Victor Khanye Dr JS Moroka Emakhazeni Emalahleni Steve Tshwete Thembisile IMFO 6 October 2015 AL Stander NKANGALA District Municipality

““Working together with the people to push back the frontiers of poverty”Working together with the people to push back the frontiers of poverty”Access to basic services for all !Access to basic services for all !

Victor Khanye

Dr JS Moroka

Emakhazeni

Emalahleni

Steve Tshwete

Thembisile

IMFO6 October 2015

AL Stander

NKANGALADistrict Municipality


Nkangala District Municipality (DC31)

The Nkangala District Municipality (DC31) is one of the three (3) District municipalities in Mpumalanga Province. The headquarters of Nkangala District Municipality is in Middelburg (Steve Tshwete Local Municipality). The District composes of six (6) local municipalities namely; Victor Khanye Local Municipality (MP 311), Emalahleni Local Municipality (MP 312), Steve Tshwete Local Municipality (MP 313), Emakhazeni Local Municipality (MP 314), Thembisile Hani Local Municipality (MP 315) and Dr J S Moroka Local Municipality (MP 316).


Nkangala District Municipality (DC31)

The boundaries of the District covers a total area of approximately 16,892 square kilometres.

The main economic drivers of the District Municipality are mining, power generation, steel manufacturing, agriculture and tourism.

The municipality obtained unqualified audit opinions since 2002. NDM was selected as a pilot site for the implementation of mSCOA and adopted a strategy to align it with our planning and budget cycle.


PRESENTATION OUTLINE(video and graphic sourced from known/unknown sources on the internet)

• Life at a municipality

• DR Kotter: 8-steps for leading change

• Stages to change

• People

• Communication is key

• Setting the stage

• Making it happen

• Making it stick

• Challenges

• Advice to non-pilot municipalities

• Decide for yourself


Life at a municipality

Previous year AFS

Current year budget implementation

Future MTREF


Real life at a municipality


Dr. Kotter: 8-Step Process for Leading Change

We have to work hard to change an organization successfully. If we’re too impatient, and if we expect too many results too soon, our plans for change are more likely to fail.

When we plan carefully and build the proper foundation, implementing change can be much easier, and we’ll improve the chances of success.


Stages of change

Lack of knowledgeInitial reactionConfusionExit criteria: realise the change will affect the status quo

Knowledge of change, lack of full impactNot sure how it will affect themShow resistance or uninformed optimismExit criteria: describes change and the business rationale after active questioning

Start to understand change,Bargain, displays anger, actively search information/shows denial actively judging how the change will affect the businessExit criteria: speaks positively about the change , participate actively in meetings to discuss the change

Shows signs of buy-in, want to embrace the change, willing to “try-out”, see positive implications for business, commits time and energy, makes formal decision to changeExit criteria: attempts to implement the change

Long term application of change, the change is treated as the norm Implementation is past point of no return, take ownership of change, high energy levels for the changeExit criteria: Initiate continuous improvement


PEOPLE

• LG serves the people of SA and this project should assist us in doing that better.

• People can make or break such a project• Buy-in from top levels (Executive Mayor,

councilors and MM)• Involvement of a cross-functional team.• The mSCOA project leaders must be committed,

dedicated and performance driven people• Don’t think that all people experience change the

same


Communication is key!!!!!

The mSCOA piloting has brought about change in:-municipal processes, -systems, -organizational structure and -job roles.

This change has been an unsettling issue amongst departments and employees at all levels.


Setting the stage

Action Risks Mitigation

Motivation to change (buy in from all stakeholders),

Resistance to change, saboteurs, uninterested bystanders

Use every opportunity possible to motivate the benefits of mSCOA

Be strategic Insufficient fundsLow prioritisation of project

Include project in IDP and Budget


Setting the stage


Organisational reform, Own chart (understand it)

Slow or non implementation, no guiding plan, non identification of all possible risks

Used Dr Kotter model to implement the change, develop an implementation plan with clear actions, allocation of roles and responsibilities, risks and mitigation factors

Involvement of a cross-functional team.

