1. MUNICIPAL OVERSIGHT: FUTSHANE CONSULTING IMFO Audit & Risk Indaba 2015 20 – 22April 2015: Olive Convention Centre, Durban Institute of Municipal Finance Officers & Related Professions

2. Overview Accountability framework Oversight Report: Contents Oversight Report vs Annual report Legislative mandate: Annual report contents The basics: Common challenges The basics: Quick wins Institute of Municipal Finance Officers & Related Professions

3. Accountability Framework

4. Basic understanding Accountability Framework Institute of Municipal Finance Officers & Related Professions Mayor Policies Budgets Outcomes MM performance Council Approving budget Approving policies MM Implementation outputs CFO and Senior Managers Financial management Operational management Community OVERSIGHT

5. Oversight report introduction Accountability Framework Institute of Municipal Finance Officers & Related Professions Oversight report Annual Report SDIBPIDP Audit Report Community feedback

6. Oversight Report

7. What is an oversight report Oversight Report The Oversight Report follows consideration and consultation on the Annual Report and is considered to be a report of the municipal council to the community disclosing the level of success or otherwise, obtained with meeting the priority needs and stated desires of the community as contained in the IDP Institute of Municipal Finance Officers & Related Professions

8. Contents Oversight Report The Oversight Report must include a statement whether the Council: Has approved the annual report, with or without reservations; has rejected the annual report; or has referred the annual report back for revision of those components that can be revised. Institute of Municipal Finance Officers & Related Professions

9. Scrutiny of Annual report Oversight Report S46 of MSA 1. A municipality must prepare for each financial year an annual report consisting of : (a) a performance report reflecting :- i) the municipality’s and any service provider’s performance during that financial year, also in comparison with targets of and with performance in the previous financial year. (ii) the development and service delivery priorities and the performance targets set by the Municipality for the following financial year; and Institute of Municipal Finance Officers & Related Professions

10. Scrutiny of Annual report Oversight Report (iii) Measures that were or are to be taken to improve performance (b) an audit on financial statements and the report on audit on the audit performed in terms of sec 45(b) and (c) any other reporting requirements in terms of other applicable legislation. 2. Any Municipality must table its annual report within one month of receiving the audit report in sec (1) ( c) Institute of Municipal Finance Officers & Related Professions

11. Balance scorecard Oversight Report Institute of Municipal Finance Officers & Related Professions KPAKPI 1 BaselineTargetActual Comments KPI 2 BaselineTargetActual Comments

12. The Basic

13. Common Challenges The basics SMART Principles EG: “Road A will be constructed by the end of February 2015” “ 100 000 job opportunities are going to be created by the end of the financial year” “R 2mill to be spent on the registration of indigents by June 2015” Explaining deviations Submitting report timeously Committee setup – oversight committee Institute of Municipal Finance Officers & Related Professions

14. Quick wins The basics The oversight report is responsibility of committee Structure of committee Who should attend Purpose of the committee Agenda of committee Thorough review of IDP/SDBIP Service delivery tracked ‘’Local government exists to serve the people. That is the bottom line,”-President Zuma “Municipalities must take more decisive action to involve communities and community organizations in the matters of local government.’’-President Zuma Institute of Municipal Finance Officers & Related Professions

15. Quick wins The basics Regular and transparent community feedback Assess root cause of challenges Assess action plan to remedy deficiencies Guide the executive/hold them accountable Institute of Municipal Finance Officers & Related Professions

16. Any Questions

17. Lerato Futshane About the Presenter Institute of Municipal Finance Officers & Related Professions Position Managing Director Futshane Consulting Experience Lerato has 7 Years of auditing and Financial management experience and is the lead director at Futshane Consulting During his career he has accumulated a wealth of knowledge which has helped him master accounting and auditing. As part of Futshane Consulting he ahs been involved in various public sector projects across the country ranging from asset management to revenue enhancement. He is a Registered Auditor which has been exposed to both public and private sector has been exposed to different size entities in different industries, his exposure includes: Municipalities SOE’s Stock brokering companies Dual listed entities Major Bank Pension Funds Medical Aid Funds Non-profit organisation (Section 21 company) Investment companies Small Businesses Lerato also has a strong technical Financial Accounting background which he developed while working as a Senior Lecturer at Wits University. This has allowed him to pursue his passion of developing the economy through education and skills transfer. Qualifications BCompt (Hons) Chartered Accountant (South Africa) Registered Auditor Outcomes-based assessor certificate

18. Abdul Chiwalo About the Presenter Institute of Municipal Finance Officers & Related Professions Position Manager Futshane Consulting Experience Abdul has 5 Years of auditing and Financial management experience and is the Manager at Futshane Consulting During his career, he has gained extensive experience in the audit and accounting professional working in the private and public sector and has a deep understanding of the issues and challenges facing these sectors. His exposure to both public and private sector includes following: SOE’s Non-profit organisation (Section 21 company) Investment companies Small Businesses Through his involvement in the public sector, he has taken a keen interest in municipal administration especially the following areas: Asset management Financial reporting Revenue enhancement Qualifications BSc (Hons) in Accounting Certified Chartered Accountant (ACCA)

19. Thank You! Institute of Municipal Finance Officers & Related Professions