Conditional Grant Business Plan
Training Process
National Treasury
August 2007
DAY - ONE
Technical Assistance Unit
1
Objectives
• Understanding of broad policy
framework governing Conditional
Grants
• Understand alignment of Budget
Cycle and Conditional Grant Cycle
• Understand the application and use
of the RBM in the preparation of
business plans
• Develop business plans (draft) as a
learning process
2
Two Day Agenda
• DAY One
 DORA requirements
Budget cycle, Conditional Grant Cycle and
Alignment Model (where relevant)
Introduction to RBM concepts and terminology
• DAY two
Develop business plans as a learning process
focusing on:
Logic model – Grant Profile
Performance Measurement Framework
Risk Management Plan
3
Learning approach
Lectures
To share essential concepts.
Group Exercises
Learn by doing – test our ability to apply our knowledge to the
development of actual business plans
Discussions
To link concepts to participants needs, build on participants
experience and offer the opportunity to develop a support network.
Readings
Reference materials (documents and websites) will be made
available to participants to pursue individual learning interests.
Feedback
This is your workshop. We would appreciate feedback so that we
can better meet your interests and needs.
4
Rules of Engagement
• Be open to share experience, ideas,
opinions
• Respect ideas, opinions
• Don’t be afraid to ask questions. We will
either
– Answer it
– Park it
– Refer it to the group
– Research it and answer it later, in group
or off-line
5
ALIGNMENT OF THE BUDGET CYCLE,
CONDITIONAL GRANT CYCLE AND
THE INFRASTRUCTURE DELIVERY
CYCLE
6
MTEF Budget Preparation Cycle and
Conditional Grant Planning Processes
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
Budget Preparation Cycle
31
Aug
Conditional Grant
Planning Processes
1st draft of Business
Plan for next year
Legend:
Input into Budget
Final Budget
APPROVAL
Updated
Business Plan for
next year
Process Linkages
Finalising the Grant
Framework for DoRA
Requirements
Budget Day
Update Budget
MTEC
MinComBud
Cabinet
MTBPS
Budget
Alloc
Letter
10 x 10
Draft Budget
Mid
Feb
Mid
Dec
Alignment of the MTEF Budget Cycle and the
Conditional Grant Cycle
Year 0
Year 1
Year 2
J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M
Draft Budget
Update
Budget
Implement Budget
Final
Budget
Draft Budget
Update
Budget
AFS
AR
Final
Budget
Implement Budget
Draft Budget
Grant
Initiation
Grant
Formulation &
Approval
Update
Budget
Final
Budget
Level 1 Approval: CG approved for coming yr
Implementation
Planning
Year 1:
Implementation,
Monitoring & Reporting
Business
Plan for
Year 2
Year 2:
Implementation,
Monitoring & Reporting
Business
Plan for
Year 3
Legend:
A
Input into Budget
Process Linkages
Budget Allocation
Im
Infrastructure Planning Processes
Strategic
Planning
Process
Needs
•
Supply
•
What infrastructure
is needed to
comply with Policy
direction and
departmental
service plan?
What infrastructure
does the department
have?
Gap
•
What infrastructure
is required?
A
•
Determine
Infrastructure
Options
What options does the
department have?
Alternative
Solutions
•
A
Infrastructure
Plan
•
Infrastructure
Planning
What alternatives to
infrastructure can the
department use?
A
How will the
department deliver
the infrastructure?
MTEF
Budgeting
Process
A
Agreement or Approval
9
In the case where a Conditional Grant contains infrastructure the
Infrastructure Delivery Cycle must be taken into consideration
Year 0
Year 1
Year 2
J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M
Draft Budget
Update
Budget
Implement Budget
Final
Budget
Draft Budget
Update
Budget
AFS
AR
Final
Budget
Implement Budget
Draft Budget
Grant
Formulation &
Approval
Grant
Initiation
Update
Budget
Implementation
Planning
Year 1:
Implementation,
Monitoring & Reporting
Year 2:
Implementation,
Monitoring & Reporting
Business
Plan for
Year 3
Legend:
Final
Budget
Level 1 Approval: CG approved for coming yr
Business
Plan for
Year 2
Infrastructure
Planning
A
Programme
Design
Input into Budget
Project
Design
Project
Tender
Process Linkages
Project
Implementation
Budget Allocation
Im
INTRODUCTION TO RESULTS BASED
MANAGEMENT OR PERFORMANCE
MANAGEMENT
11
Some Key Questions
• How does the cumulative impact of long term
initiatives get measured and reported?
