BRIEFING ON EXIT STRATEGY OF THE MIIU

1
BRIEFING ON EXIT STRATEGY OF THE MIIU

• Presented to Parliamentary Portfolio Committee
• 16 MARCH 2006

2
Background

• Cabinet Memorandum No. 14 of 1997 created MIIU as
  short-term arrangement to be wound up in five
  years (2003).
• This term was extended by Cabinet Memorandum 4A
  of 2002 for an additional three years, to 31
  March 2006.

3
Confirmation of the Exit

• At a board meeting of 24 June 2005, the directors
  resolved to proceed with exit plan
• The Minister of DPLG in turn instructed MIIU to
  proceed with the wind up in a letter dated
  October 2005

4
The Exit Plan

• Background
• Project Activity
• Management Contract with DBSA
• USAID-funded Contracts
• Other Donor Issues
• Risk Analysis
• dplg
• National Treasury
• Knowledge and Information Management
• Communication Strategy
• Financial Reporting
• Closure Housekeeping
• Succession Arrangements
• Action Plan

5
Exit from Project Activity

• At the beginning of the financial year 2005/6,
  the pipeline of active MSP projects had 84 active
  projects.
• In preparation for closure this pipeline has been
  down-sized to a current 21 projects

6
Exit from the Management Contract with DBSA

• Over 8 years the DBSA has provided MIIU with
• Treasury and Accounting function
• Employment contracts HR services
• Office rental
• Administrative and IT services
• This service is to be terminated with effect from
  31 March 2006

7
Exit from USAID-funded Contracts

• The United States Agency for International
  Development (USAID) has provided the following
• Expatriate staff contracts termination due on
  21 April 2006
• Assets in the form of printers, photocopiers,
  digital camera, etc to be ceded to DPLG by 31
  March 2006
• Commitment Agreement for DCA implementation to
  be terminated by 31 March 2006, and the function
  to be transferred by USAID to a new implementing
  agent

8
Exit from other Donor Relationships

• Department for International Development (DFID)
  Commitment Agreement all obligations to be
  concluded by 31 March 2006
• Mega-Tech Funding technical support to stop by
  31 March 2006
• Cities Alliance (World Bank) the final transfer
  of ad-hoc grant funding has been received by MIIU

9
Role of Executive Authority Department of
Provincial and Local Government

• MIIU is a PFMA Schedule 3A public entity (of
  dplg). The annual transfer of the MIIU grant from
  National Treasury has been via the vote of the
  dplg. There are no further allocations in the
  MTEF cycle beginning in financial year 2006/7.
• Responsibilities of dplg in winding up MIIU
• de-list MIIU as a public entity
• disengage the Board of directors
• disengage company members
• take cession of assets, liabilities,
  accountability and institutional memory of MIIU
  as from 1 April 2006
• De-registration of the company from the Registrar
  of Companies

10
Knowledge and Information Management

• MIIU has published a book A Journey of
  Partnership, that chronicles the history of the
  entity and illustrates some flagship projects.
  The book was launched on 23 February 2006, and is
  to be distributed en mass around 20 March 2006.
• As a supplement to the book, a reference CD pack
  archiving best-practice tools will become
  available on 20 March 2006. This CD will be
  distributed to all 284 municipalities, as well as
  to DPLG for further disribution.
• Other information for transfer to DPLG
• Projects on the pipeline
• Archived project deliverables
• General Institutional memory

11
Communication Strategy

• Public pronouncement by dplg as executive
  authority has not happened
• Communication from MIIU has been at project level
  to
• municipalities
• engaged consultants
• PADCO, USAID, DFID
• Website content to be taken up into a link to
  DPLG website

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Caretaker Arrangement 1 April 2006- 31 August
2006

• The project management by MIIU will terminate on
  31 March 2006, but projects still requiring a few
  more months to conclude completely will be
  transferred to a caretaker arrangement until 31
  August 2006.
• Caretaker arrangement will also accommodate final
  PFMA obligations of final audit, annual
  reporting, transfer of surplus to National
  Treasury, etc.
• So far we have proposed the caretaker arrangement
  to be outsourced to a DBSA agency, for a payable
  fee. The DPLG is still in discussions around what
  the final arrangement should be.

13
Financial Report as at 31 March 2006

• Total unspent income R8.27m
• Outstanding operational and capital expenditure
  R7.15m
• Operational budget R0.90m
• Capital expenditure R6.26m
• Anticipated surplus R1.12m

14
Acknowledgements

• The Board of Directors for their unremunerated
  services to guide MIIU strategy and ensure good
  corporate governance
• DPLG for the mandate and ownership of MIIU
• DBSA for the accounting/treasury function and
  logistical support
• National Treasury for its commitment to the
  advancement of PPPs, and for its key role in
  securing continuity of the MIIU function for the
  benefit of local government
• Local consultants for serving municipalities on
  behalf of MIIU
• The USAID and DFID for vital donor support
• The staff of MIIU for excellent ongoing
  performance
• Thanks to all who have shared our success