Thank you Deputy Speaker, hon Maluleka has asked a question on what it is that we are doing to ensure that privative controls, strong consequence management and an effective monitoring culture in the public sector which gave rise to the increase in the total annual irregular expenditure in this financial year as out lined by the Auditor- General are dealt with. The answer to the question by hon Maluleka is that the new Medium Term Strategic Framework which basically is the programme of government for the
next five years will have clear interventions and targets on how to ensure consequence management in the public sector in relation to corruption, maladministration, fruitless, waste full and irregular expenditure.
Examples of what we will do include the introduction of life style audits, the signing of performance agreements and referral to Law Enforcement Agencies to investigate and prosecute suspected criminal conduct of anyone in the public service. The President will launch the Medium Term Strategic Framework in the new-year 2020. We have also out lord those employed in the public service doing business with the state. This has been followed up with consequent management where such directives have not been followed or met. I thank you Deputy Speaker.
I am informed that hon Maluleka is not in the House so hon Ntuli will do the supplementary question.
Thank you Deputy Speaker, the follow up question is as follows, what is the effect of the public audit amendment act to ensure that the adequately deal
with the continuous increase of irregular expenditure. Thank you.
Thank you hon Ntuli for the follow up. The President has all now has sign the public audit amendment act which came into effect on the 1 April 2019. The act empowers the Auditor-General of South Africa to take remedial action to ensure that losses suffered by the state are recovered from individuals involved. So we have that possibility now. That those who contributed to lose of the state indeed we can recover what the state has lost from them. But secondly the legislation also empowers the Auditor General to refer certain suspected material irregularities for investigation by Law Enforcement Agencies so we believe Deputy Speaker that we have indeed mechanisms now to deal with fruitless, wasteful expenditure in the public sector. Thank you very much.
Thank you Deputy Speaker, Minister Mthembu in light of the findings of the latest Auditor's report which shows that irregular expenditure for the 2018-2019 financial years stands at R61 billion the major
of which was incurred by the ANC either in provincial governments, national governments and also in local municipalities in contrast to where the DA governments where irregular expenditure is at its lowest. What will the Presidency do differently this time to prevent the ANC in government from continue to squander tax-payers money to the extent of billions in irregular expenses. Thank you.
As we have indicated those that might have used the monies wastefully and fruitlessly there is a mechanism of recovering those monies from them and we are quite aware of many provincial departments and even national ones that have opted for that option of those that have not used our monies profitable and prudently repaying or paying back, the was terminology that was used sometime ago - paying back the money. But secondly if indeed as we have said in the original answer Malatsi if indeed there is suspicion that we think this R61 billion that you are spoken to that there is suspected criminal conduct we can assure you we will not hesitate to involve Law Enforcement Authorities on this matter. Thank you very much.
Thank you Chairperson, Minister functionaries in the public sector are being demonized for corruption while in reality they are only following illegal instruction from their political principals who force them into these corrupt deals including irregular expenditure. What protections have you given to public sector officials, who fear losing their jobs should they refuse illegal instructions from corrupt politicians? Thank you.
Well I have not come across any report that says people have been given corrupt instruction by political principals. If you have such please provide us with such because we have never come across such a report, but we can assure you that our laws in this country disallow any illegal instruction, so if there is any public service worker or employee who is requested or instructed to do something illegal that employee can ask the person whose making such instruction to do that in writing, and in effect that is what we will say to all our public service workers that if there are any such instruction request that such instruction be put in writing. I can assure that ever since I have been in
this position of monitoring and planning and evaluation I have not come across any public servant who has come forward and said I have been forced to implement an illegal instruction. I am hearing that for the first time from you. Thank you very much.
Thank you Chairperson, I would love to thank you the Minister for all the responses. [Laughter.]
Hon Chairperson, that member was actually standing in for the person who asked the original question, please.
Okay but she
pressed, that was a mistake that she pressed, okay. Thank you very much. Then we continue.
Question 305:
The MINISTER OF CO-OPERATIVE GOVERNANCE AND TRADITIONAL
AFFAIRS: Hon House Chairperson, the department does not have any legal mechanism to assist municipalities to recover any unauthorised irregular, fruitless or wasteful expenditure incurred. None the less the recent Public
Audit Amendments Act 5 of 2018 amongst others provides for the Auditor- General to issue a certificate of debt where an accounting officer or accounting authority has failed to recover losses from a responsible person or to instruct the relevant executive authority to collect the debt. This will complement the implementation of section 32 of the Municipal Finance Management Act which provides for measures pertaining to the recovery of unauthorised irregular, fruitless and wasteful expenditure from liable local government officials and politicians.
In terms of which each municipal council has a duty to introduce and adopt policies and processes to prevent, identify and investigate unauthorised irregular, fruitless and wasteful expenditure.
We wish to take this opportunity to invite this House of Parliament as well as Houses in the provincial legislatures to assist us in providing oversight with regards to the extent of implementation of these provisions. After all, the business of local government is everybody's business.
