SALGA 2019/20 Annual Report

Meeting report

Chairperson’s opening remarks

The Chairperson started the meeting by thanking the South African Local Government Association (SALGA) for the role it had played in the work of the Committee. She said that during the year under review, SALGA had participated actively in the business of the Committee, and that the Annual Report correctly emphasised this as one of the highlights of 2019/20. The Committee had benefited immensely from SALGA’s well-researched, insightful and well-articulated contributions, especially in relation to the Municipal Systems Amendment Bill, which the Committee had adopted last week. SALGA’s internal control environment also remained impressive, with eight consecutive audits and the achievement of 38 out of 39 targets as set out in the 2019/20 annual performance plan (APP). This was in stark contrast to the state of affairs in the member municipalities, which SALGA assists and supports.

This was the main dilemma for SALGA. There were many innovative outputs detailed throughout the report, but the absorption rate by the member municipalities left much to be desired. One of the examples was the reported implementation of the municipal audit support programme in 62 “red zone” municipalities, yet the number of disclaimed opinions among these municipalities increased from 26 to 33. The diagrammatic representation of the National Treasury framework for strategic plans and APPs in the annual report depicted SALGA’s work as active on the bottom three rungs of the pyramid, namely the inputs, activities and outputs. The top two rungs of the pyramid were related to the outcomes, or results of SALGA’s interventions at municipalities, and the impact or long-term results at the local government level. This was where the work of SALGA started becoming more aspirational and less definitive.

The Auditor-General (AG) had consistently identified the lack of accountability and poor consequence management as serious areas of weakness in municipalities. SALGA’s intervention in this regard had been the development of an accountability and consequence management protocol, with the envisaged outcome/impact of stronger oversight and accountability in local government. There was still a significant gap between the protocol and its envisaged outcome and impact. It was common knowledge that accountability and consequence management in local government were nowhere near where they should be. This again emphasised the point that when measured against the last two rungs of the National Treasury pyramid, SALGA’s interventions were not quite decisive.

SALGA Annual Report 2019/20

Ms Thembi Nkadimeng, President: SALGA, said that the difficulties faced by SALGA at local governments did not start yesterday, and would take time to turn around. This was why SALGA had the Municipal Audit Support (MAS) programme, where they adopt municipalities for audit support. Even in municipalities where MAS had been rolled out, it was either malicious compliance which caused municipalities to be on the wrong side of the AG’s requirements, or there was deliberate overlooking of the rules and regulations. This had happened not only in a single term of power from 2016 to 2020, but had been a culture that had occurred in municipalities over many years and needed to be eradicated.

The second part, which the Portfolio Committee could assist on, was on the developed consequence framework, as SALGA made an initiative and presented to COGTA their ideas on what could assist on putting together the MAS programme with the AG and a consequence framework.

Mr Lance Joel, Chief Operations Officer (COO): SALGA, said the presentation would be in 2 parts. The first part would be a reflection within the context of the SALGA five-year plan, as approved by the SALGA national conference in 2016. It would reflect briefly on the first three years of implementation of that plan, and then reflect on the two remaining years of that plan. SALGA had a five-year plan which was a follow up to the previous five-year plan, meaning that the new plan was the 2017 to 2022 plan which had three goals.

SALGA had completed their previous plans for 2017/18, 2018/19 and the year under review, 2019/20, and had achieved all of their targets that were set out, but there was one in each of the targets that had been left outstanding. There was generally good progress that had been made, and SALGA was well on track to executing the SALGA national conference resolutions. In the 2019/20 financial year, they had achieved 97% of their objectives, meaning that 38 of the 39 and targets have been achieved, so only one target was not achieved.

From a financial performance point of view, the organisation remained heavily reliant on municipalities to sustain the organisational finances, as most of the income came from municipalities through a levy that that they charged. From an expenditure point of view, much of the focus was on programme execution. In terms of the audit outcomes, on an annual basis SALGA adhered to specific requirements for attaining clean audits, and these were typically requirements that were introduced on an annual basis. The organisation continued to be well managed from a governance point of view.

