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PART 1: COGTA'S MANDATE. PRESENTATION TO THE SELECT COMMITTEE ON FINANCE Date: 16 July 2014. CONTENTS. Constitutional foundation of CoGTA’s mandate Legislative mandate of CoGTA CoGTA’s mandate as a Ministry. CONSTITUTIONAL FOUNDATION OF COGTA’S MANDATE. - PowerPoint PPT Presentation
Citation preview
PRESENTATION TO THE SELECT COMMITTEE ON FINANCE
Date: 16 July 2014
PART 1: COGTA'S MANDATE
CONTENTS
1. Constitutional foundation of CoGTA’s mandate
2. Legislative mandate of CoGTA
3. CoGTA’s mandate as a Ministry
2
CONSTITUTIONAL FOUNDATION OF COGTA’S MANDATE
The COGTA Ministry comprises the Department of Cooperative Governance and the Department of Traditional Affairs
Key elements and Constitutional foundations of CoGTA’s mandate: System of Cooperative Government (Chapter 3 of
the Constitution); Bill of Rights (Chapter 2); Provinces (Chapter 6 of the Constitution); Local Government (Chapter 7 of the Constitution); & Traditional Leaders (Chapter 12 of the Constitution).
3
CONSTITUTIONAL FOUNDATION OF COGTA’S MANDATE
System of Cooperative Government: Chapter 3 [section 40 (1)] of the Constitution constitutes government as National, Provincial and Local spheres, which are distinctive, inter-dependent and interrelated;
Collaboration between and among national departments, provincial departments and municipalities is crucial:
Section 40 (2) enjoins all spheres of government to observe and adhere to the principles of cooperative government and intergovernmental relations set out in section 41;
Chapter 7 [section 151(1)] provides for the establishment of municipalities for the whole of the territory of the Republic;
Section 154 (1) of the Constitution obliges National and Provincial government to support and strengthen the capacity of municipalities to manage their own affairs, to exercise their powers and perform their functions”.
4
CONSTITUTIONAL FOUNDATION OF COGTA’S MANDATE
The mandate of the Department of Traditional Affairs is derived from:
Sections 211 and 212 of the Constitution which stipulates that:
“The institution, status and role of traditional leadership, according to customary law, are recognized, subject to the Constitution”;
“National legislation may provide for a role for traditional leadership as an institution at local level on matters affecting local communities”.
Section 30 of the Constitution, on Language and Culture: “everyone has the right to use the language and participate in the cultural life of their choice, but no-one exercising these rights may do so in a manner inconsistent with any provision of the Bill of Rights.”
Section 31 of the Constitution on Cultural, Religious and Linguistic Communities: “persons belonging to a cultural, religious or linguistic community may not be denied the right, with other members of that community to enjoy their culture, practice their religion and use their language; to form; join or maintain cultural, religious and linguistic associations and other organs of civil society.”
5
Constitutional Foundation of COGTA’s mandate
Local government at coalface – at the service of citizens
• The Constitution defines the Republic of South Africa as one, sovereign, democratic state founded on, among others, the following values:
o Human dignity, the achievement of equality and the advancement of human rights and fundamental freedoms;
• The Constitution contains a Bill of Rights which reaffirms the democratic values of human dignity, equality and freedom;
• The Bill of Rights provides everyone with, among others, the right to human dignity and an environment that is not harmful to their health and wellbeing, and access to water and adequate housing.
• The Constitution enjoins the State to respect, protect and fulfil the rights in the Bill of Rights.
