Transcript Document

INCA Capacity
Building Fund
Conference
Performance Management in
Local Govt
RATIONALE

‘Performance’ and ‘Management’ are the cornerstones of the
“quiet revolution” and the paradigm shift introduced by the
Municipal Systems Act (MSA) and Municipal Finance
Management Act (MFMA)

‘Performance’ relates to efficiency; effectiveness and economy
‘Management’ relates to the change of emphasis from
administering finances and resources to the management thereof
Necessity for Performance Management increases as
communities apply pressure for more and better services which
municipalities have to meet with limited resources
In the past, the aim of budgeting was merely to keep control of
all money spent, however, the focus is now on resource usage
and service delivery outputs



“The reasonable man adapts himself to the world; the unreasonable one persists
in trying to adapt the world to himself. Therefore all progress depends on the
unreasonable man” – George Bernard Shaw
LEGISLATIVE FRAMEWORK

Requirements of MFMA in terms of linking expenditure to
service delivery complement requirements of Municipal
Systems Act and Municipal Structures Act to establish
performance management systems

All three pieces of legislation emphasize the need to be able
to determine whether municipalities are getting value-formoney in terms of tax rands spent.
“People are like stained-glass windows. They sparkle and shine when the sun is
out, but when the darkness sets in, their true beauty is revelaed only if there is a
light from within” – Elizabeth Kubler Ross
MUNICIPAL FINANCE MANAGEMENT ACT
s17(3)(b)
stipulates that when the annual budget is tabled in
Council, it must be accompanied by measurable performance
objectives for each vote.
s121(3)(f) requires an assessment of performance against these
measurable objectives.
s62(1)(a) states that the Accounting Officer is responsible for
effective, efficient, economical and transparent use of resources
s69(3)(a) requires the Accounting Officer to submit a draft
SDBIP (Service delivery and Budget Implementation Plan) that
shows how the priorities set in the IDP will be achieved.
s121(4)(d) requires the submission of annual reports that contain
performance reports and the audit report of the municipality’s
performance.
“The challenge is not to manage time, but to manage ourselves” – Steven Covey
MUNICIPAL SYSTEMS ACT
Chapter
6 describes in detail requirements for municipalities to
develop and establish a PM system.
Section 41 (1) states that municipalities must:
a) set appropriate key performance indicators as a yardstick for
measuring performance, including outcomes and impact, with
regard to priorities set out in municipalities IDP;
b) set measurable performance targets in respect of each of
those development priorities and objectives;
“To think is easy. To act is hard. But the
hardest thing in the world is to act in
accordance with your thinking” - Goethe
MUNICIPAL SYSTEMS ACT contd
c)
d)
e)
with regard to each of those developmental priorities and
objectives and against KPI’s and targets in (a) or (b) –
i) monitor performance
ii) measure and review performance at least once per year.
take steps to improve performance where performance
targets are not met, and
establish a process of regular reporting to –
i) the council, other political structures, political
office bearers and staff of the municipality and,
ii) the public and appropriate organs of staff.
It is important to ensure that performance measures and targets
as well as monitoring systems are integrated with the budgeting
process:
“When you reach the end of your rope, tie a knot in it and hang on” T Jefferson
MUNICIPAL STRUCTURES ACT



Chapter 4 deals with powers and functions of the Executive
Committees and Executive Mayor
Section 44(3) provides:
- The Executive Committee, in performing its duties must –
a) Identify and develop criteria in terms of which progress is
made in implementation of strategies; programmes and
services can be evaluated, including KPI’s which are
specific to municipality common to local government
in
general.
It is important to recognise the need for an integrated system
that can measure both financial and non-financial performance.
“There is nothing more noble about being superior to some other man. The
true nobility is in being superior to your previous self” – Hindu Proverb
HOW HAVE MUNICIPALITIES SHAPED?
• The Demarcation Board reduced 843 municipalities to 284.
• Since introduction of the 3 Acts highlighted, it is interesting to
see how municipalities have risen to the challenge of
introducing PM in their environments.
• The following Table is taken from the General Report of the
Auditor-General on Local Government released in June 2004.
Taking the audit results of the 50 municipalities sampled, the
basic result is as follows:Report Format
Number of Municipalities
Not made sufficient progress
Some progress made
Fully-fledged PMS audit
Not yet audited
Total
3
20
1
26
50
“Create and stir other people to create” – Robert Frost
HOW HAVE MUNICIPALITIES SHAPED?
The Auditor General commented as follows on the 26
municipalities where the audit process in respect of IDP’s that
could not be completed :“However, the number of municipalities (26) where the audit
process in respect of the 2002-03 municipal year is not yet
finished, representing 52 per cent of the top fifty, is of grave
concern. As a result this compromises accountability. A
concerted effort should be made by all spheres of government to
address this matter.”
• Another notable statistic is that only 1 out of 50 municipalities
sampled had a fully-fledged PMS audit.
• The irony of this case is that a qualified opinion was expressed
because of a lack of proper governance structures and processes.
•
“Act as if what you do makes a difference. It does” – William James
•
•
•
HOW HAVE MUNICIPALITIES SHAPED?
Where IDPs were developed, the consultative processes had
often not been properly completed, IDPs and budgets were not
aligned, or other shortcomings existed.
The auditors confirmed that at only seven (29%) of the 24
municipalities had developed a PMS and some level of
implementation had been attempted.
However, in each of these 7 municipalities significant
shortcomings had been identified :- Inadequate consultations with communities.
-
•
Inadequate monitoring.
Targets and objectives not identified.
Each of proper governance structures on municipalities.
The Report Card on municipalities is not encouraging
“A man’s feet must be planted in his country, but his eyes should survey the world” –
George Santayana
WHAT IS A PERFORMANCE
MANAGEMENT SYSTEM?

