Update on state of Dr JS Moroka & Lekwa Local Municipalities

Meeting report

The Chairperson apologised for the late start to the meeting as the National Assembly had just adjourned and she was waiting for Members to join the meeting. She welcomed everyone to the meeting and extended an apology on behalf of Minister Nkosazana Dlamini-Zuma,. She briefed Mr Mandla Msibi, Member of the Executive Council (MEC) of COGTA: Mpumalanga, on what had occurred in the meeting earlier that morning, accepted his apology and hoped that his son was better now. The MEC and his delegation were welcomed, and it was appreciated that he always availed himself whenever meetings of the current nature were called. She explained that the Committee would resume where it had left off with the Govan Mbeki Local Municipality that morning and would then proceed to consider the progress reports on the state of Dr JS Moroka and Lekwa Local municipalities following the Committee’s interaction with the two municipalities on 4 September 2020.

To provide a recap on what had been encountered on 4 September 2020, at the time of the Committee’s interaction with Dr JS Moroka, the Municipality had undergone constitutional intervention in terms of s139(1)(b). The intervention lasted for six months between January and July 2020. The Committee met with the Municipality post the intervention period and it still showed no improvement. Subsequent to that meeting, Parliament received a close out report of that intervention. The report made for a disturbing reading as it catalogued a long list of critical matters which remained outstanding following the termination of the intervention. To name a few, these matters related to the: non-verification of s71 publication, quality production of annual financial statements, filling of critical posts, in-house capacity development, development of a revenue collection strategy, implementation of a procurement plan, establishment of a policy review committee, asset register and verification, timeous reporting to treasuries, and vetting of Budget and Treasury Office (BTO) officials. If these important issues remained unresolved, it was difficult to be convinced that the intervention was a success and the Committee thus wanted to challenge the MEC in this respect.

In the case of the Lekwa Municipality, the concern was around the slow pace and impact of the constitutional interventions into the Municipality. The state of the Municipality seemed to be getting worse, with disclaimed annual financial statements and no functioning of the MPAC to investigate the  unauthorised, irregular, fruitless, and wasteful expenditure taboo in respect of the 2018/2019 financial year. The Committee therefore then consequently instructed the leadership of the two municipalities to go back and address the issues that were raised and come back and report to it. On the present day the Committee was following up on the commitments of the meeting on 4 September 2020. It was appealed that the presenters should refrain from repeating the information, as the information had been presented previously. The Committee wanted to know what had happened since their interaction on 4 September 2020. When the Committee had adjourned earlier that afternoon, there were those Members who had still wanted to make follow-ups. She allowed the Members to continue.

Discussion: Govan Mbeki Municipality

Mr K Ceza (EFF) referred to the matter of SCM and asked that the Committee be furnished with the details of how many meetings were held by MPAC together with the SCM, as well as their attendance registers. If the Mayor had this at his disposal, could this be sent to the Committee Secretary? What measures had been taken by the Acting Municipal Manager in ensuring that the resolutions of the council were monitored and reported? What system was used in the within the Municipality currently? Could the current tracking system for the monitoring of the council resolution still be used? If so, what were the relevant details? If not, what is the standard operating procedure that has been established for tracking council resolutions?

Mr G Brink (DA) was not sure if the Committee had moved on from his question following the Govan Mbeki meeting that afternoon and apologised in advance. Could the Municipality confirm whether any of the Municipal employees owed outstanding property rates and service charges to the Municipality? How many officials owed such outstanding debt? What is the amount of such debt and could there be an indication of the age of such debt? The purpose of his question was to determine, in the context of a Municipality that struggled to get consumers to pay for services, whether officials were paying their dues. He did not want to respond to everything that the Minister had said, save to respond to her comments on the non-intervention in terms of s139(7) of the Constitution by national government directly in the dysfunctional Govan Mbeki Municipality. There was a provision that he quoted in the Constitution that gave national government the responsibility and power to act in the place of the province when it did not intervene in a dysfunctional municipality. To simply say that government did not want to invoke it because there was no interventions bill that had been passed, did not cut it. it seemed that, pre-emptively, national government just refused to act because it anticipated that the province would object to it even without, in this instance, province objecting. In fact, the province had sat on its hands in intervening in Govan Mbeki as is evident from what had been said earlier that morning.

Ms E Spies (DA) mentioned that report 106 had been mentioned in a few instances in the case of Govan Mbeki. Has this report been implemented? If not, what is the delay?

The Chairperson said that the MEC would take Ms Spies through her question, which he was allowed to do while bearing in mind that Ms Spies had just joined the Committee.

Mr Nhlakanipho Zuma, Executive Mayor: Govan Mbeki, noted the issue on the SCM visiting  MPAC. This was an earlier issue that had been raised and it could be confirmed that the Municipality could be in a position to avail the minutes that Mr Ceza was requesting. If the municipality could be furnished with the details of the Secretariat of the Committee, it would then be able to send through the minutes. In terms of the implementation of council resolutions, council received updates from the Municipal Manager on a quarterly basis in terms of the implementation of council resolutions. An update had just been received for the second quarter, which was approved by council in the previous council sitting. Council was thus able to monitor whether the resolutions were being implemented by the administration or not.

With regards to the issue of employees owing the municipality, Mr Zuma confirmed that there were employees who owed the municipality money. He explained that the Municipal Manager had been instructed to start activating systems that were in place, to ensure that all employees were paying the Municipality. Those found owing exorbitant amounts would be put through a programme of an arrangement, where the Municipality would make a deduction on a monthly basis so as to enable the recovery of all the arrears from that specific employee. With regards to the question on implementation, he felt that it was the relevant sphere to respond because it was not the Department that was supposed to deal with the implementation of s106 of the Constitution but the Municipal council itself. In the earlier session he had given a briefing, saying that the Municipal council was indeed implementing the recommendations of s106. A number of officials were indicated through the report as to have been charged and were currently attending disciplinary processes with regards to s106.

It was also indicated that there were certain companies that had taken the process to court for review. The review process was currently pending. It was set for 11 December 2020, after which the court resolved to hear matter. The Municipality was still awaiting the date that the court was going to give to hear the matter on review for those specific companies doing business with the Municipality. With regards to administrative processes where loopholes were picked up by the investigation through s106, the municipal council had indicated that it was currently busy with a skills audit and was awaiting the Adjustment Budget. This was so that it could filter in a budget to do an assessment of all of the qualifications, which was a vetting process that should be done externally so that it could be able to understand what all employees of Govan Mbeki Municipality possess as a qualification. This would allow the Municipality to provide a clear indication of its status.

Ms Spies said it was clear that, in terms of the officials, the s106 report was implemented. However, there were also political office bearers implicated in the report such as the former Executive Mayor. Was it correct that the former Executive Mayor was now a Member of the Mayoral Committee (MMC) for Planning and Development?

Mayor Zuma said that the Constitution of the Republic of South Africa was very clear on the matter in that you are innocent until proven guilty. The Municipality could therefore not infringe on the rights of an individual member who has not been proven guilty. There were allegations and processes that were currently unfolding. A member had been submitted with a letter to clarify herself and responses had been given to the speaker. Part of the issues that were subject to review by the businesses involved members which were in the political office.

MEC Msibi apologised for having to leave the earlier meeting. He had logged in that morning and was part of the meeting, following which the school called him as he had an asthmatic grade 11 child who had collapsed. A doctor was sent to attend to his child, who had said that he was required urgently. Currently, his child was still at the hospital and was recovering well. He added that he respected Committees of the state and could not have gone without apologising.

The Chairperson pointed out that MEC Msibi had raised his apology that morning and it had been accepted as it was an unavoidable emergency. She was glad that he was back and the level of his commitment showed because the condition of his child was not known. She was even shocked to hear that he was back whilst his child was still in the hospital. The Committee appreciated that he was always available.

MEC Msibi reported that in terms of the s106 report, an action plan had been received from the Municipalities on how they were going to implement. These municipalities were submitting reports to the Executive Council every month. The last month for the Executive Council to do an assessment was the end of March as it had to be three months so as to satisfy themselves, Cabinet, the Committee, and the Minister. What was happening now was that the municipalities were doing what they were supposed to have done in terms of the law, such as writing to whosoever is implicated. When the municipalities had done their part, in three months’ time they would provide a comprehensive report. The Executive Council would then come in and say that it not happy about certain things or that certain issues should have been referred to the Hawks, it has not been reported, and that it will be referring it to the Hawks themselves. For now, it was the municipalities’ time and turn to process the action plan that they it had submitted to the Executive Council up until such time as the end of March arrives, which would be when the Executive Council will come back, consolidate, and give a report to the Committee, the Minister and Cabinet.

The Chairperson said that the Committee would continue to interact but had made it their business that after every quarter ,whoever appeared before the Committee would have to do a follow-up progress report as had been seen. The Committee had met with the other two municipalities in September and they were back. She proceeded onto the next report.

 

Mayor Zuma asked if the officials from Govan Mbeki Local Municipality needed to remain.

The Chairperson asked if Govan Mbeki was not part of the administration. She advised that if she were an official from Govan Mbeki she would stay because they had their own problems but that out of the exercise, when they were called back, they would be better persons. However, it was up to the officials themselves.

Mayor Zuma confirmed that Govan Mbeki Local Municipality would remain.

