Departments of Cooperative Governance and Traditional Affairs on their Budgets & Annual Performance Plans, with Minister

Meeting report

The Chairperson welcomed everyone to the meeting, including the Minister of Cooperative Governance and Traditional Affairs, Mr Pravin Gordhan.

Opening remarks by the Minister

The Minister conveyed his good wishes to the Committee for 2015, and added that the Ministry and the Departments looked forward to engagement with the Committee.

The Minister said that Local government was an important sphere of government and everyone, regardless of political affiliations, should be working towards the stabilisation of local government. Local government played a key role in determining whether people lived with dignity, whether they were able to access economic opportunities, whether they could nurture their families and whether they contributed to the overall development of the country. A lot of the focus in the Strategic Plans and 2015/16 Annual Performance Plans (APPs) was on making ‘Back to Basics’ work and ensuring collaboration with all provinces and municipalities to deliver on the constitutional mandate. COGTA, in the coming year, would be positioning itself as a “hands on” policy making department in terms of active monitoring of how municipalities performed and delivered on developmental mandates. Part of COGTA’s mandate was also to understand and support the development of intergovernmental relations in South Africa, with a focus on how intervention in terms of Section 139 could be better managed. Congratulations should be extended to the Western Cape, as well as the National Disaster Management Centres on the way they have been responding to the fire in Cape Town and solidarity was extended to those affected by the fire.

Department of Cooperative Governance and the Department of Traditional Affairs Strategic Plans 2015-2019 and Annual Performance Plans 2015/16 (See attached presentation)

The Minister said the COGTA Ministry comprised the Department of Cooperative Government (DCOG) and the Department of Traditional Affairs (DTA), highlighting the distinctiveness and interrelatedness of each sphere of government in the system of cooperative governance.  Collaboration between national departments, provincial departments and municipalities was crucial with local government at the coalface. The Constitution provided a national framework for national government, provincial governments, local governments and all organs of state on cooperative governance in Section 41(2). This framework facilitated coordination in the implementation of policies and legislation including coherent governance, effective provision of services, monitoring and implementation of policies and legislation, and realisation of national priorities.

The Minister gave an overview of the national, provincial and local interface. He highlighted Section 139 of the Constitution which provided for intervention by the relevant provincial executive if a municipality could not or did not fulfil an executive obligation in terms of the Constitution or legislation, subject to subsequent approval by the Minister responsible for local government.

Department of Cooperative Governance

The Minister said the vision of DCOG was a functional and developmental local government system that delivered on its constitutional and legislative mandates within a cooperative governance system. The mission, directly adopted for the five pillars of the ‘Back to Basics’ campaign, was to ensure that all municipalities performed their basic responsibilities and functions consistently by:

-Putting people and their concerns first;

-Supporting the delivery of municipal services to the right quality and standard;

-Promoting good governance, transparency and accountability;

-Ensuring sound financial management and accounting; and

-Building institutional resilience and administrative capability.

The coming period would be a vision of both the constitutional outline and the National Development Plan (NDP) and the ‘Back to Basics’ approach was a key strategy in achieving that vision.

Mr Vusi Madonsela, Director-General, DCOG, gave an overview of the proposed seven branch structure and the legislative mandate of the Department. There was a proposal to consolidate the infrastructure support functions in COGTA and the Municipal Infrastructure Support Agent (MISA) into a single government component, Infrastructure Development. In line with previous proposals, the National Disaster Management Centre would also become a government component. He also gave an overview of the Strategic Goals and Objectives.

