COGTA ANNUAL REPORT FY 2011-2012 PRESENTATION TO THE PORTFOLIO COMMITTEE ON

COOPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS

09 October 2012

OVERVIEW OF THE PRESENTATIONSECTION A- Department of Cooperative Governance

Part 1 – Overview– Update on the DCoG organizational structure

Part 2 -Programme performance against annual targets 2011/12 and related challenges

Part 3-Overview of Financial Performance 2011/12Part 4 -Response to concerns raised by the Portfolio Committee on the

2010/11 AR

Section B- Department of Traditional Affairs

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Part 1Overview

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Our mission is to facilitate cooperative governance and support all spheres of government through:• The Development and implementation of appropriate policies and regulatory

mechanisms to promote integration of government development programmes;• Achievement of social cohesion through the creation of enabling mechanisms for

communities to participate in governance; and• Monitoring and evaluation of cooperation amongst government stakeholders to

achieve improved service delivery.

Vision Statement

Mission Statement

An integrated, responsive and highly effective governance system

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STRATEGIC GOALS Strategic Goal 1: Strategic Goal 1: To implement a differentiated approach to municipal financing,

planning and support; Strategic Goal 2: Strategic Goal 2: To improve Access to Basic Services; Strategic Goal 3: Strategic Goal 3: To implement the Community Work Programme; Strategic Goal 4: Strategic Goal 4: To deliver actions supportive of the human settlement outcomes; Strategic Goal 5: Strategic Goal 5: To deepen democracy through a refined Ward Committee model; Strategic Goal 6: Strategic Goal 6: To improve administrative and financial capability; Strategic Goal 7: Strategic Goal 7: To implement a Single Window of Coordination; Strategic Goal 8: Strategic Goal 8: To improve cooperative governance across the three spheres;

and Strategic Goal 9: Strategic Goal 9: To strengthen the capacity and capability of the department to

deliver on its mandateSeven of the Nine strategic goals are directly aligned to the outputs of the Seven of the Nine strategic goals are directly aligned to the outputs of the delivery agreement on outcome 9delivery agreement on outcome 9

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Organisational Structure

All critical posts have been filled and all officials that were displaced have been placed6

Part 2PROGRAMME PERFORMANCE AND

CHALLENGES

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Overview of DCoG Performance

Reasons for non-achievement are disclosed in the Annual Report and vary per project from pending consultations to projects that have dependencies or lead by other departments.The 2012/13 APP outlines only projects that DCoG is responsible for to ensure accurate reporting and avoid audit findings. The 2012/13 APP includes some of the key projects that were not achieved in the previous financial year

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Highlights of the FY 2011/12

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As we see in the detailed programme performance slides that follow we managed to process a number of policy and legislative projects. We will take it to the public domain in the next financial year. We facilitated the review of certain sections of the Municipal Systems Amendment Act 7of 2011 in the main the Professionalisation of the administration of municipalities

Successful local government elections were held.The number of municipalities were reduced from 283 to 278

Our intervention resulted in at least 92% of ward committees established, 77% ward committee members trained, and municipal wards increasing from 3895 to 4277.We managed to secure funding from the national fiscus to fund ward committee operations in grades 1 to 3 municipalities.

We supported 223 (80%) of the 278 municipalities to establish Municipal Public accounts committees (MPACs), In a change of political leadership initiated by the honourable President Zuma in October 2011, Honourable Minister MR Baloyi was appointed the Minister for Cooperative Governance and Traditional Affairs

We have also responded to government’s call for creating jobs by managing the Community Work Programme (CWP) above expectations.

Highlights of the FY 2011/12We revised the Municipal Property Rates Act which amongst other matters, regulates the power of a municipality to impose rates on property, and provides for the implementation of a transparent and fair system of exemptions, rebates and reductions through their rating policies. To that end the Municipal Property Rates Amendment Bill was approved by the Cabinet and published for public comments in June 2011.We finalised the proposed Bill for Support, Monitoring and Interventions we are ready to present the Bill to Cabinet and Gazette for public consultations in 2012/2013;The purpose of the Bill is to create subordinate legislation to sections 100 and 139 of the Constitution respectivelyGuided by the Ministry and in terms of Chapter 6 of the Public Service Act we facilitated the establishment of the Municipal Infrastructure Support Agency (MISA) which is aimed at supporting service delivery and enhancing capacity in municipalities.Out of a total adjustment budget of R47 Billion that we facilitate to transfer to municipalities the total expenditure on transfers and subsidies was R45,5 billion, which is 95,6% of the total adjusted budget .

