The Committee heard a briefing from the Municipal Demarcation Board on its performance against predetermined objectives for the 2017/18 financial year, its strategic plan for 2017 - 2021, and its 2018/19 Annual Performance Plan and budget.
The Municipal Demarcation Board spoke to concerns raised during its previous briefing to the Committee on 5 October 2017. These concerns were that the Board did not perform Capacity Assessments in the last four financial years; that there was insufficient public participation and engagement with communities during the determination and re-determination processes; and on the progress on the capacity assessment project.
The entity spoke to changes to the planned 2017/18 targets and gave an update on the municipal boundary re-determination process saying that it was almost concluded. The re-determinations had to be finalised in July and boundaries handed over in August as agreed with the IEC.
Challenges remained funding, which was not enough for the organisational strategy and mandate; the lack of a regional footprint; weaknesses in the demarcation legislation which compromised planning and service delivery by municipalities; and the perpetual debate on local government architecture.
The entity hoped that the draft Bill on amendments to the Municipal Demarcation Act would be processed through Parliament in time for the ward delimitation process due to start in 2019.
Members were pleased that the capacity assessments were moving forward and would be made public. Members were concerned that the Municipal Demarcation Board had no funds for ward delimitation and the matter should be highlighted to the Department as ward delimitation was important.
Members felt that the targets could be made more concrete; and said the core function of the Board was delimitation, so how could there be no money for delimitation. Members asked if any work was currently being done on public participation with regard to local government elections, because some issues were still unresolved and there were still a number of complaints by communities.
Members asked what the Committee could do to assist the Board in getting finalisation on provincial boundaries so that the entity could do its work on municipalities; said that the public participation engagements were not enough and should be prioritised in certain provinces; and asked why the Board strategic objectives targets were unqualified audit opinion for the years 2018/19 and 2020/21 and a clean audit only in year 2021/22.
Members asked the Chairperson if he could, through his offices, communicate with the Department of Justice on the importance of finalising the provincial boundaries before July 2018 so that the matter could be expedited.
Members asked if the contract the Board had entered into could not be terminated so that the entity could get a clean audit.
Briefing by Municipal Demarcation Board (MDB)
Ms Jane Thupana, Chairperson, MDB, spoke to concerns raised during the previous briefing on 5 October 2017. On the Committee’s concern that the MDB did not perform Capacity Assessments in the last four financial years, she said that capacity assessments had not been done of certain municipalities.
On the issue of how the Board would achieve the objectives of regionalisation if National Treasury did not provide the budget the MDB was seeking, the MDB’s bid for additional financial resources was not approved by National Treasury, which postponed its consideration to the 2019/20 budget processes. The MDB had however continued with engagements with key stakeholders to educate and create awareness on demarcation processes despite the limited resources.
On the issue of insufficient public participation and engagement with communities during the determination and re-determination processes, the MDB did engage as far as the resources that had been allocated during the adjustment process allowed. It had held extensive meetings with key stakeholders and municipalities. Democratisation needed a long time-period of a year to encourage participation before starting with the legal processes.
Ms Thupana then gave an update to the capacity assessment project. The MDB received an additional R7 million during the budget adjustment process in October 2017, half of which was to be used to conduct municipal capacity assessments for all municipalities and the remaining half was meant for public participation and citizen engagement processes.
Mr Muthotho Sigidi, CEO, said there had been changes to the planned 2017/18 targets. The performance indicator, “Produce and evaluate report on performance of the Board and its sub-committees” was deleted, as the performance of the Board and its sub-committees would be evaluated biennially.
The performance indicator, “Training programme for Board members developed and implemented” was amended to “Produce a report on the training of Board members” and the annual target was amended to read “Report on Board member’s training submitted by end of quarter 4”.
The performance indicator, “Public Participation Strategy approved” was amended to “Framework on public participation in municipal boundary redetermination and ward delimitation approved”. And the corresponding annual target was amended to “Framework on public participation in municipal boundary redetermination and ward delimitation approved by end quarter 2”.
The MDB had managed to attain 91% of the annual targets, 9% were not achieved for 2017/18. Programme 1: Administration, the target for Corporate Services and Financial Management was getting unqualified audit opinions for 2018/19 and 2019/20 while the target for 2020/21 was getting a clean audit.
Programme 2 covered Municipal Demarcations,
Programme 3: Research and Knowledge Management, and
Programme 4: Public participation, Education and Awareness.
The budget allocation did not have any additional funding over the medium term and therefore an increase in organisational capacity for regionalisation and the establishment of a demarcation knowledge hub was not provided for. The MDB has engaged with COGTA and National Treasury to identify sources of funding. The MDB would not have sufficient funds for the forthcoming ward delimitation process.
Mr Sigidi gave an update on the municipal boundary redetermination process and said the municipal boundary redetermination process was almost concluded and the MDB had consulted with primary stakeholders such as MinMEC, PECs, NHTL, StatsSA, IEC and Chief Surveyor General; had held working sessions with affected municipalities on possible options to fix the misalignments; had consulted with affected communities to obtain their inputs, share and engage with them on alternative options to resolve the misalignments; and had published section 26 notices inviting members of the public to submit written representations and views.
The re-determinations had to be finalised in July and boundaries handed over in August as agreed with the IEC.
