Transcript Slide 1

How Performance Audit
enhances service delivery in
local government
Institute for
Performance Management
empowering tomorrow’s leaders
Alan Dawson
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Performance Management is
not...
• Employee/bonuses
• HR’s job
• Just measurement
• No one-year wonder
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Performance management is...
• Holistic
• Change management
• Integrated
• Management tool
• Good governance
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Performance Management
Defined
• Performance Management is a strategic
approach to management, which equips
leaders, managers, workers and stakeholders
at different levels with a set of tools and
techniques to regularly plan, continuously
monitor, periodically measure and review
performance of Council in terms of indicators,
to determine its efficiency, effectiveness and
impact; thereby ensuring improved delivery
and value for money to the community and
citizens and accountability.
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Value for Money
Performance auditing, or
value for money (VFM)
auditing
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Challenges
• Lack of international audit standards
• Need for formalisation of predetermined
objectives audit standard in SA
• www.irba.co.za
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SA leads
"The Public Finance Management Act shows an
awesome
display
of
commitment
to
accountability and the application of sound
management
principles.
It
takes
the
responsibilities of public financial managers to
new horizons and introduces what I refer to as
statutory performance management (SPM).
This commitment places South Africa
amongst the world leaders with regard to
public finance management ...."
Gloeck 2000:5
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Phased-in
• First year 2005/06
• Second year 2006/07
• Third year 2007/08
• Fourth year 2008/09
• Fifth year 2009/10
• Metros 2009/10 audit review
• Other muni’s 2011/12
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PM audit defined
A performance audit is an
independent evaluation of
the measures implemented
by management to ensure
the efficient, effective and
economic use of resources.
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Audit of Predetermined Objectives
Performance Audit
Mandatory
Discretionary
Reflect opinion
Not include opinion
Annually
Factual finding, multi-year
Regularity auditors
Performance auditors/ experts
Focus: Planning, implementation,
monitoring, reporting
Focus: specific government
programme/project
Criteria: existence, timeliness,
presentation, consistency etc
Criteria: economy, efficiency,
effectiveness
Assurance of useful and reliable
Factual, goods/services achieve efficient
desired goal
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Auditing: PAA
Sections 20(2)(c) and 28(1)(c) of the Public Audit
Act:
An audit report must reflect an opinion or conclusion
relating to the performance of the auditee against
predetermined objectives
Applicable to all spheres of government,
including:
• national, provincial and local government
• public entities
• those the AG opts to perform and opts not to
perform
• institutions funded with public monies
• institutions that receive money for public purposes
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Auditing: MSA
Municipal Systems Act, Act No. 32 of
2000
Section 45:
The results of performance measurements in
terms of section 41 (1) (c) must be audited –
– (a) as part of the municipality’s internal
auditing processes; and
– (b) annually by the Auditor-General.
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Planning, Budgeting, Managing
and Reporting
• Municipal Finance Management Act (MFMA)
• Municipal Systems Act (MSA)
• LG: Municipal planning and performance
management regulations, 2001 – GNR.796 of 24 August
2001
• LG: Municipal performance regulations for
municipal managers and managers directly
accountable to municipal managers, 2006 –
effective 1 August 2006 – GNR.805 of 1 August 2006
National Treasury guidance:
• MFMA circulars
• Framework for managing programme performance
information
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Strategic Planning &Budgeting
Chapter 5 – Integrated development planning
Chapter 6 – Performance management
MFMA
Chapter 7 – Budget process and related matters
Chapter 10 – Municipal entities (sec 87,88)
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Implementation & Managing
S 41: A municipality must in terms of its performance management
system and in accordance with any regulations and guidelines
that may be prescribed(a) set appropriate key performance indicators as a yardstick
for measuring performance, including outcomes and
impact, with regard to the municipality’s development
priorities and objectives set out in its integrated
development plan;
(b) set measurable performance targets with regard to each
of those development priorities and objectives;
(c) with regard to each of those development priorities and
objectives and against the key performance indicators
and targets
(i) monitor performance; and
(ii) measure and review performance at least once per
year
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Reporting
The annual report of a municipality must
include the annual performance report of the
municipality prepared by the municipality ito
section 46 of the Local Government Municipal
Systems Act.
MFMA – section 121(4)(d)
The annual report of a municipal entity must
include an assessment by the entity’s accounting
officer of the entity’s performance against any
measurable performance objectives set ito the
service delivery agreement or other agreement
between the entity and its parent municipality.
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National Treasury Guidelines
Relevant MFMA circulars:
– No. 11: Annual report guidance
– No. 13: Service delivery and budget
implementation plan
– No. 32: The oversight report
– No. 42: Funding a municipal budget
– No. 51: Municipal Budget Circular for the
2010/11 MTREF
Available on Treasury website
www.treasury.gov.za/legislation/mfma/circulars
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Accountability Cycle
(National Treasury)
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Benefits of PM Auditing
• Social Contract
• Efficiency
• Improving organisational
performance
• Good Governance
• Strategy and Policy
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Critical Questions
• have policy goals and objectives been set?
• are they clearly defined and approved at
the appropriate level by the appropriate
authority?
• are supporting policies and procedures
aligned with higher level policy?, and
• are policy assumptions based on
appropriate motivations and relevant and
reliable information?
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More critical questions
Is there:
• Alignment between IDP, Budget and PM
(organisational and individual)
• Alignment between above and SDBIP’s
• Alignment between IDP and APR
• SDBIP to quarterly reports
• Annual Performance Reporting
• Objective Performance Reporting
(organisational and individual)
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New Auditing Competencies
• Statisticians/Data Analysts
• Economists
• Social Scientists
• Researchers
• Town Planner
• PM HR Specialist
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Thank you
Ke-a-leboga
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