SALGA ANNUAL REPORT 2013/14

Transcription

1 1 SALGA ANNUAL REPORT 2013/14 Cllr Thabo Manyoni National Chairperson 21 October 2014

2 BACKGROUND The Annual Report 2013/14 demonstrates SALGA s activities and achievements throughout the financial year. It is intended to give members and stakeholders highlights on achievements against the organisations mandate as well as financial performance. Financial results are expressed alongside performance data for the year under review. 2

3 3 SALGA MANDATE SALGA Mandate Lobby, Advocate & Represent Employer Body Capacity Building Support & Advice Strategic Profiling Knowledge & Information Sharing Transform local government to enable it to fulfil its development al mandate. Lobby, advocate, protect and represent the interest of local government at relevant structures and platforms. Act as an employer body representing all municipal members and, by agreement, associate members. Build the capacity of the municipality as an institution as well as leadership and technical capacity of both Councillors and Officials. Support and advise our members on a range of issues to assist effective execution of their mandate. Build the profile and image of local government within South Africa as well as outside the country. Serve as the main hub of local government knowledge and intelligence and to facilitate peer learning within the sector The Voice of Local Government The Voice of Local Government

4 7 STRATEGIC GOALS 1) Accessible, equitable, sustainable services 2) Safe and healthy environment and communities 3) Coherent local planning & economic development 4) Effective, responsive and accountable local governance for communities 5) Human capital development in LG 6) Financially and organizationally capacitated municipalities 7) Effective and efficient SALGA administration. SALGA MANDATES 1. Representation 2. Employer Body 3. Capacity Building 4. Support and Advisory Role 5. Profiling Role 6. LG Knowledge Hub Risk SALGA National SALGA Provinces O-PMS INTER / NATIONAL CONTEXT 1. MDGs & Global Commitments 2. National Dev Plan & other national plans/policies 3. MTSF 4. LGTAS 5. Electoral Mandate (2011) APP I-PMS Budget Org Capacity SALGA 5 YEAR STRATEGIC PLAN APEX PRIORITIES: 1. Review of legislative & policy framework impacting negatively on LG. 2. Review of LG fiscal & financial management framework. 3. Improved municipal capacity. 4. Build LG Knowledge, Intelligence and Quality Management Differentiated Approach to Managing / Supporting Local Government

5 7 SALGA GOALS 1) Accessible, equitable, sustainable services 2) Safe and healthy environment and communities 3) Coherent local planning & economic development 4) Effective, responsive and accountable local governance for communities 5) Human capital development in LG 6) Financially and organizationally capacitated municipalities 7) Effective and efficient SALGA administration. SALGA MANDATES 1. Representation 2. Employer Body 3. Capacity Building 4. Support and Advisory Role 5. Profiling Role 6. LG Knowledge Hub Risk SALGA National SALGA Provinces O-PMS INTER / NATIONAL CONTEXT 1. MDGs & Global Commitments 2. National Dev Plan & other national plans/policies 3. MTSF 4. LGTAS 5. Electoral Mandate (2011) APP I-PMS Budget Org Capacity SALGA 5 YEAR STRATEGIC PLAN MINISTRY FOCUS: Back to Basics: Taking LG Forward 1. Putting people first and engaging with communities 2. Delivering basic services 3. Good governance 4. Sound financial management 5. Building capabilities APEX PRIORITIES 1. Review of legislative & policy framework impacting negatively on LG 2. Review of LG fiscal & financial management framework. 3. Improved municipal capacity.

6 BACKGROUND Year /13 Year /14 Year /15 Year /16 Year /17 ANNUAL REPORT 2013/14 Year 2/5 SALGA STRATEGIC PLAN

7 ORGANIZATIONAL PERFORMANCE (2013/14) 7

8 AUDITED ANNUAL PERFORMANCE OVERALL Maturing Phase 100 Sustainability Phase SALGA 2008 TO 2014 ANNUAL PERFORMANCE Sustainability Sustainability Phase Phase

9 12 AUDITED ANNUAL PERFORMANCE Steady Year-on Year Growth in OVERALL Organisational Performance Maturing Phase Sustainability Phase Sustainability Phase Sustainability Phase

