Department of Cooperative Governance & Traditional Affairs: Targets & 2012/13 Annual Financial Statement briefing; National House of Traditional Leaders re-constitution

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Cooperative Governance and Traditional Affairs

07 October 2013
Chairperson: Ms D Nhlengethwa (ANC)
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Meeting Summary

The Department of Cooperative Governance and Traditional Affairs (COGTA) briefed the Committee on its Annual Financial Statements ending on 31 March 2012/13. COGTA also briefed the Committee on its progress report against the targets set in the Annual Performance Plan 2012/13. It was noted that COGTA had received a financially unqualified audit result, although there were matters of emphasis. Of its final appropriation of R54.856 million, COGTA spent R53.434 million, or 97.41%, and it had thus underspent R1.42 million. The activities of COGTA were summarised under its seven programmes. It was explained that the spending on consultants, contractors and outsourced services, related to the procurement of critical services rendered through these outsourced services. The material losses written off amounted to R914 000, and were mainly due to cancellation fees on air tickets and car accident claims. Irregular expenditure arose through  non-compliance with procurement policies and COGTA was trying to recover the amounts from the persons responsible. Fruitless and wasteful expenditure had decreased significantly, from R1 million in the 2011/12 financial year to R2 000 at the end of March 2013. He noted that expenditure on capital assets increased from R8.2 million to R17.8 million, largely because of work for the Municipal Infrastructure Support Agency and Community Work Programmes. The contingent liability was explained as due to a court case pending for R170 000. Accruals were related to invoices where verification procedures were still needed on the supporting documents. Some leases had not been renewed. An action plan had been developed to address all areas.

The National House of Traditional Leaders (NHTL) also briefed the Committee on its re-constitution, which had been necessary due to expiry of terms of offices of 23 members. However, the process took longer than expected because the Provincial Houses of Traditional Leaders had to be reconstituted first. This process marked the first stage of alignment of all the traditional Houses. Goals common to all included ensuring that communities received the best services they were entitled to, eradication of poverty, unity amongst communities, community participation in governance processes,   and a shared vision. The NHTL was determined to deliver on its mandate. It aimed to foster more passion for correct land use, to enhance food security and curb movement of young people to the urban areas, and COGTA was partnering with the Department of Rural Development and Land Reform to realise the national goals around food security. Traditional leaders were encouraged to participate in municipalities and partner with universities to promote education.

COGTA then gave a presentation on its progress on some targets in the Annual Performance Plan, and noted that it was trying to align its structure to the strategies. The fact that the Chief Financial Officer was an appointment shared by COGTA and the NHTL had created problems for both, and four posts, including a Chief Financial Officer, had been advertised. Another challenge was the shortage of budget. Progress reports were provided on the COGTA’s work in relation to compliance and implementation of the Traditional Leadership and Governance Framework Act, where desktop analyses had been done. A draft formula was prepared on the establishment of Kingship and Queenship councils. Draft regulations had been drawn on the roles and functions of kings and queens. A draft policy on Male Initiation had been submitted to Cabinet but further consultation with stakeholders was needed. The National Traditional Affairs Bill was approved by Cabinet and had been published for comment. A draft Research Report on Headmanship and leadership had been compiled. A traditional affairs strategy aimed to improve communication across the three spheres of government, and training had been provided to leadership institutions. A partnership framework with the Department of Traditional Affairs had been drafted, and provincial implementation forums created, with functions and terms of traditional leaders now aligned across all provinces.

Members expressed concerns on a number of issues. Many commented that it was shocking that over 300 initiates – more than the number at Marikana – had died, with no adequate response from COGTA on traditional leaders, nor the Commission of Inquiry that this Committee had requested. They wanted to know exactly what COGTA was doing, firstly, to ensure that only qualified and trained people performed the initiation circumcisions, that all initiation schools were properly registered, and criticised the fact that taxpayers money was used for these schools, instead of them being funded by parents of initiates. They commented that no similar policy appeared to apply for female initiates. Several Members commented that it was difficult for the Committee to track progress because of differing targets in the Annual Performance Plan and those now mentioned, and said if the targets had changed, the Committee should be told. They cited the fact that targets were not mentioned for the Chairperson’s Forum, ukuthwala practices, and assistance to widows whose assets were looted. One Member was severely critical of the fact that the Committee’s Forum in the NHTL had been asked to give advice to a political party, the ANC, which was highly inappropriate. Another Member wanted to know exactly what traditional leaders were doing, if they had addressed bucket toilet systems, building of roads and houses, what their claimed participation in activities had actually achieved, how values and customs of traditional leaders were promoted and what real value this imparted to communities. Another questioned the payments to traditional leaders, what role they played in ensuring food security, and what support was given to communities interested in farming. The relationship between the National, Regional and Provincial Houses of Traditional Leaders was questioned. COGTA agreed to provide answers in writing.
 

