SALGA ANNUAL REPORT 2014/15

Transcription

1 SALGA ANNUAL REPORT 2014/15 The SALGA logo above is the organisation s highest visual symbol. It differentiates SALGA from other local government associations around the world. The three golden spheres on the logo represent the three spheres of government, namely: national government, provincial government and local government. SALGA logo comprises four different colours. Green - Fertility and growth Gold - Wisdom Burgundy - Success Cream - Peaceful thoughts Published by SALGA PO Box 2094 Pretoria 0001 South Africa Tel: Fax: RP: 165/2015 ISBN: Title of Publication: SALGA Annual Report 2014/15

2 CONTENTS Part A: General information 3 1. List of abbreviations/acronyms 4 2. Foreword by the Chairperson 6 3. Chief Executive Officer s overview 8 4. Strategic overview SALGA s strategic plan Key policy and strategic frameworks impacting 11 on local government The Medium-Term Strategic Framework (MTSF) The local government turnaround strategy 11 (LGTAS) The millennium development goals (MDGs) The new growth path The national development plan Emerging issues and strategic realignment SALGA membership and stakeholders SALGA members Key stakeholders Vision Mission Values Legislative and other mandates Legislative mandate SALGA mandate Organisational structure 18 Part B: Governance Introduction SALGA governance framework SALGA national executive committee (NEC) SALGA provincial executive leadership Relationship between national and provincial 29 bodies 2.4 SALGA internal oversight structures SALGA management Social responsibility Highlights of performance per SALGA strategic 52 goal Goal 1: Local government delivering equitable 52 and sustainable services Goal 2: Safe and healthy environment and 59 communities Goal 3: Planning and economic development 63 at a local level Goal 4: Effective, responsive and accountable 68 local government for communities Goal 5: Human capital development in local 80 government Goal 6: Financially and organisationally 89 capacitated municipalities Goal 7: Effective and efficient administration 93 Part D: Human resource management Introduction Talent acquisition Individual performance management Labour relations compliance Employee relations Skills development Employee wellness programme Employee recognition awards Occupational health and safety 114 Part E: Annual financial statements Chief Financial Officer s review Report of the Accounting Authority Report of the audit and risk committee report of the performance management and 147 remuneration committee 5. Report of the auditor-general to Parliament on 158 SALGA 6. Accounting Authority s responsibilities and 161 approval 7. Annual financial statements 163 Part C: Performance information Introduction Predetermined objectives Highlights of performance per SALGA mandate Lobby, advocate and represent role Employer role Capacity buidling role Support and advisory role Strategic profiling role Knowledge and informanation-sharing role 50

3 PART A: GENERAL INFORMATION 3

4 1. LIST OF ABBREVIATIONS/ACRONYMS AC Audit Committee EPWP Expanded Public Works Programme APP Annual Performance Plan ER Employee Recognition Ald Alderman ESTA Extension of Security of Land Tenure Act AGSA Auditor-General of South Africa EWP Employee Wellness Programme ASGISA AU BAAM BCEA CD CDP CEO CFO CIP CLGF CLLR CMRA Accelerated and Shared Growth Initiative of South Africa African Union Business-Adopt-A-Municipality Basic Conditions of Employment Act Community Development Councillor Development Programme Chief Executive Officer Chief Finance Officer Councillor Induction Programme Commonwealth Local Government Conference Councillor Centre for Municipal Research and Advice FBS FFC FS GIS GIZ GP GRAP HDA HDF HOD HR HRDCSA Free Basic Service Financial and Fiscal Commission Free State Geographic Information System Gesellschaft für Internationale Zusammenarbeit Gauteng Generally Recognised Accounting Practice Housing Development Agency Human Development Framework Head of Department Human Resources Human Resource Development Council of South Africa CoGTA Department of Cooperative Governance and Traditional Affairs HRM&D Human Resources Management and Development COO Chief Operations Officer ICAS Independent Counselling and Advisory Service CRDP Comprehensive Rural Development Programme ICT Information and Communication Technology CSIR DACF CSR DAFF DBSA DCoG DEA DHS DM DoE DoJ DPME Council for Scientific and Industrial Research District Assemblies Common Fund Corporate Strategy and Research Department of Agriculture, Forestry and Fisheries Development Bank of Southern Africa Department of Cooperative Governance Department of Environmental Affairs District Health System District Municipality Department of Energy Department of Justice Department of Planning, Monitoring and Evaluation ICLEI IDP IGR IMATU IMFO IOM IGR ILO IPAP IRM ISDF IUDG International Council for Local Environmental Initiatives Integrated Development Plan Intergovernmental Relations Independent Municipal and Allied Trade Union Institute of Municipal Finance Officers International Organization for Migration Intergovernmental Relations International Labour Organisation Industrial Policy Action Plan Integrated Risk Management Integrated Service Delivery Framework Integrated Urban Development Grant DPSA Disabled People South Africa KPI Key Performance Indicator DRDLR DRM DSD DST EC Department of Rural Development and Land Reform Disaster Risk Management Department of Social Development Department of Science and Technology Eastern Cape KZN LAN LED LG LGA KwaZulu-Natal Local Area Network Local Economic Development Local Government Local Government Association of England and Wales ECD Early Childhood Development LGCCC Local Government Climate Change Champions ED Executive Director LGES Local Government Equitable Share EDI Electricity Distribution Industry LGFF Local Government Fiscal Framework EDP Economic Development Planning LGHR Local Government Human Resources EESDCF Employment Equity Skills Development Consultative Forum LGICT Local Government Information Communication Technology EIUG Intensive User Group of Southern Africa LGS Local Government Support EMS Emergency Medical Services LGSETA Local Government Sector Education Authority

5 LGSTT Local Government Support Task Team PEO Provincial Executive Officer LGTAS Local Government Turnaround Strategy PFMA Public Finance Management Act LODLOG Local Democracy and Local Governance PHDA Priority Housing Development Areas LP Limpopo PMA Provincial Members Assembly LR Labour Relations PMS Performance Management System LRA Labour Relations Act PRZ Provisional Restructuring Zones MASP Municipal Audit Support Programme RM Risk Management MBI Municipal Benchmarking Initiative PHC Primary Healthcare M&E Monitoring and Evaluation SADC Southern African Development Community MDB Municipal Demarcation Board SALGA South African Local Government Association MDG MFMA MHS MHSCG MID MINMEC MIS MMC MoU MP MPAC MSA MTEF MTSF MYPD NC NCOP NDA NDP NEC NEDLAC NEPAD NERSA NGP NHI NMA NOB NSDP NW NWG NWG OHS OLG PA PDP Millennium Development Goals Municipal Finance Management Act Municipal Health Services Municipal Human Settlements Capacity Grant Municipal Institutional Development Ministers and Members of Executive Council Meeting Municipal Infrastructure Services Member of the Mayoral Committee Memorandum of Understanding Mpumalanga Municipal Public Accounts Committee Municipal Systems Act Medium-Term Expenditure Framework Medium-Term Strategic Framework Multi-year Price Determination Northern Cape National Council of Provinces National Development Agency National Development Plan National Executive Committee National Economic Development and Labour Council New Partnership for Africa s Development National Energy Regulator of South Africa National Growth Plan National Health Insurance National Members Assembly National Office Bearers National Spatial Development Perspective North West North West Government National Working Group Occupational Health and Safety Organised Local Government Personal Assistant Professional Development Programme SALGBC SAMHS SANBS SANEDI SANRAL SASCOC SCLG SCM SCOA SDA SDF SERI SIP SMME SPLUMA SWC SWPN ToR UCLG UCLGA UK UNEP UNISA USDG VVSG WC WC/WDM WG WILGS WIPLGS WSA WSP South African Local Government Bargaining Council South African Military Health Service South African National Blood Service South African National Energy Development Institute South African National Roads Agency Limited South African Sports Confederation and Olympic Committee SALGA Centre for Leadership and Governance Supply Chain Management Standard Charts of Accounts Service Delivery Agreement Spatial Development Framework Social Economic Rights Institute of South Africa Strategic Infrastructure Project Small, Medium, Micro-sized Enterprise Spatial Planning and Land Use Management Act SALGA Women Commission Strategic Water Partnership Network Terms of Reference United Cities and Local Government United Cities and Local Governments of Africa United Kingdom United Nations Environment Programme University of South Africa Urban Settlement Development Grant The Association of Flemish Cities and Municipalities Western Cape Water Conservation / Water Demand Management Working Group Women in Local Government Summit Women in Provincial Local Government Summit Water Services Authority Water Services Provider PEC Provincial Executive Committee

6 2. FOREWORD BY THE CHAIRPERSON It is with a great sense of honour and privilege that I present SALGA s 2014/2015 annual report. The report provides an opportunity for reflection on the organisation s contribution to the performance of the local government sector. SALGA endeavours at all times to create an enabling and conducive environment for municipalities to execute their developmental mandate to the communities that they serve. This annual report also provides a synopsis of activities performed by the organisation between April 2014 and March 2015 whilst providing context to the governance of SALGA in relation to its role and mandate. The period under review cuts across two prominent milestones in the era of our democracy with the country having celebrated twenty years of democracy in 2014 and 2015 marking fifteen years of developmental and democratic local government. These significant milestones compel us as organised local government to critically Cllr. Thabo Manyoni Chairperson of the NEC reflect on the strides made by the sector in its efforts to deliver equitable and sustainable services to citizens while acknowledging the challenges that undermine the integrity of local government. To this end, one of the key priorities for SALGA in the period 2014/15 was to influence the legislative and policy review process for local government by lobbying against policies and legislation that have an undesirable impact on local government. We made several legislative and policy proposals this year which will contribute to a functional local government. Some of the submissions relate to the upper limits of salaries for senior managers, the devolution strategy for local government, the amendment of the Public Office Bearers Act, the draft monitoring, support and interventions framework, property rates bill and legislation relating to cable theft, to mention just a few. I am pleased to say that the deployment of part-time representatives to the National Council of Provinces (NCOP) contributed immensely in improving SALGA s visibility in the NCOP, it also provided the necessary impetus in providing consistency in relation to advocating and lobbying for the interests of local government. Accountability within local government is a key success driver in the adherence to the principles of good governance. SALGA has invested substantial effort in elevating the discourse around corruption in local government. In our view these investments are starting to yield positive dividends. As a key outcome of the Anti-Corruption Summit the organisation developed a consequences and accountability framework for the sector, while municipalities were also assisted and encouraged to implement their own tailored anti-corruption policies. These efforts were jointly addressed with key stakeholders in the sector namely Ethics SA, the Department of Cooperative Governance and Traditional Affairs, Gauteng Provincial Government, National Prosecuting Authority, Public Service Commission, Public Protector and GIZ. SALGA has always been at the fore front of building a functional local government that is responsive to the growing needs of its communities. This cannot be achieved without growing the leadership quotient in municipalities particularly with those who need to play their oversight role in councils. The establishment of the SALGA Centre for Leadership and Governance (SCLG) is a ground-breaking initiative which we believe provide a platform for futuristic thinking through thought leadership development engagements. The establishment of the SCLG unequivocally demonstrates SALGA s commitment to promote effective leadership as the driving force in achieving the goals of a transformed and developmental local government. The leadership of SALGA has never been comfortable with the notion of poor financial management in local government. We have monitored the Auditor General s MFMA outcomes report with keen interest with the objective of improving the narrative around accountability in the sector. We took a bold step in June 2014 to launch the Municipal Audit Support Programme (MASP) to provide hands-on support to municipalities who received adverse or disclaimed audit opinions. The MASP Programme is executed through a delivery model based on benchmarking and peer review. 6

7 Many of our municipalities face the growing risk of financial and organisational viability and this informs SALGA s persistence in advocating for a fundamental overhaul in relation to the fiscal framework for local government. Financially sustainable municipalities are the cornerstone of a functional local government system. One of the key highlights that deserves particular mention is SALGA s successful lobbying for a transitional grant at the 2014 Budget Forum. This grant is to subsidize additional and administrative costs that emerge as a result of boundary changes following an election, and will immediately assist those municipalities undergoing restructuring in SALGA also took part in a process of reviewing ways of maximising the resources through reforms to capital grants to municipalities. SALGA has done well in building recognition and brand equity for the local government sector in South Africa through its work in the international arena, which has seen SALGA s commitments across borders grow in leaps and bounds. SALGA has continued to provide sister associations within the region and the continent direct support and advice in areas relating to governance and effective lobbying and advocacy strategies. We have also played an active leadership role in the structures of world bodies such as the UCLG and the CLGF, as well as the UCLGA within the continent. The City of Joburg (COJ) will host the next Africities Summit in November 2015 and SALGA has played a central role in supporting COJ to secure the bid to host this prestigious summit which was launched in October The Local Government Association of England and Wales requested SALGA to participate in a peer review of local government in England which we deemed a significant opportunity. Participating in a peer review with a respected international organisation was indeed gratifying and an indication that SALGA is a strong force in the international arena of organised local government. In conclusion, it is important for me to mention that SALGA has once again received a clean audit from the Auditor General of South Africa, the third one consecutively. This achievement demonstrates SALGA s commitment to lead from the front in promoting the practices of accountability and a local government which is responsive. I wish to convey to the CEO and the Executive Management Team of SALGA my heartfelt thanks for the energy they put into running a clean administration which is exemplary to its members. It is our firm belief that the sum total of these investments will over time contribute to a high performing local government sector that we can all be proud of. Cllr Thabo Manyoni SALGA Chairperson 31 July

8 3. CHIEF EXECUTIVE OFFICER S OVERVIEW SALGA has achieved notable successes in 2014/15. The organisation made good progress in implementing its strategy, thereby laying a strong foundation in delivering on the strategic goals of the organisation for Building a resilient and sustainable organisation is a key factor in ensuring that we deliver on the mandate given to us by our members. Good governance has therefore been a business imperative to our continued success as an organisation. SALGA has once again received a clean bill of health from the Auditor-General for the period under review, the third one in a row. This demonstrates our commitment to accountability. SALGA has achieved 98 percent against its APP in 2014/15 an outstanding achievement. The organisation maintains a relatively high profile position locally with our members and with stakeholders in provincial and national government, as well as with international bodies and other influential bodies with relevance to local government. The organisation has achieved improved financial sustainability, an important feat in building a resilient body that is responsive to the needs of its member municipalities. The organisation increased its revenue by 20.3 percent to R502.7 million. In addition, it recorded over 36.2 percent increase in cash and cash equivalents, and 210 percentage increase in its total assets. Payment levels or collections rate were maintained at over 85 percent. During the past year, we also cemented our objective of building the organisation internally by actively promoting values of being a caring organisation. In consolidating the successes and sustaining the change agenda, the financial and reputational gains made have enabled SALGA to offer best-practice service benefits to its employees by means of employer contributions to the medical aid and pension fund, a group risk scheme and adequate funeral cover. As a result of the implemented service benefits and improved employee engagement, the staff turnover was reduced from 11, 7 percent in 2012/13 to 5,5 percent in 2014/15. Establishing a strong employer value proposition is making SALGA increasingly attractive as an employer of choice to those with a passion for making a difference in the local government sector. We have also done well at recognising the good work of employees through an annual employee recognition awards event, and offering employees educational assistance and capacity building programmes as well as emotional and physical wellness support programmes. We will look at back at 2014/15 as a year in which we nailed our colours to the mast in implementing programmes that will bring about tangible results for the sector in the long-term by launching the municipal audit support programme for municipalities who consistently achieve unqualified audits and through the small town regeneration programme. These programmes were rolled out in line with the priorities of the organisation outlined in the strategy. We also accelerated the implementation of key capacity building programmes through the councillor induction programme and the senior management induction programme. The national development plan explicitly outlines the importance of building a capable state and it is in that light that we at SALGA will continue to do all we can to capacitate our members through strategic programmes. The various successes outlined above serve to highlight the importance of SALGA as a whole and also to raise the bar for all municipalities in terms of what we should achieve in the forthcoming year. Only through close collaboration and a constant striving to achieve more will we be able to ensure that the service delivery landscape of the country at large is enriched and we are able to build a better future for all. Finally, I would like to extend my heartfelt thanks to the National Executive Committee of SALGA. The support of the NEC has continuously been strong and it is always motivating to feel its strength and energy. I would also like to acknowledge the executive management team, which jointly worked hard to implement the goals and strategy of the organisation. 8

9 I wish to also thank all SALGA s stakeholders - both in national and provincial government - for their support in realising programmes for our municipalities, thereby enabling us to better discharge our developmental mandate. I am also grateful to all our partners in the national and provincial spheres of government, the ministry and the Department of CoGTA in particular, Cities Network, Municipal Demarcation Board, Local Government SETA and the National Treasury. We are grateful for the guidance of the National Legislature (Parliament) in the form of the NCOP and its committees, as well as the National Assembly Committees, in particular the portfolio committee on local government and traditional affairs who have been unflinching in their support of our organisation. Thank you for embracing the concept that local government is also your business. Xolile George Chief Executive Officer Date: 31 July

10 4. STRATEGIC OVERVIEW 4.1 SALGA s Strategic Plan The five-year (2012 to 2017 period) strategic plan was developed against the backdrop of South Africa s third successful democratic local government elections. The high voter turnout (which increased from 49% in 2000 to 57% in 2011) is testament to the importance of local government to South Africans. But while significant gains have already been made in building a democratic local government, consolidation is still required. In 2009, government adopted the Local Government Turnaround Strategy (LGTAS). Cabinet also adopted a Medium Term Strategic Framework (MTSF) with twelve outcomes, one of which focuses specifically on ensuring a responsive, accountable, effective and efficient local government. Furthermore, government assessed the state of local government in the period preceding the elections in This resulted in several challenges being identified, including: Leadership and governance challenges relating to responsiveness and accountability; Financial and fiscal management including the inter-governmental fiscal regime; Cooperative governance especially intergovernmental relations; Varied performance across municipalities in delivering basic services; Varied performance across municipalities in growing local economies; The continuation of apartheid spatial development patterns and inequity; A lack of human resource capital to ensure professional administrations and positive relations between labour, management and councils; and The absence of a differentiated approach to support and govern municipalities that recognises the differences in the nature and character of municipalities and how this is critical in the challenges that municipalities face. Given the expectations around the 2011 local elections, SALGA reviewed, from a strategic perspective, what it could do to build on this. This review gave the association the impetus to achieve the following: Build on what has already been developed in terms of the LGTAS; Identify key challenges that continue to impact on local government; Assert the importance of this sphere of government and intensify the need to clarify and strengthen the powers and functions of the sphere; Emphasise the need for local government to fulfil its developmental mandate as articulated in the Constitution of the Republic of South Africa and the White Paper on Local Government; Sharpen the focus and priorities of local government as a basis for harnessing and coordinating efforts aimed at strengthening the sector; Engage with its members to develop a programme of action that is responsive and relevant to the differentiated needs of its members; and Strengthen the position of SALGA as a unitary structure that is aligned in terms of its strategy and structure and is capacitated as a structure of organised local government that is geared to deliver on its mandate. The strategic plan asserts the notion that local government must be empowered, resourced and capacitated to assume its role of service delivery and development to the people of South Africa. It also commits SALGA to adopting a member-centric approach. The plan is built on the underlying assumption that the association will work closely with its partners and stakeholders to develop the local government sector. 10

11 4.2 Key policy and strategic frameworks impacting on local government The strategic plan of SALGA is aligned to legislation and policy mandates. In this context it commits the organisation to be member-centric, engage in meaningful partnerships, position the organisation for high performance and ultimately demonstrate seriousness and commitment to growing and developing the sector. The strategy of SALGA is also informed by national policy and strategic frameworks: The Medium-Term Strategic Framework (MTSF) On 22 December 2009, Cabinet approved the local government turnaround strategy of the Department of Cooperative Governance and Traditional Affairs (CoGTA). This resulted in Cabinet prioritising 12 outcomes for the remaining years of the MTSF: MTSF OUTCOMES 1 Quality basic education 2 A long and healthy life for all South Africans 3 All people in South Africa are and feel safe 4 Decent employment through inclusive economic growth 5 A skilled and capable workforce to support an inclusive growth path 6 An efficient, competitive and responsive economic infrastructure network 7 Vibrant, equitable and sustainable rural communities contributing towards food security for all 8 Sustainable human settlements and improved quality of life for all households 9 Responsive, accountable, effective and efficient local government 10 Protect and enhance the environmental assets and natural resources of the country 11 Create a better South Africa, a better Africa and a better world 12 An efficient, effective and development-oriented public service and an empowered, fair and inclusive citizenship While local government has to contribute towards the achievement of all outcomes (especially outcomes 4, 6, 7, 8 and 10), outcome 9 is especially pertinent to SALGA The local government turnaround strategy (LGTAS) Outcome 9 specifically addresses local government. It is underpinned by the Ten point plan for local government. This seeks to reinforce and support the implementation of the LGTAS. It comprises ten local government outcomes and 44 corresponding performance indicators: CoGTA 10-POINT PLAN / LGTAS OUTCOMES 1 2 Improve the quantity and quality of municipal basic services to people. This is specifically related to the areas of access to water, sanitation, electricity, waste management, roads and disaster management Enhance the municipal contribution to job creation and sustainable livelihoods through local economic development (LED) 3 Ensure the development and adoption of reliable and credible integrated development plans (IDPs) 4 Deepen democracy through a refined ward committee model 5 Build and strengthen the administrative, institutional and financial capabilities of municipalities 6 Create a single window of coordination for support, monitoring and intervention in municipalities 7 Uproot fraud, corruption, nepotism and all forms of maladministration affecting local government 8 Develop a coherent and cohesive system of governance and a more equitable intergovernmental fiscal system 9 Develop and strengthen a politically and administratively stable system of municipalities 10 Restore the institutional integrity of municipalities 11

12 4.2.3 The millennium development goals (MDGs) MDGs GOALS 1 Eradicate extreme poverty and hunger 5 Improve maternal health 2 Achieve universal primary education 6 Combat HIV/Aids, malaria and other diseases 3 Promote gender equality and empower women 7 Ensure environmental sustainability 4 Reduce child mortality 8 Develop a global partnership for development The new growth path The new growth path is a broad framework that sets out a vision and identifies key areas where jobs can be created. It is intended to address unemployment, inequality and poverty in a strategy of creating a significant increase in new jobs in the economy, mainly in the private sector. It sets a target of creating five million new jobs in the next 10 years. This target is projected to reduce unemployment from 25% to 15%. To accomplish this, the plan identifies specific job drivers. These drivers include: Investing in infrastructure for employment and development: Substantial investment in infrastructure, both to create employment directly through construction, operation, maintenance and the production of inputs, as well as indirectly, by improving efficiency across the economy; Identifying and supporting key economic sectors: Targeting more labour-absorbing activities across the main economic sectors and the agricultural and mining value chains, manufacturing and related services; Seizing the potential of new economies: Taking advantage of new opportunities in the knowledge and green economies; Investing in social capital and public services: Leveraging social capital in the social economy and the public sectors; Facilitating effective spatial development: Fostering rural development and regional integration. The new growth path stresses the need to align macro-economic measures, micro-economic interventions and social partner commitments. This is done to achieve the shared goals that the framework aims to achieve. It concludes with setting out the priorities, sequencing and implementation plans The national development plan The national planning commission produced a national development plan (Vision 2030) (NDP) outlining a long-term vision and strategy for South Africa. Cabinet has endorsed the NDP, a blueprint for eliminating poverty and reducing inequality in the country by This is the strategic framework for detailed government planning going forward. The commission believes that the problem of uneven capacity and varied performance is particularly acute at the local government level. The current local government system has only been in place for just over a decade. This means that there are significant challenges that still need to be addressed. However, despite major obstacles relating to finance, human resources and a limited autonomy, municipalities are making progress. There are many positive stories in the local government sector. These range from municipalities that generally perform well to those that just manage to fulfil their responsibilities in specific areas, such as basic service delivery, poverty alleviation and infrastructure development. 12

13 It is clear from the various municipal performance reviews that greater attention needs to be given to the obstacles that prevent the worst performing local and district municipalities from fulfilling their core functions. In particular, the following elements are suggested: Closer consideration of the varied capacity of municipalities and the need to achieve a better fit between the capacities and responsibilities of municipalities; Addressing the issue of mandates that have no funding; Addressing the issue of the adequacy of the powers and functions of municipalities, particularly where a lack of these powers and functions hampers development. The focus is on the transfering of functions such as housing, public transport and land use management to local government; and Addressing the inefficient two-tier system of local government Emerging issues and strategic realignment The SALGA strategic plan does not exist in isolation. As such, it is inevitable that it will be impacted by events that have occurred after its development. These include State of the Nation addresses, Cabinet makgotla, national and provincial elections and the SALGA leadership makgotla. Given the significance of these events, SALGA has to create flexibility at a strategic level, to ensure that it is aligned to local government and intergovernmental matters. To do this, SALGA undertakes the following: Reviews key performance indicators (KPIs) and priority programmes as a basis of assessing how issues may be included; and Incorporates the information into the annual performance plans of SALGA. This approach ensures that SALGA will manage unforeseen issues in its strategy on an ad-hoc basis. This will have implications in terms of regulatory compliance, resource utilisation and budgetary allocations. 4.3 SALGA membership and stakeholders SALGA members Since its establishment in 1996, SALGA has focused on fulfilling its mandate of supporting local government transformation. This has taken place in a complex environment, characterised by the highly diverse and diffuse membership base of the country s 278 municipalities, which collectively constitute an independent, interdependent and inter-related sphere of government. These members range from deep rural municipalities, which struggle with severe service delivery backlogs and institutional challenges, to sophisticated cities that have significant institutional capacity. Municipalities are therefore classified in accordance with the criteria in the Local Government: Municipal Structures Act, 1998 (Act No. 117 of 1998): Metropolitan (Category A); Local (Category B); and District municipalities (Category C). The SALGA strategic plan must therefore respond to the differentiated needs of the various municipalities. In addition, the SALGA Constitution makes provision for associate member organisations that are strongly concerned with or involved in local government matters, and which comply with criteria determined by SALGA s national executive committee (NEC) Key stakeholders The efficient management of stakeholders has become a core element of business strategies in many successful organisations. In line with SALGA s mandate to represent, promote and protect the interest of local government, the association recognises the 13

14 important role that stakeholders play within the local government sphere. Stakeholders are integral in shaping and supporting the implementation of the SALGA mandate and programme of action. The diagram below outlines the manner in which SALGA engages with stakeholders as part of a broader process of representing, supporting and servicing its members. Private sector Associate members Civil society Donor agencies State owned entities Research institution SALGA Professional bodies Other international partners International municipal Municipalities Government Stakeholders also play a vital role in bolstering the resource capacity of SALGA. The three categories of SALGA stakeholders are briefly discussed below Government SALGA has to maintain and develop multi-level relationships with different government spheres. It also has to develop and maintain these relationships to ensure that it effectively fulfils its mandate. Of particular importance, are the relationships with CoGTA and national and provincial departments, that impact on service delivery, municipal functioning and the institutions within which SALGA represents local government. These institutions include the Financial and Fiscal Commission; National Council of Provinces and Ministers and Members of Executive Council Meetings (MINMECs) (including their political and administrative officials and staff) Non-governmental entities SALGA interacts with a range of entities that have a role in the local government sector. These non-governmental entities include the private sector, research and training institutions, professional bodies, international donors and development partners Internal As a national organisation, SALGA must have functional and political integration between its constituent members and the municipalities they represent. This is necessary if it is to be effective in any appreciable manner. It is required that integration be actively fostered and developed. These relationships should be multi-level networks of relationships between the SALGA national office, the SALGA provincial structures and individual municipalities (local, district and metropolitans). 14