10 AUDITED ANNUAL PERFORMANCE wrt 7 STRATEGIC GOALS SALGA Annual Performance Report Targets Achieved Percent (%) Not Achieved 1. LOCAL GOVERNMENT DELIVERING EQUITABLE AND SUSTAINABLE SERVICES SAFE AND HEALTHY ENVIRONMENT AND COMMUNITIES Percent (%) PLANNING AND SOCIO- ECONOMIC DEVELOPMENT AT LOCAL GOVERNMENT LEVEL EFFECTIVE, RESPONSIVE AND ACCOUNTABLE LOCAL GOVERNANCE TO COMMUNITIES HUMAN CAPITAL DEVELOPMENT IN LOCAL GOVERNMENT FINANCIALLY AND ORGANISATIONALLY CAPACITATED MUNICIPALITIES EFFECTIVE AND EFFICIENT ADMINISTRATION Total TARGETS iro SALGA ANNUAL PERFORMANCE PLAN

11 ANNUAL PERFORMANCE PER MANDATE 11

12 ANNUAL PERFORMANCE PER APEX PRIORITIES 12

13 Highlight of Achievements, Emerging Impact and Insights per Goal 13

14 Municipality Supported/ Program Implemented Assignment of housing function to six (6) metros: 1. Cape Town 2. Nelson Mandela Bay 3. Johannesburg 4. Tshwane, 5. Ekhurhuleni 6. EThekwini GOAL 1: Accessible, Equitable & sustainable Municipal Services Delivered by LG Type of support provided Lobbying and advocacy on various policy issues related to assignment Technical assistance on handover of assets, staff, projects and liabilities from provincial department to metros Information sharing workshops to facilitate communication on assignment processes; workshops to develop joint strategy. Impact of support provided by SALGA Following a SALGA submission to the LG Budget Forum in Oct 2013 on operational funding required for the metros to be assigned, a new conditional grant for 6 metros was introduced in the 2014/15 budget. The conditional grant provides operational funding to metros for the transition and to cover admin costs of the housing function on behalf of the provinces SALGA NEC engaged with DHS wrt assignment

15 Municipality Supported/ Program Implemented GOAL 1: Accessible, Equitable & sustainable Municipal Services Delivered by LG Type of support provided Impact of support provided by SALGA Local Government Infrastructure Grant Review Rehabilitation & refurbishment (renewal) Facilitated local government inputs to Infrastructure Grant Review Research into financing options for renewal of infrastructure The Review Options developed by National Treasury reflect local government preferences (direct grants) with less emphasis on indirect grants that go through sector departments Local government infrastructure grant review has taken maintenance and renewal challenges on board (which previously were not part of the scope of the review) Cost of services and benchmarking Bulk Water Tariff Developed a costing structure feeding into the dev of the Standard Chart of Accounts to be developed by NT. Prepared comments on the bulk water tariff proposal by water boards Municipalities have access to a sound cost structure for operating costs that can drive cost benchmarking Bulk water tariff of Overberg was reduced 15

16 Municipality Supported/ Program Implemented Benchmarking for water and sanitation services GOAL 1: Accessible, Equitable & sustainable Municipal Services Delivered by LG Type of support provided Produced a set of national benchmarks for water and sanitation services in rural and urban context Impact of support provided by SALGA Benefits to municipalities include a peer learning network, access to a structured Performance Indicator measurement system, and use of a web tool for managing performance improvement and data sharing. This resulted in increasing no. of municipalities obtaining blue and green drop City of Tshwane celebrating Blue Drop Status. The city and numerous others have been benchmarked highly and are used to pull others in pursuit of higher 16 overall standards across all municipalities

17 Municipality Supported/ Program Implemented GOAL 1: Accessible, Equitable & sustainable Municipal Services Delivered by LG Type of support provided Impact of support provided by SALGA Regularisation of illegal waste disposal facilities Regularisation of illegal waste disposal facilities 40 Municipalities have licensed and better managed waste disposal facilities with less environmental impacts and health hazards 17

18 Municipality Supported / Program Implemented GOAL 2 Safe and Healthy Environment and Communities Overview of support provided Program Implemented Impact of support provided by SALGA Municipal Health Services Audit: Support for all District Municipalities A MHS Annual Audit was conducted in municipalities & was used for the advocacy on funding of the function Submissions were made to the FFC & to NT. Municipalities have managed to get an increase in the equitable share from R5 to R7 per household. Most municipalities have been struggling to maintain the services due to lack of funding but now they have managed to save millions of rands that they would have otherwise had to divert from other services. Eg. The Eden District Municipality indicated that they were on the verge of retrenching their staff but now have managed to save about R3 million during this financial year due to the review of the funding model. 18

