Hansard: NCOP: Unrevised hansard

House: National Council of Provinces

Date of Meeting: 28 Jun 2011

Summary

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Minutes

UNREVISED HANSARD

 

TUESDAY, 28 JUNE 2011

____

 

PROCEEDINGS OF THE NATIONAL COUNCIL OF PROVINCES

____

 

The Council met in the Old Assembly Chamber at 14:05.

 

The Chairperson took the Chair and requested members to observe a moment of silence for prayers or meditation.

 

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS – see col 000

 

BASIC EDUCATION LAWS AMENDMENT BILL REFERRED BACK TO SELECT COMMITTEE FOR FURTHER CONSIDERATION

 

(Announcement)

 

The CHAIRPERSON OF THE NCOP: Hon members, I would like to announce that the Basic Education Laws Amendment Bill, which was scheduled for consideration by the House, has been referred back to the select committee for further consideration.

 

NOTICES OF MOTIONS

 

Mr D B FELDMAN: Chairperson, I hereby give notice on behalf of Cope that at the next sitting of the Council I intend moving:

   That the Council -

 

(1) notes the broken promises made by Transnet to address the problems experienced by pensioners;

 

(2) debates the trustees of the fund, who now need to make decisions that will influence the livelihood of many who religiously paid over contributions, with little to show for it; and

 

(3) acknowledges the need for government to heed the calls of law-abiding citizens who are struggling to make ends meet.

 

Mr R A LEES: Hon Chairperson, I hereby give notice on behalf of the DA that at the next sitting of the Council I intend moving:

 

That the Council –

    

(1) notes with concern reports apparently confirmed by the Swaziland government, that South Africa has agreed to lend Swaziland R1,2 billion as a bailout;

 

(2) also notes that King Mswati III of Swaziland, the last absolute monarch in the world, has consistently refused to allow a democratic dispensation, lives a lavish lifestyle and has squandered the Swazi people’s money on private jets and numerous palaces and wives;

 

(3) further notes the recent vicious crackdown on trade unionists and other protestors who were simply trying to peacefully obtain the free democracy that is their right; and

 

(4) therefore calls on the South African government to impose strict conditions on any loan to Swaziland and that such conditions must include:

 

(a) the scrapping of the 38-year-old state of emergency;

 

(b) the implementation of universal human rights;

 

(c) that none of the loan funds be spent on the monarchy;

 

(d) the immediate implementation of a multiparty transitional government; and

 

(e) the immediate start of multiparty negotiations towards a new democratic constitution for Swaziland.

 

Mr D A WORTH: Hon Chairperson, I hereby give notice on behalf of the DA that at the next sitting of the Council I shall move:

 That the Council –

    

(1) notes that Matjhabeng municipality in the Free State province has spent R2 billion on “unaccounted expenditure”, according to the latest Auditor-General’s report;

 

(2) further notes that after nearly a year and many written requests to the Premier of the Free State, Mr Ace Magashule and the MEC for co-operative governance and traditional affairs, the final report from the investigating firm Ramathe Fivaz has still not publicly been made available; and

 

(3) requests that this report now be released to enable the corrupt officials to be brought to account.

 

Mr F ADAMS: Hon Chairperson, I hereby give notice that at the next sitting of the Council I intend moving:

 

That the Council –

    

(1) notes with utter dismay that, after several denials, the Democratic Alliance has finally confirmed and admitted that the Premier of the Western Cape, premier Helen Zille, is in fact receiving two salaries as the leader of the party and as the premier of the Western Cape province;

 

(2) further notes that Premier Zille is being paid nearly R2 million for being the premier and that she has refused to divulge how much she receives from the Democratic Alliance;

 

(3) takes this opportunity to acknowledge and support the sentiments and discontent expressed by the ANC, Cosatu and other opposition parties that the double dipping by Premier Zille is nothing less than an immoral act of greed; and

 

(4) condemns in the harshest possible terms the refusal of the Democratic Alliance to disclose how much it pays Premier Helen Zille and calls on the Public Protector and the SA Human Rights Commission to investigate the conduct of Premier Zille and her party for the immoral double dipping.

 

Mr O DE BEER: Chairperson, I hereby give notice on behalf of Cope that at the next sitting of the Council I intend moving:

 

That the Council –

    

(1) notes the failure of the ANC to suspend and discipline Mr Joubert Skei for having sexually harassed a fellow councillor twice his age in the period when he was mayor of the Saldanha Bay municipality;

 

(2) further notes with shock that, notwithstanding his having lost the appeal with costs, he still continues to serve as a ward councillor; and

 

(3) debates the failure of the ANC Women’s League to strongly condemn such abuse against women by leaders within the party while condemning all others.

 

Mr S H PLAATJIE: Hon Chairperson, I give notice on behalf of Cope that at the next sitting of the Council I shall move:

 

That the Council -

    

(1) notes the unacceptable and prevalent chopping and changing of corrupt officials from one government position to the other;

 

(2) further notes the suspension of Mr Charles Raseala after less than 10 months in his new position as the head of the department of education in the North West;

 

(3) acknowledges the urgent need for government to act in a swift and decisive manner when investigating corruption and misconduct, regardless of the political standing of the culprit or culprits, and

 

(4) debates the necessity to fight corruption, which is spiralling out of control and placing the country at risk of severe instability.

 

The CHIEF WHIP OF THE COUNCIL: Chair, I hereby give notice that at the next sitting of the Council I shall move:

 

   That the Council -

    

(1) notes that last Sunday, 26 June, marked the 56th anniversary of the adoption of one of the most formidable documents that encapsulated our national discourse for economic and political freedom in South Africa, the Freedom Charter;

 

(2) further notes that the notion of a Freedom Charter was first mooted at the annual congress of the African National Congress in August 1953 when Prof Z K Matthews formally suggested convening a Congress of the People to draw up the Freedom Charter, which was adopted by the allies of the ANC, the South African Indian Congress, the South African Coloured People's Organisation and the South African Congress of Democrats as a framework document for the fight against apartheid and the subjugation of our people in the land of their forefathers; and

 

(3) takes this opportunity to join the masses of our people and recognise this day and the adoption of the Freedom Charter as one of the historic moments in the fight against apartheid and a decisive indication of the unity of purpose that characterised the national democratic movement in waging a war against apartheid in our country and that the county and government should use this historic document as its guide to deliver.

 

Mr K A SINCLAIR: Chairperson, on behalf of Cope, and for the last time this semester, I give notice that at the next sitting of the Council I shall move:

 

   That the Council -

 

(1) notes the frank admission by President Jacob Zuma that the ANC is becoming arrogant and that this therefore was posing a problem for that party on how to provide effective leadership for society;

 

(2) further notes his admission that members of the ANC belong to a powerful organisation and had begun to feel that they could deal with things affecting society in the way they wanted to rather than in a way that the situation demanded; and

 

(3) also notes the President’s further frank admission that there was a crisis in the tripartite alliance and that this crisis was deepening.

 

Mr M P SIBANDE: Chairperson, I hereby give notice that at the next sitting of the Council I shall move:

 

   That the Council -

 

(1) notes the recent announcement by the Minister of Transport that rail transport for the hundreds of thousands of commuters who rely on trains to get from Khayelitsha to Cape Town will be hugely improved and that new trains will be bought for the Khayelitsha line;

 

(2) also notes that most of the commuters of the City of Cape Town live in Khayelitsha and the Cape Flats and that the ANC government comes to the rescue of these people at a time when Metrorail, which is to take workers to and from work, is falling apart and the DA-controlled City of Cape Town has once again dismally failed these people by refusing to implement its BRT system in these areas as well or as a priority;

 

(3) further notes that the Khayelitsha-to-Cape Town route is used by almost 140 000 commuters daily and forms part of the central line that also serves areas like Mitchells Plain, Belhar, Philippi and Langa - the situation is so critical that people are hanging out of overfull trains to get to and from work and the Minister has quite rightly remarked: “It is nothing more than luck that more people have not died”;

 

(4) notes that the DA had instead implemented the BRT service in the affluent areas and in areas where the need and priority for public transport are much lower than in Khayelitsha and the Cape Flats and despite the fact that the Khayelitsha line has been identified as the highest priority rail project nationally, and despite the Western Cape MEC for transport having admitted and agreed that public transport to and from Khayelitsha is untenable; and

 

(5) commends the ANC government who, unlike the DA, serves the interests of all South Africans, for rectifying the unjust and apartheid-style services by the DA and for once again coming to the rescue of the masses who are in desperate need of access to appropriate and equitable public transport.

 

Mr M J R DE VILLIERS: Chairperson, the content of my motion is the same as the hon Sinclair’s. Thank you.

 

Mr Z MLENZANA: Chairperson, I give notice that at the next sitting of the Council I shall move:

   That the House -

 

(1) notes the underdevelopment of Africa’s port economies;

 

(2) also notes the need for Africa and South Africa to improve their maritime economy in order to compete on a global level;

 

(3) further notes the massive potential trade and investment opportunities that are centred on Africa’s ports; and

 

(4) acknowledges the fundamental need for Africa to develop its ports in order to impact positively on Africa’s economy to receive full value for Africa’s resources.

 

PLANS FOR A NEW MEDICAL SCHOOL IN LIMPOPO

 

(Draft Resolution)

 

Mr T A MASHAMAITE: Hon Chairperson, I hereby move without notice:

 

   That the Council —

 

(1) notes the plans of the Department of Health for a new medical school in Limpopo to increase the number of doctors in South Africa;

 

(2) further notes that the objective of the department is to increase the number of doctors qualifying each year from 1200 to 3600 per annum;

 

(3) also notes that the government intends to put up new infrastructure to accommodate more medical students at George Mukhari Hospital in Ga-Rankuwa east of Pretoria, at Chris Hani-Baragwanath Hospital in Soweto, at King Edward VIII Hospital in Durban and at Nelson Mandela Academic Hospital in Mthatha, Eastern Cape; and

 

(4) takes this opportunity to welcome this plan to ensure that the country is adequately resourced with well-educated medical doctors to fulfil our health needs.

 

Motion agreed to in accordance with of section 65 of the Constitution.

 

JOHANNESBURG CITY PARKS HONOURED WITH A SPECIAL AWARD FOR EXCELLENCE

 

(Draft Resolution)

 

Ms B V MNCUBE: Hon Chairperson, I hereby move without notice:

 

   That the Council —

 

(1) notes that Johannesburg City Parks, under the control of the ANC, has recently received a special award from the Institute for Landscape Architecture in South Africa in recognition of its outstanding contribution to the promotion of landscape architecture through open-space development at community level in Soweto;

 

(2) further notes that although the City of Johannesburg does not have the luxury of a coastline, a river or any other breathtaking natural features in which play and city life easily blend, Johannesburg City Parks has managed to provide public spaces which celebrate landscape architecture and provide a space for play and leisure and transform the landscape in its bleakest form into one which expresses freedom and the beauty of nature and creativity; and

 

(3) takes this opportunity to commend and congratulate the City of Johannesburg and in particular its parks division on this outstanding and innovative initiative to roll out superb recreational spaces for its residents and calls on other municipalities to follow this remarkable example of landscaping to create a better life for all.

 

Motion agreed to in accordance with section 65 of the Constitution.

