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BRIEFING ON EXIT STRATEGY OF THE MIIU

BRIEFING ON EXIT STRATEGY OF THE MIIU. Presented to Parliamentary Portfolio Committee 16 MARCH 2006. Background. Cabinet Memorandum No. 14 of 1997 created MIIU as short-term arrangement to be wound up in five years (2003).

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BRIEFING ON EXIT STRATEGY OF THE MIIU

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  1. BRIEFING ON EXIT STRATEGY OF THE MIIU Presented to Parliamentary Portfolio Committee 16 MARCH 2006

  2. Background • Cabinet Memorandum No. 14 of 1997 created MIIU as short-term arrangement to be wound up in five years (2003). • This term was extended by Cabinet Memorandum 4A of 2002 for an additional three years, to 31 March 2006.

  3. Confirmation of the Exit • At a board meeting of 24 June 2005, the directors resolved to proceed with exit plan • The Minister of DPLG in turn instructed MIIU to proceed with the wind up in a letter dated October 2005

  4. The Exit Plan • Background • Project Activity • Management Contract with DBSA • USAID-funded Contracts • Other Donor Issues • Risk Analysis • dplg • National Treasury • Knowledge and Information Management • Communication Strategy • Financial Reporting • Closure Housekeeping • Succession Arrangements • Action Plan

  5. Exit from Project Activity • At the beginning of the financial year 2005/6, the pipeline of active MSP projects had 84 active projects. • In preparation for closure this pipeline has been down-sized to a current 21 projects

  6. Exit from the Management Contract with DBSA • Over 8 years the DBSA has provided MIIU with: • Treasury and Accounting function • Employment contracts & HR services • Office rental • Administrative and IT services • This service is to be terminated with effect from 31 March 2006

  7. Exit from USAID-funded Contracts The United States Agency for International Development (USAID) has provided the following: • Expatriate staff contracts – termination due on 21 April 2006 • Assets in the form of printers, photocopiers, digital camera, etc – to be ceded to DPLG by 31 March 2006 • Commitment Agreement for DCA implementation – to be terminated by 31 March 2006, and the function to be transferred by USAID to a new implementing agent

  8. Exit from other Donor Relationships • Department for International Development (DFID) Commitment Agreement – all obligations to be concluded by 31 March 2006 • Mega-Tech Funding – technical support to stop by 31 March 2006 • Cities Alliance (World Bank) – the final transfer of ad-hoc grant funding has been received by MIIU

  9. Role of Executive Authority: Department of Provincial and Local Government MIIU is a PFMA Schedule 3A public entity (of dplg). The annual transfer of the MIIU grant from National Treasury has been via the vote of the dplg. There are no further allocations in the MTEF cycle beginning in financial year 2006/7. Responsibilities of dplg in winding up MIIU: • de-list MIIU as a public entity • disengage the Board of directors • disengage company members • take cession of assets, liabilities, accountability and institutional memory of MIIU as from 1 April 2006 • De-registration of the company from the Registrar of Companies

  10. Knowledge and Information Management MIIU has published a book “A Journey of Partnership”, that chronicles the history of the entity and illustrates some flagship projects. The book was launched on 23 February 2006, and is to be distributed en mass around 20 March 2006. As a supplement to the book, a reference CD pack archiving best-practice tools will become available on 20 March 2006. This CD will be distributed to all 284 municipalities, as well as to DPLG for further disribution. Other information for transfer to DPLG • Projects on the pipeline • Archived project deliverables • General Institutional memory

  11. Communication Strategy • Public pronouncement by dplg as executive authority has not happened • Communication from MIIU has been at project level to: municipalities engaged consultants PADCO, USAID, DFID • Website content to be taken up into a link to DPLG website

  12. Caretaker Arrangement: 1 April 2006- 31 August 2006 The project management by MIIU will terminate on 31 March 2006, but projects still requiring a few more months to conclude completely will be transferred to a caretaker arrangement until 31 August 2006. Caretaker arrangement will also accommodate final PFMA obligations of final audit, annual reporting, transfer of surplus to National Treasury, etc. So far we have proposed the caretaker arrangement to be outsourced to a DBSA agency, for a payable fee. The DPLG is still in discussions around what the final arrangement should be.

  13. Financial Report as at 31 March 2006 Total unspent income : R8.27m Outstanding operational and capital expenditure: R7.15m Operational budget: R0.90m Capital expenditure: R6.26m Anticipated surplus: R1.12m

  14. Acknowledgements • The Board of Directors for their unremunerated services to guide MIIU strategy and ensure good corporate governance • DPLG for the mandate and ownership of MIIU • DBSA for the accounting/treasury function and logistical support • National Treasury for its commitment to the advancement of PPPs, and for its key role in securing continuity of the MIIU function for the benefit of local government • Local consultants for serving municipalities on behalf of MIIU • The USAID and DFID for vital donor support • The staff of MIIU for excellent ongoing performance Thanks to all who have shared our success

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