ATC121023: Budgetary Review and Recommendation Report of the Portfolio Committee on Co-operative Governance and Traditional Affairs, dated 23 October 2012
Cooperative Governance and Traditional Affairs
Budgetary
Review and Recommendation Report of the Portfolio Committee on Co-operative
Governance and Traditional Affairs, dated 23 October 2012
The Portfolio Committee on Co-operative Governance and Traditional
Affairs, having considered the performance of the departments of Co-operative
Governance and Traditional Affairs for the financial year 2011/12 and the first
two quarters of 2012/13, reports as follows:
1.
Introduction
The purpose
of the report is to provide a reflection on the performance of the
Department of
Co-operative Governance and Traditional Affairs against predetermined
objectives. Further, the report provides an assessment of the financial
performance of the Department for the first two quarters of the current
financial year. In the final analysis, the report provides for observations,
conclusions and recommendations from the Portfolio Committee on Co-operative
Governance and Traditional Affairs.
1.1
The role of the Committee
Mandate of
the Committee, including provisions of Section 5 of the Money Bills Amendment
Procedure and Related Matters Act, No 9 of 2009
As a National
Assembly committee, whose powers are enumerated in Chapter 4, and according to
the Rules of the National Assembly, the Committee is required, in respect of
its mandate to:
-
consider, amend,
approve or reject legislation;
-
consider and approve
budgets and monitor expenditure of the Department and entities reporting
to it;
-
consider progress
reports from line-function departments, and provincial and local
government authorities and entities on their respective mandates;
-
ensure that all
appropriate executive organs of state are held accountable for their
actions; and
-
conduct oversight
over the national executive authority and any other organ of state.
According to
Section 5 of the Money Bills Amendment Procedure and Related Matters Act, the
National Assembly, through its committees, must annually assess the performance
of each national department. The Committee must submit an annual Budgetary
Review and Recommendation Report (BRRR) for each department that falls under
its oversight responsibilities, for tabling in the National Assembly. These
should be considered by the Standing Committee on
Appropriations when it is
considering and reporting to the House on the Medium-Term Budget Policy
Statement (MTBPS). The Portfolio Committee on Co-operative Governance and
Traditional Affairs considered the Budget of the Department of Co-operative
Governance and Traditional Affairs on 31 May 2011. The Committee considered the
Department of Co-operative Governances Annual Report 2010/11, as well as the
annual reports of the entities reporting to the Department, on 12 & 18
October 2010.
1.2 The
Department
Mandate:
The primary mandate of the Department is to:
-
develop and monitor the
implementation of national policy and legislation seeking to transform and
strengthen key institutions and mechanisms of governance to fulfil their
developmental role;
-
develop, promote and monitor
mechanisms, systems and structures to enable integrated service delivery
and implementation within Government; and
-
promote sustainable development
by providing support to provincial and local government
.
Vision:
An integrated, responsive
and highly effective governance system working with communities to achieve
sustainable development and improved service delivery.
The Departments mission
is to facilitate co-operative governance and support all spheres of Government,
the institution of traditional leadership and associated institutions through:
-
development and implementation
of appropriate policies and regulatory mechanisms to promote integration
of government development programmes;
-
achievement of social cohesion
through the creation of enabling mechanisms for communities to participate
in Government; and
-
monitoring and evaluation of
co-operation amongst Government stakeholders to achieve improved service
delivery.
2.
Departments Strategic Priorities and Measurable Objectives
2.1
Strategic Plan of the Department
A summary of the
Departments 5-year strategic plan:
The Department seeks to:
-
contribute to building a
developmental state in National, Provincial and Local Government that is
efficient, effective and responsive;
-
strengthen accountability and
clean government;
-
accelerate service delivery and
support the vulnerable;
-
foster development
partnerships, social cohesion and community mobilisation;
-
strengthen the Department of
Co-operative Governances organisational capability and performance for it
to deliver on its mandate; and
-
strengthen the Departments
organisational capability and performance for it to deliver on its
mandate.
2.2
Measurable Objectives of the Department
The Departments
core function, given its new expanded mandate, is set out in the five strategic
priorities for the Ministry and Department for the next five years, 2009 -
2014.
Strategic Priority 1
:
Contribute to building the
Measurable objectives
·
The establishment of a new
development planning system ensures funding and implementation of priorities
agreed between government and communities as expressed in the IDPs.
·
The existing pieces of
legislation on intergovernmental relations and provincial and local governance
and accountability will be reviewed, strengthened and implemented to ensure
improvement and alignment with the new role of the Department.
·
Capacity of institutions
and structures to enhance co-operative governance and service delivery are
strengthened, monitored and evaluated.
Strategic Priority 2
:
Strengthen Accountability and
Clean Government
.
Measurable objectives:
·
Monitoring and oversight of Provincial and Local Government
is carried out by National Government and by communities.
·
Service delivery, accountability and transparency are
significantly improved within provinces and municipalities.
·
Corruption is combated and ethics and integrity is promoted.
