Presentation to the Portfolio Committee on Cooperative Governance and Traditional Affairs 5-6 September 2012.

Presentation to the Portfolio Committee on Cooperative Governance and Traditional Affairs
5-6 September 2012

Overview of Content Introduction Governance Role and Responsibilities
MTAS Public Participation Section 139 Implementation Financial Management MPAC Audit Outcomes Internal Structures Government Debt owed to Municipalities Supply Chain Management Service delivery: Status Qou report IDP credibility and achievement Bulk infrastructure Elimination of Backlogs Corruption. 2018/08/07

Introduction Core Functions of the Department include the following:-
Support and Strengthen the capacity of municipalities to manage their own affairs; exercise their powers and perform their functions; Draft Provincial Legislation that affects the status, institutions, powers or functions of Local Government; Monitor, support and promote the development of local government and see to the effective performance by municipalities of their functions as per Schedule 4 and 5

Introduction - Legislative mandate
Act Purpose Municipal Structures Act (No. 117 of 1998) The Act provides for the establishment of municipalities in accordance with the requirements relating to categories and types of municipalities. Municipal Systems Act (No. 32 of 2000) The Act provides a framework for the provision of services, service delivery agreements and municipal service districts to provide for credit control and debt collection Municipal Finance Management Act (No. 56 of 2003) The Act establishes norms and standards for the management of the revenue, expenditure, assets and liabilities, and financial dealings of municipalities and municipal entities. Gauteng Traditional Leadership and Governance Act (No. 4of 2010) Provides for the establishment and recognition of traditional communities in the Province

Introduction - Policy mandate
Policy Purpose Local Government Turn-around Strategy (LGTAS) The LGTAS seeks to implement a comprehensive but differentiated programme of action to achieve the objective of enabling municipalities to meet the basic service needs of communities The Global City Region (GCR) Perspective The key objective is to reduce unemployment and poverty by promoting economic growth, integrated strategies and joint planning between the different spheres of government. Funding model for ward committees Provides for and guides the implementation of support of functionality of ward committees through budgeting for stipend and other resources required for ward committee operations. Revised National Capacity Building Framework Draft 4 The policy recognises three elements of capacity which impacts on the ability of municipalities to provide services and they are the individual, institutional and environmental capacity

Introduction-Outcome and Outputs (9)
Responsive, accountable, effective and efficient local government system:- Differentiated approach to municipal financing, planning and support Improving access to basic services Implementation of the Community Work Programme (Responsibility of DED) Actions supportive of the human settlement outcomes Deepen democracy through a refined ward committee model Administrative and financial capability Improved coordination of interventions impacting on Local Government

Governance

Intergovernmental Relations (IGR)
IGR framework was adopted in 2010 and looks into:- providing the general principles of IGR in the province, regulating IGR forums established in the province, provides for guidelines to govern internal IGR procedures and Provides a framework for the settlement of IGR disputes. Key IGR Structures:- The Premier’s Coordinating Forum was reconfigured, MEC/MMC Fora were established in sector Departments and; IGR Practitioner’s Forum was established.

CHALLENGES FACED BY MUNICIPALITIES:- Capacity constraints in terms of resources, staff and expertise at the local level; Inadequately defined roles and positioning of Intergovernmental Relations Units; Non or irregularly attendance of intergovernmental meetings and the lack of appropriate resolution tracking mechanisms and to monitor and evaluate implementation thereof; and Uncoordinated activities between the provincial departments and municipalities, between sector departments operating in the same municipality, and as well as amongst the neighbouring municipalities themselves.

SUPPORT TO MUNICIPALITIES:- Hands on support to municipalities in terms of reviewing their IGR policies. Host IGR practitioners seminars to share experiences and learn from each other. Quarterly MECMMC meetings held focusing on: Human Settlements and Infrastructure Development Finance Integrated development planning and LED Capacity development of municipal IGR practitioners Development of IGR Implementation Plan and Monitoring Framework.

Municipal Turnaround Strategy MISA
2018/08/07

Municipal Turnaround Strategy - MISA
The Province’s focus on 5 priorities:- Acceleration of Service Delivery Enhancing Good Governance Promoting sound financial management Fighting corruption Facilitating sustainable infrastructure development

Municipalities receiving Targeted Support
Local Municipalities in the West Rand District: Westonaria Randfontein Mogale Merafong Local Municipalities in the Sedibeng District: Lesedi Emfuleni (Diagnostic Analysis still outstanding)

Diagnostic Process The process consist of a two day engagement with municipalities utilising the MISA tool/MTAS. After this engagement a draft support plan is drafted. A one day feedback session is held to discuss the support plan and get buy in from municipalities. An assessment/verification of the intervention was completed MISA then finalise a costed support plan. For the non-MISA projects the department then prioritise and supports.

