Corporate Services

INTRODUCTION Xavier Corporate Services, an equal opportunity company, was established at the beginning of 1999. The company is geared towards providing flexible and sustainable business solutions. Our mission, vision, services and commitment are geared to face the challenges faced by government institutions at a National, Provincial and Municipal levels, in assisting, developing and achieving the desired capacity. Sections 152 and 153 of the Constitution states that one of the objectives of local government is to promote social and economic development. This is further implicit in section 23 of the Municipal Systems. Municipalities find themselves faced with the challenge of constantly repositioning themselves to the socio-economic conditions in an ever-changing national economy. One way in which these entities can assess and determine strategies for strengthening and maintaining their service delivery, is through economic development activities. Municipalities with struggling, economic and financial development should focus primarily on improving or enhancing the local economy.

We have been appointed:

The City of Johannesburg under Specialized Financial Services Contract 355/01 of June 2001, and currently under contract 672/03 for the provisioning of Specialised Financial Services. During this period we have been engaged in several spheres of problem definition and solving. Xavier Corporate Services has been appointed as service provider to the Department of Land Affairs to conduct Forensic Audit and Investigations on their behalf under contract DLA 35/02C(2004/5).

To a panel of service providers to conduct Forensic and Accounting Audits on behalf of the Auditor-General.

Xavier Corporate Services has successfully applied to register as a service provider. During February 2004, Xavier Corporate Services has been appointed as the OPCAR (Operation Clean Audit Report) Project Managers and the implementation partners in relation to the Auditor-General (AG) Report for the year-end June 2003 that resulted in a disclaimer of opinion on the City of Johannesburg’s financial statements. We believe that during this period we have adequately acquainted ourselves with the operations within this sphere of Government and during the process were able to add value to the respective Departments we have served, by ensuring that skills transfer objectives are achieved, and expertise is being shared with the respective user-departments. We are committed to empowering our clients in handling the assigned task in an economical, efficient and effective manner by ensuring that suitably qualified staff are project managing and performing the required task.

Exclusively the managing member, Karl Fourie AGA (SA) CIA ACFE, undertakes Quality Assurance Reviews (QARs) of internal audit departments. This is in compliance with the Standards for the Professional Practice of Internal and External Auditing. Our professional memberships and affiliations to leading institutions in South Africa such as SAICA (South African Institute of Chartered Accountants), IIA (SA) (Institute of Internal Auditors), ACFE (Association of Certified Fraud Examiners), combined with our compliance to the relevant ethical requirements and standards of professional practice, contribute to one of our primary objectives to add value to the clients and business partners we serve.

This is done through a value-added integration process aimed at core business activities, whilst working in close consultation with our clients. Our performance is governed by the various codes of ethics, conduct and standards applicable to the various institutions. Xavier Corporate Services’ overall approach regarding the optimisation of resources is embedded in the multi-faceted skills, competencies and proficiencies of its staffing consultants. Consequently we are privileged to pull together our combined resources from within the company.

Our company works in close consultation with other professional companies within the legal, accounting and investigative professions. We would not hesitate in combining our resources with other professional firms if the need arises in order to provide our clients with a total solution. We believe the challenges facing our country in the 21st Century are that of economic and social upliftment of our people by-means of meaningful and active participation in improving the quality of life of our people.

Top of Page

1. Corporate Governance

Top of Page

2. Business Practice and Systems Review

It is imperative that an analysis of government institution’s organisational business processes be reviewed at regular intervals. Within the municipal government environment five such key areas are targeted:

  • Effectiveness of the services that the organisation delivers;
  • Efficiency of the organisation in terms of its service delivery
  • Customer focus (Batho Pele)
  • Financial Management capacity
  • Sustainable service delivery

The prevailing methodology of analysing an institution’s business processes is to perform a process mapping exercise by applying case scenarios and determining the organisation’s business requirements. This process is supported by:

  • Liaising with external and internal client
    • Assessing client needs
    • Assessing client satisfaction
  • Transforming the organisation’s requirements into specified project briefs;
  •  Creating logical and innovative solutions to problems (operational management concepts);
  • Designing models of process-flows to replace others and;
  • Keeping abreast with technical and sector developments.

The Business Analyst-process is a key part of a “Refit System” of an organisation’s or institutions Re-engineering Processes. The key strategy of such a process is to optimize an institution’s efficiency, effectiveness and economical utilisation of its resources and maintaining its key objective. In the case of most municipalities, it would relate to internal efficiencies of the municipalities performance on Service Delivery. The Business-Analyst process would perform an assessment of how the municipality should run the business effectively (less labour intensive methods) and efficiently (less waiting time).