·
Provinces and municipalities achieve clean audits by 2014.
Strategic Priority 3:
Accelerating Service Delivery and
supporting the vulnerable.
Measurable
objectives:
·
Municipal infrastructure and basic services are
provided to communities, and the quality and extent to which municipalities
plan for, fund, and budget for, operate and maintain infrastructure and deliver
sustainable services.
·
Infrastructure and services
stimulate local economies and the extent to which investment in local areas is
increased.
·
Provincial and municipal
services benefit the vulnerable.
·
Responses to disasters is
accelerated and improved across all three spheres of Government and the extent
to which municipalities invest and improve emergency and fire services.
Strategic Priority 4:
Improving the Developmental and Governance Capacity and Capability of
Traditional Affairs, the Institution of Traditional Leadership and the Khoisan
Leadership
Measurable
objectives:
·
The traditional communities as well as the Khoisan
Communities, including their respective leadership, are enabled and supported
by Government to contribute towards development and service delivery.
·
The institution of traditional leadership and the
Khoisan leadership have established functional and effective partnerships with
municipalities, organs of state, national and provincial government
departments, civil society, communities and the private business sector in
matters relating to development and service delivery, rural development, local
economic development, alternative energy, indigenous knowledge systems,
fighting poverty and promoting peace.
·
Well-functioning and effective Inter-Governmental
Relations (IGR) structures, chaired by the DTA at national and provincial
level, to ensure that the appropriate implementation of the above by the three
spheres of Government has been established.
·
The supportive role and place of the institution of
traditional leadership and Khoi-San leadership in
Strategic Priority 5:
Fostering development partnerships, social cohesion and community
mobilization
Measurable objectives:
·
A shared
development agenda and support amongst key stakeholders on Integrated
Development Plans (IDP)
·
Communities have trust in the work and decisions of
Government and state institutions and work together with communities in
providing services and implementing development programmes.
·
Communities are mobilised for their own development rather
than remaining passive recipients of services and development programmes.
·
Social cohesion, non-racialism and nation building are
enhanced amongst residents at the local level.
·
International partnerships are developed and bilateral and
multilateral programmes and agreements are implemented.
3. Analysis
of Section 32 Expenditure Reports
In
the previous year the Department underwent operational changes.
Funding priorities of the
Department:
The
total allocation for the Department in the 2012/13 financial year is R54.7
billion, which represents a 17.18% real increase from the R48.2 billion in the
previous year. Notably, the largest increase is in the Infrastructure and
Economic Development Programme which received an increase of 19.03% in real
terms.
There
are three programmes that take up a larger share of the budget. Governance and
Intergovernmental Relations which received a R34.2 billion in the previous year
and has been allocated R38 billion in the current year, which represents a
4.03% increase in real terms. The Disaster Response Management programme got a
substantial decrease from R816 million in the previous year to R555.2 million
in the current year. It is unclear why such a decrease has occurred in light of
recurrent floods and other disaster associated with climate change. Further,
cognisant of the need for construction of District Disaster Management Centres,
the budget allocation for this programme should be increased instead of being
cut.
4. Analysis
of the Departments Annual Report and Financial Statements
There are numerous performance
indicators that reflect substantive progress; however there are few areas where
failures are evident. In the following section, more focused attention is paid
to detailed programme performance.
DETAILED
PROGRAMME PERFORMANCE ANALYSIS
4.1
PROGRAMME 1: ADMINISTRATION
This programme is the
apex of the Department which is supposed to steer and provide impetus to the
strategic direction of the Department in order to achieve the results of
Outcome 9, as well as the MDGs. The budget for this programme has actually
decreased from R205.4 million to R201.4 million in the current year. The
decrease emanates from the reduction of the allocation to the Ministry and
Chief Operations Officer sub-programmes.
Compensation
for employees has also decreased from R97 million to R80.8 million in the
2012/13 financial year.
Over the medium term, expenditure is expected to increase to R225.5
million, at an average annual rate of 3.2%, to provide for increased
accommodation and to build capacity in support services to accommodate the
growing number of personnel in the Department for the traditional affairs
function. Over the medium term, spending on consultants is expected to increase
to R14.1 million, at an average annual rate of 7.7%. The consultants will be
used to review the risk management strategy.
[1]
4.2
PROGRAMME 2: POLICY AND RESEARCH AND KNOWLEDGE MANAGEMENT
The overall objective of this programme is to improve research and
policy analysis, and improve reporting and monitoring, as well as information
management through Information Communication Technology. The total allocation
for this sub-programme is R46.1 million. A substantial increased is recorded for
the Information, Communication and Business Technology which amounts to R24
million and which represents a 4.92% real increase from R21.6 million in the
2011/12 financial year. Over the medium term, the focus will be on improving
the Departments ICT infrastructure aligned to the knowledge management
strategy.
.
