ATC131017: Draft Report of the Portfolio Committee on Cooperative Governance and Traditional Affairs on the oversight visits to North West and Eastern Cape Provinces from 21 to 25 July and 28 July to 1 August 2013 – Dated 17 September 2013

Cooperative Governance and Traditional Affairs

Draft Report of the Portfolio Committee on Cooperative Governance and Traditional Affairs on the oversight visits to North West and Eastern Cape Provinces from 21 to 25 July and 28 July to 1 August 2013 – Dated 17 September 2013

1. Introduction and Background

The Portfolio Committee on Cooperative Governance and Traditional Affairs undertook oversight visit to the North West and Eastern Cape Provinces from 21 – 25 July and 28 July – 1 August 2013. As a Committee of the National Assembly whose powers are enumerated in Chapter 4 of the Constitution, and in accordance with the rules and orders of the National Assembly, the Committee is required, in respect of the mandate of the Department of Cooperative Governance and Traditional Affairs to, among other things:

·           Ensure that all appropriate executive organs of state are held accountable for their actions; and

·           Conduct oversight on the national executive authority and of any organ of state.

In 2008, an assessment of all municipalities was conducted as part of compliance with section 48 of the Local Government: Municipal Systems Act, (Act no. 32 of 2000) which required that a Minister for Local Government should write annual reports on the State of Local Government. This assessment culminated in the State of Local Government Report, which reflected the following challenges:

·         Poor coordination between the three spheres of government;

·           The lack of co-ordination in planning, project and programme    implementation, and reporting between district and local municipalities;

·           Lack of financial and human resource capacity to address service delivery backlogs;

·           Lack of participation by sector departments in the development of Integrated Development Plans (IDPs), as well in their implementation;

·           Political interference in the administration of  municipalities;

·           Poor revenue collection and lack of revenue enhancement strategies;

·           Large influx of   people from neighbouring  countries which resulted in out-dated indigent registers and expansion of communities;

·           Capacity challenges due to critical vacant positions of Section 56 and 57 managers;

·           Poor Local Economic Development (LED) project planning and implementation due to lack of funding and skills and;

·           Lack of and/or poor communication by municipalities on municipal programmes and projects due to lack of capacity and skills, which at times leads to unnecessary community protests; and

·           Poor public participation system in municipal governance.

The objective of the oversight was based on the priority areas identified in the Local Government Turn-Around Strategy (LGTAS), that was introduced to address these challenges. These priority areas are:

·         Accelerating service delivery;

·           Promoting good governance;

·           Enhancing sound financial management;

·      Fostering infrastructure development and maintenance; and

·      Intensifying the fight against crime

2. Delegation

The North West delegation consisted of Hon DG Nhlengethwa (ANC) Chairperson; Hon WJ Nelson (ANC); Hon M Segale-Diswai; Hon JM Matshoba (ANC); Hon FD Boshigo (ANC); Hon DV Mavunda (ANC); Hon ZMD Mandela (ANC); Hon GG Boinamo (DA); Hon J Steenhuisen (DA) and Hon C Mosimane (COPE).

The Eastern Cape delegation consisted of Hon DG Nhlengethwa (ANC) Chairperson; Hon WJ Nelson (ANC); Hon FD Boshigo (ANC); Hon DV Mavunda (ANC); Hon  MD Mandela (ANC); Hon J Steenhuisen (DA) and Hon C Mosimane (COPE).

The following officials accompanied the delegation:

Ms. S Cassiem (Committee Secretary); Mr A Sokomani (Committee Researcher) and Mr L Balfour (Committee Assistant). The delegation was also accompanied by officials from the Departments of both Cooperative Governance and Traditional Affairs, Nationally and Provincially.

3. North West Province

The Committee had interactions with the Office of the MEC for Local Government, as well as all district municipalities and nineteen local municipalities in the Province.

3.1. Accelerating Service Delivery

3.1.1.     Access to Water – The Province has two district municipalities and ten local municipalities that are water services authorities. Access to piped water in the Province stood at 91.6% in 2011. Dr Kenneth Kaunda District Municipality has the highest percentage of access to water at 98.4% and the Ngaka Modiri Molema District Municipality the lowest at 86.1%.

3.1.2.     Sanitation – access to flush toilets in all municipalities is estimated at 45.4%. An estimated 10 467 households are still using the bucket toilets, in Ngaka Modiri Molema District with 277 buckets, Dr Ruth Segomotsi Mompati has 1159 buckets, Dr Kenneth Kaunda District has 2 084 and Bojanala Platinum District 4 660.

3.1.3.     Electricity – Access to electricity across the Province is at 84%, with Dr Kenneth Kaunda District having the highest percentage of electrification. A constant increase of informal settlements and new extensions results in backlogs in terms of access to electricity in all municipalities.

