Government cannot be blamed for lack of service delivery without addressing barriers
25-AUG-09
Natalie Zimmelman
Much has been written about the lack of service delivery from South Africa’s municipalities, but little has been written about the barriers faced by the very same municipalities and the government driven initiatives to try and address many of these barriers.
The South African Institute of Chartered Accountants (SAICA) and the Association of Accounting Technicians in South Africa [(AAT(SA)] have been engaged by stakeholders of the municipalities to assist them in addressing some of the issues facing municipal financial management.
These stakeholders include the national Department of Cooperative Governance and Traditional Affairs, the National Treasury, the Auditor-General and the respective provincial, district and municipal structures.
It is very clear that there are problems in the arena of financial management and this is reflected in the very poor audit reports received by municipalities over the last five years.
A key cause of this problem is that there is a critical shortage of accounting and financial skills available in the municipalities. This is not surprising. SAICA recently published research, which shows that there is a shortage of over 22 000 accountants to feed the South African economy. This shortage is only exacerbated in the public sector.
Let us be clear; a municipality is not a prime place of employment. There are structural tensions caused by the Municipal Systems Act, which gives full authority to the “politically elected” councils for all appointment decisions, the desired and expected as well as sometimes conflicting roles of provincial and national departments of Local Government (now Cooperative Governance and Traditional Affairs) and Treasury.
With a number of stakeholders having different primary strategies and objectives, and an organisation’s senior management at the whim of political appointees, the work environment can be extremely frustrating.
According to the Municipal Systems Act, the National Department is not empowered to define the skills required within a municipality. In 2007, the National Department was taken to court as they had set a minimum standard of qualifications as a degree for senior municipal officials and the municipalities argued that they had no jurisdiction. The National Department lost!
The National Department has also been trying to complete a skills audit of senior municipal officials (those officials who are classified as S57 management). Even this skills audit could not be compulsory.
In Limpopo, only 30% of the S57 staff even completed the audit. While the results of the skills audit have not been published, I understand that the level of skills recorded is nowhere near the minimum standards desired by National Treasury (in accordance to their 2013 compliance targets). Imagine if all S57 managers had actually reported their skills...
In addition, one chief financial officer (CFO) mentioned to me that the sole cause of his municipality (in the North-West) achieving clean audit reports over the past five years was that they had experienced political stability in the municipality.
Bear in mind that smaller provinces struggle to attract and retain talented individuals, and the problem is exacerbated in smaller municipalities. Therefore it is not surprising that there is a dearth of accounting skills in municipalities that has resulted in many of the expected audit results.
Many municipalities still have disclaimed audit opinions which, the Auditor-General cannot even find enough to investigate to consider and audit financial reports, let alone form an opinion. Of the 283 municipalities in South Africa, only 10 received a clean audit report for 2007. In the North-West Province, approximately 16 of the 24 municipalities received disclaimed audit reports.
A number of initiatives have been driven through a variety of key stakeholders, including the involved departments, the Local Government Seta (LGSeta), the Development Bank of Southern Africa (DBSA) and the South African Local Government Association (SALGA) to try and address this problem. In fact, Sicelo Shiceka, the Minister of Cooperative Governance and Traditional Affairs launched his Operation Clean Audit just recently.
A lot of focus has gone into the skills and competencies of the senior staff within the municipalities, but the reality is that the problem goes much deeper.
At his launch, for example, the Minister spoke about rats in the municipalities. Now, he was not referring to fraudulent human beings but rather to the furry animals.
Given that approximately 80% of all audit problems, especially those relating to disclaimed audit reports, relate to a lack of paperwork and audit trail documents – it is not surprising that he believes rats are invading the municipalities.
The cause of this critical problem is the lack of skills of the support and entry level staff within the finance departments. Poor financial control procedures and time allocated to addressing audit queries detracts severely from service delivery.
However, do not for a second believe that the municipalities are unaware of the problems they face and that government is standing idle.
It was at the initiative of the Gauteng Department of Local Government and Housing (GDLGH) that SAICA deployed retired Chartered Accountants [CAs(SA)] to work in the municipalities. It was then from the feedback of these deployees that the Local Government Accounting Certificate (LGAC) was created.
This certificate is a customised and competence-based entry level qualification (NQF Level 3) that is designed to improve the skills and capacity of municipal employees. This qualification, as well as the next level – the Local Government Advanced Accounting Certificate (LGAAC) – is being rolled out nationally to over 3 000 municipal staff members with the support of LGSeta, DBSA, GDLGH and other supporting funders.
The LGAC includes units on technical accounting skills, computer skills, accounting work skills, which include workplace readiness and an introduction to the governing legislation as well as a unit on ethics.
This qualification leads to professional body membership so, an understanding of and compliance with a code of professional conduct is essential. The qualification is well into its delivery with 600 employees in Gauteng. CFOs and municipal managers have reported that the qualification has dramatically changed the attitudes of the learners.
They have a greater understanding of both their work and the full cash flow cycle. As a result, they are more willing to take greater levels of responsibility, more amenable to change, questioning the application of their work and, most importantly, more confident.
Given that the pilot programme showed frightening levels of literacy and numeracy as well as work competence and confidence, these reports are most encouraging. When the programme was piloted, it was noted that none of the employees (all employed in a financial function) had calculators – they all used their cell phones.
Many also demonstrated difficulty with basic mathematical functions such as the calculations of percentages and decimal points. If one considers the kind of calculations required in their work (VAT rates and rebate calculations), these findings were frightening! The programme now also includes an extensive literacy and numeracy component.
A new professional body, AAT(SA), has been established to support and professionalise the category of accounting employees who serve both the public and private sector as technicians.
In this case, it was the public sector that was driving the development of solutions for both the public and the private sector. This “professionalisation” will allow for the employees, both private and public sector, to see themselves in a different light, take pride in the work they do and subscribe to an all important code of professional conduct.
Essentially, the process of developing skills and enhancing capacity is a long anddifficult one but it cannot be said that national government, especially local government, is not proactively trying to overcome the barriers to service delivery.
Natalie Zimmelman is Business Development Manager of the Association of Accounting Technicians in South Africa [AAT(SA)].
