Parliament’s Draft 2019/20 Budget & APP: Acting Secretary to Parliament & Treasury briefing

Meeting report

National Treasury presentation
Ms Gillian Wilson, Chief Director: Public Finance, National Treasury, took the Committee through a presentation on Parliament’s budget process. She appreciated the formal invitation extended to Treasury by Parliament to present on the latter’s budget process. Parliament, like other national institutions, receives its appropriation through a vote in the annual Appropriation Act and adjustments to it through annual Adjustments Appropriation Act. Parliament’s internal budget process is regulated by the Financial Management of Parliament and Provincial Legislatures Act. On Parliament’s internal budget process under the Financial Management of Parliament and Provincial Legislatures Act, the Accounting Officer of Parliament must at least 10 months before start of financial year, prepare draft budget and present it to Executive Authority of Parliament. Parliament’s budget process must: specify Parliament’s expected revenues distinguishing between money to be appropriated through annual budget; conditional and unconditional donor funds; and funds derived from Parliament’s own revenue sources. The budget process must also: specify proposed expenditure requirements per main division between within budget, distinguishing between sources of funds; specify purpose of each main division within budget and provide explanations; and be in prescribed format to ensure consistency with format for other organs of state. Estimates of national expenditure (ENE), as part of annual fiscal framework, are tabled to Parliament for approval. ENE constitutes estimates and not approved budgets for institutions subject to appropriations Act. For Parliament, ENE and appropriation Act only contain total amount of appropriation. Once appropriation Act is enacted, Parliament should then by resolution appropriate money received through appropriation Act.

On Treasury’s support to Parliament since amendment of Act in 2015, Treasury met with Parliament’s officials with the main objective of the meeting being to assist Parliament with implementation of the Act, as amended, and address its implications for medium-term expenditure framework (MTEF) and ENE budget process. A number of meetings were held between the Office of the Accountant-General and the CFO of Parliament and Head of Treasury Advice Office to provide assistance for establishment of Treasury Advice Office in Parliament. In November 2017, the Executive Authority of Parliament wrote to Minister of Finance requesting detailed publication of the 2018/19 ENE to ensure transparency of Parliament’s budget. The last meeting between Treasury and Parliament was on 17 August 2018 wherein Parliament again requested Treasury’s assistance for detailed publication of Parliament’s ENE.
 
Discussion
Ms V Mente (EFF) asked when the discussions about having a Treasury Advice Office within Parliament would commence. Were there clear regulations or guidelines for Parliament’s Accounting Office to follow? Was Treasury satisfied with Parliament’s budget processes?

Mr N Singh (IFP) asked about the nature of the relationship between Treasury and Parliament’s Accounting Office. Was there a structured process? What was Treasury’s responsibility in that relationship? What was the outcome of the said 17 August meeting? Was Treasury satisfied that Parliament’s presentation of its budgets was in line with legal prescripts? He emphasised the need for appointment of a Treasury Advice Officer up until the lacuna is addressed.

Ms C September (ANC) asked if the separation of powers between the executive and legislature had been thought through in relation to the budget processes involving Treasury and Parliament’s Executive Authority. There has to be a clear distinction. New legislation would have to be crafted to deal with the deficit and lacuna between the appropriations Act and the ENE as there currently was a big possibility that Parliament’s expenditure could go in either direction. This had to be thought through.

Mr F Essack (DA) asked how often Parliament made the submissions stipulated by the Act as part of the budget process.

Ms Wilson said Treasury meets with Parliament before the budget process and presentation of MTEF to provide technical support yearly. The objective of the meeting is to give assistance to Parliament in sprucing up its budget structure. The relationship between Treasury and Parliament in this context was consultative in nature and guided by the relevant Act. The role of Treasury in formulation of the parliamentary budget is limited and circumscribed. The current budget structure of Parliament was not consistent with other government departments but Treasury does offer some assistance. There is no documentation that serves as a guideline for implementation of the Act but it was up to Parliament to break down its provisions and formulate relevant regulations in terms of the Act. Parliament was better placed to respond about whether the Act was being fully implemented.

The Chairperson identified the need for more regular interactions between Treasury and Parliament at the level of the accounting officers. Treasury should continue to provide technical support to Parliament so that the transition is smoothened. The Accounting Officer working together with the Executive Authority should come up with a process outlining how Parliament could deal with its budget process more effectively. The ball was largely in Parliament’s court. A Treasury Advice Office should be established and funded as soon as possible. Treasury should continue providing the technical support up until such a time when Parliament is fully capacitated.

Update on disciplinary process involving Secretary to Parliament
The Chairperson said a discussion was held earlier on and it was agreed that the Acting Secretary to Parliament would give an update on the matter but did not need to go into the details as the matter was sub judice and Parliament would not want to jeopardise the processes still underway.

