Frances Baard District Municipality: state of municipality

Meeting report

Opening Remarks by the Chairperson

The Chairperson welcomed all present at the meeting and made brief opening remarks.

The Chairperson said that the Frances Baard District Municipalities have progressed. For instance, Dikgatlong Municipality received a disclaimer for two consecutive financial years in 2017/18 and 2018/19. It has progressed to a qualified audit in the year under review. While this was a great improvement, the municipality still fell short of the accounting excellence which communities demand. The good progress of the local municipalities was commendable given that some key positions were vacant. Sol Plaatjie has had a qualified audit opinion for the past three financial years. This has been due to the municipalities failing to meet its commitments.

She handed over to the Northern Cape Cooperative Governance, Human Settlements and Traditional Affairs Department (COGHSTA) for the briefing on the state of the Frances Baard District Municipality and its local municipalities.

COGHSTA engagement on the state of Frances Baard and its local municipalities

A representative from COGHSTA presented to the Committee on the current position of municipalities and its audit outcomes. He said that municipalities need to up their game. Some municipalities are not spending on MIG (Municipal Infrastructure Grant), which is unacceptable. Technical vacancies should be filled for municipalities to be in a better position to spend on MIG. Councils should also play an oversight role. A number of municipalities are struggling with infrastructure, but they are being assisted to improve. There should be clean audit reports. Operation Clean Audit would ensure that the necessary support is given to municipalities.

A representative from COGHSTA presented to the Committee. Phokwane Municipal Councils was placed under administration since 2019 and was dissolved. By-elections were held in November 2020 and a new municipal council was elected. The triggers that necessitated the intervention are being finalised.

Provincially, 75% of posts have been filled; 26 were filled in Frances Baard and only 11 positions are still vacant; women filled 25 positions in the Frances Baard District. Polokwane advertised four vacant posts and the closing date was 12 March 2021.

Municipalities have been assisted by local government elections and have been alerted of the terminations of senior managers for key vacant positions to be advertised. Dikgatlong has been ahead of other municipalities by appointing senior managers on a permanent basis, which brings stability.

Other assistance measures to municipalities include presentations of regulations and non-compliance, engagement on vacancies and measures to address this, and assistance and monitoring on implementation of timeframe schedules for appointments of senior managers. Prototype staff establishments, staff regulations, performance management and remuneration of senior managers versus waiver applications have been finalised.

The province became concerned about its MIG being unspent. The Department has interacted with and is supporting local municipalities on a daily basis through the APP (annual performance plan) and AOP (annual operating plan). The Northern Cape MPU (V3 Consulting Engineering Company) was appointed to increase the capacity and support COGHSTA AND DBSA in the Northern Cape.

The PMU (project management unit) will assist the Department to support and consult municipalities to improve service delivery and infrastructure development. The PMU has a multi-disciplinary team of professionals available to all municipalities in the province. The services offered include: Electrical Engineers, Town Planners, Spatial Developers, GIS, asset Care, Project and Programme Management and Safety and Environment and Construction Management.

The municipalities’ total expenditure was expected to be at 40% by the end of December 2020, but some municipalities struggled to reach this target. About 50.59% of its Percentage of Transfer was spent and 31.48% of the Percentage of Allocation was spent. (See presentation slides for month-to-month expenditure per municipality). Dikgatlong only had 1% expenditure but increased this to 4.61% by the end of December 2020. The municipality said it was unable to report on its quarterly performance, as the quarter had not yet ended. The current expenditure as at the end of January 2021: Dikgatlong at 9%, Magareng at 0%, and Phokwane at 53%.

There have been challenges between the municipality and SANRAL on its agreement. SANRAL refused to authorise the municipality to attach water pipelines on the bridge to get water to residents. Engagement on this has commenced.

Eskom and Phokwane have entered into an agreement on payment of arrears. Discussions are ongoing, but payment levels are improving. Sol Plaatjie has experiences issues in repaying its debt. It has engaged with senior management at Eskom on this. Dikglatong does not have a repayment plan. The Sheriff has listed its assets, but the assets have not yet been removed. Magareng has made a payment of R1 million to Eskom and has a payment arrangement in place.

V3 has assisted Sol Plaatje, Phokwane and Magareng with revenue enhancement and its Water Services Development Plans. MISA has also played an integral role and are the lead engineers in the SANRAL issue. All municipalities have received assistance with their IDP reviewing process. Draft reviews will be tabled on or before 31 March 2021.

