CoGTA on S139 interventions in municipalities; with Deputy Ministers

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Cooperative Governance and Traditional Affairs

28 July 2020
Chairperson: Ms F Muthambi (ANC)
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Meeting Summary

Video: Portfolio Committee on Cooperative Governance and Traditional Affairs, 28 July 2020

In a virtual meeting, the Portfolio Committee on Cooperative Governance and Traditional Affairs received a brief presentation from the Department of Cooperative Governance and Traditional Affairs (CoGTA) concerning the Section 139 interventions. The Committee received feedback from the South African Local Government Association (SALGA) on the Department’s interventions and raised concerns on the challenges that municipalities faced.

The Department reported that during the financial year 2019/202046 municipalities across the country were subjected to interventions, with some municipalities being placed under administration more than once. North West and KwaZulu-Natal had the highest interventions. Performance of municipalities under Section 139(1)(a) was outlined as well as those under Section 139(1)(b) and Section 139(1)(c) and the status of the interventions. Municipalities under the Municipal Finance Management Act were outlined as well as the audit outcomes for municipalities under intervention during the 2018/2019 financial year.

Members thanked the Department and Association for the presentations and highlighted that the state of municipalities was getting worse even after there were interventions in place and consultation processes.

Members said that the Association’s presentation raised serious concerns, especially in Gauteng municipalities and asked if the Department had knowledge of the eMfuleni appointed Municipal Manager. The Department’s Members of Executive Council (MECs) in Gauteng should account for the decision of the appointment of the municipal manager. The failure of municipalities was proof that national and provincial government was failing to implement and ensure proper intervention.

The Department was advised to use the Auditor-General’s report as a warning instead of waiting for a municipality to get to a state of total collapse. The political conflict in municipalities was questioned and identified as the root cause of most municipal challenges.

The Committee resolved to summon all provincial MECs for local government where there were municipalities under administration for further deliberations on the matter. A detailed report was requested that outlined the role that the Department played to help struggling municipalities.

Meeting report

The Chairperson opened the virtual meeting, welcomed the Deputy Ministers and the Department delegation and handed over to them for the presentation.

Briefing by the Department of Cooperative Governance and Traditional Affairs (CoGTA)

Mr Themba Fosi, Deputy Director-General: Local Government Support and Interventions, COGTA, presented on the status of interventions according to Section 139 of the Constitution. He outlined the purpose of the presentation and the potential targets of Section 139. He highlighted the 46 municipal interventions during the 2019/2020 financial year. North West and KwaZulu-Natal had the highest interventions. Performance of municipalities under Section 139(1)(a) was outlined as well as those under Section 139(1)(b) and Section 139(1)(c) and the status of the interventions. Municipalities under the Municipal Finance Management Act were outlined as well as the audit outcomes for municipalities under intervention during the 2018/2019 financial year. The Auditor-General’s perspective on the audits per province was provided. He also listed the key principles for successful implementation, challenges, observations, the support that had been given to provinces and municipalities as well as the proposed solutions for initiation, application, and the monitoring of the interventions.

The Chairperson asked SALGA to provide feedback on CoGTA’s presentation and highlighted that it showed that there were a lot of problems. She reckoned that the presentation should have included information on the cost of implementing interventions and that CoGTA had played a limited role in addressing issues and challenges.

Briefing by the South African Local Government Association (SALGA)

Mr Bhekumzi Stofile, Member of the National Executive Council, SALGA, said that there were policies and legislation in place that governed the spheres of government. It was important that what went wrong during the application of policies was evaluated. Through evaluations the interventions did not work because issues did not relate to each other to fulfil the needs of the communities. There were leadership problems that existed in municipalities. He questioned whether interventions were intended to satisfy objectives or political objectives. In the past, interventions were withdrawn with no alternative plans in place to better the municipalities, which was a challenge facing SALGA.

