State of Local Government 
in South Africa 
Overview Report  
 
National State of Local Government 
Assessments 
 
 
 
Working Documents  
COGTA 2009 
 
  
 
CONTENTS

1. Introduction 3

2. Governance 7

3. Service Delivery & Infrastructure 34

4. Financial Management 54

5. Labour Matters 63

6. Conclusion 67

7. Turn-Around Strategy 67

ANNEXURES

A: COGTA Classification system for Local Municipalities 76

B: National Treasury: List of Municipalities in Financial Distress 87

2
1. INTRODUCTION

The basic premise of the report is that “Local Government is Everyone’s Business”.

Local government in South Africa has contributed to the achievement of a number of

significant social and economic development advances, since the ushering in of the new
democratic municipal dispensation in December 2000. The majority of our people have
increased access to a wide range of basic services and more opportunities have been
created for their participation in the economy.

Notwithstanding the valuable role that municipalities have played in our new democracy,
key elements of the local government system are showing signs of distress in 2009.
This report provides an analysis of the performance and state of local government and
begins to point to key matters that must be attended to in the Turn Around Strategy for
Local Government. Urgency, prioritisation, speed and timing will be important in
addressing the critical issues identified in this report.

The new administration has a clear electoral mandate to deliver on key priorities that
must ensure that visible, tangible and positive changes are felt in all our rural and urban
communities. These must focus, inter alia on, the Millennium Development Goals
(MDGs) and universal household access to basic services (uHABS1) by 2014.

With this in mind, the 2009 Government Programme of Action committed to build a
developmental state, improve public services and strengthen democratic institutions.
This is the point of departure for the priority of intervening, stabilising and supporting
local government in order for it to fulfil its core mandates.

This State of Local Government Report derives from the consolidated national report of
the nine provincial reports, compiled following assessments jointly conducted across the
country between April and August 2009. The assessment process and the consolidated
National Report is the initiative of the Minister for Cooperative Governance and
Traditional Affairs (COGTA), Mr Sicelo Shiceka. The assessments were designed to
ascertain the root causes of the current state of distress in many of the county’s
municipalities in order to inform a National Turn-Around Strategy for Local Government.

In the process of determining the baseline for this assessment, the Minister for
Cooperative Governance and Traditional Affairs analysed previous assessments and
reviews of the state of local government as well as the evidence as to the degree of
process attained. These assessments include in recent years, the 10 and 15 Year

1
COGTA has developed a uHABS Index to define, measure and track progress on universal access.

3
Reviews (The Presidency), The 1995 Local Government Review (dplg), and the current
Policy Review of Provincial and Local Government (COGTA).

The Minister also reviewed the support programmes that have been put in place in
recent years. Two key support initiatives included Project Consolidate (PC), and the 5
Year Strategic Agenda (LGSA). Both these initiatives have yielded some progress, first
in upping the levels of hands-on support provided to local government, and secondly in
creating a systemic mechanism and framework (the 5 KPAs) for local government to
work within and report on. These interventions have however not been able to
sufficiently address deep rooted problems and capacity challenges.

There have been a number of other government initiatives and programmes to advance
service delivery and institutional support. These include the former Planning and
Implementation Management Support (PIMS) Centres, the ISRDP and URP nodal
programmes, the IDP analysis and training weeks, the Bucket Eradication programme,
Siyenza Manje, the Ilima project (Old Mutual), and the donor supported Consolidated
Municipal Transformation Programme (CMTP). A Policy Review on Provincial and
Local Government was also undertaken by the dplg. Numerous other smaller
programmes and projects have also taken place, largely in the local sphere of
government.

Whilst all of the support programmes have assisted in specific ways, it is still clear that a
number of stubborn service delivery and governance problems have been identified in
municipalities over a number of years. These remain consistently at the forefront of
government’s developmental challenges. These priority areas include:

• Huge service delivery and backlog challenges, e.g. housing, water and
sanitation;
• Poor communication and accountability relationships with communities;
• Problems with the political administrative interface;
• Corruption and fraud;
• Poor financial management, e.g. negative audit opinions;
• Number of (violent) service delivery protests;
• Weak civil society formations;
• Intra - and inter-political party issues negatively affecting governance and
delivery; and
• Insufficient municipal capacity due to lack of scarce skills.

From evidence to date, it is clear that much of local government is indeed in distress,
and that this state of affairs has become deeply-rooted within our system of

4
governance. Therefore underpinning the analysis are some key questions, such as how
deep-rooted is the state of distress in our local municipalities, what are the causes, and
through what measures do we address these fault-lines in our governance
arrangements?

It is also evident that national government has allocated hugely significant sums of
money to building municipal capacity over the years. In seeking to answer the question
why outcomes have been so disappointing, it is clear government needs to begin to do
things differently. In assessing the reality of poor municipal performance, cognisance
needs to be taken of the unresolved problems identified in previous assessments, and
the intergovernmental impact of this failure, both institutionally and for communities.

It is important to note that whilst the main focus of this report is on the problem areas in
local government, this is meant in no way to detract from the sterling work being
undertaken by many of our municipalities across the country. Many of the councillors
and officials in these municipalities are working under difficult conditions and yet
continue to inspire with their vision, leadership and commitment to do well under highly
challenging environments.

All nine provinces went through the assessment process, bringing provincial and
national officials together, and some politicians, to penetrate and examine the fault lines
in the working of local government. The foundation for the assessments was simple: is
the municipality delivering on the desired outcomes, and is it operating on a sustainable
basis?

So in summary the central question that this report poses is, “What is the state of
local government in 2009 and what must be done to restore the confidence of our
people in this sphere of government by 2011 and beyond ?”

This Report does not only summarise the detailed findings from the provincial reports at
a high level, but more importantly contextualises them within an assessment of the
baselines for functionality and sustainability. The starting point is to identify the
mismatch between intent and practice and to assess how far we have met the
constitutional objectives for local government.

In so doing, we have begun to reassess which governance and service delivery

standards constitute a functional municipality, and to what degree does the state need
to re-shape and rationalise its resources to support the intent of developmental local
government.

5
In broad terms a functional municipality is one that is actively striving to meet the
outcomes as specified in the White Paper on Developmental Local Government (1998).
In 2009 and beyond, there is a need to ensure that municipalities are responsive,
efficient, effective and value for money is realised with the allocated public resources.

A Turn-Around Strategy for Local Government is thus needed that will be driven by an
intergovernmental and social compact agenda for change. Our maxim must be that by
working together, we can turn the tide on local government to create a better life for all.

Acknowledgements

COGTA would like to thank all the government officials from all three spheres of
government who participated in the assessment process over the last six months. Their
commitment and hard work is acknowledged and appreciated. We would also like to
thank our many stakeholders, associates and partners in this process, who have shared
knowledge and information, offered insights and wisdom, and who have pledged their
support going forward.

6
2. GOVERNANCE

2.1 Introduction

The Constitutional objectives for local government are set out in Section 152 of the
Constitution: these are

• to provide democratic and accountable government of local communities

• to ensure the provision of services to communities in a sustainable manner
• to promote social and economic development
• to promote a safe and healthy environment, and
• to encourage the involvement of communities and community organisation in the
matters of local government

These objectives have been in practice for nine years, every part of the country now
falls under the jurisdiction of a municipality, with many communities experiencing local
and democratic government for the first time within the last decade.

A central challenge for the many new institutions of local government has been their
viability and ability to build strong organisations capable of delivering on the principles of
Section 53 of the constitution which states that:

..’ a municipality must structure and manage its administration and budgeting and
planning processes to give priority to the basic needs of the community, and to promote
the social and economic development of the community, and participate in national and
provincial development programmes’.

‘If a municipality can achieve the above objectives consistently, within its financial and
administrative capacity, it could be described as a functional, well-performing
municipality’2.

South Africa has 283 municipalities, based on three Constitutional categories:

• Metropolitan municipalities: six (6);
• District Municipalities: forty six (46); and
• Local Municipalities: two hundred and thirty one (231).

However the distinct differences in capacities and institutional context within the 283
municipalities means they have not all been able to pass through the phases of

2
National Treasury, presentation to TCF 2009

7
establishment, consolidation and sustainability at the same rate or within an even
playing field. All municipalities are categorised in recognition of a degree of difference –
but how difference is understood – with its fiscal, spatial, functional and governance
implications, is only now emerging as unique challenge within the efficiency of the state.

A random sample of some of the best-performing municipalities in the country and why
they are credited thus, gives an indication of the direction the ideal, sustainable
municipality would take. The success of some of these municipalities may be leveraged
going forward. Knowledge-based engagements can assist in the establishment of
possible support mechanisms for weaker municipalities.

Table: Examples of municipalities moving in sustainability mode

Municipality Area of performance Reasons

Gamagarra Service delivery Backlogs eradicated
(Northern Cape) Strong economic centre

Overstrand Financial viability Good credit rating

(Western Cape) Outstanding collection rates
Good CAPEX budget spend

Thabazimbi Local economic development Strong economic sectors

(Limpopo) Good engagement with business
sector

Cape Winelands DM Planning facilitation Facilitate economic growth in district

Excellent approach to PMS, IDP
Innovation to district IGR

West Rand DM Good governance Focusing on development facilitation

(Gauteng)

2.2 Policy context

The Constitution, the White Paper on Local Government and the legislative framework
for local government provide municipalities with a structure to manage their
administration. It also outlines political decision making systems, and defines principles
for structuring administrations.

The current policy and legislative requirements affecting local governance are primarily
contained in the Constitution, the Local Government White Paper, the Local
Government Municipal Demarcation Act, the Local Government Municipal Structures

8
Act, the Local Government Municipal Systems Act, the Disaster Management Act, the
Local Government Municipal Finance Management Act and the Local Government
Municipal Property Rates Act. The amounts for Intergovernmental fiscal transfers are
published yearly in the Division of Revenue Act.

The organisational structuring of local government is explicitly prescribed in the

Municipal Systems Act and specifically in Section 51 which provides that “A municipality
must, within its administrative and financial capacity, establish and organise its
administration in a manner that would enable the municipality to:-

a) be responsive to the needs of the local community;

b) facilitate a culture of public service and accountability amongst its staff;
c) be performance orientated and focussed on the objectives of local government
set out in section 152 of the Constitution and its developmental duties as
required by section 153 of the Constitution;
d) ensure that its political structures, political office bearers and managers and other
staff members align their roles and responsibilities with the priorities and
objectives set out in the municipality’s integrated development plan;
e) establish clear relationships, and facilitate co-operation, co-ordination and
communication, between –
i. its political structures, political office bearers and its administration
ii. its political structures, political office bearers and administration and the
local community
f) organise its political structures, political office bearers and administration in a
flexible way in order to respond to changing priorities and circumstances;
g) perform its functions-
i. through operationally effective and appropriate administrative units and
mechanisms, including departments and other functional or business
units; and
ii. when necessary, on a decentralised basis;
h) assign clear responsibilities for the management and co-ordination of these
administrative units and mechanisms; and
i) hold the municipal manager accountable for the overall performance of the
administration.”

It is primarily against these and the Constitutional prescripts that the effectiveness of
municipal performance may be assessed. The ideal functional municipality can thus be
measured against these indicators outlined above.

9
2.3 Governance challenges

The effective functioning of a municipality begins with its political leadership. In respect
to governance the overarching question during the assessment process centred on the
effectiveness, capability and integrity of the local political council leadership. Key
symptomatic type questions looked at the nature and extent of maladministration and
corruption and how deeply has these have been contributory factors to the negative
performance of administrations and councils. A related question was to what extent
have national government’s over-reaching and universal expectations on local
government – as reflected in the proliferation of new and under-resourced mandates
and functions - contributed to governance failures? Will there be merit in going back
to basics and revising expectations according to location, performance and capacity?

Provincial assessments exposed that causal reasons for distress in municipal

governance pointed to:
a) tensions between the political and administrative interface;
b) poor ability of many councillors to deal with the demands of local government;
c) insufficient separation of powers between political parties and municipal councils;
d) lack of clear separation between the legislative and executive;
e)
f) inadequate accountability measures and support systems and resources for local
democracy; and
g) poor compliance with the legislative and regulatory frameworks for municipalities.

2.4 Current practice

Assessments revealed that party political factionalism and polarization of interests over
the last few years, and the subsequent creation of new political alliances and elites,
have indeed contributed to the progressive deterioration of municipal functionality.
Evidence has been collected to dramatically illustrate how the political / administrative
interface has resulted in factionalism on a scale that, in some areas, it is akin to a battle
over access to state resources rather than any ideological or policy differences. The
lack of values, principles or ethics in these cases indicates that there are officials and
public representatives for whom public service is not a concern, but accruing wealth at
the expense of poor communities is their priority.

Relationships at the local level are tainted by these contestations amongst the elites of
local areas. The democratisation of the local sphere so well-envisioned in the White
Paper on Local Government, of 1998, is now fraught with community frustration over

10
poor institutionalisation of systems, poor service delivery and poor political governance.
A culture of patronage and nepotism is now so widespread in many municipalities that
the formal municipal accountability system is ineffective and inaccessible to many
citizens.

Other social institutions including the media and civil society have also been ineffective
in increasing municipal accountability and oversight. There is now a lack of citizen
confidence and trust in the system. This has been publicly evidenced in the spate of
community protests during the course of the year, which may be seen as a symptom of
the alienation of citizens from local government.
The pie chart below illustrates the provincial spread of the community protests:

The figure below illustrates the trends in protests over the last six years, clearly
signifying the escalating loss of confidence in governance as expressed during 2009.

11
Municipal IQ has pointed out that it is not easy to predict the likelihood of the occurrence
of protests, given that protests do not necessarily take place in the poorest
municipalities in South Africa. Protests do not necessarily occur in municipalities or
wards with the worst service delivery backlogs. Population growth and urbanisation are
key determinants from which a link with protests can be made. Housing administration
and management are also some of the key concerns of residents, followed by the cost
of services.

Moreover, councillors have been accused of being arrogant and insensitive to the needs
of the community. Lack of effective complaints management and no coherent systems
in place to measure service delivery or the quality of client interface are some of the
political reasons underlying protest action.

2.5 Local democracy: Ward Committees, CDWs and Traditional Leaders

The White Paper on Local Government announced a new vision for local democratic
government, known as developmental local government. This means ‘local government
committed to working with citizens and groups within the community to find sustainable
ways to meet their social, economic and material needs and improve the quality of their
lives3.

3
The White Paper on Local Government 1998

12
Representative government is complemented by the right of communities to participate
in the decisions that affect development in their areas, and a corresponding duty on
municipalities to encourage community participation in matters of local governance.
National legislation provides the mechanisms for public participation, which include
ward committees and a variety of other measures designed to foster open, transparent
and consultative municipal government.

There are 3895 wards demarcated wall-to-wall within the six metropolitan and 231 local
municipalities of South Africa. The number of wards per municipality ranges from as few
as 10 wards in the smaller municipalities to as many as 109 wards in the larger
municipalities such as Johannesburg.

These wards form the basic units for participatory and democratic local government.
Ward committees are established for each ward in all provinces except the Western
Cape. Ward councillors chair these committees and ought to rely on them for support in
ensuring that the issues and needs of residents are well represented in the municipal
councils.

Each ward committee consists of the elected ward councillor and 10 additional
members nominated from the community. This makes a large base of people, more
than 40 000, to promote community representation and participation.

However, the functionality and effectiveness of the ward committees is a matter of

serious concern. The table below reflects the number of Ward Committees which have
been established in each of the Provinces.

The establishment and the term of office of Ward Committees are determined by each
municipality through a council resolution and therefore differ from municipality to
municipality, although the Minister has now issued new regulations to align the term of
office of ward committees with the electoral term of councils.

