Afrec MBFM Module: Integrating IDP and Budgeting Processes
Municipal Budget and Financial Management Programme:
Integrating IDP and Budget Processes
Prioritizing municipal Budget resources in IDP
processes
Session Notes
Prepared by:
André Olivier and Zenobia Africa
Organisation Development Africa
P.O. Box 16526
Tel: 021-4222970
Fax: 021-4222934
E-mail: andre@oda.co.za
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Afrec MBFM Module: Integrating IDP and Budgeting Processes
Table of Content
1.
2.
3.
Introduction ................................................................................................................. 3
Approaches in resolving the public resource allocation problem .... 4
Critique of current municipal capital budget prioritisation practices
6
4. From a Critique to Practical Models ................................................................ 9
5. Outlining a methodology for municipal capital budget prioritization
through group decision processes .......................................................................... 11
6. Methodology Application in practice: The case studies ............................................ 15
7. Evaluation .................................................................................................................. 25
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1.
Introduction
It is generally accepted that representative democracy needs to be supplemented by ongoing
participative democratic processes that allows individuals, communities and stakeholder
groups influence over development decisions and the allocation of resources which affect them
(Abbot: 1996). An underpinning principle of the post-1994 transition in South Africa is that of
participatory and direct democracy at all levels of government. (Houston: 2001) The
deepening of local democracy in South Africa is increasingly embedded in wide-ranging
regulative provisions that oblige organs of the state in general and municipalities in particular to
establish mechanisms and processes for public participation. Municipal legislation (Municipal
Systems Act) lays down formal measures to establish a coherent system of developmental
local governance resting on pillars of community participation, integrated development
planning (IDP), budgeting; and performance management. The preparation of IDPs, in
particular, has become a mantra to communities, managers and political representatives at all
levels of government as an all-embracing planning tool which will allow municipalities to
address wide ranging developmental challenges, through public participation, in a systematic
and sustainable manner.
Assessments of integrated development planning in the Western Cape (see Liebenberg, 1999;
FCR, 1990; FCR, 2001, PGWC, 2002i) reveals a picture of municipalities utilizing a variety of
methodologies and tools in the development of their IDPs. An experiental approach to the
development of IDPs is thus emerging as practitioners are coming to grips with the processes,
tools and methodologies of complex multi-year plan-led resource allocation. A series of IDP
Guide Packs were published by the Department of Provincial and Local Government (DPLG)
and the German Agency for Technical Co-operation (GTZ) to support the work of municipalities
and strongly influenced Western Cape Municipalities in the planning and execution of their IDP
processes. These guide packs, specifically Guide IV Toolbox (Section C: 83-115), includes a
section describing decision-support tools and techniques of varied complexity, including
specific software applications.
A weakness in the application of decision-support within IDP processes remains the
establishment of an explicit link between issues raised through community participatory
processes and the development of budgets within the IDP. Experience with statutory planning
in South Africa suggests that normative planning processes that are not explicitly linked to an
implementation framework rapidly loose credibility and commitment. Although medium to large
municipalities in South Africa in general have some experience of formal resource allocation
systems, few of these systems exhibited rigorous links between the formal political/technical
budget process and popular community participation processes. Furthermore, despite a history
of community participation very few municipalities have institutional knowledge in the
application of group-based decision support systems that would facilitate a stronger link
between IDP and budget; as well as community participation and budget.
This paper aims to contribute to the growing body of best-practice tools and experiental
learning by municipalities in preparing and linking IDPs with capital budgets through a fair and
transparent process of public participation based on a combination of multi-criteria decisionanalysis (MCDA) techniques in a group decision-making environment. We then describe and
critically assesses the application of decision methodology in two Western Cape municipalities
within the context of typical problems being experienced in capital budgeting.
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2.
Approaches in resolving the public resource
allocation problem
Access to capital, the manner in which scarce public resources are prioritized, the efficiency of
capital expenditure and the sustainability of capital infrastructure are all important determinants
of the quality of democratic governance and developmental performance of the local state.
This paper focus on systems and procedures to give fair and transparent effect to participative
resource prioritization processes.
Two broad approaches towards resolving the public resource allocation problem dominates.
The first state centric resource allocation approach is rooted in public finance theory (see
Musgrave & Musgrave: 1989, Hyman, 1999 and Walker & Megistu, 1999) and mainly finds
expression in systems of inter-governmental fiscal relations through representative democratic
practice. The resource allocation process typically is reflected within the budget process itself
through formula driven resource allocations based on the use of objective criteria. The
determination of Equitable Share Grants; the South African vertical redistribution transfer
mechanism, as well as the Dutch fiscal transfer review follows this type of approach and is
ideally suited to the mathematical application of Multi-Criteria Decision Analysis (MCDA)
techniques. In general state centered resource allocation processes are highly efficient and
rational. Although direct democratic public participation can and does take place within a
systems approach1, the transaction cost of such approaches is typically high due to the
complexity of the decision, scale and volume consultation required. Public participation
therefore mostly finds expression in representative democratic terms where individuals are
collectively served by a system of group or class interaction through political parties and
interest groups. The outcome of such participative processes is subject to majoritarian rule
which bias voting outcomes and tweak allocation criteria against minority interests. In addition
to the obvious transactional limitations, patronage dangers, class divisionary and the conflictual
nature of state centered resource allocation approaches prompt strong Marxist critiques of this
approach. The Marxist critique of systemic resource allocation approaches is based on an
interpretation of the role of the state as representing the interest of the ruling class to exploit
the subjugated classes. The Marxist critique further highlights the inherent conflict of interest
between that of “monopoly capital” and the fiscal state. On the one hand the state is
pressurized to expand social and security expenditure in order to maintain social peace and
order, while monopoly capital have a vested interest in curtailing state expenditure, thus
causing a fiscal crisis for the state. Bond (2000¹, 2000² and 1991) argues the failure of the
current neoliberal and elitist South African fiscal resource allocation system to redress uneven
development and conditions of poverty.
An alternative society/community centered approach to the resource allocation question
emerges from development and public administration theory and is implied by authors such as
Bond as well as a variety of good governance authors (Osborne & Geabler, 1992, Abbot: 1996,
Rhodes:1997, Turner & Hulme 1997, Hyden ed. 2000, Parnell et al 2002). The alternative
approach involves the opening up of resource allocation decision-making through the
application of participative democratic processes. Society centered resource allocation
processes also correlates with the developmental government school of thought that holds that
the process of interaction mutually empowers communities and state organs to find optimum
solutions to development challenges through joint action. The notion of developmental local
government is very much embedded in the South African practice and legislation as an
approach that integrates actions of the state with expectations of communities. Yet, it remains
generally poorly understood and applied; and largely unsupported by appropriate tools and
1
The Message to Trevor campaign leading up to the annual budget speech being a good example.
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techniques that transcends fairly naïve and unsophisticated public participation exercises.
