BUDGET REVIEW: MUNICIPAL DEMARCATION BOARD SELECT COMMITTEE ON LOCAL GOVERNMENT AND ADMINISTRATION

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BUDGET REVIEW MUNICIPAL DEMARCATION
BOARDSELECT COMMITTEE ON LOCAL GOVERNMENT AND
ADMINISTRATION

• Vuyo Mlokoti Chairperson
• Morongoa Letsoalo Deputy Chairperson
• Hillary Monare - CEO
• Richard Somanje - CFO
• 08 May 2007

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REPRESENTATION AND DOCUMENTS

• From the Board
• Dr Vuyo Mlokoti Chairperson MDB
• Ms Morongoa Letsoalo Deputy Chairperson MDB
• Mr Hillary Monare Chief Executive MDB
• Mr Richard Somanje Chief Financial Officer
• Document Tabled
• Draft Annual Report 2006 2007
• Strategic Plan 2007 - 2011

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PAST BRIEFINGS IN 2006

• Two Briefings 14 March 17 October 2006
• At both briefings, the following issues were
  covered
• We confirmed our written explanations to the
  Select and Portfolio Committees of concerns and
  reservations raised previously by members of this
  and the Portfolio Committee with respect to
• Expenditure on Professional Fees, Office
  Expenses, Staff Remuneration, Board Members
  Remuneration, Travel and Accomodation,
  Consultants
• There had also been concerns raised about the
  Board possibly spending its money on things that
  are irrelevant in as far as its core mandate is
  concerned, and thus the financial difficulties it
  faced, which we explained.
• We also reported to the Select Committee on the
  Boards mandate, and how we had performed in
  pusuit of that mandate in 2005/06.
• There was also a range of administrative and
  other financial issues that we addressed you on.
  In this regard, we submitted a report to the
  Portfolio Committee in March 2006 to substantiate
  under funding problems.
• Furthermore, we presented to you our medium term
  strategy for the period 2006/07 to 2009/10.

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OVERVIEW TODAYS PRESENTATION

• Overview on mandates and performance (Hillary
  Monare)
• In 2006/07 a number of Strategic Themes were
  identified around the boards mandate, including
• re-determination of municipal and ward
  boundaries,
• declaration and withdrawal of DMA declarations
• capacity assessments
• alignment of service delivery boundaries
• relationships with key stakeholders
• good governance and organisational capacity.
• Slides to follow will deal back to back with
  performance in
• 2006/2007, and the way forward 2007/8-2010/11.
• Budget Review (Richard Somanje)
• The Budget review will cover, amongst others,
  budget trends, income and expenditure, assets and
  other related financial matters.

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Mandate Determine and re-determine municipal
boundaries, and delimit wards for local elections

• 2006/2007
• Changes to municipal boundaries on hold from 20
  Feb 2004 to 2006 for ward delimitation and local
  elections on 1 March 2006
• March 2006 process resumed - 119 outstanding
  cases.
• Some finalised/ some in process some Provincial
  boundaries some affects boundaries of
  traditional areas some in section 26, 21 or
  21(5) process.
• A total of 80 DEMS (61 plus 19 cross boundary
  DEMS) as well as any new DEMS are to be finalised
  by mid 2008.

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Mandate Determine and re-determine municipal
boundaries, and delimit wards for local elections
(cont)

• 2007/8 2010/11
• Focus to shift to planning for the next national,
  provincial and local elections
• Consultation with other stakeholders to commence
  and processes to start to ensure successful
  elections
• Draft work plan to follow is based on the
  assumption that legislation will not change, and
  that National and provincial elections will be
  held in April 2009 and local elections will be
  held in March 2011
• Legislation not a mandate of Board but we can
  make contributions eg the criteria for ward
  delimitation or any other legislation affecting
  the Board etc

