Consequence management against implicated municipalities: Interaction with Eastern Cape COGTA MEC

Public Accounts (SCOPA)

10 November 2020
Chairperson: Mr M Hlengwa (IFP)
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Meeting Summary

Video: Standing Committee on Public Accounts    Part 2 Video

The Committee scheduled this virtual meeting to hear from the MEC for Cooperative Governance and Traditional Affairs in the Eastern Cape and his team on the status of investigations against municipalities in the province and what action has been taken against them.

The meeting was however suspended after it was discovered that the document that was being presented was not the same as the one sent to the Committee prior to the meeting. Members also heard that the MEC did not have sight of the document that was presented by the official.

The Committee took exception to this saying and stressed that that this must never happen again.

The Committee asked for a correct and mandated presentation be sent to it by the end of business day that day and committed to finding time in its very busy schedule to reschedule the meeting in advance of its oversight visit to the Eastern Cape.

Meeting report

Opening Remarks

The Chairperson welcomed the members of SCOPA as it waited for the Eastern Cape Department Cooperative Governance and Traditional Affairs (EC-COGTA) for a briefing and update on its investigations into the municipalities as part of SCOPAs focus areas. It had already met with Kwa Zulu-Natal.

The Chairperson welcomed the Member of the Executive Council (MEC) for COGTA in the Eastern Cape.


The Chairperson expressed SCOPAs appreciation for the MECs understanding following the confusion and clash of dates owing to the amended Parliamentary programme, which changed the previous date of this meeting. He acknowledged receipt of an apology from the Minister of COGTA who could not attend the meeting. He then asked the Committee Secretary to enter any other apologies into the record.

Since the Committee has a very full day, and the agenda was straight forward, he asked that the MEC take the Committee through the presentations, before the Committee poses questions.

Briefing by Eastern Cape, MEC of Cooperative Governance and Traditional Affairs to establish consequence management against municipalities with investigations

Mr Xolile Nqatha, MEC, EC-COGTA, began by thanking the Committee for the opportunity and introduced his delegation. He would ask the HOD to make the presentation, except to make a few comments, which he would do himself.

Mr Nqatha said the opportunity to present on the investigations conducted is an important one. Investigations were conducted in a particular context, as seen in the State Capture Commission. Investigations were politicised and in certain cases, it has been difficult to implement them effectively, given the factionalisation of various councils and depending on the factions which one belongs to in the various councils. There has been push-back and deliberate misinterpretation of section 106 of the Municipal Systems Act, with some councils believing that the MEC must first get permission from them before investigating. The law provides that if the MEC is of the view that something wrong has happened, the MEC must investigate, not may investigate. It would be tabling its report in the context of reports which were completed and tabled in various councils. Because of its appreciation of the context, its approach has sought to ensure that it is assisting councils by helping them develop action plans to implement the recommendations.

The MEC asked Mr Fani to display the presentation. He asked if the Committee would allow Mr Fani to present.

The Chairperson approved this.

Mr Andile Fani, Chief of Staff, Office of the MEC, said he needed to be given access to share his screen.

Access was granted by the Committee Secretary.


Mr Fani highlighted that the Eastern Cape has 39 municipalities categorised as 2 Metropolitans, 6 Districts (DMs) and 31 local municipalities (LMs).

The report relates to municipalities identified by SCOPA including Buffalo City Metropolitan Municipality (BCMM) and Nelson Mandela Bay Municipality (NMBM), 6 Districts (Alfred Nzo, OR Tambo, Joe Gqabi, Chris Hani, Amathole) and 31 local municipalities. This report focuses on consequence management measures implemented pursuant to investigations conducted in accordance with good governance pillar of back to basics and prescripts of section 106(1) of Municipal Systems Act 32 of 2000.

S 106(1)(b) refers to those dismissed for misconduct and although it did not manage to receive an update from all of the listed municipalities, it continues to engage with affected municipalities and law enforcement agencies, with a view to be updated in due course.

The remainder of the presentation is a picture provided by law enforcement agencies, for the consideration of the Committee.


Good governance in municipalities depends on the effective management and administrative competence as well as the collective will of Municipal Councils to work for progressive change.

The challenge facing some of our Municipal Councils is failure to provide quality and sustainable services within the broader context of growth and development. In this regard, the Department is calling on all Councillors as public representatives, to demonstrate unwavering commitment to fight corruption and promote safe and healthy environments, in accordance with the Constitution and relevant legislation.

The coalition government in Nelson Mandela faces challenges in taking council resolutions. Due to diversity of political affiliations, council deadlock in taking resolutions has a negative impact on the delivery of basic services.

