907 City of Tshwane Draft Performance Management Framework September 2014 1

908 DOCUMENT INFORMATION Core team NAME DESIGNATION DEPARTMENT A Dharumrajh Executive Director CITY STRATEGIES AND PERFORMANCE MANAGEMENT G Maboya Director CITY STRATEGIES AND PERFORMANCE MANAGEMENT M Myeza Executive Director OFFICE OF THE DEPUTY CITY MANAGER: STRATEGY DEVELOPMENT AND IMPLEMENTATION W Dlomo Executive Head OFFICE OF THE EXECUTIVE MAYOR J Mhlongo Chief Risk Officer GROUP AUDIT AND RISK C Ramulifho Executive Head OFFICE OF THE CITY MANAGER J Laubscher Deputy Director CORPORATE AND SHARED SERVICES V Ngcobo Director CORPORATE AND SHARED SERVICES D Otumile Chief Information Officer GROUP ICT Version Details and Document Change Control VERSION DATE APPROVAL STATUS PREPARED BY REVIEWED BY 1 DECEMBER 2013 FIRST DRAFT G MABOYA (DIRECTOR) A DHARUMRAJH (EXECUTIVE DIRECTOR) M MAGANLAL (STRATEGIC EXECUTIVE DIRECTOR) 2 26 FEBRUARY 2014 SECOND DRAFT DISCUSSION DOCUMENT G MABOYA (DIRECTOR) A DHARUMRAJH (EXECUTIVE DIRECTOR) M MAGANLAL (STRATEGIC EXECUTIVE DIRECTOR) L KWELE (DCM) 3 4 MAY 2014 THIRD DRAFT G MABOYA (DIRECTOR) A DHARUMRAJH (EXECUTIVE DIRECTOR) M MAGANLAL (STRATEGIC EXECUTIVE DIRECTOR) L KWELE (DCM) 2

909 VERSION DATE APPROVAL STATUS PREPARED BY REVIEWED BY 4 1 JUNE 2014 FOURTH DRAFT A DHARUMRAJH (EXECUTIVE DIRECTOR) 5 9 JUNE 2014 FIFTH DRAFT A DHARUMRAJH (EXECUTIVE DIRECTOR) G MABOYA (DIRECTOR) M MAGANLAL (STRATEGIC EXECUTIVE DIRECTOR) L KWELE (DCM) STRATEGY DEVELOPMENT AND IMPLEMENTATION CLUSTER 6 27 JUNE 2014 SIXTH DRAFT A DHARUMRAJH (EXECUTIVE DIRECTOR) G MABOYA (DIRECTOR) M MAGANLAL (STRATEGIC EXECUTIVE DIRECTOR) 7 SEPTEMBER 2014 SEVENTH DRAFT A DHARUMRAJH (EXECUTIVE DIRECTOR) L KWELE (DCM) Document Circulation CIRCULATED TO DATE All departments via presentation at TWG meeting 18 February 2014 All departments on C9 system 19 March 2014 All departments via presentation at TWG meeting 30 May 2014 All departments via email 2 June 2014 Technical governance cluster 6 October 2014 Mayoral governance cluster 8 October 2014 3 P a g e

910 TABLE OF CONTENTS GLOSSARY OF TERMS 7 ACRONYMS 10 PART A EXECUTIVE SUMMARY 13 1 INTRODUCTION 13 2 OVERVIEW OF THE STRUCTURE OF THE DOCUMENT 13 3 SUMMARY OF KEY ELEMENTS OF THE REVIEWED PERFORMANCE MANAGEMENT FRAMEWORK 14 2.1 PERFORMANCE PLANNING 15 2.2 PERFORMANCE MONITORING AND EVALUATION 15 3 FOUNDATIONAL INITIATIVES TOWARDS IMPLEMENTING THE PERFORMANCE MANAGEMENT FRAMEWORK 16 4 CONCLUSION 17 PART B INFLUENCERS AND DIAGNOSTIC ASSESSMENT OF PERFORMANCE MANAGEMENT IN TSHWANE 19 1 INTRODUCTION 19 2 KEY LEGISLATIVE AND POLICY IMPERATIVES 21 2.1 INTRODUCTION 21 2.2 DISCUSSION OF LEGISLATIVE AND POLICY INFLUENCERS 21 2.3 CONCLUSION 27 3 DIAGNOSTIC ASSESSMENT OF PERFORMANCE MANAGEMENT IN THE CITY OF TSHWANE 28 3.1 INTRODUCTION 28 3.2 ASSESSMENT OF CURRENT PERFORMANCE MANAGEMENT FRAMEWORKS AND POLICIES AND THE IMPLEMENTATION OF PERFORMANCE MANAGEMENT IN THE CITY OF TSHWANE 28 4 CONCLUSION 31 PART C: CONCEPTUAL FRAMEWORK FOR PERFORMANCE MANAGEMENT IN THE CITY OF TSHWANE 33 1. INTRODUCTION 33 2 OUTCOMES-BASED APPROACH TO PERFORMANCE MANAGEMENT 33 2.1 WHAT IS THE OUTCOMES BASED APPROACH 33 2.2 WHAT DOES OUTCOMES BASED PERFORMANCE MANAGEMENT MEAN FOR THE CITY OF TSHWANE 35 3. CONCLUSION 36 4 P a g e

911 PART D APPLICATION OF THE OUTCOMES BASED APPROACH TO PERFORMANCE MANAGEMENT IN TSHWANE 39 1. INTRODUCTION 39 2. PERFORMANCE PLANNING 39 2.1 INTRODUCTION 39 2.2 DEFINITION OF PERFORMANCE PLANNING IN THE CONTEXT OF OUTCOMES-BASED PERFORMANCE MANAGEMENT 40 2.3 ALIGNED PLANNING PROCESSES 41 2.5 ALIGNMENT OF PERFORMANCE INDICATORS WITHIN THE HIERARCHY OF PLANS 45 2.6 QUALITY OF PERFORMANCE INDICATORS 49 2.7. PLANNING CYCLE ALIGNMENT TO LEGISLATED TIMEFRAMES 50 2.8 ALIGNMENT OF ORGANIZATIONAL AND INDIVIDUAL PERFORMANCE PLANNING PROCESSES 51 2.9 RISK MANAGEMENT AND AUDIT IN PERFORMANCE PLANNING 58 2.10 INSTITUTIONAL ARRANGEMENTS FOR PERFORMANCE PLANNING 60 2.11 CONCLUSION 63 3. PERFORMANCE MONITORING AND EVALUATION 64 3.1 INTRODUCTION 64 3.2. DEFINING THE RELATIONSHIP BETWEEN MONITORING, AUDIT AND EVALUATION 64 3.3 HIERARCHY OF PERFORMANCE MONITORING PROCESSES 67 3.4 HIERARCHY OR REPORTS 67 3.5. QUALITY OF REPORTS 77 3.6. LEGISLATED TIMEFRAMES FOR REPORTING 78 3.7 REPORTING PROCESS FLOW 78 3.8 ALIGNMENT OF ORGANISATIONAL AND INDIVIDUAL PERFORMANCE MONITORING AND REPORTING PROCESSES 80 3.10 RISK AND AUDIT IN PERFORMANCE MONITORING PROCESSES 82 3.13 PERFORMANCE EVALUATION 87 4 CONCLUSION 93 PART E: FOUNDATIONAL INITIATIVES TOWARDS IMPLEMENTING THE PERFORMANCE MANAGEMENT FRAMEWORK 95 1 INTRODUCTION 95 2 FOUNDATIONAL INITIATIVES 95 2.1 CAPACITY OF THE MUNICIPALITY TO CONDUCT PERFORMANCE MANAGEMENT 97 2.2 ORGANISING THE MUNICIPALITY TO PERFORM AND DELIVER 98 3 CONCLUSION 100 APPENDIX A: INTERIM PROCEDURES RELATED TO REPORTING 101 BIBLIOGRAPHY 105 5 P a g e

912 ARTICLES, CIRCULARS, POLICIES 105 BOOKS AND BOOKLETS 105 LEGISLATION AND REGULATIONS 106 TABLE OF FIGURES FIGURE 1: OVERVIEW OF THE DOCUMENT 13 FIGURE 2: GENERIC PLANNING AND REPORTING CYCLE 14 FIGURE 3: INFLUENCERS OF PERFORMANCE MANAGEMENT 21 FIGURE 4: RESULTS-BASED MANAGEMENT PYRAMID (NATIONAL TREASURY, 2007) 34 FIGURE 5: KEY MILESTONES OF THE DECADES OF GAME CHANGING 40 FIGURE 6: RELATIONSHIP BETWEEN HIERARCHY OF PLANS IN THE CITY OF TSHWANE 43 FIGURE 7: ALIGNMENT OF CITY OF TSHWANE PLANS TO OUTCOMES-BASED MODEL (ADAPTED FROM NATIONAL TREASURY, 2007) 45 FIGURE 8: OUTCOMES-BASED APPROACH SHOWING RELATIONSHIP INDICATORS (NATIONAL TREASURY, 2007) 46 FIGURE 9: ALIGNMENT OF EMPLOYEES PLANS TO ORGANISATIONAL GOALS 58 FIGURE 10: RISK MANAGEMENT IN PERFORMANCE PLANNING 59 FIGURE 11: PERFORMANCE REPORTING PROCESS 79 FIGURE 12: ALIGNMENT OF ORGANISATIONAL AND INDIVIDUAL REPORTING PROCESSES 80 FIGURE 13: INTEGRATION OF AUDIT AND RISK IN THE REPORTING PROCESSES 83 FIGURE 14: INSTITUTIONAL ARRANGEMENTS FOR PERFORMANCE MONITORING 85 FIGURE 15: TYPES OF EVALUATION (DPME 2011, 8) 89 LIST OF TABLES TABLE 1: SUMMARY OF KEY ACTIONS... 16 TABLE 2 SUITE OF PLANS... 43 TABLE 3: EXAMPLE OF ALIGNMENT OF INDICATORS... 48 TABLE 4: AGSA AUDIT CRITERIA AND FMPPI CRITERIA FOR GOOD INDICATORS... 49 TABLE 5: LEGISLATIVE TIMELINES FOR PERFORMANCE PLANNING... 50 TABLE 6: LINKING ORGANISATIONAL PERFORMANCE PLANNING TO INDIVIDUAL PERFORMANCE PLANNING... 51 TABLE 7: RATING SCALE FOR RISKS (CITY OF TSHWANE ENTERPRISE RISK MANAGEMENT STRATEGY)... 58 TABLE 8: INSTITUTIONAL ARRANGEMENT FOR PERFORMANCE PLANNING... 61 TABLE 9: THE CHARACTERISTICS OF MONITORING AND EVALUATION (UNICEF 1991. WFP, MAY 2000)... 65 TABLE 10: DIFFERENTIATING BETWEEN MONITORING, EVALUATION AND AUDIT... 66 TABLE 11: TYPES OF REPORTS REQUIRED... 69 TABLE 12: AGSA REPORTING AND AUDIT CRITERIA... 77 TABLE 13: TYPES OF REPORTS AND LEGISLATED REPORTING TIMELINES WHERE APPLICABLE... 78 TABLE 14: DEFINITION OF INDICATORS (FMPPI 2007)... 87 TABLE 15: SUMMARY OF TYPES OF EVALUATION TO BE CONDUCTED IN TSHWANE (ADAPTED FROM: DPME 2011)... 90 TABLE 16: RATING AND SCORING SYSTEM FOR PERFORMANCE REVIEW... 93 TABLE 17: SUMMARY OF KEY FOUNDATIONAL INITIATIVES... 95 6 P a g e

913 GLOSSARY OF TERMS Term Definition Accounting officer (a) In relation to a municipality, means the municipal official referred to in section 60 of the Municipal Systems Act; or (b) In relation to a municipal entity, means the official of the entity referred to in section 93 and includes a person acting as the accounting officer. Annual report In relation to a municipality or a municipal entity, means an annual report as contemplated in section 121 of the Municipal Finance Management Act. Auditor-General Means the person appointed as the Auditor-General in terms of section 193 of the Constitution, and includes a person (a) acting as Auditor-General; (b) acting in terms of a delegation by the Auditor-General; or (c) designated by the Auditor-General to exercise a power or perform a duty of the Auditor-General. Basic municipal service Means a municipal service that is necessary to ensure an acceptable and reasonable quality of life and which, if not provided, would endanger public health or safety or the environment. Regulation 10 of the Municipal Planning and Performance Management Regulations 2001 indicates water, sanitation, electricity and solid waste removal. Backlogs A backlog can be defined as services/goods that have accumulated over time that are still undelivered/unattended/still not produced. Baseline The accurate and quantitative data at a stated point in time that mark the beginning of a trend. Councillor Means a member of a municipal council. Section 57 employee In terms of the Municipal Systems Act, a section 57 employees means a person employed by a municipality as a municipal manager or as a manager directly accountable to a municipal manager. Employer Means the municipality employing a person as a municipal manager or as manager directly accountable to a municipal manager and as represented by the mayor, executive mayor or municipal manager, as the case may be. Employment contract Means a contract as contemplated in section 57 of the Municipal Systems Act. External service provider Means an external mechanism referred to in section 76(b) of the Municipal Systems Act, which provides a municipal service for a municipality. Financial statements In relation to a municipality or municipal entity, means statements consisting of at least (a) a statement of financial position; (b) a statement of financial performance; (c) a cash-flow statement; (d) any other statements that may be prescribed; and (e) any notes to these statements. Financial year Means the financial year of municipalities that end on 30 June of each year. Input indicator Means an indicator that measures the costs, resources and time used to produce an output. Integrated development Means a plan envisaged in section 25 of the Municipal Systems Act. plan (IDP) Local community or In relation to a municipality, means that body or persons comprising community (a) the residents of the municipality; (b) the ratepayers of the municipality; and (c) any civic organisations and non-government, private sector or labour organisation or body that is involved in the local affairs of the municipality. Mayor In relation to 7 P a g e

914 Term Definition (a) a municipality with an executive mayor, means the councillor elected as the executive mayor of the municipality in terms of section 55 of the Municipal Structures Act; or (b) a municipality with an executive committee, means the councillor elected as the mayor of the municipality in terms of section 48 of the Act. Mid-year report Is a report that is developed in terms of the MFMA section 72, and is intended to inform council of the municipality s mid-year budget and performance assessment. Mid-term report Is a report that is developed half-way during Councils term, and will reflect among others the progress of the municipality on the IDP for that period. It is not a legislated report. Municipality When referred to as (a) an entity, means a municipality as described in section 2 of the Municipal Systems Act; and (b) a geographical area, means a municipal area determined in terms of the Local Government: Municipal Demarcation Act, 1998 (Act 27 of 1998). Municipal entity As defined in section 1 of Act 44 of 2003, means (a) a private company referred to in section 86B(1)(a) of the Municipal Systems Act; (b) a service utility; or (c) a multi-jurisdiction service utility. Municipal Finance Means the Local Government: Municipal Finance Management Act, 2003 and any Management Act regulations made under the Act. Municipal manager Means a person appointed in terms of section 82 of the Municipal Structures Act. Municipal Structures Act Means the Local Government: Municipal Structures Act, 1998 (Act 117 of 1998). Municipal Systems Act Means the Local Government: Municipal Systems Act, 2000 (Act 32 of 2000). Outcome indicator Means an indicator that measures the quality and/or impact of an output regarding a particular objective. Output indicator Means an indicator that measures the results of activities, processes and strategies of a programme of a municipality. Performance agreement Means an agreement as contemplated in section 57 of the Municipal Systems Act. Performance plan Means a part of the performance agreement that details the performance objectives and targets that must be met and the time frame within which these must be met. Service delivery and budget implementation plan Monitoring and evaluation Logic model Business Excellence Framework Means a detailed plan approved by the mayor of a municipality in terms of section 53(1)(c)(ii) of the Municipal Finance Management Act for implementing the municipality s delivery of municipal services and its annual budget, and which must indicate (a) projections for each month of (i) revenue to be collected by source; and (ii) operational and capital expenditure by vote; (b) service delivery targets and performance indicators for each quarter; and (c) any other matters that may be prescribed; and includes any revisions of such plan by the mayor in terms of section 54(1)(c) of the Municipal Finance Management Act. Monitoring is a process that entails collecting and analysing data on inputs, activities, outputs, outcomes and impacts as well as external factors, to support effective management. Evaluation is a process of assessing relevance, efficiency, effectiveness, impact and sustainability. For evaluating the effectiveness of programmes. Logic models are most often used in the evaluation stage of a programme, but can also be used during planning and implementation. The Business Excellence Framework (BEF) is an integrated leadership and management system that describes the elements essential to sustainable organisational excellence. 8 P a g e

915 Term Balanced scorecard Definition A strategic planning and management system that is used to align business activities to the vision and strategy of an organisation, using four perspectives (customer, business processes, finance, and learning and growth). 9 P a g e

916 ACRONYMS ABBREVIATION FULL NAME AC Audit Committee AG Auditor-General AGSA Auditor-General of South Africa AOPO audit of predetermined objectives APC Audit and Performance Committee APMS automated performance management system BEF Business Excellence Framework BSC Budget Steering Committee CAPEX capital expenditure CFO Chief Financial Officer CM City Manager COGTA Cooperative Governance and Traditional Affairs CoSO Committee of Sponsoring Organisations CSS Corporate and Shared Services CoT City of Tshwane CSPM City Strategies and Performance Management Dept. Department DCM Deputy City Manager DPLG Department of Provincial and Local Government ED Executive Director EEA Employment Equity Act EPM Enterprise Project Management ERM Enterprise Risk Management FMPPI Framework for Managing Programme Performance Information GICT Group Information and Communication Technology GiGo garbage in garbage out GDS Growth and Development Strategy GWM&E government-wide monitoring and evaluation HR human resource IA Internal Audit ICT Information and Communication Technology IDP Integrated Development Plan IT information technology IEPMS integrated electronic performance management system IRFA Intergovernmental Relations Framework Act IQMS integrated quality management system KPA key performance area KPI key performance indicator LGMPPR Local Government: Municipal and Performance Regulations LGMFMA Local Government: Municipal Finance Management Act LGMPRMM Local Government: Municipal Performance Regulations for Municipal Managers MSA Local Government: Municipal Systems Act 32 of 2000 LGSETA Local Government: Sector Education and Training Authority LRA Labour Relations Act Mayco Mayoral Committee 10 P a g e

917 ABBREVIATION MEC MFMA MMC MPAC MSA MSP MTREF M&E NDP NRF NQFA OPCA OPEX OPM PEST PFMA PMF PMO PMS POE PRF PR QPR RSA SASQAF SALG SAMM SDBIP SDA SDLA SED SMART Stats SA SWOT TLMA FULL NAME Member of the Executive Committee Municipal Finance Management Act Member of the Mayoral Committee Municipal Public Accounts Committee Municipal Systems Act managing successful programmes Medium-term Revenue and Expenditure Framework monitoring and evaluation National Development Plan National Revenue Fund National Qualifications Framework Act Operation Clean Audit operational expenditure Organisational Performance Management political, economic, social and technological Public Finance Management Act Performance Management Framework Project Management Office performance management system portfolio of evidence Provincial Revenue Fund proportional representation quality process and result Republic of South Africa South African Statistical Quality Assessment Framework South African local government South African metropolitan municipality Service Delivery and Budget Implementation Plan Skills Development Act Skills Development Levies Act Strategic Executive Director specific measurable, attainable, realistic and with deliverable time frame (criterion) Statistics South Africa Strengths, weaknesses, threats and opportunities Tshwane Leadership and Management Academy 11 P a g e

918 PART A: EXECUTIVE SUMMARY 12 P a g e

919 PART A EXECUTIVE SUMMARY 1 INTRODUCTION The purpose of this report is to recommend a performance management framework for the City of Tshwane. This Performance Management Framework replaces the Performance Management Framework and Procedural Manual approved in 2010.. The development of this performance management framework was influenced by the broader policy objective of government to be a developmental state. Further, the performance management framework is a strategic tool to institutionalise Tshwane Vision 2055. 2 OVERVIEW OF THE STRUCTURE OF THE DOCUMENT The report consists of the following parts. Figure 1: Overview of the document Part A Executive summary Part B Influencers and status quo assessment of Tshwane in terms of Performance Management Part C Conceptual Framework for Performance Management in the City of Tshwane Part D Application of the outcomes based approach to performance management in Tshwane Part E Foundational initiatives towards implementing the performance management framework 13 P a g e