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Programme1: Administration

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We developed the Human Resource Plan for the period 2012/13;

We also revised the asset management policy and guidelines, Accommodation Strategy

and service standards for SCM for implementation;

Of the R419 million irregular expenditure reported we managed to facilitate the

condonment of R174 million irregular expenditure. The balance is waiting for National

Treasury approval;

We transferred all payments to our stakeholders in full compliance with DORA; and

We were able to capacitate 95 municipalities on communication strategy.

Strategic Objective: Management of internal financial, administration, and human resource systems

Programme1: Administration cont..

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We facilitated all quarterly organisational performance reviews as planned;

We also ensured that the APP 2012/13 is approved and submitted to NT and Parliament on

time;

We executed nine of the planned eleven audits and issued management reports which are

then followed through at our Senior Management Committee Meetings;

All branches implemented the approved risk management strategy by setting strategic and

operational risks and reporting on then on a periodic basis ;

As a proactive effort we facilitated fraud risk assessments and compiled a fraud risk register

which outlines potential fraud areas; and

We developed the Anti Corruption strategy and resuscitated the necessary reporting and

monitoring structures.

Strategic Objectives•To improve the strategic management and governance processes; and•To ensure integrated planning and reporting

Programme 2: Policy Research and Knowledge Management

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We finalised the analysis of identified legislation that impede service

delivery. The report has been sent to sector departments, SALGA,

Controlesa and the National House of Traditional Leaders for verification;

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We also managed to develop the Knowledge Management Strategy

Strategic Objective: To develop a revised white paper on local government;• To improve performance monitoring and evaluation; and• To create a knowledge base for decision making.

Programme 3: Governance and Intergovernmental Relations

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We finalised the Green Paper on Cooperative Governance; We finalised the Bill on Support, Monitoring and Interventions. This will now give the Minister more

powers to intervene in terms of section 100 and 139 of the Constitution; We secured funding from the national fiscus to fund ward committee operations in grades 1 to 3 municipalities;

Through our coordination efforts aimed at supporting improved audit outcomes of municipalities Through our coordination efforts aimed at supporting improved audit outcomes of municipalities the following progress is recorded: the following progress is recorded:

• 223 of 278 municipalities managed to establish Municipal Public Accounts Committees(MPACs), in some of the remaining 20% of municipalities that have not established MPACs (the main challenge is the size

of such municipalities)• 220 of the 278 (79%) municipalities have internal audit units in place;• 253 of the 278 (91%) municipalities have audit committees in place; We supported the implementation of the clean audit programme in all provinces; and

Strategic Objectives: To review Local Government policy and legislation;To improve the Audit outcome of Municipalities;To implement initiatives to improve administrative and financial management and expenditureTo ensure effective management of the Municipal infrastructure Grant; andTo strengthen Anti-corruption capabilities of municipalities

Programme 4: National Disaster Management Centre

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We ensured that 13 stakeholders aligned their disaster management plans and we supported Ten disaster management centres

Strategic Objectives: To Improve the system of disaster risk management

Programme 5: Provincial and Municipal Government Support

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We conducted Nine provincial IDP assessments sessions ; and

Municipal Systems Amendment Act was assented into law in July 2011.

The following policies were reviewed:The following policies were reviewed:

Notice on the Determination of Remuneration of Councillors;

Notice on the Policy Framework for the Determination of Full Time Councillors;

Recruitment and Retention Strategy;

Competency Framework for Senior Managers; and

Municipal Grading Framework and Remuneration Framework for Senior

Managers.

Strategic Objectives: •To review and amend Local Government policy and legislation to improve human resource management and administrative practices; and•To facilitate the development of credible and simplified IDPs informed by the unique nature of municipalities

Programme 5: Provincial and Municipal Government Support

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We supported 195 municipalities in seven provinces to fill critical posts

and monitored the filling of critical posts in all municipalities;

We conducted MSAA workshops per province to roll-out the

implementation of Municipal Performance Regulations;

Through our coordination all provinces were capacitated on the

implementation of National Capacity Building Framework (NCBF); and

We also facilitated the establishment of the National Municipal Capacity

Coordination and Monitoring Committee (NMCCMC).

