Late submission of annual report by Cooperative Governance an area of concern
8 October 2019
The Portfolio Committee on Cooperative Governance and Traditional Affairs (CoGTA) has raised concern regarding the late submission of the annual report by the Department of Cooperative Governance. Annual reports are an essential tool in assessing the state of the department and progress in the delivery of essential services to the people, and is important in the oversight work of the committee. The annual report must be tabled in Parliament by 30 September.
“It is unfortunate that we are where we are in relation to the annual report of the Department of Cooperative Governance, and unfortunately this interrupts the work of the committee. The tabling of an annual report is a statutory requirement that promotes accountability and transparency of the department, which has an ultimate goal of improving trust and confidence of the public service,” said Ms Faith Muthambi, the Chairperson of committee.
It is also concerning that over the past three financial years, the department has failed to adhere to submission dates. Furthermore, the Department of Cooperative Governance received unsatisfactory audits opinions over the preceding two years, a disclaimer and a qualified with findings audit opinion. The perpetual non-adherence must come to an end and proper consequence management must be implemented henceforth in the case of non-adherence.
The failure to timeously submit annual reports is concerning in the context of the important work that the Department of Cooperative Governance is tasked with in relation to facilitating cooperative governance and support to spheres of government, especially the local government sphere. The committee is of the considered view that the department must be a leader in both words and deeds.
Regarding the entire portfolio, the committee welcomes the improvement in clean audits from 40% to 80%, with the improvement from the Department of Traditional Affairs and the South African Local Government Association.
Despite this, the committee is alarmed by concerns raised by the Office of the Auditor-General in relation to the audit at the Commission for the Promotion and Protection of the Rights of Cultural, Religious and Linguistic Communities (CRL). The Auditor-General, among other things, highlighted that management did not submit annual statements timeously to internal auditors, something which impacted on the ability to review annual financial statements before submission for audits. The entity did not have a system to monitor contracts to ensure that payments made did not exceed the agreed threshold, and that all contracts have expiry dates, as well as the inability to ensure that all suppliers are tax-compliant.
“It is unacceptable that key controls in contract management were not complied with, leading to extension or modification to contracts without the approval by a properly delegated official, and deviations were not approved by the accounting officer,” said Ms Muthambi.
Although the financial material misstatements were corrected, the committee has cautioned the CRL to in future ensure that these misstatements are dealt with timeously. The committee also criticised the R2.4 million in irregular expenditure at the CRL, which was incurred as a result of expenditure to tax non-complaint suppliers. The committee has called for senior management to ensure consequence management and clear action plans to remedy this anomaly, going forward.
The committee welcomes the information that there were no significant instances of fruitless and wasteful expenditure within the portfolio for the year under review. The committee is of the view that every cent of taxpayers’ money should be utilised effectively, and value for money must be derived from any expenditure. The committee further welcomes the decrease in irregular expenditure from R36 million to R10 million in the year under review. Adherence to legislation and due process is important in rooting out corruption within the system.
In relation to the Municipal Infrastructure Support Agent (MISA), the committee welcomes the improvement from 63% to 91% of performance targets achieved for the year under review. But the committee has emphasised the need for 100% achievement of performance targets, especially because of the strategic importance of MISA in supporting municipalities to deliver on critical infrastructure programmes. The committee is concerned that MISA underperformed in critical technical areas, with non-achievement of district basic service delivery backlog assessments, and delivery of only two of the envisioned 10 municipal infrastructure sector plans.
While the committee is cognisant of the challenges in staff retention, especially in technical areas, the committee has called for forward planning and clear retention strategies to be implemented together with National Treasury to ensure that technical skills are not lost.
The committee has for its part committed itself to stringent monitoring of the areas of concern raised by the Auditor-General with specific focus on key controls and audit action plans. More emphasis will be placed on the CRL and the Department of Cooperative Governance to ensure that their performance is improved.
Issued by Malatswa Molepo, Parliamentary Communication Services, 8 October 2019