SALGA: National Meeting with Municipal Managers

1. SALGA: National Meeting with Municipal Managers 28 February 2011: City of Ekhuruleni Germiston

2. UNFUNDED MANDATES Point of departure: CONSTITUTION Chapter one deals with “FOUNDING PROVISIONS” Section 1(c): Supremacy of the Constitution and the RULE of Law. Section 2: - Constitution is the supreme law - Laws inconsistant is invalid - Obligations imposed MUST be fulfilled

3. In our environment we accept: Supremacy of the Constitution “Laws are laws” Principle of LEGALITY Principle of the RULE of LAW

4. Where does the word “unfunded mandate” originate from? The White Paper on Local Government 9 March 1998 2.2 Coordinated decentralisation and the assignment of powers: National and provincial government are constitutionally permitted to devolve powers and functions to local government. While decentralisation is often desirable to improve the effectiveness of government as a whole, it is not without problems. The devolution of a new function to local government may occur without it being accompanied by the financial and administrative capacity required to sustain it - what is termed an unfunded mandate. Unfunded mandates strain local government's limited resources and, ultimately, result in a lack of delivery.

5. In order to ensure that the combination of decentralisation initiatives by different departments does not overwhelm local government, and that unfunded mandates are avoided, it is proposed that all legislation dealing with the decentralisation or assignment of powers to local government is referred to the local government MinMec for discussion and comment. In addition, provincial government should monitor the extent to which coordination of governmental activities within a municipal area is taking place through the relevant municipality, and report to MinMec in this regard.

6. 3. Support mechanisms for municipal transformation • In addition to creating the enabling legal framework described above, national government will facilitate the establishment of mechanisms to support municipal transformation. These include: • The coordinated decentralisation of powers and functions to local government. This will be achieved through: • Avoiding unfunded mandates.

7. Local Government in the spotlight Are WE delivering on our mandate? WHAT IS OUR MANDATE? Constitution: Section 155 & 156, schedules 4B & 5B and section 229 Common law: Merely because Municipalities are LEGAL ENTITIES (confirmed by MSA)

8. Objects of, and developmental role of Local Goverment Section 152 of the Constitution: Important to note that these are objects and not FUNCTIONS, per se Section 153 of the Constitution: Refers to the developmental duties of Local Government and ephasizes the fact that munic’s must give priority to basic needs.

9. Principles of co-operative government and inter-governmental relations: (sect 41 of Constitution) S 41 (1)All spheres of government… MUST (e) “respect the constitutional status, institutions, powers and functions of government in the other spheres”; (f) “not assume any power or function except those conferred on them in terms of the Constitution”;

10. No sphere may interfere The fact that no sphere may interfere is supported by case law. Constitutional Court Judgment: Fedsure Life Assurance Ltd and Others v Greater Johannesburg Transitional Metropolitan Council and Others 1998 (12) BCLR 1458 (CC)  [58] It seems central to the conception of our constitutional order that the legislature and executive in every sphere are constrained by the principle that they may exercise no power and perform no function beyond that conferred upon them by law. At least in this sense, then, the principle of legality is implied within the terms of the interim Constitution. Whether the principle of the rule of law has greater content than the principle of legality is not necessary for us to decide here. We need merely hold that fundamental to the interim Constitution is a principle of legality. (Rule of law and legality)

11. Why do WE still deliver/render services re UNFUNDED MANDATES? • Inherited functions: • It is of utmost importance that National and Provincial Government take up their constitutional mandate: • either take it back, or • fund them 100%

12. Ways of doing it: Assign Delegate Agency Since 2000 no functions were assigned or delegated

13. Strategic risk We under-estimate the importance!! Risk & Control must become a daily activity Dis die kritiese goed wat jou belemmer om jou doel te bereik Risk Strategic risk External & internal risk Objective Process Top management agenda Internal audit plan

14. Risk profile

15. unacceptable risks 10 15 20 25 12 16 20 5 12 15 4 8 acceptable risks 10 3 6 9 2 4 6 8 1 2 3 4 5 Risk management strategy

16. What is the impact of UNFUNDED MANDATES on Munic’s? Swartland Mun, based on audited financial statements Munic’s act UNLAWFUL In CONTRADICTION with the Constitution It’s an FORBIDDEN activity i t o sect 164 of the MFMA Sect 29 of MFMA is misused, it only relates to emergency circumstances

17. List of unfunded mandates • Libraries •  Museums •  Disaster Management •  Environmental regulation enforcement • - Bio diversity Bill; • Environmental Protected areas Bill •  Regional Town Planning •  Passenger Transport Management •  Traffic enforcement on Provincial / National Roads •  Vehicle licensing •  Drivers/learners licensing

18. List continue, …….. Road worthy tests  Roads  Health – Primary Health  Housing  Ambulance

20. Auditor General Requested the AG, mr Terence Nombembe in February 2010 to audit UNFUNDED MANDATES due to the fact that funding the said activities is unlawful

21. Recent responses received Minic’s do receive Equitable share funds and MIG Services should be rendered in the spirit of co-operative Governance and in terms of IGFA But, not the intention of section 214 of Constitution, regarding the allocation of revenue, and The IGFA is superseded by the Constitution

22. What are the options? 1. Amend the Constitution to make unfunded mandates the function of Local Government. National and Provincial governments take up their statutory mandate Determine the capacity of every munic, decide to: - Assign - Delegate - Agency 4. Above mentioned is an administrative process with every munic

23. What are OUR options? Inform Nat and Prov government that Local Government is of the opinion that unfunded and under funded mandates should be rendered at local level. Collectively request Nat and Prov gov to provide sufficient funds to render the said services Phased approach with effect from 1 April 2012 (this will enable Nat and Prov gov to budget accordingly) NT must request Munic’s to “ring fence” unfunded and under funded mandates. AG to audit content of par 4 and the major impact it has on the financial viability of munic’s

24. Commitments made by President Zuma Enhanced service delivery Performance management Accountabiliy (at present we operating with badly designed processes Creating jobs If WE do not address the impact that UNFUNDED MANDATES have on our ability to render sustainable services we will not be able to oblige on the call of the President.

25. THE POWER OF PURPOSE “The purpose of life, is a life of purpose” George Bernard Shaw The MAIN THING is to keep the MAIN THING the MAIN THING. What is OUR’s? Everything is created twice. First in the mind, then in reality.

26. HIGH SUSTAINABLE VALUE COSY ENVIRONMENT ORGANISATIONAL FOCUS DEAD IN THE WATER SHORT TERM RESULTS LOW OPERATIONAL FOCUS HIGH The level of sustainable performance is determined by leaders

27. “The only way to control our (local governments’) future is to create it”

28. Thank youDankieNdiya bulelaKeya leboha