Finance
Whether the data reflected by municipalities in (a) budgets, (b) annual performance plans and (c) annual reports is (i) evaluated, (ii) tested and (iii) questioned by his Department; if not, why not; if so, (aa) to what extent, (bb) how are the integrity, performance and effectiveness being determined for each municipality, (cc) what are the findings with regard to municipalities over the past three financial years and (dd) how accurate is the published information?
Yes, the data and information reflected by municipalities in (a) budgets, (b) annual performance plans and (c) annual reports is (i) evaluated, (ii) tested and (iii) questioned by the Provincial Treasury.
The data evaluation, testing and questioning is done through:
(aa) developed assessment frameworks for conformance through desktop assessments and engagements as part of the Local Government Medium Term Expenditure Committee (LG MTEC) and Municipal Governance Review and Outlook (MGRO) processes.
(bb) the integrity, performance and effectiveness are being tested against the Municipal Budget and Reporting Regulations for budgets, MFMA Circular 13 for annual performance plans and MFMA Circular 63 for annual reports amongst others National and Provincial Treasury circulars and guidelines. However, the responsibility to maintain the integrity, performance and effectiveness of the data resides with municipalities. The key performance indicators, targets and activities in the annual performance plans (SDBIPs) are evaluated and tested in accordance with the strategic objectives specified in the Integrated Development Plans (IDPs) of municipalities. The integrity, performance and effectiveness of reported information are evaluated against planned targets specified in the IDPs of municipalities. The municipalities’ in-year performance are monitored through the submission of monthly, quarterly, mid-year and annual performance reports when actual performance are tested against planned performance and variances are investigated.
(cc) The table below indicates the most prevalent findings on the PDOs from
2010/11 to 2012/13:
|
2010/11 |
2011/12 |
2012/13 |
|
Measurability and consistency of planned and reported indicators and targets. |
The indicators/ measured were not well defined to ensure that performance data will be collected consistently and easy to understand and use. |
The indicators of four municipalities were not verifiable, as it was not possible to validate the processes and systems that produce. |
|
Inadequate leadership and oversight and review to ensure that planned objectives, indicators and targets were included in the annual performance report. |
Performance targets were not specific and/or measurable to ensure that the required performance can be measured. |
The indicators/measures of four municipalities were not well defined, as the indicators/ measures did not have a clear, unambiguous definition so that data could be collected consistently and be easy to understand and use. |
|
Lack of leadership taking ownership to ensure a clear, logical link between the objectives of the municipality and the indicators and planned targets. |
Supporting information for reported information was not complete. |
Three municipalities did not disclose measures to improve performance in the annual performance report. |
|
Lack of source data or documentation to confirm whether the reported information is accurate, complete and consistent in relation to the source data, evidence and documentation. |
Reported performance information was not accurate when compared to supporting information. |
The reported performance information of three municipalities was not consistent with planned objectives, indicators/ measures and targets. |
|
Inadequate processes for the collection and recording of reported performance. |
Reported information was not valid when compared to supporting information. |
|
|
No internal audit function was established at some municipalities. |
|
|
(dd) In terms of the Auditor-General’s audit outcomes for 2012/13 there has been a steady improvement in the planning, collating and reporting of annual performance information from municipalities over the past three years. The percentage of findings in annual performance reports declined from 68 per cent in 2010/11 to 52 per cent in 2011/12 and were further reduced to 44 per cent in 2012/13.
