ATC130520: Report of the Portfolio Committee on Co-operative Governance and Traditional Affairs on Budget Vote 3: Co-operative Governance and Traditional Affairs, dated, 14 May 2013

Report of the Portfolio Committee on Co-operative Governance and Traditional Affairs on Budget Vote 3: Co-operative Governance and Traditional Affairs, dated, 14 May 2013

The Portfolio Committee on Co-operative Governance and Traditional Affairs, having considered Budget Vote 3: Co-operative Governance and Traditional Affairs, reports as follows:

A. INTRODUCTION

The Portfolio Committee on Co-operative Governance and Traditional Affairs considered the Budget Vote and Annual Performance Plans of the Department of Co-operative Governance and the Department of Traditional Affairs on 13 and 16 April 2013. The Committee considered the Strategic Plans of the entities reporting to it on 26 March and 23 April 2013.

B. PARTICIPANTS IN THE BUDGET HEARINGS

Those who appeared before the Committee included:

1. Minister of Co-operative Governance and Traditional Affairs and Departments of Co-operative Governance and Traditional Affairs

2. The South African Local Government Association (SALGA)

3. Municipal Demarcation Board (MDB)

4. Commission for the Promotion and Protection of Cultural, Religious and Linguistic Communities (CRL Commission)

5. South African Cities Network (SANS);

C. Briefings by Departments and Entities

C1 DEPARTMENT OF CO-OPERATIVE GOVERNANCE (DoCG) AND DEPARTMENT OF TRADITIONAL AFFAIRS (DTA)

C1.1 Department of Cooperative Governance

C1.1.1 Mandate:

The primary mandate of the Department of Co-operative Governances is to:

• develop and monitor the implementation of national policy and legislation seeking to transform and strengthen key institutions and mechanisms of governance to fulfill their developmental role;
• develop, promote and monitor mechanisms, systems and structures to enable integrated service delivery and implementation within government; and
• promote sustainable development by providing support to and exercising oversight over provincial and local government. .

C1.1.2 Vision and Mission :

Vision:

A responsive, accountable, effective and efficient system of cooperative governance

Mission :

The Department’s mission is to facilitate cooperative governance throughout all spheres of government in order to build a capable state that fulfils its developmental role and support all spheres of government, the institution of traditional leadership and associated institutions through:

• development of appropriate policies, integrated programmes and regulatory mechanisms;
• promotion of service delivery support through enabling mechanisms and intergovernmental relations;

· achievement of social cohesion through the creation of enabling mechanisms for communities to participate in governance; and monitoring and evaluating the implementation of cooperative governance policies and programmes

C1.2 Department of Traditional Affairs.C1.2.1 Vision and Mission

Vision

Integrated traditional affairs for sustainable deve l opment and social cohesion

Mission

To coordinate traditional affairs activities across government trough:

· development of appropriate policies, norms and standards, systems and regulatory framework governing traditional affairs;

· provision of support to traditional affairs;

· enhancement of information and knowledge management on traditional affairs; and

· promotion of culture, heritage and social cohesion.

C2 OVERVIEW OF POLICY PRIORITIES FOR THE 2012/13 FINANCIAL YEAR

The Department of Cooperative Governance and Traditional Affairs (COGTA) is tasked with developing national policies and legislation relating to provinces and local government. It also ‘monitors the implementation of legislation relating to intergovernmental relations, local government administration and financial management, traditional leadership and governance, and disaster management.’ [1]

In terms of the 12 priority outcomes Cabinet adopted in 2010 as a new approach to achieving results between 2010 and 2014, the Minister for Cooperative Governance and Traditional Affairs is responsible for achieving outcome 9: a responsive, accountable, effective and efficient local government system. The National Development Plan (NDP), endorsed by Cabinet in November 2012, is the overarching framework on which the 12 priority outcomes are based.

Outcome 9 is in turn informed by 7 strategic outputs: implement a differentiated approach to municipal financing, planning and support; improve access to basic services; implement the Community Work Programme; actions supportive of the human settlements outcome; deepen democracy through a refined Ward Committee Model; administrative and financial capability; and a single window of Coordination. These strategic outputs also constitute the Department’s Strategic Goals for 2009 – 2014.

Nine Strategic Goals informed the Department’s policy priorities for 2012/13:

· A policy platform that provides a differentiated approach to municipal financing, planning and support is implemented

· Improved access to basic services

· Implementation of the Community Work Programme

· Local democracy through a refined Ward Committee model is deepened

· Administrative and financial capabilities of municipalities are enhanced

· Strengthen cooperative governance and provide oversight and support to provincial and local government

· Improved coordination of interventions impacting on local government

· Facilitate economic development at local level

C3 POLICY PRIORITIES FOR 2013/14

Over the MTEF period, from 2013/14 to 2015/16, the Department has adopted the same strategic goals as the previous year, but with minor changes. The goals relating to the implementation of the Community Work Programme and that of facilitating economic development at the local level have been merged. The goal relating to improved coordination of interventions impacting on local government does not appear in 2013/14. It is not clear whether the issue is not longer a priority for the Department.

There is a new emphasis on infrastructure development and strengthening measures to fight corruption and unethical conduct. This reflects an attempt to align departmental priorities with the key thrusts of this year’s State of the Nation Address. As discussed later, it is not clear whether there is any specific budget allocation or a dedicated sub-programme to drive the commitment to strengthen measures to fight corruption and unethical conduct. .

Following the changes discussed above the Department’s policy priorities for 2013/14 now appear as follows:

· Facilitate the implementation of a policy framework that provides for a differentiated approach to municipal financing, planning and support

· Facilitate improved access to basic services and sustainable infrastructure development

· Facilitate implementation of the Community Work Programme and sustainable economic development at local level

· Strengthening the effectiveness of cooperative governance through the development and roll-out of policies and legislation

· Strengthen measures to fight corruption and unethical conduct

· Strengthen, coordinate and support effective integrated disaster management and fire services

· Deepen participatory democracy through a refined committee ward model

· Administrative and financial capabilities of municipalities are enhanced

For the 2013 MTEF government ‘has adopted a policy of changing the composition of spending to focus on promoting economic support and development, investing in infrastructure, creating jobs and enhancing local government capacity.’ [2] There is a clear attempt by the Department to align its Strategic Goals over the 2013 MTEF with these policy thrusts.

C4 Budget Analysis

Overall budget

Budget vote 3 is aimed at improving cooperative governance across the three spheres of government in partnership with institutions of traditional leadership to ensure that provinces and municipalities carry out their service delivery and development functions effectively . As indicated in Table 1 below, there are 7 budget programmes that fall under this vote.

