Parliament, Friday, 16 October 2020 – The Portfolio Committee on Cooperative Governance and Traditional Affairs (Cogta) is of the view that the Emfuleni Local Municipality remains dysfunctional and is concerned that, despite the lengthy Section 139 (1) (b) intervention, there is little evidence of improvement.

“It is extremely disheartening to realise that the lives of the people of the area are being affected negatively as a result of lack of both political will and administrative inclination to serve the people of the area. The situation requires a re-imagined approach to reverse the effects years of an ineffective municipality,” said Ms Faith Muthambi, the Chairperson of the committee.

At the heart of the challenges is the lack of consequence management, which is critical in rooting out malfeasance. There is high non-compliance, especially within the procurement unit, due to a complete collapse in controls and lack of effective oversight by council. The committee believes that adherence to laws and regulations is the foundation on which an effective municipality is based.

The non-existent consequence management is unacceptable, given the increasing unauthorised, irregular, fruitless and wasteful (UIFW) expenditure year-on-year. The 2018/19 year- end balance of irregular expenditure was R1.1 billion as a result of non-compliance with supply-chain management (SCM) regulations and the Municipal Finance Management Act, in respect of competitive bidding and quotations. “What is even more concerning is the information that consequence management is being hampered by internal divisions, with one manager being suspended for only two days and then the suspension was overturned,” Ms Muthambi emphasised.

There is also dereliction of duty on the part of council, as they abandoned their oversight role. The committee is concerned that the Municipal Public Accounts Committee has not investigated the irregular expenditure incurred during the 2018/19 financial year, nor has it held senior managers accountable for the ballooning UIFW expenditure.

The regression in audit opinion also highlights the lack of commitment to good governance and serving the people. It is unacceptable that the municipality has no plans to remedy the 81 matters of emphasis highlighted by the Auditor-General for the 2018/19 financial year.

The committee also believes that the development of the financial recovery plan has beard no fruits with no tangible improvement on the municipality’s finances. Furthermore, the municipality incurred a deficit of R586 million for the year, which will continue to put pressure on cash flow.

The unreliable power and water supply will negatively affect the municipality’s ability to collect rates and taxes, which will further worsen the municipality’s financial situation. It is unacceptable that sewage spillage and water leaks are the norm in the municipality. This will deter any investor from investing into the municipality, thereby undermining any intention to stimulate job creation.

Regarding contract management, the committee highlighted its concerns that some of the goods and services of a transaction value above R200 000 were procured without inviting competitive bids, as required by SCM regulation 19(a). “Laws and regulations are there for a reason and can’t be adhered only when people feel like it. This way of doing things exposes the municipality to high levels of risk that cannot be tolerated,” Ms Muthambi said. The risk is evidenced by the default judgement, which has led to the attachment of the municipality’s main account, placing the municipality’s functionality in question.

The willingness of the business community to assist the municipality is commendable, but the municipality’s lack of willingness to harness the financial and other expertise of the business sector is both astounding and regrettable. National government has made repeated calls for public-private partnerships to resolve the many social and economic challenges facing the country, yet the municipality refuses positive private sector proposals. The committee has urged the municipality to reconsider its hostile posture against business and so improve the living conditions of its residents.

The committee is also concerned about the inability of the municipality to procure equipment for its staff members, thus endangering the lives of its workers. “We have learned with sadness that an employee passed away at the municipality’s waste water treatment works because of lack of equipment that resulted in the employee drowning. It is also alleged that the employee was alone at the plant while he was supposed to be working with someone. It is even more concerning that there has been no report on the incident served before council. This presents a picture of an uncaring employer,” Ms Muthambi emphasised.

The lack of a close-out report for the initial intervention means the administrators are bound to commit the same mistakes as the initial intervention. The committee calls for this introspection and analysis to be undertaken urgently to prevent the repetition of mistakes.

Because of the dire situation in the municipality, the committee has resolved to urgently convene a follow-up virtual meeting on Friday, 23 October, to give the municipality an opportunity to consider its responses to questions raised by the committee. This resolution is based on the desire to find workable solutions to the municipality’s problems and ensure effective service delivery for the people of Emfuleni.


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Name: Malatswa Molepo (Mr)
Parliamentary Communication Services
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