COGTA  Annual report FY 2011-2012
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COGTA Annual report FY 2011-2012 presentation to the portfolio committee on cooperative governance and traditional affairs. 09 October 2012. OVERVIEW OF THE PRESENTATION. SECTION A- Department of Cooperative Governance Part 1 – Overview Update on the DCoG organizational structure

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09 october 2012

COGTA Annual report FY 2011-2012 presentation to the portfolio committee on cooperative governance and traditional affairs

09 October 2012


Overview of the presentation

OVERVIEW OF THE PRESENTATION

SECTION A- Department of Cooperative Governance

Part 1 – Overview

  • Update on the DCoG organizational structure

    Part 2 -Programme performance against annual targets 2011/12 and related challenges

    Part 3-Overview of Financial Performance 2011/12

    Part 4 -Response to concerns raised by the Portfolio Committee on the 2010/11 AR

    Section B- Department of Traditional Affairs

2


09 october 2012

Part 1Overview

3


09 october 2012

Vision Statement

An integrated, responsive and highly effective governance system

Our mission is to facilitate cooperative governance and support all spheres of

government through:

  • The Development and implementation of appropriate policies and regulatory mechanisms to promote integration of government development programmes;

  • Achievement of social cohesion through the creation of enabling mechanisms for communities to participate in governance; and

  • Monitoring and evaluation of cooperation amongst government stakeholders to achieve improved service delivery.

Mission Statement

4


Strategic goals

STRATEGIC GOALS

  • Strategic Goal 1: To implement a differentiated approach to municipal financing, planning and support;

  • Strategic Goal 2: To improve Access to Basic Services;

  • Strategic Goal 3: To implement the Community Work Programme;

  • Strategic Goal 4: To deliver actions supportive of the human settlement outcomes;

  • Strategic Goal 5: To deepen democracy through a refined Ward Committee model;

  • Strategic Goal 6: To improve administrative and financial capability;

  • Strategic Goal 7: To implement a Single Window of Coordination;

  • Strategic Goal 8: To improve cooperative governance across the three spheres; and

  • Strategic Goal 9: To strengthen the capacity and capability of the department to deliver on its mandate

    Seven of the Nine strategic goals are directly aligned to the outputs of the

    delivery agreement on outcome 9


Organisational structure

Organisational Structure

All critical posts have been filled and all officials that were displaced have been placed


09 october 2012

Part 2PROGRAMME PERFORMANCE AND CHALLENGES


Overview of dcog performance

Overview of DCoG Performance

Reasons for non-achievement are disclosed in the Annual Report and vary per project

from pending consultations to projects that have dependencies or lead by other departments.

The 2012/13 APP outlines only projects that DCoG is responsible for to ensure accurate

reporting and avoid audit findings. The 2012/13 APP includes some of the key projects that were

not achieved in the previous financial year


Highlights of the fy 2011 12

Highlights of the FY 2011/12


Highlights of the fy 2011 121

Highlights of the FY 2011/12


Programme1 administration

Programme1: Administration

Strategic Objective: Management of internal financial, administration, and human resource systems

  • We developed the Human Resource Plan for the period 2012/13;

  • We also revised the asset management policy and guidelines, Accommodation Strategy and service standards for SCM for implementation;

  • Of the R419 million irregular expenditure reported we managed to facilitate the condonment of R174 million irregular expenditure. The balance is waiting for National Treasury approval;

  • We transferred all payments to our stakeholders in full compliance with DORA; and

  • We were able to capacitate 95 municipalities on communication strategy.


Programme1 administration cont

Programme1: Administration cont..

  • Strategic Objectives

  • To improve the strategic management and governance processes; and

  • To ensure integrated planning and reporting

  • We facilitated all quarterly organisational performance reviews as planned;

  • We also ensured that the APP 2012/13 is approved and submitted to NT and Parliament on time;

  • We executed nine of the planned eleven audits and issued management reports which are then followed through at our Senior Management Committee Meetings;

  • All branches implemented the approved risk management strategy by setting strategic and operational risks and reporting on then on a periodic basis ;

  • As a proactive effort we facilitated fraud risk assessments and compiled a fraud risk register which outlines potential fraud areas; and

  • We developed the Anti Corruption strategy and resuscitated the necessary reporting and monitoring structures.