15 4.4 Vision To be an association of municipalities that is at the cuttingedge of quality and sustainable services. 4.5 Mission To be consultative, informed, mandated, credible and accountable to our membership and to provide value for money. Vision To be an association of municipalities that is at the cutting-edge of quality and sustainable services. Mission To be consultative, informed, mandated, credible and accountable to our membership and to provide value for money Values Responsive, Innovative, Dynamic and Excellence. 4.6 Values Our values are: Responsiveness Innovation Dynamism Excellence 5. LEGISLATIVE AND OTHER MANDATES SALGA is managed by various key legislative, policy and regulatory frameworks. These are: 5.1 Legislative mandate The Constitution of the Republic of South Africa, 1996 (Act No. 108 of 1996) Section 163 of the Constitution envisages an important role for organised local government. An Act of Parliament must cater for the recognition of national and provincial organisations representing municipalities. This Act must determine the procedures by which local government may consult the national and provincial government, designate representatives to participate in the National Council of Provinces (NCOP) and nominate persons to the Financial and Fiscal Commission (FFC) The Organised Local Government Act, 1997 (Act No. 52 of 1997) The Organised Local Government Act recognises SALGA as a representative of organised local government. This allows local government to designate up to ten part-time representatives to the NCOP in Parliament. It also allows it to nominate two additional people to the FFC that advises the finance ministry on budget issues. Furthermore, SALGA participates in intergovernmental structures at provincial and district levels. It is able to influence national and provincial legislation and to gauge the impact of such legislation on local government The White Paper on Local Government (1998) The White Paper on Local Government (1998) refers to how the constitution allows for municipalities to organise forms of municipal association. As such, the White Paper identifies the key role of SALGA as being the effective representation of local government in the legislative processes of all spheres of government. In its intergovernmental executive processes, SALGA affects the status, institutions, powers and functions of municipalities. In order to do this effectively, the association must develop its own policy and advocacy capacity. It also has to develop a strong internal mandate and undergo extensive consulting processes. According to the 15

16 White Paper, organised local government (OLG) is an employer organisation and therefore constitutes the employer component of the South African Local Government Bargaining Council (SALGBC). This means that SALGA has a key role to play, not only as an employer in the SALGBC, but also in building capacity in labour relations among its membership. It also has to maintain open and constructive relationships with organised labour. The successful transformation of local government requires that the relations between employer bodies and municipal trade unions are reconstructed around a common commitment to a developmental role for local government. The negotiation of this partnership requires vision and leadership. It also requires expertise in labour relations, bargaining, conflict resolution and human resource management and development. As such, SALGA has the potential to make a strong contribution to the development of municipalities throughout the country. This can be done by: The provision of specialised services to supplement and strengthen the capacity of municipalities; Research and information dissemination; Facilitating shared learning between municipalities; Human resource development; and Councillor training. SALGA has a significant role to play in this training. The training is also required to coincide with the election of new municipal councillors The Municipal Systems Act, 2003 (Act No. 32 of 2000) The Municipal Systems Act provides that all municipalities must comply with any collective agreements concluded by organised local government within its mandate. This is done on behalf of local government in the bargaining council established by municipalities. This Act suggests that all municipalities are bound by the terms of agreements negotiated by OLG through SALGA with the respective trade unions The Municipal Finance Management Act, 2003 (Act No. 56 of 2003) The Municipal Finance Management Act was established to secure sound and sustainable management of the financial affairs of municipalities and other institutions in the local sphere of government. The Act seeks to establish treasury norms and standards for local government and to provide for all related matters The Intergovernmental Relations Framework Act, 2005 (Act No. 13 of 2005) The Intergovernmental Relations Framework Act establishes a framework for local government and other spheres of government to promote and facilitate intergovernmental relations. It also provides for mechanisms and procedures to facilitate the settlement of intergovernmental disputes and all associated matters SALGA Constitution The constitution of SALGA has undergone three phases of development. It was adopted in May 2000 followed by two further reviews in 2004 and 2007: Phase 1: (adopted May 2000); Phase 2: (adopted 24 September 2004); and Phase 3: (adopted 25 April 2007). 16

17 5.2 SALGA mandate A developmental local government is an essential part of the public sector. National growth and development imperatives are dependent on the ability of local government to deliver on its mandate. SALGA has to utilise the resources and partnerships at its disposal to build a local government sector that has the required capacity to facilitate poverty alleviation, economic development and creation of jobs, and harness the socio-economic opportunities that the state has geared itself to provide for its people. SALGA serves as the representative voice of all 278 municipalities. Since its establishment, the association has endeavoured to bring focus to its mandate of supporting local government transformation in a complex environment. This has been characterised by a highly diverse membership base of municipalities. Its mandate rests on six pillars: SALGA MANDATE Transform local government to enable it to fulfil its developmental mandate Lobby, Advocate and Represent Employer Body Capacity Building Support and Advice Strategic Profiling Knowledge and Information Sharing Lobby, advocate, protect and represent the interest of local government at relevant structures and platforms. Acts as an employer body representing all municipal members and, by agreement, associate members. Build the capacity of the municipality as an institution as well as leadership and technical capacity of both Counillors and Officials. Support and advise our members on a range of issues to assist effective execution of their mandate. Build the profile and image of local government within South Africa as well as outside the country. Serve as the main hub of local government knowledge and intelligence and to facilitate peer learning within the sector. The Voice of Local Government SALGA has six main functions as indicated in the diagram above: Lobby, advocacy and represent: This refers to representing the interests of members in legislatures and other policymaking and oversight structures. It also refers to engaging with various stakeholders in public debates and other platforms in the interest of local government. Employer body: This refers to being an effective employer that represents its members. This representation is carried out in collective bargaining as stipulated in the Labour Relations Act. However, it also includes various other structures including but not limited to those established in the SALGBC. Capacity building: This refers to facilitating capacity building initiatives through representing member interests in the Local Government Sector Education Authority (LGSETA). Support and advise: SALGA needs to provide the tools and services that enable municipalities to understand and interpret trends, policies and legislation affecting local government and to implement them. Strategic profiling: Elements here refer to enhancing the profile and image of local government as an important and credible agent for the delivery of services. Profiling needs to take place on a national level as well as in Africa and the rest of the world. Knowledge and information sharing: This refers to building and sharing a comprehensive hub of local governmental knowledge and intelligence. This will enable the informed delivery of the other mandates of SALGA. The knowledge hub is also a useful reference point for all who seek local government information. 17

18 6. ORGANISATIONAL STRUCTURE As with all public sector institutions, the political governance structures are supported by an administration. In the case of SALGA, there are both the established national administration as well as nine provincial administrations. Support is not only provided on logistics and the convening of meetings, but also at a technical level. Support is provided to the governance structures to ensure that information and data is collected and consolidated and that proper reports are tabled for consideration at meetings. Technical support is provided to add value to the quality of reports tabled for consideration, by ensuring that the information and data generated by the various governance structures is properly packaged and analysed. In addition, the administration is there to ensure that reports and recommendations are appropriately placed in context by considering all legal, financial, human resources and other implications. Recommendations are required to be clearly outlined for informed decision-making. The administration is also a generator of reports and recommendations for consideration by SALGA s governance structures. Therefore, it must facilitate the processing of reports through all SALGA structures, to ensure full and broad participation by the organisation in the decisionmaking process. In this regard, the national executive committee (NEC), at its Lekgotla in August 2007, considered a detailed presentation on the development of policy positions by the organisation and similarly to establish a mandate to inform a SALGA position on any matter. 18

19 Chief Executive Officer Chief of Operations Internal Audit Legal Compliance and Risk Corporate Secretariat, Governance and Strategic Programmes Performance Management Unit Communications and Marketing Provincial Offices Governance, IGR and International Relations Municipal Institutional Development Municipal Infrastructure and Services Community Development Economic Development and Management Planning Corporate Strategy and Research Finance and Corporate Services Eastern Cape Free State Gauteng KwaZulu- Natal Limpopo International relations and protocol Intergovernmental relations Advocacy and lobbying Governance support Parliamentary affairs and research 5-Year Local Government Strategic Agenda coordination Collective bargaining and labour relations Municipal human resources support Skills development and capacitybuilding Single public service Local government transformation Solid waste management Water and sanitation Electricity and energy Transportation and roads Climate change and environmental management support Sustainable human settlement Human development Safety and security Health Social cohesion and city diplomacy Disaster management Special programmes mainstreaming (youth, gender, HIV, etc.) Development management planning Economic development (ICT, ASGISA, IDPs, PGDS, NSPS, EPWP) Local government finance Municipal entity oversight P3 country project management Research Finance control Policy Asset development and management analysis Supply chain Strategy and management business planning Human resources Organisational performance Administration management Information and Knowledge communication management technology Monitoring and Financial reporting evaluation and systems Stakeholder relations Mpumalanga Northern Cape Noth West Western Cape 19

20

21 PART B: GOVERNANCE 21

22 1. INTRODUCTION Corporate governance essentially involves balancing the interests of many stakeholders within SALGA. These include its members, stakeholders, leadership and management, government and the community. Since corporate governance also provides the framework for attaining the organisational goals and objectives, it encompasses practically every sphere of management, from action plans and internal controls to performance measurement and public accountability. Over the past decade, it has become increasingly apparent that the sustainability of economies, societies and organisations are integral. Organisational activities impact the health of the societies and economies of which they are part. In turn, the sustainability of these organisations is dependent on the health of the societies and economies to which they contribute. These are complex systems, shaped by the inherently interdependent relationships between stakeholders at all levels individuals, organisations, communities, governments and regulators. In today s highly connected world, all boundaries are permeable. In such a world, SALGA has graduated to the next level. We do not only pursue organisation-centric sustainability, but the sustainability of the larger system. When SALGA resolved to be sustainable, the organisation committed to more than a series of internal initiatives. It is committed to a different way of operating that takes into account the health of the larger system of which it is part and upon which it depends. Sustainability represents a fundamental shift; where multiple outcomes drive decisions, long-term future outcomes are balanced against today s demands and a broader set of stakeholder purposes have to be considered. Local governments across the world are increasingly being given responsibility to address most of their service delivery functions. Municipalities are therefore expected to manage their localities to ensure environmental, economic and social sustainability. It is against this background that SALGA, as the voice of organised local government in South Africa, is committed to the creation of flexible network approaches with key stakeholders. This is in order to carry out joint programmes of research and learning, information and technology sharing, management development and coordinated action on common problems, as a direct response to these global challenges facing municipalities. 2. SALGA GOVERNANCE FRAMEWORK SALGA is a Schedule 3A Public Entity, recognised in terms of the Public Finance Management Act, 1999 (Act No. 1 of 1999) (PFMA) and audited as one entity. As such, it reports to the Minister of Cooperative Governance. SALGA is funded through a combination of sources including a national government grant, membership fees from municipalities and donations from the donor community for specific projects. SALGA is bound by one constitution. SALGA governance structures consist of the national conference, provincial conferences, national members assembly, provincial members assemblies, national executive committee, provincial executive committees, national working groups as well as provincial working groups. Its point of departure is to strengthen the local sphere of government in delivering a developmental agenda that is aligned to national strategic priorities and which reinforces the work of the national and provincial spheres of government. The eradication of poverty and unemployment, alongside the stimulation of growth, lies at the heart of local government s mandate and has found expression in the government-wide programme. As the front-line of service delivery, local government also plays a pivotal role in consolidating and deepening democracy at the grassroots level. The SALGA Constitution outlines and defines the roles and responsibilities of its political governing bodies. In an effort to improve the coordination and alignment of the SALGA governance structures at a provincial and national level, the SALGA National Members Assembly (NMA) of March 2008 adopted the SALGA governance framework. This framework allows for the effective consultation, mandating and reporting between structures and further allows for effective decision-making by SALGA. The schedule of meetings allows for the national executive committee (NEC) to convene every three months and for provincial executive committees (PECs) and national and provincial working groups to convene in between meetings of the NEC. 22

23 2.1 SALGA national executive committee (NEC) The NEC consists of: The Chairperson of SALGA; Three Deputy Chairpersons; Six additional members who are elected separately by the National Conference; Nine Provincial Chairpersons of SALGA who are ex-officio members of the NEC; The head of the administration; and The NEC may co-opt no more than three additional members. The duties of the NEC are to: Meet at least once every three months and when the need arises; Exercise day to day executive authority; Act in accordance with the directions of the SALGA National Conference or SALGA Members Assembly; Submit a report of its activities during the previous financial year to the National Conference or National Members Assembly, whichever occurs first; and Develop, review and adopt the SALGA administration policies. Cllr Thabo Manyoni Chairperson Cllr Flora Maboa Boltman Deputy Chairperson Cllr Nombulelo Hermans Deputy Chairperson Cllr Mpho Nawa Deputy Chairperson Cllr Abe Bekeer Nec Member Cllr Subesh Pillay NEC Member Cllr Zibonele Dumzele NEC Member Cllr Boltumelo Moloi NEC Member Cllr Chris Neethling NEC Member Cllr Zukiswa Ncitha NEC Member Cllr Dudu Mazibuko NEC Member Cllr Grace Mthimunye NEC Member Cllr Baldwin Mathibe NEC Member Cllr Nomakhosazana Meth Chairperson: Eastern Cape Cllr Sebenzille Ngangelizwe Chairperson Free State Cllr Parks Tau Chairperson Gauteng Cllr Welcome Mdabe Chairperson Kwa-Zulu Natal Cllr David Magabe Chairperson Limpopo Cllr Mafika Nkosi Chairperson Mpumalanga Cllr Willie Johnson Chairperson Northern Cape Cllr Kaone Lobelo Chairperson North West Cllr Demetri Qually Chairperson Western Cape 23

24 The SALGA NEC members for 2014/15 and the dates of meetings attended were: NEC Member DATE DATE DATE # Attended 03 July October February 2015 Cllr T Manyoni Yes No Yes 2/3 Cllr N Hermans Yes Yes Yes 3/3 Cllr M Nawa Yes Yes Yes 3/3 Cllr F Maboa-Boltman Yes Yes Yes 3/3 Cllr DCP Mazibuko No No Yes 1/3 Cllr S Mashilo Yes N/A N/A 1/1 Cllr G Mthimunye N/A N/A Yes 1/1 Cllr C Neethling Yes No Yes 2/3 Cllr J Matlou Yes N/A N/A 1/1 Cllr T Matibe N/A N/A Yes 1/1 Cllr B E Moloi Yes Yes Yes 3/3 Cllr Z Ncitha Yes No Yes 2/3 Cllr W Johnson Yes Yes Yes 3/3 Cllr N Meth Yes No Yes 3/3 Cllr D Magabe Yes Yes Yes 3/3 Cllr G Lobelo Yes Yes Yes 3/3 Cllr B Mzangwa Yes N/A N/A 1/1 Cllr Ngangelizwe N/A Yes Yes 2/2 Cllr M Nkosi Yes Yes Yes 3/3 Ald D Qually Yes Yes Yes 3/3 Cllr P Tau Yes No Yes 2/3 Cllr S Mdabe Yes No Yes 2/3 Cllr A Bekeer Yes Yes Yes 3/3 Cllr Z Dumzela Yes Yes Yes 3/3 Cllr S Pillay Yes No Yes 2/3 Cllr F Ratlhaga N/A N/A No 0/1 Quorum Yes Yes Yes meetings 24

25 2.2 SALGA provincial executive leadership The provincial executive committee (PEC) consists of: The Chairperson; Three Deputy Chairpersons; Six additional members who are elected separately by the Provincial Conference; and The PEC may co-opt no more than three additional members. The PEC s duties are to: Meet at least once every three months and when the need arises; Exercise day to day executive authority in the province; Act in accordance with the directions of the Provincial Conference or Provincial Members Assembly; Submit a report of its activities during the previous financial year to the Provincial Conference or Provincial Members Assembly, whichever occurs first; Develop, review and adopt SALGA s administrative policies; and Generate reports of activities in the province to be tabled at least quarterly at the NEC. The SALGA PEC members for 2014/15 were: SALGA Eastern Cape Name Designation Municipality Cllr Nomakhosazana Meth Chairperson OR Tambo District Cllr Deon De Vos Deputy Chairperson Cacadu District Cllr Mxolisi Koyo Deputy-Chairperson Chris Hani District Cllr Luleka Simon Co-opted member Buffalo City Metro Cacadu Cllr Nozibele. Makanda Co-opted member Chris Hani District Cllr Themba Tinta Co-opted member Buffalo City Metro Cllr Thando Ngcolomba Co-opted member Nelson Mandela Bay Metro Cllr Maria Hermans Additional member Nelson Mandela Bay Metro Cllr Nomfundo Mabunu Additional member Gariep Cllr Makhaya Twabu Additional member Alfred Nzo District Cllr Nomasikizi Konza Additional member Amatole District Cllr Vukile Balura Additional member Cacadu District Cllr Thandekile Sabisa Additional member OR Tambo District 25

26 2.2.2 SALGA Free State Name Designation Municipality Cllr Sebenzile Ngangelizwe Chairperson Matjhabeng Cllr Bhekumzi Charles Stofile Deputy Chairperson Matjhabeng Cllr Nthabiseng Mokotjo Deputy Chairperson Mangaung Metro Cllr Disebo Nakedi Deputy Chairperson Moqhaka Cllr Mongi Geolion Ntwanambi Additional member Xhariep District Cllr Thandiwe Ivy Reachable Additional member Letsemeng Cllr Nesta Rabela Additional member Mangaung Metro Cllr Lindiwe Ursula Makhalema Additional member Dihlabeng Cllr Victoria de Beer Co-opted member Ngwathe Cllr Tshidi Koloi Co-opted member Moqhaka Cllr Vuyizile Mona Co-opted member Letsemeng Cllr Lenox Rubulana Co-opted member Matjhabeng Cllr Phindi Maleka Co-opted member Lejweleputswa District SALGA Gauteng Name Designation Municipality Cllr P Tau Chairperson City of Joburg Cllr P Mkonza Deputy Chairperson Ekurhuleni Cllr G Hlongwane Deputy Chairperson Emfuleni Cllr C Seerane Deputy Chairperson West Rand District Cllr B Modisakeng PEC member Sedibeng District Cllr F Bhayat PEC member Mogale City Cllr T Ernest PEC member City of Tshwane Cllr M Mathikge PEC member Merafong City Cllr M Mfikoe PEC member City of Joburg Cllr P Tsotetsi PEC member Sedibeng District Cllr R Mashego PEC member Ekurhuleni Cllr B Baloyi PEC member Midvaal Cllr K Ramokokgopa PEC member City of Tshwane 26

27 2.2.4 SALGA KwaZulu-Natal Name Designation Municipality Cllr SW Mdabe Chairperson ilembe District Cllr J Nxumalo Deputy Chairperson ethekwini Metro Cllr J Khumalo Deputy Chairperson Amajuba District Cllr TVB Mchunu Deputy Chairperson uthungulu District Cllr N Gumede Additional member ethekwini Metro Cllr M E Ndobe Additional member Harry Gwala District Cllr C Ndlela Additional member Msunduzi Cllr NH Gumede Additional member ugu District Cllr Y Bhamjee Additional member umgungundlovu District Cllr N Vilane Additional member UMkhanyakude District Cllr EN Molefe Additional member Nquthu Cllr P Khaba Additional member Abaqulusi SALGA Limpopo Name Designation Municipality Cllr D M Magabe Chairperson Sekhukhune District Cllr S Lamola Deputy Chairperson Waterberg District Cllr D Mmetle Deputy Chairperson Tzaneen Cllr L Mapoulo Deputy Chairperson Capricorn District Cllr K Lekalakala PEC member Modimolle Cllr N Sibanda PEC member Lepelle Nkumpi Cllr G Kganyago PEC member Capricorn District Cllr O Mafefe PEC member Sekhukhune District Cllr L Nhlapo PEC member Bela-Bela Cllr S Ramaremela PEC member Mopani District Cllr T Nkadimeng Co-opted member Polokwane Kgoshi S Dikgale Co-opted member House of Traditional Leaders Cllr T B Matibe NEC member Vhembe District 27

28 2.2.6 SALGA Mpumalanga Name Designation Municipality Cllr Mafika Nkosi Chairperson Chief Albert Luthuli Cllr Mavis Charles Deputy-Chairperson Mbombela Cllr Salome Sithole Deputy-Chairperson Emalahleni Cllr Reinas Khumalo Deputy-Chairperson Bushbuckridge Cllr Lesetja Dikgale Member Nkangala District Cllr Terror Shabangu Member Ehlanzeni District Cllr Tunu Mnisi Member GertSibande District Cllr VelaphiMagagula Member ThabaChweu Cllr Lindi Masina Member Govan Mbeki Cllr Mandla Mhlanga Member Nkomazi Cllr Sylvia Nxumalo Member Bushbuckridge Cllr Lindiwe Ntshalintshali Member Emalahleni Cllr Mandla Khayiyana Member Govan Mbeki SALGA Northern Cape Name Designation Municipality Cllr Willie Johnson Provincial Chairperson Frances Baard Cllr Winnie Ngobeza Deputy Chairperson Sol Plaatje Cllr Nokhaya Mjila Deputy Chairperson ZF Mgcawu Cllr Sipho S thonga Deputy Chairperson Emthanjeni Cllr Dineo Moyo Additional member Gamagara Cllr Victor Makoke Additional member John Taolo Gaetsewe Cllr Jan Tonyane Additional member Tsantsabane Cllr Lorenzo Faber Additional member Nama Khoi Cllr Eileen Drage- Maritz Additional member Namakwa Cllr Brenda Mpamba Co-opted member Thembelihle Cllr Moses Nhlapho Co-opted member Sol Plaatje Cllr Lulamile Nkumbi Co-opted member Emthanjeni Cllr Katerina Dodds Co-opted member Mier 28

29 2.2.8 SALGA North West Name Designation Municipality Cllr Kaone Lobelo Chairperson Greater Taung LM Cllr Lenah Miga Deputy Chairperson Mahikeng LM Cllr Mbulelo Zephe Deputy Chairperson Dr Kenneth Kaunda DM Cllr Sheila Mabale-Huma Deputy Chairperson Rustenburg LM Cllr Afrika Thale Additional member Ramotshere Moiloa LM Cllr Sarah Nkatlo Additional member Dr Kenneth Kaunda DM Cllr Suzan Montshioagae Additional member Dr Ruth Segomotsi Mompati DM Cllr Ezra Mdangai Additional member Bojanala Platinum DM Cllr Francis Ratlhaga Co-opted member Bojanala Platinum DM Cllr Doctor Kgosi Mohadi Co-opted member Maquassi Hills LM SALGA Western Cape Name Designation Municipality Ald Demetri Qually Chairperson City of Cape Town Cllr Georlene Wolmarans Deputy Chairperson Knysna Cllr Grant Twigg Deputy Chairperson City of Cape Town Cllr Edward Njadu Deputy Chairperson Central Karoo District Cllr Francois Schippers Additional member Saldanha bay Cllr Ian Iversen Additional member City of Cape Town Cllr Steven Vuba Additional member City of Cape Town Cllr Clera Meyer Additional member Cape Winelands District Ald Anton Coetsee Additional member Overstrand Cllr Johan Rademeyer Additional member Drakenstein Municipality Ald Belinda Walker Co-opted member City of Cape Town Cllr Sumeia Ndayi Co-opted member Bitou Cllr Belinda Landingwe Co-opted member City of Cape Town 2.3 Relationship between national and provincial bodies The SALGA Constitution regulates the relationship between SALGA and its provincial members. All provincial members are to constitute themselves in terms of the constitution of SALGA and be affiliated to SALGA. In addition, provincial executive committees (PECs) must generate reports of activities in the province to be tabled at least quarterly at the national executive committee (NEC). SALGA s national office and the nine provincial offices each have a distinct and complementary role to play in the execution of the SALGA mandate. 29

30 2.3.1 SALGA working groups The SALGA National Conference held from 30 August to 1 September 2011 elected a new NEC, in line with the provisions of the SALGA Constitution, as amended. The NEC is empowered to establish working groups and appoint the chairpersons of such working groups. SALGA working groups are structures of the NEC that deal with political detail on behalf of the NEC and their main purpose is to encourage, ensure and promote local government matters which, inter alia, will include: Cooperative governance; Consultation and coordination; and Participative decision-making. The working groups, operating within their derived mandate, must develop policies, strategies and programmes to address critical local government issues and must serve as a forum through which organised local government can consult on a political level, in order to contribute towards the creation of democratic and economically viable local government National working groups The SALGA national and provincial working groups form a critical component of the SALGA governance structures. The working groups (national and provincial) are established by national and provincial executive committees respectively, with the chairperson of the working groups appointed from the additional and co-opted members. The number of working groups is determined by the NEC based on, inter alia, the key functional areas of local government. Having considered the key functional areas of local government and to facilitate strategic alignment with the SALGA functional areas, the NEC resolved that the following national working groups be established and replicated in provinces: a. Economic development and planning; b. Climate change, environmental affairs and sustainability; c. Municipal finance; d. Community development; e. Municipal trading services; f. Municipal infrastructure planning; g. Human resource development and collective bargaining; h. Governance and intergovernmental relations; and i. Councillor welfare and support (only at national level). 30

31 SALGA s national governance structures convened as follows during 2014/15: National governance structures Date of meeting National executive committee 03 July October February 2015 National office bearers 02 July October February 2015 Community development working group 12 June September January 2015 Municipal trading services working group 20 June September January 2014 Governance, IR and IGR working group 12 June September January 2014 Human resource management working group 12 June September January 2014 Municipal finance working group 10 June September March 2014 Economic development and planning working group Municipal infrastructure planning working group Climate change, environmental affairs and sustainability working group 13 June September January June September January June September January SALGA provincial governance structures SALGA Eastern Cape Provincial governance Date of meeting structures Provincial executive meeting June September December March 2015 Community development 09 June September November March 2015 working group Municipal trading services 27 May August November February 2015 working group Governance, IR and IGR working 17 June September November February 2015 group Human resource management 05 June September November February 2015 working group Municipal finance working 06 June September November February 2015 group Economic development and 10 June September November February 2015 planning working group Municipal infrastructure 27 May August November February 2015 planning working group Climate change, environmental affairs and sustainability working group 02 May September November February

32 SALGA Free State Provincial governance structures Date of meeting Provincial executive meeting 18 July 2014 Special Meetings 20 August October October December March 2015 Community development working 28 May August November February 2015 group Municipal trading services working 27 May August November February 2015 group Governance, IR and IGR working 27 May August November March 2015 group Human resource management 28 May August November February 2015 working group Municipal finance working group 06 June August November February 2015 Economic development and 29 May August November February 2015 planning working group Municipal infrastructure planning 27 May August November February 2015 working group Climate change, environmental affairs and sustainability working group 27 May August November February 2015 SALGA Gauteng Provincial governance structures Date of meeting Provincial executive meeting 04 June September November March 2015 Community development 05 June August November February 2015 working group Municipal trading services 05 June August October February 2015 working group Governance, IR and IGR working 05 June August November February 2015 ggroup Human resource management 05 June August November February 2015 working group Municipal finance working group 05 June September November March 2015 Economic development and 05 June September November March 2015 planning working group Municipal infrastructure planning 05 June September November March 2015 working group Climate change, environmental affairs and sustainability working group 05 June August November March

33 SALGA KwaZulu-Natal Provincial governance structures Date of meeting Provincial executive meeting 04 June September November March 2015 Community development 03 June September November March 2015 working group Municipal trading services 05 June August November February 2015 working group Provincial executive meeting 05 June August October February 2015 Governance, IR and IGR working 05 June August November February 2015 group Human resource management 05 June August November February 2015 working group Municipal finance working group 05 June September November March 2015 Economic development and planning working group Municipal infrastructure planning working group Climate change, environmental affairs and sustainability working group 05 June September November March June September November March June August November March 2015 SALGA Limpopo Provincial governance structures Date of meeting Provincial Executive Meeting 29 May September December March2015 Community development working group 12 May August November February 2015 Governance, IR and IGR working group Human resource management working group 15 May August November February May August November February 2015 Municipal finance working group 16 May August November February 2015 Economic development and 15 May August November February 2015 planning working group Municipal infrastructure planning working group 14 May August November February

34 SALGA Mpumalanga Provincial governance structures Date of meeting Provincial executive meeting 05 June August November March 2015 Community development working group 14 May August November February 2015 Governance, IR and IGR working group Human resource management working group 15 May August November February August November February 2015 Municipal finance working group 13 May August November February 2015 Economic development and planning working group Municipal infrastructure planning working group Climate change, environmental affairs and sustainability working group Municipal trading services working group 16 May August November February May August November February June August November February May August November February 2015 SALGA Northern Cape Provincial governance structures Date of meeting Provincial executive meeting 20 June August August October March 2015 Community development working group Governance, IR and IGR working group Human resource management working group 14 May August November February May August November February May August November February 2015 Municipal finance working group 15 May August November February 2015 Economic development and planning working group Municipal infrastructure and services 15 May August November February May August November February

