Annual Report 2011 / 2012 SALGA South African Local Government Association Contents CHAPTER 1: INTRODUCTION CHAPTER 4: CORPORATE GOVERNANCE AND Glossary of terms 2 HUMAN RESOURCE OVERSIGHT REPORT 1.1 Foreword by Chairperson of SALGA 4 4.1 Introduction 284 1.2 Overview from the Chief Executive Offi cer 6 4.2 Business planning and performance information 285 1.3 Financial results overview 9 4.3 SALGA’s legislative compliance framework 288 1.4 SALGA Mandate 10 4.4 Budgeting policy 290 1.5 SALGA revised fi ve-year strategy 2007-2012 11 4.5 Audit Committee 294 1.6 Organisational structure 16 4.6 Internal Audit 295 1.7 SALGA leadership 17 4.7 Risk Management 296 4.8 Individual performance management 297 CHAPTER 2: ORGANISATIONAL PERFORMANCE 4.9 SALGA governance structures 305 4.10 HR oversight report 324 2.1 Introduction 24 4.11 Stakeholder relations 348 2.2 Overview of performance against pre- 27 determined objectives for period 1 April 2011 CHAPTER 5: TRIPLE BOTTOM LINE - 31 March 2012 2.3 Performance information 31 5.1 Introduction 352 2.3.1 SALGA Change Agenda: 5.2 SALGA National Offi ce 353 Achievements and challenges 36 5.3 SALGA Provincial Offi ces 355 2.3.2 10-Priority Outcomes: 5.4 Mandela Day 2011 356 Achievements and challenges: Priority Objective 1 41 Priority Objective 2 43 Priority Objective 3 52 Priority Objective 4 64 Priority Objective 5 73 Priority Objective 6 77 Priority Objective 7 82 Priority Objective 8 86 Priority Objective 9 103 Priority Objective 10 104 CHAPTER 3: FINANCIAL OVERVIEW AND ANNUAL FINANCIAL STATEMENTS 3.1 Report of the Chief Finance Offi cer 108 3.2 Report of the Audit Committee 121 3.3 Report of the Auditor General 124 3.4 Report of the Accounting Authority 128 3.5 Financial statement 136 3.6 Statements of gifts, donations, and sponsorships 205 3.7 Performance information tables 211 SALGA Annual Report | 2011/12 01 Glossary of Terms BALA Botswana Association of Local Authorities BREV Business Retention and Expansion Visitation CMRA Centre for Municipal Research and Advice CoGTA Department: Cooperative Governance and Traditional Affairs CSO Civil Society Organisations ELMDP Executive Leadership Municipal Development Programme EPWP Expanded Public Works Programme GADDEPA Government, Advocacy, and Decentralised Development Programme for Africa GIZ German Technical IGR Intergovernmental Relations ISAD Information Society and Development LED Local Economic Development LGSETA Local Government Sector Education and Training Authority LGTAS Local Government Turn Around Strategy LLF Local Labour Forum MDGs Millennium Development Goals MOC Memorandum of Cooperation MPAC Municipal Public Accounts Committee MPRA Municipal Property Rates Acts MRHG Municipal Rental Housing Guide MTSF Medium Term Strategic Framework PEPFAR President’s Emergency Plan for AIDS Relief SWC SALGA Women’s Commission UCLGA United Cities and Local Governments of Africa WILGS Women in Local Government Summit 02 SALGA Annual Report | 2011/12 Chapter 1 INTRODUCTION This chapter sets out a general overview of the organisation by SALGA’s Chairperson, Chief Executive Offi cer and Chief Financial Offi cer. It also outlines SALGA’s mandate, strategy for the period 2007-2012 and organisational and leadership structure. SALGA Annual Report | 2011/12 03 1.1 FOREWORD BY SALGA CHAIRPERSON I am pleased to present my fi rst annual report as the Chairperson of SALGA, elected into offi ce in September 2011. This report is produced in accordance with the Constitution of the Republic of South Africa requiring all Government Departments and entities to account for the activities of the year in the form of an annual report. SALGA, as a public entity, hereby provides its annual fi nancial statements and organizational report, and complies with the South African, and its Organisational constitution, to be transparent and accountable in its activities. This report provides a summary of the many activities carried out by SALGA for the period April 2011 – March 2012. The annual report also provides background to the governance of the organisation, its future operations and the role we have played as an organisation in our role as organised local government. 