INSTITUTIONAL DEVELOPMENT & TRANSFORMATION
KPA 4 GOOD GOVERNANCE AND PUBLIC PARTICIPATION
1.5.1 IDP Representative Forum
The IDP representative forum will be chaired by the Mayor and will be composed of representatives from the following institutions or interest groups:
Secretariat of IDP steering committee
Exco members
Ward Committees
Traditional leaders
Chamber of businesses
Youth groups
Rate payers
Agricultural Union
Members of women associations
HIV/Aids council
NGO’s and CBOs
Government Departments
IDP Steering Committee
Ward committee members
Community development workers Public participation
In order to ensure effective public participation the following means will be utilized.
Use of IDP Representative Forum to discuss and agree on strategic issues and priorities
Use of ward committees to ensure that community priorities are adequately reflected in the IDP.
Provision for public comments on the draft IDP Review report
Newspaper advertisements to inform communities of the process
The following table summarized the mechanisms and platforms to be used in facilitating contributions by public and community stakeholders throughout the lifecycle of this IDP project.
PHASE PARTICIPATION MECHANISM & PLANNING EVENTS
Analysis Use of workshops to engage and debate among stakeholders
Use of media to communicate IDP news
Use of mayoral Imbizos to gather community needs Projects Use of broad consultative workshops
One-on sessions with sector departments Approval Use of media to invite public comments
Use of mayoral Imbizos to publicize adopted IDP and Budget
Figure 13: Community participation strategy a) Appropriate Language Usage
The most appropriate language to be used will be local language isiXhosa. In areas where people are not using the local language, interpreters will play a part in this process. As most of the people are illiterate, mass meetings and radio are the most effective way of gathering and disseminating information. Facilitators of meetings have to ensure that they use simple language in explaining concepts so that people can understand the process and become empowered to participate in the IDP process.
The task of the representative forum shall be to:
Represent the interest of various constituencies in the IDP planning process
Provide an organizational platform and mechanism for discussion, negotiation and decision making between stakeholders
Provide a communication mechanism for the exchange of ideas and opinions among the various stakeholder interest groups
Participate in the setting up of key performance indicators including the monitoring thereof in line with the performance Management Manual of the Local Municipality
Monitor the performance of the planning and implementation process COMMUNITY AND PUBLIC PARTICIPATION
WARD COMMITTEE SYSTEMS
The municipality has 26 Ward Committees with 260 Ward Committee Members functional and participates actively in the Integrated Development Planning processes.
Ward Councillors Forum has been established as a network to share information, resolve common challenges, serves as performance monitoring and report back platform.
Since 2007 Council is making the following contribution towards supporting and improving performance of ward committees.
• Bought and allocated cell phones to all Ward Committee Members
• R 800 stipend paid monthly to 26 Ward Administrators
• R 300 stipend paid monthly to 260 ward committee members
• The municipality is further responsible for Ward Committee transport cost
• Public Participation Officer is responsible for coordination of Ward Committees and a budget of R200 000 was allocated in 2009/2010 financial year
• The municipality is further assisting Ward Committees with stationary requirements
• 100 Ward Committee Members trained
• Training on Computer Literacy
COMMUNITY DEVELOPMENT WORKERS MUNICIPAL WEBSITE
The municipal website is functional but needs frequent update and maintenance. It is a critical tool for marketing in informing communities about the developments in the Municipality. An amount of R50, 000 has been provided for development and maintainance of the municipal website as required by Section 21B of the Local Government: Municipal Systems Act.
INTERVENTIONS
Nyandeni municipal leadership has committed to promoting sound and good governance culture within the organisation. The main focus areas identified for good governance interventions in 2009/10 include:
• Training of ward committees to improve their effectiveness in advancing goals of public participation
• Provision of dedicated administrative support to CDWs and councillors to aid their role as link between council and communities
• Establishment of sound mechanisms and systems to discourage corruption and ensure functional internal audit
• Continuous engagement with sector departments to improve intergovernmental relations and especially their participation in the implementation of this IDP review 2010/2011
• Mobilization and coordination of existing resource capacity to enhance our scale of service delivery and economic growth through such initiatives as establishment of PPPs and participation in district wide initiatives including the realisation of commitments made at the recent Economic Growth Summit held by ORTDM and the recent Investment Conference
SUPPORT TO TRADITIONAL LEADERS
The Nyandeni Local Municipality recognises the significance of involving the Traditional leadership as a stakeholder in the affairs of the Municipality and provide necessary support .To achieve this objective Council has set aside an amount of R474, 552.00 towards supporting Traditional Institutions
SUPPORT TO SPECIAL PROGRAMMES
The Special Programmes Unit is located in the Office of the Mayor and is currenctly has a compliment of 3 staff members and is headed by Senior Manager at the level of Section 57 Manager. To support the operations of the Unit, Councill has set aside an amount of R430, 000. 00
Special Programmes includes HIV ands Aids, Children, Youth, Women, Physically challenged and Military Veterans Associations.
