Department’s 2006/07 Annual Report briefing

PROVINCIAL AND LOCAL GOVERNMENT PORTFOLIO COMMITTEE
06 November 2007
DEPARTMENT’S 2006/07 ANNUAL REPORT BRIEFING

Chairperson: Mr S Tsenoli (ANC)

Documents handed out:
Overview of the 2006/07 Annual Report
Governance, Policy and Research
Urban and Rural Development
Systems and Capacity Building
Disaster Management
Free Basic Services and Infrastructure
Administration Monitoring and Evaluation
Administration Financial Highlights
Administration Corporate Services
Department of Provincial and Local Government Annual Report 2006/07 [available at www.dplg.gov.za]

Audio recording of meeting [Part 1][Part 2]


SUMMARY
The Department briefed the Committee on its Annual Report 2006/07. The briefing took on the form of multiple presentations covering each of the Department’s programmes of Governance, Policy and Research (including Traditional Leadership); Urban and Rural Development; Systems and Capacity Building (including Disaster Management); Free Basic Services and Infrastructure and Administration (consisting of Monitoring and Evaluation, Financial Highlights and Corporate Services) were presented. The Committee was concerned that some of the questions posed were not being directly answered. Particular areas of concern highlighted included performance of provincial government, the slow progress on the Traditional Leadership programme, and the low numbers of traditional councils. Integrated development plans, the finalisation of the Intergovernmental Relations Bill, donor funding,  capacity building, the quality of support, and the coordination with other departments on the question of boundaries were further addressed. Other questions were asked around the high staff turnover, the effectiveness of programmes, and delivery of services and attraction of business to rural areas. Challenges around the host cities contracts for 2010, the uptake of municipalities on gender and HIV / Aids,
roll outs of the Municipal Property Rates Act, councillor remuneration issues, and support for the National Youth Service were interrogated. Questions were asked around the National Disaster Management Centre, effective systems for response, and disaster management plans. Finally, questions were asked around service delivery protests, the sustainability of the provision of services, project management, and the municipal infrastructure grants were examined.
It was pointed out that many of the issues raised were linked with matters earlier raised in the budget debate.

MINUTES
Department of Provincial and Local Government (DPLG) Annual Report Briefing
Ms Lindiwe Msengana-Ndlela, Director General (DG), DPLG, presented the Committee with an overview of the 2006/07 Annual Report. She spoke on the financial performance and future outlook of the Department and said that the allocation had steadily increased from R4.7 billion in 2001/02 to R25 billion in 2006/07. She also touched on the strategic outcomes and said that then strategic governance objectives included ensuring stability, predictability and efficiency of the governance system, as well as strengthening provincial governance and accountability. Capacity development was high on the Department’s agenda and it had increased its efforts in supporting provinces, metropolitan and district municipalities to develop Growth and Development Strategies (GDSs). Greater attention had also been given to accountability measures and the enforcement of existing local government legislation. There was also more detail on administration; governance, policy and research (including Traditional Leadership); urban and rural development; systems and capacity building (including disaster management); Free Basic Services and infrastructure, that would be provided in subsequent presentations.

Mr Derek Powell, Deputy DG, DPLG presented on the Governance, Policy and Research Programme. The measurable objective of this programme was to maintain effective and predictable relations between national Government, provinces and municipalities by developing and implementing policy, systems and support programs to improve governance in accordance with government’s Plan of Action (POA). He elaborated on the purpose of the programme, its chief directorates and staffing. The Committee was also given an overview of branch performance and a breakdown of expenditure in 2006/07.

Discussion
Mr P Smith (IFP) referred to the purpose of the Programme and commented that he was yet to see anything pertaining to advice and research on the performance of provincial government.
He also asked why the progress on the Traditional Leadership Programme was so slow and what progress had been made on the powers and functions of traditional leaders.

Mr Powell said that work was being done to assess the capacity of provincial departments. The Department as a whole had a variety of programmes that impacted upon provinces. From the current programme’s point of view, IDP programmes did work with provinces. Mr Powell noted that provinces were probably the Department’s largest stakeholders, even though most of the work was in local government.
           