4.3
PROGRAMME 3: GOVERNANCE AND INTERGOVERNMENTAL RELATIONS
Essentially, this programme focuses on sound intergovernmental
relations, good governance and sound intergovernmental fiscal relations. This
programme involves transfers to municipalities through the Local Government
Equitable Share, as well as transfers to statutory entities such as the South
African Local Government Association and the Municipal Demarcation Board.
Needless to say the largest portion goes to transfers, particularly the Local
Government Equitable Share, which takes up R37.9 billion in the current year.
Over the medium term, total expenditure is expected to increase to R43.8
billion, at an average annual rate of 8.3%. Over this period, the Green Paper
on Co-operative Governance and the refined legislative framework for ward
committees will be finalised. The programme will also finalise the Municipal
Property Rate Amendment Bill for tabling in Parliament. The Bill seeks to regulate
the rating of property by assessment and rating of properties.
[2]
4.3
PROGRAMME 4: DISASTER RESPONSE MANAGEMENT
Parliament
passed the Disaster Management Act (52 of 2002) and the central tenets of this
legislation is around preventing, responding to, mitigating and adapting
mechanisms for natural and human-induced disasters. In the recent past,
All
sub-programmes had a decrease in their allocations with the exception of the
Intelligence and Information Systems as well as Legislation, Policy and
Compliance Management which increased from R14.7 million to R25.2 million and
from R6.6 million to R7.2 million respectively. The increase in the
Intelligence and Information Systems sub-programme represents 61.88% whilst the
Legislation, Policy and Compliance Management increased by 3.01%.
Over the MTEF period, at an estimated cost of R5 million, the programme
will continue to support the establishment and functionality of the 50 disaster
management centres and the expansion of components of the national disaster
management information systems to provinces and municipalities.
[3]
4.4
PROGRAMME
5 : PROVINCIAL AND MUNICIPAL GOVERNMENT SYSTEMS
The Programme has received a budget increase from R249.9 million to
R284.7 million in the 2012/13 financial year which represents a 7.58% increase
in real terms. The significant increases are in the Management: Provincial and
Local Government Support which rose from R5.3 million in 2011/12 to R26.8
million in the current financial year. Another substantial increase is in the
Development Planning sub-programme which received an increase from R4.9 million
in the 2011/12 financial year to R8.5 million in the current financial year.
The
Municipal Systems Improvement Grant (MSIG) has increased from R220.2 million in
2011/12 to R230.1 million in the 2012/13 financial year. Even though the
increase is substantial in nominal terms, in real terms, in this sub-programme,
there has been a negative growth 1.33 due to the impact of inflation.
Transfers from this sub-programme (Municipal Systems Improvement Grant) are
used by municipalities to train staff in the areas of financial management, to
improve the efficacy of administrative systems and to assist with the
implementation of ward participatory systems.
[4]
Over the medium term, expenditure is expected to increase to R314.7
million, at an average annual rate of 8%, due to the increase in allocation for
the Municipal Systems Improvement Grant as support for the municipalities to
develop their own turnaround strategies.
[5]
The
qualitative difference of the MSIG remains questionable given the weak systems
and capacity in most municipalities.
Expenditure on consultants, which accounts for 0.5% of expenditure in
this programme in 2011/12, is expected to increase from R1.2 million in 2011/12
to R3.1 million in 2014/15, at an average annual rate of 38.5%. The consultants
were hired to develop and maintain Gapskill, a web-based skills audit system
that supports the Departments capacity building initiative in provinces.
[6]
4.5
PROGRAMME
6: INFRASTRUCTURE AND ECONOMIC DEVELOPMENT
This programme is one of the most critical programmes in order for
Government to be able to expedite service provision and meet the MDGs by 2014.
This will be achieved through a vigorous programme of infrastructure
investment, maintenance and development planning. The Municipal Infrastructure
Support Agency is expected to eliminate infrastructure backlogs through
dedicated technical capacity to municipalities in order to intensify
infrastructure development and thus improve service provision, as well as free
basic services. This programme has received R15.5 billion of which a large
portion is for the Municipal Infrastructure Grant amounting to a total of R13.9
billion. The Community Works Programme also receives a substantial increase
from R653 million in 2011/12 to R1.4 billion in the current year.
Over the medium term, expenditure is expected to increase from R12.3
billion in 2011/12 to R18.7 billion in 2014/15, at an average annual rate of
15%. This increase is mainly due to the
Community Work Programme
s
funding, which is expected to grow, at an average annual rate of 61.1%, to R2.7
billion over the MTEF period, with the aim of creating 250 000 job
opportunities and growing the total number of sites participating in the
programme.
The
expenditure on Goods and Services also increases from R301.6 million in 2011/12
to R1.6 billion in 2012/13. The primary reason for this increase in spending on
goods and services is the continued utilisation of consultants, as articulated
hereunder. Expenditure on consultants increased from R4 million in 2008/09 to
R49.3 million in 2011/12, at an average annual increase rate of 131.4%, due to
community work programme implementation at local level done by implementing
agents. This is expected to grow to R209.3 million by 2014/15, at an average
annual rate of 61.9%.
