CAN EFFECTIVE PERFORMANCE MANAGEMENT SYSTEM IMPROVE SERVICE DELIVEYR INITATIVES? IMFO Audit & Risk Indaba – 22April 2015: Olive Convention Centre, Durban Institute of Municipal Finance Officers & Related Professions

ABC OF CLEAN ADMINISTRATION – BACK TO BASICS THROUGH PERFORMANCE MANAGEMENT SERVICE: CAN EFFECTIVE PERFORMANCE MANAGEMENT SYSTEM IMPROVE SERVICE DELIVEYR INITATIVES? PRESENTED BY: DAN MASHITISHO CHAIRPERSON: INSTITUTE OF SOUTH AFRICAN MUNICIPAL ACCOUNTING OFFICERS (ISAMAO) Institute of Municipal Finance Officers & Related Professions

CONTENT Institute of Municipal Finance Officers & Related Professions 1. Introduction 2. Background 3. Performance Management System Charecterised 4. The Service Delivery Environment 5. Conclusion

1. INTRODUCTION PERFORMANCE MANAGEMENT SYSTEM CHARECTERISED The Institute of South African Municipal Accounting Officers (ISAMAO) is humbled by the invitation extended to it by IMFO to this august Indaba. Needless to say, ISAMAO is indeed a proverbial “new kid on the block”. As a fledgling professional institute, ISAMAO shall inevitably have to tap on the knowledge and experience of sister organizations of IMFO’s caliber. ISAMAO has been tasked, at his Indaba, to tackle or answer the following question: “Can Effective Performance Management System improve Service Delivery initiatives”? In answering the foregoing, there shall be no attempt made to exhaust the vast scope of Performance Management regime. Be that as it may, some salient variables shall be examined which are key levers that might influence the success or failure of the service delivery initiatives in spite of the effective Performance Management System. Institute of Municipal Finance Officers & Related Professions

2. BACKGROUND PERFORMANCE MANAGEMENT SYSTEM CHARECTERISED The concept of Performance Management and the system thereof is relatively new in the Public Sector especially in South Africa. In the Local Government sphere, Performance Management was only earnestly practiced after it was formally legislated through the Municipal System Act (ACT No 32 of 2000). In this connection, sec 38 of the MSA stipulates that “A Municipality must establish a performance Management System that is÷ commensurate with its resources; best suited to its circumstances ; and in line with the priorities, objectives, indicators, and targets contained in its integrated development plan. Institute of Municipal Finance Officers & Related Professions

3.1 The Smart Character 3. PERFORMANCE MANAGEMENT SYSTEM CHARECTERISED The characterization of an effective Performance Management System as one that depicts key performance indicators that are specific, measurable, accurate, realistic with timeframes, is hitherto unparalleled. Nonetheless, as it has already been alluded to, the performance management regime is relatively new particularly in Local Government, it often happens that the targets and key performance indicators lack the requisite “Smart” Character. It therefore follows that if the key performance indicators outlined in the Service Delivery and Budget Implementation Plan (SDBIP) are not “SMART” such may complicate matters to the point where it may not be clear whether or not there has been achievement or service delivery. Institute of Municipal Finance Officers & Related Professions

3.2 Validity and Reliability …………………Continue 3. PERFORMANCE MANAGEMENT SYSTEM CHARECTERISED It is imperative that the Performance Management System should be valid and reliable. The validity of the systems is characterized by the extent to which it accurately measures the key performance indicators. In the same vein, reliability of the system refers to the consistency in measuring KPI’s and outcomes. Similarly, a good performance indicator should be: Reliable: the indicator should be accurate enough for its intended use and respond to changes in the level of performance. Well-defined: have a clear, unambiguous definition so that date will be collected consistently, and be easy to understand and use. Verifiable: possible to validate the processes and systems that produce the indicator. Institute of Municipal Finance Officers & Related Professions