6
LEGISLATIVE MANDATE OF COGTA
DEPARTMENT OF COOPERATIVE GOVERNANCE
DEPARTMENT OF TRADITIONAL AFFAIRS
Municipal Property Rates Act, 2004 The Traditional Leadership and Governance Framework Act, 2003
The Intergovernmental Relations Framework Act, 2005
The National House of Traditional Leaders Act, 2009
Local Government Municipal Structures Act, 1998
Local Government Municipal Finance Management Act, 2003
Local Government Municipal Systems Act, 2000
Disaster Management Act, 2002
CoGTA will give effect to it’s mandate through the development of policies and legislation with regard to local government and traditional leaders within the legislative framework that includes:
7
COGTA’S MANDATE AS A MINISTRY
As the Ministry of CoGTA our primary mandate is to: Develop and monitor the implementation of national
policy and legislation seeking to transform and strengthen key institutions and mechanisms of governance to fulfill their developmental role.
Develop, promote and monitor mechanisms, systems and structures to enable integrated service delivery and implementation within government.
Promote sustainable development by providing support to and exercising oversight over provincial and local government.
.
8
Fiscal Challenges in Municipalities and Support/Interventions in relations the instruments administered by the Department
Part 2: Fiscal Investment and Challenges
OUTLINE OF PRESENTATION1. Introduction
2.Constitutional Provisions
3.Equitable Share to municipalities per province
4.Municipal Infrastructure Grant per province
5.MIG Expenditure
6.Debt Management
7.Challenges faced by municipalities
8.MISA role in addressing the challenges
9.Audit outcomes for municipalities
10.Interventions/Actions planned
11.Conclusions
10
INTRODUCTION
We will seek to provide a summary of the investment that flows directly and indirectly to municipalities aggregated per province.
We will also provide some of the challenges experienced in the implementation of fiscal instruments that we administer and how these are mitigated through MISA.
We will look at the Debt owed to municipalities by Households, Business, Government and others aggregated per province
We will also provide audit outcomes summary for the last four financial years and the plans to support municipalities to improve on their audit outcomes.
The audit outcomes of the 12/13 financial year will not be in the presentation because AGSA is releasing them at of July 2014
11
Constitutional Provisions
Section 214 provide for the equitable shares and allocations of revenues raised nationally
These revenues are shared or distributed conditionally or unconditionally through the Division of Revenue Act which is passed annually
Section 227(1) of the Constitution provides for the entitlement of provinces and LG to the equitable share of national raised revenue.
This is so to enable it to provide basic services and perform functions allocated to it.
Section227(1)(b) further provides for allocations that may be received from national government revenue, either conditionally or unconditionally
LG receives, among others, the LGES and the Municipal Infrastructure Grant, with the later being conditional
12
The Intergovernmental Fiscal System
Chapter 13 of the Constitution sets out the guiding principles on intergovernmental financial matters including treasury control, the equitable division of revenue between the 3 spheres of government and the fiscal powers of provincial and local government among other matters.
The South African Intergovernmental Fiscal System has been in place now for the past 18 years.
It must be mentioned that the current system allocate almost 9% of nationally raised revenue to LG and around 90% is shared between national government and provincial governments
Some commentators are of the view that the system has matured and needs minor adjustments to address some of its rigidities.
There is also a contrary view that suggests that the system served South Africa well during its transitional phase and needs a thorough review13
Principles guiding the Intergovernmental Fiscal System The system should be consistent with the Constitution; The system should be clear, consistent and stable; The system should be implementable and administratively
practical; Powers and functions should be aligned to expenditure
responsibilities; The system should allow for ease of regulation and oversight;
and Provision must be given to essential or basic services.
