Mopani District Municipality: engagement with Municipality; MEC; AGSA; SALGA, COGTA

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Cooperative Governance and Traditional Affairs

02 September 2020
Chairperson: Ms F Muthambi (ANC)
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Meeting Summary

Video: Portfolio Committee on Cooperative Governance and Traditional Affairs, 2 September 2020

The Portfolio Committee on Cooperative Governance and Traditional Affairs met the Department of Cooperative Governance and Traditional Affairs (COGTA), the Office of the Auditor-General (AG) and the South African Local Government Association (SALGA) on the state of the Mopani District Municipality. The parties discussed challenges faced by the municipality and how the challenges are dealt with.

Some of the challenges the municipality face includes an overreliance on consultants even in situations where only required basic skills are required; the municipality’s struggle to provide water services due to drought and aging infrastructure; and wavering audit outcomes. Some of the issues raised by the AG were a weak internal control management, and increases in unresolved irregular spending.

Members said if the municipality’s leadership, oversight, and accountability functions were robust, there might not have been increases in irregular and unresolved expenditure. Members asked if the municipality had an alternative plan which did not involve digging boreholes even in dry areas to respond to drought; asked about the cost of actions of dismissed officials involved in irregular expenditure; asked what the plans are to recover lost money; and asked about consequence management.

Meeting report

Chairperson opening remarks

The Chairperson remarked that are a number of meetings and oversight visits the Portfolio Committee led over the past three years to look at the Mopani District Municipality’s failure to provide satisfactory answers on audits which did not balance.

The Committee subsequently wrote to the Mayor, voicing dissatisfaction with the quality of response to questions. It urged the Mayor to follow up on the matter with the then Municipal Manager. The Committee remains unclear on the steps the Mayor undertook in this regard. An Acting Municipal Manager (MM) was appointed on a full-time basis, from February 2020. The district saw some slight improvements since the appointment of the MM, and obtained a qualified audit opinion after five years of adverse audit opinions. The Office of the Auditor-General attributed the improvements to strong oversight intervention. It is of concern however that financial statements are prepared through consultants, and amounts to R34 million. The most serious concern in Mopani is the provision of water services to communities. It is the reason the Special Investigating Unit (SIU) investigations are underway.

The district is a water service authority, and is responsible for ensuring a sustainable water supply and sanitation to five municipal areas under its jurisdiction. One of the district municipality’s areas of complications in the 2018/19 financial year audit report remains the shortcomings in executing this responsibility. It incurred losses in the distribution of water services to the value of R41 million. Among the consequences of the loss is the inadequate delivery of water services to communities, which in turn led to service delivery protests. It often goes hand-in-hand with the vandalism of infrastructure.

The Chairperson said the District spent up to R85 million of the Drought Relief Fund, earmarked to relieve water shortages in the drought-stricken areas. The Portfolio Committee will not be executing its oversight duties adequately if it fails to make the district take accountability for spending on the grant, especially in the context of the COVID-19 pandemic where access to water services is better.

The Limpopo Provincial Executive (LPE) was also invited to the meeting to provide a progress report on four municipalities in the province, which are subject to intervention according to Section 139 of the Constitution. The Committee knows first-hand why the municipalities need intervention, as it recently did oversights in those municipalities. In the next financial year, the Committee will be in a better position to assess the progress of all the interventions made in the underperforming municipalities. It usually requires a minimum of 12 months to reverse the many years of dysfunction. The Chairperson said the Municipal Manager will be allowed 15 minutes to reply to the outcomes of the audit reports, then the Provincial Treasury, followed by the South African Local Government Association (SALGA), and the Department of Cooperative Governance and Traditional Affairs (DCoG).

Input by Executive Mayor: Mopani District Municipality

Councillor Pule Shayi, Executive Mayor: Mopani District Municipality, said the presentation will be made by the Municipal Manager. The municipality appeared before SCOPA in October 2019, against the backdrop of the municipality being categorised as dysfunctional because it adopted a budget which was unfunded.

The observation then was the municipality also struggled to pay employee salaries. When invoices were supposed to be paid to service providers, it needed COGTA and Treasury to verify. The relationship with the Municipal Public Accounts Committee (MPAC) is not good as there is labour unrest.

The municipality will show it is at work to turn the situation around, and will show the efforts which brought labour peace, and the stability informed by the many oversight visits. These visits continue to encourage the municipality to lead programs to ensure it turns the situation around.

Input by Municipal Manager: Mopani District Municipality

Mr Quiet Kgatla, Municipal Manager: Mopani District Municipality said the municipality appeared before SCOPA during the 2018/19 financial year to provide detailed reasons for the state of the municipality. It presented the turnaround plans to improve the audit outcomes. The municipality also appeared before the COGTA Portfolio Committee twice in the 2019/20 financial year. The Auditor- General (AG), in his 2018/19 report, said strong oversight intervention will positively impact the municipality and its audit outcomes. The AG also applauded the municipality for taking the recommendations made by the SCOPA Committee seriously. It resulted in improved cooperation between management and auditors, and led to a qualified audit opinion after five years of adverse opinions. The first item of concern from the AG is the use of consultants by the municipality. It uses more consultants than usual. The municipality developed an action plan concerning the issue and used two consultants, of which none of the consultants was allowed to start and complete the work without the involvement of internal staff.

The principle of pairing was used, which involves officials responsible for the same functions as the consultants. The municipality also developed a consultancy reduction plan where a gap analysis was performed. It was done prior to the appointment of consultants to identify its own weaknesses. The same plan elaborated how the municipality will achieve skills transfer from the consultancies employed. The progress of the plan is monitored.

The municipality also faced challenges in providing water services due to drought and aging infrastructure. As an action plan, the municipality identified boreholes which were drilled and equipped to provide water to the people. There was an intervention from the Development Bank of Southern Africa (DBSA). It availed funding to assist in drilling and equipping boreholes in the Greater Letaba Local Municipality (GLM) and Greater Giyani Local Municipality (GGM) municipalities. In areas where there is no ground water, the Municipality allocated water tankers for water supply. The delay by Eskom to electrify boreholes is a challenge, but the municipality opted to do self-build to supply the boreholes.

The relationship between the municipality and Eskom has since improved. The Service Level Agreement (SLA) entered into with local municipalities also challenged the district’s finances. The locals are not paying dues to the district. In response to this, there was a revision of the Water Services Authority/Water Services Provider (WSA/WSP) and SLA’s. Administrators were appointed by the district for direct monitoring and control. The administrators will also assist with audit readiness, compliance, and ensuring the delivery of expected services. The district initiated a project for separation of water sanitation, and sewer transaction, in the local municipalities. This will enable take-over processes in the medium-term.