• What is the contribution of the work being
done in terms of the strategic goal?
• How can progress be measured and reported?
• Who needs to get such reports?
• Is government getting value for its money?
• How can interdependencies be managed?
• Can a shared understanding of service
delivery be generated?
12
What is Results-based Management
• Is a comprehensive approach to public
management based on a
client\taxpayer\citizen-centred view
• It focuses on external results (outcomes)
rather than on internal processes to drive
change
• It integrates strategy resources,
performance, measurement, learning and
adjusting to improve decision making
• Results information is used for learning and
decisions making as well as reporting and
accountability
13
Why results-based management (2)
• The expected benefits are better
responses to client\taxpayer\citizen
expectations, particularly with regard to
value for money
• It puts considerable emphasis on defining
and achieving results and development
and improvement
• It facilitates an integrated and coherent
approach to public management with
improved accountability
• Management for results and not by results
– is the key through arrangement of
resources to achieve the outcomes
14
RBM Elements & Solutions
• Results Based Management
assists in setting the stage to
answer these and other questions
• Key elements include;
– The building in of a useful approach
from the beginning of the strategic
process;
– A focus on the results to be achieved;
and
– Ongoing and continuous
15
management over time and up and
down the public sector hierarchy.
Importance in SA?
• Government Wide Monitoring and
Evaluation System (GWM&E)
• Framework for Managing Programme
Performance Information (PIF)
• Both initiatives are using RBM
principles, emphasis is on:
– Accountability and achieving results
– Meeting stakeholder expectations
– Ensuring Value for money
16
RBM Cycle
The developmental results at a societal
level that are the consequence of
achieving specific outcomes
Programme
Management
IMPACTS
What we aim to change?
The medium-term results for specific
beneficiaries that are the consequence
of achieving specific outputs
Influence and
Manage towards
achieving these
results
OUTCOMES
What we wish to achieve?
The final products, or goods and
services produced by the institution
for delivery to the customer
OUTPUTS
What we produce or deliver?
The processes or actions that use a
range of inputs to produce the desired
outputs and ultimately outcomes
ACTIVITIES
Project
Management
Plan, budget,
implement and
monitor
What we do?
The resources that contribute to
the production and delivery of
outputs
What we use to do the work?
INPUTS
NT TAU
17
RBM
Management Framework
Impact
Manage/influence to
achieve these
Outcomes
Outputs
(change in behaviour)
Activities
Project Manage
& Budget for
these
Inputs
(deliverables)
18
RBM
Performance Framework
Impact
Indicator
Outcomes
Indicator
Outputs
Indicator
Activities
Indicator
Inputs
Indicator
There need
to be
indicators of
performance
at all levels
19
RMB
Logical Framework
Impact
Assumptions
Outcomes
Assumptions
Outputs
Assumptions
Activities
Inputs
THEN
AND Assumptions
hold true
IF
20
Managing for Results - Principles
• Focus the dialogue on results at all phases of the
(Programmes & Projects) development process
• Align programming, monitoring, and evaluation
with results
• Keep results measurement and reporting as
simple, cost-effective, and user friendly as
possible
• Manage for, not by, results, by arranging resources
to achieve outcomes
• Use results information for learning and decision
making as well as reporting and accountability
21
Moving from a Focus on Outputs
to a Focus on Outcomes
How we know how well are we doing
WHAT ? HOW ?
INPUT
What we use
to do the work
WHY?
WHO?
