Monitoring and Evaluation Overview

/in /by

In this article, we’ll look at the importance of monitoring and evaluation (M&E) and cover various examples of its implementation in public management. We will also look at several examples within the South African context, including the government bodies and legislation that have been set up specifically for improving M&E.

After this article, you will have a far greater understanding of how monitoring and evaluation is used in the field of public management. You’ll also see how it directly affects the quality of the country’s public services. Should you choose to enter this field, you will work directly towards improving the lives and livelihoods of all South Africans. Wits offers an online postgraduate diploma in public management that specialises in M&E (PDMPM).

If you have a specific question about M&E’s meaning, please use the outlines below to find your answer. Otherwise please read on as we answer the question of what is monitoring and evaluation.

STUDY A PDMPM IN M&E WITH WITS

Wits offers a fully online Post Graduate Diploma in Public Administration specialising in Monitoring and Evaluation.

  • Duration: 18 months
  • Admission requirements: Bachelor’s degree plus two years of work experience
  • Course fees payable in instalments with financial assistance available
  • Course consists of eight modules

Similar Wits online courses:

Apply Now

 

Article outline

 

FAQs

 

Public Management – Monitoring & Evaluation Overview

 

Monitoring and evaluation is an important part of public management. Although it was often neglected by governments in the past, it has become a critical part of the functioning of a democratic society. Monitoring and evaluating the outcomes of a project or public campaign allows managers to determine how successful it has been in achieving its desired goals.

Done correctly, this ensures efficient spending towards achieving whatever the desired outcomes are of a project, programme or policy intervention. Therefore monitoring and evaluation training is integral to effective service delivery. Neglecting any of the steps of monitoring and evaluation can be detrimental to the communities served by public management and governance officials.

Importance of monitoring and evaluation

 

As mentioned, without monitoring and evaluation, policymakers will not be able to tell if their policies are successful or not in achieving their desired outcomes.

By applying a process of monitoring and evaluation, organisations or governments are able to determine how successful a project or programme actually is. Failure to implement a monitoring and evaluation plan can result in a massive waste of money, time and effort.

Recognition of the importance of monitoring and evaluation has increased greatly among governments across the world over recent decades. The increased use of M&E has played a beneficial role in increasing the effectiveness of programmes and minimising wasteful public expenditure.

A stringent M&E process also leads to better transparency and accountability, which are increasingly sought-after within both democratic governments and the operations of non-governmental organisations.

 

Definition of monitoring

 

Monitoring is the act of observing a process, situation or thing. It also involves a further element of reporting back on what was observed. It is also synonymous with surveillance.

Examples of monitoring can be taken from many different fields. A weather station is one type of monitor that records and reports on weather conditions. A security camera used for surveillance observes an area and feeds that image back to a central control room or records the footage for future reference. United Nations election monitors are involved in monitoring of an entirely different kind, but they too fall under this definition.

As part of the monitoring and evaluation process, it is imperative that there is accurate collection of the appropriate information. In much the same way that a security camera blocked by a tree branch or that has been tilted to look skywards, renders a security system useless.

Within the context of the South African government’s M&E national framework, the Department of Planning, Monitoring and Evaluation defines monitoring as follows: “Monitoring involves the continuous collecting, analysing and reporting of data in a way that supports effective management. Monitoring aims to provide managers with regular (and real-time) feedback on progress in implementation and results and early indicators of problems that need to be corrected. It usually reports on actual performance against what was planned or expected.”

 

Definition of evaluation

 

Evaluation forms the second part of the M&E process. It entails the analysis of the information that was gathered in the monitoring process. Evaluation also requires a set of criteria or parameters by which the information must be assessed. What those criteria are will be determined by the goals of that particular project, process or policy.

Simpler, more quantitative evaluation can be used to rank different things. For example, the 10 fastest athletes over 100m at an event could be ranked by evaluating race times. Property investors might instead evaluate property sales figures to work out which suburbs are experiencing the fastest growth in a city.

Qualitative evaluation can become far more complex. Qualitative analysis is by nature much more subjective and the criteria need to be very carefully set out. For example, it is unlikely that entertainment magazine lists of the best looking Hollywood celebrities would be the same. This would not be the case in sports magazine lists of the fastest athletes or highest scorers in a particular game.

The Department of Planning, Monitoring and Evaluation defines evaluation as follows: “The systematic collection and objective analysis of evidence on public policies, programmes, projects, functions and organisations to assess issues such as relevance, performance (effectiveness and efficiency), value for money, impact and sustainability, and recommend ways forward.”

 

Components of monitoring and evaluation frameworks

 

Any monitoring and evaluation framework needs to be specifically crafted so that it aligns with the broader M&E plan. There is no one-size-fits-all approach or template as each case will have its own specific goals, requirements and challenges. There are however certain elements that any good M&E plan includes.

The United Nations Public Administration Network developed a detailed guide on M&E in which it provides the following comprehensive list of what should be included in an M&E framework:

  • The objectives of the M&E plan
  • The criteria of successful interventions
  • What is to be monitored and evaluated
  • The activities needed to monitor and evaluate
  • Who is responsible for carrying out the monitoring and evaluation
  • When the different M&E activities will take place
  • What methods will be used
  • What resources are required and where they will be used
  • Relevant risks and assumptions when conducting M&E activities
  • Reporting tools and mechanisms to apply the results of M&E

 

Government’s policy framework – monitoring and evaluation system

 

South Africa has an entire government department dedicated to the planning, monitoring and evaluation of government policies and public management. This department is aptly named the Department of Planning, Monitoring and Evaluation (DPME). In 2019 the government published a revised National Policy Framework that sets out the requirements for government entities to implement effective and reliable monitoring and evaluation processes.

