Briefing to the Standing Committee on Appropriations on Adjustments Appropriation Bill
The presentation by Ms. Funani Matlatsi, DDG: CFO District Development Model, covers the adjustments in the national expenditure outcome, rationale for unallocated funds, impact on LGES, financial performance of the Municipal Infrastructure Grant, measures to mitigate fund stopping, steps to settle Eskom debt, disaster expenditure, and challenges in fund disbursements. The Department of Cooperative Governance's adjustment budget and reductions, as well as the adjustments of national expenditure outcomes, are highlighted.
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BRIEFING TO THE STANDING COMMITTEE ON APPROPRIATIONS ON THE ADJUSTMENTS APPROPRIATION BILL 24 November 2023 Presenter By Ms Funani Matlatsi DDG: CFO DISTRICT DEVELOPMENT MODEL
PURPOSE AND PRESENTATION OUTLINE The purpose of the presentation is to brief the Standing Committee on Appropriations on the Medium-Term Budget Policy Statement (MTBPS). Topics for Discussion: Opening comments Adjustments of national expenditure outcome. Rationale for unallocated funds Impact of the reduction in the LGES. Financial performance of the Municipal Infrastructure Grant. Measures to mitigate the stopping of funds Strengthening institutional capacity Overview of the Bill Steps to settle Eskom debt Support and interventions to improve resource mobilization. Disaster Expenditure by Municipalities Addressing issues/challenges in expediting disbursements and capacitating municipalities Progress of professionalisation Recommendation 2 DISTRICT DEVELOPMENT MODEL
OPENING COMMENTS : ACCOUNTING OFFICER The rationale behind the Department of Cooperative Governance's (DCoG) adjustment budget and budget reductions. Please note that your department s 2023/24 baseline budget will be reduced by an amount of R1.523 billion to address the current fiscal challenges faced by government. This budget reduction is in terms of section 30(2)(a) of the Public Finance management Act. Directive from National Treasury on Cost Containment Measures: The budget cuts are rooted in a directive from the National Treasury issued formally on 31 August 2023. These measures were deemed necessary to address current fiscal challenges faced by the government. Unprecedented Fiscal Constraints: Given the unprecedented fiscal constraints, the National Treasury identified additional budget reduction measures in the Department. Specifics of reductions and adjustments to be detailed in subsequent slides. Reaffirmation by Minister of Finance: The Minister of Finance's reaffirms these reductions during the Medium-Term Budget Policy Statement (MTBPS). 3 DISTRICT DEVELOPMENT MODEL
ADJUSTMENTS OF NATIONAL EXPENDITURE OUTCOME The Standing Committee on Appropriations to note major movements made during the 2023 Adjusted Estimates of National Expenditure (AENE) as tabled by the Minister of Finance, outlining the following key points: Adjustments due to significant and unforeseeable economic and financial events: Unforeseeable and unavoidable expenditure R1.523 billion The Department s request for funding in respect of unforeseeable and unavoidable expenditure for the following: Cabinet has approved reductions of R1.523 billion to the department s baseline, of which: R1,173 billion is in Municipal Infrastructure Grant in Programme 2: Intergovernmental Support R 350 million is in Programme 5: Community Work Programme. Programme 4: National Disaster Management Centre An additional R1.184 billion is allocated to reconstruct and rehabilitate municipal infrastructure damaged by floods in Eastern Cape, KwaZulu-Natal and Mpumalanga in February 2023. An additional R372 million is allocated to replenish the municipal disaster response grant. o o As a result the department s 2023/24 baseline budget was reduced by an amount of R1.523 billion to address the current fiscal challenges faced by government. Other adjustments R1.357 billion Declared unspent funds. Programme 3: Intergovernmental Policy and Governance: R1.357 billion in unspent funds has been declared on the local government equitable share due to lower than projected bulk electricity costs. MIG 6B Conversion Furthermore, the Department's request to convert allocations to Emfuleni (R20 million) and Thukela (R10 million) local municipalities for the Municipal Infrastructure Grant into an indirect grant has been approved. This matter were enacted during the 2023 MTBPS presented by the Minister of Finance 4 DISTRICT DEVELOPMENT MODEL
ADJUSTMENTS OF NATIONAL EXPENDITURE OUTCOME 5 DISTRICT DEVELOPMENT MODEL
LOCAL GOVERNMENT EQUITABLE SHARE (LGES) Rationale for unallocated funds of R1,35 Billion: The estimated increase for bulk electricity cost was at 20.7% and the actual increase was then 18.7% which was lower than what was estimated/projected. R1,35 billion was then the balance between what was projected and the actual increase in bulk electricity cost and it remained unallocated. DCoG provided inputs to the LGES Task Team (FFC; SALGA, DCoG, National Treasury) on how the unallocated funds can be reprioritised. The inputs was that funds be utilised to increase allocations for electricity equitably based on the number of households. Despite the absence of quantifiable data, the cost of maintenance and security of the electricity infrastructure due to loadshedding remains a huge financial burden for municipalities. The R1,35 billion was therefore not unspent but rather unallocated. 6 DISTRICT DEVELOPMENT MODEL