ACTIVITIES
OUTPUTS
REACH
OUTCOMES
What we do
What we
produce
Who we
impact
What we
wish to
achieve
Previous Focus
New Focus
Results-Based Management:
Linking Programmes to Strategic
Objectives
•
Emphasises strategic alignment of effort towards results objectives
– linking programmes to strategic objectives
Planning Process
Reporting Process
Strategic Plan
Operational Planning Process
Operational Plan
Unit Work Plan
Employee Work Plan
23
How this is applied in SA
Oversight
by Parliament, provincial legislature or municipal council
Policy development
Identify desired impacts
Assess and adjust
Strategic
planning
INSTITUTION
End-year reporting
Monitor and take
corrective action
national department
provincial department
municipality
public entity
municipal entity
Implementation and
in-year reporting
Specify performance
indicators
Operational
planning and
budgeting
Set targets and
allocate resources
24
Focusing on Results helps…
• Departments to understand the difference
made by their programmes to the
communities they serve
• Departments have increased transparency
and accountability
• Departments to better allocate resources
and better design/adapt programmes and
services to the needs of the people
• Using RBM as a management tool,
– Department will be in a position to learn and
improve their programmes and service delivery
25
Some tools ‘assimilated’ by RBM
• Plans
 State of the Nation address, Budget speech
 Department's strategic plans and operational plans
• Performance measurement/monitoring systems
 GWM&E
 PIF
• Control system
 Performance audit
• HR engagement and accountability
 Performance agreements
 Published public service standards (Batho Pele)
• Programme/Project Design
 Logic model (results chain); Logical Analysis
Framework (logframe);
 Results based management frameworks
 Risk based and audit framework
26
What you need to focus on!!!
Change management
Risk management
Performance management and
reporting
27
Change Management
Necessary to minimise negative impact
due to transition
Performance
Benefits of good change management
New level of
performance
Change
Old level of
performance
Initial impact of change is a
decrease in productivity.
Time
28
Why manage risk?
Fundamental responsibility of (public service)
management!
• Management decisions are generally made in a context of
uncertainty.
• RBM emphasis on accountability in the pursuit of results
requires a thorough identification and understanding of risk in
order to have the appropriate control system in place.
• A proactive stance in risk management not only minimises
probability and incidence of undesirable events, it also fosters
innovation.
• ‘Risk is no longer something to be faced; risk has become a
set of opportunities open to choice.’
Peter L. Bernstein, Against the Gods
29
RBM and Risk
Risk is the uncertainty that surrounds future events & outcomes. It is a
function of the probability and the impact of an event that has the potential to
(negatively) influence the realisation of the organisation’s expected results.
Risk increases over time, as, in a dynamic environment, numerous variables
come into play, many not under any one individual or organisation’s control.
Source: CIDA web site
30
Performance measurement
Is all about…
• Why does the project, programme
exist?
• What do we want to accomplish?
• How are going to deliver the
programme?
• How will we know how well we are
doing?
• What changes do we make to improve
the delivery of the programme?
31
Project Framework
Typical Focus
RBM Focus
Input Activity Output
What
we use
to do
the
work
What we
do
What we
produce
Who is
reached Outcome
Who
Benefits
What
outcomes &
impact we
wish to
achieve.
Performance Measures
Indicators, baselines and targets
32
The RBM cycle – Not a linear
sequence!
Commit
Implement
feedback, adjust
feedback, adjust
Control
Report
feedback, adjust
Improve
33
Introduction to RBM concepts and
terminology
34
Activities vs. Outputs vs.
Outcomes
Activities
“what we do”
Outputs
“what we
produce”
Outcomes
“why we do it”
Describes a collection of functions
(actions, jobs, tasks) that consume
inputs/resources and whose outputs
deliver benefits/impacts to a client.
The direct products and services
generated through processes or
activities.
The effects, benefits or consequences
(impacts) that occur (either in the short,
intermediate, or long-term) due to the
outputs of programs, processes or
activities.
In summary, every Program undertakes Activities
that produce Outputs that contribute to the
achievement of Outcomes.
