DCoG, DTA & MISA Quarter 4 2021/22 Performance, with Deputy Minister

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Cooperative Governance and Traditional Affairs

31 August 2022
Chairperson: Mr F Xasa (ANC)
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Meeting Summary

Video

In the virtual meeting, the Committee was briefed by the Departments of Cooperative Governance (DCoG), Traditional Affairs (DTA), and the Municipal Infrastructure Support Agent (MISA) on their fourth quarter performance for 2021/22. Each entity also updated the cost of private security employed/procured in the past five years.

DCoG reported that it had achieved 79% of its targets.

DTA reported that it had achieved 100% of its targets.

MISA reported that it had achieved 91% of its targets.

Members raised questions about having security as an in-house function instead of outsourced to a private company. Members asked MISA in what respect had their support improved rural municipalities and developed local industries to improve revenue and create jobs and discourage migration. Members wanted an update on the R7b unspent MIG funds as at the end of the 3rd Quarter and on the criminal charges to report that implicated the CEO of MISA in wrongdoing and what was the status of disciplinary processes in this regard. Members were concerned about MISA’s fruitless and wasteful expenditure interest payments to service providers. Members said the targets to reduce the losses on electricity and water should be achieved as this was the main revenue base of municipalities. Members said people participating in the Community Work Programme (CWP) claim they were not paid yet it was ticked as being achieved and that no training was conducted in this Programme. Members wanted a breakdown of the CWP numbers per province and per district, as well as that of the bursaries, learnerships, and support and training programs per province. Members asked what the Department’s remedial action in implementing the remodelled Agrarian Revolution Programme in traditional communities was. Members questioned the underspending in disaster relief grants. Members wanted an update on MISA’s engagement with Treasury to transfer rollover funds back to MISA. Members asked what awareness campaigns the Department had done and what workshops had been conducted in villages on customary initiation and what precautionary measures were in place to curtail deaths. Members questioned whether active participants were being paid in the CWP programme. Members raised the issue of illegal electricity sales in the Department’s offices.

Meeting report

The Chairperson said the government had committed itself to deal with service delivery issues within communities and the challenges relating to corruption and noted the issues raised on the Committee’s WhatsApp group.

Mr K Ceza (EFF) said the issues raised in the WhatsApp group were not to cause alarm but a reflection of violence against workers and blacks.

Ms H Mkhaliphi (EFF) proposed that the Committee meet to discuss the issues raised in the WhatsApp group.

Mr X Msimango (ANC) stated that while it was correct to raise issues, Members should not make political statements that would agitate other members.

EFF and ANC Members talked over each other.

On the issues raised in the WhatsApp group, Deputy Minister Ms Thembi Nkadimeng said that when the Department picked up issues, they dispatched teams to intervene or mediate.

Briefing by Department of Cooperative Development (DCoG)
Ms Avril Williamson, Director-General, DCOG, said the Department's overall performance for the 4th quarter was 79%. 27 out of 34 targets were achieved, and seven were not achieved which was a slight increase from the previous quarterly performance. Amongst the targets not achieved was for 52 One Plans to be developed by 31 March 2022, with only 40 district and six metro plans developed. Only 33 of the targeted 52 municipalities had included a target to reduce non-revenue electricity losses on their Service Delivery Budget Implementation Plans while only 29 out of 144 targeted municipalities have included a target to reduce non-revenue water as a target on their Service Delivery Budget Implementation Plans. In addition, no Community Work Programme (CWP) training was conducted for the period under review.

The Department’s Compensation of Employees (COE) budget was underspent by 6% which was attributed to vacancies in the Office of the Deputy Minister and high staff turnover at the SMS level. Local Government equitable share had been underspent by 2.3% because of withholding and stoppages imposed due to non-compliance by municipalities with conditions of other grants as defined in DORA. Disaster relief also underspent by 4.1% since they only transferred once province and municipalities depleted their allocation.

The extent and cost of security companies for the past five years totalled R55m split amongst three security companies.