Discussion Dr JS Moroka Municipality

MEC Msibi explained that an overview would be provided, followed by a detailed account on matters. Previously when the Committee had met, and as was correctly put, Dr JS Moroka was a Municipality which was still engulfed by problems. Currently, the major problem of Dr JS Moroka Municipality was the issue of water. There was a dam that had been supplying water to Dr JS Moroka Municipality for many years, called the Mkhombo Dam. The Mkhomba Dam had run dry and if rain came, the mud in the dam absorbed all of the water. The challenge that was being faced was the budget, which was a matter that has since been elevated to the Minister and Minister of Human Settlements, Water and Sanitation to quickly intervene because it was a long matter. There was thus a situation whereby the people of Dr JS Moroka Municipality were still receiving water through water tankers because of the particular problem, which was something that was a bit inhumane.

Over and above that, Dr JS Moroka Municipality faced a similar problem that was faced by Govan Mbeki Municipality. Govan Mbeki Municipality was busy with the action plan and letters had been written to the alleged people founded by the report and at the end of March it would again submit a consolidatory report so that a determination could be made as a province regarding whether it had done it right or wrong. Whilst with Dr JS Moroka Municipality in the report there were glaringly painful things. For example, around 2016 there was a drought in the Municipality, and the national government provided R18 million as a drought relief fund in the Municipality. Instead of the budget being utilised to address such a challenge it was found that a councillor, particularly a member of the Mayoral Committee, was found wanted. As found in the report, the investigators pointed to the Municipality as the member had installed a borehole in his own house. During the investigation process, as all individuals were to be investigated, that member had lied to the investigation team in saying that he had no borehole at his house. The member had then gotten a truck full of sand and covered the borehole but the investigation team was able to unearth it. Today, when speaking with the Executive Mayor, it was said that it was fine, even if it had an action plan that comes to an end at the end of March, there were immediate things. The view was that the borehole had been found and the money for the institution was utilised by an individual who was elected to represent the wishes and aspirations of the people. It was said to council that, on this particular matter, it had to act now.

The other issue facing the Municipality was the issue of the assessment of finances. It was to be remembered that as at 2018/2019 and 2019/2020 the Municipality had not yet audited their books because there were a lot of fights during that time when they had been called to Parliament and the then municipal manager had been dismissed. The Auditor-General had thus not been able to perform its task because of the violence. It was only now that the Auditor-General has come in .A further critical matter that was part of the finding was that there were 45 employees who were employed outside of the organogram. One of the charges that the municipal manager was charged with was that he had implemented an organogram that had not been adopted by council and subsequently submitted to the Department, which was proven to be right. He commended the Municipality because it had since written letters, assigned the matter to a court, and the court had written letters in December 2020 to all 45 employees who were wrongly employed. The due date was 15 February, which was the previous day, for the employees to respond to the court as to why they should not be dismissed. In terms of implementing the findings, this was being done but concern has been raised that it seemed as though where politicians had been identified they were moving slowly and where officials were identified they were moving faster. It was thus said that should March come without any action, the Department would then be able to do so. This was because the report pointed out that some matters should be referred to the Hawks. Earlier that day it was said that this was an immediate matter which had to be reported because if the matter is not reported, in March, the person responsible to report would have created a serious indictment for himself or herself if they did not do so.

Quite certainly, the Municipality was still engulfed in terms of its Municipal Infrastructure Grant (MIG) and it was still not performing to its par, which would be found in the report. The term of office of the administrator had come to an end. A further problem was that the municipal manager had been dismissed and the Municipality still did not have a municipal manager. Due to the VBS Mutual Bank saga, the matter of the Chief Financial Officer (CFO) was in court and it was concluded late the previous year. The Municipality thus did not have a municipal manager or CFO. The province thus seconded the CFO from the fifth Office to the Municipality in terms of s154(3) and s155 schedule 6 and were paying the CFO to assist the Municipality. On the issue of the municipal manager there was the view that the Municipality should recruit one by March at least. In the process, in a letter written during December an extension of the administrator was requested so that by the end of March, when a municipal manager was to be appointed, the gap would have been closed. He said that he had since seen an advertisement for the post of municipal manager. What had also happened was that there was a new Mayor in Dr JS Mokoka Municipality, as the councillor who was a Speaker had become Mayor because the Mayor had resigned. The allegations against the Executive Mayor were the misuse and abuse of the fleet petrol card of the Municipality. The Mayor was to attend on 8 January 2021. At times, the Executive Mayor would pour petrol twice a day, which was an allegation that was found to be true. Again the Municipality was told that it had to act because, in terms of the money that had been spent on petrol, the recommendations by the investigation team were that they had to subject the councillor to the councillor code of conduct. What then happened was that the Executive Mayor resigned and there was new leadership. The Speaker became the new Mayor, the councillor became the Speaker but no changes were made to the Chief Whip.

The Chairperson asked where the Mayor that resigned was now.

MEC Msibi said that the former Mayor had resigned and was now at home.

The Chairperson remarked that that was good.

MEC Msibi said that he wanted to provide an overall synopsis of the situation and then request the Chief Director of the Municipality responsible to present explaining that at around 14h00 he would be on air on SAfm because it was speaking about Dr JS Moroka Municipality. The Executive Mayor was present and there were some members of the community who defined themselves a community representatives who were also present. All of the issues and questions that were raised before the Committee had been raised by the Municipality and members of the community had said that they were waiting until the end of March for the Municipality to come back and address them through media platforms as to whether they were not satisfied. Community members were saying that they were smelling a rat in terms of implementation. The Municipality was going to engage on the applications and await substantial submissions by the institution and take it from that point. However, the administrator was not an effective person in relation to what was thought that he would do. It was to be remembered that when the administrator and intervention finished around June 2020, in terms of the law,  the Department was supposed to get a close-out report; however, the administrator could not be found for three to four months.

The Chairperson asked if the administrator was an employee of the Department.

MEC Msibi confirmed that the administrator was an employee of the Department. It was then discovered that the administrator had been affected by Covid-19 and was moving from one hospital to another, to which effect evidence had been found. Nobody could have informed the Department because after the administrator had finished work, he went home and was confronted by Covid-19, taken to hospital, and the Municipality had no information, which was why the close-out report had come to Cabinet in October 2020. This resulted in the development of requesting three months to fill up the post of municipal manager. He then handed over to Mr Simphiwe Kunene, Chief Director: Municipal Support, COGTA: Mpumalanga.

Mr Kunene thought to started off his presentation with Lekwa Local Municipality and would then make the Dr JS Moroka Local Municipality presentation if the Chairperson so permit. 

The Chairperson agreed with Mr Kunene and said that the report for the Dr JS Moroka Municipality should be noted but that the Municipality would have to be called back to the Committee. Thus, what was done during the discussion was to be presented so that the status quo was known to Dr JS Moroka and so that it could help decide the way forward. Presently, the Lekwa report would be dealt with in particular.

Presentation to the Portfolio Committee on the state of Lekwa Local Municipality and progress on intervention in terms of section 139(1)(b) of the Constitution of the Republic of South Africa

Mr Kunene presented to the Committee the intervention in terms Section 139 (1)(b) of the Constitution at the Lekwa Municipality. The presentation discussed the functionality of the Lekwa Local Municipality; an overview of the financial recovery plan; impact assessment; support provided to Lekwa Local Municipality and the way forward.  

Of great concern is that the CFO post has been vacant since October 2017 as well as the vacancy of the Director: Technical Services and Director: Community Services, which are the key vacant positions within the Municipality. However, with effect from 3 February 2021, a new CFO has been appointed. The other posts that were filled were posts of Municipal Manager and Director: Development and Planning.

At its sitting on 18 March 2020, the Executive Council resolved to invoke s139(1)(b) of the Constitution in Lekwa Local Municipality. A letter was written to the Minister, National Council of Provinces (NCOP), the Mpumalanga Provincial Legislature, SALGA and Lekwa Local Municipality informing them of the Executive Council’s resolution to invoke s139(1)(b) of the Constitution in the Municipality and seeking concurrence on the matter. In the Minister’s response on 9 September 2020, she provided two options in terms of continuing with the intervention: (i) based on the serious challenges affecting the functionality of the Municipality, the Provincial Executive Council considers escalating the intervention to s139(5)(b) of the Constitution, read with s146(3)(a) of the Municipal Finance Management Act (MFMA). Section 146(3)(a) of the MFMA provides that the Provincial Executive Council must intervene in terms of s139(5)(b) of the Constitution by dissolving the council of the Municipality.; or (ii) if the Provincial Executive Council maintains that it would like to proceed with s139(1)(b), it should provide additional motivation. The Department is of the view that an intervention in terms of s139(1)(b) of the Constitution would be best for the Municipality.

There continues to be serious problems of water, with effluent discharge impacting on water resources. Lekwa Municipality has challenges of water treatment plant infrastructure that is not working optimally and design capacity no longer meeting demand. Ageing infrastructure as well as the increase growth within the Municipality has put pressure on the infrastructure of the Municipality. A letter was received from the South African Human Rights Commission (SAHRC) and the situation in the Municipality was investigated. It was concurred that s139(1)(b) must be invoked in Lekwa Local Municipality because there is no hope of recovery.

In terms of financial management, debt continues to grow within Lekwa Local Municipality. Between December 2018 and December 2020 Lekwa’s debtors grew from R865 106 000 to R1 138 998 000. As at end of 2019/20 financial year the Municipality reported a distribution loss of R111 million for the 2019/20 financial year. Lekwa is one of eight Municipalities in the province that are major contributors to the escalating Eskom debt, namely: Lekwa owes R1.2 billion. Thus, the financial viability of Lekwa is not strong and it would not be possible to meet its financial obligations. Lekwa Local Municipality has been receiving an unqualified audit outcome from 2013/14 to 2016/17. The Municipality regressed to a qualified audit outcome in 2017/18 and further regressed to a disclaimer in 2018/19. Lekwa Local Municipality has been placed under mandatory intervention in terms of s139 of the MFMA as of July 2018. The implementation of the recovery plan has been very slow.

