ATC100506: Report on Oversight Visit to Indaka 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 Indaka  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        Section 139 (2) of the Constitution requires that the provincial executive to notify the NCOP within 14 days when it intervenes in a municipality, and the NCOP may disapprove/approve the intervention within 180 days after the intervention  has begin.


1.4        In terms of NCOP rule 101, the Office of the Chairperson of the NCOP referred the notice of intervention in the affairs of Indaka LocalMunicipality to the Select Committee on Co-operative Governance and Traditional Affairs for consideration and reporting. On the 19thFebruary 2010, the Select Committee took a decision during its meeting to conduct an oversight visit to the above-mentioned Municipality on the 18th 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 November 2009 the KwaZulu-Natal MEC for Co-operative Governance and Traditional Affairs tabled a notice of intervention on Indaka 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.


4.2        In compliance with the Council referral, the Select Committee resolved to undertake a fact-finding visit to the Municipality on the 18thMarch 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 began.    


5.         The Reason for Intervention in Indaka Local Municipality  

5.1        The main issues identified by the Provincial Executive to intervene in the affairs of Indaka Local Municipality related to the lack of capacity in the Municipal Council to exercise an oversight role and implement municipal reforms, non-submission of the 2008/09 annual financial statements, non-compliance with section 121 of the Municipal Finance Management Act (MFMA), serious deficiencies in management systems and other accounting and financial controls.


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 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, implementation of 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 Indaka Local Municipality


7.1        On the 18th March 2010 the Delegation of the Committee had interactive and robust engagements with the internal and external stakeholders of the Indaka 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 municipal transformation and organisational development issues reported by the Administrator included thefinalization of a disciplinary action against the suspended Municipal Manager and the stabilization of the municipal administration. Furthermore, the Manager in the Mayor’s Office salary was cut-off because of his long absence from work, and his disciplinary hearing was schedule for the 19th March 2010.


7.4               Organised Labour:  the major transformation and organisational development progress reported by the representatives of IMATU and SAMMU related to the open door policy approach adopted by the Administrator in dealing with matters related to the labour forum, and problems pertaining to job evaluation system. Furthermore, a concern was raised with regard to the wage-gap between different occupational levels which requires urgent attention.


(B).       Basic Service Delivery


7.5        Administrator:  The major basic service delivery priorities reported by the Administrator as the result of the developed turn-around strategy included the review and evaluation of allocated powers and functions, identification of core powers and functions to ensure provision of basis services and identification of functions that could be provided collectively with other municipalities within the district.


7.6        Ward Committees:  The major basic service delivery concerns raised by the Ward Committee Members related to lack of development, lack of drinking water and poor road infrastructure. In addition, the Ward Committee Members raised a concern pertaining to the provision of electricity, since there was still no electricity reticulated in areas like Stanford and Dikishoba.


7.7               Traditional Leaders:  The major concerns raised by the local traditional leaders in respect of basic service delivery related to the lack of decent roads and lack of access to drinking water.


(C).       Local Economic Development (LED)


7.8        Ward Committees: The LED concerns raised by the members of the Ward Committees related to the lack of economic development and job creation opportunities, lack of agricultural projects and the lack of industrial development in the municipal jurisdiction.


(D).       Municipal Financial Viability and Management


7.9        Administrator:   Some of the major priorities in terms of the municipal turn-around strategy reported by the Administrator included the updating of financial systems, finalization and adoption of adjustments budget, development of a list of outstanding creditors and payment plan, recovery of the withheld local government equitable share, resolution of audit findings, drafting of a credible 2010/11 Integrated Development Plan (IDP) and  budget as the reconstitution of all matters related to supply chain management.


7.10      The Administrator further reported that the deficit for the 2007/08 stood a R8, 5 million, in 2008/09 it was reduced to R5 million and in 2009/10 it was expected to be reduced to R1 million. He further indicated that the Municipal Council has made bad decisions in the past that has led to the current predicament facing the Municipality.


(E).       Good Governance and Public Participation     


7.11      Administrator: Some of major good governance and public participation priorities reported by the Administrator in terms of the developed turn-around strategic plan related to raising an awareness on local government legislative environment, ensuring compliance in order to ensure a well functioning and developmental Municipality, consideration and adoption of Standing Rules and Orders, reconstituting the Ward Committees and ensuring municipal accountability and oversight.       


7.12      Ward Committees: Members of the Ward Committees raised concerns ranging from non-functioning of Ward Committees, lack of human and financial resources for the Ward Committees, inadequate capacity building programmes for Members of the Ward Committees and lack of consultation and communication with local farmers.




8.         Committee Observations and Opinion


8.1        The Delegation of the Committee has observed that since the placing of the Municipality under section 139 (1)(b) of the Constitution and the appointment of the Administrator, the Municipality has made significant progress in respect of the development of turn-around strategy, drafting of 2010/11 IDP and reconstitution of all matters related to supply chain management.  


8.2        The Delegation is of the opinion that the current Acting Municipal Manager should work closely with Administrator for skills transfer. This will facilitate capacity building and administration stability when the intervention expires.


8.3        In addition, the Delegation is also of the opinion that the district and the local municipality should speedily work together in addressing water-shortages, as well as powers and functions.


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 Indaka 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 Indaka Local Municipalitywhom 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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