28th November 2010
MEC Sicelo Gqobana
Dept of Local Government & Local Affairs
Private Bag X0035
BISHO 5605
Dear Sir,
Re: The Requested Interventions in Kouga.
Firstly I would like to thank you and your team for once again visiting Kouga and your attempts to help rectify the issues as highlighted in the reports submitted to you by the St Francis Ratepayers Association and by FEKRRA.
Sadly, you and your team experienced what Ratepayers and Residents experience on a regular basis namely that Officials and Councillors from Kouga either arrive at meetings very late or as often happens, they simply do not arrive. Even more distressing is when meetings are scheduled weeks ahead of time and then cancelled on the morning of the meeting by the Mayor or Officials. Ratepayers, Civics and Residents also have full schedules and when meetings are cancelled this causes tremendous disruptions.
Honorable MEC, Ratepayers however need to point out a number of shortcomings in the process to date. These shortcomings have resulted in many of the highlighted issues not being discussed, properly analyzed and thus not addressed. As such Province has yet to understand the magnitude of the problem we are facing and the likelihood that the Kouga Municipality will once again ignore the latest attempts to rectify the current critical shortcomings in its administration. Ignoring these issues will most certainly lead to conflict.
Firstly the proposed feedback meeting to Ratepayers and Residents scheduled for the 15th of November did not take place. At this meeting your team would have reported preliminary findings to Ratepayer Associations. Province and Ratepayers would then have been able to discuss the merits of the Municipality’s responses. This would have enabled all of us to formulate appropriate action plans and if need be, request feedback from the Municipality. As this did not happen, delegates to the latest meeting held on the 25th of November, went into the meeting unarmed to deal with specific issues or discuss the expected responses to the issues supplied by the Municipality.
Secondly Ratepayers and Provincial teams needed to be properly briefed as to the purpose of each meeting prior to these meetings taking place. This would have resulted in better focus and quicker formulation of solutions. For example what Ratepayer Associations expected to be a feedback meeting from Province on the 23rd of November turned out to be a meeting about Valuations. Fortunately we were able to cover a lot of ground and reach agreement.
Thirdly the most crucial observation regarding the process is that the feedback reports must be handed out prior to the meeting, so that delegates have time to analyze the findings. They would then have been able to focus on specific issues and make meaningful contributions during the meeting.
At the meeting of the 28th of October, eight key resolutions were tabled. Of these eight issues we appear to be heading towards resolution on three of them namely:
The valuations issue where a compromise has been agreed to, namely that a supplementary valuations role will be undertaken.
The Ward Committee issue, where it was confirmed that apart from one Ward, the other wards were not functioning correctly. This issue will however now receive attention.
The Limited access to the Oyster Bay beach. Progress also appears to be being made on this issue.
With regards to the SIU investigations, it was our understanding that this would be one of the matters discussed at the November feed-back. Now the SIU are only expected to table a report to the KM on December the 18th. At this time the report will be made available to the Ratepayers. This report would be discussed at the next Council meeting and the KM would “develop an attitude” with regards to the report. Ratepayers would then be able to respond to the KM. This report is of extreme importance as many instances of wrong doing need urgent attention.
Feedback with regards to the substance of the information gathered from the Kouga Municipality.
As promised, I am providing you with feedback with regards to the substance of the information gathered from the Kouga Municipality by your teams in response to Ratepayers concerns. It is here that Ratepayers have our greatest reservations. The “thick report” handed to me by the DDG (Deputy Director General) concerning the Auditor General’s Report was simply a Photostat of the sections that Ratepayers asked Province to look into. Here ratepayers would like answers to the numerous questions posed by the AG and would like to know how many of these problems have already been addressed. Sadly it appears that there is no understanding or analysis of the figures by those tasked to compile the information. Once again the hard questions are not being asked. For example none of the questions being asked by the AG are being followed up on. It appears that the KM has also not supplied Province with the answers. See AG report pages 1 to 21.
Mr. Gqobana with regards to this key resolution namely the Auditor Generals Investigation Report, here are examples of a list of obvious questions we would have expected Provincial Officials to ask on behalf of residents. Unless this type of question can be answered convincingly by the KM what confidence can ratepayers have that the KM is taking Province’s intervention seriously?
· Unauthorised expenditure amounted to R2 million during the 2008/2009 accounting period. What measures has KM already put in place so that this can not happen in future? Give examples.
· Fruitless and wasteful expenditure amounted to R24,8 million. In the current year it appears as if many of those issues have still not been addressed. How have they been addressed? Who will be held accountable? What has the Mayor, MM and the CFO committed to doing in order to address these issues? Ratepayers want answers.
· Irregular expenditure amounted to R37 million due to non-compliance with the MFMA and many supply chain management deviations. According to the press and recent disclosures these issues continue unabated. What is the actual state of affairs and who will be held accountable should there not be a marked improvement?
· Have the issues of the landfill sites been resolved and are the landfills being legally run at present? Is the Municipality liable for any fines?
· There were 22 cases of non-compliance with applicable legislation listed by the AG in his report. What steps have each of the Departments put in place to ensure compliance? What steps will be taken should those responsible not ensure that legislation is complied with? Who should be held accountable?
· In Matters of Governance a number of key governance responsibilities are listed by the AG. The KM did not comply with most of them. Have specific individuals been tasked with each of these responsibilities and if so which individuals?
· Many investigations were undertaken with regards to irregularities. What action has been taken in each of these investigations? If action has not taken place why not? If staff are still on suspension how come? What will be done in future to ensure that lengthy costly suspensions do not occur and that the process is speeded up?
