1. ABC of Clean Administration Back to basics through Performance Management service Institute of Municipal Finance Officers & Related Professions IMFO Audit & Risk Indaba 2015 Performance Management System in action to address the Public Demands Fienie van Rensburg: Institute for Performance Management

2. PM Multi- disciplinary Field Back to Basics through Performance Management Service All disciplines need to ensure that public monies are used responsibly and effectively to build a better life for all! This requires a multi- disciplinary and integrated approach! Institute of Municipal Finance Officers & Related Professions

3. A clean audit not necessarily addresses the public demand! Almost two thirds of people currently do not receive basic humanitarian rights and demands - It is now time for PM Auditing to move to the next level of implementation Institute of Municipal Finance Officers & Related Professions Clean Audit the Solution? Back to Basics through Performance Management Service

4. Back to Basics in action to address the public demands Back to basics through Performance Management service Institute of Municipal Finance Officers & Related Professions Municipalities are no stranger to the challenges of limited financial resources and a shortage of skilled administrators The Mail and Guardian 13 March 2015 reports:  “The state of performance of municipalities is of concern,” ... many municipalities were in intensive care, as reported by the auditor-general A solution, or not?  Some Back to Basics awards encourages a clean administration  The awards recognises, financial management, basic service delivery, governance, LED and public participation  Is this enough?

5. Performance Management System in action to address the public demands Back to basics through Performance Management service: One very important truth needs to be be addressed Integration  unprecedented Ward-based Planning Model  Integrated with the Integrated Development Plan  Integrated with the SDBIP  Integrated with measurement (service standards), costing  Aligned to the Provincial Annual Performance Plans Institute of Municipal Finance Officers & Related Professions

6. Performance Management the driver to address public demand Back to basics through Performance Management service There is only one approach by which these plans can be developed to meet public demand! ? Multi-disciplinary  Planning  Monitoring  Reporting  Evaluation  Through effective Measurement Performance Management  Strategic Offices should focus at least 80% of their time on integrated performance management for better service delivery to address public demand Strategic Offices must have the powers to plan, monitor, report and evaluate multi- disciplinary how public demand is met Institute of Municipal Finance Officers & Related Professions

7. Performance Measurement a requirement to address the public demands Back to basics through Performance Management service Public demand can only be achieved through  Equity  Effectivity  Efficiency  Economy .... But most importantly through a prioritisation model Performance management as regulated:  Holds the tool to address public demand  How ??? One plans through the public One reports back to the public Institute of Municipal Finance Officers & Related Professions

8. Performance Management System in action to address the public demands Back to basics through Performance Management service It is of no interest to the public to know the machinery how services are implemented  They want to see planning per ward ito  What, when and by which standards  Equity. Effectivity, Efficiency and Economy is the system behind the scenes to drive it The questions we need to answer:  Do we go back to audit the unit cost in the budget against the cost in real term?  Do we go back and report on the scheduled time frames completed?  Do we go back and report holistically as per the Measurement Model how the APP’s interrelates with the IDP’s and how it interrelates with the Wards?  Do we go back and report on the standards delivered against the time frames? Why not? Institute of Municipal Finance Officers & Related Professions

9. Performance Management System in action to address the public demands Back to basics through Performance Management service An integrated multi-disciplinary approach is needed internally to manage, to monitor, to report and to evaluate of which the components are:  An integrated ICT platform at least between municipalities and provinces  An integrated ICT platform at least between municipalities and wards / Councillors  An integrated ICT platform between different systems within the organ of state An all inclusive PM methodology: An integrated model between PM decision-making, PM financial unit cost, PM auditing, PM human capital and PM process management must be promoted Institute of Municipal Finance Officers & Related Professions

10. Performance Management System in action to address the public demands Back to basics through Performance Management service We need to maximise fiscal capacity  Focus on inadequacies and challenges  Systems  Processes  People  Unit Cost = service standards and time frames Aligned to ward based planning and delivery: Ward Based Planning Performance Based Budgeting Strategic planning SDBIP Business Unit / Operational Alignment Operational Unit Cost Project management Cost Institute of Municipal Finance Officers & Related Professions

11. Performance Management System in action to address the public demands Back to basics through Performance Management service Indeed a clean audit not necessarily achieves a good performance if multi- disciplinary process integration and Unit cost have not been achieved! Is it time to shift now to PBB? Institute of Municipal Finance Officers & Related Professions

12. Performance Management System in action to address the public demands Back to basics through Performance Management service Audits  Must start to include a multi-disciplinary approach to ensure  Service Delivery  Financial Health  Good governance  Is adequately measured, integrated and costed Why after years does this not happen? New approach is maybe required The fundamental approach on PM auditing needs to shift to include operational delivery Institute of Municipal Finance Officers & Related Professions