Insufficient understanding of mSCOA regulations as an institutional reform and not merely a financial reform

Arrange training sessions and request NT to arrange special training


Setting the stage


Appointment of mSCOA project leaders

Non commitment to drive process (it is not a one man show)

Selection of a performance driven team that understands the current chart. Train and empower them to lead the change


Making it happen


Ownership of the process Non implementation as it is seen as a NT reform

Creating a vision and the motivation to change

MOU with system vendor/s

Unclear roles and responsibilities between muni and service provider

MOU signed by both parties

Study the regulations, Start ASAP, be prepared to get your hands dirty

Non compliance to mSCOA regulations

Arrange training for internal staff on the reform and on the system changes


Making it happenAction Risks Mitigation

Assessment of system vendor capabilities

Non compliance to mSCOA regulations

Conduct regular project steering meetings with vendor and other pilot municipalities

Empower internal stakeholders

Incorrect application of mSCOA, non compliance to budget regulations

Training sessions on mSCOA and system changes.mSCOA project leaders to assist with budget capturing

Management of the change process

Failure to implement change

Keep audit trail Provide regular feedbackInvolve IA to audit change process


Making it happen


Tabling of draft and adoption of final budget on mSCOA

Non compliance to mSCOA and budget regulationsErrors in budget capturing

Training sessions on mSCOA and system changes.mSCOA project leaders to assist with budget capturing

Going live and transacting in mSCOA

System fall over, Down time in operationsCapturing of old year transactions on old format, whilst transacting in new format

Testing of transactions before going liveEasy transformation back to the old system


Making it happen


Third party integration (Payroll)

Non compliance to mSCOA, Delay in salary payments

Testing of integration before going live

First month end and correct in year reporting (sec 71)

System fall over, Down time in operations

Testing of month end procedure before going live

Preparation of quarterly reports

Non compliance to budget regulations

Fall back on manual excel model


Making it happen


Preparation of AFS Non compliance with GRAP, change in classification affects PY comparatives, AG buy in in reform and understanding the challenges faced by municipalities

Automated comparative TB that indicates classification changes, engagement with AG team


Making it stick


Adaptable to changes Changes in the versions of mSCOA can be difficult to implement

Adoption of GUID approach made this easier and quicker to respond,

Keep the momentum, Resistance to changeDrop in motivation levels

Celebrate small wins, be prepared to redo things as we are a pilot site, knowledge sharing, Keep record of challenges and how you over came it, think multi dimensional


Making it stick


Ensure successful implementation

Failure to implement Monitor progress on a regular basis, adjust plan if needed, keep on assessing any risks that can influence your desired project outcome.Get post implementation feedback


Challenges

• Tight timeframes of mSCOA and other day to day activities

• Late appointment of mSCOA accountant

• Current mSCOA (version 5.3) does not fully cater for District Municipalities (Core and non-core still an issue, e.g. Social Services)

• Prior year adjustments in preparation of 2014/15 AFS

• Need of interim adjustment budget (not in accordance with MBRR)


Challenges

• The current MBRR budget and reporting schedules & upload files to NT LG database are not aligned to mSCOA. Draft budget was tabled & final budget approved on the old budget formats. Monthly upload submissions and schedules on old format.

• Alignment changes from old GFS to new mSCOA GFS

• Buy in of AG on reform – process to be followed for implementation and auditing of AFS


Challenges

• Ensuring that all stakeholders will be understanding the new mSCOA formats

• Absence of sufficient control accounts• Detail of some items, e.g. Travel and

subsistence vs absence of detail on items like loans, investments, etc. (hampers automisation of IYM reports and AFS disclosure)

• Machinery of state is SLOW


Advice to Non-Pilot Municipalities

• Start today, study the regulations, study the NT project document.

• Appoint a dedicated mSCOA project team• Prepare a mSCOA implementation plan and

identify all risks that might affect the success of the project

• Start to align the old chart to the new one• Ensure that existing hardware will be able to

accommodate mSCOA



• Make provision in your IDP and budget for mSCOA implementation

• Monitor progress against the implementation plan, institute corrective actions and adjust the plan with unexpected issues.

• Ensure that you have backup plans or mitigation strategies for all identified risks.

• Most of all be a change agent (change is never easy but it empower you to move forward) – communication is key



• Get buy in from all relevant stakeholders, including political buy in.

• This is not a financial/GL reform it is a business reform – all managers must be involved. The mSCOA changes the way we do business and the way we report on transactions.


Juggling is not new


Juggling is a learnt skill (even a zebra can do it)


Decide for yourself


PEOPLE mSCOA ROCKS

We have decided to embrace the mSCOA fully

As we will be adjusting our dance moves in mSCOA next financial year, others will only

start the process


It was good to hear our people saying things like:“We are mSCOA champions and I can teach other municipalities” “mSCOA made us really to apply our minds preparing our budget”

Enjoy the juggling

LG are the most important sphere of government – we serve the people

directly

““Working together with the people to push back the frontiers of poverty”Working together with the people to push back the frontiers of poverty”Access to basic services for all !Access to basic services for all ! 32

THANK YOU

Documents

Victor Khanye Dr JS Moroka Emakhazeni Emalahleni Steve Tshwete Thembisile IMFO 6 October 2015 AL Stander NKANGALA District Municipality