Mr Lance Joel, Chief Operations Officer, SALGA, provided the legislative role of SALGA in the interventions and the position of SALGA on the interventions. He outlined a summary of CoGTA’s intervention problem statements and mentioned that some municipalities had been under intervention more than five times in the last ten years. He said that the role played by the national and provincial CoGTA Departments had not produced any results for municipalities and had proven not to work. Mr Joel listed three examples on how interventions had failed to work in the Emfuleni Local Municipality, the City of Tshwane Municipality and Mangaung Municipality, and he provided the recommendations intended for the Committee to attend to. 

Discussion

Mr H Hoosen (DA) thanked CoGTA and SALGA for the presentations and highlighted that the state of municipalities was getting worse even after there were interventions in place and consultation processes. There was no mention in the presentation by CoGTA of consequences that had happened for incompetent personnel in municipalities who were involved in irregular expenditure; as a result, the issues would continue if there was no consequence management in place. He also highlighted that there was no information on the recommendations for consequence actions taken against those who did not fulfil their duties. He asked the Deputy Ministers and the Director-General about the extent on implementing turnaround strategies for those who misused money and did not do their jobs. He argued that instead of sending support to municipalities, law enforcement should be sent.

Ms D Direko (ANC) said that there was a problem with the role of the Department and asked what the role of the Department was in ensuring that municipalities performed instead of blaming other stakeholders. She highlighted that the presentation by the Department was similar to the one that was discussed during the Committee’s strategy meeting and that it was a carbon copy of what was presented by the Department. The Department was tasked to find solutions to the challenges of interventions, but instead there had been no improvements in the municipalities since the meeting with the Department where recommendations to solving issues were provided by the Committee.

Ms H Mkhaliphi (EFF) thanked CoGTA and SALGA for the presentation and asked for clarity on the Intergovernmental Monitoring, Support and Intervention (IMSI) Bill that was mentioned by Mr Fosi and Mr Joel; when is the Bill expected to be tabled?

On the CoGTA presentation, she asked for clarity on the statement which claimed that the province of KwaZulu-Natal was leading in the innovation of application and correction of the interventions, and that there was a municipality in the North West that had been under intervention five times. She asked why there was no mention of this municipality in the CoGTA presentation. Alternative solutions should be implemented if the Section 139 interventions did not fulfil their intended purpose.

She approved the early warning system that was recommended and said that the decrease in the number of clean audits in municipalities should be addressed. The Department had not been fulfilling its role in addressing issues. The Municipal Manager in the Mtubatuba Municipality resigned and joined the eDumbe Local Municipality even though he had several charges against him. She highlighted that the Municipal Manager was constantly being rehired even though there were charges of corruption against him and asked why KwaZulu-Natal was named a leading province when corrupt officials were being rehired in municipalities. The issue and role of politics should not be overlooked in the municipalities. The Minister and the Deputy Ministers should look at the issues of politics in municipalities.

Mr I Groenewald (FF+) said that there were issues with administrators at the Matlosana Municipality who were not held accountable for their actions and suggested that the databases for office bearers should be carefully constructed.

On the municipal finance improvement programme, he said that phase three of the programme was set to complete in the current year and asked whether the programme was successfully completed because there was a lot of praise on the programme but the Auditor-General found that there were issues in the financial position of the programme.

Mr C Brink (DA) said that the types of intervention needed to be well understood – especially the severity of an intended intervention. The failure of the municipality was placed under different Sections of 13.9 with the subsection (1)(c) being the most severe case of municipal failure. The 54-page document that was sent along with the COGTA presentation on the list of municipalities under intervention was received. He pointed out that page 15 of the document on the City of Tshwane needed to be corrected on the statement in paragraph five on the R950 million that needed to be paid for the municipality to exit the electricity contract. The R950 million had been ordered to be paid back by the court and the Department was using and relying on false information, and this was worrying.

The dysfunctional relationship in the J.S Moroka Municipality was stated in page 45 of the document and there seemed to have been no action in addressing the issue even after the municipality’s representative mentioned that council meetings could not be held because of fear and threats. He also pointed out that the Makanda Municipality case was not included in the presentation on the financial recovery plan which had to be re-implemented as emphasised by the community and that the municipality was ordered to be disbanded by the court.