In addition to the Business-Analysis process, the process of analysing current organisational skills and competencies is necessary. It is imperative that any organisation embarking on a Business-Process-Re-engineering strategy appease the Human Resource factors in the organisation. All Business Analyst Processes undertaken in organisations necessitates, amongst others, the automation of systems and processes.

Xavier is able to improve the Business-system’s life cycle by providing the following services:

  • Assisting with and developing the business case;
  • Assessing the needs and gathering information on past performance;
  • Developing new and improving Process-Flow-System;
  • Processing and managing the change;
  • Skills development; and
  • Monitoring and evaluation.

Top of Page

3. Organisational Design and Business Case Management

STRATEGIC MANAGEMENT CONSULTING In terms of the Municipal Systems Act, Act No.32 of 2000 and The Municipal Finance Management Act, Act 56 of 2003, municipalities have to develop a Strategic Plan.

This Plan would map out and define:

  • Where the municipality is heading o Short and long term performance targets
  • The activity of management to achieve the outcomes

In defining the organisation’s core objectives, municipal management should embark on a strategic management evaluation exercise and develop a Strategic Plan that consists of several phases vis-à-vis:

  • Defining the organisation’s business;
  • Stating a mission;
  • Formatting a vision;
  • Setting objectives;
  • Developing a strategy to achieve the objectives;
  • Setting strategic and financial performance objectives by linking financial resources to the objectives;
  • Implementing and executing the strategy;
  • Monitoring and evaluating the implementation of the strategy; and
  • Apply corrective adjustments and or amendments.

Developing a strategic plan is the highest level of managerial activity, which is usually performed by the company's Chief Executive Officer or Municipal Manager and executive management team. It provides overall direction to the whole enterprise. To achieve an organisation’s objective, the strategy utilized must be efficiently resourced. The process involves matching the municipality’s strategic advantages to the business environment. One objective of an overall corporate strategy is to put the organisation into a position to carry out its mission effectively and efficiently. A good corporate strategy should integrate an organisation’s goals, policies, and action plan into a cohesive whole.

Xavier in its quest for performance excellence offers:

  • Strategy formulation involves:
    • Performing an analysis of the business-operations (covering both internal and external issues);
    • Setting objectives: This involves crafting vision statements (long term view of a possible future), mission statements (the role that the organisation has in society), overall corporate objectives (both financial and strategic), strategic business unit objectives (both financial and strategic), and tactical objectives.
  • Strategy implementation involves:
    • Allocation of sufficient resources (financial, human capital, time, IT system support);
    • Establishing reporting lines of communications for cross functional teams;
    • Assigning responsibility of specific tasks or processes to specific individuals or groups;
    • Managing the process including monitoring results compared to benchmarks and best practices, evaluating the efficacy and efficiency of the process, controlling variances and making necessary adjustments to the process; and
    • Skills Development and capacity building (training, process testing, documentation, and integration with and/or conversion. 
  • Development of an Organisational Culture
  • Development of an Organisational Image
  • Development of an Organisational Structure
  • Development of policies, procedures and controls.

Top of Page

4. Supply Chain Management

Procurement has grown into a specialised service, covering all aspects of the Supply Chain Management process and business workflow. Through initiatives of research, the company has produced a Supply Chain Management product that is in line with     the new thinking, currently being driven by government, on all procurement activities. The most recent development is a bid evaluation program that has been designed and engineered according to the new legislation governing Financial Management in local government. We believe that our proficiency in these areas of expertise may value in our potential engagement with our clients.

We have successfully developed and designed course material in Supply Chain Management for Municipal level.  In this regard we have delivered this training intervention at the City of Johannesburg since July 2004. The training was developed in compliance with the Municipal Finance Management Act, which came into operation on 1st July 2004. In addition we have developed supply chain    management course material in terms of the Public Finance Management Act with a view to provide this training at National and Provincial Government level. We have also successfully developed a computer based Bid Evaluation Program which is currently being utilised by the City of Johannesburg Supply Chain Management.

Supply Chain Management (SCM) is a supporting element to the function of an institution and an integral part of financial management and can be described as a systematic approach that ensures that goods and services are delivered to the right place, in the right quantity, with the right quality, at the right cost and at the right time. SCM commences with demand management when, at the strategic planning phase to determine the functions and goals of the entity, the goods and services are identified, budgeted for and programmed.