 

ALLEGED IMPORTATION OF ZIMBABWEAN DIAMONDS IN BREACH OF KIMBERLEY PROTOCOL

 

(Draft Resolution)

 

Mrs E C VAN LINGEN: Hon Chairperson, on behalf of the DA, I hereby move without notice:

 

That the Council —

 

(1) notes that the Chairperson of the State Diamond Trader, SDT, is alleged to have imported rough diamonds at approximately US $1 million during March this year from the Marange region in Zimbabwe;

 

(2) also notes that until now the purchase of such diamonds from areas of human rights conflicts and abuses was prohibited by the Kimberley Process Certification Scheme, irrespective of what the department says;

 

(3) further notes the Minister’s alleged insistence that the minutes of the Diamond and Precious Metals Regulator be amended to exclude the fact that the illegal importation of diamonds is mentioned, raises many questions on the credibility of the Kimberley Process Certification Scheme;

 

(4) acknowledges that the most recent attack on the credibility of the Kimberley Process Certification Scheme and the participants was when the current chairperson, Mathieu Yamba of the Democratic Republic of Congo, stated that “Zimbambwe is trading in diamonds and will continue to do so” after a meeting of the Kimberley Process Certification Scheme participants held last week, where the majority clearly had not reached consensus and walked out of the meeting and no decision could be taken, as the chairperson did not have the power to approve such sales without consent; and

 

(5) calls on the Minister to abide by the agreements of the Kimberley Process Certification Scheme and be a righteous participant in upholding such agreements.

 

The CHAIRPERSON OF THE NCOP: Any objection to the motion?

 

HON MEMBERS: Yes!

 

The CHAIRPERSON OF THE NCOP: In light of the objection the motion may not be proceeded with. The motion without notice will now become a notice of motion.

 

SAPS CRACKS A PETROL CARD SYNDICATE

 

(Draft Resolution)

Mr H B GROENEWALD: Chairperson, on behalf of the DA, I move without notice:

 

 That the Council -

 

(1) notes that the DA wants to congratulate the SAPS, which believes it has finally cracked a petrol card syndicate that has swindled the Gauteng department of transport out of more than a million rand over the past two years; and

 

(2) further notes that a man was arrested at Zebediela in Limpopo, who confessed to police that he was working together with employees from the Gauteng department of transport who allegedly supplied him with the petrol cards to make more money.

 

Motion agreed to in accordance with section 65 of the Constitution.

 

The CHAIRPERSON OF THE NCOP: As you are aware, hon members, I can’t take all the names, but I have added two minutes extra at my discretion. Don’t wave your hand, I have a list. If your name is not called, just accept that.

 

ESTABLISHMENT OF A MEDICAL TECHNOLOGY PARK

 

(Draft Resolution)

Mr B A MNGUNI: Chairperson, I move without notice:

 

   That the Council —

 

(1) notes the initiative driven by national government and the provincial government of the Western Cape to establish a medical technology park, which promises to make medicines cheaper for local residents and position South Africa as a leading medications manufacturer;

 

(2) further notes that the park will be known as the Cape Health Technology Hub and is set to be built in Ndabeni, and apart from manufacturing medicines it will accommodate academics and promote medical research;

 

(3) acknowledges that the park will help position the country as a leading provider of medications, instead of being heavily reliant on imports, especially in the manufacturing of vaccines; and

 

(4) takes this opportunity to welcome this initiative to provide cheaper medicines and improved research capacity through sound intergovernmental co-operation.

 

Motion agreed to in accordance with section 65 of the Constitution

 

STANCE OF SACP GENERAL SECRETARY ON NATIONALISATION

(Draft Resolution)

 

Mr W F FABER: Chairperson, I move without notice on behalf of the DA:

 

   That the Council —

 

(1) notes that the South African Communist Party, SACP, general secretary, Blade Nzimande, told Cosatu’s central committee that “nationalisation is an attempt by the ANC Youth League to save black economic empowerment elements in a crisis, and would not help the poor”; and

 

(2) together with the DA welcomes the stance of the SACP general secretary as his eyes only seem to have opened and hopes that the ANC’s eyes and ears also open soon so that we can address the interests of the workers and the poor in South Africa.

 

THE CHAIRPERSON OF THE NCOP: Is there any objection to the motion? In light of the objection the motion may not be proceeded with. The motion without notice will now become notice of a motion.

 

MATCH BETWEEN STORMERS AND CRUSADERS

 

(Draft Resolution)

Mr M J R DE VILLIERS: Chairperson, I move without notice on behalf of the DA:

 

   That the Council —

 

(1) notes that the Stormers will play the Crusaders in the semi-finals of the Super Rugby Competition on Saturday;

 

(2) urges all South Africans to pray and support the Stormers, because it is not only about the Stormers, but also about South African rugby; and

 

(3) wishes the Stormers and the whole team good luck and a promising outcome with the match.

 

Motion agreed to in accordance with section 65 of the Constitution.

 

HOSTING OF MALOOF MONEY CUP INTERNATIONAL SKATEBOARDING CHAMPIONSHIP BY NORTHERN CAPE

 

(Draft Resolution)

 

Mr C J DE BEER: Chairperson, I move without notice:

 

   That the Council —

 

(1) notes and congratulates the Northern Cape on hosting the world’s greatest and richest skateboarding event, the Maloof Money Cup International Skateboarding Championship, which is to be held from 30 September to 2 October 2011;

 

(2) further notes that this event will be invaluable in terms of directing global media attention to the Northern Cape and its unique attractions and the economic impact on the province and its communities; and

 

(3) acknowledges that the Northern Cape will also be hosting the 7th International Wildlife Ranching Symposium at the new Kimberley Conference Centre from 10 to 14 October 2011, profiling the business of conservation and the impact of wildlife ranching on science, livelihoods of rural communities and values of proper wildlife management.

 

Motion agreed to in accordance with section 65 of the Constitution.

 

SKILLS DEVELOPMENT AND ECONOMIC GROWTH

 

(Draft Resolution)

 

Mr M C MAINE: Chairperson, I move without notice:

   That the Council —

 

(1) notes that government has identified employment, poverty, skills development and economic growth as critical in breaking the cycle of generational poverty facing our people and has put institutional arrangements in place to fund, implement and co-ordinate skills development in particular;

 

(2) acknowledges that career guidance for the youth is an important aspect of education to address the skills shortage in the country and commends the government on its programmes and measures to address and eradicate skills shortages;

 

(3) further acknowledges that sector education and training authorities, employers, the National Skills Fund and the Industrial Development Corporation are important role-players and stakeholders in government’s plans and endeavours to address the acute skills shortage in the country; and

 

(4) calls on all sectors and stakeholders to support the government and to ensure that learners receive appropriate professional career guidance before they enter any field of study.

 

Motion agreed to in accordance with section 65 of the Constitution.

 

APPROPRIATION BILL

 

(Consideration of Votes and Schedule)

 

The CHAIRPERSON OF THE NCOP: The Secretary will read the first Order of the Day. As there is no speakers’ list, I shall now put the Votes in the order in which they appear on the Schedule to the Bill.

 

Before I do so, I would like to remind the members that when we are voting, the doors will be closed. If there is a member of your party outside, please make sure that they are all inside. Do you want one minute to do that or are you all in? Do you want the bells to be rung? I will allow the bells to be rung for one minute. I see people going out and we are going to close the door for you.

 

Vote No 1 - The Presidency – put.

 

Division demanded.

 

The Council divided:

 

AYES - 30: Adams, F; Boroto, M G; Chaane, T E; de Beer, C J; Gamede, D D; Jacobs, M P; Maine, M C; Magadla, N W; Makgate, MW; Mashamaite, T A; Mashile, B L; Matila, A G; Mazosiwe, S S; Mncube, B V; Mnguni, B A; Mofokeng, T M H; Mokgobi, M H; Mokgoro, G G; Moshodi, M L; Nesi, B; Ntwanambi, N D; Nyambi, A J; Nzimande, L P M; Qikani, A N D; Rantho, D Z; Rasmeni, R N; Sibande, M P; Tau, R J; Themba, M P; Zulu, M M M.

NOES - 15: Abrahams, B L; De Beer, O; De Villiers, M J R; Faber, W F; Feldman, D B; Groenewald, H B; Gunda, J J; Lees, R A; Makhubela, M W; Mlenzana, Z; Plaatjie, S H; Sinclair, K A; Van Lingen, E C; Watson, A; Worth, D A.

 

Vote accordingly agreed to (Democratic Alliance, Independent Democrats and Congress of the People dissenting).

 

Mr A WATSON: Chair, on a point of order: A third of the House has voted against the Vote for the first time in the history of the NCOP.

 

Vote No 2 - Parliament - put.

 

Vote agreed to (Democratic Alliance and Independent Democrats dissenting).

 

Vote No 3 - Co-operative Governance and Traditional Affairs – put.

 

Vote agreed to (Democratic Alliance and Independent Democrats dissenting).

 

Vote No 4 - Home Affairs – put and agreed to.

 

Vote No 5 - International Relations and Co-operation – put.

 

Vote agreed to (Democratic Alliance and Independent Democrats dissenting).

 

Vote No 6 - Performance Monitoring and Evaluation – put.

 

Vote agreed to (Democratic Alliance, Independent Democrats and Congress of the People dissenting).

 

Vote No 7 - Public Works – put.

 

Division demanded.

 

The Council divided:

 

AYES - 36: Adams, F; Boroto, M G; Chaane, T E; de Beer, C J; De Beer, O; Feldman, D B; Gamede, D D; Jacobs, M P; Maine, M C; Magadla, N W; Makgate, M W; Makhubela, M W; Mashamaite, T A; Mashile, B L; Matila, A G; Mazosiwe, S S; Mlenzana, Z; Mncube, B V; Mnguni, B A; Mofokeng, T M H; Mokgobi, M H; Mokgoro, G G; Moshodi, M L; Nesi, B; Ntwanambi, N D; Nyambi, A J; Nzimande, L P M; Plaatjie, S H; Qikani, A N D; Rantho, D Z; Rasmeni, R N; Sibande, M P; Sinclair, K A; Tau, R J; Themba, M P; Zulu, M M M.

 

NOES - 9: Abrahams, B L; de Villiers, M J R; Faber, W F; Groenewald, H B; Gunda, J J; Lees, R A; Van Lingen, E C; Watson, A; Worth, D A.

 

Vote accordingly agreed to (Democratic Alliance and Independent Democrats dissenting).

 

Vote No 8 - Women, Children and People with Disabilities – put.

 

Vote agreed to (Democratic Alliance and Independent Democrats dissenting).

 

Vote No 9 - Government Communication and Information System – put.

 

Vote agreed to (Democratic Alliance, Independent Democrats and Congress of the People and dissenting).

 

Vote No 10 - National Treasury - put and agreed to.

 

Vote No 11 - Public Enterprises - put and agreed to.

 

Vote No 12 - Public Service and Administration – put.

 

Vote agreed to (Democratic Alliance and Independent Democrats dissenting).

 

Vote No 13 - Statistics South Africa – put and agreed to.

 

Vote No 14 - Arts and Culture – put and agreed to.

 

Vote No 15 – Basic Education – put.

 

Division demanded.

