SALGA, Municipal Demarcation Board & Commission for the Promotion and Protection of Rights of Cultural, Religious and Linguistic Communities Rights 2011/12 Annual Reports

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Cooperative Governance and Traditional Affairs

09 October 2012
Chairperson: Ms D Nlhengethwa (ANC)
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Meeting Summary

The Committee met with representatives of the South African Local Government Association (SALGA), the Municipal Demarcation Board (MDB) and the Commission for the Promotion and Protection of Rights of Cultural, Religious and Linguistic Communities (CRL Rights Commission) to discuss the 2011/12 Annual Reports.

The presentation from SALGA commenced with a brief introduction into its history, progress and growth strategy.  The association had maintained an unqualified audit opinion over the last three years.  There was a need to amend the existing Local Government Act to reflect changes in the funding model for SALGA, and to allow for representation and participation of SALGA at the National Council of Provinces to impact on service delivery within the municipalities.

The 2011/12 period had been a transitional year for local governments, with the largest political turnover in the sector since the advent of democratic local government in South Africa.  SALGA had been instrumental in managing the transition. The local government elections had meant that SALGA had had to elect new leadership both provincially and nationally.  The AG’s report on municipalities had indicated that SALGA must collectively build capacity of local government in critical areas such as financial governance and management. In response to this, SALGA had facilitated the establishment and effective functioning of municipal public accounts committees (MPACs) and audit committees. The total number of unqualified opinions had increased from 23% in 2004/05, to 45% in 2010/11. The number of disclaimers had dropped from 41% to 19% and adverse opinions from 6% to 2% during the same period.  Key areas of intervention identified by the AG had included capacity (competency, vacancies & training), financial governance and leadership, annual financial statements, challenges with existing laws and those in the pipeline, audit processes,
support to municipalities, and managing perceptions and the need for consequences.  SALGA’s plans to address concerns raised by the AG in its audit report of the year under review were to ensure full compliance with legislative requirements, that all deviations were motivated appropriately and proof maintained, that the request for quotation (RFQ) included the preferential point scoring criteria, and to improve internal controls and ensure that related party transactions were identified timeously. These action plans had already been put into action.

The MDB reported that it had completed the consultative process on boundary demarcation and realignment between municipalities countrywide, and was geared to sending out notices indicating the intention to review municipal boundaries.  It was currently in the process of consultation to re-determine municipal boundaries and this process would continue until October 2013.  Between November 2013 and June 2015, the consultation and legal process would be aimed at delimiting wards.  The Independent Electoral Commission (IEC) process would take place from July 2015 to April 2016.

A need had been identified to strengthen the research arm of the MDB to enhance the decision-making process, especially in the areas that directly affected communities adversely. A research unit was in the process of being set up to enhance the work of the MDB. The unit was geared towards creating partnerships with major stakeholders such as SALGA and Statistics South Africa.  There remained a need to review the legislative and policy mandate of the MDB beyond just boundary re-determination, to creating efficiency in the local government space.

The challenges currently faced by the MDB included inadequate internal skills and capacity in the organization to drive the strategy of the MDB efficiently; inadequate funding to fund all the strategic imperatives identified by the Board in the strategic planning session; anticipated budget cuts in the next three years would further hamper the effective implementation of the strategy; and a part- time Board was unable to add much value to the organization. Notwithstanding, the MDB remained focused on its mandate.

The CRL Rights Commission had received an unqualified audit report, with emphasis on matter from the AG. Matters of emphasis had related to a finding of irregular expenditure of R300 000 and wasteful expenditure of less than R2 000. The irregular expenditure had arisen from a failure to disclose a conflict of interest by bidders. There had been a marked improvement, as in the previous financial year irregular and wasteful expenditure had stood at R2 million and R90 000 respectively. Out of the 121 targets that had been set for the CRL in the year under review, 71% had been met. It had developed a five-year turnaround strategy in response to many of the issues highlighted in the AG’s report.

Members commented that the AG’s report had indicated sound financial standing in SALGA.  However, it still faced immense challenges with fraud and corruption.   They asked what SALGA was doing to monitor spending of funds. What plans did SALGA have with regard to the training of traditional leaders, to understand their roles within municipal structures?  Members questioned how SALGA planned to address the constant attack on councillors in service delivery protests.  What turnaround strategy had been put in place by SALGA to address the acute skill deficiency in municipalities, particularly in the Eastern Cape and North West provinces?

