1. Single Integrated Approach to Municipal Revenue Management
19/20 November 2018

2. Contents Problem Statement Background Root causes Consequence
Single Integrated Approach
Conceptual Framework
Strategy
Governance Structure
SRP

3. Problem Statement
Local government is in crisis. A group of municipalities has been identified as not fulfilling their Constitutional mandates and are failing at effectively delivering services, billing for services and collecting the revenue due. Consequently, outstanding debtors are increasing and they are not able to maintain positive cash flows to honour their commitments. Unless efforts to assist this group are not better coordinated and collaboration between different stakeholders in national and provincial government is not improved, we will not achieve the desired impact on service delivery.

4. Background
Municipalities are failing to generate and collect sufficient revenue to sustain operations and generate surpluses
This is despite the municipal support programmes, capacity building, advisory services and similar local government interventions
The unintended consequence is that municipal officials have become reliant on the LGES to for their salaries so the urgency to collect revenue to sustain services is not the primary focus
There seems to be no incentive to collect what is due to the municipality
Single integrated approach was presented to BC, BCL and BF

5. Root causes of poor revenue management
The operating environment
Lack of functional integration
Weak municipal leadership with limited accountability
Capacity constraints
Inadequate asset management (maintenance of income generating infrastructure)
Weaknesses in the implementation of the indigent policy framework
Weaknesses in the implementation of the MPRA
Legislative overlaps
Data integrity

6. Consequence of poor fiscal effort
Among the consequences are:
Increasing bad debt;
Defaulting on payments to creditors (bulk creditors included);
Failure to maintain income generating infrastructure;
Operational deficits;
Increasing dependency on equitable share and grant funding; and
Service delivery failures

7. Single integrated approach
An integrated approach to municipal revenue management is required to address the root cause identified
Collaboration needed between stakeholders
Principles proposed to establish the foundation of the collaborative approach
The spirit of co-operative government is recognised and upheld by all;
The legal framework underpins each stakeholder’s contribution; and
The primary responsibility for resolution of financial problems rests with the municipality.

8. Conceptual Framework of the Single Integrated Approach
Revenue management is extremely complex
There is an urgent need to unpack the revenue value chain at the municipal level
The focus is on stabilising the current revenue management operations
To facilitate cooperation across all functional areas
Interdepartmental dependencies are addressed for seamless transaction processing
Common purpose and stakeholders work from the same point of departure
The following are some key pillars required for the integrated approach:
Refunds
Clearances
Collections and payment receipting
Town Planning
Deeds Registry
Legal Services
Valuations
DATA INTEGRITY
POLICIES
BY-LAWS
GIS
Indigent Management
Credit control
Billing
Customer Care
Infrastructure
Surveyor General
Human Settlements

9. Strategy for the Single Integrated Approach (1)
Single approach for revenue management support
Collaboration between DCoG and NT as the policy departments, involve PCoGTAs and PTs
Other stakeholders such SALGA and sector departments
It will require the two stakeholders to align current approaches / initiatives
There will be a need to target catalytic areas that derives largest financial benefit
Each province is different, challenges are diverse, approach will be to adapt the support to address major areas of concern
The focus will be on strengthening capacity per province for both PTs and PCoGTAs
Capacity at different provinces vary – need to be cognisant of this when developing support structure
The single approach will be adapted to suite the PT

10. Strategy for the Single Integrated Approach (2)
Strengthening municipal governance
Of paramount importance is the revenue champion to drive revenue initiatives
Identify and prioritise municipalities for support
A manageable group of municipalities must be targeted for greater impact and focused attention
Resourcing the Revenue strategy
Realigning current available resources
Need to align and coordinate MSIG and MFIP III resources of DCoG and NT respectively
Lastly, the approach will be to improve sustainability ultimately, cannot be devolved of addressing expenditure cost containment
Establishment of a Steercom and revenue working group to influence the design of the single approach including developing a coherent framework

11. NT, DCoG, SALGA, PT, P-CoGTA, MUNI
Governance Structure
Steering Committee
NT, DCoG, SALGA, PT, P-CoGTA, MUNI
Reference/ Working group
PTs, P-CoGTAs, P-SALGAs
IMTT (Electricity and Water)
IMTT Service Delivery
Loss Management
Debtor Management
Tariffs Structures
SRP
SOPs
Policy Guidance
Indigent Management
CIGFARO
MPRA
IIPSA
Government Debt
Capacity Options
MSIG-7 SP/42 munis, MFIP, DBSA, etc
Funding Options
National Grants, DBSA, IIPSA

12. Conclusion
For too long efforts around revenue management have been fragmented and not impactful
Collaboration is key to the success
Resources must be aligned for better impact
Functional integration
Therefore, single integrated approach in essential
What is it that this Master Class/Prov requires help with from national

13. THANK YOU