 

The Council divided:

 

AYES - 36: Adams, F; Boroto, M G; Chaane, T E; de Beer, C J; De Beer, O; Feldman, D B; Gamede, D D; Jacobs, M P; Maine, M C; Magadla, N W; Makgate, M W; Makhubela, M W; Mashamaite, T A; Mashile, B L; Matila, A G; Mazosiwe, S S; Mlenzana, Z; Mncube, B V; Mnguni, B A; Mofokeng, T M H; Mokgobi, M H; Mokgoro, G G; Moshodi, M L; Nesi, B; Ntwanambi, N D; Nyambi, A J; Nzimande, L P M; Plaatjie, S H; Qikani, A N D; Rantho, D Z; Rasmeni, R N; Sibande, M P; Sinclair, K A; Tau, R J; Themba, M P; Zulu, M M M.

 

NOES - 9: Abrahams, B L; De Villiers, M J R; Faber, W F; Groenewald, H B; Gunda, J J; Lees, R A; Van Lingen, E C; Watson, A; Worth, D A.

 

Vote accordingly agreed to (Democratic Alliance and Independent Democrats dissenting)

 

Vote No 16 – Health – put and agreed to.

 

Vote No 17 - Higher Education and Training – put.

 

Division demanded.

The Council divided:

 

AYES - 36: Adams, F; Boroto, M G; Chaane, T E; De Beer, CJ; de Beer, O; Feldman, D B; Gamede, D D; Jacobs, M P; Maine, M C; Magadla, N W; Makgate, M W; Makhubela, M W; Mashamaite, T A; Mashile, B L; Matila, A G; Mazosiwe, S S; Mlenzana, Z; Mncube, B V; Mnguni, B A; Mofokeng, T M H; Mokgobi, M H; Mokgoro, G G; Moshodi, M L; Nesi, B; Ntwanambi, N D; Nyambi, A J; Nzimande, L P M; Plaatjie, S H; Qikani, A N D; Rantho, D Z; Rasmeni, R N; Sibande, M P; Sinclair, K A; Tau, R J; Themba, M P; Zulu, M M M.

 

NOES - 9: Abrahams, B L; De Villiers, M J R; Faber, W F; Groenewald, H B; Gunda, J J; Lees, R A; van Lingen, E C; Watson, A; Worth, D A.

 

Vote accordingly agreed to (Democratic Alliance dissenting).

 

Vote No 18 – Labour – put.

 

Vote agreed to (Democratic Alliance and Independent Democrats dissenting).

 

Vote No 19 - Social Development – put.

 

Division demanded.

 

The Council divided:

AYES - 36: Adams, F; Boroto, M G; Chaane, T E; De Beer, C J; De Beer, O; Feldman, D B; Gamede, D D; Jacobs, M P; Maine, M C; Magadla, N W; Makgate, M W; Makhubela, M W; Mashamiate, T A; Mashile, B L; Matila, A G; Mazosiwe, S S; Mlenzana, Z; Mncube, B V; Mnguni, B A; Mofokeng, T M H; Mokgobi, M H; Mokgoro, G G; Moshodi, M L; Nesi, B; Ntwanambi, N D; Nyambi, A J; Nzimande, L P M; Plaatjie, S H; Qikani, A N D; Rantho, D Z; Rasmeni, R N; Sibande, M P; Sinclair, K A; Tau, R J; Themba, M P; Zulu, M M M.

 

NOES - 9: Abrahams, B L; De Villiers, M J R; Faber, WF; Groenewald, H B; Gunda, J J; Lees, R A; van Lingen, E C; Watson, A; Worth, D A.

 

Vote accordingly agreed to (Democratic Alliance and Independent Democrats dissenting)

 

Vote No 20 - Sports and Recreation South Africa – put.

 

Vote agreed to (Democratic Alliance and Independent Democrats dissenting.

 

Vote No 21 - Correctional Services – put and agreed to.

 

Vote No 22 - Defence and Military Veterans – put.

 

Vote agreed to (Democratic Alliance and Independent Democrats dissenting).

Vote No 23 - Independent Complaints Directorate – put and agreed to.

 

Vote No 24 - Justice and Constitutional Development - put.

 

Vote agreed to (Democratic Alliance and Independent Democrats dissenting).

 

Vote No 25 – Police – put.

 

Division demanded.

 

The Council divided:

 

AYES - 36: Adams, F; Boroto, M G; Chaane, T E; De Beer, C J; De Beer, O; Feldman, D B; Gamede, D D; Jacobs, M P; Maine, M C; Magadla, N W; Makgate, M W; Makhubela, M W; Mashamiate, T A; Mashile, B L; Matila, A G; Mazosiwe, S S; Mlenzana, Z; Mncube, B V; Mnguni, B A; Mofokeng, T M H; Mokgobi, M H; Mokgoro, G G; Moshodi, M L; Nesi, B; Ntwanambi, N D; Nyambi, A J; Nzimande, L P M; Plaatjie, S H; Qikani, A N D; Rantho, D Z; Rasmeni, R N; Sibande, M P; Sinclair, K A; Tau, R J; Themba, M P; Zulu, M M M.

 

NOES - 9: Abrahams, B L; De Villiers, M J R; Faber, W F; Groenewald, H B; Gunda, J J; Lees, R A; Van Lingen, E C; Watson, A; Worth, D A.

 

Vote accordingly agreed to (Democratic Alliance and Independent Democrats dissenting).

 

Vote No 26 - Agriculture, Forestry and Fisheries – put.

 

Division demanded.

 

The Council divided:

 

AYES - 30: Adams, F; Boroto, M G; Chaane, T E; De Beer, C J; Gamede, D D; Jacobs, M P; Maine, M C; Magadla, N W; Makgate, M W; Mashamiate, T A; Mashile, B L; Matila, A G; Mazosiwe, S S; Mncube, B V; Mnguni, B A; Mofokeng, T M H; Mokgobi, M H; Mokgoro, G G; Moshodi, M L; Nesi, B; Ntwanambi, N D; Nyambi, A J; Nzimande, L P M; Qikani, A N D; Rantho, D Z; Rasmeni, R  N; Sibande, M P; Tau, R J; Themba, M P; Zulu, M M M.      

 

NOES - 15: Abrahams, B L; De Beer, O; De Villiers, M J R; Faber, W F; Feldman, D B; Groenewald, H B; Gunda, J J; Lees, R A; Makhubela, M W; Mlenzana, Z; Plaatjie, S H; Sinclair, K A; Van Lingen, E C; Watson, A; Worth, D A.

 

Vote accordingly agreed to (Democratic Alliance, Independent Democrats and Congress of the People dissenting).

 

Vote No 27 – Communications – put and agreed to.

Vote No 28 - Economic Development – put.

 

Vote agreed to (Democratic Alliance and Independent Democrats dissenting).

 

Vote No 29 – Energy – put and agreed to.

 

Vote No 30 - Environmental Affairs – put and agreed to.

 

Vote No 31 - Human Settlements - put

 

Vote agreed to (Democratic Alliance and Independent Democrats dissenting).

 

Vote No 32 - Mineral Resources – put

 

Vote agreed to (Democratic Alliance and Independent Democrats dissenting).

 

Vote No 33 - Rural Development and Land Reform – put.

 

Division demanded.

 

The Council divided:

 

AYES - 30: Adams, F; Boroto, M G; Chaane, T E; de Beer, C J; Gamede, D D; Jacobs, M P; Maine, M C; Magadla, N W; Makgate, M W; Mashamaite, T A; Mashile, B L; Matila, A G; Mazosiwe, S S; Mncube, B V; Mnguni, B A; Mofokeng, T M H; Mokgobi, M H; Mokgoro, G G; Moshodi, M L; Nesi, B; Ntwanambi, N D; Nyambi, A J; Nzimande, L P M; Qikani, A N D; Rantho, D Z; Rasmeni, R N; Sibande, M P; Tau, R J; Themba, M P; Zulu, M M M.

 

NOES - 15: Abrahams, B L; de Beer, O; De Villiers, M J R; Faber, W F; Feldman, D B; Groenewald, H B; Gunda, J J; Lees, R A; Makhubela, M W; Mlenzana, Z; Plaatjie, S H; Sinclair, K A; van Lingen, E C; Watson, A; Worth, D A.

 

Vote accordingly agreed to (Democratic Alliance, Independent Democrats and Congress of the People dissenting).

 

Vote No 34 - Science and Technology – put and agreed to.

 

Vote No 35 – Tourism – put and agreed to.

 

Vote No 36 - Trade and Industry – put.

 

Vote agreed to (Democratic Alliance and Independent Democrats dissenting).

 

Vote No 37 - Transport – put.

Vote agreed to (Democratic Alliance and Independent Democrats dissenting).

 

Vote 38 - Water Affairs – put.

 

Vote agreed to (Congress of the People dissenting).

 

Schedule put.

 

Division demanded.

 

The Council divided:

 

AYES - 36: Adams, F; Boroto, M G; Chaane, T E; De Beer, C J; De Beer, O; Feldman, D B; Gamede, D D; Jacobs, M P; Maine, M C; Magadla, N W; Makgate, M W; Makhubela, M W; Mashamaite, T A; Mashile, B L; Matila, A G; Mazosiwe, S S; Mlenzana, Z; Mncube, B V; Mnguni, B A; Mofokeng, T M H; Mokgobi, M H; Mokgoro, G G; Moshodi, M L; Nesi, B; Ntwanambi, N D; Nyambi, A J; Nzimande, L P M; Plaatjie, S H; Qikani, A N D; Rantho, D Z; Rasmeni, R N; Sibande, M P; Sinclair, K A; Tau, R J; Themba, M P; Zulu, M M M.

 

NOES - 9: Abrahams, B L; De Villiers, M J R; Faber, W F; Groenewald, HB; Gunda, J J; Lees, R A; van Lingen, E C; Watson, A; Worth, D A.

 

Schedule accordingly agreed to (Democratic Alliance dissenting).

APPROPRIATION BILL

 

(Consideration of Bill and of Report thereon)

 

Mr T E CHAANE: Hon Chairperson, hon Deputy Minister, hon members, ladies and gentlemen, the Money Bills Amendment Procedure and Related Matters Act provides in section 7(1) that the Minister must table the national annual Budget in the National Assembly as set out in section 27 of the Public Finance Management Act at the same time as the Appropriation Bill. This indeed happened on 23 February 2011.

 

Upon tabling of the Budget, both the National Assembly and the NCOP are required to refer it to committees of Finance and Appropriations for consideration and reporting. The Fiscal Framework and the Division of Revenue Bill were adopted with the support of all parties represented in this House on 10 March and 12 April respectively. The Appropriation Bill set out the strategic priorities, measurable objectives and other performance information for each department, public entity or institution, against its expected revenue and its proposed expenditure by programme and sub-programme and economic items.

 

Hon Chairperson, today, as we adopt the Appropriation Bill, we complete the Budget process and release resourses to various departments and provinces in the form of conditional grants. We do so mindful of the reality that the financial year has already commenced and departments are incurring expenditure in terms of section 29 of the Public Finance Management Act, PFMA, which makes provision for spending before the Budget is passed.

 

It therefore follows that departmental activities may be constrained should there be any delays and/or failure to pass the Bill into law. Such failure and delays would not only affect departments or provinces, but would actually fail those whom we are representing here - the people. It would furthermore create serious service delivery backlogs and have the potential of projecting our government as irresponsible and uncaring; and it is in this context that our support for the Bill should be understood and further challenge and expose the agenda of those objecting to it.

