Capacity building in local government: Department, SALGA & SETA briefing; Municipal Managers & Section 56 Managers Appointment: implementation of regulations progress report

Meeting report

Capacity building in local government
Briefing by the Department of Cooperative Governance and Traditional Affairs (CoGTA)
Ms Shanaaz Majiet, Deputy Director-General (DDG): Regulatory Systems and Support to Provincial and Local Government, CoGTA, said that in terms of transformation standards there was still a long way to go towards functionality. A lot of money, effort and time was being spent on capacity development but it yielded no impact in terms of providing the capacity and skills that was wanted and needed. The programs were treating the symptoms but not the underlying causes.

There had been a lack of prioritisation in capacity building as local government priorities were not the same priorities espoused by national or provincial government. There was limited performance monitoring and evaluation with poorly defined roles and responsibilities. She said it should not be about capacity building but about building resilient institutions. The capacity building strategy would undergo a key shift to focus on the institution not the individual. Previously effort and resources had been spent on training people that should not have been recruited in the first place. Now appointees had to come with a basic level of competence, especially in the recruitment of senior managers. There was also a need to look at the middle and bottom level of appointments where more focus was needed.

The Department was following a five pillar, back to basics program and was monitoring the bringing in of experts as gap fillers because this would not lead to the building up of institutions as when the experts left, the institutions returned to the previous status quo. She then talked to the coordinating strategy and the sector strategy. Inter- sectoral support included a real-time dashboard cross-referenced and correlated for key services. She talked to the skills audit, the scarce and critical skills to strengthen municipalities’ technical capacity for infrastructure delivery. She then talked to Municipal Infrastructure Support Agent (MISA) which was a focus for the Department because of major service delivery headaches. The Department was coordinating with partners on a supportive role for tertiary institutions.

Briefing by the Local Government Sector Education and Training Authority (LG SETA)
Mr Nqaba Nqandela, Administrator, Local Government Sector Education and Training Authority (LG SETA), said the SETA was established to promote skills development for the local government sector. It was licensed to do this until March 2016.

The SETA had moved to an online work system to receive accurate credible information on workplace skills plans. There were though still some challenges for first time users. The change to an online system was initiated because some municipalities were found wanting when it came to compliance related to forms not being signed off, even though everyone had submitted plans. There was a difference between what a municipality needed and what they were able to do and this was illustrated by the funding requests the SETA received, which amounted to R1.6b while only approximately R400m was spent on skills development. This was because of municipalities’ performance in implementing the programs. The implementation rate of capacity building programs for municipal employees, including councillors, was only 6%. A continuing challenge for the SETA was the municipalities’ difficulty in accessing funds because of their inability to submit documentation which was compliant which would free up funds. To overcome this the SETA had changed its processes and cleaned up its backlog. This was affecting the SETA because it would then not record a good performance at the end of the year.

In developing a new template, the SETA had analysed what it had been doing for the past five years and at the end of the previous year it had introduced a new way to do planning and allocation which it was conveying to the municipalities. It had found that municipalities had started too late in the financial year to submit workplace skills plans. Municipalities had applied when a quarter of the year had already passed and if they were lucky, a program would start just before the financial year end. Municipalities now had to apply before the financial year started. Municipalities had applied for an extension which had reluctantly been granted and the SETA had finished the application process in April.

The SETA had six provincial offices. The Northern Cape and Free State shared an office while Limpopo and Mpumalanga also shared an office. Three more offices would open in Phalaborwa, Richards Bay and Umtata. It had appointed a senior manager to oversee monitoring and evaluation. Provincial staff supported municipalities and ensured a stable Education and Training Quality Assures (ETQA) program.

The SETA was close to being taken off administration and to being reliable and responsive to the needs of the local government sector. As the SETA was close to the end of its term, it was challenging to recruit quality people but it was now stable at the executive level. Other challenges were its lack of visibility and its communication. The SETA had developed a communication strategy. A further challenge was the issue of IT systems which ranged from weak to non- existent. The SETA had strengthened its financial and operational capacity in response to the Auditor General’s findings previously, that the SETA’s report was not accurate, complete or verifiable.

The organisation had been prepared so as to come out of administration. It had received nominations for the Board and soon the Board would be in place.

