ANNUAL REPORT 2006 2007 MUNICIPAL DEMARCATION BOARD PRESENTATION TO

ANNUAL REPORT 2006/2007 MUNICIPAL DEMARCATION BOARD PRESENTATION TO THE PORTFOLIO COMMITTEE ON PROVINCIAL AND LOCAL GOVERNMENT 30 October 2007

REPRESENTATION AND DOCUMENTS ● ● From the Board: Ø Ms ME Letsoalo – Deputy Chairperson: Municipal Demarcation Board Ø Mr RH Monare – Chief Executive Officer Ø Mr J van Zyl – Acting Chief Financial Officer. Document Tabled: Ø Annual Report 2006 - 2007 2

OVERVIEW ● ● ● ● ● The Board (RHM) Last Briefing – 17 October 2006 (RHM) Report of the Auditor-General: 2006/07 (RHM) Receipts for the Year: 2006/07 (Jv. Z) Expenditure for the Year: 2006/07 (Jv. Z) Breakdown of Expenditure (Jv. Z) Outputs and Developments 2006/07 (RHM) Strategic Direction – Medium Term Strategy 2007/08 – 2010/11 (RHM) Budget Programmes (Jv. Z) Conclusion (RHM) 3

THE BOARD ● ● ● 9 Members since 1 February 2004. Chairperson the only full time member of the Board. CEO in charge of the Board’s Administration. 4 Operational Clusters. 26 Staff Positions in the Establishment: Ø 7 Vacant at 31 March 2007; Ø 3 filled in the new year (Head: GIS, Snr GIS Officer, HR Assistant). Ø 2 have resigned in the new year (CFO and Senior Researcher) and process is underway to fill them. Ø 62% Black; Ø 31% Female; Ø 0% Disabled. 4

LAST BRIEFING – 17 October 2006 l l l We had a joint briefing of Portfolio Committee and Select Committee. We reminded the committees of the concerns and reservations that members of the portfolio committee had raised in past briefings, and of the explanations we had given to the committee. The concerns and reservations had included: Ø The Board’s expenditure being possibly excessive, and rising from year to year at too high a rate, with respect to: - Professional Fees; - Office Expenses; - Staff Remuneration; - Board Members Remuneration; - Travel and Accommodation. 5

LAST BRIEFING – 17 October 2006 Ø Ø Ø Consultants employed by the Board possibly taking too substantial a portion of the Board’s funding, whether the money being spent on consultants is justified, and that the money could be more appropriately spent on young emerging black graduates; Salaries being paid to Staff possibly being totally inappropriate, and thus the request for the salaries to be broken down for the Portfolio Committee, to determine if the salaries are appropriate. The possibility that the Board may be spending its money on things that are irrelevant in as far as its core mandate is concerned, and thus the financial difficulties it faced; 6

LAST BRIEFING – 17 October 2006 l We explained to the committees that the following details had in the past been provided to the portfolio committee in a memo, in response to the queries : Ø A breakdown of all expenses incurred on professional fees and on Office Expenses; Ø A clear indication that expenditure on professional fees was fully justified, and that it was incurred in direct pursuance of the Board’s core mandate, and the fact that taking away the expenditure on professional fees would have seriously compromised the Board’s work; Ø An explanation of the fact that the vast majority of the consultants that have been employed at the Board are emerging Black graduates and professionals, who actually gain a major boost in their careers as a result of working for the Board; 7

LAST BRIEFING – 17 October 2006 Ø Ø Confirmation of the fact that in view of the Board’s mandate and projects, scaling down on consultants just for the sake of reducing numbers, would mean employing additional staff at the Board, and this would have a net effect of increasing costs rather than reducing them. A clear demonstration that the annual escalations on office expenses and staff salaries were perfectly normal, and that there was nothing excessive about the escalations. An explanation of how staff salaries at the Board are made up. An explanation of the fact that Board Members’ remuneration are simply what has been determined by the Minister for them, as well as reimbursements of their out-of-pocket expenses while in the course of their duties as Board members. There is therefore nothing excessive about their remuneration. 8

LAST BRIEFING – 17 October 2006 With respect to travel and accommodation, an explanation of the fact that: - Board Members cannot be expected to be largely office-bound if they are going to be effective. - Board Members, who are all part time except the Chairperson, must travel to attend Board meetings. We also briefed the committees on the report of the Auditor-General to Parliament on the financial statements for the year ended 31 March 2006. In that report the Auditor-General had given an unqualified audit opinion. He had however raised issues under Emphasis of Matter, with respect to: Ø Irregular Expenditure as a result of MDB procurement policies not being in accordance with the requirements of Treasury Regulation 16 A and supply chain management practice notes issued by the National Treasury; Ø l l l 9