19 Municipality Supported/ Program Implemented GOAL 2 Safe and Healthy Environment and Communities Type of support provided Impact of support provided by SALGA 19 Municipalities supported to: Develop climate change risk and vulnerability assessments and Develop climate changes response strategies Technical support in developing climate change Risk and Vulnerability Assessments Technical support in developing Climate Change Response Strategies and Adaptation Plans 19 Municipalities enabled to translate climate science data (models for projecting rainfall and temperature) for localized scenario planning, thereby enriching decision making for infrastructure planning and dev. Enabled municipalities to access funding opportunities for climate change adaptation projects; eg R10 Million was allocated by the International Adaptation Fund to projects in Namakwa, Mgungundlhovu & Mopani District Municipalities

20 Municipality Supported/ Program Implemented SANTAM BAAM supported Disaster Mgmt in: - Mbombela LM - Ulundi LM - Mafikeng LM - Thulamela LM - Eden District DM GOAL 2 Safe and Healthy Environment and Communities Overview of support provided Program Implemented Capacity Building on Disaster Risk Management SANTAM Donated fire equipment (fire engines, GPS, early warning displays for hazards like floods) Impact of support provided by SALGA Enhanced response and efficiency of the Municipal Disaster Management Centres, competent staff certified to conduct fire risk assessments and basic fire awareness training to volunteers and communities. The early warning systems have reduced death incidents to zero during the recent December/January floods in the Western Cape coastal municipalities supported. 20

21 Municipality Supported/ Program Implemented GOAL 2 Safe and Healthy Environment and Communities Overview of support provided Program Implemented Impact of support provided by SALGA Mainstreaming of Women and other Vulnerable Groups issues. Establishment of the SALGA Women Commission Nationally & Provincially & Women Caucuses at municipal level. The launch of the SALGA Women Commission in provinces has fuelled the advocacy work women Councillors do in their own municipalities. Eg. The Mossel Bay Municipality has received a certificate of recognition from Gender Links for being the most progressive in dealing with gender issues in their municipality. Community Libraries - All Districts and Local Municipalities Submissions made to Department of Arts and Culture on the need for funding and support for municipalitiess on the provision of the service. The Department has introduced a Libraries and Information Services Bill which has since made provision for a Municipal Support Fund to be dispersed via Provincial Departments to municipalities 21

22 GOAL 3 Planning and Economic Development Municipality Supported/ Program Implemented Overview on supported provided Programme implemented Impact of support provided by SALGA Support municipalities to develop and implement LED friendly Informal Trading Regulations Content developed and workshops facilitated on informal economy, Red Tape Reduction and by-laws Improved approaches towards informal economy and SMMEs which enhance the economic environment and job creation opportunities Support municipalities on LED capacity building programmes that respond/ unlock municipal challenges Capacity development content for councillors on LED (what, why and how); what SPLUMA means for LED; project packaging and proposal writing, was developed and rolled out by SALGA 22 Improved councillor understanding of LED and their role there in Improved practitioner capacity to produce credible funding proposals that will enable catalytic LED interventions

23 GOAL 3 Planning and Economic Development Municipality Supported/ Program Implemented Overview on supported provided Programme implemented Impact of support provided by SALGA National and Provincial planning legislation & Regulations to facilitate coherent development planning legislation SALGA established a consultative forum comprising of wide spectrum of municipalities and made oral and written submissions during the parliamentary and NCOP processes. Inputs into: National Spatial Planning and Land Use Management Bill Free State Spatial Planning and Land Use Management Bill. 23 The Bill subsequently passed on 2 August 2013, reflects municipal planning as a competency of municipalities, a position which was confirmed by the constitutional court A similar approach was taken with regards to the Free State Land Use and Spatial Planning Bill-which will now be redrafted to incorporate SALGA s position

24 Municipality Supported/ Program Implemented Improved oversight in municipalities through building the capacity of MPACs. GOAL 4: Effective, Responsive & Accountable Local governance for communities Overview of support provided Program Implemented Developed a practical guide for the establishment of MPACs. Supported and trained municipalities to establish MPACs Munics in the Free State were assisted to develop TORs for shared services MPACs. Impact of support provided by SALGA By 2013 all provinces except the Western Cape had MPACs for all municipalities. Through dedicated support provided to municipalities, the establishment rate of MPACs in the Western Cape improved from an establishment rate of 50% in March 2013 to 80% in June MPACs were assisted to develop their own annual plans based on a draft generic annual plan developed by SALGA. This incl sharing good practices ito resourcing of and operations of MPACs in all categories of munics 24 Due to the SALGA support, MPACs have now been supported to become functional.