3.1.4.     Housing/Human Settlements – As at 2011, 76.2% of people in   the North West Province lived in formal dwellings.

3.2. Fostering Sustainable Infrastructure Development and Maintenance

The Department of Local Government and Traditional Affairs in the Province has allocated R50 million through the Provincial Infrastructure Grant, to two Water Services Authorities: Ketleng Rivier Local Municipality and Ngaka Modiri Molema District. The funds are for water reticulation and post 1994 bucket eradication projects. The projects are at planning phases, as funding from the previous financial year is still being spent. Around R60 million have been set aside for implementation of the Premier’s Legacy Projects for Mahikeng Local Municipality. Provision of R3 million for the elevated steel tank in Letlhabile, to assist in addressing water challenges in Madibeng, has been made available in the funds provided for the Premiers Legacy Projects.

The Dr RS Mompati District has been allocated R111, 098 million and plans to implement infrastructure projects that include four water projects and seven sanitation projects across the District. The aim is to increase access to basic water and sanitation. The Ngaka Modiri Molema received an allocation of R203 144 million and plans to implement infrastructure projects, which include eight water projects and seven sanitation projects.

Expenditure for MIG for 2011/12 financial year varied, and Ngaka Modiri Molema District Municipality, Maquassi Hills Local Municipality, Dr RS Mompati District Municipality, Naledi Local Municipality and Madibeng Local Muncipality spent their full allocation of the grant funding, whilst Kagisano-Molopo Local Municipality only spent 42% of its allocation.

The assistance of the Municipal Infrastructure Support Agent (MISA) is utilised in 11 municipalities to support them on IDP and town planning, financial management and infrastructure development etc. The municipalities receiving assistance are Tswaing, Patlou, Ketleng, Moses Kotana, Moretele, Ventersdorp, Mamusa, Lewa Teemane and Madibeng Local Municipalities as well as Dr RS Mompati and Ngaka Modiri Molema District Municipalities. Challenges facing municipalities with regard to infrastructure and maintenance includes: over reliance of municipalities on MIG for implementation of capital projects, which delays the eradication of backlogs. Ageing infrastructure is another major challenge as municipalities are focussing on the development of new infrastructure and neglecting operations and maintenance responsibilities.

Poor spending on MIG, exacerbated by poor planning and slow procurement processes, resulted in the late implementation of infrastructure projects. Lack of funding to meet targets set out in IDPs is also a problem. There is a lack of technical skills at municipalities to operate and maintain water and sanitation schemes such as Water Treatment Works etc, and most municipalities do not have asset management plans.

3.3.   Enhancing Sound Financial Management

For the 2011/12 financial year the audit outcomes for municipalities in the North West were as follows:










No improvement





Improved by 2





improved by 3





Regressed by 3





Improved by 1

Based on the table above, Ngaka Modiri Molema DM, Ramosere Moilwa LM, Ditsobotla LM and Greater Taung LM moved from a qualified audit in 2009/10 to disclaimer in the next two financial years. Rustenburg LM and Moses-Kotane LM moved from disclaimer in the 2010/11 financial year to qualified audit in 2011/12 financial year. Dr Kenneth Kaunda DM and Tlokwe LM moved from a qualified audit in 2010/11 financial year to financially unqualified audit in the 2011/12 financial year. Total amount of debt owed to municipalities in the Province amounts to R5,693,018 with households owing the biggest chunk at R4, 206,593.

3.4.   Promoting Good Governance

There is relative stability in Councils except for Ngaka Modiri Molema DM, Tlokwe LM, Maquassi Hills LM and Disobotla LM. Three municipalities are currently placed under (section 139(1)(b) of the Constitution) by the Provincial executive: Ditsobotla, Maquassi Hills and Matlosana LM. Most municipalities have developed and approved policy and procedure manuals that govern the affairs of Council, resulting in the smooth operation of councils. Whilst most municipalities have by-laws and policies, some are however, outdated and require reviewing. There are challenges with the promulgation of by-laws due to the high costs involved, together with the enforcement of policies and by-laws. All municipalities have established Local Labour Forums. The functionality of the Forums however remains a challenge.

All municipalities have established Municipal Public Accounts Committees (MPACs) and only 4 out of the 23 committees are not functional: Kgetleng, Kagisano, Ventersdorp and Maquassi Hill Local Municipalities. Twelve of the 23 chairpersons are appointed full-time councillors and three are women. There is a certain level of resistance to MPACs by some councillors as they perceive MPACs as being a policing component. The District Intergovernmental Relation Forums (IGR) have not been functioning optimally, as envisaged in the IGR Framework Act. There are a total of 383 wards in the province, and 382 ward committees have been established. The only ward committee not established is ward 28 in Rustenburg, and this is mainly due to political reasons.