Community centered approaches to resource allocation do not have the rich literature and
depth of methodology of the more technical state centric resource allocation tradition. It is
probably fair to observe that society/community centered resource allocation approaches are
based more on a set of principles than well developed and tested methodologies (Lootsma et.
al, 2000). Some characteristics underpinning the society/community centered resource
allocation approaches in practice are:
o
o
o
o
A greater emphasis on participative democracy rather than on representative
democratic process;
Determination of priorities tends to rest less on analysis and place more emphasis on
popular/communitarian opinion;
The decision process places more emphasis on the management of the participation
than the structure of the decision process; and
There is less emphasis on (and often an aversion to) the application of mathematical
and decision support tools, methodologies and software.
Despite the developmental value embedded in community centered resource allocation
processes, it cannot be assumed to result in more efficient decisions, rational outcomes, or
even to resolve some Marxist critiques than that of the state centric tradition. Community
participation does not automatically lead to decision nirvana. Current practice observed in a
range of municipalities across the country would suggest that the emphasis shift from rational
state centered decision processes with populist communitarian processes have not resulted in
better decision outcomes in developmental terms, on the contrary, it has contributed in a crisis
of delivery and municipal financial sustainability.
The view suggested in this paper is that community centered resource allocation is not an
alternative, but complementary approach to the resource allocation challenge as it is weak
where state centered approaches are strong and visa versa. However, within the more
contained municipal decision environment, where structures for participatory democracy are
viable, community centered resource allocation is a required intervention. The challenge is to
blend the strengths of both approaches into a robust methodology, to blend “hard” MCDA
decision tools with “soft” group decision methodologies.
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3.
Critique of current municipal capital budget
prioritisation practices
An analysis of municipal budgets in the Western Capeii points to the following observations in
municipal capital budget priotisation processes:
a)
Poorly developed prioritization processes, tools and methodologies: A key
observation is that the application of MCDA methodology in municipalities is relatively
poorly developed. (Lootsma et. al, 2000) There are several reasons for this:
A general lack of awareness of decision support tools and methodologies;
The application of MCDA-type decision-processes are fairly complex and poorly
understood by decision makers;
Prioritisation techniques have been developed incrementally over time, and
decision makers are comfortable with old systems and reluctant to change,
despite obvious problems with their prioritisation systems; and
Prioritization processes are often software-driven and mathematically defined,
resulting in a lack of trust from decision makers that do not have experience in
information technology and lack basic mathematical skills. Decision makers
often report their concern that software-based decision support systems can be
manipulated without their consent.
o
o
o
o
Towards a Budget resource allocation
typology: Budget Formats

Line-item / Incremental (budget by object of expenditure)
Programme Budgeting (budget by function)
Performance Budgeting (budget by function with prescribed

Plan-Programme-Budget System (goals through






performance target – R/kg, R/patient etc.)
planning, achievement targets through programming, mix of
resource requirements through budgeting)
Management by Objectives (budget by objective)
Zero-based budgeting (prioritize from scratch)
Target-based budgeting (envelope setting)
Medium Term Income and Expenditure
Framework (multi-year budgeting)
(From Walker & Mengistu)
b)
Ad hoc capital budget methodology: Municipal capital budgets reflect largely an
annual ad hoc collection of projects. Even when multi-year capital programmes exist,
such programmes mostly reflect a planning tool rather than a budgeted and prioritized
expenditure programme. It is not clear from a scrutiny of capital budgets which
services, infrastructure sectors or geographic areas have been prioritized. The
prioritization task in an ad hoc budgeting context places the focus on adjudicating
between individual projects rather than competing needs; an overly complex task
when considering the large numbers of competing projects. Prioritization, insofar it
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formally happens, tends to be one-dimensional, i.e. prioritization only between
individual projects. There is an absence of a multi-layered prioritization approach that
emphasizes prioritization firstly between strategic priorities and secondly individual
projects.
c)
Mismatch between plans and budgets: Ad hoc capital budgets and disjointed
planning processes create tension between the planned priorities and actual priority
projects.
There are extensive statutory planning requirements placed on
municipalities. Plans are prepared because municipalities are required to have plans
by law or in terms of the policies of higher spheres of government. However, it was
found that municipal planning is in danger of being reduced to mechanistic processes
delinked with the actual strategic intentions of a municipality captured in the budget.
The onerous planning requirement faced by mostly under-resourced municipalities
seems to diffuse priorities and fails to get coherently translated into capital budgets.
d)
Lack of decision discretion- decision boundedness: Communities and councilors
are often frustrated on their lack of decision discretion in capital budgets as only a
small portion of the total budgets are available each year for prioritisation. There are
several reasons for this phenomenon.
o
o
o
o
2
3
External grants dependency - where priorities are not set at municipal level:
Where municipalities finance capital projects through loans or cash, the
municipality remains in control of the prioritisation decision as it has full decision
discretion. If municipalities receive conditional capital grants, then the
prioritization decision remains outside the locus of municipal decision-making.
Sol Plaatje Municipality (formerly Kimberley) is depended on capital grants for
92% of its capital budget for 2003/042 while Emfuleni (formerly part of the Vaaltriangle) is virtually completely dependent on grants.3
Counter funding commitment: When capital grants are received municipalities
usually gets locked in providing counter-funding. They have therefore to spend
money in order to ensure they can build grant funded projects. The counter
funding component effectively predetermines a substantial part of their
discretionary allocations.
Multi-year expenditure impact; where priorities have already been determined but
not yet delivered: - Another reason for limited discretion is due to the portion of
committed, or previously prioritized projects, on the annual budget. There is a
misplaced expectation that resources can be prioritized every year; even when
muli-year programming is followed. A separation is made between committed
capital and “new” capital projects. “new” capital refers to that component of the
capital budget that is available for prioritization or re-prioritisation. Often a
significant share of the capital budget consists of financial commitments to
projects that were prioritized in previous financial years, and which remain
uncompleted within a multi-year programme of expenditure. The incapacity of
municipalities to complete capital projects contributes to the large amount of
committed capital appearing in budgets. In reality any project that has not
reached a stage of contractual commitment usually gets reprioritized with new
projects; thus adding to the annual decision burden.
Capital efficiency; the ability to implement and spend: Capital inefficiency is often
expressed as the percentage of budgeted capital that is completed in a given
financial year. In the City of Cape Town the capital efficiency rate for 1999/2000
was only 30.4%. Thus less than a third of the capital budget was spent, meaning
that the provision for the unspent portion would be rolled over to the committed
Notes on SPM’s 2003/04 IDP Review process
Emfuleni Restructuring Grant application
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capital for the next financial year. It is important to note that only the “new”
component of the capital budget is available for prioritization. In the former
Helderberg Metropolitan Local Counciliii only 7.6% of the capital budget was
available for reprioritization in 1996 – not untypical typical for many municipalities
[5]. Local municipalities thus have limited influence over the prioritization
decision, with local communities having virtually none.
