Department of Local Government 2018/19 Annual Report

Local Government (WCPP)

17 October 2019
Chairperson: Mr D America (DA)
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Meeting Summary

2018/19 Annual Reports

The Minister of Local Government acknowledged the officials of the Department of Local Government for overseeing 12 of the top 20 performing municipalities in the country. Budget cuts had had a negative impact on service delivery, as some projects needed to be terminated, but the Department introduced innovative solutions to address challenges. The low rainfall patterns and drought relief projects in certain areas of the province required emergency funding and the Joint Regional Approach had prevented a collapse in water supply in the Greater Karoo.

The Basket of Services initiative, which identified the needs of every household, was introduced to fight the war against poverty. Thusong Centres, situated within communities, provided services with assistance from key anchor departments namely, Home Affairs, South African Social Security Agency (SASSA), Social Development and Labour. Support services were provided in terms of Outreach programs in municipalities that did not have a Thusong Centre. The Back to Basics program resulted in four of the ten municipalities being able to function independently after participating in the program.

Training programs were introduced, in cooperation with the Hanns Seidell Foundation (HSF), to strengthen the capacity of councillors. The Winter School program focussed on ethical leadership, while the Summer School, of the previous year, focussed on issues of governance. Concerns about public participation processes were brought to the attention of the Committee as meetings in ward councils were scheduled to take place during the afternoon which made meaningful participation by councillors difficult. The invalidity of the Municipal Systems Amendment Act affected the appointment of provincial management and senior managers. Employment equity targets, as per the five year employment equity plan for the period 2016 to 2021, were monitored on a monthly basis.

Meeting report

The Chairperson said that the Minister of Local Government, Mr Anton Bredell (DA), had to attend an urgent meeting with the Public Protector. The Minister was given an opportunity to address the meeting. He would respond to questions upon his return.

The Minister said he was proud of the team for achieving their targets. Some issues, such as low rainfall patterns, were difficult to manage and systems were tested. Valuable lessons were learned about how to deal with dry areas in the Central Karoo and other parts of the province. The Department was busy exploring underground water systems for new minefields in the Beaufort-West, Laingsburg and Kannaland areas. 

Municipalities operated under difficult circumstances but were doing quite well under severe budget constraints. Budget cuts of between five and seven percent would impact on effective service delivery.

The Department was engaged in a joint initiative with Stellenbosch University to address issues of governance and ethics issues raised by the Public Protector. The Minister was then excused from the meeting.

The Head of the Department (HOD), Mr Graham Paulse, said that a number of officials from the Department were present in the meeting as a learning exercise and to acknowledge them for the work done. A protest was underway at the office due to the refugee crisis, but a law enforcement contingent was managing the situation. Some of the officials might be asked to return to the office to do oversight in the event of an escalation in the protest action.

The discussion focussed on issues linked to General Information in Part A, Performance Information in Part B and Human Resource Management in Part D of the 2018/19 Annual Report. The Committee was directed by the Chairperson to deal separately with the each part of the report.

Part A:  General Information
The HOD said that the Department was dealing with difficult local government challenges. A national forum of provincial HOD’s of Cooperative Governance and Traditional Affairs (COGTA) was established to assist each other with difficulties in local government.

Some of the extreme difficulties included the drought in the Eastern and Northern Cape. Planning between local and provincial spheres of government necessitated the need for an integrated planning approach. The goal was to ensure service delivery through co-planning, co-budgeting and co-implementation through a Single Support Plan.

A further difficulty was the invalidity of the Municipal Systems Amendment Act. The Constitutional Court ruled that the national department had 24 months to address issues but they failed to do so before 9 March 2019 when the ruling expired. The appointment of provincial management and senior managers was affected by the order of invalidity. The Department communicated the problems of local government to the national department and it was understood that legislation was tabled in Parliament.

