OVERVIEW OF THE PRESENTATION
• Introduction• Sources of SAMDI Revenue• Graphic Presentation of Revenue by Source• Background: SAMDI• Brief Historical Background of Cost Recovery• Aim of Cost Recovery• Goals of Cost Recovery• Status of Cost Recovery• Graphic presentation of the Financial Status• Challenges• The Way Forward
INTRODUCTION
SAMDI’s vision is:the creation of a self sustaining Organisational Transformation Centre of Excellence for Public Service Delivery
SOURCES OF SAMDI’s REVENUE
Cost Recovery
Donor Funding
Voted Funds
0
10000
20000
30000
40000
50000
60000
R'000
1 2 3 4 5 6
FINANCIAL YEARS (where 1 = 2000/01 and 6 = 2005/06)
SAMDI TOTAL REVENUE
Cost Recovery Donor funding Augmented Voted funds
BACKGROUND: SAMDI• Before 1994 training and development in the
Public Service was provided by the Public Service Training Institute (PSTI), which was then changed to the South African Management Development Institute (SAMDI)
• Training and Development was offered free of charge by this body, and focused on technical skills
• In October 1999, SAMDI became a schedule 1 Department, with its own Director-General accountable to the Minister for Public Service and Administration.
BACKGROUND: SAMDI (continued)
• Concerns were raised that SAMDI should compete with other providers and not to enjoy monopoly like the PSTI– This concern is also reflected in the White
Paper on Public Service Education and Training
– The rationale was that competition would lead to quality service and programmes
• Cabinet then mandated SAMDI to embark on Cost Recovery
BRIEF HISTORICAL BACKGROUND ON COST
RECOVERY• Cost recovery strategy was initiated during
1999• National Treasury approved the Trade
Account in 2001• National Treasury approved the initial tariffs
in 2001• Shadow invoicing commenced during
October 2001• Implementation of cost recovery from 1
April 2002• Tariffs amended in October 2002 (More
market related)
COST RECOVERY
• Aim: To support SAMDI business through the recovery of costs on services rendered through fair and recognised outsourcing processes
GOALS OF COST RECOVERY
Short Term • To recover portion/part of costs• Annually increase the portion of
costs to be recovered
Long Term• To recover all costs( Break-even)• To be sustainable
STATUS OF COST RECOVERY
• Total revenue – April 2002 to March 2003 – R 6 778 947
• 1036 Invoices issued to the amount of – R 13 049 089
• Total debtors outstanding – R 4 628 111• Tariffs revised during October 2002
– Inclusion of consultation fees– Inclusion of professional management fees
Graphic presentation of the financial status
Total Invoices
Total Revenue
Total Debtors
CHALLENGES• Implementation and monitoring of the
Cost Recovery Strategy and Financing of training and development programmes– Willingness of departments to pay for
services– Shrinking budget lines versus cost of training
and development– Enforcement of payment for training and
development services rendered– Expensive Leadership and Management
Development Programmes – Cost of external service providers
– Government priority programmes versus cost recovery
CHALLENGES Continue
• Aggressive marketing of SAMDI products and services to departments
• Systems for Cost Recovery– GAAP compliant, Booking, Invoicing,
Certification and Weekly financial reporting• Management of debtors• Capacity to handle the number of invoices
issued• Capacity to handle the follow up of debtors• To achieve an un-qualified audit report• Access to skills development levy
THE WAY FORWARD
• The strategic plan for SAMDI• Structure linked to the strategic plan• Revisit the strategic marketing plan• Consolidation of the funding
structure
THANK YOU
Please visit SAMDI’s website atwww.samdi.gov.za