1. Role Other Governance Structures in Provision of Sustainable Provision of services Sidwell Mofokeng, IMFO Vice President FIMFO,ACFE, ACGP Institute of Municipal Finance Officers & Related Professions

2. Presentation Outline Introduction Legislative Mandate Problem Statement Role of other Governance structures in Service Delivery Institute of Municipal Finance Officers & Related Professions

3. Introduction Reference to Governance in municipal sphere is not synonimous with Government. Governance focuses more only the ability of the muncipal government discharging its responsiblities in terms of section 152 of the legislation constitution the, MFMA, Structures,the Systems and other prevailing legislation over:- Stratetigic Planning and Performance (IDP, SDBIP) Service Delivery Financial Perfomance and Reporting Risk Management Internal Auditing – ( Role of Audit Committee) Compliance with appliccable laws and regulations Reporting( Section 71,and 72 Reports) M&E. Institute of Municipal Finance Officers & Related Professions

4. LEGISLATIVE MANDATE 1.Constitution of the Republic of South Africa Section 152 2.Municipal Systems Act 3. Muncipal Structures Act 4. Municipal Finance Management Act No. 56 of 2003 (MFMA) Section 165 (2) (a), (b)(iv) of the MFMA requires that: “(2) The internal audit unit of a municipality or municipal entity must - (a) prepare a risk based audit plan and an internal audit program for each financial year; (b) advise the accounting officer and report to the audit committee on the implementation on the internal audit plan and matters relating to: (v)Performance Management” 5. Municipal System’s Act No. 32 of 2000 (MSA) Section 45 (a) of MSA requires that: “The results of performance measurements in terms of section 41(I)(c) must be audited-as part of the municipality’s internal auditing process.” Institute of Municipal Finance Officers & Related Professions

5. LEGISLATIVE MANDATE…. Continue 6. Municipal Planning and Performance Management Regulations of 2001 Section 14 (1) of MSA requires that: (c) A municipality’s internal auditors must - (i) on a continuous basis audit the performance measurements of the municipality; and (ii) submit quarterly reports on their audits to the municipal manager and the performance audit committee referred to in sub-regulation (2). Institute of Municipal Finance Officers & Related Professions

6. Problem Statement Non-adherences to the legislative requirements – doing the basics Submission of Performance Information ito of legislative requirements In-year reporting (monthly, quarterly, midyear, annual reports) Inadequate support of the audit process- internal/external Auditing of Performance Information is not done – caused by non-submission of information Inadequate and ineffectiveness of Oversight by Council/Audit Committees Failure to integrate King III Corporate Governance principles (by the way not enforceable) in our planning processes- 1 st Sept 2009 Cumbersome reporting requirements Inconsistency between National Treasury and COGTA reporting formats Inadequate evaluation/monitoring systems Ownership of the PMS (Councils exercising its oversight role!) Commitment to implement the whole M&E System Institute of Municipal Finance Officers & Related Professions

7. The Role of the Muncipal Council- Appoints Accounting Officer which one of the responsibilities is performance Approve delegations that include PM process Appoints Performance/Audit Committee and MPAC. Adopts and approves IDP, PM System, Framework and policy. Monitor the performance information through Audit Committee Consider the quarterly Mid Year and Annual Performance Reports as submitted by Audit/ Performance Audit committee and refers these reports to MPAC. Ward Councillors – ward based service delivery plans Public Participation Adopts Annual Report which include Auditor General Reports-Performance Information. Appoints IA (Perf. Auditors) with consultation with the Audit Committee and Accounting Officer. Institute of Municipal Finance Officers & Related Professions