25 Province No. of Munics Munics with MPAC s EC % Munics with Audit Committees Munics with Internal Audit Units % % FS 24 24* 100% % % GP % % % KZN % % % LP % % % MP % % % NW % % % NC % WC % % % % % National % % % * Some in the form of shared services # Audit Committee for oversight Strengthening the Oversight and Accountability Mechanisms in Municipalities 25

26 Municipality Supported/ Program Implemented LG leading the fight against corruption and maladministration GOAL 4: Effective, Responsive & Accountable Local governance for communities Overview of support provided Program Implemented LG Anti-corruption summit held in November 2013: 3 discussion papers developed that will provide practical support to municipalities in dealing with corruption All municipalities present at the summit signed a pledge to commit to fighting corruption Impact of support provided by SALGA Due to publicity and coverage received the generalised view of LG as corrupt is gradually changing: At least public debate is now being contextualized SALGA has enhanced its profile by demonstrating leadership in facilitating the commitment to address corruption and mal-administration Following the summit SALGA adopted a proposed new Anti-corruption strategy that was submitted to COGTA 26

27 FIGHTING COLLUSION IN THE CONSTRUCTION INDUSTRY National Executive resolved that SALGA will be assisting the affected municipalities in pursuing the civil litigation against the construction companies and to recover the damages. This is however subject to the Councils resolutions of the affected municipalities. The resolutions have been drafted and the affected municipalities have been handed the resolutions for due consideration. SALGA has further engaged with the HAWKS, in an effort to create awareness to Municipalities of the implications of S34(1) of the Prevention and Combatting of Corrupt Activities Act 12 of 2004 (PRECCA).The individuals within the companies involved in the tendering process and management of the companies who conspired with each other in a corrupt manner are also alleged to have committed certain offences in terms of the Prevention Of Organised Crime Act, Act 121 of 1998(POCA). Engagements with the Competition Tribunal have been made and certificates have been issued according to specific projects and companies implicated. 27

28 FIGHTING COLLUSION IN THE CONSTRUCTION INDUSTRY MUNICIPALITY PROJECTS IMPLICATED FIRM Nelson Mandela Bay City of Joburg Ethekwini Polokwane NMB Stadium Soccer City N17 Road Link Northern Waste Water Durban ICC Bayhead Rd Ext Peter Mokaba Stadium Grinaker LTA/WBHO/Murray 7 Roberts/ Group 5/ Concor/Basil Read/ Stefanutti Grinaker LTA (Stefanutti) Group 5 (WBHO) Group 5 (Grinaker LTA) Group 5 /WBHO (Grinaker LTA) Stefanutti-Basil Read /WBHO WBHO/Liviero/Concor Mbombela Mbombela Stadium 28 Grinaker LTA/WBHO/Murray 7 Roberts/ Group 5/ Concor/Basil Read/ Stefanutti

29 Municipality Supported/ Program Implemented GOAL 4: Effective, Responsive & Accountable Local governance for communities Overview of support provided Program Implemented Impact of support provided by SALGA Review of Legislation impacting negatively on LG SALGA commented substantially on the PAM Bill: Participated in public hearings on the Bill Participated in the NCOP debate. Wrote a letter to the President requesting him not to assent to the Bill Although SALGA still has concerns on the content of the Bill, the current version is a much improved version compared to the one published in May 2013 SALGA has proactively initiated work on a revised OLG Bill and has engaged CoGTA on the work being done SALGA and COGTA now developing a Bill that will improve the ability of SALGA to fulfill its mandate. 29

30 Municipality Supported/ Program Implemented GOAL 4: Effective, Responsive & Accountable Local governance for communities Overview of support provided Program Implemented Impact of support provided by SALGA Review of Legislation impacting negatively on LG (Cont..) Since the promulgation of the Systems Amendment Act in 2011, SALGA continuously lobbied for the recognition of the fact that municipalities have the discretion to determine whether to appoint senior managers, on a fixed term or permanent basis. SALGA convinced COGTA of this view and the Regulations published in January 2014 provide for the said discretion of municipalities. SALGA at its NMA in November 2013 adopted proposals on amendments to the Systems and Structures Act that were submitted to COGTA for consideration. SALGA engaged Trade and Industry on the Business Licensing Bill. The Bill was subsequently 30 parked The uncertainty that the deletion of sect 57(7) caused has been clarified and the promulgation of the regulations was a positive move in the direction of professionalizing LG Prevented the legislation placing a huge operational burden on municipalities

