North West struggling municipalities: hearings
The Auditor-General was of the opinion that 100% intervention was needed in the North West as the situation in the province was serious. The Committee resolved to track the municipalities in the province on a quarterly basis and requested that the Auditor-General 's quarterly reports on the North West municipalities be forwarded to the Committee.
The Committee received submissions from the Maquassi Hills, Ventersdorp and Tswaing Local Municipalities, all from the North West. The submissions were requested after the Committee had conducted an oversight visit to the North West. The Office of the Auditor-General, and relevant departments such as the Department of Energy, the Department of Water Affairs, National Treasury and the Development Bank of Southern Africa were invited to give their inputs on these particular municipalities.
Each municipality’s financial viability and management was reported on as well as its revenue sources and its rate of success in the collection of revenue, compared to its budget. The cash flow position as well as debtor and creditor age analysis was provided plus information about basic service delivery, indigent policy, and conditional grant spending. The three municipalities also had to report on the state of working relationships with Eskom and government departments, plus vacancies, municipal transformation and institutional development.
The Committee was not impressed with the state of Maquassi Hills Local Municipality which was bankrupt, had a suspended municipal manager under forensic investigation, was paralysed by infighting, and had incurred R750 000 in two months with continuing legal battles. The acting Municipal Manager said the last tabled and approved annual report was 2005/6. The 2006/7, 2007/8 and 2008/9 annual reports had been compiled and were finally completed. The reports were going to be tabled before the Council by 31 January. The 2009/10 annual report was being attended to and a lot of work still had to be done on the 2010/11 annual report. Issues of concern to the Committee was why there was a dysfunctional relationship between the mayor and other members of the mayoral committee, why the former municipal manager had been suspended and why had the forensic report not been tabled in Council. Members warned that if the municipality rendered institutional arrangements, financial management, municipal manager and the mayor dysfunctional they were playing with Section 131(9)(c) of the Constitution.The municipality was warned against playing politics inside the municipal administration. The meeting became heated and the Committee was accused of being negative and judgmental. The Chairperson told the municipality to submit its response to the findings of the Auditor-General by 28 November 2011. The municipality had to deal with the forensic report. There was a need to address the leadership problem in the municipality in order to take the municipality forward.
The municipal manager of Tswaing municipality had been in office for 26 days. The 2010/11 annual financial statement had not been submitted yet. The provision of water and sanitation in rural areas remained a district competency. Solid waste disposal and refuse removal remained a serious challenge. Sewer leakages were experienced on streets especially in townships due to old unserviceable equipment, lack of manpower and an old fleet. There was the challenge of a pending court case with contractors. The internal audit committee was in place but non-functional. The audit report reported irregular expenditure of R20.2 million and fruitless and wasteful expenditure of R1 million. Members asked why Tswaing municipality had captured a zero expenditure on construction and what its action plan was to address the audit findings The new municipal manager was advised to study Chapter 8 of the Municipal Financial Management Act.
Ventersdorp had a suspended mayor and its acting municipal manager had been in office for three weeks but certain key positions were being finalised though some critical positions could not be filled because of budget constraints. Water, sanitation and electricity delivery was described. Currently no households were receiving free basic electricity. The municipality was without doubt not financially stable. Operating income could potentially increase if there was proper billing and limited bridging of electricity and water. Credit control measures for non-payment of services would be in place in 2011/12 such as water restriction and cutting-off of electricity. The findings of the Auditor-General were noted. Key amongst the Committee’s concerns were the debt collection action plan that could solve the municipality’s financial problems, unauthorized expenditure of R10.4 million and irregular expenditure of R28.2 million and why the last annual report to be tabled in Council was in 2006. The municipality was also asked to explain the irregular contracts signed by the municipality. The mayor, former mayor and current municipal manager could not explain why they had been entered into. The municipality was asked to respond in writing to information requested by the Committee.
Maquassi Hills Local Municipality Presentation
Mr Charl Wenun, Chief Financial Officer, Maquassi Hills Local Municipality, gave a financial overview of the municipality. All revenue sources for the municipality and the anticipated budget were provided. The revenue sources were electricity charges, property tax, water charges, refuse charges, rental income, dividends, licence fees and grants capital to name a few. Income from electricity charges was R26.9 million as opposed to the R28.5 million that had been anticipated. This resulted in a financial crisis for the municipality. Further, the municipality anticipated collecting R27.8 million in water charges but it only managed to collect R6.5 million. This meant that there was a deficit of R21.2 million. The income received was just sufficient to pay the municipality's wage bill and all other obligations were not attended to. The debtor balance was R25.6 million. The debtor age analysis was given: debtors at 120 days owed R151 million which consisted of R51.3 million for water, R39.7million for sewerage, R22.1 million for refuse and R21 million in interest. The municipality could not enforce the credit control policy in all areas by cutting electricity off for poor payment or non-payment of services. The revenue budget for 2010/11 was R271.4 million but the municipality had managed to receive only R189.5 million.
In terms of budget performance for 2010/11 the amount that had been budgeted for employee salaries and allowances was R57.6 million. The funds were not fully utilized. The municipality used R47.7 million as several positions in the organisational structure were not filled in the financial year.
The performance on conditional grant spending was given. Under the Municipal System Improvement Grant (MSIG), the failure by the Council to implement the approved organisational structure since August 2010 resulted in deviations. Due to the non-appointment of required staff, the planned budget could not be implemented. The same reasons were given for the deviation from the Financial Management Grant (FMG), hence no interns were appointed. The municipality applied for a rollover.
The Chairperson asked when the rollover was applied for?
Mr Wenun responded that the municipality had applied for the rollover from National Treasury (NT) but the application had been rejected on the grounds that the municipality’s section 71 reporting and the figures that had been disclosed in the municipality’s annual financial statement differed. The municipality had re-submitted its request to NT, based on the training session that the municipality had held with the NT to address the discrepancy of the figures. The municipality was awaiting the outcome from the NT.
In terms of the Municipal Infrastructure Grant, the poor performance by appointed contractors on the Rulagayang Sports facility project and the Lebaleng Ext. 5 Roads, meant the MIG allocation could not be spent.
A creditor age analysis was given as of 30 September 2011: the municipality owed Eskom R13.7 million and R16.7 million to Sedibeng Water. The municipality had a meeting with Sedibeng Water on how best they could settle the outstanding balances. The municipality and Eskom were supposed to hold such a meeting in order to prevent Eskom from cutting off electricity to the municipality.
