Department of Cooperative Governance report back on Committee recommendations

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Cooperative Governance and Traditional Affairs

15 August 2011
Chairperson: Mr L Tsenoli (ANC)
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Meeting Summary

The Department of Cooperative Governance had been asked to return to the Committee to give a further report on matters that the Committee had questioned during its last presentation. The Department gave some reports but noted that other matters were still under investigation and full reports were requested on these within the next two weeks. The Department reported that National Treasury was still engaged in separating the budget votes of the two departments of Cooperative Governance and Traditional Affairs. Information on legislation that possibly impeded service delivery was still being sought. Further information was also still being sourced on the Community Works Programme (CWP), although the Department had given consideration to how the programme was configured, and concluded that the programme should be managed at the local level, with input from local chiefs who were knowledgeable about the circumstances of the residents. The indigent register, was currently unreliable and not up to date. 

Members asked what percentages of the Local Economic Development budget were paid to various categories, the criteria on indigency, whether this problem was local or national in nature and what the Department was doing to try to correct it and ensure compliance. They also enquired if the Department was on track to meet the targets for 2014. More details were requested on the anti-corruption inspectorate, including its staffing and the types of corruption addressed, as well as the content of the instructions to the Hawks, and whether grant spending would be included as part of the focus. Members wanted to know if there was ringfencing of funding for maintenance, and what the problems were in this regard, and whether the Sector Education and Training Authority was involved. The Chairperson also called for a detailed report on irregular expenditure in municipalities, including the interventions that would be taken. Members were also interested in alignment of budgets, and resourcing of communities. The Committee was not satisfied with the report on disaster management and called for further details on this as well. The Chairperson said that lack of funding was a serious concern. Members also asked what was being done to create jobs, noting that although the capital spending had increased there appeared to be a decrease on labour spending, felt that the equitable share formula was not working, and a different strategy was needed, as well as different grading for municipalities. They thought that closer monitoring of the Community Work Programme was required, and the Department was asked to investigate the position in a number of named municipalities, and report back. 

Meeting report

Department of Cooperative Governance report back on Committee recommendations
Mr Themba Fosi, Acting Director General, Department of Cooperative Governance, apologised to the committee for the absence of the Acting Minister, Deputy Minister and Director General. He noted that this presentation was given in response to the issues raised by the Committee, but noted that because of the short time frames provided for the response, there were some areas that still needed improvement. The Department of Cooperative Governance (DCOG or the Department) would therefore return with a comprehensive report on those areas at a later stage.

Dr Keneilwe Sebego, Chief Operations Officer, DCOG, noted that in addition to the presentation detailing the responses of the Department to questions posed by the Committee, he would also present a summary of financial expenditure for the current financial year.

Dr Sebego providing clarity on some questions raised by the Committee. The Department had been asked to provide clarity on the relationship between DCOG and the Department of Traditional Affairs. Both departments fell under the Ministry of Cooperative Governance and Traditional Affairs. National Treasury was presently engaged in separating the budget votes of the two departments.

The second question by the Committee was whether there was legislation that impeded service delivery by the Department.  Dr Sebego said that this information was still not available and the Department would report back on this point as soon as it had comprehensive information on the matter.

Another question by the Committee related to the Community Works Programme (CWP), and here too, further information was required before reporting back to the Committee. However, he could report that the Department had given consideration to how the programme was configured, especially in rural communities, had met with managers, and had come to the conclusion that the programme should be managed at the local level by the different communities where the CWP was established. In addition, there should be representation of and input from the traditional leadership in that particular area. Dr Sebego pointed out that this was to assist with the indigent register, which was currently unreliable and not up to date, as the respective chiefs would be able to help in pointing out who should be the beneficiaries of the programme.

Discussion
Ms M Wegner (DA) asked, in regard to the Local Economic Development (LED) budget, for an indication of what percentages were paid to the project management unit, to managers of the LED, and to the people carrying out the work. She said that there needed to be more information made available on  the irregular expenditure. An explanation was also required about what criteria on indigency were adhered to by chiefs in a particular area.

Mr P Smith (IFP) asked whether the problem about indigent registers was a local or national problem. If local municipalities were obliged to have these registers, according to the Indigent Register policy, then he wished to know what measures were being taken to ensure that they did comply.

