Municipal Infrastructure Support Agency (MISA) Roles and Responsibilities: MISA briefing

Meeting report

Chairperson’s opening remarks
The Chairperson apologised on behalf of Nkosi Z Mandela (ANC) and Mr J Steenhuizen (DA) who were not able to attend the meeting.  She briefly noted that most municipalities did not have qualified technicians and the Municipal Infrastructure Support Agency (MISA) was formed in order to overcome this shortcoming.  She pointed out that 108 municipalities and 24 districts were receiving special attention by MISA and that MISA assisted the municipalities with using Municipal Infrastructure Grant (MIG) funds.  She then welcomed the officials from MISA. 

Municipal Infrastructure Support Agency briefing on their roles and responsibilities
Mr Ongama Mahlawe, MISA Acting CEO, thanked Committee for allowing MISA this opportunity to explain its function. 

Mr P Smith (IFP) interrupted Mr Mahlawe and asked for an updated version of the presentation, since the presentation he had received was different to the one being projected.  Several other Committee Members also had an outdated version of the presentation.

Mr Mahlawe apologised for this inconvenience and provided everyone with the latest version. The presentation explained MISA’s positioning as a government component and MISA’s key features, the difference between MISA and Siyenza Manje, MISA’s vision and mission as well as its core mandate, role and responsibilities.  Mr Mahlawe continued to describe MISA’s key strategic objectives and MISA’s key support programmes, namely the Municipal Technical Support Programme, Sectoral Support, Coordination and Grants, Capacity Development Programme and Vendor, Legal and Contract Management.  Next, he examined some highlights of current support to municipalities, including technical support, municipal capacity building and sector and grant support.  Finally, he explained the reason for underspending on 2012/12 Budget, discussed the major challenges faced by MISA and concluded with a brief overview of MISA and a discussion of the way forward. 

MISA was allocated its own operational budget of R820 million, with R262 million allocated for the 2012/14 financial year, R274 million for the 2014/15 financial year and R284 million for the 2015/16 financial year.  MISA entered into a memorandum of understanding with the municipalities that it supported to ensure that municipalities were not passive recipients of technical support.  While municipalities tended to ignore support or failed to comply with support provided, MISA had the necessary authority to strengthen commitment from all partners.  While a myriad of support programmes were already provided to municipalities, these did not achieve the desired impact.  MISA thus purposed to coordinate this support and ensure that municipalities were able to benefit from the available support.

Mr Mahlawe identified the head of each key support programme.  Mr Pieter Venter, Senior Manager of MISA, headed the Municipal Technical Support Programme. Mr Khwathelani Bologo, Senior Manager of MISA, headed Sectoral Support, Coordination and Grants. Mr Zakhele Mnqayi, Executive Manger of MISA, headed the Capacity Development Programme, and Mr Ntandazo Vimba, Executive Manager of MISA, headed Vendor, Legal and Contract Management.  The Monitoring and Evaluation system was still in development. 

MISA had 68 technical (engineering and planning) professionals deployed to support a total of 107 municipalities throughout the country.  In addition, 25 Professional Service Providers (PSPs) had been contracted and assigned to support prioritised municipalities.  At the time of the presentation, 32 municipalities in eight provinces were being supported with 311 apprentices, 228 unemployed graduates (including graduates from further education and training (FET) colleges) and 83 municipal employees.  A total of 469 apprentices, including 158 new recruit apprentices would have been placed in 56 municipalities for capacity development.  100 technical managers or directors would have been on an up-skilling or re-skilling programme and were to be supported by 100 municipal engineering professionals.  91 students in technical fields were sponsored by MISA’s bursary programme.  MISA also provided support to 24 district municipalities that were Water Service Authorities (WSAs); backlogs analysis for water had been completed for all 24 districts and work was underway to align the funding to address the backlogs.  Some of MISA’s notable achievements included piloting a programme that saw 56 skilled personnel trained and permanently employed in the Vhembe district over a period of two years and in Mafikeng, MISA improved MIG expenditure from zero to 17 per cent with indications that over 80 per cent of MIG would be spent by the end of the financial year.

