IMFO CONFERENCE: 12-13 SEPTEMBER 2011

1. IMFO CONFERENCE: 12-13 SEPTEMBER 2011 LGSETA’S ROLE IN “DEEPENING FINANCIAL SUSTAINABILITY” THROUGH TRAINING MR DUMA NKOSI: CHAIRPERSON OF THE LGSETA

2. OPENING AND INTRODUCTORY REMARKS As per my paper submitted.

3. SCOPE AND COVERAGE OF LGSETA In terms of section 9 of the Skills Development Act, the scope of coverage of the LGSETA as determined by the Minister of Higher Education and Training, the following SIC Codes falls within the LGSETA’s scope of coverage. Main scope and coverage explained: • Any utility or agency, wholly or partially owned by a municipality providing local government services under contractors or a municipality • All functions, services and facilities provided by a metropolitan council as determined by 84 (1): (2) and (3) of Act 117 of 1998 – Local Government Municipal Structure Act of 1998 • Category B Municipalities: all functions, services and facilities provided by local council as determined by 84 (1), (2) and (3) of Act 117 of 1998 - Local Government Municipal Structure Act of 1998.

4. SCOPE AND COVERAGE OF LGSETA (Cont). • Category C municipalities: all functions, services and facilities provided by a district council and district area management as per Act 117 as determined by 54 (1), (2) and (3) of Act 117 of 1998 Local government Municipal Structure Act 1998 • Organised local government: an statutory or regulatory body assigned the function as per constitution of RSA, to deal with matters at an executive level within local government. Skills Development Grants must be used solely for Skills Development Interventions and Capacity Building within the local government sector. Municipalities and entities must account for the expenditure of the skills development grants against training conducted, and disclose this expenditure in the Annual Training Report.

5. THE ROLE OF LGSETA IN SKILLS DEVELOPMENT The role can be summarised as follows: • to identify skills needs in the workplace which is done annually through the submission of workplace skills plans; • to provide Local Government employees with opportunities to acquire new skills; • to use their workplaces and facilities to create active learning environments; • to develop their capacity to manage and provide occupation-based learning; • to facilitate new entrants to the labour market with opportunities to learn through exposure to work experience in learnership programmes; • to support occupation-based learning interventions linked to the objectives and mechanisms of the Employment Equity Act, 1998 (Act 55 of 1998); and • to ensure quality occupation-based learning in the workplace.

6. 3. Use policies which exist as enablers as apposed to finding barriers which don’t exist or which are conveniently identified as the reasons for retarding progress. 4. Establish and expand on existing local government finance sustainable collaboration and partnerships, which are focussed on a need to advance local government finance capacity. 5. A commitment to develop ‘joined-up’ Financial skills base and capacity, across a wide range of financial skills that will ensure strong advancement in building capacity for delivery and excellence. . Local Government Finance capacity building challenges • A need exists to move from a state of problem identification based on challenges which are identified and clearly defined to an action driven agenda, which paves the way forward. • These challenges, include amongst others the following: • 1. A clear and unambiguous understanding of local government capacity enhancement constraints through decisive action and support without sacrificing the quality of our services. • 2. Achieve reductions in staff turnover and position local government as an Employer of Choice.

7. The destination – Forward looking solution orientation • The following solution drivers and imperatives can be identified to enhance capacity and skills within the local government finance context: • Reducing high staff turnover through proactive retention strategies and succession planning supported by skills enhancement through training and development initiatives with a vocational orientation. This would include the following, all aimed at enhancing financial skills and competencies in the workplace: • Orientation programmes • Technical and specialised training • Soft skills and managerial training. • To develop systems and processes for key finance retention strategies (ie. career planning, coaching, mentoring and leadership succession - facilitated by an effective performance management system and other talent management interventions in local government). • The implementation of sound monitoring, evaluation and reporting mechanisms which ensure answerability and accountability.

8. Immediate interventions and solution drivers • Development of Organisational Competencies for councillors and officials in Local Government Finance: • Individual capacity • Institutional capacity • Environmental capacity. • Councillor and MMC training and development to enhance role performance and delivery. • Leadership competencies for top management teams (knowledge, skills, behaviour and personal characteristics/attributes). • Management competencies: Senior, middle and supervisory levels. • Functional training. • Role profile clarification (output and competency-based). • Succession Planning. • Career planning. • Executive coaching and mentoring.

9. Immediate Interventions and solution drivers (Cont.) • Integration of these people management systems is the key focus. • Objective is to have employees who are confident about their contribution to the organisation and self manage their achievement of these performance expectations by using participative, user friendly Finance tools and processes.

10. Immediate Interventions and solution drivers (Cont.) Talented current and future employees place a high value on the following elements which need to be reviewed within the context of the following: DEVELOPMENT OPPORTUNITIES AND PERSONAL GROWTH: • Skills enhancement through training, development and capacity building which grow and harvest potential. WORK ENVIRONMENT: • Manager quality, recognition, co-worker quality and empowerment. WORK-LIFE BALANCE: • Business travel, hours, location and vacation. ORGANISATIONAL ENVIRONMENT: • Company reputation, senior team reputation and development reputation.

11. Immediate Interventions and solution drivers (Cont.) • Engaging people through appropriate career development and performance management processes is crucial to helping embed the changes you are seeking in a municipality. • The changing nature of local government services will require different skills and attributes in employees, moving more towards the consultative, proactive and problem solving capabilities and away from the transactional. This may mean that some of your employees will need re-training, further education or to be re-deployed elsewhere. And all your employees will need to understand and assimilate the changes that you propose to make. • The performance management system - and its link with reward and recognition - is one crucial area for development in local government. At a time when cost consciousness and value based management are required, these values need to be embedded in the organisation both through the espoused values and culture of the organisation and also through the behaviours and processes that you employ throughout the employee lifecycle.

12. Immediate Interventions and solution drivers (Cont.) • A properly developed set of competencies that relates to existing and future environment will establish a basis for recruitment, compensation, design training and development plans as well as develop career paths for local government finance functionaries. • Competency models ensure a clear understanding between performance expectations and measures because they define the skills and knowledge necessary to do a job and address behaviors that will have the most direct impact on job performance. A competency model can also be used as a basis for performance appraisal and feedback for developing performance-based culture. • Organisations that make a long-term commitment to the application of competency-based human resource strategies aimed at deepening financial sustainability will benefit from enhanced employee performance, streamlined financial processes and improved service delivery.

13. Conceptual framework to drive financial capacity building solutions going forward

14. Retention Recruitment Development Rewards Work Force Planning Performance The New Employee Compact Sourcing Conceptual framework to drive capacity financial capacity building solutions going forward (Cont.)

15. Concluding remarks In conclusion, the way forward in ensuring efficient and effective local government finance skills and competencies, through training, includes a focus on the following: • Linking organisational strategy to skills requirements. • Understanding what the capacity and skills gaps are through a skills audit. • Developing a strategy to address the gaps in a structured and informed manner, through collaborative and consultative processes between stakeholders. • Evaluate and appoint training providers in collaborative partnerships. • Track and assess training interventions for absolute workplace relevancy. • Provide compliance and management reporting and returns. • Establish a unit or designate a division to drive and manage the process – assess and evaluate. • Provide the training and support to the unit and individuals and monitor and evaluate at the highest level.