Enhancing Budget Transparency: Submission Focus on Adjustment Appropriation
This submission focuses on the need for transparency in additional budget adjustments, addressing frameworks, frequency concerns, and the impact of insufficient information. Recommendations are made for improving oversight and participation in the adjustment process.
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PUBLIC SERVICE ACCOUNTABILITY MONITOR SUBMISSION ON 2023/34 SECOND ADJUSTMENTS APPROPRIATION BILL 13 March 2024 Presented by Lisa Higginson Budget Advocacy Coordinator
Presentation outline Our submission focuses on the need for transparency when additional adjustments are tabled. The structure is as follows: 1. Frameworks for adjustments budget 2. Increasing frequency of additional adjustments 3. Insufficient information regarding additional adjustments 4. Some significant (and concerning) adjustments 5. Potential impacts and implications 6. Recommendations 2
Public Finance Management Act National Treasury Regulations National Treasury Guidelines Appropriations Act Money Bills Amendment Procedure and Related Matters Act Intergovernmental Fiscal Relations Act The minister can table an adjustment as and when necessary (PFMA), with conditions specified Significant and unforeseeable, within votes Have these been tested for additional adjustments? 4
Increasing frequency of additional adjustments Financial Year Explanation votes affected Net value of adjustments 2023/24 No explanation but mostly for wage agreement 9 2022/23 No explanation but mostly for wage agreement and SOE bailouts 40 2021/22 These were for SASRIA - July riots, and for purchase of Covid-19 vaccines 2 Additions: Health R500 M National Treasury R18.1B Net: 2020/21 NA NA No second adjustment, however there was a Special appropriation 2019/20 No second adjustment however there was a Supplementary budget tabled NA NA 2013/14-2018/19 No second adjustment NA NA 2012/13 No second adjustment NA NA 2011/12 Additional adjustment appropriation bill (2011/2012) tabled for Gauteng freeway improvement 1 R5.75 billion 6
Why were these adjustments made? We need more detail. This was one of the recommendations in this COmmittees report from last year PBO presentation includes further details, sourced from various documents. Why are not included in the Bill itself, or an explanatory memo? Do the proposals comply with frameworks? What does this mean for participation and oversight? 8
Although not as large as the adjustments in the 2022/23 second adjustment, there are some significant movements, notably, R400 million reduction to CWP R8 million reduction to EPWP R50 million reduction to Property and Construction Industry Policy and Research It appears that these reductions were used to offset additional funds made available for other votes - mostly to compensation of employees and to the Represented Political Party Fund Within frameworks? Shift from those who rely on govt employment programmes, earning small stipend, to well paid public servants - is this fair, and just? 10
Lack of transparency goes against the good practice demonstrated to date Difference in explanations required for main appropriation and adjustment (budget credibility) Impacts formal oversight and social accountability monitoring Risks more fragmented budget process Must be addressed if this is becoming a trend that signals deterioration in transparency, and decreased credibility of the budget process Continues despite recommendations of this Committee (from FFC input in 2023) 12
Intention is not to create an overly restrictive/inflexible budget process. However; Justifications and explanations must be included with additional adjustments (or in this case, second adjustment) NT should be asked to explain this new trend in the budget process Process must be tested against frameworks to protect budget credibility Detailed explanatory information must be included in all (adjustments of) money bills Adjustments in the 2023/24 bill must be further interrogated 14
