Mastering change and integrity in the public sector - Umar Banda. CFO City of Tshwane

Working in the public sector "isn't everybody's cup of tea", says Umar Banda, Acting CFO of the City of Tshwane Metropolitan Municipality, because the environment – which can be quite politically driven at times – is sometimes difficult to navigate.

"As a CFO you need to ensure you maintain your integrity and professionalism. It does get a little tricky at times but if you stick to your values it makes life a lot easier. You also need to be steadfast and stick to your decisions - it's the only way to survive in this environment."

  • Umar Banda is going to the Finance Indaba Africa on 13 & 14 October 2016 at the Sandton Convention Centre. To join him REGISTER now with invitation code prof16 and secure the last of our free tickets.

You've been in this post for almost two years, what have you achieved during this time?
"I've concentrated on three main areas: revenue enhancement, compliance on the supply chain side and compliance on the asset management side. Most notably on the revenue management side, we've managed to turnaround the revenue collection of the city and introduced a programme that seeks to involve the community and which helps people understand how services are provided and why there is a need to pay for those services. The programme is called "Mmogo Re A Gola" or "Together we Grow" under the banner "It's my Responsibility". We officially launched it on 30 March 2016 but it has been running for almost a year. Over and above that, in the city traditionally, when you do your collection drives you send letters of demand to defaulters to pay for their services, and if they don't pay they get disconnected. We have now introduced a debt collection outbound call centre that alerts people ahead of time to pay for their services, before they incur final demand charges and disconnection fees, or get disconnected, and we've seen quite a change in attitude. On average we have about R80 million additional cash coming in per month, just from the call centre."

"On the supply chain side we've always had issues on compliance, with legislation particularly on procurement. We've introduced a paperless module on procurement "e-Procurement", which is in the final stages of development and which should help streamline the procurement process. Everything will be submitted online, in real-time, on a very secure system. Our service providers will have access to the portal as well, which should make things much easier for them."

"On the asset management side, we did a study in Mamelodi that looked at the state of the infrastructure and if it was correctly captured in our financial system, as well as what we still needed to do to ensure our systems are complete, accurate and valid. At end of day we got a full 3D asset register that is 100% compliant with the accounting standards. We plan to roll that out with the rest of the city. The challenge is that it requires a lot of cash so we are in the process of securing funding. Once that is done, the full assets of the city will be fully captured in 3D."

What are you hoping to achieve over the coming year?
"Our treasury unit is still quite young. Over the next year our plan is to grow and build this unit so that it can interact directly with investors and banks. In 2013 we went out into the bond market, which exposed us to a different kind of investor. We need to ensure we can interact with such investors on a regular basis, ensure our information is readily available for our investors, and that we are able to track our performance."

How does change happen at the organisation? How do you implement change so that it is successful?
"It's difficult to implement change simply because local government finance and the reforms are still young. I think when you look at how the MFMA [Municipal Finance Management Act] has revolutionised local government, and how the accounting standards have affected local government, that plays a part too. A lot of people have been in local government for many years, so it's difficult for them to accept new ways of doing things. In that regard it's difficult to implement change. The only way you can do this is to have a mix of new blood coming into the system joining the old, and ensuring that the wealth of info that you have in the system is a combination of the two. But change does take a long time. I guess if you are results driven it is one of the things that can frustrate you."

What has been the greatest challenge you've faced in your career?
"Having to adjust. By profession I'm an auditor, and when I came into the city I was an auditor. Luckily when I came into the city I was doing the work I used to audit. I was now the preparer of the financial statements. When I had to move into the CFO role, looking at budgets, the treasury function etcetera, it was things which I previously wasn't that involved in. I had to now go back and engage with the team and get an understanding and see how to take it forward."

"When you engage with your peers it's the best learning opportunity. I've had a lot of contact with my peers to get an understanding of how things work in local government and how to manage those things in finance."

Would you say it takes a certain kind of CFO to work in the public sector?
"It's not everybody's cup of tea. The environment itself, especially if you are a CA, is a really difficult one simply because it's obviously a very politically driven one. As a CFO you need to ensure you maintain your integrity and professionalism. It does get a little tricky at times but if you stick to your values it makes life a lot easier. You also need to be steadfast and stick to your decisions - it's the only way to survive in this environment."

Sometimes, CFOs in public sector have to deal with unusual requests. How do you handle requests that aren't entirely within the law?
"The only saving grace I have is legislation. As long as it doesn't comply with legislation, it doesn't happen. Also, if anything comes from any corner that doesn't comply with legislation, I have full support from my leadership not to do it."

You have registered for the Finance Indaba happening in October this year. What are you looking forward to about this event?
"Having engaged in the different CFO forums I've been able to pick up a lot of insights of the experience of other CFOs in the public sector. There are a lot of learnings that one can take back. Over the long term I need to concentrate on building a sustainable finance structure for the city, so financial development for me is a key goal and objective in the next three to five years. Hopefully through these sorts of engagements I will gain greater insight into how to actually get that balance."

In your opinion, what makes a great CFO?
"You can't just be a numbers person. I've recently had to get involved on the city planning side. This was simply because I had to understand how, when we go out into the market for financing infrastructure projects, this impacts spatially on the city in line with the long-term vision of the city, Vision 2055."

"If you want to be a good CFO you need to be able to engage with your peers in the organisation and understand how their work impacts on yours and how yours impacts the organisation's longer-term vision."

What does the CFO of the future look like?
"You will probably have to be a jack of all trades. I've been thinking about doing my Masters, and looking at which area I should focus on, but it's a very difficult decision to make, especially in the public sector, when demand and the needs are so wide. As a CFO you have to be in meetings for 30 minutes, where you must be conversant with what is happening throughout the whole city. I should be able to speak to any matter of the city without having to think twice."

"The CFO of the future is somebody who will have to understand finance but be up to speed with many other issues, such as IT, infrastructure, and legal matters - the latter especially in the South African context. We are slowly moving into more complex financial transactions, which means you need to understand your finance well, as well as the legal implications of the transactions."

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