State of Local Government post elections; Community Work Programme; with Deputy Minister

Meeting report

The Chairperson indicated that this was the first meeting of the year and reiterated Parliament’s oversight duty over the executive. He emphasised the importance of local government in the government structure. The Deputy Minister's presence was welcomed.

Deputy Minister’s remarks
The Deputy Minister, Thembi Nkadimeng, confirmed that all municipal councils in the nine provinces had been established with the one exception of Kai Garib Local Municipality in the Northern Cape where one councillor had passed away. She was confident that the IEC would soon fill that vacancy.

The Deputy Minister informed Members that not all council committees have been established. This is especially so in the Eastern Cape, Mpumalanga, Northern Cape, KwaZulu-Natal and Free State. Although there were quite a number of reasons, political instability was a major factor behind the non-establishment of most of those committees.

The Deputy Minister noted that about 65% of gratuity payments to non-returning councillors had been made. The Department started making payments from 10 December 2021. The key challenge encountered in making those payments is the outstanding late submission of required documents by municipalities. Those municipalities are mainly from the Free State, North West, some parts of the Northern Cape and the Western Cape. For instance, the Free state only started making submissions this year. Further, SARS clearance also needs to be obtained before the gratuity payments could be made. Unfortunately, some councillors are not SARS compliant which also delayed the payment process.

The Deputy Minister commented on the section 139 interventions. In provinces where the Department’s interventions had been terminated prematurely, a system was developed by national COGTA, National Treasury and SALGA which would give provincial Directors-General power to deal with transitional matters. Directors-General were also provided information on how to conduct the assessment and to ensure how far interventions could go and how best to deal with those interventions.

The Deputy Minister said the presentation would include the Committee Works Programme remodelling.

Status of municipalities post local government elections
Mr Mpho Mogale, COGTA Executive Manager, reported on municipal council establishment post-election, saying that out of 257 councils, 256 councils have been established. Mr Mogale provided an outline of the council committees that had been established across the nine provinces in South Africa.

Mr Mogale provided a summary report of the range of Section 139 interventions implemented prior to and post local government elections as well as during the transition period (see document).

Status on once-off gratuity payment for non-returning councillors
Mr Chaka Moloto, Acting Chief Financial Officer, reported on the once-off gratuity paid to those non-returning councillors. So far 69% of the gratuity fund has been paid out. The key challenges deterring the smooth payments was the network challenge as well as inaccurate details from councillors’ paperwork such as missing SARS reference number or incorrect annual remuneration.

Discussion
Ms H Mkhaliphi (EFF) referred to slide 4 and pointed out that the department needed to distinguish the number of metros and local municipalities in every province where municipal councils had been established. The presentation lacked such distinction with the exception of the Eastern Cape. Given the importance of this document for future generations to see as a record, she urged the department to rectify the information on its slides and ensure consistency in future presentations.

Ms Mkhaliphi found it unacceptable that the Department did not make additional input about Northern Cape in slide 7. There were 12 out of the 26 local municipalities that had not concluded its process of having elected council committees. She believed that it was the Department’s duty to ensure that there are operational councils in each of those municipalities.

Ms Mkhaliphi corrected the Department’s attribution of the non-establishment of Ray Nkonyeni Municipality to a political problem. It was not because of a political problem but rather an internal challenge which the MEC in KwaZulu-Natal failed to address. She urged the Department to come up with a solution to resolve the matter.

Ms Mkhaliphi highlighted the delay in the gratuity disbursement to non-returning councillors. She requested an updated progress report. Some councillors had spent Christmas without having been paid. She specifically referred to those councillors who were tax compliant and had submitted all required documents. She criticised the Department for its lagging behind in its payments.

Ms Mkhaliphi emphasised that COGTA needed to avoid a tick-box approach when reporting to the Committee. On the matter of committee councils, although North West did tick all the boxes, COGTA did not inform the Committee of the chaotic situation at Ditsobotla Local Municipality in the North West. She stressed that one cannot accept a hung municipality and urged COGTA to make interventions.

Ms Mkhaliphi asked the Deputy Minister if COGTA had taken action after the disturbing video of a ward councillor at Amathole District Municipality being attacked. She stressed the importance of getting to the bottom of the incident and requested a status report. Further, she wanted to know if the Minister has taken any action after the incident.

