KwaZulu-Natal Legislature Pietermaritzburg: 5 November 2009

Madam Speaker

As we engage in this important debate on municipalities as service delivery agents, it is essential that we explain that the joint committee – comprising Cooperative Governance and Traditional Affairs, and Finance – interrogated ten municipalities selected by the respective departments on the basis of the following criteria: the municipality’s prior year audit report; its submission of In Year Monitoring reports; its liquidity; its conditional grants not being cash-backed; and its service delivery performance.

The joint committee only interrogated ten municipalities due to severe programme constraints. The major concerns with almost all municipalities that were subjected to interrogation are likely to be widespread across the province - even as some municipalities, most notably Abaqulusi have moved, against the background of worsening municipal performance, from an adverse audit opinion to an unqualified one (with other matters) according to the Auditor-General’s latest Report on Audit Outcomes of the KwaZulu-Natal Local Government. Thus the joint committee is of the opinion that a similar rigorous interrogation should be done with all municipalities in KwaZulu-Natal.

This exercise could be undertaken by the joint committee or by Provincial Treasury and the Department of Cooperative Governance and Traditional Affairs, and a holistic approach adopted to impose administrative reforms in the management of these municipalities, to ensure essential service delivery to impoverished rural and urban areas.

The hearings exposed some challenges to service delivery which were not given serious consideration prior to the launch of wall-to-wall municipalities on 2 December 2000. Let me highlight the following: the establishment of non-viable municipalities which have no revenue base; operational issues of non-availability or inadequacy of infrastructure such as office and residential accommodation, communication facilities and roads, the paucity of skills and lack of incentives to attract scarce skills and to retain them under-developed rural areas; the backlog in the provision of electricity, clean portable water and sanitation facilities which conform to public health standards.

We appreciate the financial and technical support given to municipalities by both Treasury and the Department of Cooperative Governance and Traditional Affairs. The allocation of funds to local government should be urgently addressed to eliminate the backlogs resulting from past under-development. National Treasury and the national Department of Cooperative Governance and Traditional Affairs should bargain for stepped up allocation of funds particularly to low- and medium-capacity municipalities.

The hearings also exposed the following areas of grave concern: lack of political leadership in some municipalities; the deliberate flouting of the legal prescripts set out in the Municipal Systems Act, Municipal Finance Management Act, and the Public Finance Management Act. In some municipalities municipal managers have become a law unto themselves. There are instances of overbearing attitude, treatment of mayors, councillors and departmental officials with disdain and utter contempt. Lack of cooperation and willingness to accept professional technical guidance and advice is a recipe for poor service delivery which communities will not tolerate.

It was also distressing to observe that in certain rural municipalities important stakeholders, namely traditional leadership, were excluded from development initiatives such as the IDP process and the budget road shows. The high remuneration packages for section 57 officials i.e. municipal managers, CFOs and other managers fly in the face of service delivery. The joint committee expressed serious concerns about the affordability and sustainability of remuneration packages.

The joint committee was confronted with the challenge of how conditional grants are expended in those municipalities which are in financial crisis. The contravention of the law governing conditional grants constitutes financial misconduct. There is also the challenge of unspent balances of conditional grants in some municipalities. The joint committee was also confronted with the reality of National Treasury prescripts governing balances of unspent conditional grants which should be returned to National Treasury by 4 November 2009.

Madam Speaker, in conclusion, the joint hearings highlighted the outstanding forensic audit reports and other investigations initiated by the MEC for Cooperative Governance and Traditional Affairs. There were serious concerns about protracted criminal investigations. We demand expeditious finalisation of these matters and the institution of civil claims against the guilty.

I thank you.         

Contact: Dr Lionel Mtshali, 078 302 0929