35 SALGA North West Provincial governance structures Date of meeting Provincial executive meeting 05 June September November March 2015 Community development working group 14 May August November February 2015 Municipal trading services working group Governance, IR and IGR working group Human resource management working group 14 May August November February May August November February May August November February 2015 Municipal finance working group 15 May August November February 2015 Economic development and 15 May August November February 2015 planning working group Municipal infrastructure planning working group Climate change, environmental affairs and sustainability working group 14 May August November February May August November February 2015 SALGA Western Cape Provincial governance structures Date of meeting Provincial executive meeting 3 April July December January March 2015 Community development working group 14 May August November February 2015 Municipal trading services working group Governance, IR and IGR working group Human resource management working group 15 May August November February May August November February May August November February 2015 Municipal finance working group 14 May August November February 2015 Economic development and 16 May August November February 2015 planning working group Municipal infrastructure planning working group Climate change, environmental affairs and sustainability working group 15 May August November February May August November February

36 2.4 SALGA internal oversight structures Audit committee The SALGA audit committee was established in terms of the PFMA and the Treasury regulations. The responsibilities of the audit committee have been determined by the national executive committee (NEC). Its modus operandi is outlined in the audit committee charter that is reviewed annually to ensure its relevance. In accordance with the Treasury Regulations and , the audit committee has been constituted to ensure its independence. All members and the chairperson are outside the public services arena. The composition of the audit committee members is such that all Treasury regulations and audit committee charter requirements are met in terms of the financial and legal literacy and the independence of the committee. The chairperson of the audit committee reports on its activities to the national executive committee on a regular basis. All members give a declaration at each audit committee meeting of any personal or financial interests that may conflict with their duties in this regard. The audit committee convenes regularly and is attended by external auditors, the Chief Executive Officer, Chief Financial Officer, the Head of Internal Audit and relevant corporate officials. For the period under review, the audit committee has fulfilled all the requirements in terms of its responsibilities and functions, as per the audit committee charter, the PFMA and Treasury regulations. Five meetings were held during 2014/15 as per the following dates: Member Record of attendance 22 May July September January March 2015 Mr T Zakuza - chairperson Ms OM Matloa - member Ms P Ndumo - member Mr N Mhlongo - member Adv J Ralefatane - member Performance management and remuneration panel A performance management and remuneration panel is an advisory body established by the NEC in December 2007 to have an oversight over the implementation of performance management system, policy and procedures, as well as the remuneration policies and practices of SALGA, including the following: Review and ensure the proper application of organisational performance management policy and procedures, remuneration philosophies, strategies and other policies aligned to the approved organisational strategy and objectives of SALGA; The panel is empowered to consider and make recommendations to the NEC on all matters relating to the performance management and remuneration of SALGA; and Policy frameworks and policy decisions taken by the panel are binding to all administrative structures of SALGA. The panel comprises members who are external professionals from the private sector and members of the NEC of SALGA. It functions independently of the management structures within SALGA and endeavours to remain and preserve its objectivity at all times. 36

37 Composition of the committee The committee is comprised of nine members, including four NEC members elected by the NEC and six independent members from the private sector. The Chief Executive Officer of SALGA sits on the panel in an ex officio capacity to present recommendations to the panel. The committee is comprised of the following members: Committee member Background Meeting dates: 2014/15 05 June March 2015 Cllr Thabo Manyoni SALGA National Chairperson Cllr Nombulelo Hermans Cllr Nomakhosazana Meth Cllr Speedy Mashilo Mr Chose Choeu Ms Elizabeth Dhlamini-Kumalo Dr Fazel Randera Ms Laura Machaba-Abiodun Mr William Huma SALGA Deputy Chairperson (NEC member) SALGA Eastern Cape Provincial Chairperson (NEC member) Chairperson of the HR development and collective bargaining working group (NEC member) Committee chairperson Committee member Committee member Committee member Committee member Evolving process and role of the panel The work of the panel is governed by the terms of reference that outline its duties and authority. The panel makes input towards the SALGA priorities, assisting the organisation in improving corporate excellence and the achievement of effective and efficient administration. The role of the panel includes, amongst others, contribution and making direct input in the following: Overall review of policies Regarding policy review processes, the panel is empowered to: Conduct regular reviews, of the performance management policy and procedure and application framework at SALGA, to ensure its relevance and proper application; Conduct regular reviews, as necessary, of the SALGA remuneration philosophy, policy and detailed structure, in the context of salary reviews and structures. This includes checking on the consistency of job evaluation and the relationship between role size and actual pay levels; and Regular reviews of the SALGA strategy (as updated from time to time) and related annual performance plan, including the impact on other related government strategies, so as to ensure congruence with the organisational performance plans. Performance The panel has reviewed and signed off the performance scorecards of the CEO and senior executive levels and subsequently submitted these for approval by the NEC. The panel oversees the performance assessment process of the CEO and monitors its execution in a process that ensures coaching and aligning of his performance with the organisational strategy. 37

38 The committee directs the performance assessment of the CEO by reviewing reports and evidence relating to all of the CEO s key performance areas and related KPIs, through direct engagements of coaching and reviews in intensive sessions, which are held quarterly. In all cases, the panel assesses any requests for deviation and makes its recommendations regarding these to the NEC. Remuneration The panel conducts an annual review of all salary adjustments and the overall increase to budget and makes recommendations to the NEC regarding the final outcomes thereof. In so doing, the panel considers the integrity of the remuneration policy and framework, and monitors the application thereof. The Panel reviews all annual performance bonus recommendations and calculations, as well as salary levels for all roles, and submits its final recommendations for consideration by the NEC. In assessing all remuneration cases, the panel considers related factors including the following: Organisational affordability; Overall organisational performance; Managing of anomalies and requests for interim increases; and Consistency of adherence to approved policy and objective job evaluation. Employee benefits The panel assisted in the shaping of the employee benefits offering that was implemented in SALGA in April The panel members shared various best practice ideas to help guide the final proposal and guided the benchmark that was executed to ensure SALGA s bouquet of benefits compare well with other leading organisations. Benefits that were introduced include: A pension fund with monthly employer contributions; A medical aid benefit with benchmarked employer contribution; An attractive group risk cover benefit; and Funeral cover. Panel oversight, process, and progress 38 The panel has made an enormous contribution towards the thorough inculcation of the institutionalisation of the individual performance management in an effort to advance effective and efficient administration towards the consolidation of SALGA as a centre of corporate excellence. Excellent progress has been achieved both on performance management and remuneration matters within the organisation. The panel has conducted a range of oversight activities and has made various decisions during the period under review. Several factors relating to organisational development must be recognised including, amongst others, the following: The panel has successfully contributed to the internalisation of performance management in the organisation; SALGA has maintained high performance outcomes in 2012/13 and 2013/14, thereby resulting in the organisation achieving a clean audit outcome from the Auditor-General and performance rewards being awarded to eligible employees, in recognition of the enhanced organisational performance improvement; The panel has contributed significantly towards the approval of an employee service benefits offering implemented in April 2014; Good progress has been made in revising SALGA s remuneration policy and ensuring that employees are remunerated fairly in accordance with an established benchmarked salary framework for SALGA; and Ongoing support and coaching by the panel is appreciated to ensure the firm establishment of SALGA as a centre of excellence.

39 2.5 SALGA management As with all public sector institutions, the political governance structures are supported by an administration. In the case of SALGA, there are both the established national administration as well as nine provincial administrations. Support is not only provided on logistics and the convening of meetings, but also at a technical level. Support is provided to the governance structures to ensure that information and data is collected and consolidated and that proper reports are tabled for consideration at meetings. Technical support is provided to add value to the quality of reports tabled for consideration, by ensuring that the information and data generated by the various governance structures is properly packaged and analysed. In addition, the administration is to ensure that reports and recommendations are appropriately placed in context by considering all legal, financial, human resources and other implications. Recommendations are required to be clearly outlined for informed decision-making. The administration is also a generator of reports and recommendations for consideration by SALGA s governance structures. Therefore, it must facilitate the processing of reports through all SALGA structures, to ensure full and broad participation by the organisation in the decisionmaking process. Below is SALGA management both at national and provincial level: Management team at SALGA national: Name Designation Directorate Xolile George Chief Executive Officer Office of the CEO Seana Nkhahle Executive Manager Office of the CEO Nceba Mqoqi Chief Financial Officer Finance and Coporate Services Lorette Tredoux Executive Director Governance, IGR and International Relations Rio Nolutshungu Executive Director Municipal Institutional Development Jean De La Harpe Executive Director Municipal Infrastructure Services Antonette Richardson Acting Executive Director Corporate Strategy and Research Phila Xusa (resigned) Executive Director Economic Development and Management Planning Marx Mapuriwa Acting Executive Director Economic Development and Management Planning Mandu Mallane Acting Executive Director Community Development Simphiwe Dzengwa Executive Director Municipal Finance Management team for SALGA provincial offices: Name Designation Province Gcinikhaya Mpumza Provincial Executive Officer SALGA Eastern Cape Zwe Ndala (until Feb 2015) Acting Provincial Executive Officer SALGA Free State Zanoxolo Futwa Provincial Executive Officer SALGA Free State Lucky Leseane Provincial Executive Officer SALGA Gauteng Sabelo Gwala Provincial Executive Officer SALGA KwaZulu Natal Thapelo Matlala Provincial Executive Officer SALGA Limpopo Gugu Langa Provincial Executive Officer SALGA Mpumalanga Modibedi Mongwe Provincial Executive Officer SALGA Northern Cape Nancy Ngwenya (until Feb 2015) Provincial Executive Officer SALGA North West Sam Makhubu Provincial Executive Officer SALGA North West Khalil Mullagie Provincial Executive Officer SALGA Western Cape 39

40 5. SOCIAL RESPONSIBILITY Social responsibility is an ethical framework which suggests that an entity, be it an organisation or individual, has an obligation to act for the benefit of society at large. Social responsibility is a duty every individual has to perform so as to maintain a balance between the economy and its eco-systems. Organisational sustainability addresses the dynamic interactions among the economic, environmental and social impacts and interactions in the short, medium and long-term. SALGA strives to achieve this through the incorporation of ethical, transparent, responsible and accountable business practices into its operations, the institutional framework and strategies, decision-making, voluntary practices and organisation culture. The legacy of apartheid education policies has seriously fragmented education systems in poorer communities. Since 1994, education has been at the forefront of government s priorities. Research has demonstrated that children who participate in early childhood development (ECD) programmes are better equipped socially, emotionally and intellectually. Yet only 43% of children under the age of five are exposed to an ECD programme. As a result, the NDA has identified ECD centres in various municipalities across the country that need support. Mindful of SALGA s 2010 National Member s Assembly resolution to support Mandela Day programmes in local government, SALGA entered into a partnership with the National Development Agency (NDA) of the National Department of Social Development in a campaign aimed at improving ECD centres. In signing the memorandum of understanding with the NDA, SALGA was mindful of the fact that South Africa s achievement of the millennium development goals (MDGs), in as far as maternal and infant mortality is concerned, depended considerably on: Mothers and children accessing a healthcare programme pre- and post-natal; Children having assess to educational toys; and Children in ECD centres having access to clean water and a safe environment. As part of the Mandela Day celebrations on 18 July 2010, a significant step was made towards entrenching Mandela Day as a feature of local government when municipalities made a SALGA National Members Assembly (SALGA NMA: 2010) resolution to support Mandela Day. The aim of the day is for everyone to make a difference by dedicating their time to doing something positive, wherever they live. As an association mandated by the constitution to represent municipalities, SALGA s role is not only to ensure that it participates in Mandela Day but also encourages and assists all municipalities to have holistic and integrated Mandela Day programmes as part of their existing community development and engagement programme. Therefore Mandela Day responses cannot be viewed in isolation of legislation governing social development and municipalities. Thus far; SALGA ensures the following: Guidelines to assist municipalities: In partnership with the Nelson Mandela Foundation and 46664, SALGA annually disseminates SALGA guidelines for local government participation in the Nelson Mandela Day. In addition, national and provincial circulars are sent to municipalities; Mandela Day activities: Annually, in partnership with municipalities, national and provincial offices embark on Mandela Day activities. These activities have largely focused on the elderly and children; and In 2014/15 SALGA, in partnership with the National Development Agency (NDA) of the National Department of Social Development, agreed on a campaign entitled SALGA-NDA Adopt-an-ECD-centre. The campaign aimed at improving ECD centres and it was rolled out in all provinces. 40

41 Below is a list of all the centres that SALGA adopted in all the nine provinces in each province: SALGA OFFICE National Eastern Cape Free State Gauteng KwaZulu-Natal Limpopo Mpumalanga Northern Cape North West Western Cape EARLY CHILDHOOD CENTRE Ebenhezer Early Childhood Development Centre Zwelodumo Early Childhood Development Centre TJ Teleka Early Childhood Development Centre Ithemba Labantwana Early Childhood Development Centre Letty Mkhize Crèche Ditlokwe Early Childhood Development Siyacathula Early Childhood Development Centre Kagisho Early Childhood Development Centre Itukise Early Childhood Development Centre 1. Khanyolwethu Educare 2. Umzomhle Educare 3. Bongani Educare 4. Masizahe Educare 41

42 42

43 PART C: PERFORMANCE INFORMATION 43

44 1. INTRODUCTION SALGA s strategic goals are the focus around which the organisation delivers long-term results. They are the focal point around which resources and efforts of the organisation are harnessed and galvanised towards a common purpose. SALGA recognises that it cannot achieve these goals on its own, and that delivery of its mandate depends on effective intergovernmental relations and dynamic partnerships and stakeholder engagement. Through these relationships and its strategic goals, SALGA will drive service delivery, transformation, growth and development in the sector as a whole. SALGA has identified seven strategic goals: Accessible, equitable and sustainable municipal services delivered by local government; Safe and healthy environment and communities; Planning and economic development at local level; Effective, responsible and accountable local government for communities; Human capital development in local government; Financially and organisationally capacitated municipalities; and Effective and efficient administration. In order to achieve these goals in the long-term, SALGA has identified a number of key performance indicators (KPIs) that will allow the organisation to measure its progress towards fulfilling its mandate. SALGA made excellent progress in meeting its KPIs during the year under review, achieving a 98% success rate through attaining 84 of its 86 KPIs. This means that only two KPIs were not achieved one in the first strategic goal and one in the third strategic goal. 2. PREDETERMINED OBJECTIVES The Auditor-General of South Africa currently performs the necessary audit procedures on the performance information to provide reasonable assurance in the form of an audit conclusion. The audit conclusion on the performance against predetermined objectives is included in the report to management, with material findings being reported under the predetermined objectives heading in the Report on other legal and regulatory requirements section of the auditor s report. Refer to page 158 of the report of the Auditor-General, Part E: Annual Financial information. The SALGA annual report was audited by the Auditor-General. The audit process entailed sampling of performance targets for audit. The sampling varies from one year to another. For 2014/15, the Auditor-General selected goals 1, 2, 4 and 7 as the sample for the performance audit. These goals represent the following portfolios respectively: Municipal infrastructure services; Community development; Governance and intergovernmental relations; and Corporate governance and finance and corporate services. The four selected goals were audited in-depth inclusive of all the KPIs and targets that comprise these goals. The performance information 2014/15 reflects on SALGA s performance and achievements in relation to the seven organisational goals, 69 targets and 86 key performance indicators (KPIs) and associated performance targets, as per the approved SALGA Annual Performance Plan 2014/15. 44

45 This past year brought a significant number of challenges and achievements. The organisation entered the year with a defined vision to promote the interest of member municipalities, focusing primarily on three apex priority areas: To review the legislative and policy framework within which municipalities operate; To review the fiscal and financial management framework of municipalities; and To build municipal capacity. Much progress has been made in the delivery of the SALGA s mandate and goals. 2.1 Highlights of Performance per SALGA Mandate Lobby, advocate and represent municipalities SALGA s members appreciated the increased effectiveness and efficiency of SALGA s support and representation of municipalities in intergovernmental structures, including the NCOP. The designation of the part-time representatives to the NCOP improved the visibility of SALGA in the NCOP and provided consistency in terms of representation, advocating and lobbying for the interests of local government. At the strategic planning session of the NCOP and the session of committees held in August and September 2014, the part-time representatives were a constant voice, advocating for a review of legislation impacting negatively on local government. NCOP has since agreed to address this matter and has called on SALGA to provide detailed information on legislation that impacts negatively on local government. As the NCOP was newly constituted in 2014, this represents significant progress in building relationships with this key institution to address the constraints hampering local government s performance SALGA lobbied at the 2014 budget forum for R towards a municipal demarcation transition grant. The grant is to subsidise additional institutional and administrative costs arising from boundary changes to take effect subsequent to the elections of Subsequent to the budget forum, CoGTA has put forward further demarcation proposals to the Municipal Demarcation Board (MDB) that will address the socalled non-financially viable municipalities. More work has to be undertaken to lobby for further financial and technical support for these new municipalities. The infrastructure grant review continues to review ways to maximise existing resources via reforms to capital grants to municipalities, rather than seeking solutions that require additional funds or significant reforms to operating or capacity building grants. This collaborative effort between the National Treasury, the Department of Cooperative Governance (DCoG), the Financial and Fiscal Commission (FFC), the Department of Planning Monitoring and Evaluation (DPME) and SALGA engaged all relevant stakeholders at national (primarily sector departments) and local government levels to ensure full consultation. Through participation in the infrastructure grant review process, SALGA ensured that the issue of renewal (refurbishment, rehabilitation and overall asset management) was included in the scope of the review. The review recognised that: The current grant system s emphasis on new infrastructure has been at the expense of the sustainable investment in existing infrastructure; An unintended impact of the emphasis on expanding infrastructure networks has been the failure to sufficiently maintain and renew existing municipal infrastructure. Increasingly this has resulted in service failure; and Asset management practices over the life cycle of grant funded assets need to be incentivised and enforced so that citizens can rely on functional municipal infrastructure without electricity blackouts, potholes or taps running dry. The review recommended that the conditions of the grant system be amended so that renewal can be funded from grants. This will of course have a positive financial impact on the sustainability of municipal infrastructure. 45

46 2.1.2 Employer role SALGA continues to build on its strengths as an effective employer organisation and in the day to day provision of advisory services to municipalities. In the recent past there has been increased visibility in the role played by SALGA in representing municipalities in dispute resolution and misconduct cases. A number of cases were recorded during the year under review, including conciliation, litigation and arbitration. Effective legal representation by SALGA resulted in the long standing wage curve dispute being finalised by the Labour Appeal Court in favour of affected municipalities. The same can be said of advice provided to municipalities on a range of labour relations and human resource matters. Below is a table on representation on different matters: Province Number of municipalities represented Disciplinary hearings and grievances Conciliations Arbitrations Eastern Cape Free State Gauteng SALGA Gauteng due to available capacity doesn t represent municipalities in Conciliations and Arbitrations KZN Limpopo Mpumalanga Northern Cape North West Western Cape Total The impact of this favorable ruling is that municipalities will be saved from retrospective wage curve back payment on the one hand and, on the other, municipalities will be enabled to focus their efforts on concluding outstanding job evaluation and wage curve implementation. Two hundred and seventy four municipal employees across provinces were trained on TASK job evaluation (JE). The trained employees will serve in the various JE unit structures that will finalise JE in all municipalities Building leadership and technical capacity of the sector SALGA has worked with the Department of Science and Technology (DST) and the Council for Scientific and Industrial Research (CSIR) in building technical skills in the waste management sector through the development of formal qualifications on waste management. The sector did not have a dedicated qualification and as a result, two postgraduate degrees on waste management were developed: the BSc Hons (Waste Management) through the University of North West and MSc (Waste Management) through the University of Natal. The first intake of students was in 2015 for the BSc Hons and the MSc will commence with the enrolment in 2016 at the University of Natal. The knowledge sharing and advocacy in renewable energy and energy efficient innovations activities have been undertaken mainly in the form of workshops. Most of these knowledge sharing workshops were structured according to the priorities identified in the SALGA renewable energy and energy efficient (RE EE) strategy for local government, and in particular on: Institutionalisation of the energy mandate (energy strategies); Municipal own energy efficiency; and Energy access for all. 46

47 Around 120 municipalities participated in different energy efficiency and knowledge sharing innovations on energy efficiency and renewable energy. The roll out of the small towns regeneration training programme achieved the following: Created an awareness among municipal officials on why and how small town regeneration should be prioritised as vital spaces for regional and local economic development; Provided a platform for economic development practitioners to share international and national good practice on implementing sustainable and meaningful small town regeneration approaches; Contextualised small town regeneration as a systematic and holistic approach covering areas such as governance, infrastructure provision and maintenance and financial management, which must find expression in the overall integrated development plan of municipalities; and Equipped participants with a practical approach of identifying stakeholders, defining their roles and meaningful participation. In March 2015, 51 local leaders from across the country were given sponsored entry to Development & Management of Local Government, an NQF level 6 programme executed by WITS. The launch and establishment of the SALGA Centre for Leadership and Governance (SCLG) is another milestone for SALGA. The SCLG will develop municipal leaders who will drive a development agenda through active reflection and thought leadership in the sector. The medium- to long-term implementation of coherent learning and knowledge programmes through the SCLG should result in: Improved audit reports from the Auditor-General; Improved strategic and policy choices or trade-offs on developmental objectives and service provision; Enhanced sustainability and evidence based decision-making at a local level; and Improved decision-making at all spheres of government as local leaders take up national and provincial leadership positions. The SCLG has secured over R14million in funding from the LGSETA to develop leadership capacity in the areas of governance, media and stakeholder engagement and ethics. The Centre is in the process of concluding peer learning agreements with its counterparts in Malawi and Namibia toward building the capacity of local government associations in the SADC Region. SCLG strategic interventions have seen strategic inputs made to the LGSETA Strategic Planning, the Buffalo City Metropolitan Municipality Mayoral Lekogtla and Nelson Mandela Bay Metropolitan Municipality Mayoral Induction. SALGA also facilitated training (portfolio based) and leadership development programmes for councillors and senior municipal officials, benefiting officials in the following: Portfolio based councillor development programme; Senior manager induction programme; and Leadership development workshops. 47

48 Below is a breakdown of all senior management induction and councillor induction programmes conducted: Province Councillor induction programme Councillor development programme Senior management induction programme Leadership development workshop / / /15 Eastern Cape Free State KwaZulu-Natal Gauteng Limpopo Mpumalanga Northern Cape North West Western Cape Total Trained Other capacity building programmes conducted: Province Local democracy and local democracy and governance learning programme (LODLOG) Executive municipal leadership development programme (EMLDP) Eastern Cape 3 82 Free State - 63 Kwa-Zulu-Natal Gauteng Limpopo Mpumalanga 2 71 Northern Cape North West Western Cape - - Total trained Support and advisory role SALGA developed and launched the multidisciplinary municipal audit support programme (MASP) which is based on four pillars: leadership, governance, financial management and institutional capacity. SALGA launched MASP to assist all municipalities to maintain good audit outcomes (unqualified with no findings or with findings) and to improve poor audit outcomes (disclaimer, adverse, qualified and audits not finalised) by focusing on the four pillars. The MASP is placing particular emphasis on those municipalities with adverse/disclaimer opinions as well as those municipalities whose audits were not finalised by the legislated deadline these are called red zone municipalities. For the year under review, 22 municipalities in the red zone were assisted of which nine have improved and migrated from the red zone. Transversal support in the form of workshops for councillor capacity building, revenue management/enhancement, internal audit support and audit action plan guidance was provided. 48

49 In addition, two transversal audit issues were addressed in Limpopo through SALGA s efforts and impacted positively on audit outcomes of all municipalities in the province: SALGA wage curve agreement (the national office facilitated the resolution of this matter); and Provincial roads matter (Limpopo provincial office facilitated the resolution of this matter). SALGA also finalised an agreement with research institute PARI to perform research into the red zone municipalities. The number of red zone municipalities has reduced from 79 in 2012/13 to 60 in 2013/14. Water services master classes were conducted during the year. These dynamic, practical and interactive sessions, which included municipal and sector leaders, demonstrated the value of improved sharing of municipal data and aligned benchmarks and targets across the range of MBI water services performance improvement efforts. As part of a wider package of interventions, SALGA is undertaking to support municipalities with mining activities. As a result, guidelines were developed to assist municipalities to improve their relationship with mining houses in the delivery of social/ rental housing. The guidelines, which plainly set out the legislation and related responsibilities of the mining companies towards the municipality and community, will serve to strengthen the position of municipalities so that they engage more firmly with mining companies and leverage private sector resources for the achievement of development priorities as set out in the integrated development plan (IDP). As part of the BZK programme to improve the capacity of municipalities to deliver social and rental housing, SALGA undertook a number of projects in 2014/15, targeting the 13 municipalities which have been selected for the delivery of social housing. A benchmark exercise was undertaken, which assisted those municipalities to assess their readiness for implementation, as well as the strengths and weaknesses. The workshops facilitated real information sharing and peer learning for social housing officials. For three metro municipalities, the support was taken one step further by providing hands-on assistance. The technical assistance to ethekwini, Nelson Mandela and Mangaung metros differed in that support to one was related to policy, another to strategy, and a third to project implementation. The interventions in Nelson Mandela Bay and Mangaung have provided the necessary technical assistance and momentum to get the municipal rental housing strategy and policy off the ground. In ethekwini, SALGA convened a team of experts (from NASHO, HDA and independent social housing experts) to visit a particular site for a planned social housing project in Warwick Junction in the city centre. The interaction enabled metro rental housing officials to gain better insight into some of the practical implementation issues related to the project: building design, target beneficiaries, placement of building on site, integration into surrounding community, and property management. The overall impact of these activities is that these municipalities are strengthened to deliver social housing, specifically as a result of technical assistance and advice provided by SALGA and peer learning forums orchestrated by SALGA. On electricity matters, SALGA engaged with Eskom concerning a framework agreement which would cover all municipalities in whose area Eskom reticulates electricity, and serve as a measure towards preparing for service delivery agreements. However, instead of a framework, SALGA and Eskom agreed to enter into a memorandum of understanding (MoU) to address the various industry and operational challenges within the sector. An MoU was signed on 30 October 2014 with the purpose of engaging in a process of active partnering to establish a cooperative and collaborative working relationship between Eskom, SALGA (and ultimately, municipalities) to work towards the long-term sustainability of electricity reticulation. The MoU highlights electricity distribution industry issues in general, and specific operational challenges impacting delivery of electricity to end users. Performance Management Support was also provided to municipalities. The overall objective of the Municipal PMS Support Programme is to provide hands-on support & assistance to capacitate municipalities and enable them to develop and implement Performance Management Systems (PMS). Various support initiatives have been implemented through: Assessment of PMS functionality in municipalities to measure the level of compliance with PMS legislation & regulations; PMS support plans based on the AG s Findings, PMS Assessments, Human Capital Profiling & MASP; 49

50 Workshops held to create awareness, deepen knowledge and understanding for effective implementation of PMS; Review of SDBIPs and ensure that performance agreements/plans of the municipal manager and senior managers are aligned to measurable objectives as approved in the SDBIPs and the Budgets; Support municipalities to develop and implement employee performance monitoring and review systems; Development and review of PMS policies/frameworks; Development and recommendation of processes & tools of cascading PMS to employees below senior managers; Training of municipal PMS role players (cllrs and officials) to capacitate them with PMS capabilities. Table below shows the number of municipalities supported: Province Total number of municipalities Number of municipalities supported Eastern Cape Free State Gauteng 12 7 KwaZulu-Natal Limpopo Mpumalanga Northern Cape North West 32 9 Western Cape 30 7 Total Some municiplities have been supported more than once on different initiatives Strategic profiling SALGA s enhanced profiling of local government in continental and global forums and platforms, as well as strengthening local governance and decentralisation globally, has gained increasing traction during the period under review. SALGA also played a critical role in re-unifying the United Cities and Local Governments of Africa (UCLGA) and is currently leading the Southern African chapter of the organisation, particularly to strengthen local democracy in our neighbouring countries and support the establishment of local government associations in our region. Our role in the UCLG and Commonwealth Local Government Forum (CLGF), among others, has also been entrenched. The pursuit of democratic local government in our neighbouring countries and abroad is a key mandate of the 2011 National Conference Knowledge and information sharing To continue serving as the main hub of local government knowledge and intelligence, SALGA developed a knowledge hub which aims to provide users with current and local government knowledge. The municipal barometer is also up and running. The barometer was uploaded with time series data on demographic trends, economic growth, service delivery and municipal finance data. In the sphere of knowledge exchange and learning events, SALGA facilitated 20 learning events during the financial year. 50