Ms P Xaba-Ntshaba (ANC) highlighted the pervasive municipal dysfunction problem in South Africa which has affected service delivery to communities and people on the ground. She complained that its presentation was not specific and was not targeting the real problems. The report did not include many of the pertinent things happening at the municipal level. Members needed to know COGTA’s concrete plan on how to solve those problems. More specifically, she wanted to know what proposed strategies COGTA has come up to minimise the risk of political instability in hung councils.

Ms Xaba-Ntshaba referred to eMaxesibeni where community members had to carry a coffin across a wobbling rope bridge. She asked COGTA what its plan was to resolve such matters.

Mr C Brink (DA) asked COGTA to provide more detailed clarity on Mangaung Metropolitan Municipality. Since the Section 139 intervention was instituted and the municipality placed under administration, there is still not a solid financial recovery plan in that municipality and the situation is deteriorating.

Mr Brink asked COGTA for its role and the extent to which it could intervene where municipal executive committees were still not constituted. He gave the example of Ray Nkonyeni Municipality which still had not elected an executive committee and a mayor last week despite being way past the constitutional deadline. This delay severely affected service delivery in that area.

Mr Brink asked about the different interpretations of the appropriate execution of Section 139(1)(b) of the Constitution. According to a 2021 National Treasury report on the state of local government, it states that the execution of 139(1)(b) does not automatically lead to the appointment of an administrator unless the municipality is dissolved. However, the conventional understanding at the national level is that once invoking Section 139(1)(b), an administrator would be appointed. He wanted clarity on the different interpretations and if they had been resolved.

Mr K Ceza (EFF) agreed with the comments made by his colleague, Ms Mkhaliphi. The key to resolve all the challenges faced by municipalities is dealing with poorly-performing municipal officials and not absolving them. He enquired about COGTA’s remedial actions in getting rid of those officials. The reported projects at Emakhazeni Local Municipality had not been completed and it received a zero in the Auditor-General’s report for 2020/21.

Mr Ceza observed that many municipalities do not pay into the municipal councillor pension fund. He asked if new legislation is proposed which would make councillor pension fund payments compulsory.

Mr Ceza raised the concern that s79 and s80 committees were not conducting their sittings. He observed that some of them go into their once-a-year meetings unprepared. He demanded COGTA provide assurance to ensure that all incoming councillors are being provided with statutory books.

Mr Ceza raised the concern that the chairing of the Municipal Public Account Committee (MPAC) is given to the ruling party of a municipality. He urged COGTA not to give the chairing of the MPAC oversight committee to the ruling party as one cannot expect that chairperson to hold the municipality accountable.

Mr Ceza confirmed to COGTA that to his knowledge no gratuity fund had been paid out to the non-returning ward councillors in the Northern Cape. He wanted to know what COGTA had learnt from its experience after the 2016 local government elections.

Mr Ceza expressed his concern over the reluctance of ward councillors to work with other stakeholders in the Western Cape. Those councillors are from both the African National Congress and the Democratic Alliance in the City of Cape Town.

Mr Ceza noted the abuse of the use of Section 139 of the Constitution to settle political scores. He wanted to know what actions COGTA would take in the event a municipal mayor is incapable of resolving the political challenges.

Mr Ceza noted the poor performance of most administrators in municipal interventions. They were doing worse than the existing officials. Thus, he asked if COGTA had measures to identify those failed administrators. Did a list exist of failed administrators to deter those persons from being appointed administrators again?

Section 148(2) of the Municipal Financial Management Act (MFMA) states that it is mandatory for a Section 139 intervention to end once a municipality’s financial affairs are in order. Mr Ceza wanted to know what the core problem of municipalities was in managing their funds, was it a supply chain management issue or deliberate incompetence at the municipal level?

Mr Ceza quoted from a 2004 High Court ruling which forbade the removal of people using municipal by-laws. He wanted to know what oversight capacity COGTA has provided to monitor some of those abusive and racist by-laws.

