STRATEGIC PLAN AND BUDGET 2013 TO 2016 MUNICIPAL DEMARCATION BOARD BRIEFING TO THE PORTFOLIO COMMITTEE ON COOPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS 19 MARCH 2013 DELEGATION Mr LJ Mahlangu Chairperson: Municipal Demarcation Board Ms N Gwayi Deputy Chairperson: Municipal Demarcation Board Ms G C Gumbi Masilela Chief Executive Officer Mr DKN Ligege Chief Financial Officer Mr A Ramagadza Executive Manager: Operations and Research 1
OUTLINE INTRODUCTION RECAP FROM LAST BRIEFING PERFORMANCE IN THE CURRENT FINANCIAL YEAR QUARTER 3 OF 2012-13 PERFORMANCE RESULTS AGAINST TARGETS QUARTER 3 FINANCIAL RESULTS 2013 2018 STRATEGIC PLAN 2013 STRATEGIC PRIORITIES 2013 ANNUAL PERFORMANCE TARGETS MEDIUM TERM EXPENDITURE FRAMEWORK CHALLENGES CONCLUDING REMARKS 2
INTRODUCTION Current Board is the third since the establishment of the institution. There are currently eight of the 10 members of the Board and the Minister is in the process of replacing the two members. Our mandate is derived from the Constitution, The Municipal Demarcation Act (27 of 1998) and other suite of Local Government legislative mandates. VISION The Board s vision is the full realisation of Constitutional and local democracy in South Africa characterized by functional and viable municipalities, spatially configured so that its boundaries and wards covers the whole territory of the Republic, including productive and inclusive metropolitan municipalities, sufficiently and optimally capacitated district and local municipalities which are supported by sound local government system. MISSION To perform its functions and to exercise its powers in such a manner as to empower municipalities to fulfil their constitutional obligations, primarily the provision of democratic and accountable local government, and effective, efficient and sustainable service delivery within sound boundaries. 3
RECAP FROM LAST BRIEFING The last briefing by the Board was on 10 October 2012. The purpose was to present the 2011-12 Annual Report The Portfolio committee raised concerns about the traditional council boundaries whether it is within the Board s mandate The mandate for traditional authority boundaries lies with the Department of Land Affairs However when the municipal boundary affects the traditional council boundaries the Board consult with the traditional authorities The Committee advised the Board to involve constituency offices in public participation particularly in rural areas The Board recognises the need to collaborate with constituency offices in order to improve public participation in rural areas 4
Broad process and timeframes within current legal framework: 2011-2016 Delimit wards Prepare for local elections Re-determine municipal boundaries 2011 2012 2013 2013 2014 2015 2015 2016 5 Consultation and legal process June 2011 to Oct 2013 Consultation and legal process Nov 2013 - June 2015 IEC process July 2015 - April 2016
PERFORMANCE IN THE CURRENT FINANCIAL YEAR Step 1 MDB publishes s26 to show its intention to consider municipal boundary proposals for written public views and representation This process has been completed Step 2 Considers all views and representations submitted to it The Board makes a decision either to close the case or publish section 21 The Board may hold public meeting, conduct investigations or do both prior to making a decision 33 Public meetings and 5 formal investigations will be completed by May 2013 Step 3 Step 4 The Board will make decisions of outstanding cases, and published in respective Provincial Gazettes for objections by any interested party The Board may vary, confirm or withdraw its decision after consideration of objections All municipal boundary redetermination will be communicated to the IEC, Minister of Finance If the redetermination affects the representation of voters in any of the affected municipal councils, the redetermination takes effect on the date of next election,. If not, the redetermination takes effect during the next municipal financial year. 6