 Members expressed concern that the MDB had only one full-time board member and stated that it was important that more full-time members be appointed to the board. They asked whether the demarcation of traditional territories fell within the jurisdiction of the MDB or the Department of Land Affairs, and whether the consultation process of the MDB had involved the national COGTA and national, provincial and rural Houses of Traditional Leaders to ensure that the traditional rulers were capacitated and carried along with the process. They queried the irregular expenditure of the MDB reflected in the AG’s report and requested that the Committee be furnished with the full details and documentation of the irregular expenditure.

Members remarked that although the CRL Rights Commission had received an unqualified audit report, the AG’s comments on its leadership were disheartening and it was hoped the Commission rectified this to ensure proper oversight.  Members requested that a detailed report be forwarded to the Committee on the CRL Rights Commission’s irregular expenditure.

Meeting report

Presentation by South African Local Government Association (SALGA)
The presentation by the South African Local Government Association (SALGA) began with opening remarks by its Chairperson, Mr Thabo Manyoni, on the progress made by the Association in the Auditor General’s (AG) report, as reflected in its 2011/12 Annual Report. The association had maintained an unqualified audit opinion over the last three years.  He said there was a need to amend the existing Local Government Act to reflect changes in the funding model for SALGA, and to allow for representation and participation of SALGA at the National Council of Provinces to impact on service delivery within the municipalities.

Mr Xolile George, Chief Executive Officer of SALGA, commenced the presentation with a brief introduction into the history, progress made and growth strategy of SALGA.   The 2011/12 period had been a transitional year for local governments, with the largest political turnover in the sector since the advent of democratic local government in South Africa.  SALGA had been instrumental in managing the transition. The local government elections had meant that SALGA had had to elect new leadership both provincially and nationally. SALGA had held a successful conference from 30 August to 1 September 2011 to elect its new leadership and to set an agenda for organised local government for the 5-year period from 2012 to 2017.

SALGA had established partnerships with the Departments of Environmental Affairs, Cooperative Governance and Traditional Affairs (COGTA) and SA Cities Network in the Local Government Partnership for Climate Change. This partnership had developed a local government position on climate change and had participated in COP17 in Durban, in December 2011.  
SALGA KwaZulu-Natal (KZN) had been integrated into the unitary SALGA structure, thus strengthening the single voice of organised local government.  SALGA had successfully secured a once-off gratuity payment for non-returning municipal councillors, payable from the national fiscus.  SALGA had inducted councillors through the Councillor Induction Programme (CIP), covering 83% of councillors. In partnership with National Treasury, the Association had conducted advanced induction aimed at approximately 8 600 councillors and municipal officials responsible for municipal finances. A further 189 councillors and officials had been trained on disaster and risk management.  Final guidelines on roles and responsibilities of political office bearers had been circulated to all municipalities.

The National Executive Council (NEC) had approved the new 5-year Strategic Plan (2012-17) informed by the 276 conference resolutions passed by the national conference. The development of the plan was a journey of extensive engagement throughout 2011. This included assessing, debating and harnessing the gains made in the local government sector over the past decade and crafting a future state of the sector. These processes had ultimately delivered a strategic plan with three apex priorities, seven strategic goals and 15 strategic objectives (see document for details).

SALGA’s newly-elected national office bearers had initiated a structured relationship by meeting more regularly with the Minister of COGTA to discuss critical matters affecting local government. This process had also been extended to explore structured engagements with other critical Ministries, such as Finance, Transport and Water Affairs. At the highest inter-governmental level, SALGA had participated in the Presidential Coordinating Council and the extended Cabinet Makgotla. The SALGA positions advanced at the October 2011 Budget Forum, had been well received and had informed some of the Forum’s resolutions, including the local government equitable share formula; the division of revenue for the 2012 MTEF; municipal taxation; and SALGA’s proposal for a Local Business Tax (LBT).  SALGA had vigorously defended, and continued to defend, the section in the Municipal Systems Amendment Act implementation processes. At the last MinMec held in August 2012, an agreement had been reached to halt the avalanche of circulars that COGTA and the National Treasury had been issuing, contrary to SALGA’s positions that maintained the imperative of constitutional autonomy of local government.