31 Municipality Supported/ Program Implemented IGR Advocacy & Lobbying Strategy LG Week GOAL 4: Effective, Responsive & Accountable Local governance for communities Overview of support provided Program Implemented Facilitated the 2 nd NCOP LG Week thus committing parliament to dedicate time for LG matters. SALGA appointed the part time representatives to the NCOP to enhance interests of LG in the legislative processes Impact of support provided by SALGA LG Week forms a platform for a national dialogue reflecting on key issues in local government. Amongst other things Contributed to the reforms in the LG fiscal framework and introduction of some new grants which will benefit local government. Showcased good practices and successes in municipalities thus also contributing to change perceptions about the sector The appointment of part-time reps to NCOP will strengthen SALGA s representative role post 2014 elections and will shape parliament s local government agenda to better reflect and address challenges facing local government 31

32 Municipality Supported/ Program Implemented Improved Councillor support and Welfare GOAL 4: Effective, Responsive & Accountable Local governance for communities Overview of support provided Program Implemented Facilitated provincial workshops and municipal workshops on the implementation of upper limits, grading of municipalities, Municipal Councillors Pension Fund, SARS matters, Intervention & other matters affecting councillors. Impact of support provided by SALGA Improved grading of municipalities (e.g. Lephalale, Waterberg, Capricorn) Informed and capacitated councillors Councillors received tools of trade that enables them to fulfil their duties efficiently in the most cost effective manner Life and disability cover for councillors attacked during riots, protest or public disorder Sitting allowance for SALGA NEC/PEC and working group members. Contribution towards the payment of capacity building trainings for councillors by municipalities Improved administration of MCPF and most councillors are members of the fund 32

33 GOAL 5: Human Capital Development in LG Municipality Supported/ Program Implemented Overview of support provided Program Implemented Impact of support provided by SALGA Represented municipalities in sector-wide disputes Provincial offices were kept informed about the developments at national level through all quarters. The shared developments at national level enabled all SALGA provincial offices to have common understanding and uniform approach to the labour relations matters. Effective legal representation by SALGA resulted in the long standing Wage Curve dispute being finalized by the Labour Appeal Court in favor of affected municipalities. The impact of this favorable ruling is that municipalities will be saved from retrospective wage curve back-payment on the one hand and secondly this will enable municipalities to focus their efforts on concluding outstanding JE and wage curve implementations without being adversely affected by court ruling directing otherwise. 33

34 GOAL 5: Human Capital Development in LG Municipality Supported/ Program Implemented Overview of support provided Program Implemented Impact of support provided by SALGA Municipal employers protected and compensated for damages during strike action SALGA developed a strike management guideline to enable municipalities to have a management instrument at their disposal in order to effectively manage strike action as it happens on the ground. SALGA reviewed its Strike Management Guidelines for municipalities to reflect its proposals in the LRA amendments which are further provided for in the Constitutional Court judgment around damages to property. The SALGA inputs were recognized by the NCOP when it considered the amendments. 34

35 GOAL 5: Human Capital Development in LG Municipality Supported/ Program Implemented Overview of support provided Program Implemented Impact of support provided by SALGA Improved leadership and technical capacity The SALGA Centre Leadership & Governance Feasibility Study developed and approved by NEC SALGA has successfully developed a ground breaking blueprint for the establishment of a Centre for Leadership and Governance the first of its kind in the municipal sector Improved Leadership and Technical Capacity A new product for Executive Local Leadership and Governance was developed to respond to changing needs in the sector. SALGA successfully piloted Executive Leadership Development Workshops in the EC, NW aimed at hotspot municipalities. This programme and the positive feedback received from municipalities has served as a bases for the development of a Executive Leadership Coach Programme 35

36 Senior Manager s Induction Programme 36

37 GOAL 5: Human Capital Development in LG Pending, 10 Conciliation Referrals Received Resolved, 125 Non-jurisdiction, 158 Dismissed, 70 Withdrawn, 140 Abandoned, 113 Abandoned after conciliation, 379 Unresolved, 1408 Resolved Unresolved Abandoned Withdrawn Dismissed Non-jurisdiction 37