The Back to Basics program comprised ten municipalities. The support and assistance by the Department led to four municipalities leaving the program because they were able to function independently after participating in the program. Training, with a focus on ethics and the value system of councillors, was introduced to improve on the manner in which councillors participated in council. To strengthen citizen interface and to manage interaction with the public, officials were trained on the principles of the Integrated Community Development Plan (ICDP). Outreach events for the period under review included programs taking government to farms.

Disaster Management and Fire Services dealt with fires across the province including in Knysna and Betty’s Bay. In cooperation with the Moravian Church in Wupperthal, temporary housing was handed over to affected members of the community 15 months ago.
Budget cuts
Mr M Smith (ANC) asked what lessons were learned and what was done to address factors responsible for slow growth.

The HOD responded that the Department was required to do budget cuts on a year-on-year basis. A budget cut of between five and seven percent meant that the Department had R14m less to spend on service delivery and that certain projects needed to be terminated. All provincial departments needed to cut budgets, which demanded innovative ways to ensure delivery on mandates. The Department operated at three-quarters of staff requirements, as the remaining positions were not funded by government. Through engagement with municipalities, the need to align planning priorities and to focus on similar priorities amongst stakeholders, were identified.

Strict criteria applied in the recruitment process for the appointment of senior management. In cases where municipalities did not comply with the criteria, the Minister was advised to have appointments set aside through court orders. Most municipalities voluntarily complied with prescribed regulations.

Training programs
Mr D Mitchell (DA) asked which municipalities participated in the Hanns Seidell Foundation (HSF) training program and how often this happened. What was done to ensure participation by the public and how often did the Office of the Speaker report on Monitoring and Evaluation.

The HOD responded that the Department had been in partnership with the HSF for three years.

The Chairperson requested that the HOD provide background to the HSF for members who were unfamiliar with the foundation.

The HOD explained that the HSF was an institute, based in Bavaria in Germany, which focussed on good governance in municipalities. It involved monitoring and coaching programs for middle management. A mentee was allocated to a mentor, who was selected from the ranks of municipal managers. Mentees had subsequently been promoted to municipal managers. The Winter School program, initiated during the year under review, involved participation by 234 councillors and focussed on ethical leadership. The Summer School of previous years focussed on issues of governance. Research was done on new government structures. The new government curriculum would enable councillors to acquire an academic qualification to become either a speaker, a deputy mayor or a mayor.

Public participation
Mr Mitchell again asked what the Department was doing to ensure that public participation took place and at what stage would intervention be made. Reports of blockage in various political offices, due to lack of funds, were received.

Mr Craig Mitchell, Director Public Participation, replied that the role of the Department was to monitor the quarterly reports received from municipalities. Through the reports, the needs of municipalities were analysed. Eight themes, highlighting the role of various role players, were identified. This was being used as a tool to empower communities.

Audit outcomes
Mr P Marran (ANC) welcomed the overview, targets achieved and audit outcomes of the Department. He asked whether the decline in the number of clean audits was due to the current crop of councillors. Officials indicated that it was up to them to use the assistance from the Department. He questioned whether compliance was enforced by the Department and said that the scheduling of public participation meetings at 14h00 was problematic as it did not allow for meaningful participation by communities. He asked what the reasons and the amount for the under spending in the Beaufort West municipality were.

The HOD replied that he had had concerns about the quality of councillors and their influence on the decisions of Council. The Department offered training to councillors, as it was difficult to convince councillors to make the right decisions. He and the Minister had to intervene when councillors took decisions outside of the parameters. A document was being compiled to assist with the selection of quality councillors and to deal with inappropriate council decisions.

The decline in audit outcomes was due to municipalities struggling to implement the municipal Standard Chart of Accounts (mSCOA). The Department engaged with the German software company, SAP, to standardise the process and to provide for other municipalities to tap into the system, but it came at a huge cost. To avoid further deterioration in audit outcomes, councillors were being monitored carefully.

Drought relief
Mr Marius Brand, Director: Municipal Infrastructure, explained that R43 000, for the detection of leakages in Beaufort West, was actually a saving and not under spending.