The AG’s report on municipalities had indicated that SALGA must collectively build capacity of local government in critical areas such as financial governance and management. In response to this, SALGA had facilitated the establishment and effective functioning of municipal public accounts committees (MPACs) and audit committees. The total number of unqualified opinions had increased from 23% in 2004/05, to 45% in 2010/11. The number of disclaimers had dropped from 41% to 19% and adverse opinions from 6% to 2% during the same period.  Key areas of intervention identified by the AG had included capacity (competency, vacancies & training), financial governance and leadership, annual financial statements, challenges with existing laws and those in the pipeline, audit processes,
support to municipalities, and managing perceptions and the need for consequences. The presentation outlined SALGA’s action plan to tackle each of the identified areas (See document).

SALGA had an increasingly prominent presence in Parliament, particularly in the National Council of Provinces (NCOP).  This interaction had allowed SALGA to raise strategic political priority areas at the level where legislation was debated and assented to. This had provided an excellent lobbying and advocacy platform. SALGA had participated in the NCOP Joint Planning Forum with provincial legislatures, which had provided an opportunity for strategic political input into the programme of the NCOP, and had resulted in the proposal that the NCOP had a week in its parliamentary programme focused mainly on local government.

SALGA had played a prominent role in strengthening its international profile in various support initiatives for local government in the SADC region. Of particular note was the support SALGA continued to provide for the institutional reforms of the Swaziland Local Government Association (SWALGA), the Namibian Local Government Association (ALAN), the Botswana Local Government Association (BALA), the Zimbabwe Local Government Association (ZILGA) and the Urban Councils of Zimbabwe (UCAZ). Tangible programmes of co-operation in the functional areas of local economic development, municipal finances, infrastructure planning and maintenance and city development strategies had been implemented, with SALGA playing a leading role in strengthening sister associations in SADC.  Another tangible example of SALGA’s international support had been the initiation of a Coastal Cities Programme, linking the city of eThekwini with the city of Maputo, focussing on the areas of coastal management.

With regard to councillor support, SALGA had introduced certain key improvements with the 14 December, 2012 notice, including an across-the-board increase in salaries, allowances and benefits of 5% per annum, effective retrospectively from 1 July 2011, and recognition of chairpersons of Section 79 committees.  Key proposals for the 2012/13 notice included legislation be amended to have the same process applied to all public office bearers across the three spheres of government; total review of the system of support for councillors be conducted urgently, taking into account the principle of uniformity across the three spheres of government; and the remuneration of councillors be paid out of the central National Revenue Fund instead of municipal budgets.

SALGA had successfully engaged the Minister of Finance at the Budget Forum on a number of matters and among other things had lobbied for a local government fiscal framework review, the introduction of a local business tax, the need for support to municipalities on revenue collection -- such as the scrapping of Administrative Adjudication of Road Traffic Offences (AARTO) -- and the need for a differentiated approach for funding of municipalities.  Planned submissions for the current financial year included a response to the proposed new Local Government Equitable Share formula, funding challenges of district municipalities, proposals for interim arrangements to deal with revenue shortfalls experienced by municipalities where Eskom was the provider of electricity, and inputs on the funding arrangements for the host cities of the African Cup of Nations tournament in 2013.

SALGA’s plans to address concerns raised by the AG in its audit report of the year under review were to ensure full compliance with legislative requirements, that all deviations were motivated appropriately and proof maintained, that the request for quotation (RFQ) included the preferential point scoring criteria, and to improve internal controls and ensure that related party transactions were identified timeously. These action plans had already been put into action.

Presentation by the Municipal Demarcation Board (MDB)
Mr Landiwe Mahlangu, Chairperson of the Municipal Demarcation Board (MDB), provided Members with an overview of the MDB’s progress in the year under review. The MDB had completed the consultative process on boundary demarcation and realignment between municipalities countrywide, and was geared to sending out notices indicating the intention to review municipal boundaries. The MDB had resumed the assessment of municipal capacities, and had completed the process and re-launched the municipal capacity report.  Care had been taken to ensure the current report represented the input of all relevant stakeholders and had a wider appeal. There had been a resignation of one the board members, bringing the total number of board members to eight. This was still above the prescribed minimum threshold of seven. The resignation had been brought to the attention of the Ministry. A new CEO, Ms Gabusile Gumbi-Masilela, had been appointed and had assumed office in August.

Ms Gumbi-Masilela opened the MDB’s presentation with a brief introduction on the vision and background of the MDB and the current legal timeline and framework on the boundary demarcation process. The MDB was currently in the process of consultation to re-determine municipal boundaries and this process would continue until October 2013.  Between November 2013 and June 2015, the consultation and legal process would be aimed at delimiting wards.  The Independent Electoral Commission (IEC) process would take place from July 2015 to April 2016.