51 The table and chart below provide a broad overview of the audited organisational performance over the 12-month period from 1 April 2014 to 31 March Table 1: 2014/15 annual performance in terms of the six SALGA mandates Mandate Total Achieved Percent (%) Not achieved Percent (%) Lobby, advocate and represent Employer body Capacity building Support and advice Strategic profiling Knowledge and information sharing Other (internally focused) Total Table 2: 2014/15 annual performance in terms of the three APEX priorities APEX priority Total Achieved Percent (%) Not achieved Percent (%) AP1 - Review of the legislative and policy framework AP 2 - Review of the fiscal and financial management framework AP 3 - Improved municipal capacity Total APEX priorities Other Total Table 3: 2014/15 Annual performance in terms of the seven strategic goals KPIs Achieved Percent Not Percent Strategic goal (%) achieved (%) 1. Local government delivering equitable and sustainable services Safe and healthy environment and communities Planning and socio-economic development at local government level Effective, responsive and accountable local governance to communities Human capital development in local government Financially and organisationally capacitated municipalities Externally focused goals Effective and efficient administration Total KPIs iro 2014/15 SALGA annual performance plan

52 2.2 Highlights of performance per SALGA strategic goals Goal 1: Local government delivering equitable and sustainable services The infrastructure grant review continues to review ways to maximise existing resources via reforms to capital grants to municipalities, rather than seeking solutions that require additional funds or significant reforms to operating or capacity building grants. This is a collaborative effort between the National Treasury, the Department of Cooperative Governance (DCoG), the Financial and Fiscal Commission (FFC), the Department of Planning Monitoring and Evaluation (DPME) and relevant stakeholders at national (primarily sector departments) and local government levels. A decision was made to introduce variety in the type of grants going to different municipalities. This will impact on the longterm evolution of the grant system by institutionalising a differentiated approach between metropolitan or non-metropolitan municipalities, as well as the different circumstances or performance of rural and urban municipalities and various categories in between. Over time, even greater discretion will be given to high-performing municipalities, and reforms should move towards a single, loosely conditioned grant for urban cities. The review has defined numerous guiding principles as well as identified a number of reforms for immediate implementation in the 2015 MTEF. These include: Establishing a greater variety in the type of grants going to different municipalities; The merging of a single public transport grant for cities; and The merging of the municipal water infrastructure grant, water services operating subsidy, and rural households infrastructure grant. Recommendations for reforms Merge the urban settlements development grant for metros, the municipal infrastructure grant for secondary cities and the integrated national electrification programme for both into a consolidated integrated urban development grant (IUDG) for urban municipalities. This will allow cities greater flexibility to meet challenges that require integrated responses; Base the public transport infrastructure grant on formulae and integrating it with the operational subsidy grant for greater flexibility in public transport grants; and Consolidate various overlapping water and sanitation grants into one grant. This will reduce administrative overlap at national and municipal levels. Through participation in the infrastructure grant review process, SALGA ensured that the issue of renewal (refurbishment, rehabilitation and overall asset management) was included in the scope of the review. There are more than 100 municipalities in the towns and small local municipalities category (mostly in the Free State, Northern Cape and Western Cape) that do not feature in SIPs or other priority programmes and receive low infrastructure grant allocations dues to relatively low backlogs. Sustainable asset management, particular of older infrastructure in established settlements, is a major challenge for such areas as well as financing large lumpy infrastructure investments. Conditions for grants to these will be adapted so that grant funds can be used for the renewal of existing assets, rather than limited to the creation of new infrastructure, as is currently the case. Renewal funding will be conditional on credible asset management maintenance plans and proof of proper maintenance. Achievements 52 Water, electricity and waste management services Water services master classes were conducted that demonstrated the value of sharing of municipal data. The master classes also aligned benchmarks and targets across the range of municipal benchmarking initiative (MBI) water services performance improving efforts;

53 Best practices in the delivery of water and sanitation was shared with KZN water services authorities; An action plan on the local government contribution towards the implementation of the national water resources strategy was developed; Funding for the development of a framework to define the role of local government in the catchment management agencies was secured from the Kingfisher programme (a joint South African-Dutch strategic initiative in water management); An action plan to mitigate water interruptions was developed with Rand Water and Gauteng municipalities; Support was provided to Mopani to develop an action plan to address various delivery mechanisms, understand cost structures and separate bulk and reticulation infrastructure; The transfer of technical skills from Umgeni to Ugu was facilitated; A memorandum of agreement between SALGA and Rand Water was signed, in terms of which a water conservation/water demand management (WC/WDM) fund was established; A contract for water conservation and demand management performance was developed and launched. This was a partnership with the Strategic Water Partnership Network (SWPN) and GIZ; Comprehensive comments on their bulk water tariffs was developed and submitted to all water boards; and The municipal water services benchmarking report and the water services league was launched. Human settlements Guidelines were developed to help municipalities improve their relations with mining houses in the delivery of social/rental housing; A benchmark exercise for the delivery of social and rental housing was undertaken with 13 municipalities, as part of the BZK programme; As part of the benchmark exercise, hands-on assistance was provided to ethekwini, Nelson Mandela and Mangaung metros on policy, strategy and project implementation; SALGA s national draft policy on backyard rental was supported by the Human Settlements Technical Ministers and Members of Executive Councils Meeting (MINMEC); SALGA lobbied the National Department of Human Settlements to allow USDG funds to be used to provide bulk and connector services for informal settlement upgrading projects and backyard rental upgrading schemes; SALGA conducted research on the Northern Cape s district accreditation model. The finding is that the model ensures better service for communities in rural areas in low-capacity local municipalities; SALGA s advocacy and lobbying on behalf of metros with regard to the municipal human settlements capacity grant (MHSCG) resulted in this grant not being entirely lost to the metros, although it was significantly delayed and amended. Continued SALGA pressure also resulted in the grant being disbursed before the end of the financial year; Three knowledge-sharing workshops on the difficult and complicated issues of evictions and illegal occupation of land and buildings were held in KZN, Western Cape and Eastern Cape. Fifty five municipalities participated in the workshops, which were held in collaboration with the Socio-Economic Rights Institute of South Africa (SERI); and SALGA engaged with the National Department of Human Settlements (NHNR) on its plan to place a moratorium on the use of municipal waiting lists for the allocation of completed houses, and to phase out the municipal housing waiting lists. This would have had a detrimental effect on local service delivery. As a result of SALGA s representations, it was decided that further consultation was needed to address the issues involved. 53

54 Roads and transport Municipalities were engaged on their role in promoting transport, including roads; A position paper regarding the transfer of freight from road to rail was discussed with stakeholders in the transport sector, including municipalities, and tabled at SALGA national executive committee (NEC); SALGA shaped the direction of the review of the Gauteng e-toll system; Together with other stakeholders, SALGA developed the latest national road traffic law enforcement code; and In partnership with the Department of Transport, SALGA recruited, placed and trained transport planning interns with selected municipalities. Waste management Knowledge-sharing sessions were held in all provinces to assist municipalities to learn from each other on various initiatives for attaining a cleaner environment in their areas; SALGA assisted Johannesburg and Tshwane with a programme to minimise food waste. The project was done in collaboration with the Department of Trade and Industry (the dti) and the United Nations Environment Programme (UNEP); A web-based tool to guide municipalities in choosing the relevant alternative technology for turning waste into energy was developed by SALGA in collaboration with the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ), GreenCape, the Department of Environmental Affairs (DEA) and the South African National Energy Development Institute (SANEDI). Together with the Department of Science and Technology (DST) and the Council for Scientific and Industrial Research (CSIR), SALGA has achieved the introduction of two postgraduate degrees specifically on waste management through the Universities of North West and Natal. The first intake of BSc Hons students was in 2015, while an MSc will commence in 2016; A peer sharing session was conducted for municipalities based on the differentiated approach for waste management support. Support was also provided by the DEA; The municipalities of Gamagara (Northern Cape), Ratlou (North West) and Ndwedwe (KZN) were assisted with the development of integrated waste management plans; and A rigorous integrated operational and partial capital costing model was developed for municipal services, including storm water, roads and municipal health services. The costing will be used to engage with National Treasury, among others, to lobby for funding instruments. Electricity An MoU was signed with Eskom. Its purpose is to establish a cooperative and collaborative working relationship between Eskom, SALGA (ultimately municipalities) to achieve the long-term sustainability of electricity reticulation. The partnership will address operational challenges impacting delivery of electricity to end users and distribution issues in general; A strategic relationship between SALGA and the Intensive User Group of Southern Africa (EIUG) has resulted in access to various research projects in the electricity and energy sector; SALGA represented municipalities and advocated municipal issues regarding cable theft at the 2 nd annual cable theft summit; and Provinces were supported in the implementation of the differentiated approach through the credit control and debt collection policy and electricity local regulation guidelines. 54

55 Below are detailed performance results as per the key performance indicators in the 2014/15 annual performance plan: Goal Target number KPI number Outcome 2014/ /15 KPI 2014/15 target Annual result 2014/ Local government infrastructure grant review addresses bulk and municipal infrastructure funding (including housing and roads) Municipalities supported on institutional arrangements for sustainable service provision Engage targeted stakeholders on the OLG position on bulk and municipal infrastructure funding (including housing and roads) Facilitate support to municipalities for sustainable service provision (trading services) Targeted stakeholders engaged on bulk and municipal infrastructure funding through local government infrastructure grant review by 31 March Support to peer sharing and learning for sustainable municipal services provision by 31 March Targeted stakeholders were engaged on bulk and municipal infrastructure funding through local government infrastructure grant review by 31 March SALGA tabled comments and recommendations to the budget forum on the review of the local government infrastructure grant. Support to peer sharing and learning for sustainable municipal services provision was provided by 31 March The key focus was on issues of water, waste and electricity. Variance (both over and under achieved ) Not applicable Not applicable Reason for variance Performance status Not applicable Achieved Not applicable Achieved 55

56 Goal Target number KPI number Outcome 2014/ /15 KPI 2014/15 target Annual result 2014/ Municipalities supported to address social housing and backyard interventions Facilitate support to municipalities in affordable rental units Facilitate support on delivery of social housing including funding approach to support backyarder interventions by 31 March 2015 Support was facilitated on delivery of social housing including funding approach to support backyarder interventions by 31 March Guidelines were developed to assist municipalities to improve their relationship with mining houses in the delivery of social/ rental housing. SALGA lobbied the National Department of Human Settlements to amend the USDG policy to explicitly allow USDG funds to be used to provide bulk and connector services as well as internal bulk. Consultations were also conducted in Mpumalanga and Western Cape provinces Research into cost of service provision including environmental management cost drivers Conduct research on the cost of service provision, including cost drivers for environmental management Research on the cost of service provision, including cost drivers for environment management conducted by 31 March 2015 A proposal to extend the USDG to additional local municipalities (secondary cities), reticulation services for informal settlement upgrading projects as well as backyard rental upgrading schemes was developed. Research on the cost of service provision, including cost drivers for environment management was conducted by 31 March 2015 Variance (both over and under achieved ) Not applicable Not applicable Reason for variance Performance status Not applicable Achieved Not applicable Achieved 56

57 Goal Target number KPI number Outcome 2014/ /15 KPI 2014/15 target Annual result 2014/ Implementation of framework agreement is monitored Support monitoring of framework agreement processes with Eskom Support provinces to monitor agreement processes with Eskom by 31 March 2015 SALGA entered into an agreement with Eskom towards addressing industry challenges, in the absence of the framework agreement. A memorandum of understanding was signed by the parties at the NEC lekgotla on October Campaign/s for cleaner environment address municipal priorities Knowledge sharing for cleaner environment Knowledge sharing for cleaner environment facilitated by 31 March 2015 Knowledge sharing for cleaner environment was facilitated in all nine provinces by 31 March OLG position on funding options for infrastructure renewal (refurbishment and replacement) taken into account in LG infrastructure grant review process Engage stakeholders on the OLG options for infrastructure renewal funding (refurbishment and replacement) Relevant stakeholders engaged on the funding options for infrastructure renewal by 31 March 2015 Relevant stakeholders (municipalities, National Treasury, CoGTA and FFC) were engaged through grant review process on the funding options for infrastructure renewal by 31 March 2015 Variance (both over and under achieved ) Under achieved Not applicable Not applicable Reason for variance Performance status Due to disagreements between SALGA and Eskom the memorandum of understanding (MoU) was only signed on 30 October 2014 which gave little time for provinces to monitor the implementation. Target is rolled over to the next financial year Not achieved Not applicable Achieved Not applicable Achieved 57

58 Goal Target number KPI number Outcome 2014/ /15 KPI 2014/15 target Annual result 2014/ Municipalities supported in their authority function for municipal services (incl. housing accreditation and transport) Support to regulatory (authority) function for municipal and infrastructure services (incl. housing and transport) Support facilitated on regulatory (authority) role for municipal infrastructure services including housing (accreditation) and transport by 31 March 2015 Support was facilitated on regulatory (authority) role for municipal infrastructure services including housing (accreditation) and transport by 31 March Roads and transport Consultations with municipalities were conducted in order to engage on the role of municipalities in promoting transport including roads in their organisational structures OLG position paper developed to prioritise use of rail for freight instead of roads OLG position paper developed to prioritise use of rail for freight instead of roads OLG position paper developed to prioritise use of rail for freight instead of roads by 31 March 2015 Human settlements Conducted research on the Northern Cape district accreditation model to understand how well the district model of accreditation worked, and to make recommendations on whether the same model should be rolled out in other provinces. Workshops were held in KZN, Eastern Cape, Gauteng and Northern Cape to share the findings and discuss its application in those provinces. An organised local government position paper to prioritise use of rail for freight instead of roads was developed and approved by the national executive committee of SALGA by 31 March 2015 after consultation with all stakeholders including municipalities in the transport sector Variance (both over and under achieved ) Not applicable Not applicable Reason for variance Performance status Not applicable Achieved Not applicable Achieved 58

59 2.2.2 Goal 2: Safe and healthy environment and communities A key priority for South Africa is the development of sustainable human settlements where social, health, economic and environmental factors are addressed in an integrated manner. Local government has a crucial role to play in this regard. Hence, there is need to focus on safe and healthy environments and communities. This goal encapsulates the various interventions that are implemented to build safe, healthy and environmentally-aware communities. It also incorporates a specific focus on eradicating poverty, inequality, marginalisation and xenophobia at a municipal level. Achievements Climate change SALGA partnered with the Department of Environmental Affairs (DEA) to develop and implement the local government support (LGS) strategy, aimed at establishing the status of performance of environmental management in local government, as well as articulating the barriers and challenges that impede good performance of environmental functions in municipalities. Fifteen municipalities were selected for immediate support and intervention. The choice was based on their location in ecologically sensitive areas and their limited capacity to deal with current environmental issues and threats; A local government support task team (LGSTT) was formed. In October 2014, the first local government support municipal workshop was convened in Ekhurhuleni. It was attended by the 15 municipalities and initiated a detailed profiling to establish the nature and range of challenges and develop intervention plans; and Key strategic outputs of the LGS strategy are: a legal protocol to define the range and scope of functions to be performed by municipalities; a costing framework to attempt to define the costs of performing such functions and provide indicative funding requirements; and a set of performance indicators to assist municipalities and other authorities to measure the progress of municipality in addressing environmental sustainability. A framework for specific climate change support to municipalities was developed by SALGA and distributed to provinces; and Climate change workshops were held with targeted municipalities in six provinces (Free State, Mpumalanga, Limpopo, North West and KwaZulu-Natal). Energy efficiency/renewable energy About 120 municipalities took part in knowledge-sharing activities on energy efficiency and renewable energy; A web platform ( was developed between SALGA and Sustainable Energy Africa (SEA) to disseminate information to municipalities on energy efficiency and renewable energy innovations; A common position on small scale embedded generation was approved by SALGA national executive committee. This provides a framework to ensure the safe and sustainable development of roof top panels and other embedded technologies; SALGA is providing comments on the National Energy Regulator of South Africa s (Nersa) consultation process to develop a set of rules on small scale embedded generation; SALGA moderated a session during the National Biogas Conference 2015 on energy generation from biogas in municipal waste water treatments plants and landfill with the objective of getting projects off the ground; and With support from GIZ, a biogas potential assessment tool has been developed and is being used by municipalities and 59

60 DoE to identity feasible projects in municipal waste water treatment plants. These projects will reduce the electricity consumption in the water works, resulting in more sustainable municipalities. With the aid of this tool, several municipalities have already assessed the biogas potential in their waste water treatment plants and identified feasible projects. Disaster management, migration and municipal health services SALGA partnered with the National Disaster Management Centre to build capacity among municipalities in disaster risk reduction. This included legislative requirements, how to declare disasters and how to access municipal disaster grants; SALGA signed a memorandum of understanding (MoU) with the International Organisation on Migration (IOM) to build capacity among municipalities in migration. The interventions will help municipalities in planning and managing migration; and The draft generic by-laws for municipal health services (MHS) were developed and circulated to provincial offices. Case studies on four MHS projects were documented for publication. Sports, libraries and cemeteries A libraries project was piloted with the National Library Services to provide computers to municipal libraries; A memorandum of understanding (MoU) with the South African Sport and Olympic Committee (SASCOC) was signed to provide support in the development of sport and recreation in municipalities; and SALGA facilitated workshops on integrating poverty eradication in municipal programmes. Transversal issues The outcomes report of the SALGA women s commission (SWC) national lekgotla was adopted and a working session for a draft programme of action was convened; A workshop for the development of guidelines on youth development for local government was convened with municipalities. The guidelines will provide clear actions and approaches to youth development for local government; SALGA convened the municipal dialogue on HIV and AIDS. Its purpose was: to present and reflect on SALGA s initiatives on mainstreaming HIV and AIDS in local government; to share experiences and understanding on the functioning of AIDS councils as a way of coordinating the fight against HIV and AIDS; and To present and discuss SALGA s proposal for strengthening local government response to HIV and AIDS. SALGA hosted the disability reference group round table meeting, attended by the Departments of Social Development (DSD) and Cooperative Governance and Traditional Affairs (CoGTA). As a result of the attendance of the national DSD, SALGA is now part of the reference group for the disability policy; Save the Children hosted an end-of-project workshop on mainstreaming the rights of children and development of action plans, which was attended by SALGA and pilot municipalities; and A national seminar was held to present the concept paper to define local government approach to providing services to older persons. 60

61 Below are detailed performance results as per the key performance indicators in the 2014/15 annual performance plan: Goal Target number KPI Number Outcome 2014/ /15 KPI 2014/15 target Annual result 2014/ Renewable energy and energy efficiency innovation and benefits thereof shared and promoted Environmental management and climate change strategies advocated and municipalities supported Improved local government capacity on disaster risk reduction Facilitate sharing and promotion of innovation in renewable energy and energy efficiency Targeted municipalities supported to participate in strategic environmental management and climate change initiatives Improved programming on disaster management and risk reduction Municipal sharing and advocacy in renewable energy and energy efficient innovations by 31 March 2015 Targeted municipalities supported to participate in strategic environment and climate change initiatives by 31 March 2015 Scenario-based capacity building programme developed for improved municipal planning for disasters by 31 March 2015 Municipal knowledge sharing and advocacy in renewable energy and energy efficient innovations activities have been undertaken mainly in the form of workshops by 31 March 2015 Targeted municipalities were supported to participate in strategic environment and climate change initiatives by 31 March A framework for climate change support to municipalities was developed with the intention of establishing criteria for selecting municipalities to be supported on climate change interventions through the roll out of the lets respond IDP toolkit and knowledge/ awareness raising workshops Scenario-based capacity building programme for disaster risk management was developed. Training workshops were conducted in all the provinces by 31 March 2015 Variance (both over and under achieved) Reason for variance Performance status Not applicable Not applicable Achieved.Not applicable Not applicable Achieved Not applicable Not applicable Achieved 61

62 Goal Target number KPI Number Outcome 2014/ /15 KPI 2014/15 target Annual result 2014/ Improved municipal planning on disaster risk reduction Improved capacity of local government in dealing with migration issues Stakeholder consensus on monitoring of disaster management and risk reduction practices Enhanced capacity of local government to deal with population migration Stakeholders lobbied on implementation of the M&E framework for municipal compliance to DRM requirements by 31 March 2015 Capacity building interventions facilitated in all provinces by 31 March 2015 Stakeholders were lobbied on the implementation of the monitoring and evaluation framework for municipal compliance to disaster risk management by 31 March 2015 Capacity building interventions were facilitated in all provinces by 31 March 2015 through a memorandum of understanding with the International Organisation on Migration (IOM) Clear position of local government on funding of health services Model for improved community facilities for local government piloted Local government position and funding model on municipal health tabled with stakeholders Model for improved community facilities for local government adopted and implemented Local government position and funding model for municipal health services tabled to relevant stakeholders by 31 March 2015 Model for improved community facilities piloted in all provinces by 31 March 2015 Training workshops were conducted in all the nine provinces. Local government s position on municipal health with inputs on the municipal funding model for municipal health services was developed and tabled at the National Municipal Health Manager s Forum and municipal health summit held on June 2014 Model for improved community facilities was piloted in all provinces by 31 March SALGA developed framework for cemeteries, sport and recreation and well as community libraries. These frameworks were piloted in provinces. An MoU with SASCOC was signed in order to pilot the sport and recreation framework Variance (both over and under achieved) Reason for variance Performance status Not applicable Not applicable Achieved Not applicable Not applicable Achieved Not applicable Not applicable Achieved Not applicable Not applicable Achieved 62

63 2.2.3 Goal 3: Planning and economic development at a local level Poorly developed municipalities continue to suffer from a lack of integrated planning and delivery by the different spheres and agencies of government, as well as the absence of focused programmes targeting economic development and job creation. There is therefore an urgency to address planning and economic development at a local level, as it will serve as a critical foundation for the development and viability of municipalities. This goal encapsulates the various planning and economic development initiatives that are implemented to build safer, healthier, and environmentally aware and active communities. It also incorporates a specific focus on eradicating poverty and inequality at a municipal level. SALGA s initiatives were mainly centred on three programme areas aimed at stimulating economic development and creating conditions conducive for investment attraction, job creation and strengthening the capacity of municipalities to execute their developmental mandate. EDP identified the regeneration of small towns, strengthening the capacity of economic development practitioners and capacitating municipal officials to implement the recently promulgated Spatial Planning and Land Use Management Act, 2013 (Act No. 16 of 2013) (SPLUMA) as the main areas of focus during the year. Achievements Small towns regeneration programme The SALGA training programme aims to influence municipalities to target small towns as entry points to bring about spatial transformation, stimulate economic growth, create employment and make optimum use of available services, which in most cases are underutilised. The emphasis was on creating a space for sharing issues and common concerns and creating opportunities for linkages in local government. The format of the training was reduced from five to two days to avoid municipal officials being away from their duties for too long; and 181 local economic development practitioners from 54 municipalities in all provinces were trained. Professional development programme (PDP) The PDP s objective is to develop focused, creative and motivated economic development practitioners. It addresses the challenges associated with governance and institutional arrangements, and promotes professional credibility and shared approaches by economic development practitioners. The course consists of six sessions delivered over eight days and spread over six months; and PDP training sessions were rolled out to 76 economic development planning practitioners from Eastern Cape, North West, Western Cape, and KwaZulu-Natal. Implications of the SPLUMA EDP conducted municipal capacity-building initiatives that included four sessions in the Eastern Cape, two joint sessions with municipalities and the South African cities network and influenced the content of the SPLUMA regulations that were gazetted in March 2013; SALGA also undertook a SPLUMA implementation readiness assessment and used the outcome of the assessment to lobby the Department of Rural Development and Land Reform to defer the implementation of the SPLUMA to a date not earlier than 1 July 2015, to enable municipalities to adequately prepare and factor the SPLUMA implications into their IDPs; and Municipalities were kept abreast of developments through two circulars that highlighted key actions with implications for municipalities. 63

64 Below are detailed performance results as per the key performance indicators in the 2014/15 annual performance plan: Goal Target number KPI number Outcome 2014/ /15 KPI 2014/15 target Annual result 2014/ Address gaps in capacity and skills to support municipalities on improving support to informal trading and co-ops as well as SMMEs Address gaps in capacity and skills to support municipalities on improving support to informal trading and co-ops as well as SMMEs Support municipalities on the development of LED strategies, SDF and regional approaches to LED line with the framework Provide a capacity programme for economic development practitioners Provide a capacity programme for economic development practitioners Sharing of information on economic development PDP implemented in KZN and EC by 31 March 2015 PDP developed for EDP practitioners by 30 June 2014 Convene a national conference on the EDP programme by 31 March 2015 The professional development programme (PDP) was implemented through training sessions held in the Eastern Cape and KwaZulu-Natal provinces by 31 March 2015 The PDP for EDPs was developed and implemented in Eastern Cape and KwaZulu-Natal by 30 June 2014 A conference concept note was developed with inputs from all provinces. Further, a round table discussion was held on the content of the conference by 31 March 2015 Variance (both over and under achieved) Not applicable Not applicable Under achieved Reason for variance Performance status Not applicable Achieved Not applicable Achieved The conference was scheduled to take place in March However, as the SALGA National Members Assembly was scheduled to take place at the same time, it was deemed appropriate to postpone the conference to the next financial year Not achieved 64

65 Goal Target number KPI number Outcome 2014/ /15 KPI 2014/15 target Annual result 2014/ Support municipalities on the development of LED strategies, SDF and regional approaches to LED line with the framework Improved local government planning capacity on poverty eradication approaches Improved profiling and monitoring and evaluation of poverty eradication approaches Improved knowledge and access to information on transversal issues Improved knowledge and access to information on transversal issues Sharing of information on economic development Municipal capacity building on integrated poverty eradication approaches facilitated Municipal best practices documented and disseminated Integrated approaches to mainstreaming of gender issues defined and documented Integrated approaches to mainstreaming of Youth issues defined and documented Study on state of LED in SA conducted by 31 December 2014 Capacity building facilitated on integrated poverty eradication facilitated in all provinces by 31 March 2015 Municipal case studies documented and disseminated in all provinces by 31 March 2015 Annual SALGA women s commission Lekgotla held by 31 March 2015 Guidelines on youth development programmes for local government disseminated to provincial offices by 31 December 2014 The study on the state of local economic development in South Africa was conducted by 31 December 2014 Capacity building was facilitated in municipalities on the tools of integrating poverty in municipal programmes by 31 March 2015 Municipal case studies were documented and a publication, Beyond the Basics, was developed and disseminated as an electronic booklet to all the provinces by 31 March 2015 The annual SALGA women s commission (SWC) Lekgotla was held in November 2014 in White River, Mpumalanga Guidelines on youth development were developed for local government and disseminated to all provinces by 31 December 2014 Variance (both over and under achieved) Not applicable Not applicable Not applicable Not applicable Not applicable Reason for variance Performance status Not applicable Achieved Not applicable Achieved Not applicable Achieved Not applicable Achieved Not applicable Achieved 65

66 Goal Target number KPI number Outcome 2014/ /15 KPI 2014/15 target Annual result 2014/ Improved knowledge and access to information on transversal issues Improved knowledge and access to information on transversal issues Improved knowledge and access to information on transversal issues Improved knowledge and access to information on transversal issues Implement a programme jointly (with national departments and entities) on municipal websites and municipal broadband Integrated approaches to mainstreaming of HIV and AIDS issues defined and documented Integrated approaches to mainstreaming of disability issues defined and documented Integrated approaches to mainstreaming of children issues defined and documented Integrated approaches to mainstreaming of older persons issues defined and documented Engage government and industry to enhance local government ICT Partnerships established / formed to support local government response to HIV and AIDS by 31 March 2015 Status quo report on the disability programmes in local government developed by 31 March 2015 Municipalities assisted in the development of actions plans for mainstreaming of children issues by 31 March 2015 Local government approach on the provision of services to older persons defined and documented by 31 March 2015 E-participation tool developed by 30 June 2014 Partnerships to support local government response to HIV and AIDS were established with GIZ, municipalities and sector departments as well as provincial and local AIDS councils by 31 March 2015 A survey on the status quo of the disability programmes in local government was conducted. A status quo report was developed and finalised by 31 March Municipalities were assisted in the development of action plans to mainstream children issues in their programmes 31 March 2015 A local government approach on the provision of services for older persons was defined and documented by 31 March 2015 The e-participation tool was developed by 30 June 2014 and workshops held in nine provinces by 31 March 2015 Variance (both over and under achieved) Not applicable Not applicable Not applicable Not applicable Not applicable Reason for variance Performance status Not applicable Achieved Not applicable Achieved Not applicable Achieved Not applicable Achieved Not applicable Achieved 66

