Report of the Select Committee on Local Government and Administration on the oversight visit to Xhariep district municipality

 

1.         INTRODUCTION AND BACKGROUND

 

The National Council of Provinces (NCOP) delegated the Select Committee on Local Government and Administration to conduct a fact finding visit to the Xhariep District Municipality in Free State Province during the 11 October 2008.

 

2.         OBJECTIVES

 

The main objectives of the visit was to interact with internal and external stakeholders in the Provincial Executive Council (PEC) through the Office of the MEC for Local Government and Housing in terms of section 139 (1) (b) of the Constitution.

 

3.                   DELEGATION

 

The delegation of the NCOP consisted of the following members and officials:

 

·         Hon S Shiceka                                      (Gauteng Province)

·         Hon F Nyanda                                       (Mpumalanga Province)

·         Hon D Worth                                                     (Free State Province)

·         Hon M Mzizi                                                      (Gauteng Province)

·         Hon Kgoshi M L Mokoena                                   (Limpopo Province)

·         Hon A T Manyosi                                               (Eastern Cape Province)

·         Hon N J Mack                                        (Western Cape Province)

·         Hon A L J Moseki                                              (North West Province) 

·         Mr D Mokoena                                       (Research Unit)

·         Mr M Manele                                         (Committee Section)

·         Mr V Mfuniselwa                                                (Committee Section)

 

                                         

4.                   DISCUSSION

     

On the 11 October 2008, the Delegation of the Committee conducted a fact finding   visit to the Xhariep District Municipality and had interactive meetings with stakeholders including the Administrator, Executive Mayor, Chief Whip, Acting Municipal Manager, Organized Labour, Free State Youth Commission, South African Council of Churches and SALGA.

 

 

4.1 Administrator

 

In briefing the Committee, the Administrator indicated that on 28 May 2008 the Free State Provincial Executive Committee decided to intervene at Xhariep District Municipality in terms of Section 139 (1) (b) of the Constitution. The rationale for the intervention in the municipality was lack of capacity to exercise powers and perform functions; inadequate budget to perform as a district municipality; possible unauthorized, irregular, fruitless and wasteful expenditure including possible fraud, corruption and nepotism. The Administrator further informed the Committee that since its establishment, the Xhariep District Municipality encountered acute financial constrains due to a limited levy base and for the past three years the District had passed budgets with deficits. The Provincial Department of Local Government provided the Xhariep District Municipality with technical support to achieve the development of budget, budget related policies, internal control manual, annual financial statements and financial management since the suspension of the Chief Financial Manager.

 

Some of the major challenges faced by the Xhariep District Municipality included:

 

·         Non adoption of IDP and Budget.

·         Restoration of the culture of work and accountability.

·         Strengthening of oversight capability.

·         Enhancing financial controls and management.

 

In order to deal with the above-mentioned challenges, the Administrator indicated that a turn-around strategy had been developed to:

·         Provide system support and strengthening of internal controls;

·         Support in the establishment of internal audit function,

·         Ensure development and implementation of performance agreements that could hold Section 57 Managers accountable for performance. 

           

            4.2 Municipal Councillors

 

In her submission, the Executive Mayor indicated that she did not support the intervention as issued by the MEC of Local Government and Housing. She indicated that the Municipal Council was not properly consulted on the processes and rationale for the issuing of the notice of intervention. The Chief Whip indicated that the majority of the Municipal Councillors were supporting the intervention because the Xhariep District Municipality through the leadership of the Executive Mayor had failed to pass the IDP and Budget at the right time. He further indicated that the appointment of the Administrator by the MEC of Local Government and Housing had enabled the Xhariep District Municipality to develop its IDP, pass the Budget and improved internal administrative systems.

 

4.3 Municipal Manager

 

The Municipal Manager indicated that he did not fully support the intervention as issued by the MEC of Local Government and Housing. He indicated that some of the problems identified in the notice of intervention emerged as the result of lack of funding and suitable human resources. Some of the concerns raised by the Municipal Manager related to understaffing of Local Economic Development Unit, Finance and Corporate Unit and other departments, non existence of Internal Audit Committee, lack of experience by some of the Section 57 Managers, lack of proper qualification among certain employees, political interference in administrative operations, lack of proper financial control due to lack of qualified personnel.   

   

4.4 Free State Youth Commission

 

The Free State Youth Commission welcomed and supported the intervention.  It indicated that its interest in the whole process was informed by the implications that the process had on youth, for example, skills development; poverty; unemployment; and vulnerability to drug and substance abuse. Noting the political, administrative, strategic and operational problems identified by the MEC of Local Government and Housing, the Free State Youth Commission was of the view that Section 139 (1) (b) was the best intervention.

 

4.5 Organized Labour  

 

The representative from SAMWU Union indicated that organized labour supported the intervention as issued by the MEC of Local Government and Housing. In support of the intervention, the representative raised concerns relating to lack of consultation on processes leading to the development of IDP and Budget, non compliance by the municipal administration on organizational service agreements, non setting of labour forums within the Xhariep District Municipality and lack of funding mechanisms for local economic development projects.  

 

5.         RECOMMENDATION

           

Having visited Xhariep District Municipality, the Select Committee on Local Government and Administration recommends that: 

 

·         The National Council of Provinces approves the interventions issued by the Free-State MEC for Local Government and Housing.

 

·         The Provincial Department of Local Government and Housing facilitate the appointment of a forensic investigation on alleged financial irregularities and mismanagement in the Xhariep District Municipality.

 

·         Provincial Department of Local Government and Housing ensures the fast tracking of the appointment of Section 57 Managers.

 

·         The Xhariep District Municipality ensures the implementation of good labour practices between the municipal management and organised labour and the functioning of Labour Forum in the Municipality.

 

·         Furthermore, the Xhariep District Municipality should also facilitate the signing of performance management contract and assessment of Section 57 Managers and implementation of code of good conduct and working relationship among Councillors and officials.

 

·         The MEC’s office monitors the progress of the Xhariep District Municipality through the scrutinizing of periodic reports and a copy is forwarded to the NCOP.

 

·         The intervention be reviewed after a period of six months, which is by 30 April 2009.

 

 

Report to be considered.