While there is a department dedicated to M&E, government entities are also subject to further M&E requirements. Through the application of a performance-based budgeting process, government entities are required to account for their expenditure and are allocated a budget based on their performance.

There are a number of laws that cover this, with the Public Finance Management Act applying to most government bodies, including national and provincial government structures. At the local government level, the Municipal Systems Act (MSA) requires that all municipalities monitor and evaluate their developmental performances and interventions.

Under the law, every municipality must implement a performance management system that contains key performance indicators “as a yardstick for measuring performance, including outcomes and impacts, with regard to the municipality’s development priorities and objectives”.

 

National Treasury’s framework

 

The Revised Framework for Strategic Plans and Annual Performance Plans was issued by the Department of Planning, Monitoring and Evaluation in 2020. It outlines the roles and responsibilities of local and national government departments, including the National Treasury.

The Treasury’s reporting responsibilities are laid out in table 8.3 (page 60) of the framework document. As the custodian of the country’s financial performance reporting system, the treasury is expected to establish systems for monitoring implementation of government budget allocations.

It is also expected to issue guidelines on preparing annual reports and carry out oversight of all reported information. As part of the oversight, it is expected to analyse government expenditure reports and provide feedback as well as to participate in structures to provide oversight of government performance information.

Lastly, the National Treasury has the responsibility to support government institutions to use monitoring findings during the budget process.

 

South African Statistics Quality Assurance Framework

 

Statistics South Africa (Stats SA) is responsible for gathering and compiling a plethora of statistical information about the country. Some of the better known surveys it carries out are the national census, quarterly labour force survey and the business confidence index.

In order to carry out its responsibilities effectively, it has formulated a set of standards, classifications and procedures that all government departments must apply when producing statistical data. These criteria and procedures for evaluating official statistics are contained in the South African Statistics Quality Assurance Framework (SASQAF).

The first edition of SASQAF was published in 2009, but it was difficult for data producers to apply SASQAF as it was originally intended. As a result, Stats SA developed the SASQAF operational standards and guidelines to assist data producers with producing data that meets the quality criteria.

Following extensive consultation and input from several stakeholders, a second edition of SASQAF was published in 2010. At the time of writing, this second edition stands as the official framework by which South African departments must provide and report on their statistical information.

 

Public Governments Evaluations Framework

 

Earlier we spoke of how the Revised Framework for Strategic Plans and Annual Performance Plans issued by the Department of Planning, Monitoring and Evaluation relates to the National Treasury specifically. The framework builds on several previous policies, frameworks and plans set up by the government. Public management policy makers need to apply the revised framework’s principles when developing short and medium term plans.

The revised framework works in conjunction with the following older government frameworks related to planning, performance monitoring, reporting and evaluation within public management:

  • Policy Framework for the Government-wide Monitoring and Evaluation System, 2005
  • Framework for Managing Programme Performance Information, 2007
  • National Development Plan 2030: Our Future – Make it Work, 2012
  • Medium Term Strategic Framework
  • Budget Prioritisation Framework
  • National Evaluation Policy Framework, 2011
  • Spatial Development Frameworks
  • United Nations Sustainable Development Goals
  • Agenda 2063
  • South African Statistical Quality Assessment Framework, 2010
  • Standard for Infrastructure Procurement and Delivery Management, 2015
  • International Infrastructure Management Manual
  • National Immovable Asset Maintenance Management Standard, 2017

As you can see by the length of this list, government departments and policy makers need to consider myriad factors when developing plans. This places much responsibility for accountability on government departments and you can read more about what is a public sector agency’s role in M&E in a previous article.

 

What is the purpose of the Department of Public Service and Administration (DPSA)

 

As the name implies, the Department of Public Service and Administration (DPSA) is responsible for public service and administration. More precisely, the DPSA’s goal, as stated by its strategic vision, is to ensure “a professional, productive and responsive public service and administration”.

As the national government’s public administration page explains, “the DPSA is at the centre of government”. It is responsible for ensuring that service delivery and government initiatives are responsive to the needs of citizens.

How it achieves this is detailed in both a constitutional and a legislative mandate, which we will get to shortly. More broadly, it has four key objectives as set out in its strategic mission statement.

  • Establish norms and standards to ensure that the state machinery functions optimally and that such norms and standards are adhered to.
  • Implement interventions to maintain a compliant and functioning public service.
  • Promote an ethical public service through programmes, systems, frameworks and structures that detect, prevent and combat corruption.
  • Contribute towards improved public administration in Africa and internationally through dialogue and sharing of best practices.

 

The DPSA constitutional and legislative mandate

 

The DPSA is governed by both the Constitution and specific legislature. As a result, its role and responsibility is governed by both a constitutional mandate and a legislative mandate. Put very simply, the constitutional mandate sets out how responsibilities should be carried out, while the legislative mandate provides the details of what responsibilities should be carried out.

The Constitution provides the basic values and principles to which the public service should adhere to, while the Public Service Act mandates that the department and the minister are responsible for establishing various norms and standards within the public service.