Root Causes Identifies
In the main these are following root causes: Capacity constraints – inability to attract and retain staff and afford competitive salaries; Critical posts being vacant; Political interference in:- the appointment of staff, procurement and; other operational matters; Political differences amongst councillors; Limited ability to source alternative funding for infrastructure investment projects.

Projects to address the challenges
Capacity building towards functionality of ward committees. Audit status of by-laws and develop a guidelines. Facilitate the filling of vacant critical posts. Training and deployment of expertise in critical ares Introduction of a zonal water loss programme. Development of an infrastructure Master Plan for the region. Review cash and debt management strategies. Monitor functionality of council including caucus. Draft business plan for funding infrastructure.

Public Participation 2018/08/07

Public Participation-Key Performance areas
Provide support and monitor the functionality of ward committees (Quarterly Reports). No of meetings held and percentage attendance No of meetings organised by ward committee and percentage of ward community attendance. Submission and tabling of ward reports to Council. Number of door to door campaigns and/or interaction with street committees. Number of complaints handled and resolved. Strengthen the ward committees through support programmes and activities (including training in key areas of planning, budgeting, oversight and communication) Promote public participation in decision making at municipal levels (e.g. IDP) Evaluate public participation processes and systems on a regular basis and provide support to address issues that come up.

Public Participation Progress to date:-
Public Participation Framework has been developed and shared with Municipalities. Workshops were conducted with the targeted municipalities. Municipalities were engaged to draft policy framework on Public Participation Framework Developed a Framework for the election of Ward Committees. Most ward committees have been elected using the guidelines. All ward committees have been established except for 4 2 in Lesedi and 2 in the City of Jo’Burg. The challenge has been primarily political. Ward committee funding Model is in place although it is implemented differentially. Plans are underway to continue to build and strengthen the ward committees through monitoring and support programmes and activities,

Public Participation – National Ward Committee Framework
Purpose Determine criteria for calculation of out of pocket expenses Provide mechanisms, systems and procedures for ward committee funding and functionality Puts obligation on municipalities to budget out of their own revenue for ward committee activities Provides guidance to municipalities for targeted ward budgeting Promotes ward councillors to work together with ward committees Explores fiscal and grant mechanisms to support under-resourced municipalities

Public Participation –
CRITERIA FOR FUNDING MODEL Ward Size:- Population Size Most municipalities have considered funding operations Recommended out of pocket expenses is R1000

Breakdown of Funding for Municipalities in Gauteng
MUNICIPALITY COST NO OF WARDS COJ R350 130 COT R1000 105 COE R100 101 MOGALE R500 34 WESTONARIA 16 RANDFONTEIN 22 MERAFONG 28 LESEDI 13 MIDVAAL R250 14 EMFULENI 45

National Grant to Ward Committees
DCOG has afforded 4 municipalities grants towards ward committee operations for 2012/13 as follows: MUNICIPALITY NO OF WARDS AMOUNT PER R500 ANNUAL GRANT MIDVAAL 14 R70 000 R LESEDI 13 R65 000 R RANDFONTEIN 22 R R WESTONARIA 16 R80 000 R

Challenges – Funding Model
Limited resources within municipalities to pay the recommended full amount of R1000 per month. No resources within Province to augment in monetary terms municipal budgets.

Section 139 Implementation

Implementation of Section 139 in Gauteng
In 2009, the Gauteng Executive Council resolved to implement the provision of section 139 (5) (a) of the Constitution A recovery plan was prepared and approved on the 9th February 2010 Implementation of the plan was managed by the Mayor and Acting Municipal Manager with support from GDF, DLG&H and DBSA’s Siyenza Manje officials 8 months after implementation of the Municipal Financial Recovery Plan the province assessed the management of financial commitments and the overall cash flow and it was evident that it was insufficient and unsustainable By October 2010, the council was dissolved and an Administrator was appointed until the Local Government Elections in May 2011

Implementation of Section 139 in Gauteng
LESSONS LEARNT:- Systemic problems within the municipality administration like lack of capacity and leadership impacted on its demise. Intervention should have taken place earlier. The municipality was not viable nor sustainable and support measures such as the Recovery Plan were not adequate to resolve the systemic challenges. The rates boycott of the ratepayers associations exacerbated the problem The intervention should have been provided with comprehensive resources. Adequate budget and full time support team should have been provided as part of the support plan. The team should have included expertise like HR and Labour Relations, Finance and Revenue Specialists, Engineers, Internal Auditor, Legal Advisor. The recovery plan should also include focused attention on the political leadership and related challenges.

Financial Management

MPACS A separation of powers oversight model has been introduced in Gauteng local government. The Oversight Model mirrors parliament’s portfolio committees. It was piloted City of Jo’burg (COJ) - It has now been rolled out in the City of Tshwane and the Ekurhuleni Metropolitan Municipality. Municipal Public Accounts Committees (MPACs), which are similar to parliament’s Standing Committee on Public Accounts (SCOPA) have been established across all municipalities in Gauteng since the Local Government Elections 2011. Their primary responsibility is to ensure that reports of the Auditor General (AG) are given the serious attention that they require by municipal councils.