IMPACT OF THE REDUCTION IN THE LGES Overall socioeconomic and service delivery implications to communities including those who still don t have access to electricity: The cost of maintenance and security of the electricity infrastructure due to loadshedding will remain a huge financial burden for municipalities. The fact that the Basic Services Component of the LGES which account for about 80% of the total LGES allocation has not yet achieved the total coverage of indigent households mean that reduction in the LGES will create more service delivery problems in terms of provision of free basic services to the indigent households. The fact that we still have a sizable number of municipalities passing unfunded budgets mean that municipalities are not able to generate sufficient own revenue to perform all their allocated functions. The fact that some municipalities use conditional grants for operational expenditure resulting in off-sets being invoked against the LGES, point to municipalities not having sufficient own revenues to meet their financial obligations. 7 DISTRICT DEVELOPMENT MODEL
FINANCIAL PERFORMANCE OF THE MUNICIPAL INFRASTRUCTURE GRANT AND SUPPORT The Department administers the MIG, which is a direct grant to 218 municipalities that provides funding for the development of municipal infrastructure, thus providing a basic level of service to poor communities. Provinces such as KwaZulu/Natal, Mpumalanga, Limpopo and the Western Cape have consistently performed at 90% and above due to effective support and monitoring mechanisms. 90%-100% 89%-80% below 80% The Minister issued guidance to the management of DCoG on the steps to be taken to support provinces and municipalities that are performing poorly such as Eastern Cape, Free State, North-West Gauteng and Northern Cape. Performance of the MIG over the last three years (MIG spent on average 89,57% against the allocations over the last 3 FYs) Provincial Performance ovwer the last three financial years Average over 3 years 2020/21 2021/22 2022/23 Prov Expenditure as % of allocation 80.72% 80.11% 69.37% 96.12% 86.31% 98.56% 74.17% 83.18% 93.01% 87.71% Allocated (R'000) Expenditure (R'000) Expenditure as % of allocation Allocated (R'000) Expenditure (R'000) Expenditure as % of allocation Allocated (R'000) Expenditure (R'000) 91.28% 87.27% 69.80% 96.94% 89.16% 98.13% 66.55% 89.70% 94.40% 91.28% 82.65% 79.35% 72.58% 99.39% 92.28% 96.96% 73.36% 81.18% 95.99% 89.73% 84.88% 82.24% 70.58% 97.49% 89.25% 97.88% 71.36% 84.69% 94.47% 89.57% 2,866,318 797,376 349,140 3,158,316 2,977,399 1,698,153 452,552 1,754,813 436,998 2,616,478 695,847 243,684 3,061,794 2,654,691 1,666,397 301,189 1,574,113 412,530 3,150,667 779,352 281,652 3,585,280 3,100,822 1,889,630 472,148 1,878,769 454,428 15,592,748 2,604,123 618,398 204,420 3,563,584 2,861,588 1,832,232 346,371 1,525,171 436,195 3,467,969 788,051 399,940 3,838,843 3,438,109 2,072,800 493,649 1,846,929 495,711 16,842,001 2,799,281 631,308 277,446 3,689,875 2,967,415 2,042,916 366,142 1,536,320 461,062 14,771,765 EC FS GP KZ LP MP NC NW WC TOTAL 14,491,065 13,226,723 13,992,082 8 DISTRICT DEVELOPMENT MODEL
POOR PERFORMING MIG RECEIVING MUNICIPALITIES OVER THE LAST 3 YEARS (2020/21 2022/23) The provinces of Eastern Cape, Free State, Limpopo, Northern Cape and North-West accounted for 50(91%) of the 55 perennial underperforming municipalities. 27 of the 55 underperforming municipalities are part of the 66 dysfunctional municipalities Number of munics over three years Number of MIG receiving munics. Prov 90%-100% 89%-80% below 80% Dysfunctional below 80% 4 5 2 0 2 2 5 6 1 27 36 18 5 51 25 16 25 20 22 218 25 7 1 47 15 13 2 6 16 132 5 2 2 4 5 1 3 4 5 31 6 9 2 0 5 2 20 10 1 55 EC FS GP KZ LP MP NC NW WC TOTAL 22 of the 27 municipalities are in the same provinces of Eastern Cape, Free State, Limpopo, Northern Cape and North-West 9 DISTRICT DEVELOPMENT MODEL
MEASURES TO MITIGATE STOPPING OF MIG FUNDS 1 3 2 Move funds and adjust Implementation Plans (IPs) to roads maintenance as informed by Vala Zonke Project initiated by DoT (programme to deal with the potholes across the country) Move funding and adjust Implementation Plans (IPs) to repairs and refurbishment projects (existing or new urgent repairs and refurbishment) Move funding and adjust Implementation Plans (IPs) from poor spending projects to projects with opportunity to spend faster 4 5 6 Move funding to schedule 6B and adjusting the allocations and IPs (already applied in 1 perennial poor performing municipality(Emfuleni) and another dysfunctional municipality (uThukela DM) Move funding to District Municipality (dependent on District Performance and Capacity) and adjusting allocations and IPs (already applied in 3 perennial poor performing municipalities in the Free State) Cost Reimbursement is implemented in 18 municipalities in 2023/24, of which 11 is in perennial poor performing municipalities 7 DCoG (together with MISA) started embarking on intensive engagements with Poor Performing Provinces to explore and apply the above instruments to prevent the stopping of MIG funds to municipalities during the 2023/2024 financial year. This commenced on 17 November 2023.