Although there was an issue of politics in the municipalities, national and provincial CoGTA Departments should have more power in interventions which they currently did not have; this was concerning. He asked for further details on the financial interventions in Govan Mbeki Local Municipality where residents had been experiencing long hours of load shedding because of municipal electricity breached and said that there was no intervention by national and provincial CoGTA departments. The intervention sections which had not been implemented in municipalities by national and provincial could be the reason for the failure of municipalities. He asked for the status of interventions at Govan Mbeki Municipality.

He stated that SALGA’s presentation raised serious concerns, especially in Gauteng municipalities and asked if the Department had knowledge of the eMfuleni appointed Municipal Manager. The MEC of CoGTA in Gauteng should account for the decision of the appointment of the municipal manager. The failure of municipalities was proof that national and provincial government was failing to implement and ensure proper intervention.

He welcomed the early warning system recommendation by SALGA.

Mr B Hadebe (ANC) thanked the Department and SALGA for the presentation and said that if the issues raised by SALGA were not taken seriously then SALGA’s confidence in the Committee would decrease and the MECs of CoGTA should be called to account, as well as municipalities that were found be concerning. The Committee needed to be proactive and not reactive in addressing issues. He said that the root of the issues was in the provincial government and not in the national government.

Mr B Luthuli (IFP) raised concerns on whether the interventions were effective and asked whether alternative measures were in place to deal with ineffective interventions. He also emphasised that the CoGTA MECs and municipalities should be called to account and by limiting the power of provincial government. There was no difference in the state of municipalities even after support was provided by government.

Mr K Ceza (EFF) supported all the suggestions made by Members of the Committee on the state of municipalities under intervention and asked whether the provincial government had been effective in municipalities. The AG had revealed the irregular expenditure by municipalities. He said that the failing state of municipalities should be treated as an urgent matter since municipalities were the point of contact with communities and in providing services and highlighted that there was no information on any turnaround strategies for the issue of failing municipalities. He asked on the number of times that the legislation allowed for provincial government to intervene in municipalities.

On the early warning system, he said that it was a good proposal and asked on the form that the system would take and the details on how the system would assist municipalities. He highlighted that when the J.S Moroka Municipality was presenting to the Committee; it was evident that there was political friction in the municipality and no relationship between the municipal officials.

Ms G Opperman (DA) said that there were numerous dysfunctional municipalities in the Northern Cape and Limpopo that required intervention and asked whether the decision to intervene was politically or financially motivated and why provinces failed to act before the situation got worse.

She also asked why Section 139(7) was not implemented when provincial COGTA failed to act when it was required and if there was clear criteria to determine the termination of interventions because most interventions were terminated after local government elections with the assumptions that the new council would handle the issues. She asked why the termination happened after the local government elections and highlighted that 48% of all implemented interventions since 1998 were repeated interventions for municipalities which implied that interventions were irrelevant and asked why Section 139 interventions were still being implemented if they did not improve the state of municipalities. She also asked if there were standard qualifications required for the appointment of an administrator and whether CoGTA and the NCOP evaluated the appropriateness of an administrator since administrators were not elected but placed. Who is responsible for overseeing the administrators? She said that the quality of oversight from the provincial legislature needed to be relooked and asked if the funding available for municipalities addressed the financial situation in municipalities and who provided the bailout for municipalities.

Mr G Mpumza (ANC) welcomed the presentation by CoGTA and SALGA and said that the potential targets of Section 139 failed to outline the executive functions and that the White Paper outlined how local government should function. He questioned if municipalities were in line with the Section 152 of the Constitution and said that local government had not been complying with the White Paper functions. He expressed concerns that provinces were inconsistent in the implementation of Section 139 in municipalities and asked on the progress of CoGTA nationally and provincially in assessing Section 179 reports.

