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Strengthening the Role of Oversight
Structures in Municipalities
IMFO 6th Audit and Risk Indaba
20 – 22 April 2015
• Presentation focuses on:
– The oversight role of councillors in municipalities
– The effectiveness of Audit Committees in strengthening oversight role of
Oversight – a background
• Oversight is an important yet an inadequately discussed and
researched area of municipal activity
– We have discussed what oversight is and why it is necessary, why it
is good from a normative point of view and what conditions might
favour effective oversight
– Yet less attention has been given on its impact on the functioning of
our local government system
Oversight defined
• Quick general definitions:
– Oversight – the proactive interaction initiated by a council with the
Mayoral Committee and municipal administrative organs…that
encourages compliance with the constitutional obligation on the Mayoral
Committee and administration to ensure delivery on agreed-to
objectives for the achievement of municipal priorities
– Oversight is therefore part of enhancing transparency and accountability
and the strengthening of local democracy
– Distinction between potential oversight vs effective oversight
• Former – about available oversight instruments irrespective of their
• Latter – impact of the utilization of the available oversight
Oversight Elements
• Oversight has three general characteristics:
1. Scrutiny by others
2. Regular accounting for one’s actions, and
3. The risk of negative repercussions, if performance is
considered unsatisfactory
Oversight – some key questions
1. How can objectives be made sufficiently measureable and precise so that
policy success and failure can be attributed to the relevant decision
2. How can LG managers be held accountable to elected representatives for
actions taken independently of those representatives?
3. Where group decision-making is used to reduce idiosyncratic risk, how can
the individuals involved be held to account?
4. How much can openness and transparency fill any gaps in accountability to
elected representatives by providing accountability to the wider public?
5. Should obligations to be transparent be formalised and detailed?
Oversight Instruments
Various legislative provisions for Municipal Public Accounts Committees; Audit and Risk
Committees, Internal Audit structures, etc.
• Complementary role to Treasury, Auditor General, and Parliament and the public
MPACs – standing committees which help councils oversee activities performed by a
• Have power to examine all issues referred to it by council
• Can also investigate specific issues such as municipal accountability to council
regarding budgets and expenditure; effectiveness and efficiency of approve policies
and by-laws and the quality of the municipality in general
MPACs - also have an additional role and authority/power to examine public accounts,
comment on these and on the report compiled by the AG
• Can also conduct investigations, give publicity to its conclusions and report to
Some Oversight Challenges
Number and percentage of recommendations accepted and executed?
Capacity of MPAC members
Challenges of partisanship
Perception of MPACs as an additional burden
Under resourcing
Schedule of activities not tied to other key milestones and review timeframes
Absence of a clear framework (similar to that of National Parliament and
Legislatures – The oversight Model of the SA Legislature Sector, 2012)
Publication and access to reports
Audit and Risk Committees – independent structures comprising of highly
qualified, experienced and knowledgeable professionals from outside the
• Professional integrity and reputation
• Independent and advisory role
• Link between the Council, Administration and the AG
• Strategic and analytical capacity from a multi-disciplinary background – e.g.
Accounting, Law, IT, Governance, Strategy, Policy, Stakeholder Relations,
Assets, Supply Chain, etc.
• Provide strategic advice and an independent view on the three audit areas,
• Performance on pre-determined outcomes
• Financial Management
• Legislative compliance
Complementary role and dynamic relationship with MPAC
Salga and MPACs (and ARCs)
General concern about effectiveness of the MPACs and ARC
– AG continues to flag issues of governance, leadership, financial management
and institutional capacity
Various generic and portfolio training initiatives
– Basics to interact with information at a high level e.g. analysing a financial report
and the AFS
Need to develop LG specific MPAC guidelines and operating manuals
– Similar to those for the National Parliament and provincial legislatures
Periodical effectiveness review and support
– Instrument developed and tested
Mooted national conference of all the oversight structures
– Identify challenges and develop proposals
Thank You