WATER, SANITATION AND ROADS CAPITAL PROJECTS Municipalities have not yet eradicated basic services backlogs as highlighted by Census 2022 results, because of a number of factors including lack of technical capacity. This is evident is unspent infrastructure grants and lack of operations and maintenance of existing infrastructure. MISA deploys built environment professionals to municipalities to provide technical support throughout all infrastructure product life cycle from integrated planning stage, project inception and planning, implementation, operations and maintenance funded through grants, private sector and own funding. To-date MISA has deployed 103 technical professionals (86 of which are professionally registered with Statutory bodies as engineers and town planners). MISA has implemented infrastructure projects budgeted in excess R200 million as a contribution towards eradication of basic services backlogs upon request by municipalities. MISA has implemented and completed water (mainly boreholes and associated infrastructure) and sanitation infrastructure projects benefitting more than 100 000 households. MISA has also implemented roads projects including the restoration of Makhanda CBD s streets (viz Somerset, High, Hill and New Streets) in Makana Municipality that was completed in March 2022 restoring the pride of the town. DCOG, with the support of MISA, has commenced with the implementation of MIG schedule 6B to accelerate basic service delivery and National Treasury has confirmed that adjustment process for the pioneers, viz uThukela District Municipality and Emfuleni Local Municipality, is underway.
STRENGTHENING INSTITUTIONAL CAPACITY DEPLOYMENT OF EXPERTS Consistent with the provisions of Section 154 of the Constitution, Cogta (through MISA and the RMO) Provincial Cogta Departments and National and Provincial Treasuries have deployed various experts to deal with challenges related to governance, financial matters and infrastructure including water, roads and electricity. RMO Top Structure There are more than 500 experts (including young graduates) deployed in municipalities across including Provincial Representatives municipalities under intervention in terms of Section Constitution of which there are 32 across all nine provinces. the country Executive Cogta has also set up the Results Management Office (RMO) to house experts in various fields (DDM, CWP, Infrastructure, Finance, Energy and Governance) to provide an additional layer of support, particularly in dysfunctional municipalities. deployed in 139(1) of the There are about 40 experts in the RMO and their deployment commences in the middle of November 2023. These experts range from former Director Generals, former Municipal Managers, former Chief Financial Officers and former Technical Managers. Collectively they bring a wealth of experience to the Sector. This presentation gives details of where the experts are deployed and the nature of deployment as well as the deploying authority. 12
STRENGTHENING INSTITUTIONAL CAPACITY MISA DESIGN OFFICE ESTABLISHMENT Most low and medium capacity municipalities do not have professionally registered built environment personnel in their employ, let alone design capacity, and consequently outsource engineering and town planning professional work to consultants MISA has commenced with the establishment of the built environment design office, currently piloting in OR Tambo District Municipality wherein some projects (8 projects) are planned and designed using MISA software packages The design office ensures that technical municipal personnel, especially those Young Graduates seeking requisite experience to register as professionals, are trained in the process to build internal capacity of municipalities. The overall intention is to reduce reliance by municipalities to outsource professional work to consultants and ensure internal capacity is built as well as contributing to talent retention in local government. MISA is utilizing the design office to review projects technical reports that are submitted by municipalities for funding applications for infrastructure grants particularly for MIG.
