1. Select Committee on Cooperative Governance and Traditional Affairs Operational Response Plan Audit Outcome of Municipalities 16 August 2011 1

2. Introduction Strategic Plan22
Introduction
Strategic Plan
Operational Structure and other key Stakeholders
Support Programme
Audit Action Plans 22

3. Strategic Plan 33 Legislative Mandates
Chapter 13 of Constitution - PFMA, MFMA, Budget, Divisions of Revenue, Intergovernmental Fiscal Relations, transparency and effective management of financial and fiscal resources
Public Finance and Budget Management
Intergovernmental Policy and Planning
Infrastructure
Budget Analysis
Conditional Grant monitoring
Financial Systems and Accounting
PFMA and MFMA
Accounting Support and Reporting
SCM, Internal Audit and Risk Management
Technical Support
Financial Management Grant
Technical Assistance 33

4. Operational Structures44
Operational Structures
Improve ability to offer guidance and support through effective coordination, monitoring and reporting
MFMA Coordinating Structure ( NT, DCOG, PT, LG, SALGA, AG) – meet quarterly and update progress on all MFMA related activities
Provincial Accountant-General Forums
Municipal Regional MFMA CFO Forums (Chaired by PT)
Provincial OPCA Committees focusing on audit outcomes
Assist with audit action plans, monitor audit action plans
Structure made up of representatives from Provincial Treasuries and Provincial LG departments
Regular meetings with Office of Auditor-General 44

5. National Treasury 55
MFMA & FM Support
Support to municipalities on a wide range of MFMA financial management reforms
Budgeting, Reporting, AFS, AR, SCM, Internal Audits, Risk Management, compliance
For macro economic, fiscal and operational purposes municipalities ito MFMA implementation have been allocated differently -
Largest 17 non delegated municipalities report directly to NT while the rest report to PT (consolidated reports are shared)
Officials from NT and PT render direct support, where resources allow
Further support rendered through Technical Assistance Programme - MFIP Advisors - currently 67 municipalities
Conditional Grant support rendered to all municipalities
NT and DCoG share information on a regular basis 55

6. MFMA Support MFMA Helpdesk facility used for all enquiries
MFMA Guides and Circulars
AFS Templates, Accounting Policies, Asset Registers, Audit File, SCM, Banking and Cash Management, Budgeting, Oversight, MPAC
Training
Asset Management, Preparation of AFS, Budget
FM minimum competencies – NT, 42 accredited service providers, PALAMA, SAICA
NT Support Teams geared for 17 large municipalities
MFIP TA Advisors supporting 67 municipalities
1300 FM graduate interns appointed in municipalities
Outcome 12 - Implement System of Delegations on FM, undertake FMCMM development and rollout 66

7. Support Plans - FMG
263 municipalities have submitted FMG Support Plans addressing MFMA implementation
Follow-up made with 15 municipalities to confirm FM support plans
Support plans monitored consistent with DORA requirements
NT and PTs to monitor the implementation of the support plans as confirmed with municipalities 77

8. Support Plans – FMG Appointment of municipal officials in BTO
Appointment and training of Interns
Appointment of Internal Audit officials and Audit Committee
Training
Minimum Competency levels
Supply Chain Management
Development of FM policies
Upgrading or acquisition of FM Systems to automate in-year reporting, management revenue and expenditures
Updating Municipal Asset Registers
Compilation of AFS and undertake GRAP Conversions
Compilation of Audit Action Plans
Preparation and Implementation of Financial Recovery Plan 88

9. STATUS OF ACTION PLANS – OPCA 2014
National Treasury 99
STATUS OF ACTION PLANS – OPCA 2014
Province
Municipalities
Number of Municipalities with action plans
Comments
Gauteng 12 11
CoJ audit released in June 2011.
Northern Cape 32 23
Mainly due to audits still taking place due to late submission of annual financial statements.
North West
Audits not yet finalised due to late submission of annual financial statements.
Western Cape 30 25
1 audit still in place.
Eastern Cape 45
Limpopo 29
Mpumalanga 21 20
KZN 61
Free State 24 5
Non-compliance by municipalities reported to the MEC for Cooperative Governance, Traditional Affairs and Human Settlement by FS officials.
Total
278
230 99

10. Conclusion Programme of support for FM established
National Treasury, Provincial Treasuries working together with Depart of Cooperative Governance, SALGA and AG
Weaknesses identified in Audit Outcomes also inform support and action plans
Major challenges remain wrt municipal capacity, readiness to report on service delivery performance information - may impact on achievement of outcome targets
Conditions of all support;
must be absorbed by municipal officials for continuous improvements,
appointment of MM, qualified CFOs, and all FM graduate interns once training programme completed
Municipalities are encouraged to replicate similar capacity strategies for all service delivery functional areas
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