LAST BRIEFING – 17 October 2006 Irregular Expenditure also as a result of the MDB entering into a finance lease transaction, in contravention of Treasury Regulation 13. 2; Ø Non compliance of our Internal Audit Function with all the standards set by the Institute of Internal Auditors as per Treasury Regulation 3. 2. 6; Ø Password Control in our Information Systems not up to required standard. Remedial action has been taken on these issues as follows: Ø Since this query was raised, we have had two formal tenders that we conducted – for the GIS services at the Board in 2006, and for the conducting of municipal capacity assessments in 2007. Ø We allowed for the current contract to expire, so that we could not be in breach. Ø We now examine very carefully each financial contract that we enter into, to ensure that it is not a finance lease. Ø l 10

LAST BRIEFING – 17 October 2006 Ø Ø Ø The work done by the internal auditors did not comply with the standards set by the Institute of Internal Auditors (IIA) and therefore constituted noncompliance with Treasury Regulations 3. 2. 6. This matter was taken up extensively with the Internal Audit service provider, and during this period the service provider decided to resign. However, following further discussions, the service provider agreed to stay on until end July 2007, to allow us to secure another service provider. Efforts to employ a Senior Internal Auditor on the Board’s staff failed, and we employed another service provider for an initial period of one year with effect from 1 August 2007, to allow us to work out a more sustainable solution to this issue. 11

LAST BRIEFING – 17 October 2006 Ø Ø Query on Password Control in our Information Systems not up to required standard was with respect to: Last logon 30 days and older. Password age 30 days and older. Passwords that never expire. Accounts not requiring passwords. “last logon” or inactive accounts are system accounts that may be required by software and if they are deleted the software could stop functioning. There are no actual “user” accounts (an account that used to belong to a real person) that have not been logged on in over 30 days. As users leave the organization their passwords are changed and email is routed for 3 -4 weeks. 12

LAST BRIEFING – 17 October 2006 Ø Ø Ø Once it is clear that they are no longer receiving business emails the accounts are disabled. After another 3 -4 weeks if it is clear the account does not need to be used again it is deleted. Some accounts do not have a password age limits and are not required to change. Software depends on these accounts to function and as a result they cannot be changed. Some can be changed at times but it requires significant reconfiguration of some software. 13

REPORT BY THE AUDITOR-GENERAL: 2006/07 l l l Since the last briefing of 17 October 2006, the Auditor-General has issued a report to Parliament on the financial statements of the Board for the year ended 31 March 2007. In that report the Auditor-General has given an unqualified audit opinion. He has however raised some matters with respect to: Ø Irregular expenditure as a result of the procurement of certain consultants not in accordance with treasury regulation 16 A and the supply chain management practice notes issued by the National Treasury. Ø Material corrections made to the financial statements for audit. Ø A number of inactive accounts found on the server. Ø Regular password changes not always enforced as the passwords for a number of user accounts were found not to have changed for a considerable period. 14

REPORT BY THE AUDITOR-GENERAL: 2006/07 No formally documented and approved IT security policy, disaster recovery plan and user management procedures had been established. Ø No backups. Ø No IT Steering Committee. Many of the above matters that the A-G has raised, seem to be repeats from the 2005/2006 report. However there are valid explanations to the queries: Ø The irregular expenditure is with respect to two service providers who, at the time of the 2005/2006 audit, had already been contracted to provide the services, over the period going into 2006/07. Given that we were already at a stage where we could not reverse the appointment, we had to allow the contracts to run their course, being fully aware that they will trigger another irregular expenditure query in the 2006/07 audit. Ø l l 15

REPORT BY THE AUDITOR-GENERAL: 2006/07 Ø Ø Ø We had indicated in our 2005/06 responses to the irregular expenditure query that there will still be some cases of irregular expenditure in 2006/07, but that in subsequent years we do not expect to have such cases coming up. The material misstatements were as a result of the calculation of depreciation on property, plants and equipment by the accounting system, that is different from the application of accounting standards. Accounting system did not recalculate depreciation on the net carrying amount of the respective assets, but instead recalculated depreciation of some assets from the time when the asset was first used. This resulted in a difference of R 48, 000. With regard to irregular expenditure not being disclosed initially, this was due to the fact that the schedule of irregular expenditure was incomplete at the time of submission. 16