Mr M Nonkonyana (ANC) stated that after the Traditional Leadership Act had been passed in 2003, traditional councils had to be established. He asked why only 50% had been transformed for the period 2004 -2006. It was felt that co-operation between municipal councils and traditional councils were sometimes good and sometimes bad. Mr Nonkonyana also asked what had happened on the establishment of local houses. He further asked at what stage was the process over the powers and functions of kings and queens. Mr Nonkonyana finally asked how far the work of the Nhlapo Commission was and whether a first report was available.

Mr Powell said that he did not have information on the powers and functions of kings at hand and that a colleague would elaborate on the Nhlapo Commission. He agreed that there were examples of good co-operation between traditional councils and municipal councils. The Department had embarked on supporting the traditional leadership institution as a whole.

Another representative of the DPLG noted that the President may pass regulations on the powers and functions of traditional leaders. The Department had provided the President with regulations in this regard. He added that the Nhlapo Commission had finalised its report on the investigation and claims of kingships. The process was complete and a work plan was to be developed. Of the 800 tribal authorities, 520 had been reconstituted into traditional councils. The rest were to follow. Twenty one of the thirty local houses had been established. The process would be completed by the end of the current financial year.

Mr S Mshudulu (ANC) said that the reality was that there was a problem between the different spheres of government. The problem was not being reported to parliament clearly. He suggested that the Department set a target for co-operation to be achieved. Mr Mshudulu emphasised that legislation affecting traditional leaders should be identified. It would guide the support that could be given to them.

Mr M Swathe (DA) noted that when the House of Traditional Leaders had briefed the Committee it had come to light that only two provinces had established traditional councils. He asked how the Department had come up with the figure that 50% of traditional councils had been established. Mr Swathe also said that traditional leaders were for the most part unaware of ward committees and the role that these played. He asked whether the Department engaged with traditional leaders.

Mr Powell confirmed that only two provinces had established two houses of traditional leadership. He stated that more information was needed to respond to the question relating to the role of ward committees.

Mr M Sonto (ANC) asked why there was mention made of credibility of Integrated Development Plans (IDPs). He asked which municipalities did not wish to toe the line. Mr Sonto agreed that partnerships with the Department were important for capacity building but asked how this would affect the ability of the Department to become self-sufficient.

Mr Powell said that the credibility of IDPs was not only about compliance but also about capacity. He pointed out that a large body of IDPs was more than credible. Reference was made to the building of capacity of the programme and said that proposals had been made.

Mr W Doman (DA) asked when the Intergovernmental Relations Bill was to be finalised. He also asked whether District B municipalities were seen as second hand municipalities and whether there was need for districts to meet that often. Mr Doman asked how the Department measured realistic local economic development. He further asked for the issue of donor funding to be elaborated on.

Mr Powell explained that the Department was still in the process of assessing the substance of local development. The assessment thus far was not where the Department had wished it to be. He noted that the intergovernment relations between local and district municipalities were looked at. There were a number of district forums that did not meet often. A practice did exist where local municipalities participated in Premier Forums. The Department set benchmarks and targets to measure relations and toolkits that the Department had developed assisted with the process.

The Chairperson agreed that more work could be done with the Provinces. He agreed that there were tensions between the three spheres of government. He asked how strategies were formulated for district municipality growth. He referred to leadership training and capacity building and stated that Sector Education and Training Authorities felt it was their job to do it and that the Department should only oversee the process. He said that National Treasury had said that some funds had had gone back to donors, and asked if the Department had such funding.

Mr Powell said the alignment process was an issue that was different in different sectors. It was extremely complex. Co-operative governance was not easily measured but the Department had undertaken measures to assist. The policy review process would give an indication on how well co-operative governance was happening. He did not wish to comment on who should do leadership training. Mr Powell stated that he was not aware of any funds returning to donors. 