Tlokwe Local Municipality has no MM, in the area of CFOs there is 1 acting and 2 vacant positions, 6 vacancies for Technical Services Directors, 4 vacant Corporate Directors position and 6 vacancies for Development Planning Directors.

3.5.   Intensifying the Fight Against Corruption

Anti-corruption strategies and plans are available in 80% of the municipalities however; implementation of the strategies and plans is a challenge. The MPACs of the identified LGTAS municipalities have been capacitated and empowered to also serve as Anti-Corruption committees of councils. This is to avoid duplication for functions between council committees and also to strengthen the oversight role of MPACs to prevent and act on any corrupt activities. The Department is currently conducting enquiries in the three municipalities (Moses Kotane, Ventersdorp and Tswaing Local Municipalities) on cases relating to alleged corruption, maladministration and nepotism.

Status of Section 139 Interventions

The Provincial Executive Council resolved to intervene in three municipalities mentioned above, which have been experiencing governance and administration challenges. This decision was taken in March 2013, following engagements with the municipalities with regards to the challenges they faced. The duration of the interventions is for a minimum of 6 months and maximum of 12 months.

Intervention Status and Assistance


Reason for intervention

Status of intervention

Maquassi Hills Local Municipality

Poor governance and management of Council matters by Council.

Poor leadership and oversight by Council.

Deterioration of service delivery.

Poor administrative leadership and management.

Lack of administrative capacity within the Municipality.

The Administrator and teams of experts were introduced to the Municipality in April 2013, and have started working in line with the terms of reference. There was some resistance from administration, the MEC impressed upon the leadership of the Municipality to accept the intervention and fully cooperate with Administrator.

Ditsobotla Local Municipality

Poor governance and management of council matters by Council.

Poor leadership and oversight by Council.

Purported breach of code of conduct by councillors.

Poor relations between council and administration

Deterioration of service delivery. Poor administrative leadership.

There were delays in the Municipality due to some objections to the intervention by some councillors. The Administrator and the team are conducting an assessment in the Municipality to enhance and confirm the terms of reference prior to the actual intervention.

Matlosana Local Municipality

Financial crisis in the Municipality that resulted in statutory obligation not being honoured.

The Municipality is not collecting what is due for services rendered to consumers.

There is non-enforcement of debt collection and credit control policies as adopted by Council.

The Municipality is using the revenue from the sale of electricity to subsidise other services that consumers are not paying.

The Municipality has numerous contractual obligations with services such as debt collection, meter reading, and other services that could be done internally.

The Council raised objections about the intervention. Following a meeting between the department and the TROIKA of the Municipality, it was agreed that the Intervention team will commence with an assessment to confirm and enhance the terms of reference prior to the actual intervention.

4.      Eastern Cape Province

The Committee had interactions with the MEC of Local Government and Traditional Affairs, municipalities in the Amathole District (except for Ngqushwa Local Municipality) all municipalities in the OR Tambo District and Traditional Leaders of the King Sabata Dalindyebo (KSD) Municipality. The Committee also undertook site visits to access roads, a crèche and the Komga housing project.

4.1.   Accelerating Service Delivery

4.1.1.     Water – Amathole District Municipality is the Water Services Authority and supplies water and sanitation services to all local municipalities in the district. The area water coverage is more than 82%, with at least 25 litres per person per day within 200 metres walking distance. The water backlog sits at 18% of households not being served; from which Amahlathi Local Municipality have the highest number. The District Municipality ensures that their drinking water quality is monitored monthly, and its monitoring sites have increased significantly.

OR Tambo District – of the 304 685 households in the area 178 139 households do not have access to water. A number of water losses occur in the District due to unbilled consumers, illegal connections, unmetered yard connections, water leakages, shortage of bulk meters and domestic meters etc. Water quality is questionable due to uunavailability of suitably qualified process controllers, water safety plans, submission of WQ results by accredited lab. Poor record keeping is also a problem.

4.1.2.     Sanitation – Amathole District: Even though more than 80% of households in Eastern Cape have access to treated water from a tap, sanitation infrastructure lags behind water supply infrastructure. Around 32% of households do not have access to sanitation.

OR Tambo: Of the 304 685 households in the area, 78 968 do not have access to sanitation. The District developed a Sanitation Strategy in an effort to address its sanitation backlogs and challenges. The purpose of the strategy is to ensure that the issue of backlogs eradication is dealt with and that an appropriate sanitation model is provided to the communities/consumers for both urban and rural areas. Council resolved that: all sewer systems in the 9 towns should be upgraded to waterborne sewer system; the sewer model tube used in the rural areas should be the Ventilated Improved Pit (VIP) toilet, and a concrete precast VIP toilet super structure should be adopted as a standard toilet in the DM in an effort to address quality and the size of the structure.

