National Council of Provinces - 11 November 2010
THURSDAY, 11 NOVEMBER 2010 __
PROCEEDINGS OF THE NATIONAL COUNCIL OF PROVINCES
____
The Council met at 14:00.
The Chairperson took the Chair and requested members to observe a moment of silence for prayers or meditation.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS – see col 000.
EXTENSION OF DEADLINE FOR AD HOC JOINT COMMITTEE ON CODE OF JUDICIAL
CONDUCT AND REGULATIONS ON JUDGES DISCLOSURE OF REGISTRABLE INTERESTS
(Draft Resolution)
The CHIEF WHIP OF THE NCOP: Chair, I move without notice:
That the Council -
1) notwithstanding –
a) Joint Rule 138(5), which provides that an Ad Hoc Joint
Committee ceases to exist if it has completed its task by the
date set for the completion of its task; and
b) a resolution adopted by the Council on 26 October 2010 that
the Ad Hoc Joint Committee on Code of Judicial Conduct and
the Regulations on Judges’ Disclosure of Registrable
Interests had to report by 16 November 2010;
2) condones the continued existence of the Ad Hoc Joint Committee; and
3) extends the deadline by which it has to conclude its business to 28
January 2011.
Question put: That the motion be agreed to.
IN FAVOUR: Eastern Cape, Free State, Gauteng, KwaZulu-Natal, Limpopo, Mpumalanga, Northern Cape, North West, Western Cape.
Motion agreed to in accordance with section 65 of the Constitution.
QUESTIONS FOR ORAL REPLY
THE DEPUTY PRESIDENT: The CHAIRPERSON OF THE NCOP: As you are aware, we have the questions to the Deputy President today. Welcome, Deputy President, to the NCOP. We will directly go to the questions. However, I would like to remind you that the time for replies to questions is five minutes; time for supplementary questions is two minutes; time for replies to supplementary questions is four minutes; and only four supplementary questions are allowed per question. New members, please note that.
Mr K A SINCLAIR: Chairperson, on a point of clarity: With your permission, I just want to enquire about a question that I, on behalf of Cope, submitted to the Deputy President in due time. According to my information, it was the first question. I received correspondence from the Secretary to the NCOP regarding the question. I then submitted a letter asking the reasons for the ruling on the question. Until now, I have not received any response. So, I just want your ruling in terms of the question that I submitted.
The CHAIRPERSON OF THE NCOP: You can redirect your letter to me; I will investigate the matter. Thank you very much.
Position and relevant details regarding South Africa’s support for current sanctions on nuclear matters against Iran
- Mr M P Sibande (ANC) asked the Deputy President:
Whether current sanctions on nuclear matters against Iran which
South Africa supported are justified; if not, what is the position in
this regard; if so, what are the relevant details?
CO364E
The DEPUTY PRESIDENT: Good afternoon, hon members and hon Chair. As a country that remains firmly committed to the elimination of weapons of mass destruction, South Africa does not wish to see even one other country possessing or acquiring nuclear weapons, including Iran. South Africa’s position is informed by our own national experience as the only country to have voluntarily dismantled its nuclear weapons and related programmes. In this regard, South Africa acts on the basis of the principles and in support of the Nuclear Non-Proliferation Treaty and the International Atomic Energy Agency, where we are active as a member of its board of governors.
During South Africa’s membership of the United Nations Security Council in 2007 and 2008, we focused our efforts on trying to de-escalate tensions, promote dialogue, and establish confidence in Iran’s nuclear programme to ensure that International Atomic Energy Agency processes were supported and Iran remained part of the Nuclear Non-Proliferation Treaty. The UN Security Council resolution framework on Iran is aimed at negotiated solutions. The United Nations Security Council is pursuing a dual-track approach of incentives and pressure, but in both instances the stated objective is a comprehensive negotiated solution. While recognising that the United Nations Security Council could be called upon to impose coercive measures such as sanctions, South Africa called for these measures to be exercised with great caution, and only to support the resumption of political dialogue and negotiations to achieve a peaceful solution. We reminded members of the United Nations Security Council that by voting in favour of sanctions, they had a special obligation to the Iranian people. We reminded them that they had to exercise the highest degree of scrutiny and oversight with regard to the implementation of the sanctions to ensure that there were no unintended consequences and the sole focus remained the nuclear programme.
In conclusion, South Africa upholds the right of all countries, including Iran, to the peaceful uses of nuclear energy, subject to appropriate safeguards. For South Africa, it is important to ensure that the international community’s response to the Iranian situation does not deny any signatory to the Nuclear Non-Proliferation Treaty the peaceful application of nuclear technology. I thank you for your attention.
Mr M P SIBANDE: Ngiyabonga Phini likaMongameli ngempendulo yakho. [Thank you, Deputy President, for your response.]
Deputy President, the only thing I would like to know is: What will be the long-term impact on South Africa’s nuclear development? I ask this because as society develops there is this trend of a lot of countries looking at the nuclear option as an alternative to be used in terms of development.
The DEPUTY PRESIDENT: Chairperson, indeed, nuclear technology is the future in terms of electrical energy generation. But, of course, the issue here is that we as a country, within the integrated policy, will look at even the generation of electrical power through nuclear technology. That is in the pipeline, and that is clean energy. Nuclear energy is clean energy. That is the future, as I have said. We have already been in possession of nuclear warheads and that is why we voluntarily destroyed them. That is technology that we will be able to revisit in future in order to meet the demand for electricity. Thank you.
Mr R A LEES: Hon Deputy President, thank you very much for the answer to the question. Following on your answer, may I ask: If you believe that nuclear energy is clean energy and it’s the energy of the future, what is your view then of the disposal of nuclear waste - which is a problem millennium after millennium - which could create a huge dirty environment for our children and grandchildren to deal with?
Secondly, the South African government adopted caution, or asked the United Nations Security Council to adopt caution, with regard to sanctions. Is the South African government in favour, or not, of the sanctions that have been imposed? Thank you, hon Chair. The CHAIRPERSON OF THE NCOP: The second question seems to be a new question, not a follow-up question.
The DEPUTY PRESIDENT: Hon members, the disposal of nuclear waste is a challenge that confronts all of humanity. That is why this technology is to be used in terms of the framework determined by the International Atomic Energy Agency, which is a body that looks at the non-proliferation as well as the management of nuclear waste.
The idea is to create a safe and healthy environment, rather than to destroy the earth, as it were. That is the framework that we, as a country, will have to be guided by so that we don’t dispose of nuclear waste in a reckless manner, a manner which promotes hazards to the health of humanity. That is why we will have to do this in a more responsible manner.
Solutions are being sought. Many countries that are already utilising nuclear energy are doing lots of research on how to dispose of nuclear waste. We know that some who are irresponsible try to dump it in waters far away from their own continents. That is why this is a matter that must be co-ordinated globally by an agency such as the International Atomic Energy Agency.
The latter part of the question is a variation of the question that I answered in the first instance, the first question posed by the hon member. So, I don’t know whether I should simply repeat that answer or not. Thank you.
Meetings of Moral Regeneration Movement, MRM, and details relating thereto
- Mr R A Lees (DA) asked the Deputy President:
Whether the Moral Regeneration Movement, MRM, has held any meetings
during the period 1 January 2009 up to the latest specified date for
which information is available; if not, why not; if so, (a) with whom
were the meetings held, (b) what subjects were covered in the meetings,
(c) what (i) decisions and (ii) recommendations were made at such
meetings and (d) who attended the meetings?
CO539E
The DEPUTY PRESIDENT: Hon members, the Moral Regeneration Movement, MRM, which is a section 21 organisation, has held numerous management and board meetings. The organisation held meetings with external stakeholders, both in government and nonstate actors. Subjects covered varied from organisational matters that were dealt with at management and board meetings to meetings with external stakeholders that, naturally, focused on strategic and programmatic matters or those matters that relate to the successful implementation of the strategic priorities of the organisation.
If hon members are interested, I can request the MRM to supply its schedule of meetings. These details, however, are not part of my work as a patron of the MRM. Some of the details can also be obtained from the Department of Arts and Culture, which is the department overseeing the work of the MRM. I thank you.
Details regarding meetings held by energy advisory council and conclusions reached by energy advisory council following the consideration of building further nuclear power stations
-
Mr R A Lees (DA) asked the Deputy President:
(1) Whether the energy advisory council has held any meetings during the period 1 January 2009 up to the latest specified date for which information is available; if not, why not; if so, (a) with whom were the meetings held, (b) what subjects were covered in the meetings, (c) what (i) decisions and (ii) recommendations were made at such meetings and (d) who attended the meetings;
(2) whether the energy advisory council has considered the building of any further nuclear power stations; if not, what is the position in this regard; if so, what conclusions were reached regarding the (a) need, (b) locality, (c) timing and (d) financing of the new nuclear power stations by the energy advisory council? CO540E The DEPUTY PRESIDENT: The National Stakeholder Advisory Council on Energy met on 8 December 2009 and on 15 October 2010. Members of the council are drawn from government, labour, business and civil society organisations, constituted along the same lines as Nedlac constituencies.
At its December 2009 meeting, the council discussed matters concerning the rising cost of electricity and how this affected consumers, especially the poor. It also discussed an innovative funding model for building new power stations. The council agreed that while the National Energy Regulator of South Africa is the authority that has the mandate to decide on Eskom’s proposed new electricity tariffs, there was a need to devise means to cushion the poor by introducing sloping block tariffs. The council also agreed to consider the proposed funding model that was presented by the labour movement.
In the meeting of 15 October 2010, the council considered a proposal on the integrated resource plan. Some of the stakeholders felt that although they had been given time to consider proposals on this plan, they still needed more time to consider this, given its complexity. Government agreed to this request.
The meeting also received a report on the process to create the independent system and market operator in a phased approach to allow independent operators to participate in the generation of electricity. This matter is currently being processed by the Interministerial Committee on Energy.
On the matter of energy efficiency and demand-side management, government indicated that it recognised the need to provide financial incentives in order to stimulate the energy efficiency programme through rebates. The required regulations for accessing these incentives have been drafted and, once the concurrence of the Minister of Finance has been obtained, the regulations will be circulated for public comment.
The council was also keen to have an update regarding the regional electricity distributors programme and whether it would proceed or not. Government indicated that the matter was under consideration at the interministerial committee and that a decision will be announced in due course.
Apart from considering the draft integrated resource plan that was presented, the council did not take any nuclear-specific decisions. The nuclear build programme remains part of our future plans. Once all processes have been finalised, including consultation with stakeholders, we will make a public announcement about the programme. I thank you.
Mr K A SINCLAIR: Deputy President, in terms of the response that you have just given, would you argue that interaction with the advisory council on energy will enhance government’s pronouncement on the renewable energy feed- in tariff, Refit, model for South Africa? Thank you.
The DEPUTY PRESIDENT: Yes, indeed it will enhance government’s response because this advisory council, as I said, is constituted in a representative manner along the lines of Nedlac, organised business, organised labour and civil society organisations. So, its views reflect the take from all these stakeholders. Thank you.
Mr D A WORTH: Chairperson, through you to the Deputy President, does the Deputy President think that if we go the way of nuclear power stations in the future South Africa will still have the technological know-how to effect the running of these stations, bearing in mind that there have been problems with Koeberg in this regard? Reactor 1 closed down; and then there was Reactor 2, which shut down as well. I believe this has a lot to do with retaining the technological know-how on how to service these stations. Thank you.
The DEPUTY PRESIDENT: Hon members, yes, it is in the country’s interests not only to retain such technological know-how, but also to produce more of the same because opportunities exist for our nuclear scientists to gain practical experience in countries that are willing. For instance, South Korea has an institute which trains nuclear engineers and physicists, and they have expressed the willingness to accept young South African students who are keen to pursue studies in that regard.
It is really for us as a country, through the Human Resource Development Council, to work out the needs of expertise in this area and prepare accordingly, so that at the time when the decision is made to go back to nuclear power, we should not then find that we don’t have personnel. So, it is indeed in our interests to retain such nuclear expertise.
Mr D B FELDMAN: Chairperson, through you to the Deputy President, I would just like to correct myself or ease my mind, Deputy President. Why did we close down one of the state-owned enterprises, SOEs, the pebble bed modular reactor, PBMR, which I think was closed due to financial constraints, and then jump over to coal energy? Could you explain this to me, please? Thank you.
The CHAIRPERSON OF THE NCOP: You have taken a very good chance; I will allow the Deputy President to respond, if he wants to.
The DEPUTY PRESIDENT: Hon members, the PBMR programme was really doing research in what is called fourth generation nuclear technology. Quite clearly, the fiscus could not sustain that kind of advanced research. However, we, as a country, do retain the intellectual property rights with regard to that research. Thank you. Integration of traditional and religious leaders into government’s efforts to fight HIV/Aids, addressing of issue of gender equality in traditional societies dealing with HIV/Aids and new strategies and plans to target youth with HIV/Aids prevention messages
- Prince M M M Zulu (IFP) asked the Deputy President:
(1) (a) To what extent are traditional and religious leaders
integrated into the government’s efforts to fight HIV/Aids,
especially in the rural areas, and (b) how does the government
address the issue of gender equality in traditional societies in
dealing with HIV/Aids;
(2) what new (a) strategies and (b) plans will the government put in
place in the next 5 to 10 years to assist existing programmes,
like loveLife, in order to target youth with HIV/Aids prevention
messages? CO554E
The DEPUTY PRESIDENT: Hon members, both traditional and religious leaders are represented in the SA National Aids Council, Sanac, and participate in all the deliberations of the council and its programmes, including World Aids Day events and the national HIV counselling and testing campaign.
Traditional leaders have been integrated into the work of the Department of Health in KwaZulu-Natal, KZN, and through the medical male circumcision campaign that was mandated and launched by His Majesty King Goodwill Zwelithini. As recently as last month, the House of Traditional Leaders reaffirmed its commitment to campaigning against HIV and Aids, and resolved to participate in the various programmes implemented in their areas of jurisdiction.
The issue of gender equality is a broad social issue that impacts on health, but is not exclusively a health issue. Civil society, community leaders and other government departments also have a role to play. Sanac includes the women’s and men’s sectors that have as their objective changing gender roles and addressing gender inequalities. Working with nongovernmental organisations, Sanac participated in the launch of the Brothers for Life campaign, which seeks to make men more responsible for ensuring an equal society.
The medical male circumcision campaign in KwaZulu-Natal also focuses on the roles and responsibilities of men. Young men are taught these responsibilities in the province, including far rural areas, by community leaders and elders. It is hoped that such programmes will decrease the incidence of gender-based violence and sexual assault.
The lifespan of the current HIV and AIDS Strategic Plan ends at the end of
- The idea is that a new plan will be developed through a consultative process during the course of 2011. Thank you.
Mr R A LEES: Hon Chair, through you to the hon Deputy President: Deputy President, in your reply you mentioned the circumcision drive in my province, KwaZulu-Natal. Are you aware of the extensive use of the Tara KLamp, which had really severe complications in tests in Orange Farm, and that, despite the results of these tests and the complications encountered at Orange Farm, the Department of Health persists in using this clamp for circumcision in KwaZulu-Natal? If you are aware of it, what are your views about the continued use of the Tara KLamp? Thank you.
The DEPUTY PRESIDENT: Hon Lees, our role, really, in Sanac is to preach and spread the word about the limited benefits of medical male circumcision. That can be done in a clinic or a hospital, and the equipment used is really out of our space, as it were.
In KwaZulu-Natal, yes, indeed, this Tara KLamp is being used. People have been trained and it is being used. So far, we have not received any complaints, as it were. It is not clear whether the people in Orange Farm who are reported to have experienced difficulties after using it were actually properly trained to do so, or not. It is also not clear whether these were operations conducted in a clinic and/or in a hospital. What we do know is that in KwaZulu-Natal it is working so far, and there have not been any complications. Thank you.
Reports on progress by municipalities in fight against poverty, as part of antipoverty campaign, municipalities’ functioning indigent policies and programmes in place targeted at poor, and government plans to assist with regard to advancing fight against poverty, social marginalisation of poor, child-headed households and senior citizens
- Ms N D Ntwanambi (ANC) asked the Deputy President:
(1) Whether, as part of his antipoverty campaign, he or the
Presidency has received any reports regarding the progress made
by municipalities in the fight against poverty; if not, what is
the position in this regard; if so, what are the relevant
details;
(2) whether all municipalities have functioning (a) policies and/or
(b) indigent programmes in place that are targeted at the poor;
if not, why not; if so, what are the relevant details;
(3) whether the government has any plans to assist poor
municipalities in playing a critical role with regard to (a)
advancing the fight against poverty, (b) the social
marginalisation of the poor, (c) child-headed households and (d)
senior citizens; if not, why not; if so, what plans?
CO560E The DEPUTY PRESIDENT: Hon members, the War on Poverty campaign is part of the comprehensive antipoverty strategy of government. It is an urgent and intermediate intervention against poverty.
Progress reports on the War on Poverty campaign are submitted to the national war room, which in turn briefs the Presidency. We do not just receive reports, but we also undertake regular verification visits to areas where the War on Poverty campaign has been launched to review progress for ourselves.
According to our monitoring reports, all municipalities have indigent policies. Municipalities complete a template every quarter which reports on whether they have indigent registers, how many people are registered, and the number of persons benefiting from free basic services. Free basic services such as water and electricity are examples of local government programmes that are targeted at the poor and are being implemented in most municipalities.
National government, through the Department of Co-operative Governance and Traditional Affairs, currently has three programmes that support municipalities with initiatives that target the poor. The municipal infrastructure grant enables municipalities to roll out basic services to poorer communities. The Siyenza Manje programme provides technical hands-on support to municipalities.
The Community Work Programme is an initiative designed to provide an employment safety net by providing participants with a predictable number of days of work per month, thus supplementing their existing livelihood and affording them a basic level of income security through work. The programme is targeted at unemployed and underemployed people of working age, including those whose livelihood activities are insufficient to lift them out of poverty. The programme currently has 75 000 participants. More details on these programmes can be obtained from the Minister for Co- operative Governance and Traditional Affairs.
In addition to this, government has a plethora of programmes that address the social marginalisation of the poor. For example, we have significantly increased the number of no-fee schools, school feeding programmes, early childhood development facilities and many other programmes.
The Department of Social Development has programmes for child-headed households. These include foster care and monitoring by social workers and justice officials, as per the Children’s Act and the provisions of our Constitution. We also work in partnership with nonstate actors to address the issues of children in our country.
With regard to senior citizens, per capita grants are given to institutions that provide residential care for senior citizens. Social programmes to keep our senior citizens involved in the social life of our communities are being implemented across the country. We have also taken a conscious decision to include the affairs of senior citizens in all our new programmes such as the Comprehensive Rural Development Programme. Most recently, a South African female senior citizens football team represented the country abroad. Thank you.
The CHIEF WHIP OF THE NCOP: Ndiyabulela, Sekela-mongameli. [Thank you, Deputy President.] I want to know, Deputy President, whether the government encourages or accepts shared service delivery arrangements with poor communities and households such as the one we witnessed when the City of Cape Town built open toilets for the community of Makhaza with the expectation that the community would find means to cover themselves even if it means using blankets.
The DEPUTY PRESIDENT: Hon members, I think that for any shared services to work - we have seen that in the provision of RDP houses in a number of communities – or when that kind of service is to be provided to any community, it is best when the community is involved from the planning phase and is also organised accordingly. Then it is possible for residents in a street comprising a number of households to know that they can, together, build a home - or a toilet, if it is a toilet that has to be built - for each household.
If it is not done with their involvement and in that fashion, it is bound to result in problems and a sense of not being provided with the requisite service or support. It only works when it is done in the spirit of letsema or “let us do it together”. That way it works better because those who are on the waiting list then know that they are on such a list, and they also know the product and its quality because they are involved in its construction and delivery, as it were.
I think that the case you are referring to suffered from that weakness because the community, as I followed the story, were made to sign some documents which purportedly recorded their acceptance of the toilet seats that were not covered. We believe that had the community been engaged and involved in the provision of those structures, they would have done it sequentially. We also believe that at the end - whatever time it would have taken - all of them would have ended up with covered toilets. Thank you.
Mr A WATSON: Thank you, Chairperson. Deputy President, I think your government must be commended for your efforts - which you have just explained to us - of alleviating the strife of those who are mostly poverty- stricken in our country, as well as your efforts of addressing the issue of joblessness. But the ancillary problem in this regard is, of course, corruption.
