INDUCTION PACK 2 The Funding Agreement Managing the Project Stages

1. INDUCTION PACK 2 • The Funding Agreement • Managing the Project Stages

2. THE NDPG PROJECT STAGES Project Preparation: Three Step Process Implementa-tion Step Exit Step Pre-Appraisal / Business Case Step Business Plan Step Project Verification Step Status Quo Step Immediate Interventions

3. Introduce Municipalities to NDPG NDP Unit makes call for projects Municipality prepare project application (may be assisted by consultants) Submit application to NDP Unit • NDP Unit receives application: • Records receipt , Allocates to a PD, First round assessment NDP Unit prepares shortlist of projects for verification • NDP Unit undertakes Verification Process: • Site / municipal visits, Complete Verification Report Final short list for submission to Review Committee / Reference Group Reference Group recommendations & Report to DDG with funding envelope recommendations Funding envelope approved by Treasury Notify Municipality of award Induction workshop by Treasury in the Municipality MUNICIPALITY AND TREASURY SIGN FUNDING AGREEMENT (FA) AND PRELIMINARY SCHEDULES

4. THE FUNDING AGREEMENT Extracts to note: Clause 4.2.20: the municipality is responsible for managing performance of the consultants “ Enter into all contracts with the Consultant and/or Contractor as required to complete the Project, and shall be responsible for the management of the performance of the Consultant and/or Contractor in accordance with the contract and for the management of the Project as a whole in accordance with all applicable National Treasury Regulations and related National Treasury Guidelines and municipal supply chain management legislation and policy. Clause 4.2.21: the municipality is responsible for ensuring that the required project management capacity is in place at all times. “Maintain an appointed Project Manager at all times” Clause 5.1: although a funding envelope is potentially available, the NT in the yearly gazette stipulates the actual yearly allocation “The National Treasury shall allocate to this Project, on the terms and conditions set forth in this Agreement, amounts for Technical Assistance and/or Capital Grant Funds, not exceeding the amounts stipulated in the Schedules, and/or as may be revised and agreed to in writing by the National Treasury. Clause 5.9 and 5.10: causes for suspension and or withdrawal of funds: “ Should the Municipality not provide progress reports, financial reconciliation reports, bank statements and updated cash flow projections on a monthly basis, as required by the National Treasury, and should the Municipality submit for payment an invoice of the Consultant in respect of Technical Assistance Funding, or request a drawn-down in terms of the Capital Grant transfer to the Municipality, more than one calendar month from the date of such invoice or request for draw-down, projected by the most recent Milestone Payment Schedule, the National Treasury shall be entitled to withhold payment of further transfers until such time as all required reports are submitted. All costs arising from such delayed payments shall be for the account of the Municipality. 5.10 Should the Municipality not meet the agreed milestones on a monthly basis, as required for Technical Assistance or quarterly, as required for the Capital Grant, the National Treasury shall be entitled to withhold or delay payment of further invoices and/or transfers, in whole or in part, until such time as milestones are met. All costs arising from such delayed payments and/or transfers shall be for the account of the Municipality.

5. THE FUNDING AGREEMENT SCHEDULES

6. Status Quo Step Pre-Appraisal / Business Case Step Business Plan Step • YOU HAVE RECEIVED YOUR AWARD LETTER • YOU HAVE SIGNED THE FA • YOU KNOW WHAT YOUR GAZETTED ALLOCATIONS ARE: • WHAT THEN ARE THE SUGGESTED PROCESS STEPS FOR MANAGING THE PROJECT PREPARATION PROCESS ? Project Preparation: Three Step Process Exit Step Implementation Step

