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PRESENTATION OUTLINE

PRESENTATION OUTLINE. PURPOSE BACKGROUND AND CONTEXT INTERVENTIONS SINCE SCOF’S VISIT OF 24 – 27 JANUARY 2012 3.1 Filling of Municipal Managers and CFOs Posts 3.2 Development and Implementation of Municipal Budgets as well as Spending

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PRESENTATION OUTLINE

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  1. PRESENTATION OUTLINE • PURPOSE • BACKGROUND AND CONTEXT • INTERVENTIONS SINCE SCOF’S VISIT OF 24 – 27 JANUARY 2012 3.1 Filling of Municipal Managers and CFOs Posts 3.2 Development and Implementation of Municipal Budgets as well as Spending and Performance on Conditional Grants by Municipalities 3.3 Compliance with Municipal Finance Management Act 3.4 Relations/Collaboration between Municipalities and Sector Departments (including Parastatals) 3.5 Service Delivery and Capacity Constraints 3.6 Alignment of Municipal Integrated Development Plans with Provincial Growth and Development Strategy 3.7 Response to SCOF Recommendations 4. CHALLENGES FACING NORTHERN CAPE MUNICIPALITIES 5. CONCLUSION

  2. 1. PURPOSE • To brief the NCOP’s Select Committee on Finance on progress made regarding 14 Municipalities that were visited on 24 – 27 January 2012 • Focus of presentation to be on: - Development and Implementation of Municipal Budgets - Compliance with Municipal Finance Management Act - Spending and Performance on Conditional Grants - Relations/Collaborations between Municipalities and National and Provincial Sector Departments; - Service Delivery and Capacity Constraints and - Response to SCOF recommendations.

  3. 2. BACKGROUND AND CONTEXT 2.1 Categorisation of Northern Cape Municipalities: 5 District Municipalities and 27 Local Municipalities:

  4. 2.2 Municipalities Identified for Targeted Support 13 Local Municipalities are receiving targeted support from Northern Cape Department of COGHSTA and National DCOG through Local Government Turn-Around Strategy (LGTAS), and 7 of these same municipalities are also receiving support from the Municipal Infrastructure Support Agency (MISA): John Taolo Gaetsewe District Municipality identified by National Cabinet as one of the 23 Rural Districts requiring support

  5. Six (6) Northern Cape Municipalities benefitting from the Municipal Finance Improvement Programme: Finance experts deployed by National Treasury to the following Municipalities: • Umsobomvu • Renosterberg • Siyancuma • Kamiesberg • Kgatelopele • Thembelihle

  6. 2.3 Municipalities Visited By SCOF The following 14 municipalities were visited on 24 – 27 January 2012:

  7. 3. INTERVENTIONS BY PROVINCIAL GOVERNMENT SINCE SCOF VISIT ON 24 – 27 JANUARY 2012 3.1 Status of Municipal Managers and CFOs Posts: • Karoo HooglandLM (MM : Filled ; CFO : Filled) • Renosterberg LM (MM : Vacant ; CFO : Vacant) • Sol PlaatjeLM (MM : Filled ; CFO : Filled) • Dikgatlong LM (MM : Filled ; CFO : Vacant) • Kgatelopele LM (MM : Vacant ; CFO : Vacant) • Siyancuma LM (MM : Vacant ; CFO : Filled) • Siyathemba LM (MM : Vacant ; CFO : Filled) • Phokwane LM (MM : Filled ; CFO : Filled) • Emthanjeni LM (MM : Vacant ; CFO : Vacant) • Thembelihle LM (MM : Filled ; CFO : Filled) • Mier LM (MM : Vacant ; CFO Vacant) • Siyanda DM (MM : Filled ; CFO : Filled) • Richtersveld LM (MM : Vacant ; CFO : Filled) • Kamiesberg LM (MM : Vacant ; CFO : Filled)

  8. COGHSTA, Provincial Treasury and SALGA Northern Cape are part of short-listings and interview panels: • Renosterberg LM (MM interviews were held on 13/11/2012 and the CFO post will be advertised after MM appointment) • Dikgatlong LM (CFO post to be re-advertised soon) • Kgatelopele LM (MM and CFO posts short-listings and interviews soon, awaiting municipal council to confirm dates) • Siyancuma LM (MM interviews on 13/11/2012 and CFO post will be advertised after MM appointment) • Siyathemba LM (MM interviews on 13/11/2012 and CFO post will be advertised after MM appointment) • Richtersveld LM (MM post to be filled on 1/12/2012) • Kamiesberg LM (MM post to be filled on 1/12/2012) • Mier LM (Interviews for MM took place, Council to make an appointment soon) • Emthanjeni LM (MM interviews scheduled for 13/11/2012 and the CFO post will be advertised after MM appointment) All MM posts to be filled by 31 December 2012 & CFO posts by end of February 2013

