MUNICIPAL SYSTEM IMPROVEMENT MUNICIPAL SYSTEM IMPROVEMENT GRANTGRANT

QUARTERLY MSIG PERFORMANCEQUARTERLY MSIG PERFORMANCE

PRESENTATION TO SELECT COMMITTEE PRESENTATION TO SELECT COMMITTEE OF FINANCEOF FINANCE

08 AUGUST 200608 AUGUST 2006

OVERVIEW OF PRESENTATION

1. Purpose of presentation2. Background3. Measurable Outputs4. Financial Performance 5. Overall Quarterly performance6. Corrective measures to address financial performance7. Overall Challenges8. Response Strategy for future9. Critical Success Factors

1

Purpose

• To brief the Select Committee of Finance on the performance of the Municipal Systems Improvement Grant (MSIG) and the strategy to improve performance.

2

Background• MSIG started in 2002 as conditional grant to support municipalities

in building basic municipal systems mainly implementation of the Local Government Municipal Systems Act, 2000

• Allocations reconfigured to not only be directed to Districts but also include Categories A and B municipalities

• Allocation for 2004/05 was R 200 million• MSIG Framework from 2004/05 embraced Project Consolidate as a

new initiative• Implication: Receiving municipalities increased from 47 Districts to

a total of 198 receiving municipalities (Districts, Metros, Locals)• Total allocation for MSIG from 2006/07 is R 600 mil over 3 yrs

(200 mil per FY)

2

1. Local Economic Development and Spatial Development:- The development of Spatial Development Frameworks, LED strategies, procedures and policies

2. Financial Viability:- Support the pilot Project Consolidate initiative to develop holistic customer

care (billing) systems and specific revenue enhancement initiatives.- Annual Financial Statements support - municipalities that have failed to do so over the past two years.

3. Institutional Transformation and development:- Support to PIMS Centers.- Implementation of Section 78 of MSA - division of powers and functions- Implementation of Performance Management Systems- Review of IDP’s and alignment with Budgets and Provincial Growth & Development Strategies- Skills development

4. Good Governance:- Ensure functionality of Ward Committee Systems and promotion of Public Participation

2005/06 MSIG Framework outputs

3

Financial Performance - Quarter ending June 2006

4

Prov No of munics

Allocated(millions)

Actual Exp (millions)

Exp in % Average no of reports

E.C 29 29 244 17 691 60.5% 12FS 18 16 340 10 753 66% 8GT 11 15 368 10 863 70.7% 5KZN 41 37 436 16 179 43.2% 12Limp 24 22 678 14 143 62.4% 10

MP 19 20 676 13 501 65.3% 8NC 22 20 644 12 828 62.1% 9

NW 17 19 542 11 039 56.5% 8WC 17 18 072 9 833 54.4% 8Total 198 200 000 116 831 58.4% 80

Overall Quarterly performance• IDPs Reviewed and aligned to budget.• Processes for compilation of 2005/06 Annual Financial

Statement started• Training of new ward councilors started during

May/June 06• Municipalities starting to implement the Municipal

Property Rates Act (developing Valuation rolls)• Service Delivery Facilitators deployed in 12

municipalities to implement Revenue Enhancement programmes

6

Corrective measures • Letters of non-compliance sent to all non

reporting municipalities to confirm the expenditure for quarter ending June 2006

• Met provinces (Dept of LG) to assist in ensuring municipal compliance

• Visited municipalities with very low % of expenditure (through District)

• Compiled a database for responsible officials in individual municipalities

7

Challenges in the past and present

• Compliance:Non submission of monthly expenditure and quarterly reports by receiving municipalities

• Business planning system opened for many projects inconsiderate of implementation capacity

• Limited impact demonstrated/impact not traceable due to lack of reporting

7

Response strategy to challenges

• Redesign the reporting regime on the grant– Monthly Expenditure reports not to serve only the purpose of NT

reporting but designed to capture progress on projects identified in the activity plans

• Introduce productive and participative mechanisms and processes

– Enforce district-wide activity planning workshops facilitated by receiving District municipality

– Mainstream Provincial MSIG Activity Plans workshops facilitated by LG Depts

– Re-introduce Quarterly Review Workshops facilitated by LG Depts and the dplg output managers

• Strict application of the DORA in terms of “withholding” and “stopping” of allocations in case of material non-compliance

9

Critical Success Factors• Continuous engagement with the DORA

determination process to ensure observance and appreciation of cooperative governance principles.

• Improved planning and communication of MSIG modalities

• Continuous review of the MSIG policy and procedure manual

• Hands-on support and mobilization of other sector depts within the opportunity of Project Consolidate

• Effective implementation of the Intergovernmental Relations Framework Act provisions

14

THANK YOU