SECTION D: HUMAN RESOURCE MANAGEMENT HUMAN RESOURCE MANAGEMENT INTRODUCTION HUMAN RESOURCES OVERSIGHT STATISTICS...

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4 TABLE OF CONTENTS SECTION A: GENERAL INFORMATION DEPARTMENT S GENERAL INFORMATION LIST OF ABBREVIATIONS/ACRONYMS FOREWORD BY MEC OF THE DEPARTMENT REPORT BY THE ACCOUNTING OFFICER STATEMENT OF RESPONSIBILITY AND CONFIRMATION OF THE ACCURACY OF THE ANNUAL REPORT STRATEGIC OVERVIEW LEGISLATIVE AND OTHER MANDATES ORGANISATIONAL STRUCTURE AS AT 31 MARCH SECTION B: PERFORMANCE INFORMATION PERFORMANCE INFORMATION AUDITOR GENERAL S REPORT: PREDETERMINED OBJECTIVES OVERVIEW OF DEPARTMENTAL PERFORMANCE STRATEGIC OUTCOME ORIENTATED GOAL EXPLANATORY NOTES TO THE PERFORMANCE REPORT.. 31 PROGRAMME 1: ADMINISTRATION PROGRAMME 2: LOCAL GOVERNANCE PROGRAMME 3: DEVELOPMENT AND PLANNING PROGRAMME 4: TRADITIONAL INSTITUTION MANAGEMENT PROGRAMME 5: HOUSE OF TRADITIONAL LEADERS TRANSFER PAYMENTS CONDITIONAL GRANTS DONOR FUNDS CAPITAL INVESTMENT. 58 SECTION C: GOVERNANCE GOVERNANCE INTRODUCTION RISK MANAGEMENT FRAUD AND CORRUPTION MINIMISING CONFLICT OF INTEREST CODE OF CONDUCT HEALTH SAFETY AND ENVIRNMENTAL ISSUES PORTFOLIO COMMITTEES SCOPA RESOLUTIONS PRIOR MODIFICATIONS TO AUDIT REPORTS INTERNAL CONTROL UNIT INTERNAL AUDIT AND AUDIT COMMITTEES SECTION D: HUMAN RESOURCE MANAGEMENT HUMAN RESOURCE MANAGEMENT INTRODUCTION HUMAN RESOURCES OVERSIGHT STATISTICS SECTION E: FINANCIAL INFORMATION REPORT OF THE AUDITOR-GENERAL TO THE EASTERN CAPE PROVINCIAL LEGISLATURE ON VOTE NO 7. DEPARTMENT DEPARTMENT OF COOPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS VOTE 7 ANNUAL FINANCIAL STATEMENTS APPROPRIATION STATEMENT NOTES TO THE APPROPRIATION STATEMENT STATEMENT OF FINANCIAL PERFORMANCE STATEMENT OF FINANCIAL POSITION CASH FLOW STATEMENT ACCOUNTING POLICIES NOTES TO THE ANNUAL FINANCIAL STATEMENTS (INCLUDING ACCOUNTING POLICIES) ANNEXURES

5 I have the honour of submitting the Annual Report of the Department of Cooperative Governance and Traditional Affairs for the period 1 April 2015 to 31 March 2016 Ms. N. Mosehana Head of Department Department of Cooperative Governance and Traditional Affairs Date: 29 August 2016 Honourable F.D. Xasa (MPL) MEC for Cooperative Governance and Traditional Affairs Date: 29 August

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7 1.1 DEPARTMENT S GENERAL INFORMATION OFFICE OF THE MEC Tyamzashe Building Phalo Avenue Private Bag x 0026 Bhisho 5605 Eastern Cape REPUBLIC OF SOUTH AFRICA Tel: +27 (0) Fax: +27 (0) linda.sigwili@eccogta.gov.za OFFICE OF THE HEAD of DEPARTMENT Tyamzashe Building Phalo Avenue Private Bag x 0035 Bhisho 5605 Eastern Cape REPUBLIC OF SOUTH AFRICA Tel: +27 (0) /58 Fax: +27 (0) peters.marge@eccogta.gov.za WEBSITE: 6

8 1.2 LIST OF ABBREVIATIONS/ACRONYMS AO AFS AG APP ASGI-SA BAS BBBEE BCMM CDWs CEO CHDM COIDA CWP DBSA DCF DCOG DIMAFO DM DORA DPSA DR&PW DWIF EAP ECLGICT EDMS EE EH EHWP EPWP FBS GAMAP GPSSBC GRAP GTZ HCT HDIs HRDC HRM ICASA ICT IDP IEC IEW IGR ISD ISRDP IYA IYM JIPSA KPA LED LGCS Accounting Officer Annual Financial Statements Auditor General Annual Performance Plan Accelerated and Shared Growth Initiative of South Africa Basic Accounting System Broad Based Black Economic Empowerment Buffalo City Metropolitan Municipality Community Development Workers Chief Executive Officer Chris Hani District Municipality Compensation for Occupational Injuries and Diseases Act Community Work Programme Development Bank of Southern Africa District Coordinating Forum Department of Co-operative Governance District Mayoral Forum District Municipality Division of Revenue Act Department of Public Service and Administration Department of Roads and Public Works District Wide Infrastructure Forum Employee Assistance Programme Eastern Cape Local Government Information Communication Technology Electronic Document Management System Employment Equity Employee Health Employee Health and Wellness Programme Expanded Public Works Programme Free Basic Services General Accepted Municipal Accounting Practices General Public Service Sectoral Bargaining Council General Recognized Accounting Practices German Technical Support HIV and AIDS Counselling and Testing Historically Disadvantaged Individuals Human Resource Development Committee Human Resources Management Independent Communications Authority of South Africa Information and Communication Technology Integrated Development Plan Independent Electoral Commission Integrated Employee Wellness Inter-Governmental Relations Institutional Social Development Integrated Sustainable Rural Development Programme Imbumba Yamakhosikazi Akomkhulu In-Year Monitoring Joint Initiative on Priority Skills Acquisition Key Performance Area Local Economic Development Local Government Communication Systems 7

9 LGTAS Local Government Turn Around Strategy LG SETA Local Government Sector Education Training Authority LM Local Municipality LRA Labour Relations Act, 1995 (Act 66 of 1995) MDB Municipal Demarcation Board MEC Member of Executive Council MER Monitoring, Evaluation and Reporting MFMA Municipal Finance Management Act MIG Municipal Infrastructure Grant MPAC Municipal Public Accounts Committee MPAT Management Performance Assessment Tool MPRA Municipal Property Rates Act MTEF Medium Term Framework MUTAS Municipal Turn Around Strategies NDMC National Disaster Management Centre NDP National Development Plan NMBM Nelson Mandela Bay Municipality NSDF National Spatial Development Framework OBA Outcomes Based Approach OCA Operation Clean Audit OHS Occupational Health and Safety ORT DM O R Tambo District Municipality OSD Occupation-Specific Dispensation OTP Office of the Premier PAC Public Accounts Committees PAIA Promotion of Access to Information Act, 2000 (Act 2 of 2000) PAJA Promotion of Administrative Justice Act, 2000 (Act 3 of 2000) PCC Presidential Coordinating Council PCF Premier's Coordinating Forum PDMC Provincial Disaster Management Centre PEC Provincial Executive Committee PFMA Public Finance Management Act PCLG Provincial Committees for Local Government PGDP Provincial Growth & Development Plan PHOTL Provincial House of Traditional Leaders PILLIR Policy on Ill Health and Incapacity Retirements PMDS Performance Management and Development System PMS Performance Management System PSCBC Public Service Coordinating Bargaining Council PSDP Provincial Spatial Development Plan RMU Revenue Management Unit SALGA South African Local Government Association SCM Supply Chain Management SCMU Supply Chain Management Unit SDBIP Service Delivery and Budget Implementation Plan SDIP Service Delivery Improvement Plan SHE Safety Health Environment SLA Service Level Agreement SMS Senior Management Service SP Strategic Plan UNDP United Nations Development Programme URP Urban Renewal Programme WP Wellness Programme WSP Water Services Provider 8

10 1.3 FOREWORD BY MEC OF THE DEPARTMENT The financial year 2015/2016 has come to an end hence the compilation of our departmental Annual Report to account for our expenditure of the R million budget allocation. In the financial year under review we declared Local Government Everyone s Responsibility hence we committed our human and financial resources towards making it work. Our work was geared towards ensuring that we live the Vision of our department which is to become an integrated, capable, responsive and accountable local government and traditional institution system focussing on the needs of the community. We have noted that the Department spent 99% of its allocation with a rollover of unspent funds amounting to R5, 477 million. In the current financial year we would like to implore our officials to exhaust their budget allocations as planned and avoid under expenditure which leads to rollovers. The delivery of quality services should always be our priority to minimise the levels of frustration and agitation from the intended beneficiary communities. We should focus on strengthening the hosting departmental Quarterly Review sessions to measure performance and plan interventions to mitigate challenges. We should also lift best practices for quick implementation across the department and in municipalities. Notwithstanding the challenges we encountered in the implementation of our programme, work in the construction of the Amandela and Lindinxiwa Traditional Councils has been completed. In this report we also reflect on the progress we have made in the implementation of the five (5) Pillars of the Back to Basics Programme (B2B) to serve our communities better. Building on the progress we have made thus far, currently we are implementing the B2B Ten Point Plan to consolidate our gains further. The B2B programme continues to be our guide towards the amalgamation of the new municipalities to discharge their responsibilities post the 03 August 2016 Local Government Elections. Going forward, as a Department that co-ordinates the delivery of services to local municipalities and Traditional Leadership Institutions, let us use Operation Masiphathisane as a guide to action for integrated delivery of services. Local Government is in our hands. Together creating better communities. MEC F.D. XASA DEPARTMENT OF CO-OPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS 29 AUGUST

11 1.4 REPORT BY THE ACCOUNTING OFFICER In the year under review our Department continued to live up to its mandate of providing support to municipalities and Traditional Leadership Institutions to serve our communities better. The Department operated within a limited budget, nonetheless was able to achieve its set targets and hence the improved compliance and performance in municipalities and Traditional Leadership Institutions. Our Department continues to play its part towards the alleviation of the triple challenges of unemployment, poverty and inequality in the Eastern Cape communities. We also restored the dignity of our traditional leaders through the construction and renovation of Traditional Councils as well as the installation of traditional leaders in various rural communities of the Province. Our department in partnership with the three spheres of government and the Xhosa Royal Family hosted the coronation ceremony of high standard for King Mpendulo Sigcawu at his Nqadu Great Place in May The coronation was the first of its kind in a democratic South Africa. Learning from this event, the Department will develop guidelines for the installation of other Traditional Leaders below King. The construction of the Amandela and Lindinxiwa Traditional Councils has reached completion stage and will soon be handed over to the Department. The renovation of Amadiba and Amagqunukwebe Traditional Councils is practically completed and ready for hand over to the respective communities. In striving to deal with the escalation of initiation related deaths, our Department hosted the Manhood Summit in the OR Tambo District Municipality. The summit was a platform to exchange ideas and converse with young people and key stakeholders including parents, Traditional Leaders, tradition surgeons and nurses around the meaning of ubudoda (manhood). The outcomes of the Manhood Summit, amongst other things, was the strengthening and establishment of Initiation Forums at all levels. The Department also co-ordinated the implementation of the Back to Basics programme (B2B) in all municipalities, particularly focusing on the sixteen (16) priority municipalities for medium and intense support. The B2B programme is intended to serve our communities better through the implementation of the five (5) pillars, namely Putting People and their Concerns First, Good Governance, Basic Service Delivery, Financial Management and Building Institutional Capacity. In the year under review, five hundred and seven (507) Ward Profiles were developed with the assistance of Community Development Workers (CDWs) for planning purposes. We extended support to thirty two (32) municipalities to ensure functional Ward Committees. Twenty five (25) municipalities were supported with community participation and citizen empowerment partnership programmes. We supported municipalities to improve response time to petitions to curb violent service delivery protests in the Province. Good governance in municipalities and Traditional Leadership Institutions is essential in complying with legislation and the enforcement of by-laws. In this regard, we assessed forty four (44) municipalities for compliance with the relevant legislation governing municipal administration. The Department assisted municipalities with the functionality of oversight structures including Audit Committees, Municipal Public Accounts Committees (MPAC) and Intergovernmental Forums (IGR). We supported twenty nine (29) municipalities to have functional IGR structures; the functionality of the Municipal Public Accounts Committees was monitored in 44 municipalities; audit committees and internal audit units remained intact in the 45 municipalities and the Audit Improvement Plans were assessed for adequacy in all 45 municipalities. The Department conducted awareness sessions on the Anti-Corruption Policy, Whistleblowing and the Prohibition of Trade of Government Employees with government. The Anti-Corruption Strategy was also rolled out to municipalities. Progress is been made to deal with twenty (20) cases of reported fraud, corruption and maladministration in the Departrment. 10

12 The report card in relation to Section 139 (1) (b) intervention is as follows; In Makana Local Municipality an external Administrator was appointed for six months. Later on her appointment was extended for another six months. From August 2015 to date a Departmental official has been appointed to act as an Administrator. Both Administrators have been assisted by officials from Provincial Treasury including the Chief Financial Officer (CFO). The Makana Local Municipality has also been assisted towards the payment of its creditors including Eskom. The Administrator facilitated the development of the Financial Recovery Plan (FRP) which was later approved by the Municipal Council. In Inkwanca Local Municipality, an Administrator was appointed for six months. He facilitated the process of hosting by-elections. After the elections, in an attempt to stabilize the Municipality the Department seconded five (5) officials namely as Acting Municipal Manager, CFO, Corporate Services Manager, Supply Chain Manager and Internal Audit Manager. In the KSD Local Municipality we seconded three (3) officials to assist as an Acting Municipal Manager, Internal Auditor and Contracts Manager. On amalgamation of small and unviable municipalities, we can report that good progress was made with the establishment of the Political and Technical Change Management Committees (CMC). The Technical CMC has the responsibility of auditing available resources in the municipalities. Thus far new names and seats of the new municipalities have been proposed and approved as follows; Nkonkobe and Inxuba the name is Raymond Mhlaba with a seat in Alice, Lukhanji, Inkwanca and Tsolwana with Enoch Mgijima as the proposed name with the seat in Queenstown, Gariep and Maletswai with Walter Sisulu as the proposed name with a seat in Burgersdorp and for Camdeboo, Ikwezi and Baviaans the proposed name is Dr Beyers Naude with a seat in Graaff-Reinet. With regards to Information Communication Technology (ICT) and access to government services, four (4) local municipalities (Matatiele, Sundays River Valley, Sakhisizwe and Inkwanca) were assisted in the development and review of ICT policies. Further assistance was given to the Sundays River Valley Local Municipality on ICT Charter. Emalahleni Local Municipality was assisted on the development of its Website. During the 2015/16 financial year, the Department coordinated support for the Local Economic Development (LED) programmes in municipalities to address unemployment. As a result, Community Work Programme (CWP) and 221 Expanded Work Programme (EPWP) jobs were created across the Province thereby boosting the economy. This is intended to ensure that all municipalities benefit from the CWP programme. The Spatial Planning Land Use Management Act (SPLUMA) articulates the development principles of social justice, resilience and sustainability hence these must inform our development processes going forward. The Department assisted Municipalities to build capacity towards the implementation of SPLUMA through workshops and training sessions focusing on the practitioners, ie, Town Planners and Land Administrators. The scourge of drought is affecting the Province negatively and the newly built Provincial Disaster Management Centre (PDMC) has become the nerve centre to coordinate disaster situations. As a result, all five (5) District Municipalities affected by drought namely Joe Gqabi, Chris Hani, Alfred Nzo, Amathole and OR Tambo have already declared local states of disaster in their areas respectively. They have also compiled Business Plans and submitted those to the PDMC which in turn has completed the pre-classification of drought in the affected areas. The classification of the declared disaster areas by the National Disaster Management Centre (NDMC) is currently underway in various parts of the affected areas. A Provincial Gazette has been issued on the drought disaster to assist the respective communities with relief measures. The Local Government Elections (LGE) took place on 03 August The Provincial Election Technical Support Team (PETST) was established to ensure successful elections through the construction of road infrastructure to inaccessible Voting Stations. An amount of R13 million was allocated in this regard. 11

13 OVERVIEW OF THE FINANCIAL RESULTS OF THE DEPARTMENT 2015/ /2015 Department Receipts Estimate Amount Collected (Over) Under Collection Estimate Amount Collected (Over) Under Collection Sale of goods and services other than capital assets Interest 5-5 R 000 R 000 R 000 R 000 R 000 R Financial Transaction in assets and liabilities Total The Department of Cooperative Governance and Traditional Affairs is not a revenue generating Department and all collections are attributed to the sale of tenders, garnishee orders and commission earned from insurance deductions. The over collection on financial assets is due to repayment of debts by employees and other departments relating to previous years, obtained throughout the year. Income received was surrendered to the Provincial Revenue Fund on a monthly basis as required by the Public Financial Management Act (Act 1 of 2009 as amended). DEPARTMENTAL SUMMARY Programme Name 2015/ /2015 (Over) Under (Over) Under R 000 R 000 R 000 R 000 R 000 R 000 Administration Local Governance Development and Planning Traditional Institutional Management House of Traditional Leaders Total Member Remuneration Total Department has spent 99.3% of its allocated budget of R million. An application for a rollover of unspent funds amounting to R5.477 million has been submitted to Provincial Planning and Treasury for consideration. 12

14 PERCENTAGE SPENDING PER PROGRAMME 99,0% 99,5% 99,8% 99,6% 97,4% Administration Local Governance Development and Planning Traditional Institutional Management House of Traditional Leaders 2015/2016 Departmental Summary per Economic Classification Economic Classification (Over) Under % Spent R 000 R 000 R 000 Compensation of Employees % Goods & Services % Payment for Financial Assets Transfers & Subsidies % Interest & Rent of Land Payment for Capital Assets % Total % COMPENSATION OF EMPLOYEES The Department has spent 100 % of the total COE budget amounting to R million. GOODS & SERVICES 98.2 % of the Goods and Services budget has been expended. Of the R1.824 million that was not spent at year end, R0.689 million was committed. An application for the roll over amounting to R0.426 million has been requested and the amount relates to the procurement of office equipment which was delivered after the year end. TRANSFERS AND SUBSIDIES R2.917 million relating to the Chris Hani Water and Sanitation Project and Amalgamation Process was not spent at year end due to the delays in the implementation of the projects, receipt of necessary documents required to process the payment and the effect of the cash shortfall at year end contributed to the under-expenditure. This resulted to 97.9% being spent at year end. CAPITAL ASSETS The Department spent 90.1% of the total allocation on Capital Assets. The unspent funds relates to the late delivery of office furniture and equipment and the late awarding coupled with cash flow problems encountered by the contractor responsible for the construction of the Traditional Councils resulting in the non-completion of the projects. The defects in the Provincial Disaster Management Centre resulted in the final payment not being processed on time. 13

15 PROGRAMME ONE Departmental Receipts 2015/ /2015 (Over)Under (Over)Under R 000 R 000 R 000 R 000 R 000 R 000 Compensation of Employees Goods & Services Transfers & Subsidies Interest & Rent of Land Payment for Capital Assets Payments for fundamental assets Total Programme One has spent 99.0% of the total allocated budget excluding the remuneration of the Executive Authority. 100% was spent on Compensation of Employees, 98% Goods and Services, 99.5% Transfers and Subsidies and 88% on Capital Assets. The under expenditure of R1.125 million on Goods and Service relates to accruals and commitments relating to travelling claims, minor assets which were not delivered as expected. An under expenditure of R1.296 million on Capital Assets in the programme is due to the late delivery of furniture and equipment which were expected to have been delivered and paid at year end. PROGRAMME TWO 2015/ /2015 Local Governance (Over)Under (Over)Under R 000 R 000 R 000 R 000 R 000 R 000 Compensation of Employees Goods & Services Transfers & Subsidies Payment for Capital Assets Total The Programme has spent 99.6% of the budget of the appropriated budget of which 99.9 % was spent on Compensation of Employees, 98.8% on Goods and Services, 99.1% on Transfers and Subsidies and 33.3% spent on Capital Assets. The under expenditure which is mainly on Transfers and Subsidies emanated from the non-payment of the Amalgamation Process related costs which were expected to be transferred to municipalities to reimburse them for costs incurred as agreed with the Department. 14