Table 1

Programme	Budget		Nominal Increase / Decrease in 2013/14	Real Increase / Decrease in 2013/14	Nominal Percent change in 2013/14	Real Percent change in 2013/14
R million	2012/13	2013/14
Administration	197.5	219.0	21.5	9.9	10.89 per cent	5.01 per cent
Policy, Research and Knowledge Management	49.3	49.5	0.2	- 2.4	0.41 per cent	-4.92 per cent
Governance and Intergovernmental Relations	38 111.9	40 706.7	2 594.8	436.1	6.81 per cent	1.14 per cent
Disaster Response Management	555.4	585.1	29.7	- 1.3	5.35 per cent	-0.24 per cent
Provincial and Municipal Government Systems	285.2	272.1	- 13.1	- 27.5	-4.59 per cent	-9.65 per cent
Infrastructure and Economic Development	15 553.4	16 315.2	761.8	- 103.4	4.90 per cent	-0.66 per cent
Traditional Affairs	102.5	105.2	2.7	- 2.9	2.63 per cent	-2.81 per cent
TOTAL	54 855.2	58 252.8	3 397.6	308.4	6.2 per cent	0.56 per cent

The total allocation for this vote in 2013/14 is R58.2 billion, which, when taking into account inflation, represents a real increase of 0.56% from R54.8 billion during the previous financial year. Spending is concentrated on three programmes: Government and Intergovernmental Relations, Infrastructure and Economic Development, and Disaster Response Management. These programmes host sub-programmes on Local Government Equitable Share, the Municipal Infrastructure Grant and Disaster Relief Transfers respectively.

All three sub-programmes receive very large amounts of funds. As a result the problem of under-spending tends to be more pronounced in these areas. As the Minister of Finance noted recently, ‘the withholding of local equitable share funds to municipalities where conditional allocations from previous years have not been fully spent, unspent disaster relief grants, delays in the Community Work Programme, and slower than anticipated spending on school infrastructure backlogs are the main areas of spending underperformance.’ [3]

Out of the 71 targets set for the 2012/13 period, 53 were achieved, 14 partially achieved and 4 not achieved.

Programme 1: Administration

This programme provides management, leadership and administrative services to the Department of Cooperative Governance and Traditional Affairs. It consists of 11 sub-programmes as shown in Table 2 below.

Table 2

Sub- Programme	Budget		Nominal Increase / Decrease in 2013/14	Real Increase / Decrease in 2013/14	Nominal Percent change in 2013/14	Real Percent change in 2013/14
R million	2012/13	2013/14
Ministry	24.9	29.3	4.4	2.8	17.67 per cent	11.43 per cent
Management	17.7	14.3	- 3.4	- 4.2	-19.21 per cent	-23.49 per cent
Chief Operating Officer	20.3	22.0	1.7	0.5	8.37 per cent	2.63 per cent
Corporate Services	38.0	49.2	11.2	8.6	29.47 per cent	22.61 per cent
Financial Services	20.6	28.0	7.4	5.9	35.92 per cent	28.71 per cent
Communication and Liaison	22.7	20.3	- 2.4	- 3.5	-10.57 per cent	-15.32 per cent
Legislative Review and Drafting	11.5	11.8	0.3	- 0.3	2.61 per cent	-2.83 per cent
Internal Audit and Risk Management	11.5	12.1	0.6	0.0	5.22 per cent	-0.36 per cent
Office Accommodation	30.4	32.1	1.7	0.0	5.59 per cent	-0.01 per cent
TOTAL	197.6	219.1	21.5	9.9	10.9 per cent	5.00 per cent

At R8.6 million or 22%, the Corporate Services sub-programme shows the highest real budget increase from 2012/13 to 2013/14. It is also where the bulk of the budget allocation for the programme is concentrated.

Progress reported from the last APP is that all the Governance structures have been established and are functional, these include the budget committee, the internal audit steering committee, the external audit committee and the supply chain management Committees. The 2011/12 Annual Report and the 2012/13 Annual Performance Plan were submitted to Parliament on time. The Human Resources Plan was also submitted to DPSA as required. It is likely that the majority of the administration targets in the APP 2012/13 will be achieved by the end of the financial year. One main conclusion that can be drawn from this analysis is that efforts of improving the internal governance processes and systems will contribute vastly towards the achievement of an unqualified audit mainly because of our commitment to implement, follow-through and report on progress against the Post Audit Action Plan for 2012/13.

Although there is some progress with regard to the finalisation of the organisational structure we were not able to meet our target as planned, there are on-going processes to ensure placement of all SMS members on the approved organisational structure.

Priorities for 2013/14

1. DCoG will develop the Post Audit Action Plan (PAAP) 2013/14 by the end of September 2013 and implement for purposes of improving audit outcome;
2. The Department will make all transfer payments for the period 2013/14 as per the payment schedule and ensure that all deadlines are met for purposes of fast-tracking implementation at a local level;
3. As part of initiatives to improve internal capacity and capability within the department, we planning to review, and submit a report on the Human Resources Plan to the Department of Public Service and Administration (DPSA) as regulated. The approved plan will be immediately rolled out within the department;
4. Support will be provided to Municipalities and Provinces to develop section 46 and 47 reports. These reports will be used to develop the 2011/12 Section 48 report on performance of local government as required in the Municipal Systems Act;
5. DCoG will support four identified provinces to develop and implement Performance Management System (PMS) and ensure that core set of local performance indicators are revised for approval;
6. Struggling municipalities will be supported with communication tools by rollout the Communication Strategy. This will support the initiative of promoting and communicating government programmes to communities. The departmental programmes will also be promoted through media engagements;
7. The Department will develop a Donor Coordination Strategy and establish new international partnerships for purposes of improving Regional and international relations; and
8. The Annual Fraud Plan and Annual Risk Management Plan will be revised and implemented in an effort to improve the departmental governance.

Programme 2: Policy, Research and Knowledge Management

The programme provides specialised support services to the department in the areas of research and knowledge management, policy formulation, monitoring and evaluation, and information, communication and business technologies. With only 4 sub-programmes and a total budget of R49.5 million in 2013/14, Programme 2 is the smallest of all the department’s programmes.

Table 3

	Budget		Nominal Increase / Decrease in 2013/14	Real Increase / Decrease in 2013/14	Nominal Percent change in 2013/14	Real Percent change in 2013/14
R million	2012/13	2013/14
Management: Research and Policy	3.2	4.5	1.3	1.1	40.63 per cent	33.17 per cent
Policy and Research Methods	8.6	6.0	- 2.6	- 2.9	-30.23 per cent	-33.93 per cent
Knowledge and Information Management	10.5	9.2	- 1.3	- 1.8	-12.38 per cent	-17.03 per cent
Information, Communication and Business Technology	27.0	29.8	2.8	1.2	10.37 per cent	4.52 per cent
TOTAL	49.3	49.5	0.2	- 2.4	0.4 per cent	-4.92 per cent

The Policy and Research Methods sub-programme is envisaged to develop quarterly reports on governance, service delivery, and financial management issues in municipalities. This is being undertaken over the medium term (2009 -2014) in bid to align policy development with the local government turn-around strategy. The budget allocation for this sub-programme however has decreased substantially, with a real percentage change of -33%.

In the previous financial year the Portfolio Committee noted that the whole programme had not performed well in terms of service delivery. Targets relating to the formulation of legislation on Khoi and San communities, in the form of the National Traditional Affairs Bill, have thus been shifted to Programme 7: Traditional Affairs. This follows Programme 2’s spate of missed deadlines on these particular targets, among other things.

The programme is likely to achieve all four planned targets, these are the implementation of the knowledge management initiatives; policy research commissioned by other programmes in areas of Municipal Financial Management and Audit outcomes of municipalities; research reports on service delivery protests are also been produced on a monthly basis and the project on the development of robust and reliable ICT infrastructure at local government level will be achieved by the end of the financial year despite the project Manager only being appointed during the middle of the 2 ^nd quarter (October 2012), consultations were held with the National Treasury, Auditor-General, SALGA, Western Cape, Eastern Cape and Mpumalanga provinces for purposes of developing a concept document on the CoGTA ICT role in municipalities and the concept document will be completed by the end of the 2012/2013 financial year.

