting standards and to timeously convey these to all municipalities.
Identify skills gaps in the accounting unit internally and externally to determine training
needs. Develop focused training (internally and externally) to improve competency levels.
Continuously arrange workshop sessions on the implementation/updates on the accounting
reforms (GRAP Standards).
Element: Provincial Government Accounting
Risk:
Qualified financial statements within the Province with or without more adverse findings.
Alternatively, unqualified financial statements with material misstatements.
Lack of technical skills and capacity to implement accounting reforms (GRAP Standards)
across the Province.
Mitigation:
Development of standard operating procedures for departments and entities together with
associated good practice guidelines and assistance with the preparation of comprehensive
audit files, well in advance of the year-end. Furthermore, to obtain clarification of the
practical implication of current and new accounting standards and to timeously convey these
to all departments and entities.
In addition, the intensified roll-out of midyear financial statements within departments and
entities together with appropriate testing, assessment, remedial steps and feedback to
departments and other entities to improve the quality of financial reporting.
Identify skills gaps in the accounting unit internally and externally to determine training
needs. Develop focused training (internally and externally) to improve competency levels.
Continuously arrange workshop sessions on the implementation/updates on the accounting
reforms (GRAP Standards).
PART B: STRATEGIC OBJECTIVES
41
Sub programme 4.3: Corporate Governance
Risk:
Dysfunctional CFO offices within departments, municipalities and entities.
Mitigation:
Repositioning of the unit to better assess the functioning of the different CFO offices, to
identify gaps and appropriate remedial steps at the first sign of any dysfunctionality. In
addition, to draft standard operating procedures to cover five main areas (management
accounting, financial accounting, supply chain management, asset management and internal
control) and to ensure that implementation is enforced with or without the required training
interventions. Furthermore, to ensure completeness and appropriateness of the financial legal
framework which departments, municipalities and entities have to work with.
PART C: LINKS TO OTHER PLANS
42
PART C: LINKS TO OTHER PLANS
11. Links to the long-term infrastructure and other capital plans
This section is not applicable to this Provincial Treasury, as its functional
responsibilities do not relate to capital investment.
12. Conditional grants
Not applicable.
13. Public entities
Name of public entity
Current annual budget
(R thousand)
Date of next evaluation
Western Cape Gambling and Racing Board R39,338 1 September 2010
Mandate:
The main purpose of the Western Cape Gambling and Racing Board (“WCGRB”) is to control
and regulate gambling and racing within the Province of the Western Cape, that will:
• provide a stable, just, consistent and effective regulatory environment;
• inspire public confidence and trust, in an environment free from corruption and
unlawful gambling and racing activities; and
• contribute to the economy of the Western Cape in a socially responsible manner.
Outputs:
To ensure business continuity and continued effective functioning of the WCGRB.
To ensure an efficient and effective regulatory authority that will provide a just and
coherent regulatory environment.
To formulate, develop, implement and maintain effective gambling and racing legislation
and policy.
To ensure that all gambling and racing activities in the Province are effectively regulated.
To maximise the benefit of regulated gambling and racing whilst minimizing the negative
impact.
To keep abreast of new developments impacting the gambling and racing industries.
To ensure good corporate governance of the organisation and compliance with applicable
legislation.
To ensure best practice in respect of financial and information systems.
To strive for financial self-sufficiency.
The Western Cape Gambling and Racing Board’s own revenue has since 2004/05 increased to
such a level that it has become self sufficient with the introduction of limited gambling
machines that have become fully operative since the start of the 2005/06 financial year.
PART B: STRATEGIC OBJECTIVES
43
14. Public-private partnerships
The Provincial Treasury is not yet functionally responsible for any PPP, but provides an
advisory and monitoring service. However, with capacity building within Provincial
Treasury, it is envisaged to take over all PPP related responsibilities from National Treasury
at some future date.
doc_630008316.pdf
Provincial Government Western Cape Provincial Treasury Strategic Plan for the fiscal years 2010 11 2014 15.
Provincial Government Western Cape
Provincial Treasury
Strategic Plan
for the fiscal years
2010/11 – 2014/15
PR: 16/2010
ISBN: 978-0-621-39107-7
To obtain additional copies of this document please contact:
Western Cape Provincial Treasury
Directorate Financial Management
Private Bag X9165
4 Dorp Street
CAPE TOWN
Tel.: (021) 483-5613
Fax: (021) 483-5773
e-mail: [email protected]
Om addisionele afskrifte van hierdie dokument te bekom tree in verbinding met:
Wes-Kaapse Provinsiale Tesourie
Direktoraat Finansiële Bestuur
Privaatsak X9165
Dorpstraat 4
KAAPSTAD
Tel.: (021) 483-5613
Faks: (021) 483-5773
e-mail: [email protected]
Iikopi zolu xwebhu ungazifumana nokuqhagamshelana ne:
Western Cape Provincial Treasury
Directorate Financial Management
Private Bag X9165
4 Dorp Street
CAPE TOWN
Umnxeba: (021) 483-5613
Ifaksi: (021) 483-5773
e-mail: [email protected]
Foreword
Over the years, the Provincial Treasury of the Western Cape has developed a reputation of
being a well-run ship. Naturally, fresh blood comes with new ideas and the desire to do
things even better.
Over the next five years, Treasury will focus its efforts on promoting clean and efficient
governance across all departments, entities and municipalities. In close conjunction with the
Ministry, Treasury will put systems in place that will alert to any potential corruption threats,
to which responses will be prioritised. We will instil a sense of responsibility, across the
board and in cooperation with other departments, that government’s budget must be used
carefully, transparently and with full accountability. In so doing, we will lead this Province
and the local governments within our ambit, to higher levels of service delivery. Treasury
will also ensure that it maintains the efficient allocation of the Province’s budget, and
achieves marginal real growth.
The Provincial Treasury accepts that it has an important role to fulfil which cannot be
performed in isolation from National Treasury. It is therefore committed to strengthening its
relationship with the latter and developing a sound working platform with other provinces,
so that we can learn from their experiences and transfer any knowledge gained.
The modernisation process that was embarked upon in several departments will be phased in
as from 1 April 2010. From that date, Treasury will hand over the Strategic and Annual
Performance Plan of the Internal Audit Component and Corporate Services Component to
the Department of the Premier. Budget shifts for these components will only be reflected in
the adjustments estimates of 2010, once all due administrative and consultation procedures
are duly recorded and in place.
It has become evident that in government, performance information plays an increasingly
important and indispensable role. Rightly so, the contents of these documents are subject to
external auditing and concerted efforts are made to track and monitor their progress on a
quarterly basis. This comprehensive mandate has been duly taken up by the Provincial
Treasury in conjunction with the Department of the Premier, and I have every confidence that
my team will fulfil on its responsibilities.
ALAN WINDE
EXECUTIVE AUTHORITY OF FINANCE, ECONOMIC DEVELOPMENT AND TOURISM
OFFICIAL SIGN-OFF
It is hereby certified that this Strategic Plan:
– Was developed by the management of the Western Cape Provincial Treasury under the
guidance of Mr Alan Winde.
– Takes into account all the relevant policies, legislation and other mandates for which the
Western Cape Provincial Treasury is responsible.
– Accurately reflects the strategic goals and objectives which the Western Cape Provincial
Treasury will endeavour to achieve over the period 2010/11 – 2014/15.
A Gildenhuys (Mr) Signature ________________________
Chief Financial Officer
J C Stegmann (Dr) Signature ________________________
Accounting Officer
Approved by
A Winde (Mr) Signature ________________________
Executive Authority
CONTENTS
i
Contents
Foreword
Contents
PART A: STRATEGIC OVERVIEW
1. Vision 1
2. Mission 1
3. Values 1
4. Legislative and other mandates 1
5. Situational analysis 5
5.1 Performance environment 5
5.2 Organisational environment 5
5.3 Description of the strategic planning process 5
6. Strategic goals of the department 7
PART B: STRATEGIC OBJECTIVES
7. Programme 1: Administration 11
7.1 Programme Purpose 11
7.2 Programme structure 11
7.3 Strategic objectives 12
7.4 Resource considerations 16
7.5 Risk management 16
8. Programme 2: Sustainable Resource Management 18
8.1 Programme Purpose 18
8.2 Programme structure 18
8.3 Strategic objectives 20
8.4 Resource considerations 24
8.5 Risk management 25
STRATEGIC PLAN 2010/11 – 2014/15
ii
9. Programme 3: Assets and Liabilities 28
9.1 Programme Purpose 28
9.2 Programme structure 28
9.3 Strategic objectives 30
9.4 Resource considerations 33
9.5 Risk management 34
10. Programme 4: Financial Governance 36
10.1 Programme Purpose 36
10.2 Programme structure 36
10.3 Strategic objectives 37
10.4 Resource considerations 39
10.5 Risk management 39
PART C: LINKS TO OTHER PLANS
11. Links to the long-term infrastructure and other capital plans 42
12. Conditional grants 42
13. Public entities 42
14. Public-private partnerships 43
CONTENTS
Abbreviations
Abet Adult Basic Education and Training
AC Audit Committee
ACFS Annual Consolidated Financial Statements
ADP Accelerated Development Programme
AFR Asset Financing Reserve
AFS Annual Financial Statements
AGSA Auditor-General of South Africa
AO Accounting Officer
APP Annual Performance Plan
ASGISA Accelerate and Shared Growth Initiative of SA
ASB Accounting Standards Board
BAS Basic Accounting System
BBBEE Broad Based Black Economic Empowerment
BEE Black Economic Empowerment
BER Bureau for Economic Research
BI Business Intelligence
BIF Business Insight Folder
BPO Business Process Outsourcing
BS Budget Statement
BTO Budget Treasury Office
CASIDRA Cape Agency for Sustainable Development in Rural Areas
CeI Centre for e-Innovation
CFO Chief Financial Officer
CG Conditional grant
CIDB Construction Industry Development Programme
CPD Corporation for Public Deposits
DBC Departmental Bid Committee
DBSA Development Bank of Southern Africa
DLGH Department of Local Government and Housing
DORA Division of Revenue Act
DoTP Department of The Premier
DPWT Department of Public Works and Transport
EA Economic Analysis
EDU Economic Development Unit
EEP Employment Equity Plan
EOC Employer of Choice
EPS Electronic Purchasing System
EPWP Expanded Public Works Programme
ERA Enterprise Risk Assessor
FET Further Education Training
FETC Further Education and Training Certificate
STRATEGIC PLAN 2010/11 – 2014/15
iv
FMCM Financial Maturity Capability Model
FMIP Financial Management Improvement Plan
FMS Financial Management System
GAMAP Generally Accepted Municipal Accounting Practice
GDPR Gross Domestic Product per Region
GEPF Government Employees Pension Fund
GIAMA Government-wide Immovable Asset Management Act
GRAP Generally Recognised Accounting Practice
HDI Historically Disadvantaged Individual
HOD Head of Department
HOT Head Official Treasury
HR Human Resource
HRD Human Resource Development
HRDS Human Resource Development Strategy
HRM Human Resource Management
HSRC Human Sciences Research Council
IA Internal Audit
ICS Improvement in Conditions of Service
ICT Information Communication Technology
IDIP Infrastructure Delivery Improvement Programme
IDP Infrastructure Delivery Plan
IDP Integrated Development Plans
IDP Individual Development Plans