On the financial interventions by CoGTA and Treasury, he asked how COGTA would ensure the full support of Section 139 in municipalities and said that interventions should encourage full functionality and recovery in municipalities. He said that the IMSI Bill should be presented to the Committee as soon as possible so that the Bill fulfilled its intended purpose through proper procedures and monitoring processes. He also emphasised that the MECs should be called to account to the Committee.

Ms C Visser (DA, North West) said that dysfunctional and incapacitated municipalities result in a lot of suffering for communities. Ineffectiveness, corruption and fraud issues had been identified in most municipalities during the NCOP oversight visits. Councils were not politically active in municipalities and there were no handover reports received from municipalities as well as appointments of senior municipal staff. She said that there was no action to address the issues and no proper consequence management. Some municipalities received little or no support from the provincial CoGTA and there was no Section 139(a) intervention in some of the municipalities. She said that something should be done to address issues in municipalities and to prevent the same issues from arising continuously. The national, provincial and local government needed to work together to address the challenges.

The Chairperson said that the document on the municipalities under intervention could have been better produced with analysis and comments from CoGTA. She expressed concern that the Department did not know or understand its role in the intervention strategies and the legislative responsibility. She asked what the learning objectives and capacity of the Department were during the implementation of Section 139 interventions, especially since the Constitution gave the Department power during interventions. She also asked how many similar interventions had there been in the past for the bulk interventions and said that the presentation did not mention any failures of the district municipalities in supporting the capacity of municipalities in terms of Section 133(3)(c) and Section 188 of the Structures Act.

She asked whether a district municipality was automatically placed under section 139 if the municipality it fell under Section 139 and she also asked what the ongoing status of intervention meant for municipalities as highlighted in the CoGTA presentation. She said that the ongoing status would result in the downfall of municipalities and asked whether the Department had a plan to prevent the ongoing status in municipalities.

She noted that the Auditor-General’s opinion on the extent of support given to municipalities had been absent in the recent years. She pointed out that there was no information on CoGTA’s role in ensuring the successful implementation of interventions in the presentation. She questioned why there were challenges in other provinces when the Committee had conducted oversight and suggested that the Department become more aware of the signs around the environment. She asked why certain sections of the Constitution were being overlooked instead of being used as preventive measures.

On the Umzinyathi Municipality, she noted that the municipality had been under intervention several times and that the municipality received audit opinions that outlined irregular expenditure and in the current year a disclaimed audit opinion was received by the municipality. The municipality went from bad to worse.

She recounted that CoGTA had launched an investigation into the municipality for irregular expenditure in 2017 and asked how much the investigation cost as well as the actions taken by the Department on the investigation report and the uMzinyathi Disaster Management Centre.

To SALGA, she noted that the presentation stated that SALGA had no specific role to play in terms of the Constitution and said that SALGA did have a role to play in determining the NCOP and Section 139. She asked for SALGA’s view and comments on the objective criteria for the proposal made by the MEC of CoGTA in Gauteng on the extension of the interventions.

On the identified concerns in the Mangaung municipality, she asked whether the concerns were covered in the renaming of the municipality.

Responses

Mr Fosi thanked Members for the questions and explained that the role of CoGTA in the interventions was based on the CoGTA architecture and that the Department played an oversight, supervision and monitoring role in the work done by provinces. Support that had been provided to municipalities was outlined in the presentation as well as the work done and the guidelines for provinces to follow. Provinces were also required to submit follow-up reports. If there was no legislation that governed interventions, it became difficult to address certain challenges because the Department used constitutional provisions relating to processes of implementation. He indicated that the IMSI Bill was effective in regulating the interventions.

On Ngaka Modiri Molema District Municipality, he said that the number of times that the municipality was under intervention was provided in the presentation and that specific information on municipalities would require the Department to collect information relating to the municipality.

On the root cause of failing municipalities being political, he agreed with this view because political instability in the implementation of interventions was high in many municipalities, which led to a collapse of the administration and service delivery. The matter required a different management approach.

On the database system, he acknowledged the suggestion on ensuring its effectiveness the experts in local government were governed by the same frameworks as well as deployed administrators. On the 54-page document, he said that the correction on the City of Tshwane case would be done.

