Walter Sisulu Municipality & Maluti A Phofung Municipality: Section 139 interventions

NCOP Cooperative Governance & Traditional Affairs, Water and Sanitation and Human Settlements

26 June 2018
Chairperson: Mr M Mthethwa (ANC, KwaZulu-Natal)
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Meeting Summary

The Select Committee considered the reports arising from oversight visits to Walter SIsulu Local Municipality and Maluti-A Phofung Local Municipality, and adopted certain amendments.

The amendments proposed for the Walter Sisulu Local Municipality report were:

  • Extra pressure was needed to hold the Municipality accountable, and therefore time frames should be implemented for it to submit its reports.
  • An additional recommendation stated that if the reports were not forthcoming, they could evaluate, as part of the intervention, in terms of section 139 (c) and (d).
  • Consequences should be enforced for the deduction of workers’ salaries for pensions, but not depositing the money in their pension funds.
  • The issues and questions raised by the Members should be included as part of the observations of the Select Committee in the report.

The report was adopted with the amendments.

The amendments for the Maluti-A Phofung Local Municipality report were:

  • The money owed by the Municipality to Eskom must be included in the report, as well as the consequences for having disclaimers.
  • It should be included in the report that the Municipality was yet to provide information with regard to the salary issue.
  • Rule 91 should be invoked due to the wasteful expenditure in the budget yet to be approved; and that there should be constant monitoring, particularly from National Treasury, of the budget to be passed.

The report was adopted with the amendments.

Meeting report

Walter Sisulu Local Municipality: Consideration and adoption of oversight report

Mr Nkosana Mfuku, Content Advisor, focused on the observations and opinion of the Committee during the oversight visit to Walter Sisulu Local Municipality, as well as the recommendations it had made, based on the municipality’s financial management.

The findings and recommendations made by the Committee included:

  • The NCOP approves the intervention in Walter Sisulu Municipality in terms of s139(1)(b) of the Constitution.
  • The Eastern Cape Provincial Executive should intervene by imposing a recovery plan aimed at assisting the Municipality to provide basic services and to meet its obligations its financial commitments.
  • The leadership in the Municipality should exercise adequate oversight over performance reporting and compliance with laws and regulations, as well as internal controls.
  • The Administrator should fast-track the process of appointing and filling of section 57 managers, and further assist the Municipality to ensure that the service delivery and budget implementation plan (SDBIP) and the Integrated Development Plan (IDP) were aligned with the Municipal budget, and had the support and confidence of the whole community.
  • The South African Local Government Association (SALGA), in cooperation with the Local Government Sector Education and Training Authority (SETA), should facilitate training and capacity building for Municipal Councillors at Walter Sisulu; to further deepen their understanding of their oversight role, and the legal framework and policies that govern the activities of the Municipality.
  • The Eastern Cape Member of the Executive Council (MEC) for Cooperative Governance and Traditional Affairs (COGTA) should table a quarterly progress report to the National Council of Provinces (NCOP) on the performance and implementation of the “Back to Basics” pillars in the Municipality, including the filling of the senior management vacant positions.

Discussion

Ms B Engelbrecht (DA, Gauteng) said that the Committee had requested the Administrator and the Mayor to respond by last night to the questions posed to them the previous morning, and wanted to know whether they had responded.

Mr Mfuku said that he had contacted the Mayor and the Administrator and they were still finalising their responses, but at the time of the conclusion of this report, they had not yet submitted their answers. They had promised to submit the report.

Ms Engelbrecht said it had been very clear yesterday that when the Administrator came to present to COGTA, there was arrogance in that municipality. They had been laughing and interrupting the Members and talking among each other. It had begun with the Mayor bragging about her overseas trip, which was absolutely disgusting when she was sitting in a municipality that did not have any money.

The Administrator had then come and given a “hogwash” feedback. She read the feedback from COGTA about how the Municipality was not supporting COGTA and was dragging its feet. She was very concerned, because it appeared that there was no accountability or sense of urgency from the leadership or from the Administrator of that municipality.

She suggested that as part of their recommendations, the Committee should request the reports within a certain period of time, and include an additional recommendation stating that if that was not forthcoming, they could evaluate, as part of the intervention, in terms of section 139 (c) and (d). The quarterly reports they had requested were insufficient.

Mr Mfuku said that intervention was not an end in itself. This Committee, together with the NCOP, would regularly review the intervention. He proposed that that they incorporate a recommendation that they would do a follow up to check if there was progress in the municipality.

Ms Engelbrecht agreed, but said that they could add extra pressure on the Administrator to say they wanted feedback in a certain period of time, because 24 hours had passed and they had not received a report, or even an apology.

Mr Moses Manele, Committee secretary, said that the Administrator was mandated to develop a municipal turnaround strategy. The Chairperson had texted him, stating that in both reports they should incorporate Rule 91.

Dr H Mateme (ANC, Limpopo) requested that there be time frames put to the proposal.

The Chairperson said that that was what they were doing now.

Mr S Mthimunye (ANC, Mpumalanga) said that workers’ pensions had been deducted from their salaries but not deposited in their pension fund, and that that was fraud. They should be consequences enforced and legal action should be taken.

Mr Ximbi concurred with his colleagues and proposed the adoption of the report with all the amendments.

