09 OCTOBER 2018 EFFECTIVE POLITICAL OVERSIGHT - PowerPoint Presentation

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09 OCTOBER 2018EFFECTIVE POLITICAL OVERSIGHT ROLE ON FINANCIAL MANAGEMENT

CIGFARO ANNUAL CONFERENCE Slide2

PRESENTATION OUTLINE 2Slide3

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INTRODUCTION

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INTRODUCTION Municipalities are over burden by

increasing

legislations,

Political oversight should not only be on service delivery; but oversee that everything happen within the parameters of the law.

The

council is entrusted to make strategic governance decisions on behalf of communities and those decisions can even affect society as a whole

if taken without

an

effective oversight from Council and its role players.

Councillor requires a level of

expertise to be able to play their oversight; hence SALGA has various capacity building to assist councillor play their role.Slide5

INTRODUCTION Oversight Committees: Council; Finance Portfolio Committee , MPAC and Audit Committee

Monitoring

of performance, policy implementation, outputs and outcomes on a continuous basis

Making

recommendations to address deficiencies

Legislatively defined responsibilities in terms of annual reports, strategic plans and

budgets

Acting as enablers of good governance to ensure that financial and administrative objectives are attained

Municipal administration is governed by legislation, norms and standards which they must champion to ensure organizational compliance.Slide6

FINANCIAL GOVERNANCE:OVERVIEWSlide7

FINANCIAL GOVERNANCE:OVERVIEWSlide8

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ROLE PLAYERS IN A MUNICIPALITY

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ROLE PLAYERS IN A MUNICIPALITY: COMBINED ASSURANCE

Section

42 and 43

of the Local Government: Municipal Structures Act No. 117 of 1998 (the Structures Act) provides for the establishment and composition of executive committees.

Section 79

of the Structures Act provides for the establishment of other committees of municipal councils e.g.

MPAC

, Section

80 of the Structures Act provides for the establishment of committees to assist executive committee- e.g. Committees to assist the Executive Committee

The Finance Portfolio CommitteeSlide10

ROLE PLAYERS IN A MUNICIPALITYThe Finance Portfolio Committee:

Monitor

and ensure that the required financial reporting

as per legislation are submitted to relevant structures

Monitor

proper compilation and submission of financial statements of Council and its

entities

for internal and external auditing purposes

Take relevant steps and devises whatever measures as may be deemed necessary to ensure

that the municipality is financially sustainable to delivery the required services Monitor

the development, implementation and review of the Municipality’s Supply Chain Management Policy, Slide11

CONSEQUENCES MANAGEMENT General Financial Management Functions - MFMA – s62(1)(d)The Accounting officer is supposed to take all reasonable steps to ensure that unauthorised, irregular or fruitless and wasteful expenditure and other losses are prevented;

In case this happens:

effective

and accountable leadership in municipalities, and consequences for failure:

Minimum

standards set for both councillors and senior managers and consequences for

non-compliance

and the lack thereofBoth the effectiveness of the council and its structures in terms of oversight and the operational efficacy of the council should be consideredFailures by the municipality, its political leadership as well as administrative leadership should result in direct consequences to ensure standards are metSlide12

CONSEQUENCES MANAGEMENT The purpose of the consequences and accountability framework is not only to highlight the consequences of the failure of political and administrative leadership in municipalities, but to propose measures to strengthen governance and accountability in municipalities, with clear consequences for non-performance.Slide13

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WAY FORWARD

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Media ReportsCity budget cuts millions Municipality X has adjusted its 2018/19 budget to reduce its operating expenditure by R103 million following recommendations by the National Treasury. In a report that came before council,

the budget

manager said

during the first two months of the financial year, which began in July, the municipality experienced a drop in the revenue collection rate. The

newspaper

previously reported that

the municipality needed revenue of at least R400 million monthly but it had been collecting around R330 million, forcing the municipality to dig into its reserves to cover some of the expenses

.Continuous Monitoring by Council and its Committees in imperative. Re-prioritization where necessary Focus on revenue collection Slide15

Media Reports: cont.City gets advice to trim budgetThe City is spending millions of Rands more than it makes each month and has been forced to dip into its depleting reserve funds. This was revealed by the acting City manager

who

recently told the financial services portfolio committee that while the municipality was not yet bankrupt their spending habits needed to change

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Turnaround strategies

Interim Finance Recovery Committee Slide16

WAY FORWARD Development of adequate Terms of Reference for different Council committeesContinuous Capacity Building Programs Key performance indicators- Ratios for Cash Coverage etc. Differentiation between IFC and FPC and their TOR’s

Council must be deliberate when dealing with the issues of Revenue and Expenditure management

Managing the expenditure incurred in revenue collection effort

No appointment

of Service Providers

without

proper

SLA’s; e.g. debt collectors that collect nothing but claiming monthly from the Municipalities. Slide17

Thank you

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