Minister on Back to Basics plan for Local Government; COGTA 2013/14 Annual Report

Meeting report

State of Local Government
Mr Seabelo Molefi, COGTA ‎Executive Manager: Corporate Planning and Governance, briefed the Committee that his Department conducted a desk top assessment of municipalities in all nine provinces. The assessment sought to identify three categories of municipalities: those that are doing well; those that have a potential to do well and those that are not doing well. The assessment was based on functional areas such as political stability, governance, service delivery, financial management, institutional management and community satisfaction. This resulted in the introduction of a programme of action called Back-To-Basics.

Municipalities that are "doing well" were identified as those that, amongst other things, exhibit strong political and administrative leadership, are characterised by political stability, have functional council and oversight structures, do regular report back to communities, have low vacancy rates, their rate collection is above 80% on average, spending on capital budgets is above 80% and there is continuity in the administration and they achieve consistent unqualified audit outcomes.

Municipalities that have the "potential to do well" are seen as those that demonstrate poor expenditure of capital budgets, achieve mainly qualified audit outcomes, have poor record keeping, the collection rate is less than 50%, some critical positions are not filled and most administrative positions are filled by incompetent staff, show reasonable access to basic services, have fairly good financial and record management and there is some level of political and administrative stability.

On the other hand, municipalities that are "not doing well" face challenges of political-administrative interface, have high political in-fighting and instability, show non-compliance with rules and regulations, their vacancy rates and levels of incompetence among staff are high.  They also have extremely low levels of capital budget spending and show disregard for supply chain management regulations. Service delivery is compromised and results in many protests by communities. They achieve negative audit outcomes.

The recent assessment of municipalities showed that over a third are doing well, a third have a potential to do well and just under a third are not doing well.

The results of this assessment led to the design of a programme of action called Back-To-Basics. Its objectives are to ensure a healthy interface between political matters and administration, develop effective credit control and debt collection policies, develop and implement audit and post audit action plans, build institutional processes and systems and provide capacity building for councillors. It further aims to develop infrastructure audits and maintenance plans and expenditure. It will review which are unviable municipalities, strengthen district municipalities and develop procedures to implement differentiation rather than a one-size-fits-all approach.

Cooperative Governance & Traditional Affairs 2013/14 Annual Report
COGTA's annual performance review noted it has achieved 75% of its target for 2013/14 compared to the 45% from two year ago in 2011/12. The progress and achievements for the predetermined objectives for the six Cooperative Governance programmes were noted.

With regard to traditional matters, the Department of Traditional Affairs would continue to promote a harmonious relationship between traditional leadership and local government and would participate in Integrated Development Plans and community consultation processes including land use schemes. It would facilitate access to land for development purposes. Feedback was provided on its progress and that of its two entities: National House of Traditional Leaders and The Commission on Traditional Leadership Disputes and Claims  (CTLDC). DTA outlined remedial action it was taking for three challenges it identified: non compliance with the Traditional Leadership and Governance Framework Act, as amended, on reconstitution  of traditional councils in Limpopo, Mpumalanga and Eastern Cape; de-establishment of community authorities in some provinces; proliferation of headmanship across the country.

An account was given of the progress, performance highlights and special interventions of the Municipal Infrastructure Support Agent (MISA).

Minister's address on introduction of Back-To-Basics
Mr Pravin Gordhan, Minister: Department of Cooperative Governance and Traditional Affairs, stated that the introduction of Back-To-Basics seeks to get all municipalities out of the dysfunctional state and to make sure no one municipality is below the middle path. The programme aims to support municipalities on the middle path to progress to the top path and stay there, and support and incentivise municipalities on the top path to remain there.

The programme is putting people first. It aims to provide efficient service delivery and be responsive to complaints with urgency. It also aims to open the channels of communication with communities so that there is regular information about services, participatory planning and budgeting and transparent administration.  It promotes sound financial management and accounting and filling of vacancies by skilled personnel.

In its effort to provide efficient service delivery, the programme has got comprehensive infrastructure plans for municipalities and aims to ensure that municipalities develop new infrastructure at a faster pace. It is looking at improving operations and maintenance of existing infrastructure to ensure continuity of service provision.  It seeks to enforce the 7% operational budget allocation toward infrastructure maintenance and audit the state of infrastructure in municipalities. It is also looking at developing system to monitor service delivery interruptions and provide support to municipalities spending below 80% of the Municipality Infrastructure Grant.

In order to promote good governance, the programme wants to see transparency, accountability and community engagement. It states there should be no interference in oversight, and advocates for a proper system of delegation to ensure functional administration and clear delineation of roles and responsibilities. It states there should be serious consequences for corruption, fraud and maladministration. It also pushes for lifestyle audit.

