Reading%20Budgets

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Reading Budgets
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This presentation

• Explains how to read the budget tables in the
  February budget votes
• Explains how to read the budget tables in the
  annual reports
• Describes some of the narrative that is in each
  of these two documents

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Expenditure tables in vote (p333)

• Each vote is divided into programmes
• A programme is made up of sub-programmes
• Estimates are given for seven years
• Three years before current year
• Current year (still in progress)
• Budget year for voting
• Two outer years of MTEF
• Current year can have 3 estimates
• Original allocation, adjusted (October), revised

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Narrative in the vote

• Budget summary table
• Overall aim purpose of each programme
• Strategic overview of 7-year period
• Table of selected performance indicators
• Detailed expenditure estimates for 7 years
• Discussion of expenditure trends
• Discussion table of revenues
• Section for each programme with further
  disaggregation sub-programme information

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The size of the numbers

• Remember to add the 0s
• National budget usually millions (000000)
• Provincial budget usually thousands (000)
• All numbers are in nominal terms. They are not
  adjusted for inflation.
• If inflation if 5, then a nominal increase of
  less than 5 means that the buying power of the
  budget is less than before.
• Inflation measures the change in prices over 1
  year.
• Government often reports increased allocations
  over three years i.e. for full MTEF period. So
  the increases can seem bigger than they really
  are.

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Categorising expenditure

• The economic classification gives the
  bookkeeping breakdown for the programme as a
  whole.
• Three main economic categories
• Current payments spent for things to be used
  up in budget year. Includes SALARIES
• Transfers subsidies money paid to other
  institutions who will spend it (e.g. CCMA,
  NEDLAC)
• Payments for capital assets spent for things
  that will last more than one year

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Structure of annual report

• General information
• Programme performance
• Report of the Audit Committee
• Annual financial statements
• Human resource development

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Budget table in annual report (p10)

• All numbers are for year on which Department is
  reporting i.e. 2009/10.
• Voted is what was voted in February as adjusted
  by revisions in October.
• Roll-overs are unspent money from previous year
• Virement is money shifted between programmes
• Actual expenditure is what was spent
• Variance is difference between total vote (incl.
  all adjustments) and expenditure. A positive
  amount means the Department under-spent.
• Separate table for transfer payments (p11)

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Reading numbers critically

• Think about real, not only nominal, changes.
• Compare expenditure with original allocation.
• Consider whether the economic breakdown e.g.
  spent on salaries, is appropriate.
• Compare trends in expenditure with trends in
  performance indicators.
• Ask whether the performance indicators measure
  things that will benefit PEOPLE.
• What else??

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Reading the annual report
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Aim of Dept of Labour

• To play a significant role in reducing
  unemployment, poverty inequality, through
  policies programmes aimed at improved
  economic efficiency productivity skills
  development employment creation sound labour
  relations eliminating inequality
  discrimination poverty in the workplace
  improving employment and protecting improving
  workers rights benefits.

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Labours five programmes

• Administration Overall management support and
  advisory services to department
• Service delivery Protect health safety of
  workers and enforce policies
• Employment skills development services Achieve
  objectives targets of national skills
  development strategy
• Labour policy labour market programmes
  Establish equitable sound labour relations
  environment
• Social insurance Administrative support
  services to Unemployment Insurance and
  Compensation Fund