Mr G Mpumza (ANC) remarked on the importance of the establishment of municipal councils and their committees. The Constitution clearly states that municipalities exercise their powers and functions through their duly elected municipal councils and committees. He found it worrying that there are still municipalities that have not established council committees since 1 November 2021. He urged COGTA to make speedy intervention on the matter. He asked if there is a compulsory deadline in legislation that requires the establishment of municipal councils and committees. If the answer is yes, the failure of establishing council committees in those municipalities constitute the transgression of law and consequence management needed to take place.

Mr Mpumza urged COGTA to be more concrete and specific about the attribution of responsibility for the non-establishment of municipalities. He refused to accept the general term 'political instability' to explain away everything. He questioned why COGTA was unable to intervene and select the duly-elected councillors to establish municipal council committees and deal decisively with those culprits who were countering the smooth operation of municipalities.

Mr Mpumza asked if COGTA had established a legislative framework to specifically address the challenges of municipal coalition government. He drew attention to recent events of the instability of coalition municipalities that disrupted service delivery. He emphasised the importance of establishing a framework to avoid similar incidents from happening again. Why was it not able to place such unstable municipalities under Section 139 and dismiss those councillors if they refused to serve.

Ms D Direko (ANC) asked what support the national department has provided to municipalities to assist in the establishment of local government. Her constituency, Tokologo Local Municipality, still had not had been properly established. She asked for the consequence if a municipality failed to stick to the legislative deadline for establishment.

She clarified that some municipalities have internal capacity challenges not political challenges which led to the non-establishment of local government. He warned against adopting a tick-box approach and requested COGTA to answer what it has done when municipalities are not being established in accordance with the legislative deadline.

Ms Direko noted that COGTA provided reasons for the delay in councillors’ gratuity payment such as councillors not being tax compliant. She asked its plan to avoid any further payment delays.

Ms E Spies (DA) observed that some established municipalities already had a bumpy start. Those municipalities should be red flagged and requested a full report be sent to the Committee on those municipalities.

Ms Spies called the delay in the gratuity payments unacceptable and unsympathetic as it has taken three to four months for some councillors to be paid. She questioned the rationale for requesting councillors at an advanced stage to indicate if they would not be returning to council. She also highlighted the lack of collaboration with SARS in the payment process.

The Chairperson appealed to COGTA to act decisively and intervene in those hung municipalities. He believed that the national department had sufficient resources to address the matter. Ultimately, regardless of the cause that led to the non-establishment of functioning municipal councils, it was the people on the ground and service delivery that would be severely affected.

On the Amathole Municipality incident, the Chairperson informed Members that the Committee had written to the Minister and copied the Eastern Cape COGTA MEC in the letter. The Minister did reply and stated that a process had been undertaken to interact with the municipality on this.

COGTA response
Mr Mpho Mogale, Executive Manager, noted the criticism about the presentation format and his team would rectify the information and ensure consistency in the next engagement.

Mr Mogale noted Members’ concern about the instability in some municipalities and agreed that a written report with more details on the latest updates of those municipalities would be sent to the Committee. He assured the Committee that the national department and MECs in those provinces as well as councillors of the incoming parties are addressing the instability.

Mr Mogale noted Mr Ceza’s concern about unjust municipal by-laws. The national department is aware of that and usually when such an issue emerges, COGTA would always seek clarity from the province. If COGTA is unhappy with the feedback, it would then escalate further investigation.

Mr Mogale explained that the timeline by when municipal councils must establish functioning councils was not legislated. But it was something which COGTA could consider in future legislation. The national department is dedicated to providing support to provinces to help get those municipalities in order.

Mr Mogale replied that the Minister had already sent a team to the Amathole region in response to the councillor [who was dragged from her office]. He guaranteed that a report would be compiled and be shared with the Committee.

Mr Mogale explained that in COGTA’s interaction with provinces, if there is disagreement, COGTA would always prevail as the national government. In most cases, that is always informed by material facts which would be shared with the province.

Mr Mogale agreed that COGTA needed to be more specific in using the term “political instability”. It must unpack the root causes of the political instability – if it was intra-party, coalition, etc. It must also devise corresponding measures to deal with those root causes.

Mr Chaka Moloto, Acting CFO, apologised for the delay in information on the once-off gratuity. He guaranteed that COGTA would be sharing such information with the Committee on a daily basis. He explained that there was some outstanding information including the IEC document which COGTA had requested from municipalities and their councillors. For those municipalities which were compliant, COGTA tried its best to make the payments on time. COGTA only had its own staff members managing the payment process in December 2021 and some of them had to work during the December holidays. Provinces only offered assistance in January this year.

