SALGA 2020/21 Annual Performance Plan; with Deputy Ministers

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Cooperative Governance and Traditional Affairs

12 May 2020
Chairperson: Ms F Muthambi (ANC); Mr T Dodovu (ANC, North West)
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Meeting Summary

Video: JM: PC on COGTA and the SC on COGTA, Water and Sanitation and Human Settlements, 12 May 2020

Annual Performance Plan (APP) of Government Departments & Entities 20/2021

The Joint Committee received a presentation from the South African Local Government Association (SALGA) on its Strategic Plan and Annual Performance Plan for the year 2020/21 in a virtual meeting. The two Deputy Ministers of the Department of Cooperative Governance and Traditional Affairs (COGTA), Mr Parks Tau and Mr Obed Bapela, were present at the meeting.

SALGA said it was working on improving its strategy, and this would result in a repositioned strategic plan. Key performance and goal areas had been identified to resolve challenges that existed in municipalities. The Auditor-General’s report had demonstrated that the performance of SALGA had improved. The main challenges facing municipalities and local government were low budget allocations, corruption and poor financial management. Municipalities were obviously in a poor state, and lacked proper leadership and governance. The COVID-19 outbreak had increased the challenges in municipalities, and this had led SALGA to develop impact strategies to assist them, despite financial limitations.

Members were particularly concerned with the high levels of corruption that existed, and the poor financial state that municipalities found themselves in. They questioned the impact and role of SALGA, considering that the organisation had the responsibility for conducting oversight and ensuring compliance and functionality in the municipalities. The state of local government was getting worse, even though more money was being injected into municipalities. The alignment of SALGA’s strategic and annual performance plans with those of the national department was questioned, because of the contradictions that existed between both plans.

Municipal debt was a concern, especially since SALGA’s main source of revenue was from municipal levies. Existing municipal debt had not been recovered, and the debt kept on increasing. The effectiveness of SALGA training provided to senior municipal officials was doubtful, because corruption levels were increasing instead of decreasing. Members were interested in the intervention strategies that SALGA had in place to address municipal challenges and to ensure consequence management, especially since the lockdown started.

Meeting report

Ms Thembi Nkadimeng, President: South African Local Government Association (SALGA), said the presentation would show different strategies by SALGA to assist local government. One of the two fundamental areas included the financial planning issues in local government. The repositioning of SALGA had been encouraged by the National Executive Council (NEC) to help how SALGA promotes and seeks to develop municipalities and local government.

Mr Lance Joel, Chief Operations Officer: SALGA, said the issues faced by SALGA and municipalities because of COVID-19 had been outlined at the previous week’s meeting. The presentation would cover SALGA’s journey over the past five years, including the current year’s strategic plans and annual performance plans.

SALGA’s mandate was influenced by the policy ambition to inspire service delivery, accountability and leadership that was aligned with local government. Its vision, mission and values should allow for re-adaptability, especially during the COVID-19 lockdown. It aimed to ensure that there were more meaningful municipalities, in line with its core mandate. The SALGA planning cycle was consistent with the national and provincial planning cycles, and included aspects that were important to it as a representative body of municipalities. Its focus was on the outcomes which allowed for the measurement of progress and the achievement of goals.

On strategic positioning, the mandate by municipalities to the NEC aimed to ensure that the rights of municipalities were protected and that policy making was properly influenced to ensure balance. The key area goals had been determined by SALGA to respond to the contradictions in the political landscape concerning inequality and unemployment. The changes that impacted on the five-year strategy of SALGA included the priorities of the Sixth Parliament administration, which had led to its reflection of its medium-term strategic framework (MTSF) plan.

Mr Joel outlined the seven priorities that had been identified, which included economic transformation and job creation, education, skills and health, as well as the consolidation of social wages through reliable and quality basic services. The performance of SALGA had improved over the last six years, which was verified by the Auditor-General’s (AG’s) audit report. The performance areas outlined included the energy summit, which had resulted in the current energy policy that allowed municipalities to be part of energy generation. The second performance area was the notable deliverables and stability in the challenges facing municipalities over the past nine years. The third performance area was the ongoing municipal debts, which remained a concern and a priority to SALGA. The fourth performance area was the legislation reviews that would continue to be implemented, as well as the reviews of the integrated resource plans and the current challenge of ensuring electricity regulations, which would continue being a priority. Professionalism continued to be a challenge for SALGA, which it could not resolve on its own.

