1133
REPORT
To COUNCIL
FROM THE STANDING
COMMITTEE ON PUBLIC ACCOUNTS (SCOPA)
(FUNCTIONING AS THE OVERSIGHT COMMITTEE)
1.
ITEM NUMBER:
2.
SUBJECT
CITY OF CAPE TOWN ISIXEKO SASEXAPA i STAO KHPSTAO
I
MC 68/03/10
OVERSIGHT REPORT IN RESPECT OF THE 2008/2009 ANNUAL REPORTS
FOR THE CITY OF CAPE TOWN AND ITS MUNICIPAL ENTITIES
ONDERWERP
OORSIGVERSLAG OOR DIE 2008/2009-JAARVERSLAE VIR DIE ST AD
KAAPSTAD EN SY MUNISIPALE ENTITEITE
ISIHLOKO
INGXELO YOKUB'EKILISO NGOKUPHATHELENE NEENGXELO ZONYAKA
KUNYAKA-MALI
KA-2008/2009
ZESIXEKO
SASEKAPA
KUNYE
NAMAQUMRHU KAMASIPALA AZIMELEYO
LSUA2660
3.
PURPOSE
To enable the Committee to discharge its oversight responsibility in considering
the City of Cape Town's Annual Report and those Annual Reports submitted by
the Municipal Entities for 2008/09 in terms of Section 129 of the Local
Government: Municipal Finance Management Act (Act No 56 of 2003) (MFMA).
4.
FOR DECISION BY
The statutory authority to adopt an Oversight Report in respect of the Annual
Report rests with Council.
0200809 Oversight Report (final).doc
ISeptember 2009J
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113~
5.
EXECUTIVE SUMMARY
5.1
MFMA Circular Number 32 recommends the establishment of an oversight
committee for the detailed analysis and review of the annual report(s), following
their tabling in Council, receiving and reviewing representations made by the
public, inputs from other councillors and Council Portfolio Committees and then
drafting an oversight report that may be taken to full Council for discussion.
5.2
The Standing Committee on Public Accounts (SCOPA) is required to perform the
responsibilities of the Oversight Committee as envisaged in MFMA Circular
Number 32 and Section 129 of the MFMA. All Portfolio Committees were
requested to consider the available components of the City of Cape Town's
annual report and those annual reports submitted by municipal entities for
2008/09, with a view to providing comments to SCOPA for inclusion in the
oversight report to be prepared by SCOPA and adopted by Council on 31 March
2010. Relevant comments and resolutions made by the Sub-Councils and the
Portfolio Committees, are contained in schedules attached as Annexure C.
5.3
SCOPA considered the 2008/09 Annual Report of the City of Cape Town and its
Municipal Entities and raised any issues of concern with the Executive
Management of the City of Cape Town at a meeting on 26 February 2010. The
minutes of that meeting is attached as Annexure B. The SCOPA resolutions
flowing from this process are contained in the schedule attached as Annexure A.
5.4
In terms of Section 129 of the MFMA, the Council must adopt an oversight report
containing the Council's comments on the annual report which must include a
statement whether the Council(a)
(b)
(c )
5.5
Has approved the Annual Report with or without reservations;
Has rejected the Annual Report; or
Has referred the Annual Report back for revision of those components that
can be revised.
In terms of MFMA Circular Number 32, in order to approve the Annual Report
without reservations, Council should be able to agree that the information
contained in the report is a fair and reasonable record of the performance of the
municipality in the financial year reported upon. Approval means that the
executive and administration have discharged in full, their accountability for
decisions and actions and that their performance meets the criteria set by
performance objectives and measures and is also acceptable in the community.
0200809 Oversight Report (final).doc
ISeptember 20091
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1135
5.6
SCOPA noted with concern the lack of comment, in respect of the Annual Report,
from the Sub-Councils in general as well as all Portfolio Committees. SCOPA
refers to the recommendation made in the 2007/08 Oversight Report where it was
requested that the Integrated Development Plan (lOP) & Organisational
Performance Management (OPM) Department provides training to the Portfolio
Committees in order to assist these Committees to fully understand the Annual
Report, enabling them to adequately interrogate the performance information
relevant to their portfolio. In this way, the Portfolio Committees and Sub-Councils
can provide in-depth and well debated comments pertaining to their areas of
relevance for consideration by SCOPA during the Oversight Process.
6.
RECOMMENDATIONS
Not Delegated: for Decision by Council:
a)
That Council having fully considered the 2008/09 Annual Report of the
municipality and representations thereon, adopts the oversight report; and
(i)
(b)
That Council having fully considered the 2008/09 Annual Report of the
Municipal Entity, Cape Town International Convention Centre Company
and representations thereon, adopts the oversight report; and
(i)
(c)
Approves the annual report without reservations.
Approves the annual report without reservations.
That Council having fully considered the 2008/09 Annual Report of the
Municipal Entity, Khayelitsha Community Trust, and representations
thereon, adopts the oversight report; and
(i)
Approves the annual report without reservations.
AANBEVELING
Nie gedelegeer nie: vir besluit deur die Raad:
a)
Oat die raad na deeglike oorweging van die 2007/08-jaarverslag van die
munisipaliteit, sowel as vertoe daaroor, die oorsigverslag aanvaar;
en
i)
die jaarverslag sonder voorbehoud aanvaar
o200809 Oversight Report (finai).doc
ISeptember 2009J
Page 3 016
,- 'L' ','
b)
Oat die raad nil deeglike oorweging van jaarverslag van die munisipale
entiteit, die maatskappy Cape Town International Convention Centre,
sowel as vertoe daaroor, die oorsigverslag aanvaar; en
(i)
c)
1136
die jaarverslag sonder voorbehoud aanvaar
Oat die raad nil deeglike oorweging van die jaarverslag van die munisipale
entiteit, die Khayelitsha Community Trust, sowel as vertoe daaroor, die
oorsigtelike verslag aanvaar; en
(i)
die jaarverslag sonder voorbehoud aanvaar
IZINDULULO
Aziqunvaziswanqa: iSiqqibo seseBhunqa:
a)
Ukuba njengoko iBhunga liyiqwalasele ngokupheleleyo iNgxelo yoNyaka
yonyaka-mali ka-2008/09 yomasipala nenkcazelo ezinezizathu zayo,
maliyamkele ingxelo yokub'ekiliso; yaye
(i)
(b)
Ukuba njengoko iBhunga liyiqwalasele ngokupheleleyo iNgxelo yoNyaka
yonyaka-mali ka-2008/09 yamaQumrhu azimeleyo kaMasipala, iNkampani
yeZiko leeNgqungquthela zaMazwe ngamazwe eKapa kunye neenkcazelo
ezinezizathu zazo, maliyamkele ingxelo yokub'ekiliso; yaye
(i)
(c)
Maliyiphumeze ingxelo yonyaka ngaphandle koxhomekeko.
Maliyiphumeze ingxelo yonyaka ngaphandle koxhomekeko.
Nokuba emva kokuba iBhunga liyiqwalasele ngokupheleleyo iNgxelo
yoNyaka yonyaka-mali ka-2008/09 yamaQumrhu azimeleyo kaMasipala,
iQumrhu loLuntu IwaseKhayelitsha, kunye neenkcazelo ezinezizathu zazo,
maliyamkele ingxelo yokub'ekiliso; yaye
(i)
Maliyiphumeze ingxelo yonyaka ngaphandle koxhomekeko.
0200809 Oversight Report (finat).doc
[September 2009)
Page 4 of 6
1137
7.
DISCUSSION/CONTENTS
7.1.
Constitutional and Policy Implications
The Standing Committee on Public Accounts (SCOPA) is required to
perform the responsibilities of the Oversight Committee as envisaged In
MFMA Circular Number 32 and Section 129 of the MFMA.
7.2.
Environmental implications
Does your report have any
environmental implications:
7.3.
No I3J
Yes D
Legal Implications
7.3.1
Local Government: Municipal Finance Management Act, 2003 (Act
56 of 2003)
7.3.2 Local Government: Municipal Systems Act, 2000 (Act 32 of 2000)
Chapter 6, as read with the Local Government: Municipal Systems
Amendment Act, 2003 (Act 44 of 2003)
7.3.3 Local Govemment: Municipal Structures Act, 1998 (Act 117 of
1998)
7.4.
Staff Implications
Does your report impact on staff resources, budget, grading, remuneration, allowances,
designation, job description, location or your organisational structure?
I3J
No
Yes
7.5.
D
Risk Implications
Does this report and/or its recommendations expose the City to any risk?
No
7.S.
