This presentation was made by Mohammed Jahed, Parliamentary Budget Office, South Africa, at the 8th meeting of Parliamentary Budget Officials and Independent Fiscal Institutions held in Paris on 11-12 April 2016.

1. Presentation to the 8th
Annual OECD PBO-IFI
Meeting
Paris, France
11-12 April 2016
Professor M Jahed
Director: Parliamentary
Budget Office Republic
of South Africa 1

2. Outline
1. Background Information
2. Comparison to OECD Principles
2

3. 1. Background Information
• Establishment of the PBO RSA
– June 2013. Appointment of the Director.
• 2 & half years in operation
• Legislative Mandate
– Money Bills Amendment Procedure and Related Matters Act, no 109
of 2009, Money Bills Act
• The Act gives effect to sections 42(3) and 77 of the Constitution
– PBO RSA established by section 15 of the Money Bills Act to provide
independent, objective and professional advice and analysis to
Parliament on matters related to the budget and other money Bills
• Primary Clients
– 4 Parliamentary Committees: 2 x Finance Committees & 2 x
Appropriations Committees, both Houses of Parliament.
3

4. Background Information (cnt)
• Leadership
– Director: Professor Mohamed Jahed
– PBO Top Management Structure
• Director
• Deputy Directors x 3
• Office Manager x 1
• Resources
– Staff Complement: 11
• Director
• 6 x Specialists
• 3 x Corporate Services staff: Office Manager, PA to the Director, Office Coordinator
• 1 x Intern
– Budget
• Annual operating budget (personnel & OPEX) of about $1 million Dollars, about R14 million at an assumed
exchange rate of $/R14 against the US Dollar.
– Information & ICT requirements
• Information is readily available & freely available from government departments.
• Subscription to commercial data suites like EViews, Stata for data-analytics
• Sufficient tools of Trade
– Office Space
• Sufficient office space. PBO Offices physically located outside the main Parliamentary precinct. 4

5. 1.1 Organisational Structure
Director:
Prof. MIGM Jahed
Deputy Director
Fiscal Policy
Ms N Orlandi
Policy Analyst
Dr M Sekatane
Policy Analyst
Vacant
Deputy Director
Public Finance:
Dr D Jantjies
Intern
Ms A Stiglingh
Finance Analyst
Mr B Ellse
Finance Analyst
Vacant, process of
being filled
Deputy Director:
Economics
Vacant
Economic Analyst
Dr S Muller
Economic Analyst
Mr R Amra
Office Manager
Mr A Monnakgotla
Office Coordinator
Mr A van Zuydam-
Reynolds
Executive Assistant:
Ms L Mangwani
5

6. 1.2 Timeline of Staff Appointments
Director
PBO
4 June 2013
Office
Manager
&
Executive
Assistant
October
2013
2 x Policy
Analysts
January
2014
1 x
Economic
Analyst
February
2014
2 x Finance
Analyst and
1 x
Economic
Analyst
June & July
2014
Office
Coordina
tor
1
October
2014
Deputy
Directors:
Policy &
Public
Finance
1 August
2015
Intern
1
Septemb
er 2015
6

7. 1.3 Functional Areas
Director PBO
Strategic Leadership: Technical & Administrative
Fiscal
Policy
Analysis
Finance
Economic
Analysis
Corporate
Services
7

8. 1.4 PBO RSA Functions defined
Economics Analysis Public Finance Fiscal Policy Analysis
 Macroeconomic evaluation
 Economic projections
 Tax review and analysis
 Fiscal Framework review and
analysis
 Provide advice of proposed
amendments to the Fiscal
Framework
 Fiscal projections
 Revenue studies
 Microeconomic evaluations
 Spending trends review and
analysis
 Spending projections
 Baseline studies
 Provide advice and analysis on
proposed amendments to the
Division of Revenue Bill (DOR)
and the Appropriation Bill
 DOR Bill review and analysis
 Appropriation Bill review and
analysis
 Monitor legislative proposals
with financial implications -
Bill costing
 Monitor reports adopted by
the Houses with financial
implications
 Monitor committee reports
adopted by a House with
financial implications
 Policy analysis
 Policy implementation analysis
 Outcomes analysis vs spending
trends
 Monitor policy proposals with
financial implications
 Monitor policy debates and
development in key
expenditure and revenue
areas
 Policy Evaluation
8