OVERVIEW OF THE BILL AND ITS ABILITY TO FUND MUNICIPALITIES IN FINANCIAL DISTRESS Overview of the Bill : Except for a reduction of R1,2 billion in the Municipal Infrastructure Grant (MIG) and doing away with the initially unallocated R1,357 billion for the Local Government Equitable Share (LGES), in the main, the Adjustment Bill does not change the initial funding allocations of municipalities. In as much as national government through SARS is facing challenges to collect revenue due to the prevailing economic situation, municipalities face challenges in collecting revenue as consumers or ratepayers are hard hit by the prevailing economic environment. Actions taken and implemented by the department to assist municipalities: The problems that give rise to municipalities being in financial distress arise from a range of issues such as political, governance, administrative, financial management, and service delivery; and therefore, the department provide support to municipalities wholistically through the development and implementation of Municipal Support and Improvement Plans (MSIPs). The MSIPs constitute a package of support by interventions aimed at strengthening governance capacity, institutional capacity, financial viability , service delivery and economic development. The department is supporting 22 municipalities to increase revenue and to decrease debt owed to them. The approach is similar to what has been described in relation to those municipalities that are indebted to Eskom. 14 DISTRICT DEVELOPMENT MODEL
STEPS TAKEN TO ENSURE THAT THE 28 APPROVED MUNICIPALITIES IMPROVE THEIR FINANCIAL POSITIONS AND TIMEOUSLY SETTLE THEIR ESKOM DEBTS As at 12 November 2023, 36 municipalities applications for debt relief have been approved by the National Treasury. Cash flow constraints continue to hinder on the ability of municipalities to pay their creditors on time, therefore, a number of projects aimed at improving the financial position and in turn the financial sustainability of these municipalities are currently being implemented by the department and include the following: Support to increase the revenue of the municipality The aim of the project is to propose recommendations to selected municipalities on revenue improvement for implementation in 2024/25 FY. These recommendations will be on matters pertaining to the compilation of new valuation rolls or updating of current valuation rolls; identifying specific opportunities to maximise property rates revenue based on each municipality s specific circumstances and scope to increase property rates revenue; protection and enhancement of water and electricity trading services revenue by strengthening each municipality s compliance with the relevant provisions of the Municipal Systems Act Municipalities that are being supported through this project include: Walter Sisulu, Beaufort West, Renosterberg, Modimolle-Mookgophong, Siyancuma, Kannaland, Govan Mbeki, Msukaligwa, Enoch Mgijima, Mpofana, Ditsobotla, Tswaing, Kgetlengrivier LM. Support to decrease debt owed to the municipality The aim of the project is to propose recommendations to the selected municipalities on the improvement of credit control and debt collection policy contents as well as the implementation of the policy to ensure effective revenue enforcement and credit control mechanisms to improve on billing and collection of revenue. Municipalities that are being supported through this project include: Walter Sisulu, Beaufort West, Renosterberg, Modimolle-Mookgophong, Siyancuma, Kannaland, Govan Mbeki, Msukaligwa, Enoch Mgijima, Mpofana, Ditsobotla, Tswaing, Kgetlengrivier LM. 15 DISTRICT DEVELOPMENT MODEL
STEPS TAKEN TO ENSURE THAT THE 28 APPROVED MUNICIPALITIES IMPROVE THEIR FINANCIAL POSITIONS AND TIMEOUSLY SETTLE THEIR ESKOM DEBTS CONT. Support on data (revenue) management The aim of the project is to support the selected municipalities to have accurate, consistent and complete data for billing. The municipalities largely depend on consumer data for billing, the cleaned and quality data can provide substantial revenue growth and bring efficiency in revenue management. Adequate data management will enable the municipalities to re-establish their business integrity through improved billing and revenue collection; speedy debt resolution and building good customer relations. Municipalities that are being supported through this project include: Mpofana and Msukaligwa LM Technical assistance on the cost of supply (COS) studies on water A COS study is one of the most important considerations in establishing and designing water and electricity tariffs that are implemented to provide the service required by customers and recover costs incurred by the licensees. The objective of a COS study is to apportion all costs required to service customers among each customer class in a fair and equitable manner. The revenue from trading services (electricity, water and sanitation as well as refuse removal) contributes to the source of revenue for municipal budgets. Municipalities that are being supported through this project include: Mangaung Metro and Msukaligwa LM 16 DISTRICT DEVELOPMENT MODEL