State of MPACS An evaluation of MPACs in Gauteng in 2010 highlighted challenges upon which the following recommendations were formulated: A need for a standard approach on the appointment of members, Continuous training for members was required, constant monitoring of MPACs, Granting chairpersons fulltime councillor status, and To develop a legislative authority for MPACs. By 31st October 2011, all MPACs were established in Gauteng in line with Circular 56 dated June 2011

State of MPACS MUNICIPALITY DATE ESTABLISHED NUMBER OF MEMBERS
COT Metro 15/07/2011 and re-established on 27 October 2011 13 Members COJ Metro 07/2011 18 Members Ekurhuleni Metro 20/07/2011 11 Members West Rand DM 29/06/2011 8 Members Merafong LM 24/08/2011 Mogale LM 28/10/2011 Westonaria LM 26/08/2011 7 Members Randfontein LM 10 Members Sedibeng DM 10/08/2011 9 Members Emfuleni LM 06/2011 12 Members Lesedi LM 28/06/2011 6 Members Midvaal LM 27/10/2011 7 Members -5 permanent 2 alternates

MPACS- Challenges Following are their key challenges:
Committee members are lacking the required skills and expertise on financial and non-financial oversight and scrutiny. Performance and status of the MPACs is negatively affected by the lack of resources (i.e. human and financial). The lack of a committee researcher is a clear impediment to the majority of MPACs in the province as they can bridge the skills gap of members. Generally there is lack of powers to enforce decisions of the MPACs.

MPACS- Provincial Support
SALGA Councillor Induction Programme (June 2011) strengthened on the role of MPACs Workshops held on the role and function of MPACs APAC, DLGH, Provincial Treasury held 2 day session in May 2012 on the role, mandate and functions of MPACs Certificate Programme developed with Regenesys - 50 MPAC members being trained Full-time Section 79 Chairpersons – Concurrence assigned at 70% of the upper limit. Of the 9 municipalities qualifying in terms of their size, 5 applied and received concurrence from the MEC.

Audit Outcomes

Audit Outcomes Of the 15 audited municipalities:-
9 Unqualified:- COT, Ekurhuleni, Metsweding, Westrand, Sedibeng, Midvaal, Lesedi, Westonaria and Merafong 6 were qualified:- Mogale City, Emfuleni, COJ, Nokeng, Randfontein and Kungwini 0 disclaimers or adverse 2018/08/07

Audit Outcomes- Progress
8 Municipalities have maintained their unqualified status over the last two financial years 4 Municipalities have maintained their qualified status over the last two financial years. 3 municipalities have regressed over the last two financial years. However one Metsweding is from a clean audit to an unqualified. This is of great concern to the Province and plans are in place to address the challenge.

Audit Outcomes- Trend Audit Opinion 2008/9 2009/10 2010/11 Disclaimer
Adverse Qualified 2 4 6 Unqualified 10 9 Clean

BACKGROUND AND CONTEXT
Status Quo of audit Outcomes FINANCIAL YEAR MUNICIPALITY 2008/9 2009/10 2010/11 CITY OF JOHANNESBURG CLEAN AUDIT QUALIFIED CITY OF TSHWANE UNQUALIFIED EKURHULENI METSWEDING DISTRICT NOKENG TSA TAEMANE KUNGWINI DISCLAIMER SEDIBENG DISTRICT EMFULENI MIDVAAL LESEDI WEST RAND DISTRICT MOGALE CITY RANDFONTEIN QULAIFIED WESTONARIA MERAFONG

Audit Outcomes- Analysis
City Of Johannesburg Regressed from the year 2008/09 where a clean audit was received and thereafter a qualification for 2009/10 and 2010/11. The qualification relates to revenue and accounts receivables. Due to system integration shortcomings, property categories in the billing system differed compared to the system which contains information regarding the classification and zoning of properties, which resulted in a qualification in revenue and accounts receivables. City Of Tshwane Improved from the year 2008/09 where a qualification was received and thereafter unqualified audit opinions for 2009/10 and 20010/11. Ekurhuleni Maintained their unqualified status for past 3 years

Metsweding District Regressed in the past financial year where it moved from a clean audit status to unqualified in 2010/11. Nokeng Tsa Taemane Regressed in the past financial year where it moved from an unqualified audit opinion in the past year to a qualification in 2010/11. The financial disciplines were not upheld as the key monthly reconciliations of the bank reconciliation were not performed and reviewed, resulting in unreconciled differences between the cash book and the financial statements. Kungwini Improved from a Disclaimer in 2008/09 to a qualified audit opinion in 2009/10 and 2010/11. The basis for the qualification was the supplementary valuation roll that was not updated and the accounts receivable sub ledger was not reconciled with the financial statements, resulting in a qualification of revenue and consumer debtors. There was no documentation to support suspense accounts for the liabilities and indigent debtors.