Other Services Consulted
None
0200809 Oversight Report (final).doc
ISeptember 20091
Page 5 016
1138
ANNEXURES
Annexure A: Schedule containing Comments and Resolutions from SCOPA
Annexure B: Minutes of the SCOPA meeting held on 26 February 2010 to discuss
the Annual Report
Annexure C: Schedule containing comments from the Portfolio Committees and
Sub-Councils
FOR FURTHER DETAILS CONTACT:
NAME
CONTACT NUMBERS
E-MAIL ADDRESS
DIRECTORA TE
R Jaftha
0214009375
rozan.iafthaCCD.capetown. GOV. za
Internal Audit
FILE REF No
/I
SIGNA TURE : DIRECTOR
II
/)
/---------
\J
0'
i:u
'J
o
LEGAL COMPLIANCE
DATE
NON-COMPLIANT
Comment:
NAME
TEL
REPORT COMPLIANT WITH THE PROVISIONS OF
COUNCIL'S DELEGATIONS, POLICIES, BY-LAws
AND ALL LEGISLATION RELATING TO THE MATTER
UNDER CONSIDERATION.
()2..\
Dca
4\:b Y::Ak,
MF'PO-l
2010
l
Comment:
CHIEF Au
ZAbram
DATE
(Author to cbtain all signatures
0200809 Oversight Report (final).doc
(November 20091
"''''-='"- subrn;ss'icn
to Executive Support)
Page 6 of 6
COMMENTS AND RESOLUTIONS FROM THE SCOPA COMMITTEE IN RESPECT OF THE 2008/09 ANNUAL REPORT FOR THE CITY OF
CAPE TOWN AND THOSE FOR THE MUNICIPAL ENTITIES
Comments and Resolutions
Meeting I Date of
Meeting
SCOPA
26 February
2010
City of Cape Town Annual Report
Municipal Entities Annual Report
Recommend to Council:
That, having fully considered the 2008109 Annual Report of
the municipality and representations thereon, adopts the
oversight report and approves the annual report, without
reservations and note the following resolutions adopted by
SCOPA:
Recommend to Council:
That, having fully considered the 2008/09
Annual Reports of the Municipal Entities and
representations thereon, adopts the oversight
report and approves the annual report, without
reservations and note the following resolutions
adopted by SCOPA:
CHAPTER 1: OVERVIEW OF THE CITY OF CAPE TOWN I CAPE
TOWN
METROPOLITAN AREA
CONVENTION CENTRE
INTERNATIONAL
None
None
CHAPTER 2: REVIEW OF THE 2008/09 FINANCIAL YEAR
KHAYELITSHA COMMUNITY TRUST
Page 26: Highlights in 2008/09 - SCOPA noted the 100%
achievement reflected in terms of the implementation of
upgrading of informal settlements but expressed concern that
these upgrades were not always visible in the communities.
Furthermore, concern was expressed in terms of the
precautionary measures taken by the line departments to
prepare for the potential disasters that may be caused by the
winter season.
Page 133: Amendments to the applicable
basis of accounting - SCOPA commented on
the departure from the basis of accounting,
which resulted in the financial statements of the
Khayelitsha Community Trust (KCT) and its
related entities not being consolidated.
Further concern was raised by the Committee in respect of
the problems experienced with PHP housing and the
relationship between the City and Province, as the
community is sent between these entities with no assistance
being forthcoming.
Reference
SCOPA noted the unqualified Audit Report of
the Khayelitsha Community Trust and the
progress made by the new management team.
SCOPA recommended that KCT present their
next Quarterly performance scorecard to
SCOPA in order to confirm continuing progress.
.....
.....
c..:l
~
»z
z
~
c
;0
m
»
Meeting I Date of
Meeting
Comments and Resolutions
City of Cape Town Annual Report
Municipal Entities Annual Report
Reference
Page 28: Combating anti-social behaviour and crime in
Cape Town - SCOPA expressed concern over the number
of law enforcement officers available to conduct the various
law enforcement activities.
Page 30: Highlights for 2008/09: SCOPA recommended
that night shelters and soup kitchens should assist with the
rehabilitation of street people back into society.
Page 34: Highlights for 2008/09:
SCOPA noted the
calculation error indicated by the line department where the
highlights indicate a 25% improvement in the staff loyalty
index of the City of Cape Town employees. This should be
changed to 24%.
CHAPTER 3: INSIDE THE CITY OF CAPE TOWN
~
..-
u;;..
Page 40: Human Resources and Organisational
Management Overview
SCOPA expressed their
dissatisfaction that the human resource statistics were not
included in the annual report and requested that these be
included in the City's future annual reports as a standing
item.
This includes information on employment equity,
disabilities, skills development and learnerships etc.
CHAPTER 4: FINANCIAL STATEMENTS AND AUDIT
REPORTS
Page 58: Consumer Debtors - SCOPA requested that the
line department consider including a list of the top 20
companies that are in arrears in the Annual Report.
~
Meeting I Date of
Meeting
Comments and Resolutions
City of Cape Town Annual Report
Municipal Entities Annual Report
Reference
Page 61: Expenditure - SCOPA requested that the
expenditure in respect of contracted services should be
monitored and that the stringent controls indicated by the line
department should be strictly enforced.
Page 110: 43.1 Supply Chain Management regulations of
the City of Cape Town - SCOPA expressed concern over
the amount spent on deviations and requested that the
stringent controls indicated by the line departments should be
enforced.
Page 135: Follow up of audit findings - SCOPA expressed
concern in respect of the City's disagreement with the
findings of the Auditor General and the resolution of these
audit findings.
ANNEXURE A:
Page 148: 2A.3 Percentage of HH's with access to basic
levels of electricity - SCOPA expressed concern over the
achievement of this indicator, the impact of budget
constraints and the relationship between Eskom and the City
that negatively impacts the supply of electricity to
communities.
Page 150: 2B.2 Percentage compliance with Four Critical
DWAF effluent standards - SCOPA noted the steps taken
by the City to pursue the companies responsible for dumping
zinc and other toxic substances into the City's waste water
systems.
FEEDBACK FROM THE PUBLIC PARTICIPATION
PROCESS - SCOPA exp!essed concern over the lack of
....
-
.....
Meeting
Date of
Meeting
Comments and Resolutions
City of Cape Town Annual Report
Municipal Entities Annual Report
Reference
feedback from the Portfolio Committees and the Public in
respect of the Annual Report and requested measures to be
implemented to improve the quality of the feedback.
GENERAL - SCOPA highlighted that departments should
ensure that all information included in the City's Annual
Report is adequately supported by documentary evidence
which should be readily available for audit purposes.
......
.....
~
~
1143
- MINUTESOF THE MEETING OF THE STANDING COMMITTEE ON PUBLIC ACCOUNTS
(SCOPA) HELD IN MEETING ROOM 1, PODIUM BLOCK, CIVIC CENTRE, CAPE
TOWN ON FRIDAY 26 FEBRUARY 2010 AT 10:00
PRESENT
COMMITTEE MEMBERS
AFRICAN NATIONAL CONGRESS
Cllr P Gabriel (Chairperson)
Cllr M Labase
Cllr M Klaas
Cllr V Mavungavunga
INDEPENDENT DEMOCRATS
Cllr P Gouws
DEMOCRATIC ALLIANCE
Cllr P Chapple
Cllr P Hill
Cllr S Pringle
Cllr J van der Merwe
Cllr B van Dalen
Cllr S Yuba
OFFICIALS
Z Abrams
V Bolto
R Jaftha
S Thomas
T Mac Tavish
C Maurer
M Mpikashe
D Beretti
A Ebrahim
C January
W Claassens
W Carelse
P van Zyl
L Barchard
I Bromfield
R Bosman
: Internal Audit
: Forensics
: Internal Audit
: Internal Audit
: Internal Audit
: Forensics
: Legal Services
: Corporate Services
: Office of the City Manager
: IDP.OPM
: IDP.OPM
: IDP.OPM
: Strategy and Planning
: Office of the City Manager
: Health
: Safety and Security
1144
STANDING COMMITTEE ON PUBLIC
26 FEBRUARY 2010
ACCOUNTS (SCOPA) MINUTES
o Paulse
: Utility Services
N Damane
: Utility Services
A van Vuuren
: Utility Services
Dr B Msengana
: Utility Services
G Jeffries
: Utility Services
A Karriem
: Utility Services
Z Basholo
: Utility Services
A Kotzee
: Housing
P Mashoko
: Water Services
G Jonkers
: Utility Services
R Riffel
: Executive Committee Services
L Mtwazi
: Community Services
M Marsden
: Service Delivery and Integration
R Falken
: Strategic HR
M Mohamed
: Economic Social Development and Tourism
PRESS
A Lewis
PUBLIC
W Swart (Auditor General)
L Holland (Auditor General)
T van Rooyen (Auditor General)
C Sickle (Auditor General)
LEAVE
Cllr L Anderson-Jardine
ABSENT
None
· .
