Capacity Building & Performance Management; Annual Reports: briefing

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Cooperative Governance and Traditional Affairs

16 March 2000
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PROVINCIAL & LOCAL GOVERNMENT PORTFOLIO COMMITTEE
17 March 2000
CAPACITY BUILDING & PERFORMANCE MANAGEMENT; LOCAL GOVERNMENT EDUCATION & TRAINING BOARD, NATIONAL HOUSE OF TRADITIONAL LEADERS, MUNICIPAL DEMARCATION BOARD: ANNUAL REPORTS

Documents Handed Out
Local Government Education and Training Board Newsletter (January 2000)
Department’s Budget presentation
National House of Traditional Leaders Report
Municipal Demarcation Board Report

SUMMARY
The local government transformation process was discussed by the Department. Emphasis was laid on capacity building, performance management, restructuring and optimal use of resources. The establishment of Sector Education and Training Authorities and the new Skills Development Strategy as a whole was elaborated on and promises to transform local government significantly.

The Local Government Education and Training Board, the National House of Traditional Leaders and the Municipal Demarcation Board presented their annual reports. In was generally felt that these institutions had to account more precisely to Parliament on how money was being spent.

The Local Government Education and Training Board reported that it was experiencing problems with regular quarterly payments of its budget.
The Portfolio Committee was concerned that the allocated budget was not being spent. They insisted that Department and the Board had to sort this out. Capacity building was fundamentally crucial for local government in this country and it was the conclusion of the Committee that the Board was lacking in vision.

The Chairperson stated that the House of National Leaders annual report was of better quality than that of the previous year’s.

The Municipal Demarcation Board’ s report focused on a range of issues including the appointment of the board, its activities, the determination of Metropolitan and District Council Boundaries and Ad Hoc Demarcations. The classification of municipalities as Category "A", "B" or "C" was discussed in relation to a Constitutional Court ruling on certain sections of the Municipal Structures Act. The rationalisation of municipalities, the ward delimitation process, the functions and powers of new municipalities and the Board’s consultation process in Kwazulu-Natal were also issues discussed.

The committee was generally impressed by the Department’s proposals for Capacity Building Programmes and a Performance Management System for local government but were concerned about the lack of integration of the various agencies working on Capacity Building.

MINUTES
Local Government Education and Training Board
The Vice Chairperson of the Local Government Education and Training Board, Mr Mqaka, made the first presentation. The New Skills Development Strategy was discussed. Focus was placed on three pieces of legislation, namely, the SAQA Act 58 of 1995, the Skills Development Act 97 of 1998 and The Skills Development Levies Act 9 of 1999 which paved the way for a totally new approach to Skills Development in South Africa.

Discussion
The Chairperson, Mr Y Carrim, commented that one could not look at capacity building and the Board’s work separately because what the Board and the Department did, complemented each other.

Ms G Borman (DP) was concerned that of the money allocated, there had not been sufficient spending on training. She wanted to know why only R3 million of the R9 to 12 million had been spent.

Mr Mqaka said that only R750 000 had been received thus far which had been spent on training.

Mr Carrim asked how much money had the Board been allocated the previous year since the annual report to Parliament had a certain figure but in the LGETB’s current report there was a different figure. Had 9 or 12 million rand been allocated?

Mr S Jappie, the Chairperson of the Board, said that R12 million had been allocated by Parliament that was supposed to be sent through on a quarterly basis. By now R9 million should have been allocated to the Board. The delivery process in terms of training had been stalled because of the failure to make this money available.

Mr P Smith (IFP) said that the way he understood the report was that currently 297apprentices were being trained. The project viability analysis suggested that 2300 more could be trained. He wanted to know however how realistic the target of 3000 was as well as an indication in terms of facts and figures of the quality of the training to be offered.

Mr Jappie said that there was still historically, in terms of legislation, two entities involved with apprentice training. One was the old apprentice training board for local government. This was now being transformed into the new Local Government Education and Training Board (LGETB). There were nevertheless two separate funds and two levies were imposed on municipalities. The LGETB could only use the funds allocated for apprentice training. In terms of the project viability process this was per module and it was calculated that it would take about two and a half years in which to get apprentices through the eleven modules. The intention of the pilot scheme had been to make sure that the delivery and outcomes could be achieved before attempting training in other provinces. There had however been problems to which the Board’s Deputy Chairperson had referred in his presentation. This was why the statistics did not conform to what (in the LGETB’s opinion) was a feasible number of people who could be taken through the program.