INTERVENTIONS TO IMPROVE RESOURCE MOBILISATION AND OWN REVENUE COLLECTION WITHIN MUNICIPALITIES AND THE POTENTIAL IMPACT OF THE REDUCTION IN THE LGES AS PROPOSED IN THE ADJUSTMENTS BUDGET. Intergovernmental, Monitoring, Support and Intervention (IMSI) Bill published in Government Gazette for public comment on 10 July 2023, with closing date 26 August 2023. This Bill is aimed at bringing uniformity in the implementation of sections 100 and 139 of the Constitution. Department is working through comments received and making necessary changes to the Bill whereafter necessary consultation with the Chief State Law Advisor and other related processes will commence before the Bill submitted to Parliament for its processes to unfold. The Department is also developing a General Laws Amendment Bill to address policy and legislative gaps within the system of local government. In addition, work is underway to introduce legal certainty in coalition governance within municipalities. The department is working with the Presidency in this regard, but will soon engage broadly on developments in this regard. 17 DISTRICT DEVELOPMENT MODEL
EXPENDITURE REPORT AGAINST THE ALLOCATION FOR PROVINCIAL AND MUNICIPAL DISASTER RECOVERY GRANT FOR 2021/2024 YEAR GRANT TYPE PURPOSE TRANSFERRED REPORTED EXPENDITURE Municipal Response Grants Provincial Response Grant Municipal Response Grant Drought & storm Eloise (LP, KZN, NC, NW & WC) Drought intervention (Western Cape) Floods of April & December 2022 (EC & KZN) R378 370 989 R269 347 000 2021/2022 Disaster R 48 100 000 R 48 100 000 R516 748 000 R380 561 000 2022/ 2023 Municipal Grant Recovery Floods 2021 & 2022 (EC, KZN & WC) R3 327 742 000 R402 016 000 Municipal Response Grant February floods (EC, GP, LP, MP, NC & NW) & March 2023 R343 527 000 R106 434 000 2023/2024 Total: R4 614 486 989 R1 206 458 000 18 DISTRICT DEVELOPMENT MODEL
DISASTER GRANTS ALLOCATIONS FOR 2023/24 DISASTER RESPONSE GRANT ORIGINAL BUDGET 2023 AENE MOVEMENTS TRANSFER AS AT 31 OCTOBER 2023 EXPENDITURE BY MUNICIPALITIES AVAILABLE BUDGET I 001 PAYMENTS FINAL BUDGET % SPEND TRANSFERS AND SUBSIDIES TRNSF&SUB:PROVINCIAL- 518 575 000 372 000 000 890 575 000 343 527 000 106 434 000 547 048 000 39% TRANSFERS AND SUBSIDIES 518 575 000 372 000 000 890 575 000 343 527 000 106 434 000 547 048 000 39% 106 434 000 DISASTER RESPONSE GRANT 518 575 000 372 000 000 890 575 000 343 527 000 547 048 000 39% DISASTER RELIEF RECOVERY GRANT ORIGINAL BUDGET 2023 AENE MOVEMENTS TRANSFER AS AT 31 OCTOBER 2023 EXPENDITURE BY MUNICIPALITIES AVAILABLE BUDGET I 001 PAYMENTS FINAL BUDGET % SPEND TRANSFERS AND SUBSIDIES TRNSF&SUB:PROVINCIAL- 320 915 000 1 184 472 000 1 505 387 000 56 062 000 12 001 000 1 449 325 000 4% TRANSFERS AND SUBSIDIES 320 915 000 1 184 472 000 1 505 387 000 56 062 000 12 001 000 1 449 325 000 4% DISASTER RELIEF RECOVERY GRANT 320 915 000 1 184 472 000 1 505 387 000 56 062 000 12 001 000 1 449 325 000 4% 19 DISTRICT DEVELOPMENT MODEL
ADRESSING ISSUES/CHALLENGES IN EXPEDITING DISBURSEMENTS AND CAPACITATING MUNICIPALITIES TO ADEQUATELY PREPARE SPENDING PLANS FOR GRANTS Assessment of damages NDMC is working with a team of engineers to carry out the assessment/ MISA to put together a team of engineers that are independent from the municipalities to carry out the assessment and put together a report for individual municipality Supply Chain Management National Treasury and AGSA were engaged to guide the municipalities either through a workshop for CFO s or a circular that provides clear processes and compliance matters to be observed by the municipalities in the development, and activation of the emergency procurement policies. This should be a compulsory workshop. Instabilities in municipalities due to poor governance The funds of the municipality can be transferred to the District Municipality, especially where the District has adequate technical capacity. The District Municipality can be appointed as the Implementing agent by the local municipality by entering into an MOU. Poor project and contract Management (Capacity) MISA will support the municipalities with contract management in ensuring that the capacity in the municipality is able to develop a standard operating process for managing contractors. MISA working with the Capacity Development Chief Directorate should assist in developing a prototype organogram that will inform how the technical department of municipalities should be structured. 20 DISTRICT DEVELOPMENT MODEL