In order to empower local councils, the Department of Co- operative Governance and Traditional Affairs in collaboration with the National Treasury and Sa Local Government Association, Salga, have developed a manual, a Municipal Public Accounts Committee, MPAC, guide and toolkit to assist members of MPAC, to perform their oversight responsibilities and other related roles. The MPAC guide and toolkit, aims to improve accountability, transparency, effective and efficient use of public resources in executing municipal functions and thereby improving service delivery.
The department together with the others is currently rolling out training and information sessions of the MPAC guide so that MPACs can exercise their responsibilities effectively, including amongst others investigation of fruitless wasteful unauthorised and expenditure. Reviewing and recommending to council actions relating to the expenditure and conclusion of these expenditures and consequence management processes.
According to the National Treasury information, at the end of 2018-19, the MPAC guide and toolkit have been
rolled out and the total 879 MPAC councillors and 205 municipal officials had been trained countrywide. Thank you.
Hon House Chairperson and hon Minister, in the Northern Cape, there are municipalities where the relevant provincial MECs already intervened and written letters to the councils for Members of the Mayoral Committees, MMCs, to vacate their positions because they did not meet the minimum competency requirements. Yet after two years, these MMCs are still in their positions.
Who is liable for the millions in unauthorised irregular, fruitless and wasteful expenditure during their tenure? [Applause.]
The MINISTER OF CO-OPERATIVE GOVERNANCE AND TRADITIONAL
AFFAIRS: The MMCs are actually employed by the municipalities. So, it is the municipalities and the councils that keep them when they know they should not be keeping them. Thank you.
Hon Minister, very often the costs of wasteful and irregular expenditure is due to actions of politicians and officials who use council resources for their own benefit. In the UThukela District Municipality, the deputy mayor took the council's vehicle to watch a soccer match in Johannesburg, she got drunk and through her negligence the vehicle was stolen. To this date, she has not been held accountable nor council has recovered its loses.
What action are you willing to take in this specific case to ensure that the deputy mayor pays back the costs of that vehicle to the municipality? Thank you. [Applause.]
The MINISTER OF CO-OPERATIVE GOVERNANCE AND TRADITIONAL
AFFAIRS: Hon member, I thought I have informed you that legally I cannot go to a council and demand anything. So, the legal route must be followed by the relevant authorities. The council needs to take action. The Minister has no locus standi in going to the council and say do this and that. You know that as you are asking this question, you know it. Thank you.
Hon House Chairperson and hon Minister, we all know that the unauthorised and irregular expenditures by fraud and corruption. The only way of dealing with deeply embedded corruption in municipalities is to have concerted investigations and prosecution rife which will show people that no one can steal and mess the public funds without the consequences.
What engagements is the Minister intending to do, particularly with the Hawks and the National Prosecuting Authority, NPA, in terms of supporting municipalities because they are answerable to the department?
What are the engagements between the two entities to show that the people are held accountable? Thank you very much.
The MINISTER OF CO-OPERATIVE GOVERNANCE AND TRADITIONAL
AFFAIRS: I think the Hawks and relevant authorities do investigate and it is up to them after finding whatever they find to prosecute. The Minister cannot say go and prosecute this one or that one, because they are the ones who do the investigation, they are the ones who know
whether there is a case to answer or not, they are the ones who issue arrests and then the courts then deal with the matter.
So, as far as we are concerned, the Hawks must do their work and all the authorities must do their work. We will not stand in their way, but we have no authority to instruct them what to do.
Question 313:
The MINISTER OF CO-OPERATIVE GOVERNANCE AND TRADITIONAL
AFFAIRS: Chairperson, on this question, I can say that it is desirable that the equitable share be revised, because we have found that the formula for equitable share is useful in so far as it represents a transparent and predictable budgeting and distribution framework in which all spheres of government can participate.
However, the formula, as it stands, does not take into account the real needs and developmental challenges confronting the various municipalities. The formula also makes an assumption that all municipalities can have equal capacity to generate revenue. However, we all know
that in certain municipalities, particularly those in small towns, rural areas, in townships, there is a challenge in terms of collecting revenue.
To address this, the Minister of Finance has proposed that a special budget forum lekgotla be held to discuss the design of the local government fiscal framework. To prepare for that lekgotla, the department will work with National Treasury, Salga, Statistics SA, and the Financial and Fiscal Commission, FFC, to improve the local government fiscal framework, including the local government equitable share formula.
So, we are awaiting that lekgotla and hopefully, at that lekgotla, it would be agreed to revise the equitable share. Thank you.
Chair, Minister, I am happy that we do agree that there should be a revision of the equitable share in the manner that it is structured currently. The municipalities are chronically underfunded, yet they are at the coalface of service delivery. It is for that reason that we think they should get the lion's share of
the equitable share. Equally, we see no reason for the continuation of provinces as constitutional spheres of government. Do you not think that keeping provinces is an unnecessary strain on the fiscus? Is there a need for the continuation of provinces in the country, because everyone resides in municipalities, not in provinces? Thank you.