  9. 3.2 Development and Implementation of Municipal Budgets

  10. Funding of Municipal Budgets

  11. Budget Actual Performance & Spending and Performance of Conditional Grants • Karoo Hoogland Local Municipality • 1.1. Budget Performance as at 30 September 2012 1.2 Conditional Grant Spending

  12. 2. Renosterberg Local Municipality 2.1. Budget Performance as at 30 September 2012 2.2 Conditional Grant Spending 4

  13. 3. Sol Plaatje Local Municipality 3.1. Budget Performance as at 30 September 2012 3.2 Conditional Grant Spending 4

  14. 4. Dikgatlong Local Municipality 4.1. Budget Performance as at 30 September 2012 4.2 Conditional Grant Spending 4

  15. 5. Kgatelopele Local Municipality 5.1. Budget Performance as at 30 September 2012 5.2 Conditional Grant Spending 4

  16. 6. Siyancuma Local Municipality 6.1. Budget Performance as at 30 September 2012 6.2 Conditional Grant Spending 4

  17. 7. Siyathemba Local Municipality 7.1. Budget Performance as at 30 September 2012 7.2 Conditional Grant Spending 4

  18. 8. Phokwane Local Municipality 8.1. Budget Performance as at 30 September 2012 8.2 Conditional Grant Spending 4

  19. 9. Emthanjeni Local Municipality 9.1. Budget Performance as at 30 September 2012 9.2 Conditional Grant Spending 4

  20. 10. Thembilihle Local Municipality 10.1. Budget Performance as at 30 September 2012 10.2 Conditional Grant Spending 4

  21. 11. Mier Local Municipality 11.1. Budget Performance as at 30 September 2012 11.2 Conditional Grant Spending 4

  22. 12. Siyanda District Municipality 12.1. Budget Performance as at 30 September 2012 12.2 Conditional Grant Spending 4

  23. 13. Richtersveld Local Municipality 13.1. Budget Performance as at 30 September 2012 13.2 Conditional Grant Spending 4

  24. 14. Kamiesberg Local Municipality 14.1. Budget Performance as at 30 September 2012 14.2 Conditional Grant Spending 4

  25. 3.3 Compliance with MFMA Summary Municipal Total Average level of Compliance: In terms of 30 MFMA monitoring indicators: • Emthanjeni LM : Improvement • Siyanda DM : Regression • Richtersveld LM : Improvement • Karoo Hoogland LM : Regression • Siyathemba LM : Improvement • Kgatelopele LM : Regression • Phokwane LM : Improvement • Renosterberg : Regression • Dikgatlong : Improvement • Siyancuma LM : Regression • Mier LM : Regression • Thembelihle LM : Regression • Kamiesberg LM : Regression Copies of Comprehensive report to be distributed to members during the presentation

  26. Provincial Government Intervention: Compliance with MFMA • COGHSTA appointed a consultant to assist municipalities with GRAP training: To ensure full compliance with GRAP when finalising 2011/12 AFS • Provincial Government, through COGHSTA and Provincial Treasury appointed Consultants for Mier, Kamiesberg and Renosterbergto prepare their 2011/12 annual financial statements as they are struggling financially • COGHSTA Municipal Finance unit together with Provincial Treasury visited municipalities to assess progress on the implementation of their audit action plans • Due to provincial government interventions, 8 out of the 14 municipalities submitted their 2011/12 AFS timeously: Sol Plaatje, Siyacuma, Siyathemba, Phokwane, Emthanjeni, Thembelihle, Siyanda and Richtersveld. 4 municipalities’ AFS are still outstanding: Karoo Hoogland, Renosterberg, Kamiesberg and Mier. 2 municipalities submitted late: Dikgatlong (30 August 2012) and Kgatelopele (02 November 2012).

  27. Most municipalities were qualified on non-compliance with Supply Chain Management processes; • During the monitoring of Audit Action Plans, municipalities were advised on how to deal with SCM transactions to avoid irregular and unauthorisedexpenditures • Provincial Treasury: Supply Chain Management is providing hands on support to municipalities • COGHSTA and Provincial Treasury in the process of finalising Provincial Debt Collection Committee to assist municipalities to collect debt owed to them by government departments: e.g.: Targeted support was provided to Sol Plaatje Municipality who then successfully collected R54m outstanding monies from government departments

  28. Functionality of Audit Committees and Internal Audits, and MPACs establishments

  29. MPACs have been in place for a short period, therefore their functionality will be assessed on the 2011/12 audit outcomes for their effectiveness • The Association of Public Accounts Committees (APAC), together with its strategic partners: Auditor General South Africa (AGSA), National Treasury (NT), Department of Cooperative Governance (DCoG) and SALGA with the Provincial Legislature, conducted training for all MPAC members on 16 – 18 April 2012 and 24 - 26 April 2012 respectively