38 GOAL 5: Human Capital Development in LG Arbitration Referrals Received Referred from Labour Court, 0 Non-jurisdiction, 64 Dismissed, 88 Abandoned, 7 Pending, 191 Withdrawn,186 Settled, 274 Concluded, 607 Settled Concluded Abandoned Withdrawn Dismissed Non-jurisdiction Referred from Labour Court Pending 38

39 Goal 5 Municipalities Supported on PMS Province Eastern Cape Free State Gauteng Kwa Zulu Natal Ngqushwa LM Great Kei LM King Sabata Dalindyebo Dihlabeng LM Ngwathe LM Tokologo LM Naledi LM West Rand DM Randfontein LM Joburg City Parks & Zoo umkhanyakude DM Mtubatuba LM UThukela DM Ubuhlebezwe LM 39 Mooi Mpofana LM Municipalities

40 Goal 5 Municipalities Supported on PMS Provinces Limpopo Mpumalanga Northern Cape North West Western Cape Polokwane LM Aganang LM Musina LM Mopani DM Msukaligwa LM Dr J S Moroka LM Nkomazi LM Thembisile Hani LM Siyancuma LM Namakwa DM Siyathemba LM Ramotshere LM Tlokwe LM Kannaland LM Prince Albert LM Beaufort West 40 Central Karoo DM Municipalities

41 Goal 6: Financially and organizationally capacitated municipalities Improving the Audit Outcomes MUNICIPAL SUPPORT INITIATIVES The support provided during this year ranged from workshops, one-on-one engagements with the municipalities in a number of areas. To improve audit outcomes, SALGA has now developed a support strategy that is based on a multi-disciplinary approach to provide hands-on support on selected focus areas to targeted municipalities to improve audit outcomes. There will be four pillars of support, namely Institutional Capacity, Financial Management, Leadership and Governance support. SALGA will utilise its in-house capacity to provide hands on support to local government by entering into partnerships with other public and private institutions. 41

42 Municipal Audit Support Programme (MASP) Salga notes the Root causes of audit outcomes as set out below and will assist municipalities in trying to address these root causes: Slow response by political leadership in addressing root causes of audit outcomes Lack of consequences for poor performance and transgressions Key positions vacant or key officials lacking appropriate competencies SALGAs overall objective for the MASP is: To support Municipalities who have qualified or worse audit outcomes in order to gradually improve and sustain these improvements to their audit outcomes AND To also support Municipalities with unqualified audit outcomes in order to maintain and sustain their audit outcomes. SALGAs main focus in commencing with the MASP is on the 79 municipalities with Adverse or Disclaimer opinions as well as those municipalities whose audits were not finalised by the legislated deadline 42 based on the 2012/2013 AGSA audit outcomes (Red Zone municipalities).

43 Municipal Audit Support Programme (MASP) SALGAs MASP follows a Multidisciplinary approach that is based on 4 Pillars. We believe that all four pillars in a Municipality need to be strong and functioning effectively in order for a Municipality to obtain and sustain unqualified audits and good service delivery SALGA is confident that the MASP based on the 4 Pillars of Support cover the risk areas and root causes identified by the AGSA as well as the three aspects audited. Institutional Financial Capacity Management Leadership Governance

44 MASP to follow phased implementation 31 March 2015 Finalise diagnostics and formalise customised support plan agreements for all 79 Red Zone municipalities Provide hands on support to at least 2 municipalities per province. Phased Approach with long-term lead in to Maturity 31 March 2016 (LG Elections) Hands on customised support to red zone municipalities Monitor & evaluate progress (AG outcomes for 2013/2014 and 2014/2015) Significant reduction in red zone municipalities 31 March 2019 Target of maximum 3% Red Zone municipalities achieved Significant improvement in unqualified audit outcomes (>65% of overall outcomes in unqualified category) 31 March 2021 (LG Elections) Audit Outcomes stabilised General maturity in Local Govt. around Fin mgmt. and Governance strong Focus on enhancing efficiency and effectiveness of performance

