Consolidated report on the performance of NC municipalities

Consolidated report on the performance of NC municipalities 2007/2008 in terms of Section 47 of the Local Government Municipal Systems Act, 2000 14 August 2009

Terms of Reference MEC of Local Government annually compiles and submits to • Prov Legislature (s 47) and • Minister (S 48) • Municipal annual reports (s 46) 18 submitted a consolidated report on municipal performance which: • Identifies municipalities that underperformed • Proposes remedial action to be taken • Is published in the Prov Gazette

Key performance indicators What are the compulsory KPIs? ü Section 43 of the Systems Act authorizes the Minister to prescribe general KPIs that every municipality must report on. Regulation 5(1) mentions the following general KPIs: • Used KPA of the 5 yr strategic agenda 1. Municipal transformation: capacity to perform functions, staff, skills levy & training, PMS KPA 1 2. Basic service delivery: basic free basic services, expenditure on cap projects KPA 2

Key performance indicators 3. LED KPA 3 4. Financial viability & management: fin performance, audit outcomes KPA 4 5. Good governance & public participation: ward committees, CDW, traditional leadership, IGR, supply chain management KPA 5 6. Cross cutting: IDP rankings, disaster management, realigned muns, urban/rural nodes, Vuna awards

What is reported? ü Target ü Actual performance achieved ü Disaggregated information per municipality ü Challenges ü Interventions ü Recommendations

Transformation § Capacity to perform functions DMB report § 21 functions on ave by LM, 13 by DMs § 6, 598 employees, vacancy of 16% § 83 s 57 posts filled, 91% filled § 15 or 10% s 57 posts filled by women § Acting fin M =11, MM = 9 acting § Key positions not always filled with persons with relevant qualifications

Transformation Challenges & recommendations § Shortage of ‘right' staff § Deployments of Siyenza Manje, DBSA, SAICE and DH&LG at 10 municipalities § DH&LG to participate in annual MDB assessments

Skills levy § LGSETA paid out R 0, 39 million in grants to 6 municipalities (DATA LACKING) § 5 municipalities not submitted 2008/2009 WSP § Councillor induction/orientation training 425 Challenges & recommendations § Fin constraints, low staffing levels § Accreditation of training service providers § Info from LGSETA poor

PMS § PMS according to AG: § The annual report did not include annual performance report of the municipality prepared by the municipality in terms of S 46 of the MSA as required by section 121(3)(c) of the MFMA. § A performance management system had not been fully implemented and the council did not comply with all the requirements as set out in chapter 6 of the MSA and performance measurement regulation. No performance report was submitted for audit purposes. § An annual performance report was not submitted. The IDP did not include a budget as required. § Challenges & recommendations § Database on municipal regulations was established § Workshops held with municipalities on these regulations § Municipalities were supported by Prov Treasury and DH&LG to link PMS to planning & implementation § VUNA awards were held § PMS coordinator appointed to support municipalities

Access to basic services § 2007 bucket eradication on formal pre-1994 stands: 6 muns still implementing projects in May 2008 § Water supply needs: 11, 255 HH in towns and 7, 109 on farms § DWQ //Khara H & Kareeberg 1005 compliance E. coli (2 yrs). Magareng, Kai !Garib & Thembelihle improved § Sanitation needs: 42, 227 in towns/villages & 19, 057 on farms § Electricity needs: 46, 608 § Solid waste: no refuse CS 2007 3% but… SP 92% (2. 2% CS)

Access to basic services Challenges & recommendations ü ü ü MIG allocations – muns wait until allocations are made before planning Mutli year planning required Experts deployed to assist with projects and planning Bulk infrastructure associated with backlog eradication requires attention MIG amounts too small, medium term planning thus essential Acceptance of dry sanitation Update backlog data on farms PMITT established to discuss challenges PBPAC established to recommend water and sanitation plans Mun infrastructure unit established with 6 PMUs CIPs needed by end Aug 2008, DBSA assisting some muns

Access to FBS § By 2012 universal access to FBS § All municipalities have an indigent policy, verification of registers problematic – Moshaweng and Ga-Segonyana § FBWater to 85, 221 indigent HH § 12 mun deliver to ALL HH § Free basic sanitation recorded by all but 4 § All muns 50 Kw. H to indigent HH 92, 673 § FBrefuse (at all but 3)

FBS Challenges & recommendations § § ü ü Municipalities that deliver >6 kl set unsustainable precedents As does delivering to non-indigent HH Verification process of indigent registers requires attention Installation of meters is required otherwise the amount of FBS cannot be controlled and revenue is lost Prov steering committee established & functioning All mun should have indigent policies and register in place by March 2009 Workshops held, Special Intervention Prog Ga. Seg, awareness campaigns Ga-Seg and SP part of SA study on equitable share

Expenditure on capital projects § MIG June 2008, 72% of R 222 m allocation spent § 18 municipalities had not spent full allocation by 30 June 2008, 2 received no initial allocation § Bucket allocation 45% spent § 5 had funds stopped

