Section 139 Interventions: uMkhanyakude District Municipality; Mntubatuba, Abaqulusi, Umzinyathi and Mpofana, Inkosi Langalibalele, Uthukela and Umsunduzi Municipalities

Meeting report

The Committee met with the KwaZulu-Natal Department of Cooperative Governance and Traditional Affairs (KZN COGTA) in a virtual meeting to receive briefings on progress of implementation of Section 139 (1)(b) interventions in uMkhanyakude, Mtubatuba, Abaqulusi, uMzinyathi, Mpofana, Inkosi Langalibalele, uThukela and Msunduzi municipalities.

COGTA reported that the Provincial Executive Council had placed the eight municipalities under intervention in terms of Section 139 (1)(b) of the Constitution for reasons that included failure to spend infrastructure grants, lack of consequence management, poor cash flow, supply chain management challenges, poor audit outcomes, maladministration, failure to appoint senior management, allegations of fraud and corruption, and incomplete projects.

Over the years, the Provincial Government noted a growing tendency by some municipalities to resist the Section 139 (1)(b) interventions by approaching the courts, a case in point being the Abaqulusi, EMadlangeni and Nquthu municipalities.

In Mtubatuba, political stability had remained a major challenge. Mtubatuba had been technically insolvent around 2016/17 and progressed into a solvency position. In uMkhanyakude, a motion of no confidence against office bearers had been tabled. New political leadership from the IFP had been elected without a notice being sent to the Member of the Executive Council (MEC) of COGTA. The municipality had adopted an unfunded budget for the 2021/2022 financial year with a deficit of R117 million. In Abaqulusi, uMzinyathi, Mpofana, Inkosi Langalibalele, uThukela and Msunduzi municipalities, the councils and their structures had been established, were stable and functional. The municipalities still had other challenges, and the Department did not doubt that the eight municipalities under intervention still required intensive support to improve their performance.

Political and union leaders from the respective municipalities were also given a chance to express their views on progress of the municipalities ever since being placed under administration. The leaders from all of the municipalities, except Abaqulusi, made submissions. Some requested that Section 139 (1)(b) interventions be removed, while others requested the interventions to be extended. Some of the municipal leaders claimed that the administrators assigned to their municipalities had been the cause of regression in performance and had to be removed.
 
The Committee commented that those municipalities indicated that they needed further intervention. It would be good for the other municipalities to appreciate the work done through the interventions. Some municipalities, like uMkhanyakude, did not want the intervention even though their performance had shown significant improvement while under administration. The Committee asked whether those municipalities were denying the existence of the issues that the Auditor-General’s report had raised. Did they deny that some municipalities had been galvanised by infighting and had political instability and corruption?

Some municipalities had been under administration from as far back as 2016. Over time, some had been removed from Section 139 (1)(b) intervention and started regressing again -- how would the MEC deal with that and correct it? The majority of problems in the dysfunctional municipality were a result of political instability -- how would the MEC permanently correct the issue of political instability since it was a problem that had persisted for years? Some concerns raised by the municipalities were about the administrators, and without worrying about whether those concerns were true or not, the question was, what action would be taken?

The Department noted the comments from the Committee and provided answers where possible. It promised to submit detailed reports on each municipality to help the Committee make informed decisions about which municipalities would remain under intervention and which ones would be removed.

The Chairperson said the discussion had been very important because it was in the best interest of the Committee that the situation in the municipalities be stabilised so that services could be delivered to the people and so that accountability from municipal leaders could be ensured.

The Committee would sit down and deliberate on the issues discussed in the meeting. There was a need for the Committee to visit the municipalities under discussion to ensure that it made informed decisions.  

Meeting Report
The Chairperson said it was clear that there were a number of municipalities in the KwaZulu-Natal (KZN) province that had been placed under administration in terms of Section 139(1)(b) of the Constitution. The Committee planned to visit the province from 15 April 2022, just before the floods that affected the area, to deal with said interventions and assess the implementation of interventions. The purpose of the meeting was for the Committee to receive briefings on the progress of implementing the interventions.

The Committee sent its condolences to the families of people who lost their loved ones during the floods. The floods had taken lives and destroyed infrastructure, amounting to billions of rands and displaced people from their homes. The National Assembly and the National Council of Provinces (NCOP) had set up an ad hoc committee to focus on the floods that ravaged KwaZulu-Natal, the Eastern Cape and the Northern Cape. The Committee was composed of Mr S Zandamela (EFF, Mpumalanga), Ms S Shaikh (ANC, Limpopo), and the Chairperson, Mr C Dodovu (ANC, North West).

