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Thursday, 31 May 2018] 1
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 73─2018
No 73—2018] FIFTH SESSION, FIFTH PARLIAMENT
PARLIAMENT
OF THE
REPUBLIC OF SOUTH AFRICA
ANNOUNCEMENTS,
TABLINGS AND COMMITTEE REPORTS
THURSDAY, 31 MAY 2018
TABLE OF CONTENTS TABLINGS National Assembly and National Council of Provinces 1. Speaker and Chairperson ...................................................................... 2 2. Minister of Justice and Correctional Services ...................................... 2 COMMITTEE REPORTS National Assembly 1. Police .................................................................................................... 3 National Council of Provinces 1. Cooperative Governance and Traditional Affairs .............................. 26 2. Cooperative Governance and Traditional Affairs .............................. 38
2 [Thursday, 31 May 2018
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 73─2018
TABLINGS National Assembly and National Council of Provinces 1. The Speaker and the Chairperson
(a) Submission of the Financial and Fiscal Commission on the
Division of Revenue Bill for 2019-20, tabled in terms of section 9(1) of the Intergovernmental Fiscal Relations Act, 1997 (Act No 97 of 1997), as amended [RP 232 – 2018]
2. The Minister of Justice and Correctional Services
(a) Proclamation No 13, published in Government Gazette
No 41650, dated 25 May 2018: Referral of matters to existing Special Investigating Unit and Special Tribunal: Department of Provincial Planning and Treasury of the Eastern Cape, Eastern Cape Development Corporation, Eastern Cape Department of Safety and Liaison, Eastern Cape Parks and Tourism Agency, Buffalo City Metropolitan Municipality, King Sabata Dalindyebo Local Municipality, OR Tambo District Municipality and Nelson Mandela Metropolitan Municipality, in terms of the Special Investigating Units and Special Tribunals Act, 1996 (Act No 74 of 1996).
(b) Proclamation No 14, published in Government Gazette
No 41650, dated 25 May 2018: Referral of matters to existing Special Investigating Unit and Special Tribunal: KwaZulu-Natal Department of Transport, in terms of the Special Investigating Units and Special Tribunals Act, 1996 (Act No 74 of 1996).
(c) Proclamation No 15, published in Government Gazette
No 41650, dated 25 May 2018: Amendment of Proclamation No 8 of 2017, made under section 2(4) of the Special Investigating Units and Special Tribunals Act, 1996 (Act No 74 of 1996).
(d) Proclamation No 16, published in Government Gazette
No 41650, dated 25 May 2018: Referral of matters to existing Special Investigating Unit and Special Tribunal: Media, Information and Communication Technologies Sector Education and Training Authority (MICT SETA), in terms of the Special Investigating Units and Special Tribunals Act, 1996 (Act No 74 of 1996).
Thursday, 31 May 2018] 3
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 73─2018
COMMITTEE REPORTS National Assembly 1. REPORT OF THE PORTFOLIO COMMITTEE ON POLICE ON
THE 2018/19 BUDGET, ANNUAL PERFORMANCE PLAN AND
2017-2021 STRATEGIC PLAN OF THE PRIVATE SECURITY
INDUSTRY REGULATORY AUTHORITY (PSIRA), DATED
30 MAY 2018:
The Committee examined the Budget, Annual Performance Plan for the
2018/19 financial year and the 2017-2021 Strategic Plan of the Private
Security Industry Regulatory Authority (PSIRA).
The Committee reports as follows:
1. INTRODUCTION
The Private Security Industry Regulatory Authority (PSIRA) was
established in terms of section 2 of the Private Security Industry Regulation
Act (2001). The entity is mandated to regulate the private security industry
and to exercise effective control over the practice of the occupation of
security service providers in the public and national interest, and in the
interest of the private security industry itself.
1.1 Structure of the report
The Report provides an overview of the 2018/19 Budget Hearings of the
PSIRA and is divided into the following sections:
• Section 1: Introduction. This section provides an introduction to this
Report as well as a summary of meetings held during the hearings.
• Section 2: Strategic Priorities of the PSIRA for the 2018/19 financial
year. This section provides a summary of the strategic focus areas for
the Authority for the year under review.
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ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 73─2018
• Section 3: PSIRA Budget and Performance targets for 2018/19. This
section provides an overall analysis of the operating expenditure and
revenue of the PSIRA for the 2018/19 financial year. This section also
provides a programme analysis of the Authority.
• Section 4: Committee observations. This section highlights selected
observations made by the Portfolio Committee on Police on the annual
performance targets and programme specific issues during the 2018/19
budget hearings and subsequent responses by the Authority.
• Section 5: Recommendations and additional information. This section
summarises the recommendations made by the Portfolio Committee on
Police, as well as the additional information requested from the
Authority.
• Section 6: Conclusion. This section provides a conclusion to this
Report.
2. STRATEGIC PRIORITIES OF PSIRA FOR 2018/19
2.1. Legislative mandate
The primary objectives of PSIRA are to regulate the private security
industry and to exercise effective control over the practice of the occupation
of security service provider in the public and national interest and in the
interest of the private security industry itself.
In terms of the Private Security Industry Regulation Act, 2001 (Act No. 56
of 2001), the Authority must:
a) Promote a legitimate private security industry which acts in terms of
the principles contained in the Constitution and other applicable law;
b) Ensure that all security service providers act in the public and
national interest in the rendering of security services;
c) Promote a private security industry that is characterized by
professionalism, transparency, accountability, equity and
accessibility;
d) Promote stability of the private security industry;
Thursday, 31 May 2018] 5
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 73─2018
e) Promote and encourage trustworthiness of security service
providers;
f) Determine and enforce minimum standards of occupational conduct
in respect of security service providers;
g) Encourage and promote efficiency in and responsibility with regard
to the rendering of security services;
h) Promote, maintain and protect the status and interests of the
occupation of security service provider;
i) Ensure that the process of registration of security service providers is
transparent, fair, objective and concluded timeously;
j) Promote high standards in the training of security service providers
and prospective security service providers;
k) Encourage ownership and control of security businesses by persons
historically disadvantaged through unfair discrimination;
l) Encourage equal opportunity employment practices in the private
security industry;
m) Promote the protection and enforcement of the rights of security
officers and other employees in the private security industry;
n) Ensure that compliance with existing legislation by security service
providers is being promoted and controlled through a process of
active monitoring and investigation of the affairs of security service
providers;
o) Protect the interests of the users of security services;
p) Promote the development of security services which are responsive
to the needs of users of such services and of the community; and
q) Promote the empowerment and advancement of persons who were
historically disadvantaged through unfair discrimination in the
private security industry.
2.2. Strategic Goals and Objectives
The Authority identified three Strategic Goals for the 2018/19 financial
year, which extends over the medium-term. These are:
• Goal 1: To ensure excellent service delivery (effective regulation) in
the private security industry;
6 [Thursday, 31 May 2018
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 73─2018
• Goal 2: Ensure effective training, registration and regulation within
the private security industry; and
• Goal 3: Ensure good governance across the organisation.
The Authority identified seven strategic objectives for the 2018/19 financial
year. These are:
1) Ensure effective financial management;
2) Ensure efficient and effective processes and systems;
3) To improve performance of the organisation;
4) Increased investigation and prosecution to enforce compliance with
applicable legislation;
5) Increased awareness on the functions and role of PSIRA and its
stakeholders;
6) Improve the integrity and the turnaround time of registration; and
7) Conduct research to inform development of policy and legislative
direction of the private security industry.
2.3. Main policy focus areas
The main policy focus areas for the 2018/19 financial year include:
• Review funding model (Guarantee Fund and Levies Act);
• Organisational Review and Redesign to review its structure to
ensure adequate capacity to support its legal mandate;
• Review of training standards for the Private Security Industry;
• Capacitating the Law Enforcement Programme to reduce
inspector/security business ratio;
• Strengthening Corporate Governance through the establishment
of Industry Sector committees;
• Transformation of the security industry; and
• Continuous awareness of PSIRA brand.