35
Examples of Activities
Activities “what we do”
Describes a collection of functions (actions, jobs, tasks) that consume inputs/
resources and whose outputs deliver benefits/impacts to a client.
•
•
•
•
•
•
•
•
Conduct research
Publish documents
Provide advice
Contract for services
Respond to enquiries
Draft the business plan
Organize Committee meetings
Organize Committee travel
Note that Activities contain verbs
36
Examples of Outputs
Outputs “what we produce”
The direct products and services generated through processes or activities
without specific reference to their ultimate purpose.
•
•
•
•
•
Research papers
Advice and direction
Service providers obtained and work initiated
Business plan
Committee reports
Note that Outputs contain nouns
37
Examples of Outcomes
Outcomes “why we do it”
The effects, benefits or consequences (impacts) that occur (either in the short,
intermediate, or long-term) due to the outputs of programs, processes or
activities.
•
•
•
•
A secure work environment
Electronic accessibility and equality
Sound management practices (accountability
and reporting framework, people management,
internal communications, technology support)
Representative workforce
Note that Outcomes refer to a changed state of
being and are stated in the present tense.
38
Key Issues to consider when
identifying outcomes
• Are there stated national /sectoral goals
• Have political promises been made that
specify improved performance of the
government
• Do citizens, polling data indicate specific
concerns
• Is authorizing legislation present
• Other; Millennium Development Goals
(MDGs), PoA Objectives
39
Indicators, Standards/Targets
•
Indicators ( The “How”)
A quantitative or qualitative attribute, statistic or parameter that,
tracked over time, provides information on the condition of a
phenomenon.
(e.g. percentage of clients that are satisfied).
•
Standards/Targets (The “How Much”)
Specific quantitative or qualitative goals associated with specific
performance indicators (e.g. 90% client satisfaction).
– Standards imply product and service levels to which an
organization is prepared to commit.
– Targets imply a desired goal that may be more ambitious than a
standard.
In summary, Indicators, Standards and Targets are used to
provide information on how efficiently and effectively the
Program is being managed.
40
Examples of Indicators
Indicators “the how”
A quantitative or qualitative attribute, statistic or parameter that, tracked over time,
provides information on the condition of a phenomenon
•
•
•
•
Cost per unit published
% of total workforce leaving the organization
Time (hours) to respond to a request for service
Level of satisfaction of service users/ providers
41
Examples of Standards/Targets
Standards/Targets (the “How Much”)
Specific quantitative or qualitative goals against which actual outputs or
outcomes will be compared
• 60% of South Africans are aware of housing subsidies
opportunities
• Training cost per new employee is $2,000
• 85% of workforce is satisfied with working conditions,
quality of life
• 99% availability of IT networks
42
Exercise Number 1
RBM Language
43
Results Chain
RESULTS
High
Control
INPUTS
(RESOURCES)
ACTIVITIES
OUTPUTS
OUTCOMES
(IMMEDIATE)
OUTCOMES
(INTERMEDIATE)
Low
Influence
OUTCOMES
(FINAL)
STRATEGIC
OUTCOMES
A Results Chain can include multiple inputs, activities,
outputs or outcomes. There are two types of Results:
Outputs and Outcomes.
44
RBM
Line of Sight
Impact or
Strategic
Outcome
Intermediate
Outcome
Immediate
Outcome
Intermediate
Outcome
Immediate
Outcome
Intermediate
Outcome
Immediate
Outcome
Project Output
Immediate
Outcome
Project Output
Project Output
Activities
Inputs
Project Output
45
Exercise Number 2
Outcomes
46
Exercise Number 3
Identifying indicators related to the
Logic Model
47
Brief Summary
• RBM goes beyond the work we do – it
interrogates the impact this has.
• There is a hierarchical relationship
between outputs and outcomes.
• Each level of this logic must and can be
measured.
• Measurements used for management and
reporting.
• Indicators are not the same up the
hierarchy.
48
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Conditional Grant business plan training process