ATC100519: Report on Oversight Visit to Masilonyana Local Municipality

NCOP Economic and Business Development

REPORT OF THE SELECT COMMITTEE ON CO-OPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS OVERSIGHT VISIT TO MASILONYANA LOCAL MUNICIPALITY – DATED 19 MAY 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 the 24th November 2009,  to consider and report on the intervention notice invoked in terms of section 139 (1)(b) of the Constitution at Masilonyana Local  Municipality by the Free State Provincial Executive Council, reports as follows:

 

1.2        In terms of section 139(1)(b) of the Constitution, 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 the responsibility for the relevant obligation in that municipality. 

 

1.3        In terms of the NCOP Rule 101, the Office of the Chairperson of the NCOP referred the notice of intervention in the affairs of Masilonyana Local Municipality to the Select Committee on Co-operative Governance and Traditional Affairs for consideration and reporting. On 5 May 2010, the Select Committee took a decision during the proceedings of its meeting to conduct an oversight visits to the above-mentioned Municipality on 14 May 2010.

 

2.         Purpose and Objectives

2.1        The objectives of the oversight visit was to determine whether procedural requirements have been met and to verify whether the PEC has used its discretion appropriately before the Committee can 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 being to ensure  intergovernmental checks and balances aimed at guarding the integrity and efficiency of the intervention process.

 

3.         Composition of the 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 TMH Mofokeng, Free State (ANC); Hon DV Bloem, Free State (COPE); Mr TM Manele, Committee Secretary (Committee Section) and Mr V Mfuniselwa, Administration Assistant (Committee Section).  

4.         Introduction

 

4.1        On 24 November 2009, the MEC for Co-operative Governance and Traditional Affairs tabled a notice of intervention in Masolonyane Local Municipality to the Office of the Chairperson of the NCOP. Subsequent to the tabling, a notice of intervention was referred to the Select Committee on Co-operative Governance and Traditional Affairs for consideration and reporting in terms of Council Rule 101. In compliance with the Council referral, the Select Committee resolved to undertake a fact-finding visit to the Municipality on 14 May 2010. 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, in this case before the end of 24 May 2010, since the intervention began.    

 

5.         Problems Identified by the PEC at the Municipality

5.1        The main issues identified by the PEC to intervene in the affairs of Masilonyana Local Municipality related to the inability of the Municipality to collect revenue, implementation of valuation roll, finalization of annual budget, failure to develop and adopt performance management framework, and the inability to provide quarterly reports in compliance with Municipal Finance Management Act (MFMA).   

 

6.         Oversight Visit to Masilonyana Local Municipality

 

6.1        On 14 May 2010 the delegation of the Committee had interactive and robust engagements with the internal and external stakeholders of the Masilonyana Local Municipality. The main internal stakeholders the delegation interacted with in the Municipality included the Speaker, Mayor, Ward Committee Members, Municipal Councillors, Administrator and the South African Local Government Association (SALGA). The main external stakeholders the delegation interacted with included members of the community and business forums, and non-governmental organizations.

 

6.2        For the purpose of this report, the submissions made by both internal and external stakeholders are structured based on the five key performance areas of the local government 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

 

6.3        Municipal Council: The submissions made by the Mayor and the Speaker indicated that the Council supported the placing of the Municipality under section 139 (1)(b) of the Constitution and the appointment of the Administrator in dealing with the executive functions of the Municipality. The major progress reported by the Mayor related to stakeholders’ consultation and participation in the development of a draft Integrated Development Plans (IDP), budget and the municipal turn-around strategy.          

 

6.4        Administrator: The major problems reported by the Administrator pertained to non-compliance with the Local Government: Municipal System Act in submitting section 46 reports for two consecutive years, failure to develop and adopt performance management framework to regulate the performance of staff, and the inability to provide quarterly reports in compliance with the MFMA.  The progress reported by the Administrator related to submission of section 46 reports to the Auditor-General; development of a performance management system framework; and monthly submission of section 71 and verification reports.

 

6.5        Municipal Councillors: The concerns raised by some of the Municipal Councillors related to the lack of progress in charging senior management alleged to be involved in corruption and fraud, suspended officials organizing and leading protest marches, Municipal Manager manipulating some officials and Municipal Councillors, and the appointment of unskilled employees.    

 

6.6        Organized Labour: The critical concerns highlighted by the representatives of South African Municipal Workers Union (SAMWU) related to lack of managerial consultation, non-functionality of local labour forum, lack of organisational structure and the lack of progress with regard to the application of section 139 (1) (b) of the Constitution.              

           

(B).       Basic Service Delivery

 

 6.7       Administrator: The major concerns reported by the Administrator pertained to the inability to spend infrastructure grant funds where expenditure was at 12% by the end of November 2009. The main progress reported by the Administrator related to the submission of the revised MIG Action Plan to the Provincial MIG Office, verification certification of MIG project payments, establishment of project steering committees, as well as the registration of projects as extended public works programmes.            

