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Outcomes of the latest local government audit a predictable surprise

02 September 2024 Photo Supplied

Opinion article by Dr Harlan Cloete, Centre for Gender and Africa Studies, University of the Free State.

In the 2022-2023 Local Government Audit, the Auditor-General (AG) notes inadequate skills and capacity, a culture of no accountability and consequence, together with governance failures, as the main weaknesses impeding progress in municipalities. But this is not new, we have heard this before. A predictable surprise, argues Michael Watkins, Canadian-born author of books on leadership and negotiation, arises out of failures of recognition, prioritisation, or mobilisation – when leaders inevitably had all the information about an imminent disaster but failed to act.

In April 2024 the University of the Free State (UFS) handed over a report commissioned by the Local Government Sector Education and Training Authority (LGSeta) titled: “An evidence based human resource development (HRD) assessment to measure and manage its implementation in South African municipalities”.

HRD not effectively measured and managed

This was not smooth sailing, and it was a mission to convince municipalities to participate, as expressed by one official. “Good morning Dr Cloete. I am glad that you are finding a breakthrough elsewhere. Unfortunately, where I am, politics and laziness have been the biggest stumbling blocks. I have even tried to convince them to invite you to our next steering committee meeting and I was told to wait. It just shows these people do not care about improving and changing the status quo through this collaboration. I am just sad.”

Drawing from the responses of a research sample of 572 participants (managers, non-managers and HRD professionals) in 17 municipalities across five provinces, the report concluded that HRD is not being effectively measured and managed, despite a 26-year-old enabling policy framework (Skills Development Act, 1998 and the Employment Equity Act, 1998). The evidence points to a lack of understanding, application and integration of evidenced-based HRD, which if addressed, would increase municipal capability.

Ethical values are poorly practised, evident in the lack of managerial commitment to equal opportunities for the development of people. People development is not a priority and performance management is not taken seriously. The competencies and contributions of staff to service delivery are not fully recognised. The implementation of HRD policies is poor and employees lack insight into these policies. They stand in isolation and fail to connect with the Integrated Development Plan (strategy) and internal transformation (employment equity and performance management).

Because skills development audits are poorly conducted, HRD interventions are not undertaken in line with employee development plans. The municipalities do not apply a variety of approaches, such as formal and informal development, and employees are not presented with sufficient opportunities to practise new competencies and post-skills development interventions. Recognition of prior learning is poorly implemented.

HRD in municipalities

The organisation of HRD in municipalities is problematic and line managers are not equipped to manage the implementation of projects. HRD outputs are not included in the key performance areas for line managers and interventions are not monitored by the department managers. Line managers, HRD professionals and non-managers are also not collaborating effectively to achieve the objectives.

Councillors and shop stewards (key internal stakeholders) do not understand their roles and responsibilities and senior managers are not supportive of HRD programmes for employees. This, despite people management being identified as a key competency for senior managers. The LGSeta, the South African Local Government Association (Salga) and the Department of Cooperative Governance (DCoG) and Department of Traditional Affairs (DTA) (Cogta) could be collaborating better, as the evidence suggests, but are not doing it.

Employees are not aware of the potential impact of the municipal staff regulations on municipalities. The Municipal Staff Regulations (2021) place municipalities on a new trajectory with a renewed emphasis on increasing organisational capabilities through linking organisational structure and strategy and focusing on performance and development. In the process potential new organisational capabilities and knowledge that could benefit the municipalities are developed but not applied. There is also a glaring absence or awareness of change-management plans.

Recommendations

From the research findings it is further concluded that key indicators in support of knowledge management are not implemented effectively. More than half the participants indicated that they do not know about knowledge management, indicating a clear lack of communication. The performance and development system is not being implemented effectively and data analytics are not used to inform HRD decisions. It is also not known among the research participants whether HRD systems integrate with existing municipal ICT systems. What is more worrying is that the work skills plan evaluation report is the only tool used by the LGSeta to evaluate municipal HRD performance (capability) and is not applied consistently across the provinces.

Our report made a number of recommendations. One being that the LGSeta, as the authority on HRD, should align with the office of the AG through auditing the management performance of HRD in municipalities. Evidenced-based HRD practices provide municipalities with an institutional model to ensure that the performance of managers is included as part of material irregularities reporting (Public Audit Act). An increase in HRD management controls will ensure solutions to the many challenges (financial and human resources) facing local government. Human resources (people) are the most important strategic resources in municipalities and their effective management will foster trust and increase municipal implementation capabilities. This will place local government on a completely new trajectory with effective and efficient management of human resource development and knowledge at the centre of the transformation efforts of local government. This will contribute to Sustainable Development Goal 16 (strong institutions) and hasten the professionalisation of local government as advocated by Salga and the office of the AG. The AG concludes that municipalities should strive for a culture of performance, accountability, transparency and institutional integrity, which will ultimately result in a better life for our people. We agree with the AG. The UFS, as a knowledge partner to local government, is committed to not just produce knowledge for understanding, but for action. If we are to turn around the fortunes of local government then we must act on the recommendations. Phantsi politics and laziness! No more predictable surprises.

