Chairperson, I am ready for your call, as a cadre that is always ready for combat. As a choir conductor, I am standing in front of you today to give you a report regarding the harmony of the choir across the length and breadth of this country. [Laughter.]
We have taken a bold and decisive step on the decision to embark on a campaign called Operation Clean Audit 2014. This campaign is part of a broader clean-up campaign, which is aimed at ensuring that we are able to move forward as a country. It stands on four legs. The first leg is Operation Clean Audit 2014.
The second leg is clean cities, towns, townships and villages. This campaign is aimed at ensuring that we turn waste into wealth; that we call waste a raw material and not waste.
The third leg is debt collection, which is aimed at ensuring that this country will mobilise its people to be good citizens. Municipalities, as we speak, are owed over R53 billion. Our people are in the debt traps of loan sharks and that is why we are saying that our people must be able to manage their debt and that government is able to pay municipalities. The last leg is infrastructure backlogs and local economic development. Every municipality in South Africa must be able to do an audit around service delivery backlogs and they must also be able to quantify these backlogs. That is what we call, overall, a clean-up campaign standing on four legs.
Operation Clean Audit 2014 will certainly contribute to building a clean government. This campaign pierces the heart of corruption, fraud and mismanagement in terms of finances, and at the same time it is able to free up financial resources for service delivery.
We are counting on you, as an important institution, to represent our people. We will also ensure that, as we go forward, we report on the road we have traversed and the programmes ahead.
We launched this campaign on 16 July 2009 in Boksburg, Ekurhuleni Metro, in the Gauteng province. Among the people who attended this campaign were members of this august House, members of the NCOP, provincial legislatures, premiers, MECs, HoDs, individuals from the private sector, government officials, some Cabinet colleagues, auditors-general, accountants-general, etc.
The launch was the beginning of the end as far as disclaimers, adverse opinions, and qualified audits in provinces and municipalities are concerned. The goal that we have is that by 2011 there should be no disclaimers or audit opinions.
Chairperson, may I ask the Minister a question?
Are you willing to take a question, Minister?
Chairperson, I will. At the end of my speech I'll be ready for you, Mr Davidson.
By 2014 there should be no municipality or provincial government department that has a qualified opinion. [Interjections.] That means we must have a clean audit across the country. [Interjections.] This pledge that I am talking about today is a pledge that has eluded us for the past 15 years.
To this effect, we launched this campaign in the North West on 11 September. We will be launching it in Limpopo on 23 September and also in Gauteng on 15 October. All other provinces must launch this campaign before the end of November this year.
Let me tell you a story about the Western Cape, colleagues. The Western Cape, as a province, launched our campaign in secret. [Interjections.] [Laughter.] The Western Cape stole our idea and implemented it without acknowledging or recognising its owner. [Interjections.] What is it called when you take someone else's idea and make it your own without ensuring that you acknowledge the owner of that idea? We have a patent right on this campaign and the idea around it. [Interjections.]
Order, hon members!
We want to tell you that the Western Cape itself says that it launched Operation Clean Audit 2014. They are stealing our ideas without acknowledging that they have taken our ideas. [Interjections.] What is that called?
You are here to judge. In this campaign you can see that it has a vision, a goal, a purpose and at the same time some milestones. We are putting ourselves in front of you to say that you must judge us on the clear objectives that we are setting up in front of you today as South Africans.
The question that we must ask ourselves, when we talk about this vision and this goal is: Where are we? Let me analyse the Auditor-General's reports of 2006-07 and 2007-08, which read thus in terms of municipalities. There are 283 municipalities in South Africa. In 2006-07 disclaimers were at 105, which is 36%, and they decreased to 90, which is 31% in the 2007-08 financial year. Adverse audit opinions decreased from 21, which is 7%, in 2006-07 to 10, which is 3%, in 2007-08; qualified audit opinions decreased from 82, which is 29%, in the 2006-07 financial year to 63, which is 22%, in the 2007-08 financial year; financial unqualified audit opinions with matters of emphasis increased from 79, which is 27%, to 122, which is 42%, in the 2007-08 financial year.
Financial unqualified audit opinions with no maters of emphasis - that means with a clean bill of health - increased from three, which is 1%, in the 2006-07 financial year to six, which is 2%. That is a 100% increase in 2007-08.
