ATC200715: Report of the Select Committee on Cooperative Governance and Traditional Affairs, Water, Sanitation and Human Settlements on the Special Adjusted 2020/21 Budget and Annual Performance Plans of the Department of cooperative Governance and Traditional Affairs, and the Municipal Infrastructure Support Agency: dated 15 July 2020

NCOP Cooperative Governance & Traditional Affairs, Water and Sanitation and Human Settlements

REPORT OF THE SELECT COMMITTEE ON COOPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS, WATER, SANITATION AND HUMAN SETTLEMENTS ON THE SPECIAL ADJUSTED 2020/21 BUDGET AND ANNUAL PERFORMANCE PLANSOF THE DEPARTMENT OFCOOPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS, AND THE MUNICIPAL INFRASTRUCTURE SUPPORT AGENCY: DATED 15 JULY 2020

 

1.         Background and Overview 

The Select Committee on Cooperative Governance and Traditional Affairs, Water, Sanitation and Human Settlements having considered the special adjusted 2020/21 budget of the Department of Cooperative Governance and Traditional Affairs, and the Municipal Infrastructure Support Agency (MISA), reports as follows:

1.1        On 9 July 2020, the Department of Traditional Affairs (DTA) and MISA briefed the Select Committee and the Portfolio Committee on Cooperation Governance and Traditional Affairs on 2020/21 special adjusted budget and revised annual performance plans (APP).

1.2        The presented special adjusted budget of the DTAfocused on the economic classification and allocation to the departmental programmes such as Administration, Research Policy and Legislation, and Institutional Support and Coordination.

1.3        The special adjusted budget of MISAfocused on the background, adjustment to allocation for 2020/21 financial year,impact of the budget reduction on the 2020/21 APP and proposed changes to the APP.

1.4        On 14 July 2020, the Department of Cooperative Governance and Traditional Affairs, also briefed both the Select and the Portfolio Committees on the special adjusted budget and revised APP.

1.5        The special adjusted budget of the Department of Cooperative Governance and Traditional Affairs focused on the introduction, strategic focus, key changes to the strategic plan, revised APP and the 2020/21 special adjustment budget.

 

2.         Briefing by the Department of Traditional Affairs on 2020/21 Special Adjusted Budget and Revised APP

2.1        The Director-General briefed both Committeeson the 2020/21 special adjusted budget and APP of the Department.

2.2        The Department indicated that COVID-19 was declared a global pandemic by the World Health Organisation (WHO), and a national state of disaster was subsequently declared in South Africa by the President of the Republic.

2.3        The global pandemic was not anticipated and consequently not budgeted for.  The President announced a R500 billion fiscal support package, and the package is partially funded from existing departmental budgets.  This resulted in DTA 2020/21 budget being reduced by R3 million in response to the President announcement.

2.4        The current 2020-2025 Strategic Plan (SP) and 2020/21 APP were tabled in Parliament on 11 March 2020. Thus, the purpose of this presentation was to highlight the revised special budget adjustment and revisions currently under consideration in the APP to respond to the baseline cuts, COVID-19 pandemic and the outstanding proclamation of the Traditional and Khoi-San Leadership Act, 2019.

 

3.         Summary of Budget Allocation per Programme and Economic Classification

3.1        The summary per programme and economic classification covers budget allocation on administration, research policy and legislation, institutional support and coordination.

3.2        The   budget allocation also caters for compensation of employees, goods and services, transfers and subsidies, payment for capital assets and payments for financial assets. 

 

4.         Programme 1: Administration

 

 

 

 

 

5.         Programme 2: Research Policy and Legislation

 

6.         Programme 3: Institutional Support and Coordination

 

7.         Observations of the Select Committee

7.1        The correlations between the activities that would be discontinued and the reduction seemed to only cover goods and services. The narrative explanation of the spread of the budget cut did not seem to align with the special budget adjustments, which only looked at goods and services.

