Parliament, Wednesday, 19 July 2023 – The Select Committee on Cooperative Governance and Traditional Affairs, Water and Sanitation and Human Settlements (COGTA) has critiqued the lack of progress in resolving material risks of governance and financial control within the Emfuleni municipality, which exacerbate an already dire lack of service delivery. The committee yesterday visited the municipality and believes the situation has regressed since the provincial government instituted Section 139 (1) (b) of the Constitution.
“It is the committee’s considered view that the situation has now deteriorated at the expense of service delivery. The municipality is operating on an unfunded budget, which is in itself illegal. There is no disciplinary board to investigate cases of fruitless and wasteful and the Municipal Public Accounts Committee Chairperson has now resigned, which will impact on the functionality of this critical committee,” said Mr China Dodovu, the Chairperson of the committee.
The committee remains concerned that despite various interventions, the municipality shows no tangible improvement, with regressed audit outcomes from unqualified with findings in the prior year to a qualified opinion in the 2021/22 financial year. The committee also raised concerns that the municipality has resolved less than 50% of the audit action plan, which highlights a clear lack of appetite to implement solutions necessary to remedy the dysfunctional municipality. It is also unacceptable that the municipality recorded a 172% increase in unauthorised, irregular, fruitless and wasteful expenditure, an environment that will encourage acts of corruption.
Regarding the financial viability of the municipality, the committee is alarmed that, as per a court order, the municipal accounts have been attached by Eskom due to debt amounting to R6.5 billion. Now the municipality is only able to pay employee salaries and cannot access funds for service delivery and debt payments. The committee has welcomed the National Treasury’s intervention to resolve the matter but has emphasised that effective financial management measures should be adopted by the municipality to ensure financial viability in the long run.
It remains a concern that the municipality has employed permanently only two of the seven senior management positions within the city, while the chief financial officer is suspended. This represents a capacity risk that will impact on the administration’s ability to drive strategy to improve governance and ensure effective service delivery.
The committee also emphasised that it is unacceptable that the municipality is struggling with revenue collection because of water losses which negatively impact on the balance sheet. The committee considers it unacceptable that the municipality has identified aging infrastructure as the reason behind high water loses especially due to the municipality spending about 46% of its capital funding.
Despite this, the committee welcomed the South African Local Government Association’s announcement that Emfuleni will be included in support initiatives it is implementing to improve the state of municipalities.
The committee will today visit the City of Johannesburg to assess the state of the municipality and the implementation of audit action plans to address areas identified by the Office of the Auditor General.
Details of the visit:
Date: Wednesday, 19 July 2023
Venue: Braampark Office Park, Forum 1 Ground floor auditorium
Time: 10:00
ISSUED BY THE PARLIAMENTARY COMMUNICATION SERVICES ON BEHALF OF THE CHAIRPERSON OF THE SELECT COMMITTEE ON COOPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS, MR CHINA DODOVU
For media enquiries or interviews with the Chairperson, please contact the committee’s Media Officer:
Name: Malatswa Molepo (Mr)
Parliamentary Communication Services
Tel: 021 403 8438
Cell: 081 512 7920
E-mail: mmolepo@parliament.gov.za
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