The MINISTER OF CO-OPERATIVE GOVERNANCE AND TRADITIONAL
AFFAIRS: Chair, hon member, I will agree with you that the municipalities are at the coalface of delivery and that the population actually sees government through local government. When they are angry with government, generally, they take it out on local government. They burn councilors' houses, municipalities, or whatever. So, on that, we agree.
We also agree that everything happens in the local space. We live there, business is there. Everything happens in the local space. Even all of us sitting here were elected through votes that took place in the local space. So, on that, we all agree.
We also agree that the municipalities are underfunded. Whether they will get a lion's share or a tiger's share, I don't know. [Laughter.] I don't know if they will get an elephant's share. All I know is that they are underfunded.
The issue of the existence or nonexistence of provinces is a story for another day and another place. It is not something that we can discuss here and now. Thank you.
House Chair, hon Minister, we are fully aware of the financial deterioration in municipalities, with uncollected revenues growing by 17% to R147 billion, and overdue accounts owed by municipalities have grown by 52% to R36 billion, half of that owed to Eskom, which is a later question. In view of the above and the poor financial performance by municipalities, can it be justified to consider increasing the equitable share formula?
I have already said in Parliament that we need to consider that, but surely one must get the municipalities' houses in order before one can give them
additional funds. If you agree with that, how do we do that, to get the houses in order? I support additional funding, but we first have to get the municipalities' financial houses in order. Thank you.
The MINISTER OF CO-OPERATIVE GOVERNANCE AND TRADITIONAL
AFFAIRS: Chairperson, some of the municipalities are not even able to spend their MIG, because firstly, they cannot attract professionals to their space, as their revenue is small.
Even when they come, some of the engineers go there just to get a bit of experience. Once they get it, they are gone. Financial expertise does not stay there. Planning expertise does not stay there. So, some of the municipalities don't have the professionals that they need to actually get their house in order.
It is for that reason that I said earlier that we need to work in such a way that we at least ensure expertise in every district, so that they can at least be shared in that space, even if they cannot be in every municipality.
So, I agree, but we cannot just say that they must get their house in order, if they don't have the professionals they need. So, we need to improve their capacity. Once we have improved their capacity, they will be able to spend what they need to spend.
Also, in terms of revenue, we must remember ... Let me give you an example. When there is no water in a locality and there is a drought, the municipality has to deliver water to the areas with water tankers. That water is not metered and it is not paid for, but the municipality has paid for it to the water board.
So, these are all the things. When all these formulas and everything were put in place, we did not consider who pays for that water when a municipality delivers water with tankers in a rural space.
So, we can blame the municipalities. I am not excusing them. I am saying there are problems. Some of them are corrupt, but there are also genuine problems that we have not addressed properly.
Even if that municipality pays for the water that is metered, they will still owe for the water that was delivered with tankers to the rural community. So, there are a lot of examples like that. Thank you. [Time expired.]
Hon Chairperson, related to what you have just said that you cannot blame municipalities in all cases because of the lack of professionals. There are currently municipalities that have been informed by National Treasury that their quarterly payment of the equitable payment will not be paid, in terms of section 216(2) of other Constitution. The residents of these municipalities will suffer as a result of noncompliance by these municipal councils. How will your department mitigate the effect of this on basic essential service delivery and prevent the most vulnerable residents from suffering the consequences. Are you engaging the Minister of Finance on this issue with regard to nonpayment in terms of section 216?
Minister, before you respond, may I remind you of Rule 142(7).
The MINISTER OF CO-OPERATIVE GOVERNANCE AND TRADITIONAL
AFFAIRS: Chair, yes, there is discussion taking place between us and Treasury. However, at the end of the day, Treasury has the purse and they can withhold it or give it. We are discussing it with them, precisely, for the reasons that you have given. It is almost the festive season and people, even those who are working, will be on holiday and it will be a pity if they cannot get the very basic services. Thank you.
Chairperson, the comment made by the Minister is obviously true that certain municipalities don't have the capacity and the resources to get their house in order, but there are pertinent examples of fairly large municipalities, including metropolitan municipalities, whose problem is not the equitable share but whose problem is getting the basics right, including collecting revenue.
Now, as we speak, the Mangaung Metropolitan Municipality is on terms with Eskom. Their power will be cut next week if a deal is not made. They also owe money to Bloem Water. The prospect, because of this dysfunctional state
of that metropolitan, is that it will become the first metro in South Africa where water and lights are cut off because of dysfunctional bad governance. My questions is: Will the Minister intervene to stop this metro from having its lights cut off and its taps run dry?
The MINISTER OF CO-OPERATIVE GOVERNANCE AND TRADITIONAL
AFFAIRS: Chair, let us be frank with each other. We can only discuss; we don't have any legislative power to say, stop. Treasury and us ... In fact, Treasury has the authority to do pricing and to make sure that bulk services are paid for, but we work with them. We will try our best, but I cannot stand here and say that it will not happen. We can try, as we have tried in other areas. Thank you.
Question 294:
Sepedi:
