SALGA Western Cape: Provincial Members Assembly How did Swartland proceed from a qualified audit in 2005/06 to achieve a CLEAN audit in 2010/11? Swartland 17 October 2013 International overview War in stead of Peace WHY? Poverty in stead of Prosperity Failure in stead of Success Leadership Understanding pa ge Content of presentation 1. Back ground: Swartland Local Municipality (SM) 2. How did SM proceed from an qualified audit report 2005/06 to consecutive clean audits?. 2.1 Leadership, and 2.2 Good Governance principles 3. What next: (1) Attitude, (2) Self improvement and (3)Leadership development 1. Die Swartland Munisipale Gebied 1. Swartland Municipal Area CAPE TOWN KAAPSTAD KALBASKRAAL MALMESBURY RIEBEEK WES / KASTEEL DARLING YZERFONTEIN MOORREESBURG KORINGBERG 1. Introduction Where are we? WEST COAST DISTRICT WESTERN CAPE POPULATION – 2011 CENSUS :113762 KORINGBERG MOORREESBU RG Staff members: 538 Councillors: 23 11 Towns AREA SIZE 3700 Km² YZERFONTEIN DARLING RIEBEEK WES RIEBEEK KASTEEL MALMESBURY RIVERLANDS ABBOTSDALE CHATSWORTH KALBASKRAAL Population growth Black African Coloured Indian or Asian White Other TOTAL SWARTLAND West Coast District 2001 2011 7 499 52 160 297 12 160 0 72 116 282 673 20 805 73 753 585 17 780 838 113 762 391 766 Annual Growth 10.7% 3.5% 7.0% 3.9% 4.7% 3.3% Population growth • The population increased from 65 300 in 1996 to 72 116 in 2001 and to 113 762 in 2011. • The average growth rate between 1996 and 2001 was 2% per annum while the growth between 2001 and 2011 escalated to 4.7% per annum. • Swartland was the second fastest growing municipality in the Western Cape between 2001 and 2011. Population growth • In terms of population size Swartland is now the sixth largest municipality in the Western Cape out of 24 municipalities (Cape Town metro excluded) and the largest in the West Coast District. • 64.8% of the population is Coloured, 18.3% Black African, 15.6% White, 0.5% Indian or Asian and 0.7% Other. Spending of Capex • 2010/11: 96% • 2011/12: 108% • 2012/13: 100 Why am I telling you this? To prove to you that Swartland has the ability to execute E E E = Energy E = Execute = Energise = Edge Part of attitude How did SM proceed from a qualified report in 2005/2006 Unqualified with other matters 2006/2007 2007/2008 2008/2009 2009/2010 Since 2005, eight consecutive years of 100% spending of MIG Clean audit in 2010/2011 Clean audit in 2011/2012 Clean audit in 2012/2013 Back to the question re “How did SM proceed from a qualified report in 2005/2006 to a CLEAN AUDIT in 2010/11 and 2011/2012?” The answer is two-fold and is based on: A: Leadership B: Good Governance A: LEADERSHIP Leadership styles and quality Begin with the end in mind • • • • Were is the beginning ? What is success? Will success ever be successful ? Prosperity partnership and creating a positive organisational culture Rules for interaction Value system Leadership philosophy Invocom methodology . LEADERSHIP …. cont • Ethical business practices • Implement and develop systems (automate) • Oversight by management • Staff (prosperity partnership and work place climate change)and IT B: GOVERNANCE • Not only to comply, but to improve • Risk Management • Internal Audit and Audit Committee • Fraud and corruption Understanding-Based Leadership® Leadership Present/Future Qualities Leadership Styles Techniques Talents/ Resources Leaders must be able to Informed communicat Understand e Involved and explain Share Past i.e. understand themselvesLeadership Problems/ Challenges Goals S M A R T pa ge ABOUT A, B, C, D AND E LEADERSHIP/DECISION-MAKING STYLES: THE FOLLOWING SLIDES REPRESENTS SWARTLAND’S FORMULAE FOR SUCCESSFUL LEADERSHIP OF BOTH APPOINTED AND ELECTED LEADERS pa ge Types of leaders Appointed Army Business Elected Politicians Shop/Shaft Stewards Informal Inherited Kings Chiefs