In terms of the overview on financial recovery plan, strategy one concerns strengthening administration, governance and internal controls and has 45 activities, of which ten are complete and 13 are near complete. Strategy two concerns organisational restructuring of Human Resources and has 38 activities, of which five are complete and 11 are near complete. Strategy three concerns local economic development and has 26 activities, of which 18 are complete and five are near complete. Strategy four concerns revenue management and enhancement and has 47 activities, of which seven are complete and four are near complete. Strategy five concerns improved financial planning/budgeting and has 38 activities, of which ten are complete. Strategy six concerns service delivery and infrastructure Management and has 52 activities, of which four are complete and two are near complete. In total, there are 246 activities of which 54 are complete, 35 are near complete, 116 are in progress, and 53 have not yet commenced.

From January 2020 to December 2020, the impact assessment showed: bank balance increase by R32.1million; debtors increase by R73.4 million; creditors (excluding Eskom) increase by R27.3 million; Eskom debt increase by 218 million; property rates increase by R7.3 million; electricity increase by R3.6 million; water increase by R341 469; sanitation increase by R371 629; and refuse increase by R245 092. The financial overview shows that the Lekwa Local Municipality is operating at a loss. From August to December in total: electricity revenue amounted to R179.4 million; bulk purchases amounted to R253 million; margin on electricity amounted to -R73.5 million; and operational costs amounted to R24 million. This resulted in a net deficit of -R97.6 million. It is therefore likely that the Eskom obligations will not be met.

In terms of good governance, Lekwa Municipality has had challenges in convening Council meetings and poor working relations of the Troika which has impacted on the functionality of the Municipality. After the election of the Mayor and Speaker on 5 June 2020, the Troika was reconstituted. The Department has requested the Municipality to develop an action plan to respond to the findings of the s106(1)(b) report. To date the Municipal Council has not met to process the report, largely due to the challenges in council. In terms of building capable institutions, s56 posts have been vacant for a long time, which affects the stability of the Administration. The Director: Corporate Services position has been vacant since January 2019, Director: Technical Services position has been vacant since March 2020 and Director:Community Services Senior management position has been vacant since December 2020.

COGTA has supported the Lekwa Municipality on the MIG project, however in 2016/17 there was an underspending of R3.2 million and in 2020/21 by end of September 2020 it had spent 2.4% of its total allocation of R28.6 million. COGTA also supported the Municipality with the review of the Spatial Development Framework and Land Use Scheme. COGTA has also supported the Municipality on the recruitment of its s56 managers, however some of these processes were never finalised by the Municipality. Provincial Treasury also supported Lekwa Municipality and deployed a Financial Advisor to it for a period of two years until 2022. This support was provided through budget assessments and recommendations, revenue coordinated training, Annual Financial Statement (AFS) disclosure training, asset management training and review procedures, SCM training, governance training, guidance, and review. The Gert Sibande District Municipality provided further support through having seconded a senior manager to assist with technical services, appointed service providers to deliver water using water tankers, deployed its water tanker, rehabilitated the roads, constructed hand pump boreholes, and appointed a service provider for the upgrading of sewer reticulation at Rooikopen. Support provided by the Mpumalanga Department of Water and Sanitation (DWS) and Department of Human Settlements (DHS) included addressing the sewer spillage challenges in Lekwa Municipality. The DHS embarked on a project in Standerton Extension 8 to construct two new sewer pump stations. The DWS has set aside an amount of R80 million over two financial years to address sewer network spillages in  Rooikopen. Lastly, the Municipal Infrastructure Support Agent (MISA) has conducted a detailed infrastructure assessment to resolve the municipal infrastructure challenges. MISA has deployed a professional technical team which has been actively involved from the past three years to provide technical advice on the infrastructure, town planning and capacity building in the Municipality.

Following the guidance given by the Minister in her letter dated 9 September 2020, where she indicated that if the Provincial Executive Council maintains that it would like to proceed with s139(1)(b) of the Constitution, it should provide additional motivation. Further motivation has been provided by the Department to the Executive Council. The submission made to the Executive Council is to continue with the intervention in terms s139(1)(b) of the Constitution. The Department awaits the decision of the Executive Council on the matter.

 

SALGA Support

Cllr Muzi Chirwa, Chairperson, SALGA: Mpumalanga, briefly highlighted the work that SALGA was doing.

SALGA has provided continuous support to the Lekwa Local Municipality in conducting disciplinary hearings and continues to assist through the provisioning of the sharing of the presiding services. SALGA also enforced its work of performance management, which was provided on 29 October 2020. There was also the continuous provisioning of effective advise on labour-related matters and human resources, and thereby also participating in the recruitment process of the s56 employees albeit the challenges of the lack of vetting. In partnership with COGTA, SALGA has engaged the Lekwa Local Municipality on issues of Eskom and a lot of assistance was provided.

In the Dr JS Moroka Local Municipality, SALGA also conducted performance management support on 29 October 2020 through the administration. SALGA continues to provide advice on labour relations and human resources. A number of employees were recruited over and above the Municipality’s organogram and SALGA has thus advised on how the matter is to be addressed through the available legislating framework.

National COGTA: State of Lekwa Local Municipality

Ms Avril Williamson, Director-General, national department: COGTA, introduced the presenter. Mr Thomas Kolokoto presented the audit outcomes for Lekwa Local Municipality in addition to the Department’s presentation. The parts of the presentation which he emphasised focused on: financial management; COGTA’s Support and Covid-19 interventions; other remedial measures; emerging issues; and recommendations.

The MIG Spending Analysis in December 2020 revealed an allocated amount of R28.6 million, total allocation and rollover of R28.6 million, transferred amount to date of R10.3 million, and expenditure to date of R1.9 million. Expenditure as percentage allocation excluding rollover was 7% and 7% including rollover.

In terms of COGTA’s support and Covid-19 interventions, the Municipality is supported in the planning and implementation of MIG projects and projects are monitored through expenditure reporting and site visit reports. An MIG acceleration plan was recently developed following the poor performance of the municipality on the current allocations.

Council took a decision on 30 November 2020 to request for the technical support of MISA. Appointments of service providers and contractors were finalised in December 2020. Handover of projects was carried out on 5 January 2021 and site establishment commenced on 19 January 2021. MISA will assist the Municipality with support and monitoring and management of the projects until completion.

Lekwa is experiencing political and administrative instability. However, the Municipality is relatively stable at the moment. Implementation of the s106 report must be pursued to its logical end. Further updates are awaited from the province as to how the recommendations are being processed.

Discussion

The Chairperson said that the Committee would write to the MEC for Provincial Treasury as there had been no apologies. He explained that the reason for this was because  in the past, the MEC for COGTA and Treasury would both come to the Committee. She hoped to understand what had happened and believed that when the Committee interacted with Dr JS Moroka Municipality, the MEC for Treasury would make sure that he attended. The Committee had never had issues with Mpumalanga and Members would love to always appreciate that. 

Mr Basie Strauss, Mpumalanga Provincial Treasury, thought that the Provincial Treasury was well covered as it had given its inputs to the Department and had done a joint presentation. As such, the Provincial Treasury had been covered by the Department’s presentation on the financial status. The critical issues that he wanted to emphasise pertained to the implementation of the financial recovery plan. Although Provincial Treasury had placed a financial advisor in the Municipality to improve the financial management in the institution, it would provide its support on a continuous basis so that it can ensure an improvement on the financial viability of the institution. Although it looked very negative, upon looking into the financial status of the Municipality, the Provincial Treasury had assisted the Municipality and the Municipality subsequently tabled and approved the funded budget through the adjustment budget process. The other concern, as previously raised, was the slow spending on capital grants and specifically grant funding. The Provincial Treasury wanted to encourage the municipality to implement the Acceleration Plans that have been developed through the support of MISA.

The Chairperson sincerely appreciated the progress on the matters. She handed over to the Members to raise issues.

Mr Ceza had two concerns regarding Dr JS Moroka. He raised that MEC Msibi had spoken about the 45 general workers who were currently on review. If he had heard correctly, MEC Msibi had spoken of the court process that was then subsequent to those general workers being reviewed. Could MEC Msibi provide the Committee with the court dates and the name of the court so that the Committee could have a record thereof? It had been 12 months of administration and the Committee was not seeing any progress nor audit outcomes from the Municipality in terms of the stability of the Municipality. If it could be remembered, he was the one who the Chairperson had said should perhaps go to the Municipality physically and he had done so. The issues that he had found there were appalling. As MEC Msibi had rightfully put it, in Ward 30 people were still having a problem in terms of the water. The water problem had happened a long time ago, even as early as the level five lockdown period, and right up until now, people were still struggling and were brought to their knees in terms of their dignity.