Key programmes includes
9 Annual Mayoral Tournament 9 Annual Youth Month Programmes 9 Observing of National calendar days
9 Support to HIV and Aids related programmes
MUNICIPAL AUDIT
The Accounting officer is responsible for preparation and fair presentation of the financial statements to the Auditor General in a manner required by the Municipal Finance Management Act, 2003 (Act NO. 56 0f 2003)
In the year ending 30 June 2009 the municipality has received a Qualified Opinion with one matter of emphase.
AUDIT COMMITTEE
The Nyandeni Local Municipality’s Audit Committee is comprised of the following members
9 Thembisa Kakaza
9 PDB Pretorious Dondashe 9 Vuyo Lwethu Tshangane
INSTITUTIONAL ARRANGEMENT FOR INTERNAL AUDIT UNIT
The municipality has an Internal Audit Unit comprising of four filled posts 9 Senior Manager Internal Audit
9 Manager Internal Audit 9 Internal Auditor
9 Secretary Key Programmes
9 Development of the internal audit strategic 9 Preparation of the annual audit plan
9 Quarterly reports to the audit committee detailing performance against the annual internal audit plan
9 Facilitate the identification, analysis adn rating of risk by management Audit Opinion
For the year ending 30 June 2009 the municipality has received Qualified
Opinion on the basis of value added tax and in the previous year ending 30 June 2008 a qualified opinion was received on the basis of fixed assets register and vat. This illustrates an improvement as far as financial management matters are concerned.
MANAGEMENT RESPONSES ON THE REPORT OF THE AUDITOR GENERAL TO THE COUNCIL OF NYANDENI LOCAL MUNICIPALITY AND THE EASTERN CAPE
PROVINCIAL LEGISLATURE ON THE FINANCIAL STATEMENTS AND PERFORMANCE INFORMATION OF NLM FOR THE YEAR ENDED 30 JUNE 2009.
Issues Raised By AG Plan of action Time frame Person responsible Value added tax (VAT)
1. The VAT control account amounting to R1.3 million (2007-08: R365 242) that is included in debtors disclosed in the balance sheet and note 9 to the financial statements is overstated. The net VAT claimed from the South African Revenue Service according to the VAT returns submitted exceeded the net VAT recorded in the general
Reconciliation on the General Ledger and VAT 201 forms to SARS will be done accordingly on a regular basis.
Will verify the full population of expenditure for the past 2 years on what was vat able or not then adjust on Financial Management
25 June
2010 CFO
Issues Raised By AG Plan of action Time frame Person responsible ledger by R2.2 million
(2007-08: R8.7 million). This excess was not supported by adequate supporting documentation and was not adequately
explained. Furthermore, input VAT claimed from the South African Revenue Service has been overstated by
R676 859 due to the use of an incorrect formula by the municipality.
System for correction
Corresponding figures
2. The audit report on the financial statements for the year ended 30 June 2008 contained a qualified opinion as a result of material misstatements in the prior year with respect to fixed assets, provisions and creditors. Management has not corrected the misstatements identified and therefore the corresponding figures are still misstated.
Those misstatement will be addressed on the current year’s financial statement when converting to GRAP
30 June
2010 CFO
Issues Raised By AG Plan of action Time frame Person responsible Qualified opinion
3. In my opinion, except for the effects of the matters described in the Basis for
qualified opinion paragraphs, the financial
statements of the
Nyandeni Local Municipality have been
prepared, in all material
N/A
Issues Raised By AG Plan of action Time frame Person responsible respects, in accordance
with the basis of accounting as set out in accounting policy note 1 and in the manner required by the MFMA.
Highlighting critically important matters presented or disclosed in the financial statements Unauthorised Expenditure 4. Unauthorised expenditure
of R1 379 531 is disclosed in note 27 to the financial
statements. The unauthorised expenditure
was incurred as a result of
inadequate budget control.
Strict budget control and monitoring will be done on a regular basis(Monthly) The council has
rectified hence there is council resolution.
Monthly HoD’s
Fruitless and wasteful expenditure
5. Fruitless and wasteful expenditure of R132 227 is disclosed in note 28 to the financial statements. This expenditure was incurred in one instance only, due to the cancellation of a reservation.