· Overtime was highlighted as a problem. What measures have been put in place to curb overtime and how successful have they been?
· Has a separate performance audit committee been put in place? If so please show us the performance standards and how performance of staff members is currently being tracked.
· Have all the suspended officials highlighted in this report been dismissed or reemployed? If not why not and who is being held accountable for this loss of municipal funds?
Mr. Gqobana it appears that the Municipality was not asked to answer this type of question and as such ratepayers are no closer to feeling more comfortable that critical issues of governance are being addressed.
With regards to the findings of the official Audit Committee another set of questions arises that needs to be explained by the KM.
· Has the need for investigations into the KM decreased since the last damning report finding?
· Is the Audit Committee meeting on a regular basis?
· Is the Audit Committee now being presented with the reports and information that they request from the Municipality?
· Have the deficiencies in internal controls relating to risk management and compliance with applicable laws and regulations, as highlighted by the Audit Committee, been addressed?
· Have officials now significantly addressed the deficiencies addressed in the prior years audit findings?
· Are information systems now in place to adequately facilitate the preparation of financial statements?
With regards to HR issues Ratepayer Associations were informed that Mr. Dlulane was busy collating information on HR matters and the Department would respond when the report was finalized. As highlighted by ratepayers, the excess number of staff employed by the Municipality was of grave concern as this was a huge component of the cost structure in any organization. Unless these expenses were brought in line and Municipal staff was properly utilized, rates would continue to escalate to the point that ratepayers would not be able to afford their rates and taxes. This was something that was already beginning to happen due to the depressed economy. Ratepayers are eagerly awaiting this HR report and trust that it contains meaningful analysis.
The next key resolution was with regards to Disaster Management and Recovery Funds paid over to the KM. Were these funds paid out and utilized correctly?
Once again the information provided raises more questions than it does to supply ratepayers and residents of Kouga with answers. Once again it appears as if the proper analysis has not been done and as yet the Municipality has not provided Province or residents with answers.
Please take note of the following very serious flaws:
· The amounts spent with various contractors were far in excess of what was budgeted for the jobs. It appears as if contractors like Amaboko, Prodical Son and the Municipality were allocated funds in excess of what was stipulated in the budgets. For example Amaboko was budgeted to receive R1, 689, 255 of work but was paid R2, 469, 647 while Prodical Son was budgeted to receive R300, 145 but was paid R 992, 722. How is this possible? What makes these figures even more unbelievable and proves that no analysis has been done on them is that in the so called proof of payment supporting documents lists entirely different payouts for Amaboko namely
R1, 910, 244 and an even more out of line payment to Prodical Son of R 1, 598, 585!!
· Certain Geographical areas were neglected and did not get their correct allocation of funds despite the submissions made by Ratepayer Associations in conjunction with Bigen Africa in order to justify the allocation of these funds. These funds were however diverted to the above mentioned contractors far in excess of the value of the jobs done. Surely this should have spotted if a proper analysis was done? For example the greater St Francis area was budgeted to receive R3, 790, 000 but was only allocated R1, 838, 202! Note that if for any reason these funds were not allocated to the St Francis Bay area then they should have been returned to Province, not simply spent in other areas without the proper motivation to Province. For the record dangerous life threatening drainage problems have not been addressed in the greater St Francis Bay area and we would like it placed on record that Province and the Municipality should intervene or be held liable in the event of future storm damage or loss of life in this area. In the report the St Francis Bay area is highlighted as a “hotspot” due to the fact that it has been built on a fine grade of soil susceptible to erosion and that the storm water management system needs to be upgraded to ensure that weakened foundations and possible structure failure is prevented. This has not been done.
The next key resolution was that pertaining to the Declaration of dispute against the Kouga Municipality. It was agreed that Residents in St Francis Bay would not withhold rates until Province and the Kouga Municipality had time to display that the highlighted matters discussed and submitted by Ratepayers and Residents were being addressed. As per the above it can seen that ratepayers and residents need far greater assurance that the KM is taking the matter seriously. Attached you will find a copy of the latest report on the Kouga Municipality that appeared in our local News Paper. It appears as if the KM is insolvent even before ratepayers have started withholding rates. Surely it would be unwise for ratepayers to continue to paying into a “bottomless pit” without Ratepayer Associations receiving the assurance from Province and the KM that their finances were being properly controlled? Until ratepayers feel sure that some meaningful progress has been made on all the issues we uphold our right to take whatever action we feel is appropriate.
The next key resolution was Ratepayers participation in the IDP and Budgeting process. It was decided that the meeting of the 2nd of December with the District Municipality was possibly not the correct forum for ratepayers to participate in. Ratepayers would be informed as to when and how they would be allowed to participate in these activities during the next year.
Finally it is with concern that Ratepayers and Residents of Kouga have learnt of your move to the Department of Health. Moves like this disrupt momentum and aggravate the already very trying situation within the Eastern Cape. We wish you well in your future assignment and hope that the DDG and your successor places emphasis on the above matters which as we all know, have reached critical proportions.
It would be appreciated if the Deputy Director General (DDG) Mr. Mzimasi Mangcotywa could keep us all informed as to the progress being made and provide us with the SIU report as soon as it is made available to the KM. As agreed the DDG will be custodian of this intervention and inform the new MEC as to the status of this intervention.
Thanking you.
Joe Oosthuizen.
Chairman of the St Francis Bay Residents Association and FEKRRA.
