ATC190220: Report of the Select Committee on Cooperative Governance and Traditional Affairs Inspection Loco on Notice of Intervention issued in Terms of Section 139 (1) (b) of the Constitution in Mahikeng Local Municipality, dated 20 February 2019
Report of the Select Committee on Cooperative Governance and Traditional Affairs Inspection Loco on Notice of Intervention issued in Terms of Section 139 (1) (b) of the Constitution in Mahikeng Local Municipality, dated 20 February 2019
1. Background and Overview
1.1 The Select Committee on Co-operative Governance and Traditional Affairs, having considered the request by the National Council of Provinces (NCOP), to consider and report on the intervention notice invoked in Mahikeng Local Municipality in terms of section 139(1)(b) of the Constitution, the Select Committee reports as follows:
1.2 In terms of NCOP Rule 101, the Office of the Chairperson of the NCOP referred the notice of intervention by the North West MEC for Cooperative Governance, Human Settlement and Traditional Affairs (CoGTA), to the Select Committee for consideration and reporting. On 29 January 2019, the Multi-Party Delegation of the Select Committee conducted a loco inspection in Mahikeng Local Municipality.
2. Objective of the Loco Inspection in Mahikeng Local Municipality
2.1 The main objective was to interact with the internal and external stakeholders of the Municipality in order to solicit their opinions on the constitutional, procedural and substantive matters related to the invocation of section 139(1)(b) of the Constitution.
3. Composition of the Delegation
3.1 The Select Committee delegation was composed of the following Members of Parliament and officials: (ANC); Hon T Wana, Eastern Cape (ANC); (ANC); Hon G Oliphant, Northern Cape (ANC); Hon D Ximbi, Western Cape (ANC); Hon E Mateme, Limpopo (ANC); Hon M Chetty, KwaZulu-Natal (DA); Hon B Engelbrecht, Gauteng (DA), Mr TM Manele, Committee Secretary (Committee Section), Mr B Mahlangeni, Researcher (Research Unit) and Mr N Mfuku, Content Advisor (Committee Section), Mr P Bongco, Committee Assistant (Committee Section) and Mr M Mbebe, Procedural Officer, NCOP
4. General Overview of the Loco Inspection at Mahikeng Local Municipality
4.1 On 29 January 2019, the delegation of the Select Committee interacted with senior officials of the Department of CoGTA, representatives of the African National Congress (ANC), Democratic Alliance (DA), Economic Freedom Fighters (EFF); United Christian Democratic Party, South African Local Government Association (SALGA), and the South African Municipal Workers Union (SAMWU).
4.2. The Chief-Director official made a presentation on the constitutional, procedural and substantive reasons for the intervention. The representatives of the political parties and Organised Labour, shared their opinions with regard to the intervention as tabled by the MEC for CoGTA.
5. Presentation on Substantive Matters Related to the Invocation of Section 139 (1) (b) of the Constitution
5.1. The Chief-Director of the Department of Cooperative Governance, Human Settlement and Traditional Affairs made presentation on the constitutional, procedural and substantive matters related to the invocation of section 139 (1) (b) of the constitution. The presentation focused on the service delivery, governance and administrative instability and financial distress
6. Service Deliver Constrains
6.1. The Municipality refuse removal and cleaning of town and township not performed. The municipality experienced interrupted supply of water due to non-payment of water services
6.2. Mmabatho waste water treatment plan not fully functional and mechanical and electrical equipment not functioning
6.3. Poor expenditure of Municipal infrastructure grant affected municipal infrastructure development
7. Governance and Administrative Instability
7.1. Suspension of the municipal managers and failure to process disciplinary charges
7.2. Failure by the council to meet and resolve on appointment of municipal manager in acting capacity
7.3. labour unrest due to failure to pay pension funds of employees and provide protective clothing which affected the day to day administration of the municipality
7.3. Poor audit outcomes with recurrent audit findings pertaining to irregular expenditure and unauthorised expenditure and the municipality have not address them in accordance with the section 32 of Municipal Finance Management Act
8. Financial Management Distress
8.1. Irregular procurement of white and yellow fleet paid an advance amount of R18 million
8.2. Non- payment of pension fund deficit for 200 million because of cash constrains
8.3. Budget adopted or 2018 and 2019 is structurally imbalanced and not aligned to the Integrated Development Planning (IDP)
8.4. Total outstanding creditors are R290 of which R254 million is outstanding far more 90 days. Water board constitutes R251 million of the total outstanding creditors debt
9. Opinions of Political Parties and Stakeholders of the Municipality
9.1 During loco-inspection, the Select Committee interacted and solicited opinions of the political parties, internal and external stakeholders of the Municipality. Their opinions are tabled below:
10. Opinion of the African National Congress (ANC)
10.1 The representative of the ANC indicated that the municipal council has acknowledged the PEC’s decision to invoke section 139(1)(b) of the Constitution in the Municipality. The representative further acknowledge the progress made in respect of the intervention and further emphasised the importance of working together to ensure stability within the local municipality
12. Opinion of the Democratic Alliance (DA)
12.1 The representative of the DA tabled an opinion that supported the invocation of section 139 (1) (b) of the Constitution. However, the representative raised concerns with regard to lack service delivery, high level of corruption within the municipality, non- impact of interventions previously invoked in the municipality and unequal provision of basic services in the communities more especially on water and sanitation.