8. WAY FORWARD

9. Institute of Municipal Finance Officers GOVERNMENT SYSTEM OF PLANNING & PERFORMANCE

10. Role of Mayor 1.Integrated Development Plan (IDP) Process Plan Five Phases (Analysis, Strategies, Projects, Integration & Approval. 2.Annual Budget 3. Service Delivery Budget & Implementation Plan Corporate Objectives, Baseline, Indicators (Input/Output/Outcome), Targets 4.Performance Agreements Performance Plans/Performance Scorecards 5.Performance Evaluations 6.In-year Reports Quarterly Reports (MFMA Reg 2009) – Quality Certificate Midyear Reports (MFMA Sec 72) – Quality Certificate Annual Performance Reports (Section 46) –Auditor-General Report/Opinion Annual Reports (Section 121) – AG Report/Opinion/ Institute of Municipal Finance Officers & Related Professions

11. Role of Mayor..2 1.IDP CYCLE 2.IDP Steering Committee ( Management PMT) 3.Stakeholder Performance AC & AC 4.Process Plan outline responsibilities of all Stakeholders 5.IDP will follow process – Public participation 6. Draft budget 7. After Council approval of the IDP the may or must of SDBIP with a contract with Council 8. Mayor must ensure that performance contract are signed 9.Performance Agreement informed by Framework and Policy and the ACT 10.SBDIP must be presented to the public however this would have been 11.SDBIP is an agreement of Mayor and council Institute of Municipal Finance Officers & Related Professions

12. Supporting Roles to the Mayor Supporting structures to the Executive Mayor are supporting -Management - implements -APAC /AC review ( through internal Audit Reports based approved Annual Plan -MMC Monitor and Evaluate per dept cluster -Mayco/ Exco adopts -Council Approve -MPAC – interrogate as per council mandate/ Institute of Municipal Finance Officers & Related Professions

13. Supporting Structures to the Mayor..2 There be a PMS -Framework is the key that guide the role of all stakeholders in set the tone ( MPAC,) -Policy guide the implementation 1.Frequency of reporting- mayors role ito of Act 2.Practical experience all mmc must be involved to evaluate clusters and departments 3.Performance result are reported to mayor and to Council 4.Performance must be evaluated quarterly. The Pac must review performance and report Institute of Municipal Finance Officers & Related Professions

14. Role of MPAC There be a PMS -Framework is the key that guide the role of all stakeholders in set the tone ( MPAC,) -Policy guide the implementation 1.Frequency of reporting- mayors role ito of Act 2.Practical experience all mmc must be involved to evaluate clusters and departments 3.Performance result are reported to mayor and to Council 4.Performance must be evaluated quarterly. The Pac must review performance and report Institute of Municipal Finance Officers & Related Professions

15. Assurance by the key role players Best Practise : Key Commitments -Combined Assurance Institute of Municipal Finance Officers & Related Professions First level of assurance ( Management / leadership) Senior Management Municipal Manager Mayor Second level of assurance (internal independent assurance and oversight) Internal audit Audit Committee Treasury, COGTA, Premier’s office Strengthening the overall oversight of the enterprise’s risk management processes.

16. Assurance by the key role players Best Practises: Key Commitments -Combined Assurance Third level of assurance (External independent assurance and oversight) Municipal Council Municipal Public Account Committee (MPAC) Legislature and portfolio committee External Audit Institute of Municipal Finance Officers & Related Professions

17. What needs to be done Remedial Action Plan for Predetermined Objectives Review and revise performance targets and projections in Organisational SDBIP Review performance management process Review performance measuring instrument Review and revise performance management policy Develop performance management framework Develop user guidelines for performance measuring instrument Develop framework for credible performance evidence. Institute of Municipal Finance Officers & Related Professions

18. What needs to be done 2/.. Expedite the current review of the M&E System to ensure that it generates reliable and timely information for decision making, in order to improve government’s delivery machinery, improves policies and accountability Strengthen the capacity of the Delegation Systems at local government PMS/Internal Audit must work together to support processes Strengthen support of the internal/external audit processes Support internal/external committees (Oversight/Audit Committee to do their work diligently Strengthen Council Oversight Role Capacity building of the MPAC to execute its mandate Council being decisive in acting of MPAC recommendations Continuous training and development VERY essential – PMS evolving all the time Institute of Municipal Finance Officers & Related Professions