The focus of the meeting today would be on uMkhanyakude, Mtubatuba, Abaqulusi, uMzinyathi, Mpofana, Inkosi Langalibalele, uThukela and Msunduzi municipalities. It was unusual to have so many municipalities placed under administration by their Provincial Government in terms of Section 139 (1)(b). A Provincial Government would invoke Section 139 (1)(b) when, in its view, a municipality was unable to fulfil its executive obligations under the Constitution. The Department of Cooperative Governance and Traditional Affairs (COGTA) would brief the Committee on why the municipalities had been placed under administration and the current state of affairs in those municipalities.

MEC's opening remarks
Mr Sipho Hlomuka, Member of the Executive Council (MEC): KZN COGTA, said there were, indeed, a number of municipalities that were under Section 139(1)(b) administration. Some of the municipalities had faced political instability since November 2021, which had compromised their functionality. It was worth mentioning that some municipalities that were not under Section 139 (1)(b) were also facing challenges in being operated by a coalition government. The previous day, there was a meeting in uMuziwabantu Municipality where councillors had disrupted the meeting and even tried to fight with the municipal manager. However, the presentation of the Department would be confined to the municipalities that were under Section 139 (1)(b).

MEC Hlomuka said the Provincial Executive Council (PEC) had placed eight municipalities (uMkhanyakude, Mtubatuba, Abagulusi, uMzinyathi, Mpofana, Inkosi Langalibalele, uThukela and Msunduzi) under intervention in terms of Section 139 (1)(b) of the Constitution. The interventions in each municipality had commenced at different times between 2016 and 2020 and had different timeframes. The reasons for each municipality being placed under the intervention varied by municipality but had included failure to spend infrastructure grants, lack of consequence management, poor cash flow, supply chain management (SCM) challenges, poor audit outcomes, maladministration, failure to appoint senior management, allegations of fraud and corruption, and incomplete projects.

The Provincial Government and National COGTA, through the Municipal Infrastructure Support Agent (MISA), had deployed various experts in municipal finance, infrastructure, and governance in support of the Executive Council’s interventions in those municipalities. Over the years, the Provincial Government noted a growing tendency by some municipalities to resist the Section 139 (1)(b) interventions by approaching the courts, a case in point being the Abaqulusi, EMadlangeni and Nquthu municipalities.

Progress in implementation of intervention plans as of the end of April 2022
Mtubatuba Local Municipality
Political stability had remained a major challenge in the municipality and had been epitomised by constant walkouts, failure of meetings to form quorums, and frequent changes in political offices. There were matters concerning the municipality's leadership still pending in the courts.

The municipality was technically insolvent at around 2016/2017 and progressed into a solvency position, where assets exceeded liabilities and were now above the norm at 2.6:1. Cash flow coverage in the municipality had been negative for many years, and the intervention had assisted in turning the situation around.

Expenditure of the Municipal Infrastructure Grant (MIG) expenditure was at 100% at year-end. In the 2021/22 financial year, there were some observed delays in implementing projects. Upon enquiry, the technical Department attributed the delays to bid committees' SCM decision-making, which had not been speedily forthcoming. The challenge was attended to, hoping that results would be achieved in due course and that acceleration plans would be developed.

uMkhanyakude District Municipality
0n 3 May 2022, a motion of no confidence against office bearers was tabled, and new political leadership from the IFP was elected. The Acting Municipal Manager (AMM) was suspended and a new AMM was appointed. Following the meeting with councillors, it became clear that the process to convene the meeting purported to elect new office bearers at the municipality had been flawed and stood to be set aside by a court of law.

The municipality had adopted an unfunded budget for the 2021/2022 financial year, with a deficit of R117 million. Although a concomitant budget funding plan existed, there was a tendency not to stay within the plan's commitments. The audit opinion for 2020/21 had regressed to a disclaimer, as the annual financial statements were submitted late; poor record-keeping and repeat findings were also highlighted in the report.

The Department of Water and Sanitation had issued a directive to take over the water function from uMkhanyakude and utilise the services of uMhlathuze Water. uMkhanyakude was opposed to that move and there were still ongoing negotiations. The municipality has recorded poor performance in its Water Services Infrastructure Grant (WSIG) spending for three years.

