Research Unit Five-Year Review and Legacy Report by previous Committee

Meeting report

Parliamentary Research Unit Five-Year review of Department of Provincial and Local Government (DPLG) work
Mr Sonwabile Ngxiza, Parliamentary Research Unit, reported on the policy priorities of the formerly named Department of Provincial and Local Government (DPLG). He stated that the Project Consolidate had been commissioned to identify the severe deficiencies at local government level. This focused on managerial and technical expertise and capacity in municipalities. It was originally meant to be a two year project, but lasted from 2004 to 2007. It had now been incorporated in the five year strategic plan of government. The Siyenza Manje programme had deployed 494 technical experts to municipalities, specifically aimed at audit control. The intention of the Policy Review Process was to clarify the roles of district municipalities and local government municipalities of the two- tier local government system.
There had been a review of the 1998 White Paper that delineated the powers and functions of the tiers of local government. That had been finalised and tabled to Cabinet, but was yet to be tabled in Parliament.

Mr Ngxiza set out the pieces of legislation with which Members would be working and must familiarise themselves.

Mr Ngxiza then tabled the budgetary trends. The allocation to Local and Provincial Government Transfers had quadrupled from 2004/5 to 2008/9. This was an indication of substantial growth. The provincial and local government equitable share was drawn from this allocation, as was the Municipal Infrastructure Grant (MIG). The other large items were for Administration and Systems and Capacity Building.  The recent growth in the Governance, Policy and Research section was ascribed to the Policy review process. The Urban and Rural Development allocation had displayed negative growth, especially in the 2004/5 and 2006/7 financial years. This reduction was critical as this was the allocation directly concerned with development in the rural nodes.

Mr David Mokoena, Parliamentary Researcher, reported that unqualified audit reports were received by the former Department of Provincial and Local Government (DPLG), South African Cities Network, and Local Government Sector Education. The Municipal Demarcation Board (MDB) had received a qualified audit opinion for the 2004/05 financial year, but received unqualified audit reports for the 2005/06; 2006/07 and 2007/08 financial year, with some matters of emphasis.

Mr Ngxiza highlighted, however, that the South African Local Government Association (SALGA had received a qualified audit report for the past five consecutive years.

Mr Ngxiza then moved to the interventions that were needed in terms of Section 139 of the Constitution, pointing out that these were required during the past five years in KwaZulu-Natal, Eastern Cape, Free State, North West, Mpumalanga, and, to a lesser extent, the Northern Cape.

The unhappiness around the re-demarcation of the Merafong municipality had triggered similar action from, amongst others, the Matatiele Local Municipality in the Eastern Cape and Moutse Local Municipality in Mpumalanga. This had meant that attention must be given to the matter of cross boundary municipalities.

Other challenges arising from municipalities arose in respect of their administration and finance, the timely submission of financial statements, internal audit controls, building audit capacity to attain clean audits, expenditure trends, what he described as “grant-dependency syndrome” and the need to improve expenditure on foreign and local donor funding. Objectives in service delivery included the assessment of Project Consolidate and the eradication of service backlogs particularly in rural areas and informal settlements. Disaster management needed attention, specifically regarding turn-around times for disaster relief funds, the effectiveness of mitigation and prevention strategies and improving disaster response systems.

Discussion
Mr A Watson (DA; Mpumalanga) asked if the Land Use Management Act mentioned in the presentation was different from the Land Use Management Bill considered by the former Portfolio Committee on Housing.

Mr Ngxiza responded that Land Use Management Bill fell within the domain of the former Portfolio Committee on Agriculture and Land Affairs. The former Portfolio Committee on Housing had dealt with a different Bill, which still had to be considered by the Joint Committee.

Mr Watson asked why donor funding went unspent by municipalities. He felt that this was a matter that should be flagged for the further engagement.

