"Play to win"
The world is still blowing their vuvuzelas in recognition of one of themost successful 2010 FIFA Soccer World Cups in history. We have buried the prophets of doom and gloom. We have a sense of national unity and pride like never before. We have proven that we can deliver.
We want to include you in team finance
Section five of the Municipal Finance Management Act refers to the supervisory function of the Provincial Treasury in monitoring the budgets of municipalities. However, over and above the "MUST DO" functions, the Provincial Treasury "MAY" also assist municipalities with other functions. Today's workshop and the others in the rest of KwaZulu-Natal is good example of such help.
A winning team
We want a winning team. I am very happy about the political involvement. It is very important that mayors, speakers and councilors play their role and are aware of what is going on.
We are sharing information today. I have realised that a lot of things that go wrong, do not go wrong because people deliberately want to do wrong. No team can go on the field without knowing the rules of the game by heart.
The legislation that governs local government (the Municipal Finance Management Act (MFMA) No 56 of 2003, the Structures Act No 117 of 1998 and the Systems Act No 32 of 2000) is our municipal finance rule book.
"Appointed" as the head financial coach, the Provincial Treasury is committed to ensure that the key players know how to play by the book. It is very difficult for politicians to hold administrators to account if they do not know these rules.
Rules and principles
Many people still confine corporate governance to corporate management. We witnessed it in the world cup: some players played dirty when the referee was not watching; others were brilliant actors when they saw him watching, all finding ways to circumvent the underlying purpose of the rules.
While rules demarcate a clear line between acceptable and unacceptable, principles is a form of self regulation. We need our stakeholders to implement the key principles of good governance, as set out in the King three report. These principles are not new.
Sustainability, accountability, consultation, service standards, openness and transparency have all been captured in the White Paper on local government, dated 9 March 1998, as well as in our Batho Pele principles.
Every decision counts
These principles should be our guidelines in every decision we take, especially during difficult times when it is not always easy to determine the best decisions for municipalities and their stakeholders.
Across the world stakeholders are no longer only interested in the score on the financial balance sheet. It is not good enough to account only for economic and financial issues. The Auditor-General will now also look at auditing performance plans.
People want to know HOW do you conduct your business, i.e. how does it impact on communities and the environment? We can still account for every cent and the bank balance may be fine, but if people are protesting about houses we were supposed to build, we cannot say "but our books are balancing".
Getting value for money is extremely important. Why does a school of a similar size cost R19 million in one province and R69 million in another?
Chief financial officers (CFOs) must scrutinise everything. Start asking questions: Are we renting the equipment or are we BUYING it at this price? Beware of the cover quotations, sometimes even the spelling mistakes are the same. We must get value for every cent spent by government. DOING MORE WITH LESS is the watch word.
This integrated sustainability obligates municipalities to ensure that resources are utilised responsibly to ensure the continuing viability of the municipality.
Risk management
A team which focuses on sustainability will also score in managing risks and strategic planning. There are inherent risks. But are we MITIGATING the risks or are we AGGRAVATING them?
Every time I climb into my car I am at risk of being killed in a road accident. But I can mitigate that by ensuring that my tires are in a good condition, that I wear my seat belt, don't speed and don't drink and drive.
An inherent risk of the municipal conditional grants is the risk that we may not spend all the money, which would then be returned to National Treasury. What do we do to mitigate that?
Information technology (IT) governance
Computers and information technology is an excellent tool to enable municipal agility and the ability to respond speedily to citizens’ demand for services. However, it also presents municipalities with significant risks. In their oversight role councilors must ensure that prudent and reasonable steps have been taken in regards to IT governance.
Operation clean audit
Our Clean Audit campaign is a goal that we dare not miss. By 2011 we want all provincial departments and municipalities to obtain clean audit report opinions. We cannot justify any longer disclaimers andadverse audit opinions. As we said before, we will now also be audited on our performance.
Ifwe said we would build 10 houses at X amount and we have built onlyfour, we will not be excused for simply saying that we can account forthe money because it is still sitting in the bank.
Without the confidence and trust of the public it becomes extremelydifficult to drive macroeconomic programmes. And, as we all know trustcan only be earned when we fulfill our commitments. We can do it as wehave proven with the world cup.
Thank you for your time and effort.
Source: Provincial Treasury
Province
