CAPACITY DEVELOPMENT STRATEGY

FOR

PUBLIC FINANCIAL MANAGEMENT:

PSETA Skills Colloquium.

ACHIEVING EXCELLENCE IN THE MANAGEMENT OF PUBLIC FUNDS

Presenters: James Motha ! Director ETD , Capacity Building ! 27 March 2015

CONTENT

• Development Process

• Research

• Mandate

• Scope

• Capacity Development Strategy

• Progress

• Way Forward

2

DEVELOPMENT PROCESS

• Research

• Team of experts

• Reference Group

• Extensive consultation

RESEARCH

• Vacancies, movement and turnover

• Capacity development

• Stakeholders (stakeholder analysis)

• Legislative analysis

• Education, training and development (ETD) supply

4

PROBLEM INDICATORS

• Poor financial management performance (AG results)

• Low levels of financial management maturity (FMCMM results)

• Vacancy rate of 34% (private sector rate is 3.7%)

• Staff turnover rate of 13 months

• Attraction and retention remains a challenge

• Inconsistent job descriptions, grading and requirements

• Organisational structures vary per province and/or department

• Uncoordinated capacity development interventions

• ETD solutions are not aligned to public sector needs

• Limited professionalisation

• Limited career-pathing and career progression

• Limited pool of talent (national shortage of scarce skills)

MANDATE

• Constitution:

S216 – National legislation must establish a national treasury and

prescribe measures to ensure both transparency and expenditure control

in each sphere of government, by introducing-

(a) generally recognised accounting practice;

(b) uniform expenditure classifications; and

(c) uniform treasury norms and standards.

6

MANDATE – NATIONAL TREASURY

• Public Finance Management Act (PFMA):

– ‘must prescribe uniform treasury norms and standards’ [Section 6 (2)

(a)]

– ‘must enforce this Act and any prescribed norms and standards’

[Section 6 (2) (b)]

– ‘may assist departments and constitutional institutions in building

their capacity for efficient, effective and transparent financial

management’ [Section 6 (2) (d)]

– ‘may do anything further that is necessary to fulfil its responsibilities

effectively’ [Section 6 (2) (g)]

7

MANDATE - LOCAL GOVERNMENT

• “The national government and provincial governments, by legislative and

other measures, must support and strengthen the capacity of

municipalities to manage their own affairs, to exercise their powers and

to perform their functions” [Constitution Ch 13 (154)(1)]

• “Each provincial government must establish municipalities ... and

promote the development of local government capacity to enable

municipalities to perform their functions and manage their own affairs”

[Constitution Ch 13 (155)(6&6b)]

8

MANDATE – CONTINUED

• National Treasury mandate as per the MFMA:

– The national and provincial governments must by agreement assist

municipalities in building the capacity of municipalities for efficient,

effective and transparent financial management (S34 (1))

– The accounting officer, senior managers, the chief financial officer

and other financial officials of a municipality must meet the prescribed

financial management competency levels (S83 (1))

– The accounting officer, senior managers, any chief financial officer

and all other financial officials of a municipal entity must meet the

prescribed financial management competency levels (S107 (1))

– The accounting officer and all other officials of a municipality or

municipal entity involved in the implementation of the supply chain

management policy of the municipality or municipal entity must meet

the prescribed competency levels (S119 (1))

9

SCOPE

• Current Scope:

– Local, Provincial and National Government

– Functions within the Office of the CFO

– Internal Audit

– Risk Management

• Extended Scope:

– Financial Management (core transversal competency)

– Governance

– Public Entities

10

PROCESS

• Research:

– Diagnosis (current state of PFM)

– Capacity development good practice

• Reference Group

• Develop Conceptual Framework

• Consultation on Conceptual Framework:

– Provincial Accountant-Generals

– Chief Financial Officers

– Public Sector Expert Practitioner Committees

– Forum (CAE, CRO and HRM&D)

– Key Stakeholders (NT, PALAMA, DPSA)

11

PROCESS - CONTINUED

• Draft Capacity Development Strategy (CDS)

– Research Summary

– Problem Statements

– Strategic Objectives

– Key Performance Indicators

– Key Activities (prioritisation)

• Consultation on Draft CDS:

– Provincial Accountant-Generals

– Chief Financial Officers

– Public Sector Expert Practitioner Committees

– Forum (CAE, CRO and HRM&D)

– Key Stakeholders (NT, PALAMA, DPSA)

• Process Revisions

12

PROCESS - WAY FORWARD

• Final CDS

• FOSAD endorsement

• Cabinet endorsement

• Consult with External Stakeholders (PBs, HEIs, SPs)

• Source Funding:

– Bridging from multiple donors (2011/12)

– Stand alone (2012-17)

– General budget support (2013-2018)

13

TIMELINE

Jan – June 2010

6 months

Research

July – Dec 2010

6 months

Conceptualisation

& Consultation

Jan – June 2011

6 months

Draft Strategy &

Consultation

July – Sept 2011

3 months

Final Consultation

Jan – May 2012

5 months

Local Govt.