The provincial departments and their entities have shown a steady increase in terms of the management of their finances. The statistics are as follows: disclaimers decreased from four, which is 3%, to three, which is 3%, in 2007-08; adverse audit opinions decreased from three, which is 2%, in 2006-07 to two, which is 1% in 2007-08; qualified audit opinions decreased from 56, which is 47%, in 2006-07 to 38, which is 32% in 2007-08; financial unqualified audits increased from 50, which is 42%, to 69, which is 58%; financial unqualified audit opinions with no matters of emphasis have increased from six, which is 6%, to seven, which is also 6%. That is the picture that we have and that is where we are as we speak. And we have outlined a vision for where we want to be.
The question then is: What is your role as Members of Parliament? What I am saying here today is that I am throwing down the gauntlet and that, in your area of responsibility, you must be able to ...
Chairperson, on a point of order: The hon Minister has said that he is now going to tell us what our role as Members of Parliament is. I wonder if he could just give us those statistics again, so we will be clear as to what the problem is.
You will get them in the Hansard, hon member. Hon Minister, please continue.
What I am saying, Chairperson, is that, as Members of Parliament, it is quite important that in our municipalities we ensure that the structures are in place to ensure that the resources given are used properly. At the same time we are saying that you must make sure that in your areas the provinces are able to account for resources. You can't come here and be involved in howling without playing a constructive role in ensuring that the country moves forward as one. We are calling on you to rise above howling and rather contribute positively. [Applause.]
No situation is just gloom and doom. There are a number of provincial departments and municipalities that are doing very well. There are best practices out there and we have used these municipalities and provinces that have consistently achieved clean audits to assist in other areas and share their experiences.
You cannot have a situation where you have an island of good practices or best practices, surrounded by a sea of wrongdoing as you go forward. Therefore, we are saying in this situation that this will be turned around and we are making this groundbreaking announcement and saying that we should move forward together.
These municipalities are applicable across all parties, including the DA municipalities. Even they are having serious problems, if you care to know about it. Therefore, there are no angels. [Interjections.] We can give you the statistics. There are no angels in this case. [Interjections.]
By 28 September we will be part of the Annual Conference of Public Accounts Committees, Apac, organised by this Parliament, when we will be making further groundbreaking announcements. Equally, on 7 October, the parliamentary committees will be coming together and we will be giving a report on the issues surrounding audit opinions, because we believe they are important.
We will be visiting all provinces with my colleague, the Auditor-General of the Department of Public Service and Administration from 30 September to 30 October and we will be going to those areas with accountants-general. We are saying, "Woza 2014!" [Come on, 2014] We shall win this battle in the interests of our people. We are saying victory is certain. I thank you.
Minister, don't move! Remember you said you will take a question from the hon Mr Davidson?
Chairperson, I can assure the Minister that it is a very simple question and I'm sure he does know the answer, because he had lots of undertakings and targets set.
The question is purely and simply this: What is the sanction that will be applied if those targets are not met? [Interjections.]
Chairperson, sanctions against whom? What we will be doing with people we have committed ourselves to is that we have agreed that these issues are going to be part of the performance contracts in terms of the accounting officers at municipal level. Therefore, people who were supposed to do the work are going to have to ensure that they do what is required. If they have not performed, they will not get performance bonuses; and if they get bad audits or opinions in consecutive years, they will be dealt with. [Interjections.]
In that respect, we are saying that from our side we are committed to ensuring that the correct things are done. You are supposed to be joining us in ensuring that we build the country together, because even here in the municipalities of the DA, we are going to be cracking the whip if things are not going satisfactorily. Thank you. [Applause.]
Chairperson, this is a good initiative by the Minister and his department, and it is a good thing that he comes to Parliament to announce it here where we can debate it. However, the hon Minister was a bit out of tune regarding the Western Cape.
On 20 August he said here in Parliament that 86% of the DA-controlled municipalities in the Western Cape did not hand in their books to the Auditor-General, but it only had to be in at the end of August. I believe, at that stage, 100% of the ANC municipalities hadn't handed in their books! [Applause.] I have checked and, as we stand here today, only two DA- controlled municipalities in the Western Cape haven't complied.