IE iKapa Elihlumayo
IFMS Integrated Financial Management System
IGCC Intergovernmental Cash Co-ordination
IIA Institute for Internal Auditors
IMFO Institute of Municipal Finance Offices
IMLC Institutional Management and Labour Committee
IPMU Infrastructure Programme Management Unit
IT Information Technology
IYM In-Year Monitoring
LED Local Economic Development
LG Local Government
LG MTEC Local Government – Medium Term Expenditure Committee
LOGIS Logistical Information System
MEC Member of Executive Council
MEDS Micro Economic Development Strategy
MEDSAS Medical Stores Administration System
MFMA Municipal Finance Management Act, 2003 (Act 56 of 2003)
MLO Media Liaison Officer
MPSA Minister of Public Service and Administration
MSP Master Systems Plan
MTBPS Medium Term Budget Policy Statement
MTEC Medium Term Expenditure Committee
CONTENTS
MTEF Medium Term Expenditure Framework
MTFF Medium Term Fiscal Framework
MTREF Medium Term Revenue Expenditure Framework
NMIR National Minimum Information Requirements
NT National Treasury
NTR National Treasury Regulations
OD Organisational Development
PDC Provincial Development Council
PERSAL Personnel and Salary Administration System
PER&O Provincial Economic Review and Outlook
PES Provincial Equitable Share
PFMA Public Finance Management Act, 1999 (Act 1 of 1999)
PGDS Provincial Growth and Development Strategy
PGWC Provincial Government Western Cape
PI Performance Indicator
PMDS Performance Management Development System
PMF Performance Management Frameworks
PMI Performance Measure Indicator
PMU Programme Management Unit
PPP Public Private Partnership
PPPFA Preferential Procurement Policy Framework Act
PPSC Provincial Portfolio Steering Committee
PSCBC Public Service Commission Bargaining Council
PSDF Provincial Spatial Development Framework
PT Provincial Treasury
PTF Provincial Treasury Forum
PTM Provincial Treasury Management
PTRPA Provincial Tax Regulation Process Act
QPR Quarterly Performance Report
REAL Revenue, Expenditure, Assets, and Liabilities
RFP Request for Proposal
RFQ Request for price Quotations
SAQA South African Qualification Authority
SARS South African Revenue Services
SCM Supply Chain Management
SCoA Standard Chart of Accounts
SCOF Standing Committee on Finance
SCOPA Standing Committee on Public Accounts
SDBIP Service Delivery Budget Implementation Plan
SDR Service Delivery Review
SEP Socio-Economic Profile
SER Socio-economic Review
SETA Sector Education and Training Authority
SIP Strategic Infrastructure Plan
SITA State Information Technology Agency
SME Small and Medium Enterprises
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SMME Small Medium and Micro Enterprise
SMS Senior Management Service
SPMS Staff Performance Management System
TCF Technical Committee on Finance
TCO Total Cost of Ownership
TELKOM Telecommunication
TMM Treasury Management Meeting
TQM Total Quality Management
URS User Requirement Statement
WCED Western Cape Education Department
WCGRB Western Cape Gambling and Racing Board
WC-MTBPS Western Cape Medium Term Budget Policy Statement
WCSD Western Cape Supplier Database
WSP Workplace Skills Plan
PART A: STRATEGIC OVERVIEW
1
PART A: STRATEGIC OVERVIEW
1. Vision
Change agent in resource allocation and utilisation practices in pursuing a systematic
reduction in social and economic disparities.
2. Mission
To obtain financial supportive means and foster the optimal utilisation of resources by means
of sound governance practices.
3. Values
The Provincial Treasury cherishes the following values:
• To give effect to the Public Service Code of Conduct.
• To be of service, to empower people.
• To be an employment equity employer.
• To be aware of, and to cultivate respect for our country’s heterogeneity.
• To benefit all people in the Western Cape.
4. Legislative and other mandates
The legislative mandate within which the Provincial Treasury operates consists of the
following mix of national and provincial legislation:
Annual Division of Revenue Act
To provide for the equitable division of revenue generated nationally, including conditional
grants, amongst the three spheres of government and matters incidental thereto.
Basic Conditions of Employment Act, 1997 (Act 75 of 1997)
To provide regulatory prescripts in addition to the Public Service Act, 1994 and the Public
Service Regulations, 2001 regarding the employment conditions for Treasury staff.
Borrowing Powers of Provincial Government Act, 1996 (Act 48 of 1996)
To provide norms and conditions which the Treasury must adhere to in negotiating loans for
the Provincial Government.
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Employment Equity Act, 1998 (Act 55 of 1998)
To regulate the processes and procedures of the Treasury in achieving a diverse and
competent work force broadly representative of the demographics of the Western Cape and
eliminating unfair discrimination in employment towards implementing employment equity.
Executives’ Members Ethics Act (Act 82 of 1998)
To provide for a code of ethics governing the conduct of members of provincial Executive
Councils, and to provide for matters connected therewith.
Government Employees, Pension Law, 1996 (Act 21 of 1996)
To make provision for the payment of pensions and certain other benefits to employees of
this department and to their dependants or nominees, and to provide for matters incidental
thereto.
Government Immovable Asset Management Act, 2007 (Act 19 of 2007)
To provide for a uniform framework for the management of an immovable asset that is held
or used by a provincial department and to ensure the coordination of the use of an
immovable asset with the service delivery objectives of a provincial department.
Intergovernmental Fiscal Relations Act, 1997 (Act 97 of 1997)
To define the role of the Minister of Finance, Economic Development and Tourism and that of
the Treasury as representative of the Provincial Government in promoting cooperation
between other spheres of government on fiscal, budgetary and financial matters; to provide
insight into the prescribed processes for the determination of the equitable share and
allocation of revenue generated nationally and for matters in connection therewith.
Intergovernmental Relations Framework Act, 2005 (Act 13 of 2005)
To establish a framework for the national government, provincial governments and local
governments to promote and facilitate intergovernmental relations; to provide for
mechanisms and procedures to facilitate the settlement of intergovernmental disputes; and to
provide for matters connected therewith.
Labour Relations Act, 1995 (Act 66 of 1995)
To regulate and guide the Treasury in recognising and fulfilling its role in effecting labour
harmony and the democratisation of the work place.
Local Government: Municipal Finance Management Act, 2003 (Act 56 of 2003)
To regulate financial management in the local sphere of government; to require that all
revenue, expenditure, assets and liabilities of municipalities and municipal entities are
managed economically, efficiently and effectively; to determine the responsibilities of persons
entrusted with municipal borrowing; to make provision for the handling of financial
emergencies in municipalities; and to provide for matters connected therewith.
PART A: STRATEGIC OVERVIEW
3
Money Bills Amendment Procedure and Related Matters Act, 2009 (Act 9 of
2009)
To provide for a procedure to amend monetary bills before Parliament; to provide for norms
and standards to amend monetary bills before provincial legislatures and other related
matters.
Occupational Health and Safety Act, 1993 (Act 85 of 1993)
To provide for the health and safety of persons at work and for the health and safety of
persons in connection with the use of plant and machinery; the protection of persons other
than persons at work against health and safety hazards arising out of or in connection with
the activities of persons at work; to establish an advisory council for occupational health and
safety; and to provide for matters connected therewith.
Public Audit Act, 2004 (Act 25 of 2004)
To provide assistance to the Auditor-General’s Office in recovering outstanding audit fees; to
intervene on matters arising from audit reports and to provide for matters connected
therewith.
Preferential Procurement Policy Framework Act, 2000 (Act 5 of 2000)
To provide the Treasury with a regulatory framework enabling and assisting departments
and potential historically disadvantaged individuals (HDIs) in the sustainable development
and implementation of a preferential procurement system.
Promotion of Access to Information Act, 2000 (Act 2 of 2000)
To give effect to the constitutional right of access to any information held by the State and any
other person that is required for exercising or protecting any rights; and to provide for
matters connected therewith.
Promotion of Administrative Justice Act, 2000 (Act 3 of 2000)
To give effect to the right to administrative action that is lawful, reasonable and procedurally
fair and the right to request written reasons for administrative action as contemplated in
section 33 of the Constitution of the Republic of South Africa, 1996; and to provide for matters
incidental thereto.
Provincial Tax Regulation Process Act, 2001 (Act 53 of 2001)
To regulate the intergovernmental process that must be followed by provinces in exercising
their powers in terms of section 228 of the Constitution to impose taxes, levies and duties, and
flat rate surcharges on the tax bases of any tax, levy or duty imposed by national legislation;
and to provide for matters connected therewith.
Public Finance Management Act, 1999 (Act 1 of 1999) (PFMA)
To regulate financial management in the Treasury to ensure that all revenue, expenditure,
assets and liabilities of the Treasury are managed efficiently and effectively; to provide for the
responsibilities of persons entrusted with financial management in the Treasury and to
provide for matters connected therewith. This Act describes the powers and functions of
Treasuries to direct their responsibilities with respect to other departments and public
entities.
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Public Service Act, 1994 (Act 103 of 1994) as amended
To provide for the organisation and administration of the Treasury and for human resource
management which includes the regulation of conditions of employment, terms of office,
discipline, retirement and the discharge of staff members of the Treasury and matters
connected therewith.
Remuneration of Public Office Bearers Act (Act 20 of 1998)
To provide for a framework for determining the upper limit of salaries and allowances of
Premiers, members of Executive Councils, members of Provincial Legislatures and members
of Municipal Councils; to provide for a framework for determining pension and medical aid
benefits of office bearers; to provide for the repeal of certain laws; and to provide for matters
connected therewith.
Skills Development Act, 1998 (Act 97 of 1998)
To provide an institutional framework to devise and implement national, sector and work
place strategies to develop and improve the skills of the South African work force; to
integrate those strategies within the National Qualifications Framework contemplated in the
South African Qualification Authority Act, 1995; to provide for learnerships that lead to
recognised occupational qualifications; to provide for the financing of skills development by
means of a levy-grant scheme and a National Skills Fund; to provide for and regulate
employment services; and to provide for matters connected therewith.
Skills Development Levy Act, 1999 (Act 9 of 1999)
To provide for the imposition of a skills development levy; and for matters connected
therewith.
Taxation Laws Amendment Act (Act 32 of 1999)
To amend the Marketable Securities Tax Act, 1948, in order to effect certain textual
alterations; to provide that a certain part of the salary of public office bearers is deemed to be
an allowance; to further regulate the taxation of the investment income of controlled foreign
entities and the investment income arising from donations, settlements or other dispositions;
to limit the application of certain exemptions; to provide for further exemptions; to further
regulate the allowance for tax purposes in respect of intellectual property and matters
relating thereto.