The programme promotes sound financial management. It encourages proper record keeping and production of annual financial statements. It also supports credit control, internal controls and an increase in the revenue base. It seeks to cut wasteful expenditure including monitoring overtime and to implement functional Supply Chain Management structures with appropriate oversight.

The programme advocates for a robust and responsive administration. It encourages regular interaction between management and organised labour. It supports the formation of realistic organograms aligned to the municipal development strategy. It promotes regular ward report backs by councillors and clear engagement platforms with civil society.

The Minister revealed he is leading an Inter-Ministerial Committee which President Zuma established. Its purpose is to fast-track service delivery in areas where there are bottlenecks and to quickly respond to areas where there are service delivery problems and to ensure that general service delivery is improved.

He concluded that Integrated Development Plans must become joint national, provincial and local action plans in order to avoid fragmented planning and to promote intergovernmental liaison for developmental outcomes, and stated that strong collaborative skills are needed for well-managed and coordinated implementation.

An expenditure analysis for 2013/14 finances was presented and graphs and tables were shown.

Discussion
Mr K Mileham (DA) asked what is going to happen to senior managers wrongly employed and what criteria are going to be used in checking competency requirements for senior managers in municipalities.

The Minister explained there are regulations that govern competency requirements in terms of the appointment of Chief Financial Officers and other senior managers. Letters have been sent to MECs to take action on people the Department identified as wrongly appointed.

Mr M Hlengwa (IFP) asked about the turnaround time in resolving claims and disputes in communities. He asked about the model that is going to be applied to monitor the movement of assets and liabilities in the merger of non-viable municipalities with viable ones. He commented that the 75% the Department achieved in its performance was good but he noted that it was not felt at grassroots level.

Dr Charles Nwaila, COGTA Director-General: Traditional Affairs, replied that in resolving claims and disputes, the Nhlapho Commission was tasked with 1 244 claims and it managed to resolve only 18 by the time it expired. The remaining ones were started in 2011 and have to be processed by the new commission which comes to an end in 2015. It starts with small communities and provinces where there are few claims. There are many kingship claims which have not yet been resolved. They are still in the hands of the courts and the Department has got no control over that. Then royal claims and disputes are common in hot spot areas. Cases related to traditional leaders are sent to provinces for resolution.

Mr Molefi, concerning the merger of municipalities, indicated that the municipality that would be receiving the non-viable one would absorb all the liabilities and assets. The merger would be managed well but the social implication would be another thing. With regard to the impact of the 75% achievement, he said Back-To-Basic talks about people first and the Department talks about developing documents in the boardroom.

Mr M Bhanga (DA) expressed concern about the large amount of money that has been spent on forensic reports commissioned by municipalities yet the public cannot access them. He further wanted to know why the monitoring and evaluation system has been put on hold. He enquired about what is going to be done to politicians who keep on "influencing" municipalities on what to do.

On forensic reports, the Minister, explained that municipalities need to be acted upon but not in a criminal way. They have to look at creative ways such as civil claims and asset forfeiture to claim monies back. Already municipalities have been instructed to submit forensic reports. The regulatory framework would be strengthened so that we could have access to the reports. But he warned we need to look at issues of defamation and privacy before the reports are published. On political interference, he indicated there is a need to inculcate a culture of following protocol especially those working in a government office. Rules of the game need to be established and ethics promoted. More public scrutiny is needed and the Department would work closely with Treasury.

On putting the M&E system on ice, Mr Molefi said that the process of consulting with municipalities took longer than expected. The advent of Back-To-Basics is there to ensure the integration of all systems. The monitoring and evaluation capabilities of municipalities have been identified as a challenge by the Department and it indicated municipalities need a support system that would help them to report on Back-to-Basics indicators.

Mr P Mapulane (ANC) wanted to establish what would be done to money under-spent on infrastructure grants to ensure it gets to where it is needed the most.

The Minister said funding for infrastructure grants is being discussed with Treasury on how to advise municipalities on expenditure.

Mr Bhanga expressed concern about the non-achievement of the Department in the placement of artisans. He suggested that MISA should thoroughly look into the matter of placing artisan graduates so that they get an opportunity for internship or experiential training.

Mr Molefi replied that artisan system depends on certain preliminaries, available budget and readiness to absorb these skills. A model is being developed to absorb artisans into municipalities when they finish their apprenticeship with municipalities after two years.

The Minister remarked that property rates would continue to be the main source of income for municipalities. More and more working people are needed so that they continue paying property rates. He thanked the Committee for receiving the presentation positively. He concluded that people should be put first, not political parties and there would be a lot of hard work between now and February 2015, and they would ensure the machinery digs deep in order to ensure delivery happens.

The meeting was adjourned.