"
1 t 45
STANDING COMMITTEE ON PUBLIC
ACCOUNTS (SCOPA) MINUTES
SCOPA 01/02/10
26 FEBRUARY 2010
OPENING AND PRAYER 1 MOMENT OF SILENCE
The Chairperson, Councillor P Gabriel, requested that a moment of
silence be observed.
SCOPA 02/02/10
APOLOGIES 1 LEAVE OF ABSENCE
RESOLVED that it BE NOTED that Councillor L Anderson-Jardine
had been granted leave of absence by the Chief Whip.
SCOPA 03/02/10
CHAIRPERSON'S REPORT
The Chairperson welcomed everyone to the meeting and stated that
the main focus was to consider responses to the questions raised
by SCOPA regarding the Annual Report.
SCOPA04/02/10
CONFIRMATION OF THE MINUTES OF THE MEETING HELD ON
20 NOVEMBER 2009
RESOLVED that the minutes of the meeting held on 20 November
2009, BE CONFIRMED.
SCOPA 05/02/10
OUTSTANDI NG MATTERS
(1) QUARTERLY REPORT ON STATUS OF INVESTIGATIONS:
FULL SWING TRADING CC AND AFRICAN JEWELLERY
CITY
(1.1) FULL SWING TRADING
Mr Mpikashe indicated that the City's lawyers applied to
the High Court for a trial date in respect of this matter. Mr
Mpikashe indicated that the City may only be granted a
date in 2011 or 2012 as a result of the backlogs
experienced by the High Court.
RESOLVED that the application made for a trial date in
the High Court BE NOTED.
ACTION: M MPIKASHE 1L MBANDAZAYO
11d6
STANDING COMMITTEE ON PUBLIC
ACCOUNTS (SCOPA) MINUTES
(1.2) AFRICAN JEWELLERY CITY
26 FEBRUARY 2010
Mr Mpikashe indicated that the City's lawyers have
applied for a court order to attach the immovable
property, i.e. house that was previously confirmed by the
Deeds Office.
RESOLVED that the comments above BE NOTED
ACTION: M MPIKASHE 1 L MBANDAZAYO 1 V BOTTO
(2) ITEMS REQUIRING FOLLOW-UP EMANATING FROM THE
CONSIDERATION OF THE CITY'S 2006/07 ANNUAL
REPORT AND 2006/07 AUDITOR-GENERAL'S REPORT
TIME THEFT
(2.1)
MESSRS MBALI
The legal advisor, Mr Mpikashe, reported that a summons
had been issued, but that Mr Mbali no longer resided at
the address that was previously provided. A new address
was obtained and the Sheriff was instructed to re-issue
the summons.
RESOLVED that the re-issue of the summons at the new
address of Messrs Mbali BE NOTED.
ACTION: MR MPIKASHE 1 L MBANDAZAYO
(2.2)
MESSRS DINGA
Mr Mpikashe indicated that a report had been prepared
for the institution of legal action in the High Court. He
further indicated that this matter has been referred back
to this Committee, as Mr Dinga is a state patient and that
he had owned no assets. However, a portion of Mr
Dinga's pension fund was still to be paid to him. Mr
Mpikashe indicated that Legal Services will be drafting a
new report to serve before this Committee in this regard.
Ms Abrams placed on record that it was always known
that there was a pension payment due to Mr Dinga,
however this information was not communicated to the
Executive Mayor prior to his sign-off of the report.
RESOLVED that the report from the Legal Department in
respect of a High Court application BE SUBMITTED.
4
~.
11~7
STANDING COMMITTEE ON PUBLIC
ACCOUNTS (SCOPA) MINUTES
ACTION
THOMAS
(2.3)
26 FEBRUARY 2010
MR MPIKASHE 1 L MBANDAZA YO 1 S
MESSRS BROWN
Mr Mpikashe said that there was a report that was
approved to institute legal action for an amount of R70
000, but it was found that the total amount owed to the
City is approximately R133,000. Mr Mpikashe indicated
that the City's lawyers were instructed to stop the issuing
of the initial summons, as the amount is in excess of the
Magistrate's Court jurisdiction and would have to go to
the High Court. The option of splitting the amount into
smaller amounts owed, was also considered in order for
the matter to be heard in the Magistrate's Court. The
responsible line department also capped their legal cost
committed to R26,000. Legal Services cannot give an
undertaking to bear the additional legal costs.
RESOLVED
that
CONSIDERED.
the
above
comments
BE
ACTION: M MPIKASHE 1 L MBANDAZAYOI
STHOMAS
(2.4)
MESSRS TSOBO
Mr Moll stated that a disciplinary hearing was held and
that the outcome was expected by the following week.
RESOLVED that a full report BE SUBMITTED at the next
Committee meeting.
ACTION: A MOLL
(3) MATTERS REFERRED BY THE MAYORAL COMMITTEE (MC
09/02/09):
IRREGULAR
EXPENDITURE
IN
2007108
FINANCIAL STATEMENTS
(3.1 ) SUPPLY CHAIN MANAGEMENT
This matter was discussed under item SCOPA 07/02/10
(3.2)
LABOUR BROKERS
•
1148
26 FEBRUARY 2010
STANDING COMMITTEE ON PUBLIC
ACCOUNTS (SCOPA) MINUTES
RESOLVED that a comprehensive report on this matter
be submitted to Scopa
ACTION: R FALKEN 1 L MBANDAZAYO
(4) NAME OF THE COMMITTEE
Ms Thomas advised that she had liaised with the Office of the
Minister of Co-operative Governance and Traditional Affairs in
December 2009 and that they were still looking at the
framework. In February 2010, APAC advised that the Office of
the Minister is amending the framework due to changes
emanating from a Lekgotla that was held in that month. A new
date to establish MPAC's has been scheduled for March 2010.
RESOLVED that the investigation of the name of the Committee
remain on the schedule of outstanding matters pending the
finalisation of the framework by the Minister.
ACTION: S THOMAS
SCOPA 06/02/10
200812009 ANNUAL REPORT OF THE CITY OF CAPE TOWN
AND ITS MUNICIPAL ENTITIES
Cllr Gabriel referred to Page 18 of the report which states that 99%
of households have access to solid waste removal and asked what
the term "households" include and whether backyarders and
informal settlements were taken into account.
Dr Msengana indicated that "households include the following; (i)
formal domestic properties serviced with a weekly door to door
containerised refuse collection; (ii) backyard dwellers in a formal
area that is linked to the main house; and (iii) formal households
receiving an integrated cleaning and refuse collection service 1
weekly door to door bag collection service. This service has been
rolled out to all known informal settlements. He further mentioned
that backyard dwellers and informal settlements had been taken
into account and that the City was looking at ways to improve these
services of backyard dwellers.
Cllr Gabriel referred to Page 18 of the report and enquired what the
City's approach was to the provision of toilets and the determination
of the number of toilets per informal household. Dr Msengana
stated that in the absence of national norms and standards, the City
has established its own standard which is a ratio of one toilet for
every five dwellings. This is regarded as a minimum level of
service. Furthermore, before the City installs these toilets, the
community is engaged and presented with a basket of sanitation
6
~.
11d9
26 FEBRUARY 2010
STANDING COMMITTEE ON PUBLIC
ACCOUNTS (SCOPA) MINUTES
types. Installation takes place once consensus is reached between
the City and the community. Dr Msengana said there a re various
aspects of a particular area that are considered such as
practicability, topography, density, etc.
Cllr Gabriel referred to Page 22 of the report and enquired whether
informal settlements have been included in the calcu lation to arrive
at the reduction of energy consumption. Dr Msengana responded
in the affirmative.
Cllr Gabriel referred to Page 26, which refers to the 100%
implementation of the upgrade of informal settlements program and
further enquired about the current progress of the Community
Residential Unit (CRU) Upgrade Programme. Ms Kotzee stated that
the 100% implementation is directly related to the scorecard of the
Executive Director's key performance indicator (KPI). The KPI is for
the servicing of 863 units and currently the City has serviced 1200
units in that year in the Delft Temporary Settlement area, which is
an over performance in that regard. Ms Kotzee mentioned that
there is a new CRU Programme, which is a new KPI. The City
obtains funding from the National Housing Programme where funds
can be accessed to upgrade current residential rental units. The
City currently has 43 000 units which were built in the 1950's and
these units are in urgent need of repair. The City has managed to
obtain funding to the value of R900 million to be rolled out over a
two year period. Ms Kotzee said the first phase was to perform an
assessment of the areas to determine the status of the buildings in
order to prepare a funding application to Provincial Government.
The City has completed the Business Plan for seven applications.
At present, approval was obtained for the seven. Three detailed
plans, the first of which was launched in January and the following
two will be launched in March. The residents of Kew Town have
already been moved to the temporary housing units.