14
CONDITIONAL GRANTS ALLOCATION TO MUNICIPALITIES OVER THE MTEF
15
GRANT 2014/15 (R’000)
2015/16 (R’000)
2016/17 (R’000)
Municipal Infrastructure Grant 14 683 835 15 098 070 15 766 819
Integrated City Development Grant 255 000 266 000 292 950
Urban Settlement Development Grant 10 284 684 10 654 773 11 231 861
Neighbourhood Development Partnership Grant (Capital grant) 591 179 600 000 631 800
Public Transport Infrastructure Grant 4 968 029 5 097 881 5 104 052
Rural Household Infrastructure Grant 47 624 51 000 124 599
Rural Roads Asset Management Grant 75 223 97 763 102 944
Integrated National Electrification ( Municipal )Programme 1 104 658 2 056 090 2 165 063
Municipal Water Infrastructure Grant (SCHEDULE 5) 534 150 1 380 205 1 302 002
Municipal Disaster Recovery Grant 37 302 21 805
Regional Bulk Infrastructure Grant 3 986 896 4 221 654 4 623 602
Integrated National Electrification ( Eskom)Programme 2 948 037 3 680 043 3 875 085
Neighbourhood Development Partnership Grant (Technical Assistance) 58 300 55 000 52 000
Rural Households Infrastructure Grant 65 500 67 328
Municipal Water Infrastructure Grant (SCHEDULE 7) 524 826 1 291 729 1 511 545
TOTAL (Rounded figures) 40 165 000 44 639 000 46 784 000
LG EQUITABLE SHARE ALLOCATION OVER THE MTEF
PROVINCE 2014/15 (R’000) 2015/16 (R’000) 2016/17 (R’000) TOTAL PER PROVINCE(R’000)
Eastern Cape6 858 777 7 758 145 7 953 651
22 570 573
Free State3 324 604 3 403 269 3 340 251 10 068 124
Gauteng7 734 333 8 499 029 9 324 909 25 558 271
Kwazulu Natal8 653 044 9 868 168 10 353 912 28 875 124
Limpopo5 843 601 6 957 200 7 327 712 20 128 513
Mpumalanga3 995 937 4 514 085 4 747 032 13 257 054
Northern Cape1 266 168 1 373 651 1 405 426 4 045 245
North West3 751 372 4 301 590 4 528 631 12 581 593
Western Cape3 062 309 3 532 561 3 887 182 10 482 052
TOTAL (ES)44 490 000 50 208 000 52 869 000 147 567 000
MUNICIPAL GRANTS (TOTAL) 40 165 000 44 639 000 46 784 000 131 588 000
TOTAL (ES & GRANTS) 84 655 000 94 847 000 99 653 000 279 155 00016
MUNICIPAL INFRASTRUCTURE GRANT (MIG) ALLOCATION TO MUNICIPALITIES OVER THE 2014 MTEF
PROVINCE 2014/15 (R’000) 2015/16 (R’000) 2016/17 (R’000) TOTAL PER PROVINCE(R’000)
Eastern Cape 2,916,227 3,022,805 3,158,498
9,097,530
Free State 813,654 724,060 754,408
2,292,122
Gauteng 453,318 461,648 482,230
1,397,196
Kwazulu Natal 3,207,141 3,322,553 3,468,354
9,998,048
Limpopo 3,064,058 3,202,931 3,350,444
9,617,433
Mpumalanga 1,707,250 1,766,529 1,847,404
5,321,183
Northern Cape 450,944 452,351 467,659
1,370,954
North West 1,598,850 1,658,492 1,733,431
4,990,773
Western Cape 472,393 486,701 504,391
1,463,485
TOTAL (MIG) 14,683,835 15,098,070 15,766,819
45,548,724 17
MUNICIPALITIES’ PROJECTED OWN REVENUE(OPERATING) 2014/15 FINANCIAL YEARS
18
PROVINCE
Billed Property
Rates
Billed Service Charges
Electricity
Billed Service Charges
Water
Billed Service Charges Waste
water Mng
Billed Service Charges Waste Mng
Billed Service Charges Other
Other Revenue Total Revenue
Eastern Cape 2,664,310
6,040,241 1,546,675 833,982 621,733 433,310 3,918,798 16,059,049
Free State 1,492,572 4,889,730 1,514,124 580,676 460,338 67,426 2,477,669 11,482,536
Gauteng 17,273,372 40,793,785 12,143,168 4,818,729 3,709,880 607,932 8,683,585 88,030,451
Kwazulu Natal 8,395,219
16,490,610 4,618,993 1,300,222 962,310 220,371 4,917,087 36,904,812
Limpopo 903,973 2,325,449 766,666 165,241 175,494 55,107 1,132,923 5,524,853
Mpumalanga 1,293,282