 

DPSA constitutional mandate

 

The Constitution requires that public management and administration must be governed by the democratic values and principles enshrined in the Constitution, including the following principles:

  • A high standard of professional ethics must be promoted and maintained.
  • Efficient, economic and effective use of resources must be promoted.
  • Public administration must be development–oriented.
  • Services must be provided impartially, fairly, equitably and without bias.
  • People’s needs must be responded to and the public must be encouraged to participate in policy making.
  • Public administration must be accountable.
  • Transparency must be fostered by providing the public with timely, accessible and accurate information.
  • Good human-resources management and career-development practices, to examine human potential, must be cultivated.
  • Public administration must be broadly representative of the South African people, with employment and personnel management practices based on ability, objectivity, fairness, and the need to redress the imbalances of the past to achieve broad representation.

 

DPSA legislative mandate

 

While the constitutional mandate sets out the values and principles, the legislative mandate goes into more detail on what the department is actually responsible for.

As set out in the Public Service Act of 1994, the minister and the department are responsible for establishing norms and standards relating to:

  • The functions of the public service
  • Organisational structures and establishments of departments and other organisational and governance arrangements in the public service
  • Labour relations, conditions of service and other employment practices for employees
  • The Health and wellness of employees; information management
  • Electronic government in the public service
  • Integrity, ethics, conduct and anti-corruption
  • Transformation, reform, innovation and any other matter to improve the effectiveness and efficiency of the public service and its service delivery to the public

 

The DPSA role in monitoring and evaluation

 

In a 2011 presentation of the monitoring and evaluation framework for the public service, the DPSA outlined the importance of M&E, the progress that had been achieved thus far, and its own role in the process.

The DPSA has a specific focus on the public service, meaning that its role in monitoring and evaluation is centred around this aspect of government. Although the DPSA is responsible for public services in the country and relies extensively on M&E in its operations, there is another government department responsible for M&E.

The Department of Planning, Monitoring and Evaluation (previously the Department of Performance Monitoring and Evaluation) reports directly to the Office of the Presidency. It has been tasked with the mandate to “coordinate government planning, monitoring and evaluation to address poverty, unemployment and inequality”.

 

Public expenditure and performance-based budgeting

 

Globally, performance-based budgeting has been strongly advocated and supported by the Organisation for Economic Co-operation and Development (OECD). As part of that advocacy, the OECD has developed a guide for performance budgeting.

In that guide, the OECD noted the rationale of performance-based budgeting as “part of efforts to improve decision making by moving the focus away from inputs (‘how much money will I get?’) towards measurable results (‘what can I achieve with this money?’).

It also notes that performance budgeting is intended to improve public sector efficiency and performance. Through performance-based budgeting, governments are able to assess whether or not public expenditure is being correctly allocated and ensure that money is not wasted on ineffective programmes or projects.

The OECD is an intergovernmental organisation made up of 38 countries with some of the largest economies in the world. Although South Africa is not a full member of the OECD, the country was made one of five key partners in 2007.

 

Government budgets and their contents

 

Governments need to work within a budget in their provision of services. This applies to national, provincial and local government. As with any budget, income needs to be balanced against the planned expenditure.

The South African Parliament has produced a comprehensive budget manual in which it outlines the various components that go into the annual budget.

At the level of national government, the national budget is detailed in several official documents, which are are: the Budget Speech, Estimates of National Expenditure (ENE), Division of Revenue Bill, the Budget Review, the Budgetary Review and Recommendations Report (BRRR) and the Medium Term Budget Policy Statement.

 

SA government budget documents

 

The Budget Speech is delivered by the finance minister in February of each year, just ahead of the new financial year in which that budget will apply. You can view the 2022 Budget Speech here.

The Estimates of National Expenditure (ENE) sets out planned government spending over the next three years. It gives a comprehensive breakdown of priorities, spending plans and service delivery commitments across all spheres of government. You can view the full 2022 ENE here.

The Division of Revenue Bill is published each year to show how government revenue is allocated across the country’s various government departments as well as how it is shared between the provinces and municipalities. You can view the 2022 Division of Revenue Bill here.

The Budget Review document covers the policy context of the budget. It highlights economic policy, fiscal policy, tax policy, division of revenue and medium-term priorities. You can view the 2022 Budget Review here.

To see examples of all the different Budgetary Review and Recommendations Reports (BRRRs) for different spheres of government, the Parliamentary Monitoring Group has a comprehensive list of all BRRRs from 2021 back. To read more about how these are put together, you can read the PMG’s BRRR explainer page.

 

The sources of government funds or revenue

 

The most obvious source of government revenue is through tax, in its various forms. However government revenues refer to all receipts the government gets, including taxes, custom duties, revenue from state-owned enterprises, capital revenues and foreign aid.

According to an OECD report in 2017, on average 60% of the revenues raised by governments across OECD countries came from taxes and 25% from net social contributions, another 8% came from sales and 7% from grants and other revenues.

For a comprehensive list of all the different taxes charged by the South African Revenue Services, you can look at this page on its website explaining how it collects taxes for the National Revenue Fund.

 

Raising national, provincial and municipal revenue

 

The most common way to increase government revenue is through the raising of taxes. This can be done at several different levels, with annual adjustments to income tax level brackets for example.

A few years ago, in April 2018, the government also increased the rate for VAT (value added tax) from 14% to 15%. At the time, the finance minister was reported to have said that this increase, together with income tax increases, would earn the fiscus an additional R36-billion per year.

At the local government level, the primary way that municipalities can increase revenue is through property taxes, rates and municipal service charges. These charges usually include water and refuse collection. In some cases, municipalities also charge for provision of electricity.