I would like to know what your government is doing in all those many ANC- controlled municipalities across the country where you, as the government, have put in so much of the efforts to alleviate poverty. Those funds are corrupted and stolen by corrupt officials, as was evidenced just this week in the “City of Choice”, Msunduzi Municipality, KwaZulu-Natal province. Do you have plans in place to stop this flow – I want to say, this tide of corruption - that steals the money meant for the poor and indigent?
The DEPUTY CHAIRPERSON OF THE NCOP (Ms T C Memela): Okay, that looks like a secondary question to the initial question, but I wouldn’t like to deny the Deputy President the opportunity to share some ideas if he wants to respond.
The DEPUTY PRESIDENT: Hon members, the government has five priorities. The first is education, because it has many problems. Yet, education is the real equaliser in society. So that’s a priority. Health is the second priority. We know that public hospitals need to be improved. The third priority is the creation of jobs because unemployment, poverty and all the attendant problems remain stubborn. In fact, the number of people who are dependent on social grants has risen to 13 million, and that figure is unsustainable if it relies on the fiscus. We’ve got to find a way of creating jobs to reduce that figure.
The fourth priority is rural development because, unless we attempt development in rural areas, the migration into urban areas and the resultant increase of informal settlements will remain a problem. The fifth priority is the fight against crime and corruption. Corruption, by whatever name we call it, must be fought and eliminated. Where we have evidence and so on, there are specialised units, over and above the law enforcement units, that can deal with such cases.
Indeed, the government is committed, and that is why you see this high turnover of those who are caught with their fingers in the till, so to speak. I can only repeat the fact that it is a societal problem and it affects all of us. That is why whistle-blowers are important in this regard. Thank you.
Ms M P THEMBA: Thank you, Chairperson. Deputy President, after how long does the government require reports from municipalities regarding their progress in this regard?
The DEPUTY PRESIDENT: I did not get the essence of the question, hon member. Can you please elaborate a bit?
Ms M P THEMBA: The government offers assistance to the municipalities through the Department of Co-operative Governance and Traditional Affairs. My question is: After how long does the government require reports from the municipalities on the progress that they are making with the assistance that is offered to them by the Department of Co-operative Governance and Traditional Affairs?
The DEPUTY PRESIDENT: Well, municipalities are there to render services to communities. The national department assists them to, firstly, obtain unqualified audits. That’s the first goal of the assistance. The number of municipalities that are now receiving unqualified audits has increased. The department has a target to eliminate those that still receive qualified audits. That’s the broad measure, otherwise it’s very difficult to say.
The department does not wait for reports from the municipalities. It is out there generating data on the weaknesses that are found in the municipalities in order to introduce corrective measures. That’s an ongoing interactive process, but the broad tool used for checking progress is the audit.
Mr R A LEES: Hon Chairperson, through you to the Deputy President: Deputy President, you are to be congratulated on the Community Work Programme and creating 75 000 jobs under these economic circumstances. That’s tremendous. My question is: With the emphasis on decent jobs, would those jobs be classified, in your opinion, as being “decent jobs”?
The second part of my question relates to the restriction on work opportunities, in particular the textile industry, with its minimum wage rates that resulted in the controversy. This is something which, I’m sure, you are aware of, particularly in my province in Newcastle. I would like to know about the restriction imposed on job creation by minimum wage rates in line with these job opportunities here. On the one hand, you are doing a fantastic job of creating job opportunities, but, on the other hand, should we not be looking at opening the opportunities where we have restrictions such as minimum wage rates which chase the work overseas or to other countries?
The DEPUTY PRESIDENT: Hon Lees, the minimum wage is not restrictive because it determines the barest minimum that should be paid to a worker in a particular sector. That is why employers - those who set up factories, and so on - are free to employ anybody at the barest minimum prescribed by law. The minimum wage has been introduced even for domestic servants. Therefore, in itself it’s not a restriction.
If the employers want to use prison labour, that is now being outlawed in South Africa. In the past, there were opportunities for employers to employ prisoners. When one employed prisoners, she or he paid Correctional Services a certain fee. The prisoners worked and Correctional Services fed, housed and clothed them. That way, one almost got free labour.
However, in the labour market, a minimum wage has been set, and other employers pay far more than that. Therefore, if you employ people and you are happy with their work, they should also be happy about what they earn even if it is a minimum wage. There is no need for inspectors to impose any higher wages than what is prescribed as a minimum. The situation that you are referring to regarding the factories in Newcastle, KwaZulu-Natal, involves employers who get workers into “sweatshops”. In other words, the conditions in those factories are hazardous, and so on.
On that point, we recall cases where some of those employers locked up employees in the factories at night. And, as a result, some of them died. They did not even allow their employees to leave the factory. Now, those kinds of conditions are not allowed in terms of our labour laws.
The Ministry of Labour, therefore, sent the inspectors to check the situation in those factories. I don’t think it was a minimum wage issue; it was more the overall working conditions that impelled the labour inspectors to close down those factories. Thank you.
Details regarding infrastructure investment in ensuring supply and preservation of clean water, water storage and distribution, and clearing
out national water infrastructure backlog in Limpopo, Northern Cape,
Eastern Cape and Mpumalanga
- Ms N D Ntwanambi (ANC) asked the Deputy President:
Whether any part of the R300 billion the government has been spending
annually on infrastructure investment includes investment in ensuring
(a) the supply and preservation of clean water, (b) water storage and
(c) distribution, especially in clearing out our national water
infrastructure backlog in communities of the rural areas and townships
of Limpopo, Northern Cape, Eastern Cape and Mpumalanga that have been
battling with drought, inconsistent water supply, contaminated water
and/or still use natural water streams and dams; if not, why not; if
so, what are the relevant details? CO561E
The DEPUTY PRESIDENT: Chairperson, hon members, as with many other basic services, the provision of water to the people of South Africa is severely influenced by the application of unequal policies in the past. Some rural communities are in the catchment areas for water supplies to the big cities and, although they watch the water being piped off to the cities, they themselves do not have access to potable water.
We now look at managing water in its entirety in our Water for Growth and Development Framework. This is a sector approach to water management, instead of having water resources and water services as separate disciplines.
While “water rights” was the term used in the old Water Act of 1956, the current National Water Act of 1998 refers to “water use entitlements”. The Act makes provision for rural communities to apply for a water use license. This replaces the riparian rights principle which excluded an estimated 90% of blacks from obtaining water and which was the basis of the Water Act of 1956.
With regard to your question, hon member, the answer is yes. Through its regional bulk infrastructure grant and Accelerated Community Infrastructure Programme, the Department of Water and Environmental Affairs is investing up to R5 billion over the Medium-Term Expenditure Framework to reduce the current backlog in the supply of bulk potable water for socioeconomic and developmental needs in all provinces of South Africa.
Hon Ntwanambi asks specifically about the rural areas and townships of Limpopo, Northern Cape, Eastern Cape and Mpumalanga. Starting with Mpumalanga, government is attempting to address the challenge by installing water treatment package plants in the communities of Ntunda, Louisville, Skhwahlane, Brooklyn and Draaikraal.
During my visit to the Mpumalanga province on 30 October this year I had the honour of opening a 2 megalitre package plant costing R2,8 million in the Ntunda village, and a pipeline to reservoirs costing R1,4 million. This project now supplies potable water to at least 7 000 people in the Ntunda and Skhwahlane villages.
Through the bulk infrastructure grant in the Limpopo province, the Department of Water and Environmental Affairs allocated an amount of R228 million in the 2009-10 financial year for the funding of nine water supply projects. An additional allocation of R28,66 million in the 2010-11 financial year from the community infrastructure programme ensures that reticulation takes place in the municipalities.
In the Eastern Cape, R23 million has been invested for the supply of water and to address water-pollution-related issues. In the Northern Cape, a total of R8,37 million has been invested in three municipalities to cater for the Northern Cape waste water and sewerage pump stations refurbishment and water supply.
A number of municipalities were declared drought-stricken areas in the Eastern Cape, Western Cape and Limpopo provinces in late 2009. In consultation with the affected municipalities, these provinces have conducted assessments to quantify the needs and the resources required to bring about drought relief.
The interministerial committee approved a sum of R86 million for the Eastern Cape and R185,2 million for the Western Cape. Of this amount, R53,7 million was transferred to the Western Cape during November 2010, and a further amount of R141,5 million for the 2010-11 financial year. An amount of R54 million was approved for the Limpopo province in January
- Funds were made available from 1 July 2010.
With regard to initiatives to address acid mine drainage, Cabinet appointed an interministerial committee to address the serious challenges related to acid mine drainage in the Witwatersrand. Subsequently, a team of experts was appointed and they presented their report to the interministerial committee on 21 October this year. The interministerial committee has asked the team of experts to look at the cost implications of their recommendations and other options to resolve acid mine drainage. I thank you for your attention.
The CHIEF WHIP OF THE NCOP: Thank you very much, Chair. Deputy President…
… ndifuna ukuqonda ukuba njengoko umbane nawo unyuke kangaka, ingaba urhulumente usabambelele kulaa mbane uzikhilowathi ezingama-50 indlu nganye? Ingaba awuzokunyuswa na laa mbane umntu awuphiwayo? [… since the electricity price has also increased this much, I would like to know whether the government will continue to subsidise each household with the free 50 kilowatts of electricity? Will that free electricity not be increased?]
The CHAIRPERSON OF THE NCOP: We are now mixing water and electricity … [Interjections.] … All right. [Laughter.]
The DEPUTY PRESIDENT: Ngokolwazi lwam, urhulumente akakalihlaziyi inani leekhilowathi elinikwa abantu bakuthi ngaphandle kwentlawulo. [As far as I know, government has not yet reviewed the number of free kilowatts that are subsidised for our people.]
Mr B A MNGUNI: Chairperson, Deputy President, there is general concern in a certain community that by 2025 the country will be in short supply or in dire need of clean fresh water. Does the government have a long-term strategy to avert this foreseeable calamity, such as pumping or piping desalinated water from the coastline, or perhaps going as far as the Great Lakes?
The DEPUTY PRESIDENT: As I indicated in my initial response, government is seized with efforts to address the challenge of ours being a water-scarce country. There are a number of ways in which government is responding to this challenge. Key amongst those is, first and foremost, to harvest as much water as we possibly can and keep it in reservoirs and dams, as well as to purify water that is available in many streams across the country. The example of the Ntunda community that I visited last month is instructive in this regard. Here is a plant that does not cost anything more than R6 million. It pumps the water out of a river, purifies it, makes it potable, and pumps it to take care of the communities.
The reality is that supply is not enough just on its own. We have to explore the possibilities of recycling water. We also have to embark on massive education of our people. For example, in many instances where there are only three grains of rice in the sink we open the tap to flush them down instead of picking them up. This reflects that we are not aware of the fact that this source of life, clean water, is in short supply, because people just use water recklessly.
So, this is a challenge that we, as government, are seized with. We are quite aware of this challenge and we are doing everything possible to ensure that we do not end up with severe water shortages. Without water there is no sanitation and there is no life. All kinds of complications will arise here. Thank you.
Mr M P JACOBS: Chair, my question to the Deputy President is: What mechanism does the government have in place to ensure that when dams are built people from surrounding areas benefit from that water? Currently, that is not the case. You find that water is being transported to industrial areas and people in the surrounding areas do not benefit from those dams. Thank you.
The DEPUTY PRESIDENT: Chairperson, under the current National Water Act, what I referred to as water use entitlement seeks to address precisely this problem. Communities live close to massive dams and yet they have no access. This is because the old Water Act gave rights to certain commercial farmers, to the exclusion of local communities. That is what this water use entitlement seeks to address. That is the legal instrument for addressing precisely that challenge here. Thank you.
Mr D A WORTH: Chair, in the province I come from, there are a lot of problems with the municipalities with regard to them not spending money on the maintenance of infrastructure. By that I mean sewerage plants and water purification plants. Whilst the municipalities do get the bulk infrastructure grants, they tend to be more for new projects. There is talk that municipalities are supposed to spend money on maintaining their existing infrastructure. In addition, there has been talk that certain amounts of money will, in future, be ring-fenced to ensure that money is spent by the municipalities on maintaining infrastructure, particularly with regard to water supply.
The DEPUTY PRESIDENT: Hon Worth, you have put your finger on the nub of the problem. This does not only apply to water, it applies to all bulk economic and social infrastructure, whether it is a school, a road, or any infrastructure. The weakness that is common is that we do not make provision for maintenance.
In addition, as you know, a city such as Cape Town, for example, is old. At some point, the pipes are bound to show old age and, therefore, wear and tear, unless the municipality, the Metro, intervenes. In Gauteng, this is what people are experiencing. Through seepage, lots of water is lost and it goes to waste.
So, indeed, the key to solving all these problems is that, after delivering any major project, there must be a maintenance team in place to maintain that infrastructure. If we do not do that, it will always cost us a fortune to repair and reconstruct. Essentially, just by maintaining it, most bulk economic infrastructure can give us good service for almost 50 years. However, if there is no maintenance, it means every second term or so you have got to reconstruct from scratch. And that goes, as I said, for all infrastructure - the schools, the hospitals, the clinics. With maintenance, paintwork and all of that, on an ongoing basis, we would save a lot, actually. Thank you very much, Chairperson.
Mr T B BEYLEVELDT: Hon Chair, hon Deputy President, the problem we found at the municipal level is that the government is giving money for infrastructure projects, but there is very little money going towards maintenance. For example, you can spend millions on low-cost housing projects, but there is no follow-up funding from the government to maintain municipalities. It then becomes a municipal responsibility, and that makes it very difficult.
If we can get the municipal infrastructure grant, as you have said - and for that we are very grateful - we can have a long-term funding model to support the government’s initiatives regarding infrastructure building. It will make a huge difference because a municipality’s income comes from the residents. That is the only source of money that they actually have. How can you maintain poor people’s houses if they cannot pay rates and taxes? Due to poverty relief measures, many people are dependent on equitable shares and on grants from the municipalities to keep them alive.
So, I do not think that is really a question, it is just an opinion I am expressing. Maybe we must really look to support our municipalities more with maintenance money. Thank you, Mr Deputy President.
The CHAIRPERSON OF THE NCOP: That was an input and a contribution, not a question.
The DEPUTY PRESIDENT: I agree with him.
The CHAIRPERSON OF THE NCOP: Yes, and the Deputy President agrees with you. [Laughter.]
See also QUESTIONS AND REPLIES.
The Council adjourned at 15:12. ____
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS
WEDNESDAY, 10 NOVEMBER 2010
ANNOUNCEMENTS National Assembly and National Council of Provinces
The Speaker and the Chairperson
- Introduction of Bills
(1) The Minister of Correctional Services
a) Correctional Matters Amendment Bill [B 41 – 2010] (National
Assembly – proposed sec 75) [Explanatory summary of Bill and
prior notice of its introduction published in Government
Gazette No 33683 of 25 October 2010.]
Introduction and referral to the Portfolio Committee on
Correctional Services of the National Assembly, as well as
referral to the Joint Tagging Mechanism (JTM) for
classification in terms of Joint Rule 160.
In terms of Joint Rule 154 written views on the classification
of the Bill may be submitted to the JTM within three
parliamentary working days.
-
Draft Bills submitted in terms of Joint Rule 159
1) Tax Administration Bill, 2010, submitted by the Minister of Finance.
Referred to the Standing Committee on Finance and the Select Committee on Finance.
TABLINGS
National Assembly and National Council of Provinces
- The Speaker and the Chairperson
a) Report of the Auditor-General of South Africa to Parliament on an
investigation at the Commission for Gender Equality – October 2010
[RP268-2010]
Referred to the Committee on Public Accounts for consideration and
to the Ad Hoc Committee on the Commission for Gender Equality
Forensic Investigation for consideration and report in terms of
their respective mandates.
COMMITTEE REPORTS
National Council of Provinces
-
Report of the Select Committee on Finance on its Oversight Visit to the Municipalities in the North West on the 20 – 23 July 2010, dated 14 September 2010
-
Introduction
The Select Committee on Finance (the Committee) was established in terms of section 4(1) of the Money Bills Amendment Procedure and Related Matters Act, No. 9 of 2009. In terms of section 4(2) of the Act, the Committee has the powers and functions conferred to it by the Constitution, legislation, the standing rules or resolution of a House, including considering and reporting on: a) the national macro-economic and fiscal policy; b) amendment to the fiscal framework, revised fiscal framework and revenue proposals and Bills; c) actual revenue published by the National Treasury; and d) any other related matter set out in this Act.
Furthermore, the mandate encompasses the Committee’s function to legislate, conduct oversight of the Executive; promote public participation, facilitate international agreements and review matters of public interest in relation to National Treasury (NT) and its entities, and the South African Reserve Bank (SARB). The Money Bills Amendment Procedure and Related Matters Act makes provision for this Committee to amend Money Bills.
- Delegation
The oversight visit took place from 20 to 23 July 2010. Meetings were held at Mafikeng/Mmabatho (Mmabatho Palms Hotel) and in the City of Matlosana (Metcourt at Rio Hotel) in the Province of North West.
1.2 Terms of reference
The visit formed part of the Committee’s ongoing interactions with municipalities in monitoring collaboration and co-ordination pertaining to the provision of municipal services and support given to the municipalities by Provincial and National Departments. The municipalities in North West that were identified for the visit are: Ditsobotla Local Municipality, Greater Taung Local Municipality; Kagisano Local Municipality; Lekwa- Teemane Local Municipality; Tswaing Local Municipality; Tlokwe Local Municipality; Moses Kotane Local Municipality; Naledi Local Municipality; Maquassi Hills Local Municipality; Mamusa Local Municipality; Mafikeng Local Municipality; Madibeng Local Municipality, Moretele Local Municipality; Kgetlengrivier Local Municipality; City of Matlosana Local Municipality; and Ventersdorp Local Municipality. Greater Taung Local Municipality could not attend the oversight meeting and Tlokwe Local Municipality presented on the 2008/09 financial year instead of the 2009/10 financial year. The Committee resolved to re-invite these two municipalities to appear before it in Cape Town, Parliament, at a date that will be communicated to them in the near future.
The stakeholders (including National and Provincial Departments) that accompanied the Committee on this visit are the following: Department of Co- operative Governance and Traditional Affairs (CoGTA), North West Department of Local Government and Traditional Affairs (LGTA), National Treasury (NT), North West Provincial Treasury (PT), South African Local Government Association (SALGA), Department of Energy (DME), Financial and Fiscal Commission (FFC), National Department of Water and Environmental Affairs (DWEA), National Department of Public Works (DPW), Provincial Department of Public Works (PDPW), Auditor General (AG), Development Bank of Southern Africa (DBSA) and ESKOM.
1.3 Purpose of the Visit
The purpose of the oversight visit was to engage with the above-mentioned municipalities along with national and provincial departments, and other stakeholders on the following areas:
• Development and implementation of municipal budgets;
• Municipalities’ compliance with the Municipal Finance Management Act,
No. 56 of 2003;
• The spending and performance of municipalities with regard to
conditional grants;
• The municipalities’ relations and collaboration with various national
and provincial departments and entities;
• Capacity constraints of the municipalities (if any);
• The extent to which municipal services are provided; and
• The alignment of municipalities’ Integrated Development Programmes
with the Provincial Growth and Development Strategy.
- Presentation by Auditor General
The Office of the Auditor General (AG) briefed the Committee on the 2009/10 audit outcomes of municipalities in the North West and indicated the following:
• The report showed that, of the 24 municipalities in the province,
13 audit reports were issued (as on 30 April 2010) of which 4
reports were not yet issued and 7 municipalities had not submitted
their financial statements for auditing purposes.
• Of the 13 issued audit reports 2 received an unqualified audit
opinion, 3 qualified audit opinions, 1 adverse audit opinion and 7
received disclaimer audit opinion.
• The report further showed that 7 municipalities (namely, Madibeng,
Naledi, Ditsobotla, Tswaing, Ventersdorp, Greater Taung and Moses
Kotane) within the province are currently under administration, 4
municipalities (namely, Tlokwe, Naledi, Maquassi Hills and Dr
Kenneth Kaunda) had vacant municipal manager positions, 6
municipalities (namely, Madibeng, Mafikeng, Tswaing, Greater Taung,
Rustenburg and Dr Kenneth Kaunda) had their municipal managers on
suspension, and 2 municipalities (namely, City of Matlosana and Dr
Kenneth Kaunda) had their chief financial positions vacant while 4
municipalities (Moretele, Ventersdorp, Rustenburg and Ngaka Modiri
Molema) had their CFOs on suspension.
