Date: SEPTEMBER 2012

DEPARTMENTAL PRESENTATION TO PORTFOLIO COMMITTEE ON COOPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRSPRESENTED BY: MEC T.S DODOVU Date: SEPTEMBER 2012

PRESENTATION OUTLINE • 1. PURPOSE 2. GOVERNANCE • 3. FINANCIAL MANAGEMENT • 4. SERVICE DELIVERY • 5. BULK INFRASTRUTURE • 6. CORRUPTION

PURPOSE • TO brief the PC on Cooperative Governance and Traditional Affairs on the Audit outcome of the department and an overview of all the Municipalities in the North West Province in the following respects: • Governance • Financial management • Service delivery • Bulk Infrastructure and; • Corruption

GOVERNANCE……………(1) Intergovernmental Relations: • The District IGR Forums have not been functioning optimally as envisaged in the IGR Framework Act and as such the dlgta has prioritized to support and monitor these structures and improve their functionality. • 3 of 4 Districts IGR Forums have been resuscitated & functionality improved & are convened by Mayors (Political) Municipal Managers (Technical) • All four District Municipalities has appointed IGR manager to improve coordination of the forums • The department is also spearheading the establishment of the NW Technical Implementation Forum as the Provincial IGR Forum • The forum will coordinate the implementation of the Delivery Agreements, monitor and report on progress against the 12 Outcomes to Cabinet and EXCO Committee

GOVERNANCE……………(2) Implementation of MTAS-Background: • The development of MTAS process included robust engagements and diagnosis of the state of affairs and this process assisted both Provincial & Local Government to appreciate challenges faced by the municipalities. • The department has developed a provincial LGTAS implementation plan and prioritized certain programmes and municipalities to be implemented in the 2010/11 and 2011/12 financial years. • The provincial local government turnaround strategy plan focused on four critical priorities which are: • Improved Municipal Finance Management and Viability • Improved Municipal Governance and Administration • Operations and maintenance of infrastructure and Improved Infrastructure implementation and grant funding spending • Improved Municipal Infrastructure Planning and implementation

GOVERNANCE……………(3)Implementation of MTAS-Achievements:

GOVERNANCE……………(4) Implementation of MTAS-Achievements:

GOVERNANCE……………(5)Implementation of MTAS-Achievements:

GOVERNANCE……………(6) Public Participation • The total number of wards within the province is 383 and the total number of ward committees established is 382. The only ward committee not established is ward 28 in Rustenburg. • Members of all ward committees established were taken through induction workshops to orientate them on their new roles and responsibilities. • Each member of the ward committee was provided with copies of the following legislation: Constitution, Municipal Structures Act, Municipal Systems Act, MFMA, IGR Act 13 and PAJA. • A total number of 1443 ward committee members underwent an accredited training on Core Municipal Processes and Service Delivery that was offered by DCOG through funds donated by EU Community

GOVERNANCE……………(7) Public Participation continues • The department has developed a tool in a form of a questionnaire to assess functionality of ward committees on half yearly basis. Each local municipality is required to submit a report based on the questionnaire. Based on these reports, the functionality of ward committees within this province can be regarded as above average. • The department has also established Provincial Ward Committee Coordinators Forum consisting of departmental and officials from the municipalities Speakers offices. The purpose of the forum is to enhance functionality and effectiveness of ward committees by sharing best practices and also providing the necessary guidance with the view of maximizing public participation.

GOVERNANCE……………(8) Section 139 1(b) interventions: Background • Department of Local Government and Traditional Affairs motivated to the Provincial Executive Council for the invocation of section 139 interventions in four Local Municipalities in the Province • Provincial Executive Council on the basis of the motivations by Department of Local Government and Traditional Affairs resolved to invoke section 139(1)(b) interventions of the Constitution in the following municipalities during the 2009-10 and 2010-11 financial years as follows: • Madibeng LM – March 2010 • Moses Kotane LM – March 2010 • Tswaing LM – March 2010 • Mafikeng LM – July 2010

GOVERNANCE……………(9) Section 139 1(b) interventions: Background • These interventions were initially invoked for six months and later extended until the end of the previous Local Government term by the Provincial Executive Council • The interventions were as a result of among others the ff: • High level of polarization in the municipalities • Numerous allegations of fraud, corruption, and maladministration • Poor service delivery standards and service delivery protests • Weak political oversight by councils • Weak and ineffective administrations and labour unrests • Financial mismanagement impacting on financial viability of the municipalities • Poor public involvement and engagement

GOVERNANCE……………(10) Section 139 1(b) interventions: Terms of Reference • Premier appointed administrators to implement the interventions on behalf of EXCO to address among others ff • Stabilize administration by developing administrative systems, ensuring and enforcing compliance, developing controls etc • Fast-track and unblock service delivery programmes • Improve the financial viability of the municipalities • Build and improve on administrative capacity • Stabilize governance structures of councils • Investigate fraud, corruption, maladministration and take appropriate action