Western Cape Direct Charges Act, 2000 (Act 6 of 2000)
To provide for the withdrawal of State moneys from the Western Cape Provincial Revenue
Fund as a direct charge in accordance with the Constitution of the Republic of South Africa,
1996, the Constitution of the Western Cape, 1997 (Act 1 of 1998) and the Public Finance
Management Act, 1999 (Act 1 of 1999), and matters incidental thereto.
Western Cape Gambling and Racing Law, 1996 (Law 4 of 1996)
To provide for regulatory prescripts to support the responsible Minister in ensuring sound
financial administration and management and matters incidental thereto by the Western
Cape Gambling and Racing Board.
PART A: STRATEGIC OVERVIEW
5
Western Cape Law on the Powers and Privileges of the Provincial Legislature
Amendment Act, 1998 (Law 3 of 1998)
To provide the Treasury with regulatory prescripts to assist the Provincial Legislature to meet
its financial obligations as determined by legislation.
5. Situational analysis
5.1 Performance environment
In spite of all the initiatives regarding the fiscal initiatives that have been launched since 1994
both socio-economic disparities and the state of fiscal management within government, plus a
range of other issues, remain a challenge.
The scope of responsibility of Provincial Treasuries has also increased over the last 15 years
with greater involvement in the local sphere of government and an increasing role of fiscal
discipline and direction within provincial departments and associated entities. The aim of the
Provincial Treasury over the next five years will be to enhance allocative efficiency within the
context of marginal real growth in resource allocation and to assist departments and
municipalities to achieve higher levels of service delivery. These endeavours will place more
emphasis on an interactive and cooperative approach, accepting change as a norm. Greater
emphasis will therefore be on day to day practical improvements and to systematically
achieve those targets that were not met over the last 15 years, apart from achieving the goals
as set out in this document.
5.2 Organisational environment
New strategic goals were compiled for 2010/11 – 2014/15 for the Provincial Treasury to better
fulfil its constitutional mandate to address the socio-economic challenges of the Province in
tandem with departments, municipalities and other stakeholders. Furthermore, the
Department of the Premier is driving a multi-year modernisation process, which has been
initiated by the new Provincial Government that came into power in May 2009. The changes
in strategic goals therefore also necessitated new strategic objectives and performance
indicators that will become effective as from 1 April 2010.
5.3 Description of the strategic planning process
The new Strategic Plan (SP) and Annual Performance Plan (APP) compiled by the Provincial
Treasury is in line with National Treasury’s latest prescripts applicable to provincial
departments and entities for the new five-year planning period. Provincial Treasury’s SP and
APP processes commenced early in 2009 and was the end result of a culmination of a great
deal of analytical work and the joint effort of managers and their units to recompile their
strategic goals, strategic objectives and performance indicators from a new base. These
individual and team efforts were workshopped with the Minister of Finance, Economic
Development and Tourism early in January 2010 to obtain his final concurrence and support.
The strategic process of planning will carry on over the next six years to achieve even further
refinement and will be based on the measurement of performance at quarterly and annual
intervals. Each performance indicator has to be substantiated for feedback and approval by
STRATEGIC PLAN 2010/11 – 2014/15
6
the Accounting Officer and the responsible Minister. In turn, this information will be
subjected to both internal and external audits.
The effect of the modernisation process will, among others, result in a shift of the Internal
Audit (IA), Human Resource Management (HRM) and Enterprise Risk Management (ERM)
components to the Department of the Premier (DoTP). In the relevant sections, appropriate
notes have been inserted, where these components have been affected by mooted changes
with all performance measures and goals captured within the SP and APP of DoTP.
PART A: STRATEGIC OVERVIEW
7
6. Strategic goals of the department
Strategic Goal 1 Assist the member of the Executive Council and the HoD with the delivery
of the assigned functions to them.
Goal statement Render effective strategic secretarial support, administrative support and
communication services.
Justification Ensure that the vision, mission, strategic goals and objectives of the
Department are achieved.
Links Links to the Provincial Strategic framework objective of clean, value driven,
efficient and effective and responsive government.
Strategic Goal 2 Effective financial management of the department up to a level 3+ financial
capability rating.
Goal statement Deliver financial management and associated advisory services; to make
limited provision for accommodation requirements.
Justification Reduce risk, ensure efficient and effective use of financial resources, and
ensure clean audit reports and sustainability within the department.
Links Links to the Provincial Strategic framework objective of clean, value driven,
efficient and effective and responsive government.
Strategic Goal 3 Revenue adequacy, optimisation and efficiency of revenue collection for
departments and municipalities to achieve a level 3+ financial capability
rating.
Goal statement Efficient revenue sources and fiscal policy, which addresses financing
requirements with no adverse economic effects.
Justification The limited and constraint fiscal envelope requires provincial and local
government to ensure the optimum and efficient collection of all potential
revenue sources.
Links Links to the Provincial Strategic framework objective of clean, value driven,
efficient and effective and responsive government.
Strategic Goal 4 Responsive budgets for all provincial departments, municipalities and
entities to achieve a level 3+ financial capability rating.
Goal statement Promote the development of responsive departmental, municipal and entity
budgets that contribute to improvements of selected socio–economic
outcomes through economic analysis, budget policy formulation, budget
allocations and monitoring of performance.
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Justification Provincial, municipal and entity budgets are meant to play key roles as
policy instruments to address social and economic challenges. The
achievements of socio-economic imperatives need to be supported with
appropriate budget policy and budgetary allocations.
Budgets that address selected socio economic outcomes and government
priorities/goals as well as effective M&E processes to monitor performance of
budget policy and plans are important to ensuring effective resource
allocation.
Links Links to the Provincial Strategic framework objective of clean, value driven,
efficient and effective and responsive government.
Budget and related documents such as municipal integrated developments
plans, spatial development framework, local economic development plans,
which is supported by socio-economic statistics obtainable from Community
Surveys and National Census and the Local Government Turnaround
Strategy.
Strategic Goal 5 Credible budgets within departments, municipalities and entities to achieve
a level 3+ financial capability rating.
Goal statement Budgets that are sustainable, operationally efficient, purpose driven and
implemented as planned.
Justification Improve the sustainability and credibility of provincial, municipal and entity
budgets, the monitoring of implementation to enhance x-efficiency, financial
prudence and fiscal discipline in order to maximise the capacity of provincial
departments and municipalities to deliver services.
Links Links to the Provincial Strategic framework objective of clean, value driven,
efficient and effective and responsive government.
Links to the national Medium Term Spatial Framework’s outcome of a,
“responsive, accountable, effective and efficient local government system”,
and to the strategic objective “financial viability” of the five year strategic
agenda of local government, as well as to “financial management” of the
Local Government Turnaround Strategy.
Strategic Goal 6 Enhance departmental and municipal capacity and performance to achieve a
level 3+ financial capability rating for SCM and moveable asset
management.
Goal statement Assist departments and municipalities in respect of SCM and moveable asset
management to build capacity and enforce good governance practices; and for
departments to enhance relationships with BEE and SMME vendors in support
of preferential procurement imperatives and implement a transversal contract
model for the province that gives effect to economies of scale and value for
money.
PART A: STRATEGIC OVERVIEW
9
Justification Ensure that the vision, mission, strategic goals and objectives of the
Department are achieved.
Links Links to the Provincial Strategic framework objective of clean, value driven,
efficient and effective and responsive government.
Strategic Goal 7 Increase the level of infrastructure delivery to achieve a level 3+ financial
capability rating (departments of Education, Health, Transport and Public
Works and selected municipalities) and the sound management of PPP
projects.
Goal statement Effective and efficient delivery of infrastructure and management of
immovable assets, including PPP projects through institutionalising best
practice, systems, tools and building capacity.
Justification Departments and municipalities still lack the ability in terms of capacity,
business processes, etc. to achieve optimal investment in infrastructure and
sound management of immovable assets.
Links Links to the Provincial Strategic framework objective of clean, value driven,
efficient and effective and responsive government, as well as the National
Government’s Infrastructure Delivery Improvement Programme (IDIP).
Strategic Goal 8 Monitor and evaluate cash flow and investment management so that it is
sustainable and credible and will enhance service delivery and improve
liquidity in departments and municipalities.
Goal statement Ensure sustainable, credible and effective cash flow and investment
management in departments and municipalities.
Justification By ensuring more effective and efficient cash flow and investment
management it will improve service delivery and maintain liquidity in
departments and municipalities.
Links Links to the Provincial Strategic framework objective of clean, value driven,
efficient and effective and responsive government.
Strategic Goal 9 Management, utilisation and implementation of financial systems to achieve
a level 3+ financial capability rating within provincial departments and
selected entities.
Goal statement Provide for the standard implementation, management and technical user
support (helpdesk and training) of existing financial systems and the
transition to the Integrated Financial Management Solutions (IFMS) to
enhance compliance with the PFMA and other relevant legislation.
Justification This goal will contribute to sound financial management, skilled and
capacitated system users and compliance to user requirement statement.
Links Links to the Provincial Strategic framework objective of clean, value driven,
efficient and effective and responsive government.
STRATEGIC PLAN 2010/11 – 2014/15
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Strategic Goal 10 Ensure the development of accounting practices within provincial and local
government that will promote effective and efficient capturing of REAL
movements/accountability and contribute towards attaining level 3 and
higher auditable organisations.
Goal statement Establish a sound and dynamic financial accounting framework to promote
accountability, transparency and good governance.
Justification Improve the quality and integrity of financial accounting and reporting to
fully reflect all transactions and the values and extent of all assets owned
government.
Links This goal will contribute to clean municipal audits by the national target
year of 2014.
Links to the Provincial Strategic framework objective of clean, value driven,
efficient and effective and responsive government.
Strategic Goal 11 Enable departments and municipalities to achieve a level 3+ financial
management capability over the next 5 years.
Goal statement Develop, implement and monitor compliance with corporate governance
norms and standards within local and provincial government.
Justification In terms of S18 of the PFMA and S5 MFMA, PT must set the norms and
standards for financial management, and may assist with the
implementation thereof and thereby improve efficient and economic
utilisation of resources.
Links Links to the Provincial Strategic framework objective of clean, value driven,
efficient and effective and responsive government.
PART B: STRATEGIC OBJECTIVES
11
PART B: STRATEGIC OBJECTIVES
7. Programme 1: Administration
Programme Sub-programme
1. Administration 1.1. Office of the MEC
1.2. Management Services
1.3. Corporate Services (Shifts to the department of the
Premier)
1.4. Financial Management
7.1 Programme Purpose
Give strategic direction and to provide quality financial and other support services to the
Minister and the Head of Department.
