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ACCOUNTABILITY AS A TOOL FOR LOCAL GOVERNMENT DEVELOPMENT August 2001 ACCOUNTABILITY AS A TOOL FOR LOCAL GOVERNMENT DEVELOPMENT August 2001

Accountability Support System • • Legal/policy framework Guide pack Nation-wide training Planning and implementation Accountability Support System • • Legal/policy framework Guide pack Nation-wide training Planning and implementation management support system (PIMSS) • IDP

Accountability Principles • • Decentralisation of Accountability Democratisation Enabling and facilitation role of government Accountability Principles • • Decentralisation of Accountability Democratisation Enabling and facilitation role of government Sustainability Integration to harness efficiency Fostering cooperative governance Eradicating legacy of past – – – Restructure cities, towns, rural areas Promote social equity poverty alleviation

Accountability Challenges • Comprehensive and unfocussed analysis • Inadequate/inappropriate public participation • Balance between Accountability Challenges • Comprehensive and unfocussed analysis • Inadequate/inappropriate public participation • Balance between technical and participatory analysis • Strategic thinking and planning • Addressing “real issues” • Implementation orientated planning

Accountability Challenges • Strong leadership and management of the process • Integrate as core Accountability Challenges • Strong leadership and management of the process • Integrate as core municipal function • Support and buy-in from national and provincial sector departments • Sector alignment • Intergovernmental planning system • Fiscal decentralisation

Maximising Accountability Benefits • • • Formulation of integrated and sustainable projects Community building Maximising Accountability Benefits • • • Formulation of integrated and sustainable projects Community building Improved governance Local government transformation Attract investment More efficient and effective resource allocation and utilisation • Fast-tracking delivery • Political accountability and performance measure

Project Viability Accountability • Corporate governance – 27% of municipalities have Audit Committees – Project Viability Accountability • Corporate governance – 27% of municipalities have Audit Committees – 34% have Internal Auditors • Capacity to deliver services – Lack of capacity in various areas • Consumer management – 85% consult on regular basis with community – 34% keep record of complaints and queries

Project Viability Accountability • Information management – 88% have computerised accounting records – 83% Project Viability Accountability • Information management – 88% have computerised accounting records – 83% have salary administration computerised – 57% have asset control computerised • Audited financial statements – 47% of statements subjected to external audit • Cahflow, bank and investments – 35% prepare annual cash flow budgets

Project Viability Accountability • Accounts receivable – Very high • Credit control – 65% Project Viability Accountability • Accounts receivable – Very high • Credit control – 65% have formally approved credit control – 11% do credit checks – 53% follow up 60 -day debtors • Accounts payable – pressure to pay accounts within 30 days – 29% of VAT returns and 27% PAYE late

Accountability- Some pointers • Project list value exceeds income source high immediate demands • Accountability- Some pointers • Project list value exceeds income source high immediate demands • Overcome backlogs - 2 to 10 years • Projects focused on hard infrastructure services and housing • Shift towards new projects for poor communities in rural or former township areas

Accountability - Some pointers • Loans from Development Bank feature • Housing subsidy and Accountability - Some pointers • Loans from Development Bank feature • Housing subsidy and CMIP drive infrastructure expenditure • Only larger towns generate own income to cover operational expenditure mainly through sale of water and electricity • Smaller and rural towns rely heavily on equitable share

Challenges to Accountability • Amalgamation, establishment and transformation • Capacity building • Adequate funding Challenges to Accountability • Amalgamation, establishment and transformation • Capacity building • Adequate funding for new system of local government – IDP requires R 100 million (2001/02) for eg. • Creation of viable and sustainable local economies • Intergovernmental relations

Intergovernmental relations • Redesign intergovernmental system – Powers and functions of different spheres – Intergovernmental relations • Redesign intergovernmental system – Powers and functions of different spheres – Build appropriate capacity at appropriate levels • Intergovernmental planning (IDP core) • Intergovernmental fiscal relations – National debt = 80% of municipal budget – National receives 30 times municipal budget – Province receives 42 times municipal budget – LG receives 1. 5% of nationally generated revenue and is largely self-funded