By Gareth Mnisi
It is no secret that many municipalities are facing challenges including maladministration and irregular, fruitless and wasteful expenditure.
The latest Auditor General’s (AG) report stipulates out of the 257 municipalities in South Africa, only 16% received clean audit outcomes. But it is not all doom and gloom for the country’s municipalities.
One of the Procurement Infrastructure and Knowledge Management (PINK) Programme supported municipalities in Mpumalanga, the Chief Albert Luthuli Municipality, was one of the top performing municipalities.
Following support from PINK including the deployment of a dedicated SCM advisor, irregular and wasteful expenditure decreased in the municipality by 49%, from an amount of R21, 737, 698 to R 11, 004, 971 during the period 2019/20 and 2020/21.
Equally important, is for the first time in the municipality’s history, there were no Supply Chain Management (SCM) findings in the 2020/21 AG’s report. This bears testament to the effectiveness of the PINK SCM interventions in the municipality.
Much of the success attributed to Chief Albert Luthuli Municipality has been credited to the PINK Programme’s SCM support, implemented by with the National Treasury and the Swiss Government.
The Free-State and Mpumalanga provinces have consistently been listed among the most challenged municipalities in South Africa due to poor leadership, capacity constraints and political instability. To be more specific, there has been a worrying trend in the financial management and reporting of the Mpumalanga and Free-State municipalities.
Situating the PINK programme in these Provinces is a direct response to the service delivery concerns synonymous with these two provinces. To address these difficulties, PINK deployed an SCM advisor in the Chief Albert Luthuli Municipality to better capacitate officials to implement SCM. The strategy involved a strong focus on SCM practices and drastically improving SCM performance for the purpose of increased cost-effective, socially inclusive, and sustainable service delivery at provincial and local government level.
The PINK Programme’s deployment occurred a year before the initiation of District Development Model (DDM) by President Cyril Ramaphosa in 2019, premised on an integrated district-based approach to service delivery with a strong emphasis on localised procurement and job creation. It is a known fact that municipalities have historically operated in silos leading to disjointed planning and operations activating ripple effects in various local government structures. The model addresses these deficits through the One Plan for 44 districts and 8 metropolitans currently piloted in O.R. Tambo municipality and the eThekwini metropolitan municipality. Ideally, the district-wide interventions translate to sustainable service delivery and support capacity development programmes like PINK.
Since its inception, the PINK programme identified 8 pilot municipalities in Mpumalanga and the Free-State.
Officials in these municipalities responsible for SCM and Local Government Infrastructure Development Management (IDMS) were targeted for various procurement and infrastructure management capacitation. The PINK Programme is a National Treasury Capacity Development Programme funded by the Swiss’ State Secretariat for Economic Affairs (SECO) to the tune of R100 million over five years from 2018 to 2023.
To this end, the stationing of an SCM technical advisor in the Chief Albert Municipality has offered great value to officials. Better execution of SCM functions, co-ordination, and co-operation between Chief Albert Luthuli and the other municipalities through SCM forums organised by PINK have contributed to significant improvements in SCM practices and performance.
Put simply, the municipality has managed to get the basics right.
The filling of vacancies with competent staff has contributed greatly to the efficient operation of the municipality. Chief Albert Luthuli Municipality is very small compared to neighbouring municipalities in Nelspruit or Witbank, therefore assigning expertise to vacant positions as well as elevating the SCM function led to formidable gains.
Prior to PINK’s intervention, the SCM unit in Chief Albert Luthuli was chronically understaffed. Through the involvement of the technical advisor, two SCM vacancies were advertised and filled, offsetting the SCM deficit. Also, prior to the programme’s support the municipality did not have a dedicated official to oversee the risk function and procurement plans, since PINK’s implementation there is a dedicated resource for this function.
As mentioned above for the first time in Chief Albert Municipality’s history, there were no SCM findings highlighted by the AG in the2021 audit report since the implementation of the PINK Programme compared to the previous AG report, where many SCM findings were reported. One of the main causes of the negative SCM findings was due to the vague SCM policy which through the PINK support has since revised and given more clarity.
To sustain the work achieved by the programme, SCM practitioners have undertaken specialised training on SCM, using standardised SCM toolkits as professional guiding documents for daily work activities which include the toolkits dealing with bid specification, evaluations and bid adjudication committees among others. The main purpose of the SCM toolkits is to improve SCM performance and increase SCM compliance with existing regulations.
The presence of strong leadership and accountable management also contributed to Chief Albert Luthuli Municipality’s successes. Progressive leadership is what has allowed the municipality to meet the demands of a changing environment and adapt. The executive management has endorsed change management and is not resistance to support or opposed to learning new methods of working.
Because of this, the procurement officials manage municipal projects better and have access to problem management skills provided by the technical support team. For example, the SCM manager and CFO held weekly meetings with the advisor to deal with any SCM challenges that the municipality was facing.
Another big win for Chief Albert Luthuli Municipality is the decline in community protests within the district. The value is tangible for residents leading to fewer protest action over the past two years, heightening the credibility and the image of the municipality. The decline in irregular and fruitless expenditure has also enhanced buy-in from the business fraternity in the region because public funds are now managed in an accountable and transparent fashion.
Furthermore, through the PINK Programme, the Local Government Infrastructure Delivery Management System (LG IDMS) Toolkit is currently being rolled out at Chief Albert Luthuli Local Municipality. The LG IDMS is an interactive infrastructure delivery system that brings together operations and maintenance, programme, project, and portfolio management processes to form one seamless process in the infrastructure delivery value chain. It is believed that together with the SCM Toolkits that are already in use at the municipality, the IDMS will also contribute to the Municipality’s performance and improve its way of delivering infrastructure hence improving service delivery to its citizens.
Maintaining momentum and sustaining the gains made is most critical for Chief Albert Luthuli Municipality post the PINK Programme’s five-year term. Monitoring and evaluation once the programme have concluded after 2023, will ensure the benefits acquired are not lost. Through the National Treasury’s Knowledge Management platform municipalities will be able to harness institutional memory and possibly replicate similar wins like those demonstrated in Chief Albert Luthuli across other municipalities in South Africa. Sustaining the impetus necessary to deliver essential services without pillaging public resources.
Gareth Mnisi is the Chief Financial Officer at the Chief Albert Luthuli Municipality.
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