920 3 SUMMARY OF KEY ELEMENTS OF THE REVIEWED PERFORMANCE MANAGEMENT FRAMEWORK The reviewed Performance Management Framework focuses on the implementation of an outcomes-based approach in the City of Tshwane. The key underlying principles of the framework are: Linking strategy to operations; Linking individual and organisational performance processes; Linking and integrating risk management and audit with performance management processes; Aligning levels of indicators and plans; Linking municipal entities to the performance management system of the City of Tshwane. Therefore the Performance Management Framework does not address risk and audit and other matters separately, but integrates them with the key performance management elements listed below. Performance planning; and Performance monitoring and evaluation; Figure 2: Generic planning and reporting cycle Plan Evaluate Implement Review Monitor Report 14 P a g e

921 2.1 PERFORMANCE PLANNING This section of the framework defines the various levels of plans in the City of Tshwane and the responsibilities of a range of stakeholders in terms of those plans. The following issues are important for performance planning: Standardising the language of performance management, and planning in particular; Aligning the plans of municipal entities with those of the Municipality, and in particular their SDBIPs. Aligning indicators on individual performance plans with those of the various organisational level plans listed. In this regard the unpacking of Tshwane Vision 2055 into clear outputs that are measurable for the various decades of change is critical for alignment and ensuring the achievement of Tshwane Vision 2055. Assessing risk and identifying mitigation and prevention measures at each level of planning, within the planning process and not outside, as it is the case currently. Introducing criteria for the quality of plans (in order to address usefulness) and aligning the plans. 2.2 PERFORMANCE MONITORING AND EVALUATION This section of the framework focuses on the range of reports that are required to ensure effective performance monitoring at all levels of the organisation. Quality criteria for reports are defined. The following are important: Risk reporting should be integrated with performance reporting. Auditing of reports is essential to effective performance management. Entities must report to the governance structures of the Municipality. The organisational reporting processes are aligned to the individual performance management processes. The quality of performance information, including the collation and storage of performance evidence for audit purposes, is also discussed in this section. Evaluation is important to assess among others, the impact of service delivery initiatives, whether services are delivered efficiently, whether planned outcomes are being realised, and value for money. This section of the framework focuses on the types of evaluation and roles of stakeholders in evaluation. The role of political oversight is distinguished from the role of management, therefore for example there may be two end of term evaluation reports, one administrative and one political. 15 P a g e

922 3 FOUNDATIONAL INITIATIVES TOWARDS IMPLEMENTING THE PERFORMANCE MANAGEMENT FRAMEWORK This section makes proposals on key initiatives that should be implemented in order to achieve the objectives set out in the performance management framework and broadly contribute towards the institutionalisation of Tshwane Vision 2055. The following key areas are focused on: Capacity of the municipality to conduct performance management Building capacity to participate in performance management Standard operating procedures to operationalize key aspects of performance management Integrated electronic performance management system Organising for service delivery Determination of a service delivery model/ service delivery models Efficient and productive business processes Participatory processes Capacity to deliver The table below summarises key initiatives that should be addressed as from FY 2014/15. Table 1: Summary of key actions Action required Description of action Unpack Tshwane Tshwane Vision 2055 should be unpacked into clear outcomes and outputs to be achieved for each Vision 2055. decade of change. A matrix of indicators should be developed for all levels of plans aligned to Tshwane Vision 2055, and should include economy and efficiency indicators, and national and provincial KPIs. The unpacking should be aligned to various scenarios of future development. An effective model for budgeting aligned to the outcomes performance approach. Development of procedures and guidelines for the The mechanisms to monitor the contributions of external role-players and investors should also be defined. A model for budgeting should be developed that ensures that the outcomes set out in Tshwane Vision 2055 area funded and the priorities of the first decade are funded The following procedures must be developed: Performance planning 16 P a g e

923 Action required Performance Management System. Integrated electronic performance system. Mapping of business processes. Capacity building. Governance matters Description of action Development of indicators, baselines and targets Programme and project planning Procedures on reporting Preparation of audit files and verification of evidence An integrated electronic performance management system should be implemented that enables performance management in Tshwane. Existing business processes for service delivery should be mapped in order to determine the baseline of service delivery processes. Thereafter, new processes should be determined to allow for efficient and economical service delivery. Development of materials for capacity building on performance management and the implementation of accredited and non-accredited interventions to build capacity of the Municipality to do performance management over time. Includes the development of project maturity. Clarification and resolution on the role and accounting lines of municipal entities, and on the full implementation of regionalisation model vis-a-vis departments. 4 CONCLUSION The performance management framework is a strategic tool to contribute to the institutionalisation of Tshwane Vision 2055, and the objective of developmental local government. It should be regularly reviewed as circumstances require, however it is recommended that a review should be considered at least once a financial year, in line with the review of the IDP. 17 P a g e

924 PART B INFLUENCERS AND DIAGNOSTIC ASSESSMENT OF PERFORMANCE MANAGEMENT IN TSHWANE 18 P a g e

925 PART B INFLUENCERS AND DIAGNOSTIC ASSESSMENT OF PERFORMANCE MANAGEMENT IN TSHWANE 1 INTRODUCTION The purpose of this report is to recommend a performance management framework for the City of Tshwane, in line with legislative and policy requirements. In so doing the Performance Management Framework and Procedural Manual as approved in 2010 is replaced. This performance management framework has been developed to facilitate and support the objectives of achieving developmental local government, by putting in place mechanisms that prescribe among others the development of plans to achieve developmental objectives and the monitoring, reporting and review of service delivery as set out in these plans. Hence, the development of a performance management framework for the City cannot be separated from the broader policy objectives of government. Central to this is the objective of being a developmental state. For a truly inclusive and prosperous national developmental society to emerge, we need a state that is developmental in its objectives and capabilities. 1 The quote above reflects the stance of National Government. In relation to this, the attributes of a development state and by extension developmental local government are identified as: It has strategic orientation premised on people-centred and people-driven change. It has sustained development based on high growth rates, restructuring of the economy and socioeconomic inclusion. It has capacity to lead in defining a common national (local) agenda and mobilizing all sectors of society in implementing the agenda. It has organizational capacity and macro-organisation to achieve the strategic agenda, It has technical capacity to translate broad objectives into programmes and projects and ensure their implementation. The ANC election manifesto 2014, which became guiding policy document for South Africa after the May 2014 national elections indicates that over the last 20 years South Africa has become a better place in which to live and that the lives of millions of people have improved. However, key challenges still remain; namely that of Poverty, Inequality and Unemployment. Tshwane Vision 2055 responds to this by indicating that by 2020 Tshwane would be consolidating the gains of democracy and tackling the triple challenges of unemployment, poverty and inequality. The election manifesto indicates that this second phase of government is focused on a qualitatively different path that eliminates poverty and unemployment, creates sustainable livelihoods and substantially 1 The second transition? Building a national democratic society and the balance of forces in 2012 Page 15 19 P a g e

926 reduces inequality. The focus of the developmental state over the next five years is to implement the following priorities: Creation of more jobs, decent work and sustainable livelihoods for inclusive growth Rural development, land reform and food security Education Health Fighting crime and corruption Local government is a key instrument to drive the agenda of the developmental state and the priorities listed above. The City of Tshwane therefore is instructed to contribute to achieve the above, in addition to those objects set out in the Constitution Act 108 of 1996. The performance management system in the municipality is therefore a key instrument to monitor and evaluate progress towards achieving priorities of the developmental state. DPLG defines performance management as a strategic approach to management, which equips leaders, managers, employees and stakeholders at different levels with a set of tools and techniques to regularly plan, continuously monitor, periodically measure and review the performance of the organization in terms of indicators and targets of efficiency, effectiveness, and impact. (DPLG, 2006) In order to develop this performance management framework key influencers of performance management were assessed and a diagnosis of the current state of performance management in City of Tshwane was done. The diagnosis was done to identify bottlenecks to be addressed to re-align the objectives and capabilities of the City towards achieving the priorities of government. The City was benchmarked against other organisations 2, a detailed diagnostic was performed to determine the state of performance management in Tshwane, and the key policy and legislative imperatives were considered. This chapter contains a summary of pertinent information that influenced the development of a new performance management framework for Tshwane. 2 City of Johannesburg, City of Ekurhuleni, City of EThekwini and City of Cape Town, Baltimore municipality 20 P a g e

927 2 KEY LEGISLATIVE AND POLICY IMPERATIVES 2.1 INTRODUCTION The following influencers were considered in the development of this framework as represented in the diagram below. Figure 3: Influencers of performance management LEGISLATIVE AND POLICY INFLUENCERS The Constitution Municipal Systems Act Municipal Finance Management Act and Regulations Framework for managing Programme performance information Municipal Regulations for Municipal managers Municipal planning and Performance management regulation Municipal Structures Act Government Wide M&E South African statistical Quality Assessment Framework CITY OF TSHWANE INFLUENCERS Tshwane Vision 2055 Integrated Development Plan SDBIP M&E, Risk and Audit Framework Individual performance management policies Performance Management Framework 2.2 DISCUSSION OF LEGISLATIVE AND POLICY INFLUENCERS 2.2.1 THE CONSTITUTION Local government in South Africa is governed extensively by various pieces of legislation. The Constitution of the Republic of South Africa, 1996 (hereafter referred to as the Constitution ) is the supreme law of the country. It is imperative that the performance management system of a municipality should monitor the achievement of the objects of local government as set out in section 152 of the Constitution. 21 P a g e

928 2.2.2 TSHWANE VISION 2055 Tshwane Vision 2055 was approved in August 2013 to achieve, amongst others, the objects of local government as set out in the Constitution, and to contribute to the realisation of the South African National Development Plan (NDP 2030) and Gauteng 2055 Growth and Development Strategy. The NDP sets out 12 objects to be achieved in 2030 and Gauteng 2055 outlines 15 developmental outcomes that are focused on equitable growth, social inclusivity, sustainable development and good governance, which have been considered in the development of Tshwane Vision 2055. The purpose of Tshwane Vision 2055 is to provide a broad development logic to guide the City s decision-making on interventions and programmes over the next four decades of game changing. Tshwane Vision 2055 provides for a programme of action and specifies the actions required to realise the set goals and targets through the Integrated Development Plan (IDP) and the Service Delivery and Budget Implementation Plan (SDBIP). Tshwane Vision 2055 will inform the development of the City s short to medium-term priorities and strategic resource allocation. The six broad outcomes of Tshwane Vision 2055 that must be monitored by the performance management system of the City of Tshwane over the next four decades are: Outcome 1: Outcome 2: Outcome 3: Outcome 4: Outcome 5: Outcome 6: A resilient and resource-efficient city; A growing economy that is inclusive, diversified and competitive; Quality infrastructure development that supports liveable communities; An equitable city that supports happiness, social cohesion, safety and healthy citizens; An African capital city that promotes excellence and innovative governance solutions; South Africa s capital with an active citizenry that is engaging, aware of their rights and presents themselves as partners in tackling societal challenges. Tshwane Vision 2055 highlights the importance of using South Africa s local government policy and legislative framework to influence a sustainable urban transition and to support the City of Tshwane s aspirations (social, economic and environmental development). 2.2.3 OTHER KEY PIECES OF LEGISLATION 2.2.3.1 Municipal systems act (32 of 2000) and amendments The MSA requires that each municipality establish a performance management system that is commensurate with its resources, best suited to its circumstances and in line with the priorities, objectives and targets contained in its Integrated Development Plan. A performance management system is required to regularly plan and review, and continuously monitor, report and evaluate the performance of the Municipality in terms of indicators so as to determine efficiency, effectiveness and impact. The MSA establishes a framework for the core processes of planning, performance management, resource mobilisation and organisational change. It also sets out the requirements for a performance management system. 22 P a g e

929 Chapter 6 of the MSA provides for the establishment of a performance management system as well as monitoring and reporting on organisational performance against the IDP. Section 57 of the MSA requires municipal managers and managers directly accountable to a municipal manager to sign annual performance agreements and plans. Section 67 of the MSA requires a municipality to implement systems and procedures to ensure fair, efficient, effective and transparent personnel administration, including the monitoring, measuring and evaluation of staff performance. According to section 81(1)(b), a municipality must monitor and assess the performance of a service provider (or municipal entity) in implementing the service delivery agreement. 2.2.3.2 Municipal planning and performance management regulations, published in gn r796, dated 24 august 2001 The regulations were published in terms of section 120 of the MSA to regulate matters listed in section 49, and were meant to set out the requirements for a PMS. The regulations form a very important part of the establishment and sustainability of the PMS and sets criteria for the municipality. The regulations provide for municipalities to ensure that the PMS complies with the requirements of the MSA; to demonstrate the operation and management of the PMS and to clarify the roles and responsibilities regarding performance management as well as the integration and alignment between organisational (IDP) and employee performance. The table below outlines the requirements of the PMS in terms of the regulations. 2.2.3.3 Municipal Finance Management Act (56 of 2003) The Municipal Finance Management Act (MFMA) (56 of 2003) establishes a strict framework to secure sound and sustainable management of the financial affairs of municipalities and municipal entities; and determines compliance requirements for tabling of the budget, Service Delivery and Budget Implementation Plan (SDBIP) and annual report, amongst others. It establishes sound treasury norms and standards for performance measurement and reporting. The MFMA reinforces the provision of performance management as set out in the MSA by introducing a performance element into budgeting and financial reporting; it also provides for the integration of strategic planning, budgeting and performance management In addition, National Treasury regularly publishes MFMA circulars to guide planning, budgeting, performance and so on. 23 P a g e

930 2.2.3.4 Municipal performance regulations for municipal managers and managers directly accountable to the municipal manager published in gn r805 dated 1 august 2006 The regulations set out how the performance of municipal managers will be directed, monitored and improved. The regulations provide for the conclusion of performance agreements and plans for municipal managers and their direct reports. The performance agreements outline the expectations regarding municipal managers and their direct reports, including the requirements to set objectives, KPIs and targets in the performance plans for assessing performance. These regulations were amended in 2012, with the removal of section 56 of the MSA. Therefore employees who were section 56 employees may now be referred to as fixed term contract employees in City of Tshwane as long as they are contract employees. 2.2.3.5 Municipal structures act (117 of 1998) The Act provides for the establishment of municipalities in accordance with the requirements relating to categories and types of municipalities, division of functions and powers and the regulation of internal systems and structures. It places an obligation on municipalities to achieve the objects set in section 152 of the Constitution and holds the mayor responsible for establishing KPIs. The Act also requires that the performance of the municipality be reviewed in order to improve the economy, efficiency and effectiveness of the municipality. Therefore the municipal performance management system must take into consideration the requirements of the Act. 2.2.3.6 White paper on Service Delivery (Batho Pele) 1998 The performance management system must be based on and should give effect to the following eight Batho Pele principles of improved service delivery as outlined in and required by the White Paper on Service Delivery: Consultation Service standards Access Courtesy Information Openness/transparency Redress Value for money 24

931 2.2.3.7 SPATIAL PLANNING AND LAND USE MANAGEMENT ACT 16 OF 2013 Towards achieving a developmental state, the Act states the importance of achieving cooperative governance and the promotion of public interest through spatial planning principles, frameworks and outputs. Further the Act states that sustainable development of land requires the integration of social, economic and environmental considerations in both forward planning and ongoing land use management to ensure that development of land serves present and future generations. The following categories of spatial planning are listed, that must be considered in the planning and performance reporting processes of the City of Tshwane. (1) Municipal planning consisting of: The compilation, approval and review of integrated development plans; The compilation, approval and review of the components of an integrated development plan prescribed by legislation and falling within the competence of a municipality, including a spatial development framework and a land use scheme; and The control and regulation of the use of land within the municipal area where the nature, scale and intensity of the land use do not affect the provincial planning mandate of provincial government or the national interest. This Act has resonance in terms of how the City of Tshwane develops and implements its long term spatial vision. The Act identifies a key principle that the spatial plans must provide for spatial resilience, whereby flexibility in spatial plans, policies and land use management systems are accommodated to ensure sustainable livelihoods in communities most likely to suffer the impacts of economic and environmental shocks. This requires a rethink in terms of the relationship between the strategic, operational, financial and spatial plans of the City. The Act requires alignment between the spatial frameworks of national, provincial, regional 3 and municipal government. It is important that the long term spatial vision be bedded down and clear short, medium and long term spatial frameworks be developed as soon as possible, in order to identify possible conflict areas with spatial plans and frameworks of other spheres.. 2.2.4 OTHER POLICY DIRECTIVES 2.2.4.1Government-wide monitoring and evaluation system The Policy Framework for Government-wide Monitoring and Evaluation (GWM&E), published in 2007 by the Presidency, emphasises the importance of monitoring and evaluation in realising more effective local government. The GWM&E framework provides an integrated, encompassing framework of M&E principles, practices and 3 In the context of SPLUMA this would apply for example to a City region or a conglomeration of municipalities, rather than the region as seen in the City of Tshwane context. 25 P a g e

932 standards to be used by government, and requires of a municipality to adopt an M&E strategy, which describes the approach to monitoring and evaluation of a municipality s performance and impact as part of its IDP. The GWM&E framework indicates that government draws information from three data sets for M&E purposes. This has culminated in the development of the Framework for Managing Programme Performance Information (FMPPI) in 2007 and the Performance Information Handbook in April 2011 by National Treasury, as well as the South African Statistical Quality Assessment Framework (SASQAF) 2010 by Statistics SA discussed below. 2.2.4.2 Programme performance information National Treasury issued FMPPI in 2007 as well as the Performance Information Handbook in April 2011 in response to the GWM&E requirements. The GWM&E framework requires that a municipality s monitoring and evaluation strategy includes its approach to implementing the FMPPI. The aim of the FMPPI is to ensure that information on inputs, activities, outputs and outcomes forms part of policy development, strategic planning and budgeting, operational planning and budgeting, implementation, and in-year and annual reporting. The FMPPI requires institutions to have integrated performance information systems that include documentation addressing among others the integration of performance information structures and systems within the existing management processes and systems and definitions and technical standards of all the information collected by the institution. 2.2.4.3 Social, economic and demographic statistics Government draws information from social, economic and demographic statistics. The focus is on data from Statistics South Africa (census and other surveys as well as statistics collected by other government officials). Statistics South Africa, the lead agency in ensuring that common standards are set for statistics to promote and maintain good quality statistics, has developed the South African Statistical Quality Assessment Framework (SASQAF) 2010. The purpose of official statistics is to assist local government in planning and decision-making. The main purpose of the SASQAF is to improve the quality of all official statistics and performance information systems by focusing on the following eight dimensions of data quality: Relevance; Accuracy; Timeliness; Accessibility; Interpretability; Comparability and coherence; Methodological soundness; and 26 P a g e

933 Integrity. The GWM&E framework requires that a municipality s monitoring and evaluation strategy includes its approach to implementing the SASQAF where applicable. 2.2.4.4 Medium-term strategic framework Government s Medium-term Strategic Framework (2009-2014) which aligns South Africa s national development planning to the Millennium Development Goals (MDGs) and has the following strategic priorities to address economic development: 1. Speeding up growth and transforming the economy to create decent work and sustainable livelihood; 2. Massive programme to build economic and social infrastructure; 3. Comprehensive rural development strategy linked to land and agrarian reform and food security; 4. Strengthen the skills and human resource base; 5. Improve the health profile of all South Africans; 6. Intensify the fight against crime and corruption; 7. Build cohesive, caring and sustainable communities; 8. Pursuing African advancement and enhanced international cooperation; 9. Sustainable resource management and use; and 10. Building a developmental state, including improvement of public services and strengthening democratic institutions. The MTSF is supported by the following government s twelve point plan objectives. All spheres of government must ensure that systems are in place to enable the achievement of these objectives. 2.3 CONCLUSION This section outlined the key legislative and policy influencers of the City of Tshwane s performance management system and framework. Of importance is that the performance management framework for the City of Tshwane must: Comply with legislative requirements of the Municipal Systems Act and its regulations; Comply with the legislative requirements of the Municipal Finance Management Act and its regulations; Enable the monitoring and reporting of the six outcomes of Tshwane Vision 2055; Enable the monitoring and reporting of the national outcomes relevant to the City of Tshwane; Ensure that the performance management system of the City of Tshwane enables reporting on the constitutional mandate of municipalities; and Respond to the requirements of the FMPPI and the GWM&E. The next section provides a diagnostic assessment of performance management in the City of Tshwane.. 27 P a g e

