Address by Hon Dr Zweli Mkhize, Minister of Cooperative Governance and Traditional Affairs, at the 13th National Municipal Managers Forum, New Council Chambers, Ekurhuleni Metropolitan Municipality, Germiston
12 November 2018
Executive Mayor of Ekurhuleni, Cllr Mzwandile Masina;
Chairperson of the South African Local Government Association (SALGA) and President of the United Cities and Local Government (UCLG), Cllr Parks Tau,
Chief Executive Officer of SALGA, Mr Xolile George,
Municipal and City Managers
Ladies and gentlemen,
Good morning to you all.
Thank you for inviting me to this 13th National Municipal Managers Forum.
This meeting follows the successful hosting of the 12th National Municipal Managers Forum at the Mbombela City Local Municipality in February 2018.
Since April this year I have been visiting various provinces and meeting various stakeholders on the mission of building effective and fully functional municipalities. I have been looking forward to having this conversation with you as municipal accounting officers and heads of administration on whom we rely to make the Municipal Recovery Plan that we launched earlier this year succeed.
I believe that today I am in the right place, meeting the right people, at the right time and I believe from here we shall all go out to do the right thing- to turn those municipalities around.
Things must change!
We have identified several aspects of municipalities that affect their ability to perform as any ideal municipality should. Amongst those aspects are the following issues of:
̶ Governance
̶ Financial Management
̶ Infrastructure and Services
̶ Fighting fraud and corruption and
̶ Political interventions.
If municipalities must change, the municipal managers must be in the fore front of that change. Change in local government is in your hands!
Our system of wall to wall municipalities was purposefully designed to serve all our people equally and to create a platform for the implementation of the services which reflect the human rights which are enshrined in the Constitution.
The local government space is the platform wherein programmes to transform society must be launched to achieve a better life for all our people. When we declare that our vision is a united, nonracial, non-sexist, free, democratic and prosperous South Africa, the local government space is the platform where this has to be launched.
The struggle for democracy was waged by countless men and women who dedicated their lives and made many huge a sacrifice to usher in this democracy, such as President Nelson Mandela, Albertina Sisulu and many others. The centenary commemoration of these giants this year reminds us, especially those in this sphere of government closest to our people, that you have to run with this baton that our stalwarts have passed to our generation. You have been trained and employed to take off where our struggle for freedom stopped, to create a machinery for service delivery that will deepen democracy and serve all our people, transforming our society and our country’s economy.
This means that our struggle for full freedom is not over but will continue through the policies and programmes that our government will implement at all levels. The success thereof will be a satisfied citizenry and an improved quality of life. In short, as managers, you have to make democracy meaningful to all particularly the poor and marginalized communities. You are called upon to serve our people with the best of your ability, skills and experience, without any fear, favor or any hint of partisanship. Our people do not deserve anything less than the very best.
Your inability to do so will make our people feel that there is still a need to wage another struggle to attain a better life. There is no room for inferior services, complacency, incompetence, indolence, dishonesty or mediocrity. The dignity and respect for municipal administration must be restored; and be restored fast!
The buck stops here!
Municipal managers control the engine of municipal administration which spans over 257 municipalities, covering every square centimetre of our land. We all know that everything happens in a ward and in a municipality. For anything to happen in any aspect of the life of our people and our country, local government must work, and, it must work well.
The municipal systems and finance management legislation gives powers and full authority for the municipal managers to take responsibility and steer municipalities in the right direction under the leadership of the elected councils. Municipal managers must take responsibility for good governance in the councils. In short, municipal managers must stick to the letter and spirit of the law to take local government to the expected level of service delivery.
Local government administration was created to take forward the wishes and aspirations of our people and satisfy their basic needs. These include the provision of safe water, sanitation, energy, roads, social infrastructure to support health, education and other social amenities that make life livable and sustainable.
Municipal administration should be completely professional, technically competent and must be staffed by motivated public servants whose only interests is the service to our people.
Municipal staff that have business or other private or personal interests or wish to dabble in politics, have no place in a modern municipal establishment. Those who wish to make their first few millions in business while serving as municipal officials or those who wish to use council as preparatory grounds for future political office are in the wrong place.
Everyone has a right to be interested in politics or business, but these interests cannot be allowed to distract managers from what they are employed to do.
Everything has its time and space. Let us keep it simple in municipalities: leave politics to politicians, business to the private sector and keep the administration to public servants!!
The focus of municipal administration must be to achieve effectiveness and impact on service delivery and leave politics to politicians. The roles must be clear!
