Date: 05/11/2009
Source: The Inkatha Freedom Party
Title: IFP: Mtshali: Debate by Inkatha Freedom Party MP, on the Joint Finance and Cooperative Governance and Traditional Affairs Portfolio Committees' report on KZN Municipalities, Durban

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 ones (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 seriout 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 finalization
of these matters and the institution of civil claims against the guilty.

I thank you.