Department of Cooperative Governance & Municipal Infrastructure Support Agency on progress of support & interventions aimed at improving spending of grants & service delivery at local government level

Standing Committee on Appropriations

24 February 2015
Chairperson: Mr P Mashatile (ANC)
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Meeting Summary

The Department of Cooperative Governance and Traditional Affairs (COGTA) and the Municipal Infrastructure Support Agency (MISA) briefed the Standing Committee on Appropriations on the progress of support and interventions aimed at improving the spending of grants and service delivery at the local government level.

The presentation focused on the expenditure of the Municipal Infrastructure Grant (MIG) for the period June 2014 to January 2015. The Department highlighted the MIG allocations, the beneficiaries and the expenditure per sector. It gave details of the challenges which they faced, the support that municipalities received, and the objectives of the MIG programme.

Members vigorously interrogated COGTA on the allocation of grants and its expenditure in various sectors and provinces. They wanted to know if value for money had been achieved and sought answers as to why large amounts of money had not been put to proper use in certain instances by local government. A recurring theme was questioning how successful MISA had been in supporting over 108 vulnerable municipalities that lacked financial resources and technical skills.

The Chairperson stressed the importance of efforts to stabilise local government and build capacity. Members from the Select Committee on Finance (NCOP), who attended the meeting, asked questions relating specifically to projects and grants per sector and province. Some Members felt the presentation lacked sufficient details about specific projects. One topical issue identified was the misuse of MIG funds by local governments in order to deal with operational budget pressures. Areas of concern included the lack of adequate sporting facilities in the Northern Cape, the lack of capacity in the Amathole District, and progress of the Nooitgedacht water scheme in the Nelson Mandela metro. There was also concern about the expenditure on roads and storm water in KwaZulu-Natal and Mpumalanga.

Several questions were raised about the accuracy of the figures reported, and the Department was asked how it intended to deal with municipalities who used the MIG funds for operational budgets. Another concern was about the costs of MISA, and the overlapping of three departments which were all working on water and sanitation. Clarity was sought on how the Department was assisting local governments overcome their poor collection of rates. Members wanted a complete breakdown on all of the projects and their status. It was suggested that that the provincial Departments of Cooperative Governance were extremely reluctant to take any responsibility for assisting local government. What improvements had there been since MISA had been established?

Meeting report

Chairperson’s welcome

The Chairperson welcomed the Committee Members, the Department of Cooperative Governance and the National Treasury to the meeting. There were two apologies -- Mr G Gardee (EFF) and Mr N Kwankwa (UDM).

Mr C de Beer, (ANC, Northern Cape) Chairperson of the Select Committee on Finance, NCOP, and Ms E van Lingen, (DA, Eastern Cape) NCOP, were also present for the presentation.

The Chairperson noted that Members were very concerned with the new budget, and expenditures related to grants. The Department of Cooperative Governance and Traditional Affairs (COGTA) was in attendance to share their concerns regarding the grants, allocations and spending of local government. There were huge challenges for municipalities, and on Wednesday there would be a new budget and people on the ground must receive the budgeted services.

The Chairperson invited Mr Vusi Madonsela Director General, COGTA to address the meeting. He handed over to Mr Khwatlekani Bologo, Executive Manager: Infrastructure at the Department of Cooperative Governance (DCoG), who proceeded to give the presentation on the Municipal Infrastructure Grant (MIG) projects and funding.

Municipal Infrastructure Grant

Mr Bologo briefly sketched the background to the MIG programme, which had been launched in 2004/2005. The programme was introduced as part of major reforms implemented by the government to improve service delivery in a coordinated manner. It was the largest of its type in South Africa and was managed by the Department to foster cooperative governance and develop local capacity in the local government sphere. A summary of MIG expenditure in the last seven months and the allocations, beneficiaries and expenditure per sector were given. (See attached document).

The challenges of the MIG were identified. These included inadequate planning within the context of the Integrated Development Plan (IDP), lack of capacity to manage MIG projects, service providers not being able to deliver, late payment of service providers, length of council decisions to approve projects, delays in Environmental Impact Assessments (EIAs) and the use of MIG funds for operational budgets.