International ratings agency Moody’s provides a monthly update on revenue and expenditure by South Africa and other national governments.

 

Budget policy statement

 

In South Africa we do not have an official budget policy statement, however the term is sometimes used in reference to the Medium-Term Budget Policy Statement. Also sometimes referred to as the mid-term budget policy statement, this statement is presented by the finance minister about three months before the Budget Speech.

It differs from the annual budget in that it focuses on a longer time frame of three years rather than just one year. It provides a broader view of the government’s policy and goals. It also attempts to forecast what spending and revenue will be as well as how the broader global macroeconomic situation is likely to change.

 

FAQs

 

Here are answers to many common questions about the fields of public management and administration and monitoring and evaluation.

 

What are monitoring and evaluation frameworks

 

A monitoring and evaluation framework is a crucial part of the wider M&E plan. Monitoring and evaluation frameworks are used to assess how well an M&E plan is succeeding in achieving its goals.

An M&E framework must be carefully thought out so that it properly aligns with the goals of the plan. Any good M&E framework should clearly define the plan’s goal and the steps that need to be taken to get to that goal.

The framework needs to provide a clear understanding of how different factors within the monitoring and evaluation plan relate to one another and how the overall plan will be carried out. It should also have predefined indicators that mark progress over the course of the plan, which we describe in more detail further down.

You can read also about how to set up an M&E plan, which we covered in a previous article.

 

What qualification do you need for monitoring and evaluation?

 

Monitoring and evaluation is not a regulated profession and there isn’t a specific route that needs to be taken. That said, you are likely to require at least a bachelor’s degree to obtain a job in the field, along with work experience in public management.

Generally however, you are likely to need a postgraduate qualification to qualify for most M&E jobs, especially lage international organisations such as the United Nations or World Bank. Economics, political or social sciences and quantitative or statistical analysis are common degrees for entering this field.

If you want to study a monitoring and evaluation course in South Africa, the Wits online Postgraduate Diploma in Public Management in the field of Monitoring and Evaluation (M&E) is one way that you can build on your existing bachelor’s degree and work experience to qualify for more senior roles.

 

Can I study and work while doing monitoring and evaluation?

 

Yes, you certainly can. Whether working in monitoring and evaluation, or studying monitoring and evaluation, study and work is possible with a flexible online programme.

Much like all the programmes offered by Wits Online, the Postgraduate Diploma in Public Management in the field of Monitoring and Evaluation (M&E) programme was designed specifically to give working professionals the flexibility to carry out their studies while they continue with their full-time jobs.

 

What are key indicators in monitoring and evaluation?

 

Key indicators are used to mark progress or milestones within an M&E plan. The key indicators of any monitoring and evaluation plan will depend on the project or programme’s objectives.

Indicators for a monitoring and evaluation plan need to be measurable and should be directly related to the plan’s objectives. To be able to measure the impact of an intervention, baseline indicators need to be recorded at the start of a programme so that progress can be matched against that baseline.

There are two types of indicators used in M&E plans, trigger indicators that activate a change in operations and process indicators, which we explain in more detail below on the process indicator FAQ.

 

How do you develop indicators for monitoring and evaluation?

 

When setting up an M&E plan and M&E framework, very careful thought needs to go into the selection of key indicators that can be accurately measured and that will accurately reflect the progress of a programme or project.

When developing an M&E plan’s indicators, it is important to receive input from all those directly involved in the project. This provides a greater understanding of expectations, from the staff on the ground through to those assessing results and accounting for expenditure.

 

What is a process indicator in monitoring and evaluation

 

A process indicator is an indicator that is used to assess a task, project or programme’s progress in achieving its objectives. Process indicators are used by the management of an organisation to evaluate how well a specific objective is being achieved.

Through using process indicators, managers can objectively compare different projects or programmes to determine which are the most efficient.

 

What are the techniques of monitoring and evaluation?

 

There are three main techniques or approaches for monitoring and evaluation. These approaches reflect changes in thinking and the evolution of the field of monitoring and evaluation to respond to changing societal needs and expectations.

 

Results-oriented approach

The first of these is the results-oriented approach to monitoring and evaluation. This is the oldest and most traditional approach to M&E. A results-oriented approach entails measuring how well a project or plan has succeeded in achieving its objectives.

 

Constructivist approach

In their 1989 book Fourth Generation Evaluation, authors Egon Guba and Yvonna Lincoln built upon the results-orientated approach to M&E. They saw the strictly results-oriented approach as limited as it ignored other human, political, social and cultural factors.

Instead, they proposed a constructivist approach to monitoring and evaluation that considers these other factors and looks at the dynamics between the plan’s evaluators and its stakeholders. Guba and Lincoln argued that the constructivist approach promotes the empowerment of stakeholders and a collective learning process.

 

Reflexive approach

The latest popular technique or approach to monitoring and evaluation is a reflexive approach. Jan-Peter Voß, Dierk Bauknecht and René Kemp proposed this method in 2006. It has gained attention from academics and policymakers for its adaptive nature and ability to look at problems from a broader perspective. Where a results-oriented approach looks at results after they’ve happened, the reflexive approach uses real-time M&E and allows for plans to adjust as things evolve.

These are the three broad techniques for setting up an M&E plan, but any single M&E plan might make use of various different techniques for both the monitoring stage and the evaluation stage of the process. This is covered in more detail in our previous article where we talk about monitoring and evaluation methods.

 

What is a performance budget in public finance?