SALGA had up to 257 municipalities that required different kinds of support, meaning that the support that it provided to these municipalities was not the same kind, as the municipalities faced different challenges. COVID-19 had brought about additional burdens for local government, but these additional burdens had also come at a huge financial cost for the SALGA members. The consequences of COVID-19 were felt particularly from municipal revenue point of view, as municipalities continued to experience collection challenges, being unable to collect from not only households, but also from businesses as well as from the state. SALGA was also covering the projected recoveries for water and sanitation, electricity or property rates, as well as the other services that their members reported as negatively affecting their ability to generate revenue and sustain service provision.

SALGA had been forced, like everyone else, to revisit their plans for the current financial year in order to be more responsive to the impact of COVID-19 and to be more realistic regarding the expectations members would have. In revising their APP, they had had to consider the five Rs -- Resolve, Resilience, Return, Re-imagine and Reform -- as key factors. SALGA had added an additional 22 targets to their APP to respond to the impact of COVID-19.  

Local government was currently under a lot of scrutiny, and there had been a number of policy interventions that had been introduced to try and respond to the challenges, but many of them had not been as successful as anticipated. SALGA had to continue coming up with ways and means to address these challenges. It also had to reflect on the recent municipal audit outcomes and define their response to those outcomes.

Central to the SALGA response was to look at running a campaign that would seek to extract consequence management and accountability. The SALGA national executive committee had been seized with this matter in the last few meetings, and the first thing that had been done was that municipalities that did not perform well in the 2018/19 financial year and were unable to improve their audit outcomes were directly written to, requesting them to provide their response plan to improve the outcomes. The purpose of the request was firstly. for SALGA to be aware of the plans that the municipalities wanted to execute so that it could provide direct support to them to execute those plans. And lastly, on an ongoing basis, it was to assess whether these municipalities were indeed executing the plans so that they could extract accountability and consequence management, and ultimately improve the audit outcomes of the municipalities.

The Association was concerned about the people that it was attracting as councillors at the local government level. Although they did not have the benefit of selecting councillors in the municipalities, SALGA were concerned that they continued to attract people that do not necessarily have the necessary capacity required from a councillor. It wanted to engage all political parties across the board in order to come up with a new arrangement, as the 2021 elections were approaching.

SALGA was of the view that the Organised Local Government Act should be reviewed, as the Constitution only allowed for provincial and national associations to be recognised, and did not define what should be the legal nature or form of the respective provincial and national associations. In line with the Organised Local Government Act, municipalities would become members of provincial associations, and the provincial associations would become members of the national organisation. SALGA would want to propose that the Portfolio Committee note SALGA’s annual report for the financial year that ended in March 2020, and to note the annual performance plans of SALGA for the current year, as well as for the next year.

Discussion

Ms H Mkhaliphi (EFF) wanted clarity on the R3 062 in fruitless and wasteful expenditure that had been condoned by the SALGA national executive committee (NEC) on the issue of vendors. During the year under review, SALGA had continued to register outstanding input activities and outputs,and the concern was that these inputs activities and outputs did not seem to have a decisive outcome and impact on the local government sector. Ultimately, SALGA existed to improve the state of its member organizations, and there were members who wanted to withdraw from the Association. She asked for an elaboration on this aspect, as it was of concern to the Portfolio Committee, having previously called SALGA to account for the fact that out of 257 municipalities only 20 of them had clean audits.

There had been a memorandum addressed to the Minister regarding the Community Work Programme (CWP). She wanted to know if SALGA was aware of that memorandum, which had been written from the North West province, saying that it represented all the CWP workers in the country. The issue of labour relations in all municipalities was becoming very challenging, so SALGA had to elaborate on their role.  