Continuation of Presentation
Ms Nellie Lester, Deputy DG, DPLG presented on the Urban and Rural Development Programme. The purpose of the Programme was to manage, co-ordinate, monitor and measure the effectiveness of the integrated implementation of the Urban Renewal Programme (URP) and the Integrated Sustainable Rural Development Programme (ISRDP) across all spheres of government. The strategic objectives involved the management, monitoring and evaluation of the these programmes. Ms Lester continued by elaborating on the strategic achievements, key challenges, strategic priorities and budget (see attached presentation)

Discussion
The Chairperson asked what the quality of the support by the IDT was. He also asked what the Department’s role was with SAPS and the Department of Justice on the alignment of boundaries.
Mr Tsenoli asked what quality of nodes existed and whether there was high staff turnover in all nodes.

Ms Lester said that the mid-term review would look at the reasons behind the high staff turnover.

Mr Smith asked what was the measure of the effectiveness of the Programme. He also asked how the best practices of nodes were institutionalised and taken to the weaker nodes.

Ms Msengana-Ndlela said that there would be a report on the Urban Renewal Programme (URP. Lessons had been learnt and these would be incorporated into the White Paper.

Ms Lester said that the process for the mid-term review would look at the impact of the Programme. She felt it a bit premature to measure the effectiveness of the Programme at present. Once a comprehensive view of successful nodes was obtained, recommendations could then be made. There was a need to understand why certain nodal areas were performing better than others.

Mr Nonkonyana stated that he would have liked to see some evaluation of the delivery of services in rural areas from the past up until the present.

Ms Msengana-Ndlela pointed out that service delivery on water and electricity had increased in some areas. Specific figures would be provided at a later time.

Mr Doman asked whether Business Trust monies could be spent by the Department on programmes.

Ms Lester said that the Department was working with the Business Trust on a community investment programme.

Mr M Phadagi (ANC) asked if there was a strategy to attract businesses to rural areas.

Ms Msengana-Ndlela noted that it was not easy to get the three spheres of government to work together on the URP. It was realised that a more extensive support programme was needed especially with municipalities. The Department had recognized the need for programmes to be sustainable in rural areas in order to attract industry. The current programme ensured a basic infrastructure would be in place. Partnerships with the Business Trust and similar bodies were aimed at bringing about social upliftment. Ms Msengana-Ndlela explained that the URP had moved beyond the establishment of institutional frameworks and was now looking at tools and legislation to give effect to the framework.

Continuation of presentation
Mr Elroy Africa, Deputy DG, DPLG made a presentation on the Systems and Capacity Building Branch. The purpose of the Programme was to provide capacity building and hands-on support to local government, promote intergovernmental fiscal relations and regulate and monitor the local government institutional administrative framework. Much detail was provided on the Programme’s core functions, its developments and service delivery achievements. A breakdown of the Programme’s budget was also provided. The Branch’s broad priorities were to strengthen national capacity to support provinces and municipalities to deepen delivery of national programmes in local areas. It aimed also to strengthen provincial capacity to support municipalities and accelerate delivery of provincial programmes in local areas and lastly to support the effective implementation of programmes associated with the relevant five Key Performance Areas of local government performance. The committee was provided with detail on the Systems and Capacity Building Branch’s specific priorities for 2007/08.

Discussion
The Chairperson asked how well the Department was represented to bring across the Local Government perspective as part of capacity building. He also asked what challenges were arising on evaluation of risks to contracts signed by host cities for 2010.

Mr Africa said that the Department played a support role to preparations for 2010 and mainly identified challenges and risks. Host cities convened a technical committee to report on progress. Some municipalities faced greater challenges than others. The Department had prepared a communication protocol to deal with the challenges. Mr Africa noted that the Minister chaired the Host Cities Forum.

The Chairperson asked if there were quantifiable reports that emerged after Presidential Imbizos. He additionally asked what was the quality of uptake in municipalities on gender and HIV-AIDS issues.

Mr Africa explained that after every Imbizo an action plan was formed of issues raised. Mr Africa felt it was still early days to report on gender and HIV-AIDS but committed himself to report back on the issue.

Mr Smith referred to the Municipal Rates Act and asked how well rollouts were going. He also asked whether branch priorities referred only to local government competencies or did include national programmes as well.