Mr Smith asked, in regard to the 2014 targets, whether the Department had broken these down to shorter milestones. He also wanted an indication of whether the Department was meeting those targets currently.

Mr Smith wanted more information about the anti-corruption inspectorate, asking what exactly the problem was, what measures were being taken, and what kind of corruption was being addressed.

Mr Smith noted that municipalities were reporting problems with decaying infrastructure but asked why municipalities were being allowed to under spend on maintenance, whilst also in some instances spending money on new infrastructure. He asked why it was not mandatory for them to put a certain percentage of the capital grant to maintenance.
Ms W Nelson (ANC) also enquired about decaying infrastructure, particularly if there had been any communication with the Construction Sector Education and Training Authority (SETA).

Ms Nelson asked if any programmes had been established to deal with the scarce skills, especially within the municipalities.
Mr J Lorimer (DA) asked what exactly the Hawks would be looking at, and what was contained in the Memorandum of Understanding (MOU) with that team in regard to anti-corruption initiatives. She questioned whether this team would only be looking at the Municipal Infrastructure Grant (MIG) spending, whether it would be investigating whether the grants had been properly spent, and if it would be looking into spending in past financial years. He further asked what would happen if misuse of funds was discovered.

Ms D Nlhengethwa (ANC) asked whether there was any relationship with the Department of Public Works in regard to the decay and maintenance of old infrastructure.

Mr Smith asked, in regard to the intention to employ a head of inspectorate, whether that body had been appointed, and, if so, details of the structure, how many people were employed, and what their skills were.

The Chairperson noted that, as the Minister had mentioned, more support was required for comprehensive infrastructure development plans and maintenance. He would like to hear more about that, and what plans were being put in place.

The Chairperson also asked about corruption issues, and called for a detailed report in particular on the identified amount of R140 million in irregular expenditure in municipalities. This report should set out the areas identified, what the issues were, and what intervention would be taken to deal with this, saying that a full response on this would then enable the Committee to monitor the progress.

The Chairperson also asked who had been employed as Inspector, and called for details on that person’s capabilities. He asked what specific strategy had been employed in fighting corruption.

The Chairperson also wanted to know to what extent the local budget was in alignment with the provincial and national budget, what resources were being made available to communities, and whether this too was in accordance with the budgets. In this regard, he said that an evidence based report would be very helpful.

The Chairperson noted that the Committee was not happy with the response on disaster management, as it was not considered adequate. In particular, the Committee wished to know if there had been any centres established in disaster-prone communities, and whether they were operational , in order that the Committee could evaluate their effectiveness, as well as their state of readiness to deal with the extreme climate changes that were occurring.

Ms Nelson asked how the Department could assist district municipalities in utilising municipal buildings instead of constructing their own, pointing out that the construction costs were high and other buildings were lying vacant.

Dr Sebego replied that the Department had taken note of the areas in which a more comprehensive report must be given to the Committee. In answer to the questions on indigent registers, he noted that the main difficulty that the Department experienced was that the registers were not up to date. This problem was both a local and national one. This was the reason why the Department required chiefs’ leadership to assist and verify the register, as chiefs were more informed about their communities.

Dr Sebego said that the Department was mostly on target for 2014, and where it had fallen behind on some, the Department was working hard to bring itself up to speed. Monthly performance plans were discussed between the Director General and units.

Mr Fosi added that Cabinet had taken a decision to implement task teams and operational plans in municipalities that had the highest backlogs for basic service delivery and the eradication of informal settlements. The Department would return with a written report on what had been achieved.

Dr Sebego answered questions in relation to municipalities using the money allocated to them correctly. The Department had set a rule that a certain percentage should be put towards maintenance of facilities, but there were still issues of misuse, including municipalities that had used MIG grants to pay salaries. However, the Department was also in the process of establishing technical support units who would be working at an executive level, as “eyes and ears” of the Department in all provinces, in order to ensure that issues were addressed.

Dr Sebego said that there were scarce skills, and the Department had put aside budget to finance a bursary to train engineers and technicians. There would also be follow-up to ensure that students were mentored, and did qualify and were placed into different municipalities. In addition, it was a condition of their contract that they must return to work in their areas of origin.

