ATC091117: Report on Oversight Visit to Mkhondo Local Municipality

NCOP Economic and Business Development



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 Mkhondo Local Municipality in terms of section 139 (1)(b) of the Constitution, the Committee report as follows:


1.2        In terms of section 139(1)(b), when a municipality cannot or does not fulfil an executive obligation in terms of the Constitution or legislation, the relevant provincial executive may intervene by taking any appropriate steps to ensure the fulfilment of that obligation, including assuming responsibility for the relevant obligation in that municipality. 


1.3        In terms of NCOP rule 101, the Office of the Chairperson of the NCOP referred the notice of intervention by the Mpumalanga MEC for Co-operative Governance and Traditional Affairs in the affairs of Mkhondo Local Municipality, to the Committee for consideration and reporting. On 3 November 2009, the Committee then took a decision during the proceedings of its meeting to conduct an oversight intervention visit to the Municipality during 12 November 2009.


2.         Objective of the Oversight Visit

2.1        The main objectives of the oversight visit were to determine whether procedural requirements have been met and also to verify whether the provincial executive has used its discretion appropriately before the Committee can approve/disapprove the intervention. Through the deliberations and interaction with internal and external stakeholders, the Committee wanted to determine how the provincial executive intends to restore the fulfilment of the relevant obligations and ensure fulfilment in the long-term. The aim being to ensure intergovernmental checks and balances aimed at guarding the integrity and efficiency of the intervention process.


3.         Composition of the Delegation

3.1        The Committee Delegation composed of the following Members of Parliament and officials: Hon MH Mokgobi, Limpopo (ANC); Hon AGMatila, Gauteng (ANC); Hon JM Bekker, Western Cape (DA); Mr TM Manele, Committee Secretary (Committee Section); Mr N Mfuku, Content Adviser (Committee Section); Mr L Ngqameni, Intern (Committee Section) and Mr D Mokoena, Committee Researcher (Research Unit).



4.         Introduction


4.1        On 01 July 2009 the Provincial Executive Council (PEC) in Mpumalanga resolved to invoked section 139 (1)(b) of the Constitution inMkhondo  Local Municipality. Subsequently the Office of the Chairperson of the NCOP was informed of the PEC’s decision to intervene in the affairs of the Municipality, by the MEC for Co-operative Governance and Traditional Affairs in Mpumalanga.


5.         Problems Identified at the Municipality by the PEC

5.1        The key problems which led the PEC to invoke the provisions of section 139(1)(b) of the Constitution and assuming the executive responsibilities at Mkhondo Local Municipality relates to systemic problems, whereby, the Municipality as a whole has failed to effectively deliver on its constitutional mandate. There was no alignment and integration of the IDP (Integrated Development Plan) and SDBIP (Service Delivery and Budget Implementation Plan) within the municipal system.  The IDP and its related SDBIP appeared to exist outside of the normal functioning of the system and were not adhered for compliance, and not used as a management tool. The performance management measures were largely activity centred, and not linked to the actual delivery of services.

5.2        Furthermore, monitoring and evaluation was not integrated throughout the Municipality. The service delivery system problems often resulted in duplication and wasted effort, contributing to the difficulties in coordination and management of large scale interdepartmental programmes and projects.  This exacerbated the silo approach to delivery and the limited flexibility, innovation and optimisation of resources, especially in the areas of effective human resources deployment and overheads minimisation. This in turn resulted in serious challenges around issues such as poor service delivery, loss of governance control, poor management, anomalies in supply chain management, corruption and internal squabble that undermined effective service delivery.


5.3        The MEC of Co-operative Governance and Traditional Affairs appointed Mr Misabeni Khosa as an Administrator at Mkhondo Local Municipality, to assume responsibility of the day-to-day operations  and the maintenance of essential service delivery standards. In addition, to plan and roll-out a structured turn-around strategy that will create sustainable improvement of the ongoing management of the Municipality. It was envisaged that the above process will take a minimum period of six months full-time involvement of the Administrator and his team, before they commence withdrawal.  The work of the Administrator commenced on 1 August 2009 and is anticipated to end on January 2010. 



6.         Oversight Visit at Mkhondo Local Municipality 


6.1        On the 12 November 2009, the Delegation of the Committee had interactive and robust engagements with the internal and external stakeholder of the Mkhondo Local Municipality. The main internal stakeholders the Delegation interacted with in the Municipality included the Speaker, Mayor, Chief Whip, Ward Committee Members and Councillors and the Administrator. The main external stakeholders the delegation interacted included members of the community forums and non-governmental organization.


6.2        For the purpose of this report, the submissions made by both internal and external stakeholders are structured based on the five key performance areas of local government which are: Municipal Transformation; Basic Service Delivery; Local Economic Development; Municipal Financial Viability and Management as well as Good Governance and Public Participation.       