He did not know how much Black people had to clamour on these issues and how much of an impact s139 was supposed to have in terms of the timeframe so that the positives could be realised. There could not be 12 months of nothing. There was an administrator who was present from 2019 up to the present date and the term of 17 January 2021 had come to an end. Who was in control of the Dr JS Moroka Municipality at present? What was happening in the Municipality? Why was there a perpetual state of s139(1)(b)? The Committee would be very suspicious of the s139(1)(b)’s that were not yielding much positive results. He thought that the Committee should have a physical experience –  even though he had had a physical experience but he thought that his colleagues really needed to go to Dr JS Moroka Municipality and witness the issues on their own so that it understood how much it needed to kneel down in the state of a Municipality or sphere of government that did not seem to go anywhere in terms of its sustainability and positive outcomes.

Moving onto the issue of the Lekwa Municipality, Mr Ceza asked about the s106 report. What was the outcome of the investigative process into the appointment of Great Same Number (Pty) Ltd? Was its appointment in line with s32 of the SCM? If not, how was the appointment done? There was a letter that was signed by the Municipal Manager without the Municipal letterhead what is the consequence management for this particular act?

Mr Ceza pointed out that a Municipality that continuously struggled with revenue generation, debt collection policies, frequent meter reading, and the resultant payoff of creditors on time despite the adoption of the implementation of financial recovery, was surely a Municipality that needed urgent intervention. In the case of Lekwa Municipality, he thought that urgent measures needed to be taken to arrest the situation. All of the Municipalities seemed to have the same problems. He was currently sitting with a friend who had even said that the term ‘ageing infrastructure’ was liked as it was always being used. What is the catch on ageing infrastructure?

The same problems were being experienced as that of Govan Mbeki Local Municipality, where an 11-year-old’s body was found in Sakhile Standerton. There was a problem of unfinished projects in the Municipality and there was a quarry between extension 6 and extension 8, which was where the Nxumalo family had lost their child. What is the monitoring, evaluation, and ex post evaluation of a Municipal project? Do the projects in the Municipality follow the life cycle of a project? Who monitors, on a timeous basis, what the problem is? How could a Municipality payoff people that were not finished with their work?

In terms of National Treasury, Mr Ceza said that he had read about the negative cash balance in 2015/16 and it could be seen that the problems dated that far back in the Municipality. What is the current status of the cash balance of the Lekwa Municipality? Is the intervention going to bring about positive results in terms of its maintenance? A negative cash balance was a sign of serious mismanagement. If there was mismanagement and overdrafts etc., surely there were hands of some political leaders, taking away monies without a SCM process being followed? One could go to Emakhazeni Local Municipality to find that the R500 000 was taken by its Mayor, which was the case that was persistent. He wondered why it was that there was a pattern, what the interest was, and what was going on.

Mr I Groenewald (FF+) asked what controls the Municipality had implemented to ensure that all accounts were paid after 30 days of receiving the invoices or statements. Has the Municipality considered employing a consultant to perform a Value Added Tax (VAT) review in order to determine that there is no amount owed by the South African Revenue Services (SARS) to the Municipality? The Municipality has unresolved, unauthorised, irregular, wasteful, and fruitless expenditure of R1.8 billion incurred between 2012 and 2017. Has this been investigated and recommendations made to Council in accordance with s32(1)(ii)(b) of the MFMA? Has the Municipality investigated all cases relating to the abuse of Municipal SCM regulation 32? What are the details and relevant recommendations in this regard? There is evidence that the lack of procurement plans in the Municipality has lead to the absence of competitive bidding. What has the Municipality done to address this? In terms of the court order given on 18 September 2018 where the Minister of Water brought a case against the Municipality, there was an award made by the judge that the Municipality did not follow protocol, and therefore the Municipality was in contempt of court. He then asked MEC Msibi to provide more clarity on this in terms of what had happened there and what was going to be done.

Ms Spies said that as much as the Committee received all of the reports from all of the different Departments and SALGA, there had to be an understanding that whilst the Committee got these reports it had people on the ground that were experiencing these conditions in the Municipalities every day. Public representatives, residents, and the Committee spoke to people who had a house number, street name, and stayed in a ward, so they would tell Members exactly what was happening even though they had the reports in front of them. In many instances, some of it did not correlate with what had been reported to the Committee. She was happy that some of the issues had been covered with regards to the filling of positions and, although there was still a concern, at least there was some movement. Referring to the presentation made by the Department on slide 8 bullet 5,  Ms Spies pointed out that the Municipality has been without electricity boxes forever. As a result, when the Municipality’s own employees were called out to fix the faulty box meter, it was said that they were ones who were illegally connecting the electricity. Is this indeed the case? If so, does the Municipality have the stock in their storerooms? Are there electricity boxes available to be installed?

She said that she had information that a stadium that had been built in Ward 3, was rebuilt three times and upon completion had been kept locked, resulting in the community vandalising it. Ms Spies asked if there was any truth to this. The issues of sewerage and water constantly came up in both Lekwa and Dr JS Moroka. However, with specific reference to Lekwa, the issues around the area called Rooikopen were not mentioned in any of the reports – unless she had missed it. Why was this not prioritised? Sewerage was spilling into each and every road, putting the residents and children at risk. She explained that she was focusing on Rooikopen because there was a problem with the roads which had resulted in a fatality. This was because, according to the information that she had, an elderly lady fell ill and paramedics were called. The paramedics had apparently refused to fetch the elderly lady from her house because of the condition of the roads and they insisted that the family bring her to the paved road. The family then tried to push the elderly lady using a wheelbarrow, however, it got stuck. As a result, the paramedics left and the elderly lady passed away. Is the Municipality aware of this situation?

As was the case with the other Municipalities, Lekwa was not in a position to pay its debt to Eskom. If it could be remembered, there was a court order in winter 2020 when electricity was switched off for six hours a day. The ratepayers of Lekwa then took the Municipality to court for electricity and an order was granted. Is the court order being adhered to or not? What is the status of the matter? What is the situation with the s106 report? Referring to slide 12, Ms Spies noted that there was mention made of a break-in at the substation. She thought that that was totally appalling because one should surely have security personnel station at the substation. She believed that the Mayor, Speaker, and Municipal Manager all had personal bodyguards, so there should surely be security personnel at the substation. Lastly, there was a new township in extension 8 which was apparently without proper structure. There was no sewer plant or reservoir, and as a result their taps were dry most of the time and water needed to be tanked in. The new township resorted to the bushes when they needed to relieve themselves. What are the plans that will be implemented to ensure that these issues are addressed?

Ms P Xaba-Ntshaba (ANC) asked if the Committee was dealing with the Provincial COGTA of Mpumalanga and Msukaligwa Local Municipality.

The Chairperson clarified that it was Provincial COGTA and Lekwa Local Municipality.

Ms Xaba-Ntshaba asked what the progress had been in addressing the matters identified in the close-out report, since the meeting of September 2020 with the province. Namely, this included non-verification of s71 publication, quality production of annual financial statements, filling of critical posts, in-house capacity development, development of a revenue collection strategy, implementation of a procurement plan, establishment of a policy review committee, asset register and verification, timeous reporting to treasuries, and vetting of BTO officials. Has the Department provided proof that it notified the NCOP accordingly with regard to the s139(1)(b) intervention? What has become of the province’s resolution to extend the constitutional intervention for another six months?

On the issue of Lekwa, the Committee’s first meeting with Lekwa was in response to the crisis of raw sewerage that was polluting the downstream of the Vaal River. At the subsequent meeting of 4 September 2020, the Committee enquired as to what the progress had been with regard to fixing the main wastewater treatment plant in Standerton which contributed to the pollution. However, no tangible progress was evident. What progress has the Municipality made on this since the meeting of 4 September 2020? What has the progress been in capacitating MPAC to investigate unauthorised, irregular, fruitless, and wasteful expenditure, as to avoid appointing external service providers to do its work as had happened in the previous financial year? How far is the Municipality with the process of establishing a municipal disciplinary board in compliance with the MFMA Financial Misconduct Regulations? What was Lekwa’s current progress in respect of implementing the recommendations of the s106 report?

Ms M Tlou (ANC) said that in Dr JS Moroka there were managers who were implicated in some wrongdoings.

The Chairperson interrupted Ms Tlou and asked her to focus on Lekwa as Dr JS Moroka was not present. Dr JS Moroka’s report would be dealt with when it was available.

Ms Tlou said that she was covered in that respect.

Mr G Mpumza (ANC) said that following the report it had become mandatory to implement s139 of the MFMA in order to roll out the financial recovery plan. He asked for understanding because when Mr Kunene was presenting he indicated that the implementation of the financial recovery plan had been slow. What has been the bottleneck impeding the development of the financial recovery plan? What measures have now been taken given that the current measures have been slow? What measures has the intervention actually deployed to ensure that they are jacking up the implementation of the financial recovery plan?

Response

Cllr Linda Dhlamini, Executive Mayor: Lekwa Municipality, took the opportunity to appreciate the effort and chance given to the Municipality to reflect on the issues as raised. He moved from the premise that, indeed, Lekwa remained a distressed Municipality with a lot of challenges that were in front of them. Lekwa continued to welcome the support that was displayed by the provincial and national government to assist the municipality to fulfil its constitutional obligation. As it dealt with the questions on the table, the council wanted to indicate that on matters of basic service delivery as had been mentioned by Mr Ceza, and while the details would be given by the Municipal Manager and the entire team, extension eight in particular had projects unfolding from the settlement. Extension eight was a newly established settlement where low cost units had been built by the DHS. In the execution of this work, the council had realised constraints at the level of water supply and issues of pump stations as it dealt with sewerage in the area. There had of course been various projects aim at working with the district in assisting with the supply of water in extension eight. In particular, there were reservoirs that had been constructed and lines that were built to try and assist with the supply of water. While it has not reached a point where consistent supply through piped water is realised, the council was at a stage where it deployed tankers as a short-term measure in trying to ensure that the council came closer to that space in terms of supplying water.