We have analysed the factors above that result in poor performance and we are restructuring COGTA at the national level to be better suited to support all municipalities long before they fall into the category of dysfunctionality, wherein interventions by the higher sphere become inevitable.
The Constitution has assigned specific responsibilities to municipalities as a separate and an independent sphere of government. Since the advent of the wall to wall local government, there has been 127 interventions in municipalities, largely under section 139 of the Constitution or other municipal legislation. This has raised a debate about the effectiveness of the support that the national and provincial spheres of government offer in terms of Section 154 of the Constitution.
There has therefore been a huge amount of introspection in the National departments to look at how better to support the municipalities and leave the interventions to be the acts of last resort that the Constitution envisaged.
As you would be aware, the Municipal Recovery Plan support is based precisely on the principle of strengthening support to the municipalities to reduce the numbers of municipalities where Constitutional interventions are imposed. In a few municipalities, the once-off interventions are not even adequate to ensure improvement as they fail to recover, thus resulting in repeat interventions. That is not ideal as it begins to suggest that chronic failure of local government is a reflection of the failure of government as a whole.
We are determined to turn municipalities around! We want that mindset to be entrenched in the minds of all municipal leaders, both elected councilors and appointed officials, as attitudes of “business as usual” or “we have seen all this before” can be a huge obstruction to change.
I must be the first to acknowledge the many municipalities that are dysfunctional as a result of the design that rendered them structurally non-viable due to being an amalgamation of small towns and villages and peripheral townships, devoid of their own revenue base and only dependent on the transfers from the fiscus.
Unless huge economic investments are redirected to such municipalities, their inability to offer competitive salaries for experienced managers and professionals such as chartered accountants, engineers, regional and town planners, will always result in poor service delivery to the poor communities who remain trapped in relative underdevelopment. We need lateral and creative thinking to solve this challenge.
I have in the past called for the review of our wall to wall municipalities as well as the redetermination of the powers of local and district municipalities. We need to decide whether it’s ideal deliver services based on district or local municipal model.
We need to decide whether services are better served through municipalities as they are currently structured, or whether we need the municipalities in their current numbers or configuration. Currently a discussion document is being prepared to start engagement on this matter.
The Municipal Recovery Plan is designed to help us deal with the challenges of local government holistically. A number of perennial political, service delivery, financial management and governance challenges, continue to remain an impediment to achieving a fully functional and developmental system of local government. Incorrect qualifications, inappropriate or bloated staff establishments; unacceptably higher vacancy rates and inordinately long delays in filling budgeted vacant posts, continue to plague local government.
The processes of the issuing of licenses, rezoning and rapid responses to community concerns must be made more efficient and accountable. A well oiled municipal administrative machinery must be the pride of the Municipality. COGTA will never hesitate to reverse the appointment of people who do not possess the minimum requirements and appropriate qualifications for positions in municipality.
We scrutinize applications for waivers on appropriate qualifications and do not hesitate to decline where the grounds are unclear or the motivation not convincing.
During the 2017/2018 financial year, 423 correct appointments were concluded with competent and suitably qualified senior managers in the municipalities, using relevant competency assessments. Ninety-five corrective actions were taken to enforce compliance where appointments contravened the Municipal Systems Act and its Regulations in the past financial year. Out of these, 25 were municipal managers and 70 were senior managers, and this demonstrates our seriousness about compliance.
We are also steadfast about not recycling corruption, malpractice and non-performance through employing same people with a bad record repeatedly. All new appointments are subjected to a database to black list those who have been found guilty in one municipality anywhere in the country. There are already examples of managers whose appointment were declined by National COGTA on the basis of past record of fraud.
All managers must send a strong unequivocal message that fraud and corruption will never be tolerated. Proper investigations and forensic audits must be done and acted upon; copies must be shared with the National COGTA. These reports must be reported to the Municipal Public Accounts Committees (MPAC) for consequence management. A clear message must be sent and examples be made for those who are involved in transgressions.
We urge municipal managers to ensure that forensic reports are not thrown under the carpet but are acted upon. The Special Investigating Unit has been conducting a number of investigations and has delivered some of the reports to the President. Once these are cascaded to COGTA and from us to the municipalities, action will be taken. We fully support the law enforcement agencies and will ensure that their work is not hindered in any way in our sector.
On the financial side, COGTA has taken a stand to aggressively ensure the correction of budgets that are not cash-backed and not credible. This matter was amongst the basis for negative audit outcomes from the Auditor General.