2.4. Institutional Governance and Management
The Council of PSIRA consists of five members, of whom one is the
Chairperson, another the Deputy Chairperson and the remaining three are
ordinary members. Together the Council forms the accounting authority of
PSIRA and thus takes ultimate responsibility for the Authority. According
Thursday, 31 May 2018] 7
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 73─2018
to section 51 of the PFMA, 1999, the accounting authority for a public
entity must ensure that the public entity has and maintains the following
(amongst others): • Effective, efficient and transparent systems of financial risk
management and internal control;
• A system of internal audit under the control and direction of an audit
committee complying with and operating in accordance with
regulations and instructions prescribed in terms of sections 76 and
77; and
• An appropriate procurement and provisioning system, which is fair,
equitable, transparent, competitive and cost-effective.
3. PSIRA BUDGET AND PERFORMANCE TARGETS FOR 2018/19
3.1. Overall analysis
The Authority generates its own revenue through the collection of
annual levies, and through money received from any legitimate sources,
which has accrued to the entity in terms of the Act. The revenue
collected by PSIRA, is estimated at R267.03 million in 2018/19, which
is a nominal increase of 7.5% over the MTEF compared to the R248.6
million in revenue for 2017/18. Future estimates and plans indicates a
higher growth in expenditure against revenue (budget) with the existing
funding model. The Law Enforcement Programme receives the largest
nominal increase of 25.9% from R89.1 million in 2017/18 to R112.2
million in 2018/19. In real terms, this is an increase of 19.37%.
The Communication, Training and Registration Programme receives a
substantial decreased allocation in 2018/19 when compared to the
previous financial year. The allocation decreases from R51.1 million in
2017/18 to R42.1 million in 2018/19, which is a nominal decrease of
17.62%. In real terms, the allocation is reduced with R11.2 million
(21.92%).
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ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 73─2018
Table 1: PSIRA Expenditure Estimates 2018/19
Programme Budget Nominal
Increase/
Decrease
2018/19
Real
Increase/
Decrease
2018/19
Nominal
Percent
change
2018/19
Real %
change
2018/19 R’000 2017/18 2018/19
Programme 1:
Administration 108 181.0 112 675.0 4 494.0 - 1 380.1 4.15% -1.28%
Programme 2:
Law Enforcement 89 136.0 112 251.0 23 115.0 17 263.1 25.93% 19.37%
Programme 3:
Communication,
Training and
Registration
51 111.0 42 104.0 - 9 007.0 - 11 202.0 -17.62% -21.92%
TOTAL 248 429.0 267 030.0 18 601.0 4 680.0 7.5% 1.88%Source: PSIRA 2018/19 APP
The table above shows the changes to the percentage of total budget per
programme. The weight of the programmes shifted in 2018/19 when
compared to the previous financial year. In 2017/18, the Administration
Programme received 43.6% of the total budget, which decreased with
1.35% in 2018/19 to 42.2% of the total budget. The percentage of the
total budget allocated to the Communication, Training and Registration
Programme also decreased from receiving 20.57% of the total budget in
2017/18 to 15.77% in 2018/19.
These decreases allowed for the needed proportional increase in the
allocation of the Law Enforcement Programme. In 2017/18, the
programme received 35.88% of the total budget, which was increased
with 6.16% in 2018/19 to give the programme 42.04% of the total
budget. The Law Enforcement Programme is the core service delivery
programme of the PSIRA. The revision of the proportional allocations
brings the priorities of the Authority in-line with its legislative
mandate. As an illustration, the Visible Policing Programme of the
Police Vote, receives just over half of the budget allocation for
2018/19, because it is the core service delivery programme of the South
African Police Service (SAPS). The PSIRA should aim to increase the
proportional allocation of the Law Enforcement Programme over the
medium term.
Thursday, 31 May 2018] 9
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 73─2018
Table 2: PSIRA Programme Estimates as a percentage of Total
Expenditure Estimates
Programme Budget
Percent of total
budget/ programme
Budget
Percent of total
budget/ programme
Change in percent
allocation
R’000 2017/18 2018/19
Programme 1: Administration
108 181.0 43.55% 112 675.0 42.20% -1.35%
Programme 2: Law Enforcement
89 136.0 35.88% 112 251.0 42.04% 6.16%
Programme 3: Communication, Training and Registration
51 111.0 20.57% 42 104.0 15.77% -4.81%
TOTAL 248 429.0 100.00% 267 030.0 100.00% 0.00%Source: PSIRA 2018/19 APP
3.2. Key spending drivers
The Authority highlighted several key spending drivers, including:
• Expenditure has increased by an average of 13% over the 4-year
period. In the 2018/19 budget, personnel costs represent 59% of
the total expenditure with rental expenses being the second
highest cost at 11% and travelling the third highest at 6%.
• Employee costs increased by 21% due to employee annual cost
of living salary increase. Provision for additional 15 employees
was made and they will be recruited in 2018/19 to capacitate
core business units, including Inspectors, legal personnel and
walk-in-consultants.
• Property Rental shows an increase of 35%, which is mainly due
to the improvement of the geographical footprint of the
Authority and to ensure efficient, accessible quality service. The
Authority indicated that new offices will be established in
Pretoria, Bloemfontein, Polokwane, Nelspruit and Empangeni.
• Expenditure on travelling costs is expected to decrease with 9%
during 2018/19 when compared to the previous financial year.
The expected decrease is mainly due to the review of the travel
policy that supports and promote the Authority’s cost
containment measures plan.
10 [Thursday, 31 May 2018
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 73─2018
• The expected expenditure on stationery, printing, courier and
postage decreases with 30% in 2018/19 when compared to the
previous financial year. This is mainly because of cost
containment measures in place through monitoring of costs and
the reduction of overnight courier.
• The expenditure on advertising is expected to increase by 72%,
which is mainly due to the additional costs including the
branding of new offices and media campaigns to ensure the
awareness of the PSIRA brand.
• Coupled with the establishment of new offices, expenditure on
security costs will increase with 22% for the provision of
physical security, cash management services and armed response
at the new offices.
The expansion of geographical footprint through new additional offices
to bring service delivery closer to customers and improve quality of
service is a major cost pressure during the 2018/19 financial year.
3.3. Cost containment measures
The Authority highlighted the following cost containment measures that
will be implemented during the 2018/19 financial year to limit spending
on non-core items:
• Minimise travelling through early bookings and by reducing the
number of people travelling;
• Use of internal venues and other available government venues;
• The appointment of consultants to be done after an analysis of
needs and a diagnosis of the skills gap;
• Spend Manager to manage 3G Data utilisation; and
• Utilisation of in-house official to configure systems and
infrastructure.
3.4. Programme Performance Indicators and Targets
3.4.1. Programme 1: Administration
The Administration Programme is responsible to provide leadership,
strategic management and administrative support to the Authority. In
terms of measurable objectives, the Programme aims to ensure effective
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ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 73─2018
leadership, management and administrative support to the Authority
through continuous refinement of organisational strategy and structure
in line with appropriate legislation and best practices.
The Programme has three subprogrammes, namely:
• Sub-Programme: Finance and Administration;
• Sub-Programme: Business Information Technology; and
• Sub-Programme: Human Capital.
The table below summarises the performance indicators and targets for
the Administration Programme, together with some comments and
questions on the indicators.
Table 3: Programme Performance Indicators and Targets:
Administration Programme
Performance Indicator 2018/19 Target
Sub programme: Finance and Administration
Unqualified audit opinion with no significant findings Unqualified audit opinion
% Revenue collected 80% revenue collected on
billed annual fees
Establish and Implementation of the Guarantee Fund (New) Final proposal developed and
approved by Council
Sub programme: Business Information System
Critical IT infrastructure restored within the set timeline Average of 12 hours
Implementation of business continuity and disaster recovery
plan (New)
Business continuity plan in
place
Sub programme: Human Capital
% of implementation of the performance management system
(PMS) 100%
% of employee training interventions implemented as per
Annual Training Plan (New) 80%
Establishment of an internal training academy for employees
(New)
Internal Training Academy
Established and Operation
Source: PSIRA 2018/19 APP
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ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 73─2018
3.4.2. Programme 2: Law Enforcement
The Law Enforcement Programme is responsible for ensuring that there
are effective regulations in the security industry and enforcement of law
and compliance to the regulations. In terms of measurable objectives,
the programme aims to ensure that Security Service Providers comply
with the regulations by doing regular inspections for both security
officers and security businesses. Additionally, to ensure that those who
are not complying with the regulations are charged and prosecuted.
