3.1 Induction Pack I

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INDUCTION PACK 1 NDPG Administration Reporting
2
Understanding why how NDPG is different to
other grants

• Concepts terms ? what do they mean?
• Funding Envelope
• Multi-year budgeting
• Schedule 6 Schedule 7 of NDPG
• Funding components importance of planning
  activities for MPS
• Approval points
• Funding flows
• Financial operational management ? the 5 rules
• Sequencing
• Municipal responsibilities

3
Budget Concepts Funding Envelope
Project Funding Envelopes
CD PDs
NDPG Reference Group
Project 1 ?
Project 2 ?
Project 3 ?
Project 4 ?
Project 5 ?
Project 6 ?
Project 7 ?
Project 8 ?
Project ?









Approved Portfolio Funding Envelope ?
Approved Portfolio Funding Envelope ?
Approved Portfolio Funding Envelope ?
DDG


Approved NDPG Funding Envelope ?

DG
Excludes leverage of other funding
100 projects _at_ R10 bn in 10 years
4
Budget Concepts Multi-Year Budget

• Funding Envelope ? annual gazette amounts!
• MTEF total forecasts vs. one-year detailed
  budgets
• Alignment of financial years ? Treasury 1 April
  Municipality 1 July

Yr 1
Yr 2
Yr
Yr 3
Sch 7
Sch 7
Sch 7
Sch 6
Sch 6
Sch 6
Sch 6
5
Schedules 6 7
Schedule 6 Direct Transfer to Municipality
Schedule 7 In-kind to Consultant
Status Quo, TRS Concept
Business Plan
1 Programme Management Coordination
Programme plans ? MPS
2 Strategic Planning (SQ TRS, concept, etc.)
3 Detailed Design
4 Construction/Implementation Management
5 Construction/Implementation
6 Operating
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Approval Points

• Status Quo, TRS Project Concept
• Project concept in respect of TRS
• In alignment with NDPG
• Interactive process with NDP
• Authority to proceed
• Business Plan
• Plan on how to implement
• Plan on how to utilise capital grant as catalyst
  for TRS
• Capital spending priorities identified
• Rationale for choices made
• NDP to approve
• Then only can release capital

7
Schedules 6 7
No Broad Category Typical Outputs
1 Programme Management Coordination Coordinated managed programme, could also be dedicated capacity for, and in, municipality (e.g. member of staff dedicated to NDPG with short-term contract for programme development management), if needed. NDP would seek to limit exposure council should also contribute.
2 Strategic planning TRS, business case development high-level business planning, feasibilities, detailed investigations, exit plans ME.
3 Detailed design Detailed design work to build capital asset funded by the capital as per Schedule 6 fund.
4 Construction management Outsourced construction/project management for implementation if needed.
5 Construction Capital for construction.
6 Operating funding Kick-start operating funding (BIDs, ops, etc.), if needed.
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Operational Financial Matters

• NDPG ? Hybrid grant
• Definitions of Schedule 6 7
• Importance of MPSs

Item Schedule 6 Schedule 7
For Construction Planning mainly
Transfer Direct transfer In-kind transfer
From National Treasury PDF (PPP) via NDP
To Municipality Service Provider
What For work to be done in next quarter Progress payments
Time 1 week 4 weeks
VAT Excluded Included
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Funding Flows
Contractor
Capital works contract (Sch 6)
Payment claims (Sch 6)
Payments (Sch 6)
Municipality
Service Provider
Contract appointment letter (Sch 7)
Invoices for Sch 7 amounts to municipality
Sch 6 tranches
Funding agreement
Sch 7 Payments
Sch 7 Invoices from municipality
Sch 7 Approved invoices from municipality
NDP Unit
PDF (PPP Unit)
Service Level Agreement
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Financial Management Rules(1) Allocating
reallocating budgets for municipality

• DoRA ? Section 10
• Allocations of Budgets
• MTEF (3-yr) Forecast Yr 1 in detail
• Workings in September/October
• Due for April of next year
• Published in DoRBill in December/January of the
  next year ? MTEF ? NB for muni as these are the
  numbers for municipal overall budget prep
• Also published in Government Gazette (DoRA) in
  April of next year
• Reallocation of Budget
• Adjusts only current year of expenditure ?
  in-year adjustment
• Workings in September
• Due for October
• Published in Government Gazette (DoRA Adjusment
  Gazette) in December
• Government Gazette each time
• Importance of programme plan MPS ? No info ? we
  guess!
• To assist in multi-year projects provide
  certainty of cash-flow

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Financial Management Rules(2) Stopping (3)
Withholding

• (2) Stopping
• Process to take allocation back to Treasury if
  not used
• DoRA ? Section 26
• Once a year ? in March for NT financial year
  ending at end March
• Funding Envelope generally not affected but can
  be if warranted
• Material persistent non-compliance with DoRA
• Non-spending
• If not in alignment with NDPG framework
• (3) Withholding
• Suspension of portion of funds if funds are not
  spent for 3 months in accordance with MPS
• DoRA ? Section 25
• Progress reviewed monthly but withholding
  generally done once a quarter
• Funding Envelope generally not affected ?
  cash-flow management by Treasury
• Gazetted allocation not affected but Adjustment
  Gazette process takes lack of progress on board
  downwards adjustments are possible likely

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Financial Management Rules (4) Roll-Overs (5)
Reporting

• (4) Roll-overs
• Generally not supported
• However, any Schedule 6 transfers made in March
  are accounted for in current financial year of
  Treasury but can still be spent by municipality
  in April-May-June (i.e. before end financial year
  of municipality)
• (5) Reporting
• Monthly reporting requirements in legislation
• MFMA ? Section 71 72
• DoRA ? Section 10
• NDPG grant framework
• Submissions by muni
• Progress reports on internet per award
• One pager
• One per award
• Pre-populated with data by NDP
• 10 minutes to do
• Completion dates ? 1st to 10th every month
• Non-submission ? Treasury can hold back payment
  requests of Schedule 6 7 amounts

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Municipal Responsibility

• Committing to a longer-term township regeneration
  programme
• Implementing the NDPG catalytic component
• Management coordination of entire development
  process
• Striving to improve Quality of Life
• Leveraging in public private sector funds
• Managing processes
• Procurement of consultants their management
• MFMA, SCM, etc. applies
• Ensure Value-For-Money
• Get quality outputs
• PSP Panel role
• Obtaining Council approvals
• Ensuring capacity is in place
• Budgeting cash flow management reporting

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Next Step

• Brief your management structures
• Get your foundations in place
• Sign Funding Agreement Schedules
• If no Council resolution, get one!
• Sort out your delegations
• Sort out capacity even if short-term
• Set up initial development coordination structure
• Political
• Administrative
• Getting ready for 3 year funding commitments for
  forward predictability
• Resources in your pack
• Financial Policy Procedures
• Benchmark Costings (draft)
• Schedule 3 of Funding Agreement MPS
• Guidance Note VAT