The Frances Baard DDM forum is now functional, as COGHSTA has provided secretarial support to it. The PMS Policy Frameworks of Sol Plaatje, Frances Baard, Phokwane and Magareng have all been approved. Dikgatlong has not yet submitted a performance agreement, but there is engagement with the municipality.

Municipalities have been reminded to table their annual and oversight reports by 31 March 2021.

The promulgation of the levying of rates is required for a municipality to levy property rates. Magareng and Phokwane complied after the due date. Dikgatlong has not complied, but support is being provided.

The general challenges experienced by municipalities and support given to them include: incompliant municipalities being provided with pro-forma resolution templates, reminders were communicated on time for new General Valuation Rolls (GVRs), non-submission of Performance Agreements, non-tabling of annual reports and oversight reports by some municipalities and non-response for requests of information by some municipalities. A new Valuation Appeal Board (VABs) was selected. He noted that the majority of applicants were white males.

On CWP (Community Work Programme) participation, some participants were removed from the list until they verified their details to ensure no ghost workers employed on the system.

The GovChat platform is used by the National CoGTA to identify service delivery glitches in municipalities. The top five service delivery issues are Illegal connections, electricity disruptions, sewage, water leaks and potholes.

Presentation by Provincial Treasury

A representative from the Provincial Treasury presented to the Committee about the MFMA (Municipal Finance Management Act) compliance matters and the Provincial Treasury interventions In Phokwane, Magareng, Dikgatlong, Sol Plaatje and Frances Baard Municipalities.

Phokwane falls under the definition of a distressed municipality. The institutional issues are about appointments of top structures and institutional memory. The municipality is also in distress with governance and service delivery.

There are currently no performance agreements. Phokwane will change its financial system, which may result in further complications in the municipality. Phokwane is faced with a number of litigations. Government finances are concerning as it is expected for municipalities to have a collection rate of above 95%, but Phokwane’s collection rate has deteriorated from 48% to 32%. This has been attributed to the COVIC-19 pandemic. Debtors are not paid within 30 days, which means that the rate at which funds come into the municipality is quite slow. A cost-coverage ratio of below the norm of one-three months has been reported. This means the municipality does not have sufficient funds to cover operational costs. The municipality has been unable to spend its conditional grant.

Creditors’ management has improved due to support from COGHSTA. There is a lack of skills in the technical department and some of the management tools that are available have not been adequately utilised. The municipality has improved on submitting information on time. An unfunded budget has mostly been tabled by the municipality and reports have been submitted late. Revenue management is inadequate and way below what is expected. Financial statements have also been submitted late. There is a backlog as the AG is preparing 2018/19 statements for the municipality. The 2019/20 financial statements, outcomes and audit action plan remain outstanding. There is concern over the municipality not compiling audit action plans.

Unauthorised fruitless and wasteful expenditure have increased. The only challenge experienced by Provincial Treasury is that some information has not been received, given the challenges municipalities are experiencing with their financial systems. The district municipality has an accounting officer and senior managers cannot be verified to meet the minimum competency as the documentation required has not been received. The Provincial Treasury has assisted the municipality with the development of the financial recovery plan, billing, the Data Integrity Model and resolving government debt. Municipal Asset policies have been reviewed and aligned with SOPs (standard operating procedures). The UIFW reduction policy has been finalised. Awareness has been raised about consequence management and workshops have been conducted. The municipality has been given feedback and support has been given on audit outcomes.

Magareng Local Municipality

The municipality is also in distress and service delivery remains a challenge. The financial recovery plan has not been implemented. The posy of technical director and community service remains vacant. The mSCOA needs urgent attention.

The financial governance of the municipality and its collection rate has deteriorated and the municipality tends to be more dependent on grants. It has used its capital grant to fund its operation, which is a serious concern. The cost-coverage ratio has remained below one-three months. This has been the case for the past three years. The municipality is at risk based on these indicators. The net debtors have increased over the years.

The municipality has been adopting an unfunded budget, which means the budget presented is not a credible report. Reports have been submitted late. The municipality faces a liquidity problem. Most grants have remained unspent.

The municipality did well in submitting their financial statements in 2017/18 and 2018/19. In 2019/20 the statements were submitted late and a negative/qualified audit outcome was received. The municipality awaits a finalised audit outcome from the AG for the 2019/20 financial year.

The UIFW increased, but there is no supporting documentation and reports for this, which affects consequence management.

