Minimum Competency Regulations

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Minimum Competency Regulations
MUNICIPAL FINANCE MANAGEMENT ACT
No. 56 of 2003
TV Pillay MFMA Unit
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Background

• The White paper on Local Government - Systematic
  programme to develop high level management and
  front-line worker capacities in local government
• The Constitution - Section 154(1) - by
  legislative and other measures must strengthen
  municipal capacity
• Municipal Finance Management Act meet the
  objectives and assist implementation
• Improving capacity and skills of officials
  (enhancing current and build new skills)
• Address financial management challenges
• Reinforce sustainable practices
• Leading to improved delivery of services

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Research278 Senior municipal managers - levels
of qualifications
Qualification EC FS GT KZN LM MP NC NW WC National National
No Data 0 2 0 1 0   1     4 1.4
Pre-Matric 0 0 1 0 0         1 0.4
Matric only 0 4 2 1 4 2   2   15 5.4
Matric and Diplomas 8 11 13 7 27 6 7 4 2 85 30.6
Undergraduate degree 8 2 10 8 9 4 5 8 1 55 19.8
Undergraduate degree and Diplomas 2 6 4 1 6 6 7 0 3 35 12.6
Under and post graduate 7 5 14 3 9 5 7 10 6 66 23.7
Under/Post graduate and Diplomas 4 1 0 4 5 1 1 1 0 17 6.1
Total 29 31 44 25 60 24 28 25 12 278 100
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Research278 Senior municipal managers - levels
of qualifications by sector/type
Qualification EC FS GT KZN LM MP NC NW WC National National
No Data 0 2 0 1 0 0 1 0 0 4 1.4
Teaching 2 11 5 1 5 1 11 0 1 39 14.0
Finance 7 1 5 1 8 0 3 2 0 27 9.7
Legal 4 2 8 4 4 2 2 10 2 38 13.7
Public Admin. 10 6 13 12 34 11 5 8 4 103 37.1
Other 6 9 13 6 9 8 6 5 5 67 24.1
Total 29 31 44 25 60 22 28 25 12 278 100
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Background

• MFMA sections
• S 83, 107 - Municipalities/ Entities accounting
  officer, senior managers, CFO and other financial
  officials must meet financial management
  competency levels
• S 119 - Supply Chain Management accounting
  officer and all other officials of a municipality
  or municipal entity involved in the
  implementation of the SCM policy must meet the
  prescribed competency levels

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Regulations

• Who do the regulations apply to?
• Accounting Officer / Municipal Manager
• Chief Financial Officers
• All other Senior Managers (directly accountable
  to AO)
• Financial Officials at middle management level
• Supply Chain Management - Heads of SCM and
  Senior Managers directly accountable to the AO/MM
• Differentiation by category (capacity budget)
• Applies to municipalities entities

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Regulations

• Differentiation / Categories
• Municipal capacity (High, Medium Low)
• Functions performed
• Budget size
• lt R500 million 250 municipalities
• gt R500 million 33 municipalities
• Must include the budget of municipal entities

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Regulations

• Extensive consultation - dplg, SALGA, provincial
  departments, DPSA, municipalities
• 6 regional workshops (all provinces) March and
  April
• All municipalities invited
• Total number of 558 participants
• 470 municipal officials
• 71 SALGA / dplg / Prov LG / Prov Treasuries
• 17 educational institutions
• Complements other government efforts
• Consistent with the principles of the Municipal
  Systems Act, including the Municipal Performance
  Regulations

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Regulations

• Supports implementation
• Municipal Manager responsible for MFMA
• Assists in establishment of Budget and Treasury
  Office
• Strengthen skills of top management team
• SCM Unit - greater integration
• Support employment of qualified personnel
• Improve recruitment processes and adverts for MM,
  CFO, senior managers and SCM managers

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Transitional Provisions

• All municipalities and entities to commence
  assessment of officials to identify competency
  gaps
• Enrol for SAQA recognised qualifications,
  registered service providers only (test based)
• Attainment of competencies to be included in
  performance agreements
• NQF 4 matric
• NQF 5 diploma
• NQF 6 degree
• NQF 7 honours postgraduate