SALGA’s leadership had identified four interlinking challenges for municipalities in the annual performance plan:

  • Capabilities, governance and leadership;
  • Fiscal policy and financial management;
  • Spatial transformation and Inclusion;
  • Service delivery and infrastructure.

The issues raised by local government in the past five years included the constitutionally mandated funding of local government, because local government received the lowest allocation of the national expenditure, at 9%, to perform its functions. Unfunded mandates had been identified in six metros. SALGA had determined that not only was there a need to review funding, but to also ensure that there was a connection of major policy powers and functions in all spheres of government. It had also identified four focus areas in relation to the issue of transfers, which included good governance, financial sustainability and economic growth transformation. Key outcomes had been established for each focus area. Preventive measures had also been implemented for challenges that were faced by municipalities.

Mr Joel pointed out that few municipalities had shown good financial health in the recent municipal audit. Most municipalities had an annual net deficit between generated revenue and expenditure. 34% of municipalities had a deficit which was a concern for local government, especially if creditors would not be paid. Municipalities had also shown signs of not being able to recover debts, with only 34% of all debts being recoverable, according to the AG’s report.

SALGA planned on strengthening financial accountability and enforcing good governance, which should improve local government. Its mandates and plans included the outputs and output indicators, as well as the 2020/21 targets. The success of the plans relied on SALGA forming collaborations with key role players at a policy level. On the financing plans, Mr Joel explained that SALGA was under-funded, which meant that goals were restricted to affordability. He mentioned that SALGA relied on municipal levies, which constituted 89% of its revenue. Its financial position was stable, but it would have to review its financial plan due to COVID-19, and make it more realistic for municipalities to ensure effective implementation.

During the COVID-19 lockdown, municipalities had been playing a responsive role in communities by providing community awareness to ensure sanitation, as well as sanitising public facilities. Funding of these initiatives was in contrast to the amount of funding available. On the fiscal response to municipalities, three funding envelopes had been identified to capacitate them during COVID-19.

He expressed SALGA’s disappointment at the distribution of the Disaster Relief Grant Fund in the Hantam municipality, Northern Cape, because the distribution of Personal Protective Equipment (PPE) to employees regularly on a monthly basis cost R175 820, but only R21 000 had been allocated to the municipality to perform this function. He pleaded for the budget allocation to be reviewed for different municipalities.

Five pillars had been determined for review due to the COVID-19 outbreak -- local economic development, debt management, service delivery, legacy expectations and governance. SALGA had previously provided the Portfolio Committee with recommendations for the governance of municipalities to be strengthened, and mentioned that funding for municipalities was an ongoing challenge, as was the financial accountability and management in municipalities.

Mr Joel emphasised that the strengthening of financial accountability and management in municipalities was important, especially since the outbreak of COVID-19 had further crippled the state of municipalities.   


Mr C Brink (DA) said that since SALGA’s last presentation, a lot had happened. He asked for clarity on the actions of the national government in response to the collapsing state of municipalities during the lockdown. In its strategic plan, had SALGA considered the impact of the collapse of revenue in municipalities, especially since it depends on municipal levies for revenue? Should SALGA consider making cost cuts instead of requesting more money? He raised concerns that SALGA’S main function was knowledge and information sharing, but nothing had been provided on SALGA’s research into procurement irregularities in municipalities, because there was no evidence of procurement and value for money in municipalities.

Ms P Xaba-Ntshaba (ANC) was pleased that SALGA planned to capacitate municipalities. She expressed concern at the high levels of corruption in municipalities, and asked SALGA when the issue was going to be addressed to stop municipalities from stealing from the poor. She also pleaded with SALGA to assist the eThekwini municipality.