Validity and Reliability PERFORMANCE MANAGEMENT SYSTEM CHARECTERISED Cost-effective: the usefulness of the indicator must justify the cost of collecting the date Appropriate: avoid unintended consequences and encourage service delivery improvements. Relevant: the indicator must relate logically to the institution’s mandate. Institute of Municipal Finance Officers & Related Professions

4.1 Resources………………Continue 4. THE SERVICE DELIVERY ENVIRONMENT It is emphatically submitted that the existence of an effective Performance Management System in an organization, especially of a municipal nature may only lead to improved Service Delivery if other related variables are positively in place. Such variable are examined below in a cursory fashion. 4.1 Resources The availability of both human and financial resources is key to Service Delivery. to this end, the municipalities that have cash-flow challenges e.g. those that have been listed by National Treasury as culprits who failed to pay ESKOM bills and are supposed to be proverbially “stoned to death” shall not have improved Service Delivery irrespective of whether they have effective Performance Management Systems or not. Institute of Municipal Finance Officers & Related Professions

Resources 4. THE SERVICE DELIVERY ENVIRONMENT It is common sense that the withholding of the allocation of equitable share to these poor municipalities may only plunge them in a service delivery conundrum. To this end it is proposed that the National Treasury should rescind this decision as it is indeed detrimental to service delivery to the indigent communities. Similarly if the municipality does not have personnel with requisite skills, knowledge and abilities to perform their functions, the prevalence of the aforementioned system might be inconsequential. Institute of Municipal Finance Officers & Related Professions

4.2 Intergovernmental Relations …………………Continue 4. THE SERVICE DELIVERY ENVIRONMENT The Constitution of the Republic of SA characterizes the three spheres of government viz Local, Provincial and Local Government as distinctive inter- dependent and inter-related, sec 40 (1) by the same token sec 154 of the Constitution stipulates that National and Provincial Government shall support and monitor local government. Although the above constitutional stipulations seem to be self-explanatory, in practice the autonomy of Local Government seem to have been eroded by the other two spheres of government who seem to rule the local sphere by decree through a cacophony of circulars and regulations which sometimes make it difficult for smooth Service Delivery to take place. Although over-regulation of the local sphere by other spheres of government is indeed disquieting, what is even more perplexing is that it seems to be underpinned by deep-seated lack of trust. This seems to fly in face of sec 41(h) of the Constitution which provides that the three spheres of government “must co-operate Institute of Municipal Finance Officers & Related Professions

4.2 Intergovernmental Relations 4. THE SERVICE DELIVERY ENVIRONMENT with one another in mutual trust and good faith”. Needless to say, an effective Performance Management System would not improve Service Delivery in such an environment. It is therefore imperative that both Provincial and National Government should accelerate the support as outlined in sec 154 of the Constitution whilst going slow on the erosion of Local Government autonomy and distinctiveness. The aforesaid critical analysis of the existing intergovernmental relations should not be misconstrued to suggest that there is no support at all from National and Provincial Governments, on the contrary, it is suggested that such relations should be improved to enhance Service Delivery to the communities. Institute of Municipal Finance Officers & Related Professions

4.3 Involvement of Local Communities ………………….Continue 4. THE SERVICE DELIVERY ENVIRONMENT The Municipal System’s Act (Act 32 of 2000) imposes a heavy and almost insurmountable duty on municipalities to involve local communities in processes relating to performance management systems. To put it more aptly, section 42 of the aforementioned Act stipulates that “A municipality, through appropriate mechanism, processes and procedures... must involve the local community in the development, implementation and review of the municipality’s performance management system, and in particular, allow the community to participate in the setting of appropriate key performance indicators and performance targets for the municipality.” If the aforesaid stipulation of the Act viz sec 42 of the Municipal Systems Act is to be followed to the letter and spirit, a cross-section of municipalities’ performance management systems may be found wanting and not in compliance with the Act in this regard. Institute of Municipal Finance Officers & Related Professions