The Department of COGTA appointed the Private Security Service Provider to render the following services:

-Provide physical security services by doing access control to five (5) buildings and two houses for National House of Traditional Leaders Chairperson and Deputy Chairperson

-Provide Tactical Response Team in case of strike or unrest to all five buildings

-Provide security equipment such as hand metal detectors, handcuffs, button sticks, X-ray machine, Walk through metal detectors, non-contactless access control system with scanners, two-way radios, and Press to Talk (base radios).

(See presentation)

Ms Mkhaliphi tendered her apologies as she had to attend another meeting at 10am.

Briefing by Municipal Infrastructure Support Agent (MISA)
Mr Ntandazo Vimba, CEO, MISA, said 9% of its targets were not achieved in the period under review. The number of youth enrolled in the MISA Experiential Learnership Programme was not achieved with only 39 out of a targeted 70 enrolled. The enrolment of the remaining 31 learners could not be concluded due to the non -completion of verification of criminal record checks and qualifications of the candidates. The process to conclude the enrolment of learners in the programme would be concluded during the first quarter of 2022/23 pending finalisation of the verification of criminal record checks and qualifications. Another target not achieved was the number of youth enrolled in the MISA Young Graduate Programme. Only 143 of the targeted 150 youths enrolled. The recruitment of the outstanding seven to fill the gap was done on time but due to delays in the qualification verifications. In the future, recruitment will be done far in advance to allow HR enough time to do verification of qualifications. The 3rd quarter target on the number of municipal officials enrolled in MISA the Recognition of Prior Learning programmes target of 100 was not achieved with only 57 municipal officials enrolled in MISA’s Recognition of Prior Learning Programmes as the other 43 enrolled candidates could not be technically assessed pending the appointment of a service provider. 80 additional candidates have been approved, enrolled in the Programme, and scheduled to undergo technical assessment. Fruitless and wasteful expenditure as at 31 March 2022 comprised interest charges for TV license of R2 058 and interest paid to a service provider of R525 862 making a total of R527 920.

On the extent and the cost of private security employed/procured in the past five years, MISA had spent R456 330.55 for the period 19 December 2017 – 05 May 2018; R2 363 580.00 for the period 08 May 2018 – 07 August 2020, and R2 588 099.04 for the period 08 August 2020 – 07 August 2022 making a grand total of R5,408,009.59.
(See presentation)

Briefing by Department of Traditional Affairs (DTA)
Mr Mashwahle Diphofa, Director-General, DTA,  said the Department had achieved 100% of its targets. He said security services were a shared responsibility with DCoG which had already presented this.

Overall spending was 90% of the total adjusted appropriated budget of R172 690 million.


The Commission on Khoi-San Matters (CKSM) was appointed late in the year and this contributed to low spending on Compensation of Employees as well as funded positions which became vacant during the financial year as a result of natural attrition and it took four months to fill a post. The under-expenditure on the Goods and Services budget where R24,586 million of a budgeted R39,027 million was spent resulted from nationwide lockdown restrictions to contain the spread of the Corona Virus. The under-expenditure of R1 million on Capital Assets was due to delays in finalising procurement of Departmental vehicles due to COVID-19 which negatively affected car manufacturing industries.

(See presentation)

Deputy Minister Nkadimeng said that she was not on the Whatsapp group but the Department needed to cooperate.

Discussion
Mr Ceza spoke about the shared responsibility of security between DCoG and DTA. He asked what the cost would have been if security had been an in-house function instead of outsourced to a private company. He said 44 districts supported by MISA had improved but in what respect had the support improved rural municipalities? How did MISA understand spatial development as opposed to private land development and the needs of rural municipalities to develop local industries to improve revenue and create jobs and discourage migration? What was the deadline for MISA enrolling learners? What was the update on the R7b unspent MIG funds as at the end of the 3rd Quarter? He asked about the criminal charges report that implicated the CEO of MISA in wrongdoing and what the status of disciplinary processes was.