Sedibeng District Maintained their unqualified status for past 3 years. Emfuleni Local Municipality Maintained their qualified status for the past 3 years. The basis for the qualification was the purchase price of infrastructure assets procured in prior periods that could not be confirmed, due to inadequate documentation to support the original cost. In previous financial years, Emfuleni did not comply with the requirements of GRAP17. In the financial years, Emfuleni was late in engaging consultants to resolve the GRAP17 compliance issues.

Midvaal Maintained their unqualified status for the past 3 years Lesedi Maintained their unqualified status for the past 3 years West Rand District Mogale City Regressed in the past financial year where it moved from an unqualified audit opinion for 2 years to a qualification in 2010/11. The basis for the qualification was the adjustments that were made to the opening balances on assets to address the prior year qualification without adequate supporting documentation.

Randfontein Regressed in the past financial year where it moved from an unqualified audit opinion for 2 years to a qualification in 2010/11. The basis for the qualification was the property, plant and equipment balance that was not supported by an accurate and complete fixed asset register. The municipality was qualified on the accumulated surplus amounts, primarily resulting from prior period adjustments being made to the comparative figures for which no supporting documentation was available. Westonaria Maintained their unqualified status for the past 3 year Merafong Maintained their unqualified status for the past 3 years

Targeted Hands on Support
OPCA targeted hands on support to Randfontein, Westonaria, Mogale City, City of Tshwane and Emfuleni municipalities Primary focus areas of the targeted hands on support are:- Internal Controls Asset Management Oversight Function Revenue Management Capacity Building – Scarce and Critical Skills Performance Informatio; Annual Financial Statements Integration of the Financial system data- City of Tshwane 2018/08/07

OPCA Provincial Coordinating Committee (OPCC)
The OPCACC was established to:- monitor the implementation of OPCA within Municipalities as well as the provincial departments within the province. All Municipalities the progress made in addressing AG issues as well as progress towards achieving clean audits. All stakeholders also present the progress made in supporting municipalities to achieve clean audits. Streamline the support from various stakeholders to municipalities.

Internal Control Structures

Internal Control Structures
Municipalities are statutorily required by section 165 and 166 of the Municipal Finance Management Act (MFMA) to establish strong governance structures to advise the municipality on matters relating to:- internal controls, internal audit, accounting and financial reporting, risk management, performance management, governance, compliance with the MFMA and any other applicable legislation.

Establishment of Functional Internal Audit Units
Establishment of Internal Audit units by Gauteng Municipalities: Municipality I.A. Unit in place In-house/Outsourced/Co-sourced City of Johannesburg MM Yes In-house Ekurhuleni MM City of Tshwane MM West Rand DM Randfontein LM Westonaria LM No N/A Merafong City LM

Establishment of Functional governance
Municipality I.A. Unit in place In-house/Outsourced/Co-sourced Mogale City LM Yes In-house Sedibeng DM Emfuleni LM Midvaal LM Outsourced Lesedi LM

Shared Services Internal Audit and audit committee
A study concluded that it is feasible and cost effective to establish a shared services model in the Westrand. The outcomes of the study were then presented to the municipal managers and mayors within the West Rand Region. The findings were also presented to the regional transformation committee, which is made up of mayors, MMCs finance, and municipal managers of all the municipalities in the Westrand. The transformation committee approved that the shared services be established. The individual municipalities need to take council resolutions to implement .

Overall Assessment of Internal Audit Units
Most of the Municipalities have established in-house internal audit units informed by their approved Charters. The Midvaal LM and Lesedi LM which have outsourced this function to private audit firms. The issue of outsourcing the internal audit function poses a challenge to municipalities with regard to skills transfer and huge costs to municipalities. Some municipalities view outsourcing as a means to enhance the independence of the internal auditors; Challenge:- The capacity of internal audit staff remains a challenge if the skills transfer clause is not implemented for those with outsourced services. For those with internal units delays in filling of vacancies in these units impact negatively on the performance of the internal audit function.

Establishment of Functional governance
The internal auditors of municipalities have appropriate qualifications but not sufficient experience on IT and financial audits, Capacity is a challenge in relation to the size of a municipality which leads to the internal audit function being less effective. Some internal audit units are not allocated sufficient budget to purchase electronic audit software which would support their work in complying with the required professional standards. Senior management do not give support to the internal auditors through the commitment of implementing the recommendations of internal audit unit. Ad hoc assignments by management impact negatively on the execution of the internal audit plans.