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Prescribed Unit Standards
NQF Level 5 NQF Level L6 Title
  116339 Apply risk management in municipalities
  116341 Conduct performance management to a municipal environment
  116342 Apply approaches to managing municipal income and expenditure within a multi-year framework
  116343 Apply the principles of ethics in a municipal environment
116345   Apply the principles of budgeting within a municipality
  116348 Conduct stakeholder consultation around municipal finance programmes
116351   Conduct audits, planning and implementation in a municipality
  116353 Participate in the design and implementation of municipal SCM
  116358 Contribute to the strategic planning process in a municipality
  116361 Interpret legislation and policy affecting municipal financial management
  116362 Manage a municipality's assets and liabilities
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Prescribed Unit Standards (cont)
NQF Level 5 NQF Level L6 Title
  116363 Prepare and analyse municipal financial reports
  116364 Plan a municipal budgeting and reporting cycle
119331 Conduct working capital management activities in accordance with sound financial management policy
119334 Discuss the selected legislative regulatory framework governing the public sector management and administration environment
119341   Apply cost management information systems in the preparation of management reports
119343  Apply operations research principles and tools in the management of project activities and resources
119348   Apply selected GRAP to periodic accounting reporting process
119350 Apply accounting principles and procedures in the preparation of reports and decision making
119351  Apply principles of computerised systems to manage data and reports relevant to the public sector administration
119352 Apply principles of information systems to public finance and administration
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Recognition of Prior Learning

• Is the process of recognising and assigning
  credit values to the learning that a person has
  undertaken on an informal basis, for example, in
  the form of work experience or the attendance of
  short courses
• Identify what the official knows and can do
• Match the officials skills, knowledge and
  experience to specific unit standards and
  strategic priorities
• Assess the official against unit standards
• Credit official according to assessment
• These are activities carried out by an assessor
  (subject matter expert) accredited by SETA-ETQA

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Guidelines
Competency GUIDELINES Accounting Officer
Competency GUIDELINES Chief Financial Officer
Competency REGULATIONS MFMA
Competency GUIDELINES Senior Managers
Competency GUIDELINES Finance Officials Middle
Management
Competency GUIDELINES Head SCM SCM Senior
Managers
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Chief Financial Officer
MUNICIPAL FINANCE MANAGEMENT ACT
No. 56 of 2003
Municipal Regulations on Minimum Competency levels
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Chief Financial Officer

• Higher education qualification

Qualification Municipal capacity and budget
At least NQF level 6, or Certificate in Municipal Financial Management (SAQA No. 48965) All Low capacity municipalities Medium capacity municipalities with annual budgets of a value below R500 million for the current year Municipal entities with annual budgets of a value below R500 million for the current year.
At least NQF level 7, or Chartered Accountant (SA) All High capacity municipalities Medium capacity municipalities with annual budgets of a value equal to or above R500 million for the current year Municipal entities with annual budgets of a value equal to or above R500 million for the current year.
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Definitions

• Calculation of the value of the annual budget
  includes
• Total operating and capital expenditure
• In the case of a parent municipality, the
  aggregated value of the annual budget of the
  municipality its municipal entity(s)

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Chief Financial Officer

• Work related experience

Work-Related Experience Municipal capacity and budget
5 years at middle management level All Low capacity municipalities Medium capacity municipalities with annual budgets of a value below R500 million for the current year Municipal entities with annual budgets of a value below R500 million for the current year.
7 years at senior middle management level (2 of the 7 years must be at senior management level) All High capacity municipalities Medium capacity municipalities with annual budgets of a value equal to or above R500 million for the current year Municipal entities with annual budgets of a value equal to or above R500 million for the current year.
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Chief Financial Officer

