ATC151028: Report of the Select Committee on Cooperative Governance and Traditional Affairs on Loco Inspection on Notice of Extension of the Intervention issued in terms of section 139(1)(B) of the Constitution (1996) in Imbabazane Local Municipality, dated 27 October 2015
NCOP Cooperative Governance & Traditional Affairs, Water and Sanitation and Human Settlements
REPORT OF THE SELECT COMMITTEE ON COOPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS ON LOCO INSPECTION ON NOTICE OF EXTENSION OF THE INTERVENTION ISSUED IN TERMS OF SECTION 139(1)(b) OF THE CONSTITUTION (1996) IN IMBABAZANE LOCAL MUNICIPALITY, DATED 27 OCTOBER 2015
- Background
1.1 On the 16 September 2015, the MEC for Cooperative Governance and Traditional Affairs in KwaZulu-Natal tabled to the Office of the Chairperson of the National Council of Provinces (NCOP) a notice of the extension of intervention in terms of section 139(1)(b) of the Constitution at Imbabazane Local Municipality.
1.2 After the tabling, the Chairperson of the NCOP referred the notice of intervention in terms of Rule 101 to the Select Committee on Cooperative Governance and Traditional Affairs for consideration and report. On the 21 October 2015, the Select Committee conducted loco inspection on the notice of intervention in terms of section 139(1)(b) of the Constitution in Imbabazane Local Municipality.
- Objectives of the Inspection in Loco
2.1 The objective of conducting the loco inspection was to consult and interact with the internal and external stakeholders of the Municipality, in order to solicit their opinion with regard to the progress made in implementing the constitutional, procedural and substantive matters related to the of intervention in the Municipality in terms of section 139(1)(b) of the Constitution.
- Composition of Delegation
3.1 The delegation of the Select Committee was composed of the following Members of Parliament and Officials: Hon J Mohapi, Free State (ANC), Hon L Nzimande, KwaZulu-Natal (ANC); Hon S Thobejane, Limpopo (ANC), Hon D Ximbi, Western Cape (ANC); Hon R Manopole, Northern Cape (ANC), Hon M Chetty, KwaZulu-Natal (DA); Hon T Mokwele, North West (EFF); Mr T Manele (Committee Secretary); Mr N Mfuku (Content Advisor); Mr B Mahlangeni (Committee Researcher); Mr N Mangweni (Committee Assistant) and Mr T Gubula (Parliamentary Media and Communication Officer).
- General Overview of Loco Inspection at Imbabazane Local Municipality
4.1 On 20 October 2015, the delegation of the Select Committee on Cooperative Governance and Traditional Affairs had interaction and consultative meeting with the internal and external stakeholders of the Municipality. Interaction with the different stakeholders included the Department of Cooperative Governance and Traditional Affairs, the Mayor, Speaker, Chief Whip, the Administrator and representatives of the South African Local Government Association, Organised Labour and Ward Committee Members.
- Briefing by the Department of Cooperative Governance and Traditional Affairs
- The Provincial Department briefed the delegation on the notice of extension of intervention in terms of section 139(1)(b) of the Constitution. The presentation focused on the background, reasons for the extension of intervention, progress, back to basics and transitional matters for merging municipalities.
- Background on the Intervention
6.1 The Imbabazane Local Municipality has been under intervention in terms of section 139(1)(b) of Constitution since January 2013. The intervention has been extended on several occasions due to poor progress, and in some cases, due to emerging challenges. The Provincial Executive Council resolved on 16 September 2015 to extend the intervention to 31 March 2016. Notwithstanding the progress made during the intervention, there were emerging challenges at the Municipality which necessitated that the intervention be sustained further to mitigate the risk of the Municipality sliding back to pre-intervention chaos.
- Reasons for Extension of Intervention
7.1 One of the outstanding challenges relates to the recruitment and appointment of a General Manager: Technical & Infrastructure Development. At the beginning of 2015, the Municipality had identified a candidate for the position, however, the MEC did not concur with the candidate preferred by the municipal council. The selected incumbent lacked relevant qualifications. The municipality lodged an application for a waiver with the office of the national Minister in terms of the Regulations on the Appointment of Senior Managers (2014), however, before this was resolved the person, who was an internal candidate, resigned to join another municipality.
7.2 At the CMC meeting held in April 2015, the KwaZulu-Natal CoGTA had proposed a joint appointment with Umtshezi in the build up to the amalgamation of the two municipalities. However this view has not found favour between the representatives of the two municipalities. The Municipality is currently dependent on consultants to render technical services support. This is untenable because there are limits to what consultants can do, especially in cases where accountability is required by the municipal council for oversight purposes.
