1. Minimum Competency Regulations
MUNICIPAL FINANCE MANAGEMENT ACT
No. 56 of 2003
TV Pillay
MFMA Unit

2. Background
The White paper on Local Government - Systematic programme to develop high level management and front-line worker capacities in local government
The Constitution - Section 154(1) - by legislative and other measures must strengthen municipal capacity
Municipal Finance Management Act – meet the objectives and assist implementation
Improving capacity and skills of officials (enhancing current and build new skills)
Address financial management challenges
Reinforce sustainable practices
Leading to improved delivery of services

3. Research 278 Senior municipal managers - levels of qualificationsEC FS GT
KZN LM MP NC NW WC
National %
No Data 2 1 4
1.4
Pre-Matric
0.4
Matric only 15
5.4
Matric and Diplomas 8 11 13 7 27 6 85
30.6
Undergraduate degree 10 9 5 55
19.8
Undergraduate degree and Diplomas 3 35
12.6
Under and post graduate 14 66
23.7
Under/Post graduate and Diplomas 17
6.1
Total 29 31 44 25 60 24 28 12
278
100%

4. Research 278 Senior municipal managers - levels of qualifications by sector/typeFS GT
KZN LM MP NC NW WC
National %
No Data 2 1 4
1.4
Teaching 11 5 39
14.0
Finance 7 8 3 27
9.7
Legal 10 38
13.7
Public Admin. 6 13 12 34
103
37.1
Other 9 67
24.1
Total 29 31 44 25 60 22 28
278
100%

5. Background MFMA sections
S 83, Municipalities/ Entities accounting officer, senior managers, CFO and other financial officials must meet financial management competency levels
S Supply Chain Management accounting officer and all other officials of a municipality or municipal entity involved in the implementation of the SCM policy must meet the prescribed competency levels

6. Regulations Who do the regulations apply to?
Accounting Officer / Municipal Manager
Chief Financial Officers
All other Senior Managers (directly accountable to AO)
Financial Officials at middle management level
Supply Chain Management - Heads of SCM and Senior Managers directly accountable to the AO/MM
Differentiation by category (capacity & budget)
Applies to municipalities & entities

7. Regulations Differentiation / Categories:
Municipal capacity (High, Medium & Low)
Functions performed
Budget size:
< R500 million: 250 municipalities
> R500 million: 33 municipalities
Must include the budget of municipal entities

8. Regulations
Extensive consultation - dplg, SALGA, provincial departments, DPSA, municipalities
6 regional workshops (all provinces) – March and April
All municipalities invited
Total number of 558 participants
470 municipal officials
71 SALGA / dplg / Prov LG / Prov Treasuries
17 educational institutions
Complements other government efforts
Consistent with the principles of the Municipal Systems Act, including the Municipal Performance Regulations

9. Regulations Supports implementation
Municipal Manager responsible for MFMA
Assists in establishment of Budget and Treasury Office
Strengthen skills of top management team
SCM Unit - greater integration
Support employment of qualified personnel
Improve recruitment processes and adverts for MM, CFO, senior managers and SCM managers

10. Transitional Provisions
All municipalities and entities to commence assessment of officials to identify competency gaps
Enrol for SAQA recognised qualifications, registered service providers only (test based)
Attainment of competencies to be included in performance agreements
NQF 4 = matric
NQF 5 = diploma
NQF 6 = degree
NQF 7 = honours & postgraduate

11. Prescribed Unit Standards
NQF Level 5
NQF Level L6
Title
116339
Apply risk management in municipalities
116341
Conduct performance management to a municipal environment
116342
Apply approaches to managing municipal income and expenditure within a multi-year framework
116343
Apply the principles of ethics in a municipal environment
116345
Apply the principles of budgeting within a municipality
116348
Conduct stakeholder consultation around municipal finance programmes
116351
Conduct audits, planning and implementation in a municipality
116353
Participate in the design and implementation of municipal SCM
116358
Contribute to the strategic planning process in a municipality
116361
Interpret legislation and policy affecting municipal financial management
116362
Manage a municipality's assets and liabilities

12. Prescribed Unit Standards (cont)
NQF Level 5
NQF Level L6
Title
116363
Prepare and analyse municipal financial reports
116364
Plan a municipal budgeting and reporting cycle
119331
Conduct working capital management activities in accordance with sound financial management policy
119334
Discuss the selected legislative regulatory framework governing the public sector management and administration environment
119341
Apply cost management information systems in the preparation of management reports
119343 
Apply operations research principles and tools in the management of project activities and resources
119348
Apply selected GRAP to periodic accounting reporting process
119350
Apply accounting principles and procedures in the preparation of reports and decision making
119351 
Apply principles of computerised systems to manage data and reports relevant to the public sector administration
119352
Apply principles of information systems to public finance and administration

13. Recognition of Prior Learning
Is the process of recognising and assigning credit values to the learning that a person has undertaken on an informal basis, for example, in the form of work experience or the attendance of short courses
Identify what the official knows and can do
Match the official’s skills, knowledge and experience to specific unit standards and strategic priorities
Assess the official against unit standards
Credit official according to assessment
These are activities carried out by an assessor (subject matter expert) accredited by SETA-ETQA

14. Guidelines Competency Competency GUIDELINES GUIDELINES Competency
Accounting
Officer
Competency
GUIDELINES
Chief
Financial
Officer
Competency
REGULATIONS
MFMA
Competency
GUIDELINES
Senior
Managers
Competency
GUIDELINES
Finance
Officials
Middle
Management
Competency
GUIDELINES
Head SCM
&
SCM Senior
Managers