COGTA’s main responsibility was the oversight of MIG processes and procedures. This included supporting municipalities in the pre–implementation phase of projects, assisting municipalities during the implementation phase of the projects and the establishment of teams that visited specific municipalities to address challenges.

Specific focus areas of support included assisting municipalities with planning, the development of action plans to address specific challenges, provision of high level intervention where projects were delayed at municipal level and the interrogation of cash flows to aid in realistic projected expenditure.

The Municipal Infrastructure Support Agent (MISA) also provided planning and support for town planning in nine provinces through its planners and professional service providers. Numerous examples of municipalities’ current support were mentioned and the impacts of the MISA support before and after successful projects were completed. (See attached document)

The Back to Basics Campaign had been adopted by the Department to assist municipalities during the implementation phase of projects, ensuring positive spending trends were maintained and site visits to targeted projects were undertaken with all stakeholders to confirm that projects were implemented as approved.

Mr Bolego informed the members of the Standing Committee that the DCOG anticipated some municipalities receiving the MIG would substantially underspend on their allocations by the end of June 2015. The Department would recommend to the National Treasury that a portion of these municipalities’ 2014/15 allocation be stopped. The Department would meet all municipalities that had reported an expenditure of 40% and below of their 2014/15 MIG allocation, as at the end January 2015. The Department would, after consultation with these municipalities, request National Treasury that a portion of the allocations to those municipalities be stopped.

The Department’s presentation made three recommendations to the Standing Committee: the performance of municipalities regarding the implementation of the MIG programme, COGTA support to municipalities through the MISA programme, and the challenges affecting municipal performance and support provided to municipalities.

Discussion

The Chairperson asked the Members for questions and queries on the presentation.

Mr De Beer thanked the Chairperson for the invitation to the meeting and expressed his appreciation for the value of these crossover meetings. He raised the point on the MIG being used for operational purposes by the municipalities, instead of for its budgeted purpose. In respect of this problem, he noted that Keimoes municipality in the Northern Cape had lost an amount of R17 million in MIG funds that had not been used. After his intervention, an agreement between Pretoria and Keimoes had resulted in an amount of R5 million being received by the municipality. The provincial Department of Cooperative Government should have been involved here, but had played no role. There was a problem regarding insufficient sports facilities in the Northern Cape municipalities, and they had received many complaints from the community during their oversight visits.

He asked what the memorandum of understanding signed between the DCOG and the National Treasury was, and why only nine municipalities had received rollovers. The Municipal Finance Act was very clear on the role of the Mayor, Municipal Manager and the Chief Financial Officer on underutilised equity funds, and this had not been carried out by them. The SA Local Government Association (SALGA) must look at ways of alleviating the situation by ensuring that the municipalities send their staff for training in order to be taught to do multiyear planning and project management.

A Member expressed his thanks for the support provided to some 40 municipalities in North West Province. Looking at the R14 billion financial budget of municipalities, he wanted know an amount of R9 billion had been transferred with only three months left – was a rollover anticipated, and what were the reasons for the transfer?

Ms M Manana (ANC) said that she had four questions for the Department. The presenter had mentioned that the the locking of the gates of sports fields, and she wanted can clarity on this. On the planned households, there was no direction of what these were. The issue of capacity building in the Amathole district had been raised and when oversight was carried out, a problem with the funds had been discovered – could this be clarified? The Municipal Manger at the Mabopane municipality had indicated that they were not using the money received because the Council had not made a decision for some months. Was there no planning for this money, which had been approved?

Ms Van Lingen sympathised with the challenges confronting COGTA. In the summary of MIG expenditure the Nooitgedacht water scheme for the Nelson Mandela metro was included. In terms of the needs on the ground, the municipality often cried foul that their budgets were not the same as the provincial and national budgets, and they had found a way of bridging the problem.

She said the Eastern Cape had not spent any money in November 2014, and that was a problem for her. Could this be clarified? Referring roads and storm water expenditure, the presentation indicated the Eastern Cape had challenges, but she was aware that until the end of November no tenders had been approved for roads at all – so what was the problem?

