DANNHAUSER MUNICIPALITY
PERFORMANCE MANAGEMENT SYSTEM REVIEW
A POLICY and FRAMEWORK GUIDE
2017/2018
This document outlines the details of the performance management policy and framework for the Dannhauser Local Municipality. Processes to be followed in developing and implementing performance management together with the detailed key performance indicators, the corresponding targets and timelines, monitoring, measurement, review, reporting and improvement frameworks are covered.
TABLE OF CONTENTS
LIST OF ACRONYMS 4
CHAPTER 1: OVERVIEW OF DANNHAUSER MUNICIPALITY 5
1.1 Background 5
1.2 Vision, Mission Statement, Core Values and Strategic Objectives 6
1.3 Status Quo of Performance Management 8
CHAPTER 2: LEGISLATIVE FRAMEWORK FOR PERFORMANCE MANAGEMENT 9
2.1 Legislations and Policies on Municipal Performance Management 9
2.2 Performance Management in the Municipal Systems Act 13
2.3 Performance Management in the White Paper on Local Government 14
2.4 Performance Management in the Municipal Finance Management Act 16
2.5 Organisational Performance Management Process 16
2.6 Performance Reporting 21
2.7 Performance Auditing 21
CHAPTER 3: OVERVIEW OF PERFORMANCE
MANAGEMENT 23
3.1 Defining Performance Management 23
3.2 Why Performance Management? 24
3.3 Objectives of Dannhauser Municipality Performance Management System 25
3.4 Principles of Dannhauser Municipality Performance Management System 25
3.5 Benefits of organisational and individual Performance Management 26
3.6 Critical Success Factors of the Performance Management System 27
Chapter 4: PREFERRED PERFORMANCE MANAGEMENT MODEL 28
4.1 Defining Performance Management Model 28
4.2 Logic Model 28
4.3 Criteria For Good Indicators 29
CHAPTER 5: PERFORMANCE MANAGEMENT SYSTEM FRAMEWORK 31
5.1 Process of Managing Performance 31
5.2 Roles/Responsibilities of Key Roleplayers in Performance Management 36
CHAPTER 6: ORGANISATIONAL AND INDIVIDUAL PERFORMANCE MANAGEMENT SYSTEM 41
6.1 Key Steps in Organisational and individual Performance Management 41
6.2 Organisational Scorecard 42
6.3 Service Delivery and Budget Implementation Plan 42
6.4 Assessment of the Service Delivery and Budget Implementation Plan (SDBIP) 44
6.5 Why Individual Performance Management System 45
6.6 Development of Performance Agreements 45
6.7 Process of Managing Individual Performance 46
6.8 Management of Performance Evaluation Outcomes 50
6.9 Dealing with Poor Performance (Appeal Procedure / Dispute Resolution) 52
CHAPTER 7: PERFORMANCE MANAGEMENT, MONITORING, EVALUATION AND REPORTING STANDARD OPERATING PROCEDURE 53
CHAPTER 8: AUDITING OF PERFORMANCE MEASURES 54
8.1 Role of Internal Audit in Terms of Performance Management 54
8.2 Role of Audit Committee in Terms of Performance Management 54
8.3 Performance Investigations 55
8.4 municipal public accounts committee 56
CHAPTER 9: EVALUATION AND IMPROVEMENT OF THE PERFORMANCE MANAGEMENT SYSTEM 57
CHAPTER 10: CONCLUSION 58
LIST OF REFERENCES 59
List of Annexures 60
Annexure A: Audit and Performance Management Committee Charter 60
Annexure B: Departmental Performance Plans 60
Annexure C: Performance Management, Monitoring, Evaluation, Reporting Standard Operating Procedure 60
Annexure D: Municipal Public Accounts Committee Terms of Reference 60
LIST OF ACRONYMS
AG / Auditor GeneralAR / Annual Report
AO / Accounting Officer
CoGTA / Co-operative Governance and Traditional Affairs
CCR / Core Competency Requirements
EPAS / Employee Performance Appraisal System
IA / Internal Auditor
IDP / Integrated Development Plan
FMPPI / Framework for Managing Programme Performance Information
KPA / Key Performance Area
KPI / Key Performance Indicator
MFMA / Municipal Finance Management Act (No. 56 of 2003)
MPAC / Municipal Public Accounts Committee
MPPR / Municipal Planning and Performance Management Regulations (2001)
MSA / Municipal Systems Act (No. 32 of 2000)
MPAC / Municipal Public Accounts Committee
NKPI / National Key Performance Indicator
PA / Performance Agreement
PMS / Performance Management System
PoE / Portfolio of Evidence
SDBIP / Service Delivery and Budget Implementation Plan
SOP / Standard Operating Procedure
CHAPTER 1: OVERVIEW OF DANNHAUSER MUNICIPALITY
1.1 Background
Dannhauser is named after an old farming family that lived in the area. Dannhauser is one of three local municipalities within the Amajuba District Municipality and covers an area of approximately 1516 square kilometres. It is the smallest municipality within the District Municipality. Main towns are Dannhauser, Hattingspruit, Inverness, Kilegethe, Klipbank, Milford, Normandien, Nyanyadu, Rutland, Tendeka, Witteklip.