Mr Carrim asked for clarity on whether the LGETB had in fact been allocated R12 million from Parliament since there was apparent disagreement on this amount by the Department’s representative, Mr Clerihew. He asked how much had been allocated, how much had been used and what the reason was for there being money which had been unused.

Mr Clerihew said that only R9 million had been allocated from the Department and R3 million was by way of Norwegian donor funding (totalling R12 million).

Mr Mqaka said that because the LGETB had no control over the allocation of funds and the process within the Department for making them available, its report would only be reflective of funds actually made available for use by the LGETB.

Mr P Smith asked how many quarterly instalments had been received and when did the Board stop receiving them. What steps were subsequently undertaken to try and receive the balance due?

Mr Jappie said that the LGETB had been informed the previous year that letters had been sent to get the money transferred. After a meeting earlier in the year with Mr Clerihew it was decided that R9 million would be made available as from 1 January, the last quarter of the financial year. The quarterly expenditure that should have happened did not happen.

Mr Smith asked whether this meant that the Board had not received a cent? He could not understand how a whole year could go by without this issue being resolved.

Mr Clerihew said that the ideal was that the transfer of funds was made on a quarterly basis. The fact that this did not occur did not prevent the fund from doing its job.

Ms Borman felt that this was a "terrible" system that allowed the allocation of all the money only in the last quarter. The Board would not have the capacity to now go and use all the money on training in such a short space of time.

Mr A Lyle (ANC) commented that while he appreciated the training that was occurring, there appeared to be a high failure rate. He suggested an entrance examination to determine the potential of candidates. This comment was not pursued.

Another committee member asked whether there was any provision for such training for rural local authorities.

Mr Mqaka said that provincial committees made budgets for provinces. In order for a local authority to access funding from the provincial structures, it had to apply to the provinces for training. It had been found that only big local authorities accessed the funding. Very often the small local authorities especially in the rural areas did not even have the necessary capacity to fill in the forms to apply for funding! To begin to address this problem, one province had decided that the district councils should take responsibility for their jurisdiction and apply for funding on behalf of all their local authorities.

Mr Smith asked what percentage of the training was in-house training as opposed to training out-sourced to accredited organisations.

Mr Jappie said that the LGETB was starting with a fragmented approach. The Skills Development Act now required every municipality to have a workplace skills plan. Out of this process, the LGETB would ensure that there was a uniform approach to completing a skills audit to determine what skills were present and what was lacking in each municipality. In-house training should be focused around performance outcomes and not attendance certificates.

Mr Smith asked for clarity on the Board’s relationship with the Department. It was clear that the Department held the purse strings – that was why the Board did not get their R9 million. However was there any oversight role performed by the Department or did the Board only report to Parliament - did they not have an obligation to account for the money which they had transferred to SALGA (South African Local Government Association).

Mr Jappie said that other than the Department sending a person to sit on the Board, the administration from the Department dealt with the funding and the budgets were submitted to the Board. The board had to oversee this process and make sure that money flowed from the Department directly. With the Sector Education and Training Authority process [starting 1 April 2000], there would be a more co-ordinated approach. Accountability would lie with the Minister and Director General with regard to funds. The funds would go directly to the SETA which would diminish the problems of accessing and accounting for money. There was an agreement that SALGA would take responsibility for councillor training. In principle SALGA got approval from the Board for money to be allocated for councillor training but the money was transferred to SALGA directly from the Department. Thus the Board had very little control over this process. Unfortunately SALGA was not present to respond.

Mr Smith suggested that the Board had a statutory responsibility to account to Parliament on this money since it was disbursing these funds to SALGA. He wanted to know whether this "arrangement with SALGA" was permitted.

Mr Jappie recognised that the LGETB was a statutory body but when it came to the transfer of funds, it did not come via the Board to SALGA but via the Department.

Mr Clerihew from the Department refuted this and said that the Accounting Officer for the Training Fund was the Chairperson of the Board. When the Skills Development Act was brought into effect on 10 September 1999, the assets, liabilities and obligations of the Training Fund were moved to the LGETB but the Training Fund itself remained with the Department under the control of the minister, with the Director General being the accounting officer. There were no funds transferred from the Department to anybody. All the funds from the Department were paid into the Training Fund, and disbursed to wherever it had to go. There was nothing directly through the accounts of the Department.

He said that the transitional arrangement subsequent to 10 September 1999 until 31 March 2000 was that no decision, regarding any expenditure of the Training Fund, could be taken by the Minister without consultation with the LGETB, under whose control the Fund now fell. There has not been any such expenditure approved by the minister, which had not also been approved by the LGETB. This included money paid to SALGA, which was money that went via the Fund.