Strategic Objectives:To implement initiatives to improve administrative and financial management and expenditure; andTo implement a new approach to coordination of support and capacity building initiatives

Programme 6: Infrastructure and Economic Development

Through our coordination efforts working with sector departments, provinces and municipalities as part of outcome 9 the following has been achieved:

The department of Human Settlements ensured that 84% Households with access to basic level of sanitation

72% Households with access to basic refuse removal services

Households reached with basic services funded by the MIG

1,866 million access to water 1,270 million access to sanitation Access to 2,4 million Kilometres of roads

Strategic Objectives: To ensure increased access to basic electricity, refuse removal, water and sanitation; andTo ensure the roll-out of the Community Work Programme in municipalities

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Programme 6: Infrastructure and Economic Development

Community Work Programme(CWP)

We facilitated the implementation of CWP in 63 Municipalities this

resulted in the creating of 105 218 work opportunities through CWP

We supported the Department of Trade and Industry on the

establishment of 655 cooperatives;

We coordinated the roll-out of Clean Cities and Towns programme in

10 municipalities

Strategic Objectives: To ensure increased access to basic electricity, refuse removal, water and sanitation; andTo ensure the roll-out of the Community Work Programme in municipalities

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Part 3current status of projects that are not

achieved

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Targets that were not achieved: Administration

Target Actual Performance Current status

Develop and Implement the HCM Strategy

We developed the draft HCM Strategy however could not finalise it for implementation due to organisational changes

The development of a comprehensive annual Human Resource Plan will replace this project going forward

5 SADC treaties signed

We could not facilitate any signing of SADC treaties because there was no dedicated human resource This projects have been revised

and included in the 2012/23 APP

3 International MoUs signed

For the same reason above we were also not able to facilitate the signing of MoUs with three international countries

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Targets that were not achieved: Policy Research and Knowledge Management

Target Actual Performance Current statusAssess the state of ICT’s in municipalities

We did not conduct an assessment of the state of ICT in municipalities because the ICBT sub-programme was only resourced to focus on internal departmental work only. We however managed to develop TOR for the assessment of municipalities

In the 2012/13 the project has been replaced by the development of the the Master System Plan which will outline broad interventions in support the key objectives of thedepartment

150 Municipalities supported to streamline reporting requirements

We could not provide the necessary support to municipalities to ensure that there are fewer and appropriate reporting requirements due to the fact that the process of obtaining key performance indicators from sector department took longer than anticipated

The system will be rolled out in the next financial year

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Targets that were not achieved: Governance and Intergovernmental Relations

Target Actual Performance Current statusDraft a Bill on a refined legislative framework for ward committees and community participation

Although we did not finalise the Bill on ward committees and community participation we drafted proposals to inform the drafting of the Bill

The Bill will be drafted in the next financial year after broader consultation with all relevant stakeholders

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Targets that were not achieved: Governance and Intergovernmental Relations cont..

Target Actual Performance Current statusSupport 60% of municipalities to achieve unqualified audits

According to preliminary 2010-11 municipal audit outcomes, 45% of municipalities have unqualified audit outcomes on their financial statements

Challenges of proper records keeping and the quality of financial statements are amongst the causes of this status quo

10% of the MIG performance audit in selected municipalities undertaken

Even though we did not reach our target, we were able to undertake the 1st phase which is risk assessment

As a proactive view in the 2012/13 APP we revised the project to that of supporting municipalities to monitor their MIG expenditure

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Target Actual Performance Current statusProgress reports on conditional grants coordination

We could not finalise the report on conditional grants coordination because of continuing engagement with NT on reform options of the local government infrastructure grant system

The project is continuing in the 2013 financial year focusing on improved administration of grants spending in municipalities, ensure that MIG audit recommendations are implemented in municipalities and to administer, monitor, transfer conditional grants in line with DORA

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Targets that were not achieved: Governance and Intergovernmental Relations cont..