The cash flow position of the municipality was given. The monthly actual amount received from consumers versus the salary and allowance bill was given. In July 2010, the municipality received R4.1 million in income and its salary bill was R4.7 million. The available monthly cash flow for the month stood at R592 430. For the month of December 2010, the municipality received R4.4 million against a salary wage bill of R4.3 million which left the municipality with a cash flow of R25 749. In February 2011 the municipality received R5.7 million against its salary bill of R4.4 million. The available cash flow left was R1.3 million. The total amount of money in the municipality bank accounts and investments stood at R5.3 million as of 31 June 2011.The municipality either paid Eskom or Sedibeng or they had to pay salaries.
The municipality’s current indigent register had 1 481 households on it. The register remained open for new applications. In addition all new applications were verified as per external credit verification per ID No. Control measures had been put in place to pick up if approved indigents changed its status. The contents of the register were verified on a monthly basis.
Mr M Mapholi, Acting Municipal Manager, Maquassi Hills Local Municipality, gave the status quo of the annual report. The last tabled and approved annual report was the 2005/6. The 2006/7, 2007/8 and 2008/9 annual reports had been compiled and they were finally completed. The reports were going to be tabled before the Council and the oversight Committee before 31 January. The 2009/10 annual report was being attended to and it was receiving the attention of the auditors. A lot of work had to be done in respect of the 2010/11 annual report.
Under the PMS the challenges that the municipality faced was that there was need to improve on its reporting strategy in terms of Section 47. Furthermore no assessment had been done and no Performance Management System (PMU) had been established. The municipality used Shared Services (Internal Audit) that resulted in the auditing of reports.
A brief explanation was given of the municipality’s intergovernmental relationship with departments and other municipalities. The North West Treasury department had assisted the municipality with the secondment of the Budget and TreasuryOffice (BTO) internsand they had assisted the municipality with the compilation of the 2010/11 budget schedules. The Development Bank of Southern Africa (DBSA)had assisted the municipality on a number of projects through loans and grants such as funding the bulk water pipeline and the water demand and management project at a cost of R6 million. The DBSA had also provided technical assistance in the form of two deployees, a full time professional engineer and a part time professional town planner.
There was no structured relationship between Eskom and the municipality, with the effect that in most community uprisings, Eskom was cited as a major contributing factor. Most of the township’s electricity projects had been delayed for years and high mast lights were not maintained. However the municipality had engaged with the local and regional offices of Eskom to resolve the community’s concerns. The municipality had structured a relationship with the Sedibeng Water Board. They conducted bi-monthly top management meetings to resolve matters of common concern including queries on municipal payments and the provision of quality water and maintenance of infrastructure. The municipality was however finding it difficult to establish a good working relationship with the Department of Public Works and Roads, South African Social Security Agency (SASSA), the South African Police Service (SAPS), the Departments of Education, Sports Arts and Culture, Agriculture, Land Affairs and Home Affairs. The former Mayor had raised the matter at the North West Premier's Co-ordinating Committee but the problem still persisted.
Explanation of basic service delivery was given. The challenges with current housing projects was the untraceable beneficiaries, slow approvals by the province, a high number of declines and the price escalation of building materials. The municipality had made a number of interventions such as to request top-up funding, advertising for untraceable beneficiaries, conducting a survey for qualifying beneficiaries and re-allocating subsidies of untraceable beneficiaries to other areas.
The municipality was currently supplying basic free water to all community members. 16 282 household units had access to portable water. Farmers were excluded because they were dependant on its private boreholes. With regards to free basic water supply, 6 000 kiloliters was serviced to all the 1 427 indigent household units per month at an average of 25 liters per person. Information on other basic service delivery services such as sanitation services, roads and storm water, electrification, waste management and refuse removal and parks and recreation were given.
The Committee was briefed on the municipality’s infrastructure projects that were implemented in 2009/10 and 2010/11 financial years. Challenges were the vandalism of the municipality’s infrastructure such as pump station machinery, cables, manhole lids, illegal connections of both water and electrification, water loss of 20-30% that was unaccounted for due to non-payment and illegal connections and massive sewer blockages that cost the municipality R750 000 as a result of community members throwing hard substances into the system. Further challenges were the unskilled and unqualified staff members and not enough capital budget to purchase basic service delivery tools.
In terms of governance, the municipality sought to build and strengthen administrative and institutional capacity through transformation and institutional development. As per the service delivery plan the municipality sought to achieve a number of deliverables such as training and development, recruitment and appointment of critical staff, labour relations matters, and policy formulation to guide decisions taken by management and council.
Mayor Noni Kgabi noted that the municipality was undertaking an investigation against one of its employees [the municipal manager].
The Chairperson referred to the Auditor-General Report on Maquassi Hills Local Municipality which noted unauthorized expenditure of R109.6 million, irregular expenditure of R15.8 million and fruitless and wasteful expenditure of R623 000. He asked the Municipality to explain how this had happened. A forensic audit was conducted and the municipality was handed the audit report on 18 July 2011. To date the report had not been tabled in Council. He asked how this had happened and what the contents of the report were.
Mr M Makhubela (Limpopo) noted that payments were supposed to be done within 30 days as per legislation. He asked why there was late payment from the Municipality. The municipality was supposed to give time frames to the Committee for all recommendations that it intended to implement. Lastly he questioned the municipality on why the annual reports were not done in time.
Mr T Chaane (North West) asked what informed the decision to budget R500 000 and anticipate the collection of R12.2 million in interest charges and what was the municipality doing to address the increasing debtors book. Was there any agreement between the municipality and Eskom on how the municipality was supposed to pay its debt, what was the municipality doing to address illegal connections of water and how did the municipality intend to fill the vacant posts?
Mr B Mashile (Mpumalanga) asked if the municipality was able to manage its debts correctly, which government department owned the municipality money and for what, whether the number in the indigent register was correct. He asked for more clarity on the R11 million that had been budgeted for construction services, if the 60% compensation of employees in the budget was correct and who was the municipality paying and if the figure was comparable to other nearby municipalities. In addition he asked what was meant by the term general expenses in the municipality’s expenditure budget because it amounted to R48.5 million, whether the municipality was not able to spend the money allocated for the conditional grant because they were waiting for a number of individuals to be appointed, whether there were any time frames set to finalise the investigations of the municipal manager and if he was getting a salary at the end of the month. He was concerned about the section 57 managers and asked how many where they, what qualifications did they possess and if they were adding any value to the municipality. He urged the municipality to have a serious relationship with Eskom. Concern was raised over the role of the internal auditor. An internal auditor was supposed to help the municipality address its issues on a daily basis as opposed to taking on a consultancy role with the municipality. Lastly he asked if the Council was aware of the report that had been tabled before Parliament.