Ms Penelope Tyawa, Acting Secretary to Parliament, informed the Committee the disciplinary processes were still underway and tentatively there would be a full update by the end of October. This was what had been set out by the disciplinary committee chairperson.

Mr Singh well-understood Ms Tyawa could not share more than what she had. However, was the Secretary to Parliament still being paid a full salary every month? For how long would this go on? There had to be finality on this matter.

Ms Tyawa replied that the Secretary to Parliament was still on paid leave of absence up until such a time the disciplinary committee concludes the matter. She was not privy to any further details.

Mr Essack asked about the implications of such a liability to the parliamentary budget given the previous Secretary was still enjoying the full perks and benefits whilst the Acting Secretary was also being paid an acting allowance.

The Chairperson suggested the matter be held in abeyance as the Acting Secretary might not have answers to Members’ questions. He proposed that the Committee meet with the Executive Authority together with the Presiding Officer at a later stage to get the full picture. 

Ms September asked about the number of similar cases being investigated and still dragging on. The response could be received during the next Committee meeting.

Ms Tyawa said information on HR-related issues and disciplinary cases would be furnished to the Committee during the next meeting as suggested.

Parliament’s Draft 2019/20 Budget and Annual Performance Plan
Ms Tyawa presented Parliament’s draft 2019/20 budget and annual performance plan. This was a draft as the expectation was that the sixth Parliament would re-evaluate the strategic framework and priorities as it would deem necessary. Capacity building to improve service provision and creation of an enabling environment within Parliament was crucial. However, a R477 million budget allocation deficit for the period under review meant that Parliament would not be in a position to fill most vacant posts and ensure effective service provision for Members. The budget is skewed towards the core business of Parliament and Members would have to make inputs on the appropriation and reprioritisation of the parliamentary budget particularly in instances where there are shortfalls. Core business, which is the crux of parliamentary work and largely driven by compensation to research and advisory services was allocated R79 million. The shortfalls might also mean Parliament would not be able to strengthen the Parliamentary Budget Office (PBO) as had been resolved. She identified the renovation of committee rooms and the parliamentary precincts as a whole within a constrained budget as one priority going forward.

Discussion
Mr Singh asked for the list of critical vacant posts within Parliament. Has there been any interaction between the Executive Authority and Treasury in terms of the budget deficit and the need for adjustments. Were there timelines to the processes?

Ms September asked whether the proposed relocation of Parliament from Cape Town was being factored in the budget. The baggage of the Fifth Parliament should not be unloaded on the sixth. It would be incorrect not to fill vacant posts as this would impede on the ability of the next Parliament to carry out its constitutional obligations. Also, it would be wrong for Parliament’s administration to be remunerated handsomely at the expense of other crucial expenditure items.

Ms Mente commented on the deficit as it affects the operation and core functions of Parliament. Parliament would realise significant savings if frills are done away with during the State of the Nation Address. When was the PBO going to be self-financing so as to ensure its independence? She asked about litigation costs incurred by Parliament.

Mr Essack asked why Parliament would budget for deficits instead of what was available. Where would the funding come from? This was a matter of concern.

The Chairperson asked about the implications of the budget reduction on the Taking Parliament to the People initiative.

Ms Tyawa said the budget deficit was indeed worrying. Treasury would be engaged again at a technical level and the Executive Authority would also directly engage with the Minister of Finance. Adjustments had been submitted to Treasury as was the case every year, but the requests were being declined. The resolution had been that a request would be made again and there had to be catalysts in the form of Members as political leaders. On vacant posts, 122 positions were being filled overtime but the challenge was significant turnover. The possibility of having a pool of researchers not necessarily assigned to particular committees was also being explored. A socio-economic impact and cost-effectiveness study of moving Parliament from Cape Town had been commissioned and a report was expected within the next six months. Having an efficient and enabling environment for Parliament to deliver on its mandate was paramount. A team had been set up to come up with a legacy report which would ensure that the challenges of the fifth Parliament are not carried forward to the next. The PBO’s independence had been upheld through the recent amendments to the relevant Act but its administration was still tied in with Parliament. The bulk of litigation costs were instances whereby Parliament is cited as a party when it is really not. Parliament is cited by virtue of being a law-making body or where political parties take Parliament to court on matters involving committee work. Over years, Parliament’s budget baseline had not improved and hence discussions on the need for adequate budget allocations was crucial.

The Chairperson said a platform where the Committee would be able to interact fully with the Executive Authority and Treasury in as far as budget processes were concerned had to be created. The Committee expected to be furnished with a list of the vacant posts yet to be filled, and the impact study for the relocation of Parliament upon its completion. He thanked everyone for the engagements.

The meeting was adjourned.