She said she needed clarity on KwaZulu-Natal, Mpumalanga and North West Provinces, who had no cumulative expenditure on roads and storm water drainage, yet they spent a lot of money overall. Were energy saving lights being used in the community lighting programme to contribute to the national campaign? The sport centres were also a worry because the Eastern Cape had spent only 27 %. On landfill sites, was COGTA working only on permanent sites or other sites as well? She expressed concern about the oversight of projects and project managers, and felt that all project managers had to be certified and officials had to have specific qualifications. She agreed with Mr De Beer that there was a problem with certain municipalities spending their MIG allocations on operational issues. Was all the information of the state of municipal finances on the COGTA website, including the methodology for identifying the dysfunctional municipalities? Was anything being done about Brandfort, where there was no water. There were serious issues which had to be addressed in Eastern Cape municipalities.

Mr M Figg (DA) said the issue of municipalities spending MIG funding on operational expenditure was important. He wanted to know if the MIG was granted as a loan and how the money was repaid, and what the Department was doing. Another issue was the formula, and according to his calculations the figures did not match the 75% of the R40 billion, as given. Clarification was needed. A slide indicated that 45% had been spent after seven months, but at this stage the figure should be closer to 60%. Similarly, only North West and the Northern Cape seem to be performing well, at close to 80%, while the other provinces were around 60%. He also pointed out that the individual breakdown of allocations did not seem to add up to the overall allocation figure, and asked for an explanation.

Mr A McLoughlin (DA) noted that in the MIG formula there was no explanation for (F) and he wanted to know what it was.

On page 2 of the MIG narrative presentation, it was stated that by the end of January 2015, R6.7 billion of the transferred amount was reported as spent, leaving a balance of R2.3 billion still unspent. This unspent money must be lying in the accounts of the municipalities, and he wanted to know if the Department was monitoring this. Why was such a huge amount of money not gaining any interest?

He asked on what basis was an allocation transferred to a municipality and what triggered the transfer of money. As he understood it, the IDP process took place over the August, September and October months, and from this a business plan was drawn up. The municipality then approaches the Department and requests the funding required, and by this time a year has already passed. In the meantime, old infrastructure needs replacing and this means another year before MIG funding can be requested. Was there some way in which a municipality ccould fast track access to funds and get approval from the Department?

Referring to the challenges, the majority of municipalities failed to collect moneys owed to them and this then became a revenue shortfall. What was COGTA doing to ensure that municipalities met their legal mandate in collecting all unpaid rates and taxes. In his constituency (Mfuleni), there was a R2.2 billion debt outstanding from the local population and nothing had been done to collect that money. He asked how the Department was addressing this shortfall, and what process was being put in place to achieve this.

He expressed concern that MISA -- a new structure -- must now assist municipalities, because it was an extra cost being incurred, and municipalities were unable to perform the functions they were supposed to be doing. MISA should now get involved in the whole process, especially with the tender bidding process, where either the wrong people were selected, or companies who were not able to perform the job. MISA should be getting involved in the training people in municipal tender bid committees.

Another problem was COGTA addressing water and sanitation, while the Department of Water and Sanitation and the Department of Human Settlements were also handling this, which created an overlap. Why were three different departments doing the same job and overlapping with each other? Where did one draw the line and prevent overlapping, because this incurred more costs -- and surely one department could handle this?

Mr Faried Essack (DA, Mpumalanga), NCOP Select Committee on Finance, thanked the Chairperson for the opportunity of addressing the Standing Committee. Water and sanitation, which everyone knew was the next crisis, had a total of R6 billion allocated for all the provinces, yet the total spent in the last two months was only R2.8 billion -- a little less than 15%. He asked how the Department aimed to address this under spending.

Under sport facilities, the Free State had been allocated an amount of R 148 498 460 and the expenditure was almost double at R 283 328 343. This is very concerning. How did they overspend and what did the Department intend to do about it? Under the challenges, could the Department advise what the sanctions were for those ,unicipalities that made use of MIG funds for operational expenses.

Lastly, was MISA controlling the MIG fund?