The Programme has three subprogrammes, namely:
• Sub-Programmes: Enforcement;
• Sub-Programmes: Compliance; and
• Sub-Programmes: Legal Services and Prosecution.
Table 4: Programme Performance Indicators and Targets: Law
Enforcement Programme
Performance Indicator 2018/19 Target
Number of security businesses inspected to enforce compliance with
applicable legislation 6 100
Number of security officers inspected to enforce compliance with
applicable legislation 32 600
% of investigations finalised against non-compliant Security Service
Providers (SSPs) 85%
% of criminal cases opened against non-compliant Security Service
Providers (SSPs) 95%
Number of security businesses licensed to possess firearms inspected 1 350
% of cases of non-compliant Security Service Providers (SSPs) prosecuted
per year 90%
Number of new draft regulations compiled on approved research topics
(New) 2
% of debt collection files referred for litigation (New) 50%
Number of security businesses inspected that are using dogs (New) 60
Source: PSIRA 2018/19 APP
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ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 73─2018
3.4.3. Programme 3: Communication, Registration and
Training
The purpose of the Communications, Registration and Training
Programme is to provide effective stakeholder engagement.
Additionally, the Programme must ensure that training standards are
adhered to and the registration process is done in accordance with the
PSIR Act. In terms of measurable objectives, the Programme must:
1) Ensure effective and meaningful stakeholder communication;
2) Ensure that all training institutions are aligned to the required
standard of training;
3) Ensure that the registration process is effective and authentic;
and
4) Ensure continuous research to support core business initiatives
and policy development.
There are four sub-programmes within this programme:
• Sub-Programme: Communications and Stakeholder
Management;
• Sub-Programme: Industry Registration (CRM);
• Sub-Programme: Industry Training; and
• Sub-Programme: Industry Research and Development.
14 [Thursday, 31 May 2018
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 73─2018
Table 5: Programme Performance Indicators and Targets:
Communication, Registration (CRM) and Training Programme
Performance Indicator 2018/19 Target
Sub programme: Communication and Stakeholder Management
Number of public awareness campaigns 140
Sub programme: Registration
Average turnaround time of applications for registration meeting all
the requirements for security businesses (working days) Average 10 days
Average turnaround time of applications for registration meeting all
the requirements for security officers (working days) Average 10 days
Sub programme: Industry Training
Number of capacity building activities for SSP training institutions 12
Increased number of training security service provided currently
registered and accredited with PSIRA 200 more registered
Sub programme: Industry Research and Development
Number of completed research topics 3 research topics
Number of completed surveys per year 4 surveys
Number of policy documents completed 3 policy documents
Number of research studies published (New) 2 publications
Source: PSIRA 2018/19 APP
4. COMMITTEE OBSERVATIONS
The Committee made the following observations during the 2018/19 budget
hearings:
Governing legislation: The Committee asked whether the Authority
has engaged the Minister of Police on the status of the Private Security
Industry Regulation Amendment Bill [B27D-2012] and whether the
Minister has approached the Office of the President regarding the future
of the Bill. The Amendment Bill contains numerous changes to the
regulatory environment of the private security industry and enhances
the mandate of the Authority in the current South African context. The
Authority indicated that they approached the current Minister of Police,
Hon Bheki Cele regarding the Amendment Bill. The Authority further
indicated that they have met with the Civilian Secretariat for Police for
further engagements with the Minister of Police.
Thursday, 31 May 2018] 15
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 73─2018
Subordinate legislation (Regulations): The Committee had a lengthy
discussion on the further development and implementation of
subordinate legislation to enable the Authority to fulfil its mandate
more effectively. The Committee asked whether the Authority is
working with the Civilian Secretariat for Police in the development of
regulations and policies. The Authority stated that there is an increased
focus on the development of regulations because of delays in approval
of the Private Security Industry Regulation Amendment Bill [B27D-
2012]. The development of regulations is informed by empirical
research conducted by the Authority. The current focus is on various
sectors, including the use of security dogs, protective gear and firearms.
In terms of the relationship with the Secretariat, the Authority indicated
that it has established a working relationship with the Secretariat and
works more closely with Secretariat, which it has not done in the past.
Organisational Review: The Committee raised concerns about the
organisational review and redesign that the Authority will embark on
during the 2018/19 financial year. The Authority indicated that the
Organisational Review was necessary to review its structure to ensure
adequate capacity to support its legal mandate. The necessity was
informed by significant paradigm shifts within the Authority and
regulatory environment related to the inadequate funding model;
establishment of a Guarantee Fund; enhancing the capacity of
compliance inspectors and increasing the standards of regulation. The
review includes identifying the skills sets needed to capacitate the
Authority to fulfil its mandate, especially in terms of the establishment
of a Guarantee Fund. The Committee further discussed the appointment
and use of consultants related to the review.
Consultants: The Committee raised concern about the increase in
expenditure on consultants during the 2018/19 financial year when
compared to the previous financial year. The Authority indicated that a
consultancy firm was appointed to conduct the Organisational Review
and Redesign study, which lead to the increase in projected
16 [Thursday, 31 May 2018
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 73─2018
expenditure. In turn, the Committee raised further concern on the use of
consultants to conduct internal reviews, especially organisational
development, as consultants do not have a comprehensive understanding
of the organisational environment and culture of the Authority. The
Authority acknowledged that the use of consultants is often a double-
edged sword, especially in terms of organisational development. The
Authority gave assurance that consultants are only appointed after the
completion of a needs analysis and diagnosis of the skills gap. The
Committee reiterated the importance of following the correct procedures
when awarding tenders to ensure that no third party or former employees
are involved. The Committee was assured that a strict competitive bid
process is followed and that no irregularities are allowed.
Funding model and revenue: The Committee raised concerns about
the projection that future estimates and plans indicate a higher growth
in expenditure against revenue with the existing revenue model. This
projection could mean that the Authority will not be able to remain a
going concern. The Authority indicated that the current funding model
is redundant for all practical purposes and that it is currently under
review to augment their sources of income and the collection thereof.
Expenditure: The Committee raised several issues around the
expenditure of the Authority, including the increase in Compensation of
employees, overdraft facility, and reserve funds. The Authority
indicated that the increase in Compensation of employees relates to the
capacitation of its core mandate and the intake of interns. In terms of
the overdraft facility, the Authority explained that it is only a projected
figure and required for an institution that has debtors. The projection
will be augmented by the intensification of revenue collections and the
review of the funding model. In terms of the reserve, the Authority
indicated that reserve funds are not surrendered to National Treasury,
because it does not receive funding for the State. The Authority further
indicated that a deficit is projected for the 2018/19 financial year.
Thursday, 31 May 2018] 17
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 73─2018
Debt collection: The Authority indicated that they have entered into an
agreement with the State Attorney to assist the Authority in litigation
against defaulting security service providers. The Authority indicated
that many successes have been achieved and indicated that it is
expected that the value in debt collections will increase in future years.
Research: The Committee requested additional information on the
impact of research conducted by the Authority. The Authority indicated
the key role that their research section plays in developing a deeper
understanding of the private security sector, both nationally and
internationally. The Authority indicated that there is currently a vacuum
in research on the private security industry and that the Authority aims
to develop future academics in the field through strategic partnerships
with universities. The Authority indicated that the research products,
currently produced by the research section, play a vital role in the
development of policies to guide and strengthen the Authority’s ability
to regulate the private security industry. It was further stated that the
output of the research section is somewhat hamstrung due to
insufficient funding. The section was established through donor
funding, but now has to be funded internally. The Authority indicated
that the research studies and survey findings would be published on the
Authority’s website within the next month.
Cash-in-transit services: The Committee requested the Authority to
explain its role, mandate and responsibilities regarding cash-in-transit
services offered by private security providers. The Committee raised
the increase of cash-in-transit robberies as a significant concern. The
Committee further asked what proactive steps PSIRA is taking to
mitigate against the scourge of cash-in-transit robberies and improve
the regulation of cash management services. The Authority agreed that
it is a major concern, but indicated that there are several role-players,
notably the SA Reserve Bank (SARB) within this industry and that
PSIRA is only responsible for the development of training standards
and the standard required for vehicles. The Authority further indicated
18 [Thursday, 31 May 2018
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 73─2018
that the personnel of cash-in-transit services providers fall outside the
Safety and Security Sector Bargaining Council (SSSBC), which
compounds the challenges experienced in the regulation of the industry.
