Report of the Select Committee on Co-operative Governance and Traditional Affairs on Intervention in Mafikeng Local Municipality – Dated 14 September 2010

 

1.         Background and Overview

1.1        The Select Committee on Co-operative Governance and Traditional Affairs, having considered the request made by the National Council of Provinces (NCOP) on 30 April 2010 to consider and report on the intervention notice invoked in terms of section 139 (1)(b) of the Constitution at Mafikeng Local Municipality by the North-West Provincial Executive Council (PEC), reports as follows:

 

1.2        In terms of section 139(1)(b), when a municipality cannot or does not fulfil an executive obligation in terms of the Constitution or legislation, the relevant provincial executive may intervene by taking any appropriate steps to ensure the fulfilment of that obligation, including assuming responsibility for the relevant obligation in that municipality. 

 

1.3        The Office of the Chairperson of the NCOP referred the notice of intervention in the affairs of Mafikeng Local Municipality to the Select Committee of Co-operative Governance and Traditional Affairs, in terms of NCOP Rule 101 for consideration and reporting. The Committee took a decision during its meeting to conduct an oversight visit to the above-mentioned Municipality on 19 August 2010.

 

2.         Purpose and Objectives

2.1        The main objectives of the oversight visit was to determine whether procedural requirements had been met and to verify whether the PEC had used its discretion appropriately, before the Committee could approve/disapprove the intervention. Through the deliberations and interaction with internal and external stakeholders, the Committee wanted to determine how the PEC was intending to restore the fulfilment of the relevant obligations and ensure fulfilment in the long term. The aim was to ensure intergovernmental checks and balances aimed at guarding the integrity and efficiency of the intervention process.

 

3.         Delegation

3.1        The delegation of the Committee was composed of the following Members of Parliament and Officials: Hon MH Mokgobi, Limpopo (ANC); Hon AG Matila, Gauteng (ANC); Hon DV Bloem, Free State (COPE);   Hon A Watson, Mpumalanga (DA); Mr NA Mfuku, Content Adviser (Committee Section) and Mr V Mfuniselwa, Administration Assistant (Committee Section).  

 

4.         Introduction

 

4.1               On 21 July 2010, the North-West Premier tabled a notice of intervention in Mafikeng Local Municipality to the Office of the Chairperson of the NCOP. The Municipality was previously under administration during the 2003/04 financial year, on matters of poor financial management and administration. Furthermore, the Municipality had also been identified as a priority Municipality in terms of section 106 of the Local Government: Municipal Systems Act (Act 32 of 2000) for investigation by the Special Investigations Unit (SIU). However, despite these interventions, the Municipality’s financial situation continued to deteriorate and this affected service delivery adversely.

 

4.2        In terms of section 139 (2)(b)(ii) of the Constitution, the intervention must end if the NCOP does not positively approve the intervention within 180 days since the intervention began, in this case before the end of 27 December 2010.    

 

5.         Problems Identified by the Provincial Executive Council (PEC)

5.1        On 30 June 2010, the Provincial Executive decided to invoke section 139 1(b) of the Constitution in Mafikeng Local Municipality. The intervention was scheduled for a period of six months, with effect from 1st July 2010. The main issues identified by the Provincial Executive to intervene in the affairs of Mafikeng Local Municipality related to:

 

·         governance and administration, which was characterized by Council instability due to a lack of decisive political and administrative leadership;

·         service delivery challenges with regard to the provision of water, refuse removal, storm water systems and electricity;

·         a dysfunctional Local Labour Forum (LLF) as a result of strained relations between management and labour, and poor attendance by management, with resolutions not implemented.