Meeting report

Department of Cooperative Governance and Traditional Affairs (COGTA): Annual Financial Statements for the period ended 31 March 2012/13
Prof Charles Nwaila, Director-General, Department of Cooperative Governance and Traditional Affairs, said that this presentation would cover the audit outcomes, areas of under-spending, and significant notes and disclosures mentioned in the Department’s Annual Financial Statements. He noted that in 2012/13, the Department of Cooperative Governance and Traditional Affairs (COGTA or the Department) had received an unqualified audit opinion, but with matters of emphasis. COGTA had a final budget appropriation of R54.86 million in the 2012/13 financial year, and of this, it had spent R53.434 million of this appropriation, which represented 97.41% of the budget allocation.

The activities of COGTA were allocated under seven programmes (see attached presentation for full details).

Prof Nwaila explained that COGTA’s under-spending amounted to R 1.420 million or 2.59% of the budget allocation. Under Programme 1: Administration, the reason for under-spending was that office accommodation was not paid in time, due to delays in invoicing from the Department of Public Works In addition, the communication survey and the training workshops at local government were not completed on time. For Programme 2: Policy, Research and Knowledge Management, final invoices for State Information Technology Agency contracts were submitted late. For Programme 3: Governance and Inter Government Relations, it was noted that National Treasury withheld transfers of the Equitable Share grants due to the poor performance of municipalities on other conditional grants in the previous financial year. In addition, appropriation to the South African Local Government Association (SALGA) had increased. Under Programme 4: Disaster Response Management, the under-spending was attributed to the delay in verification and quantification of disaster damages, which delayed the disbursement of disaster relief funds by COGTA to affected provinces and municipalities.

Prof Nwaila presented a breakdown of the spending by economic classification. Compensation of employees spent 90.96% of the budget allocation, goods and services spent 87.97% of the allocation, transfers and subsidies spent 97.77% of its allocation, and payment of capital assets spent 98.45% of the allocation. Payment for financial assets spent 100% of budget allocation.

He noted that the underspending on compensation of employees was attributed to recruitment processes. Under goods and services, office equipment was not paid for in time,  due to delays in invoicing from the Department of Public Works. Communication surveys as well as training workshops at local government were also not completed in time.

Prof Nwaila spoke to the Selected Notes to the Annual Financial Statement. He noted, in respect of expenditure on consultants, contractors and outsourced services, that it was directly related to the procurement of critical services by these outsourced services.

Material losses written off amounted to R914 000, mainly due to R5 000 spent on cancellation of air tickets, and R909 000 on car accident claims.

He noted that expenditure on capital assets increased from R8.2 million to R17.8 million. This increase was mainly due to payments for the Municipal Infrastructure Support Agent (MISA) and Community Work Programme (CWP) capital assets.

Prof Nwaila then tabled a slide detailing the Disclosure notes to the Annual Financial Statement. There was an amount of R170 000 reflected, as a contingent liability, for claims made against COGTA which were the subject of court action, where a service provider was claiming relief for additional services rendered.

Accruals increased from R62 million to R84 million in the 2012/13 financial year. The increase mainly related to CWP invoices whose payments were delayed, and would only be paid in the 2013/14 financial year. The delay was due to the verification process for quality assurance on the supporting documents for payments.

In relation to the lease commitment, he said that the lease contracts related to the buildings had not been renewed, and this was why this was not included in the note. Discussions between COGTA and the Department of Public Works were continuing in this regard.

COGTA’s irregular expenditure amounted to R727 438 million. This mainly related to cases of non-compliance with procurement policies. All incidents were being investigated by the Internal Audit Unit to determine whether this amount could be recovered from the responsible officials, or whether the amount would be condoned. COGTA had developed a Post Audit Action Plan which would assist in mitigating the control weaknesses identified by the Auditor-General. He also noted that fruitless and wasteful expenditure had decreased significantly, from R1 million in the 2011/12 financial year, to R2 000 at the end of March 2013.

National House of Traditional Leaders: Briefing on structure
Kgoshi Pontsho Maubane, Chairperson, National House of Traditional Leaders, noted that the National House of Traditional Leaders (NHTL) was re-constituted in August 2012. The re-constitution related to 23 members who were to develop the National House, and was because terms of office had expired. However, the re-constitution however took longer than expected, because of the time taken to first reconstitute the Provincial Houses of Traditional Leaders (PHTLs), which he described as “a failure to the National House”. The reconstitution marked the first alignment of all the Houses of Traditional Leaders. The structures of traditional leadership would have the same focus and destiny from the start to the end of the term.