13
Table: establishment of Ward Committees per province

Province Population No. of Metros No. of LMs No. of Wards No. of Wards
Established
Eastern Cape 6 527 747 1 38 636 636
Free State - 20 300 300
2 773 059

Gauteng 3 8 423 423

10 451 713

KwaZulu-Natal 1 50 771 771

10 259 230

Limpopo - 25 513 513

5 238 286

Mpumalanga - 18 365 365

3 643 435

Northern Cape - 27 174 174

1 058 060

North West 3 271 948 - 21 365 365

Western Cape 1 24 348 243
5 278 585

Total 6 231 3 895 3790

48 502 063

The assessments provide evidence for the underlying problem that despite handbooks,
guidelines and training programmes the functionality remains a challenge. Recently
COGTA released the ward funding model and indicators for functionality to assist in this
regard.

The average numbers of people residing in each ward ranges from as few as 6 000 in
the case of Northern Cape Province to as many as 24 000 in Gauteng. Within each
province there are also variations per municipality.

The number of people per ward and the geographic size of the wards is a factor that
influences democratic representation and participation, as well as costs for the
operations and effective functioning.

14
Table: Provincial Breakdown of number of wards in the country

Province Population No. of No. of LMs No. of Average no. of

Metros Wards people per ward
Eastern Cape 6 527 747 1 38 636 10 263
Free State 2 773 059 - 20 300 9 243
Gauteng 10 451 713 3 8 423 24 708
KwaZulu-Natal 10 259 230 1 50 771 13 306
Limpopo 5 238 286 - 25 513 10 211
Mpumalanga 3 643 435 - 18 365 9 982
Northern Cape 1 058 060 - 27 174 6 080
North West 3 271 948 - 21 365 8 964
Western Cape 5 278 585 1 24 348 15 168
Total 48 502 063 6 231 3 895 12 452

The ward councillor also ought to serve as a link between the ward community and the
rest of government to the extent to which there is proper consultation with local
communities with respect to the planning and implementation of provincial and national
programmes impacting on the ward. However in practice sector departments hardly
ever consult or involve ward councillors in plans and projects.

Further, in the 5 year LGSA reports, Eastern Cape and Limpopo reported functionality
of all ward committees, in KwaZulu-Natal functionality it was reported at 85%,
Mpumalanga at 89%, North West at 70% and Western Cape at 94%. Northern Cape
stated 138 functional ward committees. Free State and Gauteng could not report on
functionality due to processes they reported were underway to actually ascertain
functionality4.

With respect to functionality, some assessments reports cited claims that many Ward
Councillors do not even attend Ward Committee meetings, and poorly resourced Ward
Committees are failing to comply with expectations.

Further, Ward Committee issues often do not find their way into, or are not prioritised in
Council meetings, and thus fail to become reflected in the Integrated Development
Plans of municipalities and project implementation for basic services can be non-
consultative, biased or ad-hoc.

The extent of the reported tensions between Ward Committees, Community

Development Workers (CDWs) and Councils also undermines functionality, and indeed
may indeed be one of the contributory factors in the escalation of community protests.

4
COGTA. 2009. Governance and Administration Cluster report: Progress with the Local Government Strategic
Agenda 2006-2011.

15
 The frequently unhappy relationship between CDWs and councillors is reflected in one
allegation that many act as if they are ‘a law unto themselves’. But the services they
provide have immense potential value to communities, and they also support the role of
the Thusong Centres as ‘one-stop’ shops for government services and as the face of
cooperative governance in communities. An example of potential value-add of the
CDWs is demonstrated below in the example of the Eastern Cape:

CLUSTER NATURE OF DEPARTMENTS NUMBER NUMBER OF COMMENTS

CASES INVOLVED OF CASES BENEFICIARIES

Social cluster 1. Deliver IDs 1.Home Affairs 40 600 1. The number of

2. Deliver food 2.Social 63 1800 people without IDs has
parcels Department 14 11 been lowered
3. The old to 3. SASSA 2. Many people have
access grant received food parcels
3. Of the 100%, only
5% did not get grant
Economic 1.Cooperatives .1 Economic 10 88 1.Number of
2.SMMEs 2.Economic affairs 5 100 cooperatives increased
3.Create jobs 3.Public Works 1 620 2.Number of SMMEs
have increased
2.Many people have
received food parcels

Justice 1.Create CPFs 1.Police 12 13 Wards 1.Crime is being

2.Educate tackled
people of their
rights
3.Facilitate
increased police
stations
Investment 1.Train people 1.Labour,Public 3 360 1.Many people were
2.About R30M works, Housing trained
donated to Departmental 17 500 000 2.Roads have been
municipalities 2.DPLG & built & renovated in all
Traditional Affairs municipalities

Government & 1.Facilitate 1.Municipalities 10 1000 1.R30 million was

Administration establishment of made available to the
PPU at MPP(DLGTA) 1 100 000(Great Kei needy municipalities
municipalities on infrastructural
arrangements
2.Generic policies
have been adopted by
10 Local municipalities
& two District
municipalities

16
As observed above, the community value of the work of the CDW is undermined by
other weaknesses in the governance system, such as inadequate communication
between councils and the communities they serve, plus contestation over resources and
‘tools-of-the trade’.

An additional area of local concern is that in those municipalities with traditional leaders
in their areas of jurisdiction, many have reported a poor working relationship between
themselves and the traditional leaders. The current areas of traditional authority control
account for approximately 20% of the country’s land area and 21% of its population, but
contribute only 3% to the formal economy. This suggests a serious under-utilisation of
developmental resources as well as posing questions as to the socio-economic
conditions, the demographics and the governance arrangements and of such areas.

Going forward, the capacity of traditional leaders must be more fully leveraged in
assisting municipalities in service delivery issues. Means are needed to ensure
traditional leaders are fully involved in service delivery and planning for their areas as
well as with the structures operating in local communities.

2.6 Weak national and provincial oversight of local government

Section 154 (1) of the Constitution requires both the National and the Provincial
Governments by legislation or other means to support and strengthen the capacity of
municipalities to manage their own affairs, to exercise their powers and to perform their
functions. Failure in this regard may result in the invocation by the national sphere of
government to the provincial sphere of section 100 of the Constitution.

Provincial supervision, monitoring and support of local government is a Constitutional

obligation in terms of sections 154 (1) and Section 155 (6) and (7) of the Constitution.
The provincial sphere can intervene in a municipality within its jurisdiction in terms of
section 139 of the Constitution. To give effect to these obligations, the departments for
local government were established with the specific mandate to oversee and support
municipalities. The principle for the application of sections 100 and 139 has always
been to invoke them as a last resort.

However, as increasing performance challenges built up within the local sphere over the
last decade, with over 30 municipalities having experienced an intervention, it became
apparent that these mechanisms were not well-supported by national government or
sufficiently institutionalised, due to the absence of post-intervention measurement of
improvement, and the weak application of intergovernmental checks and balances, i.e.

17
the oversight and review process by the Minister, the NCOP and the Provincial
Legislatures.

Recent examples of interventions are listed below. Most of these were conducted in
terms of section 139(1)(b)5, with administrators appointed for agreed time-frames within
the municipality.

Summary of interventions undertaken in terms of section 139 of the Constitution 2008/09

Name of Year of End of intervention Nature of Problem

municipality Intervention
North West
Ditsobotla May 2008 Still under intervention Governance, financial and
administrative dysfunctionality

Ngaka Modiri District 1 July 2009 District contesting the Governance, financial and
Municipality intervention in court administrative dysfunctionality

Free State
Mohokare June 2008 Still under intervention Governance and financial

Xhariep DM 9 June 2008 Still under Governance and financial

administration
Eastern Cape
Alfred Nzo DM April 2009 Still under intervention Governance, Financial and HR
management

Kou-Kamma LM April 2009 Still under intervention Governance, Financial and HR

management

Mnquma LM January 2009 Intervention terminated Dysfunctional council

by a court order in July
2009
Mpumalanga
Mbombela Feb 2008 August 2008 Governance and administration

Pixley ka Seme March 2009 Still under intervention Poor leadership and financial
controls

Kwazulu-Natal
Amajuba Dec 2007 Still under intervention Service delivery
Non-delivery of water services.
June 2008 Intervention
disapproved by the Party political proportional
Minister. representation
Umzinyathi Dec 2007 Still under intervention
Service delivery

5
S139 91) (b) states, ‘ the relevant provincial executive may intervene by taking appropriate steps to ensure
fulfillment of that obligation , and assume responsibility for the relevant obligation in that municipality..’

18
 Non-delivery of water services
Newcastle Dec 2007 Still under intervention Service delivery
Non-delivery of water services
Utrecht August 2007 Still under intervention Financial Administration
The most common failures that have triggered S139 provincial interventions fall into
three broad categories:

(1) Governance: political infighting, conflict between senior management and

councillors and human resource management issues.
(2) Financial: Inadequate revenue collection, ineffective financial systems, fraud,
misuse of municipal assets and funds.
(3) Service delivery: Breach of sections 152 and 153 of the Constitution which outline
service delivery obligations of municipalities.

The critical issue is how government can bring the necessary checks into the system
before a legislative intervention becomes a necessity. Integral to this would be
mechanisms for improved monitoring, an early-warning system and strengthened
means for intergovernmental oversight and support measures, particularly in the ‘after
care’ phase.

The problem areas cited as cause for intervention are symptomatic of problems within
municipalities across the country. The provincial assessment reports have provided
substantive evidence of various serious irregularities, corruption, fraud, financial
mismanagement and related wrong-doing. The capacity of national and provincial
government to effectively resolve these matters is weak and therefore significant
emphasis needs to be placed on this matter in the Turn-Around Strategy.

2.7 Governance and oversight: the role of the provincial Departments responsible
Local Government and the Offices of the Premiers

The provincial Departments responsible for Local Government and the Offices of the
Premier are the oversight, support and lead governance entities in provinces. Both
offices have previously been found to be under-resourced, poorly structured and
capacitated, and often lacking a core focus on their oversight and governance
mandates6. Systemic weaknesses and low capacity translate into poor responsiveness
and structural ability to act as a responsive sphere of government.

6
Capacity Assessment of the Provincial Departments of Local Government and Housing, dplg 2007

19
The table below illustrates the almost insignificant budget allocations to the departments
of local government (DLGs) in 2005/067. New research into the capacity of provincial
government, including the sector departments, is currently being undertaken, but is
unlikely to reveal substantive changes in the trend for the DLGs or the Offices of the
Premiers.

Table: Provincial budget allocations to local government programs 2005/6

Budget on Local
Province Government % of Provincial Budget
Programs (net of HES)
Eastern Cape 251,377,527 3.8%
Free State 55,418,000 1.9%
Gauteng 129,085,000 1.9%
Kwazulu/Natal 271,212,000 3.3%
Limpopo 310,194,000 3.7%
Mpumalanga 146,083,134 4.2%
North West 77,000,000 0.5%
Northern Cape 106,255,475 7.6%

Western Cape 97,230,000 2.1%

Total / Median 1,366,855,136 3.5%

It can be seen from the table that most local government departments were found to be
under-resourced, receiving only, on average, 3.5% of the provincial budget (excluding
Health, Education and Social Development).

Analysis of staffing structure showed that all DLGs are very ‘bottom heavy, and have a
very small proportion of top-level posts. Nationally, 61% of staff is at grade 6 or below,
while the top 5 grades together account for only 5% of posts. Limpopo and KZN are
exceptionally bottom heavy, with more than half of staff at grade 4 or below. This
demonstrates the prevalence of junior staff and the lack of senior skills and experience
within this key provincial department.

The wide-spread problem of sourcing high-level skilled personnel with the skills and
knowledge to be able to perform many of the core functions of the DLG was frequently
cited. Specific shortages were identified and included:
• Economic development specialists
• Project managers
7
Ibid

20
 • High-level management to oversee municipalities
• Engineering specialists
• Development planners
• Spatial planners
Similar trends were revealed in the study of the Offices of the Premiers (OTPs). The
table below shows the budget allocation for these leading governance structures in the
provinces.

Province OTP % of Operating Budget 2006/07

Eastern Cape 4.4

Free State 3.0
Gauteng 1.7
KwaZulu-Natal 3.1
Limpopo 5.6
Mpumulanga 3.1
Northern Cape 6.8
North West 4.4
Western Cape 6.4
National Mid Point 4.5

Whilst low budgets are a part of the problem, the capacity to spend on value-add
programming is still admitted to be weak in many cases.

A 2009 Assessment interview with one Office of the Premier further evidenced the
tendency for these offices to be undermined by an undefined leadership role, a lack of
sector accountability to their office, and altogether poor intergovernmental relations.

Lastly, the lack of a common vision and a coordinated approach between national and
provincial departments regarding supervision of the municipal system with no clear
approach to support and intervention is one of the critical factors in the state of distress
in municipalities.

2.8 Functionality of local government and spatial differentiation

The overall positive progress and success of the local government system in South
Africa is increasingly being overwhelmed by a range of factors and negative practices
both internal and external to municipalities. These factors apply to poor governance,
service delivery failures, their capacity and performance, but also to the unique
challenges experienced in the varying spatial locations of municipalities.

21
For example there are differing challenges in relation to rural and urban environments,
availability of human resource capacity, degree of economic activity and overall
institutional strength.

Some administrations are relatively stable and well-resourced, whilst others face huge
infrastructure backlogs, the negative impacts of demographic change and prevailing
apartheid-based socio-economic legacies.

During the establishment phase of local government (post- 2000), a system of

categorisation was introduced to more accurately understand the differentiated
challenges facing the 283 municipalities:

• A: Metros (6): Large urban complexes with populations over 1 million and
accounting for 56% of all municipal expenditure in the country
• B1: Local Municipalities with large budgets and containing secondary cities (31)
• B2: Local Municipalities with a large town as a core (137)
• B3: Local Municipalities with small towns, with relatively small population and
significant proportion of urban population but with no large town as a core. (31)
• B4: Local Municipalities which are mainly rural with communal tenure and with,
at most, one or two small towns in their area (32)
• C1: District Municipalities which are not water service authorities (25)
• C2: District Municipalities which are water service authorities (21)

Each of the municipalities in the different categories face fairly unique conditions and
challenges. The Metropolitan Municipalities, B1 Local Municipalities and to a certain
extent the B2 Local Municipalities are well established and consolidated. But they face
sustainability challenges due to urbanisation and in-migration that is accompanied with
high levels of household poverty. They also require more sophisticated urban
management capacity and skills to deal with spatial planning, land-use management
and infrastructure life-cycle management.

The B3 and B4 Local Municipalities are very vulnerable both from a revenue generation
and from institutional development perspective. They are located in economically
depressed areas and have difficulty in attracting and retaining skilled managers,
professionals, and technicians.

It follows that some of these municipalities are seriously challenged to fulfil their
obligations. They may be financially non-viable, articulate distress via heightened levels
of community protests, and be particularly vulnerable to political control and poor

22
institutional management and compliance. Many of these challenges relate to the
external environment: e.g.

• National policies that impact on local government

• The intergovernmental fiscal system for local government
• The legislative and governance framework for local government
• Monitoring and oversight of local government
• Capacity building policies
• Spatial legacies

Internal factors impacting on municipal poor-performance relate to:

• Sound political leadership

• Strong organisational capacity
• Good governance practices
• Relevant policies and programmes to be implemented
• Adequate staffing and systems
• Workable plans and budgets

The impact of the combination of these internal and external factors is reflected in the
varying external and internal findings provincially depicted below.

2.9 Spatial conditions: unemployment

The Community Survey of 2007 summarised the unemployment realities of South Africa
as follows:

• All metros and most districts have unemployment levels of between 26 - 50% of the
population
• Five of the six districts in the Eastern Cape, eight of ten in KwaZulu-Natal and two in
Limpopo have a percentage of unemployment higher than 50%
• Some districts in former homeland areas have 60%+ unemployment levels

23
 Map: Spatial location of high unemployment

Both Gauteng and the Eastern Cape (53%) are battling with high unemployment – one
a densely populated urban area with over a hundred informal settlements circling the
city of Johannesburg alone - the other with both cities and former homeland areas
within one boundary, signifying complex developmental policy challenges.

2.10 Contribution to the Gross Value Added (GVA)

The spatial data of the Municipal Demarcation Board and data of StatsSA show that the
bulk of South Africa’s productive economy is concentrated around a few major urban
areas. As the CSIR (2006) revealed just 20 municipalities in South Africa account for
82.8 per cent of total GVA to the national economy in 2004. Of these municipalities all of
them contain major metropolitan areas, secondary and port cities or large towns.

