Parliament, Wednesday, 16 October 2024 – The Portfolio Committee on Cooperative Governance and Traditional Affairs (COGTA) on Tuesday commended the department’s and some entities’ improvement in audit outcomes. However, the committee noted that good audit outcomes do not often translate into community satisfaction with service delivery on the ground.
The department received an unqualified audit opinion with findings – the first since 2014 – despite persistent challenges with its Community Works Programme (CWP) and asset management. At the end of the 2023/24 financial year, the CWP achieved a performance score of 50%, meaning 50% of planned targets were not met.
The Office of the Auditor-General (AG) first briefed the committee on the audit outcomes of the department and its entities’ annual reports for the 2023/24 financial year. This was followed by a presentation of their annual reports from the department and Municipal Infrastructure Support Agency (MISA).
The committee heard from the Office of the AG that the Department of Cooperative Governance (DCoG) improved its audit outcomes from a qualified audit opinion to an unqualified audit opinion with findings. However, DCoG still had material findings on procurement, expenditure management and asset management because of failure to apply the relevant prescripts, a poor control environment and ineffective implementation of internal controls.
A remediation plan endorsed by the Audit and Risk Committee was implemented. The implementation addressed the previous year’s qualification in the areas of the CWP assets, goods and services.
The committee was encouraged by the improvement and said that this now needs to be matched with performance, because often the committee receives presentations showing good progress, but on the ground, challenges manifest in community protests.
Committee Chairperson Dr Zweli Mkhize said it is encouraging that the audit outcomes indicated that the long-standing challenges with the CWP, which was mired in controversy with suspicions of irregularities, maladministration, ghost workers and assets that were not properly recorded, contributed to poor audit outcomes for the department.
The committee noted that although this is encouraging, other issues warrant further investigation and monitoring, such as the department’s performance against planned targets. For example, the committee flagged the low achievement of targets in programme two, which focuses on the department’s support to municipalities. At the end of the 2023/24 financial year, DCoG’s local government operations and support programme (Programme 2) only achieved a performance score of 14%. This means that the department failed to achieve 86% of its planned targets. Mr Mbulelo Tshangana, Director General for DCoG, acknowledged that this programme is the department’s core business and if the programme is not performing well, it affects the whole sector. He said the department will have to work on setting targets so that they can be better planned.
The committee welcomed the department’s acknowledgment the weaknesses, as this makes it easier to correct them going forward. However, the committee is concerned that Programme 2 and its crucial support for municipalities is underperforming, especially before any intervention by provincial and national government.
“In this case,” the Chairperson said, “the weaknesses are clear. Targets are unmet because of the department’s poor planning and execution. Yet sometimes, even with good execution, the outcome is not demonstrated on the municipal level if the municipalities do not adhere to the plans and approve budgets on time. It then reflects badly on the department.” The committee believes that this dichotomy must be managed going forward.
The committee also believes it is important for the department and municipalities to focus beyond good audit outcomes on community satisfaction with service delivery. We cannot have good presentations here and then have toyi-toyiing communities outside. The level of satisfaction with the municipality and the department is thus essential,” the Chairperson said. “When there is a good audit outcome, it is not equal to satisfactory service delivery. One can have an unqualified audit outcome but still huge discontent.”
The committee was informed that the department has conducted a service delivery satisfaction survey, which showed dissatisfaction with services. The committee asked to have a look at the findings. “We are aware that the community still has serious concerns about basic water services, sanitation, housing, unemployment and huge municipal bills,” said Dr Mkhize. “All of these together mean that we must continue to work together, but it starts with good audit outcomes, and we believe that the department is taking the right direction.”
Meanwhile, entities such as MISA and the South African Local Government Association (SALGA) received unqualified audit outcomes with no findings. Other entities – the Municipal Demarcation Board, the Commission for Cultural, Religious and Linguistic Rights and the Department of Traditional Affairs – regressed from unqualified audit reports with no findings to unqualified with findings relating to material non-compliance with legislation.
The Office of the AG told the committee that SALGA and MISA’s good performance was “due to key roleplayers’ commitment to sound financial management, effective internal control environment, and implementation of audit action plans.” These entities should continue to follow best practices to retain their clean audit status and translate this to service delivery.
Figures presented to the committee showed that MISA achieved 12 out of 22 performance targets in its annual performance plan, a decline from the previous year’s 91% achievement. Key achievements included providing technical support to 36 municipalities, maintaining over 23 000 kilometres of roads, and supporting 15 municipalities in implementing spatial plans.
However, several targets were unmet, including reducing non-revenue water by 5% in 22 municipalities, increasing access to basic services like water, electricity and waste management, and achieving employment opportunities through the Expanded Public Works Programme. MISA cited budget constraints and lack of municipal capacity as the main reasons for not achieving targets.
The committee encouraged MISA to focus on improving its performance and noted that MISA works as a support agent for municipalities but also as an implementing agent. The committee urged MISA to be more focused because many municipalities that cannot spend their municipal infrastructure grant need support. The committee noted that MISA cannot run all the municipalities, and therefore, targeting is important to identify which municipalities deserve the most support so that they do not get left behind.
ISSUED BY THE PARLIAMENTARY COMMUNICATION SERVICES ON BEHALF OF THE CHAIRPERSON OF THE PORTFOLIO COMMITTEE ON COOPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS, DR ZWELI MKHIZE.
For media enquiries or interviews with the Chairperson, please contact:
Name: Alicestine October (Ms)
Cell: 083 665 4345
E-mail: aoctober@parliament.gov.za
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