Target Actual Performance

Current status

Introduce the Municipal Property Rates Amendment Bill to Parliament

The Bill has been approved by Cabinet and availed for public comments

Public comments are being considered and the preparations are being made for proper Parliamentary processing

Report on the revisions to the local government equitable share formula submitted

The unavailability of relevant data from Statistics South Africa is a key contributing factor There is an acknowledgement that before we can revise the LGES formula we must first ensure that there is relevant up to date data to enable proper configuration of the LGES formula

The project will be implemented after the release of the census 2011 results

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Targets that were not achieved: Governance and Intergovernmental Relations cont..

Target Actual Performance Current status50% of the remaining (14 DM and their LM) Municipalities supported to reduce incidences of unethical conduct

We managed to support only two municipalities to reduce unethical conduct . The project was put on hold due to the need to review the Anti-Corruption inspectorate unit in line with our extended mandate

In the 2012/13 APP we revised the project to focus on establishment of partnerships with relevant agencies and provinces to fight corruption and to train existing ethics committees on the promotion of ethics

100% of reported and referred cases

We did not achieve this target as planned as only 63% of coordinated Presidential Hotline cases were finalised.4% of coordinated and referred cases finalised

We are in discussion with provinces to ensure that they furnish the department with regular updates on progress of investigations of referred cases

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Targets that were not achieved: Governance and Intergovernmental Relations cont..

Target Actual Performance Current status

Develop the National Indicative Risk Profile (NIRP) for fires and floods

The NDMC managed to develop a draft NIRP for fires due to lack of sufficient human resources to execute the project

We have since capacitated the NDMC and in the 2012/13 APP we planned to finalise the NIRP for fires, develop and finalise the NIRP for Floods

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Targets that were not achieved: National Disaster Management Centre

Targets that were not achieved: Provincial and Municipal Government Support

Target Actual Performance Current status84 Municipal plans aligned to the municipal segmentation model

The segmentation model has not been developed as yet because it is dependent upon the completion of differentiated approach to municipal financing, planning and support

As at June 2012 the differentiated approach has been finalised. We will begin to develop the segmentation model which will better categorise municipalities according to their varied capacities and contexts

80 Identified smaller municipalitiesfully implementing the revised IDP framework

We could not implement the simplified IDP framework for smaller municipalities as planned. This is because the framework was only finalised in the year under review. We have conducted Workshops on the framework in all provinces

The project will continue in the next financial year

50 Identified smaller municipalities fully implementing the simplified revenue plans

We did not support municipalities to implement the simplified revenue plans due to focus being directed at supporting municipalities to revise their IDP frameworks

As at 30 June 2012 a total of 255 municipal IDPs were revised in 8 provinces resulting in better quality IDPs

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Targets that were not achieved: Provincial and Municipal Government Support cont...

Target Actual Performance Current status278 Municipalities supported on land ownership audit

We participated in the finalisation of audits and further had engagements with the Housing for the facilitation of release of ownership

The Housing Development Agency are now in a process of finalise ownership of land

2 metropolitan cities Top 9 municipalities supported with housing accreditation

We could only manage to provide inputs to the Department of Human Settlements on the accreditation process of metros

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Target Actual Performance Current status1 Densification policy framework We only managed to hold

engagements with DHS on the densification policy framework. DHS has not finalised the densification policy framework

The DHS is the lead department hence these projects has been removed from the 2012/13 APP and the revised delivery agreement on outcome 9 for alignment purposes

We will continue to support the establishment of Human settlement committees in the 6 district municipalities

70 Municipalities with audited land ownership reports

We engaged the Housing Development Agency jointly with DHS to facilitate the release of ownership of land. DHS is still in process of identifying the land with other custodian Departments

15 Municipalities implementing the joint action plan

We engaged with key stakeholders on the identification of support areas during the implementation of the National Upgrading Support Programme (NUSP).