4.2.   Enhancing Sound Financial Management

For the 2011/12 financial year the audit outcomes for municipalities in the Eastern Cape Province was as follow:

Audit opinion







No improvement




Regressed by 4




improved by 4




Improved by 4




Regressed by 1

4.3.   Promoting Good Governance

The Audit Committees were established in 42 municipalities in the Province, with 32 being own Committees and 10 shared Audit Committees. All MPACs have been established. All Ward Committees have been established and were fully functional.

Around 13% of the critical management posts have not been filled. At Mbashe Local Municipality councillors were suspended, found guilty and sentenced to a 5-year suspension for corruption. As there was no time for by-elections 16 of the councillors ware recalled. High vacancy rate in managerial area at the Municipality also existed, as those staff members were attached to the suspended councillors. Only 1 staff member was attached to the SCM Unit.

The Municipality was in the process of filling the vacant positions.

4.4.   Intensifying the Fight Against Corruption

The following municipalities were identified as hotspots




Nelson Mandela Bay Metropolitan

Political and administration interface.

Non compliance to legislative framework.

Abnormally high vacancy rate:

Poor contracts management.

Poor SCM systems

Poor disciplinary case management.

Audit regression.

Poor anti fraud and corruption policies.

MM has been on leave since June 2013.

To expedite recruitment of section 56 managers – currently incumbents in these positions are acting for a period of 3 months.

Section 154 of the Constitution support still continued.

Macro structure adopted, micro in process of development – service provider appointed and started on 22 April 2013.

Two officials from the Department have been seconded to assist.

New acting MM has been appointed.

Buffalo City Metropolitan Municipality

Tensions between the Mayor and municipal manager hampering service delivery

Failure of the Council to resolve on recovering overpayments due to councillor remuneration paid on incorrect grading.

Constant request against the provision of the applicable Act to extend the appointment of the Director of Health and public Safety.

Failure of the management to take advantage of the support given by Department on SCM.

Relations between the executive head and the administrative head should be improved.

The development of macro organogram of the institution is in the draft stage.

The Executive Mayor although given the last warning has failed to support the municipal manager in recovering irregular expenditure due to unlawful over-payments.

The CFO has been appointed.

Overpayment of councillors – the Department will continue to engage the Municipality to facilitate repayment. If all fails the Department will explore the possibility of referring the matter to other state agents that may assist with the recovery.

Mnquma Local Municipality

Political infighting – no sitting of Council, division amongst councillors.

Tensions between the Troika.

Poor management of employment processes of MM and section 56 managers (renewal and extension.

High rate of court cases: litigation tendencies.

Political interference in SCM processes.

Irregular withholding of some councillors salaries.

Irregular management of municipal banking account (attempts of changing signatories).

The Department has officially invoked section 139(b) of the Constitution.

An Administrator was appointed with clear terms of reference and she assumed duties on 19 March 2013

the contract for the administrator has been extended for another 3 months to ensure that among others, the MM and section 56 managers are appointed and assumed duties before her contract expires.

Mbashe Local Municipality

Political instability

Removal of mayor

Termination of MMs contract

Application of court cases by both MM and Mayor

Allegations of the Speaker interfering in administration

Expulsion of the Speaker and eight other councillors

Mr Dumezweni is challenging the municipality about his appointment

The Department has seconded Advocate Ngqele to the Municipality as an acting MM to restore administrative stability.

The MM and all other section 56 managers’ posts have been advertised.

Contract of the acting MM has been extended.

Mbizana Local Municipality

Tensions between MM and Mayor resulting in administrative instability

Tension between the Mayor, Chief Whip and the Speaker do not assist implementation of political mandate.

Dismissal of the MM without adhering to proper procedures could lead to litigation and wasteful expenditure.

Failure of the Council to be pro-active and avoid embarrassing situations – non availability of signatories.

Illegal conduct by some of the municipal council members – resolution on the MM suspension not found.

The political leadership has since been changed to restore stability within the Municipality.

The Department is in a process of assisting the Council in resolving the issue of suspending the MM, without resorting to the court of law.

In line with its constitutional mandate to support municipalities, the department has since seconded Mr Mapukata to act as a MM with clear terms of reference.

The municipality has submitted names of acting personnel for concurrence

Short-listing of MM and CFO conducted and interviews will be held on 31/07 and 01/08 2013.

Port St John’s (PSJ) Local Municipality

Illegal appointment of the MM – panel not chaired by the Mayor as required

and MEC was not informed about MM’s appointment in time

High Court case – MM’s appointment and interviewing panel.

There was poor financial management, leading to creditors attaching municipal assets.

CFO post was vacant – department seconded an official temporarily.

The court case against the MM was ongoing.

The Municipality has been unable to appoint a suitable candidate as a CFO.

The Department to continue supporting PSJ as it currently does e.g. secondment of departmental official to act as CFO.

