MUNICIPAL OVERSIGHT: FUTSHANE CONSULTING
IMFO Audit & Risk Indaba 2015
20 – 22April 2015: Olive Convention Centre, Durban
Institute of Municipal Finance Officers & Related Professions
Overview






Accountability framework
Oversight Report: Contents
Oversight Report vs Annual report
Legislative mandate: Annual report contents
The basics: Common challenges
The basics: Quick wins
Institute of Municipal Finance Officers & Related Professions
Accountability Framework
Accountability Framework
Basic understanding
OVERSIGHT
Mayor
Council
• Policies
• Budgets
• Outcomes
• MM performance
• Approving budget
• Approving policies
Community
MM
• Implementation
• outputs
CFO and Senior
Managers
• Financial management
• Operational
management
OVERSIGHT
Institute of Municipal Finance Officers & Related Professions
Accountability Framework
Oversight report introduction
IDP
SDIBP
Annual Report
Audit
Report
Oversight
report
Community
feedback
Institute of Municipal Finance Officers & Related Professions
Oversight Report
Oversight Report
What is an oversight report
 The Oversight Report follows consideration and consultation
on the Annual Report and is considered to be a report of the
municipal council to the community disclosing the level of
success or otherwise, obtained with meeting the priority needs
and stated desires of the community as contained in the IDP
Institute of Municipal Finance Officers & Related Professions
Oversight Report
Contents
 The Oversight Report must include a statement whether the
Council:
 Has approved the annual report, with or without
reservations;
 has rejected the annual report; or
 has referred the annual report back for revision of those
components that can be revised.
Institute of Municipal Finance Officers & Related Professions
Oversight Report
Scrutiny of Annual report
 S46 of MSA
 1. A municipality must prepare for each financial year an
annual report consisting of :
 (a) a performance report reflecting :
i) the municipality’s and any service
provider’s
performance
during
that
financial year, also in comparison with
targets of and with performance in the
previous financial year.
 (ii) the development and service delivery
priorities and the performance targets set by the
Municipality for the following
financial year;
and
Institute of Municipal Finance Officers & Related Professions
Oversight Report
Scrutiny of Annual report

(iii) Measures that were or are to be taken
to improve performance
 (b) an audit on financial statements and the report on
audit on the audit performed in terms of sec 45(b) and
 (c) any other reporting requirements in terms of other
applicable legislation.
 2. Any Municipality must table its annual report within one
month of receiving the audit report in sec (1) ( c)
Institute of Municipal Finance Officers & Related Professions
Oversight Report
Balance scorecard
KPA
KPI 1
Baseline
Target
Actual
KPI 2
Comments
Baseline
Target
Actual
Institute of Municipal Finance Officers & Related Professions
Comments
The Basic
The basics
Common Challenges
 SMART Principles
 EG:
 “Road A will be constructed by the end of February 2015”
 “ 100 000 job opportunities are going to be created by the
end of the financial year”
 “R 2mill to be spent on the registration of indigents by
June 2015”
 Explaining deviations
 Submitting report timeously
 Committee setup – oversight committee
Institute of Municipal Finance Officers & Related Professions
The basics
Quick wins








The oversight report is responsibility of committee
Structure of committee
Who should attend
Purpose of the committee
Agenda of committee
Thorough review of IDP/SDBIP
Service delivery tracked
‘’Local government exists to serve the people. That is the
bottom line,”-President Zuma
 “Municipalities must take more decisive action to involve
communities and community organizations in the matters of
local government.’’-President Zuma
Institute of Municipal Finance Officers & Related Professions
The basics
Quick wins




Regular and transparent community feedback
Assess root cause of challenges
Assess action plan to remedy deficiencies
Guide the executive/hold them accountable
Institute of Municipal Finance Officers & Related Professions
Any Questions
About the Presenter
Lerato Futshane
Position
Managing Director
Futshane Consulting
Experience
 Lerato has 7 Years of auditing and Financial management experience and is the lead director at Futshane Consulting
 During his career he has accumulated a wealth of knowledge which has helped him master accounting and auditing. As part of
Futshane Consulting he ahs been involved in various public sector projects across the country ranging from asset management
to revenue enhancement.
 He is a Registered Auditor which has been exposed to both public and private sector has been exposed to different size
entities in different industries, his exposure includes:
 Municipalities
 SOE’s
 Stock brokering companies
 Dual listed entities
 Major Bank
 Pension Funds
 Medical Aid Funds
 Non-profit organisation (Section 21 company)
 Investment companies
 Small Businesses
 Lerato also has a strong technical Financial Accounting background which he developed while working as a Senior Lecturer at
Wits University. This has allowed him to pursue his passion of developing the economy through education and skills transfer.
Qualifications
 BCompt (Hons)
 Chartered Accountant (South Africa)
 Registered Auditor
Institute of Municipal Finance Officers & Related Professions
 Outcomes-based assessor certificate
About the Presenter
Abdul Chiwalo
Position
Manager
Futshane Consulting
Experience
 Abdul has 5 Years of auditing and Financial management experience and is the Manager at Futshane
Consulting
 During his career, he has gained extensive experience in the audit and accounting professional working in
the private and public sector and has a deep understanding of the issues and challenges facing these
sectors.
 His exposure to both public and private sector includes following:
 SOE’s
 Non-profit organisation (Section 21 company)
 Investment companies
 Small Businesses
 Through his involvement in the public sector, he has taken a keen interest in municipal administration
especially the following areas:
 Asset management
 Financial reporting
 Revenue enhancement
Qualifications
 BSc (Hons) in Accounting
 Certified Chartered Accountant (ACCA)
Institute of Municipal Finance Officers & Related Professions
Thank You!
Institute of Municipal Finance Officers & Related Professions