The decision dissolving inconsistent municipalities was one that had to be made by the executive council. He supported the proposal that issues of accountability should be handled by the provincial government and in providing support and supervision to municipalities. Local government was over-regulated and there were clear legislative processes. The early warning system would utilise the key areas of performance of local government so the system would detect challenges and the Section 171 report would be used to evaluate service delivery and to detect any challenges before municipalities collapsed. He said that the Northern Cape and Limpopo had had several implemented interventions. The provinces would be supported to ensure that there was full cooperation to create functional municipalities. There were challenges of capacity in some provinces. Comments made by the Committee on the IMSI Bill were issues that had been raised to try and speed up the process of the Bill, which would assist the Department in addressing challenges of corruption in municipalities.

Some of the corruption cases had been handed over to the Hawks and there were concerns with the prosecution process. There had been arrests of senior managers in municipalities who did not comply or were involved in corruption.

On the quality of the intervention document, he said that the Department could improve but the intension was to provide the Committee with information on the cases of interventions in municipalities.

Mr Tebogo Motlashuping, Chief Director, CoGTA, said that the provision of the database of dismissed officials was introduced in 2011 and the regulations had been used ever since. The database was still available and was used before any senior managers were appointed in municipalities.

On the matter about the Mtubatuba Municipal Manager, he said that the Municipal Manager was not in the CoGTA database and that the provincial Department had no record of this Municipal Manager, but the information would be verified with KwaZulu-Natal. The information relating to the processes of people undergoing disciplinary hearings had to be submitted on a quarterly basis so that municipalities were aware of these people in case they wanted to work for another municipality and exercise caution when hiring and appointing.

Concerning corruption, national and provincial government was working hard to address the problem. The National Department did not have the power to enforce disciplinary action because the municipality was the main employer. Regulations were formulated together with National Treasury on the disciplinary process against senior managers, in terms of Section 72 till Section 120 of the Structures Act. Municipalities were empowered to follow all the processes to ensure that consequence management was exercised. The Department was lobbying the finalisation of the Structures Act and in situations where there was misconduct CoGTA and Treasury, it would use Section 106 of investigations when Members of Executive Councils (MECs) were not initiating investigations. Forensic reports were received by the Anti-Corruption Unit and were analysed by deployed Special Investigating Unit (SIU) staff. CoGTA was expecting follow-up reports from the SIU on the investigations.

The Chairperson said that the Anti-Corruption Unit still had to present its forensic report to the Committee. An updated report had to be prepared on the bulk document on the interventions that was received. The MECs should be invited to the meeting where the forensic report would be presented.

Mr Obed Bapela, Deputy Minister, CoGTA, explained that the role of politics was critical within the municipalities and that it was difficult to separate administration and politics because they were merged. A mechanism would have to be created to deal with the two aspects separately. A review on who was deployed in municipalities had to be done although political parties held the power to decide and place municipal officials.

The best members of political parties were sent to national government and provincial government. The process of the professionalisation of administration needed to be done according to the Municipal Systems Act and the legislation. The processes on the legislation were still at Cabinet level and were expected to be finalised in the next financial year after all processes were followed. The legislation would assist in supporting municipalities.

On the management of coalition politics, which was a new matter, he said that the legislation did not provide for coalition politics as they were not anticipated. Over-regulated legislation in local government may determine whether interventions were implemented on time in municipalities – especially those with coalitions.

Concerning municipalities taking government to court, he said that national and provincial governments had no power once the matter was in court. National Treasury was then forced to withhold the allocated budget for the municipality, which affected the delivery of services in communities. Municipalities were taking the interventions to court when they did not agree with the decision to implement them. This then raised the question whether the legislation supported and assisted CoGTA in addressing challenges in municipalities.

