- mohammed jahed, south africa
TRANSCRIPT
Presentation to the 8th Annual OECD PBO-IFI
Meeting Paris, France
11-12 April 2016
Professor M Jahed Director: Parliamentary Budget Office Republic
of South Africa
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Outline
1. Background Information
2. Comparison to OECD Principles
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1. Background Information • Establishment of the PBO RSA
– June 2013. Appointment of the Director.
• 2 & half years in operation
• Legislative Mandate
– Money Bills Amendment Procedure and Related Matters Act, no 109 of 2009, Money Bills Act
• The Act gives effect to sections 42(3) and 77 of the Constitution
– PBO RSA established by section 15 of the Money Bills Act to provide independent, objective and professional advice and analysis to Parliament on matters related to the budget and other money Bills
• Primary Clients
– 4 Parliamentary Committees: 2 x Finance Committees & 2 x Appropriations Committees, both Houses of Parliament.
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Background Information (cnt) • Leadership
– Director: Professor Mohamed Jahed
– PBO Top Management Structure
• Director
• Deputy Directors x 3
• Office Manager x 1
• Resources
– Staff Complement: 11
• Director
• 6 x Specialists
• 3 x Corporate Services staff: Office Manager, PA to the Director, Office Coordinator
• 1 x Intern
– Budget
• Annual operating budget (personnel & OPEX) of about $1 million Dollars, about R14 million at an assumed exchange rate of $/R14 against the US Dollar.
– Information & ICT requirements
• Information is readily available & freely available from government departments.
• Subscription to commercial data suites like EViews, Stata for data-analytics
• Sufficient tools of Trade
– Office Space
• Sufficient office space. PBO Offices physically located outside the main Parliamentary precinct.
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1.1 Organisational Structure
Director:
Prof. MIGM Jahed
Deputy Director Fiscal Policy
Ms N Orlandi
Policy Analyst
Dr M Sekatane
Policy Analyst
Vacant
Deputy Director Public Finance:
Dr D Jantjies
Intern
Ms A Stiglingh
Finance Analyst
Mr B Ellse
Finance Analyst
Vacant, process of being filled
Deputy Director:
Economics
Vacant
Economic Analyst
Dr S Muller
Economic Analyst
Mr R Amra
Office Manager
Mr A Monnakgotla
Office Coordinator
Mr A van Zuydam-Reynolds
Executive Assistant:
Ms L Mangwani
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1.2 Timeline of Staff Appointments
Director PBO
4 June 2013
Office Manager
& Executive Assistant October
2013
2 x Policy Analysts
January 2014
1 x Economic
Analyst
February 2014
2 x Finance Analyst and
1 x Economic
Analyst
June & July 2014
Office Coordina
tor
1 October
2014
Deputy Directors: Policy & Public
Finance
1 August 2015
Intern
1 September 2015
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1.3 Functional Areas
Director PBO Strategic Leadership: Technical & Administrative
Fiscal Policy
Analysis Finance
Economic Analysis
Corporate Services
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1.4 PBO RSA Functions defined Economics Analysis Public Finance Fiscal Policy Analysis
Macroeconomic evaluation
Economic projections
Tax review and analysis
Fiscal Framework review and
analysis
Provide advice of proposed
amendments to the Fiscal
Framework
Fiscal projections
Revenue studies
Microeconomic evaluations
Spending trends review and
analysis
Spending projections
Baseline studies
Provide advice and analysis on
proposed amendments to the
Division of Revenue Bill (DOR)
and the Appropriation Bill
DOR Bill review and analysis
Appropriation Bill review and
analysis
Monitor legislative proposals
with financial implications -
Bill costing
Monitor reports adopted by
the Houses with financial
implications
Monitor committee reports
adopted by a House with
financial implications
Policy analysis
Policy implementation analysis
Outcomes analysis vs spending
trends
Monitor policy proposals with
financial implications
Monitor policy debates and
development in key
expenditure and revenue
areas
Policy Evaluation
