2. STRATEGIC PLAN, ANNUAL PERFORMANCE PLAN AND BUDGET 2015 TO 2020 MUNICIPAL DEMARCATION BOARD
BRIEFING TO THE PORTFOLIO COMMITTEE ON COOPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS
DELEGATION
Ms MJJ Thupana
Chairperson: Municipal Demarcation Board
Mr AM Adam
Deputy Chairperson: Municipal Demarcation Board
Mr MH Manjezi
Acting Chief Executive Officer
Mr A Ramagadza
Executive Manager: Operations and Research
Ms MS Mahlangu
Acting Chief Financial Officer

3. OUTLINE OF PRESENTATION
PURPOSE OF THE PRESENTATION
INSTITUTIONAL ARRANGEMENTS
LEGISLATIVE MANDATE OF THE BOARD
MDB VISION, MISSION AND VALUES
BROAD PROCESS AND TIMEFRAMES
2015 TO 2020 STRATEGIC PLAN
EMERGING RISKS
KEY CHALLENGES
2015/16 ANNUAL PERFORMANCE PLAN
BUDGET OVER THE MTEF
BUDGET FORECAST AND UTILIZATION OF THE RESERVES
CONCLUDING REMARKS

4. PURPOSE OF THE PRESENTATION
To enable the Portfolio Committee to discharge its mandate of oversight on Budget Vote 4, specifically on the Municipal Demarcation Board
To present to the Portfolio Committee:
MDB Strategic Plan for period ;
The Annual Performance Plan for the 2015/16 financial year;
The budget allocation of the institution;
Challenges encountered by the institution.

5. INSTITUTIONAL ARRANGEMENTS
THE BOARD
The Board is led by an Executive Chairperson, and discharges its duties through subcommittees of the Board which are:
Executive Committee
Policy and Research Committee
Boundaries, Powers and Functions Committee
Remuneration and Human Capital Committee
Audit and Risk Committee
ADMINISTRATION
The administration supports the Board and is led by a Chief Executive Officer who is an Accounting Officer. The institution has four programmes which are:
Operations
Research and Knowledge management
Finance
Corporate Services

6. LEGISLATIVE MANDATE Section 155(3)(b) of the Constitution
Section 4(a) of the Municipal Demarcation Act 27 of 1998 (“MDA”)
Section 4 of the Municipal Structures Act 117 of 1998 (“MSA”) provides for categorisation of municipalities
Determination of municipal outer boundaries
Schedule 1 to the MSA – MDB, after consultation with the Electoral Commission must delimit wards for purposes of local elections
Delimitation of municipal ward boundaries
Section 85 of MSA provides for the MDB to assess municipal capacity when determining boundaries
Impact analysis and evaluation: Opportunity to evaluate impact of Board decisions
Assessment of municipal capacity
Section 4(b) of the MDA
Opportunity to follow through on implementation of municipal boundary redeterminations
Rendering of advisory services to stakeholders

7. MDB VISION, MISSION AND VALUES
The leading demarcation and spatial knowledge hub.
Mission
To produce municipal and ward boundaries that are functional beyond reproach and contributes towards a responsive spatial configuration, including municipal capacity assessments that lay the foundation for a developmental local government.
Values
Independence
Fairness, transparent and integrity
Stakeholder engagement
Knowledge sharing
Good Governance

9. 2015 to 2020
Strategic Plan

10. KEY STRATEGIC GOALS Organisational review & re-alignment
Determination & re-determination of municipal boundaries
Delimit wards to facilitate local government elections
Municipal Capacity Assessments
Research & Knowledge management
Public participation and stakeholder engagement
Good Governance

11. 2015 - 2020 STRATEGIC GOALS Strategic Outcome Orientated Goals
Determine and re-determine municipal outer boundaries
Delimit wards to facilitate local elections.
Assess the capacity of municipalities
Goal Statement
Determine and re-determine municipal boundaries to enhance spatial and economic integration in line with the demarcation criteria.
Provide pre-and post-demarcation coordination and support to ensure efficient and sustainable implementation of the Board determinations
Advise service delivery departments of changes to municipal boundaries.
Delimit wards for all municipalities that qualify to have wards into wards during 2016 and 2021 in terms of Schedule 1 to the Local Government: Municipal Structures Act, 1998.
Handover of finalised wards to the IEC to facilitate the local elections.
Conduct capacity assessments of municipalities to inform boundary determinations and adjustment of functions between district and local municipalities.
Revise the capacity assessment model.