Mr Carrim, said that the Portfolio Committee was concerned that the money, which had been allocated, was not being spent. The Department and the LGETB had to sort this out. The Committee would be available to assist in this process. Capacity building was fundamentally crucial and it was hoped that the establishment of the new SETA structures coming into effect on 1 April would address these problems. He suggested that within six months there should be a further hearing to monitor the rate of progress. If there were still problems, then an ongoing subcommittee of the Portfolio Committee could be set up to deal with any difficulties instead of preoccupying the whole committee with this issue. He continued that he would like to see a vision emerging regarding the challenges of the country in the local government sphere and regarding how training should ensure that one was better equipped to deal with these challenges. This vision was lacking and it was hoped that while the LGETB was restructuring, such a vision would emerge.

Department of Provincial and Local Government: Targeted Capacity Building Programmes and Performance Management System
The aims, strategic objectives, and outcomes of these key focus areas were discussed by Mr G Mokate of the Department (see Key Focus Area D & F of the Department’s presentation)

Discussion
Ms Borman said that the presentation looked very good on paper. She wanted to know whether local government had the support structures to carry out implementation of the various objectives and strategies.

Mr Mokate said that the Department did have internal capacity constraints. Their priority was to concentrate on building internal capacity in a co-ordinated fashion. This was being done through a number of projects, for example the local government transformation programme, which was funded by donors.

Mr Smith asked how the Department co-ordinated with the Department of Finance around normalisation/ stabilisation and creating capacity around financial management.

Mr Mokate said that the Department was creating mechanisms for a co-ordinated strategy. In the next few weeks the two departments would be coming together to work out a common strategy. Through the co-ordinated mechanism of donor funding, the Department was beginning to say that it did not want duplication in terms of functions and resources. There had to be a focus on how to integrate so that the available resources could be shared.

A committee member asked how the committee would be informed about the training that was being run in-house.

Mr Mokate said that the Department did not train people but worked with the LGETB, SETA and other training providers in the country. The Department dealt with policy, strategy, resource mobilisation and identified needs and problems in order to assess intervention.

The Chairperson commented that a key component in the upcoming Municipal Systems Bill was performance management. One could not look at planning without looking at performance management. Politicians did not know too much about performance management so this would therefore preoccupy the committee quite a bit. He said that the general impression of the Department’s proposals was that they were very good and the committee wanted to see as much of it implemented as possible. He added that there should be greater integration of the programs of SETA, SALGA and other agencies working on Capacity Building, since their programs all overlapped in the transformation of local government.

National House of Traditional Leaders
Mr M Mopeli from the National House of Traditional Leaders presented (see document)

Discussion
Mr Smith noted that their expenditure had under-matched their allocated budget. In light of this he could not understand why a larger budget was required this year.

Mr Mopeli said that there was an incremental increase in the usage of funds. The National House of Traditional Leaders did not initially have infrastructure, personnel such as a CEO. It had only employed a CEO and a secretary in 1999. It was now beginning to use its funds. This trend would continue until the House’s full potential was reached. The House was not yet fully operational but it was busy putting its infrastructure in place.

Mr Smith referred to the report where it was stated "during the forthcoming year, it is expected of the house to make use of professionals services especially after the release of the discussion document". He wanted to know whether this concerned research for the White Paper process. He wanted to know who decided to grant or refuse a request for funding in this regard.

A colleague of Mr Mopeli said that the Director General of the Department was the Accounting Officer with regard to whatever money was appropriated for the purpose of the National House of Traditional Leaders. It was only fair that he would monitor and approve expenditure if and when requested.

A committee member asked what the House’s approach was on separating what one would call "legitimate traditional leaders" from those who might have been appointed by the Apartheid Regime.

Mr Mopeli had a problem with this exercise. He thought that the best route to take to solve the problem would be through a judicial commission of enquiry at national level.

Another committee member pointed out that, while sympathetic to the House’s request for a larger budget, he was concerned that the House did not have a specific business plan.

Rev A Goosen (ANC) said that the House’s report stated that the White Paper process was going at a snail’s pace. Nevertheless, according to the Department’s report, the White Paper on Traditional Leadership would appear towards the middle of 2000. He wanted to know what the real state of affairs was. Would this white paper appear in June or would it take longer, as the House had envisaged?

Another committee member referred to the Commission on the Rights of Cultural, Linguistic and Religious Rights of Communities. He wanted to know what the role of the House was in this regard.

