THE DEVELOPMENT AND IMPLEMENTATION OF PUBLIC BUDGETING

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FIVE YEAR CASH FLOW STATEMENT

The table 4 – 9 below shows that the MQA budgeted for a loss and although this is unacceptable for an organ of state, in the MQA scenario, this is acceptable due to the huge reserves in its banking account. To budget for a deficit will ensure that reserves deplete in the 2009/2010 financial year. Based on the cash flow strategy, it should be noted that the reserves of R174 930 (2006/2007) and R195 774 (2007/2008) will deplete or be kept to an absolute minimum in the 2009/2010 financial year (South Africa 2005 e). The MQA used a very conservative approach to budget compilation due to the uncertainty of the mining industry and the rapid decline of the gold mining industry (see Appendix A). Although income increased by 10% each year, the uncertainty of potential income, made the MQA to budget for a 6% increase which is 4% below the actual income received (South Africa 2008 e). The conservative budget process, including the slow spending of discretionary projects and grants were the reasons for the increase in reserves in the MQA bank account (South Africa 2006 a and 2007 a).

MONITORING AND EVALUATION IN THE MQA

The Board raised concerns that the MQA does not have an appropriate monitoring and reporting framework in place to facilitate timely reporting to governance structures. When reporting takes place it is often on operational matters and not in line with the seven strategic thrusts adopted by the Board. The Board approved a monitoring and reporting framework aligned to the principles of the Balanced Scorecard (South Africa 2007 f). The Balanced Scorecard is an approach to performance measurement that includes financial and non-financial data derived from an organisation’s strategy. This strategy map can help an organisation describe and test the cause and effect linkages in key strategic themes such as growth and service delivery (Frigo 2003:10).

MQA Board

The MQA Board meets quarterly. The Board adopted a board charter reflecting its activities for the 2008/2009 financial year. Progress reports on the implementation of the strategic plan and budget are compiled on a quarterly basis for consideration by the Board. Reports on revenue collection, expenditure versus budgeted funds, variance reports and disbursement of discretionary projects and grants are considered by the Board. A report by the chief executive officer on national and sectoral strategies completes the Board agenda (South Africa 2007 d). In July 2008, the Board approved the annual financial statements for the year ended 31 March 2008 including the auditor-general management letter (South Africa 2007 d). The meeting of 29 July 2008 also took note of the new agenda of the MQA Board aligned to the Balanced Scorecard.

Executive committee (EXCO)

The executive committee is a standing committee of the Board and deal with urgent operational matters on behalf of the Board. The EXCO does not make any policy decisions. Any policy matter is recommended to the Board for approval. The EXCO considers all reports by line functions and makes its own decisions on whether items should be referred to the Board or not. The EXCO considers management accounts and financial reports on a bi-monthly basis. Progress reports on the implementation of the strategic plan and budget are considered on a quarterly basis and recommended to Board (South Africa 2006 b). The EXCO also serves as the remuneration committee and is delegated by the Board to review the performance of the CEO on a bi-annual basis (South Africa 2006 b).

Audit committee

The audit committee is tasked with responsibilities encapsulated in regulation 27 of the Treasury Regulations issued in terms of the PFMA. The audit committee operates under a formal terms of reference approved by the Board (South Africa 2007 h). The meeting of 30 April 2008 approved the risk management strategy, three year audit plan including the one year audit operational plan. The meeting also took note of control measures implemented in mitigating the potential impact of pervasive risks. A progress report relating to the compilation of annual financial statements and management accounts was provided for information (South Africa 2007 d). The audit committee convened a special meeting for consideration and recommendation of the annual financial statements for the period ended 31 March 2008 to the Board for approval (South Africa 2007 d).

TABLE OF CONTENTS :

• Page
• Declaration
• Table of contents
• List of figures and tables
• List of abbreviations
• Abstrac
• Special word of thanks
• 1. INTRODUCTION AND OVERVIEW
  • 1.1 Introduction
  • 1.2 Background
  • 1.3 Stimulus for the research
  • 1.4 Scope of research
  • 1.5 Research questions
  • 1.6 Research objectives
  • 1.7 Key concepts
  • 1.8 Terminology
  • 1.9 Research methodology
  • 1.10 Division of chapters
  • 1.11 References
  • 1.12 Conclusion
• 2. THE DEVELOPMENT AND IMPLEMENTATION OF PUBLIC BUDGETING
  • 2.1 Introduction
  • 2.2 Budgeting
  • 2.3 The different budgeting systems
    • 2.3.1 Programme budgeting system
    • 2.3.2 Performance budgeting system
    • 2.3.3 Multi-year budgeting system
    • 2.3.4 Zero-based budgeting system
    • 2.3.5 Single year budgeting system
  • 2.4 Budgeting in the South African context
  • 2.5 Estimates of national expenditure
• 3. THE DEVELOPMENT AND IMPLEMENTATION OF STRATEGIC PLANNING
  • 3.1 Introduction
  • 3.2 What is strategy?
  • 3.3 Criteria for effective strategy
  • 3.4 Definition of strategic planning and strategic management
  • 3.5 Strategic planning versus strategic management
  • 3.6 Strategic management models
  • 3.7 Levels of strategy formulation
  • 3.8 A description of the strategic management process
  • 3.9 The relationship between strategic management and 32 management of change
  • 3.10 Stages of the strategic planning process
  • 3.11 Benefits and risks of strategic management
  • 3.12 The relationship between strategic planning, human 35 resources, planning and tactical planning
  • 3.13 The impact of politics on strategic planning
  • 3.14 The role of a board in strategic planning
  • 3.15 Conclusion
• 4. STRATEGIC PLANNING, BUDGETING AND MONITORING IN THE MQA
  • 4.1 Introduction
  • 4.2 The organisation of the MQA
  • 4.3 The statutory mandate of the board
  • 4.4 License to practice
  • 4.5 Strategic plan
  • 4.6 Format of the strategic planning process
    • 4.6.1 Outcomes of the strategic planning session
  • 4.7 Strategic objectives of the board for the period 2005–
  • 4.8 Overall assessment
• 5. STAKEHOLDER VIEWS ON THE BUDGETING AND STRATEGIC PLANNING PROCESS IN THE MQA
  • 5.1 Introduction
  • 5.2 Observation of meetings
  • 5.3 Assessment of meetings observed
  • 5.4 Interviews with stakeholder conveners
  • 5.5 Strengths and weaknesses
  • 5.6 Conclusion
• 6. CONCLUSION AND RECOMMENDATIONS
  • 6.1 Introduction
  • 6.2 Objectives of this study
  • 6.3 Concluding remarks
  • 6.4 Recommendations
  • 6.5 Areas of possible future research
  • 6.6 Conclusion

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STRATEGIC PLANNING AND BUDGETING IN THE MINING QUALIFICATIONS AUTHORITY (MQA)