15. Chief Financial Officer
MUNICIPAL FINANCE MANAGEMENT ACT
No. 56 of 2003
Municipal Regulations on Minimum Competency levels

16. Chief Financial Officer
Higher education qualification
Qualification
Municipal capacity and budget
At least NQF level 6, or
Certificate in Municipal Financial Management (SAQA No )
All Low capacity municipalities;
Medium capacity municipalities with annual budgets of a value below R500 million for the current year;
Municipal entities with annual budgets of a value below R500 million for the current year.
At least NQF level 7, or
Chartered Accountant (SA)
All High capacity municipalities;
Medium capacity municipalities with annual budgets of a value equal to or above R500 million for the current year;
Municipal entities with annual budgets of a value equal to or above R500 million for the current year.

17. Definitions Calculation of the value of the annual budget includes:
Total operating and capital expenditure
In the case of a parent municipality, the aggregated value of the annual budget of the municipality + its municipal entity(s)

18. Chief Financial Officer
Work related experience:
Work-Related Experience
Municipal capacity and budget
5 years at middle management level
All Low capacity municipalities;
Medium capacity municipalities with annual budgets of a value below R500 million for the current year;
Municipal entities with annual budgets of a value below R500 million for the current year.
7 years at senior & middle management level (2 of the 7 years must be at senior management level)
All High capacity municipalities;
Medium capacity municipalities with annual budgets of a value equal to or above R500 million for the current year;
Municipal entities with annual budgets of a value equal to or above R500 million for the current year.

19. Chief Financial Officer
Competency areas: Unit Standards
Strategic leadership and management - 2
Strategic financial management - 3
Operational financial management - 6
Governance, ethics & values in financial management-1
Financial and performance reporting - 4
Risk and change management - 1
Project management - 1
Legislation, policy and implementation -1
Stakeholder relations - 1
Supply Chain Management - 1
Audit and Assurance - 1

20. Chief Financial Officer
Example - Unit Standards
Strategic financial management
CFO required to be competent in unit standard
“Apply approaches to managing municipal income and expenditure in a multi-year framework”

21. Chief Financial Officer
Unit Standards include –
Specific outcomes and assessment criteria e.g.:
Develop approaches to managing a municipality's revenue in a sustainable manner
Apply the different approaches to forecasting municipal income and expenditure over the medium term
Contribute to the design of rates, tariffs and user charges

22. Chief Financial Officer
Supporting Guideline:
“Guideline for Municipal Competency levels: Chief Financial Officers”
Contains table of 11 competency areas (pages 6 – 18)
Each competency area in table linked to:
specific competencies required
detail of knowledge & skills required

23. Chief Financial Officer
Guidelines example:
Strategic Financial Management (competency area 2) – page 7
“The ability to guide the management of an effective, economic and efficient finance function, supported by effective financial management policies and practices.”

24. Chief Financial Officer
Strategic Financial management (cont):
Examples of knowledge & skills required:
Formulating and implementing finance strategies, which enhance good financial management and decision making practices across the finance function
Developing and implementing financial policies and systems to ensure efficient and effective financial administration
Developing, implementing and maintaining financial management guidelines, financial instructions, credit control procedures, debt collection and related financial policies

25. Consultation Consider similar competency regs for other sectors
Apply higher levels for SCM officials
Support training initiatives from SETA and SAMDI
Further resources may be required for roll out
Explore possibility for further exemptions
M F M A

26. Monitoring and Support
MUNICIPAL FINANCE MANAGEMENT ACT
No. 56 of 2003
Municipal Regulations on Minimum Competency levels

27. Monitoring & Reporting
Municipal Manager/ Chief Executive Officer responsible to monitor & ensure compliance
Report twice yearly on compliance, as at 30 June & 31 December (using supporting schedule)
Submit copy to National and Provincial government within one month
Municipalities to include consolidated information on all entities
Disclosure - copy of 30 June report to be included in the municipal Annual Report

28. Monitoring & Reporting
Report to show the number of financial & SCM officials:
employed
that have undergone assessment
who’s performance agreements include competency attainment
that meet the competency levels

29. 5 ½ years implementation
Commencement
Effective date: 1 July 2007
Fully operational: 1 January 2013
Phase-in
5 ½ years implementation

30. Guiding Implementation Steps for MM
Establish steering committee, reporting to the Municipal Manager
Staff competency assessment to identify gaps (assessor to be LGSETA accredited)
Prepare training strategy and budget up to 1/1/2013
Staff to undertake SAQA recognised training to address identified gaps
Performance agreements must incorporate attainment of competencies
Recruitment procedures to include new competency requirements

31. National Treasury Support
Ongoing guidance and support towards effective implementation
Issuance of Circulars
Review training provider material
Engagement with service providers
(WBS, Afrec, TuT) other universities
MFMA Internship programme
MFMA Foundation Interactive DVD Learning
Workshops, seminars, events
Finance Management Grant (partial support)

32. Training Providers SAQA recognised qualifications
Certificate in Municipal Financial Management (SAQA ID No )
National Diploma: Public Finance Management and Administration (SAQA ID No )
NT validated training courses
refer under “Training & Validation”

33. Municipal Regulations on Minimum Competency levels
Thank You Website:
MUNICIPAL FINANCE MANAGEMENT ACT
No. 56 of 2003
Municipal Regulations on Minimum Competency levels