Chairperson, Minister and hon members, members of the Select Committee on Finance and the Select Committee on Appropriations undertook an oversight visit to Mpumalanga from 21 to 23 September 2009, where public hearings were held in Ermelo and Nelspruit.
The visit formed part of the committees' ongoing interaction with municipalities to monitor collaboration and co-ordination pertaining to the provision of municipal services and the support given to municipalities by provincial and national departments.
The municipalities that were visited in Mpumalanga are: Thaba Chweu Local Municipality, Mkhondo Local Municipality, Pixley Ka Seme Local Municipality, Govan Mbeki Local Municipality, Emalahleni Local Municipality, Lekwa Local Municipality, and Nkomazi Local Municipality.
The stakeholders that accompanied the committee on these visits were: the provincial department of co-operative governance and traditional affairs; Mpumalanga's provincial Treasury; the SA Local Government Association; the Department of Co-operative Governance and Traditional Affairs; the Department of Water and Environmental Affairs; National Treasury; the Auditor-General; the Development Bank of Southern Africa, and Eskom.
The purpose of the oversight visit was to engage with the above-mentioned municipalities, along with national and provincial departments, on the following areas: firstly, to check the development and implementation of municipal budgets; secondly, to check municipalities' compliance with the Local Government: Municipal Finance Management Act, Act 56 of 2003; thirdly, to check the spending and performance of the municipalities with regard to conditional grants; fourthly, to monitor the municipalities' relations and collaboration with various national and provincial departments and entities; fifthly, to determine capacity constraints of the municipalities; sixthly, to check the extent to which municipal services are provided; and lastly, to check the alignment of municipalities' integrated development plans with the provincial growth and development strategy.
The following were the findings of the committee. Municipalities experience a lack of capacity. This impacted negatively on budgeting, budget spending, financial reporting, project management and the technical field. Negative audit opinions were issued to all the municipalities whose financial statements were analysed for the financial year 2007-08. Three municipalities received disclaimers, seven municipalities received qualified opinions and nine municipalities received unqualified opinions with other matters of emphasis. Most municipalities had ineffective and dysfunctional audit committees. There were also dysfunctional ward committees. This impacted on effective community participation.
We found poor participation of sector departments in municipal integrated development planning processes, leading to incorrect budget mechanisms. We found incidences of some farmers who do not want to allow a municipality access to their properties so that people living there could be provided with basic services such as water and electricity. In some instances, we have situations where farmers created dams in rivers. As a result, the river's water flow becomes very erratic. Community members are unable to access the water despite the fact that it is an artificial dam that has been erected by the farmer. We found there to be a lack of clarity on the role of community development workers. This creates unnecessary tensions. We found there to be a lack of proper road maintenance in most areas.
We found that there was ineffective engagement or too much reliance by most municipalities on consultants. What we actually discovered was that most of the municipalities used the services of consultants. In these instances, most of the consultants seemed to be doing the work of the municipal officials. As a result, more resources were poured into the pockets of those consultants, thereby depleting resources for service delivery. A large number of state departments that owe municipalities money cause cash flow problems within such municipalities. This impacts negatively on service delivery.
After extensive consideration and analysis of the reports and submissions from the above-mentioned municipalities in Mpumalanga, sector departments and other stakeholders, the committee recommends that the NCOP considers the following. The Select Committee on Finance is mindful of the partnership that it wants to create with the committee on Co-operative Governance and Traditional Affairs. It also wishes to indicate to the NCOP and most particularly to the committee that, if the committee is able to, it should complement the work that has been done by Finance in Mpumalanga, and lead a delegation consisting of the Department of Co-operative Governance and Traditional Affairs and also comprising of Treasury, the Auditor-General and other relevant stakeholders in their own programme, in order to discuss and report on the minimum job requirements for management positions in a municipality. We discovered that chief financial officers, financial managers, and municipal managers were, in most cases, individuals who were not qualified and therefore not astute enough to execute their tasks.
The committee also recommends an evaluation of the advantages and disadvantages of shared internal audit committees for municipalities. The committee recommends that ways be developed and strategies evaluated for improving the effectiveness of ward committees. The ward committees are not functional, and these are instruments that are expected to interact with communities. The committee also recommends monitoring and evaluating the assistance of sector departments to municipalities when they develop integrated development plans.
The committee recommends working together with the Department of Justice and Constitutional Development, the Department of Rural Development and Land Reform, the SA Human Rights Commission, the SA Local Government Association, and any other relevant stakeholders in order to develop strategies on how to manage farmers who refuse municipalities access to their farms.
The committee recommends working together with the structures of community development workers and other relevant stakeholders in order to develop strategies aimed at increasing the effectiveness of community development workers. The committee recommends expediting the process of road reclassification, with the aim of finalising the process within six months from the adoption of this report by the Council, to ensure that road maintenance responsibilities are clearly assigned. The committee recommends leading a team to be tasked with the development of strategies aimed at ensuring that municipalities recruit, train and retain key personnel.
The committee recommends that municipalities work together in a co- ordinated programme with National Treasury, provincial Treasuries, the Development Bank of Southern Africa, and any other relevant stakeholders in order to develop their own skills competencies, limit the outsourcing of their core functions to consultants and develop policies and guidelines for appointing outside consultants.
We request that these recommendations be considered by the Council. Thank you. [Applause.]
Debate concluded.
Question put: That the Report be adopted.
IN FAVOUR: Eastern Cape, Free State, Gauteng, KwaZulu-Natal, Limpopo, Mpumalanga, Northern Cape, North West, Western Cape.
Report accordingly adopted in accordance with section 65 of the Constitution.