Mr C Brink (DA) wanted to know if it was really responsible of SALGA to be talking about an improvement in the salaries of councillors if the goal was to control the public sector wage bill, including the salaries of municipal officials. He asked what specific qualifications the COO thought councillor candidates should have in order to qualify as the candidates of political parties. How important a priority was the professional accreditation of top management in municipalities to SALGA?

He asked whether the former Mayor of eThekwini still had a position in the national leadership structure of SALGA, as she had been a deputy president or deputy chairperson. If that was still the case, he wanted to know whether that did not send the wrong kind of message about consequence management to municipalities, as SALGA members. He also wanted to know if SALGA had any update on the Law Reform Commission (LRC) process, and whether the Association was in touch with the LRC.

The District Development Model (DDM) was part of all of the literature, speeches and statements of government, and there was finally some concrete information of what it would actually entail. The one issue that was not clear was how the ‘one plan and one budget’ process that was envisaged as part of the DDM would affect the autonomy of municipalities to conduct their own budgeting and integrated development plan (IDP) processes. The concern was that this might point to the usurpation of the autonomy and the power of elected accountable local authorities to do what needed to be done, because national government thought that if they took greater control of the process, things might improve. He wanted to know SALGA’s view of the situation, and whether they saw any threats and any risks of a conflict of interest in the autonomy in the full implementation of the DDM.

It was clear that there was unwillingness among SALGA members, especially in the very dysfunctional municipalities, to take decisive steps to collect revenue, and this was something that had started years ago. He wanted to know SALGA’s plan for the future to improve the ability of its members to collect revenue, and what the Association would do differently.

Mr G Mpumza (ANC) commended SALGA for their performance, and added that they must continue achieving as much and sustain their performances in order to set a good example for member municipalities. He also commended them on their initiative to create an incentive salary for the struggling municipalities. He wanted to know what was stopping them from having a full-time politician in the SALGA office, so that they could be in a position to execute their tasks. The review of the Organized Local Government Act was long overdue, and should have been done long ago, because in order for SALGA to perform there should be certainty on the budget allocation that went to it SALGA so that it could do its work. As long as it was reliant on member municipalities whose revenues had been impacted negatively by the pandemic, it would be difficult for them to raise their own funds.

Mr I Groenewald (FF+) wanted to know SALGA’s proposed plans to get municipalities back on track in respect of spending money on things that were within their functions.

The Chairperson asked that Ms Nkadimeng elaborate on the matter relating to the September 2019 high court judgments which had ordered the dissolution of the Makana Municipal Council, as the ruling would have serious practical consequences for all three tiers of government. She wanted to know how many of SALGA’s 257 municipal partners were currently creditworthy. What had prevented SALGA from reviewing the spatial transformation index, as envisaged in the 2019/20 APP?

In the previous financial year, SALGA had reported that they were in the process of delisting a schedule 3A public entity in terms of the Public Finance Management Act (PFMA), because the delisting would prohibit them from raising external funds. The 2019/20 annual report had not addressed this. She wanted to know what had happened to this attempt at delisting.

She also wanted to know whether SALGA was in an optimal position to extract consequence management in municipalities, given that the culprits contributed over 90% of SALGA’s total revenue, and some of their leaders were part of SALGA. She wanted to know the extent to which this constrained SALGA from biting the hand that fed it.

SALGA’s response

Mr Xolile George, CEO: SALGA, said the Association was in full support of the DDM model and did not have any reservations whatsoever. They did not view it as necessarily a district municipality plan, but rather as a district development that brought together all three spheres of government. There was certainty on the regulatory aspects, as well as the protocols within which the three spheres of government would interact, which would allow for alignment of execution. When one looked at the cycle of planning, municipal planning was different to national and provincial planning, as there was a three-month interval separating the three spheres. In that regard, SALGA felt that there must be a speedier process of ensuring that the next cycle of planning for municipalities should be scheduled to start now, before the next financial year kicked in in July 2021.