Priorities for 2013/14

• To improve work turn-around time, DCoG planned to ensure 95% availability of key systems like Bas, Persal, Logis, internet, email;

• We will also implement two identified Knowledge Management Strategy (KMS) intervention focusing on business process automation, this will ensure introduction of proper processes and systems that support implementation of projects;

• Develop 4 research papers covering governance, service delivery and financial management by 31 March 2014, the papers will form the basis for future policy initiatives that are aimed at improving these identified focus areas; and

As a national policy development department, we have established the DCoG Policy Forum which is aimed at discussing new policy matters, government-wide initiatives, directives as well as priorities in order to position the department to act and respond accordingly to these initiatives.

Programme 3: Governance and Intergovernmental Relations

This programme is meant to improve vertical and horizontal coordination and alignment between the three spheres of government. It also promotes public participation in governance through regulatory mechanisms as well as provides oversight, intervention and support programmes to provinces, municipalities and associated institutions. The programme constitutes 70% of the Departments total allocation for 2013/14 and this is perhaps where the Parliament should be especially vigilant in terms of its oversight functions. There are nine sub-programmes under this programme, as shown in Table 4 below.

Table 4

Sub- Programme	Budget		Nominal Increase / Decrease in 2013/14	Real Increase / Decrease in 2013/14	Nominal Percent change in 2013/14	Real Percent change in 2013/14
R million	2012/13	2013/14
Management: Governance	4.8	16.2	11.4	10.5	237.50 per cent	219.60 per cent
Intergovernmental Relations Coordination	9.5	10.0	0.5	0.0	5.26 per cent	-0.32 per cent
Intergovernmental Fiscal Relations	142.8	13.5	- 129.3	- 130.0	-90.55 per cent	-91.05 per cent
Governance and Public Participation	6.2	6.0	- 0.2	- 0.5	-3.23 per cent	-8.36 per cent
South African Local Government Association	26.7	26.0	- 0.7	- 2.1	-2.62 per cent	-7.79 per cent
Municipal Demarcation Board	40.4	42.2	1.8	- 0.4	4.46 per cent	-1.08 per cent
South African Cities Network	5.5	5.8	0.3	0.0	5.45 per cent	-0.14 per cent
United Cities and Local Government of Africa	2.5	5.3	2.8	2.5	112.00 per cent	100.76 per cent
Local Government Equitable Share	37 873.4	40 581.8	2 708.4	556.3	7.15 per cent	1.47 per cent
TOTAL	38 111.8	40 706.8	2 595.0	436.3	6.8 per cent	1.14 per cent

The bulk of expenditure in this programme relates to sub-programme 9: the Local Government Equitable Share. For 2013/14 this amounts to R40.5 billion – up from R37.8 billion in 2012/13. In recent years, ‘transfers to local government have grown significantly providing municipalities with greater resources to deliver basic services.’ [4] However, under-spending – which amounted to R713.7 million for the financial year ending on 31 March 2013 [5] – continues to dilute the potential benefits of the growing transfers to local government.

The Management: Governance sub-programme shows the highest real increase in percentage terms – from R4.8 million in 2012/13 to R16.2 million in 2013/14 or 219%. The reasons for this dramatic increase are not clear.

Similarly, the Intergovernmental Fiscal Relations sub-programme shows radical variance, from a total budget allocation of R142.8 million in 2012/13 to R13.5 million in 2013/14. A roll-over allocation in 2012/13 for once-off gratuity payments to 3 456 non-returning councillors is cited as a reason for this variance. [6] In 2011/12 an amount of R262 million earmarked for non-returning councillors was unspent due to incomplete information received from municipalities as well as delays in obtaining tax clearance from the South African Revenue Service. [7]

The United Cities and Local Government of Africa sub-programme also shows a real increase of 100 per cent for 2013/14. This may be due to the suspension of transfers to the United Cities and Local Government of Africa pending discussion with the Department on how best to disburse the allocation.

Performance progress

1. The draft framework for the assignment of powers and functions across government was revised. This project will be achieved by the end of the financial year;
2. Through initiatives aimed at improving the functionality of district IGR structures DCoG managed to revise the assessment report on the functionality of district IGR structures, implementation will commence in the next financial year;
3. The Monitoring, Support, and Interventions (MSI) Bill was revised with the aim of contributing towards strengthening oversight roles and the management of interventions between the three spheres; and
4. Out of six targeted provinces, five provinces ( Western Cape , Eastern Cape , Mpumalanga , Free State and Kwazulu-Natal ) were supported to develop provincial frameworks on out of pocket expenses for ward committees. 32 municipalities in Mpumalanga and Kwazulu-Natal provinces are currently implementing based on the framework. The remaining 1 province will be supported in the next financial year although the project is not included in the 3013/14 APP.
5. To ensure that ward committee members are capacitated, the Department rolled out the LGSETA accredited training in all the four targeted provinces;
6. The priority project on facilitating the development of ward level operational plans will be finalised by the end of the financial year since the Department managed to support the development of 460 of the targeted 500 ward operational plans which are currently being implemented;
7. Hundred and eighteen municipalities in 7 provinces were supported to implement credit control and debt collection policy guidelines ( Eastern Cape : 17) Free State : 6) KwaZulu Natal: 39) (Limpopo:8) ( Mpumalanga :19 ) ( Northern Cape :17) ( Western Cape :12);
8. A draft report on the assessment of municipal rating policies and compliance with regulations on ratios of the 24 municipalities is developed;
9. The draft Municipal Property Rates Amendment Bill finalized and submitted to the Office of the Chief State Law Advisor;
10. Ninety two municipalities across all provinces were supported to better manage spending on MIG;
11. The Department facilitated the establishment of 250 of the 278 Municipal Public Accounts Committees and officials at these municipalities were trained on the functionality of the MPACs; and
12. Partnerships were established with the Free State Provincial department , the Hawks and Special Investigating Unit for purposes of accelerating the fight against corruption.
13. The Department only managed to conduct an evaluation in two of the three targeted provinces Eastern Cape and Western Cape on the functional ethics committees. The objective is to reduce incidence of corruption in municipalities, this project will continue in the next financial year;
14. An assessment report on corruption trends analysis and impact of interventions by DCoG will not be final by the end of the financial year due to limited capacity to implement the project

Priorities for 2013/14

1. DCoG will conduct an assessment of Provincial IGR structures in order to devise appropriate interventions to improve functionality;
2. The proposed Intergovernmental, Monitoring, Support and Interventions (IMSI) Bill submitted to Parliament by March 2014;
3. Increase the development and implementation of ward level operational plans from 500 to 2000 wards by 31 March 2014;
4. Provide advice and support to 120 municipalities by way of workshops, training, project appraisals to improve on MIG expenditure by 31 March 2014;
5. Monitor , assess and report on implementation of credit control and debt collection policy and payment of government debt in 30 identified municipalities;
6. Monitor and assess compliance by 30 municipalities with the MPRA and provide guidance to non-complying municipalities by 31 March 2014;
7. 40 Ethics Committees will be established and officials trained in municipalities across identified provinces; and
8. In order to pin down on corruption a comprehensive reports on allegations of corruption investigated, will be developed to give insight in terms of the intervention that is needed.