News Archive

Inaugural lecture: Prof. Phillipe Burger

2007-11-26

Attending the lecture were, from the left: Prof. Tienie Crous (Dean of the Faculty of Economic and Management Sciences at the UFS), Prof. Phillipe Burger (Departmental Chairperson of the Department of Economics at the UFS), and Prof. Frederick Fourie (Rector and Vice-Chancellor of the UFS).
Photo: Stephen Collet

A summary of an inaugural lecture presented by Prof. Phillipe Burger on the topic: “The ups and downs of the South African Economy: Rough seas or smooth sailing?”

South African business cycle shows reduction in volatility

Better monetary policy and improvements in the financial sector that place less liquidity constraints on individuals is one of the main reasons for the reduction in the volatility of the South African economy. The improvement in access to the financial sector also enables individuals to manage their debt better.

These are some of the findings in an analysis on the volatility of the South African business cycle done by Prof. Philippe Burger, Departmental Chairperson of the University of the Free State’s (UFS) Department of Economics.

Prof. Burger delivered his inaugural lecture last night (22 November 2007) on the Main Campus in Bloemfontein on the topic “The ups and downs of the South African Economy: Rough seas or smooth sailing?”

In his lecture, Prof. Burger emphasised a few key aspects of the South African business cycle and indicated how it changed during the periods 1960-1976, 1976-1994 en 1994-2006.

With the Gross Domestic Product (GDP) as an indicator of the business cycle, the analysis identified the variables that showed the highest correlation with the GDP. During the periods 1976-1994 and 1994-2006, these included durable consumption, manufacturing investment, private sector investment, as well as investment in machinery and non-residential buildings. Other variables that also show a high correlation with the GDP are imports, non-durable consumption, investment in the financial services sector, investment by general government, as well as investment in residential buildings.

Prof. Burger’s analysis also shows that changes in durable consumption, investment in the manufacturing sector, investment in the private sector, as well as investment in non-residential buildings preceded changes in the GDP. If changes in a variable such as durable consumption precede changes in the GDP, it is an indication that durable consumption is one of the drivers of the business cycle. The up or down swing of durable consumption may, in other words, just as well contribute to an up or down swing in the business cycle.

A surprising finding of the analysis is the particularly strong role durable consumption has played in the business cycle since 1994. This finding is especially surprising due to the fact that durable consumption only constitutes about 12% of the total household consumption.

A further surprising finding is the particularly small role exports have been playing since 1960 as a driver of the business cycle. In South Africa it is still generally accepted that exports are one of the most important drivers of the business cycle. It is generally accepted that, should the business cycles of South Africa’s most important trade partners show an upward phase; these partners will purchase more from South Africa. This increase in exports will contribute to the South African economy moving upward. Prof. Burger’s analyses shows, however, that exports have generally never fulfil this role.

Over and above the identification of the drivers of the South African business cycle, Prof. Burger’s analysis also investigated the volatility of the business cycle.

When the periods 1976-1994 and 1994-2006 are compared, the analysis shows that the volatility of the business cycle has reduced since 1994 with more than half. The reduction in volatility can be traced to the reduction in the volatility of household consumption (especially durables and services), as well as a reduction in the volatility of investment in machinery, non-residential buildings and transport equipment. The last three coincide with the general reduction in the volatility of investment in the manufacturing sector. Investment in sectors such as electricity and transport (not to be confused with investment in transport equipment by various sectors) which are strongly dominated by the government, did not contribute to the decrease in volatility.

In his analysis, Prof. Burger supplies reasons for the reduction in volatility. One of the explanations is the reduction in the shocks affecting the economy – especially in the South African context. Another explanation is the application of an improved monetary policy by the South African Reserve Bank since the mid 1990’s. A third explanation is the better access to liquidity and credit since the mid 1990’s, which enables the better management of household finance and the absorption of financial shocks.

A further reason which contributed to the reduction in volatility in countries such as the United States of America’s business cycle is better inventory management. While the volatility of inventory in South Africa has also reduced there is, according to Prof. Burger, little proof that better inventory management contributed to the reduction in volatility of the GDP.

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