Mr Mahlawe stated that the greatest challenged faced by MISA was its limited human and financial resources which constrained MISA to extend its support to more deserving municipalities.  It was also difficult for MISA to continue finalising its administrative systems and processes whilst at the same time ensuring that support provided was not compromised.  Finally, delays in the signing of Memoranda of Understanding by municipalities in order to expedite MISA’s provision of support created a further challenge to MISA.

Mr Mahlawe concluded his presentation by thanking the Chairperson and provided an opportunity for the Committee to ask specific questions.

Discussion
The Chairperson opened the discussion by stating that MISA had given a presentation the previous week to a select committee and that the answers given to questions asked during the previous week differed from the statements made in the presentation that had just been made.  She also pointed out the problematic logic behind claiming that MISA was under-resourced yet it had underspent its budget.  In addition, the reasons given for underspending during this presentation were different to those given during MISA’s previous presentation.

Ms W Nelson (ANC) concurred with Chairperson on the budgetary problems raised and asked when the 81 technical experts came over from the Development Bank of Southern Africa (DBSA) to MISA.  She asked whether MISA envisaged having its own structure, since at the time CoGTA and MISA shared some of their services, and questioned whether this would result in unnecessary duplication of services.  Municipalities were requested to share services with district municipalities; the same principles should apply to CoGTA and MISA in order to avoid unnecessary duplication.  She was also concerned with the number of qualified artisans that left the country and asked whether there was a retention strategy for the artisans being trained by MISA.  Furthermore, in order for the Committee to efficiently fulfil its role of oversight it would require more details on which municipalities and districts were being assisted by MISA—the Committee would require quarterly reports on MISA’s activities within the municipalities and districts. 

The Chairperson agreed on the need for MISA to expand on the issue of the 81 technical experts who came over to MISA.

Mr T Bonhomme (ANC) questioned the amount of capacity building that had taken place since it was unlikely that the amount of achievements mentioned by MISA could have been reached in only 12 months.  He had recently been in a meeting in which it was asked what the government has been doing to train the youth.  All of the training seems to have been directed at black Africans, not coloured or white youth.  This created major problems and it was questionable whether today’s youth should suffer for the sins of their fathers or grandparents.  It was requested that information on MISA’s training efforts be listed by racial categories in order to ensure that all races were being trained.

Mr G Boinamo (DA) stated that while MISA claimed to have provided support to Mafikeng he had recently been to Mafikeng and its service delivery was in a terrible state.  He requested clarification regarding the choice of which municipalities to provide support to and what happened to the municipalities which were provided support and nevertheless failed to improve.  It was asked whether MISA used its own staff to support the municipalities or whether it relied on consultants.  He also wanted to know who monitored the quality of MISA’s support to municipalities and how the resistance to proposed transfers from the Department of Co-operative Governance (DCoG) to MISA affected the running of MISA.

Mr P Smith (IFP) firstly stated that he had high hopes for MISA and that if MISA was not able to resolve the problems on a municipal level he had little hope left for those problems to be resolved at all.  In order to better understand MISA it would be necessary to see an organogram—the Committee should know how many funded posts MISA has and what its in-house capacity was compared to the amount of work done by consultants.  He asked what would be done if municipalities did not wish to be assisted by MISA and whether a lot of resistance had been encountered.  With regards to MISA’s diagnostic processes, it was important to know whether it gathered data anew or whether it was able to make use of inherited information.  MISA had stated that it worked with the provinces, however in reality the provinces often failed to do their jobs.  It would not be desirable for MISA to do the jobs of the provinces while the provinces claimed the credit.  Mr Smith wanted to know whether the provinces did in fact play a meaningful role in the support of the municipalities.  He questioned whether MISA would be able to achieve the second part of its mission, namely to enhance technical capacity of municipalities to ensure effective planning, delivery, operations and maintenance of municipal infrastructure for sustainable service provision, since government had not been able to achieve this before.  It was doubtful whether MISA with its limited number of personnel would be able to achieve this goal if government as a whole had failed in this regard.  Did MISA pay for all the support that it provided or did the municipalities to which it provided support contribute financially?  While municipalities generally did not wish to budget for maintenance, it was likely that maintenance costs would form a large part of MISA’s programmes; how would MISA ensure that the municipalities budgeted for maintenance?  In addition, it would often be necessary to replace collapsed infrastructure in order to support the municipalities. He questioned whether MISA or the municipalities would replace such collapsed infrastructure.  He asked how MISA would integrate its own support plans with the turnaround strategies that all of these municipalities ought to already have in place.  MISA should have considered the fact that the new budget cycle started in June.  In order to have ensured that it was correctly included in the budget it should have planned its interventions much earlier so that they could have been taken into account when planning the budget.  He asked to what extent this had happened.  Furthermore, he wanted to know to what extent the apprenticeships were inherited, and commented that one year of training would not develop many skills and that two or three-year programmes would be needed to ensure that skills that were truly valuable were gained by the apprentices.  MISA had mentioned that there were 100 engineering professionals who would be assisted in their professional registration.  This was problematic since they could not be professionals unless they had already been registered as professionals.  MISA had also stated that 56 personnel had been trained and absorbed in the local labour market in the Vhembe district.  Was this typical of all municipalities or was this an exception?  If it was an exception, how did MISA decide where to provide such a level of support and where to provide a smaller amount of support?  Finally he enquired as to MISA’s ability to address the problems presented to it.