934 3 DIAGNOSTIC ASSESSMENT OF PERFORMANCE MANAGEMENT IN THE CITY OF TSHWANE 3.1 INTRODUCTION The purpose of this section is to provide a high level diagnostic assessment assessment of the performance management system in the City of Tshwane that this framework seeks to address. The diagnostic assessment focused on two key elements; namely: An assessment of the current performance management frameworks and policies in terms of compliance to legislation An assessment of implementation of performance management in City of Tshwane in terms of the policy agenda of developmental local government and the aims of Tshwane Vision 2055. 3.2 ASSESSMENT OF CURRENT PERFORMANCE MANAGEMENT FRAMEWORKS AND POLICIES AND THE IMPLEMENTATION OF PERFORMANCE MANAGEMENT IN THE CITY OF TSHWANE 3.2.1 CURRENT POLICIES AND FRAMEWORKS The City of Tshwane s performance management system was established in 2003 in terms of the Municipal Systems Act. The 2003 framework attempted to link individual to organisational performance. The Performance Management Framework was reviewed in 2010, and the City of Tshwane Performance Management Framework and Procedural Manual was approved by the Mayoral Committee on 21 July 2010. On 24 February 2011, Council approved the following individual performance management policies as developed by the Corporate and Shared Services Department: Performance Management Policy and Procedure for Top Management (HR); Performance Management Policy and Procedure for Permanent Employees (HR); and Policy on Management of Poor Work Performance Although the 2010 Framework complied with legislative requirements, neither the NDP 2030 nor the Tshwane Vision 2055 were in place when the performance management framework was approved in 2010. Therefore the 2010 framework required to be reviewed in order to align with strategic policy shifts at all spheres of government. The following areas were identified as gaps in the 2010 framework to be addressed in the new performance framework and/or its subsequent procedures and guidelines for the City of Tshwane as well as further reviews of the HR policies. The identification of a conceptual framework to guide performance management in the City The review of institutional arrangements for performance management Alignment of individual and organizational performance management instruments, processes and tools 28

935 Integration of risk and audit into performance management processes Mechanisms to monitor and report on Tshwane Vision 2055 Mechanisms for improving the quality of plans and performance measures Provide guidance on the implementation of National and Provincial KPIs and requirements into Tshwane plans. An assessment of the optimal organisational structure to support the achievement of Tshwane Vision 2055 and performance management imperatives. 3.2.2 IMPLEMENTATION OF PERFORMANCE MANAGEMENT 3.2.2.1 Integrated electronic performance management system The GWM&E requires any electronic system to comply and be integrated with existing systems in the organisation, and to interchange data easily with other systems. The relationships between the system and other systems must be documented in the IT plan; and the users be trained on how to use the system. IT systems should support performance management, by enabling a cycle of performance management, including planning, monitoring, measurement, review, reporting and improvement. For this to be achieved the following criteria must be met: Organisational IT systems must be integrated. Information loaded onto the various systems must have integrity. There should be controls in place to limit human intervention and interference so as to reduce the risk of data corruption and tampering. There must be strict protocols in terms of who has access to the systems, how information is signed off and processed and so on, in order to have a clear and reliable audit trail. The City of Tshwane currently has an electronic performance reporting system to report on the IDP targets, SDBIP targets, departmental SDBIP targets and project milestones. The areas of service delivery of a metropolitan municipality of the size of Tshwane are diverse and complex, and the City has been putting in place measures to systematically integrate all areas of service delivery through the provision of systems support. This requires further improvement so that a nerve centre for performance management can be established that effectively monitors all areas of the organisation. In addition to this a functional project management system is required that enables project management and project performance management. 29 P a g e

936 3.2.2.2 Performance management in relation to the agenda of developmental local government and Tshwane Vision 2055 The key attributes of developmental local government are: It has strategic orientation premised on people-centred and people-driven change. It has sustained development, restructuring of the economy and socio-economic inclusion. It has capacity to lead in contributing to a common national agenda and mobilizing all sectors of society in implementing the agenda. It has organizational capacity and macro-organisation to achieve the strategic agenda, It has technical capacity to translate broad objectives into programmes and projects and ensure their implementation. In the past two years the following improvements were effected in the performance management system of the City of Tshwane. The City complies with legislative reporting requirements, including reporting to Council within 30 days of the end of a quarter, which was previously not achieved. Controls were put in place to ensure reliability of reporting with the result that the City achieved an unqualified audit opinion on the AOPO in FY 2012/13. Plans have improved in quality with closer fit between organizational and individual plans at a senior management level. The hierarchy of municipal plans has improved, with departmental level operational plans being developed. Capacity initiatives have been implemented to consistently improve the capacity of the municipality to deliver. In the light of the newly approved Tshwane Vision 2055 imperatives, further transformation is required in the performance management system. Key elements to be further transformed fall into the following. Further transformation is required in the areas of: a) Planning b) Governance and institutional matters c) Monitoring, evaluation and reporting 30 P a g e

937 4 CONCLUSION This section of the report has indicated that the rationale for the development of a performance management framework is to comply with legislative and policy requirements, to ensure that Tshwane Vision 2055 is implemented, and to put in place mechanisms for the City of Tshwane to contribute to the broader policy objective of achieving developmental local government. The chapter focused on analysing the legislative and policy requirements, and provided a synopsis of the current performance management system in City of Tshwane, with key recommendations. The following section (PART C) of the report discusses the proposed conceptual framework for performance management. 31 P a g e

938 PART C CONCEPTUAL FRAMEWORK FOR PERFORMANCE MANAGEMENT IN CITY OF TSHWANE 32 P a g e

939 PART C: CONCEPTUAL FRAMEWORK FOR PERFORMANCE MANAGEMENT IN THE CITY OF TSHWANE 1. INTRODUCTION Tshwane Vision 2055 is about remaking the capital city, thereby forging a new identity for Tshwane. Its agenda for transformation is premised around the principles of meeting basic needs, developing human capital, building the economy and being a democratic developmental municipality. It sets out a bold vision that will propel the City of Tshwane to be liveable, resilient and inclusive, and reflects the aspirations of all South Africans as outlined in the National Development Plan 2030. In order to achieve the six outcomes of Tshwane Vision 2055 programmes that are designed must be measurable, achievable, time-bound, accompanied by budget and support by a capable institution to facilitate implementation. (Page 18 of Tshwane Vision 2055) As indicated in the previous section of the report, whilst great strides have been achieved to mature performance management in the City, it is important to ensure continuous improvement in order not to hamper the institutionalisation of Tshwane Vision 2055. It is in this context that the outcomes based approach to performance management is chosen as the City s preferred conceptual framework. This section of the report discusses the outcomes based approach in relation to Tshwane Vision 2055 and the objective of realising a developmental state. 2 OUTCOMES-BASED APPROACH TO PERFORMANCE MANAGEMENT 2.1 WHAT IS THE OUTCOMES BASED APPROACH The outcomes-based approach evolved from the need to manage outcomes instead of simply delivering outputs, in order to improve service delivery impacts and create a `better life for all (Presidency, 2010). The approach is designed to ensure that all of government applies a similar approach to ensure focus on achieving service delivery outcomes. This approach requires a municipality to identify the outcomes that it needs to achieve, and then work out how to achieve them by identifying the outputs, the activities required to deliver the outputs and the resources required. The outcomes approach uses the logic model of linking inputs, activities, outputs, outcomes and impacts (Presidency, 2010), as illustrated in the figure below. This approach also supports the measurement of economy, efficiency, equitability and effectiveness, as explained below (National Treasury, 2007). Economy: Are the services delivered value for money? Efficiency: The time taken to deliver the volume of services Effectiveness: Whether the resources utilised to produce the outputs are realising the planned outcomes 33 P a g e

940 Equitability: Whether the allocation of resources to the community is fair Figure 4: Results-based management pyramid (National Treasury, 2007) The developmental results of achieving specific outcomes What we aim to change? The medium-term results for specific beneficiaries that are the consequence of achieving specific outputs What we wish to achieve? IMPACTS OUTCOMES Manage towards achieving these results The final products, or goods and services produced for delivery What we produce or deliver? The processes or actions that use a range of inputs to produce the desired outputs and ultimately outcomes What we do? The resources that contribute to the production and delivery of outputs What we use to do the work? OUTPUTS ACTIVITIES INPUTS Plan, budget, implement and monitor The following four components underpin the outcomes-based model (The Presidency, 2010): Problem analysis: Ensuring that we understand the problem clearly in order to address root causes. The problem should be understood from the perspective of the intended beneficiaries. Theory of change: The institution must understand clearly the assumptions behind choices about what the key levers of change are. Intervention logic: The institution must be clear about what results must be achieved in order to achieve the outcomes, and clear about what resources are necessary. Any flaw in this approach will result in incorrect planning and immeasurable results. Clear indicators, baselines and targets: There should be indicators for each level of the triangle showed in the figures above. This allows progress to be checked at each stage of delivery. Clear and correct baselines are required. 34 P a g e

941 2.2 WHAT DOES OUTCOMES BASED PERFORMANCE MANAGEMENT MEAN FOR THE CITY OF TSHWANE The outcomes-based approach forces thinking towards the reason for spending, and therefore forces active alignment between inputs, outputs, outcomes and impact. In so doing, and by looking at the model using the three E s, the organisation can plan for efficiency, economy and effectiveness. The outcomes approach is focused on the achievement of results or real improvements in the lives of citizens. It ensures that impacts and outcomes the Municipality wants to achieve are determined up front, and that the plans of the Municipality are aligned to realise these outcomes. The adoption of the outcomes approach as a means to institutionalise Tshwane Vision 2055 will require improvements in the City of Tshwane operations in a number of areas. These improvements are necessary to also align the municipality towards achieving a developmental state. 2.2.1. PLANNING, MONITORING AND EVALUATION One of the key attributes of a developmental state is that is has strategic orientation premised on people-centred and people-driven change. Tshwane Vision 2055 is a clear example of this attribute in action. However, as indicated in the previous section, it is important to put in place mechanisms and instruments to recognise and monitor the contribution of external stakeholders and the community at large towards the achievement of Tshwane Vision 2055, moving beyond the IDP as the principle instrument of delivery and legislated quarterly reports as the means of accounting to stakeholders. Outcome 1 of Tshwane Vision 2055 is to be a resilient and resource efficient city. From a governance perspective, this means that performance management processes must ensure resilient practices that utilise resources efficiently, economically and to realise planned outcomes with value for money. The processes of performance management must be aligned to the outcomes-based approach. This means that strategic planning and organisational strategy must drive operational planning and delivery. The outcomes based approach further implies that management must use a logical approach to linking inputs, activities, outputs, outcomes and impacts. Indicators must be developed for all levels of the pyramid (input, output, outcome and impact indicators). Planning, monitoring, reporting and evaluation processes must reflect the measurement of economy, efficiency, effectiveness and equity. The municipal budgeting process must be aligned to the municipal strategic and performance planning processes as well as to National and Provincial key strategic processes. The City s budget must fund prioritised programmes and projects. This implies a further review of the current planning and budgeting model in order to closely link indicators and targets to budgets as the detailed plans for each decade of Tshwane Vision 2055 unfold. For an outcomes based model to work, the means of delivery and monitoring of delivery must be strengthened, implying that business processes must be more efficient, and programme and project management must be strengthened further to ensure efficient and economical project delivery and the realisation of planned outputs. 35 P a g e

942 2.2.2 INSTITUTIONAL ARRANGEMENTS AND HUMAN RESOURCE MANAGEMENT A priority of government for the next five years is to institutionalise long term planning by establishing institutional mechanisms and building the necessary capacity within the state to undertake long term planning. A developmental state should also have the capacity to lead in defining a common agenda and mobilizing all sectors of society in implementing the agenda. Further, it should have organizational capacity and macroorganisation to achieve the strategic agenda and the technical capacity to translate broad objectives into programmes and projects and ensure their implementation. The outcomes based approach would require the City to ensure sound and effective institutionalisation of planning and performance monitoring and reporting at all levels of the organisation. Central to this further refinement would the need to ensure a common understanding of performance management and the outcomesbased approach to performance management. Human resources are an input to the achievement of planned results, therefore their activities must be aligned to realise the planned outputs, outcomes and impacts, and their cost should allow for efficient delivery of outputs. There should be alignment between individual and organisational performance management processes at all levels of the organisation to ensure efficiency and productivity, led by a strategic long term human resources plan aligned to the achievement of Tshwane Vision 2055. The implementation of the outcomes based approach requires skilled practitioners at various levels of the organisation who understand performance management, are able to develop aligned SMART indicators and targets, and are capable of monitoring, reviewing and reporting performance against plans. Business processes must be streamlined in order to ensure efficient workflow for the realisation of outputs and outcomes. Risk management and audit processes must be integrated in the performance management processes. There must be clear responsibility and accountability for key processes such as planning, reporting and implementation of performance management. 2.2.3 TOOLS FOR PERFORMANCE MANAGEMENT An integrated electronic performance management system is required that supports planning, reporting, monitoring, data collation and storage. Clear guidelines and operating procedures are required to enable key aspects of the framework to be realised. To succeed in implementing the outcomes-based approach the City must standardise and understand the terminologies that are associated with the approach. 3. CONCLUSION The focus of this section of the report was discuss the proposed conceptual framework for performance management in Tshwane in relation to the implementation of Tshwane Vision 2055. The implementation of the outcomes based approach will require a range of institutional changes to take place, to ensure that Tshwane Vision 2055 as approved is institutionalised, implemented, monitored and achieved. The next part of the report discusses how the City of Tshwane will apply the outcomes based approach to performance management. 36 P a g e

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944 PART D APPLICATION OF THE OUTCOMES BASED APPROACH TO PERFORMANCE MANAGEMENT IN TSHWANE 38 P a g e

945 PART D APPLICATION OF THE OUTCOMES BASED APPROACH TO PERFORMANCE MANAGEMENT IN TSHWANE 1. INTRODUCTION The previous section of the report recommends the outcomes-based approach to performance management towards the achievement of Tshwane Vision 2055. The outcomes approach to performance management forms the guiding framework for the alignment of the performance management processes. The processes of performance management include performance planning and budgeting (strategic and operational), performance monitoring and reporting (during implementation) and performance evaluation (at the end of the year or specific stages of implementation). The key underlying principles of the Framework are as follows: Linking strategy to operations Linking individual and organisational performance processes Linking and integrating risk management and audit into performance management processes Alignment of levels of indicators and plans Integration of municipal entities into the performance management system of the City Therefore, the framework does not separately address risk and audit, for example, but they are integrated into the key performance management elements listed below. Performance planning Performance monitoring and reporting Performance evaluation The elements of the Performance Management Framework listed above are discussed below. 2. PERFORMANCE PLANNING 2.1 INTRODUCTION Tshwane Vision 2055 sets out long-term goals for each of the six outcomes, which serve as the foundation for informing our future planning approach. It also serves to inform the strategic choices and trade-offs that the City will need to take when identifying, prioritising and implementing new policies and programmes of action interventions. At a high level, all actions of the City should ensure that the following is achieved in each of the decades leading up to 2055: 39 P a g e

946 Figure 5: Key milestones of the decades of game changing By 2020 Consolidating the gains of democracy and tackling the triple challenges of unemployment, poverty and inequality By 2030 Managing sustainable urban growth By 2040 Transitioning towards sustainable urban form and economy By 2055 and beyond Living a better and prosperous life 2.2 DEFINITION OF PERFORMANCE PLANNING IN THE CONTEXT OF OUTCOMES-BASED PERFORMANCE MANAGEMENT In general terms, the concept of performance planning encompasses the following: Indicating what will be implemented Indicating how and with what something will be implemented Indicating where it will be implemented Indicating who will implement the plan Indicating how implementation will be measured, monitored, reported and evaluated While it is understood that a strategic planning process will generate a strategic plan as an output, it is a misnomer to artificially separate strategic and performance plans. This is because all strategic plans must contain performance planning components. For example, the Municipal Systems Act, 2000 (Act 32 of 2000) (MSA) indicates that the IDP is a five-year strategic plan. The MSA further indicates that it must contain information on, among others, the following: Investment and development initiatives Operational strategies Project plans and programmes Key performance indicators and targets A financial plan The components listed above, as contained in Chapter 5 of the MSA, are components of a performance plan. Therefore, in the same vein, strategic plans may be developed at various levels of an organisation and for different time periods. They would, however, contain varying degrees of performance plans within them. Therefore even spatial plans are performance. 40 P a g e

947 2.3 ALIGNED PLANNING PROCESSES The planning processes must be seamless and systematic. The municipal planning processes must be aligned with the provincial and national planning processes, especially with regard to processes that determine key national and provincial budget priorities and strategic programmes and interventions. It is therefore imperative that the planning and budgeting cycle of the municipality identifies key interaction points and processes to ensure inter-sphere coordination and alignment. The suite of planning processes with the municipality must be aligned. The strategic planning process of the City must drive the planning processes of departments, regions and municipal entities. In order to achieve seamless planning processes, it is important to situate human resource planning, skills planning, spatial planning, financial resource planning, risk planning, audit planning, procurement planning and implementation planning within the context of the strategic and operational planning cycle of the municipality. This may require that: A strategic and operational planning cycle be formalised That detailed plans indicating how the cycle will be implemented be developed and reviewed annually. That procedures for engagement of external stakeholders be developed to ensure effective participation and synergy. The strategic and operational planning cycle must take into consideration among others: National and provincial timelines Seamless planning between municipal entities and CoT departments and regions Seamless planning between financial, strategic, developmental, spatial, operational, human resources, risk and audit planning. 2.4 ALIGNED HIERARCHY OF PLANS (THE PRODUCTS OF A PLANNING PROCESS) There should be a clearly aligned hierarchy of plans that exist in the City of Tshwane. The hierarchy of plans should include long term plans, medium term plans and short term plans. For purposes of this framework: A long term plan would be a plan that falls outside of the Council term (i.e. + 5 years), A medium term plan would coincide with the maximum Council term (i.e. 2-5 years), and A short term plan would be a plan that falls within 1 financial year. The hierarchy of plans must ensure that: Medium and long term strategic plans are aligned to achieve long term outcomes and impacts. Operational or implementation level plans are aligned to the strategic level plans of the city 41 P a g e

948 Short term plans are aligned to the medium and long term plans (i.e. they produce outputs that will drive the achievement of medium and long term outcomes and impacts) Spatial plans are aligned to the strategic plans, and that they clearly demonstrate how the strategic agenda of the City will be translated into the space of the City from the short to the long term. Human resources plans are meant to resource the activities of the organisation in order to achieve the planned outputs and outcomes. Therefore the suite of human resources plans must fully align to and support the achievement of planned and budgeted outputs and outcomes over time. Financial plans are aligned to the strategic plans to ensure that planned outcomes and outputs are realised. Departmental, regional and municipal entity plans are aligned, and together achieve the City s short, medium and long term outputs, outcomes and impacts respectively. The plans of the different components of the City should reflect the relationship as illustrated below. Key elements of this alignment can be summarised as follows: Requirements of national and provincial long term plans should be addressed in Tshwane Vision 2055 The IDP and budget must be aligned to Tshwane Vision 2055 The IDP should contain a spatial development framework and measures that reflect how the built environment will also be transformed over time. The municipal entities multi-year business plans must align with the multi-year IDP and budget The departments, regions and municipal entities must develop annual SDBIPs that must align with the Corporate SDBIP The municipal entities SDBIPs must align with their multi-year business plan and with the parent department s SDBIP where applicable. 42 P a g e

949 Figure 6: Relationship between hierarchy of plans in the City of Tshwane NATIONAL AND PROVINCIAL PLANS (strategic and spatial) TSHWANE VISION 2055 and long term spatial vision INTEGRATED DEVELOPMENT PLAN AND BUDGET (Incl. Municipal Spatial Development Framework and Built environment performance plan outcome targets CORPORATE SERVICE DELIVERY AND BUDGET IMPLEMENTATION PLAN (including short term spatial targets and output targets related to the built environment performance plan ENTITIES MULTI-YEAR BUSINESS PLANS DEPARTMENTAL SDBIPs Including operational and project plans ENTITIES SDBIPs REGIONAL SDBIPs INDIVIDUAL PERFORMANCE PLANS The table below outlines the minimum suite of key plans that should be developed. Table 2 Suite of plans Time Categories of plans period Long term Tshwane Vision 2055 plans Decade plans for Tshwane Vision 2055 (5 years +) Long term Financial plan City-wide Spatial Development Plan Infrastructure investment and development plan Town Planning Scheme Key criteria All plans must align to Tshwane Vision 2055 scenario plans, therefore each of the plans listed in the suite of plans must have scenario plans. The spatial development plan must include among others human settlements and, environmental sustainability planning. 43 P a g e