Programme 2 policy research and knowledge management

Programme 2: Policy Research and Knowledge Management

Strategic Objective: To develop a revised white paper on local government;

• To improve performance monitoring and evaluation; and

• To create a knowledge base for decision making.

  • We finalised the analysis of identified legislation that impede service delivery. The report has been sent to sector departments, SALGA, Controlesa and the National House of Traditional Leaders for verification; and

  • We also managed to develop the Knowledge Management Strategy


Programme 3 governance and intergovernmental relations

Programme 3: Governance and Intergovernmental Relations

Strategic Objectives: To review Local Government policy and legislation;

To improve the Audit outcome of Municipalities;

To implement initiatives to improve administrative and financial management and expenditure

To ensure effective management of the Municipal infrastructure Grant; and

To strengthen Anti-corruption capabilities of municipalities

  • We finalised the Green Paper on Cooperative Governance;

  • We finalised the Bill on Support, Monitoring and Interventions. This will now give the Minister more powers to intervene in terms of section 100 and 139 of the Constitution;

  • We secured funding from the national fiscus to fund ward committee operations in grades 1 to 3

    municipalities;

    Through our coordination efforts aimed at supporting improved audit outcomes of municipalities the following progress is recorded:

  • 223 of 278 municipalities managed to establish Municipal Public Accounts Committees(MPACs), in some

    of the remaining 20% of municipalities that have not established MPACs (the main challenge is the size of

    such municipalities)

  • 220 of the 278 (79%) municipalities have internal audit units in place;

  • 253 of the 278 (91%) municipalities have audit committees in place;

  • We supported the implementation of the clean audit programme in all provinces; and


Programme 4 national disaster management centre

Programme 4: National Disaster Management Centre

Strategic Objectives: To Improve the system of disaster risk management

  • We ensured that 13 stakeholders aligned their disaster management plans and we supported Ten disaster management centres


Programme 5 provincial and municipal government support

Programme 5: Provincial and Municipal Government Support

  • Strategic Objectives:

  • To review and amend Local Government policy and legislation to improve human resource management and administrative practices; and

  • To facilitate the development of credible and simplified IDPs informed by the unique nature of municipalities

  • We conducted Nine provincial IDP assessments sessions ; and

  • Municipal Systems Amendment Act was assented into law in July 2011.

    The following policies were reviewed:

  • Notice on the Determination of Remuneration of Councillors;

  • Notice on the Policy Framework for the Determination of Full Time Councillors;

  • Recruitment and Retention Strategy;

  • Competency Framework for Senior Managers; and

  • Municipal Grading Framework and Remuneration Framework for Senior Managers.


Programme 5 provincial and municipal government support1

Programme 5: Provincial and Municipal Government Support

Strategic Objectives:

To implement initiatives to improve administrative and financial management and expenditure; and

To implement a new approach to coordination of support and capacity building initiatives

  • We supported 195 municipalities in seven provinces to fill critical posts and monitored the filling of critical posts in all municipalities;

  • We conducted MSAA workshops per province to roll-out the implementation of Municipal Performance Regulations;

  • Through our coordination all provinces were capacitated on the implementation of National Capacity Building Framework (NCBF); and

  • We also facilitated the establishment of the National Municipal Capacity Coordination and Monitoring Committee (NMCCMC).


Programme 6 infrastructure and economic development

Programme 6: Infrastructure and Economic Development

Strategic Objectives: To ensure increased access to basic electricity, refuse removal, water and sanitation; and

To ensure the roll-out of the Community Work Programme in municipalities

Through our coordination efforts working with sector departments, provinces and municipalities as part of outcome 9 the following has been achieved:

  • The department of Human Settlements ensured that 84% Households with access to basic level of sanitation