19. WHERE DO WE START Institute of Municipal Finance Officers & Related Professions PERFORMANCE Management Staff Regulations Performance is driven by section 56 employees the role of the mayor Constituting the panels MM conduct Informal assessments quartely as per act and regulations 805 Formal assessments twice a year SBDIP BUDGET adjustments Adjust the organisational performance Adjust Predetermined objectives Panels and the PaC/AC

20. WHERE DO WE START- First Step Remedial Action Plan for Predetermined Objectives Review and revise performance targets and projections in Organisational SDBIP Review performance management process Review performance measuring instrument Review and revise performance management policy Develop performance management framework Develop user guidelines for performance measuring instrument Develop framework for credible performance evidence. Institute of Municipal Finance Officers & Related Professions

21. Where DO WE START- Second Step Expedite the current review of the M&E System to ensure that it generates reliable and timely information for decision making, in order to improve government’s delivery machinery, improves policies and accountability Strengthen the capacity of the Delegation Systems at local government PMS/Internal Audit must work together to support processes Strengthen support of the internal/external audit processes Support internal/external committees (Oversight/Audit Committee to do their work diligently Strengthen Council Oversight Role Capacity building of the MPAC to execute its mandate Council being decisive in acting of MPAC recommendations Continuous training and development VERY essential – PMS evolving all the time Institute of Municipal Finance Officers & Related Professions

22. Where DO WE START- Third Step Develop a framework of how to address the identified gaps and challenges; Stick to the planning ethos (i.e. IDP Guide Packs!) Review of Institutional Arrangements (that can work best for us (not to loose focus!) Align the planning instruments at municipal level: IDP, SDBIP, LGTAs, Outcome Based Approach, NDP (Develop aligned SDBIP scorecards for implementation with clear KPIs and targets) Resuscitate and sustain planning tools (don’t steer away from what you know best, what works best and how to do it better!): Develop: Clear and concise planning frameworks Timelines Responsibilities Strengthen local structures District-wide IDP Steering Committee Institute of Municipal Finance Officers & Related Professions

23. Where DO WE START- Forth Step Redefine the assignment responsibilities to Council, Mayor, Officials and Municipal Managers and Section 57: - For better preparation and readiness - For improved implementation Sustain the performance monitoring and evaluation system Form should follow function Hence clarity on function crucial First function and buy-in, then the rest Institute of Municipal Finance Officers & Related Professions

24. Conclusion Both committees’ work was of high quality and their output is commendable. A huge amount of audit documentation can be dealt with and they fulfilled their mandates. The overall performance of the Audit and Performance Audit Committees are better than expected when they have received the full support of management. Management has noted that there was a positive contribution to the Financial and Risk Management matters in instance where governance works well.\ Institute of Municipal Finance Officers & Related Professions Evaluation of the Speaker, Executive Mayor and Senior Management on the Functionality of Performance Audit Committee and Audit Committee:

25. Review Performance Management Process Set KPI’s Set Measurable Targets Monitor Performance Community Participation Review and Measure Performance Community Participation Improve Performance Report Community Participation Provincial Intervention when necessary General KPI’s Planning process – (IDP) that includes Development Priorities and objectives

26. ROLE OF ADMINISTRATION AND POLITICAL LEADERSHIP IN SERVICE DELIVERY INTERNAL AUDIT ACCOUNTING OFFICER AND SENIOR MANAGEMENT TECHNICAL STEERING COMMITTEE ICT STEERING COMMITTEE RISK MANAGEMENT AND ANTI- CORRUPTION PERFORMANCE AUDIT COMMITTEE AUDIT COMMITTEE EXECUTIVE MAYOR AND MAYCO COUNCIL MPAC SECTION 80 COMMITTEES

27. Thank You For Your Attention Institute of Municipal Finance Officers & Related Professions