Mr Africa said that this was a complex piece of legislation that had been passed in 2004. The rollout was done incrementally and the first set of regulations dealing with basic matters was ready. A second draft set of regulations had also been prepared. Public Service infrastructure was one of the challenges affecting rollout. Mr Africa stated that only twenty three municipalities had rolled out the legislation thus far but that progress was being made incrementally. He pointed out that the focus of the Branch was on local government competencies.

Mr Swathe asked whether issues on councillor remuneration had been resolved. He referred to the implementation of the anti-corruption strategy and asked if the rollout numbers had increased. 

Mr Africa said that at least once a month queries on councillor remuneration were dealt with and that the Department had done its best to clarify upper limits. He noted that four provinces had rolled out on anti-corruption strategies. The Department had been working with thirty municipalities on rollouts but it did not mean that other municipalities were not rolling out.

Mr Doman asked how distant would be the second set of regulations for the Property Rates Act.

Mr Mshudulu asked for more information on support for the National Youth Service.

Mr Africa stated that the Department supported the Presidency on the National Youth Service.

Continuation of Presentation
Mr Lance Williams, Disaster Management Executive Manager, DPLG,  conducted the Disaster Management presentation. The purpose of the National Disaster Management Centre (NDMC) was to promote the implementation of the Disaster Management Act through the establishment of an integrated and co-ordinated system of disaster management, with special emphasis on risk reduction. It included disaster prevention, preparedness and mitigation. Mr Williams touched on the strategic objectives, strategic imperatives, governance structures and the structure of the NDMC. Detail was provided on achievements against 2006/07 outputs, as well as on 2007/08 strategic priorities. A breakdown of the unit’s budget was also provided.

Discussion
Mr Smith asked how far was progress at metro level. He said that the Disaster Management budget seemed to increase greatly each year.

Mr Williams said that in November 2006 a MinMEC study was done on the implementation of the Act. The study showed that progress was being made. Standardisation was needed and an independent audit was required. Mr Williams said that the budget was related to the Disaster Management Framework. He wanted government to set a startup grant for disaster management.

The Chairperson asked about the progress being made on an effective system for response, and enquired what issues would affect the speed of response. He additionally asked whether the Disaster Management Act was satisfactorily implemented at provincial level. He asked what challenges host cities were facing on issues of security and how was this managed for intensive purposes.

Mr Williams stated that an audit had been done on host cities responsiveness, and it was found not to be adequate. He said that there was a need to conduct an audit of disaster management plans as far as implementation of the Act was concerned. He said that from the Department’s point of view there were many threats that host cities could face. A security plan was being developed to deal with issues and challenges. It was to be completed by March 2008. 

Mr Doman asked what progress had been made on the fire brigade board.

Mr Williams responded that there had been two fire brigade board meetings and that a number of key issues had been identified for resolution.

Ms Bhengu asked whether persons who had gone for volunteer training were being employed.
 
Mr Williams answered that the DWAF administered volunteers. Two alternatives were discussed over volunteers. The first was to expand the programme and the second was to create overflow capacity to assist fire fighting. A third option was perhaps to expand the programme to those regions that lacked fire fighting services.

Mr Mshudulu suggested that there should be uniformity in fire fighting. He felt that there might be some provinces which preferred to maintain the status quo.

Mr Williams said that Disaster Management Centres often found themselves in a Catch 22 situation. When provinces were asked to comply, they asked the Department for funding that would enable them to comply. Funds were not always readily available. He said that perhaps if there was no uniformity there could be integration.

Continuation of Presentation
Mr Yusuf Patel, Deputy DG: Free Basic Services and Infrastructure, DPLG presented the Programme on infrastructure. The purpose of this Programme was to address the infrastructure and service delivery needs of communities in a participatory and sustainable manner. The strategic objectives were to support local government so that municipalities could deliver sustainable infrastructure and increase access to basic services, including free basic services. It also aimed to enhance public participation in governance and empowerment of communities. The Committee was given insight into sub-programmes, as well as a breakdown of the human resources per directorate within the Programme. Mr Patel highlighted achievements and provided the priorities for 2007/08. Figures on the MTEF budget review were also provided (see attached presentation)

Discussion
The Chair asked for an explanation on the extent of sustainability in the provision of services. He also asked whether alternative sources of energy were considered. He further asked what the reasons were behind the recent protests on service delivery.

