NATIONAL TREASURY

1
NATIONAL TREASURY

• Presentation to PCOF
• of Annual Report 2003/04
• 7 October 2004

2
Outline

• Highlights of achievements in 2003/04
• Audited financial statements
• Measurable objectives output targets by
  programme
• National Treasury Human Resource Planning

3
HIGHLIGHTS OF ACHIEVEMENTS IN 2003/04
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Key Macro Highlights (1)

• 2003 was entered with considerable grounds for
  optimism that the foundation for growth and
  development was now firmly in place
• Economy recovered from the currency volatility of
  2001
• Growing consumer and investor confidence
• Low interest rate environment
• Low inflation
• Currency stability
• Strong investment performance and healthy capital
  inflows
• Government debt fell to 38.5 of GDP by end of
  the 2003/04 finacial year
• Debt-servicing costs decline to 3.9 of the GDP

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Key Macro Highlights (2)

• Lower interest rates have improved growth
  prospects
• Fiscal policy remained expansionary, within the
  sustainable framework provided by sound
  management of state finances
• Strong growth in social spending and
  infrastructure investment
• Increased capital expenditure by non-financial
  public entities
• Sovereign ratings continue to improve

6
Key Budget Highlights (1)

• Key Ongoing Budget and fiscal reforms alignment
  of policy priorities departmental plans with
  avaiable resources
• The 2003 Budget intoruced measurable objective
• Departments now table three year strategic plans
• Service delivery progress is now reported on in
  departmental annual reports, completing the
  accountability cycle

7
Key Budget Highlights (2)

• New economic format and standard chart of
  accounts finalised March 2004
• Improved financial reporting formats
• IGFR published April 2003
• MFMA enacted February 2004

8
Key Budget Highlights (3)

• Extension of amnesty for undeclared foreign
  assets
• Publication of the Mineral and Petroleum Royalty
  Bill
• Supply Chain Management Framework promulgated Dec
  2003

9
Key International Highlights

• SAs International economic relations continues
  to strengthen
• Africaa economic intergration through NEPAD
  remain a key focus
• Provide technical support for the creation of the
  African Peer Review Mechanism
• Hosted conference of African Finance Ministers ,
  March 2004

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AUDITED FINANCIAL STATEMENTS
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Annual financial statements 2003/04

• Submitted annual financial statements for 2003/04
  to the Auditor-General and Treasury on 31 May
  2004
• Fully complied with predetermined format
• Unqualified Audit report issued on 23 July 2004

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Annual financial statements 2003/04 (continued)

• Annual appropriation R12,593 billion (total
  saving of R499,2 million surrendered to NRF)
• Departmental revenue R2,131 billion
• Local and foreign aid received in cash R7,1
  million
• Operational budget R714,3 million (Saving R187,6
  million R43 million on personnel and R114,3 on
  professional and special services)
• R419,3 million rolled over from 2002/03

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Audit Report

• Unqualified audit report
• Emphasis of matter relates to control over
  medical expenditure
• No other significant/material findings

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MEASURABLE OBJECTIVES AND OUTPUTS PER PROGRAM
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Prog 1 Administration

• Purpose To provide political and managerial
  leadership, strategic management and
  administrative support to the National Treasury.
• Sub Programmes Ministry Deputy Minister
  Management and Corporate Services.
• Corporate Services comprises
• Financial Management including Procurement
• Legal Services
• Human Resources Management
• Information Technology
• Communication and
• Facilities and Security Management
• All targets were met except for implementation of
  procurement reform which is in progress

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Prog 2 Economic Planning and Budget Management

• 4 sub-prog Budget Off, Public Fin, IG Relations,
  EPIFR
• BO met or exceeded 9 of 10 targets
• PPP sub-prog met 7 of 10 deals
• PF met 3 targets, 1 partially met
• IG met all 6 performance targets
• EPIFR met its targets
• Scope was expanded by about 20
• A number of unanticipated activities had to be
  dealt with within the year

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Prog 3 Asset Liability Management

• Manage governments financial assets
  liabilities
• 5 sub progs management liability mgt fin ops
  strategy risk mgt asset mgt.
• Most objectives met in prog.
• Objectives not met include
• Transnet end state
• Eskom and Transnet housing book
• Armscor disposal of non core assets

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Prog 4 Specialist Functions

• Manage supply chain process maintain
  standardised fin systems
• 3 sub progs supply chain mgt PFMA impl
  Financial Systems
• All objectives met, one only partially
• Sourcing strategy for 20 of term contacts
  partially met

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Prog 5 Office of the Accountant General

• Manage accounting policies and practices in
  public sector
• 4 sub programmes national accounts fin mgt
  improv service charges audit
• 5 of 7 objectives met
• Other 4 met after end of fin year incl
• Formats for annual statements
• Compliance with internal audit framework

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Prog 6Provincial and LG transfers

• Covers 3 conditional grants administered directly
  by NT
• Does not cover Equitable Share transfers to
  provinces (Prog 2), or ES to LG (dplg)
• 2 sub-programmes covering 3 grants
• Provincial Infrastructure Grant, LG Fin Mgt
  Grant, Restructuring Grant
• Refer to Annex 1A and 1B in notes on fin
  statements for grant per province and
  municipality
• All three performance targets met
• Performance related to framework, transfers, not
  spending
• R45 mil not transferred to Mangaung, due to
  non-compliance on Restructuring Grant

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Prog 7 Civil Military Pensions

• Provide pension and medical benefits to former
  employees of gov depts
• 2 sub progs civil pensions and medical schemes
  military pensions
• All 5 objectives met
• Audit reports raised issues of controls
  discussion due in Audit Committee

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Prog 8 Fiscal Tranfers

• Fiscal Transfers
• Foreign transfer payments
• CMA HIPC (IMF) ADB Commonwealth fund for tech
  assistance
• Provides funds to other public authorities and
  institutions
• SARS,DBSA,NIA,FIC,FFC

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BUDGET vs ACTUAL
Programme Budget R000 Actual R000 Saving R000
Prog 1 111890 90408 21482
Prog 2 125263 106436 18827
Prog 3 69831 51867 17964
Prog 4 343950 234313 109637
Prog 5 63323 44717 18606
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NATIONAL TREASURYS HUMAN RESOURCES PLANNING
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National Treasury Organisation

• Appointment of DG Feb 2004
• Finalisation of new structure and absorption of
  staff ( Res. No 7)
• Implementation of new performance management and
  personnel development systems
• Education, Training and Development Strategy
  implemented

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National Treasury Organisation

• Launched successful internship programme
• To address the vacancy gap, created by Resolution
  7, appointments were made additional to the
  establishment
• Financial management focus on PFMA resulted in an
  Unqualified audit
• Audit Risk Committees are functioning in
  accordance with their terms of reference

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National Treasury Organisation

• Personnel Information
• Total posts 859
• Filled posts 488
• Vacancy rate 43

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EMPLOYMENT AND VACANCIES Employment and
vacancies by programme, 31 March 2004
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Filled Positions
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Position per Salary Band
31
Staff Turnover
32
Employee Profile
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Staff Development
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Internship Programme Profile 2003/2004
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Conclusion

• National Treasury measurable objectives largely
  been met
• Currently engaged in development of new strategic
  plan

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Thank you