24
• Johannesburg contributes more than 15% to national GVA, Cape Town 12% and
eThekwini 10%; Tshwane and Ekurhuleni contribute 9.2% and 8.9% respectively;
• District municipal areas with large urban areas generally contribute more than 1% to
the total GVA; and
• Districts which are the lowest performers tend to be found in the desert and semi
desert areas and or in the municipalities which fall within the former homeland areas.

Map 2: Spatial location of Gross Value Added (GVA)

2.11 Socio-economic vulnerability

Poor district contributions to the national GVA indicates weak local economies, high
unemployment rates (pointing to high poverty levels and grant dependency) and
demonstrate socio economic vulnerability of a region:

• Four districts in the Eastern Cape, seven in KwaZulu-Natal, and two in Limpopo
have the highest levels of socio economic vulnerability;

25
• The districts containing Buffalo City and Richards Bay are ranked as having high
unemployment even with moderate GVA – an indicator of the need for focused
attention on leveraging of economic opportunity
• All metros have a high GVA and currently, moderate unemployment rates; but they
must now increasingly manage rising unemployment and poverty pockets in the
informal settlements and urban sprawl around cities requiring regulation and
services.

Map: Spatial location of socio-economic vulnerability (Cs ) - districts

Most districts in the Free State and Limpopo, three in the Eastern Cape, one in
KwaZulu-Natal, and one in Mpumalanga have (medium to) high institutional
vulnerability.

At the same time they are all authorised to deliver the water and sanitation functions.
This places great stress on these districts, exacerbated by high service delivery backlog
figures (e.g. Free State: 31,5% sanitation backlog; Limpopo: 47,6% sanitation backlog).

26
 Map: Spatial location of Institutional Vulnerability (Bs) - Locals

This map reinforces the location of the most highly vulnerable areas - those with highly
rural and apartheid-based legacies. That is, parts of Limpopo, KZN, Eastern Cape and
North West provinces.

27
The table below shows the provincial location of the 10 most vulnerable districts
(COGTA research 2008/09) in order of performance ranked 1-10.

1 KwaZulu-Natal Umzinyathi
2 Eastern Cape O.R.Tambo
3 Eastern Cape Alfred Nzo
4 Limpopo Greater Sekhukhune
5 Limpopo Vhembe
6 KwaZulu-Natal Zululand
7 KwaZulu-Natal Sisonke
8 KwaZulu-Natal Umkhanyakude
9 Eastern Cape Chris Hani
10 Mpumalanga Ehlanzeni

The table below depicts the provincial location of the top 20 poorest performing local
municipalities in order of performance ranked 1-20

Table showing Top 20 Most Vulnerable Local Municipalities in South Africa

(COGTA Research 2008/09)

1 Eastern Cape Mbhashe Local Municipality

2 KwaZulu-Natal Msinga Local Municipality

3 KwaZulu-Natal Umzumbe Local Municipality

4 KwaZulu-Natal Imbabazane Local Municipality

5 KwaZulu-Natal Maphumulo Local Municipality

6 KwaZulu-Natal Hlabisa Local Municipality

7 Eastern Cape Umzimvubu Local Municipality

8 KwaZulu-Natal Vulamehlo Local Municipality

9 KwaZulu-Natal Nkandla Local Municipality

10 KwaZulu-Natal Nongoma Local Municipality

11 KwaZulu-Natal Nquthu Local Municipality

12 KwaZulu-Natal Ndwedwe Local Municipality

13 Eastern Cape Mhlontlo Local Municipality

14 Eastern Cape Engcobo Local Municipality

28
 15 Eastern Cape Nyandeni Local Municipality

16 Eastern Cape Ntabankulu Local Municipality

17 Limpopo Fetakgomo Local Municipality

18 Eastern Cape Matatiele Local Municipality

19 KwaZulu-Natal Indaka Local Municipality

20 KwaZulu-Natal Ingwe Local Municipality

2.12 Spatial differentiation for governance and institutional arrangements

The differing municipal realities described above show the anomaly of enforcing a
governance framework that applies uniformly to cities, small towns and remote and rural
areas when in reality they are very different places with different needs and capacities.

The assignment framework (2007) for the assignment of powers and functions, and
many other governance arrangements, such as integrated development planning and
financial reporting, did not take into account the significant capacity and functional
capacities of the different municipalities.

This has led to the realisation that the ‘one-size-fits-all’ framework for functional
responsibilities is not based on differing municipal realities. The unintended
consequences for municipalities has in some instances, led to what may be defined as
levels of municipal non-viability, both financially and in respect to functional
performance, socio-economic vulnerability and ability to manage infrastructure
development and investment.

Spatial differentiation needs to be applied to which specific institutional and

administrative mechanisms are needed to address the needs of communities living in
remote areas with high backlogs, poor economic potential and high unemployment. The
application of policy, planning and the allocation of powers and functions between the
different spheres of government will have to take note of the vast differences between
municipal spaces across the country.

29
2.13. Functionality of local government and institutional performance

The ineffective management of many municipalities has been attributed to a

combination of factors - from the improper political and administrative interface to weak
institutional arrangements and poor supervision accountability mechanisms. The
Municipal systems Act provides for organisational performance management, and the 5
Year LGSA has been monitoring this compliance. Filling of vacant positions is also an
APEX priority and a government team is currently assessing and reporting progress on
this on a quarterly basis.

Whilst clear progress is being made, the difficulty is with sustaining this. In the absence
of rules or procedures for dismissals, suspensions and disciplinary cases, Councils can
proceed with such interventions outside of any framework of accountability.
Municipalities in both North West and the Northern Cape spend significant amounts of
their budgets on legal fees when such actions are carried out against officials.

During the assessments it was found that there were frequent cases of performance
management systems not established or complied with, and many municipal managers
with non-signed performance contracts. For example in Gauteng (as of June 2009) only
seven out of 13 municipal managers had signed performance agreements.

A total of 196 (78%) out of 250 municipal managers have signed performance
agreements as at June 2009 (A list of municipalities with vacancies is attached as
Annexure B). This represents an increase in the number of signed performance
agreements from 174 (72%) as at June 2008 to 196 (78%) as at June 2009.

300
283
250
250
196
200 174
Total apprvd posts
No. filled posts
150
Signed PA's (Jun 08)
100 Signed PA's (Jun 09)

50

Figure 3: Total signed performance agreements by municipal managers at national level

Failure to sign a performance agreement is a breach of contract and the employing

municipality may terminate the employment contract of a manager unless good cause
for non-compliance shown. In principle, the no performance agreement, no performance

30
bonus principle, should be applied. Many municipal managers and managers directly
accountable to municipal managers do not conclude their performance agreements
within stipulated timeframes as required by regulation 4 of the Municipal Performance
Regulations.

It is also a fact that many municipalities do not adhere to regulation 5 of the Municipal
Performance Regulations by submitting copies of signed performance agreements to
the MECs responsible for local government in the relevant province. This refers back to
the poor monitoring and oversight capability of provincial government.

2.14 Vacancies and competencies

There is an overall vacancy rate of 12% for senior managers in local government. It
should also be noted that the competency levels for these critical (middle and senior
municipal management) S56 and S57 positions posts are not regulated (e.g. technical
heads of infrastructure, CFOs). For instance, one team learned that a former tea lady
had become the CFO during one municipal assessment. The consequences of poor
council / management relations was demonstrated in one municipality where, citing ‘a
lack of confidence’ in the proficiency of the S57 managers, the council outsourced posts
to ‘mentor’ the CFO and the Municipal Manager. This may have been genuinely due to
poor capacity, or to personal agendas. This could not be done if tighter controls on
Human Resource Management systems at local level were in place.

2.15 Compliance and enforcement

Currently National Treasury and DWAE are formulating regulations to enforce

compliance with minimum standards for CFO and Water Infrastructure positions.
Another required element to the institutional and local public administration framework
for local government is compliance-based systems to strengthen accountability of the
administration to the Council, and of the Council to a third entity designed to manage
and oversee compliance. There must be consequences for non-compliance.

Another issue is that gender equity in senior positions is very poor. For example, in the
Western Cape, out of 30 MM posts, only one has been filled by a woman - in Bergrivier
LM. Nationwide only 9% of Municipal Managers are women. Unless there is
accountability to comply with gender equity, there will be evasion.

31
There are numerous incidents reported of irregular or un-procedural suspensions,
dismissals and similar. Conversely, there must also be procedural mechanisms to
remove those that need to be removed for non-performance or other irregularities, such
as those suspended in North West province. Currently, it is reported amongst others
that the municipal managers of eight Western Cape municipalities have been
suspended, three in Mpumalanga and two in Limpopo.

The regularity with which senior managers and Municipal Managers find themselves
suspended by Councils is an urgent issue to be addressed in respect to the separation
of powers in municipalities.

2.16 Scarce skills

It was widely pointed out during the assessments that effective professional
administration in municipalities is undermined by the difficulty of attracting qualified and
experienced technical and management professionals outside of the urban areas. The
seriousness of skills scarcity is deepened by the decline of municipal professional
associations and poor linkages between local government and the tertiary education
sector. This has contributed to the serious breakdown in the supply of municipal
professionals.

For example, in Limpopo, one of the poorest and most under-resourced of the
provinces, it was reported that in one local municipality, all the S57 posts are vacant
except for the CFO and the Director Community Services. These scenarios, repeated
broadly in the spatially vulnerable areas in particular have enormous impact on service
delivery as there may be no experienced senior managers in key posts for planning and
infrastructure, and financial management may be weak or exposed to undue influence.
The incidence of key S57 vacancies is also particularly noticeable in the Northern Cape
which has the highest of all of the vacancy rates. Only Gauteng has all municipal CFO
posts filled.

It is clear here that the intent of the policy and legislation to guide organisational
performance is often not matched by practice. Further, there has been almost no expert
independent evaluation of municipal performance that enables accurate benchmarking
and assessment of which municipalities are succeeding and which are failing. Weak
support and oversight, and the lack of differentiated assignment of responsibilities point
to the failure to provide an enabling framework to build the institutional strength and
functionality of municipalities.

32
2.17. Conclusion

In conclusion, some key themes have emerged from these assessments in respect to
governance. These may be variously identified politically as including a lack of political
leadership, or political interference and patronage. There is a lack of policy coherence,
multiple reporting demands and a weakening of institutional and organisational abilities
in many of our municipalities. Functional overreach and complexity are forcing many
municipalities into distress mode, exacerbated by the poor leadership and support from
the other spheres and from stakeholders.

In respect to community engagement with public representatives, in instances where it

was found that there was a lack of a genuine participatory process, due to political
instability, corruption and undue interference in the administration, then it can be said
that there is a failure to provide democratic and accountable government. This failure is
growing as evidenced by the community protests and intense alienation towards local
government being expressed by such communities.

The identification of inefficient and ineffective administrations was premised upon:

• Susceptibility to inappropriate political interference

• Poor (political and administrative) oversight and weak compliance
• Inability to respond to complexity of demands and expectations
• Huge variables in spatial location, skills base and socio-economic legacies

Service failures by municipalities may be attributed to elements of uneven and unstable

governance. There is evidence of a high incidence of irregular or inappropriate
appointments, coupled with low capacities, poor skills development programmes and
weak institutional management. Those municipalities in remote areas experience the
added challenge of access to skills and little understanding of their spatial and
economic realities. They generally lack the financial and human resources to deliver on
their constitutional and legal mandate and on citizen expectations.

33
3. SERVICE DELIVERY AND INFRASTRUCTURE

3.1 Introduction

The Constitution enjoins that local government must:

• ensure the provision of services to communities in a sustainable manner

• promote social and economic development
• promote a safe and healthy environment

There is clear and demonstrable progress made by local government in accelerating

access to basic services for the poor. The comparison of access to basic services in
2001 when the system was established to the results in 2007 from Community Survey
data proves this point. And according to the National Treasury’s recent review of local
government, access to electricity has increased by 10% since 2001, flush toilets by 6%
and water by 4%8. National government has played an important role through direct
financial support to municipalities, policy reforms and legislation. Yet, according to the
same review, there is considerable scope for further improvement in both the quantity
and quality of provision bearing in mind the size of the service backlogs and the
pressures from population and economic growth.

This is because there is a higher concentration of economic activity and population in a

few municipalities, accompanied by greater institutional strength and stability in these
municipalities, whereas the majority of municipalities are much weaker in terms of both
economic and human resource capacity. This situation can paint a rather skewed
picture of local government wherein the challenges of the majority of municipalities
overshadow the more positive impact that the few well capacitated and effective
municipalities may be having on the larger proportion of the population.

The unique challenges faced by weaker and more vulnerable municipalities include
complex rural development problems, including a massive infrastructure backlog legacy
that requires extraordinary measures to address funding and delivery capacity
requirements. On the other hand, it has been demonstrated above that urban and
relatively more stable municipalities are also being challenged due to increased urban
growth, new household formation and population growth that require better spatial and
infrastructure planning and more credible public participation and community interface
systems.

8
Review of Local Government Expenditure, National Treasury, 2008.

34
The two main obstacles to accelerating basic services are therefore the lack of critical
infrastructure in rural areas and the proliferation of informal settlements in urban areas.
Both these obstacles are beyond the capabilities (institutional and fiscal) of powers and
functions of municipalities to confront by themselves.

There are some cases where the announcement of unrealistic promises are made by
leaders, and this can create a crisis of expectation rather than a more developmental
approach where communities are empowered to understand the workings of
government and how service delivery and development can be addressed with their
participation and involvement.

It is also the case that many municipalities have not been effective in mediating service
delivery expectations, and mobilising and supporting communities and other agencies
into tapping into the wider network of state and non-state resources. At the same time
the two other spheres of government have not deepened the reach of their programmes
sufficiently, and have not supported municipalities and local communities effectively.

3.2. Policy context

In terms of the policy context, service delivery and infrastructure are operationalised
within the planning framework of government. Coordinated strategic planning should
lead to better delivery through integrated planning and greater coordination among
government departments. The mechanisms to facilitate planning consist of planning
tools that are designed to achieve alignment across spheres.

Whilst the IDP is legislated for in the Municipal Systems Act and the Municipal
Finance Management Act, the Provincial Growth and Development Strategies
(PGDS) have no firm policy or legislative basis. The consequence of this is that
there are no consequences for not engaging in regional planning. Further the
district development facilitation role conceived by the Municipal Structures Act is in
reality a haphazard arrangement in practice.

The Cabinet cluster system represents the structure that was designed to promote
cooperation at a national level. However, due to there being no single window for
coordination or single authority in government it has been structurally constrained to
deliver on its mandate, key of which is the electoral mandate. This sets out the
priorities of government during the coming term. It is the guide to the programmes of the
sector departments and the provincial and local spheres of government – ultimately a
‘social compact’ for a speedy recovery from both economic and social down-turns in the
country.

35
Currently, the Five Year Strategic Framework guides government’s programmes over
the medium term. The planning function will now be a process that coordinates the
development of a three–tiered planning product: long-term (15 years) the current MTSF,
and then the annual programme of action. The motivation here is to ensure enhanced
policy coherence and coordination to facilitate the agenda of government. One
supporting mechanism to do this is for a greater focus on the national setting of
milestones and targets. This supports a more institutionalised system for a workable
integrated development plan for the nation.

The planning system is therefore under review and initiatives for change are
intended to improve performance across the spheres, particularly in the area of
service delivery and infrastructure. For example, Government has invested R787
billion for infrastructure for the current MTEF. Value-for-money and the performance
of the three spheres urgently need improving if the goal of accelerated service
delivery and expanded access to basic services is to be fulfilled and scarce
government resources are not carelessly expended.

3.3 Current practice: overcoming sole responsibility for planning

To execute the intentions of plans, the principle of alignment of local plans with national
and provincial plans remains the key thrust of intergovernmental development planning.
Infrastructure development, encompassing the management of building integrated
human settlements, and basic services such as water, electricity and sanitation remain
the core focus of municipal IDPs but still most plans rarely muster genuine
intergovernmental attention and resources.

