Western Cape Municipality performance in 2013/14 & 2014/15

Meeting report

Western Cape: Performance of Municipalities 2013/14
Mr Kosie Haarhoff, Acting Chief Director: Department of Local Government, outlined the methodology and structure of the report. He then went on to say that for the Municipal Mangers and Section 56 posts 149 out of 156 posts were filled in the province. Meaning there was a vacancy rate of 6%. Out of those149 posts 26 were filled by females. He mentioned that they would like to see an increase in this.

Mr Haarhoff said that for skills development all municipalities had submitted workplace skills plans. He then outlined how Performance Management Systems (PMS) frameworks were adopted by all councils, but said it was concerning that PMS had only moved down to the different levels in 17 municipalities. He said raised the concern of how performance will be measured if PMS’s are not in place in all municipalities.

Mr Haarhoff explained that new Thusong Centres were established in Mossel Bay, Cape Agulhas, Kannaland and Theewaterskloof. Thusong mobiles reached 31 440 people, while Thusong Centres reached 1.2 million people.

He noted that public participation was a major problem. With 354 out of 387 ward committees being functional, while one ward committee in Stellenbosch was not established. He explained how the Community Work Programme (CWP) was implemented in 13 municipalities, and created 7748 work opportunities, with partnerships being established with municipalities for the implementation of the programme. 26 municipalities had anti-corruption and fraud prevention plans adopted, with Bitou, Oudtshoorn, Prince Albert and Beaufort West having draft plans. Additionally 13 municipalities had ethics and anti-corruption committees established.

Mr Haarhoff explained that all but two municipalities had internal audit units, with only the Central Karoo and Prince Albert outsourcing that function. In terms of compliance monitoring which was something many municipalities complained about, 29 municipalities adopted their final Integrated Development Plan (IDP), with Oudtshoorn not complying. All municipalities with the exception Oudtshoorn submitted their draft annual budgets on time. 29 municipalities submitted their Service Delivery and Budget Implementation Plan (SDBIP), with Oudtshoorn not complying. All municipalities submitted their Mid-Year assessment reports for  2013/14 to the Provincial Treasury. All municipalities submitted the Annual Financial Statements (AFS) for 2013/14 to the Auditor-General. 27 of 30 municipalities tabled their draft annual reports on time, with Oudtshoorn, Beaufort West and Kannaland being the three that did not. 28 municipalities that tabled Annual Reports adopted the oversight report, with 25 approving their annual reports without reservation, Saldanha Bay, Stellenbosch and Eden District municipalities approving their reports with reservation, and Kannaland and Oudtshoorn not providing the necessary information.

On service, 98% of households were serviced with water, 98% of households were serviced with electricity, 98% if households were serviced with sanitation, and 98% of households were serviced with refuse removal on site. He noted that in areas like the Karoo there were issues with access to basic services especially on farms. He outlined how all municipalities are providing free basic services to indigent households.

He unpacked the Municipal Infrastructure Grant (MIG) with expenditure reaching 97.8% at the end of June 2014, this was a slight decline compared to the previous year where 100% was reached. He said that 12 681 houses were built and delivered during 2013/14, which was a slight decrease on the previous year. He mentioned the only concern people had at municipal meetings was housing. For Local Economic Development (LED) Strategies, all municipalities except Overberg reviewed and adopted LED strategies.

The Western Cape budgets totalled R39.8 billion, with total expenditure at R37.9 billion. Capital expenditure was R6.39 billion or 81.1% of the adjusted budget. Debt management was a problem: total debtors being R8.4 billion of which water service debtors were the highest at R2.45 billion.

He said that audit outcomes had seen an improvement in 2013/14with 17 municipalities receiving clean audits and 13 receiving unqualified audits with findings.

Mr Haarhoff outlined the initiatives of the province in supporting municipalities. These included Municipal Governance Review and Outlook (MGRO), the Predetermined Objectives (PDO), Supply Chain Management (SCM) intervention, municipal governance assistance and municipal performance monitoring workshops.

In summary, improvement in governance had been key as this is coupled with improvement in service delivery. He noted that municipalities in the Western Cape still experienced problems with planning and budgeting, along with financial sustainability challenges. Additionally there were problems with performance management, maintenance of infrastructure and public participation.