9. 1.5 Outputs produced
BUDGET ANALYSIS
REPORTS
NATIONAL
DEVELOPMENT PLAN
ANALYTICAL REPORTS
Quarterly Economic Briefs
(QEB)
Other Analytical Reports
Two Main Reports
• Medium term Budget
Policy Statement (MTBPS)
• Main Budget Analysis
=======================
1. Analysis of the 2015 Medium term
Budget Policy Statement (MTBPS)
a. Pre and Post Analysis
2. 2016 MAIN Budget
a. Pre and post analysis of the
2016 Main Budget
3. BUDGET REVIEW
RECOMMENDATION REPORTS
(BRRR)
a. BRRR: Landbank
b. BRRR: South African Revenue
Services (SARS)
c. BRRR: Accounting Standard Board-
ASB1
(a) The National Development Plan
Outcome1: Quality Basic
Education Alignment and
Progress
(b) (b) The National Development
Plan Outcome 2: A Long and
Healthy Life for All South
Africans: Alignment and
Progress
(c) The National Development Plan
Outcome 5: NDP Alignment and
Progress - A skilled and capable
workforce
(d) The National Development Plan
Outcome 6: An efficient,
competitive and responsive
economic infrastructure
network
(e) The National Development Plan
Outcome 7: NDP alignment and
progress Rural Development
(f) The National Development Plan
Outcome 8: Human Settlements
Alignment and Progress
(g) The National Development Plan
Outcome 10: Protect and
Enhance Our Environmental
Assets and Natural Resources
1st Quarter QEB: April-
June
2nd Quarter QEB: July-
September
3rd Quarter QEB:
October-December
4th Quarter QEB
1. ESKOM Appropriations Bill
2. Briefing Note on withdrawal
of UIF reduction (2015/16)
3. Input on Rates and Monetary
Amounts Amendment Bill
(2015/16)
4. Parliament and the
Engendered Budget
5. Analysis of State Owned
Enterprises
5. Base Erosion, Profit Shifting
and Transfer Mispricing
(BEPS)
6. Report on the Sustainability
of South Africa’s Social
Grants System
8. The involvement of Public
Accounts Committees (PAC’s)
in the budget process
9. Department of Police
Budget Analysis
9

10. 1.6 Primary Clients
Standing Committee on Appropriations:
National Assembly (NA)
Select Committee on Appropriations:
National Council of Provinces (NCOP)
Standing Committee on Finance:
National Assembly (NA)
Select Committee on Finance: National
Council of Provinces (NCOP)
PBO RSA Primary
Clients as per Money
Bills Act
10

11. 1.7 Strategic Focus Areas: Next 5 years
• During the next five years, the Parliamentary Budget
Office will provide:
1. Reports on the national Budget and Medium Term Budget
Policy Statement
2. Economic, policy and fiscal briefs
3. Research reports on request by Parliament
4. Forecast robustness reports
5. Technical capacitation of MP’s
1. Formal: Partnership with academic institutions to develop a formal programme
for MP’s on fiscal and monetary matters, focus on oversight
2. In-house capacitation of MP’s through the production of informative products,
presentation during Committee seatings.
3. Dedicated technical support to Parliamentary Committees during the oversight
visits of Committees. 11

12. 2. Comparison to OECD Principles
1. LOCAL OWNERSHIP
A. Broad national ownership
• Political support within Parliament
– Strong political support from all political parties within Parliament
– Political parties across the political spectrum see the benefits and
importance of a having a PBO
– Regular positive feedback received from MP’s
• Political support from the Executive
– Strong political support and buy-in from the Executive arm of the State.
– cordial relations with all arms of the State & other organs of government
– broad national ownership, commitment and consensus exists from all the
three Arms of the State.
12