e)
Openness, Transparency and Accountability in decision-making: It has been
pointed out above that many prioritization decisions impacting on capital budgets are
taken within national, provincial and district governments through the allocation of
dedicated grants. These decisions are not accessible to communities other than
through normal representative democratic means. Local political representatives are
notoriously reluctant to lose discretionary decision-making powers through public
participation processes4. The natural reluctance of political representatives to commit
to formula- or planning-driven resource allocation processes is well recorded in
planning and public administration literature5]. Processes of public participation,
wherein the local community can participate in resource prioritization, thus need to be
carefully designed to fit the particular context. Openness to allow meaningful popular
processes of resource prioritization can be influenced by many variables:
o Popular disaffection to local political structures and poor perceptions of local
accountability6. Participation can become an expression of political disaffection
and a platform for mobilizing opposition. Elected leadership in these
circumstances are often reluctant to open decision processes;
o Political structure and power relations. In the event of explicit weak multi-party
coalitions as well as implicit intra-party factionalisation very little political space
exist for opening decision process control. In general a Machiavellian logic holds
that secure political positioning are best suited for popular participation;
o Culture of transparency and accountability. A local political decision-making
culture of representative democracy that emphasizes party loyalty above
community accountability will tend to reduce the transparency of decisionmaking. Prioritization decisions in politicized environments will be taken within
party-caucus structures while political resistance will be mobilized through
popular civic structures. The experience with overt political party representation
and discipline from the 1996 and 2000 local elections in the Western Cape has
not generally translated into high levels of political commitment to open,
transparency and accountability in decision-making processes.
f)
Public participation: It is a legislative obligation on South African municipalities to
consult the public with regard to key planning and budgeting processes. The
Municipal Systems Act, Act 32 of 2000 provides for extensive public participation.
The Municipal Structures Act, Act 117 of 1998 makes provision for the establishment
of sub-municipal participative bodies. The Municipal Financial Management Bill is not
yet completed; however, interim participative measures are saved in terms of section
10G of the Local Government Transformation Act for the preparation of budgets.
Despite extensive statutory provision the experience of public participation in practice
remains, however, mixed. A few typical problems are:
o Badly designed participative processes that fail to deal with conflict and
community diversity;
Lieberberg L., 1999. “The IDP experience: an analysis of two Western Cape processes”. Draft Report.
Foundation for Contemporary Research, 1999.
5 See Friedman, 1967; Friedman, 1973, Faludi, 1984, Potter, 1985 and Abbott J, 1996. Sharing the City;
Community Participation in Urban Management. Earthscan, London.
6 See Idasa Survey on public perceptions
4
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o
o
o
o
o
o
g)
4.
Lack of political involvement in participative processes, thus marginalizing
participants;
Lack of administrative commitment, resulting in poor implementation;
Inability to limit the range of matters for participation. Processes are often
badly de-legitimized through participative processes allowing community
expectations to build up around the identification of needs without proper
consideration of resource constraints or the range of functions that
municipalities render;
Lack of community capacity to engage on the relevant issues;
Politicization of the participative process; and
Dominance of the participative process by community leaders and bodies
with undefined constituencies and weak report back/mandating mechanisms
undermines the legitimacy of the participative outcomes.
Timing and decision scheduling: The preparation of annual budgets is a complex
and time consuming process. If prioritization of capital budgets is not completed in
time to fit into an annual cycle of budgeting, then the ability to influence priorities
diminishes. South African municipalities work on a financial year from June to July.
Capital prioritization should be completed by March in order to influence budgets. It is
common practice in many municipalities to already complete the departmental capital
budgets by November the previous calendar year so as to allow sufficient time to
prepare more complex operating budgets. Despite these time frames public
participation processes often do not get to capital budget projects before March.
Unless the capital prioritization process is planned to align closely with the annual
budget cycle, the process gets marginalized . As soon as decision makers realize the
ability to influence decisions diminishes commitment to the prioritization falter and ad
hoc power brokering is likely to be the fallback prioritization mechanism.
From a Critique to Practical Models
From observation of current practices in capital budget prioritization practices a number of
lessons have been learned.
4.1
Key success factors observed from current capital budget prioritization practices
o
The system and prioritization process must be designed upfront in the decision process
to ensure buy-in and protect the integrity of the decision outcome. When the system of
prioritization is part of the public participation process trust is established.
o The decision-scope must be delimitated early in decision process. The amount of capital
available for prioritization must be clear in order to modify participant expectations.
Participative processes allowing an unstructured approach to needs determination get
discredited as expectations cannot be moderated to fit resource constraints. If decision
parameters are not known tension result between elected representatives and
community which inevitable leads to withdrawal from process by councilors.
o The decision methodology must be simple. Criteria should be limited and the application
of computer applications carefully managed to allow group decision-makers to retain
control over the methodology. However, MCDA has usually been left for the
prioritization of individual projects (most software tools used by municipalities focus
here). But, a key lesson is that MCDA is potentially also powerful in structuring the
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decision process and prioritizing between strategic priorities, each containing
programmes and individual projects.
o Prioritisation must be rooted in proper understanding of community development needs
and requirements rooted in quantified analysis. Where prioritization only consist of
comparing ad hoc project applications the developmental problems associated with
capital budgeting fails to be addressed. Although MCDA can improve the efficiency of
decision-making, it often fails to address the effectiveness of the decision outcome.
Policy and planned objectives must be reflected in defining and weighting of criteria.
The application of MCDA must therefore give substance to policy variables. The
prioritization decision should therefore only be a means, and not an end in itself in the
meeting of community development needs.
o Where large numbers of projects must be prioritized the decision process should be
stratified. A multi-layered decision outline allows the organization of projects according
to strategic priorities, ensures balanced outcomes and ensured rationality. Groups
struggle to evaluate and score large numbers of projects due to the information intensity
and mental fatigue during the decision process. Technical teams can group and screen
applications, but must be properly mandated to do so by stakeholder groups within an
agreed methodology. Stratification of the decision process should not be allowed to
undermine transparency of the overall decision process.
4.2
Outline of a generalised MCDA model that links the IDP with the Capital Budget
The objective in a generalised discrete multi-criteria decision analysis (MCDA) model is to
prioritise the elements of an alternative set, where each alternative can be judged under a set
of (often-conflicting) attributes or criteria. The attributes of each alternative describe meaningful
measures of the extent to which each alternative contributes to the achievement of the overall
objective. In general the set of attributes or criteria should be complete (i.e. all relevant criteria
should be considered; none should be omitted), non-redundant (i.e. only relevant criteria
should be considered), and yet not too large. Generally each alternative will perform well
under some of the attributes, but not so well under other of the attributes (for example, an
alternative may offer large benefits [good], but be very expensive to implement [bad]).
In a resource allocation problem, such as the allocation of a limited capital budget amongst a
number of projects, the prioritisation will allow the decision makers to choose a number of
alternative projects which can, in a sense, be considered the “best” projects for
implementation. Note that the attributes or criteria under which the alternative projects will be
judged are determined subjectively by the decision makers (the stakeholders in the group
decision environment). For any public policy prioritisation to be successful, however, the
attributes or criteria and their relevant importance should ideally be agreed upon by all role
players involved (including the wider community).
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5.
Outlining a methodology for municipal capital
budget prioritization through group decision
processes
In working with several municipalities in resolving their capital budgeting problems a practical
methodology was evolved that draws on the state as well as society/community centered
approaches to public resource allocation. In this manner the rigor of MCDA could be adjusted
to work in community-based workshop environments in providing real time solutions to
practical budgeting problems. The work reported in this paper was mainly conducted for the
2002/03 budget process in the first half of 2002, but has since been repeated and evolved
through the practical application in several municipalities.7
The methodology that emerged is captured in the picture below.