2,596,181 847,257 261,385 346,589 19,614 1,107,219 6,471,527
Northern Cape 1,215,561
3,379,848 1,247,141 444,461 359,480 199,645 1,377,446 8,223,581
North West 727,361 1,541,233 544,479 214,222 178,953 62,633 452,284 3,721,165
Western Cape 7,798,393
15,283,823 3,803,554 2,018,288 1,528,748 271,663 4,793,357 35,497,826
TOTAL 41,764,042
93,340,900
27,032,058 10,637,206 8,343,525 1,937,701 28,860,367
211,915,800
MUNICIPALITIES’ PROJECTED OWN REVENUE (OPERATING) 2015/16 FINANCIAL YEARS
19
PROVINCE Billed Property
Rates
Billed Service Charges
Electricity
Billed Service Charges
Water
Billed Service Charges
Waste water Mng
Billed Service Charges
Waste Mng
Billed Service Charges
Other
Other Revenue
Total Revenue
Eastern Cape
2,891,774
6,508,968
1,703,016 922,717 687,011
468,449 4,119,115
17,301,050
Free State 1,598,981
5,364,629
1,633,915 622,629 492,280
81,200 2,639,414
12,433,048
Gauteng 18,660,855
44,384,853
13,138,246 5,146,789 3,995,851
647,854 9,203,321
95,177,769
Kwazulu Natal
8,918,765
17,887,578
4,917,231 1,404,947 1,034,569
235,713 5,252,274
39,651,076
Limpopo 960,040
2,499,391
815,789 179,444 186,147
56,301 1,069,690
5,766,801
Mpumalanga 1,393,632
2,680,218
986,772 313,799 382,021
20,655 1,213,320
6,990,418
Northern Cape
1,291,116
3,621,624
1,334,058 471,057 380,635
210,439 1,344,478
8,653,407
North West 785,089
1,661,912
583,142 225,937 192,719
29,618 475,254
3,953,673
Western Cape
8,325,126
16,607,118
4,175,881 2,216,853 1,661,531
294,956 5,064,117
38,345,583
TOTAL 44,825,377
101,216,291
29,288,050 11,504,172 9,012,764
2,045,185 30,380,984
228,272,823
Transfers and own revenues for different types of municipalities, 2012/13 Budgets
20
ProvinceAllocated
09/10 (R'000)Expenditure
(R'000)Expenditure
%
Balance Unspent (R'000)
Allocated10/11 (R'000)
Expenditure(R’000)
Expenditure% 10/11
Balance Unspent
10/11(R’000)
Eastern Cape 1,892,079 1,720,894 91.0% 171,182
2,193,444
2,085,653 95.09% 107,791
Free State 793,030 683,381 86.2% 109,646
869,071
754,001 86.76% 115,070
Gauteng 283,204 219,973 77.7% 63,233
379,349
326,514 86.07%
52,835
KwaZulu Natal 1,872,214 1,827,929 97.6% 44,317
2,160,896
1,954,584 90.45% 206,312
Limpopo 1,465,222 1,402,970 95.8% 62,250
1,688,104
1,358,280 80.46% 329,824
Mpumalanga 928,752 734,141 79.0% 194,610
978,689
799,638 81.71% 179,051
Northern Cape 335,710 241,438 71.9% 94,271
353,286
275,013 77.84%
78,273
North West 896,277 708,910 79.1% 187,369
989,881
680,629 68.76% 309,252
Western Cape 272,185 272,185 100.0% 0
312,086
311,609 99.85%
477
TOTAL 8,738,672 7,811,821 89.4% 926,878
9,924,806
8,545,922 86.11% 1,378,884
National Overview of MIG expenditure 2009/10-2010-11National Overview of MIG expenditure 2009/10-2010-11
National Overview of MIG expenditure 2011/12-12-13National Overview of MIG expenditure 2011/12-12-13
PROVINCEAllocated
11/12 (R'000)
Expenditure to date
(R'000)
Expenditure as %
allocation
Balance Unspent (R'000)
Allocated 12/13
(R'000)
Expenditure (R'000)
Expenditure as %
allocation
Balance Unspent (R'000)
Eastern Cape
2,405,727
2,019,91
9 83.96%
385,807
2,918,290
2,580,727 88.43%
337,563
Free State 841,111
767,148 91.21%
73,962
1,020,313
964,527 94.53%
55,786
Gauteng 399,532
317,715 79.52%
81,816
484,655
446,994 92.23%
37,661
KwaZulu Natal
2,598,937
2,181,93
7 83.95%
416,998
3,152,666
2,897,792 91.92%
254,874
Limpopo
2,030,304
1,485,01
3 73.14%
545,289
2,462,883
1,479,424 60.07%
980,988 Mpumalanga
1,177,082
873,070 74.17%
304,009
1,427,874