  30. 3.4 Relations/Collaboration between Municipalities and National and Provincial Sector Departments (including Parastatals) • District Inter-Governmental Forum (Quarterly Meetings): Chaired by the Executive Mayors of District Municipalities: Mayors of Local Municipalities, Municipal Managers of those Local Municipalities, Regional Managers of Provincial Sector Departments as well as representatives from National Sector Departments attend • MUN-MEC Meetings (Quarterly Meetings): Convened and chaired by MEC for Cooperative Governance, Human Settlements and Traditional Affairs: Attended by Executive Mayors, Mayors, Chairperson of SALGA NC, Municipal Managers, CFOs of Municipalities, DG in the Office of the Premier, Head of Provincial Treasury, Representatives from National and Provincial Sector Departments and A-G’s Office • Premier’s Inter-Governmental Forum (Quarterly Meetings): Chaired by Premier and MEC for COGHSTA as co-Chairperson, All MECs, DG and Provincial Heads of Departments, Chairperson of SALGA, Municipal Managers, CEOs of Parastatals, Regional Heads of National Sector Departments in the Province

  31. 3.5 Service Delivery and capacity Constraints of Municipalities

  32. Service Delivery Capacity Constraints: • Lack of capacity in municipalities poses serious challenges in project initiatives, planning and implementation which ultimately results in poor service delivery and protests • Most of bulk infrastructure operate beyond capacities and the RBIG Funding is not enough to fund all demands • Reduction in MIG allocation will impact negatively on the upgrading of Bulk Infrastructure • Calculations of allocations based on head count rather than the demand on the ground: The furthest the demand is in terms of distance, the higher the cost of service therefore the head count formula base is not doing justice to Northern Cape Province as a whole due to the vastness of the area and poverty

  33. Dealing with Capacity Constraints: Municipal Infrastructure Support Agency • 7 municipalities in the Province identified for MISA support: Renosterberg and Mier part of MISA • DCOG deployed 3 Engineers and 1 Planner to assist municipalities to deal with Planning and Technical challenges • There is also Senior Manager from DCOG as part of National’s Technical Support Unit deployed to the Province • COGHSTA in partnership with MISA has scheduled site visits intervention that will commence from the week of 12 November 2012 to various municipalities in the province preferably the 14 identified municipalities

  34. 3.6 Alignment of Municipal IDPs with Provincial Growth and Development Strategy • Draft IDPs were assessed at the Annual Provincial IDP Analysis and Engagement on 28 – 31 May 2012 by COGHSTA and sector departments • Municipalities submitted their respective adopted 2012/13 draft IDPs to COGHSTA, except Kamiesberg and Renosterberg • The final IDP of Karoo Hoogland could not be adopted due to political and administrative instability • Municipal IDPs, Budgets and SDBIPs have been integrated • Implementation of the IDPs went hand-in-hand with ‘hands on support and Rapid Response’ support processes and leveraging of stakeholder support and reporting and monitoring Comprehensive report to be handed to members during the presentation

  35. 3.7 Response to Recommendations of the Select Committee on Finance • Provincial Treasury has strengthened its support programmeto municipalities by: regular visit to municipalities, assistance on request from municipalities in compliance with Section 34 of the MFMA, discuss relevant topics at Provincial CFO Forum, Workshops and Circulars to assist municipalities to comply; • MierLocal Municipality: The province appointed Altimax as service provider to assist municipality with AFS and compilation of GRAP compliant asset register with Provincial Treasury monitoring the process. Municipality visited for benchmark of their budget, as had a balanced budget and training on revised PPPFA provided • KamiesbergLocal Municipality: The province appointed Altimax as service provider to assist municipality with AFS and compilation of GRAP compliant asset register with Provincial Treasury monitoring the process: PT visited municipality and held open discussion with the MM, CFO and Head: SCM. Challenges on Audit Reports were discussed. Because of these challenges, an intervention plan was compiled. COGHSTA seconded an acting Municipal Manager to assist the municipality and training provided on capturing of statistics (R100 000)

  36. Response to Recommendations of the Select Committee on Finance 4. Emthanjeni Local Municipality: PT visited municipality and held open discussion with the MM, CFO and Head: SCM. Challenges on Audit Reports were discussed. Because of these challenges, an intervention plan was compiled. PT provided formal training and PT then provided mentorship assistance, physical assistance with compiling a database for prospective suppliers; invitation of quotations; compiling bid documents, specification, advertisement of bids; bid closing; evaluation of bids; writing of submissions to the committees 5. COGHSTA and Provincial Treasury coordinate assistance to municipalities and all other provincial sector departments are part of Local Government Turn-Around Strategy 6. The contract between COGHSTA Human Settlements unit and municipalities is clear: Municipalities must review the contract of contractors and ensure that all houses built conform with national norms and standards. Municipalities are not reporting to the department and no action was taken against the municipalities for non-compliance.

