Committee Report Adoption: Government Employee's Pension Fund Amendment Bill, Free State Oversight Visit

NCOP Finance

18 October 2011
Chairperson: Mr C De Beer (Northern Cape, ANC)
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Meeting Summary

At the outset, a Member recorded his reservations about the absence of the Chief Whip of the Committee.

Members tabled and adopted the Committee’s Report noting the adoption of the Government Employees Pension Fund Amendment Bill, without amendments. They did not believe it was necessary to speak to this, but mandated the Chairperson to make a statement if necessary.

The Committee then tabled its draft Report on the Oversight Visit to the Free State, and noted that recommendations needed to be more clearly linked to findings, and that the formatting of all Committee Reports needed to be consistent. After some technical issues were raised, a Member highlighted three points of concern in relation to municipalities visited. The Committee was particularly concerned that one forensic report had not been made available. It also noted concerns that the
provincial offices of the Department of Cooperative Government and Traditional Affairs (CoGTA) were bailing out municipalities, using funds that were not budgeted for this purpose. CoGTA was not cooperating with the Provincial Treasury in Free State, in relation to municipalities who were under administration, and this had a serious financial effect. Although this point was addressed, Members agreed that it needed further emphasis, and a stronger recommendation that corrective action must be taken. The Report also noted concerns about the state of collapse in Majepeng and Ngwathe Municipalities, and would make recommendations that this must be addressed by CoGTA, Provincial Treasury and the South African Local Government Association. Members agreed that this Report had to be debated in the House, and suggested that the debate would be enhanced if the Chairperson of the Provincial Legislature Committee, who exercised direct oversight, could also participate. It was further agreed that media statements must be made, as the situation in these municipalities was probably reflected also in others, and the state of local government should be brought to the attention of the public. 

The Committee adopted minutes of 14 June, 31 August, 8, 20 and 21 September. In relation to the minutes of 20 September, a Member recommended that the special treatment afforded to judges in terms of travelling should be extended to Members of Parliament. Some points needed to be checked in relation to the consultation process on the Government Employee Pension Fund Amendment Bill, and the researchers were asked to check the technicalities. The Committee then adopted its 4th Term programme. Members asked that the lack of capacity in the oversight visit and travel section in Parliament should be looked into.

Meeting report

Apologies and opening remarks
The Chairperson thanked the support staff for compiling reports and minutes.

The apologies were noted.

Mr B Mashile (
Mpumalanga, ANC) asked that his reservations be recorded about the absence of the Committee’s Chief Whip.

The Chairperson noted this reservation and informed him that an attendance register would be compiled, in respect of both this Committee and the Appropriations Standing Committee.

Committee’s draft Report on Government Employees Pension Fund Amendment Bill [B15-2011]
The Chairperson tabled the Committee’s Report, which noted that the Committee had recommended the adoption of the Government Employees Pension Fund Amendment Bill, a section 75 Bill, without amendments.

Mr Mashile suggested that no written Report needed to be made on the Amendment Bill, but that the Chairperson be mandated to represent the Committee, if any statement needed to be made.

Members approved and adopted the Committee’s Report.

Committee’s Draft Report on
Oversight Visit to  Free State
The Chairperson informed Members that this draft Report on the Oversight Visit to the Free State (the Report) had been circulated three times, when Members had been asked to make their input and comments. He noted that Mr B Mnguni (Free State, ANC), although he was not a Member of this Committee, had read through the Report and made comments.

The Chairperson asked the Committee now to go through the Report, page by page.

Mr Mashile noted that, although this had been raised in meetings prior to this one, the Committee Secretary should have carried through to this Report the Members’ previous comments about the way Members were listed, to ensure that all the Committee Reports followed a consistent format.

The Chairperson thanked Mr Mashile and reminded other Members that it had been suggested, in a Select Committee on Appropriations meeting, that Members should be listed with their names first, then their province, then their political party.

Mr Mashile suggested that the figures on page 12 of the Report should be lined up horizontally so that they were clearer.

Mr T Chaane (North West, ANC) made a correction to the item dealing with copper theft on page 24 of the Report.

The Chairperson suggested a correction to the abbreviation “PTO” on page 30 of the Report, saying that this should be written out in full.

The Chairperson thought that the recommendations section of the Report, on page 31, needed to be more clearly set out, and be linked more clearly to the findings.

Mr Mashile noted that, in general, recommendations should talk to findings, especially if the findings showed something unusual that had to be corrected. Some of the more positive findings would not need to have recommendations attached to them, but where corrective steps were necessary, recommendations should then be made.

Mr Mashile recalled that during the oversight visit, Members had requested a forensic report in respect of one municipality, but this was not made available. The Committee was told that it was not tabled to the Council. Members agreed that they would use their powers in Parliament to demand the forensic report, if it was not tabled timeously. He thought that this specific finding had to be coupled with a strong recommendation, to ensure that the matter did not get lost.

Mr Mashile also reminded the Committee that the most critical finding was that the provincial offices of the Department of Cooperative Government and Traditional Affairs (CoGTA) were bailing out municipalities, using funds that were not budgeted for this purpose. The Committee had questioned why the provincial department was handing out funds in this way. That issue should be strongly emphasised.

Mr Mashile added that it had also been noted that CoGTA was not cooperating with the Provincial Treasury in Free State, in relation to municipalities who fell under section 139 of the Municipal Systems Act. The Provincial Treasury was complaining because this had a serious financial effect, yet there was insufficient liaison or collaboration from CoGTA’s side. He said that all three of these issues should be reflected as findings in the Report, with the relevant recommendations attached to them.