Briefing by the South African Local Government Association (SALGA)
Mr Rio Nolutshungo, Executive Director: Municipal Institutional Development, South African Local Government Association (SALGA), said the presentation would focus on how the SALGA Centre for Leadership and Governance was going to work to meet capacity building targets and challenges. The centre would have a broad capacity building role but it would be better if it concentrated its efforts on leaders and senior managers of municipalities in an effort to respond to the leadership challenges at municipalities. The centre was there to promote a developmental agenda and it was more about thought leadership. Universities would remain the place to go to attain qualifications. The centre would not act as an island and would deliver on its objectives through partnerships in a collaborative approach using existing mechanisms and coordinating with partners through memorandums of understanding and service level agreements. When the LG SETA Board was established, SALGA would seek out opportunities to work with the SETA. The centre’s methodology would be to expose participants to best practices. He also spoke to the program portfolio and he said the back to basics campaign had yielded an improvement in audit outcomes.

Discussion
Mr K Mileham (DA) said that in the macro context, Section 154 talked to an interventionist approach. What was the efficacy of these interventions? He had concerns on MISA’s capacity as an assisting agency and the Public Finance Management Act (PFMA) and Municipal Finance Management Act (MFMA) skills within MISA. He used the example of a case of a certain company supplying toilets in the Northern Cape in which MISA was involved. MISA had then recommended the same company for a similar contract in the Eastern Cape. What allowed MISA to award tenders in the first place?

Mr E Mthethwa (ANC) asked what plan there was to capacitate the people in existing jobs.

Mr M Hlengwa (IFP) said there appeared to be an issue of a lack of coordination as it appeared that the Department, SALGA and the LG SETA were speaking past each other. He said the DDG had spoken of people being employed initially without qualifications. Why were unqualified people employed in the first place and what about the opportunity cost as it was a waste of taxpayers’ money. The recruitment process needed to be tightened. In a Standing Committee on Public Accounts (SCOPA) meeting Director-Generals (DGs) had to send warning letters for PFMA and MFMA infractions against nine DDGs.

Mr A Mudau (ANC) asked how SALGA monitored managers actually doing courses they were enrolled for. He said people were appointed to positions they were unqualified for.

Mr C Matsepe (DA) said recruitment in municipalities was a serious issue.

Mr A Mathloko (EFF) said capacity building happened year in and year out but nothing changed. It was a waste of resources, both money and people. Cadre deployment was a problem because of the demands of administration with regard to political interference. Cadre deployment and interference also caused staff to be lost to the private sector. The issue of continuity need to be raised because councillors came in for five years, were trained then left, leaving institutions without leadership. SALGA and the LG SETA should influence that a percentage of people be retained.

Mr Hlengwa said it appeared from the LG SETA figures provided that more attention had to be paid to the disabled. What plans were there for focussing attention on the disabled and having an impact on addressing the skills needed in the sector? Could the figures for the youth be broken down further?

Mr Mthethwa asked if the R1.6b mentioned in the presentation was a realistic budget. If it was, how did the SETA intend dealing with the matter? What was happening regarding the coordination capacity in the SETA? He said all Members of Parliament were deployed by their political parties.

Mr Mathloko said his comment had not been on political deployment but on the administration of municipalities.

Mr Mudau said equity employment in municipalities was a problem. The wage differential between municipalities in urban and rural areas meant the rural areas never got good qualified people.

Mr Mileham asked what had happened to the Skills Development Levy (SDL). Could it not be used to fund the LG SETA? How could the SETA train municipal officials when it did not have a Board, had financial problems and bad audit reports? Where was the leadership coming from if the SETA did not have a Board?

Mr P Mapulane (ANC) asked when there would be one co-ordinated training in the country for local government in the same manner as the national government’s School of Government. Regarding the Skills Development Act, he said a percentage had to be put aside for local government training. To what extent did municipalities also get value out of that amount?

Ms Majiet said a number of questions asked would be answered in the presentation that would follow later.

Mr Victor Matada, COGTA Executive for Capacity Building, MISA, said that regarding the Northern Cape tender, the Siyenza Group had provided information. The group had tendered as a joint venture on the basis of the accreditation of one of the companies in the venture.

Mr Mileham said that a company within the joint venture, Taj, had a Construction Industry Development Board (CIDB) rating of 5 and were allowed to tender for a maximum of R6.5m but the tender that was awarded to the joint venture was for R100m.

Mr Matada said the tender was under investigation regarding the provisions of the law on sharing the tender with two or more agencies. It was not incumbent on MISA to make these appointments for the tender.

Ms Majiet said MISA had not made the decision on the tender, the regional municipalities made that decision. The matter had been discussed in the House and follow up questions should not be asked in the meeting as the meeting was for a specific purpose, questions should be asked in the appropriate fora.