PERFORMANCE IN THE CURRENT FINANCIAL YEAR Performance against Broad work programme Time frame Activity Status April - June 2012 Briefed municipalities on process. Conducted municipal visits to explain possible 558 technical corrections to boundaries, and to ask proposals for further boundary changes. Considered inputs and mapped new proposals received. Disseminated information to municipalities Conducted municipal visits for further consultations. June September 2012 Administrative preparation of the legal process Preparation for the launch of the capacity assessment Follow-up meeting were done with Districts, MEC s in all provinces on proposals Completed Completed October December 2012 Review of all proposals by Board and staff Media launch of section 26 process Published all section 26 notices to invite views and representation on cases Launch of the National capacity assessment report Completed 7
PERFORMANCE IN THE CURRENT FINANCIAL YEAR Work in progress Time frame Activity Status January - February 2013 Analysed inputs received post section 26 Reviewed all maps were appropriate Completed March - May 2013 Determine need for formal public hearings, and further investigations, and public notices in this regard. May - June 2013 Formal section 28 public hearings, where necessary. Publish section 21 notices for objections. In progress Not started July 2013 Closing date for section 21 objections. Not started Aug 2013 Considers objections and decides which boundary changes should be confirmed, varied or withdrawn. Not started 8
PUBLIC PARTICIPATION The Board has prioritized public participation as a critical part of the Board s work Each Board members has been allocated to provinces to assist in public participation Public meetings have been scheduled from April 2013 The public meetings will be communicated to local communities, constituency office, and other stakeholders via local radio stations, local and national newspapers 9
PERFORMANCE IN THE CURRENT FINANCIAL YEAR Consultative Process 2011-2012 Province Number of meetings held Eastern Cape 19 Free State 12 Gauteng 9 Kwa-Zulu Natal 26 Limpopo 13 Mpumalanga 10 North West 9 Northern Cape 11 Western Cape 10 Total 119 10
PERFORMANCE IN THE CURRENT FINANCIAL YEAR Stakeholder engagement and public participation has been improved significantly District or regional meetings were held for all municipal boundary requests All Houses of Traditional Leaders were visited and briefed by the Board All MEC s responsible for local government were visited and briefed All Premiers were informed of the Demarcation programme 11
PERFORMANCE IN THE CURRENT FINANCIAL YEAR Total number of cases considered by the Board broken down per province per type Province Total Number of DEMs TYPE A TYPE B TYPE C Eastern Cape 225 135 83 7 Free State 86 54 26 6 Gauteng 85 61 9 15 KwaZulu-Natal 276 150 91 35 Limpopo 99 47 49 3 Mpumalanga 74 55 15 4 North West 63 54 7 2 Northern Cape 39 35 3 1 Western Cape 81 78 2 1 Total 1028 669 285 74 12
PERFORMANCE IN THE CURRENT FINANCIAL YEAR Cases published for public views and representation in term of section 26 Province Total Number of DEMs TYPE A TYPE B TYPE C Eastern Cape 35 14 19 2 Free State 10 3 4 3 Gauteng 4 2 2 KwaZulu-Natal 51 12 28 11 Limpopo 13 4 9 0 Mpumalanga 6 2 3 1 North West 25 19 6 0 Northern Cape 21 20 1 0 Western Cape 39 37 2 0 Total 204 113 72 19 13
PERFORMANCE IN THE CURRENT FINANCIAL YEAR Reasons for cases to be rejected or closed: Proposal to align to magisterial boundary: These matters could not be considered since the Department of Justice is in the process of aligning magisterial boundaries to the current municipal boundaries as per Cabinet Resolution of 1998. No Concurrence: These matters could not be considered since all affected stakeholders were not in support of the proposal(s). No Compliance to Legislation: These matters could not be considered since the proposal(s) did not meet the legislative criteria in terms of the Municipal Demarcation Act and / or Municipal Structures Act. 14
PERFORMANCE IN THE CURRENT FINANCIAL YEAR Status of determination cases post Section 26 Province Cases to be closed Cases to be redetermined Cases for formal investigations Cases for public meetings Eastern Cape 5 13 19 0 Free State 0 5 5 3 Gauteng 0 1 3 3 KwaZulu-Natal 7 9 33 15 Limpopo 2 6 5 0 Mpumalanga 1 1 4 0 North-West 4 17 4 0 Northern Cape 0 20 1 0 Western Cape 3 30 6 0 Total 22 102 80 21 15
PERFORMANCE IN THE CURRENT FINANCIAL YEAR 16
