Service Delivery Through Effective Governance

1. Service Delivery Through Effective Governance OVERVIEW OF ALIGNMENT OF IDP, PMS, BUDGET & OVERSIGHT Phenyo Chwene IMFO Conference 08-10 October 2012 Emperors

2. Outline • MSA Objective • Planning and Performance Framework • Local Govt Accountability • Planning Processes • IDP & Budget • Measurement Processes • SDBIP • In year Reporting • Council Oversight • MPACs

3. MSA Objective To establish a simple and enabling framework for the core processes of planning, performance management, resource mobilisation and organisational change that underpin the notion of developmental local government.

4. Planning & Performance Framework

5. Local Govt Political and Administrative Accountability • Political structures • Administrative structures • EE imperatives • Skills development imperatives • Provide an opportunity for stakeholders to represent the interests of their constituencies. • Provide a structure for discussion, negotiations and joint decision making • Ensure proper communication between all stakeholders and the municipality • Monitor the planning and implementation process

6. Political and Administrative Interface

7. PLANNING PROCESS: IDP • Strategic Direction and Goals set by Council through IDP • Has 5 year Span – aligned to term of council • The IDP is reviewed annually and necessary changes can be made. • Community needs • Municipal powers and functions • Sector plans • General KPIs • Policy decisions • National and Provincial Development Programmes

8. An overview of a typical IDP process Phase 0 Preparation : What do we need to prepare to plan? : Municipal Process Plan and District Framework Phase 1 Analysis : Where are we? : Well understood Priority Issues Phase 2 Strategies : Where do we want to go? How do we get there? : Vision, Objectives, Strategies, ID Projects Phase 3 Projects : What detail do we need to define to realise the strategies? :Indicators and basic project implementation information Phase 4 Integration : What do we need to manage to make it happen? : Integrated management programmes and plans Phase 5 Approval : Are we satisfied? : Amended and adopted IDP Management and implementation of IDP projects, programmes and plans

9. Key Challenges • Non-Adherence to the Legislative Requirements • Approval of Process Plans (ito MFMA/MSA) • Community Engagements • Planning not taken seriously and that’s where we start to fail i.e. developing credible IDPs & SDBIP • Poor Evaluation of plans i.e. IDP and SDBIPs • Pre-planning, • During implementation and • post-implementation • Non- Alignment of IDP & Budget Process • IDP not informing the budget and processes not aligned properly • Poor sector alignment • Weak IGR Structures

10. SOLUTIONS • Strengthen the planning structures i.e.: • IGR Structures (District IGR Structures, Municipal Manager’s Forum, CFO’s Forums etc) • IDP Steering Committee (Technical Team Level), • Budget Steering Committee, • Enhance Project Management Unit (PMU) Capacity – to do detailed planning, monitoring and evaluation of projects. • Strengthen IDP Rep Forums – ensure community participation in the planning, monitoring and project steering capacity

11. Service Delivery Through Effective Governance OVERVIEW OF ALIGNMENT OF IDP, PMS, BUDGET & OVERSIGHT Phenyo Chwene IMFO Conference 08-10 October 2012 Emperors

12. Outline • Measurement Processes • SDBIP • In year Reporting • Council Oversight • MPACs

13. IMPLEMENTATION & MEASUREMENT: BUDGET • The IDP informs the annual budget which must be approved by council. • Mayor then approves a Service Delivery and Budget Implementation Plan (SDBIP). • Service delivery targets linked to performance contracts for senior managementAnnual Budget • Medium Term Expenditure Framework • Related policies

14. IMPLEMENTATION AND MEASUREMENT: SDBIP • Section 1 of the MFMA defines the SDBIP as: “a detailed plan approved by the mayor of a municipality in terms of section 53(1)(c)(ii) for implementing the municipality’s delivery of services and the execution of its annual budget and which must include (as part of the top-layer) the following: (a) projections for each month of- (i) revenue to be collected, by source; and (ii) operational and capital expenditure, by vote; (b) service delivery targets and performance indicators for each quarter”.

15. SDBIP • The SDBIP is a layered plan, • Top layer of the plan dealing with: • consolidated service delivery targets and in-year deadlines, and linking such targets to top management. • The (lower) layer of detail of the SDBIP, • Provides more detail on each output • breaking up such outputs into smaller outputs and linking these to each middle-level and junior manager. • Implementation Tool • sets in-year information, such as quarterly service delivery and monthly budget targets, and links each service delivery output to the budget of the municipality, • Monitoring Tool • Enables the council to monitor the performance of the municipality against quarterly targets on service delivery.