Mr D Bloem (Free State) said that he was interested in the current investigation. He asked why the investigation had been instituted.
Mr R Lees (Kwa Zulu-Natal) said the question of the cash flow was a serious one for the municipality. He asked if grant income was used to meet current expenses and if the unspent grant income was placed in a trust account. He asked where the R810 million needed to fix roads was going to come from if the municipality was collecting very little revenue. The municipality had given the Committee a lot of plans but not any actual action on how they were going to implement the plans. He asked if the National Taxpayers Association was active in the Maquassi Hills Municipality. The municipality was asked how they measured the 6000 kiloliters of water that was being consumed and how did they manage to restrict the water consumption to 6000 kiloliters a month. He noted that the municipal manager said that the municipality would be switching on street lights. He asked if the project was a municipal project or whether the project was just increasing the municipality's bill to Eskom. Lastly he asked how the municipality measured water loss.
Mr J Bekker (Western Cape) asked what the Municipality was going to do to rectify the financial problems.
Mayor Noni Kgabi responded that the forensic report was tabled to Council but Council had rejected the report. After the municipality went back, they were advised to act on the report but nothing was done. The challenges that she faced in the municipality had been explained to the Committee during its oversight visit. Decisions were taken in her absence and this made one's life very difficult. The recommendations from Auditor-General's Report would be tabled on 29 November. The municipality instituted an investigation against the suspended municipal manager after a forensic investigation had been concluded. To her it seemed as if the investigation against the municipal manager was as a result of the forensic investigation outcome. A second investigation had been instituted against the suspended manager. She could not explain why the municipal manager was being investigated for a second time. However the investigations had to go on. The results of the investigation dwelt much with issues that cropped up in the forensic investigation. Since the municipal manager was suspended, the municipality had incurred a lot of legal costs. The Council decided on a second suspension against the suspended manager. She could not get a clear answer on what was going on from the Council. The Mayor stressed that she was able to sit in two council meetings only. She was voted out because she talked too much or she was asked to recuse herself in a number of meetings. The Mayor was worried that the Council and taxpayers money were being used yet the municipality did not know what they were doing.
Mr Bloem said that the situation was getting difficult and complicated. He could not understand how a meeting could proceed when the elected mayor was not present and how the second investigation was as a result of the first investigation. This was not correct. It was no use to have a second investigation otherwise the municipality would sit with a long list of investigations.
Mr Mashile said that there was supposed to be a targeted date to complete the investigation. He asked how the mayor’s relationship was with the Speaker, Municipal Manager And Chief Whip. It seemed as if there was a dysfunctional relationship amongst the parties.
Mr Makhubela asked how a council could reject a forensic report and on what basis. He asked if the mayor was comfortable and felt free to work.
Mr Chaane highlighted what had been said during its oversight that the municipal manager had been suspended because he had instituted a forensic audit. He said if the Council failed to act on the reports the Committee would take the forensic and the Auditor-General (AG) reports further with the relevant institutions. He asked how much had been spent in legal costs by the municipality in its fight against the municipal manager. The municipality was so small such that it was not supposed to involve itself in legal battles.
Mr Lees noted that the municipality said that it was a bankrupt municipality. However there was a huge delegation that had traveled all the way to Cape Town for the municipality’s presentation to Parliament. When the Committee exercised its oversight, its delegation was not as huge as the one that was currently before the Committee.
Mr D Montsitsi (Gauteng) suggested that the Committee receive copies of the forensic report. He suggested that the matter be taken up with the State law agents.
The Chairperson said that the documents would be circulated in advance in the Committees next meeting. He highlighted that the Committee was not going to address the municipality's community squabbles.
Mr T Selete, Member of the Mayoral Committee (MMC) for Finance and Executive Committee Member, highlighted the need to address the matter holistically. The municipality was faced with a number of challenges because the Speaker was in and out of the hospital and there was no consistency. The municipality was prepared to table the report but time was not on its side. They were prepared to go and table the report to the Council. Council was of the opinion that the Mayor was having a relationship with the suspended municipal manager. And as such the mayor had an interest in the matter. The Municipal Manager was suspended because of non-compliance with the supply chain management regulations. In addition the municipal manager’s contract was supposed to have been terminated on 31 October but it was extended by one year. The issue of the forensic audit was part and parcel of the non-compliance that had been highlighted by the AG. Council felt that the pattern in which the audit had been addressed was wrong. The forensic audit was not done holistically to target different departments but it was done to target various people. They were prepared to table the forensic audit report.
Ms Matota Matete, MMC Community Services and Engineering and Executive Committee Member said when the Council addressed the issue of the forensic audit, the mayor recused herself due to personal reasons.
Mr Sammy Duffy, Speaker of the Municipality, responded that at a local level there was supposed to be a harmonious relationship. In the three months that he was off sick, he did not know what had happened. There was unauthorized expenditure when the municipal manager spent R850 000 without the Council’s consent after having provided three quotations. Role clarification in the municipality was a problem. He disagreed with the opinion that the municipality was bankrupt.
Mr Don van Zyl, MMC Administration and Executive Committee Member, said there was a need to work together and correct the mistakes that had been made. Ten special council meetings had been held. The AG's report and the forensic report spoke to one another. Nonetheless Council adopted the AG's report only after a very long time. He was willing to take the issue of the forensic report further.
The Chairperson said that it was clear that the municipality's committee had a lot of work to do before they rose in December. Councillors had to ask themselves what they had done to make a possible change in people’s lives in terms of its service delivery.
Mr Chaane said that it was important to highlight the contradictions and the consequences of some of the statements that had been made in the meeting. Other Councillors were saying that the forensic report had not been tabled but they were also saying that the forensic report was biased and targeted a number of Councillors. As such there were Councillors who were preventing the report from being tabled in the Council. Secondly, the Councillors indicated that they were aware when the investigations were conducted and at no point had the Councillors tried to stop the investigations if the investigation was not authorised. To the Councillors, the problem was the content of the report plus the cause thereof. The forensic report was being handled badly. The municipality had so far spent R750 000 in two months on legal battles and they were still continuing with the legal battles. The former municipal manager was earning a salary while he was suspended. The dispute was not helping the municipality because huge expenses were being incurred.