In terms of proactive steps taken, the Authority has met with the
National Head of the Directorate for Priority Crime Investigation
(DPCI) to form a partnership to address the challenge. In conclusion,
the Authority stated that research has been completed on this industry
and that the empirical data collected will be used to develop policies to
better regulate the cash-in-transit services and providers thereof.
Vetting: The Committee raised concern about the lack of security vetting of
security guards working in the cash-in-transit and other sensitive areas of
armed protection. The Authority indicated that engagements with the
industry will be enhanced to strengthen the vetting of security guards in
high value logistics and cooperation with the State Security Agency (SSA)
will be strengthened.
Identity Fraud: The Committee requested an elaboration of identity
theft as a threat to the Authority. The Authority indicated that this
concerning trend was identified where registered security guards sell
their ‘identities’ to undocumented foreign nationals, who are not
allowed to become security guards in SA. It means that guards sell an
original copy of their PSIRA certificates and identification (ID)
documents to foreigners for up to R4000.00 and then get another ID and
certificate from Home Affairs and PSIRA. The Authority indicated that
they have entered into a partnership with the Department of Home
Affairs to address this challenge. The Committee questioned the
Authority on why it allows security guards who are not attached to a
private security business to register. The Authority indicated that
although the practice is discouraged, it is allowed. The Authority
further stated that it has engaged the Department of Home Affairs to
provide a live link on mobile devices to determine the status of
suspected undocumented foreign nationals on-the-spot to avoid the
current practice that compliance inspectors can only access the Home
Affairs database at head office.
Thursday, 31 May 2018] 19
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 73─2018
Training Academy: The Committee asked the Authority to explain the
need for the establishment of an internal Training Academy and
whether the courses offered have SA Qualifications Authority (SAQA)
accreditation. The Authority confirmed that the courses are SAQA
accredited and that it focuses on the training of compliance inspectors.
The Authority currently employs mostly previous members of the
security services, from the SAPS and Correctional Services, as
compliance inspectors. As there is no official training specifically
designed for compliance inspectors within the environment, the
Authority hopes to fill this gap with offering accredited training to
inspectors.
Security dogs: The Committee had an in-depth discussion on the
Authority’s focus on the regulation of security dogs, which was
included as a new performance indicator in the 2018/19 APP. The
Committee requested the Authority to elaborate on the nature of
compliance inspections, specifically whether inspections will include
the training, transportation and alleged abuse of security dogs. The
Committee questioned the Authority’s mandate on the regulation of dog
handlers. The Committee further warned the Authority not to consider
security dogs as just biological assets and keep the close bond between
dogs and handlers in mind.
The Authority stated that it has a mandate to provide accredited training
to dog handlers and that other legislation governs the use of service
animals. The PSIRA Act, 2001 stipulates strict standards with regard to
security officers (guards), security service providers, dogs and
clients/end users. The Authority indicated that it wants to establish a
unit specifically focussed on dogs and further indicated that only
handlers are registered, but that dogs should also be registered. The
standards of dog training and handling should be enhanced to ensure
more effective regulation of the environment.
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In terms of the transportation of dogs, the Committee raised specific
concern about security dogs transported in open vehicles (jumping off
‘bakkies’). The Authority indicated that specific standards apply to the
transportation of security dogs and that no exceptions are allowed.
In terms of the abuse of security dogs, the Authority indicated that it
has received several complaints regarding the alleged abuse of security
dogs. In such instances, inspections are conducted in partnership with
the Society for the Prevention of Cruelty to Animals (SPCA).
Crowd management: The Committee asked whether the Authority
offers any training to security guards on crowd management. The
Authority indicated that there is no accredited training offered to
security guards on crowd management, as crowd management falls
within the purview of the SAPS in terms of the Regulation of
Gatherings Act, 1993 (Act 205 of 1993).
Security at events: The Committee had an in-depth discussion on the
security at sporting events and raised serious concerns about the role of
security guards. Specific reference was made to the assault of a security
guard at the Moses Mabhida Stadium in Durban by disgruntled soccer
fans. More specifically, the Committee pointed out the seeming lack of
training of the security guard to handle the situation. The Committee
asked the Authority whether the current model that governs major
events is adequate and whether the incident will lead to a review of the
model. A question was asked about the use of protective gear and non-
lethal weapons, like pepper spray and electroshock weapons,
colloquially called tasers (Taser is a brand sold by Axon).
The Committee asked the Authority to explain their role in this
environment and whether the Safety at Sports and Recreational Act,
2010 (No. 2 of 2010) assigns a responsibility to PSIRA. The Authority
indicated that its role as regulator is limited, but stated that it is
currently investigating the incident at the Moses Mabhida stadium and
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will provide a copy thereof to the Committee once completed. The
Authority indicated that it does not have a seat on the Event Safety and
Security Planning Committee in terms of the Safety at Sports and
Recreational Act and that it only provides a seat for a security service
provider. The Authority stated that it will consider what steps can be
taken to play an active role in the security at events.
In terms of the training provided to security guards on event
management, the Authority stated that it offers accredited training to
guards, which includes a five-module curriculum, including public
relations and occupational safety (amongst others).
The Committee further questioned whether sporting events are graded
differently based on the type of event. The Authority indicated that it
should consider whether different types of sports should be graded
differently, for instance, golf, cricket, rugby and soccer that each draw
different crowds.
Gender equity: The Committee questioned the level of gender equity
within the private security industry. The Authority indicated that females
represent approximately 30% of the industry and that there is a shift in that
more females are entering the private security sector. The Authority further
indicated that the research on the transformation of the industry includes
aspects of gender representation. The research will inform what further
steps to take to elevate the role of females within the private security sector.
Internal audit capacity: The Committee questioned the outsourcing of
the internal audit function and requested the Authority plans to
establish the function internally. The Authority indicated that the
auditing firm contracted to conduct the internal audit function has been
appointed on a three-year contract, but mentioned that the
Organisational Review also includes the capacitation of an internal
audit function.
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Relationship with SAPS and NPA: The Committee asked whether the
Authority has a good relationship with the SAPS and National
Prosecuting Authority (NPA) and is satisfied with the quality of
investigations by SAPS and prosecutions by the NPA. The Committee
noted an increasing challenge in the SAPS/NPA interface and
questioned whether the Authority is experiencing similar challenges.
The Authority indicated that the Memorandum of Understanding (MOU)
with the SAPS is yielding successes. No formal relationship has been
established with the NPA, but it has met with the National Director of
Public Prosecutions (NDPP) to explain the work of the Authority. A
challenge that was identified is with admissions of guilt, which negates
strict sanctions and only allows for a fine for serious offences. The
Authority indicated that this area should be addressed through amendments
to their governing legislation to allow for on-the-spot fines.
Geographic footprint: The Committee requested the Authority to
explain the rationale for establishing a new office in Empangeni and
questioned the location thereof. The Authority indicated that a work-
study was completed to establish the reason for the high volume of
clients visiting the Durban office, more specifically from where the
clients visited. The study revealed that a high proportion of the
clients/security guards came from the Empangeni and Richards Bay
area. The Authority further indicated that both locations were
considered, but indicated that office space in Empangeni was acquired
due to the lack of office space in Richards Bay. The Authority stated
that the Free State office, located in Bloemfontein, is expected to open
the following week. The Committee expressed their satisfaction that the
numerous challenges, notably the lack of available office space,
experienced with the establishment of the Bloemfontein office had been
addressed.
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5. RECOMMENDATIONS AND ADDITIONAL INFORMATION
This section provides a summary of the recommendation made by the
Committee and a summary of the additional information requested during
the 2018/19 budget hearings.
5.1. Additional information
The Committee requested additional information through written responses
to supplement the information gathered during hearings on the 2018/19
budget hearings of the PSIRA:
• The Authority must provide a report on the investigation of the
assault on a security guard at the Moses Mabhida stadium once
completed.