67 Goal Target number KPI number Outcome 2014/ /15 KPI 2014/15 target Annual result 2014/ Produce annual planning legislation and case law barometer training programme for municipalities on the SPLUMA and its regulations implemented Streamline development planning supported Report developed on the municipal state of readiness on the SPLUMA implementation by 30 June 2014 An assessment and analysis report on municipal state of readiness on SPLUMA was developed by 30 June A circular (no. 26/2014) highlighting key municipal actions required in preparation for SPLUMA implementation was developed and disseminated to municipalities. Capacity building support on SPLUMA was provided to Eastern Cape by 31 March Produce annual planning legislation and case law barometer training programme for municipalities on the SPLUMA and its regulations implemented Implementation of a programme for municipal support on rural development and agriculture Streamline development planning supported Develop a programme to unlock rural economies Spatial restructuring guidelines developed by 30 September 2014 Small town regeneration programme developed by 30 June 2014 Spatial restructuring guidelines were developed in collaboration with DRDLR by 30 September A further document outlining possible tools to effect spatial restructuring was also developed by 30 September 2015 The small town regeneration programme was developed by 30 June 2014 and rolled out in North West in partnership with CLGF by 31 March Implementation of a programme for municipal support on rural development and agriculture Develop a programme to unlock rural economies Training programme for implementation of small town regeneration developed by 30 June 2014 A training programme for the implementation of the small town regeneration programme was developed by 30 June 2014 and rolled out in Eastern Cape, Free State and KwaZulu-Natal by 31 March 2015 Variance (both over and under achieved) Not applicable Not applicable Not applicable Not applicable Reason for variance Performance status Not applicable Achieved Not applicable Achieved Not applicable Achieved Not applicable Achieved 67

68 2.2.4 Goal 4: Effective, responsive and accountable local government for communities South Africa has a critical need to address issues of local governance and cement the power and status of this sphere within a broader democratic governance framework. This goal encapsulates the various governance and intergovernmental issues - from legislation and policy, to funding and institutional arrangements. It covers issues across all spheres of government and specific issues in relation to the local sphere of government. From a governance perspective, the goal includes a particular focus on corruption at a local government level. Given the related importance of South Africa s engagement with the continent and the world as whole from a governance perspective, the goal also incorporates a focus on international relations from a local government perspective. Achievements Framework for municipal support and intervention The practical model for municipal support and intervention was developed; SALGA also developed a process flow chart on the support and monitoring application of section 139 interventions. Ultimately, the practical model intends to address prevention of interventions in municipalities. Participation in national and provincial legislatures The designation of the part-time representatives to the NCOP improved SALGA s visibility in the NCOP and provided consistency in terms of representation, advocating and lobbying for the interests of local government. SALGA was part of the historic occasion where the NCOP participated for the first time in the debate on the State of the Nation Address in June Councillor support and welfare Across the country SALGA provided on-going support and advice to individual municipalities on the implementation of the upper limits notice on salaries, allowances and benefits of different members of municipal councils; Support was also provided for other councillor welfare and support issues as and when requested, such as: Councillor cellphone allowances; Space for ward councillors; Full time councillors - Section 12 notice; Travel allowance; Grading of municipalities; Payments to councillors outside the upper limits notices; Tools of trade; and SASRIA implementation. 68 Accountability and oversight SALGA developed a consequences and accountability framework; Nine municipal public accounts committees (MPAC) visits were conducted and eight MPAC good practice case analysis were held across all provinces; Municipalities were supported in the implementation of the differentiated model for the separation of functions; On completion of the overall process, SALGA will be able to develop an MPAC good practice case document, which will be the organised local government (OLG) official publication on good practices on oversight;

69 SALGA participated in a number of anti-corruption events organised by and with various stakeholders (Ethics SA, CoGTA; Gauteng Provincial Government, IMATU, GIZ, National Prosecuting Authority, the Hawks, Office of the Public Service Commission, Office of the Public Protector, Office of the Premier, University of Pretoria); An inception report was prepared for the national anti-corruption survey which is an annual assessment of the state of antifraud and anti-corruption measures in municipalities in South Africa to be completed in 2015/16; Municipalities were supported to implement the anti-corruption summit resolutions as well as with their anti-corruption policies as and when requested; and SALGA participated in a radio station panel discussion with panellist from the Competition Commission and Corruption Watch on the topic Corruption is now a South African way of life - If we can t accept that, how can we change it? Boundaries re-determination and ward delimitation The MDB participated in PWG meetings, PEC meetings, governance and IGR Practitioners Forums and PMAs, and at the NMA which recommended that the process be re-opened after the 2016 local government elections. This financial year, six MDB circulars were disseminated to municipalities to keep them abreast with ongoing developments in the demarcation processes; and In all the affected provinces, SALGA participated in the MBD information sessions/consultation processes with municipalities. Issues discussed included: public participation and consultation, ward delimitation process, cross-boundary issues and poorly configured wards, alignment to services boundaries of other sector departments, post-delimitation engagements and feedback and continuous and identifiable wards. Policy and legislative review Legislative and policy proposals submitted by SALGA this year included: the Development Bank of Southern Africa Amendment Bill; Extension of Security of Land Tenure Act, 1997 (ESTA); Amendment of the Remuneration of Public Office Bearers Act; SPLUMA; Draft monitoring, support and intervention framework; Upper limits for the salaries of senior managers; Draft framework agreement for a sustainable mining industry entered into by organised labour, organised business and government; Terms of reference for SALGA position paper on mining and local government - an assessment of legislation and national framework; Terms of reference for the devolution strategy for local government; Proposals on the review of the OLG Bill, OLG Act 1997; LG: General Laws Amendment Bill; and Impact of the Public Administration Management Bill and the Property Rates Amendment Bill on municipalities. Legislation negatively impacting on local government were presented and discussed at the Parliamentary strategic session, at the national municipal managers forum, at the Mpumalanga governance indaba; as well as to the Free State summit. Proposals on legislative amendments were adopted by all PMAs under Apex 1. 69

70 Below are detailed performance results as per the key performance indicators in the 2014/15 annual performance plan: Goal Target number KPI number Outcome 2014/ /15 KPI 2014/15 target Annual result 2014/ Refined model for coherent support developed Structured engagement between local government and executive at provincial and national level to improve the governance environment for municipalities Facilitate the development of a model of municipal support and intervention which is transparent, consultative with clear protocols, standards and institutional arrangements by 31 March 2015 Implemented structured engagement with national departments as identified in the SALGA IGR implementation plan by 31 March 2015 The model for municipal support and intervention was developed and circulated to provinces for comments from municipalities by 31 March SALGA implemented the IR implementation plan through participating in a number of IGR (technical) fora and developed briefing notes, speeches and presentations for councillors representing SALGA in IGR fora (MINMECs, MUNIMECs, PC CoGTA, PC finance, PCC, premier s coordinating forum, etc) by 31 March Variance (both over and under achieved) Reason for variance Performance status Not applicable Not applicable Achieved 70

71 Goal Target number KPI number Outcome 2014/ /15 KPI 2014/15 target Annual result 2014/ Sustainable and self-sufficient municipalities, able to deliver effective and accountable governance Municipalities supported to deliver accountable and effective governance Coordinated governance hands-on support provided to municipalities on critical governance challenges by 31 March 2015 Coordinated governance hands-on support was provided to municipalities on critical governance challenges through opinions, advice and guidelines to municipalities across the country on a number of governance issues. Three circulars were disseminated to all municipalities during the period under review: 1) Circular 07/2015 which gave an update on the status of the upper limits notice (5 February 2015); 2) Circular 10/2015 on the 2014/15 upper limits notice (24 February 2015); and Capacitate and support municipalities to develop and implement performance management system (PMS) Capacitate and support municipalities to develop and implement performance management system (PMS) Implementation of a municipal performance management (PMS) support programme in targeted district and local municipalities per province by 31 March ) Circular 14/2015 on the gazetted 2015 upper limits notice (27 March 2015) Municipal performance management (PMS) support programme was implemented in targeted (127) district and local municipalities per province by 31 March 2015 Variance (both over and under achieved) Reason for variance Performance status Not applicable Not applicable Achieved Not applicable Not applicable Achieved 71

72 Goal Target number KPI number Outcome 2014/ /15 KPI 2014/15 target Annual result 2014/ Organised local government influences policy and legislative outcomes to be more responsive to local government Structured engagement with national and provincial legislatures in respect of policy and legislation impacting on local government Effective participation and engagement of OLG with legislative processes by 31 March 2015 SALGA effectively participated and engaged on OLG with legislative processes by 31 March 2015 SALGA attended joint sitting of the National Assembly and the NCOP and contributed to the debates on the State of the Nation Address. SALGA highlighted the significant role played by local government as well as the challenges that continue to confront the sector and how these could be resolved Variance (both over and under achieved) Reason for variance Performance status Not applicable Not applicable Achieved 72

73 Goal Target number KPI number Outcome 2014/ /15 KPI 2014/15 target Annual result 2014/ Platform created to facilitate municipal international cooperation Implementation of the framework to guide international cooperation/s Platform created to facilitate municipal international cooperation by 31 March 2015 SALGA continued to create platforms for municipal international cooperation through the following: - Africities official launch; Smart local governance, Bilbao, Spain; 13 th international congress of educating cities; International conference of local authorities in solidarity with the Palestine people; UCLG world congress; BALA conference; Peer review of local government in England; Smart Local Governance, Bilbao, Spain; and UCLG culture summit. SALGA also engaged the GIZ and local government in Zimbabwe on a number of issues that affect municipalities. Further platforms were created through MoUs that were signed with the Palestine local government and the Association of Flemish Cities and Municipalities (VVSG). International Cooperation s engagements with municipalities were held in provinces. Variance (both over and under achieved) Reason for variance Performance status Not applicable Not applicable Achieved 73

74 Goal Target number KPI number Outcome 2014/ /15 KPI 2014/15 target Annual result 2014/ Effective accountability and oversight in municipalities facilitated Improve the effectiveness of oversight and accountability mechanisms and structures Improve leadership capability on oversight and accountability by 31 March 2015 Support the implementation of the differentiated separation of functions models in municipalities by 31 March 2015 Promote good practices and knowledge sharing among municipalities by 31 March 2015 Leadership capability on oversight and accountability was improved. SALGA presented the consequences and accountability framework to nine PMAs held in August and September 2014 and NMA held on March SALGA held MPACS good practice case analysis provincial workshops (to share best practices and identify key challenges experienced by municipalities) in Northern Cape, Western Cape, KwaZulu-Natal, North West, Free State, Gauteng, Free State, and Limpopo between February and March Lobbied for improved councillor payment dispensation and capacitated councillors Lobbied for improved councillor payment dispensation and capacitated councillors CoGTA and independent commission lobbied; Quarterly reporting on continuous advice, training and workshops conducted/provided on councillors benefits by 31 March 2015 SALGA lobbied CoGTA and independent commission on councillors benefits on 11 August A proposal for the 2014/15 notice for the upper limits of councillor s salaries and allowances were approved by the NEC of 3 July 2014 and forwarded to the remuneration commission on 11 August. Quarterly reports were presented at the councillor support working groups by 31 March 2015 Variance (both over and under achieved) Reason for variance Performance status Not applicable Not applicable Achieved Not applicable Not applicable Achieved 74

75 Goal Target number KPI number Outcome 2014/ /15 KPI 2014/15 target Annual result 2014/ Improved and enhanced public participation in municipalities facilitated Strengthened public participation approaches and processes in municipalities Promote partnerships with identified civil society organisations and other stakeholders by 31 March Promote good practices and knowledge sharing among municipalities on innovative public participation approaches by 31 March 2015 Partnerships with identified civil society organisations and other stakeholders were promoted by 31 March Good practices and knowledge sharing among municipalities on innovative public participation approaches was promoted through SALGA s development of a draft concept note for provincial round table on community involvement and public participation in local government and provincial round table discussions held with civil society organisations on public participation in Northern Cape, Eastern Cape, Gauteng and Free State by 31 March SALGA also participated in a number of public participation initiatives during the year: organised by the Isandla Institute; WG meeting with GIZ; Ditsobotla;; Legislature of SA) public participation, petitions and communication forum meeting; municipality to formalise a GSP and civil society partnership on integrating the assets-based community-driven development approach; and Eastern Cape provincial CoGTA Variance (both over and under achieved) Reason for variance Performance status Not applicable Not applicable Achieved 75

76 Goal Target number KPI number Outcome 2014/ /15 KPI 2014/15 target Annual result 2014/ Facilitate municipalities participation in ward delimitation process The views of municipalities on ward delimitation are incorporated in the ward delimitation process by the MDB Facilitate the participation of the MBD in SALGA governance structures by 31 March Facilitate the participation of municipalities in MDB processes and engagements on ward delimitation by 31 March 2015 Facilitated the participation of the MBD in SALGA governance structures as well as municipal participation in MDB processes by 31 March A report on reopening of boundary redetermination process by the MDB was tabled at GIGR on 22 January 2015 NWG and NEC on 12 February Boundary re-determination and ward delimitation were also discussed at the NMA on March 2015, which recommended that the process be reopened after the 2016 local government elections The following MDB circulars were disseminated to municipalities via provincial offices by 31 March to keep them abreast with on-going developments in the demarcation processes:; Circular 4/2014: Delimitation of wards during 2014/15 for the 2016 local elections; Circular 1/2015: Redetermination of boundaries; Circular 2/2015: Redetermination of boundaries in Eastern Cape, KwaZulu- Natal, Limpopo and North West; Circular 3/2015- Redetermination of boundaries in Mpumalanga, North West and Northern Cape; Variance (both over and under achieved) Reason for variance Performance status Not applicable Not applicable Achieved 76

77 Goal Target number KPI number Outcome 2014/ /15 KPI 2014/15 target Annual result 2014/15 Circular 4/2015- Redetermination of boundaries in Free State; and Circular 5/2015: Redetermination of boundaries.. The MDB participated in the NMA 2015 held on 24 March 2015, the PWG meetings throughout the year, PEC meetings, governance and IGR practitioner s forums and PMAs in August and September 2015; as well at SALGA LP Finance Week. SALGA attended and participated in MDB national launch of ward delimitation process by 31 March Variance (both over and under achieved) Reason for variance Performance status 77

78 Goal Target number KPI number Outcome 2014/ /15 KPI 2014/15 target Annual result 2014/ Support municipalities in the implementation of anti-corruption strategies / corruption free municipalities/ Interventions Municipalities supported to combat corruption and maladministration Support provinces in guiding municipalities on the implementation of the outcomes of the anticorruption summit by 31 March Provinces were assisted to support municipalities on the implementation of the outcomes of the anti-corruption summit by 31 March The resolutions of the anti-corruption summit were disseminated to all municipalities via provincial offices by 31 March Umvoti, Mandeni and Mtambanana municipalities were assisted with the development and adoption of their anticorruption policies. Gert Sibande, Chief Albert Luthuli, Prince Albert, Kannaland and Beaufort West were supported on the revival of the anti-corruption strategy through a working session. Through the Limpopo speakers forum, good anti-corruption practices were profiled. SALGA facilitated an anti-corruption peer-learning initiative between Beaufort West and Knysna municipalities in November 2014 and held a follow up engagement in February 2015 where Beaufort West Municipality presented its draft anti-corruption strategy. SALGA developed an assessment on the state of anti-co-fraud and anti-corruption measures in municipalities. Variance (both over and under achieved) Reason for variance Performance status Not applicable Not applicable Achieved 78

79 Goal Target number KPI number Outcome 2014/ /15 KPI 2014/15 target Annual result 2014/ Improved policy and legislative framework for developmental local government facilitated Stakeholders lobbied on the SALGA position regarding the comprehensive review of legislation and policy framework impacting on municipalities Conduct review of legislation impeding service delivery by 31 March Undertake a comprehensive review of Organised Local Government by 31 March Develop policy proposals on key areas affecting local government by 31 March SALGA conducted the review of legislation impeding service delivery by 31 March SALGA engaged with CoGTA on proposals on the review of the OLG Bill, OLG Act 1997; and LG: General Laws Amendment Bill. A presentation was also made in Parliament and national municipal manager s forum on legislation that negatively impact Local Government. The NMA commission 8: Strengthening organised local government identified proposals to strengthen OLGs effectiveness, accountability, governance framework and funding model for sustainable longterm relevance and impact. Variance (both over and under achieved) Reason for variance Performance status Not applicable Not applicable Achieved 79

80 2.2.5 Goal 5: Human capital development in local government Addressing the human resources management and development (HRM&D) and labour relations challenges in local government is therefore critical in building stability in the sector and ensuring that the sector is appropriately resourced and capacitated to fulfil its mandate. This goal encapsulates the various policy, strategy and support initiatives that are required to establish a comprehensive HRM&D dispensation for local government. It also focuses on labour relations as a key factor of productivity and service delivery. The goal places particular emphasis on achieving HRM&D stability and growth in the sector and supporting skills development and optimal human resourcing for local government. Achievements One hundred and twenty seven municipalities were supported, assisted and guided in developing and implementing a performance management system (PMS),. The support provided includes training workshops to deepen the knowledge and understanding of PMS as well as ensure compliance with relevant legislative requirements; Two hundred and seventy four municipal employees across provinces were trained on TASK job evaluation (JE). The trained employees will serve in the various JE unit structures that will finalise JE in all municipalities; Roll out of the professionalisation framework implementation plan using four pillars: service orientation, leadership and management professionalism, technical professionalism, and institutional professionalism; As part of the roll out of the human resource management and development strategy for local government, 114 municipalities across provinces were profiled using the municipal developmental human capital management profiling tool; Launching and establishment of the SALGA Centre for Leadership and Governance (SCLG); and SALGA facilitated portfolio based training and leadership development programmes for councillors and senior municipal officials; councillors and senior municipal officials benefited from: Portfolio-based councillor development programme (787); Senior manager induction programme (252); and Leadership development workshops (110). 80

81 Below are detailed performance results as per the key performance indicators in the 2014/15 annual performance plan: Goal Target number KPI number Outcome 2014/ /15 KPI 2014/15 target Annual result 2014/ Implementation of the revised SALGBC remodelling monitored Represent municipalities in conciliations, arbitrations and litigation Negotiate collective agreement on service charter Assessment report on compliance with collective agreements developed A mutual gains approach to collective bargaining facilitated A mutual gains approach to collective bargaining facilitated Local government service charter for negotiations with unions developed Review of existing collective agreements framework Review, monitor and report on operations and effectiveness of the SALGBC by 31 March 2015 Quarterly reports on the representation made in DC processes, conciliations arbitrations and litigation developed by 31 March 2015 Negotiate collective agreement on service charter by 31 March 2015 Municipalities supported and advised on the implementation of the collective agreement by 31 March 2015 A review report on operations and effectiveness of the SALGBC was developed. SALGA continued to monitor and report on operations of the SALGBC by 31 March The functioning of the SALGBC was monitored and reported at SALGA governance structures throughout Quarterly reports were presented to SALGA governance structures on SALGA s representation to member municipalities across provinces in DC processes, conciliations, arbitrations and litigations by 31 March 2015 A local government service charter was developed and presented at the SALGBC Exco for negotiations by 31 March 2015 Municipalities were supported and advised in the implementation of the collective agreement pertaining to job evaluation (JE) training, pension fund, medical aid and home owners allowance by 31 March Assessment report on compliance with collective agreements developed by 31 March 2015 An assessment report on compliance with collective agreements was developed by 31 March 2015 Variance (both over and under achieved) Not applicable Not applicable Not applicable Not applicable Reason for variance Performance status Not applicable Achieved Not applicable Achieved Not applicable Achieved Not applicable Achieved 81

82 Goal Target number KPI number Outcome 2014/ Facilitate the interpretation and implementation of the amendment of the Labour Relation Act in the local government sector Representation of the interest of Local Government at NEDLAC and ILO assessed 2014/15 KPI 2014/15 target Annual result 2014/15 Coordinate provision of support to municipalities on the LRA implementation measures Represent the interest of Local Government at NEDLAC and ILO Develop framework/ guidelines document for municipalities on the implementation measures within 2 months from the enactment of the Act by 31 March 2015 Represent interests of Local Government in both NEDLAC and ILO by 31 March 2015 (as and when required) A guideline framework on the municipal implementation measures of the amendments of the Labour Relations Act was developed and shared with municipalities by 31 March 2015 Through the auspices of the SALGBC study tour to Europe, SALGA represented the interests of local government in both NEDLAC and ILO by 31 March The engagement with ILO sought their expertise on issues of downward and upward variation of existing conditions of service, job evaluation Variance (both over and under achieved) Not applicable Not applicable Reason for variance Performance status Not applicable Achieved Not applicable Achieved 82

83 Goal Target number KPI number Outcome 2014/ Capacitate municipalities towards the implementation of the professionalisation framework 2014/15 KPI 2014/15 target Annual result 2014/15 Framework for professionalization of LG human resources developed and implemented Coordinate the operationalisation (implementation) of the Professionalisation framework for targeted municipalities by 31 March 2015 SALGA coordinated the operationalisation (implementation) of the professionalisation framework for targeted municipalities by 31 March The professionalisation implementation plan was rolled out to targeted municipalities by 31 March 2015 in the following pillars of professionalism: (a) Service orientation- senior manager s induction programme (b) Leadership and management- SCLG and LDW (c) Technical- SALGA capacity building prospectus. (d) Institutional- Developmental municipal human capital Profiling; TASK job evaluation implementation process that will be rolled out over a 3-year period; Municipal performance management support programmes; Support framework for the implementation of the local government: regulations on appointment and conditions of employment of senior managers; and Human resource management policy review and development. Variance (both over and under achieved) Not applicable Reason for variance Performance status Not applicable Achieved 83

84 Goal Target number KPI number Outcome 2014/ Continuous induction and training of councillors/ senior management and assessment of the effect of the intervention with the aim to facilitate 60% retention in next round of elections Awareness building and preparation/s towards the implementation of Local Government Leadership Development Academy Capacitate municipalities towards the implementation of LG mentorship programme 2014/15 KPI 2014/15 target Annual result 2014/15 Systems, structures and partnerships for enhanced capacity building programmes established Oversee coordination of quarterly induction of senior municipal officials by 31 March Induction of newly elected councillors every 6 months by 31 March 2015 Inductions of municipal senior managers and councillors were conducted in provinces and presented in governance structures by 31 March 2015 Systems, structures and partnerships for enhanced capacity building programmes established Implementation of the Phase 1 SCLG business plan by 31 March 2015 Phase 1 of the SALGA Centre for Leadership and Governance (SCLG) was implemented through the launch of the centre at SALGA National Members Assembly on 24 March 2015 together with its products and services catalogue Systems, structures and partnerships for enhanced capacity building programmes established Implementation of executive coaching programme for targeted municipalities as part of support programme for improved audits by 31 March 2015 Executive coaching programme was implemented under the theme of leadership development workshops (LDW) as part of support programme for improved audits by 31 March 2015 Variance (both over and under achieved) Not applicable Not applicable Not applicable Reason for variance Performance status Not applicable Achieved Not applicable Achieved Not applicable Achieved 84

85 Goal Target number KPI number Outcome 2014/ Portfolio base capacity building conducted Knowledgesharing and inter-municipal peer learning programme reviewed 2014/15 KPI 2014/15 target Annual result 2014/15 Systems, structures and partnerships for enhanced capacity building programmes established Coordinate roll out of the portfolio based councillor development programme (CDP) by 31 March 2015 SALGA coordinated the roll out of portfolio based councillor development programmes in all provinces by 31 March The following programmes were rolled out: 1) Credit control; 2) Disaster risk management; 3) Migration; and Enhanced peer learning and knowledgesharing within and between municipalities Knowledge sharing and inter-municipal peer learning programme implemented by 31 March ) Performance management Knowledge-sharing and intermunicipal peer learning programme was implemented by 31 March knowledge and learning events were facilitated, hosted and supported in the form of SIKE (SALGA information and knowledge exchange), municipal managers forum and other knowledge sharing events Variance (both over and under achieved) Not applicable Not applicable Reason for variance Performance status Not applicable Achieved Not applicable Achieved 85

86 Goal Target number KPI number Outcome 2014/ Improved knowledge and access to information on transversal issues 2014/15 KPI 2014/15 target Annual result 2014/15 LG practitioners are kept abreast of key issues impacting on municipalities through knowledgesharing programmes LG data and knowledge products sourced, centrally stored and disseminated in the sector by 31 March 2015 Local government data and knowledge products were sourced, centrally stored and disseminated in the sector by 31 March 2015 Knowledge management and municipal innovation 1. Local Government Knowledge Hub was developed and completed in March The hub will enable easy access to the sector s data and knowledge resources. 2. SALGA developed an annual knowledge and information publication that aims to inform, share, celebrate and profile municipal innovations, excellence and partnerships. The publication is named in. KNOW. vation. Municipal barometer and quality management 1. Municipal barometer was updated with local level data. The municipal barometer was uploaded with time series data (indicators are populated with data based on 2011 boundaries) on the following outcome indicators: Demographic trends , 2001, 2007 and 2011 Economic growth and development , 2007, and 2011 Variance (both over and under achieved) Not applicable Reason for variance Performance status Not applicable Achieved 86

87 Goal Target number KPI number Outcome 2014/ Capacitate municipalities towards the implementation of HR strategy 2014/15 KPI 2014/15 target Annual result 2014/15 Service delivery , 2007 and 2011 Municipal financial data for and indicators spreadsheet Four local government municipal briefs were developed and uploaded. 3. Municipal profiling reports providing analysis of the socioeconomic environment of districts and local municipalities based on data sets of the municipal barometer were also developed. 4. SALGA conducted a number of workshops which were aimed at creating awareness, knowledge dissemination and imparting of skills. The workshops were held with officials from SALGA, municipalities and external stakeholders. Research Local government human resource policy and strategy (LG HRM) developed and rolled out LG HRM strategy framework rolled out by 31 March 2015 A 15-year review of local government study was concluded The local government human resource management strategy was rolled out in 114 municipalities across provinces through profiling exercise by 31 March A report on the HRMIS development specification was developed Variance (both over and under achieved) Not applicable Reason for variance Performance status Not applicable Achieved 87

88 Goal Target number KPI number Outcome 2014/ Guidelines developed on the implementation of amendments and update all policies affected by amendments 2014/15 KPI 2014/15 target Annual result 2014/15 Local government human resource policy and strategy developed and rolled out Develop guidelines on the implementation of amendments and update all policies affected by amendments by 31 March 2015 Guidelines on the implementation of amendments was developed by 31 March The 18 HRM policies contained in the handbook developed by SALGA in 2009 were updated to align all affected policies to the EEA amendments and to the local government regulations on the appointment and conditions of employment for senior managers resulting in an addition of approximately 22 new policies by 31 March Circulars were issued in respect of the EEA amendments and the local government regulations on senior managers by 31 March 2015 Variance (both over and under achieved) Not applicable Reason for variance Performance status Not applicable Achieved 88

89 2.2.6 Goal 6: Financially and organisationally capacitated municipalities Many municipalities face significant challenges in financial and organisational viability. This problem has persisted since the establishment of democratic local government and the picture has not changed significantly over the last few years. Hence there is a need to address some of the fundamental difficulties associated with the fiscal framework for local government. This goal encapsulates the various policy, strategy and support initiatives that are required to build an enabling fiscal framework (including sources of revenue generation) and adequate local government capacity (systems, processes and people) to deal with financial management. The ultimate focus of this goal is to build the long-term financial viability and broader sustainability of municipalities. Achievements SALGA lobbied for a municipal demarcation transition grant of R at the 2014 budget forum. The grant is to subsidise additional institutional and administrative costs arising from boundary changes to take effect in the elections of 2016; A Municipal Finance Management Act compliance barometer was developed; A billing and revenue enhancement research project was developed; SALGA continued to rollout the oversight capacity training tailor-made for councillors in all provinces, and assisted councillors to understand their role more clearly and how to operate more effectively; Developed and launched multidisciplinary municipal audit support programme (MASP) which is based on four pillars: leadership, governance, financial management and institutional capacity. MASP will assist all municipalities to maintain good audit outcomes (unqualified with no findings or with findings) and to improve poor audit outcomes (disclaimer, adverse, qualified and audits not finalised. MASP is placing particular emphasis on those municipalities with adverse/ disclaimer opinions as well as those municipalities whose audits were not finalised by the legislated deadline ( red zone municipalities). SALGA also finalised an agreement with a research institute PARI to perform research into the red zone municipalities; and Developed a discussion paper on standard charts of accounts (SCOA). 89