16 PROGRAMME THREE Development and Planning 2015/ /2015 (Over)Under (Over)Under R 000 R 000 R 000 R 000 R 000 R 000 Compensation of Employees Goods & Services Payment for Financial Assets Transfers & Subsidies Payment for Capital Assets Total The Programme has spent 97.4% of the budget of the appropriated budget of which 99.7% was spent on Compensation of Employees, 97.2% on Goods and Services, 90.4% on Transfers and Subsidies and 90.4% on Capital Assets. R1.917 million not spent on Transfers and Subsidies relates to the Chris Hani Water and Sanitation. Payments could not be processed timeously due to slow progress on site and the effect of the cash shortfall at year end. The under expenditure of R0.827 million on Capital Assets relates to the non-payment of the final payment of the construction of the Provincial Disaster Management Centre due to defects in the building. PROGRAMME FOUR Traditional Institutional Management 2015/ /2015 (Over)Under (Over)Under R 000 R 000 R 000 R 000 R 000 R 000 Compensation of Employees Goods & Services Transfers & Subsidies Interest & Rent of Land Payment for Capital Assets Total The Programme spent 99.8% of the total allocation of which 100% is on Compensation of Employees, 98.5% on Goods and Services, 99.7% on Transfers and Subsidies and 93.4% on Capital Assets. The major contributor to the under expenditure of R0.562 million relates to R0.369 million not spent at year end due to the slow progress in the construction of Traditional Councils. 15

17 PROGRAMME FIVE House of Traditional Leaders 2015/ /2015 (Over) Under (Over) Under R 000 R 000 R 000 R 000 R 000 R 000 Compensation of Employees Goods & Services Payment for Capital Assets Total The programme has spent 99.5% of the total voted funds. Of the total distribution of funds, 100% was spent of Compensation of Employees, 98.7% on Goods and Services and 100% on Capital Assets. The unspent funds amounting to R0.125 million are commitments made on minor items which could not be finalised at the year end. ROLL- OVERS During the 2015/16 Financial Year the Department received a roll-over amounting to R3.966 million, R1.118 for the payment of SITA related charges, R1.6 million for the Vehicles of Kings, R0.157 million for leave gratuities and R1.060 for financial systems aimed at assisting struggling municipalities. Ms. N. Mosehana Head of Department Department of Cooperative Governance and Traditional Affairs Date: 29 August

18 1.5 STATEMENT OF RESPONSIBILITY AND CONFIRMATION OF THE ACCURACY OF THE ANNUAL REPORT To the best of my knowledge and belief, I confirm the following: All information and amounts disclosed throughout the Annual Report are consistent. The Annual Report is complete, accurate and is free from any omissions. The Annual Report has been prepared in accordance with the guidelines on the Annual Report as issued by National Treasury. The Annual Financial Statements (Section E) have been prepared in accordance with the Modified Cash Standard and the relevant frameworks and guidelines issued by the National Treasury. The Accounting Officer is responsible for the preparation of the Annual Financial Statements and for the judgements made in this information. The Accounting Officer is responsible for establishing, and implementing a system of internal control that has been designed to provide reasonable assurance as to the integrity and reliability of the performance information, the human resources information and the Annual Financial Statements. The External Auditors are engaged to express an independent opinion on the Annual Financial Statements. In my opinion, the Annual Report fairly reflects the operations, the performance information, the human resources information and the financial affairs of the Department for the Financial Year ended 31 March Ms. N. Mosehana Head of Department Department of Cooperative Governance and Traditional Affairs Date: 29 August

19 1.6 STRATEGIC OVERVIEW Vision An integrated, capable, responsive and accountable local government and traditional institution system focusing on the needs of the community Mission To promote a developmental local state and traditional institutions that are accountable, focused on citizen s priorities; capable of delivering high-quality services consistently and sustainably through Local Government and participatory democracy Values Our values are people orientated and are based on the Batho Pele Principles. Consultation We always consult our customers on the level, quality and choices of the services we offer. Quality We set high standards geared towards effective and efficient services delivery. Equality We shall give equal access to our services to all, with special emphasis on targeted groups. Professionalism We believe that our customers are entitled to be treated courteously and with the highest level of professionalism. Highest ethical standards We shall always maintain zero tolerance towards fraud and corruption. Staff our greatest assets We believe that our employees are integral to the success of the Department and we will at all times endeavor to ensure that their organizational needs are satisfied. Responsiveness We pledge to respond speedily and effectively to the needs of stakeholders and communities. 1.7 LEGISLATIVE AND OTHER MANDATES Constitutional Mandates The Constitution of South Africa, 1996 as amended provides the national overarching framework for the functionality of all Government Departments in South Africa. Chapter 7 outlines the objectives and mandates in respect of Local Government, as the following: To establish municipalities consistent with national legislation; To support and strengthen the capacity of municipalities; To regulate the performance of municipalities in terms of their functions listed in schedules 4 and 5 of the Constitution, 1996; To intervene where there is non-fulfilment of legislative, executive or financial obligations; and To promote Developmental Local Government Regarding Traditional Leadership the Constitution of South Africa, 1996 as amended states the following on Recognition in Section 211: The institution, status and role of Traditional Leadership, according to customary law, are recognised subject to the Constitution. A Traditional Leadership Institution that observes a system of customary law may function subject to any applicable legislation and customs, which includes amendments to, or repeal of, that legislation or those customs. The courts must apply customary law when that law is applicable, subject to the Constitution and any legislation that specifically deals with customary law. The roles of Traditional Leaders are spelt out in Section 212 of the Constitution of South Africa, National legislation may provide for a role for Traditional Leadership as an institution at local level on matters affecting local communities. To deal with matters relating to Traditional Leadership, the role of Traditional Leaders, customary law and the customs of communities observing a system of customary law: National or Provincial legislation may provide for the establishment of Houses of Traditional Leaders; and National legislation may establish a Council of Traditional Leaders. 18

20 1.7.2 Local Government Legislation Legislation Municipal Structures Act, 1998 & 2000 (Act 117 of 1998 and Amendment Act 33 of 2000) Municipal Systems Act, 2000 (Act 32 of 2000) Municipal Finance Management Act, 2003 (Act 56 of 2003) Municipal Property Rates Act, 2004 (Act 6 of 2004) Municipal Demarcation Act, 1998 (Act 27 of 1998 as amended) Disaster Management Act, 2002 (Act 57 of 2002) Intergovernmental Relations Framework Act, 2005 (Act 13 of 2005) Disaster Management Act, 2002 (Act 57 of 2002) Description The Acts Provide for the establishment of municipalities in accordance with the requirements relating to and the types of municipalities. Provide for an appropriate division of functions and powers between categories of municipalities; and regulate the internal systems, structures and Office-bearers of municipalities. Provides for the core principles, mechanisms, and processes that are necessary to enable municipalities to move progressively towards the social and economic upliftment of local communities and ensure universal access to the essential services that are affordable to all. This Act aims to secure sound and sustainable management of the financial affairs of municipalities as well as to establish norms and standards against which the financial affairs can be monitored and measured. This Act aims to regulate the power of a municipality to impose rates on property, exclude certain properties from rating in the national interest, make provision for municipalities to implement a transparent and fair system of exemptions, reduce and rebate through their rating policies, make provision for fair and equitable valuation methods of properties, make provision for an objection and appeal process and amend the Local Government. Provides for the criteria and procedures for the determination of municipal boundaries by an independent authority. This Act provides for integrated and coordinated disaster management focused on rapid and effective response to disasters and the reduction of disaster risk. It also provides for the establishment of Provincial and Municipal Disaster Management Centers. This act aims to establish a framework for National Government as well as Provincial Governments and municipalities to promote and facilitate inter-governmental relationships and to provide mechanisms and procedures to facilitate the settlement of intergovernmental disputes. The Act provides an integrated and coordinated Disaster Management Policy that focuses on preventing or reducing the risk of disasters, mitigating the severity of disasters, emergency preparedness, rapid and effective response to disasters and post-delivery recovery. The establishment of National, Provincial and Municipal Disaster Management Centers; Disaster management volunteers and matters incidental thereto. 19

21 1.7.3 Traditional Affairs Legislation Legislation House of Traditional Leaders Act, 1995 (Act 1 of 1995) Traditional Leadership and Governance Framework Act, 2003 (Act 41 of 2003 Provincial Traditional Leadership and Governance Act, 2005 (Act 4 of 2005) Description Provides for the establishment of the House of Traditional Leaders. Provides for the functions and roles of Traditional Leaders. Provides for the establishment of the Provincial House of Traditional Leaders Further Pieces of Legislation Administration and Control of Townships in Black Areas Regulations. Broad Based Black Economic Empowerment Act, 2003 (Act 53 of 2003) Control of Access to Public Premises Act, 1985 (Act 53 of 1985) Environment Impact Assessment Regulations: Implementation of Sections 21, 22, 26 of the Environment Conservation Act, 1998 (Act ) Fire Brigade Services Amendment Act, 2000 (Act 14 of 2000) Inter-governmental Relations Framework Act, 2005 (Act 13 of 2005) Land Survey Act, 1997 (Act No 8 of 1997) Land Tenure in Towns Regulations Land Use Planning Ordinance 15 of 1985 Less Formal Township Establishment Act,1991 (Act 113 of 1991) Municipal Act of 1985 (Ciskei) Municipal Act of 1979 (Transkei) Municipal Ordinance 20 of 1974 (Cape Provincial Administration) Physical Planning Act, 1991 (Act 125 of 1991) Re-determination of the Boundaries of Cross-Boundary Municipalities Act, 2005 (Act 6 of 2005) Townships Proclamation No R293 of 1962 Removal of Restrictions Act, 1967 (Act 84 of 1967) Remuneration of Public Office Bearers Act,1998 (Act 20 of 1998) State Information Technology Agency Act, 1998 (Act 88 of 1998) Spatial Planning and Land Use Management Act 2013 (Act 16 of 2013) Townships Ordinance 33 of 1934 Transfer of staff to Municipalities Act, 1998 (Act 17 of 1998) Transversal Legislation Basic Conditions of Employment Act, 1997 (Act 75 of 1997 as amended). To give effect to the right to fair labor practices referred to in section 23(1) of the Constitution, 1996 by establishing and making provision for the regulation of basic conditions of employment; and thereby to comply with the obligations of the Republic of South Africa as a member state of the International Labor Organization; and to provide for matters related therewith. Employment Equity Act, 1998 (Act 55 of 1998). To promote equality, eliminate unfair discrimination in employment and to ensure the implementation of employment equity measures to redress the effects of discrimination; to achieve a diverse and efficient workforce broadly representative of the demographics of the Province of the Eastern Cape. Labor Relations Act, 1995 (Act 66 of 1995). To regulate and guide the employer in recognizing and fulfilling its role in effecting labor peace and the democratization of the workplace. 20

22 Occupational Health and Safety Act, 1993 (Act 85 of 1993). To provide for the health and safety of persons at work and for the health and safety of persons in connection with the use of plant and machinery; the protection of persons other than persons at work against hazards to health and safety arising out of or in relation with the activities of persons at work; to establish an advisory council for occupational health and safety; and to provide for matters related therewith. Public Service Act, 1994 (Act 103 of 1994 as amended by Act 30 of 2007). To provide for the organisation and administration of the public service of the Republic of South Africa, the regulation of the conditions of employment, terms of office, discipline, retirement and discharge of members of the public service, and matters related therewith. Skills Development Act, 1998 (Act 97 of 1998). To provide an institutional framework to devise and implement national, sector and workplace strategies to develop and improve the skills of the South African workforce; to integrate those strategies within the National Qualifications Framework contemplated in the South African Qualifications Authority Act, 1995; to provide for learner ships that lead to recognised occupational qualifications; to provide for the financing of skills development by means of a levy-grant scheme and a National Skills Fund; to provide for and regulate employment services; and to provide for matters connected therewith. Public Finance Management Act, 1999 (Act 1 of 1999). To regulate financial management in the National and Provincial Governments; to ensure that all revenue, expenditure, assets and liabilities of those governments are managed efficiently and effectively; to provide for the responsibilities of persons entrusted with financial management in those governments; and to provide for matters connected therewith. Skills Development Levies Act, 1999 (Act 9 of 1999). To provide any public service employer in the national or provincial sphere of Government with exemption from paying a skills development levy; and for exemption from matters related therewith. Promotion of Access to Information Act, 2000 (Act 2 of 2000). To give effect to the constitutional right of access to any information held by the State and any information that is held by another person and that is required for the exercise or protection of any rights; and to provide for matters related therewith. Promotion of Administrative Justice Act, 2000 (Act 2 of 2000). To give effect to the right to administrative action that is lawful, reasonable and procedurally fair and to the right to written reasons for administrative action as contemplated in section 33 of the Constitution of the Republic of South Africa, 1996; and to provide for matters incidental thereto. 21

23 1.7.6 Local Government Policy Mandates Department of Cooperative Governance and Traditional Affairs Strategic Plan Free Basic Electricity Policy 2003 Free Basic Water Policy 2001 Growth, Employment and Redistribution : A Macro- Economic Strategy, 1996 National Guidelines for the Implementation of Free Basic Services 2005 Guidelines for the National Indigent Policy Integrated Small Towns Revitalisation Strategy, 2012 Integrated Sustainable Rural Development Strategy Ministerial Determination 4: Expanded Public Works Programme, 2010 Municipal Comprehensive Infrastructure Management Framework Municipal Comprehensive Infrastructure Planning Framework Municipal Infrastructure Grant Policy Framework Municipal Infrastructure Investment Framework National Disaster Management Framework of 2005 National Integrated Development Plan Guide Pack (Volumes 01-7) National Spatial Development Perspective Operational Guide for Nodal Urban Recourse Practitioners Policy Guidelines for Implementing Local Economic Development in South Africa, 18 September 2006 Provincial Disaster Risk Management Framework Provincial Growth and Development Plan, 08 August 2003 Provincial Spatial Development Plan Strategic Framework for Water Services Urban Renewable Implementation Framework, 2006 Urban Renewal Implementation Framework,

24 1.8 ORGANISATIONAL STRUCTURE AS AT 31 MARCH

25 1.9 ENTITIES REPORTING TO THE MEC Name of entity Legislation Nature of business Planning Advisory Board Land Use Planning Ordinance,1985 (15 of 1985) Consideration of development application and appeals as well as the removal of title restrictions for the former Cape Provincial Administration and former Transkei areas. Townships Board Township Ordinance 1934 (33 of 1934) Consider development applications, subdivisions, consolidations and appeals for the former Transkei area. Land Use Planning Board Valuation Appeals Board The Land Use Regulation Act, 1987 (Act 15 of 1987) Municipal Property Rates Act, 2004 (Act 6 of 2004) Consider development applications, subdivisions, consolidations and appeals as well as the removal of title restrictions for the former Ciskei area. Consider Appeals relating to objections to property values by property owners in municipalities. The above entities have no effect on the Annual Financial Statements of the Department. 24

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27 2. PERFORMANCE INFORMATION 2.1 AUDITOR GENERAL S REPORT: PREDETERMINED OBJECTIVES Predetermined objectives 1. I performed procedures to obtain evidence about the usefulness and reliability of the reported performance information of the following selected programmes presented in the annual performance report of the department for the year ended 31 March 2016: Programme 2 Local Governance on pages 39 to 44 Programme 3 Development and Planning on pages 46 to 50 Programme 4 Traditional Institutional Management on pages 52 to I evaluated the usefulness of the reported performance information to determine whether it was presented in accordance with the National Treasury s annual reporting principles and whether the reported performance was consistent with the planned programmes. I further performed tests to determine whether indicators and targets were well defined, verifiable, specific, measurable, time bound and relevant, as required by the National Treasury s Framework for managing programme performance information (FMPPI). 3. I assessed the reliability of the reported performance information to determine whether it was valid, accurate and complete. 4. I did not identify any material findings on the usefulness and reliability of the reported performance information for the following programmes. Programme 2 Local Governance Programme 3 Development and Planning Programme 4 Traditional Institutional Management Additional matter 5. Although I identified no material findings on the usefulness and reliability of the reported performance information for the selected programmes, I draw attention to the following matter: Adjustment of material misstatements 6. We identified material misstatements in the annual performance report submitted for auditing. These material misstatements were on the reported performance information of Programme 4 Traditional Institutional Management. As management subsequently corrected the misstatements, we did not raise any material findings on the usefulness and reliability of the reported performance information. Achievement of planned targets 7. Refer to the annual performance report on pages 34 to 57 for information on the achievement of the planned targets for the year. Unaudited supplementary schedules 8. The supplementary information set out on pages 58 to 112 does not form part of the annual performance report and is presented as additional information. I have not audited these schedules and, accordingly, I do not report on them. 2.2 OVERVIEW OF DEPARTMENTAL PERFORMANCE Service Delivery Environment Performance information, i.e. information on predetermined objectives, is key to effective management planning, budgeting, implementation, monitoring, evaluation and reporting. Measuring performance ensures that policy, planning, budgeting and reporting are aligned in order to achieve improved service delivery. 26

28 Performance information indicates how well an institution is meeting its aims and objectives, and which policies and processes are working. Making the best use of available data and knowledge is crucial for improving the execution of the Department s mandate. Performance information also facilitates effective accountability, enabling legislators, members of the public and other interested parties to track progress of the Department s activities, identify the scope for improvement and better understand the issues involved. The performance information reported in the annual report enables parliament, the provincial legislature and the public to track the Department s performance, and to hold it accountable. Performance information also needs to be available to managers at each stage of the planning, budgeting and reporting cycle so that they can adopt a results-based approach to managing service delivery. This approach emphasises planning and managing with a focus on desired results, and managing inputs and activities to achieve these results. The Department ensured that there is alignment in terms of the strategic objectives and its associated targets between the Strategic Plans, Annual Performance Plans and budget documents. The programme performance clearly reports on the Department s performance against service delivery objectives and targets as identified in the Strategic Plans, Annual Performance Plans and budget documents Service Delivery Improvement Plan In accordance with the Public Service Regulations, Chapter 1, Part III C, all Departments are required to develop a Service Delivery Improvement Plan (SDIP) and to publish an annual statement of public service commitment which will set out the Department s service standards that citizens and customers can expect and which will serve to explain how the Department will meet each of the standards. The following tables reflect the components of the SDIP as well as progress made in the implementation of the plans Main services and standards Main services Beneficiaries Current/actual standard of service Desired standard of service achievement Support strategies and capacity for Local Economic Development (LED) and Urban and Rural development to create decent work and sustainable livelihoods. Municipalities 23 Municipalities supported to supplement LED capacity. 8 Municipalities supported to implement LED project in line with municipal LED Strategies. 7 Towns supported to promote revitalisation programme. 23 Municipalities to be supported to supplement LED capacity. 8 Municipalities to be supported to implement LED project in line with municipal LED Strategies. 7 Towns to be supported to promote revitalisation programme. 23 Municipalities supported to supplement LED capacity. 8 Municipalities supported to implement LED project in line with municipal LED Strategies. 7 Towns supported to promote revitalisation programme. Implementable, credible LED strategies in compliance with the National LED Framework. Implementable, credible LED strategies to be in compliance with the National LED Framework. 8 Municipalities were supported to implement credible LED Strategies in compliance with the National LED Framework. Improve municipal capacity for infrastructure development programmes in relation to District, Metros and Local Municipalities 4 Reports produced on households with access to free basic services from municipalities. 4 Reports to be produced on households with access to free basic services from municipalities. 4 Reports produced on households with access to free basic services from municipalities. 27

29 Main services Beneficiaries Current/actual standard of service Desired standard of service achievement provision of Free Basic Services (i.e. Water, Sanitation, Electricity, Refuse Removal) 45 Municipalities implementing credible Indigent Policy. Indigent Registration and updating of indigent registers Hands-on-support. 45 Municipalities to be implementing credible Indigent Policy. Indigent Registration and updating of indigent registers to be done through Hands-on-support. 45 Municipalities implementing credible Indigent Policy. 42 Municipalities were supported to register and update indigent registers through Hands-onsupport. Facilitate participation of traditional institutions and traditional communities in developmental initiatives. Traditional Leaders, traditional communities and Imbumba Yamakhosikazi (IYA). 4 Reports on 8 Traditional Councils supported on formulation of community developmental plans compiled. Representation of Traditional Leaders in municipal councils. 4 Reports on 8 Traditional Councils to be supported on formulation of community developmental plans compiled. Representation of Traditional Leaders in municipal councils to be effected. 4 Reports on 8 Traditional Councils supported on formulation of community developmental plans compiled. Representation of Traditional Leaders was effected in in municipal councils. Participation of Traditional Leaders in developmental forums. Participation of Traditional Leaders to be in developmental forums. Traditional Leaders participated in development forums such as the IDPs. Cooperative relations between Traditional Councils and municipalities strengthened and functional. Small scale poverty alleviation projects sustained and elevated to fully fledged cooperatives. 8 Traditional Councils supported on developmental plans Cooperative relations between Traditional Councils and municipalities to be strengthened and functional. Small scale poverty alleviation projects to be sustained and elevated to fully fledged cooperatives. 8 Traditional Councils to be supported on developmental plans The cooperative relations between the Traditional Councils and municipalities were strengthened and made functional. Small scale poverty alleviation projects were sustained and elevated to fully fledged cooperatives. 8 Traditional Councils to be supported on developmental plans 28