The Chairperson said that the municipality had to deal with the forensic report sooner rather than later.
Mr Montsitsi warned the Councillors that they would be in trouble if the matter were taken up. He stressed the need to be honest by the municipal members.
Mr Bloem was happy that some of the Councillors were present to give a true reflection. There was a need to get to the bottom of the issue since the money belonged to taxpayers. There was no need to rush. The public was expecting guidance from the Committee. Ten meetings were held but there was no concrete report. If the municipality did not want to solve the issue of the forensic report, the Committee would solve the problem.
Mr Makhubela was worried because the report the Committee had received had a lot of loopholes. He asked what role had the audit committee played in the forensic investigation.
Mr Mashile stood up to address the Maquassi Hills Local Municipality. If the municipality rendered the institutional arrangements, financial management, municipal manager and the mayor dysfunctional, they were playing with Section 131(9)(c) of the Constitution.If the section came the municipality’s way, the municipality was not supposed to cry foul. They were not supposed to play politics inside the municipal administration.
The Chairperson read out the contents of the Government Gazette 7th of June 2004 number 23465 in particular Section 17. He warned the municipality that any person who with intent to deceive the House or Committee produces to the House of Committee any false, untrue or any fabricated or falsified documents committed an offence and was liable to a fine or imprisonment of up to two years or both. Everything that was being said in the meeting was being minuted since it was a public meeting. He requested that the municipality tell the truth to the Committee.
Mayor Kgabi said that she did not feel free working in the municipality because it was difficult. She agreed with Mr Chaane that the initial suspension was the outcome of the forensic report and the money that was spent. She was not free to work in the municipality because as and when she had to work, rumors were spread about her. She was given many names, as a result there was no progress in her work.
Mr Mashile asked if the Council was aware of the contents of the report that had been presented to the Committee, given the dysfunctional relationship that they had.
Ms Kgabi responded that the Council was not aware of the full contents of the report. The municipality did not have enough time to go to Council. A meeting had been scheduled with Council on 26 October but the meeting was postponed. No reason was given to the mayor by the acting Speaker.
Mr Bloem suggested that the Committee should not entertain the report because it was one sided. The Committee would get into trouble for listening to and debating a report that a Council had not seen.
Mr Bekker said that it seemed as if it was a political fight that was going on within the municipality. The Committee needed to look at all of the documents that came to it.
Ms T Memela (KwaZulu Natal) said there was no need to continue with the report.
Mr Makhubela urged the Mayor to go to any police station and lay a charge against anyone who intimidated her.
Mr Montsitsi said the Committee was dealing with a municipality that was dysfunctional and had a lot of infighting. They needed to understand the problems that the municipality faced. Some of the reports that the municipality had submitted to the Committee were the same reports that the municipality had given to the AG. The Committee should allow the municipality to go ahead with its report because the objective of the Committee was to get to the bottom of the dysfunctional relationship.
Mr Bloem pointed out the Mayor had said that the presentation had been drafted when the municipality delegation had reached its Cape Town hotel. If the Committee entertained the report that was one sided, the Committee would implicate itself in listening to one side of the faction.
Mr Chaane responded this was not possible as the Committee had been in possession of the report the previous day. The municipality in coming to Cape Town had incurred a lot of expense. The report had already been tabled for an hour and a half and questions had been raised on the report. Hence it was only fair that answers be given. It was a pity that the North West Department of Co-operative Governance and Traditional Affairs (COGTA) was not present. No apology had been given despite the COGTA provincial department being invited.
The Chairperson indicated that the Committee would be going back to the North West to measure the progress made before the end of the Committee term in 2014.
Mr Van Zyl explained that the report had not been drafted the previous night but on Monday 21 November. The report was only perused on Tuesday 22 November. The MEC and the Premier of the North West were with the municipality and the Premier had instituted Section 106. The municipality was promised a committee of five people who were going to assist the municipality. National Treasury had given training for the Councillors. Eight per cent of the Councillors were first time councillors and they had a lot to learn but after the training they were clear on what their functions were. There was need to address the problems before the municipality went into recess. In addition there was an acting Speaker who had filled in for the Speaker during the period when the Speaker was sick who had not done things correctly.
Mr Mashile supported Mr Chaane’s view that the questions raised should be answered. It was important that Councillors respected offices such as the office of the Mayor, Speaker and the MMC and give due authority to the office in relation to of the powers of the office. Bit by bit, the municipality was moving towards a Section 139(1)(c) intervention.
Mr Selete said that the report presented to the Committee was supposed to have been adopted by the Council. Due to time constraints the Council could not adopt the presentation. He apologized for any inconvenience that had been caused and he pleaded with the Committee to consider the presentation.
Mr Duffy said that Committee Members should not reiterate all the time about Section 139. Committee Members were supposed to wait for responses from the municipality. Committee Members were not supposed to be judgmental before answers were given. Everything that the Committee had said was negative.
Mr Mashile(on a point of order) said that the Committee was not supposed to allow the Speaker to teach the Committee Members how they were supposed to work when in actual fact he himself was not taking his job seriously.
The Chairperson said the municipality had 14 months to address the problems that had been highlighted.
Mr Montsitsi said that since the Speaker was ill, he did not know what was happening in the municipality.
Mr Wenun responded that he could not answer on the issue of the fruitless and wasteful expenditure and irregular expenditure because they were issue that came directly from the forensic investigation. Once Council had dealt with the report, the matters raised by the AG would be addressed. The R750 000 in legal expenses would also be reported as fruitless and wasteful expenditure. The municipality committed itself to addressing the problem of the creditors age analysis and the creditors book. In terms of the Municipal Finance Management Act, creditors were supposed to be paid within 30 days of the submission of invoices. The management of debtors was a problem raised in the AG's Report. The reason the problem persisted was because of the cash flow position of the municipality. Creditors aged to a period of over 30 days because the municipality had to first pay its wage bill. Interest earned was interest charged to consumers who were in arrears. The anticipated figure of R12.2 million was the actual interest levied to consumers who were in arrears. In the last financial year the municipality had written off over R100 million.