  • 72% Households with access to basic refuse removal services

    Households reached with basic services funded by the MIG

  • 1,866 million access to water

  • 1,270 million access to sanitation

  • Access to 2,4 million Kilometres of roads


Programme 6 infrastructure and economic development1

Programme 6: Infrastructure and Economic Development

Strategic Objectives: To ensure increased access to basic electricity, refuse removal, water and sanitation; and

To ensure the roll-out of the Community Work Programme in municipalities

Community Work Programme(CWP)

  • We facilitated the implementation of CWP in 63 Municipalities this

    resulted in the creating of 105 218 work opportunities through CWP

  • We supported the Department of Trade and Industry on the

    establishment of 655 cooperatives;

  • We coordinated the roll-out of Clean Cities and Towns programme in

    10 municipalities


09 october 2012

Part 3current status of projects that are not achieved


Targets that were not achieved administration

Targets that were not achieved: Administration


Targets that were not achieved policy research and knowledge management

Targets that were not achieved: Policy Research and Knowledge Management


Targets that were not achieved governance and intergovernmental relations

Targets that were not achieved: Governance and Intergovernmental Relations


Targets that were not achieved governance and intergovernmental relations cont

Targets that were not achieved: Governance and Intergovernmental Relations cont..


09 october 2012

Targets that were not achieved: Governance and Intergovernmental Relations cont..


09 october 2012

Targets that were not achieved: Governance and Intergovernmental Relations cont..


09 october 2012

Targets that were not achieved: Governance and Intergovernmental Relations cont..


09 october 2012

Targets that were not achieved: National Disaster Management Centre


Targets that were not achieved provincial and municipal government support

Targets that were not achieved: Provincial and Municipal Government Support


Targets that were not achieved provincial and municipal government support cont

Targets that were not achieved: Provincial and Municipal Government Support cont...


Targets that were not achieved infrastructure and economic development

Targets that were not achieved: Infrastructure and Economic Development


Targets that were not achieved infrastructure and economic development1

Targets that were not achieved: Infrastructure and Economic Development


Targets that were not achieved infrastructure and economic development2

Targets that were not achieved :Infrastructure and Economic Development


09 october 2012

Targets that were not achieved :Infrastructure and Economic Development


09 october 2012

Part 4FINANCIAL PERFORMANCE 2011/12


Final audited status

Final Audited Status

Amounts are in R’000


2011 12 operational spending excluding major transfer

2011/12 Operational Spending (excluding major transfer)


Division of 2011 12 departmental expenditure

Division of 2011/12 Departmental Expenditure


2011 12 operating expenditure

2011/12 Operating Expenditure


Matters of importance

MATTERS OF IMPORTANCE

  • The financial information as presented above includes the Department of Traditional Affairs (DTA)as a programme. The application for a separate vote for DTA is currently under consideration by the Minister of Finance.

  • The operational budget for the 2 departments constitutes 2% of the CoGTA vote with the 98% going to transfers to Municipalities and entities.

  • The Division of Revenue Act allows National Treasury to recover the unspent conditional grants of municipalities by offsetting them from future Equitable Share allocations, these offset amounts make up the majority of the under-expenditure in the department.

  • The Municipal infrastructure Support Agency (MISA) was proclaimed by the President as a ring-fenced government component. During 2011/12 MISA worked in collaboration with the Development Bank of Southern Africa to continue with the provision of support to municipalities for improved infrastructure provision.

  • All irregular expenditure disclosed (R751 m) has been investigated , of which R676 million is still with National Treasury ( Extension of contracts) and the balance is being considered by the Accounting Officers.

  • All contracts which previously generating irregular expenditure (90%) have not been renewed and new ones were entered into after open tender processes were followed.


2011 12 auditor general s audit report

2011/12 AUDITOR GENERAL’S AUDIT REPORT


2011 12 audit report

2011/12 AUDIT REPORT

The department received an unqualified audit opinion from the Auditor General, a step in the right direction as compared to 2010/ 11 financial year which was a qualified audit opinion. The matters raised by the AG on the report can be summarised as follows:

  • Predetermined objectives

  • Usefulness of information

  • Reliability of information

  • Achievement of targets

  • Non compliance with laws and regulations

  • Annual Financial Statements, performance reports and annual report

  • Material misstatements corrected during the audit to disclosure notes

  • Procurement and contract management

  • Non compliance with laws and regulations

  • Expenditure management

  • Non compliance with laws and regulations – payments within 30 days

  • Non compliance with laws and regulations – irregular expenditure incurred

  • Asset Management management

  • Inadequate systems and internal controls

  • Internal controls

  • Leadership and governance

  • Post Audit Action Plan

  • This has been developed to address all matters raised by the Auditor General and other weaknesses in the Department.


