STRATEGIC PLAN ANNUAL PERFORMANCE PLAN AND BUDGET 2015

STRATEGIC PLAN, ANNUAL PERFORMANCE PLAN AND BUDGET 2015 TO 2020 MUNICIPAL DEMARCATION BOARD BRIEFING TO THE PORTFOLIO COMMITTEE ON COOPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS DELEGATION Ms MJJ Thupana Chairperson: Municipal Demarcation Board Mr AM Adam Deputy Chairperson: Municipal Demarcation Board Mr MH Manjezi Acting Chief Executive Officer Mr A Ramagadza Executive Manager: Operations and Research Ms MS Mahlangu Acting Chief Financial Officer

OUTLINE OF PRESENTATION • • • PURPOSE OF THE PRESENTATION INSTITUTIONAL ARRANGEMENTS LEGISLATIVE MANDATE OF THE BOARD MDB VISION, MISSION AND VALUES BROAD PROCESS AND TIMEFRAMES 2015 TO 2020 STRATEGIC PLAN EMERGING RISKS KEY CHALLENGES 2015/16 ANNUAL PERFORMANCE PLAN BUDGET OVER THE MTEF BUDGET FORECAST AND UTILIZATION OF THE RESERVES CONCLUDING REMARKS

PURPOSE OF THE PRESENTATION • To enable the Portfolio Committee to discharge its mandate of oversight on Budget Vote 4, specifically on the Municipal Demarcation Board • To present to the Portfolio Committee: – MDB Strategic Plan for period 2015 -2020; – The Annual Performance Plan for the 2015/16 financial year; – The budget allocation of the institution; – Challenges encountered by the institution.

INSTITUTIONAL ARRANGEMENTS • THE BOARD The Board is led by an Executive Chairperson, and discharges its duties through subcommittees of the Board which are: Executive Committee Policy and Research Committee Boundaries, Powers and Functions Committee Remuneration and Human Capital Committee Audit and Risk Committee • ADMINISTRATION The administration supports the Board and is led by a Chief Executive Officer who is an Accounting Officer. The institution has four programmes which are: Operations Research and Knowledge management Finance Corporate Services

LEGISLATIVE MANDATE Determination of municipal outer boundaries • Section 155(3)(b) of the Constitution • Section 4(a) of the Municipal Demarcation Act 27 of 1998 (“MDA”) • Section 4 of the Municipal Structures Act 117 of 1998 (“MSA”) provides for categorisation of municipalities Delimitation of municipal ward boundaries • Schedule 1 to the MSA – MDB, after consultation with the Electoral Commission must delimit wards for purposes of local elections Assessment of municipal capacity • Section 85 of MSA provides for the MDB to assess municipal capacity when determining boundaries • Impact analysis and evaluation: Opportunity to evaluate impact of Board decisions Rendering of advisory services to stakeholders • Section 4(b) of the MDA • Opportunity to follow through on implementation of municipal boundary redeterminations

MDB VISION, MISSION AND VALUES Vision Mission Values • The leading demarcation and spatial knowledge hub. • To produce municipal and ward boundaries that are functional beyond reproach and contributes towards a responsive spatial configuration, including municipal capacity assessments that lay the foundation for a developmental local government. • • • Independence Fairness, transparent and integrity Stakeholder engagement Knowledge sharing Good Governance 7

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2015 to 2020 Strategic Plan 9

KEY STRATEGIC GOALS Determination & redetermination of municipal boundaries Good Governance Delimit wards to facilitate local government elections Organisational review & realignment Public participation and stakeholder engagement Municipal Capacity Assessments Research & Knowledge management 10

2015 - 2020 STRATEGIC GOALS Strategic Outcome Determine and re-determine Delimit wards to facilitate Assess the capacity Orientated municipal outer boundaries local elections. municipalities • Determine and re-determine • Delimit wards for all • Conduct capacity of Goals Goal Statement municipal boundaries to municipalities that qualify to assessments of municipalities enhance spatial and economic have wards into wards during to inform boundary integration in line with the 2016 and 2021 in terms of determinations and demarcation criteria. Schedule 1 to the Local adjustment of functions • Provide pre-and post- Government: Municipal between district and local Structures Act, 1998. municipalities. demarcation coordination and support to ensure efficient and • Handover of finalised wards to • Revise the capacity sustainable implementation of the IEC to facilitate the local the Board determinations elections. • Advise service delivery departments of changes to municipal boundaries. assessment model.