30 Batho Pele arrangements with beneficiaries Current/actual arrangements Desired arrangements achievements Imbizo and outreach programmes conducted throughout the Province. Imbizo and outreach programmes conducted throughout the Province. 18 Outreach programmes supported with technical assistance (EXCO, Ministerial, Presidency and MEC) Service delivery information tool Current/actual arrangements Desired arrangements achievements Departmental Communication Strategy Development. Departmental Communication Strategy to be developed in terms of the Provincial Communication Framework to market the department programmes. Departmental Communication Strategy has been reviewed and approved. Departmental Communication Plan Reviewed. Municipalities with functional communication forums supported. District and Metro Municipalities with reviewed communication plans. Reviewed communication plan to be in place. Number of municipalities with functional communication forums to be supported. District and Metro Municipalities to be supported with the review of communication plans to be in place. Departmental Communication Plan developed and implemented (4 quarterly newsletters, organised interviews and talk-shows for MEC on electronic media, placed print adverts for various programmes, launch of Departmental Facebook page). Nelson Mandela, Buffalo City Metro Municipality, Sarah Baartman District Municipality. District and Metro Municipalities supported with the review of communication plans in place (Joe Gqabi, O.R Tambo, Chris Hani, Alfred Nzo, Ntabankulu LM, Emalahleni LM) Complaint mechanisms Current/actual complaints Mechanism Petitions Management Framework Presidential Hotline Walk-in and Outreach Programmes complaints Desired complaints mechanism Petitions Management Action Plan to be in place. Given attention, execute, referred to the responsible sector department or institution and report to the MEC within thirty (30) days and advise the complainant / petitioner on the progress thereof. Given attention, execute, referred to the responsible sector department or institution and report to the MEC within thirty (30) days and advise the complainant / petitioner on the progress thereof. achievements Petitions Management Action Plan in place. 325 Received, referred to relevant service delivery department or institutions. 424 Received and referred to relevant service delivery sector departments or institutions including Traditional Leadership. 29

31 Current/actual complaints Mechanism Support provided to municipalities (petitions management framework) Desired complaints mechanism Provide support to municipalities to establish systems, processes and frameworks to manage petitions. achievements 14 municipalities were supported in this regard Organisational Environment The Department of Cooperative Governance and Traditional Affairs consists of five (5) programmes, namely: Programme 1 Administration Programme 2 Local Governance Programme 3 Municipal Development and Planning Programme 4 Traditional Institutional Management Programme 5 House of Traditional Leaders Six (6) District Offices are currently in operation namely: Sarah Baartman Support Office Joe Gqabi District Support Office Amatole District Support Office Chris Hani District Support Office OR Tambo District Support Office Alfred Nzo District Support Office The following key critical posts have been filled to strengthen the core management to respond to the strategic imperatives: Member of the Executive Council Deputy Director General for Traditional Affairs General Manager for Municipal Support and Governance Services Senior Manager for Internal Audit Senior Manager for Legal Advisory Services Chief of Staff for Office of the MEC The following key challenges were identified which put constraints on the Department to transform itself into an effective development and service delivery orientated organization: Insufficient budget to fill critical vacant posts. Acute shortage of technical and professional human resources. Inadequate physical resources (Shortage of office space in Head office as well as O.R.Tambo District Support Office) Strike management There was no industrial action during the financial year Key policy developments and legislative changes There were no key policy development / legislative changes. 30

32 2.3 STRATEGIC OUTCOME ORIENTATED GOALS The following are the 6 strategic goals of the Department PROGRAMME STRATEGIC GOALS PROGRAMME 1 Strategic Goal 1: An enabling environment to enhance service delivery through integrated support services PROGRAMME 2 Strategic Goal 2: To strengthen municipal institutional capacity to promote governance and effective service delivery PROGRAMME 3 Strategic Goal 3: Effective and efficient planning and development in municipalities Strategic Goal 4: Liveable, integrated cities, towns and rural areas that provide basic income security Strategic Goal : 5 To have enabling viable, sustainable developmental municipalities that deliver basic services PROGRAMMES 4 & 5 Strategic Goal : 6 An enabling service environment in traditional leadership institutions to improve socioeconomic development through integrated support services 2.4 EXPLANATORY NOTES TO THE PERFORMANCE REPORT The tables in the Annual Report on performance information will reflect the following: outputs achieved during 2014/2015. The planned targets as per the 2015/16 Annual Performance Plan and the actual outputs for the financial year under review. Hard evidence on performance per indicator as an additional disclosure. The calculated variance between the planned targets and the actual achievements as required by the treasury guidelines. The comments on all deviations from the set targets, whether positive or negative Changes to the planned targets in the Annual Performance Plan 2014/15 and the annual report APP No. Program Indicator Change Reasons Programme one % of received misconduct and grievance cases attended too % (number) of received misconduct cases attended to Correction of APP Indicator was divided since it had two results % (number) of received grievance cases attended to Number of skills development interventions administered Target 604 Number of skills development interventions administered Target 4 Unit of measure corrected Programme two Percentage of municipalities given support to restore proper functioning Target 100% Percentage of municipalities whose section 12 notices have been amended Target 100% Error corrected in APP 31

33 APP No. Program Indicator Change Reasons Number of municipalities assessed in terms of complying with relevant legislation Target 45 Percentage of municipalities given intense support to restore proper functioning Target 100% Error corrected in APP Number of ward committees supported on implementation of ward operational plans Target 715 Number of municipalities supported to have functional ward committees Target 20 Error corrected in APP Report on the number of community report back meetings convened by Councilors in each ward Target % (Number) of municipalities supported on the development of a ward level database with community concerns and remedial actions produced Target 100% Number of reports in municipalities where the full CDW programme is implemented Target 4 Number of municipalities supported with community participation and citizen empowerment partnerships Target 25 Number of municipalities supported to have functional public participation units Target 25 Number of CDWP cases resolved Target 507 Error corrected in APP Error corrected in APP Error corrected in APP Entire revision of all KPAs/charters in MUCAT for alignment with Outcome 9/(MTSF) Target 13 Entire revision of all KPAs/charters in MUCAT for alignment with Outcome 9/(MTSF) Target 13 Target in fourth quarter reduced from 1 to 0. The above indicators were changed after approval by the Head of Department at different stages of the financial year The strategies to overcome areas of underperformance relating to the annual performance plan of the department The Department determined the following strategies to overcome areas of underperformance on the predetermined objectives: The Department holds quarterly reviews discussing areas of underperformance and plan interventions on how to improve on the areas that have been identified. Chief Directorate specific discussions on performance information were held on a quarterly basis with emphasis on non-performance of specific indicators. A sustainability strategy in the areas of good practices and performance are also developed and maintained. Planning for indicators with SCM implications must be done in the last quarter to be ready for implementation in the first quarter of the new financial year. 32

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35 PROGRAMME 1: ADMINISTRATION Strategic Goal 1 An enabling environment to enhance service delivery through integrated support services Strategic Objectives To promote excellence in leadership, good governance, corporate services and financial management Sub-Programmes Sub-Programmes Sub-Programme Purpose 1.1 Office of the MEC To provide political direction and set policy priorities for intervention and play an oversight over the department to ensure alignment to its mandate and mainstreaming the needs of vulnerable groups. 1.2 Corporate Services To provide efficient and effective corporate support services to the Department Linking Performance with Budget Allocation Programme Name 2015/ /2015 (Over)Under (Over)Under R 000 R 000 R 000 R 000 R 000 R 000 Office of the MEC Corporate Services TOTAL

36 PROGRAMME 1: ADMINISTRATION SUB-PROGRAMME 1.1- OFFICE OF THE MEC Performance Indicator/Measure Annual Target Performance Deviation from the Target Reason for Deviation Hard Evidence Strategic Objective 1: - To promote excellence in leadership, good governance, corporate services and financial management to achieve clean administration Number of reports presented to Cabinet on delivery against all Departmental policy directives and agreements % No deviation None Parliamentary responses Quarterly reports SUB-PROGRAMME 1.2- CORPORATE SERVICES Performance Indicator/Measure Annual Target Performance Deviation from the Target Reason for Deviation. Hard Evidence Strategic Objective: 1 - To promote excellence in leadership, good governance, corporate services and financial management to achieve clean administration. Strategic Objective: 7 - To improve municipal performance, monitoring and evaluation services through effective and coordinated hands-on support. Number of municipalities supported to roll-out gender policy framework Number of reports on registered fraud, corruption and maladministration cases investigated 4 0 0% % 4 The indicator could not be implemented due to a limiting approach. Approach was devised for the 2016/2017 financial year Target exceeded by Investigation reports are cases from previous financial year. 5 Investigation reports from unauthorised, fruitless and wasteful expenditure. 3 Investigation reports from current Signed memorandums/ letters to Municipal Managers. Attendance registers. Reports 11 Terms of Reference 20 Investigation Reports 28 Section 106 (1) (a) letters of enquiry to municipalities. 3 cases referred to other departments 35

37 Performance Indicator/Measure Annual Target Performance Deviation from the Target Reason for Deviation. Hard Evidence Strategic Objective: 1 - To promote excellence in leadership, good governance, corporate services and financial management to achieve clean administration. Strategic Objective: 7 - To improve municipal performance, monitoring and evaluation services through effective and coordinated hands-on support. financial year. % (Number) of legal support referrals and Litigation Matters attended to 100% 100% 0 No deviation Instruction letters to State Attorney, litigation register, legal opinions generated, Inputs on contracts vetted, contracts vetted, presentations and reports of advocacy sessions conducted. Copies of draft bills and referrals to the Chief State Law advisor. Number of strategic reports submitted to Management, Audit Committee and Treasury % 0 No deviation Internal Audit reports to the Audit Committee, Internal Control Dashboard, Attendance registers and minutes of Audit Committee meeting. APP, Operational Plan QPR to OTP, SCM and Budget Reports and Risk Management Reports % of municipalities supported to review their Communication Action Plans 100% 100% 0 No deviation Invitations, Attendance registers, Copy of the Communication presentation. Number of financial reports submitted to Treasury as per the PFMA, National Treasury Regulations, Practice Notes and Treasury Circulars Number of skills development interventions administered % % 0 No deviation Signed IYM submitted to the MEC and Provincial Treasury. Monthly Cash Flows submitted to Provincial Treasury on due dates. Compliance Report submitted to Provincial Treasury. Submission of adjusted budget to Provincial Treasury, Bas compliance certificates, Instruction note 34, Circular 1, Bas Persal reconciliation, interim financial statements, Procurement plan report, Consolidated SCM reports. 0 No deviation Attendance registers, presentations and reports 36

38 Performance Indicator/Measure Annual Target Performance Deviation from the Target Reason for Deviation. Hard Evidence Strategic Objective: 1 - To promote excellence in leadership, good governance, corporate services and financial management to achieve clean administration. Strategic Objective: 7 - To improve municipal performance, monitoring and evaluation services through effective and coordinated hands-on support. % of received misconduct cases attended to % of received grievance cases attended to % progress toward the implementation of the road map for ICT Governance Framework 100% 100% 0 No deviation Statistics report for misconduct cases. Grievance outcomes and acknowledgement letters for grievances. Minutes of grievance meetings. 100% 100% 0 No deviation Statistics report for grievance cases, Grievance outcomes and acknowledgement letters for grievances and Minutes of grievance meetings. 100% 100% 0 No deviation ICT Charter has been approved Procured Laptops, projectors, hard drives and USB Configured servers and migrated s to new servers(exchange; File & print) Changed addresses from ECLGTA.gov.za to ECCOGTA.gov.za Configured System Centre operations manager to track activities, monitor networks and keep audit trails Implemented self-service user account management system to reset password and update details Number of reports on municipal and traditional leadership support programmes coordinated at Metro/ District levels Number of convened KSD Presidential intervention sessions recorded % % 0 No deviation 28 Reports and attendance registers 0 No deviation Invitations, Agenda, Reports, correspondence and Attendance registers Number of municipalities with functional IGR structures supported % Target exceeded by 21. More municipalities were provided with IGR technical support. Invitations Agenda Attendance registers Reports. 37

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40 PROGRAMME 2: LOCAL GOVERNANCE Strategic Goal 2 To strengthen municipal institutional capacity to promote governance and effective service delivery Strategic Objectives To promote effective management support on municipal administration matters within the regulatory framework To promote effective financial management to municipalities for clean financial management in accordance with the applicable acts To improve public trust and credibility in local government through public participation To facilitate improved functionality of 45 municipal institutions through the complete implementation of individual performance management and development systems aligned to the organisational performance management systems To improve municipal capacity assessment, capacity building and ICT through the provisioning of effective high quality management support To improve municipal performance, monitoring and evaluation service through effective and coordinated hands-on support Sub-Programmes Sub-Programmes Sub-Programme Purpose 2.1 Municipal Administration To provide support services and monitor the effective municipal administrative matters within the regulatory framework. 2.2 Municipal Finance To provide support services and monitor the implementation of efficient and effective financial management systems in municipalities in accordance with the applicable acts 2.3 Public Participation To deepen democracy for better service delivery. 2.4 Capacity Development To provide support and management services to municipalities in respect of capacity building Linking Performance with Budget Allocation Programme Name 2015/2016 (Over)Under 2014/2015 (Over)Under R'000 R'000 R'000 R'000 R'000 R'000 Municipal Administration Municipal Finance Municipal Capacity Dev Municipal Public Municipal Performance Total

41 PROGRAMME 2: LOCAL GOVERNANCE SUB-PROGRAMME 2.1- MUNICIPAL ADMINISTRATION Performance Indicator Annual Target Performance Deviation from the Target Reason for Deviation Hard Evidence Strategic Objective: 2 - To improve effective management support on municipal administration matters within the regulatory framework Number of municipalities assessed in terms of complying with relevant legislation % 1 The municipality could not set a date/ avail itself for verification Letter requesting verification Memorandum Attendance Registers Percentage of municipalities whose section 12 notices have been amended Percentage of municipalities given intensive support to restore proper functioning 100% 100% 0 No deviation Application letters Memorandums Letters to municipality Provincial Gazette Gazette 100% 100% 0 No deviation Reports from Administrator SUB-PROGRAMME 2.2- MUNICIPAL FINANCE Performance Indicator/Measure Annual Target Performance Deviation from the Target Reason for Deviation Hard Evidence Strategic Objective: 3 To promote effective financial management to municipalities for clean financial management in accordance with the applicable Acts Number of Municipalities monitored on the implementation of Audit Response Plan based on 2013/14 audit outcomes (Suboutcome 3 Action 4) 36% (16) % Target exceeded by 5 Municipalities made commitment through AG Commitment Road shows and the MEC held Accountability sessions with mayors. AFS Compilation Guide (High Level Assessment Tool) / AFS Submission Schedule / Audit reports Number of Municipalities supported to improve revenue management and debt collection (Sub-outcome3, Action 1) Number of municipalities monitored on the implementation of grant funding (MSIG) 69% (31) % % 0 No deviation Invitation letters, attendance registers and minutes 0 No deviation MSIG expenditure reports and MSIG activity plans 40

42 Performance Indicator/Measure Annual Target Performance Deviation from the Target Reason for Deviation Hard Evidence Strategic Objective: 3 To promote effective financial management to municipalities for clean financial management in accordance with the applicable Acts Number of municipalities monitored on the submission of annual reports % 1 Tsolwana Municipal Council did not quorate to consider the annual report Schedule of submission to the Legislature and circular letter reminding municipalities of their legislative mandate. Number of municipalities monitored on the submission of oversight reports % 2 Tsolwana Municipal Council did not quorate to consider Annual Report. Port St. Johns MPAC did not meet to develop the oversight report Schedule of submission to the Legislature and circular letter reminding municipalities of their legislative mandate. Number of municipalities with established and functional audit committees Number of municipalities with established internal audit units Number of audit improvement plans assessed for adequacy % % % 2 The term of audit committee for O.R Tambo expired in September Audit committee for Ikwezi does not hold meetings due to the municipality experiencing serious financial problems. Schedule of existence / completed assessment tool 0 No deviation Schedule of existence and completed assessment tool 0 No deviation Report on recurrences Number of municipalities monitored on functionality of municipal public accounts committees % 1 Ikwezi MPAC could not quorate Attendance register, Presentations and completed assessment tool Number of municipalities supported to reduce Eskom debt % Target exceeded by 4 The Department intervened by partpaying Eskom on behalf of Maletswai, Gariep, Nxuba and Ikwezi as the electricity supply was disconnected. Payment stubs 41

43 SUB-PROGRAMME 2.3- PUBLIC PARTICIPATION Performance Indicator/Measure Annual Target Performance Deviation from the Target Reason for Deviation Hard Evidence Strategic Objective: 2 - To improve effective management support on municipal administration matters within the regulatory framework. Strategic Objective: 4 - To improve public trust and credibility in local government through public participation. Number of municipalities supported to have functional ward committees % Target exceeded by 12 More municipalities were supported through B2B: Pillar 1 approach Quarterly reports Number of municipalities supported with community participation and citizen empowerment partnerships % 0 No deviation Quarterly reports Number of municipalities supported to have functional public participation units % Target exceeded by 7 More municipalities were supported through the B2B: Pillar 1 approach Quarterly reports Number of CDWP cases resolved % 0 No deviation Quarterly reports % of elections and bielections supported % (Number) of municipalities supported to respond promptly to all petitions 100% 100% 0 No deviation Quarterly reports 100% 100%(12) 0 No deviation Signed weekly and quarterly reports. Service delivery complaints in the form of petitions and presidential hotline querries received by the Unit. Electronic database on service delivery queries. SUB-PROGRAMME 2.4- CAPACITY DEVELOPMENT Performance Indicator/Measure Annual Target Performance Deviation from the Target Reason for Deviation Hard Evidence Strategic Objective: 5 - To facilitate improved functionality of 45 municipal institutions through the complete implementation of individual performance management and development systems aligned to the organisational performance management systems Number of municipalities monitored to comply with MSA regulations % 0 No deviation Updated Recruitment Report, Concurrence Letters and Appointment Memoranda Number of municipalities monitored in the % 2 Non-compliance by Makana and WSP Report 42

44 Performance Indicator/Measure Annual Target Performance Deviation from the Target Reason for Deviation Hard Evidence Strategic Objective: 5 - To facilitate improved functionality of 45 municipal institutions through the complete implementation of individual performance management and development systems aligned to the organisational performance management systems submission of Workplace Skills Plan (WSP) to LGSETA Inxuba Yethemba LMs Number of municipalities supported in reviewing integrated HR Plans % Target exceeded by 1 Responded to a request Copy of the HR Plan and Attendance Register Number of municipalities monitored in the submission of Employment Equity Reports to Department of Labour annually % 1 (Alfred Nzo) Submission with errors Attendance Registers for the EE Compliance workshops and EE Report Number of municipalities supported in aligning their reviewed organograms with IDP s % 0 No deviation Copies of the organogram for OR Tambo DM; Alfred Nzo DM; BCR LM and Makana LM SUB-PROGRAMME 2.5- MUNICIPAL PERFORMANCE MONITORING, REPORTING AND EVALUATION Performance Indicator/Measure Annual Target Performance Deviation from the Target Reason for Deviation Hard Evidence Strategic Objective: 5 - To facilitate improved functionality of 45 municipal institutions through the complete implementation of individual performance management and development systems aligned to the organisational performance management systems. Strategic Objective: 6 - To improve municipal capacity assessment, capacity building and ICT through the provisioning of effective high quality management support. Strategic Objective: 7 - To improve municipal performance, monitoring and evaluation services through effective and coordinated hands-on support Number of municipalities supported to institutionalise Performance Management System (PMS) % 12 Support provided in centralised sessions at Sarah Baartman and Chris Hani district wide area as well as requests from municipalities who were not part of the planning process 1 Report and 1 attendance register for Sarah Baartman District Wide: (Sarah Baartman, Ikwezi, Koukamma, Kouga, SRV, Camdeboo, Blue Crane Route and Baviaans) 1 Report and 1 attendance register for Chris Hani District Wide: Chris Hani, Sakhisizwe, Intsika Yethu, Emalahleni, Lukhanji and Engcobo Report and attendance register for: Mbizana, Ngqushwa, Maletswai, KSD, Mhlontlo, Great Kei, Matatiele, Inxuba Yethemba, Amahlathi, Ntabankulu, 43