[7]
4.6
PROGRAMME
7 : TRADITIONAL AFFAIRS
The
endorsement of the establishment of the Department of Traditional Affairs as a
separate department was promulgated through a Presidential proclamation in
2010. However the institutionalisation of the Department is long overdue.
The overall budget for this programme in the current year is R102.1
million, which represents a 15.05% increase from the previous allocation of
R83.8 million.
The bulk of the increase
is allocated to the CRL Commission, as well as the National House of
Traditional Leaders.
Over the medium
term, expenditure is expected to increase to R112.4 million, at an average
annual rate of 10.3%, due to additional funding allocated to the Commission for
the Promotion and Protection of the Rights of Cultural, Religious and
Linguistic Communities for policy research and capacity building.
[8]
Expenditure on consultants represents 7.9% of goods and services in
2012/13, and is expected to decrease from R5.7 million in 2011/12 to R5.5
million in 2014/15, at an average annual rate of 1.3%. This is due to the
Department terminating the contract of a consultant hired to review current
traditional affairs legislation aimed at the consolidation of national
legislation into a single Bill.
[9]
5.
FINANCIAL GOVERNANCE AND MANAGEMENT
On governance matters, the
Audit Committee concluded that the internal audit controls were ineffective in
the year under review. Further, the Audit Committee stated that this
ineffective internal control was worsened by non-functioning of the Internal
Audit Unit and Risk Management.
The Auditor-Generals
report states that, in terms of governance, the Accounting Officer did not
ensure that the Internal Audit Unit was adequately resourced and functioned in
terms of risk identification and corrective action.
The Department is facing
significant uncertainties as it is a defendant in various lawsuits; and, due to
the fact that these matters have not been resolved, an amount of R4.4 million
has been set aside as contingent liability in the financial statements. There
is also an irregular expenditure to the amount of R419 million as stated in
note 27.2 of the financial statements. Of this amount, R271 million was as a
result of a contravention of the supply chain management procedures outlined in
the PFMA and Treasury Regulations.
An amount of R336 000, paid
as interest on legal fees, is recorded as wasteful and fruitless expenditure.
This is so because, had the Department paid legal fees on time, t no interest
would have been incurred
In terms of procurement and
contract management, the Auditor-General reveals that Goods and Services with a
value of between R10 000 and R500 000 were procured without inviting at least
three written price quotations from suppliers, in violation of the PFMA.
In total, under-expenditure
amounts to R76 million. The Department had an under-expenditure of R55 million,
mainly in the Community Works Programme, which could not finalise all its
intended projects in the year under review. The balance was due to transfers
made to
There is an amount of R51.9
million of aid that was unutilized in the year under review, which is more than
the R32.4 million of unused aid funds in the previous year.
6.
Consideration of Other Sources of Information
A number of sources can be used to analyse the strategic and operational
plans of Departments. These include:
·
The
State-of-the-Nation address;
The
State of the Nation Address delivered by the President on 9 February 2012 in
Parliament was warmly received across the political spectrum,
albeit
the approach departed from past
practice by adopting a mid-term review as opposed to the usual annual
assessment. The SONA reflected this approach by reviewing advances and
challenges experienced since 2009, in order to address the objective and
subjective concerns in the medium term going forward. The decision to conduct a
mid-term assessment was adopted at the January Cabinet Lekgotla, as the
President explained. The mid-term review revealed significant progress and also
highlighted the stubborn challenges. As the President indicated:
The mid-term review indicated steady progress in various areas such as
health, education, the fight against crime, human settlements, energy, water
provision, rural development and others.
However, the triple challenge of unemployment, poverty and inequality
persists, despite the progress made. Africans, women and the youth continue to
suffer most from this challenge.
These realities were used as the basis for developing
priorities for the medium term. The structural challenges of unemployment,
poverty and inequality highlighted by the President permeate the SONA, and
sustainable ways of overcoming these intractable structural problems were
presented to the nation. These challenges are a legacy of
Apartheid and are also reinforced by the
fluctuating global economic system which continues to shrink the job market, as
well as widening the gap between the rich and the poor.
As we move forward,
we want to take a medium-to-long-term approach to the challenges we face on the
road to a
These
are the fundamental challenges of this epoch and the government committed to
mobilise government resources and society in order to overcome these problems
in an effort to build a non-racial, non-sexist, democratic and prosperous
society. The present reality confronting
Against
this backdrop, the government has developed a National Development Plan to
tackle current and ongoing challenges, as well as a medium-to-long-term
development path. With respect to governance and service delivery, the SONA
identified key priorities which as follows:
-
Bulk infrastructure development
-
Job creation and local economic
development
-
Provision of basic services
-
Improving governance and
institutional support
-
Recognition of Khoisan
traditional leadership institutions.
It
is worth noting that, with respect to local government, there is a relative
state of calm in as far as the violent service delivery protests are
concerned.
However, there are areas
where there is a resurgence of protests by disgruntled communities. Some of the
more urgent tasks include restoring the public confidence in municipalities and
improving service delivery as indicated the Local Government Turn Around
Strategy adopted in 2009.
