ATC101123: Report on 2007/08 Performance Report of Northern Cape Municipalities

NCOP Economic and Business Development



1.         Background and Overview


1.1        The Select Committee on Co-operative Governance and Traditional Affairs, having considered the directive of the National Council of Provinces (NCOP) to consider and report on the 2007/08 Performance Report of Northern Cape Municipalities’ tabled by the MEC for Co-operative Governance, Human Settlements and Traditional Affairs in terms of the requirements of the Local Government Municipal Systems Act (Act 32 of 2000), reports as follows:


1.2        Municipalities are required by legislation to produce annual performance reports in terms of section 46 of the Local Government: Municipal Systems Act. Based on these reports, the MEC responsible for local government has to compile a consolidated report on the performance of municipalities in the province and submit a report to the NCOP in terms of section 47 of the Act. In this case, the report provides an analysis of the municipal performance in the Northern Cape Province and also makes recommendations for corrective measures to be undertaken in that regard.


1.3        In terms of NCOP Rule 101, the Office of the Chairperson of the NCOP referred the 2007/08 Report of Northern Cape Municipalities’ Performance to the Select Committee on Co-operative Governance and Traditional Affairs for consideration and report.


2.         Introduction


2.1        On 11 January 2010, the Northern Cape MEC for Co-operative Governance, Human Settlements and Traditional Affairs, Hon K Mmoiemang tabled the 2007/08 Performance Report of Municipalities in the Northern Cape to the Office of the Chairperson of the NCOP, in terms of section 47 of the Local Government Municipal Systems Act. Subsequent to the tabling, the Committee held a briefing meeting on 19 October 2010 with the Northern Cape Department of Co-operative Governance, Human Settlements and Traditional Affairs.

3.         Presentation on the 2007/08 Northern Cape Municipality Performance Report


3.1        The MEC for Co-operative Governance, Human Settlements and Traditional Affairs, presented the Northern Cape 2007/08 Municipalities’ Performance Report to the Committee. In his political overview, the MEC indicated that only 18 of 32 Northern Cape municipalities had submitted Section 46 reports to the Department by end June 2009. In the previous year 18 annual reports were also received.


3.2        The MEC reported that Northern Cape municipalities perform, on average, 21 functions with some capacity, which is measured on budget information, staffing, equipment and the use of external service providers. On average 16% of positions at municipalities were vacant. Key positions, such as municipal manager, financial manager and technical service manager are filled in some cases by a person who does not have a relevant qualification for the position. Not all key positions are filled by MSA Section 57 appointments e.g. six municipal mangers were acting, eleven financial managers and two technical managers.


3.3        All municipalities provide free basic water, except for Pixley ka Seme District Municipality, which does not have any households living in settlements within its area of jurisdiction. By June 2008, 72% of the R222 million MIG allocation for 2007/08 to Northern Cape municipalities had been spent. Eighteen municipalities had not spent their full allocation by 30 June 2008. In addition, 31 municipalities’ 2007/08 financial statements have been audited by the Auditor General. One municipality’s audit report is still outstanding, namely, Phokwane, which submitted late. Audit outcomes have improved from 2006/07 to 2007/08 financial years.


3.4        The presentation focused on the 5-Year Local Government Strategic Agenda, which remains the guiding strategic approach in improving service delivery of all municipalities. These areas are: improving municipal transformation and organisational development, accelerating basic service delivery, putting in place viable local economic development strategies, improving the fiscal management and discipline, and ensuring overall good governance and public participation in the work of the municipality.    


4.          Municipal Transformation and Organisational Development


4.1        The Department reported that, at the end of July 2008, all municipalities had municipal managers although nine were acting-managers. All municipal managers are MSA Section 57 appointments, except for those who are acting. This is an improvement from March 2008, when 14 vacant municipal manager posts were recorded, with all 14 being filled by acting managers. All financial managers in July 2008 were MSA Section 57 appointments, except for acting managers at Magareng, Phokwane, Gamagara, Ga- Segonyana, Hantam, Karoo Hoogland, Emthanjeni, Siyancuma, Ubuntu, Siyanda and Tsantsabane. There is one vacancy and three other appointments.


4.2        SALGA Northern Cape is part of the independent provincial support task team to support all 32 municipalities with the appointment of municipal managers and section 57 managers. For the period under review, a total of 10 and 6 municipalities have benefited from this support for the appointment of municipal managers and chief finance officers respectively.