5.2. Recommendations
The Committee made the following recommendations during the 2018/19
budget hearings:
i. The Committee recommends that the Authority should continue
its engagements with the Minister of Police to ensure progress
on the enactment of the Private Industry Regulation Amendment
Bill, 2012.
ii. The Committee recommends that the Authority should enhance
the development of subordinate legislation/regulations based on
empirical research to increase the regulation of the private
security industry. The Committee further recommends that the
Authority should enhance its relationship with the Civilian
Secretariat for Police to use their legislative drafting experience
and skills.
iii. The Committee recommends that the Authority prioritise the
establishment and effective operation of Industry Sector
Committees to enhance the corporate governance of the
Authority.
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iv. The Committee recommends that the Authority must oversee the
work of the consultants conducting the organisational review
and redesign project to ensure value for money and quality of
work.
v. The Committee recommends that the Authority should fast track the
review of the funding model to mitigate against the projected deficit
at the end of the 2018/19 financial year. The Committee further
recommends that the Guarantee Fund should be established and
implemented as a matter of urgency.
vi. The Committee recommends that the Authority must adhere to
the applicable prescripts when appointing consultants and
contractors to ensure that no third parties are attached to the
awarded tenders.
vii. The Committee recommends that the Authority must take
proactive steps to enhance its involvement in the Event Safety
and Security Planning Committee in terms of the Safety at
Sports and Recreational Act, 2010 (No 2 of 2010).
viii. The Committee recommends that the Authority work closely
with the Directorate for Priority Crime Investigation (DPCI) and
the South African Banking Risk Information Centre (SABRIC)
to address gaps in the management of cash-in-transit to mitigate
in security breaches and address the scourge of cash-in-transit
robberies. Coupled thereto, the Authority should enhance
engagements with role-players to ensure the vetting of security
officers working in the armed response sector, specifically in
cash management.
ix. The Committee recommends that the cooperation between the
Authority and the NPA should be enhanced to increase the number
of prosecutions on contraventions of the Private Security Industry
Regulation Act, 2001 (Act No. 56 of 2001).
x. The Committee recommends that the Authority intensify
engagements with the Department of Home Affairs to ensure the
real-time access to the Home Affairs database.
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xi. The Committee recommends that the Authority should continue its
focus on the training and use of security dogs and handlers in the
private security industry.
5.3. Reporting requirements
The Authority should report the progress on the recommendations
biannually. The first progress report should reach the Committee no later
than two weeks after the end of the second quarter of the 2018/19 financial
year.
6. CONCLUSION
The Committee noted an overall improvement in the governance and
performance of the Authority over the past financial year. The Committee is
cautiously optimistic about the future of the Authority, based on the
performance information shared during the 2018/19 budget hearings. The
Committee encourages the Authority to intensify its activities to improve
the regulation of the private security industry of South Africa. The
Committee further encourages the Authority to focus specifically on the
exploitation of security guards within this sector and bring non-compliant
employers to book.
Report to be considered.
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National Council of Provinces
1. Report of the Select Committee on Co-operative
Governance and Traditional Affairs (Select Committee):
In loco –Inspection in terms of section 139 (1) (b) of
the Constitution in Mpofana Local Municipality, dated
29 May 2018
1. Background and Overview
1.1 On 18 December 2017, the KwaZulu–Natal Provincial
Department of Cooperative Governance and Traditional Affairs
(COGTA) tabled notice of intervention in terms of section
139(1) (b) of the Constitution in Mpofana Local Municipality to
the Office of the Chairperson of the National Council of
Provinces.
1.2. Subsequent to the tabling, the Chairperson of the National
Council of Provinces in terms of NCOP Rule 101 referred the
notice of intervention to the Select Committee for consideration
and reporting.
1.3 On the 15 May 2018, the Select Committee took a decision to
embark on an in loco oversight visit to the above-mentioned
local municipality on 24 May 2018 in order to interact with all
the critical stakeholders.
1.4 Having conducted the in loco-inspection in Mpofana Local
Municipality in KwaZulu- Natal and interacted with the internal
and external stakeholders of the municipality, the Select
Committee reports in terms of Rule 102 to the National Council
of Provinces (NCOP) as follows:
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2. Objectives of the In Loco –Inspection
2.1 The main objective of the in loco-inspection was to interact with
the internal and external stakeholders in order to solicit and
verify their views about the constitutional, procedural and
substantive matters related to the invocation of section 139(1)
(b) of the Constitution at Mpofana Local Municipality.
3. Composition of the Delegation
3.1 The delegation of the Select Committee constituted the
following Members of Parliament and Officials: Hon T Wana
(ANC), Eastern Cape. Hon JM Mthethwa (ANC), KwaZulu-
Natal, Hon Mthimunye (ANC), Mpumalanga, Hon M Chetty
(DA), KwaZulu-Natal, Hon R Oliphant (ANC), Northern Cape,
Hon D Ximbi (ANC), Western Cape, Hon B Engelbrecht (DA),
Gauteng, Mr TM Manele, Committee Secretary (Committee
Section), Mrs T Mpapela, Content Adviser (Committee Section);
Mr N Mangweni, Committee Assistant, (Committee Section), Mr
B M Mahlangeni, Committee Researcher (Research unit).
4. General Overview of the Loco Inspection at Mpofana Local
Municipality
4.1. On 24 May 2018, the Multi-Party delegation of the Select
Committee first interacted with the MEC for COGTA; Head of
the Department and other senior officials of the Department
about the substantive reasons for invocation of section 139(1)
(b) of the Constitution at Mpofana Local Municipality.
4.2. The MEC assured the delegation that the intervention at
Mpofana Local Municipality was purely due to failure of the
Council to execute its constitutional mandate and not politically
motivated.
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4.3. The Select Committee later interacted with the Mayor, Deputy
Mayor, Speaker, Chief Whips of Political Parties, Councillors,
SALGA, youth forums and organised labour.
4.4. The Departmental official made a presentation and provided the
constitutional, procedural and substantive reasons for invoking
section 139(1) (b) at Mpofana Local Municipality.
4.5. The appointed Administrator reported on progress made since
the commencement of the intervention.
4.6. The political representatives, organised labour and other
stakeholders voiced their views about their support or otherwise
of the intervention.
5. Presentation by the KZN Department of Cooperative
Governance and Traditional Affairs (COGTA) on Section
139 (1) (b) of the Constitution in Mpofana Local
Municipality
5.1 Constitutional and Procedural Matters Related to the
Intervention
5.1.1 The Departmental official gave a briefing on the status of
intervention in Mpofana Local Municipality in terms of
constitutional, procedural and substantive matters. The
presentation also provided background information dating back
from 2012, citing serious financial difficulties; continuous
incidents of unrest coupled with unprotected strike action by
municipal workers and service delivery related protests.
5.1.2 The Departmental Official reported that the KZN Provincial
Executive Council (PEC) took a resolution to intervene at
Mpofana Local Municipality in terms of section 139(1) (b) of
the Constitution in December 2017.
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5.1.3 The Minister of COGTA and the Chairperson of the NCOP were
notified of the decision by the PEC on 18 December 2017 as
prescribed in terms of section 139(2) of the Constitution. The
Minister of COGTA approved the intervention within the
prescribed constitutional time frames.
5.1.4 The Speaker of Mpofana Local Municipality was notified of the
intervention on 19 December 2017 after which the MEC met and
further engaged with the Municipal Council on 11 January 2018,
followed by more engagements between the Municipal Council and
the officials of Provincial Department of Cogta.
5.2 Substantive Matters Related to the Intervention
5.2.1 The substantive matters related to the invocation of section
139(1) (b) of the Constitution at Mpofana Local Municipality
were due to various challenges experienced by the municipality
in the execution of its constitutional mandate.
5.2.2 The municipality experienced serious challenges in executing its
duties in relation to four of its critical key performance areas,
which are Municipal Transformation and Institutional
Development; Good Governance and Public Participation;
Municipal Financial Viability and Management as well as Basic
Service Delivery.
5.2.3 The municipal transformation and institutional development
challenges related to the appointment of critical senior managers
including the Municipal Manager and the Chief Financial
Officer (CFO). In relation to the issue of CFO, Mpofana Local
Municipality appointed an Acting CFO who did not possess the
required experience and persistently retained him despite
objections by the MEC.
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5.2.4 In relation to issue of the Municipal Manager, the Mpofana
Local Municipality had failed to appoint a Municipal Manager
even after hands- on support from the Provincial Department of
COGTA.