 

Hon Chairperson, the objections to some Budget Votes, support for others and objection to the entire Bill show the confusion and contradiction within the opposition parties – the DA and ID to be precise. By their actions, they want to tell the nation that the national revenue funds, that is tax monies, are appropriated to programmes and activities that would not improve their livelihoods and bring a better life. They are actually showing their lack of support for government priorities as endorsed by the people who entrusted the ANC with the task to lead. They are actually objecting to the ANC, not to the Budget. For if this is not the case, why are they not telling the nation that they have, as early as 12 April, supported the adoption of the Division of Revenue Bill?

They conveniently hide from the nation the fact that whilst on television, and hopefully through print and electronic media, they appear to be against the Appropriation Bill and some departments’ Budget Votes, as Members of Parliament, as provinces and as parties, they already benefited from the very resourses we seek to release today. They don’t tell the nation that the very salaries they earn, as Members of Parliament, come from the Budget Vote of Parliament that they objected to.

 

They fail to tell the nation that the Western Cape province, and by extension its municipalities, are already rolling out programmes funded through the conditional grants they received from the very budgets they are opposing. Hon Chairperson, this is scandalous, to say the least.

 

Our people should know that there are Rules and procedures governing all that we do here at Parliament and we, as members of the ruling party, will never deliberately do anything detrimental to the plight of our people. We put their interests first, hon Gunda. [Interjections.]

 

Mr A WATSON: Hon Chairperson, I rise on a point of order: Is it correct for the speaker to say that parties who object to certain Votes and call for divisions are actually against the Rules of the House? The speaker says that the House has certain Rules and we should not go against them.

The CHAIRPERSON OF THE NCOP: Well, he didn’t say that parties have the right in terms of the Rules to object and to agree. Continue, hon member. Mr Watson, you are protected by the Rules of this House. [Interjections.]

 

Mr T E CHAANE: Listening is the skill, hon Watson. In line with the provisions of the Constitution, the PFMA and the Money Bills Amendment Procedure and Related Matters Act, the Cabinet members have tabled their strategic plans for thorough scrutiny by various committees of Parliament. Such a process culminated in debates in the House, thus affording us another opportunity to enrich and contribute to forward planning by the departments.

 

We are satisfied that such processes were inclusive of all parties represented in Parliament - including the DA and ID. Their objection to the entire Bill should not be taken as it seems, but be seen as a mere public relations exercise by people who find it difficult to be led, to fool the people into thinking that the ANC government and its parliamentarians are failing. Various committees have, during the debates, demonstrated that they indeed take their oversight role seriously and would continue to hold the executive accountable, despite coming from the same party.

 

It is, therefore, my pleasure to report that after careful consideration of and engagement with the National Treasury on the Appropriation Bill, the committee has mandated me to table the Bill before this House for adoption without any proposed amendments.

 

It is further encouraging that departments, save for a few, have complied with the President’s call for Ministers to reflect on their strategic plans and their contribution to job creation. We call on those who have failed to do so to follow suit. We are satisfied that in spite of the limited resourses that we have, the government priorities will make a dent in our needs and will ultimately overcome the current challenges we are facing.

 

In conclusion, hon Chairperson, I call on all our opposition parties to join hands with us in the war against wasteful expenditure, and unauthorised and fruitless expenditure, as well as the general tendency of departments and provinces to underspend, as this creates the breeding ground for corruption, our number one enemy.

 

Let us shun mediocrity and excel in what we are called to do: to serve and free our people from the chains of poverty, inequality, unemployment and underdevelopment. To achieve this, we need one another. We need to share our thoughts on how ours can be transformed into a better society. We should appreciate each other’s roles and responsibility and respect the wishes of those who elected each one of us.

 

Hon Chairperson, on that note, I table the Bill for adoption. I thank you. [Applause.]

 

Mr A WATSON: Chairperson, on a point of order: Some derogatory remarks have been made about Mrs Van Lingen. We have apologised to the Chief Whip as she went for a serious operation. So I really ask the members who have made those remarks to withdraw.

 

The CHAIRPERSON OF THE NCOP: Hon member, just withdraw that if that request has been made. There was a request made for Mrs Van Lingen. She has just undergone an operation and somebody has made some derogatory remarks. I don’t know who that is. Can you just withdraw that and let us move on. Who is the member?

 

Mr A WATSON: Hon Adams said that Mrs Van Lingen came to her senses when somebody else said that they had already lost one member.

 

The CHAIRPERSON OF THE NCOP: Mr Adams, did you say that?

 

Mr F ADAMS: Yes, I withdraw, although I do not know what is so derogatry.

 

The CHAIRPERSON OF THE NCOP: Okay, I am not too sure whether “she has come to her senses” is actually derogatory.

 

I would like, perhaps, before I even rule on that one, to look at whether the words “come to her senses” are derogatory. I don’t believe it is actually derogatory but let us look at it in order to be fair to everybody. It seems as if I have a ruling quickly. Let me hear from the Table.

 

I am advised that, in terms of our Rules, procedures and practice, the words are not derogatory. There is therefore no need to apologise. We move on.

 

Debate concluded.

 

Declarations of vote:

 

Mr R A LEES: Hon Chair, on behalf of the DA we make the declaration that we are indeed opposed to this Bill in its totality, primarily because the funding is directed in a wasteful and inefficient manner and indeed the history of the spending of the ANC has been corrupt, inefficient and wasteful. We are not opposed to government expenditure, but to the way the expenditure is made, and in terms of this Bill, it is not efficient and not done in a way which will lead to the creation of jobs and economic development in the country that we all love so dearly. Thank you, hon Chair.

 

Mr T E CHAANE: Chairperson, as the ANC we are satisfied with how the monies have been appropriated. The issues of corruption are isolated issues; they are not in all the departments, as hon Lees wants to mislead the House. We are satisfied that the programmes as adopted by our government are genuine and were even supported by the same DA during the adoption of the Division of Revenue Bill earlier this year. We are satisfied that in terms of the plans that have been submitted by various departments, all monies will be used for a good cause to bring a better life to our people. I thank you, Chair.

 

Mr K A SINCLAIR: On behalf of Cope, the real one, led by President Mosiuoa Lekota, I just want to register the declaration of Cope regarding this issue.

 

We had a very specific approach. We did not have a carte blanche approach, where we just decided to oppose everything. Because of that, we thought it sensible to disagree on specific Votes, but, in all, to agree on the Appropriation Bill.

 

The last issue is that I am just concerned that the DA might not get their salaries at the end of the month and that is why we have decided to support it. [Laughter.]

 

Division demanded.

 

The Council divided:

 

AYES - 36: Adams, F; Boroto, M G; Chaane, T E; De Beer, C J; De Beer, O; Dikgale, M C; Feldman, D B; Gamede, D D; Jacobs, M P; Maine, M C; Makgate, M W; Makhubela, M W; Mashamiate, T A; Mashile, B L; Matila, A G; Mazosiwe, S S; Mlenzana, Z; Mncube, B V; Mnguni, B A; Mofokeng, T M H; Mokgobi, M H; Mokgoro, G G; Moshodi, M L; Nesi, B; Ntwanambi, N D; Nyambi, A J; Nzimande, L P M; Plaatjie, S H; Qikani, A N D; Rantho, D Z; Rasmeni, R N; Sibande, M P; Sinclair, K A; Tau, R J; Themba, M P ; Zulu, M M M.

 

NOES - 8: Abrahams, B L; De Villiers, M J R; Faber, W F; Groenewald, H B; Gunda, J J; Lees, R A; Watson, A; Worth, D A.

 

Bill accordingly agreed to in accordance with section 75 of the Constitution.

 

The Council adjourned at 15:10.

________

 

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS

 

FRIDAY, 24 JUNE 2011

 

COMMITTEE REPORTS

 

National Council of Provinces

 

1.         Report of the Select Committee on Appropriations on the Appropriation Bill [B3-2011] (National Assembly- section 77), dated 24 June 2011.

 

The Select Committee on Appropriations, having considered the Appropriation Bill [B3 – 2011], referred to it, and classified by the JTM as a section 77 Bill, reports that it has agreed to the Bill without amendments. 

 

Report to be considered.

 

2.         Report of the Select Committee on Appropriations on the Third Quarter Spending on the Devolution of Property Rate Funds Grant in the 2010/11 Financial Year, dated 22 June 2011.

 

1.         Introduction

 

The Select Committee on Appropriations (the Committee) convened a hearing on the spending levels on the Devolution of Property Rate Funds Grant for the third quarter of the 2010/11 financial year. This emanated from the provincial expenditure report published by National Treasury on 3 March 2011. 

 

The hearing took place on Tuesday, 24 May 2011, in Committee Room V119 at Parliament.

 

2.         Terms of reference

 

The hearing formed part of the Committee’s ongoing interaction with provinces to monitor their spending patterns on conditional grants. A framework for each grant sets out the purpose of the grant, measurable objectives, conditions, allocation criteria, and past performance among other things.

 

Provinces were requested to make oral presentations on the Grant and to take into consideration the following:

 

* Data trends in allocations, transfers and actual expenditure of the Grant for the third quarter of the 2010/11 financial year;

* Assessment of the department’s monitoring capacity for the financial year 2010/11, under-spending and what capacity constraints impacted on these outcomes;

* Whether monthly reports are received from receiving departments or municipalities, and if not, what are the departments doing to ensure compliance with monthly reporting; and

* The department’s spending plan on the Grant.

 

The Committee invited four provincial departments of public works (from Eastern Cape, Gauteng, Limpopo, and KwaZulu-Natal) and the national Department of Public Works (DPW). In addition, National Treasury was requested to make a presentation. All invited provinces honoured the invitation except KwaZulu-Natal.

 

3.         National Treasury

 

3.1 Spending trends

National Treasury highlighted the third quarter spending on this Grant, but also included the fourth quarter figures, as these had already been published.

Overall, provincial departments of public works had spent only 49.7 per cent of the total adjusted Grant budget by 31 December 2010. Gauteng, at only 0.5 per cent, had spent the least, followed by KwaZulu-Natal at 40.9 per cent, Eastern Cape at 47.4 per cent and Limpopo at 50.0 per cent.

There was a year-on-year improvement in overall spending of 29.7 per cent, with the Western Cape showing 296.4 per cent growth in spending, and Mpumalanga 48.1 per cent. The year-on-year spending in two provinces had declined by 98.9 per cent in Gauteng and 2.8 per cent in the Northern Cape.

 

3.2 Challenges

 

Through the quarterly reports from provinces and the annual evaluation, National Treasury had identified the following issues that affect spending on this Grant:

 

3.2.1 Invoicing by municipalities

 

Municipalities were still experiencing challenges with timeous submission of invoices to provincial departments, specifically in the Eastern Cape, Gauteng, KwaZulu-Natal and the Northern Cape.

 

3.2.2 Asset registers

 

Provincial asset registers in respect of immovable assets were still not finalised in most provinces.

 

3.3        Actions needed to address challenges

 

3.3.1 Task team

National Treasury and the Department of Public Works had convened a task team to deal with the issue of registering and managing immovable government properties.

3.3.2     Inter-governmental forums

 

The progress made by certain provinces (notably the Western Cape and KwaZulu-Natal) with various inter-governmental forums between the province and municipalities must be assessed and there must be a transfer of best practices and lessons learned.

 

3.3.3     Project plans

 

It would be prudent for provinces to institute project plans, containing timeframes and augmented by progress reports, whereby the process of registering and valuing provincial properties could be addressed.

