PRESENTATION TO THE SELECT COMMITTEE ON COOPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS 04 SEPTEMBER 2012

PRESENTATION TO THE SELECT COMMITTEE PRESENTATION TO THE SELECT COMMITTEE ON COOPERATIVE GOVERNANCE AND ON COOPERATIVE GOVERNANCE AND

TRADITIONAL AFFAIRSTRADITIONAL AFFAIRS04 SEPTEMBER 201204 SEPTEMBER 2012

BACKGROUNDBACKGROUND

Critical issues raised by the AG are as follows:• SCM• Human resource• Predetermined objectives• Information technology/Financial system• Quality of AFS(Material misstatements

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BACKGROUNDBACKGROUND

Challenges/underlying factors • Inappropriate/poor skills• Poor performance reporting and management

with no consequences• No ownership of leadership: no appetite to take

responsibility

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PRESENTATION OUTLINEPRESENTATION OUTLINE

• LEGISLATIVE MANDATE

• OPERATION CLEAN AUDIT PROGRAMME

1. Records Management Project2. Capacity Development Project3. MPAC4. Audit Remedial Plans

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MFMA LEGISLATIVE MANADATE MFMA LEGISLATIVE MANADATE FOR MEC dlgta FOR MEC dlgta

Section 25: Failure to approve the budget before the start of the financial year, municipality must report to MEC dlgta.This must be read together with section 55 of MFMA which stipulates that the Mayor must inform MEC dlgta and the MEC shall undertake appropriate provincial intervention in terms of section 139

LEGISLATIVE MAN. CONT.LEGISLATIVE MAN. CONT.

• Sec 127[4][b]: The Auditor General must inform the MEC dlgta in the event that the Accounting Officer does not submit Annual Financial Statements

• Section 131(2) : MEC dlgta to assess all AFS’s and whether municipalities have appropriately addressed the queries raised by the AG and report to the Provincial Legislature

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LEGISLATIVE MAN: CONT.LEGISLATIVE MAN: CONT.

• Section 132(3) : MEC dlgta to monitor whether municipalities have submitted annual performance reports and oversight report to the legislature.

• Section 136:Provincial intervention: MEC dlgta should act promptly in the event that he becomes aware that financial problems exist within a municipality. He will consult the mayor and also assess the extend of the problem and advice EXCO on appropriate action

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LEGISLATIVE MAN: CONT.LEGISLATIVE MAN: CONT.

• Section 141 :Financial recovery plan.• The MEC dlgta must work closely with the MEC

Finance for the development, implementation and monitoring of Financial Recovery Plans

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OPERATION CLEAN AUDIT OPERATION CLEAN AUDIT PROGRAMMEPROGRAMME

• RECORD MANAGEMENT• CAPACITY BUILDING• MPAC ESTALISHMENT • AUDIT REMEDIAL ACTION PLAN• OTHER INITIATIVES

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RECORD MANAGEMENT RECORD MANAGEMENT

THEME:“PROPER RECORDS MANAGEMENT FOR CLEAN AUDIT

2014 AND BEYOND.”OBJECTIVES:• Develop and entrench a culture of proper records

management in municipalities• Promote good governance to enhance service delivery

through proper records and information management • Establish processes, mechanisms and procedures for

proper records management that will contribute towards the Clean Audit 2014 objective.

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RECORDS MAN: CONT.RECORDS MAN: CONT.

Project deliverables• Establishment of sustainable and functional

records management procedures and practices within the BTO’s of priority municipalities

• Development and implementation of Approved Municipal Record Management File Plans

• Improved Municipal Audit outcomes by 2014

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RECORD MANAGEMENT RECORD MANAGEMENT (cont.)(cont.)

PROGRESS /ACHIEVEMENT TO DATE PHASE 1- • Districts record management workshops for

Records Management officials of all 23 municipalities were conducted.

• 81 officials attended the District wide sessions.• The sessions were conducted as follows: 26-27

June in DRSM DM, 4-5 July in DKK DM, 10-11 July in NMM DM and 31 July -1 August in BPDM.

• Phase 1 is completed.

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PHASE 2- Record management awareness drive to politicians and senior officials of municipalities per district.

• 1st Consultation with Section 56 managers: BPDM on 15 August

• 2nd Consultation with Section 56 managers : 22 August NMMDM

• 3RD Consultation: 28th August DRSMDM• Still to confirm with DKKDM

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CONT.CONT.

• Consultation with political leadership: MuniMEC of 31st August

Phase 3: 3 days Hands on Training for Records Managers

• Training for 33 officials from 11 priority municipalities: 11-13 Sept

• training for 24 officials from 12 non-priority municipalities: 18-20 Sept.

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PHASE 4 – Record management inspections and physical and intensive support.