GOVERNANCE……………(11) Section 139 1(b) interventions Achievements: Madibeng L.M • Long outstanding debt owed by municipality being partly addressed especially Tshwane debt for bulk water and PIC loan in which a loan arrangement was made and the repayment reduced by 5 years. • Outstanding creditors who are in excess of 90 days have been wiped off and those in excess of 60 days standing less than R10m • The disciplinary processes against Municipal Manager and the acting Chief Financial Officer were concluded • Local Labour Forum was revived and approach developed to address matters such as contract workers, volunteers, interns etc • Service delivery projects were unblocked and fast-tracked, these projects included amongst others upgrading of water treatment and purification plants; electricity substation; wastewater treatment plant; roads and storm water maintenance and road paving. • Stabilised community protests against poor service delivery

GOVERNANCE……………(12) Section 139 1(b) interventions Achievements: Moses Kotane L.M • Managed to improve on Infrastructure Grants by spending 85% of MIG during 2009-10 financial compared to the past financial years • Supply Chain Management Committees Restructured and Procedures Developed • The closure of operations of the dysfunctional Development Agency has been concluded • Improved on the relations of TROIKA in the municipality that led to its meetings held regularly. There is stability in the municipality, community protests and labour unrest are minimized • Outstanding matters on alleged fraud & corruption are being finalized. Completed investigation of spending of R59 million and identified that R57.6 million was spent on projects and R1.4 spent on consultants hired to assist PMU in projects running

GOVERNANCE……………(13) Section 139 1(b) interventions Achievements: Tswaing L.M • Improved the supply of potable water to the community of Sannieshof/Agisanang and Letsopa through the installation of new water pumps. Sewerage and sanitation removal has improved. Street lighting has improved across the Municipality and stands at 80% • The collection rate within the Municipality has improved from 47% to 65%, after the municipality introduced cutting of electricity supply to all defaulters • The municipality achieved greater strides in changing the Ratepayers Associations from total withholding of revenue to a negotiable undertaking, whereby in Ottosdal and Delareyville has begun to pay directly to the Municipality • The blocked housing project in Letsopa extension 5 has been unblocked

GOVERNANCE……………(14) Section 139 1(b) interventions Achievements: Mafikeng L.M • Service delivery quick wins programme developed and being implemented, the programme included refuse removal, street/public lights (48 high mast lights were energised), patching of potholes and the programme led to improvement of service delivery in and around Mafikeng including surrounding villages • Overall expenditure was reduced by R19.5 million from R380.7 million to 361.2 million, Income reduced by R 29.630 million from R 413.977 million to R 384.347 million and cash funding was improved significantly from a cash deficit of ± R104 million to R 41.06 million. • Disciplinary case of suspended Municipal Manager is concluded and disciplinary action being instituted against some managers • SIU investigations on the original scope are concluded and findings have been referred to the SIU legal services for final recommendations & action.

FINANCIAL MANAGEMENT……(1) Establishment and Effectiveness of MPACS: • All 23 MPACS were established by November 2011 • The department in partnership with AG conducted induction and orientation work sessions for all 23 MPACs per district from November 2011- March 2012 • The department in partnership with PT and APAC, conduct another round of work sessions for MPACs in May-June 2012 • Annual Work plans have been provided for each MPAC for adoption and implementation by Council • District Based forums to support MPACs commenced on 28 August 2012 • The department is in the process of establishing and launching District and Provincial MPACS Chairpersons

FINANCIAL MANAGEMENT……(2)Municipal Audit Outcomes for 2008/09, 2009/10 and 2010/11

FINANCIAL MANAGEMENT……(3) Municipal Audit Outcomes for 2008/09, 2009/10 and 2010/11

FINANCIAL MANAGEMENT……(6) Support plans to improve audit outcomes towards clean audit • PT developed a Municipal Financial Management Support Programme , the Programme was launched on the 21st June 2012 by the MEC for Finance. • The programme is being rolled out according to the following phases: • Phase 1. • Basic Support – deployment of graduates • Technical Support – preparation and review of AFS • Phase 2 • Intensive /Turn-around support for identified municipalities • GRAP 17 Implementation for the identified municipalities

FINANCIAL MANAGEMENT……(7) Support plans to improve audit outcomes towards clean audit • Department in partnership DSAC is rolling out a record management project to entrench the culture of proper records management and promotion of good governance to enhance service delivery • The programme is being rolled out according to the following phases: • Phase 1. • Districts Project launch -deployment of graduates • Phase 2 • Training of the 24 municipalities • Project monitoring, supporting and monthly reporting

FINANCIAL MANAGEMENT……(8)Debt owed to municipalities by government departments as at of end June 2012

FINANCIAL MANAGEMENT……(9) Functionality of internal structures: Audit Committees • The following Municipal Audit Committees are functional and they submit reports as expected: • Bojanala Platinum District Audit committee which is a shared service and serves the District Municipality, Moretele L.M and Kgetleng-Rivier L.M • Rusternburg L.M Audit Committee • Madibeng L.M Audit Committee • Dr. KK District Audit Committee which is shared service that serves the District Municipality, Maqquassi Hills L.M and Ventersdorp L.M • The following audit committee are not functional: • Dr. RSM District Audit Committee which serves DM and all its locals • NMM District Audit Committee which serves DM and all its locals except for Mafikeng L.M which is also not functional

