Parliament, Thursday, 11 March 2021 – The Portfolio Committee on Cooperative Governance and Traditional Affairs (Cogta) met yesterday with the KwaZulu-Natal Province’s Uthukela District Municipality to discuss the state of affairs of the district and that of all the local municipalities under its jurisdiction. This includes Inkosi Langalibalele, Okhahlamba and Alfred Duma local municipalities. The committee was briefed by the South African Local Government Association (Salga), provincial and national departments of Cogta and the Provincial Treasury.
The Chairperson of the committee, Ms Faith Muthambi, said: “In Uthukela, we are encountering an example of good financial administration for the first time in five consecutive clean audits of the Okhahlamba local municipality. The committee welcomes the culture of diligence seen in this municipality. It is also encouraging to see good political leadership that was able to successfully manage the violent public protests experienced in Okhahlamba and Alfred Duma muncipalities in 2020.
The committee also noted the rare example of Alfred Duma, which pays its invoices on time and has no Eskom debt. These two municipalities have also performed well in terms of the back-to-basics assessments over the past two years.
The committee is concerned that Inkosi Langalibalele municipality and Uthukela District are currently under constitutional intervention in terms of Section 139. Inkosi Langalibalele received an adverse opinion on its 2018/19 financial statements. The municipality also failed to submit financial statements by the cut-off date of 31 January 2020. The committee welcomed the positive reduction in Eskom debt from R138m in 2018 to R7.2m in January 2021.
However, the municipality is still experiencing problems arising from the ill-advised amalgamation instituted during the 2016 demarcation cycle. During a previous portfolio committee meeting on municipal amalgamations, the committee saw that a merger of a financially healthy municipality with a financially irresponsible one tends to cause the audit outcomes of the new entity to regress. Inkosi Langalibalele has received consecutive disclaimers and adverse audit opinions due to prior-year findings from the former Umtshezi Municipality, which merged with Imbabazane to form the new municipality. The committee heard that Inkosi Langalibalele has used grants from 2016 to 2018 incorrectly to pay staff salaries.
According to a previous report from the province, the intervention in Inkosi Langalibalele is due to end on 31 March 2021. The committee will be in a better position to assess the effectiveness of the intervention after that date. The Uthukela District has had severe challenges relating to water provision, including delays in water and sanitation projects and high non-revenue water losses. The municipality is a Water Services Authority and yet the water service function is not profitable, as the report from the provincial Cogta indicated.
At Okhahlamba, the committee heard that the hospitality industry, businesses and residents are failing to pay their municipal rates on time and that there are high levels of consumer debt. In addition, government departments, such as the National Department of Public Works and the former Department of Rural Development and Land Affairs are in debt to the municipality. The committee undertook to liase with the relevant portfolio committees to assist the municipality to recoup these debts.
The committee also raised concerns over the unauthorised, irregular, fruitless and wasteful expenditure in the district and local municipalities, as well as the lack of political and administrative will to institute consequence management to recover the losses. The committee did not accept the excuse that this expenditure is historical,as the current management of district and local municipalities are accountable for the 2018/2019 and 2019/2020 financial statements. District and municipal managers must, therefore, have proper reasons for the losses.
The committee also voiced a concern that the matters arising from the Auditor-General’s audit opinion for the district and local municipalities have not been adequately addressed. Therefore, the municipalities must report to the committee in writing on the actions to be taken to resolve these matters.
ISSUED BY THE PARLIAMENTARY COMMUNICATION SERVICES ON BEHALF OF THE CHAIRPERSON OF THE PORTFOLIO COMMITTEE ON COOPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS, MS FAITH MUTHAMBI.
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