982,951 68.84%
444,922
Northern Cape
424,909
299,602 70.51%
125,301
515,429
381,218 73.96%
134,211
North West
1,190,545
931,278 78.22%
259,267
1,444,203
1,130,014 78.24%
314,189 Western Cape
375,358
372,736 99.30%
2,622
455,320
455,320 100.00%
0
TOTAL
11,443,505
9,248,41
8 80.82%
2,195,071
13,881,633
11,318,967 81.54%
2,560,194
2013/14 MIG EXPENDITURE AS AT END MAY 2014
ProvinceAllocated
(R'000)
Transferred to date (R’000)
Expenditure to date (R’000)
Expenditure as %
allocation
Expenditure as %
transferred
Balance Unspent (R’000)
Eastern Cape
2,952,906
2,952,906
2,474,256 83.79% 83.79%
478,650
Free State
968,682
968,682
805,321 83.14% 83.14%
163,361
Gauteng
456,461
456,461
333,781 73.12% 73.12%
122,680 KwaZulu Natal
3,193,259
3,193,259
2,586,054 80.98% 80.98%
607,205
Limpopo
2,650,869
2,650,869
1,659,505 62.60% 62.60%
991,364
Mpumalanga
1,565,716
1,565,716
1,145,332 73.15% 73.15%
420,384 Northern Cape
499,123
499,123
322,264 64.57% 64.57%
176,859
North West
1,481,743
1,481,743
1,094,073 73.84% 73.84%
387,670 Western Cape
455,688
455,688
346,979 76.14% 76.14%
108,709
TOTAL
14,224,447
14,224,447
10,767,565 75.70% 75.70%
3,456,882 23
MIG expenditure comparison
The MIG expenditure over the past four financial years has been always been above 80%
The MIG allocation quantum has been increasing over the years and the balance unspent has always been an issue of concern;
The support initiatives like Siyenza manje were introduced to support municipalities
Challenges contributing to under-expenditure were identified-which will be outlined in the slides below
The establishment of a Special Purpose Vehicle to support municipalities to spend on their infrastructure was muted around 2009 and culminated in the establishment of MISA
24
Lack of municipal readiness to address extension of basic services to areas where there are no services, especially with regards to project prioritisation and registration.
Lack of information regarding basic services backlogs per ward/village in targeted municipalities.
Non-functional water schemes, resulting to inconsistence water supply. Outdated sector plans to direct future MIG and other funds to areas of
high priorities. Poor project preparation and packaging to achieve efficiency and
attraction of alternative funding Lack of contract and project management skills Poor financial management threaten the sustainability and viability of
most municipalities. Poor Supply Chain Management Processes with regard to
procurement leading to delays in project implementation and poor spending on infrastructure grants
Lack of infrastructure asset management practices in particular, GRAP 17 asset registers
MIG expenditure challenges which were further confirmed by the diagnostic conducted by MISA
23-04-2025
Overloaded Waste Water Treatment Works that require refurbishment
Urgent need for road classificationDeteriorated road conditions on both municipal and provincial
roads Landfill sites not licensed and the Municipalities require
support with the licensing process.Municipalities requires assistance with the development of
operations and maintenance plansHigh water and electricity losses due to illegal connections,
vandalism of infrastructure assets and problematic billing systems
MIG expenditure challenges which were further confirmed by the diagnostic conducted by MISA
23-04-2026
Severe lack of skilled personnel in infrastructure and service delivery units.