7.2        The Select Committee has observed and noted that the Department has in its revised APP reconsidered and discontinued the planned targets on research and customary role of the Khoi-San and research towards the customary law. 

7.3        The Select Committee has noted that the rational for the discontinuation related to the fact that the Nama leaders couldnot be visited, due to travel restrictions under COVID-19 regulations. These leaders also do not have the tools needed to conduct virtual interviews. 

7.4        The Select Committee has also noted that the research towards the customary law has been, because this research may not be possible due to the implications brought by COVID-19 to other African countries that may have a bearing on the methodology.

7.5        The Select Committee has further observed and noted that due to the travelling restrictions under COVID-19, the planned targets on training of Traditional Leaders and induction of Traditional Council have also been discontinued.

7.6        Finally, the Select Committee has noted that the 2020/21 budget allocation of the Department has been reduced by R3 million, and that proposed changes to the 2020/21 APP have accordingly been effected.

8.         Recommendations of the Select Committee

8.1        The Department of Traditional Affairs should explore option of using video-conferencing platforms and E-learning to facilitate virtual meetings and capacity building programme of Traditional Leaders as part of institutional development and coordination

8.2        As part of inter-governmental relations and cooperative governance, the DTA should consider working with the Department of Justice and Constitutional Development, and the Department of Correctional Services to improve and maintain traditional courts in the communities under the jurisdiction of Traditional Leaders.

8.3        In order to enable the Traditional Councils to convene virtual meetings and Traditional Leaders to participate in District COVID-19 Command Centers, the DTA, should provide the necessary tools of trade to the Traditional Leaders.

8.4.       The Department of Traditional Affairs should develop a programme on budget allocation to  Khoisan Traditional Leaders in order to ensure that they perform their constitutional duties along the norms and standards of other Traditional Leaders       

8.5        The DTA should table quarterly progress report in respect of the special adjusted budget allocation and achievements of the outputs contained in its 2020/21 revised APP.

9.         Briefing by MISA on 2020/21 Special Adjusted Budget and Revised APP

9.1        The DDG (Infrastructure Delivery Management Support), presented the 2020/21 special adjusted budget and revised APP. The DDG indicated that the President announced the fiscal support measures amounting of R500 in response to COVID-19 pandemic and lockdown.

9.2        Part of the funding package was sourced from reprioritization of 2020/21 baseline to release R130 billion.This reprioritization necessitated the special budget adjustment tabled by the Minister of Finance on 24 June 2020.The budget adjustment has resulted in the reduction of the 2020/21 allocation for MISA by R5 982 000.

 

9.3        In light of this reduction, it was reported that MISA has initiated a review of the approved Strategic Plan for 2020-2025 and APP for 2020/21. Preliminary indications are that the reduction will adversely affect the entity’s ability to achieve performance targets for some output indicators in the APP.

 

9.4        It wasfurther highlighted that the impact of the special budget adjustment on the budget allocated to MISA in the February budget and envisaged adjustment to 2020/21 APP, as a consequence of the adjustment.

10.       Impact of the Special Adjusted Budget on the APP and Strategic Plan

                                                                                                             

10.1      MISA had commenced with the review of its Strategic Plan (SP) for 2020-2025 and APP, in light of the COVID-19 lockdown and budget adjustment.

 

10.2      Preliminary indications from the SP and APP review process show that the budget adjustment will not impact the approved SP.It will however have adverse impact on the achievement of some of the output targets in the approved APP.

10.3      Specifically, the adjustment will affect three output indicators in the approved APP. Two of these indicators are under the Technical Support Programme and one is under the Infrastructure Delivery Management Support (IDMS) Programme.

 

10.4      The proposed amendments will result in the removal of two indicators in the 2020/21 APP, that will reduce the number of indicators from 32 to 29.

 

11.           Observations of the Select Committee

 

11.1      The Select Committee has observed and noted that the 2020/21 MISA budget has been reduced by R5 982 000 from R359 749 000 to R353 767 000.

