South African Municipalities To Become Responsible

Cape Town - Municipalities have become more responsible in reporting their financial position, with all 278 municipalities having submitted Section 71 financial information to the National Treasury for the last two quarterly reports, the chief executive of the SA Local Government Association (Salga), Xolile George, said today.

Municipalities are required to submit regular Section 71 information to the National Treasury, which details the financial position and liquidity of local government.

Speaking at a media briefing in Parliament on the release of Salga's 2012/13 annual report, George said one of Salga's achievements was the setting up of public accounts committees on municipalities, which allowed council's themselves to exercise accountability.

Today 93% or 258 municipalities have accounts committees and 95% have audit committees.

During October last year, Salga - which last month received an award from the Auditor-General Terence Nombembe for outstanding performance and achieving its first clean audit - had engaged with 75 municipalities that have persistently been underperforming in their audit outcomes, while municipalities themselves have signed pledges committing themselves to improvements in the audit outcomes.

When it came to use of grants from the fiscus, Salga said spending of the Municipal Infrastructure Grant was at 79% for 2012/13, while spending by municipalities of the Urban Settlements Development Grant, which assists municipalities to upgrade informal settlements, improved over the 90% spending level of 2011/12.

Municipalities receiving direct conditional grants reported an average expenditure of 88.4%, a significant improvement from the 2011/12 underperformance, when an average expenditure of 48.7% was reported for the 155 of 278 municipalities that complied with the National Treasury's expenditure verification process.

Significant improvements have been recorded by municipalities on the delivery of basic services including water, electricity, sanitation and refuse removal.

Last year, 85% of South Africans were connected to electricity, up from 77.1% in 2002, while the percentage of households with no toilets or bucket toilets declined from 12.3% in 2002 to 5.3% last year.

Salga's annual report also revealed that municipalities also outperformed the collections rate target by 2.4%, by achieving a collection rate of 94.6% in the year to date.

However, as of March 31 in the year to date, the collections rate had slipped to 91.3% but had improved over the year to March 31 for 2012 when it stood at 89%, according to the Local Government Revenue and Expenditure: Third Quarter Local Government Section 71 report released in June.

Concerning is that the National Treasury's latest Section 71 report in June revealed that 73% of municipalities paid suppliers within the 30 days mandated by Cabinet, down from 81% paid within 30 days in the year to March 31, 2012.

Salga said it remained concerned about the welfare and support of councillors and had lobbied Parliament and the Minister of Co-operative Governance and Traditional Affairs for better pay and benefits.

Some improvements have been made in the Minister's upper limits notice for the 2012/13 year - including the formalisation of the mayoral residence as a housing benefit, the extension of double travel benefit to speakers and deputy mayors and new pay scales for full-time and part-time chairpersons of Section 79 committees.

Councillors will also be entitled to a risk cover, in the eventuality of service delivery protests or violence.