The other area of concern for the district municipality is the lack of project management, inadequate planning, and monitoring, by the political and administrative leadership. It resulted in duplicate payments, and payments made without the evidence work was done. It is an ongoing process to be resolved by measures taken by the municipality, such as close monitoring projects with the support of the Municipal Infrastructure Support Agent (MISA), and PMU. There were also oversight committees doing project-monitoring. The progress reports are discussed at COC for meetings.

The audit outcomes wavered in the past three financial years. In 2016/17 there was a disclaimer, in 2017/18 and adverse opinion, and in 2018/19 a qualified opinion.

Regarding the implementation of the audit action plan, in 2018/19, the municipality had 60 queries which were raised, and out of those it cleared 45, and is in the process of finalising the last 15. In the 2018/19 financial year, the cash flow statements, issues, commitments, assets issues, and payables issues, were all resolved. Water access, internal control issues, revenue from exchange transactions, and VAT issues, are in progress.

Input by the AGSA

Mr James Mogale, Manager, Auditor-General South Africa, said the MM already highlighted some of the important issues. The municipality still has a long way to go. The internal control environment remains weak. It requires more oversight intervention and a change of attitude by management and staff.

There must be a mind shift from how the municipality operated in the past. The focus must be on the internal control environment, even though the audit report reflects an improvement in the outcomes. Performance management and compliance management are on a downward trend in contrast to improvement on the financial statements. Although the municipality’s audit opinion improved, all the areas which consultants were appointed for were included as qualifications in the audit report. The consultants were not able to get these areas right because of inefficiencies on the part of the municipality to maintain adequate records, and failure to adequately implement the audit action plan. Key positions in the finance department were filled out, but the municipality continuously required the assistance of consultants. There was a lack of ownership by the municipal officials. This led to the consultants taking leading roles in the audit processes.

The balance of unresolved irregular expenditure increased to R710 million, which is the cumulative irregular expenditure the municipality had at the end of June 2019. The reported irregular expenditure was based on the financial statements and therefore, is not a true reflection of the full extent of the irregular expenditure, as the balance was qualified due to incomplete disclosure of irregular expenditure incurred. The irregular expenditure was attributed to the weak tone and attitude of leadership and failure to entrench a culture of respecting and upholding supply chain management laws and regulations. Some of the leadership failures were evident in spending the Drought Relief Grant, amounting to R85 million. It was earmarked to relieve the water shortages in drought-stricken areas. As of 30 June 2020, R57 million of the grant was spent. There was no record of the process of appointing contractors. Some payments were processed without record of work done, while some payments were processed based on directives from the former Municipal Manager’s office, without due expenditure management processes being followed. Some of the invoices were issued and paid prior to the date of appointment, and there were no processes in place to ensure the Grant was spent for its intended purpose. It was spent with limited accountability. Council needs to be firm on the administration to ensure laws are respected, and consequence management is implemented. Municipal Public Accounts Committee (MPAC) needs to be capacitated to effectively discharge its oversight functions, and there must be more focus on preventing irregular expenditure.

Mr Mogale said out of the municipality’s total revenue of R1.7 billion, R1.4 billion (85%) was obtained from grants such as the equitable share, other operational grants, and conditional grants. The revenue from the sale of water and sanitation amounted to R186.8 million, and the district did not get any portion of the revenue from the local municipalities administering the function on its behalf. The municipality spent R172 million for the year, on the purchase of bulk water. It did not get any return, and it took 905 days on average, to pay the suppliers. R978 million of the consumer debtors of R1.1 billion is impaired, meaning the chances of recovery are low, and the debt collection measures in place are ineffective. Current liabilities exceed current assets by R1 billion, and cash reserves amount to only R162 million. Debt due to Lepelle Northern Water, and Department of Water and Sanitation, for purchases of bulk water increased to about R1 billion. The interest and penalties incurred for the year on this amount amounts to R60.9 million. The payment arrangement for Lepelle was in place but it was insufficient to address historical debt.

Regarding shortcomings on maintenance of infrastructure and distribution losses, the municipality incurred R125.4 million in repairs and maintenance for 2018/19, while the carrying value of property, land and equipment was R5.6 billion. The National Treasury norm was 8%, and there was not a maintenance plan in place. Water losses amount to R41 million (19%), and the losses cannot be verified due to lack of systems and records to support the recorded amount. Water infrastructure, mostly boreholes amounting to R45.7 million, were written off or impaired. Some of the boreholes are either dry or vandalised with no plan in place to deal with the vandalism of infrastructure. A significant number of infrastructure projects run behind schedule.

Presentation by Limpopo Provincial Treasury

Mr Gavin Pratt, Head of Department: Limpopo Provincial Treasury (LPT), presented on the Municipal Financial Management Act (MFMA) compliance issues in the municipality. He said the first issue is on publishing a funded budget based on realistic anticipated revenues. This is a requirement the municipality did not meet due to a high number of trade creditors, unpaid creditors from previous years, and limited revenue resources.

The second issue is publishing information on the website, which is partially met because the Municipality’s own policies are not on the website, and the final 2020/21 Service Delivery and Budget Implementation Plan (SDBIP) was not published.

The third issue is Section 71. The Accounting Officer had to submit to Provincial Treasury, within 10 days after the end of the month, on the budget actuals of the particular month. The municipality did not submit month 12 actuals for 2019/20 on time, and did not submit the actuals for month 01 for 2020/21. The Municipality also appointed a new service provider, Munsoft, and the staff still needs training for it to submit the in-year reports. The Municipality also did not fully meet its requirement regarding preparation of budget related policies. This is because the Municipality did not have a funding and reserves policy, long-term financial planning policy, and borrowing policy.

Mr Pratt said according to Section 98 of the MFMA, an accounting officer of a municipal entity needs to take all reasonable steps to ensure all revenues are received by the entity. This also means the revenue received by any collection agency on its behalf must be reconciled on a monthly basis, and all accounts of the entity are reconciled each month. There is no evidence the municipality complied with the section.

The Financial Management Capability Maturity Model (FMCMM) from National Treasury is a self-assessment completed by the municipality. Level three says the basic controls are in place, and Level four is the required level of performance. The municipality placed itself just below Level three in most areas, which is quite lenient considering the performance of the municipality. The Limpopo Provincial Treasury was pleased with the municipality’s internal audit unit, risk management unit, audit committee, risk committee, and MPAC. The municipality did not establish the financial misconduct board in line with the municipal regulation on financial misconduct. There were no financial misconduct cases reported to the Limpopo Provincial Treasury.