Cllr Yuba expressed concern over the 100% implementation as he
cannot see this taking place in the community. He enquired what
Housing is doing about upgrading informal settlements and
relocating communities from where they currently reside, as winter
is approaching and precautionary measures has to be taken to deal
with potential disasters. Ms Kotzee clarified that the subsidy is
related to temporary resettlements and refers to the 863 upgrades
and not the 8500 housing opportunities. This is not the total
programme for the upgrading of informal settlements as that is
separately covered in the five year plan. Communities are assisted
based on the database and the Allocations Policy as well as what
the fixed DORA allocation allows the City to deliver in a year. Cllr
Yuba further enquired where PHP fits in, as many problems are
experienced relating thereto as well as the approval of these
7
~.
1150
26 FEBRUARY 2010
STANDING COMMITTEE ON PUBLIC
ACCOUNTS (SCOPA) MINUTES
projects. The community is being sent between the City and
Provincial Government to no avail. Ms Kotzee indicated that
funding is allocated towards the projects within the DORA allocation
each year, in accordance with a priority list that is determined
through the lOP process and fixed in the five year plan for housing.
Hence PHP and other projects cannot be approved as applications
are submitted.
Cllr van der Merwe enquired why the housing opportunities reported
earlier by Ms Kotzee (page 7 of the minutes - paragraph 4). i.e.
8500 is less than the 9500 quoted on Page 26 of the report. Ms
Kotzee indicated that the 15 year horizon has to be taken into
account and land banking that has to take place, decreases the
opportunity figures. This amount varies per year.
Cllr Gabriel referred to Page 28 which deals with the question of
how 76% compliance was reached and which aspects were
evaluated to arrive at the 76% as well as the aspects of the City's
Law Enforcement Plan that was not complied with. Mr Bosman
stated that 4 out of the 17 targets that were set, had not been met,
due to the following factors;
a) The first target was the Community Perception Survey that was
done on an annual basis to test the community's perception of
the effects with regards to the enforcing of by-laws, traffic laws
and visibility of staff. A target was set to obtain a rating of 3 out
of 5, but the responses came back at an average of 2,4%. The
outcome was that by-laws should be improved, with regards to
enforcement e.g. Illegal dumping and traffic laws
b) The second target was the number of driver's tests actually
conducted. The target was set at 67 000, but only 60 924 was
reached. The main issue is that people book appointments 6
months in advance and then does not do the test. Mr Bosman
also mentioned that with the help of the National Department of
Transport, all bookings will be done electronically on the system,
which limits the manipulation on the system. On average, up to
1500 people do not keep their bookings, which in turn increases
the backlog.
c) The third target was in respect of the collection of R165 million
relating to traffic fines. Only R158 million was cOllected. Mr
Bosman said that the biggest factor was that more people are
applying to the court for a reduction of fines after being tu rned
down by the City. Thereafter they apply to the Magistrate's
Court for a reduction. In certain instances, fines are reduced by
between 60% to 70%, which affects the City's income.
d) The fourth target relates to a reduction of the income from
licensing. This was as a result of the Somerset West Office
being closed for a period of time, which affected the number of
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people to be tested. The City will also be opening an office in
Fish Hoek shortly, which will deal with all applications in the
south.
Mr Bosman also mentioned that in 2008/09 the Annual Police
Plan was not produced timeously and was only approved in
August 2009, although it should have been signed in June 2009.
He mentioned that the problem has now been addressed.
Cllr Pringle posed the question to Mr Bosman, enquiring
whether testing refers to people booking at multiple centres,
paying for the appointment and then not arriving for the test, or
does the City only collect payment subsequent to the testing.
Mr Bosman stated that payment is required upfront to secure a
booking. He mentioned that before the new electronic system,
bookings could be made at 6 to 7 different centres. As the
opening arose, the person would take the first booking, which
also filled the bookings at the various centres. The other
problem that arose is Learner License Brokers who would also
book at various centres and would have someone within the
Traffic Department arranging substitutes, at a cost in the region
of R2000. Mr Bosman mentioned that with the new electronic
system a person could only book at one centre, as it is linked to
NATIS. This system was installed by the National Department
of Transport at no cost to the City.
CUr van der Merwe enquired how by-laws will be enforced in the
absence of sufficient Law Enforcement Officers. He also asked
whether there is a plan to recruit more Law Enforcement
Officers. Mr Bosman responded that they are in the process of
recruiting 75 full-time law enforcement officers, which will be
drawn from the seasonal workers. Additional staff will also be
required for the cable theft unit, informal trading and general bylaws. The department has received over 4000 applications, but
currently have 170 in employment until the end of August 2009.
The City would be drawing from these workers first, as there has
been a lot invested in them. Mr Bosman agreed that Law
Enforcement has been neglected, but this should improve
substantially.
CUr Gabriel referred to Pg 30 were the figures reflect the number of
people taken off the streets and what further monitoring
mechanisms are in place to ensure that people do not return to the
streets. The question was posed to outline the City's plan to deal
with vagrants in the City.
Mr Mohamed mentioned that there are repeat offenders/vagrants
who have been on the streets for between 20 - 25 years, for whom
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there is no productive employment and where it would be a
challenge to keep them off the street. The City has initiated various
programmes to prevent people from living on the streets e.g. Arts
and Culture Programme, where people can go back to school. The
City also works in partnership with various networks of care, which
the City also supports financially. Cllr Pringle asked what was
meant by "taking off the street", should it not be rehabilitate back
into society, and requested Mr Mohamed to provide clarity. Cllr
Pringle stated that members of the community pay street people to
stay on the street. This is done with a sense of willingness to assist
and a genuine desire to help. Cllr Pringle enquired what the City is
doing to encourage people to give responsibly and secondly to
encourage the soup kitchens and night shelters to actually get the
people rehabilitated into society.
Mr Mohamed said that the City is encouraging people not to give
money. The City in partnership with Eyes Closely and a National
Government Organisation (NGO) U Turn, developed a system of
issuing vouchers. These vouchers are for Pick n Pay, which
encourages a positive behaviour and also encourages people to go
to a night shelter. Mr Mohamed also mentioned that the City in
partnership with an NGO called Broccoli, have developed an
electronic system for donations. This is strictly a rewards system for
the poor.
Cllr Gabriel asked Mr Mohamed what is the estimated number of
homeless people within the Metro. Mr Mohamed said that the
official number is 1000, but that the unofficial number is about 5000
people.
Cllr Hill asked that if all persons are on a database, why is there a
discrepancy between the 1000 and 5000. Mr Mohamed stated that
not all street people are vagrants. There are runaways from home,
children that spend the day on the street and then return home at
night. Their count was done according to a street person that does
not have a home, i.e. a homeless person. The definitions of street
people versus homeless person differ.
Cllr Hill made reference to a question that was asked by Sub
Council 17, with reference to Page 133 of the Annual Report
regarding the Khayelitsha Community Trust. Cllr Hill asked what
the Trust was doing to address the concerns highlighted in point 10
of the Auditor General's Report.
Ms Muller stated that this matter is not for the Khayelitsha
Community Trust to deal with, but the City. Ms Muller mentioned
that the Trust's figures had previously been included, but as the
land is sold to the Trust, the Trust empowers the Community and
plough funds back into the Community and that it will never become
the City's property. Ms Muller indicated that the Khayelitsha Trust
Financial Statements should not be consolidated with that of the
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City of Cape Town. The Finance Department took a strong stand
this year to continue this process, as it inflates the figures and is not
showing a true sense of the City's assets. This process is currently
being evaluated by the National Accountant General's Office and
they will come back with a ruling of how the accounting standards
must be applied.
Cllr Gabriel referred to Page 34 with regards to the highlights that
indicated a 25% improvement in the staff loyalty index and enquired
what the current staff loyalty percentage is.
Mr Beretti stated that a culture climate survey had been conducted
by Ipsos Markinor, which was the largest survey done in the Public
Sector. All 23 000 employees where given an opportunity to
participate in the survey. Mr Beretti indicated that the baseline was
set in the first survey in 2007, which was 25%. In 2009 a target of
28% was set. These figures translate into a 12% improvement of
staff loyalty. Mr Beretti indicated that 31 % does not reflect in the
improvement of staff loyalty index, it reflects the actual percentage /
score in the 2009 Culture Climate Survey of the truly loyal staff in
the City. Mr Beretti also mentioned that confusion arises with the
wording of Page 160 with the target indicators. Mr Beretti stated
that the indicator refers to the percentage of improvement and the
target is the actual loyalty figure that was achieved of 28%. Mr
Beretti mentioned that there is a calculation error and that the
percentage should be amended from 25% to 24%. Mr Beretti
indicated that the 25% (it should be 24%) stated in the highlights on
page 34 of the Annual Report is correct and that the staff loyalty is
31%.
