Chairperson, hon Minister, hon Members of Parliament, MECs from different provinces, traditional leaders, mayors and distinguished guests, on behalf of the Portfolio Committee on Co-operative Governance and Traditional Affairs I would like to join you in extending our heartfelt condolences on the passing of our former Minister, the late Comrade Sicelo Shiceka. To his family, the ANC and the people of South Africa ...
... sithi iNkosi ithathile, iNkosi iphile. [... we say God has taken, God has given.]
We have lost a choirmaster at a time when the turnaround strategy that he championed, among other things, is beginning to see the light of day. His intervention through this strategy has rescued many municipalities across the country. We value and appreciate his contribution in the co-operative governance sphere. He has laid a solid foundation for fighting for clean audits in municipalities. May his soul rest in peace.
The total allocation of the department, in this 2012-13 financial year, is R54,7 billion. This represents a 17,8% increase from R48,2 billion in the previous financial year.
During our intervention with the department on the third quarter expenditure analysis, the committee noted with concern that, out of six departmental programmes, the expenditure of only two programmes was sound. They are Programme 5: Provincial and Municipal Government Systems and Programme 7: Traditional Affairs, which had a spending rate of 91,4% and 72,8% respectively.
We fully agree with the Auditor-General's audit outcome, which says:
Cogta has regressed from an unqualified audit opinion with findings on predetermined objectives to a qualified opinion. This was due to the incomplete disclosure in financial statements relating to irregular expenditure incurred.
The department failed to maintain a proper record-keeping system that would ensure that adequate and competing supporting evidence is available to support the reporting on predetermined objectives.
There was a lack of monitoring compliance with laws and regulations in relation to the Treasury Regulations.
The department did not have control processes regarding adherence to Supply Chain Management Regulations, which resulted in irregular expenditure.
Therefore, the department did not have control processes regarding supply chain management issues, as well as systems in place to detect irregular expenditures.
There were also about five investigations related to supply chain management irregularities and one related to fraud. All six investigations were conducted in March 2011. The irregularities added up to an amount of R271 million from supply chain management.
Having noted the challenges of the department's spending trend, I likewise want to highlight their successes. Building upon our achievements and learning from our government since 1994, we are committed to improving service delivery and providing water, sanitation and houses to millions of our people.
An improvement in audit outcomes has been indicated by the Auditor- General's report of June 2011. The consolidated audit outcomes reflected that seven municipalities received clean audits. These are: Ehlanzeni District Municipality, Steve Tshwete and Victor Khanye municipalities - these are all in Mpumalanga; the City of Cape Town; Metsweding District Municipality in Gauteng; Frances Baard District Municipality in the Northern Cape; and Fetakgomo Local Municipality in Limpopo. A total number of 57 municipalities have also improved their audit outcomes.
With regard to oversight, part of the committee's mandate is to pay oversight visits to provinces and ensure that we monitor the implementation of laws that we have put in place. The provincial and local interests are taken into account in the national sphere of government. The committee visited Gauteng, Free State, KwaZulu-Natal and the Northern Cape.
I will comment briefly on the visits to the Northern Cape and KwaZulu-Natal provinces. The committee had interactions with the Dikgatlong Local Municipality, Sol Plaatje Local Municipality and Frances Baard District Municipality to get an insight into their performance across a wide range of areas in order for us to make considered interventions through the department.
It emerged from the interactions with structures that there were challenges and great interventions have been made. One of the challenges is the inability of municipalities to retain skilled staff and to appoint section 57 managers. This is due to financial constraints.
Section 154 of the Constitution and section 34 of the Municipal Finance Management Act allow the provincial and national department to support municipalities and enhance their capacity to meet their objectives.
The provincial department intervened in Dikgatlong Local Municipality and deployed a chief financial officer and a technician from its own budget. The vastness of the province poses a serious challenge to service delivery, particularly sanitation, and therefore the cost of service provision is enormous. To overcome the challenges of distance and time constraints, the legislature created five regional offices and introduced video conferencing to avoid costly travelling.
In this regard, the committee supports one of the recommendations the Financial Fiscal Commission made to Parliament and also to Cogta and Treasury, namely that the funding formula for municipalities should be reviewed to assist provinces that have vast and deep rural municipalities, like the Northern Cape, as I have indicated.