Mr Wenun said not all of the municipality’s indigents were registered. There were far more than 1481 indigent households in the municipality. There was a need for the community to apply for indigent subsidies. Some of the municipality's officials were earning additional income after hours by removing devices that were used to curb the water. General expenses included the municipality’s subsidies to indigent people. There were 1 481 indigent households but the municipality had budgeted for about 9 000 households and this was included in the general expenses. The former municipal manager was still being paid a salary until October 2012 when his contract expired. There was no unit that specifically dealt with budget related matters and this affected the quality of reports. There was a ratepayers association in the municipality. The municipality was responsible for the maintenance and consumption of the electricity of all streetlights. This resulted in the municipality paying Eskom money in an area where the municipality was not earning an income. Other revenue included sundrysources of revenue like library fines.
Mr Mapholi added that the municipality had not signed any agreement with Eskom. The municipality had approached the DBSA to reconsider its agreement so that the water loss issue could be address. The CFO had a tertiary qualification relevant to finance, the director of community service had a master’s degree, the acting director of administration had a tertiary qualification that related to administration. As a municipal manager he had an engineering degree and he had a masters degree in water studies.
The Chairperson said that the municipality was supposed to submit in writing to the Committee its organogram and its response to the findings of the AG before Monday 28 November 2011.
Mr Lomax Gopane, Acting Chief Director. Department of Finance: North West, said that there was a delay with the Sedibeng Water agreement. He requested the municipality to fast track this agreement.
Mr Stanely Matarawe, Department of Energy, said that the concerns that the municipality had raised with regards to Eskom, had been addressed.
Ms Marie Briskey, Chief Director, Department of Water Affairs: North West, said that extensive support was being given to the municipality. The department was very concerned about the wastewater treatment management in the municipality. The Department had assisted the municipality to develop business plans for the acceleration of the community infrastructure programme and the plan had been submitted to the Department’s head office for funding support for two wastewater treatment works. Support was also offered on the water service development plan. There was a good alignment of water service development plans. The Department supported the municipality in the development of by-laws and water related services in the Council. Further, the municipality had been assisted in developing a water conservation demand operational plan in the two previous financial years. It was a concern that the plan had not been implemented yet because it had been finalised in the previous financial year.
Mr Bethuel Netshiswinzhe, DBSA Regional Manager: Gauteng, Free State and North West, said that a wide range of support was being given to the municipality. In terms of the loan, the amount owing was around R6 million and the municipality was in default. The loan allowed the municipality to provide access to water to a number of households in the municipality. The DBSA was engaging with the municipality in developing a turnaround strategy that would allow the municipality to focus on the issues of collection and this would enable the municipality to be in a position to repay the loan. There was a need to address the leadership problem in the municipality and take the municipality forward.
Tswaing Local Municipality presentation
Mr M More, Acting Municipal Manager, Tswaing Local Municipality, said that he was new, being only 26 days in office. He asked for the Committee’s leniency. He was willing to take the municipality to greater heights from the current position it was in. A letter had been received from the Committee that clearly outlined the aspects that the municipality had to address and they had done this.
In terms of municipal transformation and institutional development, the Work Skills Programme (WSP) had been developed and it was submitted to the Department of Labour. The municipality’s budget was GRAP compliant. A number of strategic posts had been advertised such as the Project Management Unit (PMU),communications unit, corporate services director and municipal manager. In terms of basic service delivery, the Ratepayers Association in Sannieshof was still withholding payments. Access to portable water was still a serious challenge in Letsopa/Ottosdal and Agisanang/ Sannieshof. The utilisation of underground water sources was not enough for the current demand. In the long term there was need to tap into the Maquassi Hills water scheme about 40km away. There were 31 villages across Tswaing that utilized the underground water supply. The municipality lacked basic infrastructure especially roads and land for residential purposes in all the townships. Farm evictions were still a challenge that lead to an influx to the townships and towns. A poor relationship between the tribal authority and the municipality hampered developments in some of the rural areas such as Mandela Park and Kopela.
The provision of water and sanitation in rural areas remained a district competency. Solid waste disposal and refuse removal remained a serious challenge. Sewer leakages were experienced on streets especially in townships. This was due to old unserviceable equipment, lack of manpower and old fleet. There was need to convert from septic to modern sewer networks systems across the municipality. There was a challenge of a pending court case on Letsopa Extension 5 whereby two contractors had been appointed by both the Department and the municipality to develop low cost housing. The Department of Human Settlements, Public Safety and Liaison had taken over all of the incomplete housing projects. Council had adopted the Spatial Development framework and Land Use Management Scheme and it was being funded by the DBSA. A risk management plan had been initiated. The rehabilitation of potholes was ongoing and there was a road maintenance plan. In addition the revenue enhancement project had been developed.
There was need to review the Local Economic Development (LED) strategy. The LED forum had just been established. The Public Private Partnership was realized within the municipality. Furthermore the SMME database had been developed.
A brief presentation was given on the municipality’s financial viability and management. The annual statement had not been submitted yet because the audit report had been received late, in August 2011. This late submission was as a result of the conversion from GAMAP to GRAP.Section 71 reports had been submitted up to October 2011. The internal audit service and the internal audit committee was in place but they were non-functional. The municipality and the district shared this service together. The municipality had appointed Gobodo Inc to address the queries that had been raised by the AG for 2009/10 and 2010/11. 4000 beneficiaries had been registered on the indigent register. There was a need to review the register time and again in order to update it. 52% of the MIG had been spent. This was as a result of the late registration of projects due to poor planning and no PMU.
In terms of expenditure and performance on conditional grants, R17.4 million had been allocated for the MIG but only R9.5 million had been spent. R750 000 had been allocated for the Municipal Systems Improvement Grant (MSIG) and all of it had been spent. The same was true of theFinance Management Grant (FMG).
An in depth debtor age analysis was given on the following accounts: government, business, households and other. Government owed the municipality R24.1 million. The district had taken over the functions of fire fighters and environmental practitioners, which the local municipality did not have the capacity to handle. There were no service level agreements between the municipality and other government departments.
Ventersdorp Local Municipality presentation
Ms Mpho Motladille, Acting Mayor of Ventersdorp, presented the delegation. Mr Makade had been appointed as the acting municipal manager three weeks back and Mr Daniel Tebogo Motlashuping was helping the acting municipal manager with the handover.
Mr Bloem asked where the mayor was.
Ms Motladille responded that the mayor had been suspended. A detailed report on the matter was present.
The Chairperson asked if the presentation was credible and whether it was a true reflection of the current situation.