11.2      The budget adjustment was only effected on Subsistence and Travel Allowance (R3,9 million) and on Depreciation (R2 million) as other funds are fully committed.

11.3      The Select Committee has noted with concerns that the output under Technical Support Services programme of MISA, has been removed from the revised 2020/21 APP due to budget reduction.

11.4      The above-mentioned outputs relate to the number of artisans, water and waste water process controllers placed in the municipalities.

11.5      Despite the budget reduction, the Select Committee has further noted that the adjustment to MISA allocation for 2020/21 financial year and the resultant impact on MISA current budget.

11.6      The Select Committee has however, welcomed the commitment by MISA to review its five-year Strategic Plan and 2020/21 APP that will result in re-tabling of the APP.

12.       Recommendations of the Select Committee

12.1      MISA should improve access to services in municipalities and create reliable municipal infrastructure.

12.2      MISA should maintain its unqualified audit opinion, with no material findings which it achieved in 2018/19. It should also reduce its irregular, wasteful and fruitless expenditure.

12.3      In terms of water management, MISA should stabilise non-revenue water loss in municipalities. South Africa has a serious problem with non-revenue water across all municipalities.

12.4      The entity should address operational challenges where allocated expenditure is spent on repairs and maintenance. Municipalities are currently spending 0.8% on maintenance on average across municipalities, but required to spend at least 8% of its operational budget on this.

13.       Briefing by the Department of Cooperative Governance and Traditional Affairs on 2020/21 Special Adjusted Budget

13.1      On 09 July 2020, the Department of Cooperative Governance and Traditional Affairs presented its 2020/21 special adjusted budget and revised APP. The presentation focused on changes to 2020/21 APP.

13.2      The Department indicated that it has not revised its 2020-2025 Strategic Plan, which still has 6 key outcomes. However, the Department reported that it has revised its 2020/21 APPto make provision to COVID-19 response, and special adjusted budget to cater for those targets that are likely not to be achieved in the first quarter of the financial year with carry-over implications for subsequent quarters of this financial year. 

13.3      The Department has also responded to the Government’s Strategy on Gender Based Violence, and these initiatives will be cascaded down the support provided to municipalities through the District Development Model.

13.4      Due to the number of new indicators that had to be added while itcontinues with some of the initial projects, some indicators have been consigned to the Operational Plan.

 

14.        Changes and Focus of the Departmental APP

 

14.1      COVID-19 response support to municipalities (reprioritization of municipal grants) and disaster management response.

14.2      Disaster management grant funding review- to ensure that disaster grants are more responsive and easily accessible for disaster relief.

 

14.3      COVID-19 and post COVID-19 economic recovery for local government- aligned to DDM and One Plans.

14.4      Support to municipalities in preparation for 2021 Local Government Elections.

14.5      Establishment of CWP cooperatives through the agrarian reforms.

14.6      Expenditure on internal COVID-19 response (DCoG COVID-19 Business Continuity Plan).

14.7      Development of a funding model for local government.

14.8      The championing of a national responsible citizenry campaign across municipalities to improve the culture of payment for service.

 

15.        Programme 1: Administration

 

New indicators	Rational
Indicator 1.6 Automation of four business processes.	To provide continuation of operations through ICT during the Lockdown e.g. MS Teams and Microsoft 365.
Indicator 1.7 % spent on Covid-19 Business Continuity Plan.	To ensure that appropriate resources are allocated to mitigate against COVID-19 infections.
Continued indicators	Rational
Indicator 1.1 Qualified audit outcome for 2019/20 FY. 1.2 100% of suppliers paid within 30 days for uncontested invoices. 1.3 Percentage alignment of SMS performance agreements to annual targets. 1.4 Improvement of organizational performance from 83% to 85%. 1.5 100% Alignment of organization structure to Strategy.	The projects are still relevant and will be implemented with the purpose of improving internal resources utilization and improve the culture of individual and organizational performance and audit outcomes.
Other operational plan	Rational
Establishment of a Project Management Office.	To drive implementation of projects and operations, processes and systems.
100 % Screening of people entering the CoGTA buildings and provision of Personal Protective Equipment (PPE) and installation of sanitization equipment.	To implement health and safety provision on COVID-19.

