The four pillars of local government excellence
By Marina Hall, Local Government and SAMRAS GM, Bytes Systems Integration Cape Town
We constantly hear from government and the ANC, and quite correctly, that it is time to enhance service delivery to the electorate.
Most recently, President Jacob Zuma recommitted the ANC and government to service delivery in his 99-year anniversary address to the ANC at Polokwane.
However, the fact is that only just over half of South African citizens have access to the four basic services required by citizens and promised by the ANC and government. Clearly, service delivery needs to be accelerated.
There are four pillars which local government must build to ensure the populace receive the services they have voted for:
1 Revenue protection. Municipalities are, irrespective of anyone`s viewpoint, businesses. Cash flow is king, and they need to be mindful of this fact. They need to consider cash in cash out as if they were running a private business. They need to focus on the money they should be generating, and chasing down monies outstanding with the same diligence as a private enterprise would. The bottom line is local government needs to deliver a service, and to do so it needs cash on hand. For this to occur, it must have a good view of which ratepayers are delinquent, who has paid, what is outstanding and provide corrective measures. In other words, we are looking at a classic cash management system. Without a proper cash management system in place, there can only be chaos, and inadequate service delivery.
2 Expenditure management. Municipalities should not necessarily be profitable, but they must always be mindful of expenditure, and so ensure service delivery. Cash in is one thing, but cash out is another. Municipalities are faced with two serious issues: under- and over-expenditure. To deliver services, you need to spend your budget - and, again, Polokwane showed that there are great service delivery needs. To maintain control, you need to know what you are spending and where you should be spending. You need to prevent over-spending, with processes and controls, and to eliminate unnecessary spending. Vitally, you need to be able to block expenditure if there are no funds on hand. There also needs to be a clear trail of auditability and accountability that underscores the importance of public money expenditure. The use of taxpayers` and ratepayers` money is a serious issue which demands concomitant systems.
3 Contract management. No municipality has all the skills required to deliver services. Accordingly, municipalities need to contract in the services of external specialists. We have seen, all too often, that contractors and outsourcers are paid too much for the delivery of inadequate services and poor contract fulfilment. There has to be a better way, one which ensures the citizenry enjoy the benefit of the services they are paying for. Every municipality must have systems to manage contracts, and ensure no external contractor is paid a cent more or less for services and solutions contracted and delivered - and that no payment accrues for lack of service delivery. To make sure all of this happens, they need good supply chain and contract management systems and controls in place.
4 Compliance. Municipalities need to comply with a number of regulations. At the most basic level, they need systems that comply with the Standards of Generally Recognised Accounting Practice (GRAP), and provide extensive reporting to National Treasury, monthly and annually which provide management with all the necessary information. How healthy is the municipality? Is cash flow sufficient? What assets are on hand and what is their state? How are they performing? Then the municipality has to comply with the requirements of the Municipal Finance Management Act, where non-compliance carries significant implications. In essence, municipalities must run themselves as if they were private businesses, and be fully accountable.
This is where IT really comes into play. The right systems, driven by political will, can play a critical role in ensuring the four pillars, and more, are met.
Most municipalities need to focus on a turnaround strategy and Operation Clean Audit 2014, as launched by Minister for Cooperative Governance and Traditional Affairs, Sicelo Shiceka, in 2009. The aim of this programme, which is part of Outcome 9 of government priorities, is to clean up governance and enhance service delivery at both local and provincial levels of government where the 2008/9 audit finding showed that only 51% of all municipalities had unqualified audits. The goal is that by 2014 all municipalities need to have clean unqualified audits, with no disclaimers or adverse audit opinion. Many municipalities are working after a fashion, but many not with clean audits. They now need the right ERP-style systems in place, catering for the unique South African situation, with integrated financials to provide a comprehensive view of operations, HR, supply chain management, contract management and more, with accurate forecasting and built-in business intelligence.
2014 is around the corner: municipalities which continue to ignore reality will pay the price. Those which apply the right systems will not only benefit in terms of compliance, but they will also deliver the services citizens expect and deserve.