DPLG/DBSA COLLABORATION: MIG/MSIG UNDERSPENDING AND UNDERREPORTING

Presentation to SCOF

05 March 2008

Purpose

·         To provide feedback to the Select Committee on Finance on the outcomes and plans of DPLG/DBSA collaboration meeting to deal with under-spending and under­performing municipalities during July to Dec 2007

 

Introduction

·         DBSA/Dplg engaged to assess the situation of under-spending and under-performance in MIG and MSIG

 

·         Produce a report and analysis of situation regarding municipalities with less than 30% on MIG/MSIG expenditure

 

·         Assess the current capacity of these municipalities in terms of Project Management Units, Siyenza Manje Technical and Finance Experts against the current expenditure trends

 

Background

·         For the period July-Dee 2007 a total number of 72 municipalities reported under-spending on MIG and MSIG

 

·         The DBSA Development fund support a total of 131 municipalities country wide

 

·         Of the 72 under-spending municipalities, Siyenza Manje deployed Technical Experts in 24 municipalities (33% of munics),.6 financial experts and 1 planner

 

Allocation of Capacity in Non- Performing Municipalities

 

Total No. of Munics

No. of Munics with deployees

No. of Munics with Tech Experts

No. of Munics with PMUs

No. of Munics without deployees

72

33

24

37

39

100%

46%

33%

51%

54%

 

 

Distribution of Deployments per municipality

 

Municipal ities with Deployees

Technical Expert

Financial Expert

Planning Expert

YP - Technical

YP - Financial

21 (64%)

X

 

X

X

 

8 (4%)

 

X

 

 

X

4 (12%)

X

X

 

X

X


Reasons for under-spending and under­reporting

·         Some municipalities involve/assign deployees only to parts of infrastructure sectors funded by MIG and not necessarily for general engineering services.

 

·         Sidelining of deployees in assisting and facilitating financial management reporting

 

·         In some instances the experts supports more than one municipality on a shared basis.

 

·         Technical Directors in some municipalities not having the right technical skills and qualifications.

 

·         Suspensions of Technical Directors has an impact on the delivery of MIG projects.

 

·         Finance experts only focusing on the preparation of AFS, Budgeting process and AG queries and not on grants related support

 

·         Of the 72 under-spending municipalities, there is a number of 27 municipalities without established Project Management Units.

 

Reasons for under-spending and under-reporting

·         In most of these under spending municipalities the experts, have been deployed for less than 6 months

 

·         Delays in the registration of projects in the dplg

 

·         Suspension of officials and vacancies in the municipalities which affects decision making

 

·         Slow procurement processes in municipalities (implementation of supply chain management - bid committees not meeting regularly)

 

·         Political instability and the adhoc change of priorities which affects planning and expenditure

 

·         Transfers made into overdrawn primary accounts and funds utilized for other purposes than infrastructure Le. Salaries

 

·         Legal challenges on the bid awards by contractors that lost the bid

 

Current support & interventions in place to improve grant expenditure

·         DBSA Siyenza Manje deployed experts to DWAF and dplg to assist with projects registration and approval of technical reports

 

·         Young professionals deployed for skills transfer by experts in the financial and technical disciplines

 

·         Support provided on the development of financial control policies and revenue enhancement

 

·         Monthly and quarterly reviews (MIG/MSIG) meetings held with affected municipalities and provinces to address under-spending

 

·         District wide visits to under-spending and under-reporting municipalities for support

 

Way forward

·         Review of the scope of technical and financial experts to: Mainstream grant monitoring and support (including MSIG & MIG) into the work scope of deployees.

 

·         Reinforce linkages between technical and financial experts for collaboration in implementing their scope of work.

 

·         Dplg to produce consolidated monthly and quarterly MIG/MSIG expenditure trends report for sharing and strategic discussion with DBSA as well as for measuring the impact of the support/interventions.

 

·         Collectively identify other role players in the under-spending municipalities and establish linkages to address challenges faced to achieve better coordination

 

·         DBSA to finalize the procurement of Professional Service Providers by April 2008 for deployment to municipalities to eliminate the challenge of deployees managing more than two municipalities.

 

·         DBSA to upscale the deployment of young professionals to municipalities for skills transfer by experts and ultimate absorption by municipalities