In the year under review, progress had been made in the acceleration of the consultative process with affected stakeholders, as required in the legislation. Proposals received had been categorised into three types for ease of reference and processing:
           Type A: re-determinations -- catering for minor technical boundary adjustments, aligning to the cadastral features.
           Type B: this dealt with more significant adjustments that might re-align a community, ward or farm or could have some effect on the lives of communities, but may be necessary and the impact may be positive.
           Type C: these were major configurations of municipalities that might include amalgamation or demarcation of a new type of municipality.
A new capacity model had been finalized and implemented. The review of the functioning of the MDB had led to a major organizational structure review to ensure proper positioning and that it delivered on its mandate.


Total income for the year under review had been R39.1 million, which included R641 000 in income from other sources, such as the sale of maps.  Expenditure during the period was R36 million, resulting in a surplus of over R3 million.  Expenditure had been within budget. The MDB had an accumulated surplus of R20.2 million, and was currently engaged with National Treasury on the release of funds from the excess to help the MDB to fulfil its mandate. The total commitments of the MDB stood at R5.2 million. The presentation provided details of the MDB’s expenditure for the year under review (see document).

The AG had given the MDB an unqualified audit report, with emphasis of matter. The matter of emphasis was with regard to irregular expenditure of R627 675.  The irregular expenditure had arisen as a result of proactive efforts by the MDB to conduct all the activities during the period when the organization did not have adequate finance staff.  During this period there was no Chief Financial Officer nor Supply Chain Management (SCM) staff.  It was not because of mismanagement, but owing to non-compliance with SCM procedures -- and therefore became irregular through contravention of the PPPFA.  Poor filling systems were also problematic in the organization and contributed to the irregular expenditure.

For the current strategic plan, the MDB had identified strategic themes to focus and guide the organisation over the next few financial years to 2014/15.  These were the determination and re-determination of municipal boundaries and the categorisation and re-categorisation of municipalities; assessment of the capacity of metropolitan, district and local municipalities;
ensuring the MDB was supported by effective and efficient organisational processes, systems and practices; ensuring good governance; ensuring sound financial management; and improving and enhancing stakeholder relations.

The MDB had reviewed its legislative mandate to accelerate public participation.  Board members had been assigned to various provinces to enhance and elevate the status of consultation and public participation. This process had escalated engagement processes and other areas of operations, including the travel around the country to ensure effective participation.  Further development strategies devised had included building capacity for stakeholder management and public participation, aligning with major public participation structures on the ground,
ensuring critical awareness was created among all communities, partnering with DCOG to drive public participation, aligning with critical media such as community radio stations and local community newspapers to reach more communities, and positioning the MDB in policy debates on the creation of efficiency at local government level.

A need had been identified to strengthen the research arm of the MDB to enhance the decision-making process, especially in the areas that directly affected communities adversely. A research unit was in the process of being set up to enhance the work of the MDB. The unit was geared towards creating partnerships with major stakeholders such as SALGA and Statistics South Africa.  There remained a need to review the legislative and policy mandate of the MDB beyond just boundary re-determination, to creating efficiency in the local government space.

The challenges currently faced by the MDB included inadequate internal skills and capacity in the organization to drive the strategy of the MDB efficiently; inadequate funding to fund all the strategic imperatives identified by the Board in the strategic planning session; anticipated budget cuts in the next three years would further hamper the effective implementation of the strategy; and a part- time Board was unable to add much value to the organization. Notwithstanding, the MDB remained focused on its mandate.

Presentation by the Commission for the Promotion and Protection of Rights of Cultural, Religious and Linguistic Communities (CRL Rights Commission)

Due to time constraints, the Chairperson of the Committee requested that the presentation by the Commission for the Promotion and Protection of Rights of Cultural, Religious and Linguistic Communities (CRL Rights Commission) be summarised.

Rev (Dr) Wesley Mabuza, Chairperson CRL Rights Commission, provided an overview of progress made in the year under review. The CRL had successfully canvassed for a National Consultation Convention to be held in February 2013, and proposals had been sent to include hearings on religious holidays and public holidays.