Cllr Gouws asked why the figure of 31% truly loyal staff is so low
and how does it compare with State Departments and the Private
Sector. Mr Beretti stated that he does not have access to other
state bodies and the private sector for this kind of information. The
global benchmark is 41% and the City achieved 31%. Mr Beretti
mentioned that the first survey was conducted during the realignment period. The figure has increased by 24% and the
projects are being alig ned to the survey. Cllr van Dalen raised his
concern that only 31% of the City's staff complement is happy. Mr
Beretti said that in a normal society, the average is 41 %. Cllr Pringle
mentioned that if the 31 % of the staff are totally loyal, it does not
mean the 69% are totally disloyal. Cllr Pringle referred to the
factors which contributed to the disloyalty of staff and enquired what
steps have been taken to improve the situation and whether such
improvement is being achieved. Mr Beretti stated that the figure of
25%, according to Markinor was above reasonably good. After the
first survey, the City responded to the staff's concerns and this
contributed to the improved figures.
Cllr Gabriel referred to Pg 40 with regards to the HR statistics e.g.
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Staff demographics, employment equity etc, which is no longer
reflected in the Annual Report. Why is this the case and can
management provide the standard HR statistics previously included
in the City's Annual Report. Mr Beretti acknowledged that the
documentation and tables were published last year in the Annual
Report and the same update was sent to the lOP Office for inclusion
in the 2008/09 annual report. The IDP Office had instructions to
decrease the size of the report. Mr Beretti stated that the report is
available and could be published as an addendum.
Cllr Labase was unhappy with the explanation and would have
preferred that the Committee be provided with statistics around the
issues of skills development, learnerships, etc. He further indicated
that the committee should be aware of Council's status in terms of
employment equity and disabilities. Cllr van der Merwe agreed that
it is of the utmost importance to have the HR statistical data
reflected in the Annual Report. Mr Beretti said that he would
provide the Scopa members with the statistics on 1 March 2010.
He further indicated that if deemed necessary, the information can
be submitted as an annexure to the Annual Report and that it be
resolved by the Committee that the HR statistics should be included
in the City's Annual Report as a standing item.
Cllr Gabriel referred to Page 148 (2A.3) and enquired what
measures are in place to eliminate electricity backlogs.
Dr
Msengana stated that the City of Cape Town has a 100%
electrification rate in all formal housing developments.
The
backlogs predominantly exist within the informal settlements in the
Eskom supply areas. Dr Msengana indicated that certain areas
within informal areas are excluded in terms of the City's policy for
the following reasons:
a) Dwellings below the flood line
b) Dwellings under power lines
c) Dwellings on private property, etc
Dr Msengana mentioned that the bulk informal settlements not
electrified, apart from those areas that are excluded, are in Eskom's
area of supply. Due to an agreement reached through engagement
processes between the City and Eskom, the City does provide
electrification in Eskom licensed areas. Dr Msengana stated that
challenges exist with the funding from the Department of Energy. In
2010/11, Eskom requested R180 million for electrification projects,
but unfortunately only received R65 million from National
Government. As a result, Eskom decided to prioritise the N2
Gateway and Bardale, which means informal settlements under
Eskom's licensed area of supply are not on a prioritised list. Dr
Msengana said he has been advised by Eskom that negotiations
with the national Department of Energy to source funding,
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continues. This meeting is due to take place on the 8th and 9th
March 2010.
Cllr Gouws enquired how the problem could be solved for the City to
Dr
supply electricity to dwellings on privately owned land.
Msengana indicated that the City can only provide electricity on
private land where the owner agrees. Where the landowner does
not agree, the City will provide electricity on the periphery of the
informal settlements. Currently, in terms of City and National
policies, the City may not provide electrification in certain areas. It
should also be noted that it is a risk to the City to erect infrastructure
on private land even where the owner agreed.
Cllr Vuba referred to the money received by Eskom and the
prioritised list and questioned whether many of the areas in
Khayelitsha was included on this list. He further enquired whether
the City can reach an agreement with Eskom to electrify informal
settlements on the City's land where the City may have funds
available. Dr Msengana indicated that the response to this question
would be complicated. Two licensees in a metro area create a
challenge. Eskom is in the process of completing a sub station
which would be able to provide 40 000 connections in Khayelitsha.
Negotiations between the City and Eskom would determine whether
electrification takes place and whether funding is available.
Electrification of this nature would thus be complicated due to the
challenge of two licensees in one area and the existing bu dget
constraints.
Cllr Gabriel referred to Page 53 of the report and requested reasons
for the increase in the actual vs. budgeted impairment cost as well
as in comparison with 2008. Ms Muller indicated that although the
costs were referred to on page 53, more detail is provided on page
104 of the report. With reference to the last line in note 31 on page
104, i.e. the impairment of property, plant and equipment, a large
portion is related to land made available for low cost housing
opportunities. With the land being made available for low cost
housing, it was found that the land had a lower value and the land
had to be written down. Irrecoverable debts written off in note 31
refer to the cost incurred during the xenophobic attacks. Cllr van
der Merwe enquired if the lower value of the land could not have
been detected earlier in the process. Ms Muller explained that the
land is bought for the potential it may have and not particularly to be
zoned for housing and the potential is included in the market value
of the land. The impairment arises when the land is used for low
cost housing.
Cllr van Dalen stated that the difference caused by using the land
for low cost housing is covered by the ratepayers of the City. He
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enquired where the money paid by the ratepayers into the subsidies
of low cost housing is reflected. Ms Muller indicated that it is
reflected in the impairment of the land. It is a cost and a benefit as
the land becomes a benefit to the buyer and the benefit is the
difference between the purchase price and the sale price. Cllr van
Dalen indicated that it is important that these facts are highlighted
as vast amounts of funding goes towards low cost housing as well
as subsidies although this is not always acknowledged.
Cllr Gabriel referred to Page 53 of the report and requested reasons
for the increase in the finance costs and borrowing as well as how
the City monitors the borrowings to ensure that indebtedness does
not have a mounting negative impact on future financial years. Ms
Muller stated that finance costs have increased in the 2008/09
financial year and this is directly attributed to the bond issue, which
in turn is attributable to the increased capital spending. In the
2007/08 financial year, the City issued the bond in June 2008 hence
some of the costs are included in 2009. The second bond issue
was in 2009. Page 105, note 34 cover some of those effects. The
City has a Medium Term Income Expenditure Framework (MTIEF)
and the impact of any borrowing is modelled long term for 15 - 20
years to determine the impact in the outer years. The City is very
careful about this issue. With reference to page 116 of the report,
paragraph 45.4 at municipal level, the borrowings can be
considered to be up to 50% of the gearing ratio. The City is currently
in the region of 38%.
Cllr Gabriel referred to page 61 of the report and asked for reasons
for the increase in plant and maintenance expenditure. Ms Muller
indicated that the increase is due to the increase in the investment
in the repairs and maintenance costs. This is the strategy that the
City is following. There is a benchmark rule of thumb that 10% of
your budget should be allocated to maintenance. There is also
ageing infrastructure in some areas and hence the department
ensures that the 10% is adhered to in certain places.
As
expenditure in capital projects increases, this cost will increase.
Cllr van der Merwe enquired where emergencies are covered. Ms
Muller indicated that any repair should go through that particular line
item.
Emergencies are usually unbudgeted, resulting in the
department having to do an adjustment whether it is a virement from
areas where there are savings or through a formal adjustment
budget process, in order to ensure that sufficient funding exists to
deal with an emergency.
Cllr Gabriel referred to page 58 of the report and enquired which
portion of the outstanding consumer debtors can be attributed to the
provincial and national departments; whether the City has
mechanisms in place to recover the outstanding amounts and
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whether any further write-off's are envisaged. Ms Muller indicated
that the consumer debtors were R5.82 billion at 30 June 2009. The
provincial and national government debt amounted to R312 million
as per note 9 on page 79 of the report. The City has numerous
mechanisms in place to recover outstanding debts with the Credit
Control and Debt Management policy being fundamental in this
process. There are final demands that are issued, there are
restrictions and disconnections for commercial properties,
restrictions to water for residential properties and disconnections of
electricity, etc. There is a special focus group that specifically deals
with the government accounts. Because of the R312 million it was
raised again with the Premier. There is also a special focus on the
top 1000 debtors. Water Services also has their own programme in
place, e.g. repairing the number of water leaks, water management
devices and it is intended to reduce the debt by R 1.5 billion. There
will be further write offs and indigent debts would have to be written
off as long as it has been pursued as far as possible by the City as
per the policy. Cllr van der Merwe enquired which mechanisms
were in place to recover outstanding amounts and whether the top
10 or 20 businesses that are in arrears could be listed by the
Finance Department. Ms Muller stated that the top 1000 covers all
debtors that fall within this category. Progress made by the focus
group is reported to the Finance Portfolio Committee as well as the
legal action related to these debtors. Cllr van der Merwe indicated
that when looking at the government list, the various departments
are named and he is interested to know whether the Revenue
Department can list the top companies. Ms Muller indicated that
she would refer this recommendation back to the Revenue
Department to look into the legalities of the matter.