90 Below are detailed performance results as per the key performance indicators in the 2014/15 annual performance plan: Goal Target number KPI number Outcome 2014/ /15 KPI 2014/15 target Annual result 2014/ Lobbied for the comprehensive fiscal review on fiscal allocations to municipalities Lobbied for the review of the local government fiscal framework SALGA s input on the review of the local government fiscal framework submitted to the budget forum by 31 December 2014 SALGA s inputs on the review of the local government fiscal framework were submitted to the budget forum by 31 December Barometer on municipal finance legislation and policies developed Review legislative framework for efficient budgeting, revenue and expenditure management in local government Provinces supported in encouraging municipalities to comply with legislation Assist provinces to support and advise municipalities on improving revenue management, credit control and outstanding debtors Develop barometer on compliance with municipal finance legislation by 31 March 2015 Provinces assisted to support municipalities in revenue management, credit control and outstanding debtors through provision of concept/master presentation to build municipal capacity by 31 March 2015 A barometer on compliance with municipal finance legislation was developed by 31 March 2015 SALGA assisted provinces to support municipalities in revenue management, credit control and outstanding debtors through provision of concept/master presentation to build municipal capacity through the development of a research paper on debt owed to municipalities, poor billing and critical success factors to billing by 31 March Workshops/capacity building were also held in provinces on revenue management, credit control and outstanding debtors Variance (both over and under achieved) Not applicable Not applicable Not applicable Reason for variance Performance status Not applicable Achieved Not applicable Achieved Not applicable Achieved 90

91 Goal Target number KPI number Outcome 2014/ /15 KPI 2014/15 target Annual result 2014/ Improved functioning of internal audit units in municipalities facilitated Effective functioning of municipal audit committees Improved functioning of internal audit units in municipalities facilitated Audit committee capacity building programme for councillors rolled out Coordinate the assistance (with provincial offices and municipal finance directorate) towards supporting municipalities with the improved functioning of the Internal audit function, risk management and audit committees by 31 March 2015 Provinces supported in the roll out of the councillor capacity building programme on municipal audit committees by 31 March 2015 With the coordination of provincial offices, 25 municipalities were supported towards improving the functioning of the internal audit function and risk management matters by 31 March As part of addressing risk in municipalities SALGA developed a risk management framework for Municipalities by 31 March Provinces were supported to roll out the councillor capacity building programme (oversight workshops) on municipal audit committees by 31 March 2015 Variance (both over and under achieved) Not applicable Not applicable Reason for variance Performance status Not applicable Achieved Not applicable Achieved 91

92 Goal Target number KPI number Outcome 2014/ /15 KPI 2014/15 target Annual result 2014/ Implement a provincial adopt a municipality campaign (to support improved audit outcomes) Implementation of SALGA s position on differentiated approach Coordinate the implementation of the SALGA municipal support programme for adopted municipalities Lobby for funding to assist struggling municipalities to comply with accounting standards and SCOA regulations Coordinate the implementation of the SALGA municipal support programme for adopted municipalities by 31 March 2015 Develop a position paper on the funding needs of the municipalities who are struggling to implement accounting standards and SCOA by 31 March 2015 SALGA coordinated the implementation of the municipal support programme for adopted municipalities by 31 March A MASP project was launched to help support the 60 municipalities in the red zone disclaimer, adverse opinions. A research project was undertaken to diagnose the root causes of persistent governance transgressions by municipalities. From the research outcomes specific tailor-made support projects will be developed for the struggling municipalities. 22 municipalities were supported, 9 of which have already migrated from the red zone. SALGA developed a discussion document addressing the specific challenges as associated with standard charts of accounts (SCOA) with specific recommendations endorsed by the NEC by 31 March SALGA facilitated focus groups to help low capacity and rural municipalities to make comments on the Accounting Standards Board exposure drafts Variance (both over and under achieved) Not applicable Not applicable Reason for variance Performance status Not applicable Achieved Not applicable Achieved 92

93 2.2.7 Goal 7: Effective and efficient administration Given the significant pressure that will be placed on SALGA to deliver its strategy, it is critical that it has an effective and efficient administration. This goal encapsulates the various interventions that SALGA will implement to ensure that its administration functions effectively and efficiently. These interventions will cover areas of governance, products and services, performance management, people development and marketing and communication. In particular the goal will also focus on consolidating SALGA as a unitary structure with a national footprint. Part of the process of consolidation will include a bolstering of SALGA s financial and organisational viability. Achievements Business planning SALGA has continued to comply with the requirements of the Public Finance Management Act, 1999 (Act No. 1 of 1999) (PFMA) and in particular the National Treasury Framework for the development of strategic and annual performance plans; The 2014/15 Annual Performance Plan (APP) of SALGA was fully implemented during the financial year; and Quarterly reports were submitted to CoGTA and National Treasury. These quarterly reports provide status on the implementation of the SALGA APP and also provides management with information for corrective measures on those indicators that are lacking. Municipal barometer and quality management SALGA uploaded the municipal barometer with time series data (indicators are populated with data based on 2011 boundaries) on the following outcomes indicators: Demographic trends , 2001, 2007 and 2011; Economic growth and development , 2007, and 2011; Service delivery , 2007 and 2011; and Municipal financial data for Four informative municipal briefs monthly electronic updates on district s socio-economic performance have been developed and uploaded on the SALGA websites; District municipal profile reports which provide analysis of the socio-economic environment of districts and local municipalities based on data sets of the municipal barometer were developed; Conducted a number of workshops aimed at creating awareness, knowledge dissemination and imparting of skills. The workshops were held with officials from SALGA, municipalities and external stakeholders; A partnership with the Department of Monitoring and Evaluation has been finalised; and Partnerships with the following organisations have been initiated: Foundation for Professional Development; Department of Rural Development and Land Administration; Department of Science and Technology (DST); and Canadian International Development Agency (CIDA). Research A 15-year review of local government study has been concluded. 93

94 Knowledge management and municipal innovation SALGA s development of a local government knowledge hub will build a body of knowledge and institutional memory of the local government sector; In the sphere of knowledge exchange and learning events, SALGA facilitated the following: Co-hosted the 8 th national municipal manager s forum; Supported the hosting of the 4 th South African urban conference; and Facilitated a knowledge exchange session in the development of small and rural towns and townships. SALGA developed an annual knowledge and information publication that informs, shares, celebrates and profiles municipal innovations, excellence and partnerships. Marketing and communications Communications During 2014/15 SALGA dramatically increased communication through electronic, web and social media platforms. During the year SALGA Facebook followers increased from 400 in April 2014 to 9070 at the end of March 2015 with 178 tweets and retweets to Twitter and 73 posts to Facebook. Media relations has also made impact through daily media monitoring and reports on media clippings distributed to SALGA executive management team from across the country. Ten media briefings were conducted, 29 media statements were issued and 104 media enquiries were received and responded to by the communication unit. During the year 2014/15 five editions of the Voice of Local Government magazine and 13 provincial newsletters were developed and distributed to all our members municipalities and stakeholders. The internal staff newsletter, Insight, was revitalised and a SIKE in Brief newsletter was introduced to staff of which 13 combined editions were produced and electronically circulated to all staff. A branded centralised internal notice, E-notice was developed and weekly multimedia screen updates ensured staff members were informed of strategic projects at SALGA. Marketing For the period 2014/15, in line with the organisation s mandate to profile the sector, SALGA embarked on a process to identify suitable service providers to assist the organisation with developing an integrated marketing and communication campaign for the sector. The objective is to roll out campaigns that capture the positive stories within local government relating to service delivery. In preparation of the organisation celebrating 20 years existence, the organisation would undergo a rebranding to revitalise the current brand image of SALGA. SALGA also contributed to the 20-year celebrations of the country through a profile in the Sunday Times magazine. The organisation also contributed towards the awareness campaign for capacity building initiatives championed by municipal institutional development. The initiatives were for the roll out of the senior managers induction programme and the councillor induction programme. The campaigns were aimed at increasing the awareness on these initiatives by members and for the CDP to increase the number of councillors who would enrol for the programme. This was done through print media and the publications were targeted based on readership and circulation. For the first time since it was launched, the municipal manager s forum convened in Mpumalanga and the 8th municipal manager s forum was well publicised. A TNA breakfast briefing aired on Morning Live on SABC2 for the first time in the history of these forums. This platform gave viewers an opportunity to hear from municipal managers and their roles within a municipality. The National Members Assembly publicity has also grown in leaps and bounds with the amount of outside broadcasts with radio stations having increased from two to five including Kaya FM, SAFM, Ukhozi FM, Lesedi FM and live crossings with Morning Live. 94

95 Secretariat In consideration of the institutional arrangements of South Africa s intergovernmental relations (IGR) landscape; the challenges and constraints faced with SALGA s deployment to IGR structures and critically assessed SALGA s IGR representation and participation, the SALGA National Members Assembly of March 2008 adopted the SALGA governance framework. National assessments of internal governance arrangements within SALGA were conducted after each quarter of the financial year. This is an ongoing mechanism to monitor and evaluate the functionality and effectiveness of SALGA s internal governance structures. During 2014/15, all national governance structures held their meetings as per the approved year calendar. Furthermore, all meetings formed a prescribed quorum and also finished the business of the day as outlined in their agendas. Legal, risk management, internal audit Legal SALGA had developed a legal protocol framework which formed part of a comprehensive approach to effectively coordinate legal services in the organisation. Key guiding principles that underpin the process when the legal department is engaged have been implemented. The outcome of the legal framework in the long term is to consolidate, streamline and coordinate processes in the legal department so as to ensure effective delivery of legal services under a single functionary. This has set in motion all institutional arrangements aimed at providing quality and efficient legal services. SALGA s legal department has rolled out online legal content support on SALGA s knowledge hub for municipalities. The online legislative solution covers all national, provincial and local government legislation; Fully integrated with LexisNexis online products and updated daily, Gazettes Online allows member municipalities to stay abreast of amendments and proposed amendments to legislation; Current Awareness Alert is a daily alert service that provides updates on three major areas: news, legislation and case law; LexisNexis legislative solution intends to cover all municipalities that are in good standing; and This solution takes the time and frustration out of legal research. SALGA has secured services to roll out the new electronic legal request and response system. This solution will be attached to the SALGA requisition system as another form of requesting other than the procurement processes. The solution allows for workflows and tracking of information flow which builds up into an automated legal register in all three categories including a consolidated one, for audit purposes. A helpdesk solution has been built and configured using a process flow toolset, task centre. Three main categories of legal proceedings have been identified for inclusion in this helpdesk environment, namely contracts, legal opinion and litigation. Requests for assistance or inputs for any one of these three categories may vary from one another and thus three distinct processes have been modelled to cater for the three categories. Internal audit Thirteen audits were performed as per the internal audit coverage plan for 2014/15; and Improved internal controls within SALGA processes were audited. The number of recurring issues previously reported has reduced and management takes ownership for implementing controls on processes. Externally focused - internal audit and risk management Twenty one municipalities were assisted during 2014/15 on areas of internal audit, audit committees and implementation of action plans to address the findings of the Auditor-General of South Africa (AGSA). 95

96 Stakeholder management For the period 2014/15 the stakeholder relations policy was revised to reflect input from provinces and directorates. All staff were trained on the policy through provincial and directorate workshops. A sign off policy will assist SALGA to manage all external stakeholders in a structured manner. The policy being institutionalised will also assist in developing a culture of detailed reporting on engagements with stakeholders as well as identifying the owners within the organisation. Quarterly stakeholder engagements were convened with external stakeholders in collaboration with directorates. These stakeholder engagements were convened to form strategic partnerships with organisations to meet organisational objectives as outlined in the organisation s five year strategy. A stakeholder engagement was held in partnership with the Mail and Guardian to launch the water benchmarking initiative. Various interested parties in the media, public and private sectors were invited. Ahead of the Auditor-General s announcement of audit outcomes, SALGA invited metro communicators to engage with the report to enable them to be ready to respond to the media. In the build up to the launch of the municipal audit support programme for municipalities in the red zone with audit outcomes, SALGA held a stakeholder engagement for audit firms to solicit their support for the programme. A strategic partnership was entered into with Proudly South African aimed at assisting municipalities with complying with legislation relating to procurement practices. An official signing ceremony was convened to seal the partnership. SALGA entered into an MoU with Eskom aimed at forging relationships to deal proactively with issues relating to electricity distribution, service level agreements between municipalities and Eskom and compliance with legislation. SALGA also joined hands with Rand Water to launch the water conservation fund and launched it to stakeholders as a side event at the National Members Assembly. The National Members Assembly was also used as a platform to sign an MoU with SASCOC as well as the Association of Flemish Cities and Municipalities (VVSG). International relations During 2014/15 SALGA participated in the following international platforms: Africities official launch: 17 September 2014 The Africities summit was presented to the office bearers meeting held on 17 September The official launch took place on 14 October 2014 in Johannesburg. The theme of the Africities summit in December 2015, to be held in Johannesburg, will be Shaping the future of Africa with the people: Africa s local government contribution to the Africa 2063 vision. Smart local governance: 6-7 November 2014, Bilbao, Spain UN-Habitat s local government and decentralisation unit contributed to the meeting of the UCLG committee of digital and knowledge-based cities that took place in Bilbao, Spain, on 6-7 November th International congress of educating cities: November 2014 The theme for this congress, which took place on November 2014, was The educating city is an inclusive city. Through lectures, presentations of experiences, mayors and experts round tables, and study tours, the congress dealt with the role of education, in the broadest sense of the term, as an essential instrument for social inclusion, fostering personal and collective development and the improvement of social coexistence and solidarity. Local governments and different social agents and entities in cities are facing the major challenge of working towards social inclusion from a comprehensive perspective in order to confront social and economic inequality and the inequality of opportunities affecting different sectors of the population. These inequalities run the risk of deepening the rift given the rapid pace of change that is being lived through if a decisive effort is not made to stop them. 96

97 International conference of local authorities in solidarity with the Palestine people: November 2014 SALGA, informed by the MoU it signed with the Association of Palestinian Local Authorities (APLA), which seeks among others to facilitate municipality to municipality support, participated in this conference on November 2014 in Ramallah. The conference was organised by the UN International Year of solidarity with the Palestine People (2014). Its intention was: To develop and deepen ideas that abound in Palestine and around the world on the Palestinian issue; and To open new avenues of reflection, to explore and to identify new levers of intervention and of development that could be implemented at the local level of the territory. The ambition of the conference was to bring together Palestinian (West Bank, Jerusalem and Gaza) and foreign local actors in order to promote linkages between them, to bring out new ideas and new initiatives, and to act constructively. Among others the conference introduced and outlined the beginning of answers on these issues, inspiring new ways of thinking and of acting, and new dynamics of solidarities. UCLG world congress: November 2014 UCLG world congress marked the 10 th anniversary of the creation of United Cities and Local Governance (UCLG), which aims to be the united voice of local and regional governments at the global level. The congress took place on November 2014 in Haikou, China. Focusing on the general theme city managements and public service innovation, delegates of member cities from across the globe brought together smart ideas and valued experiences that have helped shape the growth of their cities. BALA conference: January 2015 The conference was held under the theme Unlocking investment opportunities. The current developmental thinking places local government at the forefront of developmental issues and in ensuring basic service delivery through the promotion of inclusive development initiatives from all sectors of the economy. Delegates from the regional countries brought together smart ideas and valuable experiences that have helped shape the growth of their cities. Peer review of local government in England: February 2015 The Local Government Association of England and Wales (LGA) requested SALGA s support in an international peer review of English cities and city regions. Our participation included a comparison between the local government systems in England and South Africa. The comparisons included among others, the form, structure, powers, functions and systems of the English and South African local governments. LGA specifically requested SALGA to facilitate the executive mayor of the City of Joburg to participate in this process. UCLG culture summit: March 2015 SALGA, through its CEO was invited to the UCLG culture summit Culture and sustainable cities, which took place in Bilbao on March 2015 and gave a presentation of the Activities of SALGA on culture and sustainability in the parallel session: Networks and Agenda 21 for culture that took place on 19 March

98 Below are detailed performance results as per the key performance indicators in the 2014/15 annual performance plan: Goal Target number KPI number Outcome 2014/ /15 KPI 2014/15 target Annual result 2014/ Operational excellence model (executive support) rolled out Provision of organisational legal services; facilitation and execution of enterprise risk management processes; create awareness and visibility of anti-fraud and prevention processes; improved internal controls for processes audited 2014/15. Develop and execute Legal Protocol Framework, Coordinated Legal Support provided to the organisation by 31 March 2015 Facilitate and develop Draft Risk register for 2015/16 by 31 January 2015 Implementation of the Internal Audit Plan 2014/15 by 31 March 2015 Revive the implementation of the SALGA anti-fraud prevention Plan by 31 March 2015 Legal: SALGA developed and executed a legal protocol framework which formed part of a comprehensive approach to effectively co-rdinate legal services in the organisation. Training was conducted on the framework as well as the LexisNexis Risk management: Risk register for 2015/16 was facilitated, developed and submitted to CoGTA and National Treasury as part of the SALGA Annual Performance Plan 2015/16. Internal audit: The internal audit plan was implemented through the various audits that were conducted. Quarterly reports were submitted to the audit committee Performance management system sustained and continuously improved trough monitoring and evaluation Performance management system sustained and continuously improved Monitoring and evaluation for improved performance management system by 31 March 2015 Anti-fraud: The anti-fraud helpline was monitored, reviewed and reported to be operating successfully. SALGA monitored and evaluated the improvement of the performance management system and developed quarterly assessment reports after conclusion of quarterly quality assurance by 31 March 2015 Variance (both over and under achieved) Not applicable Not applicable Reason for variance Performance status Not applicable Achieved Not applicable Achieved 98

99 Goal Target number KPI number Outcome 2014/ /15 KPI 2014/15 target Annual result 2014/ Responsive ICT environment maintained % of SALGA office accommodation in compliance facilitated Repository of unclassified information updated Responsive ICT environment facilitated 80% of SALGA office accommodation in compliance with structural aspects in terms of access by persons in wheelchairs Repository of unclassified information. Provide and maintain a stable and adaptable ICT environment by 31 March % of SALGA office accommodation in compliance facilitated by 31 March documents (national office) scanned to the repository by 31 March 2015 A stable and adaptable ICT environment was provided and maintained by 31 March All diginet lines have been upgraded to 4MB ensuring faster response times and improvement on the video conferencing solution SALGA facilitated the compliance with the OHS Act. 80% of SALGA office accommodation complied with the OHS Act by 31 March 2015 A total of documents for 2014/15 were scanned and uploaded into the SALGA repository by 31 March Determine appropriate interventions for improved client satisfaction Improve SALGA s meeting facilities. Implementation of an online system for boardroom bookings by 31 March 2015 An electronic online boardroom booking system was developed and implemented by 31 March 2015 Variance (both over and under achieved) Not applicable Not applicable Over achieved Not applicable Reason for variance Performance status Not applicable Achieved Not applicable Achieved A service provider was appointed to assist with the uploading on all documents that were not on the repository due to in-house capacity constraints Achieved Not applicable Achieved 99

100 Goal Target number KPI number Outcome 2014/ /15 KPI 2014/15 target Annual result 2014/ Stakeholder management strategy rolled out SALGA governance structure support model implemented Marketing and communication plan 2014/15 implemented Unqualified audit opinion for 2014/15 obtained Stakeholder management strategy roll out Effective and functioning governance structures Implementation of marketing and communication plans Translating the SALGA strategic plan into a quality assured annual performance plan towards achieving impact in the local government sector Quarterly reporting against the roll out of the stakeholder management strategy by 31 March 2015 NOB/NEC receives two reports (M&E) on the implementation of the governance support model as per the SALGA yearplanner 2014/15 by 31 March 2015 Quarterly report on implementation of the 2014/2015 national marketing and communication plans by 31 March 2015 Planning and reporting against pre-determined targets coordinated by 31 March 2015 Quarterly reports against the roll out of the stakeholder management strategy were developed by 31 March 2015 NOB received the assessment reports on the implementation of the governance support model as per the SALGA year-planner. The reports were tabled at NOB on 16 March 2015 Quarterly reports on the implementation of the marketing and communication plans were developed detailing all activities undertaken during the course of the quarters by 31 March 2015 Planning and reporting against predetermined targets was coordinated on a quarterly basis. SALGA continued to comply with the requirements of the National Treasury framework for the development of strategic and annual performance plans. Quarterly reports have been submitted to CoGTA and National Treasury as per the timeframes stipulated by National Treasury Variance (both over and under achieved) Not applicable Not applicable Not applicable Not applicable Reason for variance Performance status Not applicable Achieved Not applicable Achieved Not applicable Achieved Not applicable Achieved 100

101 Goal Target number KPI number Outcome 2014/ /15 KPI 2014/15 target Annual result 2014/ Unqualified audit opinion for 2014/15 obtained /16 Budget aligned to organisational strategic objectives Capacitated business units ensured Implement 2nd phase of sustainable employment conditions of service Unqualified audit opinion for 2014/15 obtained Budget aligned to organisational strategic objectives Funded vacant posts filled in order to build organisational capacity to improve support to SALGA members 2nd phase of sustainable employment conditions implemented of service to ensure provide of staff and to motivate employees for optimal performance Unqualified audit opinion for 2014/15 obtained Budget aligned to organisational strategic objectives by 31 January % of funded vacant posts filled by 31 March % implementation of 2nd phase of sustainable employment conditions of service implemented by 31 March 2015 Unqualified audit opinion was obtained for 2014/15 SALGA s budget was aligned to organisational strategic objectives by 31 January A budget forum was held on 19 November 2014 to discuss the 2015/16 budget allocation and to ensure that the budget is aligned according to SALGA programmes and strategic goals. The budget has been prepared with transparency and in line with National Treasury templates and guidelines. 86% of funded vacant positions for 2014/15 were filled by 31 March % of employment conditions were implemented for 2014/15 by 31 March All eligible employees are receiving staff benefits. Contracts are in place with respective service providers; ie ABSA; Momentum; Discovery Health and Old Mutual Variance (both over and under achieved) Not applicable Not applicable 16% over achieved Not applicable Reason for variance Performance status Not applicable Achieved Not applicable Achieved Improved recruitment processes Achieved Not applicable Achieved 101

102 Goal Target number KPI number Outcome 2014/ /15 KPI 2014/15 target Annual result 2014/ Implementation of 2014/15 employee recognition programme Structured implementation of employee wellness programme Compliance ensured with skills development, employment equity and OHS legislation Compliance ensured with skills development, employment equity and OHS legislation Employee recognition programme to recognise employee s commitment, dedication and hard work and to promote a culture of work ethic in the workplace Employee wellness programme rolled out in the organisation, providing a holistic wellness programme Employment equity report submitted to the EE Registrar of the Department of Labour in order to promote an equitable workplace OHS committee report and recommendations to ensure a safe and healthy work environment Employee recognition programme facilitated across provinces and hosted by 31 December 2014 Quarterly report on the rolled out employee wellness programme within the employee wellness policy/ programme by 31 March 2015 Approved employment equity report submitted to the EE Registrar of the Department of Labour by 31 October 2014 Approved OHS committee report and recommendations submitted to the CFO by 31 December 2014 The employee recognition programme was facilitated across provinces and hosted in December Employees from directorates as well as provincial offices were recognised. The ERA steering committee also consisted of representatives from national as well as all provincial offices Quarterly reports detailing the progress on the roll out of employee wellness programme were developed and tabled at the quarterly Employment Equity Forums by 31 March 2015 Approved employment equity report was developed and submitted to the EE Registrar of the Department of Labour on 29 September 2014 Approved OHS committee report and recommendations was developed and submitted to the CEO in December Quarterly OHS committee meetings were convened in this financial year Variance (both over and under achieved) Not applicable Not applicable Not applicable Not applicable Reason for variance Performance status Not applicable Achieved Not applicable Achieved Not applicable Achieved Not applicable Achieved 102

103 Goal Target number KPI number Outcome 2014/ /15 KPI 2014/15 target Annual result 2014/ Compliance ensured with skills development, employment equity and OHS legislation Annual training report and workplace skills plan submitted to LGSETA in order to comply with legislative requirements and good governance Annual training report and workplace skills plan submitted to LGSETA in order to comply with legislative requirements and good governance by 31 December 2014 The annual training report and workplace skills plan for 2014/15 was completed and submitted to LGSETA in December 2014 in order to comply with legislative requirements and good governance. Trainings were offered to SALGA staff as per the skills plan and personal development plans (PDPs) by 31 March 2015 Variance (both over and under achieved) Not applicable Reason for variance Performance status Not applicable Achieved 103

104 104 Mandela Day

105 PART D: HUMAN RESOURCE MANAGEMENT 105

106 1. INTRODUCTION Our employees are SALGA s key resource. SALGA recognises that the sustainability of the organisation also depends on providing fair remuneration, benefits, working conditions and development opportunities that will attract and retain the right people with the right skills in order to execute the developmental mandate of the organisation. The period under review marks a time where several human resources initiatives were implemented or improved to support and underpin the organisation s strategic goals. With the focus being on establishing SALGA as centre of excellence, and on the attraction and retention of staff, the following marks some highlights during the period under review: Implementation of service benefits to all staff; Converting the nature of employment contracts from fixed term to permanent for all employees, excluding senior management; Full automation of the individual performance management system; Entering into an agreement with LGSETA to fund internships; and Executive skills development interventions. 1.1 Talent acquisition As at the end of the financial year, SALGA had a staff complement of 428 employees of whom 162 are employed at the national office in Pretoria, with the rest of the staff spread across the nine provincial offices. Senior SALGA appointees undergo psychometric assessments to ensure proper skills fit. In realising SALGA s uniqueness as an organisation, it is important to have a focused job market and to expand its recruitment efforts to social media. The breakdown of the staff complement of 428 is reflected below: Workforce profile per business units (excl. temporary staff) Directorate / province Number of employees Office of the CEO (including CSR) 38 Finance and Corporate Services 68 Municipal Institutional Development 17 Municipal Infrastructure and Services 11 Municipal Finance 6 Governance and IGR 11 Economic Development and Planning 8 Community Development 9 Eastern Cape 32 Free State 33 Gauteng 29 Mpumalanga 24 North West 26 Northern Cape 27 Limpopo 29 Kwazulu Natal 28 Western Cape 32 Total

107 TERMINATION CATEGORIES All Terminations Resignations Retirement Death End Contract 120% ETHNIC GROUPS 100% 100% 100% 100% 100% 80% 60% 40% 20% 0% 50% 33% 1% 1% 3% 3% 3% 3% AFRICANS INDIANS COLOUREDS WHITES All positions filled Males Females 1.2 Individual performance management The individual performance management system transcended into the use of an automated, user-friendly system during 2014/15. Various training and informative workshops were held across the organisation to thoroughly inculcate the process. All reviews and coaching sessions for 2014/15 were successfully completed electronically. This automation enables faster processing of performance results and ensuring credible performance reports. These efficiencies allow for the expertise in SALGA to have more time to focus on the execution of day to day responsibilities in responding to the needs of members and the sector generally. The behaviour s charter, which enhances individual performance management was implemented for executive management and will be rolled out to all staff in the next financial year. Several awareness workshops were held throughout the organisation to ensure that SALGA fosters a workforce with professional, value-driven behaviour amongst employees. A proper link between the behaviour s charter and SALGA s values were drawn. 107

108 1.3 Labour relations compliance Employment equity within SALGA In an effort to comply with the labour relations Act, SALGA has an existing Employment Equity Committee which meets on a quarterly basis. The purpose of the committee is to discuss matters such as equity in the workplace, discrimination, disability, promotion, fair remuneration, disability and others as required by legislation. SALGA s EE forum was amended to incorporate skills development committee and is now known as the employment equity skills development consultative forum (EESDCF). The purpose of adding skills development was to ensure compliance with legislation in terms of the Skills Development Act and Employment Equity Act. It was also important that SALGA as a learning organisation invests in its staff as part of employee umpliftment Employment equity workforce profile The table below reports the total number of employees (including employees with disabilities) in each of the following occupational levels: Occupational levels Male Female Foreign nationals Total A C I W A C I W Male Female Top management Senior management Professionally qualified and experienced specialists and midmanagement Skilled technical and academically qualified workers, junior management, supervisors, foremen, and superintendents Semi-skilled and discretionary decision making Unskilled and defined decision making Total permanent Temporary employees Grand total Note: A=Africans, C=Coloureds, I=Indians and W=Whites 108