 

                                

16.        Programme 2: Regional, Urban Development and Legislative Support 

 

New indicators	Rational
Indicator 2.5 Economic Recovery Plans implemented in 52 district sites.	Despite it being part of the One Plan initiative, it is critical to elevate it to APP level to respond to the local economic crisis now and post COVID-19.
Continued and revised indicators	Rational
Indicator 2.2 Revised IUDF implementation plan rolled-out in 44 Districts and eight metros Indicator 2.3 Capital Expenditure frameworks for four intermediate cities implemented. Indicator 2.4 44 Draft district and eight metro One Plans developed covering priority areas of Government COVID-19 and GBVF Response Indicator and Indicator 2.6 District Hubs established for six districts and 3 Metros.	The revised IUDF Implementation plan is concluded and will be processed to cabinet- new targets included from Q2 onwards. To support responses to curb gender-based violence and femicide.
Other operational targets	Rational
Indicator 2.1 257 municipal IDPs for 2021/22 FY are aligned to the One Plans of the Districts and Metros.	The target has been revised to allow for the process to develop the One Plans that cover GBVF to unfold and an operational plan target is introduced to develop guidelines on alignment of One Plans and IDPs.

 

17.        Programme 3: Institutional Development

 

New indicators	Rational
Support provided to stakeholders on preparations for the local government elections.	To ensure that government is well prepared within this new normal – COVID-19 pandemic.
Funding Model for Local Government developed and approved.	Under the Umbrella ‘Rethinking Municipal Finance’ we plan to work with NT to stabilize municipal finances from a revenue and expenditure perspective on how to minimize the impact of COVID-19.
80% functionality of Municipal Public Accounts Committees (MPACs) and audit committees.	Build financially viable municipalities and contribute to improved audit outcomes.
Rollout the National Responsible Citizenry Campaign across all 257 municipalities.	To promote and encourage the culture of payment for services under the theme reigniting the culture of active and responsive citizenry.
Continued indicators	Rational
Draft Integrated local government capacity building strategy developed and 3.7 Smart Cities Framework Developed.	Still relevant and does not required physical contact.
Other operational plan target	Rational
Report on the implementation of actions to address issues raised by the AGSA in line with section 134 of the MFMA.	The reporting part will continue with the indicator cosigned to Operational plan with attention more on Funding Model and functional governance structures.
Indicators on Compliance to the Municipal Systems Act (compliance with the Disciplinary Regulations compliance with performance regulations training sessions held on the implementation of the Municipal Staff Regulations.

 

18.        Programme 4: National Disaster ManagementCenter

 

New indicators	Rational
Disaster grant funding expenditure and performance monitored and reported.	To ensure closer monitoring of the allocated Provincial Relief, Municipal Relief and Municipal Disaster Recovery Grants.
Number of District Disaster Management Centres with COVID-19 responsive risk reduction strategies.	To have a joint up effort to reduce of risks related to COVID-19 in line with the DM regulations and as part of the Sendia Framework.
Continued and revised indicators	Rational
Ten municipalities in priority disaster areas supported to prevent, prepare and mitigate disaster risks.	The indicator is still relevant with emphasis is on COVID-19.
Disaster funding arrangements reviewed and implemented.	To ensure that disaster grants are more responsive and easily accessible for disaster relief.
Number of priority national sector departments assessed and supported to implement disaster management function.	To ensure that this intergovernmental function finds expression in the sector plans.