7. MANAGING THE PROJECT CYCLE: GUIDELINES ON % SPLIT OF ALLOCATIONS OVER PROJECT LIFE CYCLE

8. EXAMPLE OF MANAGING THE PROJECT CYCLE: GUIDE TO % ALLOCATION SPLIT

9. Municipality nominates a Project Steering Committee (PSC) that reports to a Portfolio Head (MMC) PSC agrees Terms of Reference (ToR) for the Overall Status Quo analysis and report PARALLEL DEVELOPMENT OF A TOWNSHIP REGENERATION STRATEGY AND IMPLEMENTATION PLAN CAN COMMENCE HERE Municipality may appoint consultants (using TA Grant) to prepare Overall Status Quo report Draft programme Status Quo report with priorities and phasing of projects and input to Township Regeneration Strategy Workshop on Overall Status Quo report with priorities with PSC and NDP Unit. NDP Unit and PSC to formally minute the decision Project Status Quo report(s) prepared for priority project(s) including draft revised schedules and Council resolutions Final Status Quo report(s) approved by PSC (Overall and Project – and contains scoping of Pre-Appraisal Step) STRAGIEC REVIEW BY THE NDPG UNIT NDP Unit receives Final Status Quo report and reviews it Final Status Quo Report is approved by the Municipal Council and resolution approved Amended schedules (V2) Treasury signs new / revised schedules CONTRACTUAL APPROVAL BY THE NDPG UNIT Project baseline 1 established on Treasury Portfolio data base

10. Consultants appointed and / or briefed on PA step by Municipality Pre- Appraisal Report Draft Report with implications for project scope and concept • Phase 1: Consultants undertake project appraisals: • Technical (land, planning, geotechnical, environmental, infrastructure) • Economic and Social (economic profile, socio-economic data, potential for leveraging economic investment • Phase 2: Impact assessment (based on technical, social, economic studies from above) • Technical impacts and risks • Economic impacts and risks • Social impacts and risks Include summary of the TR Strategy and indicate alignment of project to the Strategy Workshop to discuss findings with PSC and Treasury officials, include TRS • Revise the project concept • Prepare final Pre Appraisal report • Revised project scope • Impact assessment • Indicative project budget and work plan • Summary of TR Strategy and implications of project for TRP and vice versa • Scope the needs of the Business Plan step • Include revised schedules and milestone payment schedule SRATEGIC REVIEW BY THE NDPG Submit PA report to NDP Unit Amended schedules (V3) Submit final report to Municipal Council for information CONTRACTUAL APPROVAL Treasury and Municipality sign revised schedules

11. Appoint consultants to prepare Business Plan / extend appointment Technical viability Institutional arrangements Financial viability Business Plan contents and aspects to be addressed Implementation Plan Financial Plan Partnership / Leverage Plan Risk Management Plan Ongoing Management / Exit Strategy Plan Draft Business Plan with draft revised Schedules Workshop with PSC and Treasury and TRP consultants and officials to discuss draft Business Plan and revised draft schedules and alignment with TRP STRATEGIC REVIEW BY NDPG In line with funding envelope Not in line with funding envelope then apply for Exception Treasury sends Municipality letter with conditions and amendments to schedules Municipality revised BP and schedules Include summary of TRP and ensure projects aligned with TRP Municipal Council resolution and Municipal Council approved Business Plan and schedules CONTRACUAL REVIEW BY NDPG Business Plan and schedules to NDP Unit for approval Treasury approved Business Plan and endorse schedules CONTRACTUAL APPROVAL BY NDPG: CAPITAL GRANT TOTAL AMOUNT IS CONFIRMED Capital Grant award to Municipality Quarterly disbursements of CG to Municipality Treasury monitoring of project progress

12. PSC and NDPG PD’s resolve procurement of resources for the implementation of the Business Plan Municipality mobilises the professional team (new / existing) for implementation Implementation team commissions detailed design Procurement of contractors / extend appointment of professional team to undertake final design Final design for implementation CONTRACTUAL REVIEW Municipality approves final design and NDP Unit provides inputs, if necessary Project implementation / construction Stakeholder engagement PSC oversight and reporting to Municipal Council CONTRACTUAL REVIEW NDPG Disburse payment to Municipality Achieve milestone payment points Treasury Implementation review / inspection (quality assurance) Begin consideration of exit requirements NDP Unit confirms close out report submitted CONTRACTUAL APPROVAL Complete project Project Handover NDP Unit considers draft Exit Strategy Submit project close out report with all support documentation to Municipality Submit draft Exit Strategy to NDP Unit and Municipality CONTRACTUAL REVIEW

13. Municipality ensures necessary management and maintenance requirements are in place (financial / budgetary and human capacity) NDP Unit undertakes project inspection / review NDP Unit updates project data on their systems as status complete Municipality and NDP Unit exit workshop Municipality and NDP Unit review Exit Strategy Municipality approves final Exit Strategy NDP Unit receives copy