Challenges remained funding which was not enough for the organisational strategy and mandate; the lack of a regional footprint; weaknesses in the demarcation legislation which compromised planning and service delivery by municipalities; and the perpetual debate on local government architecture.
The MDB hoped that the draft Bill on amendments to the Municipal Demarcation Act would be processed through Parliament in time for the ward delimitation process due to start in 2019.
Mr K Mileham (DA) said he was pleased that the capacity assessments were moving forward and would be made public. He was concerned that the MDB had no funds for ward delimitation. He realised that these funds would only be available in the next financial year, but the matter should be highlighted to the Department, to make sure that the delimitation process was adequately funded. While he did not support regionalisation, the consultation process of ward delimitation was important.
Mr A Masondo (ANC) said his concern was that the MDB targets could be made more concrete. The MDB did not have to point out that the work on the assessment of municipalities would continue to be unfinished as this was an issue that would always be the case and continue to arise.
Regarding the MDB’s budget, he said the core function of the MDB was delimitation, so he could not understand the MDB saying that there was no money for delimitation. He wanted clarification on this point.
Mr E Mthethwa (ANC) asked if any work was currently being done on public participation with regard to local government elections because some issues were still unresolved and there were still a number of complaints by communities.
Mr Mileham asked what the Committee could do to assist the MDB in getting finalisation on provincial boundaries so that the MDB could do its work on municipalities.
Mr J Dube (ANC) said the public participation engagements were not enough. Vuwani, as an example, showed that people needed to understand the processes. He suggested that the MDB prioritise public participation in certain provinces. It was not enough that the MDB publish Section 26 legal notices. He was aware of the financial constraints the MDB was operating under. He asked why the MDB strategic objectives targets were unqualified audit opinion for the years 2018/19 and 2020/21 and a clean audit only in year 2021/22.
Ms Thupana replied that the capacity report would be accessible to the public
On Mr Masondo’s issue of ‘no funds’ for ward delimitation, she said a better term to have used would have been ‘insufficient funds’. The delimitation work could be done by the book in one month but it was better if it took place over a longer period of time. Ward delimitation carried an element of “democratic legitimacy” which would ultimately affect how legitimate the municipal elections were, so there had to be sufficient public participation.
The MDB had engaged in public participation even before the legal processes had started. More extensive public participation would appear to be more expensive, but it was actually more cost efficient and so the funds for this had to be increased. The MDB only enacted the ward delimitation formula.
Ms Thupana said she took note of Mr Masondo’s comments on making the targets more concrete.
Capacity assessments could not be done every year, only every two years as assessment fatigue could creep in because things would not have changed since the previous year.
On the budget, the MDB could only raise their concerns on things that they were constitutionally mandated to do. She recognised the challenges facing the fiscus and had tried to show them the benefits of doing capacity assessments and developing democratic legitimacy which yielded more trust in the process and savings because the alternatives were public protests which might destroy public property and entering into litigation with its attendant costs.
She asked for clarification from Mr Mthethwa on what report he was referring to.
On provincial boundaries, she said the MDB had no rights over provincial boundaries but that any changes to provincial boundaries would affect municipal boundaries. If there were to be any constitutional changes, the Committee needed to be aware that the MDB had to hand in its work in July for the elections to take place in 2019.
The MDB was working with stakeholders on public participation.
Mr Ashraf Adam, Deputy Chairperson, added that the MDB had not lost a court case regarding public participation, but that that this fact was not enough and there had to be more engagement, even to the extent that the public had input as to where, when and how meetings would be held. The MDB had a dedicated public participation team and that the legislation needed review.
He said the MDB had little control over the boundaries while the formula was so difficult to work with, as was currently the case. This was also on the agenda for legislative review. Part of this issue was that the IEC probably needed to clean its own database.
The consultation process had started over provincial boundaries. Both provinces had to agree, and each legislature had to agree and the MDB had no role in this process.
Ms Tintswalo Baadjie, CFO, explained that a clean audit would only be possible in 2021 because in 2016/17 the MDB had entered into a contract that had been deemed to be an irregular expense. So, until the contract term ended, the MDB would not be able to attain a clean audit.
Mr Mileham asked the Chairperson if he could, through his offices, communicate with the Department of Justice on the importance of finalising the provincial boundaries before July 2018 so that the matter could be expedited.
Mr Mthethwa clarified that a number of municipal boundary cases were unresolved, and he had wanted to know if the MDB could learn from a report on this matter. He asked if the contract the MDB had entered into could not be terminated so that the MDB could get a clean audit.
Ms Thupana said the irregular expenditure related to a contract appointment for internal audit. Terminating the contract would result in additional costs.
On the issue of unresolved municipal boundary cases, she said that there were still people who were unhappy, but the cases were not unresolved, because the cases had gone through all the processes including the high court. In Vuyani, for example, there were still people who were unhappy even though the case had gone to the high court. She said the report into the Vuyani case could be useful and the MDB could draw lessons from it.
On the three-year internal audit contract, Mr Sigidi said the contract had been condoned. The MDB had engaged with the Office of the Auditor General (AG) on why the MDB would be penalised every year. The MDB was still awaiting a reply from the AG.
Mr Mileham requested that a joint meeting be set up with National Treasury to discuss the municipal councillor’s pension fund. It was of major concern to all councillors.
The Chairperson said it was on the agenda for the meeting on 5 May.
The meeting was adjourned.
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