12. 2015 - 2020 STRATEGIC GOALS cont…
Strategic Outcome Orientated Goals
Strengthen Research and Knowledge Management
Improved Public Engagement and Communication
Sound Financial Management and Good Governance
Goal Statement
Initiate research & form partnerships to develop and exchange spatial research data that will inform decision making on boundary matters.
Coordinate and process data to produce information that will add value to the planning processes of municipalities.
Create platforms to strengthen public participation and broad citizen engagement in the demarcation processes.
Strengthen partnerships with key stakeholders to improve coordination and integration.
Create awareness and understanding of the MDB mandate.
Rebrand the organization in line with its new vision, mission & values.
Ensure effective management, planning and efficient use resources to accomplish strategic goals.
Create an environment that ensures adherence to laws, regulations, organizational policies, processes, systems and practices.
Develop and nurture capabilities to ensure a pool of skills to drive implementation of the MDB strategy.

13. 2015 - 2020 STRATEGIC OBJECTIVES
Medium term target
2015/16
2016/17
2017/18
2018/2019
2019/2020 1
Determination and re-determination of municipal boundaries
100% of requests for boundary re-determinations considered and processed
Municipal boundary re-determination policy and procedures. developed
Pre-section 26 consultations with stakeholders to validate proposed re-determinations finalized
Section 26 process, including publication inviting and receiving views and representation published
Municipal boundary re-determinations completed 2
Delimit wards to facilitate local government elections
100% of wards for the 2016 local government elections finalised
Report on the evaluation of the ward delimitation process prepared
Review of the ward delimitation Policy and procedures finalised
Draft plan for the 2021 ward delimitation completed
Commencement of the ward delimitation process

14. 2015 - 2020 STRATEGIC OBJECTIVES
Medium term target
2015/16
2016/17
2017/18
2018/2019
2019/2020 3
Capacity Assessments
Develop and design a new and relevant capacity assessment model
Administer and manage capacity assessment service providers
Develop and build an in-house capacity assessment capability
Conduct capacity assessments in-house
Implement lessons learned from previous capacity assessments 4
Knowledge Development and partnerships with other similar research institutions
Develop research themes and research plan
Create and write policy documents for research knowledge management
Establish relationships with similar organizations and international demarcation boards
Creation, implementation and handover of repository and database to further knowledge management
Conduct annual systems review and updating of repository and database

15. 2015 - 2020 STRATEGIC OBJECTIVES
Medium term target
2015/16
2016/17
2017/18
2018/2019
2019/2020 5
Ensure Good Governance and Sound Financial Management
Improve system of internal controls and an internal audit rating 2
Improve system of internal controls and an internal audit rating 1 (fully effective and adequate systems of internal control)
Clean audit
Diversify sources of revenue and secure four revenue streams
Effective management of secured funding
Diversify sources of revenue and secure five additional revenue streams

16. 2015 - 2020 STRATEGIC OBJECTIVES
Medium term target
2015/16
2016/17
2017/18
2018/2019
2019/2020 6
Public awareness and stakeholder engagement
Leverage Stakeholder relations and create MDB specific stakeholder platforms
Develop internal and external communication channels
Maintain and monitor
internal and external communication channels
Strategic brand building
Re-branding
Annual brand building

17. 2015 - 2020 STRATEGIC OBJECTIVES
Medium term target
2015/16
2016/17
2017/18
2018/2019
2019/2020 7
Human Resources Management
Develop a revised organizational structure and secure funding 
Implement revised organizational structure
Monitor revised organisational structure and its effectiveness
Monitor revised organisational structure and its effectiveness
Develop and implement a credible performance management
system
Continuously implement a credible performance management system 
Continuously implement a credible performance management system. 
Continuously implement a credible performance management system  
Establish a continuous development programme for staff and management  
Implement the development programme for staff and management
Monitor and implement the development programme for staff and management