7.2 Programme structure
The programme is further structured into the following sub-programmes:
Sub programme 1.1: Office of the MEC
Purpose: assist the Member of Executive Council with the assigned functions of the
Executive.
The Minister’s office renders secretarial and administrative services to assist the Minister with
the performance of his/her legislative responsibilities as MEC and as an elected public
representative. This includes fostering relationships with the media and all other parties
within government and the broader public.
Sub programme 1.2: Management Services
Purpose: assist the Head of Department with the functions assigned by the MEC.
The Office of the Head of Department provides strategic support to the Department as a
whole, including secretariat and other support services. This includes internal
communication and website services, information centre services and managerial
coordination for the Department.
Sub programme 1.3: Corporate Services
The Modernisation Programme, which is in an advanced stage, proposes a shift of the
Human Resource (excluding the Departments of Health and Education), Internal Audit and
Enterprise Risk Management functions to a shared Corporate Services within the Department
of the Premier with effect from 1 April 2010. Therefore the strategic objectives and
performance indicators relating to these functions are only reflected in the strategic and
STRATEGIC PLAN 2010/11 – 2014/15
12
annual performance plans of the Department of the Premier. The financial implications of the
function shift will be finalised during the 2010/11 adjusted estimates process once all of the
human resource and other related issues have been finalised.
Due to the modernisation process undertaken by the Department of the Premier clarity has
not yet been reached on all the specific administrative changes. Corporate Services will be
shifted to the DoTP to provide a model in the Province. Training and personnel development
responsibilities have been assigned to the heads of the different programmes within the
Treasury.
Sub programme 1.4: Financial management
Purpose: effective financial management of the department up to a level 3+ financial
capability rating and the provision of limited accommodation requirements and support
services.
This sub-programme is driven by the Chief Financial Officer (CFO) who is appointed in terms
of Chapter 2 of the National Treasury Regulations and reports directly to the Accounting
Officer. The main duties are spread across five sections.
The Management Accounting section is responsible for the compilation of annual and
adjusted budgets, quarterly and annual performance reports, and the monitoring and control
of expenditure.
The Financial Accounting section is responsible for maintaining an effective payments
system, for compiling the annual financial statements and maintaining the ledger accounts of
the Department.
The Supply Chain Management section (SCM) is responsible for providing and developing
the SCM database, maintaining and safeguarding assets and providing administrative
support in respect of the acquisition of goods and services.
The Internal Control section must ensure that effective internal control measures are in place
throughout the Department, particularly in high-risk areas and also ensure the prevention of
adverse internal and external audits.
Currently the Auxiliary Services section still resides under the CFO, which includes the
registry, government vehicles, telephone services, reprographic services, messenger services
and food aid services.
7.3 Strategic objectives
Strategic Objective 1 Provide secretarial and administrative services to the Ministry.
Objective statement Effective, efficient and economic secretarial and administrative services
within the Ministry in alignment with departmental strategic goals.
Baseline Services are currently rendered satisfactorily, but the effectiveness and
efficiency can be improved.
PART B: STRATEGIC OBJECTIVES
13
Justification Secretarial and administrative services within the Ministry are required to
ensure that the Minister is able to perform the responsibilities as Member of
the Executive Council and public representative.
Links Links to the Provincial Treasury’s Strategic Goal 1: assisting the MEC and
the HoD with the delivery of the assigned functions to them.
Strategic Objective 2 Render communication services to the Ministry.
Objective statement Effective communication through media liaison services.
Baseline Current relationship with media is satisfactory, but better relationships
need to be fostered to ensure that media coverage portrays the portfolio
responsibilities of the Minister.
Justification Media coverage will ensure that the public is informed of the Minister’s
execution of the portfolio responsibilities.
Links Links to the Provincial Treasury’s Strategic Goal 1: assisting the MEC and
the HoD with the delivery of the assigned functions to them.
Strategic Objective 3 Assist with strategic management and support to the Ministry.
Objective statement Strategic management and support to aid the Executive Authority in the
execution of the assigned responsibilities.
Baseline Difficult to determine the current level of performance as it is a new
strategic objective.
Justification Strategic management and support to the Minister is necessary to ensure
that the Departments deliver on their mandates and that the Minister
therefore executes the responsibilities as Executive Authority.
Links Links to the Provincial Treasury’s Strategic Goal 1: assisting the MEC and
the HoD with the delivery of the assigned functions to them.
Strategic Objective 4
Build competencies and enhance and maintain strategic support services.
Objective statement
Ensure effective operation of the Head of Department (HOD) office by
rendering strategic support to the Provincial Treasury.
Baseline
Systems in place that captures and tracks progress with the implementation
of the Provincial Treasury key areas.
Justification
Ensure that there is a clear operational plan, inclusive of human capital and
other support services in place for the HOD to provide leadership and
strategic direction to the rest of Provincial Treasury.
Links Links to the Provincial Treasury’s Strategic Goal 1: assisting the MEC and
the HoD with the delivery of the assigned functions to them.
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Strategic Objective 5
Effective communication and event co-ordination within Treasury.
Objective statement
Render strategic support, coordination, communication and information
services.
Baseline
Internal and external communication strategies and information services in
place for the whole department.
Justification
Ensure that all staff members at Treasury are well informed about activities
happening and have access to information required to fulfil their
responsibilities.
Links Links to the Provincial Treasury’s Strategic Goal 1: assisting the MEC and
the HoD with the delivery of the assigned functions to them.
Strategic Objective 6
Responsive and credible budget composition and delivery for the
department.
Objective statement
Ensure a realistic budget that is within the prescribed limits and availability
of funds and to promote efficient financial resource use.
Baseline
Department has a realistic budget that is credible together with a financial
efficiency programme in place.
Justification
Ensuring that the budget prepared can meet the business of the department
and that the variance between Main and Adjusted Budget is less than 2%.
Links
Links to the Provincial Treasury’s Strategic Goal of rendering financial
management advisory services. (Strategic goal 2)
Strategic Objective 7 Full and accurate reflection of all financial transactions of the department.
Objective statement Maintain a proper management of ledgers and achieve a clean audit report.
Deliver a fully effective accounting function to the department to achieve
proper management of ledgers, clean audits, a complete and maintained
asset register and payment of creditors within 30 days.
Baseline Unqualified successive audits, payments are made within 30 days and
ledgers are reconciled monthly.
Justification Financial transactions in ledgers reflect a healthy status of a department that
is auditable.
Links Links to the Provincial Treasury’s Strategic Goal of rendering financial
management advisory services. (Strategic goal 2)
PART B: STRATEGIC OBJECTIVES
15
Strategic Objective 8 Level 3 auditable supply chain management services.
Objective statement Provide and develop SCM databases for stocks, IT equipment and assets,
appropriate policy frameworks, a responsive procurement plan, a revised
accounting officer’s system of delegations and effective monitoring and
evaluation of SCM.
Baseline According to Provincial Treasury’s findings, SCM services are average.
Justification Improve to acceptable levels of level 3 and higher.
Links Links to the Provincial Treasury’s Strategic Goal of rendering financial
management advisory services. (Strategic goal 2)
Strategic Objective 9 Effective internal control measures and risk mitigation.
Objective statement Identify risk mitigation strategies, the improvement of internal control
management and institutionalisation of financial management
improvement.
Baseline Risk management, internal capacity and internal control are not on par and
managers do not always manage their risks effectively.
Justification Proactive planning, correct identification of risks and early remedy of any
financial management risks or deficiencies or capacity.
Links Links to the Provincial Treasury’s Strategic Goal of rendering financial
management advisory services. (Strategic goal 2)
Strategic Objective 10 Provide effective auxiliary and specialised support services.
Objective statement Ensure a proper filing and tracking system and the maintenance of the GG
fleet.
Baseline To provide effective auxiliary support services to the department.
Justification Good auxiliary services ensure a smooth running department.
Links Links to the Provincial Treasury’s Strategic Goal of rendering financial
management advisory services. (Strategic goal 2)
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7.4 Resource considerations
Audited Audited Audited
2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13
Office of the Minister
a
2 774 3 312 3 595 4 465 4 896 5 253 5 612
Management Services 2 029 2 566 2 576 3 341 5 287 5 652 6 006
Corporate Services 8 928 13 371 13 676 12 149 7 758 8 303 8 856
Financial Management 14 993 14 198 20 294 20 049 21 449 23 008 23 532
28 724 33 447 40 141 40 004 39 390 42 216 44 006
Medium-term estimate
Revised
estimate
Sub-programme
R'000
Outcome
1.
2.
3.
4.
Total payments and estimates
Changes over time reflect a variety of policy choices, ultimately resulting in placing greater
responsibility with Programme and sub programme managers for staff development and
those costs that can be directly attributed to the running of their programme or sub
programme. Examples of the latter are printing, audit and staff related costs. The rise in
compensation of employee costs relates to the bolstering of the CFO office and that of the
Minister and HoD, calculated to improve overall financial and strategic management of the
Provincial Treasury as well as to meet regulatory requirements.
Provision has also been made for predetermined IT technology refresh and associated
enhancements to meet the data and information management requirements of the
department. The rollout of the corporatisation model (inclusive of human resource, enterprise
risk management and internal audit services) as well as initiatives to introduce e-filing,
reconfiguration and appropriate placement of support services will take place in due course
7.5 Risk management
Sub-programme 1.1: Office of the MEC, 1.2: Management Services and 1.3: Corporate
Services
The risks relating to the Office of the MEC and the Office of the Head of Department are
taken up in an enterprise risk management model of the Department. No significant risks are
therefore identified for the first two sub-programmes of Programme 1 in terms of the current
model, the low impact and the unlikelihood of these risks manifesting themselves during the
next five year. As indicated under paragraph 7.2 above, Corporate Services has been shifted
to the DoTP.
Sub-programme 1.4: Financial management
Risk:
The management of Supply Chain Management Unit is lower than level 3.
Mitigation:
The mitigation of risks inherent in the SCM process is challenging and is receiving urgent
attention under the guidance of the CFO. Many models that have been developed in the
PART B: STRATEGIC OBJECTIVES
17
2009/10 financial year will be implemented and become operative during the first three years
of the next five-year cycle. Capacity constraints within the unit are being addressed and
training and liaison with the Provincial Treasury is strengthened. In general, external factors
will also have to be guided by both the Provincial and National Treasury to ensure that the
SCM units in all departments receive guidance and support over the next five years.
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8. Programme 2: Sustainable Resource Management
Programme Sub-programme
2. Sustainable Resource Management 2.1. Programme Support
2.2. Fiscal Policy
2.3. Budget Management
2.4. Public Finance
8.1 Programme Purpose
To inform financial resource allocation, to manage the provincial budget and to monitor the
implementation of provincial, municipal and entity budgets to enhance the effective
utilisation of available fiscal resources.