13. Opinion of Economic Freedom Fighters (EFF)
13.1 The representative of the EFF tabled an opinion that did not support the invocation of section 139 (1) (b) of the Constitution. The representative raised concerns, lack of progress made during the previous interventions in the local municipality, looting of municipal resources, lack of accountability, mission of 2 million from the municipal account, use of municipal infrastructure grant for payment of salaries and incomplete projects.
14 African Christian Democratic Party
14.1. The representative of the African Christian Democratic Party tabled the opinion that supported the invocation of section 139 (1) (b) of the Constitution. The representative however raised concerns about the role of south African local government support to the municipality, backlog and quality of service delivery and sabotaging of service delivery by senior officials of the municipality
14. Opinion of the Municipal Organised Labour
14.1 The representative of the Independent Municipal and Allied Trade Union (IMATU) tabled an opinion that supported the intervention. The representative then emphasised the importance of implementing organisational decisions.
14.2 The representative of SAMWU tabled an opinion that supported the intervention. However, the representative of the Union raised concerns with regard to the non-payments of salaries, filling of vacant position of the Municipal Manager and the recognition of the signed agreement with the employer.
15. Select Committee Observations and Opinion
15.1 In terms of the constitutional and procedural matters, the Select Committee has observed that the National Minister for CoGTA, the NCOP, the Free State Provincial Legislature and the Municipality were notified of the intervention in terms of section 139 (1) (b) of the Constitution
15.2 The Select Committee has further observed service delivery and financial management challenges related to sanitation, water, litigations, irregular payment, outstanding creditors debts, non- payment of pension funds
14. Recommendations of the Select Committee
14.1 Having conducted the oversight visit to Mahikeng Local Municipality and interacted with internal and external stakeholders, the Select Committee on Co-operative Governance and Traditional Affairs recommends as follows:
14.1.1 The NCOP approves the intervention in Mahikeng Local Municipality in terms of section 139(1)(b) of the Constitution.
14.1.2 The Administrator should fast-tract the process of implementing the municipal turn-around plan, in accordance with the terms of reference assigned by the North West MEC for CoGTA.
14.1.3 The Administrator should provide progress reports on the implication of the non-payments pension funds, criminal steps on unaccounted funds; municipal plan to pay Eskom debt; filling of critical vacant positions; recovery plan and service delivery plan.
14.1.4. The North West MEC for CoGTA should conduct Forensic Investigation on Supply Chain Management in the municipality and table the report to the National Council of Provinces.
14.1.4 The North West MEC for CoGTA should table quarterly progress report to the NCOP on the status of the intervention in the Municipality; including challenges encountered.
14.1.5 The Select Committee on Co-operative Governance and Traditional Affairs, in co-operation with the relevant Portfolio Committee in North West Provincial Legislature, should in future conduct a follow-up oversight visit to the Municipality in order to evaluate the progress made in respect of the intervention in the Municipality.
Report to be considered.
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