Mr A Matumba (EFF) said that MISA’s fruitless and wasteful expenditure was very bad as it paid interest to service providers. What caused the delay resulting in such large amounts being paid as interest? Why were TV licences not paid on time? He said it was painful to see the amount paid to security companies while the public sector guards themselves were suffering. Why were millions spent empowering private companies when it could be done in-house? He asked DCoG for clarification on its 60% target achievement for the MIG allocation which he believed should be 100%. He said that the losses on electricity and water target should be achieved as this was the main revenue base of municipalities. He said people participating in the CWP claim they were not paid yet it was ticked as being achieved. How many were paid and how many were not paid? He said that it could not be that no training was conducted in the CWP programmes.

Ms E Spies (DA) said some of the targets were not very useful. Targets were being achieved but in the CWP’s case, it was not the situation on the ground. Members needed a breakdown of the CWP numbers per province and per district. In one case, a person was not paid yet her bank details were linked to someone else who was not in the programme. There was also the case of ghost workers. Why were non-achieving implementing agents being re-contracted? She wanted MISA to summarise the bursaries, learnerships, and support and training programmes per province.

On monitoring eight provinces in implementing the re-modelled Agrarian Revolution Programme in traditional communities, Mr G Mpumza (ANC) asked what the Department’s remedial action was as he knew that in one pilot programme area, it had collapsed because of disputes in traditional communities. He noted that DCoG had indicated in its 2nd Quarter briefing that it would likely underspend disaster relief grants as they would only be allocated after the municipalities had completely disbursed their disaster relief funds. He wanted an update on this. The 4th Quarter report indicated underspending of 4.1% on disaster relief funds. How was this possible in the aftermath of the flood disasters with a number of municipalities depleting their allocations and struggling to get funding? He wanted an update on MISA’s engagement with Treasury to transfer rollover funds back to MISA. MISA said it had supported ten district municipalities with their implementation and maintenance activities. What about the 34 district municipalities? Were they in good standing?

Mr Ceza said there were questions on conducting workshops in villages and the presence of precautionary measures in place to curtail deaths resulting from initiations. What awareness campaigns had the Department done?

On the investigations and disciplinary processes, Ms Williamson said the Department had provided the Committee with a report on 5 April with an update. The cases dated back to 2016/7 and were in the final processes regarding a case involving three senior managers.

On the use of outsourced security providers, she said the Department had a hybrid mix as the current cost of employment did not allow them to carry the full complement themselves. The budget was also decreasing over the coming years as related to the cost of employment and the Department thought the hybrid model was a more cost-effective approach based on the budget allocation.

Mr Pieter Pretorius, DDG: Corporate Services, DCoG, addressed the question on CWP and said that the people mentioned in the report were all people that had been paid. The Department could provide a breakdown of the participants per province and per site. In the recent past, the Department had struggled to pay participants on time because of challenges with the computer systems. There were ghost workers in the past but there had been a significant reduction and where these still occurred, the monies were recovered from the implementing agents. There were delays in this process which led to the training not happening.

On the comments about training, he said very strict rules about procurement were instituted.

On the disaster relief funding, Ms Ane Bruwer, Acting DDG: National Disaster Management Centre (NDMC) DCOG, said that in the previous financial year, there was underspending because provinces and municipalities had to use their own funds first. All disaster relief funds have been depleted in this financial year.

On the 44 districts that were supported and how this affected rural municipalities, Mr Vimba said MISA’s mandate focused mainly on rural municipalities and the support was for 219 municipalities in the 44 districts and MISA could share with the Committee the details of its support.

On the question of spatial development, he said MISA deployed town and regional planners to assist with spatial planning, which would contribute to building the economies of municipalities.

On the deadlines in slide 12, he said the process to conclude the enrollment of learners would be concluded in the first Quarter of 2022/23 pending finalisation of the verification of criminal records.

On the question that related to him specifically, he said MISA had provided a report to the Committee.

On the breakdown of bursaries, learnerships and training, he said there was a report on this that could be shared with members and MISA always tried to ensure that its support was spread amongst all the provinces, especially the rural and poor districts.


