Transcript Update on 2014 LG MTEC 3_fin

UPDATE on 2014 LG MTEC 3
Anthony Phillips
Chief Director: Public Policy Services
LGMTEC 3 2014
Background
The importance of annual budget & Integrated Development Plan (IDP)
assessment is stipulated in:
•
Chapter 5 of the Local Government Municipal Systems Act (Act 32 of
2000) (MSA), the MSA Regulations and
•
the Local Government Municipal Finance Management Act (Act 56 of
2003) (MFMA).
Sections 22 & 23 of MFMA obligates the municipality to solicit & consider
comments on the tabled budget after its tabling and before the adoption.
•
Draft Budget is tabled 90 days (i.e. 31 March) prior to the start of the
budget year.
•
Annual Budget is adopted 30 days (i.e. 31 May) prior to start of the
budget year.
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LG MTEC/ IDP Indaba Process
IDP Indaba (LG MTEC 1)
To improve synergy between planning and
budgeting
LG MTEC 2
Distribute information on provincial
allocations & spending
LG MTEC 3
Comment & consultations on draft tabled
Municipal Budgets
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Events leading up to Municipal Budget Tabling
•
Tabling of Budget/ IDP process schedule (s21(b), MFMA) – 30 August
•
Intergovernmental Consultation 1 (IDP Indaba1) – 16 & 18 September
•
1st Round Public Participation – October/ November
•
National & provincial departments inform National & Provincial Treasuries of
allocations to municipalities (s36– 20 (1), MFMA – 20 January each year
•
Intergovernmental Consultation 2 (IDP Indaba 2)/ LG MTEC2 – 4 to 26 February 2014
•
National Budget Day – 26 February 2014
•
Provincial Budget Day – 6 March 2014
•
Approval of Bulk Resource Tariffs – 15 March 2014
•
Tabling of Annual Budget – 31 March 2014
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LGMTEC 3 2014 - The New Approach
Phase 1: January/February 2014:
Pre-check and provide assistance
where necessary
Phase 2: Early April 2014:
Check on conformance issues
Phase 3: Late April/ Early May 2014:
Engagement on municipal
performance an 2014/15 budget
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LGMTEC 3 2014 – Dates (1)
REGION
MUNICIPALITY
DAY OF VISIT
TIME OF VISIT
Metro
City of Cape Town (Group 1)
22 April 2014, Tuesday
08:00 - 11:00
Central Karoo District
Laingsburg (Group 2)
23 April 2014, Wednesday
08:00 - 11:00
Central Karoo District
Beaufort West (Group 2)
23 April 2014, Wednesday
14:00 - 17:00
Eden District
George (Group 1)
23 April 2014, Wednesday
08:00 - 11:00
Eden District
Eden District (Group 1)
23 April 2014, Wednesday
14:00 - 17:00
Central Karoo District
Central Karoo (Group 2)
24 April 2014, Thursday
08:00 - 11:00
Central Karoo District
Prince Albert (Group 2)
24 April 2014, Thursday
14:00 - 17:00
Eden District
Bitou (Group 1)
24 April 2014, Thursday
08:00 - 11:00
Eden District
Knysna (Group 1)
24 April 2014, Thursday
14:00 - 17:00
Eden District
Oudtshoorn (Group 2)
25 April 2014, Friday
08:00 - 11:00
Eden District
Kannaland (Group 2)
25 April 2014, Friday
13:00 - 16:00
Eden District
Mossel Bay (Group 1)
25 April 2014, Friday
08:00 - 11:00
Eden District
Hessequa (Group 1)
25 April 2014, Friday
14:00 - 17:00
FREEDOM DAY
PUBLIC HOLIDAY
27 April 2014, Sunday
28 April 2014, Monday
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LGMTEC 3 2014 – Dates (2)
REGION
MUNICIPALITY
DAY OF VISIT
TIME OF VISIT
West Coast District
West Coast District
Overberg District
Overberg District
West Coast District
Matzikama (Group 2)
Cederberg (Group 2)
Overstrand (Group 1)
Theewaterskloof (Group 1)
Bergrivier (Group 2)
29 April 2014, Tuesday
29 April 2014, Tuesday
29 April 2014, Tuesday
29 April 2014, Tuesday
30 April 2014, Wednesday
08:00 - 11:00
14:00 - 17:00
08:30 - 11:30
14:00 - 17:00
08:00 - 11:00
West Coast District
West Coast District (Group 2)
30 April 2014, Wednesday
14:00 - 17:00
Overberg District
Cape Agulhas (Group 1)
30 April 2014, Wednesday
08:00 - 11:00
30 April 2014, Wednesday
01 May 2014, Thursday
02 May 2014, Friday
05 May 2014, Monday
13:00 - 16:00
Overberg District (Group 1)
WORKERS DAY
NO ENGAGEMENTS
Langeberg (Group 2)
Cape Winelands District
Overberg District
08:30 - 11:30
Cape Winelands District
Breede Valley (Group 2)
05 May 2014, Monday
14:00 - 17:00
Cape Winelands District
Drakenstein (Group 1)
05 May 2014, Monday
08:00 - 11:00
Cape Winelands District
Stellenbosch (Group 1)
05 May 2014, Monday
14:00 - 17:00
Cape Winelands District
Cape Winelands District (Group 2)
06 May 2014, Tuesday
08:00 - 11:00
Cape Winelands District
West Coast District
West Coast District
Overberg District
Witzenberg (Group 2)
Saldanha (Group 1)
Swartland (Group 1)
Swellendam (Group 2)
06 May 2014, Tuesday
06 May 2014, Tuesday
06 May 2014, Tuesday