SERVICE DELIVERY……(1) Status and pace of service deliver • The following tables shows the allocations and expenditure pattern per Municipality from 2009/10 to 2010-11 financial years for Municipal Infrastructure Grant (MIG) and also expenditure per category in terms of Water, Sanitation, Roads and electricity

SERVICE DELIVERY……(1) Status and pace of service delivery

SERVICE DELIVERY……(3) Adoption and credibility of IDP’s • The North West Province comprises of four district municipalities and each district has its family of locals i.e. • Bojanala Platinum District Municipality: (Rustenburg; Moretele; Kgetlengrivier; Madibeng and Moses Kotane) • Dr. Kenneth Kaunda District Municipality: (Matlosana; Tlokwe; Maquassi-Hills and Ventersdorp) • Dr. Ruth S Mompati District Municipality: (Naledi; Kagisano-Molopo; Greater Taung; Mamusa and Lekwa-Teemane) • NgakaModiriMolema District Municipality: (Mafikeng; Ditsobotla; Ratlou; RamotshereMoiloa and Tswaing) • All 23 municipalities were supported with development of 3rd generation IDP • All 23 municipalities submitted both IDP process plans and adopted IDPs as required by legislation (100% compliance) • Most municipalities in the Province are low capacitated municipalities and are therefore dependent on grants • The budget of municipalities is mostly not linked to the IDP. i.e (lack of internal communication between departments)

SERVICE DELIVERY……(4) Implementation and monitoring of IDP’s • Implementation of the adopted IDP Process plan • Continuous monitoring and constant reminders; • Monitoring publication of IDPs; • Support and monitor municipalities with sittings of IDP Structures • Challenges: • Irregular/lack of lack of communication for sittings of IDP Structures • Poor participation of government departments • Remedial Action: • IDP awareness and training to strengthen participation of sector departments and other stakeholders

BULK INFRASTRUCTURE……(1)Water and Sanitation: availability and functionality of bulk

BULK INFRASTRUCTURE……(2)Electricity: availability and functionality of bulk • The national government made a commitment to increase access to electricity from 81% to 92% by 2014. • Since 1994 data shows that 82% of househoulds in the province have been electrified. The total estimated backlog in the province is 159 338.

BULK INFRASTRUCTURE……(3)Housing: availability and functionality of bulk • The current housing backlog in the Province is estimated at 238 000 households. The table below depicts the housing needs in the province as per community survey conducted in 2007.

CORRUPTION……(1) • The Department, approached the Special Investigations to assist with forensic investigations in all 23 Municipalities in the Province; after the receipt of allegations of fraud, corruptions, Nepotism and Maladministration's • The President through Proclamation 72/2009, in Government Gazette 32703 of 10 November 2009 mandated the SIU to Investigate all North West Province 23 Municipalities • The SIU’s mandate covers period from 1 Jan 2005 to 10 Nov 2009 • The investigation is in the delivery phase currently focused on matters at the 8 prioritised municipalities identified by the NW Department of Local Government and Traditional affairs

CORRUPTION……(2) • ALLEGATIONS INVESTIGATED BY THE SIU • The irregular procurement of goods and services without the proper tender procedures being followed • Human Resources matters, non-compliance with policies during the recruitment process • Loss of municipal funds as a result of overpayments, advances, loans, allowances and salaries to Councilors and Municipal employees • Unauthorised, irregular and/or wasteful expenditure • Irregular alienation of land and/ or municipal assets • Irregularities in the budget allocation for MIG projects • Payments of invoices and claims by the Municipalities without the necessary supporting documentation being submitted • Financial mismanagement (non-compliance with the MFMA and prescripts

Overview of performance of the SIU

CORRUPTION……..(4) • The Department receives allegations from PSC for inquiry and investigations then reports back to the PSC. • In 2011 the Department received 28 cases of corruption, fraud, nepotism and Maladministration for investigation from the PSC. • Out of the 28 cases received only 24 cases were for North West Municipalities.

CORRUPTION…..(5) • The process of investigation is follows: • Phase 1: The department analyzed cases received and contact complainants for clarity and to provide more information. • Phase 2: Affected Municipalities would be contacted and informed about allegations. • Phase 3: Investigations and report back to PSC

CORRUPTION…….(6) • The table below shows the progress of the Department to date. • Moretele Lm 6 cases ongoing investigations • Rustenburg Lm 2 cases ongoing investigations • Moses Kotane Lm 2 cases ongoing investigations • Madibeng Lm 3 cases ongoing investigations • Matlosane Lm 4 cases ongoing investigations • Tlokwe Lm 1 case ongoing investigations • Maquassi Hills Lm 1 case ongoing investigations • Dr Kenneth Kaunda Dm 1 case ongoing investigations • Mafikeng Lm 1 case ongoing investigations • Tswaing Lm 1 case ongoing investigations • Ramotshere Moilwa Lm 1 case ongoing investigations • Greater Taung Lm 1 case ongoing investigations

THANK YOU

Date: SEPTEMBER 2012