Plans for local economic development, fostering investment, special projects and
alignment to national priority policies such as detailed in the MTSF are additional
responsibilities that many municipalities are unable to respond to effectively. It was
deduced from the assessments and related evidential research that most municipalities,
especially the poorer performing ones, need simply to dedicate their energies to
providing basic services and infrastructure.

In the Eastern Cape, for example, the assessment established that the province has the
highest percentage (37.2%) of households living in traditional dwellings, meaning that
the extent of the challenge for rural development, economic and integrated settlement
development are beyond the capability of a local sphere to address alone. This
problematic is intensified by its already high service delivery backlogs, and its poor

36
economic infrastructure, which is a pervasive problem throughout the province. Poor
access and poor connectivity constrains the provision of basic services and the
leverage of productive investment. Such conditions require a whole-of-government and
focused response, whereby cooperative governance comes to mean establishing a
stronger role in the mobilisation of resources and support at local level.

3.4 The uneven effectiveness of IDP implementation

Assessment of the problematic in current practice requires a critique of how the IDP is
utilised as a planning tool. IDP credibility does not necessarily mean effective
implementation and the litany of service delivery challenges can become overwhelming
for municipalities. In Gauteng for example, the sheer scale of the problem of ageing and
decaying infrastructure that supports bulk services, plus the ever-increasing demand for
housing and services to mushrooming informal settlements can be paralysing. Can the
weak IDPs of the local municipalities in the province and the realities of high poverty
and unemployment in the peri-urban areas really align with the aspirations of a global
city region?

Such conditions unveil the prevailing problem that a national, differentiated and
coordinated planning effort is required to provide for a new vision for intergovernmental
development planning. Many examples of service delivery distress were given during
the assessment process, practically demonstrating the urgency of reviewing the
planning environment; certainly communities need to be more directly engaged in their
own development and this relates to the governance observations outlined above. The
charge of an unresponsive political and official environment that marginalises
communities was also frequently raised during the assessments and this refers again to
the sparks for some of the community protests.

Another element is the accountability of municipalities to communities in the

implementation of the development plan. Examples were given of when communities
submitted priorities to the public consultation phase of the IDP, the items may be
included in the plan, yet the budget and implementation would not be forthcoming. The
weakness in many council structures meant that there would little accountability for the
failure to deliver the service as agreed.

For example, in some instances, as in North West province, the councillors, the Mayors
and local and provincial officials were reportedly seldom available to discuss resolving
the community’s problems, such as villages without electricity, appalling roads, waste

37
removal and irregular water tanker deliveries (common to hundreds of villages across
the country).

Some provincial reports reflected upon councillor involvement in the IDP, commenting
that that there is ‘minimum participation of councillors in the IDP process.’ This supports
the commonly expressed view that some councillors are not actually interested in
service delivery in their wards and this may be a result of patterns of patronage by
certain councillors within the wards of their municipality. This is also a values-based
issue and some of the provincial reports refer to these matters.

3.5 Key LED Challenges

Local Economic Development is of critical importance but has been erratic in practice
due to the skills required to shape and direct economic growth in local spaces. Part of a
new approach will be to make clear the balance between a competitive and welfare
focus for LED and thereby clarify thinking on the meaning of LED and its desired impact
in local spaces. This will serve to better guide activities and planning in especially small
towns and less well-resourced municipalities, and reinforce the policy direction of the
LED Framework9.

Related to this will be the need to update and review the PGDS Guidelines so that the
PGDS should be an iterative process with, on the one hand, credible PGDSs providing
inspiration to local and district municipalities and on the other hand, that PGDSs be
informed by more credible local and district LED plans.

In line with emerging thinking regarding differentiated approaches to governance and

planning responsibilities, a more geographically differentiated approach to LED will
delineate more clearly the gap between the systemic competitiveness approach driven
in large cities, and LED activities in small towns or poorer municipalities.

9
 Stimulating and Developing Sustainable Local Economies, National Framework for Local Economic Development
(LED) in South Africa

38
3.6 Overview of service delivery

The key point to emerge from reviews of service delivery is that progress has been
uneven across the country with different issues facing different areas, reflecting variable
socio-economic conditions and municipal competence.

The performance of the six metros has improved steadily (they are now responsible for
57% of all municipal spending), but they also face the greatest challenges arising from
the growing number of poor households and economic expansion. They are simply not
keeping pace with the growth in demand for services from these sources, which risks
hampering economic growth and failing to improve living conditions for the poor.

This is supported by a review of infrastructure by the Development Bank of Southern

Africa, which warned that transport systems in the cities (particularly road, rail and
ports) have deteriorated over the last decade through increasing congestion, capacity
constraints and lack of maintenance, and that this threatens economic growth (DBSA,
2006).

Highly urbanized areas are now scoring higher on backlogs due to the rapid growth of
informal settlements, due to family splitting, homelessness and in-migration, but these
cities are unprepared for providing the most basic of services to dwellers of such
settlements. The concept of integrated human settlements must urgently address the
challenges raised by such rapid urban growth and measures for the health, dignity and
safety of shack-dwellers re-assessed.

39
3.7 Service delivery challenges

In addition to the governance and institutional constraints to effective intergovernmental

planning, the reality of managing complex infrastructure projects and responding to the
various powers and functions assigned to the sphere became clear in respect to the
findings.

Each province has its regional specific challenges and variations in service delivery
strengths and weaknesses. Water service delivery in parts of the Eastern Cape
presents a depressing picture. The severe drought in the province during 2009 means
that expanding sanitation and water connections is out of the question. There are areas
without sewerage systems because there is no water to enable the system to function,
and inevitably, available water quality suffers leading to risk of disease and even death,
as through cholera.

Some municipalities in the Free State rely on bore-holes and underground water to
supply communities. During certain months in some areas like Hertzogville,
underground water runs dry and communities can only collect water for an hour in the
morning and an hour in the afternoon. In Boshoff the municipality relies on the use of
army trucks to supply water as a temporary measure. The amount of R50 million was
allocated by DWAE in March 2008 to cater for water shortages but this amount cannot
be unlocked without a proper feasibility study in place. The municipality does not have
sufficient funding to undertake the feasibility study.

The findings from the Mpumalanga assessment also reveal a long list of infrastructure
and service delivery challenges and inadequacies. For example:

• Insufficient funds to eradicate infrastructure backlogs or complete infrastructure

projects e.g. houses, roads, electricity and water;
• Fast growing informal settlements which are caused by the booming mining
industry put pressure on the municipality to provide more services with scarce
resources;
• The non-availability of land for township development especially for evicted farm
dwellers is impacting negatively on service delivery.

With some justification, many municipalities complain that there are insufficient funds to
eradicate infrastructure backlogs on water, sanitation and roads services, resulting in
incomplete infrastructure projects e.g. RDP houses, roads, electricity and water.
However, individual assessments have also demonstrated examples of under-spending,
a degree of wastage, inappropriate usage of funds, and poor oversight.

40
For example:

• The trend towards diversion of conditional grants to pay for salaries;

• Use of MIG allocations for municipal operational costs;
• Considerable investment amounts are kept by some municipalities whilst there
are huge service delivery backlogs;
• There is a lack of monitoring of infrastructure projects by sector departments and
provincial local government during the construction phase. This has resulted in
poor workmanship being undetected and having no consequences;
• The same poor performing contractors in some cases are appointed repeatedly
and in some cases are alleged to be funding political activities;
• There is a lack of planning to meet the infrastructure and services backlogs (e.g.
through the Consolidated Infrastructure Plan (CIP), and the Service Delivery and
Budget Implementation Plan (SDBIP for the Auditor-General).
• Poor workmanship and low cost material used by many contractors results in
poor standards of housing and disappointed citizens; and
• The rural nature and vastness of some provinces has impacted negatively in the
provision of the basic services.

In respect to MIG fund usage therefore, some contradictions have emerged. It is

important to distinguish between genuine need and misuse of scarce government funds.
The varied ability of many municipalities to actually spend their MIG grants is highly
uneven.

Some of the challenging elements in the current MIG approach include:

• The amount of funding allocated to smaller municipalities on a year-to-year basis

is often too small for them to use the funds for larger bulk infrastructure projects.
• Municipalities are not receiving the appropriate amount as informed through a
formula which could result in poor selection of projects and ultimately poor
outcomes.
• The lumpiness of capital investment in small municipalities is thus a concern.

One proposed solution is to allow MIG funding to be pledged up to 2018 by

municipalities in order to acquire loan finance.

The diagram below illustrates the proposed 3 pronged differentiated approach to the
management and usage of MIG funding.

41
Figure: Three categories for the MIG:

Much policy emphasis is laid on leveraging investments and partnerships for

infrastructure development, but this is beyond the capacity of many municipalities, and
this forms part of the rationale for the differentiated approach with MIG funding. A key
policy premise encompassing all of these reasons for poor infrastructure management
is that MIG funding can only be effective if the infrastructure management system in the
country is effective.

42
3.8 Water and sanitation

Access to water is also a human right and provided for in the Constitution S27 1(b).
Although local government has the primary constitutional obligation to deliver basic
services, the national and provincial government have to play a significant role in
supporting municipalities to fulfil these obligations. This is often most clearly
demonstrated in the management of the Water Service Authorities (WSAs). Many
WSAs, as reported by DWAF in 2007, struggle to fulfil their most basic service delivery
obligations.i This is due to vast differences in ability and capacity between weaker
municipalities such as those in rural areas and the largely financially self-sustaining
municipalities such as metros and secondary cities.

As the water services sector leader, DWAE has urged for a greater say in determining
the municipalities who are tasked with the responsibilities of ensuring the provision of
water services so that as the regulator DWEA is able to take necessary action to
regulate the sector. DWAE agrees with the emerging policy consensus that the ‘one-
size-fits-all’ approach does not work for municipalities in the current local government
environment.

3.9. Water backlogs

Country-wide, the highest water backlogs per household, provincially, are found in
Limpopo (17.2%), KwaZulu-Natal (16%) and Eastern Cape province (12,8%). These
three provinces together constitute 75,5% of the national share of water backlogs.

These three provinces are consistently cited in terms of highest poverty, unemployment,
and high service backlogs. They are closely followed by Limpopo, whose sanitation
backlog figure is at 47%, that is, nearly half, of all households in the province have no or
inadequate sanitation. This is a huge health risk.

An important note in the backlog figures is that eThekwini, a large urban metro has the
highest percentage share of the national water backlog at 3,9%, and of sanitation, at
5,2%. These figures are closely followed by City of Johannesburg and by City of
Tshwane.

There are only 36 municipalities country-wide that do not have a sanitation backlog.

43
There are 1,069,152 out of 12,996,300 households that are receiving below a basic
level of service which constitutes a water backlog. This includes households receiving
piped water further than 200m, springs, rain, water tanks, dam/pool/stagnant water and
water vendors.

Nationally, 213 830 households would need to be served per year until 2014 to
eradicate the existing backlog, which does not take into account growth, formation of
new households and infrastructure failures that contribute to backlogs. This is an
enormous challenge to be managed across government.

3.10 Sanitation backlogs

There are 3,002,152 households out of 12,996,300 that are receiving below a basic
level of service which constitutes a sanitation backlog. This includes households using
chemical toilets, pit latrine without ventilation, bucket latrine or have no sanitation
facility.

Nationally, 600 452 households need to be served with sanitation facilities per year until
2014 to eradicate the existing backlog. This figure does not take into account growth,
formation of new households and infrastructure failures that contribute to backlogs.

44
3.11. Electricity backlogs

The limited availability of energy has emerged in the past months as a serious resource
challenge. It is now clear that the primary electricity supply agency, ESKOM, does not
have the generation capacity to meet the rising demand for energy resulting from the
robust economic growth South Africa has enjoyed (DME, 2008).

45
72.8 % of households i.e. 9, 010, 056 households have access to electricity i.e.
households connected to the grid.

There are 27, 2 % of households i.e. 3, 365, 644 households are below a basic level of
service. This includes households using wood, coal, gas and paraffin.

Table: Percentage share of national electricity backlog

Percentage share of the national

Name of Municipality backlog
Buffalo City 2.5
Umzimvubu 2.2
Ekurhuleni Metropolitan Municipality 7.5
City of Johannesburg Metropolitan Municipality 7.0
Tshwane Metropolitan Municipality 4.1
eThekweni Metropolitan Municipality 5.2
Cape Town Metropolitan Municipality 3.8
DME (2009)

Ekurhuleni Metropolitan Municipality has the highest percentage share of the national
backlog (7,5%), followed by City of Johannesburg Metropolitan Municipality (7,0%),
followed by eThekweni Metropolitan Municipality (5.2%).

46
3.12. Refuse Removal

59,9 % of households i.e. 7,478, 334 households have access to adequate refuse
removal service. This includes (i) removal by local authorities/private company at least
once a week and, (ii) use of communal skip.

There are 40,1 % of households i.e. 4, 998, 787 households are below a basic level of
service. This includes refuse removal by local authority/private company less often, a
communal refuse dump, own refuse dump, having no rubbish disposal facility or any
other means.

Most provinces still have landfill sites that do not comply with legislation Eastern Cape
has 40 registered landfill sites and 76 that are not permitted. Free State has 60 waste
facilities which do not comply to permit conditions. In KwaZulu-Natal all municipalities
have sites but information on whether they are registered is not available. Limpopo has
17 landfill sites that comply with legislation. Northern Cape has 35 which comply and 52
that do not comply. In North West all 21 local municipalities have sites which comply
and Western Cape has 240 sites overall and only 81 comply with legislation.

47
3.13. Roads and public transport

Whilst a number of metropolitan and district municipalities utilise own revenues to

finance the delivery of road infrastructure, the majority of the country’s 283
municipalities rely on three major conditional grant transfer programmes, namely: the
public transport infrastructure and systems grant, (PTIS), the Municipal Infrastructure
Grant (MIG), and the expanded public works programme (EPWP).

However, the 2007/08 data revealed that collectively, municipalities spent less than 8%
of their budget on road infrastructure, with most amounts being spent by the metros and
secondary cities. In some small, rural municipalities, road infrastructure budgets are
less than R500 000, precisely in areas where they are most needed.

In Limpopo province much of the road network in the districts are not tarred. Most of the
gravel roads are not maintained and many do not have appropriate road signs. The
Financial and Fiscal Commission (FFC) has researched the impact of decades of
under-investment in road maintenance and management. The following areas of
concern were identified:

• The state of roads has an impact on the economic development of the municipal
areas. Roads leading to where the majority of the population is located, are not
tarred, and as such, hinder the proper transportation of people, goods and
services to these areas;
• Lack of regular maintenance on the gravel roads and the high cost to maintain
these roads;
• The non-maintenance of access roads in the municipalities is impacting
negatively in the provision of other services; and
• Roads constructed in the 1970s and 1980s without storm water drainage system
require urgent upgrading.

Following research into these issues, the FFC recommended that there should be an
increased and more stable flow of funds for roads infrastructure. One key
recommendation in this regard would be to explicitly include a road infrastructure
component within the provincial and local government equitable share formula. Another
is to expand the role of development institutions and capital market in funding road
infrastructure investment especially within provincial and local spheres.

48
3.14. Housing

While many municipalities have made significant progress in addressing historical

backlogs in basic infrastructure, shifting patterns of demand to urban areas and to
support economic growth is currently outstripping the investment capacity of
municipalities. During the provincial assessments, many municipalities indicated that
they are experiencing serious challenges with the provision of housing. Although
housing is a provincial competency, the impact of the slow provision of housing is
experienced at local level.

The unpredictable nature of provincial housing expenditure and approval for

developments undermines the ability of municipalities to adequately plan for
infrastructure investments and can lead to delays in both housing and infrastructure
projects. Some metros have begun to undertake the housing function on behalf of their
provincial counterparts. In such cases municipalities will prepare plans and submit them
to their provinces for approval and release of funding. Long delays can be experienced
through this arrangement. Better alignment is required between housing and
infrastructure conditional grants, to facilitate a ‘package of services’ to facilitate the
integrated human settlements policy.

