Department of Local Government 2018/19 Annual Report: deliberations

Meeting report

The presentation of the audit report had been done earlier in a closed meeting. 

Discussion

MEC Anton Bredell, Western Cape Department of Local Government, stated that the Department is pleased with its audit outcomes for this financial year and that it will continue to improve in the next 4 years. He asked that all the questions from the Members be posed to the Head of Department (HOD).

Mr G Paulse, Head of the Western Cape Government Department of Local Government, repeated that the Department is pleased with its audit report as these past few years have been difficult for the Department with the drought and fires.

The Chairperson opened the floor for questions.

Ms D Baartman (DA) congratulated the Department for its clean audit as other departments within the Provincial administration have not been able to do that.

Regarding the ERMCO members, she asked if there were valid apologies for meetings missed by officials who were meant to attend the meetings of the entity.

She referred to page 75, where the Department indicated that additional ICT risks will be discussed and considered during the next financial year and asked what the details on the ICT risks were.

She commended the Department on the fraud and corruption investigations that it has completed during the course of this financial year.

Referring to page 189, which touched on under spending of R926 000 on the compensation of employees, Ms Baartman asked what the particular vacancies of those posts were.

On development, the report indicated that the department spent 85.4% of the allocated budget on the Training and Development Programme. Ms Baartman asked why 85.4% of the budget was spent for the programme, and what training did the Department offer.

Noting the Department’s increased revenue, she asked what steps it took to increase the revenue.

Under current liabilities, there were voter funds to be surrendered to the Revenue Fund. Previously the funds that were meant to be surrendered were approximately R15 million. Ms Baartman asked what the Department did differently in order to bring the amount down.

She noted that the money spent on computer services had decreased by R300 000.  She asked whether the whole amount spent was spent or if the amount had been budgeted for.

Ms Baartman asked whether the Department has increased its use of paper, as the budget spent on stationery, printing and office supplies increased from R6 000 to R35 000.

The Department noted that there were damages to a specific vehicle. She asked what happened in that particular instance.

In 2017-18 the Department was owed R141 000 in receivables from the SARS. Ms Baartman asked if in previous years the SARS had owed the department money.

She also asked why the Department did not spend the money allocated for training of its officials.

Ms Baartman noted that page 192 indicated that there was an adjustment to the Operational Grant given to the municipalities. She asked for clarity on whether this is the money received back from the municipality and what exactly the process was.

On the issue of the Municipal Grant, Ms Baartman asked if all municipalities have 0% expenditure in terms of that grant. She asked if the money has been allocated and if it has been spent yet.

Mr Paulse said that there were apologies that had been tended by officials for their absence at ERMCO.

The Department has identified that there are emerging ICT risks and has received assistance from a staff member from ICT to identify the ICT risks so that they can be recorded in the ICT risk register. The main risk of the ICT is the capability and testing of the core function in finance. ICT governance testing for the Department was done a while ago and this has assisted the Department in identifying the risks within the province.

Ms B Sewlall-Singh, Chief Financial Officer: Western Cape Government Department of Local Government, stated that most of the vacancies have been filled by the Department. Most of the vacancies were for non-critical posts.

On training and development, she mentioned that this does not apply to the training of the staff of the Department, but rather to the training offered to officials of the municipalities. On the question of non-attendance, Ms Sewlall-Singh clarified that the non-attendance of the training relates to the staff of the Department and not officials of the Department. There is a difference that needs to be made clear.

She added that the Department is not a revenue collecting Department. The increase in the amount of revenue is related to the rollover of unspent grants in the municipalities.

The Department noted that there was an amount of R1.5 million that was meant to be surrendered. Ms Sewlall-Singh mentioned that any savings that is underspent on the baseline must be rolled over. In the 2017-18 financial year, that equated to R1.5 million and this financial year it stands at R15 million.

In terms of assets, there is no correlation between the ICT risks and the money spent on computer equipment in the Department. These are separate matters.

On the increase in spending on stationary, Ms Sewlall-Singh indicated that stationary falls under other consumables that the Department had spent its budget on and is not a separate category.

She mentioned that SARS actually owed the Department R315 000 in the past financial year, but only settled it with R141 000.

Ms Sewlall-Singh added that the adjustments were made on the operational grants because the Department had decided not to pay over the grant in its entirety given that there was an audit query around it. The Department was waiting for finality on the way forward before taking the decision to address the grant. This has recently been finalised by the Department. With the alignment of the municipality financial year with the Department’s financial year to be observed in the first quarter, the information indicated on the report only refers to March.