 

4.         Limpopo Province

 

4.1        Third Quarter Spending

  

The provincial department of Public Works in Limpopo had a total adjusted budget of R15.154 million for the 2010/11 financial year. They province did not agree with National Treasury that they had only spent R7.577 million (50.0 per cent) of their budget at the end of the third quarter. They indicated that they had proved to the Provincial Treasury that the expenditure actually stood at R11.275 million (74.4 per cent) at the end of the third quarter. In response National Treasury indicated that they believed their figure of 50.0 per cent to be a true reflection of the spending as at 31 December 2010.  The Department was requested to revert back to the Committee within seven days of the meeting with the correct information on the disputed figure. The discrepancy had been a result of a system error which resulted in a payment to one municipality not being fully effected. Once the error was identified, the province attempted to correct the entry, however Provincial Treasury had already extracted the report from the Basic Accounting System (BAS). The provincial Department had managed to pay municipal rates for 658 of the properties. The outstanding properties had not been paid for the following reasons:

 

* 323 properties did not appear on their respective municipal valuation rolls

* 50 properties belonged to private individuals

* 785 properties had been transferred to community members

* 39 properties had not received municipal bills

* 23 properties’ bills had been received, but they did not tally with information that had been loaded on the iE-Works system

* 391 properties could not be processed due to insufficient budget.

 

The province had spent R14. 730 million (97.2 per cent) of the budget by the end of the 2010/11 financial year.

 

4.2        Challenges

 

4.2.1     Capacity of municipalities

The provincial department did not receive invoices from municipalities for all the properties on the list received from the national Department of Public Works. Where properties were being billed, incorrect invoices led to delays in payment by the department.

 

4.2.2     Asset register

In the 2008/09 financial year, a list of 3 557 properties had been devolved from the national Department of Public Works. Of this number, the DPW had only been paying bills for 869, while the balance of 2 688 properties had to be reconciled and verified. The reconciliation process had confirmed 2 269 properties. The rural nature of the province posed a major challenge to the process of asset re-identification and verification. In addition, there had been problems with the service provider who had been assisting in the process, and the matter was under arbitration.

 

4.3        Actions to address challenges

  

4.3.1     Coordination with municipalities

      

In order to address the key challenge of coordination between the department and the municipalities, a coordinating forum had been established. This forum was led by the provincial Local Government Department and included the provincial Public Works Department, Provincial Treasury, as well as the provincial Departments of Health and Education

 

4.3.2     Asset verification process

      

In order to avoid delaying progress by waiting for the legal process with the service provider to be completed, an alternative strategy had been devised to complete the asset verification process. The department had approached the provincial local government department for permission to make use of community development workers and ward committees. The department was in the process of designing a module for a one day workshop to train them and enable them to assist with the verification of the properties within their wards. The ward lists will be compared with the current asset register and properties not reflected accurately could be surveyed and valuated. The department had set itself the target of completing this process by the end of the 2011/12 financial year.

 

5.         Eastern Cape Province

 

5.1 Third Quarter Spending

 

The total allocation of R283.429 million to the provincial Department of Public Works included the amount of R135.962 million that had been rolled over from the previous year. Of this allocation, the province had spent R134.372 million (47.4 per cent) at the end of the third quarter. The Department had managed to pay municipal rates for 7 303 of the 14 632 devolved properties. The outstanding properties had not been paid for the following reasons:

 

 * 467 properties belonged to the national Department of Public Works;

 * 222 properties were privately owned;

 * 692 properties were owned by municipalities;

 * 386 properties were owned by the National Housing Board;

 * The required documentation was awaited on 1 828 properties;

 * 8 properties had not been billed for;

 * 2 properties had no accounts;

 * The payment for 49 properties were in the process of being made;

 * 2 properties had been exempted from rates;

 * 512 properties had not been valuated;

 * 3 190 properties were unsurveyed;

 * 2 properties belonged to the Department of Rural Development and Land Reform; and

 * 8 properties the province had not been able to verify.

 

By the end of the financial year, R220.539 million (77.8 per cent) had been spent. The Department requested that the balance of R62.800 million be rolled-over to deal with the backlog of payments on certain properties.

 

5.2        Challenges

 

5.2.1     Capacity of municipalities

 

The financial management capacity of municipalities remained a challenge. This had led to various problems, including late, incorrect and manual invoicing and payments not being correctly allocated. Invoices also did not distinguish between rates and taxes and municipal services. In addition, the devolution took place based on an unaudited and unverified immovable asset base. The department was being invoiced for rates and taxes on private property, property owned by National Government and property owned by the municipalities themselves. These errors were not being corrected by municipalities and continued to reflect as debt-owed by the department. This had led to significant discrepancies between amounts reported as outstanding by municipalities and by the department.

 

5.2.2     Unsurveyed and unregistered land

 

The province experienced difficulty in the rural areas where most of the properties billed are located on unsurveyed and unregistered land. The Rates Act did not make provision for payment of rates and taxes on unsurveyed or unregistered land even though there were schools, hospitals and clinics on this land. The department required a legal opinion on whether it was liable for these payments.

5.2.3     Amounts due prior to devolution

      

When the function was devolved on 30 June 2008, there had been certain amounts due by the national Department of Public Works. Municipalities did not transfer these outstanding balances to a separate account, but charged them to the province.  The province was being charged interest on the outstanding balances of the national Department of Public Works as at 1 July 2008. The total outstanding amount claimed by various municipalities amounted to R10.678 million. However, this amount had not been audited and, as a result of factors like changes in management and billing systems, municipalities had not been able to present supporting documents to prove these outstanding amounts. As a result, some sort of intervention was required.

 

5.3        Actions to address challenges

 

5.3.1     Municipal Finance Unit

      

A strategically focused Municipal Finance Unit had been established and three managers and eight assistant managers had been appointed. The managers were supported by nine administrative officials. This unit was dedicated to all activities relating to municipalities. The province had been divided into three regions, with each manager dedicated to a group of municipalities and responsible for the resolution of queries, the processing of payments and the reconciliation of accounts.

 

5.3.2 Immovable Asset Register

 

The province was in an advanced stage of completing its Generally Recognised Accounting Practices (GRAP) compliant immovable asset register. Upon completion, the register would be handed over to municipalities and would –

 

* Facilitate the scientific calculation of the annual liability to municipalities;

* Facilitate accurate cash flow projections;

* Enable the department to apply for the correct annual appropriation; and

* Shorten the payment turnaround process due to reduced verification procedures.

 

6.         Gauteng Province

 

6.1        Third Quarter Spending

  

Of the total allocation of R294.457 million for the 2010/11 financial year, the provincial Department of Infrastructure Development had spent only R1.475 million (0.5 per cent) by the end of the third quarter. By the end of the financial year, R213.336 million (72.5 per cent) had been spent. This represented a year-on -year decline in spending of 19.1 per cent. No invoices had been submitted during the financial year by the Lesedi, Nokeng Tsa Taemane and Westonaria municipalities, resulting in the R10.267 million that had been allocated to them being under-spent. In addition, no Grant funds had been allocated to the Kungwini Municipality, as the Department had not received any indication of what was due to this municipality.

 

6.2        Challenges

  

6.2.1     Capacity of municipalities

Municipalities often submitted invoices late, or not at all. In addition, incorrect billing occurred as a result of incorrect valuations of property. Informing municipalities of the mistakes and waiting on revised valuations resulted in late payment. The province had also given its projected expenditure figures to National Treasury based on submissions by municipalities, only to find that the invoices ultimately received were less than originally indicated by municipalities, leading to further under-spending.

 

6.2.2     Asset register

 

The asset register of the provincial department of infrastructure development was not up to date. Properties often did not match the department’s asset register although municipalities were certain that the properties belonged to the province. Furthermore, the list of devolved properties from the national Department of Public Works stood at 8 279 properties. Residential properties had however not been included on the list and were therefore not included in the rates and taxes invoices. 

 

6.3        Actions to address challenges

      

6.3.1     Improved inter-governmental relations

Various forums had been established to improve the cooperation with municipalities. There was continuous political engagement with municipalities through the Premier’s co-ordinating council, where SALGA was also represented. The chief financial officer (CFO) of the department met bi-annually with the CFO’s of the various municipalities. In addition, the head of the department regularly wrote letters to all municipal managers to urge them to submit invoices timeously.

 

6.3.2     Completion of asset register

The province was updating its asset register at the time and had set itself the deadline of 2014 for the completion of the asset verification process.  In terms of residential properties, a project was undertaken in conjunction with the national Department of Public Works, 753 residential properties had been registered thus far. Discussions were underway to include these on the devolved property list. The list would subsequently be sent to the respective municipalities for billing.

 

7.         National Department of Public Works

 

7.1        Spending

 

According to the national Department of Public Works, provinces had spent 78.0 per cent of the Grant allocation during the 2008/09 financial year. In 2009 provinces had been allowed to use about 4 per cent of the Grant for capacity building within the departments to manage the Grant.  In the 2009/10 financial year there had been an improvement of 1.0 per cent, bringing the expenditure to 79.0 per cent. The Department had expected a greater improvement in the 2010/11 financial year, and if one looked at the expenditure against the payment schedule for 2010/11, the provinces had spent almost 84 per cent of the budget. However, as the figure was influenced by the roll-overs received by provinces, the actual expenditure was only 78 per cent.

 

7.2        Challenges

 

7.2.1     Asset registers

 

According to the Department, there is not a focused, concerted effort in all provinces to establish a credible asset register, even though the Department had urged all provinces to budget for this.

7.2.2     Capacity of municipalities

 

Due to lack of capacity and inefficient billing systems, municipalities do not bill provinces effectively for rates and taxes. Provinces needed to provide assistance to municipalities in this regard.

 

7.2.3     Arrear rates and taxes 

 

According to the Department, the amount of money devolved was based on the properties that national had previously been paying for. Now new properties were being discovered by provinces and this created a challenge, as the Department did not have the extra cash to pay for these. National Treasury would have to be asked to assist in this regard.

 

7.2.4     Vesting and registration

 

The Department acknowledged that a number of provinces had been experiencing problems around the issue of vesting and registration. Legal intervention was required in cases where, for example, there were schools or clinics on land that belonged to a municipality and a province was expected to pay rates and taxes, even though the land was not registered.

 

7.3        Intervention strategies

  

7.3.1     Asset verification projects

 

All provinces needed to make a concerted effort to compile comprehensive, credible asset registers. Once the asset registers were complete and reconciled with the municipal valuation rolls, better projections would be possible, and the municipalities could be assisted more effectively. The Department was working closely with National Treasury to revise the sector guidelines. This would assist in standardising asset registers by providing consistency in defining properties.

 

7.3.2     Improved billing by municipalities

 

The Department was working closely with SALGA to assist low capacity municipalities. Some of the challenges, like retrospective billing, interest charges and unfair rates, had been escalated to the MINMEC meetings.

 

7.3.3     Provincial/ Municipal Debt Management Forum

 

The Department encouraged all provinces to actively participate in the Provincial/Municipal Debt Management Forums. It was within these forums that issues like the incorrect allocation of payments could be addressed.

 

7.3.4     Fast tracking of vesting process

 

A task team consisting of the national Department of Public Works, the provincial Departments of Public Works, the Department of Rural Development and Land Reform, the Deeds Office and the Surveyor-General had been established. This team is working to fast track the process. Although 32 contract workers had been deployed to the regional offices to assist with processing documents for vesting, this was not enough when one considered the backlog of properties to be registered. If the Department’s deadline of finalising the vesting process by 2013 was to be achieved, additional capacity would be required both within the Department and the Department of Rural Development and Land Reform.