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1.5 Outputs produced BUDGET ANALYSIS REPORTS
NATIONAL DEVELOPMENT PLAN ANALYTICAL REPORTS
Quarterly Economic Briefs (QEB)
Other Analytical Reports
Two Main Reports • Medium term Budget
Policy Statement (MTBPS) • Main Budget Analysis ======================= 1. Analysis of the 2015 Medium term Budget Policy Statement (MTBPS) a. Pre and Post Analysis 2. 2016 MAIN Budget a. Pre and post analysis of the 2016 Main Budget 3. BUDGET REVIEW RECOMMENDATION REPORTS (BRRR) a. BRRR: Landbank b. BRRR: South African Revenue Services (SARS) c. BRRR: Accounting Standard Board-ASB1
(a) The National Development Plan Outcome1: Quality Basic Education Alignment and Progress
(b) (b) The National Development Plan Outcome 2: A Long and Healthy Life for All South Africans: Alignment and Progress
(c) The National Development Plan Outcome 5: NDP Alignment and Progress - A skilled and capable workforce
(d) The National Development Plan Outcome 6: An efficient, competitive and responsive economic infrastructure network
(e) The National Development Plan Outcome 7: NDP alignment and progress Rural Development
(f) The National Development Plan Outcome 8: Human Settlements Alignment and Progress
(g) The National Development Plan Outcome 10: Protect and Enhance Our Environmental Assets and Natural Resources
1st Quarter QEB: April-June 2nd Quarter QEB: July-September 3rd Quarter QEB: October-December 4th Quarter QEB
1. ESKOM Appropriations Bill 2. Briefing Note on withdrawal
of UIF reduction (2015/16) 3. Input on Rates and Monetary
Amounts Amendment Bill (2015/16)
4. Parliament and the Engendered Budget
5. Analysis of State Owned Enterprises
5. Base Erosion, Profit Shifting and Transfer Mispricing (BEPS)
6. Report on the Sustainability of South Africa’s Social Grants System
8. The involvement of Public Accounts Committees (PAC’s) in the budget process
9. Department of Police Budget Analysis
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1.6 Primary Clients
Standing Committee on Appropriations:
National Assembly (NA)
Select Committee on Appropriations: National Council of Provinces (NCOP)
Standing Committee on Finance: National Assembly (NA)
Select Committee on Finance: National Council of Provinces (NCOP)
PBO RSA Primary Clients as per Money
Bills Act
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1.7 Strategic Focus Areas: Next 5 years
• During the next five years, the Parliamentary Budget Office will provide:
1. Reports on the national Budget and Medium Term Budget Policy Statement
2. Economic, policy and fiscal briefs
3. Research reports on request by Parliament
4. Forecast robustness reports
5. Technical capacitation of MP’s 1. Formal: Partnership with academic institutions to develop a formal programme
for MP’s on fiscal and monetary matters, focus on oversight
2. In-house capacitation of MP’s through the production of informative products, presentation during Committee seatings.
3. Dedicated technical support to Parliamentary Committees during the oversight visits of Committees.
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2. Comparison to OECD Principles
1. LOCAL OWNERSHIP A. Broad national ownership
• Political support within Parliament
– Strong political support from all political parties within Parliament
– Political parties across the political spectrum see the benefits and importance of a having a PBO
– Regular positive feedback received from MP’s
• Political support from the Executive
– Strong political support and buy-in from the Executive arm of the State.
– cordial relations with all arms of the State & other organs of government
– broad national ownership, commitment and consensus exists from all the three Arms of the State.
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INDEPENDENCE AND NON-PARTISANSHIP (cnt)
• Legislated independence
– The independence of the PBO RSA is legislated in Section 15(1) of the Money Bills Act. Section 15(1) codifies that the main objective of the PBO is to provide independent, objective and professional advice and analysis to Parliament on matters related to the Budget and other money Bills.