The area of participation was also very important, as for the last 20 years they had not seen much enthusiasm across the board in terms of the provinces and national participating meaningfully in the IDP planning processes. SALGA thought that for the IDP to succeed there must be combined certainty that the priorities of the province would find expression across all domains, including education, health and economic development, but also that the priorities of the national Department had to be set at the same time the IDP was developed. At the core, it was more about enhancing the maturity of the Inter-Governmental Relations (IGR) system, to be able to work together at the time of planning so that there was better alignment of resources, including National Treasury allocating resources on the basis of a district development plan.  

For revenue improvement in municipalities, SALGA had a priority programme they were working on with National Treasury and COGTA to look at the revenue enhancement mechanism. One of the areas for improvement involved the Municipal Property Rights Amendment Act, as well as the Municipal Financial Management Act, which had certain sections that may be expressly prohibiting municipalities from collecting revenue in areas where the land tenure system was not part of formalised planning, and this continued to weaken municipalities.

The legislative tools would have to be reviewed where there were weaknesses, regardless of the structural constraints, on billing systems. There were billing problems in many municipalities, and this continued to be an area of concern. SALGA had conducted a publicised study in 2017/18 involving an assessment of the billing systems across all municipalities, and had pointed out to the need for integration in many areas where there were inherent weaknesses. One would therefore see in some of the policy priority areas that SALGA were staying there must be a district revenue collection agency that could be linked to some of the data metrics assessment capability that SARS had. Perhaps with the advent of the DDM model, it could be one of the policy trusts that could be aligned to the DDM model to make sure that weaknesses in small municipalities did not go to and fro between offices, but could be addressed by having capacity across the board.

SALGA were not aware of the CWP memorandum. They had not seen it, and therefore could make no comment on it.

Referring to consequence management and accountability, Mr George said SALGA had informed the Committee in the previous financial year the work that had been doing in that area, including where they thought that there was a need to go beyond frameworks, and to start talking about protocols. For example, the central issue was that municipalities must be areas of minimum tolerance for transgressions. Whether in the domain of governance or the domain of the administration, the minimum issues had to be agreed on. SALGA was mindful that frameworks on their own did not necessarily carry any legal effect when transgressions were registered, so they wanted to graduate some of these frameworks into protocols so that the regulatory setup in the Municipal Systems Act (MSA), as well as the MFMA, could be revamped to the extent necessary to make sure that they could tighten on this issue. So far, when there was a transgression of the MFMA and the MSA, SALGA were not devoid of any tools. However, the general laxity in taking decisive action was the main problem, hence the inter-relationship resulted in SALGA not having executive authority over municipalities.

Regarding the delisting, SALGA had reported to the Committee before and had done a comprehensive assessment of the areas, and part of that had required them to engage with the National Treasury. Treasury had given a positive indication on their site to say that they had no challenge with SALGA being removed from the schedule 3A listing, because in their own view SALGA did not include any of the elements that were contained in the requirements of being a scheduled public entity whatsoever. It required concurrence, and SALGA’s leadership had brought the matter to the Minister of Cooperative Governance as part its briefing on 6 July 2019. Part of the reasons, as correctly pointed by the Chairperson of the Portfolio Committee, was that it was not only about ability to raise external sources of revenue, but also the ability of SALGA to execute its mandate as enshrined in the Municipal Systems Act.

The Chairperson said that there was a concern with regard to SALGA’s silence on the Community Works Programme, and why it was not reporting anything on the engagement with its own Department of Cooperative Governance on the CWP.

Mr George said that in respect of SALGA’s engagement with the Department of Cooperative Governance and the Department of Public Works (DPW), they had a working group that looked at areas around the leadership of the programme nationally, as led by COGTA, and participated in the development of areas of improvement for both DPW and CWP programmes.