Ms Motladille responded that the presentation was a true reflection of the current situation of the municipality.
Mr Joel Makade, Ventersdorp Acting Municipal Manager, gave an overview of municipal transformation and institutional development. A process of policy development and review would be undertaken very soon. The organisational structure had been successfully reviewed and it had been adopted on 12 July 2011. The placement of 23 staff was currently in process and it would be finalised soon. There were 142 filled posts and 81 vacant posts. The municipality was in the process of filling vacancies in the top management. The position of municipal manage had been advertised. Shortlisting was conducted and interviews were finalised on 7 October 2011. Subsequently Council had approved his appointment as municipal manager on 3 November. The vacant positions of managers directly accountable to the municipal manager had also been advertised and the closing date for applications had been October. However other critical positions could not be filled because of budget constraints.
The annual training report for 2010/11 had been compiled and submitted to the Local Government Sector Education and Training Authority (LGSETA) together with the workplace skills plan for 2011/12. The key responsibilities for the training committee were to assist with the development and implementation of the workplace skills plan. Due to budgetary constraints training interventions could not be enrolled accordingly.
In terms of basic service delivery, the municipality was a water service authority and water service provider and 13 433 households were provided with potable water. Currently there were 1 586 households that received free basic water. Villages were dependant on borehole water. In addition water quality tests were conducted monthly for the entire area through the Midvaal laboratory. The water reticulation backlog in villages was 1.8 km and contractors were on site. 5 600 households had access to sewerage. The wastewater treatment plant was upgraded to the capacity of 4.4ML per day. All villages were dependant on ventilated improved pit latrines. The Ventersdorp municipality was the supplier of electricity in the Ventersdorp town, township and two other villages, Boikhutsong and Boikhutso. Eskom supplied Mogopa, Tsetse, Rentse and Welgevonden. All in all there were 13 4333 households that had access to electricity. Currently there were no households receiving free basic electricity.
There were 30kms of surfaced roads in Tshing and 40km in Ventersdorp. Tshing had a backlog of 18km and Ventersdorp had 8km. There were no surfaced roads in the village. The municipality had a road maintenance plan but there were no funds to implement it. Provision would be made in the next financial year budget.
The municipality was without doubt not financially stable. Operating income could potentially increase if there was proper billing and limited bridging of electricity and water. Credit control measures for non-payment of services would be in place in the 2011/12 financial year such as water restriction and cutting-off of electricity. The findings from the AG's Report were listed. These included: the municipality was currently not a going concern, no internal controls were in place, there was non-compliance with legislation, the asset register was not in place and supply chain management was not fully functional.
The revenue collection rate for 2011/12 was 66.9% down from 68.9% in 2010/11.The total operating income for 2011/12 was R115.3 million up for R105.3 million in 2010/11. The total operating expenditure for the municipality was R114.2 million in 2011/12. The debtors age analysis showed most debts were within the 91-120 days period. The debts amounted to R31.7 million out of a total of R40.5 million. Outstanding creditors as at 30 September were R29.3 million. Major creditors included Eskom, AG, the Department of Water Affairs and DBSA. Due to the negative cash flow the municipality was unable to pay creditors within 30 days.
The municipality had an indigent policy that had been approved by Council. Registration took place annually and the current indigent register on 30 September stood at 1544. There were however outstanding documents on the 1 198 indigents. The register was updated on a daily basis.
The Chairperson noted that Ventersdorp municipality described itself as being financially unstable but there was about R9.1 million in its bank accounts. He asked the municipality to explain its bank account figures and its debt collection action plan which could solve the municipality’s financial problems. He asked about the unauthorized expenditure of R10.4 million and irregular expenditure of R28.2 million and why the last annual report to be tabled in Council was in 2006. He asked Tswaing municipality to explain the irregular expenditure of R20.2 million and fruitless and wasteful expenditure of R1 million and its action plan to address the issues.
Mr Bloem said that he respected a person who was honest. He said that the Committee was supposed to give the Tswaing municipal manager time to address the problems that the municipality faced.
Mr A Lees (Kwa Zulu Natal) asked the Ventersdorp municipality whether there was an error with the figure given for services charged under the operating income, whether the municipality’s bank account had exactly R1.9 million without any cents or if the figure had been rounded off.
Mr Makhubela said that Tswaing municipality was silent on the date of advertisement for its posts, and short-listing, interviewing and appointment. He noted that the Ventersdorp municipality had 81 posts that where vacant. He asked when the municipality compiled the document that had been presented to the Committee and what the municipalities meant when they said that posts would be filled as soon as possible. It seemed as if there was no action plan for what the Ventersdorp municipality was doing.
Mr Chaane said that being a new municipal manager in Tswaing was no excuse for giving a less detailed report. He said that the Ventersdorp manager was also new in the office. Being new in the officer did not warrant leniency. The Committee did not know if Tswaing municipality was on the right track in terms of what they were doing. The Tswaing municipality report was thin when it came to financials. Government owed R24.1 million, the highest figure that he had seen government owing to any municipality. He asked for a breakdown of the figures that the municipality was owed by government, what the municipality was doing to address the challenge, whether any rollover request had been made for the money underspent and what was the situation with regards to the CFO.
Mr Chaane asked the Ventersdorp municipality why the mayor had been suspended. What the situation was with regards to the contractor who was doing debt collection on behalf of the municipality and keeping 80% and giving the municipality 20% and the contractor who was charging the municipality R900 00 for the rental of three computers? The municipality seemed to be overspending on conditional grants. He asked why this was so and what steps were the municipality taking to address the growing debtors book. A breakdown was supposed to have been given on what was owed to creditors such as Eskom. Lastly he asked if the MIG amount of R4.2 million was for 2010/11 and if both municipalities had tabled its presentations before their relevant Councils.
Mr Montsitsi noted that there was a trend especially in the North West province whereby people who were “opened up to the Select Committee on Finance are sacrificed”. There were a few individuals in the municipalities who regarded themselves as untouchable. Such people were responsible for the disappearance of adverse reports on the municipality. They were responsible for hiding any wrongdoing. A vote of no confidence was taken against the mayor of Maquassi Hills local municipality because she was bold. The sooner the Committee zoomed into the municipalities, the better it was for the municipalities. There was an attempt to hide what was happening in the municipalities. He noted that during its oversight visit to the North West Province, there were municipalities that had shredded information.