3 RD QUARTER FINANCIAL RESULTS Summary of financial results for the period ended Dec 2012 R 000 Actual YTD Budget YTD Budget Variance 2011/12 (Audited) Government funding 31 077 31 077 0 38 482 Other income 598 0 598 641 Employee cost 10 205 12 942 2 738 12 061 Goods and services 14 959 16 370 1 411 21 447 Lease payments 1 765 1 765 0 2 311 Total 26 929 31 077 4 148 35 819 Surplus for the year 4 746 0-4 746 3 304 17
3 RD QUARTER FINANCIAL RESULTS Summary of financial results for the period ended Dec 2012 18
3 RD QUARTER FINANCIAL RESULTS Breakdown of expenditure for the period ended Dec 2012 Goods and Services R 000 Actual YTD % Administrative expenses 7 325 49% Audit fees 648 4% Project expenses 3 108 21% Operating expenses 763 5% Depreciation and amortisation 876 6% Travelling expenses 2 239 15% Total 14 959 100% 19
2013-2018 STRATEGIC PLAN Strategic To determine and re-determine boundaries of local, district and Objective metropolitan municipalities Objective Plan and implement a process to finalise 100% of requests received, or initiated, statement in terms of Section 22 of the Demarcation Act, 1998, by 2013. The process will comprise of different phases including planning, consultation, compliance to legal provisions, and the finalisation of all changes to municipal boundaries during 2013. Action 100% of process to ensure that municipalities qualifying for metro status indeed become metros on the date on the next local government elections. Advise service delivery departments of changes to municipal boundaries Declaration and withdrawal of district management areas Strategic Objective Delimitation of wards for all local and metropolitan municipalities for the 2016 local elections. Objective Plan and implement a process to delimit ward in 100% of local and metropolitan statement municipalities by mid 2015 in terms of Schedule 1 to the Local Government: Municipal Structures Act, 1998. The process will comprise of different phases including planning, consultation, compliance to legal provisions, and the finalisation of all ward for the 2015 local elections. 20
2013-2018 STRATEGIC PLAN Strategic Objective Objective statement Assessment of the capacity of metropolitan, district and local municipalities Ensures that consultants appointed by the Board delivers 100% of the outcomes specified in their contracts with the Board. Provide quality municipal capacity assessment reports and recommendations to MECs for local government regarding adjustments of powers and functions in compliance with Section 85 of the Local Government: Municipal Structures Act, 1998 Strategic Objective Ensuring Good Governance and sound financial management Objective statement Manage resources to accomplish strategic goals, effective financial planning, ensure adherence to laws, regulations and contractual obligations, ensure effective efficient use of resources Compliance with legal frameworks. Improve efficiency and effectiveness of administrative processes and systems. 21
2013-2018 STRATEGIC PLAN Strategic Board supported by effective and efficient organisation, organisational Objective processes, systems and practices Objective Implement the outcomes of the Organisational Development Initiative (OD) statement Monitor individual performance contracts that supports strategic objectives Maintain an internship programme to mitigate risks associated with staff turnover Maintain acceptable employee satisfaction levels Develop and nurture capability at all levels within the Board Compliance with employment equity legislation Strategic Objective Stakeholder Relations Objective statement Stakeholder Management function to drive strategies and implement plans Participation in joint structures and Initiatives 22
2013 STRATEGIC PRIORITIES The primary area of performance for the period 2013/14 will be: On-going review of municipal boundaries; On-going assessment of municipal capacity; Planning for the delimitation of wards in 2014/15. Re-organisation of the institutional administrative structures; Enhancement of stakeholder relations and communication; Enhancement of operations through national and international studies; Maintenance and improvement of governance structures; and On-going compliance with relevant legislative and regulatory requirements. 23