13. Need to return to service standards to address the public demand  On the Core Services Clean drinking water, sanitation, electricity, housing, waste removal and roads We need to start to develop the how?  Service standards Effective measurement against the service standards Cost the processes that support the service standards Institute of Municipal Finance Officers & Related Professions Performance Management System in action to address the public demands Back to basics through Performance Management service

14. Performance Management System in action to address the public demands Back to basics through Performance Management service Need to return to the basics also in PM  How are we going to put our people first?  How are we going to get dysfunctional municipalities out of their state? Rekindle the spirit of effective service delivery:  Plan, Monitor, Report and Evaluate on specifics Time line Level of quality Cost against Unit 100% Expenditure Institute of Municipal Finance Officers & Related Professions

15. Performance Management System in action to address the public demands Back to basics through Performance Management service To do this we need to:  Develop service standards  Build processes with output measures  Pull it up into the costing per measure  Pull output measure into outcome and impact measures ito the public demand  Adjust strategy  Review IDP, ward based plans and other frameworks  Align APP’s with service delivery areas  Integrate across spheres of government  Ensure multi-disciplinary approach and re-structuring of governance arrangements  Monitor through appropriate ICT systems Institute of Municipal Finance Officers & Related Professions

16. Performance Management System in action to address the public demands Back to basics through Performance Management service Thus  Align service delivery and service standards with performance management  Align performance management with performance based costing and budgeting  Develop the ICT platform  Monitor and Report adequately ito service delivery cost time lines against public demand  Create public demand responsiveness platform Institute of Municipal Finance Officers & Related Professions

17. Defining Performance Management Planning Measurement Financial Alignment Systems Alignment Performance Management System in action to address the public demands Back to basics through Performance Management service

18. Processes hold the Key Back to basics through Performance Management service Institute of Municipal Finance Officers & Related Professions ProcessProcess can be classified as those routine procedures that are part of the department’s day to day operations. It can also be classified as those initiatives that are performed annually within the department and consists of –Input (resources) –The process will consist out of a number of activities / steps / procedures –Complying to a set of standards –Measurable outputs

19. We need to get the basics right! Institute of Municipal Finance Officers & Related Professions Performance Management System in action to address the public demands Back to basics through Performance Management service

20. Institute of Municipal Finance Officers & Related Professions The Measurement Challenge Back to basics through Performance Management service  Managing-for-results focuses on maximising benefits and minimising negative consequences  Effective and efficient performance measurement is regular measurement of the  results (outcomes and outputs)  efficiency of programmes/project processes (inputs, outputs)

21. Institute of Municipal Finance Officers & Related Professions The Measurement Solution Back to basics through Performance Management service Cost effectiveness Inputs (Finance) Outputs / outcomes (Service Delivery) Budget alignment Measurement

22. Institute of Municipal Finance Officers & Related Professions Importance of Financial Planning Back to basics through Performance Management service Alignment between the budget and the various plans compiled during the planning phase is imperative to ensure that sufficient financial resources are available to achieve the outcomes, outputs, activities and inputs relevant to objectives. Well-structured Plans Sufficient funds based on effective financial planning Success!

23. Institute of Municipal Finance Officers & Related Professions Clarify PBB cont… Back to basics through Performance Management service Consists of three elements: 1.The result or final outcome 2.The strategy or how to achieve the final outcome 3.The activity or what is to be done to achieve the final outcome 4.The report back to the Public

24. Institute of Municipal Finance Officers & Related Professions Performance Measurement and Based Budgeting Back to basics through Performance Management service  It is the practice of developing budgets based on the relationship between programme funding levels and expected results from that programme  PBB is a tool that management can use to manage more cost-effective and efficient budget outlays  PBB requires linking indicators to resources to ensure that strategy and planning meet execution and measurement

25. Institute of Municipal Finance Officers & Related Professions Ensuring Alignment Between Budgets and Plans Back to basics through Performance Management service Need to ask the following questions to ensure alignment between budgets and plans: What kind and how many services / products can be produced with available funds? Are services / products of good value and are they making a difference in the lives of citizens / clients / customers? Can only answer these by implementing performance- based budgeting

26. Institute of Municipal Finance Officers & Related Professions Link between Financial Planning and Costing Systems Back to basics through Performance Management service Related to financial planning Performance – based Budgeting (PBB) and Activity-based Costing (ABC) can be used to link finances with strategies to achieve institutional goals

27. Institute of Municipal Finance Officers & Related Professions Conclusion Back to basics through Performance Management service It is not that a Clean Audit is not important - it is that auditing should start to go beyond the existing PM auditing parameters and to start to focus on Unit cost for services to be delivered against service standards - then shall we start to meet the Public Demand

28. Thank You! Institute of Municipal Finance Officers & Related Professions