2.1.4. Programme 4: Disaster Response Management

This programme gives effect to Department’s strategic goal of strengthening, coordinating and supporting effective integrated disaster management and fire services. In this vein it seeks to promote an integrated and coordinated system of disaster risk management that places special emphasis on prevention, mitigation and preparedness on the part of national, provincial and municipal organs of state, statutory functionaries and other role players involved in disaster risk management.

Table 5

R534.6 million has been allocated for Disaster Relief Transfers in 2013/14 – the largest expenditure in the programme. Of this amount, R188.1 million constitutes the Provincial Disaster Grant and the Municipal Disaster Grant takes up the remaining R346.5 million. These grants are meant to ‘allow for the swift allocation and transfer of funds to affected provinces and municipalities.’ [8] In reality this is not yet happening as disaster cost verification processes are still cumbersome.

Consequently 84.5% or R435.9 million of the total allocation for this sub-programme was under-spent in 2012/13. [9] This is a major regression from the R19.3 million under-spending the Portfolio Committee noted in last year’s Budgetary Review and Recommendation Report. In this Report the Committee also recommended that the budget allocation for this programme be increased in the light of the country’s increased vulnerability to natural disasters due to climate change. The total allocation for the programme appears to have increased from R555.4 million in 2012/13 to R585.2 million in R585.2 million in 2013/14. But when taking inflation into account the total budget allocation has actually decreased by -0.22 per cent.

Performance progress

1. In terms of strengthening accountability and reporting on disaster management across the spheres and sectors of government, the Department managed to develop a D raft Disaster Management Amendment Bill by end of the financial year;
2. The NDMC developed a National Disaster Management Education and Training Framework aimed at improving the system of Disaster Management through education and training;
3. NDMC finalised the discussion Paper on Fire Services and was published for public comments on 18 March 2013;
4. Draft Regulations on Disaster Response, Declaration and Classification were finalised and are being prepared for public comments; and
5. Flood risk and vulnerability profile was finalised. Flood risk was thereafter calculated on a national scale. A reprioritisation was completed in the last quarter due to resource, data and stakeholder engagement constraints

Priorities for 2013/14

The NDMC plans to develop and review the following legislation:

1. Draft White Paper on Fire Brigade Services Legislation submitted to the Minister by 31 March 2014; and
2. Disaster Management Amendment Bill submitted to the Cabinet for processing 31 March 2014.
3. Indicative risk and vulnerability profile for drought to be developed by 31 March 2014.
4. The Disaster Management M&E Framework will also be developed by 31 March 2014.

The Centre will also develop and implement a National DM public awareness annual plan aimed at building capacity in communities and other stakeholders

2.1.5. Programme 5: Provincial and Municipal Governance Systems

The programme provides oversight, supports programmes and evidence based regulatory mechanisms for provincial and municipal government and associated institutions, and facilitates effective service delivery. It is made up of five sub-programmes as captured in Table 6 below.

Table 6

Programme	Budget		Nominal Increase / Decrease in 2013/14	Real Increase / Decrease in 2013/14	Nominal Percent change in 2013/14	Real Percent change in 2013/14
R million	2012/13	2013/14
Management: Provincial and Local Government Support	27.0	3.5	- 23.5	- 23.7	-87.04 per cent	-87.72 per cent
Provincial Government Support and Intervention	9.1	7.1	- 2.0	- 2.4	-21.98 per cent	-26.12 per cent
Local Government Support and Intervention	10.4	13.6	3.2	2.5	30.77 per cent	23.83 per cent
Development Planning	8.6	7.5	- 1.1	- 1.5	-12.79 per cent	-17.42 per cent
Municipal Systems Improvement Grant	230.1	240.3	10.2	- 2.5	4.43 per cent	-1.11 per cent
TOTAL	285.2	272.0	- 13.2	- 27.6	-4.6 per cent	-9.69 per cent

Sub-programme 5, the Municipal Systems Improvement Grant, constitutes the bulk of the allocation for this programme. The grant is meant to assist ‘municipalities to perform their functions and stabilise institutional and governance systems as required in the Municipal Systems Act and related legislation.’ [10]

The substantial variance in sub-programme 1: Management: Provincial and Local Government Support results from spending on compensation of employees due to funds being allocated to the technical support unit during 2012/13. The unit was tasked with ensuring that municipalities develop their own turn around strategies and assume responsibility for oversight. The disbanding of the unit in 2013/14 and the redeployment of employees to the community work programme and the municipal infrastructure support agency explains the significant decrease in expenditure during this period.

Performance progress

1. The performance of DCoG public entities which are South African Local Government Association (SALGA), South African Cities Network (SACN) and Municipal Demarcation Board (MDB) is being monitored, quarterly reports were produced in this regard. Draft Annual performance report of SALGA and MDB developed. Although GTZ withdrew funding much work has been done. Therefore there is a likelihood that the project will be achieved by the end of the financial year;
2. The department finalised an assessment report on the impact of fixed term contracts of municipal managers on municipal councils aimed at determining the impact of the five-year fixed term contract of municipal managers ;
3. The Recruitment and Retention Strategy Tools have been developed as planned; and
4. The target of supporting 70 municipalities to develop technical skills was achieved. MISA is dealing with technical skills while DCoG is focussing on scarce and critical skills.
5. National Professionalization Framework aimed at professionalizing the local government sector has been developed and consultation was done with relevant stakeholders;
6. In the Department’s endeavour to improve development planning capacity of municipalities, we were able to facilitate provincial workshops in Western Cape , Northern Cape , North West and Free State ;
7. 9 provincial IDP assessments were conducted and the Draft National IDP assessment report developed;
8. Intergovernmental Planning Frameworks and Provincial Planning guidelines developed,
9. The Department’s efforts to improve spatial planning capability are on track. Geographic Information System training was conducted in district and local municipalities.
10. Regulations setting uniform norms and standard for senior managers have been developed and are out for public comment.
11. The Branch was unable to roll-out the 27 training programmes for councillor development as planned, because the service provider that was appointed to undertake this work for the Branch withdrew their services. However, building on the work of the erstwhile Municipal Leadership Development Programme (MLDP), and the 2011 councillor induction programme, the Branch has managed to extend some training and development programmes to councillors. This training and development programmes have also been complemented by exposing councillors to the capacitating interventions that are coordinated by the Branch, most notably the workshops that were held in all provinces on the amendments made to the Municipal Systems Act; and
12. The Rolling out of Section 105 and 106 of the Municipal Systems Act is 80% complete, due to delays in the appointment of the service provider. The draft report will be signed off by Senior Management in April and the final report presented to MINMEC in May of 2013.

Priorities for 2013/14

1. Nine provinces monitored to support municipalities with filling of vacancies in terms of the Municipal Systems Act by 31 March 2014;
2. All identified municipalities will be supported to implement remedial action emanating from the Monitoring the MSA through the roll-out of guidelines;
3. Municipal Demarcation Amendment draft bill developed;
4. Discussion document on Organised Local Government will be developed;
5. Provincial Workshops will be facilitated in nine provinces and 23 districts to improve development planning capacity in municipalities outside metros and secondary by 31 March 2014 on intergovernmental; The department has revived the initiative to support urban development programme, in this regard the Draft Integrated Urban Development Framework (IUDF) will be developed;
6. Provincial policy oversight Section 105 and 106 guidelines developed and for approval by MINMEC
7. Seventy municipalities will be supported with tools to develop and implement recruitment and retention strategies;
8. Develop and implement a strategy to promote local government as career of choice; and
9. Competence Assessment Model for senior managers will be developed together with a database of staff members dismissed for misconduct developed by 31 March 2014.