2013 ANNUAL PERFORMANCE TARGETS Programme 1 Performance Indicator Date of completion of formal investigations for Local, District and Metropolitan municipalities Turnaround time for administrative purposes Activity Finalise formal investigations for all approved redeterminations. Publish section 21 notices in Provincial Gazettes for all cases approved by Board. Reporting period Quarterly Quarterly Annual Target 30 September 2013 15 days from Board approval Quarterly targets 1 st 2 nd 3 rd 4 th Formal N/A N/A investigation for categorisation of Metro municipalities finalised by 31 July 2013 Formal investigations for redetermination of District and Local municipalities finalised by 30 June 2013 15 days from Board approval 15 days from Board approval N/A N/A Percentage of objections considered Turnaround time for administrative purposes Consider objections to section 21 notices Publish section 21(5) notice in Provincial Gazettes for all cases approved by Board Quarterly Quarterly 100% of objections received 15 days from Board approval 100% of objections received 15 days from Board approval 100% of objections received 15 days from Board approval N/A N/A N/A N/A 24
2013 ANNUAL PERFORMANCE TARGETS Programme 1 Performance Indicator Activity Reporting period Annual Target Quarterly targets 1 st 2 nd 3 rd 4 th Date of handover of national municipal dataset Model for categorisation of metropolitan municipalities is developed and approved by target date Number of discussion papers published by the Board Provide IEC with national municipal dataset Develop a Model for categorisation of metropolitan municipalities Produce discussion paper Quarterly Quarterly Quarterly 30 September 2013 Model for categorisation of metropolitan municipalities is approved by the Board 2 discussion papers published One meeting with IEC Develop Business Case for the project Provide national municipal dataset by 30 September 2013 Design new model for categorisation of metro s N/A Conduct consultations with stakeholders and amend draft Model accordingly N/A N/A Discussion paper on the impact of ward delimitation process on local governance N/A Model for categorisation of metropolitan municipalities is approved by the Board Discussion paper on historical linkages of communities in South Africa 25
2013 ANNUAL PERFORMANCE TARGETS Programme 1 Performance Indicator Development and adoption of a policy document Activity Commence in 2013 with planning, including policy, guidelines, format, and process Reporting period Quarterly Annual Target Implementation Plan approved by Board Quarterly targets 1 st 2 nd 3 rd 4 th N/A Review policy, Advise the N/A guidelines & Minister on the implementation ward delimita- plan tion implementation plan Number of municipalities where data has been collected. Collect 2011/12 data from all municipalities Bi-annually 278 municipalities in SA N/A 278 municipalities N/A N/A Number of qualitative indepth assessment reports completed per district. Compile indepth qualitative reports Annually 44 in-depth reports N/A N/A 22 district reports 22 district reports 26
2013 ANNUAL PERFORMANCE TARGETS Programme 2 Performance Indicator Activity Reporting Annual Quarterly targets period Target 1 st 2 nd 3 rd 4 th Current ratio Quarterly 2:1 2:1 2:1 2:1 2:1 Annual and mid-term budget reviews completed. Annually Monthly Financial Reports are compiled in accordance to related legislatives and submitted to business units/stakeholders on time. Goods and services are procured within the related legislative. Compile Annual and Mid-term budget review as per NT guidelines Compile financial reports Mid-term review completed by deadline Monthly 100% Monthly financial reports are accurate, complete, and reliable & submitted within deadline 100% no irregular expenditure Signed and approved reports. MTEF submitted to National Treasury within deadline. Signed and approved reports. ENE submitted to National Treasury within deadline. Signed and approved reports. 100% no irregular expenditure Signed and approved reports. Internal Audit rating Quarterly 2 2 2 2 2 Actual expenditure to Monthly budget Quarterly Within 5% Within 5% Within 5% Within 5% Within 5% revenue received monitoring variance variance variance variance variance 27