Western Cape: Performance of Municipalities 2014/15
Mr Haarhoff unpacked the Municipal Manager and Section 56 (senior manager) posts with 151 posts filled, with a 7.2% vacancy rate and 21 females appointed compared to 26 the previous year. Skills development was similar to the previous year. There was an improvement in ward committee functionality from 354 to 386 in 2014/15.  CWP work opportunities saw a decrease from the previous year of 7 748 to 6 890 work opportunities. Anti-corruption plans and internal audit and audit committee functioning was similar to the previous year.

He unpacked compliance monitoring for 2014/15, with all 30 municipalities adopting their final IDPs, with a team being deployed to Oudtshoorn to assist them with the IDP. All municipalities submitted their draft budget, SDBIPs, Mid-Year assessment reports, annual financial statements, and all tabled the Annual Reports. He said that 28 municipalities that tabled their Annual Reports adopted their oversight reports, 24 municipalities approved their Annual Reports without reservation, Saldahna Bay, Knysna and Eden District approved their Annual Reports with reservations, and Witzenberg, Oudtshoorn, Bitou and Central Karoo did not provide information.

Mr Haarhoff noted that there had been a decrease in provision of service delivery compared to the previous year. He said that this was a result of people coming from all over the country to look for work opportunities and education. All municipalities provided free basic services to their indigent households.

Expenditure of MIG reached 97.4% at the end of the municipal financial year in June 2015.

The operating revenue budget was R41.1 billion and the operating expenditure amounted to R38.2 billion. Capital expenditure was R6.81 billion.

He said that the Western Cape had seen an increase in the number of clean audits, though he noted that a clean audit does not necessarily equate to service delivery. In terms of support, there was MGRO and other initiatives.

He concluded by emphasising that assistance must increase to municipalities as they are under severe pressure when it comes to service delivery. Electricity provision was also a major challenge with municipalities not paying Eskom, as was drought and the resulting water shortages. Consultation with communities was also a challenge as was stakeholder governance.  

Discussion
Mr M Chetty (DA) asked why in 2013/14 26 female’s filled vacancies declined to 21 in 2014/15, despite Mr Haarhoff highlighting the lack of female employees was a cause for concern. He had a concern with the general quality of the report, as it seemed as if there was copying and pasting from the 2013/14 report to the 2014/15 report, as evidenced by the obvious repetition in terms of the CWP. He questioned why there was no progress if the 2013/14 report indicated that four municipalities had anti-corruption and fraud prevention draft plans, yet in 2014/15 only those four still had draft plans. Action was needed there       . He also sought clarity as why there was no progress in either the Central Karoo or Prince Albert insourcing their audit function, pointing to a lack of activity as this problem was noted in both the 2013/14 and 2014/15 reports. He also emphasised that for compliance monitoring it is unacceptable for municipalities to not give the necessary information.

Ms B Engelbrecht (DA) asked if the PMS was an integrated management system, was used across all municipalities, what the system was called, what was done about municipalities that were not complying to the PMS, and how are municipalities motivated to comply.

She asked if ward committee members were paid, and if so what are they paid. She asked for information on the number and percentage of indigent households. She asked how illegal connections were controlled, as this impacted on performance and the budget. Was there a connection between illegal connections and fruitless and wasteful expenditure?

She asked why the EPWP work opportunities decreased from 2013/15 to 2014/15. She wanted to know the age analysis for the outstanding debt.

Mr D Ximbi (ANC) questioned as to how one compares a clean audit against service delivery, and how one can have a clean audit yet service delivery was lacking, as evidenced by how people are living.

Ms T Wana (ANC) asked about the asset register. Further information was sought on the number of indigent households and the number of shacks in the Western Cape as well as the assets of the municipalities.

Mr S Thobejane (ANC) mentioned that it was the duty of the provincial government to help build the capacity of struggling municipalities like Oudtshoorn, so that their performance is equal to other municipalities.

He said that if there was a migration of people to the Western Cape from other provinces, there needs to be planning and preparation to handle this. He commended the audit outcomes for 2014/15, but mentioned that it also needs to speak to people in communities in terms of service delivery.