(A).       Municipal Transformation and Organisational Development


6.3        Municipal Council: The submissions made by the Speaker and Mayor indicated and reflected that the Municipality welcomed and acknowledged the intervention in its affairs by the PEC of the Mpumalanga Province. Some of the transformation and organisational developmental challenges highlighted lack of human resource capacity; challenges on the recruitment of skilled personnel to enhance service delivery; high vacancy rate in key positions and lack of labour retention strategy. Some of the internal developments since the deployment of staff from Provincial Department of Co-operative Governance and Traditional Affairs highlighted, included the auditing of all existing municipal policies and evaluation of their relevance. This process entailed the development of new rules of order, registry of delegation and legal compliance. The Municipal Council reported to the Committee that the intervention process has synergisedcommunication linkages between the community and the Municipal Council.


6.4        Administrator: Some of the organisational development challenges indicated in the report pertained to the lack of human resource capacity; fragmented and inadequate fleet management policy; resignation of the Chief Financial Officer (CFO) and Town Planner; filling of critical positions of section 57 Managers and lack of approved human resource development policies. A total number of 14 officials have been suspended and were currently undergoing disciplinary hearings.


6.5               Despite all the challenges indicated, the Administrator reported to the Committee that progress has been made in respect of developing 28 organizational policies which are aimed at strengthening and improving the technical ability of the organization. The organizational structure has been redesigned to fulfill public participation mandate and legislative roles of Councilors, furthermore, those disciplinary hearings on suspended officials will be finalized in December 2009. Since the clinic was burned down in the township, two mobile clinics have been put in place to ensure health services are rendered to the community.


(B).       Basic Service delivery


6.6        Municipal Council: The key service delivery challenges highlighted in the Mayoral Committee report related to huge infrastructure backlogs (ageing infrastructure, repairs, maintenance and rehabilitation); withdrawal of  the Development Bank of South Africa (DBSA) technical support (Engineers and Young Professionals); lack of proper and effective service delivery including service delivery projects such as the main water pipeline on the Wakkerstroom road; housing development in Eziphunzini; bus and taxi route in Thandukukhanyaand streets rehabilitation not completed on time. Despite these challenges, the Mayoral Committee reported that the intervention on July 2009 has taught the Municipal Council the importance of consolidating the powers and responsibilities of the Mayor and Municipal Manager in order to ensure implementation of decisions and political oversight on service delivery matters. 


6.7        Administrator: Some of the service delivery challenges highlighted in the report of the administrator related to lack of planning on service delivery projects across all the 15 wards of the municipality, lack of efficient and effective monitoring and evaluation systems and mechanisms, lack of funding for critical infrastructure projects, projects were implemented and did not form part of the IDP and community participation processes.


6.8        The Administrator reported to the Committee that progress has been registered in some areas in speeding up service delivery. A number of emergency water supply projects have been initiated in partnership with a company called Mondi including the erection ofJoJo tanks; supply of Lister Pumps and purifying systems; repair of boreholes; connection of pipelines and taps; supply of bulk drinking water reaching communities of Witkop Mission Village; Iswepe Villages of Jabulani; Spring Valley; The Bends and New Compound. Mondi has kindly committed R750, 000 to this initiative.  

6.9        The Municipality is partnering with the National Minister of Rural Development and Land Reform to launch a pilot project in Donkerhoekand neighbouring farms, KwaNgema and Madlangempsi.  This will supplement the Municipalities own sustainable rural development programme. In addition, the Municipality in conjunction with various government departments has embarked on the above programme and is in the process of establishing a Local Poverty War Room.  A door-to-door programme has been actioned for profiling household’s needs in order to ensure that the poorest household members are captured on a database, in order to provide shared intervention for co-ordinated assistance across departments (Ward 2, 6 and 8 are the priority wards in the initial phase).


6.10      In addition, a  project on electricity has been commissioned in line with the supply chain management policy; fencing of schools in accordance to rural development programme; assistance in the implementation of rural development programme has been provide; engagement with the Department of Energy on universal access in order to ensure implementation and community benefits of electricity project has been secured; financial estimation of possible service delivery projects has been designed and engagement with the Department of Co-operative Governance on the Municipal Infrastructure Grants (MIG) are underway on matters related to service delivery.   


6.11      Ward Committees: Although there was much dissatisfaction on the snail pace of service delivery in the municipal jurisdiction, however, there was acknowledgment on the continuation of the electricity project especially in Ward 15.


(C).       Local Economic Development


6.12      Members of Community Forums: The concerns raised by the stakeholders pertained to lack of business opportunities; lack of job opportunities; lack of access to land; lack of equity in the awarding of municipal tenders; and lack of economic financial support to small businesses and non-functionality of the Local Economic Development Unit in the Municipality. 


6.13      Administrator: The Administrator reported that the Municipality has now partnered with Mondi in the training of at least 600 youth, unemployed and women across all communities in the municipal area in woodwork, carpentry, welding and painting. The Mkhondo LocalMunicipality is providing assistance on the Premier’s 2010 programme aimed at benefitting 300 children and an additional 200 volunteers to mark the 300 day countdown to the launch of the 2010 FIFA World Cup. The Mkhondo Municipality is also partnering with the Provincial Departments of Roads and Public Works to devise projects in the “Decent Work Programme”, which will facilitate the prioritisation of “decent work” for residents of Mkhondo. In addition, the potential establishment of a Development Agency is being reviewed in order to provide an appropriate vehicle to manage the commercial activities of the Municipality, especially the 3,000 hectares of forestry land.


