The Department of Co-operative Governance, Human Settlements, and Traditional Affairs,
The Committee asked for more clarity on expenditure and capital projects. Members wanted more details and reasons for the ineffectiveness of some municipalities. It seemed that more money was spent on administration rather than service delivery. The Committee asked why 46 of the183 wards were not functional. Members would have wished to engage the Department on the six indicators chosen to rank municipalities if time allowed. It had been noted that the Department had identified its challenges, but Members asked why the Department could not work with other departments to solve the problems. Members were concerned about the 1% employment rate of people with disabilities and asked how the province addressed this issue.
Koukamma municipality reported that governance and participation had improved. Plans had been implemented to manage staff and councillor debt, and an internal audit function had been established. Financial reporting and billing management improved and the annual financial reports for 2008/09 were compiled. The process of compiling the annual financial reports for 2009/10 also began and a new financial record keeping system had been introduced using clean data. Success was achieved in corporate services and human resources management. An asset register had been developed with a draft fraud prevention plan establihsed. A debt collection policy had been adopted and promulgated. Funding of R177 million was obtained which improved service delivery. The remaining challenges were that discipline of staff was not yet at a satisfactory level for ongoing achievement of organizational goals. The skills levels of employees were very low. The maintenance and development of infrastructure was still below standard. There was a lack of water resources in the area due to a long term drought and Government intervention was required. The new administration of the Municipality required support from the Provincial Department of Local Government.
Members asked about corruption, bad conduct and ill discipline of members, the lack of service delivery, and political interference.
Consolidated Report on the Performance of Northern Cape Municipalities
Mr Kenneth Mmoiemang, Member of the Executive Council for Co-operative Governance, Human Settlements and Traditional Affairs, Northern Cape, conveyed his apology for not appearing at the last Committee meeting. He understood the importance of the Select Committee and its contribution towards the effective running of municipalities. The presentation would focus on work done by municipalities and achieving the five key areas that had been identified.
Mr Bradley Swartland, Acting Head of Department for Co-operative Governance, Human Settlements and Traditional Affairs,
The Auditor-General had noted that the annual report did not include the annual performance report of the municipality prepared by the municipality in terms of Section 46 of the Municipal Systems Act 2000 as required by section 121(3)(c) of the Municipal Finance Management Act 2003.
A performance management system had not been fully implemented and the council did not comply with all the requirements as set out in chapter 6 of the the Municipal Systems Act 2000 and performance measurement regulations. No performance report was submitted for audit purposes.
An annual performance report was not submitted. The Integrated Development Plan (IDP) did not include a budget as required.
In response to recommendations, a database on municipal regulations was established and workshops held with municipalities on these issues.
Mr Swartland explained the challenges and recommendations on access to basic and free basic services. By June 2008, 72% of the R222 million allocations had been spent; 18 municipalities had not spent their full allocation by June 2008 and two had received no initial allocation. The bucket allocation was 45% spent and five municipalities had their funds stopped. The Department prioritised projects that required funding to meet national targets and municipal staff had been trained in project management. Local Economic Development forums were established in all districts except Siyanda and capacity assessments were done in all districts.
17 municipalities ended 2007/2008 with a surplus, 11 with an accumulated surplus. All, except one, had some cash on hand despite eight having bank overdrafts that exceeded the amount of cash on hand. Creditors amounted to R291 million. Eight municipalities had creditors that accounted for more than 30% of operating expenditure. 15 municipalities managed to contain salaries and councillor remuneration within 35% of operating expenditure; one exceeded 50%.
Recoverable debt amounted to R569 million; value of recoverable debtors to total revenue was 26%. Only one municipality did not make provision for bad debt. Provision for bad debt amounted to R451m or 44% of total outstanding debt. The average number of debtor days was 95.
On average 36% of income was comprised from subsidies and grants; at 13 it exceeded 40%.
In response to recommendations hand-on support was provided. Assistance with Section 71 reports was on-going.
All municipalities were requested to submit plan of action to address issues raised by the Auditor-General.
Regional meetings were held to assist, advise and monitor. All 183 wards had ward committees, but 46 were not functional. The Department had established six indicators to rank municipalities. It identified areas where they improved and areas where no improvement was made over the three years assessed.
The Auditor-General's audit opinion on 2007/2008 financial statements was analysed and reported as follows: “20 (25) disclaimers; 0 (1) Adverse; 8 (4) Qualified opinions; 2 Unqualified with concerns raised on ‘other’ matters; and 0 Unqualified without further concerns raised” (slide 22).
Mr J Gunda (
Mr B Nesi (
Mr Gunda asked why no municipality was unqualified without further concerns raised and how the Department was dealing with the issue. The Committee would have liked to engage the Department on the six indicators chosen to rank municipalities if time allowed.