The Chairperson asked why Tswaing municipality had captured a zero expenditure on construction. He requested that the new municipal managers do their homework and study Chapter 8 of the Municipal Financial Management Act. The sooner they understood the chapter, the better it was for them and the municipality.
Tswaing Municipality Response
Mr More thanked Mr Bloem for his indulgence. It was virtually and humanly impossible for him to have addressed some of the issues during the short period he had been in office. However this was not to be taken as an excuse. He was an acting municipal manager on a temporary basis. He worked three days at the municipality and two days as a legal advisor for the Department of Agriculture for North West. He was doing his best with the limited time he had. He thanked the Committee for the constructive criticism levelled against him. A study was done by a consultant of the money owed to the municipality by the government. The Departments that owned the municipality was Public Works, the North West Development Corporation, and the Departments of Health and Education. There was electricity burning on the property that belonged to the Department. Whoever stayed on the property was not the baby of the municipality but the relevant Department had to be accountable. There was a lackluster approach in the municipality, not to take debtors’ head on. The debts were left for a long time up to the stage where they were. There were MIG funds for which rollover was applied and which was declined. His fear was that if he told the people that the rollover had failed, the municipality would face litigation since the people had legitimate expectations. The Committee should look sympathetically at the case of the municipality. The municipality had so many bank accounts because when money came in, the municipality would use the money for the next available purpose that was urgent or pending. He was of the opinion that it was not correct to use money in such a way.
He had told the mayor that he was prepared to sacrifice his comfort zone in every way in order to assist the municipality even if it meant receiving only half the salary he was entitled to. He was eager to help the municipality. The municipality was willing to go to court with whoever owed the municipality. There was about 30% of consumers in the municipality who had not been captured on the database but they consumed free of charge. There was a need for divine intervention with regards to the irregular expenditure of R20 million. He wished he knew who was responsible for the irregular expenditure and name and shame them but he did not know. It was however no excuse. The municipality was going to investigate the matter. He did not have the audit report that the Committee was referring to.
Mr More said that he still regarded the mayoral committee as politicians as such he did not want political interference in his administration. If he asked the Mayor for documents he would be opening up a can of worms. The politics in the North West Province was well known to everyone. Documents that were requested from politically aligned officials would take time to get. The PMU and communications unit posts were advertised and closed. The last step was to set up a date for an interview. There had been a sitting for short-listing for the post of the corporate services director on 21 November. An interview would be conducted on 29 November. The post of the municipal manager had been advertised and the closing date for applications was 25 November.
Mr K Mogatusi, Mayor: Tswaing Municipality, said that there would be a sitting on 29 November to discuss the issue of the CFO. The condition of the CFO was as a result of Section 139. There were some political problems and interference and there was confusion around the issue of the organogram. The municipal manager was seconded from the Department of Agriculture hence there would be progress. Improvements would be seen in 2012. The presentation document must have gone through to Council. The document was resolved to be a document of the Council.
The Chairperson thanked the Tswaing municipal manager for telling the Committee that he was committed to changing the municipality.
Ventersdorp Municipality Response
Mr Tebogo Daniel Motlashuping, former Mayor, Ventersdorp Municipality, responded that the municipality had appointed a service provider to assist with the debt collection of the municipality. The municipality experienced major losses because about 90% of the electricity meters had been breached and almost 98% of the water meters were old and not functional. A service provider had been appointed to install both water and electricity meters. The company contracted to collect debt was not supposed to collect on the debt collected by the municipality. They were supposed to collect 80% of the municipality’s debts and the municipality would collect 20%. The company would then purchase meters for the entire municipality over a period of five years. Smart meters were supposed to be installed in all households but this was not achieved because there were problems with people who were supposed to install the meters. The Eskom account was so huge because the municipality paid more than what the consumers paid the municipality. An agreement had been reached with Eskom to settle the accounts. However there were challenges in this regard.
He said the reason for the unauthorized expenditure was as a result of the unskilled and untrained personnel in the supply chain department. The three personnel who had been appointed by the municipality did not have the requisite expertise, knowledge and qualifications. In addition no training had been given to three personnel. As such the unauthorized expenditure was as a result of non-compliance in the supply chain management such non-submission of the required three quotations. The municipality had started a process of earnestly filling the essential vacant posts. A number of positions had been advertised. There were some issues that related to the particular contract. The former municipal manager had entered into a contract with a certain computer company for the rental of computers. The company was released from the contract and the company took the municipality to court. The municipality then entered into another agreement with the company on how to pay off its debt to it. The contract with the computer company would not be renewed when it expired. The municipality and Fleet for Africa entered into a contract for the rental of service delivery vehicles. The municipality had sold all of its service delivery vehicles. The maintenance fee of the rented vehicles was too high for the municipality such that it could not pay. Fleet Africa then terminated the contract and removed its service delivery vehicles with the exception of vehicles that had been given to Councillors to use. The municipality had to pay a termination fee. The municipality managed to purchase a number of trucks to use.
Mr Joel Makade, Ventersdorp Acting Municipal Manager, added that a breakdown of the creditors information would be submitted to the Committee in writing. The current CFO was acting CFO and before him there had been another acting CFO. The bulk of the information he had received was from the previous acting CFO. The municipality had improved on the report that was tabled in Potchefstroom hence the Council had some knowledge of the report. Overspending was bad practice and it had stopped as of 8 November. With regards to cash flow the municipality was not in a good financial position because the MIG funds were ring fenced and they could not be used for any other purpose. The municipality was looking to have Section 57 by 1 January 2012. The matter of the suspension of the mayor was sub judice.
Mr Bloem asked why the Committee was not being told why the mayor had been suspended
Mr Chaane said that the questions on rollovers and interest earned had not been responded to. He requested a copy of the agreements that had been signed between the municipality and the various contractors. There was no need to justify the contracts. It was possible for the contracts to be nullified. Some of the challenges the municipality faced were as a result of the contracts they had signed. The Committee had been told that the R900 000 that the municipality was paying per annum was for three computers. The AG said that the computers were useless. He raised concern about the high turnover rate of municipal managers. For the benefit of the new Members of the Mayoral Committee, it should be brutal and tell them the truth. The reality was that the Ventersdorp Municipality was in crisis. There had been no improvements in the municipality for some time. The municipal manager was the third one in 14 months. It was very possible that on the Committee's next oversight visit they would be told that the current municipal manager had been suspended.
The Chairperson asked if the municipal manager of Ventersdorp was aware of the AG's report.