2011/2012 was a transitional year for local government as we saw the largest political turnover in the sector since the advent of the democratic local government sphere. The 18 of May saw 60% of the local government councillors not returning and the loss of long serving stalwarts in the sector. These elections meant that SALGA would have to elect new leadership both provincially and nationally, which Cllr Thabo Manyoni led to the convening of the SALGA national and provincial conferences, held from SALGA Chairperson 30 August to 01 September 2011. In February of 2012, we adopted a new fi ve year strategic plan for the organisation, re-aligning the organisation to effectively deliver on its mandate as the voice of local government. The sector also experienced a number of draw backs, during this transition period, as we saw a number of violent protests sprout around the country. This led to SALGA adamantly pushing for government to take the matter of risk cover for Councillor seriously and handle the matter with urgency. We will continue to urge that the risk that councillors are exposed to be treated as a matter of priority and not be trivialised and lost in the politics of the day. Another highlight during this year was our partnership with the Department of Environmental Affairs and Cities Network in the Local Government Partnership for Climate Change. South Africa successfully hosted COP17CMP7 in eThekwini municipality and we commend our member municipality for rising to the occasion. The 2011/2012 fi nancial year was a busy and very important year indeed for the sector. We forged partnerships and developed good relations that were established to ensure the continuity of local government. I must note that sustained engagement is a critical element in long-term political success and stability. 04 SALGA Annual Report | 2011/12 1.1 FOREWORD BY SALGA CHAIRPERSON Chairperson’s Acknowledgements I express my sincerest gratitude to the President of the Republic of South Africa, His Excellency, President Jacob Zuma, under whose leadership the sphere has been acknowledged as a key player in government’s overall priorities. I acknowledge the Minister of Cooperative Governance and Traditional Affairs, Honourable Minister Richard Baloyi on the role played by the department in support of SALGA as an organisation. I thank all Government Ministers and their departments for the efforts made in partnering with municipalities to deliver better service to our citizens. The Premiers, under whose guidance provincial departments are able to give Local Government support are duly noted and appreciated. I acknowledge and thank the SALGA NEC of 2006-2011 for the good leadership they displayed in representing municipalities provincially and nationally. I acknowledge the new political leadership of SALGA and trust that our term of offi ce will prove fruitful as a collective. I would also like to acknowledge the late former Minister of Corporative Governance and Traditional Affairs, Honourable Sicelo Shiceka, a comrade in liberation, he will be dearly missed. CLLR THABO MANYONI SALGA CHAIRPERSON SALGA Annual Report | 2011/12 05 1.2 OVERVIEW BY THE CEO The fi nancial year under review saw the plotting of a new path for local government and as a consequence SALGA. During this period the local government elections brought about a major leadership change and culminated in the SALGA National Conference 2011. We also witnessed the integration of SALGA KZN into the unitary SALGA structure, strengthening the single voice of organised local government. As transition is challenging in any sector, SALGA managed to provide leadership and guide its members through the transition. In line with the new fi ve year political mandate, SALGA reviewed its strategic plan taking cue from the 2011 National Conference resolutions and key developments in the national discourse. As management, striving towards organisational excellence we decided to conduct a detailed analysis of the organisational environment and the broader context of local government. A peer review was conducted by the Local Government Association of England and Wales (LGA), and we conducted an internal organisational climate survey the results of which will assist us develop a concrete way forward with the newly adopted SALGA Strategic agenda 2012-2017. The implementation of this plan will commence in the next fi nancial year and will Xolile George assist the organisation to navigate the direction of the key deliverables of local SALGA Chief Executive Offi cer government. The strategic plan is pillared by 3 apex priorities: 1. Review of the legislative and policy framework 2. Review of the local government fi scal and fi nancial management framework 3. Improved Municipal capacity SALGA’s annual performance is sitting at an 84% achievement of key activities against the Annual Performance Plan 2011/2012. This steady improvement by organised local government is a tremendous achievement and refl ective of the strides SALGA has taken to ensure that municipalities are supported and represented in all sectors and spheres of government. Some of our highlights for the year include: Participation in the development of the Municipal Systems Amendment Act (MSA), ensuring that the municipal perspective was well represented. The organisation provided guidance to municipalities on the interpretation of the MSA Act.