PROGRESS ON PROFESSIONALIZATION OF LG Local Government: Municipal Systems Amendment Act, 2022 Came into effect on 1 November 2022, and provides for - Appointment of municipal managers and managers directly accountable to municipal managers; Procedures and competency criteria for such appointments, including consequences of appointments made otherwise than in accordance with such procedures and criteria; Procedures for performance evaluation; Limits the political rights of all municipal staff members from holding political office in a political party; Regulates the re-employment of municipal staff members who have been dismissed for misconduct; Organisational development metrics and the procedures for determining municipal staff establishment; Prohibits the bloating of municipal administration; Mandating procedures to be adhered to by organised local government before it embarks on wage negotiations in the bargaining council designated for municipalities; and Empowers the Minister to investigate maladministration, fraud, corruption or any other serious malpractice in municipalities, if the MEC fails to conduct such investigations. o o o o o o o o o 21
PROGRESS ON PROFESSIONALIZATION CONT.., To build and strengthen capacity in Municipalities, the Department embarked on the following capacity building interventions: o Department conducted capacity building workshops in preparation for the roll-out and implementation of the Regulations from November 2021, targeting the following key institutions and individuals: Provinces (Provincial coordinators and practitioners); and Municipalities (human resource functionaries). o A comprehensive training programme on the implementation of the Regulations has commenced for the 2023/24 financial year, targeting mayors, speakers, members of the mayoral committees or councillors who are the portfolio heads responsible for human resource management, municipal managers and heads of departments, and HR functionaries (HR Managers, Organisational Design Practitioners, Skills Development Facilitators and PMS Practitioners). This training programme is for a period of 36 months. o The Department further developed Generic Human Resource Policies and Procedures for seamless and ease of implementation of the Regulations and Guidelines. o The Department commissioned a study on the actual causes of the bloated organograms (staff establishment) in municipalities and based on the challenges and findings of the study, the Department developed prototypes staff establishments according powers and functions of different categories of municipalities. The Department is now in the process of piloting and validating the prototype staff establishments in all municipalities, over a period of 36 months. o In 2016, the Department introduced competency assessment for senior managers in line with the Competency Framework as promulgated in 2014 with the Regulations on appointment and conditions of services for senior managers (Regulations). The Department is in the process of reviewing the current LG: Competency Framework and assessment batteries for different categories of municipal positions for a period of 24 months, in order to ensure suitably qualified senior managers are appointed by municipalities. 22
RECOMMENDATION It is recommended that SCOA note the brief on the Medium-Term Budget Policy Statement (MTBPS). The department is always available to support the Committee in their oversight responsibility. 23 DISTRICT DEVELOPMENT MODEL
ANNEXURE A MUNICIPALITIES THAT HAVE PERFORMED POORLY OVER THE PAST THREE FINANCIAL YEARS 24
POOR PERFORMING MIG RECEIVING MUNICIPALITIES OVER THE LAST 3 YEARS (2020/21 2022/23) Municipality MIG exp % end of Oct 2023 MIG exp % as at the end of Oct 2023 2023/24 MIG Alloc. Below 26% in bold '000 '000 EC104 DC12 EC139 EC142 DC15 EC444 Makana Amathole District Municipality Enoch Mgijima Senqu O.R. Tambo District Municipality764,752 Ntabankulu 28,455 516,993 64,378 45,485 31,798 16,059 109,571 14,291 14,604 156,368 56.44% 21.19% 22.20% 32.11% Cost Reimbursement Cost Reimbursement 20.45% 24.44% 7,772 25
POOR PERFORMING MIG RECEIVING MUNICIPALITIES OVER THE LAST 3 YEARS (2020/21 2022/23) Municipality MIG exp % end of Oct 2023 MIG exp % as at the end of Oct 2023 2023/24 MIG Alloc. Below 26% in bold '000 '000 Cost Reimbursement FS161 FS162 FS163 FS181 FS184 FS192 FS196 FS203 FS205 Letsemeng Kopanong Mohokare Masilonyana Matjhabeng Dihlabeng Mantsopa Ngwathe Mafube 19,688 23,789 20,707 27,272 142,914 45,682 23,100 49,699 26,091 7,644 1,548 345 2,253 22,483 4,742 7,423 579 5,789 38.83% 6.51% 1.67% 8.26% 15.73% 10.38% 32.13% 1.17% 22.19% Reallocation to District Mun. Reallocation to District Mun. Reallocation to District Mun. Cost Reimbursement Cost Reimbursement 26
