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