In reply to Mr Mpumza, he said MISA was engaging Treasury on the rollovers and was awaiting Treasury’s response.

On MIG expenditure at the end of the 4th Quarter, Mr Allan Zimbwa, Deputy Director General: Technical Support Services, MISA, said that nationally it stood at 60% of the total.

In reply to Mr Mpumza on operations and maintenance activities, he said the APP only provided support to ten municipalities because of limited internal capacity but direct support was provided when indicated by MISA’s assessments.

On the spread of MISA’s programmes regarding experiential learners, he said the challenge to having a countrywide spread was that municipalities were not keen on taking up the experiential learners. They prefer learners who can assist with the work like young graduates and MISA tried to spread nationally.
                                                                               
On fruitless and wasteful expenditure relating to TV licences, Ms Fezeka Nombembe, Chief Financial Officer, MISA, said it was because the statement and invoices were sent to an official that had left the organisation. An investigation was underway and if officials were found to be responsible, then there would be attempts to recover the money.

On the litigation case involving approximately half a million rand against a travel management service provider company, MISA lost the case and the interest that had to be paid was because of the court ruling. It was not because of delays in the payment of invoices.

Regarding security services, Ms Refilwe Mathabathe, Chief Director: Corporate Management Services, MISA, said that MISA had spent R24m on three contractors over the last five years on security services.

On incorporating security services into MISA, she said the concerns were noted on how guards were treated and would have internal discussions on it and with DCoG and DTA as there would have to be consistency.

On the MIG and the percentage placed as a target, Ms Williamson said the disjuncture arose because the national financial year was March, while for municipalities it ended in July.        

On revenue lost on water and electricity losses, Ms Williamson agreed and said that municipalities had to collect the revenue due to them.

Mr Mbulelo Sigaba, Chief Director: Operation Clean Audit, DCoG, said the Department had sought to understand how municipalities were prioritising the reduction in the water and electricity tariff losses. The municipalities had already adopted their budget and had not put the monitoring of the reduction of the losses as a target. Subsequently, it had been conveyed that this should become an indicator.

On the projects that the Department monitored in traditional communities, Mr Diphofa said the challenges varied and the Department’s role was to be the agent of good practices and facilitate partnerships. In the case of disputes, the Department worked with its provincial counterparts. He said the National School of Government had developed a training programme on socio-economic development in traditional communities and had agreed to broaden the initial pilot programme to include provincial counterparts.

On whether there was awareness raising on initiation, he said the introduction of the customary initiation act in September 2021, meant there was not enough time for the raising of awareness, but going forward, there would be more awareness raising with the establishment of the new houses of the traditional and Khoisan leaders.

On non-payment of CWP workers, the Chairperson said that what was being tested was the responsiveness of the Department to issues being raised to the satisfaction of the workers. The second issue he wanted to raise was the fact that some councillors did not receive their IRP5 certificates.

Mr Matumba said the answer of the Department was centred around a cost-effective approach, but nothing was said about the well-being of security guards. What did cost effective mean when it was expensive to hire security companies yet security guards were suffering? It could not be that what was done to security guards was worse than what was done under the apartheid regime.

He said MISA had to close shop and the money be redirected to municipalities directly. How could there be under expenditure because of vacancies and young people were looking for jobs? How could funds be surrendered because it was not budgeted for?

On the security guards issue, Mr Ceza said the question was what action the Department would take to curtail the situation because everyone had a right to dignity. What were the disciplinary processes that were underway regarding the three cases of financial irregularities? He asked where the public management of the municipalities was on refuse removal, electricity, and water. He said the tender system allowed for corruption and political manipulation. He said people resigned before section 106 reports were implemented and went elsewhere.

Ms Spies said her question was not answered. Her question was whether active participants were being paid as the was a record of payments to people but were they working actively in the program? She was raising issues because daily, these issues were being brought to her attention.

Mr Matumba said people selling illegal electricity were on the increase. Could the Department investigate these people selling illegal electricity as it was happening in their offices?