No re-advertisement has been made as yet, as no suitable candidate could be identified from the latest list of candidates.

King Sabata Dalindyebo (KSD) Local Municipality

The recruitment of the CFO was done without following processes in full.

There was process to recruit the Director for Technical Services. The Corporate Services Director resigned – plans to second an official were afoot.

Poor management of Performance Management Unit – Department seconded two officials.

There was poor infrastructure budget expenditure.

Mr ZH Ngovela has been appointed with effect from 1 May 2013.

The Department seconded Mr Mdleleni to act as the Corporate Service Manager with effect from March – June 2013. The post has been advertised.

The Department is continuing its assistance to the Municipality in resolving the issue pertaining to the appointment of the CFO.

The Municipality approached the Department to assist with respect to the reviewing of the organogram, however a consultant has been appointed for that purposes.

Ntabankulu Local Municipality

Tensions between the Mayor, Speaker and MM.

Tensions are impacting negatively on the administration.

The MM has reported the refusal of the Mayor to sign the SDBIP.

The Department continues to render hands-on support.

The matter of the SDBIP has formally been referred to Provincial Treasury to assist in addressing this matter.

Gariep Local Municipality

Revenue generation problems.

Failure to pay major creditors.

Receive regular bailout from the Department and the District Municipality.

There was low revenue base.

Majority of residents are indigent and benefit from the FBS.

There is poor FBS data management.

Hands on support in terms of section 154 should continue and beefed up in the 2012/13 financial year. The Department supported the Municipality by transferring R1.5 million to recover assets that were attached.

In 2012/13 financial year a sum of R664, 036 were paid to the Auditor- General for audit fees owed by the Municipality.

Around R2 million have also been allocated in 2012/13, to improve audit outcomes and revenue enhancement.

OR Tambo District Municipality

Need for the review of an organisational structure as requested by the Municipality.

Macro structure developed – awaiting Council approval.

The Department has seconded Mr Gomomo to assist in the organisational development.

Baviaans Kloof Local Municipality

Cash flow problems.

Withholding of R1.2 million from the Equitable Share by National Treasury, due to incorrect application of rollover.

The Municipality was provided with R2 million in February 2013, as a relief for the mentioned challenge.

A task team established by the MEC developed a financial recovery plan which is being implemented by the Municipality.

Kouga Local Municipality

MM post has never been approved by the MEC.

Non payment of loans amounting to R6 million owed to the Development Bank of South Africa (DBSA) were in contravention of the MFMA, as a result of loans owed both councillors and staff to the Municipality.

Failure to pay major creditors (R111,696,784) bulk water, licensing and audit fees, Eskom and Sars.

A concern of an increase of debtors amounting to (R117,930,246) as at June.

The Department facilitated a meeting between the Municipality and DBSA

The Department has informed the MM that amounts owed by councillors/ex-councillors/retirees be recovered.

Department is assisting the Municipality with the collection of outstanding municipal services.

It facilitated meetings between the Municipality and the Nelson Mandela Bay Metropolitan Municipality\a committee consisting of Department, Municipality, DBSA and Provincial Treasury has been established to oversee the restructuring of DBSA loans.

The Department has set up a team to establish the possibility of the Municipality paying he amount owed to DWA from its own funds.

Sunday Rivers Valley Local Municipality

Cash flow problems – the Municipality owes the DWA an amount of R6 million which was spent on operational expenditure instead of bulk water projects.

The Municipality received a letter of demand from the Special Investigation Unit (SIU), as instructed by DWA.

The financial system did not produce appropriate reports.

A task team compromising of officials from the department and PPT, was established to assess the situation and recommend the appropriate action.

The team commenced with the assessment on 13 May 2013. A template to identify excessive expenditure items was provided to the municipal officials for completion.

The Department further paid and amount of R700 826 to the Auditor-General for audit fees on behalf of the Municipality in January 2013.

The PPT and Cacadu DM are currently assessing the compatibility of the financial system.

Ngqushwa Local Municipality

The MM post has been vacant since September 2012.

The Department has seconded Ms Mbelani as an acting MM since January 2013. The post has since been advertised.

4.5.   Traditional Affairs

The Province has 6 kings, 240 senior traditional leaders, 1,176 headmen/women and 1,097 traditional councils. In 2010, 232 councils were reconstituted and transformed in Eastern Cape. Ten traditional councils have been constricted to date as the Department allocates a budget for construction of only 2 traditional councils and renovations of 2 traditional councils per financial year due to limited resources.  The Department provides assistance to traditional leadership institutions e.g. subsistence allowance when attending official duties, accommodation and air tickets for official duties, vehicles allocated to Kings and executive members of the provincial House of traditional leaders, cell phone and petrol allowances etc.