 

A performance budget goes beyond merely balancing revenue and expenditure. Performance budgets are common in public finance as they reduce wasteful expenditure and allocate resources to where it best meets the government’s service delivery goals.

Performance-based budgeting uses monitoring and evaluation to measure performance and progress and then allocate resources to those operations that have the best performance.

South Africa uses performance-based budgeting with the goal of improving efficiency by allocating resources to where they are most effective in achieving the desired outcomes.

 

What is the basis of a performance-based budget?

 

The fundamental basis of a performance-based budget is to improve efficiency and allocate the available resources to get the best results. Put simply, to get the most bang for the buck.

In commercial enterprise, performance is mostly related to profit and earnings growth. Performance in public finance entails a host of public service goals, from providing education and health care to maintaining roads and air quality.

 

How are public sector budgets used for performance evaluation?

 

Public sector budgets are used in performance evaluation as they provide a comprehensive breakdown of how much was spent and on what it was spent for that year. Performance-based budgeting allocates available budget to where it will be spent the most effectively.

Public sector budgets are used to provide evaluators with the financial information that they would need to look at when comparing the performance of public projects against what they cost to carry out.

 

Who does the PFMA apply to?

 

Under chapter 1, section 3 of the Public Finance Management Act it says that the Act applies to all government departments, public entities (as listed by two separate sections), constitutional institutions and the provincial legislatures.

Notably, the PFMA does not apply to municipal and local government, which is governed by the Local Government: Municipal Finance Management Act.

 

What is the purpose of the PFMA?

 

The stated objective of the Public Finance Management Act (PFMA) is covered in chapter 1, section 2 of the Public Finance Management Act.

According to the wording of the legislature, the purpose of the PFMA is to “secure transparency, accountability, and sound management of the revenue, expenditure, assets and liabilities of the institutions to which this Act applies”.

 

How does budgeting affect the performance of the government?

 

While a government’s performance can be affected by many internal and external factors, a well-managed public finance budget will go a long way towards supporting good government performance. Monitoring and evaluation of all government operations is used in performance-based budgets, which seek the maximum performance from the resources available.

When a government or government department has access to a larger budget, it is able to do far more and should be more effective than with a smaller budget. This can create something of a feedback loop when performance-based budgeting is applied. This is because performance-based budgeting allocates a great share of funds to areas that perform the best. Therefore a government programme that is already performing well may find itself with additional resources to further improve performance. Conversely, a poorly performing programme may find itself with even less budget the following year, further reducing its effectiveness.

While this can be effective for a commercial enterprise, performance is not the sole factor in allocating public funds. Government budgets also need to consider the needs of the public. It can often be the case that failed projects result in even greater need and even greater budget allocations to address that need. In South Africa, Eskom and SAA are two examples of poorly performing state-owned entities that have required larger and larger budgets to maintain their operations.

 

Why is performance budgeting important

 

Performance budgeting ensures that money is not wasted. Within public finance, this also aims to provide a safeguard against corruption and other wasteful state expenditure.

Performance-based budgeting increases efficiency and also promotes accountability within departments or organisations. South Africa uses performance budgeting in its allocation of funds to departments and in its public management policies and programmes.

In a parliamentary handbook published in May 2021, The Public Finance Management Act (PFMA) and the role of Parliament in the Oversight of the Budget, it says the four objectives of the budget are to achieve fiscal sustainability, allocative efficiency, value for money and service delivery. Performance-based budgeting is used to optimally achieve all four of those goals.

 

How do you prepare a performance budget

 

Preparing a performance budget requires measurable indicators that mark the progress towards the desired outcome.

M&E plays a core role in the preparation and maintenance of a performance budget. As with any budget, income and expenses need to be balanced.

These indicators then provide a means to measurably compare the performance between different operations or projects. Of course not all operations can be measured by the same indicators.

 

What are the functions of the National Revenue Fund

 

All money collected by the state through taxes, duties and levies is paid into the National Revenue Fund. The South African Revenue Service (Sars) also collects money on behalf of other departments, which is then paid into the National Revenue Fund.

Chapter 2 of the Public Finance Management Act goes into greater detail on the National Revenue Fund and the responsibilities that the National Treasury has as the custodian of the fund.

As stated in Chapter 2 of the PFMA: “The National Treasury must establish appropriate and effective cash management and banking arrangements for the National Revenue Fund.” The Treasury is also expected to ensure that there is always enough money in the National Revenue Fund to cover all expected costs.

 

What are the conditions before funds can be withdrawn from the National Revenue Fund?

 

The rules relating to the management of South Africa’s National Revenue Fund are detailed in chapter 13 of the Constitution.

In the section covering the National Revenue Fund, the constitution states that: “Money may be withdrawn from the National Revenue Fund only (a) in terms of an appropriation by an Act of Parliament; or (b) as a direct charge against the National Revenue Fund.”

The more recent Public Finance Management Act goes into further details on the National Revenue Fund, with part 2 of chapter 2 covering the details related to deposits and withdrawals, withdrawal of exclusions and the use of funds in emergency situations.

Under the PFMA, Sars can withdraw funds under the following conditions:

  • To refund any tax, levy or duty credits or any other charges in connection with taxes, levies or duties.
  • To make other refunds approved by the National Treasury.
  • To transfer to a member of the South African Customs Union any money collected on its behalf.

The National Treasury is also expected to transfer all funds collected on behalf of provincial governments into each province’s Provincial Revenue Fund.