Lack of credible Master Plans for the development of service delivery infrastructure.
Inadequate focus on maintenance and operations of existing infrastructure remains a huge problem across the board.
Municipalities unable to attain blue drop and green drop certification.
Lack of implementation of municipal by lawsPrevalent governance problems affecting service delivery
MIG expenditure challenges which were further confirmed by the diagnostic conducted by MISA
23-04-2027
MISA’s Role and Responsibility in relation to challenges identified
23-04-2028
Flowing from the mandate, MISA’s primary role and responsibilities are:
To support municipalities to conduct effective infrastructure planning;To support and assist with the delivery of infrastructure in municipalities; To support and assist with operation and maintenance of infrastructure in municipalities; and To build the capacity of municipalities to undertake effective planning, delivery, operations and management of municipal infrastructure
MISA support initiatives
• We are currently through MISA, providing support to 121 municipalities in the country. Of these, a total of 92 municipalities are from the 108 municipalities approved by Cabinet and an additional 29 municipalities identified by provinces.
• We have 69 Technical Consultants across municipalities 63 of which are allocated within provinces,
• A total of 33 PSPs are currently supporting 92 municipalities on various areas of infrastructure planning, development and management.
• We have noticed that there are a number of interdependencies that require attention for municipalities to be able to effectively spend, like skills, governance aspects relating to proper oversight, recruitment practices etc 29
CURRENT AREAS OF SUPPORT TO MUNICIPALITIES PER PROVINCE
Municipalities Kind of Support
1. Eastern Cape: Alfred Nzo DM, Ntabankulu, Joe Gqabi
DM, Gariep, OR Tambo DM, Port St. Johns, Mhlontlo, KSD, Chris Hani DM, Engcobo, Emalahleni, Sakhisizwe , Amathole, Nxuba, Mbashe, Kouga, Blue Crane, Great Kei, Sundays River, Makana, Koukama, Mbizana, NMBM
• PMU and Project Management Support to fast track MIG expenditure
• Contract Management, O&M Support• Basic Water & Sanitation Services
Support• Audit of existing infrastructure projects.
Spatial Development Plan Reviews
2. Free State: Mohokare, Naledi, Letsemeng, Kopanong, Tokologo, Masilonyana, Nala, Phumelela, Setsoto, Ngwathe, Maluti-a-Phofung.
• PMU and Project Management Support• O&M Support• Unlocking funds for bulk water projects,
Water Conservation and Water Demand Management
• Blue & Green Drop Assessments • Design & Construction
23-04-2030
MISA is providing technical support to municipalities in key areas of infrastructure planning, implementation, operations and / maintenance including strategic integrated planning, as indicated below :
CURRENT AREAS OF SUPPORT TO MUNICIPALITIES PER PROVINCE
Municipalities Kind of Support
3. Gauteng: Westonaria, Randfontein, Merafong , Emfuleni , Lesedi , Sedibeng DM
• Integrated Asset Management Support• Water & Electricity Loss Reduction
Strategies • O&M Support• Development of Dolomite Risk
Management Strategy (Merafong)• Bucket System Eradication - 58 hh in
Lesedi
4. KwaZulu-Natal: Ugu DM, Umgungundlovu DM, Msunduzi, Mkhambathini, Uthukela DM, Okhahlamba, Imbabazane, Zululand DM, Uphongolo, Umkhanyakude DM, Big Five False Bay, Umhlabuyalingana, Jozini, Mtubatuba, Uthungulu DM, Mthonjaneni, Ilembe, Ndwedwe, Maphumulo, Sisonke DM, Umzimkhulu, Amajuba DM, Umzinyathi DM