There are various core components relating to PM as required
by Section 41 of the MSA and which are recognised by the
Auditor General.

The Auditor General uses the model which shows 9 phases
related to PM as required by the MSA (discussed later).
The PMS must be devised in such a way that it serves as an
early warning indicator of under performance.


PM is a means by which policy makers and managers monitor
performance over time so that they ensure that areas for
improvement are identified, targets set, and service delivery
improved.
“The difference between what we do and what we are capable of doing would
suffice to solve most of the world’s problems” – M. Gandhi
KEY FEATURES OF AN EFFECTIVE
SYSTEM
• Focused on the organisation’s key aims and objectives
• Appropriate for, and useful to, all stakeholders
• Timely, clear and accurate
• Cost effective
“Even if you are on the
right track, you will get run
over if you just sit there” –
Will Rogers
PHASES RELATED TO PERFORMANCE MANAGEMENT
ito MSA
Phase 8
Performance
Measurement and
reporting
Phase 9
Revision of
strategies and
objectives
Phase1
Development of
integrated
Phase 7
Internal control
Phase 6
Internal monitoring
Phases related to
Performance
Management as
required by the
Municipal
Systems Act
Phase 5
Actual service
delivery process
Development plan
Phase 2
Development and
Implementation of
PMS
Phase 3
Development
and
improvement
of KPI’s
Phase 4
Setting
targets
for KPI’s
PROBLEM AREAS RELATING TO
PERFORMANCE MANAGEMENT PHASES
PHASE 1 : DEVELOPMENT OF IDP
•
Community involvement is now a stipulated pre-requisite in
terms of s42 of the MSA.
• Municipalities lack the human resources to effectively
engage in a credible consultation process with the
community
• IDP’s are strategic documents to guide and inform the
budget. It is necessary to integrate the budgeting process
with the IDP and the Performance Management System to
form a holistic approach to resource management
• Linkages between IDP and the Budget and Performance
targets not easily established and discernible.
“Behold the turtle. He makes progress only when he sticks his neck out” –
James B. Conant
PROBLEM AREAS RELATING TO
PERFORMANCE MANAGEMENT PHASES
PHASE 2 : IMPLEMENTATION OF PMS
•
In terms of resource requirements, PM is information intensive
and not many municipalities have the required systems in place
•
Personnel capacity is also found to be wanting.
•
PMS needs to integrate with the IDP and Budgeting process.
•
Single most significant obstacle to successful implementation
of PMS lies in realm of organisational culture.
•
PMS requires radical change to commit to specific and tangible
levels of performance and thereafter regularly measure, report
and account for actual results.
•
National policy, legislation, regulations and guidelines do not
adequately recognise the need for interventions dealing with
organisational culture and change.
“After the game, the king and the pawn go into the same box” – Italian Proverb
PROBLEM AREAS RELATING TO
PERFORMANCE MANAGEMENT PHASES
PHASES 3 & 4 : IMPLEMENTATION OF PMS
•
Performance targets should comply with the SMART
principle (Specific; Measurable; Attainable, Realistic and
Time related)
•
Data availability is a key constraining factor in many cases.
•
The 9 National KPI’s do not adequately measure socioeconomic outcomes in municipal areas.
•
Some of the national indicators are poorly structured, open to
ambiguity and are in need of revision. (E.g. In the case of the
determinants of 3 formulae required : debt coverage,
outstanding service debtors to revenue, cost coverage).
•
Many of the national indicators requires the use of surveyed
information from the citizens.
“A failure is a man who has blundered, but is not able to cash in on the
experience” – Elbert Hubbard
PROBLEM AREAS RELATING TO
PERFORMANCE MANAGEMENT PHASES
PHASE 5 : ACTUAL SERVICE DELIVERY PROCESS
• If the municipality has not been explicit about the unit of
measurement; the measurement source and frequency with
which the indicator will be measured, it will be difficult to
measure the outputs and results achieved.
• Project management skills are required to ensure that the
service delivery targets are being met.
“I demolish my bridges behind me …
then there is no choice but to move
forward” – Firdtjof Nansen
PROBLEM AREAS RELATING TO
PERFORMANCE MANAGEMENT PHASES
PHASES 6 & 7 : INTERNAL MONITORING AND
INTERNAL CONTROL
The municipality has to set up an internal monitoring system
to track progress on an ongoing basis. This requires skill and
expertise and poorly resourced municipalities may have to
outsource this function where there is no internal audit
capacity.
•
There will be resistance by those apposed to transparency and
accountability to the close monitoring of results that PMS
requires.
•
Delays in the compilation of appropriate management
information will negate the benefit of an early warning system.
•
“Most people achieved their greatest success one step beyond what looked like
their greatest failure” – Brian Tracy
PROBLEM AREAS RELATING TO
PERFORMANCE MANAGEMENT PHASES
PHASES 8 & 9 : PERFORMANCE MANAGEMENT
REPORTING AND REVISION OF STRATEGIES
• PMS is often seen as an additional or parallel process.
However, it is a new way of working, where planning and
management is performance based.
• Customer satisfaction surveys are often costly and time
consuming.
• Organisational climate surveys for internal customers could
reveal issues which may be difficult to address (e.g. staff
motivation issues).
• The political will to change course as prompted by the
indicators published may not be forthcoming.
“Life is like a game of cards. The hand that is dealt to you represents
determinism; the way you play it is free will” – Jawaharial Nehru
SOME SOLUTIONS TO PROBLEMS IDENTIFIED
PREPARING STAKEHOLDERS

