ATC100406: Report on Oversight Visit to Umhlabuyalingana 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) on the 06th December 2009, to consider and report on the intervention notice invoked in terms of section 139 (1)(b) of the Constitution at Umhlabuyalingana Local Municipality, reports 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 the 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 in the affairs ofUmhlabuyalingana Local Municipality to the Select Committee on Co-operative Governance and Traditional Affairs for consideration and reporting. On the 19th February 2010, the Select Committee took a decision during its meeting to conduct an oversight visit to the above-mentioned Municipality on the 17th March 2010.


2.         Purpose and Objectives

2.1        The objectives of the oversight visit was to determine whether procedural requirements have been met and 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 was intending to restore the fulfilment of the relevant obligations and ensure fulfilment in the long-term. The aim being to ensure that intergovernmental checks and balances aimed at guarding the integrity and efficiency of the intervention process.


3.         Delegation

3.1        The Delegation of the Committee was composed of the following Members of Parliament and Officials: Hon MH Mokgobi, Limpopo (ANC); Hon AG Matila, Gauteng (ANC); Hon DV Bloem, Free State (COPE);    Mr TM Manele, Committee Secretary (Committee Section); Mr N Mfuku, Content Adviser (Committee Section); Mr V Mfuniselwa, Administration Assistant (Committee Section).  

4.         Introduction


4.1        On the 24th December 2009 the KwaZulu-Natal MEC for Co-operative Governance and Traditional Affairs tabled a notice of intervention on Umhlabuyalingana Local Municipality to the Office of the Chairperson of the NCOP. Subsequent to the tabling, a notice of intervention was referred to the Select Committee on Co-operative Governance and Traditional Affairs for consideration and reporting in terms of Council Rule 101. In compliance with the Council referral, the Select Committee resolved to undertake a fact-finding visit to the Municipality on the 17th March 2010. In terms of section 139 (2)(b)(ii) of the Constitution, the intervention must end if the NCOP does not positively approve the intervention within 180 days, in this case before the end of the 24th May 2010, since the intervention has began.    


5.         Problems Identified by the Provincial Executive Council (PEC)

5.1        The main issues identified by the Provincial Executive to intervene in the affairs of Umhlabuyalingana Local Municipality related to the breach of legislation, lack of accountability, none availability of section 57 managers, allegations of maladministration, fraud and corruption, irregular, fruitless and wasteful expenditure, unauthorized expenditure, cash flow problems and late payments of salaries and creditors.


6.         Appointment and Functions of the Administrator

6.1        The Administrator was appointed on the 24th November 2009 to undertake the functions as contained in terms of Section 51 of the Municipal System Act, including the development of a turn–around strategy, rectification of all the decisions made by the Municipal Council prior to implementation, rectification of all decisions taken by the Municipal Manager and section 57 managers in terms of delegated or original authority, ensuring the  implementation of Council resolutions, implement a system to control and approve all expenditure, implementation of governance procedures and systems, implementation of financial systems, procedures and policies, implementation of the Municipal Property Rates Act, preparation of the adjustment budget for the 2009/10 financial year,  and reviewing the organisational structure of the Municipality.                   


7.         Oversight Visit to Umhlabuyalingana Local Municipality


7.1        On the 17th March 2010 the Delegation of the Committee had interactive and robust engagements with the internal and external stakeholders of the Umhlabuyalingana Local Municipality. The main internal stakeholders the Delegation interacted with in the Municipality included the Speaker, Mayor, Chief Whip, Ward Committee Members, Councillors and the Administrator. The main external stakeholders the Delegation interacted with included members of the community and business forums and non-governmental organizations.




7.2        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 the 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


7.3        Administrator: The Administrator indicated that  on the 14th April 2009  the MEC of the then  Local Government and Traditional Affairs gave notice to Umhlabuyalingana Municipal Council of his intervention in terms of section 136 and137 of the Municipal Finance Management Act (MFMA) and section 139 of the Constitution, which raised matters related to the municipal inability to meet all its current creditors commitment and payments, irregular expenditure, utilization of conditional capital grant funding is utilized for operating expenditure,  and gross mismanagement of cash resources.