POOR PERFORMING MIG RECEIVING MUNICIPALITIES OVER THE LAST 3 YEARS (2020/21 2022/23) Municipality MIG exp % end of Oct 2023 MIG exp % as at the end of Oct 2023 2023/24 MIG Alloc. Below 26% in bold '000 '000 Cost Reimbursement & 6B GT421 GT484 LIM355 LIM361 LIM368 LIM476 DC47 MP305 MP307 Emfuleni Merafong City Lepele-Nkumpi Thabazimbi Modimolle-Mookgophong Fetakgomo Tubatse Sekhukhune District Municipality573,483 Lekwa Govan Mbeki 203,242 79,084 64,332 39,129 53,573 100,961 33,828 68,840 3,246 27,409 10,111 5,162 22,117 25,111 38,358 4,494 16,125 1.60% 34.66% 15.72% 13.19% 41.28% 24.87% 6.69% 13.28% 23.42% 27
POOR PERFORMING MIG RECEIVING MUNICIPALITIES OVER THE LAST 3 YEARS (2020/21 2022/23) Municipality MIG exp % end of Oct 2023 MIG exp % as at the end of Oct 2023 2023/24 MIG Alloc. Below 26% in bold '000 '000 NC061 NC062 NC064 NC065 NC066 NC067 NC071 NC072 NC073 NC074 Richtersveld Nama Khoi Kamiesberg Hantam Karoo Hoogland Kh i-Ma Ubuntu Umsobomvu Emthanjeni Kareeberg 7,826 16,599 8,086 10,755 8,733 8,352 23,009 12,846 13,654 8,673 2,496 - - 2,111 4,681 - 1,624 3,316 864 - 31.89% 0.00% 0.00% 19.63% 53.60% 0.00% 7.06% 25.81% 6.33% 0.00% Municipality MIG exp % end of Oct 2023 MIG exp % as at the end of Oct 2023 2023/24 MIG Alloc. Below 26% in bold '000 '000 NC075 NC076 NC077 NC078 NC084 NC086 NC092 NC093 NC094 NC453 Renosterberg Thembelihle Siyathemba Siyancuma !Kheis Kgatelopele Dikgatlong Magareng Phokwane Gamagara 7,998 10,379 18,839 19,034 11,881 8,677 22,563 12,452 30,710 13,285 2,030 1,415 541 - 5,937 5,784 6,923 7,497 13,571 25.38% 13.63% 2.87% 0.00% 49.97% 66.66% 30.68% 60.21% 44.19% - 0.00% 28
POOR PERFORMING MIG RECEIVING MUNICIPALITIES OVER THE LAST 3 YEARS (2020/21 2022/23) Municipality MIG exp % end of Oct 2023 MIG exp % as at the end of Oct 2023 2023/24 MIG Alloc. Below 26% in bold '000 '000 NW373 NW374 NW381 NW382 NW384 NW392 NW393 NW396 NW403 NW405 WC041 Rustenburg Kgetlengrivier Ratlou Tswaing Ditsobotla Naledi Mamusa Lekwa-Teemane City of Matlosana ZB Marks Kannaland 291,208 30,205 34,500 34,348 43,133 19,483 17,931 16,840 115,732 79,585 11,373 92,501 10,112 4,526 3,000 8,000 13,194 31.76% 33.48% 13.12% 8.73% 18.55% 67.72% 0.00% 17.13% 5.69% 29.80% 41.66% Cost Reimbursement Cost Reimbursement Cost Reimbursement Cost Reimbursement - Cost Reimbursement 2,884 6,582 23,718 4,738 29
ANNEXURE B STRENGTHENING INSTITUTIONAL CAPACITY DEPLOYMENT OF EXPERTS BY DCoG (through MISA) 30
STRENGTHENING INSTITUTIONAL CAPACITY DEPLOYMENT OF EXPERTS BY DCOG (through MISA) MISA implements capacity building programmes aimed at upskilling and re-skilling municipal officials who are charged with infrastructure management. The programmes include, amongst others, technical short courses in collaboration with SAICE and learning opportunities provided through recognition of prior learning (RPL) initiatives. MISA has provided over 6 000 training opportunities to municipal officials. MISA also provides unemployed youth from previously disadvantaged background with financial assistance through awarding bursary opportunities to study towards technical related disciplines and or trades and providing infrastructure related skills development opportunities in the form of learnerships and candidacy programmes (viz. Young Graduates and Apprenticeship Programmes). MISA has provided over 5 000 opportunities to unemployed youths with the aim at producing a new cohort of municipal officials with requisite technical qualifications in collaboration with LGSETA, TVETS and universities. MISA Town Planner for Free State Province deployed to support Mangaung Metro Municipality is a product, among others, of MISA candidacy programmes
STRENGTHENING INSTITUTIONAL CAPACITY DEPLOYMENT OF EXPERTS BY DCOG (through MISA) cont MISA deploys its professionally registered built environment personnel to act as Technical and Engineering Senior Managers as and when requested by municipalities e.g. in Modimolle- Mookgophong Municipality as Acting Technical Director from Dec 2022. MISA will continue to provide municipal officials with occupational skills training for improved operation and maintenance of infrastructure, technical training courses on infrastructure management, as well as training of water and wastewater process controllers and artisans through recognition of prior learning. Qualifying unemployed youth will be introduced to local government through offering bursary opportunities, apprenticeships, experiential learnership (work integrated learning), and candidacy programmes.
