District Municipality Victor Khanye Dr JS Moroka Emakhazeni Emalahleni Steve Tshwete Thembisile NKANGALA District Municipality NDM mSCOA –ICF 22 June 2015 AL Stander

PRESENTATION OUTLINE (video and graphic sourced from unknown sources on the internet) Why SCOA? How do your get there??? Change management in a minute DR Kotter: 8-steps for leading change Lessons learnt - PEOPLE mSCOA ROCKS Implementation Plan Expected areas of risk Unexpected areas of risk Challenges Segment specific challenges Advise to non-pilot municipalities Decide for yourself

Why SCOA??? Wonderful Math Calculation!.mp4

HOW DO YOU GET THERE???? mSCOA OLD CHART

Dr. Kotter: 8-Step Process for Leading Change

Dr. Kotter: 8-Step Process for Leading Change Dr. Kotter has proven over many years of research that following “The 8-Step Process for Leading Change” will help organizations succeed in an ever-changing world: 1: Establishing a Sense of Urgency Help others see the need for change and they will be convinced of the importance of acting immediately. 2: Creating the Guiding Coalition Assemble a group with enough power to lead the change effort, and encourage the group to work as a team. 3: Developing a Change Vision Create a vision to help direct the change effort, and develop strategies for achieving that vision.

Dr. Kotter: 8-Step Process for Leading Change 4: Communicating the Vision for Buy-in Make sure as many as possible understand and accept the vision and the strategy. 5: Empowering Broad-based Action Remove obstacles to change, change systems or structures that seriously undermine the vision, and encourage risk-taking and non-traditional ideas, activities, and actions. 6: Generating Short-term Wins Plan for achievements that can easily be made visible, follow-through with those achievements and recognize and reward employees who were involved.

Dr. Kotter: 8-Step Process for Leading Change 7: Never Letting Up Use increased credibility to change systems, structures, and policies that don’t fit the vision, also hire, promote, and develop employees who can implement the vision, and finally reinvigorate the process with new projects, themes, and change agents. 8: Incorporating Changes into the Culture Articulate the connections between the new behaviors and organizational success, and develop the means to ensure leadership development and succession.

Dr. Kotter: 8-Step Process for Leading Change Summing-up: We have to work hard to change an organization successfully. If we’re too impatient, and if we expect too many results too soon, our plans for change are more likely to fail. When we plan carefully and build the proper foundation, implementing change can be much easier, and we’ll improve the chances of success.

LESSONS LEARNT: PEOPLE mSCOA ROCKS

PEOPLE LG serves the people of SA and this project should assist us in doing that better. People can make or break such a project Buy-in from top levels (Executive Mayor and MM) Involvement of a cross-functional team. The mSCOA Champions must be committed, dedicated and performance driven people Don’t think that all people experience change the same

PEOPLE Communication is key!!!!! The mSCOA piloting has brought about change in municipal processes, systems, organizational structure and job roles. This change has been an unsettling issue amongst departments and employees at all levels. Communication is key!!!!!

mSCOA M- Mayor buy-in, MM to take charge, Multi-dimensional classification structure, Mitigate risk, Monitor progress, Motivation to change (buy in from all stakeholders), MOU with system vendor/s, Machinery of state is SLOW

mSCOA S- Strategic(include the project in your IDP and Budget), Study the regulations, Start ASAP or earlier, be prepared to get your hands dirty, System vendor capabilities (Build on new technology), Munsoft is a dedicated strategic partner.

mSCOA C- Communication, Change (not easy and not for the faint hearted, Cost, Comparatives in AFS O- Organise & plan, Organisational reform, Own chart (understand it) A- Assessment, Adaptable to changes (adoption of GUID approach made this easier and quicker to respond), AG (GRAP), Audit trail of change process, Alignment of IDP, SDBIP, Budget and PMS

ROCKS R- Resistance to change, Reward, Redo, Risks (backup plans) O- Ownership of the process C- Cohesion between Cross functional team, Challenge yourself and the team K- Knowledge sharing, Keep record of challenges and how you over came it, Keep the momentum

ROCKS S- Survive, Service delivery, make it Stick. (It takes the majority of the organization to truly embrace the new culture for there to be any chance of success in the long term), System vendor positive responsiveness to required development or change can make your life easier (development of new modules).

Implementation plan Implemetation plan, risks, mitigation and progress to date 19 June 2015.docx

Expected areas of risk Change management Capacity at Municipalities to embrace mSCOA Funding Comparative figures (3 years) Prior year adjustments in preparation of 2014/15 AFS Are the MBRR budget and reporting schedules & upload files to NT LG database going to change to accommodate mSCOA and when is this expected? Buy in of AG on reform – process followed for implementation and auditing of AFS

Un-Expected areas of risk Late release of mSCOA V5.3 to comply with the time frames of budget regulations. Integration with third party vendors was complicated Late rollout of training for mSCOA Champions and other employees in the municipality (don’t under-estimate the importance of re-inforcement to make the change stick) V5.3 flagged accounts ‘do not use’, whilst already budgeted for, also changes in GFS

Challenges Tight timeframes of mSCOA and other day to day activities Late appointment of mSCOA assistant Current mSCOA does not fully cater for District Municipalities (Core and non-core still an issue, e.g. Social Services) Prior year adjustments in preparation of 2014/15 AFS Need of interim adjustment budget (not in accordance with MBRR)

Challenges The current MBRR budget and reporting schedules & upload files to NT LG database are not aligned to mSCOA. Draft budget was tabled & final budget approved on the old budget formats Alignment changes from old GFS to new mSCOA GFS Buy in of AG on reform – process to be followed for implementation and auditing of AFS

Challenges Ensuring that all stakeholders will be understanding the new mSCOA formats Interface between VIP and Munsoft to be finalised

Segment specific challenges Function Non provision for core and non-core functions of Districts Item Classification of items different from old chart, e.g. Employee wellness, Interns, Audit committee members Absence of sufficient control accounts Detail of some items, e.g. Travel and subsistence vs absence of detail on items like loans, investments, etc.

Segment specific challenges Funding Non breakdown of equitable share (breakdown required for calculation of level of municipality ito the upper limits, senior management regulations etc.) Regional Location vs who receives the benefit Costing None at this stage as it is not used at NDM Project Limited breakdown on typical work streams

Advice to Non-Pilot Municipalities Start today, study the regulations, study the NT project document. Appoint a dedicated project team and mSCOA champions Prepare a mSCOA implementation plan and identify all risks that might affect the success of the project Start to align the old chart to the new one Ensure that existing hardware will be able to accommodate mSCOA

Advice to Non-Pilot Municipalities Make provision in your budget for mSCOA implementation Monitor progress against the implementation plan, institute corrective actions and adjust the plan with unexpected issues. Ensure that you have backup plans or mitigation strategies for all identified risks. It is not a GL change it is a business change

Advice to Non-Pilot Municipalities Most of all be a change agent (change is never easy but it empower you to move forward) – communication is key Get buy in from all relevant stakeholders, including political buy in. This is not a financial reform it is a business reform – all managers must be involved. The mSCOA changes the way we do business and the way we report on transactions.

Decide for yourself

We have decided To embrace the mSCOA fully As we will be adjusting our dance moves in the next financial year, others will be starting with mSCOA It was good to hear our people saying things like: “We are mSCOA champions and I can teach other municipalities” “mSCOA made us really to apply our minds preparing our budget”

THANK YOU