7.4        Members of the Community Forums: The major concerns raised by the Members of the Community Forums in respect to transformation and organisational development related to the failure of the Mayor to implement Council resolutions, more especially with regard to the suspension of the Chief Financial Officer and the Municipal Manager, as well as instituting of a forensic investigation on misappropriation of municipal funds.         


(B).       Basic Service Delivery


7.5        Administrator:  The Administrator indicated that some of the challenges faced by the Municipality were the wrong use of the Municipal Infrastructure Grant (MIG) funds on Council activities, at the expense of service delivery. However, the major progress reported thus far by the Administrator was the co-operative initiatives of the Municipality to involve non-governmental organisations and community members in the municipal planning and development processes.         


(C).       Local Economic Development (LED)


7.6        Ward Committees: In terms of this key performance area, the concerns registered by Ward Committees with regard to LED related to lack of land use management system, lack of spatial development and proper Integrated Development Planning (IDP).         


(D).       Municipal Financial Viability and Management


7.7               Administrator: The major challenges reported by the Administrator in respect of financial management related to lack of financial recovery plan and spending of funds on operational matters rather than on service delivery matters. Some of the major municipal financial viability and management progress reported by the Administrator included successful stabilization of municipal finances with a cash-flow, the development of a stringent cash-flow management plan and the development of financial-recovery plan through the co-operation of the Municipal Councilors.


7.8               Ward Committees: The major progress reported by the Ward Committee Members as the result of the appointment of the Administrator and the placement of the municipality under section  139 (1)(b) of the Constitution related to the development of Municipal Turn-Around Strategy to manage municipal finances efficiently.      


(E).       Good Governance and Public Participation     


7.9        Administrator:  The Administrator indicated that the Municipality had involved members of the public to be part of the consultation process related to service delivery and municipal planning. He further acknowledged the support received from the Municipal Council.    


7.10      Ward Committees:  Members of the Ward Committees in respect of good governance and public participation, acknowledged the initiatives developed by Administrator in consulting with the Councillors, non-governmental organisations and Members of the Ward Committees in developing the municipal turn around strategy, financial recovery plan and the medium-term budget review.   


8.         Committee Observations


8.1        The Delegation of the Committee has observed that the since the placing of the Municipality under section 139 (1)(b) of the Constitution and the appointment of the Administrator, the Municipality has made progress in respect of developing a turn-around strategy, development  of medium-term budget review and municipal financial recovery plan.     


8.2        Furthermore, it was observed that in all the intervention visits undertaken by the Committee so far, Umhlabuyalingana LocalMunicipality reflected a significant level of political unity and co-operative governance in addressing the municipal challenges.


9.         Acknowledgement


9.1        The Committee Delegation acknowledged the varied contributions of the parliamentary staff who participated in the oversight visit in their various capacities.  A word of appreciation is also extended to all the internal and external stakeholders of the municipality who interacted and had robust engagements with the Delegation of the Committee on matters related to the placement of the Municipality under section 139 (1) (b) of the Constitution.      




10.        Recommendations


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


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


10.1.2   The Administrator should fast-tract the process of appointing Section 57 Managers and assist the Municipality in developing a labour-retention strategy, in order to ensure that future service delivery projects have the support of the community and are aligned with the IDP.


10.1.3   The KwaZulu-Natal MEC for Co-operative Governance and Traditional Affairs should table quarterly progress reports to the NCOP and the Provincial Legislature on the status of intervention in the Municipality, including challenges encountered.


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


10.1.5   The South African Local Government Association should also facilitate Executive Training Programme for the municipal officials.


10.1.6   The approved report by the NCOP should be shared with all the internal and external stakeholders of Umhlabuyalingana LocalMunicipality whom the Committee Delegation interacted with during the oversight visit.


10.1.7      The Select Committee on Co-operative Governance and Traditional Affairs, in co-operation with the relevant Portfolio Committee in KwaZulu-Natal Provincial Legislature would conduct a follow-up visit to the Municipality, three months after the intervention has ended in order to monitor through interaction with internal and external stakeholders, progress made in respect of the intervention in the Municipality.    


Report to be considered.


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