8.2 Programme structure
The programme currently consists of two chief directorates, namely Public Finance and
Public Policy Services, which fall under the branch Fiscal and Economic Services. The
programme is further divided into the following sub-programmes:
Sub-programme 2.1: Programme support
This sub-programme houses the head of the branch: Fiscal and Economic Services and the
two chief directors responsible for Public Policy Services and Public Finance, respectively. It
also provides resources for the structured training and development of the staff in the
programme.
Sub-programme 2.2: Fiscal Policy
Purpose: provide for the effective and efficient development of revenue streams
The Fiscal Policy sub-programme provides guidance on the effective and efficient
development and collection of all available revenue streams. The recent downturn in
economic activity has resulted in a pronounced decline in available resources to provincial
and local governments from the existing tax instruments. Therefore, initiatives in the sub-
programme to improve the sustainability of provincial and municipal budgets include a
variety of actions to explore the full use of available revenue sources. These actions refer to
research, inputs into a new provincial fiscal framework, refining and updating current
research initiatives and developing new revenue proposals where that may prove to be
feasible.
PART B: STRATEGIC OBJECTIVES
19
Sub-programme 2.3: Budget Management
Element: Provincial Government Budget Management
Purpose: provide for provincial economic analysis and advice that informs fiscal policy and
the budget allocation process and to assist, assess and report on policy attainment across the
provincial sphere.
This sub-programme’s key focus area is on improving the responsiveness of the provincial
budget to address socio-economic imperatives through, amongst others, the annual
publication of the Provincial Economic Review and Outlook (PER&O), the medium-term
budget policy statement, associated budgetary allocations over the MTEF and the budget
overview.
In addition, the focus is on informing resource allocations that increasingly respond to socio-
economic imperatives through the assessment of budget and policy plans, initiatives to
improve performance information and reporting in provincial departments, and public
entities and monitoring of budget implementation and performance.
Element: Local Government Budget Management
Purpose: provide for local government economic analysis and advice that informs fiscal
policy and the budget allocation decisions and to assist, assess and report on policy
attainment across the local government sphere.
This sub-programme’s key focus area is on improving the responsiveness of municipal
budgets to address socio-economic imperatives through evaluation and advice on the
appropriateness of these to facilitate the prioritisation of basic needs of communities and the
promotion of their social and economic development.
Sub-programme 2.4: Public Finance
Element: Provincial Government Finance
Purpose: compile the annual main and adjustments estimates and the efficient
implementation thereof, to assist, assess and report on provincial revenue and expenditure
management, including provincial entities and to provide oversight of the Western Cape
Gambling and Racing Board.
This sub-programme is responsible for the assessment of provincial budgets to improve their
sustainability and credibility and for monitoring the implementation of budgets to enhance x-
efficiency, financial prudence and fiscal discipline. A key objective is improving the
credibility and sustainability of provincial budgets by promoting efficient budget
implementation.
Element: Local Government Finance (Groups 1 and 2)
Purpose: assist, assess and report on municipal budgets, revenue and expenditure
management, including municipal entities and to drive the implementation of the Local
Government: Municipal Finance Management Act, 2003 (Act 56 of 2003).
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The sub-programme is divided into two directorates, namely Group 1 (mainly coastal
municipalities) and Group 2 (mainly non-coastal municipalities). They will respectively
concentrate on improving the credibility and sustainability of municipal budgets by
promoting efficient budget implementation and developing the functional ability of
municipalities through the implementation of standards, knowledge-sharing and training
(internally and externally).
Further steps will be taken to improve the interface between municipal budgets and in-year
monitoring by identifying gaps in the interface and implementing remedial steps relating to
revenue and expenditure management in municipalities.
8.3 Strategic objectives
Strategic Objective 11
Build competencies and enhance and maintain the delivery of the
programme.
Objective statement Ensure effective, targeted and efficient operation of the programme.
Baseline
Support services provided to the programme are satisfactory, but the
effectiveness and efficiency of the programme can be improved.
Justification
Ensure that there is a clear operational plan, inclusive of human capital and
other support services for the programme to better meet its business
objectives.
Links
Contributing to the Provincial Treasury’s Strategic Goal 1: assisting the
member of the Executive Council and the HoD with the delivery of the
assigned functions to them.
Strategic Objective 12 Full utilisation of all potential revenue sources available to provincial and
local governments.
Objective statement Provide for the effective and efficient development and collection of all
available revenue streams.
Baseline No new provincial taxes have been implemented over the last five years.
Base research (desktop) on fuel levy, bed levy and tourism taxes have been
done.
The current global economic environment impacted on resource availability
and resulted in major government revenue shortfalls across the world,
including South Africa, which impacted directly on the available resources
to provincial and local governments.
Sharp declines in available funding (other than for statutory payments) to
the provincial government.
Justification The sharp decline in available resources to provincial and local governments
necessitates a fresh look at exploring initiatives aimed at the full use of
available revenue sources, taking into account economic realities.
Links Links to the Provincial Treasury’s Strategic Goal 3: revenue adequacy,
optimisation and efficiency of revenue collection for departments and
municipalities to achieve a level 3+ financial capability rating.
PART B: STRATEGIC OBJECTIVES
21
Strategic Objective 13 Mechanisms for revenue collections in provincial and local governments
that are optimum inclusive of cash management arrangements.
Objective statement Provide for the effective and efficient mechanisms of revenue collection
within provincial and local governments.
Baseline No assessment has been done as yet into whether provincial and local
governments are using effective and efficient mechanisms in optimising
their revenue collection and potential.
The current global economic environment impacted on resource availability
and resulted in major government revenue shortfalls across the world,
including South Africa, which impacted directly on the available resources
to provincial and local governments
Sharp declines in available funding (other than for statutory payments) to
the provincial and local government require new initiatives in becoming
increasingly more efficient and effective.
Justification The sharp decline in available resources to provincial and local governments
necessitates a fresh look at exploring new initiatives aimed at becoming
increasingly more effective and efficient with revenue collection.
Links Links to the Provincial Treasury’s Strategic Goal 3: revenue adequacy,
optimisation and efficiency of revenue collection for departments and
municipalities to achieve a level 3+ financial capability rating.
Strategic Objective 14 Evaluate the responsiveness of budgets within provincial departments and
entities.
Objective statement Evaluate the responsiveness of budgets for provincial departments and
entities to inform resource allocations that increasingly respond to socio-
economic imperatives through the assessment of budget and policy plans,
initiatives to improve performance information and reporting and
monitoring of performance.
Baseline The responsiveness of budgets have been assessed as part of the PG MTEC 1
and 2 processes.
Justification Provincial budgets are meant to play a key role as a policy instrument to
address social and economic challenges. The achievement of socio-economic
imperatives needs to be supported with appropriate budgetary allocations.
In order to assess the effectiveness of the financial resource allocation in
achieving predetermined objectives including improving social and
economic outcomes, quality performance information is required to feed
into the budget allocation process. The determination of an evaluation
criteria and linking of measurement indicators are required to track progress
against plans.
Links Links to the Provincial Treasury’s Strategic Goal 4: responsive budgets for
all provincial departments, municipalities and entities to achieve a level 3+
financial capability rating.
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Strategic Objective 15 Conduct economic analysis to inform provincial planning and budgeting
processes.
Objective statement Review, analyse and report on economic parameters and socio-economic
information to inform provincial planning and budgeting processes on an
annual basis.
Baseline One annual publication of a Provincial Economic Review and Outlook,
which provides the socio-economic context to the Medium Term Budget
Policy Statement and Budget Overview.
Justification Research on the economic parameters and socio-economic situation is
required to describe the situation that budgets need to address and to
provide a context, which facilitates and informs the development of a
responsive budget.
Links Links to the Provincial Treasury’s Strategic Goal 4: responsive budgets for
all provincial departments, municipalities and entities to achieve a level 3+
financial capability rating.
Strategic Objective 16 Evaluate the responsiveness and implementation of the budget.
Objective statement Evaluate and advise on the responsiveness of municipal budgets to facilitate
the prioritisation of the basic needs of the community and promotion of
social and economic development of communities through the monitoring of
Service Delivery and Budget Implementation Plans, Mid-Year reports and
Annual Reports
Baseline Achieve a level of responsiveness in municipal budgets that is consistent
with the aims of the local government turnaround strategy. Municipal
budgets that support the provincial strategic objective of clean, value driven,
efficient and effective responsive government.
Justification Improve the responsiveness and implementation of municipal budgets by
providing advice and on-going monitoring and evaluation.
Links Links to the Provincial Treasury’s Strategic Goal 4: responsive budgets for
all provincial departments, municipalities and entities to achieve a level 3+
financial capability rating.
PART B: STRATEGIC OBJECTIVES
23
Strategic Objective 17 Evaluate the credibility and sustainability of the budget.
Objective statement Assessing provincial budgets to improve the sustainability and credibility
and the monitoring of the implementation to enhance x-efficiency, financial
prudence and fiscal discipline.
Baseline Given the legislative financial framework in the provincial government
environment as well as the competency levels of provincial finance officials,
the performance of provincial budgets varies between a 2 and 3 auditable
rating.
Justification Improve the sustainability and credibility of provincial budgets and the
monitoring of implementation to enhance x-efficiency, financial prudence
and fiscal discipline.
Links Links to the Provincial Treasury’s Strategic Goal 5: credible budgets within
departments, municipalities and entities to achieve a level 3+ financial
capability rating.
Strategic Objective 18 Monitor the implementation of the budget in terms of x-efficiency, financial
prudence and fiscal discipline.
Objective statement Ensuring x-efficiency, financial prudence and fiscal discipline in the
implementation of the budget.
Baseline Given the legislative financial framework in the provincial government
environment as well as the competency levels of provincial finance officials
the performance of provincial budgets vary between a two and three
auditable rating.
Justification Monitor value for money spend and budgeting implementation practices.
Links Links to the Provincial Treasury’s Strategic Goal 5: credible budgets within
departments, municipalities and entities to achieve a level 3+ financial
capability rating.
Strategic Objective 19 Develop and capacitate departments and entities through the
implementation of standards, knowledge sharing and training (internally
and externally).
Objective statement Provide policy advice and training, knowledge sharing and the
implementation of standards to ensure sound and sustainable management
of financial affairs of departments and entities.
Baseline No standard operating procedures’ relating to budgets exists.
Justification Ensure standardisation across the Province with regard to the
implementation of budgets and to ensure that standard efficiency practices
are executed.
Links Links to the Provincial Treasury’s Strategic Goal 5: credible budgets within
departments, municipalities and entities to achieve a level 3+ financial
capability rating.
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Strategic Objective 20 Evaluate the credibility and monitor the implementation of the budget.
Objective statement Assessing municipal budgets to improve the sustainability and credibility
and monitoring the implementation thereof to enhance x-efficiency, financial
prudence and fiscal discipline.
Baseline Given the legislative financial reforms in the local government environment
as well as the competency levels of municipal officials, the performance of
municipal budgets varies between a 2 and 3 auditable rating.