Regarding support provided by the LPT to the municipality, an AG action plan was submitted by the MM, and LPT provided input to the plan. Engagement sessions were held with the municipality to monitor progress on the implementation of the action plan and the Annual Financial Statements (AFS). LPT hopes to have those financial statements within the first two weeks of September.

The extension granted by the Minister of Finance to submit the statements later, allows better opportunity to get things right before submitting to the Auditor-General (AG). The municipality also issued a draft Fixed Asset Register with supporting documents. The Limpopo Provincial Treasury (LPT) provided input into the financials, and hopes to review it within the second week of September. The LPT provided various support and set up structures within the province, such as the Provincial Municipal Standard Chart of Accounts (mSCOA) forum, Provincial Chief Financial Officer (CFO) Forum, Provincial Supply Chain Management (SCM) Forum, Provincial Certified Association Executive (CAE) and Chief Risk Officers (CRO) Forum. The LPT also conducts training on MFMA circulars, issues various guidelines, participates in municipal structures on invite, and conducts engagement sessions on budget and audit.

Regarding progress on infrastructure, support is provided by LPT, and supported by National Treasury’s G-Tech programme, which is government Technical Advisory Centre. Mopani is one of the municipalities which was provided assistance.

The LPT provided project management capacity building, including the use of the Construction Industry Development Board (CIDB) recommended forms and contracts, training on the Integrated Database Management System (IDMS), specifically with the SIPDM process, and infrastructure supply chain development issues. It also looked at the guides involved in the SIPDM process. One area of focus was the Department of Water and Sanitation processes on the technical reports and gate two. Concept and viability reports were not implemented, and there was no adequate time provided to enable due diligence during the planning stages of the projects.

The revision of the cash-crop projections to realistic projections, and allowing it to align with the project status was also considered. In stage two of this, the SCM infrastructure policies linked to the SIPDM were reviewed, and a mapping of the areas of weakness and recommendations on improving were made in the SCM processes. Regarding organisational development through infrastructure, LPT looked at change management processes, and helped the municipality design an organisational development to help it review the organisational structure. It looked at regulation 32, and did capacity building around this, and the infrastructure business processes.

Some of the challenges envisaged in the municipality include non-adherence to the SLA for the water issues, and the non-submission of signed copies of the agreements to the Department. There were also system challenges in the municipality which resulted in the inability to budget, transact, and report, accurately, and directly from the core system. Non-compliance with reporting timelines due to delays in verifying accuracy in the system is also a challenge, as well as discrepancies between municipal budget information and information published by National Treasury.

There was over-reliance on system vendors for municipal information, and an inability to achieve a fully funded budget due to high creditors’ book. The municipality did not publish most of its information timeously. It needs to address the discrepancies between the budget document and the electronic submissions to ensure a credible budget during the Special Adjustments Budget, ending 30 September. The municipality must finalise its payment arrangements and take it through Council to ensure it is factored into the LPT funding assessment. As part of its Integrated Development Plan (IDP) process plan, the municipality must include the development of all mandatory budget policies as outlined in the Municipal Budget and Reporting Regulations (MBRRs). The Municipality needs to work on an mSCOA long-term strategy. This includes reducing reliance on the system provider, and fast-tracking training officials on the new system to improve submissions with timelines.

Presentation by SALGA

Ms Ledile Sebati, Provincial Director of Operations: SALGA, Limpopo, presented on the different forms of support SALGA provided to the Mopani District Municipality in the past three financial years, with a particular focus on the Auditor-General’s outcomes. SALGA conducted detailed research on the challenges faced by Mopani Municipality, and the type of support was based on the outcomes of the particular study. As part of the outcomes of the research, SALGA established a multidisciplinary approach programme based on four pillars. It looks at institutional capacity of administration staff, political leadership, and financial management. During the 2017/18 financial year, SALGA did a diagnostic report to assist the municipality to improve its audit outcomes and to better manage its organisation. Three interns were deployed to assist the municipality with record keeping and implementation of the audit action plan, to improve the audit outcomes and financial viability of the municipality. There were also multidisciplinary engagements with the municipality, where SALGA met with the management of Mopani district to look at the audit action plan. It tried to come up with ways it could assist the municipality to discuss ways to improve its audit outcomes.

In the 2018/19 financial year, SALGA participated in the audit steering committee meetings of the municipality. It assisted the municipality to address the findings raised by the AG, and convened a structured engagement session with the Auditor-General Limpopo office. Municipalities with a disclaimer or adverse audit opinion discussed the progress and challenges encountered during the 2018/19 audit processes.

Record management training was conducted to help the municipality comply with record management standards. It had an interactive engagement session with the internal audit and risk managers of the municipality. SALGA provided assistance to the municipality in the form of a Council of Speakers, chaired by the Speaker of the Mopani District Municipality and offering various support programmes for it to improve on its Council oversight responsibilities.

There were support programmes around development and review of Council's rules of order. It was done through the ethics committee. All municipalities are represented, and Mopani is a participant, to promote functional Council meetings.

Ms Sebati said SALGA provided councillor support and welfare to ensure equitable treatment of councillors with other spheres of government. An implementation of cost containment measures was introduced to ensure costs of governance are reasonable in relation to the demands for effective service delivery. There was a study on the impact of demarcation and engagement on ward delimitations. The intention was to guide on the restructure of amalgamated municipalities. SALGA held an inclusive governance and community engagement programme, aimed at enhancing public participation modernised for the digital era. It held role definition workshops for political office bearers in different roles, to ensure councillors are well rested and well empowered to execute and discharge mandates. SALGAs other support programmes for the Mopani District Municipality, include case law development briefings, accountability and consequence management protocols, caucus management, capacity building for councillors, Municipal Public Accounts Committee (MPAC), strategic planning support, revenue, credit and debt control workshops, among others.

In the 2016/17 financial year, the Auditor-General said the office noted a number of new initiatives implemented by coordinating departments and SALGA, to improve financial performance and compliance levels in the municipalities. SALGA in the Limpopo province will not be satisfied and complacent with the support initiatives it provides, until the audit outcomes of the municipalities improve. SALGA is committed to working with all key stakeholders in providing a sufficient support base on the needs of the municipalities. It adopted a support approach to speak closely to the internal workings of municipalities. It developed early warning systems and accesses quarterly and monthly reports which come from the Municipal Manager’s office, and the CFO. SALGA analyses it with the relevant municipalities, to ensure municipalities continue with self-assessment through the different types of training and workshops provided by SALGA. It ensures monitoring and evaluation of the work is done, and also coordinating between the provincial and national support system, through the relevant departments. SALGA ensures its active participation in the quarterly reports to inform Council of the actions which must be taken, where the challenges are, and the kind of support it will offer.