• PMU and Project Management Support• Bulk Water Supply – Planning &
Construction of Regional Water Scheme
• Exploration and development of boreholes for water extraction
• Maintenance and refurbishment of water purification works
• Revamping of ageing infrastructure• Dalton Dam Construction• Operations & Maintenance Support• SCM Policy Review
23-04-2031
CURRENT AREAS OF SUPPORT TO MUNICIPALITIES PER PROVINCE
Municipalities Kind of Support
5. Northern Cape: Renosterberg, Siyancuma, John Taolo, Ga-Segonyana, Joe Morolong, Gamagara, Khai Mai, Kamiesberg
• PMU Support • Land-use Management Systems• Asset Management Support• SCM Systems, Complaints Management
System• Funding Model for Waste Water-Roads-
Electrical-Water Infrastructure• O&M Support• Infrastructure Master Plans to ensure
sustainable infrastructure development• Spatial Development Framework• IDP Assessments
6. Western Cape: Swellendam, Kannaland, Berg Rivier, Cederberg, Witzenberg, Prince Albert
• PMU and Project Management Support (Multiple Infrastructure Projects under implementation),
• O&M Support, Integrated Regional Waste Management Plan
• Asset Management Planning• Infrastructure Funding Models
23-04-2032
CURRENT AREAS OF SUPPORT TO MUNICIPALITIES PER PROVINCE
Municipalities Kind of Support
7. Limpopo: Lephalale, Tubatse, Musina, Makhado, Ba-Phalaborwa, Tzaneen, Elias Motsoaledi, Maruleng, Sekhukhune DM, Mopani DM, Vhembe DM, Capricorn DM Letaba, Fetakgomo, Ephraim Mohale
• PMU and Project Management Support
• Asset Registers and Asset Management Support
• O&M Support• Water Conservation Demand
Management• Water & Sanitation Policies and SLAs
8. Mpumalanga: Thaba Chweu , Nkomazi, Dr JS Moroka, Thembisile Hani, Chief Albert Luthuli, Dr Pixley Ka Isaka Seme, Mkhondo, Bushbuckridge, Dipaleseng, Goven Mbeki, eMalahleni, Lekwa
• PMU and Project Management Support
• Energy Master Plans• Roads and Storm Water Master Plans
Integrated Waste management Plans• Dolomite Risk Strategies,• Water and Sanitation Asset registers
Environmental Impact Assessments• Geo-technical Studies• By-laws (Technical and Town
Planning)23-04-2033
CURRENT AREAS OF SUPPORT TO MUNICIPALITIES PER PROVINCE
Municipalities Kind of Support
9. North West: Tswaing, Ratlou, Moretele, Kgetleng Rivier, Mamusa, Moses Kotane, Madibeng, Ventersdorp, Dr Ruth Mompati DM, Lekwa-Teemane, Ngaka Modiri Molema DM
• PMU and Project Management• Infrastructure Asset
Management• Integrated Waste Management
System• Develop Fleet Management
System• Operations & Management
Support
23-04-2034
MUNICIPAL DEBTORS
35
Consumer debtAggregate municipal consumer debts were R93.4
billion as at 31 March 2014. This is R0.1billion more than the R93.3 billion
reported at 31 December 2013. Government’s share of the outstanding debtors
represent 4.3 per cent or R4.1 billion. The largest component relates to households
which accounts for 61.5 per cent or R57.5 billion followed by commercial or business for 20.7% or R19.3 billion and other category of debtors for 13.4% or R12.5 billion.
36
Debtors age analysis by province: March 2014
37
Operation Clean Audit
38
Background
Operation Clean Audit 2014; was launched in 2009 as a specific response programme within the Local Government Turnaround strategy.
At the time 86 of the municipalities audited obtained disclaimers for the 2007/8 financial year and another nine municipalities adverse audit opinions.