Expenditure on capital projects Challenges & recommendations § Prioritizing projects that require funding to meet national targets § Training municipal staff in project management ü ü ü Implementation according to proj registration Facilitation and support to ensure spending Monitoring on spending More frequent site visits Timeous interventions to meet challenges

Local economic development § LED forum established in all districts except Siyanda § Capacity assessments done in all districts § Technical support needed § Approach needs to be changed § Create the ‘right’ environment § Information reported in VUNA, AR etc is poor § LED jobs 3, 497 (10 mun) § Cap project jobs 4, 094 (13 mun)

Financial viability § 17 municipalities ended 2007/2008 with a surplus; 11 accumulated surplus § All, except one had some cash on hand despite 8 having bank overdrafts that exceeded the amount of cash on hand § Creditors amounted to R 291 m § 8 municipalities had creditors that accounted for more than 30% of opex § 15 municipalities managed to contain salaries & councillor remuneration within 35% of operating expenditure; 1 exceeded 50%

Financial viability § Recoverable debt amounted to R 569 m, value of recoverable debtors to total rev is 26% § Only 1 did not make provision for bad debt § Provision for bad debt amounted to R 451 m or 44% of total outstanding debt § Ave debtor days 95 § On ave 36% of income is comprised from subsidies and grants; at 13 it exceeded 40%

Financial viability Challenges & recommendations § Hand-on support provided § Assistance with s 71 reports on-going § Siyenza Manje deployed: Siyanda, Namakwa, Renosterberg, Karoo Hoogland, Moshaweng, Magareng § Ability to effect proper credit control § All muns requested to submit plan of action to address issues raised by AG § Regional meetings held to assist, advise and monitor § Focused assistance by coghsta and p. Treasury to 6 mun (Siyathemba, Ga-Seg, Phokwane, Gamagara, Siyancuma, Dikgatlong)

Performance measurement & opinion on fin statement § AG opinion on 2007/2008 financial statements: § 20 (25) Disclaimers § 0 (1) Adverse § 8 (4) Qualified opinions § 2 Unqualified with concerns raised on ‘other’ matters § 0 Unqualified without further concerns raised

Good governance § All wards have ward committees 183 § All but 46 functional § CDW 317 and 16 vacancies § Est. of local house of traditional leaders in Kgalagadi § District IGR forums § Imbizos held by DMs

Governance Audit committee in operation throughout the year Audit committee operates in accordance with approved written TOR Audit committee substantially fulfilled its responsibilities for the year as set out ion section 166(2) of the MFMA An internal audit function in operation throughout the year Internal audit function operates in terms of an approved internal audit plan Internal audit function substantially fulfilled its responsibilities for the year as set out in section 165(2) of the MFMA AFS were submitted for auditing as per the legislation deadlines in s 126 of MFMA AR was submitted to the auditor for consideration prior to the date of the auditor's report AFS submitted for auditing were not subject to any material amendments resulting from the audit No significant difficulties were experienced during the audit concerning delays or the unavailability of expected information and/or the unavailability of senior management The prior year's external audit recommendations have been substantially implemented Municipality submitted an implementation plan, detailing progress towards full compliance with GRAP, to National treasury and relevant provincial treasury before 30 October 2007 Municipality submitted an implementation plan it submitted to National Treasury and provincial treasury before 30 October 2007, detailing its progress towards full compliance with GRAP Municipality submitted an implementation plan, detailing further progress towards full compliance with GRAP, to the National Treasury and provincial treasury before 31 March 2008 38% 58% 17% 67% 75% 50% 88% 16% 31% 42% 23% 38% 31% 35%

Cross cutting § Only 66% of credible IDPs adopted § Highest scores Pixley ka Seme and Sol Plaatje § Only province without a Disaster Management Centre? § 3 DMs have appointed heads of centers and support staff

Cross cutting § Withdrawal of all DMAs in process, due before 2011 elections § Urban node – Galeshewe projects § Rural node – Imbizos to coordinate development § VUNA Awards – only 23 participate

Ranking municipalities Six indicators chosen: § HH served with basic sanitation § Sustainable Free basic water policies § Spending of MIG § AG’s opinion on 2007/2008 AFS § Number of debtor days § Cost of employees and councilors as a % of operating expenditure § TOP 5: Frances Baard, Richtersveld, Pixley ka Seme, Kgalagadi, Gamagara § BOTTOM 6: Mier, Thembelihle, Sol Plaatje, Umsobomvu, !Kheis, Kamiesberg, Siyancuma

Ranking municipalities

Trends ü Buckets eradicated formal areas, all except 6 implementing May 2008 ü Water backlogs are being addressed, decreasing ü Sanitation backlogs being addressed ü Greater provision of bad debt ü Consumer debt decreased by 4% ü More municipalities containing salaries and councillors within 35% ü Number of municipalities received qualified audit opinions is increasing ü Ward committees are established in all wards

Trends Areas where no improvement was made over the three years assessed are: û More households are being registered as indigent households each year û % MIG allocation spent by end of year û Average number of debtor days is not reducing û More muns relying on subsides and grants for income