MUNICIPAL SYSTEM IMPROVEMENT GRANT (MSIG) MSIG PERFORMANCE PRESENTATION TO SELECT COMMITTEE OF FINANCE (July 2006

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MUNICIPAL SYSTEM IMPROVEMENT GRANT (MSIG) MSIG
PERFORMANCEPRESENTATION TO SELECT COMMITTEE OF
FINANCE(July 2006 Jan 2007) 26 February
2007
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Overview of Presentation

1. Purpose of presentation
2. Background
3. 2006/07 MSIG Framework Outputs
4. Financial/Quantitative Performance (Jul 06 Jan
   07)
5. Reason for Variance
6. Overall progress
7. Quarterly Review Assessment
8. Corrective measures
9. Ongoing Response strategy to challenges
10. Conclusion

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Purpose

• To report to Select Committee on Finance
  regarding the performance of the Municipal
  Systems Improvement Grant (MSIG) during the
  period July 06 to Jan 2007

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Background

• Allocations made to Districts, Local and Metro
  municipalities
• Allocation for 2006/07 is R 200 million and funds
  were transferred to receiving municipalities
• MSIG allocations from 2006/07 focused mainly to
  Project Consolidate municipalities
• Total coverage of receiving municipalities
  increased from 198 to 211 municipalities
• All 211 municipalities submitted activity plans
  for their allocated amounts

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2006/07 MSIG Framework outputs

• 1. Local Economic Development and Spatial
  Development
• - The development of Spatial Development
  Frameworks, LED strategies,
• procedures and policies
• 2. Financial Viability
• - Support the pilot Project Consolidate
  initiative to develop holistic customer
• care (billing) systems and specific
  revenue enhancement initiatives.
• - Annual Financial Statements support -
  municipalities that have failed to do
• so over the past two years.
• 3. Institutional Transformation and development
• - Support to PIMS Centers.
• - Implementation of Section 78 of MSA - division
  of powers and functions
• - Implementation of Performance Management
  Systems
• - Review of IDPs and alignment with Budgets and
  Provincial Growth
• Development Strategies
• - Skills development
• 4. Good Governance

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Quantitative Performance as at Jan 2007
Prov No of munics Allocated (millions) Transferred 06/07 (millions) Actual Exp (millions) Exp in
E.C 35 28,244 28,244 6,526 23.1
FS 18 17,172 17,172 5,741 33.4
GT 8 9,034 9,034 5,411 59.9
KZN 45 39,886 39,886 11,377 28.5
Limp 22 22,148 22,148 9,584 43.3
MP 21 23,742 23,742 12,960 54.6
NC 27 20,910 20,910 5,771 27.6
NW 19 21,542 21,542 4,644 21.6
WC 16 17,322 17,322 6,242 36
Total 211 200 000 200 000 68,256 34.1
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Reasons for variance

• Difference in the timing of the projects
  capacity building projects allocated different
  implementation timeframes within the financial
  year across all municipalities ie some projects
  to be executed between Feb 2007 and June 2007
• Some projects are continuing over from 2005/06
  and payments made from that financial year
  allocation delays the starting of 2006/07
  projects implementation/expenditure

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Overall Progress LED Spatial Dev

• GIS system completed eg. Knysna LM

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Overall Progress Financial Viability

• Municipalities are implementing the first phase
  of the Municipal Property Rates Act appointing
  valuers, development of rates policies, data
  cleansing and land audit
• Conversion to GRAP eg Moqhaka, Emakhazeni,
  Thabazimbi etc
• Implementation of the billing systems ie Nelson
  Mandela Metro, Greater Kokstad
• Improvement of indigent registers to cover the
  rural areas eg. Richmond LM
• Compiled financial management policies such as
  cash and investment policies, tariff etc
  Thulamela, KSD, Emalahleni, Merafong, Matjhabeng,
  etc
• Appointed service providers and financial
  technicians to complete and review the Annual
  Financial Statement eg. Nkandla, Cederberg

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Overall Progress Institutional Transformation
Development

• Some municipalities completed the IDP reviews for
  the next five years eg. Overberg District
  municipalities
• Municipalities using the funds to develop
  anti-corruption strategies
• Supporting the implementation of PIMS centres
  workplans in all the Districts.

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Overall Progress Good Governance

• Training of ward committees all the
  municipalities in all provinces

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Quarterly Review Assessments

• There is overall capacity to spend the allocation
  but municipalities indicate the lack of capacity
  to report
• Interoperability of units within the municipality
  remains a challenge with regards the MSIG
  projects implementation and accountability
• Some planned projects linked to other funding
  sources thus resulting in duplication and
  non-expenditure of MSIG allocation

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Corrective measures

• Letters of non-compliance continually sent to all
  non reporting municipalities
• Opened opportunity for municipalities to revise
  their approved activity plans
• Standardised MSIG as an item of the LG CFO forums
  to communicate and encourage reporting
  presentation on the DoRA and MFMA requirements
• Sharing of information with provinces and
  districts MSIG Activity plans and reports
• Promotion of shared services approach ie Audit
  Committees, Property valuation
• Using of Service Delivery Facilitators (SDFs) to
  improve implementation of MSIG projects and
  reporting

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Ongoing Response strategy to challenges

• Redesign the reporting regime on the grant
• Monthly Expenditure reports not to serve only the
  purpose of NT reporting but designed to capture
  progress on projects identified in the activity
  plans
• Introduce productive and participative mechanisms
  and processes
• Mainstream Provincial MSIG Activity Plans
  workshops facilitated by LG Depts
• Re-introduce Quarterly Review Workshops
  facilitated by LG Depts and the dplg output
  managers
• Strict application of the DORA in terms of
  withholding of allocations in case of material
  non-compliance ie not reporting on the progress
  and expenditure

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Conclusion

• Quarterly review workshops are instrumental to
  improving progress and interaction amongst dplg,
  province and municipalities
• The MSIG performance is satisfactory and
  improving on a monthly basis.

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  THANK YOU