Hon Chairperson, the visit of the Select Committee on Finance to the municipalities in the North West province formed part of the committee's ongoing interactions with municipalities in monitoring collaboration and co-ordination pertaining to the provision of municipal services and support given to the municipalities by provincial and national departments. Sixteen municipalities in the North West were identified and called to appear before the committee.
The stakeholders, including national and provincial departments that were present at the meetings, are the following: the Department of Co-operative Governance and Traditional Affairs; North West department of local government; National Treasury; North West provincial treasury; SA Local Government Association, Salga; Department of Energy; the Financial and Fiscal Commission, FFC; national Department of Water and Environmental Affairs; national Department of Public Works and the provincial departments of public works; the Auditor-General; Development Bank of Southern Africa, DBSA, and Eskom. This was also an exercise in enhancing intergovernmental relations and assistance given to municipalities and the communities living in those municipalities in terms of section 154 of the Constitution.
The purpose of the oversight visit was to engage with the municipalities along with national and provincial departments and other stakeholders on the following areas: development and implementation of municipal budgets; municipalities' compliance with the Local Government: Municipal Finance Management Act, MFMA; the spending and performance of municipalities with regard to conditional grants; the municipalities' relations and collaboration with various national and provincial departments and entities; capacity constraints of the municipalities; the extent to which municipal services are provided and the alignment of municipalities' integrated development programmes with the provincial growth and development strategy.
In terms of audit reports, out of 24 municipalities, 13 audit reports were issued. Of the 13 issued, two received an unqualified audit opinion, three received qualified audit opinions, one received an adverse opinion and seven received disclaimers of opinions. The MEC for finance in the North West reported that the provincial treasury was looking at enhancing its own organogram in order to assist struggling municipalities.
With regard to Generally Recognised Accounting Practice, Grap, 17, provincial treasury designed a plan to assist municipalities. especially with respect to assisting management. The responsibility of housing was taken over by the province from municipalities. The SA Local Government Association, Salga, agreed to conduct workshops to further capacitate councillors on their oversight role - which is a very positive step.
The main departments and entities present made the inputs with regard to assisting with specific issues that came out of the interactions. The committee observed that the work of municipalities that were administered in terms of section 139 of the Local Government: Municipal Finance Management Act, MFMA, was satisfactory.
The Select Committee on Finance, after careful consideration of the service delivery and financial performance of the mentioned municipalities in North West, recommends that the House considers the following: the Department of Co-operative Governance and Traditional Affairs and the North West provincial treasury should ensure that municipalities appoint qualified officials. Municipal managers should provide quality information to councillors to enable them to make quality decisions. The Department of Co- operative Governance and Traditional Affairs and the provincial department of local government should develop a plan to further capacitate councillors in their oversight role. The Department of Co-operative Governance and Traditional Affairs and National Treasury should contribute to the municipal turnaround strategy by developing tools that are going to assist municipalities to comply with all provisions of the Local Government: Municipal Finance Management Act. In the time up to now, this has happened and there is improvement.
In addition, the Department of Co-operative Governance and Traditional Affairs and the Presidency should develop rules and procedures on how the provincial and national government departments should fully and actively participate in the integrated development plans, IDPs, of the municipalities and ensure that IDPs are aligned to the provincial growth and development strategy.
Furthermore, the Department of Co-operative Governance and Traditional Affairs and National Treasury should develop programmes aimed at assisting municipalities - especially the low-capacity municipalities - with the conversion from the Institute for Municipal Finance Officers to Generally Recognised Accounting Practices. They should ensure that the plans to establish internal audits, audit committees, budget and treasury offices are included by municipalities in their municipal turnaround strategies. The Department of Water and Environmental Affairs should assist municipalities in providing communities with clean drinking water and the removal of refuse at Bloemhof.
The Ministers of Correctional Services and Public Works should endorse the cancellation of the planned correctional services centre at Ditsobotla Local Municipality; the municipalities should honour agreements with regard to interventions; the Department of Co-operative Governance and Traditional Affairs, in consultation with national and provincial treasuries, should review conditional grants with the aim of improving appropriate spending on these conditional grants.
The Department of Co-operative Governance and Traditional Affairs, National Treasury and other affected shareholders should strengthen intergovernmental relations, in a co-ordinated way. When interventions are made in municipalities, National Treasury should examine the supply chain management matters, as most of the municipal tenders are not taken through all the processes.
The Select Committee on Finance, together with the Select Committee on Co- operative Governance and Traditional Affairs, should do a joint follow-up visit to the municipalities in the North West province to ascertain progress made by sector departments as per commitments they made during this oversight visit and this follow-up visit must be made after the adoption of this report. I can report to the House that the chairperson of that specific committee and I were in discussions regarding that action plan.
Lastly, the Department of Co-operative Governance and Traditional Affairs should closely monitor the support that is given to the municipalities by national and provincial departments, Eskom, and Salga in terms of the Intergovernmental Relations Framework and section 154 of the Constitution. The Select Committee on Finance should engage with the Chairperson of the NCOP on the establishment of a dialogue with the premier and the political leadership of the North West province with regard to the committee recommendations and monitoring of municipalities and provincial departments and the Department of Co-operative Governmenance and Traditional Affairs and the Department of Water and Environmental Affairs should engage with district municipalities on their status as water service providers.
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.