Mr Marran was glad to note that drought interventions were being considered by the Department, although it appeared from the report that the drought had been resolved. He said that if one looked at the last three financial years, there was a downward spiral in the performance of municipalities and there was a need to stop this because it would impact on the outcomes of the municipality and the services it provided.  He was glad to hear of the initiatives to improve the capacity and skills of officials and hoped that in the following year he would see improvement and that there was an upward trend, as it was a bad reflection of the Department, despite the clean audits.

Mr Mitchell asked for clarity about the R43 000 savings.

Mr Brand explained that R1.697m of the R1.75m budget was spent on drought relief. The balance represented a saving. The funds were spent on the big drive in Beaufort West to bring down water losses and to search for new water sources.

Part B: Performance Information
Mr van der Westhuizen asked for clarity on the difference between actual achievement and actual standard of service as represented in the table on Main Services and Standards. He queried why no description was available for “CDW” and asked for information on vandalism of infrastructure. He asked what the Department was doing to simplify the reporting process and ease the burden on municipalities. Some municipalities were struggling to compile the quarterly reports due to the time and effort it took. He questioned why transfer payments to municipalities took place during the last quarter of the financial year. Earlier transfers would make it easier to spend during the financial year. The late transfers resulted in cases of severe under spending. He queried how the training needs of councillors were assessed to determine the level of training and support that was required, taking into account that councillors came from a variety of backgrounds. He asked about the availability of the official who, at one stage, assisted councillors with legal enquiries. He asked whether the appointment of an Ombudsman was considered to assist residents who did not have the funding to confront municipalities in a court of law.

Legal advisor
The HOD replied that his team included two attorneys and that the official referred to, was an advisor to the previous Premier. The legal advisor position was advertised and the selection process was under way. 

Service Delivery Improvement Plan (SDIP)
Ms Nozuko Zamxaka, Chief Director: Integrated Service Delivery, explained that the Main Services and Standards outcomes were not categorised in previous years. This made it difficult to compare the prior year to the current year’s statistics. Detail for further clarification would follow. The Department replaced ‘citizens’ with ‘services’ as a standard for measuring service delivery.
The objectives and functions of the Community Development Workers (CDW) program were not clearly defined when it was first conceptualised. Indicators had changed with the Public Service regulation.

Assessment of training needs
Dr Sandra Greyling, Director Municipal Support and Capacity Building, said the Department worked with various universities and the HSF to assist with training needs for municipalities.

Transfer payments
Ms E Barnard, Chief Director Municipal Performance Monitoring and Support, said that on an annual basis, grant funding was allocated to strengthen governance, communities and infrastructure. The needs of departments and municipalities were assessed through mid-year reviews. Committee members across the three Chief Directorates met to analyse the reviews and consider which projects to support.

The budget adjustment process was done in conjunction with the Chief Financial Officer (CFO), who needed to wait for the adjustment budget before transfers could be done in January to February. Budgets had since been updated to June. It could be made available as municipalities have spent the money. Very strict transfer payment agreements and deliverables for projects accompanied the plan.

Mr van der Westhuizen questioned why there was a need to wait for the adjustment budget and why transfers were only made in the last quarter. He asked what the process to budget for fires and disasters was.

The HOD said that the budget was prepared in March, with the allocation taking place in April. This could not be labelled as fiscal dumping. The Department was trying to do the allocation earlier to allow for spending to take place earlier. Guidelines for budget allocation were available.

Mr Smith asked which municipalities were identified for participation in the Thusong Program and how many jobs were created through the Development Program. He asked what the reasons were for the 2.2% vacancy rate, whether any of the vacancies were critical positions and for an update on the organisational structure. He questioned whether the Department was satisfied with the level of service of municipalities, such as George and Knysna, where concerns of infighting and corruption were raised and what interventions had been made there. He asked for clarity on the constitutional invalidity in sub-program 2.2, how much money was budgeted for Fire Brigade Services and the reasons for the low expenditure by the Cederberg municipality.