I would to like to ask the Minister why this initiative is necessary. It is actually an acknowledgement that the closed patronage system of cadre deployment of the ANC is a failure. [Applause.] It is easy to be ideological and implement a policy whereby only comrades are employed, but policies are always tested by reality, and reality will show which will endure and which are flawed.
The Minister has to come up with this initiative to try and rescue a desperate situation. He gave us the percentages here; 14% of municipalities didn't even submit their books for an audit. Only 33 municipalities were given a clean audit. At any given time more than 12% of chief financial officers' positions are vacant, some for months, because ANC-controlled municipalities can't find a comrade that is remotely suitable for the position and they don't want to appoint other suitable candidates - even if they are black - on suspicion that they support another party like the DA or Cope. [Applause.]
This initiative is going to fail, Minister, unless the ANC-controlled municipalities start to appoint people on merit, which requires that qualifications, experience and proven skills in financial matters be the determinant in appointments. Since 2006 a total of 1 283 professionals and experts have been deployed to municipalities and still the situation is desperate - desperate, because the ANC does not want to accept that municipal officials should be independent and appointed on merit only.
Belastingbetalers regoor Suid-Afrika is vuisvoos geslaan deur die verhogings wat hulle die afgelope jare in hul munisipale rekenings moes verduur. Die verhoging van die koste van elektrisiteit deur Eskom is maar een aspek daarvan. Die wanadministrasie; korrupsie, veral met tenders; vermorsing op luukshede soos burgemeestersmotors en oorsese reise; swak kredietbeheer; en die oorspandering op gratis dienste by die meerderheid van munisipaliteite het ons na aan die punt gebring dat getroue betalers dit net eenvoudig nie meer kan bybring nie en ook weerstand opbou om hoegenaamd te betaal.
Belastingbetalers verwag waarde vir hul geld. Hulle verwag goeie basiese dienste, maar hulle verwag ook skoon geouditeurde state as 'n aanduiding dat 'n munisipaliteit verantwoordelik met hulle geld omgaan. Skoon oudits is een ding wat weer bietjie vertroue in munisipale bestuur kan inbring, en daarom is die DA voluit vir hierdie inisiatief wat u loods.
Finansile wetgewing is in plek, dit is nie die probleem nie. Die probleem is hoe om daaraan te voldoen. Volgehoue opleiding in finansile bestuur op alle vlakke kan nie genoeg beklemtoon word nie en 'n mens bly ook bekommerd oor die wiskundige vaardighede van leerders wat skole verlaat en op toetree- vlakke by munisipaliteite begin werk, want almal speel 'n rol om 'n skoon oudit te lewer.
Die DA wens die Minister en sy departement sukses toe met hierdie nuwe inisiatief, maar ek wil herhaal dat dit doodgebore is as die ideologie van kaderontplooiing nie plekmaak vir meriete nie. Finansile werklikhede ontbloot politieke speletjies. [Applous.] (Translation of Afrikaans paragraphs follows.)
[Ratepayers across South Africa are punch-drunk as a result of the increases which they have had to endure over the past few years with regard to their municipal accounts. The increase in the cost of electricity by Eskom is just one aspect thereof. The maladministration; corruption, especially with regard to tenders; squandering on luxury items such as cars for mayors and overseas trips; poor credit control; and the overspending on free services by the majority of the municipalities have brought us close to a stage where faithful payers simply cannot afford it anymore and are also building up a resistance to paying in any way whatsoever.
Ratepayers expect value for their money. They expect good basic services, but they also expect clean audit reports as an indication that a municipality is dealing responsibly with their money. Clean audits are the one way in which trust in municipal management can again be gained and, therefore, the DA fully supports this initiative that you are launching.
Financial legislation is in place, this is not the problem. The problem is how to comply with it. Continuous training in financial management at all levels cannot be emphasised enough and one continues to be concerned about the mathematical skills of learners who leave school and start working at entry levels at municipalities, because everyone has a part to play in the delivery of a clean audit.
The DA wishes the Minister and his department well with this new initiative, but I want to reiterate that it will be stillborn if the ideology of cadre deployment does not make room for merit. Financial realities expose political games. [Applause.]]