Ms I Ditshetelo (UCDP) asked how the municipalities would be convinced to work with MISA.  She enquired about the impact made by the technical professionals deployed and asked how MISA decided on which municipalities to support—she wanted to know how MISA would decide which municipalities were “more deserving” of support.  More information was requested on the criteria used to select apprentices.  She passionately stated that the Northern Cape and North-West provinces were usually not mentioned in such presentations and asked for information on what MISA had done in these provinces specifically.  The way in which resistance to proposed transfers from DCoG to MISA were handled was also questioned. 

Mr J Matshoba (ANC) asked clarification on the role of PSPs.  He questioned the effectiveness of the support, since some municipal areas that had received support from MISA did not seem to have become more effective.  More clarity was necessary on what MISA had achieved in each municipality.

Ms M Segale-Diswai (ANC) stated that it was common practice to employ consultants in order to support municipalities.  She asked which municipalities were being supported by MISA, since would be necessary to know this in order to be able to provide oversight.  She enquired as to whether MISA’s support had not always been welcomed by the municipalities.  With regards to the 68 technical professionals, it was important to know what skills they were transferring to the municipalities and how many of them were covering rural municipalities.  There were more municipalities than technical professionals - how were they allocated among the municipalities?  Ms Segale-Diswai stated that she was once a civil servant and as such would like to know what the conditions of service were of those people who had been transferred from DCoG to MISA.  Could they simply refuse to be transferred or were they required to accept a transfer by their contract?  How was the process of transfers handled?  She emphasised the need for an equitable labour relations process to have been in existence and asked how labour relations were handled. 

The Chairperson asked what the exact role of MISA was as part of the integrated approach to assisting struggling municipalities.  She also asked whether the 25 deployed professionals mentioned in the presentation were consultants or in-house personnel.  She enquired as to the reason for the refusal of transfer by some of the government officials.  Since MISA had stated that the reason for its underspending was employees who had not been compensated, the Chairperson requested clarity on who was not compensated.  She requested more specific information about the terms and conditions of the 91 students who had been given scholarships by MISA.  She asked whether they would they be contractually bound to stay in the needy municipalities from which they were drawn since they could potentially be of great help to those municipalities.

Ms C Mosimane (COPE) pointed out that MISA had mentioned that it provided support to eight provinces, leaving one province without support.  She asked what the reason was for leaving out one province from MISA’s support.  She also asked whether there were any measures in place to address the delay caused by the people who did not wished to be transferred to MISA. 

Mr Matshoba asked whether the delay of transferring personnel was purposeful.

Mr D Mavunda (ANC) stated that there was a lack of delivery on ground level at the municipalities and that something must be done to ensure that service delivery took place.  There was clearly a lack of technical skills, and this issue must be resolved.  He requested clarity on the nature of the partnership that MISA had with the provinces and enquired as to how duplication of services would be avoided.  He also asked where the technical support given to municipalities was acquired.  He asked whether there were people in the municipalities who had the necessary skills or capacity to acquire skills so that they would be able to provide for service delivery in the future.  He noted that a lot of the grants provided to municipalities were for the provision of water and stated that while provinces usually provided water, there were often gaps in the distribution of water caused by inadequate municipal capacity.  For this reason providing support to the municipalities for the distribution of water could assist significantly in the provision of water to the people living within a district. 