There were 16 separate cases where there was damage to the Department’s vehicles. This relates to missing car keys, breakdown of the cars or the damage to windows. Ms Sewlall-Singh indicated that these damages cost the Department a total amount of R51 000.

Ms E Barnard, Chief Director of Municipal Performance Monitoring: the Western Cape Government Department of Local Government and Support, stated that the Department has established a Committee that analyses the grants. The Department receives grants from the National Treasury and allocates them to governmental related projects. Municipalities are expected to liaise with the Committee on a particular project and the budget required for it. If the Committee agrees to a project, the Department will release the funds to the municipality and the particular project is monitored by the Committee. She added that several projects have already started and are being monitored.

Mr Paulse added that the department currently does its due diligence with regard to municipalities only at the end of the financial year.

Mr D America (DA) stated that it is clear that the Risk Management within the Department is clearly being monitored effectively by Officials of the Department. He asked how the Department planned to integrate risk management into the management of the Department whilst retaining its current responsibilities in the Department.

He congratulated the Department on the fact that that it did not have any fruitless and wasteful expenditure.

Ms N Makamba-Botya (EFF) asked for more information about the Department’s inability to adequately deliver effective and efficient services against an increased mandate. And whether it has contingency plans so that it can ensure that this does not occur in the future.

She asked whether there were work related injuries, communicable diseases and accidents that related to injury. She also asked whether there was damage to property that has been reported to the Department.

The report indicated that there were no cases of fraud and corruption within the department. She asked the Department if it could share its practices with other Departments. Makamba-Botya also questioned the authenticity of the report, citing recent reports of corruption within municipalities.

Mr R Allen (DA) asked whether the Department had used business consultants to assist with its financial management. He also asked what the benefits were for the awareness campaign on the firefloods in the province.

Mr Paulse added that the Department has already integrated risk management and the Department of the Premier houses the agency on risk management. The Department works with the office of the Premier on this.

He indicated that it is true that the Department had no cases of fraud and corruption. The Department has created a culture of ethics, and the staff abides by this. This attitude has assisted in there being no cases of fraud and corruption. Officials within the department also attend classes which deal with identifying cases of fraud and corruption, which has created broad awareness. He added that the Department won the Gold award for ethics this past financial year, which illustrates the good work done by the Department.

Ms Sewlall-Singh said that the information on page 120 addresses the Departments utilisation of consultants.

She added that the Department has spent R1.5 million on fireflood awareness campaigns.

Mr C Deiner, Chief Director of Disaster Management and Fire Brigade Services:  Western Cape Government Department of Local Government, touched on how the Department creates awareness on firefloods and drought. He indicated that the Department does a risk assessment on fires and droughts and then identifies schools that are at highest risk. Awareness programmes will be held in those schools identified. The Department had a campaign where its officials, accompanied by officials from the communications unit, travelled to the schools to conduct awareness programmes. In the future, the Department hopes to expand the number of schools that it has conducted its campaigns in. This programme has mostly been targeted in the Central Karoo, and with 40 000 learners.  

Mr Paulse said that the Department has included the inability to adequately deliver effective and efficient services against an increased mandate into its strategic Risk Management. At the moment, an organisational review of the entire Department has been conducted, and a macro-structure will be created to align the mandate of the Department to the organisation. The department is also in the process of creating a micro-structure. There are a number of actions that have been taken on the Department’s control procedure.

Mr D Smith (ANC) asked if Day Zero was part of awareness campaigns that the Department had conducted. He also asked if the Department could provide the Committee with the number of campaigns it had done and the amount of money spent.

On the voter funds surrendered to revenue fund, he asked why the funds are being surrendered and why they not been spent.

Mr P Marran (ANC) asked if the municipalities have requested assistance and whether there will be assistance from the Department so that these issues could be finalised.

He added that there are allegations about close family members or officials of the municipality who are benefiting from corrupt dealings with the state. If it is the case that there is indeed corruption, he asked what actions will be taken by the Department.

Mr Marran applauded the Department in reaching out to the communities. In the last year, there were reports of issues in the farm areas of the Western Cape. He asked if there are details on the type of problematic issues present on the farms.

The Department has made it clear that there have been awareness campaigns done in the Central Karoo and the City of Cape Town, but what other areas did the Department target for its awareness campaigns.

Ms Baartman asked what risks the Department faces with the budget reduction of 5 to 6% in the 2019-20 financial year. She also asked what the impact will be on the Department and municipalities should the budget be cut by 5% in the Department of Local Government.

Ms Baartman reminded the Members that today there had been load shedding and that it is estimated that R300 million was lost in the Cape Town. She asked if this had an impact on its projects and the municipalities.