Establishment of Functional Audit Committees
Establishment of Audit Committees by Gauteng Municipalities: Municipality Audit Committee established City of Johannesburg Established Ekurhuleni MM City of Tshwane MM West Rand DM Randfontein LM Westonaria LM Merafong City LM

Establishment of Functional Audit Committees (cont.)
Municipality Audit Committee established Mogale City LM Established Sedibeng DM Emfuleni LM Midvaal LM Lesedi LM

Overall Assessment of Audit Committees
The assessment is based on the Departmental attendance at audit committee meetings. The Auditor-General also attends these audit committee meetings as a means to improve audit opinions and giving guidance in this regard. The composition of the established audit committees is in line with the MFMA as the members are not in the employ of the municipality and they are not councilors. The challenge comes when members resign from the audit committees as it takes a lengthy process to advertise and appoint new members to serve on the committees.

Gauteng Government Debt Management Project

Background The report is focusing on the five GPG Departments that owe the municipalities the most amounts:- Departments of Local Government and Housing, Health and Social Development, Education; Infrastructure Development and; The Department of Transport.

Approach A provincial debt management committee has been established. Its aim is to facilitate and ensure that:- Provincial departments pay municipalities for services, rates and taxes on time, and thereby, Reduce Government debt to municipalities. One on one meetings are held quarterly between provincial departments and municipalities on the following objectives:- Identify and validate properties owned by Province. Ensure that debtor information on government accounts was cleaned and then corrected on the municipal finance systems 2018/08/07

Approach Meetings are held between provincial departments and municipalities are held monthly with the following objectives:- Track payments made and forthcoming payments by Departments Create a business process that will effectively deal with Government debt from both provincial and local government perspective. Initiate discussion on the structuring of Government tariffs and rates, Structuring payments cycles for Property Rates 2018/08/07

Department of Education (GDE)
Municipality Total Paid Balance o/s as 31 June 2012 EDUCATION Ekurhuleni 5,429,133 45,237,507 CoJ 22,964,991 33,112,337 CoT 3,109,189 13,971,883 Westonaria 411,756 542,701 Mogale City 2,441,383 5,861,425 Randfontein 206,769 Merafong 1,572,586 611,193 Lesedi 988,509 Emfuleni 6,752,895 Midvaal 315,789 TOTAL 36,135,807 107,394,240

Analysis of table GDE has made significant and constant payments to municipalities This has shown the municipalities the commitment they have in settling the municipal debt. The department has developed a strategy to address the challenges it has been experiencing regarding the section 21 school’s lack of payment of services.

Analysis of table The key part of the strategy is that the budget for services will no longer be given to those section 21 schools that have not been paying for services, instead payment of services will be centralised at the GDE head office. For those section 21 schools that are paying, the GDE require proof of payment from the schools by a certain date of the month to ensure timeous payments.

Challenges per Department: Education
Meter readings at schools are a big challenge as in some cases departments are billed on estimates which are higher than the actual reading or municipalities cannot locate the meters in the school yard hence they bill on estimation. This leads to a dispute of the billed amount. This results in the schools withholding the payments while the matter is being resolved. Attempts to resolve this are underway via the one on one engagements between the Department and the municipalities.

It is also noted that schools with exorbitant outstanding amounts are due to decaying water infrastructure and abuse of the water and electricity by communities in those schools that are not properly secured

The other challenge that was noted during the working session with the Department of Education is that some of the schools have been paying for rates and taxes due to the fact that the municipalities are not splitting the accounts. This however is being dealt with through one on way engagements with these municipalities.

Department of Roads and transport
Municipality Total Paid Balance o/s as 31 June 2012 Transport COJ 11,592,209 Ekurhuleni 2,943,677 Emfuleni Lesedi 3,059 Midvaal 24,840 Mogale City Merafong Randfontein COT Westonaria TOTAL 14,563,785

Department of Infrastructure(DID)
Municipality Total Paid Balance o/s as 31 June 2012 INFRASTRUCTURE DEVELOPMENT COJ 71,426,288 Ekurhuleni 85,724,853 Emfuleni 4,031,660 Lesedi 2,513,682 Midvaal 756,823 Mogale City 2,882,618 Merafong 78,218.51 Randfontein COT 13,649,115 Westonaria 1,369,405 TOTAL 182,432,663

Analysis of table: DID DID is trying to bring all the account up-to-date in most municipalities, however that is dependent on the municipalities delivering correct information as agreed in the debt management committees. In addition, payments are also subject to property verification processes. This is a challenge for municipalities as the DID asset register is incomplete and this results in the verification process taking too long. The issue will be dealt with urgently by the senior management of DLGH and DID.