109 The table below reports the total number of employees with disabilities only in each of the following occupational levels: Occupational levels Male Female Foreign nationals Total A C I W A C I W Male Female Top management Senior management Professionally qualified and experienced specialists and midmanagement Skilled technical and academically qualified workers, junior management, supervisors, foremen, and superintendents Semi-skilled and discretionary decision making Unskilled and defined decision making Total permanent Temporary employees Grand total Note: A=Africans, C=Coloureds, I=Indians and W=Whites 1.4 Employee relations The employee relations function is designed to ensure that there is a sound relationship between employer and employees. SALGA s processes are designed to ensure fairness when it comes to issues of discipline and grievances, in addition it is a mechanism that makes provision for collective bargaining. Ordinarily it is expected that each employer should provide for an effective employment relations process. To this effect SALGA has an employment management relations policy which makes provision for the SALGA code of conduct, grievance procedure, disciplinary procedure, appeals procedure and dispute procedure. SALGA has established a fraud hotline which is managed by SizweNtsalubaGobodo. Matters referred to the fraud hotline for further investigation are also dealt with by the employee relations unit. SALGA strives to always comply with the policy and adheres to the timeframes as stipulated. Below is a graphic representation of cases that SALGA honoured during the current reporting period. Number of disputes Labour Court Disputes (CCMA) Implementation of employee service benefits Appeals Grievance Investigation Formal Disciplinary cases (Final Written Warning, Demotion and Dismissals) Progressive Disciplinary cases (Counselling, Verbal Warning & Written Warnings)

110 Effective from 1 April 2014, SALGA implemented service benefits to its employees and converted the nature of employment of employees at manager levels and below to permanent positions. By offering benchmarked service benefits, SALGA is able to position itself as a competitive employer of choice. The benefits offering also serves as an attraction and retention measure. The following benefits were introduced: Medical aid,; Pension fund; and Group risk cover. 1.5 Skills development SALGA is a learning organisation that believes in investing in the development of its workforce. Employees are continuously exposed to learning interventions aimed at equipping them with skills, knowledge and abilities required to meet the needs of SALGA s main clients, its member municipalities. As per the relevant legislative requirements of the Skills Development Act, SALGA is required to annually submit a workplace skills plan (forecast of training interventions to be implemented) as well as annual training report (ATR) to the LGSETA. This report reflects how the skills budget was utilised for SALGA to be eligible for discretionary grants from the LGSETA to further develop its staff and interns. For the current reporting period a total of 27 skills development interventions were implemented and four conferences/workshops were attended. Fourbhundred and two employees across job levels were trained on the different short course/skills programmes. During this reporting period, study assistance was awarded to 48 officials who are doing Doctorate, Masters, Degrees, Diplomas, Certificates and Matric.With the conversion of employment contracts SALGA also amended its study assistance policy to enable more employees the opportunity to study or further their academic qualifications. It is very encouraging to see the enthusiasm of SALGA employees in aspiring to improve their existing qualifications. SALGA registered 13 employees with seven professional bodies. The following statistics depict the training programmes conducted from July 2014, until the end of March

111 2014/15 Summary of number of employees trained and inducted National view Number of employees trained Training programmes delivered Study assistance Induction programme Employment equity and gender: annual training report Total number trained Africans Whites Coloureds Indians Number of employees per race and gender Males Females 111

112 2014/15 Types of qualifications being studied Qualifications: Study Assistance Masters PhD Qualifications Degrees Diploma Certificates Matric 112 Training programmes conducted in 2014/15 Training Programmes Number of attendees Writing Queries 1 Cisco Network 1 Cobit 5. Foundation 1 File Plan and Records Development 13 Fiscal Decentralisation 3 MS Office 16 Project Management 14 Strike Handling 9 Supervisory Training 8 Compliance Course 1 Measuring ROI in Training 1 Minute Taking 42 2nd Annual HR Standards 2 Hazard Identification & Risk Assessment 22 Report Writing 29 Telephone & Reception Training 4 Public Speaking and Presentation Training 88 Planning ( Conference) 3 Coaching and Mentoring 18 Company Secretary course 1 CIPS Assessments Skills 8 Office Management 19 Job Analysis 4 Asset Management 2 EE Training 12 ABET 22 Monitoring and Evaluation 15

113 Training Programmes Number of attendees Finance for Non-Financial Managers 9 Strategic Management 11 Fire Fighting Training 23 Total Employee wellness programme SALGA embarked on an extensive drive to ensure wellness of its employees. SALGA provides the services of Independent Counselling and Advisory Service (ICAS) to its employees at no cost to the employees. The uptake by staff in the utilisation of ICAS was above average during the year under review. Counselling, whether telephonic or face-to-face, group counselling sessions and an array of other methods, form part of the ICAS offering and are aimed at providing professional assistance with matters that might hinder an employee from performing optimally in the workplace. Other physical wellness and employee bereavement support services are also offered to staff. SALGA firmly promotes a healthy work life balance amongst its staff members. In support of this, several other initiatives in addition to the employee assistance programme were presented. The following graph illustrates the employee wellness activities for 2014/15: Table 1.2 EWP activities Wellness day Blood drive Emotional Impact Session Personal financial management training TB Awareness Session Women s Month Activities 16 Days of No Violence Against Women and Children Sports Day 1.7 Employee recognition awards The employee recognition awards is SALGA s way of recognising excellence in employees. Employees who both perform well, and also go the extra mile while executing the mandate of SALGA, are nominated by their fellow staff members in order to become eligible for an award. Recognition is an important component in the HR value chain. A formal recognition programme such as SALGA s employee recognition awards serves as a catalyst to encourage even more outstanding work amongst employees. SALGA furthermore promotes the concept of working collaboratively in a team as well as forming multi-disciplinary teams to achieve a certain strategic objective. A reward category recognising and rewarding the best team was therefore included in the awards categories. 113

114 1.8 Occupational health and safety A formal occupational health and safety (OHS) committee serves within SALGA. Apart from the fact that this is a legislative requirement, SALGA is committed to the provision of a safe and healthy work environment to its employees. The OHS committee carries out regular inspections on OHS requirements. Reports on the committee s findings are presented to the executive members. All OHS representatives attend regular training interventions such as hazard identification and risk assessment and rire emergency drill training to ensure that they are prepared to act in an emergency situation. Through its commitment to human resources processes, SALGA has managed to establish a strong employee value proposition. When concerted efforts between SALGA, its staff and stakeholders come to fruition, it aids in positioning the organisation as an employer of choice, a high performance organisation which continuously challenges the status quo. In order to continue rendering an impeccable service to its members, SALGA ensures that best practice principles are incorporated into all employment practices within the organisation. 114

115 PART E: ANNUAL FINANCIAL STATEMENTS 115

116 116

117 w Nceba Mqoqi Chief Financial Officer OVERVIEW OF OPERATING RESULTS The year under review is characterised by a solid financial performance with a net surplus margin of 4.0 percent (2014: 9.8 percent) that has led to the organisation s financial position becoming more stable and secure with an asset coverage rate of 20 times (2014: 40 times). The operating results for the year ended 31 st March 2015 reflect a surplus of R 18.7 million (2014: R 39.0 million) representing a reduction of 52.1 percent (2014: 12.8 percent). The major contributing factor to the reduction in surplus is due to an increase in programme costs i.e. costs incurred for service delivery to SALGA s membership in pursuance of the organisation s mandate, namely: (i) lobbying; advocacy and representation; (ii) employer role; (iii) capacity building; (iv) providing support and advice; (v) strategic profiling of the local government sector and (vi) knowledge and information sharing. Gross programme costs i.e. inclusive of direct programme costs such as direct employee costs necessary for service provision to members and indirect programme costs such as costs incurred in the actual service provision to members have increased by 22.8 percent to R million (2014: R million). Relative to total operating expenditure gross programme costs comprise 62.3 percent (2014: 62.5 percent). The 2014/15 financial year is characterised by advances made in the area of improvement in conditions of service for SALGA employees, in that, in the financial period under review SALGA introduced employee benefits as well as converted fixed term contracts of employment for employees below the level of director to permanent. The effect of the introduction of employee benefits has impacted SALGA s statement of financial performance with an additional expenditure of R 29.6 million. The employee benefits introduced entail the following: Pension fund - an employer contribution based on 10.5 percent p.a. of an employee s basic or pensionable salary towards pension and/or retirement funds. Employees are required to contribute a corresponding contribution of 6.5% p.a. based on their basic or pensionable salary. Medical aid - an employer contribution capped at R per month per employee. The contribution amount is reviewed annually depending on prevailing medical insurance inflation. Group risk - an employer contribution that covers funeral benefit for the employee at a cost of R20 per employee per month to the organisation and immediate family members. The risk cover also includes life assurance cover at 2 times an employee s annual pensionable salary in case of death. The risk cover is based on 1.45 percent of SALGA s basic payroll costs. The above mentioned initiatives are to ensure that SALGA attracts and retains top talent; its remuneration philosophy is aligned with the organisation s strategy; and drives sustainable performance in the long-and short-term. 117

118 w The solid performance was attributable to revenue (excl. interest) growth of 19.1 percent to R million (2014: R million). The growth in revenue has been boosted by a strong growth in membership levies that have grown by 18.5 percent to R million (2014: R million) as a result of the review of the membership levy formula and organic growth. KEY FINANCIAL INDICATORS Financial Indicators Membership Levy revenue Government grant - Executive Authority Direct programme costs as a percentage of employee related costs 78% 79% - Administrator employee costs as a percentage of employee 22% 21% - Indirect programme costs as a percentage of operating expenses 19% 24% - Gross programme costs as a percentage of operating expenses 63% 65% - Total employee related costs as a percentage of operating expenses 57% 53% Profitability - Net surplus margin 4.0% 9.8% Liquidity ratio - Current ratio 180% 187% Solvency ratio - Solvency ratio Debt /Equity ratio 5.3% 7.8% - -Asset coverage rate (times) Activity ratio - Debtor collection period after impairment (days) Debtor collection period before impairment (days) Membership levy payment levels rate(%) 87% 92% Exclude depreciation and amortisation REVENUE Revenue for the year (excl. interest) amounts to R million (2014: R million). Operating revenue The organisation is primarily funded by membership levies that are levied to member municipalities. For the year under review, membership levy revenue remained the main source of revenue for SALGA with membership levies comprising 88 percent (2014: 88 percent) of total revenue. 118

119 w Operating revenue distribution is as follows: Operating revenue distribution per category % 1% 3% 3% 5% Operating revenue distribution per category % 0% 1% 3% 6% 88% 88% Rendering of services - Membership levies Transfers and subsidies - Executive Authority Revenue from non-exchange transactions¹ Donor funds recognised Revenue from capacity building programmes Other revenue Rendering of services - Membership levies Transfers and subsidies - Executive Authority Revenue from non-exchange transactions¹ Donor funds recognised Revenue from capacity building programmes Other revenue The applicable membership levy formula for the year under review and ensuing financial years is as follows: Metropolitan municipalities Flat rate plus CPI and 1 percentage point Local and district municipalities 1% of annual salary budget with a minimum of R The operating grant from the Executive Authority (Department of Cooperative Governance and Traditional Affairs) has increased by 3.5 percent to R 26.9 million (2014: R 26.0 million) as part of national government cost-cutting measures. The strong growth in revenue has also been buoyed by an increase of over 14.6 percent in revenue from non-exchange transactions to R 39.2 million (2014: R 34.2 million). The other revenue category also includes recoveries in the form of delegate fees for attendance of SALGA s governance structures at R 15.1 million (2014: R 6.0 million). Operating revenue composition: Operating revenue R million % change Rendering of services - Membership levies Transfers and subsidies - Executive Authority Revenue from non-exchange transactions Donor funds recognised (70.9) Revenue from capacity building programmes (41.6) Other revenue Total operating revenue

120 w Membership levy payment level rate As membership levy revenue comprises the majority of SALGA s revenue stream, the payment levels rate for membership levies remains the most important key performance indicator for the organisation as it determines the tempo for programme rollout and the organisation s operational sustainability. As at 31 March 2015 the payment levels for membership levies stood at 88 percent (2014: 92 percent). The collection rate for the current year remained within budget at 90 percent (2014: 94 percent). The provincial split for payment levels rates as at 31 March 2015 and the prior year are tabulated below: Payment levels rate provincial distribution Province Current year Overall Current year Overall Eastern Cape Free State Gauteng KwaZulu-Natal Limpopo Mpumalanga Northern Cape North West Western Cape Organisational payment levels rate Overall membership levy payment level rate: Overall Membership membership levy levy payment payment levels levels rate rate -4% Percentage 89% 87% 92% 88% Year 120

121 w The cumulative monthly interval of payment levels for the 2014/2015 as well as 2013/2014 financial years are illustrated below. The key feature of the payment level curve for the 2014/15 financial year is that a cumulative payment levels rate of 61 percent was achieved at the constitutional due date of 31 July 2015 i.e. more than half of members had settled their membership levies. A salient feature of the payment levels curve for 2014/2015 is that a cumulative payment levels rate of 84 percent was achieved at 30 September 2014 versus 67 percent at 30 September The reduction in the cumulative payment levels rate at 31 March 2015 from 90 percent to 88 percent for the year is due to the raising of additional membership levy invoices in March 2015 as a result of the revenue assurance exercise undertaken annually. In terms of the SALGA s constitution (2012) membership levies are billed on 1 April and payable on 31 July each year, meaning that ideally by 31 July the payment levels should be 100 percent. However, as a result of some struggling members that are dependent on an equitable share for their financial viability this is not always possible. EXPENDITURE Total operating expenditure (excl. finance cost) for the year increased by 27.8 percent to R million (2014: R million). Total operating expenses As mentioned above, the growth in operating expenditure is driven by the growth in direct programme costs i.e. programme related employee costs as part of building adequate internal capacity geared towards servicing SALGA s membership directly. Thus in an effort to be a more member-centric organisation, the growth in employee related costs is 38 percent to R million (2014: R million). Employee related costs split between direct programme cost and administrative support costs R million % change Employee related costs Direct programme costs Administrative support Included in the employee related cost is direct programme cost that is employee cost geared towards service delivery to members and direct support to SALGA s membership of R million (2014: R million). The portion relating to administration support to SALGA s core business is R 59.5 million (2014: R40.9 million). As indicated above, SALGA also introduced employee benefits during the year and the additional expenditure incurred on employee benifits amounts to R 29.6 million. 121

122 w Employee headcount grew by 13.2 percent to 437 employees as at 31 March 2015 (2014: 386 headcount). Indirect programme costs which are incurred as part of discharging SALGA s mandate to its members decreased by 0.4 percent to R 88.3 million (2014: R 88.7 million). Operating expenditure distribution is as follows: Operating expenditure distribution per category % 12% 2% 11% Operating expenditure distribution per category % 11% 1% 9% 62% 64% Employee related costs (administrative support) Programme costs (direct and indirect) Administrative overheads Depreciation and amortisation Other operating expenses Employee related costs (administrative support) Programme costs (direct and indirect) Administrative overheads Depreciation and amortisation Other operating expenses Programme related expenditure comprise the bulk of total expenditure incurred, for the year under review. The ratio of programme related expenditure is 61.9 percent (2014: 64.5 percent). Operating expenditure split between programme and other expenditure Distribution % R million % change Gross programme costs (direct and indirect) Other operating expenses Total operating expenditure The growth in membership levies of 18.5 percent, is primarily directed or utilised by activities that are geared towards servicing SALGA s membership. This is illustrated by a R 54.4 million growth (representing 22.8 percent) in gross programme expenditure. Other expenditure growth is R 49.7 million (representing 37 percent). Operating expenditure composition by category: Operating expenditure by category R million % change Employee related costs (administrative support) Programme costs (direct and indirect) Administrative overheads Depreciation and amortisation Other operating expenses¹ Total operating expenditure ¹ -Operating expenditure excludes finance costs. 122

123 w Operating expenditure composition by economic classification: Operating expenditure by economic classification R million % change Employee related costs Programme costs (indirect) (0.4) Administrative overheads Depreciation and amortisation Other operating expenses ¹ Total operating expenditure ¹ - Operating expenditure excludes finance costs. NON-OPERATING REVENUE AND EXPENDITURE The net non-operating revenue grew by over 100 percent to R 12.0 million (2014: R 5.7 million). Non-operating revenue Investment revenue increased by 97.1 percent to R 13.1 million (2014: 6.7 million),. The strong growth has been buoyed by investment revenue earned through investment of positive cash balances due to steady payment levels rate for membership levies being maintained. Finance costs remained steady at R 1.1 million with a negligible growth of 16 percent. Non-operating revenue composition: Net non-operating revenue R million % change Investment revenue Finance costs (1.1) (1.0) 10.0 Net non-operating income OPERATING SURPLUS SALGA s primary objective is not the pursuit of a surplus. However, as a result of sound financial management practices and a rigorous procurement system, the organisation has been consistent in extracting value for money whilst delivering services to its membership. Operating Surplus The operating surplus for the year decreased by 52 percent to R 18.7 million (2014: R 39.0 million) mainly due to an increase in programme costs i.e. costs incurred for service delivery to SALGA s membership in pursuance of the organisation s mandate as well as improving SALGA employees conditions of service with the introduction of employee benefits. 123

124 w Operating surplus 43.6 R million % Year COMPARISON OF ACTUAL OPERATING RESULTS AGAINST ADJUSTED BUDGET The SALGA budget is prepared on an accrual basis which is comparable with the financial statements. The original budget for the 2014/2015 financial year was approved by the Accounting Authority on 30 January The first adjusted budget for the 2014/15 financial year was approved by the Accounting Authority on 9 January 2015 and the final adjustment budget for 2014/15 was approved with the annual financial statements on 26 May The budgets mentioned above cover the periods 1 April 2014 to 31 March 2015.The budget is prepared on the accrual basis using a classification based on the nature of expenses in the statement of financial performance. Comparison of actual operating results against adjusted budget 2015 R million Actual Budget Variance Variance % Revenue Expenses (482.9) (483.7) Non-operating revenue Operating surplus The operating surplus for the year ended 31 March 2015 is R 18.7 million versus the budgeted R 4.5 million resulting in a positive variance of R 14.2 million. An explanation of salient line items contributing to variances per major category are explained below: Revenue 124 In revenue, the prominent positive variance is attributable to the following: Other revenue from exchange transactions - the positive variance is due to the over recovery for the convening of SALGA governance structures with more delegates attending than expected as well as the recovery of costs for the TASK Job Evaluation that is being rolledout to member municipalities. Sponsorships and donations - the positive variance is largely due to sponsorship realised for the hosting of SALGA governance structures exceeding expectations.

125 w Expenditure The prominent line item contributing to the positive variance in expenditure is the indirect programme costs that results in several positive variances and in aggregate contribute to the R 1.2 million positive variance. The positive variance was realised due to budgetary control together with measures to contain escalating costs further emphasised by the National Treasury Instruction Note 1 of 2013/14 on cost containment measures. Non-operating income Investment income - the positive variance is mainly due to improved cash holding as a result of membership levy collections being realised early due to the early settlement discount strategy adopted as well as the better rates negotiated with our bankers. A comparison of actual operating results against adjusted budget is illustrated below: Comparison of actual operating results against adjusted budget Non-operating revenue R 3.6 R 12.0 Expenses R R Revenue R R R 0.0 R 50.0 R R R R R R R R R R million Budget Actual Capital budget Capital additions for the year ended 31 March 2015 amount to R 7.5 million versus the adjusted budget of the same amount resulting in nil variance. Comparison of capital expenditure against adjusted budget R million % change Capital acquisitions¹ (13.8) ¹ - including intangible assets and property, plant and equipment. 125

126 w FINANCIAL POSITION Statement of financial position R million % change Current Assets Non-Current Assets % 0.5 Total Assets Current Liabilities Non-Current Liabilities (18.3) Total Liabilities Net Assets Net assets The financial position of the organisation as at 31 March 2015 reflects positive net assets of R million (2014: R 92.8 million). The growth in net assets is due to the strong financial performance in the year under review. In terms of solvency the organisation is solvent with a Debt/Equity ratio of 5.3 percent (2014: 7.8 percent) indicating an adequate asset coverage rate of 20 times (2014: 14 times). Also refer to the Accounting Authority s going concern considerations or assessment for the organisation included in its the report. Statement of financial position R million % change Cash and cash equivalents Other current assets Investment property Property, plant and equipment (2.1) Other non-current assets (5.8) Other financial assets Total Assets Other current liabilities Unspent conditional grants and receipts (62.5) Provisions Deferred revenue (46.6) Current Liabilities Non-Current Liabilities (20.5) Total Net Assets Current assets Current assets increased by 31.2 percent to R million (2014: R million). The growth has been propelled by the growth in revenue and cash collections improved. Current assets are comprised primarily by Cash and cash equivalents at R million (2014: R million) and followed by Other current assets at R 38.0 million (2014: R 30.2 million). 126

127 w Cash and cash equivalents increased by 32.6 percent mainly due to a steady payment levels rate that increased significantly over the 2 nd half of the financial year as a result of vigorous debt procedures. Included in other current assets is Trade and other receivables that increased by 25.4 percent to R 33.8 million (2014: R 26.9 million) as a result of increased membership levy revenue. Outstanding receivables comprise 6.9 percent (2014: 6.6 percent) of total revenue. In terms of liquidity the current ratio is positive and exceeds current liabilities resulting in a ratio of 180 percent (2014: 187 percent). Non-current assets Non-current assets grew by 0.5 percent to R 32.1 million (2014: R 32.0 million) as a result of investment in operating capital. Capital expenditure R million % change Capital acquisitions¹ (13.8) ¹ - including intangible assets. Asset additions for the period, inclusive of intangible assets, amounts to R 7.5 million (2014: R 8.7 million) which aligns with the growth in employee headcount from 386 as at 31 March 2014 to 437 at 31 March Current liabilities Current liabilities are comprised primarily by Trade and other payables at R 92.3 million (2014: R 67.1 million). These are trade creditors and accruals that are payable in the ordinary course of business, usually 30 days from statement date or fulfilment of a particular deliverable by a supplier. Included in current liabilities are other current liabilities such as Deferred income and Unspent conditional grants that constitute R 3.9 million (2014: R 8.6 million) of the total current liabilities. Deferred income and unspent conditional grants do not require settlement through payment; rather these are extinguished by fulfilment of the conditions of the grants. Non-current liabilities Non-current liabilities consist of the long-term portion of the finance lease obligation; operating lease liability; provisions and postemployment medical benefit. These amount to R 5.8 million as at the end of the reporting period (2014: R 7.1 million). Outlook for the year ahead In terms of the allocation letter from National Treasury the operating grant that SALGA receives from the national fiscus shall be phasedout of the MTEF period. The total Parliamentary allocation for 2015/16 period is R 9.2 million, and R 1.4 million and R nil for 2016/17 and 2017/18 financial periods respectively. In 2014/15 the Parliamentary funding represented 5 percent of total revenue and 6 percent and 7 percent in 2013/14 and 2012/13 respectively. Therefore, the Parliamentary grant funding has been reducing in real terms over the last financial periods. Notwithstanding these reductions the organisation has been able to report surpluses as a result of budgetary control and sound financial management practices. 127

128 w The reduction in the operating Parliamentary grant is occurring against the backdrop of the organisation being presented with measures to alleviate over-reliance on a single source of revenue viz. membership fees. In an effort, to address over reliance on a single source of revenue the organisation developed a funding model that was adopted by members during the National Members Assembly (NMA) held on May 2010 in Kimberley. The funding model was presented to the Executive Authority and National Treasury during the intervening years, in an effort to address the structural under unding of the organisation versus its mandate vis-à-vis legislated and mandatory participation in intergovernmental relations (IGR) structures. However, despite the non-implementation of the funding model the organisation has seized the occurrence of phasing out the Parliamentary grant funding as an opportunity rather than a threat. At present measures geared towards strengthening SALGA s financial independence have already begun with the research undertaken benchmarking with sister organisations internationally and the concept of paid services being scoped together with other projects underway to position SALGA as a reservoir of innovation, knowledge and solutions for the local government sector. Despite the efforts, preliminary results indicate that the funding of SALGA s participation at legislated and mandatory intergovernmental relations structures still remain a pivotal element of the funding model that needs to be funded from the national fiscus. Conclusion In conclusion, I express my sincere appreciation to the Chief Executive Officer, Xolile George, for his continued support, leadership, and strategic direction. I also extend my appreciation to the Finance and Corporate Services team for their immense contribution during the year. Nceba Mqoqi Chief Financial Officer 31 July

129 Report of the Accounting Authority The current NEC was elected at the last National Conference held on 29 August 2011 to 1 September 2011, in terms of clause 11.1 of the SALGA constitution, where the chairperson, three (3) deputy-chairpersons, and six (6) additional members were elected. The NEC has exercised its powers as conferred by the SALGA constitution in filling any vacancies in between National Conference, in terms of clause 11.3 of the SALGA constitution. The NEC can co-opt up to four additional members as members of the NEC and as at 31 March 2015 the NEC had four co-opted members. The term of the SALGA NEC is five years; the current term is due to end at the conclusion of the current political term of office for local government. With the exception of Xolile George who serves as an ex officio member in his capacity as Chief Executive Officer of the organisation, all other NEC members are councillors and are deemed to be independent non-executive directors of SALGA as defined for stateowned enterprises (SOEs) in the September 2002 Protocol on Corporate Governance in the Public Sector. A non-executive director is a person who has not been employed by the SOE in any executive capacity for the preceding three financial years; and is (in relation to the SOE) not a significant supplier or customer, has no significant contractual relationship and is not a professional advisor, other than in his or her capacity as a director. 1. NATIONAL EXECUTIVE COMMITTEE MEMBERS INTEREST IN CONTRACTS All NEC members are required to complete a register of interests. This register is updated on an annual basis. Refer to note 32 and 33 of the annual financial statements for a full disclosure of related parties. 129

130 Report of the Accounting Authority 2. REMUNERATION OF NATIONAL EXECUTIVE COMMITTEE MEMBERS AND NEC SUB-COMMITTEES 2.1 National Executive Committee Disclosure of remuneration paid to members of the Accounting Authority for 2014/15 per PFMA regulation (a) NEC member Name Sitting Allowance ** Reimbursed Travel Allowance * Subsistence Allowance (local) * Subsistence Allowance (foreign) * Expenses Refund Cllr Thabo Manyoni Cllr Mpho Nawa Cllr Nombulelo Hermans Cllr Flora Maboa-Boltman Cllr Dudu Mazibuko Cllr Tiny Grace Mthimunye Cllr Christiaan Neethling Cllr Pinkie Moloi Cllr Willie Johnson Cllr Sebenzile Ngangelizwe Cllr Demetri Qually Cllr GK Lobelo Cllr David Magabe Cllr Sibusiso W Mdabe Cllr Nomakhosazana Meth Cllr Zibonele Dumzela Cllr Abraham Bekeer Cllr Mafika Nkosi Cllr Zukiswa Ncitha Total Total 130

131 Report of the Accounting Authority Disclosure of remuneration paid to members of the Accounting Authority for 2013/2014 per PFMA regulation (a) NEC member Name Sitting Allowance ** Reimbursed Travel Allowance * Subsistence Allowance (local) * Subsistence Allowance (foreign) * Expenses Refund Total Cllr Thabo Manyoni Cllr Mpho Nawa Cllr Flora Maboa-Boltman Cllr Dudu Mazibuko Cllr Speedy Mashilo Cllr Christian Neethling Cllr Joshua Matlou Cllr Boitumelo Moloi Cllr Willie Johnson Cllr Parks Tau Cllr Balekile Mzangwa Cllr Demetri Qually Cllr Gavin Lobelo Cllr David Magabe Cllr Sibusiso Mdabe Cllr Nomakhosazana Meth Cllr Subesh Pillay Cllr Zibonele Dumzela Cllr Abraham Bekeer Cllr Mafika Nkosi Cllr Zukiswa Ncitha Total ** With effect from 1 July 2013 and in terms of Government Notice number R64 - determination of upper limits of salaries, allowances and benefits of different members of municipal councils, issued in terms of the Remuneration of Public Office Bearers Act, 1998 (Act No. 20 of 1998), dated 29 January 2014, SALGA is required to pay sitting allowances to councillors appointed to governance structures of organised local government. The said allowance is limited to R857 per sitting of the PEC or NEC or any committee of organised local government, regardless of the number of meetings that are attended by such councillor on a specific day. On 25 March 2015 the above mentioned government notice was repealed via Government Notice number R243 - Determination of upper limits of salaries, allowances and benefits of different members of municipal councils. The sitting allowance has since been increased to R908 per sitting of the Provincial Executive Committee or National Executive Committee or any committee of organised local government, regardless of the number of meetings that are attended by such councillor on a specific day. * Reimbursed travel and local subsistence allowances is remitted to NEC members in terms of SALGA policy for participating in governance structures of organised local government (where applicable). The rates used for local travel and subsistence are based on SARS rates deemed as expended. International per diem is paid to NEC members who undertake SALGA s mandate of strategic profiling. For example, SALGA s chairperson partakes in governance structures of internal bodies such as the local government Pan-African body, United Cities and Local Governments of Africa (UCLGA) as vice president; he is also president of 131