2.1.6. Infrastructure and Economic Development

This is one of the most critical programmes in terms of government’s broader policy priorities around promoting economic support and development, investing in infrastructure, creating jobs and enhancing local government capacity. As to be expected, the programme accounts for over a quarter of the Department’s total budget allocation for the current year. There are six sub-programmes under this programme, as shown in Table 7 below.

Table 7

Programme	Budget		Nominal Increase / Decrease in 2013/14	Real Increase / Decrease in 2013/14	Nominal Percent change in 2013/14	Real Percent change in 2013/14
R million	2012/13	2013/14
Management: Infrastructure	3.1	3.3	0.2	0.0	6.45 per cent	0.81 per cent
Local Economic Development Planning	9.9	9.3	- 0.6	- 1.1	-6.06 per cent	-11.04 per cent
Infrastructure Development	13.3	13.5	0.2	- 0.5	1.50 per cent	-3.88 per cent
Municipal Infrastructure Grant	13 881.6	14 352.1	470.5	- 290.6	3.39 per cent	-2.09 per cent
Community Work Programme	1 448.9	1 675.0	226.1	137.3	15.60 per cent	9.47 per cent
Special Purpose Vehicle	196.7	262.0	65.3	51.4	33.20 per cent	26.13 per cent
TOTAL	15 553.5	16 315.2	761.7	- 103.5	4.9 per cent	-0.67 per cent

The Municipal Infrastructure Grant and the Community Work Programme sub-programmes constitute the bulk of spending within the programme. The former is meant to ‘provide specific capital finance for basic municipal infrastructure backlogs for poor households, micro enterprises and social institutions servicing poor communities.’ [11] The MIG allocation for 2013/14 appears to have increased by 3.3%, but when taking inflation into account it has actually decreased by -2%.

In both financial years, the Department of Cooperative Governance and Traditional Affairs accounts for the third largest vote on infrastructure expenditure - after the Departments of Trade and Industry, and the Department of Human Settlement. This highlights the strategic importance of the Department in government’s current infrastructure drive. However, municipal under-spending on the MIG remains a major challenge.

Transferred from the Department Public Works in 2009/10, the Community Work Programme on the other hand is meant to contribute to developing public assets in poor communities and provide income security and work experience for participants, as well as enhance dignity and promote social and economic inclusion. [12] It also gives effect to COGTA’s strategic goal 3 over the 2013 MTEF: Facilitate implementation of the Community Work Programme and sustainable economic development at a local level. As noted earlier, poor spending performance may cancel out the benefits of the increased allocation to the sub-programme.

The Special Purpose Vehicle sub-programme has been incorporated into the new Municipal Infrastructure Agent. The sub-programme shows real percentage increase of 26% for 2013/14. In 2012/13 the sub-programme incurred an under expenditure of R49.1 million. This in part explains the real increase in 2013/14 as unspent funds were possibly rolled over onto the next financial year.

Performance progress

1. The Community work Programme (CWP) is well on track. DCoG managed to support 140 identified municipalities to implement CWP in at least 2 wards;
2. To date 139 778 of the planned 171 500 work opportunities have been created. We will provide the necessary support to ensure that the remaining 31 722 work opportunities are created by the end of the financial year;
3. Through initiative to promote economic development the Department was able to support the development of the Nkangala Business Development Forum, West Coast District Development Forums and the Sedibeng United Business Forum;
4. The Department was able to facilitate the signing of MoUs on business adopt a municipality. To date four MOUs have been signed between identified municipalities and SANTAM, ESKOM, Rand Water Foundation; and Mercedes Benz;
5. The Department also signed an MoU with the Department of Trade and Industry (DTI) to support the development of cooperatives;
6. Number of district rural municipalities supported to improve on MIG non-financial performance monitoring and reporting;
7. The clean cities and towns program is well on track. Clean-up campaign and job creation was done in sites located in Mafikeng Local Municipality, Aganang Local municipality, Mbashe Local Municipality (Elliotdale and Willowvale towns),Nelson Mandela Metro, Greater Giyane Local Municipality ; Creation of park in Tokologo Local Municipality , Setsoto Local Municipality ,Nkonkobe Local Municipality and a greening project in Alice (Eastern Cape); and
8. Out of the target of 10 the Department managed to support 14 Districts (Xhariep, Lejweleputswa, Thabo Mofutsanyana, Fezile Dabi, Sedibeng, West Rand, Nkangala, Bojanala, Dr Kenneth Kaunda, West Coast, Cape Winelands , Overberg, Eden, Central Karoo district rural municipalities to improve on MIG non-financial performance monitoring and reporting. This project has therefore already been achieved by quarter 3
9. Out of the 10 districts to be supported for free basic services policies updating, six were already supported by quarter 3, and the target of 10 will be achieved.
10. The Department was able to support 10 identified district and local municipalities to implement the comprehensive infrastructure plans through MISA
11. The initiative to improve reporting of basic services through the coordination of sectors and stakeholders is likely not to be achieved because of challenges with regard to data accuracy. engagements are continuing with STATSA, Department of Water Affairs, Department of Energy, Department of Human Settlement, Department Environmental Affairs through stakeholder working groups and forums for purposes of sorting out data challenges;
12. Only 86 of the 108 prioritized municipalities were supported to develop Integrated support plans (ISPs) in delivery and management of basic infrastructure because we assessed the remaining 22 municipalities later than planned. The project will be finalised in the next financial year.

Priorities for 2013/14

1. 171 500 of work opportunities provided;
2. 48 municipalities implementing CWP in at least two wards ;
3. 18 municipalities where Clean Communities Programme (CCP) is coordinated and supported ;
4. 4 private sector collaborative partnerships established and support plans developed and implemented to promote economic development by 31 March 2014
5. National Framework for LED reviewed by March 2014 (base document for a new LED Strategy);
6. 50 Municipalities supported to improve on access to free basic services through indigent policies and credible indigent registers by 31 March 2014; and
7. New MIG policy developed to facilitate the improvement in delivery of basic service

2.1.7. Traditional Affairs

Traditional Affairs, including traditional leadership institutions, are meant to be ‘at the core of South Africa ’s success as a nation in achieving the country’s development objectives, particularly in so far as they apply to the Rural Development Strategy.’ [13] Looking at the budget allocations of the various sub-programmes as shown in the Table 7 below, it is not clear how the Traditional Affairs programme is advancing rural development. None of the six sub-programmes seems to address rural development directly. The fact that the programme’s overall budget has decreased in real terms by almost 3% is also not reflective of the commitment to integrate traditional affairs into the country’s development discourse.

