MBDA closes off a challenging year with improved Audit & Performance results
2018/2019 has been on all accounts a major milestone and turnaround year for the Nelson Mandela Bay Municipality (NMBM) owned entity, the Mandela Bay Development Agency (MBDA). The financial year which started on July 1st in 2018 and ended on June 30th, 2019, the period marked the consolidation and implementation of key strategic interventions that the Board had set out to achieve, it is the culmination of two years of intense refocusing.
In 2016, before the appointment of this current Board, the MBDA was already going through a very difficult time with staff morale at an all-time low. The issues then have been widely reported on, but suffice to say, this current Board was determined to turn the ship around and place the MBDA on a path of success and improved service delivery outcomes.
Returning the organisation to stability was at the top of the Board’s agenda and this, at the beginning, required a lot more regular interaction with Management and all key staff to build confidence and craft a new vision for the 14year old entity. By July 2018, the MBDA had adopted a new vision, mission and strategic objectives, developed collaboratively with all staff and adopted by the Board. A Five-Year Strategic Plan with an Annual Business Plan was approved and put to implementation.
Integral to this drive was the need to craft a different delivery vehicle in terms of structure, for the MBDA to fulfil the new objectives, it needed to reinvent itself. This new organisational structure came into being at the start of the financial year. Most importantly, it was the recognition that for us to excel and elevate service delivery, we needed a lean and strategic management core team with an agile approach to project execution, which became a semi-matrix structure.
To give effect to approach, a new cloud-based Performance Management System was developed to track and monitor performance real time, result of which are now evident.
Another significant take out and major focus area for the MBDA is the need to supplement the grant funding we are receiving from the NMBM. This means that the MBDA must strengthen its capacity and ability to generate additional funding through innovative revenue generating projects and through special projects funding mechanisms. This possibility is already catered for in the current Mandate document of the Agency where the MBDA retains revenues generated through leases and facility rentals, but more can be achieved.
The non-payment of the quarterly grant funding of the MBDA for the 4th quarter of the 2018/19 financial year, amounting to nearly R28-million negatively affected the MBDA’s ability to meet financial obligations as and when they were due. This presented a significant threat to operations and attainment of Performance targets for the period we are reporting on. The non-payment of grant funding extended to the first half of the 2019/2020 financial year.
The resolution by Council in the first week of December 2019 for the approval of the MBDA Service Delivery Agreement (SDA) means that the grant funding that should have been paid in July 2019 will now be paid in December 2019, six months into the financial year. The effects of this delay will soon be realised at mid-term adjustment and no doubt, the delays have the potential to negatively affect the attainment of targets for the 2019/2020 financial year.
In conclusion, the MBDA has wrapped a challenging, but productive year none the less. Considering where we were in July 2018 and the complex transformation we undertook; the Board can be proud of this organisation’s achievements. As Board Chairperson and Chief Executive Officer, it gives us great pleasure to announce that through collaboration, commitment and passion for our City, the MBDA is a now a much more fine-tuned, stable and agile institution.
The MBDA has once again obtained an Unqualified Audit Outcome from the Auditor General of South Africa for the 2018/19 period. Not only that, the audit outcome is a commendable improvement on 2017/2018 outcomes, which means there were far less matters of emphasis.
The leadership of the MBDA appreciates the importance of an unqualified Audit Outcome in terms of the entity’s reputation, cementing the MBDA’s credibility and the opportunities that open for funding. To improve audit outcomes whilst improving the achievement of Key Performance Indicator (KPI’s) targets to 69% is even more important for the MBDA. We are an entity charged with driving visible and meaningful change in the Bay, so the successful implementation of our mandate is measured against real and tangible outcomes represented by KPI’s.
These achievements would not have been possible without the guidance and support of the Shareholder Representatives from the Municipality, dedication and commitment from Board members and the absolute resilience and professionalism from all our MBDA staff working across three sites, Tramways, Uitenhage Science and Technology Centre and Nelson Mandela Bay Stadium.
The Board also notes the recent resolutions by the NMBM Council for the approval of the MBDA Service Delivery Agreement as well as the extension of the mandate to continue with the management of the Nelson Mandela Bay Stadium. Finally, we wish all our stakeholders, residents and visitors, a safe and happy festive season and look forward to working well together in 2020 and beyond.
OTHER SIGNIFICANT HIGHLIGHTS FOR 2019 CALENDAR YEAR
The 5-year Plan
2018/19 was the first year of the 5-year Plan and significant progress has been made as indicated in the annual performance reports covered elsewhere. The MBDA operates in a dynamic and fluid environment affected not only by the global economy, but by local socio-economic-political and technological factors. This means that the 5-year Plan is a living and constantly updated framework plan.
The 2018/19 Annual Business Plan
The MBDA’s annual Business Plan is very much linked to the Board-recommended and Council-approved budget allocations. Like the 5-year Plan, the Business Plan has gone through adjustments during the mid-term budgets adjustment period.
The MBDA has for a long time operated without reviewing its structure relative to the growing mandate, hence it was heavily reliant on outsourcing. The outsourcing approach also meant the Agency kept a leaner structure at the expense of growing institutional capacity, broadening the skills base and leveraging teams through a multi-disciplinary approach, also known as a Matrix structure.