• The report further showed non-compliance with section 71 of the
Municipal Finance Management Act, 2003 (reporting not always done
or often submitted late) by some municipalities.
• The AG conducted what it calls a door-to-door campaign within
certain municipalities to provide them with support.
Committee Recommendation
The Committee recommended that the office of the Auditor-General should compile a report on the door to door campaign/survey they undertook in the province and that the expected report should be forwarded to the municipalities and stakeholders that were involved, and should also be forwarded to the Committee for future reference.
-
Presentations by Municipalities
-
Kgetlengrivier Local Municipality
Kgetlengrivier Local Municipality (KRLM) reported that their integrated development plans (IDP) has been aligned to the North West’s Growth and Development Strategy (NWGDS). However, the non-core functions of local government are truly dependent on the strategic plans of Provincial Departments which are expected to be aligned to the NWGDS as well.
KRLM reported that their supply chain management policy had been developed, reviewed and is being implemented, and that they were having three bid committees (bid specification, evaluation and adjudication committees) which had been established in June 2010 and were functional. KRLM mentioned that their budget and treasury office (BTO) functions were reviewed and aligned to sections 80 and 81 of the Municipal Finance Management Act.
It was also reported that the 2008/09 annual financial statements were submitted after the deadline to the office of the Auditor-General and the audit will be finalised by 31 July 2010. It was mentioned that section 71 reports were submitted. However, due to lack of capacity, these reports were not submitted on time. However, KRLM reported that they do not have an internal audit unit, the unit was included in the revised organizational structure and appointments will be done before the end of September 2010. The Bojanala Platinum District Municipality offered to share their Audit Committee in assisting the KRLM.
KRLM reported the following capacity constrains: several key positions are occupied by aged staff in their Finance Department, and as a result it makes it difficult to build capacity and to introduce new legislation. Training on the Municipal Finance Management Act, GRAP and the new Financial Management System was still needed. KRLM reported that their employee related cost was at 35 per cent (R28, 8 million) of the operating budget and the repairs and maintenance costs at 7 per cent (R5, 7 million) of the operating budget. KRLM reported that 87 per cent of their funding was in the form of capital grants and subsidies dependency. Their own revenue was 13 per cent of the total funds.
Committee Recommendations
The Committee recommended that: • all sector departments should provide the municipality with the necessary support in order to enable it to overcome challenges; • The municipality should utilise the funds that were invested with ABSA in order to be able to deliver basic services needed by the communities; • Services of inmates from the local correctional services centres and those of the learners from local FET Colleges in engineering disciplines could be utilized to the benefit of the municipality; • Services of interns trained by Provincial Treasury could be utilized to address capacity challenges; and • The North West Provincial Treasury should submit a detailed report on the status of financial management of KRLM to the Committee within three months after the adoption of this report by the House.
- Moretele Local Municipality
Moretele Local Municipality (MLM) reported that the focus and approach of IDP was aimed at the attainment of the Provincial Growth Development Strategy (PGDS) but the challenge was that targets were set for the Bojanala Platinum District Municipality. MLM reported that, in terms of section 111 of the MFMA, they had developed and implemented a supply chain management policy. Three bid committees had been established, (namely, the specification committee, evaluation committee and adjudication committee). It was reported that members of the bid committees were appointed by the Municipal Manager.
MLM reported that the 2008/09 financial statements were submitted late on 14 January 2010 due to employee/labour strikes. All section 71 reports for the 2008/09 financial year have been submitted to the Provincial and National Treasury as per MFMA requirements. It was reported by MLM that section 71 reports for the 2009/10 financial year had been submitted up to March 2010 but the Municipality had experienced serious challenges with regard to making submissions as required in terms of the MFMA.
MLM reported that their internal audit unit had been established by the Municipality. This unit reports directly to the accounting officer (Municipal Manager) and had been established due to a serious lack of capacity that was identified in the unit in the 2008/09 financial year. With the assistance of the Development Bank of Southern Africa (DBSA) finance secondee, the Municipal Manager has revitalized the internal audit unit. It was reported that the internal audit unit was better capacitated and functional in the 2009/10 financial year and, as a result, the unit accomplished some work in certain areas. It was reported that R28 million (33 per cent) was allocated from the Municipality’s overall budget for salaries. The Municipality was dependant on capital grants and on operational grants.
MLM identified the following as their service delivery and capacity constraints: • The continuity of water supply in the areas was serviced by the City of Tshwane. • The Temba and Klipdrift water purification plants were operated beyond their capacity and could not cope with the demand. • The City of Tshwane was restricting bulk water provisions due to late or non-payment of accounts by MLM. • MLM reported that it could not afford to pay the monthly bulk water invoice from the City of Tshwane amounting to approximately R3.5 million per month. • MLM reported that an amount of approximately R120 million is required in order to remedy the challenges of bulk water supply. • The incapacity of the MLM to maintain water borne sanitation makes it rely on Bojanala Platinum District Municipality.
Committee Recommendations
• The Committee recommended that sector departments (namely National
Treasury, Provincial Treasury, Co-operative Governance and Traditional
Affairs, Department of Water and Environmental Affairs and the City
of Tshwane), should meet to assist the MLM on the financing of a debt
amounting to R84 million for water supplied by the City of Tshwane;
• A need was identified that all municipal managers should be trained by
the Association of Public Accounts Committees on their roles and
responsibilities; and
• The Department of Water and Environmental Affairs should assist MLM by
providing services of environmental assessment expected at this
municipality.
- Moses Kotane Local Municipality
The Moses Kotane Local Municipality (MKLM) was placed under administration in terms of Section 139 of the Municipal Finance Management Act No. 56 of
- It was reported that the administrator had reviewed the organisational structure of the MLM, and that vacant posts would soon be filled. The DBSA had been requested to provide technical support. MKLM reported that salaries, including those of councillors, accounted for 39, 7 per cent of the total budget allocation. It was reported that the municipality was using a developmental agency and that it was of the view that it should be disbanded.
MKLM reported that they launched a water demand project that was funded by the Department of Water and Environmental Affairs (DWEA) and the local mines. The sector departments were not participating to the satisfactory level in the IDP process of the MKLM. It was reported that, although Eskom provided electricity in the MKLM, the progress was at a slower pace than it was expected.
Committee Recommendation
The Administrator should provide the Committee with a progress report on the service delivery and financial affairs of the MKLM within three months after the adoption of this report by the House.
- Madibeng Local Municipality
Madibeng Local Municipality (MDLM) is currently under administration in terms of Section 139 of the Municipal Finance Management Act No. 56 of
- MDLM reported that senior managers were resigning from their positions. This meant that the recruitment process had to start all over again. Approximately 350 officials of the MDLM were registered with the Company and Intellectual Property Rights Organisations (CIPRO). There were 10 ‘ghost’ workers, but at the time of the oversight visit the MDLM was in a process of addressing these issues. MDLM further reported that 20 per cent of its budget and treasury office might be suspended due to allegations of fraud, maladministration and corruption.
MDLM informed the Committee that they budgeted R47,9 million for repairs and maintenance but enough had not been done as they only managed to spend R20 million of the budget. MDLM further reported that salaries were at 27 per cent (R224, 9 million) of operating budget. Furthermore, it reported that an investigation of funds at the Britz Treatment Plant amounting to R20 million was commissioned.
Committee Recommendation The Committee recommended that the administrator of MDLM should adopt the management model demonstrated by the administrator of the Moses Kotane Municipality because it had a hand on approach when the daily operations of the municipality were concerned.
- Naledi Local Municipality
The Mayor of the Naledi Local Municipality (NLM) reported that he has requested the MEC for Finance to intervene in the running of the municipality, and were provided with the services of an Acting Municipal Manager and a Chief Financial Officer. It is reported that both of these officials have performed very well. It was reported that the troika was functioning well until January 2010 when the situation changed due to personal interests in the housing project.
NLM reported that a budget and treasury office had recently been established. However, it was still experiencing a high vacancy rate that would soon be addressed in consultation with the human resources unit. NLM further reported on its inability to implement the Municipal Credit Control Policy due to a lack of co-ordination in the NLM as there was no agreement.
NLM reported that, between August 2009 and June 2010, its Council took a decision to appoint staff in acting managerial positions. This practice led to wasteful expenditure amounting to R810, 000. The Council resolved to stop the process and those affected were expected to pay back the monies.
NLM reported that there was a loss of electricity due to illegal connections to the value of R11 million. They have arranged payments with ESKOM and managed to pay their last installment in March 2010.
NLM was also faced with a lack of co-operation by some of the local farmers when it wanted to provide services to the farm dwellers.
Committee Observation
The Committee observed that there was a need for the Municipal Manager to get all stakeholders on board in order to enable the NLM to resolve the challenges it was facing. The Committee advised that the Municipal Manager enhances his negotiating skills.
Committee Recommendations
The Committee recommended that: • The Naledi Local Municipality should engage with Agriculture South Africa on the matter of farm dwellers in order to reach a common understanding on the service delivery issue; and • The Department of Water and Environmental Affairs should make a plan for the Kagisano communities who are nearby the Vaal Dam to get access to clean drinking water that was running through their residential area.
- Kagisano Local Municipality
Kagisano Local Municipality (KLM) reported that their 2010/11 IDP was aligned to the PGDS and that their supply chain management policy was reviewed and adopted on 29 June 2010. It was reported that two of the three bid committees had been established, namely the evaluation committee and the adjudication committee.
KLM received an unqualified audit opinion for the 2006/07 and 2007/08 financial years. The annual financial statements for 2008/2009 had not been submitted to the Office of the Auditor-General as yet, whereas they had to be submitted by 31 July 2010. The KLM reported that the delay to submit the financial statements on time was due to a lack of capacity (skills and human resources), and compliance with the Generally Recognised Accounting Principles (GRAP) 17. The conversion of the fixed assets register to GRAP proved to be a challenge. Submission of section 71 reports to the relevant Treasuries were delayed due to the following reasons/challenges faced by the Budget and Treasury Office: high staff turnover (due to payment of non market- related salaries), lack of capacity (skilled personnel), and having to deal with multi-year processing and finalizing the annual reports and financial statements for the 2008/09 and 2009/10 financial years.
Furthermore, KLM reported that lack of service delivery such as refuse removal had been caused by a lack of capacity such as human resources and an insufficient budget, partly because these services should be a function of the district municipality. KLM did not have a refuse removal unit that deals with this function due to a lack of funds, human resources and equipment.
Committee Recommendations
The Committee recommended that: • The Department of Water and Environmental Affairs should find options to pump water from the Vaal Dam for use by the communities of Kagisano; • National Treasury and the Departments of Co-operative Governance and Traditional Affairs and Water and Environmental Affairs should resolve the issue relating to refuse removal of municipalities; • KLM should hire graders from private companies and farmers to enable them to grade roads because they budgeted for this particular activity; • KLM should hire local people for the removal of refuse at an affordable fee; • Senior officials from the sector departments should attend the IDP processes of the municipalities as they are binding on commitments; • The Chief Financial Officers at municipalities should attend the training sessions, offered by National Treasury in order to enable them to gain and plough back the knowledge to their municipalities; and • Fraudulent cases against municipal officials should fast-track in collaboration with the Special Investigating Unit (SIU).
- Mamusa Local Municipality
Mamusa Local Municipality (MMLM) reported that the alignment of municipal IDP to PGDS was guided by the five Pre-determined Local Government Development objectives. One of the objectives of PGDS was to halve unemployment by the 2014 calendar year and to create jobs. MMLM mentioned that the Council adopted the supply chain management policy which was aligned to the National Treasury Guidelines. MMLM reported that the bid evaluation and adjudication committees were established and that they were functioning effectively, with the exception of the bid specification committee. Amounts of R26 million (37, 7 per cent) had been budgeted for salaries and R7 million (11 per cent) for repairs and maintenance.
MMLM reported that a budget and treasury office had been established but that it was under-staffed. The existing organisational structure was approved in 2003 and the officials need training in Microsoft Excel, MFMA and GRAP. The annual financial statements for the 2007/08 financial year had not been submitted due to challenges experienced with the conversion from Institute of Municipal Finance Officers (IMFO) to General Recognized Accounting Practices (GRAP). MMLM reported that it has complied with the submission of the section 71 and conditional grants reporting requirements as at 31 March 2010.
Dr Ruth S Mompati District Municipality provided internal shared services for auditing to MMLM. The annual report for the 2007/08 financial had not been finalised due to outstanding annual financial statements for the 2007/08 financial year.
Service delivery and capacity constraints were hampered by the poor debt collection rate (23%), impediments to debtor’s collection, and limited legal action caused by outdated by-laws. The issue of funds being consumed by operational expenses resulted in a lack of funds for capital items, refurbishments, infrastructure maintenance and general maintenance of equipment. The national and provincial Departments of Public Works had been identified as the main debtors. The Municipal Infrastructure Grant (MIG) funding amounting to R11.4 million for the 2010/11 financial year had been allocated to them to address the huge backlog but it was insufficient.
Committee Recommendations
The Committee recommended that: • Provincial Treasury should fast track the payment of monies owed by sector departments to municipalities and individuals; • Provincial Treasury should assist municipalities with the auditing function because a system of sharing an audit committee by municipalities was not functioning in most cases; and • Sector departments present should assist municipalities by drafting a strategy to deal with the challenges.
- Tswaing Local Municipality
Tswaing Local Municipality (TLM) was currently under administration in terms of Section 139 of the Municipal Finance Management Act No. 56 of 2003 and it was reported that its IDP was not wholly aligned to PGDS. However, it was focusing on the Small Medium Micro Enterprises’ (SMMEs) development as part of the Local Economic Development (LED). TLM reported that it appointed 120 employees within a short space of time, hence the salary bill exceeded its monthly income.
TLM reported that the supply chain policy was reviewed and approved by council on 31 May 2010 Annual financial statements were submitted to the AG on time and section 71 reports of the MFMA were also submitted for the period up to 31 May 2010. The internal audit committee was in place and functional (and shared service with the district), and a plan had been developed to address concerns raised by the AG. The conversion from Institute of Municipal Finance Officers (IMFO) to General Recognized Accounting Practices (GRAP) and updating of the asset register has started.
TLM reported that it was faced with the following service delivery and capacity constraints:
• Stronghold of the ratepayers association that was withholding payments
and paying ESKOM directly to avoid service cuts;
• Access to potable water was still a serious challenge in the areas of
Letsopa/Ottosdal and Agisanang/Sannieshof;
• Lack of funding for bulk infrastructure in Agisanang where 1 000
housing units had been allocated in 2005;
• Lack of basic infrastructure, especially roads; and
• Solid waste disposal and refuse removal remain a serious challenge as
old unserviceable equipment are being used.
Committee Recommendations
The Committee recommended that: • ESKOM should transfer funds paid by the Ratepayers Association into the municipality’s bank account with the interest that it has generated; and • The Department of Water and Environment Affairs should assist the relevant district municipalities in its planning on the supply of clean drinking water to communities.
- Mafikeng Local Municipality
Mafikeng Local Municipality (MFLM) reported that the alignment of IDP to PGDS was guided by the five pre-determined local government strategic agenda that includes amongst others, local economic development. MLM reported that it had developed their Local Economic Development Strategy in line with to the PGDS. It was reported that salaries as a percentage of operating expenditure was 53 per cent.
It was further reported that supply chain management policy was adopted by Council and was aligned to the National Treasury Guidelines and had been implemented since 2007. MFLM reported that bid specification, evaluation and adjudication committees were established and they were functional. However, the bid specification committee was meeting on ad hoc basis. It was reported that a budget and treasury office had been established. The existing structure was approved in 2003. However, financial management skills remained a challenge and GRAP and the MFMA introduced further challenges. MFLM complied with section 71 of the MFMA and conditional grants reporting requirements, and endeavours were being made to improve the quality of reporting.
MFLM reported that its annual financial statements for 2008/09 were prepared on Institute of Municipal Finance Officers (IMFO) standards of accounting, and they were submitted to the AG on time. MFLM received a “disclaimer” audit opinion due to a lack of supporting documents, a fixed assets register, debtors database and provision for bad debts, funds created under the IMFO without cash-backing, the non-implementation of risk management (internal control systems, internal audit, audit committee) and, lastly, the non-functional internal audit shared service. MFLM reported that the following steps would be taken to remedy the situation:
- Drafting of a project plan to convert annual financial statements (AFS) from IMFO to GRAP during the 2009/10 financial year.
- Appointment of consultants to assist with the proper management of a fixed assets register and debtors database.
Committee Recommendations
The Committee recommended that: • The Member of Executive Council (MEC) for Finance (North West) should assist municipalities in the timely payment of intergovernmental accounts; • Municipalities should use the funds invested in the money market to address service delivery backlogs; and • The Department of Co-operative Governance and Traditional Affairs should review its approach and strategy, and improve on assisting poor municipalities.
- Lekwa-Teemane Local Municipality
The Mayor of the Lekwa-Teemane Local Municipality (LTLM) reported that it was in need of assistance as it was nearly the end of term for Councilors. LTLM reported that it was spending well on conditional grants. However, The LTLM reported that it was experiencing challenges on the deals with the Library Grant amounting to R2,5 million, and the confusion on the roles and responsibilities of the department and the municipality on the spending of grants.
LTLM reported that they were facing service delivery and capacity constraints. These included sector departments that were not participating in the IDP process, and most of the land that belong to the municipality were used as dumping sites. Over the past five years, they have been discussing this issue with the Department of Mineral and Energy (DME), requesting it to come to the rescue by relocating these sites. LTLM further reported that is was also experiencing a challenge at Bloemhof, in the sense that it was being serviced by two DME regions that were not operating in terms of the same set of rules (namely, North West Region and Gauteng Region).
LTLM further reported that they were a water service provider and that the district was not coming clear on the equitable share for funding water services and that this creates a challenge as people were drinking water from the rivers. LTLM further reported that National Treasury and Provincial Treasury were assisting them with regard to compliance with financial management matters. Furthermore, the following issues were raised:
• Ageing infrastructure, causing approximately 15 per cent distribution
losses.
• The supply of electricity to Geluksoord Extension 2 through Integrated
National Energy Plan (INEP) was problematic as it was a Greenfield
development and the Department of Mineral Resources is reluctant to
approve the project as those sites are not occupied at present.
• Maintaining the effluent within the acceptable standards.
• Approximately 70% of the stands in Christiana as well as the entire
Hoek portion in Bloemhof still use septic tanks.
• The internal reticulation of sanitation in certain areas of Utlwanang
and especially Boitumelong Extension 5 is problematic.
• The road infrastructure was not properly maintained over the past 20
years while most of the roads are gravel roads that need regular
maintenance.
Committee Observations
• The Committee observed that although the municipality was struggling,
there are plans in place to deal with the challenges;
• The Committee undertook that district municipalities should be invited
to participate in oversight visits;
• The Committee expressed its disappointment on the report presented by
the Department of Water and Environmental Affairs (DWEA), the reason
being that a high number of people was exposed to contaminated water
and cholera was killing people; and
• A meeting had to be scheduled urgently to meet the DWEA on the
spillage of sewerage into the Vaal Dam.
Committee Recommendations The Committee recommended that: • Municipalities should use available funding to hire graders, for repairs and maintenance in order to deliver services; • The municipal engineer need to check the sewer network plan to establish whether it was properly designed; • LTLM should review policies on the establishment of an agency as the current ones are not doing what is required of them; • LTLM should also review human resources’ policy with an aim to address the limitations of its workforce (including the possibility of early/voluntary retirement); • DME should continuously interact with the municipalities in order to support them (Section 154 of the Constitution of the Republic of South Africa); and • The Department of Transport, together with the Department of Co- operative Governance and Traditional Affairs, should assist the LTLM with road infrastructure; and • The Department of Water and Environmental Affairs, together with the Department of Co-operative Governance and Traditional Affairs, should, as a matter of urgency, assist the municipalities on their water and sanitation issues.
- Ditsobotla Local Municipality
The Ditsobotla Local Municipality (DLM) was currently under administration in terms of Section 139 of the Municipal Finance Management Act No. 56 of 2003, and the administrator has been appointed since October 2009.
DLM reported that it requested the SIU to investigate fraud with regard to the MIG amounting to approximately R40 million. DLM’s report indicated that a service provider for the evaluation of properties delivered a below- standard project. DLM pointed out that there was a need to conduct an investigation as their IDP was aligned to the PGDS. DLM was also investigating the monthly crash of the information system that was creating difficulty in terms of reporting. DLM reported that, as a result of difficulties in the municipality, the Council did not renew some of the manager’s contracts and that that has hampered service delivery.