Table 8

Programme	Budget		Nominal Increase / Decrease in 2013/14	Real Increase / Decrease in 2013/14	Nominal Percent change in 2013/14	Real Percent change in 2013/14
R million	2012/13	2013/14
Management: Head of Traditional Affairs	10.1	17.6	7.5	6.6	74.26 per cent	65.02 per cent
Policy and Legislation for Traditional Affairs	12.5	12.9	0.4	- 0.3	3.20 per cent	-2.27 per cent
Institutional Support and Coordination	13.1	13.4	0.3	- 0.4	2.29 per cent	-3.13 per cent
National House of Traditional Leaders	21.2	16.7	- 4.5	- 5.4	-21.23 per cent	-25.40 per cent
Commission for the Protection and Promotion of the Rights of Cultural, Religious and Linguistic Communities	34.2	32.5	- 1.7	- 3.4	-4.97 per cent	-10.01 per cent
Commission on Traditional Leadership Disputes and Claims	11.4	12.0	0.6	0.0	5.26 per cent	-0.32 per cent
TOTAL	102.5	105.1	2.6	- 3.0	2.5 per cent	-2.90 per cent

PROGRESS REPORT ON 2013/14 ANNUAL TARGETS

No.	2012/13 APP TARGETS	PROGRESS REPORT
1	Compliance Report on the Implementation of the Traditional Leadership Governance and Framework Act	Comprehensive desktop analysis of the Framework Act which serves as a basis for the assessment of provincial legislation has been completed. A similar analysis was also completed in respect of the National House Act. Legislative compliance reports (comparing provincial legislation with the Framework Act) have been done in respect of the following provinces: · Eastern Cape · Free State · Gauteng · Limpopo · Mpumalanga · Northern Cape · North West The legislation of KwaZulu-Natal has not been considered due to the fact that the Province has drafted a new Bill which is currently being considered by the province.
2	Gazette on the formula and compliance report on the establishment of kingship and queenship councils	Draft formula has been developed and is being consolidated. It is also being considered by the Ministerial Task Team. After the Ministerial Task Team has completed Kings will be consulted.
3	Regulations on roles and functions of kings and queens developed	Draft regulations on roles and functions of kings and queens have been developed. The draft regulations are being considered by the Ministerial Task Team.
4	Approved Policy on Male Initiation	The Draft Policy on male initiation was developed and submitted to Cabinet. Cabinet approved that the Draft National Policy on Male initiation must be consulted with the relevant role players, and after that it must be resubmitted to the Cabinet Committee on Governance and Administration.
5	National Traditional Affairs Bill Published in the government gazette for public comments and submitted to cabinet for approval	Bill was drafted, extensive pre-Cabinet consultations were conducted and finalized, and it was refined based on the inputs from the consultations. Furthermore, the Bill has been certified by State Law advisors to support parliamentary processes; and it was found to be constitutionally compliant. The Bill is in the process of entering the Parliamentary processes.
6	Research report on: · Analysis of Headmanship and Headwomanship leadership positions · The developmental role of traditional leaders	Draft Research Report with an analysis on headmanship and Headwomanship position, including their recognition and confirmation thereof has been developed. Research report on the developmental role of traditional leaders has been developed.
7	Draft Traditional Affairs Strategy	Traditional Affairs Strategy has been developed. The strategy is aimed at improving and strengthening coordination of intra and inter-sphere coordination of traditional affairs matters across the three spheres of government.
8	Traditional leadership institution empowered through training and linkages to other resources	The Department in collaboration with the Services Sector Education Training Authority (SSETA), coordinated training on the application of HIV and AIDS in a Sector/Workplace for officials in the Houses of Traditional Leadership and Traditional councils for Eastern Cape, Free State, Mpumalanga and Gauteng. The Department also coordinated training on Indigenous Law for forty traditional leaders on customary Law in the Free State province in September 2012, which was offered by the Justice College . The programme is designed to empower traditional leaders and their officials with knowledge of various aspects of customary related legislation which impacts on their functions. The Department also facilitated training on marine resource and fisheries for twenty nine (29) traditional leaders and officials which took place in Port Nolloth in the Northern Cape . The training programme was presented by Rhodes University in conjunction with Local Government Sector Education Training Authority (LGSETA). The aim of the program was to develop capacity of the traditional leaders with regards to the development of marine resources and create sustainable economic development along the coastline by exploring resources in line with the national development objectives In addition, the department coordinated two awareness programmes in Water and Sanitation where a total of 133 traditional leaders were inducted on water and sanitation business opportunities in the Eastern Cape .
9	Partnership Framework approved	Partnership Framework was developed and was approved. The Framework seeks to address the development, establishment, and sustenance of collaborative and cohesive relations between various partners within traditional affairs.
10	Report on the implementation of the recommendations of the assessment of state of governance of traditional leadership structures	Report on the implementation of the recommendations of the assessment of state of governance of traditional leadership structures has been developed. The Department has developed the Traditional Leadership Empowerment programme for implementing the recommendations of the report on state of governance of traditional leadership structures. In order to implement the programme, the Department has established the National Implementation Forum constituted of the Department of Traditional Affairs, Provincial Traditional Affairs Departments; sector Departments, National and Provincial Houses of Traditional Leaders and relevant Public Entities. The forum is functional. To this effect the Department has also supported Provinces to establish Provincial Traditional Affairs Implementation Forums.
11	NHTL supported strategically as outlined in the legislation	The Department supported the National House of Traditional Leaders in conducting induction for new members of the National House. The Department supported NHTL financially and administratively for the reconstitution of Traditional Councils. The Department provided financial, human resources and professional support to the entities for the following activities: · Celebration of identified cultural events · Planning and performance management and reporting · Inauguration of members of NHTL and the official opening of the NHTL

C5 SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION (SALGA)

Mandate and goals

The South African Local Government Association is an association of municipalities. The Organised Local Government Act (1997) recognises the association as a representative of organised local government. The association is mandated to designate up to 10 part-time representatives to the National Council of Provinces in Parliament and to nominate two representatives to the Financial and Fiscal Commission, which advises government on budget issues. The association participates in intergovernmental structures at a provincial and district level, and is therefore able to influence national and provincial legislation and gauge its impact on local government.

The association’s strategic goals over the medium term are to:

· deliver an accessible, equitable and sustainable municipal service

· ensure that environments and communities are safe and healthy

· provide planning and socioeconomic development at the local level

· ensure effective, responsive and accountable local governance at communities

· ensure effective human resources management in local development

· ensure that municipalities have financially and organisational capacity

· ensure effective and efficient administration.

Performance and Expenditure trends

The South African Local Government Association’s main revenue source is membership fees and donations from foreign donors. The significant increase in revenue between 2009/10 and 2012/13 was due to an increase in membership fees. The spending focus over the medium term will be on advocating activities for the development of the national campaign on a cleaner environment at the local level, and establishing a refurbishment and replacement fund for municipal infrastructure. The association will also lobby for funding to respond to challenges regarding climate change on behalf of local government in support of environmental management and climate change strategies. The bulk of the association’s expenditure goes towards compensation of employees. The increase in spending on compensation of employees over the medium term is for capacity building to enhance the support the association provides its members, and to increase the representation of members at intergovernmental relations forums.

As part of the Cabinet approved budget reductions, a reduction of R1.6 million has been effected in the association’s baseline budget over the medium term. The following cost containment measures have been identified to manage these reductions: no catering for in-house meetings and workshops, cellular phone contracts transferred to employees, and the updating of the policy on travel and accommodation costs.The association has a funded establishment of 380 posts, all of which were filled as at 30 September 2012. The association plans to increase this establishment to 496 over the medium term. The ratio of support staff to line staff is 1:2. Consultants are used for independent legal and financial expertise over short periods.

C6 MUNICIPAL DEMARCATION BOARD (MDB)

Mandate and goals

The Municipal Demarcation Board is an independent authority responsible for determining municipal boundaries. Section 3 of the Local Government Municipal Demarcation Act (1998) provides that the board is a juristic person, is independent and must be impartial. The board is mandated to determine municipal boundaries in accordance with the act and other appropriate legislation enacted in terms of chapter 7 of the Constitution. The board is also governed in terms of the Municipal Structures Act (1998).