Mr Swartland said that the Department focused on training for ward committees and there had been a lot of improvement ever since.
Mr Gunda noted that the Department identified the challenges but asked why the Department could not work with other departments to solve the problems.
Mr Nesi said the Department might have done a lot in terms of progress and also asked why the 46 ward committees were not functional. He was interested in more information on how they could improve.
Mr Mmoiemang raised his concern on municipal debt and said that all Government departments which owed money should start paying.
The Chairperson was concerned about the 1% employment rate of people with disabilities and asked how the province addressed this issue. There was a general improvement from 2007 until now. He wanted the standard to go up and not down.
Progress Report on interventions in Alfred Nzo, Koukamma and Sunday’s River Valley Municipalities
Mr Sicelo Gqobana, the MEC of Local Government and Traditional Affairs in the
Ms Vuyo Zitumane, the Admistrator of the
The governance of the municipality was overwhelmed with corruption allegations and misconduct. Public participation was not effective and there were poor relations between council and administrators. An anti-corruption and fraud policy had been approved and institutionalized. The public participation and plan was approved and implemented. The financial bail out and reconciliation with Human Settlements had to be finalized. The appointment of competent staff should not be compromised and a corruption-free environment was of critical importance. Relations with line function departments improved and should be sustained as they were planning a number of projects which were previously blocked.
The Chairperson asked the Administrator of Koukamma municipality, Mr Thando Tubane, to focus on the challenges and successes.
Mr Tubane said that governance and participation had improved. The Council guidelines and rules of order had been developed and approved by the Council while the lax attitude towards corporate governance processes and the lack of organizational leadership had been addressed. Plans had been implemented to manage staff and councillor debt, and an internal audit function had been established. Financial reporting and billing management improved and the annual financial reports for 2008/09 were compiled. The process of compiling the annual financial reports for 2009/10 also began and a new financial record keeping system had been introduced using clean data.
Success was achieved in corporate services and human resources management (HRM). The 2010/11 budget had been approved and an asset register had been developed with a draft fraud prevention plan in place. A debt collection policy had been adopted and promulgated. Change management and organizational climate improvement workshops were held to improve staff morale and discipline. Systems and procedures were developed to improve the implementation and monitoring of technical projects as well as records and grant management. Funding of R177 million was obtained which improved service delivery.
The remaining challenges were that discipline of staff was not yet at a satisfactory level for ongoing achievement of organizational goals. The skills levels of employees were very low and suitable training and development needed to be implemented. The maintenance and development of infrastructure was still below standard. There was a lack of water resources in the area due to a long term drought and government intervention was required. There had been political interference in the work of the Municipality and local politicians should strive for a better balance between their oversight role and interference. The culture of non-payment for services by the community had not been completely overcome and needed more attention. The new administration of the Municipality required support from the Provincial Department of Local Government.
Mr Mzimasi Mangcotywa, Deputy Director-General (DDG), the
After the section 139(1) (b) intervention came to an end, it was submitted by a section 154 support to ensure that the gains achieved were continued. The Department staff continued to monitor the R1 million transferred to municipality in March 2010 to improve the administrative and financial systems and ensure that they were utilized for the intended purposes. The Municipality was being assisted to improve the records management system and in the development of the Work Place Skills plan.
Mr Nesi was worried about the administration of the Sunday’s
Mr Gunda expressed his deep anger at the suffering of the people. He said it was not good for the Administrator to come to Parliament and “beg” for money to serve the people and not herself. The Committee should assist municipalities where money was needed. He requested a separate joint meeting to address the challenges in the municipalities. The Committee should assist the people so that justice could be done regarding service delivery.
The Chairperson reminded the Committee that the delegations from the
The Department needed to critically look at considering outsourcing water and sanitation to the Amatola Water Board as this should not be a permanent occurrence. He asked what the Koukamma internal audit function meant and who was fulfilling that function. The staff discipline was a serious issue and serious intervention was needed by political leaders. He understood that some funds could be recovered, but for funds that could not be recovered, the responsible people should go to jail. The Chairperson welcomed the move of the Administrator from Koukamma to Alfred Nzo.
Ms Zitumane responded that the main challenge in the Sunday’s River municipality was finance related. The Amatola Water Board agreed that its assistance would be done on a service level agreement.
Mr Gqobana said that the internal audit was a shared function, but wanted this function to be performed internally. If they needed more support, the municipalities could assist in those processes.
Ms Zitumane said that shared services only provided services to a certain extent. The Municipality needed an intern who could continually attend to those matters. The Municipality could not get full attention from shared services.
Mr Gqobana said that the
The Meeting was adjourned.
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