Transcript 5TH NATIONAL ANNUAL LOCAL GOVERNMENT CONFERENCE …

SUMMARY & CONCLUDING REMARKS
Thomas Mkaza
5TH NATIONAL ANNUAL LOCAL GOVERNMENT
CONFERENCE
11-12 AUGUST 2008
SESSION 1
OFFICIAL OPENING
Issues dealt with in the session
 Objective of the Conference – share ideas,
experiences and learn from one another
 Local Govt faced with numerous challenges
 Financial viability however the most important
and critical
 Most munics faced with a challenge in terms of
financial viability
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SESSION 1
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Financing of municipalities through:
- Equitable share
- Debt Collection
Major challenge though – poverty &
unemployment
Budget management also a challenge
- Underspending, under collection, lack of
appropriate planning, huge Personnel costs,
O & M less budget, non-alignment of budget &
IDP
SESSION 2
MUNICIPAL FINANCIAL VIABILITY &
INTERGOVERNMENTAL FISCAL RELATIONS
Comparison between municipal financial
viability and municipal viability
 Issue of sustainability critical – financial
viability which is not sustainable is not helpful
 Audit Financial Statements of 2008 show –
decrease in capital budget from own funds;
macro-economic factors not considered; high
personnel costs; etc
 LED should be linked to financial viability
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SESSION 2
Unfunded Mandates
 Emanate from legislation governing local
government e.g. environmental health, disaster
management, CDWs, etc
 Debate whether munics are not their own worst
enemies as they should raise issue at the
beginning when the functions are transferred to
them
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SESSION 2
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Call for improvement in co-operative
governance
Indigent management – critical as it is complex
and is fraught with problems both at policy
design and policy implementation levels
Identification, verification and avoidance of
manipulation of the policy are daily problems
Lengthy debate on use of stats in
determination of Equitable Share
SESSION 3
CREATIVITY & INNOVATIVENESS IN REVENUE
GENERATION
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Key issue – Integrity of data used
How correct and complete is the data used?
Has it been verify to be correct?
Need for development of appropriate Debt Management
Strategy
ADVICE: - apply, implement, and enforce by-laws for
debt collection and credit control
Be strict and yet sensitive
Due to lack of capacity – shared services option
Investigate various taxation options to generate revenue
GO BACK TO THE BASICS
SESSION 4
PUBLIC ACCOUNTABILITY, MALADMINISTRATION,
FRAUD, & CORRUPTION
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“Serving the public is fundamentally a priviledge”
– Mr Mufamadi
Public Accountability – puts an obligation on the
body or person to explain and justify conduct and
decisions taken
Types of Public Accountability e.g. political, etc
Instruments of Public Accountability e.g. IDPs,
budget, SDBIP, etc.
Public Accountability is required throughout the
accountability chain
SESSION 4
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Importance of linking expenditure to
performance, outcomes and results
There is marked shift from financial accounting
to performance audits
SA – 2nd lowest country on corruption in Africa
after Botswana
Need for political and administrative will
Need to move away from investigations to
prevention and training
SESSION 5
MUNICIPAL SERVICE PARTNERSHIP & LOCAL
ECONOMIC DEVELOPMENT
• Dplg has developed a Guide on MSPs
• Types of contracts: Service, Management, Lease,
Concessions, Build Operate Transfer
• Challenges in MSPs:
- Regulatory Framework
- Absence of threshold – size of contracts
- Labour opposition
- Risk Aversion – private sector
- Lack of skills in municipalities
- Culture of non-payment
SESSION 5
Moves to address the challenges
• Service delivery guidelines developed by dplg
• Stakeholder mobilisation esp. private sector
• General stakeholder mobilisation e.g. Labour
• Contract management training
• Collaboration with other organisations such as GTZ
• There is a need to train officials on MFMA
• Project Development Fund established to assist
municipalities
SESSION 5
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Poverty, crime, unemployment worrying issues
Need to attract investment in our localities; retain
and grow existing business already in and create
new ones
Macro-economic policies fundamental
Globalisation changing rules – towns are engines
of growth
Emphasis & resources shifting to local & regional
development strategies
SESSION 5
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Interesting to note the Third Wave of LED as an emerging
trend
Need for balanced LED strategy
Direct involvement of the local communities in decision
making processes tends to yield better results
Need to address exclusion be it social, spatial or economic
and encourage inclusivity
Critical that SA is seen as a rural country and not a middle
income country as the majority lives in rural areas
Rural development therefore is critical
Need a new formula based on the realities on the ground
rather modelling SA as a developed country
LED is not done for people but people do it for themselves
SESSION 6
ACCESSING DONOR & GRANT FUNDING
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ODA – Official Development Assistance
ODA – intended to build capacity of SA to address
challenges relating to issues such as inequalities,
It is important to know how to get donor funding/aid
Aid is conditional and unpredictable
Aid is donor driven
Critical that Africa must develop capacity to define, lead and
own its own development agenda
We must be in control of our own destination
Interesting to note that 50% of the revenue of munics is
from Grants and own funds only 24%
Munics can apply for various grants e.g MIG, MSIG, etc
Need to build Social Capital
SESSION 7
MUNICIPAL PROPERTY RATING
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Shared views on software used in property rating
in eThekwini Metro
Shared process followed in running the pilot study
Interesting to note that the software developed by
eThekwini is shared with the other metros –
classical example of interdependency between
munics
Need to look at challenges facing munics in the
implementation of the Act esp. in rural areas
SESSION 8
SUPPLY CHAIN MANAGEMENT
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A case study of eThekwini Metro was presented to
show case how supply chain management is done
The process looks water tight and minimises risk and
potential corruption
eThekwini has developed a Guide which can be used
by other municipalities in crafting their own policies
and procedures
Emphasis was placed on that the entire process
requires team effort
SESSION 8
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Demand Management is critical in Supply Chain
Management (SCM)
SCM – right place, right quality, right quantity, right
cost, and right time
Economic environment in SA still monopolistic
resultantly large tenders are allocated to big business
with SMMEs receiving very little
Need to change this arrangement and that the 90/10
or 80/20 should not exclude SMMEs (systematic &
structural exclusion)
SESSION 8
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Synchronisation to customer needs
Understand variations in customer demands
Create work cells
Eliminate batch work and multi-tasking
Enforce First In First Out (abolish In tray)
Implement standardised work and load levelling
Do today’s work today
Make the value stream visible
LESSONS LEARNT
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Poverty and Unemployment is ravaging SA and seems
to be insurmountable – it is therefore critical that we
find solutions to these urgently
Management of finances within municipalities still
needs special attention irrespective of the elaborate
legislative framework available
The debate on unfunded mandates needs to be
brought to finality and it is unnecessary given the
legislation on intergovernmental relations
LESSONS LEARNT
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Municipalities must think out-of-the-box in order to
generate more revenue given the changed
environment they operate in
Morality in the management of the affairs of
communities is critical. Morally sound persons do not
involve themselves in corrupt and fraudulent
activities. Moral Regeneration needs to be supported
at all costs
Legislation promulgated seem to “run” before us as
we need to be trained on such once published-WHY?
LESSONS LEARNT
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Commitment, political and administrative will are
fundamental in the journey of transforming
municipalities to be high performing organisations
Community-driven processes tend to deliver better
results e.g. LED processes
Donor and Grant funding is not the ultimate solution
for the challenges facing local government
Municipalities should avoid dependency on such
Planning, Planning, Planning should guide all our
processes