Tshwane’s embarrassing financial affairs require immediate resolution

22 July 2023

The Select Committee on Cooperative Governance and Traditional Affairs, Water and Sanitation and Human Settlements is of the view that the lack of financial management within the City of Tshwane requires urgent action to resolve. While the committee noted the City’s plans to improve its dire financial position, the committee emphasised the necessity of effective implementation. However, the risk to achieving this are the lack of capacity and skills, especially in strategic roles within the city, the committee said.
 
The committee concluded its week-long oversight to municipalities in Gauteng and called for a paradigm shift within the local sphere of government if challenges facing the sector are to be overcome. “We must be frank that the main challenge within the local sphere of government is the lack of appetite to implement effective consequence management, which then encourages a self-seeking culture of corruption and undermining of service delivery,” said Mr China Dodovu, the Chairperson of the committee.
 
The committee is also worried that the municipality is struggling to fill critical vacant positions, including the chief financial officer, which will be essential in implementing its plans. While the City assured the committee that recruitment is at an advanced stage, the committee said speed is required to finalise appointments and fill vacancies with competent staff. The committee welcomed the commitment from the City that recommendations of candidates to council might be made by August 2023.
 
The committee underlined its concerns with the lack of tangible progress in implementing the audit action plan, which is necessary to address the negative areas of the audit. The committee called for the City to enhance the capacity of the teams delegated to implement the audit action plan to ensure visible progress. The committee also called for the strengthening of the general financial management disciplines and effective systems of internal controls within the City, and this is dependent on the city urgently appointing skilled Section 56 managers.
 
The engagement with critical stakeholders within the city, including business, households, and government, is according to the committee, negatively impacted by the City’s failure to establish ward committees. The committee highlighted that the cashflow challenges faced by the City can be resolved if residents pay for services. Effective communications anchored on effective ward committees is a necessary tool towards attainment of this goal.
 
The committee is also concerned about the low investment in infrastructure maintenance, which increases the risk of poor service delivery and losses. The city spends 2% of its budget on maintenance against the national norm of 8%. This is concerning in the context of the huge water and electricity losses, which could be remedied by maintained bulk infrastructure that will ensure that residents receive reliable water, roads and electricity. 
 
Meanwhile, the committee highlighted its support for programmes aimed at enforcing compliance and payment of services. The support is based on the understanding that for the municipality to continue to deliver services it requires improved cash-flow, which is currently affected by non-payment from households, businesses and government departments.      
 
The committee was also concerned about the overreliance on consultants and called for enhanced internal capacity to save money. While the committee acknowledge that in some instances consultants are necessary, it cautioned against abuse.
 
Meanwhile, the committee reiterated its call for a credible framework to guide the operation of coalition governments, which it believes is necessary to ameliorate the current political instability and ensure that municipalities serve the people and are not abused for short-term political gain.

Issued by Malatswa Molepo, Media Officer, Parliamentary Communication Services, 22 July 2023