5.2.5 Good governance and public participation challenges faced by
Mpofana Local Municipality related to the flouting of Council
Rules and Orders by the Mpofana Municipal Council itself;
failure to implement the Code of Conduct for Councillors;
inability to hold the management accountable for poor
performance and failure to implement the Auditor- General’s
findings as well as the dysfunctionality of the Municipal Public
Accounts Committee (MPAC) despite training and support
provided.
5.2.6 Mpofana Local Municipality also experienced financial viability
and management challenges. The Municipality received a
disclaimer audit opinion for the financial year 2015/16 due to
failure in submitting required supporting documents. The
Municipality was also found to be operating at a loss of R26 267
981 in the 2015/16 financial year; not spending and cash backing
on its conditional grants amounting to R16 570 878 and was
unable to meet its monthly operating commitments of
R8.6million.
5.2.7 The Municipality had more liabilities than assets and as such
was unable to pay its creditors within 30days as stipulated by the
MFMA. The amount owed to creditors included R36.6million
owed to Eskom; R11.5 million to other creditors including R3.6
million owed to Khuselani security.
5.2.8 The inability to collect revenue coupled with weak credit control
and debt collection also contributed to the financial difficulties
experienced by the Municipality despite reporting R97 million in
gross debtors including R26.9 million property rates debtors.
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5.2.9 The lack of finances at Mpofana Local Municipality had also
compromised the delivery of basic services to the communities.
The municipality was only able to provide limited services
linked to conditional grants like MIG, Small Town
Rehabilitation and housing grant. Despite being only able to
provide services financed through the conditional grants, the
Municipality only managed to spend less than 10% of its MIG
allocation.
5.2.10 The municipality was also unable to complete projects under the
small town rehabilitation programme, as the funds earmarked for
the projects were used for operational expenses. The
municipality was also unable to complete their INEP projects, as
the municipality was not able to comply with Eskom
specifications.
5.3 Support provided by Provincial Government
5.3.1 The Mpofana Local Municipality received a variety of hands-on
support aimed at strengthening the identified weaknesses from
the Provincial Department of Cogta; Provincial Treasury and the
Department of Human Settlements. The municipality received
support and training related to budgeting; recruitment processes;
implementation of INEP; housing projects related support;
support related to salaries and compensation of councillors, as
well as negotiating payment agreements with Eskom.
5.3.2 Progress made since the commencement of the intervention
5.3.3 On assumption of duty at the Municipality, the appointed
Administrator identified additional challenges. The identified
challenges included irregular extension of contracts; inability to
honour third party payments; numerous litigations; Eskom debt that
had ballooned to over R66 million due to non-adherence to the
agreed upon payment plan; and non-approval by the Council of a
credible audit action plan.
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5.3.4 The presence of the Administrator at Mpofana Local Municipality
has yielded notable progress, as all the ward committees and five
(05) Operation Sukuma Sakhe war rooms within the municipality
have become functional and meeting regularly and submitting
minutes. The Municipality has hosted community meetings in all
wards as part of IDP/Budget engagements while community
meetings at wards 3 and 5 were about to encourage community
members pay for services.
5.3.5 The process to establish the Project management Unit (PMU) is
currently underway. Successful negotiations with contractors who
had deserted projects sites due to financial challenges has yielded
positive results.
5.3.6 A notice of termination was served to an irregularly appointed
electricity contractor and process is underway to appoint a new
contractor for the new INEP allocation of R5million.
5.3.7 Spending on MIG allocation has increased to 64% and will likely
increase to 84% by end May 2018. The Municipality has also started
the process aimed at cash backing other conditional grants. The
Department of Human Settlements has also agreed to resume with
housing projects as soon as the Municipality opens the Municipal
Housing Operating account.
5.3.8 There is noticeable progress in small town rehabilitation projects,
and successful completion is expected by end financial year
2017/2018. Identified roads at Mooi River and Rosetta towns
regularly maintained as per request of Rate Payers’ Association and
waste collection regular at Wards 1,2,3 and 5
5.3.9 Portfolio committees and MPAC have monthly meetings to process
Council businesses. A new Audit Committee is to be appointed by
end May 2018. The Council has reviewed and adopted the Fraud
Prevention Plan, and compiled a Risk Register after conducting risk
assessment. There are also investigations currently under way in
terms of section 106 of the Systems Act.
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5.3.10 Municipal Revenue and Debt Steering Committee been established
to recoup funds owed by various Government Departments. A
schedule of government debt compiled and shared with Provincial
Department of Cogta and Provincial Treasury for assistance and
follow up. An appointed debt collector has managed to collect a total
of R2 624613.24 by end March 2018. Data cleansing completed for
260 debtors and top 100 consumers been contacted about their debts.
The Municipality is currently up to date with the Eskom payment
plan.
5.3.11 The Interim Finance Committee (IFC) is dispensing with its duties
and had five (05) sittings since 28 February 2018. A number of
resolutions made by the IFC have been successfully implemented.
The resolutions include placing a moratorium on all non-core service
delivery expenditure; reduction in hours of overtime and travel
claims. Bi- monthly cash flow forecast incorporating creditors
repayment plans prepared and discussed with IFC.
5.3.12 Mpofana Municipal Council has approved electricity recovery
strategy on 7 May 2018. The Council also approved the installation
of a prepaid meter at its Town Hall. Bid Committees have been
reconstituted and Supply Chain Management Registers are monthly
updated. There will be investigations and consequence management
in relation to identified irregular, fruitless and wasteful expenditures.
5.3.13 The Budget and Steering Committee is now established. The
Municipal Council adopted the draft 2018/2019 budget on 27April
2018, although with an identified R28.6 million deficit
5.3.14 Process is underway to appoint the Municipal Manager, CFO and
Director for Social and Economic Services. There is ongoing
training and capacity building for councillors and management. The
reconstruction of HR files destroyed and damaged by fire is
underway.
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5.3.15 The Municipality is able to meet some of its obligations including
third party payments, which are now honoured on time. The
acknowledgement of debt and payment plans has averted a number
of litigations by creditors. Some of the debtors are also coming
forward to make payment arrangements with the municipality.
6. Opinions of Political Parties, Organized labour and Youth on
intervention in terms of section 139 (1) (b) of the
Constitution
6.1. The member of the African National Congress (ANC) welcomed
the intervention and raised concerns concerning the slow pace of
housing projects.
6.2. The member of the Democratic Alliance (DA) was of the view
that section 139(1) (c) was an ideal option for this Municipality
as he claimed that Council members of the ruling party do not
have the best interests for the municipality and its business.
6.3. The member welcomed the forensic investigation in terms of
section 106 of Municipal System Act in the local municipality.
6.4. The Member of the Inkatha Freedom Party (IFP) supported the
intervention in terms of section 139 (1) (b) of the constitution.
However, the member raised concerns with regard to Eskom
debt, land grabs and municipal instruction to demolition shacks.
6.5. The representative of South African Local Government
Association supported the intervention in terms of section 139
(1) (b) of the constitution and emphasized the importance of
integrated support to the municipality and collaboration with the
Department of Cooperative Governance and Traditional Affairs.
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6.6. The representative of SAMWU noted the progress since the
intervention especially as it pertains to third party payments, but
was reluctant to indicate whether the union viewed the
intervention as having brought overall positive impact as yet,
especially for workers.
6.7. The union however raised a number of issues like lack of
resources, tools of trade for the workers, staff shortage and lack
of office space, as negatively affecting the wellbeing of workers
within Mpofana Local Municipality. The union made an
undertaking to monitor the progress and impact of the
intervention
6.8. The representatives of Mpofana Youth Empowerment and Youth
Forum welcomed the intervention, but raised a number of
concerns. They voiced their concerns about lack of consultation
and support by the local municipality on matters related to
youth; lack of skills and high unemployment among youth;
absence of youth related community projects and substance
abuse by youth within the local community. They requested the
municipality to appoint a Youth Officer who will be responsible
for coordinating youth programmes within the municipality.
7. Select Committee Observations
7.1. The Select Committee delegation noted the adherence to all
constitutional and procedural requirements pertaining to
intervention to any municipality.
7.2. The Select Committee observed and noted the concerns raised
by the youth forum.
7.3. The Select Committee noted and strongly condemned reported
incidents of illegal invasion of land.