Justification Improve the sustainability and credibility of municipal budgets and
monitoring the implementation thereof to enhance x-efficiency, financial
prudence and fiscal discipline.
Links Links to the Provincial Treasury’s Strategic Goal 5: credible budgets within
departments, municipalities and entities to achieve a level 3+ financial
capability rating.
Strategic Objective 21 Develop the functional ability of municipalities through the implementation
of standards, knowledge sharing and training (internally and externally).
Objective statement Structured roll-out of the 16 MFMA implementation priorities relating to
revenue and expenditure management in municipalities.
Baseline Given the legislative financial reforms in the local government environment
as well as the competency levels of municipal officials, the financial
performance of municipal varies between a 2 and 3 auditable rating.
Justification Improve the interface between municipal budgets and in-year monitoring
by identifying the gaps in the interface and the implementation of remedial
steps relating to revenue- and expenditure management in municipalities.
Links Links to the Provincial Treasury’s Strategic Goal 5: credible budgets within
departments, municipalities and entities to achieve a level 3+ financial
capability rating.
8.4 Resource considerations
Audited Audited Audited
2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13
Programme Support 1 742 1 475 1 605 2 473 3 247 3 452 3 679
Fiscal Policy 1 163 230 662 2 954 3 895 4 159 4 413
Budget Management 9 746 10 478 8 974 11 224 13 582 14 684 15 757
Provincial Government
Budgets
7 374 8 154 8 733 9 310
Local Government Budgets 3 850 5 428 5 951 6 447
Public Finance 8 681 9 357 10 105 19 212 26 539 28 313 30 094
Provincial Government
Finance
4 553 3 432 3 157 10 363 14 062 14 964 15 881
Local Government Finance:
Group 1
4 128 5 925 6 948 4 756 7 402 7 899 8 403
Local Government Finance:
Group 2
4 094 5 075 5 450 5 810
21 332 21 540 21 346 35 864 47 263 50 608 53 943 Total payments and estimates
Medium-term estimate
Outcome
4.
2.
3.
1.
Sub-programme
R'000
Revised
estimate
PART B: STRATEGIC OBJECTIVES
25
The increases in the allocations over the MTEF have mainly been to cater for the increased
responsibilities relating to the implementation of the Municipal Finance Management Act
(MFMA), transversal performance audits to be conducted by the Auditor-General across a
number of provincial departments over the 2010 MTEF, and for initiatives aimed at
increasing provincial revenue. The latter includes a review of gambling taxes and of the
national fiscal transfer system to provinces. These additions resulted in concomitant changes
in the economic classification for both goods and services and compensation of employees.
Management considerations
The sub-programmes are evolving and further reconfiguration is therefore being considered.
This entails the possible establishment of a new chief directorate that focuses specifically on
MFMA issues to improve the credibility and sustainability of municipal budgets through
more efficient budget implementation, developing the functional ability of municipalities,
clearer standards, knowledge-sharing and training, and better coordination. In addition, a
refocus of the Chief Directorate: Public Finance to include an additional directorate that will
focus exclusively on data and information management initiatives for Treasury, the relocation
of Immovable Asset Management and Liabilities Management from Programme 3 and
shifting the Research and Modelling unit to the Chief Directorate: Public Policy Services.
8.5 Risk management
Sub programme 2.1: Programme Support
Due to the low impact and likelihood of identified risks to manifest itself over the next five
years, no further discussion of this will take place.
Sub Programme 2.2: Fiscal Policy
Risk:
Further deterioration of the current global economic environment which has a negative
impact on the resources available from the national fiscus, as well as concomitant non-
approval of new provincial revenue proposals by the National Treasury.
Mitigation:
Developing a risk-aversion fiscal framework going forward, moving towards balanced
budgets over the MTEF and creating sufficient cash-backed reserves that would cushion
against unexpected external shocks. This would include an adequate contingency reserve,
the building up a working capital reserve over the MTEF that would assist with liquidity
requirements and rebuilding the asset financing reserve to fund future infrastructure
development.
New tax proposals would be backed by research conducted by reputable institutions giving
consideration only to those that are both economically and politically viable.
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Sub programme 2.3: Budget Management
Element: Provincial Government Budget Management
Risk:
Mismatch between resource allocations to adequately respond to socio-economic imperatives
and actual budget implementation, together with budget allocations and provincial planning
that are not informed by credible socio economic data or considerations.
Mitigation:
Responsiveness of budgets and policies of departments to address socio-economic
imperatives will be assessed. This includes tighter monitoring of budget implementation to
check on responsiveness in addressing socio economic needs via the quarterly reporting
mechanism. This monitoring is intended to better track departmental and entity performance
against stated planned targets and through this to identify improvements in either the
monitoring or stated performance targets, or both, to systematically increase departmental
responsiveness.
Also to be pursued is a better tie-up between the financial (Public Finance) and non-financial
(Budget Management) aspects of budget implementation and composition.
An analytical framework to include clarity on the content of desired socio-economic
information is to be published and this can be used by the different role players, as well as
feeding into the annual publication of the Provincial Economic Review and Outlook.
Element: Local Government Budget Management
Risk:
The need for credible socio economic data that informs the municipal planning process.
Mitigation:
The publication of allocations with targets at ward level is essential together with the
monitoring of performance against targets at the lowest level (wards within local
governments). Socio-economic district profiles for municipalities, which will include assessed
administrative data of municipalities, will be developed over the next five years. This will put
credible data/knowledge management in place that can then be used uniformly by the
different role players in the Province at local government level. This will help to improve the
Integrated Development Plans and the resultant budgets.
Sub Programme 2.4: Public Finance
Element: Provincial Government Finance
Risk:
Provincial budgets (departments and entities) that are unsustainable, operationally
inefficient, not purpose driven and not implemented as planned.
PART B: STRATEGIC OBJECTIVES
27
Mitigation:
Structured assessment of provincial budgets and in-year financial performance monitoring
against a range of financial management and budget performance criteria, as well as
providing feedback to all departments and entities.
Element: Local Government Finance
Risk:
Municipal budgets that are unsustainable, operationally inefficient, not purpose driven and
implemented as planned.
Mitigation:
Structured assessment of municipal budgets and in-year financial performance monitoring
against a range of financial management and budget performance criteria, plus appropriate
feedback to all municipalities. In addition, fully functional intersphere coordinating and
feedback structures to further mitigate any risks and improve the sustainability of municipal
budgets.
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9. Programme 3: Assets and Liabilities
Programme Sub-programme
3. Assets and Liabilities 3.1. Programme Support
3.2. Asset Management
3.3. Liabilities Management
3.4. Interlinked and Financial Support Systems
9.1 Programme Purpose
The aim of this programme is to provide policy direction and to facilitate the effective and
efficient management of financial systems, physical and financial assets, public-private
partnerships and liabilities within the provincial and municipal spheres.
9.2 Programme structure
The Programme currently consists of the following sub-programmes:
Sub-programme 3.1: Programme support
This sub-programme houses the head of the branch: Governance and Asset Management
(who is responsible for Programmes 3 and 4) and the chief director responsible for this
programme. It also provides resources for the structured training and development of the
staff in the programme.
Sub-programme 3.2: Asset Management
Element: Moveable Asset Management
Purpose: enhance departmental and municipal capacity and performance to a level 3+
financial capability for supply chain (SCM) and movable asset management.
The Movable Asset Management section is responsible for the enforcement of SCM
requirements, respectively in terms of the PFMA and the MFMA and their regulations, to
assist, guide and issue best practice guidelines to provincial departments, entities and
municipalities and to investigate any system of control or financial management from a SCM
perspective. This means engaging provincial departments, entities and municipalities on the
implementation of SCM and conducting compliance/capacity assessments.
It also implies implementation of asset management requirements within the Province,
developing Provincial Treasury instructions for SCM and facilitating the arrangements of
transversal contracts. The unit also facilitates initiatives and drives policy towards supplier
development and preferential procurement initiatives.
PART B: STRATEGIC OBJECTIVES
29
Element: Immovable Asset Management
Purpose: increase the level of infrastructure delivery to a level 3+ financial capability rating
(departments of Education, Health, Transport and Public Works and selected municipalities)
and the sound management of PPP projects.
The Immovable Asset Management section is responsible for assessing infrastructure budgets
and infrastructure plans, monitoring and enhancing infrastructure spending performance of
designated departments (Education, Health, Transport and Public Works) and championing
infrastructure delivery improvement processes in these departments.
This section is also responsible for advising municipalities on immovable asset management
and statutory infrastructure reporting, providing views on the infrastructure components of
the draft municipal budgets, monitoring infrastructure spending performance of
municipalities and piloting infrastructure delivery business improvement processes in
selected municipalities.
The PPP section is, amongst other, responsible for advising and assisting provincial
departments and municipalities on PPP projects and monitoring of PPP projects.
Sub programme 3.3: Liabilities Management
Purpose: monitor and evaluate cash flow and investment management so that it is
sustainable and credible and will enhance service delivery and improve liquidity in
departments and municipalities.
The Investments section is responsible for the investment of provincial funds, which are not
immediately required to defray expenditure, at reputable financial institutions in accordance
with an approved investment policy.
The Cash Flow Management section is responsible for controlling the Provincial Revenue
Fund and the prudent management of cash by departments. The section also provides
assistance to municipalities conducting cash flow management assessments to improve
liquidity.
Sub programme 3.4: Supporting and Interlinked Financial Systems
Purpose: Management, utilisation and implementation of financial systems to achieve a level
3+ financial capability rating within provincial departments and selected entities.
The Operations and Implementation section is responsible for the day to day management of
transversal systems (currently BAS, LOGIS and PERSAL), utilised by all departments as well
the Provincial Parliament. In addition, this section is also responsible for providing and
maintaining user access control to all transversal financial systems.
The User Support section is responsible for providing assistance and support to system users,
while the Training section is responsible for the training of a target market of approximately
7 000 employees in all aspects of the systems to ensure its proper utilisation and management.
STRATEGIC PLAN 2010/11 – 2014/15
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9.3 Strategic objectives
Strategic Objective 22
Build competencies and enhance and maintain the delivery of the
programme.
Objective statement Ensure effective, targeted and efficient operation of the programme.
Baseline
Support services provided to the programme are satisfactory, but the
effectiveness and efficiency of the programme can be improved.
Justification
Ensure that there is a clear operational plan, inclusive of human capital and
other support services for the programme to better meet its business
objectives.
Links
Contributing to the Provincial Treasury’s Strategic Goal 1: assisting the
member of the Executive Council and the HoD with the delivery of the
assigned functions to them.
Strategic Objective 23 Determine policy to drive, assess and assist departments in the attainment of
building capacity, ensuring integrity of data, enforcing transparency and
accountability, balancing commercial imperatives with social responsibility
and addressing economies of scale and value for money for supply chain
and moveable assets.