Ms Thembeka Mthethwa, CFO: SALGA, responded to the question about fruitless and wasteful expenditure involving R3 000 by stating that the amount was related to invoices that had been received late regarding rates and taxes. They had been sent by the Kimberley office in relation to the building that SALGA owned, and even though they had sent the invoices late, SALGA had continued to pay the invoices based on their own estimations, but this had excluded the interest on the portion of the rates and taxes that they had not paid. SALGA were currently pursuing the matter to see if they could claim the interest, because the invoices had been received late from the Kimberly municipality.

Mr Rio Nolutshungu, Chief Officer: Municipal Capabilities & Governance, SALGA, said that the structure of SALGA subsumes from its legal status as an employer body registered with the Department of Labour, meaning that they provided work which was of a capacity building, representation and support nature. At the three levels of collective bargaining, there was collective bargaining at a centralised level that was undertaken to a registered bargaining council that operated within the sector, where transversal matters of representation were dealt with, such as salary and wage related methods, as well as conditions of service. There was also the provincial responsibility, where the bargaining council had delegated responsibilities that pertained to divisions of provinces, whether in metro municipalities in the original design, or in provincial jurisdictions where there were municipalities. There was also labor relations at the local level which was regulated through established structures, locally approved by councils, which were called local labour forums.

The matter raised by Ms Mkhaliphi involving Phongolo Municipality would need SALGA to go to the municipality and follow up by first going through a fact-finding exercise, and when municipalities needed to be to be advised properly on what to do, SALGA would then take that step. Should it be a matter that was out of the jurisdiction of SALGA as an employer body, they would bear the responsibility of reporting it to the appropriate agency, whether it was law enforcement or a regulatory matter. As soon as they had concluded those investigations, they would make the point of formally communicating back, including making it known to the Portfolio Committee how the specific matters had been resolved because in their nature, they required decision-making at a local level, or within the jurisdiction of a municipality. The employer body role of SALGA also meant they had to monitor compliance on just about every area that was related to human resources, labour relations, or from regulations that had arisen from COVID-19, or occupational health and safety.

To a very large extent, SALGA had played a very important role in influencing the landscape of professionalisation, in particular at the level of transforming administrations. They had affirmed the importance of leadership and, through a professionalisation framework that they had co-offered with COGTA, had also affirmed the importance of municipal employees -- not just senior managers, but also in various areas such as auditing, finance, legal and town planning. They had affirmed the need for all those employees to register with their professional organisations so that their conduct was duly regulated in terms of their employment contracts. From an advocacy point of view, SALGA had been very comprehensive in their view that it would take a whole lot of changes to effect the kind of professional dispensation they were looking for.

Having learnt from the experiences of COVID-19, SALGA would also take a cue from national and provincial governments as to what was best to do in terms of aligning their collective bargaining approaches and strategies in order to protect the government’s fiscus as a whole. There was no contradiction between the position they took for councilors. Although the areas of emphasis might not look similar, from the point of view of principles in financial sustainability, they were aligned in their positions.

Mr Joel said that SALGA had not been consulted in the process of determining the percentage increases for councillors, so they had played no role in that regard, but where they did play a role was once the Commission had made the recommendations and when the Minister developed the upper limits notice. Some of the discussions they had with the independent Commission and COGTA were related to the review of the remuneration of councilors, and a component of that review had been the development of role profiles, similar to what one had in both the public and private sector, where for every position there was a role profile. The Commission wanted to have role profiles for every type of councillor, meaning that if one wanted to be an Executive Mayor, one would have to meet the role profile of an Executive Mayor. The role profiles would indicate what type of person was required to cover a specific position within the municipality. SALGA had last engaged the Commission in November last year on the work that they were conducting at the time, and had not had follow up engagements with them and did not know how far the process was, but perhaps it was something that they would have to follow up on.