The Chairperson asked DG Madonsela to respond to the Members’ questions.

Director General’s response

The DG replied by thanking Mr De Beer for his questions, especially those regarding municipalities training staff for multi-year planning. Regarding the memorandum of understanding, he was not immediately aware of what it was, but would investigate and provide an answer on how it would help overcome the challenges COGTA faced.

The role of MISA, and what led to its establishment, was the fact that many municipalities across the country did not have people with the requisite technical skills like town planning, engineering, or project management, especially in the rural areas where they could not attract people with those skills. The Department had decided to pool these needs at a national level and to deploy these skilled people at a project level and deploy them on a project basis in areas of need, to overcome the challenges of a lack of technical skills. The establishment of MISA was less expensive, because all the expertise was pooled and one could spend money only for work done on a project, and this was a much more prudent way. MISA did not control the MIG. Its purpose was to assist municipalities to spend money by providing project management and the necessary technical expertise. There was some quality assurance and the time frames were stuck to in the projects. COGTA controlled MISA and ensured municipalities complied with MIG needs. COGTA was obliged by law to make sure that as it released money in tranches, municipalities complied with the conditionalities attached to MIG. If they did not meet those conditions, COGTA was obliged by law to withhold that money until such time as there was compliance.

The reason COGTA had transferred only R9 billion instead of the whole amount was because it was not yet year end. It expected to transfer the total amount of money if indeed the municipalities were sticking to the conditionalities attached to the infrastructure roll out.

Referring to the question on who was locking the gates of the sports and recreational facilities, he said many departments, including the Department of Sport, had not participated in the IDP phase and had squandered the opportunity to persuade communities to participate in sports and recreation. Their absence from those processes had effectively locked out the communities from obtaining those benefits, because those departments were not involved in the community space where young people wanted sport and recreational facilities.

If one looked at some of the fields in the presented spread sheet, they were empty. If they were empty, it meant a number could not be put into it until it was updated on a daily basis, because this could be done only when the benefit of the money had been received. Sometimes in these MIG funded projects, the municipalities may also contribute towards them, so the expenditure may be higher than the initially approved amount that had been allocated.

Looking at the issue of the MIG formula of 75%, when one took into consideration the needs of the IDP and the needs on the ground, the formula may not work out exactly to 75 %. In terms of the MIG projects, one might find that some municipalities had not committed or there were some projects not in the system and the council had not approved it, so the numbers would not match. There were five months left, and some councils had not made a decision to commit.

On the question of the transfer of funds, COGTA had already transferred the amount of R9 billion. The Department transferred money three times a year -- in July, November and March. This had left an amount of R5 billion which would then be transferred in March, depending on the progress. If the conditions were not complied with and there was no progress on the ground, it would not be transferred to the municipalities, otherwise one would not be complying with the Division of Revenue Act (DORA).

As the financial year end approaches, the Department decides to either transfer funds or not, and it does give money to those municipalities that need it, if it has not been used. COGTA engages municipalities on these issues beforehand. Sometimes one may find that a new council has affected continuity and it may decide that a project that is ready for implementation, and has already been decided upon, is not their priority -- and this creates a problem. The IDP should be the driver of these decisions, as the people had already made those decisions and the council can not overturn them.

The issue that Mr De Beer had raised about the lack of sports and recreation facilities in the Northern Cape was a serious problem for those municipalities, because they were facing a challenge of insufficient funding the MIG allocation was insufficient. These municipalities may also have other more urgent priorities which override sports and recreation, such as a new sewerage plant or the refurbishment of old infrastructure. COGTA noted the point and would engage with the Department of Sport to ensure they came on board.

The National Treasury could explain how the offsetting process was affecting the municipality. The Department had a website on the National Treasury, together with the MIG. That information was used to determine the functionality of the municipalities.

Regarding the issue of only nine municipalities getting a rollover from Treasury, the rollover could be approved only if all the criteria for it were approved and the money must be in the municipality’s account. Treasury had put the criteria for a rollover in a circular to all the municipalities.