45 Performance Indicator/Measure Annual Target Performance Deviation from the Target Reason for Deviation Hard Evidence Strategic Objective: 5 - To facilitate improved functionality of 45 municipal institutions through the complete implementation of individual performance management and development systems aligned to the organisational performance management systems. Strategic Objective: 6 - To improve municipal capacity assessment, capacity building and ICT through the provisioning of effective high quality management support. Strategic Objective: 7 - To improve municipal performance, monitoring and evaluation services through effective and coordinated hands-on support Mbhashe, Makana and Nyandeni Municipalities. Number of Municipal Performance Report compiled as per the requirements of s47 of the MSA Number of reports compiled on municipal support programmes Entire revision of all KPAs/chapters in MUCAT for alignment with Outcome 9 / (MTSF) % % % 0 No deviation Municipal Performance Report (S.47) 0 No deviation Signed quarterly reports on support to municipalities 0 No deviation Revised 13 chapters % of municipalities supported in having functional ICT systems % of assessment tools reviewed 100% 100% 0 No deviation Developed a rollout implementation plan in consultation with Local Government ICT (ECLGICT) Council Provided support to Sakhisizwe LM with the Development and review of ICT policies. Provided support to Sundays River Valley LM with the planning and scheduling for the awareness sessions on ICT Policies 100% 100% 0 No deviation Provided support to Municipal Performance Directorate with Section 47 District Wide Graphs Number of consolidated quarterly monitoring reports on support programmes compiled (Outcome 9) Number of Evaluation Report compiled % % 0 No deviation Consolidated quarterly reports 0 No deviation Printed copy of the report 44

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47 PROGRAMME 3: DEVELOPMENT AND PLANNING Strategic Goals Effective and efficient planning and development in municipalities Liveable, integrated cities, towns and rural areas that provide basic income security To have enabling, viable, sustainable developmental municipalities that deliver basic services Strategic Objectives To support 45 municipalities to achieve their statutory, social, economic and environmental obligations in respect of integrated developmental planning, spatial planning, land survey and cadastral information management, valuation services and land use management and administration To promote economic prosperity, liveable integrated cities, towns and rural areas as well as basic income security for citizens of the Eastern Cape Province To support 45 municipalities to meet their targets for basic needs services in line with their credible IDP s Sub-Programmes Sub-Programmes Sub-Programme Purpose 3.1: Spatial Planning To support municipalities with spatial planning. 3.2: Land Use Management To support municipalities with effective and efficient land use management and administration 3.3: Local Economic Development To provide seamless and integrated local economic development facilitation. 3.4: Municipal Infrastructure To build efficient social infrastructure to support service delivery. 3.5: Disaster Management To improve disaster prevention, mitigation and responses. 3.6: IDP Coordination To provide support for effective and efficient municipal integrated development planning Linking Performance with Budget Allocation 2015/ /2015 Programme Name (Over)Under (Over)Under R'000 R'000 R'000 R'000 R'000 R'000 Spatial Planning Development Admin & Land Use Intergrated Development Planning Led & Planning Municipal Infrastructure Disaster Management Total

48 PROGRAMME 3: DEVELOPMENT AND PLANNING SUB-PROGRAMME 3.1- SPATIAL PLANNING Performance Indicator/Measure Annual Target Performance Deviation from Target Reason for Deviation Hard Evidence Strategic Objective: 8 - To support 45 municipalities to achieve their statutory, social, economic and environmental obligations in respect of integrated development planning, spatial planning, land survey and cadastral information management, valuation services and land use management and administration Number of municipalities supported with the implementation of SPLUMA % (number) of land development applications from municipalities processed in order to implement their Land Use Management Systems (LUMS) % 0 No deviation Agendas, Minutes and Attendance Registers 25% 25% 0 No deviation Spread sheets and Reports (Memoranda) SUB-PROGRAMME 3.2- LAND USE MANAGEMENT Performance Indicator/Measure Annual Target Performance Deviation from Target Reason for Deviation Hard Evidence Strategic Objective: 8 - To support 45 municipalities to achieve their statutory, social, economic and environmental obligations in respect of integrated development planning, spatial planning, land survey and cadastral information management, valuation services and land use management and administration Number of municipalities monitored to comply with the MPRA % 0 No deviation Monitoring Reports Number of municipalities supported to submit their land needs plans for the release of land for development purposes % 0 No deviation Letters of land needs from the Municipality Engagement with land owner Letter of release or refusal by the land owner Number of municipalities supported in upgrading of informal settlements (KSD and Chris Hani) % 0 No deviation Agenda, Project Management Steering Committee (PMSC) Minutes, Attendance Registers, Project activity programme, Survey Plans % of land development applications submitted for approval by the Planning Boards 100% 100% 0 No deviation Memo to Spatial Planning or Legal Services (where applicable), Agendas, Attendance registers Minutes of the Boards Letter to the applicants (where applicable) Memos to the DDG and MEC Notices of Approvals 47

49 SUB-PROGRAMME LOCAL ECONOMIC DEVELOPMENT Performance Indicator/Measure Annual Target Performance Deviation from Target Reason for Deviation Hard Evidence Strategic Objective: 9 - To promote economic prosperity, liveable integrated cities, towns and rural areas as well as basic income security for citizens of the Eastern Cape Province Number of work opportunities created through the CWP % Target exceeded by 708 Overrecruitment in line with 10% oversubscription of CWP sites Monitoring reports Monthly reports from Implementing AgentsSite Inception Reports Signed site visit reports Number of municipalities supported to implement Local Economic Development projects in line with Municipal LED Strategies Number of Municipalities monitored to reduce cost of doing business through Red Tape intervention Number of LED partnerships supported to promote strategic municipal and regional collaboration Number of municipalities supported to supplement LED capacity Number of towns supported to promote the revitalisation programme % % % % % 0 No deviation LED Strategies; Implementation plans; Site visit reports. 6 No deviation Quarterly Report 5 Amathole DST has been dysfunctional since the departure of the former LED Manager. BAaM in Makana is not sitting because it has been substituted with a parallel programme by the Administrator. A change in the political and administrative leadership of BCMM affected the functionality of the BAaM programme in the Metro. 0 No deviation Attendance registers. Visit reports/various types of correspondences to municipalities 0 No deviation Monthly expenditure reports, Close out Reports Site visit reports Minutes of the meetings 48

50 Performance Indicator/Measure Annual Target Performance Deviation from Target Reason for Deviation Hard Evidence Strategic Objective: 9 - To promote economic prosperity, liveable integrated cities, towns and rural areas as well as basic income security for citizens of the Eastern Cape Province Number of urban nodes supported to promote integrated urban development programme(iudp) Number of EPWP work opportunities created through CWP % % 0 No deviation Minutes of meetings Site visit reports 9 Some participants move to permanent jobs. Business planlist of participants Quarterly reports to Treasury and Public Works SUB-PROGRAMME 3.4- MUNICIPAL INFRASTRUCTURE Performance Indicator /Measure Annual Target Performance Deviation from the Target Reason for Deviation Hard Evidence Strategic objective: 10 - To support 45 municipalities to meet their targets for basic needs services in line with the credible IDP s Number of functional coordinating structures for infrastructure development and service delivery % 0 No deviation Minutes and Attendance Registers for DACs and DWIF Number of municipalities assessed against service delivery bench marks Number of municipalities supported to implement indigent policies Number of reports produced on households with access to basic services (i.e. Water, Sanitation, Electricity, Refuse Removal) from municipalities % % % 0 No deviation 45 Monthly Financial and Non-Financial Reports submitted by municipalities 0 No deviation Visit reports, agendas, attendance registers, presentations and minutes 0 No deviation Quarterly Reports 49

51 PROGRAMME 3.5- DISASTER MANAGEMENT Performance Indicator /Measure Annual Target Performance Deviation from Target Reason for Deviation Hard Evidence Strategic objective: 10 - To support 45 municipalities to meet their targets for basic needs services in line with the credible IDP s Number of functional Municipal Disaster Management Centres Fire Brigade services established Number of reports produced on the progress in the construction of the Provincial Disaster Management Centre Number of meetings of the Intergovernmental Disaster Management Structures (advisory forum) % of affected municipalities supported in response and recovery % % % % 0 No deviation None 0 No deviation None 0 No deviation None 0 No deviation None 100% 100% 0 No deviation None SUB-PROGRAMME 3.6- IDP COORDINATION Performance Indicator/Measure Annual Target Performance Deviation from Target Reason for Deviation Hard Evidence Strategic Objective: 8 To support 45 municipalities to achieve their statutory, social, economic and environment obligations in respect of integrated development planning, spatial planning, land survey and cadastral information management, evaluation services and land use management and administration. Number of municipalities supported with the development of legally compliant IDPs % 0 No deviation District Reports Invites & Attendance Registers 50

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53 PROGRAMME 4: TRADITIONAL INSTITUTIONAL MANAGEMENT Strategic Goal An enabling service environment in traditional leadership institutions to improve socio-economic development through integrated support services Strategic Objectives To create a conducive service and administrative environment for the implementation of the developmental objectives to improve the functionality of the traditional leadership institutions and socio-economic growth To promote traditional, cultural and customary programmes To resolve traditional leadership disputes and claims for improved social cohesion within the communities Sub-Programmes Sub-Programmes Sub-Programme Purpose 4.1: Traditional Resource Administration To conduct Traditional Leadership research and policy development, and provide administrative and infrastructural support, capacity building and financial management support to Traditional Leadership Institutions 4.2: Traditional Resource Administration To provide administrative and infrastructural support to traditional leadership institutions 4.3: Rural Development Facilitation To facilitate traditional community development initiatives Linking Performance with Budget Allocation Programme Name (Over)Under (Over)Under R'000 R'000 R'000 R'000 R'000 R'000 Traditional Resource Administration Rural Development Facilitation Tranditional Institutional Administration Total

54 PROGRAMME 4: TRADITIONAL INSTITUTIONAL MANAGEMENT SUB-PROGRAMME 4.1 -TRADITIONAL INSTITUTIONAL ADMINISTRATION Performance Indicator /Measure Annual Target Performance Deviation from Target Reason for Deviation Hard Evidence Strategic Objective: 11 - To create a conducive service and administrative environment for the implementation of the developmental objectives to improve the functionality of the traditional leadership institutions and socio-economic growth. Strategic Objective: 12 - To promote traditional, cultural and customary programmes. Strategic Objective: 13 - To resolve traditional leadership disputes and claims for improved social cohesion within the communities. Number of Traditional Leadership disputes and claims recommendations sent to the Premier Number of Research Report on Customary Law of Succession/ Legacy Project Number of reports on capacity building interventions administered for traditional leaders Number of policies for Traditional Leadership Institutions developed Number of research reports on genealogies of royal families conducted Number of financial oversight reports on traditional leadership institutions developed % % % % % % 0 No deviation Signed recommendations submitted to the Premier 0 No deviation Signed Legacy Report 0 No deviation Attendance register Workshop Programme Reports 0 No deviation Policy on Financial Management for Traditional Council signed. 0 No deviation Signed and confirmed genealogies 0 No deviation Quarterly financial reports prepared by Traditional Councils. Attendance registers. Quarterly programmes. Consolidated financial oversight report. SUB - PROGRAMME 4.2 TRADITIONAL RESOURCE ADMINISTRATION Performance Indicator/Measure Annual Target Performance Deviation from Target Reason for Deviation Hard Evidence Strategic Objective: 11 - To create a conducive service and administrative environment for the implementation of the developmental objectives to improve the functionality of the traditional leadership institutions and socio-economic growth. Strategic Objective: 12 - To promote traditional, cultural and customary programmes. Strategic Objective: 13 - To resolve traditional leadership disputes and claims for improved social cohesion within the communities. Number of reports on Traditional Leadership Institutions supported with resources Number of signed-off quarterly reports on the % % 0 No deviation reports, register of resource items and report on Traditional Leadership Institutions supported with resources 0 No deviation Reports on construction of Traditional Councils. Payment certificates from Public Works. 53

55 Performance Indicator/Measure Annual Target Performance Deviation from Target Reason for Deviation Hard Evidence Strategic Objective: 11 - To create a conducive service and administrative environment for the implementation of the developmental objectives to improve the functionality of the traditional leadership institutions and socio-economic growth. Strategic Objective: 12 - To promote traditional, cultural and customary programmes. Strategic Objective: 13 - To resolve traditional leadership disputes and claims for improved social cohesion within the communities. construction of traditional leadership institutions Number of signed-off quarterly reports on the renovation of traditional leadership institutions % SUB - PROGRAMME RURAL DEVELOPMENT FACILITATION Performance Indicator/Measure Annual Target Invoices, minutes of the site meetings and pictures of progress made. 0 No deviation Reports on renovations of Traditional Councils. Payment certificates from Public Works. Invoices, minutes of the site meetings and pictures of progress made Performance Deviation from Target Reason for Deviation Hard Evidence Strategic Objective: 12 - To promote traditional, cultural and customary programmes. Strategic Objective: 11 - To execute effective oversight function and provide the required strategic support to the Institutions of Traditional Leadership to fulfill the constitutional requirement of recognizing the role and functions of the institutions to improve the socio-economic growth of rural communities. Number of reports submitted on the participation of Traditional Leadership Institutions in the implementation of Community Work Programme (CWP) Number of reports on Traditional Councils supported on formulation of community development plans compiled Number of reports on Traditional leadership Institutions supported through partnerships compiled % % % 0 No deviation Signed reports with attendance registers 0 No deviation Signed reports with attendance registers 0 No deviation Signed reports with attendance registers 54

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57 PROGRAMME 5: HOUSE OF TRADITIONAL LEADERS Strategic Goal An enabling service environment in traditional leadership institutions to improve socio-economic development through integrated support services Strategic Objectives To promote traditional, cultural and customary programmes To execute effective oversight function and strategic support to the Institutions of Traditional Leadership to fulfil the constitutional requirement of recognizing the role and functions of the institutions to improve the socioeconomic growth of rural communities Sub-Programmes Sub-Programmes Sub-Programme Purpose 5.1: Administration of House of Traditional Leaders To provide overall administration and support services to the provincial house of traditional leaders; and to play an oversight role to provincial and local spheres of government on matters of service delivery; proposed legislation affecting traditional communities; management of communal land; conflict resolution and socio-economic development within traditional communities 5.2: Committees and Local Houses of Traditional Leaders To play the oversight role and advice the provincial and local spheres of government on matters of service delivery, proposed legislation affecting traditional communities, management and socio-economic development within traditional communities Linking Performance with Budget Allocation Programme Name 2015/ /2015 (Over)Under (Over)Under R'000 R'000 R'000 R'000 R'000 R'000 Admin House of Traditional Leaders Comm & Local House of Trad Leader Total

58 PROGRAMME 5: HOUSE OF TRADITIONAL LEADERS SUB-PROGRAMME 5.1- ADMINISTRATION OF HOUSE OF TRADITIONAL LEADERS Performance Indicator /Measure Annual Target Performance Deviation from Target Reason for Deviation Hard Evidence Strategic Objective: 12 - To promote traditional, cultural and customary programmes. Strategic Objective: 14 - To execute effective oversight function and provide the required strategic support to the Institutions of Traditional Leadership to fulfill the constitutional requirement of recognizing the role and functions of the institutions to improve the socio-economic growth of rural communities. Number of consolidated reports on the resolutions of EXCO, house sittings and committee meetings submitted Number of reports on comments on Bills and Policies referred to the Provincial House, submitted to Legislature and National House % % 0 No deviation Minutes and attendance registers 0 No deviation Reports and attendance registers % of claims and disputes reports submitted to MEC 100% 87% 13% Sitting for the claims still pending due to other party s being unable to attend Attendance register and recommendations to MEC SUB-PROGRAMME 5.2- COMMITTEES AND LOCAL HOUSES OF TRADITIONAL LEADERS Performance Indicator /Measure Annual Target Performance Deviation from Target Reason for Deviation Hard Evidence Strategic Objective: 12 - To promote traditional, cultural and customary programmes. Strategic Objective: 14 - To execute effective oversight function and provide the required strategic support to the Institutions of Traditional Leadership to fulfill the constitutional requirement of recognizing the role and functions of the institutions to improve the socio-economic growth of rural communities. Number of reports on the constituencies supported through outreach programmes Number of reports on the implementation of initiation monitoring and intervention strategy % % 0 No deviation Minutes and attendance registers 0 No deviation Initiation reports 57

59 2.6 TRANSFER PAYMENTS Transfer payments to public entities The Department did not transfer any funds to public entities during the year under review Transfer payments to all organisations other than public entities An amount of R131 million was transferred during the year under review. Transfers are made to municipalities in line with published government gazettes. 2.7 CONDITIONAL GRANTS Conditional grants and earmarked funds paid No conditional grants were paid by the Department during the year under review Conditional grants and earmarked funds received A conditional grant of R2 million was received from the Provincial Treasury for the year under review. An amount of R1, 986 million was spent as at 31 March The grant was part of the EPWP Integrated Grant Project in an attempt to facilitate Public Employment Programmes. 2015/ /2015 Conditional Grant (Over)Under (Over)Under R'000 R'000 R'000 R'000 R'000 R'000 Expanded Public Works Programme Total DONOR FUNDS Donor funds received There were no donor funds received by the Department for the year under review and all the Department s funds are from equitable share or own revenue as disclosed in the Annual Financial Statements. 2.9 CAPITAL INVESTMENT Capital investment, maintenance and asset management plan An amount of R19 million was spent during the year off-which R13 million was spent on immovable assets and R 6 million on movable assets. The Department planned to construct two (2) and renovate two (2) Traditional Councils and a Provincial Disaster Centre that were completed during the year. R10 million was spent on constructing new infra-structure relating to Traditional Councils and the Provincial Disaster Centre and R3 million spent on the renovations and refurbishment of Traditional Councils. 58

60 Progress on the planned construction is depicted in percentages as follows: Construction of the Provincial Disaster Centre -100% complete Lindinxiwa Traditional Council (Construction) -100% complete Amandela Traditional Council (Construction) -100% complete Amadiba Traditional Council (Renovations) -100% complete Amagqunukwebe Traditional Council (Renovations) -60% complete The projects that have been completed will be transferred to Public Works during the 2016/17 financial year; to be included in the Provincial Infra-structure Asset register. During the year under review the Department did not have an investment or infra-structure asset management plan as it is the responsibility and competency of the provincial department of Public Works. Details as to how assets holding have changed over the period under review including information on disposal, scraping and loss due to theft are as follows. 2015/ /2015 Infrastructure projects New and replacement assets Rehabilitation, renovations and refurbishments (Over)/Under (Over)/Under R 000 R 000 R 000 R 000 R 000 R Total During the year the Department spent R 6 million on movable tangible asset. The amount spent relates to operational equipment, computer equipment, office equipment and furniture. During the year the Department lost computer equipment to the value of R ITEM DESCRIPTION OPENING BALANCE 2014/15 ADJUSTMENT TO PRIOR YEAR BALANCES LOSS ADDITIONS 2015/2016 CLOSING BALANCE R'000 R'000 R'000 R'000 R'000 MOTOR VEHICLES COMPUTER EQUIPMENT OTHER MACHINERY AND EQUIPMENT OFFICE EQUIPMENT& OFFICE FURNITURE BIOLOGICAL TOTALS Measures taken to ensure that the Department s asset registers remained up to date during the period under review: Additions to assets are reconciled to the Basic Accounting System (BAS) and LOGIS system on a monthly basis and new assets are bar coded and recorded in the asset register. Physical verification and annual inventory count were done at Head Office, District and Traditional Councils. Where movement of assets are identified, the asset register is updated accordingly. 59

61 The current state of the departments capital assets excluding those managed by the department of Roads and Public Works are as follows: Period Up to 31/03/2009 State of capital assets Bad 01/04/2009 to 31/03/2014 Fair 01/04/2014 to date Good 60