2015 - 2020 STRATEGIC GOALS cont… Strategic Outcome Strengthen Research and Orientated Knowledge Management Goals Goal Statement • Initiate research & form Improved Public Sound Financial Engagement and Management and Good Communication Governance • Create platforms to strengthen • Ensure effective management, partnerships to develop and public participation and broad planning and efficient use exchange spatial research citizen engagement in the resources to accomplish data that will inform decision demarcation processes. strategic goals. making on boundary matters. • Strengthen partnerships with • Coordinate and process data key stakeholders to improve ensures adherence to laws, coordination and integration. regulations, organizational to produce information that will add value to the planning processes of municipalities. • Create awareness and understanding of the MDB mandate. • Rebrand the organization in • Create an environment that policies, processes, systems and practices. • Develop and nurture capabilities to ensure a pool of line with its new vision, skills to drive implementation mission & values. of the MDB strategy.

2015 - 2020 STRATEGIC OBJECTIVES Strategic objective 1 Determination and redetermination of municipal boundaries 2 Delimit wards to facilitate local government elections Medium term target 2015/16 2016/17 2017/18 2018/2019 100% of Municipal Pre-section Section 26 requests for boundary re- 26 process, boundary re- determination consultations including determinatio policy and with publication ns procedures. stakeholders inviting and considered developed to validate receiving and proposed re- views and processed determinatio representatio ns finalized n published 100% of Report on the Review of the Draft plan for wards for the evaluation of ward the 2021 2016 local the ward delimitation ward government delimitation Policy and delimitation elections process procedures completed finalised prepared finalised 2019/2020 Municipal boundary redetermination s completed Commencem ent of the ward delimitation process 13

2015 - 2020 STRATEGIC OBJECTIVES Strategic objective 3 Capacity Assessments Medium term target 2015/16 Develop and design a new and relevant capacity assessment model 4 Knowledge Development research and partnerships themes and with other similar research plan research institutions 2016/17 2017/18 2018/2019 Administer and manage capacity assessment service providers Create and write policy documents for research knowledge management Develop and build an inhouse capacity assessment capability Establish relationships with similar organizations and international demarcation boards Conduct capacity assessments in-house 2019/2020 Implement lessons learned from previous capacity assessments Creation, Conduct implementatio annual n and systems handover of review and repository updating of and database repository to further and database knowledge management 14

2015 - 2020 STRATEGIC OBJECTIVES Strategic objective 5 Ensure Good Governance and Sound Financial Management Medium term target 2015/16 2016/17 2017/18 2018/2019 Improve system of internal controls and an internal audit rating 2 audit rating 1 (fully effective and adequate systems of internal control) Clean audit Diversify Effective sources of management revenue and of secured secure four funding secure five funding revenue additional streams revenue 2019/2020 Improve system of internal controls and an internal audit rating 1 (fully effective and adequate systems of internal control) Clean audit Effective management of secured funding 15

2015 - 2020 STRATEGIC OBJECTIVES Strategic objective 6 Public awareness and stakeholder engagement Medium term target 2015/16 2016/17 2017/18 2018/2019 Leverage Stakeholder relations and create MDB specific stakeholder platforms Develop Maintain and internal and monitor external internal and communicati external on channels communicati on channels Strategic Re-branding Annual brand building 2019/2020 Leverage Stakeholder relations and create MDB specific stakeholder platforms Maintain and monitor internal and external communicati on channels Annual brand building 16

2015 - 2020 STRATEGIC OBJECTIVES Strategic objective 7 Human Resources Management 2015/16 Develop a revised organizational structure and secure funding Develop and implement a credible performance management system Establish a continuous development programme for staff and management Medium term target 2016/17 2017/18 2018/2019 Implement Monitor revised organizational organisational structure and its effectiveness Continuously implement a credible performance management system Implement Monitor and the implement development the programme development for staff and programme management for staff and 2019/2020 Monitor revised organisational structure and its effectiveness Continuously implement a credible performance management system Monitor and implement the development programme 17 for staff and

