1. SECTION 47 REPORT 2014/15 (SUMMARY)
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SECTION 47 REPORT 2014/15 (SUMMARY)
PRESENTATION TO THE PORTFOLIO COMMITTEE ON
22 NOVEMBER 2016

2. OUTLINE OF THE PRESENTATION
Purpose
Legislative Background;
Overview of the demographics per district;
Summary per Key Performance Area (KPA); and
Recommendations

3. PURPOSE
To present to the Portfolio Committee a summary of the S47 report for the 2014/15 financial year for Mpumalanga Province;
To highlight key challenges and proposed interventions presented in the 2014/15 Section 47 Report; and
To make the necessary recommendations

4. LEGISLATIVE BACKGROUND
The RSA Constitution:
-Section 152(1): Objects of local government-
(a) to provide democratic and accountable local government for communities;
(b) to ensure the provision of services to communities in a sustainable manner;
(c) to promote social and economic development
(d) to promote safe and healthy environment; and
(e) to encourage the involvement of communities and community organisations in matters of local government
The Local Government: Municipal Systems Act (Act 32 of 2000):
-Section 46(1): Preparation of annual performance report by municipalities;
- Section 47: Preparation and submission of a report by the MEC to the provincial legislature, the Minister; The National Council of Province (NCOP).

5. LEGISLATIVE BACKGROUND (Cont…)
Section 48: Preparation and submission annually by the Minister to parliament and the MEC’s, of a consolidated report on the performance of local government
Local Government: Municipal Finance Management Act (Act 56 of 2003)
Section 121(1): Preparation and adoption of Annual Reports by the municipalities

6. OVERVIEW OF THE DEMOGRAPHIC PROFILE
NKANGALA DISTRICT
Local Municipalities:
There are six local municipalities namely: Emakhazeni, Steve Thswete, Emalahleni, Victor Khanye, Thembisile Hani and Dr JS Moroka;
Population number:
constituting 32.4% of the total population in the province;
Number of households:
constituting 33.2% of the total population in the province; \

7. OVERVIEW OF THE DEMOGRAPHIC PROFILE
EHLANZENI DISTRICT
Local Municipalities:
There are five local municipalities namely: Mbombela; Umjindi; Nkomazi; Bushbuckridge and Thaba Chweu;
Population number:
constituting 41.8% of the total population in the province;
Number of households:
constituting 41.4% of the total population in the province; \

8. OVERVIEW OF THE DEMOGRAPHIC PROFILE
GERT SIBANDE DISTRICT
Local Municipalities:
There are seven local municipalities namely: Chief Albert Luthuli; Msukaligwa; Mkhondo; Lekwa; Dr Pixley ka Isaka Seme; Dipaleseng and Govan Mbeki;
Population number:
constituting 25.8%% of the total population in the province;
Number of households:
constituting 25.4% of the total population in the province; \

9. MUNICIPAL KEY PERFORMANCE AREAS: GOOD GOVERNANCE
EHLANZENI DISTRICT
Functionality of Troika and Council
Troika and Councils were functional and holding meetings as scheduled in all municipalities except in Thaba Chweu LM;
Poor relations between members of the troika had resulted in political tensions and instability that had negatively affected the structures of governance within the municipality and compromised the oversight functions of council and its committees;
Political Stability- Protest Actions
Areas of instability recorded as 61 incidents of community protests were recorded: Bushbuckridge 27, Mbombela 15, Thaba Chweu 1, Umjindi 4 and Nkomazi 14.

10. MUNICIPAL KEY PERFORMANCE AREAS: GOOD GOVERNANCE
EHLANZENI DISTRICT (Cont…)
Functionality of Council Committees
All council committees were established;
All council committees were functional and holding meetings as required;

11. MUNICIPAL KEY PERFORMANCE AREAS: GOOD GOVERNANCE
EHLANZENI DISTRICT (Cont…)
Effectiveness of Council Committees:
All municipalities, except Thaba Chweu LM, convened portfolio meetings as planned;
All municipalities, except Thaba Chweu LM, had defined the roles and responsibilities of committees and political office bearers;
All municipal councils, except Thaba Chweu LM, had adopted code of conduct for both councillors and staff;