7.3 The Municipal Council initiated an investigation into allegations of misconduct by the Municipal Manager, and the General Manager: Corporate Services. It was alleged that both officials irregularly increased the salaries of various staff members by R2000 each per month. The salary increments were effected in February 2015 and backdated to July 2014.
7.4 In the case of the General Manager: Corporate Services, it was alleged further that he had fraudulently increased his total annual salary package from R516 000.00 to R 764 048.04 within 3 months of his appointment. As a result of these allegations, the Municipality placed the Municipal Manager and the General Manager: Corporate Support Services on precautionary suspension, pending finalisation of investigation and or possible disciplinary enquiry. In line with Regulation 5 sub-regulation (3) read with sub-regulation (4) of the Disciplinary Regulations for Local Government Senior Managers.
7.5 In its assessment of the 2015/16 budget, the Provincial Treasury raised concerns that the Municipality allocated the entire grant of R18 million on new electrification projects to be started in 2015/16. This meant that the Municipality would not honour its commitment to off-set R15 million it had borrowed from its reserves the previous financial year, as a form of frontloading intended to fast-track the implementation of electrification projects. This would not be in keeping with the Change Management Committee rules, where by expenditure from reserves should be agreed to by the two merging municipalities (namely, Imbabazane and Umtshezi).
7.6 Imbabazane and Umtshezi will be merging after the election in 2016. The political and technical Change Management Committees (CMCs) are in place. The functionality of the technical CMC is however hindered by the fact that both Umtshezi and Imbabazane have no Municipal Managers who must champion the technical CMC. The Imbabazane Municipal Manager is on suspension, while the Umtshezi Municipal Manager resigned to take up a position elsewhere. The political CMC on the one hand is hampered by hostility between the politicians from both municipalities. Imbabazane, in particular, departs from the point of view that their municipality is going to be swallowed up by Umtshezi Municipality. Explanations and clarity provided by Provincial CoGTA had not mitigated against this negative perception towards the process. Their (Imbabazane) position was entrenched and should be managed carefully.
7.7 Recent political disputes within the National Freedom Party (NFP) are reminiscent of the developments that contributed to the disruptions leading up to the section 139 intervention in 2013. The Acting Municipal Manager received correspondence from the NFP purporting to remove two councillors from Imbabazane. However the correspondence did not meet the requirements of section 27 of the Local Government: Municipal Structures Act, 117 of 1998. Thus the Ministerial Representative had advised the Acting Municipal Manager not to declare vacancies without the conditions outlined in section 27 of the Act having been met. The Acting Municipal Manager has since obtained a legal opinion which he was still considering at the time of this report
- Emerging Challenges on the Intervention
8.1 Upon assuming duties at Imbabazane on 03 August 2015, the Ministerial Representative conducted an assessment of the Municipality and identified a number of challenges related to good governance and public participation; financial management and viability; institutional development and transformation; service delivery; local economic development and operation clean audit.
8.2 The good governance and public participation challenges included the non-functional Audit and Performance Committee and section 80 committee; defective reporting mechanisms and report content to EXCO and by EXCO to Council; dysfunctional Ward Committees; poorly defined roles and responsibilities and delegations; absence of communication strategy, Citizens Charter and Customer Satisfaction Survey mechanisms.
8.3 The financial management viability challenges faced by the Municipality included the weaknesses in supply chain management; poor financial management; weaknesses in internal control environment and poor credit control and debt management.
8.4 The basic service delivery challenges included the vacant positions of Director: Technical Services; poor project management; general unsatisfactory level of provision of basic services. Lastly, the operation clean audit challenges faced by the Municipality included audit queries on pre- determined objectives; system of internal control and IT Policy.
- Progress on Extension of Intervention in terms of section 139(1)(b) of the Constitution
9.1 The Municipality has improved on the functionality and attendance of meetings of the CMC.
Compliance with the Code of Conduct for Councillors and Standing Rules and Orders of Council has improved. Reports on absenteeism of members of committees are compiled and are to be submitted to Council.
9.2 Implementation of Council Resolution Register is compiled and will be tabled at the next ordinary council meeting on 12 November 2015, and at every ordinary council meetings.The top management committee meetings have been resuscitated and meetings were held on 26 August 2015, 17 September 2015, 29 September 2015 and 13 October 2015. A Finance staff is being trained on the compilation of VAT returns and VAT returns will be compiled internally.
9.3 Section 71 Reports for September 2015 have been submitted to the Mayor and Provincial Treasury by no later than 10th working day after the end of October 2015. All payments are ratified by the Ministerial Representative, after they have been released and the antifraud and corruption strategy is being strengthened and cascaded to all the staff and due to be work shopped with communities.