Abaqulusi Local Municipality
The Council and its structures were stable and functional. The municipality had launched a high court application challenging the status of the intervention at the municipality.

The municipality had a surplus of R70 million, which indicated that its expenditure was within its budget. It had a funded budget for the 2021/2022 financial year.

The Abaqulusi Municipality and Zululand District Municipality had entered into an interim short term agreement on 11 December 2020 regarding the water services provider status of Abaqulusi local municipality (LM), pending the finalisation of a long term solution. The matter was anticipated to be finalised in June 2022.

uMzinyathi District Municipality
The Municipal Council and its committees had been established and were currently stable.

The municipality had received disclaimer audit opinions from the Auditor-General (AG) for the previous two consecutive financial periods. It had received a qualified audit opinion in the 2020/21 financial year, which was a slight improvement. It had approved an unfunded budget with a projected deficit of more than R569 million and had developed and approved funding plans for the next three years to improve its financial status.

To improve water access in the district, COGTA facilitated the construction of 20 production boreholes and an additional 25 hand pumps.

iNkosi Langalibalele Local Municipality
The Council and its committees were stable and the majority of senior management positions were filled, except the Municipal Manager, who had recently resigned on 12 April 2022.

The municipality had approved an unfunded budget for the 2021/2022 financial year. It was up to date with its accounts for Eskom, and only the water board was in arrears.

Human Settlements projects had all been unblocked and were in various stages of implementation, in line with the Department of Human Settlements’ processes.

uThukela District Municipality
The Council and all committees had been established, and they had remained stable and functional.

The municipality’s 2020/21 budget was unfunded and had a deficit of R244 million. It had developed and submitted a funding plan to the Provincial Treasury, which assessed and confirmed the plan to be credible.

The municipality had partnered with Rand Water and had drilled boreholes to address the water shortages in the Okhahlamba municipal area, and the project was complete.

Msunduzi Local Municipality
The Council and its committee structures -- EXCO, portfolio committees, Municipal Public Accounts Committee (MPAC) and TROIKA -- were fairly stable and all 41 ward committees had been established.

The municipality had received an unqualified audit opinion in 2020/21, which was an improvement from the qualified audit opinion it had received in 2019/20. Management resolved 63% of the matters raised by the AG during the 2019/20 audit, while the balance of 37% was still in progress.

The municipality was in the red zone regarding basic service delivery, at 60.68% of MIG expenditure by the end of February 2022. The sewage infrastructure required critical and emergency attention to prevent an environmental disaster.

Mpofana Local Municipality
The Council and all committees had been successfully established and were currently stable.

The municipality had an unfunded budget in the 2021/2022 financial year and had developed a finance recovery plan. In terms of the plan, the municipality anticipated having a funded budget by 2028/29 due to the high Eskom debt.

The municipality had been the best MIG expenditure performer, sitting at number 1 in the province, with 100% already spent. An additional R5 million MIG had been approved due to its outstanding performance.

Conclusion
The Department did not doubt that the eight municipalities still required intensive support to improve their performance, even though visible improvements were noted in Msunduzi, Mpofana, Inkosi Langalibalele, uMzinyathi, uThukela and uMkhanyakude in terms of advancing beyond the triggers that had resulted in administration. There were remaining challenges that still needed to be addressed in those municipalities. The National Treasury had expressed an intention to place Mpofana, UThukela, UMzinyathi and uMkhanyakude under Section 139(5) of the Constitution to assist those municipalities in addressing their financial challenges.

The Chairperson asked MEC Hlomuka to confirm that the purpose of the presentation was for the Department to give the Committee an update on the progress of the municipalities placed under Section 139(1)(b) of the Constitution.

MEC Hlomuka confirmed that that had been the purpose of the presentation.

The Chairperson said that the political representatives of each municipality would be given the opportunity to raise issues about their own municipalities. The unions in the municipalities would also be given the opportunity to raise their concerns.

Submissions from municipalities' political and union representatives
Mtubatuba Local Municipality
Mr Mxolisi Mthethwa (IFP), Mayor of Mtubatuba LM, said the municipality had a new council, of which he was a part, and that all the issues the MEC had presented had arisen while it was under administration. The problems “took place right under the administrator’s nose.” Which steps had been taken by the MEC to address that? Mtubatuba was very much functional and stable, as opposed to what the MEC had presented. All 45 councillors attended the Portfolio Committee meetings, and the MPAC and the Executive Council were all functional.