IMPACT ON CO-OPERATIVE GOVERNANCE
AND TRADITIONAL AFFAIRS
The
triple challenges of the current epoch alluded to by the President, which
include unemployment, poverty and inequality, require a sustainable solution in
order to realise the objective of a better life for all. In the SONA, the
President postulates that the solution to these related challenges is higher
growth and job creation to reduce and ultimately eradicate poverty and
inequality. The President makes a distinctive assertion that, As a
developmental state that is located at the centre of a mixed economy, we see
our role as being to lead and guide the economy and to intervene in the
interest of the poor, given the history of our country. This is the clearest
indication that the government believes that the development of the country
should not be left to the dictates of market forces that have their inherent
failures. The current global economic crisis is testimony to the vulnerability
of unregulated markets.
It
is evident from the address that the solution lies in higher growth rates;
however a different trajectory which will not result in jobless growth is
required, hence the emphasis on infrastructure development, industrialisation
and beneficiation of local minerals. This unequivocal statement therefore
places local government at the centre of a sustainable development paradigm.
The countrys growth, development and stability depend on a functional local
government system that works to deliver services to the people, builds and
maintains infrastructure, creates employment opportunities through Local
Economic Development, enhances clean governance and fights corruption to ensure
value for money for citizens. Local government, in fact, is the centre of
gravity where all government service delivery functions ultimately find focus
thus the integration and coordination of all programmes becomes cardinal.
Local
government interests are fundamental to the objective of a developmental state
and therefore priorities in this sector are generally cross-cutting and
consistency in articulating these priorities is evident. A glaring example of
the significance of the multi-facetedness of the mandate of local government is
the task of provision of bulk infrastructure and basic services such as water,
electricity, sanitation and housing. These functions involve a plethora of
departments such as Human Settlements, Water Affairs, Energy, Transport and
Public Works. To further demonstrate the point, the municipal Integrated
Development Plan (IDP), which is a developmental planning framework for local
government, incorporates transport, health and water services plans in order to
respond comprehensively to the needs of the people.
[11]
The
following section provides a detailed account of the aforementioned priorities
that emerge from the State of the Nation with regard to local government.
Bulk infrastructure development
The
backbone of the envisaged growth path is the direct public sector investment in
massive infrastructure development which will create direct and indirect,
short- as well as long-term employment opportunities. The infrastructure
development becomes a catalyst for economic growth, including local economic
development, as well as igniting small-scale and large business activity
through reducing the cost of doing business and increasing economic
efficiencies.
The
massive infrastructure investment under the stewardship of the Presidential
Infrastructure Co-ordinating Commission (PICC) epitomises the integration of
various government policies such as the New Growth Path (NGP) and the National
Development Plan (NDP). The two aforesaid policies highlight the significance
of infrastructure development for sustainable growth. The NGP highlighted
substantial public investment in infrastructure
[12]
as one of the
key jobs drivers,
whilst the NDP points
to the fundamental necessity of linking bulk infrastructure development zones
such as
Coega, Waterberg/Liphalale as
well as the freight corridor between
The SONA highlighted a number of
infrastructure projects:
No.
|
Nature
of project
|
Area
|
Period
|
Amount
|
1.
|
Rail,
road and water
|
|
|
|
2.
|
Rail
transport
|
|
|
|
3.
|
Logistics
and industrial corridor
|
|
Seven
years
|
R300
Billion
|
4.
|
Industrial
and agricultural development
|
|
|
|
5.
|
Dam
construction
|
|
|
|
6.
|
Iron-ore
rail line
|
|
|
|
Job Creation and Local Economic
Development
As
a point of departure, the President reflected on the progress made towards
intensifying job creation as announced in the previous SONA. The President
lauded the remarkable progress made in this regard as revealed by the fourth
quarter figures, which indicated a decline in unemployment from 25% to 23.9 %
as a result of new jobs. The President also acknowledged the accord signed
between Government, Business and Labour on local procurement, skills
development, basic education and the green economy. This accord bodes well for
local procurement, which will increase local job creation and sustainable local
business development, in particular small, medium and micro enterprises.
The
large-scale, long-term infrastructure projects announced in the SONA will also
generate jobs in the construction sector for the actual building of the
infrastructure, as well as ongoing maintenance. The President stressed the
significance of infrastructure development to employment creation when he said,
The massive
investment in infrastructure must leave more than just power stations,
rail-lines, dams and roads. It must industrialise the country, generate skills
and boost much needed job creation
.
These infrastructure projects will
have spin-offs for local businesses to prosper. Infrastructure development,
particularly transport (road and rail), will stimulate business development as
well as increase business opportunities through interconnectivity to other
market opportunities. The President, in his SONA, stated that Our plans
include the expansion of the iron-ore rail-line bwtween Sishen in
There
will also be positive spin-offs for secondary businesses in the areas of mining
and mineral beneficiation. Another critical area that the President reflected
upon was the development of agriculture in the
Provision of Basic Services
The
year 2014, which is the target year for achieving the MDGs by halving poverty,
is fast approaching, and the unrelenting government commitment to the provision
of basic services must be intensified. Key MGD areas relevant to this sector
include electricity reticulation, water and sanitation services, which are
functions of Local Government in line with Schedule 4 Part B of the
Constitution 108 of 1996.