The Commission had received an unqualified audit report, with emphasis on matter from the AG. Matters of emphasis had related to a finding of irregular expenditure to the tune of R300 000 and wasteful expenditure of less than R2 000. The irregular expenditure had arisen from a failure to disclose a conflict of interest by bidders. There had been a marked improvement, as in the previous financial year, irregular and wasteful expenditure had stood at R2 million and R90 000 respectively. Out of the 121 targets that had been set for the CRL in the year under review, 71% had been met. It had developed a five-year turnaround strategy in response to many of the issues highlighted in the AG’s report.



Discussion
Discussion on SALGA
Nkosi Z Mandela (ANC) remarked that the AG’s report had indicated sound financial standing in SALGA, yet it still faced immense challenges with fraud and corruption. What was SALGA doing to monitor the spending of funds?

The Chairperson queried the decline in mid-term expenditure, with R262 million pending for payment of councillors’ gratuities and R727 million allocated for disaster relief but not spent.

Mr Speedy Mashilo, SALGA NEC member, responded that this remained a major concern for SALGA. The shortage of skills in municipalities had contributed to the under-spending problems, as well as legislation, which was cumbersome and more problematic than helpful in its application.

Mr Thabo Manyoni, SALGA Chairperson, added that MPACs had been established across municipalities for the purpose of addressing fraud and corruption issues. SALGA was ensuring that MPACs assisted with reporting in this regard.

Mr Mandela noted that during the local elections, internal factions within parties had led to rigging of elections and wrong candidates eventually assuming office.  What was SALGA doing to ensure the right councillors were voted into office?

Mr Mashilo responded that prior to the last elections, SALGA had approached parties to insist that 70% of councillors were retained. The opposite had happened and in Mpumalanga, 20 out of the 21 municipalities all had new mayors.  Only one mayor had been retained.
 
Mr Manyoni added that political parties needed to deal with the consequences of their decisions on local governments.  After the elections, 70% of councillors had been new and it had become SALGA’s responsibility to capacitate the new councillors, resulting in years of experience being lost.

Mr Mandela suggested that SALGA develop a mechanism to blacklist councillors implicated in cases of financial misappropriation or corruption from vying for office in the future, and that the list be made available on SALGA’s website.

He asked what plans SALGA had with regard to the training of traditional leaders who were stakeholders to understand their roles within municipal structures.

Mr Mashilo responded that this was an issue SALGA had taken up in conjunction with the various Sector Education and Training Authorities (SETAs) in municipalities and COGTA.

Mr Mandela referred to the skills competency deficiencies in the Eastern Cape and North West provinces, and asked what turnaround strategy had been put in place to address this.

Mr Mashilo responded that SALGA was a voluntary association, with the objective of strengthening local governments. Appointments were carried out by the municipalities, led by political parties. SALGA had distributed its circulars on appointment procedures and had indicated that it must be represented on appointment panels.

Mr Manyoni added that SALGA was pressurising COGTA to fill critical posts and this process needed to be speeded up.

Mr Mandela asked what SALGA was doing to ensure its visibility on appointment panels.  Did SALGA had performance and deliverable agreements in place to ensure proper monitoring in the municipalities?  How many senior manager positions were vacant in the 83 municipalities and when would the positions be filled?  What were the plans for South African coastal cities and what was SALGA’s role in the SADC in relation to its inter-governmental relations?

Mr Manyoni replied that it was important to bear in mind that SALGA was a local government association. It played an obvious role with regard to peer reviews and attracting investment from the region to the country. It had recently been approached by Southern Sudan with regard to assisting in setting up similar structures. SALGA needed to be properly funded to play an even more visible role.

Ms W Nelson (ANC) commended SALGA’s record of an unqualified audit over the past three year and remarked that there was still room for improvement.  She asked whether SALGA conducted monitoring and evaluation of induction programmes for councillors to determine their effectiveness.

Mr Mpho Nawa, SALGA Deputy Chairperson, responded that there had been, and would continue to be, monitoring of the councillor training programmes.  Training was a continuous process and SALGA created a platform for the development of councillors.

Ms Nelson commended SALGA on the improvement in the drive to pay past councillors their pending gratuities.  She asked whether SALGA had a working relationship with the Financial and Fiscal Commission (FFC) in relation to its intergovernmental relationships.

Mr Nawa replied that SALGA did in fact have a working relationship with the FFC, the details of which were contained in the presentation.

Ms Nelson asked what SALGA’s role was in the four municipalities identified in the municipal audit outcomes.