STRENGTHENING INSTITUTIONAL CAPACITY DEPLOYMENT OF EXPERTS BY DCoG (through MISA) Provincial Project Manager Assistant Project Manager The Department has (through MISA) deployed 94 experts across all nine provinces Chief Engineers Civil Electrical Engineers Town Planners Province Engineers Limpopo 1 1 1 5 2 3 The experts include Project Managers, Civil Engineers, Electrical Engineers and Town Planners Gauteng 1 1 1 3 1 3 North-West 1 1 1 5 1 2 The demonstrated improvements in the utilisation of MIG/WSIG/RBIG funds in provinces such as KwaZulu/Natal, Mpumalanga, Western Cape and Limpopo. impact of by this the support remarkable is Eastern Cape 1 1 1 7 1 1 Northern Cape 1 1 1 5 2 1 Free State 1 1 1 4 1 1 Western Cape 1 1 1 1 1 1 Despite it being a small province, Northern Cape has 11 experts (1 less than KwaZulu/Natal) due to the nature and proliferation of province. Mpumalanga 1 1 1 4 2 1 Kwazulu-Natal 1 1 1 5 2 2 challenges in that TOTAL 9 9 9 39 13 15 33
STRENGTHENING INSTITUTIONAL CAPACITY DEPLOYMENT OF EXPERTS BY DCoG (through MISA) cont In addition to the 94 Experts the Department has, (through MISA) deployed 323 upcoming experts across all nine provinces Young GraduatesApprenticeshipExperiential Province RPL Learnership This is intended to build a pipeline of young engineers, technicians and artisans who have experience in the municipal technical functions. Limpopo 16 16 4 - Gauteng 11 5 3 10 These placements in some of these municipalities thus plugging the gap that municipalities in respect of the shortage of skilled technicians and artisans. young experts will eventually find North-West 7 29 6 8 currently exists in Eastern Cape 15 - - - Northern Cape 10 11 - - Free State 15 - - - The list includes 79 individuals in working for municipalities in KwaZulu/Natal, Gauteng and North-West, who are Recognition of Prior Learning (RPL) programme under the guidance of Cogta experts. The ultimate objective is for these employees to certificates recognising their expertise. Western Cape 16 3 - - going through the Mpumalanga 14 14 5 - Kwazulu-Natal 21 16 7 61 TOTAL 125 94 25 79 34
STRENGTHENING INSTITUTIONAL CAPACITY DEPLOYMENT OF EXPERTS BY PROVINCES Province Number and Nature of Expertise Nature/Site of Support North-West Servicing all municipalities in the Province 3x Governance Experts 5x Technical Experts (1x Senior Engineer & 4x Engineers) Deployed in 4 Districts to deal with Water & Sanitation Servicing (advisory) all municipalities in the Province 1x Financial Expert Servicing (advisory) all municipalities in the Province 1x Senior Town Planner Servicing (advisory) all municipalities in the Province 1x ICT Specialist Eastern Cape 1x Financial Expert (deployed by National Treasury) Providing financial management support to Nelson Mandela Bay Metro Northern Cape Deployed as Acting MMs in Renosterberg, Thembelihle, Kai Garib and Phokwane municipalities 4x Governance Experts Deployed as Acting Technical Director deployed in Renosterberg 1x Technical Expert Deployed as Acting CFO in Renosterberg 1x Finance Expert 35
STRENGTHENING INSTITUTIONAL CAPACITY DEPLOYMENT OF EXPERTS BY PROVINCES cont Province Number and Nature of Expertise Nature/Site of Support Mpumalanga Deployed by the Provincial Treasury to Dipaleseng LM; Dr JS Moroka LM; Govan Mbeki LM; Lekwa LM; Msukaligwa LM; and Thaba Chweu LM 6x Financial Experts (Provincial Treasury) Deployed by COGTA - Mpumalanga as Acting MMs in Thaba Chweu LM and Msukaligwa LM (Note: the MM post for Msukaligwa has been subsequently filled). 2x Governance Experts Western Cape Providing planning and infrastructure support for improved service delivery Kannaland and Beaufort West. 2x Technical Expert Municipal Finance Improvement Programme (MFIP) advisor deployed in Beaufort West 1x Financial Expert KwaZulu Natal (All experts deployed by KZN Cogta) Deployed in Ugu DM, Mpofana, Msunduzi, Uthukela DM, Inkosi Langalibalele, Umzinyathi DM, Nquthu & eMadlangeni 8x Financial Experts Deployed in Ugu DM, Msunduzi, eMadlangeni & Mtubatuba 4x Technical Experts 36
STRENGTHENING INSTITUTIONAL CAPACITY DEPLOYMENT OF EXPERTS BY PROVINCES cont Province Number and Nature of Expertise Nature/Site of Support KwaZulu Natal (All experts deployed by KZN Cogta) Deployed in Ugu DM, Mpofana, Msunduzi, Uthukela DM, Inkosi Langalibalele, Umzinyathi DM, Nquthu & eMadlangeni 8x Financial Experts Deployed in Ugu DM, Msunduzi, eMadlangeni & Mtubatuba 4x Technical Experts Deployed in Ugu, Uthukela, uMkhanyakude Districts & Msunduzi 4x Governance Experts Deployed in Ugu, Uthukela, Amajuba, uMkhanyakude Districts & Msunduzi and Newcastle LMs. 6x Water Experts Deployed in Msunduzi LM 1x Electrical Expert Deployed in municipalities under Section 139(1) intervention 7x PEC Representatives Free State Deployed by NT and Provincial Treasury to Kopanong LM, Mafube, Metsimaholo and Mohokare Mafube & Metsimaholo are supported by one MFIP adviser 3 X Financial Experts Deployed by FS CoGTA to Ngwathe as Acting CFO 1x Financial Expert Deployed in municipalities under Section 139(5) intervention 2x PEC Representatives 37