Mr I Sileku (DA, Western Cape), on a point of order, requested that all the political leaders that were to speak should indicate which political parties they were representing.
The Chairperson said the point of order was sustained.

Mr T Xulu, Municipal Manager: Mtubatuba, said the municipality’s Council was functional. The Committee would recall that municipality had some challenges from November 2021 to January 2022, but those challenges had been resolved as of February 2022. The municipality was engaging in one-on-one meetings with the Department of COGTA, which indicated it was happy with the progress at the municipality. It had also managed to spend 100% of its MIG and was working towards completing all its projects. Two projects were still pending completion in the municipality. The main problem was that Mtubatuba had been under intervention since 2019, but there were no visible changes in the municipality’s audit outcomes, as it had been receiving qualified audit opinions.

The Chairperson clarified that the municipalities had been placed under interventions at different times and for different periods, and the Minister and NCOP approved the interventions. The purpose of the meeting was for the Committee to receive a status report of each intervention. The Committee wanted to use that information to establish whether the interventions should continue in the respective municipalities.

uMkhanyakude District Municipality
Mr Killer Mkhwanazi (IFP), Deputy Mayor of uMkhanyakude DM, said the municipality had been placed under the Section 139 (1)(b) intervention on 8 February 2021 and was due to last for 12 months. The problem was that the municipality’s performance had worsened when it was placed under administration, and the administrator had never reported it to the municipality. While under administration, it failed to spend R64 million of its MIG and R40 million of its WSIG - the administrator was the cause of that.

There had been a lot of interference by the MEC in the work of the municipality. As a result, seven contracts were cancelled and 15 consultants were removed from the municipality. These service providers had taken the municipality to court and won, resulting in R108 million "in damages” that had to be paid out by the municipality. The MEC had been hindering the municipality's progress and interfering with the election of council leaders. The IFP had an overwhelming majority and was ready to take the municipality forward without any need for a coalition or interference from the KZN COGTA.

On a point of order, Ms Zinhle Cele (ANC), Chairperson of the COGTA committee in the KZN legislature, said the Department could not afford to sit and listen in a meeting where the MEC was being “bashed” by councillors. The bashing would cause the Department to defend government decisions taken in the municipalities, especially in uMkhanyakude.

The Chairperson said the concerns of Ms Cele were heard, but for that part of the meeting, the Committee was allowing everyone to speak freely and the KZN COGTA would also be given an opportunity to express its views.

Msunduzi Local Municipality
Mr Mzimkhulu Thebolla (ANC), Mayor of Msunduzi LM, said there had been a huge improvement in Msunduzi. In 2019 and 2020, the municipality had received qualified audit opinions, but it had managed to receive an unqualified audit opinion in its last audit outcomes. There was a need to give more attention to the development of the municipality’s financial recovery plan, should the intervention be continued, as this was important in bringing financial stability to the municipality. In recent months, it had faced challenges with electricity and water supply due to the “disaster in the main”, but the real challenge remained that of achieving financial stability. The municipality was a “hungry municipality” but had political stability and had managed to carry out its work without being in a coalition.

uMzinyathi District Municipality
Mr Petros Ngubane (IFP), Mayor of uMzinyathi DM, said the municipality was done with the intervention programme and requested that the Section 139 (1)(b) invocations be removed. It had received a qualified audit opinion in its last financial statements, and he promised that it would achieve an unqualified audit opinion in the next financial year. The municipality had met most of the requirements of Section 139 (1)(b) and had managed to achieve political stability. The only outstanding issues were filling vacant posts and doing away with the unfunded budget. 

Mpofana Local Municipality
Ms Maureen Magubane (ANC), Mayor OF Mpofana LM, said the municipality had three administrators. There had been slight improvements, and it was still under administration. The municipality still needed the Section 139 (1)(b) intervention to continue so that it could add to its improvements. For two terms, the municipality had received qualified audit opinions and there were seven issues the municipality had to improve on before it could achieve unqualified audit opinions.

uThukela District Municipality
Inkosi N Shabalala (IFP), Mayor of uThukela DM, said the municipality had been under administration for some time and received qualified audit opinions. The administrators assigned to the municipality had not made any significant improvements. Under administration, the workers claimed unnecessary standby and overtime work, accounting for more than 100 hours per month, valued at more than R3.7 million. The new Council had been working on diminishing the unnecessary overtime claims, as there had been no actual work done to complement the claims. The new Council had also noted that there had been irregular monthly expenditure on the municipality’s fuel and maintenance budget, valued at R4.1 million, and was working to eradicate that because there had been no evidence of the municipality’s fleet being serviced frequently.

