Role and Responsibilities of the Joint Budget Committee

1
Role and Responsibilities of the Joint
Budget Committee

• A conceptual framework
• 3 June 2003

2
Background and TORs

• Build on BRTTs work
• TORs
• Consider allocations in MTEF and Appropriation
  Bill, conduct hearings, report
• Consider MTBPS report
• Monitor actual revenue and expenditure and report
• Make proposals regarding processes Parliament
  should follow in line with Constitution.
• Task of WG to set out
• Immediate processes for 1,2 3
• Developing institutional arrangements for 4 over
  medium to long term
• Seeds of long-term processes lie in immediate
  solutions

3
Principles for Parliaments interventions

• GENERAL PRINCIPLES
• Provisions and spirit of Constitution is bedrock
• Parliament will not duplicate or take over role
  of Executive
• Parliaments role should not disrupt integrity of
  the budget
• Role should not allow 2nd bite at the policy
  apple
• Process should be cooperative and consensual in
  interest of quality decisions
• Role should strengthen overall budget reform
  programme
• Role should be focused on influencing outer
  years, rather than amending appropriation year
• Role should minimise loss of predictability of
  policy and fund flows
• Role should balance influence over policy, with
  right to make amendments with oversight over
  execution.

4
Principles for Parliaments interventions

• PRINCIPLES FOR THE PROCESS
• Parliament should define what information it
  needs
• Parliament should define its capacity needs
• Internal process should be aimed at reaching
  consensus in Parliament
• NCOPs role uniquely in interest of provinces
  should not mirror or duplicate NA processes, but
  should be complementary
• DEMARCATION PRINCIPLES
• NCOP for the time being to take lead in DOR
• Macro-economic and fiscal policy not within JBC
  mandate
• JBC mandate limited to oversight over the
  allocation and use of funds between and within
  the functions of government (distribution of
  budget between sectors and economic categories of
  spending)

5
Issues and Challenges

• ISSUES
• Legal matters
• NCOP, MTBPS and consulting provinces
• Legislation for the future
• CHALLENGES
• Information and capacity
• Asserting JBC
• Protecting Parliaments integrity

6
Conceptual Framework

• JBCs intervention has 3 main aspects
• Influence budget policy (MTBPS and Expenditure
  Chapters in Budget Review) in drafting phase
• Amend (eventually) allocations (Expenditure
  Chapter in Budget Review, NEE, Appropriation
  Bill) in legislative phase
• Oversight over actual expenditure (in-year
  reports on National Departments) in
  implementation phase
• Influence supported by requiring response
• Eventual amendment powers to be used only in the
  last instance

7
Conceptual Framework

• 1 Process to influence policy and amend
• Focused in 3 months following budget
• But draws on year-round work in portfolio
  committees
• Output of this process report on MTEF and
  Appropriation Bill
• Distinguish between amendments for appropriation
  year, and concerns for outer two years
• Timing should coincide with start of executive
  expenditure cycle for first of outer two years
• Possibility of two reports, given different time
  pressures
• 2004 target implementation year
• But is election year

8
Conceptual Framework

• CRITERIA FOR INTERVENTION
• Mismatch between policy and proposed allocations
• Strategic objectives
• Interrogate measurable objectives and congruency
  with SP
• Interrogate link between outputs and objectives
• Interrogate planning assumptions
• Past performance shows up inefficient or
  ineffective proposed use of funds
• To address identified waste and inefficiency (ie
  realise identified savings)
• CONSERVATIVE APPLICATION TO PROTECT INTEGRITY

9
Conceptual Framework

• PROCESS (Budget and MTBPS)
• 3 types of committees
• JBC, cluster and portfolio
• JBC active at start and conclusion
• At start hold hearings and identify areas of
  concern
• At conclusion scrutinise portfolio and cluster
  committee recommendations and make decisions
• Portfolio committees engines of process
• Cluster committees act as clearing houses
• Portfolio committees to motivate every amendment
• JBC can create ad hoc committees
• Executive mirror institutions integral part of
  process
• Information requirement and NCOP input to be
  reviewed
• Similar but smaller process for MTBPS

10
Cluster Committees

• Two questions outstanding
• Will cluster committees have formal status?
• What will sequencing be of their involvement?
• Take up with Rules Committee
• Tasks in Budget Process
• Coordinate portfolio inputs
• Highlight cross-cutting issues
• Integrate proposals
• Recommend to JBC
• Principles
• Practical, effective, simple
• Clusters not take decisions themselves
• Configuration along functional lines, aligned
  with Executive functional clustering

11
Conceptual Framework

• ACTUAL SPENDING
• Focal point for parliamentary oversight over
  implementation
• Comparison of revenue and expenditure against
  budget
• Take account of effects of seasonality
• Highlight end of year dumping
• Track contingency reserve use
• Incorporate adjustment budget
• ID underspending early
• Expand eventually to monitoring outputs
• Integrate with portfolio committees
• Quarterly report drives process
• Immediate implementation
• Institutionalise executive response

12
Way Forward

• Discussion with other stakeholders
• JBC to forge role
• Immediately address capacity building
• Clarify
• Time lines
• Timing and vehicles for executive responses
• Output documentation and timing
• How to enforce PFMA provisions for Annual reports
  etc
• Clarify composition, status and powers of Cluster
  Committees and sequencing of their involvement
• JBCs ability to create ad hoc committees
• Hearing process (fairness equity)
• Additional information required
• NCOP participation outside of JBC
• NCOP role in MTBPS process