CAPACITY THREATS TO THE SUSTAINABILITY AND FINANCIAL VIABILITY OF LOCAL GOVERNMENT

1. CAPACITY THREATS TO THE SUSTAINABILITY AND FINANCIAL VIABILITY OF LOCAL GOVERNMENT 

2. CONTENTS • INTRODUCTION • Achievements • Challenges • BACKGROUND • COGTA • MISA • B2B • Operation Clean Audit • CAPACITY NEEDS TO ENSURE THE SUSTAINABILITY AND FINANCIAL VIABILITY OF LOCAL GOVERNMENT  • CAPACITY CHALLENGES AND THREATS TO THE SUSTAINABILITY AND FINANCIAL VIABILITY OF LOCAL GOVERNMENT  • Providing an Enabling Environment SALGA Colloqium

3. INTRODUCTION SALGA Colloqium

4. KEY ACHIEVEMENTS SALGA Colloqium

5. KEY CHALLENGES SALGA Colloqium

6. BACKGROUND SALGA Colloqium

7. BACK TO BASICS SALGA Colloqium

8. BACK TO BASICS PRINCIPLES The back to basics principles: • Put people and their concerns first and ensure constant contact with communities through effective public participation. • Create conditions for decent living by consistently delivering municipal services of the right quality and standard. • Demonstrate good governance and administration. • Ensure sound financial management and manage resources well. • Build and maintain sound institutional capacity administered and managed by capable staff at all levels. Assessments find • 30% functional • 7% doing well • 32% in distress • 31% so dysfunctional that significant work would be required to assist them to get the basics right. This group has endemic corruption, dysfunctional Councils, no structured community engagement and participation systems, and poor financial management leading to continuous negative audit outcomes. They also had a poor record of basic service delivery even though most of the necessary resources were available. SALGA Colloqium

9. KZN COGTA SALGA Colloqium

10. 2018/2019 TRAINING PLAN SALGA Colloqium

11. MISA SALGA Colloqium

12. OPERATION CLEAN AUDIT SALGA Colloqium

13. AUDITOR GENERAL COMMENTS • Poor financial health of municipalities which includes poor revenue and budget management and the failure to pay creditors, led to 31% of municipalities disclosing that they did not have enough money to continue operating. • Fruitless and wasteful expenditure which increased by 71% from the 2015-2016 financial year due to non-compliance with governance processes at 78% of municipalities. • TTe delivery and maintenance of municipal infrastructure was weakened bythe underspending of grants, delays in project completion, poor quality workmanship, and inadequate monitoring of contractors. In KwaZulu-Natal, in 2015-2016, 20% of achieved clean audits and this dropped to 11% in 2016-2017. The main reason given by the AG for this regression was a failure to deal with weaknesses identified in the 2015-2016 report. Reasons for the accountability failures:  Not improving internal controls or addressing risks • Lack of consequences for poor performance and/or transgressions • Vacancies in key positions and/or appointment of key officials without appropriate skills levels • Poor oversight and weak leadership by councillors • Poor implementation and maintenance of financial and performance management systems • Political infighting at council level • Political interference in the administration • Disregard for controls, good record keeping and legal compliance • Failure to implement audit recommendations • Insufficient support by provincial and national role players SALGA Colloqium

14. CAPACITY NEEDS TO ENSURE THE SUSTAINABILITY AND FINANCIAL VIABILITY OF LOCAL GOVERNMENT SALGA Colloqium

15. DEFINING CAPACITY DEVELOPMENT SALGA Colloqium

16. LG CAPACITY DEVELOPMENT • Capacity means the ability of municipalities to meet their service delivery and development goals through effective and efficient use of resources. • Improving capacity requires the existence of a national legal and policy framework and the necessary financial, infrastructural and other resources, including human resources. • While skills development usually means the instilling and/or improving of technical and job-related skills and knowledge, it can also support capacity building by developing the skills and tools necessary for institutional, community and economic development, such as, the skills to define problems and formulate solutions or the skills to work cooperatively with various stakeholders to achieve goals • The IICBA emphasises the importance of building institutional capacity to ensure improved organisational performance. It emphasises long-term support for and development of institutions. It is of the opinion that neglecting the capacity building of institutions may limit the effectiveness of capacity building programmes for individuals and that a focus on individuals or projects misses the bigger issues that may be facing an organisation and could even undermine the organisation's capacity SALGA Colloqium

17. THREE LEVELS OF CAPACITY SALGA Colloqium

18. IICBA DEFINITION OF CAPACITY SALGA Colloqium

19. OTHER DEFINITIONS OF CAPACITY SALGA Colloqium

20. CAPACITY CHALLENGES AND THREATS TO THE SUSTAINABILITY AND FINANCIAL VIABILITY OF LOCAL GOVERNMENT SALGA Colloqium

21. CHALLENGES AND THREATS SALGA Colloqium

22. RECOMMENDATIONS • Capacity building objectives should be clearly defined • Independent exit evaluations of capacity building programmes should be compulsory. • Capacity-building interventions should coordinate individual and organisational capacity building and in order to do this, should offer not only training but also technical support, business process engineering and change management tools. • Human resource functions in local government should be strengthened and municipalities should be supported in filling critical vacancies with individuals who have the correct skills and knowledge for the post. • Municipal skills development plans and programmes should be monitored to ensure that officials receive training that supports their continued professional development. SALGA Colloqium

23. PROVIDING AN ENABLING ENVIRONMENT According to the 2015 MTSF, municipal performance can be impacted at four levels, that is: • Individual, • Institutional, • Environmental and • Macro-socio-economic levels. The next slide identifies the potential negative impacts of a poor enabling and macro environment on institutional capacity. SALGA Colloqium

24. IMPACTS OF POOR SUPPORT SALGA Colloqium

25. THANK YOU • Ms. H. Khunoethe, MPA UKZN. • Chief Director, Capacity Building Unit, KZN COGTA. • Email: halimak2010@yahoo.com; • Cell: 082 882 2004. SALGA Colloqium