The Chairperson said that given that municipalities are highly unstainable, it must be difficult for the Department to coordinate with the municipalities. With the increase in the number of people migrating to municipalities within the Western Cape, there has been an increase in the challenges to municipal economic capacity. She asked how the Department deals with these issues.

Referring to page 119, she pointed out that there are two cases of temporary or semi-disablement in the Department. She said that the Department has not made it clear on what exactly it is talking about when it speaks about two cases of disablement in the Department. She asked that the Department make it clear to the Committee about what it meant on page 119.

Under promotion of access to information, Ms Baartman wanted to know the details of the request received by the Department on certain information it has.

Mr Paulse stated that he does not have the details currently on the information requested.

The increase in population density has been identified by the municipalities as an emerging priority and the Provincial Department has included this in its Provincial Strategic Plan.

On the budget cuts for next year, he added the Department has reached out to the National Treasury to explain the risks associated with the budget for the Department’s ability to deliver quality services to the citizens. The size of the budget means the Department must cut R14 million next year, R18 million the next and R21million in the third year. The Department has to terminate certain projects in the Department but also reduce funding in some of them such as the project on the mitigation of fire flooding and a cut to projects and the COD. Currently the Department is operating on a quarter of the staff that it requires. The budget cuts will severely impact the Department’s ability to manage the municipalities within the province.

He informed the Committee on how the Department deals with cases of fraud and corruption internally. The municipality will ‘scope’ for the allegations of corruption and maladministration. Two weeks ago, some of the officials of the department were dispatched to the municipalities to scope the situation. If there is prima facie evidence of fraud and corruption, the Department will assess the evidence, and will advise the Minister on the allegations. He mentioned that only the Minister has the power to authorise investigations into fraud and maladministration. Given that it is the responsibility of the Municipal councils to deal with fraud and maladministration with the municipalities, the Department expects the Council to deal with it first.

The Department has made money available for the awareness/events campaigns. These campaigns may include key officials of the Municipal council, such as the Mayor, who assists in generating interest in the campaigns. Awareness campaigns have taken place in areas such Kanana, Beaufort West, Knysna and the West Coast. The details of the various campaigns done by the Department will be submitted to the Committee at a later stage.

Mr Deiner said that when the disaster management centre had conducted its weather assessments and noticed a drought was looming, it activated the provincial disaster management centre. During November 2017, there were up to 80 organisations that had taken part in the centre which assisted in creating a risk assessment plan that would deal with risks such as the impact on the environment, wildlife and the humanitarian fallout. Other role players such as the municipalities and the security services were involved. The focus was mostly on the City of Cape Town. Currently the department monitors the dam levels on a weekly basis to ensure that the City does not encounter a drought situation again. He added that Day Zero was averted because of the water savings of the citizens of the City of Cape Town; a feat he attributed to the success of the awareness campaigns.

The provincial department is aware that load shedding is costly to its operations but it has assessed the risks attached to load shedding. It has recently developed a provincial electricity plan that has now been adopted as a National Development Plan. The City of Cape of Town has spent R250 million rand to improve key infrastructure within the city and the province that will keep electricity to critical areas such as hospitals. This and other plans will be presented to the Committee at a later stage.

Mr M Brand, Director of Municipal Infrastructure: Western Cape Government Department of Local Government, said that in the Central Karoo, specifically in the municipality of Kanana, the department has established the Central Karoo Drought response plan. A Committee was established that includes drought engineers, hydrologists, as well as members of the municipality to prepare the Department of Water and Sanitation, and the Department of Environmental Affairs. Work streams have been established under this task team that focus on the technical issues, such as disaster management, tariff structures and restrictions. The Committee also looks at whether the bylaws in municipalities are in place to prevent and monitor illegal borehole drilling. In the Central Karoo, the Committee is focusing on informing the communities that the drilling of illegal boreholes on their private property will affect the water supply of the entire town. DCT looks at the large users of water, such as the filling stations and the guesthouses in the Karoo, and indicates to them that they should decrease their water usage.

The Department conducted 16 outreach events in the rural areas, and this includes rural towns and rural farm areas. For example, the Department has reached 20 farms in Riversdale and has even bussed people to each event so that they can take part in the proceedings.

Mr Paulse stated that Ms Sewlall-Singh is better placed to answer the question on the Pie application.

Ms Sewlall-Singh indicated that the Pie request was a request from a service provider related to the input-grid contender. The request was related to an annual tender that is advertised by the Department. She added that the Department will give the Committee more details in the next meeting.
 
