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Local Economic Development Fund (LEDF) PowerPoint Presentation
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Local Economic Development Fund (LEDF)

Local Economic Development Fund (LEDF)

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Local Economic Development Fund (LEDF)

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  1. Local Economic Development Fund (LEDF) Purpose • to provide conditional grants to municipalities for the implementation of job creation and poverty alleviation projects

  2. Conditions of the Grant • project business plans to be submitted that comply with the criteria of the LEDF • project business plans act as the contract between the DPLG and the municipality • Funds are transferred directly into the municipality’s bank account in three tranches • Municipalities report in terms of the Division of Revenue Act and Poverty Alleviation Programme requirements

  3. Criteria for allocations • Short and long term job creation • Targeting the poor and disadvantaged • Project sustainability • SMME focus • Linkage to the IDP • Clear marketing plan • Clear role for the municipality • Linkage with other national priorities e.g the Social Plan & ISRDS

  4. Administrative Costs • The total value of the LEDF for 2001/2 is R 78 million • R 3 million is for the national administration of the Fund • R 75 million is for direct municipal transfers • A total of 10% of the municipal grant can be used for project management costs

  5. Life-Span of the Grant • The LEDF grant was part of government’s Poverty Alleviation allocations • Until the current financial year municipalities applied for the grant on an annual basis for a maximum of R 1.5 million. Project implementation was to be completed within the financial year. • The LEDF has now been approved within the MTEF - projects can apply for funding for a three year period

  6. Monitoring Mechanisms • Base-line surveys conducted during project implementation • Monthly conditional grant and poverty alleviation progress reports • Regular site visits conducted by the DPLG and provincial departments • Eight weekly provincial co-ordinating committee meetings • DPLG reports to Treasury on a quarterly basis

  7. Past Performance of the LEDF: 1999/2000 & 2000/01 • 122 municipalities received an LEDF grant • The 1999/2000 R 42 million LED Fund delivered as of December 2000: • 56 131 person days of employment • 3 155 person days of training • Municipal economic assets were created or regenerated, e.g micro manufacturing centres, hiking trail, maize milling plant, cultural centres, agro-processing centres, informal traders’ facilities, municipal commonage farming etc

  8. Capacity • The DPLG has one establishment post for LED - 2 contract staff and 3 temps make up a 6 person LED team • Provincial co-ordinating committees have been established with the Department of Local Government and Housing (DLG&H) as the lead department in most instances. • LED Units exist in only three provincial DLG&H • LED municipal structures are rare

  9. Preparedness • DPLG and the provincial departments involved in the LEDF will complete the approvals of the 2001/2002 projects by the 15 April 2001 • Preparedness and capacity for implementation are considered during the project approval


  11. PURPOSE to assist municipalities with significant once-off establishment and administrative costs of amalgamation

  12. CONDITIONS • submission of business plans in prescribed format • progress report indicating measurable outputs on the implementation of establishment plans • submission of monthly expenditure reports by municipalities • submission of quarterly expenditure reports in terms of dora, 2001 • non-compliance with conditions could result in forfeiture of further allocations

  13. CRITERIA FOR ALLOCATIONS • expenditure responsibilities of category b and c municipalities • impact of demarcation as determined in the transition cost study • financial and administrative capacity of new municipalities

  14. ADMINISTRATIVE COSTS • National Government • funded partly from own departmental budget; and • 3,5 % percentage of the total allocation • - 2001/02 financial year: R8 750 000 (3,5% of R250m) • - 2002/03 financial year: R7 000 000 (3,5% of R200m) • LIFE SPAN • two years (from 2001 to 2003)

  15. MONITORING MECHANISMS • provincial management teams to be appointed by dplg • monthly reports from municipalities reviewed • quarterly reports to national treasury in line with dora, 2001 • management team to investigate and take necessary corrective steps in the case of non-compliance

  16. CAPACITY AND PREPAREDNESS • DPLG to appoint additional staff as proposed in its new structure • project management team to be appointed by DPLG to assist with management and monitoring


  18. PURPOSE OF CMIP To ensure that all South Africans gain access to affordable municipal services through the provision of capital grants for internal bulk and connector, internal infrastructure and community services and facilities within an integrated development planning framework. To support the Integrated Rural Development Strategy. To support the Urban Renewal strategy. To support the housing programme

  19. CMIP Criteria for Allocation • Poverty-people earning less than R800pm • Need-communities without water as indication of infrastructure backlog • Unemployment • Capacity of municipality to provide services to its poor

