department of cooperative governance and traditional affairs free state province vote 8 annual ...

175 Pages·2016·4.01 MB·English

DEPARTMENT OF COOPERATIVE GOVERNANCE
AND TRADITIONAL AFFAIRS
FREE STATE PROVINCE

VOTE 8

ANNUAL REPORT
2015-2016 FINANCIAL YEAR

PR255/2016
ISBN: 978-0-621-44795-8
31 August 2016
CONTENTS
PAGE NO.
PART A: GENERAL INFORMATION 5

1. GENERAL INFORMATION 6
2. LIST OF ABBREVIATIONS / ACRONYMS 7
3. FOREWORD BY THE EXECUTIVE AUTHORITY 8
4. REPORT OF THE ACCOUNTING OFFICER 12
5. STATEMENT OF RESPONSIBILITY AND CONFIRMATION OF ACCURACY
6. FOR THE ANNUAL REPORT 22
7. STRATEGIC OVERVIEW 23
8. LEGISLATIVE AND OTHER MANDATES 23
8.1 Constitutional Mandate 23
8.2 Legislation 23
8.3 Policy Mandates 26
9. ORGANIZATIONAL STRUCTURE AS AT 31 MARCH 2016 27
10. ENTITIES REPORTING TO THE EXECUTIVE AUTHORITY 27

PART B: PERFORMANCE INFORMATION 28

AUDITOR GENERAL‟S REPORT: PREDETERMINED OBJECTIVES 29

1. OVERVIEW OF DEPARTMENTAL PERFORMANCE 29
1.1 Service Delivery Environment 29
1.2 Service Delivery Improvement Plan 38
1.3 Organizational Environment 42
1.4 Key Policy Developments and Legislative Changes 43
1.4.1 Revisions to Legislative and other Mandates 43

2. STRATEGIC OUTCOME-ORIENTED GOALS 43
2.1 Goal 1: Creation of a Department geared towards service excellence 43
2.2 Goal 2: Strengthening of Cooperative Governance 45
2.3 Goal 3: Integrated development and planning 46
2.4 Goal 4 and 5: Viable and Sustainable Traditional Institutions and 48
Functioning of the House of Traditional Leaders

3. PERFORMANCE INFORMATION BY PROGRAMME 48
3.1 Programme 1: Administration 48
3.2 Programme 2: Local Governance 51
3.3 Programme 3: Development and Planning 58
3.4 Programme 4: Traditional Institutional Management 63
3.5 Programme 5: House of Traditional Leaders 65

4. TRANSFER PAYMENTS 66
4.1 Transfer Payments to Public Entities 66
4.2 Transfer Payments to all Organizations other than Public Entities 66

5. CONDITIONAL GRANTS 67
5.1 Conditional Grants and Earmarked Funds Paid 67
5.2 Conditional Grants and Earmarked Funds Received 67

6. DONOR FUNDS 67
6.1 Donor Funds Received 67

7. CAPITAL INVESTMENT 67
7.1 Capital Investment, Maintenance and Asset Management Plan 67

PART C: GOVERNANCE 68

1. INTRODUCTION 69
2. RISK MANAGEMENT 71
3. FRAUD AND CORRUPTION 73
4. MINIMISING CONFLICT OF INTEREST 73
5. CODE OF CONDUCT 74
6. HEALTH, SAFETY AND ENVIRONMENTAL ISSUES 74
7. PORTFOLIO COMMITTEES 75
8. PROPAC RESOLUTIONS 76
9. PRIOR MODIFICATIONS TO AUDIT REPORTS 77
10. INTERNAL CONTROL UNIT 77
11. INTERNAL AUDIT AND AUDIT COMMITTEES 78
12. AUDIT COMMITTEE REPORT 79

PART D: HUMAN RESOURCES MANAGEMENT 85

1. OVERVIEW OF HUMAN RESOURCES 86
2. HUMAN RESOURCES OVERSIGHT STATISTICS 87
2.1 Personnel related expenditure 87
2.2 Employment and Vacancies 87
2.3 Job Evaluation 88
2.4 Employment Changes 89
2.5 Employment Equity 90
2.6 Performance Rewards 93
2.7 Foreign Workers 94
2.8 Leave Utilization 95
2.9 HIV/AIDS and Health Promotion Programmes 97
2.10 Labour Relations 98
2.11 Skills Development 99
2.12 Injury on Duty 101
2.13 Utilization of Consultants 102