The board’s strategic goals over the medium term are to:

• determine and re-determine municipal boundaries, and categorise and re-categorise municipalities

· assess the capacity of metropolitan, district and local municipalities

· ensure that it is supported by effective and efficient organisational processes, systems and practices

· ensure good governance

· ensure sound financial management

· enhance stakeholder relations.

Performance and expenditure trends:

The Municipal Demarcation Board’s main source of revenue is government transfers. Other sources include the e of maps and interest income generated from investments with banks. Transfers received increased from R34.6 million in 2009/10 to R40.4 million in 2012/13, and are expected to increase to R45.8 million in 2015/16. The increase in both periods is mainly due to additional allocations for improved conditions of service.

The board’s spending focus over the medium term will be on data collection, the in-depth quantitative analysis of data and internal personnel who conduct assignments. The assembled data will be used as a basis for municipal capacity assessments, the delimitation of wards, and stakeholder engagement. Spending on these items is reflected in operations and research, including personnel budgets.

Expenditure increased significantly between 2009/10 and 2012/13 due to the appointment of 24 additional employees, as well as the employment of consultants to assist in the ward delimitation process in preparation for the 2011 local government elections. The increase in expenditure over the medium term is due to vacancies being filled in the board’s stakeholder, legal and policy units. The ratio of support staff to line function staff is 1:2. Spending on consultants increased between 2009/10 and 2012/13 due to assessments carried out on ward delimitation, boundary redeterminations and capacity, which required consultants’ expertise. Spending on consultants over the medium term is expected to decline as preparations for the 2014 general and provincial elections will be completed in this period. The board has a funded establishment of 47 posts, all of which were filled as at 30 September 2012. The board plans to maintain this establishment over the medium term.

As part of the Cabinet approved budget reductions, the department will reduce its transfers to the board by R2.8 million over the medium term. The following cost containment measures were identified to manage these reductions: no catering for in-house meetings and workshops, and cellular phone contracts will be transferred to employees.

C7 COMMISSION FOR THE PROMOTION AND PROTECTION OF THE RIGHTS OF CULTURAL, RELIGIOUS AND LINGUISTIC COMMUNITIES (CRL COMMISSION)

The Commission for the Promotion and Protection of the Rights of Cultural, Religious and Linguistic Communities was established in terms of section 181(1)(c) of the Constitution and derives its mandate from the

Cultural, Religious and Linguistic Communities Act (2002). The commission is mandated to support constitutional democracy and, in particular, to promote and protect the rights of cultural, religious and linguistic

communities.

The commission’s strategic goals over the medium term are to:

· promote and develop peace, friendship, humanity, tolerance and national unity among and within

· cultural, religious and linguistic communities on the basis of equality, non-discrimination and free

· association

· foster mutual respect among cultural, religious and linguistic communities

· promote the rights of communities to develop their historically diminished heritage

· recommend the establishment or recognition of community councils

Performance and expenditure trends

The main sources of revenue of the Commission for the Promotion and Protection of the Rights of Cultural, Religious and Linguistic Communities are a transfer from the department and interest earned. Transfers received increased significantly between 2009/10 and 2012/13 because of increased allocations to enable the commission to employ more researchers for its research and policy unit. Revenue is expected to increase to R36.6 million in 2015/16.

The spending focus over the medium term is on the completion of cases received from communities regarding the protection of places of worship and graves, and securing the religious rights of inmates. The commission will also ensure that the University of South Africa observes the religious rights of Muslim learners when publishing its timetable, as it does not accommodate them at present; and intends to finalise 28 research reports by the end of 2015/16. Expenditure increased significantly between 2009/10 and 2012/13 because of an increase in capacity to support the commission’s research and policy development unit while it completed the second phase of research on the male initiation and circumcision crisis, as well as the preparation of guidelines on the ritual of animal slaughter.

Expenditure is expected to increase over the medium term to continue with research on the policy regarding ukuthwala, which is a form of abduction that involves a girl or a young woman being kidnapped by a man and his friends or peers with the intention of compelling her or her family to endorse marriage negotiations. The commission identified the following cost containment measures over the medium term: there will be no catering for in-house meetings and workshops, cellular phone contracts will be transferred to employees, and the policy on travel and accommodation costs will be updated.

The commission has a funded establishment of 48 posts, of which 7 were vacant as at 30 September 2012. Personnel numbers increased from 24 posts in 2011/12 to 41 posts in 2012/13, mainly to support the research and policy unit. These numbers are likely to remain constant over the medium term. The ratio of support staff to line function staff is 1:2. The commission uses consultants only for audits of its financial statements.

C8 SOUTH AFRICAN CITIES NETWORK (SACN)

It was reported that the SACN existed to promote good governance and management in South African cities, to analyse strategic challenges facing cities, and to promote shared learning partnerships between the different spheres of government to support the management of South African cities. In the period 2011-16, the SACN would endeavor to understand member-city typology. It would place emphasis on broadening its programmatic reach to non-traditional SACN member cities including cities in the Southern African Development Community (SADC). The Network would seek to change policy response and practitioner behavior across the spheres of government by deepening knowledge-sharing. The SACN had been allocated R26 million for the 2011/12 fiscal year and stated that it was R1.2 million below its required target. Member municipalities had mostly paid up their subscriptions, with some exception. The SACN described how it viewed the typology of South African cities.

There were five categories which existed in the typology of the country. The first were city-regions characterised by large multi-nodal urban complexes with more than one million people and with significant and diverse economies. The second were cities characterised by multi-nodal areas with more than 400 000 people serving a bigger region and with high service indexes. The third were regional service centres made up of medium- or high- order towns, relatively high service indexes and towns which offered key service functions in more remote areas. The fourth were service towns with a narrow range of services and served to fulfill a service function for communities within the vicinity of that town.

The fifth were local/niche towns, smaller in terms of population and economic activity and which differed in economic rates. The SACN highlighted the urban corridors and mega-regions in the world and showed how South Africa and the SADC region compared to the rest of the world in terms of urbanisation. The Network highlighted the spatial and population density gaps in certain municipalities where services were not provided to people living on the outskirts of urban centres due to a disparity in infrastructure development. Most major urban centres received more funding than rural centres.