Decision
Explorer
VISA
Excel
Consolidation
of themes
Consensus on
Priorities
Project
Prioritisation
Generate Issues
/Ideas/Projects
Consensus on
Constraints
Plans
Programmes
Projects Filter
Community
IDP Forum
Administration
Workshop
technique
Excel
Feedback
Approval
Budget
Community
Council
Exco/Mayco
Administration
Exco/Mayco
Methodology Steps
The above methodology emphasizes both the decision space and the body that should make the
decision at each step of the process, as well as the tools and techniques that appropriate in each step
of the process.
Step 1: Generation of broad community input
This is a necessary precursor to the process followed in that the broad based community input
should be largely completed by the time the capital prioritization process start.
Step 2: Setting Strategic Focus
From the formal IDP and community participation processes a limited number of strategic
themes need to be consolidated. These themes summarizes and captures all the issues
raised through the planning process neatly into a statement or phrase of the strategic intent
that is understood and agreed to be all the stakeholders.
7
Mossel bay, Knysna and Sol Plaatje Municipalities
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The process of generating the ideas/issues needs to be inclusive of the community, elected
representatives as well as the municipal administration.
Various workshop techniques are useful to both conduct the process of generating content and
to group this content appropriately. Suitable software in this stage would be Decision Explorer,
although only a manual application of cognitive mapping techniques were used (see Eden &
Ackermann, 1998 for a complete discussion of these techniques)
Step 3: Determining Constraints and Setting Priorities
In the second stage the amount of funding available is determined with the assistance of the
municipal treasurer. These amounts can be easily calculated using various tools currently
available, such as the Development Bank of Southern Africa’s Combined Services Model.
When setting constraints the IDP Forum, a smaller representative group of stakeholders,
collectively goes through a structured decision process in which treasury data gets analyzed.
The process can be conducted with the help of a simple Excel spreadsheet.
The exercise should provide best estimates of the following nature:
o
o
o
o
o
o
o
Total capital availability for each financial year in the planning horizon;
The estimated committed capital for each year;
Any counter-funding required for the delivery of grant funded capital projects for each
year (these funds usually relates to housing;
Any area-based allocation that would be prioritized separately;
Once all the commitments listed above is deducted from the available capital amount,
an estimate of capital availability for each budget year can be calculated;
Not all capital is available for new projects, as provision for refurbishment of existing
infrastructure and equipment is also required. So, any capital amounts that is not
available for new infrastructure and equipment is also deducted;
Only after all the above deductions have been made from the total estimated capital
available can Councillors see over what amount they have discretionary decision
making influence. This is then the amount of money that can be prioritized in
according to the strategic themes determined through a public participation process.
Once the amount of resources that can be allocated is known the IDP Steering Committee can
prioritize the allocation between the strategic themes. VISA, a commercially available MCDA
software application can be used to structure a discussion of priorities. In the application all
strategic themes are listed with equal value. Using the visual sensitivity analysis window in
VISA participants can qualitatively weight strategic themes relative to each other on a
histogram. The result of this exercise is then reflected as a proportion of the total amount of
money being available. The link between the priority weights of each strategic theme and the
amount of funding available is them transferred into a simple spreadsheet. Each strategic
theme then has a target amount for from which projects can be funded.
Step 4: Project Prioritisation
All the issues, projects or interventions listed by anybody during the broad-based public
participation process is preferably listed on an Excel spreadsheet; providing a transparent
record of the decision process affecting every single idea/project/issue raised during public
participation. Individual projects then get linked with each of the strategic themes. Once the
link is established a decision filter should prepared to limit the range of projects that needs to
be prioritized. A typical filter will eliminate projects as follows:
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o
o
o
o
o
o
o
Only municipal powers and functions are prioritized. All projects relating national,
provincial and district municipal powers and functions are eliminated and listed for
submission to these authorities for their decision-making;
Once municipal projects have been filtered out an assessment is made regarding the
legality of projects. This filter is referred to as the projects breakers and projects
makers. Only projects that can be legally implemented by the municipality go through
this filter.
The next filter separates projects that either belongs on the capital budget or should
be incorporated into the operating budget as part of recurrent expenditure. Only
capital projects goes through to the next stage and all operating budget items are
then referred to line departments for consideration.
The remaining pool of capital projects is then split into two broad categories. The first
deals with equipment provision and infrastructure refurbishment. Projects falling into
this category will be decided by the management of the municipality. The remaining
projects should now only contain new capital initiatives over which the Council has
political discretion. These projects are then grouped according to the various
strategic themes.
Once the list of projects for each strategic theme is listed, the total amount that has
been determined is compared to the estimated cost of the listed projects. Only in
cases where the available amount is outstripped by the list of projects will actual
project prioritization necessary.
For each strategic theme where project prioritization is necessary separate criteria is
developed and weighted. Projects are then rated again these criteria and prioritized.
Only projects within each theme are rated competitively. Themes do not any longer
compete for resources at this stage.
In the final step a list of approved projects and list of projects that has fallen out of the
process is produced for feedback and Council endorsement.
Example of a projects filter
Responsibility
National
National
Provincial
Provincial
Local
Local
Must & Can’t
Makers
Breakers
Budget location
Capital
Operating
Source of Funding
Prioritization Pool
District
District
Internal
External
Upgrade
Upgrade &
&
Replacement
Replacement
IDP Strategy
Step 5: Feedback
At this stage of the process an event is required to feed the results of the capital resources
allocation process to stakeholders. It important that the process be kept transparent and that
account be given of each and every suggestion that emerged during the public participation
process.
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Step 6: Budget Approval
The final list of projects for final budget approval must go to the Council in terms of current
legislation. These processes often take a long time as councillors horse trade and compete on
behalf of their constituencies. However, if the process is not discarded at this stage the
amount of projects that has not received funding should be relatively small and very clearly
identified. In practice the range of projects that requires revisitation by councilors will be small.
It is important to note that the Excel spreadsheet on which projects was filtered out provides a
real-time and powerful decision support tool in the final Council deliberations. Additional
information, such as the spread of projects between wards, between parties etc. can be easily
added and produced on request using Excel spreadsheet capabilities.
Organisation Development Africa:
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Afrec MBFM Module: Integrating IDP and Budgeting Processes
6. Methodology Application in practice: The case
studies
Mossel Bay and Knysna Municipalities are both local municipalities in the Eden District
Municipality of the Western Cape. Both municipalities were created with local government
election in December 2000 through the amalgamation of rural and smaller settlements.
Although both areas have high proportions of low income settlements, Knysna reflects the
most dramatic increase of poor households due to sustained rapid migration. Yet, both areas
share a similar high service access profile. The result is that priorities need to be balanced in
both cases between investment in new reticulation infrastructure and services and maintaining
the already high levels of infrastructure availability.
Some basic comparative statistics are:
Category
Population
Informal
Housing
Political Makeup
8
9
Mossel Bay
Knysna
The current population of Mossel
Bay Municipality is estimated at
between 64 2768 and 73 6369
people. The current number of
households are estimated between
19 477 and 22 313 at an average
household size of 3.3. If the current
population growth trends continue,
then Mossel Bay Municipality could
add an additional 4 300 low income
households (households earning
less than R1 500 per month)
between 2000 and 2005. The
current estimated housing backlog
of 2975 forms part of this expected
growth in low income households
(this amounts correlates with the
3000 people on the housing waiting
list).