2015 - 2020 STRATEGIC OBJECTIVES Strategic objective Human Resources Management Medium term target 2015/16 2016/17 2017/18 2018/2019 Develop a Implement a Monitor the remuneration reviewed strategy and remuneration framework strategy and framework Implement Integrated Human Resources Plan 2019/2020 Monitor the reviewed remuneration strategy and framework Implement Integrated Human Resources Plan 18

2015 - 2020 STRATEGIC OBJECTIVES Medium term target 2015/16 2016/17 2017/18 2018/2019 8 Ensure good Submit Implement and sustainable proposed and Monitor corporate amendments legislative governance and compliance Regulations to Minister Implement Review the and Monitor Combined legislative Assurance compliance Model Policies Review/draft reviewed and new policies drafted Strategic objective 2019/2020 Implement and Monitor legislative compliance Review/draft new policies 19

EMERGING RISKS Risk Insufficient resources human Mitigation and financial • Review organisational structure; • Ensure optimal utilisation of personnel. existing Inadequate public and stakeholder engagement in demarcation processes • Establishing provincial presence; • Explore better ways of enhancing collaboration with stakeholders. Litigation in dispute of demarcation decisions • Enhance stakeholder engagement; • Conduct thorough background research and consistent application of demarcation criteria. 20

KEY CHALLENGES • Strategy and mandate incompatible with current resources and capabilities – Very lean organizational structure e. g. only 35 approved posts, 8 of which are on contract. – Resultant over reliance on consultants; – Slow adaptation to the local government sector dynamics. • Negative public perception. • Lack of a provincial footprint creates disconnection with the public. 21

2015/16 Annual Performance Plan 22

PROGRAMMES SUPPORTING IMPLEMENTATION OF STRATEGY The implementation of the strategy is supported by three programmes as follows: Programme 1: Operations • The programme gives effect to the institution’s legislative mandate of determining and re-determining municipal boundaries, appropriate categorisation of municipalities, advisory service on the alignment of service delivery boundaries to municipal boundaries and delimitation of municipal wards for local government elections. Programme 2: Research and Knowledge management • The programme will conduct municipal capacity assessment to support decisions made by the Board on boundary demarcations. • The programme included knowledge development and management to facilitate optimal decision making and to position the Board as a knowledge hub on all matters involving spatial planning and boundary demarcations.

PROGRAMMES SUPPORTING IMPLEMENTATION OF STRATEGY Programme 3: Financial Management and Accounting • This programme leads financial strategy of the institution and contributes toward resourcing of planned programmes. Focus over the next five years will be: – – Optimising financial resources from traditional sources and to secure new opportunities; Enhance accountability and reporting measures by delivering statutory reporting requirements and management information; Contribute towards value for money through effective supply chain management services; Compliance to PFMA legislation, regulations & MDB policies and procedures. Programme 4: Corporate Services • This programme provides corporate services to all the other programmes within the organisations including: – – Human Capital & Administration Communications & Stakeholder Management Legal Services and Board Secretariat Information Technology

2015 ANNUAL PERFORMANCE TARGETS PROGRAMME 1 Performance indicator Determination and All requests for re-determination of boundary remunicipal determinations boundaries. processed. Delimit wards for all municipalities that qualify to have wards. 1. 1 Delimit wards to facilitate local government elections. 2015/16 Annual Target 100% of requests for boundary redeterminations considered and processed. 2. 1 Strategic Objective 100% of wards for the 2016 local government elections finalised. Activities Conduct formal investigations and/or public meetings by 30 June 2015. Publish Section 21 notices after resolution by the Board. Publish Section 21(5) notices by 31 July 2015. Ward consultative meetings conducted for qualifying municipalities. Consider and map all submissions received and publish notices for ward objections by 30 May 2015. Publication of final wards by 30 September 2015, and for municipalities 2015/16 Budget R 22 473 869