Mr J Gunda (ID; Northern Cape) asked for more detail on the interventions under Section 139 of the Constitution and Section 106 of the Municipal Systems Act (MSA) in the Northern Cape and asked specifically to which municipalities this applied.

Mr Mokoena replied that the Research Unit was only aware of two municipalities in Northern Cape where there had been Section 139 interventions.

Mr Moss Manele, Committee Clerk: Select Committee on Co-operative Governance and Traditional Affairs, responded that the MSA Section 106 interventions were referred to the Committee for consideration. There was a need to develop a definitive strategy around these, and the Members needed to establish the rules more clearly and answer questions around whether the Committee could call the MEC to account.

Mr T Mofokeng (ANC,; Free State) wondered how many municipalities had not yet eradicated the bucket sanitation system in municipalities.

Mr Nxgiza responded that there were municipalities who had problems with the eradication of the bucket. The Research Unit had statistics for the overall progress of free basic service- provision in general. The report could be forwarded to the Members.

Mr T Chaane (ANC, North West) pointed to the continued problem with SALGA's qualified audit reports and asked for more detail on this matter.

Mr A Matila (ANC, Gauteng) asked what were the matters of emphasis that the Auditor-General (AG) had raised in the SALGA audit report. He requested similar detail for the audit report for the DPLG.

Mr D Bloem (COPE, Free State) suggested that the audit reports be made available to Members.

Ms van Lingen agreed with this suggestion.

Mr Mokoena responded that the DPLG and SALGA audit reports would be made available to Members so that they could study specific issues. A host of issues were raised in these reports, and notably the issues for emphasis concerned large amounts of money.

Mr Gunda referred to the huge differences in budget allocations across the programmes. He noted the large increases for, specifically, the Administration and Provincial and Local Government Transfers allocations, and asked what the possible reasons were for this and the outputs achieved from the increases in spending.

Mr Ngxiza replied that there was no adequate document at present to act as an explanation of the expenditure trends. That was why the Research Unit had highlighted it as an issue of concern to the Committee.
The Blue Book, a document released by the National Treasury on expenditure and budgets of municipalities for the 2003/4 fiscal year, pointed to specific aspects of financial management and planning. It also highlighted the failure of municipalities to generate their own revenue and funding, and this also showed the over-reliance on grants to which he had referred earlier.

Mr Mokoena added that the expenditure problems were reported to be due to problems with procurement, supply chain management and the feasibility of planned projects. One of the major criticisms that had been leveled against national and provincial government was that the financial year dates for provinces differed from the financial years of municipalities. Often funding was received after the commencement of the municipal financial year. There was also uncertainty due to the late announcement of allocations and this made planning difficult.

Mr B Nesi (ANC, Eastern Cape) sought clarity on the comments regarding disaster management. Regarding the budget and Integrated Development Plans (IDPs) of municipalities, he asked if there was a turnaround strategy in place. He noted that consultants often crafted IDPs. It was difficult to implement the IDPs effectively at local level, as the councillors and community did not have input into the planning process.

Mr Nxgiza responded that he agreed that the IDPs should be a product of community input. He noted that consultants mostly re-hashed old issues. Municipalities only measured the adoption rate and credibility of IDPs, and this was according to their own scale.

Mr Manele said that in 2008, the Committee had eight interventions into municipalities across the country. The common problem was a lack of linkage between IDPs, community participation and local economic development strategies. Members of the previous Committee had suggested a national review of IDPs and consideration as to what mechanisms could be put in place to ensure that IDPs were correctly implemented.

Ms E van Lingen (DA, Eastern Cape) stated that on the matter of disaster management, she found that municipalities did not have strategies and, if they did have these strategies, municipalities did not implement them. She asked what could be done to improve municipalities' disaster management.

Mr Nxgiza cited the example of the annual natural winter storm disasters along the Western Cape's Garden Route. He pointed to the fact that the damage was predictable and had followed a similar pattern over a number of years. This Committee could ask whether there were sufficient mitigation and prevention strategies put in place by the responsible bodies in these cases. A related issue was the fact that some municipalities who had suffered damage from disasters in recent years had still not received the funding owed to them for reconstruction.