Further challenges were as follows: • The estimated water backlog for the municipal area based on households below RDP standard is 18 023 of the total 38 582 households and this requires a capital investment of R133 million. • The rural backlog accounts for 75% of the backlog. • The number of households with sanitation below the RDP standards stands at 10 274 of the total 38 582 households. • Conditional grants are used by the municipality to cover operational expenditure. • The municipality does have tarred roads but with potholes and an amount of R100 million is required for refurbishment of these tarred road. • Boikhutso, Itsoseng and Coligny are rural areas whereby houses were flooded during heavy rains.
Committee Recommendation
The Committee recommends that: • The Department of Water and Environmental Affairs, together with the Department of Co-operative Governance and Traditional Affairs, should investigate challenges in Boikhutso, Itsoseng and Coligny, and to report to the House on how the Department of Water and Environmental Affairs and the Department of Co-operative Governance and Traditional Affairs plan to address these challenges within three months after the adoption of this report by the House.
- Maquassi Hills Local Municipality
Maquassi Hills Local Municipality (MHLM) reported that they were having the following bid committees: specification committee, evaluation committee and an adjudication committee and that these Committees were approved by the Council on 11 August 2005. MHLM’s budget and treasury office were not fully staffed. Furthermore, MHLM reported that it had appointed Sediesy Consulting to assist the municipality with financial reporting (including GRAP implementation).
MHLM reported that illegal connections of water and electricity, and employment of unskilled and unqualified staff led to service delivery and capacity constraints. MHLM’s needs for funding were as follows: R24 million for the mainline sewer connection of Makwassie Town; the annual estimated costs for a multi-year plan for road and storm water amounted to R300 million. The estimated cost for the wasted water treatment plan at Wolmaranstad is R64 million.
Further challenges were reported as follows: • No sufficiently qualified and competent staff within the finance directorate. • Organs of state owe the municipality a sum of R1 094 985. • Compliance with GRAP reporting requirements
Committee Recommendations
The Committee recommended the following: • That the Department of Water and Environmental Affairs should assist the Maquassi Hills Local Municipality on their plans for clean drinking water to the communities of this municipalities; and • That the Department of Public Works should consult the community on the building of a correctional services centre because it was not adding value to the community.
- Ventersdorp Local Municipality
Ventersdorp Local Municipality (VLM) is currently under administration in terms of Section 139 of the Municipal Finance Management Act No. 56 of
- It reported that an electricity substation that had not been functioning for the past two years was a problem. Assistance was sought from ESKOM but nothing came of it. It was reported that the service provider who could not finish a project had now taken the municipality to court, suing it for R2 million. It was further reported that they did not have a single electrician at the municipality but had advertised for the post.
VLM informed the Committee that, for the first time, they were having an Information Technology section that was fully operational through the assistance of the secondees through the Development Bank of Southern Africa’s Siyenzamanje programme. VLM further reported that their major challenge was that of not having vehicles for refuse removal but were previously using a fleet. The company took the municipality’s truck as a deposit. The district municipality committed to assist them but could not do so, and now they entered into an agreement with the City of Matlosana to assist them during weekends when refuse has to be removed. The district municipality budgeted funds for the existing financial year in order to deliver the abovementioned services.
Committee Recommendations The Committee recommends that: • Provincial Treasury and Provincial and National Department of Co- operative Governance and Traditional Affairs should assist the municipality as they are aware that it was struggling; • VLM should table its solar system project to ESKOM as it was involving electricity; • VLM should consider using prepaid electricity system for communities in order to minimise bad debts; • National Treasury, Provincial Treasury, Infrastructure Finance Corporation Limited and the VLM should discuss and resolve the dispute between Infrastructure Finance Corporation Limited and the VLM; and • The VLM should operate on the cheapest model for the removal of refuse.
3.14 City of Matlosana Local Municipality
The City of Matlosana Local Municipality (CMLM) reported that the Mayor was the chief ambassador for the clean audit. CMLM further reported that it was surrounded by a mining area and mining was scaling down and this was increasing there unemployment rate. Furthermore, there was a challenge with the indigent register. CMLM reported that the former Department of Local Government and Housing appointed a service provider to build houses on behalf of the municipality. In addition, there was a court case that was costing the CMLM huge amounts.
Committee Observations
• CMLM could not adequately provide free basic services to communities
that were living in rural areas;
• CMLM had R19 million in a bank account and R88 million in investments
which could have been used for delivering services to the rural
communities;
• CMLM was not paying all their employees a grade 10 level as those paid
at lower levels were taking it to court; and
• CMLM did not inspect their housing project as some of them were in a
process of being demolished.
Committee Recommendation
The Committee recommends that: • CMLM should consider releasing funds that they were invested in bank accounts (investments) and use them for the provision of basic services to the communities, especially those who reside in rural areas (farms).
- Comments by Stakeholders
4.1 MEC of Finance
The Member of Executive Council (MEC) for Finance (North West) reported that Provincial Treasury was looking at enhancing its own organogram in order to assist the struggling municipalities. It was further reported that, with regard to the issue of GRAP 17, Provincial Treasury was designing a plan to assist municipalities, especially with respect to asset management. Furthermore, National Treasury visited municipalities which were under administration in terms of section 139 of the Constitution of the Republic of South Africa, Act No. 108 of 1996.
With regard to the issue of the Moses Kotane Municipality which has an agency called Moses Kotane Development, the administrator had been approached to disband it as it was not able to submit annual reports. The MEC reported that the Province of North West took over the responsibility of housing from municipalities but the actual payment was still done by municipalities. The Province of North West made it clear that municipalities should reduce the use of consultants.
4.2 Auditor General
The Office of Auditor-General (AG) reported that district municipalities were complaining that municipalities were not participating in their IDP processes. The AG further reported that it was experiencing a challenge as some municipalities do not have chief financial officers. Furthermore, most of the finance unit’s officials did not understand and cannot implement the GRAP 17.
A challenge of reports being modified by entities after having been provided by the AG was highlighted. For example, entities tend to change figures that do not correspond with those in the AG’s office. The AG resolved to provide them with an unsigned report for the purpose of not tampering with figures, and following upon this, a signed one is provided as the official annual report to be tabled in the Council.
4.3 South African Local Government Association
The South African Local Government Association (SALGA) reported that it had agreed to a workshop to further capacitate Councilors on their oversight role.
4.4 National Treasury National Treasury (NT) reported that the budgets of most municipalities that made a presentation were unrealistic, even though they had been provided with training on how to prepare their budgets. It was reported that the Mafikeng Local Municipality required assistance from NT, but when the secondees arrived at this municipality, no senior officials, including the CFO, were present. Municipalities were also having a challenge in terms of the reporting standards on section 71 reports. Some of them submitted their reports late and others did not submit at all even though they had been trained together with Provincial Treasury.
NT reported that they were assisting municipalities in developing their by- laws and community development programmes such as drafting of audit plans. They were also capacitating them land evaluation. NT cautioned Municipalities against the high salary rate versus the high vacancy rate as reported by most of them.
NT advised that municipalities should start to monitor their contractors in order to prevent a wasteful expenditure. With regard to the dispute between Ventersdorp Local Municipality and INCA, NT reported that they attempted to intervene, and suggested that the municipality should pay the company what was owed to it.
4.5 Provincial Treasury
Provincial Treasury (PT) reported that they were assisting the struggling municipalities with their finances and also with issues raised by the AG on their annual reports. It further reported that the Mamusa and Tswaing Local Municipalities had an overdraft of R3 million and R1 million, respectively. Provincial Treasury was assisting Naledi Local Municipality with its bank reconciliation, and the municipality was advised to stop the use of a service provider and take over the full finance function.
4.6 ESKOM
ESKOM reported that it appointed a manager to deal with all the issues relating to electricity in the Bojanala District Municipality. It further reported that their system had been upgraded in order to allow customers to buy electricity over the counter in a number of outlets.
ESKOM reported that there was a need for municipalities to complete their indigent registers so that those, who are eligible, receive free basic electricity can do so. Furthermore, indigent registers should be shared with councilors as at times failure to do so create challenges between ESKOM and councillors.
ESKOM further reported that funds amounting to R5 million had been allocated to the Kagisano Local Municipality, but the main challenge lies with the quality of data and infrastructure on the side of the municipality.
4.7 Provincial Department of Local Government and Traditional Affairs
The Provincial Department of Local Government and Traditional Affairs (LGTA) reported that the issue of the North West Housing Co-operation needed to be addressed as it was creating a challenge to municipalities and had been there since the early 1990s.
LGTA reported that there was a need for the turnaround strategies of the Tlokwe and Lekwa-Teemane Local Municipalities to become part of their IDPs. It was reported that they were assisting the Lekwa-Teemane Local Municipality with the refuse removal at Bloemhof but the challenge was that of the district was not on board.
All municipalities in the Bophirima District Municipality were sharing an audit committee. However, sharing of an audit committee was not effective because the Audit Committee, itself, was not fully resourced.
4.8 Department of Co-operative Governance and Traditional Affairs
The Department of Co-operative Governance and Traditional Affairs (CoGTA) reported that all municipalities had been able to spend the Municipal Infrastructure Grant (MIG) except for the Kgetlengrivier Local Municipality. CoGTA reported that the Naledi Local Municipality project was not approved by the Council. CoGTA went onto say that they intended to assist the municipality in addressing this issue.
CoGTA reported that the Ventersdorp Local Municipality had not committed their MIG for the 2009/10 financial year and that they needed to speedily commit before the end of September 2010. It further reported that sector departments should not start projects in municipalities with proper consultation and buy-in because there is a need for a co-coordinated approach, taking into account the IDP.
4.9 Department of Energy
The Department of Energy (DME) reported that it was having four district energy forums in a year and that the Bojanala District Municipality was the most participating one and was showing positive results. There was a need for municipalities to update their data quality as it was incorrect in terms of their backlogs.
DME also reported that it was in a process of waiving their 80% occupancy policy by means of doing it in phases, and were in a process of moving away from the policy.
4.10 Department of Public Works
The Department of Public Works (DPW) reported that some municipalities were not aware of the Expanded Public Works Programme (EPWP) and that the programme could be of assistance to them. Furthermore, the spending by those who are benefiting from EPWP is not an acceptable standard.
DPW further reported that they would be assisting municipalities to rejuvenate some of their townships and that Mamusa Local Municipality has started the process. It also reported that DPW was billed by municipalities for properties that were not belonging to them and, that according to their records they owed them R10 million as compared to R159.9 million as reported.
It was reported that municipalities may approach the DPW when it comes to land being owned by DPW. However, they can only do this when land is required for projects and not for the purpose of selling it to other stakeholders or private companies.
4.11 Provincial Department of Public Works; Roads and Transport
The Department of Public Works, Roads and Transport (DPWRT) reported that it had outstanding liabilities that should have been paid prior to the devolution of the property rates fund to the province. Furthermore, DPWRT indicated that they were paying property rates to municipalities for properties that were owned by municipalities.
The issue of Tlaakamang where schools were burnt was raised. It was alleged that schools were burnt because Government promised to tare roads for them, and the MEC was concerned as no funds were available in the current financial year. Therefore the DPWRT has to examine the availability of funds in order to address the matter. The previous Government made a commitment that was even bigger than the provincial budget and this has created challenges.
4.12 Department of Water and Environmental Affairs
The Department of Water and Environmental Affairs (DWEA) reported that it provides regulatory assistance to municipalities in terms of the Blue Drop certificates that encourages local municipalities to improve their water quality management while empowering consumers with the right to information on what was running out of their taps. DWEA further reported that it assisted with the Green Drop certificate programmes for wastewater care works.
DWEA reported that municipalities were providing a water service that was not within their mandate. They had been doing this for years without having been funded (unfunded mandates). The Bophirima District Municipality had been allocated R27 million for the current financial year for the purpose of reticulating water at the Taung Dam. They were experiencing a challenge with the signing of service level agreements with municipalities, and were in a process of engaging district municipalities.
DWEA was of the view that the Department of Human Settlements should consider providing water tanks when new houses are being built.
The sewer plant for the City of Matlosana had been assessed and R5 million had been allocated for this project. The municipality spent 50 per cent of the amount. A further amount of R1 million had been allocated to the municipality for water purposes.
4.13 Development Bank of Southern Africa
The Development Bank of Southern Africa (DBSA) identified a need for better co-ordination of sector departments in terms of planning and in providing assistance to those municipalities that are still struggling. DBSA committed itself to assist the Lekwa-Teemane Local Municipality in terms of funding and in addressing the challenges of water and sanitation.
The DBSA reported that it was working further with the Provincial Department of Local Government and Traditional Affairs on a water and sanitation programme and that R994 million had been approved for the following municipalities: Maquassi Hills; Dr Ruth Mompati District; Ngaka Modiri Molema District; Madibeng; Kgetlengrivier; Moses Kotane; Moretele; Rustenburg; City of Matlosana; and Ventersdorp.
4.14 Financial and Fiscal Commission
The Financial and Fiscal Commission (FFC) reported that they were participating in the review of the Division of Revenue, the Provincial Equitable Share, and the Local Equitable Share and were moving with speed under the current government. FFC further reported that all the municipalities which were experiencing challenges with unfunded mandates, should forward such mandates to the FFC.
- Key Observations
The Committee observed that there was a lack of leadership with regard to intergovernmental relationships. This was also the case with regard to co- ordination amongst municipalities and sector departments. Some of them requested an increase in the grants allocations while investing huge amounts of money in the money market, and the Committee could not understand the rationale behind these requests for more money while other funds are locked in bank accounts.
Some of the municipalities who met the Committee reported on their challenges with regard to the late submission of the annual reports to the office of the Auditor-General. They reported that this delay was caused by lack of understanding for the implementation of GRAP 17.
The Committee observed that the work of municipalities that were administered in terms of Section 139 of the Municipal Finance Management Act No. 56 of 2003 was satisfactory. The Committee has identified a need for the municipalities to take forward the good work that was being done by the administrators.
The following additional observations were made: • Some municipalities did not have fully functional internal audit committees; • Training is needed with respect to the Municipal Finance Management Act, GRAP reporting requirements and financial systems; • Some municipalities do not submit reports according to the Municipal Finance Management Act; • The capacity of water purification plants does not cope with the demand for clean drinking water; • Most sector departments do not participate in the Integrated Development Plans; • Illegal electricity connections are costing municipalities a huge amount of money; • There is a lack of co-operation from most farm owners to allow delivery of services to communities living on farm lands; • The debt collection rate is poor; • Ratepayers Associations are refusing to pay for municipal rates; • The treasury and budget offices of most municipalities are not fully staffed; • Municipal budgets are unrealistic; • The indigent registers of most municipalities are not up-to-date; • The EPWP II programme is not known to most municipalities; and • There is poor co-ordination between sector departments and municipalities especially when the former is implementing projects in municipalities.
- Further Committee Recommendations
The Select Committee on Finance, after a careful consideration of the service delivery and financial performance of the above-mentioned municipalities in the North West, recommends that the National Council of Provinces considers the following:
• That the Department of Co-operative Governance and Traditional Affairs
and the North West Provincial Treasury should ensure that
municipalities appoint qualified officials;
• That municipal managers should provide quality information to
councilors to enable them to make quality decisions;
• That the Department of Co-operative Governance and Traditional Affairs
and the Provincial Department of Local Government and Traditional
Affairs should develop a plan to further capacitate Councillors in
their oversight role;
• That the Department of Co-operative Governance and Traditional Affairs
and the National Treasury should contribute to the Municipal Turn
around Strategy by developing tools that are going to assist
municipalities to comply with all provisions of the Municipal Finance
Management Act;
• That the Department of Co-operative Governance and Traditional Affairs
and The presidency should develop rules and procedures on how the
provincial and national government departments should fully and
actively participate in the Integrated Development Plans (IDPs) of the
municipalities and ensure that IDPs are aligned to the provincial
Growth and Development Strategy;
• That the Department of Co-operative Governance and Traditional Affairs
and the National Treasury should develop programmes aimed at assisting
municipalities (especially low-capacity municipalities) with the
conversion from the Institute of Municipal Finance Officers to the
Generally Recognised Accounting practice reporting systems;
• That the Department of Co-operative Governance and Traditional Affairs
and the National Treasury should ensure that the plans to establish
internal audits, audit committees, and budget and treasury offices are
included by municipalities in their municipal turnaround strategies;
• That the Department of Water and Environmental Affairs should assist
municipalities in providing communities with clean drinking water and
the removal of refuse at Bloemhof;
• That the Ministers of Correctional Services and Public Works endorse
the cancellation of the planned correctional services centre at
Ditsobotla Local Municipality;
• That municipalities should honour agreements with regards to
interventions;
• That the Department of Co-operative Governance and Traditional
Affairs, in consultation with National and Provincial Treasuries,
should review conditional grants with an aim of improving appropriate
spending on conditional grants;
• That the Department of Co-operative Governance and Traditional
Affairs, National Treasury and other affected shareholders should
strengthen intergovernmental relations, in a co-coordinated way, when
interventions are made in municipalities;
• That National Treasury should examine the supply chain management
matters as most of the municipal tenders are not taken through all the
processes;
• That the Select Committee on Finance, together with the Select
Committee on Co-operative Governance and Traditional Affairs, should
do a joint follow-up visit to the municipalities in the Province of
North West to ascertain progress made by sector departments as per
commitments they made during this oversight visit and that this follow-
up visit be made three months after the adoption of this report.
• That the Department of Cooperative Governance and Traditional Affairs
should closely monitor the support that is given to the municipalities
by national and provincial departments, Eskom, and SALGA in terms of
intergovernmental relations framework and section 154 of the
Constitution;
• That the Select Committee on Finance should engage with the
Chairperson of the National Council of Provinces on the establishment
of a dialogue with the Premier and the political leadership of the
Province of North West with regard to the Committee recommendations
and monitoring of municipalities and provincial departments; and
• That the Department of Co-operative Government and Traditional Affairs
and the Department of Water and Environmental Affairs should engage
with district municipalities on their status as water service
providers. Report to be considered.
-
Report of the Select Committee on Appropriations on the First Quarter Conditional Grants Spending Patterns on Mass Sport and Recreation Participation Programme Grant for the 2010/11 financial year, dated 14 September 2010
The Select Committee on Appropriations, having analysed the first quarter spending patterns by various provincial departments of Arts and Culture in the 2010/11 financial year, reports as follows:
-
Introduction
The Select Committee on Appropriations (the Committee) invited identified provincial departments of Sports and Recreation, who were either under- spending or over-spending on the Mass Sport and Recreation Participation Programme Grant, to come and make a presentation on their first quarter spending in the 2010/11 financial year. The statistics on spending patterns were published by National Treasury in August 2010.
The Committee meetings took place on 25 and 27 August 2010.
- Terms of Reference
The hearings formed part of the Committee’s ongoing interaction with provinces to monitor their spending on conditional grants allocated to them. A framework for each grant sets out, amongst other things, the purpose of the grant, measurable objectives, conditions, allocation criteria, and past performance.
Provinces were requested to make an oral presentation on National School Nutrition Programme Grant and to take into consideration the following: • Data trends in allocations, transfers and actual expenditure of conditional grants of the department; • Assessment of department’s monitoring capacity for the 2009/10 financial year and indicate under/overspending and what capacity constraints that impacted on these outcomes; and • Report whether monthly reports are received from receiving departments and or municipalities, and if not, what the departments are doing in order to ensure compliance with monthly reporting.
The provincial departments of Sport and Recreation of Eastern Cape, Limpopo, Mpumalanga, Northern Cape, North West, Western Cape, Gauteng, Free State, and KwaZulu Natal were identified and invited. All provinces honoured the invitations.
National Treasury was invited to brief the Committee on the first quarter spending of the above-mentioned provincial departments.
- Presentations 3.1 National Treasury
National Treasury presented that the main budget for provinces as at 30 June 2010 was R426 385 million and R123 227 million was received by provinces. However, National Treasury said that the actual amount spent by provinces as at the end of the first quarter was R70 230 million (57 percent of funds received).
National Treasury reported that the general reasons for under-spending were, amongst other things, due to: restructuring of programmes in certain provinces; some federations are not properly registered as business entities or NGOs and this has led to procurement delays and challenges; late signing of business plans and programme implementation agreements (PIAs) in certain provinces; and poor performance on certain outputs, (for example, a low number of athletes absorbed into formal structures and a low number of communities, schools and clubs with access to local sporting facilities).
