ABC of Clean Administration Back to basics through Performance Management service Institute of Municipal Finance Officers & Related Professions IMFO Audit

ABC of Clean Administration Back to basics through Performance Management service

Institute of Municipal Finance Officers & Related Professions

IMFO Audit & Risk Indaba 2015

Performance Management System in action to address the Public Demands

Fienie van Rensburg: Institute for Performance Management

PM Multi- disciplinary Field

Back to Basics throughPerformance Management Service

All disciplines need to ensure that public monies are used responsibly and effectively to build a better life for all!This requires a multi-disciplinary and integrated approach!Institute of Municipal Finance Officers & Related Professions

A clean audit not necessarily addresses the public demand!

Almost two thirds of people currently do not receive basic humanitarian rights and demands - It is now time for PM Auditing to move to the next level of implementation


Clean Audit the Solution?

Back to Basics throughPerformance Management Service

Back to Basics in action to address the public demands

Back to basics through Performance Management service


Municipalities are no stranger to the challenges of limited financial resources and a shortage of skilled administrators

The Mail and Guardian 13 March 2015 reports: “The state of performance of municipalities is of concern,” ... many municipalities were in intensive care, as reported by the

auditor-general

A solution, or not? Some Back to Basics awards encourages a clean administration The awards recognises, financial management, basic service

delivery, governance, LED and public participation Is this enough?

Performance Management System in action to address the public demands

Back to basics through Performance Management service:

One very important truth needs to be be addressed

Integration unprecedented Ward-based Planning Model Integrated with the Integrated Development Plan Integrated with the SDBIP Integrated with measurement (service standards),

costing Aligned to the Provincial Annual Performance Plans


Performance Management the driver to address public demand


There is only one approach by which these plans can be developed to meet public demand!

? Multi-disciplinary Planning Monitoring Reporting Evaluation

Through effective Measurement Performance Management

Strategic Offices should focus at least 80% of their timeon integrated performance management for better service delivery to address public demand

• Strategic Offices must have the powers to plan, monitor, report and evaluate multi-disciplinary how public demand is met


Performance Measurement a requirement to address the public demands


Public demand can only be achieved through Equity Effectivity Efficiency Economy .... But most importantly through a prioritisation model

Performance management as regulated: Holds the tool to address public demand How ???

One plans through the publicOne reports back to the public




It is of no interest to the public to know the machinery how services are implemented They want to see planning per ward ito

What, when and by which standards Equity. Effectivity, Efficiency and Economy is the system behind the

scenes to drive it The questions we need to answer:

Do we go back to audit the unit cost in the budget against the cost in real term? Do we go back and report on the scheduled time frames completed? Do we go back and report holistically as per the Measurement Model how the

APP’s interrelates with the IDP’s and how it interrelates with the Wards? Do we go back and report on the standards delivered against the time frames?

Why not?




An integrated multi-disciplinary approach is needed internally to manage, to monitor, to report and to evaluate of which the components are: An integrated ICT platform at least between municipalities and

provinces An integrated ICT platform at least between municipalities and

wards / Councillors An integrated ICT platform between different systems within the

organ of state

An all inclusive PM methodology:• An integrated model between PM decision-making, PM financial unit

cost, PM auditing, PM human capital and PM process management must be promoted




We need to maximise fiscal capacity Focus on inadequacies and challenges

Systems Processes People

Unit Cost = service standards and time frames Aligned to ward based planning and delivery:

• Ward Based Planning• Performance Based Budgeting• Strategic planning• SDBIP• Business Unit / Operational Alignment

Operational Unit Cost Project management Cost




Indeed a clean audit not necessarily achieves a good performance if multi-disciplinary process integration and Unit cost have not been achieved!

Is it time to shift now to PBB?Institute of Municipal Finance Officers & Related Professions



Audits Must start to include a multi-disciplinary approach to

ensure Service Delivery Financial Health Good governance

Is adequately measured, integrated and costed

Why after years does this not happen?• New approach is maybe required

• The fundamental approach on PM auditing needs to shift to include operational delivery


Need to return to service standards to address the public demand On the Core Services

Clean drinking water, sanitation, electricity, housing, waste removal and roads

We need to start to develop the how? Service standards

Effective measurement against the service standards

Cost the processes that support the service standards






Need to return to the basics also in PM How are we going to put our people first? How are we going to get dysfunctional

municipalities out of their state?

Rekindle the spirit of effective service delivery: Plan, Monitor, Report and Evaluate on specifics

• Time line• Level of quality• Cost against Unit• 100% Expenditure




To do this we need to: Develop service standards Build processes with output measures Pull it up into the costing per measure Pull output measure into outcome and impact measures ito

the public demand Adjust strategy Review IDP, ward based plans and other frameworks Align APP’s with service delivery areas Integrate across spheres of government Ensure multi-disciplinary approach and re-structuring of

governance arrangements Monitor through appropriate ICT systems




Thus Align service delivery and service standards with

performance management Align performance management with performance

based costing and budgeting Develop the ICT platform Monitor and Report adequately ito service delivery cost

time lines against public demand Create public demand responsiveness platform



Defining Performance Management

Planning

Measurement

Financial Alignment

Systems Alignment



Processes hold the Key



• Process can be classified as those routine procedures that are part of the department’s day to day operations.

• It can also be classified as those initiatives that are performed annually within the department and consists of– Input (resources)– The process will consist out of a number of activities / steps /

procedures– Complying to a set of standards– Measurable outputs

We need to get the basics

right!





The Measurement Challenge


Managing-for-results focuses on maximising benefits and minimising negative consequences

Effective and efficient performance measurement is regular measurement of the

results (outcomes and outputs) efficiency of programmes/project processes

(inputs, outputs)


The Measurement Solution


Cost effectiveness

Inputs (Finance)

Outputs / outcomes

(Service Delivery)

Budget alignment

Measurement


Importance of Financial Planning


Alignment between the budget and the various plans compiled during the planning phase is imperative to ensure that sufficient financial resources are available to achieve the outcomes, outputs, activities and inputs

relevant to objectives.

Well-structured Plans

Sufficient funds based on effective financial

planningSuccess!


Clarify PBB cont…


Consists of three elements:

1. The result or final outcome2. The strategy or how to achieve the final

outcome3. The activity or what is to be done to achieve

the final outcome4. The report back to the Public


Performance Measurement and Based Budgeting


It is the practice of developing budgets based on the relationship between programme funding levels and expected results from that programme

PBB is a tool that management can use to manage more cost-effective and efficient budget outlays

PBB requires linking indicators to resources to ensure that strategy and planning meet execution and measurement


Ensuring Alignment Between Budgets and Plans


Need to ask the following questions to ensure alignment between budgets and plans:

• What kind and how many services / products can be produced with available funds?

• Are services / products of good value and are they making a difference in the lives of citizens / clients / customers?

Can only answer these by

implementing performance-

based budgeting


Link between Financial Planning and Costing Systems


Related to financial planning Performance –

based Budgeting (PBB) and Activity-based

Costing (ABC) can be used to link finances

with strategies to achieve institutional goals


Conclusion


It is not that a Clean Audit is not important - it

is that auditing should start to go beyond the

existing PM auditing parameters and to start

to focus on Unit cost for services to be

delivered against service standards - then

shall we start to meet the Public Demand

Thank You!


Documents

ABC of Clean Administration Back to basics through Performance Management service Institute of Municipal Finance Officers & Related Professions IMFO Audit