Chairperson, following the reality of so many previous declarations and initiatives to get local government working, any reasonable observer would view the Minister's latest statement with serious scepticism. It is not only too little too late, but just another attempt to shift the goalposts further down the line to, in fact, just beyond the 2011 municipal elections.
Once again, the ANC government is trying to hoodwink voters into believing that all will be right if they just wait for another five years. Yet, history has now overtaken the ruling party's transparent strategic interventions that lead nowhere.
People are not only disillusioned and angry about poor service delivery, but also about the blatant looting of resources by deployed cadres, who enrich themselves through exorbitant salaries, generously supplemented with so-called performance bonuses; often rewarding incompetence, rather than excellence, not to mention the epidemic levels of nepotism and associated procurement manipulation.
The Auditor-General's report on the Municipal Finance Management Act, MFMA, outcomes for the 2007-08 financial year indicates that 67% of metros and 56% of related municipalities did not comply with applicable legislation.
Material mistakes in financial reporting were uncovered by the Auditor- General in 100% of the metros and 75% of related municipal entities, due to errors, omissions and inconsistencies. Such errors should have been detected by the metros and municipalities, but they failed to do so, because they failed to implement and maintain due internal audit processes, as prescribed by law. Thank you very much. [Time expired.] [Applause.]
Chairperson, unfortunately one minute is not enough time for me to go into a dream and wake up from this dream that the Minister has. Notwithstanding that, hon Minister, we want to support this noble objective of ensuring that there are clean audits by 2014.
However, there are a couple of challenges. The first challenge is capacity. We have heard about projects before; we have heard - some in the House would have heard - about Project Consolidate, which was intended to beef up the capacity of officials at a municipal government level.
It didn't work. Many chief financial officers in municipalities don't have even the wherewithal to prepare statements that the Auditor-General can report on, and this is where, Minister, your department has got to ensure capacity.
Secondly, with reference to the oversight mechanism, municipal public account committees don't exist. They are not compulsory; they are mandatory at national level, they are mandatory at provincial level, but it is still something that municipalities may adopt. We need to ensure, as a House, that we adopt legislation that makes municipal public accounts committees compulsory, so that in every municipality there is an oversight mechanism that can ensure that the audit reports are looked into and that measures are put in place that will ensure clean audits. But we support this objective, and we will be back here in 2011 to hear what you have to say about progress. Thank you. [Time expired.] [Applause.]
Chairperson, the ID is very concerned about a number of municipalities that received qualified audit reports and yet are still ignoring the Auditor-General's recommendations. Some municipalities even operate as if there is no Municipal Finance Management Act.
In order to ensure good and sound governance in municipalities, the ID's first solution would be to get rid of fat-cat consultants, many of whom are only interested in filling their pockets with money, instead of providing decent service at a reasonable cost.
Voorsitter, ek wil dit beklemtoon. Minister, die OD beveel aan dat u van alle vetkat-konsultante binne die munisipaliteite ontslae raak. Hulle mors ons geld, en hul pryse is buitensporig. (Translation of Afrikaans paragraph follows.)
[Chairperson, I want to emphasise this. Minister, the ID recommends that you get rid of all the fat-cat consultants in the municipalities. They waste our money and their costs are exorbitant.]
The ID further suggests that the Minister should rather employ, or deploy, internal audit units, which would be present throughout the financial year, to look out for financial mismanagement and corrupt activities. Although we support the holistic approach, we believe that each municipality is unique. They need individual attention to assist them in obtaining unqualified audits. I thank you.
Chairperson, I want to say that the hon Minister is worrying me. I am worried that you may think that you are conducting a choir and that you will find out that you are only conducting yourself. [Laughter.]
Voorsitter, die VF Plus verwelkom enige inisiatief op plaaslike regeringsvlak. Ek wil eintlik vir die agb Minister s dat ek nie dink dit kan slegter gaan nie. Maar agb Minister ... (Translation of Afrikaans paragraph follows.)
[Hon Chairperson, the FF Plus welcomes any initiative at local government level. I actually would like to say to the hon Minister that I do not think things can get worse. But hon Minister ...]
... I want to say that you will have to start with your own department, and the targets are targets that sound very good, but about two weeks ago, I asked you a question in this House about a forensic report and the findings thereof that had been completed in 2007. It is two weeks now, and we haven't heard anything.