2013 ANNUAL PERFORMANCE TARGETS Programme 2 Performance Indicator Activity Reporting period Annual Target Audit Opinion by the AG Annually Unqualified with no Emphasis of matter Quarterly targets 1 st 2 nd 3 rd 4 th Unqualified with no Emphasis of matter. 100% compliance with all relevant legislative, regulatory and policy requirements Implementation of checklists to ensure compliance Annually 100% compliance with all relevant legislative, regulatory and policy requirements 100% 100% 100% 100% Risk Register Perform risk assessment for the Board. Quarterly Compilations of a consolidated risk register for the Board Risk assessment workshops conducted for all clusters and risk register updated Risk register Perform risk assessment for the Board Quarterly 28
2013 ANNUAL PERFORMANCE TARGETS Programme 3 Performance Indicator Employee Programme Assistance Percentage of employees assessed Conduct employee satisfaction surveys Training development and Activity To arrange quarterly for the rendering of appropriate services. To identify and manage employees who are in need of special intervention Schedule all employee performance assessments. Number of surveys conducted Developed and finalised PDPs after consultation with employees. Reporting period Quarterly Annual Target Four EAP interventions Quarterly targets 1 st 2 nd 3 rd 4 th One EAP One EAP intervention intervention per quarter per quarter One EAP intervention per quarter Quarterly 100% 100% of performance reviews to be signed and submitted. 100% of performance reviews to be signed and submitted. 100% of performance reviews to be signed and submitted. One EAP intervention per quarter 100% of performance reviews to be signed and submitted. Annually One survey N/A One survey N/A N/A Quarterly 100% 25% of employees to attend training per quarter. 25% of employees to attend training per quarter. 25% of employees to attend training per quarter. 25% of employees to attend training per quarter. 29
2013 ANNUAL PERFORMANCE TARGETS Programme 3 Performance Indicator HRM Systems Information Maintain an internship programme Activity Manage leave, performance and access control for accurate and reliable data at the end of the month. Recruit candidates for internship on an annual basis. Reporting Annual Quarterly targets period Target 1 st 2 nd 3 rd 4 th Quarterly 100% 100% of 100% of 100% of 100% of reliable and reliable and reliable and reliable and accurate accurate accurate accurate information information information information retrieved from retrieved from retrieved from retrieved from the information the information the information the systems. systems. systems. information systems. Quarterly 100% 100% of 100% of 100% of 100% of objectives objectives objectives objectives designated for designated for designated for designated interns to be interns to be interns to be for interns to achieved per achieved per achieved per be achieved quarter. quarter. quarter. per quarter. 30
2013 ANNUAL PERFORMANCE TARGETS Programme 3 Performance Indicator Stakeholder relations strategy in place Activity Implement stakeholder relation strategy Reporting period Quarterly Annual Target Stakeholder relations strategy in place Quarterly targets 1 st 2 nd 3 rd 4 th Hold Conduct workshops awareness with some of campaigns the key strategic stakeholders in provinces and municipalities Develop stakeholder strategy Implement the strategy Implement stakeholder engagement plan Communication strategy in place Implement stakeholder engagement plan Implement Communication strategy Quarterly Quarterly Engagement with stakeholders Engagement with communicati on stakeholders Engagements with National Stakeholders Develop communicatio n strategy Engagements with stakeholders in 3 provinces Hold workshops with some of the key strategic stakeholders in provinces and municipalities Engagements with stakeholders in 3 provinces Conduct awareness campaigns Engagement s with stakeholders in 3 provinces Implement the strategy 31
MEDIUM TERM EXPENDITURE FRAMEWORK Government is determined to reduce spending over the next 3 years National Treasury has implemented baseline reductions of 1%, 2% and 3% The rationale is to: cut consumption expenditure and make provision of infrastructure investment reduce debt and debt servicing cost 32