There was a schedule that was used by the department of technical services insofar as supplying water in areas where the council was not supplying water consistently through pipe water was concerned. The council could confirm its constraints on the technical aspect, and then also supported the deployment of MISA to come to the space and assist with project management issues specifically. The council had realised that some of its projects were not yielding the desired outcomes due to capacity constraints and had said that the help that it was getting from MISA would indeed make a decisive impact. The support from the provincial government around this issue was appreciated but other points would be flagged by management. On the issues that were raised around electricity boxes, Mayor Dhlamini said that at the beginning of the month he and the council had visited its stores together with the MMC for Technical Services, just to get a sense of the material available in its stores. It could be confirmed that there were electricity boxes available. However, the council’s major concern was the execution of the work, which it felt really needed to be tightened up. The council was taking an assessment in terms of the service delivery and budget implementation plan to see what the major constraints were at the implementation level, so that it could attend to the root cause of the snail paced delivery and implementation of electricity boxes.

It could be confirmed that the issue of Rooikopen had been received as it related to roads and subsequently to the matter that was indicated in terms of the emergency services. For the past two, if not three, weeks the council was also part of the Municipalities that were experiencing heavy rains. Whilst the rain has compounded the state of Lekwa’s roads which were not very well, particularly given that in the area most of the roads were gravel roads, the constraints had been compounded by the heavy rains. A team had been sent to Rooikopen, the council had attended the funeral of the elderly citizen, and aid was given in ensuring that there was proper assistance and a decent send off. The council had really expressed its concern around this issue as well as their concern about what had transpired. It could equally be indicated that the council, in its sitting on 2 February 2021, had appointed the CFO to assist the Municipality and stabilise the budget and treasury office.

While there was still a long way to go in terms of ensuring that the critical positions of the s56 managers were filled, one of the major issues that one tended to see was that council really did not attract people who would be able to discharge the task within the space. Mr Dhlamini said that he was not sure whether this was perhaps because of the challenges that the Municipality was dealing with but the desired outcomes were not being yielded in terms of getting a suitable and qualified individual. He said that he would be handing over to the Municipal Manager to answer all of the other questions raised by Members so that they could equally reflect the picture. He explained that presentations always had to be honest and truthful because they wanted to be assisted in resolving the challenges that they were dealing with.

Ms Gugu Ntshangase, Municipal Manager: Lekwa, started with the issues that were raised on the MPAC. In terms of the issues of unauthorised, irregular, fruitless, and wasteful expenditure, MPAC has set to process the issues and have managed to process unauthorised, irregular, fruitless, and wasteful expenditure for the 2018/19 and 2019/20 financial year. Those investigations that were done by MPAC have been tabled to council through a council meeting that sat the previous year with a council resolution of 887. However, the entire investigation had not been completed and there were reports that were still in progress that had been processed. Council had assisted in capacitating MPAC through the deployment of the resident advisor from Treasury,Mr Paul Mpele, who was also in attendance, to assist with the investigation and clarification of certain issues for the MPAC Committee. To come in on the issues of the disciplinary board, she indicated that the disciplinary board was functional  and had members who had been appointed and included Treasury. The first assignment that had been given by council to the disciplinary board was the execution of the s106 investigation.

In terms of the issue of service delivery, especially infrastructure, she confirmed the presentation by the Department in that as a Municipality Lekwa had challenges in water, sewer spillages, and electricity. She indicated that, through the support of COGTA and MISA, the Municipality had been able to do an assessment on the infrastructure. The stakeholders that were assisting the Municipality to do a thorough assessment of all of the shortcomings were the Development Bank of Southern Africa (DBSA), Rand Water, MISA, and others. Currently, there was an assessment which clearly pointed out what the issues were and also broke it down into long-term and short-term goals that the institution could address. DBSA had identified the council in a project for Asset Care, to try and deal with some of the issues. The Municipality was currently working with Rand Water in looking at the maintenance and repairs of some of its infrastructure projects, and there were also some other stakeholders that had made pledges to look at the short-term projects that could be done. Currently, the council was intervening in other areas through water tanks. In the rural wards there had been a project for boreholes that was currently ongoing, as well as the fixing of windmills to try and assist the communities.

Ms Ntshangase explained that the entire MIG allocation of R28 million had been prioritised by council to address the issue of water and sanitation. Lekwa Municipality had a serious problem of sewer spillage into the Vaal River. There was a court order between the council and the DWS, whereby an order was granted in 2021 which included an action plan of the actions that the Municipality would take to deal with some of the issues that were contributing towards the sewer spillages such as the pumps that were not working. Through the MIG allocation of the current financial year, all of the contractors were on site to deal with some of the major pumps that had an effect onto the sewer spillage. As the Department’s presentation indicated, Lekwa suffered issues of infrastructure, ageing infrastructure, and capacity where the current infrastructure that was there could not really deal with the growth in terms of the town and with the development. Such issues needed to be dealt with. In terms of the issue of the Eskom debt which remained a big challenge to the Municipality,  she confirmed that it was true that the Municipality was one of the major defaulters as Lekwa was sitting on an account of about R1.1 billion. She confirmed that there was a court order and that the council was honouring the court order. The court order indicated that there were companies that were paying directly to Eskom and the Municipality was also ordered to pay a certain percentage of the equitable share to Eskom, which was being done. There were also weekly arrangements that were being done. However, the amount of debt was quite big and the Municipality might not be able to service the debt immediately.

The intervention that was now requested was that Treasury assist the council to actually do a thorough scrutiny of the debt so that it is able to come up with a realistic and reasonable payment plan that council could commit to. Treasury had agreed to assist the council, together with Mr Strauss and Mr Mpele, and should be engaging in the exercise very soon. In terms of the issue of the financial recovery plan, Lekwa was one of the Municipalities that had adopted its financial recovery plan a bit late, on 27 November 2019. There had been a slow implementation of the plan but she confirmed that for the Municipality to try monitor and fast track some of the activities in the financial recovery plan, the Municipality had adopted the financial recovery plan as part of its service delivery budget implementation plan which was adopted by council. In that way it would assist the council to be able to monitor, on a quarterly basis, whether all of the targets that were in the financial recovery plan were being achieved. Concerning the issue on the MIG spending, the Municipality was very behind in terms of the spending. It was true that by the end of December the Municipality was sitting with 7%. However, through the intervention of council requesting MISA to come into the space through a council resolution, MISA had deployed officials and engineers to assist the Municipality and review all the procurement processes to ensure that they are in line. She confirmed that the projects were currently on the ground and in progress. As at the end of February, the Municipality was sitting on 22% in terms of spending.

The Executive Mayor announced that an acceleration plan had been developed and tabled before National and Provincial COGTA. Council was confident that, come the end of the financial year, it should have been able to utilise the entire grant that was given to them. Regarding the issue of the cash flow of the institution, this was one of the issues that were raised by the Auditor-General together with the s106 report as part of the activities of National Treasury through the resident advisor that was deployed to the Municipality. A cash management committee had been established, which looked at the Municipality’s expenditure and authorisation of its monthly expenditure in the form of orders. In terms of paying debt, the Municipality was now in a position to pay its debt within 30 days, except for the big debtors that the Municipality had made arrangements with such as Eskom, SARS, and DWS. On the issue of electricity boxes, it was true that the council had meters that were sitting in the stores – about 3000 of them that were procured. On the issue of Rooikopen, there was a project that was currently ongoing to the value of R50 million. It was a project that was currently administered by the district to try and deal with the issue of sanitation in Rooikopen. Regarding extension eight, it was true that there were challenges in terms of sanitation and water. However, the DHS was currently running a project of installing pump stations that should be able to assist, especially with the issues of sanitation. Council was also trying to address the issues of water. Mainly, this issue was as a result of maintenance and repairs in terms of one of the reservoirs where all of the high lying areas were being affected as a result of the pressure not reaching them. She said that she would leave the s106 issue to the Executive Mayor.

The Chairperson pointed out that the Executive Mayor had already made inputs but asked if he wanted to add anything further that had not been covered.

Mayor Dhlamini shared that the Municipality was waiting for the delivery of the honey sucker as part of the short-term measures in dealing with sewer spillages. In terms of the five pump stations that had been identified to be addressed in the current financial year, its intention at the end of the day was to seek to minimise the spillages that were currently happening. On matters of the s106 report, there was indeed a meeting during December where council had met with the Department and there were clear issues around the action plan not responding as expected to the issues raised in the s106 action plan. There was further commitment from the Municipality, saying that it needed to address the action plan and give clearer and proper timelines. In the current year, the council had also received a letter from the MEC which was directed to the Speaker, and which was reflective on matters of the action plan in saying how far the issue was. The Speaker will then respond back to the MEC, whereby there should be feedback in the office of the MEC about the issues around the implementation of the action plan.

Among the issues that were cited in the s106 report were various matters of management and there were interactions which were kicked in by council, requesting the Municipal Manager to clarify some of the issues. The process was thus still at that level of waiting for the responses between the Municipal Manager and council on the issues around allegations that were levelled by the s106 report. There was correspondence coming from a representative of the Municipal Manager and  acting on behalf of the council, trying to source clarities such as why council could not pursue the Municipal Manager in relation to the issues that were raised. The process was unfolding at that stage and it was hoped that the Municipality would have a logical conclusion on all of the matters. However, it could be confirmed that the Department had raised a serious concern on the pace at which the issues were being pursued. Council had equally said that it remained the priority of the Municipality to act and act decisively on the issues that were raised. On 5 February 2021, the Hawks had visited the Municipality and came with a warrant for the search and seizure of particular documents. Among the issues that were cited were matters that were within the s106 report. The process of investigation was also at the level of Hawks as it related to the issues that were reflecting the s106 and Auditor-General reports.

