CAPACITY DEVELOPMENT STRATEGY FOR PUBLIC FINANCIAL MANAGEMENT: PSETA Skills Colloquium. ACHIEVING EXCELLENCE IN THE MANAGEMENT OF PUBLIC FUNDS Presenters: James Motha ! Director ETD , Capacity Building ! 27 March 2015
CONTENT • Development Process • Research • Mandate • Scope • Capacity Development Strategy • Progress • Way Forward 2
DEVELOPMENT PROCESS • Research • Team of experts • Reference Group • Extensive consultation
RESEARCH • Vacancies, movement and turnover • Capacity development • Stakeholders (stakeholder analysis) • Legislative analysis • Education, training and development (ETD) supply 4
PROBLEM INDICATORS • Poor financial management performance (AG results) • Low levels of financial management maturity (FMCMM results) • Vacancy rate of 34% (private sector rate is 3.7%) • Staff turnover rate of 13 months • Attraction and retention remains a challenge • Inconsistent job descriptions, grading and requirements • Organisational structures vary per province and/or department • Uncoordinated capacity development interventions • ETD solutions are not aligned to public sector needs • Limited professionalisation • Limited career-pathing and career progression • Limited pool of talent (national shortage of scarce skills)
MANDATE • Constitution: S216 – National legislation must establish a national treasury and prescribe measures to ensure both transparency and expenditure control in each sphere of government, by introducing- (a) generally recognised accounting practice; (b) uniform expenditure classifications; and (c) uniform treasury norms and standards. 6
MANDATE – NATIONAL TREASURY • Public Finance Management Act (PFMA): – ‘must prescribe uniform treasury norms and standards’ [Section 6 (2) (a)] – ‘must enforce this Act and any prescribed norms and standards’ [Section 6 (2) (b)] – ‘may assist departments and constitutional institutions in building their capacity for efficient, effective and transparent financial management’ [Section 6 (2) (d)] – ‘may do anything further that is necessary to fulfil its responsibilities effectively’ [Section 6 (2) (g)] 7
MANDATE - LOCAL GOVERNMENT • “The national government and provincial governments, by legislative and other measures, must support and strengthen the capacity of municipalities to manage their own affairs, to exercise their powers and to perform their functions” [Constitution Ch 13 (154)(1)] • “Each provincial government must establish municipalities ... and promote the development of local government capacity to enable municipalities to perform their functions and manage their own affairs” [Constitution Ch 13 (155)(6&6b)] 8
MANDATE – CONTINUED • National Treasury mandate as per the MFMA: – The national and provincial governments must by agreement assist municipalities in building the capacity of municipalities for efficient, effective and transparent financial management (S34 (1)) – The accounting officer, senior managers, the chief financial officer and other financial officials of a municipality must meet the prescribed financial management competency levels (S83 (1)) – The accounting officer, senior managers, any chief financial officer and all other financial officials of a municipal entity must meet the prescribed financial management competency levels (S107 (1)) – The accounting officer and all other officials of a municipality or municipal entity involved in the implementation of the supply chain management policy of the municipality or municipal entity must meet the prescribed competency levels (S119 (1)) 9
SCOPE • Current Scope: – Local, Provincial and National Government – Functions within the Office of the CFO – Internal Audit – Risk Management • Extended Scope: – Financial Management (core transversal competency) – Governance – Public Entities 10 10
PROCESS • Research: – Diagnosis (current state of PFM) – Capacity development good practice • Reference Group • Develop Conceptual Framework • Consultation on Conceptual Framework: – Provincial Accountant-Generals – Chief Financial Officers – Public Sector Expert Practitioner Committees – Forum (CAE, CRO and HRM&D) – Key Stakeholders (NT, PALAMA, DPSA) 11 11