Die probleem is as dit die departement so lank vat om net 'n antwoord te gee, hoe lank gaan dit ander munisipaliteite neem? Ek wil vandag, Minister, vir u s dat indien u u doelwitte wil bereik, gaan u ongeveer die helfte van u munisipale bestuurders moet ontslaan en sorg dat u bevoegde munisipale bestuurders kry wat die werk kan doen, anders leef u in 'n droom. Dankie. [Applous.] (Translation of Afrikaans paragraph follows.)
[The problem is that if it takes the department so long to simply reply, how long will it take other municipalities to do so? Hon Minister, today I would like to say to you that if you want to achieve your goals, you will have to dismiss almost half of your municipal managers and ensure that you appoint competent municipal managers who can do the job, otherwise you are living in a dream-world. Thank you. [Applause.]]
Chair and hon Minister, corruption in South Africa is clearly constraining development of the national economy and significantly inhibiting good governance, and local government is not immune. It has been said that corruption kills the development spirit. Nothing is as destructive to society as the rush to quick and easy money, which makes fools of those who work honestly and constructively.
In South Africa's complex political economy, tensions have given rise to several forms of corruption, including bribery, fraud, nepotism and systemic corruption. If we are to prevent corruption and to make it unacceptable, we will require long-term education and awareness, as well as significant consequences.
It is vital that government accurately identifies the reasons for the failures within municipalities. Some capacity failures may be a lack of budget and some a lack of specific skills, but indications are that, in most cases, it is a lack of leadership. It is obvious to all that before anything else, government must deal with political failures; in other words, put the right people in the right posts. Then maybe Operation Clean Audit 2014 will succeed. Thank you.
Chairperson, hon Minister, we all want to see clean cities and towns and, indeed, we want to live in clean cities and towns. However, I agree fully with your statement that you have to crack the whip. You have to crack the whip!
If you look at local municipalities, and if you want to enhance and raise the levels of service delivery, you need to deal with incompetence, lack of skills and people who are just filling the space.
Hon Minister, the Minority Front welcomes your noble intention and is hopeful that we will come back to this very same podium and address the challenges that you have achieved by then. We want to point out that it is absolutely imperative, and important, that you put in place a monitoring mechanism to deal with the accounting officers who are dealing with municipalities' financial matters and don't have the necessary skills and capabilities. Thank you. [Applause.]
Chairperson, hon Dudley makes a very significant observation about the complexity of the political economy of our country. But not only that, she also points out to us, in addressing the question of clean audits, that we must locate it within the broader problem that we are seeking to address. In other words, the absence of clean audits is in fact symptomatic of something bigger.
So, the Auditor-General indicates to us, as an example of good practice, that one mayor of Cacadu proved very effective in bringing about clean governance in the district, because he played a critical oversight role and provided leadership in the area. This he did after receiving feedback from the Auditor-General and others, and in the process of managing the administration.
The mayor told us as a committee, in our interaction with him, that their chief financial officer, who was critical to this process, was poached by a municipality with bigger financial muscle, namely the metro. So, they were confronted with a problem that their staff was poached, which created a gap with regard to their capabilities.
So, this reflects the fact that the problem of the differently financed municipalities - the rich vs the poor in the areas that we are operating in - has an effect on the ability of the poorer municipalities, largely in rural areas, to attract and retain effective professionals at a variety of levels, including the area of running finances, etc. That is the broader picture we must address.
In other words, the underdevelopment - the skewed nature of development in our country - is partly to blame for this. We have to look at the historical reasons.
Secondly, the rural-to-urban migration is an important factor. The fact that professionals are leaving the poorer municipalities of the rural areas to move to urban areas and so on, creates this gap. Thirdly, migration from the public to the private sector is becoming an important factor in looking at what is happening at these municipalities. When we speak about the absence of clean audits, we must look sufficiently into the reasons for the absence of skills that people are talking about, including of leadership. Obviously, this is compounded by the fact that, like in any institution, each municipality must create an environment in which it is able to retain and keep the professionals and skilled people that it does get from time to time. They must make sure that these professionals stay in the area, and they must deal effectively with these issues.