The KwaZulu-Natal Province reported that the priority to provide housing differed
according to the profile of the municipality, i.e. housing was likely to be a priority in
urban municipalities. In Gauteng, all the metros noted the challenges to provide housing
for the ever growing population and to facilitate the transition of the “poor” living in
hostels, informal settlements and historical ghettos (Johannesburg Metropolitan
Municipality).

Housing provision is also hampered by a lack of funds and poor alignment of service
providers to provide for integrated developments. In Limpopo, the delivery of RDP
houses in one LM cannot be done as the 600 completed units are not connected to the
bulk water and sewerage network of the local municipality. Some municipalities have
indicated that housing projects are delayed by political instability and that some of the
unfinished houses are vandalized. The Free State and Limpopo local municipalities
indicated that they are experiencing issues with poor quality or incomplete RDP houses.

According to the National Department of Housing an estimated 2 744 informal

settlements were identified in 2007/2008. The number of households is 1,240,000 [GHS
2007, Statistics SA]. The National Department of Housing is currently in the process of
assisting Provincial Housing Departments with the compilation of a demand database.

49
Housing formalisation and regularisation of informal settlements remains a planning and
management challenge. Fast growing informal settlements put pressure on
municipalities to provide more services with scarce resources but the lack of funds for
new properties to relocate households to in informal settlements, means many remain
unsuitable for habitation. The challenge of keeping pace with the demands of
urbanisation is illustrated by the figure below, which shows that despite the large
number of new formal houses built over the last decade, the backlog is still considerable
and concentrated in the big cities.

There are an estimated 286,000 informal houses in Ekurhuleni, 260,000 in

Johannesburg, 180,000 in Cape Town, 173,000 in eThekwini and 165,000 in Tshwane.
Together they account for almost half (47%) of all informal housing in the country, and
this is where the biggest increases have been over the last decade. The falling average
size of households adds to the complication for policy because more units are required
to house a given population.

In summary, the following challenges with housing provision were identified during the
assessments:

• Poor relations between the Traditional leaders and the local municipality which
has a negative impact on the delivery of services. Many traditional leaders
allocate land to communities without consultation with the municipalities. The
municipalities cannot properly plan for the installation of services in these areas;
• Traditional land ownership can clash with the need to the proclamation of
Townships;
• Scarcity of ‘free’ land for housing delivery in most areas – rural and urban;
• High spatial development cost for a large number of small dispersed villages with
less than 1000 people, which have high financial implications;
• Need to repeal regulations of older legislation (e.g. subdivision of property in
townships) such as the Black Administration Act;
• Implementation of Property Rates Act is limited due to incomplete valuation rolls
and non implementation in rural areas;
• Housing formalisation and regularisation of informal settlements remains a
planning and management challenge;
• Fast growing informal settlements put pressure on municipalities to provide more
services with scarce resources;
• Illegal occupation of RDP houses due to delays and poor management of
housing delivery and incomplete housing projects due to corrupt or defaulting
contractors;
• Vandalism of low cost houses as a result of non-occupation by beneficiaries; and

50
 • Lack of equity in the allocation of houses where some communities are given
preferences over others.

Reported challenges relating to land include:

• Lack of support to land claims due to poor coordination between the Land Claim
Commission and municipalities, resulting in collapse of well intended initiatives
within the province;
• The non-availability of land for township development especially for evicted farm
dwellers is impacting negatively on service delivery; and
• The role of Traditional leaders in land allocation and upgrading of land tenure
rights need to be resolved. Who owns the land? When Traditional Leaders are
present they are told that they own the land, when not present the message is
the land is owned by the state.

3.15. Intergovernmental cooperation

The expectations from intergovernmental cooperation have largely not been met. The
result is that it is still not clear how the various IGR structures function and the extent to
which they foster meaningful cooperation between sectors and outcomes focused
deliverables.

Many municipalities cited a lack of development facilitation support from districts to local
municipalities on provision of water and sanitation infrastructure and other sector-based
service delivery areas. Clearly intergovernmental coordination is essential for this
service to be effective. It demonstrates again that coordination cannot be effective
without functional clarity and direction in who is providing and paying for the service and
where it needs to be implemented.

3.16. Understanding IGR

In order to deepen understanding of intergovernmental relations at a provincial level,

and to ascertain the capacity-building needs at provincial level, in 2008 COGTA
embarked upon a capacity building programme for IGR across 4 provinces and 23
districts. The trends picked up demonstrated that it is a poorly understood and
institutionalised legislation. The implications of this are practical - poor coordination and
restricted application of IGR to developmental outcomes.

51
There are questions to ask when legislation is poorly understood and implemented. In
reviewing the effectiveness of the system of cooperative governance the possibility
emerges of revising the IGRF Act. This would primarily be to remove the voluntarism in
the system, to clarify the roles of intergovernmental structures and to define the
responsibilities of the spheres in coordinated development planning.

The graph below depicts the capacity development needs as identified by the workshop
participants at the workshop held in Mpumalanga:

Understanding 
legislation
Powers and Functions 

Managing IGR  16.
32.
14.
Coordination, 
integration, alignment 12.
20.
A stakeholder approach 
IGR 29.
23.
Implementation 

Intergovernment
planning
              

3.17. Conclusion

The current analysis of the constraints to cooperative governance by COGTA reveals

the imperative of creating a new policy framework for the practice of cooperative
governance across the three spheres. Whilst change and maturity in the governance
systems would assist, the weakness of institutionalisation of cooperative governance
constrains the evolution. The need for a change in how leadership and management
echelons think and perform is also critical to success, as cooperation for service
delivery in all its manifestations cannot be managed on a legislative, policy or technical
basis alone.

Highly uneven responsiveness to the challenges of local government in the

management and provision of services has contributed significantly to the state of

52
distress local government finds itself in today. It can be said that the key high level
problematic in planning, service delivery and infrastructure thus include:

• Poor cooperative governance;

• Poor Implementation of the IGRF Act;
• Ineffective functioning of the Cluster system;
• Poor community / civil society engagement and mobilisation; and
• Uneven and inadequate implementation of government programmes.

These areas of ineffectiveness result in much of the poor implementation of the IDP in
municipal areas. Considering the IDP is the representation of most aspects of service
delivery per municipality, the gap between the ideals of intergovernmental coordination
and the realities on the ground is fundamental.

Following from this identification, it became clear that the lack of a relationship between
a system of national indicators that enables government to assess the comparative
performance of different municipalities and the planning related powers and functions
assigned to them has become highly problematic.

Cities such as Cape Town, eThekwini and the Gauteng complex for example, may
require special legislation and functional planning authority to maximise their role in
building the national economy, whilst rural municipalities in former ‘homeland’ areas for
example, need to be released from the complexities of compliance with an integrated
development plan that is way beyond their capacity to implement.

This reverts back to the issue of policy assumptions – policy goals have to be realised
through a joint governance and fiscal lens. It was demonstrated that housing and land
policies, continue in practice to confound the local sphere, through complex split
authorities that remove decision-making and the regulatory environment from the local
sphere. Larger and competent urban metros and municipalities are frustrated by the
complexities of accreditation and the role of reluctant provinces in granting any of the
three accreditation levels.

Efforts to improve and restructure coordination will not be effective if premised upon the
same assumptions that have bedevilled service delivery expectations to date – one
mandate – one-size-fits all - combined with prevailing poor performance and a lack of
monitoring and support.

53
4. FINANCIAL MANAGEMENT

4.1 Introduction

Local government has emerged from a prolonged transition to face a second generation
of challenges, namely:

• The growing economy has resulted in increased demand for economic

infrastructure;
• Ageing assets are increasingly requiring upgrading, rehabilitation or replacement;
and
• Urbanisation means the location and nature of poverty is changing.

Due to our country’s history of inequity, there remain significant areas of poverty with
limited social and economic development in spite of 15 years of attempted redress. This
was sought through the intergovernmental fiscal system, which is based on a
redistributive approach across all municipalities through the system of transfers.

While there are many examples of exceptional efforts and remarkable successes by
individual municipalities, the local government system does not, at present, appear to
be responding to these challenges very effectively. Many municipalities can simply not
leverage the funds they need for even moderate municipal functionality. The strategies
to address service backlogs are therefore now coming up against significant cost
pressures.

Compliance with the current financial management system is a constant challenge for
many municipalities. Audit reports are uniformly poor for over half the municipalities, the
origins of which start with their inability to manage their Annual Financial Statements
and the systems and processes described in the MFMA.

The financial environment is further challenged by a poor skills base, weak support from
provinces and poor controls that leave the system open to abuse and fraudulent activity.
Also, the demands of implementing the Property Rates Act were underestimated as well
as the uneven application of systems, software and processes.

54
4.2. Policy Context

The consolidated legal framework for local government consists of chapter 7 of the
Constitution, the Municipal Finance Management Act, together with the Municipal
Structures Act, Municipal Systems Act, Municipal Property Rates Act, various sector
and other legislation applicable to local government. The South African
intergovernmental fiscal relations system is based on section 41(1) of the Constitution,
the Intergovernmental Fiscal Relations Act and Division of Revenue Act.

Underlying policy development in the arena of municipal finances is the issue of

providing acceptable levels of municipal services to poor households at affordable rates
which in turn, requires some redistribution. That source of redistribution can be local,
through cross-subsidisation within the municipality or from grants financed from national
taxes, or a combination of the two. The conventional view internationally is that
redistribution is best effected from the national level. In this regard, an increasing
reliance of municipalities on transfers (equitable share and others) from national
government to fund their activities is evident. This partially reflects the national priority
accorded to combating poverty through providing universal access to basic services.

4.3. Current practice: audit findings

Evidence suggests that, in aggregate, the demands of a growing economy are no

longer being met by the levels of municipal investment. Challenges with regard to
financial management identified in municipalities during the assessment of the state of
local government are not new and have been identified in reports from National
Treasury and the Auditor-General.

Poor financial management and lack of controls and accountability systems impacts
negatively on service delivery for communities, from lack of provision of water and other
services to inadequate funds for technical equipment for servicing basic infrastructure.

Although there has been a reduction in the number of disclaimed and adverse audit
opinions for municipalities, from 99 disclaimed opinions for the year ended June 2007
decreased from to 86 (35%) for the year ended June 2008, more than a third of the 283
municipalities obtained either disclaimers or adverse opinions. A further 57
municipalities received a qualified audit opinion in 2007/8, which bring the total of
municipalities with qualified, disclaimer or adverse opinions to 152 (54.4%).
Furthermore, forty-five per cent of municipalities (67) compared to 38% in the prior year

55
had findings on unauthorized and fruitless and wasteful expenditure leading to
qualifications in this regard.

The number of outstanding audits has also increased dramatically since the previous
financial year. Another 38 (13.4%) municipalities were not included in the AG’s 2006/7
report due to capacity constraints in finalising prior year audit backlogs and annual
financial statements that were not submitted on time. This represents a significant
deterioration with the previous year when 13 municipalities (4.5%) were not included.

The Auditor-General’s report has identified a lack of controls, mismanagement and lack
of governance principle as the key reasons for the state of despair in municipalities. The
Department of Co-operative Governance and Traditional Affairs has launched an
“Operation clean audit 2014” campaign on 12 August 2009. The aim is to address audit
queries in a sustainable way to improve service delivery and ensuring that by 2011, all
municipalities and provincial departments have dealt with the causes of disclaimers and
adverse opinions.

The figure below provides a breakdown of those audit findings that gave rise to the
qualified audit opinions. The audit findings are split between items on the balance sheet
(statement of financial position) highlighted in grey bars and the income statement
(statement of financial performance) highlighted in green bars. One of the biggest
challenges in municipalities is asset management as encircled below:

56
Figure: Areas qualified on reported financial position and/or financial results

4.4. Grant dependency

The design of South Africa’s intergovernmental fiscal system is informed by the

country’s history of inequity and inequality: concentrations of development and
economic wealth in certain parts of the country, contrasting with poverty in other parts.
The system is based on the understanding that the redistribution challenge is largely a
national issue and must be addressed primarily through the national fiscus (the system
of transfers). To increase the efficiency of service delivery, the intergovernmental
system is dependent on the proper co-ordination of policy, budgeting, planning,
implementation and reporting between the spheres.

Substantial increases have been made to the transfers (both operational and
infrastructure) of local government over the last few years in acknowledgement of its
increased service delivery responsibilities. Yet, many municipalities are not in a position
to meet their developmental mandate due to an inadequate economic base or high
levels of poverty and unemployment. Internal municipal systems result in cumbersome
administrative and budgeting systems, inefficient service delivery, poor management
and disproportionate wage bills are adding to the problems of municipalities. National

57
policies, such as the extension of free basic services to poor households, are also
putting added pressure on local government.

At 22.4 per cent of total operating revenue in 2007/08, government grants are the
second largest source of revenue for municipalities. The increasing reliance of
municipalities on local government transfers is largely due to the rapid growth in the
local government Equitable Share and in national conditional grants to local
government, as well as the abolition of the RSC levies. The Equitable Share, the only
unconditional grant to local government is intended to fund a range of municipal
activities, although national free service levels are the main purpose. The distribution of
the equitable share has increasingly favoured metros over local municipalities.

In 2003/04, metros received only 20 per cent of the equitable share, while local
municipalities received 64.2 per cent and district municipalities the remainder. In
2006/07, 40.7 per cent of the total grant went to metros, 37.3 per cent to local
municipalities and 22.1 per cent to the district municipalities.

The bias towards the metros is a result of both their large and growing poor populations
and the introduction of the RSC levy replacement grant, which is transferred through the
equitable share mechanism. This replacement grant was also allocated to district
municipalities.

According to National Treasury’s Local government budgets and expenditure review:

2003/4 – 2009/10, metros and local municipalities are receiving almost the same
proportion of the equitable share, at 39.7 per cent and 38.5 per cent respectively. This
has led to an outcry from a number of local municipalities to urgently review the
formulae for the allocation of the equitable share.

58
 Extent of municipalities’ reliance on National Government Transfers according to the
Local government budgets and expenditure review: 2003/4 – 2009/10:
Outcome Estimate
04/05 05/06 06/07 07/08 08/09 09/10 10/11
Category A Municipalities (6)
No. who receive more than
30% of revenue from national
transfers - - 1 1 1 - -
50%of revenue from national transfers - - - 1 - - -
75% of revenue from national
transfers - - - - - - -
Secondary Cities category B
Municipalities (21)
No. who receive more than
30% of revenue from national
transfers 1 4 5 4 5 4 5
50%of revenue from national transfers - - 1 2 - - -
75% of revenue from national
transfers - - - - - - -
Remaining category B Municipaliites
(210)
No. who receive more than
30% of revenue from national
transfers 129 142 153 154 159 163 157
50%of revenue from national transfers 69 79 93 92 97 104 102
75% of revenue from national
transfers 28 33 41 37 38 47 45
Category C Municipalities (46)
No. who receive more than
30% of revenue from national
transfers 37 33 43 40 42 43 44
50%of revenue from national transfers 28 22 40 36 38 40 42
75% of revenue from national
transfers 11 11 23 20 24 31 32
Source: National Treasury

The above table indicates that 57 municipalities receive more than 75% of their revenue
from national transfers. Such municipalities cannot be regarded as financially viable.

A number of local municipalities have even indicated that they are 100% grant
dependent. These municipalities do not have a formalized township to collect revenue
from and are dependent on the national and provincial government for financial support.

59
Although there are requests for increased funding, the spending of grants in a number
of municipalities, levels of expenditure relative to allocations vary considerably between
categories of programmes and individual programmes. The unspent conditional grants
are also supposed to be cash-backed – but very often this is not the case with
municipalities having spent the cash for operational purposes.

With regard to grants, a number of issues are beginning to emerge and will have to be
addressed within the system of transfers over time:

• Co-ordination between programmes remains weak. Delays in housing

implementation which is not a municipal function, for example, can slow down
the rate of infrastructure investment by municipalities;
• The proliferation of indirect infrastructure transfers further complicates co-
ordination arrangements;
• Transfers continue to weaken local democratic accountability. The growth in
grant dependence and the prevalence of indirect transfers obscure the
accountability of municipalities. The grant conditions often replace local
oversight of municipal performance with complicated reporting requirements to
national departments;
• Weak programme design, implementation and evaluation procedures limit the
impact of grants on the development outcomes sought by government\; and
• Programmes to strengthen the capacity of municipalities remain fragmented and
are difficult to evaluate.