950 Time period Medium term plans (2-5 years) Categories of plans Risk plan Institutional sustainability plan IDP Sectoral Plans Spatial development plans Infrastructure investment, development and maintenance plans Town planning scheme Risk plan and audit plan Human resources plan Financial plan Municipal entity business plan (multi year) Key criteria The institutional sustainability plan must include human resources planning and IT development and investment, as well as security of information. It may indicate how the City over time sees its governance model, administrative structure, skills base and service delivery model. The Town planning scheme must respond to the spatial development plan. The risk plan must address how all long term risks associated to the various scenarios of Tshwane Vision 2055 will be addressed. The Long term Financial plan must show how the various scenarios of the Tshwane Vision 2055 will be addressed, and must respond to the key issues reflected in the institutional sustainability plan. The IDP must align to a particular Tshwane Vision 2055 decade plan The IDP is the key plan that all other plans must align to, and support the achievement of the planned outcomes and outputs in the IDP The IDP being a five year plan must contain within it the spatial framework of the City which clearly illustrates the capital expenditure framework for the next five years The municipal entity business plan should be a five year plan aligned to the IDP of the municipality. Infrastructure master plans should be developed at departmental level, and be reflected in the spatial framework of the municipality as captured in the IDP. Short term plans (up to 1 financial year) SDBIP Departmental, regional and entity SDBIPs Project implementation plans Human resources plans Financial management plans Spatial implementation plan Risk and audit plan The corporate SDBIP is the key plan, and all other plans must demonstrate how the corporate SDBIP will be achieved. The SDBIP must be spatially referenced. Departmental, regional and Entity level SDBIPs must clearly show alignment to the corporate SDBIP, not only through indicators and targets, but also through programmes, projects and budgets. The diagram below illustrates the proposed alignment of the hierarchy of plans of the Municipality according to the outcomes-based approach. This implies that a hierarchy of targets and indicators must be embedded within the hierarchy of plans, which is discussed below. 44 P a g e

951 Figure 7: Alignment of City of Tshwane plans to outcomes-based model (adapted from National Treasury, 2007) What we aim to change in the long term. Impact Tshwane Vision 2055 Long term spatial framework What we wish to achieve in the medium term. Outcomes Tshwane Vision 2055 or IDP (five years) and MTREF MSDF What we produce or deliver in the short term, including activities and resources. Outputs Activities Corporate SDBIP Departmental SDBIP Entities SDBIP Regional SDBIP Project Plans Operational Plans Individual Performance Plans Regional and local spatial frameworks Inputs 2.5 ALIGNMENT OF PERFORMANCE INDICATORS WITHIN THE HIERARCHY OF PLANS Tshwane Vision 2055 has identified the impacts that are intended to be achieved by the City in the next four decades. These will be achieved through the IDP (five-year strategic plan), various levels of SDBIP s (annual plans) and individual performance plans (annual). Strategy should always drive operations and there must always be a link between strategy and operations in the different levels of plans. This implies that a hierarchy of indicators and targets should be developed that corresponds to the hierarchy of plans..the outcomes-based approach implies that different levels of indicators be developed from strategy to operations (i.e. from the six outcomes developed in the City s vision to the IDP, SDBIP and individual plans). The figure below illustrates the hierarchy of plans as well as the alignment of the different levels of indicators towards the achievement of Tshwane Vision 2055. The FMPPI 2007 speaks to developing performance indicators related to the provision of goods and services and indicates that these will describe the interface between the City and the public, and are useful for monitoring and improving performance as it is relevant to the citizens and other partners. The diagram below indicates that the various levels of plans must clearly reflect the following types of required indicators: 45 P a g e

952 The Tshwane Vision 2055 must contain impact and outcome indicators and targets. The IDP must contain outcome indicators and targets. It must, however, show the relationship between the IDP outcome indicators and the Tshwane Vision 2055 impact indicators, as well as the relationship between the budget input indicators to specific outcome indicators on the IDP. The Corporate SDBIP must show output indicators in relation to the IDP outcomes (effectiveness), and budget input indicators to achieve each output listed on the SDBIP. The activity indicators must be listed on the SDBIP in relation to achieving specific outputs listed on the SDBIP. This means that capital and operational projects must be listed on the SDBIP, and each should be measured by specific input, activity and output indicators. The outputs of a project must align to the output indicators on the SDBIP scorecard. The requirements of the Corporate SDBIP would apply to Departmental SDBIPs, Regional SDBIPs and Entity SDBIPs in that Departmental, Regional and Entity SDBIPs must show alignment to the Corporate SDBIP indicators and the IDP outcomes indicators. The Municipal Entity SDBIP output and input indicators must show alignment with the Corporate SDBIP, corporate budget and parent Department SDBIP. Individual performance plans must contain input, activity and output indicators that align with the Departmental SDBIP. The indicators on the spatial frameworks must align to the indicators on Tshwane Vision 2055, so that is clear which outcomes are being driven through specific spatial transformation and capital investment plans. Figure 8: Outcomes-based approach showing relationship indicators (National Treasury, 2007) LEVELS OF PERFORMANCE INDICATORS LEVELS OF CITY OF TSHWANE PLANS National and Provincial KPI IMPACT INDICATORS OUTCOME INDICATORS OUTPUT INDICATORS ACTIVITY INDICATORS INPUT INDICATORS TSHWANE VISION 2055 TSHWANE VISION 2055 OR FIVE-YEAR IDP OR MULTI-YEAR ENTITIES PLANS CORPORATE SDBIP DEPARTMENTAL SDBIP ENTITY SDBIP REGIONAL SDBIP PROJECT PLANS OPERATIONAL PLANS INDIVIDUAL PERFORMANCE PLANS 46 P a g e

953 In addition, all levels of plans must contain indicators that measure economy; and efficiency. The IDP indicators must show how equity will be realised for the citizens of Tshwane, through its relationship with the budget. Further, in order to measure effectiveness of outputs to realise planned outcomes, the monitoring plans of departments and of various stakeholders assessing the achievement of the IDP and Tshwane Vision 2055 must contain indicators that will assess effectiveness. The development of baselines and performance targets for each of the performance indicators is another crucial part of the planning process. Each indicator requires a target that it can be measured against. Performance targets express a specific level of performance that the institution, programme or individual is aiming to achieve within a given time period and must meet the SMART criteria when developed (FMPPI 2007). Performance targets must meet the following SMART criteria: Specific: Can the required level of performance be clearly identified? Measurable: Can the required performance be measured? Achievable: Is the target realistic given existing capacity and resources? Relevant: Is the target linked to the achievement of a goal? Time-bound: Is the timeframe for delivery specific? Aligned: Is the target aligned to targets set in higher levels of plans? The assessments above would form part of performance monitoring activities of the City Strategies and Performance Management Department in the planning phase of performance management. 47 P a g e

954 Table 3: Example of alignment of indicators KPA Strategic objective Provide sanitation. Provide quality sanitation services. Outcome indicator (IDP) Percentage of informal households connected to waterborne sanitation. Programme objective (IDP) Provide waterborne sanitation to 20% of informal households through the formalisation programme. Programme level indicators and targets of IDP and SDBIP Programme Capital Input targets project (IDP measures (IDP) and SDBIP) (SDBIP) The programme targets below are progressive: Year 1: 3% Year 2: 5% Year 3: 9% Year 4: 15% Year 5: 20% Waterborne Sanitation Project for Mamelodi Ext X. The measures reflect CAPEX: Year 1: Rx Year 2: R Year 3: R etc. The total for five years should show total project cost. Output measures (SDBIP) The measures below are cumulative. The numbers of informal households that are connected to waterborne sanitation are measured. There are a total of 200 000 informal households. Process supporting programme Project verification. Process (activity) indicators Input Output indicator indicator Number of project verification visits per year (four, i.e. one per quarter). 25% of planned annual target of sanitation connections must be achieved at each project verification visit. Outcome indicator 20% of planned informal households receive waterborne sanitation over the five-year period. Year 1: 6 000 Year 2: 10 000 Year 3: 18 000 Year 4: 30 000 Year 5: 40 000 48

955 2.6 QUALITY OF PERFORMANCE INDICATORS The quality of the indicators that are developed affects the quality of the plans as well as the measurability of the planned outputs, outcomes and therefore impacts. The requirements of the AGSA as well as the FMPPI 2007, as listed in the table below, are criteria that the plans of Tshwane should adhere to. Table 4: AGSA audit criteria and FMPPI criteria for good indicators AGSA CRITERIA FMPPI CRITERIA MAIN SUBCRITERIA EXPLANATION OF AUDIT CRITERIA EXPLANATION CRITERIA CRITERIA Usefulness Measurable Objectives must be measurable by means of indicators and targets. Reliable The indicator should be accurate enough for its intended use and respond to changes in the level of performance. Indicators should be well defined and verifiable while targets should adhere to the SMART criteria. Relevant The indicator must relate logically and directly to an aspect of the institution's mandate, and the realisation of strategic goals and objectives. Relevant Consistency Clear and logical link must exist between the objectives, outcomes, outputs, indicators and performance targets. Objectives, indicators and targets must be consistent between planning and reporting documents. Appropriate Verifiable Cost-effective Well-defined The indicator must avoid unintended consequences and encourage service delivery improvements, and not give managers incentives to carry out activities simply to meet a particular target. It must be possible to validate the processes and systems that produce the indicator. The usefulness of the indicator must justify the cost of collecting the data. The indicator needs to have a clear, unambiguous definition so that data will be collected consistently, and be easy to understand and use. To address the challenge of poor quality indicators which result in findings of usefulness by the AGSA, senior management must ensure that employees are trained on the development of indicators and targets. This must, however, be preceded by the development of procedures for developing indicators and targets in line with the requirements of the National Treasury: Framework for Managing Programme Performance Information (FMPPI) 2007. The AGSA uses the FMPPI to audit the predetermined objectives of the City. The FMPPI 2007 indicates that defining good performance indicators requires us to carefully analyse what we want to measure together with the different inputs, outputs, activities, the desired outcomes and impacts, and all relevant definitions and standards used in the field. To this effect it is recommended in this framework that each indicator that is developed for the levels of plans be accompanied by a systems description which will provide the following crucial information about an indicator: A definition (what it means). The related targets. The source of information for measuring the indicator and where the information will originate from. 49

956 The alignment of the indicator to indicators in the other levels of plans, programmes and projects of the City. How the indicator will be reported on and where the report will originate from. How the indicator will be measured (formula). Currently not all departments provide calculations with the indicators they develop and this creates a challenge of understanding exactly what the department intends to measure (e.g. if the indicator is a percentage what is the denominator and the numerator) The criteria on the development of indicators and targets are crucial to the success of the Performance Management System and must be implemented in the City. 2.7. PLANNING CYCLE ALIGNMENT TO LEGISLATED TIMEFRAMES The City in the development of its planning cycle, must ensure that legislated deadlines and timeframes are also adhered to. The table below provides a summary of the legislated timelines for the planning process. Process plans must be developed by each department, region and entity that aligns with the legislated timelines and to the approved process plans as submitted to Council, for the development of their own SDBIPs, operational plans and project plans as listed and described above. The Office of the City Manager should assess these process plans to ensure alignment to corporate and intergovernmental planning processes. Table 5: Legislative timelines for performance planning ACTION PRESCRIBED DATES LEGISLATION Drafting of the IDP for adoption by Council. Once every five years (after the MSA Section 25 start of a Municipal Council s elected term). Adopt a process set out in writing for the guidance, After the start of its elected MSA Section 28 (1) planning, drafting, adoption and review of the IDP. term. Annual review and amendment of the IDP in Every year before the start of MSA Section 34 accordance with the assessment of the performance measurements in terms of Section 41, to the extent that changing circumstances demand and in accordance with a prescribed process. the financial year. Development and adoption of a Performance Together with the adoption of MSA Section 39 Management System. the IDP. Each financial year approve an annual budget for the Annually before 1 July. MFMA Section 16 Municipality before the start of that financial year. Table time schedule for budget and IDP review At least 10 months before the MFMA Section 21 (1)(b) process. start of the financial year. Publish the budget, invite public comments and Immediately after tabling in MFMA Section 22 submit to National Treasury. Council. Consider approval of the annual budget. At least 30 days before the start of the budget year. MFMA Section 24 The Municipality s Service Delivery and Budget Implementation Plan is approved. Annual performance agreements for the municipal managers and all senior managers are signed in terms of S57 of the MSA. Must publish revenue projections, service delivery targets set out in the SDBIP. 28 days after the approval of the budget. No later than 14 days after SDBIP approval. MFMA Section 53 (1)( c) MFMA Section 53(3)(a) 50 P a g e

957 2.8 ALIGNMENT OF ORGANIZATIONAL AND INDIVIDUAL PERFORMANCE PLANNING PROCESSES The purpose of having the Performance Management System for employees is to ensure that every employee of the City of Tshwane has an understanding of how they contribute towards the attainment of the City s outcomes. Individual performance management should be driven by and be aligned with outputs and outcomes necessary to deliver the City s strategy. This means that the indicators and targets on individual performance plans must align with the organisation s long term strategy and objectives. All levels of plans must be translated into performance agreements and plans for senior managers, and individual performance plans for all employees. The link between the organisational and individual performance plans is crucial to the achievement of the short term outputs, and medium and long term outcomes and impacts. These plans are required to have indicators and targets. It should be noted that organisational objectives drive individual performance. Therefore, what employees plan to achieve should contribute to what the City aims to achieve in the short, medium and long term. The table below lists and describes the various levels of plans in the City of Tshwane as well as their implications for organisational and individual performance planning. The implications set out key actions that must take place, which in some cases will require additional procedures. Table 6: Linking organisational performance planning to individual performance planning Planning Plan Description of the plan Organisational performance planning requirements Tshwane Vision 2055 (long term) The City s long-term development plan. It is a strategic plan that sets out six outcomes to be achieved through four decades of game change. Tshwane Vision 2055 contains components of a performance plan, for example the strategic actions to be implemented. Must contain a long term spatial plan/ framework Must show alignment to NDP2030 and Gauteng 2055 The six Tshwane 2055 outcomes must be packaged in order to realise the listed outcomes. The following performance plan components must be developed for Tshwane Vision 2055 in order to realise the implementation of Tshwane Vision 2055: Outputs Activities Inputs The IDP is a key implementation instrument for Tshwane Vision 2055, but may not be the only one. A programme is required that will indicate how Tshwane Vision 2055 will be implemented through the IDP, and what other implementation instruments will be utilised. Tshwane Vision 2055 contains predominantly results indicators. Each outcome listed in Tshwane Vision 2055 should be defined with clear systems descriptions, and have corresponding outputs, activities and inputs that Individual performance planning requirements The items and outputs listed under implications for organisational performance planning, require ownership and accountability. Therefore, individual performance plans must be developed that contain specific responsibilities related to the roll-out, implementation, monitoring and evaluation of Tshwane Vision 2055. Indicators identified on the alignment matrix must be allocated to specific individuals and be monitored as part of the individual performance management system of reporting, coaching and reviews. 51 P a g e

958 Planning Plan Description of the plan Organisational performance planning requirements would drive them (i.e. each indicator must be described in detail). Programmes and projects should be defined to realise Tshwane Vision 2055. The timing of the roll-out of Tshwane Vision 2055 is important as it must be in line with the IDP and budgeting planning processes. An alignment matrix should be developed, which cascades the indicators and targets of Tshwane Vision 2055 into the IDP, the SDBIP, and all departmental level and entity level performance plans. Each indicator in the alignment matrix must be allocated ownership in terms of implementation, monitoring and oversight. Therefore, each indicator should be allocated to a senior administrator and to a political principal. The alignment matrix must clearly indicate alignment between Tshwane Vision 2055 and national and provincial strategic outcomes. A strategic risk assessment must be done with clear mitigation plans. Strategic scenario plans are required for each decade of game changing. Each scenario plan should have indicators and targets that the IDP may align to depending on which scenario unfolds. Long term spatial framework is required locating Tshwane Vision 2055 in terms of spatial transformation. IDP (five years) In terms of the MSA, the IDP is a strategic plan linked to the term of Council. It must contain information on investment and development initiatives, project plans and programmes, key The IDP must contain a performance plan. The indicators and targets must meet SMART criteria and must align with the Tshwane Vision 2055 indicators and targets as defined in the proposed alignment matrix of indicators. The IDP predominantly contains outcome indicators (it may include output indicators) Individual performance planning requirements Individual performance plans that align with the IDP and reflect the IDP outputs, projects and programmes and where relevant, targets a specific individual who is responsible for, contributes towards, or monitors, must be developed. 52 P a g e

959 Planning Plan Description of the plan Organisational performance planning requirements Municipal Entity Business Plan (multi-year) performance indicators and a financial plan. MFMA section 87(d) requires a multi-year plan from the municipal entities. It should be consistent with the Municipality s IDP and budget. It is a municipal entity strategic plan with performance planning components. The outcome indicators for the fiveyear period must cascade into annual SDBIP output indicators. The IDP must define the outputs, projects and programmes that will achieve the set objectives and targets. The location of planned programmes and projects must be indicated in the IDP in line with Tshwane Vision 2055 and the Tshwane Metropolitan Spatial Development Framework (MSDF). The IDP must contain indicators that allow for the measurement of efficiency, effectiveness, equitability and economy. The IDP must contain indicators in terms of the proposed alignment matrix that align with provincial and national priorities. Each indicator, target, programme and project must have an owner. Departmental and entity plans must reflect alignment with the indicators and targets, programmes and projects in the IDP. Risk assessments and mitigation plans must be done to ensure risk intelligent planning. The Capital Investment Plan must be aligned with the Spatial Plan of the City which is aligned with Tshwane Vision 2055. The municipal entities business plan must be assessed in line with the IDP and budget, and the IDP must consider the entities priorities and objectives. The municipal entity business planning process must take place in line with the IDP process. The business plan should reflect targets, indicators and projects in line with the IDP of the Municipality and the budget to be provided by the Municipality. The targets, indicators and project plans must align with the IDP and Tshwane Vision 2055 in line with the proposed alignment matrix. Individual performance planning requirements The performance plans must be monitored as part of the Individual Performance Management System of reporting, coaching and reviews. Risk mitigation actions must be reflected on individual performance plans. The municipal entity business plan will determine the performance agreement of the entity s CEO. The head of the parent department under which the municipal entity resides must include in their performance agreement responsibilities related to the monitoring of entity s 53 P a g e

960 Planning Plan Description of the plan Organisational performance planning requirements SDBIP (annual) It should set financial and non-financial performance objectives and measurement criteria as agreed with the Municipality and be consistent with any service delivery agreement between the entity and the Municipality. The SDBIP in terms of the MFMA is an annual performance plan for the Municipality. It gives effect to the IDP and the MTREF of the Municipality. The municipal entity business plan must be assessed by the parent Municipality before it is submitted to Council by the Mayor and approved by the Entity Board. It must contain a risk assessment and risk prevention and mitigation plans. The SDBIP contains output and input indicators. It should show alignment to the outcomes indicators in the IDP and impact indicators in Tshwane Vision 2055. The SDBIP must comply with the requirements of MFMA circular 13. In line with the outcomes-based model, the inputs that will be utilised to achieve the outputs must be reflected (e.g. finances, technology, human resources). Most importantly, the link between inputs and outputs must be reflected. The projects milestones must be for a three-year period. There must be alignment between projects, outputs and output indicators. Service delivery targets should be reflected quarterly, with monthly budget cash flow projections. Capital and operation funded projects must be reflected, with clear monthly cash flows and project milestones. The SDBIP must be supported by departmental and entity operational plans that contain monthly cash flows, targets and project milestones. Procurement plans must be submitted by all departments as part of the SDBIP process. Risk assessments to be done to ensure risk intelligent planning. Individual performance planning requirements performance and the compliance of entities to municipal governance processes. The SDBIP should determine the performance agreements of the Municipal Manager and of senior managers of the Municipality and the entities of the Municipality. Risk prevention and mitigation actions must be reflected on the performance agreements of management. 54 P a g e