 

The Municipality was not financially viable and there was a lack of political/administrative will in implementing credit control policy

 

6.         Appointment and Functions of the Administrator

6.1        The intervention was presented to a Mafikeng Local Municipality Council meeting on 15 July 2010 and the Administrator, Mr J Motlogelwa, was seconded and effectively appointed on the same date.  He was presented by MEC for Provincial Treasury, Hon L Mabe.  Mr Motlogelwa was appointed to:

 

·         appoint an Acting Municipal Manager outside the current municipal personnel with immediate effect;

·         improve service delivery in Mafikeng including surrounding villages (these should include facilitation of new projects, unblocking of old projects, maintenance of infrastructure and cleansing);

·         improve the financial controls in the Municipality, expenditure management, procurement processes, revenue management and collection, as well as addressing issues raised by the Auditor-General in his reports (MFMA compliance);

·         analyse and implement past and current investigations, commissions of enquiry, forensic audits, SIU, etc;

·         attend to labour matters in the Municipality (outstanding disciplinary cases, labour disputes, functionality of LLF and instil a culture of work and discipline amongst staff members;

·         facilitate the improvement of governance within Council (oversight role), including relations between Council and administration;

·         conclude the outstanding disciplinary case of suspended Municipal Manager (develop charges and commence with disciplinary process);

·         investigate all recently awarded contracts, in order to establish validity and legitimacy thereof; and.

·         perform all other applicable executive obligations as stipulated in various legislations and prescripts.

7.         Oversight Visit to Mafikeng Local Municipality

 

7.1               On 19 August 2010 the delegation of the Committee had interactive and robust engagements with the internal and external stakeholders of the Municipality. The main internal stakeholders the delegation interacted with in the Municipality included the Speaker, Executive Mayor, Chief Whip, Councillors, Ward Committee Members, Administrator and the South African Local Government Association (SALGA). The main external stakeholders the delegation interacted with included members of the community, the business forum and non-governmental organizations.

 

7.2        For the purpose of this report, the submissions made by both internal and external stakeholders are structured on the basis of the five key strategic performance areas of the Local Government Strategic Agenda which are: Municipal Transformation; Basic Service Delivery; Local Economic Development; Municipal Financial Viability and Management, as well as Good Governance and Public Participation.  

    

(A).       Municipal Transformation and Organisational Development

 

7.3        Municipal Council:  There have been serious challenges facing the Municipality, involving service delivery. There have also been challenges between Council and administration that have led to the Provincial Executive intervening in the Municipality. During the past intervention, the Administrator did a good job and systems were put in place. However, after his departure, the administration started to collapse. Labour relations are a serious concern in the Municipality.  Until they are resolved, there will always be disruption of services in the Municipality.

 

7.4        The current Executive Mayor, Cllr. Moreetsi Desmond Jabanyane, assumed responsibility for his position on the 1st February 2010.  It was reported that the previous Executive Mayor, Cllr. Mosa Sejosingwe, took employment with the Presidency. The current Acting Municipal Manager was appointed on 12 August 2010. The Administrator will assist the Council in appointing a full-time Municipal Manager.

 

7.5        Administrator: Governance and administration has been characterized by Council instability due to lack of decisive political and administrative leadership. This has been due to persistent Council interference in the administration and irregular appointment of contract workers which were not required. Equally the Council failed to conclude disciplinary processes of the suspended Municipal Manager.  There were no performance assessments or evaluation conducted for the past three financial years, and the administration was on the brink of collapse, with lack of staff discipline and absence of ethical leadership. In addition, the Municipal Manager has been on suspension for more than 12 months, and disciplinary hearings have been unnecessarily elongated.

 

7.6        MEC for Provincial Treasury: The MEC, Ms Mabe, described the circumstances that led to the decision of intervening in the Municipality and how she was the subject of attacks by the Municipal Council.  According to her, they felt that the MEC was unfair, based on the reasons identified for the intervention. As a result, the majority party did not accept the intervention, but promised to support the Administrator, while the opposition welcomed the intervention. The MEC is of the opinion that an audit of skills needs to be done to verify skills capacity in the Municipality.

 

7.7        Provincial Department: The Acting Head of Department of Local Government and Traditional Affairs, Mr Themba Fosi, reported that both the Municipal Council and Organized Labour approached the Department about a request on invoking a section 139 intervention in the Municipality. However, although the Department instituted a section 106 investigation, the Municipal Council also appointed the Fivaz-Ramathe Commission of Enquiry to conduct an investigation. In the Department’s opinion, this was very strange. In terms of the turnaround areas, the Administrator would look at the key areas of operation and maintenance, revenue and management, the Integrated Development Plan (IDP), governance and administration. The invoking of a section 139 intervention at Mafikeng Local Municipality was a necessary corrective measure, and was communicated properly with all the relevant stakeholders.