Out of the 45 municipalities, 257 traditional leaders participate in 28 municipalities. Guidelines for the participation of traditional leaders in municipal councils have been developed by the Department in terms of section 81 of the Municipal Structures Act, 1998. Due to the absence of legislation municipalities differ in terms of resources and out of pocket expenses provided for traditional leaders. Guidelines for the payment of out of pocket expenses have also been developed to assist municipalities.

5.     Committee findings

5.1.    North West Province


Section 154(1) of the South African Constitution, requires provinces to support and strengthen the capacity of municipalities to manage their own affairs and perform their function. However, the capacity of the North West Provincial Department of Cooperative Governance and Traditional Affairs to support, monitor and evaluate municipalities appeared inadequate. The Department’s mandate did not seem commensurate with the resources provided. This hampered the Department’s ability to develop strong monitoring and early warning systems for local government. Consequently, many municipalities in the Province continue to struggle with capacity issues. Because stronger municipalities are contingent on stronger provinces, there is a compelling need to capacitate provinces, financially and otherwise, to enable them to fulfil their oversight function over municipalities.

Municipalities in the Province are not only hamstrung by lack of adequate support from the Department. They are also struggling to attract and retain critical personnel. Critical posts remain vacant for long periods. Acting positions are prevalent and this constrains meaningful decision-making. Of the critical posts that have been filled, very few have been occupied for more than a year. The resultant lack of continuity and institutional memory poses serious service delivery challenges.


The state of governance was such that most of the municipalities in the Province would qualify for intervention in terms of section 139 of the Constitution. This is also confirmed by the 2011/12 local government audit findings where 74% of municipalities in the Province are said to require intervention in terms of governance, among other things. This is an improvement from the 83% registered in the 2010/11 financial year. However, the practice of provincial intervention into municipalities in North West seemed inconsistent. A number of municipalities that should have been under Section 139 were not. At the time of the oversight visit by the Portfolio Committee, three municipalities were under administration in terms of Section 139: Matlosana, Ditsobotla and Maquassi Hills.  Where section 139 had been invoked, evidence of improvement was not always clear. Interventions were often highly ambitious, seeking to resolve long-standing problems within a minimum of 6 months and maximum of 12 months. There is thus a dire need for a long-term perspective on interventions.

Differing interpretations of section 139 presented another difficulty. Administrators appointed in terms of this Section sometimes misunderstood their powers. An Administrator in Maquassi Hills took it as his prerogative to dissolve the Municipal Council. In terms of the Municipal Structures Act of 1998, a Council may indeed be dissolved if intervention has not enabled it to fulfil its obligations in terms of legislation. However, the power to dissolve a Council is vested in the MEC responsible for Local Government. In addition the Minister of Cooperative Governance must concur with the dissolution and the National Council of Provinces (NCOP) must approve it.

Resistance and objections to interventions were also common. The disagreements are usually around the terms of reference for the intervention. The transfer of skills by the Administrator as well provision of exit reports was another area of concern.

Financial Management

Despite spending exorbitant amounts on consultants to assist with preparing annual financial statements, many municipalities were sitting with disclaimer audit opinions for consecutive years. 17 of the Province’s 23 municipalities enlisted the assistance of consultants at a cost of R31 million for the 2011/12 financial year. For the last four years, none of the municipalities in the Province has obtained a clean audit. There is thus a question of value for money that needs concerted attention.

Municipalities were also providing services for which they were not paid. Non-payment by government departments, businesses and households crippled service delivery in some municipalities. Most concerning was the fact that both the National and Provincial Departments of Cooperative Governance and Traditional Affairs, as well as District municipalities, owed municipalities substantial amounts in unpaid debts.

Service Delivery

The bucket system is still prevalent in the Province, with access to flush toilets estimated at only 45.4%.

In terms of access to electricity, the municipalities in the Province were experiencing substantial backlogs due to a constant increase of informal settlements and new extensions. Illegal electricity connections also posed a major problem, with electricity departments in some municipalities sometimes implicated in the by-passing of electricity meters.

While Census 2011 indicates that access to piped water above or at Reconstruction and Development Program (RDP) level increased from 86.6% in 2001 to 91.6% in 2011, many municipalities were also experiencing water losses. Aging and problematic infrastructure, which municipalities have inherited from the Department of Water Affairs, was the leading cause of these losses.


It was not uncommon for some technically insolvent municipalities to use capital grants for operational expenditure. This has seen the Municipal Infrastructure Grant (MIG) for instance being used to pay for salaries instead of infrastructure projects. Where the MIG was being used for its intended purpose, emphasis tended to be on the development of new infrastructure. The problem of ageing existing infrastructure has been consequently neglected. Poor spending on the MIG is also prevalent, resulting in late implementation of infrastructure projects. The Municipal Infrastructure Support Agent (MISA) has been enlisted to assist with these problems. A few municipalities are currently receiving MISA support but the turn-around is not yet evident.