Strategic Objective 1 aimed to build accountability for performance in local government systems through setting and enforcing clear performance standards by March 2019. Strategic Objective 2 intended to provide efficient and effective cooperative governance and administrative support services for COGTA to deliver on its mandate by March 2019. Strategic Objective 3 aimed to structure intergovernmental relations that national and provincial government could support, monitor, intervene and enforce performance by March 2019. The Intergovernmental Monitoring, Support and Intervention (IMSI) Bill would be processed through Parliament. Strategic Objective 4 intended to implemented initiatives to improve financial sustainability, revenue management and audit outcomes in local government by March 2019. The functionality of Municipal Public Accounts Committees (MPACs) in all dysfunctional municipalities as well as municipalities with adverse and disclaimer opinions would be monitored and enforced. Initiatives to influence the ability of municipalities to collect outstanding debt would be developed and implemented in 60 municipalities, as well as a national campaign on improving the culture of payment. Strategic Objective 5 intended to increase public confidence in the local government system by changing the relationship between citizens and local government. Strategic Objective 6 aimed to strengthen anti-corruption measures and enforcing applicable legislation and policies by March 2019 with the establishment of a Local Government Anti-Corruption Tribunal. The Minister would receive annual progress reports on cases reported, investigated and prosecuted and all municipalities should implement the Anti-corruption Strategy and Plan. Strategic Objective 7 wanted to improve the system of disaster management and fire services across government by March 2019 and the First Draft Bill on Fire Services had been finalised. Strategic Objective 8 facilitated and coordinated capacity building initiatives in order to build capable municipalities by 31 March 2019.  

Strategic Objective 9 aimed to strengthen the functionality of municipalities through the development and implementation of administrative institutional systems by March 2019. The goal of Strategic Objective 10 was to facilitate the restructuring of city space economy through changes in land use planning and management by March 2019. Twelve districts would be supported to develop integrated development plans (IDPs) that reflected sectoral and spatial convergence by target date. Eight cities and towns would be supported to develop long term strategies and Spatial Development Frameworks (SDFs) by target date.  Strategic Objective 11 promoted good governance and an ethical culture in local government and the Local Government Code of Good Governance would be developed and implemented, as well as conducting Conduct Code of Conduct education and training. Strategic Objective 12 supported the implementation of sustainable infrastructure development and maintenance initiatives in order to improve the quality of services and extend infrastructure to unserved communities by March 2019. Support would be provided to sector departments to reduce households without access to infrastructure for basic services and 45 municipalities would be supported to develop operations and maintenance plans.  Strategic Objective 13 would facilitate private sector investment through the implementation of innovative programmes that stimulate local economies by end March 2019. Strategic Objective 14 intended to provide and maintain 1 million work opportunities through building capacity of participants and establishing strategic partnerships by March 2019.

Discussion

Mr E Mthethwa (ANC) referred to the Code of Conduct mentioned in Strategic Objective 12 and asked if there would be a national register listing all offenders and how it would be managed in terms of monitoring.

The Minister replied that a national register would be developed. Any person found guilty of illegal conduct by one municipality could not be employed by another.

Ms N Mthembu (ANC) commended the Minister for the plans and said she hoped the ‘Back to Basics’ strategy would revive the hope and confidence of the citizens. Many areas important to the delivering of the constitutional mandate were covered. Setbacks could occur, because people were basically encouraged to illegally invade land and she proposed that the Constitution and the law should be enforced in such cases. Municipalities should educate communities on how to get the services they deserved.

The Minister thanked Ms Mthembu for the support and agreed that illegal land invasion, under whatever pretext, was unacceptable in a constitutional society and the law should be enforced much more firmly. Municipalities needed to move ahead of the curve in terms of spatial planning so that when urbanisation took place, advanced preparation would be in place. It came to light that people, illegally, settled on dangerous land and education became important. Talking frankly, as local government elections drew closer; codes of conduct and ethics should also be applied to political parties. Certain activities in a democratic society, like leading people to invade land and conducting themselves in illegal ways, were unacceptable. At the end of the day, those people would be facing the legal consequences of their actions, not the political party leaders that encouraged them.

Mr B Bhanga (DA) said in the recent past there had been a lot of municipal activities in the international arena. He asked if these activities would be coordinated because recently a member of the Mayoral Committee from the Nelson Mandela Bay Municipality (NMBM) went to China and presented himself as the Mayor of the municipality and the youth leader of a political party presented himself as a municipal manager. This aspect was not listed in either of COGTA’s plans and he asked how it would be coordinated. He asked if forensic reports were considered under the reports mentioned in Strategic Objective 1, because in previous engagements the concern had been raised on forensic reports not being implemented. It was understood there was a local government Sector Education and Training Authority (SETA) with a lot of money that had been allocated the training of municipal officials. It was also understood that the SETA had not been performing according to expectations. Many institutions were conducting training programmes for councillors. In light of the approaching elections, many councillors literally have no skills or formal education. He asked if there should not be a requirement and enforcement of a certain level of qualification for people applying to and participating in local government. In South Africa, most white people still lived in historically advantaged areas and most black people continued to live on the outskirts of communities. Almost every municipality had a SDF, but continued to perpetuate the old order of development and he asked how spatial planning would be addressed.