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Mandate Determine and re-determine municipal
boundaries, and delimit wards for local elections
(cont)
Key performance area Finalise as many changes as possible to outer boundaries of municipalities by May 2008
Dec 2007 Board approve last sec 26 notices.
Jan 2008 Last section 26 notices published before the local elections in 2011
March 2008 Last section 21 notices published before the local elections
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Mandate Determine and re-determine municipal
boundaries, and delimit wards for local elections
(cont)
Key performance area Hand over of outer boundaries to IEC, and ensure that formula and the number of councillors are gazetted
April 2008 Closing date for sec 21 objections
May 2008 Last section 21(5) notices published before the elections and IEC informed
June 2008 IEC publishes all outstanding sec 23 notices
July 2008 MECs publish all outstanding section 23 notices
Aug 2008 Municipal boundaries provided to IEC
Aug/Sept 2008 IEC align VD boundaries to municipal boundaries
Sept/Oct/Nov 2008? Registration of voters for national and provincial elections
Feb 2009? Certify national common voters roll and gazette it
Feb 2009? Divide national common voters roll into municipal segments
March 2009 Publish formula for the number of councillors (problem area)
March 2009 MECs determine and publish number of councillors for each municipality (problem area)
March 2009 MDB determines the number of wards and the norm for ward delimitation
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Mandate Determine and re-determine municipal
boundaries, and delimit wards for local elections
(cont)
Key performance area Ward delimitation and public consultation
Apr 2009? National and Provincial elections
Apr 2009 Formal consultation between MDB and IEC as required by Structures Act
Apr-Jun 2009 MDB prepares first set of draft ward boundaries
Jul/Aug 2009 Public consultation process commences (circular/media ads)
31 Aug 2009 Closing date for public comments
Sept/Oct 2009 Consider public comments and prepare map set 2 for public hearings
Nov/Dec2009 Maps and notices distributed and logistics finalised for public hearings
Jan/Feb 2010 Public hearings
March 2010 Finalise map set 3 and gazette ward maps in Provincial gazettes for objections
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Mandate Determine and re-determine municipal
boundaries, and delimit wards for local elections
(cont)
Key performance area Consider public objections and publish final ward boundaries
1 April 2010 Closing date for objections
Apr/May 2010 Consider public objections
Jun 2010 Final ward boundaries handed to IEC
Jun/July 2010 Alignment of VD boundaries to ward boundaries
Aug 2010 Gazette final ward boundaries
Aug 2010 Election date gazetted
Aug Nov 2010 Registration of voters
Nov 2010 Feb 2011 Preparations for elections
March 2011? Local elections
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Concerns

• It appears that provinces and municipalities
  still lack interest in demarcation issues
• Towards the end of 2007 time for consultation
  will decrease drastically
• Late/urgent applications may adversely affect
  already tight timeframes
• New legislation (if any) may adversely affect
  timeframes and preparations for the elections
• Previous delays pertaining to formula and number
  of councillors may occur due to national and
  provincial elections.

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Mandate Declare District Management areas (DMAs)
and withdraw declarations

• Legal provisions history
• DMAs are not a fourth category of municipalities
• Structures Act DMA to be established where it is
  not conducive to establish category B
  municipalities.
• Original policy Declare deserts and semi-arid
  areas and State protected and conservation areas
  as DMAs
• Policy review Only national parks/areas of
  international significance
• Declaration of 6 DMAs withdrawn prior to local
  elctions
• Effect of changes to provincial boundaries on
  DMAs eg Kruger Park weight of councillors
  performance of functions
• Legislation does not provide for the declaration
  of DMAs in metropolitan areas. National Parks
  such as the Table Mountain National Park can
  therefore not be declared as a DMA as it falls
  within the area of a metropolitan municipality.
• .

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Mandate Declare District Management areas (DMAs)
and withdraw declarations (cont)

• 2006/07
• To determine the advisability to continue with a
  local government system comprising of 3
  categories AND DMAs
• The system has been cleaned up by removing
  cross-boundary municipalities
• Shouldnt the system also be cleaned up with
  respect to DMAs
• Further review of declarations to be investigated
• DMA Survey re performance of functions by DCs
• 2007/08
• OPTIONS FOR INVESTIGATION
• Retain the status quo. 
• Retain only national parks as DMAs 
• Clean up the local government system and withdraw
  all DMA declarations
• If at all possible project to be finalised before
  changes to outer
• boundaries close meaning that draft doc for
  consultation should be ready
• by mid 2007 for consultation in the second half
  and the legal process early
• 2008.