In order to realise the constitutionally
guaranteed imperatives in 2000, Government announced its policy-intent to
provide free basic services to poor households. In this regard, water,
sanitation and energy were identified as basic services to be supported by
Government's programmes in respect of poor households.
[14]
It is worth noting that
the infrastructure development programme enables Government
to expand access to basic services and to improve the quality of life. In this
context the projects for provision of water, electricity and housing are
imperative. The construction of water infrastructure in Waterberg and the dam
in the former
Building
of bulk infrastructure enables local municipalities to fulfil their
constitutional mandate of provision of basic services such as water, sanitation
and electricity. Construction of waste-water treatment plants, water plants and
power stations enables Government to roll out these basic services to the
remote areas in an affordable and sustainable manner. The President
acknowledged that extension of water services has been delayed in some parts of
the country, and he announced various water augmentation schemes:
[15]
These
are Olifants River Water Resource in Steelpoort in Limpopo Province, the Vaal
River Eastern Sub-System in Secunda in Mpumalanga, Komati Water Augmentation
Scheme in Nkangala in Mpumalanga, the raising of Hazelmere dam in KwaZulu-Natal
and the Clanwilliam Dam in Clanwilliam in the Western Cape. In addition, nine
out of 25 dams have been rehabilitated.
The
condition of dams has been exposed during the latter part of 2011 when massive
floods caused the overflow of many dams in Gauteng, Free State and
KwaZulu-Natal, to mention a few. Thus the indication that 25 dams have been
rehabilitated bodes well for the said dams capacity to withstand massive
floods during rainy seasons.
The
extension of affordable electricity specifically for the poor was stressed in
the SONA and, accordingly, Eskom is requested to seek affordable pricing
options. Extension of basic services in
Improving Governance and
Institutional Support
The
mandate of the Department of Co-operative Governance is to
improve cooperative governance across the three spheres of government,
in partnership with institutions of traditional leadership, thereby ensuring
that provinces and municipalities carry out their service delivery and
development functions effectively.
[16]
This
mandate is derived from Chapter 3 of the Constitution which outlines the
principles of co-operative governance. With respect to the infrastructure
investment, the PICC undertakes the co-ordinating function, but the Department
of Cooperative Governance is certainly part of this commission which includes
premiers and metro mayors.
In
the recent past, the Cabinet invoked section 100 (1) (a) and (b) of the
Constitution, respectively, in various provincial government departments in
Limpopo (5),
Ensuring
strong, supportive and accountable leadership enhances the capability of departments
and entities to comply with relevant regulations and thus obtain clean audit
outcomes. It is imperative that the Department of Co-operative Governance
provides support to provinces and municipalities in order to strengthen
internal controls, ensure compliance with good governance principles and also
ensure sustainable, affordable and economic utilisation of resources and
effective and efficient delivery of services.
Recognition of Khoisan Traditional
Leadership Institutions.
The
SONA was categorical on the long-standing question of the recognition of
Khoisan traditional leadership institutions. This issue has been contested,
based on the
contention that, firstly,
the current traditional leadership framework addresses the role, functions and
status of all traditional leadership, including the Khoisan. Secondly, Khoisan
traditional leadership, royalty and succession are not the same as in the other
traditional leadership systems. Lastly, the Khoisan representatives have
consistently argued on the basis of being granted first nation status, which
will then mean they supersede other traditional groups.
The
President also announced that,
Government
will also table the National Traditional Affairs Bill, which makes provision
for the recognition of the Khoi-San communities, their leadership and
structures
.
It
is important to note that Khoisan traditional communities are concentrated in
the
·
Reports of
the Auditor-General of
The Department received an
unqualified audit opinion with findings on predetermined objectives from the
Auditor-General for 2011/12 financial year.
The basis for the findings was as
follows:
The Department did not have an
adequate system for identifying and recognising all irregular expenditure and
there were no satisfactory alternative procedures that could be performed to
obtain reasonable assurance that all irregular expenditure had been properly
recorded. Consequently, the Auditor-General was unable to obtain sufficient
appropriate audit evidence as to the completeness of the information on
irregular expenditure.
There were emphases of matters on:
-
Irregular expenditure
-
Significant uncertainties
-
Restatement of corresponding figures
-
Fruitless and wasteful expenditure.
Report on other legal and
regulatory requirements
-
Predetermined objectives reliability of information
-
Compliance with laws and regulations
-
Internal control.