REPORT BY THE AUDITOR-GENERAL: 2006/07 Ø With respect to inactive accounts and password changes not always being enforced, we did explain once again that: - “last logon” or inactive accounts are system accounts that may be required by software and if they are deleted the software could stop functioning. - There are no actual “user” accounts (an account that used to belong to a real person) that have not been logged on in over 30 days. - As users leave the organization their passwords are changed and email is routed for 3 -4 weeks. - Once it is clear that they are no longer receiving business emails the accounts are disabled. - After another 3 -4 weeks if it is clear the account does not need to be used again it is deleted. - Some accounts do not have a password age limits and are not required to change. - Software depends on these accounts to function and as a result they cannot be changed. - Some can be changed at times but it requires significant reconfiguration of some software. 17

REPORT BY THE AUDITOR-GENERAL: 2006/07 Ø Ø Ø With respect to approved IT security policy, disaster recovery plan and user management procedures not being established, these have subsequently been approved by the Board. With respect to no IT Steering Committee, we have in the past not seen the need to establish a separate IT Steering Committee, because all IT related matters are dealt with by the management committee. For compliance purposes, we have now decided to have the management committee doubling up as an IT Steering Committee. When the management committee deals with IT related matters, it will change its name to IT Steering Committee. The management committee also doubles as a risk management committee. 18

RECEIPTS FOR THE YEAR 2006/2007 MTEF allocation Donor funding R 16, 827, 000 R 2, 650, 000 Map & Explorer sales R 72, 000 Disposal of assets R 17, 000 Other income TOTAL INCOME AT OUR DISPOSAL 2006/07 R 141, 000 R 19, 707, 000 19

EXPENDITURE FOR THE YEAR 2006/07 Expenditure Item Amount Percentage of Total Income Administrative expenses R 2, 738, 000 13. 89% Staff costs R 6, 953, 000 35. 28% Audit fees R 1, 012, 000 5. 14% Project expenses R 4, 020, 000 20. 40% Foreign aid assistance paid R 2, 650, 000 13. 45% Other operating expenses R 2, 434, 000 12. 35% Finance costs R 89, 000 0. 45% Depreciation and amortisation R 642, 000 3. 26% TOTAL EXPENDITURE Deficit for the period R 20, 538, 000 104. 22% (R 831, 000) (4. 22%) 20

BREAKDOWN OF EXPENDITURE ADMINISTRATIVE EXPENSES R 2, 738, 000 - Insurance R 163, 000 - Members allowances R 717, 000 - Internal audit fees R 271, 000 - Conferences and seminars - Venue and facilities - Training and staff development R 222, 000 - General and administrative expenses - Advertisements - Publications, etc. - Telephone - Legal fees - Stationery and printing - Bank charges R 1, 365, 000 21

BREAKDOWN OF EXPENDITURE STAFF COSTS R 6, 953, 000 - Staff salaries and wages R 4, 862, 000 - Board members’ emoluments R 1, 915, 000 - Employer’s contributions to UIF and other salary related costs PROJECT EXPENSES - Capacity assessment - Consulting fees R 176, 000 R 4, 020, 000 R 3, 612, 000 R 408, 000 22

BREAKDOWN OF EXPENDITURE OTHER OPERATING EXPENSES R 2, 434, 000 - Licence renewals R 293, 000 - Travel and subsistence R 941, 000 - Courier and delivery charges - Maintenance, repairs and running costs - Machinery and equipment - Rentals in respect of operating leases - Buildings - Plant, machinery and equipment R 72, 000 R 103, 000 R 1, 025, 000 23

BREAKDOWN OF EXPENDITURE l l l l Total income at our disposal decreased from R 25, 873, 000 in 2005/06 due to a decrease in MTEF allocation of R 8, 132, 000. The final instalment of the Danish Funding came through. Our cost recovery on the sale of maps and SA Explorer was fairly consistent. In 2005/06 an amount of R 5, 000 was identified as fruitless and wasteful expenditure. This expenditure did not occur in 2006/07. As already indicated, expenditure by the Municipal Demarcation Board has decreased significantly. Once again during the year 2006/07 we have largely been successful in spending our budget. A substantial portion of the R 831, 000 deficit (77%) is as a result of provision for depreciation and amortisation, which is expenditure in Accounting terms only. The rest of the deficit amount, the “actual” overspending, is less than 1 percent of our revenue for the year. 24