13. INDEPENDENCE AND NON-
PARTISANSHIP (cnt)
• Legislated independence
– The independence of the PBO RSA is legislated in Section 15(1) of the Money Bills
Act. Section 15(1) codifies that the main objective of the PBO is to provide
independent, objective and professional advice and analysis to Parliament on
matters related to the Budget and other money Bills.
• Legislated authority to report against inappropriate interference in the
affairs of the PBO RSA
– In terms of section 15(9) of the Act, the Director is obliged to report to Parliament any
inappropriate political or executive interference to prevent the office from providing
independent, objective and professional advice to Parliament on matters related to
the Budget and other money Bills
• Non-partisan technical support provided to Parliamentary Committees
– The PBO RSA provides independent, objective, professional advice and analysis and
non-partisan support to Parliament.
– The multiparty Parliamentary Committee system as well as the work method the
office has developed insulates the office from potential partisanship 13

14. INDEPENDENCE AND NON-
PARTISANSHIP (cnt)
• PBO RSA Workflow & Work-method
•Consideration of
money Bills
•Multi-party
Committee identify
specific analysis and
research required for
decision making
NA and NCOP Finance
and Appropriations
Committees
•Submit formal
written request to
the Director of the
PBO RSA
Committee
Chairpersons
•Director PBO
considers specific
requests from
Committees
•Formal written
acknowledgement
letter transmitted by
Director to
Committee Chair
Director PBO
Parliamentary
Budget Office
•Formulate Terms
of Reference
•Research &
Analyse
•Submit findings
to Committee
(electronically
&/or
presentations)
•Build capacity
•Facilitate
discussions
Parliamentary
Budget Office
14

15. 2.2 Professional profile of PBO RSA
leadership: Director PBO
• Section 15(5) of the Money Bills Act the Director of the PBO RSA must possess
the requisite experience, qualifications and leadership skills to manage the
Parliamentary Budget Office and to ensure that the office performs the legislated
functions set forth in section 15(2) and (3) of the Act.
• The PBO is headed by a Director, Professor MIGM Jahed who is responsible for
the strategic leadership and overall management of the Parliamentary Budget
Office RSA. Professor Jahed was appointed as the founding Director of the PBO
during the 4th Parliament in June 2013. The Director PBO (Prof Jahed) leads and
manages and is assisted by a team of experienced technical specialists in the
Economics, Policy and Public Finance Divisions of the PBO.
• Professor Jahed holds a PhD in Economics and has obtained experience and
expertise in economic development, economic policy formulation and public
and development management.
• Professor Jahed, was initially seconded to Parliament by the Development Bank
of Southern Africa to assist with the establishment of the Parliamentary Budget
Office. 15

16. 2.3 Term of Office of the Director PBO RSA
• The position of the Director RSA is a full time five (5) year performance based position.
• The Director is appointed in accordance with Section 15 (5) of the Money Bills Act which reads
as follows:
– The Finance and Appropriations Committees, from both Houses, must recommend to the respective Houses, a
person with the requisite experience, qualifications and leadership skills for the position of Director. The
recommendation must include the condition of service, as well as the salary and allowance of the Director, which
must take into account the knowledge and experience of the person and substantially be the same as those of the
top rank of the public service.
• Linkage of position of Director to electoral cycle: No, the position of the current Director is not
linked to the electoral cycle because the current electoral cycle spans from 2014 to 2019, while
the Director was appointed almost a year before the current electoral cycle.
• Term limits and the number of terms that the Director of the PBO RSA may serve is not
specified in legislation i.e. Money Bills Act.
– The general rule of thumb that is that all highest ranking public officials in South Africa except for few cases are
appointed for a five (5) years performance-based period which can be extended subject to satisfactory performance.
• Process of dismissal of the Director PBO is codified in Section 15(8) of the Money Bills Act
prescribes the following. Full process is captured under the Notes section
• The Director may be removed from office only on-
– the ground of misconduct, incapacity or incompetence
– a finding to that effect by a joint sitting of the committees on finance and appropriations of each House; and
– the adoption by both Houses of a resolution calling for that person’s removal.
16

17. 2.4 Full Freedom to Hire and Dismiss Staff
• In terms of section 15(12) of the Money Bills Act, the
Director PBO RSA has the legislated power to appoint
deputy directors and personnel with the requisite
experience and qualifications as may be necessary to
carry out the duties and functions of the Parliamentary
Budget Office.
• Director does not have the full freedom to hire staff due
to the current administrative configuration of Parliament.
The Director PBO RSA is presently engaging with the
relevant administrative authorities in Parliament to
address this situation
17