·
Entities
reporting to the Department of Co-operative Governance and Department of
Traditional Affairs
South
African Local Government Association (SALGA)
The South
African Local Government Association (SALGA) has a mandate to represent,
support, advise on and profile organised local government interests. This
mandate is reinforced by the resolutions their 2007 National Conference, which
adopted critical resolutions to effectively put local government at the core of
service delivery processes in an efficient and effective local government
system. The Conference resolutions evolved, through a series of phases, into a
5-year strategic agenda, which is based on the following critical pillars;
·
Strategic
profiling
·
Support
and advice
·
Representation
SALGA received an unqualified audit report. The report
also determined that it had achieved 86% of its key performance indicators for
2010/11. SALGA has
conducted a Disaster Risk Management Assessment and developed a Guide on
Disaster Risk Management for Local Government. Budgetary constraints were a
major issue faced by SALGA, and it was as a result of this that SALGA was
operating at only 68% of capacity. Only R43 million of the R96 million required
was provided.
Commission for the Promotion and Protection of the Rights of Cultural,
Religious and Linguistic Communities (CRL Commission)
As its name suggests, the CRL Commission has a fundamental
responsibility to promote the right of communities to develop their
historically diminished progressive heritage.
The Cultural, Religious and
Linguistic Commission (CRL Commission) presented its 2010/11 Annual Report.
Twenty-nine cases had been referred to the Commission during that year, 22 of
which had been investigated/mediated and resolved, and seven of which were
outstanding.
The Commission received an
unqualified Audit Report with Emphasis of Matters for: irregular expenditure;
fruitless and wasteful expenditure; going concern under-funding; non-compliance
with legal requirements; lack of predetermined objectives and lack of internal
controls.
Municipal
Demarcation Board (MDB)
The
Committee had an interaction with the Municipal Demarcation Board (the Board).
The
mandate of the Board in terms of the principal Act is to conduct:
-
the determination and
re-determination of municipal boundaries;
-
the delimitation of
wards for local elections;
-
the declaration of
district municipal areas and withdrawal of such declarations; and
-
the assessment of the
capacity of district and local municipalities and the provision of advice
on matters connected hereto.
The Board made a presentation of its audit outcomes,
as well performance issues. in terms of audit information. The Board has
received an unqualified audit opinion with matters of emphasis. This was in
relation to irregular
expenditure of R726 012, which was in contravention of the Preferential Procurement
Policy Framework Act
.
The Board recorded a total income of
R37.9 million, with an expenditure of R36 million, resulting in an expense
variance of R1.6 million
7.
Observations, Recommendations and Timeframes
Observation
|
Recommendation
|
Timeframe
|
Programme 1 Administration: The committee noted
that the Budget for this programme has decreased from R205.4m to R201.4m in
the current year
The Committee notes that the endorsement of the
establishment of the department of Traditional Affairs as a separate
department was promulgated through a Presidential proclamation in 2010. The
institutionalization of the department is long overdue.
The Committee noted that, during the period under
review, a total departmental expenditure was R46.221b, which is 95% of the
total adjusted budget of R48.204b, we also note that the department
underspent on compensation of employees by R11.6m. This is attributed to the
slow pace of recruitment process.
|
Over the term, expenditure for Programme 1 budget be
adjusted/increased to fill the approved post
in the department for Traditional Affairs function.
The Committee recommends that National Treasury
should consider tofinalize negotiations of concluding the matter of the
department to have its own Vote.
The Committee recommends that, a database of
unemployed competent people with relevant skills should be kept, so that it
should be easy to draw in people where there are vacant post, to prevent this
unnecessary under spending.
|
Immediately
Implementation by the end of the next financial year
Ongoing basis
|
Programme 2: Policy Research and knowledge
management:
The committee noted that in terms of this programme
on service delivery, it has not performed well. Target dates on targeted
legislation in terms of policy and state of the nation address on co-opting
Khoisan communities into governance, were not met. Hence the amendment of the
Traditional Affairs Bill has not yet been brought to Parliament
Committee further noted that in the Departments
Annual Report it is stated that various policy and legislative projects were
processed in 2011 and would be taken to public domain in 2012 to be
finalized.
|
The Committee recommends that, in terms of this
programme, the department must fast-tract the issue of submitting the
proposed legislation to Cabinet and to Parliament for processing
The Committee recommends that this programme should
make sure that targets emanating from strategic plans should be met as per
mandate.
|
Before the end of the first quarter
Ongoing basis
|
Programme 3: the Committee noted that, as part of
the Departments intervention strategy, which the Committee also recommended
in 2010 BRRR, there should be a deployment of technical experts in vulnerable
rural municipalities, notes that by end February 2012 there were 93 technical
experts deployed to 90 municipalities throughout the country.
|
The Committee recommends that the support systems
that the Department is extending to those identified municipalities should be
extended also to those 81 municipalities identified for poor performance in
audit outcomes. The Department should come out with clear programmes on how
they are going to assist those municipalities to address issues on lack of
record keeping and quality of financial system
|
End of first quarter
|
Programme 4: Disaster Response Management: despite
the reality of the floods that we have experienced, the total budget for this
programme decreased by 35.77% from R816.2m to R555.2m. This cut is on Disaster
Relief fund.