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Mandate Alignment of service delivery
boundaries, TA Boundaries and assessment of
boundaries

• Cabinet resolution
• 2002 Alignment Survey
• 2006/07
• Alignment Survey June 2006
• Intensive work with Justice and SAPS
• Review of magisterial districts and SAPS
  boundaries as a result of changes to Provincial
  boundaries
• Commenced with 2 projects Creating a credible
  set of TA boundaries/Assessment of boundaries
• 2007/08
• Justice/SAPS project to be completed in Aug 2007
• 2007/08 2010/11
• Assist other departments where necessary with
  alignment
• Ongoing work on 2 projects

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Mandate Capacity Assessments

• Purpose of assessments
• Advise to MEC to ensure equitable and sustainable
  service delivery
• Process
• Data collection, verification, analyses reports
• Outsourced project but staff involved in data
  collection for internal capacity building
• 2006/2007
• 100 return of questionnaires from 46 DCs 231
  Local munics
• 46 DC reports Dec 2006
• 9 Provincial overview reports Feb 2007
• 1 National overview report March 2007
• Recommendation
• Recommend a special meeting with Portfolio
  Committee and Select Committee for a briefing on
  2006/2007 findings on the capacity of district
  and local munics to perform their function.
• Data collection project
• MDB Annual collection in Aug
• Work with Treasury, StatsSA and others on data
  collection from municipalities/standardisation of
  questions and reductions of questionnaires to
  municipalities.

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Relationships with key stakeholders

• 2006/2007
• Key stake holders involved in committee, task
• teams and projects
• Joint Boundary/Powers and Functions Committee
  All provinces, DPLG, IEC, SALGA, DWAF and other
  departments
• TA boundary project DPLG, DLA Provinces
• Alignment project All departments focus on
  SAPS and Justice
• 2007/8 2010/11
• Projects, where necessary to continue, but focus
  will shift to projects related to elections and
  ongoing consultation with key stakeholders
• IEC
• Minister/DPLG
• MECs/Provincial officials
• Municipalities
• SALGA
• Plans are also underway to launch the Board
  National Report on the 2006/07 Municipal Capacity
  Assessments, during the course of May 2007.
• Invitations to the launch will be forthcoming
  soon, and we hereby ask for the Select
  Committees support in this regard.

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MDB Organisational and Governance Issues

• 2006/2007
• General improvement of internal matters such as
• Successfully implemented the following systems-
• Integrated Payroll and HR Management system
• Leave Control system linked to payroll
• Balanced Scorecard Performance Management System
• Human Resources oversight statistics.
• Business Continuation Plan completed
• Various policies drafted or reviews and improved
  by the Board
• Recruitment and Selection carried out for the
  following positions GIS Analyst Senior GIS
  Officer Financial Officer and Head GIS/IT
• However, 34 positions still vacant due to
  funding problems

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MDB Organisational and Governance Issues (Cont)

• 2007/8
• Interventions pertaining to allocation of a more
  reasonable budget,
• Improve compliance with applicable financial laws
  and regulations
• Revise Finance organisational structure
• Implement the Business Continuity Plan to address
  all risks
• Refine and enforce Policies and Procedures
  governing employment matters.
• Refine Performance Management System (Balance
  Scorecard)
• Improve on the training and development of staff
  (skills auditing and monitoring).
• Finalise a suitable and generally acceptable way
  in which the staff remuneration structure ensures
  fair remuneration to staff.

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BUDGET REVIEW

• This part of the presentation deals with historic
  figures and estimates for the future.
• The audited financial statements for 2006/2007
  will be included in the in the final 2006/2007
  Annual Report to be submitted to Parliament later
  this year.

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Financial Management Objectives

• Manage the preparation of annual operational and
  capital budget
• Develops an expenditure forecast on a monthly and
  quarterly basis
• Physical assets strategic plan
• Provides timely and accurate reports for
  strategic decision making
• Manage the preparation of monthly, quarterly and
  annual budget reports
• Manages expenditure in terms of budget and
  funding constraints
• Control expenditure versus the budget

