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Section 47 Report 2007/08

Section 47 Report 2007/08. Content of S47-Report. Section 47 process Research methodology and structure of the report Challenges Executive summary/ general trends Chapter 1: Geographic, Demographic, and Socio Economic Profiles Chapter 2: Municipal Integrated Development Planning

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Section 47 Report 2007/08

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  1. Section 47 Report 2007/08

  2. Content of S47-Report Section 47 process Research methodology and structure of the report Challenges Executive summary/ general trends Chapter 1: Geographic, Demographic, and Socio Economic Profiles Chapter 2: Municipal Integrated Development Planning Chapter 3: Municipal Transformation Institutional Development Chapter 4: Basic Service Delivery Chapter 5: Financial Viability and Management Chapter 6: Good Governance and Public Participation Chapter 7: LED Chapter 8: Cross cutting matters Chapter 9: Municipal Challenges and Achievements Chapter 10: Provincial Support and Capacity Building Initiatives

  3. Section 47 Process(See Legislative overview in report for more detail) Submission of financial statements by municipalities 31st August Completion of Audit process by 30 November Completion of draft municipal annual report by 31st December Tabling to Council by 31st January (Make public after tabling for comments) b Finalise Annual report after taking into account public comments and Council adoption of oversight report by 31st March (submit copy to AG,PT,MEC and provincial legislature) Compilation of Section 47 report

  4. Research methodology and structure of the report • Third report of this nature • Completed after intense data collection from municipalities , provincial departments and the Provincial Treasury • Information was categorised and analysed in accordance with the 5 National KPA’s • Each KPA in separate chapter • A concise questionnaire was distributed to municipalities to collect additional information not covered in annual reports • Other information utilised amongst others: • Municipal annual reports • Financial Statements • AG reports • IDP’s and assessments • In certain instances, the information reflects the current status (is indicated as such) • Summary evaluation grid at the end of each chapter

  5. Challenges • Some information was received very late, some still outstanding to date • Incomplete questionnaires • Questionnaire still outstanding (Breede Valley) • Quality of data received still remains problematic, especially with regard to service delivery • Some assessments hampered due to incomplete and quality of information received, i.e. filled and vacant posts – dept. deleted question from questionnaire, therefore no information in most cases • Provincial support chapter problematic • No data was received on provincial support from PT or any other provincial department • Information for department itself not sufficient • Despite challenges, improvement in reporting format

  6. Executive summary/ general trends Period marked with slight improvement in service delivery initiatives and huge improvement in audit outcomes Witnessed changes in council leadership at 60% of the municipalities and changes in administrative municipal management and leadership at 27% of the municipalities The lack of financial resources and the shortage of skills at municipal level remains a challenge Although there is a high level of technical and administrative compliance with regards to integrated development planning, there are clear areas for improvement. Almost all municipalities indicated that a lack of funding for bulk services is hampering their delivery in respect of basic services, especially with regard to the provision of housing

  7. Executive summary/ general trends cont. Almost all municipalities indicated that a lack of funding for bulk services is hampering their delivery in respect of basic services, especially with regard to the provision of housing An analysis of municipal financial statements indicates that municipalities are very reliant on capital grants to fund their capital expenditure. This gives an indication that the revenue base of municipalities is insufficient to generate enough funding for provision and maintenance of basic infrastructure The average % of capital budget spent for the Province has improved to 76.24% in 2007/8, but the average % spent on the MIG grant have declined from almost 100% in the 2005/06 financial year to 84% in the 2007/08 financial year The main reason cited by municipalities for under spending their capital budgets and MIG is the lack of capacity/technical skills in their Engineering/Technical Departments. Most municipalities submitted their financial statements on time and there has been a huge improvement in the audit outcomes for the 2007/08 municipal financial year with three disclaimers.

  8. Chapter 1: Geographic, Demographic, and Socio Economic Profiles General information chapter Include Geographic information per municipality & Demographic information per municipality as per Gaffney’s 2007/08 Socio- economic information per municipality – PT 2007, same as last year Political composition of municipalities – as at 11 December 2008 Treasury capacity classification

  9. Chapter 2: Municipal Integrated Development Planning Include Vision and missions per municipality General compliance for IDP processes – general questions in questionnaire Whole chapter was reviewed by the IDP section Analysis: only 3 of the 30 municipalities were deemed to have not fully achieved credible IDPs High level of technical and administrative compliance with regards to IDP, Lack of internal municipal ownership of the IDP across the administration and leadership, the tightening of the IDP-budget link, improving the ward-based deliverables Thirteen municipalities indicated that the LGMTEC engagements did not positively contribute to their IDPs Closer scrutiny of the 8 municipalities that have received IDP support during 2007/8, indicates implementation and operational constraints which points to internal staff capacity and how the IDP is managed within the municipality