07 May 2014, Wednesday
14:00 - 17:00
08:30 - 11:30
14:00 - 17:00
08:30 - 11:30
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LG MTEC 3 Parameters
LGMTEC 3 Report Outline
• LG MTEC3 Assessment/ Engagement based on combined
Assessment Framework by DLG and Provincial Treasury
• DLG Assessment focused on Compliance and Responsiveness of
IDP
• PT Assessments guided by framework with 4 main components
eg.
 Conformance: compliance with MBRR
 Responsiveness: How budget responds to socio economic
conditions,
 Credibility: Is the budget funded, realistic and
implementable and
 Sustainability: Is the budget supported by adequate cash
resources that will last over at least the MTREF (3) period
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Responsiveness
•
Has the IDP of the municipality been reviewed taking cognisance of Section 34 of the MSA
regarding:
•
Is a performance management system in place as stipulated in Chapter 6 of Section 41 (a) of
the MSA ?
•
Preparing for an IDP Review: process plan/time schedule; public participation; review; any
shortcomings in the original preparation of the IDP process been incorporated as
improvements in the reviewed IDP?
•
Monitoring: Does the IDP Review contain sufficient information that measures progress with the
implementation of programmes and projects through a series of indicators that have been
set, to determine whether the outcomes strived for have been achieved.
•
Evaluation: Has information gathered in the process of monitoring the IDP process been
packaged in a way that facilitates discussion by the Representative Forum for discussion and
decision making by Council?
•
Review: Does the reviewed IDP of the municipality contain a refined understanding of the
situation around
 priority issues: Assess how local budget priorities are aligned to support national & provincial budget
priorities.
 refined/amended/additional objectives
 revised or new strategies, including strategies to improve implementation
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Responsiveness cont..
• Has the Spatial Development Framework of the municipality
been adopted and reviewed as part of the IDP?
• Has the Water Services Development Plan of the municipality
been reviewed?
• Alignment: Assess how the local IDP and budget priorities
reflect national/provincial support initiatives.
• Conformance: Applicable MBRR tables have been completed
• Conduct independent socio-economic analysis.
• Assess draft SDBIP for SMART-ness, appropriateness and
relevance
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Credibility
• Are the revenues projected in the budget realistic and anticipated as
required by s16 of MFMA?
• Municipal tariff increases are in line with the parameters or guidelines
provided by NT/NERSA
• Sensitivity Analyses: Trend of revenue increases in relation to the increase in
municipal service charge tariffs.
• Tariff affordability Compare tariff levels and increases across a number of
“similar” municipalities based on regional GDP, average income levels,
indigent population and unemployment?
• P3 Tariff modelling: Has the P3 Tariff Model been implemented in the setting
of service charge tariffs?
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Credibility cont..
• The municipality use credible budgeting principles, techniques or methods
• Operating Expenditure is based on the legitimate needs of the municipality?

The total employee cost is based on an approved organogram and had been discounted to
take into the impact of vacancies?
• Capital Expenditure is based on the legitimate needs of the
municipality/community

The capital budget is fully aligned with the socio-economic realities faced by the local
authority?
• The municipality prepared the budget in line with the requirements of the
legislation
• Municipal tariffs used as mechanism to attract private sector investment
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Sustainability
• Cash Flow Status of the Municipality
• Credit Risk Status of the Municipality
• Investment Status of the Municipality
• Funding of the Budget
• Going Concern Assessment
• Conformance Status (Cash Related Tables)
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Sustainability cont…
• Compare applicable MBRR tables against audited AFS
• The analysis and interpretation of the Financial Ratios will be linked to
SA8 (Performance indicators & benchmarks)






Expenditure Management
Revenue Management
Liability Management
Asset Management
Working Capital & Sustainability
Other Indicators
o Electricity Distribution Losses (Percentage)
o Water Distribution Losses (Percentage)
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Thank you