7.4. The Select Committee delegation noted and observed the
concerns raised by SALGA about implementation of integrated
support to municipalities.
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7.5. The Select Committee observed and noted the amount of debt
owed to Mpofana Local Municipality by Government
Departments.
7.6. The Select Committee noted the progress reported on, since
commencement of the intervention.
7.7. The Select Committee has also observed the poor socio- economic
status of the municipality.
7.8. The Select Committee has further noted and welcomed the
commissioning of Forensic Investigation in terms of section 106
of the Local Government: Municipal System Act
8. Select Committee Recommendations
8.1. Having conducted the in loco-inspection and interacted with the
internal and external stakeholders of the Mpofana Local
Municipality, the Select Committee recommends to the National
Council of Provinces as follows:
8.1.1. NCOP to approve the notice of intervention in terms of section 139
(1) (b) of the Constitution in Mpofana Local Municipality
8.1.2. That the MEC of the Department of Cooperative Governance and
Traditional Affairs should table a progress report to the National
Council of Provinces regarding investigations in terms of section
106 of Municipal System Act conducted in Mpofana Local
Municipality.
8.1.3. That the MEC of the Department of Cooperative Governance and
Traditional Affairs should provide quarterly and exit reports to the
National Council of Provinces on the progress made in respect of
intervention in terms of section 139 (1) (b) of the Constitution and in
terms of section 106 of Municipal System Act.
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ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 73─2018
8.1.4. That the Select Committee on Cooperative Governance and
Traditional Affairs should conduct proactive oversight in
collaboration with the Portfolio Committee on Cooperative
Governance and Traditional Affairs in KNZ Provincial Legislature in
order to assess the progress made in respect of the intervention in
terms of section 139 (1) (b) of the Constitution and section 106 of
Municipal System Act.
8.1.5. The Select committee on cooperative governance and traditional
affairs should ensure monitoring of the terms of reference and
turn-around strategy through the application of Rule 91 of the
national council of provinces
8.1.6. The appointed Administrator to expedite the process of filing of
vacancies for senior managers in order to ensure proper exiting and
handing over when the intervention is terminated.
8.1.7. The municipality to exercise its facilitative role to build
partnerships and facilitate engagements with various
Departments and other institutions like, Department of Trade
and Industry and Industrial Development Corporation (IDC) to
empower and support youth economic initiatives.
8.1.8. The Municipality need to ensure that youth are also involved in
infrastructure projects implemented by the Municipality.
8.1.9. The Administrator should adhere and implement all activities as
stipulated in his Terms of Reference.
Report to be considered
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2. Report of the Select Committee on Co-operative Governance and Traditional Affairs on loco –Inspection in terms of section 139 (1) (b) of the Constitution in Inkosi Langalibalele Local Municipality, dated 29 May 2018
1. Background and Overview
1.1 On 18 December 2017, the KwaZulu– Natal Provincial
Department of Cooperative Governance and Traditional Affairs
(COGTA) tabled a notice of intervention in terms of section
139(1) (b) of the Constitution in Inkosi Langalibalele Local
Municipality to the Office of the Chairperson of the National
Council of Provinces.
1.2. Subsequent to the tabling, the Chairperson of the National
Council of Provinces in terms of NCOP Rule 101 referred the
notice of intervention to the Select Committee for consideration
and reporting.
1.3 On the 15 May 2018, the Select Committee took a decision to
conduct loco inspection to the above-mentioned local
municipality on 25 May 2018 in order to interact with all the
critical stakeholders.
1.4 Having conducted the loco-inspection in Inkosi Langalibalele
Local Municipality in KwaZulu- Natal and interacted with the
internal and external stakeholders of the municipality, the Select
Committee reports in terms of Rule 102 to the National Council
of Province (NCOP) as follows:
2. Objectives of the Loco –Inspection
2.1 The main objective of the loco-inspection was to interact with
the internal and external stakeholders in order to solicit their
views about the constitutional, procedural and substantive
matters related to the invocation of section 139(1) (b) of the
Constitution at Inkosi Langalibalele local municipality.
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3. Composition of the Delegation
3.1 The delegation of the Select Committee composed of the
following Members of Parliament and Officials: Hon T Wana
(ANC), Eastern Cape; Hon JM Mthethwa (ANC), KwaZulu-
Natal; Hon G.Mthimunye (ANC), Mpumalanga; Hon M Chetty
(DA), KwaZulu-Natal; Hon R Oliphant (ANC), Northern Cape;
Hon D Ximbi (ANC), Western Cape; Hon B Engelbrecht (DA),
Gauteng, Mr TM Manele, Committee Secretary (Committee
Section); Mrs T Mpapela, Content Adviser (Committee Section);
Mr N Mangweni, Committee Assistant, (Committee Section), Mr
B Mahlangeni, Committee Researcher( Research unit).
4. General Overview of the Loco Inspection at Inkosi
Langalibalele Local Municipality
4.1. On the 24 May 2018, the Multi-Party delegation of the Select
Committee first interacted with the MEC for COGTA; Head of
the Department and other senior officials of the Department
about the substantive reasons for invocation of section 139(1)
(b) of the Constitution at Inkosi Langalibalele Local
Municipality.
4.2. The MEC assured the delegation that the intervention at Inkosi
Langalibalele local municipality was purely due to failure of the
Council to execute its constitutional mandate and not politically
motivated.
4.3. On the 25 May 2018, the Select Committee interacted with
Mayor, Deputy Mayor, Speaker, Chief Whips of Political
Parties, Councillors, SALGA, youth forums and organised
labour at Inkosi Langalibalele local municipality.
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4.4. The Departmental official made a presentation and provided the
constitutional, procedural and substantive reasons for invoking
section 139(1) (b) at Inkosi Langalibalele local municipality.
4.5. The appointed administrator reported on progress made since the
commencement of the intervention.
5. Presentation by the Department of Cooperative Governance
and Traditional Affairs (COGTA) on Section 139 (1) (b) of
the Constitution in Inkosi Langalibalele Local Municipality
5.1. Constitutional and Procedural Matters Related to the
Intervention
5.1.1 The Department of Cogta made presentation on the notice of
intervention in terms of section139 (1) (b) of the Constitution in
Inkosi Langalibalele Local Municipality. The presentation
focused on the constitutional, procedural and substantive matters
related to the intervention as well as the support provided and
the progress made in the local municipality. The departmental
official also gave a brief background on issues related to merger
of two municipalities leading to establishment of Inkosi
Langalibalele as well as the governing coalition status of the
municipality.
5.1.2 The Departmental Official reported that the KZN Provincial
Executive Council (PEC) took a resolution to intervene at Inkosi
Langalibalele Local Municipality in terms of section 139(1) (b)
of the Constitution in December 2017.
5.1.3 The Minister of COGTA and the Chairperson of the NCOP were
notified of the decision by PEC on 18 December 2017 as
prescribed in terms of section 139(2) of the Constitution. The
Minister of COGTA approved the intervention within the
prescribed constitutional time frames.
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5.1.4 The Speaker of Inkosi Langalibalele local Municipality was notified
of the intervention on 19 December 2017 after which the MEC met
and further engaged with the Municipal Council in January 2018,
followed by more engagements between the Municipal Council and
the officials of Provincial Department of Cogta.
5.2. Substantive Matters Related to the Intervention and Terms
of reference of the Administrator
5.3.
5.3.1. The substantive matters related to the notice of intervention at
Inkosi Langalibalele local municipality related to challenges that
compromised the municipality’s ability to execute its
constitutional mandate. The challenges identified were within
the municipality’s key performance areas (KPAs) which are
municipal transformation and institutional development; good
governance and public participation; municipal financial
viability and management and basic service delivery.
5.3.2. In relation to municipal transformation and institutional
development, the municipality faced numerous difficulties
related to dissatisfaction about remuneration matters related to
job evaluation; unequal pay and staff establishment. The
municipality had no capacity to resolve these matters and they
threatened the stability of the municipality.
5.3.3. These issues put an enormous pressure on the municipality and
led to the Municipal Council adopting illegal and irregular huge
salary bill way above the required threshold. This matter
increased the salary threshold to 54%, which is above the
prescribed norm of 25-40%. The increased salary threshold was
also due to absorption of 200 casual workers and appointment of
41 bodyguards. In addition, the municipality failed to adopt a
new staff establishment developed by the Change Management
Committee to cater for the newly established Inkosi
Langalibalele local municipality.