Regarding the Makana situation, SALGA had picked up that there was an increase in community organisations approaching the courts for assistance on matters related to service delivery involving their members. The first approach SALGA had taken was to engage with these community-based organisations. For instance, in January they had met with the team in Queenstown that had brought the action against Makana, because they felt that there was a way in which they could intervene in the matter by addressing the specific concerns of the community-based organisations. The second thing they had done was to engage with the municipalities directly, and told them they had met with the community-based organisations and that these were the concerns they had raised, and asked how they could respond to these concerns. The ultimate issues that were being raised by these community-based organisations had been resolved, not as directed by the courts, but through SALGA’s intervention. Most recently, on 23 October, the SALGA NEC had also interacted with Makana Municipality while on an oversight visit in the Eastern Cape, to also try to resolve the issues around the Makana municipality.

Ms Khomotso Letsatsi, Chief Officer: Municipal Finance, SALGA, referred to municipalities that were formally rated by Moody’s, and said it was basically six metropolitan municipalities that eventually used those ratings to tap into the bond market, which was a requirement. There was also one local municipality, which was the city of Mhlathuze. The Buffalo City and eThekwini metros did not have a formal rating from Moody’s because they had not really tapped into the bond market.

Regarding the municipal-owned enterprises (MOEs) and the East Rand Water Care Company, what SALGA had done in terms of the credit-worthiness programme was to take the credit methodology that was used for Moody’s as best practice to share with the rest of the municipalities, and workshops had been held in that regard. Because of the costs that were associated with soliciting credit ratings, the approach taken by SALGA with Moody’s was to embark on the process of developing a financial metrics assessment that was currently under way, where they subject the rest of the municipalities that did not necessarily have to tap into the bond market to the same credit rating methodology that Moody’s applied.

Referring to the issues around the unfunded mandate, she said it had become even more apparent how the various spheres had responded to the COVID-19 directives and the burden that had been placed on local government. SALGA had called for a budget locator, where they addressed performance in the past 20 years and some of the structural and policy issues that had to be amended going forward. They would be focusing on different areas, starting with a performance up-to-date, organisational inefficiencies and particular structural issues, as well as policy-related matters and the expenditure. The budget was scheduled for the first week of December, which would also address issues around municipal expenditure and the structural impacts, the infrastructure investment and asset management, as well as the sustainability issues and the powers and functions, and how they were allocated.

Mr Bongani Baloyi, NEC Member, SALGA, said that at times it may be a bit too simplistic to take the view that there appeared to be an unwillingness from some municipalities to collect revenue, because there were various factors that needed to be considered. One was that if one looked at the water and electricity trading services and the others, one would also find the municipality was not charging the real cost and passing it on to the end user, meaning that the municipalities bore the brunt of trying to cross-subsidise from various other trading services areas. There was therefore a need to have a deep reflection on the state of trading services across municipalities, because it had an effect into their revenue stream of income. There also needed to also be a reflection on the role of Members of Executive Councils (MECs) for the provincial treasuries and Departments of Cooperative Governance, because they played a significant role in the deterioration of municipal finances. One often found that when there was a conversation about how the municipalities got into their state, there was no form of accountability from the MECs of COGTA or Treasury.

Mr Bheki Stofile, NEC Member, SALGA, said that if one needed municipalities and government as a whole to respond to the challenges that were faced by our communities, how could one allow a situation where another level of government was allowed to reduce the water supply to communities in the middle of the COVID-19 pandemic. Experts said that people needed to wash their hands frequently, so how was this community expected to wash their hands regularly when there was no water? Having adopted a cooperative governance model, there were serious issues that needed to be looked at, because there was no voter that lived in a place called “national,” just as there was no voter that lived in a place called “province.” Every voter lived in a municipality, on a particular farm, or in a particular community, and therefore policies and approaches should seek to address the challenges that were faced by communities and use instruments of law to support and achieve the set objectives that would allow them to go back to voters and ask them to vote them back into office after the term had ended. There was something that was not really right in their approach on matters that affected their communities, where compliance was often just a tick-box exercise

