IMFO 5 AUDIT & RISK INDABA Fostering better service delivery through governance service (MPAC Oversight) Presented by: PR Mnisi East London ICC

 Governance in public sector context: - The way and manner in which government/municipality is governed and managed by the people who run it. Introduction

 LGTAS: clean, effective, efficient, responsive and accountable LG  Need for Oversight: reviewing and monitoring that each structure within the municipality performs its statutory and delegated functions  Effective oversight and accountability helps ensure that the administration and executive implements programmes and plans in a way consistent with the IDP, budget, municipal policy as well as the Constitution and related legislation  Effective oversight strengthens the municipality and improve service delivery  Effective oversight improves efficiency of municipality and contributes to more focused service delivery …Intro

 Local government must strive within its financial and administrative capacity to:  provide democratic & accountable government for local communities;  ensure sustainable provision of services to communities;  promote social & economic development;  promote safe & healthy environment; and  Encourage the involvement of communities  Local government must structure & manage its administration, budgeting and planning process to give priority to:  basic needs of communities;  promote the social & economic development ; and  participate in provincial & national development programmes. Objectives of local government

S 79 of the Municipal Structures Act, states: – 1)A municipal Council may - a)establish one or more committees necessary for the effective and efficient performance of any of its functions or the exercise of any of its powers; b)appoint the members of such a committee from among its members; and c)dissolve a committee at any time – 2)The municipal council-. a)must determine the functions of a committee; b)may delegate duties and powers to it in terms of section 32 (repealed); c)must appoint the chairperson; Legislative framework?

Why MPAC? – Governance requires separation of powers between oversight and executive. – Executive and Administration accountable for the legislated and delegated powers. – Provide Effective,functional and ongoing oversight mechanism. – Provide enhanced oversight over the executive and administration Establishment of MPACs

 Established by council by way of council resolution  Section 79 committee  Main function is to perform oversight over executive functionaries as determined by council  Council determines its functions and powers according to the internal structure and operations of the council, in order to enhance the performance of the municipality  Meetings of MPAC to be open to the public  MPAC reports directly to the municipal council, Chairperson liaise with Speaker for inclusion of reports in council agendas Establishment cont…

 Service Delivery  IDP,MTREF Budget  Service Delivery and Budget Implementation Plan (SDBIP)  Individual Performance Agreements  Systems to report performance  In-year financial reports (s.71 reports),Quarterly performance reports  Annual Financial Statements, Annual Reports  Other reports to council  Ward based reports, Other public communications  Municipal websites Oversight tools

Undertaking oversight visits in order to verify reported deliverables against actual work on the ground against the set targets. Examine the quarterly reports on Unauthorized, irregular, fruitless and wasteful Expenditure Scrutinising reports of the City Manager such as Deviation from SCM processes. Oversight report on the Annual report of the City and its entities. Reports referred by other Section 79 Committees. Reports requested from executive based on the findings when deliberating on the Annual report together with the Auditor General report. Reports and Minutes of the Group Audit Committee. Other tools

MPACs must understand the responsibilities, functions and duties of the following committees and establishments:  Budget and Treasury Steering Committee Manages budget process on behalf of council.  Internal Audit and Audit Committee Undertake the internal regularity audit. Draft quarterly reports  Budget and Treasury Office Manages the municipality’s finances and provides planning, implementation and reporting on municipal finances  Supply Chain Management (SCM) committees Responsible to undertake and manage all procedures for the acquisition of goods and services Understanding of other governance structures

ResponsibleOversight OverAccountable to CouncilApproving policy, IDP and budget Mayor Community MayorPolicy, budgets, outcomes, Municipal Manager Council Municipal Manager Outputs and implementation The Administration Mayor Senior ManagersOutputs and implementation Financial Management and Operational Functions Municipal Manager Municipal structure

oversight: Internal  Oversight over municipal administration is done by Internal Audit Unit and Audit Committee (sec 165 and 166 of the MFMA) Executive  MPAC, oversight role over “executive” of the Municipality. Enhanced oversight

 The MPACs’ primary purposes are:  To serve as an oversight Committee to determine the effective institutional functionality of the municipal council and municipality;  To monitor good governance and foster optimal utilisation of the municipalities resources to enhance and sustain service delivery and financial management;  To ensure that the outcomes of its oversight function enable the municipal council and municipality to implement and manage remedial measures so as to realign the good governance requirements;  To undertake its work in an independent and non partisan manner over the executive of the municipal council.  To assist council to hold the executive and municipal entities to account, and to ensure the efficient use of municipal resources Role of MPAC

Interrogate the following financial aspects dealt with in the MFMA (Cont.) submission of the annual report (127) -monitor that it has been submitted alternatively explanation why not submitted oversight report (129) -prepare draft report -consider all representations made to the council -members of public allowed to address the committee considers issues raised by the A-G ensure a fully functional audit committee is appointed (166) disciplinary action instituted in terms of the MFMA MPAC terms of reference

 authority to interrogate the documents relating to the under-mentioned matters and to make recommendations to the municipal council:  unforeseen and unavoidable expenditure  unauthorized, irregular or fruitless and wasteful expenditure  SDBIP  annual report  authority to consider all presentations made by the community on the annual report and the authority to conduct interviews with members of the community to obtain input on the annual report, as well as the authority to prepare the draft oversight report over the annual report;  authority to instruct any member of the executive, the municipal manager to provide the MPAC with copies of documents to be dealt with by the committee in terms of its terms of reference or to appear before the committee to provide explanations or to provide written explanation by a specified date; Delegations to MPAC

 MPAC is a tool through which better service delivery may be achieved  MPACs is a tool to improve effectiveness of municipality  MPAC to function according to the needs of the municipality  Effective oversight will instill confidence of residents in municipality Conclusion