• In partnership with DSAC inspections on 11 priority municipalities to verify needs, challenges and non-compliance issues for intensive support: e.g. an amount of R800 000 has been set aside by the department to buy necessary equipment for Records Units in these municipalities. Costed business plans are being finalized to this end.

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CAPACITY DEVELOPMENTCAPACITY DEVELOPMENT

• 180 municipal finance officials graduated in April 2012 for an NQF 3 Local Government Accounting Certificate.

• 111 officials will continue to NQF Level 4 facilitated by SAICA/SESTO starting Sept 2012.

• 106 municipal officials/ unemployed graduates started NQF Level 6 training in April 2011 facilitated by SAICA.[18 months']

• Second NQF 6 intake started in April 2012- October 2013

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CONT.CONT.

• The department is in a process of ensuring that all the graduates are optimally utilised in the BTO of municipalities to address Audit queries and revenue enhancement projects amongst others.

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Dept. Finance ProjectDept. Finance Project

Project Purpose• The department launched a Municipal Financial

Support Programme in June 2012• The project aims to improve financial governance

and build technical capability in municipalities• The programme is to ensure improvement with

the submission of AFS by all 23 municipalities by end August

• The technical support will be provided to municipalities over a period of 2 years

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Cont.

Project Deliverables/ Achievements to date• 22 B.Com graduates have been deployed to 14

municipalities since March 2012. The graduates have gone through an Internal Audit Learnership in PT

• 16 Service Providers have been deployed to 13 municipalities to assist with the preperation of AFS and Grap compliant asset registers

• All 23 municipalities submitted AFS for 2011/12 including backlogs dating from 2008/09

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MPAC MPAC

• All 23 MPACS were established by November 2011• The department in partnership with AG conducted

induction and orientation work sessions for all 23 MPACs per district from November 2011- March 2012

• The department in partnership with PT and APAC, conduct another round of work sessions for MPACs in May-June 2012

• Annual Work plans have been provided for each MPAC for adoption and implementation by Council

• District Based forums to support MPACs will commence in DRSMDM on 28 August

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State of MPAC establishment and State of MPAC establishment and functionality cont…functionality cont…

PROGRESS PER DISTRICTDr Kenneth Kaunda DM• MPAC Visited the projects that are implemented in local

municipalities to check progress.• MPAC had interviews with management to discuss monthly,

quarterly and annual reporting, MPAC budget, MPAC support staff, Internal controls

• Annual report was perused and subsequent to that, the oversight report was drafted and tabled in council.

• Investigations were conducted against officials with criminal charges and the process is still unfolding.

• The entity [Development Agency] was also investigated and findings were presented to council.

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City of Matlosana LM• MPAC came into effect during February 2012.• Annual program drafted and approved by council.• Nine meetings were held in the preparation of the oversight

committee.• There were several community consultations and feedback

was presented.• MPAC made clear recommendation on both the annual

report and oversight reports.• MPAC managed to have the meetings with AG, most issues

were clarified.• MPAC will engage management to discuss IDP and budget

issues.• It was indicated that Municipal Managers contract have not

yet been signed but the matter will be addressed as soon as possible. 22


Tlokwe City Council LM

• MPAC was established on 27 November 2011.• 2012/13 work program will be tabled to council soon. • Several meetings were held since MPAC was established.• Annual report was not tabled in time therefore oversight by

MPAC was compromised.• Several reports were perused by MPAC and findings were

tabled to council.• MPAC is still engaging with the oversight report• Code of conduct and laws for MPAC is approved by council.• Sec 71 and 72 reports are not yet attended to.

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Ventersdorp• MPAC established but not functional.• Annual workplan developed but not adopted• MPAC was not involved in the IDP/budget process.

Maquassi Hills• MPAC established but not functional• Only one meeting was held• Annual workplan developed but not adopted• MPAC was not involved in the IDP/budget process

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Ngaka Modiri Molema District

• Work programme adopted• Internal Audit is functional and provide adequate

support• Some members of MPACs were not invited to the

strategic planning meeting• One meeting was held• Officials are not supportive to the MPAC

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Tswaing• Work programme adopted• Administrative staff is supportive• Annual Report not completed• All position for section 57 are filled and 46

managers have signed performance agreements (Although they have not submitted them to dlgta)

• Shared services is working properly• Local Labour Forum (LLF) is performing well

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Ratlou

• Workplan was adopted on 31/11/2011• Four meetings were held• Municipal Manager provides assistance• Capital projects are not completed• Section 57 position are filled except CFO post

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Ramotshere• Work programme was adopted• One meeting was held• Annual Report was tabled on 31/01/2012• MPAC members are allocated functions according to

the programme• On 18/04/2012 and 02/05/2012 meeting was

postponed because the members were not forming a quorum. This was resolved with the intervention by the Speaker

• Challenges • Attendance, not forming a quorum

• Delay from Directors to submit information, councilors are in other portfolio committees 28


Ditsobotla• MPAC is functional• Attempted to hold two meetings but were postponed • Annual report submitted• Work closely with LLF• Asked assistance from DLGTA so as to function properly

Challenges • No administrative staff• Year Plan not approved

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Mafikeng• Awaiting Audit Report• There is no cooperation between council and LLF• Work plan not adopted by council• They are using a provisional programme• MPAC were concerned about invitation sent to AG, LG&TA

and PT for a sitting on February, all of them did not attend. It was clarified that the invitation was not clear.