Mr Patel responded that work was being done to analyse what the root cause behind the protests was. It was believed that there might be a lack of communication between municipalities and communities. He emphasised that greater public participation was required. Mr Patel noted that an early warning and monitoring system should be in place to pick up on issues when they arose.

Mr Smith asked whether it was free basic energy or free basic electricity that was being referred to. He also asked what level of compliance there was in terms of free basic energy. Mr Smith further asked what was being done about electricity provision in rural areas. He referred to the service delivery percentage figures and asked whether it would be a monumental effort on the government’s part to get the figures from where they were at present to where they should be at 100%.

Mr Patel stated that free basic energy and issues of sustainability was the focus. The possibility of non-grid options and the aim of universal access by 2012 were key to the programme. The Department’s focus was on bulk infrastructure, and thereafter connections. The idea was to move towards a greater energy-efficient approach. The Department was working with the Department of Minerals and Energy, Eskom and other stakeholders.

Mr Mshudulu referred to project management and asked how best the Department could extend training to where there were core projects.

Mr Patel said that funds were given to municipalities, who in turn called for tenders on projects. The Department did provide support to municipalities.

Mr Doman referred to Municipal Infrastructure Grants (MIG) and said there was a huge improvement in spending. He asked who did the spending. Mr Doman referred to indigent registers and said that forty six municipalities did not need these registers. Reference was made to the eradication of the bucket system and he asked what the national target was. Mr Doman also asked what the finding of a model for ward committees entailed.

Mr Patel said that going hand in hand with improvement in spending was the need to put proper monitoring systems in place. He pointed out that grants were allocated on a formulae basis. Funds were allocated upfront. The transfers were dependant on projects that were registered. The Department transferred on a monthly basis and monitored the spending of municipalities also on a month to month basis. Mr Patel noted that spending could be tracked on a case by case basis. Spending had improved overall. He said that the challenge with MIGs was that the grant did not cover maintenance and operations. MIG had been introduced in the 2004/05 financial year and had always only been granted to some municipalities. Last year was the first year in which all municipalities were given MIGs.

Mr Patel pointed out that local municipalities were required to keep indigent registers. He said that perhaps the registers needed to be populated with more information. Mr Patel said that municipalities must do all they could to support ward committees. The Department was looking into obtaining national funding for ward committees.

Continuation of presentation
Ms Tumi Mketi, Deputy DG: Monitoring and Evaluation, DPLG said that the purpose of the Monitoring and Evaluation (M & E) Branch was to monitor performance, evaluate service delivery and deepen corporate governance values and practices. The Committee was given a breakdown of the chief directorates within the Branch and a summary of the Branch’s overall performance for 2006/07. Ms Mketi also provided a detailed look at each chief directorate’s progress against 2006/07 outputs. Programme Budget and actual expenditure figures for 2006/07 were also provided.

Discussion
Mr Smith asked whether the monitoring and evaluation branch was the Department’s effort to fill a gap that was lacking in government.

Ms Mketi answered that the M & E system was based on a government wide framework. Each department had a system. 

Mr Tsenoli said that monitoring and evaluation were one of the most crucial issues. He asked whether the Department was moving towards an integrated approach because of it. He additionally asked why some units had not been formed. It was further asked how far the system had been communicated.

Ms Mketi said that there had been an emphasis on integration. She noted that branches had been grouped in terms of outputs developed. The Strategic Plan for 2007 was more integration-approached than silo-approached. She stated that there were a number of units that were not adequately resourced. She emphasised that provinces needed to be adequately resourced. She said that the system used had been communicated.

Mr Doman remarked that the Department’s record in answering questions was not good. He noted that on the Green Paper two questions remained unanswered and one related to local government. Mr Doman asked if there was a problem as 70% of his questions remained unanswered.