In the report, SALGA were saying in the coming periods they aspired to engage different political parties because as an Association they received people called councillors, and others deployed by their various political parties in office. Their responsibility was to train them, to build them to understand the sector and deliver better service, and this was a problematic issue, because if the political parties themselves were not exercising their responsibility to hold their deployed councilor accountable and expected somebody else to hold them accountable, it did not result in a good outcome. SALGA could only do so much to lobby, advocate and represent, but nothing else beyond that. It was important to consider the importance of according some executive responsibility to the Association so that it could play an important role in making sure that municipalities performed the duties that they were supposed to perform.

Mr Mthobeli Kolisa Chief Officer: Infrastructure, Delivery and Spatial Transformation, SALGA, said that a key performance index (KPI) was about measuring the extent of spatial integration in municipalities and sharing that information with them, so that over time they could see as local government whether they were making progress in integrating their communities spatially. SALGA were working with the Council for Scientific and Industrial Research (CSIR) on that KPI, as it was a three-year project. In the course of the last financial year, a dispute arose between SALGA and the CSIR in relation to some elements of the final product that was to be published. They had had to engage on some protracted discussions with them until it was finalised, but in the process of resolving that matter, there had been a delay in implementation, so by the time they had finalised the parameter and published it, it was after the end of the financial year, and the target was missed.  

Ms Nkadimeng said that what was fundamental for the Committee with regard to the DDM was how its roll-out would be conceptualised and finalized, arising from all the district maps which had been done and the areas of enhancemen. This was because the intention of DDM was to ensure centralised planning, implementation, capacity development, and ultimately the delivery of services, which was what was key and had been lacking. Planning became central, but implementation legislatively still remained with local municipalities. In that way, SALGA did not foresee a process involving a conflict of interest, because the legislation was very clear on what the roles and responsibilities of each and every municipality were, whether district or local.

She assured the Committee that the former Mayor of eThekwini was no longer a councillor in eThekwini municipality, and was no longer a member of the Association.

Follow-up questions

Mr Brink said that in bargaining for municipalities, SALGA had to be careful that it did not undermine its negotiating ability or its credibility with organised labour. When asking municipal officials not to expect high pay increases, there must not be bargaining for more money for councillors beyond the annual inflation-adjusted increases at the same time.

Ms Mkhaliphi said it was not acceptable to just be told that the R3 062 in fruitless and wasteful expenditure was because of the late payment of invoices, and that the matter had been taken to the NEC and the NEC had just agreed. People had to do their job, as they were accountable for each and every cent that was public money. She wanted to know what SALGA would do after the 60-day period that they have afforded the mayors of municipalities to respond with an action plan on how they planned to deal with the unauthorised, irregular, fruitless and wasteful (UIFW) expenditures if the Mayors did not respond.

The Chairperson said that things had not changed in local governments, and even when control was taken away from local councillors there was not much change. She wanted to know what guarantee there was that things were going to change with the introduction of the DDM. Her question on conflicted interest had not been adequately responded to, because the issue of the municipalities’ finance management audit outcomes was very critical. The AG reports always reflect on municipalities’ lack of political leadership, lack of consequence management and malfeasance.

She wanted to know if SALGA was in an optimal position to extract consequence management in the municipalities, given the fact that the culprits that contributed over the 90% of SALGA’s total revenue and some of them were leaders and part of the SALGA NEC.

With regards to the response to the MFMA post-audit outcomes, she wanted to know the response of the NEC of SALGA, and whether there was any reason to justify SALGA’s continued existence.

SALGA’s response

Mr George said that the key issue was that if one looked at the 20-year trajectory of local government from 5 December in 2000 to 5 December 2020, part of that reflection involved looking at many interventions of a policy nature that had been framed around support for local government. The programmes had gone from project viability, to project consolidation, the five-year local government strategic agenda, the local government turnaround strategy of 2009, and ‘back to basics.” With all of these interventions in a row, they had not allowed the necessary policy traction in terms of the intentions around each of those areas. They had not changed, as they had focused largely on four core areas: governance and leadership, financial management, the responsiveness of local government, and capacity.