961 Planning Plan Description of the plan Organisational performance planning requirements Departmental and Regional 4 SDBIPs (annual) Municipal Entity SDBIPs (annual) This is a departmental and regional level operational plan. It sets out clearly how the IDP Corporate SDBIP outputs related to the departments and regions will be achieved. It should also contain the core functions of the Municipality related to the specific department or region as well as cross cutting compliance matters such as OHS. The MFMA section 87(d) requires multiyear business plans. The Municipal Entity SDBIP is a detailed plan for the entity for implementing the entity s delivery of services and the execution of its budget. It is a detailed one-year plan with a three-year capital plan. It must contain information aligned with the Municipal or Corporate SDBIP. The targets, indicators, financial and project milestones must roll up and align with the corporate level SDBIP, thereby aligning with the IDP. The list of capital projects to be implemented by the department or the region must reflect on the Departmental or Regional SDBIP the same format as the Corporate SDBIP. Responsibility for the delivery of the targets and projects must be reflected on the SDBIP. The Departmental and Regional SDBIPs must contain information and targets on operational matters, and cross cutting compliance matters. The Departmental and Regional SDBIPs must reflect risk assessments and risk mitigation plans. Procurement plans must be submitted by all departments as part of the SDBIP process. It must contain information aligned to the Municipal or Corporate SDBIP and the entity s multi-year business plan. The targets, indicators, financial and project milestones must roll up and align with the corporate level SDBIP, and the multi-year business plan of the entity. The list of capital projects to be implemented by the entity must be reflected in the same format as the corporate SDBIP on the entity SDBIP. Responsibility for the delivery of the targets and projects must be reflected on the Entity SDBIP. The Entity SDBIPs must contain information and targets on operational matters, and cross cutting compliance matters. The Entity SDBIP must reflect risk assessments and risk mitigation plans. Individual performance planning requirements Individual performance agreements must reflect the contents of the Departmental SDBIP. The heads of departments and regions are accountable for the achievement of Departmental and Regional SDBIPs. The Municipal Entity SDBIP will determine the performance agreement of the entity s CEO. The head of the parent department under which the municipal entity resides must include in their performance agreement responsibilities related to the monitoring of entity s performance and the compliance of entities to municipal governance processes. 4 Includes regions 55 P a g e

962 Planning Plan Description of the plan Organisational performance planning requirements Procurement plans must be submitted by all departments as part of the SDBIP process. Divisional, Sectional and Lower SDBIPs (annual) Operational Plans (multiyear) Project Plans These are divisional and sectional plans. They set out clearly how the Departmental SDBIP outputs relate to the divisions and sections. It should also contain the core functions of the Municipality related to the specific section or division as well as cross cutting compliance matters such as OHS. These are detailed plans in place at various levels that support the Divisional, Sectional and Departmental SDBIPs. These are multi-year plans that are reviewed annually and should explain, for example, how maintenance will take place. Each project (regardless of whether capital or operationally funded) must have a detailed project plan. The timeframe would be dependent on the timeframe for the specific project. The details of this plan would be summarised in the Departmental, It must contain information aligned to the Departmental SDBIP. The targets, indicators, financial and project milestones must roll up and align with the department level SDBIP. The list of capital projects to be implemented by the division or section must be reflected in the same format as the Departmental SDBIP. Responsibility for the delivery of the targets and projects must be reflected on the SDBIPs. The Divisional and Sectional SDBIPs must contain information and targets on operational matters and cross cutting compliance matters. The Divisional and Sectional SDBIPs must reflect risk assessments and risk mitigation plans. Procurement plans must be submitted by all departments as part of the SDBIP process. Operational plans should support key operational functions, such as maintenance and repairs and day-today operations, human resource management and costs. They must reflect inputs, activities, outputs, risk, targets and indicators and must enable monitoring of efficiency and economy. Procurement plans must be submitted as part of the operational plans. During the performance and strategic planning processes the project plans should be developed and assessed. The project plans must be aligned with programmes defined in the IDP and with specific indicators in the IDP, Corporate SDBIP and Departmental SDBIP. It must be clear which targets the project outputs drive on the Corporate SDBIP. Individual performance planning requirements Individual performance agreements must reflect the contents of the divisional or sectional SDBIP. The heads of divisions and sections are accountable for the achievement of Divisional and Sectional SDBIPs. Responsibilities as per operational plans must be reflected on individual performance agreements of the different levels of a department, region or entity. The senior management performance agreements must reflect their responsibilities towards the management, resourcing, monitoring and implementation of projects. The project managers performance agreements must reflect in detail the project milestones, project 56 P a g e

963 Planning Plan Description of the plan Organisational performance planning requirements Divisional, Regional, Entity or Sectional SDBIPs. Each project plan must meet project planning criteria as set out by the guidelines issued by the City Manager. Included in these plans would be information on project risk and risk mitigation, communication plans, stakeholder management plans, time, quality and scope management, project organisational structure, project milestones, product and work breakdown structures, critical paths, project tolerances, supply chain plans, construction and contract management plans, commissioning of the project and operating implications for the lifecycle of the project output (e.g. a road). Procurement plans must be submitted as part of project plans. Individual performance planning requirements targets and specific responsibilities in relation to the projects they are responsible for. Project team performance agreements must reflect in detail their responsibilities with regard to the project. If the employee s plans are aligned with the organisation s plans, the City will be able to measure organisational efficiency (are we utilising our human resources to achieve the City s outcomes?). With Tshwane Vision 2055 in place there is a need to amend the organisational plans towards the outcomes of the Vision. This implies that the individual plans should also be reviewed. The alignment of employee s plans to organisational plans is crucial to enable employees to see how their individual efforts and performance contribute to the attainment of organisational goals. When the plans of the organisation are aligned to those of the different business units, teams and individuals, it will ensure that employee contributions and behaviour collectively achieve the objectives of the organisation and reinforces the values of the organisation. Individual performance plans comprises of 80% service delivery KPAs, and 20% core competency requirements. The diagram below illustrates the integration of organisational goals into individual performance plans as defined by regulations. 57 P a g e

964 Figure 9: Alignment of employees plans to organisational goals TSHWANE VISION 2055 KEY PERFORMANCE AREAS SERVICE DELIVERY (IDP, SDBIP) OPERATIONS LEGISLATIVE AND POLICY COMPLIANCE 80% CORE COMPETENCY REQUIREMENTS COMPULSORY CCRs OPTIONAL CCRs 20% 2.9 RISK MANAGEMENT AND AUDIT IN PERFORMANCE PLANNING 2.9.1 RISK MANAGEMENT It is crucial that risk management principles be taken into consideration during the planning processes during the development of the plans of the City(Tshwane Vision 2055, IDP, SDBIP, project plans and individual plans). This will assist the City in ensuring that uncertainty and opportunities are identified before the approval of the plans. When identified, the risks should be assessed using the rating scale as in the table below. Once the estimation of likelihood and impact of a risk is done and a risk rating given, the next stage is to prioritise the risks to determine which ones are to be treated first. Table 7: Rating scale for risks (City of Tshwane enterprise risk management strategy) Rating Description Impact Risks are assessed based on their potential impact on the business (customers, business systems, and employees), financial position and reputation. A level 1 risk is seen as insignificant and level 5 is critical. For example, if more than half of the community would be impacted by the risk, it would be classified as level 5 (critical). Likelihood Risks are assessed based on the likelihood of them occurring. Again we use a scale from 1 to 5, where 1 is rare and 5 is common. Risk acceptability levels: We classify risks as high, medium and low based on their impact and likelihood of them occurring. So where a risk has a common likelihood of occurring and the impact on our business, financial position or reputation is critical, it would be considered high. Control effectiveness The risk assessment will have produced a management's perspective of the effectiveness of the existing controls. This would inform management of additional control interventions required to better manage the risk exposures to an acceptable level. Management will be able to consider the best control options from various alternative control types. The effectiveness of controls is assessed based on a scale from 1 to 5, where 1 is unsatisfactory (which means that the risk 58 P a g e

965 Rating Description exposure is 90% and the effectiveness of controls is 10%) and 5 is very good (which means that the risk exposure is 10% and the effectiveness of controls is 90%). Strategic, operational and project risks must be identified for the different levels of the plans as illustrated in the diagram below. The diagram below illustrates risk management in the levels of plans. Figure 10: Risk Management in Performance Planning LEVELS OF PERFORMANCE INDICATORS LEVELS OF CITY OF TSHWANE PLANS IMPACT INDICATORS TSHWANE VISION 2055 OUTCOME INDICATORS TSHWANE VISION 2055 OR FIVE-YEAR IDP OR MULTI-YEAR ENTITIES PLANS STRATEGIC RISKS OUTPUT INDICATORS ACTIVITY INDICATORS INPUT INDICATORS CORPORATE SDBIP DEPARTMENTAL SDBIP ENTITIES SDBIP REGIONAL SDBIP PROJECT PLANS OPERATIONAL PLANS INDIVIDUAL PERFORMANCE PLANS OPERATIONAL RISKS PROJECT RISKS 2.9.2. AUDIT The audit plans of the City should be developed after full consideration of the risk profile. Currently the City s Internal Audit department is involved with the auditing of performance (quarterly and annually). For the outcomes-based approach to work Internal Audit s role in the processes of developing the different plans of the City as well as indicators is crucial. Internal Audit should strengthen its consulting and advisory role in the planning process, where they advise on the quality of the plans and the performance measures that are developed. If the measures are not of good quality they may not achieve what they are intended to achieve. Internal Audit should advise the City with regard to the requirements of AGSA for the plans and measures of the City and should ensure that the audit plan prepares the city for the achievement of a clean audit outcome. The audit plan of Internal Audit must take into consideration the planning process of the City and outline the advisory or consultancy role of Internal Audit in the Municipality s planning process. This plan should integrate the Risk Management Plan. 59 P a g e

966 The AGSA audits the predetermined objectives and financial statements of the City at the end of the year for the annual report. It is recommended that the City engage the AGSA proactively as an advisor during planning processes. Performance planning should be based on lessons learned from the audit processes. The results of audit processes should input into planning and budgeting processes. 2.10 INSTITUTIONAL ARRANGEMENTS FOR PERFORMANCE PLANNING For performance management to be effective it is crucial that accountability and responsibility for the different processes of performance management are bedded down early in the process. This section reflects on key institutional responsibilities for performance planning. However, detailed frameworks for community based planning and engagement of external stakeholders once developed may modify certain roles identified in terms of planning. The City Manager as the accounting officer is the overall custodian of the performance management system, however, this has been delegated to the Deputy City Manager: Strategy Development and Implementation. The DCM Strategy development and implementation is responsible for the development and review of Tshwane Vision 2055 and overseeing the manner in which it is implemented through the medium and short term planning processes of the municipality. The City Strategies and Performance Management department is the custodian of strategic and performance planning processes in the City. This implies that CSPM is responsible for the following: Coordinating the development of the IDP Coordinating the development of the Corporate SDBIP Facilitating and overseeing the development of departmental/ regional and entity SDBIPs Evaluation the project plans developed by departments/regions and entities. Evaluating the individual performance plans of senior managers The City Planning department is the custodian of spatial planning. It is however the responsibility of the CSPM department to evaluate the alignment of the spatial plans to the outcomes of Tshwane Vision 2055 and to ensure that the correct spatial indicators, capital expenditure plans and infrastructure master plans are incorporated into the IDP that will ensure the achievement of Tshwane Vision 2055. The Chief Financial Officer must ensure that the strategic priorities as identified in the IDP are funded. A long term financial plan is required of the CFO that clearly indicates the city s contribution towards achieving Tshwane Vision 2055 outcomes as unpacked and packaged. It is therefore also incumbent on the CFO to reflect in the budget and the adjusted budget, the impact of changes to the budget on the indicators and targets on the hierarchy / suite of plans affected by budget changes. The Office of the Executive Mayor and political offices perform political oversight over key planning processes delegated by the Executive Mayor, and provide political and strategic direction towards organisational short, medium and long term planning processes. 60 P a g e

967 The Corporate and Shared Services department is the custodian of individual performance management, which processes must align to organisational performance management processes and guidelines. The table below summarises the proposed institutional arrangement for performance planning.. Table 8: Institutional Arrangement for performance Planning Stakeholders Involvement Executive Provide political strategic direction to the long-term plan and the IDP Mayor Contribute to a long-term vision From a political perspective set key strategic direction Approve the SDBIP developed by City Manager Submit priorities and objectives of the IDP to Council for approval Submit the PMS Policy Framework to Council for adoption Submit the municipal strategic or organisational scorecard to Council for approval Enter into a performance agreement with the Municipal Manager on behalf of the Municipal Council and MMCs Assign the responsibility for the management of the PMS to the Municipal Manager Table the budget and the adjusted SDBIP to Council for approval Approve the departmental or service scorecards and Section 57 Managers scorecards Mayoral Committee and Mayoral Committee Clusters Audit and Performance Committee Council Municipal Manager Sign performance agreements with the Executive Mayor Interrogate the plans of the City before they are approved by Council depending on systems of delegation. Approve the risk and audit plans of the City Interrogate the performance plans of the City and advise Council. Approve the IDP and the MTREF Approve the SDBIP and adjusted SDBIP Approve any amendments to the IDP and adjustments of the budget Approve the PMS as part of the IDP Assist the Mayor to develop the long-term vision and the IDP Ensure that all senior managers sign performance agreements aligned with the IDP and SDBIP Coordinate the process of needs identification and prioritisation among all stakeholders, including community structures Coordinate the formulation and revision of the PMS Policy Framework Coordinate the formulation and revision of the Municipality s strategic or organisational scorecard Lead the process of the formulation and revision of the SDBIP Staff and employees Auditor General MPAC National and provincial spheres of Government Make performance plans for different business units, teams and individuals based on the individual performance management policies of the City Advise on the performance plans of the City Conduct oversight on performance plans such as the IDP and SDBIP Develop strategic and spatial plans that guide and coordinate with the municipality s plans. Develop policies and general KPIs that influence the plans of the Municipality Be informed of the plans of the Municipality 61 P a g e

968 Stakeholders Ward Committees, councillors and stakeholder forums Citizens and communities Risk Audit Administrative clusters; City of Tshwane departments and entities Involvement Participate in key planning processes of the City such as the budget, IDP and Tshwane Vision 2055 Participate in the IDP, performance management and MTREF processes Inform priority setting Participate in the drafting and implementation of the Municipality s IDP Participate in the setting of KPIs and targets for the Municipality Make representations on the draft annual budget Be consulted on needs. Participate in the development of the regional and City visions Influence the identification of priorities Participate in the drafting and implementation of the Municipality s IDP through established forums Participate in the setting of KPIs and targets for the Municipality every year Make representations on the draft annual budget Facilitate the development of strategic, operational and project risks as part of the planning process Ensure that Internal Audit plans are developed in full consideration of the risk profile of the Municipality Advise on the plans of the City as part of a consultancy function Develop cluster plans Develop aligned Departmental, Regional and Entity SDBIPs Contribute to development of IDP and SDBIP Sign performance agreements with the City Manager Sign performance agreements with direct reports and ensure that direct reports have operational plans that are reported on Boards of entities Provide input to the development of entity plans (multi-year business plans, budgets and SDBIPs) Ensure that entity plans align to the Municipal IDP and SDBIP Section 57 employees and senior management Organised labour Participate in the formulation of the SDBIP and the municipal strategic or organisational planning processes Manage subordinates performance Enter into performance agreements with the Municipal Manager Develop departmental/ cluster/ regional SDBIPs Participate in the drafting and implementation of the Municipality s IDP through established forums Participate in the setting of KPIs and targets for the Municipality every year Participate and provide inputs in the drafting of the organisational and departmental scorecards 62 P a g e

969 Stakeholders Involvement Oversee the overall application of the Performance Management Policy Framework on Non- Section 57 employees 2.11 CONCLUSION This section has presented the City s approach towards performance planning in relation to the outcomes based model. Key aspects of the performance planning process includes alignment between the City and intergovernmental planning processes, alignment of a hierarchy of plans, indicators and targets, compliance to legislated timelines, alignment between individual and organisational performance planning processes, integration of risk and audit within the performance planning processes and clear institutional arrangements for performance planning.. The next section will discuss the monitoring and reporting process of performance management in line with the outcomes-based model. 63 P a g e

970 3. PERFORMANCE MONITORING AND EVALUATION 3.1 INTRODUCTION This section discusses performance monitoring and evaluation. Performance monitoring processes at various levels of the organization must begin to assess and report on the capability of the state to achieve the developmental agenda as set out in the hierarchy of plans. The assessment of may look at: Whether strategy and required strategic and operational plans exists. The content of the strategy (SMART criteria and alignment to 2055) and provide feedback on the gaps The ability and progress of the municipality in taking care of the poor and vulnerable The management of cross cutting issues and dependencies that drive outputs and outcomes Whether short, medium term and long term results have been realised. For example assessing the impact of job creation on addressing the triple challenge of unemployment, poverty and inequality Monitoring, review and evaluation are an integral part of performance management. They take place for all levels of plans. A performance report cannot be produced without having monitored implementation of plans, reviewed the achievement of plans (whether the achievements are in line with the higher level plans such as the IDP, SDBIP and departmental SDBIP) and evaluated performance (assessing whether targets were achieved, whether outcomes are going to be realised, economy and efficiency, among others). The relationship between monitoring, review and evaluation is discussed below. 3.2. DEFINING THE RELATIONSHIP BETWEEN MONITORING, AUDIT AND EVALUATION Monitoring and evaluation are intimately related. Both are necessary management tools to inform decisionmaking and demonstrate accountability. Evaluation is not a substitute for monitoring nor is monitoring a substitute for evaluation. They may use the same steps, as listed below. They do, however, produce different kinds of information (UNFPA Toolkit, 2004). The UNFPA 2004 defines monitoring and evaluation as follows: Monitoring continuously tracks performance against what was planned by collecting and analysing data on the indicators established for monitoring and evaluation purposes. It provides continuous information on whether progress is being made toward achieving results (outputs, outcomes) through record keeping and regular reporting systems. Monitoring looks at both programme processes and changes in conditions of target groups and institutions brought about by programme activities. It also identifies strengths and weaknesses in a programme. The performance information generated from monitoring enhances learning from experience and improves decision-making. Evaluation is a periodic, in-depth analysis of performance. It relies on data generated through monitoring activities and information from other sources (e.g. studies, research, in-depth interviews, focus group discussions and surveys). The characteristics of monitoring and evaluation are discussed in the table below. 64 P a g e

971 Table 9: The characteristics of monitoring and evaluation (UNICEF 1991. WFP, May 2000) MONITORING EVALUATION Continuous Keeps track; oversight; analyses and documents progress Focuses on inputs, activities, outputs, implementation processes, continued relevance, likely results at outcome level Answers what activities were implemented and results achieved Alerts managers to problems and provides options for corrective actions Self-assessment by programme managers, supervisors, community stakeholders, and donors Periodic: at important milestones such as the of programme implementation; or a substantial period after programme conclusion In-depth analysis; compares planned with actual achievements Focuses on outputs in relation to inputs, results in relation to cost, processes used to achieve results, overall relevance, impact, and sustainability Answers why and how results were achieved, contributes to building theories and models for change Provides managers with strategy and policy options Internal and/or external analysis by programme managers, supervisors, community stakeholders, donors, and/or external evaluators Like evaluation, audit assesses the effectiveness, efficiency and economy of both strategic and financial management and recommends improvement. However, the objective and focus of audit differs from that of evaluation. Unlike evaluation, audit does not establish the relevance or determine the likely impact or sustainability of results. Audit verifies compliance with established rules, regulations, procedures or mandates of the organisation and assesses the adequacy of internal controls. It also assesses the accuracy and fairness of financial transactions and reports, and the effectiveness of processes and outcomes. Audit will test the following: Systems of data collection and gathering Reporting systems and procedures Accuracy of information Adherence to reporting timelines Completeness of information Relevancy and sufficiency of evidence Though with difference in focus, audit and evaluation are both instruments through which management can obtain a critical assessment of the operations of the organisation as a basis for instituting improvements. The table below lists the differences between monitoring, evaluation and audit. 65 P a g e