PART E: FINANCIAL INFORMATION 103

REPORT OF THE AUDITOR-GENERAL 104
ANNUAL FINANCIAL STATEMENTS 107
PART A: GENERAL INFORMATION

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1. GENERAL INFORMATION

Name of the Department: Cooperative Governance and Traditional Affairs

Physical Address: OR Tambo House
7th Floor
Cnr St. Andrews and Markgraaff Street
Bloemfontein
Free State
9301

Postal Address: P.O. Box 211
Bloemfontein
9300

Contact Telephone Numbers:
Head of Department: 051 405 5719
Chief Financial Officer: 051 405 5618
Chief Director: Corporate Services: 051 4054481

E-mail Address:
Head of Department: [email protected]
Chief Financial Officer: [email protected]
Chief Director: Corporate Services: [email protected]

Website Address: www.freestateonline.fs.gov.za

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2. LIST OF ABBREVIATIONS/ACRONYMS

AG Auditor-General
AGSA Auditor General of South Africa
AO Accounting Officer
B2B Back-to-Basics Programme
BBBEE Broad Based Black Economic Empowerment
CAPEX Capital Expenditure
CWP Community Works Programme
CDW Community Development Worker
CFO Chief Financial Officer
CMIP Consolidated Municipal Infrastructure Programme
COGTA FS Department of Cooperative Governance and Traditional Affairs
DCOG National Department of Cooperative Governance
DM Disaster Management
DPSA Department of Public Service and Administration
EU European Union
FSGDS Free State Growth and Development Strategy
HOD Head of Department
ICT Information Communication Technology
IDP Integrated Development Plan
IGR Inter-Governmental Relations
KPI Key Performance Indicator
LED Local Economic Development
LGTAS Local Government Turn-Around Strategy
MISA Municipal Information Systems Association
M&E Monitoring and Evaluation
MEC Member of Executive Council
MECLOGA Members of the Executive Council responsible for Local Government Association
MIG Municipal Infrastructure Grant
MPAT Management Performance Assessment Tool
MPRA Municipal Property Rates Act
MTAS Municipal Turn Around Strategies
MTEF Medium Term Expenditure Framework
MTSF Medium Terms Strategic Framework
NDP National Development Plan
OPEX Operational Expenditure
PDMC Provincial Disaster Management Committee
PFMA Public Finance Management Act
PILIR Policy and Procedure on Incapacity Leave and Ill-health
PMS Performance Management System
PSC Public Service Commission
SCM Supply Chain Management
SDF Spatial Development Framework
SDIP Service Delivery Improvement Plan
SITA State Information Technology Agency
SMME Small Medium and Micro Enterprises
SPLUMA Spatial and Land Use Management Act
TC Traditional Council
TR Treasury Regulations
WSP Work Place Skills Plan

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3. FOREWORD BY THE EXECUTING AUTHORITY

Local government is widely
recognized as a strategic site for
service delivery as well as socio-
economic development and
transformation. The triple challenge of
poverty, inequality and unemployment
are felt most directly at local
government level. This is where all
our societal challenges and
contradictions play themselves out.

Our National Development Plan
makes it clear that meeting our
transformation agenda requires
functional municipalities and capable
machinery at a local level that can
create safe, healthy and economically
sustainable environments where
citizens can work, live and socialise.

Despite the above, we approach the
local government elections with
confidence. The strength of our
democracy and the tenacity of our
systems will directly contribute to
ensuring relative stability in this
environment. The sustained
improvements in the audit outcomes

of our municipalities show that our
systems of governance, financial MEC SM MLAMLELI
management and transparency are
consistently strengthening and maturing.

The constrained fiscal framework, within which our local government sector is operating, mirrors
the significant challenges that the provincial and national spheres of government are
experiencing. The global economy has been characterized by low economic growth rates, falling
commodity prices and increasing unemployment and poverty. Our resilience in the face of
adversity and our commitment to find and create the opportunities that will place us on a higher
growth path are key to us rising above the current challenges.

By participating in an initiative led by the National Treasury, that aims to ensure that we do not
compromise the priorities set out in the Free Charter, the National Development Plan and the
2014/2019 Medium Term Strategic Framework, we have embarked on the complex journey of
exploring and supporting initiatives that will stimulate the provincial economy, whilst exercising
fiscal discipline necessitated by a shrinking provincial revenue envelop.