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63 3. GOVERNANCE 3.1 INTRODUCTION The Department is committed to the maintenance of the highest standards of governance to manage public finances and resources in compliance with legislation and relevant prescripts. The Department has sound governance structures in place to effectively, efficiently and economically utilise the state resources to the general benefit of the citizens of this Province. 3.2 RISK MANAGEMENT The Department has an approved Risk Management Policy (Enterprise Risk Management Policy) and it is reviewed every three years or earlier when the need arises to reflect the new developments on risk management. The Department has successfully recruited and appointed a Chairperson for Risk and Security Management Committee that resulted in the quarterly meetings taking place. The Department conducts risk assessment annually and on-going when there are changes in the processes and/or programmes. The risk assessment review session gives management an opportunity to reflect on the existing risks. Management analyse the existing risks, check the effectiveness of the existing mitigation measures and put more action plans to strengthen the existing mitigation measures to reduce the risk to be at an acceptable level. Management is also given an opportunity to identify emerging / new risks and mitigation measures are put in place to mitigate the identified risks. The Risk Management Directorate reports to the Risk and Security Management Committee and Audit Committee on a quarterly basis on management of risks by Management as well as on Risk Management processes, in return, both Oversight Committees advise Management on its performance during each quarterly meeting. Management submits Monthly Risk Management Monitoring Tools, where Management provides progress on the implementation of action plans to improve management of risks, further to that the Risk Management Directorate provides feedback on the submitted progress and remarks by Management on the implementation of risk related action plans to improve management of risks. The purpose of the feedbacks is to provide guidance to the Management on their progress as to whether the risk rating will reduce or not and give recommendations for improvement. Risk Management has already planned to intensify the engagements with Management in the new financial year as reflected in the Risk Management Implementation Plan 2015/ FRAUD AND CORRUPTION The Department have an approved Anti-corruption Policy which is due to be reviewed in the next financial year and a Whistle Blowing Policy that was implemented. Awareness sessions were conducted as part of the implementing the Anti-corruption Policies. A Fraud Risk Register is in place and being maintained on a regular basis. All reported cases of possible fraud and corruption were recorded in a Case Management System. Disclosures of information received were treated confidentially to protect the Whistle Blowers in terms of the Department s policy that is consistent with the Protected Disclosures Act as well as the Whistle Blowing Act. The investigations in municipalities in respect of the complaints received were commissioned by the MEC in terms of Section 106 of the Municipal Systems Act and the internal investigations were commissioned by the Head of Department. The Department provided progress on a quarterly basis of all possible cases of fraud and corruption received to the Office of the Premier through case review meetings. 3.4 MINIMISING CONFLICT OF INTEREST Communication of the Policy to Prohibit Trade and Employment by Employees of the Eastern Cape Provincial Government without Approval Inclusion of the Policy in the Reviewed SCM Policy Declaration of Interest by all members of the Bid Committees before the meeting starts Declaration of Interest by all SCM practitioners 62

64 3.5 CODE OF CONDUCT The Department has a Code of Conduct Manual. Non-compliance always invites disciplinary action. Disciplinary Procedure in terms of the PSCBC Resolution 1 of 2003 is always invoked when there is transgression. The impact and effect of this procedure creates awareness amongst staff members, that when they transgress or found in conflict with the expected behavior then they know the consequences. That knowledge of the consequences creates an environment of peace and stability at the workplace. 3.6 HEALTH SAFETY AND ENVIRNMENTAL ISSUES Integrated Employee Wellness (IEW) comprises of: HIV and AIDS and TB management; Health and productivity management; Wellness management; Safety, Health, Environment and Quality management All this is intended to build and maintain a healthy workforce for increased productivity and excellent service delivery for the benefit of the Department, employees and their families. Through the IEW programme, employees get to know their health status and disclose freely, subjected to counselling which play a great role in the health of the workforce. 3.7 PORTFOLIO COMMITTEES The Portfolio committee meetings were held on the following dates, activities and venues Date Activity Venue :00-13:00 14:00-16:30 Presentation of the annual report overview [MEC and SG] Presentation of Programme :00-11:00 11:00-13:00 14:00-16:30 Presentation of Programme 2 Presentation of Programme 3 Presentation of Programme 4 & :00 Presentation of Financial Oversight Report Portfolio Committee issues raised are reported by subject, details and the responses by the Department. 63

65 RESPONSES TO THE HOUSE RESOLUTIONS ON ANNUAL REPORT 2015 PROGRAMME 1 ADMINISTRATION SUBJECT DETAILS RESPONSE BY DEPARTMENT The COE of the Department is above the Treasury norm and is standing at 77%. Efforts must be made to ensure that the COE of the Department is within the acceptable Treasury norm. The COE budget of the Department has been increased due to the number of Traditional Leaders being paid by the Department. The total COE budget for employees excluding Traditional Leaders equates to 60.3 % of the total budget of the Department which is below the norm. The senior management vacancy rate of the department has increased from 9.26% in the previous year to 26% in the current year. Despite the fact that the Department has incurred an irregular expenditure of R80 228m and the fruitless and wasteful expenditure of R , there was however no consequence management applied for this form of transgression. The Department must ensure that all funded posts are filled in the 2015/16 financial year The Department must ensure that there is consequence management for irregular expenditure and any other forms of transgression and a report with steps taken be submitted to the Committee within 30 days. The 26% vacancy rate includes Operation Clean Audit (OCA) contract posts as reflected in the organizational structure. These OCA posts will be abolished as their contracts are coming to an end in June In terms of the Persal report, the vacancy rate is 13% at the SMS Level. The Department is in a process of investigating all matters relating to unauthorized, irregular and wasteful expenditure and will follow all necessary processes to deal with all those in transgression with the law. In addition, the Department is in a process of developing an MOU with the Department of Roads and Public Works to address the growing irregular expenditure arising from the infrastructure projects wherein SCM processes were not performed in the department. There are three members of the Senior Management who did not sign the Performance Agreements during the year under review. The Department must ensure that measures are taken against the three employees who did not sign the performance agreement and a report on steps taken be submitted to the Committee within 30 days. In relation to the three members of the SMS who did not sign Performance Agreements during the year under review, the Department has written letters to these employees to give reasons as to why they should not be subjected to a disciplinary action regarding their failure to sign performance agreements. Further, they were given a verbal warning. The number of resignations at the Department is very high with 37 during the year under review and this shows a lack of retention strategy. A staff retention strategy to curb the resignations that are happening at the Department must be developed and a report be submitted to the Committee within 30 days. The Attraction and Retention Policy has been developed. However, in some cases there is a challenge in retaining staff due to personal reasons. 64

66 The Department had failed to prevent the loss of R which was as the results of employees leaving the Department. Strong internal control measures must be developed by the Department in order to curb the further losses of funds and a report be submitted to the Committee within 30 days. The employee will be required to sign a Debt Acknowledgement Form before the withdrawal of the pension, failing which a court of law will be approached for a Court Order. An amount of R million remained unspent despite the fact that the Department complained of being under budgeted at the beginning of the year. The Department must properly plan its budget in order to avoid the under expenditure as required by the Treasury Regulations. The Department takes note of the recommendations of the committee. The Department has developed monitoring and control mechanisms to ensure it does not underspend. Those controls include ensuring that commitments are cleared and invoices paid on time. The Department is unable to manage leave properly and leaves are not always submitted on time. The Department must develop a proper and credible leave management system. The Department will apply consequence management for non-compliance with leave policy. The Department had failed to appoint the manager for the Special Programme Unit for the year under review despite the previous recommendations of the Portfolio Committee and Auditor General. The process of appointing the manager for the special programs must be commenced with within 30 days after the adoption of this report. The Manager for Special Programme Unit was appointed on the 01 st January There is a constant failure by the Department to ensure gender balance within the higher levels, despite previous findings by the Committee. The Department must ensure that there is gender balance at management level as required by the Employment Equity Act. The Department is committed in ensuring that there is gender balance at Management level. Recently, a female Deputy Director General: Developmental Local Government has been appointed. The documents of the Department had stickers bearing signatures of the MEC and the HOD instead of proper signatures; the accounting officer blames the Monitoring and Evaluation unit rather than taking responsibility. The MEC must take corrective action against officials who did not do proper quality assurance and those who used stickers on the reports of the Department as this act brings the name of the Department into disrepute. The signature of the MEC is placed on all official documents by the Communications directorate. After printing and a day before submission the wrong signature of the MEC was detected. The only remedy was to arrange for stickers of the signature of the MEC to be placed over the incorrect signature which is normal practice. The signature was placed upside down during printing and not easy to detect. The matter was a bona fide mistake and not negligence and it was corrected as soon as it was detected. PROGRAMME 2 LOCAL GOVERNANCE SUBJECT DETAILS RESPONSE BY DEPARTMENT The Department has failed to implement Operation Clean Audit and it was only Sarah Baartman District and Senqu Local Municipalities that The Department must submit to the Committee a plan on how it is going to assist the municipalities to obtain better audit outcomes. The Department in collaboration with Provincial Treasury and SALGA will develop a Support Plan to improve financial management based on 2014/15 audit outcomes and focussing on municipalities with disclaimers and 65

67 achieved clean audit outcomes in the province. adverse audit opinions. The plan will be submitted to the Portfolio Committee. Most of the Municipalities rely heavily on consultancy for the preparation of the Annual Financial Statement without skill transfer. The Department must build capacity of the Municipalities to prepare their own financial statement and when consultants are used transfer of skills must be prioritized. The Department will advise the municipalities to employ skilled and competent personnel who have an insight on the preparation of the Annual Financial Statements. The Department will also continue to emphasize the inclusion of skills transfer clause on the Service Level Agreement when appointing consultants. Some Municipalities do not have Public Participation and Petitions Unit to deal with community complaints. Municipalities disregard the necessity to summit Employment Contracts and Employment Equity Plans. The Public Participation and Petitions Committee must be established at all Municipalities in order for them to deal with community complaints. The Department must ensure that municipalities submit their Employment Contracts and Equity Plans as required by law. The Rapid Response Unit is in the process of conducting an Audit on the Management of Petitions and Service Delivery Complaints and to ascertain the existing institutional arrangements in place per municipality. A questionnaire has been developed to establish whether institutional arrangements and structures such as petition committees are in place and if they are, how effective and operational are they in each municipality. Once the Audit process has been completed, an analysis report will be tabled to both the Head of Department and Legislature. The Department will also assist those municipalities that do not have such oversight structures to be established. Because of the departmental intervention, some municipalities have already established their Public Participation and Petitions Committees including Nelson Mandela Metro. At the end December 2015, all newly appointed Senior Managers employment contracts and employment equity plans have since been submitted to the Department except for outstanding contracts from Joe Gqabi DM. The matter is being followed through the office of the MEC. Municipalities in the province did not have adequate IT system to ensure the security of the critical information. The Department must assist these Municipalities to procure IT systems that will help them to keep valuable information. The Department in consultation with Local Government ICT Council developed a rollout plan to implement the Municipal Corporate Governance of ICT Policy (MCGICTP) starting with phase 1 which is to be completed by June The MCGICTP aims to guide municipalities on the current and future use of ICT and how it is directed and controlled. The Municipal Manager must create an enabling environment in respect of the Corporate Governance of ICT within the applicable legislative and regulatory 66

68 landscape and information security context. Municipal Management must monitor and evaluate significant ICT expenditure, ensure that ICT expenditure is made for valid Municipal enabling reasons and monitor and manage the benefits, opportunities, costs and risks resulting from this expenditure, while ensuring that information assets are adequately managed. PROGRAMME 3 MUNICPAL DEVELOPMENT AND PLANNING SUBJECT DETAILS RESPONSE BY DEPARTMENT Despite the pronouncement by MEC and Premier of the province, Small Towns Revitalization there are still no visible signs of this project on the ground. The Department must ensure that what was announced by the Premier and the MEC is implemented and a report must be submitted to the Committee within 30 days. The lead Department in the coordination of Small Towns Revitalization Programme, as resolved by the Provincial cabinet, is the Department of Roads and Public Works.In the Province, the Programme is beset by gross under-funding which will make it possible to make any visible changes. For instance, in the Department, the annual budget for Small Town Revitalization for 2015/2016 is R142, 900 which is hardly enough for even conduct coordination of this programme While the Department of Roads and Public Works is mandated to coordinate the programme, it does not have the programme called Small Towns Revitalization in its Department, let alone the budget thereof. Disaster Management Centre is completed, however it is not ready to operate due to cabling and facilities such as South African Weather Services are still to be connected. The Department must ensure that all the outstanding facilities are installed in order for the centre to be fully functional. The Department welcomes and acknowledges the finding and reports that the Provincial Disaster Management Centre progress is as follows: Disaster ICT installation : 100% Fire Detection System : 100% Furniture Fitting (Boardroom /JoC) : 100% Cabling (Internet Connectivity) : 100% Data cabling (internet connectivity) has been completed. The Disaster Information Communication Technology linked to South African Weather Services is due for installation and implementation from 01 July The IDPs of the municipalities did not include the Sector Departmental Plans and this is indicative of poor Intergovernmental Relations. A list of all the Departments that do not co-operate with the municipalities must be compiled and submitted to the Committee and to the Office of the Premier. The participation and contribution of sector departments differ from one municipality to the other, the list is being compiled per district and municipality. 67

69 The programme has a lack of critical skills such land surveyors, Economic and Development Planers. The organogram of the Department must be reviewed in order to address the critical skills that are lacking within the Department. A proposed structure seeks to address the scarcity of necessary skills and to date it has been submitted to the Head of Department for consideration. Despite the fact that the province is the second best in MIG spending the Department has failed to monitor MIG grant. There are municipalities that have a potential of revenue generation because of their locality, Great Kei and Port St John s, among others but are unable to tap into this potential because of the fact that they do not have LED strategy. The Department must closely monitor the MIG in order for it to be the best MIG spender in the country. The Department must assist the local Municipalities to develop LED strategy which identify revenue generation mechanisms that are within the Municipalities. The Department would like to welcome and acknowledges the finding. Further to that, the department reports as follows: The Department has held meetings in all six District Municipalities during October 2015 discussing strategies aimed better performance on MIG allocation. The Department will continuously hold meetings with all municipalities that have applied for rollovers to the Infrastructure Planning Sessions to ensure that municipal projects planned for the next three years are ready for implementation and starting from June Quarterly Pre District Appraisal Committee (DAC) Meetings have been organised and will be convened to assist the municipalities to register projects on MIG - MIS for implementation. Site visits are continuously held to verify projects submitted to the DAC. CoGTA-EC has conducted monthly site visits to monitor the impact of infrastructure to the communities and assist municipalities with non-financial reporting. Quarterly District Wide Infrastructure Fora (DWIF) to be convened in all the Districts to ensure the alignment of municipal plans with those sector departments of their readiness to utilise the available funds. The PSJ LED Strategy was finalized in September 2014 and is currently operational. Several sector Departments are assisting the Municipality to implement the strategy and some of the projects being implemented are as follows : Establishment of the Fruit cluster Support towards informal traders The Great Kei LED Strategy was completed in August 2014 and is also being implemented. Due to financial and capacity constraints facing the municipality, COGTA is in a process of supporting the establishment of LED Forum which would see various strategic partners participating in driving the municipal LED trajectory. The first meeting was promising as it was also attended by the Border-Kei Chamber of Business Chairperson. 68

70 Most of the Municipalities are not implementing Spatial Development Frameworks and only KSD, Nyandeni, Ngquza Hill and Port St Johns were supported to implement SDFs in line with the national guidelines. A detailed plan on how the Department is going to assist the Municipalities to implement SDFs in line with the national guidelines must be submitted to the Committee within 30 days. The process of ensuring compliance and implementation with the national guidelines is an ongoing process. It is linked to the roll out of SPLUMA, the IDP cycle and the assessment of development applications lodged in terms of the prerequisites of various pieces of legislation involving the relevant land use management systems applicable to a municipal space. Every year an assessment is done of municipal SDF s and it has been reported that our focus is on the weakest. This is as a consequence of real budget limitations and hence the small number in the financial year. As a consequence of other emerging priorities our activities must change. The further reduction of budgets in the financial year has made it even more imperative that we focus on the most immediate issues. The rollout of SPLUMA, which includes these national guidelines, is directly linked to the roll out programme of the Department of Rural Development and Land Reform. The priority as far as the roll out is concerned is ensuring that municipalities comply with the basic provisions of this Act which includes the establishment of either stand-alone Municipal Planning Tribunals or joint ventures, involving the formulation and adoption of agreements, the adoption of by-laws and delegations required by the new law. These are critical if our municipalities are to function and hence deliver. PROGRAMME 4 TRADITIONAL INSTITUTIONAL MANAGEMENT AND PROGRAMME 5 HOUSE OF TRADITIONAL LEADERS SUBJECT DETAILS RESPONSE BY DEPARTMENT The pace of the construction of Traditional Councils is very slow and the Department has a backlog of 79 Traditional Councils. A detailed plan on how the Department is going to speed up the process of the construction of Traditional Councils must be submitted to the Committee with time frames. There is a backlog related to Traditional Council infrastructure amounting to R863, 700,000, the schedule of this backlog analysis has been submitted to Provincial Treasury during October The Department does not have sufficient funding to deal with the infrastructure backlog hence the submission was done to Provincial Treasury. During the MTEF period the department is allocated an annual allocation of +-R5m which is a drop in the ocean compared to TC Infrastructure backlog as attached. 69

71 It should be noted that the branch does not have professional and technical expertise to deal with TC infrastructure monitoring hence utilizing skills from Public Works. The Commission for Traditional Leadership Claims and Disputes has completed 149 cases and 84 of these cases are awaiting for the pronouncement by the Office the Premier. The MEC must engage the Office of the Premier to speed up the process of the announcement of these cases. Since its establishment until end of December 2015, the Committee: Commission for Traditional Leadership Claims and Disputes completed and submitted all 170 recommendations of claims and disputes to the Premier for consideration, the following is the progress: 155 claims and disputes pronounced by the Premier. 15 claims and disputes not yet pronounced by the Premier, these will be pronounced by Premier during the 4th quarter of the current financial year The Eastern Cape Traditional Leadership and Governance Bill and the Initiation Bill are taking too long to be finalized. Efforts must be put in place in order to ensure that the Bills will be finally introduced to the Legislature. 12 cases of claims and disputes from the pronounced ones have been taken to court. EC Traditional Leadership Governance Bill, 2015 Gazetted and published on the Local newspapers for public comment. The Bill presented in G&A Cluster and certified by State Law Advisors and subsequently presented to EXCO. Some of Inkosana in the province are not linked to the Administrative areas but to their own villages. The Department must ensure that all Headmen are aligned to Administrative Areas and this is going to help to reduce the number of Headmen that is causing a strain to the Budget of the Department. This Bill had subsequently sent for translation and the translated version has been received back by CoGTA-EC on 14 the January Currently the translated version of this Bill is going through a verification and certification process by CoGTA-EC and the State Law Advisory to make way for submission and introduction to the Provincial Legislature. EC Customary Male Initiation Practice Bill, 2015 Gazetted and published on the Local newspapers for public comment. The Bill presented in G&A Cluster and certified by State Law Advisors and subsequently presented to EXCO. This Bill has been translated and 100 copies of the certified versions have been submitted to Legislature on the 13 th of November All Headmen in the province are in charge of Administrative Areas, but in some parts of the province villages were called Administrative Areas and the Department is addressing that in line with the Moratorium. 70

72 There are 8 Traditional Councils that are still not in line with the provisions of Traditional Leadership and Governance Framework Act. The Department must ensure that all Traditional Councils are reconstituted in line with the Traditional Leadership and Government Framework Act. The Department is developing a plan to reconstitute all Traditional Councils including the 8 that were not done previously. The privileges and benefits that are accorded to the Senior Traditional Leaders in the Republic are not the same. Some of the Traditional Councils do not have bank accounts and as the results moneys of the councils are deposited to individual bank accounts. The MEC must engage the Minister of CoGTA to interact with the President with the view of addressing the privileges and benefits that are accorded to Senior Traditional Leaders. The Department must encourage the Traditional Councils to open up Bank Accounts in order to keep the funds of the councils away from individuals. The Department agrees with the recommendations and will ensure that it is implemented. The recommendation of the Committee is noted and the Department is embarking on that process of encouraging and assisting Traditional Councils to open bank accounts and account for funds utilization to the Communities. GENERAL SUBJECT DETAILS RESPONSE BY DEPARTMENT The Department alleges that the Department of Roads and Public Works is contributing to the irregular expenditure incurred by the Department by not following proper SCM processes when they do work for the Department. The MEC for the Department of Roads and Public must ensure that correct SCM processes are followed when the Department is procuring for any services for the sister Departments and must also take corrective action in respect of officials who are not following the correct SCM processes. The Department is in a process of investigating all matters relating to unauthorized, irregular and wasteful expenditure and will follow all necessary processes to deal with all those in transgression with the law. In addition, the department is in a process of developing an MOU with the Department of Roads and Public Works to address the growing irregular expenditure arising from the infrastructure projects wherein SCM processes were not performed in the Department. 71