 

7.8        Organized Labour: Councillors in the Municipality persistently interfered with the administration. About 20 people were reportedly being employed as contract workers in the Community Services Directorate, and all of them were allegedly being brought in by Cllr Vuyisile Tambam. The same Councillor was paid an amount of R5, 134.18 (cheque no. 900010758) to attend the ELMA Training at the University of Pretoria. He did not attend the course but received payment. He further requested payment of a claim amounting to R1, 121.78 on 16 February 2010.

 

7.9        It was reported that a Mr Martin Sebakwane’s fixed-term contract of employment expired since it was linked with that of the former Executive Mayor. Since the former Executive Mayor had been re-called in January 2010, Mr Sebakwane was given a letter that automatically terminated his contract in March 2010. However, evidence suggested that this official was still on the municipal pay-roll system and was still receiving a monthly salary of R38, 241.44.

 

7.10      Another irregularity reported by Organized Labour was with regard to the irregular issuing of clearance certificates to the buyers of the formerly North-West Housing Corporation which was sold recently. It was reported that the Municipality issued clearance certificates without settling outstanding debts to Council as required by policy. This transaction was for an amount of around R30 million, and this writing-off of debts and the awarding of discounts warrants a thorough investigation.

 

(B).       Basic Service Delivery

 

7.11      Municipal Council:  A claim was made that workers generally in the Municipality reneged on their responsibilities. Some Councillors were also not servicing their communities. Another challenge that was identified was with regard to the finalisation and appointment of Bid Committee members. This contributed to service delivery challenges and delays of projects for communities.

 

7.12      Administrator:  There are basic service challenges in terms of provision of water, refuse removal, storm water systems and electricity as result of lack of operations and maintenance of infrastructure due to insufficient budget. Presently there are high mast lights in eight villages installed in 2007, which have not been energized to date. In summary, service delivery in the Municipality is on the brink of total collapse. The Municipality is the capital town of the Province, but the image of the town does not reflect this.

7.13      A plan for engagement of affected stakeholders such as Business Chambers and Organised Labour will be unfolded, and this will include the assessment of the efficiency of personnel management and optimum utilization of municipal equipment and/or resources.  Mr Andre Du Plessis, a DBSA engineering expert, was appointed. A plan cutting across all service delivery areas will be finalised by 25th August 2010, and a project team will commence work immediately.

 

7.14      Ward Committees: Service delivery is a major problem in the whole municipal jurisdiction. In addition, municipal workers are not properly supervised in discharging their responsibilities. As a result, the community is suffering due to poor service delivery. Furthermore, it has been observed that there is a lot of in-fighting between Council and administration, which results in undue delays of projects and basic services.

 

(C).       Local Economic Development (LED)

 

7.15      Business Forum: The National African Federated Chamber of Commerce (NAFCOC) raised concerns about the municipality’s inability to see business as a strategic partner in development at Mafikeng. Organized business should form partnerships with the Municipality especially on issues of LED. Agriculture was identified as a major economic development activity in the Province. However, the Municipality has not played any pivotal role in this regard. In addition, NAFCOC felt that the issue of corruption and tender irregularities needed urgent address.

 

(D).       Municipal Financial Viability and Management

 

7.16      Municipal Council: There is a serious challenge of collecting revenue due to the Municipality. Government institutions owing the Municipality a lot of money that could have been used for service delivery. The Provincial Government departments owe the Municipality around R190 million. Parliament should assist the Municipality in recouping all the money owed to it by the state departments. Equally, there are serious capacity challenges in the Finance Directorate, and this has led the Municipality to receive disclaimers in four consecutive years.

 

7.17      Administrator:  Mafikeng Local Municipality is not financial viable. On average, the monthly salary bill is R12 million, which far exceeds the income from services and rates levied at R10 million per month. Revenue collection for services levied is very low and impacts negatively on the financial viability of the Municipality. There are numerous allegations of fraud, corruption and maladministration on the procurement of goods and services, as well as on the sale and alienation of vacant municipal land.