Cllr Gabriel referred to page 61 of the report and asked that reasons
be provided for the increase in expenditure on contracted services
as well as on which expenditure line items (besides contract
services) the City's consultant's expenditure is recorded. Ms Muller
indicated that the increase of contracted services is main Iy due to
the increase in water and sewerage to informal settlements and the
upgrading of water treatment works. On Page 106 of the Annual
Report, note 37, the 41h line refers to the actual cost of the
consultants with the previous year being R42 million and R58 million
at the end of June 2009. There are stringent controls in place at the
moment to keep the consultants within budget. There is a process
in place to approve consultants through the Office of the City
Manager as well as approval to use the centralised consultants'
fund.
Ms Muller responded in the affirmative to Cllr Gabriel's
question if there was a consultants' budget. Cllr van der Merwe
enquired how it is decided to use a consultant versus the City's
resources. The City Manager responded and stated that this
decision depends on the need.
For example if a forensic
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investigation has to be conducted and the City does not have the
capacity to perform the investigation, a decision will be made to
source an external service provider. This will be done via the
procurement process.
Cllr Gabriel referred to the breakdown of deviations on Page 110 of
the report and requested an analysis of deviations per Directorate
as well as a description of the deviations named "Other". Ms Muller
referred to the breakdown and indicated that the greatest deviation
per Directorate came from Transport, Roads and Stormwater and
these are predominantly related to the 2010 and BRT projects. The
biggest category for deviations related to spending in terms of 2010
across all Directorates in the City.
Another category is the
deviations that can be attributed to capacity problems forming
21.6% of the total value. The stringent controls implemented by
Supply Chain Management and the limited amount of deviations
being approved would decrease the amount. The "Other" category
includes amounts such as incorrect amounts, urgent maintenance
where a pump suddenly breaks, year end function for councillors,
security for minstrels etc.
Cllr Gabriel referred to Page 57 of the report and enquired about the
under expenditure with housing backlogs. Ms Kotzee explained
that the particular budgetary line item should be read with the
DORA allocation. This was 99.8% spent and is the main source of
It ranges from R600 million to
income for subsidy housing.
R900million over the next MTREF years. Ms Kotzee indicated that
it should be noted that there is always a challenge, as the budgetary
year of the City differs from that of Provincial Government. All
projects cannot always be completed within the fixed budgetary
amount. Any additions are covered by the City and have to be
managed between the budgetary years. The City's first priority is to
spend the DORA allocation; thereafter the City funding will be
In that particular year, seven projects underperformed
spent.
although the subsidy amount was spent. The City's funding will only
be spent in the following year.
Cllr van der Merwe enquired regarding the reasons for the
underperformance of the seven projects. Ms Kotzee indicated that
two projects where the underperformance was the largest was the
Steenberg Social Housing Project and the Westcape Cape Town
Community Housing project. Social housing projects are difficult as
three sources of funding are used. The delivery in these projects
was slow and they respectively underperformed with R6m and
R2.5m. Furthermore, unrest for a week in the Melkbos area
resulted in 200 houses not being delivered and an under
expenditure of R1.3m as well as a further under expenditure in the
areas of Happy Valley (R1m), Bardale (R1.4m) and Silvertown
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(R1.5m). Cllr van der Merwe enquired if there are mechanisms in
place to avoid under performances in the future. Ms Kotzee
indicated that in the cases listed, the under performance was mostly
due to community matters and can be managed through constant
communication through the ward councillors and steering
committees. Cllr van der Merwe asked what the target for houses is
for the 2009/2010 financial year. Ms Kotzee indicated that she does
not have the correct figures but is of the opinion that it may be 8500
housing opportunities.
Cllr Gabriel requested information in respect of the cost of the
Labour Brokers for 2008/09 as well as a breakdown of the cost of
Labour Brokers per Directorate. Ms Muller indicated that Utility
Services was the biggest contributor to the cost of Labou r Brokers
for 2008/09, due to the nature of the functions that they perform. A
number of the Labour Broker staff has now been converted to City
staff. It is intended to continue the use of the Labour Brokers but
only for the correct purpose. Mr Beretli indicated that the problem is
not with the usage of labour brokers but in the way that it has been
applied. Managers would appoint labour brokers for service delivery
purposes but would employ them for a long period whereas the
correct application is to appoint labour broker staff with the correct
skills, to perform certain tasks and for these labour broker staff to
leave on completion of the task. Solid Waste was the main area
where there were over 1000 labour brokers.
This year in
conjunction with HR, a process was followed and the labour broker
application was drastically reduced. Mr Beretli indicated that there
should be a considerable reduction in this amount by next year.
Cllr Gabriel referred to Page 124 relating to Related Party
Disclosures. Cllr Gabriel mentioned that Cllr Anderson-Jardine is
listed as a Managing Director of Sheen Industrial, which is incorrect
and asked how this would be rectified. The City Manager, Mr
Ebrahim stated that the information is reflected in the annual report
based on the information contained on the Declaration of Interest
form. The City Manager stated that this form was vague and that he
had asked the auditors to recommend changes to the form to make
it more specific. With regards to fixing the problem, the City
Manager stated that all the changes effected by this meeting will be
reflected in the minutes of this meeting and these minutes together
with the SCOPA report is submitted to Council for approval. The
City Manager said that once the changes were adopted, he would
ask the IDP Department to circulate an annexure with errata to all
persons who have received a copy of the Annual Report.
Cllr Gabriel referred to Page 104 of the report and enquired why the
remuneration of board members 1 directors 1 trustee fees decreased
as well as to which entity it relates. Ms Muller stated that previously
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the Cape Town Housing Community Company was consolidated
with the City's statements because of the 50% shares owned by the
City. These shares were sold; hence the statements are no longer
consolidated with the City. The Directors remuneration of this entity
was no longer included in this figure and this makes up the figure
between the two financial years.
Cllr Gabriel referred to Page 106 and requested an explanation for
the increase in the cost of telecommunications expenditure in the
light of the City's plans for wireless connectivity and intention to
reduce the cost of telecommunications expenditure (2008 vs. 2009
shows an increase of 3.8%). Mr Beretti indicated that this cost is for
all external costs e.g. data, voicemail, 3G, internet, Time &
Attendance and CCTV. Mr Beretti said that in 2008 the figure was
R104 783 and in 2009 the amount was R108 799. Mr Beretti
mentioned that broadband had not been implemented as yet and
will be rolled out in 2010. Mr Beretti said that he thought that the
3,8% increase is realistic and reasonable.
Cllr Gabriel referred to Page 109, Note 42.2 where it is indicated
that a report will be submitted in respect of the Foreign Exchange
Loss and enquired when the report will be submitted. Ms Muller
stated that this was due to a double payment of an overseas
consultant assisting with valuations. The report is scheduled to go
to the February 2010 meeting. What transpired was that the money
was repaid to the City, however due to the exchange rate there was
a difference between the amount paid and the amount received.
This amount is still being pursued with the consultant and Ms Muller
indicated that she is confident that the money will be recovered. Cllr
van der Merwe enquired about the mechanisms in place to prevent
are-occurrence. Ms Muller indicated that there are very stringent
controls in the accounts payable process. These instances will
decrease as special payments are no longer allowed for processing.
Cllr van der Merwe enquired whether any procedures were followed
with the staff member involved. Ms Muller indicated that the
department is pursuing it extensively. The department needs to
maintain a good working relationship with this company as these
international advisors can pass on a wealth of information to the
City. The department has been pressurised to deal with the matter.
Cllr van Dalen was not satisfied with res ponse provided by Ms
Muller. The City Manager took cognisance of the concern raised by
Cllr van Dalen and advised that a report should be submitted to
SCOPA as very little information is currently available and to enable
the Committee to discuss their concerns and decide on follow-up
action to be taken. He also indicated that he takes cognisance of
the steps ta ken by the department in terms of the overpayment and
the relationship maintained with the client.
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Cllr Gabriel referred to page 106 of the report and enquired about
the nature of expenditure included in the line items contributions,
transfers and others.
Ms Muller indicated that this includes
advertising (R24m), Cleaning Costs (R27,8m), Lease Rentals
(R28,2m), Service Connections (R153,2m) and Uniforms (R30m).