4.5. Revenue and Expenditure Management

The share of service charges in total operating revenue declined from 49 per cent in
2003/04 to 42.9 per cent in 2009/10 mainly due to the sharp increase in national
transfers. The Local government budgets and expenditure review: 2003/4 – 2009/10
indicates that at 42 per cent in 2006/07, service charges are the largest source of
operating revenue for municipalities.

In view of service charges being the main source of revenue to municipalities,

challenges experienced with enforcing debt collection and an increase in the aged debts
(i.e. outstanding debts of more than 90 days), as well as a high level of indigents and
the culture of non-payment impact hugely on their financial viability.

Challenges are experienced with enforcing debt collection and an increase in the aged
debts (i.e. outstanding debts of more than 90 days), as well as a high level of indigents

60
and the culture of non-payment. In addition, many local municipalities are reporting
losses (both water and electricity) due to illegal connections. This renders the majority
of local municipalities financially not viable and unable to upgrade and maintain
infrastructure.

At 30 June 2008, there were at least 85 municipalities with debtor levels higher than 50
per cent of own revenue according to National Treasury Reports. In addition, 43
municipalities reported negative opening cash positions for the third quarter ending 31
March 2009. This is a strong indicator that these municipalities are at serious financial
risk, especially if there is an ongoing deteriorating trend.

It needs to be noted in this regard that 75 municipalities did not give information on their
cash position as part of the 31 March 2009 section 71 returns. A municipality with a
positive cash position may still not have enough cash and investments on hand to fulfil
its legal obligations to provide for the cash-backing of reserves and other working
capital requirements.

National Treasury reported in June 2009 to the Technical Committee for Finance that 56
local municipalities and eight districts are on their financial distress list.ii Most of the
local municipalities are in the Eastern Cape (11), the Free State (11) and the Northern
Cape (10). The rest of the municipalities are distributed as follows: North West (6),
KwaZulu-Natal (5), Mpumalanga (5), Western Cape (4), Limpopo (3) and Gauteng (1).
The eight districts in distress are: O.R. Tambo, Cape Winelands, Umkhanyakude,
iLembe, Nkangala, Mopani, Metsweding and Namakwa.

Although the Municipal Property Rates Act (2004) took effect from 2 July 2005, the new
property rating and valuation system only takes effect when a council has adopted its
rates policy and has prepared the first valuation roll in terms of the Act. Municipalities
are required to bring their valuation records up to date within four years of the effective
date of the legislation, i.e. between 1 July 2006 and 1 July 2009.

The implementation of the Property Rates Act in some traditional areas proves to be
contentious, e.g. Limpopo Province. Where the Municipal Property Rates Act has been
implemented, positive increases in revenue were observed, e.g. KwaDukuza LM
(245.6%) and Umshwathi LM (569.4%).

Political tensions coupled with political instability has rendered many municipalities
unable to invite private sector in the IDP formulation processes and thus both foreign
and domestic investors have been unable to identify investment opportunities. The rate
and level of revenue raising in municipalities is further compromised by deep levels of
suspicions between management and politicians.

61
4.6. Credible budgets

Municipalities are showing a poor ability to accurately plan and spend their budgets (i.e.
credible budgets). A credible budget is regarded as one with a variance of less than 20
per cent. 35 municipalities overspent their total adjusted budgets to the total amount of
R2.6 billion while 182 municipalities under spent to the amount of R19.1 billion. When
analysing the capital adjusted budget spending, 177 municipalities under spent to the
amount of R7.3 billion and 32 municipalities overspent to the amount of R350 million.

Analysis of the operating adjusted budget indicates that 24 municipalities overspent

their operating budget to the value of R2.6 billion while 166 municipalities under spent to
the value of R12.3 billion. A very significant risk going forward is that municipalities’
spending plans outstrip realistically collectable revenues.

A worrying trend was identified in Limpopo province which might be indicative of a lack
of capacity to adequately plan (budget), particularly the projection or estimation of
revenue. The budget for operating revenue was for example R 5,155,606 but a total of
R 9,676,916 (187.7%) was received. Of the R9, 676,916 received, R4, 773,176 was
spent, which represents an over expenditure against the planned or budgeted R2,
480,821 for operating expenditure. It must also be noted that in Limpopo province the
Auditor General qualified 58% of municipalities on expenditure (2007/8) that could either
be the result of inadequate filing systems or possible maladministration of revenue.

4.7. Conclusion

The assessment process has revealed that the financial environment in municipalities is
a highly problematic area – at worst it is fraught with both a poor skills base, weak
support from provinces, and then open to abuse and fraudulent activity. Many
municipalities lacking a tax base, short of Equitable Share and with a weak revenue
base simply cannot leverage the funds they need for even moderate municipal
functionality.

One of the basic principles underlying Municipal Finances is the principle that Local
Government is substantially financed by means of own resources. This is an important
feature of any democratic local government system. It ensures that municipalities are
directly accountable to local residents for the functions they perform and the services
they provide.

With respect to financial management, National Treasury reports referred to in this

Assessment Report provide clear evidence of the dire financial situation of

62
municipalities. Municipal revenue collection has begun to fall as greater reliance is
placed on transfers as a revenue source. Municipalities continue to face capacity
constraints in conceptualising and implementing developmental spending programmes.

Growing grant dependence is creating a dependency syndrome, which in future might

be unsustainable. Furthermore, if municipalities had collected half of their outstanding
debts, they would have had about 18 per cent more revenue with which to fund the
delivery of services. The increase in outstanding consumer debts highlights possible
governance problems.

It is argued here that the policy context for financial management may be over
sophisticated for many municipalities, and expectations too high. The principle of a
differentiated approach towards the different types of municipalities may need to be
further entrenched in financial management policies for local government and aligned to
emerging policy proposals for a new national approach to differentiation.

It makes sense that government should extend financial freedoms and flexibilities to
competent municipalities in order to speed up the provision of services in a manner that
can be sustained and to address bottlenecks, backlogs and neglected repairs and
maintenance. Conversely, better technical assistance should be provided to
municipalities with weak capabilities in financial management, external borrowing,
income generation and debt collection.

5. LABOUR RELATIONS

5.1 Introduction

The overview of labour relations details the seriousness of the breakdown of functional
labour relationships in many municipalities. Over and above the contested areas
between management, councillors and labour, the simple issue of capacity – the poor
skills base and lack of training and career pathing, illustrate the unprofessional lack of
concern for building a dynamic labour force. The indifference or incapacity to sort out
pay parity issues, and health and safety standards or the ignoring of agreements, all
point to dysfunctional human resource management and weak integrity and ethics
within some municipalities.

Lack of cooperation, poor communication and poor relations between management and
organised labour have led to an effective breakdown in a functional relationship
between the two parties in many municipalities. This has been especially widely

63
reported in the majority of municipalities in North West, the Northern Cape and the Free
State. Related to this is the poor functionality of Local Labour Forums and the lack of
trust between management and organised labour due to the latter’s role in reporting
cases of alleged corruption and nepotism.

The incidence of low productivity, poor motivation of the work force and poor
supervision were raised in a number of municipalities. It was frequently reported that
there is political interference of the councillors in recruitment.

Other labour issues that have been identified as of importance in the municipal
assessments include skills development and training, occupational health and safety,
recruitment and appointment processes, organograms and post structures, salaries,
wages, outsourcing and temporary workers.

5.2. Policy Context

The merging of 843 municipalities into 284 in 2000, have led to challenges of aligning
salary structures and employee benefits. Personnel in local government are employed
by individual municipalities within the framework of the Uniform Conditions of Service
agreed to in the South African Local Government Bargaining Council, with effect from 1
January 2004. Employment contracts and conditions of service in local government are
negotiated through collective bargaining arrangements with the unions, with SALGA
representing local government.

The government is committed to creating a single public service, to ensure greater

personnel mobility between the three spheres and improve service delivery and
coordination. Plans to develop uniformity between the remuneration frameworks of
public service and local government are required. The greatest challenge involves
aligning the human resource management practices between the public service and
municipalities. This involves aligning the current remuneration grading and conditions of
service dispensations.

The Skills Development Act of 1998 provided for the institutional and financial
framework for skills development, including the establishment of a Local Government
Sector Education Training Authority (SETA). The mandate and obligations of LGSETA
are based on the Skill Development Act, but also the South African Qualifications
Authority Act (SAQA) of 1995, the Skills Development Levies Act 9 of 1999 and in
accordance with the National Skills Development Strategy 2005 to 2010 and the Sector
Skills Plan for Local Government. Chapter 7 of the Local Government Municipal

64
System Act 32 of 2000, prescribes the obligations on municipalities in terms of human
resource development and capacity building.

The Organisational Rights Collective Agreement agreed to in the South African Local
Government Bargaining Council and in accordance with the provisions of the Labour
Relations Act, 1995 provide for and regulate organisational rights for trade unions in the
local government sector. The Agreement came into operation on 26 April 2005 and
shall terminate on 30 June 2010. SALGA, IMATU and SAMWU are the parties to the
Agreement.

5.3. Current practice: Local Labour Forums (LLFs)

Non-functionality of the LLF is a widespread phenomenon in municipalities throughout

the country. The Local Labour Forums are not functional and in some cases not
effectively utilised due to lack of cooperation between organised labour, councillors and
senior management. This exacerbates the instability in administration and has a serious
impact on service delivery. Due to this non-functionality many labour demands are not
addressed and contribute to the mobilisation of labour against management.

The Organisational Rights Collective Agreement which governs the establishment of

Local Labour Forums (LLF) is also not consistently implemented in municipalities. This
has led to non-functionality of LLFs in many municipalities across provinces, for
example Ba-Phalaborwa LM in Limpopo, Alfred Nzo DM in the Eastern Cape, Mafikeng
LM in North West, and Hantam LM in the Northern Cape.

In many cases where the LLF is non-functional, relationships between management,

councillors and labour are also adversarial. In the Free State this is reportedly the case
in 14 of the 25 municipalities. While three municipalities have been singled out for
serious labour challenges KwaZulu-Natal, a further 29 municipalities have moderate
labour challenges which need to be addressed.

There need to be engagement on the role of SALGA in the current poor relations
between management and organised labour and its improvement. In 2005 and 2007
strikes in the municipal sector ranked among the top six strikes nationally in terms of
workdays lost. This is of specific relevance as the strategic objectives of SALGA
include ensuring municipal compliance with workplace legislation, to facilitate the
implementation of labour and human resource dispensation in municipalities that
enhances service delivery and to advocate labour peace in the sector.

65
Disruptions were experienced during the recent municipal workers strike which saw
dozens of striking municipal workers trashing the streets to voice their anger and
disdain for the proposed wage increase by municipal employers. In some municipalities,
especially in North West province, municipalities have also been experiencing stand-
offs between management and labour, which has led to pro-longed strikes, court actions
and damage to property.

5.4. Skills development and training

The lack of skills development programmes or committed training in many municipalities

has come strongly to the fore. Many of the skills issues raised during the municipal
assessments are not new. In its submission to the Policy Review Process on Provincial
and Local Government, SALGA identified a number of challenges with skills
development and capacity building on municipal level, including:

• Under-investment in people, particularly where technical, management and

leadership skills are required;
• Assumptions that there are short cuts to acquire specialist skills except through
required education and work experience;
• More creative responses are required to address scarce skills, such as
partnering with civil society, private sector and shared services options;
• High turnover of staff due to changes in leadership, especially after elections;
• Not enough attention paid to skills required by politicians in terms of governance
and associated accredited programmes to build such skills;
• Political influence in appointment process results in politically acceptable
appointments at the expense of technical competence; and
• A poor municipal work environment is not conducive to attracting and retaining
talented professionals. This is due to unclear job descriptions, limited incentives,
limited career paths and little scope or encouragement of initiative.

In moving forward on skills development, specific attention will be needed to be given to

career pathing, defining and enforcing minimum competencies for certain posts, better
investment in apprenticeships, applicable programs for politicians and relevant
management and leadership training. These needs emphasise the importance of a
dedicated local government training institution for proving accredited training.

66
5.5. Occupational Health and Safety

The ignoring of occupational health and safety standards have been raised by
organised labour in many municipalities. This includes the issue that the necessary
structures to ensure OHS are not in place or that required protective clothing are not
issued, or required periodical medical check-ups are not adhered to. (e.g. Ramotshere
Moiloa) There has been some dispute by management in municipalities on non-
compliance of these issues. There has been some dispute by management in
municipalities on non-compliance of these issues.

In terms of poor working conditions, dilapidated municipality buildings including furniture

and equipment, has been identified in some municipalities.

5.6. Recruitment, appointment and organograms

There is reported political interference of the councillors in recruitment and the poor
relations between labour and management has been cited as resulting in the flouting of
procedures and policies for sound human resource practices e.g. in Mpumalanga.
Unions at Mnquma in the Eastern Cape also raised the recruitment of the majority of the
work force by councillors.

There have been claims by organised labour that nepotism and favouritism result in
erratic appointments and promotions. Cases have been cited where posts are filled
without being advertised; people are appointed for posts that they for in technical
positions and job evaluations and job descriptions are not in place.

The Public Service Commission proposed in their submission on the Policy Review on
Provincial and Local Government that the employment contracts of senior managers
including the municipal manager should be longer than 5 years to ensure security of
tenure.

The Institute of Municipal Administration for Southern Africa (IMASA) has proposed that
the senior management structure of a municipality should consist of professional
officials. It should be obligatory for these professionals to belong a professional institute
with its own code of conduct. Interventions on the employment of professional
personnel are necessary, training, assistance by professional institutes and cities or big
towns, and organised local government.

67
According to the Institute for Local Government Management of South Africa (iLGM),
appropriate recruitment and selection processes should be used. Appointment of
employees at all levels should be totally de-linked from political office-bearers.

In a number of cases the discrepancy between existing organograms and appointments

has been identified in municipal assessments. Outdated, non-functional and
unapproved municipal organisation structures have been reported.

National Treasury indicated that 28% of municipal employees are appointed to non-
existent positions, which is not reflected on the municipality’s organisational structure.
This seems to be widespread among municipalities in Mpumalanga, where more than
60% of municipal employees are appointed to positions not reflected on municipal
organisational structures. This is also prevalent among municipalities in the Eastern
Cape (39%), KwaZulu-Natal (29%) and Free State (23%). This practice may point to
problems with municipalities’ organisational structures in that they are not aligned to
what municipalities do because they are either out of date or poorly designed. It also
reflects non-compliance with the legislation governing updating of organisational
structures and procedures for making municipal appointments.

5.7. Remuneration framework

Municipal Expenditure on personnel comprises 30% of aggregated operational

expenditure by municipalities. In 2006, overall municipalities employed 203 734 people.
The six metropolitan municipalities employ about half of the staff in local government,
45% are employed by local municipalities (17.3% by 21 secondary cities, 22.6% by 140
town and 5.8% by 70 rural municipalities) and 5% by Districts. Trends between 2005
and 2006 show that employment has decreased marginally, while the average cost of
employment is increasing.

Employee salaries and benefits are not standardised in some cases. While disparities in
salaries are due to amalgamations of municipalities in some cases, salary disparities
amongst employees of similar ranks are reported to be common in many municipalities.
The wide variations in the salary scales of employees in similar size municipalities, as
noted by the National Treasury Budget Review are hard to justify.

The non-implementation of the wage curve and the grading of municipalities which are
overrated and results in raising expectation of salaries, have been identified as critical
issues informing labour action in some municipalities.

68
Other labour force issues identified in many municipalities include what is perceived by
organised labour as unilateral outsourcing, the use of outside lawyers in disciplinary
cases, the prolonged contracts of temporary workers(e.g. Ratlou) and the inflation of
the labour force of municipalities with general workers, which are neither properly
qualified nor properly utilised in the municipality. (e.g. Ditsobotla and Tswaing).These
matters must be addressed in a process where there is proper access to information to
all parties.

