Parliamentary Budget Office on its mandate and functions

Meeting report

Co-chair Mahlangu welcomed everyone to a briefing by the Parliamentary Budget Office (PBO) on its mandate and role. She invited a presentation from the PBO.

Briefing by Parliamentary Budget Office (PBO)
Ms Nelia Orlandi, Deputy Director: Public Policy, PBO, took the Committee through a presentation on the mandate and core functions of the PBO. On its legal mandate, the Money Bills Amendment Procedure and Related Matters Act, as amended in 2018, came into effect in April 2009. It gives Parliament powers to amend the budget and other money bills before it. Each House established committees on finance to consider and report on: the national macro-economic and fiscal policy; amendments to the fiscal framework, revised fiscal framework and revenue proposals and Bills; actual revenue published by the National Treasury; and any other related matter set out in this Act. The two Houses also established committees on appropriations to consider and report on: spending matters; amendments to the Division of Revenue Bill, the Appropriation Bill, Supplementary Appropriations Bills and the Adjustments Appropriations Bill; recommendations of the Financial and Fiscal Commission; reports on actual expenditure published by the National Treasury; and any other related matter set out in the Act.

The Act established a PBO as a juristic person, with its Director being the Accounting Officer accountable to Parliament. The Director, in consultation with the Advisory Board (two House Chairpersons and four chairs of finance and appropriations committees) determine the structure and conditions of service of the PBO. The transfer of funds to the PBO from Parliament are in accordance with the Financial Management Act of Parliament. The PBO may obtain information from any organ of state or person that derives funds from the National Revenue Fund.

The PBO’s core functions are as follows: undertaking research and analysis for the aforementioned committees; annually providing reviews and analysis of the documentation tabled in Parliament by the Minister of Finance; providing advice and analysis on proposed amendments to the Fiscal Framework, Division of Revenue Bill and Money Bills and on policy proposals with budgetary implications; monitoring and synthesising matters and reports tabled and adopted in a House with budgetary implications, with particular emphasis on reports by other committees; keeping abreast of policy debates and developments in key expenditure and revenue areas; monitoring and reporting on potential unfunded mandates arising out of legislative, policy and budgetary proposals; and undertaking any other work deemed necessary by the Director to support the implementation of the Act.

The PBO holds regular engagements with other units in Parliaments, and with civil society during public hearings and other platforms. The PBO is also part of the African Network of Parliamentary Budget Offices (AN-PBO), established in 2016. The Annual AN-PBO Conference, hosted by SA Parliament in Cape Town last year, was to take place in Accra, Ghana in September 2019. However, the Office had not received approval from Parliament to travel to Ghana. The PBO also has continual engagements with other PBOs through the Global Network of PBO (GN-PBO) and the OECD Network of PBOs and Independent Fiscal Institutions; multilateral institutions involved in establishing and capacitating PBOs: the International Monetary Fund (IMF); World Bank; Organisation for Economic Co-operation and Development (OECD); and the Collaborative Africa Budget Reform Initiative (CABRI). The PBO had also initiated engagements with some of the fellow BRICS countries; Auditor-General SA, the Department of Public Service, Monitoring and Evaluation, National Treasury and other stakeholders.

The PBO operates within the Administration of Parliament under Programme 1: Strategic Leadership and Governance. Therefore, all parliamentary policies apply to PBO staff as well. An operational plan in terms of the legal requirements of the Money Bills Act was developed, and quarterly feedback meetings are held with the Advisory Board. The Office’s end-year performance is reflected in the annual report of Parliament, and its compilation is based on the annual operational plans, which are submitted to the Executive and Advisory Panel/Board quarterly.

Ms Orlandi highlighted some of the challenges the PBO was facing currently. The office was grappling with operational the following uncertainties: unapproved 2019/20 annual operational plan; uncertainties related to approvals of procurements and other expenditure; human resources related matters (including performance plans and assessments); compliance to Money Bills; operationalisation of the Money Bills Act; and the two posts of Director and Policy Analyst which were still vacant.

Discussion
Mr T Brauteseth (DA, KwaZulu-Natal) commented on the PBO director position. Why was it still vacant? Had the position been frozen or was there some laxity on the part of the executive authority? He wanted to know the actual reason why a person had not been found to fill the position.

Mr M Rayi (ANC, Eastern Cape) asked if there was any collaboration between PBO and Parliament’s Research Unit. Will the PBO analyse the Economic transformation, inclusive growth, and competitiveness: Towards an Economic Strategy for South Africa, published by the Minister of Finance recently? The PBO advisory board, as the executive authority, should take up the challenges as identified and ensure some of them are attended to as a matter of urgency. He expressed disappointment that the PBO was only mandated to assist only, when the rest of the committees could also use PBO’s expertise. It was also disappointing that the trip to Ghana had not been given the go ahead by Parliament. 

Mr J Steenhuisen (DA) said the PBO’s expertise was very helpful in taking Members through budgetary processes. He expressed concern about the Director position going unfilled this long. There was ample time available to get a replacement from when the previous director had indicated he would not be available for another term. He suggested the Committee pass some form of resolution or, alternatively, the Co-chairs could write to the executive authority to say the Committee was deeply concerned about the delays in filling the position. The Committee could also invite the executive authority for a meeting to discuss this and any other issues that may emerge. It had to be borne in mind that the executive authority is actually accountable to the Committee. The Committee would want to know when the post will be advertised and the tentative date by which the PBO would have a director.

Co-chair Mahlangu agreed with Mr Steenhuisen’s suggestion and added the Committee must find a way of exerting its authority as per the applicable legislation. The Committee ought to be effective. The Committee might have to request a meeting with the executive authority as PBO officials present would not be in a position to answer some of the questions from Members.
 
Ms Orlandi replied that all personnel within PBO had no security of tenure at the moment as they were all on contracts. Without a Director, expiring contracts could not be renewed as this is the director’s responsibility. The Money Bills Act also stipulates that, in the Director’s absence, his/her deputy must be appointed to act in that capacity. However, this had not happened. The PBO was in a dilemma and had not received any communication from authorities in Parliament. Having Regulations on how to operationalize the office would be a good idea. On the PBO assisting Members, if a request for analysis is received from any other committee, the PBO would not be able to provide this as it is outside its mandate as prescribed by the Money Bills Act.

Dr Dumisani Jantjies, Deputy Director: Finance, PBO, added that the filling of the vacant positions was beyond PBO’s scope as making appointments is Parliament’s prerogative. As per the Money Bills Act, the PBO’s advisory board is comprised of the two chairpersons from both Houses, and chairpersons of finance and appropriations committees. The Act is quite clear on the chain of accountability.

Co-chair Mahlangu said the PBO’s independence was of much importance and should not be compromised. She thanked everyone and appreciated the engagements. The Committee would reconvene in the evening for a briefing by the four divisions of Parliament.

The meeting was adjourned.