73 RESPONSES TO HOUSE RESOLUTIONS ON FINANCIAL OVERSIGHT REPORT 2015 PROGRAMME 1 ADMINISTRATION SUBJECT DETAILS RESPONSE BY DEPARTMENT The Department is overspending on its Goods and Services and at half year it has spent %. The Department is under spending on its Transfers and Subsidies and the expenditure is standing at 5, 9%. The Department must ensure that the overspending on Goods and Services is addressed during the adjustment appropriation. The Department must submit a plan to the Committee which details how the potential under-expenditure in this Program will be prevented with 30 days of the adoption of this report. The recommendations are noted. The Department has considered the adjustment during the adjustment estimate period and revised the cash flow projections accordingly. The Department welcomes the finding and recommendation on collaboration and requests that the following be noted: The Department supports municipalities at district level to coordinate support and integrate common operational areas amongst local municipalities that make up the district. This is done through a coordination structure called the District Support Team (DST), which are LED IGR platforms chaired and organized by the respective 6 district municipalities. In this regard the status on the two District Municipalities is as follows: The Chris Hani DST is functional and meets quarterly where various provincial departments participate. A consolidated workplan for 2015/16 is in place and integrates the activities of the various public sector departments. Amathole District Municipality: The DST as an integrated LED IGR platform has not been functional since the departure of the LED Manager in Amathole District. The department has formally written to the Municipal Manager requesting that capacity be provided to resuscitate the structure. The Department is following up with the Municipal Manager to convene the DST. The Department also supports municipalities to partner with targeted business institutions operating within their jurisdictions in order to build capacity of the municipality to deliver on service delivery imperatives, in particular LED related areas. This programme is called Business Adopt a Municipality (BAaM) and the 72

74 There are 31 invoices to the value of R3, 067, 760 that were paid after 30 days. The Department has a vacancy rate of 18.07% which is very high. The Department must ensure that all the creditors are paid within 30 days payment period as per Treasury Regulations. The Department must engage Provincial Treasury with a view of ensuring that all vacant posts will be funded and therefore filled in the next financial year. following partnerships have amongst others been established on the basis of 5 year MOUs signed between the partners. In the case of Nkonkobe regional collaboration there is a MOU with the University of Fort Hare. A workplan is in place and is being implemented. The Department continues to support this partnership. In the case of Nelson Mandela Bay collaboration with SAB, the SAB/NMBM Project Steering Committees (PSCs) meets on a quarterly basis and is implementing its work-plan. Progress includes integrated training on water management infrastructure between SAB and the NNBMM. There are controls in place to ensure that creditors are paid within the stipulated time, such as the Invoice Tracking Tool developed and implemented. The tool assists in monitoring the movement of payment batches from the point of entry to the disbursement date; it also calculates how long it takes for a payment to be processed. The root causes are then analyzed and discussed with Supply Chain Management. There are weekly meetings to discuss any bottlenecks in the payment process by the concerned directorates. There is an approved Recruitment Plan for 2016/2017, which will address the high vacancy rate in the department. PROGRAMME 2 LOCAL GOVERNANCE SUBJECT DETAILS RESPONSE BY DEPARTMENT A total of 12 municipalities in the province have not adopted Back-to- Basics Action Plans. The Department must ensure that all municipalities adopt the Back to Basic Action Plans as required by the Back to Basic Service Delivery Model. To date it is only the KSD Local Municipality that has since not adopted its Back to Basics Action Plan which will now be presented for consideration and adoption in the next Council Meeting set for the 27th January The Strategic Plans of the Sector Departments are not aligned to the Back to Basic Service Delivery Model. The Premier of the Province must intervene to ensure that all sector departments align their strategic plans with municipal IDPs. Municipal Back to Basics Action Plans were made available to the Office of the Premier (OTP) for circulation to the respective Heads of Departments and this process is being implemented through the 73

75 Provincial Management Meetings wherein Heads of Departments engage on the alignment of the Back to Basic Service Delivery Model. The organograms of the municipalities are not aligned to their IDPs and the department has assisted two municipalities to align their organograms with their IDPs. The organograms of the municipalities must be aligned to their IDPs in order for them to improve in the delivery of services. The organograms for Blue Crane Route Local Municipality and OR Tambo District Municipality have been reviewed and aligned with their IDP s and NMBMM and Makana LM s are still work in progress. Despite the fact that the District Support Teams have been established in all Districts and the Metros however it is only Amathole and the Metros that have functional Support teams. The Department must ensure that the District Support Teams are functional at all District and Metropolitan Municipalities. The planned District Wide Back to Basics Approach engagements of March 2016 are intended to contribute towards strengthening the functionality of the Metro/District Back to Basics Multi-Disciplinary Task Teams (MDBTT). This process will start in February 2016 through the CoGTA-EC Metro/District Support Centres by working with OTP in coordinating some government departments, agencies and SOEs as well as the affected District Municipalities in realizing the functionality of the MDBTT. The Makana and Inxuba Yethemba local Municipalities have not submitted their Work Skills Plans to the Local Government SETA. The Department must ensure that Inxuba Yethemba and Makana Local Municipalities submit their Work Skills Plan as required by law. The Department has rendered technical assistance in the two municipalities and have since taken remedial steps. PROGRAMME 3 MUNICIPAL DEVELOPMENT AND PLANNING SUBJECT DETAILS RESPONSE BY DEPARTMENT There is under expenditure in this program which is currently standing at 30.41%. The Department must within 30 days submit a plan to the Committee which details how the potential underexpenditure in this Program will be prevented. The Department in its endeavor to intervene in troubled municipalities has in 2015/16 allocated a R70 million for water crisis in Chris Hani District Municipality. The allocated fund was ear-marked for Engcobo, Sada and Molteno of which projects started in 2015/16 financial year and are expected to be completed at the end of September The R70 million has been allocated over two years in 2015/16 and 2016/17 with allocation R30 million and 40 million respectively. In December 2015, R10 million was taken from the R30 million allocation for the financial year which leave R20 million to be spent in this current financial year. From the remaining R20 million for the 2015/16 financial year, the 74

76 Chris Hani District Municipality, Amathole District Municipality, Nkonkobe Local Municipality and Nelson Mandela Metropolitan Municipality were not supported to promote strategic municipal and regional collaborations. A detailed plan on how the Department is going to assist these Municipalities must be submitted within 30 days to the Committee. municipality has spent R8, 651 million which is 43%. Invoices of R2, 656 million have been submitted by the municipality and the department is processing payment. The remaining balance after the payment of invoices will be R8, 693. At the beginning of this financial, all projects were at tender and design stages. Currently, Contractors are on site on two projects which are Sada and Engcobo The Department supports municipalities at district level to coordinate support and integrate common operational areas amongst local municipalities that make up the district. This is done amongst others through a coordination structure called the District Support Team (DST), chaired and organized by the respective District Municipality. In this regard the two District Municipalities that attracted deviation are both the Chris Hani and Amathole Districts. The Chris Hani District DST was unable to convene in the first quarter due to commitment of the member municipalities as they were in the close of their financial year. The Department made several attempts to convince the Amathole District Municipality to convene the DST to no satisfactory resolve. Meetings were held and s written to the Director: LED to no avail. s were further written to the office of the Municipal Manager soliciting a meeting to resuscitate the structure (DST) however, we could not get the audience of the Municipal Manager. The Department then wrote a letter through the HoD to plead with the municipality to prioritize the functionality of the structure, still to no avail. The Department is henceforth strengthening the LED Forums of Local Municipality to at least coordinate LED efforts within the respective local Municipalities.. The Department also supports municipalities to partner with targeted business institutions operating within their jurisdictions in order to build capacity of the municipality to deliver on service delivery imperatives, in particular LED related areas. This 75

77 programme is called Business Adopt a Municipality (BAaM) and the following partnerships had been established: Elundini/PG Bison, Mercedes Benz/BCMM, University of Fort Hare/Nkonkobe LM and SAB/NMBM. The two deviations from both the University of Fort Hare/Nkonkobe and SAB/NMBM were due to the Project Steering Committees (PSCs) not seating due to the committed schedules of partners however work streams were undertaking agreed upon work on the ground. Such PSC meetings were thus convened in the second quarter and project work on the ground was monitored. PROGRAMME 4 TRADITIONAL INSTITUTIONAL MANAGEMENT AND PROGRAMME 5 HOUSE OF TRADITIONAL LEADERS SUBJECT DETAILS RESPONSE BY DEPARTMENT The Department has not met a target of developing a policy for the Traditional Leadership Institutions. The policy that will be governing traditional matters in the Province must be developed and a copy of that policy must be submitted to the Committee. The policy on the Financial Management of Traditional Councils has been finalised and approved by Executive Authority on the 15 th December 2015.(copy attached hereto). Out of 19 cases of claims and disputes that were received by the House of Traditional Leaders 4 cases are still not finalized. The Department must assist the House to finalize all the cases that are pending before it. The Department had dedicated sufficient resources to handle the finalization of all cases of claims and disputes; the current observation is reflecting progress. All the cases will be finalised during the fourth quarter of 2015/

78 3.8 SCOPA RESOLUTIONS The Department was not invited to SCOPA meetings for the year under review 3.9 PRIOR MODIFICATIONS TO AUDIT REPORTS No prior modifications were made to the Audit Report 3.10 INTERNAL CONTROL UNIT The Department does not have a dedicated Internal Control Unit in place and the responsibility for the effective implementation of internal controls lies with individual directorates. Controls are addressed through the implementation of recommendations by the Office of the Auditor General as well as the Internal Audit Directorate. The Risk Management Directorate evaluates controls directly linked to risks identified and also makes recommendations regarding the improvement of controls INTERNAL AUDIT AND AUDIT COMMITTEES REPORT OF THE AUDIT AND RISK COMMITTEE FOR THE YEAR ENDED 31 MARCH 2016 We are pleased to present our report for the 2015/2016 financial year. The Audit and Risk Committee reports that it has complied with its responsibilities arising from Section 51 (1)(a)(ii) and Section 76 of the Public Finance Management Act and Treasury Regulation 27.1 The Audit and Risk Committee also reports that it has adopted appropriate formal terms of reference as its Audit and Risk Committee Charter and has regulated its affairs in compliance with this charter and also discharged all its responsibilities as contained therein. The Audit Committee of the Department comprised of five independent members whose term of office commenced on 01 November 2014 and consists of the following members: Mr P G Zitumane (Chairperson), Ms T Moja, Ms I Kriel, Ms A. Whittal and Adv V Msiwa. The two committee members being Adv V Msiwa and Ms A Whittal are no longer providing services to the Department. Adv V Msiwa s services were terminated by the Department due to his inability to attend meetings as a result of other pressing matters and Ms A Whittal has resigned due to relocation overseas. During the year under review the Audit Committee held 4 scheduled and 2 special meetings. ORDINARY MEETINGS SPECIAL MEETINGS COMMITTEE MEMBER Scheduled Attended Scheduled Attended 1. Mr PG Zitumane Ms T Moja Ms I Kriel Ms A Whittal Adv V Msiwa EVALUATION OF INTERNAL CONTROLS In order to meet its responsibility of providing reliable financial information, the Department maintains financial and operational systems of internal control. These controls are designed to provide reasonable assurance that transactions are concluded in accordance with management s authority, that the assets are adequately protected against material loss of unauthorised acquisition, use or disposition, and the transactions are properly authorised and recorded. Whilst the members of the Audit Committee believe that the system of internal controls largely covers organisational, financial and operating risks, control weakness are periodically identified during the Internal and external audit processes. The Committee closely monitors management s actions to remedy these deficiencies. 77

79 In conducting its duties, the Audit Committee has, inter alia, reviewed the following: i. The effectiveness of the internal control systems; ii. The operational risk areas covered in the scope of internal and external audits; iii. The adequacy, reliability and accuracy of financial information provided to management; iv. Any accounting and auditing concerns identified as a result of internal and external audits; v. Compliance with legal, accounting and regulatory frameworks; vi. The activities of the Internal Audit Function, including its annual work programme. The system of internal control applied by the Department remains effective, efficient and transparent. In line with the PFMA and the King III Report on Corporate Governance requirements, Internal Audit provides the Audit Committee and management with the assurance that the internal controls are appropriate and effective. The system includes a documented organisational structure and division of responsibility, established policies and procedures which are communicated throughout the organisation, and the careful selection, training and development of staff. During the financial year the Audit and Risk Committee met with management on a quarterly basis to track their progress in resolving outstanding internal control issues previously raised by the Auditor-General and Internal Audit. In conclusion in respect of the internal control environment, based on our review of the findings of the Internal Audit work, which was based on the risk assessments conducted in the Department revealed weaknesses, which were then raised with the organisation. RISK MANAGEMENT The Department has an approved risk management strategy in place. This strategy is the foundation for a continuous risk assessment process and for managing and monitoring of risks on an ongoing basis. Progress on the implementation of the risk management strategy was reported to the Audit Committee on a quarterly basis. Management is continuously developing and enhancing its risk and control procedures to improve the mechanisms for identifying and monitoring risks. The Department has an approved Risk Management Framework and Fraud Prevention Plan. The Audit Committee is satisfied that the actual management of risk is receiving attention, although there are areas that still require improvement in line with best practice and applicable policies. INTERNAL AUDITING The Audit and Risk Committee notes that during the year under review, a reasonable amount of internal audit work was performed in the Department. An internal audit plan for 2015/2016 was developed and carried out by the Internal Audit Unit of the Department. Our review of the findings of the Internal Audit work, which was based on the risks assessments conducted by the Department, revealed certain weaknesses which were then raised with management. A system to track the implementation of internal audit findings was implemented during the year and this has contributed significantly to ensuring that the internal control environment for the Department remains relevant. We believe as the Audit Committee that the Internal Audit Unit of the Department provided a supportive role to management and the Audit Committee. MATTERS REQUIRING SPECIFIC MENTION The Audit Committee notes the instability at the top management level of the Department particularly in the office of the Head of Department and that of the Chief Financial Officer. Although the full extent of the implications of this has not been established yet, these events are of concern to the Audit Committee as these could adversely impact the performance of the Department and expose it to certain risks. EVALUATION OF THE ANNUAL FINANCIAL STATEMENTS AND PERFORMANCE INFORMATION The Committee has reviewed the following: the accounting policies and practices of the Department. 78

80 the Annual Financial Statements and performance information included in the Annual Report. The monitoring of the Department s performance is a key function of management, executive management and the Department. The Audit Committee has no direct line responsibility for the Department s performance measurement. However, the Committee has ensured, principally through the internal audit function, that the systems of performance measurement and reporting, as well as the systems of internal control that underpin the performance management framework of the Department, remain robust and are addressed routinely in the audit plans. The Audit Committee also obtained assurance from management and internal audit that the Department s performance management system adequately and effectively reports appropriate and relevant information. The Audit Committee has accepted the responsibility to ensure adequate reporting on performance information and the policies and that the procedures are of a standard acceptable to the Department. The Committee s charter acknowledges this responsibility. The Audit Committee has taken note of the Performance Information Report which compares the actual performance of the Department against the predetermined objectives. IN CONCLUSION The Department obtained an unqualified audit outcome for the year ended 31 March 2016 as reported by the Auditor General of South Africa. The Department, supported by the Audit Committee remains committed to ensuring that it delivers on its mandate and the audit outcome is improved or maintained at the very least in the ensuing financial years. I would like to thank all members of the Audit Committee for their contribution, guidance and the professional way in which meetings were conducted. The Audit Committee wishes to express to the MEC, the Head of Department, management and staff of the Department, its sincere appreciation for the engagement and commitment shown during the year under review. P G Zitumane Chairperson of the Audit Committee 19 August

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82 4. HUMAN RESOURCE MANAGEMENT 4.1 INTRODUCTION The value of human capital in the department The Human Resources are the most important asset of the department, because its success depends on the performance of its employees. Human Capital is at the centre of the performance of the Department. The Department relies on competencies and skills of its workforce for it to achieve its strategic objectives. The Department in its endeavour to keep up with the expected service delivery priorities has embarked, inter-alia in the following human resource initiatives: Training and development initiatives which includes bursary programme, internship programme, etc. Employee health and wellness facilities Performance management and development programmes Overview of HR matters at the department HR management environment in the Department is categorized as follows: Public Servants, and Traditional Leaders The Department provides the following key HR functions: Provision of optimal development of departmental human resources, Rendering of human resources management services that includes recruitment, conditions of service, PERSAL management, Rendering of organizational transformation and planning services, and Rendering of Employee Relations services that includes labour relations and employee wellness services Set HR priorities for the year under review and the impact of these priorities HR PRIORITIES Job Evaluation Recruitment and Selection Counselling cases conducted on referred cases as well as full implementation of grievances and misconduct Training and Development of employees Full implementation of Performance Management and Development System and it maintenance. Employment Equity HR Information Management Succession Planning IMPACT OF THESE PRIORITIES The impact is not that good due to the fact that job evaluated posts are very few and they are only five (5) in senior management and fifteen (15) in middle management. There has not been much in recruitment and selection during the 2015 / 16 financial year due to the moratorium on recruitment which was lifted towards the end of the financial year. Much work has been done by Employee Wellness and that resulted in reduction of employees looking for counselling. A high number of females totaling two hundred and fifty four as against ninety four males received training. Most employees who have received performance bonus are more motivated to do more on their work. There has not been much improvement on the implementation of employment equity. It s an area where we still have challenges in terms of integration of registry and PERSAL. It is not yet started with its implementation. 81

83 Workforce planning framework and key strategies to attract and recruit a skilled and capable workforce Adequacy of compensation, Job design that will engender job satisfaction, More satisfying job conditions, facilities and resources, Competent leadership and management, and Accommodation for career planning and potential prospects within work environment. Employee performance management framework The Performance Management Development System which plays a major role in ensuring that work done by employees based on their Operational Plans is assessed quarterly and annually and where gaps are identified, remedial plans are implemented. Employee wellness programmes The Department in its implementation of the Employee Wellness Programme is guided by the implementation of four (4) pillars as determined by DPSA. Highlight achievements; The following have been achieved by the Department: Developed and reviewed five (5) HR policies including Terms of Reference for the Employment Equity Committee. Reviewed HR Delegations. Challenges faced by the Department; The limited budget makes it difficult to implement all Human Resource Priorities such recruitment and selection, succession planning etc. Future HR plans /goals Decentralization of functions to district level, Resourcing of district offices, Capacity development initiatives, Organizational support initiatives, Economic growth and development initiatives 82

84 4.2 HUMAN RESOURCES OVERSIGHT STATISTICS Personnel related expenditure The following tables in the next page summarise the final audited personnel related expenditure by programme (Table ) and by salary bands (Table ). In particular, it provides an indication of the amounts spent on personnel. Table Personnel expenditure by programme for the period 1 April 2015 to 31 March 2016 Programme Total expenditure Personnel expenditure Training expenditure Professional and special services expenditure Personnel expenditure as a % of total expenditure Administration Local Governance Development & Planning Traditional Institutional Management House of Traditional Leaders Total as on Financial Systems (BAS) Notes Note 1: The amount of total expenditure agrees with the total expenditure for the Department that agrees to the Statement in the Annual Financial Statements. Note 2: The amount of personnel expenditure agrees to the total expenditure for compensation of employees as disclosed in the Annual Financial Statements. Note 3: The amount for training expenditure agrees with the total expenditure for training and development as disclosed in the note for goods and services in the Annual Financial Statements. Note 4: The amount for professional and special services agrees to the total expenditure for consultants and professional services as disclosed in the note for goods and services in the Annual Financial Statements. Note 5: The personnel expenditure in note 2 calculated as a percentage of the total expenditure in note 1. Note 6: The amount reflects the total personnel expenditure divided by the number of employees. Table Personnel costs by salary band for the period 1 April 2015 to 31 March 2016 Salary band Personnel expenditure (R 000) % of total personnel cost No of employees Average personnel cost per employee Skilled (Levels 3-5) % Highly skilled production (Levels 6-8) Highly skilled supervision (Levels 9-12) Senior management (Levels 13-16) % % % Contract (Levels 1-2) % Contract (Levels 3-5) 227 0% Contract (Levels 6-8) % Contract (Levels 9-12) %