Mr Makade said that he was aware of the report.
The Chairperson said that the municipal manager was supposed to respond in writing by Friday 25 November. He read out the AG's Report on Ventersdorp.
Ms T Memela (KZN) asked for all copies of the contracts that the Ventersdorp Municipality had signed because someone’s signature was going to be on the contracts.
Mr Bloem said that the problems in the municipality was because people were “eating” and then running. The municipality should be called "hit and run".
Mr J Gunda (Northern Cape) commented that the municipalities were supposed to answer the question about how honest they were, as people who were responsible for working with taxpayers’ money. The municipality management was supposed to stop hiding behind political decisions. Municipalities were responsible for ensuring that the taxpayers’ money was used properly. He asked how it was possible that people earned salaries when there was no service delivery. It was a big concern. He pleaded that municipalities should not take the people for granted
Ms Mpho Motladille, Acting Mayor of Ventersdorp, responded that there was a detailed report that dealt with the suspension of the mayor. As the new councillors of Ventersdorp, they faced a number of challenges with the contractors. The challenges that they faced would be submitted in writing.
The Chairperson said that the Committee would be waiting eagerly for the report on the suspended mayor.
Ms Memela asked Mr Motlashuping if he was able to give the Committee a comprehensive report of all the work he had done during his period. The Committee was still asking for information and documents peacefully. However, the Committee had the powers to dig deeper.
Mr Motlashuping responded that he had prepared a report on all the work that he had done. He clarified that the contracts had been entered into before he was appointed as mayor. All information would be submitted to the Committee.
Ms Lorraine van der Grijp, Deputy Business Executive, Auditor General South Africa: North West, noted that it was not true that the annual financial statements for Tswaing municipality had not been submitted because the audit report had been received late. The financial statements were received on 19 April and the audit report was issued on 19 July.
The Chairperson requested that the AG's quarterly reports on the municipalities in the North West province be forwarded to the Committee.
Mr Werner Voigt, Director: National Treasury, said the budget for 2011/12 for Tswaing municipality was not funded. The municipality had budgeted for a collection rate of 100% but they had managed only to collect 60%. The municipality wanted to know if an amendment on the budget would be done in January because they had over committed themselves on an expenditure based on 40%. Secondly, in terms of the closurereport given to National Treasury, the revenue for 2010/11 was R112 million and expenditure was R114 million. The trend of unauthorized expenditure continued with an additional R1.4 million. The municipality was supposed to present a plan of action to reduce unauthorized expenditure. In terms of the Section 71 reports, it was the responsibility of the municipal manager and the CFO to confirm that the reports were credible. However the information was not submitted to the NT. For the first three months, the municipality billed R13.2 million but the operating expenditure was R34.6 million. Hence there was a deficit of R21 million. The collection rate was 60% but the fixed cost component in the municipality was 70%. It was 10% under the collection rate and at the same time the municipality continued to increase its commitment from creditors. A rollover request of R13.3 million had been applied for by the municipality to NT. The municipal manager for Tswaing had to comply with the Division of Revenue Act. As such, the money for rollover would not be transferred. There was a major discrepancy between what Tswaing municipality told the Committee about the amount owed by government being R24.1 million and the amount reported in the section 71 report as being R6 million. New figures were being reported on a regular basis. There was need to decrease expenditure by the municipality.
Mr Voigt said there was a major improvement on the reporting side by Ventersdorp municipality. However it was found that the budget for 2011/12 was not funded. The collection rate for the municipality was 66% and the fixed cost component of the municipality was 63%. Therefore the municipality had 3% to play around with and address issues of service delivery. The municipality’s figures were close to being credible however there was no strategy or plan of action to turnaround the financial position of the municipality.
Mr Lomax Gopane, Acting Chief Director. Department of Finance: North West, said that three municipalities had been assisted through the MEC of Finance to address Eskom debt. Both Ventersdorp and Tswaing had been assisted. Tswaing had stuck to the agreement and they had paid the outstanding debt. He was concerned about Ventersdorp because it had not paid a single cent according to records since the agreement had been signed. Ventersdorp had to be aware that Eskom was about to switch off the lights to the municipality before the agreement was signed.
Ms Tumisang Moeketsane, Department of Finance: North West, added that invoices that the Ventersdorp municipality had been billed by its contractors should be submitted to the Committee. The municipality was advised that they had over committed on contractor services and they were supposed to have done a cost benefit analysis before they entered into any further contracts. Ventersdorp municipality statements were produced and printed in Johannesburg. The last time the North West Department of Finance was there was on 8 November and people had not yet been billed. If people were billed on the 8th of any month they would not pay their bills because very few people had money during this period.
The Chairperson reiterated that the AG was of the opinion that 100% intervention was needed in the North West province. The situation in the province was a serious one. The Committee was going to zoom in on the municipalities in the province on a quarterly basis.
Mr Matrawe said that after the intervention in Potchefstroom, the Department of Energy had a meeting with Ventersdorp municipality to address the backlog on the electricity. The commitment of the district to pay for the upgrading of the infrastructure in Tswaing was a cause for concern. Tswaing had to pay about R1.2 million but they were being charged over R4 million per month in charges. If the district paid the R1.2 million for upgrading, Eskom would reduce the billing to the municipality by over R4 million.
Mr Netshiswinzhe said that there was a programme for water and sanitation that the DBSA was undertaking in the district. They were working with NT and COGTA to implement the programme. The DBSA was providing technical support to municipalities.
The Chairperson urged the municipalities to listen otherwise the Committee would “guide” the municipalities to listen. The Committee had powers that they could use.
Ms Briskey said that Tswaing had an agreement with a water services authority. The Department was busy doing a feasibility study on the bulk water supply that was going to be completed in March 2012. The Department had assisted Tswaing to develop a business plan for the Accelerated Community and Infrastructure Programme that dealt with the refurbishment of the Deylareville wastewater treatment works. The wastewater treatment works was a great concern to the Department because it was polluting the environment. R4 million had been spent on the refurbishment of the wastewater treatment in the Ventersdorp municipality. The Department had also assisted Ventersdorp with the development of a conservation plan on water conservation demand management.
The Chairperson said lessons had been learnt by everyone in the meeting: to listen, to think and to act.
Ms Memela, in closing, pleaded with the municipalities to go back to the drawing board. There was need for commitment, integrity and transparency and, in the process, respect each other.
The meeting was adjourned.