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OVERVIEW EXPENDITURE TRENDS 2001 - 2006
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OVERVIEW BUDGET SUBMITTED VS ACTUAL RECEIPTS
1999-2011
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OVERVIEW1999 2013 BUDGET SUBMITTED vs RECEIVED
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OVERVIEW BUDGET TRENDS 2000 - 2010
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EXPECTED OTHER INCOME
2007/8 2008/9 2009/10 2010/11
Sale of maps 60,500 66,550 73,205 65,880
SA Explorer 5,000 0 0 0
Interest received 99,000 103,950 114,345 102,910
Total 164,500 170,500 187,550 174,190
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CLUSTER BUDGET MTEF
R000 2007/8 2008/9 2009/10 2010/11
Finance 3,648 4,222 4,885 5,553
GIS 3,269 5,558 10,097 6,581
Research 6,651 8,198 21,791 19,295
Admin 3,376 3,880 4,489 5,190
Management 2,163 2,599 3,007 3,418
Members 1,558 1,767 2,053 2,327
Total 20,664 26,224 46,323 42,365
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CLUSTER CHART
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2007/8 CLUSTER CHART
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EXPENDITURE HIGHLIGHTS 2007/8
1010/11(SELECTED ITEMS)
R000 2007/8 2008/9 2009/10 2010/11
Members 1,312 1,508 1,755 2,009
Ward GIS 0 1,000 4,300 500
Cap Ass 4,410 4,836 5,280 6,425
WardNotice 0 0 9,000 5,000
PH Notice 0 0 5,000 5,000
Rent 1,084 1,106 1,226 1,348
Salaries 7,728 9,611 11,467 13,065

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ACQUISITION OF FIXED ASSETS
2007/8 2008/9 2009/10 2010/11
Desktops 87,500
Laptops 131,500 159,500 130,000
Server 100,000
Network upgrade 12,500 12,500
Computer Software 25,000
Printers/fax 39,500 26,500
Total 208,500 87,500 186,000 242,500
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MAINTENANCE OF FIXED ASSETS
2007/8 2008/9 2009/10 2010/11
Hardware maintance 10,000 10,000 10,000 10,000
Total 10,000 10,000 10,000 10,000
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RECEIPTS FOR THE YEAR 2006/07
MTEF Allocation (total allocation 16,827) (R000) 16,827
Donor Funding 2,673
Map Explorer Sales 70
Disposal of Assets 18
Other Income 145
TOTAL INCOME AT OUR DISPOSAL 2006/07 19,733
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ESTIMATED EXPENDITURE FOR THE YEAR 2006/07
(Audit still to be done)
Expenditure Item (R000) Amount Percentage of Total Income
Administrative Expenses 4,063 20.6
Staff Costs 7,627 38.7
Audit Fees 1,012 5.1
Project Expenses 3,995 20.2
Payments from Donor Funding 2,674 13.6
Other operating expenses 496 2.5
Finance Costs 27 0.1
Depreciation and Amortisation 662 3.4
TOTAL EXPENDITURE 20,556 104.2
Surplus (deficit) for the year (823) -4.2

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BREAKDOWN OF EXPENDITURE 2006/2007
ADMINISTRATIVE EXPENSES
Travel and Subsistence 996
Rentals in respect of operating leases Buildings Plant, Machinery and Equipment 921 64
General and Administrative Expenses
Cleaning Services 33
Conferences and Seminars 67
Courier Services 72
Water Electricity 94
ISP and hosting services 220
Postage Services 12
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BREAKDOWN OF EXPENDITURE 2006/2007
General and Administrative Expenses
Internal audit fees 271
Publications, Notices and gazettes 402
Insurance 311
Printing and photocopying 57
Stationery 75
Subscription 70
Telephone expenses, etc 265
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Conclusion

• Taking into consideration our limited staff,
  budget and infrastructure we are satisfied with
  our achievements during the 2006/7 financial
  year.
• However, we are disappointed that no special
  research could be conducted during the past
  financial year due to financial constraints.
• All queries raised by our internal auditors and
  the Auditor-General have been resolved, or are in
  process of being resolved, and we expect a clean
  report for 2006/2007.
• Adequate funding remains a challenge that we have
  not been able to resolve. This not only adversely
  affected our statutory duties but also the
  filling of vacancies, and infrastructure.
• We trust that our detailed Strategic Plan and
  interim annual report will give members some
  insight in the activities of the Municipal
  Demarcation Board.

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Thank you