2 627
According to the 1996 census the total population of
Knysna Municipality was estimated at 43 194 people
and 12 493 households. However, a more recent
representative sample survey done on November
2001 estimated the number of people in lower
income areas alone between 38 247 and 42 273.
Lower income areas contain an estimated 10 499
households. It follows that the 1996 census results
are significantly affected by migration and that the
official census results needs to be significantly
adjusted. No reliable adjustments are available, but
it is estimated that the 1996 population would have
escalated at 2.7% growth rate to 52 000 in 2002. In
this period an estimated 6000 informal households
have been added through migration. At 4 persons
per household a further 24 000 people can be added
to the base population. A realistic estimate for the
current Knysna population is therefore approximately
76 000 people.
6300 or 43% of total households
DA majority with ANC minority
Weak DA and Independent coalition majority, where
the independents control the executive. ANC
minority.
1996 census adjusted
1996 census adjusted at growth rate of 2.7
Organisation Development Africa:
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Afrec MBFM Module: Integrating IDP and Budgeting Processes
Comparative Service Access:
Mossel Bay Municipality
Service Access
Ward
1
2
3
4
5
6
7
8
9
10
11
Formal
Dwellings (%)
88.7
90.8
81.9
96.3
98.8
79
59.9
56.6
83.8
83.2
63.7
Telephone at
Home (%)
38.3
70.7
34.1
74.5
83.4
71.8
16.8
29
23.5
45.4
43.1
Electricity (%)
81.6
85.5
66.5
98.7
99.1
96.5
82.4
89.2
92.2
85.1
88.6
Sanitation (%)
73
79
48
99
99
98
94
92
97
98
98
Piped Water
to Dwelling
(%)
64.9
78
39.6
92.2
98.7
83.8
44.7
47.9
34.1
83.3
85.2
Refuse (%)
72.7
80.2
31.9
98.6
99.1
96.9
89.7
90.2
98.5
98.4
97.9
Knysna Municipality
Service Access
Formal
Ward Households Dwellings
(%)
1
1301
74.9
2
1549
84.0
3
1773
93.1
4
1477
2.0
5
1747
93.8
6
1590
32.1
7
714
36.4
8
1351
89.1
Telephone at
Piped Water to
Electricity(%) Sanitation(%)
Refuse(%)
Home(%)
Dwelling(%)
59.4
35.6
81.8
4.4
71.1
7.1
16.3
41.4
72.9
75.4
94.5
0.3
90.8
28.4
84.8
96.7
91.0
65.0
95.0
0.0
91.0
16.0
24.0
98.0
73.6
33.5
88.0
0.0
91.2
14.3
14.2
83.2
92.4
47.7
93.2
0.6
86.0
31.6
25.0
96.6
Design of the Public Participation Process
Mossel Bay Municipality
Mossel Bay started quite late in 2001 with its IDP and left itself 2-3 months less than Knysna
for public participation. It follows that is initial interaction with communities was not as
structured and thorough as was the case with Knysna. However, effort went into community
awareness building though posters (such as the one below) and pamphlets, which Knysna did
not have to do.
Organisation Development Africa:
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Afrec MBFM Module: Integrating IDP and Budgeting Processes
Mossel Bay overview of process steps
Process Step
Gathering
Community issues
and input
Key Outcomes
Community Commitment: During October an
advertisement was placed in the local press calling
community organisations to register with the IDP Coordinator. A detailed contact list of community
organisations was updated following the
advertisement and used to invite community
organisations to the launch of the IDP Forum. In
addition community organisations were requested to
submit written inputs of their priorities for the
municipality.
Mile-stone dates
October 2001
The Mossel Bay IDP Forum was launched on 8
November in the Town Hall and was well attended by
a cross spectrum of organisations. The Municipality
organised its services into areas and appointed
customer service managers to each of these areas.
One of the tasks flowing from the launch of the IDP
Forum was to build community awareness of the IDP
process and to assist organisations within each of the
areas with collecting input from their members.
Grouping of issues
into clusters or
themes
Organisation Development Africa:
The IDP Forum had its second plenary meeting on 22
November 2001 and identified an extensive list of
issues and projects from which a list of IDP themes
was summarized. Issues, projects and priorities
raised at the plenary session or received in writing
were carefully recorded and have been incorporated
into the project list (see attached). It is noteworthy to
mention that the Municipality arranged transport,
using the local minibus taxi industry, for the second
22 November 2001
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Afrec MBFM Module: Integrating IDP and Budgeting Processes
plenary meeting which successfully increased access
for organizations from previously disadvantaged
areas and thereby increased overall community
contribution and the diversity of participating
organisations.
Development of
strategies and
strategic
programmes
From strategic
programme to
action
Preparing a Plan for
delivering
Preparing a multiyear budget with
annual expenditure
estimates
Integration of
programmes and
initiatives
Translation of themes into strategic programmes to
give substance to all of the themes/clusters identified.
Strategic programmes are ranked against each other
to determine their relative importance so as to assist
in the division of the available budget resources
according to these priorities.
Identify and select specific projects and activities that
will deliver on the objectives and targets of each
strategic theme in a transparent project selection
process. Each project grouped into a strategic
programme, prioritised and ranked as part of this
step.
Preparing a five-year schedule of projects/activities
with annual targets and deliverables for all the
strategic themes
Setting a five-year MTEF with realistic annual budget
targets relating to the predicted expenditure
programming of projects within each of the strategic
themes/programmes.
o
o
o
o
Preparation of
Consultative Draft
IDP
Adoption by Council
Allow the management team to engage
consultants regarding their work;
Extract key strategic issues and implications for
consideration by the management team;
Identify common themes and actions for
alignment between current initiatives; and
Integration into the Knysna IDP.
IDP Steering
Committee
December 2001
IDP Steering
Committee
December 2001 to
February 2002
April 2002
March to May
2002
February 2002
Document for presentation to Community
representatives
Plenary IDP Forum
May 2002
Approval of final IDP
June 2002
Summary of Process Steps in preparing the Knysna IDP10
Process Step
Gathering
Community issues
and input
Grouping of issues
into clusters or
themes
Development of
strategies and
strategic
programmes
Key Outcomes
A comprehensive list of issues and project
ideas were collected from a comprehensive
series of ward-based participative
workshops
Consolidation of municipal wide themes into
which all the issues can fit – broad
community workshop with invitees from
ward-base participants
o Translation of themes into strategic
programmes to give substance to all of
the themes/clusters identified.
o Strategic programmes are ranked
against each other to determine their
Mile-stone dates
August to October 2001
Brenton Community Hall
Workshop
13 October 2001
IDP Steering Committee;
Brenton-on Sea
23 November 2001
10 A record of the proceedings and list of attendants is available on request from the IDP Coordinator.
Organisation Development Africa:
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Afrec MBFM Module: Integrating IDP and Budgeting Processes
From strategic
programme to
action
Preparing a Plan for
delivering
Preparing a multiyear budget with
annual expenditure
estimates
Integration of
programmes and
initiatives
Preparation of
Consultative Draft
IDP
Adoption by Council
relative importance so as to assist in
the division of the available budget
resources according to these priorities.