Some senior managers have not been compliant, but most have been relatively compliant. Magareng has been assisted with reviewing its risk register and comparing this with risk management documents. Officials have been trained and guided on this.

Dikgatlong Local Municipality

The municipality is also distressed and has a high vacancy rate. The CFO post has been vacant for a long time as the CFO has been on special leave for a long time. The municipality is trying to fill all vacant posts. There have been challenges in implementing the financial recovery plan and there is a high reliance on consultants given the high vacancy rate. The collection rate is at 20%. Creditors are not managed effectively and there are no approved repayment agreements, particularly on creditors. The municipal budget is unfunded. The mSCOA has not been 100% implemented. The municipality has received a disclaimer for the past two years but has shown improvement by moving to a qualification. Service delivery is a challenge given aging infrastructure and protests due to lack of services. Water distribution losses have increased from 14% to 18%. Electricity losses increased from 29% to 36% in the same year.

The municipality has managed to table its budget on time, but there is concern over its credibility. The UIF and W showed a slight decline compared to 2018/19. An investigation was done to write off R21 million, but National Treasury has not received any reports on this or any consequences of this reduction. Some work and reports have been provided on irregular expenditure due to non-compliance on prescripts related to SCM (supply chain management). Performance agreements were entered. Training was provided to the Head of the SCM unit for capacity building given compliance challenges. Training was provided to the disciplinary board. The Risk Management Committees were there but were not functional. The financial health of the municipality is on the decline.

Sol Plaatje Local Municipality

The municipality was unable to pay its Eskom debt. Service delivery is declining. The collection rate of the municipality is on 70%, below the 95% norm. Its ‘net debtor days’ have been declining, showing that it struggles to collect long outstanding debts. Debt coverage is over 90 days. Cost coverage is below the norm of one-three months showing a lack of funds. Creditors are paid within 115 days as opposed to 30. There is no spending of conditional grants. Water and electricity losses remain high. Sol Plaatje’s water loss is at 60%. Electricity losses are at 18%. This will cause the municipality to rely on grants for its operations. The municipality is compliant with budget management and reports and submission of its financial statement and audit action plans. The National Treasury has provided audit support and feedback.

Frances Baard District Municipality

The municipality is doing fairly well. It has received a good audit outcome. Three of six senior managers are in acting positions and the positions have not been filled for quite some time. The mSCOA has progressed well in the municipality, but it has indicated that it may want to change its system. The use of consultants has been reduced. Most capital projects were 100% spent. There is a good cash cost-coverage and creditors are paid within 30 days. The municipality has been able to assist the four local municipalities with repairs and maintenance. There has been a 100% spending on grant funding by the municipality. The municipality received a clean audit after being stagnant for a number of years. There has been no irregular or unauthorised expenditure. The disciplinary boards are functional, but the reports are not necessarily available to the National Treasury. There might be some consequences as the municipality has dealt with all unwanted expenditure decisively. The municipality has done well on its submission of reports, except for its December 2020 report, which remains outstanding. The Accounting Officer meets all requirements, but there is a challenge with acting senior managers. The mSCOA training and feedback have been provided. The National Treasury has assisted with SCM specifications, particularly with the banking tender, asset register and audit assistance.

If municipalities continue with non-compliance on budget management, they may need more interventions at the municipal level. Most decisions taken by council are not informed given information that is not up to date. Non-compliance will lead to an increase in UIFW and the inability to attract investment opportunities in municipal areas. The repayment of unspent national grants to the National Revenue Fund will be offset from the equitable share and will hamper infrastructure development.

Briefing by the Department of Cooperative Governance (DCoG)

The provincial Department said COGHSTA and the National Treasury has already covered most of its presentation and that the Department would make brief points on its observations and its work with COGHSTA on some of the governance challenges. The District is generally very stable and was able to offer assistance to local municipalities. Dikglatong experienced a number of service delivery protests over the last few years. There has been provincial intervention leading to mayoral change. There may still be challenges with the director posts for technical and community services. Phokwane is taking small, but significant steps toward normalising. He noted that it would take a long time to see a convincing improvement from the municipality. There is concern about Sol Plaatje’s performance as a secondary city. There are internal political challenges between the municipality and the community. Service delivery and infrastructure are a challenge across the board. The state of wastewater facilities was concerning. The quality of water in Sol Plaatje was questioned. He explained that when floods occur, rivers are contaminated in the district. The municipality is required to pump out and treat a certain level of water. This requires extra energy and resources and is always a challenge. He said that government must prioritise wastewater facilities.