The Chairperson again thanked Mr Mashile for his input. He noted that the first point raised was outlined in point 9.13 of the Report, which stated “Support provided by CoGTA with regard to financial assistance was of concern to the Committee, in terms of the legality thereof”. He reminded the Committee Members that the representative from Provincial Treasury was quite surprised by what CoGTA had presented and by the figures made public at that meeting.

The Chairperson added that point 9.17 of the Report stated that investigations had been conducted in various municipalities but, to date, reports had not been made public, so that was reflected as a finding and a concern of the Committee.

The Chairperson noted that Mr Mashile’s third point about the section 139 interventions was addressed in point 9.21 on page 31 of the Report, which stated that the Committee had noted concerns about the ineffectiveness of section 139 interventions, especially in Nala Municipality, despite this municipality being under administration so it could not submit financial statements. Point 9.20 stated that the Committee had noted, with concern, the state of collapse in Majepeng and Ngwathe Municipalities.

Mr Mashile thought that the Report needed to be more specific about the problem of lack of collaboration between the Provincial CoGTA and Provincial Treasury in relation to managing municipalities who were under section 139 interventions. He thought that point 10.5 of the Report could be modified to accommodate something about the relationship with Provincial Departments, without excluding National Department, and recommending that corrective action be taken.

The Chairperson agreed with Mr Mashile, noting that this specific finding and recommendation appeared in all the previous reports dealing with municipalities, and he suggested that the wording should be repeated.

Mr Mashile recalled that at some stage the Mayor of a particular municipality had tried to appear before the Committee to make a presentation, but the Committee had sent him back because there was no institutional structure, nobody had been employed by that municipality, and it was clear that no proper reports could be presented. This municipality was in crisis, and he thought there should be a recommendation specific to that municipality, so that Provincial and National CoGTA and Provincial and National Treasury would really pay attention to the municipality, and would ensure that it corrected its institutional arrangements, and helped to get people employed to run the municipality and assist the mayor. This Committee should demand that attention be paid to it by the relevant stakeholders, and this would also include South African Local Government Association (SALGA).

The Chairperson noted that point. The Report would also note the concern about the state of collapse in Majepeng and Ngwathe Municipalities, and would make recommendations that this must be addressed.

Members, after consideration, adopted the Report, as amended.

Mr Mashile suggested that the Report needed to be debated in the House, and that the relevant MECs should be invited – although he then revised his view and said that MECs could make various statements to this Committee, although it was actually the Chairpersons of the Provincial Legislature Committees who performed oversight directly. It might be useful to debate, with the administration of the House, how national committees and provincial legislature committees could liaise on debating issues, which might enhance the debate.

Mr Mashile proposed that, owing to the gravity of the findings and recommendations, that once these Reports had been tabled, there should be arrangements to conduct media interviews to communicate the findings. That would assist other municipalities and provinces facing similar issues, and would alert them to investigate and correct matters. He believed that what had been seen in the Free State was probably one example of what would be found elsewhere, and the state of local government and the activities needed to be brought to the attention of the public in South Africa.

The Chairperson thanked Mr Mashile and promised he would follow the communication lines. He thanked Members for their contributions and inputs.

Adoption of Committee Minutes
Members considered, and adopted, the minutes of 14 June 2011, without amendment, the minutes of 31 August, with the necessary corrections, the minutes of 8 September 2011, without amendments, and minutes of 21 September 2011, without amendments.

Members then considered the minutes dated 20 September 2011.

Mr Mashile recommended that the special treatment afforded to judges in terms of travelling should be extended to Members of Parliament because the same conditions applied.

Mr Mashile noted that when the Government Employee Pension Fund Amendment Bill was presented to this Committee, there seemed to be some misunderstanding. The presenter had indicated that employees and members of the Fund had agreed to the amendments, but during the consultation process it appeared that this might be a misperception. The Committee had questioned this, because it wanted to ensure that the relevant structures who would be affected by the Bill had to be consulted. The Committee had also wanted to check a point on those who made applications to access funding, but were denied this opportunity under the current law. The amendments would change the position. It should be captured that it was possible to reopen the applications once the amendment was passed.

The Chairperson noted that this was a very technical point that needed to be correctly captured, and he asked the Researchers to assist the Committee in that regard.

The Chairperson noted that National Treasury had submitted two inputs on the Bill; one from
the Cape Bar Council and submissions from the Commission on Gender Equality.

The minutes of 20 September were adopted, as amended.

4th term Committee Programme
The Chairperson informed the Committee that the programmes for the Select Committee on Finance and Select Committee on Appropriations had been approved by the House Chair. He noted that the programme was tight, and would include the Medium Term Budget Policy Statements and consideration of Appropriation and Division of Revenue Bills. The Chairpersons of the Finance Committees of Provincial Legislatures would visit in the following week.

Mr R Lees (KwaZulu Natal, DA) noted that during a Joint Whip meeting, it was noted that schedules were not always kept up to date. He asked that support staff should ensure that this happened. He also noted that the support section for
oversight visits and oversees travel was very poorly populated. He was not sure who was responsible for this but asked the Committee Secretary to report back. He asked when the Committee’s detailed programme would be received.

The Chairperson said it would be provided within the next half hour.

The meeting was adjourned.


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