 

7.18            The DBSA seconded municipal finance expert, Mr Eduard Le Roux, who will lead the Finance Section to deal mainly with management issues, revenue enhancement and Auditor-General matters. Efforts are already afoot to ensure that matters such as payment of government debts (mainly property rates), are brought to finality without delay. This will enhance the cash flow of the Municipality and realise a cash-funded budget, which is an issue at the moment.

 

7.19            Furthermore, an Audit Recovery Plan with responsible officials and target dates will be implemented and consultants have been appointed to assist with fixed asset register and debtors database cleansing. The Municipality has decided to leave the Shared Service for Internal Audit and the Shared Audit Committee rendered by the Ngaka Modiri Molema District Municipality, since it has not been effective.

 

(E).       Good Governance and Public Participation     

 

7.20      Administrator:  The LLF is not functional as a result of strained relations between management and labour. There are serious tensions and conflicts between management and workers, as a result of disagreements over labour-related matters. There are reported allegations of corrupt activities in the Municipality which are not acted upon by management and Council. In order to rescue the Municipality from total collapse and to salvage whatever is left in the institution, there is a need to decisively intervene in the Municipality, both at political and administrative level.

 

7.21            Members of Community Forums: Public participation and consultation is extremely poor in the Municipality. There are Imbizo’s held by the Municipality every six months, where false hopes are raised by the Council. When delivery on the issues raised by the communities is not met, the Council attributes this to insufficient funding or budget constraints.

 

7.22            Ward Committees: It has been indicated that the work of Ward Committees seems not to be appreciated by the Municipality, although they are the communication link between communities and the Municipality. Hence it has been suggested that stipends for Ward Committee members should be awarded. In addition, it has been reported that there are conflicting roles between Ward Committees and Traditional Leaders.

 

8.         Committee Observations and Opinion

 

8.1                 It was observed that most of the interventions undertaken in the North-West Province were based on in-fighting between the Municipal Council and administration. The Municipal Council of Mafikeng in particular was suffering from lack of discipline, and this matter needs to be looked at as a matter of urgency.

 

8.2                 In Mafikeng, in particular, there has been a total break-down of working relations between stakeholders. The invocation of section 139(1)(b) intervention will allow for new leadership in the Municipality in the form of an Administrator, for both political and administration to stabilize administratively without the interference of the Municipal Council.

 

8.3                 The Committee acknowledged the partnership requested by NAFCOC in contributing to local economic development in Mafikeng. It is the Committee’s opinion that this proposed partnership should be encouraged and developed.

 

10.        Recommendations

 

10.1      Having conducted the oversight visit to Mafikeng Local Municipality and interacted with all relevant stakeholders, the Select Committee on Co-operative Governance and Traditional Affairs recommends as follows:   

 

10.1.1      The NCOP approves the intervention in Mafikeng Local Municipality as issued by the North-West Provincial Executive Council in terms of section 139 (1)(b) of the Constitution.

 

10.1.2      The Minister for Co-operative Governance and Traditional Affairs should approach the Hawks to pursue criminal investigation in all cases of financial irregularities and fraud in Mafikeng Local Municipality as a matter of urgency.  A progress report in this regard should be forwarded to the NCOP within one month.

 

10.1.3      The Administrator should investigate the matter regarding the Council vehicle in Gauteng Province, as well as the municipal tractor which was irregularly used by a contractor.

 

10.1.4      The Administrator should investigate the alleged improper appointment of 20 contract workers in the Municipality, and take the necessary corrective measures in rectifying these appointments.

 

10.1.5      The Administrator should immediately investigate and take corrective steps with respect to the Director of Community Services, who is alleged to have refused servicing the community.

 

10.1.6      The Administrator should fast-track the process of appointing the Municipal Manager, in order to facilitate the transfer of skills and to ensure continuity.

 

10.1.7      The North-West MEC for Provincial Treasury should table quarterly progress reports to the NCOP and the Provincial Legislature on the status of the intervention in the Municipality, including challenges encountered.  

 

Report to be considered.