The multiyear planning approach through the MISA programme was the gospel that COGTA was preaching, but it tended to be affected by municipal leadership, and councils always want to do things annually. The Department feels that changes at leadership level should not affect the projects.

In the case of OR Tambo Municipality, they were allowed to use MIG to get capacity but when COGTA went to check this out, it found that they had made appointments of people who were not skilled. The issue then became one of municipal governance, where the rules and regulations of hiring and making correct appointments had not been adhered to.

On the issue of Mopani, the Department did not have projects for MIG yet. It was worrying that because of certain challenges between them and National Treasury, COGTA had lost about R284 million. It had been left with R160 million and that money would be spent on projects this year.

On the issue of the landfill sites, these were licensed sites which had gone through the normal environmental impact studies and had received approval.

The water challenges in Brandfort are very costly, and COGTA can provide assistance. The municipality must first prioritise which is their most urgent project and if it is water, then COGTA will try and assist them through the MIG funding, although resources are also very limited.

On the question of the Eastern Cape showing no expenditure for the month of November, the Department gets three monthly reports showing the status of all expenditure, but the Eastern Cape had not been updated yet for November and the space was left empty.

On the question of the MIG formula, the symbol (F) is the total MIG fund.

The transfer of money is triggered when National Treasury requests that COGTA and the provinces must submit cash flow statements to them before the financial year end. Once COGTA gets the cash flow statements of municipalities, these are submitted to Treasury so that they can plan properly. The Department transfers money three times per year in July, November and March.

On the problem of total water expenditure, the Department is working on this. The typical water projects expenditure will initially run low when it starts and as it is being completed, it will start increasing in February.

The multi-year planning that was proposed is a key to stabilise expenditure, because if one plans to spend over three years, then spending is distributed over a longer period and one can stabilise it. COGTA is still trying to convince municipalities to understand and adhere to this.

Municipalities that do not comply with the conditions of the grant and use the MIG for operational expenses can be sanctioned for this. Those sanctions include withholding money or withdrawing it from the municipality. The question of using MIG money for operational expenses is a cash flow management problem, and money that has been spent can not be recovered. The challenge from the COGTA side is that it does not have access to municipalities’ bank accounts -- only National Treasury and the Auditor General have that.

Mr Muthotho Sigidi, Deputy Director General (DDG), Intergovernmental and Fiscal Relations from the Department, answered the question on the issue of the collection rate from municipalities. COGTA had been supporting municipalities in improving their credit control policies and by-laws, because if one did not have credit control bylaws one could not implement cost recovery, otherwise one would be legally challenged. Through the Back to Basics programme, the Department had a campaign that emphasised the culture of payment.

There was a greater challenge to being able to collect outstanding debt for those municipalities in the rural areas who were not licensed to reticulate electricity. Those who were licensed to reticulate electricity in their areas would normally have a consolidated billing which could force the consumer to pay other bills owed, so that if one did not pay one’s water bill, then the electricity would be cut off.

Mr Sigidi turned to the issue of whether COGTA was not dumping MIG money into the municipalities by transferring money around. The medium term expenditure framework gave one certainty for finances for about three years, and on the planning side one had the Integrated Development Plan (IDP).When the council looks at these factors, it looks at the five year plan and says its IDP is a credible framework for the process. From this, the municipality then does the first line of implementing the IDP plan, which takes all the projects in the first year, with the appointment of consultants, which are then already implemented in the first year. When the first year starts, one already has all the projects that one needs to start with in the implementation phase. This indicates to COGTA that whatever has been implemented well in advance in this year had been planned and budgeted for, and it does not see this as fiscal dumping.

Mr Themba Dladla, Acting CEO, MISA, then responded to the status of the water treatment plant in Brandfort, saying that he did not have specific information on this specific water treatment plant but would follow up and provide the facts and figures on it.

He then proceeded to answer the question of whether there was an overlap of the role-players in water and sanitation. The overlaps were taken care of when the various departments sat down and did their planning over a period of three years. The different departments, together with COGTA, then discussed who was responsible for what project and what funding would be given and this prevented an overlap of departments on the various projects planned.

