1Slide 1

PROGRESS REGARDING THE INSTITUTIONAL FRAMEWORK FOR PUBLIC ENTITIES (PEs)

24 Aug 2001

Overview of Presentation

1. Defining a PE

2. Concerns of Cabinet

3. Cabinet decision of 4 April 2001

4. Implementing Cabinet decision• Provincial presentations• Guide to create national PEs• Formalise PE evaluation panel

5. Progress PE Project

Defining a Public Entity (PE)

A PE represents a government business enterprise, board, commission, company, corporation or fund and has one or more of the following characteristics: under the ownership/ control of nat or prov exec Assigned fin & oper auth to carry on bus activity Operates on business principles Financed fully or substantially from NRF/PRF or by way of tax,

levy or other money imposed in terms of nat/prov legislation Established in terms of legislation Accountable to Parl/prov legislature

PUBLIC ENTERPRISES(For Profit Public Entities)

PUBLIC ENTITIES(Non-Profit)

LOCATING PUBLIC ENTITIES

4

PUBLIC SERVICEDEPARTMENTS

Concerns of Cabinet

1.Bring creation, management and review of PEs under strategic direction of government

2. Need for more rigorous financial controls and policy framework for remuneration structures

3.Ad-hoc creation - risk of horizontal fragmentation within SD machinery

Concerns of Cabinet

4. Own legislation - inflexible review and repositioning

5.Fragmentation in PE establishment undermine requirement for a single public

service.

6.Large number of institutions fall outside the scope of the Public Service Management Framework

Some Statistics to Note

1. PEs consumption & generation of R warrants proper management & control. For national PEs total transfer payments - R10,2 billion (2000/2001) total net income - R15,2 billion (31 March 1999) 288,983 staff employed

2. Tremendous growth in 1990’s esp in eco and infrastruct sectors. 201 PEs listed in the PFMA: 10 were created in the 1980’s 60 were created in the 1990’s (43 - 1994 +)

Cabinet Decision of 4 April 2001

1. Development of an institutional framework

2. Broad interim process for creating national PEs & Evaluation Panel

3. MPSA & MoF • Approach the PECs to adopt the broad process• Finalise guidelines to elucidate the broad process

to create PEs & staff transfers.

4. DPSA, NT & DPE launch PE project -• Remuneration framework• Accountability framework

• Design MIS

Implementing Cabinet Decision Provincial Presentations

1. Made to the PCC, the Govern & Admin cluster of FOSAD

and the KZN Prov Cabinet

2. Planned presentation - next meeting of the provincial

DG's forum

Interim Process

• Executing Authority prepares business case

• Business case is assessed by joint panel (MPSA and MoF)

• Executing Authority and reports to relevant portfolio com and approaches Cabinet for approval of legislation

• PE implementation

Implementing Cabinet Decision Guide to Create National PEs

1. Draft guide developed, supported and inputs provided by DPSA, DPE, NT (incl PPP

unit & GEPF) & consortium

2. Guide to be submitted to -• MPSA for approval by 31 Aug 2001 • MoF for approval by 14 Sep 2001• Cabinet for notification by 30 Sep 2001

Implementing Cabinet DecisionFormalise Evaluation Panel

1. Convened at least at Dir (Manager) level & co-opt other officials

2. CP & convener - NT & DPSA

3. Meet as and when required

4. DPSA representatives - GICS/RCoS

5. Secr services rendered by dep whom the CP represents

6. Panel decides further working arrangements

Progress PE Project1. DFID funding R1 mil

2. Consortium contracted 21 Jun • KPMG • Global Edge • Mchunu Mashinini and Associated • Representivity ratio 55%

3. Scope ...

4. Project scheduling ...

5. Project organisation …

6. Current project activities ...

Progress PE Project1. Steering Committee approved on

25 Jul 2001• Scope of project• Project completed by 30 November 2001• Project organisation, roles and responsibilities

2. Had meetings/discussions with • Accountant General & Budget Office - NT

• Vulindlela co-ordinator

• Institute of Directors

• National Agricultural Marketing Council

• 2 workshops with DPE on info requirements

Project Scope Remuneration Framework

Input Outcome Value for Gov.1. Gather informationon current structures,applicable Legislationand practicesregarding: Remuneration Transfer of staff

from PublicService.