On a coordinated approach to training, she said that was exactly what was wanted and the role players needed to exercise discipline. This matter was a challenge facing the Department. COGTA had a leading role on the coordination. With the Department of Higher Education (DHET) it had developed an initiative for a centre of learning for local government which would be implemented very soon. It was at an advanced stage and was aimed to weed out fly-by-night training

Mr Nqandela said the R1.6b was the value of applications received by the SETA not the budget of the SETA. 20% of the Skills Development Levies (SDL) collected went to the National Skills Fund. 80% was shared amongst the SETAs. 10% of the allocation to a SETA was allowed for use by the SETA to run itself. 20% of the SETA allocation went back to municipalities as mandatory grants. This left the SETA with 49.5% to use as discretionary funding to cover the applications for training.

How training was monitored was a problem for all SETAs. It was a challenge for people to go away for an educational program or if they did go, to stay for the whole course because of the demands of their responsibilities. It was a matter the LG SETA was grappling with. The LG SETA monitored through visits and the ETQA which did not entirely address the issue. The LG SETA worked better when it worked with SALGA. There were many information systems and this should be a basis for discussion. He agreed with the comment on skills development of people with disabilities. The SETA had highlighted this point and in the previous year had initiated one big project. However one needed to ensure that the workplaces were ready to receive them. It was working mainly with organisations working with people with disabilities.

On spending on inactive projects, he said that when compliance criteria had been met, the SETA paid the first tranche of money. A second tranche was paid after the appropriate work was done. Some organisations stopped doing work after the first tranche was given. This was still an issue and the SETA was considering changing to a performance based system. This however had huge implications for getting work going because it would be based on an invoice system.  

The SETAs did not see itself as having an exclusive wisdom. The SETA’s mandate stemmed from the Act and the SETA model was for the whole country and applied to different SETAs to do sector skills planning and quality assurance. SETAs did not do training. The LG SETA had had governance problems but one had to correct what was wrong and not dismiss the SETA.

Mr Mileham said it was his prerogative to ask the DDG questions in the Committee and that the issue of the Siyenza Group he had only used as an example. He asked if MISA had the financial skills to award tenders.

Mr Nqandela said he believed the figure of R1.6b was realistic because that was the sum of the applications for training the SETA had received and therefore what was needed. But it was unrealistic because of the inability, currently, of municipalities to manage even the funds that were available. He said the SETA did not have many partnerships at the level of lending or funding but this was not significant at the moment.

Mr Francis Ratlhaga, Acting National Chairperson, SALGA, said that if the training was initiated by SALGA it was monitored by their offices but if the training was initiated by the municipalities then the monitoring was done by the municipalities.

Regarding the disparity in salaries, he said there were different grades of municipalities in the rural areas and they relied on grants so there would never be parity.

On the issue of cadre deployment and the employment of managers, Cllr Chris Ndlela, Member, SALGA KZN, said the post description was the minimum requirement for a management position and the advertisements for the post had to show these minimum requirements. There were cases where people who were unqualified were awarded posts. SALGA then advised municipalities to reverse their decisions.

Implementation of Local Government Regulations
Briefing on the by CoGTA

The Chairperson said the Committee wanted to know what progress had been made since the last meeting.

Ms Tebogo Motlashuping, Executive Manager for Municipal Administration and Human Resources, CoGTA, said that on 17 January 2014 the regulations came into being and the Department had conducted workshops on the appointment of senior managers.  Any appointment after this date would become null and void if it did not comply with regulations.  This was a commitment to the Back to Basics program. The Department would monitor the appointment of senior management and analyse them. A database of dismissed staff would be built up by the Department as there must be no misconduct charges against appointees. Where it noted that officials had misconduct charges against them, the Department would advise the municipalities and also capacitate the municipalities to be able to do their own checks via the database. The Department wanted to regularise the salaries of senior management and the categorisation of municipalities. The Department wanted to do away with high salaries and limit it to a range with a cap to protect against irregularities. But the challenge was that managers were accountable to municipal managers and this needed to be looked into.

Municipalities had to send information on their misconduct cases to the Department. The Department had put mechanisms in place to monitor management appointments. If the appointed person was unqualified, then the Department would advise the municipalities or take the matter to court.

Ms Majiet said that since 17 January there had been major change and 89% of appointments were in compliance with the requirements. The Department was putting pressure on MECs and holding them to account to make further progress on compliance and to speed it up. Doing nothing about the matter was not an option. The next wave of compliance would target the level below senior management. In the implementation process the Department had picked up lessons on improving implementation.