Infighting in municipalities
The HOD remarked that the Department was constitutionally hindered from intervening where infighting occurred.

Thusong Centres
Mr Mornay Pretorius, Director: Service Delivery Integration, replied that Thusong Centres were situated within close proximity of communities. The centres catered for assistance services by Home Affairs, SASSA, Social Development and the Department of Labour. The impact of the centres were being re-assessed as poverty was still rising. There were six projects in operation; the abalone project that benefited communities in Hawston; the mosaic art project to beautify the Thusong Centre in Cape Agulhus; the small business support project in George; the training of 14 young people for the Tourism and Hospitality industry in Hessequa; the upholstery manufacturing project in Laingsburg; and the project to train unemployed people in Mossel Bay.  The Cederberg expenses were for minor tasks such as the replacement of doors. The centre focussed on occupational health issues. The transfer was based on a project plan. At the time of the report, R51 000 was spent. The remaining balance was reported to have been spent by the end of financial year in June 2019.

Disaster Management
Mr Colin Deiner, Chief Director: Disaster Management and Fire Brigade Services, said that the District Municipality was responsible for veld fires. The Department provided support based on an agreement. Assessments were made of high-risk areas at the beginning of the year. Depending on the season, arrangements for the availability of equipment were made. Meetings were held every two weeks during the fire season. The First Hour Response program, implemented eight years ago, relied on highly specialised people. The costs for services amounted to R35 000 per hour and could reach R70 000 per hour. The high altitude team went where normal trained fire fighters could not reach.  Additional funding was requested from Treasury for the fires in Knysna which occurred outside the fire season. An arbitration process was underway to resolve the disagreement with fire fighters regarding the payment of on-standby allowances.

Constitutional Invalidity
Mr Kamal Makan, Director: Municipal Governance, said that the constitutional invalidity referred to a deviation in the appointment of municipal managers. A handbook was being compiled, but a legal opinion was required before regulations could be proceeded with.

Critical vacant positions
The HOD said that there were no critical positions vacant.

Vehicles for Fire Services
Mr Smith requested that bakkies (vehicles) be made available to smaller municipalities to improve the response time. The late arrival of Fire Services was a problem for communities in smaller municipalities.

Mr Deiner replied that a new program was in place to supply vehicles. To date, 50 vehicles were purchased. The 50th vehicle was handed to the Stellenbosch municipality.

Mr M Xego (EFF) said that the capacity building in partnership with the HSF appeared to be a drop in the ocean as only 11 mentees participated in the program. He asked what the selection criteria was for participants. He enquired about the nature of the projects to secure water security in the Greater Karoo, whether it was implemented and if a progress report on implementation was available. He asked why six of the Thusong Centres were not fully functional and what impact it had on service delivery. He enquired what outstanding issues needed to be finalised to fill the vacancy of Director: District and Local Performance Monitoring. He queried the reasons for the low expenditure in the Oudtshoorn and Saldanha municipalities in light of the uprising in Saldanha.

Water security
Mr Brand responded that the projects in the Greater Karoo varied from preparing leaks to driving down demand for water. The drilling of two boreholes in Beaufort West assisted in reducing restricted hours. A borehole in Kannaland was re-equipped. The projects in Oudtshoorn and Saldanha had been completed since the report was released and the full amounts were spent. The Department was struggling to employ engineers, as very strict competency requirements applied. No suitable candidates were found after three attempted tenders were placed and permission was given to headhunt for a geologist. The responsibilities in the Directorate had meanwhile been re-prioritised so as not to impact on service delivery.

Building of capacity
Dr Greyling said that the mentee program focussed on middle management. Eight mentors were currently available and three mentees were promoted to senior positions following participation in the program.