Dr Sebego confirmed that other questions not addressed here would be set out in extensive and full reports at a later stage, once the necessary information was available.

Mr Fosi said that another difficulty with operations and maintenance arose because of National Treasury budget report format. This format did not contain a separate line item for repairs and maintenance. This was really an accounting issue. However, the Department was also working on a municipal standard chart of account, which should be used uniformly by 2014. In the interim the Department had issued a guideline as to how municipalities could spend on operations and maintenance. The Department and National Treasury had established a task team to look at addressing issues of lack of funding for maintenance.

The Chairperson noted that lack of funding was a huge concern because a number of municipalities had complained that they had in some cases needed to use the maintenance percentage for more urgent matters. Whenever infrastructure was set up and a budget was given, it should incorporate maintenance plans.

Mr Fosi also discussed the relationship between municipal and district municipalities confirming that some municipalities did assist each other on infrastructure. For instance, in Mafikeng, the municipality donated land to one of the district municipalities, in order to assist with Disaster Management Centre. However he did believe that municipalities should offer support from the initial stages, including project management and supply chain management, right through to the implementation stage.

Mr Fosi confirmed that the Department would return with more comprehensive information on Disaster Management and the alignment between the national and provincial budgets.

Mr J M Matshoba (ANC) asked what the Department was doing to create jobs in municipalities, noting that in many cases, projects were being outsourced. This, to his mind, defeated the purpose completely, and did not empower people in those communities, who may already have the skills to carry out certain projects.

Mr Smith asked what was being done, in terms of the LED initiative, to create, rather than shed jobs. The National Treasury and municipal sector had confirmed that there was an increase in capital spending but a decrease in labour spending.

Mr Smith also stated that the equitable share and funding formula was not working. This was a fundamental problem that affected lack of funding in municipalities, and that poorer communities were being treated badly. He was not happy with the Department’s response on this question, and insisted that a more detailed strategy report was needed.

Ms Wegner asked about monitoring of the CWP, as she believed that project managers were not doing their jobs properly nor overseeing the projects as they were supposed to do. She asked what the Department was doing to deal with this problem, and ensure that the managers involved had the necessary capabilities and were doing their jobs.

Ms Wegner added that she believed that municipalities should be graded on competency, rather than funding, because it then created the problem of high-graded municipalities having a large amount of funding although their capacity and efficiency was poor.

The Chairperson requested that the Department must investigate several municipalities’ administration, their infrastructure grants and patterns of expenditure.

The Chairperson also advised the Department to obtain the presentation and documentation made by South African Municipal Workers Union (SAMWU) on the effects of climate change. He thought that the Department’s responses on green issues were in adequate.

Mr Matshoba also proposed that the Department must look at the Machabeng community and municipality, who had also had hired consultants to do certain work for them, whilst the conditions in that community remained poor, especially in terms of sanitation and lack of clean water. He asked that the Department must follow up on what had been done, and try to fast track the process.

Mr Z Mandela (ANC) asked the Department to enquire about R140 million that the Buffalo City Municipality could not account for. He requested a full investigation and full report about the findings.

Ms Nelson asked the Department to also investigate the R50 million in equitable share that was given to the Tokologo Municipality before the end of the last fiscal year. She wanted to know what its expenditure was, and the reason for which this amount was granted.

Mr Fosi noted that the DCOG was currently working with Treasury towards an inter governmental fiscal relations summit, to be held early in 2012. He added that issues such as the funding formula to municipalities and infrastructure funding issues would be investigated, and that there was a technical team working towards the Summit.

Mr Fosi also noted that some municipalities were graded as low municipalities, due to the fact that there were no economic opportunities there, and they were thus unable to generate revenue and would continue to be dependent on the national equitable share. There were different categories and classifications, and grading was not solely based on capacity or funding.

He confirmed that in regard to those municipalities about whom Members had raised questions, the Department would conduct a full investigation and report back to the Committee.

He further apologised that he presentation on the National State of Fire Services could not be given as the relevant official was not available to present on it.

Mr Lorimer asked when the necessary reports would be provided.

The Chairperson asked that these should be ready within two weeks, and should provide all the outstanding information.

Mr T Botha (COPE) thanked the Department for the reports and responses, and commended it for outlining so honestly the areas in which it was not sure of the issues.

The meeting was adjourned.


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