He responded to the issue of whether the establishment of MISA was an expensive option to follow. MISA had discovered that a lot of wastage was due to overdesign in many projects, and that consultants had also attempted to take certain municipalities for a ride. MISA provided engineers who looked at the designs and altered them, which had prevented a substantial amount of wastage due to overdesigning. They had also been involved in many projects that had been incomplete due to delays, and these had now been completed.

Mr Bologo responded to the question about the Nooitgedacht water scheme in the Neson Mandela metro. The Nooitgedacht water scheme was managed by the Department of Human Settlements and gets its funding from the Urban Settlements Development Grant (USDG) of R10 million, and not from the MIG.

The MIG did have a relationship with the various departments. The Department of Water and Sanitation were the regulators who determined what the norms and standards were, and also had their own grants. COGTA tried to ensure that all these departments were integrated and coordinated all the various role players. However, one had to understand the role each one plays. COGTA ensured that the departments work together and ensures that they cooperate with the municipalities and regulate all their policies.

The Chairperson then announced that this concluded the first round of questions and the Committee would now take the last round of questions.

Mr N Gcwabaza (ANC) asked for a complete breakdown of all completed projects and the status of all other projects in respect of their expenditures. There were problems with municipalities with low revenue bases, and he suggested that COGTA should assist the municipalities to redirect money that had been spent, otherwise it looked like maladministration. The awarding of tenders to companies that lacked capacity and were unable to complete them was a problem that could be circumvented by rather awarding these tenders to experienced companies who could deliver the goods -- but on the condition that they subcontracted to emerging black contractors and transferred their skills to them. This was coupled with sustainable job creation so that black emerging contractors could emerge and benefit. The initiative of creating MISA was a good idea, because one did not have a resident engineer for every project. Projects by their nature were time bound and contractual, but what was not time bound was the sustainability of these projects at the local level, where one needed the transfer of skills.

Ms R Nyalungu (ANC) wanted to know the relationship between COGTA, MISA and Public Works in assisting local government. It was a good initiative to establish MISA, but this presentation needed to be beefed up on specific details of projects and on value for money. Did COGTA have a skills audit of those employed in the poorest municipalities, because she was concerned about the survival of the fittest in local government? Those municipalities that had very good resources, like the metros, would get assistance from the MIG, but not those that were very poorly resourced. COGTA and MISA must talk to those municipalities that lack capacity so that they can benefit from the MIG. The Department must focus on those municipalities lacking capacity and assist them. Were the delays in environmental impact assessments (EIAs) due to inadequate planning? What was the relationship between local government and the monitoring and evaluation unit, and was it working or not? Had the Department completed a skills audit at all the local municipalities so that MISA knew when it needed to make an intervention to address a lack of skills? Was there is a programme for indirect grants, where national government could intervene and help a municipality?

Ms S Shope-Sithole (ANC) questioned the lack of expenditure indicated for roads and storm water in Kwa Zulu and Mpumalanga.

Ms Nyalungu asked a follow question up with regard to the Department of Sports and Recreation and said she disagreed with the DG, because in Mpumalanga this Department was participating in the IDP processes. Members were all aware that 15% of the allocation was for sport, but the municipalities were using it for other areas because of financial pressures.

Dr C Madlopha (ANC) wanted to know if there had been an improvement since the support from MISA and, if not, what measures had been put in place.

Mr Dlada responded to the question around the sports facilities by saying that whether the Department of Sports participated or not was not the big issue, but community participation in the IDP determined whether there would be a sports facility, and they would state what their priorities were. The municipality then had to provide the 15% for the facility. The Department of Sports also had to provide the norms and standards for the correct type of facility which was suitable for that community.

On the issue of skills, other government departments could provide or implement any service on COGTA’s behalf to a municipality, provided that there was a service level agreement.

On the matter of EIAs, he agreed that COGTA should be able to complete them within the planning period. After completing the IDP, the Department sends the EIAs to the Department of Environmental Affairs who approve them, and COGTA sends them to the responsible technical sector that will approve them and then COGTA registers them into the system. The Department should be able to do that and the IDP should be used as the planning instrument for projects it can implement the following year.