Identify and select specific projects and
activities that will deliver on the objectives
and targets of each strategic theme in a
transparent project selection process. Each
project grouped into a strategic programme,
prioritised and ranked as part of this step.
Preparing a five-year schedule of
projects/activities with annual targets and
deliverables for all the strategic themes
Setting a five-year MTEF with realistic
annual budget targets relating to the
predicted expenditure programming of
projects within each of the strategic
themes/programmes.
o Allow the management team to
engage consultants regarding their
work;
o Extract key strategic issues and
implications for consideration by the
management team;
o Identify common themes and actions
for alignment between current
initiatives; and
o Integration into the Knysna IDP.
December 2001 to January
2002
February 2002
March to May 2002
Brenton Manor
22-23 January 2002
Document for presentation to Community
representatives
Brenton Community Hall
16 March 2002
Approval of final IDP
March/April 2002
Description of the Resource Allocation Decision Process
Both Mossel Bay and Knysna followed a similar process with the same process facilitator. This
process is outlined in broad terms below:
Step 1: Generation of broad community input
Both municipalities used different approaches in eliciting community input. Knysna made use
of ward-based meetings across the area, involving ward councilors while Mossel Bay called
general meetings. In both cases advertisements was placed to get organistions accredited
and mandated to provide sector-based inputs. The result from this step was a long list of
issues, concerns and project ideas. However, in both cases this step resulted in the creation
of a broad-based consultative structure; the IDP Forum.
Step 2: Setting Strategic Focus
The IDP Forum plenary, in both cases, workshopped all the inputs using a variation of a
facilitated workshop technique called Participlan. Participlan allows participants in small
groups to cluster ideas and issues in a visual manner. The result from each plenary process
was a list of IDP themes that was formally endorsed by the IDP Forum plenary.
Organisation Development Africa:
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Afrec MBFM Module: Integrating IDP and Budgeting Processes
Step 3: Determining Constraints and Setting Priorities
In both cases a repeated appeal was made to ensure that participants do not have a clean
slate onto which to paint needs without cognizance of the very real resource limitations faced
by these municipalities. In order to make resource availability clear the Treasurers were asked
to determine capital availability within the MTIEF. Three different financial modeling tools were
used by the treasurers. One typical tool is the Combined Services Modeling tool of DBSA to
verify more or less the validity of their conclusions. Treasurers were also interviewed to
assess assumptions on capital availability. The amount of money firstly, required to deliver on
IDP priorities and secondly, available for community-based prioritization were determined
using an Excel worksheet in a group environment. This tool structures the capital budget by
slicing it into separate components:
o Amount of municipal capital – to be resources from working capital, internal and
external loans incurred by the municipality;
o Committed projects – projects that runs over more than one financial year and which
commit the municipality in the years after the initial project was initiated. A 90:10 ratio
was used as a proxy indicator for the committed amounts. It follows that we assumed
that no more than 90% of capital will be available for new projects;
o Counter-funding: A key priority is housing, which is not a municipal function, yet is
seen as a key local municipal deliverable. This dichotomy is resolved through a
number of national and provincial grant mechanisms that pays towards services, land
and housing construction capital costs. However, in addition to the grants
municipalities need to commit contra-funding in order to be able to utilize grants. This
contra-funding requirement is uncertain as no firm commitment towards grant
approval exists from the funding agencies. Both cases did work on historical grant
funding patterns to estimate the amount of contra-finding that may be required. This
amount of money is therefore not available for prioritization;
o Maintenance, replacement and upgrading: Some expenditure commitments exist for
municipalities with regard to their existing services portfolio. May tend to ignore this
as they expand their services to accommodate urbanisation and migration. It is
necessary to make the negative implications of an unbalanced capital provision for
maintenance, replacement and upgrade explicit during the resource allocation
process. A ratio thus gets agreed on how much capital resources will get earmarked
for this expenditure category. In both cases a 50:50 ratio was agreed for planning
purposes.
o New Projects: These are capital projects that look at infrastructure and services
expansion – traditionally the focus of community participation and political
contestation.
The result of the respective capital availability work-sessions follows below:
Estimate of Capital Availability:
Mossel Bay Municipality:
Replacement
Grants Requir
Financial Year Capital Budget
Council
Housing
& Upgrade
Discretionary ement
2000/01
18.8
9
2001/02
18
16.2
2
7.1
7.1
5
2002/03
18
16.2
2
7.1
7.1
5
2003/04
19
17.1
1.6
7.75
7.75
4
2004/05
21
18.9
1.2
8.85
8.85
3
Total
94.8
Organisation Development Africa:
85.32
6.8
30.8
30.8
26
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Afrec MBFM Module: Integrating IDP and Budgeting Processes
Knysna Municipality
Financial
year
2002/03
2003/04
2004/05
2005/06
2006/07
Total
Total Capital
Replacement
Grants
Availability
Council
Housing
& Upgrade
Discretionary Requirement
30095660
13584590
2000000
5668300
7916290
16511070
162832330
50876570
7000000
5947000
44929570
111955760
21613780
20008650
1500000
2814000
17194650
1605130
42711403
32870403
0
2042500
30827903
9841000
14978360
11978360
0
1287500
10690860
3000000
272231533 129318573 10500000
17759300
111559273
142912960
Step 4: Project Prioritisation
Smaller mandated groups prioritized the IDP themes. In the case of Mossel Bay a formally
elected IDP Forum executive did this work and consisted out of the Council’s Executive
committee and a similar number of elected forum members.
In the case of Knysna mainly councilors did this work, but within the parameters set by the IDP
Form process. The IDP Forums, in both cases, indicated preliminary weighting for the various
themes. In the case of Knysna each organisation attending the plenary received three stickers
with which they could “vote” for themes. The outcome of this process did give an indication of
priorities but was heavily caucused by politically aligned organizations and did not reflect a fair
view of the cross section of participants. The ANC mobilized heavily for this part of the
process at the meeting and also made much more active use of the participative process than
the other parties.
Mossel Bay used its formally constituted IDP forum to prioritise its themes. This forum used
the results of the plenary where a different voting exercise was done. In Mossel Bay, unlike
Knysna, the small groups were asked to prioritise the themes, not the plenary. The results of
this exercise clearly indicated preferences but were disappointing in that small groups did not
work with a similar categorization of themes.
In both cases similar methodology was applied. VISA was used to facilitate a group decision
discussion. The IDP themes were then visually weighted by simply using the bar-graph tool in
VISA. The question participants had to resolve was the relative importance of each IDP theme
in relation to each other. The rules for participation were that:
a)
b)
c)
d)
e)
f)
Each theme must receive resources; as per community mandate but participants could
further cluster and consolidate themes (because it was clear from the VISA process that
the more themes you have the less resources could be allocated to each theme).
The question was to weight each theme relative to each other if you have a defined
resource base. For this reason the expression of weights as a percentage of 100 worked
well and was understood by participants.
The weights would be directly guide the resource allocation process, but does not
constitute resource allocation. It was made clear that the weighting is a guideline only for
the initial structuring of the budget and that the Council will remain the ultimate decisionmaking authority re resource allocation.