Objective statement Build departmental capability to address strategic issues in respect of SCM
and moveable asset management to improve efficiency gains and defining
effective procedures for identifying and addressing skills gaps and training
needs and improve departmental performance through the integration of
policy and delivery .
Baseline The manifestation of a high level of non-compliance to supply chain
management, legislation, policy and procedure, has resulted in disparate
expenditure trends, lack in cost effectiveness and value for money as well as
collusive, uncompetitive and non-transparent tender processes within
departments.
Justification Gives effect to a programme to ensure improved transparency,
accountability and capacity for supply chain management and moveable
assets within departments.
Links Links to the Provincial Treasury’s Strategic Goal 6: enhancing departmental
and municipal capacity and performance to achieve a level 3+ financial
capability rating for SCM and moveable asset management.
PART B: STRATEGIC OBJECTIVES
31
Strategic Objective 24 Determine policy to drive, assess and assist municipalities in the attainment
of building capacity, ensuring integrity of data, enforcing transparency and
accountability for supply chain and moveable assets.
Objective statement Build municipal capability to address strategic issues in respect of SCM and
moveable asset management to improve efficiency gains and defining
effective procedures for identifying and addressing skills gaps and training
needs.
Baseline The manifestation of a high level of non-compliance to supply chain
management, legislation, policy and procedure, has resulted in disparate
expenditure trends, lack in cost effectiveness and value for money as well as
collusive, uncompetitive and non-transparent tender processes within
municipalities.
Justification Gives effect to a programme to ensure improved transparency,
accountability and capacity for supply chain management and moveable
assets within municipalities.
Links Links to the Provincial Treasury’s Strategic Goal 6: enhancing departmental
and municipal capacity and performance to achieve a level 3+ financial
capability rating for SCM and moveable asset management.
Strategic Objective 25 Entrenching built-environment business principles and processes for
effective infrastructure delivery that is aligned and contributes to optimal
utilisation of government immovable assets.
Objective statement The promotion of effective and efficient delivery of infrastructure and
management of immovable assets, including PPP projects through
institutionalising best practice, systems, tools and building capacity.
Baseline A diagnostic report was compiled on “Unblocking Infrastructure Delivery”
for the departments of Health and Education as well as the branch: Public
Works.
Justification Address the capacity, business processes, etc. challenges in departments and
selected municipalities that hampers the optimal investment in
infrastructure delivery and the management of immovable assets.
Links Links to the Provincial Treasury’s Strategic Goal 7: increasing the level of
infrastructure delivery to achieve a level 3+ financial capability rating
(departments of Education, Health, Transport and Public Works and
selected municipalities) and the sound management of PPP projects.
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Strategic Objective 26 Cash Flow management improvement of provincial departments to achieve
a level 3+ financial management capability.
Objective statement Ensure that provincial departments’ expenditure is aligned to available cash
and bank reconciliations are done regularly.
Baseline A substantial variance exists between projected expenditure (Section 40(4)
(a)) that forms the basis for transfers from National and actual expenditure.
Departments tend to exceed their available cash (daily, weekly and monthly)
due to the fact that there is limited alignment between available cash and
expenditure. Pre-payments are made before they are due and bank
reconciliations are not regularly done on a daily basis to detect possible
irregularities and / or fraud.
Justification This objective will enforce more effective management of cash, controls that
exist can be executed and all monies due to the provincial government are
accounted for and promptly banked.
Links Links to the Provincial Treasury’s Strategic Goal 8: monitoring and
evaluating cash flow and investment management so that it is sustainable
and credible and will enhance service delivery and improve liquidity in
departments and municipalities.
Strategic Objective 27 Monitoring and evaluation of cash flow and investment management that is
sustainable and credible to enhance service delivery and improve liquidity
in municipalities.
Objective statement Ensure sustainable, credible and effective cash flow and investment
management in municipalities.
Baseline Financial management performance in municipalities in relation to
unauthorised and wasteful expenditures, capacity, inadequate financial
reporting, mismanagement and political instability as reported by the
Auditor-General, requires stricter monitoring and evaluation to ensure good
corporate governance.
Justification By ensuring more effective and efficient cash flow and investment
management in municipalities, will improve service delivery and maintain
liquidity.
Links Links to the Provincial Treasury’s Strategic Goal 8: monitoring and
evaluating cash flow and investment management so that it is sustainable
and credible and will enhance service delivery and improve liquidity in
departments and municipalities.
PART B: STRATEGIC OBJECTIVES
33
Strategic Objective 28 Financial system management improvement to achieve a level 3+ financial
management capability.
Objective statement Skilled and capacitated system users trained in various functionalities on the
systems and effective information system controls are implemented and
maintained.
Baseline Currently information system controls (as highlighted by the 2008/09
Auditor-General reports), although implemented, are not maintained which
severely diminishes the reliability of other internal controls. No
departmental policies exist to guide and direct access to the systems. System
users are given access to the system without being given formal training at
least in accordance with their profile.
Justification Enforce the effective and efficient management of information system
controls to ensure integrity of data as well as appropriate and timeous
management information.
Links Links to the Provincial Treasury’s Strategic Goal 9: management, utilisation
and implementation of financial systems to achieve a level 3+ financial
capability rating within provincial departments and selected entities.
9.4 Resource considerations
Audited Audited Audited
2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13
Programme Support 898 961 840 1 332 2 350 2 521 2 694
Asset Management 7 582 7 542 8 622 11 536 14 609 15 648 16 702
Moveable Asset Management:
Provincial Government
4 923 4 746 5 223 7 090 8 379 8 973 9 573
Moveable Asset Management:
Local Government
1 1 1
Immoveable Asset Management 2 659 2 796 3 399 4 446 6 229 6 674 7 128
Liabilities Management 1 048 1 465 1 652 2 389 2 327 2 595 2 774
Supporting and Interlinked Financial
Systems
42 009 11 739 11 234 11 868 13 839 14 811 15 785
#REF! #REF! #REF! #REF! #REF! #REF! #REF!
51 537 21 707 22 348 27 125 33 125 35 575 37 955
1.
Sub-programme
R'000
Outcome
2.
Revised
estimate
Medium-term estimate
3.
4.
Total payments and estimates
The reduction in the appropriation over time in comparison to 2006/07 is in respect of
Supporting and Interlinked Financial Systems. This was due to the decentralisation of State
Information Technology Agency costs for transversal financial systems to provincial
departments. This applies mainly to the decrease in goods and service under the Programme.
In general the increases in the Programme over the MTEF make provision for the
strengthening of Provincial Treasury’s MFMA responsibilities and the institution of
transversal financial system access control within the Province. The increase in respect of
goods and services over the MTEF provides for bridging funding for the continuation of the
Infrastructure Delivery Improvement Programme (IDIP), the development and
STRATEGIC PLAN 2010/11 – 2014/15
34
implementation of a business intelligence tool that runs on top of the financial systems and
enhancements to the Provincial electronic purchasing system (EPSI) and its supplier database.
The Programme also caters for the anticipated rollout by National Treasury of the first two
modules (asset and procurement management) of the Integrated Financial Management
Solutions (IFMS). This will have an impact on the ageing provincial computer network, but
provision has been made under DoTP for upgrade of the network over the MTEF.
Management considerations
Nominal provision has been made for the envisaged upgrading of the sub-directorate
Movable Asset Management: Local Government to a directorate as part of the reconfiguration
of the Provincial Treasury.
Management is considering the option to relocate Immovable Asset Management and
Liabilities Management to Programme 2: Public Finance.
9.5 Risk management
Sub programme 3.1: Programme Support
Due to the low impact and likelihood of identified risks to manifest itself over the next five
years, no further discussion of this will take place.
Sub programme 3.2: Asset Management
Element: Movable Asset Management
Risk:
Lack of appropriate systems within the Province to adequately manage moveable assets.
Mitigation:
There are currently no proper national or provincial systems with regard to movable asset
management and to date only accounting standards and guidelines have been issued. In
addition, the National Treasury intends rolling out an asset management module over the
next couple of years to all national and provincial departments, with tests already underway
in selected departments across the country. Negotiations are underway with the National
Treasury to do the same in the Province within the current MTEF. Furthermore, the
Provincial Treasury will support and assist all departments to attain the best achievable
results over the next five years.
Element: Immovable Asset Management
Risk:
Inadequate implementation of the nationally driven Infrastructure Development and
Implementation Plans (IDIP) by departments and municipalities together with associated
skills gaps
PART B: STRATEGIC OBJECTIVES
35
Mitigation:
Extension of the IDIP programme beyond the current contract, using the Provincial
Treasury’s own resources until the revised national initiative kicks in. Furthermore, in liaison
with the DoTP (Organisational Development) to institutionalise the IDIP programme in the
affected department (Education, Health, Transport and Public Works) by designing the
appropriate systems processes and structures.
Sub programme 3.3: Liabilities Management
Risk:
Periodic liquidity shortfalls within the Provincial Revenue Fund due to a combination of
more evenly spread departmental expenditure during the year and a reduced frequency in
cash transfers from the national fiscus.
Mitigation:
Revised management of the Provincial Revenue Fund (including the Asset Management
Reserve) together with a modified accounting and projection framework that ties into
medium-term fiscal modelling and the provision of a working capital reserve over the new
MTEFF.
Sub programme 3.4: Support and Interlinked Financial Systems
Risk:
Uncertainty whether the National Treasury will be able to provide the asset management
module and procurement module as part of the IFMS on 1 April 2010 and 1 July 2010
respectively, for implementation within the Provincial Government of the Western Cape.
Mitigation:
The National Treasury has been formally approached for permission to be included as a pilot
province for the implementation of the two modules. Indications are that this province will
be awarded the opportunity to be a pilot province, but this must still be confirmed by the
IFMS Steering Committee.
STRATEGIC PLAN 2010/11 – 2014/15
36
10. Programme 4: Financial Governance
Programme Sub-programme
• Financial Governance 4.1. Programme Support
4.2. Accounting Services
4.3. Norms and Standards
4.4. Provincial Internal Audit
10.1 Programme Purpose
Development of accounting and financial management practices within provincial and local
government that will contribute towards attaining level 3 and higher auditable organisations.
10.2 Programme structure
This programme together with Programme 3 constitutes the branch: Governance and Asset
Management. It currently consists of a chief director as the head of the programme and is
further divided into the following sub-programmes:
Sub-programme 4.1: Programme support
This sub-programme houses the chief director responsible for the programme and also
provides resources for structured training and development of staff in the programme.
Sub-programme 4.2: Accounting Services
Element: Local Government Accounting
Purpose: improve the standards of accounting and financial reporting within municipalities
and allied entities to a level 3+ financial capability rating.
The unit is busy with the roll-out of the latest GRAP standards (and its further evolvement)
within the municipalities of the Western Cape. The 2009/10 municipal financial year requires
all municipalities to complete their financial statements in terms of the full GRAP
requirements. The unit has and will busy itself with training interventions, explanatory
advice and facilitations (National Treasury, Accounting Standards Board and the Auditor
General) in the event of disputes regarding the interpretation of accounting standards.