Inclusion

14

KEY CONSIDERATIONS

• Risk – rejection due to political factors

– LG solution will require extensive consultation & buy in

– Elections & new Government led intervention

• Role Players:

– DPSA and PALAMA

– COGTA and SALGA

• Governance Arrangements:

– Accounting Officer, MEC, SCOPA and Parliament

– Municipal Manager, Municipal Council, Premier, PT, NT and

Oversight

• Legislation:

– PFMA, Treasury Regulations

– MFMA, Municipal Systems & Structures Act

• Centralised IT Systems (BAS & Persal)15

CAPACITY DEVELOPMENT STRATEGY

PRINCIPLES

• Practical

• Developmental

• Sustainable

• Flexible

• Engaging

• Holistic

• Addressing government priorities

17

STRATEGIC OBJECTIVES

• To support the development of an enabling environment

• To enhance organisational capacity

• To develop and empower a corps of competent and committed

employees

• To create an environment that enables and sustains mutually beneficial

stakeholder relationships

INTEGRATED CAPACITY DEVELOPMENT

FRAMEWORK

19

STRATEGY DESIGN

20

PROBLEM STATEMENTS

21

STRATEGIC OBJECTIVES

22

THE LINK – SO’s & PS’s

23

CAPACITY DEVELOPMENT APPROACH

• Short, medium and long-term solutions

• A phased approach to developing capacity (FMCMM)

• Integration with existing and new systems, structures and practices

• Versatile approach to the provision of ETD solutions

VERSATILE APPROACH TO ETD

25

LEVERS FOR CHANGE

INTEGRATED CAPACITY DEVELOPMENT

FRAMEWORK

27

STRATEGY DESIGN

28

29

STRATEGIC LEVERS

• Champions of Change

• Management and Leadership Capability

• Team/Group Level Transformation

• Fast track Professionalisation of Senior Management

• Diagnosis as a Powerful Mechanism

• Knowledge and Information Management

STRATEGY DESIGN

31

KEY ACTIVITIES – SO1

Support the development of an enabling environment

• KA 1.1 Support departments through the provision of PFM related

policy, norms, standards, frameworks & guidelines

• KA 1.2 Support departments through the provision of organisational

& HRM related policy, norms, standards, frameworks &

guidelines

• KA 1.3 Create, support & maintain Knowledge & Information

Sharing platforms, mechanisms & systems

• KA 1.4 Professionalise FM, IA & ERM

• KA 1.5 Establish & maintain relevant governance structures

• KA 1.6 Standardise & regulate job profiles

• KA 1.7 Develop & implement a Competency Framework

KEY ACTIVITIES – SO1 (cont.)

Support the development of an enabling environment

• KA 1.8 Develop & implement an Integrated Learning Matrix

• KA 1.9 Develop occupational qualifications

• KA 1.10 Coordinate, influence & develop formal ETD programs

33

KEY ACTIVITIES – SO2

Develop and enhance organisational capacity

• KA 2.1 Evaluate and refine PFM Systems

• KA 2.2 Identify & implement good practices

• KA 2.3 Provide support on Organisational Design

• KA 2.4 NT to provide integrated & coordinated support to dept’s

• KA 2.5 PTs to provide integrated & coordinated support to dept’s

• KA 2.6 Provide workplace-based technical advisory support

• KA 2.7 Institutionalise HR Connect

• KA 2.8 Institutionalise the FMCMM

• KA 2.9 Support the institutionalisation of a learning culture

• KA 2.10 Support the implementation of the PMDS

KEY ACTIVITIES – SO2 (cont.)

Develop and enhance organisational capacity

• KA 2.11 Develop a Transformational Change Leadership &

Management programme

• KA 2.12 Develop mechanisms to match people to posts, placing

and/or re-skilling

35

KEY ACTIVITIES – SO3

Develop & empower a sustainable corps of competent & committed

employees

• KA 3.1 Support the implementation of Informal Learning

• KA 3.2 Support the implementation of Non-formal Learning

• KA 3.3 Support the implementation of formal ETD programmes

• KA 3.4 Establish learning networks

• KA 3.5 Develop & implement On-Boarding programmes

• KA 3.6 Develop & implement an Employee Engagement Prog

• KA 3.7 Develop Career Paths

• KA 3.8 Talent Retention

• KA 3.9 Implement Succession Planning

• KA 3.10 Develop & implement a Talent Pipeline

• KA 3.11 Develop mechanisms to attract candidate employees

• KA 3.12 Develop mechanisms to assess candidate employees

KEY ACTIVITIES – SO4

Develop an environment that enables & sustains mutually beneficial

stakeholder relationships

• KA 4.1 Develop & manage the Stakeholder Relationship

Management Plan

• KA 4.2 Develop & implement an ETD Delivery Plan

CAPACITY DEVELOPMENT PROGRESS

Competency Framework for Financial Management

(CFFM)