Limpopo Department of Cooperative Governance and Traditional Affairs

Mr Mpho Mogale, Executive Manager: Limpopo Provincial Department of Cooperative Governance and Traditional Affairs, said it gives hope knowing the Mopani District Municipality received a qualified audit report, although there is still much to be done to get the municipality to work in a unified manner. The MISA Limpopo Provincial Manager continued with the presentation, discussing support provided to Mopani District Municipality.

Ms Regina Ravele, Limpopo Provincial Manager: Municipal Infrastructure Support Agent (MISA) said MISA has a single civil engineer, an electrical engineer, and a single town planner, who are deployed to support the district and local municipalities within the district. The support of the municipality is based on the quality of its infrastructure programs. The municipality did not perform well in the past three years, especially regarding the Municipal Infrastructure Grants. MISA signed the Memorandum of Agreement at the beginning of the 2020/21 financial year, with the municipality outlining where it will provide support. The main focus of the support is on project management within the district, and on water infrastructure projects funded through MIG. Support was given on implementation of projects relating to COVID-19 mitigation measures, which are water and sanitation projects. The municipality spent less than 90% of the MIG, and the remaining amounts were used on COVID-19 mitigation projects. MISA supported the implementation of programmes funded through Development Bank of Southern Africa (DBSA), where the Minister of COGTA mobilised resources to assist with COVID-19 projects. This included drilling boreholes, and the distribution of water tankers to Mopani.

MISA experienced budget related challenges. The municipality’s budget cannot cover the entire scope of its projects for water provision. The technical team in the municipality needs infrastructure management training because it lacks the skills to perform the required tasks. The municipality also relied on external PMU support in the past two or three years, but even with the external PMU support, there was little to no improvement. MISA proposes the municipality develop a performance measure for the service provider. It will outline the expected performance standards required from the service provider, and ensure value for money. The challenges in project implementation include 30% subcontracting within the district. It negatively impacts on project implementation. Some projects have to be paused or cancelled because of disputes between the community and the district. In the previous year, MISA developed and completed a feasibility study to analyse the misalignment of bulk and reticulation in the district. The recommendations were sent to the municipality for prioritisation of projects, to ensure projects are aligned with the source or the bulk-line in future. MISA implemented the development of municipal capacity building plans, where it collected analysis for Greater Tzaneen and Greater Giyani municipalities. It looked at capacity gaps it and the areas of focus where governance and leadership, financial management, and infrastructure delivery is needed.

MISA provided additional support in deploying civil engineers, town planners, and electrical engineers, through young graduates. In June 2020, MISA received an indication on the wastewater treatment plant in Tzaneen. It went and conducted assessments, but faced challenges because it did not receive enough information from the municipality on appointments made in the wastewater treatment plant, and the full expenditure on work which was done. The project was implemented, and different contractors were appointed to implement the project, but the wastewater treatment plant was not operational.

Mr Mogale said the SLAs, which tried managing the water transactions between the district and the locals, did not give the optimal benefit to all the parties. The district complained about local municipalities not honouring some of the commitments it made. The district and the province need to look at the entire pipeline of the financial transaction, and ensure the lawyers tighten up some of the obligations which need to be met by all the parties. DCoG will also mobilise all the stakeholders, international, and external stakeholders, to support the municipality.

Discussion

Mr G Mpumza (ANC) said the Executive Mayor and Municipal Manager’s presentations gave the impression the municipality is moving in right direction, but the presentation by the Auditor- General dampened the positive hope. One of the critical insights relates to leadership, and strategy is the deepened understanding by leadership of the audit outcome. This is particularly true regarding disclaimer and adverse outcomes, and the reputational damage it inflicts on the Mopani District Municipality. The issue is how it relates to the ability of the leadership in the area to provide leadership, governance, oversight, and an accountability function as presiding officers of the institution. The generation of section 71 interventions should equip leadership to sharpen the oversight and accountability function, to ensure its ability to steer the institution the right way. While it is good for the municipality to move from disclaimer and adverse into qualified audit reports, it is not the real objective. The real objective is a clean administration and a clean audit outcome, without findings. Mopani would have had the capability to do this if the leadership focused on those insights. Considering the Auditor-General’s office presentation on the municipality’s over-reliance on consultants for basic functions, there must be an explanation for the commission of the consultant’s company, which charged R28.8 million. The Accounting Officer and Chief Finance Officer must account for the matter because if the leadership, oversight, and accountability functions were robust, there might have not been a need for such expenditure. The municipality must also clarify an action plan to return the value of the money it lost, in the process of unnecessarily employing consultants while skilled officials are available.

He said GRAP 17, in assets of property, and plant and equipment, is incomplete. He asked if municipalities appreciate and adhere to asset management as a strategic function, and as a critical component in the fight against climate change, as well as a critical component driving economic vitality in institutions.

He asked if the finance department in the municipality had a dedicated division at a high strategic level to manage municipal assets, and to incorporate a response to climate change as part of its functions, considering the municipality faces climate issues.

He wanted to know if there is an alternative the municipality can use in the area to respond to drought, which does not involve digging boreholes even in dry areas. Considering the municipality said it experienced the challenge of boreholes needing electricity to power water pumps, he asked if this challenge will not be an extra cost to the municipality, and what the total cost of the entire expense will be. Based on the point by the Auditor-General about the liquidity ratio of the municipality not being smooth, and the cash flow being problematic, he asked if the municipality has the necessary skills in the Water and Sanitation Department to ensure Service Level Contracts entered into, are capable of recovering the cost incurred by the municipality. He wanted to know the steps taken by Treasury and COGTA in the province to assist the municipality in financial recovery planning, and financial viability.

The presentation by Ms Regina Ravele is another presentation which dampened spirits. She said MISA provided support to an external PMU, which is a service provider, while the Auditor- General said it did not see transference of skills by the consultants. He is of the view transference of skills from a service provider is a myth, as it does not make sense for someone to transfer his or her skill of trade to make a living to another person, they will be closing their own business. The municipality faces problems because it does not have its own project management unit.