This includes a detailed analysis of the goods and services required, following the best-cost approach to obtain the goods and services. Following on the demand management is acquisitioning management, at which stage a strategy is determined on how to approach the market, bids are evaluated and recommendations are made. Logistics and disposal management forms the later parts of this integrated system. Supply chain performance captures various issues that should be monitored and evaluated on a continuous basis, such as achievement of goals, compliance with norms and standards, cost-efficiency of the process, etc.

The rationale behind the introduction of Supply Chain Management as a financial process within the South African public service context is embodied in the Constitution, Public Finance Management Act and its Regulations as well the Preferential Procurement Policy Framework Act and its associated Regulations, namely value for money. Supply Chain Management therefore hinges on the underlying factor, namely performance-based processes focusing on measurable outcomes. This ensures maximised service delivery as a new solutions model.  The reform objective is to improve financial affairs within procurement activities and thereby initiating a strategic approach for identifying and delivering services, works and goods.

List of Services

  • Evaluation and review of tender invitation
  • Prepare a business case on render requirements
  • Review process and minutes for compiling bid specifications
  • Review EMM SCM policy for compliance to legislation
  • Evaluate and review placement and issue of bid invitations
  • Report on deficiencies in relation to Terms of Reference
  • Review processes followed at tender closure
  • Review process of tender opening
  • Report on compliance with regard to legislation
  • Obtain copy of and review mandate of tender evaluation panel
  • Review for potential conflicts of interest and non – compliance
  • Prepare detailed score card in relation to terms of reference and scope of work required
  • Prepare excel spreadsheet for scoring matrix in compliance with legislation
  • Draft weighting and ranking criteria for each set of points criteria
  • Prepare listing of disqualifying and non-responsive criteria in relation to tender invitation
  • Obtain bid register of tenders received
  • Identify bidders per Province
  • Compare submitted documents per tenderer to bid register
  • Evaluate bid documents for disqualifying and non-responsive criteria
  • Report on bidders that are disqualifying and non-responsive in relation to criteria listed
  • Evaluate responsive bidders per Province in terms of:
  • Technical (functionality)
  • Price
  • ABE Status DRAFT Report on bidders who failed to meet minimal criteria
  • Commence proceedings with evaluation panel
  • Guide evaluation panel through process to be followed during evaluation process
  • Obtain input from evaluation panel for any amendments to be affected prior to commencing formal evaluation process, and in compliance with the legislation
  • Display score card template to be used during evaluation of tenders
  • Make electronic “secret ballot” scorecard available to each evaluation panel member
  • Proceed with evaluation in relation to bid invitation
  • Ensure that proceedings from commencement of sitting is recorded for record purposes
  • Ensure securing of all hard copy and electronic documents throughout and after evaluation process
  • Prepare final score card for functionality (technical) based on average points weighting per evaluation panel member
  • Determine bid invitations that qualify for further evaluation ( 45 out of 60)
  • Proceed in evaluating qualifying bidders on price
  • Determine bid invitations that qualify for further evaluation ( 20 out of 30)
  • Proceed in evaluating qualifying bidders on ABE status
  • Determine bid invitations that qualify for final evaluation ( 5 out of 10)
  • Prepare draft report for finalisation by bid evaluation committee

Top of Page

5. Public Private Partnership (PPP)

Municipal Public Private Partnership is regulated in terms of section 120 of the Municipal Finance Management Act. The three key elements for Municipal PPP’s are:

  • value for money for the municipality;
  • affordability for the municipality; and
  • appropriate risk transfer to private partner (technical, operational and financial

A Public Private Partnership agreement must conform and comply with the regulatory framework as contained in National Treasury Regulation 16 (which sets-out the operational framework for PPP’s) and if it involves a municipal service that is to be outsourced; Chapter 8 of the Municipal Systems Act, 2000 must also be complied with. The undertaking of a Feasibility Study on the intended services to outsource is the most critical stage of the PPP life cycle. On completion of a Feasibility Study, the process calls for a consultative process between stakeholder viz. National and Provincial Government and civil society, unlike at a National and Provincial Government Departments PPP’s have multi-years budgetary implications and the institution’s financial commitment generally goes beyond the Medium Term Expenditure Framework (MTEF) budgetary cycle. Thus section 33 of the Municipal finance Management Act would also apply. Section 33 of MFMA places the responsibility on the City Manager (Accounting Officer) to comply with.