Mr Maran said that he hoped that the Department has focused on providing all services to the Western Cape citizens and not just one particular service. There have been instances on certain farms where farm workers have been prevented from entering into their work premises by their employers. He asked that the Department continue with their outreach programmes into the farmlands, to ensure that the farm workers feel that the Provincial Government does recognise them and the issues they face.

Ms Makamba-Botya asked Mr Brand if the department is planning on building more boreholes in the towns and rural areas, seeing that this is where most of the poor communities reside.

The Chairperson asked if the Department recorded investigations that it has concluded on fraud and corruption.

In the report, the Department noted that it had spent R810 609 on Ward Community campaigns. She asked if this is a standard programme or a once off. She also asked how the Department measures whether a programme was a successful or not.

She noted that the Department increased its spending on transport provided for its own activities and asked if this was due to the elections. She also asked why there was a sharp increase especially when compared to the 2017-18 Financial Year.

Mr Maran said that the Department should have a system which reports on the number of people that have been transported, particularly people bussed to the awareness campaigns.

Mr Paulse asked that Mr Brand to respond to the questions.

Mr Brand said that in terms of the supporting grant on drought and disaster management, it has focused on two levels. The first is the creation of new boreholes and secondly, on the sustainable management of the boreholes. The Department’s geologists have identified the most suitable areas to drill for water, and the Department currently has two focus areas: one in Beaufort West which will aid in securing water-security in the medium and long term. Boreholes have also been identified in Laingsburg. In other areas such as Kannaland, the sustainable management of the construction of boreholes has been important. The Department’s geologists have assisted in the development of areas termed as Vula’s which are the water use licences which are given to those particular municipalities to extract water according to the licence. Officials from the Department are tasked with measuring the amount of water in the boreholes.

Ms N Zamxaka, Chief Director of Integrated Service Delivery: Western Cape Government Department of Local Government, said that the Thusong transformation project related to transport. The Department has provincial outreach programmes and works with other Departments. The Department also supports municipalities to roll out municipal projects. She indicated that there are two processes for the roll out of Thusong projects. The first is that either the Department is approached on a project or it will then partner with the Department of Home Affairs and the Thusong centres within the local municipalities. The other is that the Department might conduct its own provincial outreach programme, and will assist community residents who do not have transport. She added that for residents to receive transport assistance from the Department, they must show the Department of Home Affairs their identification documents. Transport is only made available if the municipality cannot transport those people. There has been a challenge with the introduction of the new smartcard ID system.

Currently, the Department has two components to its reporting. The first is that the information on the services provided by the Thusong transformation project is available in the Thusong local centres. The second is that this information is then sent to the Department and is on the Departments official records. 

Mr Denier said that in 2016 the Department had embarked upon a diagnostic assessment of public participation in municipalities, particularly in ward districts. One of the outcomes was that most of the community members did not know who their ward councillors were. The Department has assisted the municipalities in raising public participation by partnering with councillors in the ward districts, and conducting awareness campaigns on how people within the community can participate in meetings and events. The campaign was published in all three official languages of the Western Cape and was distributed to the municipalities. The amount of R810 609 spent on ward community campaigns related to this.

Mr Denier stated that Department monitors the ward committees and this is done on a quarterly basis, which assists with determining whether a campaign has been successful or not. The Department noted that there has been an improvement, as the people within the communities are beginning to familiarise themselves with their ward councillors and have been participating in meetings hosted by councillors.

Mr Paulse stated that the Department does not report on allegations of fraud and corruption in its audit reports, as this is an internal matter. In terms of the deliverables, this has been highlighted in part B of the audit report for the Committee and public to see. Some of the investigations are currently in the hands of the HAWKS.

Ms Makamba-Botya asked what the reasons were for the non-finalisation of the disciplinary steps with regard to non-compliance to supply chain management.

She asked if there are investigations currently underway with regard to fruitless, wasteful and irregular expenditure. She also asked if the Department could inform the Committee on the time taken to conclude such investigations. She asked further if the current investigations have been concluded.

Ms Sewlall-Singh said that because the information on fruitless, wasteful and irregular expenditure is complex, the investigations usually take two to three months. This allows for the Department to consult with external parties for assistance or input during the course of the investigations.

She added that the one case of fruitless, wasteful and irregular expenditure for R2000 is an internal case. The case has not been finalised because one of the individuals involved in the case has since passed away. The information of the other case of fruitless, wasteful and irregular expenditure has been complex but the Department will at a certain point finalise it.

The Chairperson thanked both the Officials from the Department and the Members of the Committee for a constructive engagement.

The meeting was adjourned.