12. MUNICIPAL KEY PERFORMANCE AREAS: GOOD GOVERNANCE
GERT SIBANDE DISTRICT
Functionality of Troika and Council
Troika and Councils were functional and holding meetings as scheduled in all municipalities;
Political Stability- Protest Actions
Areas of instability recorded as 19 incidents of community protests were recoded: Chief Albert Luthuli 6, Mkhondo 6, Dipaleseng 2, Lekwa 3, Govan Mbeki 1, Dr Pixley ka Isaka Seme 1

13. MUNICIPAL KEY PERFORMANCE AREAS: GOOD GOVERNANCE
GERT SIBANDE DISTRICT (Cont…)
Functionality of Council Committees
All council committees were established;
All council committees were functional and holding meetings as required; and
The Audit Committee for Msukaligwa Local Municipality was not functional as it did not convene the meetings and/or submit any reports to council

14. MUNICIPAL KEY PERFORMANCE AREAS: GOOD GOVERNANCE
GERT SIBANDE DISTRICT (Cont…):
Effectiveness of Council Committees:
All municipalities convened portfolio meetings as planned;
All municipalities, except Mkhondo LM, had defined the roles of committees and political office bearers;
All municipal councils except Mkhondo LM adopted code of conduct for both councillors and staff

15. MUNICIPAL KEY PERFORMANCE AREAS: GOOD GOVERNANCE
NKANGALA DISTRICT
Functionality of Troika and Council
Troika and Councils were functional and holding meetings as scheduled in all municipalities;
No formal Troika meeting was held at Emalahleni Local Municipality due to poor relations amongst members of the Troika;
Political Stability- Protest Actions
Areas of instability recorded as 12 incidents of community protests were recorded: Emalahleni 8, Victor Khanye 2 and Dr JS Moroka 2.

16. MUNICIPAL KEY PERFORMANCE AREAS: GOOD GOVERNANCE ( Cont.…)
NKANGALA DISTRICT (Cont…)
Functionality of Council Committees
All council committees were functional and holding meetings as required;
Nkangala District Municipality is sharing its Audit Committee with it’s constituent local municipalities except for Emalahleni LM;

17. MUNICIPAL KEY PERFORMANCE AREAS: GOOD GOVERNANCE (Cont.….)
NKANGALA DISTRICT (Cont…)
Effectiveness of Council Committees
All municipalities held portfolio meetings as planned;
All municipalities had defined the roles of committees and political office bearers;
All municipal councils except Thembisile Hani LM adopted code of conduct for both councillors and staff;

18. MUNICIPAL KEY PERFORMANCE AREAS: BASIC SERVICES
EHLANZENI DISTRICT
Service Delivery and Infrastructure Development
Households with access to Potable Water
In 2014/15 financial year Ehlanzeni District had households compared to in 2013/14 financial year;
Out of households (73%) had access to potable water; There was a slight increase of 1% in the number of households with access to potable water compared to the 2013/14 financial year where 72% had access.

19. MUNICIPAL KEY PERFORMANCE AREAS: BASIC SERVICES
EHLANZENI DISTRICT (Cont…)
Service Delivery and Infrastructure Development
Households with access to Free Basic Water
In 2014/15 financial year Ehlanzeni District had indigents compared to in 2013/14 financial year;
In 2014/15 financial year indigents out of a total of (90.6%) had access to Free Basic Water. There was an increase of 28.6% in respect of indigents that had access to Free Basic Water compared to the 2013/14 financial year where only 62.2% indigents had access.

20. MUNICIPAL KEY PERFORMANCE AREAS: BASIC SERVICES
EHLANZENI DISTRICT (Cont…)
Service Delivery and Infrastructure Development
Households with access to Sanitation
In 2014/15 financial year Ehlanzeni District households out of (52%) had access to sanitation;
There was a decrease of 35.8% in the number of households that had access to sanitation compared to the 2013/14 financial year where 87.8%

21. MUNICIPAL KEY PERFORMANCE AREAS: BASIC SERVICES
EHLANZENI DISTRICT (Cont…)
Service Delivery and Infrastructure Development
Households with access to Free Basic Sanitation
In 2014/15 financial year Ehlanzeni District had indigents compared to in 2013/14 financial year;
In 2014/15 financial year indigents out of a total of (22%) had access to Free Basic Sanitation. There was a decrease of 38% in respect of indigents that had access to Free Basic Sanitation compared to the 2013/14 financial year where 60% indigents had access.