18. 2015 - 2020 STRATEGIC OBJECTIVES
Medium term target
2015/16
2016/17
2017/18
2018/2019
2019/2020
Human Resources Management
Develop a remuneration strategy and framework
Implement a remuneration strategy and framework
Monitor the reviewed remuneration strategy and framework
Implement Integrated Human Resources Plan

19. 2015 - 2020 STRATEGIC OBJECTIVES
Medium term target
2015/16
2016/17
2017/18
2018/2019
2019/2020 8
Ensure good and sustainable corporate governance
Submit proposed amendments and Regulations to Minister
Implement and Monitor legislative compliance
Implement Monitor legislative compliance
Review the Combined Assurance Model
Policies reviewed and new policies drafted
Review/draft new policies

20. EMERGING RISKS Risk Mitigation
Insufficient human and financial resources
Review organisational structure;
Ensure optimal utilisation of existing personnel.
Inadequate public and stakeholder engagement in demarcation processes
Establishing provincial presence;
Explore better ways of enhancing collaboration with stakeholders.
Litigation in dispute of demarcation decisions
Enhance stakeholder engagement;
Conduct thorough background research and consistent application of demarcation criteria.

21. KEY CHALLENGES
Strategy and mandate incompatible with current resources and capabilities
Very lean organizational structure e.g. only 35 approved posts, 8 of which are on contract.
Resultant over reliance on consultants;
Slow adaptation to the local government sector dynamics.
Negative public perception.
Lack of a provincial footprint creates disconnection with the public.

22. 2015/16 Annual Performance Plan

23. PROGRAMMES SUPPORTING IMPLEMENTATION OF STRATEGY
The implementation of the strategy is supported by three programmes as follows:
Programme 1: Operations
The programme gives effect to the institution’s legislative mandate of determining and re-determining municipal boundaries, appropriate categorisation of municipalities, advisory service on the alignment of service delivery boundaries to municipal boundaries and delimitation of municipal wards for local government elections.
Programme 2: Research and Knowledge management
The programme will conduct municipal capacity assessment to support decisions made by the Board on boundary demarcations.
The programme included knowledge development and management to facilitate optimal decision making and to position the Board as a knowledge hub on all matters involving spatial planning and boundary demarcations.

24. PROGRAMMES SUPPORTING IMPLEMENTATION OF STRATEGY
Programme 3: Financial Management and Accounting
This programme leads financial strategy of the institution and contributes toward resourcing of planned programmes. Focus over the next five years will be:
Optimising financial resources from traditional sources and to secure new opportunities;
Enhance accountability and reporting measures by delivering statutory reporting requirements and management information;
Contribute towards value for money through effective supply chain management services;
Compliance to PFMA legislation, regulations & MDB policies and procedures.
Programme 4: Corporate Services
This programme provides corporate services to all the other programmes within the organisations including:
Human Capital & Administration
Communications & Stakeholder Management
Legal Services and Board Secretariat
Information Technology

25. 2015 ANNUAL PERFORMANCE TARGETS Programme 1
Strategic Objective
Performance indicator
2015/16 Annual Target
Activities
2015/16 Budget
Determination and re-determination of municipal boundaries.
All requests for boundary re-determinations processed.
1.1
100% of requests for boundary re-determinations considered and processed.
Conduct formal investigations and/or public meetings by 30 June 2015.
Publish Section 21 notices after resolution by the Board.
Publish Section 21(5) notices by 31 July 2015.
R  
Delimit wards to facilitate local government elections.
Delimit wards for all municipalities that qualify to have wards.
2.1
100% of wards for the 2016 local government elections finalised.
Ward consultative meetings conducted for qualifying municipalities.
Consider and map all submissions received and publish notices for ward objections by 30 May 2015.
Publication of final wards by 30 September 2015, and for municipalities affected by Section 22 request by 30 November 2015.