The administrator had not been able to pick up on those issues, leading to the Council having little confidence in the municipality being placed under administration. The then Municipal Manager, Mr Sithole, had resigned after being interrogated about the money spent on fleet maintenance without actual proof of the maintenance being done or being required on the municipality’s fleet. There was an acting Municipal Manager, and the post of Municipal Manager was due to be advertised in the coming weeks. The then General Manager (Technical Services) had also resigned upon being interrogated on municipal projects that had not been completed but had been funded. The General Manager (Cooperate Services), who was “a brother to the MEC” and was in charge of the fleet maintenance, resigned after being asked to account for the amounts spent on fleet maintenance.

Mr E Mthethwa (ANC, KZN), on a point of order, said it was inappropriate for inkosi Shabalala to state unnecessary information, linking the MEC to the municipality’s then General Manager (Cooperate Services) as “a brother to the MEC.”

The Chairperson sustained the point of order and asked inkosi Shabalala to only state “things that are necessary”.

Inkosi Shabalala continued that the new Council worked hard to ensure that services were delivered to the people and had managed to resolve the water supply issue. There was no need for an administrator in the municipality, given that the administrator could not pick up pertinent issues that cost the municipality millions. In the future, the municipality will be in a much better state than it is currently in. There were plans in place to bring about dynamic change.

iNkosi Langalibalele Local Municipality
Mr Mduduzi Myeza (IFP), Mayor of Inkosi Langalibalele LM, said the municipality had 47 councillors and was operating under a coalition government with the DA and the EFF. It had been under Section 139 (1)(b) since 2017 and there had been few improvements realised. The Executive Council sittings were operating normally, and the municipality felt there was a need for the Section 139 (1)(b) interventions to continue.

South African Municipal Workers’ Union (SAMWU)
Mr Thobani Mkhize (SAMWU, Inkosi Langalibalele LM) said SAMWU appreciated that COGTA could identify the municipalities having difficulties and assign administrators. COGTA should not allow itself to be told by "a sick individual” when the medication should be administered. iNkosi Langalibalele was grateful for the administrator and was hopeful that the municipality would be ready to get out of the intervention in the next financial year.

Independent Municipal and Allied Trade Union (IMATU)
Mr Simphiwe Sikhakhane (IMATU, Inkosi Langalibalele LM) said the intervention in terms of Section 139 (1)(b) was not assisting Inkosi Langalibalele. Since 2017, instead of improving, the municipality’s performance regressed as far as the audit findings had been concerned. What sort of mechanism had been used by COGTA in appointing the administrators?

Mr S Ntuli (IMATU, Mtubatuba), referring to the situation in Mtubatuba, said the administrator and the then Municipal Manager had been threatening employees to not go on strike. There had been a lack of trade tools for use by employees, causing a need for embarking on strikes, but the workers could not strike, and most of them had been suspended for retaliation. The intervention of the MEC in Mtubatuba was seen as employment generation for retired or former senior officials. The union did not see the need for an administrator in Mtubatuba, as the employees were being compromised.

KZN COGTA
Ms Cele said that the Members of the Committee, together with the Minister, had approved the Section 139 (1)(b) interventions. It was worth noting that the Municipal Managers and the chief financial officers (CFOs) had to be held accountable for the regression that had been happening in the municipalities. In uMkhanyakude, the biggest issues had been caused by the councillors, who could not pass the budget, and the Committee had gone there last year to intervene. It would be great if all the municipalities could have the same attitude as uMzinyathi and Msunduzi. Both indicated that they were interested in improving what needed improvement instead of coming into the meeting bashing the MEC and the administrators. It had been a problem that the unions representing Inkosi Langalibalele LM had been opposing the intervention when it had been clear that the municipality had issues in managing its finances. The municipality had not been able to generate cash flow and would not be able to sustain itself.
 
The submission by inkosi Shabalala had been degenerating and uncalled for, but that would be left as discussion for another day.  

Committee Members’ comments
Mr Mthethwa asked whether the municipalities were denying the existence of the issues that the Auditor General’s report had raised. Did they deny that some municipalities had been galvanised by infightings and had political instability and corruption? Could each municipality provide the Committee with a report on how they would improve on the AG’s report?