22. MUNICIPAL KEY PERFORMANCE AREAS: BASIC SERVICES
EHLANZENI DISTRICT
Service Delivery and Infrastructure Development
Households with access to Electricity
In 2014/15 financial year Ehlanzeni District had households compared to in 2013/14 financial year;
Out of households (85%) had access to electricity; There was a decrease of 9.44% in the number of households with access to electricity compared to the 2013/14 financial year where 94.44% had access.

23. MUNICIPAL KEY PERFORMANCE AREAS: BASIC SERVICES
EHLANZENI DISTRICT (Cont…)
Service Delivery and Infrastructure Development
Households with access to Free Basic Electricity
In 2014/15 financial year Ehlanzeni District had indigents compared to in 2013/14 financial year;
In 2014/15 financial year indigents out of a total of (40%) had access to Free Basic Electricity. There was a decrease of 56% in respect of indigents that had access to Free Basic Electricity compared to the 2013/14 financial year where 96% indigents had access.

24. MUNICIPAL KEY PERFORMANCE AREAS: BASIC SERVICES
GERT SIBANDE DISTRICT
Service Delivery and Infrastructure Development
Households with access to Potable Water
In 2014/15 financial year Gert Sibande District had households compared to in 2013/14 financial year;
Out of households (94%) had access to potable water; There was a decrease of 3.3% in the number of households with access to potable water compared to the 2013/14 financial year where 97.3% had access.

25. MUNICIPAL KEY PERFORMANCE AREAS: BASIC SERVICES
GERT SIBANDE DISTRICT (Cont…)
Service Delivery and Infrastructure Development
Households with access to Free Basic Water
In 2014/15 financial year Gert Sibande District had indigents compared to in 2013/14 financial year;
In 2014/15 financial year indigents out of a total of (97%) had access to Free Basic Water. There was an increase of 6% in respect of indigents that had access to Free Basic Water compared to the 2013/14 financial year where only 91% indigents had access.

26. MUNICIPAL KEY PERFORMANCE AREAS: BASIC SERVICES
GERT SIBANDE DISTRICT (Cont…)
Service Delivery and Infrastructure Development
Households with access to Sanitation
In 2014/15 financial year Gert Sibande District households out of (83%) had access to sanitation;
There was a decrease 2.6% in the number of households that had access to sanitation compared to the 2013/14 financial year where 85.6% households had access.

27. MUNICIPAL KEY PERFORMANCE AREAS: BASIC SERVICES
GERT SIBANDE DISTRICT (Cont…)
Service Delivery and Infrastructure Development
Households with access to Free Basic Sanitation
In 2014/15 financial year Gert Sibande District had indigents compared to in 2013/14 financial year;
In 2014/15 financial year indigents out of a total of (93%) had access to Free Basic Sanitation. There was an increase of 10% in respect of indigents that had access to Free Basic Sanitation compared to the 2013/14 financial year where 83% indigents had access.

28. MUNICIPAL KEY PERFORMANCE AREAS: BASIC SERVICES
GERT SIBANDE DISTRICT
Service Delivery and Infrastructure Development
Households with access to electricity
In 2014/15 financial year Gert Sibande District had households compared to in 2013/14 financial year;
Out of households (86%) had access to electricity; There was an increase of 0.5% in the number of households with access to electricity compared to the 2013/14 financial year where 85.50% had access.

29. MUNICIPAL KEY PERFORMANCE AREAS: BASIC SERVICES
GERT SIBANDE DISTRICT (Cont…)
Service Delivery and Infrastructure Development
Households with access to Free Basic Electricity
In 2014/15 financial year Gert Sibande District had indigents compared to in 2013/14 financial year;
In 2014/15 financial year indigents out of a total of (83%) had access to Free Basic Electricity. There was a decrease of 6.3% in respect of indigents that had access to Free Basic Electricity compared to the 2013/14 financial year where 89.3% indigents had access.

