Strategic Planning Workshop: National Treasury; FFC & Salga

Meeting report

Opening remarks

The Chairperson said this meeting would be an exercise in capacity building. She reminded the Committee that last year, several meetings intended for capacity building had been postponed, and now they were happening as per the Committee’s request. In this session, three institutions would present:

• The South African Local Government Association (SALGA);
• The Financial and Fiscal Commission (FFC); and
• National Treasury (NT).

She reminded Members that when they engaged with the presentations, they should not pose oversight questions, because this was not that kind of session. They should consider it a form of workshop.

Financial and Fiscal Commission (FFC) presentation

Prof Daniel Plaatjies, Chairperson: FFC, first referred to documents that had been requested by the Committee from his institution. He said that his office had not received the request letter, so it had never got to his attention. he then followed by introducing his colleague Miss Ansuyah Maharaj Dowra (Committee Secretary, FFC) and asked through Chair’s permission for his colleague to start the presentation.

The Chairperson responded that she was aware that Prof Plaatjies had not been the person who had been written to, with the request for those documents.

This institution had three presenters, who presented presenting interchangeably.

The first presenter, Ms Ansuyah Maharaj-Dowra, Committee Secretary: FFC, began by clarifying the constitutions and Acts over which the FFC had to be consulted, going through each section in detail.

(See document).

This was followed by a presentation on the annual outputs targeted at the finance and appropriations committees, the devolution of expenditure powers and functions, financial oversight, selected FFC and recommendations of relevance during 2019. The presentation concluded with a demonstration of how the FFC functions.

(See document).

National Treasury Presentation

Ms Malijeng Ngqaleni, Intergovernmental Relations (IGR) Division: National Treasury, introduced her colleagues and said that each one of them would present a section of the presentation.

They started by giving a brief outline of the presentation, followed by the legislative basis of the National Treasury (NT), an illustration of the NT organogram, a diagram of the budget group structure within the NT, an outline of legislation for the Division of Revenue, including a summary of the Division of Revenue Bill.

(See document)

The officials also gave a briefing on the NT’s monitoring and oversight over the provincial and local spheres of government, including the reporting and early warning systems. Lastly, they gave an illustration of their intervention strategies.

(See document).

Chairperson complimented the NT team on how interesting and powerful the presentation was.

South African Local Government Association (SALGA) Presentation

Councillor Mavis Charles, SALGA Provincial Women’s Commission, Mpumalanga, asked Mr Mohammed Lorgat, Specialist: Municipal Finance, SALGA, to deliver the first part of the presentation. 

Mr Lorgat began by outlining the SALGA strategy from the year 2017 to 2022, and followed this with a briefing on fiscal policy and the Association’s position on the Division of Revenue.  He gave an illustration of the Municipal Audit Support Programme (MASP), and explained key or emerging risks such as non-compliance with supply chain management (SCM) policies and regulations which gave rise to unauthorised, irregular, fruitless and wasteful expenditure. He also made specific reference to records management as an important area.

Mr Lorgat continued by giving the results of provinces with the highest proportion of poor audit outcomes, singling out North West, Free State, Northern Cape, Limpopo and the Eastern Cape. He provided details of the findings on specific risk areas, such as that the quality of performance reports, which had been identified as a risk area for numerous municipalities. He also pointed out that the majority of municipalities had repeat findings on SCM and asset management. Lastly, he also mentioned that the financial health of a large number of municipalities had been highlighted as a risk area. The indicator for financial health had shown a trend of deterioration over the last few years. These risks were followed by an MASP support plan and an illustration of how infrastructure grants were allocated to the municipalities.

Discussion

Mr Z Mkiva (ANC, Eastern Cape) asked to the Chairperson if there could be a workshop with enough time to engage with the presenters, as the presentations were quite empowering. Secondly, he requested to be presented with a Xhosa version of all the presentations, as it was not easy for him as a person who thinks in Isixhosa to get insights of English version.

Mr D Ryder (DA, Gauteng) made a comment that there had been lot of ‘must’ emphasis by the presenters, particularly in regard to the Treasury, and this showed that maybe the Treasury was not “musting” enough. He also made a comment on the FFC presentation about the district model, and said his concern was that the district model could not be implemented with a one-size-fits-all approach. For example, the way a district operated in the Eastern Cape was very different from the way a district operated in Gauteng, so he suggested that the FFC should bear that in mind. He added that there was a need for a Legkotla, as the local governments were showing no ability to deal with the money they were given. He asked the NT about the cost benefit of the Municipal Standard Chart of Accounts (MSCOA), as it had been set up to reduce corruption? Had they seen any benefits yet?

Mr Ryder continued to ask SALGA about the unpredictability of funding, saying that he did not believe that this was a reality.

The Chairperson then stressed that she had mentioned at the beginning of the meeting that the Members should not pose oversight questions, as this particular meeting was for capacity building. The presenters had been invited to come and empower the Members on certain issues, such as how to get access to information, and where they derived their powers. However, she did understand that the Members were keen to ask more questions because of the frustrations that were expressed in their constituencies.

She agreed with Mr Mkhiva that there should be more time available in future so that Members could engage with the presenters.  

Mr F du Toit (FF+, North West) thanked the Chairperson and the presenters. He complimented the NT on its presentation, and said he hoped it would prove beneficial.

Responses

Financial and Fiscal Commission

The FFC official commented on the issue of time, and said that they also wished they could be provided with more time or another opportunity.

National Treasury (NT)

Ms Ngqaleni responded to the issue of making municipalities’ expenditures more visible, and said that what they normally did was to issue a letter to municipalities that outlined their allocations. What they might now consider would be using websites to make it more visible. On the issue of allocations, she said that in terms of the law, they had to first consult with the national department. Regarding the MSCOA, they acknowledged that MSCOA was quite a big form, but at the end of the day it would make local government work efficiently.

South African Local Government Association (SALGA)

SALGA thanked the Chairperson and the Members for their comments, and responded that they would look at all the comments and suggestions they had received.

Committee matters

Mr P Dlomo, Committee Content Adviser, said two documents had been shared the previous week -- dashboards giving the performance of the provincial grants for the financial year. That information had been shared so that the Members could have an idea of what grants looked like. He advised the Chairperson that they had started tracking some of the solutions that the Committee have proposed, and some of these reports would be shared, with the Chairperson’s permission.

The meeting was adjourned.