 

Who manages South Africa’s finances?

 

The responsibility of managing South Africa’s finances falls mostly under the National Treasury. The South African Reserve Bank (SARB) also plays an important role in managing the country’s finances, but its role is more focused on the value of the rand and interest rates.

So while the SARB plays a large role, it has a broader economic focus. The National Treasury has a more direct role on the country’s finances, being in charge of things like the annual budget which determines financial revenue and expenditure.

The National Treasury is headed by the minister of finance, which sets the role apart from most other ministers that head a specific department. In a sense, it could be said that the national treasury fulfils the role that the (non-existent) department of finance would play.

Outline of Business Administration of Enterprises

/in /by

A business enterprise is any operation or venture that provides goods or services for the purpose of turning a profit. This focus on earning a profit is what sets business enterprises apart from the public sector and non-profit organisations.

Regardless of what the enterprise does to make a profit, all enterprises require at least some administration. As a result, it is important that whoever is administering the enterprise has the necessary skills to make the enterprise run efficiently and profitably.

In this article, we will look at different types of enterprises and the skills that business managers need to carry out this important role of business management or business administration.

As well as covering all the administration functions in a business, we’ll also look at popular business courses such as the Postgraduate Diploma in Business Management and Postgraduate Diploma in Business Administration.

Study a Postgraduate Diploma in Business Administration (PDBA) with Wits Online

Wits offers a fully online PDBA

Similar Wits online courses:

Apply Now

 

Article outline

 

Administration of Different Types of Enterprises

 

Good business managers are needed for all types of enterprise. This is true regardless of the size of the enterprise and applies to large multinational companies as well as small enterprises such as a spaza shop or a freelance operation.

There are however a number of different types of enterprise and the administrative needs and tax obligations are different for each. We’ll go through the different types of enterprise, starting with the smallest.

 

Business Administration of a Sole Proprietorship

 

A sole proprietorship is the smallest type of enterprise and it includes people who work as freelancers. A sole proprietorship is always owned by a single person and that person is solely responsible for the company and any liabilities it might incur.

While a sole proprietorship can operate under a different name to the owner, it does not exist as a separate legal entity to the owner. It has the advantage of having a minimum of administrative requirements, but it also places the owner at greater risk than some more complex enterprise.

Should the enterprise be sued, the owner could stand to lose money and be forced to sell possessions to pay out a claim, even if they were earned through some other means.

The South African Revenue Service (SARS) requires that all income from a sole proprietorship is declared and that these earnings are declared together with any other income the individual earns.

 

Business Administration of a Partnership

 

A partnership is one level up from a sole partnership and involves more than one person. Like a sole proprietorship, a partnership does not exist as a separate legal entity to the individuals.

Partnerships also have very little in the way of administrative requirements and the partners are required to declare their share of the partnership’s earnings together with any other income to SARS every year.

The partners also remain legally liable for the business, but it could be seen as a little bit less risky than a sole proprietorship because this risk is shared between the partners. On the downside, the benefits and profits are also shared between the partners so on balance the risks and rewards are very similar to that of a sole proprietorship.

 

Business Administration of a Private Limited Companies (Ltd.)

 

The next level up is a private limited company. Private limited companies are also called proprietary limited companies and are recognisable by the abbreviations (Pty) Ltd at the end of the name. These exist as separate legal entities to the owners and come with far more administrative requirements.

In South Africa a private limited company needs to register as a taxpayer with SARS and also needs to register its name with the Companies and Intellectual Property Commission (CIPC). The name will also need to be approved by the CIPC before the company can begin trading. The name must be unique and not in breach of any copyrights or trademarks.

There are far more administrative requirements than for a sole proprietorship or partnership as the company will need to declare all earnings to SARS as a separate entity from its owners. The benefit of a company is that the actual owners (called shareholders) can change without impacting on the company’s operations or legal obligations.

To see more details on the liabilities and obligations of a private company in South Africa, you can read more on the SARS website’s private company page.

 

Business Administration of a Public Limited Companies (PLC)

 

A public limited company is a type of company specific to the United Kingdom, Ireland and some commonwealth countries. They are required to have the abbreviation PLC or plc at the end of their name. Unlike a (Pty) Ltd, PLCs have to exceed a certain size threshold.

They can be listed on a stock exchange or owned privately by individual shareholders or other companies.

PLCs are not recognised in South Africa.

 

Management and administration of specific organisations

 

Now that we’ve covered some of the common types of enterprise, we will look at the business administration requirements of a few different types of enterprise.

 

Administration aspects of an educational institution

 

 

Educational institutions range vastly in size, with large public universities like the University of the Witwatersrand at the top end of the spectrum and institutions like small private art schools at the lower end.

While the size and scope varies, the basic administrative needs are largely similar. Like any other enterprise, they require all manner of business administration to ensure legal and tax compliance. They also require business managers to ensure that the enterprise does not run at a loss.

In South Africa, there is a special process to register an educational institution and there are several special requirements above what are required for a regular commercial enterprise.

The government requires that all of its programmes be registered with the Department of Higher Education and Training, accredited by the Higher Education Quality Committee (HEQC) of the Council on Higher Education (CHE) and registered on the National Qualifications Framework (NQF) by the South African Qualifications Authority (SAQA).

 

Academic administration of learning institutions

 

Administrators of an institution of learning also have certain tasks that are more specific to the field of education. For institutions providing legally recognised qualifications, administrators need to ensure that the courses offered are registered with the South African Qualifications Authority and that the course curriculums meet the required standards.