Ms H Mkhaliphi (EFF) asked SALGA why their 2016 annual performance plan listed the Economic Freedom Fighters (EFF) as a trade union, and how it planned on achieving objectives outlined in the strategic plan and annual performance plan because of the rapid degeneration of municipalities. What was its view of the Department of Cooperative Governance and Traditional Affairs (COGTA) annual performance plan, which stated that 50% of the population was living below the upper poverty line. She commented that SALGA’s annual performance plan stated, on legislative factors, that national government imposed pieces of legislations without addressing their implications, and asked if it had resolved any issues without considering the implications of the legislation. She also asked SALGA to raise issues on policies that slowed down progress, and asked how it planned on achieving outcomes if there were no footprints at the local level.

Ms G Opperman (DA) questioned why SALGA identified itself as under-funded, when it had an excessive budget which was more that the national department’s budget. She asked if it provided assistance with administration, good governance and expenditure guidelines to risk municipalities, and how it resolved financial misconduct, financial mismanagement and loss of revenue in municipalities. Did it have post- COVID-19 economy recovery strategies in place to support municipalities? She asked for SALGA’s opinion on the money spent on municipal forensic audits, and if it had support structures for municipalities as well as mechanisms to address inadequate investigations of municipalities.

Mr H Hoosen (DA) said that millions of Rands had been invested in municipalities to perform, but the lockdown had shown the irregularities and inequalities that existed in different communities because of under-performing municipalities. He expressed concern over the poor municipal and local government system that existed, and pointed out that municipalities were getting worse instead of improving, which was why the Committee conducted oversight visits. He asked about SALGA’s plans to prevent the wastage of funds that were invested in failing municipalities. He also asked for the specific amount of the debt in membership fees, and the anticipated amount if the debts increased.

Mr B Hadebe (ANC) expressed disappointment that the updated version of the SALGA presentation had been received only a few minutes before the presentation, which had limited the time to evaluate it. What actions had it taken to resolve the difficulty that councillors had with conducting virtual meetings during the lockdown, especially municipalities with limited resources? SALGA had previously stated that 3 979 councillors and senior municipal officials had received training, but he questioned the effectiveness of the SALGA training because of the increase in disciplinary hearings of councillors and senior municipal officials, considering the amount of money and time invested in the training programmes. The number of trained officials had increased, but there had been no decrease in the level of corruption. He questioned whether the purpose of the training was to hand out certificates, or to instill responsible leadership. He asked SALGA whether the output indicator on the devolution of the transport function included MetroRail. He also enquired whether the allocation of funds for municipalities was done in consultation with the national department, and if local government funding could be increased.

Ms M Mmola (ANC, Mpumalanga) asked how SALGA’s 2020/21 annual performance plan expected to intensify the involvement of the organisation in interventions. Had SALGA learnt any lessons from the municipal Eskom debts which had increased over the past five years, while municipal South African Revenue Service (SARS) debts had decreased over the same period? Did it have any initiatives to exploit land into revenue? Should mechanisms to capture land value be adopted by municipalities?

Ms C Visser (DA, North West) said there had been no evidence of successful municipal interventions, and that municipalities were dysfunctional in meeting their constitutional obligations. She asked how SALGA would ensure accountability and financial management in municipal re-thinking.

Mr S Mfayela (IFP, KwaZulu-Natal) applauded the presentation for highlighting the lack of accountability and consequence management. He said the kevel of corruption in municipalities was appalling, and asked how SALGA planned to implement accountability and consequence management in municipalities to avoid corruption, especially if an official was found guilty.

Mr I Sileku (DA, Western Cape) asked about the process of supplying electricity in municipalities. He also applauded SALGA for the training it provided, but said that the training was not beneficial. He asked whether the training was necessary, and for SALGA to comment on how political parties could assist to ensure that municipalities were professionalised.

Mr K Ceza (EFF) asserted that municipalities functioned in corruption. He questioned the functionality of municipalities if their programmes were not completed because of corruption. How did SALGA plan to ensure that municipalities were functional? He asked for clarity on the process of municipal levies and the employee deduction determining factor, because municipalities had seasonal and permanent workers. He also asked how rural municipalities were being monitored by SALGA.

Mr I Groenewald (FF+) asked whether there was consequence management training for councilors, especially regarding the resolutions taken by council. What steps did SALGA take to ensure that administrators were working? He suggested that SALGA should implement programmes that were paperless for municipalities. He requested it to investigate the value added tax (VAT) situation of municipalities, because the loss of income at municipalities was a result of VAT.