• Competency areas Unit Standards
• Strategic leadership and management - 2
• Strategic financial management - 3
• Operational financial management - 6
• Governance, ethics values in financial
  management-1
• Financial and performance reporting - 4
• Risk and change management - 1
• Project management - 1
• Legislation, policy and implementation -1
• Stakeholder relations - 1
• Supply Chain Management - 1
• Audit and Assurance - 1

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Chief Financial Officer

• Example - Unit Standards
• Strategic financial management
• CFO required to be competent in unit standard
  116342
• Apply approaches to managing municipal income
  and expenditure in a multi-year framework

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Chief Financial Officer

• Unit Standards include
• Specific outcomes and assessment criteria e.g.
• Develop approaches to managing a municipality's
  revenue in a sustainable manner
• Apply the different approaches to forecasting
  municipal income and expenditure over the medium
  term
• Contribute to the design of rates, tariffs and
  user charges

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Chief Financial Officer

• Supporting Guideline
• Guideline for Municipal Competency levels
  Chief Financial Officers
• Contains table of 11 competency areas (pages 6
  18)
• Each competency area in table linked to
• specific competencies required
• detail of knowledge skills required

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Chief Financial Officer

• Guidelines example
• Strategic Financial Management (competency area
  2) page 7
• The ability to guide the management of an
  effective, economic and efficient finance
  function, supported by effective financial
  management policies and practices.

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Chief Financial Officer

• Strategic Financial management (cont)
• Examples of knowledge skills required
• Formulating and implementing finance strategies,
  which enhance good financial management and
  decision making practices across the finance
  function
• Developing and implementing financial policies
  and systems to ensure efficient and effective
  financial administration
• Developing, implementing and maintaining
  financial management guidelines, financial
  instructions, credit control procedures, debt
  collection and related financial policies

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Consultation

• Consider similar competency regs for other
  sectors
• Apply higher levels for SCM officials
• Support training initiatives from SETA and SAMDI
• Further resources may be required for roll out
• Explore possibility for further exemptions

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Monitoring and Support
MUNICIPAL FINANCE MANAGEMENT ACT
No. 56 of 2003
Municipal Regulations on Minimum Competency levels
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Monitoring Reporting

• Municipal Manager/ Chief Executive Officer
  responsible to monitor ensure compliance
• Report twice yearly on compliance, as at 30 June
  31 December (using supporting schedule)
• Submit copy to National and Provincial government
  within one month
• Municipalities to include consolidated
  information on all entities
• Disclosure - copy of 30 June report to be
  included in the municipal Annual Report

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Monitoring Reporting

• Report to show the number of financial SCM
  officials
• employed
• that have undergone assessment
• whos performance agreements include competency
  attainment
• that meet the competency levels

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Commencement

• Effective date 1 July 2007
• Fully operational 1 January 2013
• Phase-in
• 5 ½ years implementation

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Guiding Implementation Steps for MM

1. Establish steering committee, reporting to the
   Municipal Manager
2. Staff competency assessment to identify gaps
   (assessor to be LGSETA accredited)
3. Prepare training strategy and budget up to
   1/1/2013
4. Staff to undertake SAQA recognised training to
   address identified gaps
5. Performance agreements must incorporate
   attainment of competencies
6. Recruitment procedures to include new competency
   requirements

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National Treasury Support

• Ongoing guidance and support towards effective
  implementation
• Issuance of Circulars
• Review training provider material
• Engagement with service providers
• (WBS, Afrec, TuT) other universities
• MFMA Internship programme
• MFMA Foundation Interactive DVD Learning
• Workshops, seminars, events
• Finance Management Grant (partial support)

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Training Providers

• SAQA recognised qualifications
• Certificate in Municipal Financial Management
  (SAQA ID No. 48965)
• National Diploma Public Finance Management and
  Administration (SAQA ID No. 49554)
• NT validated training courses
• refer www.treasury.gov.za/mfma under Training
  Validation

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Thank You Website www.treasury.gov.za/mfmaEmail
mfma_at_treasury.gov.za
MUNICIPAL FINANCE MANAGEMENT ACT
No. 56 of 2003
Municipal Regulations on Minimum Competency levels