Department of Housing and Local Government (GDLGH)
Municipality Total Paid Balance o/s as 31 June 2012 HOUSING COJ 46,900,261 38,993,762 Ekurhuleni 30,418,237 Emfuleni 110,079 1,539,416 Lesedi 7,008 Midvaal Mogale City Randfontein Tshwane 209,097 611,810 Westonaria TOTAL 47,226,446 71,563,225

Challenges per Department: DLGH
There is serious weakness in the system regarding the transfer of housing projects and land to beneficiaries. There is no standard approach to handle the transfer process in particular between the Housing Department and municipalities. Ownership of property has been a contentious issue that has constantly surfaced as an impediment in the payment of outstanding debt Municipalities continue to bill the department for service consumption by residents until change of ownership to occupants is effected

Department of Health (GDH )
Municipality Total Paid Balance o/s as 31 June 2012 HEALTH COJ 262,210,990 44,584,525 Ekurhuleni 47,710,624 20,673,896 Emfuleni 6,117,842 6,578,557 Lesedi 592,038 831,002 Midvaal 346,074 Mogale City 1,742,644 5,282,006 Merafong 10,080 7,601,126 Randfontein COT 42,044,620 14,811,344 Westonaria TOTAL 360,774,916 100,362,458

Analysis of table The department of Health is still experiencing financial crisis, hence such low payment rates in the table. However, there is an intervention by the MEC for Health, the premier and National Treasury. The Mogale City and Lesedi municipality have credits on DoH accounts for the clinics and are awaiting authorization from the department to off-set the credits against hospitals with arrear accounts.

Department Summary of the Total outstanding debt as at June 2012

Challenges: Generic The cash flow is a challenge for some departments who don’t budget enough money for payments of municipal services and yet they process payments. Payments are delayed at times due to the fact that the departments must verify the accounts once they receive the claim before they can make payments.

Way Forward Working sessions to be held to aid in verifying and resolving unclear matters between municipalities and departments with regards to issues of ownership and asset verification. That Gauteng Municipalities are encouraged to bill DID on property rates on a quarterly basis in sync with the timing of the grant, so as to avoid incorrect cash flow projection from the municipal side. A firm and clear directive be given in a form of a circular, on the ownership of housing projects upon completion, therefore enable municipalities to bill beneficiaries directly and not the Departments of Housing.

Way Forward All the school districts should do their own meter reading on monthly basis and it will be compared to the municipalities reading and the billing will be based on that. That the committee investigates the possibility of implementing remote meter reading infrastructure in the Departments. Considers ring-fencing allocations for services for the Department of Health at the level of the Gauteng Treasury.

Way Forward There should be a concerted effort towards resolving water leakages in schools and continuously maintaining such infrastructure. The provincial debt management committee to engage officials responsible for the Provincial water demand management project to plot a way forward in implementing the project.

Supply Chain Management

Supply Chain Management (SCM) - Metros
Supply chain management findings relating to irregular expenditure not condoned in terms of section 170 of the MFMA by national treasury. In this regard, the metros faired as follows: COJ-R432 million COT-R119 Million of which R94 million related to contracts entered into the prior periods EMM-R14 Million 2018/08/07

Plan to address the issues:- Tracking mechanisms will be implemented such that when contracts are entered into, plans for the closure of the project are in place. Interactions with National treasury will be initiated to review the applicability and constitutionally of the legislation relating to suppliers in the service of the state. Ensure that internal controls are in place to make certain that there is compliance with legislation relating to procurement matters. The city of Johannesburg deviation policy should be reviewed to ensure it meets the AG requirement. AGSA uses the requirement set in Regulation 36 and reasons provided are assessed against this SCM regulation. 2018/08/07

SCM findings on awards made to persons in the service of the state 9 SMC Regulation 44) COJ-Municipality (13-R6.6 Million) and other state institution (27=R45 Million) excluding municipal entities; COT-Municipality (41=R20 Million) and other state institution (127=R24, 46 Million); EMM-Municipal (4=R0, 5 Million) and other state institutions 28=R149.9 million) 2018/08/07

Plan to address the issues:- Internal controls need to be improved to identify suppliers who are employed by the municipalities and the municipal entities. SALGA is in the process of consolidating a database of employees of the state in Gauteng for easy access to municipalities. It is a challenge for local government to identify employees in the service of the Public Service. Engagements are underway to discuss and resolve the matter with National treasury and the Accountant General, especially in relation to the constitutionality of the legislation 2018/08/07

Unauthorized expenditure in excess of the limits amount (provided for in the votes R50 million) COJ –R43 Million for bulk purchase and grants and subsidies paid R13 Million COJ-R 53 Million mainly relating to overspending on guarding services by JMPD Plan to address the issue- There is a need to engage and review the limits in line with the size of metropolitan municipalities and their respective budget. 2018/08/07

Fruitless and wasteful expenditure with regard to interest on:- overdue account; penalties from South Africa Revenue Services; expenditure for resources not utilized and traffic fines. Plan to address the issues Training of the compliance officers and their staff to ensure proper understanding of the applicable laws and regulations; Explore the development of a compliance check list which will be used to ensure that laws and regulations are compiled with before transgression occur. 2018/08/07