Mr Parks Tau, Deputy Minister, CoGTA, agreed and acknowledged the observations made by the Committee and said that the Section 139 interventions were in the process of being reviewed on their effectiveness in assisting municipalities meet their executive obligations. CoGTA had noted that implemented interventions had not produced results – even those that had been repeatedly implemented. A process of learning outcomes had been ongoing in trying to address the issues in municipalities. Through the IMSI Bill there was an intention of continuing the constitutional provisions of Section 139 to achieve their intended purpose. Provinces did not implement interventions in a uniform way because of differences in legislative provisions on Section 139. The Bill was part of a response measure. CoGTA had not implemented Section 139(7), which allowed for COGTA to intervene in provincial government to ensure that proper interventions were implemented in a municipality.

CoGTA was working on implementing Section 139(7) interventions and information would be provided on the municipality list of possible Section 139(7) interventions. Provinces must be supported in implementing their constitutional provincial mandates but the national department would intervene when necessary. There was no intention to overlook and undertake the role of provincial government. He said that there had been observations in the process of implementation that the Municipal Finance Management Act provision was not being utilised. The Act provided that before a municipal could get into financial crisis there was a responsibility to ensure that there was intervention by the provincial government. There was also a need to return to all responsible parties and evaluate how local government interventions were implemented. Some municipalities did not have the revenue basis to perform functions. The fiscal framework was being reviewed by CoGTA together with Treasury so that local government had sufficient resources to execute functions. The Committee needed to be reassured on the commitment of CoGTA to resolve issues. Improving the internal systems of CoGTA was also a focus area.

Mr Joel said that the early warning system was necessary and was not an original idea but had been existent. The effect of the idea had been given attention currently than it had before. The early warning system emphasised on the reporting systems used by municipalities to provincial government on a monthly, quarterly and mid-term basis. He said that the reports gave light to a municipality’s financial health and overall performance against the set deliverables and the red flags based on information that was available. The early warning system was based on the available information that could be used by municipalities to assist in tracking performance and assist national and provincial government in monitoring whether a municipality could execute its legislative and executive objectives.

He acknowledged the comments made on SALGA’s role in terms of Section 139 that there was no role and said that SALGA did have a role in the NCOP. He supported the suggestion made by Members that there should be engagements with the MEC’s of CoGTA because the Committee would be able to assess what was going on. More could be done to ensure proper oversight and monitoring by municipalities, which could be a solution to the current municipal challenges.

On the issue of Emfuleni Municipality, SALGA supported the observations made by Members. Regarding Mangaung Municipality, he said that the concerns of SALGA were two-fold because on the week that the MEC’s letter was received SALGA raised concerns after engagements were held with municipalities. SALGA noted that there were challenges in Mangaung and that support should be provided. The only disagreement was on the approach that would be used which was identified as weak. The Constitution was clear on the process for municipalities facing financial crisis. SALGA gave comments that the matter should be resolved urgently on the financial recovery plan and a team should be appointed to deal with the matter. There were attempts to develop and implement a financial recovery plan, but the Mangaung Municipality failed to execute the plan. There were problems with the process of the recovery plan.

Mr Stofile said that there was a dysfunction in the way that municipalities were required to report according to Section 71(2) and that there were possibilities that during the analysis of the reports there was a weakling of people who did not do their jobs. If reports were not properly analysed and diagnosed in the value chain then the point of the report was missed. In cooperative governance reports needed to be analysed and people who did not perform had to be held accountable. The lessons learnt from failed interventions had not been done in order to improve the effectiveness of future interventions.

He explained that in the Emfuleni Municipality the provincial government did provide support and oversight and that an intervention could not be continued if it had not been implemented. Section 139(7) interventions should be implemented in municipalities, otherwise provinces would have a chance to re-correct mistakes. The outcomes of interventions should be outlined and people should be held accountable to ensure that interventions were implemented successfully. There should be a debate on the meaning of cooperative governance because there was a different understanding between the spheres of government.

The Chairperson tasked Deputy Minister Tau on the determination of a uniform definition of what cooperative governance was and highlighted that there were questions by Members that were not responded to and asked the Department to respond to the questions.