2. Comparing levels ofremuneration of PEsand categories of PEs.

3. Benchmark currentpractice withinternational bestpractice, in bothdeveloped anddeveloping countries.

4. Conduct needsanalysis with relevantdepartments.

1. Specifying: Job grading Job evaluation Processes Institutional rewards & incentives Requirements for job evaluation.2. Developing: Models of remuneration Conditions of service for management Conditions of service for controlling body Costing models for remuneration & conditions of

service for categories of PEs

Knowledge ofcurrentremunerationstructures in place.

Detailed andspecifiedremunerationportray andstructure for allcategories of PEs.

Ability to makeinformed decisionson remunerationpolicy issues.

Project Scope Accountability Framework

Input Outcome Value for Gov.1. Determine currentpractices regardingestablishment of PEs.

2. Determinecomparativeinternational standardsin developed anddeveloping countries.

3. Conduct needsanalysis with relevantdepartments.

1. Develop model that provides for: Detailed categorising of PEs Determining level of autonomy and accountability.

2. Specifying roles of: Minister as Executive Authority Director-General as designated Accounting Officer Controlling Body as Accounting Authority CEO as designated Accounts Authority.

3. Reporting model which includes: Performance reports against predetermined

objectives Performance reporting in accordance with

mandate Financial disclosure Reports on corporate governance.

4. Development of establishment model and processesincluding: Criteria for establishment of new PE Mandate scrutiny in relation to existing mandates

in Government and PEs Specifications regarding the transfer of staff, assets

and revenue Review of performance and mandate every 5 years

5. Drafting of Legislative framework whether inrespect of the PFMA or alternate legislation.

Knowledge ofcurrentaccountabilitystructures in place.

Detailed andspecifiedaccountabilityframework andstructure for allcategories of PEs.

Ability to makeinformed decisionson accountabilityand governancepolicy issues.

Project Scope Management Information System

Input Outcome Value for Gov.1. Analyse currentinformation systems.

2. Determine user'sneeds includinginformation resourcesand data manipulationprocesses.

1. Report on management information requirements.

2. Develop high-level system requirements.

3. Development of detailed MIS specifications based onneeds requirements of users.

Analysis of currentstatus.

Outline ofspecification ofintended system thatwill be available toall stakeholders in asecure environment.

Project SchedulingPlanned OutcomesProject Planning & Management - 36 weeks

Initial investigation & info gathering 13w

Remuneration framework and report 14w

Accountability framework & report 20w

Management information system developed 20w

Final report submitted 3w

Jun Jul Aug Sep Oct Nov Dec Jan Feb

Revised OutcomesProject Planning & Management - 22 weeks

Initial investigation & info gathering 8w

Remuneration framework and report 12w

Accountability framework & report 12w

Management information system developed 12w

Final report submitted 2w

Oct Nov Dec JanJun Jul Aug Sep Feb

Project Organisation Roles & Responsibilities

Roles ResponsibilitiesSteering Committee Ensure alignment of project objectives with Cabinet

memorandum/decision. Provide strategic direction to the project. Monitor progress of the PE project. Provide direction regarding policy and scope changes. Approve changes to scope and corresponding budget implications. Facilitate the resolution of project issues.

Project Co-ordinator Obtain sign off of project deliverables. Decision taker/or refers to Steering Committee for decision. Monitor progress of project weekly. Source of information for project.

Engagement PartnerKPMG

Provide strategic direction to project team. Ensure that appropriate resources are allocated to the project. Approve frameworks. Ensure quality of deliverables. Attend Steering Committee meetings. Lock-up partner (budget overruns).

Project Manager(KPMG)

Accountable for project delivery. Approve detailed deliverables. Manage interface between project team and co-ordinator. Monitor the progress of project. Resolve high-level project issues. Report on progress. Attend Steering Committee and project meetings.

Project Committee Ensure alignment of project objectives with stakeholder needs. Provide frequent strategic insight to the project. Monitor progress of the project on a weekly basis. Provide direction regarding policy and scope changes.

Project Team Deliver outputs per project scope & plan. Facilitate interface points with other processes. Provide feedback to project manager and others team members. Present a consistent and professional image to the client. Ad-hoc members also serve as a reference group.

Progress PE Project

Current project activities 1. Finalising research into PE legislation

2. Research international best practice

3. Preparing for meetings with selected depts & PEs

4. Drafting & sending out questionnaire to depts & PEs

5. Investigate current MIS systems & needs

Way Forward

1. MPSA & MoF approve Guide on creating national PEs

• Inform Cabinet and national departments

2. DGs of DPSA & NT formalise evaluation panel - in process

3. Provincial presentations continue

4. Project team continue information gathering & research