Supply Chain Management (SCM) - Locals
SCM findings on awards made to persons in the service of the state (SCM regulation 44): Sedibeng District Municipality (SDM) (1=R ) and other state institution ( 23=R ) Emfuleni Local Municipality (1=R94 000) and other state institutions ( 15=R ) Unauthorized expenditure, overspending on total budget or main division within budget: Merafong City-R 13 million for bulk purchase and grants and subsidies paid. Mogale City- R11,8 million relating to overspending of the total operational expenditure budget Randfontein-R53 million mainly relating to overspending on operational expenditure 2018/08/07

Supply Chain Management (SCM) - Locals
Other Supply Chain Management (SCM) findings identified for all municipalities were as follows: Reasons for deviation that do not meet the requirements of SCM regulation 36, Advertisement for tenders less than minimum period No competitive bidding process for other awards Three quotations not obtained Tender process not followed for awards that are required by the legislation Inadequate contract management resulting in deviations to SCM as contracts are not managed properly towards the end of their terms. 2018/08/07

Supply Chain Management (SCM)
Tender processes not followed for awards that are required by the legislation; Inadequate contract management resulting in deviations to SCM as contracts are not managed properly towards the end of their terms. Limited capacity and skill within SCM units in municipalities.

Departmental Support – Supply chain
Provide hands on support to targeted municipalities to address issues raised. Monitor compliance and the implementation of municipals plans through the OPCACC and Municipal Audit Steering Committees. Monitor and support initiatives on OPCA hearings at municipal level with the aim of taking disciplinary action where managers do not comply or follow through on their respective action plans. Facilitate and strengthen critical capacity (skills, policies and systems) through hands on support to targeted municipalities. 2018/08/07

accelerating access to basic service through bulk infrastructure
2018/08/07

Background Municipalities are responsible to provide basic services- Constitution, MFA Act No. 56 of 2003, Chapter 1. A service that is necessary to ensure an acceptable and reasonable quality of life and which if not provided, would endanger public health, safety and the environment. There is a need to address bulk & distribution infrastructure backlog to enable delivery of basic services. Shortage of Skilled and Experienced Civil Engineers, Town Planners, Electrical Engineers, Artisans, Surveyors remains a challenge etc. Capacity building programme- Civil Engineering, Planning and Built Environment Skills including Artisans need to be rolled-out.

Scope of Work/Programmes
Work carried out in these Municipalities: Sedibeng District Municipality, Midvaal Local Municipality, Lesedi Local Municipality and Emfuleni West Rand District, Randfontein Local Municipality, Merafong Local Municipality, Mogale Local Municipality The three Metros (CoT, CoJ and Ekurhuleni) Nature of support Senior Retired experts Civil, Planners, Electrical Engineers & Artisans paired with young graduates. Support provided in these key disciplines: Water and Sanitation Roads and Storm water Town & Transport planning Project Management Amenities Housing & Energy 2018/08/07

Basic Service Delivery and Bulk Infrastructure
PMU Support – Municipal Infrastructure Grant Spending Planning for Capital works, Operations and Maintenance Backlog Studies in order to develop Recovery Plans Facilitation Of Access to Grant Funding Medium and Long-Term Infrastructure Asset Planning 2018/08/07

Achievements A total value of R4.2 billion over the 7year period; R380 Mil in the 2011/2012 financial year on infrastructure including bulk services. Almost 1,800 projects were managed in the different phases over seven years and 31 projects completed for the Financial 2011/2012; 142- Households were connected to water & sanitation ( /12); 313- Households benefitting from new or upgraded bulk sanitation ( /12) 240- Households benefitting from new or upgraded bulk water supply ( /12) 2018/08/07

Individual Municipal Expenditure /Achievements Expenditure on various MIG Components Expenditure up to June 2012 B-Component 272,673 P-Public Transport 10,794 P-Emergency Services 9,557 P-Community Services 77,102 P-Other Institutions P-Services to Businesses E-Component PMU's 10,195 TOTALS 380,321

Individual Municipal Expenditure /Achievements B- Component Expenditure- As can be seen below; Roads (39%) and Sanitation (35%) are high in capital expenditure. These are followed by Water (22%), Storm water (3%) and Street/Community Lighting (1%). Actual Expenditure for B-Component Up to June 12 Water 59,826 Sanitation 95,242 Roads 105,168 Stormwater 8,818 Street / Community Lighting 3,620 Solid Waste Removal TOTALS 380,321