The town of Dannhauser is located midway between Durban and Johannesburg on the main railway line, about eight kilometres off the national road between the two cities. Some of the largest coal-producing mines in KwaZulu-Natal surround it. Numerous rivers flow through the municipal area, the most important being the Ngagane and uMzinyathi Rivers and there are scenic landscapes in the western portion of the municipality.
The population of the municipality is currently at 105 341 (Census 2016). Population densities are highest in the Traditional Authority Areas in the north-eastern portion of the municipal area and in the town of Dannhauser itself.
Dannhauser functions as a small rural service centre (providing commercial and service facilities and agricultural industries and services), and is not a large employment generator. Residents of the municipal area rely on the larger urban centres of Dundee and Newcastle for employment opportunities and higher order goods and services, and mining sector also provides employment, which is another contributing factor in terms of the economic and to the district growth as well.
The municipality is formerly a mine town and also depending on Agriculture as a key sector, and the closure of mines increase the rates of unemployment and poverty.
· Limited Revenue for funding development activities
· Lack of funding for operational and maintenance.
· Capacity Challenge, there is high turnover staff particularly finance department.
· Land issue not resolve due to that it minimise opportunity for development and further do not allow the municipality to grow and align it with the surrounding municipalities.
· The other challenge which is delaying the development is the revenue, currently the municipality is highly depending on grants from National and Provincial Government, however there is income which the municipality generates from the Rates, Refuse Collection, Traffic Fines, and Licencing, and other services.
· Private Sector contribution to development is a challenge which minimise the constant growth in development and sustainability to the existing infrastructure.
1.2 Vision, Mission Statement, Core Values and Strategic Objectives
The Dannhauser Municipality vision, mission and strategic objectives are as follows:
Vision: To achieve the successful implementation of radical economic transformation through a financially viable municipality that delivers, integrated quality basic services, infrastructure development and socio-economic development and growth for the community and external stakeholders by 2030.
Mission Statement: Dannhauser municipality will utilize its resources to achieve a sustainable and growing socio-economic environment through the development of agrarian reform, mining, industrial, retail and informal sectors thus creating job opportunities for the community. This will be enhanced and supported by the transformation of its staff through empowering skills development and training initiatives.
Core Values: Dannhauser municipality core values (CRAFT) are as follows:
Ø Commitment: Our Councillors and employees pledge to the serve the community & stakeholders with honesty, dedication and transparecy putting their need first.
Ø Responsibility: Our Councillors and Management assume responsibility of municipal owned infrastructure, delivery of basic services to the communities, social & economic development and growth and are willing to take corrective measures to keep the municipality in a strategic path.
Ø Accountability: Our Councillors and management will uphold their decisions and actions based good governance principles to the community and all stakeholders.
Ø Fairness: Our Councillors and Management will give fair consideration to the interests of the community and stakeholders.
Ø Transparency: To ensure that the disclosure of Information is undertaken in a manner that enables the community and stakeholders to be well informed.