85 Salary band Personnel expenditure (R 000) % of total personnel cost No of employees Average personnel cost per employee Contract (Levels 13-16) % Inkosana /Headmen % Lower skilled (Levels 1-2) % TOTAL % The following tables in the next page provide a summary per programme (Table ) and salary bands (Table ) of expenditure incurred as a result of salaries, overtime, housing allowance and medical assistance. In each case, the table provides an indication of the percentage of the personnel budget that was used for these items. Table Salaries, Overtime, Home Owners Allowances and Medical Aid by programme for the period 1 April 2015 to 31 March 2016 Programme Salaries Overtime Home owners allowance Medical aid Amount R 000 Salaries as a % of personnel costs Amount R 000 Overtime as a % of personnel costs Amount R 000 HOA as a % of personnel costs Amount R 000 Medical aid as a % of personnel costs Administration , Local Governance Development and Planning Traditional Institutional Management House of Traditional Leaders Total Note: Salaries, overtime, housing allowance and medical assistance are calculated as a % of the total personnel expenditure which appears in Table above 84

86 Table Salaries, Overtime, Home Owners Allowances and Medical Aid by salary band for the period 1 April 2015 to 31 March 2016 Salary band Salaries Overtime Home owners allowance Medical aid Amount R 000 Salaries as a % of personnel costs Amount R 000 Overtime as a % of personnel costs Amount R 000 HOA as a % of personnel costs Amount R 000 Medical aid as a % of personnel costs Skilled (Levels 3-5) Highly skilled production (Levels 6-8) Highly skilled supervision (Levels 9-12) Senior Management (Levels 13-16) Contract (Levels 1-2) Contract (Levels 3-5) Contract (Levels 6-8) Contract (Levels 9-12) Contract (Levels 13-16) Inkosana / Headmen Lower skilled (Levels 1-2) % % % 974 6% % 110 0% % % % % % % % 0 0% % 778 1% % 0 0% 0 0% 0 0% % 0 0% % % % 0 0% % 0 0% % 0 0% % % % 0% % % % 0 0% 0 0% 0 0% % 0 0% 0 0% 0 0% Total % 249 0% Employment and Vacancies The tables in this section summarise the position with regards to employment and vacancies. The tables summarise the number of posts on the establishment, the number of employees, the vacancy rate, and whether there were any staff that were additional to the staff establishment. This information is presented in terms of three key variables namely programme, salary band and critical occupations. 85

87 Table Employment and vacancies by programme as on 31 March 2016 Programme Number of posts on approved establishment Number of posts filled Vacancy rate Number of Employees additional to the staff establishment Administration % 1 Developmental Local Government % 3 Development and Planning % 0 Traditional Institutional Management % 2 House of Traditional Leaders % 0 Total % 6 Kings 6 5 3% 0 Senior Traditional Leaders % 0 Inkosana % 0 Table Employment and vacancies by salary band as on 31 March 2016 Salary band Number of posts on approved establishment Number of posts filled Vacancy rate Number of Employees additional to the staff establishment Skilled (Levels 3-5) % 1 Highly skilled production (Levels 6-8) % 1 Highly skilled supervision (Levels 9-12) % 0 Senior management (Levels 13-16) % 0 Contract (Levels 1-2) % 0 Contract (Levels 3-5) 1 1 0% 0 Contract (Levels 6-8) 2 2 0% 0 Contract (Levels 9-12) 9 9 0% 2 Contract (Levels 13-16) % 2 Total % 6 Kings % 0 Senior Traditional Leaders % 0 Inkosana % 0 Note: The information in each case reflects the situation as at 31 March For an indication of changes in staffing patterns over the year under review, please refer to section of this Annual Report. 86

88 Table Employment and vacancies by critical posts as on 31 March 2016 Critical occupation Number of posts on approved establishment Number of posts filled Vacancy Rate in percentage Number of Employees additional to the staff establishment Appraisers-valuers and related Professionals % 0 Architects Town and Traffic Planners % 0 Cartographers and Surveyors % 0 Cartographic Surveying and related Technicians 1 1 0% 0 Engineering Sciences related % 0 Engineers and related Professionals 4 4 0% 0 Financial and related Professionals 6 6 0% 0 General Legal Administration and related Professionals % 0 Legal and related 1 1 0% 0 Senior Managers % 0 Total % Filling of SMS Posts The tables in this section provide information on employment and vacancies as it relates to members of the Senior Management Service by salary level. It also provides information on advertising and filling of SMS posts, reasons for not complying with prescribed timeframes and disciplinary steps taken. Table SMS post information as on 31 March 2016 SMS Level Total number of funded SMS posts Total number of SMS posts Filled % of SMS posts filled Total number of SMS posts vacant % of SMS posts vacant Head of Department Salary level % 0 0 Salary level % 1 33% Salary level % 5 36% Salary level % 8 10,2% Total % 14 14% 87

89 Table SMS post information as on 30 September 2015 SMS Level Total number of funded SMS posts Total number of SMS posts filled % of SMS posts filled Total number of SMS posts vacant % of SMS posts vacant Head of Department Salary level % 0 0% Salary level % 1 33% Salary level % 5 36% Salary level % 9 11% Total % 15 15% Table Advertising and filling of SMS posts for the period 1 April 2015 to 31 March 2016 SMS Level Total number of funded SMS posts Total number of SMS posts filled % of SMS posts filled Total number of SMS posts vacant % of SMS posts vacant Head of Department Salary level % 0 0% Salary level % 1 33% Salary level % 6 43% Salary level % 10 13% Total % 17 18% Table Disciplinary steps taken for not complying with the prescribed timeframes for filling SMS posts within 12 months for the period 1 April 2015 to 31 March 2016 Reasons for vacancies not advertised within six months : Budget cut Reasons for vacancies not filled within six months : Moratorium Job Evaluations Within a nationally determined framework, Executing Authorities may evaluate or re-evaluate any job in his or her institution. In terms of the Regulations all vacancies on salary levels 9 and higher must be evaluated before they are filled. The following table summarises the number of jobs that were evaluated during the year under review. The table also provides statistics on the number of posts that were upgraded or downgraded. 88

90 Job evaluation by salary band for the period 1 April 2015 to 31 March 2016 Salary band Number of posts on approved establishment Number of Jobs Evaluated % of posts evaluated by salary bands Posts Upgraded Number % of posts Evaluated Posts downgraded Number % of posts Evaluated Contract (Levels 6-8) Contract (Levels 9-12) Contract Level 13 Contract Level 16 Skilled (Levels 3-5) Highly skilled production (Levels 6-8) Highly skilled supervision (Levels 9-12) Senior Management Service Level 13 Senior Management Service Level 14 Senior Management Service Level Total Profile of employees whose positions were upgraded due to their posts being upgraded for the period 1 April 2015 to 31 March 2016 Gender African Asian Coloured White Total Female Male Total Employees with a disability

91 Employees with salary levels higher than those determined by job evaluation by occupation for the period 1 April 2015 to 31 March 2016 Gender African Asian Coloured White Total Female Male Total Employees with a Disability Employees with salary levels higher than those determined by job evaluation by occupation for the period 1 April 2015 to 31 March 2016 Occupation Number of employees Job evaluation level Remuneration level Reason for Deviation Salary level Total number of employees whose salaries exceeded the level determined by job evaluation 0 Percentage of total employed 0% Profile of employees who have salary levels higher than those determined by job evaluation for the period 1 April 2015 to 31 March 2016 Gender African Asian Coloured White Total Female Male Total Employees with a disability Employment changes This section provides information on changes in employment over the financial year. Turnover rates provide an indication of trends in the employment profile of the Department. The following tables provide a summary of turnover rates by salary band and critical occupations Annual turnover rates by salary band for the period 1 April 2015 to 31 March 2016 Salary band Permanent Number of employees at beginning of period-1 April 2015 Appointments and transfers into the Department Terminations and transfers out of the Department Turnover Rate Skilled (Levels 3-5) % Highly skilled production (Levels 6-8) % Highly skilled supervision (Levels 9-12) % Senior Management Service Level % Senior Management Service Level % Senior Management Service Level % Senior Management Service Level % 90

92 Salary band Permanent Number of employees at beginning of period-1 April 2015 Appointments and transfers into the Department Terminations and transfers out of the Department Turnover Rate Contract (Levels 1-2) % Contract (Levels 3-5) % Contract (Levels 6-8) % Contract (Levels 9-12) % Contract Level % Contract Level % Contract Level % Total % Note: A transfer is when a Public Service official moves from one Department to another, on the same salary level. Terminations (80) and transfers (12). Table Annual turnover rates by critical occupation for the period 1 April 2015 to 31 March 2016 Critical occupation Permanent Number of employees at beginning of period 1 April 2015 Appointments and transfers into the Department Terminations and transfers out of the Department Turnover rate Appraisers-valuers and related Professionals Architects Town and Traffic Planners Cartographers and Surveyors Legal related, Permanent Engineering Sciences related Engineers and related Professionals Financial and related Professionals General legal administration and related Professionals Human resources, organisational development and related Professionals Senior Managers Total Table Reasons why staff left the Department for the period 1 April 2015 to 31 March 2016 Termination Type Number % of Total Resignations Death % Resignation % Expiry of contract 2 2,5% Discharged due to ill health % Dismissal-misconduct % 91

93 Termination Type Number % of Total Resignations Retirement 32 40% Total Note: Table identifies the various exit categories for those staff members who have left the employ of the Department. Table Promotions by critical occupation for the period 1 April 2015 to 31 March 2016 Occupation Employees 1 April 2015 Promotions to another salary level Salary level promotions as a % of employees by occupation Progressions to another notch within a salary level Notch progression as a % of employees by occupation Appraisers, valuers and related Professionals Architects Town and Traffic Planners 2 0 0% 0 0% 6 0 0% % Cartographers and Surveyors 3 0 0% % Engineering Sciences and related Engineers and related Professionals Financial and related Professionals General legal administration and related Professionals Human resources, Organisational development and related Professions % % 6 0 0% % % 25 61% 2 0 0% 0 0% 3 0 0% % Legal and related 1 0 0% 0 0 Senior Managers % Total % % 92

94 Table Promotions by salary band for the period 1 April 2015 to 31 March 2016 Occupation Employees 1 April 2015 Promotions to another salary level Salary level promotions as a % of employees by occupation Progressions to another notch within a salary level Notch progression as a % of employees by occupation Skilled (Levels 3-5) % % Highly skilled Production (Levels 6-8) % % Highly skilled supervision (Levels 9-12) % % Senior Management (Levels 13-16) % % Contract (Levels 1-2), % 0 0% Contract (Levels 3-5) 1 0 0% 0 0% Contract (Levels 6-8) 2 0 0% 0 0% Contract (Levels 9-12) 9 0 0% % Contract (Levels 13-16) % % Total % % Employment equity Table Total number of employees (including employees with disabilities) in each of the following occupational categories as on 31 March 2016 NB.: The above table was done away with by the Department of Labour since 2009, therefore your attention should be drawn to the next table (Employment Equity form EA4 was amended). Table Total number of employees (including employees with disabilities) in each of the following occupational bands as on 31 March 2016 Occupational category Permanent Male Female Total African Coloured Indian White African Coloured Indian White Top Management Senior Management Professionally qualified and experienced specialists and middle management Skilled technical and academically qualified workers, junior management, supervisors, foremen Semi-skilled and discretionary decision making Contract (Top Management)

95 Occupational category Permanent Contract (Senior Management) Contract (Professionally qualified) Skilled technical and academically qualified workers, junior management, supervisors, foremen contract Semi-skilled and discretionary decision making Contract Contract (Unskilled), Permanent Male Female Total African Coloured Indian White African Coloured Indian White Total Table Recruitment for the period 1 April 2015 to 31 March 2016 Occupational category Permanent Male Female Total African Coloured Indian White African Coloured Indian White Top Management Senior Management Professionally qualified and experienced specialists and middle management Contract (top management permanent Total Table Promotions for the period 1 April 2015 to 31 March 2016 Occupational category Permanent Male Female Total African Coloured Indian White African Coloured Indian White Top Management Senior Management 2 2 Professionally qualified and experienced specialists and midmanagement Top Management Contract Total

96 Note: Promotions refer to the total number of employees promoted within the Department, as per Table Table Terminations for the period 1 April 2015 to 31 March 2016 Occupational category Permanent Male Female Total African Coloured Indian White African Coloured Indian White Top Management Senior Management, Professionally qualified and experienced specialists and midmanagement Skilled technical and academically qualified workers, junior management, supervisors, foremen Semi-skilled and discretionary decision making Contract (Top Management) Contract (Professionally qualified) Total Note: Terminations refer to those employees who have left the employ of the Department, including transfers to other Departments, as per Table Table Disciplinary action for the period 1 April 2015 to 31 March 2016 Disciplinary Action Male Female Total African Coloured Indian White African Coloured Indian White Note: The total disciplinary actions refer to formal outcomes. For further information on the outcomes of the disciplinary hearings and types of misconduct addressed at disciplinary hearings, please refer to Tables and Table Skills development for the period 1 April 2015 to 31 March 2016 Occupational category Permanent Legislators, Senior Officials and Managers Male Female Total African Coloured Indian White African Coloured Indian White Professionals Total Employees with disabilities

97 Note: The above table refers to the total number of personnel who received training, and not the number of training courses attended by individuals. For further information on the actual training provided, please refer to Table All members of the SMS must conclude and sign performance agreements within specific timeframes. Information regarding the signing of performance agreements by SMS members, the reasons for not complying within the prescribed timeframes and disciplinary steps taken is presented here under Signing of performance agreements by SMS members Table Signing of Performance Agreements by SMS members as on 31 May 2015 SMS Level Total number of funded SMS posts Total number of SMS members Total number of signed performance agreements Signed performance agreements as % of total number of SMS members Salary level % Salary level % Salary level % Salary level % Total % Note: The allocation of performance-related rewards (cash bonus) for Senior Management Service members is dealt with later in the report. Please refer to Table Table Reasons for not having concluded Performance agreements for all SMS members as on 31 March 2016 Reasons -All Performance Agreements were signed and submitted as per DPSA circular and deadline was met ( 31 May) Performance rewards To encourage good performance, the Department has granted the following performance rewards during the year under review. The information is presented in terms of race, gender, disability, salary bands and critical occupations. Table Performance Rewards by race, gender and disability for the period 1 April 2015 to 31 March 2016 Race and Gender Beneficiary Profile Cost Number of beneficiaries Number of employees % of total Within group Cost (R 000) Average cost per employee African, Female % African, Male % Coloured, Female % Coloured, Male % White, Female % White, Male % Total % Employees with a disability %

98 Table Performance Rewards by salary band for personnel below Senior Management Service for the period 1 April 2015 to 31 March 2016 Salary band Beneficiary Profile Cost Total cost as a % of the total Number of Number of % of total Total Average personnel beneficiaries employees within Cost cost per expenditure group (R 000) employee Skilled (Levels 3-5) % Highly skilled production (Levels 6-8) Highly skilled supervision (Levels 9-12) % % Contract (Levels 9-12) % Total % Note: The cost is calculated as a percentage of the total personnel expenditure for salary levels 1-12, reflected in Table Table Performance Rewards by critical occupation for the period 1 April 2015 to 31 March 2016 Salary band Beneficiary Profile Cost Number of beneficiaries Number of employees % of total within occupation Total Cost (R 000) Average cost per employee Appraisers, valuers and related Professionals Architects town and traffic planners 0 1 0% % Cartographers and surveyors % Engineering sciences related % Financial and related professionals General legal administration and related professionals % % Legal and related 0 1 0% 0 0 Senior Managers % 0 0 Total % Table Performance related rewards (cash bonus), by salary band for Senior Management Service for the period 1 April 2015 to 31 March 2016 Salary band Beneficiary Profile Cost Total cost as a % of the total Number of Number of % of total Total Cost Average personnel beneficiaries employees within (R 000) cost per expenditure group employee Level % 0 0 0% Level % 0 0 0% 97

99 Salary band Beneficiary Profile Cost Total cost as a % of the total Number of Number of % of total Total Cost Average personnel beneficiaries employees within (R 000) cost per expenditure group employee Level % 0 0 0% Level % 0 0 0% Total % 0 0 0% Note: The cost is calculated as a percentage of the total personnel expenditure for salary levels 13-16, reflected in Table The MEC is disclosed under level Foreign workers The tables below summarise the employment of foreign nationals in the Department in terms of salary band and major occupation. Table Foreign workers by salary band for the period 1 April 2015 and 31 March 2016 Salary band 01 April March 2016 Change Number % of total Number % of total Number % Change Lower skilled (Levels 1-2) 0 0% 0 0% 0 0% Highly skilled production (Levels 6-8) 0 0% 0 0% 0 0% Contract (Levels 9-12) % % % Contract (Levels 13-16) % % 0 0% Total 3 100% % % Table Foreign workers by major occupation for the period 1 April 2015 and 31 March 2016 Salary band 01 April March 2016 Change Number % of total Number % of total Number % Change Administrative office workers 0 0% 0 0% 0 0% Other occupations 0 0% 0 0% 0 0% Professionals and managers 2 100% 2 100% 0 0% Total 2 100% 2 100% 0 0% 98

100 Leave utilisation The Public Service Commission identified the need for careful monitoring of sick leave within the public service. The following tables provide an indication of the use of sick leave and disability leave. In both cases, the estimated cost of the leave is also provided. Table Sick leave for the period 1 January 2015 to 31 December 2015 Salary band Total days % Days with medical certification Number of employees using sick leave % of total employees using sick leave Average days per employee Estimated cost (R 000) Skilled (Levels 3-5) % % Highly skilled production (Levels 6-8) Highly skilled supervision (Levels 9-12) Senior management (Levels 13-16) % % % % % % Contract (Levels 1-2) % % 2 7 Contract (Levels 6-8) 5 100% 1 0.2% 5 6 Contract (Levels 9-12) 21 81% 5 0.8% 4 55 Contract (Levels 13-16) % % Total % % Table Disability leave (temporary and permanent) for the period 1 January 2015 to 31 December 2015 Salary band Total days % Days with medical certification Number of employees using sick leave % of total employees using sick leave Average days per employee Estimated cost (R 000) Skilled (Levels 3-5) % 3 7.7% 4 6 Highly skilled production (Levels 6-8) Highly skilled supervision (Levels 9-12) Senior management (Levels 13-16) % % % % % 1 2.6% Total % %

101 Table summarises the utilisation of annual leave. The wage agreement concluded with trade unions in the PSCBC in 2000 requires management of annual leave to prevent high levels of accrued leave being paid at the time of termination of service. Table Annual Leave for the period 1 January 2015 to 31 December 2015 Salary band Total days taken Average per employee Number of employees using annual leave Lower skilled (Levels 1-2) Skilled (Levels 3-5) Highly skilled production (Levels 6-8) Highly skilled supervision (Levels 9-12) Senior management (Levels 13-16) Contract (Levels 1-2) Contract (Levels 3-5) Contract (Levels 6-8) Contract (Levels 9-12) Contract (Levels 13-16) Total Table Capped leave for the period 1 January 2015 to 31 December 2015 Salary band Total days of capped leave taken Number of employees using capped leave Average number of days taken per employee Average capped leave per employee as on 31 December 2015 Highly skilled production (Levels 6-8) Highly skilled supervision (Levels 9-12) Total The following table summarises payments made to employees as a result of leave that was not taken. Table Leave pay-outs for the period 1 April 2015 and 31 March 2016 Reason Total amount (R 000) Number of employees Average per Employee (R 000) Capped leave pay-outs on termination of service for 2015/16 Current leave pay-outs on termination of service for 2015/ Total