• Legislated authority to report against inappropriate interference in the affairs of the PBO RSA – In terms of section 15(9) of the Act, the Director is obliged to report to Parliament any
inappropriate political or executive interference to prevent the office from providing independent, objective and professional advice to Parliament on matters related to the Budget and other money Bills
• Non-partisan technical support provided to Parliamentary Committees – The PBO RSA provides independent, objective, professional advice and analysis and
non-partisan support to Parliament.
– The multiparty Parliamentary Committee system as well as the work method the office has developed insulates the office from potential partisanship 13
INDEPENDENCE AND NON-PARTISANSHIP (cnt)
• PBO RSA Workflow & Work-method
• Consideration of
money Bills
• Multi-party Committee identify specific analysis and research required for decision making
NA and NCOP Finance and Appropriations
Committees
• Submit formal written request to the Director of the PBO RSA
Committee Chairpersons
• Director PBO considers specific requests from Committees
• Formal written acknowledgement letter transmitted by Director to Committee Chair
Director PBO
Parliamentary Budget Office
• Formulate Terms of Reference
• Research & Analyse
• Submit findings to Committee (electronically &/or presentations)
• Build capacity
• Facilitate discussions
Parliamentary Budget Office
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2.2 Professional profile of PBO RSA leadership: Director PBO
• Section 15(5) of the Money Bills Act the Director of the PBO RSA must possess the requisite experience, qualifications and leadership skills to manage the Parliamentary Budget Office and to ensure that the office performs the legislated functions set forth in section 15(2) and (3) of the Act.
• The PBO is headed by a Director, Professor MIGM Jahed who is responsible for the strategic leadership and overall management of the Parliamentary Budget Office RSA. Professor Jahed was appointed as the founding Director of the PBO during the 4th Parliament in June 2013. The Director PBO (Prof Jahed) leads and manages and is assisted by a team of experienced technical specialists in the Economics, Policy and Public Finance Divisions of the PBO.
• Professor Jahed holds a PhD in Economics and has obtained experience and expertise in economic development, economic policy formulation and public and development management.
• Professor Jahed, was initially seconded to Parliament by the Development Bank of Southern Africa to assist with the establishment of the Parliamentary Budget Office. 15
2.3 Term of Office of the Director PBO RSA • The position of the Director RSA is a full time five (5) year performance based position.
• The Director is appointed in accordance with Section 15 (5) of the Money Bills Act which reads as follows: – The Finance and Appropriations Committees, from both Houses, must recommend to the respective Houses, a
person with the requisite experience, qualifications and leadership skills for the position of Director. The recommendation must include the condition of service, as well as the salary and allowance of the Director, which must take into account the knowledge and experience of the person and substantially be the same as those of the top rank of the public service.
• Linkage of position of Director to electoral cycle: No, the position of the current Director is not linked to the electoral cycle because the current electoral cycle spans from 2014 to 2019, while the Director was appointed almost a year before the current electoral cycle.
• Term limits and the number of terms that the Director of the PBO RSA may serve is not specified in legislation i.e. Money Bills Act. – The general rule of thumb that is that all highest ranking public officials in South Africa except for few cases are
appointed for a five (5) years performance-based period which can be extended subject to satisfactory performance.
• Process of dismissal of the Director PBO is codified in Section 15(8) of the Money Bills Act prescribes the following. Full process is captured under the Notes section
• The Director may be removed from office only on- – the ground of misconduct, incapacity or incompetence
– a finding to that effect by a joint sitting of the committees on finance and appropriations of each House; and
– the adoption by both Houses of a resolution calling for that person’s removal.
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2.4 Full Freedom to Hire and Dismiss Staff
• In terms of section 15(12) of the Money Bills Act, the Director PBO RSA has the legislated power to appoint deputy directors and personnel with the requisite experience and qualifications as may be necessary to carry out the duties and functions of the Parliamentary Budget Office.
• Director does not have the full freedom to hire staff due to the current administrative configuration of Parliament. The Director PBO RSA is presently engaging with the relevant administrative authorities in Parliament to address this situation
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2.5 Appointment of PBO RSA staff
• Appointment of all PBO staff members is in line with standard prescripts in the South African public service.
