ANNUAL REPORT OF THE JOINT BUDGET COMMITTEE JANUARY - DECEMBER 2005


1. Name of the Committee: Joint Budget Committee (JBC)

Co-Chairpersons: Ms L L Mabe, MP (NA) and Mr B J Mkhaliphi, MP (NCOP)

Committee Secretary: Mr K Dlamini


2. Co-Chairpersons' overview:


During the year under review, the Committee continued implementing its mandate. A major milestone reached during the year was the Committee's adoption of its strategic plan which incorporates a report envisaged in item 9 of its Terms of Reference.


Challenges persisted. To gain a clear picture of progress made, the Committee will have to embark on a strategic session in order to appreciate the extent of work done in comparison with its long term programme. Challenges that are being encountered include, amongst other:


Amongst the things that the Committee has realised during the year is the strengthening of co-ordination with other Committees, like the two sectoral Committees on Finance. Deliberations with these Committees gave the Joint Budget Committee insight with relation to the functioning of the economy and fiscal monitoring exercise.


Another challenge with regard to resources is the absence of a dedicated researcher. As a Committee which is still in a developmental stage and whose mandate is so complex, it is imperative that we are provided with a dedicated researcher.


3. Vision and mission of the Committee


3. 1 Mandate


The JBC's mandate is found in its Terms of Reference as resolved by both Houses of Parliament on 25 June 2004. The resolution established the Committee to:


(1) consider proposed allocations in the Medium-Term Expenditure Framework and the Appropriation Bill and whether these allocations are broadly in keeping with the policy directions of the Government;


(2) make proposals regarding the processes Parliament should follow with regard to its role in the developing of budgets in accordance with constitutional requirements;


(3) on a regular basis monitor monthly published actual revenue and expenditure per department, and to ascertain whether they are in line with budget projections;


(4) consider, when tabled, the Medium-Term Budget Policy Statement, with the exception of those sections dealing with the macro-economic situation and revenue;


(5) conduct hearings on the Medium-Term Expenditure Framework and Budget Policy Review Document, with the exception of those sections dealing with the macro-economic situation and revenue;


(6) exercise those powers in Joint Rule 32 that may assist in carrying out its functions;


(7) report-


(a) on the Medium-Term Budget Policy Statement regarding the matters referred to in paragraph 5; and


(b) quarterly regarding the matters referred to in paragraph 4; and


(8) consider and make proposals regarding the nature of its functions relative to those of other committees in respect of the budget process and conducting oversight, the Committee to report thereon from time to time as may be necessary and to submit a final report by not later than the end of the next budget cycle in Parliament.

The Committee's vision and mission are incorporated in its strategic plan adopted by the Committee on 22 June 2005 and ultimately by Parliament on 16 November 2005.


3.2 Vision


The JBC's vision is that of having an effective role in budget management, facilitating improved spending outcomes in terms of: (i) aligning spending outcomes with government priorities; and (ii) ensuring value for money.


3.3 Mission

The Joint Budget Committee's mission is to practice effective oversight over state spending on consolidated budget.


4. List of public entities over which the committee exercise oversight


The Committee monitors monthly expenditure by all Government Departments and reports to Parliament quarterly.


5. Number of meetings held and those cancelled


No of meetings held: 31

(Thirteen of the above meetings were held jointly with the Finance Committees and one with the Focus Group on Money Bills)


No of meetings cancelled: 9


(Of the above called meetings, four were cancelled because attendance was very poor [less than four members].


Generally, attendance of meetings is very poor especially when the Committee is meeting separately from the Finance Committees.


6. Legislation referred to the committee (Finalised and not finalised): indicate the following:-


None

7. Papers (International Agreements, Protocols, Reports etc) referred to the Committee: indicate the following:-

Paper/ Report

Referral Date

Adoption Date of Committee Report

ATC Publication Date

Debate Date in NA

Debate Date in NCOP

Expenditure Statements for the third quarter of 2004/5 financial year (October, November and December 2004)

31/01/2005

22/06/2005

03 /08/ 2005

16/11/2005

14 /09/ 2005

Expenditure Statements for the fourth quarter of 2004/5 financial year (January, February and March 2005)

30 /04/ 2005

22 /06/ 2005

03 /08/ 2005

16/11/2005

14 /09/ 2005

Expenditure Statements for the first quarter of 2005/6 financial year (April, May and June 2005)

31/07/2005

31 /08/ 2005

15 /09/ 2005

16 /11/ 2005

Pending

Medium Term Budget Policy

Statement (MTBPS) 2005)

31 /10/2005

11 /11/ 2005

14/11/2005

15/11/2005

16/11/2005

Submission of the Financial and Fiscal Commission on the Division of Revenue for 2006-2007

06 /05/ 2005

Committee not required to report


8. Local visits


It is by convention that Chairpersons of the Budget and Finance Committees attend the meetings of the Budget Council as observers.