For example, Wits Online’s Postgraduate Diploma in Business Administration (PDBA) has been registered with SAQA and you can view the certificate here .

 

Administrative titles of higher institutions of learning

 

Institutions of higher learning have their own sets of titles for the people in charge. While most enterprises are headed by chief executives or possibly presidents and chairpersons, universities are headed by a chancellor and vice-chancellor.

Naming conventions and roles do differ from country to country, but here in South Africa the role of a chancellor is largely a ceremonial position. While the chancellor can be seen as a figurehead for the university, it is the vice-chancellor who plays an active role in the university’s academic and business administration.

For an easy comparison, the chancellor holds a similar position to the king of England, while the vice-chancellor acts similarly to the prime minister and wields more influence and administrative power.

For an example of the titles and roles of the administrators in charge of an institute of higher learning, you can look at Wits University’s officers of the university page. It lists the following administrative titles:

  • Chancellor
  • Vice-chancellor and principal
  • Chairman of council
  • Senior deputy vice-chancellor (academic)
  • Deputy vice-chancellor (research and innovation)
  • Deputy vice-chancellor (systems and operations)
  • Registrar
  • Dean of student affairs
  • President of convocation

Below this top tier there are then also multiple faculty deans, who are responsible for specific faculties. At Wits there are five faculties and these are Commerce, Law and Management; Engineering and the Built Environment; Health; Science; and Humanities.

Each faculty is in turn split into many different departments, with each department having their own heads of department, who are supported by departmental administrators.

 

Administration aspects of an investment business

 

When we first defined an enterprise at the start of this article, we defined it as an operation that produces or trades goods or services for profit. Investment businesses are a type of enterprise that earns profit through investments. In a sense, the service it provides is the capital it invests into a business or asset.

Rules, regulations and administrative obligations for investment businesses differ from country to country and they can take many different forms. One option that you can take in South Africa is to register a financial services co-operative.

 

Administration aspects of the restaurant business

 

Like any commercial enterprise, a restaurant operates to make profit. Poor administration and a lack of business management could close the business.

The business manager of the restaurant has to keep track of many different administrative aspects. These include stock management, payroll and staff issues, marketing of the venue to attract customers, accounting and tax returns, cost control and supplier payments.

 

Administration of a logistic business

 

Logistics businesses have all the usual administrative requirements, but they require a very high degree of real-time administration. Logistics businesses have to keep track of an enormous number of moving parts.

Administrators or business managers of logistics businesses need to ensure that vehicles are carrying the right cargo and going to the correct place. They also need to ensure the cargo arrives when it is expected, while also having infrastructure in place to deal with emergencies and unexpected delays or obstructions.

 

Business administration diplomas’ and academic degrees

 

The importance of business and business management skills is reflected in the large number of business administration courses that offer business qualifications.

Here are some common business administration degrees and diplomas.

 

BBA – Bachelor’s in business administration

 

A bachelors in administration provides a good foundation in business management and administration. Business managers with ambitions to handle the business administration of larger and consequently more profitable and better paying enterprises will find that competition is fierce.

To get to the top of the managerial hierarchy, ambitious business managers will likely want to earn a postgraduate business administration qualification.

 

Online versus part-time syllabus

 

With Wits Online, online study is indeed a part time study environment, but this does not mean that all online studies are part time. Wits Online’s courses are designed to be done entirely in your own time. Lectures are pre recorded, allowing them to be watched at any available time.

This is not always the case with live online lectures set at specific times, which could very easily conflict with your work obligations.

 

Local and international accreditations

 

Whether you study online or in class, you will want to be sure that the qualification you are working towards is properly accredited. Accreditation requirements vary between countries and only a limited number of qualifications are globally recognised.

Wits Online’s business qualifications are underpinned by the University of the Witwatersrand’s specialised business school, known as Wits Business School or WBS for short.

WBS is a member or partner of several prestigious international business associations. It is part of the Partnership in International Management, the Association of African Business Schools, the South African Business Schools Association and the Association of MBAs.

Aside from these business school-specific memberships, WBS is also registered with the Department of Higher Education and Training, accredited by the Higher Education Quality Committee of the Council on Higher Education and registered on the National Qualifications Framework (NQF) by the South African Qualifications Authority (SAQA).

 

BSBA – Bachelor of Science in Business Administration

 

A Bachelor of Science in Business Administration is a business course that is rooted in a science degree. Although this is not a degree that is offered in South Africa, there are several overseas universities offering it.

 

PDBA – Postgraduate Diploma in Business Administration

 

A Postgraduate Diploma in Business Administration (PDBA) is a postgraduate academic qualification that also requires applicants to have additional work experience. It is aimed at business managers that are looking to further advance their career. Some institutions offer a similar course to the PDBA, but call it a postgraduate diploma in business management (PDBM).

To apply for the Wits Online PDBA, applicants require a Bachelor’s or other three-year degree at NQF Level 7 as well as a minimum of two years’ work experience.

The course usually takes 22 months to complete if done full-time, but this can be sped up if studying full time and doing two modules at once.

 

DBA – Diploma in Business Administration

 

There are not any recognised diplomas in business administration that are recognised in South Africa. There is however a diploma in business management that provides a NQF level 5 qualification. This diploma is offered by a few different colleges in South Africa and you can view the details on the Diploma in Business Management SAQA certificate.