Buy-in of stakeholders is essential to success of PMS. The
following can be done in this regard.
-
Send officials and Councillors on appropriate training
programmes.
-
Employ the train-the-trainer-approach for knowledge
transfer.
-
Disaggregate stakeholder groupings e.g. Labour;
business
sector;
community
organisations;
IDP
Forums, etc, and run specialised interventions for each.
“Nothing can stop the man with the right mental attitude from achieving his
goal; nothing on earth can help the man with the wrong mental attitude” – W.
W. Ziege
SOME SOLUTIONS TO PROBLEMS IDENTIFIED
INSTITUTIONAL ARRANGEMENTS
Councillors, particularly the Mayor and Exco should take a
leading role in driving and championing PM.
At least one senior staff member should be solely responsible
for PM. This official should be located in the office of the
Municipal Manager.
Municipal cannot expect officials with other work demands to
drive and implement PM as an “add on”.
Buy-in
is significantly enhanced when a senior
official/Municipal Manager or Mayor champions the
implementation of PM.
Municipalities must be circumspect when using consultants to
implement PMS.
“Life is like a library owned by the author. In it are a few books which he wrote
himself, but most of them were written for him” – Harry R Fosdick
SOME SOLUTIONS TO PROBLEMS IDENTIFIED
FRAMEWORK
• Framework for PMS must be conceptualised as an inherent
part of management in the municipality, and as part of the
IDP process, not an “add on” i.e. it is the new way of doing
Business!
IDENTIFYING INDICATORS
•
•
Data availability will be a critical factor in the choice of
indicators.
Municipality must ensure that each of its chosen indicators
has an official who will be responsible for measuring,
analyzing and reporting on that indicator.
What we do for ourselves can get us by. What we do for others is what gets us
ahead; whether in our profession, spiritual pursuits or relationship” – Vincent
Kituku
SOME SOLUTIONS TO PROBLEMS IDENTIFIED
ORGANISATIONAL
CULTURE
AND
CHANGE
MANAGEMENT
• PM requires a radical change to organisational culture and the
various Municipal Clusters will need to commit to specific and
tangible levels of performance.
• Thereafter, such performance will be measured against
commitments made.
Change management courses mentioned earlier will play a
critical role here.
•
“Good teams become great ones, when the members trust
each other enough to surrender the me for we” – Phil
Jackson
SOME SOLUTIONS TO PROBLEMS IDENTIFIED
ANNUAL SURVEY
• Many national indicators require the use of surveyed
information from Citizens.
• Possibility exists for a national annual survey, providing data
that is useful to and statistically significant for municipalities.
• This exercise could minimize the costs of generating accurate
information for performance measurements and prevent parallel
and often costly surveys run by each municipality.
“Anything can be made simpler if you have the 3
most important ingredients : common sense (70%),
understanding (20%) and sharing (10%)” – L Bajaj
A CASE STUDY : WEST SUSSEX, ENG
CONTEXT
• Population of 755 900 people – 10th largest local authority
• Main services are education, social services, highways, waste
disposal, and fire and rescue
• Budget of 894,3 million pounds revenue and 133,9 million
pounds capital
• 28 148 staff
APPROACH
• Integrates services, financial and resource planning, and risk
management with performance management
• Operates throughout the organisation
• Developed over a number of years – will never be perfect
A CASE STUDY : WEST SUSSEX, ENG
PLANNING & PMS
COUNTY STRATEGY
COMMUNITY