Human Settlement Committees established for 7 metros and 6 district municipalities

We continue to participate in the establishment and functionality of these committees by DHS

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Target Actual Performance Current statusReduced 7% of municipalities overspending on OPEX

Projects were not reported on due to lack of verified data by NT

From a total adjusted budget of R210,7 billion , R145,0 (69%) was spent as at 31 March 2012 (source: S71 report)

Reduced 47% of municipalities under spending on CAPEX

Out of the adjusted capital budget of RR46 billion, only R18,8 billion (40,8%) was spent by 31 March 2012

25% of debt owed to municipalities reduced

The project was not reported on due to lack of credit control and debt collection policies

Aggregate municipal debt amounted to R76,6 billion (household, Business and Government) by end of September governments debt was reduced to 3.5 billion

Municipalities owed R11.1 billion as at 31 March 2012, an overall increase of R1.4 billion. (source: S71 report)

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Targets that were not achieved: Infrastructure and Economic Development

Target Actual Performance Current status10 fully functional Advisory Councils established

We managed to facilitate the establishment of 6 of the 10 planned functional Advisory Councils due to limited financial resources

We revised the project in the 2012/13 APP to focus on supporting the development of Business DevelopmentForums in district municipalities

10 Emerging enterprise, emerging farmer and co-operatives forums established

We realised the need to incorporate Forums as sub-structure of Advisory Councils instead of an independent stand-alone structure

We therefore have revised the project to focus on supporting the formation of strategic partnerships to accelerate the developmentof cooperatives

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Targets that were not achieved: Infrastructure and Economic Development

Target Actual Performance Current status10 Municipal land use forums established

We realised the need to incorporate the functions of the forums as sub-structures of Advisory Councils instead of an independent stand-alone structures

We therefore have revised the projects to focus on supporting the formation of strategic partnerships were needed10 local private/public

procurement managers’ forums established

10 substations built and upgraded

Due to the delay in acquisition of material and land the Department of Energy managed to facilitate the upgrading of two of the 10 planned substations6 projects are at an advanced stage and should be completed by June 2012 and 2 will be completed in October 2012

The project has been discontinued and is now managed by the Department of Energy

87% Households with access to electricity supply

In collaboration with the department of energy 85% of the planned 87% households have access to electricity due to capacity challenges

We want to prioritise access to basic level of service by all indigent households

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Targets that were not achieved :Infrastructure and Economic Development

Target Actual Performance Current status96% Households with access to basic water services

We were able to only provide estimates that 94.7% of the planned 96% of households with access to water due to capacity constraints at municipalities

As at 31 March 2012 Households with access to basic level of water increased by 0.3% from 94.7% to 95%

88% Households with access to basic level of sanitation

We were able to provide 84% of the planned 88% of households with access to sanitation

We will continue to prioritise provision of these critical basic services

As at 31 March 2012 additional 56 600 households were serviced

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Target Actual Performance Current status10 Municipalities which have signed MoUs (BAaM)

We managed to facilitate the signing of two of the Ten planned MOUs on Business-Adopt-A-Municipality because consultative process between municipalities, the DCoG and businesses took longer than expected

We intend facilitating the signing of more MoUs during 2012/13 

10% of CWP job opportunities created through functional cooperatives at a ward level

We could not implement the project because the project was delinked from the CWP

 The project is discontinued  

6 469 Jobs created through supported cooperatives

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Targets that were not achieved :Infrastructure and Economic Development

Part 4FINANCIAL PERFORMANCE 2011/12

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Final Audited Status

Amounts are in R’000

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2011/12 Operational Spending (excluding major transfer)

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Division of 2011/12 Departmental Expenditure

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2011/12 Operating Expenditure

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MATTERS OF IMPORTANCE• The financial information as presented above includes the Department of Traditional Affairs

(DTA)as a programme. The application for a separate vote for DTA is currently under consideration by the Minister of Finance.

• The operational budget for the 2 departments constitutes 2% of the CoGTA vote with the 98% going to transfers to Municipalities and entities.

• The Division of Revenue Act allows National Treasury to recover the unspent conditional grants of municipalities by offsetting them from future Equitable Share allocations, these offset amounts make up the majority of the under-expenditure in the department.

• The Municipal infrastructure Support Agency (MISA) was proclaimed by the President as a ring-fenced government component. During 2011/12 MISA worked in collaboration with the Development Bank of Southern Africa to continue with the provision of support to municipalities for improved infrastructure provision.

• All irregular expenditure disclosed (R751 m) has been investigated , of which R676 million is still with National Treasury ( Extension of contracts) and the balance is being considered by the Accounting Officers.

• All contracts which previously generating irregular expenditure (90%) have not been renewed and new ones were entered into after open tender processes were followed.