• PBO staff members are appointed according to HR policies and protocols of Parliamentary Services.
• All PBO staff members were selected through open competition based on merit and technical competence and without reference to political affiliation as such is prohibited by the Constitution in South Africa.
• Conditions of employment and service of PBO RSA staff members is on par with that of the Parliamentary Service.
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2.6 Location of the Offices of the PBO RSA
• To further enhance independence, the location of the IFI offices should be physically separate from both the executive and the legislative offices.
– The Offices of the PBO RSA are physically detached from the main Parliamentary precinct. The offices are located directly opposite the main entrance of the Parliamentary precinct.
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3. LEGISLATIVE MANDATE • Legislative mandate
– Money Bills Amendment Procedure and Related Matters Act, 2009 (Act No. 9 of 2009)
– Section 15 of the Act establishes the PBO RSA
• Core functions of the PBO RSA: Section 15(2) of the Act • (a) Review and analyse the documentation tabled in Parliament by the Executive
(Minister of Finance) in terms of the Money Bills Amendment Procedure and Related Matters Act, 2009 (Act no. 9 of 2009)
• (b) Analyse and advise on proposed amendments to the fiscal framework, the Division of Revenue Bill, and money Bills and on policy proposals with budgetary implications
• (c) Monitor and synthesise matters on reports tabled and adopted in a House with budgetary implications, with particular emphasis on reports by other committees
• (d) Keep abreast of policy debates and developments in key expenditure and revenue areas
• (e) Monitor and report on potential unfunded mandates arising out of legislative, policy or budgetary proposals
• (f) Conduct research on request by the Houses, other committees or members of Parliament on matters related to the budget and other money Bills.
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3.1 Who may request reports and analysis?
• Core Clients: Finance and Appropriations Committees, both Houses.
• Any other Parliamentary Committee
• Work method: PBO RSA provides demand driven (work request emanating from Committees) & supply driven work (PBO initiated work) to Parliamentary Committees.
Standing Committee on Appropriations:
National Assembly (NA)
Select Committee on Appropriations:
National Council of Provinces (NCOP)
Standing Committee on Finance:
National Assembly (NA)
Select Committee on Finance:
National Council of Provinces (NCOP)
PBO's Primary Clients as per the Money Bills Act
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4. RESOURCES
• Budget allocation: legislated and codified in section 15(10) of the Money Bills Act.
• PBO budget allocation received from Parliamentary Services
• Publications of the allocated budget: the PBO budget is not published and treated in the same manner as the budgets of other independent bodies, such as audit offices in order to ensure the independence of the office.
• Multiannual funding commitments may further enhance IFIs independence and provide additional protection from political pressure: this is not applicable, no multiannual funding commitments and ring-fenced to the PBO RSA
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5. RELATIONSHIP WITH THE LEGISLATURE
• 5.1 PBO RSA Accountability Lines
• The Director PBO is required in terms of section 15(11) of the Money Bills Act to account to Parliament on the activities of the Parliamentary Budget Office.
• (a) Submission of IFI reports to parliament in time to contribute to relevant legislative debate: Yes, PBO RSA adheres to this principle. The Money Bills Act compels the PBO RSA to adhere to this principle.
• (b) Appearance of IFI leadership or senior staff before the budget committee (or equivalent) to provide responses to parliamentary questions. Yes, PBO RSA adheres to this principle.
• (c) Parliamentary scrutiny of the IFI budget. Yes, Parliamentary scrutiny of the PBO RSA budget is effected by Parliamentary Services.
• (d) A role for parliament’s budget committee (or equivalent) in IFI leadership appointments and dismissals. Yes, legislated provision. The Finance and Appropriations Committees, both Houses, have a legislated role in the appointment and dismissal of the Director of the PBO RSA. The procedures are set forth in sections 15 (5) and 15(8) of the Money Bills Act.