Mr K Ceza (EFF) said that as long as the efficiency and effectiveness of the governance institution to end all forms of corruption is not enhanced, the municipality is heading for doom. The fact that the people in Mopani district are struggling with drinking water relates to the fact that there is no comprehensive planning in terms of ensuring that there is internal capacity in municipalities to be able to provide the necessary services needed. The ability of government to be able to fund programmes in municipalities with budgetary constraints and the division of revenue system has to be right in terms of how municipalities are given attention. Municipalities need an internal monitoring system to ensure that a quality work is done and is properly monitored.

Mr Ceza asked a question on behalf of Ms H Mkhaliphi (EFF) who was struggling with connection. She wanted to know the name of the service providers responsible for the provision of water.

Ms D Direko (ANC) said during the municipality’s appearance at SCOPA, there was a serious concern raised on the extensive use of consultants. She asked how far the municipality went in addressing the matter, and asked the number of consultants it used before SCOPA, and the number it currently has. She asked the municipality to provide a list of the consultants used and their roles and responsibilities, together with the payments made to the consultants.

She wanted clarification and a breakdown of what happened to the COVID-19 Relief Fund allocated to the municipality, and asked if there is any form of corruption or duplication of payments, or payments without evidence of work done, and if the money was used for its intended purpose. A newspaper article said there was a report the municipality failed to pay back R120 million to National Treasury. This was supposedly money the municipality did not use. She asked if the contents of the article are true, and if the contents of the article are true, she wanted to know the reasons for not paying back the money to National Treasury.

She asked why the municipality did not use the money to address the challenges the municipality has, and if it indeed did not use the money as the article suggested.  She asked about the municipality’s revenue collection on a monthly basis, its average per year, and the percentage it used on its budget. She wanted to know this because most of the municipalities adopt unfunded and unrealistic budgets, because it uses a higher percentage for collection, which it usually does not reach. The municipality has about four officials sent for disciplinary procedures, with one dismissed. She asked about the cost of the actions of the dismissed official to the municipality, and if there are any other processes going to unfold beyond the dismissal to recover the money lost.

Lastly, she asked for a list of the COVID-19 PPE suppliers used by the municipality, and if the equipment is for the municipal staff or for the greater community.

Mr B Hadebe (ANC) said the municipality must be appraised for finally attaining a qualified audit opinion, even though it has not reached the promised land, it is destined to arrive there if things continue in the manner in which it is.

He said he enjoyed the presentation from the Municipal Manager, until the Auditor-General unleashed truth to power and all the excitement went down the drain. While it is understandable municipalities are at liberty to use consultants from time to time, the AG raised an important point. Municipal officials must take a responsibility for the municipality’s finances. He asked how the Municipal Manager thinks it will be possible for the consultants to transfer skills to the officials who are not even involved when the municipality deals with real auditing. He quoted the Auditor-General when he said there is a need for a municipal council to be firm on administration, and ensure enforcement of compliance with the law and all municipal legislation.

He asked if this means it is the administration in charge, and the Municipal Councils are not able, nor willing, to hold administration accountable. He also wanted to understand the previous role of the current Municipal Manager’s visits in relation to the matter. It is very disappointing to hear the AG saying the officials in the financial department lack the basic skills to run state affairs. He asked how those officials are expected to deal with complex issues. This is a major cause for concern. He asked if the municipality conducted a serious audit in the finance department, and asked for it to be done immediately, if it was not done. The consultants need to be given credit for the qualified audit, and not the municipality, because the consultants have been doing the work.

The Chairperson wanted to know the details of the disciplinary hearings held against the officials implicated in the irregular spending of R85 million relief grants. He asked the Executive Mayor about the processes Council implemented on the investigative report, since it started in 2020. She asked about the incentive given to Eskom for assisting municipalities with the electrification of homes. The district municipality is among the top 10 in the country accounting for bulk penalties relating to the debt owed to Eskom.

Mr Hadebe asked the Accounting Officer about the details of the contingent liabilities of the various claims instituted against the municipality, amounting to the value of R387.4 million, as of 30 June 2020.

The Chairperson asked who is to be held accountable for the R176.6 million contingent liability with the Department of Water and Sanitation. She asked for comments from the MM or the Provincial Speaker on the fairness of demanding the Councillors repay the overpayments incurred during the implementation of remuneration for Councillors. It was the municipality’s mistake to make those payments. The councillors did not pay it. She asked why the municipality did not ask the officials who made the payments to the councillors to pay the money back.

The Chairperson asked the chairperson of the MPAC to explain, and give a breakdown, of the irregular expenditure amounts, to state why nothing was done to address the issue, and why the municipality takes too long to repay its debts.

Responses

The Municipal Manager replied to questions at this point.

Mr Kgatla said the municipality is working towards a solution to improve its audit outcomes. The consultants employed by the municipality do not do the job of the officials. The consultants come in to assist with quality checks and making sure the registers from its own officials balance those in the consultants’ financial systems. The consultants’ job is to ensure numbers which come from the locals and those in the financial systems are aligned.

Municipality management acknowledged the overuse of consultants. It came up with a reduction plan. In the reduction plan, the first acknowledgement is the municipality cannot get rid of all the consultants as quickly as it wants to, and decided to do it gradually. Some of the companies still assist in more important ways, especially the Project Management Unit. The consultant’s reduction plan will be phasing out consultants as time proceeds. There are a lot of plans in action, for example, in the human resources department, rearrangements own up to the municipality having to do things on its own.

GRAP 17 has a dedicated division, but the biggest challenge is mainly around the technicalities which come with the GRAP 17 item itself. Consultants are brought in for very specific reasons, to give an independent technical view regarding if the disclosures, and all packages, are GRAP 17 compliant.

Regarding cost-effectiveness on electricity, COGTA worked through the MEC in the province. The municipality had an honest sitting with Eskom, where Eskom said, as a rural district mostly dependent on boreholes for communities to have water, it must consider a self-built option to get turn around quicker.

Eskom offered the municipality its own professionals, dedicated to the municipality on a daily basis.

The comment on overreliance on grants is indeed correct. A lot of money which is not grants is sitting with local municipalities. It is an area the municipality is working to improve and started with re-evaluating its technical services on staffing. So far the municipality is happy to be able to do items on its own. There are the issues of machinery, public participation, and other issues which would allow the municipality to be at par with its locals regarding transition, and also consumers, so there is no confusion. It is a programme mouncil already resolved on. There is a process in place to get it to happen. The municipality believes there is a lot of money in this area. As soon as the municipality works on it, the issue of overreliance on grants will be history.