The institution condoned the expenditure hence there is a council resolution.
Done All HoD’s
Irregular Expenditure
6. Irregular expenditure of R663 568 is disclosed in note 29 to the financial statements. This resulted from management’s failure to ensure compliance with the requirements of relevant legislation and regulations
The council has taken action on the affected managers and the issue is still with the legal
representatives
Done Acting MM
Issues Raised By AG Plan of action Time frame Person responsible in the approval of
expenditure transactions.
Member of council arrear rates and service charges
7. The rates and service charges of members of council who have not paid their accounts for more than three months are disclosed in note 15 to the financial statements.
Paragraph 12A of the code of conduct for members of council issued in terms of section 54 of the Municipal Systems Act, 2000 (Act 32 of 2000) prohibits members of council from being in arrear with their rates and service charge accounts for more than three months.
The arrears will be fully settled by March including officials
March 2010
MM/CSM
Municipal Finance Management Act
8. The cost of the fixed assets amounting to R201.9 million as per note 4 was supported by a fixed assets register, however a proper fixed assets register in terms of section 63 (2) (c) of the MFMA was not maintained as fixed assets were not marked with unique identification numbers that are appropriately cross- referenced to the asset register. As a result, assets selected from the asset register could not be physically verified. As the fixed assets disclosed in the financial statements is stated at cost less loans
Application of directive 4 from Accounting
Service Board(ASB) will be applied when
implementing GRAP/GAMAP
June 2010 CFO
Issues Raised By AG Plan of action Time frame Person responsible redeemed and other
capital receipts, the amount in the financial statements is not
misstated.
9. The municipality did not make all payments to creditors within 30 days of receipt of the invoice, as required by Section 65(2) (e) of the MFMA.
Late payment maybe as a result of non completion of services by service provider/
late submission of tax invoice.
Creditors are paid twice a week to address this situation
Monthly HoD’s
Municipal Systems Act, 2000 (Act no. 32 of 2000) (MSA) 10. No performance contracts
for the municipal manager and those
managers reporting to him were in place during the year under review. This is a material contravention of section 57 of the MSA.
11. The members of council have not disclosed their direct and indirect business interests as required by section 54 of the MSA read with
paragraph 5 (a) and (b) of schedule 1 code of conduct for councillors of the same act.
All managers have been given
profoma contracts and three have signed with the Previous MM.
A PMS workshop is to be organized to improve on quality
A meeting has been held with the Speaker of Council to request him to assist. Find
attached letter
19 March 2010
April 2010
April 2010
Municipal Manager/CPS Manager
CPS Manager
Strategic Manager/CPS Manager
Non-compliance with applicable legislation: Municipal Finance Management Act 12. The cost of the fixed assets
amounting to R201.9 million as per note 4 was supported by a fixed assets register, however a proper fixed assets register in terms of section 63 (2)
Application of directive 4 from
Accounting Service Board(ASB) will be applied when
June 2010 CFO
Issues Raised By AG Plan of action Time frame Person responsible (c) of the MFMA was not
maintained as fixed assets were not marked with unique identification numbers that are appropriately cross- referenced to the asset register. As a result, assets selected from the asset register could not be physically verified. As the fixed assets disclosed in the financial statements is stated at cost less loans redeemed and other capital receipts, the amount in the financial statements is not
misstated.
13. The municipality did not make all payments to creditors within 30 days of receipt of the invoice, as required by Section 65(2) (e) of the MFMA.
implementing GRAP/GAMAP
Municipal System’s Act 14. The capacity of the
finance department is inadequate to effectively support, manage and perform the required financial functions as reliance is placed on specific individuals in the municipality. The impact of this was that material
adjustments were effected to the financial
statements submitted for audit purposes.
The Municipality does not have sufficient resources to employ more staff as we are sitting at 49.7% on the personnel budget. This will be addressed as the revenue increases
On
going MM
15. The audit committee did not fulfil its responsibilities as the audit committee met once in the year and did not establish
A membership appointment has been advertised in the Media so as to fill the gap for non quaration of
25 June
2010 MM
Issues Raised By AG Plan of action Time frame Person responsible adequate measures to
discharge its mandate. members.
A schedule of meetings has been developed.
Environment Conservation Act, 1989 (Act no. 73 of 1989) 16. The Environment
Conservation Act, 1989 (Act No. 73 of 1989), Section 20(1)(a) states that: "no person shall establish, provide or operate any disposal site without a permit issued by the Minister of Water Affairs and that the Minister may issue a permit subject to such conditions as he may deem fit."