Those municipalities with disclaimers have been given one year to recover and present decent audit outcomes. Supply chain regulations have to be maintained. A basic revenue plan has been shared with the municipalities who have exhibited challenges in revenue generation and management of the debt.
All managers must abide by the supply chain prescripts, including the 30 day payment rule. The abuse of deviations on supply chain management and section 32 procurement processes must be curbed. Political principals have the duty to support a campaign to ensure clean audit outcomes. Rules clearly stipulate the different roles between elected councillors and the administration. That line of separation must be respected by all.
Legislation allows the political principal to issue instructions to the administration. However, only lawful instructions can be carried out. Officials have various avenues to avoid culpability in such situations, such as legally prescribed reporting mechanisms or whistle blowing as last resort.
We urge political leaders not to interfere in the administration. However, that being said, it must be clear that no excuse will suffice as an explanation in cases of breach of procurement processes or fraud.
We have also been alarmed by the attacks on staff of the AG working in some municipalities. COGTA appeared before the Standing Committee on the Auditor General on Friday where we committed to ensuring that this practice is rooted out, supporting the SA Police Service. We urge you to provide utmost support to the AG staff as they are an important partner in promoting clean and accountable governance in our sector. The recommendations of the Standing Committee were unanimously accepted by the COGTA MINMEC on Friday. We are united as all provinces and SALGA in supporting the Auditor General as he carries out his work.
We are similarly concerned about threats, intimidation and murders of municipal staff and councillors. We urge all who have information to approach the police because we have to stamp out lumpen behaviour and criminal conduct that has crept into municipal procurement process and seems directly linked to the acts of violence in many instances. We commend the police for their actions in apprehending the perpetrators.
Our recovery plan envisages teams to be dispatched to municipalities to reinforce governance and build long lasting capacity and sustainability in municipality.
Through MISA, technical teams consisting of regional and town planners, project managers and engineers have been dispatched to municipalities. This boost in capacity must be visible soon in infrastructure and service delivery improvements. Similarly, proper use of infrastructure grants and the prevention of returning grants unused will be the mark of success.
Returning unused Municipal Infrastructure Grants funds is tantamount to punishing poor communities. Similarly, the diversion of conditional grants to cover operational expenditure must end. All COGTA support teams will make it a priority that proper fiscal discipline prevail.
The Inter-Ministerial Task Team on Service Delivery chaired by COGTA has taken an approach that would ensure proper alignment and integration of plans and implementation of social infrastructure programmes across all spheres of government. This is also in line with our IUDF approach.
We are currently focusing on 57 high priority municipalities where R57 billion is being spent to improve infrastructure and expand new services as well as correct historical misalignment between bulk and the reticulation of services. These municipalities account for over 87% of all households living in informal settlements or backyard dwellings. They also constitute over 50% of all backlogs and are the epicentre of recorded public service delivery protests.
We are talking to various private sector stakeholders in search of funding models to accelerate the refurbishment of faulty infrastructure such as sewerage treatment plans and the connection of bulk water to reticulate water to nearby villages.
We also need to engage the mining companies so that we can creatively utilise our resources in building new infrastructure. We must utilise the mining social labour plans to create proper towns and eliminate shacks and informal settlements in areas in which rich mining companies are operating.
We will be convening a dialogue between the local government sector and the Minerals Council soon to discuss these matters and build a strong partnership for growth and development.
Modern day municipalities must embrace Smart city approaches, wherein the latest technology must be used to improve efficiency and monitoring service delivery. ICT must be employed to keep track of the Back to Basics indicators, the governance indicators, financial management including disclaimers, capacity, expenditure patterns, IDPs, stakeholder issues such as monitoring protests, community feedback surveys, ward committee meetings and war room monitoring. This ICT capability will improve our effectiveness in supporting early interventions.
As we rebuild our municipalities we should learn from each other. I attended the launch of the 2018 Mo Ibrahim Index of Good Governance last week. We engaged the African Peer Review Mechanism team during the event and believe there is value in introducing a peer review mechanism within the local government sector using the continental experience.
Municipalities have over the years engaged in building partnerships with municipalities in the continent and around the world. Such visits abroad should be beneficial to the country and should be well-coordinated. We need a discussion soon about managing international relations and cooperation within the sector and have a framework that we can all abide to.
Local government is the nerve centre of government. To build a fully functional developmental state requires that we fix local government. As municipal and city managers, you are important making this happen.
I wish you fruitful deliberations in this important forum.
I thank you.