CAPACITY DEVELOPMENT PROGRESS

Technical Competency

Dictionaries (TCDs)

• Management Accounting

• Financial Accounting

• Revenue Management

• Expenditure Management

• Asset Management

• Supply Chain Management

• Internal Control

• Enterprise Risk Management

• Internal Audit

Integrated Learning Matrix

(ILM)

Key Activities:• HR Connect (PFM Skills Assessment Tool)

• Public Sector Expert Practice

Committees (PSEPC)

• Quality Council for Trades and

Occupations (QCTO)

• ETD Programme Development (courses,

qualifications, learnerships, etc.)

• Job standardisation

• Professionalisation

• Knowledge & Information Management

• Learning Networks

• Organisational Functional Structures

• Change Management Programme

• Monitoring & Evaluation

• Integrated Strategic Support Plans

Generic Core and

Behavioural Skills

Dictionaries

Research

Educational Qualifications

Matrix

Training & Development

Programme Matrix

1

CHANGE MANAGEMENT

CHAMPIONS OF CHANGE

A NEW CULTURE

MOBILISE RESOURCES TO ACHIEVE

CHANGE ACROSS INDIVIDUAL,

ORGANISATIONAL, INSTITUTIONAL

AND STAKEHOLDER DIMENSIONS

1

MONITORING AND EVALUATION

Monitoring and evaluation

measures the performance and

impact of the strategy’s

implementation. It will serve as

an early warning system.

1

STRATEGIC FOCUS AREAS

• Develop a significant

number of champions

of change

• Champions will lead

transformation in

teams, groups and

departments

• They must own,

design, direct,

implement and sustain

change in their areas of

influence

• Champions will have

theoretical and practical

PFM knowledge

• Effective leadership

and management of

people, change and

organisational

development

• Empower

management and

leverage performance

to achieve a constantly

improving and learning

organisation

• Transform individuals,

teams and groups for

“small-wins” to be

replicated elsewhere

• Create self-directing,

high-performing teams

to propel change

throughout organisation

•A lifelong learning

process that develops

competence,

knowledge,

understanding,

attitudes, behaviours,

and ethical standards

• Develop PFM

management

professionals to lead

knowledge production,

innovation, research

and good practice

• Professionalising

senior management will

run alongside other

processes to

professionalise all

government PFM

officials

• Identify root causes of

PFM capacity

development

challenges

• Implement successful

organisational

development solutions

that are informed,

strategic and

sustainable

•Diagnostic results will

provide a baseline to

monitor and evaluate

progress

• Improve ability to

capture, share and

diffuse knowledge to

enhance performance

•Leverage financial

management

knowledge to improve

service delivery

• Create a national

knowledge and

information

management system to

provide a centralised

repository of all PFM-

related knowledge

STRATEGIC FOCUS AREAS

CHAMPIONS OF

CHANGE

MANAGEMENT AND

LEADERSHIP

CAPABILITY

GROUP/TEM LEVEL

TRANSFORMATIONPROFESSIONALISATION DIAGNOSIS

KNOWLEDGE AND

INFORMATION

MANAGAMENT

1

ENVIRONMENT

The strategy takes account of the

broad external environment, including

the international and domestic

economic climate, political

dispensation, social norms,

technological developments and

general legislative frameworks

1

CAPACITY DEVELOPMENT STRATEGY

INSTITUTIONAL ORGANISATIONAL INDIVIDUAL STAKEHOLDER

CHAMPIONS OF

CHANGE

MANAGEMENT &

LEADERSHIP

CAPABILITY

GROUP/TEAM

TRANSFORMATIONPROFESSIONALISATION

DIAGNOSIS AS

POWERFUL

MECHANISM

KNOWLEDGE &

INFORMATION

MANAGEMENT

CHANGE MANAGEMENT

ENABLING ENVIRONMENTORGANISATIONAL

CAPACITY

COMPETENT & COMMITTED

EMPLOYEES

STAKEHOLDER

RELATIONSHIPS

CAPACITY DEVELOPMENT PILLARS

MONITORING & EVALUATION

STRATEGIC FOCUS AREAS

STRATEGIC OBJECTIVES

EN

VIR

ON

ME

NT

VISION Achieve and sustain excellence in the management of public funds

QUESTIONS AND ANSWERS:

(Q&As)

45

THANK YOU