3.2 The Province of Gauteng
The Province of Gauteng (Sport and Recreation) reported that it received R25.3 million for the first quarter of the 2010/11 financial year and spent R8.7 million as at 30 June 2010. The Province of Gauteng reported that there are three programmes under this grant: Siyadlala Programme, School Sport Mass Participation Programme and Legacy Programme. The Province of Gauteng informed the Committee that the total budget for compensation of contract workers is R4 million.
The Province of Gauteng reported that it under-spent on this grant and the reasons that were given for under-spending were as follows: • That most of the programmes were not implemented due to the FIFA World Cup. • That the Department implemented the integrated Gauteng Provincial Government Holiday Programme and most of the Human Resources were deployed to this activity. Since this took place during June/July months, the expenditure will only reflect during the second quarter. With respect to challenges experienced, the Province of Gauteng reported the following: that events that were hosted in the evening posed risks for personnel and spectators, especially in far out and unlit areas; that reaction to events as they surfaced stretched the capacity of the directorate; that there was lack of staff in some units which hampered the implementation of programmes; that stakeholders did not submit their business plans timeously; that there were change of plans that were not communicated or effectively communicated by relevant stakeholders; and that slow procurement processes hampered the delivery of some services.
With regard to monitoring, the Province of Gauteng reported that monitoring of the programme is lacking. However, the required staff to assist with this directorate is being reworked for submission to the Head of the Department.
3.3 The Province of KwaZulu-Natal
The Province of KwaZulu-Natal (Sport and Recreation) reported that R13.6 million (40 percent) of the first quarter budget of R22.2 million was spent as at 30 June 2010.
With respect to personnel capacity and, monitoring and evaluation of the programme, the Province of KwaZulu-Natal reported that the Mass Participation Programme structure includes: a Manager who is overall responsible for the conditional grant; three Deputy Managers (School Sport Mass Participation Programme, Siyadlala, and Legacy) and four Conditional Grants Administration Officers tasked with the monitoring and evaluation of the programme in each cluster. The Province of KwaZulu-Natal added that the structure allows for ongoing monitoring and evaluation of all aspects of the three sub-programmes from ward to provincial level.
Furthermore, the Province of KwaZulu-Natal reported that the Strategic Management Unit was tasked with the function of monitoring all Mass Participation Programme’s projects to ensure compliance with the business plans. The Province of KwaZulu-Natal added that Finance and Supply Chain Management Units are responsible for ensuring compliance with the grant framework. Regular checks of projects against the operational and business plans are made in order to ensure that fruitless and wasteful, and unauthorized expenditure are avoided. Weekly cash flow reports are presented to all managers with an iam to detect early possible over-/under- spending. The Province of KwaZulu-Natal added on saying that monthly Finance Committee meetings between the Finance Unit and the Mass Participation Programme Unit are scheduled to address grant compliance and spending issues.
With respect to under-spending, the Province of KwaZulu-Natal reported that the reasons for under-spending in the first quarter were as follows: • That the training of 770 contract workers and 648 educators (totalling a budget of R6 165 000) has been rescheduled for the second quarter due to the closure of schools during the World Cup 2010 and the involvement of some volunteers in the World Cup 2010. • That the hub/club festivals were also rescheduled for the third and fourth quarters due to the intensive World Cup 2010 Mass Mobilization Programmes that was prioritized.
3.4 The Province of North West
The Province of North West (Sport and Recreation) reported that it spent R2.5 million out of R8.5 million that was received for the first quarter of the 2100/11 financial year. The Province of North West explained that all of the three sub-programmes (Siyadlala, School sport and Legacy) have under- spent.
The Province of North West reported that the pending appointment of 95 sport co-ordinators, 110 sport assistants, 45 sport development officers and administrators for the Siyadlala, School Sport and Legacy sub- programmes respectively. The appointment of these personnel is pending due to litigation has impacted negatively on procurement of equipment and attire to implement the Siyadlala sub-programme. Furthermore, the pending confirmation of the roll-over of funds is also hampering implementation of activities.
With respect to monitoring, the Province of North West reported that Management and Monitoring Information System is in place to monitor and evaluate projects. The Province of North West further reported that weekly, monthly and quarterly reporting are done timeously and that assists in early detection and allows timely interventions to address identified challenges.
3.5 The Province of Western Cape
The Province of Western Cape (Sport and Recreation) reported that, for the first quarter of 2010/11 financial year, it has spent R7 million (38 percent) out of R18.8 million that were received. The contributing factors to the under-spending were reported as follows: • Most of the funding for the 2010 “fanjols” were only paid out in July 2010. • There were logistical challenges with regard to the implementation of School Sport Mass Participation Centres. • Clubs and federations did not respond timeously with regard to the effective roll-out of the club development programme
The Province of Western Cape reported that the following capacity constraints that are contributing to under-spending: • Long distances to be travelled for meetings, events and, monitoring and evaluation. • Lack of understanding of efficient and effective service delivery by activity coordinators/sport assistants. • Slow response of federations with regard to reporting.
With respect to addressing its challenges, the Province of Western Cape reported that: additional vehicles have been purchased and allocated to the regional offices to alleviate the situation; induction training programme with activity co-ordinators, and regular monthly and quarterly meetings with all personnel, are scheduled; federations have been connected to regional offices and this has improved communication and, reporting lines and timeframes.
3.6 The Province of Free State
The Province of Free State (Sport and Recreation) reported that it spent R2.6 million (9 percent) of the total budget of R28 million as at the end of the first quarter of the 2010/11financial year. The Province of Free State reported that the reason for under-spending was as a result of putting on hold many programmes that were not connected to the 2010 World Cup. Another reason for under-spending that was mentioned by the Province of Free State was that contracts of volunteers had expired and there will be no reappointments of these contractors. The contracts of the other 28 volunteer/contract workers are due to expire in March 2011.
The Province of Free State reported that a new strategy has been proposed to capacitate educators. The Province of Free State informed the Committee that the long term plan is to assist the targeted schools in the programme to compete in the mainstream school sport competitions.
3.7 The Province of Limpopo
The Province of Limpopo (Sport and Recreation) reported that it received R11.3 million for the Mass Sport and Recreation Participation Programme and has spent R12.3 million (109 percent) as at the end of the first quarter of the 2010/11 financial year. The Province of Limpopo explained that over- spending was as a result of the liabilities carried over from the 2009/10 financial year (that is payment of sport equipment which could not be delivered on time by the end of the 2009/10 financial year due to challenges faced at the harbour).
With respect to monitoring, the Province of Limpopo reported that monthly reports are submitted to the National Department of Sport and Recreation through forms 14 and 15 as well as statistics. The Province of Limpopo added that these are quantitative reports which culminate into the submission of quarterly reports that are aligned to the business plan.
3.8 The Province of Northern Cape
The Province of Northern Cape (Sport, Arts and Culture) reported that it received R8.9 million for the first quarter of the 2010/11 financial year and it had spent R4.8 million (54 percent) as at the end of the first quarter of the 2010/11 financial year. The Province of Northern Cape explained that the reason for over-spending on the Legacy programme was due to the “My 2010 Schools World Cup” Programme. The Province of Northern Cape reported that this was part of the 2010 FIFA World Cup Legacy Programme which resulted in additional costs (in the form of accommodation, transport, and procuring of sport attire for the team) that were incurred when sending the Provincial Team to the National Tournament.
The Province of Northern Cape assured the Committee that, to avoid over- spending at the end of the 2010/11 financial year, the planned legacy programmes for the remainder of the year will be scaled down to bring planned spending within budget.
With respect to under-spending in Siyadlala and School Sport Mass Participation programmes (MPP), the Province of Northern Cape reported that all planned first quarter programmes did not take place as a result of the 2010 FIFA World Cup; and these programmes have been rescheduled to take place in the remaining quarters of the 2010/11 financial year.
With respect to monitoring of the grant, the Province of Northern Cape reported that management team has been established comprising of assistant manager for each of the programmes (Siyadlala MPP, School Sport MPP and Legacy) to monitor the overall performance of the grant. The Province of Northern Cape added that support staff includes grant financial officer, programme facilitator and three administrators to monitor implementation of programmes and grant spending.
Furthermore, the Committee was informed that a Project Management Unit is to be established within the Sport & Recreation Directorate by end of November 2010 to: • Respond timeously and assist in the implementation of effective and efficient systems to account and verify, • Ensure the provision of accurate, reliable & quality information on time, • Assist the Province in determining its impact and growth path, and • Achieve excellence and advance social cohesion.
3.9 The Province of Eastern Cape
The Province of Eastern Cape (Sports and Recreation) reported that it projected to spend R19.9 million as at the end of the first quarter of the 2010//11 financial year but only R14 million was spent (71 percent). The Province of Eastern Cape informed the Committee that the reason it did not spend all of the funds that were received was due to the following: a delay in replacement of coordinators; a delay in implementation of stipend increment; and a delay in procurement and payment processes. The Province of Eastern Cape explained that the devolution of procurement/payment function to districts further contributed to under-spending because the Province of Eastern Cape had to follow correct channels and capacitate districts before they can be able to perform this function.
3.10 The Province of Mpumalanga
The Province of Mpumalanga (Sport and Recreation) reported to the Committee that it spent R4.8 million (83 percent) of the R5.7 million that it received in the first quarter of 2010/11 financial year. The Committee was informed that the reason for under-spending was due to Golden Oldies and Regional Indigenous Games that could not be facilitated in the first quarter of the 2010/11 financial year towing to the hosting of the 2010 FIFA World Cup. These games are postponed to the second and third quarters of the 2010 financial year. In addition, slow submission of documentation by service providers which led to the delay in the processing of payment further contributed to under-spending. The Province of Mpumalanga informed the Committee that all programmes that were put on hold will be rolled out the remainder of the 2010/11 financial year and payment of service providers will be prioritized.
The Province of Mpumalanga further reported that the Mass Sport and Recreation Participation has been implemented in three regions (Gert Sibande, Nkangala and Ehlanzeni) and eighteen municipalities of the Province of Limpopo are benefiting from this programme. The Province of Mpumalanga added on saying that 260 schools are participating on the programme and that 536 volunteers are employed through this grant.
With respect to the outputs, the Province of Mpumalanga reported the following: 90 sport administrators, coaches and technical officials were trained; Municipal and Regional Sports Councils were established and assisted to coordinate meetings; Bafana-Bafana Supporters Club was established and will continue to get support in the 2010/11 financial year; two workshops were facilitated to train 800 volunteers on how to run Public Viewing Areas; and a container gym was provided to one school in Kwaggafontein.
With respect to monitoring capacity, the Province of Mpumalanga reported that, at municipal level, Sport and Recreation Officials visit Hubs twice a week to monitor the work of Hubs Coordinators and Cluster Coordinators. At regional level, regions facilitate monthly meetings, which are chaired by Regional Heads, with volunteers to discuss and evaluate implementation of the programme. The Committee was further informed that, at provincial level, monthly reporting meetings are convened with all officials to discuss reports including conditional grant reports; unannounced Hubs visits are conducted by the Director and the Chief Director.
The Province of Mpumalanga added that the filling of the Deputy and Assistant Directors contract posts for Monitoring and Evaluation will be finalized by the end of second quarter of the 2010/11 financial year and the employment of three data capturers will increase the monitoring and evaluation capacity. Furthermore, the Province of Mpumalanga reported that Provincial Treasury continues to monitoring the grant spending. The Province of Mpumalanga concluded that the National Department of Sport and Recreation visits it on quarterly basis to evaluate and monitor the implementation of the Mass Participation Programme Grant.
- General findings
The Committee noted the following: • That the framework of the grant requires provinces to employ contract workers. However, these workers have taken provinces to court demanding permanent employment. As a result of this, provinces cannot contract new volunteers/contract workers until judgement on litigation cases has been given and this causes provinces to under-spend. • That the provinces purchased the 2010 FIFA World Cup tickets and it is not clear whether this was in line with their business plans as required by conditional grant framework. • That the Province of the Free State only spent on activities that had to do with the 2010 FIFA World Cup. Because all other activities were put on hold, the spending outcomes as reported by the province are virtually nothing.
- Recommendations
Having considered the spending patterns on the Mass Sport and Recreation Participation Programme Grant by the afore-mentioned provincial departments of Sport and Recreation, the Select Committee on Appropriations recommends that the National Council of Provinces considers the following:
- That the provinces, in particular the Province of North West, should approach the National Commissioner and the Senior Commissioner of the Commission on Conciliation Mediation and Arbitration and report to them the slow process of finalizing the litigation cases and its effect on service delivery.
- That National Treasury should conduct a thorough review of all Mass Sport and Recreation Participation Programme Grant’s business plans and submit its findings to Parliament within three months after the adoption of this report by the House.
- That the Province of the Free State should intensify and improve on the rolling out of all activities that had been put on hold.
- That Provincial Treasury, in consulation with National Treasury and the Auditor-General, should investigate the appropriateness of the use of public funds by any provincial departments on the 2010 FIFA World Cup and report to Parliament and the National Department of Co- operative Governance and Traditional Affairs within three months after the adoption of this report by the House.
Report to be considered.
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Report of the Select Committee on Appropriations on the oversight visit to Eastern Cape Municipalities from 27-29 July 2010, 14 September 2010.
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Introduction
The Select Committee on Appropriations (the Committee) was established in terms of section 4(3) of the Money Bills Amendment Procedure and Related Matters Act, No 9 of 2009. In terms of section 4(4) of this Act, the Committee has the powers and functions conferred to it by the Constitution, legislation, the standing rules or a resolution of a House, including considering and reporting on: a) spending issues; b) amendments to the Division of Revenue Bill, the Appropriation Bill, Supplementary Appropriations Bill and Adjustment Appropriations Bill; c) recommendations of the Financial and Fiscal Commission, including those referred to in the Intergovernmental Fiscal Relations Act, No. 97 of 1997; d) reports on actual expenditure published by the National Treasury; and e) Any other related matter set out in this Act.
Furthermore, the mandate of the Select Committee on Appropriations (henceforth referred to as the Committee) encompasses the Committee’s functions to legislate, conduct oversight of the Executive; promote public participation, facilitate international agreements and review matters of public interest in relation to National Treasury and its entities, and the South African Reserve Bank.
1.1 Delegation The oversight visit took place from 27-29 July 2010. Meetings were held at Queenstown (Queens Casino Hotel); Mthatha (Savoy Hotel); and East London (Premier Hotel Regent) in the Eastern Cape.
The delegation consisted of: Hon. Mr TA Chaane (ANC) (Chairperson of the Committee; Hon. Mr CJ de Beer (ANC); Hon. Ms TM Memela (ANC); Hon. Mr SD Montsitsi (ANC); Hon. Mr BL Mashile (ANC); Hon. Mr WM Makhubela (COPE); and Hon. Mr A Lees (DA);
Eastern Cape’s Provincial Legislature Members Hon. Mr S. Gqobana (MEC Local Government and Traditional Affairs); Hon. Mr M. Matomela (Chairperson PC on Finance); Hon. Ms D. Komose (Chairperson PC on Public Works); Hon. Ms M. Qhoboshiyane (Chairperson PC on Local Government and Traditional Affairs); and Hon. Ms N Ponco (PC on Finance)
The parliamentary officials that accompanied the delegation are: Mr. L Nodada (Committee Secretary), Mr. M Tau (Researcher), and Mr. S Goba (Committee Assistant).
1.2 Terms of reference The visit formed part of the Committee’s ongoing interaction with municipalities to monitor collaboration and coordination pertaining to the provision of municipal services and support given to municipalities by provincial and national departments. The municipalities in Eastern Cape that were identified for the visit are: Joe Gqabi District Municipality, Maletswai Local Municipality; Inkwanca Local Municipality; Nkonkobe Local Municipality; Mbhashe Local Municipality; Ingquza Hill Local Municipality; Engcobo Local Municipality; Emalahleni Local Municipality; Makana Local Municipality; Nxuba Local Municipality, Chris Hani District Municipality; and Ngqushwa Local Municipality.
The stakeholders (including national and provincial departments) that accompanied the Committee on this visit are: National Department of Cooperative Governance, Eastern Cape’s Provincial Treasury, South African Local Government Association, Department of Energy, Financial and Fiscal Commission, Provincial Department of Public Works, Provincial Department of Cooperative Governance and Traditional Affairs, National Department of Water and Environmental Affairs, National Treasury, Auditor General, Development Bank of Southern Africa, and ESKOM.
1.3 Purpose of the Visit The purpose of the oversight visit was to engage with the above-mentioned municipalities along with national and provincial departments on the following areas: • Development and implementation of municipal budgets; • Municipalities’ compliance with the Municipal Finance Management Act, Number 56 of 2003; • The spending and performance of the municipalities with regards to conditional grants; • The municipalities’ relations and collaboration with various national and provincial departments and entities; • Capacity constraints of the municipalities (if any); • The extent to which municipal services are provided; and • The alignment of municipalities’ Integrated Development Programmes with the Provincial Growth and Development Strategy.
- Auditor General’s overall presentation on identified Municipalities
The Office of the Auditor General (AG) briefed the Committee on the 2009/10 audit outcomes for the financial year2009/10 of the selected municipalities in Eastern Cape. The AG reported that the audit opinions of five municipalities received disclaimers. These municipalities included: Chris Hani District Municipality; Maletswai Local Municipality; Mbhashe Local Municipality; Engcobo Local Municipality; Nkonkobe Local Municipality; Ngqushwa Local Municipality. The AG further reported that five municipalities received an adverse audit opinions. These municipalities included: Emalahleni Local Municipality; Joe Gqabi District Municipality; Ingquza Local Municipality; and Makana Local Municipality. Lastly, AG reported that two municipalities received qualified audit opinions reports. These are Inkwanca Local Municipality and Nxuba Local Municipality.
The AG informed the Committees that key issues, on leadership, that need attention and contributed to these audit opinion are: instability and lack of commitment in administrative leadership in municipalities; the correct style of leadership (attitude towards the control environment) is not displayed; and, in most municipalities, action plans were neither complied not followed through and monitored in order to address financial challenges. With regard to financial management, AG reported that there was lack of knowledge and understanding of General Recognized Accounting Practices (GRAP); monthly management information was neither credible nor prepared; accounting functions such as the reconciliation of key control accounts were not performed. With regard to governance, the AG reported that the Audit and Internal Audit Committees were not effective; risk assessment and fraud prevention plans were not in place nor adhered to; and there was insufficient monthly oversight by the councils.
The AG reported that their Eastern Cape’s Business Unit has embarked on a door to door visit of all municipalities to roll-out guidance on the responsibility of the mayors with regard to oversight of the day-to-day administration of the municipality. The AG said that they are going to have monthly interactions with mayor and municipal management. This will enhance communication of key controls and the monitoring thereof on a quarterly basis by means of walk-throughs. Moreover, follow up visits to determine the progress made and current status where cost effectiveness is not conducive for monthly visits, the initiative will be monitored telephonically or via e-mail. In this case, two monthly visits will be undertaken. Furthermore, AG said it intends to have interactions with Provincial Executive, Local Government and Provincial Treasury. This interaction will result in setting up a sustainable forum where actions by role-players can be shared and synchronized to ensure maximum effectiveness.
- Municipal Performances and Analysis
- Maletswai Local Municipality The MLM reported that for the financial year 2008/09 it received a disclaimer audit opinion. MLM reported that reasons for receiving a disclaimer include non-compliance with GRAP; information not supplied to auditors on time; valuation roll not accurate and complete.
The MLM reported 34 per cent of its operating revenue is for salaries. With regard to the performance of conditional grants, the MLM reported that it is doing well in terms of complying with the grant framework as stipulated in the Division of Revenue Act (DORA). The Committee was informed that Development Bank of Southern Africa (DBSA) has seconded an official who is assisting the MLM to provide services at a faster rate.
With respect to compliance with the Municipal Finance Management Act, the MLM reported that the supply chain management policy was developed and adopted in 2006 and is reviewed annually together with all other budget- related policies. The MLM informed the Committee that its bid committees namely: bid evaluation and bid adjudication are functional and members of these committees were trained except for a newly appointed Manager for Community Services. The MLM reported that a Budget and Treasury Office (BTO) is not established as yet, however the Financial Management Section currently performs the functions of the Budget and Treasury Office.
The MLM added that internal audit function was outsourced to Price Waterhouse and Coopers (PWC) as from 2008/09 financial year. Their contract expires in 2011. The municipality claimed that an intern is being trained to take over from PWC as soon as the contract lapses between MLM and PWC expires.
