Thaba Chweu Municipality Intervention: Briefing; Moqhaka, Phumelela & Elundini Intervention Committee Reports

Meeting report

LOCAL GOVERNMENT SELECT COMMITTEE
9 March 2005
THABA CHWEU MUNICIPALITY INTERVENTION: BRIEFING; MOQHAKA, PHUMELELA AND ELUNDINI INTERVENTION COMMITTEE REPORTS

Chairperson: Mr S Shiceka (ANC)

Documents handed out:
Mpumalanga Province Briefing Report
Moqhaka Local Municipality Committee Report
Phumelela Local Municipality Committee Report
Elundini Local Municipality Committee Report
[The Committee Reports will shortly be available at Committee Reports]

SUMMARY
The Committee met to receive a briefing on the recent intervention in the Thaba Chweu Local Municipality by the Mpumalanga Provincial Government in accordance with Section 139 of the Constitution. The Department provided an extensive background report on events leading up to the intervention and current steps to address the weaknesses. Members asked a number of questions including the envisaged timeframe for the intervention; training programmes imposed; the role of KPMG auditors; the presence of ward committees; and proposed disciplinary procedures against transgressors.

Members also considered Committee Reports on the Moqhaka, Phumelela and Elundini Local Municipalities. The latter two reports were adopted, and Members requested more technical details about the Moqhaka report before further consideration.

MINUTES
Mr K Mokoena (ANC) acted as chairperson in the absence of Mr Shiceka.

Mpumalanga MEC Presentation
Mr J Mahlangu provided a background report on the recent intervention into the Thaba Chweu Local Municipality in terms of Section 139(1)(b) of the Constitution. Thaba Chweu was one of 17 local municipalities within the province and was established in 2000. Corrupt activities prevailed within the municipality such as excessive staff advances and other financial irregularities. The cashbook was previously balanced in 2001 and KPMG had been contracted to address the shortcomings. Junior officials operated within the municipality with insufficient skills and experience to solve the crisis. Consumer debts were increasing rapidly and credit control policy was inadequate. Internal control was limited with irregular payment of service providers and duplicate payments. Nine separate bank accounts were currently in operation and repeated departmental interventions and advice had proved fruitless. National Treasury had transferred the November 2004 equitable share after careful consideration of non-compliance with budgetary requirements. Future withholding of the equitable share would occur if non-compliance persisted. The provincial department had assisted the local municipality with the preparation of the 2005/06 Budget due to a lack of capacity.

The intervention had occurred as a measure of last resort following numerous meetings with various stakeholders and relevant officials. The intervention was invoked on 1 January 2005 and a task team was established that produced a recovery plan within two weeks. The provincial government had expressed its support for the plan and a level of stability had returned to the community following the initial steps.

Mr Mokoena stepped down as Chairperson with the return of Mr Shiceka.

Discussion
The Chairperson acknowledged the detailed and informative presentation that highlighted financial and administrative problems.

Mr J Le Roux (DA) stated that dissolution of the local municipality would have been the optimum step to take as severe problems existed. Issues could persist if the present staff component remained. He asked what timeframe was in place for the recovery plan.

Mr Z Ntuli (ANC) asked whether training programmes had been implemented to assist the officials with daily tasks. He asked whether criminal charges would be brought against the culprits. Clarity was sought on the assistance provided by the district as a whole. He asked whether the provincial government had developed a monitoring mechanism to ascertain conditions in other parts of the province.

The Chairperson asked for further detail on the role of KPMG and whether their involvement had been worthwhile. He asked for a status report on current levels of service delivery and whether ward committees were in place and functioning. The extent of community involvement within IDPs needed elucidation. He asked whether interested stakeholders had received regular briefings on the unfolding process.

Mr Mahlangu responded that the finalisation of the recovery plan had been a positive development that formed a foundation for the intervention. Meetings had already taken place with stakeholders such as debtors and consultants. The appointment of a senior manager was on course and attention was focused on general human resource capacity. Appropriate staff was essential to overall success. The task team did not want to remain for a lengthy period but the prime objectives had to be achieved. Intervention would be reviewed within three months and the envisaged duration of the entire procedure was six months.