CURRENT POSITION FOR THE YEAR 2007/08 (FOR THE 6 MONTHS ENDED 30 SEPTEMBER 2007) TOTAL REVENUE - Map & Explorer sales - MTEF allocation - Disposal of assets - Other Income TOTAL EXPENDITURE R 14, 464, 000 R 28, 000 R 14, 204, 000 R 12, 000 R 220, 000 R 9, 499, 000 - Administrative & staff expenses R 5, 750, 000 - Project expenses R 2, 660, 000 - Audit fees R 565, 000 - Other operating expenses & Finance costs R 132, 000 - Depreciation and amortisation R 392, 000 SURPLUS FOR THE PERIOD R 4, 965, 000 25

OUTPUTS AND DEVELOPMENTS 2006/2007 l Outputs during the year in the following areas of work: Ø Determination and re-determination of municipal boundaries. Ø Assessments of municipal capacity and recommendations to MEC’s responsible for local government on the allocation and re-allocation of powers and functions between local and district municipalities. Ø Review of District Management Areas with a view to withdraw all DMA declaration, if feasible. Ø Assistance to all government departments who require that assistance, with the alignment of their service delivery boundaries to municipal boundaries. Ø Further enhance of quality engagements and improved working relations with all stakeholders. Ø Various areas of work to enhance and promote good governance Ø Various areas of work to enhance and improve organisational capacity and capability. 26

DETERMINATION AND RE-DETERMINATION OF MUNICIPAL BOUNDARIES: OUTPUTS AND DEVELOPMENTS 2006/2007 l l l We started the year with a programme that would ensure that we finalise 100% of the boundary changes requests during the 2007/2008 and 2008/2009 financial years. The programme was put together with an assumption that: Ø The next national and provincial elections will take place in April 2009 Ø The next local government elections will take place in March 2011. In terms of the programme, we will stop consideration of all new boundary requests on 31 October 2007. Changes to municipal boundaries with respect to cases already in process will continue until August 2008, when all boundary changes will be put on hold and we will hand over boundaries to the IEC for them to start delimitation of VD’s. Voting districts can then be determined by the IEC for the national and provincial elections in 2009, followed by the determination of wards for the 2011 local government elections. 27

DETERMINATION AND RE-DETERMINATION OF MUNICIPAL BOUNDARIES: OUTPUTS AND DEVELOPMENTS 2006/2007 l l l 119 boundary change requests were received and considered during the period under review. 18 of the cases affected provincial boundaries, and these were referred to the Minister of Justice and Constitutional Development in November 2006. An additional case that had been received at the end of 2005/2006 was also included, to bring the total number of cases referred to the Minister of Justice to 19. The referral of the case to the J & CD Minister was to allow her to consider whether she would be prepared to put legislation through parliament, to effect the necessary constitutional amendments to allow for the boundary change requests to be considered further by the Board. The Minister’s reply came during the 2007/08 financial year, in July 2007, and she instead referred us to the Minister of Provincial and Local Government. Since then, the PLG Minister has decided that all boundary change requests must be put on hold, pending the outcome of the White Paper process on provincial and local government. 28

DETERMINATION AND RE-DETERMINATION OF MUNICIPAL BOUNDARIES: OUTPUTS AND DEVELOPMENTS 2006/2007 PROVINCE TOTAL NUMBER OF DEMS RECEIVED AND CONSIDERED (EXCL THOSE AFFECTING PROVINCIAL BOUNDARIES) Eastern Cape 23 Free State 6 Kwa. Zulu-Natal 33 Limpopo 14 Mpumalanga 3 Northern Cape 2 North West 10 Western Cape 4 Gauteng 6 29

DETERMINATION AND RE-DETERMINATION OF MUNICIPAL BOUNDARIES: OUTPUTS AND DEVELOPMENTS 2006/2007 l At the end of the period under review: Ø 2 cases laid in abeyance to be considered when the TC boundaries dataset has been finalised. Ø 1 case had been withdrawn and closed. Ø 5 sec 21 notices had been published following concurrence among affected parties. Ø 93 cases had been published in a section 26 notice. Ø Of the 93 cases published in a section 26 notice: - 23 were approved for section 21 notice and were published. - 45 were sent back to all affected parties and stakeholders for further discussions. If the parties do not come back to the Board with clearer requests by December 2007, the cases will be closed till after the 2011 local government elections. - Formal investigations and visits to communities were undertaken with respect to 6 cases. - 19 cases were closed. 30