The MLM informed the Committee that in the 2008/09 financial year, the annual financial statements were submitted on time. The MLM further reported that monthly budget statements (section 71 reports of the Municipal Finance Management Act (MFMA) were not submitted on prescribed time-frame to the National Treasury due to the introduction of a new financial management system introduced during the 2008/09 financial year. However, according to the MLM, this matter was attended to and resolved.
Findings After deliberations with the Maletswai Local Municipality, the Committee observed the following: • The Maletswai Local Municipality does not have a Budget and Treasury Office and therefore it is in violating of Section 10 of the Municipal Management Act No. 56 of 2003. • The MLM is not GRAP compliant hence they received a disclaimer audit opinion of the Auditor General. • The figures presented by the MLM were not reliable since they did not tally with those in possession of National Treasury. • There are regular sewer spillages into the Orange River due to ageing infrastructure. • Even though the MLM claim to have eradicated the bucket system in 2007, people of Jamestown are still using the bucket system as a sanitary relief. • There is a huge housing backlog and basic services that should be provided to the indigents.
The Committee recommends the following: • The MLM should establish the Budget and Treasury Office as a matter of Urgency. • The MLM should ensure that it complies with General Recognized Accounting Practices in the 2011/2012 financial year. • The figures submitted by the MLM to the Provincial and National Treasury should at all times, be verified and accurate. • The Department of Water and Environmental Affairs should monitor and put stricter measures that seek to avoid water contamination. • The MLM should ensure that the bucket system is eradicated and a better sanitation system should be put in place. • As a matter of urgency, the MLM should strive to address the housing backlog and provide basic service to the poor.
3.2 The Inkwanca Local Municipality The Inkwanca Local Municipality (ILM) reported that, for the 2009/10 financial year its total capital budget was R6 million and the operating budget was R27 million. Personnel costs for the same financial year were R13.2 million. The ILM reported that it spent all funds allocated through grants except for a variance of R675 215 for the financial management grant. However, the ILM said that the funds are committed but are yet to be claimed. The ILM presented that a Budget and Treasury Office (BTO) exists and is headed by the Chief Financial Office who is supported by three accountants who are responsible for revenue, expenditure, budget and reporting. The ILM reported that some of the section 71 reports of the MFMA were submitted on time, however others were submitted after the due date. The ILM reported that it is 100 per cent capital grant dependant and 73 per cent operational grant dependant. The ILM further reported that 49 per cent of the operational budget went to salaries.
The ILM added that it complies with MFMA, and as a result, it has established a functioning Internal Audit and Audit Committee. The ILM said the Audit Committee, shared services, was established 2008/09 financial year 2008/09. The shared services are utilised with other two local municipalities, Inxuba Yethemba and Tsolwana, with clear terms of reference. The ILM reported that the 2008/09 annual report was submitted on time.
With respect to service delivery, the ILM reported that the bucket sanitary system was eradicated and all households in the municipality have water borne toilets. However, the households in farms have not benefited thus far.
With respect to challenges, the ILM reported that it is struggling to employ a qualified electrical engineer. To rectify the situation, the municipality said that it has offered a student, who studies at Vaal University of Technology, a bursary. That student was said to be at third- year of study. The ILM also said that the BTO officials are inexperienced because they have less than three years experience.
Findings • The ILM is unable to produce financial statements and, as a result, it relies on consultants. • The ILM compensation of employee’s budget is 49 percent of the total operating budget. This amount is high.
The Committee recommends that: • The IML should utilize the FMG to train the current CFO and all officials in the BTO as they cannot produce financial statements. Furthermore, the ILM should refrain from utilizing consultants because they add no value as the municipality continues to receive negative audit opinion. • The ILM should comply with the acceptable salary percentage guidelines as stipulated in MFMA.
3.3 The Nkonkobe Local Municipality The Nkonkobe Local Municipality (NLM) reported that it received a disclaimer for three consecutive years. As a result of this, the NLM negotiated with with the University of Fort Hare to have a service level agreement, the negotiations are at an advance stage. The NLM further reported that corruption and fraud in the municipality continue to be big problem. The Committee was informed that two previous Municipal Managers have been charged due to allegations of corruption and fraud. The NLM said it is still trying to recover funds lost due to mismanagement.
The NLM reported that all grant funds were spent on time. The NLM further reported that it had established a development agency, Nkonkobe Economic Development Agency (NEDA), in 2002 which is responsible for the implementation of municipal projects. This agency is 100 percent financed by Industrial Development Corporation. However, this agency has never been audited because its Board of Directors refuses to be accountable to the NLM, therefore they are considering closing it down. The NLM added that its Integrated Development Plan (IDP) is aligned with the Provincial Growth Development Strategy (PGDS) and it aims to address the six priorities of the PGDS which are poverty eradication; Agrarian transformation and food security; infrastructure; manufacturing diversification and tourism; human resource development; and public sector and institutional transformation.
With respect to the establishment of the Budget and Treasury Office, the NLM reported that the office exists but it is not fully capacitated. With respect to the reported the submission of Annual Financial Statements (AFS), the NLM reported that the AFS for 2008/09 financial year were submitted late due to unskilled personnel (Chief Financial Officer, in particular) and lack of understanding of the financial system.
The NLM admitted that it did not submit the section 71 reports of the MFMA for 2009/10 financial year. Moreover, the NLM reported that Internal Audit and Audit Committee were established and are functional. The NLM acknowledged that it is struggling to provide services to the people. The NLM explained that there is a backlog in providing roads; construction of community halls, houses, storm water; electrifying its jurisdiction and collecting refuse. The NLM added that an amount of R12.2 million has been set aside for electrifying an area called Alice Golf Course. The NLM further reported that the appointed contractor will be introduced during the first week of August 2010.
The NLM further admitted that it did not spend 100 percent budget for indigent households. With respect to achievements, the NLM reported that it spent all funds that were transferred for the Municipal Infrastructural Grant; Municipal Finance Management Grants; and Municipal Systems Improvement Grants.
Furthermore, the NLM informed the Committee that it is experiencing some challenges. These are that the municipality has a low revenue base due to its rural nature; it is struggling to attract and retain skilled technical and financial personnel; the road Infrastructure construction and maintenance is a challenge due to the shortage of engineers; there is no full participation of sector departments in IDP processes; there are limited funds for implementing infrastructural projects; the municipality is not GRAP compliant and fails to submit Section 71 reports of the MFMA.
Findings • Even though the NLM has an adopted Supply Chain Management Policy, it is not fully implemented due to staff shortage which results in poor functioning of the bid committee. • The NLM is affected by poor financial management and violation of legislations, and as a result reports are not submitted on time.
The Committee recommends that: • The municipality should submit to Provincial Department of Cooperative Governance and Traditional Affairs a turn around strategy within three months after the adoption of this report by the House. • The Provincial Government, working together with South African Local Government Association, should intervene by seconding highly skilled officials to this municipality.
3.4 The Mbhashe Local Municipality The Mbhashe Local Municipality (MBLM) reported that it has collected 93 percent of the planned revenue collection. The MBLM further reported that it is 80 percent grant dependent; 30 percent of its operating budget was spent on salaries; 68 percent was spent on repairs and maintenance; the total capital grant in comparison to the total capital budget is 91 percent. MBLM reported that, through Integrated National Electrification Programme Grant (INEP), 38 villages (3512 household) are to be electrified and a sum of R10 million has been set aside. The MBLM said that electrification project is divided into phases, the first phase targets 700 households, of these 500 household have been give access to electricity and the remaining 200 are to be given access to electricity by 07 August 2010. Futhermore, the MBLM said that the Municipal Infrastructure Grant funds have been spent but there is a variance of R104 054 872.47; the Municipal Systems Improvement Grant has a variance of R290 495.00; and the Financial Management Grant has a variance of R34 571 which is committed to travelling and accommodation.
With respect to backlogs, the MBLM reported that Vision 2012 of Electricity Universal Access and 2014 of Passable and Trafficable Road Network may not be achieved. The MBLM argued that the latter is mainly due to slow process in appointing a service provider to quantify access roads backlog. Furthermore, the MBLM reported that it has capacity constraints because it is unable to attract people with requisite skills. The MBLM further reported that competing with well-established municipalities for resources (namely: plant hire, service providers etc) is a huge challenge because funding is not enough. With regard to electricity, the MBLM said that it does not have a dedicated unit for electricity and electrification projects are outsourced and not monitored.
With respect to compliance with the MFMA, the MBLM reported that supply chain management policy is in place and is reviewed annually. The MBLM added that all three bid committee and the BTO are in place; and monthly reports and annual financial statements were submitted on time to the relevant offices. The MBLM further reported that audit and internal audit committees are in place.
With respect to intergovernmental relations, the MBLM reported that sector departments are involved in the IDP processes and they participate. However, the MBLM said that there is inconsistency in attendance during planning meetings; departments delegate junior officers who loose track of decisions taken and their implementation. Furthermore, the MBLM highlighted that, through its various departments, it liaises directly with the government agencies such as Development Bank of Southern Africa (DBSA), Eastern Cape Development Cooperation (ECDC), National Development Agency (NDA), Small Enterprise Development Agency (SEDA), and ESKOM.
Findings • The Committee observed that government departments (Public Works; Department of Justice and Constitutional Development; and Department of Basic Education) owe the MBLM payments for rates.
• The Mbhashe Local Municipality received a disclaimer opinion due to
the fact
that financial records were not in place.
The Committee recommends that: • The Departments of Public Works, Justice and Constitutional Development, and Basic Education and other government departments should make every effort to ensure that they pay all monies due to all municipalities, starting with the Mbhashe Local municipality within two months after the adoption of this report by the house.
• The MLM should develop and implement a plan to improve its audit
outcomes and comply with the MFMA. A turn around strategy should be
compiled and submitted in parliament within two months after the
adoption of this report by the house.
3.5 The Joe Gqabi District Municipality The Joe Gqabi District Municipality (JGDM) reported that all grants funds were spent and there were no deviations to be reported. With respect to budget performance, the JGDM reported that its total operating budget of R 322 million was under-spent by 17.46 percent. The JGDM added that with respect to planned revenue collection it underperformed because it collected 24 percent less than its budgeted revenue collection. The municipality further reported that it is 86 percent capital grant dependent; it is 87 percent operational grant dependent; and 27 percent of the operational budget was used to pay for salaries. The JGDM further reported that 7.7 per cent was spent on repairs and maintenance.
With respect to compliance with the MFMA, the JGDM reported that its supply chain management policy has been revised and was still to be approved by the Council. The JGDM further reported that the three bid committees (Bid Specification, Bid Evaluation, and Bid Adjudication), as required by the MFMA and stipulated in the Supply Chain Regulations, are properly established. The JGDM explained that members of these three bid committees were appointed by the municipal manager. The JGDM reported that the BTO was established in May 2010 and it by the Chief Financial Officer and has three sections namely: Financial Accounting, Income and Expenditure, and System Administration. The annual financial statements of the JGDM were submitted to the Auditor-General.
With respect to service delivery and capacity constraints, the JGDM reported that the costs of eradicating water and sanitation backlogs are R445 million and R247 million, respectively. The JGDM added that, in light of limited and insufficient funds to eradicate backlogs, the targets are always shifted to later years. The JGDM further reported that roads are in poor conditions and they require huge maintenance costs. The JGDM reported that the commercial farming community as well as the urban areas, have access to access to electricity, however rural arrears have limited access to electricity. The JGDM reported that challenges persist in as far as collection and disposal of waste is concerned. The JGDM reported that it has managed to maintain good spending patterns on the Municipal Infrastructure Grant (MIG). The JGDM added that MIG grant has helped it to address backlogs on water and sanitation over previous 6 years.
With respect to audit issues, the JGDM reported that the internal audit function was outsourced and the procurement procedures were followed. The JGDM added that the audit and oversight committees were established and are operational The JGDM assured the committee that an Audit Action Plan exists and was approved by the Council in January 2010 in response to the previous audit report. The JGDM added that weekly monitoring of the action plan was done by the internal audit with the intention to unblock delays, ensure focus on audit improvement and, monitor performance of staff and service providers.
The JGDM reported that intergovernmental relations framework was developed and adopted by the Council. Furthermore, the JGDM said that the Public Participation Strategy and Communication Strategy were both adopted in October 2008 and reviewed in 2009. These strategies encourage that community outreached programmes be held twice per financial year; and that the Integrated Development plan includes budget community outreach programmes. The JGDM assured the Committee that stakeholders fully participated in the IDP process and that its IDP is aligned with PGDP.
Findings • Reports that are required in terms of the MFMA were submitted later than the prescribed time.
• Even though the internal audit functions of the municipality were
performed by a service provider, the audit outcomes have not improved.
• During the audit process senior managers do not make themselves
available to provide information to Auditor-General staff as a result
the JGDM has been receiving negative audit opinions for the past two
years.
• The JGDM performs functions that are meant for provincial sphere of
governance, like procurement of mobile clinics.
The Committee recommends that: • The JGDM should refrain from violating the MFMA and submit reports on time. The JGDM should submit to the Provincial Department of Cooperative Governance a turn around strategy that seeks to improve its audit outcomes within three after the adoption of this report by the House.
• The JGDM should utilise the Municipal Systems Improvement Grant and
capacitate its own employees in the internal audit unit and refrain
from out
sourcing that function because doing so does not improve the audit
outcomes.
• The Council should ensure managers are always available during the
auditing process.
• The JGDM should only perform functions meant for the local sphere of
government unless a service level agreement is in place with a
provincial or national government.
3.6 The Ingquza Hill Local Municipality The Ingquza Hill Local Municipality (IHLM) reported that it performed very well in terms of spending on the conditional grants. The IHLM submitted that all grants funds (Financial Management Grant, Municipal Systems Improvement Grant, and Municipal Infrastructure Grant) were spent in full. However, the IHLM added that the Tshoya Electrification Programme Phase 1 is completed but Phase 2 of this programme is not complete. The IHLM reported that FMG grant funds have been utilised to employ four interns; train supply chain management employees; and convent to GRAP reporting system.
With respect to intergovernmental relations, the IHLM reported that good relations are in place. The IHLM added that DBSA has supported it financially and by seconding personnel (Engineer and Planner); Department of Energy through Eskom is electrifying Tshonya (R20 million). The IHLM further reported that Department of Rural Development and Agriculture has implemented various projects; and that Provincial COGTA has assisted with General Valuation that amounted to R 700 000.00. The IHLM added that its IDP is aligned with the PDGP.
With respect to service delivery the IHLM’s focus is on refuse removal and roads. The IHLM informed the Committee that refuse removal, which is done daily, is focused on peri-urban areas and performance regarding this item is good. The IHLM further reported that the challenge is the non- availability of suitable or legal land-fill sites. The current land-fill sites are operating illegally and the IHLM is in the process of identifying suitable land for land-fill sites. The other constraint reported by the IHLM is that the refuse collection unit is driven by technical people who have no environmental management background. With respect to roads, the IHLM reported that the construction of 9 roads that has costed IHLM R22.5 million is completed and was financed through MIG funding. The Committee was told that the extent of backlogs is high that the impact made by the construction of these new roads is minimal. Most of the roads are not maintained due to lack of funding.
With regard to compliance with the IHLM reported that the supply chain management policy was developed and adopted by the Council in July 2007. The Council monitors the policy and exercises their oversight role through monthly, quarterly, half yearly and annual reports. The IHLM added that the bid committee and BTO were established in terms of the MFMA. The latter is headed by the CFO. The IHLM reported that the annual financial statement and Section 71 reports of the MFMA had been submitted to the relevant offices. The IHLM added that the Audit Committee (AC) has been established and is fully functional. The IHLM submitted that the Internal Audit function is shared the with O.R. Tambo District Municipality.
The IHLM reported that 72 percent of its operational expenditure budget was used to pay for salaries. 2 percent was used to pay for repairs and maintenance and 26 percent was spent on general expenditure. The IHLM concluded that it needs financial support because its revenue base is low. The IHLM added that it has developed partnerships with international partners and it was assisted by COGTA and the O.R. Tambo District Municipality. The municipality further reported that much focus would be given to improve IDP participation and to contribute to Operation Clean Audit Campaign of COGTA.
Findings • The IHLM’s budget for the compensation of employees was 42 percent which was high. • The IHLM is not GRAP compliant.
The Committee recommends that: • The IHLM should prioritize its operational capital budget because the poor are being compromised at the expense of compensation of employees. • The DBSA, National Treasury, and Provincial Treasury should speed-up support to IHLM until such time the IHLM can be able to implement GRAP.
3.7 The Engcobo Local Municipality The Engcobo Local Municipality (ELM) reported that its budget has grown by 5.7 percent. The ELM said that the salary budget has increased by 10 percent. The ELM reported that it is 98 percent capital grant dependent and 89 percent operational grant dependent. The ELM further reported that 42 percent of its operational budget was used to pay for salaries. On grant spending the ELM reported that all grants were 100 percent spent.
With respect to internal controls, the ELM reported that the internal control unit was newly developed and the staff members to be placed on the unit were being trained on internal control for the 2010/11 financial year. The ELM added that a fraud prevention policy is yet to be developed. As a result of an audit report which is a disclaimer of opinion, a service provider has been appointed to assist in it. The ELM further reported that a complete audit action plan has been adopted by the Council and is due to go to the audit committee; the audit committee was established in 2007; the audit unit had been established comprising of a 3 member committee shared with the Chris Hani District Municipality. The ELM added that the audit committee had once addressed the council.
The ELM reported that, with respect to revenue collection, a new valuation roll has been fully implemented. The ELM revealed government debtors with balances over 120 days as follows: Department of Agriculture for rates totaling R286 875.33 and for services is R47 674.79; Department of Public Works rates totaling R23 620.00 and for services R5 157.14. The ELM reported that business and residents with balances over 120 days as follows: Residents are rates R1 086 536.00 and for services is R1 319 575.00; and business rates are R661 445.00 and for services is R810 582.50. The ELM said the total amount owed by debtors was R4.5 million.
The ELM further reported that, for the purposes of giving support to indigents, indigent policy and indigent register, which is reviewed quarterly, are in place. The ELM added that 107 beneficiaries are given to 6 kilolitres of free water and waterborne sanitation monthly. Furthermore, 596 beneficiaries are given access to free 50 kilowatts of electricity.
With respect to compliance with the MFMA, the ELM reported that the supply chain policy exists; all bid committees with capacitated and competent members; the BTO has not be establish due to staff shortages and capacity constraints in the finance department; the 2008/09 AFS was submitted 30 days later than the legislated time; the ELM is not fully GRAP compliance; section 71 reports of the MFMA were submitted latter that expected. The ELM further reported that it has good relations with sector departments and its IDP is aligned with the PGDP.
With respect to service delivery and capacity constraints, the ELM reported that refuse is collected from all businesses, residents and hospitals. The ELM added that it is looking into upgrading its landfill site and has a permit. However, the ELM reported that there are some constraints in relation to refuse removal. These include promulgation of by-laws; ineffective law enforcement and negative attitude of the community towards change. The ELM further reported that 11 540 households have been given access to electricity and an additional 1647 households are awaiting Eskom final inspection before being given access to electricity. In addition, the ELM reported that 1977 households have infrastructure and are to be given access to electricity in the 2010/11 financial year. With respect to water services and sanitation, the ELM reported that it is a water services provider. With respect to sanitation, the ELM reported that 7 645 households have sanitation; 27 215 households have no sanitation; 19 625 households have no RDP standard water and 15 595 households have Reconstruction and Development Programme (RDP) standard water.
With respect to roads, the ELM reported that it has huge backlogs on access roads and road classification has not yet been completed. The ELM added that in the 2009/10 financial year, a total of R15 million was spent on access roads and, for 2010/11 financial year the ELM has budgeted R17.2 million for transport infrastructure. The ELM reported that there are four housing projects. The ELM reported that it does not have a distribution licence for rural electrification but it has qualified professional employees.
Findings • The Committee observed that grant spending is reported to be 100 percent spent, and at the same time huge backlogs were reported. The Committee noted this discrepancy. • The ELM is not GRAP compliance and that is a violation of the MFMA. Moreover, the BTO is not functional. The Committee recommends that: • The ELM should try to address the highlighted backlogs and further strengthen its Public Participation Strategy. • The Committee recommends that ELM should ensure that it is GRAP compliant as a matter of urgency and further capacitate the TBO. • The Departments of Public Works and Agriculture, and other government departments should pay in full all monies that they owe to all municipalities for rates and services rendered. These departments should pay these accounts in full within two months after the adoption of this report by the House.