Co-operation between the provincial government, SALGA and the Department of Provincial and Local Government would produce workable plans to improve the capacity of staff. Some officials had been suspended in the past but disciplinary procedures had generally been arbitrary and ineffective. The council had failed to exercise proper responsibility in this regard and past advice and recommendations from the provincial government had been ignored.

The district had failed to ensure compliance by the local municipality due to incapacity at the municipal level. The establishment of a technical team comprising the provincial government and National Treasury would assist in producing meaningful monitoring mechanisms to assist other local municipalities in identifying potential problems. Technology was also created to identify problems timeously. A DPLG system was under construction to monitor municipalities from the local level upwards.

Any measures in place depended upon competent human resources. Junior officials could not implement solutions in an effective manner. Accountable officials were imperative to ensure success in intervention measures. The primary objective of the intervention was to improve service delivery and restore the required level of stability to the area which remained a key tourist hub. The presence of strong and reliable managers would promote the necessary transformation. The role of the community in local IDPs was not certain but some interaction had occurred within particular wards. The provincial government intended to hold briefing sessions with interested parties such as local business and organised labour to inform them of the process and garner co-operation.

The Chairperson asked for clarity on the role of ward committees within the municipality. Mr Mahlangu replied that 312 ward committees existed throughout the province, and seven had still to be set up.

Mr F Louw (Chief Director: Housing - Mpumalanga) responded that a ward committee was in place for Thaba Chweu. Ms G Castle (Technical Team) added that the ward committee would start to operate on 11 March 2005.

Mr Mnisi (Technical Team) claimed that initial meetings with key stakeholders including business chambers, mining houses, trade unions etc had taken place to explain the reasons for the intervention and steps to be taken. The intervention had been welcomed by all. KPMG had struggled to complete its tasks due to the presence of junior officials and non-co-operation. KPMG remained on site and improved support was expected following the intervention and future senior appointments. The lack of experienced engineers had contributed to the poor level of service delivery. The appointment of an interim engineer for twelve months would address many shortcomings. The equitable share had been transferred on the basis of the recovery plan and financial recovery was imminent.

Ms Castle added that business interests including mining houses had expressed a desire to contribute educational facilities and other infrastructure to the area that would be considered by the council.

The Chairperson stated that Members had to consider the way forward and possible recommendations. The Committee intended to visit the municipality in the near future to garner further information and assess progress. The provincial government would assist the Committee in devising a relevant programme. Informed decisions would be made on the basis of sound evidence and facts gathered through research. A report would be produced upon return and the issues debated within the NCOP. Further meetings would occur with the MEC to discuss new information. Overall impressions of the debacle were poor and the situation had to be rectified as a matter of urgency. The lending of public funds to staff was unacceptable. The Committee wanted a briefing on the state of municipalities throughout the country in the near future to assist in the oversight role. Briefings were intended to assist in the development of pro-active programmes of action that the Members could apply in dealing with interventions.

Mr Mahlangu noted that an exercise was currently underway within the province to ascertain general conditions prevailing across all municipalities and to produce relevant recommendations to address inadequacies. A presentation on these findings could be made to the Committee at its earliest convenience.

The Chairperson stated that provincial governments had to support municipalities on an ongoing basis to avoid crises. More capacity should be generated within provincial governments to handle the issues. Turf battles within provinces between government institutions should be discouraged and co-ordinated responses encouraged.

Elundini Local Municipality Report
The Chairperson stated that a request had been received from the MEC for an extension of the intervention. Members agreed that an extension would be granted until 30 April 2005, as an open-ended arrangement was not advisable. A specific timeframe was required. The report was adopted with amendments.

Moqhaka Local Municipality Report
The Chairperson stated that contestation around leadership currently prevailed with certain municipal officials opposing the intervention. The Committee required more technical information to make an informed decision regarding the status of the intervention.

Mr D Worth (DA) stated that the intervention had been lifted after a short period of time that appeared hasty. The municipality suffered from internal problems around staffmembers that had not been addressed. Therefore, the likelihood of continued irregularities was strong.

The Chairperson indicated that the status of the intervention would be verified.

Mr Ntuli suggested that Members wait for the technical team to investigate issues on the ground before recommending a course of action.

The Chairperson stated that the report would be discussed at a later stage following completion of the investigation.

Phumelela Local Municipality Report
The report was adopted with amendments and no discussion.

The meeting was adjourned.