Frances Baard District Municipality has obtained unqualified audit opinions for several years, with matters of emphasis. In the 2008-09 financial year, the municipality obtained an unqualified opinion with no matters of emphasis. The district municipality was appointed as an ambassador for Operation Clean Audit. The district also won the Vuna Award. In the 2011-12 financial year it obtained a clean audit.
To promote its ambassadorship, the district municipality has allocated R1 million in its budget to support local municipalities to obtain clean audits. In terms of debt collection, the district has established a revenue enhancement to rectify database discrepancies for revenue collection in relation to property rates. The district had 100% expenditure of its Municipal Infrastructure Grant allocation.
Sihlalo, okuseyinselele kulo Mkhandlu isakhiwo sesikhungo sokuvikela izinhlekelele [District Management Centre]. Umasipala lo uyahluleka ukulekelela noma ukukhuthaza omasipala abancane uma besenkingeni bevelelwe yinhlekelele yezikhukhula noma ukuqubuka kwemililo. Isikhungo lesi sishoda ngezinsiza zokutakula abasenkingeni. Izikhungo eziningi emiKhandlwini yomasipala kuzwelonke azinazo izinsiza ezanele zokumelana nezinhlekelele.
Ikomidi laphinda lavakashela Kwazulu-Natali ngomhla ziyi-15 Mashi 2012 ngenhloso yokuyobona inhlekelele eyavelela lesiya sifunda ngenkathi kufika inkosanana isishingishane u-Irina. Lesi vunguvungu sahlasela ikakhulukazi izindawo ezingasogwini lolwandle. (Translation of isiZulu paragraphs follows.)
[Chairperson, the challenge at this council is the District Management Centre. This centre fails to assist local municipalities when they are faced with floods or fire flares. This District Management Centre lacks the resources to rescue those who are in trouble. Most management centres at municipalities nationally do not have adequate resources to deal with disasters.
The committee again visited KwaZulu-Natal on 15 March 2012 with the intention of seeing the disaster that befell that province during cyclone Irina. This storm ravaged mostly coastal areas.]
The committee appreciates the excellent working relationship it has with joint operation committee structures and the role played by the weather service in alerting the province about the storm that was coming.
Plans were developed to get ready to respond to any incident that might arise. The levels of preparedness were very high. Rescue crew, hospitals, ambulances and NGOs, such as Red Cross, came on board and were prepared to respond to any emergencies that might occur.
In the areas of uThungulu District and Umlazi, uMhlathuze and uMfolozi Municipalities, and in the areas of the municipalities that I have mentioned, houses were flooded and households were evacuated to safe places. Water supplies were cut off, there was no electricity and roads and bridges were closed. The Red Cross and soup kitchens had to come in to assist.
At Ndwedwe Rural Municipality, the drainage system was blocked because of the flooding, which also increased the vulnerability of poor households. Mandeni, iLembe and Ndwedwe Municipalities are not compliant with the Disaster Management Act. The committee observed that there are no firefighters, let alone rescue teams. Calling for interventions or back-up from the National Defence Force is only done by the national department.
At iLembe District Municipality, three deaths occurred due to lightning. The provinces must assist municipalities on occasions when disaster strikes. There must be a uniform approach in implementing the Disaster Management Act.
The relationship between national government, the department and the Department of Human Settlements is questionable. Interventions are not made as fast as expected. There are families that have been struck repeatedly, but nothing has been done so far. There must be a task team that will release disaster funds in an emergency. We must take away this red tape and bottlenecks when releasing these funds.
The current legislation must be amended to fast-track intervention processes. There must be a monitoring mechanism to follow the rand. The committee appreciates that this financial year is the first time National Treasury has put aside funds to deal with emergencies after lightning strikes and for the rehabilitation of stricken areas.
There are two ways of funding. One is immediate funding, where we intervene by providing adequate material for strong structures. So,...
... abelungu bathi amabhulu athi ... [... English speakers and Afrikaans speakers say ... ]
... "goedkoop koop is duur koop". ["Cheap things are dear in the long run".]
Let's guard against putting people in tents for years and leaving them to wait for RDP houses. That is inhumane.
Municipalities made assessments and national government came on board by sending experts to verify the damage costs and estimates sent by provinces. [Time expired.] [Applause.]