Element: Provincial Government Accounting
Purpose: improve the standards of accounting and financial reporting within departments
and entities to a level 3+ financial capability rating.
The key objective of this unit over the next few years is to ensure full and timeous capturing
of financial transactions and associated financial improvements to prevent irregularities and
material financial misstatements allowing for modified cash-based standards within
departments and the accrual standards within entities.
PART B: STRATEGIC OBJECTIVES
37
Sub-programme: Corporate Governance
Purpose: enable departments and municipalities to achieve a general level 3+ financial
management capability over the next 5 years.
The sub-programme’s main objectives are the development, implementation and enforcement
of a generic set of corporate governance norms and standards for departments, municipalities
and entities that are responsive to and compliant with the relevant financial legislative
framework. In addition, the adaptation of a generic set of governance norms and standards
to meet the particular requirements of individual departments is also envisaged.
10.3 Strategic objectives
Strategic Objective 29
Build competencies and enhance and maintain the delivery of the
programme.
Objective statement Ensure effective, targeted and efficient operation of the programme.
Baseline
Support services provided to the programme are satisfactory, but the
effectiveness and efficiency of the programme can be improved.
Justification
Ensure that there is a clear operational plan, inclusive of human capital and
other support services for the programme to better meet its business
objectives.
Links
Contributing to the Provincial Treasury’s Strategic Goal 1: assisting the
member of the Executive Council and the HoD with the delivery of the
assigned functions to them.
Strategic Objective 30 Improving the financial accounting and reporting of municipalities and
municipal entities to a financial maturity capability of level 3 by 2015.
Objective statement Ensure the development, implementation and monitoring of accounting
practises within municipalities and municipal entities that will promote
effective and efficient capturing of Revenue, Expenditure, Assets and
Liability movements/accountability and to achieve level 3 in terms of the
Financial Maturity Capability model.
Baseline Municipalities are currently performing at a level 2 on the Financial
Maturity Capability model.
Justification Will improve municipal accounting and financial reporting to a value
driven, efficient, effective and responsive local government.
Links Links to the Provincial Treasury’s Strategic Goal 10: ensuring the
development of accounting practices within provincial and local
government that will promote effective and efficient capturing of REAL
movements/accountability and contribute towards attaining level 3 and
higher auditable organisations.
STRATEGIC PLAN 2010/11 – 2014/15
38
Strategic Objective 31 Raising the standard of accounting and financial reporting of departments
and entities to a financial maturity capability of level 3+.
Objective statement Ensure the development, implementation and monitoring of accounting
practises within provincial departments and entities that will promote
effective and efficient capturing of Revenue, Expenditure, Asset and
Liability (REAL) movements/accountability and to achieve level 3+ in terms
of the Financial Maturity Capability model.
Baseline Departments and entities are performing at a level 2+ in terms of the
Financial Maturity Capability assessments for 2009.
Justification Will improve accounting and financial reporting of departments and
entities to a value driven, efficient, effective and responsive provincial
government.
Links Links to the Provincial Treasury’s Strategic Goal 10: ensuring the
development of accounting practices within provincial and local
government that will promote effective and efficient capturing of REAL
movements/accountability and contribute towards attaining level 3 and
higher auditable organisations.
Strategic Objective 32 Assess, develop, monitor financial norms and standards and, where
necessary, enforce compliance by departments, municipalities and entities
towards attaining a level 3+ in terms of the Financial Maturity Capability
(FMC) model.
Objective statement Assess, develop, implement and monitor compliance with corporate
governance norms and standards within departments, Provincial
Parliament, municipalities and entities.
Baseline Financial Maturity Capability model assessment in March 2009 measured
most departments to be at a 2+ auditable rating.
Justification In terms of S18 of the PFMA and S5 MFMA, Provincial Treasury must set
the norms and standards for financial management, and may assist with the
implementation thereof and thereby improve efficient and economic
utilisation of resources.
Links Links to the Provincial Treasury’s Strategic Goal 11: enabling departments
and municipalities to achieve a level 3+ financial management capability
over the next 5 years.
Sub-Programme 4.4: Provincial Internal Audit
The Modernisation Programme, which is in an advanced stage, proposes the shift of the
Human Resources (excluding the Departments of Health and Education), Internal Audit and
Enterprise Risk Management functions to a shared Corporate Services within the Department
of the Premier from 1 April 2010. Therefore the strategic objectives and performance
indicators relating to these functions are only reflected in the Strategic and Annual
Performance Plans of the Department of the Premier. The financial implications of the
function shift will be finalised during the 2010/11 Adjusted Estimates process once all of the
HR and other related issues have been finalised.
PART B: STRATEGIC OBJECTIVES
39
10.4 Resource considerations
Audited Audited Audited
2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13
Programme Support 1 169 1 037 1 581 1 746 2 309 2 180 2 303
Accounting Services 3 735 3 806 5 272 7 688 8 717 9 337 9 959
Provincial Government
Accounting
4 729 4 856 5 203 5 551
Local Government
Accounting
2 959 3 861 4 134 4 408
Norms and Standards 3 118 3 551 3 426 4 657 7 379 7 914 8 457
Risk Management 2 926 2 091 2 276 2 813
Provincial Internal Audit 21 395 27 945 24 560 19 860 22 287 23 901 25 517
Sub-programme Support 5 021 4 319 4 602 4 898
G&A Cluster 5 248 5 823 6 254 6 682
Economic Cluster 5 940 7 491 8 045 8 594
Social Cluster 3 651 4 654 5 000 5 343
32 343 38 430 37 115 36 764 40 692 43 332 46 236
Revised
estimate
Medium-term estimate
1.
Sub-programme
R'000
Outcome
2.
3.
4.
5.
Total payments and estimates
The change in allocations over the MTEF period has been mainly for the expansion of the
internal audit function. Similarly, changes in the economic classification from goods and
services to compensation of employees in the 2009/10 financial year and thereafter are the
result of the phasing out of the previously co-sourced internal audit function and the
subsequent internal build-up of internal audit. The contract with the external consortium
came to an end in December of 2008.
Further changes are to be expected over the MTEF with the intended relocation back to the
Department of the Premier in the 2010/11 financial year, with commensurate budget shifts
occurring in the adjusted estimates of 2010/11, and the forthcoming main estimates.
Treasury’s Phase 3 of the reconfiguration in respect of Local Government Accounting
Services will require additional capacity to meet the Treasury’s obligations under the national
Clean Audit 2014 drive, which will be dealt with later.
10.5 Risk management
4.1 Programme Support
Due to the low impact and likelihood of identified risks to manifest itself over the next five
years, no further discussion of this will take place.
STRATEGIC PLAN 2010/11 – 2014/15
40
4.2.1 Local Govt. Accounting
Risk:
Non-achievement of unqualified financial statements by municipalities that were all tabled by
the due date.
Lack of technical skills and capacity to implement accounting reforms (GRAP Standards)
across the Province.
Mitigation:
Development of standard operating procedures for municipalities associated good practice
guidelines and assistance with the preparation of comprehensive audit files, well in advance
of the year-end. Furthermore, to obtain clarification of the practical implication of current and
new accounting standards and to timeously convey these to all municipalities.
Identify skills gaps in the accounting unit internally and externally to determine training
needs. Develop focused training (internally and externally) to improve competency levels.
Continuously arrange workshop sessions on the implementation/updates on the accounting
reforms (GRAP Standards).
Element: Provincial Government Accounting
Risk:
Qualified financial statements within the Province with or without more adverse findings.
Alternatively, unqualified financial statements with material misstatements.
Lack of technical skills and capacity to implement accounting reforms (GRAP Standards)
across the Province.
Mitigation:
Development of standard operating procedures for departments and entities together with
associated good practice guidelines and assistance with the preparation of comprehensive
audit files, well in advance of the year-end. Furthermore, to obtain clarification of the
practical implication of current and new accounting standards and to timeously convey these
to all departments and entities.
In addition, the intensified roll-out of midyear financial statements within departments and
entities together with appropriate testing, assessment, remedial steps and feedback to
departments and other entities to improve the quality of financial reporting.
Identify skills gaps in the accounting unit internally and externally to determine training
needs. Develop focused training (internally and externally) to improve competency levels.
Continuously arrange workshop sessions on the implementation/updates on the accounting
reforms (GRAP Standards).
PART B: STRATEGIC OBJECTIVES
41
Sub programme 4.3: Corporate Governance
Risk:
Dysfunctional CFO offices within departments, municipalities and entities.
Mitigation:
Repositioning of the unit to better assess the functioning of the different CFO offices, to
identify gaps and appropriate remedial steps at the first sign of any dysfunctionality. In
addition, to draft standard operating procedures to cover five main areas (management
accounting, financial accounting, supply chain management, asset management and internal
control) and to ensure that implementation is enforced with or without the required training
interventions. Furthermore, to ensure completeness and appropriateness of the financial legal
framework which departments, municipalities and entities have to work with.
PART C: LINKS TO OTHER PLANS
42
PART C: LINKS TO OTHER PLANS
11. Links to the long-term infrastructure and other capital plans
This section is not applicable to this Provincial Treasury, as its functional
responsibilities do not relate to capital investment.
12. Conditional grants
Not applicable.
13. Public entities
Name of public entity
Current annual budget
(R thousand)
Date of next evaluation
Western Cape Gambling and Racing Board R39,338 1 September 2010
Mandate:
The main purpose of the Western Cape Gambling and Racing Board (“WCGRB”) is to control
and regulate gambling and racing within the Province of the Western Cape, that will:
• provide a stable, just, consistent and effective regulatory environment;
• inspire public confidence and trust, in an environment free from corruption and
unlawful gambling and racing activities; and
• contribute to the economy of the Western Cape in a socially responsible manner.
Outputs:
To ensure business continuity and continued effective functioning of the WCGRB.
To ensure an efficient and effective regulatory authority that will provide a just and
coherent regulatory environment.
To formulate, develop, implement and maintain effective gambling and racing legislation
and policy.
To ensure that all gambling and racing activities in the Province are effectively regulated.
To maximise the benefit of regulated gambling and racing whilst minimizing the negative
impact.
To keep abreast of new developments impacting the gambling and racing industries.
To ensure good corporate governance of the organisation and compliance with applicable
legislation.
To ensure best practice in respect of financial and information systems.
To strive for financial self-sufficiency.
The Western Cape Gambling and Racing Board’s own revenue has since 2004/05 increased to
such a level that it has become self sufficient with the introduction of limited gambling
machines that have become fully operative since the start of the 2005/06 financial year.
PART B: STRATEGIC OBJECTIVES
43
14. Public-private partnerships
The Provincial Treasury is not yet functionally responsible for any PPP, but provides an
advisory and monitoring service. However, with capacity building within Provincial
Treasury, it is envisaged to take over all PPP related responsibilities from National Treasury
at some future date.
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