 

7.3.5     Provinces to declare over-allocations

 

The Department had called a meeting with the CFO’s of all provincial departments to start a process whereby the budget would be reviewed timeously. A way had to be found for provinces to declare savings on time when they realised that they would be spending less than they had projected.

 

7.3.6     Improved reporting

 

The Department was engaged in a process to improve the way that provinces reported to the Department and to the national and provincial treasuries, in line with the Division of Revenue Act. This would serve to eliminate inconsistencies and to manage the Grant more effectively.

 

8.         Conclusions

 

After interacting with the provincial departments of public works, the national Department of Public Works and National Treasury, the Committee concluded the following:

 

8.1        Low expenditure against this Grant is still attributed to challenges existing in the municipal sphere, such as low capacity within municipalities, incorrect invoicing practices related to the application of taxes and rates, late or non-submission of invoices and incomplete valuation rolls and property verification.

 

8.2        The lack of complete and credible asset registers in most provinces remains a contributory factor to the low expenditure on this Grant.

 

8.3        Some intergovernmental forums have proved successful in resolving some of the capacity issues at municipal level, which have resulted in improved expenditure, for example, KwaZulu-Natal and the Western Cape.

 

8.4        The issue of government properties such as schools and clinics etc. on un-surveyed unregistered land was brought to the attention of the Committee by the Eastern Cape provincial Department of Public Works. The problem is that the Rates Act does not make provision for payment of rates and taxes on properties that are located on unsurveyed or unregistered land and therefore the department is seeking a legal opinion on this matter.

 

8.5        Outstanding municipal bills prior to devolution of properties from the national sphere to the provincial sphere, has become problematic for some provinces, as their current allocations do not make provision for this outstanding debt.

 

9.         Recommendations

 

Having considered the submissions by provincial departments of public works, the national Department of Public Works and National Treasury on the spending patterns on the Devolution of Property Rate Funds Grant in the third quarter of the 2010/11 financial year, the Select Committee on Appropriations recommends that the National Council of Provinces considers the following:

 

9.1        The national Department of Public Works should ensure that provinces institute project plans containing timeframes and submits progress reports on those projects, whereby the process of registering and valuing provincial properties could be addressed. The progress report should be submitted to the National Council of provinces within 120 days after the adoption by the House.

 

9.2        The national Department of Public Works should intervene and resolve the issue regarding outstanding municipal bills prior to devolution of properties.

 

9.3        The national Department of Public Works should take steps to ensure that best practices and lessons learned in improving expenditure by the provinces of the Western Cape and Kwazulu-Natal, are transferred to other provinces.

 

9.4        The Gauteng’s provincial Department of Infrastructure Development should submit to the House, a detailed Action Plan on how the Department will resolve the billing issue relating to municipalities that have been reported to the Committee to be “non-responsive”. They should further report on the billing issues in the Lesedi, Nokeng Tsa Taemane and Westonaria municipalities and specifically the non-allocation of grant funding to the Kungwini Municipality. These reports should be submitted to the National Council of Provinces within 60 days after the adoption of this report by the House.

 

Report to be considered.

 

3.         Report of the Select Committee on Appropriations on the third quarter spending patterns on the Community Library Services Grant for the 2010/11 financial year, dated 22 June 2011

1.         Introduction

 

The Select Committee on Appropriations (the Committee) invited six provincial departments of Arts and Culture, who under-spent on the Community Library Services Grant, to come and make a presentation on their third quarter spending in the 2010/11 financial year. The statistics on spending patterns were published by National Treasury in March 2010. 

 

The meeting took place on 25 May 2011 and was held in Committee Room E249 in Parliament, Cape Town.

 

2.         Terms of reference

 

The public hearings formed part of the Committee’s ongoing interaction with provinces to monitor their spending patterns on conditional grants allocated to them. A framework for the grant sets out the purpose of the grant, measurable objectives, conditions, allocation criteria, and past performance among other things.

 

Provinces were requested to make an oral presentation on the Community Library Services Grant and to take into consideration the following:

 

* Data trends in allocations, transfers and actual expenditure of conditional grants of the department;

* Assessment of department’s monitoring capacity for the 2010/11 financial year and indicate under-spending and what capacity constraints that impacted on these outcomes;

* Report whether monthly reports are received from receiving departments or municipalities, and if not, what the departments are doing in order to ensure compliance with monthly reporting; and

* Lastly provincial departments were expected to indicate whether they or did not deviate from their 2010/11 business plans on the grant.

 

The provincial departments of Arts and Culture of Eastern Cape, KwaZulu-Natal, Limpopo, Mpumalanga, Northern Cape and North West were identified and invited. All provincial departments, except Mpumalanga and Limpopo, honoured the invitation.

 

The National Treasury was invited to brief the Committee on the third quarter spending of the above-mentioned provincial departments.

 

3.         Presentations

 

The National Treasury and the provinces of Northern Cape, Eastern Cape, North West and KwaZulu-Natal made their presentations as follows:.

 

3.1        National Treasury

 

The National Treasury reported that, for the third quarter of the 2010/11 financial year, the adjusted budget had been R561. 061 million and the total projected outcome, R507. 822 million. They added that at the end of the third quarter provinces had spent R300. 383 million or 53.5 per cent. Only the Province of Limpopo had projected an over-spending of R6. 384 million. Three provinces had projected an under-spending, which in total amounts to R59. 623 million (that is R39. 371 million for Eastern Cape, R8. 211 million for Mpumalanga and R12. 041 million for Northern Cape).

 

The National Treasury reported that audited outcomes of the third quarter in 2009/10 financial year showed that provinces had spent R281. 178 million of the R460. 832 million adjusted budget. Therefore, National Treasury presented that in comparing year-on-year growth with the third quarter in the 2009/10 financial year; provinces had spent 6.8 per cent more in the third quarter of the 2010/11 financial year. Moreover, the National Treasury highlighted that preliminary audit outcomes of the 2010/11 financial year indicated that provinces had spent R493. 274 million or 87.9 per cent of the adjusted budget. Added to that, National Treasury said provinces had under-spent by R67. 787 million or 12.1 per cent of the adjusted budget. On a year-on-year comparison, National Treasury reported that provinces as at 31 March 2011 had spent R417. 993 million or 18.0 per cent more as compared to the 2009/10 financial year audit outcomes.

 

On issues affecting expenditure in provinces during the first three quarters of the 2010/11 financial year, the National Treasury listed the following:

 

* Eastern Cape: There is slow progress on the Mdantsane library project. The explanation given was that provincial officials had cited misunderstandings with the local community as leading to delays in the project. However, further investigation had also revealed challenges with the contractor’s delivery performance;

* KwaZulu-Natal: Internal supply chain management challenges had led to a slow start to projects and therefore under-expenditure;

* Limpopo: The upgrading of projects and the purchasing of library material had been delayed due to slow appointment of service providers which suggested challenges in the internal supply chain management or poor planning.;

* Mpumalanga: This province had also struggled to manage its internal supply chain processes, as well as contractor performance. As a result most expenditure had only taken place in the fourth quarter;

* Northern Cape: there had been a delay in finalising Service Level Agreements (SLAs) with municipalities, and this contributed to a significant decline in expenditure as compared to the previous year’s expenditure; and

* North West: The province was clearly recovering from a low spending performance, but execution of planned projects was still very slow (late appointment of contractors), despite funds having been made available for capacity building that included staff.

 

The National Treasury further reported that though the mentioned challenges were due to supply chain management regulations; these regulations were necessary. The National Treasury explained that in order to safe-guard the use of public funds, supply chain regulations demanded that proper processes and planning were adhered to.  However, it was clear that provinces could manage these processes in a more efficient manner. The National Treasury submitted that reports highlighted delays in the supply chain management processes in Eastern Cape, Free State, Limpopo, Mpumalanga and North West; and much of the shortfalls involved infrastructure upgrades and new buildings.

 

Furthermore, the Committee was informed that various initiatives and support systems were currently being implemented by the National Treasury to improve the situation. They included the following:

 

* Building technical and planning expertise through the Infrstaructure Delivery Improvement Programme (IDIP) programme in order to improve the performance of public works departments and therefore their delivery of library infrastructure projects;

* The Financial Management Improvement Plan. (FMIP) programme was designed to progressively roll out best practices in supply chain management, financial management and risk management within provinces; and

* Donor funding for these and other programmes was being sourced and the development aid process would be integrated into the budget process going forward.

     

The National Treasury informed the Committee that the success of these initiatives would be greatly improved by more attentive provincial management, as well as stronger leadership and oversight by accounting officers over community library programmes.

 

The National Treasury concluded that the disjuncture between the functional assignment of the libraries function (Schedule number 5A) and the current municipal operation of libraries presented challenges to provincial departments. Therefore, while SLAs between municipalities and provinces had temporarily assisted in the management of the function, certain provinces (especially KZN and Western Cape) had embarked on the provincialisation of the function, and this was likely to simplify the management of libraries.

 

3.2        The Province of Northern Cape

 

The provincial Department of Arts and Culture of the Northern Cape (PoNC) reported that its final appropriation for 2010/11 had been R77. 314 million and the actual amount spent had been R35. 297 million or 45.7 per cent. The PoNC reported that it had projected to spend R51. 647 million. The projected budget had aimed to cover compensation of employees (R6. 431 million); goods and services (R24. 461 million); transfers and subsidies (R7. 346 million); and payment of capital assets (R13. 409 million). Above all, the PoNC submitted unaudited financial outcomes for the financial year that ended on 31 March 2011. The province indicated that at the end of the 2010/11 financial year it had spent R61. 364 million or 79.4 per cent of its financial appropriation (R77. 314 million). The PoNC, reported that their allocation was reduced by R12. 048 million as per  Government Gazette number 34 192 of 4 April 2011 due to under expenditure in the 2009/10 financial year.

 

The PoNC reported that the reasons for under-spending R15. 042 million on the current payments line-item included delays in recruitment by the human resources unit and payment of service providers by the finance section. Under-spending of R301 000 on line-item transfers and subsidies had been due to non-compliance by municipalities to regulatory and reporting requirements. Added to that, the PoNC reported that under-spending of R1. 007 million on payments on capital assets had been mainly because there delays had been experienced in infrastructure projects and the Information Communication and Technology (ICT) rollout.

 

When asked about other reasons for under-spending, the PoNC reported that having vacancies for two financial years at critical positions like Director of Finance, Finance Manager, and Supply Chain Manager had further contributed to under-spending on the Grant. The appointment of these candidates were, however, in progress and it would be finalised before 01 July 2011. They  added that transfer of the roll-over had only been processed around 15 December 2010 and at that time construction businesses had been closed for the holidays.

 

With respect to service delivery targets per project at the end of the third quarter, the PoNC reported that it had targeted to commence constructing one new library but it had failed to meet its target. The PoNC added that it had targeted to employ 190 new employees but only 125 had been employed, no levels were indicated. On project training and development, the PoNC submitted that it had planned to train or develop two employees but seven had been trained or developed. With respect to outreach and promotion projects, the PoNC said it had reached its target of five planned promotional projects. On providing support to municipalities, the PoNC presented that of the annual target of providing support to 28 municipalities, 22 had received transfers. With respect to the Information Communication Technology (ICT) roll-out, 114 libraries had been targeted but none had been provided with Information Communication Technology (ICT). Lastly, the PoNC reported that it had targeted to spend R100 000 on new material for libraries but had only spent R6 200 as at the end of the third quarter.