Involvement of Local Communities ………….Continue 4. THE SERVICE DELIVERY ENVIRONMENT This is precisely so because the logistical and other modalities of getting the members of the community to determine the targets and KPI’s of municipalities may seem to be insurmountable. Not withstanding the above compliance challenge, it should also be postulated that the community also has a responsibility to ensure that service delivery is improved. Surely, even if the municipalities were to have state-of-the-art performance management systems, such may come to naught if the community disrupts service delivery initiatives by stealing and destroying municipal assets and amenities as if such do not belong to them. To this end, there is a need for a program which shall be characterized by a social contract between municipalities and the communities which would inculcate a spirit of ownership and pride over services that are already delivered with the understanding that the municipalities have limited resources, especially financial, that available for service delivery. Institute of Municipal Finance Officers & Related Professions

Involvement of Local Communities 4. THE SERVICE DELIVERY ENVIRONMENT The community therefore needs to understand through a social contract, that while it is their constitutional right to express service delivery concerns through protests, such should be done in a civilized fashion. By the same token, the social contract should accentuate the responsibility of the Municipal officials and politicians to respond promptly to the service delivery needs of the community in line with Batho Pele Principles in the context of the Back-to-Basics programme. Institute of Municipal Finance Officers & Related Professions

4.4 Professionalism ……………..Continue 4. THE SERVICE DELIVERY ENVIRONMENT One of the key factors that would impact on the affective Performance Management System and the latter’s symbiotic relation to improved service delivery, is the culture of professionalism or lack of it, among officials and politicians in the day to day execution of their duties. The setting of professional norms, standards, procedures, work ethic, and ethical behavior as a central pillars of organizational culture should be encouraged in all the spheres of government to ensure improved service delivery. It is against this backdrop that the Municipal Managers, countrywide, converged in the City of Ekurhuleni, Gauteng in November 2014 to launch the Institute Of Municipal Accounting Officers (ISAMAO). Institute of Municipal Finance Officers & Related Professions

Professionalism 4. THE SERVICE DELIVERY ENVIRONMENT The vision of the Institute is “A repository for highly competent, professional and ethical municipal accounting officers” whilst the mission is “To develop and maintain a system of standards, norms and procedures that will inculcate professionalism amongst Municipal Accounting Officers thereby enhancing quality service delivery to communities”. The Institute (ISAMAO) would like to encourage all municipal officials to join and support relevant professional bodies to improve our knowledge skills and abilities in the quest to enhance quality service delivery to our communities. Institute of Municipal Finance Officers & Related Professions

CONCLUSION ……………Continue 4. THE SERVICE DELIVERY ENVIRONMENT A genuine attempt has been made in this input paper to examine various factors and variables with the objective of answering the question “Can an Effective Performance Management System improve Service Delivery Initiatives? Of course this was done in the context of the Indaba theme “ABC OF CLEAN ADMINISTRATION and the Back-to-Basics programme. Admittedly, some of the assertions postulated in this paper were made from the Local Government practitioner’s point of view rather than high flown theoretical or academic polemics based on requisite empirical research. Nonetheless, it may be concluded here that the answer to the aforesaid question is indeed a conditional YES. Institute of Municipal Finance Officers & Related Professions

CONCLUSION 4. THE SERVICE DELIVERY ENVIRONMENT This is so precisely because whilst an effective Performance Management System can improve service delivery initiatives, such may be converted to a NO if some of the key variables discussed in this paper which are central to the environment of service delivery business, are antagonistic to the effective Performance Management System. Finally, it is conjectured that the implementation of the fledgling Performance Management regime in the South African Public Service, whilst extremely challenging, is however not insurmountable. In the words of our national icon and hero Nelson Rolihlahla Mandela, “it always seems impossible until it is done”. Institute of Municipal Finance Officers & Related Professions

Thank You! Institute of Municipal Finance Officers & Related Professions