Where they may have been weak, was in allowing those interventions at the time of their determination to survive tenure transitions at the level of government, because every time there had not been a proper assessment to indicate what had failed in each element and what the next shift should be. Sometimes political realities tended to weaken even the best intentions in terms of execution.

They acknowledged the Committee’s point on the labour relations issue, and would formalise a response back to the Committee in respect of the salary increases. There was no doubt that in the local labour forums where the employer and employee meet, SALGA needed to strengthen their role as per the guidance of the Portfolio Committee, to make sure that they balance the role of the employer and also appreciate the role of employees in maintaining institutional equilibrium in the normal functioning of a municipality.

Mr Baloyi said that SALGA’s role was limited in terms of what they could do in municipalities. If SALGA kept receiving the quality of material or leaders that that it was receiving now, there would not be any improvement in the municipalities. Political parties, through their nomination processes and appointment of councillors or deployment, were the sole entry point that gave SALGA all the problems that they had in municipalities, as there was no benchmark, meaning that anyone who was anything could become the executive mayor or councillor. The issue was not only about local government -- there was a general crisis of governance in the country in national and provincial government, as well as the state-owned enterprises (SOEs). When SALGA meets for a two-day NEC, the first day is dedicated to the province where they are at and engaging with municipalities, and those engagements were by nature also extracting accountability, and having difficult conversations with member municipalities. It was important to recognise that SALGA did do its job in its NEC visits. Perhaps they should invite the Portfolio Committee in their next visit to a province. Municipalities needed to hold their leaders accountable when needed, as SALGA could not do so.

Mr Stofile said that SALGA was an Association that received people from somewhere, and that “somewhere” was the political parties. In the report, they had said they were eager to engage political parties, and part of the engagement was to point out how the quality of municipalities was being compromised. A proper process that would add value into the local government system should be considered. It was important, moving towards 2021, for SALGA to engage the various political parties. If one wanted want accountability, it was a dual and mutual interest between the Association and the political parties that constituted the councils, because it was not SALGA that contested elections, but it the various political parties. It was in the interest of these political parties to interact and engage the Association about the best mechanism to change the ball game. There must be a change of culture, tradition and approach from political parties that constituted these councils so that when they gave the sector people who could add value to local government development.

Ms Nkadimeng said that the reason why SALGA provided the different training for the councillors and the mayors of municipalities was mainly because they needed different skills in order to perform their expected duties, as their curricula vitae (CVs) were never requested by the political parties that appointed them to these positions. Political parties to a large extent had a responsibility to appoint people who were strong for specific positions, such as in community development. A diverse range of people was needed who would be able to suit the social and the economic profile of that municipality, aligned to the legislative profile of what the council needed.

SALGA was seeking accountability from municipalities in their response to the AG’s findings which he had brought to the NEC, as SALGA did not usually report about the audit outcomes themselves. The outgoing AG had come twice to the NEC to address issues at several municipalities, and had asked what SALGA could do generally to change the situation. SALGA did not have binding powers, but what they had was considerable respect from the municipalities, where they were able to advise in most instances, and that advice would be heeded because of political directives.

Chairperson’s concluding remarks

The Chairperson said that the Portfolio Committee was going to meet with the Department and the CWP on 27 November, and maybe after that they could allow SALGA to deal with some of the laws that needed to be reviewed. That would be a very good initiative as they came to the end of this term, and maybe in the New Year they could start sponsoring new legislation that the Committee itself could introduce and go the executive route, based on SALGA’s input. SALGA would be given an invitation after the meeting on the 27th so that they also dealt with the issues and legislation that they proposed should be amended.

The meeting was adjourned.