The Chairperson highlighted that the purpose of these reports being presented to the Committee is to ensure accountability from the province and municipalities on performance, as well as to take stock on the state of the municipalities and their progress.

The Chairperson asked how the report was linked to Back to Basics as it was not mentioned. He asked why the report did not make mention of the state of Section 139 in the province. He said that improvements needed to be seen from one year to the next. The report did not speak on informal settlements, and asked what was being done as well as the challenges faced in addressing the housing backlog, as well as access to toilets and sanitation as it was a major concern in the Western Cape. He raised the problem of ward committees and the decline in voter participation in the 2016 Local Government Elections. This is a problem that needs to be and can be addressed at municipal level. He emphasised that ward committees need greater operational efficiency and participation. He asked about the Integrated Development Plan (IDP), and the integration of townships and suburbs.

The Chairperson asked about the state of protests in the Western Cape, and if there was success in dealing with the protests, if so, how was this success achieved. So if there was success, it could be used to assist other provinces. He asked if the Western Cape was succeeding in bridging the gap between the haves and have-nots.

Mr Haarhoff replied that the Western Cape is not a perfect province, and that people in communities are not interested in clean audits, they are interested in the quality of their life. He emphasised that there was a growing gap between the poor and the rich, and that this needs to be addressed. ‘People cannot eat and drink clean audits".

Mr Kamal Makan, Director: Municipal Governance, Department of Local Government, reported that when looking at the decline in female appointees one had to take into account the regulations of employment and conditions of employment that have a stringent list of requirements, as well as the Municipal Minimum Competency (MMC) programme, which has made the options smaller in terms of the number of competent people available for a vacancy. People may have various degrees but they have not completed the MMC courses. He suggested that pragmatic approaches be adopted at a national level to address the challenges presented by the MMC, such as exemptions, and communication with universities on MMC requirements.
Updated details regarding anti-corruption would be sent to the Committee.

Mr Haarhoff explained that Central Karoo and Prince Albert are sharing an internal audit process. Kannaland and Oudtshoorn are giving the department serious problems, and Minister Van Rooyen is going to be approached about Kannaland and its problems.

The Chairperson asked that all communication between the Department and Minister Van Rooyen be shared with it.

Mr Haarhoff responded that the PMS system used in the Western Cape was called the Ignite system, and out of the 30 municipalities 28 were using the Ignite system. The two exceptions were City of Cape Town  and Swartland who had their own systems. To ensure that PMS was implemented, municipalities were given a PMS grant, which was monitored on a quarterly basis. 

He was unsure whether ward committee members were paid, and would get back to the Committee on this question. As well as on the budget spent on indigents and all information relating to illegal connections. He mentioned that all financial issues will be provided to the committee at a later stage.

Mr Haarhoff noted that planning was a problem in municipalities, especially in relation to increases in population. He responded that ten municipalities were part of Back to Basics.  Information in writing will be provided on informal settlements and backlogs at a later stage. He requested that a date be given for when all additional written information must be provided to the committee.

Mr Chetty responded that there was a reason the MMC was established, and that National Treasury gave municipalities a 24 month period to train all staff who did not have an MMC. It was a serious problem that people still did not have the necessary MMC qualifications, years after it was instituted. He called out the department for using MMC as an excuse as to why there was a drop in female employees. If there were 26 employed last year at least they could have maintained 26 instead of dropping to 21, so it had nothing to do with the MMC.

Mr Ximbi commented that it was the first time he had heard an official acknowledging that there were challenges and mistakes.

Ms G Manolope (ANC) noted that South Africa is a unitary state and all policies adopted must be implemented in all spheres of government, hence she was concerned that the report did not mention Back to Basics. She mentioned that there needs to be greater parallels between what was presented on paper, and service delivery on the ground.

The Chairperson said there needs to be an emphasis on the gap between the haves and have-nots. He responded that 10 November 2016 was the due date for submitting all additional written information. He asked that greater emphasis be placed on addressing the challenges of women, youth and the disabled in future, as well as the items requested as written information.

Mr J Mthethwa (ANC) thanked the officials from the Western Cape Department for their honesty and thanked the Chairperson and the committee members for the work done.

The Chairperson adjourned the meeting.