Cllr Gabriel referred to Page 135 regarding investigations and
requested an indication of the monetary value of forensics cases
reported and investigated for 2008/09 and to indicate the actions
taken to prevent a re-occurrence of such cases. The City Manager
handed over to Mr Botto. Mr Botto stated that in relation to Page
135, there were two specific investigations that were mandated by
the City Manager. The first one is subject to litigation, and amounts
to R3.5 million, which is still in litigation and hence it would be
premature to unpack the facts. The second case amounts to R11
million, which was an investigation that the City Manager had
referred to Forensics and this matter is still ongoing. Mr Botto
stated that the remedial steps were put in place to prevent matters
from re-occurring. An example was provided that a company was
awarded a tender of R40 million over a 3 year period to supply tyres
to the City. There were complaints received that the Company was
fronting and the City Manager authorised a Forensic Investigation
and the contract was cancelled immediately. The matter was then
reported to the South African Police Service, there was a conviction
in terms of a plea agreement and the company was ordered to pay
a R1 million rand fine. Mr Botto stated that the City Manager had
reported this matter to National Treasury as required by legislation
and the City is also looking at blacklisting the owners of the
company.
Mr Botto mentioned that Forensics make
recommendations to prevent matters from re-occurring, that
disciplinary action is instituted where warranted and the control
environment is improved to prevent a reoccurrence.
Cllr Gabriel referred to Page 135 and enquired how the City
addresses recurring audit findings as the Auditor-General indicated
that prior year findings were not substantially addressed. Ms Muller
indicated that this matter was addressed at the Audit Committee on
25 February 2010. Quarterly reports are submitted to the audit
committee as well as monthly reports to the EMT Governance SubCommittee. There are some disputes between the City and Auditor
General when a conclusion is reached on certain matters. At the
Audit Committee meeting it was determined that there would be a
process going forward where these matters would be discussed
before the next audit to ensure that both parties are clear on which
findings the Auditor General considered to be resolved.
~.
1162
STANDING COMMITTEE ON PUBLIC
26 FEBRUARY 2010
ACCOUNTS (SCOPA) MINUTES
Cllr Gabriel referred to Page 135, par 19 where the Auditor General
refers to an Information System Framework and detailed standard
operating procedures in respect of performance information wh ich
needs to be implemented.
Ms January stated that the lOP
Department takes responsibility for the framework and that the
department has a methodology for 2008/2009 that has progressed
extensively since the report was printed. The department is almost
as far as building a SAP System in order to pull performance into
SAP.
Cllr Gabriel referred to Page 138 of the minutes and requested
further reasons for management's disagreement with the Auditor
General (AG) comments expressed in Paragraph 14,18 and 19. Ms
Muller referred to par 14 and stated that it relates specifically to the
Cape Town International Convention Centre (CTICC) fraud
prevention plan. Ms Muller indicated that the legislation is very clear
in that there does not have to be a fraud prevention plan but there
has to be risk management and internal control processes. These
processes are extensively applied at the CTICC. Management
disagrees because they feel it may be the view of the AG as it is not
specified in legislation.
Paragraph 18 deals with the audit
recommendations with the AG being of the view that queries are not
being dealt with. This will be dealt with in the process going forward
that was previously mentioned.
Paragraph 19 deals with
performance management and the interpretation of the performance
management framework. This City feels that it was interpreted
correctly. The City is in the process of documenting the detail and
responsibility per indicator. This will be concluded by May 2010 for
Council approval.
Cllr Gabriel referred to Page 150, indicator 28.2 that the actual
performance with DWAF effluent standards actual performance for
2008/2009 indicates a 83.5% compliance and that on Page 165 &
177 the actual value obtained from period 1 July - 31 December
2009 was 71%. Cllr Gabriel requested an indication of the exact
reasons for such deterioration and under performance and whether
the reliability of the figure quoted in the Annual Report is
questionable.
Mr Mashoko stated that compliance with waste water on DWAF
Standards is a challenge as the quality and quantity of what is
received into the City's waste water systems cannot always be
controlled. The challenge that the department faces is that there is
very little control with regard to quality and quantity of what is
received in the treatment works. However, this is being managed by
the department. As experienced in the past, companies would off
load effluent that comprised of chemicals which would incapacitate
the treatment works.
There is also the issue of ageing
20
1 t 63
26 FEBRUARY 2010
STANDING COMMITTEE ON PUBLIC
ACCOUNTS (SCOPA) MINUTES
infrastructure, which can lead to pump failure and in turn affects the
quality of the effluent. Mr Mashoko referred to the performance and
that there was a reduction of compliance around July to December.
This was as a result of companies that off loaded zinc into the waste
water system, inhibiting the capacity of the treatment plant and
affecting the quality of the effluent. Mr Mashoko mentioned that the
department is currently upgrading some of the treatment plants
resulting in the diversion of effluents. The departments are
Scottsdene, Bellville, Borchards Quarry and Kraaifontein. This is an
ongoing project, which needs to deal with the legacy system
designs that did not always accommodate biological treatments.
The Athlone and Bellville plants are scheduled for upgrading in
March 2010 and the department is hoping for an improvement of
effluent quality. Mr Mashoko said that the City complies with the
general standard of waste water (DWAF), however with reference to
the four critical elements, there has been a reduction or noncompliance.
In December 2008 and March 2009 the effluent
compliance were figures of 72% and 79% respectively but by the
end of the year there was an improvement to 83.5%. A marked
improvement is expected at the end of this year.
Cllr Hill referred to the company that dumped the zinc in the water
and in turn damaged the biological processes in one of the City's
treatment plants and enquired who paid for the resulting damages.
Dr Msengana indicated that the company is pursued once identified.
Cllr van Dalen questioned the percentages quoted by the
department in terms of the DWAF standards.
Dr Msengana
emphasised the point that the percentage oscillates that
performance at mid year is not as good as it is at year end. With all
the measures implemented, the department envisages to repeat
these performance standards. The different seasons affect the
performance throughout the year. The Director: Water Services
indicated that it is important to note the interventions undertaken by
the department. The Athlone and Bellville stations were not
designed to provide disinfection facilities hence impacting the
quality of effluent. This is further negatively affected by increased
loading.
Fluctuations are caused by increased dumping by
companies in November and December. Enforcement, inspection
and monitoring processes are being improved in order to track down
guilty companies.
Cllr van Dalen indicated that he accepts the reasons provided.
However, it does not detract from the seriousness of the matter. He
stated that the department needs to state their reasons so that it
can be acted upon by the necessary parties.
RESOLVED that the comments of the Committee on the 2008/2009
1164
26 FEBRUARY 2010
ST ANDING COMMITTEE ON PUBLIC
ACCOUNTS (SCOPA) MINUTES
Annual Report be included in the Oversight Report.
ACTION: S THOMAS
SCOPA 07/02/10
IRREGULAR EXPENDITURE IN THE 200712008 FINANCIAL
STATEMENTS - SPLITTING OF ORDERS (SCOPA 06/08/09)
Ms Abrams recommended that the report serving before SCOPA
should be referred to the SCOPA Sub-Committee as there are
technical issues contained in the report which needs to be clarified.
RESOLVED that the report before SCOPA BE REFERRED to the
SCOPA Sub-Committee for further consideration
ACTION: S THOMAS I L SHNAPS
SCOPA 08/02/10
ESTABLISHMENT
ALLOWANCES
OF
SCOPA
SUB-COMMITTEE:
HR
Ms Jaftha stated that the results of an Intemal Audit dealing with this
matter served before the Audit Committee. The Audit Committee
referred the report to MAYCO who referred the report to this
Committee for investigation. Ms Jaftha recommended that a subcommittee be established.
Cllr Mavungavunga, Cllr Van Dalen and Cllr Gouws were nominated
to serve on the Sub-Committee.
RECOMMENDED that a sUb-committee consisting of Cllr
Mvungavunga, Cllr Van Dalen and Cllr Gouws BE ESTABLISHED
to investigate this matter referred by MAYCO.
ACTION: S THOMAS
THE MEETING ENDED AT 12:35PM
22
COMMENTS RECEIVED FROM PORTFOLIO COMMITTEES AND THE PUBLIC IN RESPECT OF THE 2008/2009 ANNUAL REPORT
A: PORTFOLIO COMMITTEES
PORTFOLIO COMMITTEE
COMMENTS
1.
Finance
The Annual Report and Executive Summary were noted.
2.
Utility Services
The Annual Report and Executive Summary were noted.
3.
Planning and Environment
The Annual Report and Executive Summary were noted.
. -
4.
Corporate Services and HUman Resources
The Annual Report and Executive Summary were noted.
5.
Safety and Security
The Annual Report and Executive Summary were supported.
6.
Transport, Roads and Stormwater
The Annual Report and Executive Summary were noted.
7.
•
Economic Development
....
...-
The Annual Report and Executive Summary were noted.
8.
Housing
The consideration of the contents of the Annual Report was adjourned to the next ordin";-;:Ymeeting.
9.
