15 September 2023 - NW2802
Mathafa, Mr OM to ask the Minister of Cooperative Governance and Traditional Affairs
Whether she intends working with the National Treasury to produce a strategy and plan to respond to the findings of the Auditor-General on the weaknesses of the financial management capacity within local government, which result in high levels of outsourcing and underspending of allocated funds, while the need for service delivery still exists; if not, what is the position in this regard; if so, what are the relevant details?
The Department is already working with the National Treasury on several local government reforms which include the development or review of municipal regulations, MFMA circulars, grants frameworks etc. which seeks to enhance the capacity in municipalities. There are also established intergovernmental structures i.e. budget forums, MFMA coordinators meetings etc. where the collaborative model is further entrenched.
Sound financial management requires stability within the administration from a governance perspective, therefore, as a response hereto, the Department has rolled out the following programmes to augment what the National Treasury is doing, as part of the collaborative strategy to support municipalities:
- promulgated the municipal staff regulations, which became effective from July 2022. To give effect to the implementation of municipal staff regulations, the Department is in the process of piloting the prototype staff establishment, which deals with review of organogram, which will enable municipalities to have a fit for purpose structure.
- Support to MPACs and other council committees to ensure their functionality;
- The department has also promulgated the Code of Conduct for Councillors Regulations to support the implementation of Schedule 7 in the Municipal Structures Act. This will contribute towards the stability at a council committee but also ensure that there is action in the event where there is instability or unwanted behaviour.
- Development of the Integrated Local Government Capacity Building Strategy which seek to introduce a strategy on how to address the skills deficiencies at municipalities to reduce the reliance on consultants.
- The department is also reviewing its support strategy which includes amongst others, how to better utilize Municipal Systems Improvement Grant (MSIG) to improve internal controls within municipalities and overall governance.
- The Department, through MISA, support municipalities on among others, the placement of civil and electrical engineers to assist with capacity building in the municipal project management unit.
- Data Management (Revenue)- aimed at assisting municipalities to improve accuracy and completeness of billing and address revenue leakages.
- Cost of supply study on water services- aimed at assisting municipalities to determine cost of providing trading services, revenue requirements and tariff design.
- Records management- aimed at assisting municipalities to improve records management, assist with the stabilisation of the administration and promote culture of accountability.
The above, together with support from the National Treasury will go a long way towards assisting municipalities to address the weaknesses identified by the Auditor-General. It is however important that this be looked at within the context of section 154 of the Constitution, meaning that municipalities still ultimately remain responsible and accountable to manage their own affairs. So by implication, the support initiatives is there to support municipalities but their success is highly dependent on the receptiveness thereto by the leadership within the municipality.