Although, at the end of the 2018/19 financial year all the municipalities within the Eastern Cape had established functional Audit Committees and Internal Audit units, internal audit governance is still a challenge in the province.

Only two municipalities in the province failed to submit their Annual Financial Statements to the Auditor General (AG) on time during the 2017/18 financial year, namely; Sakhisizwe and Sundays River Valley Local Municipalities. There are also 14 delegated municipalities out of 36 that have not established Disciplinary Boards.

The Amathole District and Local Municipalities are the most challenged with no municipality having been established to date. Common reasons for the non-establishment of Disciplinary Boards are that items for the establishment of Disciplinary Boards are yet to be taken to council and in instances where the item has been presented to Council, the council resolution confirming the establishment of boards have not been submitted by municipalities to Provincial Treasury.


To establish whether consequence management has been implemented in relation to the investigation findings.

EC-COGTA municipality investigations

He outlined the municipal investigations in a table according to allegations made, investigation status, action taken by the MEC. The investigations are being undertaken in phases.

In the Amathole District Municipality, phase one was completed before the lockdown, and phase two is going to be finalised before early December as there is some information still outstanding. It was particularly difficult for the KPMG investigators to gain access so much so that the MEC had to gazette that investigations were taking place and is preparing subpoenas. Buffalo City is less troubling.

Concerning Dr Beyers Naude LM, the Department does not have records as to whether these municipalities were investigated. However, law enforcement agencies and the municipality has been alerted for an update in this regard.

At this point in time, EC-COGTA has not received a response from some of the municipalities indicated by SCOPA, however it alerted them with specific requests as to whether certain things were investigated.

The MEC highlighted the matter at Engcobo LM where there was an investigation in relation to MIG projects, construction of 6 access roads and infrastructure. The investigation was tabled by the MEC to the Council and community for implementation and referral to SAPS.

At this point, the presentation disappeared.

The Chairperson asked Mr Fani to re-share the presentation himself

Mr Fani was unable to as the MEC was still sharing.

The Chairperson asked the Committee Secretary to assist.

Mr B Hadebe (ANC) pointed out that the latest presentation which was received, was titled 8 October and was not the same presentation that was being presented.

The Chairperson said that the Committee Secretary was trying to establish which presentation was being used.

The Committee Secretary asked if Mr Fani was presenting from the set of slides titled 12 November or 8 October.

Mr Fani replied that he was presenting from a document dated 12 November.

The Chairperson said that the 12 November presentation which the Committee has is not the one which Mr Fani was presenting, which presented a difficulty. He asked that the HOD continue with the presentation as it is in front of him and indicate to members which slide, he is on in order not to waste time.

Mr Fani said he would proceed in talking to the slide which mentions Nelson Mandela Bay Metro and Ngqushwa LM. He searched for the slide number.

The Chairperson interjected, saying that it was slide number 6 and item number 19.

Mr Fani agreed.

The Chairperson asked Mr Fani to proceed.

Mr Fani then became inaudible to the Committee. [32:30-33:30]

The MEC sought clarity on what date is on the presentation which the Committee has.

The Chairperson responded that it was titled 12 November and that Mr Fani was on slide 6 which begins with Nelson Mandela Bay Metro, Ngqushwa LM and OR Tambo DM.

The MEC said he did not have that presentation.

Mr Fani returned, asking if he could continue.

The MEC said he should continue as he does not have a presentation dated 12 November.

Mr Fani said that the Department does not have any information on whether the Nelson Mandela Bay Metro, Ngqushwa LM and OR Tambo DM were investigated.

The Port Saint John’s (PSJ) LM investigation was concluded by KPMG, through National Treasury. The presentation continued to recount the various stages of investigations at the remaining municipalities.

Mr Fani said that this takes care of the slides in front of him.

The Chairperson asked whether he was going to present on slide 7.

There was silence.

The Chairperson asked for the MEC to use a five-minute break to sort out the glitches as it was becoming increasingly difficult to follow and impeding the structure of the meeting. He asked that the members all return at 10:10am.

After the recess, the MEC said that the 13 October, 39-page presentation which he initially loaded from his side is a presentation which he has seen, in preparation for the previous meeting date. His team told him that the 12 November presentation is one which a few changes have been made to, however, he did not know what changes those were. He would be guided by the Committee as to whether to proceed with the one he saw and approved. He apologised and asked for guidance. The transition has resulted in this confusion.