Messrs Mkhaliphi and Nene attended three meetings of the Budget Council during the year, two in Pretoria and one in Mpumalanga.


The Budget Council consists of the Minister of Finance, the MECs of Finance and National and Provincial Treasuries. Its main function is to co-ordinate the different interests of national and provincial governments and to make sure that agreement is reached on how to share revenue.


These meetings assist in providing the Co-Chairpersons with insight into the discussions and activities taking place during the budget preparation phase. Such insight then translates into proper guidance and direction of the whole Committee when the budget is tabled in Parliament and referred to the Committee.


9. International Visits:

The Committee did not undertake any visits during the period covered by the Report. However, it is the Committee's intention to undertake an international study tour of a country where the Budget Committee has been fully operational for a long time.


At the request of the Speaker and the Chairperson of the NCOP the Co-Chairpersons met with the following international delegations which visited Parliament:


10.Budget Vote


None


11. Annual reports of the Executive (30 September)

None


12.0ther committee activities (briefings on other issues, workshops, conferences)


12.1 Workshops


The Committee held two workshops as an ongoing exercise of unpacking its Terms of Reference.


12.1.1


The first workshop was held in Parliament in February. Out of the workshop a new internal discussion document was produced.


12.1.2

The second one was held in Gordon's Bay in May. A report; incorporating the Committee's strategic plan as well as a report envisaged in item 9 of the Terms of Reference; was produced and tabled in Parliament.


12.2 Hearings


Hearings were held on the following:


12.2.1 Provincial expenditure


Hearings on Provincial expenditure were held jointly with the Select Committee on Finance on 18 and 21 February 2005. The following institutions and individuals appeared before the Committees:


Report on hearings was tabled by the Select Committee on Finance.


12.2.2 Budget for 2005/6


The Committee sat jointly with Finance Portfolio and Select Committees during the hearings on the 2005/6 budget from 25 February to 04 March 2005. The following institutions and individuals appeared before the Committee:


Report on hearings was tabled by the Finance Committees.


12.2.3 Appropriation Bill


The Appropriation Bill was, amongst other Committees, referred to the JBC on 23 February 2005 and in line with its mandate, the Joint Budget Committee held its own hearings on the Bill on 23 May 2005:

The following Departments appeared:


The Committee adopted its report on 22 June 2005 and it was published in the ATC on 3 August 2005. It was debated in the NCOP and NA on 14 September 2005 and 16 November 2005, respectively.


12.2.4 Expenditure Reports


The Committee, having identified irregular spending patterns, called the Department of Communications for a hearing on 22 June 2005.


The Committee compiled a Report on the hearings and adopted it on 31 August 2005 and it appeared on the ATC on 15 September 2005. The Report was considered and adopted by the NA on 16 November 2005 and is due to be considered by the NCOP.


12.2.5 Medium Term Budget Policy Statement (MTBPS)


The MTBPS was tabled in Parliament by the Minister of Finance on 25 October 2005 and was referred to, amongst other, the JBC for consideration in line with its mandate


The MTBPS is aimed at providing a pre-budget view on the macro-economic context, assumptions and projections underlying the Budget, the medium term fiscal policy framework, and the main divisions of revenue between functions and spheres of government.


Having been briefed by the Minister of Finance (Mr T A Manuel) and National Treasury, the JBC held hearings on the MTBPS from 27 October to and 02 November 2005 and adopted its report to Parliament on 11 November 2005.(See table under par 7).


The following Departments, institutions and individuals appeared before the Committee and made presentations:


A. DEPARTMENTS


B. OTHER INSTITUTIONS


C. INDIVIDUALS


D. WRITTEN SUBMISSIONS (no oral presentations)


13. Budget of the committee


Amount allocated for 2004/5 = R333 532


Less: Total Expenditure = R166 425

--------------------------

- Catering = R12379

- Provincial Visits= R60817

- Public Hearings = R58 625

- Workshops = R31 104

- Research (MTBPS) R 3 500

----------------------------

Less: Transfer to Consolidated Fund R 79 103

Transfer to Staff Travel R 10 100

----------------------------

Balance (as at 02 December 2005) R 77 904


14. OUTSTANDING MATTERS:


Committee reports on Expenditure Statements for the second and third quarters of 2005/6 financial year (July, August, September October, November and December 2005).


15. SUPPORT STAFF


Control Committee Secretary: Mr L Pakati


Committee Secretary: Mr K Dlamini


Committee Assistant: Mr B Viljoen


Secretary to Co-Chairperson (NA): Ms Z Vice


Secretary to Co-Chairperson (NCOP): Ms Z Mkutukana Researcher (Research Unit): Ms B Diutlwileng (unti/10 October 2005)


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COMMITTEE SECRETARY DATE:

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CONTROL COMMITTEE SECRETARY DATE:

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COMMITTEE CHAIRPERSON DATE:


APPENDICES