972 Table 10: Differentiating between monitoring, evaluation and audit Monitoring Evaluation Audit Objective (Why?) To establish baseline information. To track changes from baseline conditions to desired outcomes. To identify areas requiring corrective action. To validate what results were achieved, and how and why they were or were not achieved. To refine the theory of change, revisit original assumptions and objectives thereby improving learning and future approaches. To confirm that what is reported as delivered, has been delivered. To provide assurance and demonstrate transparency and accountability to stakeholders. Focus (What?) Focuses on the outputs of projects, programmes, partnerships and activities, and their contribution to outcomes. Checks progress against plans and areas for action and improvement. Compares planned outcome with intended outcome achievement. Focuses on how and why outputs and strategies contributed to achievement of outcomes and impacts. Addresses questions of relevance, effectiveness, sustainability and change. Focuses on shortfalls in delivery and learnings. Provide recommendations for improvement of current and future projects. Responsibility (Who?) Internal management and programme or project manager responsibility (at all levels): External evaluators and partners. May also be conducted internally, e.g.: Senior Management Team Independent auditors with external inputs. Internal Audit. City-wide Mayoral Committee Clusters Council Entities, departments or regions City Strategies and Performance Management Mayoral Committee City Strategies and Performance Management Timing (When?) Continuous and systematic. Time-bound, periodic, in-depth. Before (formative), during (aiding improvements) or after a project or programme (summative). Ex-ante (systems reviews), ongoing, and on completion (e.g. annual). Focus in relation to the outcome approach hierarchy Inputs, activities and outputs. Impacts, outcomes, purpose, overall objectives. Outputs vs inputs (effectiveness and efficiency); impact; results vs costs; relevance to priorities. Inputs, activities and outputs. Data sources Progress reports; management information systems; performance management data. Evaluation reports; monitoring data; primary and secondary data sources including case studies, surveys and statistical data. Progress reports, management information systems. 66 P a g e

973 3.3 HIERARCHY OF PERFORMANCE MONITORING PROCESSES Continuous monitoring and periodic reporting against the indicators and targets set in the different plans of the City is crucial during the implementation of the plans to measure progress against planned results. A result, according to UNFPA 2004, is a describable or measurable change in state that is derived from the effects of generated programmes. Performance monitoring consists of the following: Collecting, analysing and records keeping of performance data or information on indicators, targets and milestones. Performance reporting and reviewing of indicators, targets and milestones on progress towards achieving outcomes. Corrective measures where there is sub-optimal performance The municipality should have processes in place to monitor (as listed above) all levels of plans. The following should be implemented: Monitoring processes and controls must be documented by each department, entity and region in the form of standard operating procedures. These should be aligned to corporate level requirements. The department, region and entities must ensure that subordinate division, sections and components also have documented monitoring procedures. The procedures must set out how data or information will be collected, analysed and recorded, Procedures must set out how reporting and reviewing will take place, Processes must provide for the identification and implementation of corrective measures where there is under-performance. Monitoring procedures should be reviewed at least annually but should be reviewed each time a plan changes. The monitoring processes must take into consideration legislated and corporate reporting timelines in order to generate meaningful monitoring data. Internal mechanisms should be put in place to acquire data, analyse, review and report on indicators that have dependencies on other Tshwane departments, regions or entities or on other agencies external to the municipality, within financial and reporting periods. Reliance on data and information that is not within the control of the municipality indicates that the indicator might not meet measurability criteria. Each indicator should be monitored according to its approved systems description that is developed during the planning processes. 3.4 HIERARCHY OR REPORTS There are three types of results that should be monitored through performance monitoring processes; namely outputs, outcomes and impacts. Reports are essential to document these results to stakeholders. Performance reporting processes should be aligned in terms of a hierarchy of reports that align to the municipality s hierarchy of plans. This alignment is dependent on the effective alignment of the plans. Of 67 P a g e

974 importance is that reports within departments, entities and regions should enable an assessment of departmental, regional and entity results, as well as their contribution towards organisational level short, medium and long term plans. The table below lists the hierarchy of reports that should be developed in the City of Tshwane for performance management purposes in terms of: Type of report Description of the report Frequency of reporting Responsibility for generating the report Approval authority Stakeholders the report should be submitted to once approved The report and its requirements/implications regarding the individual performance management system. 68 P a g e

975 Table 11: Types of reports required Plan Tshwane Vision 2055 (long term) IDP (five year) SDBIP (annual) Reports required Evaluation report. Quarterly performance reports of the Municipality. Description of the report The report evaluates performance of the Municipality against the outcomes set out in Tshwane Vision 2055 including the review of the long term spatial plan/framework and the MSDF MFMA section 52(d) requires the Mayor to submit a report to Council within 30 days of the end of a quarter on the implementation of the budget. It should include the performance Frequency Every five years in line with the IDP review. Annual reviews of the IDP will assist towards the Tshwane 2055 evaluation. Each quarter of the financial year. Submit to stakeholders 5 within five days of Council. Reporting Approval of the report Mayoral Committee and Council. Mayoral Committee and Council. The report must serve at Audit and Performance Committee and Council may refer the report to MPAC. Responsibilities City Manager who may delegate the function to the relevant Deputy City Manager or senior official. Heads of departments and regions and CEOs of entities to contribute as required. Accounting Officer who may delegate the function to the relevant Deputy Manager. CEOs of entities must submit quarterly performance assessments against their Entity SDBIPs. Stakeholders that the report should be submitted to Not legislated. Stakeholders to be determined by the Mayor and Accounting Officer. National Treasury and Provincial Treasury within five days of Council. The report to be loaded onto the public website of the Municipality within five days of Council. Requirements for individual performance management The accountable or delegated officials performance agreement must contain this function. The individual performance coaching and review processes of senior managers must take into account their contribution or lack thereof towards the achievement of Tshwane Vision 2055 as per their responsibilities set out in the respective IDP and SDBIPs. The requirements for this report must reflect on the performance agreement of the Accounting Officer and any senior managers he or she delegates to perform this function. Each Senior Manager who is a Head of Department or Region must have a concurrent 5 In terms of section 31 of the Municipal Budget and Reporting Regulations (Treasury and Provincial Treasury) 69

976 Plan IDP (five year) SDBIP (annual) Reports required Annual report of the Municipality and municipal entities. Description of the report of all departments, entities and regions. Section 46 of the Systems Act and section 121 of the MFMA require annual reports to be compiled by the Municipality and municipal entities. The report must reflect the performance against the budget, records of all activities, AG report, and annual Frequency To be tabled within seven months of the end of a financial year (by January of the year). The municipal entities must submit the entities annual report within six months or an earlier date as agreed. Reporting Approval of the report Mayoral Committee and Council. Audit and Performance Committee. The report may be referred to MPAC. Responsibilities Internal Audit to audit the quarterly reports. Heads of departments and regions to report as per reporting guidelines. Accounting Officer or the person delegated. CEO of entities. All departments and regions to report as required. Internal Audit to audit the annual report and financial statements of the parent and entities. AG to audit the annual report. Stakeholders that the report should be submitted to Publication by the Accounting Officer in terms of section 32 of the Municipal Budget and Reporting Regulations. The AG, Provincial Treasury and COGTA. Requirements for individual performance management quarterly performance reporting function on their performance agreement. The coaching and review processes of various levels of management must take into consideration the results reflected on the quarterly performance report of the Municipality. The requirements for this report must reflect on the performance agreement of the Accounting Officer and any senior managers he or she delegates to perform this function and the CEOs of entities. Each Senior Manager who is a Head of Department or Region and CEOs of entities must have a concurrent annual reporting function on their performance agreement. The coaching and review processes of various 70 P a g e

977 Plan IDP (five year) SDBIP (annual) Reports required Section 72 report midyear budget and performance assessment. Description of the report performance report. 6 Assessment of the capital expenditure programme linked to infrastructure master plans should be done. An assessment of the capability of the municipality to organise itself to deliver services should also be done. Assessment of the performance of the Municipality during the first half of the financial year taking into account monthly financial statements, Municipality s service delivery performance, and the service delivery targets and performance Frequency By 25 January of each year. Reporting Approval of the report Mayoral Committee and Council. The report should serve at Audit and Performance Committee. Responsibilities The Accounting Officer or the delegated official to compile the reports. Internal Audit to audit the report. All departments and regions to report within reporting guidelines on a quarterly basis. Municipal entities to submit their Stakeholders that the report should be submitted to National Treasury, and relevant Provincial Treasury, within five days of Council. On public website within five days of Council. Requirements for individual performance management levels of management must take into consideration the results reflected on the annual report of the Municipality. The requirements for this report must reflect on the performance agreement of the Accounting Officer and any senior managers he or she delegates to perform this function and the CEOs of entities. Each Senior Manager who is a Head of Department or Region and CEOs of entities must have a concurrent quarterly reporting 6 Details can be found in MFMA section 121 71 P a g e

978 Plan IDP (five years) Municipal Entity Business Plan (multiyear) Reports required Political midterm and end term reports. 7 Business plan review reports. Description of the report indicators set in the SDBIP. Take into account the previous year s annual report and performance of municipal entities. These are political oversight reports developed in the midterm of Council and at the end of term of Council to assess performance against the political mandate and election manifesto. The review report is meant to assess performance of the entity in line with the review Frequency Two and a half years and five years. Annually and every five years. Reporting Approval of the report Mayoral Committee. The parent Municipality and the Board of the Entity in line with section 87(d) of the MFMA. Responsibilities midyear assessment reports as per reporting guidelines communicated by the Municipal Manager. Office of the Mayor. CSPM provides technical report towards this process on behalf of the CM CEOs of entities. Parent department under which the entity resides. Stakeholders that the report should be submitted to To be determined by the Executive Mayor and Mayoral Committee. Accounting Officer of the Municipality. Requirements for individual performance management function on their performance agreement. The coaching and review processes of various levels of management must take into consideration the results reflected on the quarterly and midyear report of the Municipality and entities. The responsibility for this report should be reflected on the performance agreement of the Executive Mayor, delegated MMCs and on the senior official responsible for this report in the Office of the Executive Mayor and CSPM. The performance agreement of the entity s CEO must contain this responsibility. The head of the parent department under which 7 Technical reports may be done each year (mid-year and end of year) to be an early warning system for the municipality. 72 P a g e

979 Plan Departmen tal and Regional 8 SDBIPs (annual) Reports required Departmental and regional performance reports. Description of the report and development of the IDP. The quarterly performance reports indicate performance against the Departmental SDBIP and Regional SDBIP. When reported, the performance against the corporate level SDBIP should be shown as a roll up. The reports should comply with all reporting requirements, and include detailed reporting against Frequency Quarterly. Monthly reporting against key indicator milestones on the plans. Annually. Reporting Approval of the report Accounting Officer. Mayoral Committee. Responsibilities Heads of regions and departments to submit reports. These reports will be assessed and reviewed by the department responsible for organisational performance management. Stakeholders that the report should be submitted to Accounting Officer. Requirements for individual performance management the municipal entity resides must include in their performance agreement responsibilities related to the monitoring of the entity s performance and the compliance of entities to municipal governance processes. Individual performance agreements must reflect the requirements for monitoring and reporting within the department. The coaching and review sessions of senior management of departments and regions must take into consideration the organisational performance results submitted to the Mayoral Committee by the department responsible for organisational performance management and the results of internal audit. 8 Includes regions 73 P a g e

980 Plan Reports required Description of the report operational and project plans at a departmental and regional level. Frequency Reporting Approval of the report Responsibilities Stakeholders that the report should be submitted to Requirements for individual performance management Divisional, Sectional and Lower SDBIPs (annual) Operationa l Plans (multiyear) Divisional and lower level reports. Operational reports. Each department and region must submit their reports to Mayoral Committee. These are reports against the Divisional and Lower SDBIPs that must be submitted to the heads of departments and regions. It must include progress on service delivery, operations and projects, including risk management and compliance. These are detailed reports against the operational plans at various levels Monthly reports. Monthly within a department. Head of Department. Head of Region. Accounting Officer. Heads of divisions and sections must compile the reports in terms of reporting guidelines. The heads must ensure that evidence files are compiled, verified and submitted with reports. The heads of departments, entities and regions to submit detailed operational reports To be determined by the Head of Department and the Head of Region. To be determined by the Accounting Officer of the Municipality. Individual performance agreements must reflect the requirements for reporting. The performance reviews of heads of divisions and sections must take into consideration the performance of divisions and sections against their SDBIPs and the impact on the Departmental SDBIP and Corporate SDBIP. Audited results of the organisational performance report must also be considered. Responsibilities for reporting as per operational plans must be reflected on individual performance agreements 74 P a g e

981 Plan Project Plans Reports required Project reports. Description of the report of the organisation. Detailed project reports against the approved project plans that are submitted in line with reporting guidelines. Project reports are submitted at various levels of the organisation. They would include information on risk, achievements and mitigation measures. Frequency Quarterly as part of Departmenta l, Entity and Regional SDBIP reporting. Monthly reporting. Reporting Approval of the report Heads of departments and regions. Heads of entities. Within the departments, regions and entities the relevant heads to approve. Mayoral Committee and Council (in the case of the organisational quarterly report). Responsibilities to the department responsible for organisational performance management. Heads of divisions and sections to report to heads of departments, entities and regions. Project managers to compile detailed project reports. Heads of departments, regions and entities to ensure quality assurance and verification of reports and internal approval before submission to organisational reporting processes. Internal Audit to audit performance against projects as reported in organisational reporting processes. Stakeholders that the report should be submitted to National Treasury and COGTA as part of quarterly, annual and midterm reporting on performance. AGSA as per annual reporting of performance. Oversight committees as determined by Mayoral Committee. Requirements for individual performance management of the different levels of a department, region, or entity. The senior management performance agreements must reflect their reporting responsibilities towards the management, resourcing, monitoring and implementation of projects. The project manager s performance agreements must reflect in detail the responsibilities for project monitoring and reporting. Project team performance agreements must reflect in detail their responsibilities with regard to the project reporting. 75 P a g e

982 Plan Reports required Description of the report Frequency Reporting Approval of the report Responsibilities Stakeholders that the report should be submitted to Requirements for individual performance management 76 P a g e

983 3.5. QUALITY OF REPORTS A performance report is a result of performance monitoring, review and evaluation processes, and may influence further performance evaluation. While formats of reports may differ from time to time, based on circumstances and the needs of various stakeholders, the following general criteria applies to all reports: A report must comply with the required format at any given stage. Processes should have been undertaken to verify that information in the report is correct, and the reports must be quality assured and signed by the official accountable for the report. Submission of reports must meet timelines for submission. Reports must be supported by appropriate, valid, sufficient, relevant, verifiable, consistent, accurate and complete evidence of performance against the matters being reported in line with agreed and approved systems descriptions. All reports reflecting non-achieved targets must show corrective measures. The quality of the reports links back to the quality of the plans. If the indicators and targets, as well as the type of evidence to be provided for the indicators, are not well defined in the plans there will be challenges in reporting. The AGSA sets criteria for auditing the annual report. These should be taken into consideration when reporting is done during the year because the quarterly reports influence and drive the annual report. The following quality criteria must be complied with. Table 12: AGSA reporting and audit criteria MAIN CRITERIA SUB-CRITERIA EXPLANATION OF CRITERIA Compliance with reporting Existence Objective indicators and targets must be predetermined and performance information must be reported against them. requirements Timeliness Performance information must be reported within agreed reporting timelines. For purposes of the annual report, performance information must be submitted with the annual report two months after financial year end. Presentation Performance information must be reported using the NT guidelines. Actual performance information in tables and narrative in the annual report must be consistent. Material differences between actual and planned performance must be explained. Reliability Validity Actual reported performance must be supported by information to prove that the performance has occurred and pertains to the entity. Accuracy Amounts, numbers and other data relating to reported actual performance have been recorded and reported appropriately. Completeness All actual results and events that should have been recorded have been included in the performance reports 77

984 3.6. LEGISLATED TIMEFRAMES FOR REPORTING The requirements and the timelines for legislated reporting are stipulated in the Municipal Systems Act, 2000 (Act 32 of 2000) (MSA) and in the Municipal Finance Management Act, 2003 (Act 56 of 2003) (MFMA). In order to meet these timelines the municipality will set timelines for all departments, regions and entities to report within, in accordance with internal decision making processes. The table below sets out key legislative reports. Table 13: Types of reports and legislated reporting timelines where applicable LEVEL OF PLAN TYPES OF REPORTS FREQUENCY LEGISLATION IDP SDBIPs PROJECTS BUDGET Monthly budget statements Monthly reports on progress on achievement of targets including projects Quarterly reports Mid-year budget and performance assessment report No later than 10 working days after the end of each month The second of each month MFMA Section 71 N/A 30 days after the end of each MFMA Section 52 (d) quarter No later than 25 January MFMA Section 72 Annual Performance Report End of August MSA Section 46 Table the Annual Report in the Council 31 January, within seven months after the financial year end MFMA Section 127 3.7 REPORTING PROCESS FLOW On a monthly basis departments, regions and entities must report on departmental/ regional/ entity level SDBIPs and pre-determined strategic initiatives, projects and programmes. These reports are submitted to Organisational Performance Management, after the department/region/entity has verified their performance. These reports are used as an early warning system to the municipality. 9 On a quarterly basis each department/ region/entity must produce a comprehensive quarterly performance report on all its targets (Corporate and departmental/regional/ entity SDBIP targets), projects, legislative compliance matters, operations, risk and finances. These reports are submitted simultaneously to Organisational Performance Management and to the Mayoral Committee system. Organisational Performance Management will on a quarterly basis develop a performance evaluation report, which is submitted to the Mayoral Committee system, to be subsequently submitted to Council and to external stakeholders. Information reported by departments, regions and entities on reporting systems will be utilised towards the development of the annual performance report for the municipality 9 The detailed contents of each report will be communicated via circulars which will be reviewed as per organisational needs. 78 P a g e

985 The performance reporting process is illustrated below. Figure 11: Performance reporting process Departments, regions and entities Quarterly performance reporting Department, regions and entities Administrative and Political Clusters Audit and Performance Committee Mayoral Committee Monthly reporting of departments, regions and entities AUDIT PROCESS Organisational performance management: analysis and development of Organisational Performance Report quarterly Administrative and Political Clusters Audit and Performance Committee Mayoral Committee Council MUNICIPALITY S ANNUAL PERFORMANCE REPORT 79 P a g e

986 3.8 ALIGNMENT OF ORGANISATIONAL AND INDIVIDUAL PERFORMANCE MONITORING AND REPORTING PROCESSES The model of inputs, activities, outputs, outcomes and impact requires that indicators be developed at all levels of the outcomes-based pyramid to ensure that progress against each plan and towards achieving the planned outcomes and impacts can be measured. The outcomes-based approach implies that different levels of indicators be reported on and be rolled up from the individual plans, to the SDBIP, IDP and the six outcomes of the City s vision. Effectiveness of individual performance management is recognised as the single most important factor in differentiating organisational performance and achieving a competitive advantage. The diagram below illustrates the proposed alignment between organisational reviewing and reporting process and individual performance reviewing and reporting processes. Figure 12: Alignment of organisational and individual reporting processes ORGANISATIONAL REVIEW AND REPORTING INDIVIDUAL REVIEW AND REPORTING Tshwane Vision 2055 Review of the Executive Mayor and City Manager Review of the Executive Mayor and City Manager Review and report municipalities performance against IDP Review of the City Manager Political oversight Review and report performance against projects and operational plans Review and report municipalities performance against Corporate SDBIP Review and report departmental, regional and entities performance against SDBIPs Review and report performance against lowel level SDBIPs Review of the senior managers directly accountable to the City Manager and review of senior managers who does not report directly to the City Manager Review of managers reporting to departmenatal heads and divisional heads Review of project managers or operational managers (Review of City Manager and Members of the Mayoral Committee 80 P a g e