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Bojanala Platinum District Municipality• MPAC was established on the 24 January 2012• There is a work plan for MPAC which will be tabled to council• Public participation meetings held as follows: • 19 January 2012 = Moretele LM• 19 January 2012 = Madibeng LM• 22 March 2012 = Kgetleng LM• 22 March 2012 = Moses Kotane • There have been meetings with locals to deliberate on critical issues • Members attended most workshops including those coordinated by

dlgta• One legal adviser appointed to assist MPACChallenges• No budget to carry out MPAC duties• There is no supporting staff to carryout admin functions

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Moses Kotane LM• MPAC was established on the 28 October 2011• There are 11 MPAC members• MPAC drafted their first quarterly report • All members attended the MPAC induction• No support staff, a request was made to council to that

effectChallenges• No budget to carry out MPAC duties• There is no supporting staff to carryout admin functions• Not all councilors fully comprehend the roles of MPAC and

its duties. Therefore there is a need to capacitate council.• Request was made to Provincial Treasury and dlgta to

support MPAC32


Madibeng LM• 2009/10 and 2010/11 annual report were not submitted

on time• The above reports were submitted to Auditor General

but rejected since financial matters were not included.• Annual reports were scrutinized, and recommendations

were tabled to council• After the corrections were made, the report was

approved by council and published.• Comments by the public are still to be obtained.• Resolution was taken that two officials will be supporting

MPAC with admin work.• No hearing or investigations were made or

recommended by MPAC as yet33


Moretele LM• MPAC members attended all workshops facilitated by

DLG&TA• Several meetings and Imbizos were held during March

2012.• MPAC consulted the community with regard to the annual

report. • Summoned different departments within municipality to

clarify and resolve various burning issues.• No budget for MPAC and currently utilizing budget of

speakers’ office.• One official was seconded to do MPAC secretariat duties.• MPAC appreciates the support by Province.

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MPAC CONT.MPAC CONT.

• DRSM DISTRICT MUNICIPALITY– Conducted detail analysis of the SCM Reports- Supply

Chain Management Report for the period ended 31 June 2012.

– Conducted detail analysis of the Management Reports (Section 71 Report) for the period ended 30 June 2012 e.g. Departmental expenditure performance

– Planning, Budgeting, and Performance ManaConducting of the 3rd Quarterly Review of the implementation of the 2011/2012 IDP Process Plan/District gement Programme – 2012/2017.

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CONT.CONT.

– Conducting the Quarterly Review of the performance and effectiveness of the District Public Accounts Committee (DPAC).

– Review of the Annual Work Programme– Review of the Service Delivery Budget Implementation Plan

(SDBIP)– Review of the Performance Agreements – MM and Section 56

Managers– Amendments of the Terms of Reference – change of name from

DPAC to MPAC – The DPAC members and officials attended the training on the

Oversight Role of Councillors organized by the Institute of Municipal Finance Officers (IMFO) from the 16-17 January 2012

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CONT.CONT.

• Kagisano Molopo LM• MPAC members are lacking skills and capabilities

to deal with reporting issues.• There are nine members.• Many meetings were called but members did not

attend.• MPAC is not functional.• Three Service Providers are appointed by PT to

assist municipality to prepare AFS, therefore hope is that municipality will submit on time.

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CONT.CONT.

Greater Taung LM• MPAC consist of ten members• Chairperson was only appointed in July 2012.• There is lack of corporation between MPAC and

administration.• There is political instability that hampers the duties of

MPAC.• Oversight committee still exist therefore there is clash

between their roles and MPAC roles. • Appointed chairperson promised that they will report on

their functionality during September 2012.

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Cont.Cont.

Naledi LM• MPAC’s annual work plan was approved by

council.• Six meetings were held.• No reports received from MM. • No corporation between MPAC and administration.• There was a meeting with MM and MPAC

requested that in the next meeting MM must bring along reports.

• 39

Cont.Cont.

Mamusa LM• MPAC is composed of five members.• There is no assistance or support staff.• Only one meeting was held.• MPAC is not functional.• Municipality was advised report their frustrations

to MEC dlgta, Council, and District municipality. •

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Cont.Cont.