Mr N Hadebe (IFP, KZN) said uMzinyathi had identified the challenges that needed to be resolved and had promised to improve on those; that was welcomed. The work of the municipality was worthy of applause. The Mayor’s presentation was impressive, and the Committee had to consider taking uMzinyathi out of Section 139 (1)(b) intervention.

Ms N Nkosi (ANC, Mpumalanga) said some municipalities had indicated that they needed further intervention. It would be good for the other municipalities to appreciate the work done through the interventions. Some municipalities, like uMkhanyakude, did not want the intervention even though their performance had shown significant improvements while under administration. uMkhanyakude had complained that the administrator had cancelled the contracts of close to 13 consultants; the Committee could not allow for the municipality’s service delivery money to be spent on so many consultants -- that was unacceptable. iNkosi Langalibalele indicated that it needed further interventions, but the unions had different opinions, and the contradiction posed a very serious problem.

Mr Sileku said it was concerning that some stakeholders had not been present in the meeting. There were members of the Provincial Legislature who were present but had not made any submissions. It was important for the Committee to hear the views of everyone involved in the municipalities. The situation looked like “there are a lot of patients who are sick, but they do not want to take the medication because they do not trust the doctor.”

Some municipalities were under administration from as far as 2016 and over time, some were removed from Section 139 (1)(b) and started regressing again. How would the MEC deal with that and correct it? The majority of problems in the dysfunctional municipality were a result of political instability -- how would the MEC permanently correct the issue of political instability since it was a problem that had persisted for years? On slide 6, showing the summary of the reasons for municipalities being placed under intervention, were those the reasons dating from the past or were they the status quo? There was lack of consequence management in local government. The Committee needed to obtain the report on the MPAC investigations and consider it before deciding which municipalities would remain under Section 139 (1)(b) and which would be removed.  

The audit outcomes alone could not be used to decide whether municipalities were ready to be taken out of intervention. What was causing some of the municipalities to have no confidence in the administrators, and why were some administrators achieving worse results than before the municipalities were placed under administration?

Mr S Zandamela (EFF, Mpumalanga) said the failure to spend the MIG in some municipalities had been a worrying factor because that money had been meant for service delivery, and the MEC had to look into that. Some municipalities faced continuous political instability issues, and the MEC had to consider dissolving them because they could not improve their performance even when placed under administration. The case could not be that some municipalities performed worse under administration than they had before being placed under administration.

The Chairperson said there were interventions in KZN over time, and the MEC regularly informed the Committee on the status of the interventions. Systemic problems that existed in the municipalities had been the cause of the need for interventions. The interventions had a particular time frame to improve the respective municipalities -- if the time frame passed and there were not enough improvements made, the Department had to go to the NCOP to ask for an extension of the intervention. In the absence of an extension, the legal question was, would the intervention still be regarded as valid? The absence of legislation for regulating interventions caused disparities and a lack of uniformity in how the interventions were carried out.

Some of concerns raised by municipalities were about the administrators, and without worrying about whether those concerns were true or not, the question was: what action had to be taken? The submissions made by the municipalities clearly indicated that some municipalities needed to continue with their interventions and some deserved to be taken out of the intervention. Politics had also been playing a role and affecting the progress of the interventions. The NCOP needed to hold a special session and visit the municipalities to conduct investigations before concluding what actions to take per municipality. Each municipality had to be assessed on its own merits.

Further input from KZN COGTA
Mr Thando Tubane, Head of Department (HOD): KZN COGTA, said the Department would like to assist the Committee when deliberating on the reports to be submitted. Some problems experienced by municipalities were across political lines; the municipalities that the IFP led had openly resisted the interventions, much to the extent that the doors of municipal offices were locked (in uMkhanyakude) and the administrators had been chased away. In certain instances, it was true that certain administrators' reports were not tabled in Council because the administrators had been denied the opportunity to table them.

IMATU Mtubatuba) submitted the interventions were not working and that submission resulted from the conduct of the employees who were part of the union. The employees were involved in misconduct, did a lot of wrong in the municipality and faced action from the administrator – that was why the workers in Mtubatuba were against the administrator. To make matters worse, the same workers had been claiming overtime unnecessarily, leading to some of them being discharged. The Deputy Mayor of uMkhanyakude had been previously fired from the Mtubatuba Municipality.