9.4 The waste collection is done in all the wards through job creation initiatives of Food for Waste Program (100), Youth Internships in Waste Jobs (15), CWP (400) and EPWP (160).The municipality has requested Eskom to fast-track the delivery of 860 meter boxes to facilitate electrification of Rosedale, Gourton Bridge and Italy. As in terms of the designs these are the only areas that could be electrified with R17.5 million. The Chairpersons of the Ward Committees has been encouraged to participate meaningfully and the minutes of the Ward Committee meetings are timeously submitted to the Department of Cooperative Governance and Traditional Affairs.
- Support Provided to Change Management Committee (CMC) of the Municipalities
10.1 The Departments has appointed service providers to assist CMC of the municipalities with the drafting of organograms and the process is almost finalized. The MPRA Unit is assisting with the rationalization of the valuation roll for the merging municipalities; assisting with the rationalization of municipal by-laws; assisting with the Budget and IDP processes for merging municipalities and drafting of job descriptions.
10.2 The Department is assisting with Business Plans to access the Restructuring Grant. An amount of R 8, 1 million per CMC has been applied from National Treasury to complete the restructuring process at CMC level. A further amount R50 million was applied from National Treasury to fund pay parity within the new merged municipalities. The Department is assisting with the migration of IT Financial Systems. The Department is assisting with general enquiries from participating municipalities with regard to the restructuring process and the procedures that need to be implemented. The Department provided Gantt Charts to the CMC municipalities for the restructuring process to be implemented and monitored.
11. Opinion of African National Congress
11.1 The African National Congress welcomed the extension of intervention as issued in terms of section 139(1)(b) of the Constitution. It acknowledged the progress that has been made to improve service delivery, particular MIG projects.
12. Opinion of National Freedom Party
12.1 The National Freedom Party were not decisive whether they supported or not the extension request of the extension, since there were administrative challenges caused as a result of the intervention.
13. Opinion of South African Local Government Association
13.1 Since substantially progress has been made, the South African Local Government Association welcomed the request to extend the intervention in the Imbabazane Local Municipality.
14. Opinion of Ward Committee Members
14.1 The Ward Committee Members welcomed the request of the extension of intervention in Imbabazane Local Municipality.
15. Opinion of Organized Labour
15.1 The South African Municipal Workers Union (SAMWU) remarked that there is a need to fill all senior vacant positions in the Municipality. While Independent and Allied Trade Union (IMATU) welcomed the intervention issued in terms of section 139(1)(b) of the Constitution.
16. Select Committee Observations
16.1 The delegation has observed that in order to assist the Change Management Committee of the municipalities during the period of merger, the Department of Cooperative Governance and Traditional Affairs will assist with Business Plans to access the Restructuring Grant.
16.2 An amount of R8.1 million per CMC has been applied from National Treasury to complete the restructuring process at CMC level. A further amount R50 million was applied from National Treasury to fund pay parity within the new merged municipalities.
16.3 The Department has also committed to assist with the migration of IT Financial Systems; general enquiries from participating municipalities with regard to the restructuring process and the procedures that need to be implemented.
16.4 The Department provided Gantt Charts to the CMC municipalities for the restructuring process to be implemented and monitored.
16.5 The Departments has appointed service providers to assist the CMC with the drafting of organograms and the process is almost finalized. The MPRA Unit is assisting with the rationalization of the valuation roll for the merging municipalities.
16.6 The Department has also made executive undertaking to assist with the rationalization of municipal by-laws; preparation of Budget and IDP processes for merging municipalities as well as drafting of job descriptions.
17. Recommendations
17.1 The Select Committee recommends to the NCOP as follows:
17.1.1 The NCOP approves the extension of intervention in Imbabazane Local Municipality in terms of section 139(1)(b) of the Constitution.
17.1.2 The Department of Cooperative Governance and Traditional Affairs table quarterly reports on the support provided to Change Management Committee of the municipalities during the period of the merger
- The KwaZulu-Natal MEC for Cooperative Governance and Traditional Affairs should table quarterly progress reports to the NCOP and the Provincial Legislature on the status of the extension of intervention in the Municipality, including the termination of the intervention report.
17.1.4. Based on the engagement with some members of Ward 6 who complained about lack of access to sanitation; water, electricity and housing, the delegation of committee recommended that a meeting composed of the Mayor, the District, South African Local Government Association and the Provincial Department of Cooperative Government and Traditional Affairs should be coordinated within 14 to provide solution to service delivery challenges experienced by some members of Ward 6
Report to be considered.
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