The Provincial Department of Local Government and Traditional Affairs was conducting enquiries into three municipalities - Moses Kotane, Ventersdorp and Tswaing - on cases relating to alleged corruption, maladministration and nepotism.

5.2.    Eastern Cape Province


Political instability was prevalent in some municipalities. This resulted in, among other things, the inability to fill critical posts. Municipal capacity challenges in the Province also became clear when it was part of the areas declared National State of Disasters by the President during the December 2010 to January 2011 flood incidents, as well as during the October 2012 flood disasters. In terms of legislation, disaster management is a function of the District. Accordingly, local municipalities classify disaster management as an unfunded mandate with a zero budget. District municipalities on the other hand have limited or no budget to respond to disasters. The Provincial Disaster Management Centre also did not have the institutional capacity to coordinate disaster response and recovery.


In terms of governance, 14 municipalities in the Province have been identified as ‘hotspots’. These are Nelson Mandela Bay, Buffalo City, Mnquma, Mbhashe, Mbizana, Port St. Johns, King Sabatha Dalindyebo, Ntabankulu, Gariep, OR Tambo District, Baviaans, Kouga, Sunday’s River Valley and Nqgushwa. The Portfolio Committee heard presentations from 5 of these: Mnquma, Mbhashe, Port St. Johns, King Sabatha Dalindyebo and OR Tambo District.

Cash flow problems, vacant posts, political infighting and tensions between Mayors, Chief Whips and Speakers were some of the issues that placed these municipalities in the ‘hotspot’ list. Since 19 March 2013, Mnquma has been placed under administration in terms of Section 139 of the Constitution.

Concerns were also raised around the function of Intergovernmental Relations (IGR) – a structure meant to foster coordination between the Districts and local municipalities. Senior Managers often do not participate in IGR meetings, delegating junior officials who do not have decision-making powers. The minimum participation of other spheres of government in municipal planning processes also emerged as a concern.

Financial Management

In the District of Amathole, over 80% of consumers are considered indigent. Consequently the District is almost totally dependent on grants. On top of this municipalities in the District were owed R49.7 million in debt as at 30 June 2013. Government Departments accounted for R8.5 million of this debt. The District’s audit outcomes for 2011/12 were also not very encouraging, with 6 out of the 8 municipalities receiving disclaimers or qualified audits.

Service Delivery

While more than 80% of households in the Province have access to treated water from a tap, there are still a few water backlogs. At Amathole, one of the Districts the Portfolio Committee visited, the water backlog sits at 18%. This means that 39 541 out of 223 249 of households still do not have access to water.  The problem is not lack of water. In fact water demand in the District is currently less than the available yield of the catchments, with the result that the area is one of the few in the country that has surplus water available on a catchment wide basis.

Sanitation infrastructure lags behind water infrastructure, with 32% of the population in the District not having access to acceptable toilet facilities.


The majority of municipalities in the province (52%) were showing bad performance in terms of ensuring that the allocated MIG was spent. Many of the treatment facilities and water schemes, particularly in the Amathole District, are very old. The problem is particularly acute in older towns where there has been no upgrading or refurbishment for many years. The District insists that it does not have the financial capability to address this challenge. In short, the District has water and sanitation infrastructure valued at over R1 billion but with no financial ability to effect any refurbishment.

Road and infrastructure backlogs were also high, particularly in OR Tambo, the other District visited by the Portfolio Committee. In some cases, the existing infrastructure could not cope sufficiently with the increasing influx of people from the rural to the urban spaces.


Suspected cases of corruption were around the following instances:

·         Alleged receipt of money for promise of employment;

·         Alleged theft of car parts; and

·         Misrepresentation of municipal bank accounts to induce payment into false accounts.

Findings from Meeting with the Traditional Councils

Traditional authorities raised a number of concerns. Among these was the irregular recruitment of a CFO in King Sabatha Dalindyebo Local Municipality. The Provincial Department of Cooperative Governance and Traditional Affairs were assisting the Municipality with resolving the issue. There was also a call for the finalisation of the ‘tools of trade’ for traditional leaders, as well clarification and implementation of pension fund and medical aid benefits. The participation of traditional leaders in municipalities was also a point of concern and there was a call for the development of regulations to govern this matter. The Eastern Cape was also the only province in the country that had a fully established office block for the Provincial House of Traditional Leaders.

6.     Recommendations

North West Province



Time frame


Eradication of bucket system - Progress on flush toilets in all municipalities in the North West is very slow. An estimated 10,467 households were still using bucket system especially in Bojanala Platinum District, which was estimated at 4,660 buckets.

The Committee recommends that:

- In the next financial year, the eradication of the bucket system should be prioritised by the municipalities in the Province.