18. 2.5 Appointment of PBO RSA staff
• Appointment of all PBO staff members is in line with
standard prescripts in the South African public service.
• PBO staff members are appointed according to HR
policies and protocols of Parliamentary Services.
• All PBO staff members were selected through open
competition based on merit and technical competence
and without reference to political affiliation as such is
prohibited by the Constitution in South Africa.
• Conditions of employment and service of PBO RSA staff
members is on par with that of the Parliamentary Service.
18

19. 2.6Location of the Offices of the
PBO RSA
• To further enhance independence, the location of
the IFI offices should be physically separate from
both the executive and the legislative offices.
– The Offices of the PBO RSA are physically detached
from the main Parliamentary precinct. The offices are
located directly opposite the main entrance of the
Parliamentary precinct.
19

20. 3. LEGISLATIVE MANDATE
• Legislative mandate
– Money Bills Amendment Procedure and Related Matters Act, 2009 (Act No. 9 of 2009)
– Section 15 of the Act establishes the PBO RSA
• Core functions of the PBO RSA: Section 15(2) of the Act
• (a) Review and analyse the documentation tabled in Parliament by the Executive
(Minister of Finance) in terms of the Money Bills Amendment Procedure and Related
Matters Act, 2009 (Act no. 9 of 2009)
• (b) Analyse and advise on proposed amendments to the fiscal framework, the Division
of Revenue Bill, and money Bills and on policy proposals with budgetary implications
• (c) Monitor and synthesise matters on reports tabled and adopted in a House with
budgetary implications, with particular emphasis on reports by other committees
• (d) Keep abreast of policy debates and developments in key expenditure and revenue
areas
• (e) Monitor and report on potential unfunded mandates arising out of legislative,
policy or budgetary proposals
• (f) Conduct research on request by the Houses, other committees or members of
Parliament on matters related to the budget and other money Bills. 20

21. 3.1 Who may request reports and
analysis?
• Core Clients: Finance and Appropriations Committees, both Houses.
• Any other Parliamentary Committee
• Work method: PBO RSA provides demand driven (work request
emanating from Committees) & supply driven work (PBO initiated
work) to Parliamentary Committees.
Standing Committee on Appropriations:
National Assembly (NA)
Select Committee on Appropriations:
National Council of Provinces (NCOP)
Standing Committee on Finance:
National Assembly (NA)
Select Committee on Finance:
National Council of Provinces (NCOP)
PBO's Primary Clients as
per the Money Bills Act
21

22. 4.RESOURCES
• Budget allocation: legislated and codified in section 15(10)
of the Money Bills Act.
• PBO budget allocation received from Parliamentary Services
• Publications of the allocated budget: the PBO budget is not
published and treated in the same manner as the budgets
of other independent bodies, such as audit offices in order
to ensure the independence of the office.
• Multiannual funding commitments may further enhance
IFIs independence and provide additional protection from
political pressure: this is not applicable, no multiannual
funding commitments and ring-fenced to the PBO RSA
22

23. 5. RELATIONSHIP WITH THE
LEGISLATURE
• 5.1 PBO RSA Accountability Lines
• The Director PBO is required in terms of section 15(11) of the Money Bills Act to
account to Parliament on the activities of the Parliamentary Budget Office.
• (a) Submission of IFI reports to parliament in time to contribute to relevant
legislative debate: Yes, PBO RSA adheres to this principle. The Money Bills Act
compels the PBO RSA to adhere to this principle.
• (b) Appearance of IFI leadership or senior staff before the budget committee
(or equivalent) to provide responses to parliamentary questions. Yes, PBO RSA
adheres to this principle.
• (c) Parliamentary scrutiny of the IFI budget. Yes, Parliamentary scrutiny of the
PBO RSA budget is effected by Parliamentary Services.
• (d) A role for parliament’s budget committee (or equivalent) in IFI leadership
appointments and dismissals. Yes, legislated provision. The Finance and
Appropriations Committees, both Houses, have a legislated role in the
appointment and dismissal of the Director of the PBO RSA. The procedures are
set forth in sections 15 (5) and 15(8) of the Money Bills Act.
23