132 Report of the Accounting Authority the UCLGA Southern Africa Regional Office (UCLGA-SARO), SALGA also participates in other world-wide bodies such as United Cities and Local Government (UCLG), Commonwealth Local Government Forum (CLGF) and Metropolis. In pursuit of SALGA s mandate in these bodies, the SALGA NEC mandates NEC members to participate in them from time to time. 2.2 National executive committee oversight sub-committees The NEC as the Accounting Authority or Board of SALGA subscribes to good governance principles as espoused in the King code on corporate governance (King III). Accordingly, internal oversight structures have been established and these include the audit and risk committee and the performance management and remuneration committee. Members of NEC sub-committees not in the employ of the state such as those serving on the audit committee; and performance management and remuneration panel are reimbursed on an hourly basis according to professional fee schedules. These committees are comprised of independent members who are charged with oversight responsibilities on governance matters Audit and Risk Committee The organisation s audit committee is constituted in terms of section 77(a) of the PFMA; as well as per regulation ; and of the PFMA Treasury Regulations (2005). The audit committee is constituted as follows: Name of member Mr Temba Zakuza Ms Octavia Matloa Ms Phumelele Ndumo Mr Nala Mhlongo Adv Motlatjo Ralefatane Role Chairperson Member Member Member Member The members of the audit and risk committee have been remunerated for the year under review and prior year as follows: 2015 Name of member Attendance fees * Reimbursed travel cost ** Total Mr Temba Zakuza Ms Octavia Matloa Ms Phumelele Ndumo Mr Nala Mhlongo Adv Motlatjo Ralefatane Total

133 Report of the Accounting Authority 2014 Name of member Attendance fees * Reimbursed travel cost ** Total Mr Temba Zakuza Ms Octavia Matloa Ms Phumelele Ndumo Mr Nala Mhlongo Adv Motlatjo Ralefatane Total * Members of SALGA s NEC sub-committees are remunerated for participating in SALGA s governance structures based on SALGA s policy for remuneration of NEC sub-committees. Attendance fees are based on an hourly rate and claimable hours are capped regardless of the duration on a meeting or preparation time. ** Reimbursed travel allowance is remitted to members based on the applicable SARS rates deemed as expended Performance Management and Remuneration Committee The organisation has a performance management and remuneration committee that supports implementation and institutionalisation of performance management within the organization. The committee is an advisory body to the NEC authorised to review, guide and support SALGA in the proper implementation and strategic alignment of the organisational performance management policy and procedures, remuneration philosophy and strategy. The performance management and remuneration committee is constituted as follows: Name of member Mr Chose Choeu Ms Elizabeth Dlamini-Khumalo Dr Faizel Randera Ms Laura Machaba-Abiodun Mr William Huma Cllr Thabo Manyoni Cllr Nombulelo Hermans Cllr Nomakhosazana Meth Chairperson Member Member Member Member Ex officio member Ex officio member Ex officio member Role 133

134 Report of the Accounting Authority The members of the performance and remuneration committee have been remunerated for the year under review and prior year as follows: 2015 Name of member Attendance fees * Reimbursed travel cost ** Total Mr Chose Choeu Ms Elizabeth Dlamini-Khumalo Dr Faizel Randera Ms Laura Machaba-Abiodun Mr William Huma Total Name of member Attendance fees * Reimbursed travel cost ** Mr Chose Choeu Ms Elizabeth Dlamini-Khumalo Dr Faizel Randera Ms Laura Machaba-Abiodun Prof Johan Hough Mr William Huma Mr Michael J Olivier (by invitation former chairperson) Mr Zwelibanzi Mntambo (by invitation former member) Total Total * Members of SALGA s NEC sub-committees are remunerated for participating in SALGA s governance structures based on SALGA s policy for remuneration of NEC sub-committees. Attendance fees are based on an hourly rate and claimable hours are capped regardless of the duration of a meeting or preparation time. ** Reimbursed travel allowance is remitted to members based on the applicable SARS rates deemed as expended. 134

135 Report of the Accounting Authority 3. REMUNERATION OF SENIOR MANAGEMENT Senior management includes the Chief Executive Officer, Executive Directors and Provincial Executive Officers. The breakdown of senior management remuneration forms part of the annual financial statements and is reported on note 22 and Remuneration of senior management in aggregate Annual Remuneration Annual remuneration Employer contribution to retirement and pension fund Performance related payments Contribution to medical aid and pension fund Subsistence, cellphone, travel and other allowances Employer contribution to group risk Employer contribution to medical aid Total Remuneration of senior management per person Disclosure of senior management remuneration per PFMA regulation Bonuses and performance Employer contribution Employer Employer related Subsistence to pension & contribution contribution Employee name Basic salary payments *** and other allowances * retirement funds ** to medical aid ** to group risk ** Total Mr Xolile George Mr Nceba Mqoqi Mr Seana Nkhahle Ms Antonette Richardson Mr Simphiwe Dzengwa Ms Lorette Tredoux Mr Rio Nolutshungu Ms Jean De La Harpe Ms Phila Xuza (resigned) Ms Mandu Mallane (Acting) Mr Marx Mupariwa (Acting) Total

136 Report of the Accounting Authority In the current year key management personnel have been redefined in line with the accounting policy and limited to only executive management team (EMT) members who report directly to the Chief Executive Officer. As a result, only portfolio heads in terms of SALGA s business units have been disclosed. ** With effect from 1st April 2014 and in an effort to be competitive in regard to the labour market, SALGA introduced employee benefits to all staff who are all defined contribution short term benefits such as employer contribution to pension, medical aid and group risk cover for all employees including EMT members. The EMT is subject to written employment and performance agreements. The employment agreements regulate duties, remuneration, allowances, restraints, leave and notice periods of these executives. The performance agreements regulate performance and the merit based performance related rewards. None of these service contracts exceed five years. * Other allowances comprise travel allowance, cellphone allowance and acting allowance (where applicable). International per diem is paid to employees who undertake SALGA s mandate of strategic profiling. SALGA s chairperson partakes in governance structures of internal bodies such as the local government Pan-African body, United Cities and Local Governments of Africa (UCLGA) as vice president; he is also President of the UCLGA Southern Africa Regional Office (UCLGA-SARO); SALGA also participates in other world-wide bodies such as United Cities and Local Government (UCLG); Commonwealth Local Government Forum (CLGF) and Metropolis. In pursuit of SALGA s mandate in these bodies the chairperson is supported by the CEO. *** Performance related bonuses are per the SALGA performance management policy that is implemented with an oversight role of the Performance Management and Remuneration Panel, which is comprised of independent non-executive members. The applicable performance rewards are based on merit and the applicable reward rates matrix range from 9% (minimum) to 20% (maximum). SALGA s performance management and remuneration committee is charged with the normalising SALGA s remuneration framework, particularly in instances where salary bands of some executives are on a personal to holder basis till the expiry of the contract or through natural attrition or earlier. The CEO s current remuneration has been identified as one of these category of employees. Notwithstanding the efforts to manage the escalation of remuneration at SALGA, particularly those of executives, it is important to note that SALGA had to review its remuneration policies as they pertain to its executives and benchmark these with municipalities; particularly Metros, since metropolitan municipalities pose the greatest direct remuneration competitor to SALGA (also see report of the chairperson of SALGA s Performance Management and Remuneration Panel in the annual report). 136

137 Report of the Accounting Authority 2014 Contributions Employee name Basic salary to medical aid, pension fund, and retirement funds * Bonuses and performance related payments Subsistence and other allowances Total Mr Xolile George Mr Nceba Mqoqi Mr Lance Joel (resigned) Ms Antonette Richardson Mr Jonathan Patrick (Acting) Ms Lorette Tredoux Mr Rio Nolutshungu Mr Mthobeli Kolisa (resigned) Mr Seana Nkhahle Mr Gcinikhaya Mpumza Ms Lulama Ceba (resigned) Mr Lucky Leseane Mr Sandile Cele (resigned) Mr Thapelo Matlala Ms Gugu Langa Mr Johannes Ruiters (Acting) Ms Nancy Ngwenya Mr Khalil Mullagie Ms Jean De La Harpe Mr Zwelandile Ndlala (Acting) Mr Sabelo Gwala (Acting) Ms Phila Xuza Total * Other allowances comprise of travel allowance, cellphone allowance and acting allowance (where applicable). Prior to the 2014/2015 financial year SALGA s EMT was remunerated on a total cost to company basis. EMT members were permitted to structure their package to allow for a thirteenth cheque, medical aid contribution, pension fund contribution or travel allowance. The EMT is subject to written employment and performance agreements. The employment agreements regulate duties, remuneration, allowances, restraints, leave and notice periods of these executives. The performance agreements regulate performance and the merit based performance related rewards. None of these service contracts exceed five years. 137

138 Report of the Accounting Authority 4. GOING CONCERN CONSIDERATIONS The SALGA NEC reviewed the annual financial statements for 2014/15 and information regarding the forthcoming financial year, to assess the going concern status of SALGA. Based on this information, the NEC has every reason to believe that SALGA will remain a going concern. SALGA will receive Parliamentary grant funding for the next two Medium Term Expenditure Framework (MTEF) periods per the notification from National Treasury via SALGA s executive authority viz. Department of Cooperative Governance and Traditional Affairs (CoGTA). The total Parliamentary allocation for 2015/16 period is R9.2 million; 2016/17 period is R1.4 million and nil for subsequent periods. This allocation notification represents a reduction of R18.6 million in 2015/16 or 67 percent and R27.9 million in 2016/17 period or 96 percent when compared with the 2014/2015 MTEF allocation notification. In 2017/18 the reduction is 100 percent. Notwithstanding the abovementioned reductions in Parliamentary grant funding over the MTEF period the NEC is satisfied that SALGA s continued existence is assured since over the last few years the actual Parliamentary funding has decreased in real terms when compared to total revenue. In 2014/15 the Parliamentary funding represented 5 percent of total revenue; and 6 percent and 7 percent in 2013/14 and 2012/13 respectively. Despite these reductions the organisation has been able to report surpluses as a result of budgetary control and sound financial management practices, hence the NEC is assured of SALGA remaining a goingconcern. The NEC is engaging with the Ministers of CoGTA and Finance in an effort to reinstate SALGA s funding from the national fiscus per the organisation s funding model. SALGA regards the cutting of its funding from the national fiscus as an opportunity, rather than a threat, and is taking measures to strengthen its financial independence. These measures involve research into similar interpersonal organisations and the concept of paid services. Projects are underway to position SALGA as a reservoir of innovation; knowledge and solutions for the local government sector. However, the measures being undertaken to cement SALGA s financial independence do not wholly discard the funding model that was adopted by members at a National Members Assembly held on May 2010 in Kimberley. The funding of SALGA s participation at mandatory intergovernmental relations structures still remains a pivotal element of the funding model. 138 In terms of other funding SALGA has raised R 5.5 million (2014: R 3.8 million) in sponsorship revenue. The organisation has secured R 2.1 million (2014: R 3.9 million) from donors to pursue its mandate in ensuing years. In terms of conditional donor and grant funding secured, the organisation has leveraged about R 8.3 million (2014: R 8.3 million). At 31 March 2015, the statement of financial position shows that SALGA has already secured R 3.6 million (2014: R 6.1 million) as payments received in advance. Included in the amount are membership levies paid in advance by member municipalities of R 3.0 million (2014: R 5.4 million). The remaining R 0.6 million (2014: R 0.7 million) will be defrayed through programme implementation. The statement of financial position reflects total assets of the organisation at 31 March 2015 at R million (2014: R million). This represents an increase in assets of R 45.9 million (2014: R57.1 million) representing 25.7 percent (2014: 47 percent). The organisation is solvent with total assets exceeding total liabilities by R million (2014: R 92.8 million). The solvency rate is 2.00 times (2014: 2.08 times), which means that SALGA had a liability of 100 cents for each 200 cents it held in total assets. Total currents assets stand at R million (2014: R million) which is more than the current liabilities of R million (2014: R 78.7 million).

139 Report of the Accounting Authority The current ratio is then 180 percent (2014: 187 percent) which means that SALGA had R 1,80 (2014: R 1,87) in current assets to cover every R1 of current liabilities. The organisation s operations resulted in an operating surplus of R 18.7 million (2014: R 39.0 million), and the 2015/16 to 2017/18 MTEF cycle budget projects operating surpluses in terms of the organisational strategy. The organisation also reviewed its membership levy formula for the 2015/16, resulting in a projected growth for membership levy revenue of 2.3 percent to R million. The projection for the two outer years of the MTEF cycle is R million and R million for 2016/17 and 2017/18 respectively. In 2016/17 the organisation will disconnect the determination of membership levy revenue from the annual municipal salary budgets to a basis that is linked to CPI with 2015/16 being the base year. Total revenue is projected at R million R million and R million over the 2015/16 MTEF cycle. Other aspects considered in assessing the organisation s going concern are the following: In section 163, the Constitution of the Republic of South Africa envisages an important role for organised local government and provides that an Act of Parliament must cater for the recognition of national and provincial organisations representing municipalities, and determine procedures by which local government may consult the national and provincial government, designate representatives to participate in the National Council of Provinces (NCOP) and nominate persons to the Financial and Fiscal Commission (FFC). Hence the organisation exists as a result of the Organised Local Government Act, 1997 (OLGA) that was enacted by Parliament. SALGA is recognised as the sole voice of organised local government in South Africa. There is no indication in the foreseeable future that the recognition granted by the Minister per the Government Gazette, regulation gazette no. 6087, volume 391 dated 30 January 1998, no may be revoked, and the NEC thus concludes that SALGA will be in existence for the next 12 months. SALGA is constituted by its member municipalities that are spread throughout South Africa. There is no indication in the near future that the governance model of the country in terms of which there are three levels of government (local, provincial and national) will change. Lastly, as indicated above, the organisation has submitted the outcome of its revenue enhancement model to the Executive Authority (Department of Co-operative Governance and Traditional Affairs) as part of the MTEF submission for the 2015/16 to 2017/18 planning cycle, and made necessary representations relating to the adequacy of the SALGA funding from the national fiscus. This submission was preceded by a formal engagement between the SALGA Chairperson and the Minister of Finance on 30 September 2010; and a further engagement between the CEO of SALGA and the Deputy Minister of Finance on 25 January However, the funding model is not fully implemented in the current MTEF cycle as the Executive Authority and National Treasury are considering the model. The NEC will continue to engage the Executive Authority and National Treasury for the implementation of the funding model. Despite the non-implementation of the funding model the NEC is convinced that SALGA s continuation as a going concern is assured. 5. FRUITLESS AND WASTEFUL EXPENDITURE AND IRREGULAR EXPENDITURE 5.1 Fruitless and wasteful expenditure Fruitless and wasteful expenditure is disclosed in note 39 of the annual financial statements. Fruitless and wasteful expenditure amounting to R was incurred during the financial year. SALGA requested and was granted credit notes for fruitless and wasteful expenditure incurred in current and prior years amounting to R The net effect is that there is an over-recovery of fruitless and wasteful expenditure in the current year of R

140 Report of the audit and risk committee 5.2 Irregular expenditure During the year under review, the organisation did not incur any expenditure deemed as irregular expenditure in terms of the Public Finance Management Act, 1999 PFMA, see note 40 to the annual financial statements. 6. LOSSES, IRREGULARITIES AND OTHER MATTERS Losses or irregularities are referred to in Section 55(2)(b) of the PFMA. The organisations materiality and significance framework was developed and agreed to in terms of PFMA Treasury Regulation In terms of Section 55, the following are specified as matters that must be reported on in the annual report and financial statements: (i) any material losses through criminal conduct and any irregular expenditure and fruitless and wasteful; (ii) expenditure that occurred during the financial year; (iii) any criminal or disciplinary steps taken as a consequence of such losses or irregular expenditure or fruitless and wasteful expenditure; (iv) any losses recovered or written off; (v) any financial assistance received from the State and commitments made by the State on its behalf; and (vi) any other matters that may be prescribed. SALGA s annual financial statements comply with the requirement as stated above. 7. MATERIALITY AND SIGNIFICANCE FRAMEWORK The organisation has developed and the NEC approved the materiality and significance framework; developed in terms of the PFMA Treasury Regulation The framework defines aspects of significance and materiality in terms of sections 54(2) and 55(2) (b)(i) of the PFMA. The framework has been agreed to with the Executive Authority as required by the PFMA Treasury Regulation LEGAL PROCEEDINGS The organisation is involved in a civil litigation matter disclosed in note 31 to the annual financial statements. 140

141 Report of the audit and risk committee Temba Zakuza Chairperson: Audit and Risk Committee The Audit and Risk Committee is pleased to present the report for the financial year ended 31 March AUDIT AND RISK COMMITTEE The SALGA Audit and Risk Committee is constituted in terms of section 77(a) of the Public Finance Management Act (PFMA) as well as Treasury Regulations ; 3, and 4 and meets as per its approved terms of reference. The Audit and Risk committee is a sub-committee of the National Executive Committee (NEC). The objectives of the audit committee are as follows: To review the effective, efficient and transparent systems of financial and risk management and internal control maintained by SALGA, which contribute to the efficient and effective utilisation of resources, safeguarding of assets and the accomplishment of established strategic objectives for operations or programmes of SALGA; To promote the efficiency and effectiveness of accounting and management information systems; To monitor that, in accordance with SALGA s responsibility to its members, justifiable decisions pertaining to service rendering are taken as indicated in policy statements, practices and uncovering of malpractice; To have access to a distinct and clear communications channel between the National Executive Committee, Executive Management Team, external auditors and internal auditors; To inform SALGA regarding critical problems which must be addressed concerning the preparation and discussion of the financial statements; To monitor the effectiveness of the internal audit function and internal controls; To monitor management, internal audit and external audit with reference to the drafting and auditing of the financial statements; To enhance the objectivity and credibility of reporting to stakeholders; and In order to achieve its objectives, the audit committee is empowered to request all information necessary to assess and act on and to convene meetings, including in camera meetings, at any time. 141

142 Report of the audit and risk committee 2. AUDIT AND RISK COMMITTEE MEMBERS The Committee comprises members who are external professionals from the private sector. It functions independently of the management structures within SALGA and endeavours to remain and preserve its objectivity at all times. The audit and risk committee consists of the following non-executive independent members: Accounting Authority National Executive Committee Audit and Risk Committee Mr. Temba Zakuza (Chairperson) (independant non-executive members) Ms Octavia Matshidiso Matloa Ms Phumelele Ndumo Mr Nala Mhlongo Adv Motlatjo Ralefatane Name of member and role Mr Temba Zakuza (Chairperson) Qualifications and other roles; board membership (past and present) Qualifications Chartered Accountant, South Africa (CA, SA) Master s in Business Administration (MBA); [University of Stellenbosch] Certified Internal Auditor (CIA) Postgraduate Diploma in Accounting; [University of Cape Town] Postgraduate Diploma in Management Financial Accounting; [University of Cape Town] Bachelor of Commerce (Accounting); [University of the North] Other board membership and professional affiliations Board member of Independent Regulatory Board of Auditors (IRBA) Chairman of Education Training and Development Committee (IRBA) Member of the Education Fund Committee (IRBA) Chairman of the Centlec Audit Committee Chairman of the Mbizana Local Municipality Audit Committee Member of the Eastern Cape Department of Health Audit Committee Member of the COEGA Development Corporation Audit Committee Member of Council WSU and Chairman of Audit Committee Trustee of Thuthuka Education Fund of SAICA Mr Zakuza has held various other positions as member and chairperson of boards and associations and is actively involved in community service initiatives. 142

143 Report of the audit and risk committee Name of member and role Ms Octavia Matshidiso Matloa (member) Qualifications and other roles; board membership (past and present) Qualifications Chartered Accountant, South Africa (CA, SA) Bachelor of Commerce, [University of Cape Town] Honours Bachelor of Commerce, [University of Pretoria] Other board membership and professional affiliations Member of Audit and Risk Committee; Petra Diamonds Member of Audit and Risk Committee; National Treasury Member of Audit and Risk Committee; Department of Defence and Military Veterans Member of Audit and Risk Committee; Village Main Reef Member of Investment Committee; Village Main Reef Member of Nomination and Governance Committee; Village Main Reef Member of Audit and Risk Committee; Great Basin Gold Member of Audit Committee; Department of Transport Member of Audit Committee; Urban Transport Fund Member of Audit Committee; City of Tshwane Member of South African Women in Mining Association Ms Matloa holds various directorships in several companies including Tsidkenu Chartered Accountants Inc. and Trusteeship in non-profit organisations. Name of member and role Ms Phumelele Ndumo (member) Qualifications and other roles; board membership (past and present) Qualifications Bachelor of Commerce; [University of KwaZulu-Natal] Higher Diploma in Computer Auditing; [University of the Witwatersrand] Master s in Business Leadership (MBL); [University of South Africa] Executive Women Development Programme; {Gordon Institute of Business Science] Other board membership and professional affiliations Non-executive director; Rand Water Board Member of the Audit Committee; Department of Trade and Industry Chairman of the Risk Committee; Department of Trade and Industry Member of the Operations Committee; Government Employees Medical Scheme Non-executive director and chairman of the Audit Committee; City of Johannesburg Revenue Management Unit Member of Audit Committee; Department of Transport Chairman of Audit Committee; Sedibeng Water Member of Audit Committee; Magalies Water Ms Ndumo has held various other positions and is actively involved in community development initiatives. 143

144 Report of the Audit and Risk Committee Name of member and role Mr Nala Mhlongo (member) Qualifications and other roles; board membership (past and present) Qualifications Chartered Global Management Accountant (CGMA) Chartered Management Accountant (ACMA) Chartered Accountant, South Africa (CA, SA) Bachelor of Commerce; [University of the Western Cape] Honours Bachelor of Commerce; [University of the Western Cape] Other board membership and professional affiliations Chairman of Audit Committee; KwaZulu-Natal Gambling and Betting Board Chairman of Audit and Risk Committee and board member; Cross-Border Road Transport Agency Chairman of Audit and Risk Committee; and board member; Water Research Commission Chairman of Risk Committee; Companies and Intellectual Properties Commission (CIPC) Member of Audit Committee; Companies and Intellectual Properties Commission (CIPC) Part-time Commissioner; Department of Trade and Industry Copyright Review Commission Member of Audit Committee; KwaZulu-Natal Provincial Government Mr Mhlongo has held various other positions in boards and board sub-committees and has been a Chief Financial Officer of various private and public sector institutions. 144 Name of member and role Advocate Motlatjo Ralefatane (member) Qualifications and other roles; board membership (past and present) Qualifications B. Proc; [University of the North] Bachelor of Laws (LLB); [University of the North] Advocate of the Supreme Court of South Africa Certificate in Labour Relations; [University of Pretoria] Certificate in Human Rights; [University of Pretoria] Certificate in Corporate Governance; [Institute of Directors of South Africa] Certificate in Directorship; [University of the Witwatersrand] Adv. Ralefatane also holds various other qualifications from several institutions. Other board membership and professional affiliations Member of board; South African Medical Research Council (MRC) Member of board; Technology Innovation Agency (TIA) Non-executive director; Road Accident Fund (RAF) Chairman of the Human Capital and Remuneration committee; Road Accident Fund (RAF) Acting Judge; Labour Court Non-executive director; Gauteng Enterprise Propeller (GEP) Chairperson of Audit Committee; Ephraim Mogale Local Municipality Member of the Institute of Directors; Member of the Institute of Internal Auditors Adv Ralefatane has held various other non-executive directors positions in boards and board sub-committees and is actively involved in community development initiatives. She also held roles as an Appeals Adjudicator for the Department of Home Affairs.

145 Report of the Audit and Risk Committee 3. AUDIT AND RISK COMMITTEE MEMBERS ATTENDANCE Five meetings were held during 2014/2015 financial year. These meetings were attended by external auditors, the Chief Executive Officer, Chief Finance Officer, the Head of Internal Audit, and other relevant corporate officials. The Chairperson of the Audit Committee reports on committee activities to the National Executive Committee on a regular basis. All members give a declaration at each Audit Committee meeting of any personal or financial interests that may conflict with their duties in this regard. The table below highlights the Audit Committee members and the record of attendance of Audit Committee meetings. Member Mr Temba Zakuza Chairperson Ms Octavia Matshidiso Matloa Member Ms Phumelele Ndumo Member Record of Attendance 22 May July September January March 2015 Mr Nala Mhlongo Member Advocate Motlatjo Ralefatane Member 4. AUDIT COMMITTEE RESPONSIBILITY The Audit Committee reports that it has complied with its responsibilities arising from Section 51(1) (a) (ii) and section 76(4) (d) of the PFMA as well as Treasury Regulations The audit committee adopted appropriate formal Terms of Reference as its audit committee charter and has regulated its affairs in compliance with these terms of reference and has discharged all its responsibilities as contained therein. 5. THE EFFECTIVENESS OF INTERNAL CONTROL The review of the effectiveness of the system of internal control by the audit committee is informed by the reports submitted by the internal audit function and management who are responsible for the development and maintenance of the internal control system. Minor weaknesses have been reported from the reports issued by the Internal Audit Function and Auditor General. These weaknesses continue to be addressed by management. 6. RISK MANAGEMENT An organisational risk register that identifies the major risks and potential threats to the strategic and directorate/provincial objectives of SALGA has been developed. These risks are analysed, evaluated and mitigated by means of suitable measures. Management has also developed action plans to reduce the severity of each risk exposure to an acceptable level. On a quarterly basis, the Risk Management Unit reviews management assertions made on the status of implementation of action plans in the risk register and reports them to the audit and risk committee. The internal audit function follows a risk-based approach and developed an appropriate Internal audit coverage plan in order to provide assurance on the effectiveness of risk mitigating measures. 145

146 Report of the Audit and Risk Committee 7. EVALUATION OF FINANCIAL STATEMENTS The audit committee has: Evaluated the annual financial statements and performance information of SALGA for the period ended 31 March Reviewed the Auditor-General s report to management and management response thereto. The audit committee concurs and accepts the Auditor-General s conclusion on the annual financial statements. It is of the opinion that the audited financial statements be accepted and read in conjunction with the report of the Auditor-General. Temba Zakuza Chairperson of the audit committee Pretoria 31 July

147 Report of the Performance Management and Remuneration Committee Chose Choeu Chairperson: Performance Management and Remuneration Committee The performance management and remuneration committee is pleased to present its report for the year ended 31 March PERFORMANCE MANAGEMENT AND REMUNERATION COMMITTEE The performance management and remuneration committee (REMCO) is a sub-committee of the National Executive Committee (NEC) and it supports implementation and institutionalisation of performance management within the organisation. The Committee is an advisory body to the NEC, authorised to review, guide and support SALGA in the proper implementation and strategic alignment of the organisational performance management policy and procedures, remuneration philosophy and strategy. 2. RESPONSIBILITIES OF THE COMMITTEE The National Executive Committee of SALGA established the performance management and remuneration committee as its advisory body that has an oversight over the implementation of the performance management system policy and procedures, as well as the remuneration policies and practices of SALGA. The main purpose of the performance management and remuneration committee is to ensure the adoption of remuneration policies which: Aim to attract and retain top talent; Are aligned with the organisation s strategy; and Arive performance in the long-and short-term. The Performance management and remuneration committee was established to assist SALGA in maintaining the integrity of the performance management system; exercise oversight over the implementation of the performance management system and policy, as well as the remuneration policies and practices within SALGA; confirm the appropriateness of the institutional goals of SALGA in pursuing its strategy; ensuring objective performance reviews; considering and making recommendations on all matters relating to performance management and remuneration to the National Executive Committee. The committee has oversight over the following: Review and ensure the proper application of organisational performance management policy and procedures, remuneration philosophies, strategies and other policies aligned to the approved organisational strategy and objectives of SALGA; The committee is empowered to consider and make recommendations to the National Executive Committee on all matters relating to the performance management and remuneration of SALGA; Policy frameworks and policy decisions taken by the REMCO shall be binding to all administrative structures of SALGA; and 147