The weighting process only applies to the planning of the capital budget.
The weighting would apply across the multi-year duration of the IDP.
Only projects will get money – not themes. This was necessary as it will take time before
the municipalities will be able to function according to a planned programme budgeting
system. We thus have to fit IDP themes into a project-based budget approach.
Organisation Development Africa:
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Afrec MBFM Module: Integrating IDP and Budgeting Processes
g)
Projects will only compete within each theme as the weighting of themes eliminates
competition between projects between themes. This was a key intervention to move the
municipalities away from an ad hoc capital budget approach.
The grouping of ideas, issues and projects into themes and the result of the weighting exercise
follows below:
Mossel Bay
02/03
IDP Theme
Economic Development and
Tourism
Development of new Municipal
Services and Infrastructure
Housing and Land
Sport, Recreation and Culture
Spatial and Environment
Community Development
Governance and
Communication
Community safety and security
Total
Financial Year
03/04
04/05
Capital
availability
(Rm)
7.1
7.75
8.85 5-year
% Priority
Weighting 2002/3 2003/4 2004/5 Total
16
1.136
1.24
1.416
3.792
45
12
5
5
5
3.195
0.852
0.355
0.355
0.355
3.4875
0.93
0.3875
0.3875
0.3875
3.9825
1.062
0.4425
0.4425
0.4425
10.665
2.844
1.185
1.185
1.185
6
6
0.426
0.426
0.465
0.465
0.531
0.531
1.422
1.422
7.1
7.75
8.85
23.7
100
Knysna
Financial Year
03/04
04/05
Strategic Programme
Rural Development
Maintaining existing services
and facilities
New Municipal Services and
Infrastructure Development
Environment
Social Services and Facilities
Economic Development and
Job Creation
Safety and Security
Total
Organisation Development Africa:
02/03
Capital
availability
(Rm)
5.25
4.6
5.5 5-year
% Priority
Weighting 2002/3
2003/4
2004/5
Total
5
262500 230000 275000
767500
10
40
10
15
15
5
100
367500
385000
1074500
2100000 1840000 2200000
525000 460000 550000
787500 690000 825000
6140000
1535000
2302500
787500
262500
322000
690000
230000
825000
275000
2302500
767500
5092500 4462000 5335000 14889500
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Afrec MBFM Module: Integrating IDP and Budgeting Processes
A key complexity associated with this approach is that it confuses municipal funding discretion
with district, provincial and national funding responsibilities. The municipalities, in terms of the
functional division between spheres of government do not necessarily have the authorization to
decide, prioritise and fund some of the community-based priorities. This complexity was
addressed by designing an Excel spreadsheet that categorizes projects according to functional
responsibility as well as the capital budget slicing outlined above.
In compiling the capital budget project list: Knysna did this step internally while Mossel Bay
went for a different approach – described here. A key requirement in ensuring the integrity of
community input is to incorporate all inputs into a single list. The manner in which the list of
capital projects gets captured is an important aspect of the resource allocation decision
process. Projects within this list then get costed and screened to weed out duplications.
Once the screening is done the list captures each individual project in terms of:
o
o
o
Institutional location;
IDP theme link; and
Project name and description.
A series of filters are then added and completed for the project list. The filter enabled Mossel
Bay to group and analyze project by:
o
o
o
o
o
o
o
o
o
o
Department;
IDP theme;
Ward;
Government responsibility;
New or Maintenance, replacement and upgrade;
Project or Acquisition;
Capital or Operating;
Funding source;
Year of commencement; and
Committed status.
Knysna did not whish to change their existing project prioritization system (previously
described in our working paper). However, Mossel Bay initially was keen to explore MCDA
project prioritization techniques. Criteria and guideline weights for project prioritization was
initially work shopped with the IDP Forum executive using VISA in a group decision
environment. However, due to the large amount of projects (some 560) it was agreed that the
officials would be mandated to do project prioritization within the mandate of the Forum (the
Forum was created as an official committee of Council and as such has the power to delegate
this matter). The initial criteria and weights were summarized and exponentially weighted as
follows by officials:
Criteria
Essential and Legal Requirement
Job Creation and Economic Growth
Basic Service
Sustainability and Impact
Weight
4
2
2
1
The prioritization methodology was to be as follows:
a)
b)
Consistent team of senior officials to do the prioritization of all projects, assisted by
line managers responsible for their category of projects for clarity;
A five-scale scoring system was developed for application in each criteria to ensure
scoring consistency (the write-up of the definition of each scale in each category was
Organisation Development Africa:
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Afrec MBFM Module: Integrating IDP and Budgeting Processes
c)
d)
e)
f)
g)
unfortunately lost). This system was developed during a trail run with Electricity and
Water projects. The scale was 0-no compliance; 25- poor; 50-weak compliance, 75 –
good compliance and 100 full/strong compliance with the criteria.
The weighted scores within each IDP themes would be calculated using Excel and
expressed as a percentage of the total weighted score within each IDP theme.
The weighted score for the category of projects within each theme would be ranked.
The accumulated cost for each ranked project will be calculated; determining the cutoff set by the capital availability exercise and the weighting of each IDP theme.
Once the ranking and cut-off was completed officials would review the start-date of
projects so as to shift some projects into subsequent financial years so as to develop
scenarios for political consideration.
The final step would be political finalization by the Municipality’s Executive Committee
and final endorsement by the Council.
Step 5: Feedback
Both Knysna and Mossel Bay organized formal feed back sessions that was fairly well
attended by a cross spectrum of stakeholders.
Step 6: Budget Approval
Both Knysna and Mossel Bay reported easier budget approval processes. Only the Mossel
Bay budget process was attended and only this process had decision support availability at the
budget meeting. In both cases very little deviation from the results of the prioritization process
was reported.
Organisation Development Africa:
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Afrec MBFM Module: Integrating IDP and Budgeting Processes
7.
Evaluation
There are three aspects of the case studies that need to be evaluated:
a)
b)
c)
7.1
The process of public participation;
The system of decision-making on resource allocation; and
The use of MCDA techniques in project selection.
The process of public participation
In both cases a completely open an honest approach was followed in eliciting input from the
general public. Municipal-wide public participation is however very resource and time
consuming. The different municipalities thus used different methodologies. Knysna used initial
ward-based workshops to elicit inputs. Mossel Bay went for a public information process which
limited inputs to written submissions and workshops only with organized civil society. The
outcome of these is evaluated using the following criteria:
Criteria
Mossel Bay
Knysna
Openness- the
degree to which the
process allowed civil
society to participate
Very open – but with practical limitations
in workshops participation and
membership accreditation to IDP Form.
Workshops were limited to accredited
organizations and not individuals.
Accreditation was designed not to
exclude but to ensure organizations are
able to participate, has regular meetings
to mandate and reportback etc.
Credible – key role players within civil
society engaged with the process for its
duration.
Very open - large attempt was made to give
ward-based constituencies opportunity to
make inputs.
Credibility- the
degree of
seriousness with
which civil society
treated the
opportunity to
participate as an
indicator of the
credibility of the
process
Accessibility- the
degree to which
members of civil
society could
participate in terms
of transport, literacy
and language
Outcome – the
quality of inputs
Not all the income and race groups were
involved to a similar degree. Initial poor
participation by blacks resolved with
transport and food provision at meetings.