Ms Avril Williamson, Director-General, CoGTA, said that the questions were responded to on the early warning system and consequence management for municipal officials who had not done their work. On the lack of consequence management she said that the presentation referred to people’s leadership on how their responsibility was outlined when it came to dealing with non-accountability. From a legislative perspective, COGTA did not have a direct lever for dealing with consequence management. The responsibility belonged to the municipal council, including the initiation of investigations, beginning at provincial government, where MEC’s were given power. In the reviewing of Section 139, there had been challenges and there was room for improvement. She said that the Inter-Governmental Regulation Framework would be strengthened and that the code of conduct of the Structures Act allowed for MEC’s to intervene in ensuring effectiveness.

Follow-up discussion

Ms Mkhaliphi asked SALGA’s COO regarding the interventions on slide six of the presentation and noted that there is a question mark circled in pink. She asked what this meant and mentioned that more time was required by the Committee to deal with the issues of municipalities and that the number of intervention municipalities should not increase. Discussions on the Department’s strategy should be held. The problem of political friction in municipalities had been raised before and suggested that the issue was addressed politically to prevent the dysfunction of municipalities.

On the early warning system, she said that it should be a key intervention for the Department. She highlighted that the Auditor-General (AG) had provided the red flags of municipalities so that the Department could find solutions to the identified issues such as irregular expenditure. The identified municipality of eThekwini was not placed under administration even after the AG’s opinions were provided on irregular expenditure. She argued that the Department was reactive and waited for issues to arise before addressing them. She asked Deputy Minister Tau to come prepared in the next meeting to present the plans and strategies of the Department and expressed dissatisfaction with how DDG Fosi responded to her question on Mtubatuba Municipality. She said that the Department should be better prepared with information on individual municipalities.

Mr Brink challenged the idea of intervening by provinces that when a municipality was placed under administration or a council was disbanded it required the approval of the Minister. He said that he had written to the Minister and the Department on the issue of the electricity crisis in Govan Mbeki but had not received response; he asked that the Department respond on the issue and highlighted that the matter was a Section 139(7) issue in reaching an agreement with Eskom.

Mr Ceza asked whether there should be a central register for all poor performing municipalities to prevent the rehiring of poor performing officials and administrators in these municipalities.

He explained that the Municipal Financial Stability Index outlined how municipalities in other countries managed finances and how it impacted on service delivery. The index found that municipalities were facing financial crisis, poor budget plans and fiscal budget. He asked about CoGTA’s role in discouraging accruals that happened because of irregular expenditure.

He said that metropolitan municipalities had a higher capital ratio, which showed that metros were capable of settling their short-term debts; he asked what the capital ratio of the City of Tshwane was during the implementation of Section 139 and what the low capital ratio on local municipalities was. This was a sign that Section 139(a) should be implemented.

Responses

Ms Williamson said that the suggestion of the central register on poor performing municipalities was a good proposal that could be used.

Mr Fosi apologised on the unsatisfactory responses on the issue of Mtubatuba Municipality. He agreed that the Minister had to approve when a municipality was placed under administration or a council disbanded as outlined in the Constitution; some interventions were declined by the Minister.

On the Makhanda municipality he explained that the appeal process was still ongoing and a follow-up would be done on the matter concerning Govan Mbeki Municipality. On the issue of poor spending, he said that Treasury looked at funded budgets which provided a baseline on whether a municipality could meet its financial obligations and was a continuous process.

On the low capital ratio, he requested time to collect further information and return to the Committee with responses.

The Chairperson said that a report was expected on the role that was played by CoGTA in the interventions and that there had to be conviction that CoGTA had fulfilled its role in line with Section 139(7) in the specific municipalities. The information of the report had to be submitted before the MEC’s were called to account to the Committee.

On Section 100 interventions, she requested an updated progress report on the North West and Limpopo interventions as well as the lessons learnt. She gave the Department two weeks to compile the report. SALGA would then be expected to compile a feedback report presentation on the Department’s report.

She thanked everyone present, including the Members, CoGTA and the parliamentary support staff.

The meeting was adjourned.          

          

     

 

    

 

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