There's no doubt that in the absence of such an environment, such professionals become vulnerable to poaching not only by richer municipalities, but also by provincial and national departments. This denudes the municipalities of the capacity they need to handle these issues.
The Auditor-General makes an important observation, that there is a paucity of skills in the country generally, in national and provincial departments, and more so at a local level. Some of the ideas that we are debating and discussing regarding a single Public Service, inducting and training all public servants into systems that will enable them to migrate across the three spheres, will go towards addressing this issue in the long term. That is an important aspect of what we are debating and discussing today.
The Minister is correct, dealing with clean audits requires a comprehensive overall approach. In other words, we should be able to manage the issues of debt collection, for example - keeping the resources you have and using them for service delivery. This is going to make a big difference. In other words, clean audits will only be effective as a vehicle for improving not only service delivery, amongst other things, but also general good governance in those municipalities.
The country must address the problem of capacity not only at municipal level, but generally. We are dealing with backlogs of human resource development in this country that have major implications for our work across the board.
It is as a result of underinvestment not only in the past 15 years, but also before that, that we do not have sufficient numbers of professionals across the board. We've spoken about the poor quality of performance, at tertiary level, of the people we need in various areas of our work. This partly manifests itself in the poor and not-so-clean audits that emerge from municipalities, so the initiative is crucial to contributing to a national strategy for developing human resources at municipal level.
Let me start with you, hon Tozamile Botha. When you were deployed as a director-general in the Eastern Cape and a comrade from head office requested you to come and account, you said to the comrade: Nithe mandiphathe. Ndiphethe. Ndize kuphendula ntoni? [Kwahlekwa.] Usayikhumbula loo nto, tata? [You said I must manage. I am managing. What must I account for? [Applause.] Do you still remember that, sir?] That is what you said, as a deployed cadre. Today you stand here and you object to us doing that. This is the most crucial part of the work that we do. Every town and every city where the DA has won an election, they have removed the people they found there, including the people they claimed were appropriate for those jobs. This is especially the case down here, where they assume that women do not have the appropriate skills.
I don't know how you refer to "cadre development", but it is referred to as such in politics everywhere else. The party that runs the country chooses the people it considers the best, and in the process of choosing such people there will be mistakes. So, those will be dealt with.
Naturally, in working towards achieving the results that we desire, some of the human resource decisions - not only in the public sector, but also in the private sector - do not go the way we want them to. The issue is the responsiveness with which we ought to react when that happens. That is what this strategy does: It announces an initiative that complements our intention to build a very strong, national integrity system. This system emphasises to our institution the necessity to run clean public sector institutions, including municipalities, so that the citizens can benefit from that.
No doubt, I agree with those members who say that we need to be responsive and to respond in time to issues that are raised. This is what citizens on the ground want from municipalities, and this initiative is intended to do that. What's wrong with dreaming?
The importance of the announcement of the clean audits campaign is that the announcement falls squarely into our overall job to continue to learn from the past and, looking ahead, to build the sort of institutions that we would like to be proud of.
There is no shifting of goals here. What is happening is that we have to learn from the past and take new steps in the right direction. In the past, those with experience used to say that when we get lost, we should retrace our steps so that we can see where we went wrong.
We agree with the Minister that in carrying out our oversight responsibilities as Members of Parliament, we must interact with those who work in these municipalities to ensure that a political environment is created for the retention and continued attraction of others to serve on the municipalities to help them carry out their duties properly. Thank you, very much.
Moholwane ke ne ke batla ho tseba hore na o ka nka potso? [Hon member, I would like to find out whether you will take a question.]
Will you take a question? You still have one minute left.
What is the question? Let me take the question.
Ke ne ke batla ho tseba ntate hore ditoro tsena tseo o ntseng o bua ka tsona, o re di tlo fihlelwa neng hobane le wena o a bua hore ke ditoro? (Translation of Sesotho paragraph follows.)
[Mr D A KGANARE: Hon member, when are these dreams that you are referring to going to be realised, as you have indicated that they are dreams?]
Hon Kganare, you were a member of a very important trade union, and we believe that change is a process. We haven't changed from understanding that. You want us to commit to specific dates? Change is a process.
Regarding the dates that have been announced by the Minister, you want me to come up with mine as well? [Laughter.] You mean you, you don't understand?
Debate concluded.