Knowledge Development and partnerships with other similar research institutions. Number of partnerships established with other similar research institutions 4. 1 Capacity Assessments Performance indicator Date by which to develop a new capacity assessment model. Demarcation Review Symposium 4. 2 Strategic Objective 3. 1 2015 ANNUAL PERFORMANCE TARGETS PROGRAMME 2 2015/16 Annual Activities Target New capacity model Review existing models and developed by models of other departments. 30 September 2015. Test model and evaluate results from the pilot study. Report on challenges and constraints. Four partnerships Identify and contact established with organisations conducting other similar research both local and research institutions. international. Write report on progress towards establishing partnerships for knowledge sharing. Co-produce a national event on knowledge sharing for spatial planning. Demarcation Conceptualization and identify Review Symposium resources for symposium. held. Host symposium and compile 2015/16 Budget R 2 810 590

2015 ANNUAL PERFORMANCE TARGETS PROGRAMME 3 Frequency of Organisational and Financial Performance 5. 1 Internal audit rating 2 (audit objectives met with housekeeping matters) Four quarterly risk management reports produced Zero instances of noncompliance with National Treasury cost containment measures Internal audit rating 2 (audit objectives met with housekeeping matters). Quarterly risk assessments conducted and reports produced. Zero instances of noncompliance with National Treasury cost containment measures. 5. 3 Clean audit (Unqualified audit without emphasis of matter). 5. 4 Number of risk management reports Number of findings on non-compliance with cost containment measures Number of sources of revenue Activities Clean audit (Unqualified audit without emphasis of matter) 5. 5 Opinion of the Auditor General on Annual Financial Statements Internal audit rating 5. 6 Ensure Good Governance and sound financial management 2015/16 Annual Target 5. 2 Strategic Objective Performance indicator One (1) additional source of revenue or funding Secure One (1) additional source of revenue or funding. One (1) Organisational and Quarterly Organisational Financial Performance and Financial Performance Monitoring Report issued Monitoring work sessions conducted and report 2015/16 Budget R 7 837 339

6. 1 Six (6) MDB Stakeholder engagement platforms created. 6. 2 Number of media analysis reports. Number of perception surveys. Activities Four (4) internal communication activities Quarterly internal newsletters published 6. 3 Number of MDB stakeholder engagement platforms created for public engagement. Number of internal communication activities. Number of external communication activities. 2015/16 Annual Target Four (4) external communication activities 6. 4 Performance indicator Four (4) media analysis reports Two (2) Perception surveys One educational DVD developed. Three corporate publications. One social media education campaign on Board mandate and roles. Four (4) media analysis reports. One (1) internal survey completed. One (1) external 6. 5 Strategic Objective Public awareness and stakeholder engagement 2015 ANNUAL PERFORMANCE TARGETS PROGRAMME 4 2015/16 Budget R 1 556 601

2015 ANNUAL PERFORMANCE TARGETS PROGRAMME 4 cont…. . Percentage of employees on establishment having performance contracts in place. Frequency of conducting 7. 1 Date by which an optimally functioning organisational structure is in place. 2015/16 Annual Target Approval of the proposed, revised organisational structure by 30 June 2015. 7. 2 Performance indicator 100% of staff having performance management contracts in place. 7. 3 Strategic Objective Human Resources Management Conduct performance assessments twice a Activities Approval of the proposed, revised organisational structure by 30 June 2015. Resourcing of the approved structure. Migration of staff members to new positions and change management. Preparation for filling of positions in the structure. (Once assurance of finance has been received from NT). Ensure that all staff members have performance management contracts in place. Conduct performance assessments twice a year 2015/16 Budget R 11 009 037

Number of wellness interventions conducted. Percentage of employees Activities 7. 4 Number of teambuilding, leadership, change management and people management interventions. Date by which to complete evaluation of new remuneration strategy. 2015/16 Annual Target Two (2) interventions: teambuilding, leadership, change management and people management interventions conducted. 7. 5 Performance indicator New remuneration strategy evaluated by 31 March 2016. Four (4) employee wellness intervention conducted. 100% of employees to have Personal Develop new remuneration strategy and framework. Consult with key stakeholders. Implement new remuneration strategy after approval from Board. Quarterly employee wellness interventions conducted. Ensure that all staff members have Personal 7. 7 Strategic Objective Human Resources Management 7. 6 2015 ANNUAL PERFORMANCE TARGETS PROGRAMME 4 cont…. 2015/16 Budget