There were common goals within the institution and the first was to ensure that communities represented received the best services offered by government. The Houses aimed to ensure that poverty was eradicated and unity among communities prevailed, and that they actively participated in governance processes. The re-constitution marked another goal of the institution to reach a shared vision. The NHTL was determined to deliver on its mandate. The statement, in the National Development Plan, that in the near future rural areas would be left with no leaders was incorrect. Local economic development would be encouraged. Rural communities should be encouraged to produce their own local goods and communities need to be encouraged to get involved in land development as a source of food security. The passion for land use needed to be revived, so that the influx of young people to urban areas could be curbed. COGTA was partnering with the Department of Rural Development and Land Reform (DRDLR) to realise the national goals around food security.

The NHTL had participated in a number of initiatives to ensure that service delivery goals were realised in all rural areas. COGTA participated in the Summit of Stakeholders, which deliberated on the key points of accelerating service delivery, sound financial management, promoting good governance, accelerated infrastructure development and fighting against corruption. Traditional leaders also needed to participate in municipalities for the benefit of their communities. Traditional leaders had also partnered with universities to promote education.

COGTA Annual Performance Plan 2012/13: Progress on achievement of targets
Mr Khorombi Sigidi, Deputy Director-General: Governance and Inter-Governmental Relations, COGTA, explained that some of the challenges faced by COGTA in the last year were structural challenges and therefore COGTA was now in the process of aligning the strategy with the structure. The fact that the portfolio of Chief Financial Officer was shared between the National House of Traditional Leaders and COGTA caused major delays for both structures. Budget allocations to COGTA from National Treasury were also relatively small. He noted that COGTA had now advertised four posts, of which one was the post of Chief Financial Officer.

COGTA had not set particularly clear targets around policy. For example, the gazetting of the Traditional Affairs Bill was not mentioned under the policy mandate of COGTA. COGTA had no control over the Parliamentary processes. He indicated that the Traditional Affairs Bill had gone through a long Parliamentary process, but had been gazetted regardless. After the public consultation process of 60 days, the Bill would be submitted to Parliament.

Advocate Tommy Ntsewa, Deputy Director General, COGTA explained that the targets outlined in the Annual Performance Plan for 2012/13 included the following:

1) Compliance with the implementation of the Traditional Leadership and Governance Framework Act (TLGFA). He explained that the progress made was that a desktop analysis of the Act had been completed. A similar analysis for the National House of Traditional Leaders had also been completed. The process in KwaZulu Natal had been delayed because there was a new Bill currently being considered.

2) Consideration of the Formula and compliance report on the establishment of Kingship and Queenship councils. Here, he reported that the draft formula had been created and was being consolidated for consultation with various kings and queens around the country.

3) Regulation of the roles and functions of Kings and Queens. In this regard, COGTA had completed draft regulations.

4) Approval of a policy on male initiation. He reported that the draft National Policy on Male Initiation had been developed and submitted to Cabinet. Relevant stakeholders needed to be consulted, and the final policy needed to be submitted to the Regulation and Administration Committee. Consultation with the Khoisan communities had also been concluded.

5) Conclusion of the National Traditional Affairs Bill. He noted that the Bill had been approved by Cabinet and had been published for comment.

6) Research Report on the Analysis of Headmanship and Headmanship Leadership. COGTA had developed a draft Research Report, and the role of traditional leaders has been developed. A traditional affairs strategy had also been developed, to improve communication across the three spheres of government. Traditional leadership institutions had also been developed through training resources being provided in the Eastern Cape, Free State, Mpumalanga and Gauteng.

7) Approval of the Partnership Framework. He noted that this Framework had been developed and approved. The Framework sought to address the development, sustenance and collaboration of relations with the Department of Traditional Affairs. COGTA had also developed a national implementation forum where all the provinces would come together to discuss mutual programmes. Provincial implementation forums had also been established. He added that all functions and terms of traditional leaders have been aligned across all provinces.

Discussion
The Chairperson thanked Advocate Ntsewa for the comprehensive presentation with reports on COGTA’s progress against the Annual Performance Plan 2012/13.