 

With respect to reasons for under-spending on the above projects, the PoNC indicated the following:

 

* The construction of the Nababeep library had been delayed due to slow processes in the supply chain;

* Staff turnover had been high and delays had been experienced in the recruitment and selection processes;

* Not all transfers to municipalities had been executed due to non compliance with requirements.

* Roll-out of the ICT infrastructure and systems had been delayed as challenges had been experienced with the State Information Technology Agency (SITA) around the procurement processes and systems; and

 * Delays had been experienced in the delivery of library material from suppliers.

 

With regards to monitoring of transfers, the PoNC reported that monthly progress reports were submitted by municipalities and district offices conducted regular visits to municipalities to ensure adherence to the business plans. Therefore, when municipalities did not comply with business plans, interventions were made to ensure compliance through correspondence and meetings were convened with the municipal officials concerned.

 

The PoNC reported that among the factors that contributed to under-spending was the fact that infrastructure projects were normally done through third parties –such as the provincial Department of Roads and Public Works for infrastructure projects and SITA for ICT projects. Also mentioned by the PoNC was that municipalities had experienced capacity constraints, resulting in non-submission or late submission of correct and compliant business plans.

 

With respect to the 2010/11 business plan, the PoNC reported that it planned to achieve the following:

 

 * Provide services in rural areas

 * Implement a digital library service system at 114 sites

* Campaign for library usage and reading promotion programmes (run-to-read campaign and Northern Cape Writers Festival)

 * Construct one new library

 * Train staff on the third annual Library Services Symposium

 * Transfer funds to municipalities on time

 * Provide IT infrastructure maintenance to 86 points.

 

Furthermore, the PoNC reported that there had been no deviations from the 2010/11 financial year business plan. The business plan had been amended to utilise projected under-spending in compensation of employees on three projects: the liberation struggle heritage legacy book project; the Management Information System; and solar panels for containers.

 

3.3        The Province of Eastern Cape

  

The provincial Department of Arts and Culture of the Eastern Cape (PoEC) reported that it had an adjusted budget of R82. 163 million, which includes an allocation of R77. 240 million plus a roll-over of R4. 923 million. The projected budget had been aimed to cover compensation of employees (R11. 920 million); goods and services (R27. 444 million); transfers and subsidies (R1.000 million); building and other fixed structures (R29. 685 million) and machinery and equipment (R7. 191 million). The PoEC said that, for the third quarter, it had budgeted to spend R23. 800 million but the actual spending had been R8. 141 million, therefore they had under-spent by R15. 659 million.

 

With respect to expected outcomes, the PoEC submitted that it intended to do the following:

 

* Improve library infrastructure and services that reflect the specific needs of the communities they serve. (Since the inception of the grant , 79 libraries have been renovated and this has improved library usage as these libraries are now accessible. A further two libraries -Mdantsane and Mount Ayliff-are under construction;

* Transform and equip library and information services meant for all rural and urban communities. An indicator of that was that in the 2010/11 financial year a total of 70,000 library materials were purchased and delivered to public libraries;

* Improve co-ordination and collaboration between national, provincial and local government on library services. An indicator of that was that the Stakeholders Consultative Workshop and library summit were convened and they have enhanced the relationship with municipalities;

* Improve a culture of reading. The South African Library for the Blind benefits from the Grant by providing a special service for people with visual disabilities; and

* Improve staff capacity at urban and rural libraries to respond appropriately to community knowledge and information needs. Qualified librarians had been employed and deployed to public libraries. Operational hours of libraries had since improved with 55 per cent because libraries were now open eight hours a day as a result of the additional staff appointed.

 

With regards to delivery indicators and targets per project at the end of the third quarter, the PoEC reported that it had targeted to upgrade and rehabilitate nine libraries but only two libraries had been upgraded due to the outcome of a court case in KwaZulu-Natal (Case No 10878/2009). The PoEC added that it had targeted to provide ICT infrastructure to seven libraries; maintain automated library facilities in 100 libraries; install tattle-tape detection and Closed-Circuit Television (CCTV) security systems in 17 libraries; and provide furnishings to 11 libraries. All these targets had been met. With respect to a new and updated library collection, the PoEC reported that it had purchased and distributed 40 000 books. On improvement of reading culture and capacitating of staff at urban and rural libraries, targets had been met.

 

When the Committee expressed its displeasure about the under-spending, the PoEC explained that many factors had contributed to the under-spending. These included:

* The awarding, by the Department of Public Works, of infrastructure projects to emerging contractors who have cash-flow challenges;

* State Information Technology Agency  (SITA) delays in billing because their invoices come from their head office; and

* A high staff turn-over due to conditions of employment - appointment only on contract.

 

Remedial actions implemented and proposed by the PoEC included the following:

 

* Projects were submitted to the Department of Public Works frequently so that the contractors could start implementing projects early and be able to complete their work within a financial year;

* Meetings were held at national level with SITA to renegotiate for the  de-centralisation of their billing system;

* At provincial level meetings were held to pressurise SITA to submit invoices; and

* Conditional grant staff should be incorporated into the equitable share to ensure sustainability and continuity.

 

When asked by the Committee how it monitors the spending of the Grant funds, the PoEC explained that it had a monitoring and evaluation unit under its Strategic Planning Management component that was assisting in ensuring that projects were done according to plans (Business Plan, Annual Performance Plan and Operational Plan) and reporting was done monthly and quarterly. Added to that, In-Year-Monitoring was done internally to check the spending patterns against cash-flow projections. These reports were then sent to the provincial and national treasuries through the national Department of Arts and Culture (NDAC). Moreover, the PoEC submitted that monthly and quarterly reports were submitted to NDAC and quarterly reviews were also held with NDAC. The PoEC further explained that the Grant had its administration unit, which included a  Project Manager, Acquisitions Officer and an Administrative Officer. 

With respect to achievements, the PoEC reported that, the design for the Mt Ayliff library had been finalised and a tender for constructing it had been advertised. On Mdantsane Library, the PoEC reported that the conflict with the community regarding the steering committee had since been resolved and the project was started in December 2010. The Committee was further informed that all tenders for containers; outdoor learning equipment and detection systems had been awarded. Furthermore, the PoEC reported that all 88 libraries targeted for ICT infrastructure had been cabled and provided with computers, internet and e-mail facilities. 

 

The PoEC concluded that the high priority in the province was provision of infrastructure to all libraries but unfortunately infrastructure projects were not implemented as fast as they would like. The PoEC added that since the inception of the Grant they had managed to upgrade a total of 64 (sixty four) libraries. The PoEC further explained that the infrastructure field was too technical and it had been outsourced to implementing agents (provincial Department of Public Works and COEGA). 

 

3.4        The Province of North West

 

The provincial Department of Arts and Culture of North West (PoNW) reported that in the 2010/11 financial year its allocation was R59. 275 million, with a roll-over of R13. 433 million. The PoNW said the total allocation, R72. 708 million, for 2010/11 was allocated according to Grant priorities and only R34. 534 million or 47.5 per cent had been spent. The PoNW submitted that for the third quarter R15. 917 million had been transferred to the province and R14. 108 million had been spent.

 

With regards to service delivery targets per project at the end of the third quarter, the PoNW reported that it had met most of the targets. However, they had targeted to establish one mini-library to service visually impaired people, but failed to meet this target due to new procurement procedures that had been introduced. The PoNW added that they had targeted to upgrade infrastructure in four libraries but only backlogged projects from 2009-2010 had been upgraded. With respect to improvement of ICT infrastructure, the PoNW submitted that they had planned to install open source software in five libraries, but no software had been installed in the targeted libraries. With respect to providing library containers to three targeted municipalities, the PoNW said it had not finalised the procurement process by the end of the third quarter due to the slow process of adjudication. With regards to organising literacy campaigns, the PoNW presented that they had targeted to organise five campaigns, but only managed to arrange two.

 

With respect to achievements, the PoNW reported that the Grant had enabled the province to -

 

* Build four new libraries;

* Upgrade and maintain 12 community libraries;

* Procure library furniture for new and old libraries;

* Provide security in 16 community libraries;

* Provide vehicles for library staff in 16 local municipalities;

* Implement brocade library systems in 14 community libraries;

* Install internet in 20 community libraries;

* Purchase 50 computers for new and upgraded libraries;

* Purchase and put three container libraries in three local municipalities;

* Introduce one mobile library bus to promote library services and reading awareness campaigns;

* Organise literacy campaigns in 21 local municipalities;

* Convene four events to raise awareness on reading books written in indigenous languages;

* Purchase promotional material to support reading awareness and library promotion programmes;

* Appoint 24 professional and support staff for community libraries;

* Provide five training courses to community library staff;

* Send 56 community librarians to attend profession conferences; and

* Involve Early Childhood Development Educators in the programme. 

 

With regard to reasons for under-spending, the PoNW reported that poor management of supply chain management processes had led to delays in implementing certain projects. The two major projects affected had been the Mamusa Library project and the Lebaleng Library project. The province added that Mamusa project funds had been transferred to the local municipality but the project was yet to be finalised. As a result, the PoNW had appointed internal auditors to investigate and compile a report on how the municipality had spent the Grant funds. If the municipality was found to have spent Grant funds on irrelevant projects, they would be forced to refund the province. The Committee was told that the Lebaleng project was at roof-level but no additional funds would be provided.

 

The PoNW reported that challenges leading to under-spending included –

 

* The lack of an effective system of supply chain management resulted in delays in approving tenders and appointing service providers to implement projects;

* The interface of the Basic Accounting System (BAS) and the Walker System caused delays with capturing of orders and also the misallocation of funds in the system delayed placing of orders;

* Delays with filling of vacancies. Some posts had been advertised in May 2010 but have only filled in December 2010 and March 2011; and

* The implementation of capital projects had been delayed by local municipalities who had failed to appoint consultants and contractors on time.

 

When asked how they intended to address the challenges, the PoNW submitted that remedial actions would include the following:

 

* An improved turn-around time to approve tenders and appoint service providers - the evaluation of tenders would take place within 14 days, adjudication within seven days and the tender awarded within seven days;

* The finance component would ensure that funds were correctly allocated at the beginning of the financial year to improve the time delays with capturing of orders;

* The human resources component would improve the turn-around time to fill vacancies and adhere to the three months period; and

* The PoNW had taken a decision to take over building projects of community libraries from municipalities. The provincial Department of Public Works, Roads and Transport would serve as implementing agent. Local municipalities who had shown commitment would be allowed to finish the projects already in progress.

 

3.5        The Province of KwaZulu-Natal

 

The provincial Department of Arts and Culture of KwaZulu-Natal (PoKZN) reported that for the 2010/11 financial year it had been allocated R38. 282 million plus a roll-over of R4. 992 million from the previous year for under-expenditure on infrastructure. Therefore the total allocation was R43. 274 million and the actual amount received was R37. 692 million because the fourth tranche of R5. 582 had been withheld. As at the end of the third quarter of financial year 201/11, the province spent R19.145 million or 44.2 per cent according to National Treasury.