987 3.9 COLLECTING ANALYSING AND STORING DATA The management of performance information is a critical requirement in performance management. The quality of performance information is crucial to the success of the Performance Management System. The City of Tshwane monitoring system places responsibility on each department, region or entity, division or section and individual employees to collect, analyse and store relevant data and information to support the monitoring process. Evidence of performance will be gathered, stored by each department and presented to substantiate claims of meeting (or not meeting) performance standards. This evidence is stored in a sound filing system (both manual filing and digital filing, where possible). Senior management, such as heads of departments, regions or entities, must allocate responsibility in their offices for information management, as these performance information files must be accurate, updated and secured and must be treated as a separate discipline from registry type filing. The performance information should be filed according to key performance areas and key performance indicators. These files will be regarded as a portfolio of evidence and must be kept for purposes of performance measurement, performance review and audit. The evidence submitted must be appropriate, sufficient, relevant, verifiable, and consistent and time bound as per the requirements of the SASQAF 2007. To assess or measure the quality of the data used to support the indicators and targets the Eight Dimensions of Quality from SASQAF can be used. They are as follows: Relevance Accuracy Timeliness Accessibility Interpretability Comparability and coherence Methodological soundness Integrity Evidence files must be submitted at least quarterly, with the submission of reports by departments, regions or entities. Evidence files must meet key quality criteria: They must be certified by senior management as containing information that meets all performance information quality criteria and meeting the AGSA audit criteria Files must contain listings per indicator. For example a listing for number of EPWP jobs created should indicate per month, the names and id numbers of people who benefited from EPWP jobs. Files must contain information against reports performance on targets as well as projects/programmes or initiatives. Detailed evidence files must be maintained in each department, region and entity for all levels of delivery/ plans. 81 P a g e

988 Heads of departments, regions or entities must ensure that processes are in place within their departments, regions or entities for daily or monthly monitoring of performance and ensure that all evidence files are verified before submission with reports. The AGSA requires that the reports of the City are verifiable. This means that there must be information to support the progress reported in the different reports and the evidence must be relevant to the report. The role of internal audit in this regard must be to assist departments with assessing the evidence. In line with the requirements of the FMPPI 2007, standard operating procedures for the management of performance information must be developed and implemented in the City. The documented procedures should be in place for each department, region and entity and must address the FMPPI criteria below. Integration of performance information structures and systems within the existing management processes and systems. Definitions and technical standards of all the information collected by the institution. Processes for identifying, collating, verifying and storing information. Appropriate systems to collect, collate, verify and store data. Processes to ensure that the information is appropriately used for planning, budgeting and management within the institution. Processes to set performance standards and targets prior to the financial year, review performance and evaluate performance. Process to ensure that responsibility for managing performance information is included in the individual performance agreement of managers and officials. Identified set of indicators for reporting and oversight purposes. 3.10 RISK AND AUDIT IN PERFORMANCE MONITORING PROCESSES Risk Management Earlier it was indicated that risk management should be part of the performance planning processes, where strategic, operational and project risks are identified, assessed and prioritised. In the performance monitoring processes it is important to report on the implementation of risk management action plans within the levels of the plans identified in the section on performance planning, in terms of the hierarchy of reports. Auditing of performance The audit process is maintained by the following two parties: Internal Audit The internal auditing function that focuses on agreeing reported results on a quarterly basis regarding each of the relevant department s indicators. External Audit The process conducted by the AGSA on an annual basis focusing on the SDBIP indicators and the audit sampling and testing of such along with compliance with legislated requirements in terms of 82 P a g e

989 reporting parties and deadlines. The diagram below illustrates the relationship between performance reporting, risk management and auditing. In order for the performance management system to enjoy credibility and legitimacy from the public and other stakeholders, performance results, especially those at departmental, entity and regional level, and corporate level results must be audited by Internal Audit, on a regular basis.. Audits should ensure that reported performance information meets the AGSA audit criteria as indicated above. Audits must comply with recognised audit standards and methodologies, and must enable the municipality to prepare effectively for an external audit by the AGSA, and to allow for the AGSA to place reliance on the work of internal audit. Figure 13: Integration of audit and risk in the reporting processes It is an integrated iterative process Monitor risk daily and monthly within departments, regions or entities Report on risk quarterly Review and asses risk every six months or annually Report monthly on Departmental, Regional or Entity and Corporate SDBIP and individual plans Report quarterly on Corporate and Departmental, Entity or Regional SDBIP Report annualy on Corporate SDBIP (roll up of IDP indicators) Assurance: Audit performance quarterly (Internal Audit) Assurance Audit performance annually (Internal Audit and AGSA) 3.11 CORRECTIVE MEASURES FOR SUB-OPTIMAL PERFORMANCE Continuous monitoring allows for the early identification of challenges and corrective measures to be instituted. The principle of corrective action is to positively change performance by ensuring that the corrective measures taken are proportionate to the nature and severity of the problem. Implementing corrective actions implies identification and elimination of causes of non-performance, thus preventing recurrence. In order to improve performance, the Municipality, throughout all performance management phases, must analyse the causal and contributory reasons for poor performance, through the following: 83 P a g e

990 Individual coaching and reviewing sessions from top to lower levels of the administration. Assessment of the organisation s performance against the SDBIP and IDP. Assessment of the departments, entities or regions and divisions or sections against Departmental, Divisional, Regional or Entity SDBIPs. Appropriate response strategies must be developed where there is under-performance and non-achievement of targets and plans. The response strategies must address the root cause of sub-optimal performance. They must consider the root cause from different perspectives that include: Process and systems issues Capacity and resourcing issues such as availability of tools, span of control issues and financial resources Change management and diversity management issues Shortcomings of the plans themselves Effectiveness of current service delivery mechanisms and alternate service delivery mechanisms Human resource matters such as wellness, skills, scope of work Structural issues and interdependencies Committed corrective measures should be monitored. 3.12 INSTITUTIONAL ARRANGEMENTS FOR PERFORMANCE MONITORING It is essential that reporting is holistic, streamlined, and aligned to organisational objectives and decision makers requirements. Further, monitoring and reporting is an essential component of management functions, and should not be an ad-hoc activity, but integrated in the functions of various levels of officials. The CSPM department is the custodian of organisational performance management in the City of Tshwane Therefore CSPM performs a critical support role to the City Manager and the Executive through: The provision of management information on performance of the City Advising the City Manager in coaching sessions of senior management Engagement on audit processes with both internal audit and the AGSA on AOPO matters and facilitate and drive the objective of achieving a clean audit on AOPO outcomes. Ensuring legislative compliance in terms of coordinating reporting to Council structures and external stakeholders Putting in place measures to build the capacity of key role-players to play an effective role in performance management Institutionalising performance management 84 P a g e

991 Roles and responsibilities for performance monitoring (reporting is implied) are discussed below. Figure 14: Institutional arrangements for performance monitoring DEPARTMENT ROLES AND RESPONSIBILITIES City Strategies and Performance Management Custodian for performance management processes and information in the City of Tshwane. Focus on organisational performance management and monitoring. Monitors the performance of departments, regions and entities against the IDP, Tshwane Vision 2055 and the Corporate SDBIP. Responsible for the development of monthly, quarterly and annual organisational performance reports. Capacity building for performance management, which may be done in partnership with the TLMA. Interface of the organisation on the AOPO with the AGSA. Collection, analysis and storage of corporate performance data. Identify major or systematic blockages and guide future planning and developmental objectives and resource utilisation in the Municipality. Provide a mechanism for managing expectations and ensuring increased accountability between residents of a municipal area and the political and administrative components of the Municipality. Provide early warning signals to identify problems in meeting the IDP strategies. Provide appropriate management information for informed decision making. Office of the City Manager or The Office of the City Manager supports the City Manager to carry out his or her functions as an Accounting Officer. Accounting Officer Manage the individual performance of the City Manager s direct reports in line with signed performance agreements and plans. Oversee the administration with regard to ensuring compliance to all performance management requirements. The Accounting Officer should assess efficiency, effectiveness, relevance and financial viability. Accountable to ensure that the annual review programme of the IDP, including the review of key performance indicators and performance targets is done for the consideration of Council Committees and the Executive Mayor. Formulate the annual performance improvement measures of the Municipality as part of the new municipal strategic or organisational scorecard. Review the performance of departments quarterly to improve the economy, efficiency and effectiveness of the Municipality. Receive performance reports quarterly from the internal auditor. Receive performance reports twice a year from the Performance Audit Committee. Receive monthly departmental performance reports. Report quarterly to the Executive Mayor on the performance of the City. Report on the implementation of improvement measures adopted by the Executive Mayor and Council. Report monthly, quarterly and annually to the Executive Mayor on the performance of Section 57 managers and departments. Submit the Annual Municipal Section 46 Report to the Executive Mayor. Evaluate the performance of Section 57 Managers quarterly and annually. Office of the Executive Mayor The Office of the Executive Mayor performs political oversight over the implementation of the budget and the IDP. Manage the performance of the City Manager and the MMCs in line with signed performance agreements. Conduct regular performance reviews at a political level. 85 P a g e

992 DEPARTMENT Corporate and Shared Services Group Audit and Risk Section 57 employees City of Tshwane departments, regions and entities Staff and employees Administrative Clusters 86 P a g e ROLES AND RESPONSIBILITIES Develop political performance reports on service delivery outputs and outcomes and impact to inform decision making, prioritisation and policy improvement. Propose response strategies to the Executive Committee or Council. Ensure that coaching sessions and individual performance reviews are conducted. Ensure the roll-out of the individual performance system to all levels of employees aligned to the organisational performance system Coordinate reporting against strategic, operational and project risk registers. Audit performance reports of the City. Conduct reviews of the effectiveness of the risk response strategies and any recommended corrective actions. Monitor the implementation of actions to mitigate those risks which are outside the agreed risk appetite of the Municipality. Assess the functionality, effectiveness and legal compliance of the PMS. Audit the PMS to ensure that measures are reliable and useful. Test alignment of the operational plans with the strategic plans of the City. Report on the implementation of improvement measures adopted by the Executive Mayor and Council. Report on the performance of their departments annually. Report monthly on progress. Service delivery implementation agents. Plan for, implement and monitor service delivery in the City of Tshwane. Report monthly, quarterly and annually on the implementation of approved plans. Ensure in-house monitoring and reporting as part of management functioning. Conduct individual coaching and reviews. Report on progress to section managers on achieving individual scorecard targets. Monitor and report on the performance of the departments within their clusters. Ensure performance improvements are implemented. Ensure clean audit outcomes are realised. Political Clusters Monitor financial and non-financial performance of departments, regions and entities against approved plans. Audit and Review organisations performance reports (quarterly and annual) on quarterly basis. Performance Committee (APC) Mayoral Committee Receive performance reports of the Municipality and its entities and make recommendations to Council. Instruct the organisation in relation to corrective actions required for performance improvement. Section 79 oversight Participate in the formulation of the annual review programme of the IDP, including the review of key performance indicators and performance targets. committees Receive reports from the departments, regions and entities on performance in their respective service areas. Perform oversight in terms of any reports referred to them by Council Council Monitor the performance of the organisation against approved plans. Accountable to the public regarding the performance of the Municipality and its entities. Ward committees, Receive performance reports on the Municipality s performance. councillors and Monitor service delivery performance in the wards against approved plans. stakeholder forums Provide feedback to the community on performance of the City.

993 DEPARTMENT ROLES AND RESPONSIBILITIES National and Provincial Spheres Monitor the Municipality in terms of its performance against its approved budget, IDP and SDBIP. of Government Receive specified reports from the Municipality against specific indicators. Boards of entities Monitor the performance of the entity against the approved plans and budget of the entity. Ensure that the entity has reported as required by the Municipality and legislation. Ensure clean audit outcomes and good governance of the Municipal entity. Organised labour Receive quarterly performance reports on employee under-performance in the Local Labour Forum. Report on any negative effects of the PMS on employees. Established performance structure to ensure clean audit outcomes (EG OPCA) Ensure that audit findings are tracked regularly, and that the organisation is implementing corrective measures to ensure clean audit outcomes. 3.13 PERFORMANCE EVALUATION 3.13.1 INTRODUCTION Evaluation is a periodic, in-depth analysis of (programme) performance. It relies on data generated through monitoring activities as well as information obtained from other sources (e.g. studies, research, in-depth interviews, focus group discussions and surveys), UNFPA 2004. The Government-wide M&E indicates that evaluation commonly aims to determine the relevance, efficiency, effectiveness, impact and sustainability of a programme or project. The outcomes-based approach to performance management requires that institutions develop indicators that will measure economy, efficiency, effectiveness and equity. These indicators are used to evaluate the overall performance of the City using data collected through these and other direct indicators (FMPPI 2007). These indicators are defined in the table below. Table 14: Definition of indicators (FMPPI 2007) Type of Definition indicator Economy Economy indicators measure cost effectiveness. They measure whether specific inputs are acquired at the lowest cost, at the right time; and whether the method of producing the outputs is economical. Efficiency Efficiency indicators measure productivity. They measure whether maximum services or products or outputs were delivered with the available inputs. An input-output ratio is used to measure efficiency. Effectiveness These indicators measure the extent to which the outputs of an institution achieve the desired outcomes. 87 P a g e

994 Type of Definition indicator Changes in effective indicators are only likely to take place over a period of years, so it is only necessary to evaluate the effectiveness of an institution every three to five years; or an institution may decide to evaluate the effectiveness of different programmes on a rolling three to five year schedule. Equity These indicators explore whether services are being provided impartially, fairly and equitably. Equity indicators reflect the extent to which an institution has achieved and been able to maintain an equitable supply of comparable outputs across demographic groups, regions, urban and rural areas, and so on. Often specific benefit-incidence studies will be needed to gather information on equity. The aim of such studies would be to answer the question: Who benefits from the outputs being delivered? Usually equity is measured against benchmark standards or on a comparative basis. Evaluation involves the assessment of whether the indicators, targets and activities of the City, departments, regions and entities have achieved the planned outcomes and outputs. The National Evaluation Policy Framework 2011 explains the purpose of evaluation as follows: To improve performance (evaluation for learning) To improve accountability To generate knowledge about what works and does not work To improve decision making For evaluation to succeed the plans of the City should identify good quality measurable indicators as listed above in performance planning. 88 P a g e

995 3.13.2 TYPES OF EVALUATIONS IN CITY OF TSHWANE The National Evaluation Policy Framework 2011 outlines six types of evaluations: diagnosis, design evaluation, implementation evaluation, impact evaluation, economic evaluation and evaluation synthesis, as illustrated in the diagram below. Figure 15: Types of evaluation (DPME 2011, 8) Various role-players are responsible for different levels of evaluation in terms of the plans they are monitoring. Going forward, evaluation in the City of Tshwane will include the following: Assessment of the municipal impact of policies Assessment of the spatial impact of budgets and service delivery. Evaluation of progress in relation to the long term and medium term plans Evaluation of the alignment of plans to strategic direction and long term plans Evaluation of measurability of targets and indicators as set out in plans Evaluation of the alignment of administrative and legislated plans to political and strategic priorities 89 P a g e

996 The table below illustrates the types of evaluations against different levels of plans in the City of Tshwane. Evaluations may be done at an administrative and political oversight level for any of the plans, however, it is important to note that evaluation is firstly not the domain of one particular party/stakeholder, and secondly should be part of performance planning, monitoring and reporting processes at all levels of the organisation. Political oversight may require a different type of evaluation to be done as compared to the evaluation done as part of management functions related to accounting on service delivery commitments. Table 15: Summary of types of evaluation to be conducted in Tshwane (Adapted from: DPME 2011) Type of evaluation Diagnostic evaluation Design evaluation Covers Timing Plans affected Responsibility This is preparatory research (often called ex-ante evaluation) It is done to ascertain the current situation prior planning. It identifies what is already known about the issues at hand, the problems and opportunities to be addressed, causes and consequence, including those that the intervention is unlikely to deliver, and so the likely effectiveness of different policy options. Used to analyse the theory of change, inner logic and consistency of the programme, either before a programme starts or during implementation, to see whether the theory of change appears to be working. This should be used for all new programmes. It should check whether the planned outputs will derive the needed outcomes and culminate in desired impacts. At key stages prior to design or re-planning. After an intervention has been designed, in the first year, and possibly later. Tshwane Vision 2055 IDP SDBIP DSDBIP/ Entity SDBIP/ Regional SDBIP Programme and project plans Operational plans Tshwane Vision 2055 IDP SDBIP DSDBIP/ Entity SDBIP/ Regional SDBIP Programme and project plans Operational plans Custodians of the various levels of plans must conduct diagnostic evaluations before planning, within the planning cycle. Political oversight may be done on organisational level strategic plans such as the IDP and the Tshwane Vision 2055 to assess whether the policy direction is in line with political priorities and the national agenda. Custodians of the various levels of plans must conduct diagnostic evaluations before planning, within the planning cycle. Political oversight may be done on organisational level strategic plans such as the IDP and the Tshwane Vision 2055 to assess whether the policy direction is in 90 P a g e

997 Type of evaluation Implementation evaluation Impact evaluation Economic evaluation Covers Timing Plans affected Responsibility It also assesses the quality of the indicators and the assumptions made towards achieving the programme/ plan. Evaluates whether an intervention s operational mechanisms support achievement or not and understand why. Looks at activities, outputs, and outcomes, use of resources and the causal links. It builds on existing monitoring systems, and is applied during programme operation to improve the efficiency and efficacy of operational processes. It also assesses the quality of the indicators and assumptions.. Seeks to measure changes in outcomes and the well-being of the target population that are attributable to a specific intervention. Its purpose is to inform highlevel officials on the extent to which an intervention should be continued or not, and if there are any potential modifications needed. This kind of evaluation is implemented on a case-bycase basis. Economic evaluation considers whether the costs of a policy or programme have been outweighed by the benefits. Types of economic evaluation include: Cost-effectiveness analysis (CEA), which values the costs of implementing and Once or several times during the intervention. Designed early on, baseline implemented early, impact checked at key stages, e.g. three or five years. Tshwane Vision 2055 IDP SDBIP DSDBIP/ Entity SDBIP/ Regional SDBIP Programme and project plans Operational plans Tshwane Vision 2055 IDP Long term spatial plan At any stage. Tshwane Vision 2055 IDP SDBIP DSDBIP/ Entity SDBIP/ Regional SDBIP Programme and project plans Operational plans line with political priorities and the national agenda. Custodians of the various levels of plans must conduct diagnostic evaluations before planning, within the planning cycle. Political oversight may be done on organisational level strategic plans such as the IDP and the Tshwane Vision 2055 to assess whether the policy direction is in line with political priorities and the national agenda. Custodian of Tshwane Vision 2055 Custodian of organisational performance management Political level oversight may also be done to test certain outcomes Custodians of the various levels of plans must conduct diagnostic evaluations before planning, within the planning cycle. Political oversight may be done on 91 P a g e

998 Type of evaluation Evaluation synthesis Covers Timing Plans affected Responsibility delivering the policy, and relates this amount to the total quantity of outcome generated, to produce a cost per unit of outcome estimate (e.g. cost per additional individual placed in employment); Cost-benefit analysis (CBA), which goes further than CEA in placing a monetary value on the changes in outcomes as well (e.g. the value of placing an additional individual in employment). Synthesising the results of a range of evaluations to generalise findings across the municipality and even government, e.g. a function such as supply chain, a sector, or a cross cutting issue such as capacity. After a number of evaluations are completed. Tshwane Vision 2055 IDP SDBIP DSDBIP/ Entity SDBIP/ Regional SDBIP Programme and project plans Operational plans organisational level strategic plans such as the IDP and the Tshwane Vision 2055 to assess whether the policy direction is in line with political priorities and the national agenda. Custodians of performance management Political oversight may conduct a similar exercise for politically focused evaluations 3.13.3 ALIGNMENT OF INDIVIDUAL AND ORGANISATIONAL EVALUATION Organisational level evaluations are done through the assessment and audit of the quarterly, and annual reports and the financial statements. Programme and project level evaluations may be done as well. The quarterly evaluation report of performance of section 57 employees, MMCs, top management and all employees is important. The evaluation of individual performance must be done in consideration of and in alignment to the evaluation of organisational performance.. It is important that the weighting and scoring systems used for individual and organisational performance are clearly defined in relation to each other. The table below explains current scoring of performance for individual and organisational performance evaluation.. A score of 100% (rating 3) reflects achievement of planned targets. However, further investigation and development is required in order to determine the rating to be applied to organisational performance evaluation and the rewards system to be implemented for exceptional organisational performance. 92 P a g e