2011 12 unspent funds

2011/12 UNSPENT FUNDS


2011 12 unspent funds1

2011/12 UNSPENT FUNDS

Overall Expenditure:

The departmental overall expenditure performance depicted 95.9% spending, the 4.1% under expenditure amounts to R1.9 billion. This under expenditure is sub-divided as follows:

Compensation of employees:

Final Allocation: R246 615

Actual expenditure R234 987

Variance R11 628 = 95.3% Expenditure.

The under expenditure is largely due to posts within MISA and CWP which were not filled at the end of the financial year


2011 12 unspent funds cont

2011/12 UNSPENT FUNDS (CONT)

Goods and services:

Allocation:R447 543

Actual expenditureR425 995

Variance R21 548 = 95.4 % Expenditure

The under-spending on goods and services is mainly due to projects that were either cancelled or deferred to the following financial year.

The department has timeously approved a procurement plan which is currently being implemented.


2011 12 unspent funds cont1

2011/12 UNSPENT FUNDS (CONT)

Payments of Capital Assets:

Allocation:R19 796

Actual expenditure R8 277

Variance R11 519= 41.8% Expenditure

The under-spending is due partly to R5.6 million within CWP that was not spent due to the implementing agents being appointed late in the financial year, the previous ones did not want to invest in capital towards the end of their term.

The balance relates to motor vehicles for disaster management unit bought late in the financial year and paid for in 2012 / 2013 financial year.


2011 12 unspent funds cont2

2011/12 UNSPENT FUNDS (CONT)

Transfers and subsidies:

The under expenditure of R 1.9 billion is due to the following transfers:

  • LG Equitable Sharereflects an under- spending of R935 million that has been withheld by National Treasury as an offset on the non performance of municipalities on other conditional grants.

  • Disaster relief Grant reflects an under- spending of R 727 million, the grant is only utilised on the disasters that have been declared and the provinces & municipalities have fully complied with their legislative requirements.

  • Councillor once-off Gratuity reflects an under - spending of R222 million for non-returning councillors after the Local government elections were not all disbursed to councillors at year end due to cumbersome administrative processes.

  • United Cities of LG in Africa transfer R5 million has been suspended pending discussions between executive authorities on future arrangements.

  • CWP the R11 million under expenditure relates to late implementation of the projects relating to establishment cooperatives.


09 october 2012

Part 5

RESPONSE TO CONCERNS RAISED BY THE PORTFOLIO COMMITTEE IN 2010/11


Response to issues raised by the portfolio committee in 2010 11

Response to issues raised by the Portfolio Committee in 2010/11


Response to concerns raised by the portfolio committee in 2010 11 cont

Response to concerns raised by the Portfolio Committee in 2010/11 cont..


Response to concerns raised by the portfolio committee in 201o 11 cont

Response to concerns raised by the Portfolio Committee in 201O/11 cont..


Response to concerns raised by the portfolio committee in 201o 11 cont1

Response to concerns raised by the Portfolio Committee in 201O/11 cont..


Response to concerns raised by the portfolio committee in 2010 11 cont1

Response to concerns raised by the Portfolio Committee in 2010/11 cont..


Conclusion

Conclusion

  • Major reasons for underperformance in the past financial year was related to the fundamental restructuring process which has now been finalised;

  • We have developed a PAAP which has been shared with the External Audit Committee as well as the office of the Auditor-General, this is to address all issues raised by the AG in order to improve on the performance;

  • We have introduced a weekly internal audit steering committee meeting with the purpose of monitoring progress against the PAAP; and

  • We managed to fill key positions on financial management, risk management and internal audit.


Conclusion1

Conclusion

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