The Minister replied that there was a unit within the Director-General’s office that managed international work. International partnerships or relationships might need to be regulated because the Department of International Relations and Cooperation (DIRCO) experienced the same problems. Forensic reports “partly” fell under the ‘Back to Basics’ strategy in the sense that just short of 100 cases were received from provinces and monitored under the strategy and a reasonable number would be handed over to the Asset Forfeiture Unit (AFU). The results would be reported to the Committee. Councillors were nominated and appointed by their political parties and it should perhaps be a conversation amongst MPs on how councillors should be appointed. Formal education could sometimes not be the right type of qualification, because people with formal education could also be rogues. Generic qualifications for councillors would be the ability to hold officials accountable, to be responsive to the public and to do the work a councillor was supposed to do. Spatial planning was an area of concern and studies has proven that in spite of the planning aspect, the continuous movement of people could not be controlled. In some cases movement was as a result of the perception of economic opportunities or kinship. DCOG and the Committee might want to have a workshop with experts in this area. It was true that the divide was obvious just by travelling around South Africa. Some municipalities had developed ideas around transport corridors, but it would be interesting to bring property developers into this debate to talk to where they bought land and where Cities allowed them to develop land.

Mr M Mathloko (EFF) asked if the ‘clean audit strategy’ was still on track and whether the ‘Back to Basics’ strategy cascaded down to the lower municipal officials for implementation. The Auditor-General’s last report showed most municipalities performed badly in terms of audit outcomes and there should be no confusion when it came to a particular strategy and its implementation. In 2011, the President signed a proclamation to investigate 25 municipalities in North West province and only an interim report had been released. It was now 2015 already and no official report had been released and he asked the Minister to look into it, because such actions would restore public confidence. The Code of Conduct was an ethical issue and not something that could be taught.

The Minister replied that it was still the ambition to have proper audit results in municipalities and financial accountability and the ‘Back to Basics’ strategy was just a broader agenda that talked to the challenges of municipalities. The strategy allowed for different levels of implementation and was designed to restore public confidence. Studies have shown a huge trust deficit to all political parties and it was thus in the interest of all to build public confidence, even amid different interests. The report on the outcome of the North West investigation would be followed up on. Codes of conduct were ethical issues, but in different societies and communities ethics had different meanings. A baseline educational programme was important so that everybody could distinguish between right and wrong in different contexts.

Mr N Khubisa (NFP) said municipalities lacked the capacity and tools for revenue collection and to boost investor confidence. He asked the Department to talk to the plans in place to address these concerns.

Mr Muthotho Sigidi, Deputy Director-General, COGTA, replied that municipalities had these tools, but were not necessarily using the tools effectively.  The Department made it a point that the credit control policies, by-laws and the budget policies were approved so that municipalities could legally defend the collection of debt.

The Minister replied that those who attended the launch of the ‘Back to Basics’ strategy would know that Nestlè and SAPPI, two very large businesses, explained the importance of well functioning municipalities through what it meant for job creation, particularly the continuous supply of electricity and water. The Department intervened to make sure that the municipalities where those companies were located were well functioning. It was understood among councillors that in most places there was potential to either create or widen the revenue base. There was not an adequate social or governmental entrepreneurship movement to create the right kind of economic activity to thrive in this area and a lot needed to be done, both by COGTA and other departments. The initiative should be at local government level with local politicians, because this sort of enterprises created the kind of economic activity that gave people hope. Engagement with the Department of Small Business Development would help municipalities to take initiatives within municipal boundaries to encourage the growth of micro and small businesses. It was regrettable that bigger municipalities went out of their way to accommodate big shopping malls, but would not put up the simplest infrastructure for a small or upcoming business.