DETERMINATION AND RE-DETERMINATION OF MUNICIPAL BOUNDARIES: OUTPUTS AND DEVELOPMENTS 2006/2007 l During the period under review, a task team comprising the MDB, DLA and DPLG did work on creating a credible set of boundaries for traditional areas. This work continues in the current financial year (2007/2008) and it is envisaged that the work will be completed by the end of December 2007. 31

ASSESSMENT OF MUNICIPAL CAPACITY l l l l l As in the past this project was outsourced. Various circulars were sent out to once again keep stakeholders informed of the process. Provinces were requested to assist where possible, often accompanying our data collectors to municipalities. Planning commenced in May 2007. In July 2007 questionnaires were sent out to local and district municipality, followed by field visits in August 2007. Once again 100% return has been achieved. Data capturing, verification and analyses in September and October 2007. 46 DC reports covering all 46 DC’s and 231 locals drafted in October/November 2007. Recommendations to be sent to MEC’s in December 2007. Provincial overview reports and the National Report finalised in February 2008. 32

REVIEW OF DISTRICT MANAGEMENT AREAS l l l l Work to review the future of DMA’s continued during the period under review. We engaged provinces to assist us in gathering information regarding DMA’s in their areas. We collected data on the performance of local government functions in DMA’s during the capacity assessment survey. A framework document was developed for a discussion document on the future of DMA’s. The idea was to have a discussion document ready for consultation with stakeholders with a view to finalising such a document during the current financial year (2007/2008). July 2007 DMA report released for comments. Oct 2007 notices published to withdraw declarations. 33

REVIEW OF DISTRICT MANAGEMENT AREAS: BACKGROUND l l l l The Board in its 1999 policy defined two types of areas that would qualify as DMA’s: Deserts and semi-arid areas with low populations; State protected and conservation areas. Board declared 25 DMAs in 2000 which consisted of ten areas of low population in the Northern Cape, Western Cape and Eastern Cape, two World Heritage Sites, nine provincial parks and four national parks. In these areas the district municipalities would provide all the Schedule 4 B and 5 B functions. In reality the conservation areas were managed by the various conservation bodies, leaving the Districts only with the thinly populated areas. During 2003 the Board reconsidered the usefulness of DMAs and before the last local government elections of 2006, disestablished six DMAs. 1 split in 2 due to provincial boundary changes Currently: 20 DMAs 34

REVIEW OF DISTRICT MANAGEMENT AREAS: BACKGROUND l l l The 2006 elections reflected vast disparities in the number of voters in the various DMAs, ranging from 5937 voters in ten voting districts in the Greater St Lucia Wetlands in KZN, to 35 voters in the Mount Zebra National Park in the Eastern Cape. Each DMA is represented by one PR Councillor, and thus a hugely skewed proportionality in relation to the other PR councillors of the district. Also apparent that districts provide little or no services in most DMAs. Draft discussion document on how to deal with the other DMAs released by the Board in June 2007. Various options outlined on how to deal with the DMAs. Also draft programme and timeframes for consultation and legal process. 35

REVIEW OF DISTRICT MANAGEMENT AREAS: OPTIONS l l Option 1: Status quo (maps 1 - 25. page 15 -39) Option 2: Only national parks and areas of national and international significance (maps 28 – 51. page 70 -93) Option 3: Withdraw all declaration and include DMAs in adjacent local municipalities and wards (maps 52 -118 page 94 -162). Option 3 would effectively involve the removal of all 20 DMAs, representing areas located in 8 provinces across the country. 36

REVIEW OF DISTRICT MANAGEMENT AREAS: OPTIONS Province District Municipalities Local Municipalities Western Cape 5 10 Northern Cape 5 12 Eastern Cape 2 6 Free State 1 1 Kwa. Zulu Natal 4 9 Mpumalanga 1 2 Limpopo 1 2 Gauteng 1 1 North West 0 0 Total 20 43 37

REVIEW OF DISTRICT MANAGEMENT AREAS: TIMEFRAMES July- Nov 2007 Report sent to all stakeholders and commencement of consultations with affected municipalities, MEC’s, Minister of PLG, SALGA, etc. Dec 2007 Board decision on future of DMAs. January 2008 Publication of section 26 notices in terms of the demarcation act, and section 6 of the structures act if necessary. January-February 2008 Period for submissions, analysis and consideration of views (sections 24 and 25 refer) and representations received in terms of section 26 of the Demarcation Act. February 2008 Board to consider all the submissions received in the terms of section 26 and decide whether to approve the re-determination and publish section 21 notices for objections. March 2008 Publication of section 21 notices inviting objections. March – April 2008 Period for submissions, analysis and consideration of all objections (section 24 and 25 refer) and representations received in terms of section 21 of the demarcation act. April 2008 Board meeting to consider sec 21 objections, approve section 21(5) notices, May 2008 Finalise outer boundaries of municipalities – section 21(5) notices published before the elections and IEC informed. 38