Awarding experienced contractors tenders and having them transfer skills to emerging black contractors, is something favoured by many municipalities. It depends on the goodwill of the contractors, some of whom see the emerging contractors as competitors, and do not transfer the skills or they say they are unable to deliver a quality result because of some of the transformational measures that have been put in place. COGTA engages with municipalities so that that they do not employ some of the contractors that are not yet rated.

Mr Dladla dealt with the key component of the 15% allocated for sport and recreation. When the decision was made to allocate the full amount of 15%, the implications were that municipalities did not have money to build taxi ranks or multipurpose community centres, which affect the life of rural people. This was a serious challenge, because the key component is public infrastructure. To have 15% purely for sports was a bit of a challenge -- building a high level structure that the community could not use on a daily basis except by paying for it in order to sustain it. The MIG should rather be used for basic level facilities, such as soccer fields, to encourage children to play. Members needed to know all the factors in a community which sometimes were more important than sports facilities. The Mpumalanga situation was different, because when COGTA did the planning session it was told that the Exco had taken a decision that all of the MIG must be spent on water and sanitation because of the serious challenges in these areas.

Most of the municipalities that are currently dysfunctional are listed under Project Consolidate and when COGTA channels support, it looks to MISA to assist and support these struggling municipalities which are vulnerable and lack capacity.

Mr Bologo responded to a question on the building of internet skills by the Department of Public Works and the work that MISA was doing in addressing the skills gap. Various government departments, such as MISA, Public Works, Water and Sanitation, were addressing the capacity constraints within various municipalities. There was a need for greater integration of all these capacity building initiatives aimed at supporting municipalities.

Regarding an audit of skills of poor municipalities he said that before MISA was introduced there was an entire diagnostic exercise that was undertaken to pick up critical areas of skills shortages, such as project managers, artisans and process controllers. MISA had responded by ensuring the training of artisans.

Mr Bologo said there was a document which detailed how many people in the technical services had matric, diplomas or degrees in every municipality, and what skills were required in them, but he could not remember the source. MISA had responded to the diverse skills needs by developing the requisite technical skills through the training and recruitment of people who were deployed to the municipalities.

MISA was focusing on poor municipalities. These had been identified as 108 municipalities with low capacity, old and failing infrastructure, and poor skills. These were the most vulnerable and met the criteria.

On the question of whether there had been any improvements in the planning sessions which had taken place with the district municipalities, COGTA had advised certain district water service authorities that were implementing roads and other projects that their function was not to implement roads, but the water functions for which they were responsible. There had been some instances where municipalities were not committed or were under committed, and COGTA had stepped in and convinced them to address this situation.

Mr Madonsela said that in the area of planning, government was doing particularly well, but the preplanning processes were the problem. The area of implementation was where the greatest problems were. The existence of the Department of Planning, Monitoring and Evaluation had caused a considerable amount of confusion, as everyone believed that this Department was doing the planning for everyone. In fact, its primary concern was the micro plan of government, which is the five-year medium term strategic plan. This was an area of on-going improvement in government.

Ms N Manana, (ANC) said she remembered that SALGA had mentioned in 2013 that they had received a lot of assistance from the national Department, but the provincial departments were taking their responsibilities very reluctantly. There was a clause in the Municipal Finance Act that stated that national and provincial departments have to support the local government. Would COGTA be able to convince its colleagues at the provincial level to give the same level of support and commitment to local government that it had shown here. During her travels in the provinces, she was convinced that the provincial departments of local government did not see it as part of their responsibility to assist local government.

She asked if the report of the Auditor General on this Department could be obtained for the Members.

Mr Madonsela responded to the question of whether anything was being done to get provincial departments to provide support. Through the Back to Basics programme adopted last year, COGTA already set up provincial task teams that brought together provincial and national COGTA teams that went out and visited municipalities and provided direct support to them, as well as other Departments which like to play a follow up role.

The Chairperson thanked the Members and the DG and his team for their input. It was very important work. There was a need to stabilise and build the capacity of local government.

The minutes of the meeting of 19 November 2014 were adopted.

The Chairperson adjourned the meeting.

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