39
Operation Clean Audit milestonesThe guiding vision for Operation Clean Audit is that by 2014 all municipalities will achieve unqualified audit opinions in their Annual Financial Statements. The programme milestones to realise the 2014 vision for municipalities were fixed as follows:
Between 2010 and 2011, no municipality and municipal entity will obtain adverse and disclaimer audit opinions.
At least 60% of municipalities and municipal entities will achieve unqualified audit opinions by 2012.
There will be an increase in municipalities and municipal entities achieving unqualified audit opinions to at least 75% by 2013.
100% of municipalities and municipal entities will achieve unqualified audit opinions by 2014.
40
Current status of audit outcomesThe latest audit outcomes for Local Government that have
been released by the Auditor General (AG) pertain to the 2011/12 financial year. The AG is finalising the 2012/13 outcomes for release later this year.
The 2011/12 outcomes reflect that 48% of municipalities and municipal entities achieved unqualified opinions against the 75% target of 2013 . In addition; the adverse audit opinions and disclaimers have not been eliminated. These were set to be eliminated by 2011.
Only 3 provinces have managed to reach the 75% target for 2013 ; these are Gauteng, KwaZulu Natal and Western Cape at 84%, 77% and 85% respectively.
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What has been achieved since 2009? Enhancing sound financial management•Audit outcomes for the past 4 years indicates a slow uptake from 1 to 9 (3%) out of 278 municipalities receiving Clean Audit outcome for 2008/09 and 2011/12 financial year, respectively. A total of 61 (22%) municipalities have consistently received unqualified audit outcomes over the past 4 years (50% WC, 45% KZN and 41% Gauteng).
•There is a significant reduction in the number of municipalities receiving disclaimers from 113 to 76 between 2008/09 and 2011/12 financial years.
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Audit Outcome
Changes in the number of audits
between 2008/09 to
2011/12
2011/12 2010/11 2009/10 2008/09
Clean Audit Improved by 8 9 3% 13 5% 6 2% 1 0%
Unqualified Regressed by 7 109 39% 115 41% 119 43% 116 42%
Qualified Regressed by 15 62 22% 52 18% 62 22% 47 17%
Disclaimer / Adverse Improved by 37 76 27% 88 32% 86 31% 113 41%
Outstanding Regressed by 35 22 8% 10 4% 5 2% 1 0%
Operation Clean Audit Support
On an annual basis after the release of the Local Government audit outcomes by the Auditor General; the Department co-ordinates the development of a standard integrated support plan for Operation Clean Audit. (OPCA)
The OPCA plan is developed after the analysis of the annual financial statements and audit outcomes of municipalities; in response to Section 131 of the MFMA.
Accordingly; the attached 2013/14 plan (see ANNEXURE A) has been developed and approved by the CoGTA MINMEC for implementation in response to the 2012/13 Local Government Audit outcomes.
The provinces share municipal finance support responsibilities which include the activities in the OPCA plan between the Provincial Treasuries and Provincial CoGTA’s
The reporting on the implementation of the plan is quarterly to the Premier Co-ordination Forums / Committees; the Provincial MUNIMEC’s as well as a consolidated report to the CoGTA MINMEC.43
Operation Clean Audit Support
The key areas of focus in the attached 2013/14 OPCA plan are the following: Actions to ensure that quality AFS are submitted timeously. Actions to ensure that key controls are in place and that corrective measures are
implemented to address key control deficiencies. Actions to improve the efficient use of service providers Actions to ensure the development and implementation of audit remedial plans Actions to improve leadership involvement in guiding and directing the
implementation of OPCA initiatives Actions to create a platform for consequence management, Actions to improve performance reports Actions to improve asset management, Records management, Supply Chain
Management, Unauthorised, irregular, fruitless and wasteful expenditure. Actions to improve Information Technology Controls, Actions to ensure improved HR practises Actions to improve the capacity of DCoG and Provinces to support
municipalities. Actions to ensure effective governance - Audit and Public Account Committees 44
THANK YOU
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