Lekwa Teemane• MPAC was established during Sep 2011• There is no support staff provided.• Meetings are held after bi-monthly but reports are

not submitted.• Most senior managers are acting.• Audit committee does not engage MPAC when

dealing with important issues.• MPAC is considered dysfunctional.•

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RECOMMENDATIONS

• All MPACs to finalise their workplans and table for adoption

• Establishment and launching of District and Provincial MPAC Chairpersons Forum

• MEC for local government to review the reporting protocols of MPACs [To ensure that MPAC recommendations are tabled to before councils]

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AUDIT REMEDIAL PLANSAUDIT REMEDIAL PLANS

• 10 municipalities that have received 2010/11 audit outcomes have completed and submitted Audit Remedial Plans to the department

• The department is in the process of finalizing section 131[2] reports for the 2010/11 audit

• The department has already submitted section 131[2] reports for 2007/08,2008/09 and 2009/10 as required by legislation.

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OTHER ACHIEVEMENTSOTHER ACHIEVEMENTS

• The department has appointed 2 Deputy Director’s , each responsible for Operation Clean Audit and Revenue Management respectively.

• Deployed AD Municipal Finance to Lekwa Teemane as acting CFO, since February to date.He has assisted the municipality to move from disclaimer to qualified audit opinion.

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The way forward is however best captured by our Former State President:

““Our actions as local government should make an Our actions as local government should make an invaluable contribution to the important task of creating a invaluable contribution to the important task of creating a

humane society and a humane city where we work humane society and a humane city where we work selflessly for the betterment of local communities where selflessly for the betterment of local communities where we fully understand that our responsibilities are to the we fully understand that our responsibilities are to the

people, and we are every step of the way, accountable, people, and we are every step of the way, accountable, sensitive and responsive to the needs of the people”.sensitive and responsive to the needs of the people”.

PPresident Thabo Mbeki

The The people people

own own thethe car car

The Executive Mayor drives the car for the owners -

The Municipal Manager looks after the engineof the car

THE MUNICIPALITY IS LIKE A MOTOR VEHICLE

To keep going the car To keep going the car needsneeds

OIL & PETROLOIL & PETROL

Political Leader Managers & Administrators

The Municipality needsGovernors & Administrators

• VISION• MISSION

Where the Countrydesires to be.

Using CLEAN AUDIT as

intervention

• Municipal Excellence• Democratic Governance• Basic Service Delivery• Infrastructure Development• Financial Sustainability• Economic Growth

Current reality

Current future

Little risk in small steps

DesiredDesiredfuturefuture

DesiredDesiredfuturefuture

• Municipal Excellence• Democratic Governance• Basic Service Delivery• Infrastructure Development• Financial Sustainability• Economic GrowthA big leap will

make a difference!

CLEAN AUDIT CLEAN AUDIT 20142014

MUNICIPAL EXCELLENCE

Achieve the goals of:

Municipal Excellence

Democratic Governance

Basic Service Delivery

Infrastructure Development

Financial Sustainability

Economic Growth

CLEAN AUDIT 2014

– Municipal Basic Service Delivery & Infrastructure– Local Economic Development – Good Governance, Community Participation &

WCs– Financial Viability and Management

Drivers of the Municipal Clean Audit 2014

Mayoral / Exec Comm.

Municipal Manager

Community Participation

Municipal Transformation & Organizational Development

Local Government StrategicAgenda

CLEAN AUDIT 2014

CURRENT DEVELOPMENT

REALITY

VISION AND

MISSION

VALUE SYSTEM AND CORPORATE CULTURE

CURRENTDESTINATION

FUTURE DESTINATION

CLEAN AUDIT BUS

Process Plan

Integrated Development Plan

CLEAN AUDIT

Executive Mayor / Mayoral Committee

Municipal Manager /

Senior Managers

CLEAN AUDIT

Mayoral Committee & Councillors

Senior Management and Staff

Ward Committees

Community Development Workers

Ward Field Workers

Stakeholders and Community

MPAC

CLEAN AUDIT

Key Performance Areas (KPA’s)

Strategies and Development Objectives

Key Performance Indicators (KPI’s)

Performance Targets

Projects/Programmes/Plans

Operational Business Plans

CLEAN AUDIT

Finance

Equipment / Material

Performance Management

Communication

CLEAN AUDIT

Municipal Council (Institution)

Committees

Decision-making process

Organisational Structure

Systems

Policies / Procedures

By-laws

Delegated Powers & Functions

CLEAN AUDIT

CLEAN AUDIT

Monitoring, Evaluating and Reporting

Thank you.

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Documents

PRESENTATION TO THE SELECT COMMITTEE ON COOPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS 04 SEPTEMBER 2012