For business administration specifically, there are also several certificates and courses that are at lower NQF levels, such as the Further Education and Training Certificate: Business Administration Services at NQF level 4.

 

FAQs

 

Here are the answers to some common questions relating to business management, business and information administration and qualifications such as a postgraduate diploma in business administration.

 

What is commercial and industrial enterprise?

As we said at the start of this article about business management, an enterprise is a venture or operation that trades in goods or services to make a profit.

An industrial enterprise is focussed on manufacturing one or more products for profit. Commercial enterprises are any enterprise involved in a commercial venture.

What does commercial enterprise do?

The term commercial enterprise encompasses any operation or activity that is carried out for profit. As such, the term is a little bit redundant as it carries the same definition as an enterprise.

Commercial enterprises do not include government organisations or non-profit organisations, which have a primary goal of providing services to the public rather than a focus on earning a profit.

What do managers do all day?

Business managers are the people at the top of any enterprise. They are responsible for business administration.

Business managers spend their days with the many tasks of business management. This entails planning, organising and overseeing all of the businesses operations.

What skills does a business manager need?

Business managers need to be adept at business administration and management. They need to plan and oversee all the operations of the enterprise. This is a large responsibility and they will have to draw on many skills learnt either through experience or a good business management qualification.

For an idea of the full range of skills needed, you can take a look at the business administration modules in the online Postgraduate Diploma in Business Administration course.

How can I be a good business manager?

The skills to be a good business manager can be learnt. The best way to do so is through a business management course.

What course is best for business?

Deciding on the best business course depends on several factors. Business schools are highly competitive and there are many different courses to choose from. Business is also a very wide term and there are multiple areas of specialisation, each of which require different skill sets.

Some of the areas of specialisation include business law, marketing, accounting, financial management and entrepreneurship for starting up a new enterprise. Your choice will also be determined by your current qualifications as well as the purpose for which you plan to use your new qualification.

While something like a Harvard MBA is certainly sought after, this comes at a great cost. If you are looking to gain the business skills that you need to start up your own business, you may find that it would serve you far better to opt for a more affordable course. You will be more likely to make a success of your new venture if you are not saddled with the $1 million to $2 million in student debt that a topline international MBA could cost.

The Wits PDBA will give you all of the business fundamentals, but at a fraction of the cost. This means that you will be better placed to get start up capital for your business and will not hinder you with such a crippling student loan.

What is the best business major?

As with the question about the best business course above, deciding on the best business major would depend on what you intend to do with your qualification. If you are considering a business major, then it is likely that you are looking at a bachelor degree of some sort.

Jobs portal site Indeed.com offers this list of some of the best-paying business majors.

Is a Postgraduate Diploma in Business Administration good?

A Postgraduate Diploma in Business Administration is a popular qualification choice for managers who already have a degree. The naming convention does sometimes vary. At Wits Online it is shortened to PDBA, but some also refer to it as a PGDip Business Administration.

How long is a postgraduate diploma?

The Department of Higher Education and Training together with the South African Qualifications Authority (SAQA) require that a postgraduate diploma consists of 120 credits. This is compared with, for example, a three-year bachelor’s degree that consists of 360 credits.

If studied full time, this means the diploma can be completed within one year. Wits Online’s postgraduate diplomas are designed to be completed in 22 months if studied part-time. Students also have the option to accelerate this by doing two modules at once to complete it within 11 months.

Traditionally, South African universities close for most of December and only reopen again in January, meaning that an academic year is in fact about 11 months rather than a full 12 months.

What is a Postgraduate Diploma equivalent to?

A postgraduate diploma is a level 8 National Qualification Framework (NQF) qualification. This puts it on the same level as an Honours degree or some four-year professional bachelor degrees. It is also seen as equivalent to the highest level occupational certificate available under the Occupational Qualifications Sub-Framework.

It is one level below a master’s degree and one level above both a three-year bachelor’s degree or an advanced diploma.

You can view a table of all the different NQF levels and their respective qualifications on the SAQA website here.

Which business courses have more job opportunities?

As with the questions over what is the best course for business or which is the best business major, the answer is situation specific.

Jobs listing portal Indeed.com provides some interesting insights into business degrees here. It also provides a ranking of the best business majors and their related salaries here.

 

Study a PDBA with Wits online

 

You can study a postgraduate diploma in Business Administration online in your spare time with Wits. This gives you all the accrediation and qualifications of a contact course with Wits Business School, but with flexibility to study at your convenience.

The online content is the same as that of the traditional contact part-time PDBA offered by WBS, but all lessons are pre-recorded meaning that you can carry out your studies in the evenings or over your weekends.

You can read more about the Wits online PDBA here.

 

Advance your business career with us!

 

The Wits Online PDBA is designed to help business managers advance their careers by gaining valuable business management knowledge.

The online business course not only teaches the essentials of business and information administration, it also provides skills to help Improve decision making and produce true business leaders who are able to excel in their fields.

Learn more about how the online PDBA can help advance your career here.

 

Online administration qualification for postgraduates

 

The Wits Online PDBA is aimed at people who already have a degree and at least two years work experience. Completing your PDBA with Wits Online will also grant you two credits towards an MBA with Wits Business School should you wish to take your studies even further. Successful graduates of the PDBA will get credits for the Management & Financial Accounting and Strategy modules, although this may be subject to obtaining a specific minimum mark in those modules.

If you meet the admissions criteria for postgraduate studies, you can get started on your postgraduate business qualification in no more than two months at any given time in the year. To find out more, please go here.