There has been increased with municipal infrastructure. The community, on the southern side of the N12, has been prevented from receiving water due to the SANRAL issue and there is engagement on this. The local municipalities have been provided with funding to support wastewater. In August 2020, the Premier convened all the Champions that have been assigned to the Northern Cape. There has been proper briefing of Champions, Executive Mayors and Heads of Department of all districts on the District Development Model and their specific roles as political champions. Spatial development issues have been reprioritised and will be expressed in the One Plan. This will include accelerating the upgrading of informal settlements, bulk infrastructure planning, development and maintenance, regeneration of townships through the precinct development initiatives and upgrading water treatments to prevent the overflow of sewer. Economic enhancement and revitilisation zones will be focused on in the province. Local governance and fiscal sustainability will also be a focus within the district. The One plan will also facilitate protection of rivers and issues around mining projects. The rehabilitation of former mining areas is also a focus as mining activity has declined.

The agricultural industry and game farming will be a focus in Magareng. Social labour plans of mining companies will be checked for compliance and implementation. The Vaal Haarts Irrigation Scheme will need to be expanded and cultural related industries will be looked into.

MISA (Municipal Infrastructure Support Agent) has supported four municipalities and a civil engineer has been deployed to assist Phokwane and Magareng. CoGTA engages three times a year on MIG and to ensure that municipalities comply with expenditure of grants. He admitted that the initiatives did not always produce the desired results and the final decision was with the municipality.

On Section 139 interventions, CoGTA is still assisting the province with its litigations. DCoG has assisted Sol Plaatje and it has received R2.9 million from the Integrated Urban Development Grant for 2019/20. CoGTA is also providing assistance on disaster management. Committees have been created to assess the damage on municipalities and assign responsibility to specific sectors. Mud houses are a challenge in some districts. The district does not have a disaster management centre, but something temporary has been set up and is manned by capable individuals.

SALGA presentation on Frances Baardt District and its local municipalities

Cllr Jan Petrus Julies, Northern Cape SALGA (South African Local Government Association), briefly commented that he thought SALGA was able to assist Municipalities in the province to adhere to audit action plans. He handed over to Ms Marilyn Brown, who presented to the Committee.

Ms Brown, SALGA, said that there was a national partnership between SALGA and the UNDO, where several SMMEs (small, medium and micro enterprises) were supported to produce 5 502 masks for distribution in the district. Dikglatong and Magareng Municipalities were assisted on the development of transport and roads bylaws. Phokwane, Dikgatlong and Magareng were assisted with waste management plans. Sol Plaatje has received assistance on the rendering of environmental health services. Training on reconciliation and arbitration has been rendered. SALGA regularly participates in IGR (Intergovernmental Relations) and Councillor welfare programmes such as training, induction and rapid response task teams. SALGA continues to lobby for municipalities based on the needs they identify. The association notes service delivery protests and infrastructure issues. Gender representation in senior positions is still lacking and vacancies are an issue. A new electoral cycle will take place by the end of 2021. There needs to be synchronised systems to ensure coordinated state machinery.

Discussion

Mr C Brink (DA) asked about the province’s obligation to intervene in municipalities, while it could not fulfil its executive obligations. He referred to the issuing of notices to the executive council. What notices has the provincial executive issued to municipalities in the Frances Baard District and which municipalities have defaulted on their obligations? Diktalagong breached on performance management agreements. Have they been engaged on this?

The Provincial Treasury referred to capital grants to fulfil operational expenditure. This is not what capital grants are intended for. What consequences are there for this? Have steps been taken? Or is this one of those instances where officials speak to each other, but councillors are excluded? There was an indication that of a CFO vacancy that cannot be filled. This is given as a reason for non-compliance. Has the Provincial Treasury offered to transfer an official to act in the position of CFO? If not, why not? There is a CFO on special leave. What does this mean, as no such provision is made for a senior manager in terms of the Systems Act? Has the person been suspended and if so, why has the Municipal Council not dealt with this in terms of the relevant statutory framework? Have any directives been issued on obligations for the municipality?

The MEC has an obligation to monitor compliance of senior managers. He or she should account for this when people have been found to be unqualified. The law does not allow for unqualified people to be appointed and trained into the position. Corrective action must be taken. Section 106 of the Province Act permits investigations into municipalities. How many investigations have taken place on this, and tender irregularities in Sol Plaatje in particular? Has there been feedback on this? Does the MEC use contractors as a substitute for making appointments? Has Frances Baard taken any steps to help local municipalities that cannot recruit a CFO or do not have engineering or project management capacities? If it cannot do this, the substantial amount it spends on salaries is useless.