Ms van Lingen opined that when an entity, such as SALGA, had a record of sustained qualified audits, action should be taken. She asked what action had been taken to date.

Mr Manele noted SALGA’s record of evading Parliament when it was called to account. He suggested that it was perhaps time to use the National Council of Provinces (NCOP) rules to summon SALGA to appear. He also pointed out the lack of clarity around the Committee's power to call an MEC to account, or the power to ask for a forensic investigation and consider the resultant forensic report.

Mr Mokoena added that another criticism against SALGA was that it would often send junior staff when interventions were conducted, instead of the accounting officers.

Mr M Makhubele (COPE, Limpopo) reiterated the question as to what steps had been taken against SALGA.

Mr Bloem responded that the Committee Clerk’s had given a good response and that the matters raised in the briefings had in fact provided the Committee with the items to pursue on its Programme.
The Chairperson asked the researchers for a more definitive explanation of the issues that the Committee should pursue in future.

Mr Watson pointed out that SALGA had ten seats in the NCOP but rarely attended in this capacity.

The Chairperson responded that the NCOP rules should be used to enforce SALGA’s attendance when it was invited to account. SALGA should be a top priority in the Committee’s programme of action. He also felt that there was a need for a serious follow up with the Department on disaster management in the predictable cases mentioned. Another matter to be placed on this programme concerned the Bills dealing with traditional leaders. The National Assembly had finished processing them, but they were not progressing well through the NCOP. With regard to the planning and co-ordination of the IDPs, he wondered if perhaps national government should be involved with crafting of the IDPs. A further question was how the National Planning Commission (NPC) would relate to this. He felt that members should get the Blue Book urgently.

Mr Manele reported that this was addressed on page 2 of the Legacy Report. He stated that the Committee needed a briefing on the National Disaster Management Strategy from the new Department of Co-operative Governance and Traditional Affairs.

Mr Watson added that Members should also receive the Division of Revenue document relating to municipalities' allocations and expenditure.

The Chairperson added that the Members should also be provided with all the relevant legislation in order to familiarise themselves with it and for future reference.

Legacy Report of the Select Committee on Co-Operative Governance and Traditional Affairs
Mr Moss Manele, Committee Clerk, Select Committee on Co-operative Governance and Traditional Affairs, concentrated on the interventions that were conducted by the previous Committee under Section 139 of the Constitution and Section 106 of the Municipal Systems Act. He felt that an adequate review of the list of public entities that reported to the Committee and the relevant legislation was given in the Five-year review presentation given earlier.

He set out the process of the interventions into troubled municipalities, saying that the Committee would conduct the intervention visits, recommendations would be made and the Committee would make follow-up visits. During the visits, the MEC would submit a progress report. The Committee Content Advisor was in the process of putting together the progress reports and these would be made available to the Committee.

He used the visit to Mbombela municipality (Mpumalanga) in 2009 as an example. He tabled a summary of the recommendations. He noted that the Committee had considered the question of whether an MEC, noticing that a municipality was in trouble, would have to wait until the municipality was actually in crisis before intervening. The resolution of the House on the matter meant that the MEC of Local Government in Mpumalanga owed the Committee a report. The Committee Content Advisor had prepared letters to the MEC to obtain this report.

The Committee made similar recommendations in the intervention report for Impendle municipality in Kwazulu-Natal. This report highlighted the need for provision of monthly reports and the need to ensure that the policy on supply and chain management was developed, since one of the findings of the visit was that there was no system for supply chain management in the municipality in place. This was the responsibility of the municipal manager who had failed to develop such a system to table before Council.

Mr Manele noted that the Committee should be developing an annual Committee programme, which should include follow-up visits to the eight municipalities where interventions had been conducted, to assess the extent of their implementation of the recommendations.