5.         Basic Service Delivery


5.1        Since 2003/04 all the Northern Cape municipalities have been delivering free basic services to indigent households. In addition, some municipalities have also been providing free basic services to households that are not indigent e.g. Sol Plaatje provides free basic water to all households, as did Moshaweng, Ga-Segonyana, Siyancuma, Umsobomvu, Karoo Hoogland, Mier, Kai !Garib, Kgatelopele, Nama Khoi, Kamiesberg and Magareng at the end June 2008.


5.2        It is expected of municipalities to provide free basic services to its indigent in a sustainable manner. However, fourteen municipalities provide FBW to all households, not only registered indigents. It is not expected that a municipality provides free basic services beyond its financial and other capacities.


6.         Local Economic Development (LED)


6.1        The Department reported that 10 municipalities reported almost 3,500 jobs created by municipal LED activities in 2007/08. Of these jobs, 38% benefited women, 27% youth and 2% the disabled. Furthermore, approximately 3,000 jobs were created by municipal capital projects, which employed people above the minimum wage for at least three months in 2007/08. This is a substantial decrease from the 10,000 jobs reported in 2005/06. Half the jobs benefited women.



7.         Municipal Financial Viability and Management


7.1        Thirty–one Northern Cape municipalities had a combined income of over R2 billion in 2007/08. The largest income was received by Sol Plaatje of over R600 million and the smallest by Mier Municipality, with under R10 million. Eleven of the 20 municipalities that reported accumulated surpluses/deficits, had an accumulated surplus at the end of 2007/08, and nine had an accumulated deficit. Seventeen municipalities ended the 2007/08 financial year with a surplus. Fourteen municipalities ended with deficits, of which nine were over R1 million i.e. Karoo Hoogland, Siyancuma, Siyathemba, Dikgatlong, Magareng, Renosterberg, Ga-Segonyana, Kamiesberg and Siyanda. The highest deficit was at Magareng.


7.2        Hands-on support was provided to 10 municipalities i.e. Dikgatlong, Magareng, Pixley ka Seme, Emthanjeni, Renosterberg, Siyancuma, Siyathemba, Umsobomvu, Kamiesberg and Moshaweng. Support was given to municipalities for the development of Service Delivery and Budget Implementation Plans (SDBIPs) which have been linked to budgets and Integrated Development Plans (IDPs) by September 2007. Monitoring and further support is envisaged to be provided by the Department and Provincial Treasury.


8.         Good Governance and Public Participation     


8.1        By September 2007, 17 municipalities had established internal audit committees and by March 2008 another one municipality had done so. Thirteen municipalities share audit committees. Improvements in the capacity to account for public resources have been made. Internal Audit Committees have been established in 18 municipalities


8.2        All wards have ward committees established in the Northern Cape. The numbers of wards have increased from 174 to 183, with the establishment of nine wards at Mier Municipality.  These used to function as Town Forums, in order to align with legislation. However, not all these committees are functional. A total of 46 ward committees are reported to be non-functional. These committees will thus have to be revised and reformulated.


9.         Committee Observations and Opinion


9.1        The Committee has observed the remarkable improvements in certain areas, such as a decrease in backlogs, but, in other areas, no improvement has been made.  An example here is MIG spending. Interventions were implemented to address the challenges of 2006/07 and 2007/08. These interventions are mostly on-going and demonstrate improved service delivery, good governance and capacity at municipalities. The Department should continue providing this kind of support to its municipalities in the Province.


9.2        Although progress has been registered in other areas, municipal finances remain a challenge to municipalities, especially with regard to the ability to effect proper credit control systems and the ability to generate income.


10.        Recommendations


10.1      Having deliberated on the 2007/08 Northern Cape Municipalities’ Performance Report, the Select Committee on Co-operative Governance and Traditional Affairs recommends as follows:   


10.1.1   The NCOP should endorse the 2007/08 Northern Cape Municipalities’ Performance Report.


10.1.2   The Northern Cape Department of Co-operative Governance, Human Settlements and Traditional Affairs should assists municipalities in the Province to improve their employment profiles with respect to disabled people.


10.1.3   The Northern Cape Department of Co-operative Governance, Human Settlements and Traditional Affairs should assist municipalities in the Province to improve the situation with respect to critical skills shortages and the filling of vacant positions, as well as ensuring that performance agreements are signed.


10.1.4      The Northern Cape MEC for the Northern Cape Department of Co-operative Governance, Human Settlements and Traditional Affairs should table quarterly progress reports to the NCOP in respect of municipal performance in the Province.


Report to be considered.


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