Mr K Mileham (DA) said a Section 139 intervention in Makana municipality was declared null and void by the National Council of Provinces (NCOP) due to lack of adherence to procedure last week. Similarly the  Mogalakwena municipality intervention was dismissed by the courts. The Minister recently stated that the guidelines on Section 139 would be reviewed and presented to the Committee and he asked how far that process was. The implementation of the Municipal Property Rates Act was problematic, because of the number of legal requirements and compliance issues that needed to be followed. He asked if the Department had any plans to simply the Act. It was common cause that it was good practice for MPACs to be chaired by the opposition in order to provide good oversight as recommended by the South African Local Government Association (SALGA) in their guidelines on MPACs. He asked if DCOG would consider making regulations in that regard, because there were a number of MPACs across the country where the ANC was in power and also chaired the MPACs. The supply chain management (SCM) regulations should be reviewed, because the tender processes were open to rampant abuse. The proposed establishment of the Local Government Anti-Corruption Tribunal was concerning, because of its “kwasi traditional” nature and it needed to be clarified. There was neither mention of the Disaster Management Bill nor any alignment to what was discussed last week in terms of Strategic Objective 7. He asked what actions would be taken against municipalities that continued to appoint unqualified personnel and whether the Minister would consider instituting punitive action of some form. He asked what cities would be supported to develop long term strategies and SDFs and how the selection took place. As soon as a disciplinary case was instituted against an official that official resigned and the case was never concluded. It left those officials free to apply for work at other municipalities or provincial and national departments.

The Minister replied that the Section 139 guidelines had been prepared and would be forwarded to the Committee. The guidelines intended to ensure that the timing issues in the process be clarified. The proposal around the SCM guidelines was noted and the Disaster Management Bill was still on the agenda. Punitive action against municipalities that appointed unqualified personnel could be considered if legislation allowed for it. National Treasury similarly instituted punitive action against municipalities that did not submit financials on time, but the Department lacked the capacity to address all these concerns.

Mr Sigidi replied that the Municipal Property Rates Act have not been implemented for very long and the legislation had been amended fairly recently. The Department was currently assessing the application in terms of rate ratios and equity rebates given to quite a number of rates payers. There were regulations on the Municipal Property Rates Act and perhaps the regulations could be looked at annually to simplify the implementation process. The Department left the matter of who should chair MPACS open, because pronouncing that the ruling party in a specific municipality could not chair did not take capabilities of individual members of the MPAC into account. MPACs were created in terms of Section 79 of the Municipal Structures Act, which basically stated that MPACS depended on the will of the Council, which could resolve the MPAC at any time. The Department, before looking at the regulations, usually submitted input within the context of what the Department wanted to look at as part and parcel of the General Law Amendment Act.

Mr Madonsela replied that there was no replicating the work done by the National Prosecuting Authority (NPA) in terms of the Local Government Anti-Corruption Tribunal. The NPA dealt with criminal matters, but corruption was both misconduct and criminal. The Tribunal would allow for greater collaboration between COGTA and the NPA so that even after somebody had been dealt with through the disciplinary processes, the NPA could take the matter further and pursue that person criminally. Once misconduct had been identified, the employer should take action whether the employee resigned or not. Once the disciplinary process had been initiated, the employer should be able to see the process through, even in the absence of the employee. Someone could be found guilty of misconduct in their absence if they chose not to attend. In addition, misconduct charges should be pursued once a person had been found to have moved on to other spheres of government.

Mr M Mapulane (ANC) thanked the Department for the presentation and noted that the Strategic Plan was completely aligned to the ‘Back to Basics’ approach. He referred to the proposed ‘seven branch’ structure and asked how the proposed structure weighed against the current structure and what the cost implications of the new structure were. The financial sustainability of a municipality depended on the revenue base of the municipality and the capacity of the municipality to collect outstanding debt. National Treasury released a recent report that stated municipalities across the country were owed approximately R93 billion. It was a huge amount of money that should have been available for service provision. Municipal accounts were usually the last account to be paid by consumers. Municipalities needed to be capacitated to collect debt, because the South African Revenue Services (SARS) collected revenue due to the national fiscus on behalf of the national and provincial governments. Local government on the other hand was struggling to collect outstanding debt and he asked the Minister to consider some kind of instrument to be put in place in terms of the strategic goals so that this debt could be collected. Other municipalities did not have a tax base to be able to collect the kind of revenue needed to provide services and he asked if the Minister if he was satisfied with the allocation local government got from the fiscus. It was the view of the Minister of finance that municipalities should spend at least 7% of the operational budget on maintenance of infrastructure. He asked why only 45 municipalities were identified to be supported in that initiative. The Minister of Finance pronounced that all municipalities should use of portions of their allocations for maintenance of infrastructure and the understanding was that all municipalities would be held accountable to that fact.