REVIEW OF DISTRICT MANAGEMENT AREAS: TIMEFRAMES June 2008 IEC publishes all outstanding section 23 notices. July 2008 MECs publish notices in terms of section 12 and/or 17 of the structures act. August 2008 Municipal boundaries provided to the IEC to start preparations for the elections. 39

REVIEW OF DISTRICT MANAGEMENT AREAS: IMPACT ON MUNICIPAL FUNDING l l The National Treasury supports the withdrawal of all declarations on DMAs representing and their incorporation into the voting wards of adjacent local municipalities, in line with option 3 in the DMA report. The withdrawal of the declarations will however, have an impact on the funding of the affected municipalities that are made via the formula based local government equitable share and the Municipal Infrastructure Grant (MIG) allocations. The combined equitable share allocations of the 20 DMAs amounts to R 74, 5 million and the MIG allocations to R 32, 5 million over the 2007 MTEF. Implementation of option 3 would affect the allocations of the associated district municipalities from where the DMAs will be removed as well as the local municipalities that will be receiving them. 40

REVIEW OF DISTRICT MANAGEMENT AREAS: IMPACT ON MUNICIPAL FUNDING 41

SERVICE DELIVERY BOUNDARIES l l l We continued to work closely with the Department of Justice and CD and the SAPS. We provided technical support during their consultations, with the updating and re-drawing of boundaries. A Final “cleaning” process to align magisterial and police boundaries to municipal boundaries, where possible, was commenced. The verification process of the police and magisterial boundaries had been delayed due to the Constitutional Twelfth amendment and the elimination of cross boundary municipalities. We made arrangements with both the DOJ & CD and SAPS, to finalise our alignment project with them in 2007/2008. Furthermore we carried out a follow-up survey to the 2002 survey, to determine the needs of government departments in July 2006. 42

SERVICE DELIVERY BOUNDARIES l l We also signed a civil license agreement with IEC and Stats SA for the acquisition of satellite imagery. We discussed the possibility of embarking on a point to point descriptions of all municipal boundaries with stakeholders such as dplg, DLA etc. We however could not take the idea further because it became clear that funding would be come a problem. 43

ENHANCE QUALITY ENGAGEMENTS AND IMPROVE WORKING RELATIONS WITH STAKEHOLDERS l We interacted extensively with a number of stakeholders during the period under review, and these interactions have strengthened our relationship with these stakeholders: Ø City of Cape Town and the Western Cape provincial government during investigations on the creation of sub-councils for the City. Ø Stats SA, National Treasury and dplg on discussions around what the effective date should be for re-determined boundaries. Ø Reserve Bank, DBSA, National Treasury, Stats SA, DWAF, who all serve on the Data Collection Task Team led by National Treasury. Ø DPLG and DLA on a project that our three institutions are doing together to create a credible set of traditional area boundaries. Ø DOJ & CD and SAPS on the alignment project. Ø World Health Organisation and other International when we assisted them on a project to ensure that boundaries of municipalities in South Africa are correctly reflected in international documents. 44

ENHANCE QUALITY ENGAGEMENTS AND IMPROVE WORKING RELATIONS WITH STAKEHOLDERS Ø Ø Ø We worked intensively with DPLG on amongst other things, the definitions of the functions of the spheres of government. We were active participants in a conference hosted by Stats SA to deal with new provincial boundaries as a result of the removal of cross boundary municipalities. We commenced a process to forge closer working ties with SALGA, DBSA and other key stakeholders. 45

ENHANCE AND PROMOTE GOOD GOVERNANCE l We engaged in a number of projects to: Ø Improve administrative processes and systems. Ø Ensure effective Risk Management at the Board. Ø Improve the financial and procurement practices to ensure effective and efficient internal operations at the Board. Ø Ensure effective internal controls. Ø Ensure effective budget control. Ø Ensure effective management of donor funding. Ø Improve cash flow management at the Board. 46