Mr Strauss gave further information in relation to the question pertaining to the cash flow balance. The reports that were received indicated a positive cash flow balance in the Municipality however he said that that might be misleading. When looking at the total outstanding creditors specifically, if all of the commitments in the institution were to be honoured it would have a direct impact on the cash flow balance. It thus could not be said that the Municipality had a cash flow balance at the current stage of the game. The challenges remained, as the Municipal Manager had reported, more on the bulk purchases and the outstanding Eskom account which had put pressure on the cash flow of the Municipality. To assist the Municipality monitor it better, the Provincial Treasury had put a lot of emphasis on improving the control environment in the institution through the implementation of the cash flow management committee, whereby it encouraged and supported the Municipality to monitor outgoing commitments and ensuring that it is only prioritised spending as well as, before the orders went out, that it could actually be honoured by cash in the bank. This was a priority area for the Provincial Treasury and it was doing so while supporting the Municipality with other revenue enhancement initiatives – specifically looking at the improvement of the revenue baseline in the institution, which had received a lot of attention from Provincial Treasury through their placement of the resident advisor.

 A lot of emphasis was going into improving the control environment in the Municipality, specifically in the areas of supply chain expenditure and revenue management. As the Municipal Manager had reported, Provincial Treasury had agreed with the Municipality to analyse the Eskom debt as well as to assist it with the development of a credible and affordable repayment plan that it could then, through council’s consideration, submit to Eskom for consideration. Further, under the financial statements itself, the Provincial Treasury had provided support into understanding the interpretation of the Generally Recognised Accounting Practice. Support was also provided through offering the Provincial Treasury attendance in the Audit Steering Committee during the audit process so that it could advice and support the Municipality to address the issues as raised by the Auditor-General. On MPAC, when looking at the unauthorised, irregular, fruitless, and wasteful expenditure that was a concern in the institution, the Provincial Treasury had since December further provided capacity to the MPAC board members and supported the Municipality with the establishment of a disciplinary board. It was thus believed that, going forward, the Municipality would have the capacity to investigate with the support of the resident advisor and the Provincial Treasury’s presence on the disciplinary board.

Mr Kunene (Mpumalanga COGTA) said that even though most of the questions had been responded to but that he just wanted to speak to the issue that was raised around Rooikopen. Indeed, it had been spoken to in the presentation and it was a priority area that was being focused on. Part of the support that the Municipal Manager had spoken about was that the council was providing support through the DBSA Project Management Unit (PMU). Rooikopen was one of the Municipalities that had been identified for key focus around the issues of asset care and providing support on operations and maintenance. Particular attention was also being paid to the recruitment process that the Executive Mayor had alluded to. Movement was seen in two of the s56 posts, the Director: Corporate Services and Director: Community Services, where the recruitment had already begun and interviews would be held for the Director: Community Services position the following day. It was hoped that the movement would begin to see the filling in of those posts and, hopefully, the recruitments of managers with the capacity that was required by the Municipality.

Cllr Chirwa highlighted that SALGA’s role as an association was to continue to provide support and advice to the Lekwa Local Municipality. In the main, SALGA’s advice had been on human resources, participation in the Local Municipality’s processes in the form of support, as well as labour relations. If Members could recall, there had been a time where there was a stalemate between the top management and workers in Lekwa. SALGA, together with other structures of COGTA, played a very meaningful role in ensuring that it restored the stability assisted by the Municipal Manager and had resolved the matter amicably. Like all other municipalities, Lekwa had also participated in SALGA’s workshop and trainings on MPAC. This meant that SALGA was playing a very significant role in assisting Lekwa Municipality to deal with the matters, especially the matter that had been highlighted around the issue of the Rooikopen sewer spillage. SALGA’s role in the Rooikopen sewer spillage was that it had lobbied the Deputy Minister of the DWS to go and get some resources in order for SALGA to deal with the issue of the wastewater treatment works. Apparently the Minister was still dealing with this matter. SALGA had requested Lekwa to provide the report and had forwarded it to the Deputy Minister of the DWS. SALGA was looking forward to this because, if the issue of the wastewater treatment works were resolved as well as the work done on Rooikopen and the issue of the waste pipe, it would be going a long way to eradicate the sewer spillage.

MEC Msibi thought that it had to be indicated from the onset that if there was a Municipality that was afforded full support by all and sundry, it was Lekwa Municipality. However, there were no results. The reason why Minister Dlamini-Zuma rejected s139 was because, as could be remembered, s139(1)(b) had been resolved a long time ago. Now, Minister Dlamini-Zuma had responded and raised two points. She had asked what it was that had not been done in the Municipality for it not to be placed in s139(1)(b). This was because, as everybody had said, the intervention of the financial recovery plan had been available but there was no implementation of it. The s106 investigation report had also taken time to be presented but it had been presented and correspondence could be provided to the Committee. Even concerning the time that was agreed upon during the presentation for them to meet and resolve at council, when the Speaker convened a meeting other councillors were against it then the meeting did not sit and the problems that were being faced were not addressed. The responsibility of local government was basic infrastructure. Members who were raising issues of sewer water and potholes etc. were correct. However, instead of focusing on responding to these issues, there came the issue of the Executive Mayor not having protectors and the exchange of letters between the Mayor and Municipal Manager. He had thought that when the Executive Mayor and Municipal Manager had had an opportunity they would tell the Committee all of these things. However, instead of them focusing on building the Municipality and accepting all the interventions that were being provided for, they were instead on each other’s neck and did not tell the Committee, and MEC Msibi said that he did not know why. He said that he would furnish the Committee with all of the correspondence between the Mayor and Municipal Manager that had been received, within which they did not speak about service delivery because were speaking about something else.

It could safely be said that the issues of audit and ageing infrastructure were national problems. Even nationally, when the Department met with the Leader of Government Business, it was acknowledged why there would always be the issue of ageing infrastructure. Some of the infrastructure was installed during the apartheid era where the number of people were less. Now, people have maximised and the number of people has enlarged. There was still a pipe of a 5 meter diameter in an area where it had to supply people who had tripled in number since the pipe had been previously installed. In terms of electricity, one was to notify that maximum demands in Municipalities throughout the country by Eskom had reached a peak point. If Eskom originally placed the transformer of a Municipality to service 400 people, the number of people now increased to more than 2 000 and during winter the transformer always tripped off. This was the kind of situation relating to old age infrastructure and minimum capacity to respond to the maximum number of people that were currently settled in the respective areas. The issue of the s106 report was that it had taken too long for council to sit, however, over and above sitting, council had submitted an action plan to the Department which was not correct. Instead of council implementing the matter, it spent more time submitting the wrong action plans which the Department responded to. This occurred up until some people went to the Hawks and said that there was no movement in terms of what had to happen.

The reason why the Hawks had arrived at the Municipality was upon its own invitation regarding the behaviour in the Municipality. The Chairperson of the Provincial SALGA had indicated that the NCOP could bear testimonies. In the previous year when the Department had met with SALGA, for a period of between four to five weeks there were no services and there was an uprising in the Municipality as people were crying for services. He was sure that the Committee could get these occurrences to indicate how far the institution had deteriorated both from a leadership level of those who were elected as public representatives and an administrative level as they had to be able to work together. The Municipal Manager and Executive Mayor seemed not to be speaking to each other. His understanding of leadership was that, as an MEC, he had to speak to his Head of Department (HOD) from time to time to try and resolve issues. However, with regard to this case, it seemed as though the Municipal Manager and Executive Mayor were not speaking to each other unless through correspondences. In terms of the filling of vacant posts, the Department had tried its best and had seconded three officials to the Municipality. Within three months, one of the Department’s officials was between a rock and a hard place. One of the officials had to be removed and the other officials who were going to provide the report had clearly indicated that his intervention to send the three officials to the Municipality was not going to yield any results because there was no cooperation from the Municipal Manager – something which was written down.

The Executive Mayor himself had said that the process of dealing with the issues that were identified as an outcome of the investigation process was unfolding up until a logical conclusion was reached. He explained that a logical conclusion was when the respondent could have said to the Department that letters had been written on a specific date, a response was expected on a later date, and the matter would be heard on another date. The issue of the unauthorised, irregular, fruitless, and wasteful expenditure was part of the action plan and it was where there were individuals who were charged as alleged to have committed some mismanagements. The Municipality had to be able to give the Committee that information. In terms of the s139(5) financial recovery plan, it was in fact not moving. The MEC for Treasury could tell the Committee that all system frameworks were in place but there was no willingness from the Municipality to be able to perform the task. The reason why the Department had to request the chairperson of the district development model who was also the chairperson of SALGA, Cllr Chirwa, was because there was no movement and the Department had asked him to intervene. There was a time when taps were closed and there was no water up until the Premier herself went down to the Municipality, together with the Deputy Minister, District Mayor and Chairperson of SALGA in the province. He thought that it was necessary in the meeting to tell the truth, dissect the challenge and communicate so that a cure could be found from the Committee in terms of giving the people services. What pained the Department every day was that all of its efforts were in vain.