24. PBO RSA Accountability Lines: Diagram
24

25. PBO RSA Responsibility Lines (cnt)
• 5.2. The role of the IFI vis-à-vis parliament’s budget committee (or equivalent),
other committees, and individual members in terms of requests for analysis
should be clearly established in legislation. Preferably, the IFI should consider
requests from committees and sub-committees rather than individual members
or political parties. This is particularly relevant for those IFIs established under the
jurisdiction of the legislature.
• The legislative functions of the PBO RSA and those of the Finance and
Appropriations Committees from both Houses are clearly prescribed in the
Money Bills Act.
• The PBO RSA considers requests transmitted to the office from Parliamentary
Committees but not from individual Members of Parliament. The process was
explained at length in the above section, slide 12.
25

26. 6. ACCESS TO INFORMATION
• Constitutional power of Parliament: In terms of the Constitution of the Republic
of South Africa, the Executive is constitutionally obliged to report and account to
Parliament on its activities. Parliament RSA therefore has the constitutional
power to obtain access to information from the Executive or any
person/institution as prescribed by section 56 of the Constitution.
• No special legislated provision: There is no special provision in the Money Bills
Act to explicitly prescribe that the PBO RSA should be granted access to a
particular set of information/documents as this is already prescribed for in the
Constitution.
• PBO has readily available access to information held by the Executive.
• No formal MOUs: Presently, the PBO RSA does not have any formal
memorandums of understanding or protocols with government departments
with regards to access to information. Importantly, the information obtained by
the PBO from government departments is obtained at no cost. Finally, the PBO
RSA does not have any challenges with regards to accessing information from
government departments.
26

27. ACCESS TO INFORMATION (cnt)
• 6.2. Any restrictions on access to government information should also be clearly
defined in legislation. Appropriate safeguards may be put in place as regards
protection of privacy (for example, taxpayer confidentiality) and of sensitive
information in the areas of national defence and security.
• There are no restrictions on access to government information
requested by the PBO save for universal protocols relating to the
treatment of tax information.
• The PBO RSA treats all information under its authority with the
necessary confidentially. The analytical reports are prepared for
Parliamentary Committees, seatings which are open to the
public. However, the PBO RSA has not developed an internal
standard operating procedure or confidentially clause with
regards to the treatment of confidential information.
27

28. 7. TRANSPARENCY
• In terms of the Constitution of the Republic of South Africa, all Parliamentary
Committee seatings are open to the public, media and everyone.
• South Africa has an open budget process which allows all interested
stakeholders in society to participate in and make inputs to the budget process.
By extension, the technical analytical work conducted by the PBO RSA especially
the analysis of the Main Budget Analysis and the Medium Term Budget Policy
Statement (MTBPS) is open to the public because (1) the PBO RSA is required to
present on its findings in an open Parliamentary Committee seating where all
members of the public and media are present; (2) All Committee seatings of
Parliament are recorded and can be made available to any member of the public;
(3) A civil society interest known as the Parliamentary Monitoring Group (PMG),
uploads almost all Committee meetings on its website.
• Webpage: The PBO RSA has a dedicated webpage which is used to upload the
work of the office for public consumption and scrutiny.
– http://www.parliament.gov.za/live/content.php?Category_ID=817
• Media tracking: no media tracking of PBO activities is conducted.
• Internal media coverage within Parliament: Yes.
• Radio & TV Interviews: none.
28

29. TRANSPARENCY (cnt)
• The transparency is further strengthened by the fact that the
PBO circulates its work to ALL Chairpersons of Parliamentary
Committees, Executive Leadership of Parliament, Senior
Parliamentary Administration personnel and other related
parties in Parliament.
• External circulation of PBO products: It must be emphasised
though the direct external distribution of PBO RSA work is
almost non-existent except for the circulation of work through
the PBO RSA webpage a
• Financial affairs of the PBO RSA are scrutinised by the
independently by the Finance and Audit Offices from
Parliamentary Services 29