ENHANCE AND IMPROVE ORGANISATIONAL CAPACITY AND CAPABILITY. l We engaged in a number of projects to: Ø Pursue achievement of annual strategic milestones across the organisation. Ø Provide employees with the necessary support for them to be capable of delivering against targets. Ø Improve the performance management system. Ø Increase skills levels. Ø Promote an orientation towards performance and accountability for results in the organisation. Ø To find effective ways of appropriately recognising and rewarding innovation and dedication to one’s work. Ø To develop a reliable, robust and responsive corporate system. Ø To enhance smooth running of the organisation. 47

DEVELOPMENTS GOING FORWARD l l l The Board’s work on boundary re-determinations, review of DMAs, and alignment of service delivery boundaries plays a significant role in ensuring that the country will be ready for national and provincial elections in 2009, and local government elections in 2011. As a result we have been working hard to foster and maintain close co-operation with various stakeholders, such as the IEC, DPLG, municipalities, provincial departments of local government as well as other national and provincial departments and institutions. Local Elections Task Team played an important role In preparing for 2011 local election: Relationship to be maintained and strengthened, and extended (SALGA) Align programmes and timeframes - also with DPLG Share data and resources 48

DEVELOPMENTS GOING FORWARD l l Work together on matters of common concern eg. new legislation, if any. Explore possibilities of joint public road shows to enhance interest and participation, and to ensure that legislation, process and timeframes are understood. The MDB and IEC have developed a programme that outlines timeframes towards the 2009 and 2011 elections. Efforts are now underway at Ministerial/Chairperson level to align the white paper process timeframes with the elections preparations timeframes. Officials from MDB and DPLG are working on the technical details of the possible alignment. 49

DEVELOPMENTS GOING FORWARD: ELECTIONS TIMETABLE Dec 2007 Board approve last sec 26 notices. Jan 2008 Last section 26 notices published before the local elections in 2011 March 2008 Last section 21 notices published before the local elections 50

DEVELOPMENTS GOING FORWARD: ELECTIONS TIMETABLE Key performance area: Hand over of outer boundaries to IEC, and ensure that formula and the number of councillors are gazetted April 2008 Closing date for sec 21 objections May 2008 Last section 21(5) notices published before the elections and IEC informed June 2008 IEC publishes all outstanding sec 23 notices July 2008 MECs publish all outstanding section 23 notices Aug 2008 Municipal boundaries provided to IEC Aug/Sept 2008 IEC align VD boundaries to municipal boundaries Sept/Oct/Nov 2008? Registration of voters for national and provincial elections Feb 2009? Certify national common voters roll and gazette it Feb 2009? Divide national common voters roll into municipal segments 51

DEVELOPMENTS GOING FORWARD: ELECTIONS TIMETABLE Key performance area: Ward delimitation and public consultation March 2009 Publish formula for the number of councillors (1999 problem area) March 2009 MECs determine and publish number of councillors for each municipality (1999 problem area) March 2009 MDB determines the number of wards and the norm for ward delimitation Apr 2009? National and Provincial elections Apr 2009 Formal consultation between MDB and IEC as required by Structures Act Apr-Jun 2009 MDB prepares first set of draft ward boundaries Jul/Aug 2009 Public consultation process commences (circular/media ads) 31 Aug 2009 Closing date for public comments Sept/Oct 2009 Consider public comments and prepare map set 2 for public hearings 52

DEVELOPMENTS GOING FORWARD: ELECTIONS TIMETABLE Key performance area: Consider public objections and publish final ward boundaries Nov/Dec 2009 Maps and notices distributed and logistics finalised for public hearings Jan/Feb 2010 Public hearings March 2010 Finalise map set 3 and gazette ward maps in Provincial gazettes for objections 1 April 2010 Closing date for objections Apr/May 2010 Consider public objections Jun 2010 Final ward boundaries handed to IEC Jun/July 2010 Alignment of VD boundaries to ward boundaries Aug 2010 Gazette final ward boundaries Aug 2010 Election date gazetted Aug – Nov 2010 Registration of voters 53

DEVELOPMENTS GOING FORWARD: ELECTIONS TIMETABLE Key performance area: Consider public objections and publish final ward boundaries Nov 2010 – Feb 2011 Preparations for elections March 2011? Local elections 54

STRATEGIC DIRECTION – MEDIUM TERM STRATEGY 2007/08 – 2010/11 l l l The Board has approved a strategic plan for the period 2007/08 to 2010/11. The Plan became effective in 1 April 2007. Plan identifies strategic themes to focus and guide the organisation over the next five financial years. The Strategic Themes respond to the key areas that the organisation should continue to excel at, and those areas where the organisation needs to improve performance, and bringing performance in such areas to expected levels. Strategic theme 1 & 2: determination and re-determination of municipal boundaries in accordance with relevant legal provisions, and the delimitation of wards Ø Attend to all outstanding requests for changes to municipal boundaries with a view to complete all changes in 2008/2009 for the 2011 local elections. Ø Ensure that all legal requirements are complied with in preparing for the 2011 local elections. Ø Ensure that the role of the Board is carried out in order to allow the IEC to complete the delineation of voting districts, by 2008/09. 55