5.8. Conclusion

The analysis of labour issues indicates that the current municipal working environment
is not an attractive proposition. The poor human resource management prevalent in
many municipalities does not assist in attracting and retaining the skilled and
professional staff required to ensure service delivery. This is further compounded by
political interference in the recruitment process, appointment of persons to non-existent
positions and disparities in salaries. A lack of compliance with work place obligations
have been reported widely.

There is an urgent need to facilitate engagements between the workers and employers
to stabilise the deteriorating relationship, illustrated by protracted labour disputes. The
way the current organisational rights collective agreement is implemented, mediated
and monitored requires review. The need for dedicated and accredited training for the
local government sector is evident from the lack of current meeting of skills
development obligations.

69
6. CONCLUSION

The transformation of local government has probably been the largest undertaking
within the entire democratic governance transformation process since 1994. Enormous
progress has been made but much still needs to be achieved before all 283
municipalities are fully functional, effective, efficient, responsive and sustainable. In
response to the numerous performance and viability failures amongst municipalities,
and the deteriorating service delivery record, government decided that an urgent and
comprehensive intergovernmental Turn-Around Strategy (TAS) for local government is
needed.

The process to develop the TAS began with the provincial municipality-by-municipality
assessment process. From these assessments the Consolidated National Report is
being compiled, from which this Overview Report has been derived. The purpose of the
provincial assessments was to ascertain the key problem statement per thematic area
and to establish the root causes of poor performance, distress or dysfunctionality in our
municipalities.

The provincial assessments were also based on enquiries focusing on four thematic
areas: governance, service delivery, financial management and labour relations. The
legacy of our apartheid spatial patterns is also analysed in the governance section of
this report. The findings point to the need for a number of adjustments and reforms in
the leadership, policy, regulatory and oversight environments. The summary below
highlights the key problem statements or the impact of the failure on each thematic area
and outlines the root causes underlying them.

From this exploration of the root causes of pressure points, the Turn-Around Strategy
will begin a process of substantiating issues and shaping the roles of government and
its partners in the planning and implementation phase of the national Local Government
Turn Around Strategy.

70
7. TURN-AROUND STRATEGY: SOME DIAGNOSTIC APPROACHES

Sample assessment of key problem areas and root causes per thematic area

Problem Statement Root Causes

(Symptom)
Governance
1. Insufficient human and Policy inconsistency and incorrect policy assumptions between
financial capacity to spheres and communities with regard to municipal ability to deliver
deliver on constitutional which results in a gap between citizen expectations, policy goals and
and legal mandates and municipal ability to deliver
on citizen expectations
Clear measurable targets not communicated locally with communities
and differentiated:
a) spatially
b) organizationally
c) individually
2. Over-complexity in the Persistence of the one- size-fits-all approach to the governance
system; framework for local government
Municipalities fail to
manage their powers and Inability of municipalities to refuse unfunded mandates / additional
functions and related responsibilities
responsibilities Undeveloped concept of spatial differentiation between municipalities
to guide functional assignments, monitoring and levels of oversight,
support
3. Little positive impact Undefined and voluntaristic nature of cooperative governance and IGR
on coordinated and
cooperative governance
through either national
intergovernmental Instability between spheres of government; lack of governance or
system, political policy coherence
leadership, IGR Forums, Proliferation of new mandates; unsustainable ‘over-reach’ of mandates
sector engagements et al – onerous and costly regulatory regime
Ineffective 2-tier system unable to deliver on its governance role
Over-complex undertakings and reporting
4. Weak oversight, Absence of clear and spatially targeted indicators for local, provincial
supervision, support, and national government
intervention mechanisms
across government
Absence of ‘early-warning system’ to alert provincial / national of
impending failure / stress / disaster
Weak Council leadership and oversight over their administrations in
the best interests of the municipality as a whole
Weak national M&E
Over-complexity in the system

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 Problem Statement Root Causes
(Symptom)
5. Contested political Unclear allocation of roles and responsibilities of the Troika
/administrative interface:
dysfunctionality and
instability
Deployment issues and interference by political parties
No clear distinctions between councils and Administrations
Unclear boundaries between political representatives and the
administration
MSA code of conduct not being enforced
Poor political management and leadership
Insufficient application of oversight function on all levels

Insufficient controls within the system

no clear framework or lack of understanding of party-municipal
relations
Poor Councillor skills base in many areas
6. Too many Nepotism
opportunities for fraud & Cronyism
corruption to take place Poor ethics
Poor values
Weak accountability frameworks
Political factionalism results in territorial economic elites
7. Break-down of local Political factionalism undermines democratic principles
democracy:

• Community
alienation:
• Break-down in social
compact: Ineffective implementation and support for provisions of Systems Act,
• Community Structures Act,
protests White paper on LG,
• Breakdown in CDW policy,
trust between Socio-economic conditions:
government and • Poverty
the people • Living conditions
• Community • Attitudes of Councillors
participation • Corruption
weak • Unrealistic expectations
• Unresponsive
government Poor adherence to Code of Conduct
Limited effectiveness of service delivery efforts, poor communication
Governance paralysis; poor support to cope
Unclear procedure for ward committees/communities to ensure issues
raised or elevated to Council agenda
Insufficient monitoring and accountability of mayors and councils

72
 Problem Statement Root Causes
(Symptom)
IDP’s not responding to community needs
8. Insufficient Performance management policy not rolled out to all levels (e.g.
institutional and councillors)
organisational
professionalism / Inability to attract skills
accountability Few incentives for attraction of skills to poorer areas
Weak controls in the system - e.g. no enforced competency
framework for officials
No accredited training frameworks for MMs and senior managers; no
mandatory registrations with professional associations
9. Irregular and un- Legal ‘space’ created where lack of regulation over Councils allowed
procedural suspensions, for unaccountable practices to flourish (MSA Amendment has created
dismissals and set of uniform procedures – ensure complied with)
disciplinary procedures
within municipalities; Systems and controls
lack of labour law Neglect of chapter 7 of the Municipal Systems Act
protection for senior Weak HRM; no oversight / accountability for decisions taken by
managers (no Collective Councils
Agreements)

Wasteful expenditure on
defending of labour
cases
Planning, LED, Service Delivery
Poor understanding of Relevance of establishment of some municipalities as independent
spatial differences of entities; institutional capacities not all sufficient to sustain services and
areas to deliver services; infrastructure development
consider value-for-
money of service
provision
Weak economic growth Lack of intergovernmental sector focus on how to develop robust local
and opportunity, economies and creating productive jobs and incomes for local
particularly in small- populations;
towns and rural areas Lack of recognition that local or regional competitive advantage rests
on local interactions, knowledge ‘spillovers’ and institutional synergies;
Weak integrative focus between PGDSs and IDPs and LED plans
Uneven response to No policy focus on extraordinary measures to address funding and
demands of rural and delivery capacity requirements
urban environments Rural municipalities challenged by existing and legacy issues re
infrastructure and economic connectivity
Uneven focus on demands of rapidly urbanising environments
Poor record of MIG Poor coordination, oversight, lack of capacity in life-cycle and
expenditure outputs infrastructure management
Community alienation Insufficient attention to ‘bottom-up’ planning and consultative
processes
Increasing backlogs Lack of a differentiated rationale for managing infrastructure

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 Problem Statement Root Causes
(Symptom)
investment and insufficient leveraging of alternative approaches to
service provision
Finance
1. Poor Audit Outcomes
Majority of municipalities Poor financial skills /capacity
have audit qualifications
and/or disclaimers Poor Financial management

Lack of financial controls

Non- standardised systems

GAMAP/GRAP implementation - too many national standards and
targets and many were unrealistic led to report fatigue and poor and
uneven responsiveness as well as officials ‘mindlessly’ trying to
comply
Weak oversight and monitoring (poor quality of in-year reporting)
insufficient record keeping

Fraud and corruption

2.Financially Non-viable
municipalities

Insufficient revenue Spatial – Poverty relationship

base/generation – i.e. the Demarcation
ratio between the
demand for services and Unfunded mandates, e.g. Maintenance of bulk infrastructure, e.g.
the revenue that can be water pipes; Health services, Library services etc.
generated is Debt collection systems e.g. Billing databases are not updated
unsustainable. Debt collection systems are not reconcilable with financial
management systems (e.g. meter reading and billing)
Two-tier system
Powers and functions – e.g. Water services provider vs Authority
Inefficient expenditure management
Mayors and municipal councils taking decisions and acting in ways
that are inconsistent with the principles of good governance and
compromised the sustainability of their municipalities’ finances
Inability to implement the Municipal Property Rates’ Act
Inability to manage Indigents’ registers
Fraud and corruption
3. Increasing Grant Top-down policy-making that placed the burden of alignment (in
dependency regard to policy, planning, budgeting and resolving powers and
functions uncertainties) to the municipal level e.g. burden of free basic
services policy
Poor IGR (Coordination): Intergovernmental Fiscal Relations
Arrangements unfair, complicated (DORA & Equitable Share, MIG)

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 Problem Statement Root Causes
(Symptom)
4. Credible budgets Budgets are not aligned to expectations for service delivery
Insufficient capacity to plan/budget correctly
Over and/or under expenditure
Labour
1. Strikes Non-adherence to labour policy
Dysfunctional Labour Forums
Local Labour Forum has very limited powers to conclude or resolve on
substantive matters. The Bargaining Council therefore impact directly
on the relationship of the parties at municipal level due to the long
delay in concluding agreements. The powers and functions of the
bargaining council structures and the Local Labour Forums need to be
addressed.
Non-standardised salary scales e.g. section 56 and 57 employees
Break-down in labour / management interface
2. Weak and insufficient The authority to appoint and dismiss Sec 56/57 employees should be
service delivery capacity reviewed.
Job specifications should standardised
Scarce skills to be addressed per national policy

The proposed Turn-Around Strategy now presents government with an unique

opportunity, together with civil society partners and stakeholders, to forge new
directions in the internal and external environments that shape local government.
COGTA welcomes contributions to the Turn-Around Strategy from all stakeholders to
strengthen existing or establish new parameters for improved, functional, effective,
efficient, responsive and well-performing municipalities.

Local Government is Everyone’s Business.

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ANNEXURE A: COGTA MUNICIPAL SPATIAL CLASSIFICATION SYSTEM

Listings of local municipalities per province according to functional classification

This municipal classification system, designed to develop municipal profiles according

to spatial location, is based upon results from the following indicator sets: functionality,
socio-economic profile, and backlog status. Its purpose is to inform a differentiated
approach to the management and governance of our municipalities across the rural and
urban landscape of the country.

The four municipal classifications developed by COGTA10 are:

Class 1: Most vulnerable (57 local municipalities)

Class 2: Second most vulnerable (58 local municipalities)
Class 3: Second highest performing (58 local municipalities)
Class 4: highest performing (58 local municipalities)

(Total: 231)11

Classification 1: Most vulnerable municipalities nationally

The municipalities found in Classification 1 are the most vulnerable local municipalities
falling within the lowest quarter nationally. The majority of the disestablished apartheid
Bantustans were previously located within these provinces.

Approximately half of the local municipalities in the Eastern Cape, KwaZulu-Natal and
Limpopo are found within the lowest percentile.

Table 1: Provincial location of the classification 1 municipalities

Province Total municipalities the category % of Municipalities in Province

Eastern Cape 18 47.4
KwaZulu-Natal 24 48.0
Limpopo 13 52.0
North West 2 9.5

10
A range of indicators were selected, weighted and ranked per municipality to develop the COGTA municipal
ranking and classification system. Data used was mainly from Stats SA, Global Insight, the MDB and National
Treasury.
11
The metropolitan municipalities will also be assessed by COGTA going forward; the 48 districts have also been
assessed.

76
 Map 1: Spatial location of the Class 1 Municipalities

Table 2: List of the 57 most vulnerable municipalities nationally

Province MDB Code Municipal Name

Eastern Cape EC121 Mbhashe Local Municipality
Eastern Cape EC137 Engcobo Local Municipality
Eastern Cape EC442 Umzimvubu Local Municipality
Eastern Cape EC152 Ntabankulu Local Municipality
Eastern Cape EC155 Nyandeni Local Municipality
Eastern Cape EC156 Mhlontlo Local Municipality
Eastern Cape EC135 Intsika Yethu Local Municipality
Eastern Cape EC441 Matatiele Local Municipality
Eastern Cape EC151 Mbizana Local Municipality
Eastern Cape EC153 Qaukeni Local Municipality
Eastern Cape EC122 Mnquma Local Municipality
Eastern Cape EC154 Port St Johns Local Municipality
Eastern Cape EC138 Sakhisizwe Local Municipality
Eastern Cape EC141 Elundini Local Municipality
Eastern Cape EC124 Amahlati Local Municipality
Eastern Cape EC136 Emalahleni Local Municipality
Eastern Cape EC126 Ngqushwa Local Municipality
Eastern Cape EC127 Nkonkobe Local Municipality
Kwa-Zulu Natal KZN242 Nquthu Local Municipality

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Province MDB Code Municipal Name
Kwa-Zulu Natal KZN244 Msinga Local Municipality
Kwa-Zulu Natal KZN265 Nongoma Local Municipality
Kwa-Zulu Natal KZN274 Hlabisa Local Municipality
Kwa-Zulu Natal KZN213 Umzumbe Local Municipality
Kwa-Zulu Natal KZN283 Ntambanana Local Municipality
Kwa-Zulu Natal KZN286 Nkandla Local Municipality
Kwa-Zulu Natal KZN294 Maphumulo Local Municipality
Kwa-Zulu Natal KZN271 Umhlabuyalingana Local Municipality
Kwa-Zulu Natal KZN236 Imbabazane Local Municipality
Kwa-Zulu Natal KZN272 Jozini Local Municipality
Kwa-Zulu Natal KZN293 Ndwedwe Local Municipality
Kwa-Zulu Natal KZN233 Indaka Local Municipality
Kwa-Zulu Natal KZN215 Ezinqoleni Local Municipality
Kwa-Zulu Natal KZN235 Okhahlamba Local Municipality
Kwa-Zulu Natal KZN261 eDumbe Local Municipality
Kwa-Zulu Natal KZN266 Ulundi Local Municipality
Kwa-Zulu Natal KZN211 Vulamehlo Local Municipality
Kwa-Zulu Natal KZN214 uMuziwabantu Local Municipality
Kwa-Zulu Natal KZN431 Ingwe Local Municipality
Kwa-Zulu Natal KZN224 Impendle Local Municipality
The Big Five False Bay Local
Kwa-Zulu Natal KZN273 Municipality
Kwa-Zulu Natal KZN435 Umzimkhulu Local Municipality
Kwa-Zulu Natal KZN262 uPhongolo Local Municipality
Limpopo LIM352 Aganang Local Municipality
Limpopo LIM355 Lepele-Nkumpi Local Municipality
Limpopo LIM342 Mutale Local Municipality
Limpopo LIM351 Blouberg Local Municipality
Limpopo LIM474 Fetakgomo Local Municipality
Limpopo LIM353 Molemole Local Municipality
Limpopo LIM475 Greater Tubatse Local Municipality
Limpopo LIM335 Maruleng Local Municipality
Limpopo LIM343 Thulamela Local Municipality
Limpopo LIM331 Greater Giyani Local Municipality
Limpopo LIM332 Greater Letaba Local Municipality
Limpopo LIM472 Elias Motsoaledi Local Municipality
Limpopo LIM473 Makhudutamaga Local Municipality
North West NW381 Ratlou Local Municipality
North West NW391 Kagisano Local Municipality

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 Classification 2: Second class of most vulnerable municipalities (58 LMs)

When examining the spatial location, the classification 2 municipalities tend to be found
in the following locations:

• Commercial farming areas with small service towns;

• Municipalities in which a portion was previously located in the disestablished

apartheid homelands;

• Semi desert areas or those with low population densities.