30. MUNICIPAL KEY PERFORMANCE AREAS: BASIC SERVICES
NKANGALA DISTRICT
Service Delivery and Infrastructure Development
Household with access to Potable Water
In 2014/15 financial year Nkangala District had households compared to in 2013/14 financial year;
Out of households (89%) had access to potable water; There was a decrease of 6.5% in the number of households with access to potable water compared to the 2013/14 financial year where 95.5% had access.

31. MUNICIPAL KEY PERFORMANCE AREAS: BASIC SERVICES
NKANGALA DISTRICT (Cont…)
Service Delivery and Infrastructure Development
Households with access to Free Basic Water
In 2014/15 financial year Nkangala District had indigents compared to in 2013/14 financial year;
In 2014/15 financial year indigents out of a total of (72%) had access to Free Basic Water. There was an increase of 4% in respect of indigents that had access to Free Basic Water compared to the 2013/14 financial year where only 68% indigents had access.

32. MUNICIPAL KEY PERFORMANCE AREAS: BASIC SERVICES
NKANGALA DISTRICT (Cont…)
Service Delivery and Infrastructure Development
Households with access to Sanitation
In 2014/15 financial year Nkangala District households out of (52%) had access to sanitation;
There was a decrease of 35.8% in the number of households that had access to sanitation compared to the 2013/14 financial year where 87.8% households had access.

33. MUNICIPAL KEY PERFORMANCE AREAS: BASIC SERVICES
NKANGALA DISTRICT (Cont…)
Service Delivery and Infrastructure Development
Households with access to Free Basic Sanitation
In 2014/15 financial year Nkangala District had indigents compared to in 2013/14 financial year;
In 2014/15 financial year indigents out of a total of (94%) had access to Free Basic Sanitation. There was an increase of 40% in respect of indigents that had access to Free Basic Sanitation compared to the 2013/14 financial year where 54% indigents had access.

34. MUNICIPAL KEY PERFORMANCE AREAS: BASIC SERVICES
NKANGALA DISTRICT
Service Delivery and Infrastructure Development
Households with access to electricity
In 2014/15 financial year Nkangala District had households compared to in 2013/14 financial year;
Out of households (77%) had access to electricity; There was a decrease of 10.26% in the number of households with access to electricity compared to the 2013/14 financial year where 94.44% had access.

35. MUNICIPAL KEY PERFORMANCE AREAS: BASIC SERVICES
NKANGALA DISTRICT (Cont…)
Service Delivery and Infrastructure Development
Households with access to Free Basic Electricity
In 2014/15 financial year Nkangala District had indigents compared to in 2013/14 financial year;
In 2014/15 financial year indigents out of a total of (91%) had access to Free Basic Electricity. There was an increase of 8% in respect of indigents that had access to Free Basic Electricity compared to the 2013/14 financial year where 83% indigents had access.

36. MUNICIPAL KEY PERFORMANCE AREAS: BASIC SERVICES
Spatial Rationale
All municipalities in the province have an approved Spatial Development Framework (SDF);
Only 4 municipalities had an SDF which is compliant with the requirements of Spatial Planning and Land Use Management Act, 2013 (SPLUMA);
The compliant municipalities are: Umjindi LM; Thaba Chweu LM; Govan Mbeki LM and Gert Sibande DM.