Mr B Lenkoe, HOD, Northern Cape COGHSTA, said there was confidence that the Section 154 support to municipalities was working. A section-106 investigation was conducted and Council must establish whether the MM (Municipal Manager) must be charged. As of February 2021, the attorney indicated that the matter was postponed. The Phokwane investigation was tabled to Council and the Sol Plaatje investigation was dealt with. The PMU is not about taking over services. It intends to capacitate staff to assist municipalities. This is not to avoid appointment through outsourcing; it is simply to increase capacity.

Mr K Ceza (EFF) said that water loss was a cause for concern, as well as the pipeline backlog. He referred to unpaved roads and how the state could not eradicate this due to a lack of capacity. What measures has the district taken to reduce and address the infrastructure backlogs in the District? A municipality must recover fruitless and wasteful expenditure from the person liable for it. He asked who was responsible for this and what actions are taken against those responsible.

He then referred to the heavy reliance on consultants for vacancies. Why does the municipality not attract the necessary skills? Is it because it is a rural municipality? What has been done to advertise these posts? Given the AG findings on water losses and non-revenue water still being high, there is a lack of required skills. What actions has the district taken to ensure local municipalities harness these skills and insource them?

There is a lack of direction on economic development and state capacity keeps deteriorating. What economic and industrial development measures are being taken? What ideas are there around industrialisation? What are the cost estimates for a fire station in the District? There is only one fire station in Sol Plaatje. Does this fire department address poor funding, under-resourcing and understaffing, poor monitoring and compliance with bylaws? There are low levels of professionalism and strategies and plans related to fitness training and risk management. Is the Department capacitated to cover all four municipalities? What measures will inform the direction towards improving the situation. He was concerned about the unemployment rate and general economic development and state capacity. What actions are in place to provide for industrial opportunities? The youth are unemployed from 19 years old and poor households live below the R5000 bracket. What mitigation measures will be put in place while the industrialisation plan is created? There were no opportunities for the youth. What is the plan to ensure the youth is capacitated? The danger is to render youth idle. They need to be put into scholarship programmes and go to countries where education is free. The youth must be active.

Mr Lenkoe said that there is no provincial disaster management centre. The disaster needs activation of all resources. Municipalities have been given guidelines and letters have been sent out. The District Mayor and MM’s will need to employ certain structures to deal with protests. Ward Committee reports must find expression in Councils. SAPS (South African Police Services) will also inform us through intelligence reports.

Ms E Spies (DA) said that the Members did research on what is happening on the ground. They receive pictures and do on-site visits. What is happening with aging infrastructure? Apparently, there are nightly water cuts and a sewerage dam has formed outside of the city. There have been excessive water leaks. Where do the water losses come from? The clarifiers at Riverton are not working, which poses a huge health risks. How are these things being mitigated? Can the Provincial Treasury appoint someone instead of consultants? What has been happening with the employee on special leave? What is the acting person being paid and what is the status of the disciplinary process?

She was shocked to hear a capital grant was used on operational costs in Magareng. Why is the approval of budgets always late? Why is there no public participation on the budgets? There is a general lack of management capacity, skills and political will to fix things. It is unacceptable to have 23% of women employed. This is serious and must be addressed.

Mr Lenkoe said that the acting employees earn much more than senior managers and supervisors. This deters senior managers to leave the positions. The CFO is a permanent employee, and there are contractual appointments. Once this has been resolved there will be sufficient capacity in municipalities. Women are encouraged to apply and the EE plan is in place. Ms Busi Mgaguli, Director of Municipal Finance, ProvincialTreasury, said an Acting CFO was appointment and the Provincial Treasury simply needs to support the appointed official on matters relating to Municipal Finance. Municipalities are having cost reflective challenges with its tariffs. They sell electricity at a loss.

Ms D Direko (ANC) said that some municipalities were adopting unfunded budgets and not implementing plans. What is the National Treasury doing about this? Is it implementing consequences?

She asked why there were MM and CFO vacancies. Why are consultants used to transfer skills to the Municipality? Are there positive stories on this? Dikgatlong is technically bankrupt. Is there a revenue collection plan and what are the challenges for this? What is the current state of MPAC and does it have capacity? Are reports implemented in Council?