Ms Msengana-Ndlela responded that the Department was committed to answering questions posed. She noted that of the 73 questions received 44 had been answered. Some of the questions not answered were perhaps not relevant to this Department. Others were perhaps relevant but required too much detail. Ms Msengana-Ndlela stated that it was therefore sometimes difficult to answer all questions. 

The Chairperson referred to the intended purpose for monitoring and evaluation and asked whether the Branch was properly resourced. He additionally asked whether a culture of acceptance had been inculcated.

Ms Mketi affirmed that there was acceptance of the system. It was a three sphere approach.

Continuation of presentation
Mr Mbulelo Sigaba, Acting Chief Financial Officer, DPLG provided the Committee with an overview of the financial highlights of the Annual Report 2006/07. The expenditure trends of the Department over the last five years were explained. The Committee was also given insight into the financial performance of the Department as at 31 March 2007. An unqualified Audit Report and unauthorized expenditure for prior years approved in terms of Finance Act No. 2 of 2007 were some of the achievements highlighted (See detailed presentation)

Discussion
Mr Mshudulu asked what were the challenges of the Audit Committee.

Ms Msengana-Ndlela said that the Audit Committee was external and was functioning well. The internal Audit Committee was not however functioning too well.

Ms Bhengu asked for clarity on conditional grants and why municipalities were not spending them.

Ms Msengana-Ndlela responded that at the end of a financial year, if municipalities had not spent their funding,  the Department would trace and do a follow up on those municipalities. The Department had requested municipalities to furnish business plans before obtaining grants. Municipalities were also required to report back periodically on these business plans. She noted however that it was a challenge to get municipalities to report back.
           
The Chairperson asked what progress had been made on Regional Services Levies (RSC).

Ms Msengana-Ndlela said that expenditure trends related to changes to regional services levies. She stated that a discussion paper had pointed out that the equitable share had increased. She  said that the low level base of some district and local municipalities must be recognised

Mr Sonto asked for clarity on the shifting of funds and whether it was legal.

Ms Msengana-Ndlela said that the Department was trying to reduce its savings each year. National Treasury had agreed that funds be rolled over in order for these to be allocated to municipalities.

Continuation of Presentation
Mr Tozi Faba, Deputy DG: Corporate Services, DPLG, gave the presentation on the Corporate Services Branch of the Department. The purpose of the Programme was to provide for the management, leadership and administration within the Ministry and the Department. The strategic objectives were to monitor, evaluate and communicate the impact of government programmes in municipal areas in order to enhance performance, accountability and public confidence. This Branch was to strengthen the Department’s organizational capability and performance to deliver on its mandate. Detail was also given on sub-programmes, achievements, structure and staffing, and the budget as well as on strategic priorities for the 2007/08 financial year.

Discussion
Mr Smith asked how much knowledge sharing there was amongst municipalities’ corporate services.

Mr Faba said that there was a lack of communication. There was a need to strengthen knowledge sharing at municipal level. The public was not aware of what government was doing.

The Chairperson asked what the uptake was on ICT and what the situation was in the Department.

Mr Faba pointed out that people were taken for training from time to time. He emphasised that ICT was training people.

The Chairperson responded that specifics were needed on the issue.

Mr Doman referred to a mayoral function for which five organizers were hired for twenty days to organise the event. He asked why so many organisers were necessary. He felt this to be an unnecessary expenditure.

Mr Faba responded that it had been a huge event and many people had been involved.

The Chairperson stated that the Committee had requested Prof Sobahle of the Department to co-ordinate a get together with the Media Development and Diversity Agency, South African Broadcasting Corporation, the Commission on the promotion of Cultural, Religious and Linguistic Rights and the Department of Arts and Culture to discuss the promotion of multi-lingualism. He added that local economic development should be linked with regional economic development. He requested that the Department, at another sitting, to systematically report on the status of provinces on education, health and other issues.

Mr Smith pointed out that many of the issues raised were linked with matters earlier raised in the budget debate.

The meeting was adjourned.