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2011/12 AUDITOR GENERAL’S

AUDIT REPORT

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2011/12 AUDIT REPORTThe department received an unqualified audit opinion from the Auditor General, a step in the right direction as compared to 2010/ 11 financial year which was a qualified audit opinion. The matters raised by the AG on the report can be summarised as follows:

-Predetermined objectives •Usefulness of information• Reliability of information•Achievement of targets•Non compliance with laws and regulations

-Annual Financial Statements, performance reports and annual report•Material misstatements corrected during the audit to disclosure notes

-Procurement and contract management•Non compliance with laws and regulations

-Expenditure management•Non compliance with laws and regulations – payments within 30 days•Non compliance with laws and regulations – irregular expenditure incurred

-Asset Management management•Inadequate systems and internal controls

-Internal controls•Leadership and governance

-Post Audit Action Plan •This has been developed to address all matters raised by the Auditor General and other weaknesses in the Department.

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2011/12 UNSPENT FUNDS

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2011/12 UNSPENT FUNDSOverall Expenditure:

The departmental overall expenditure performance depicted 95.9% spending, the 4.1% under expenditure amounts to R1.9 billion. This under expenditure is sub-divided as follows:

Compensation of employees:

Final Allocation: R246 615Actual expenditure R234 987Variance R11 628 = 95.3% Expenditure.

The under expenditure is largely due to posts within MISA and CWP which were not filled at the end of the financial year

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2011/12 UNSPENT FUNDS (CONT)Goods and services:

Allocation: R447 543Actual expenditure R425 995Variance R21 548 = 95.4 % Expenditure

The under-spending on goods and services is mainly due to projects that were either cancelled or deferred to the following financial year.

The department has timeously approved a procurement plan which is currently being implemented.

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2011/12 UNSPENT FUNDS (CONT)

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Payments of Capital Assets:

Allocation: R19 796Actual expenditure R8 277Variance R11 519= 41.8% Expenditure

The under-spending is due partly to R5.6 million within CWP that was not spent due to the implementing agents being appointed late in the financial year, the previous ones did not want to invest in capital towards the end of their term.

The balance relates to motor vehicles for disaster management unit bought late in the financial year and paid for in 2012 / 2013 financial year.

2011/12 UNSPENT FUNDS (CONT)

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Transfers and subsidies:

The under expenditure of R 1.9 billion is due to the following transfers:•LG Equitable Share reflects an under- spending of R935 million that has been withheld by National Treasury as an offset on the non performance of municipalities on other conditional grants.• Disaster relief Grant reflects an under- spending of R 727 million, the grant is only utilised on the disasters that have been declared and the provinces & municipalities have fully complied with their legislative requirements.

•Councillor once-off Gratuity reflects an under - spending of R222 million for non-returning councillors after the Local government elections were not all disbursed to councillors at year end due to cumbersome administrative processes.

•United Cities of LG in Africa transfer R5 million has been suspended pending discussions between executive authorities on future arrangements.

•CWP the R11 million under expenditure relates to late implementation of the projects relating to establishment cooperatives.

Part 5

RESPONSE TO CONCERNS RAISED BY THE PORTFOLIO COMMITTEE IN

2010/11

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Response to issues raised by the Portfolio Committee in 2010/11

Concerns Interventions by DCoGWhat interventions are in place to address the findings of the Auditor-findings of the Auditor-General General i.e. implementation of an adequate review process of financial statements prior to submission of the statements for audit, to ensure compliance, capacitating of the internal audit unit, and creation of checklists indicating steps to be followed prior to approval to payment.

Following the findings of the Auditor-General, certain measures had been put in place, including the re-checking of expenditure for 2010/2011, and the taking of disciplinary actions against individuals who had not adhered to procedures. A post Audit Action Plan FY 2012/13 has been developed to address the 2011/12 audit finding plan has been approved by the Audit committee.The post of Executive Manager: Internal Audit has been filled

How will COGTA unlock unspent funds unspent funds by Municipalities and how it was going to address the substantial debt owed debt owed to some Municipalities to some Municipalities and other Departments.

DCoG, in collaboration with Performance Monitoring and Evaluation (PME) team and the Department of Public Works (DPW) had established a task team that had finalised the aggregation of Debt per Provinces, as a pilot study. Areas included were eThekwini, King Sabata Dalindyebo and Port St Johns.There were complex issues around resolving the debt. In some cases where the Government owned debt, there were disputes over that debt. We propose that the Committee put pressure on National Treasury to review and modify the budget process.