102 HIV/AIDS & Health Promotion Programmes Table Steps taken to reduce the risk of occupational exposure Units/categories of employees identified to be at high risk of contracting HIV & related diseases (if any) Traditional leaders. Community Development Workers and Field Workers. Key steps taken to reduce the risk Conduct awareness sessions and make HCT accessible to employees Conduct awareness sessions and make HCT accessible to employees Table Details of Health Promotion and HIV/AIDS Programmes Question Yes No Details, if yes 1. Has the Department designated a member of the SMS to implement the provisions contained in Part VI E of Chapter 1 of the Public Service Regulations, 2001? If so, provide her/his name and position. Yes Mr M Madikane Senior Manager: Employee Relations 2. Does the Department have a dedicated unit or has it designated specific staff members to promote the health and well-being of your employees? If so, indicate the number of employees who are involved in this task and the annual budget that is available for this purpose. Yes Employee Wellness Unit with 5 employees and the budget for 2014/15 was R Has the Department introduced an Employee Assistance or Health Promotion Programme for your employees? If so, indicate the key elements/services of this Programme. 4. Has the Department established (a) committee(s) as contemplated in Part VI E.5 (e) of Chapter 1 of the Public Service Regulations, 2001? If so, please provide the names of the members of the committee and the stakeholder(s) that they represent. Yes Yes The Unit focus on the four functional pillars as per DPSA strategic framework on EH&W namely: HIV&AIDS and TB Management pillar Health and Productivity Management pillar. Safety, Health, Environment, Risk and Quality Management pillar. Wellness Management Pillar The committee is appointed and awaiting training. The names are as follows: 1. Mr Z Gxekani (Community Development WorkersNelson Mandela Metro) 2. Ms K Makeng (Community Development worker Alfred Nzo) 3. Mzileni N (PMDS, Head Office) 4. Ms TE Mpongoma (Secretary to Traditional Leaders, OR Tambo) 5. Mr P January (Community Development Worker Sarah Baartman) 5. Has the Department reviewed its employment policies and practices to ensure that these do not unfairly discriminate against Yes 1) HIV and AIDS policy 101

103 Question Yes No Details, if yes employees on the basis of their HIV status? If so, list the employment policies/practices so reviewed. 6. Has the Department introduced measures to protect HIV-positive employees or those perceived to be HIV positive from discrimination? If so, list the key elements of these measures. Yes 2) Wellness Management policy 1) Confidentiality of employees HIV status is respected. 2) Discrimination on the basis of HIV status is condemned 3) HIV therapeutic and support services is provided by EWP 4) Grievances related to HIV and AIDS are handled according to the departmental policy on complaints and grievances. 7. Does the Department encourage its employees to undergo Voluntary Counselling and Testing? If so, list the results that you have you achieved. 8. Has the Department developed measures/indicators to monitor and evaluate the impact of its health promotion programme? If so, list these measures/indicators. Yes Yes HCT always forms part of information sessions. 58 employees volunteered to test for HIV. Verbal feedback and evaluation at the end of the financial year. Number of sessions conducted and number of employees utilising the programme. The following table summarises the outcome of disciplinary hearings conducted within the Department for the year under review Labour Relations Table Collective agreements for the period 1 April 2015 and 31 March 2016 Note: The collective agreements are not entered into with at Departmental level. This is a National and Provincial competency. Table Misconduct and disciplinary hearings finalised for the period 1 April 2015 and 31 March 2016 Outcomes of disciplinary hearings Number % of total 0 0 0% Table Types of misconduct addressed at disciplinary hearings for the period 1 April 2015 and 31 March 2016 Type of misconduct Number % of total Fraud 2 40% Insolent behaviour 1 20% Wasteful and Irregular 2 40% Total 5 100% 102

104 Table Grievances logged for the period 1 April 2015 and 31 March 2016 Grievances Number % of total Unfair treatment % Non appointment 1 3.8% Non-payment of PMDS 2 7.6% Exclusion from OSD 2 7.6% Victimization % Unfair Labour Practice 1 3.8% Transfer 1 3.8% Non-allocation of vehicles 1 3.8% Non- communication of circular 2 7.6% Misrepresentation of employees by supervisor 1 3.8% Non- assessment 1 3.8% Total % Table Disputes logged with Councils for the period 1 April 2015 and 31 March 2016 Disputes Number % of total Upheld % Dismissed % Total 8 100% Table Strike actions for the period 1 April 2015 and 31 March 2016 Total number of persons working days lost 0 Total costs working days lost 0 Amount recovered as a result of no work no pay (R000) 0 Table Precautionary suspensions for the period 1 April 2015 and 31 March 2016 Number of people suspended 2 Number of people whose suspension exceeded 30 days 2 Average number of days suspended 41 Cost of suspension (R000)

105 Skills development This section highlights the efforts of the Department with regards to skills development Occupational category Gender Number of employees as at 1 April 2015 Learner ships Training needs identified at start of the reporting period Skills Programmes and other short courses Other forms of training Total Legislators, senior officials and managers Female Male Professionals Female Male Technicians and associate professionals Female Male Clerks Female Male Plant and machine operators and assemblers Female Male Elementary occupations Female Male Other Female Male Sub Total Female Male Total Table Training provided for the period 1 April 2015 and 31 March 2016 Occupational category Gender Number of employees as at 1 April 2015 Learner ships Training needs identified at start of the reporting period Skills Programmes and other short courses Other forms of training Total Legislators, senior officials and managers Female Male Professionals Female Male Technicians and associate professionals Female Male

106 Occupational category Gender Number of employees as at 1 April 2015 Learner ships Training needs identified at start of the reporting period Skills Programmes and other short courses Other forms of training Total Clerks Female Male Other Female Male Plant and machine operators and assemblers Female Male Elementary occupations Female Male Sub Total Female Male Total Injury on duty The following tables provide basic information on injury on duty. Table Injury on duty for the period 1 April 2015 and 31 March 2016 Nature of injury on duty Number % of total Required basic medical attention only 2 100% Total 2 100% Utilisation of Consultants The following tables relate information on the utilisation of consultants in the Department. In terms of the Public Service Regulations consultant means a natural or juristic person or a partnership who or which provides in terms of a specific contract on an ad hoc basis any of the following professional services to a Department against remuneration received from any source: (a) The rendering of expert advice; (b) The drafting of proposals for the execution of specific tasks; and (c) The execution of a specific task which is of a technical or intellectual nature, but excludes an employee of a Department. Table Report on consultant appointments using appropriated funds for the period 1 April 2015 and 31 March 2016 No Project title Total number of consultants that worked on project Duration (work days) Contract value in Rand 1. Appointment of a Service Provider for provision of digital pens and paper (DP&P) technology for community development workers. SCMU7-12/ months

107 No Project title Total number of consultants that worked on project Duration (work days) Contract value in Rand 2. Appointment of a Service Provider to render cleaning and hygienic services at Department of Cooperative Governance and Traditional Affairs. SCMU7-12/ Appointment of a Service Provider, a Microsoft enterprise advisor and large account reseller for a period of three years. SCMU7-13/ Appointment of a Service Provider for supply and maintenance of indoor plants for the Department of Cooperative Governance and Traditional Affairs. SCMU7-13/14-Q Appointment of a Service Provider to strengthen and support Ndlambe Local Municipality to improve its audit outcomes from qualified to unqualified audit opinion. SCMU7-13/14-Q Appointment of a Service Provider to strengthen and support Mbhashe Local Municipality to improve its audit outcomes from qualified to unqualified audit opinion. SCMU7-13/14-Q Appointment of a Service Provider, an Insurance Broker to provide insurance cover for 19 Fleet Executive vehicle for the Department of Cooperative Governance and Traditional Affairs. SCMU7-13/ Appointment of a Service Provider for Acquisition of the software for an integrated internal audit risk and compliance software for a period of three years for eight License users. SCMU7-13/14-Q Appointment of a Service Provider for training of twenty (20) Councillors in Executive Leadership Management. SCMU-13/14-Q Appointment of a Service Provider for layout, designing, printing and delivery services for the Department of Cooperative Governance and Traditional Affairs. SCMU-14/ Appointment of a Service Provider to supply, deliver and install Multi-functional 2 36 months months months months months months months months months years

108 No Project title Total number of consultants that worked on project devices for the Department of Cooperative Governance and Traditional Affairs. SCMU7-14/ Duration (work days) Contract value in Rand 12. Appointment of a Service Provider for a voice service maintenance agreement. 1 Month to month until the appointment of a Service Provider Appointment as an Administrator, to assume the duties of a Municipal Manager both as the Head of Administration and the Accounting Officer of Makana Local Municipality. SCMU7-14/15-Q Appointment of a Service Provide to provide newspaper subscription. SCMU7-14/ Appointment of a Service Provider to develop a green paper (policy document) that will be used to support an Eastern Cape Provincial Spatial Planning Land Use Management System. SCMU7-14/ Appointment of a Service Provider for upgrading of Financial System (SAMRAS) of Baviaans Local Municipality. SCMU7-14/ Appointment of a Service Provider to develop and implement on behalf of the Department a Comprehensive Project Implementation Planning (CPIP) Framework on the Department's licensed enterprise project management system. SCMU7-14/ Appointment of a Service Provider to provide training for the employment equity committee members. SCMU7-14/ Appointment of a Service Provider to Survey park homes sites in Mthatha. SCMU7-14/ Appointment of an Administrator at Makana Local Municipality. SCMU7-15/ Appointment of a Service Provider to render cleaning and hygienic services at the Department of Cooperative Governance and Traditional Affairs. SCMU7-15/ months months months months months days months months months

109 No Project title Total number of consultants that worked on project Duration (work days) Contract value in Rand 22. Appointment of Service Provider for procurement of 2x HP DL385P or other vendor equivalent server and hard drive spares for the existing servers with a Three year warranty. SCMU7-15/ Appointment of a Service Provider to provide Information Communication Technology (ICT) services. SCMU7-15/ Appointment of a Service Provider to supply and deliver diaries for a period of Three (3) weeks. SCMU7-15/ Appointment of a Service Provider to render hygienic and cleaning services at the Department of Cooperative Governance and Traditional Affairs. SCMU7-15/ Appointment of a Service Provider to supply deliver and install furniture in the Department of Cooperative Governance and Traditional Affairs. SCMU7-15/ Appointment of a Service Provider to supply and deliver thirty (30) Dell Latitude E5450 laptop computers. SCMU7-15/ months months weeks months weeks months Total number of projects Total individual consultants Total duration work days Total contract value in Rand Days (398 months & 5 days) 37,420,

110 Table Analysis of consultant appointments using appropriated funds, in terms of Historically Disadvantaged Individuals (HDIs) for the period 1 April 2015 and 31 March 2016 No Project title Percentage ownership by HDI groups Percentage management by HDI groups Number of consultants from HDI groups that worked on the project 1. Appointment of a Service Provider for provision of digital pens and paper (DP&P) technology for community development workers. SCMU7-12/ Appointment of a Service provider to render cleaning and hygienic services at Department of Cooperative Governance and Traditional Affairs for a period of 24 months. SCMU7-12/ Appointment of a Service Provider, a Microsoft enterprise advisor and large account reseller for a period of three years. SCMU7-13/ Appointment of a Service Provider for supply and maintenance of indoor plants for the Department of Cooperative Governance and Traditional Affairs. SCMU7-13/14-Q Appointment of a Service Provider to strengthen and support Ndlambe Local Municipality to improve its audit outcomes from qualified to unqualified audit opinion. SCMU7-13/14-Q Appointment of a Service Provider to strengthen and support Mbashe Local Municipality to improve its audit outcomes from qualified to unqualified audit opinion. SCMU7-13/14-Q Appointment of a Service Provider an Insurance Broker to provide insurance cover for 19 Fleet Executive vehicles for the Department of Cooperative Governance and Traditional Affairs. SCMU7-13/ Appointment of a Service Provider for Acquisition of the software for an integrated internal audit risk and compliance software for a period of three years for eight License users. SCMU7-13/14-Q Appointment of a Service Provider for layout, designing, printing and delivery services for the Department of 100% 100% 6 100% 100% % 0% 0 0% 0% 1 100% 100% 7 100% 100% 7 100% 100% 3 0% 0% 0 25% 50% 0 109

111 No Project title Percentage ownership by HDI groups Cooperative Governance and Traditional Affairs. SCMU-14/ Percentage management by HDI groups Number of consultants from HDI groups that worked on the project 10. Appointment of a Service Provider to supply, deliver and install Multi-functional devices for the Department of Cooperative Governance and Traditional Affairs. SCMU7-14/ Appointment of a Service Provider for a voice service maintenance agreement. 12. Appointment as an Administrator, to assume the duties of a Municipal Manager both as the Head of Administration and the Accounting Officer of Makana Local Municipality. SCMU7-14/15-Q Appointment of a Service Provide to provide newspaper subscription. SCMU7-14/ Appointment of a Service Provider to develop a green paper (policy document) that will be used to support an Eastern Cape Provincial Spatial Planning Land Use Management System. SCMU7-14/ Appointment of a Service Provider for upgrading of Financial System (SAMRAS) of Baviaans Local Municipality. SCMU7-14/ Appointment of a Service Provider to develop and implement on behalf of the Department a Comprehensive Project Implementation Planning (CPIP) Framework on the Department's licensed enterprise project management system. SCMU7-14/ Appointment of a Service Provider to provide 2X HP DL385P or other vendor equivalent server. SCMU7-14/ Appointment of a Service Provider to provide training for the employment equity committee members. SCMU7-14/ Appointment of a Service Provider to Survey park homes sites in Mthatha - Project SCMU7-14/ % 0% 0 0% 0% 0 100% 100% 1 0% 0% 0 0% 0% 0 27% 27% 0 100% 100% 1 0% 0% 0 0% 0% 0 100% 100% 1 110

112 No Project title Percentage ownership by HDI groups Percentage management by HDI groups Number of consultants from HDI groups that worked on the project 20 Appointment of a Service Provider for training of twenty (20) Councillors in Execute Leadership Management SCMU7-13/14-Q Appointment of a Service Provider to render cleaning and hygienic service at Cooperative Governance & Traditional Affairs for period of three months. SCMU7-15/ Appointment of a Service Provider to provide Information Communication Technology (ICT) services. SCMU7-15/ Appointment of a Service Provider to supply and deliver dairies for a period of three weeks. SCMU7-15/ Appointment of a Service Provider to render cleaning and hygienic services at the Department of Cooperative Governance & Traditional Affairs SCMU7-15/ Appointment of an Administrator at Makana Local Municipality SCMU7-15/ Appointment of a Service Provider to supply, deliver and install office furniture SCMU7-15/ Appointment of a Service Provider to supply and deliver thirty (30) Dell Latitude E5450 laptop computers. SCMU7-15/ % 0% 0 100% 100% 2 0% 0% 1 30% 30% 1 100% 100% 1 100% 100% 1 100% 100% 1 80% 100% 1 Table Report on consultant appointments using Donor funds for the period 1 April 2015 and 31 March 2016 Nil Table Analysis of consultant appointments using Donor funds, in terms of Historically Disadvantaged Individuals (HDIs) for the period 1 April 2015 and 31 March 2016 Nil 111

113 Severance Packages Table Granting of employee initiated severance packages for the period 1 April 2015 and 31 March 2016 Salary band Number of applications received Number of applications referred to the MPSA Number of applications supported by MPSA Number of packages approved by Department Lower skilled (Levels 1-2) Skilled (Levels 3-5) Highly skilled production (Levels 6-8) Highly skilled supervision (Levels 9-12) Senior management (Levels 1316) Total

114 113

115 Department of Co-operative Governance and Traditional Affairs Audit Report For the year ended 31 March

116 5.1 REPORT OF THE AUDITOR-GENERAL TO THE EASTERN CAPE PROVINCIAL LEGISLATURE ON VOTE NO 7. EASTERN CAPE DEPARTMENT OF COOPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS Report of the Auditor-General to the Eastern Cape Provincial Legislature on vote no. 07: Eastern Cape Department of Cooperative Governance and Traditional Affairs Report on the financial statements Introduction 1. I have audited the financial statements of the Eastern Cape Department of Cooperative Governance and Traditional Affairs set out on pages 119 to 204, which comprise the appropriation statement, the statement of financial position as at 31 March 2016, the statement of financial performance and cash flow statement for the year then ended, as well as the notes, comprising a summary of significant accounting policies and other explanatory information. Accounting officer s responsibility for the financial statements 2. The accounting officer is responsible for the preparation and fair presentation of these financial statements in accordance with the Modified Cash Standard (MCS) prescribed by the National Treasury and the requirements of the Public Finance Management Act of South Africa, 1999 (Act No. 1 of 1999) (PFMA) and the Division of Revenue Act of South Africa, 2014 (Act No. 10 of 2014) (DoRA), and for such internal control as the accounting officer determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor-general s responsibility 3. My responsibility is to express an opinion on these financial statements based on my audit. I conducted my audit in accordance with International Standards on Auditing. Those standards require that I comply with ethical requirements, and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. 4. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. 5. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion. Opinion In my opinion, the financial statements present fairly, in all material respects, the financial position of the Eastern Cape Department of Cooperative Governance and Traditional Affairs as at 31 March 2016 and its financial performance and cash flows for the year then ended, in accordance with the MCS and the requirements of the PFMA and DoRA. 115

117 Emphasis of matters 6. I draw attention to the matters below. My opinion is not modified in respect of these matters. Irregular expenditure 7. Irregular expenditure of R64,25 million that has accumulated over a number of years and that has not been recovered, written off or condoned is disclosed in note 26 to the financial statements. Irregular expenditure of R6,75 million incurred during the current year is included in the amount disclosed. 8. Section 38 of the PFMA read together with Treasury Regulations (TR) 11 and 12 requires such expenditure to either be recovered from an official where it is proved that an official is liable at law, written off as irrecoverable after it is proved that the amount due will not be recovered, or condoned after its proved that no official is liable at law. Fruitless and wasteful expenditure 9. Fruitless and wasteful expenditure of R5,5 million incurred during the current year is disclosed in note 27. This amount relates to smart pen technology that was not used as planned. Additional matter 10. I draw attention to the matter below. My opinion is not modified in respect of this matter. Unaudited supplementary schedules 11. The supplementary annexures do not form part of the financial statements and are presented as additional information. I have not audited these schedules and, accordingly, I do not express an opinion thereon. Report on other legal and regulatory requirements 12. In accordance with the Public Audit Act of South Africa, 2004 (Act No. 25 of 2004) and the general notice issued in terms thereof, I have a responsibility to report findings on the reported performance information against predetermined objectives of selected programmes presented in the annual performance report, compliance with legislation and internal control. The objective of my tests was to identify reportable findings as described under each subheading but not to gather evidence to express assurance on these matters. Accordingly, I do not express an opinion or conclusion on these matters. Predetermined objectives 13. I performed procedures to obtain evidence about the usefulness and reliability of the reported performance information of the following selected programmes presented in the annual performance report of the department for the year ended 31 March 2016: Programme 2 Local Governance on pages 39 to 44 Programme 3 Development and Planning on pages 46 to 50 Programme 4 Traditional Institutional Management on pages 52 to I evaluated the usefulness of the reported performance information to determine whether it was presented in accordance with the National Treasury s annual reporting principles and whether the reported performance was consistent with the planned programmes. I further performed tests to determine whether indicators and targets were well defined, verifiable, specific, measurable, time bound and relevant, as required by the National Treasury s Framework for managing programme performance information (FMPPI). 116

118 15. I assessed the reliability of the reported performance information to determine whether it was valid, accurate and complete. 16. I did not identify any material findings on the usefulness and reliability of the reported performance information for the following programmes. Programme 2 Local Governance Programme 3 Development and Planning Programme 4 Traditional Institutional Management Additional matter 17. Although I identified no material findings on the usefulness and reliability of the reported performance information for the selected programmes, I draw attention to the following matter: Adjustment of material misstatements 18. We identified material misstatements in the annual performance report submitted for auditing. These material misstatements were on the reported performance information of Programme 4 Traditional Institutional Management. As management subsequently corrected the misstatements, we did not raise any material findings on the usefulness and reliability of the reported performance information. Achievement of planned targets 19. Refer to the annual performance report on pages 34 to 57 for information on the achievement of the planned targets for the year. Unaudited supplementary schedules 20. The supplementary information set out on pages 58 to112 does not form part of the annual performance report and is presented as additional information. I have not audited these schedules and, accordingly, I do not report on them. Compliance with legislation 21. I performed procedures to obtain evidence that the department had complied with applicable legislation regarding financial matters, financial management and other related matters. My material findings on compliance with specific matters in key legislation, as set out in the general notice issued in terms of the PAA, are as follows: management 22. Effective steps were not taken to prevent irregular expenditure, amounting to R as disclosed in note 26 of the financial statements, as required by section 38(1)(c)(ii) of the PFMA and TR Internal control 23. I considered internal control relevant to my audit of the financial statements, annual performance report and compliance with legislation. The matters reported below are limited to the significant internal control deficiencies that resulted in the findings on compliance with legislation included in this report. Leadership 24. Leadership did not exercise adequate oversight responsibilities to ensure accurate performance reporting and compliance with prescribed legislation. 117

119 Financial and performance management 25. Management did not review and monitor compliance with applicable legislation on a regular basis. Documentation was not always submitted within the stipulated timeframes and was not complete which indicates that the department s record management system is not effective. 26. Performance reports did include misstatements due to the lack of reviewing by management. East London 29 July

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