In speaking about the spending of MIG, he had thought that the Committee meeting would explain why only 7% had been spent. December was the second quarter and 50% was supposed to have been spent by council. He said that he had not heard any tangible reason or of any particular challenges indicating to why it was not spent. Nobody was taking responsibility for this issue. In terms of the MFMA, the Executive Mayor had to ensure that the budget was spent and that the budget was spent correctly and the accounting officer would then become the Municipal Manager. When going back to the engagement that had taken place in Cape Town when the Department was asked why it was not acting as COGTA, it was indicated that it was only council that could act against its own employees. Thus, council was reluctant to act against the Municipal Manager on all of the issues raised and about the allegations. Council was quiet and did not want to act and the Executive Mayor had become tactical in saying that through the Municipal Manager representative the matter had been responded to. However, he was sure that the Executive Mayor would provide clarity when allowed to. It was currently the third quarter, with the date being 16 February 2021 and at the end of March it would be the end of the third quarter and presentation of the draft ITP for 2021/22. He had heard the Municipal Manager saying that it was assured in the meeting that come the end of the financial year the entire budget would have been spent. The Municipality could not even spend grants that were given to them to provide services to the people, which was the situation that the Department found themselves in.

As he spoke to the Committee he had a letter with him. After he had left the hospital at midday, he had spoken to his officials and they had prepared letters addressed to Dr JS Moroka, Lekwa, and Govan Mbeki Local Municipalities. The subject of the letter was that by 19 February 2021 the Department wanted a report on the implementation of the recommendations of the forensic investigation. For example, in some instances the recommendations were simply saying to refer the matter to the Hawks, which had not been done. This was why, by 19 February, the Department wanted a report back and it would send it to the Office of the Premier, the Minister, and the Chairperson in terms of the responses that it would receive. Some of the responses left much to be desired and, at times, the Department could not go and strangle a person who had been elected or appointed to perform a task of giving services to the people. The people of Lekwa were suffering in terms of services. There was a time when the Chairperson of the African Farmers Association of South Africa (AFASA), which was the structure that dealt with agriculture, was showing him dead chickens because of the problem of electricity. He had ended up phoning the Municipal Manager and asking why the Department did not release the electricity function to Eskom so that the farmers bought directly from Eskom. The Chairperson of AFASA ended up writing a letter to the Minister and President Ramaphosa on the particular matter. However, nothing was being said.

MEC Msibi closed by saying that a house had collapsed and for the house to be restructured and constructed, it required honesty and passion from those who were in the challenge. The Department was not satisfied about the things happening in the Lekwa, Moroka, and Govan Mbeki Local Municipalities. This was why, after getting the response, before the end of the month the Department would submit the progress to the Committee. As COGTA, the Department would take a serious position on the delinquencies because the public purse and taxpayers’ money were not being utilised correctly. The forensic investigation teams that had been appointed would be paid by COGTA and he thought that it should be value for money. At the end of the day, the officials should be able to provide services to the people of Lekwa, who had to get water, have roads and electricity, and the sewer spillage had to be dealt with. However, with the kind of leadership that the Municipalities had, this was something that could only be imagined and would not be achievable. He wanted to bring to the Chairperson’s attention the real picture of the situation so that, perhaps, when the officials received a second chance to respond to the Committee they would be able to say that certain points were not true and that evidence would be provided to that effect.

Further Discussion and Response

Mr Mpumza said that in view of the response by MEC Msibi, Members were now getting a totally different picture to what the Mayor and Municipal Manager had presented to the Committee. He asked if the Committee could now plead to the Executive Mayor to perhaps detail what he had said on the progress and what was unfolding around the s106 report. This was so that as the Committee it was concisely appraised on what exactly the developments were.

Mr Groenewald said that now that MEC Msibi had spoken it was clearer. He saw that Mr Sam Ngubane, Acting HOD, was also in the meeting and had chaired the meeting a few days prior that, in terms of councillors shouting and swearing at the President as well as other in-fighting that had occurred. This was because the councillors did not want to be placed under administration.

The Chairperson said the Committee had missed what Mr Groenewald had said and asked where Mr Ngobeni had chaired the meeting and whether it was a meeting of council.

Mr Groenewald clarified that it was a virtual meeting that Mr Ngubane had chaired. It was not a council meeting as far as he knew and he said that perhaps Mr Ngubane could enlighten the Committee further. If he was not mistaken, the meeting was a stakeholder meeting of the Provincial COGTA. It thus related more in place of what was happening in terms of the Municipality and what MEC Msibi was stating to the Committee. He asked MEC Msibi if the Municipality was under administration and if not, whether the Committee could recommend that the Municipality go under administration in terms of s139(5).

The Chairperson clarified that a question had been directed to the Executive Mayor to explain what was actually happening based on what MEC Msibi had said. Thereafter, Mr Ngubane was to explain what had happened in the meeting and MEC Msibi would deal with the status of the administration if there was any in Lekwa.

Mayor Dhlamini explained that he had not captured all of the issues because he was taken out of the meeting by his network but was back. The last matters that he had captured were the issues raised by MEC Msibi around how the relation was.

The Chairperson added that he was to respond to the progress on the s106 report. Mr Mpumza was worried about what MEC Msibi had said in relation to the implementation of s106 as it seemed as though Mayor Dhlamini had not shared minor details. She explained that Mr Mpumza thus wanted Mayor Dhlamini to expand on what was actually happening on the matter.

Mayor Dhlamini said that it could be indicated that since September of the previous year he had been mandated by council to communicate with the Municipal Manager around issues that were raised in the s106 Audit-General report. Council wanted to establish the issues that were contained in the documents and whether council should initiate a disciplinary process. The Municipal Manager was expected to provide a response on the issues as contained in the letter that was forwarded to the Municipal Manager. The reply from the attendants that were representing the Municipal Manager was seeking further clarity on the issues that were contained in the letter. The Municipality had responded but the second letter had also said that sufficient clarity had not been provided and that further information was still needed. When the matter was taken to council towards the end of September, council had said that the Municipality should further provide clarity which was exactly what they had done. In October there was again a response to say that the issues that were raised were not sufficient. Letters were forwarded asking for reasons why various issues should not be pursued in line with the disciplinary processes. However, there had been clarities that were sought and it could be indicated that, during the month of December, the Municipality wanted to take the item back to council to say no.

Part of the challenge now, as details were given, was that there was a response to say that the Municipality was not responding as expected. The Municipality therefore wanted council to have the view to say who could be sourced at present and who could really provide the details that were expected. This was because in the letters that the Municipality was forwarding it was indicating the s106 and Auditor-General report. As the basis of the letters that were being communicated and the clarity that was required by council to say why the Municipality should not take additional processes, he thought that that was the first hurdle as it related to the Municipal Manager. Secondly, on the action plan in general and as he had indicated earlier, there was a meeting with the delegation of the Provincial Government, COGTA, troika, and the Municipal Manager, where the discussion was centred around the action plan that was giving clearer timelines to say what was going to happen, at what time, and by who. There was the commitment to say that the matter would be taken to council to deal with. Initially, 15 December 2020 had been suggested but unfortunately this was not possible because council, was on recess and the municipality was unable to handle that. What could be equally shared was that, as the s106 was tabled to council on 31 July 2020, there had been processes to establish a disciplinary board which had indeed happened towards September 2020.

It could be confirmed that from deliberations with the Department it was evident that the current setup of the action plan would not give comfort to all role players to say that by a certain time a specific matter could have been resolved. However, it had been considered in the meeting and it was said that it should work and be revisited because there were issues that related to employees that might be beyond the control of Department. He said that perhaps it was under the control of council but not necessarily those who were directly appointed by council, and therefore, the action plan should also be covering those areas. The Municipality had then said that it should get the report and process it. On the relations aspect one could also share that the Municipality had come back on 5 June 2020 when it was reinstated. As of 10 February 2020 there had been the motion of no confidence that was taken against the Mayor and the Speaker. From that period up to the tabling of the s106 report, issues around the unprotected strike of workers, and the approaches that should be employed in managing the situation, one could fairly admit that there were relations which would not be hidden. However, with the support from various stakeholders beyond September, it could be fairly indicated what part of the challenges that were currently there might be centred around, as he was mandated by council to execute, particularly in this case where he was the face of the issues raised, in s106. Therefore, he said that it should never be perceived as though it was an individual act, which was something that had been explained so that it created an understanding.

He had raised issues with MEC Msibi as it related to the provision of VIP protection because there were constraints around those issues in which it was said that the Municipality really needed to be assisted so that it discharged the office responsibility at the maximum speed. Given the challenges, council was trying to interact. It could be indicated that when council had been visited by the NCOP, it was able to reflect that the challenges and tensions were also informed by the work that it found itself in where one needed to say how something had happened and why something had not transpired. These were the challenges that were admitted as happening. On the part of execution it had been raised that part of the constraints was the implementation of the Service Delivery and Budget Implementation Plan (SDBIP) and the issues had been raised with management. However, in terms of saying that there was heavy hostility where it currently stood, he thought that it had subsided very sharply. He admitted that there were serious tensions as the work was pursued and that along the way there would be issues of how to communicate it in order for there to be accountability to council in that the issues had been pursued and providing the feedback around it. This was because Government was being dealt with at some point and one really needed to show what actions it had taken to address specific issues; however, one would then end up resorting to correspondences to ensure that a clearer picture was created in terms of the issues that were pursued to address the issues at hand.