Mr Mahlawe declared that the head of each unit would answer the questions posed according to expertise and he would answer general questions.

Mr Khwathelani Bologo, MISA Senior Manager: Head of Sectoral Support, Coordination and Grants, explained that he collaborated with sectors to ensure that they received the necessary support.  He replied that the question of duplication was considered when discussing funding with the National Treasury.  MISA did collaborate with the municipalities by assisting them with acquiring the correct grants and by directing their expenditure.  He stated that the result in Mafikeng was not reflective of what MISA has been able to achieve in all the municipalities. The Committee should thus not be discouraged at the apparent lack of progress there.  Mafikeng was not on the first list of municipalities which MISA was directed to support; however, MISA was informed that the municipality had been severely underspending.  MISA decided to send a specialist to assess the situation and provide a solution.  The result was an increase in expenditure of up to 40%.  MISA thus helped prevent the municipality from losing its budget; however, the approach was not holistic as was the usual approach.  While MISA’s support was only temporary it aimed to leave a lasting impact through the commitment of the Mayor. 

Mr Bologo continued by explaining that the positive results obtained in the Vhembe district were achieved by a thorough analysis being done in the initial diagnostic.  Once the diagnostic had been completed MISA approached the Mayor and explained exactly what MISA’s role would be and what it would expect from the Mayor and his or her office.  The council then had to pass a resolution to enable MISA to provide it with assistance.  The municipalities greatly appreciate MISA’s involvement.  MISA then spent two days with the municipal manager and senior managers discussing the key issues to be resolved.  Pre-existing turnaround strategies were analysed in order to determine what progress had already been made and these were then combined with MISA’s new plans to create an integrated support plan.  MISA considered all important sectors, such as infrastructure, treasury, etc in designing its plan.  It brought in skilled workers who were able to solve the problems in the water affairs area.  These workers were to be employed for two years by MISA and afterwards would be employed by the municipality.  This process which was followed in the Vhembe district attracted a number of other districts that had similar challenges—MISA provided similar support in Mpumalanga and other provinces.  Cabinet had prioritised 24 districts of which 21 were water-providing districts.  This was meant to facilitate the national goals of ensuring that all South Africans had access to water by 2014.  In some of the districts there were pipes available, but not water, in others the water supplies had dried up.  MISA did not only examine standard water sources such as dams in providing solutions to the municipalities, but also considered local solutions such as providing water from local streams.  Having said this, Mr Bologo concluded that a further meeting would be needed in order to provide full details since this meeting was meant to merely provide an overview of MISA’s role.

Mr Pieter Venter, MISA Senior Manager: Head of the Municipal Technical Support Programme explained that this programme managed MISA’s resources on a day to day basis, designed and implemented MISA’s key activities, and strengthened stakeholder partnerships within MISA with the aim of accelerating service delivery.  He proceeded to clarify some of the figures that had been mentioned in the presentation earlier.  81 of the technical experts were transferred from the Development Bank of Southern Africa (DBSA) initially.  13 of these experts had resigned, resulting in only 68 having remained.  These experts were mostly retired engineers who wished to work for a year or two more.  MISA was at the time busy finalising a panel of technical consultants in order to increase the amount of technical experts it had at its disposal.  The 107 municipality supporters were thus themselves supported by 68 technical experts.  At times a municipality was supported by only an individual technical consultant, at times by PSPs and at times by both, depending on the municipality.  There were thus 68 in-house experts.  In addition to this there were 24 outside PSPs. 

Mr Venter continued to explain that MISA was using an Excel based system to record its progress.  Although it was waiting to develop an automated system, quarterly reports could easily be provided to the Committee and more focused, drilled down reports could also be made available.  Although MISA was not even a year old it built on several programmes which it took over from previous partners, such as the artisan programme.  Needy municipalities were identified on consultation with the provinces.  There was usually agreement on which municipalities were needy since they mostly stood out as such.  In addition he did not know of any municipality which resisted support.  The only related challenge which had been encountered was a difference of opinion on how the MISA staff should be employed, since the municipality sometimes tried to use them for day to day administrative assistance while their purpose was in fact capacity creation.  This problem could, however, be solved through proper consultation and in general the municipalities were very appreciative. 