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PBO RSA Accountability Lines: Diagram
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PBO RSA Responsibility Lines (cnt)
• 5.2. The role of the IFI vis-à-vis parliament’s budget committee (or equivalent), other committees, and individual members in terms of requests for analysis should be clearly established in legislation. Preferably, the IFI should consider requests from committees and sub-committees rather than individual members or political parties. This is particularly relevant for those IFIs established under the jurisdiction of the legislature.
• The legislative functions of the PBO RSA and those of the Finance and Appropriations Committees from both Houses are clearly prescribed in the Money Bills Act.
• The PBO RSA considers requests transmitted to the office from Parliamentary Committees but not from individual Members of Parliament. The process was explained at length in the above section, slide 12.
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6. ACCESS TO INFORMATION • Constitutional power of Parliament: In terms of the Constitution of the Republic
of South Africa, the Executive is constitutionally obliged to report and account to Parliament on its activities. Parliament RSA therefore has the constitutional power to obtain access to information from the Executive or any person/institution as prescribed by section 56 of the Constitution.
• No special legislated provision: There is no special provision in the Money Bills Act to explicitly prescribe that the PBO RSA should be granted access to a particular set of information/documents as this is already prescribed for in the Constitution.
• PBO has readily available access to information held by the Executive.
• No formal MOUs: Presently, the PBO RSA does not have any formal memorandums of understanding or protocols with government departments with regards to access to information. Importantly, the information obtained by the PBO from government departments is obtained at no cost. Finally, the PBO RSA does not have any challenges with regards to accessing information from government departments.
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ACCESS TO INFORMATION (cnt)
• 6.2. Any restrictions on access to government information should also be clearly defined in legislation. Appropriate safeguards may be put in place as regards protection of privacy (for example, taxpayer confidentiality) and of sensitive information in the areas of national defence and security.
• There are no restrictions on access to government information requested by the PBO save for universal protocols relating to the treatment of tax information.
• The PBO RSA treats all information under its authority with the necessary confidentially. The analytical reports are prepared for Parliamentary Committees, seatings which are open to the public. However, the PBO RSA has not developed an internal standard operating procedure or confidentially clause with regards to the treatment of confidential information.
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7. TRANSPARENCY • In terms of the Constitution of the Republic of South Africa, all Parliamentary
Committee seatings are open to the public, media and everyone.
• South Africa has an open budget process which allows all interested stakeholders in society to participate in and make inputs to the budget process. By extension, the technical analytical work conducted by the PBO RSA especially the analysis of the Main Budget Analysis and the Medium Term Budget Policy Statement (MTBPS) is open to the public because (1) the PBO RSA is required to present on its findings in an open Parliamentary Committee seating where all members of the public and media are present; (2) All Committee seatings of Parliament are recorded and can be made available to any member of the public; (3) A civil society interest known as the Parliamentary Monitoring Group (PMG), uploads almost all Committee meetings on its website.
• Webpage: The PBO RSA has a dedicated webpage which is used to upload the work of the office for public consumption and scrutiny. – http://www.parliament.gov.za/live/content.php?Category_ID=817
• Media tracking: no media tracking of PBO activities is conducted.
• Internal media coverage within Parliament: Yes.
• Radio & TV Interviews: none. 28
TRANSPARENCY (cnt)
• The transparency is further strengthened by the fact that the PBO circulates its work to ALL Chairpersons of Parliamentary Committees, Executive Leadership of Parliament, Senior Parliamentary Administration personnel and other related parties in Parliament.
• External circulation of PBO products: It must be emphasised though the direct external distribution of PBO RSA work is almost non-existent except for the circulation of work through the PBO RSA webpage a
• Financial affairs of the PBO RSA are scrutinised by the independently by the Finance and Audit Offices from Parliamentary Services
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TRANSPARENCY (cnt) • Publication of the full account of the underlying data and
methodology • In producing its outputs the PBO RSA follows a research based and academic
writing approach. A team leader selects members of the team that conduct research and analysis on the required output. Once research is conducted comprehensive reports are submitted to the respective Committee Chairs and subsequently supplemented with a further presentation from the PBO to the rest of the committee members. In this way the PBO is able to provide information to its clients with the ultimate goal of capacitating Committee members to enable members to make informed decisions on pertinent matters. All the technical reports published by the PBO RSA have a full account of the underlying data and methodology used to substantiate findings made thereinto.
