1. FROM IDP to mSCOA BUDGET IMFO Conference Durban ICC Presented by Mothiba David Mogofe on 4 October 2016

2. Contents Legislative framework that enable financial management Five Key Strategic Objectives Key Performance Arears Separation of Powers … roles and responsibilities mSCOA Aligned to MFMA Calendar: The journey to success… Financial Reforms - Municipal Accountability Cycle IDP aligned to project Budget By Project and function IDP to Budget ( Example), 2

3. Legislative framework that enable financial management Municipal Systems Act, 2000 “Adoption of integrated development plans 25. (1) Each municipal council must, within a prescribed period after the start of its elected term, adopt a single, inclusive and strategic plan for the development of the municipality which: (a) links, integrates and co-ordinates plans and takes into account proposals for the development of the municipality; (b) aligns the resources and capacity of the municipality with the implementation of the plan; (c) forms the policy framework and general basis on which annual budgets must be based;” MFMA, 2003 “Budget preparation process 21. (1) The mayor of a municipality must – (a) co-ordinate the processes for preparing the annual budget and for reviewing the municipality’s integrated development plan and budget-related policies to ensure that the tabled budget and any revisions of the integrated development plan and budget-related policies are mutually consistent and credible;”, 3

4. Legislative framework that enable financial management (Own bolding for emphasis only) Municipal Regulations on a Standard Chart of Accounts, 2014 “Object of these Regulations 2. The object of these Regulations is to provide for a national standard for the uniform recording and classification of municipal budget and financial information at a transaction level by prescribing a standard chart of accounts for municipalities and municipal entities which- (a)are aligned to the budget formats and accounting standards prescribed for municipalities and municipal entities and with the standard charts of accounts for national and provincial government; and (b) enable uniform information sets recorded in terms of national norms and standards across the whole of government for the purposes of national policy coordination and reporting, benchmarking and performance measurement in the local government sphere.” 4

5. Five Key Performance Arears 5

6. Separation of Powers … roles and responsibilities 6

7. Implementing the new chart of accounts and carry over of the legacy items opening balances. Note restatements for 2018/19 year. Budget process: Populate the Municipal running cost and Maintenance & repair Projects ; Functions will need to link the required Items to deliver the Projects; Align the IDP with available resources ( Funding & Revenue Items ); and Determine the Costing module and finalize tariffs. Budget process: Populate the Municipal running cost and Maintenance & repair Projects ; Functions will need to link the required Items to deliver the Projects; Align the IDP with available resources ( Funding & Revenue Items ); and Determine the Costing module and finalize tariffs. Finalization of the chart Budget Approval process Create SDBIP based on Budget. Finalization of the chart Budget Approval process Create SDBIP based on Budget. IDP process: Needs to begins with in the prescribed period from 3 August 2016. IDP process: Needs to begins with in the prescribed period from 3 August 2016. mSCOA Aligned to MFMA Calendar: The journey to success… 7 Community Participation: Identify Projects (Capital and typical work streams); Identify Regions of these projects; and Identify the Function that need to deliver the projects. Community Participation: Identify Projects (Capital and typical work streams); Identify Regions of these projects; and Identify the Function that need to deliver the projects.

8. Financial Reforms - Municipal Accountability Cycle 8

9. Projects Infrastructure or Non-Infrastructure Infrastructure projects New,existing or Renewal Project Maintenance Municipal Running Cost Typical Work streams Not Applicable Default projects are only used for liabilities, current assets, Revenue and gains and losses. Identify the Type Water treatment works Reticulation Waste drop-of points Testing stations Etc…. Identify the type Infrastructure or non -infrastructure Community participation Capacity Building Note : Maintenance have preventative or corrective maintenance. Either : planned, condition base or interval base Definition: Water treatment works as per version 6 Treatment - terminology changed to align to CIDMS Solid Waste infrastructure : addition from CIDMS in Version 5.5 for creating municipal specific projects. Internal Sanitation Reticulation changed to Reticulation in Version 5.5 to align to the CIDMS and Internal Reticulation included. Projects relating to the renewal of existing coastal infrastructure assets. Community assets added on version 6 As per version 6 additional projects performed by district municipalities on behalf of locals, project has been added. IDP and budget alignment IDP aligned to project Capital Operational. Default “how far are we”

10. Opex: Core or Non –Core Water distribution Solid waste removal Mayor and council Administrative and corporate support IDP projects.Infrastructure Non-infrastructure Infrastructure projects (DM) Opex Projects Maintenance Municipal Running Cost Typical Work streams Reginal Identify: Whole of district Administrative and head office ( including satellite) Wards Functions: Water Waste water infrastructure Waste Management other Function Water Waste management Executive and council Finance and administration Sub-function : Core or non core Water treatment Waste water treatment Solid waste disposal Licensing and regulation “mSCOA project, Function and Region alignment process Budget By Project and function Capital Operational Region “how far are we”

11. IDP to Budget ( Example) Good Governance and Public Participation Project description: Municipality planning to have community participation programme on quarterly basis and the office of the mayor will champion the process and the programme is budgeted R500 000

12. IDP to Budget IDPGood Governance and Public Participation ProjectOperational: typical work stream: Communication and Public participation: Mayor/ Executive Mayors campaign FunctionExecutive and Council: Core Function:Mayor and Council Finance and Administration: Core Function: Fleet Management Public Safety: Core Function: Police Forces, Traffic and Street Parking Control Marketing, Customer Relations, Publicity and Media Co-ordination: Core function FundRevenue: non exchange: property rates: levies ItemContracted Services : Contractors: Catering Services Contracted Services : Contractors : Stage and Sound Crew Contracted Services : Contractors : Artists and Performers Contracted Services: Contractors: Audio-visual Services Advertisement Newspaper Graphic designer RegionRegional identify: local government by province: district : local municipality: whole of municipality CostingDefault transaction

13. QUESTIONS?