The Minister replied that the challenges around creating a ‘culture of payment’ should be extensively discussed. In some instances municipalities were part of the problem through favouritism where friends and business people were on the indigent list. These municipalities should be called to account, but there were also wider structural issues. It also spoke to the quality of leadership within municipalities. It should also be determined how much municipalities paid to debt collectors to collect money that was supposed to be collected by the municipality. It had always been understood that local government needed a larger equitable share, but a new financial model was needed. Eventually all municipalities would be supported to spend 7% of their operational budgets on maintenance of infrastructure, but currently a lack of capacity compelled the Department to look at municipalities separately.

Mr Sigidi replied that some talk had been initiated with SARS around those indigent people registered with various municipalities to investigate the credibility of those registers. The intension was also to check whether people were removed from the indigent register once their economic profiles changed. The R93 billion owed to municipalities would also be targeted through this initiative.

Mr Madonsela replied that the Department’s structure consisted of seven branches with one of those branches earmarked to become a government component. The proposed structure had seven branches as well, which essentially meant the establishment of one branch. There would be cost implications for the establishment of the branch and that was why the Department approached DPSA to approve the structure. Once the structure had been approved, the Department would approach National Treasury for financial assistance, which was not insurmountable, to acquire the capacity for the functioning of the branch.

Mr N Masondo (ANC) asked how the Department would ensure there was greater collaboration between other department such as the Department of Human Settlement and the Department of Water and Sanitation because the issues cut across those departments.

The Minister replied that the Inter-ministerial Task Team became an important arena for collaboration and collective planning. It would take some time to take up speed, but there was huge potential for collective planning.

The Chairperson said the Committee should look at scheduling a follow-up meeting to further unpack some of the issues members wanted to address. He asked whether the Department used consultants in light of the huge amount government departments spent on outsourcing work.

Mr Madonsela said the Department used consultants from time to time, but did not have any in-house consultants. The work done by consultants was tightly managed and most of the work was done by officials of the Department.

The Chairperson thanked DCOG and said the Committee fully supported the ‘Back to Basics’ strategy of the Department.

Department of Traditional Affairs (DTA)

Prof Charles Nwaila, Director-General, DTA, said DTA wanted to transform, develop and promote cohesiveness of traditional affairs institutions through:

-Developing appropriate policies, legislation, norms, standards, systems and regulatory framework governing traditional affairs;

-Providing support and interventions to traditional affairs institutions;

-Enhancing traditional affairs information and knowledge management systems;

-Integrating traditional affairs into the broader democratic governance system;

-Promoting culture and heritage of traditional, Khoi and San communities that are in line with the Bill of Rights; and

-Building professional, competent, ethical and skilled service delivery oriented employees and enhancing good governance systems of the Department.

The DTA had three programmes and two “in-house” entities (National House of Traditional Leaders and the Commission on Traditional Leadership Disputes and Claims). The presentation gave an outline on how the plans of the Department were aligned to the NDP and the Medium Term Strategic Framework (MTSF).

Programme 1 (Administration)

The programme intended to integrate and align planning, performance monitoring, reporting, information management and communication systems within the Traditional Affairs Sector by 31 March 2020 and to improve internal control systems by 31 March 2020.

Programme 2 (Research, Policy and Legislation)

Programme 2 aimed to develop, review, monitor and support implementation of traditional affairs policies and legislation for transformation of the institution of traditional leadership by 31 Mar 2020. Another objective of this programme was to promote peace, stability, culture, heritage and cohesiveness within traditional communities by 31 March 2020. The Draft Traditional Initiation Bill had been completed.

Programme 3 (Institutional Support and Coordination)

Programme 3 aimed to increase the number of functional structures of traditional leadership by 31 March 2020; and to facilitate collaborative relations of the institution of traditional leadership with the three spheres of government, civil society and the private sector for improved service delivery and socio economic development within traditional communities by 31 March 2020.

