FREE STATE SENIOR MANAGEMENT SERVICES CONFERENCE

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FREE STATE SENIOR MANAGEMENT SERVICES
CONFERENCE

• 12 AUGUST 2005
• PRESENTER MJ PHUKUNTSI
• 
  FS TREASURY

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• THE ABILITY OF PROVINCIAL DEPARTMENTS TO
  FOSTER INTEGRATION BETWEEN PLANNING AND BUDGETING
  IN ORDER TO REALISE THE OBJECTIVES OF THE FREE
  STATE GROWTH AND DEVELOPMENT STRATEGY

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INTRODUCTION

• Strategic planning has been seen as the task of a
  specialist Department
• One part of the strategic management process
• Once off annual affair
• Gather dust / at most guide top management
  activity
• The process needs to incorporate operatonal plans

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• Lower management tiers of the department and
  functional Directorates (support directorates)
• Interactive process which also links with the
  budget process

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STRATEGIC PLANNING PROCESS

• The starting point for preparing department MTEF
  estimates
• Guide departmental reprioritization with MTEF
  allocations
• Provides the rational for policy options
  regarding changes to baseline allocations over
  the next three years.
• Planning and budgeting are interactive

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IMPORTANT QUESTIONS TO BE ANSWERED/ FSPGDS

• Are planned outputs and deliverables still
  relevant?
• Has service delivery commitments and targets been
  met?
• Is there a high degree of alignment between
  government priorities and departmental
  objectives?
• Is the objectives of FSPGDS incorporated in our
  planned deliverables?
• Review our deliverables

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• Assess the cost and resource implications
• of the revised plan.

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STRATEGIC PLANNING PROCESS (CHART)
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PRIORITY AREAS AND STRATEGIES (FSPGDS)
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PRE-PLANNING EXERCISE

• Governments overarching medium term policy and
  expenditure priorities.
• Alignment of the departmental strategic mission
  to these overarching priorities
• Relevant and effective contribution of
  departmental outputs towards governments
  socio-economic goals and desired outcomes

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• Consistency between overarching government
  policy priorities and departmental strategic plan

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INTERGRATION STEPS

• Preparing strategic plans and prioritizing
• Planned objectives
• Assessing the cost and resources implications in
  preparation of the MTEF budget submission
• Finalizing medium term allocations and
  preparing budget documentation
• Developing process to facilitate in year
  monitoring and reprioritizing of spending

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• Monitoring and evaluating the performance and
  delivery of programmes
• Finalizing annual financial statements and
  reports

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STEP1.PREPARING STRATEGIC PLANS AND PRIORITIZING
PLANNED OBJECTIVES

• What is strategic planning?
• Planning informs budget preparation
• A high or low degree of alignment between
  government priorities and Departmental objectives
• The final stage in the process is to asses the
  cost and resources implications.

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CHALLENGED TO DELIVER TRADE AND INDUSTRY (
CASE STUDY)

• Presidents 2001 state of the Nation Address
• Governments economic action plan to stimulate
  growth of the economy
• DTI undertook an extensive strategic planning
  exercise
• In line with government s economic agenda and
  priorities
• This led to substantial departmental restructuring

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STEP 2 ASSESSING COSTS AND RESOURCE
IMPLICATIONS IN PREPARING MTEF SUBMISSIONS

• Incremental costing (budgeting)
• Zero-base costing (budgeting)
• Cost drivers
• Costs drivers in health, education and land
  sector

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COSTS DRIVERS IN HEALTH, EDUCATION AND LAND SECTOR
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ASSESING COSTS (FSPGDS)

• Complementary expenditure Programmes (or
  Savings on such) in other departments,
  organisations,provincial and municipality.
• The views of stakeholders , departments etc.
• Elements or activities of the new policy or
  programme which involve transfers to other bodies

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STEP 3 FINALISING MTEF ALLOCATIONS AND
PREPARING BUDGET DOCUMENTATION

• Review of submissions
• Medium term allocation process recommendation
  stage
• Medium Term Budget policy statement
• Medium Term allocation process discussion
  stage
• Budget preparations
• Steps 4,5 and 6.

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LEADERSHIP COMMITMENT (FSPGDS)

• Assign clear roles and responsibilities,
  preferably in writing
• Establish priorities using a readiness context
• Make available adequate time ,staff, finances and
  other resources
• Establish regular procedures for reporting on
  progress
• Communicate operation on a regular basis

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INTERNAL CULTURE

• Leadership support
• Previous planning and / or measurement experience
• Program maturity
• Management flexibility and support
• Evaluation capability
• Availability of internal resources

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EXTERNAL CULTURE

• Economy
• Constituencies
• Level of controversy
• Resistance to measurement by stakeholders
  including program recipients

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ESTABLISHING REALISTIC EXPECTATIONS (FSPGDS)

• Performance management cannot be
  institutionalized in one year or several because
  
• Strategic planning has a minimum of three to five
  year horizon
• Different programs will require varying amounts
  of time for implementation
• Strategic and annual plans will need to be
  modified and adjusted often

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ESTABLISHING A READINESS CONTEXT (FSPGDS)

• Leadership support
• Presence of clearly defined goals, objectives
  strategies and results oriented outcome measures
• Availability of program resources
• Flexibility of management
• Availability of evaluation capability

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CHALLENGES (Planning Budgeting)

• Too great a focus on bids for new resources
• What to be achieved within the current baselines?
• National Priorities (Equitable Share
  Conditional Grants)
• A new mind set for all senior managers
• Insufficient evaluations of performance (service
  delivery targets and spending)
• Realistic budgets

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CONCLUSION

• Present day public servants, political and
  career, are on the leading edge of this worldwide
  focus on performance

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THANK YOU!