Mr Manyoni replied that SALGA, in conjunction with COGTA and the Minister, had taken a decision to ensure the identified municipalities submitted monthly reports on their performance. The reports were to be based on the outlined audit plan of the AG.

Ms Nelson asked what SALGA’s action plans were, to address the AG’s comments on the oversight role with regard to the leadership of SALGA. There was need for feedback on the implementation of these plans.

Mr Manyoni responded that where political instability existed, it was difficult to expect improved performance from the leadership. SALGA was mindful that other role players needed to be brought on board to ensure proper service delivery to the people. The political leadership of municipalities must show genuine interest in the work being carried out within their municipalities and not just stop at signing off contracts. SALGA was at the forefront of inculcating a culture of leadership leading, so that the administration was free to perform its duties.

Mr J Matshoba (ANC) asked how SALGA planned to address the constant attack on councillors in service delivery protests.

Mr Mashilo responded that councillors had constantly been at the butt of service protests in recent times. SALGA had raised the issue with the executive and hoped for legislative intervention to ensure councillors’ properties were covered by the State.
 
Mr Nawa added that it appeared the Committee had huge expectations of SALGA.  It was necessary to note that joint efforts would be more productive in tackling the issue, rather than solo efforts by SALGA. It was pertinent that the state took up the responsibility of protecting councillors and their properties.

Mr Mandela, citing examples from oversight visits, added that many of the councillors were at the root of the violence targeted at them, with their underhand dealings and corruption within the municipalities, which left citizens angry and waiting for an opportunity to attack.

Mr Matshoba asked what plans were in place to address the skills shortage with regard to municipal managers.  He noted that municipalities still received grants despite a dire lack of capacity in some of the municipalities, hence ample ground for corruption and irregular practices existed. How did SALGA plan to address the shortage of skills?  When did SALGA plan to move to a ‘Clean Audit’ rating by the AG.

Mr Mashilo responded that the difference between an unqualified audit and a clean audit was only a technicality of terms. However, SALGA hoped to achieve a clean audit in the near future, though it was impossible to put a time frame to this.

Mr Nawa added that SALGA was not opposed to attaining a clean audit and had made improvements over the years. SALGA was currently engaged with the AG to ensure a clean audit became a reality.

The Chairperson commended the improvement in SALGA’s audit outcome as reflected in the AG’s report, and stated that there was room for improvement. The high use of consultants in the North West and Limpopo was of concern to Members of the Committee.

The Chairperson remarked that it was necessary for SALGA to monitor the establishment of MPAC’s in the Free State and Western Cape.  She asked how SALGA planned to address the continued hiring of incompetent staff in municipalities.

The Chairperson questioned whether there was a need for amendments to ensure MPAC committee members were full-time, as provided under section 78.

The Chairperson requested that SALGA forward written responses to the Committee for questions that had not yet been answered.

Discussion on Municipal Demarcation Board
Mr Matshoba expressed concern with regard to the board having only one full-time board member and stated that it was key that more full-time members be appointed to the board. The presentation had indicated that these board members, who were not full time board members, had been assigned to provinces to coordinate the public participation process. It was inevitable that the end result of the consultation process was bound to be questionable.

Mr Landiwe Mahlangu, Chairperson MDB, responded that the MDB shared the concerns with regard to the number of full-time board members. The current capability of the board was not so much inadequate, as it was insufficient. The MDB would engage with the Department to review its options, as different orientation and skills sets would complement the present board.
 
Ms Nondumiso Gwayi, Deputy Chairperson MDB, added that the MDB had tried within its limitations to cover as much as possible with regard to public participation. There was a need to ensure that the entire country had been covered, as more consultation with the citizenry would ensure a better understanding of the process.

Mr T Bonhomme (ANC) commended the presentation by the MDB. He asked what steps had been taken to ensure the irregularities highlighted in the AGs report would not be repeated.

Ms C Mosimane (COPE) commended the presentation by the MDB and questioned what actions were being taken to ensure adequate capacitation of the board, and why a training and development unit had not been established within the board to oversee this.

Mr Mandela commended the MDB’s presentation, stating it was a comprehensive report. He noted that the vision of the board did not cover demarcation broadly speaking, and simply focused on municipalities. Who were the stakeholders with which the MDB worked?  Was the demarcation of traditional territories within the jurisdiction of the MDB or the Department of Land Affairs?