3.8 The Makana Local Municipality The Makana Local Municipality (MALM) reported that a total of R50.1 million was received in the form of grants but only R44.8 million was spent. These funds were for FMG, MSIG, MIG and Neighbourhood Development Partnership Grant. With respect to participation of sector departments in IDP process, the MALM reported that an integrated IDP Process Plan and Budget Time Table were drawn annually, and thereafter, a comprehensive public participation programme take place under the leadership of the Executive Mayor. The MALM added that in strengthening intergovernmental collaboration, it has planned to develop an Intergovernmental Relations Framework and establish a Makana Intergovernmental Relations Forum in the 2010/11 financial year.
With respect to compliance with the MFMA, the MALM reported that the Council approved Supply Chain Management Policy and the three Bid Committees were established. Furthermore, the MALM reported that BTO exists; the 2009/10 AFS was in the process of being finalised; Internal Audits and Audit Committee exist but are share services with the Cacadu District Municipality (CDM). The MLM further reported that the alignment of the Budget to the PGDS is currently undertaken through the CDM.
With respect to service delivery and capacity constraints, the MALM reported that 80 of percent households have access to electricity; however, MALM, old infrastructure leading to electrical outages and losses. With regards to water, the MALM said that 98 percent of Makana households have access to basic water service and 85 percent of households are living in informal areas have access to basic water up to RDP standard with individual water connections. With regard to sanitation the MALM reported that 70 percent of households have access to basic sanitation toilets and the bucket system has been eradicated in all formal areas. The MALM added that there is a challenge with regard to the provision of sanitation in rural areas. The MALM reported that refuse removal services are provided to 15 178 properties out of 16 162 properties. The MALM added that approximately 1 999 households (mainly in informal areas) receive communal waste collection services. However, the MLM reported that it has old equipment/vehicles that are used to offer this service. With respect to roads, the MALM reported that 170 kilometres of roads are gravel and there is a programme of tarring major taxi routes which is underway (namely: Project Faki’Tar).
With regard to budget performance, the MALM reported that it has spent 100 percent of its total budget. The Committee was told that 38 percent of the total budget was spent on salaries and 6 percent was spent on repairs and maintenance. The MALM further reported that it is 82 percent dependent on capital grants and 20 percent dependent on operational grants.
Findings • The MALM does not have qualified personnel in the electricity department. • Even thought the MALM claimed that it has eradicated the bucket system, this only refers to urban areas and rural areas are neglected.
The Committee recommends that: • The MALM should ensure that professional electricians are employed as a matter of urgency. • The MALM should strive to provide services to people who are either in rural communities and farming lands.
3.9 The Emalahleni Local Municipality The Emalahleni Local Municipality (EMLM) reported that it has spent 96 percent of its budget. The EMLM further reported that its funding of capital is mainly through grants. With respect to revenue collection, the EMLM, said it is collecting less than 30 percent of its own revenue. The EMLM further reported that 27.5 percent of it operating budget was spent on repairs and maintenance.
With respect to the MFMA compliance, the EMLM reported that the supply chain management policy was implemented in 2007 and is reviewed every year and approved by the Council. The EMLM added that all three bid committees are established. Furthermore, the Committee was informed that the BTO was established in 2009 and is supervised by the CFO. The EMLM added that the AFS was submitted on time. However, the EMLM informed the Committee that there are two outstanding annual reports to be submitted to the National Treasury. The EMLM further reported that an Internal Audit (IA) exists; Audit Committee services are shared services with the Lukhanji and Sakhisizwe Municipalities. The EMLM said that the annual report was tabled before the Council and adopted. Furthermore, the ELM reported that all grant funds were spent accordingly.
With respect to service delivery and capacity, the EMLM reported that the plan to address electrification backlog and maintenance of infrastructure in rural areas is in good progress (phase 8). However, the EMLM, has limited resources to accelerate the progress of this project. The EMLM added that a bilateral meeting with all stakeholders (EMLM, the Department of Mineral and Energy, Eskom and communities) involved was convened to address the service delivery backlogs; and to further strengthen communication between different role players. With respect to provision of water and sanitation, the EMLM reported that the water services function was transferred to itself in August 2009 with limited resources. The EMLM added that it is suppose to provide water and sanitation services to 32 314 households but only 29 352 (81 percent) households have access to water; and only 13 108 (41 percent) of these households benefit from sanitation services.
The EMLM reported that it has experienced some capacity constraints and these include: old infrastructure in Dordrecht and Indwe Water treatment works; shortage of staff like water treatment plant operators and plumbers and; drying up of Dordrecht Anderson dam due to draught. However, the EMLM assured the Committee that a number of interventions have been put in place, namely: the Chris Hani District Municipality (CHDM) appointed an official responsible for water services; water trucks were purchased by the CHDM; old infrastructure has been refurbished; a tender has been advertised for a service provider to drill new bore holes; the organogram will be populated; and a three-year plan to address all water and sanitation backlogs has been drafted.
With respect to roads, the EMLM reported that the classification of roads is a challenge because there are no clear lines of responsibilities between district and municipal roads. The EMLM added that the majority of municipal roads are in a poor condition since 2007 disaster. The EMLM claimed that, due to budget constraints and shortage of big machinery, it is unable to maintain all roads. The EMLM added that the only source of funding for capital projects is MIG and it is not enough to address road infrastructure backlog. Furthermore, the EMLM reported that refuse removal is only done in urban areas due to shortage of staff, vehicles, and as a result, rural communities are using illegal ways of disposing refuse.
Finding • The EMLM provides refuse collection in urban areas only and this force rural community to use illegal ways of disposing. This may expose people to health risk factors.
The Committee recommends that: • The EMLM should refrain from providing services to selected areas under its jurisdiction. Services should be provided to all people regardless of where they reside including those living in rural areas.
3.10 The Nxuba Local Municipality The Nxuba Local Municipality (NXLM) reported to the Committee that it has appointed technical staff to increase its capacity and moreover, the DBSA has deployed a technical expertise to increase the capacity within the NXLM. Furthermore, the NXLM reported that 5 finance interns have been appointed to capacitate the BTO. With respect to intergovernmental relations, the NXLM reported that it has good relations with all sector departments and parastatals. However, the NXLM reported that participation by sector departments in the IDP is not as expected but inputs of those that participate are captured. With respect to the alignment of the IDP with the PGDP, the NXLM informed the Committee that the IDP is aligned with the PGDP.
With respect to service delivery and capacity constraints, the NXLM reported that 90 percent of Nxuba households have access to electricity. With respect to the provision of water, the NXLM said that its bulk water provision is problematic with consequential differing level of service in different communities. The NXLM added that existing dams are inadequate and there is proposal for the construction of the new dam, the Department of Water Affairs committed itself to construct a dam. With regard to the provision of sanitation, the NXLM reported that bucket eradication projects were implemented until 2008 but could not be completed when it was realised that the capacity of the sewerage treatment works will not be able to handle the increased work load. The NXLM added that, due to this capacity constraint 20 percent of residents are still using the bucket system. However, environmental assessment studies are being conducted.
Furthermore, the NXLM reported that it collects refuse from all households, hospitals, schools and businesses except the farm areas. The NXLM added that its old refuse vehicles are characterized by constant breakdowns and are un-roadworthy. With respect to backlogs, the NXLM said that it has a total backlog of approximately 150 kilometers of road network; and 3000 housing backlog.
The Committee was told that, in compliance with the MFMA, all three bid committees are functional but there are capacity constraints with respect to the evaluation committee; the BTO is functional; AFS was submitted to the Auditor-General on time; section 71 reports of the MFMA were submitted on time; Internal Audit unit are shared with the Amathole District Municipality but the arrangement is dysfunctional; the audit committee has been established and is operational with four members, however is not efficient due to the non existence of the Internal Audit; the NXLM is in the process of converting the AFS from Institute of Municipal Finance Officers (IMFO) to GRAP in order to comply with the requirements of Section 122 (3) of the MFMA;
With respect to capital grant dependency, the NXLM reported that 18 percent of the total budget is for capital and is solely funded through MIG. The NXLM further reported that 52 percent of operating expenditure is funded from grants and only 48 percent from own revenue and this is due to low revenue collection. With regard to revenue collection rates and debtors, the NXLM reported that 70 percent of the rates funds has been collected which is not that much as most property owners in the valuation roll are farmers of which have rebates. The NXLM further reported that salaries amount to 48 percent of the operating budget. This percentage is high.
Finding • The Committee find that most farmers do not pay property rates.
The Committee recommends that: • The NXLM should ensure that it collects revenue for property rates from all those that are suppose to. Legal action should be undertaken where there is resistance.
3.11 The Chris Hani District Municipality The Chris Hani District Municipality (CHDM) reported that it received grant funds for six grants: MIG, Regional Bulk Infrastructure Grant, Water Services Operating Subsidy Grant, Rural Transport Services Infrastructure Grant, MSIG, and FMG. With respect to intergovernmental relation, the CHDM reported that participation in IDP is improving but commitments made are seldomly implemented at the required time. The CHDM further reported that the IDP is always aligned with the PGDP.
With respect to the MFMA compliance, the CHDM reported that supply chain management policy is in place; the BTO exists and it consists of five sections (Revenue / Income, Expenditure, Financial Reporting and Budget, System administration, and Supply Chain Management). The CHDM reported that AFS was submitted to AG on time, however the section 71 of the MFMA were not submitted on time. The CHDM reported that an Internal Audit and Audit Committee are established and functional and that the former has four people. The CHDM added that the Audit Committee is shared with nine municipalities. The CHDM reported that it has been a challenge to complete annual reports on time due to audit reports not being completed on time. With regard to the Internal Audit unit, the CHDM reported that it is established and functional. However, the CHDM added that certain tasks of internal audit unit are outsourced it shares its resource with local municipalities.
On service delivery, the CHDM reported that there are water backlogs in different areas that are mostly rural. The CHDM further reported that an estimates amount of R4.2 billion is needed to in order to address water backlog. With regard to sanitation, the CHDM added that an estimate of R680 million is needed in order to address sanitation backlog. The CHDM commented that, with the only source of funding being MIG and RBIG, the 2014 target cannot be achieved. The CHDM further reported that there is water crisis in Lukhanji Local Municipality, the latest report indicated that there is water until October 2010 if there is no inflow.
With respect to growth in Budget and contributing factors, the CHDM reported that its capital programs are 100 percent dependent on grant funding and operation programs are 90.3 percent dependent on grant. With respect to revenue collection, the CHDM reported that revenue collection on water and sanitation is happening at local municipalities. Furthermore, the CHDM reported that 42 percent of operating budget was spent on salaries and water services expenditure totalled R30.9 million.
Findings • The CHDM has invested R150 million which should have been used to address backlogs. • The CHDM is not GRAP compliant and as a result it has been receiving disclaimers for three consecutive years.
The Committee recommends that: • The CHDM should redirect all invested funds towards addressing service delivery backlogs. • The Municipality, as a matter of urgency, should ensure that it is GRAP compliant. This is crucial for a district municipality because local municipalities stand to benefit through their best practices.
3.12 The Ngqushwa Local Municipality The Ngqushwa Local Municipality (NGLM) reported that its budget has increased by 25 percent from the 2008/07 financial year to the 2009/10 financial year, because the increase in the equitable share and the increase in collection of property rates. The NGLM reported that the AFS and section 71 reports are submitted on time to the National Treasury. The NGLM further reported that it is 65 percent capital grant dependent; 3.4 percent operational grants dependent; the employee-related costs amount to 47 percent of the operational budget and, repairs and maintenance costs was 0.05 percent of the operational budget. The NGLM further reported that all bid committees exist.
The NGLM reported that intergovernmental relations meetings takes place regularly and there is participation by ESKOM. However, the NGLM complained that there is huge challenge of non-participation by sector departments in the IDP processes. The Committee was assured that the IDP is aligned with the Provincial Growth and Development Strategy but to a limited extent due to the fact that the NGLM does not provide water and sanitation.
With respect to service delivery, the NGLM reported that it is not a water service authority and therefore they are not involved in water and sanitation matters. This function is the responsibility of the Amathole District Municipality. With respect to electrification, the NGLM reported that it is in the process of registering indigent people on the database. The NGLM explained that electrifying the area within its jurisdiction is its function.
The NGLM reported that limited funds received through Municipal Infrastructure Grant are proportionally allocated on the roads rehabilitation programme (gravel roads) and the building of community halls. The NGLM further reported that, due to poor maintenance and the poor condition of the roads that fall under the Department of Roads and Public Works, NGLM is forced to work on district Roads. This, the NGLM said, resulting in the focus being shifted away from their real responsibility of access roads and minor roads.
Finding • Evaluation of assets is the most contributing factor for the NGLM to not comply with GRAP. Inability to evaluate assets is the major cause for the NGLM to be not GRAP compliant.
The Committee recommends that: • The NGLM should put more effort on asset evaluation; this after all will ensure that it is GRAP compliant. • The Provincial Department of Roads and Public Works in the Eastern Cape should tar, repair and maintain roads in and surrounding the Ngqushwa Local Municipality and should report to the House every quarter on the progress made in the 2010/11 and 2011/12 financial years.
- Comments by Stakeholders 4.1 National and Provincial Treasury The National Treasury told the Committee that municipalities are not showing any signs of improving and as a result, these municipalities keep on receiving adverse and/or disclaimer audit opinions. The Committee was further told that basic accounting skills are being offered to CFO but there is no change in the Auditor General’s (AG) report. The National Treasury questioned the credibility of the figures that were presented by municipalities. The reason given for this was that presented figures did not match the figures that were submitted by municipalities to the Provincial and National Treasuries.
On the other hand, the Provincial Treasury commented that the majority of the presentations reflect a lot of information that is not captured in the reports submitted to it by municipalities. Provincial Treasury added that training has been and is being provided to all municipalities. Furthermore, the Provincial Treasury informed the Committee that municipalities do not provide/keep documentation for perusal during the audit report process.
The Provincial and National Treasuries assured the Committee that municipalities will be provided with programmes that seek to empower them to comply with GRAP. The National Treasury informed the Committee that Provincial Treasury and AG are available to provide financial skills to municipalities but in most cases, municipalities are not requesting help and help can not be forced to them.
4.2 Eskom Eskom reported that they participate in the IDPs of all municipalities because Eskom must provide municipal electrification needs. Eskom further reported that it is finding difficult to address electrification backlogs in the former Transkei area because there is no infrastructure. Eskom said that infrastructure must be built first. With respect to other parts of the Province, Eskom said that they are assisting. Eskom further raised its concerns regarding service providers who do not submit all relevant documentation as a result they are not paid on time.
4.3 Department of Water Affairs The Provincial Department of Water Affairs reported that it is continuously inspecting rivers to avoid water contamination that may be caused by spillages due to old infrastructure. The Department explained that samples of water are taken to laboratories for testing. The Department said that this is done through the Blue Drop Assessments. The Department of Water Affairs further reported that regular bilateral meetings are held with municipalities.
4.4 National Department of Cooperative Governance and Provincial Department of Local Government and Traditional Affairs The National Department of Cooperative Governance (DCoG) proposed a hands- on-approach to address the challenges that municipalities are faced with. The National Department reported that there is lack of fraud prevention and internal controls in municipalities.
The Provincial Department of Local Government and Traditional Affairs reported that it has subsidized municipality for audit fees and for compensation of employees’ fees, but the audit opinions are not improving. As a result of this, the Provincial LoGTA said, a financial recovery plan is being developed by it. The Department of LoGTA added that there is over reliance on consultants who add no value based in terms of the AG reports. The Department of LoGTA further reported that forensic investigations are considered in all municipalities and these municipalities will be visited to discuss forensic fees. With respect to audit fees, Department of LoGTA explained that fees were paid on behalf of the municipalities that had challenges. 4.5 The Development Bank of Southern Africa The Development Bank of South Africa (DBSA) reported that, through the Siyenza Manje programme, it has assisted municipalities by seconding staff (qualified officials) to municipalities. The DBSA reported that seconded staff are assisting municipalities to convert to GRAP. The DBSA assured the Committee and the municipalities that they intend to provide support to municipalities until such time there is improvement in all areas of corporate governance in municipalities.
4.6 Fiscal and Financial Commission The Financial and Fiscal Commission (FFC) commented that it is reviewing the Local Government Equitable Share formula. The FFC advised municipalities to forward submissions to the South African Local Government Association. The FFC commented that the number of bailouts should be controlled because bailing out should be followed by the plan to address the challenges. With respect to municipalities who are investing their equitable share funds, the FFC commented that the interest portion was expected to be returned to government coffers but municipalities are now allowed to use it on operational issues.
- Further Findings The Select Committee on Appropriations, after careful consideration of the service delivery and financial performance of the above-selected municipalities in the Eastern Cape, observed the following: • Municipalities are owed monies for \property rates by government departments. The biggest monies are owed by Provincial Department of Public Works;
• The municipalities are neglecting their mandate and are performing the
Provincial
mandate without service level agreements in place;
• The Audit Committee of all municipalities had not addressed the
Councils;
• The majority of municipalities are not General Recognized Accounting
Practices
(GRAP) compliant and record keeping is very poor. Non-compliance with
GRAP is the main cause of the negative audit opinions that were
received by municipalities. The evaluation of assets is the most
contributing factor for municipalities not to comply with GRAP;
• Even though municipalities have established BTOs, they are not
effective and/or
adding value due to the capacity constraints;
• Some municipalities are investing their equitable share. Whilst this
money
accumulates interest, the poor are deprived of services that were promised by
the leadership of the country;
• When it comes to providing sanitation, the municipalities put more
focus mainly
on towns and neglect rural areas. Municipalities provide services such as refuse
collection and eradication of bucket systems only in towns;
• The financial figures presented do not match those submitted to
National and
Provincial Treasuries;
-
Further recommendations The Select Committee on Appropriations, after careful consideration of the service delivery and financial performance of the above-selected municipalities in the Eastern Cape, recommends that the National Council of Provinces considers the following: 6.1 The National and Provincial departments, especially the National and Provincial Departments of Public Works, that owe municipalities property rate fees should ensure that they pay them accordingly; and report to the House that they have paid all outstanding amounts and this report should be submitted to the House within three months after the adoption of this report by the House.
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The South African Local Government Association should advise municipalities not to perform provincial functions because this compromises service delivery at a local sphere of government;
6.3 The Councils should strengthen their oversight roles;
6.4 The National Treasury and the National Department of Cooperative Governance and Traditional Affairs should develop programmes aimed at assisting municipalities (especially low-capacity municipalities) with the conversion from the Institute of Municipal Finance Officers to the Generally Recognized Accounting Principles reporting systems. This process should be fast-tracked so as to realize the 2014 Operation Clean Audit target;
6.5 The National Treasury and the Development Bank of Southern Africa through its Siyenza Manje Programme should monitor the establishment of the Budget and Treasury Offices, internal audits, and audit committees in all municipalities and further capacitate officials employed by these municipalities.
6.6 The National Treasury and Provincial Treasury should monitor how municipalities spend the accumulated interests from the municipal investments;
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Municipalities should extend provision of services to every rural areas under their jurisdiction and not only concentrate in urban areas;
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The South African Local Government Association should, at all time, sensitize municipalities about the importance of observing legislations that govern Local Government;
6.9 The National and Provincial Department of Cooperative Governance, Auditor General, Provincial and National Treasury should contribute to the Municipal Turnaround Strategy by developing tools that are going to assist municipalities to comply with all provisions of the Municipal Finance Management Act;
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The Department of Cooperative Governance and Provincial Department of Local Government and Traditional Affairs together with the Department of Rural Development and Land Reform should assist municipalities in servicing communities in rural areas especially because almost all municipalities are failing to service communities living in rural areas. These two Departments should report to the House every quarter on progress made in the 2010/11, 2011/12 and 2012/13 financial years;
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The Select Committee on Appropriations, together with the Select Committee on Co-operative Governance and Traditional Affairs, should do a joint follow-up visit to the municipalities in the Province of North West to ascertain progress made by sector departments as per commitments they made during this oversight visit and that this follow- up visit be made three months after the adoption of this report; and
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As per provision of Section 182 of the Constitution, the Public Protector should investigate misappropriation of funds by municipalities that were visited and report to Parliament within three months after the adoption of this report by the House.
Report to be considered.
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Report of the Select Committee on Security and Constitutional Development on the Defence Amendment Bill, dated 10 November 2010:
The Select Committee on Security and Constitutional Development, having considered the Defence Amendment Bill [B11B-2010] (National Assembly – sec 75), referred to it, reports that it has agreed to the Bill without amendments.