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Response to concerns raised by the Portfolio Committee in 2010/11 cont..

Concerns Interventions by DCoGWhat intervention is in place to improve on the infrastructure infrastructure development development competencies of municipalities

Through MISA the technical capacity building programme will be rolled-out to identified municipalities. The department is also assisting municipalities to ensure that the life cycle costs are properly costed .

What caused the high staff turnover staff turnover and what is the department doing to improve on the situation

The high staff turnover had resulted from anxieties in staff as to their future role in the Department, once it had been restructured. There is a retention strategy in place which covers staff morale, corporate governance and organisational structures aimed at securing terms of tenure, targeted training and development

Why was there no compliance checklist for procurementprocurement and what happened to non compliant individuals.

A checklist has been introduced and individuals that did not comply were set for a disciplinary hearing.

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Response to concerns raised by the Portfolio Committee in 201O/11 cont..

Concerns Interventions by DCoGWho is carrying out investigations into non-investigations into non-compliance compliance and when will the Committee expect the results. More details are needed on the inspectorate on fraud and corruption, who could initiate investigations, and how many were in progress

The Anti Corruption Investigation Unit was currently focused on three internal investigations, Externally, the unit was coordinating the Anti Corruption Inspectorate, through which the Presidency had referred 121 enquiries to the Department. The Public Service Committee hotline had referred 251 cases to the Department

What is the department’s explanations on the transactions that resulted in irregular expenditure irregular expenditure of R419 million and had been authorised without the three necessary quotations.

It is incorrect for line managers, in terms of the National Treasury regulations, to fail to follow the set procedures for the authorisation of procurement. This amount was also the result of the repeated extension of contracts. The process has since been reviewed, proper procedures have been introduced together with strict monitoring of the 3 quotations for each procurement. Out of the 419 million irregular expenditure reported 174 million was condoned and the balance is waiting for national treasury approval

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Response to concerns raised by the Portfolio Committee in 201O/11 cont..

Concerns Interventions by DCoGWhat is the criteria used in the selection of sites selection of sites for the Community Worker Programme

Selection of sites is based on the provision of a range of indications on five indicators, which related to income and material, employment, health, education and living environment. It is also based on selections that were aligned to other ongoing projects, for example the War on Poverty

What is the Department doing about a particular area where a crisis situation had been reported in relation to selection of CWP sites

No official complaint had been lodged at the Department, but it appeared that there were disputes around the payment of people working with the implementing agent, but not with DCoG. However we will intervene where needed

What happens in relation to the projects where the targets had not been achievedtargets had not been achieved, or where only partially achieved, are they automatically rolled over, unchanged, to the next year?

Each project is evaluated before being rolled over. During the development of the APP 2012/13 a review of projects was done to ensure continuity and to align to the delivery agreement on outcome 9.The progress on projects that were not achieved is also given in part B of this presentation

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Response to concerns raised by the Portfolio Committee in 2010/11 cont..

Concerns Interventions by DCoGWhat are the cause of delays in responses to disasterdisaster in the parts of the Eastern Cape Eastern Cape that had been hit by tornadoes

The Department noted that some challenges were still being faced in this regard. However, interventions had been made. A new conditional grant of R775 million had been made, for 2011/12, at Provincial and Municipal level for short-term humanitarian relief, and this could improve the response to disasters. In addition, DCoG was working on the review of the Framework, through the National Disaster Management Committee (NDMC), and had engaged with the ongoing research by the Financial and Fiscal Commission to make recommendations on more effective disaster funding models. Finally, the Department was in the process of reviewing the Disaster Management Act and that review would include a review of the funding sections.

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Conclusion

1. Major reasons for underperformance in the past financial year was related to the fundamental restructuring process which has now been finalised;

2. We have developed a PAAP which has been shared with the External Audit Committee as well as the office of the Auditor-General, this is to address all issues raised by the AG in order to improve on the performance;

3. We have introduced a weekly internal audit steering committee meeting with the purpose of monitoring progress against the PAAP; and

4. We managed to fill key positions on financial management, risk management and internal audit.

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Conclusion

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