A permit was not issued for the
municipality’s landfill site located in Moyeni Administrative Area in Libode.
The landfill site
provision will be made and the new
application will also be made hence the original application has been declined by Environmental Affairs
June 2011
Technical Services Manager
17. The internal audit function was not effective due to the following:
• The head of internal audit acted as a municipal manager for a part of the year.
• The head of internal audit did not appear to be independent and reported directly to the acting
municipal manager.
• The head of internal audit has seized to act as the institutions Accounting Officer as from Sept 2008
• The reporting channels as per Internal Audit Charter has highlighted clear reporting structure
• Risk Assessments have been
performed for the 2009/2010 period, three year
strategic plan has
30 June
2010 Internal Audit Manager
Environment Conservation Act, 1989 (Act no. 73 of 1989)
• The internal audit function did not perform risk assessments and advise
management on performance management and compliance with laws and
regulations nor prepare an annual internal audit plan to guide its
operations.
been developed and Internal Audit assignments as per audit plan are underway.
Audit findings
(performance information) Non-compliance with regulatory requirements Existence and functioning of a performance audit committee
18. The Nyandeni Local Municipality did not appoint and budget for a performance audit committee, nor was another audit committee utilised as the performance audit committee, as
required by regulation 14(2) of the Municipal Planning and
Performance Management Regulations, 2001.
Appointment advertised for additional audit committee member had strong emphasis that the incumbent to be appointed should have a performance audit related
background so as the audit committee can perform the duties of performance.
30 June 2010
Municipal Manager
Internal auditing of performance
measurements
19. The internal auditors of Nyandeni Local Municipality did not audit the results of performance
measurement as part of its internal audit processes, as required in terms of section 45 of the MSA.
As soon as the PMS is in place and performance contracts are in place Internal Audit will initiate a performance audit.
The internal audit plan for the period 2009/2010 includes performance audit assignments per quarter
30 July
2010 MM / Internal Audit Manager
Lack of adoption or implementation of a performance management system 20. The Nyandeni Local
Municipality did not implement a
framework that describes and represents how the municipality’s performance
management system works with respects to planning, monitoring of and reporting on performance against targets, including determining the roles of the different role players, as required in terms of regulations 7 and 8 of the Municipal Planning and
Performance Management Regulations, 2001
PMS was adopted and PMS
workshop is to be organized to improve on quality
April
2010 Municipal Manager/CPS Manager
Inconsistently reported performance information 21. The Nyandeni Local
Municipality did not report on all the targets and priorities
SDBIP’s for the year 2009/10 were developed with clear set targets and is in line with municipal IDP. All
Quarterly MM/HOD
as per the approved integrated
development plan.
the departmental heads are also required to report according to SDBIP’s on quarterly basis.
Internal Audit Unit will review it periodically.
Reported performance information not relevant 22. The targets with
regard to all of the objectives were not:
• specific in clearly identifying the nature and the required level of performance
• measurable in
identifying the required
performance
• time bound in specifying the time period or deadline for delivery.
In 2009/10 Targets were identified with clear and specific objectives and deadlines for delivery.
Annual MM/HOD
Reported performance information not reliable
Lack of appropriate information systems generating
performance information
23. Sufficient appropriate audit evidence with regard to the reported
performance
information of the objectives could not be obtained, as the information system used for generating performance
information was not appropriate to ensure
SDBIP’s for the year 2009/10 were developed with clear set targets and is in line with municipal IDP. All the departmental heads are also required to report according to SDBIP’s on quarterly basis.
Internal Audit Unit will review it periodically.
Quarterly MM/HOD’s
that the reported information was accurate and that all the information was included.
Source information not accurate and complete 24. The information to
support the actual reported
performance was not
accurate and complete.
HOD’s will maintain Portfolio of
Evidence to support the achieved targets
Quarterly MM/HOD’s
FINANCIAL VIABILITY
Overview of financial viability & strategies
The municipality is committed to developing and maintaining sound financial management systems and processes. The municipality also acknowledge that its major challenge is its overdependence on statutory grants which are always insufficient to cater for the growing development challenges faced by the institution.
In order to improve service delivery, expand services to even the underserved rural areas, the municipality is looking at various strategies including entering into partnerships, service level agreements and raising loans which will assist in mobilizing the hugely needed financial resources.
External Funding
SOURCE 2010/2011 2011/2012 2012/2013
MIG 27 247 000 32 771 000 39 846 000
MSIG 750 000 790 000 800 000
Equitable share 88 682 000 99 862 000 109 800 000
Own revenue
Financial Management Grant
1 200 000 1 450 000 1 500 000