With every decision that the Department took on Mtubatuba, the Department knew that it would be going to court regarding the decision the next day. There was a long list of cases between the Department and Mtubatuba local municipality, and the municipality had been wasting a lot of the taxpayers' money.

On uMkhanyakude, it was true that significant amounts of money in the municipality had been subject to being rolled over, and the Department had had to intervene in the matter. The councillors were interfering in procurement processes, and many tenders were awarded irregularly, and the appointed administrator for the municipality had correctly cancelled those tenders. The Department had commissioned a Section 106 investigation and the report (which reflected significant amounts of maladministration under the guise of the councillors) would be shared with the Committee.

In October 2021, the Provincial Treasury had intervened in uMkhanyakude (in terms of Section 139 (1)(4)) because the Council had been dysfunctional -- they could not pass a budget, salaries could not be processed and services could not be rendered. The Minister of Water and Sanitation took control of the water supply in terms of Section 63 of the Water Services Act because the intervention was deemed required. On 3 May 2022, the Councillors of one political party came together and elected leadership without giving the MEC notice of the meeting. The Department took the matter to court to seek an interdict -it was due to be heard on 30 May. uMkhanyakude and Mtubatuba were in the process of passing their budgets, which remained unfunded. The Provincial Treasury had advised the two municipalities to ensure that their budgets were funded.

The Department had not experienced as much hostility working with Msunduzi, Mpofana and uMzinyathi as it worked with uMkhanyadude, Abaqulusi and Mtubatuba.

On Inkosi Langalibalele, there were certain actions that the administrator had taken against the employees. The employees’ salaries had been previously inflated, and the administrator had worked on normalising the salaries, which led to the employees not being happy with the administration. The Department had measures in place to try and deal with the situation.

The uThukela municipality was in deep trouble -- its budget was unfunded. In a month, the municipality would pay more than R800 000 just for the security of councillors, despite that it had no money. When the administrator advised the municipality on spending more economically, the administrator became the number one enemy of the councillors. The instability that existed in senior management posts had been caused deliberately -- the new political leaders of the municipality had been purging employees. It had been ignoring cost-containment measures, and the Department was reliably informed that the municipality would fill 160 posts, some of which had just been created. This was to be done while the municipality had an unfunded budget.

MEC Hlomuka said the Department’s presentation summarised some issues the Department was dealing with in its interventions at the municipalities. Section 139 (1)(b) had not stipulated whether an intervention should be terminated or not, even when the municipality’s performance had not improved. On the question of what action the Department’s response would be to municipalities that were removed from the interventions and started regressing again in performance, Section 139 (1)(b) had not given guidance on that either.

The Nquthu Local Municipality had been removed from the interventions. The municipality had spent R200 million in one financial year, which could not be accounted for in terms of service delivery. It tended to attack the administrators and the MEC, claiming that the MEC was working against the municipality, which made it difficult for the Department to intervene. The MEC could not be working against any municipality -- the work he undertook on the municipalities had followed the guidelines of the AG’s report. His work was not based on political favouritism. The municipalities had been judged on their performance and there were set principles used to decide which municipalities needed intervention and which did not.  

The Municipal Financial Management Act, Section 147 (Regular review of Provincial Intervention), stipulated how the Provincial Government might review its interventions in municipalities. Section 148 stipulated the conditions under which an intervention might be terminated. The Act had guided the Department’s decisions.

The terminated contracts in uMkhanyakude by the administrator were found to have been awarded irregularly. The Auditor-General’s report had indicated that R3.5 billion had been recorded as unauthorised, irregular, fruitless and wasteful (UIFW), which meant that the correct processes had not been followed while disseminating that money. The Section 106 forensic investigation report that was tabled on uMkhanyakude would shock the Committee. The Department would submit a detailed report to the Committee on all the municipalities so that the Committee could make informed decisions regarding the continuation or termination of the interventions.

Concluding remarks
The Chairperson said the discussion had been very important because it was in the best interest of the Committee that the situation in the municipalities be stabilised so that services could be delivered to the people and so that accountability from municipal leaders could be ensured.

Mr Mthethwa, on behalf of the Chairperson, with whom connection had been lost, said the Committee would sit down and deliberate on the issues discussed in the meeting. There was a need for the Committee to visit the municipalities under discussion to ensure that it made informed decisions.

The meeting was adjourned.