Mr Mpumza said people in Port St Johns said people were buying 200 units electricity for R500 from Gauteng in Port St Johns. He wanted an update on the 13 district DDM One-Plans that are still to be finalised. On technical support in planning to the Alfred Nzo district, he said there was a project that had started in 2012, in which 500 households were supposed to benefit, but was still not completed. He said on the Wild Coast, there was a scheme that was a “black elephant” and had not rendered water.

On the issue of the disciplinary cases, Ms Williamson confirmed that disciplinary matters were ongoing and awaiting the report from the chairperson of the disciplinary committee.

On the issue of the active participants in the CWP, Mr Pretorius said all the participants over the past two months were paid before the end of the month. The team was comprised of 10-15 people and they could not monitor 250 sites and 6000 sub-sites to see whether people on the time sheets actually did work. The payments were based on the time sheets. If there was feedback that people were not doing the work but signing timesheets, this was investigated and surprise visits conducted. In these instances, the implementing agents were held to account. The list of payments at each site had been circulated.

On the issue of security companies, the Department used a mixed model where some security guards were permanently employed while others were outsourced to security companies and the Department monitored their treatment through interviews.

On operations and maintenance, Mr Sigaba said that in the budget forum, there had been a report submitted that discussed the implementation of asset management by municipalities which included maintenance as municipalities had been using the maintenance budget for other purposes, hence the dilapidated state of infrastructure.

On the non-payment of electricity and water supplies, he said non-technical losses through theft and meter inaccuracies were being addressed by Eskom introducing smart metering to reduce theft. He added the Department would investigate the cases in Port St Johns that Members of the Committee raised.

On the issue of surrendering monies to Treasury, Mr Vimba said the surrender happened in the context of the previous financial year and were monies committed to running projects. MISA was treated as a trading entity by Treasury and therefore was allowed to retain surplus funds, but in this instance, Treasury had decided not to approve the retention of funds. This has impacted the status of MISA as a going concern in this financial year. In addition, MISA only received the money in November that was expected to be spent by March. Many municipalities were dependent on the support MISA was providing.

On the Alfred Nzo municipalities scheme, he said the bulk infrastructure planning was ahead of the reticulation planning. The municipalities had implemented the project in stages because of funding challenges. The scheme was still being implemented and MISA was working with the municipalities to augment their capacity.

He asked his team to investigate Mr Mpumza’s query on the Wild Coast scheme.

On people buying 200 units of electricity for R500 in Port St Johns, he said the team would follow it up with the Department.

Mr Diphofa said that serious concerns were raised on the issue of security staff, and it was a challenge that the Department should accept to ensure proper treatment of security by the companies to ensure they were held accountable for fair employment practices.


Deputy Minister Nkadimeng said she wanted to emphasise a few points. The first was the issue of the disciplinary case. In March, the Committee had requested a report and in April, that report was forwarded to the Committee thoroughly detailing issues raised by the Committee. The Department had offered a response. Secondly, on the issue of the insourcing of security services, she said it was not affordable to fully insource security services based on the Department’s allocation. The Department could not even tell municipalities how to recruit. Thirdly, on the CWP, she apologised and said there had been a mix-up with the banking details for a recipient where a query had been lodged and areas needed improvement. Fourthly, on the district plans, she said some districts were reluctant to submit their plans and one metro even wrote that it believed the Department was interfering when it tried to assist in their planning. She said the implementation of one plan by some municipalities was not fully comprehended in that it encompassed all spheres of government in terms of consolidated planning. The number of outstanding plans to date has decreased from 13 to nine.

The Chairperson said there must be a meeting on how the Committee communicated with the Department. He said the Committee was not doing a consistent follow-up on the issues it raised and this needed improvement. He emphasised the importance of consequence management when there is wrongdoing. He said insourcing was a policy matter and improvements on the CWP. He added there were specific tasks to be completed regarding public education on the Customary Initiation Act.

The meeting was adjourned

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