12 months from the adoption of this report.

Province and Municipalities.

The intervention made by the Premier through the Premier’s legacy Projects for Mahikeng Local Municipality, had no time frames.

The Provincial Department should furnish CoGTA and Water Affairs a clear programme, so that water problems can be expedited resolved.

30 days from the adoption of this report.

The Provincial Department of CoGTA.

Out of the 23 municipalities in North West, Kagisano-Molopo  Local Municipality has spent the least in terms of its budget compared to all municipalities in the Province.

The support on MISA to this Municipality should be strengthened, so that they can be able to implement capital projects.

3 months.

SALGA, National Department of CoGTA.

Aging infrastructure was a major challenge, as municipalities are focusing on the development of new infrastructure and neglecting operations and maintenance responsibilities.

The Provincial Government and MISA should assist the municipalities in drawing up maintenance plans.

12 months.

National Department of CoGTA.

Enhancing sound financial management – for 2011/12 financial year, the audit outcomes for municipalities has shown no improvement. Three municipalities in the Province have regressed to disclaimers.

The National Department of CoGTA should establish a task team which will target struggling municipalities in terms of financial management and assist those municipalities to establish relevant structures which will monitor and evaluate whether correct measures were in place.

6 months.

National   Department of CoGTA, SALGA, National Treasury and Provincial Department of CoGTA.

IGR – have not been functioning optimally as envisaged in the Framework.

The National Department of CoGTA should take lead in coordinating these meetings.

Ongoing by the Department.

National Department of CoGTA.

The Provincial Department was currently conducting enquiries in Moses Kotane, Ventersdorp and Tswaing Local Municipalities, on allegations of corruption and fraud.

The National Department of CoGTA should furnish the Committee with a report on the outcomes of the investigation and action taken against those found guilty.

3 months.

National Department of CoGTA.

Section 139 of the Constitution has been invoked in 3 municipalities in the Province, but there are other municipalities that are in worse position in terms of financial management and governance.

The Province should be consistent in terms of the application of interventions.

3 months.

Provincial Department of CoGTA.

Eastern Cape Province



Time frame


Amathole District Municipality was the WSA for all municipalities in the District. Amahlathi Local Municipality has the highest number of water backlogs.

The Committee recommends that:

Amahlathi LM should be prioritised in terms of water projects, so as to reduce the number of water losses.

12 months.

Amathole District Municipality.

Access to water in the OR Tambo District municipality was a challenge. Water losses occurred due to illegal connections, unbilled consumers, unmetered yard      connections, water leakages and shortage of bulk and domestic metres.

Suitable candidates for record keeping, qualified Water Controllers should be recruited for this problem to be resolved. The quality of water should also be monitored. Communities must be educated on the importance of paying for services to curb illegal connection problems.

12 months.

OR Tambo District Municipality.

Mbhashe Local Municipality – Poor anti-fraud and corruption policies – The MM has been on leave since June 2013.

The provincial and national Departments of CoGTA should pay special attention to the issues raised in the Committee’s report to resolve the situation.

Immediately and on an ongoing basis.

Provincial and National Department of CoGTA.

Buffalo City Metro and Mbizana Local Municipality – since these municipalities were identified as hotspots by the Province, there was tension at the level of Troika which hampers service delivery.

The interventions proposed by Province and national Department should be expedited to smoothen the functioning of the Municipality. A report on the status of the interventions and its assistance be forwarded to the Committee.

3 months.

Provincial and National Department of CoGTA.

Additional Recommendations



Time frame


Poor capacity to spend on the MIG.

The National Department of CoGTA should produce a report on how many municipalities they have capacitated to spend the MIG

Provincial and National Department of CoGTA.

Aging Infrastructure is a serious problem

National Department must assist all provinces with development of maintenance plans for aging infrastructure

Provincial and National Department of CoGTA.

Debt owed to municipalities hampered service delivery.

National Department should resolve the issue.

Provincial and National Department of CoGTA.

Consequences for non-compliance

The issue of lack of consequences for non-compliance with Auditor-General’s findings must be addressed.

Provincial and National Department of CoGTA.

An Induna in Mvezo Traditional Council was being paid, while not rendering any services. In the North West Province a Chief was likewise refusing to engage with municipal matters.

The National Department of CoGTA must undertake further investigation on these matters. Also recommend that the passing of the National Traditional Affairs Amendment Bill be expedited to clarify the responsibilities of traditional leaders.

Provincial and National Department of CoGTA.

Committee also noted the discussion with regard to King Dalindyebo.

The Department of Traditional Affairs should to furnish the Committee with progress report on the matter.

Department of Traditional Affairs.

7.     Conclusion

It was requested that the Minister for CoGTA should ensure and facilitate the implementation of the above recommendations.

Report to be considered.


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