Briefing by SALGA

Ms Lorette Tredoux, Executive Director: Governance and Intergovernmental Relations, SALGA, said SALGA supported municipalities in the implementation of the regulations and helped with performance management and job evaluation.

SALGA had five broad issues it wanted to raise. These were:
The balance between the need to address institutional and administrative issues in local government, noting the constitutional integrity of the local government sphere
The need for municipal administrations to become professional and how that would be achieved
The relationship between regulation and the notion of differentiation
The relationship between regulation and the Public Administration Management Act processes
The nature and extent of the use of regulations

Its four main areas of concern were the over-regulation of conditions of service, process issues, the upper limits for salaries and the duplication of competency requirements. She said over-regulation of conditions of service would mean the municipalities would have two policies and this would infringe on municipalities’ freedom to make their own decisions. The upper limits on salaries was biased against low income low capacity municipalities and acted as a deterrent in recruitment of quality staff and the lower limit should be moved up a bit. The grading of city managers was far too wide and the process to motivate a market premium was a long and expensive process. There was concern about how an employee moved within a grade and about the three year band before an employee could move up. Another concern was that National Treasury did not recognise prior learning. The Employment Equity Act requirements did not gel with the competency tests. She asked whether the SETA could fund the competency tests and noted that SALGA itself had developed a competency model. Some municipalities did not have performance management systems. SALGA had applied for funding to capacitate these municipalities.

Discussion
Mr Mileham said the implementation of the regulations was great news but he was concerned about the discretionary nature of the regulations being left to the political principals. The regulations said ‘the Minister may take steps’ and this should be changed to ‘the Minister must take steps’.

Benefits and interests had long been a concern of his. Municipal officials were doing business with government. When would the regulations prevent business being done with government? When would fulltime or part time work outside of government be put to a stop? What program was there to prevent this occurring?

Mr Mapule asked how far the regulation process was and when would it be concluded. Based on the presentations, there appeared not to be consultation with SALGA. Perhaps there should have been a platform for SALGA to raise its issues. It seemed there was no synergy between the Department and SALGA. He would have thought that these issues would have been consulted upon before reaching the Committee level.

He said that an interpretation of Section 57 was that one did not have to be appointed on a fixed term contract yet it had been done away with and this was confusing.

Mr Matsepe said the database of dismissed staff needed to be looked at again because in provinces like Gauteng, KZN and the Western Cape, staff had been dismissed,  yet despite rampant corruption, provinces like the Northern Cape, Limpopo and Mpumalanga returned a nil or low figure for dismissed staff. There might be cover ups occurring. He said he had heard of a municipal manager in Limpopo who had unilaterally increased their salary by approximately 30%.

Mr Ratlhaga said it was not a fair comment that SALGA was not engaging with the Department. At their most recent meeting, assurances had been given that all SALGA’s submissions would be looked into. They were not two parties in opposition, it was in the nature of things that they would agree and disagree on various matters.

Regarding the discretionary powers of the Minister and MECs, Mr Motlashuping said there would be an engagement with provincial government and only then would the Minister agree to certify the regulations.

Regarding the disclosure of interest, it would be in contradiction of regulations and there would be consequences. On senior management doing business, he said there were constitutional impediments because it would imply that senior management could not engage in anything else.

The Chairperson said there was a need to look at what the law said, which should be applied to all people working in municipalities.

Ms Lorette Tredoux, Executive Director: Governance and Intergovernmental Relations, SALGA, said the Supply Chain Management regulations dealt with it and no one could do business with government. It was prohibited and included even public sector officials.

The Chairperson said there were clear attempts to prohibit municipal officials from doing business with municipalities and the gaps were being closed. 

Mr Mapule asked if there was a reluctance to do so by any municipalities.

Ms Majiet said the Department was in contact with the Chief Procurement Office regarding gaps.

The notice on the regulations should be out by the first of July. The Department was finalising the last consultations and determining what would be kept back for notice three and notice four.

There had been a number of interactions with SALGA and synergy did not always mean consensus.

The Department was busy cleaning up the database. Teams were working with the provinces to check whether the information was correct.

Regarding the capacity of MISA, she said MISA did not make tender awards, the municipalities did that.

Mr Motlashuping said the deletion of Section 57 was because management was accountable to the municipal manager. The Department needed to have a relook at that section and amend the regulations.

Ms Tredoux said that SALGA and the Department were in agreement often after intensive consultation.

She said municipalities had to appoint on a full time basis unless there were exceptions when it could be done on a fixed term basis.

The meeting was adjourned