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