(D).       Municipal Financial Viability and Management


6.14      Municipal Council: The report presented by the Mayoral Committee indicated that in terms of rural development, the municipality is faced with the challenges of supplying new areas and households with municipal services, and reliance on equitable share and conditional grants. Despite these challenges, the Mayoral Committee expressed appreciation of the assistance provided by the district, some Provincial and National Government Departments on provision of boreholes, toilets, access roads, schools and clinics in the community.   

6.15      Administrator: A number of activities are taking place on a continuous basis to “clean up” on anomalies in the short term.  Some of the key activities include the use of municipal credit cards has been stopped to avoid the continuance of abuse. A number of anomalies have been identified such as the contract of R14, 7 million rand for a roads project where only a letter of appointment can be found and no formal contract. The entire municipal supply chain management is under review and anomalies addressed appropriately.  Some of the anomalies are under formal investigation by the investigators.


6.16      The Administrator further reported that the 2008/2009 financial year budget has not yet been closed due to a number of anomalies discovered, including the fact that bank reconciliations have not been properly completed since 2006, clearing of audit queries and stock adjustment queries.  This issue was receiving priority attention. The Administrator will shortly be engaging a debt collection agency to collect and reduce the current outstanding debt of R69 million.  The costs of this are self funding since the agencies fees are funded from a percentage of the debt that they will recover. Lastly, the Administrator has signed a letter of engagement with the Auditor-General to address audit queries of the Municipality.


(E).       Good Governance and Public Participation     


6.17      Municipal Council: Despite lack of regular communication feed back to the community and stakeholders, the report of the Mayoral Committee acknowledged that the intervention has revealed the importance of communication with the public.


6.18      Administrator: Some of the major progress reported by the Administrator in respect of good governance and public participation included clarification of the roles to the internal and external stakeholders; clarification of the roles and responsibilities of the Mayoral Committee and the office bearers; scheduling of the Council meetings; improving communication system and co-ordinating the meeting of Ward Committees and ensuring the consideration and approval of the IDP process plan by the Council. Furthermore, the Administrator has had several meetings with the members of the Community Concerned Group to update them on a weekly basis on the affairs of the Municipality.


7.         Committee Observations and Opinion


7.1               The Committee Delegation expressed the opinion that there is a need to pay greater attention on service delivery issues, and the Municipality must be responsive and address the problems raised by the community with the necessary speed. The Municipality should treat every service delivery problem with the necessary seriousness it deserves. That all stakeholders in the municipal jurisdiction must assist the transformation process, within the framework of co-operative government.


7.2               The Committee Delegation emphasized that one of the objects of local government in terms of section 152 (1)(e) of the Constitution was the need to encourage the involvement of communities and community organizations in local government. The Committee further expressed that the need for participation in the Municipality should take place through the structures (ward committee) established in terms of the Municipal Structures Act (Act No. 117 of 1998). It must also take place through mechanisms, processes and procedures that exist in terms of the Systems Act (Act No. 32 of 2000) that have been established by the Municipal Council (section 17).


8.                   Acknowledgement


8.1               The Committee Delegation acknowledged the varied contributions of the parliamentary staff who participated in the oversight visit in their various capacities. 


9.         Recommendations


9.1        Having conducted the oversight visit to Mkhondo Local Municipality and interacted with internal and external stakeholders, the Select Committee on Co-operative Governance and Traditional Affairs recommends as follows:   


9.1.1     National Council of Provinces approves the intervention as issued by the Provincial Executive Council of Mpumalanga Province in terms of section 139 (1)(b) of the Constitution.


9.1.2     That National Council of Provinces further approves recommendations to the Provincial Executive Council of Mpumalanga Province to extend the intervention period by six months, in order to ensure that during the extended intervention period, minimum standards of service delivery will be achieved in the Municipality.


9.1.3     The Administrator should fast-tract the process of appointing and filling of section 57 Managers and further assist the Municipality to ensure that the SDBIP and the IDP are aligned with the Municipality budget, and has the support and confidence of the whole community.


9.1.4     The MEC for Co-operative Governance and Traditional Affairs in Mpumalanga to table quarterly progress report to the National Council of Provinces on the status of the intervention in the Municipality; including challenges encountered.


9.1.5     The South African Local Government Association (SALGA) in co-operation with Local Government Sector Education and Training Authority to facilitate training and capacity building for Municipal Councillors; to further deepen their understanding of their oversight role; legal framework and policies that govern the activities of the Municipality.


9.1.6     The Select Committee on Co-operative Governance and Traditional Affairs in co-operation with the relevant Portfolio Committee in Mpumalanga Provincial Legislature, to conduct a follow-up oversight visit to the Municipality in order to monitor and evaluate progress made in respect of the intervention in the Municipality.


Report to be considered.




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