Mr Venter then went on to discuss the diagnostic process used by MISA.  It did not create an entirely new diagnostic tool, but attempted to use the best aspects from existing diagnostic tools.  A set of key performance indicators for each area was used in the diagnostic reports and these reports were rather short.  On clarification of the role of the provinces, he explained that MISA did not enter a municipality without provincial support.  There was common interest between MISA and the province, and MISA, the municipality and the province all cooperated on these projects.  In the future, however, only MISA and the municipality would cooperate on the projects while the province would merely be consulted.  As for the contribution made by the municipalities, they were required to provide an enabling environment for MISA—that is to provide things such as office space and IT support.  Most of the municipalities were not in strong financial positions and were therefore not able to contribute financially to the assistance.  However some of them were in strong financial situations and thus in the future MISA should look at a cost recovery programme through which the municipalities would be required to contribute financially if they were able to. 

Mr Venter explained that the Integrated Support Plans (ISPs) were not forced upon the municipalities but were developed in consultation with them.  There had been good buy in and acceptance of the ISPs by the municipalities and these have been closely linked to pre-existing Local Government Turnaround Strategies (LGTAS) in order to prevent duplication.  While some municipal managers had not approved of Siyenza Manje, MISA was completely different from this previous programme.  MISA adopted a decentralised management approach and was more hands-on in the provinces while Siyenza Manje took a centralised approach.  He stated that clear guidelines had been provided by Cabinet as to which municipalities should be prioritised since it selected 23 priority districts.  However, MISA did not limit its support to the prioritised districts.  No needy municipality had yet been denied resources; however, in the future further prioritisation may become necessary.  In response to the request for more information on which municipalities were supported by MISA, he stated that a table was available which listed the municipalities supported by MISA.  About 80 per cent of the municipalities supported were rural, and should the Committee desire an exact percentage this could easily be calculated.  The technical support provided by MISA was sourced from individual consultants found through the labour market, such as retired engineers but also from young professionals who wished to gain practical experience.  There was a lot of expertise available in the labour market.  PSPs went through the standard tender process.  While individual consultants could be employed to oversee the full-time technical support of a municipality, PSPs were more project-based. 

Mr Zakhele Mnqayi, MISA Executive Manager: Head of Capacity Development Programme, stated that the youth had struggled to gain workplace experience and to develop their skills.  Capacity for youth development must be created according to the National Development Plan.  While people of all races had been trained by MISA, the majority were black people.  Should the Committee desire, a full breakdown of the racial composition of the trainees can be presented.  The apprentice programme used by MISA had been inherited; however, MISA aligned it more closely to government targets and programmes.  One of the key capacity constraints faced by municipalities was that of the lack of professionally registered engineers.  MISA aimed at assisting young engineers to become professionally registered engineers.  He went on to note that four municipalities in the Northern Cape were being supported by MISA and four municipalities within the North-West Provinces were being supported by MISA.  MISA supported 91 students at universities.  Of these students, 50 were supported by a pre-existing programme, but 41 new students were added by MISA.  MISA also extended the scholarship programme to include theoretical engineering.  It used the provinces to recruit the students and made them sing an agreement that their experiential learning would take place in selected municipal areas that required their skills.  Each student was required to work for the municipality according to the amount of years for which he or she was funded.

Mr Bonhomme asked for clarification on the terms of the apprenticeships.  He stated that six to 12 months would not constitute a real apprenticeship, but that an apprenticeship should consist of a longer period of time.

Mr Mnqayi replied that while the apprenticeships would take much less than three years to complete, they were still apprenticeships and not simply learnerships. 

Ms Nelson asked what the payback period was that each student or apprentice would be required to work for.

Mr Mnqayi replied that the payback period was equal to the number of years for which funds were provided.

Mr Mahlawe added that many of the students which were aided by MISA were already in their second, third or final year and as such would only be required to work for the amount of years which they were funded by MISA.  However there were some new students who were funded from first year.      

The Chairperson asked what previous agreement the students had with DCOG.