Regarding Lepelle Northern Water, the balance owed to it was reduced by more than 30%. It is a total of R160 million. It goes a long way in allowing the municipality better solvency. Equally, the Department of Water and Sanitation (DWS) gave an indication that if the municipality comes forward and manages to get proper consultation and a proper engagement, the money will be reduced. There is also a repayment plan in which DWS agreed that if the repayment plan is adhered to, there could be assistance. On the contingent liability, the MPAC and municipality is guided by the Audit Committee. It is engaging its third parties at litigation level to see how to negotiate a settlement.

Regarding the R85 million breakdown, municipality management sees itself in the middle of many consequences and is going to special Council at the end of September with another report on consequence management led by who had a number of findings around this matter of the R85 million. The report went to Council. There is work which was given to the Accounting Officer, as well as the Office of the Municipal Manager. The Drought Relief was audited, and there were a lot of findings which informed the status presented. Some officials resigned, some were dismissed, and some subject to disciplinary processes. Those officials are answering for the R85 million.  Mr Kgatla said is unsure of the issue regarding the newspaper article and the municipality owing R120 million to National Treasury.

The Chairperson allowed Ms Direko to clarify her question.

Ms Direko clarified the newspaper article said the municipality failed to pay back R120 million to National Treasury because the municipality did not use the money.

Mr Kgatla said the municipality is not aware of the media article, and will do a follow up on the issue. With regards to the revenue collected, he said the revenue from water is R157 million per annum, and sanitation is R80.4 million per annum. The municipality will provide a month-to-month detailed report to answer the question.

Regarding the revenue percentage on the whole budget, the presentation by the AG is correct. The challenges the municipality has are on revenue collection, but there are measures put in place to deal with this.

The Chairperson said Mr Kgatla must reply directly to the questions asked by the Members of the Portfolio Committee, and explain why the municipality failed to collect more revenue.

Mr Kgatla said revenue collection is done through an SLA with the local municipalities. There is billing and collection at this level. It was clarified with the SLA how collections are done and the collected revenue is shared with the municipality. Unfortunately, this particular clause was not complied with despite regular engagements with the SLA. The municipality communicated to the locals, because the arrangements were halted, the municipality will venture into a process of taking over the function, and do the work on its own. The main reason for not collecting is because the system of collection is housed at local municipalities, and it was not transferring the money because it argued it is suffering losses from the water function. The municipality did not think about how it will recover the money lost from conducting investigations during the disciplinary committee hearings. It will take the question as advice. The municipality only did consequence management, instead of collecting the money from the officials.

The Chairperson asked Mr Kgatla if he can provide details of the consequence management conducted, and who the officials facing disciplinary actions are.

Mr Kgatla said he will ask the previous accounting officer about the officials. There is work the accounting officer is doing with the previous MM to be able to establish how much of the municipality’s losses it can recover with the assistance of the legal section.

The Chairperson asked if it is only the MM with whom it does consequence management, and if Mr Kgatla was also investigated as the former CFO. She asked Mr Kgatla to speak about the current financial year, the increase of irregular expenditure to R200 million, and how it happened, as it happened under the new municipal management in the municipality.

Mr Kgatla replied to the question about the COVID-19 personal protective equipment (PPE). He said the municipality will put together a list of beneficiaries and suppliers, as well as the SCM process followed. Regarding hand sanitisers and if the communities also benefitted from it, he said communities did benefit through the traditional offices and through the councillors. The municipality will also provide a full list of the Water Service Providers it used in the municipality, with a clear indication of the service provided, and the location.

On service providers not always doing quality work and there being no monitoring in the district municipality, the municipality will tighten its internal arrangement so the problem will not persist.

As for the municipality having no leadership, the municipality continues to be led by Council. It is not likely Council will allow officials to run the municipality. At Council level there are oversight structures including the MPAC, the audit committees, and portfolio committees.

The Chairperson asked why the AG would say there is no oversight, considering what Mr Kgatla said about the municipality having ample time to reply, as the current meeting is post-audit. She said he should rather say it is not his scope, and let the Executive Mayor speak on the issue. The fact the Municipal Manager did not properly conduct consequence management, prompts one to agree with the AG. With the amount of unauthorised and irregular expenditure, it shows Council has no autonomy in the municipality.

Mr Hadebe said having structures does not mean anything if it is not effective, which is what the AG is alluding to. It even said MPAC needs to be empowered, meaning even though the municipality has an MPAC, it is not capacitated enough to do what it is supposed to do, even though it has portfolio committees. It is not doing what it is supposed to do. The presenter must provide the real status quo of the municipality, instead of being defensive.

Response by MPAC

Cllr Charlotte Nkhwashu, chairperson: Mopani MPAC, said history is at play in the case of Mopani District Municipality. Irregular expenditure increasing, instead of decreasing is a matter of non-disclosure which is being addressed. Evidence of this will be displayed in the report to be tabled in Council. It looks at MPACs interrogating quarterly reports with the intention of detecting irregular expenditure in advance, addressing it before the end of the financial year, and choosing to be proactive instead of reactive, to help reduce the number of irregular expenditures.

Regarding miscalculation of payments of Councillors and officials, MPAC already made a recommendation on the finding. It was served to Council. Consequence management was recommended for officials responsible. As far as project monitoring is concerned, MPAC is also working hand-in-glove with chairpersons of portfolio committees. The realisation is findings on projects are a major issue. It also worked hand-in-glove with chairpersons through the Chair of Chairs. The municipality took all the projects within the municipality, divided it through the portfolio committees, monitored the projects through each of the portfolio committees, and then in each and every meeting it gives reports. The combined report serves in Council on a quarterly basis to ensure monitoring on projects.

The Chairperson said she has not spoken about the R710 million unresolved irregular expenditure, and asked what MPAC has done to recover the money. As much as looking into the future is important, history must be resolved as well.

Ms Nkhwashu said there is an issue wherein the irregular expenditures are not disclosed. MPAC has the list of all those irregular expenditures, and the amounts indicated. MPAC will look at it and resolve on those findings. There is a problem with disclosure, and it is being solved as documents are received on request.

The Chairperson asked about consequence management recommendations made to Council in relation to the officials involved.

Ms Nkhwashu said a lot was recommended, for example with irregular expenditures, MPAC recommended those responsible must take responsibility and bring back the money.

The Chairperson asked if the municipality can share the reports it sent to Council.

Ms Nkhwashu said she unfortunately does not have all reports of MPAC. The recommendations addresses every issue raised by the Chairperson, and if the Portfolio Committee reads all the reports, it will realise all the issues were addressed by the MPAC.