Mr A Gxoyiya (ANC, Northern Cape) asked what challenges the organisation was facing with funding, and how they could be resolved. He also requested that SALGA explain the relationship it had with the national department, and how it resolved issues facing municipalities. What were the legal implications of its in municipal interventions?  He added that service delivery was compromised if there were no funds available, and suggested that SALGA request more funds if the funds could be used effectively.

Ms M Tlou (ANC) said the AG’s 2018/19 report stated that financial management challenges, supply chain management inefficiencies and weak internal controls were evident in municipalities, and asked for SALGA’s plans in addressing these challenges. She also wanted to know what role it played in ensuring South Africa was strategically aligned globally to attract investors, and in ensuring sustainable the rural economies that were affected by low economic activity. What strategies did it have in place to reduce the high youth unemployment rate? She asked about the methods it used to conduct assessments on skill capabilities, and what contingency plans it had to deal with high municipal debts because of delayed municipal levies.

Mr S Zandamela (EFF, Mpumalanga) asked what the intervention role of SALGA was when municipal failures occurred.

Mr G Mpumza (ANC) highlighted that municipal revenues had been decreasing while expenditure increased, and asked SALGA if it had alternative revenue sources for the lockdown, to support financially struggling municipalities. He commented that the municipal planning instrument, the Spatial Planning and Land Use Management Act (SPLUMA) had been restricted by the leadership, and asked how SALGA planned on balancing the roll out of SPLUMA for municipalities. He also wanted to know what the Inter-Ministerial Task Team’s (IMTT’s) plan of action was to resolve structural challenges that were related to water and electricity.

Co-Chairperson Muthambi mentioned that labour relations challenges were evident in municipalities, and questioned the role of capacity building that SALGA played. She asked SALGA whether a contribution was made in the Ugu District Municipality, KwaZulu-Natal, and if labour dispute mechanisms were efficient and how disputes were being resolved. She also welcomed SALGA to attend future Committee meetings with dysfunctional municipalities that had been called to Parliament. She stressed that Municipal Public Accounts Councils (MPACs) must be functional, and that municipal issues must be resolved.

Co-Chairperson Dodovu highlighted the need for PPE for COVID-19, and asked how monitoring would be ensured, including checks and balances, for the purchasing of PPE. How was SALGA monitoring how municipalities were handling challenges during the lockdown, such the improper distribution of food parcels and the illegal issuing of permits, and had strategies been developed to resolve these issues? Did it have review mechanisms in place that ensured consequence management for municipalities? He suggested that the Committee should provide assistance to SALGA where necessary.

Co-Chairperson Muthambi proposed that SALGA respond to Members’ questions in writing because of time constraints, and submit them to the Committee secretary.

Ms Mkhaliphi asked why the meeting was set for two hours instead of three, and argued that the written responses would not allow for full engagement with SALGA.

Co-Chairperson Dodovu suggested that SALGA respond briefly to the main concerns highlighted by Members, and that a full response should be submitted in writing.

Mr E Mthethwa (ANC, KwaZulu-Natal) commented that there had been no proper time allocation for Members to ask questions, which had resulted in some Members not asking any questions.  

SALGA’s response

Ms Nkadimeng said that responses would be submitted in writing as requested.

The responses would focus on concerns about corruption, the lack of trust because of maladministration and corruption, as well as the challenges identified in municipalities and how they could be resolved. She pointed out that certain issues had already been outlined by municipalities.

On the effectiveness of training, she said that training was supposed to capacitate municipal officials to make well-informed decisions, and the training would be considered ineffective only if officials were unable to make well-informed decisions, not if there was corruption because they lacked the capacity to make these decisions. The issue of corruption should be dealt with collectively.

She said the training of Municipal Public Accounts Committees (MPACs) would not result in accurate reports, because there were deliberately correct and incorrect MPAC reports. The outcome of the reports was not because of a lack of training, but a lack of desire to perform. Certain municipal issues were political, which made it difficult for SALGA to intervene.

Co-Chairperson Muthambi thanked the president of SALGA for the responses, and announced that in future, Committee meetings would run for three hours. The written response document should be detailed and help Committee Members to hold the presenters accountable. She said the municipal issues should be resolved together with SALGA.

The meeting was adjourned.


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