The vacancies in Frances Baard and Phokwane were as a result of intervention. She hoped that the vacancy rate of 80% would become zero and vacancies would be dealt with except for the MM vacancy.

Ms M Tlou (ANC) said that there was no information on the contravention of supply chain management on the annual financial statements. This resulted in understatements. What has been done to address this? What system is in place to prevent accepting quotations from those employed by municipalities and connected to state employees? What measures have been overtaken for oversight to ensure that there are complete oversight reports? Dikgatlong has addressed its audit issues; it has failed to address findings on material misstatements on revenue. What is the challenge on this?

What progress has MPAC made in investigating unauthorised, irregular, fruitless and wasteful (UIFW) expenditure during 2018/19 financial year? Has the Council adopted investment policy and has it complied with this? What has prevented the municipality from addressing the repetitive audit findings over the last four financial years? What action is taken on managers not having the correct qualifications? Given the regression of Phokwane’s audit outcome from a qualification in 2018 and 2019 to a disclaimer, is the administrator still confident that a great job is being done to turn the municipality around? Why has the municipality not investigated allegations of misconduct against employees?

Ms P Xaba-Ntshaba (ANC) asked how the national disaster management was assisting the district on the lack of funding for this function. What action is the municipality taking on middle managers that do not have the required qualifications?

An official replied that reports indicated that senior managers do have the correct qualifications, experiences and competencies. The former MM of Phokwane and the Director of Corporate Services in the Frances Baard District had to undergo competency assessments.

Mr G Mpumza (ANC) said he was concerned about the underspending of MIG and protests. Frances Baard has a high vacancy rate at senior management level. Why are these municipalities unable to fill the position to render effective service delivery? There are disciplinary processes for maladministration, but officials have been placed on leave since October 2018. Where is the oversight and accountability? A number of municipalities adopt unfunded budgets. Are there no skilled and competent officials to advise on this? This contravenes regulations by the National Treasury. What consequences management is there for this? The MIG was not spent to 40% as required. He noted the dispute between SANRAL and the Municipality and asked if this dispute was only about pipes and how is this being dealt with. What measures are taken to address the underspending of municipalities and prevent residents from protesting? Municipalities are dishonest toward creditors. Why should municipalities be forced by a court to pay creditors? What measures have been instated for the PMU and to increase capabilities? How do COGHSTA and CoGTA contribute to developing skills?

Mr Lenkoe indicated that SANRAL has accepted the request for the municipality to place water pipes. There is a memorandum of understanding between the Municipality and the National Treasury and it assists municipalities with debt to Eskom and its water bills. Operation Clean Audit will assist the district municipalities. A meeting was convened on the day before this meeting to arrange a way forward.

Ms Busi Mgaguli, Director: Municipal Finance, Provincial Treasury, said that unfunded budgets would be addressed through engagement with Municipalities. Pre-assessments for compliance are done. High creditors cause most issues on unfunded budgets. Municipalities were assisted with cost containment and poor collection of revenues. This causes cash flow issues. The Treasury’s understanding is that Council was trained on issues relating to budgets. Municipalities are struggling to implement financial recovery plans. The Treasury has advised on the actions that need to be taken. Municipalities must implement credit control to improve cash flow and implement the necessary activities. There has been analysis of spending and recommendations have been made to municipalities. Municipalities take long to implement credit control and tend to do this when Eskom threatens to take action. They are trained in their committees on supply chain management processes. MIG is often not spent, but Municipalities receive training on this. If conditional grants are not spent, the money must be returned. Municipalities should be accountable enough to spend their grants to prevent an off set of the grant by the National Treasury. She stressed that Municipalities must spend its grants even if they overspends.

A representative from Sol Plaatje Municipality said its performance was not as expected. A cost containment plan has been adopted to ensure a fully funded budget. The CFO, Mr Christian Mokeng, said that most misstatements indicated by the AG were addressed. Transgression of SCM was due to the deficiencies in the organogram. The MPAC has deliberated on this and it has been referred to Council to decide whether there should be an investigation. MPAC has made recommendations on irregular expenditure. UIF matters will be attended to properly and regularly. Performance agreements were signed by senior managers and given to COGHSTA. The revenue collection is inadequate but was affected by COVID-19. A revenue enhancement plan and installing new meters as well as responding faster to consumers will be implemented.

MM Ms Baki Tsinyane said the organisational structure was reviewed and an engineer was employed to assist with the technical plan.

The Chairperson thanked all present at the meeting and said that the meeting would reconvene at 19:00.

The meeting adjourned.