The National House of Traditional Leaders (NHTL) wanted to promote safe, healthy and legal initiation practices. Two projects in the NHTL programme for socio-economic development of traditional communities would be implemented.

Discussion

Mr Mudau (ANC) asked how traditional leaders were assisted because of their decision not to sit on the municipal council, because of the out of pocket expenses. He asked how norms and standards were provided for tools of trade.

Prof Nwaila replied that a national framework had been developed that regulated this space in terms of incentives and out of pocket expenses. National norms and standards had been developed, but some were historical.

Mr Bhanga welcomed the Traditional Initiation Bill and it had to be resolved with speed with a clear timeframe. The institutions were not backward, because it should be rectified what roles traditional leaders should play in a democratic society. A decision had to be made whether traditional leaders would continue to be encouraged to not move with the times and the guidelines of the Constitution. In KwaZulu-Natal the King of the Zulus had a budget to run an institution and he asked how these funds were controlled, because a framework of how these benefits were regulated should be provided. The role of traditional leaders should also be developmental and international practices should be considered in this respect.

Prof Nwaila said government had laws that governed initiations from as early as 2003 in Section 43 of the National Health Act and in Section 12 of the Children’s Act. The challenges had always been in enforcing the laws and the Traditional Initiation Bill intended to close the gaps between the laws and enforcement of the laws. Fatalities drastically reduced over the summer initiation season and through engagement with stakeholders the Department was working towards the target of zero fatalities in initiation schools. South Africa was doing better than most other countries, because the Constitution recognised traditional leaders, but there was a need for robust engagement on this issue. Traditional leaders were governed by the Independent Commission and allocations were researched and benchmarked.

Mr Mileham said the funds allocated to royal households and traditional councils should be standardised, because the Department had been unable to reply to written questions on how much money traditional leaders and royal households were awarded on an annual basis. It was public funds, it needed to be regulated and audited.

Prof Nwaila replied that there were 829 traditional councils and it was inherited structures. This was very costly to the government and the Department was getting the baseline information together as to what the exact cost was. National Treasury was assisting the Department in delivering auditing packages to the traditional councils.

Mr Mileham said the reimbursement of out of pocket expenses for sitting on municipal councils were not reimbursements, because the maximum amount was paid to members and it was essentially a stipend. He proposed that DCOG looked at the payment structure of municipalities and there should be evidence of claims and appropriate reimbursements.

The Minister replied that this would be forwarded for the attention of National Treasury and the Auditor-General.

Mr Masondo agreed that the role of traditional leaders should be clarified in terms of developing local communities.

The Chairperson said he accepted that traditional leaders had a role to play, but traditional leaders were also governed by a democratically elected government. The role of traditional leaders should be complementing that of government and this issue of accountability could be debated during discussions on the Bill.

The Minister agreed that the role of traditional leaders should be partly developmental and strategic and during the course of the year the Department would get a better understanding on what specifically needed to be done. The Constitution gave recognition to traditional leadership and it might be appropriate for the Committee to invite the leadership of NHTL to engage on this matter. The legislation that governed NHTL was very specific about the developmental role and it seemed there was a gap in terms of the legislation and what was actually being done.

Mr Bhanga thanked the Minister for his commitment and his presence at the meeting.

Closing remarks by the Minister

The Minister thanked Mr Bhanga for his generous acknowledgement. Because of the hard work ahead, it was important for the Executive and the Legislature to find common ground to improve the lives of the people. Care should be taken not to condemn municipalities because of political differences. Some municipalities might not be performing badly, but were also losing opportunities to do better in avenues such as widening revenue and collecting debt. Strategic Objective 2 of the ‘Back to Basics’ strategy was already paying dividends with over 180 municipalities now reporting and the efforts to make municipalities report would only intensify. More municipalities were setting up complaint systems and reactively responded to what was needed and the monitoring approach was also paying dividends. In a few months, the Department would report on the work done by the task team on service delivery. The Committee could assist the Department by informing other Portfolio Committees on the importance of Independent Development Planning (IDP) in a municipal context. He thanked the Committee and the officials.

The Chairperson thanked everyone for their input.                                                                              

The meeting was adjourned.