Mr Hadebe asked about the number of reports and recommendations sent by the MPAC to Council. He asked about the number of recommendations implemented, and the amount of money recovered. He wanted to know the number of irregular expenditures reports received, and dates of the meetings.

Mr Ceza wanted to know what happens to service providers who fail to finish work in accordance with the water provisions, the investigations made by MPAC on those, and the consequences. He also asked if those companies are still within the database of MPAC and why, if this is the case.

Ms Direko wanted to know how long Ms Nkhwashu was the chairperson of MPAC, and if there was any positive story to tell since she started in her position. She also asked if the recommendations suggested to Council were implemented, and if not, why. If it was implemented, she asked how many were implemented.

Ms Nkhwashu said she is chairperson of the MPAC for two financial years.

The Chairperson asked when exactly she started.

Ms Nkhwashu said she did not have the exact date, but it was the first Council, immediately after the reshuffle.

The Chairperson asked if it was after the elections in 2019.

Ms Nkhwashu replied that it was 7 June 2019. Before she became the chairperson of MPAC, she was a Member, meaning she was aware of the history. The perfect thing which happened since she is chairperson is that MPAC is moving. It was once reported that MPAC reports do not serve Council. Right now, there is cooperation between the MPAC and management. The MPAC is able to get documents and is able to table reports in Council. Of the previous reports tabled, the MPAC had 11 recommendations which were implemented, and seven were not implemented. This means, in the previous report, there are 16 recommendations.

The Chairperson asked how many reports were tabled and implemented since the beginning of Ms Nkhwashu’s term as chairperson of the MPAC.

Ms Nkhwashu said four reports. The first report had 16 recommendations, nine of those implemented, and seven not implemented. The second report had 15 recommendations, ten implemented, and five not implemented. The third report had 11 recommendations, five implemented, and six not implemented. The fourth one has 19 recommendations, and is still in progress, because it is the annual financial reports.

The Chairperson asked how much was recovered from the four.

Ms Nkhwashu said she has not received the correct amount of money recovered.

The Chairperson asked what she meant when she said the reports are implemented, if there was no money recovered.

Ms Nkhwashu said there is money recovered, which is why she said she is not sure of the actual amount.

The Chairperson requested the reports be sent to the Portfolio Committee by next Tuesday, 7 September 2020. She asked how the MPAC dealt with the current irregular expenditure of R200 million.

Ms Nkhwashu said it is still dealing with the report, and she cannot come up with recommendations on her own.

The Chairperson asked for a status of the report, listing exactly what it deals with, and asked what constitutes the R200 million irregular expenditure.

Ms Nkhwashu said in some cases there is non-compliance with supply chain regulations. Most of it is from previous financial years, and during this time, the municipality’s current finances show progress in the first, second, and third quarter reports. Some of the irregular expenditures are from regulation 32 project employment, where there was non-adherence with supply chain management recognition.

The Chairperson said Ms Nkhwashu only spoke to the AGs reported R710 million unresolved illegal expenditure, and not about the current R200 million. The Chairperson said the Portfolio Committee needs a breakdown of the R200 million.

Ms Nkhwashu said that will be done.

Mr Hadebe suggested the the MPAC sends the report on Thursday, 3 September 2020, instead of the following Tuesday.

The Chairperson agreed and moved on to a response by the Speaker of Council.

Response by the Speaker of Council

Mr Wireless Sedibeng, Speaker of Council: Mopani District Municipality, said the time the Portfolio Committee visited Mopani, some of the problems already happened. Council tried its level best to ensure the MPAC, and other section 79 committees, do oversight and monitoring. It utilised all the portfolio committees. Mopani decided to practice the new governance model where there is a separation of functions, and each committee is responsible for its own programmes. Because of the reports from the MPAC and the audit committe, Council took a decision to appoint investigators to deal with all issues mentioned the meeting. In the last Council, July 2020, Council received detailed reports from the MPAC, audit committee, and from the investigation team. In the report, even officials responsible for not doing work correctly were identified in each and every case indicated, even in irregularity, the people responsible were identified. By the end of this month, the MM said there will be a special Council to receive another progress report. It will deal with consequence management to see what to do with persons who did wrong. Some of the Councillors who were overpaid made arrangements, and some have already started paying. The municipality and Council need to make sure the oversight committees, including the MPAC, doed its work. There is a lot of wasting of money in the municipality, and the role of the Council now is to see through the reduction of all the debts and irregular expenditures, so that everything is in order.

The Chairperson asked why there is no municipal disciplinary board in place in the municipality thus far.

Mr Sedibeng said the municipality will try its level best to ensure it is established as soon as possible. 

The Chairperson said some of the matters reported by MPAC are supposed to be handled by a municipal disciplinary board. She wanted to understand what the municipality does with disciplinary matters, because the municipality does not have a board to deal with those matters.

Ms Direko said on the municipality’s report, it only shows there are four officials sent for disciplinary processes. She asked if this means it is only those four people who are responsible for wasteful, unauthorised, and irregular expenditure in the municipality.

Mr Sedibeng said, according to the reports, it was those four. He hopes the rest will be revealed by the end of September. The four played an important part in most of the issues, but some will be reported by the end of September.

Mr Hadebe asked for clarity on the overpayment of Councillors.

Mr Sedibeng said he hoped by the previous month, those persons were given letters to sign to make an arrangement for repayment, and by now started paying. He himself also owed up to R8 000 and it will be deducted.

Mr Hadebe said he asked the question because when he was a Councillor in the City of Cape Town, he signed for the amount he would be paid, and knew exactly how much would go into his account. Above this, he signed an affirmation and an oath to be faithful to the Republic, and the Code of Conduct of Councillors prohibits behaviour which puts the public in disrepute. He asked why the Councillors use money which they are not supposed to receive in the first place. It should not be the case where Councillors are forced to sign letters to return money it was not supposed to use in the first place.

Mr Sedibeng said officials allocated the money to the Councillors, and told them it was salaries. Later Councillors were informed the money was not properly calculated.

The Chairperson said it is commendable there seems to be commitment from the Councillors to repay the money, and it will be followed up on at the end of September. The Speaker of Council needs to explain consequence management taken against those who are responsible for wasted expenditure.

Mr I Groenewald (FF+) sympathised with Mr Sedibeng and the Councillors, because he also experienced a similar problem in the past. He said government approved a four percent salary increase for all Councillors to be backdated from July 2019, and asked if the money backdated is being dumped in the outstanding amounts. He wanted to know because during the time he was a Councillor, when there was an increase, the backdated amount would go off on the money owed to Council.