16. Municipal Public Accounts Committee (MPAC) • MPAC is the mechanism through which the Council exercises oversight, monitoring and evaluation over the financial and non-financial performance information in accordance with prescribed legislation and corporate governance principles. • Established itoMStruct Act Section 79 • Section 129(4) of the MFMA further provides for the issuance of guidance on the manner in which municipal councils should consider annual reports and conduct public hearings, and the functioning and composition of any public accounts or oversight committees established by the council to assist it to consider an annual report.

17. Municipal Public Accounts Committee • Key oversight role ensuring executive and administration accountable for performance. • Section 129 of the MFMA requires the council to consider the annual reports of its municipality and municipal entities and to adopt an “oversight report” containing the council’s comments on each annual report. • The oversight report must include a statement whether the council: • has approved the annual report, with or without reservations; • has rejected the annual report; or • has referred the annual report back for revision of those components that can be revised.

18. MPAC Functions • Performs an oversight function on behalf of council • Engage directly with the public • Consider public comments • Consider and evaluate the content of the annual report and to make recommendations to Council when adopting an oversight report on the • annual report; • Reviewed in-year reports, including the quarterly, mid-year and annual reports; • Examine the financial statements and audit reports of the municipality and municipal entities, • Evaluate the extent to which the Audit Committee’s and the Auditor General’s recommendations have been implemented; • Promote good governance, transparency and accountability on the use of municipal resources; • Recommend or undertake any investigation in its area of responsibility, after reviewing any investigation report already undertaken by the municipality or the Audit Committee; and • Perform any other functions assigned to it through a resolution of council within its area of responsibility.

19. Financial governance framework applicable to local government

20. COUNCIL OVERSIGHT ROLE • Council adopts IDP and undertakes annual review and assessment of past performance outcomes (Systems Act) • Council conducts oversight roles by approving annual budget and monitors financial and non-financial performance through in-year reports: • Monthly (MFMA Sec 71) • Quarterly (MFMA Sec 52) • Mid-year reviews (MFMA Section 72 • Annual Financial Statements • Submitted to Auditor-General who issues audit report • Annual Reports (MSA 46 & MFMA Sec 121) • Reports on financial and nonfinancial performance. • Links to the strategic goals in the IDP

21. AUDIT COMMITTEE • Established ito of MFMA Section 166 • Provides independent specialist advice on: • financial performance, • efficiency and effectiveness, • performance management and • compliance with legislation • Council considers the authoritative and credible view of the Audit Committee on the review of the AFS • Internal audit functionally reporting to the Audit Committee • Providing administrative support • Review of financial and non-financial reporting

22. Financial Governance in Practice

23. CHALLENGES • Performance management not taken serious (by the way process!!): • Inadequate monitoring and evaluation processes • Sustainability Reporting not done adequately – report done for “malicious compliance” • Audit Committees tend to be appointed without ensuring their independence is sustained • Members appointment based on allegiances and patronage • Combined assurance role and objectivity and independence is always challenged • Audit Reports not tabled at Council level • Internal Audit not supported to execute their responsibilities • Late submission of financial and non-financial information impeding audit plan and assignments against the backdrop of inadequate human resources capacity. • MPACs are not capacitated adequately to execute their mandate with regard to: • The roles and responsibilities • Conducting detailed analysis of financial and nonfinancial reports • Not given adequate administrative support • Objectivity questioned at every turn – impartiality of chairpersons

24. SOLUTIONS • Audit Committees should be given space to exercise their independence character • Appointing suitably qualified and experienced members • Functional support by Internal Audit at all times not compromise • Capacity building key in the execution of their mandate • Strengthen capacity of practitioners to be able to conduct evaluations of plans • Develop a course for mainly focusing on evaluation of plans • Ensure proper alignment of IDP, SDBIP and Budget • Planning and Performance Unit should strive to work together from the planning phase to reporting stages.

25. SOLUTIONS • MPAC should be support to perform its work diligently • Assigning of administrative personnel (to support with its function – agenda, reports and research) • Given room to exercise their mandate by: • Being provided with space to be objective – not to be influenced by party political directives • Conduct analysis and recommend to council without fear or favour • Provided with capacity building programmes to enhance their level of competence and skills.