45 Goal 6: Financially and organizationally capacitated municipalities MUNICIPAL SUPPORT INITIATIVES IN 2013/14 Province ADOPTED MUNICIPALITIES FOR AUDIT PUPPORT Eastern Cape Great Kei Nxuba Inkwanca Free State Gauteng KwaZulu Natal Limpopo Mpumalanga Northern Cape North West Western Cape Maluti a Phofung Randfontein umkhanyakude Ba-Phalaborwa Bushbuckridge Mier Mamusa Kannaland Naledi Nala Matjhabeng Emfuleni Westonaria Ugu uthukela Modimolle Letaba Aganang Lekwa Mkhondo Msukaligwa Kamiesberg!Kheis Moretele Kgetleng Ventersdorp Ramotshere Swellendam 45 Oudtshoorn

46 Goal 6: Financially and organizationally capacitated municipalities MUNICIPAL SUPPORT INITIATIVES Credit Control and debt management SALGA rolled out of 3 workshops covering a number of municipalities from Gauteng, Eastern Cape and KwaZulu Natal provinces. The municipalities, who have implemented the guidelines, are now in a position to improve their credit control mechanisms and some municipalities had revised their bylaws and associated credit control policies which should improve the debt collection. SALGA also focused on building its own capacity by providing training to all the provincial Programme Managers responsible for municipal finance in two areas namely credit control and municipal budget assessments. 46

47 Goal 6: Financially and organizationally capacitated municipalities CAPACITY BUILDING PROGRAMME FOR COUNCILLORS SALGA developed an assessment report on the functioning of audit committees which resulted in a capacity building programme for councillors. In the main, the training programme was aimed at improving the oversight role of councillors over financial governance matters. It also enhanced the councillors understanding of roles and responsibilities of Audit Committees, Municipal Public Accounts Committees and Internal Audit Units. This programme was initially piloted in Vhembe District and Western Cape and was rolled out in the rest of the provinces during the 2013/14 financial year. The capacity building programme reached over 800 councillors including those directly responsible for financial oversight. 47

48 Goal 6: Financially and organizationally capacitated municipalities CAPACITY BUILDING PROGRAMME FOR COUNCILLORS PROVINCE COUNCILLORS / MPAC MEMBERS Eastern Cape 30 Free State 51 Gauteng 51 Kwazulu- Natal 250 Limpopo 110 Mpumalanga 101 North West 45 Northern Cape 50 Western Cape 112 TOTAL

49 Program Implemented Overview of support provided Program Implemented GOAL 7 EFFECTIVE AND EFFICIENT ADMINISTRATION Impact of support provided by SALGA SALGA Clean Audit Managed the process towards a Clean Audit for the first time in SALGA s history and the consolidation of SALGA as a high performance organisation. SALGA s achievement of clean audits in 2012/13 and 2013/14 makes it a credible voice in leading the Local Government sector towards clean audits. Achieving a clean audit accompanied by high performance (84% and 96% respectively) set the scene well for municipalities to achieve clean administrations while also delivering services to communities. APP (2013/14) and (2014/15) Led the development of aligned, high impact APP (2013/14) & (2014/15) A coherent APP that aligns activities of the organisation across all provinces consolidates the unified voice of local government across the country thus enabling higher impact for the various activities undertaken collectively as the organisation. The aligned and more focused APP also resulted in a reduction of audit queries. 49

50 Municipality Supported/ Program Implemented Overview of support provided Program Implemented GOAL 7 EFFECTIVE AND EFFICIENT ADMINISTRATION Impact of support provided by SALGA Municipal Barometer Collected, collated and packaged governance and development indicators into a simplified yet comprehensive municipal performance data base Provides municipalities with simplified yet comprehensive data intelligence to enable better planning, oversight and benchmarking. Municipal Managers Forum Facilitated an MM Forum The Municipal Managers Forum has Enhanced the interface between SALGA and its municipalities through municipal management Enhanced SALGA s value proposition with regards to professionalisation of the sector 50

51 Municipality Supported/ Program Implemented Overview of support provided Program Implemented GOAL 7 EFFECTIVE AND EFFICIENT ADMINISTRATION Impact of support provided by SALGA Municipal Managers Forum Facilitated 3 MM Forums The Municipal Managers Forum has Enhanced the interface between SALGA and its municipalities through municipal management Enhanced SALGA s value proposition with regards to professionalisation of the sector