 

6.8        Community and Business Organization: The concerns raised by the community and business members related to the non-payment of contractors, housing allocation, and the lack of municipal resources to provide services in the community.  

 

(C).       Local Economic Development (LED)

 

6.9        Administrator: The main progress reported by the Administrator included the development of an LED strategy and the revival of projects in brick-making plant, in partnership with the mining house, and two bakery projects.   

 

6.10      Community Based Organisation: Some of the major LED concerns raised by the representatives of community-based organisations related to lack of funding for youth development programmes; lack of funding for community-based youth projects, including the co-ordination of leanership programmes; lack of intergovernmental approach, more especially with regard to the placement of community members who had participated in learnership programmes.

 

(D).       Municipal Financial Viability and Management

 

6.11      Administrator: The main concerns raised by the administrator related to the overall financial management of the municipality, which was in disarray.   The progress reported included the reconciliation of bank statements, deployment of DBSA financial experts, decrease in salary bills from R2, 16 million to R1, 89 million in April 2009, reduction of overtime of R120 000 paid in December 2009 to R72 000 in March 2010, submission of section 71 reports to Provincial and National Treasury, as well as the submission of a draft budget aligned with IDP.   

 

(E).       Good Governance and Public Participation

     

6.12      Administrator: The concerns raised by the Administrator’s report related to the non-functionality of Ward Committees, poor effectiveness of community development workers, as well as the non-alignment of budget with the IDP. However, the main progress reported by the Administrator included the functionality of Ward Committees and effective consultation on IDP and the Budget.  

 

6.13      Ward Committees: Members of the Ward Committees raised concerns related to lack of consultation, lack of progress since the application of section 139 (1)(b), and problems of service delivery.    

 

7.         Committee Observations and Opinion

 

7.1        The delegation of the Committee has observed that the Municipality has failed to perform its legislative and executive obligation and, in the opinion of the Committee, justified the invocation of section 139 (1) (b) intervention of the Constitution by the PEC of the Free State Province.

 

7.2        The request by the Municipal Council for intervention in terms of section 137 of the MFMA has reflected the inability of the Municipality to prudently manage its finances.  

 

7.3        The Provincial Executive of SALGA had played a critical role in assisting the Municipality to request for intervention in terms of Section 137 of the MFMA and Section 139 (1)(b) of the Constitution.  

 

7.4        The decision of the PEC to invoke section 139 (1)(b) of the Constitution and the appointment of the Administrator had resulted in the development of a turn-around plan aimed at assisting the Municipality to deal with challenges and stakeholders’ concerns related to the IDP, budget formulation, organisational development, financial management, good governance, public participation, LED, and service delivery.

7.5        The Select Committee on Co-operative Governance and Traditional Affairs in co-operation with the relevant Portfolio Committee in Free State Provincial Legislature would conduct a follow-up visit to the Municipality, three months after the intervention has ended, in order to monitor progress made in respect of the intervention in the Municipality.    

 

8.         Acknowledgement

 

8.1        Having conducted the oversight visit the Committee delegation wishes to extend words of appreciation extended to all the internal and external stakeholders of the Municipality who interacted and had robust engagements with the delegation of the Committee on matters related to the placement of the Municipality under section 139 (1)(b) of the Constitution and the appointment of the Administrator.

 

9.         Recommendations

 

9.1        Having conducted the oversight visit to Masilonyana Local Municipality and interacted with internal and external stakeholders, the Select Committee on Co-operative Governance and Traditional Affairs recommends as follows:   

 

9.1.1     The National Council of Provinces approves the intervention as issued by the Provincial Executive Council in terms of section 139 (1)(b) of the Constitution.

 

9.1.2     The Administrator should fast-track the process of reviewing and developing a database of qualifications of all section 57 managers and table a report to the Provincial Executive Council.

 

9.1.3     The Administrator should ensure proper functionality of Local Labour Forum and the co-ordination of consultative meetings among the offices of the Mayor, the Speaker and the Chief Whip.

 

9.1.4     The Provincial Executive should provide quarterly reports to the NCOP on the progress made in respect of service delivery, financial viability and management, transformation and organisational development, LED, and good governance and public participation.

           

9.1.5     The Administrator should fast-track the process of ensuring that all section 57 senior managers complete the signing of their performance contracts, and further ensure that those contracts are aligned with the key performance areas of the Municipality.

 

9.1.6     The South African Local Government Association, in co-operation with the Local Government Sector Education and Training Authority, should facilitate training and capacity building for Municipal Councillors and Officials in order to further deepen their understanding of the legal framework and policies that govern the activities of the Municipality.

  

9.1.7          The South African Municipal Workers Union should work co-operatively with the Administrator in order to strengthen personnel discipline aimed at promoting municipal integrity.

 

9.1.8          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 Masilonyana Local Municipality as a matter of urgency, and a report should be forwarded to the NCOP in this regard.

 

Report to be considered.