Dr Mateme seconded the report’s adoption.

Mr M Chetty (DA, KwaZulu Natal) raised a point of order that a Member who was not present at the meeting may not second the adoption of the report. That would be unethical.

Ms Engelbrecht seconded.

The Chairperson said that the report had been adopted with those amendments.

Maluti-A Phofung Local Municipality: Consideration and adoption of oversight report

Ms Tembakazi Mpapela, Content Advisor, outlined the Committee’s observations on page 6 (refer to document).

The recommendations of the Committee included:

  • That the NCOP approve the notice of intervention in terms of s139 (1)(b) of the Constitution in Maluti-A Phofung Municipality.
  • That the MEC of COGTA should table a progress report to the NCOP regarding investigations in terms of s106 of Municipal Systems Act conducted in the Municipality.
  • That the MEC of COGTA should provide quarterly and exit reports to the NCOP on the progress made in report of the intervention in terms of s139(1)(b) of the Constitution and s106 of Municipal Systems Act.
  • That the Select Committee on COGTA conduct proactive oversight, in collaboration with the Portfolio Committee on COGTA in Free State Provincial Legislature, in order to assess the progress made in respect of interventions in terms of s139(1)(b) of the Constitution and s106 of the Municipal Systems Act.
  • The appointed Administrator must expedite the process of filling the vacancies for senior managers in order to ensure proper exiting and handing over when the intervention expired or was terminated.
  • Forensic investigations must be conducted and affected officials subjected to consequence management.
  • The Municipal Council must implement wellness programmes for employees; to boost staff morale.

Discussion

Ms T Wana (ANC, Eastern Cape) said that the report highlighted all they have been discussing in respect of this Municipality.

Regarding the electricity issue, the business sector there had gone to court, which had held that they must to pay their electricity charges straight to Eskom. That was a problem, because if that was the case, the government must not allow the institution to be bisected. The Department needed to resolve that issue.

Mr M Chetty (DA, KwaZulu-Natal) said that the report was silent on how Maluti-A Phofung Municipality was among the top ten “billionaires” that owed Eskom money, which had been raised by the Chairperson as well as the MEC. When he and the Chairperson had gone for their visit, the amount owed was sitting at R2.4 billion, when the Municipality came before the Standing Committee on Public Accounts (SCOPA) the debt had been sitting at R2.6 billion, and when they went there the previous day, it stood at R2.9 billion. The interest alone was R700 000. They had to take note of this.

When the Chairperson had raised concern that, according to the agency report, the Free State was the worst performing province because of the disclaimers, the MEC had been clear about the consequences for this. There would be a clause stating that there would be no disclaimers or else there would be action. If the current employee contracts did not have that included, it would be inserted.

With regards to the issue around the salary, the Chairperson had been very clear that it should not have exceeded the 20-40% range. The Municipality had been given R40 million, and it had been reduced because the 84 workers who were employed in the expanded public works programme (EPWP) had moved. They had been told that this represented 25%, and that that was not possible when the Municipality was sitting with a R100 million budget. The Municipality had been supposed to provide them with information on that.

He suggested that they invoke Rule 91, because National Treasury (NT) had made it very clear that the current leadership had been warned about the wasteful expenditure in the current budget that they were going to approve in the coming week, but they still going ahead in spite of the warnings. There must be a recommendation for constant monitoring, especially from NT on the passing of the budget.

Ms Engelbrecht commented that in terms of the Select Committee’s observations, it was very valuable to put this into the minutes, although they had not done so with the Walter Sisulu Municipality report. She suggested they should add it in the Walter Sisulu report because it highlighted the issues and questions raised.

Mr Chetty raised a point of order, stating that they should first approve this report and then go back to the previous one.

Ms Engelbrecht agreed, and said she noted the value of the minutes in the observations.

The Chairperson said that they would deal with the current report first and then go back to open the other one.

Mr Manele said that before Members moved the report for adoption, the Chairperson was proposing (through an SMS) that the Committee was not happy with the South African Local Government Association’s (SALGA’s) responses regarding its monitoring function. He suggested that the Committee should build in a recommendation that SALGA must conduct a training workshop for Councillors and ward committee members. The Committee must make sure that within three months, SALGA provides a progress report with regard to the training workshop. He put this up for the Committee to adopt.

Ms Wana proposed adoption of the report with the amendments.

Mr Chetty seconded the proposal.

The Chairperson said that the report was adopted, and asked that they go back to the suggestion by Ms Engelbrecht regarding of the first report.

Ms Engelbrecht said that she suggested that what was valuable in the second report was that the Select Committee’s observations were basically the questions that had been raised by the Members, which was part of the minutes and was a great reference for them to go back and see what issues had been raised. She suggested that they add the same thing to the Walter Sisulu report.

The Chairperson said that that was noted.

Ms Engelbrecht said that they were all very concerned when they went to municipalities and saw blatant abuse of funding, blatant maladministration and the blatant lack of accountability from people like the Mayor, the chief executive officer (CEO) and the Municipal Manager; who were the people that signed the cheques. They, as COGTA, needed to come up with radical solutions and with proposals to hold them accountable.

The Chairperson said that it must be noted that local government, provincial government and the national government were different spheres of government; and they couldnot dictate terms directly from national to local government.

The meeting was adjourned.

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