37. MUNICIPAL KEY PERFORMANCE AREAS: BASIC SERVICES
Integrated Development Planning
All municipalities had reviewed their IDP’s;
Municipalities had improved in the achievement of their developmental objectives;

38. MUNICIPAL KEY PERFORMANCE AREAS: BASIC SERVICES
Disaster Management Policy Framework
14 out of 21 municipalities had disaster management centres established;
5 municipalities shared disaster management centres with their district municipalities;
8 municipalities (3 district and 5 local) have disaster management framework;
The challenges faced by the municipalities are as a result of non appointment of dedicated officials who specialise in disaster management and the failure to implement disaster management plans;

39. MUNICIPAL KEY PERFORMANCE AREAS: BASIC SERVICES
Disaster Management Policy Framework (Cont…)
Municipalities do not prioritise disaster management during the planning and budgetary processes, resulting in severe budgetary constraints that limit the implementation of disaster management plans. The function is regarded as a non-trading or revenue generating service. It is also regarded by local municipalities as a function of the district municipalities

40. MUNICIPAL KEY PERFORMANCE AREAS: LOCAL ECONOMIC DEVELOPMENT
Analysis of LED and EPWP
All 21 municipalities in the province had LED strategies;
Emakhazeni had not reviewed its LED strategy since its development in 2006;
All the municipalities are implementing their LED strategies except for Umjindi and Emakhazeni due to budgetary constraints;
Three municipalities did not have LED forums namely: Umjindi, Msukaligwa and Dr. JS Moroka.

41. MUNICIPAL KEY PERFORMANCE AREAS: LOCAL ECONOMIC DEVELOPMENT
Analysis of LED and EPWP
18 out 21 municipalities had SMME support programs;
There was a decrease in the number of jobs created from in 2013/14 to in 2014/15 financial year;
The number of women participating in job creation initiatives has increased by 1% between 2013/14 and 2014/15 financial years.

42. MUNICIPAL KEY PERFORMANCE AREAS: FINANCIAL MANAGEMENT AND VIABILITY
Detailed analysis of the audit outcomes
6 municipalities improved from qualified to unqualified opinion namely Chief Albert Luthuli, Dr Pixaley ka Isaka Seme; Nkomazi, Mkhondo, Umjindi and Gert Sibande;
1 municipality (Steve Thswete) regressed from clean audit to unqualified audit opinion;
Nkangala DM improved from unqualified opinion to clean audit;

43. MUNICIPAL KEY PERFORMANCE AREAS: FINANCIAL MANAGEMENT AND VIABILITY
Detailed analysis of the audit outcomes (Cont…)
4 municipalities retained the disclaimer, namely Emakhazeni, Emalahleni, Msukaligwa and Thaba Chweu;
Ehlanzeni DM maintained the clean audit opinion;
4 municipalities retained their unqualified opinion namely Dipaleseng, Govan Mbeki, Lekwa and Mbombela;
4 Municipalities namely Bushbuckridge, Victor Khanye, Thembisile Hani, and Dr JS Moroka retained their qualified opinion.
In 2014/15 financial year 19 out 21(90%) municipalities were with findings and only 2 were without findings

44. MUNICIPAL KEY PERFORMANCE AREAS: FINANCIAL MANAGEMENT AND VIABILITY
Annual Financial Statements
All 21 municipalities submitted their unaudited 2014/ 14 Annual Report together with Annual Financial statements by the statutory deadline of 31 August 2015 to the Auditor General;
7 out of 21 municipalities used consultants in the preparation of Annual Financial statements;

45. MUNICIPAL KEY PERFORMANCE AREAS: FINANCIAL MANAGEMENT AND VIABILITY
Provincial Analysis
Poor spending of capital budget with regard to municipal capital budget spending;
Utilisation of grant funding for operational expenditure due to cash flow challenges;
The overall cumulative revenue generated by municipalities within the province as at June 2015 amounted to R ;
In 2014/15 municipalities in the province were able to spend 91% of the total R1,7 billion allocated for MIG;
6 Municipalities managed to spend 100% of their MIG allocation namely Umjindi, Emakhazeni, Thembisile Hani, Chief Albert Luthuli, Dr Pixley ka Isaka Seme and Mkhondo

46. MUNICIPAL KEY PERFORMANCE AREAS: PUBLIC PARTICIPATION
Functionality of Ward Committees
In the 2014/15 financial year, 304 out of 400 ward committees were functional;
96 Ward Committees were non-functional;
350 wards had CDW’s