30. TRANSPARENCY (cnt)
• Publication of the full account of the underlying data and
methodology
• In producing its outputs the PBO RSA follows a research based and academic
writing approach. A team leader selects members of the team that conduct
research and analysis on the required output. Once research is conducted
comprehensive reports are submitted to the respective Committee Chairs and
subsequently supplemented with a further presentation from the PBO to the rest
of the committee members. In this way the PBO is able to provide information to
its clients with the ultimate goal of capacitating Committee members to enable
members to make informed decisions on pertinent matters. All the technical
reports published by the PBO RSA have a full account of the underlying data and
methodology used to substantiate findings made thereinto.
• Opportunity to present PBO work in Parliamentary Committees: The leadership
of the PBO, Director PBO RSA and his TEAM, are provided with the opportunity at
all material times to present on the work of the PBO during Parliamentary
Committee seatings of the Finance and Appropriations Committee including
other ad-hoc Committees. 30

31. TRANSPARENCY (cnt)
7.3. The release dates of major reports and analysis should be formally
established, especially in order to co-ordinate them with the release of relevant
government reports and analysis.
Yes, PBO RSA Complies with this principle.
• The PBO RSA prepares pre and post analysis of the Main Budget and the Medium Term Budget
Policy Statement and this is synchronised with the tabling of the main budget by National
Treasury in Parliament. The pre-budget analysis provides Parliamentary Committees with a
review of revenue collection, expenditure and borrowing in the first 9 months of the financial
year. Different scenarios were developed for the estimation of revenue and expenditure
outcomes for the 2015/16 financial year. These scenarios formed the basis for further budget
estimates for the 2016/17 financial year. These scenarios provided Parliamentary Committees
with estimated changes to the fiscal frameworks as presented in the 2015 Medium Term
Budget Policy Statement.
• Subsequent to the tabling of the national budget, a comprehensive analysis of the 2016 tabled
budget is presented to a joint seating of the four core committees. This analysis includes an
evaluation of the fiscal framework including the budget deficit and debt. Further analysis will
include a comparison of the estimated 2015 medium term expenditure framework (MTEF) with
the estimated 2016 MTEF. The main changes will be assessed to determine the alignment of
the allocation to policy priorities.
31

32. TRANSPARENCY (cnt)
• 7.4. IFIs should release their reports and analysis, on matters relating to their
core on-going mandate on economic and fiscal issues, in their own name.
Including through their own website.
Yes, PBO RSA Complies with this principle.
• The PBO RSA subscribes to this principle as all the reports and analysis produced
by the office since establishment have been produced explicitly under the name
of the “Parliamentary Budget Office”.
• The PBO RSA has a dedicated webpage but not an independent website which is
used to upload the work of the office for public consumption and scrutiny. The
PBO RSA webpage is managed by the ICT division which falls under Parliamentary
Services. The PBO submits its completed products to the ICT division for
uploading. The webpage is incorporated as a sub-tree in the main Parliamentary
website.
• There has been no interference with what the PBO RSA can upload to the
webpage thus far.
32

33. 8. COMMUNICATIONS
• Development of effective communication channels from the outset, especially with the media, civil
society, and other stakeholders
• Since establishment, the PBO RSA has established solid relations with a wide range of stakeholders
for branding, information assimilation purposes and most significantly to explain to various
stakeholders about what a PBO is all about and what the legislative mandate of the office is.
PBO
Stakeholders
Parliament
Civil Society
Formations &
NGO's
Labour
formations
Business
Research &
Academic
Institutions
International
*FORA
*Other PBO's
Government
33

34. 9. EXTERNAL EVALUATION
• 9.1. IFIs should develop a mechanism for external evaluation of
their work – to be conducted by local or international experts.
This may take several forms: review of selected pieces of work;
annual evaluation of the quality of analysis; a permanent advisory
panel or board; or peer review by an IFI in another country.
• No external evaluation was ever conducted since establishment,
office fairly young: The PBO RSA since establishment has not
developed a mechanism for external evaluation let alone been
subjected to any form of external evaluation of the work of the PBO
RSA has produced since establishment in 2013. Perhaps, the PBO
RSA can learn best practices from other offices which have already
undergone processes of external evaluation and customise such to
suit the South African context.
34

35. Questions
• Questions & Answers
35

36. Thank you
Professor MIGM Jahed: Director
Mr AT Monnakgotla: Office Manager
LOCATION:
103-107 Plein Street
Parliament Towers
4th Floor
36