26. 2015 ANNUAL PERFORMANCE TARGETS Programme 2
Strategic Objective
Performance indicator
2015/16 Annual Target
Activities
2015/16 Budget
Capacity Assessments
Date by which to develop a new capacity assessment model.
3.1
New capacity model developed by 30 September 2015.
Review existing models and models of other departments.
Test model and evaluate results from the pilot study.
Report on challenges and constraints.
R  
Knowledge Development and partnerships with other similar research institutions.
Number of partnerships established with other similar research institutions
4.1
Four partnerships established with other similar research institutions.
Identify and contact organisations conducting similar research both local and international.
Write report on progress towards establishing partnerships for knowledge sharing.
Co-produce a national event on knowledge sharing for spatial planning.
Demarcation Review Symposium
4.2
Demarcation Review Symposium held.
Conceptualization and identify resources for symposium.
Host symposium and compile evaluation report to inform policy and future practices.

27. 2015 ANNUAL PERFORMANCE TARGETS PROGRAMME 3
Strategic Objective
Performance indicator
2015/16 Annual Target
Activities
2015/16 Budget
Ensure Good Governance and sound financial management
Opinion of the Auditor General on Annual Financial Statements
5.1
Clean audit (Unqualified audit without emphasis of matter)
Clean audit (Unqualified audit without emphasis of matter).
R  
Internal audit rating
5.2
Internal audit rating 2 (audit objectives met with housekeeping matters)
Internal audit rating 2 (audit objectives met with housekeeping matters).
Number of risk management reports
5.3
Four quarterly risk management reports produced
Quarterly risk assessments conducted and reports produced.
Number of findings on non-compliance with cost containment measures
5.4
Zero instances of non-compliance with National Treasury cost containment measures
Zero instances of non-compliance with National Treasury cost containment measures.
Number of sources of revenue
5.5
One (1) additional source of revenue or funding
Secure One (1) additional source of revenue or funding.
Frequency of Organisational and Financial Performance Monitoring Reporting
5.6
One (1) Organisational and Financial Performance Monitoring Report issued
Quarterly Organisational and Financial Performance Monitoring work sessions conducted and report produced.

28. 2015 ANNUAL PERFORMANCE TARGETS PROGRAMME 4
Strategic Objective
Performance indicator
2015/16 Annual Target
Activities
2015/16 Budget
Public awareness and stakeholder engagement
Number of MDB stakeholder engagement platforms created for public engagement.
6.1
Six (6) MDB Stakeholder engagement platforms created.
R  
Number of internal communication activities.
6.2
Four (4) internal communication activities
Quarterly internal newsletters published
Number of external communication activities.
6.3
Four (4) external communication activities
One educational DVD developed.
Three corporate publications.
One social media education campaign on Board mandate and roles.
Number of media analysis reports.
6.4
Four (4) media analysis reports
Four (4) media analysis reports.
Number of perception surveys.
6.5
Two (2) Perception surveys
One (1) internal survey completed.
One (1) external perception survey completed.
Number of brand building campaigns.
6.6
One (1) media campaign
Ward handover media campaign.

29. 2015 ANNUAL PERFORMANCE TARGETS PROGRAMME 4 cont…..
Strategic Objective
Performance indicator
2015/16 Annual Target
Activities
2015/16 Budget
Human Resources Management
Date by which an optimally functioning organisational structure is in place.
7.1
Approval of the proposed, revised organisational structure by 30 June 2015.
Resourcing of the approved structure.
Migration of staff members to new positions and change management.
Preparation for filling of positions in the structure. (Once assurance of finance has been received from NT).
R  
Percentage of employees on establishment having performance contracts in place.
7.2
100% of staff having performance management contracts in place.
Ensure that all staff members have performance management contracts in place.
Frequency of conducting Performance Assessments.
7.3
Conduct performance assessments twice a year per staff member.