Strategic Objectives:Ø To keep the municipal workforce well informed
Ø To transform the Dannhauser into a performance driven municipality
Ø To provide skills development programmes for staff, councillors
Ø To ensure that employment equity targets are met
Ø To implement a refined organisational structure
Ø To ensure effective record management System
Ø To facilitate the construction of new offices
Ø To facilitate the provision of housing in line with the national and provincial norms and standards
Ø To provide public amenities
Ø To ensure safe rural road infrastructure networks
Ø To ensure safe urban road infrastructure networks
Ø To ensure safe environment through installation of mast lights / street lights
Ø To provide educational and recreational services to the community
Ø To direct law enforcement, to improve safety and security
Ø To create a climate conducive for sustainable economic growth and job creation
Ø To eradicate poverty and improve socio economic condition
Ø To create an investment profile that will draw and retain investors
Ø To review and implement the tourism strategy
Ø To develop a comprehensive strategy to empower SMME’s and co-operatives
Ø To review and monitor social and labour plans of mining stakeholders ensuring they are aligned to development initiatives of the municipality
Ø To ensure progressive compliance with institutional and governance requirements
Ø To ensure that IGR structures function effectively within the district
Ø To provide reasonable assurance on the adequacy and effectiveness of internal control systems
Ø To ensure compliance with the development, implementation of the waste management plan
Ø To ensure compliance with the development and implementation of the disaster management plan
Ø To ensure that council and its committees are functioning effectively
Ø To promote youth development within the municipality
Ø To implement (social cohesion) through special programs that empower all individuals within the municipal jurisdiction, regarding arts and culture; sports & recreation; HIV & AIDS, disability, gender, women and children)
Ø To improve the image of the municipality
Ø To ensure that the animal pound by-law is developed, and enforced within the municipal jurisdiction
Ø To ensure functional audit committee
Ø To implement and maintain effective enterprise-wide risk management system
Ø To ensure that the Spatial Development Framework (SDF) is prepared and aligned with LUMS
Ø To regularly provide effective services to the community in order to create clean and safe environment
Ø To ensure functional disaster management
Ø To provide services to the community in developing a cemetery plan and maintaining cemeteries in the urban and rural areas
Ø To regularly provide effective services to the community in order to create clean and safe environment
Ø To effectively manage financial conditional grants
Ø To improve expenditure control
Ø To improve the procurement system
Ø To invest in the development of the municipality through revenue enhancement
Ø Improve on revenue collection/base
Ø Optimizing of debt collection
1.3 Status Quo of Performance Management
Dannhauser Municipality has in place a Performance Management System (PMS) Policy and Framework which is in line with applicable local government performance management legislations. The Municipality annually reviews PMS Policy and Framework. In the financial year under review, the need to review the PMS Framework arose as the Municipality intends to cascade performance management to employees below directorate level (employees below Section 56 Managers) and in order to respond to Chapter 6 Section 38(a) of the MSA.
The system will be implemented for the review of performance of:
a) The Integrated Development Plan
b) Performance of individuals, namely:
i. Municipal Manager
ii. Directors reporting to the Municipal Manager
iii. All Sectional Heads
iv. Departmental, team and individual level evaluations
d) It will also be applied in:
i. Strategic planning of the municipality
ii. Skills development, internal and external.
CHAPTER 2: LEGISLATIVE FRAMEWORK FOR PERFORMANCE MANAGEMENT
2.1 Legislations and Policies on Municipal Performance Management
The framework for Performance Management is informed by the following policies and legislations on performance management:
a. The Constitution of the Republic of South Africa, 1996
b. The Local Government: Municipal Systems Act, 2000 (Act No 32 of 2000)
c. Local Government: Municipal Systems Amendment Act, 2011 (Act No 7 of 2011)
d. The Local Government: Municipal Planning and Performance Management Regulations, R.796 of 24 August 2001
e. The Local Government: Municipal Finance Management Act, 2003 (Act No 56 of 2003)
f. The White Paper on Transforming Public Service Delivery of 1995 (Batho Pele)
g. The White Paper on Local Government (1998)
h. The Municipal Budget and Reporting Regulations, R.32141 of 17 April 2009
i. Regulations for Municipal Managers and Managers reporting directly to Municipal Managers, 1 August 2006
j. The Local Government: Municipal Structures Act, 1998 (Act 117 of 1998)
k. National Treasury Framework for Managing Programme Performance Information (FMPPI). In 2007 National Treasury issued the Framework for Managing Programme Performance Information (FMPPI). The document outlines key concepts in the design and implementation of the performance management system and it defines how to collect, report and utilize performance information in local government.
Detailed information on each of the above legislations is outlined below.
The objectives of the Constitution of 1996 are to:
· Provide democratic and accountable government for local communities.
· Ensure the provision of services to communities in a sustainable manner.
· Promote social and economic development.
· Promote a safe and healthy living environment.
· Encourage the involvement of communities and community organisations in the matters of local government.
Chapter 6 section 38(a) of the Municipal Systems Act, 2000, requires a municipality to establish a performance management system (PMS) that is:
§ Commensurate with its resources;
§ Best suited to its circumstances; and
§ In line with the priorities, indicators and targets contained in its integrated development plan (IDP)
The Municipality is also required by the Act to:
§ Promote a culture of performance management among its political structures, political office bearers and councillors and in its administration; and
§ Administer its affairs in an economical, effective, efficient and accountable manner.
The Municipal Planning and Performance Management Regulations, 2001, further instruct a Municipality to ensure that its performance management system (PMS):
§ Complies with the requirements of the Act;
§ Demonstrates how the system will operate and be managed from the planning stage up to the stages of performance and reporting;