• Opportunity to present PBO work in Parliamentary Committees: The leadership of the PBO, Director PBO RSA and his TEAM, are provided with the opportunity at all material times to present on the work of the PBO during Parliamentary Committee seatings of the Finance and Appropriations Committee including other ad-hoc Committees.
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TRANSPARENCY (cnt) 7.3. The release dates of major reports and analysis should be formally established, especially in order to co-ordinate them with the release of relevant government reports and analysis.
Yes, PBO RSA Complies with this principle. • The PBO RSA prepares pre and post analysis of the Main Budget and the Medium Term Budget
Policy Statement and this is synchronised with the tabling of the main budget by National Treasury in Parliament. The pre-budget analysis provides Parliamentary Committees with a review of revenue collection, expenditure and borrowing in the first 9 months of the financial year. Different scenarios were developed for the estimation of revenue and expenditure outcomes for the 2015/16 financial year. These scenarios formed the basis for further budget estimates for the 2016/17 financial year. These scenarios provided Parliamentary Committees with estimated changes to the fiscal frameworks as presented in the 2015 Medium Term Budget Policy Statement.
• Subsequent to the tabling of the national budget, a comprehensive analysis of the 2016 tabled budget is presented to a joint seating of the four core committees. This analysis includes an evaluation of the fiscal framework including the budget deficit and debt. Further analysis will include a comparison of the estimated 2015 medium term expenditure framework (MTEF) with the estimated 2016 MTEF. The main changes will be assessed to determine the alignment of the allocation to policy priorities.
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TRANSPARENCY (cnt) • 7.4. IFIs should release their reports and analysis, on matters relating to their
core on-going mandate on economic and fiscal issues, in their own name. Including through their own website.
Yes, PBO RSA Complies with this principle.
• The PBO RSA subscribes to this principle as all the reports and analysis produced by the office since establishment have been produced explicitly under the name of the “Parliamentary Budget Office”.
• The PBO RSA has a dedicated webpage but not an independent website which is used to upload the work of the office for public consumption and scrutiny. The PBO RSA webpage is managed by the ICT division which falls under Parliamentary Services. The PBO submits its completed products to the ICT division for uploading. The webpage is incorporated as a sub-tree in the main Parliamentary website.
• There has been no interference with what the PBO RSA can upload to the webpage thus far.
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8. COMMUNICATIONS • Development of effective communication channels from the outset, especially with the media, civil
society, and other stakeholders
• Since establishment, the PBO RSA has established solid relations with a wide range of stakeholders for branding, information assimilation purposes and most significantly to explain to various stakeholders about what a PBO is all about and what the legislative mandate of the office is.
PBO Stakeholders
Parliament
Civil Society Formations &
NGO's
Labour formations
Business Research & Academic Institutions
International
*FORA
*Other PBO's
Government
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9. EXTERNAL EVALUATION
• 9.1. IFIs should develop a mechanism for external evaluation of their work – to be conducted by local or international experts. This may take several forms: review of selected pieces of work; annual evaluation of the quality of analysis; a permanent advisory panel or board; or peer review by an IFI in another country.
• No external evaluation was ever conducted since establishment, office fairly young: The PBO RSA since establishment has not developed a mechanism for external evaluation let alone been subjected to any form of external evaluation of the work of the PBO RSA has produced since establishment in 2013. Perhaps, the PBO RSA can learn best practices from other offices which have already undergone processes of external evaluation and customise such to suit the South African context.
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Questions
• Questions & Answers
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Thank you
Professor MIGM Jahed: Director
Mr AT Monnakgotla: Office Manager
LOCATION:
103-107 Plein Street
Parliament Towers
4th Floor
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