 

With respect to Grant projects, the PoKZN reported that the Grant had made it possible for the province to -

 

* Install free internet at 72 libraries;

*  Employ cyber cadets at each site for training and capacitating members of the public in ICT skills;

*  Purchase prescribed textbooks supporting tertiary education distance learners;

* To collect, together with the department of education, material supporting the school curriculum;

* Migrate to a new automated library management system for all libraries;

* Increase access to 3 million resources;

* Construct a new library and regional library depot in Mbazwana;

* Construct a new library with a museum at Qhudeni;

* Purchase two pre-fabricated libraries for rural areas;

* Purchase four mobile library trucks to promote a reading culture;

* Provide mobile trolley collections in 19 sites with employment of volunteers who were provided with stipends;

* Employ eight support staff members for the Family Literacy Project; and

* Enter into a partnership with eThekwini Metro and the Carnegie Corporation for the building of a new city library for Durban.

 

With regards to key outcomes, the PoKZN reported that there had been  increased usage of libraries. Quantitative data had been collected from head counting systems  installed in 50 libraries, where usage had been higher than membership and circulation of books. The PoKZN added that there had been an increased usage by adult students in the mornings. Lastly, the province submitted that capacitating community members with computer skills had increased interest in library and internet services.

 

The PoKZN reported that it under-spent due to delays in the Mbazwana project:

 

* The Mbazwana Library/Depot which was a R31 million project, had experienced delays due to an underperforming contractor. The contractor had finally been dismissed mid-2010 for consistent poor performance and a new tender to finalise had been awarded. This delay had further been compounded by legal wrangling; and

* Delays in procurement of furniture and equipment for Mbazwana Library further affected expenditure. 

 

The PoKZN presented that monitoring of Grant spending was conducted through compiling monthly financial data reports and quarterly reports which were submitted to national Department of Arts and Culture and the Provincial Treasury on a regular basis. The Committee was informed that review meetings with the national Department of Arts and Culture were held quarterly. The PoKZN reported that internal auditing on conditional grant spending was an ongoing exercise. The PoKZN added that Evaluation Committee meetings and ProvincialTreasury bi-lateral meetings were convened. The PoKZN concluded that there was a regular monthly monitoring inspection by the provincial coordinator who had been appointed by the national Department of Arts and Culture.

 

With regards to the monthly reporting by municipalities, the PoKZN reported that all transfer payments made by the department to municipalities were supported by signed memorandums of agreement. Moreover, a monthly reporting template was sent to all municipalities and there was a dedicated staff member assigned to regularly make follow-ups with municipalities. The template showed improvement on compliance and reflected annual transfers only approved together with proof of expenditure of previously transferred funds. Furthermore, the PoKZN submitted that visits to all local municipalities would be conducted between April and June 2011 before the start of the new municipal financial year.

 

The PoKZN concluded that the Grant had allowed for great strides to be taken in the transformation of community libraries, as proposed in the Library Transformation Charter. The PoKZN concluded that community libraries had a significant role to play in the development of human capital, alleviation of poverty and the upliftment of society.

 

4.         Remarks by the national Department of Arts and Culture

 

The national Department of Arts and Culture (NDoAC) informed the Committee that severe inconsistencies had been picked up in 2008 between how municipalities spent grant funds and the objectives of the grant. The Department further said that infrastructure projects were complex in nature; they involved planning which required the involvement of all affected stakeholders, and a time frame of three years. The NDoAC explained that the first year was for planning and drawing up of specifications of projects; the second year for implementation of projects and the third year for finalising the project.

 

The NDoAC informed the Committee that they supported provinces and when challenges were identified, provinces were allowed to amend their business plans to ensure that under-spending was curbed. The NDoAC said provinces were constantly advised to use their discretion on whether or not to transfer funds to municipalities, if there were indications that a municipality did not have the capacity to manage infrastructure development. However, the Committee did not agree with this submission. The Committee cautioned the NDoAC that withholding funds should be a last resort and this could only be done after the third quarter.

 

When asked how they planned to assist and resolve challenges that provinces had submitted, the NDoAC reported that site visits and road shows to provinces would be strengthened. These would also be done when there were indications that provinces were under-spending. The NDoAC further said it was trying to create a platform for provinces to share library resources. Moreover, the NDoAC indicated that best practices were continuously shared by provinces and National Treasury was assisting in this regard.

 

5.         Conclusions

 

After interacting with the National Department of Arts and Culture, provincial departments and the National Treasury, the Committee concluded the following:

 

5.1 There are challenges which persist within provinces with respect to the supply chain management processes and they appear to be caused by poor management in the component (Recurring observation).

 

5.2 Officials who are occupying positions in the higher echelons of departments are not implementing or taking decisions as expected of them.

 

5.3 Most provincial departments reported that the provincial Departments of Public Works contributed to their under-spending because they appointed emerging contractors who then failed to complete projects because they had cash flow challenges or were inexperienced (Recurring observation).

 

5.4 Late submission of invoices or billing by SITA head office was identified as a contributing factor to the low expenditure.

 

5.5 The provincial Departments of Arts and Culture do not have a strategy to follow-up on funds transferred to municipalities and ensure that they are spent on the Grant’s priorities and this may open a loophole for misappropriation of taxpayers’ money (Recurring observation). This is due to the fact that the Committee had noted during the last interaction with provinces (on 06 June 2010) that conditional grant funds that were transferred to municipalities appeared as spent on financial reports of provinces; whereas municipalities were not spending or spent the funds on  projects that did not meet the criteria of the grant.

 

5.6 The provinces of KwaZulu-Natal and the Western Cape have moved the implementation function from municipalities to provinces.

 

6.         Recommendations

 

Having considered the briefings on the spending on the Community Library Services Grant by the National Treasury, the national Department of Arts and Culture and the afore-mentioned provincial departments, the Select Committee on Appropriations recommends that the National Council of Provinces considers the following:

 

6.1 That the provincial Departments of Arts and Culture should, as a matter of urgency, strengthen their supply chain management units to avoid delays in tendering processes;

 

6.2 That the national Department of Arts and Culture should assist provinces in fast-tracking the provincialisation of the community library services function;

 

6.3 That ,where there are staff shortages or high staff turnover due to conditions of employment, the national Department of Arts and Culture should provide assistance to provincial Departments of Arts and Culture;

 

6.4 That, even though emerging contractors should be capacitated, the provincial Departments of Public Works should ensure that they appoint experienced contractors who will provide better services to the poorest of the poor;

 

6.5 That the national Department of Arts and Culture should strengthen reporting requirements for municipalities to ensure that conditional grant funds transferred to municipalities is spent adequately; and

 

6.6 That all provincial Departments of Arts and Culture should adopt the approach of the North West’s provincial Department of Arts and Culture, and involve the Early Childhood Development practitioners in their Community Library Services Grant programmes.

 

Report to be considered.

 

MONDAY, 27 JUNE 2011

 

ANNOUNCEMENTS

 

National Assembly and National Council of Provinces

 

The Speaker and the Chairperson

 

1.         Classification of Bills by Joint Tagging Mechanism (JTM)

 

(1)        The JTM in terms of Joint Rule 160(6) classified the following Bill as a Constitution Amendment Bill:

 

(a) Constitution Eighteenth Amendment Bill [B 8 – 2011] (National Assembly – sec 74(3)(b)).

 

(2)        The JTM in terms of Joint Rule 160(6) classified the following Bills as section 75 Bills:

 

(a) Military Ombudsman Bill [B 9 – 2011] (National Assembly – sec 75).

(b) Implementation of the Geneva Conventions Bill [B 10 – 2011] (National Assembly – sec 75).

 

TABLINGS

 

National Assembly and National Council of Provinces

 

1.         The Minister of Justice and Constitutional Development

(a) Proclamation No R.58 published in Government Gazette No 33718 dated 29 October 2010: Referral of matters to existing Special Investigating Unit and Special Tribunal in terms of the Special Investigating Units and Special Tribunals Act , 1996 (Act No 74 of 1996).

 

(b) Proclamation No R.59 published in Government Gazette No 33718 dated 29 October 2010: Referral of matters to existing Special Investigating Unit and Special Tribunal in terms of the Special Investigating Units and Special Tribunals Act , 1996 (Act No 74 of 1996).

 

(c) Proclamation No R.62 published in Government Gazette No 33744 dated 08  November 2010: Referral of matters to existing Special Investigating Unit and Special Tribunal in terms of the Special Investigating Units and Special Tribunals Act , 1996 (Act No 74 of 1996).

 

(d) Proclamation No R.63 published in Government Gazette No 33744 dated 08  November 2010: Referral of matters to existing Special Investigating Unit and Special Tribunal in terms of the Special Investigating Units and Special Tribunals Act , 1996 (Act No 74 of 1996).

(e) Proclamation No R.1047 published in Government Gazette No 33747 dated 10 November 2010: Withdrawal of Government Notice No R.2095 dated 13 September 1985 in terms of the Dangerous Weapons Act, 1968 (Act No 71 of 1968).

 

(f) Proclamation No R.1048 published in Government Gazette No 33747 dated 10 November 2010:  Withdrawal of Government Notice No R.409 (Transkei) dated 7 March 1975 in terms of the Dangerous Weapons Act, 1968 (Act No 71 of 1968).

 

National Council of Provinces

 

1. The Chairperson

 

(a)        Annual Report on the Implementation of the Child Justice Act, 2008 (Act No 75 of 2008).

    

Referred to the Select Committee on Security and Constitutional Development for consideration and report.

 

TUESDAY, 28 JUNE 2011

 

ANNOUNCEMENTS

 

National Assembly and National Council of Provinces

 

The Speaker and the Chairperson

 

1.         Bills passed by Houses – to be submitted to President for assent

 

(1)        Bill passed by National Council of Provinces on 28 June 2011:

 

(a) Appropriation Bill [B 3 – 2011] (National Assembly – sec 77).

 

2.         Draft Bills submitted in terms of Joint Rule 159

 

(1) Government Employees Pension Law Amendment Bill, 2011, submitted by the Minister of Finance.

 

Referred to the Standing Committee on Appropriations and the Select Committee on Appropriations.

 

TABLINGS

 

National Assembly and National Council of Provinces

 

1.         The Minister of Finance

 

(a) Proclamation No 35 published in Government Gazette No 34356 dated    20 June 2011: Fixing of a date on which section 36(1) shall come into operation, in terms of the Revenue Laws Second Amendment Act, 2008 (Act No 61 of 2008).

 

(b)        Government Notice No R. 506 published in Government Gazette No 34363 dated 17 June 2011: Amendment of Rules (DAR/90), in terms of the Customs and Excise Act, 1964 (Act No 91 of 1964).

 

(c)        Government Notice No R. 507 published in Government Gazette No 34363 dated 17 June 2011: Amendment of Schedule No 2 (No 2/336), in terms of the Customs and Excise Act, 1964 (Act No 91 of 1964).

 

(d)        Government Notice No R. 508 published in Government Gazette No 34363 dated 17 June 2011: Amendment of Schedule No 4 (No 4/341), in terms of the Customs and Excise Act, 1964 (Act No 91 of 1964).

 

(e)        Government Notice No R. 509 published in Government Gazette No 34363 dated 17 June 2011: Amendment of Schedule No 5 (No 5/93), in terms of the Customs and Excise Act, 1964 (Act No 91 of 1964).

 

(f)         Government Notice No R. 510 published in Government Gazette No 34363 dated 17 June 2011: Amendment of Schedule No 2 (No 2/336), in terms of the Customs and Excise Act, 1964 (Act No 91 of 1964).

 

 

28 JUNE 2011               PAGE: 1 of 1

 


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