Report to be considered.
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Report of the Select Committee on Security and Constitutional Development on the Amendments to the Convention on Prohibitions or Restrictions on the use of Certain Conventional Weapons which may be deemed to be excessively Injurious or to have Indiscriminate effects (CCW), tabled in terms of section 231(2) of the Constitution of the Republic of South Africa, 1996, dated 10 November 2010:
The Select Committee on Security and Constitutional Development, having considered the request for approval by Parliament of the Amendments to the Convention on Prohibitions or Restrictions on the use of Certain Conventional Weapons which may be deemed to be excessively Injurious or to have Indiscriminate effects, tabled in terms of section 231(2) of the Constitution, 1996, recommends that the National Council of Provinces, in terms of section 231 (2) of the Constitution, approve the agreement.
Report to be considered.
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Report of the Select Committee on Security and Constitutional Development on the Magistrates’ Courts Amendment Bill, dated 10 November 2010:
The Select Committee on Security and Constitutional Development, having considered the Magistrates’ Courts Amendment Bill [B23B-2010] (National Assembly – sec 75), referred to it, reports that it has agreed to the Bill without amendments.
Report to be considered.
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Report of the Select Committee on Women Children and Persons with Disabilities on the 2007/2008 and 2008/09 Annual Reports of the Commission on Gender Equality, dated 10 November 2010
The Select Committee on Women Children and Persons with Disabilities, having considered the subject of the Annual Reports 2007/08 and 2008/ 09 of the Commission on Gender Equality, referred to it by the National Council of Provinces on the 22 September 2010, reports as follows:
The committee finds that due to the long passage of time that has lapsed between the review period of the report and its tabling, and new developments have occurred between those financial years.
The information contained in the report is relevant, and could be used as a reference document to interrogate the challenges and problems encountered by the Commission on Gender Equality.
This would assist the committee in their engagements with the 2009/10 annual report to analyse the extent to which they have addressed the ongoing ‘crisis’ within this institution.
The committee further notes that the Commission on Gender Equality has been late in tabling annual reports and requests that this not be repeated in future.
Report to be considered.
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Report of the Select Committee on Women Children and Persons with Disabilities on the 2008/09 Annual Reports of the National Youth Commission, dated 10 November 2010
The Select Committee on Women Children and Persons with Disabilities, having considered the subject of the Annual Reports 2008/09 of the National Youth Commission, referred to it by the National Council of Provinces on 22 September 2010, reports as follows:
The committee finds that due to the long passage of time that has lapsed between the review period of the report and its tabling, new developments have occurred within the youth sector.
The information contained in the report is relevant, and could be used as a reference document to interrogate the challenges and problems encountered by the National Youth Commission. This would assist the committee in their engagements with the current National Youth Development Agency to analyse the extent to which they would not repeat the problems encountered by their predecessor.
Furthermore, the committee notes that this entity no longer exists and its services have been absorbed into the functions of the National Youth Development Agency.
Report to be considered.
THURSDAY, 11 NOVEMBER 2010
ANNOUNCEMENTS
National Assembly and National Council of Provinces
The Speaker and the Chairperson
- Bills passed by Houses – to be submitted to President for assent
(1) Bills passed by National Assembly on 11 November 2010:
a) Deeds Registries Amendment Bill [B 13B – 2010] (National
Assembly – sec 75).
b) Sectional Titles Amendment Bill [B 14B – 2010] (National
Assembly – sec 75).
National Council of Provinces The Chairperson
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Referral to Committees of papers tabled
1) The following papers are referred to the Select Committee on Security and Constitutional Development for consideration and report:
(a) Report on the provisional suspension of a magistrate, Mr F R Rambau, a regional magistrate at Polokwane, in terms of section 13(3)(b) of the Magistrates Act, 1993 (Act No 90 of 1993). (b) Report on the provisional suspension of a magistrate, Mr L Skrenya, a magistrate at Cala, in terms of section 13(3)(b) of the Magistrates Act, 1993 (Act No 90 of 1993). (c) Report on the provisional suspension of a magistrate, Mr M K Chauke, an additional magistrate at Pretoria, in terms of section 13(3)(c) of the Magistrates Act, 1993 (Act No 90 of 1993). (d) Report on the provisional suspension of a magistrate, Mr W J M Prinsloo, a magistrate at Ermelo, in terms of section 13(3)(b) of the Magistrates Act, 1993 (Act No 90 of 1993). (e) Report on the provisional suspension of a magistrate, Mr I W O M Morake, a magistrate at Lichtenburg, in terms of section 13(3)(b) of the Magistrates Act, 1993 (Act No 90 of 1993). (f) Report on the provisional suspension of a magistrate, Ms A Maharaj, an additional magistrate at George, in terms of section 13(4)(b) of the Magistrates Act, 1993 (Act No 90 of 1993). (g) Report on the provisional suspension of a magistrate, Mr N M Jassiem, an additional magistrate at Mitchells Plain, in terms of section 13(4)(b) of the Magistrates Act, 1993 (Act No 90 of 1993).(2) The following papers are referred to the Select Committee on Finance for consideration and report:
(a) Amendments to Money-Laundering and Terrorist-Financing Control Regulations, 2002, in terms of section 77 of the Financial Intelligence Centre Act, 2001 (Act No 38 of 2001). (b) Amendments to Schedule 1 (List of Accountable Institutions) of the Financial Intelligence Centre Act, 2001 (Act No 38 of 2001). (c) Amendments to Schedule 2 (List of Supervisory Bodies) of the Financial Intelligence Centre Act, 2001 (Act No 38 of 2001).
COMMITTEE REPORTS
National Council of Provinces
- Report of the Select Committee on Security and Constitutional Development on the progress report and the upliftment of the provisional suspension from Office of Magistrate M K Chauke, dated 10 November 2010
Introduction
The Select Committee on Security and Constitutional Development, having considered the progress report and the upliftment of the provisional suspension from office of a magistrate, Mr M K Chauke, an additional Magistrate at Pretoria, Gauteng, tabled by the Minister for Justice and Constitutional Development, in terms of the Magistrates Act, 1993 (Act no 90 of 1993), reports as follows:
Background
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On 8 November 2007 the Specialised Commercial Crime Court in Pretoria convicted Mr Chauke, his wife and his son of contravening section 37 of the General Law Amendment Act, No. 62 of 1955. On 16 November 2007 they were all sentenced to 12 months imprisonment, suspended for a period of five years on condition that they are not again convicted of contravening section 37 of Act 62 of 1955 during the period of suspension.
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Mr Chauke’s appeal against his criminal conviction had been set down on the roll for 8 March 2010.
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The Minister, on the advice of the Magistrates Commission, provisionally suspended Mr Chauke from office with effect from 5 February 2010. The suspension was recommended based on three charges of misconduct namely, the criminal conviction above, contravening the Regulations for Judicial Officers in the Lower Courts, 1994, and contravening the Code of Conduct for Magistrates.
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The suspension was confirmed by both Houses of Parliament on 1 and 4 June 2010 respectively.
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Having heard both parties on appeal, the High Court delivered judgment on 15 June 2010. Mr Chauke’s criminal conviction and sentence were set aside.
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The Magistrates Commission commenced with the misconduct inquiry against Mr Chauke in respect of the remaining two charges of misconduct. The basis of the allegation was that he, during the period October 2002 to July 2004, during and after official office hours, retained and forwarded e-mails to other persons containing explicit pornographic material. This was done on and from a computer supplied to him by the Department of Justice and Constitutional Development for the exclusive use of the execution of his official duties as a magistrate. It is also alleged that he used the said computer to access internet sites containing explicit pornographic or obscene material.
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The Ethics Division studied the judgment on appeal in respect of Mr Chauke’s criminal conviction and was of the view that the Commission would not be able to successfully prove misconduct on a balance of probabilities in respect of the first charge. No evidence was therefore led in support of this count. The first count of misconduct fell away.
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Having considered the evidence at the misconduct inquiry regarding count two, the Presiding Officer, on 5 July 2010, found Mr Chauke guilty of misconduct in that he failed to act at all times in a manner which upholds and promotes the good name, dignity and esteem of the office of magistrate and the administration of justice. The Presiding Officer postponed the imposition of a sanction for a period of 12 months on certain conditions in terms of regulation 26(17)(a) of the Regulations for Judicial Officers in the Lower Courts, 1994. He was found not guilty on count three.
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Since the criminal conviction of theft, which formed the basis of Mr Chauke’s provisional suspension, has been set aside by the High Court, Mr Chauke’s further provisional suspension would not be justified. The nature and seriousness of the charge of misconduct on which he was found guilty does not warrant his provisional suspension either and the sentence imposed does not impact on his fitness to hold office.
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The Minister for Justice and Constitutional Development concurs with the Magistrates Commissions’ recommendation and has accordingly uplifted Mr Chauke’s provisional suspension from office.
Conclusion
The Select Committee on Security and Constitutional Development, having considered the progress report and the upliftment of the provisional suspension from office of magistrate Mr M K Chauke, tabled by the Minister for Justice and Constitutional Development, in terms of the Magistrates Act, 1993 (Act no 90 of 1993), in Parliament on 5 November 2010, reports that it concurs with the Minister’s decision.
Report to be considered.
- Report of the Select Committee on Security and Constitutional Development on the progress report on the provisional suspension from Office of Magistrate C M Dumani, dated 10 November 2010
Introduction
The Select Committee on Security and Constitutional Development, having considered the progress report on the provisional suspension from office of a magistrate, Mr C M Dumani, a magistrate at Graaff Reinett, tabled by the Minister for Justice and Constitutional Development, in terms of the Magistrates Act, 1993 (Act no 90 of 1993), reports as follows:
Background
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The Minister, on the advice of the Magistrates Commission, provisionally suspended Mr Dumani from office with effect from 05 February 2010. The suspension was confirmed by both Houses of Parliament on 1 and 4 June 2010 respectively.
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Mr Dumani was charged with four counts of misconduct. He denied all the allegations against him. At the conclusion of the misconduct inquiry, he was found guilty of three of the four charges of sexual harassment against female clerks at the Graaff-Reinet Magistrate’s Office.
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The presiding officer at the misconduct inquiry on 24 May 2010 recommended that Mr Dumani be removed from office in terms of section 13(4)(a)(i) of the Act.
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The matter had been placed on the agenda of the Magistrates Commission’s next meeting to be held on 26 and 27 August 2010 for consideration in terms of regulation 26(22) of the Regulations for Judicial Officers in the Lower Courts, 1994, read with section 13(4)(a)(i) of the Magistrates Act, No. 90 of 1993.
Conclusion
- The Select Committee on Security and Constitutional Development, having considered the progress report on the provisional suspension from office of magistrate, Mr C M Dumani reports that it will await the recommendation from the Minister for Justice and Constitutional Development before concluding the matter.
Report to be considered.
- Report of the Select Committee on Security and Constitutional Development on the progress report on the provisional suspension from Office of Magistrate D Jacobs, dated 10 November 2010
Introduction
The Select Committee on Security and Constitutional Development, having considered the progress report on the provisional suspension from office of a magistrate, Mr D Jacobs, a magistrate at Clocolan, Free State, tabled by the Minister for Justice and Constitutional Development, in terms of the Magistrates Act, 1993 (Act no 90 of 1993), reports as follows:
Background 1. The Minister, on the advice of the Magistrates Commission, provisionally suspended Mr Jacobs from office with effect from 30 March 2010. The suspension was confirmed by both Houses of Parliament on 1 and 4 June 2010 respectively.
2. On 25 May 2010 the Magistrates Commission charged Mr Jacobs with
ten counts of misconduct and served a notice containing the
allegations against him on 27 May 2010 in terms of section
13(3)(e) of the Act.
3. The Magistrates Commission was informed that, whilst being
provisionally suspended from office, Mr Jacobs on 16 July 2010 was
arrested and appeared before the Clocolan District Court on a
charge of driving a vehicle under the influence of liquor. He
appeared in court on 19 July 2010. The Commission investigated
these allegations and intends to add further charges of misconduct
against Mr Jacobs.
4. The misconduct inquiry against Mr Jacobs commenced on 06 August
2010 and was postponed at his request to 22 and 23 September 2010,
to enable him to instruct counsel.
Conclusion
1. The Select Committee on Security and Constitutional Development,
having considered the progress report on the provisional
suspension from office of magistrate Mr D Jacobs reports that it
will await the recommendation from the Minister for Justice and
Constitutional Development before concluding the matter.
Report to be considered
- Report of the Select Committee on Security and Constitutional Development on the progress report on the provisional suspension from Office of Magistrate L B Maruwa, dated 10 November 2010
Introduction
The Select Committee on Security and Constitutional Development, having considered the progress report on the provisional suspension from office of a magistrate Mr L B Maruwa, an additional Magistrate at Daveyton District Court, Gauteng, tabled by the Minister for Justice and Constitutional Development, in terms of the Magistrates Act, 1993 (Act no 90 of 1993), reports as follows:
Background
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Mr Maruwa appeared on 24 August 2007 before the Springs Regional Court on eleven counts of fraud. On 29 September 2009, Mr Maruwa was convicted of fraud on all eleven counts.
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The conviction of Mr Maruwa flowed from the fact that while presiding over a case involving a traffic offence allegedly committed fraud by endorsing the court records to wrongly reflect:
i. that the court wherein he presided, was properly constituted in that the prosecutor in his capacity as a prosecutor was present; ii. that the prosecutor put charges to the accused who committed the traffic offence; iii. that the prosecutor had no address on the merits; iv. that the prosecutor proved no previous convictions; and v. that the prosecutor had the opportunity to take part in the subsequent enquiries in terms of section 170(1) of Act 51 of 1977 for the failure of the accused to appear in court in the listed traffic offences reflected on the charge sheet. -
The Springs Regional Court, on 09 November 2009, sentenced Mr Maruwa to a fine of R5 000.00 or 12 months imprisonment. Mr Maruwa paid the fine. He appealed against his criminal conviction and sentence. A date for the appeal to be heard has not yet been determined.
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On 11 December 2009 the Commission charged Mr Maruwa of eleven counts of misconduct and served a notice, in terms of section 13(3)(e), containing the allegations against him, on 05 March 2010.
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The Minister, on the advice of the Magistrates Commission, provisionally suspended Mr Maruwa from office with effect from 03 February 2010. The suspension was confirmed by both Houses of Parliament on 1 and 4 June 2010 respectively.
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The misconduct inquiry commenced on 04 June 2010 and was postponed sine die at the request of the defence, pending the outcome of the criminal matter on appeal.
Conclusion
The Select Committee on Security and Constitutional Development, having considered the progress report on the provisional suspension from office of magistrate Mr L B Maruwa reports that it will await the recommendation from the Minister for Justice and Constitutional Development before concluding the matter.
Report to be considered.
- Report of the Select Committee on Security and Constitutional Development on the progress report on the provisional suspension from Office of Magistrate M T Masinga, dated 10 November 2010
Introduction
The Select Committee on Security and Constitutional Development, having considered the progress report on the provisional suspension from office of a magistrate, Mr Masinga, an additional Magistrate at Emlazi, KwaZulu- Natal, tabled by the Minister for Justice and Constitutional Development, in terms of the Magistrates Act, 1993 (Act no 90 of 1993), reports as follows:
Background
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Mr Masinga, on 19 March 2009, appeared in the Durban Magistrates’ Court on a charge of contravening section 17(a), read with section 7, of the Domestic Violence Act, No. 116 of 1998. It is alleged that he assaulted his wife with a blunt axe, and that he kicked her, hit her with open hands and threatened to kill her. He also assaulted his daughters.
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The criminal proceedings were initially remanded to 14 April 2009. Mr Masinga was granted bail of R1 000.00. The criminal case was thereafter transferred to the Regional Court, Durban, where Mr Masinga appeared on additional charges of attempted murder and two counts of assault.
- The criminal case was postponed on various occasions at the request of the defence. The matter stands postponed to 3 September 2010 for an application for the recusal of the presiding officer.
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On 8 February 2010 the Magistrates Commission charged Mr Masinga with three counts of misconduct. A notice in terms of section 13(3)(e), containing the allegations against him, was served on Mr Masinga. The National Education Health and Allied Workers Union (NEHAWU) informed the Magistrates Commission in a letter received on 2 March 2010 that it acts on behalf of Mr Masinga. NEHAWU requested the Commission to communicate directly with them regarding the disciplinary matter. NEHAWU further informed the Commission that they were in the process of considering the appointment of a legal representative for Mr Masinga.
- The misconduct inquiry had been set down to commence on 26 August 2010 and, barring any postponements, recommendations would thereafter be considered.
Conclusion
- The Select Committee on Security and Constitutional Development, having considered the progress report on the provisional suspension from office of magistrate Mr M T Masinga reports that it will await the conclusion of the misconduct inquiry and recommendation from the Minister for Justice and Constitutional Development before concluding the matter.
Report to be considered.
- Report of the Select Committee on Security and Constitutional Development on the progress report and the upliftment of the provisional suspension from Office of Magistrate W J M Prinsloo, dated 10 November 2010
Introduction The Select Committee on Security and Constitutional Development, having considered the progress report and the upliftment of provisional suspension from office of a magistrate, Mr Prinsloo, an additional Magistrate at Ermelo, KwaZulu-Natal, tabled by the Minister for Justice and Constitutional Development, in terms of the Magistrates Act, 1993 (Act no 90 of 1993), reports as follows:
Background
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The Minister, on the advice of the Magistrates Commission, provisionally suspended Mr Prinsloo from office with effect from 3 February 2010, which suspension was confirmed by both Houses of Parliament on 1 and 4 June 2010 respectively.
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The investigation instituted by the Commission confirmed that ten complaints by a female clerk employed at the Ermelo Magistrate’s Office, Ms S C van Wyk, were filed against Mr Prinsloo. It is alleged that Mr Prinsloo, during the period 18 April 2008 to 5 May 2008 on ten different occasions conducted himself in an unbecoming and embarrassing manner by phoning a former clerk at the office and leaving vulgar messages on her voicemail.
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The misconduct inquiry against Mr Prinsloo commenced on 29 April 2010 and was finally concluded on 26 July 2010. Mr Prinsloo admitted to guilt on 10 charges of misconduct against him. The Presiding Officer, having questioned him in terms of regulation 26(9) of the Regulations for Judicial Officers in the Lower Courts, 1994, found Mr Prinsloo guilty of misconduct as charged.
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Having considered all the evidence placed before him in mitigation, the Presiding Officer found that Mr Prinsloo’s misconduct, although very serious, did not justify a sanction of removal from office. The Presiding Officer ordered that Mr Prinsloo be cautioned and reprimanded by the Chairperson of the Magistrates Commission and the Cluster Head within a month from the imposition of sanction. Mr Prinsloo was further ordered to tender a written apology to the complainant within seven days thereafter. Arrangements were made for Mr Prinsloo to appear before the Chairperson and the Cluster Head on 12 August 2010.
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The Presiding Officer did not recommend that Mr Prinsloo be removed from office as contemplated in section 13 of the Magistrates Act, No. 90 of 1993.
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The Minister for Justice and Constitutional Development concurs with the Magistrates Commissions’ recommendation and has accordingly uplifted Mr Prinsloo’s provisional suspension from office.
Conclusion
The Select Committee on Security and Constitutional Development, having considered the progress report and the upliftment of the provisional suspension from office of magistrate Mr W J M Prinsloo, tabled by the Minister for Justice and Constitutional Development, in terms of the Magistrates Act, 1993 (Act no 90 of 1993), in Parliament on 5 November 2010, reports that it concurs with the Minister’s decision.
Report to be considered.
- Report of the Select Committee on Security and Constitutional Development on the Repeal of the Black Administration Act and Amendment of Certain Laws Amendment Bill, dated 10 November 2010:
The Select Committee on Security and Constitutional Development, having considered the Repeal of the Black Administration Act and Amendment of Certain Laws Amendment Bill [B37B-2010] (National Assembly – sec 75), referred to it, reports that it has agreed to the Bill without amendments.
Report to be considered.
- Report of the Select Committee on Economic Development on the Geosciences Amendment Bill [B12-2010] (National Assembly- section 75, dated 10 November 2010.
The Select Committee on Economic Development, having considered and examined the Geosciences Amendment Bill [B12– 2010] (National Assembly – section 75), referred to it, and classified by the Joint Tagging Mechanism as a section 75, recommends that the Bill be passed without proposed amendments.
Report to be considered.