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Progress was made in the implementation of the Freedom Charter as well as on government‟s
key priorities:

(a) Back to Basics
Eskom is one of our key partners in the provision of basic services to communities. It is
acknowledged that there has been some concern in our communities with regard to outstanding
debt owed by some municipalities to Eskom. We have been working with Eskom, the national
Department of COGTA, National Treasury and our affected municipalities to find a realistic
solution to this matter.

Together with Eskom, we have been tirelessly working on an alternative funding model for
electricity distribution in the Free State, thereby preventing possible disruptions in continuous
power supply to municipalities and their communities as a result of the current debt position.

The provincial government‟s work in the local government sphere is directed by our
implementation of the Back-to-Basics Programme which is based on five pillars, namely:
 Good governance
 Sound financial management
 Building capacity
 Putting people first and
 Basic service delivery.

(b) On Good Governance

Our partnership with the South African Local Government Association (SALGA) and the Free
State Legislature have resulted in ongoing capacity building with a specific focus on training and
development initiatives for Councilors, Ward Committees, Civil society Organizations as well as
Council structures. A focused programme on promoting good governance principles and
practices will be implemented in all Councils in the province following the local government
elections.

(c) Sound Financial Management (Municipal Audit Outcomes)

We have significantly improved the administrative capacity and financial management of our
municipalities. This is evidenced by the audit outcomes of the 2014/15 municipal financial year
and I wish to highlight the following:
 Thabo Mofutsanyana District Municipality obtained the first clean audit status by a Free State
municipality.
 Mohokare Local Municipality and the Fezile Dabi District Municipality improved from a
qualified to an unqualified audit opinion
 Nala Local Municipality improved from a disclaimer audit opinion to an unqualified audit
opinion with findings.
 The municipalities Moqhaka, Mantsopa and Letsemeng Local Municipalities improved from a
disclaimer audit opinion to a qualified audit opinion.

Ngwathe Local Municipality improved from 17 consecutive disclaimers to an unqualified audit
opinion in 2014/2015, while Nala and Mantsopa Local municipalities improved from a Disclaimer
to an Unqualified and Qualified audit finding respectively

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Over the past five years, municipal audit outcomes improved as follows:

 We increased the number of unqualified with findings audit opinions from 22% to 48%
 We increased the number of qualified audit opinions from 15% to 30% as we reduced the
number of disclaimer audit opinions
 We decreased disclaimer audit opinions from 55% to 11%
 We eradicated adverse audit opinions completely.

(d) Building Capacity

We implemented initiatives such as the deployment of suitably qualified and experienced teams
to thirteen (13) identified local municipalities to assist with developing and implementing turn-
around strategies. We maintained our focus on training for municipal officials in the areas of risk
management, internal audit, human resource management and tax compliance.

Moving forward, the deployment of 36 Cuban engineers to various municipalities in the Free
State will strengthen our engineering capacity in municipalities and will improve the quality of our
infrastructure work.

(e) Putting People First

A Complaints and Compliments Management System has been developed as a tool for
community engagement. Municipal frontline staff was trained on customer care management and
accredited Batho Pele Change Management, and we have strengthened the collaboration
between councilors and traditional leaders. The Batho Pele principles were rolled out to all
municipalities, who were also trained and supported with the development of Batho Pele Service
Standards. District Batho Pele Forums were established as well as a Provincial (local
government) Forum to discuss progress made and challenges still experienced.

(f) Delivery of Basic Services

This pillar is emphasized by the implementation of the Municipal Rapid Response Platforms
(MURAPA). We will continue to monitor the provision of basic services to our communities by
municipalities and will ensure that remedial action is taken where required.

In collaboration with the national Department of Cooperative Governance and Traditional Affairs,
we will continue to implement the Back to Basics 10 point plan, thereby achieving, amongst
others, the following:

 National and provincial departments must settle pay verified debt owed to municipalities
 The three spheres of government should improve the integration of their planning and service
delivery initiatives
 Strengthening public participation through direct public engagements and media platforms
 Spatial Planning Framework implementation to be monitored to avoid putting food security at
risk.

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I would like to express my sincere appreciation to the Head of Department, officials of the
department, all stakeholders and role-players in contributing to the department‟s fulfillment of its
mandate during the year under review. With their dedication and commitment, often in
challenging circumstances, the department would not have had the successes as listed above.

Re a Hlasela – We have delivered!

________________________________
MEC: COOPERATIVE GOVERNANCE, TRADITIONAL AFFAIRS AND HUMAN
SETTLEMENTS

08 AUGUST 2016
11