The Chairperson said that it is an undesirable confusion and that it did not sit well that a presentation has come before SCOPA when even the MEC himself has not had sight of it. That on its own raises very serious and fundamental questions, in the Committee’s view. He asked the Committee how they should proceed. It was his understanding that the 39-page presentation was more substantive and he was pleasantly surprised to have received what was a largely reduced presentation, however he thought that there were substantive reasons for that. He asked the members for their contributions.

Mr S Somyo (ANC) said that the MEC is coming with a caveat in saying that he has not seen the other reports and therefore he cannot be accountable for what he has not seen. He suggested that the Committee proceed with what he has seen, and therefore mandates his officials to present.

The Chairperson noted that suggestion and asked the MEC to present the 39-page presentation.

Mr Hadebe asked if SCOPA has the 39-page presentation.

The Chairperson responded that the Committee should have it.

Mr Hadebe said he only had a 10-page and a 12-page presentation.

The Chairperson said that the Committee should have it, as he searched for it.

Mr Hadebe said that if other members have the presentation then the Committee should proceed.

The Chairperson ask that the 39-page presentation be sent to the Committee, just to be safe and the Committee will hear it. If members feel there are issues, they will take it from there. He stressed that it cannot be the case that presentations are made which he has not seen himself. Notwithstanding the transition he spoke of, this understanding must be made to officials as SCOPA does not function in the way of traffic cops, who may jump out of the bushes. Transparency is key in ensuring efficiency and that everyone is on the same page. He asked that he spend time with his team, to iron out inefficiencies.

Mr R Lees (DA) said that he was in the same position as Mr Hadebe. He only received two presentations.

The Chairperson said that as far as he recalled, there was a 39-page document, which as he searched for it, appeared to have been recalled from his system. He had assumed that there were substantive reasons for the shorter presentation. This complicates matters as the reduced matter is very difficult.  He felt that the Committee would probably have to postpone.

Mr Somyo said that the MEC knows that there are a number of presentations, and if the one which he sent, is the one before hm, he should present on that one.

Mr Hadebe said that 39 and 12 is a huge difference, it is more than half. He said that the Committee must be given reasonable time to interact with the document in order to conduct relevant oversight. If the majority of colleagues are experiencing the same challenge as him, not having seen the presentation, he did not think it was prudent to continue. If other colleagues did have the presentation, then they could agree.

The Chairperson said that SCOPA is under time constraints, insofar as its programme is concerned, and noted that there was an oversight visit to the Eastern Cape scheduled on the basis of this report on the investigations. Time must not be lost; therefore, it will have to try and adjust the programme to see where this presentation can be accommodated. Both points are valid, however, the fact that the MEC has one presentation and that there are another two presentations, raises concerns. In preparation for the work ahead, he proposed that the meeting be postponed and the EC-COGTA go back and get its house in order. He would hate to put colleagues in a position in an ignorant position and ask questions for the sake of it, without having done the necessary work. He had prepped on the basis of the new 10-page presentation. Members would communicate to find an alternative suitable date. Even if the meeting proceeds now, the quality of responses from officials may not be satisfactory based on the information the officials have and what the MEC has. He proposed postponement.

Mr Hadebe and Ms B Van Minnen (DA) concurred with the Chairperson’s proposal.

The Chairperson thanked members and said that his office and the MECs office would communicate. He told the MEC and his team that the occurrence was neither favourable, desirable nor inspiring. It was regrettable that it had to come to this. The Committee’s Secretariat and the Office of the MEC would communicate on the proposed date of the rescheduled meeting. He asked that a final report, which has gone through all the requisite protocol be sent by close of business that day, so that a date can be found in earnest in preparation for its oversight visit. He asked the MEC if he had anything to add.

The MEC thanked the Chairperson, agreeing that it was regrettable and said he wished to apologise to the Committee for the inconvenience. Knowing the importance of the report, he could not hide the fact that he had not seen the report. He knew that he has to be held accountable for what is placed in front of the Committee. He thanked the Committee and said that he would do what needs to be done to put its house in order and submit the report per the directive of the Chairperson.

The Chairperson addressed the HOD, saying that this must never happen again. The Committee did not take kindly to it. The Committee members are over-worked, and accordingly, they do not take kindly to postponements. Members prefer to get the work done and any day lost to it is valuable as it could have scheduled something else today. He urged that when parties are scheduled to appear, that they ensure that things are done properly so that time is not lost. Time is money and value and the South African public intends for it to use it well. He reiterated that the presentation and be sent to the Committee before the end of the day. He asked the Committee Secretary to look at its programme and see how the postponement can be accommodated without compromising the rest of its work. He adjourned the meeting.


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