47. MUNICIPAL KEY PERFORMANCE AREAS: ADMINISTRATIVE AND INSTITUTIONAL CAPACITY
Analysis on the vacancy rate in senior management posts
The vacancy rate for senior management posts in municipalities was at 17% in 2014/15 financial year;
The following posts were vacant: Municipal Manager posts in the following municipalities: Victor Khanye, Emalahleni, Steve Thswete, Thembisile Hani, Emakhazeni, Thaba Chweu and Mkhondo;
3 CFO posts were vacant in Emalahleni, Nkomazi and Msukaligwa municipalities

48. MUNICIPAL KEY PERFORMANCE AREAS: ADMINISTRATIVE AND INSTITUTIONAL CAPACITY
Analysis on the vacancy rate in senior management posts (Cont…)
5 Technical Services Director posts were vacant at Nkomazi, Gert Sibande District, Thaba Chweu, Dr JS Moroka and Umjindi municipalities;
2 Corporate Services Director posts were vacant at Steve Thswete and Dr JS Moroka municipalities;

49. MUNICIPAL KEY PERFORMANCE AREAS: ADMINISTRATIVE AND INSTITUTIONAL CAPACITY
Analysis on the vacancy rate in senior management posts (Cont…)
2 Community Services Director posts were vacant at
Dr JS Moroka LM and Nkangala DM
1 Environmental Waste Management Services Director post was vacant in Emalahleni LM;
1 General Manager Human Settlements post was vacant at Gert Sibande District Municipality.
There was a decline in the appointment of female Section 56 /57 managers in the 2014/15 financial year with only 25 appointments as compared to 26 appointments in the previous financial year.

50. MUNICIPAL KEY PERFORMANCE AREAS: ADMINISTRATIVE AND INSTITUTIONAL CAPACITY
Analysis on the vacancy rate in senior management posts (Cont…)
19municipalities in the province had PMS Frameworks except for Emakhazeni and Dipaleseng which did not review their Frameworks;
All Section 57 managers signed performance contracts;

51. MUNICIPAL KEY PERFORMANCE AREAS: ADMINISTRATIVE AND INSTITUTIONAL CAPACITY
Analysis on the vacancy rate in senior management posts (Cont…)
There has been a slight improvement in cascading PMS to officials below S56/57 in the province:
- In the 2014/15 financial year Ehlanzeni District Municipality and Bushbuckridge Local Municipality were the only two municipalities cascading PMS to officials lower than S56/57
- In the 2013/14 financial year only Bushbuckridge
was cascading PMS to officials below S56/57.

52. RECOMMENDATIONS
1. That the Portfolio Committee takes notes of the presentation;
That the Portfolio Committee notes the following recommendations on the KPA’s:
2.1.KPA 1: Institutional Development and transformation
That municipalities to advertise posts immediately when a need arises;
Municipalities to review their recruitment and retention strategies;
The Department to support and monitor municipalities to review their PMS frameworks and cascade it to lower levels;

53. RECOMMENDATIONS(Cont…)
2.2.KPA 2: Service Delivery and Infrastructure development
The Department will continue to support and monitor municipalities to plan their MIG projects and ensure that this budget is spent accordingly;
The Department and Provincial Treasury to continue to monitor municipalities to honour their obligations to Eskom;
2.3.KPA 3: Local Economic Development:
That the Department and the district municipalities to support municipalities in the establishment of LED forums and appointment of suitably qualified personnel;
That the Department to support municipalities to review their LED strategies;

54. RECOMMENDATIONS (Cont…)
2.4.KPA 4: Municipal Financial Viability and Management
The Department and Provincial Treasury to continue to support municipalities in financial planning and project management;
The Department to speed up the rolling out of generic by-laws for revenue collection;
That Provincial Treasury co-ordinates arrangements for sector departments and municipalities for payment of historical debts;
CoGTA and Provincial Treasury to develop audit action plans for municipalities. These plans are monitored on a monthly basis;

55. RECOMMENDATIONS (Cont…)
2.5.KPA 5: Good Governance and Public Participation
The Department to provide support to ensure the functionality of all section 79 and 80 committees;
That the Department to provide support in the resuscitation of dysfunctional audit committees;
Department to support municipalities without functional ward committees; and
The Department to capacitate all MPACs to perform their functions effectively;

56. Thank You