 

 

19.        Programme 5: Local Government Support and Intervention Management 

 

New indicators	Rational
Percentage of MIG spend on sanitisation and urgent repairs and maintenance of water and sanitation infrastructure, as part of COVID-19 interventions.	To monitor expenditure against MIG allocations for COVID-response.
Continued and revised indicators	Rational
Percentage of MIG receiving municipalities spending 90% of MIG allocation.	Still relevant to ensure monitoring of allocation and continuation of Infrastructure provisions during lockdown and Post COVID-19 pandemic.
Number of reports on the implementation of improvement plans for section 100 interventions developed. Number of reports on the implementation of improvement plans for 139 interventions.	To continue to monitor implementation of improvement plans and appraise the Minister.
Operational plan indicators	Rational
Number of reports on the implementation of section 154 support plans for   distressed municipalities.	The COGTA family is tasked to support municipalities in all areas that are included in the Programme plans and District Development Model.

 

 

20.        Programme 6: Community Work Programme

 

New indicators	Rational
Redesigned CWP Model approved by the Minister and adopted by Cabinet. 250 000 people participating in the programme. 5 partnerships established. Two agrarian projects established per district through CWP.	The indicators are still relevant and continue as planned with changes on the training component elaborated in the Operational Plan indicators.

 

 

21.        The 2020 Special Adjustment Budget

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

22.        Observations of the Select Committee

22.1      The Select Committee has observed and noted that subsequent to a National State of Disaster, pronounced by Minister Nkosazana Dlamini Zuma, as a result of the outbreak of COVID-19 in the country in terms of section 27 of the Disaster Management Act, 2002 (Act No. 57 of 2002), various Ministers issued directions and regulations that compelled the local government sphere to ensure prevention and combat the spread of COVID-19 pandemic.

22.2      The Select Committee noted and welcomed the report from the Department of Cooperative Governance and Traditional Affairs which indicated that all municipalities have submitted business plans to access the Disaster Relief Grants.

22.3      The Disaster Relief Grants were meant to address temporary sanitation, decontamination or sanitisation of specific selected areas, provision of Personal Protective Equipment and Hygiene Pack including waste management, i.e. refuse removal.

22.4      The Select Committee has noted that the 2020/21 special adjustment budget of the Department of Cooperative Governance and Traditional Affairs included, amounts suspended and added to Vote 3: Cooperative Governance.  The voted amount increased with a nett amount of R10.954 billion.

22.5      The Select Committee and the Portfolio Committeeemphasised the importance of monitoring and evaluating the impact of the Community Work Programme; municipal expenditure against allocation budget; implementation of municipal plans on gender based violence andthe impact of section 139 interventions in municipalities.

23.        Recommendations of the Select Committee

23.1      The Department of Cooperative Governance and Traditional Affairs should table progress reports on the re-modelling of Community Work Programme and action plan to ensure value for money.

23.2      The Department of Cooperative Governance and Traditional Affairs to table the progress report on COVID-19 Response Plan.

23.3      The Department of Cooperative Governance and Traditional Affairs should fast-track the process of tabling to Parliament the Monitoring, Support andIntervention Bill.

23.4      The Department of Cooperative Governance and Traditional Affairs to consider collaborating with the Department of Monitoring and Evaluation in order to ensure proper monitoring and reporting of municipal expenditure against allocated budget.

23.5.     The Department of Cooperative Governance and Traditional Affairs should ensure as part of monitoring that consequence management is implemented and reported in the forensic investigations conducted in the municipality in terms of section 106 of the Local Government: Municipal System Act  

23.6.     The Department of Cooperative Governance and Traditional Affairs together with the Auditor-General should ensure the implementation of Public Audit Act on wasteful and irregular expenditures in the municipalities.

23.7.     The Department of Cooperative Governance and Traditional Affairs should develop a programme to ensure provision of resources and capacity building to Municipal Public Accounts Committee in order to enable members to perform their oversight functions

23.8.  The Department of Cooperative Governance and Traditional Affairs should table quarterly progress reports on the implementation of its 2020/2021 Annual Performance Plan         

Report to be considered.