STRATEGIES
SERVICE
STRATEGIES
ANNUAL CORPORATE
PLAN
SERVICE UNIT ANNUAL
BUSINESS PLANS
TEAM & INDIVIDUAL
TARGETS
A CASE STUDY : WEST SUSSEX, ENG
FOUR MAIN LEVELS TO THE SYSTEM
• Cabinet level and the whole Council
• Cabinet members and Directors for each service
• Directors and Heads of business units for each business
• Managers, teams and individuals
“I would rather have a mind
opened by wonder than one
closed by belief” Gerry Spence
A CASE STUDY : WEST SUSSEX, ENG
STRATEGIC LEVEL
WHO?
WHAT?
HOW?
• The
Cabinet for discussion
• The whole Council for information
• Top 20 targets in County strategy
• National best value indicators
• Budget monitoring
• Top 20 risks
• Quarterly report to Cabinet meeting
• Exceptions highlighted
“CHANGE brings GROWTH, and with GROWTH comes PAIN… but it’s the
PAIN that causes man to overcome in order to be SUCCESSFUL” M Nash
A CASE STUDY : WEST SUSSEX, ENG
SERVICE LEVEL
WHO?
•
WHAT?
•
HOW?
Cabinet Members
• Directors
Relevant County strategy targets
• Relevant national best value performance
indicators
• Local key performance indicators
• Budgets
• Relevant Top 20 risks
• Quarterly reports to meeting
• Exceptions highlighted
• Detailed discussion to show improvement
“Knowledge is potential; action is power” – Anthony Robbins
A CASE STUDY : WEST SUSSEX, ENG
BUSINESS UNIT LEVEL
WHO?
WHAT?
HOW?
•
Directors
• Heads of business units
• Relevant County strategy targets
• Relevant national best value performance
indicators
• Local indicators for service
• Budgets
• Key risks
• Preparation and quarterly monitoring of
business plans
• Regular meetings to review and identify
corrective action
A CASE STUDY : WEST SUSSEX, ENG
INDIVIDUAL LEVEL
WHO?
WHAT?
HOW?
•
Heads of business units
• Team leaders
• Individuals
• Tasks and targets in business plans
• Personal development plans
•
Regular team meetings (weekly or monthly)
• Annual personal development reviews
“It is when we forget ourselves that we do
things that are remembered” E Bertin
A CASE STUDY : WEST SUSSEX, ENG
KEY MESSAGES/LESSONS
• Measure what matters
• Take action on what matters most
• Help people and services to improve
“Being on the tightrope is living; everything else is waiting” Karl Wallenda
ETHEKWINI PERFORMANCE
MANAGEMENT SYSTEM
• Completed PM for all first and second level management 2003/4
• Third level completed 2004/5
• Roll out to every employee in the future
• Purchased a performance management system, however, further
developing same on our Virtual Works platform and integrating
with our other systems
• Will be done through our SmartXchange PPP
“I feel that the greatest reward for doing is
the opportunity to do more” Dr Jonas Salk
CONCLUSION
•
•
•
•
Despite problems identified thus far, performance management
is proving to be a practical and useful approach to
communicating commitments and expectations and ensuring
accountability and transparency in Local Government.
A good system can help performance to improve
Leaders at all levels throughout the organisation must
constantly reinforce the message that performance matters
There will always be scope for improvement …
“If 95% of people’s thinking doesn’t
correlate with yours, never try to change,
question or introspect yourself. The world
of success belongs to people who think
innovatively, differently and
progressively” – L Goutam
THE END
Presentation by Krish Kumar
“Twenty years from now you will be more disappointed by the things
that you didn’t do than by the ones you did do. So throw off the
bowlines. Sail away from the safe harbour. Catch the trade winds in your
sails. Explore. Dream. Discover.” – Mark Twain