Thusong satellite centres
Ms Zamxaka said that there were 28 Thusong Centres in the Western Cape, consisting of 22 fully fledged and six satellite centres. The 22 fully fledged centres housed key anchor departments namely, Home Affairs, SASSA, Social Development and Labour. Arrangements were made for the six satellite centres to be visited by representatives of the anchor departments on certain days. Support services were provided in terms of Outreach programs in the three municipalities that did not have a Thusong Centre.

The HOD said that the recruitment process was concluded and the Director: District and Local Performance Monitoring started on 1 August 2019.

Mr Xego asked whether the scouting for engineers included areas outside of the Western Cape and whether the three municipalities without Thusong Centres would be provided with a centre or if services from the Outreach programs would continue.

Mr Marius Brand, replied that advertisements for engineers were placed throughout the country but the Department could not find any candidate willing to move to Beaufort West on a one-year contract.

The HOD responded that a job evaluation was required to change the position to a three-year contract to make it a more attractive offer.

Outreach programs
Mr Pretorius replied that the Department lacked the funds to establish the three additional centres. There were plans, led by the municipalities, to develop centres for themselves.

Mr Marran raised a concern about the public participation meetings in Witzenberg that were scheduled at 15h00 for all of the 12 wards.  He asked what the outcomes were of the investigations conducted at municipalities and whether remedial actions were taken. He asked for an explanation of the under spending in sub-programs. He queried why only nine municipalities were listed as recipients of transfer payments and why Swellendam made a request for roll-over of funds at the same time it received the funds.

Transfer payments
Ms Zamxaka replied that the Department had funds for only the nine listed municipalities. Swellendam was not gazetted for funding during the period under review. Funds from municipalities that did not incur expenses were redirected to Swellendam to address a specific need.

Mr Gary Birch, Director: Specialised Support, replied that the four investigations that were reported, were based on quarterly reports. The Department conducted assessments and liaised with municipalities in terms of the grounds on which they were allowed to operate. Disciplinary actions were taken for disciplinary contraventions and criminal acts were referred to the Hawks.

The Chairperson indicated that the Minister had returned and was available to respond to questions.

Mr Smith asked whether National Government assisted in preventing the total collapse in water supply in Beaufort West and what the research, by Good Governance Africa, involved. He said that the George municipality had deteriorated under the watch of the Department and asked what the differences and similarities were between the reports of the Auditor-General and Good Governance Africa. He asked if measures were in place to address protest actions in Velddrif and Paarl and whether the Minister felt that the protests were politically motivated.

Drought interventions
The Minister remarked that there were three spheres of government. Lots of debates on quicker intervention were taking place. Supporting and monitoring without legal backing was time consuming. Debates were held about the collapse of the water system. Bulk water supply was a National Government function. The water problem was not only due to drought but it was also a management problem. Municipalities did not spend on maintenance for years. The Department managed to get help from other municipalities.

Clean audits
The Africa Ratings report was a tool that the Minister wanted municipalities to use. He was proud of the outcomes of the Auditor-General’s report and said that clean and unqualified audits were closely linked. Of the 30 municipalities, 26 received clean audits. There was a need to connect audits to service delivery. The decline in audit outcomes was partly due to mSCOA which caused a delay in reports being handed in on a timely basis. These were minor issues that needed to be sorted out.

Protest actions
The Department worked closely with Disaster Management in instances of protest actions and land invasions, where communities were sometimes hostile and did not want to engage with politicians. It was important to get ward committees to function optimally, as budget cuts impacted highly on service delivery.

Mr Xego asked how the Department could report an under spending during crisis situations.

Drought budget
The drought allocation by National Government was received late. A budget of R75m over three years was required to drill new minefields. The Department had a budget of R25m for the first year and needed a commitment from National Government for the remaining amount.

Mr Marran remarked that an earlier discussion referred to 12 municipalities with clean audits which was different from the 26 municipalities mentioned by the Minister. He said that the Committee should not be satisfied with less clean audits. The uprising in Drakenstein was due to challenges in local government. He asked whether the Minister had a plan to address the challenges. He questioned whether the Department had other sources of income to complement the shortfall of the budget cut. Detail of such funding, if any, should be made available.