Mr Moloto further explained that COGTA had to get to grips with quite a number of challenges in the gratuity payments which delayed the process. For instance, although some councillors do not appear on the IEC list, they are indeed later returned to councils. That information needs to be verified before COGTA can make the payment arrangement. Most councillor information which needed to be verified became available to COGTA only from 10 January with more support provided from provinces. Hence, COGTA could not get the payments up to speed. He apologised profusely to those councillors who have been affected.

Mr Moloto also highlighted that there were still municipalities that were not compliant.

Mr Mbulelo Sigaba, COGTA Acting DDG: Institutional Development, reaffirmed that COGTA is reviewing a long-term solution for gratuity payment for councillors. He also recognised that ward councillors as public office bearers were being underpaid in the value chain.

To address governance challenge across municipalities, COGTA had sent the Municipal Structures Amendment Bill to Parliament to address the performance of the municipal management system [and this had been promulgated in November 2021]. In addition, the Municipal Systems Amendment Bill formalises the process of how senior managers are appointed and stipulated their required competencies. [This Bill has been passed by the NCOP and returned to the National Assembly for concurrence].

Mr Sigaba in formed the Committee that a full report was presented by the Minister to Cabinet which detailed all the challenges experienced by municipalities. That report also identified those dysfunctional municipalities which were in distress as well as COGTA’s intervention actions. He recommended that the Committee look at that report to get more details

Mr Sigaba said that what COGTA had learnt from the payment of gratuities in 2016 was that it needed to establish a long-term solution to specifically deal with the matter.

Mr Kevin Naidoo, Executive Manager: COGTA, responded to Mr Mpumza’s question on a legislative framework to ensure proper governance for municipal coalition government. COGTA is aware of the work which the South African Local Government Association (SALGA) had done on this. Soon after the 2021 local elections, a presentation was made to the Committee recommending that the government should regulating coalition government through the Municipal Structures Act under which the Minister could issue regulations and directives. There were discussions between COGTA and SALGA. One of the points that emerged was section 13 of the original Municipal Structures Act of 1998 provided a guideline for types of municipalities that were found to be unconstitutional but that section had since been deleted. Hence, there is currently no provision legislatively to regulate coalition municipalities. COGTA is engaging with SALGA on the regulatory aspect of coalitions.

Mr Naidoo commented on Members’ concern that s79 and s80 committees were not convening which negatively impacts municipal operations. COGTA, SALGA and National Treasury are participating in a councillor programme. COGTA hoped that the programme outcome could get all councillors on board to understand their expected roles and responsibilities.

Mr Naidoo noted that the Municipal Structures Amendment Act came into operation on 1 November 2021. Part of amendment includes the amendment to s79 committee which now makes it mandatory for all municipalities to have a Municipal Public Account Committee (MPAC). The national departments such as the National Treasury and SALGA are also assisting municipalities to undertake capacity building induction workshop. Those collaboration has resulted in video development series. Those videos aim to capacitate councillors to understand what their work is about as well as their roles and responsibilities. There were also MPAC brochure and toolkits which had been developed with the assistance of SALGA and the National Treasury which would be available on COGTA’s website.

Mr Naidoo explained the change of mayoral executive to the collective executive. He highlighted that firstly on 15 October, there was a unprecedentedly comprehensive circular jointly issued by COGTA, SALGA and the National Treasury on pre-election, transition and post-election matters. Secondly, COGTA had issued a circular dated from 19 October unpacking the implementation of the Municipal Structures Amendment Act. Thirdly,after the release and gazette of the election results on 9 November, all municipalities convened in their respective provinces and were briefed on how executive committees were determined, difference party allocations, etc.

Deputy Minister’s remarks
The Deputy Minister appreciated all the inputs made by Members. She summarised the key information sought by them and guaranteed that information would soon be submitted to the Committee.

The Deputy Minister assured members that the Amathole councillor incident had been attended to. There was a council decision at Amathole that the incident would be investigated. A report of that engagement had been sent to the Minister.