999 Table 16: Rating and scoring system for performance review Rating Score Meaning Colour 5 150+ Outstanding performance (dark blue) 4 130-149 Performance significantly higher than expected (light blue) 3 100-129 Fully effective (green) 2 99-60 Not fully effective (yellow) 1 Below 60 Unacceptable performance (red) 4 CONCLUSION This section of the report has provided detailed recommendations with regard to the key elements of the Performance Management Framework for Tshwane, in particular to performance planning; and performance monitoring, and evaluation. The main principle guiding the framework was the institutionalisation of Tshwane Vision 2055. The next chapter identifies key initiatives and interim procedures to be implemented in order to address key aspects of the performance management framework. 93 P a g e

1000 PART E FOUNDATIONAL INITIATIVES TOWARDS IMPLEMENTING THE PERFORMANCE MANAGEMENT FRAMEWORK 94 P a g e

1001 PART E: FOUNDATIONAL INITIATIVES TOWARDS IMPLEMENTING THE PERFORMANCE MANAGEMENT FRAMEWORK 1 INTRODUCTION The previous chapter of the framework identified the core aspects of the performance management framework of the City. It must be noted that the implementation of the performance management framework is coupled with the increasing maturation of the organisation as Tshwane Vision 2055 is institutionalised. Therefore implementation of this framework will begin in part in FY 2014/15, which is however a transitional year, and therefore it is not expected that there will be full implementation of all requirements of the framework within 1 financial year, but that there will be demonstrable movement towards the full implementation of the framework. This section focuses on key success factors and foundational initiatives that require to be implemented in order to enable the institutionalisation of the framework. 2 FOUNDATIONAL INITIATIVES Theme: Organising the state and building the capacity of the state to deliver The foundational initiatives are identified to gear the municipality into a mode of organising itself and building its capacity to deliver, not only in terms of being able to manage performance, but to fundamentally build its capacity to implement service delivery, and therefore to perform. The table below summarises key initiatives to be implemented, before the next review of the performance management framework is undertaken. Each of these aspects is discussed in detail further in this section Table 17: Summary of key foundational initiatives Action required Description of action By when By whom Unpack Tshwane Vision 2055. Tshwane Vision 2055 should be unpacked into clear outcomes and outputs to be achieved for each decade of change. A matrix of indicators should be developed for all levels of plans aligned to Tshwane Vision 2055, and should include economy and efficiency indicators, and national and provincial KPIs. The process should start within 2014/15 financial year, with sufficient information in place for the first decade to prepare for the IDP 2016-2021. DCM of Strategy Development and Implementation or a delegated unit. 95 P a g e

1002 Action required Description of action By when By whom The unpacking should be aligned to various scenarios of future development. An effective model for budgeting aligned to the outcomes performance approach. Development of procedures and guidelines for the Performance Management System. Integrated electronic performance system. Mapping of business processes. Capacity building. Governance matters The mechanisms to monitor the contributions of external roleplayers and investors should also be defined. A model for budgeting should be developed that ensures that the outcomes set out in Tshwane Vision 2055 area funded and the priorities of the first decade are funded The following procedures must be developed: Performance planning Development of indicators, baselines and targets Programme and project planning Procedures on reporting Preparation of audit files and verification of evidence An integrated electronic performance management system should be implemented that enables performance management in Tshwane. Existing business processes for service delivery should be mapped in order to determine the baseline of service delivery processes. Thereafter, new processes should be determined to allow for efficient and economical service delivery. Development of materials for capacity building on performance management and the implementation of accredited and non-accredited interventions to build capacity of the Municipality to do performance management over time. Includes the development of project maturity. Clarification and resolution on the role and accounting lines of municipal entities, and on the full implementation of regionalisation model vis-a-vis departments. Processes should start within the 2014/15 financial year in preparation for the IDP and budget 2015/16 and the MTREF of 2016-2021 Development of procedures is to start during 2014/15 financial year and be implemented as per priority determined by the Mayoral Committee, and in line with available budgets and resources. To start implementation in 2014/15 financial year. To begin implementation on FY 2014/15 and to be completed for priorities determined by the Mayoral Committee in timelines determined by the Mayoral Committee Begin the development of training materials in 2014/15 financial year. Short term measures should be resolved within 2014/15 financial year, and this process should align to further discussions and engagements regarding future delivery models Chief Officer. Financial As determined by the City Manager. Group CIO. Corporate and Shared Services. City Strategies and Performance Management, Tshwane Leadership and Management Academy. City Manager. 96 P a g e

1003 2.1 CAPACITY OF THE MUNICIPALITY TO CONDUCT PERFORMANCE MANAGEMENT It is important to put in place measures to build the capacity of the municipality to understand, and conduct performance management. This will improve the capacity of the municipality towards the delivery of services, the planning and achievement of outcomes and qualitative outputs and the monitoring of service delivery. 2.1.1 BUILDING CAPACITY TO PARTICIPATE IN PERFORMANCE MANAGEMENT The following initiatives led by the custodians of organisational performance management will be systematically implemented as from the FY2014/15 over the next few years, to sustainably over time build the capacity of the organisation to implement performance management. Structured capacity building which would include the development of training materials and the delivery of dedicated training on all key aspects of performance management, including planning, monitoring, reporting, auditing, project management and risk management. Ad-hoc mentoring and support to departments, regions and entities including workshops and short term discourses Embedding knowledge of the performance management framework in the organisation. It is important to note that performance management is a key aspect of all management functions be they at a strategic or operational level. It is therefore imperative that all employees existing and new undergo levels of performance management training related to their responsibilities. 2.1.2 STANDARD OPERATING PROCEDURES TO OPERATIONALISE KEY ASPECTS OF PERFORMANCE MANAGEMENT A number of the areas identified in the framework will need detailed operating procedures to improve performance management. The detailed operating procedures were not developed within this framework, to allow for changes to the operating procedures when circumstances require, as long as they comply with the broad principles and quality criteria outlined in the framework. The specific operating procedures and guidelines should include the following, and should begin to be developed from FY 2014/15 for priority areas identified by the accounting officer and decision makers. Strategic planning procedures and guidelines Guidelines and procedures for development of SDBIPs Development of SMART indicators Procedures and guidelines for evidence collation and storage Project planning, monitoring and reporting Due to urgency, interim procedures ensure sound reporting are attached as an appendix to this framework. These will be reviewed when new procedures are defined. 97 P a g e

1004 2.1.3 INTEGRATED ELECTRONIC PERFORMANCE MANAGEMENT SYSTEM Development and implementation of an integrated electronic performance management system to enable integrated planning, reporting and storage of information is a priority. The system must allow for the planning of projects and programmes and their management, prioritisation, reporting on all operational areas, cascading of performance information and the storage of supporting key documents for audit purposes, among other functionality determined by stakeholders of organisational performance management. Capacity should be built within the municipality for the use and maintenance of such an integrated system, and there should be flexibility to allow for the changing needs of the organisation with regard to performance management to be addressed over time In consideration of such systems/ a system, the municipality should consider the service delivery model/s that will be implemented over the next four decades of change to achieve the outcomes of Tshwane Vision 2055. 2.2 ORGANISING THE MUNICIPALITY TO PERFORM AND DELIVER 2.2.1 DETERMINATION OF A SERVICE DELIVERY MODEL/ SERVICE DELIVERY MODELS Tshwane Vision 2055 indicates that innovative governance solutions will be sought to achieve planning outcomes. It is important to investigate and determine the models of service delivery that will be utilised over the next 4 decades broken down by decade. The role of the private sector and institutions external to the municipality must also be investigated, dialogued on and agreed to in relation to innovative service delivery models. This is especially in relation to the agreement of stakeholders that Tshwane Vision 2055 is more than a municipal plan, and is a plan for re-making Tshwane and remaking the Capital City of the country. A long term human resources plan should be developed to ensure the achievement of Tshwane Vision 2055. The plan should align to the four decades of change and show among others: Skills and competencies required per decade to achieve the specific programmes and outcomes for each decade Recruitment, skills retention and skills development plans to achieve required competencies Mechanisms to entrench the culture of performance management in new employees The review of individual performance policies and alignment of the performance scoring, reward and incentives system to the HR plan and performance management framework Assessment of the current organisational structure and competencies to achieve Tshwane Vision 2055 as it is unpacked for the next four decades. Innovative solutions that address the reasons for current delays in project implementation must also be sought, including how supply chain management processes will continue to comply with legislative requirements but ensure capability to deliver. The following structural and governance issues must be resolved including: 98 P a g e

1005 Definition of the role of internal and external Research and Innovation to support the components of performance management Regionalisation should be further clarified, and clear mechanisms put on place to resolve the role of regions in terms of the four decades of change and the outcomes unpacked in terms of Tshwane Vision 2055. As a short term measure, the hand-over of controls and the controlled handover of new functions should be addressed, in order to address important AOPO related matters. Clarifying the roles of each entity in driving the development agenda of the municipality over the next four decades, identifying engagement mechanisms and communication lines that correspond with innovative governance. 2.2.2 Efficient and productive business processes Current service delivery processes must be mapped in order to identify bottlenecks to service delivery, and areas for potential improvement. Thereafter processes and standard operating procedures should be redesigned to improve efficiency, economy and productivity, to achieve service delivery outputs committed to in the SDBIPs and IDP and the outcomes of Tshwane Vision 2055.. 2.2.3 PARTICIPATORY PROCESSES Participatory processes for all aspects of performance management, and service delivery require to be defined. Over time, it should be clear how external role-players will participate in the planning, budgeting, reporting and evaluation processes of the municipality. The process of developing Tshwane Vision 2055 was participatory and wide-spread. Stakeholders have owned the vision. It is important that the ownership of the vision is continued and strengthened over the next four decades, to ensure that the Tshwane Vision 2055 does not reduce to becoming only a municipal plan. 2.2.4 CAPACITY TO DELIVER Unpack Tshwane Vision 2055 into a clear matrix of indicators and targets for the four decades of change, with a hierarchy of indicators and targets to be realised through sequential IDPs and SDBIPs. This should be accompanied by a long term spatial framework broken down by decade, to show the spatial transformation agenda and plan of the City. Programme and project management maturity must be assessed and mechanisms put in place to improve maturity levels. Funding and resourcing mechanisms and models should be determined, to align internal budgeting processes to the achievement of planned outputs and outcomes. Efficiency and economy measures must be employed with regard to determination of budget allocation to service delivery outputs. This requires the application of bestpractice methodologies to project and programme costing processes. 99 P a g e

1006 3 CONCLUSION The purpose of this section was to identify certain key initiatives and actions that should be implemented in order to ensure effective implementation of the Performance Management Framework and to institutionalise Tshwane Vision 2055. Further actions may be identified, however, this section sets out minimum requirements. It is recommended that these initiatives be considered foundational towards institutionalising Tshwane Vision 2055 through the performance management system, and towards building the capacity of Tshwane to contribute towards innovative governance outcomes and the objective of a achieving a developmental state. 100 P a g e

1007 APPENDIX A: INTERIM PROCEDURES RELATED TO REPORTING 1 PURPOSE To inform senior management of organisational performance reporting requirements and protocols, specifically in relation to the following: The SDBIP (consisting of the Corporate SDBIP and Regional SDBIP scorecards and Capital Projects), Departmental and Entity Business Plans, The IDP (consisting of the City Scorecard and the 7 Regional IDP scorecards); and The 180 day and 18 month programme 2 SDBIP REPORTING REQUIREMENTS 2.1 All departments and entities must report on their Corporate SDBIP indicators and targets on monthly, and ensure that the quarterly results are finalised by the reporting date. 2.2 All department and entities must report on the customized narrative (Circular1 report) by the reporting date. Each department and entity has its own template. 2.3 The Service Delivery Coordinator must ensure that reporting on regional IDP scorecards is coordinated with the 7 regions, as these results will roll-up to the Regional SDBIP scorecard. The regional SDBIP scorecard must be extracted by the Service Delivery Coordinator, attached to the circular 1 report and signed off (each page). Only 1 consolidated circular 1 report will be accepted from the cluster. 2.4 The report must be signed by the relevant senior managers. A signed copy and a soft copy (word) must be submitted to Organisational Performance Management each quarter. Unsigned reports will not be accepted. 2.5 All monthly capital projects milestones submitted to the City Strategies division have been captured on QPR. 2.6 Departments and entities must ensure that you report monthly against your project milestones on QPR 2.5 Evidence must be submitted of all claimed performance. 3 IDP REPORTING REQUIREMENTS 3.1 Departments or entities that have particular targets on the IDP city scorecard that are not influenced or rolled up from the SDBIP, must keep track of when they should be reported on, and ensure that they are reported on directly. An example of this would be the % employee satisfaction rate which must be reported directly by CSS by the 4 th quarter once the survey is completed. 3.2 Evidence must be submitted of claimed performance. 101 P a g e

1008 4. REPORTING ON DEPARTMENTAL AND ENTITY BUSINESS PLANS 4.1 Approved business plans have been captured on QPR. 4.2 Departments and entities must report on business plan targets monthly and ensure that quarterly results are finalised by the reporting date. 4.3 The circular 1 report requires a summary of business plan (departmental SDBIP) performance. 5. REPORTING ON THE 180 DAYS AND 18 MONTHS PROGRAMME 5.1 All programme owners who submitted required monthly milestones will find that their milestones have been captured on QPR. 5.2 All officials confirmed by departments to have access to QPR have been access to report on the 180 days and 18 months programme. 5.3 The programme owners / departments/ entities who have deliverables as per the 180 days and 18 months programme must report monthly against planned milestones. 5.4 Please report your actual achievement, and also report on the ward you have completed your deliverable in. 5.5 You are required to summarise key information on your 180 days and 18 month progress in the circular 1 report. 5.6 Evidence must be submitted of claimed performance. 5.7 The Service Delivery Coordinator must coordinate reporting on programmes driven by the regions. Consolidated and quality assured information must be reported. 6 REPORTING DATES 6.1 SDBIP reporting consisting of reporting against project milestones and scorecard targets are due each month on the 2 nd of the month. 6.2 Departments and entities may correct and confirm previous months reporting within a quarter by the 2 nd of the month after the end of the quarter. At the end of the quarter the QPR system will be closed for a few days to allow for audit processes to unfold, and will not be opened for any updates or corrections. 102 P a g e

1009 6.3 The circular 1 reports (1 per department or entity) are due at the end of each quarter by the 2 nd of the month. Please note that the date will not be changed regardless of whether this is a weekend or a public holiday, unless you are advised specifically in this regard. 6.4 The detailed reporting on the 180 days and 18 months programme is required monthly on QPR by the 3rd of each month. Please note that no extensions will be granted and the reported information will be immediately extracted for submission to mayoral clusters and REPCO. 7 RELIABILITY OF REPORTING 7.1 Evidence files are required quarterly (for everything excluding the 180 days and 18 month programme) from each department, entity and from the Service Delivery Coordinator. 7.2 Evidence files for the 180 days and 18 months programme must be submitted monthly. 7.3 Evidence files must contain the following: A contents page A declaration by the relevant SEH/SED/CEO/ DCM confirming you have quality assured your report, have checked your listing and agree that the submission is correct and complete. A listing indicating per indicator what is contained in the file (please refer to the AGSA criteria regarding listings). This listing must also be submitted in soft copy (excel format) to OPM. Detailed evidence supporting your listings. Dated photos must support projects progress Proof of corrective measures for non-achieved targets/ milestones 7.4 Evidence files that do not meet any of the above criteria will be returned to the sender, and information reported by the department/ region/ entity will be treated as not achieved and elevated as such to key decision makers. 7.5 During the audit process, no additional evidence should be submitted directly to internal audit. 7.6 Internal audit is to submit detailed working papers with a monthly breakdown of audited results to CSPM together with its variation report. 7.7 Evidence files must be submitted by the 2 nd. If the 2 nd falls on a weekend, the files are required on the first working day after the weekend. 8 AOPO matters Departments are to please note and act on communication regarding the audit of FY 2013/14. Departments who receive formal findings, must prepare detailed memos to the City Manager explaining the findings. It is important that SEDs and DCMs participate actively in the audit process. Departments are requested to immediately send a 103 P a g e

1010 correspondence directly to Organisational Performance when there is an acting SED so that we can engage the AGSA accordingly. Such correspondence should also indicate the period for which the SED is acting. 9 CONCLUSION Departments, Regions and Entities must please note that in order to ensure a clean audit outcome, reporting requirements may be amended over time, and should ensure that at all times all requirements are adhered to. Non-compliance will be elevated on a regular basis. DCM technical clusters are requested in this regard to invite Organisational Performance Management to cluster meetings scheduled 1 month after the reporting date (therefore for Q1 it should be in November) to make a presentation on the cluster. Queries may be made electronically to the Executive Director of Organisational Performance Management. No communication sent directly to any subordinate related to changes to information, or loading of late information on QPR will be considered. Any changes to targets and indicators on any level of plan will only be captured on QPR once the plans have been coordinated with the ED: City Strategies and approved by the relevant authority (e.g. a change to the business plan must be approved by MAYCO). 104 P a g e

1011 BIBLIOGRAPHY ARTICLES, CIRCULARS, POLICIES ANC, 2012, The second transition? Building a national democratic society and the balance of forces in 2012. Presidency, (date unknown), Green paper: The Place of State Owned Entities in a Developmental State Murray, A., 2010, Using Prince 2 and MSP together, Office of Government Commerce. Bureau of the Budget and Management Research, Outcomes Budgeting: various articles, www.bbmr.baltimore city.gov City of Cape Town, 2011, Performance Management Framework, City of Cape Town Municipality. City of Ekurhuleni, 2008, Performance Management System for Ekurhuleni Metropolitan Municipality, City of Ekurhuleni Municipality. City of EThekwini, 2008, Performance Management System Framework, City of EThekwini Municipality. City of Johannesburg, 2009, Group Performance Management Framework, City of Johannesburg. City of Tshwane, 2010, Performance Management Framework and Procedural Manual, City of Tshwane Municipality. City of Tshwane, 2011, Re-submission of Tshwane Performance Management Policies, City of Tshwane. Department of Provincial and Local Government, 2001, Performance Management Guide for Municipalities, Department of Provincial and Local Government. Harvard Business Review, various articles on www.hbr.org National Treasury, 2009, Internal Audit Framework, National Treasury. National Treasury, 2012, MFMA circular 63 Annual Report update, National Treasury website. National Treasury, 2005, MFMA circular 13 Service Delivery and Budget Implementation Plan, National Treasury website. National Treasury, 2006, MFMA circular 32 The Oversight Report, National Treasury website. BOOKS AND BOOKLETS Auditor General of South Africa, Your Pocket Guide to the Audit of Predetermined Objective, AGSA, Pretoria. City of Tshwane, 2013, Tshwane Vision 2055: Remaking South Africa s Capital City, City of Tshwane, Pretoria. 105 P a g e

1012 Department of Local Government Gauteng, 2005, Local Government Monitoring and Evaluation Framework, Gauteng Provincial Government, Johannesburg. National Treasury, 2007, Framework for Managing Programme Performance Information, National Treasury, Pretoria. National Treasury, 2011, Performance Information Handbook, National Treasury, Pretoria. UNFPA, 2004, Programme Managers Planning Monitoring and Evaluation Toolkit, UNFPA, New York. Presidency, 2010, Guide to Outcomes Approach, The Presidency, Pretoria. Presidency, 2009, Improving Government Performance: Our Approach, The Presidency, Pretoria. Presidency, 2010, Measurable Performance and Accountable Delivery: Outputs and Measures, The Presidency, Pretoria. Public Service Commission, 2008, Basic Concepts in Monitoring and Evaluation, Public Service Commission, Pretoria. Presidency, 2007, Policy Framework for the Government-wide Monitoring and Evaluation System, The Presidency, Pretoria. Presidency, 2011, National Evaluation Policy Framework, The Presidency, Pretoria. Statistics South Africa, 2008, South African Statistical Quality Assessment Framework, Statistics South Africa, Pretoria. LEGISLATION AND REGULATIONS Constitution of the Republic of South Africa, 1996 Local Government Municipal Planning and Performance Management Regulations, 2001 Local Government Municipal Planning and Performance Regulations for Municipal Managers and Managers directly accountable to Municipal Managers, 2006 Local Government Municipal Budgeting and Reporting Regulations, 2008 Municipal Systems Act, 2000 (Act 32 of 2000) Municipal Structures Act, 1998 (Act 117 of 1998) Municipal Finance Management Act, 2003 (Act 56 0f 2003) Spatial Planning and Land Use Management Act, 2013 (Act 16 of 2013) 106 P a g e