Parliament’s public accounts watchdog is considering an inquiry into systemic failures in local government after finding serious governance, revenue, and infrastructure problems across seven municipalities, including five metros.
Having heard from seven municipalities – five metros and two district municipalities over the past few months, MPs who serve on the Standing Committee on Public Accounts (Scopa) concluded on Wednesday that a deep dive was needed to further the probe into governance malaise in the sphere.
The committee, which conducted a similar inquiry into the Road Accident Fund (RAF), is yet to decide the details of the proposed inquiry.
“We will end up with a local government inquiry into a metro and a local municipality or a district municipality. It will be sort of an enhanced oversight in the way that we did with the RAF. We will do that, but it's a matter of which one (municipality) and when we start with that,” said Scopa Chair Songezo Zibi.
Zibi said inquiries help to surface some of the systemic problems and are useful for a broader policy discussion about local government and broader parliamentary interventions.
According to Zibi, Scopa was likely to look at municipalities the committee has already met to decide which one or two would be the focus of the inquiry.
Between May and June, the committee met five metros – Johannesburg, Tshwane, Ekurhuleni, Mangaung, and eThekwini - and Msunduzi and Masilonyana local municipalities.
“There are steps to get there. The minister and MECs have to appear, and we can deal with their interventions because the information we will get from them will then inform the terms of reference of that enhanced oversight that we will do.”
Scopa also wants intensified oversight on municipalities, which would entail ongoing monitoring of municipalities by the committee.
The committee also wants Cooperative Governance and Traditional Affairs (CoGTA) Minister Velenkosini Hlabisa and the nine CoGTA MECs who are legally empowered to intervene in municipalities to account to the committee about their interventions.
In its interactions with the five metros, Scopa found that all the municipalities had serious revenue problems - on the revenue collection side and in terms of consumer affordability. They also experience electricity and water losses because of poor maintenance and cable theft.
The municipalities also have no effective management and governance of their entities, especially the City of Johannesburg, with all its entities having serious governance and performance issues.
Scopa also found that infrastructure maintenance was way below the national guideline of between 8 and 10% of the budget, with nearly all the investigated municipalities spending below 5% on maintenance.
In Ekurhuleni, for instance, MPs noted that several critical systems within the city’s ICT environment were vulnerable to unauthorised access and manipulation, exposing the municipality to significant financial and operational risks.
These included the billing and revenue management systems, where customer accounts could be altered and debt balances reduced or removed; the electricity revenue system, which was linked to substantial under-collection of revenue through the manipulation of electricity accounts; the water revenue system, where account information was similarly compromised; the rates clearance system, where records associated with property transactions were unlawfully altered or removed; and the traffic fine management system, which became ineffective following the discontinuation of a functioning platform without a suitable replacement.
The committee said that weaknesses across these systems undermined the integrity of municipal records, contributed to significant revenue losses and highlighted serious deficiencies in IT controls, oversight and system security.
Among concerns regarding eThekwini, MPs highlighted “severe” procurement flaws and financial risk surrounding a flood disaster marquee hiring contract with a service provider, in which the municipality entered into “an unsustainable agreement at an exorbitant rate of R208 000 per day”.
Following the municipality's termination of the contract on grounds of unaffordability, the service provider instituted a R70 million legal claim, which ultimately required a court intervention to enforce payment based on reasonable market benchmarks rather than the inflated contractual rate.
Scopa and the CoGTA Portfolio Committee found that this matter demonstrated “a complete failure” in price benchmarking, supply chain management and contract oversight during emergency disaster response, exposing the municipality to unnecessary litigation and substantial financial exposure.
andisiwe.makinana@nationalmg.co.za