Government and business launch joint effort at upskilling municipalities {writer: Staff reporter}

Training municipalities to manage their finances will bring better service delivery, said Minister of Higher Education and Training Blade Nzimande at the recent launch of a skills programme to upgrade financial skills at South African municipalities.

“Enhanced municipal service delivery, along with cleaner municipal administration... is perhaps ambitious, but critically necessary,” he said at the Johannesburg launch of the programme. “The expectations of communities have been raised by the state, but not always met.”

Financial management was a key skill in local government, but it was clearly not up to standard, the minister added. “We are looking for ambassadors and change agents to turn this around.”

Government and business have come together with the launch of the R72-million public-private partnership programme designed to bring about minimum standards of competence for municipal financial staff.

It is envisaged that 60% of South Africa’s most resource-poor municipalities will have benefited by the time the programme is concluded at the end of next year.

The initiative aims to address the effect that the shortage of skilled financial staff has on municipalities. This shortage is evidenced by the fact that only seven of South Africa’s 237 municipalities received unqualified audit reports in terms of their financial management and reporting in the 2009/10 financial year.

The government’s Operation Clean Audit, which is meant to ensure municipalities attained clean audits; and the Treasury’s minimum standards of competence required by municipal finance staff, will become effective in financial year 2013/14.

The programme, funded by the Department of Higher Education and Training, is a joint initiative of the National Skills Fund, the Treasury, the South African Institute of Chartered Accountants (Saica) and Deloitte. Its ultimate aim is to train 1 200 municipal staff who are involved with financial management.

Currently, the programme involves nine pilot municipalities in Gauteng, KwaZulu-Natal and North West. It is due to be rolled out nationally next year, with more than 60% of municipalities participating.

Nzimande said the programme was “a critical initiative” that would help assist municipalities respond to the needs and challenges of social delivery. The ability of municipalities to attract and retain skilled financial resources was extremely limited due to scarce resources and opportunities, particularly in rural areas.

Treasury accountant-general Freeman Nomvalo said South Africa required an “efficient, effective and development orientated public service”.

Accurate financial reports would serve as “sharp instruments” to plan better, track progress in service delivery and allow the government to intervene where necessary, he added.

The senior executive for professional development at Saica, Chantyl Mulder, said the programme would have clear deliverables, and that the aim was that the competencies gained would withstand quality assessment.

Other factors

In a presentation to the annual conference of the Institute of Municipal Finance Officers (IMFO) in September, the Local Government Sector Education and Training Authority (LGSETA) – with regard to the challenges of finance capacity building at local governments – stated that a need exists to move from a state of problem-identification based on challenges that are identified and clearly defined, to an action-driven agenda that paves the way forward.

These challenges include the following, among others:

• Have a clear and unambiguous understanding of local government capacity enhancement constraints through decisive action and support, without sacrificing the quality of service;

• Achieve reductions in staff turnover and position local government as an employer of choice;

• Establish and expand on existing local government finance sustainable collaboration and partnerships, focused on a need to advance local government finance capacity; and

• Commit to develop joined up financial skills base and capacity across a wide range of financial skills, which will ensure strong advancement in building capacity for delivery and excellence.

Among the solutions put forward by the LGSETA in its presentation were:

• Reducing high staff turnover through proactive retention strategies and succession planning, supported by skills enhancement through training and development initiatives with vocational orientation.

• Developing systems and processes for key finance retention strategies (i.e. career planning, coaching, mentoring and leadership succession – facilitated by an effective performance management system and other talent management interventions in local government); and

• Implementing sound monitoring, evaluation and reporting mechanisms, which ensure answerability and accountability.

Absa’s effort

In the interim, in an effort to enhance the skills of local government officials, banking group, Absa, has already assisted in the training of 720 municipal finance officials across the country – through the Municipal Finance Management Programme – over the past three years.

Part of this initiative resulted in the graduation of 213 municipal finance officials with a National Qualifications Framework Level 6 qualification in Municipal Finance Management at the IMFO annual conference in Cape Town.

The programme, which is an initiative with selected partners, is aimed at improving the skills of municipal officials to ensure capacity is developed at local government level, to effectively enable the proper management of budgets and the efficient delivery of services.

In partnership with the IMFO, the LGSETA and Continuing Education at the University of Pretoria, Absa launched the Municipal Finance Management Programme in 2007.

The training programme comes at a time when public discourse is widely prevalent on how local municipalities make use of their local government budgets for the purposes of service delivery.

The training consists of two phases:

The first phase – conducted over a six-month period – covers topics such as: legislation, policy (theory and practice), municipal policy and bylaws, people and performance management, strategic planning and risk management, municipal budgeting and financial statements, municipal supply chain management and asset management, cash flow and debtors management.

The second phase of the training programme is an international trip to the United Kingdom, sponsored by Absa, so that local officials are exposed to international benchmarks in the sphere of local government.

Shiva Makotoko, head of public sector banking at Absa, says: “Municipal finances in particular play an important role in the daily lives of our people. Our ability to access services such as water, electricity, refuse removal and safe sanitation depends on the efficiency with which the finances of our public institutions, especially municipalities, are managed and utilised.”

The Municipal Finance Management Programme, aimed at chief financial officers, heads of department and other officials involved in municipal finance, provides the background that is necessary to understand the management function and financial relations that are applicable to local government.

“The public finances of a municipality determine whether that municipality succeeds or fails, whether it indeed can attract investment that will enable it to invest in service delivery and achieve its developmental mandate as enshrined in our Constitution,” emphasises Makotoko.

She adds that Absa Bank continues to support this programme and other initiatives because the current system of government – particularly local government – requires the government, academia as well as the private sector to work in a collaborative manner.

IMFO president Chris Nagooroo says that while local government has contributed toward a number of significant social and economic advances, and increased access to a wide range of basic services; as well as created more opportunities for the participation of the majority in the economy, local government systems are still showing signs of distress.

He notes: “Building the capacity of municipal officials becomes essential in order for municipalities to fulfil and optimally achieve their obligations.”

Nagooroo stresses that skills development is critical, as it lays the basis for a more people-oriented local government system to meet the demand for democracy, reconstruction and development.

“Such initiatives should also be invested in councillors and other officials,” he adds in conclusion.