Discussion)
Mr Watson stated that he was pleased with the suggestions as to the way forward. He asked whether the suggestion that early warning systems were the responsibility of the MEC was acceptable. He referred to the report on Mbombela District Municipality, which had fallen within his previous constituency. He said that during the third Parliament, becoming aware of their troubles, he had raised concerns in his capacity as an NCOP MP, as also in his speeches during Taking Parliament to the People initiatives. However, he could do nothing to actually force any action until the MEC intervened. He felt that there should be some mechanism that allowed MPs to raise the issues and allow the Committees to take active interventions themselves. 

Mr Gunda agreed that the Committees should act in these cases, and not wait on MECs to intervene. He noted that there were some severe problems in the Northern Cape, with many municipalities in crisis. He was not aware that there had been any changes and mayors who had been sanctioned by the Courts still held their positions. He agreed that the Committee should take a serious stance on these issues.

Mr Nesi replied that Members could and should respond to these issues by writing letters to the Ministers and relevant officials. They should also assist at community level to ensure that these issues were dealt with.

The Chairperson responded that the Committee must investigate to ensure that communication to the higher levels was thorough and courteous. The Committee did have the right to summon MECs, and all spheres of government could be asked to report to the Committee.

Mr Bloem stated that this was a very good report. He asked why the Impendle intervention report was channelled to the Portfolio Committee in the National Assembly, rather than the Select Committee and thought this should be followed up.

Mr Manele replied that this recommendation referred to the Portfolio Committee of the Kwazulu-Natal provincial legislature. He added that the Select Committee would do joint oversight with the provincial legislature.

Mr Bloem pointed out that one of the challenges that the changes in government presented was the fact that there were new MECs, and there was a danger that some would simply blame the old MECs, and not do the required work. He asked how the Committee would address that.

Mr Mofokeng asked for clarification on the interventions and follow-ups. He noted two municipalities in the Free State where employees had been suspended, the first in respect of an allegedly illegal strike, and the second, in the Xhariep district allegedly because the employees were COPE members, although he was not sure of the details of the latter case. He asked how the Committee should respond, as the loss of employees would negatively affect service delivery.

The Chairperson asked the researchers for an accurate report on these matters. He stated that the Committee should be careful of going outside its agenda. However, it would be looked into and would form part of the programme.

Mr Chaane noted that there was a correct procedure for interaction. The Committee should confer with the MEC, and he suggested that the Committee should not put this item onto the programme until it had received all the facts from the Minister and the MEC. He added that if the Department of Co-operative Governance and Traditional Affairs did not intervene after these interactions, the Committee could then intervene.

The Chairperson agreed.

Mr Bloem agreed to this suggestion. However, he added that the Committee should perhaps also conduct its own independent investigations, through the Members and Committee staff.

Mr Watson responded that the case of councillors allegedly being suspended due to COPE membership could be a matter as simple as their having failed to comply with the Independent Electoral Commission’s regulations. If they had switched parties, they might not have appeared on either of the party lists and might have lost their seats as a consequence.

Mr Mofokeng clarified that he had referred to employees of the municipality and not the councillors.

Mr Matila concurred with the earlier comments that it was important to use the proper channels. This issue should go on the formal agenda, and the correct procedure must be followed to avoid the complications of misinformation and accusations of whistle-blowing.

Mr L Nzimande (ANC; Kwazulu-Natal) added that members had many other options to address such issues in way in addition to doing so via the Committee programme.

Committee programme: concerns
Members raised concerns with various clashes in the Committee programme, and agreed that many of these clashes would be addressed at the Chairperson's meeting, which was to be held later in the day.

Adoption of Committee Minutes and excusal from meetings
Members pointed out some minor grammatical errors, and the Minutes were adopted, subject to the necessary corrections being made by the Committee Clerk.

The Chairperson urged members to make their apologies in writing in future as a more formal record was required.

 The meeting was adjourned.