30. 2015 ANNUAL PERFORMANCE TARGETS PROGRAMME 4 cont….
Strategic Objective
Performance indicator
2015/16 Annual Target
Activities
2015/16 Budget
Human Resources Management
Number of teambuilding, leadership, change management and people management interventions.
7.4
Two (2) interventions: teambuilding, leadership, change management and people management interventions conducted.
Date by which to complete evaluation of new remuneration strategy.
7.5
New remuneration strategy evaluated by 31 March 2016.
Develop new remuneration strategy and framework.
Consult with key stakeholders.
Implement new remuneration strategy after approval from Board.
Number of wellness interventions conducted.
7.6
Four (4) employee wellness intervention conducted.
Quarterly employee wellness interventions conducted.
Percentage of employees developed.
7.7
100% of employees to have Personal Development Plans in place and adhered to.
Ensure that all staff members have Personal Development Plans in place

31. 2015 ANNUAL PERFORMANCE TARGETS PROGRAMME 4 cont….
Strategic Objective
Performance indicator
2015/16 Annual Target
Activities
2015/16 Budget
Ensure good and sustainable corporate governance
Date by which proposed amendments are compiled, approved by Board and submitted to Minister
8.1
Submit proposed amendments to legislation and proposed Regulations for Municipal Demarcation Act by 31 March 2016
Identify legislation requiring consolidation and amendments.
Compile proposed amendments and consolidations.
Draft regulations for the Municipal Demarcation Act.
Submit proposed amendments and regulations to Minister.
R  
Percentage of policies reviewed
8.2
100% of all policies scheduled for review
Review all policies.
Number of quarterly compliance reports
8.3
Four (4) Compliance reports produced
Quarterly compliance reports produced.
Information technology services
Website visitor numbers
9.1
Increase website visitor numbers by 25%.
Identify website short comings.
Develop and design new website. Develop a procedure for improving website content.
Launch new website and collect user feedback.
Market new website.
R  
Infrastructure implemented
9.2
Implement new core infrastructure.
Implement and maintain infrastructure.
Monitor performance.

32. Medium Term Expenditure Framework

33. BUDGET Budgeted expenditure by economic classification Audited Outcome
Revised estimate
Medium term Expenditure Estimates
R thousand
2013/14
2014/15
2015/16
2016/17
2017/18
REVENUE
Transfers - Appropriated funds
42 182
44 230
45 793
48 220
50 631
Other income
948
840
620
496
149
Total revenue
43 130
45 070
46 413
48 716
50 780
OPERATING EXPENDITURE
Compensation of employees
17 990
22 651
23 653
43 534
46 843
Lease payments
2 336
3 592
3 211
5 137
Goods and Services
24 390
23 699
36 401
33 923
36 410
TOTAL OPERATING EXPENSES
44 716
49 941
63 264
82 595
88 389
OPERATING SURPLUS/ (DEFICIT)
(1 586)
(4 871)
(16 851)
(33 879)
(37 610)
CAPITAL EXPENDITURE
Total capital investment
689
3 322
1 785
6 507
490

34. BUDGET FORECAST AND RESERVES (CASH)

35. MEDIUM TERM EXPENDITURE FRAMEWORK Utilisation of accumulated savings
Actual for 2013/14
Budget for 2014/15
Budget for 2015/16
Budget for 2016/17
Budget for 2017/18
Government Grants
Other Income
Total Income
Total Expenditure
Projected Surplus/Deficit for the period (annually)
Actual/Projected balance of accumulated reserves (cash)

36. MEDIUM TERM EXPENDITURE FRAMEWORK Key Cost Drivers
Institutional capacity and capabilities commensurate with the mandate.
Research activities to support Board decisions, add value to its advisory role and increase revenue streams.
Public participation and stakeholder engagement.
Minister’s section 22(b) proposals in line with Back to Basics.

37. CONCLUDING REMARKS
The Board needs resources to ensure successful implementation of the strategic plan.
While the 2015/16 shortfall will be funded from accumulated savings (under expenditure), the Board will not have sufficient funds over the MTEF period.

38. Thank you!