Self Appointed pa ge LEADERSHIP AND DECISION STYLES A B X X X X Synergy 4X1=5 • • • • The leader thinks on own The leader makes the final decision Decision is implemented Monitor, problem-solving and healthy discipline • The leader thinks on own • Outlines the problem, ask for suggestions, stimulates participation and new ideas, listens open-mindedly • Interaction: discussions; explanations; acknowledgments • The leader makes the final decision - explains reasoning • Decision is implemented • Monitor, problem-solving and healthy discipline pa ge Leadership Technique W D W W H GOAL OBSTACLES PERFORMANCE EVALUATION √ Recognition X Plan LEADERSHIP QUALITIES (CONTINUED) Negative outside influences Communication Communication Respect Respect Relations Relations Discipline X Leadership Problems/ Challenges Y Leadership Problems/ Challenges There are no bad battalions only bad officers Napoleon Discipline The bad workman always blames his tools. A bad leader always blames his followers. pa ge THE LEVEL OF SUSTAINABLE PERFORMANCE IS DETERMINED BY LEADERS ORGANISATIONAL FOCUS HIGH LOW COSY ENVIRONMENT SUSTAINABLE VALUE DEAD FISH IN THE WATER SHORT TERM RESULTS OPERATIONAL FOCUS HIGH pa ge A: Leadership Begin with the end in mind Where is the beginning? Will come back to this at the END of presentation In my case 1 August 2006. The desire to be successful What is success? Will success ever be successful ??? How does it feel? How does it taste? Is it tangible? … Leadership continue Creating a positive organisational culture 1. Developed rules for interaction 2. Developed a value system 3. Developed a leadership philosophy 4. Implemented the INVOCOM system 1. Rules for interaction PROPOSED RULES 1 No subjects are taboo 2 Rationally with dignity: 3 Systematic & logic discussion Pascal X Parking Bay Historic perspective page 25 4 Holistic perspective 5 Never to hurt, only to learn 6 Participate as equals: Workshop status depends on contribution 7 I shall always try to be completely objective 2. VALUE SYSTEM Mutual Respect Positive Attitude Honesty and Integrity Self-discipline Solidarity and Commitment Support Work in harmony 3. Leadership Philosophy Through participation, understanding and purposefulness we create an environment in which staff flourish and deliver outstanding and sustainable services 4. INVOCOM methodology INVOCOM ® Employee Involvement through Communication for Commitment and Innovation ….. continue LEADERSHIP ETHICAL BUSINESS PRACTISES Do the “right thing” (Obama vs Banks) Get the team to do the “right thing” Convince the politicians to support the “right thing” The “right thing” was, to do away with performance bonuses !* …………LEADERSHIP continue Implementation and development of automated systems Performance Management (Excel to Database) HR – Develop electronic leave application/attendance register/exception reports within Payroll & Personnel Administration Supply Chain Management- automated Record keeping - Collaborator Land use, Capital Contribution & Building Plans (now only 15days) Execution of Council, Mayoral, Port Folio and management decisions – collaborator (world wide only 13% of strategic plans are executed/ implemented) Make the IDP everybody’s business 3 years ago 50% of our goals did not meet the SMART principle # Baseline info, of utmost importance ………..LEADERSHIP OVERSIGHT BY MANAGEMENT Monthly reporting: “checklist”- part of agenda of management meeting. Also PMS indicator of MM Reconciliations Exception reports – follow-up deviations & action Monthly report on Internal Audit & AuditorGeneral findings – follow-up and action (The above, part of Municipal Managers PMS) ………..LEADERSHIP STAFF Appoint quality/competent people (fit for purpose) Training – identify needs – train staff to ensure effectiveness and efficiency Competent staff in critical