The changes that were implemented in July 2018 have already yielded lessons and positive results, such as a much greater improvement in Budget Performance as well as an improvement in the achievement of Key Performance Indicators.
The most consuming aspect of the organisational design work included the challenging Job Evaluation and Grading exercise. This being a sensitive matter, that relates to employees’ sense of worth, remuneration and job security, meant we had to slow down the process to take everyone on board.
Pursuing the Matrix
The driving force behind the change has been the desire to possess in-house skills and collaborate across functions (matrix structure) to improve efficiency and performance. Like all change, this was difficult and at times robust engagement processes were followed with employees, which required different thinking and going beyond the norm to engage and accommodate different views.
Performance enabling improvements
Several policies were workshopped, canvassed through the Board and eventually approved, and took effect from 1st July. The MBDA now has a revised and approved new organogram, revised job profiles, approved job grade structure, relevant policies and procedures and is poised to do even better in 2019/2020.
The Human Resources Department is now fully staffed servicing the Tramways, NMB Science Centre and providing support to the NMB Stadium team. One of the major achievements of the past year was the commissioning and implementation of a new online and cloud-based Performance Management System. This real-time system provides a 24-hour cloud-based platform ensuring ease of access to information, reporting and monitoring.
Information Technology advances
For the first time in this organisation, Information Technology received the attention it lacked previously. An IT Manager was appointed in October 2018 and his immediate mandate was to review Systems and Processes and advise management on technology requirements that would enable the MBDA to perform optimally. Some of the successes included the migration to Microsoft 365, establishment of ICT policies and protocols and improvement in all technology-based enabling support systems and Dashboards.
Improved Budget Performance & KPI’s
The Mandela Bay Development Agency comes off a base of the audited 2017/2018 performance with an achievement of 42%. The 2018/19 Capital Budget performance now sits at 65.6% based on the assessment by the Auditor General of South Africa, representing a 23.3% increase in spending performance from the previous year.
Budget and Financial Performance
The table above indicates the overall year-on-year performance for the financial period under review. On aggregate, OPEX spending for the 2018/19 year is reported at 81% or R73.4-million of the total final budgets of R90.6-million. The aggregate year-on-year performance indicates a decrease of 1.1% representing a negative performance of 0.9% measured against 81.9% or R66.5-million reported in 2017/18.
In terms of CAPEX, on aggregate the spending for the 2018/19 year is reported at 65.6% or R46-million of the final budget of R70.1-million, indicating a year-on-year improvement of 23.3% – the highest reported in the history of the MBDA as compared to 42.3% reported in the 2017/18 budget year.
On Key Performance Indicators, the MBDA achieved 69% under very difficult conditions where funding was not coming through timeously and other factors such as public unrest put a halt on several projects.
Notable innovations introduced & progress on key projects during this calendar year
The hallmark of 2018/2019 year must be the ability of the team to continue to deliver whilst continuing to evolve. The need to be forward looking and innovative was a top priority. Some of the gains made include:
• Implementing a Project Portfolio Office online tracking and monitoring system
• Adopted the matrix system which promoted an integrated way of working,
• Adopted an online, cloud based KPI Performance Management System;
• Migration to Microsoft 365, use of MS Teams as a collaboration platform and Implementation of Cloud Based Backups;
• Adopted a comprehensive Project Management Workflow System
• Through collaboration with The Herald, we introduced a monthly thought leadership column by the CEO
• Successfully completed phase 1 of the St Peters rehabilitation project
• Successfully completed the construction of the R12m swimming pool in New Brighton
• Successfully completed and handed-over the R8m Schauderville and Korsten Neave street park
• Completed the acquisition of a strategic property asset for urban revitalisation purposes
• Completed the conditional assessment of the Uitenhage Railway Sheds
• Preparing for commencement with redevelopment of the Uitenhage Railway Sheds
• 80% completion of the Helenvale SPUU public infrastructure projects
• Completed public participation process for the redevelopment of Bayworld & Happy Valley Precinct
• Completed a Business Plan for Bayworld and Happy Valley redevelopment
• Completed and opened the first new generation composite materials Baakens Unity Bridge
ICC for Nelson Mandela Bay
In August 2013, the MBDA received a mandate through a Council Resolution to conduct a feasibility study, for the development of an International Convention Centre (ICC) at the Telkom Park Stadium. The PMSA/BTKM consortium were appointed as the consultant to conduct the study and to recommend an operating model for the ICC that would be suitable for the metro. The study was successfully concluded, and the recommendations were shared with the MBDA board, Capital projects Committee and EDTA to advise on a way forward.
Nelson Mandela Bay Stadium
The NMB Stadium was under the umbrella of the MBDA for a full financial year and there are successes and significant progress that has been achieved. Several capital and infrastructure investments were achieved in this period and these include: Automation of water purification system – waterworks; replacement of stadium CCTV cameras, as well as the replacement of the big scoreboards which are potentially a significant source of advertising revenue generation. The MBDA has been successful in broadening the revenue base through sourcing and hosting a more diverse events program beyond football and rugby.
Joint statement by MBDA Board Chairperson, Mputumi Goduka and Chief Executive Officer, Ashraf Adam.
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