PROCESS - CONTINUED • Draft Capacity Development Strategy (CDS) – Research Summary – Problem Statements – Strategic Objectives – Key Performance Indicators – Key Activities (prioritisation) • Consultation on Draft CDS: – Provincial Accountant-Generals – Chief Financial Officers – Public Sector Expert Practitioner Committees – Forum (CAE, CRO and HRM&D) – Key Stakeholders (NT, PALAMA, DPSA) • Process Revisions 12 12
PROCESS - WAY FORWARD • Final CDS • FOSAD endorsement • Cabinet endorsement • Consult with External Stakeholders (PBs, HEIs, SPs) • Source Funding: – Bridging from multiple donors (2011/12) – Stand alone (2012-17) – General budget support (2013-2018) 13 13
TIMELINE Jan – May 2012 5 months July – Sept 2011 Local Govt. 3 months Inclusion Jan – June 2011 Final Consultation 6 months Draft Strategy & July – Dec 2010 Consultation 6 months Conceptualisation & Consultation Jan – June 2010 6 months Research 14 14
KEY CONSIDERATIONS • Risk – rejection due to political factors – LG solution will require extensive consultation & buy in – Elections & new Government led intervention • Role Players: – DPSA and PALAMA – COGTA and SALGA • Governance Arrangements: – Accounting Officer, MEC, SCOPA and Parliament – Municipal Manager, Municipal Council, Premier, PT, NT and Oversight • Legislation: – PFMA, Treasury Regulations – MFMA, Municipal Systems & Structures Act • Centralised IT Systems (BAS & Persal) 15 15
CAPACITY DEVELOPMENT STRATEGY
PRINCIPLES • Practical • Developmental • Sustainable • Flexible • Engaging • Holistic • Addressing government priorities 17 17
STRATEGIC OBJECTIVES • To support the development of an enabling environment • To enhance organisational capacity • To develop and empower a corps of competent and committed employees • To create an environment that enables and sustains mutually beneficial stakeholder relationships
INTEGRATED CAPACITY DEVELOPMENT FRAMEWORK 19 19
STRATEGY DESIGN 20 20
PROBLEM STATEMENTS 21 21
STRATEGIC OBJECTIVES 22 22
THE LINK – SO’s & PS’s 23 23
CAPACITY DEVELOPMENT APPROACH • Short, medium and long-term solutions • A phased approach to developing capacity (FMCMM) • Integration with existing and new systems, structures and practices • Versatile approach to the provision of ETD solutions
VERSATILE APPROACH TO ETD 25 25
LEVERS FOR CHANGE
INTEGRATED CAPACITY DEVELOPMENT FRAMEWORK 27 27
STRATEGY DESIGN 28 28
29 29
STRATEGIC LEVERS • Champions of Change • Management and Leadership Capability • Team/Group Level Transformation • Fast track Professionalisation of Senior Management • Diagnosis as a Powerful Mechanism • Knowledge and Information Management
STRATEGY DESIGN 31 31
KEY ACTIVITIES – SO1 Support the development of an enabling environment • KA 1.1 Support departments through the provision of PFM related policy, norms, standards, frameworks & guidelines • KA 1.2 Support departments through the provision of organisational & HRM related policy, norms, standards, frameworks & guidelines • KA 1.3 Create, support & maintain Knowledge & Information Sharing platforms, mechanisms & systems • KA 1.4 Professionalise FM, IA & ERM • KA 1.5 Establish & maintain relevant governance structures • KA 1.6 Standardise & regulate job profiles • KA 1.7 Develop & implement a Competency Framework
KEY ACTIVITIES – SO1 (cont.) Support the development of an enabling environment • KA 1.8 Develop & implement an Integrated Learning Matrix • KA 1.9 Develop occupational qualifications • KA 1.10 Coordinate, influence & develop formal ETD programs 33 33
KEY ACTIVITIES – SO2 Develop and enhance organisational capacity • KA 2.1 Evaluate and refine PFM Systems • KA 2.2 Identify & implement good practices • KA 2.3 Provide support on Organisational Design • NT to provide integrated & coordinated support to dept’s KA 2.4 • PTs to provide integrated & coordinated support to dept’s KA 2.5 • KA 2.6 Provide workplace-based technical advisory support • KA 2.7 Institutionalise HR Connect • KA 2.8 Institutionalise the FMCMM • KA 2.9 Support the institutionalisation of a learning culture • KA 2.10 Support the implementation of the PMDS
KEY ACTIVITIES – SO2 (cont.) Develop and enhance organisational capacity • KA 2.11 Develop a Transformational Change Leadership & Management programme • KA 2.12 Develop mechanisms to match people to posts, placing and/or re-skilling 35 35
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