Consolidated Annual Municipal Performance Report (Section 47) 2014/15 The Select Committee on Co-operative Governance and Traditional Affairs 1 November 2016

Compilation of Section 47 report Section 47 Process Submission of financial statements by municipalities: 31 August Completion of Audit process by 30 November Completion of draft municipal annual report by 31 December Tabling to Council by 31 January (Make public after tabling for comments) After taking into account public comments and Council adoption of oversight report by 31 March (submit copy to AG, PT, MEC and provincial legislature) Compilation of Section 47 report

Methodology followed Compilation of the report involves various data gathering exercises Sources: Municipal Annual Reports/Annual Financial Statements Internal & External Information (Sector Departments) Departmental reports i.e. Annual Report, Basic Services report, Political Composition StatS SA 2011 Census data The PERO & MERO Department of Human Settlements Annual Report 2013/14 Provincial Treasury Database National Treasury Quarterly report on MFMA monitoring Auditor General Report Draft 2: Submitted to municipalities for comments and inputs Only 8 municipalities provided feedback and comments

Structure of the report The report is structured as follows: Background and Purpose of the Report; Local Government Legislative Framework Municipal Annual Report Process; Methodology followed in compiling the report; Demographic and socio-economic data; Analysis of municipal performance for the 2014/2015 financial year; and Provincial initiatives which support municipalities

Overview The Municipal Systems Act no 32 of 2000, Section 47, mandates the MEC for Local Government to annually compile and submit a consolidated report on the performance of municipalities; The purpose of the report is to account to the citizens in the province on the performance of municipalities and the status of service delivery in the Western Cape; and It upholds the principles of accountability and transparency in local government.

Analysis of Municipal Performance for 2014/15 Municipal Manager and Section 56 posts A total of 151 were filled in the province; 27 Municipal Managers and 124 Senior Managers 7,2 % vacancy – Acting arrangements were in place for the11 vacant posts; 143 performance agreements were signed and submitted to MEC for Local Government; 21 women appointed at senior management level in 19 municipalities, which is a slight increase compared to the previous year

Analysis of Municipal Performance for 2014/15 Skills development Workplace skills plan submitted by all municipalities to LGSETA Various capacity and skills development initiatives were provided with municipalities spending their skills budget Performance Management Systems (PMS) Performance Management Systems (PMS) frameworks were adopted by all councils; and PMS cascaded in 25 municipalities, Increase as compared to 17 of the previous year. Thusong Services New Thusong Centres established in the following municipalities: Mossel Bay; Cape Agulhas; Kannaland; and Theewaterskloof. Lease agreements were concluded with various government departments Thusong mobiles reached 31 440 citizens while Thusong Centres reached 1,2 million

Analysis of Municipal Performance for 2014/15 Ward Committees Improvement in ward functionality from 354 in 2013/14 to 386 in 2014/15 Community Work Programme (CWP) Community Work Programme implemented in 13 municipalities, increase compared to 11 in previous year 6890 work opportunities created in 2014/15 compared to 7 748 in 2013/14 Partnerships established with municipalities for the implementation of the programme Anti-corruption and Fraud Prevention plans 26 municipalities had Anti-corruption and fraud prevention plans adopted Bitou, Oudtshoorn, Prince Albert and Beaufort West had draft plans 13 municipalities had ethics and anti-corruption committee established

Analysis of Municipal Performance for 2014/15 Compliance Monitoring Adoption of final IDPs 30 municipalities in the Province adopted their final IDPs Submission of draft budget Western Cape municipalities have continued to retain the positive trend of approving and submitting the draft annual budget on time Submission of SDBIP All 30 municipalities submitted their SDBIP’s- Oudtshoorn only submitted draft SDBIP Submission of Mid-year assessment report All Western Cape municipalities have complied in submitting their Mid-Year assessment reports for 2014/15 financial year to the Provincial Treasury. Submission of Annual Financial Statements All Western Cape municipalities have complied in submitting their Annual Financial Statements for 2014/15 financial year to the Auditor General. Tabling of Annual Reports All 30 municipalities tabled their Annual Reports

Analysis of Municipal Performance for 2014/15 Compliance Monitoring Adoption of oversight reports 28 municipalities that tabled their Annual Reports have adopted the oversight report; 24 municipalities approved their annual report without reservation; Saldanha Bay, Knysna and Eden District Municipalities approved with reservations; and Witzenberg, Oudtshoorn, Bitou and Central Karoo District did not provide information Provision of Service Delivery 95% of households are serviced with water; 94% of households are serviced with electricity; 94% of households are serviced with sanitation; and 94% of households are serviced with refuse removal on site. Free basic Services All municipalities are providing FBS to their indigent households Generally municipalities provides between 6kl to 10 kl of free basic water and up to 100 kWh of free basic electricity.

Analysis of Municipal Performance for 2014/15 Municipal Infrastructure Grant MIG expenditure reached 97,4% at the end of June 2015

Analysis of Municipal Performance for 2013/14 – 2014/2015 Performance against budget The total operating revenue budget amounted to R39,8 billion in 2013/14 while R41,4 billion in 2014/15; and Total operating expenditure budget amounted to R37,9 billion in 2013/14 while R38,2 billion in 2014/15. Majority of municipalities were able to increase their operating revenue as compared to the 2013/2014 financial year. Capital expenditure In 2013/14, Capex amounted to R6,39 billion or 81.1 per cent of the adjusted budgeted amount of R7,8 billion. In 2014/15, Capex amounted to R6.81 billion or 79.5 per cent of the adjusted budgeted amount of R 8.56 billion. Debt Management Total debtors were 8,42 billion; and Outstanding debtors in respect of water services are the highest at R2.45 billion. Household debt to municipalities continue to grow and constitute the greatest (77.57% or R6 372 399) proportion of debt owed to municipalities.

Analysis of Municipal Performance for 2013/14 – 2014/2015 Audit Outcomes for last five years

Part C: Provincial initiatives in supporting municipalities Municipal Governance Review and Outlook (MGRO) Focus on clean governance and improvement of audit outcomes in municipalities; Active assistance of municipalities in raising the levels of their governance; Intention is to develop a consolidated Municipal Governance Action Plan (MGAP) incorporating strategies from municipalities, PT and DLG. Provincial Treasury assistance: PDO training; SCM interventions; and Asset management. Department of Local Government assistance: Municipal Governance assistance; Municipal support and capacity building; and Municipal performance monitoring workshops,

Summary Municipalities are under pressure to improve service delivery Electricity provision a major challenge Drought- Water shortages Consultation with communities Stakeholder Governance challenges