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5.3.4. The challenges related to good governance and public
participation related to failure to submit 2016/17 Annual
Financial Statements by 31 August 2017, and rejecting
assistance by threatening the financial experts provided by
Provincial Department of Cogta and Provincial Treasury. The
municipality was served with a warrant of execution by the Sheriff
to attach the primary bank account and faced 41 litigation suits to the
approximate value of R 38 million. The threat of disconnection by
Eskom; six councillors owing the municipality a total amount of
R26, 722.00 and failure by the Municipal Council institute
disciplinary action against these councillors also contributed to the
financial challenges experienced by the municipality. The
municipality also failed to report unauthorized, irregular or fruitless
and wasteful (UIFW) expenditure in terms of section 32 of the
MFMA to the MEC for Local Government, while the Municipal
Public Accounts Committee (MPAC) failed to investigate the matter.
5.3.5. In relation to municipal financial viability and management the
municipality had insufficient funds to pay for fixed monthly
operations as its expenditure of R531million exceeded the total
revenue amounting to R436 million. In order to continue paying
for monthly operations the municipality used the funds allocated
for conditional grants for operational expenses, while also not
cash backing about R12.5 million on conditional grants. The
financial difficulties faced by the municipality also led to non-
payment of creditors within 30 days as stipulated in MFMA and
the total amount owed to creditors was over R38.4 million in
September 2017. The municipality also failed to manage its
financial affairs as during 2016/17 financial year it had incurred
R42.1 million in unauthorised expenditure; R31.6 million in
fruitless and wasteful expenditure and R260.4 million in
irregular expenditure. The municipality also received a
disclaimer audit opinion for financial year 2016/17.
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5.3.6. The service delivery challenges faced by the Inkosi Langalibalele
were related to, inability to spend the MIG allocation and other
conditional grants; inability to complete projects related to
electrification of households; irregular and illegal appointment of
contractors; inadequate budget provisions for replacement and
maintenance of infrastructure, and inability to provide sufficient
tools and equipment for service delivery especially waste collection
and management.
5.4. Support provided by Provincial Government
5.4.1. The Provincial Department of Cogta provided a variety of hands
on support to the municipality, and it included assistance with
development of financial recovery plan; establishment of critical
committees; budget related assistance; HR related matters;
contract management and negotiating on behalf of the
municipalities with government Departments owing the
municipality.
5.5. Progress made since commencement of intervention
5.5.1. The administrator identified additional challenges when he
resumed his duties at the municipality and his intervention led to
development of standard operating procedures; asset
management controls, records management and review of the
functioning of the audit committee, internal audit and MPAC.
The administrator also identified a need for capacity building of
ward committee on LGSETA training in order to maximise their
performance.
5.5.2. The administrator reported that processes are under way to fill
all vacancies across all wards. He also reported that all 23-war
rooms are fully functional, with ward 09 war room nominated
for Premier’s Excellence Award. He also reported that
community meeting have been held in all wards. He reported
that the municipality is in the process of developing a public
participation charter.
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5.5.3. The MIG spending has increased to 86.94% as at April 2018
and MISA has deployed engineering experts to support the
PMU, a data capturer and senior technician also appointed to
assist with MIG requirements. The Municipality has received
R15 million INEP for 2017/2018 and has already spent 12.7%
and the spending is envisaged to increase to 70% by June 2018.
The municipality has also submitted a rollover application to
National Treasury on 01 March 2018.
5.5.4. The Municipality is in the process of reviewing its standing rules
and orders and adoption is expected by end June 2018. The
Council, EXCO and Portfolio Committees are sitting to conclude
their business. Relations have also improved between the
Council, management and organised labour.
5.5.5. An audit committee has been established and an audit action
plan developed to address the disclaimer audit opinion.
5.5.6. There are noticeable improvement in revenue collection and the
collection trend is expected to increase to be around 81% by
June 2018 although the National Treasury norm is 95%. A
number of litigations have been settled.
6. Opinions of Political Parties, Organized labour, Business
Forum and Youth on intervention in terms of section 139 (1)
(b) of the Constitution
6.1 The member of the Democratic Alliance (DA) supported the
intervention in terms of section 139 (1) (b) of the Constitution
and the adopted turnaround strategy.
6.2 The Member of the Inkatha Freedom Party (IFP) supported the
intervention in terms of section 139 (1) (b) of the Constitution
and proposed that the intervention should be prolonged until the
end of term of office of the current municipal council.
6.3 The member of the Economic Freedom Front (EFF) supported
the intervention and supported the IFP proposal that the
intervention should remain until the end of the term of office of
the current municipal council.
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6.4 The member of the African National Congress (ANC) supported
the intervention for as long as is possible but not until the end of
the term of the current Council.
6.5 The representatives of IMATU and SAMWU welcomed the
intervention, leadership of the appointed administrator and the
progress made since the invocation of section 139 (1) (b) of the
Constitution in the local municipality.
6.6 The representative of AL-Jamaah welcomed and supported the
intervention as well as the assistance provided by the
administrator. The representative raised concern with regard to
the dependency of the municipality on grant allocation.
6.7 Business Forum reported that they support any positive
initiatives by the Municipality aimed at improving the status of
the local municipality. The business forum further offered free
technical assistance to the municipality, but would like further
engagements with the administrator about debt owed to and by
the municipality.
6.8 Youth Forum also voiced their support for the intervention but
also raised concerns about lack of opportunities for the youth
within the municipality including library and sporting activities.
7. Select Committee Observations
7.1. The Select Committee delegation noted the adherence to all
constitutional and procedural requirements pertaining to
intervention to Inkosi Langalibalele municipality
7.2. The Select Committee noted and observed the R69 million debt
owed to the municipality by Government Departments; R104
million owed by businesses and R47 million household debt.
7.3. The Select committee also noted and observed the overcharging and
inflating of prices by certain service providers when conducting
business with the municipality.
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7.4. The Select Committee observed and noted the issue related to
contracting of 41 bodyguards and the complex nature of safety and
security of councillors within the area.
7.5. The Select Committee noted and appreciated the offer for free
technical assistance to the municipality by the local business forum.
8. Select Committee Recommendations
8.1. Having conducted the loco-inspection and interacted with the
internal and external stakeholders of the Inkosi Langalibalele Local
Municipality, the select committee recommends to the National
Council of Provinces as follows:
8.1.1 The NCOP to approve the notice of intervention in terms of section
139 (1) (b) of the Constitution in Inkosi Langalibalele Local
Municipality.
8.1.2. The MEC of the Department of Cooperative Governance and
Traditional Affairs should provide quarterly and exit reports to the
National Council of Provinces on the progress made in report of
intervention in terms of section 139 (1) (b) of the Constitution and
forensic investigation in terms of section 106 of Municipal System
Act.
8.1.3. The Select Committee on Cooperative Governance and Traditional
Affairs to conduct proactive oversight in collaboration with the
Portfolio Committee on Cooperative Governance and Traditional
Affairs in KNZ Provincial Legislature in order to assess the progress
made in respect on intervention in terms of section 139 (1) (b) of the
Constitution and section 106 of Municipal System Act.
8.1.4. The Select Committee on Cooperative Governance and Traditional
Affairs should ensure monitoring of the terms of reference of the
Administrator and the implementation of the turn- around strategy
through the application the application of Rule 91 of the National
Council of Provinces
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8.1.5. In order to assist the municipality to build institutional capabilities,
the Administrator should fast track the process of resolving pay
parity, filling of vacancies of section 56 managers, appointment of
senior manager for development planning, completion of job
evaluation and presentation of the organogram to the local labour
forum (LLF).
8.1.6. That the MEC of the Department of Cooperative Governance and
Traditional Affairs in collaboration with the Provincial Treasury
should conduct investigation in the local municipality on recovery of
money owed to the Municipality.
8.1.7. The Municipality Council to implement consequence management
against officials found guilty of financial misconduct and other
performance related misconducts.
8.1.8. Administrator to assist the municipality to exercise its facilitative
role by building partnerships with various Government Departments
like Trade and Industry; Small Business and IDC. This will assist
with empowering and supporting youth economic initiatives.
Report to be considered