Mr Mahlawe replied that under DCOG there was no payback agreement.  He added that if MISA funded a student from his or her first year that student would be funded all the way through his or her degree unless he or she failed to perform satisfactorily. 

Ms Nelson agreed that it was important to commit to supporting students all the way through their degrees.  She added that whether the funding came from DCOG or MISA it was government funding and MISA ought to have the right to compel the beneficiaries to work back for the full amount of time for which they were funded.

The Chairperson replied that the problem was that DCOG did not make the students sign a payback agreement.  The fault was with DCOG not with MISA.

Mr Mahlawe agreed that the problem faced was a contractual problem.  He added that in the future he would use more examples from the less mentioned provinces.

The Chairperson stated that when referring to specific examples no province should be excluded, but all should receive a mention.  She then asked how DCOG and MISA handled their financial statements.

Mr Mahlawe replied that in the future MISA would handle its own financial statements and would simply be accountable to the Minister.

Mr Matshoba asked how the municipalities could be expected to pay for funding which MISA would provide to them.

Mr Mahlawe replied that it would be unreasonable for MISA to expect municipalities to pay MISA back for the funding which it provided since the purpose of the funding was to support and assist the municipalities.

Mr Siyabonga Dube, Acting CFO of MISA, stated that the reason for MISA’s underexpenditure was that some government officials who were meant to relocate to MISA refused to relocate.  They mostly refused to relocate due to the inconvenience of moving to a new province. 

MISA stated that it was still looking for people with the right skills to fill available positions.  In deciding which officials to relocate to MISA, it considered the skills available and matched people according the their skills and the need for their skills.  Until the end of the previous financial year MISA and DCOG shared a system of accounting; however, since the beginning of this financial year MISA and DCOG had become separate programmes.  It was unnecessary for DCOG to build up its own services.

Mr Mahlawe stated that there was a need for MISA to build its own internal capacity.

Mr Ntandazo Vimba, MISA Executive Manager: Head of Vendor, Legal and Contract Management, explained that the reason for using PSPs was to create a master plan with which to approach the problems within a municipality.  Service providers were needed to do detailed analysis and to create Project Integration Plans (PIPs). 

Mr Mahlawe asked the Chairperson whether there were any questions that had not yet been responded to.  He stated that MISA would submit quarterly reports to the Committee and would share support plans with the Committee.  He also added that diversity within the MISA staff and management must still be addressed.

The Chairperson thanked the Department for answering the most important issues and stated that it should respond in writing to any unanswered questions. 

Ms Ditshetelo pointed out that her question had not yet been answered.

Ms Segale-Diswai asked how MISA had addressed gender equality, since all the members who had been a part of the presentation were male.  She admonished MISA and asked it to consider women in the recruitment programme.

Mr Smith re-iterated his questions that had not yet been answered, namely his questions on the lack of maintenance budgets, the new budget cycle, infrastructure challenges and the ability of MISA to successfully handle a challenge which government had not been able to handle itself.

Ms Mosimane asked why MISA employed retired engineers.

Mr Bologo replied that MISA had recently appointed a lady into its leadership although she was not present at the meeting.  He emphasised that MISA attempted to avoid approaching the problems of municipalities in a generalised manner.  Instead, MISA approached the problems of each municipality on a case by case basis.  He stated that MISA did not have the funds available to solve the problems on a ground level, MISA only had funds available to provide support to the municipalities—however this support was very useful to the municipalities.  He added that a lot of assessments had been done in order to determine where assistance was most needed.

Mr Mahlawe stated that when it was decided to relocate personnel to MISA, MISA started by engaging representatives of labour and individually met with each affected staff member.  He added that he would consider the proposal around gender equality and that in fact gender equality was already taken into account in the recruitment processes.  Furthermore, MISA would provide a unified approach to building capacity in municipalities as opposed to the previous plethora of different programmes that tried to assist municipalities.  He explained that the reason for using retired engineers was that this was inherited from Siyenza Manje. However MISA was aware of the fact that the process must be changed in order to provide more opportunities to young engineers and technicians.  MISA would therefore replace the older engineers with younger engineers over time as the older engineers retired.

The Chairperson stated that the Committee looked forward to providing oversight over MISA next term and thanked the members of MISA for the presentation.

The meeting was adjourned.