Mr Sedibeng said these issues are not from the current year. The four percent increase was never touched, but Councillors are committed to paying money back.

Mr Groenewald said the four percent increase is backdated, so there will be a lump sum of R20 000 or R30 000. He asked if it goes to the outstanding amount, or if it is taken as a raise in pay. It would be proper for a municipality to rather get the increased money to be backdated, and let it go off as a debit on the outstanding amounts.

Mr Sedibeng said Councillors never received the four percent increase.

Response by Executive Mayor

Mr Shayi said he was sworn in as the Executive Mayor on the same day as the MPAC Chairperson and from this day, Council never missed any of the MPAC reports. It endorsed and made efforts to ensure it deals with implementation. Council made a commitment, given history, that there would never be any MPAC report which does not serve at the level of Council. Hence the report given by the Chairperson of the MPAC outlining all four presented reports were implemented.

The limitation is around the extent to which the reports and recommendations from MPAC were implemented. Council is still committed to implementing it, including the last report from MPAC which brought issues from the last three years still being dealt with to the fore. It should be able to ground Council to ensure the systems hold.

Regarding consequence management, the majority of those cases arise from the MPAC report. Council can commit there will not be anything left unattended because everything which happened in the past has to be undone.

Part of the issues raised by the AG were payments made as per the directive from the previous Municipal Manager. The municipality managed to adopt the action plan through stakeholder engagement, through the IDP processes, and resolutions of Council. This speaks to the limitation at the level of administration to show it is able to deposit the documents to the relevant authorities.

From a strategic and leadership point of view, the municipality needs to do an assessment on the key issues negatively impacting the municipality. The issues of Lepelle, and DWS, are key. It needs to drive through political commitment in this space. The municipality does not have a good relationship with Lepelle. It is only now when there is a board that there were three or four meetings where the municipality managed to agitate for its view on how to restructure the repayment agreement. This on its own speaks to the issue of a municipality operating as a growing concern. It is running through an unfunded budget, which is also one of the areas the AG expressed concern about. The Lepelle, DWS, and Mopani dichotomy misses the alignment of the plans and the work which Council is trying to do. It is through Council resolution, through the Inter-Government Relations Policy (IGR), that the Municipality begun to pilot with Ba-Phalaborwa. When addressing some of the issues in the medium-term, the processes can be taken over at this level and clear some of the historical challenges. These are part of the targeted approach from a strategic point of view. If the municipality is able to make a successful breakthrough, it will undermine the issues which relate to insolvency and many others.

Mr Shayi said it might appear as though the tail is wagging the dog, but this is not the case. It is Council giving direction to the approaches taken. He asked the municipality be allowed to submit the list of all consultants, the roles and responsibilities, the breakdown of the R85 million, the duplicate payments, and the overpayments which led to the suspension or dismissal of some of the officials, to the Portfolio Committee. The municipality will like to submit the breakdown of the beneficiaries of the PPE, sanitisers, and the implementation of the report the MPAC submitted to Council, as well.

Response by SALGA

Ms Sebati said Provincial Treasury engaged in a capacity building programme with the MPAC. It took the MPAC through the consequence management protocols developed by SALGA, which includes the establishment of disciplinary boards, and the best it can do is ensure it will be able to administer it. SALGA has a list of (IPC trainers with vast experience in municipal operations. This means it is capacitated by people who are well vested with municipal operations, for example, previous Municipal Managers, previous Mayors, and previous CFOs. The trainers took the MPACs through training on consequence management and best practices. The workshop happened at the Mopani District.

Response by Provincial Treasury

Mr Pratt said Provincial Treasury agrees the MPAC must take more responsibility, especially when it comes to irregular and fruitless expenditure. Provincial Treasury has provided training to all municipalities, and MPACs, to try and facilitate the transactions.

Response by AGSA

Ms Molatelo Magongwa, Deputy Business Executive, AGSA, said the office listened to all the comments made by the municipality. At the time of the audit, there were issues around the MPACs submitted reports not happening in the expected manner. When it goes back to the municipality it will interrogate those reports and come back and report to the Committee about the implementation of the MPAC reports.

Response by Limpopo MEC: COGTA

Mr Rodgers Makamu, MEC: Limpopo Department of Cooperative Governance, Human Settlements and Traditional Affairs, said listening to the Municipal Manager’s presentation is encouraging, while at the same time listening to the Auditor-General is distressing. The MEC said,if he were to make a presentation from what was said in the meeting about Mopani Municipality, he would take a positive stance. Looking at how far the Municipality has come and what has happened in the past few years, it shows its work is done with the support it received. There are issues in the Mopani District and resolutions which were implemented. The provincial government is not surprised to see the municipality improving its audit outcomes. It can still improve from the qualified audit opinion it now has. The province took on the issue of minimising the use consultants. Part of the work the province did in supporting the Municipal Infrastructure Grant (MIG), was holding monthly meetings with the municipality to ensure tracking its progress. There are three measures implemented regarding trying to improve the provision of water services to the people.

The short-term measure is trucks will be clustered within villages to deliver water where there is not a single drop of water. The medium-term measure is boreholes. The long-term measure is to collect water from other sources. There are also a number of issues regarding capacity building. Before lockdown began, provincial COGTA ran programmes to capacitate all the Speakers in the province, including Mopani. Capacity building was also done for all the chairpersons of the MPACs. Mopani was included too. Provincial COGTA came up with regulations on how it needs to hire researchers, because it needs people who are skilled to continue. It is an improvement for the municipality to take its reports to Council. The concern now will be more on the quality of the reports taken to Council.

Concluding remarks

The Chairperson agreed with the MEC. The municipality has always been cooperative in submitting reports. It took responsibility for the miscommunication which happened before the meeting. She apologised to the MEC and said it was not fault that he was made to look unprepared for the meeting. She was referring to the fact the MEC could not make a presentation, due to miscommunication in the invitation to the meeting. He agreed to submit his observations to the Committee.

She asked the MEC to provide a date in which he would come back to the Portfolio Committee to make a presentation on Section 139, matters surrounding Polokwane local municipality, and on all amalgamated municipalities post 2016. There are serious challenges faced by municipalities.

MEC Makamu agreed and said in a short space of time, the 12 month period of the intervention in Mogalakwena will be complete. If the Committee can give guidance on some of the things happening there, it will assist the province.

The meeting was adjourned 

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