The Deputy Minister guaranteed that a comprehensive report detailing the service delivery challenges of municipalities would be provided. On the people carrying a coffin over a rope bridge at eMaxesibeni, a team had been dispatched by President Ramaphosa. A Presidential infrastructure team had been formed to assist in infrastructural projects in three areas in the Eastern Cape.

On the gratuity payments, COGTA had begun making payments to those councillors who qualified since 10 October 2021. COGTA has been working on those payments daily including weekends. There were three days when payments could not be made because the system was down.

The Deputy Minister said what COGTA had learnt from its 2016 councillor gratuity payments is to avoid incidents where councillors only being paid three years after they ended their term. It linked to what Mr Ceza had mentioned about the councillor pension fund. COGTA had noted that some municipalities used the councillor pension fund for other purposes; some municipalities cannot afford to pay councillors. The Deputy Minister assured the Committee that the fund has always been available for councillors. From early December, COGTA asked provinces to provide a list of councillors which COGTA could call on a day-to-day basis to speed up the payment process.

Follow-up questions
Ms Spies clarified that she was not referring to the dysfunctional municipalities of the previous term. She was referring to those newly-elected municipal councils which were already beginning to show problems. Her point in raising this is for COGTA and the Committee to be proactive and act early to solve problems so there is less disruption in those new councils.

Ms Spies informed COGTA that she raised the gratuity payment because it was an issue close to home. Her husband was a former councillor who was not returning this term. He still has not received his gratuity payment.

Mr Ceza said that COGTA did not give him a response. He was enquiring if there is legislation that states that the municipal contribution to the councillor pension fund is compulsory. His view is that this should be made compulsory as it is not safe to leave this up to the municipality.

Mr Ceza noted Mr Naidoo’s response on the s79 committee and MPAC. The Committee should know which MPAC committees had been established and who is chairing those committees. His view remained that ruling parties at municipalities should not be chairing those committees as it is difficult to hold themselves accountable.

Mr Ceza asked if the pension system and its total amount of R266.3 million contemplated unforeseeable expenditure.

Ms Mkhaliphi said that she did not get a response about the state of Ditsobotla Local Municipality in the North West. To her knowledge, this municipality does not have a council. Today's report was not a true reflection of the state of municipalities in the country. She suggested COGTA provide the Committee with an updated report detailing the state of municipalities in the country post-election.

COGTA response
Mr Mogale responded about Ditsobotla Local Municipality. He confirmed that there have been engagements over the weekend led by the provincial MEC to deal with those issues in that municipality. So far there is no report on what had transpired but COGTA would share with the Committee as soon as the reports became available.

Mr Mogale also guaranteed that COGTA would update the consistency in the slides and send the updated information to the Committee.

Mr B Hadebe (ANC) said he had joined the virtual platform late and did not hear COGTA’s response about Ditsobotla Local Municipality. He asked COGTA to confirm if the municipality has not constituted a council at all.

As the Committee needed to move to its next agenda item, the Chairperson did not allow COGTA to respond to Mr Hadebe’s question and advised him to seek more details from Ms Mkhaliphi.

Community Work Programme (CWP) remodelling
Mr Pieter Pretorius, DDG: Corporate Services and Acting DDG: National Programme Manager: Community Work Programme, presented the remodelling of the Community Work Programme (CWP). The key documents which the new model relies on are the CWP policy framework and the CWP implementation policy. The two implementation pathways were presented.

Policy norms and standards were provided to members. The piloting NYDA project in Mpumalanga was used as an example to show how the implementing agency worked in collaboration with COGTA.

The presentation concluded with some common challenges the CWP faced as well as the recommendations for the way forward (see document).

Discussion
Mr Ceza stated the EFF’s official position is that the history of civilisation is characterised by class conflict. With the exception of socialism, the dominant mode of production is characterised by its inherent contradictions which put society in conflict. The Economic Freedom Fighters is against any government programme such as the CWP which seeks to exploit workers and renders them as perpetual students in their work. In light of that, he asked what COGTA is doing to deal with the middleman issue of implementing agencies within this programme which is causing workers to protest for minimum wages.

Mr Ceza remarked that the remodelling and regulating of the programme would not change the dominant nature of the programme. The exploitative system dictates that such changes would not have a meaningful impact on people’s lives.

