ATC130514: Report of the Select Committee on Co-Operative Governance and Traditional Affairs on the Oversight visit to Mtubatuba Local Muncipality in terms of Section 139 (1)(B) of the Constitution – dated 14 May 2013

NCOP Economic and Business Development

REPORT OF THE SELECT COMMITTEE ON CO-OPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS ON THE OVERSIGHT VISIT TO MTUBATUBA LOCAL MUNCIPALITY IN TERMS OF SECTION 139 (1)(b) OF THE CONSTITUTION – DATED 14 MAY 2013

REPORT OF THE SELECT COMMITTEE ON CO-OPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS ON THE OVERSIGHT VISIT TO MTUBATUBA LOCAL MUNCIPALITY IN TERMS OF SECTION 139 (1 )( b) OF THE CONSTITUTION – DATED 14 MAY 2013
 

Having conducted the oversight visit to Mtubatuba Local Municipality , the Committee reports as follows:

 

1. Introduction

 

1.1 On the 8 October 2012, the MEC for Cooperative Governance and Traditional Affairs in KwaZulu-Natal tabled a notice of intervention in Mtubatuba Local Municipality in terms of section 139 (1)(b) of the Constitution to the Chairperson of the National Council of Provinces (NCOP).

 

1.2 On the 12 October 2012, the NCOP referred the notice of intervention in Mtubatuba Local Municipality to the Select Committee on Cooperative Governance and Traditional Affairs for consideration and reporting, in terms of Rule 101.

 

1.3 Following the referral, on the 06 March 2013 the Committee conducted an oversight visit to Mtubatuba Local Municipality . The main objectives of the oversight visit was to determine whether procedural requirements had been met and to verify whether the Provincial Executive Council (PEC) had used its discretion appropriately, before the Committee could recommend approval/disapproval of the intervention to the NCOP. Through the deliberations and interaction with internal and external stakeholders, the Committee wanted to determine how the PEC was intending to restore the fulfilment of the relevant obligations and ensure fulfilment in the long term. The aim was to ensure intergovernmental checks and balances aimed at guarding the integrity and efficiency of the intervention process.

 

2. General Overview of the Oversight Visit and Interaction with Stakeholders

 

2.1 On the 6 March 2013, the delegation of the Committee had consultative engagements with the Executive Mayor, Speaker, Administrator, Senior Official from the Department of Cooperative Governance and Traditional Affairs, as well as the representatives from the Organized Labour and Business Sector.

 

3. Resolution of the Provincial Executive Council

 

3.1 In June 2012 the Executive Council resolved to institute a discretionary intervention at Mtubatuba Local Municipality in terms of sections 136 – 138 of the Municipal Finance Management Act (Act No.56 of 2003), for a period of three months, as a result of unfavorable financial conditions which were observed by the MEC responsible for Cooperative Governance and Traditional Affairs and the MEC responsible for Finance in the Province.

 

3.2 The Financial Administrator that was appointed by the Provincial Department did achieved substantial progress in drafting and implementing a financial recovery plan which sought to address the causes of financial crisis. The discretionary intervention was in place for a period of three months, and there appeared to be an extremely low probability of the intervention support team succeeding in respect of the financial recovery plan. This was a result of a lack of political and administrative leadership, weak decision making and poor service delivery.

 

3.3 Despite the substantial progress having been achieved in the area of financial recovery and implementation of internal financial controls, the Municipal Council was failed to fulfill its executive obligations which were necessary for the effective functioning of the Municipality.

 

3.4 For these stated reasons, and based on the other substantial motivation, the PEC resolved on the 19 September 2012 to intervene in terms of section 139 (1 )( b) of the Constitution. The resolution included the appointment of a Ministerial Representative of the MEC for Cooperative Governance and Traditional Affairs, to assume certain executive functions of the Municipal Council.

 

4. Terms of Reference of the Ministerial Representative

 

4.1 In terms of the roles and functions of the appointed Municipal Representative, as directed by the PEC included:

 

4.1.1 Undertaking all fiscal and financial management functions at the Municipality, including signatory on the municipal primary bank account.

 

4.1.2 Ratifying all the decisions of the Municipal Council and its committees, before implementation.

 

4.1.3 Ratifying all the decisions taken by the Municipal Manager and section 57 managers, in terms of the delegated or original authority.

 

4.1.4 Devising a turnaround strategy for the Municipality and ensuring the implementation of the Municipal Council resolutions by the administration.

 

4.1.5 Implementing a system to control all governance systems and procedures including appropriate councilor oversight mechanisms.

 

4.1.6 Ensuring the implementation of financial systems, policies and procedures, and municipal property rates.

 

4.1.7 Addressing the Municipality’s financial problems, including a strategy for reducing unnecessary expenditure and increasing the collection revenue.

 

4.1.8 Reviewing the organizational structure of the Municipality.

 

4.1.9 Implementing the findings of any forensic investigation undertaken by the Municipality or the MEC in terms of section 106 of the Local Government: Municipal Systems Act (Act No.32 of 2000), including criminal, disciplinary and civil action.

 

5. Municipal Recovery Plan

 

5.1 The Ministerial Representative presented the municipal recovery plan. The plan focused on key performance areas, measurable outcomes and time frames related to basic service delivery, municipal financial viability, institutional development and transformation, good governance and public participation, as well as spatial planning.

 

6. Opinion of Organized Labour

 

6.1 The representative of the Independent Municipal and Allied Trade Union (IMATU) raised concerns about the financial management of the Municipality and the lack of consultation about the role of the Ministerial Representative in the Municipality.

7. Opinion of Business Sector

 

7.1 The representative of the business sector raised concerns about the lack of consultation on matters related to economic transformation, local economic development and lack of understanding on the role of the Ministerial Representative in the Municipality.

 

8. Committee Observations and Opinion

 

8.1 The Committee has observed that the placing of the Municipality under section 139 (1 )( b) of the Constitution, and the appointment of the Ministerial Representative has been a good corrective measure in assisting to deal with the service delivery and administrative challenges facing the Municipality.

 

8.2 The Committee has further observed the progress made by the Ministerial Representative with regard to the development of the municipal turn-around strategy, that paid particular focus on key performance areas on service delivery; municipal financial viability; institutional development and transformation; good governance and public participation, as well as spatial planning.

 

8.3 The Committee is of the opinion that political parties within the Municipality need to put aside their political differences, so as to ensure stability and good governance within the Municipality, and the implementation of the municipal turn-around strategy that was developed under the leadership of the Provincial Department of Cooperative Governance and Traditional Affairs.

 

9. Recommendations

 

9.1 Having conducted the oversight visit to the Municipality and interacted with the internal and external stakeholders, the Committee recommends as follows:

 

9.1.1 Noting the intervention has already lapsed on the 19 March 2013, t he Provincial Department of Cooperative Governance and Traditional Affairs in KwaZulu-Natal Province should conduct a capacity building programme focusing on the responsibilities, roles and functions of the councillors and officials within the Mtubatuba Local Municipality .

 

9.1.2 The Provincial Department of Cooperative Governance and Traditional Affairs in KwaZulu-Natal Province should submit quarterly progress reports to the Provincial Legislature and the NCOP in this regard.

 

Report to be considered.