Municipal infrastructure Grant- 2011/2012
Municipal Infrastructure Grant June 2012 Payment Schedule Transfers from National Spent by munucipality Deviation Percentage transfers Percentage spent - Emfuleni 364 100.00% 99.71% Midvaal 22 845 Lesedi 23 139 22 288 851 96.32% Sedibeng District Municipality Total: Sedibeng Municipalities 1 215 99.30% Mogale City 80 957 80 953 4 Randfontein 30 284 11 712 18 572 38.67% Westonaria 54 184 Merafong City 61 137 West Rand District Municipality Total: West Rand Municipalities 1 18 576 91.80% Unallocated Total: Gauteng Municipalities 19 791 95.05% 2018/08/07

Challenges/Impeding Factors Main challenge remains the spending of the approved allocated capital budgets - Randfonteing Lack of Pre-planning- Forward planning required at least a year before implementation. Limited or no funding for Operations and Maintenance of infrastructure. Appointment of in-experienced Consultants/Contractors. Procurement & Payment Process prolonged unnecessarily. Lack of Project Management Skills and Clerical Support Staff Internally. Lack of Support and cooperation from other Departments within Municipality. Lack of coordinated planning and budgeting for key projects on across the spheres of government.

Basic Service Delivery and Bulk Infrastructure – Way Forward
Provincial Advocacy required in the implementation of basic services programmes in Municipality, to achieve it the following four pillars are necessary: Experienced professional engineers, technologists and technicians is management. Policy, systems and operating procedures in place and understood Sound knowledge of the condition of infrastructure delivering essential services. Sound revenue systems which will provide, above all, sufficient money to ensure that 1 to 3 above are in place. 2018/08/07

Basic Service Delivery and Bulk Infrastructure – Way Forward
Advocate for appointments to fill critical vacant posts with suitably qualified persons. Facilitate and support effective recruitment, retention and succession planning in Gauteng municipalities to drive the staffing turnaround needed. Re-configure planning and budgeting model to support municipalities to achieve maximum possible impact. Find alternative funding mechanisms to complement existing funds especially for upgrades, operation and maintenance. 2018/08/07

Integrated Development Planning
2018/08/07

Integrated Development Planning –Criteria for assessment
The Departments oversight and support with regards to IDPs is in terms of:- Legislative compliance: this considers the extent to which the IDP complies with provisions of the Municipal Systems Act. Credibility: The DCoG IDP credibility framework serves as an essential point of departure in determining the credibility. In addition to this attention is given to factors such as the quality and reliability of data used in compiling the IDP. Other factors considered include the extent to which the various strategies proposed in the IDP are responsive to the challenges identified in the status quo. 2018/08/07

Integrated Development Planning Criteria for assessment
The Departments oversight and support with regards to IDPs is in the areas:- Alignment: In the bid to making IDP a plan of all government, attention is given to extent to which the IDP is aligned to the plans and strategies of the provincial and national government. In light of the outcome-based planning approach, much focus will be dedicated towards assessing the extent to which IDPs are linked to and give effect to government’s outcomes over the electoral term. IDPs have been approved and the Department is working with Municipalities in ensuring that IDPs reflect alignment of budgets across all spheres of government. 2018/08/07

Integrated Development Planning - Assessment
Municipality 2011 Ratings 2012 Ratings City of Johannesburg Metro High City of Tshwane Metro Ekurhuleni Metro Sedibeng DM Lesedi LM Medium High (Improved) Emfuleni LM Mid-vaal LM Westrand DM Westonaria LM Randfontein LM Mogale City LM High (improved) Merafong LM 2018/08/07

IDP- Departmental Support
Strengthening the credibility and implementability of IDPs through Development ward-based planning framework Conduct IDP Education (For Officials and Councilors) Support improvements with the use of statistical data (collaborating with Stats SA) Collaboration with the M&E Programme to monitor the implementation of IDPs. Conduct an evaluation study to establish the socio-economic impact of IDPs. 2018/08/07

IDP- Departmental Support
Facilitate inter-governmental alignment Facilitate the alignment of IDPs with Government outcomes through ongoing engagements (via the Provincial IDP Steering Committee) Establish partnerships with the Gauteng Planning Commission to ensure that IDPs are linked to the evolving planning system of the province (mainly through 2055) Supporting inter-municipal planning initiatives MEC comments on IDPs in terms of Section 26 of MSA to highlight key areas of alignment. 2018/08/07

Municipal integrated development Plans (IDPS)
Ensure Compliance with Legislative requirements by Monitor the development, review and implementation of IDPs and provision of hands-on support Conducting annual analysis of IDPs to asses this

THANK YOU 2018/08/07

Presentation to the Portfolio Committee on Cooperative Governance and Traditional Affairs 5-6 September 2012.

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Presentation to the Portfolio Committee on Cooperative Governance and Traditional Affairs 5-6 September 2012.

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Presentation on theme: "Presentation to the Portfolio Committee on Cooperative Governance and Traditional Affairs 5-6 September 2012."— Presentation transcript:

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About project

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