Table 3: location of the classification 2 municipalities by Province

Total municipalities in the category % of Municipalities in Province

Eastern Cape 10 26.3
Free State 9 45.0
KwaZulu-Natal 13 26.0
Limpopo 5 20.0
Mpumalanga 7 38.9
Northern Cape 6 22.2
North West 8 38.1

Map 2: Spatial Location of Class 2 Municipalities

(58)

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 Table 4: Listing of the classification 2 local municipalities

Province MDB Code Municipal Name

Eastern Cape EC103 Ikwezi Local Municipality
Eastern Cape EC106 Sunday's River Valley Local Municipality
Eastern Cape EC107 Baviaans Local Municipality
Eastern Cape EC123 Great Kei Local Municipality
Eastern Cape EC128 Nxuba Local Municipality
Eastern Cape EC132 Tsolwana Local Municipality
Eastern Cape EC133 Inkwanca Local Municipality
Eastern Cape EC134 Lukhanji Local Municipality
Eastern Cape EC142 Senqu Local Municipality
Eastern Cape EC157 King Sabata Dalindyebo Local Municipality
Free State FS161 Letsemeng Local Municipality
Free State FS163 Mohokare Local Municipality
Free State FS171 Naledi Local Municipality
Free State FS182 Tokologo Local Municipality
Free State FS185 Nala Local Municipality
Free State FS193 Nketoana Local Municipality
Free State FS194 Maluti a Phofung Local Municipality
Free State FS195 Phumelela Local Municipality
Free State FS205 Mafube Local Municipality
Kwa-Zulu Natal KZN221 uMshwathi Local Municipality
Kwa-Zulu Natal KZN226 Mkhambathini Local Municipality
Kwa-Zulu Natal KZN227 Richmond Local Municipality
Kwa-Zulu Natal KZN245 Umvoti Local Municipality
Kwa-Zulu Natal KZN253 eMadlangeni Local Municipality
Kwa-Zulu Natal KZN254 Dannhauser Local Municipality
Kwa-Zulu Natal KZN263 Abaqulusi Local Municipality
Kwa-Zulu Natal KZN281 Mbonambi Local Municipality
Kwa-Zulu Natal KZN284 Umlalazi Local Municipality
Kwa-Zulu Natal KZN285 Mthonjaneni Local Municipality
Kwa-Zulu Natal KZN291 Mandeni Local Municipality
Kwa-Zulu Natal KZN432 Kwa Sani Local Municipality
Kwa-Zulu Natal KZN434 Ubuhlebezwe Local Municipality
Limpopo LIM333 Greater Tzaneen Local Municipality
Limpopo LIM344 Makhado Local Municipality
Limpopo LIM362 Lephalale Local Municipality
Limpopo LIM367 Mogalakwena Local Municipality
Limpopo LIM471 Greater Marble Hall Local Municipality
Mpumalanga MP301 Albert Luthuli Local Municipality
Mpumalanga MP303 Mkhondo Local Municipality
Mpumalanga MP306 Dipaleseng Local Municipality
Mpumalanga MP315 Thembisile Local Municipality
Mpumalanga MP316 Dr J S Moroka Local Municipality
Mpumalanga MP324 Nkomazi Local Municipality
Mpumalanga MP325 Bushbuckridge Local Municipality
Northern Cape NC072 Umsobomvu Local Municipality

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Province MDB Code Municipal Name
Northern Cape NC075 Renosterberg Local Municipality
Northern Cape NC078 Siyancuma Local Municipality
Northern Cape NC081 Mier Local Municipality
Northern Cape NC093 Magareng Local Municipality
Northern Cape NC451 Moshaweng Local Municipality
North West NW371 Moretele Local Municipality
North West NW375 Moses Kotane Local Municipality
North West NW382 Tswaing Local Municipality
North West NW383 Mafikeng Local Municipality
North West NW384 Ditsobotla Local Municipality
North West NW385 Ramotshere Moiloa Local Municipality
North West NW394 Greater Taung Local Municipality
North West NW395 Molopo Local Municipality

Classification 3: Second most highly performing (58 LMs)

The municipalities found in Classification 3 are the second highest performing group of
municipalities. The majority of these municipalities fall outside of the disestablished
apartheid Bantustans. These municipalities tend to contain:

• commercial farming areas supported by small towns;

• the smaller mining towns, and or

• semi desert areas.

More than a third of the local municipalities in the Free State, North West and the
Northern Cape are found within this quartile.

Table 5: Location of the classification 3 municipalities by Province

Province Total municipalities in the category % of Municipalities in Province

Eastern Cape 3 7.9
Free State 9 45.0
Gauteng 1 12.5
KwaZulu-Natal 9 18.0
Limpopo 5 20.0
Mpumalanga 5 27.8
Northern Cape 14 51.9
North West 9 42.9
Western Cape 3 12.5

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 Map 3: Location of Classification 3 Municipalities

Table 6: List of the classification 3 local municipalities (58)

Province MDB Code Municipal Name

Eastern Cape EC102 Blue Crane Route Local Municipality
Eastern Cape EC143 Maletswai Local Municipality
Eastern Cape EC144 Gariep Local Municipality
Free State FS162 Kopanong Local Municipality
Free State FS173 Mantsopa Local Municipality
Free State FS181 Masilonyana Local Municipality
Free State FS183 Tswelopele Local Municipality
Free State FS184 Matjhabeng Local Municipality
Free State FS191 Setsoto Local Municipality
Free State FS192 Dihlabeng Local Municipality
Free State FS201 Moqhaka Local Municipality
Free State FS203 Ngwathe Local Municipality
Gauteng GT461 Nokeng tsa Taemane Local Municipality
Kwa-Zulu Natal KZN212 uMdoni Local Municipality
Kwa-Zulu Natal KZN216 Hibiscus Coast Local Municipality
Kwa-Zulu Natal KZN223 Mooi Mpofana Local Municipality
Kwa-Zulu Natal KZN232 Emnambithi-Ladysmith Local Municipality
Kwa-Zulu Natal KZN234 Umtshezi Local Municipality
Kwa-Zulu Natal KZN241 Endumeni Local Municipality
Kwa-Zulu Natal KZN252 Newcastle Local Municipality
Kwa-Zulu Natal KZN275 Mtubatuba Local Municipality
Kwa-Zulu Natal KZN433 Greater Kokstad Local Municipality

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Province MDB Code Municipal Name
Limpopo LIM334 Ba-Phalaborwa Local Municipality
Limpopo LIM341 Musina Local Municipality
Limpopo LIM354 Polokwane Local Municipality
Limpopo LIM361 Thabazimbi Local Municipality
Limpopo LIM365 Modimolle Local Municipality
Mpumalanga MP302 Msukaligwa Local Municipality
Mpumalanga MP304 Pixley Ka Seme Local Municipality
Mpumalanga MP305 Local Municipality of Lekwa
Mpumalanga MP311 Delmas Local Municipality
Mpumalanga MP322 Mbombela Local Municipality
Northern Cape NC064 Kamiesberg Local Municipality
Northern Cape NC065 Hantam Local Municipality
Northern Cape NC066 Karoo Hoogland Local Municipality
Northern Cape NC067 Khai-Ma Local Municipality
Northern Cape NC071 Ubuntu Local Municipality
Northern Cape NC073 Enthanjeni Local Municipality
Northern Cape NC074 Kareeberg Local Municipality
Northern Cape NC076 Thembelihle Local Municipality
Northern Cape NC077 Siyathemba Local Municipality
Northern Cape NC084 !Kheis Local Municipality
Northern Cape NC085 Tsantsabane Local Municipality
Northern Cape NC092 Dikgatlong Local Municipality
Northern Cape NC094 Phokwane Local Municipality
Northern Cape NC452 Ga-Segonyana Local Municipality
North West NW372 Local Municipality of Madibeng
North West NW374 Kgetlengrivier Local Municipality
North West NW392 Naledi Local Municipality
North West NW393 Mamusa Local Municipality
North West NW396 Lekwa-Teemane Local Municipality
North West NW401 Ventersdorp Local Municipality
North West NW402 Potchefstroom Local Municipality
North West NW403 City of Matlosana Municipality
North West NW404 Maquassi Hills Local Municipality
Western Cape WC041 Kannaland Local Municipality
Western Cape WC051 Laingsburg Local Municipality
Western Cape WC052 Prince Albert Local Municipality

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 Class 4: Highest Performing LMs (58)

The municipalities found in Classification 4 are the best performing group of local
municipalities nationally. Almost all of these municipalities fall outside of the
disestablished apartheid Bantustans. Rather, these municipalities tend to contain:

• Highly urbanized communities;

• Large urban centres,

• Mining towns, and or

• semi desert areas.

More than 80% of the local municipalities in Gauteng and the Western Cape are found
within this quartile.

Table 7: Location of the classification 4 municipalities by Province

Province Total municipalities in the category % of Municipalities in Province

Eastern Cape 7 18.4
Free State 2 10.0
Gauteng 7 87.5
KwaZulu-Natal 4 8.0
Limpopo 2 8.0
Mpumalanga 6 33.3
Northern Cape 7 25.9
North West 2 9.5
Western Cape 21 87.5

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 Map 4: Spatial Location of Class 4 Local Municipalities

Table 8: listing of classification 4 local municipalities

Province MDB Code Municipal Name

Eastern Cape EC101 Camdeboo Local Municipality
Eastern Cape EC104 Makana Local Municipality
Eastern Cape EC105 Ndlambe Local Municipality
Eastern Cape EC108 Kouga Local Municipality
Eastern Cape EC109 Kou-Kamma Local Municipality
Eastern Cape EC125 Buffalo City Local Municipality
Eastern Cape EC131 Inxuba Yethemba Local Municipality
Free State FS172 Mangaung Local Municipality
Free State FS204 Metsimaholo Local Municipality
Gauteng GT421 Emfuleni Local Municipality
Gauteng GT422 Midvaal Local Municipality
Gauteng GT423 Lesedi Local Municipality
Gauteng GT462 Kungwini Local Municipality
Gauteng GT481 Mogale City Local Municipality
Gauteng GT482 Randfontein Local Municipality
Gauteng GT483 Westonaria Local Municipality
Kwa-Zulu Natal KZN222 uMngeni Local Municipality
Kwa-Zulu Natal KZN225 The Msunduzi Local Municipality

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Province MDB Code Municipal Name
Kwa-Zulu Natal KZN282 uMhlathuze Local Municipality
Kwa-Zulu Natal KZN292 The KwaDukuza Local Municipality
Limpopo LIM364 Mookgopong Local Municipality
Limpopo LIM366 Bela Bela Local Municipality
Mpumalanga MP307 Govan Mbeki Local Municipality
Mpumalanga MP312 Emalahleni Local Municipality
Mpumalanga MP313 Steve Tshwete Local Municipality
Mpumalanga MP314 Emakhazeni Local Municipality
Mpumalanga MP321 Thaba Chweu Local Municipality
Mpumalanga MP323 Umjindi Local Municipality
Northern Cape NC061 Richtersveld Local Municipality
Northern Cape NC062 Nama Khoi Local Municipality
Northern Cape NC082 !Kai! Garib Local Municipality
Northern Cape NC083 Khara Hais Local Municipality
Northern Cape NC086 Kgatelopele Local Municipality
Northern Cape NC091 Sol Plaatjie Local Municipality
Northern Cape NC453 Gamagara Local Municipality
North West NW373 Rustenburg Local Municipality
North West NW405 Merafong City Local Municipality
Western Cape WC011 Matzikama Local Municipality
Western Cape WC012 Cederberg Local Municipality
Western Cape WC013 Bergrivier Local Municipality
Western Cape WC014 Saldanha Bay Local Municipality
Western Cape WC015 Swartland Local Municipality
Western Cape WC022 Witzenberg Local Municipality
Western Cape WC023 Drakenstein Local Municipality
Western Cape WC024 Stellenbosch Local Municipality
Western Cape WC025 Breede Valley Local Municipality
Western Cape WC026 Breede River/Winelands Local Municipality
Western Cape WC031 Theewaterskloof Local Municipality
Western Cape WC032 Overstrand Local Municipality
Western Cape WC033 Cape Agulhas Local Municipality
Western Cape WC034 Swellendam Local Municipality
Western Cape WC042 Hessequa Local Municipality
Western Cape WC043 Mossel Bay Local Municipality
Western Cape WC044 George Local Municipality
Western Cape WC045 Oudtshoorn Local Municipality
Western Cape WC047 Bitou Local Municipality
Western Cape WC048 Knysna Local Municipality
Western Cape WC053 Beaufort West Local Municipality

Further research is being undertaken by COGTA to verify this classification system, and
test for anomalies and differences within the categories.

The system is intended to support a range of governance, policy and institutional

reforms that will be supporting the Turn-Around Strategy over the longer-term.

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The table below reflects the most poorly performing local municipalities from a purely
financial indicator-based assessment, and is the work of National Treasury.

ANNEXURE B: National Treasury: 64 Municipalities on Distress List

National Treasury reported in June 2009 to the Technical Committee for Finance that
the following municipalities are on their financial distress list:

Fiscal Financial
MDB Name of Capacity Distress Audit Outcomes
Code Municipality List List List
EC133 Inkwanca Yes Yes adverse opinion
EC136 Emalahleni (Ec) Yes -

EC138 Sakhisizwe Yes Yes adverse opinion

EC141 Elundini Yes Yes -
FS162 Kopanong Yes disclaimer
FS163 Mohokare Yes Yes -

FS171 Naledi (Fs) Yes disclaimer

FS181 Masilonyana Yes Yes disclaimer
FS182 Tokologo Yes Yes -
FS183 Tswelopele Yes -
FS185 Nala Yes -
FS194 Maluti-a-Phofung Yes disclaimer

FS195 Phumelela Yes Yes -

FS203 Ngwathe Yes disclaimer
GT483 Westonaria Yes -
KZ212 Umdoni Yes -
KZ261 eDumbe Yes disclaimer
KZ272 Jozini Yes -
KZ281 Mbonambi Yes disclaimer
MP301 Albert Luthuli Yes Yes -
MP321 Thaba Chweu
Yes
-
MP323 Umjindi Yes -
MP325 Bushbuckridge Yes -
NC061 Richtersveld Yes -
NC065 Hantam Yes disclaimer
NC073 Emthanjeni Yes disclaimer
NC074 Kareeberg Yes -

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NC075 Renosterberg Yes disclaimer
NC077 Siyathemba Yes disclaimer
NC078 Siyancuma Yes disclaimer
NC082 !Kai! Garib Yes -
NC085 Tsantsabane Yes disclaimer
NC092 Dikgatlong Yes disclaimer
NP343 Thulamela Yes disclaimer
NP361 Thabazimbi Yes disclaimer
NP367 Mogalakwena Yes -
NW371 Moretele Yes disclaimer
NW374 Kgetlengrivier Yes -
NW391 Kagisano Yes Yes -
NW401 Ventersdorp Yes Yes disclaimer
NW404 Maquassi Hills Yes -
WC031 Theewaterskloof Yes -
WC041 Kannaland Yes disclaimer
WC043 Mossel Bay Yes -
WC053 Beaufort West Yes -
DC15 O .R. Tambo Yes Yes disclaimer
DC2 Cape Winelands DM Yes -
DC27 Umkhanyakude Yes Yes disclaimer
DC29 iLembe Yes -
DC31 Nkangala Yes -
DC33 Mopani Yes Yes disclaimer
DC46 Metsweding Yes -
DC6 Namakwa Yes -

FS184 Matjhabeng Yes disclaimer

KZ252 Newcastle Yes -
MP312 Emalahleni (Mp) Yes -
NW372 Madibeng Yes adverse opinion
EC102 Blue Crane Route Yes -
EC103 Ikwezi Yes -
EC104 Makana Yes adverse opinion
EC106 Sundays River Valley Yes disclaimer
EC107 Baviaans Yes -
EC109 Koukamma Yes -
EC122 Mnquma Yes Yes adverse opinion

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COGTA is currently working on the spatial application of these municipalities within
provinces, their correlation with COGTA findings for distress and vulnerability, and the
relationship of the National Treasury ‘distress’ indicators to those of the department and
other sources.

Ends

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