positions – Engineering/Finance/Corporate/Development/ Protection Municipal Managers must regard Internal Audit as their accountability agent ……STAFF continue Reality: Not sufficient funds in all spheres of Government to address ALL expectations Money/People/Skills – every spheres problem ۪ ۪ ۪ Re-evaluate your organogram: Deep structures (expensive, not always effective and efficient) Flat structures (need good leadership skills) Matrix structures (any one of the management team can be the leader, needs a lot of maturity) SWARTLAND MUNICIPALITY STRUCTURE Municipal Manager Protection Civil Electrical Finance Corporate EAC Development Strategic & Performance Flat structure Certain situations – matrix approach Internal Auditor vs Municipal Manager vs External Audit Committee Internal Auditor ……..LEADERSHIP continue IT DEPARTMENT Develop and improvement of systems Develop and use dashboards DASHBOARD (1) In your (Governance) face (2) (3) Talks about critical things (if something goes wrong it will cost you) One pager (4) Automated (5) It is in the negative B: GOVERNANCE • Not only to comply, but to improve • Risk Management • Internal Audit and Audit Committee • Fraud and corruption ……….GOVERNANCE Judge King said: “It is more expensive to be legal complaint, to be delivery complaint.” In Swartland Municipality, we do not do things only to comply with legislation, we really try to effectively implement, to improve service delivery. We collectively create an environment that is conducive to perform and to deliver What is Performance Alignment all about? STAKEHOLDER EXPECTATIONS STRATEGIC ANALYSIS AND PLANS RESULTS ALIGN THE ORGANISATION FOR SUSTAINABLE HIGH LEVELS OF PERFORMANCE ……….GOVERNANCE continue FIRST STEP Was to do away with performance bonuses (Swartland Municipality since 2005/2006) Developed an Client Service Charter PMS Contracts for all divisional heads PMS for Councillors Creates confidence and trust amongst the members of the public Benefits of 0% bonusses • • • • Address the real issues Create a culture of performance Innovative targets are set Serious in addressing gaps,and improving controls. • Also applicable on Division heads • Extended to Cllr’s • Mayor committed to PMS contracts ………..GOVERNANCE RISK MANAGEMENT STRATEGIC- and operational risks Priorities risks (High/Medium/Low) Develop and implement preventative and detective controls to mitigate risks and to bring it within an acceptable norm (RISK APPETITE) Risk profile Risiko = somtotaal van L + I ….. RISK MANAGEMENT Risk Management and control is a daily activity There are only 4 risk strategies (1) (2) Avoid it Accept it (3) Share it (4) Manage it - Then you are accountable - Outsource - PPP’s - Reduce impact (insure) - 95% of risks - Develop controls Accountability:= Is the sole purpose of PMS PM is the mechanism for good corporate citizenship … RISK MANAGEMENT • The focus must be on: GOVERNANCE RISKS, and CONTROLS • What is the reason for non-compliance? Bad management/leadership Bad governance Napoleon NAPOLEON (1) “The General is the Army” (2) “There are no bad battalions, only bad officers” Do you still remember: “Begin with the end in mind? Where or what is the “END” What next?: (1) Attitude, (2) Self improvement, and (3)Leadership development Why Searching for success DEFINITION OF SUCCESS * * * • Knowing your purpose in life • Growing to reach your full potential • Sowing seeds that benefit others A: KNOWING YOUR PURPOSE Our responsibility and our GREATEST joy – is to identify our PURPOSE in life ASK YOURSELF THE FOLLOWING QUESTIONS? 1 2 3 • What am I searching for? • Why was I created? • Do I believe in my potential WHO SAID SO? Theodore Roosevelt “Do what you can, with what you have, where you are”. When do I/you start? NOW “The only way to control our (local governments) future, is to create it”