Mr Ceza asked COGTA why the CWP did not adopt a developmental approach and provide certificates to participants in order to enable them to seek employment elsewhere.

Ms Xaba-Ntshaba said that she was glad that COGTA is trying to modernise CWP and she could see innovation. She reminded COGTA that people were looking for sustainable jobs. She asked if COGTA is taking out the middleman. She asked where those people were going to get jobs if COGTA did not absorb them. The NYDA is coming on board in absorbing those workers which is a good initiative to her knowledge.

Ms Spies commented on the delays in salary payments in the CWP programme and that there are people who are not being paid. This has escalated to the extent of riots in which people refuse to go to work. This is especially so in areas like Langeberg and Robertson. She urged COGTA to urgently address this problem as it had persisted for many years.

Ms Spies raised a concern about the lack of resources, tools and material for workers under the CWP programme. She used the example of the Garden Route where some agencies had been appointed in September 2021 but the work programme only started in the new year.

Ms Spies sought more clarity on RFQ for training and emphasised the importance of starting the new year properly.

The Chairperson agreed that there are challenges such as the removal of people in the CWP programme without communicating with them. He personally knew of some people from Estcourt in KZN who had been complaining about their site managers. He asked COGTA to recommend to Members to whom those complaints should be directed in future.

COGTA response
Mr Pretorius responded that the way in which training programme was designed required participants to receive certificates at the end of their training. He noted Members’ inputs and understood that there might be participants who have not received certificates from the training. COGTA would look into it. The Department had found that the training skills sometimes were not useful for participants. This is something which COGTA aims to address going forward in the new model to play a more proactive role in decision-making about training. COGTA noted that sometimes training programmes were procured simply for the sake of training, and that training may not be useful.

Mr Pretorius explained that COGTA could not absorb more workers as National Treasury has its own limit for COGTA on its remuneration bill. So what COGTA can do is to provide useful work for those participants so that they may gain necessary valuable skills. COGTA also realised that some of the work provided such as paying people to sweep streets did not provide any real skills. The kind of work provided should provide CWP participants with real skills such as fixing roads or start an SMME to fix roads or water leakages.

Mr Pretorius emphasised that unlike the Expanded Public Works Programme (EPWP), a participant under the CWP does not exit the programme. There is no time limit for how long a person can be in the programme. He pointed out that this is problematic as some participants have been there since the beginning of the programme and are getting older. Although COGTA would want to have more young participants, there is a limit of 250 000 participants under the programme.

Mr Pretorius responded to the middleman concern. He guaranteed that COGTA had already seen a reduction in that. He did not know how the fee for implementing agents had been calculated in the past. The project management fee came down significantly this time around as it had gone through a tender and the implementing agency which charged the highest fee did not get the tender. COGTA would refine the process to play a bigger role in the programme whilst reducing the role of implementing agency to a more administrative role.

Mr Pretorius agreed with Ms Spies it was extremely embarrassing that there had been delays in salaries as the primary objective of the programme was to provide a basic income. He assured the Committee that COGTA is working diligently to deal with this matter. However, the system which COGTA relies on to pay salaries has unstable performance. It works perfectly in some months but does not perform in other months. COGTA does not understand why the system is like this.

Mr Pretorius confirmed the lack of tools and resources for participants under the programme. In the past, it was the responsibility of the implementing agency to procure those tools. But in most instances, the procurement was irregular and did not follow government policy. With the new contracts starting from 1 January 2022, COGTA requested that all procurement must be done with 100% adherence to Treasury regulations. It is also being very strict on procurement compliance. For procurement which exceeds R100 000, it requested that documents must be sent through to COGTA. However, it noticed that with very few exceptions, most of the paperwork received show a lack of understanding on compliance which resulted in COGTA having to send those documents back to implementing agents. This has caused delay. COGTA has also provided training for those implementing agents on how to adhere to compliance rules. This is done in the hope that such programmes would benefit more people in the community.

The Deputy Minister noted Members' inputs and expressed COGTA’s dedication to improve the CWP programme. COGTA would stick to the commitments it had made in both the first and second round of the discussions.

The Chairperson made an apology for the breakdown of the meeting last week due to miscommunication. Such incidents will not happen again. He re-emphasised the important work which the Committee is in charge of.

The meeting was adjourned.