  10. Chapter 2: Municipal Integrated Development Planning Analysis graph: (Utilised IDP section analysis of IDP’s

  11. Chapter 3: Institutional Development and Transformation Include • Filled and vacant posts per municipality • Transformation statistics per municipality • Status with MM positions • Compliance with HR systems and policies, skills development, implementation of PMS and AG reports on performance Analysis: • Vacancy rates in financial and technical posts are high and municipalities are experiencing huge challenges in the filling of these posts on all levels • The employment of female employees in Section 57 management positions remains a challenge in all the municipalities • Although all submitted skills development plans, barely 1% of budgets in most are expended to actually develop the skills of their employees. The success of the implementation of these plans is hampered by budgetary constraints and capacity. • Auditor–General reports (2007/08) and information submitted indicated that most municipalities have implemented or are in the process of implementing PMS

  12. Chapter 3: Institutional Development and Transformation Overall analysis graph: HR Management

  13. Chapter 3: Institutional Development and Transformation Overall analysis graph: PMS

  14. Chapter 3: Institutional Development and Transformation Overall analysis graph:

  15. Chapter 4: Basic Service Delivery Include • Level of services • Completion of sectoral plans • % capital budget spent • Free basic service, MIG, Housing Analysis: • Hampered by lack of credible and insufficient information submitted • Lack of info of situation in rural areas • Main challenges with the delivery of services is the escalating costs of service provision and infrastructure development and maintenance, as well as the costs of backlog eradication • Most municipalities are reliant to a great extent on capital grants from other spheres of government to fund their capital expenditure • There is a considerable shortage of funds for maintenance, mainly for roads, storm water drainage and sewerage • Capital Spending improved from 66.67% in 2005/06 to 76.24% in 2007/08 • Main reason cited for not spending capital budget is the lack of capacity and technical skills in its Engineering/Technical Departments. • MIG spending declined for 100% to 84%

  16. Chapter 4: Basic Service Delivery Overall analysis graph:

  17. Chapter 5: Financial Viability and Management Include • Performance against budgets , grants • Findings in AG Reports • Debt Management • Reliance on grants • Liquidity ratio’s Analysis: • Average performance for the past three financial years against revenue and expenditure operational budgets are 99,3% and 96,6% respectively, of which salary bills formed the majority of around 30%. • Overall performance against conditional grants received decreased from 73% in 2006/07 to 66 % in 2007/08 • Rely heavily on conditional grants such as MIG • Huge improvement from 11 to 23 from the 2006/07 to the 2007/08 financial year in the number of reports that are unqualified • The key findings that was indicated the most by the Auditor General were “Non- compliance with laws and regulations” and “Internal control/ internal audit weaknesses • 73,5 % is for debt older than 90 days

  18. Chapter 5: Financial Viability and Management Overall analysis graph:

  19. Chapter 6: Good Governance and Public Participation Include • Good Governance Indicators • Ward Committees, Anti-corruption • AG Findings on governance Analysis: • 98% of Municipal Council and Executive/Mayoral Committees achieved the requisite quorums for meetings • Most municipalities adopted codes of conduct for Council and staff • Eleven municipalities reported Councillor and staff arrears and that mechanisms are being put in place to resolve arrears • Considerable progress has been achieved in establishing Ward Committees despite numerous challenges confronting municipalities and ward committees • There has been a general improvement (97%) in the development of Anti- Corruption Strategies and Plans across municipalities in the province • High level of non-compliance in matters of governance according to AG reports – 31% non-compliance with regards to operation of audit committees, 45% non-compliance with regards to fulfilling audit committee responsibilities, 69% non- compliance with regards to fulfilling internal audit responsibilities, 47% non-compliance with regards to implementation of previous external audit recommendations etc

  20. Chapter 6: Good Governance and Public Participation Overall analysis graph:

  21. Chapter 7: LED Include • Development of strategies and implementation • URP and ISRDP Analysis: • Analysis hampered by the unavailability of the majority of LED plans • All municipalities have an approved Local Economic Development Plan to inform the 07/08 Integrated Development Plan and without exception these plans were deemed to be the result of a transparent formulation process. • Implementation and subsequent are limited due to a shortfall in available funds, co-operation between stakeholders; low economic development potential and capacity • Although most of the strategies still focus on short term job creation and projects (total of 80 822 jobs created during EPWP programmes), a bigger emphasis is placed on facilitating economic development by assigning the responsibility to specific individuals at 87% of the municipalities

  22. Chapters 8, 9 &10 Chapter 8: Cross Cutting Matters Include • Disaster management • IGR • Vuna Chapter 9: Municipal Challenges and Achievements Include • Summarised in tables • As identified by municipalities • As identified during Sec 47 process Chapter 10: Provincial support Provincial Treasury Department Economic Development and Tourism MIG and Housing

  23. Thank you Questions

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