  20. CMIP Administrative Cost • At national sphere less than 1% of total allocation. • At provincial sphere the Division of Revenue Act determines that a maximum of 3.5% or an agreed amount on each province’s allocation may be used for programme management services

  21. Life-span of CMIP Until such time Government is of the opinion that it has adequately dealt with eradicating municipal infrastructure backlogs

  22. Monitoring Mechanisms for CMIP • Section 8(b) of Division of Revenue Act-monthly reporting in respect of revenue against actual expenditure. • Quarterly in respect of Key Performance Indicators. • Six monthly impact assessment. • Disbursement of funds is subject to reports being received by province and DPLG

  23. Monitoring Mechanisms for CMIP(cont) • Provincial Management Team visits. • Conduct on site inspections. • Auditing by Provincial Auditor General Offices

  24. CMIP Capacity to Manage • Inadequate human resources available in DPLG. • DPLG assisted by programme management consultants to manage CMIP.

  25. CMIP Performance to Date


  27. PURPOSE To assistmedium-sized and small municipalities experiencing severe financial problems to restructure their financial positions and organisations

  28. CONDITIONS • submission of business plans • council approval of the appointment of management investiga tion team • approval by council of strategic prognosis report and implementation • council approval of appointment of management support team

  29. CRITERIA FOR ALLOCATIONS • provincial estimates of needs • excludes larger municipalities qualifying for the restructuring grant administered by National Treasury • Mpumalanga and Northern Province funding adjusted due to the extent of donor programmes

  30. ADMINISTRATIVE COSTS • NATIONAL GOVERNMENT • funded from own departmental budget • PROVINCES • national management team support for each province

  31. LIFE SPAN • three years (from 2001 to 2004) • to be incorporated into the equitable share for local government

  32. MONITORING MECHANISMS • monthly reports from municipalities to provinces • quarterly reports to DPLG from provinces • quarterly reports to national treasury • management team to investigate and take necessary corrective steps in the case of non-compliance • financial auditing by provincial offices of the Auditor-General

  33. CAPACITY AND PREPAREDNESS • DPLG to appoint additional staff as proposed in its new structure • project management team to be appointed by DPLG to assist with management and monitoring

  34. PAST PERFORMANCE • case studies done • ±170 management support teams established • local government institutional re-organisation fund (projects underway) • R60m returns on investment expected • successful in assisting municipalities with restructuring • Cash flows have improved • improved financial management • credit control measures developed


  36. PURPOSE To support municipalities in implementing new system as provided for in the Municipal Systems Act, 2000. These new systems include Integrated Development Planning (IDP’s), Performance Management, Local Public Sector Management reform such as the introduction of performance contract.

  37. CRITERIA FOR ALLOCATION • PIMS-Centres attached to District municipality (a demand driven approach; • Municipalities that have started to develop interim IDPs; • Municipalities that have some experience with implementing some of the components of PMS; • Municipalities that have reasonable capacity (administrative and institutional systems and finances) to implement interim IDPs and PMS

  38. CAPACITY OF NATIONAL GOVERNMENT TO ADMINISTER • National DDP and National PIMSS Task Teams; • Salaried employees and enlisted local expert on PMS

  39. CONDITIONS • Funds will be solely used to establish and operate 14 Planning and Implementation Management Support Centres (PIMS Centres) • Pilot PMS municipalities to use the Grant for the following: • Procure technical expertise for setting up PMS’s; • Procure baseline data for the system; • Facilitate and manage the consultation processes for putting together the system; and • Develop monitoring and evaluationsystems/mechanisms for their municipal PMS.

  40. ADMINISTRATIVE COSTS • Departmental budget • LIFE - SPAN OF GRANT - • First year of inception; • MTEF commitment for 3 years; • Beyond the three year period,the grant will be reviews

  41. MONITORING MECHANISM Reporting mechanisms of the Department National IDP monitoring system, which will assess the impact of PIMS Centres and the quality of support provided to municipalities. The monitoring system will be operational from 1 April 2001. PMS Pilot municipalities to submit quarterly progress report PMS technical support team will conduct quarterly visits to Pilot municipalities to provide technical advise and most importantly, to monitor progress. Annual performance audit of PMS pilot municipalities by the Office of the Auditor-General Reporting mechanisms of Province Provincial PIMSS forums (made of representatives from District and local municipalities, members of the national PIMSS Task Team and PIMS Centre professional) will provide quarterly progress reports on PIMS Centres.