  37. 7. Assistance provided to Municipalities • * PT visited municipality for mid-year budget and performance assessment • Undertook municipal benchmarking exercise on their 2012/13 budget • Renosterberg Local Municipality • COGHSTA seconded Municipal Manager and Provincial Treasury CFO • Appointed consultants to assist with compilation of AFS for 2010/11 and 2011/12 • Undertook municipal benchmarking exercise • Dikgatlong Local Municipality • Provided assistance with pre-evaluation of bids • Training on revised PPPFA regulations and CIDB • Visited municipality for mid-year budget and performance assessment Karoo Hoogland Local Municipality

  38. Kgatelopele Local Municipality • Assisted with pre-evaluation and evaluation of bids • PT attended Bid Evaluation meeting • Assisted with compilation of tenders for Security, Land fill and Tracker system • Assisted CFO with participation process in RT contracts • Assisted municipality with converting draft budget to regulated format • Siyancuma Local Municipality • PT provided training on overview on SCM and Bid Committees • PT provided physical assistance with compiling a database for prospective suppliers; invitation of quotations; compiling bid documents, specification, advertisement of bids; bid closing; evaluation of bids; writing of submissions to the committees • PT visited municipality and held open discussion with the MM, CFO and Head: SCM. Challenges on Audit Reports were discussed. Because of these challenges, an intervention plan was compiled. • Assisted municipality with compiling Final Budget Documents according to the Municipal Budget and Reporting Regulations, Schedule A format

  39. Siyathemba Local Municipality • Undertook municipal benchmarking exercise • Phokwane Local Municipality • Training provided on capturing statistics (R100 000) • Provided assistance with pre-evaluation of the banking tender • Provided support on the revised PPPFA regulations and • Provided CIDB training • Undertook municipal benchmarking exercise • Mediate on municipal debt to Sedibeng Water Board

  40. Emthanjeni Local Municipality • PT visited municipality and held open discussion with the MM, CFO and Head: SCM. Challenges on Audit Reports were discussed. Because of these challenges, an intervention plan was compiled. • PT provided formal training • PT then provided mentorship assistance, physical assistance with compiling a database for prospective suppliers; invitation of quotations; compiling bid documents, specification, advertisement of bids; bid closing; evaluation of bids; writing of submissions to the committees • Thembelihle Local Municipality • PT visited municipality and held open discussion with the MM, CFO and Head: SCM. Challenges on Audit Reports were discussed. Because of these challenges, an intervention plan was compiled. • PT then provided mentorship assistance, physical assistance with compiling a database for prospective suppliers; invitation of quotations; compiling bid documents, specification, advertisement of bids; bid closing; evaluation of bids; writing of submissions to the committees • No benchmarking exercise could be undertaken because municipality’s 2012/13 budget was not available

  41. Mier Local Municipality • The province appointed Altimax as service provider to assist municipality with AFS and compilation of GRAP compliant asset register with Provincial Treasury monitoring the process • Municipality visited for benchmark of their budget, as had a balanced budget • Training on revised PPPFA provided

  42. Siyanda District Municipality • PT conducted mentorship and assisted the municipality with evaluation of bids • Training provided on the revised PPPFA regulations • Richtersveld Local Municipality • Just normal oversight visits • Kamiesberg Local Municipality • The province appointed Altimax as service provider to assist municipality with AFS and compilation of GRAP compliant asset register with Provincial Treasury monitoring the process • PT visited municipality and held open discussion with the MM, CFO and Head: SCM. Challenges on Audit Reports were discussed. Because of these challenges, an intervention plan was compiled. • COGHSTA seconded an acting Municipal Manager to assist the municipality • Training provided on capturing of statistics (R100 000) • Sol Plaatje Municipality • Not a delegated municipality, reporting directly to National Treasury

  43. 8. Since 1999 the Provincial Government never invoked section 139 interventions. The approach adopted by the province thereafter was to provide support to the municipalities in their respective challenges they are encountering

  44. 4. CHALLENGES FACING NORTHERN CAPE MUNICIPALITIES • Northern Cape municipalities are struggling to recruit suitable senior management personnel to work in municipal spaces due to spatial realities of the Province; • Municipalities consistently experience brain drain because they are not attractive as areas to stay and work, they are not able to offer competitive remuneration to skilled personnel; • The equitable share allocated local government is inadequate to deal with the challenges faced by municipalities; • COGHSTA is constantly deploying its own personnel to fill vacancies as those of Municipal Managers in several municipalities;

  45. CHALLENGES: • The department has limited budget to sustain interventions implemented in municipalities

  46. THANK YOU

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