Rural communities and other
marginalized groups such as women,
youth and aged poorly represented
throughout.
High turnouts
Accessible: Transport was arranged
after initial poor diversity in turnout and 3way translation provided to include
everybody. Ironically very few people
actually require translation from English –
resulting in a fair amount of alienation
from the process due the time consuming
nature of translation.
Relatively poor: Most of the issues
raised was previously known and already
in official’s project lists. This may not be
a reflection on the process, but a
complement to the degree that ward
councilors and officials are in touch with
Organisation Development Africa:
Credible – workshops dominated by ANC
aligned organizations – but this did not
exclude other groups from participating. Fair
amount of coloured alienation was evident
and a cause for future action.
Special interest groups were fairly well
represented.
High turn-outs
Accessible: Transport was provided from the
start. Language was a very contentious
issue. Xhosa speakers were insistent on
translation. As a result Afrikaans speakers
reported alienation as most translations were
between English and Xhosa.
Relatively poor: Especially black civic
structures mobiles well around the IDP
process and presented clear and succinct
issues and proposals. Yet, most, if not all if
the issues were already covered in existing
municipal programmes
25
Afrec MBFM Module: Integrating IDP and Budgeting Processes
community needs.
Much focus on specific area related detail
and less quality input on municipal-wide
issues.
Political
endorsement- the
degree of political
commitment to take
the public inputs
seriously and the
degree to which
political parties
mobilized around
their constituencies
around the IDP
process
The frustration is however that many of
the problem areas, such as education, is
not a municipal competence and could
not be fully addressed
Fairly high: Some councillors were very
involved in the process. The ANC
councilors, being in opposition, played
brinkmanship and did not attend
meetings in numbers in an admitted
attempt to deligitimise the process during
the budget process. They did attempt to
do this during the budget process and
was accommodated as part of a process
deal allowing them to get constituency
mandates. This challenge was however
only procedural and not substantial and
part of expected party rivalry during the
budget.
Much focus on specific area related detail and
less quality input on municipal-wide issues.
Very high – councilors actively participated in
the process. Only one member of the
executive committee did not attend all the IDP
Forum meetings. Councillors were well
informed – making the adoption of the capital
budget merely a formality; concluding the
meeting in 90 minutes (the previous year took
four days).
The Mayor did not play a particularly
active role, delegating most of the
process interface work to a member of
the executive committee.
It was clear that ANC councilors were
better informed about the process than
some of their DA counterparts. This is
however more a reflection of the
differences in the political culture
between the parties than a reflection of
the participation process.
All Councillors actively identified projects
from their wards and constituencies as
part of the process.
Feedback – the
degree to which the
outcome was
reported back to the
community
A formal feedback plenary of the IDP
Forum was held – but was not
particularly well attended.
Forum members were supposed to feed
back as part of their mandate – no
feedback exist on how well they
succeeded to keep members informed.
No complaints were however received.
No formal feedback session of the IDP
Forum.
Forum members were supposed to feed back
as part of their mandate – no feedback exist
on how well they succeeded to keep
members informed. No complaints were
however received.
Councillors were supplied with
transparencies to facilitate in
constituency feedback meetings.
No feedback was as yet received on the
response to and quality of feedback
Organisation Development Africa:
26
Afrec MBFM Module: Integrating IDP and Budgeting Processes
7.2
The system of decision-making on resource allocation
The system of “slicing and splicing” the capital budget worked extremely well. It built the
capacity of councilors and communities on the workings of the budget and clarified many of the
past frustrations. Because of the increased transparency the credibility also improved. The
process also bound in councilors into the project selection and resulted in a fair correlation
between planned and actual allocation of funds.
The actual allocation of capital expenditure, as informed by the weighted prioritization for
Knysna is set out below is:
Planned
Total
Total
Council
Percentage grants
Percentage Prioritisation
10500000
8.12 128964380
90.24
0
6400870
4.95
726000
0.51
5
IDP Strategies
Housing and Land
Safety and Security
Economic Development and Job
Creation
Social Services and Facilities
Environment
New Services and Infrastructure
Maintenance Upgrade and
Replacement
Rural Development
4490000
10394843
1070000
78703560
3.47
8.04
0.83
60.86
17759300
0
129318573
0
5455000
10000
7648210
0.00
3.82
0.01
5.35
13.73
34370
0.00
75000
100 142912960
0.02
0.05
100
15
15
10
40
10
5
100
A similar comparison for Mossel Bay Municipality:
IDP Link
% Priority
Weighting
Economic development
and tourism
Infrastructure Provision
Housing and Land
Sport, Recreation and
Culture
Spatial and environment
Community Development
Governance and
communication
Community safety and
security
Total
Organisation Development Africa:
Maintenance
% of
Budget
Total
New
Budget
9
79
0
1785000
16183000
0
9
0
1
1725000
0
140000
8.60
0.00
0.70
2534000
902000
1463000
8.86
3.16
5.12
1
47500
0.24
2261400
7.91
1
185000
0.92
1210000
4.23
100.00 28586250
100.00
100
20065500
8.90
485000
80.65 17730850
0.00 2000000
% of
Total
1.70
62.03
7.00
27
Afrec MBFM Module: Integrating IDP and Budgeting Processes
7.3
The use of MCDA techniques in project selection
The prioritization process did not work well for the following reasons:
o
o
o
During the pilot and subsequent attempts to prioritise using the scoring system project scores
clustered either very high or low. There was therefore not sufficient score differentiation. This
problem could have been solved by redesigning the criteria, weighting or scoring scale.
However, there was no time for such a review;
Only the Director of Technical Services in Mossel Bay Municipality become familiar with
spreadsheets, making it hard for other members of the scoring team to understand the system
– despite various training sessions;
The line managers are familiar and comfortable with the old system of prioritization and were
reluctant to change. This system consists of categorizing projects as committed, new or ad
hoc (externally funded). Project selection was then done for new projects only through a
system of bartering and motivation related to simple criteria such as urgency, legally
requirement, efficiency etc. The problem with the “old” system is that it completely lacks
community input or accountability.
Knysna did not attempt a new project prioritization system. As it turned out both cases managed to
technically fit the vast majority of projects into the budget using familiar budgeting techniques:
o
o
o
o
By dismissing projects as unnecessary of undesirable for a variety of reasons;
Shifting the project start date forward into future financial years – which mean that these
projects still have to be prioritized and would not be guaranteed for future funding. This a timetested technique to dismiss low priority projects without actually scrapping them; or
Shifting the source of funding to ad hoc; meaning that the source of funding and thus
prioritization decision will be taken by another body. It also means that the municipality will not
finance the project and that actual funding will be subject to grant approval.
Shifting some maintenance and replacement requirements onto the operating budget.
i
Unpublished assessment and evaluation by the Provincial Government: Western Cape of IDP prepared for the
2002/03 cycle
We analysed 130 municipal budgets in the Western Cape for the 1999/2000 financial year. Note – due to the
unavailability of data we could not analyse actual expenditure outside of the City of Cape Town.
iii Helderberg has been incorporated into the new City of Cape Town from 5 December 2000.
ii
Organisation Development Africa:
28