Mr Mahlangu responded that demarcation was not an exclusive preserve of the MDB. The MDB’s mandate was focused on municipal boundaries and it had no mandate to determine traditional areas.

Ms Gwayi added that although tradition areas did not fall within the mandate of the MDB, an executive decision had been taken to assist the Department in aligning the boundaries of traditional areas with municipal boundaries. There was focus in the on-going process to ensure that traditional areas were not intentionally divided. The MDB was working with municipalities and encouraged them to assign staff principally to cover boundary demarcation on a consistent basis, rather than on a one-off basis during elections.

Mr Mandela asked what steps the MDB had taken to with regard to realignment and adjustment of boundaries to identify kingdoms in rural municipalities.  Had the consultation process involved the national COGTA and the national, provincial and rural Houses of Traditional Leaders to ensure that the traditional rulers were capacitated and carried along with the process?

Mr Mahlangu responded in the affirmative, and confirmed that lines of communication had been opened between the MDB and the various traditional houses on the demarcation process.

Ms Gwayi added that the MDB had shown its willingness to capacitate traditional rulers in this regard,and had raised the issue with the national COGTA.

Mr Mansela sought clarification on the 57% of the budget allocated to staff, comprising 26% administration expenses and 31% employee benefits, and asked what had happened to the funds which had been earmarked as irregular expenditure in the AG’s report.

Mr Seth Radebe, Chairperson of the MDB Audit and Risk Committee, responded that the expenditure had been categorized by the AG as “irregular”, and not “fruitless” or “wasteful.”  It had been incurred in the process of delivering the mandate of the MDB -- goods had been delivered and services rendered. It had been categorized as irregular by the AG because of irregular handover processes between the outgoing and incoming Chief Financial Officers in ‘SDB Forms’- disclaimer of interest forms usually signed on bids above R30 000 by bidders. The forms had been completed, but due to missing files, were unavailable at the time of the audit.

The Chairperson requested that the Committee be furnished with the full details and documentation of the irregular expenditure.
 
Mr Nkosi questioned the R6.7million allocated to boundary determination in the budget and asked if this was not a duplication of roles and expenses with the Department of Land Affairs.

Mr Mahlangu responded that there had been some confusion in this regard and the Committee was needed to specifically spell this out.

Mr Mandela asked what integrated system approach with other stakeholders the MDB envisaged in executing its functions.

Ms Nelson questioned whether the filing system of the MDB, which had allegedly given rise to the irregular expenditure report, had been sorted out.

Mr Mahlangu responded that in small organisations such as the MDB, when key officials left, the proper handing-over procedures were not always followed and this had given rise to the irregular expenditure report.

Ms Nelson asked what research methodology had been used in the assessments of boundaries carried out by the MDB.

Ms Gwayi responded that a steering committee had been established by the MDB in conjunction with the Department of Land Affairs, National and Provincial Treasury, SALGA, etc, to ensure that the report was reflective of stakeholders’ positions. The final report had an in-depth analysis up to district levels, and was a one-stop information portal for data at the municipal level.

Ms Nelson commended the MDB for its efforts with regard to the public participation process and advised that there was need for wider publicity.

Ms Mosimane questioned how people in rural areas received the circulars of the board without access to the internet.

The Chairperson noted that most of the publicity with regard to the public participation process had been through the use of local media, as indicated in the presentation. She encouraged the MDB to make use of the resources within the constituency offices in municipalities for wider reach, especially in the rural areas.

Mr Mahlangu responded that the public participation process was being geared structurally to perform better. The MDB had engaged the offices of the speakers and party liaisons, but would in future engage with constituency officers, as suggested.

The Chairperson asked for clarification on the MDB’s suggestion to review the legislative mandate on accelerating public participation and requested that it forward written responses to the Committee for questions that had not yet been answered.

Discussion on CRL Right Commission
Mr Bonhomme remarked that although the Commission had received an unqualified audit report, the AG’s comments on its leadership were disheartening.  He hoped the Commission rectified this to ensure proper oversight.

Mr Mandela questioned whether the Commissioner that died and the Commissioner that resigned, had been replaced.  He asked that a detailed report be forwarded to the Committee on the Commission’s irregular expenditure

Ms Nelson requested that the Commission forwarded to the Committee its plan to address the issues highlighted in the AG’s report.

The Chairperson requested detailed progress report on cases of intervention by the Commission and responses on its public participation process, and written responses to issues raised by Members.

The meeting was adjourned.

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