Mr Mopeli said that the House had participated in the Local Government White Paper process. Their views were made known concerning what types of structures it would like and what role it would like to play. The white paper was produced and it was noted that all the House’s suggestions had been rejected. After the promulgation of the Municipal Structures Act, the House made it clear that it still wanted to engage the government in order to persuade it to change its mind about those structures and to give a defined role to the Traditional Leaders – and not leave it to the Minister to define.

The Director General of the Department said that what he wanted to see happening in his office was for it to be able to give first hand information, both to the president and deputy president on matters relating to traditional leadership in the country. The deputy president, Jacob Zuma has been designated as the political figurehead in the presidency, who would take charge of traditional leadership issues. It had been indicated that an expert would be employed to deal with issues relating to Section 185 of the Constitution.

On the subject of the budget, the Director General said that Parliament had passed the law which made provision for the Director General in the Department to be the Accounting Officer. There was no formal request from the Department to amend this law. He said that he was the Accounting Officer since the law said he was and he did not make laws. If the House wanted this law to be changed, it should submit a formal request to the Department. The minister, as the political head in the Department would then decide on how to take this request forward. The Department would be prepared to process such a request from the House.

The Chairperson concluded this discussion saying that he felt that the statutory bodies in general had to account more precisely to Parliament on how money was being spent. Nevertheless he felt that there had been a considerable improvement compared to the previous year’s accounting to Parliament by the National House of Traditional Leaders. He added that traditional leaders were indeed potentially important for campaigns such as the National Campaign to combat the HIV / AIDS epidemic and in the community and economic development of rural areas.

Municipal Demarcation Board
Dr Michael Sutcliffe, Chairperson of the Board, presented (see document).
The Municipal Demarcation Board’ s report focused on a range of issues including the appointment of the Board, its activities, the determination of Metropolitan and District Council Boundaries and Ad Hoc Demarcations. The classification of municipalities as "Category A, B or C" was discussed in relation to a Constitutional Court ruling on certain sections of the Municipal Structures Act. The rationalisation of municipalities, the ward delimitation process, the functions and powers of new municipalities and the Board’s consultation process in Kwazulu Natal were also issues discussed.

Discussion
Ms M Verwoerd (ANC) wanted to know more about the Demarcation Board’s assessment. She said that the picture which the Financial and Fiscal Commission had painted of local government was quite bleak. She wanted to know whether the financial viability and capacity of municipalities would in fact improve with the new demarcation.

Dr Sutcliffe said that the capacity would improve immediately when the new municipalities were introduced. Instead of having a very small municipality with capacity surrounded by a large area without capacity, one now had both areas combined and there was some capacity. The capacity side has been improved but not to the extent that the Board was satisfied that issues are really being dealt with. Financial capacity was an area that the Portfolio Committee should take more interest in.

An ANC member said that he had noticed that there were dates set for voting districts and there was ward demarcation already. He wanted to know whether this information was available to the public already.

Dr Sutcliffe said that the Board was on course for elections. In broad terms the information was available in various ways to the public. A tollfree number in his presentation could also be called in this regard.

The member also wanted to know whether there was a considered plan to really integrate the various areas. Dr Sutcliffe said that the Board wanted the public’s views on whether or not to have integration and the extent thereof instead of imposing such joinders.

Mr Smith referred to the Board’s Cash Flow Forecast. He wanted to know how and at what rate the Professional Fees were paid.

Dr Sutcliffe said that the Board had taken a very hard line policy on this. The maximum hourly rate allowed was R350. Most of its consultants were less than R250 per hour. He felt that this was a matter that had to be standardised in government as a whole. "Some agencies were paying R600, R700 or R800 an hour which was just scandalous". He added that all the Board’s employees travelled economy class.

Mr Smith asked for clarity on how the Board’s communication strategy could cost R900 000. Referring to the ward demarcation, he was concerned about the geographical relationship of these wards with existing tribal wards. He wanted to know how this would play out.

Dr Sutcliffe said that there had to be interaction with tribal authorities and other local communities where there was potential for any conflicts growing out of the imposition of joining certain districts or wards. The Board wanted the public’s views. The question on communication strategy expenditure was not answered.

Ms Borman asked whether the Board was able to draw the Department’s attention to where training and capacity building was needed. Further she asked whether the Board would be an ongoing body. If not, when did it start dismantling and what would happen to its assets?

Mr Sutcliffe said that the Board was a constitutional entity and there would always be a need for demarcation. Every three or four years after an election the wards would have to be looked at anyway. There was no question of the Board disappearing. The Board was appointed for five-year terms of office.
The question on assessment of capacity building was not answered.

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