Mr G Boinamo (DA) thanked COGTA for the presentations. He said it was of great concern that over 300 initiates died during the year. The Committee had asked for a Commission of Inquiry on these statistics, but this was not entertained. He argued that traditional leadership did not adequately respond to this crisis. A meeting was held in Mpumalanga and a very thin report was presented but this report did not explain why the children had been taken to initiation schools which were not even registered, and were left there under the care of people who were not even qualified. He maintained that the country should have been more outraged at these deaths, which exceeded those at Marikana. The Committee was still waiting to hear from traditional leaders on the process and the qualifications required before an individual could conduct initiation circumcisions. He noted that a tender for R100 million was published for initiation schools, but questioned whom COGTA expected to apply for these tenders, and argued that this was pure corruption. He maintained that it was not government, but the parents of initiates who should be responsible for the financing of initiation rites. He asked what the way forward would be and what exactly COGTA was doing to prevent the setting up of bogus traditional schools, and to tackle fraudulent and dangerous behaviour there.

Ms M Segale-Diswale (ANC) said the policy on initiation was formulated as a response to the high level of deaths and injury during initiations, but COGTA did not seem to accommodate initiation schools for females. She asked why it apparently had no policy in place for females.

Mr J Steenhuizen (DA) said the targets outlined in the 2012/13 Annual Performance Plan were not the same as those presented now by COGTA. He asked whether there were changes in targets during the 2012/13 financial year and said that if there were, COGTA needed to provide clarity. The mis-match of the targets would make it difficult for the Committee to monitor COGTA’s performance during the year.

Mr Sigidi said some of the items in the Annual Performance Plan were not really relevant to the presentation, as they related to the National House of Traditional Leaders’ performance.

Mr Steenhuizen said COGTA had also set particular targets for the Chairperson’s Forum, but no mention was made of these targets during the presentation. This again made it difficult for the Committee to assess progress made, and the true level of performance within COGTA.

Mr P Smith (IFP) said the role of the Committee was to measure performance against pre-determined targets. He reminded Members that the Committee’s Forum within the National House of Traditional Leaders had met in Durban to discuss and provide policy direction to the African National Congress (ANC). He argued that it was highly inappropriate that the National House of Traditional Leaders was being funded by tax payers, to provide support to a political party. He asked for specific comment on this point.

Mr Steenhuizen said COGTA should have rather taken Members through the targets stipulated in the Annual Performance Plan, so that the Committee would have a more comprehensive understanding of COGTA’s performance.

Nkosi Z Mandela (ANC) said it was the first time that he was unsure about the purpose of the presentations. He said the Committee would have liked more insight into the work of the National House of Traditional Leaders, and how it impacted broadly on society. He asked how many traditional leaders from each province were invited to attend the President’s State of the Nation Address, and how many had attended. There were numerous activities in which the NHTL claimed to have participated, but there was no feedback to the committee on the outcome of those engagements. He wanted to know, specifically, what the NHTL had done in relation to service delivery, what budget was allocated, whether the bucket toilet system had been eradicated, whether roads and houses had been built. He asked how the values and customs of traditional leaders had been promoted, and what budget was allocated to this, and what real value had traditional leadership imparted to the various communities.

Ms I Ditshitelo (UCDP) agreed with her colleagues that the eradication of deaths at initiation schools should have been one of the primary targets within COGTA. She also requested how COGTA was addressing the issue of “ukuthwala” in rural areas, and why this was not specifically named as a target. She asked what allowances were allocated to traditional leaders. She wanted to know if COGTA was providing any assistance to widows in rural areas whose assets were being looted after the deaths of their husbands. She also asked for details of the differentiation between chiefs and traditional leaders.

Prof C Msimang (IFP) asked whether kings and queens would be treated in the same way. He asked what role traditional leaders played in enabling their communities to work towards ensuring adequate food security in their immediate environments, and what support was given to community members who were interested in farming.

Ms C Mosimane (COPE) asked how COGTA addressed the relationship between the National House of Traditional Leaders and municipalities, particularly in regard to accelerated infrastructure development. She asked whose mandate was it to attend to rural development.

Nkosi Mandela asked what the relationship was between the Provincial House of Traditional Leaders and the Regional Houses of Traditional Leaders. Mthatha had 46 traditional councils and he questioned the relationship between these councils and the Provincial House of Traditional Leaders. He also asked how the National House of Traditional Leaders ensured that there was alignment between these structures. He asked if traditional leaders had accompanied families of the Marikana incident and addressed the Commission of Inquiry. He said that the presentation by COGTA did not actually allow the Committee to hold COGTA accountable in terms of the performance plans. He believed that the National House of Traditional Leaders and COGTA presentations be split, so that the Chairperson of the NHTL could brief the Committee on its performance.

Mr Sigidi said some of the questions would need a separate discussion, and time needed to be put aside for that particular discussion. He agreed that the 300 deaths of initiates during 2012 was unacceptable. COGTA would be taking strict measures to prevent such deaths. He noted that the remainder of the questions would be responded to by COGTA in writing.

The meeting was adjourned.
 

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