STRATEGIC DIRECTION – MEDIUM TERM STRATEGY 2007/08 – 2010/11 l Strategic theme 3: collection of relevant information and maintenance and update data sets to render advisory services on capacity and the division of powers and functions. Ø Deliver Quality annual assessments of Municipal Capacity; Ø Advise and support MEC’s for local government in dealing with the adjustment and re-adjustment of powers and functions between local and district municipalities; Ø Release the results of the assessments in time to allow them to feed into the IDP and budgeting processes of municipalities. 56

STRATEGIC DIRECTION – MEDIUM TERM STRATEGY 2007/08 – 2010/11 l Strategic theme 4: review of the declaration of district management areas. Ø l examine the feasibility to withdraw all or more declarations. Strategic theme 5: assistance to departments in aligning service delivery boundaries with municipal boundaries. Ø Ø Ø To assist government departments to align their service delivery boundaries to municipal boundaries Enhance service delivery, resource rationalisation and development Development of a comprehensive database of well aligned administrative and functional boundaries, with a view to strengthen the National Spatial data Infrastructure for South Africa. 57

STRATEGIC DIRECTION – MEDIUM TERM STRATEGY 2007/08 – 2010/11 l Strategic theme 6: strengthening of relations and interaction with key stakeholders. Ø To build and manage relationships with our stakeholders that breed understanding and mutual respect. Ø To review our stakeholders requirements in relation to the Board’s support and services. Ø To facilitate co-ordination between all stakeholders. Ø To be actively engaged in community organisations and issues as far as resources and time allow. Ø To ensure a work environment that is safe, that encourages growth and development and inspires pride. Ø To develop and adopt a set of values for the organisation. 58

STRATEGIC DIRECTION – MEDIUM TERM STRATEGY 2007/08 – 2010/11 l Strategic theme 7: strengthening of the board’s organisational capacity and capability. Ø Develop and nurture capability at all levels within the Board. Ø Create an enabling environment at the Board that allow for the acquisition of competencies and skills among serving employees which are relevant and appropriate to ensure operational efficiencies, and thus more effective ways of achieving the Board’s mandate. Ø Build a culture of high performance in all employees, and provide training, mentoring and guidance to staff requiring such support; Ø Finalise a suitable and generally acceptable way in which the staff remuneration structure ensures fair remuneration to staff. 59

STRATEGIC DIRECTION – MEDIUM TERM STRATEGY 2007/08 – 2010/11 l Strategic theme 8: ensuring good governance Ø Complying with legal frameworks Ø Improving the efficiency and effectiveness of administrative processes and systems Ø Improving the quality and usage of management information Ø Planning and executing activities within budget Ø Managing risks effectively Ø Effective leadership, management and decision-making. 60

BUDGET PROGRAMMES PROGRAMME MEDIUM TERM EXPENDITURE ESTIMATES 2007/08 2008/09 2009/10 Administration and Human Resources Management R 4, 166, 773 R 4, 845, 132 R 4, 644, 292 Finance and Procurement Control R 3, 619, 440 R 3, 779, 060 R 4, 296, 428 GIS and IT Support R 3, 913, 906 R 4, 992, 277 R 7, 483, 644 Research and Investigations R 7, 512, 583 R 7, 805, 121 R 32, 609, 909 CEO and Board R 5, 124, 473 R 5, 728, 866 R 6, 207, 432 TOTAL R 24, 337, 175 R 27, 150, 456 R 55, 241, 705 61

IN CONCLUSION l l l l We have been overwhelmingly successful with respect to achieving a number of our pre-determined objectives. We have once again carried out our mandate without fail, despite chronic underfunding. We are consistent in vigorously tackling queries raised by the Auditor-General. The Board will stop considering all new boundary change requests on 31 October 2007. The Board’s work on boundary re-determinations, review of DMAs, and alignment of service delivery boundaries plays a significant role in ensuring that the country will be ready for national and provincial elections in 2009, and local government elections in 2011. Efforts are now underway to align the white paper process timeframes with the elections preparations timeframes. A new strategic plan has been approved by the Board. 62