The Committee further notes underspending of R19,3m
due to delays of doing assessments and the non-working relationship between
the DCoG and Department of Human Settlements.
|
The Committee recommends that National Treasury
should look at the importance of increasing this allocation, taking into
consideration issues of climate change.
The DCoG should look at streamlining the assessment
process. The Committee recommends that these two departments should establish
working relations by establishing a task team which will focus mainly on the
Disaster programme and the Department of Cooperative Governance to lead this
process.
|
Next financial year
Next financial year
|
Programme 5 - Provincial and Municipal Government
Support - only 6 of the 19 targets were met.
The Committee is of the view that targets should be more
realistic.
|
Measures are implemented to ensure that realistic
and measurable targets are implemented.
|
|
Programme 6 to increase access to basic
electricity, refuse removal, water and sanitation 66% was targeted, 77%
achieved final figures will only be released in September
|
Committee recommends that the figure should be
finalized to determine if target was met.
|
End of first quarter
|
The Committee noted that key strategic projects,
such as the establishment of South African National Apex Co-operation
(SANACO), were deferred to 2012/13 financial year. This resulted in the
Department underspending by R20.6m on goods and services
|
The Committee recommends that such tendencies should
be avoided because that reflects badly on the Departments performance and
the results of audit outcomes by A-G
|
Ongoing process
|
In the 2010 BRRR, the Committee noted that, in
responding to the Presidents call on fighting fraud and corruption, the
Department established an Anti-Corruption Inspectorate. In this financial
year, little progress has been made. Workshops and training have been
undertaken by senior officials on ethics management and fraud prevention
plans. The Inspectorate inherited 251 cases that were reportedly not
resolved, and only 10 cases were resolved. An amount of 241 cases are still
outstanding.
|
The Committee recommends that the Department reports
on the function of the unit, the outcome of cases forwarded to them..
|
Ongoing basis
|
The Committee notes that the almost all MPACs have
been established however the functionality of the committees is not evident
yet.
|
The Committee recommends the Department should come
up with a mechanism to measure effectiveness of these committees, and report
on what improvements have come to light since its establishment.
|
|
The Committee notes that an amount of R262m
earmarked for non-returning councilors was unspent due to incomplete
information received from municipalities and the process of obtaining tax
clearance from SARS.
|
The Committee recommends that this issue should be
taken seriously and be brought to closure, because it will reflect badly on
the Department s audit outcomes
|
|
The Committee notes that generally the performance
of SALGA is satisfactory. The Committee commends SALGA for the training for
councilors and this should be ongoing as 70% of the c council is new.
|
The committee recommends that SALGA should:
|
Ongoing process
|
The Committee is satisfied with the financial
performance of the Municipal Demarcation Board. Although strides have been
made to encourage public participation in the determination of boundaries
there is still room for improvement.
|
The Committee recommends that the MDB make use of
party liaison officers at the Independent Electoral Commission (IEC) and
constituency offices to improve public participation process.
|
Next financial year
|
The Committee notes that the in the past the
department mentioned the Training institute for Local Government. This
objective of this institution was for training on local government matters.
|
The Committee recommends that the Department brief
them on this matter.
|
Before end of the financial year.
|
Committee notes with concern the downward pattern
sof the MIG spending since 2008
|
Recommends that the Department does a presentation
to the committee on the concrete measures to be implemented to ensure thath
the spending improves
|
|
The committee acknowledges that the Department has
established the Municipal Infrastructure Support Agency (MISA) to assist
municipalities in spending its MIG funding.
|
The Committee recommends that the Department brief
them on the support provided to the municipalities and the effectiveness of
this support.
|
Ongoing basis
|
It is requested that the Minister should ensure the implementation of
all of the above recommendations.
8.
Conclusion
A general observation is that most matters of emphasis as raised by the
A-G are related to SCM regulation deviations. It should determine if this is
due to lack of capacity, incompetence or ulterior motives. This matter needs
urgent attention and needs to be dealt with in the appropriate manner.
The Department was allocated an amount of R48.9b, for the 2011/12
financial year. At the end of the third quarter, the Department had spent
R31.6b or 65.6% of the allocated budget. In the 2012/2013 financial year the
total allocation of the Department is R54.7b which represents a 17.8% real
increase.
The Committee is looking forward for more improvement on the spending
patterns of the Department and its performance
Report to be
considered.
[1]
Ibid
[2]
National Treasury (2012) ENE
[3]
National Treasury (2012) ENE
[4]
Ibid
[5]
National Treasury (2012)
[6]
Ibid
[7]
National Treasury (2012)
[8]
Ibid
[9]
National Treasury (2012)
[10]
African National Congress, January 8
th
Statement (2012)
[11]
Ngxiza (2010).
[12]
New Growth Path (2010)
[13]
National Planning Commission (2012)
National Development Plan Vision 2030
[14]
Department of Minerals and Energy
(2003).
[15]
President JG Zuma (2012)
[16]
National Treasury (2011).
Documents
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