2015 ANNUAL PERFORMANCE TARGETS PROGRAMME 4 cont…. 8. 1 Percentage of policies reviewed Number of quarterly compliance reports Website visitor numbers Submit proposed amendments to legislation and proposed Regulations for Municipal Demarcation Act by 31 March 2016 100% of all policies scheduled for review Four (4) Compliance reports produced Increase website visitor numbers by 25%. 8. 3 Date by which proposed amendments are compiled, approved by Board and submitted to Minister 2015/16 Annual Target 8. 2 Information technology services Performance indicator 9. 1 Strategic Objective Ensure good and sustainable corporate governance Activities Identify legislation requiring consolidation and amendments. Compile proposed amendments and consolidations. Draft regulations for the Municipal Demarcation Act. Submit proposed amendments and regulations to Minister. Review all policies. Quarterly compliance reports produced. Identify website short comings. Develop and design new website. Develop a procedure for improving website content. Launch new website and collect user feedback. 2015/16 Budget R 2 702 962 R 1 670 751

Medium Term Expenditure Framework 32

BUDGET Budgeted expenditure by economic classification R thousand REVENUE Transfers - Appropriated funds Other income Total revenue OPERATING EXPENDITURE Compensation of employees Lease payments Goods and Services TOTAL OPERATING EXPENSES OPERATING SURPLUS/ (DEFICIT) CAPITAL EXPENDITURE Total capital investment Audited Outcome 2013/14 Revised estimate 2014/15 Medium term Expenditure Estimates 2015/16 2016/17 2017/18 42 182 44 230 45 793 48 220 50 631 948 43 130 840 45 070 620 46 413 496 48 716 149 50 780 17 990 2 336 24 390 22 651 3 592 23 699 23 653 3 211 36 401 43 534 5 137 33 923 46 843 5 137 36 410 44 716 49 941 63 264 82 595 88 389 (1 586) (4 871) (16 851) (33 879) (37 610) 689 3 322 1 785 6 507 490 33

2012/13 2013/14 2014/15 2015/16 2016/17 50, 779, 808 50, 631, 000 48, 716, 027 48, 220, 000 63, 264, 000 46, 413, 034 45, 793, 000 49, 941, 341 45, 172, 000 44, 230, 000 44, 716, 402 43, 130, 000 42, 182, 000 34351000 Operating surplus/deficit 88, 389, 000 82, 595, 000 Total Expenditure (16, 850, 966) (4, 769, 341) (1, 586, 402) 6, 972, 000 41323000 Total Income (37, 609, 192) 2011/12 40397000 35812000 39123000 38482000 Government Grants (33, 878, 973) 2010/11 3, 311, 000 1, 902, 000 35977000 37, 879, 000 37187000 BUDGET FORECAST AND RESERVES (CASH) 2017/18 34

MEDIUM TERM EXPENDITURE FRAMEWORK Utilisation of accumulated savings Actual for Budget for 2013/14 2014/15 2015/16 2016/17 2017/18 42 182 000 44 230 000 45 793 000 48 220 000 50 631 000 Other Income 948 000 840 000 620 000 496 000 149 000 Total Income 43 130 000 45 172 000 46 413 034 48 716 027 50 779 808 Total Expenditure 44 716 402 49 941 341 63 264 000 82 595 000 88 879 400 -1 586 402 -4 769 341 -16 850 966 -33 878 973 -37 609 192 25 500 000 20 730 659 3 879 693 0 0 Government Grants Projected Surplus/Deficit for the period (annually) Actual/Projected balance of accumulated reserves (cash) 35

MEDIUM TERM EXPENDITURE FRAMEWORK Key Cost Drivers • Institutional capacity and capabilities commensurate with the mandate. • Research activities to support Board decisions, add value to its advisory role and increase revenue streams. • Public participation and stakeholder engagement. • Minister’s section 22(b) proposals in line with Back to Basics. 36

CONCLUDING REMARKS • The Board needs resources to ensure successful implementation of the strategic plan. • While the 2015/16 shortfall will be funded from accumulated savings (under expenditure), the Board will not have sufficient funds over the MTEF period. 37

Thank you!