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
Institute of Municipal Finance Officers & Related Professions
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
Institute of Municipal Finance Officers & Related Professions
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
Institute of Municipal Finance Officers & Related Professions
Performance Management the driver to address public demand
Back to basics through Performance Management service
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
Institute of Municipal Finance Officers & Related Professions
Performance Measurement a requirement to address the public demands
Back to basics through Performance Management service
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
Institute of Municipal Finance Officers & Related Professions
Performance Management System in action to address the public demands
Back to basics through Performance Management service
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?
Institute of Municipal Finance Officers & Related Professions
Performance Management System in action to address the public demands
Back to basics through Performance Management service
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
Institute of Municipal Finance Officers & Related Professions
Performance Management System in action to address the public demands
Back to basics through Performance Management service
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
Institute of Municipal Finance Officers & Related Professions
Performance Management System in action to address the public demands
Back to basics through Performance Management service
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
Performance Management System in action to address the public demands
Back to basics through Performance Management service
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
Institute of Municipal Finance Officers & Related Professions
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
Institute of Municipal Finance Officers & Related Professions
Performance Management System in action to address the public demands
Back to basics through Performance Management service
Performance Management System in action to address the public demands
Back to basics through Performance Management service
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
Institute of Municipal Finance Officers & Related Professions
Performance Management System in action to address the public demands
Back to basics through Performance Management service
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
Institute of Municipal Finance Officers & Related Professions
Performance Management System in action to address the public demands
Back to basics through Performance Management service
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
Institute of Municipal Finance Officers & Related Professions
Institute of Municipal Finance Officers & Related Professions
Defining Performance Management
Planning
Measurement
Financial Alignment
Systems Alignment
Performance Management System in action to address the public demands
Back to basics through Performance Management service
Processes hold the Key
Back to basics through Performance Management service
Institute of Municipal Finance Officers & Related Professions
• 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!
Institute of Municipal Finance Officers & Related Professions
Performance Management System in action to address the public demands
Back to basics through Performance Management service
Institute of Municipal Finance Officers & Related Professions
The Measurement Challenge
Back to basics through Performance Management service
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)
Institute of Municipal Finance Officers & Related Professions
The Measurement Solution
Back to basics through Performance Management service
Cost effectiveness
Inputs (Finance)
Outputs / outcomes
(Service Delivery)
Budget alignment
Measurement
Institute of Municipal Finance Officers & Related Professions
Importance of Financial Planning
Back to basics through Performance Management service
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!
Institute of Municipal Finance Officers & Related Professions
Clarify PBB cont…
Back to basics through Performance Management service
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
Institute of Municipal Finance Officers & Related Professions
Performance Measurement and Based Budgeting
Back to basics through Performance Management service
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
Institute of Municipal Finance Officers & Related Professions
Ensuring Alignment Between Budgets and Plans
Back to basics through Performance Management service
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
Institute of Municipal Finance Officers & Related Professions
Link between Financial Planning and Costing Systems
Back to basics through Performance Management service
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
Institute of Municipal Finance Officers & Related Professions
Conclusion
Back to basics through Performance Management service
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