MEDIUM TERM EXPENDITURE FRAMEWORK This implies fewer resources for Local government and ultimately the Municipal Demarcation Board over the next 3 years Implications for MDB (R2.7 million) 2013/14 allocation reduced by R426 000 (1% reduction) 2014/15 allocation reduced by R903 000 2015/16 allocation reduced by R1.4 million 33
MEDIUM TERM EXPENDITURE FRAMEWORK To be a financially sustainable institution Mitigate risk of inadequacy and uncertainty of future funding Minimise long-term fixed expenditure such as employee cost through use of contractual employment Pursue savings in inefficient processes Pursue 1% expenditure on regulatory audit Invest in information technology to streamline data collection (capacity assessment) Pursue donor funding for Local government research activities and outputs 34
MEDIUM TERM EXPENDITURE FRAMEWORK Historic performance R 000 2008/09 2009/10 2010/11 2011/12 Government funding 25 420 34 557 37 187 38 482 Other income 532 730 692 641 Employee cost 8 224 10 063 11 322 12 061 Goods and services 14 103 15 284 22 344 21 447 Lease payments 2 292 2 292 2 311 2 311 Total 24 619 27 639 35 977 35 819 Surplus for the year 1 333 7 648 1 902 3 304 35
MEDIUM TERM EXPENDITURE FRAMEWORK Budget parameters Projections for headline CPI inflation: 2013/14: 5.3% 2014/15: 4.9% 2015/16: 4.6% Salary increments based on CPI +1% Vacant positions on new organisational structure budgeted for on three year contracts Acquisition of new/additional leased premises (additional 30% leased space) 36
MEDIUM TERM EXPENDITURE FRAMEWORK Expenditure by Economic classification MTEF expenditure by economic classification R 000 2013/14 2014/15 2015/16 Compensation to employees 22 349 23 668 24 756 Lease payments 2 311 3 010 3 010 Goods and services 22 475 23 263 23 523 Total operating expenditure 46 631 48 965 51 079 Capital expenditure 503 975 210 Gross expenditure 47 134 49 940 51 289 37
MEDIUM TERM EXPENDITURE FRAMEWORK Expenditure by Economic classification Programme R 000 2013/14 2014/15 2015/16 % share (budget year) P1 : Operations and Research 17 577 18 477 19 327 37% P2 : Financial Management 6 346 7 623 7 163 13% P3 : Corporate Services 23 211 23 840 24 798 49% Total operating expenditure 47 134 49 940 51 289 100% Capital expenditure 503 975 210 38
MEDIUM TERM EXPENDITURE FRAMEWORK New and significant programmes Sub-Programme Programme Description Amount Stakeholder management Legal and secretariat Capacity assessment Provide stakeholder management and communication services to the Board and its administration Provide legal advice, administration of Board secretariat Conducts assessment of municipal capacity annually R3.8 million R2.2 million R4.9 million 39
MEDIUM TERM EXPENDITURE FRAMEWORK Utilisation of accumulated funds UTILISATION OF ACCUMULATED FUNDS R'000 Surplus funds at 31 March 2012 20 245 2013/14 - funding of deficit (4 192) Projected Funds at 31 March 2014 16 053-2014/15 - funding of deficit (5 260) Projected Funds at 31 March 2015 10 793-2015/16 funding of deficit (5 146) Projected funds at 31 March 2016 5 647 40
CHALLENGES Inadequate capacity of the staff in the context of doing things differently Only 1 full-time Board member The lack of research capacity and funding undermines the efficiency of the Board to discharge its mandate Limited stakeholder management and public participation were undertaken during the last two years because of capacity challenges. The institution s dependence on consultants for strategic projects will continue as long as there s inadequate capacity internally Mismatch of Board Work program and budgeting cycle Proposals of boundary changes outside of the Board s mandate 41
CONCLUDING REMARKS The Board recognises the need to maintain and improve public participation, to this end Board are committed to face to face engagement in each province with key stakeholder including Premiers, MEC, Mayors etc. For the Board to function properly, the current budgetary resources will not sustain the Board s mandate beyond the MTEF. It is imperative that the Board is allocated its resources directly by Parliament 42
Thank you 43