These factors could be indicated to say that the instability aspect, which should be raised, lead the council to be moved out for four months. From 5 June 2020 it could be indicated through the records of council, sitting of council meetings, sitting of the Mayoral Committee, and sitting of s80 committees, that while council had been engulfed with serious instability at that level, efforts had been made. The last council meeting had been on 2 February 2021 and before that there was a council meeting in December 2020, prior to which the last meeting was on 31 October 2020. Therefore, while at the governance level there were challenges in terms of strengthening the Municipality’s work, council had also realised that it needed to sit and deal with issues. The issue of s106 was an issue in the Municipality that was very emotive at some point because if the issue was propelled, one ended up being perceived as if it was pursuing someone when it was generally acting on the document. He said that the commitment to the issue remained, as the document would never be shelved. This was because the issues that were present required all of the officials to attend to them for the benefit of giving confidence to the consumers and public at large, in that the issues that were investigated and processed required the Municipality to show sign of consequence management. The Municipality had been receiving support from MEC Msibi, which it had been welcoming, and had to be grateful under the stewardship of MEC Msibi for giving the Municipality support and being forever willing to assist them.

There were issues that could be raised and it could be said that there were challenges. The Municipality was working with all of the necessary stakeholders to address them. The Municipality was mindful that the issues that it was dealing with should be beyond its individual personalities because it was dealing with the lives of their communities. The Municipality would be forever available to be helped and assisted, and where it was wrong it would equally admit and take responsibility. In this case, the Municipality was taking responsibility as there was a period between itself and the Municipal Manager where there were heavy tensions because of the work that it were pursuing. He admitted that after a thorough analysis, with the help of various stakeholders that were supervising Municipalities, they were able to come closer to say that they should focus on the work as they knew that one needed to account to another but what was required at that stage was to ensure that the service delivery and implementation plan was realised. The main weakness of the Municipality was the planning capacity, which was why the Municipality welcomed the interventions from MISA to assist them. This was because part of the delay in the implementation of MIG was centred around committees disagreeing on what should be done. For example, one would find that a particular committee would recommend something while another committee objected to the issues raised by the previous committee.

These were the contestations that were present and unfortunately council had decided to say that on the basis thereof it thought that it should pull other people out of the institution and seek a particular intervention. This was the drastic view raised by council. The Municipality then said that based thereon it should act in line with what council had pronounced. It was key for the Municipality to highlight that it was at the stage where it was trying to reverse the challenges. It was the last year of the term and part of the issues was that it handed over to the institution. As difficult or as weak as the institution currently was, he said that the Municipality should appreciate the challenges that it was dealing with and try to address issues in a manner that was going to assist. The provincial government support, provincial and National Treasury, and COGTA were mostly welcome. He thought that it was going to turn the corner working together with all of the structures because it was not about the officials themselves but about the Executive Mayor and Municipal Manager as the institution had to live beyond them. Indeed, the Municipality was in a difficult terrain but it was trying.

Mr Sam Ngobeni commented that the meeting referred to was chaired by Mr Sam Ngubane, the Acting HOD, COGTA: Mpumalanga, instead of Sam Ngobeni.

Mr Groenewald commented that Mayor Dhlamini was correct in that maybe MEC Msibi could then provide clarity to what had happened as the HOD should have reported the matter.

Mr Ngubane said it was exciting times for the Department to be part of a platform where it had to be able to account for service delivery and show what attempts it had done in terms of improving service delivery in the Municipalities. He stated that in the previous week the Department, as it always did with all other Municipalities, understood that it did not have any other platform available except for the virtual platforms which was an easier alternative over physical meeting. These meeting were always convened just so that the Department could check at which point the Municipalities were dealing with the implementation plan or action plan that the Department had put together just to get things done in terms of most of the things that had been highlighted as part of the discussions. There had been a bit of interruption during the previous week’s meeting because it was a meeting that was seeking to address all of the complaints that the communities had been having. This was because COGTA had been inundated as a Department in receiving a number of complaints and, at times, looking into the issue of sewerage, water, electricity, and roads as had been discussed.

The Department thought that it needed to look into s152(e), which was also about encouraging communities and community based organisations to come forward and see whether there could not be a collective plan so that they could address the issues. This was so that it did not become a matter that was really set aside for the Municipality to deal with it on its own but the Department had to be available to assist where possible as the three spheres of government had to work together in the spirit of addressing the service delivery issues. The Department would use the Committee’s links in terms of the virtual system and would give it to the participants so that they were a part of the platform for engagements. To the Department’s surprise there had been an interruption because some of the individuals had come through the links and there had been a cross exchange between the community based organisations that were part of the platform and those who were accusing them because they were not supposed to be there as they were claiming that they were politicians and that it should not be a part of the discussions they had. The Department had thought that the most possible thing was to collapse or close the meeting and actually schedule it for another day because its intention was to purely discuss service delivery issues. Politics aside, the Department did not want to discuss anything on politics but just wanted to ensure that it actually gave value to the things that had been bothering the people of Lekwa and the things that had not been moving in the plans of ensuring that the Department provided support.

All three spheres of government had been present, such as the National Department of Cooperative Governance, MISA, DBSA, and the Provincial Departments that were also hands on in terms of supporting in that regard. Unfortunately, the Department had been under siege because some people who were not supposed to receive the links had actually gotten into the meeting and there had been chaos. He explained that because of that the Department had thought that it was not prudent for them to continue and the meeting was then shut down. The Department would be rescheduling and he indicated that the matter had been reported to MEC Msibi, who would perhaps want to come into it. He said that it explained the intricacies and issue that MEC Msibi was explaining, in that perhaps all was not well and in fact there had been too much in-fighting. This hinged upon the issues of supporting the municipality and also ensuring that at least, if there was some good that could be done, the municipality could move forward with it. However, because of the in-fighting the Department got to receive or encounter such challenges in that regard. However, the Department would not be ending there because s154 and s155 of the Constitution, including s105 and s152(e) of the Municipal Systems Act, actually emphasised that the Department should always move forward in terms of the support that it provided. The Department was not deterred by the incident and would still continue to support the Municipality as such.

MEC Msibi said that the Department would continue to do its work. Firstly, the Department would continue to provide support as was required by the Constitution in terms of s154. Secondly, the Department was going to ensure that it followed up on the matters raised – in particular, in terms of s106(b), the Department was going to ensure that on the quarterly report it provided it to all relevant offices. This included the Office of the Premier so that Cabinet could appraised, as well as the NCOP, the Committee, and the Minister. Thirdly, where there were delinquents the Department was going to act concisely. Fourthly, the Department wanted to request that those who were given the responsibility to head had to lead. Further, those who were required to provide services to the people and were getting a salary off of it had to do so. If everyone could focus and spend time on what needed to be done, things would be simpler for the people. This was because when two bulls were fighting they had to the grass would suffer. In this case, the grass was the people of Lekwa, the farmers, the people who were in business, and also the people who were suffering. He wanted to ensure the Committee that the Department would keep on working without fear or favour and would ensure that the people of Mpumalanga, Lekwa Municipality, and all other Municipalities had services.

The Chairperson asked the Executive Mayor to respond to the issue as raised by MEC Msibi. She added that herself and the Committee would be failing to do its oversight duty if they did not get clarity on what was happening in the matters. There was an issue that MEC Msibi had reported during the s106 investigation, which was the councillor who used Municipality resources to drill a borehole for himself whereas the communities did not have water. It was reported that, when it was brought to the attention of the Department and, as the investigation was proceeding, the member had decided to take a truckload of sand to close the borehole. However, as the investigation was being done, the borehole was still present and she thought that the service provider went and showed the borehole in the councillors’ house. She told the Executive Mayor that the issue in the Municipality was that it was very quick to deal with officials. When it was councillors involved there was laxity. She wanted the Mayor to tell the Committee what had happened to councillors and what had been done to recover the money. Was the councillor still an employee of the council and executing his responsibility whereas the Municipal Structures Act, Municipal Systems Act, and Code of Conduct for councillors was very explicit on what was happening and what had to happen. What was the status of the disciplinary procedures to the council? The Committee needed to get that information so that the next time it followed up it knew where council was in terms of dealing with the matter. She asked if the Speaker was present as the custodian of the Council Code of Conduct.

Mayor Dhlamini said that fortunately in his last interaction he was part of the meeting in September. He thought that the incident was in Dr JS Moroka, and was glad that currently, this incident was no longer present.

The Chairperson apologised as she saw that it was part of MEC Msibi’s presentation after all and that earlier she had then taken a decision to focus on Lekwa because Dr JS Moroka was not present. She said that the matter would be addressed with Dr JS Moroka. She said that if Members did not have any burning matters that they felt needed to be addressed, then the Committee would be meeting the following day at 09h00 and then had another matter after the State of the Nation Address debate at 19h00. The Committee had already exceeded the allocated time but she said she did not mind for them to proceed if Members wanted the work to be done.

All Members agreed that they were covered.

The Chairperson reiterated that the Committee appreciated MEC Msibi being present as his child was sick but he was with the Committee when he should have been taking care of his child. The Committee had never had issues with MEC Msibi when it meant him coming to account to the Committee. She wished that his other colleagues could learn the best practice from him and sincerely appreciated him. The Committee encouraged him as he had said when he was closing his response, to just do his work without fear or favour. In other instances it was found that when an MEC was supposed to act they did not so. The Committee wanted to encourage him to continue doing what he was doing as legislated by the Constitution. She said that the documents on the petition were thick but Members were still going to read.

The meeting was adjourned.