COMMITTEE OBSERVATIONS, RECOMMENDATIONS AND CONCLUSION

Progress on recommendations made in the budget report of 2012:

RECOMMENDATIONS BUDGET 2012

OBSERVATIONS	* RECOMMENDATIONS	PROGRESS
With regard to the Portfolio Committee’s 2011 recommendation we observe that the disbursement of disaster funding has been slow and unco-ordinated. Damage re-occurs and people remain in the same or in a worse situation than before.	A more effective and efficient way of assessing disaster areas and dispersing of disaster funding should be formulated. Intervention strategy should have: Immediate Term Strategy – evacuation, temporary shelter, feeding, clothing and medical assistance. Medium Term Strategy – Assistance with Social Services and reissue of identity documents. Long Term Strategy – Repairing of infrastructure and rehabilitation. Maintenance of infrastructure. The department should make a clear distinction on the roles and function with regard to intervention on disaster management between the 3 spheres of government.	No progress for the 2011/12 financial year
With regard to the Portfolio Committee’s 2011 recommendation we observe that progress has been made on intergovernmental debt however there are still monies owed to municipalities. In most instances current accounts are being honored but the challenge still lies with old debts. The previous report recommended that this situation be finalized by September 2011.	A report by the Department be submitted to the committee depicting the following: Outstanding debt that is owed to municipality per province, Period of arrears Departments owing the outstanding amount If payments were made, the history, Challenges regarding the settlement of these accounts, and Timeframe to address these challenges or settlement of the accounts	Progress has been in the short-term but over the last decade intergovernmental debt has been growing.
Monitoring and supervision of infrastructure rolled out remains a challenge, as stated in the previous report. MISA was introduced to assist vulnerable municipalities with infrastructure development, the identification of these municipalities are still in the process of being finalized. It must be noted that there have been many similar interventions to address infrastructure development.	The process of MISA should be fast tracked. The lessons learnt from previous interventions should be used as a basis for MISA	Progress has been made in terms of identifying municipalities to be supported with infrastructure
The Department envisage a differentiated approach on municipal financing, planning and support to municipalities.	Finalisation of the Equitable share formula by the Department of Cooperative Governance and National Treasury, taking in account the recommendations made by the FFC.	Progress has made as the Local Government Equitable share formula has been revised starting from 2013/14 financial year
The Department in its plan to promote good governance will review local government policy and legislation to strengthen co-operative governance.	A report on the White Paper on Cooperative Governance processes, all other legislation and those under review to be submitted to the Portfolio Committee.	Progress made in terms of revision of legislation impeding service delivery
The Anti-corruption inspectorate has been established within the Department; however the committee observes that the roles and functions of this inspectorate are not well defined in relation to other structures dealing with corruption. The Department also recommended that all municipalities should establish an ethics office.	The roles and functions of the Inspectorate be finalized as a matter of urgency. That a report be given on this recommendation per municipality, per province.	No progress
With regard to accelerating and improving access to basic services, the committee has observed that in instances bulk services are in place but there are challenges regarding the utilization thereof . Eg would be the Nandoni Dam, roads, and incomplete RDP houses.	There should be proper, co-ordinated planning between sector departments. Effective monitoring mechanisms should be put in place to ensure value for money.	No progress
The committee notes that the Department of Cooperative Governance should take a lead in working together with sector departments and support provinces and municipalities to improve access to basic services.	In supporting other spheres of government the rand should also be tracked. The Department should provide a cost benefit analysis.	No progress
In 2009 Traditional Affairs became an independent department from Cogta, however the budget has not been separated.	That National Treasury speeds up the process of ensuring that the Department of Traditional Affairs has its own budget and budget vote.	No progress
The Municipal Demarcation Board is responsible for the determination of municipal boundaries and certain processes are followed before finalizing the determination. It has been observed that the public is not very aware of the MDB and their roles and functions.	The MDB should have a robust public participation programme to inform communities of its roles, functions and processes in order to empower communities to participate fully.	Progress has been made but need to invest more in improving public perceptions of the Board
In the 2011 Budget report the committee recommended that the role and effectiveness of the CRL and its funding must be reviewed. It is our opinion that this situation has not been addressed.	This be reviewed as a matter of urgency	Negotiations are still underway regarding the optimum placement of the Commission
The Committee noted the decrease in the budget of the Administration programme. How will this affect the operations of the department in relation to the observation made in the AG report with regard to poor leadership.	The department should fill all crucial vacancies eg. Director-General as a matter of urgency	Vacancies filled
Committee notes that many of municipalities have not completed their Municipal Turn Around Strategies. What are the reasons for the outstanding strategies and how is the department assisting this process.	The department should submit a report to the Committee on all outstanding MTAS and what support they providing to municipalities that struggle with this.	Process to be finalized in June 2013

RECOMMENDATIONS BUDGET 2013

OBSERVATIONS	* RECOMMENDATIONS	TIMEFRAME
Strengthening Measures to Fight Corruption and Unethical Conduct. Corruption seriously constrains the ability of municipalities to deliver basic services. It is commendable that the Department has prioritised fighting corruption over the 2013 MTEF by placing the issue on its strategic agenda. However it is not clear on this vote how much has been allocated to fighting corruption and which programme or sub-programme will lead the anti-corruption drive.	· ensuring full compliance with the MFMA and the PFMA. · · Ensure that criminal charges are pursued against those found guilty of misconduct. a multi-agency approach should be used. · Identify 4 priority cases to pursue against guilty parties and report back to committee on progress against these prosecutions.	Quartely Reports
Local Government Equitable Share – The growth of the Local Government Equitable Share allocation, and the equally growing under-spending on this line item, represents a contradiction. For the 2012/13 financial year, under-spending amounted to R713, 7 million ‘due to non-performance by municipalities on other conditional grants in previous financial years.’ [14] If not tackled properly this under-spending will continue to dilute the benefits of an increased Local Government Equitable Share.	The Department introduce a mechanism to identify any obstacle impeding spending on the Local Government Equitable Share	Quarterly reports
Municipal Infrastructure Grant – Under-spending on the MIG by municipalities remains a chronic problem. Since 2008 the Committee has been noting the downward MIG spending pattern with serious concern. Concrete measures to ensure the MIG spending improves need to be provided. MISA, which is envisaged to also assist municipalities with MIG spending, also incurred an under expenditure of R49.1 million in 2012/13 as it struggled to appoint key personnel on time. It is difficult to see how the Agency will manage to assist municipalities with MIG under expenditure if it is also struggling with the same problem.	· Department to provide a roll out plan on steps to improve situation in those municipalities not covered by MISA programme. · Introduce a system of flagging during the full course of the year in order to identify any obstacles in municipalities and assist them to address these timeously rather than waiting for the end of the year. · MISA must provide fixed targets and provide regular reports to committee on progress against these targets
Disaster Relief Transfers – The speedy disbursement of relief funds to disaster stricken areas remains elusive. In 2012 the Portfolio Committee recommended that the Departments of Cooperative Governance and Human Settlements establish a better working relationship. This in order to speed up the post-disaster assessment process and prevent under-spending of relief funds. The Department of Cooperative Governance was expected to lead in establishing a task team that will focus mainly on the Disaster Response Management Programme. Progress in this regard needs to be provided	The Department to ensure that disaster relief funds are disbursed speedily and provinces that are still waiting for the funds since the last few years are provided with the necessary fund	Immediately
Traditional Affairs – At the heart of the function of traditional institutions in democratic South Africa is the advancement of rural development. This is due to the importance of the place and role of traditional leaders in the lives of many South Africans, especially in rural areas. Clarification is needed on how the budget allocations in the Traditional Affairs Programme are promoting rural development	A total of 829 Traditional Councils have been identified for profiling. The Department has proposed to profile only 78 of these within the 2013/14 period and yet it undertakes to profile the remaining 751 within the remaining two years of the MTEF. To do this it will have to radically increase its current performance rate in order to profile approximately 375 Traditional Councils a year. The Department to explain how it will manage to do this	Ongoing and quarterly reports to be submitted to the Portfolio Committee

* The Minister of Cooperative Governance and Traditional Affairs should ensure that the above recommendations are implemented.

Conclusion

The Portfolio Committee on Cooperative Governance and Traditional Affairs supports the Budget Vote 3: Department of Cooperative Governance and Traditional Affairs and recommends that it be approved.