The South African Local Government Association (SALGA) briefs Parliament’s Portfolio Committee on Cooperative Governance and Traditional Affairs (Cogta), on its Annual Report for the period 1 April 2019 to 31 March 2020

Posted: 11 November 2020

The South African Local Government Association (SALGA) has sustained a clean audit outcome for a consecutive eight-year period.

Presenting the organization’s annual report for the period 1 April 2019 to 31 March 2020 to Parliament’s Portfolio Committee on Cooperative Governance and Traditional Affairs (Cogta) on Tuesday, 10 November 2020, SALGA Chief Operations Officer (COO) Lance Joel was pleased to report that the national membership body for South Africa’s 257 municipalities, received a clean bill of financial health from the Auditor-General of South Africa (AGSA)- South Africa’s supreme audit institution.

In addition to achieving 97% or 38 out of 39 targets as set out in its 2019/20 annual performance plan, MP Faith Muthambi, chairperson of the committee, congratulated SALGA on its commitment to its fiduciary responsibility for maintaining the public trust with regard to the public entity’s financial resources.

“During the year under review, SALGA participated actively in the business of the committee. The Annual Report correctly emphasizes this as one of the highlights of 2019/20. The committee has benefited immensely from SALGA’s well-researched, insightful and well-articulated contributions, especially in relation to the Municipal Systems Amendment Bill, which the committee adopted last week, said Muthambi.
“SALGA’s internal control environment also remains impressive, with eight consecutive audits and the achievement of 38 out of 39 targets as set out in the 2019/20 Annual Performance Plan.”

Joel, who led the SALGA delegation, also briefed the committee on a wide range of issues including measures taken by the organization to build the capacity of its member municipalities to adopt good local governance practices and promote good local development for the welfare of local communities.
This was said in light of the audit outcomes for local government for the period 2018-19, which showed that there was a regression in the audit outcomes under the current local government administration.
Data from the audit outcomes showed that most municipalities were plagued by debt and are unable to pay for water and electricity; inaccurate and lackluster revenue collection; expenditure that is unauthorized, irregular, fruitless and wasteful; and a high dependence on grants and assistance from national government.

Joel briefed the committee and made reference to an 18 June 2020 meeting of the national executive committee (NEC) of SALGA, which resolved to communicate directly to Mayors and Accounting Officers of municipalities who transgressed in terms of the relevant legislation.

This in order to demand that accountability and consequence management be extracted and actioned.
“As SALGA, we have had to look and reflect on these outcomes and define a SALGA response to the outcomes. And central to the SALGA response is to look at running a campaign that will seek to extract consequence management and accountability,” said Joel.

“With regard to the municipalities that have not fared well in the 2018/2019 financial year, we have directly written to those particular municipalities and we have requested them to provide us with their response plan to improve the audit outcomes. 

“The purpose of that particular request is for SALGA to be aware of what those plans are that municipalities are going to execute. Secondly, direct support to municipalities to execute and breathe life into those plans, and lastly, on an ongoing basis, assess whether these municipalities are indeed executing their audit response plans,” said Joel.

Joel told the committee that SALGA was on the frontlines of efforts to assist municipalities on their debt collection and restructuring plans.

This with the intention to help municipalities recover funds owed to them for services already delivered.
Some of the proposed responses include among others, working with the South African Revenue Service (SARS) to withhold tax refunds for non-payment, and the establishment of a District Revenue collection Agency to achieve better collection efficiencies.

Other measures aimed at addressing municipal debt to Eskom and water boards were also offered. 
SALGA President Cllr. Thembi Nkadimeng, used the occasion to express the organization’s support for the District Development Model (DDM), which aims to have all three spheres of government coordinate and integrate development plans and budgets and mobilize the capacity and resources of government and civil society, including business, labour and community, in pursuit of inclusive growth and job creation. “The intention of the DDM is to ensure centralized planning, implementation, capacity development and the delivery of services, which is what is key and has been lacking,” she said.