Service delivery protests
The Minister responded that the Department had zero clean audits in 2009. The differences between clean and unqualified audits were minimal. The results were unparalleled when compared to other provinces. Service delivery protests had a criminal element, but it also had a political element as it spiked before elections. Citizens did not differentiate between the three spheres of government, but 70% of demands were not functions of municipalities.

He said the Department had fallen behind in the war against poverty. An initiative was introduced to determine the basket of services that every individual needed. Municipalities needed to be upfront with communities about what could be expected. The Prince Albert municipality had a contract with the community to specify what households could expect from the municipality.

Sources of income
Government provided 95% of the budget. Other income was collected from taxes and license fees. The HSF-run project was done within specified conditions.

Mr Marran expressed his unhappiness that the Minister was measuring the 12 clean audits in 2019 against the zero clean audits of 2009 instead of the 23 clean audits of last year.
The Minister replied that the target was to get unqualified audits for all 30 municipalities. The service delivery in the Western Cape was the best in the country, but the Department acknowledged that more was required.

Electricity Supply Commission (ESKOM)
Mr Marran asked whether the Minister was willing to engage with ESKOM and National Government regarding the unequal treatment of consumers. Depending on whether electricity was provided by the municipality or ESKOM, two residents in the same area would pay different rates.

The Minister said that he had a good relationship with ESKOM and that he met with them every quarter. The power grid was under huge strain. Electricity plants older than 50 years needed to be decommissioned. The City of Cape Town was advocating for the generation of 10 megawatts of electricity through a court case.

Part D: Human Resource Management
Mr van der Westhuizen commended the Department for the low vacancy and turnover rates. He asked whether consultants assisted with the transfer of skills so that public servants became independent. He questioned whether the Department received value for money from forensic investigations and asked how many resulted in disciplinary or court actions. He asked what the future plans were for the use of consulting services in the hydro-geological project and whether it was a long-term project.

Consulting services
Mr Brand replied that consulting services would be used over the next five years to provide geo-hydrological services. The work could not proceed before the consultants completed the research for sources of additional water supply. Municipalities did not have the capacity to monitor households on a monthly basis. It would be wise to employ a geologist.

Forensic investigations
Mr Makan said that forensic investigations resulted in the removal of the director of a municipality, in one instance, and criminal investigations were underway by the Hawks and the National Prosecuting Authority (NPA).

Employment equity
Mr Xego questioned the under representation of women of colour in top management positions and the low level of representation of women of colour and people with disabilities at senior management level.

The HOD replied that the Department had a five year employment equity plan, for the period 2016 to 2021. Current statistics reflected 62% female and 37% male representation. Vacancies were referred to the Equity Manager to include persons from the designated groups. Employment equity was a standing agenda item in monthly meetings and the panel provided reasons if people from designated groups were not appointed. The Department was working towards a 50% equity target for both male and female persons of colour.

Mr Smith reasoned that the discussion was based on 2019 and not 2021 results and that the HOD must ensure that the situation would not be the same for next year.

Mr Mitchell argued that the portrayal of the employment equity status by members was factually incorrect as most people, reflected in table 3.5.1 on p95, were of colour.

Mr Xego said that the issue of women of colour should not be compared to all people of colour.

Mr Smith responded that the facts proved otherwise even when referring only to women of colour.

Mr Marran asked whether the two employees, who were suspended without pay, would be reappointed if they were found not guilty at a later stage. He requested a breakdown, based on age, for employees who were identified for training and asked what the reasons would be for not signing performance agreements.

The HOD explained that information in the report was standardised and that a breakdown based on age was not a requirement but could be made available.
He explained that the salaries of two employees were suspended and not the employees. Suspension of one month in one case and two weeks in another case applied.

He said that performance agreements were subsequently completed and that employment equity targets could only change when positions became available.

Public participation
The Chairperson declared the meeting open for public participation.
No community member was present in the meeting.

The meeting was adjourned.


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