As a Facilitator, Xavier Corporate Services’ methodology would be to:

  • have a hands-on programme of support and engagement;
  • assessment of the situation in the municipalities by-means of:
    • undertaking a situational and capacity assessment;
    • identifying bottlenecks affecting service delivery and;
    • the development of action plan(s) specifying the supporting interventions required to oversee the successful implementation of the action plan aligned to national government’s programme of reconstruction and development.

Top of Page

6. Financial Recovery
6.1. Vat Recovery

While the activities of the Municipality do not have significant Income Tax implications (other than those arising from payroll-activities) on the side of the Core Administration, a wide array of VAT-complexities arise in Municipalities that are not normally encountered in private entities.  This is particularly true in the case of the City of Johannesburg, as it has a lot of subsidiaries (UACs), which impacts profoundly on the treatment of VAT in the City.

Firstly, RSC-levies are deemed to be a VATable supply and hence output VAT needs to be paid hereon.  Interest on unpaid levies is however not VAT-able.  The City has historically however paid over VAT to SARS on the total cash receipts pertaining to RSC-levies, whether it be for levies, interest or whatever.  This has resulted in significant VAT amounts that were declared as output VAT on interest that may now be reclaimed from SARS.  In order to do this, it needs to be proven to SARS that the integrity of the data used to calculate such claim, is above reproach.

Secondly, there is the issue of proportioned VAT-inputs that may be claimed.  This is calculated on a regular basis with reference to the percentage of VATable supplies as compared to total supplies being made.  A percentage is then agreed with SARS, with this being applied to input tax being claimed.

Thirdly, the Municipality, unlike most big businesses in the private sector, work on a “cash-receipts”-basis, as opposed to an “invoice-basis” to account for VAT.  This creates several complications from especially an accounting perspective, as unknown deposits now need to be allocated in some way, even though it would not always be possible to determine the extent of the VATability thereof.

Further to the above, there are also complex issues that arise with the taxing of certain grants and subsidies.

Xavier Corporate Services has been intimately involved in the process of reclaiming VAT from SARS that has historically been overpaid on RSC-levies.  To date we have successfully reclaimed an amount of approximately R26 million.  In this process we have developed a highly complex software program to recalculate the amounts in question and thus permit the claim to be instituted.  SARS has audited the program logic underlying to the calculation and has satisfied themselves that it is acceptable.  Xavier Corporate Services currently holds the intellectual property rights of this program, consequently it would be very favourable to the city to employ Xavier once again to continue with the calculations, as a new program would not need to be developed from scratch.

Apart from VAT on RSC-levies, Xavier has also obtained extensive insight into the other VAT-aspects relevant to the workings of the City, e.g. how VAT is calculated in the Creditor-system, etc.  This puts us in an ideal position to consult on possible improvement that may result in VAT-savings to the City.

Our chief VAT-consultant is Willie Boonzaier.  He is a former Tax Advocate of SARS, and the co-author of Capital Gains Tax in SA, and Ways to Avoid Tax Legally. He is the Chairperson of the AHI Tax Policy Committee and serves on the Business Unity SA Tax Committee. He was a member of the VAT subcommittee of the Katz Commission, and a member of the Tax on Financial Instruments subcommittee advising the Tax Advisory Committee of the State President on the taxation of derivatives in SA. He is Registered Tax Practitioner (with SARS) and was the Group Tax for Gencor, Genbel SA, Gensec SA, Gensec and Gensec Bank.

Eugene Symonds CA (SA) does Tax Consulting as one of his primary functions. His expertise is complemented by that of Karl Fourie AGA (SA) CIA CFE, who completed a one-year post graduate Advanced Certificate in Taxation through Rand Afrikaans University (RAU). To this end we will be able to provide specialist advice in the field of Municipal tax systems, tax practices and General Tax Law as applicable to a Local Authority.

Top of Page

Client Data Base
  1. City of Johannesburg
    • Revenue Service
    • Procurement
    • Financial Services
    • Rates and Taxes
  2. Damelin College (Head Office)
  3. South African Social Security Agency (SASSA)
  4. Government Employee Pension Fund (GEPF)
  5. Mnquma Local Municipality (Butterworth)
  6. City Parks ( Johannesburg )
  7. Johannesburg Zoo
  8. Ekurhuleni Municipality
  9. Johannesburg Water
  10. Auditor General (National)
  11. Institute for Municipal Finance Officers (IMFO)
  12. Directorate Of special Investigations (DSO): Training Division
  13. Department of Land Affairs (National)

Top of Page