52 FINANCIAL PERFORMANCE (2013/14) 52

53 12 53 STATEMENT OF FINANCIAL POSITION 8 YEAR COMPARISION Statement of financial position % change R million year Current Assets % Non-Current Assets % Total Assets % Current Liabilities % Non-Current Liabilities % Total Liabilities % Net Assets % Included in current assets is the following: Cash and cash equivalents % Trade and other receivables % Key financial ratios: Trade and other receivables as % of revenue 39.4% 22.1% 18.4% 19.2% 10.9% 10.1% 9.7% 7.3% -81% Membership levy payment levels (%) 54% 87% 84% 82% 90% 89% 87% 92% 71% Total revenue % Current ratio 114% 83% 73% 75% 54% 80% 125% 147% 29% Asset coverage rate (number of times) %

54 FINANCIAL ANALYSIS Ratio 2009/ / / / /2014 LIQUIDITY RATIOS Current Ratio The current ratio measures an entity s ability to honour its obligations in the ordinary course of its business, indicates that SALGA has R1-47 for each R1 of current liability which means that SALGA is liquid with an adequate current ration. The standard for the public sector is a ratio of 1 to 1. The current ratio for 2013/2014 financial year indicates an improvement i.e. 96 percent when compared to the current ratio five years ago and 18 percent when compared to prior year, where the organisation had 125 cents worth of current assets for each R1 of current liabilities. Ratio 2009/ / / / /2014 ACTIVITY RATIOS Days Sales in Receivables The days sales outstanding (after allowance for doubtful debt) indicates that it takes the organisation an average 24 days to convert trade receivables into cash. Again this ratio indicates a significant improvement when compared to 5 years ago where the organisation used to take on average 87 days to convert its debtors into cash. 10

55 11 FINANCIAL ANALYSIS (cont.) 2009/ / / / /201 4 Ratio SOLVENCY RATIO Debt to Equity Ratio 15.7% -40.7% 16.4% 5.2% 2.2% Asset coverage rate (times) The solvency ratio indicates that the organisation is solvent with a healthy debt-to-equity ratio of 2.2 percent. This means that the organisation has an adequate asset coverage rate of 47 times versus the rate of 7 times five years ago. The significant improvement of over 100 percent indicates an improvement in the organisation s financial management practices.

56 9 PAYMENT LEVELS RATE 5 YEAR PROFILE Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar 2013/14 - Financial year 14% 20% 21% 42% 60% 67% 79% 92% 93% 93% 91% 92% 2012/13 - Financial year 2% 12% 13% 28% 54% 84% 85% 87% 88% 88% 89% 87% 2011/12 - Financial year 13% 20% 21% 63% 87% 97% 88% 88% 76% 86% 88% 89% 2010/11 - Financial year 11% 19% 20% 45% 59% 64% 71% 74% 77% 80% 87% 90% 2009/10 - Financial year 1% 4% 12% 31% 49% 56% 62% 68% 70% 75% 80% 83%

57 EQUITABLE SHARE LIMITED AND REDUCED 2013/2014 Actual 2014/2015 Approved 2015/2016 Budget 2016/2017 Budget 2017/2018 Budget Total Revenue Equitable Share Gov. Grant as % of Total Revenue 6% 6% 2% 0% 0%

58 AUDIT FINDINGS Maturing Phase Sustainability Phase 2009/10 Unqualified Audit Opinion 2010/11 Unqualified Audit Opinion 2011/12 Unqualified Audit Opinion 2012/13 Unqualified Audit Opinion with no findings Clean 2013/14 Unqualified Audit Opinion with no findings Clean

59 WE HAVE COME A LONG WAY SALGA s transformation was a deliberate process both systematic and incremental. Departed from a administration under pressure, with a disclaimed audit opinion in Consolidating the successes and sustaining the change resulting in a clean administration in 2013 and SALGA Barometer 59

60 SALGA IS MATURING Strong winds set deep roots We have taken our time to establish our roots in order to anchor a mighty tree Collective effort towards Building SALGA as a centre of Public Sector Excellence are beginning to yield the necessary fruits. Day by day nothing changes but one day when you look back everything is different 60

61 TIME TO SEE THE FRUITS OF OUR LABOUR We want to be here We are here APEX Priorities Goal 1 Goal 2 Goal 4 Goal 3 Goal 5 Goal 6 Goal 7 Strategic Priorities ( ) 61

62 Taking Local Government Forward.BACK TO BASICS.. Putting people first and engaging with communities Delivering basic services Good governance Sound financial management Building capabilities SALGA has committed to supporting Back-to-Basics and facilitating implementation at municipal level Back-to-Basics is a key focus area at SALGA NEC Lekgotla scheduled for October 2014

63 THE END THANK YOU 63