Social Development
The contents of the Annual Report and Executive Summary were noted.
1 O.
Health
The Annual Report and Executive Summary were noted.
11 .
Community Services
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The Annual Report and Executive Summary were noted.
i,
Refer to the extract ofthe Portfolio Committee minutes on the last page of this Annexure
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B: PUBLIC COMMENTS
SUB-COUNCIL: 1-23
PAGEl
PARAGRAPH
REFERENCE
IN REPORT
COMMENT
ISSUE
Subcouncil 1
No comments received
Subcouncil 2
No comments received
Subcouncil 3
No comments received
Subcouncil 4
No comments received
S ubcouncil 5
No comments received
Subcouncil 6
No comments received
Subcouncil 7
No comments received
Subcouncil 8
No comments received
Subcouncil 9
Councilors raised the following Concerns:
• The lack of visibility of the Khayelitsha Community Trust in the area .
• What is the Trust doing in addressing the concerns raised by the Auditor General
highlighted in number 10 of the Auditor General's report.
RESOLVED
That the report BE NOTED
That Mr. Richard Kock offered to approach the Trust and request them to respond to
these questions. He offered to report back at the next SUb-council meeting.
CONTACT DETAIL OF
PERSON
.....
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Sharon B Makhuleni
Admin Officer
Nxele Makana Sub-council
09
Tel: 021-360 1298/1267
-------- . - - - - - _ . - - - - - - - - -
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SUB-COUNCIL: 1-23
PAGEl
PARAGRAPH
REFERENCE
IN REPORT
COMMENT
ISSUE
CONTACT DETAIL OF
PERSON
Councilor Joko MOVER and Councilor Solizwe SECONDER
F COTANI; R KOCK
FOR INFORMATION:
MR KOCK TO INVESTIGATE ABOUT THE AG'S COMMENTS :AND
ACTION:
REPORT BACK AT THE NEXT MEETING.
Subcouncil 10
See scanned document below
Shama Mlonyeni
Charlotte Maxeke,
Subcouncil(10) Site B
Tel: (021) 360-1350
......
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CITY OF CAPE TOWN
PUBLIC COMMENTS ON THE 2008/2009 ANNUAL REPORT
SUB-COUNCIL NO: _ _ _ _ _ _ _ _ _ _ __
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SUB-COUNCIL: 1-23
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PAGE/PARAGRAPH
REFERENCE
IN REPORT
COMMENT
ISSUE
Subcouncil 11
No comments received
Subcouncil 12
No comments received
Subcouncil 13
No comments received
Subcouncil14
No comments received
Subcouncil 15
No comments received
Subcouncil 16
No comments received
Subcouncil 17
No comments received
CONTACT
DETAIL OF
PERSON
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SUB-COUNCIL: 1-23
PAGE/P ARAGRAPH
REFERENCE
IN REPORT
COMMENT
ISSUE
Subcouncil 18
Mr Richard Kock was present to speak to the report.
Cllr J Burger addressed the service delivery component of the report by
expressing concern about the new water meters which was supposed to
be installed as a cost saving device but residents are experiencing the
following problems:
• That there were four different types of water meters which is self
managed by the user;
That
the meters are installed on the road verge and it is being
•
damaged by vehicles driving over it;
• That the Water Services Department needs to conduct an audit on the
amount of meters purchased;
• That Councillors are not being informed about the challenges
encountered by the community who currently have the new water
meters installed;
•
Subcouncil 18
-.
.That an official from Water Services Department be invited to attend a
workshop of the Subcouncil to explain these challenges and or
benefits to the broader community.
Cllr N Gabriel concurred with the sentiments expressed by Cllr J Burger
and also highlighted t he Auditor General's comments which she supported
as follows:
• That the prior year audit findings have not been substantially addressed
in the report;
•
CONTACT
DETAIL OF
PERSON
021 7004025Okkie Manuels
SC Manager
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SC Manager
That though it was necessary to document monies spent for the
different projects in the City, the report omitted to reflect how such
projects impacted on humanity e.g. has the City put more food on
peoples plates or given homes to more homeless people.
--
- -'-
----
-
SUB-COUNCIL: 1-23
P AGE/P ARAGRAPH
REFERENCE
IN REPORT
COMMENT
ISSUE
CONTACT
DETAIL OF
PERSON
She added that the most thought provoking comments made by the
Auditor General in paragraphs 29 and 30, folio 218 of the agenda, relating
to the four indicators that were reviewed under percentage of households
with access to basic services and the fact that the objective and indicators
selected for review was materially inconsistent to the figures obtained
from the strategic and planning directorate and from the actual figures
reflected on the SAP system posed concern. She further advised that the
ANC would be submitting a more comprehensive response to the Audit
Committee.
RECOMMENDATION
1. That Rondevlei Subcouncil notes the City's Annual Report and
Executive Summary for 2008/2009 (Annexures A & B attached to the
report dated 2010-02-08) subject to its comments being submitted for
consideration during the Annual Oversight Reporting Process;
That an Official from the Water Services Department be requested to
attend a meeting of Rondevlei S ubcouncil (to be arranged for the next
Subcouncils Activities Day), to discuss the benefits and challenges of the
new water meters being experienced by communities.
Subcouncil 19
No comments received
Subcouncil 20
No comments received
Subcouncil21
No comments received
Subcouncil 22
No comments received
Subcouncil 23
No comments received
-----
'-----
-
.-
--
--
......
-
~
~
EXTRACT OF THE MINUTES FROM THE PORTFOLIO COMMITTEE
1. Finance Portfolio Committee - 01 February 2010
FIN 07/02/10
TABLING OF CITY'S ANNUAL REPORT AND EXECUTIVE SUMMARY FOR 2008109
Cllrs J van der Merwe and P Chapple recused themselves during the
discussion of this matter.
RESOLVED that City's Annual Report and Executive Summary for
2008/2009 be noted.
FOR INFO: W CLAASSENS
2. Utility Services Portfolio Committee - 01 February 2010
-.
-:J
UTS 15/02/10
TABLING OF CITY'S ANNUAL REPORT AND EXECUTIVE
SUMMARY FOR 2008109
RESOLVED that the City's Annual Report and Executive
Summary for 2008/09 be NOTED.
FOR INFORMATION: W CLAASSENS
l'o:)
3. Planning and Environment Portfolio Committee - 2 February 2010
PLAN 12/02110
TABLING
OF CITY'S ANNUAL
EXECUTIVE SUMMARY FOR 2008109
REPORT
AND
RESOLVED that City's Annual Report and Executive
Summary for 2008/2009 (Annexure A & B) be noted.
ACTION: W CLAASSEN
.-.
~
~
4. Corporate Services and Human Resources Portfolio Committee - 2 February 2010
CORHR 19102110
TABLING OF CITY'S ANNUAL REPORT AND EXECUTIVE
SUMMARY FOR 2008109
RESOLVED that the City's Annual Report and Executive Summary
for 2008109 be noted.
ACTION:
W CLAASSENS; M VAN DER MERWE;
A EBRAHIM
5. Safety and Security Portfolio Committee - 4 February 2010
SAFS25/02/10
TABLING OF CITY'S ANNUAL REPORT AND EXECUTIVE
SUMMARY FOR 2008/09
RECOMMENDED that the City's Annual Report and Executive
Summary for 2008/2009 be supported.
ACTION: L VON MOLENDORFF I W CLAASSENS
6. Transport Roads and Stormwater Portfolio Committee - 4 February 2010
TR&S 17/02/10
TABLING OF CITY'S ANNUAL REPORT AND EXECUTIVE
SUMMARY FOR 2008/09
RESOLVED that the City's Annual Report and Executive Summary
for 2008/09 as set out on Annexure A & B to the report on the
agenda, be noted.
FOR INFORMATION: W CLAASSENS, M VAN DER MERWE, M
MARSDEN
7. Economic Development Portfolio Committee
EDT 17/02110
TABLING OF CITY'S ANNUAL REPORTY AND EXECUTIVE SUMMARY
FOR 2008/09
RESOLVED that the City's Annual Report and Executive Summary for 2008!
2009 as reflected on l.).o~ l.) & B of the report be noted.
ACTION: W CLAASSENS
...-
- ..J
......
8. Housing Portfolio Committee - 1 February 2010
-_ _
H()U
POR
TFOL1C) COMM1TTEE
.. ..•...SiNG
__.__ ._-------_
.. _--".,.HOU 23/021'10
TABLING OF CITY'S ANNUAL
SUMMARY FOR 200812009
"
j
REPORT
FEB 20-10
AND
EXECUTIVE
The Chairperson said that members would not have had enot.Jgh
time to look at the report and asked that it be L~..bJ&u;t at the next
meeUng
RESOLVED
Tl,at consideration of the contents of the report titled 'Tabling of
City's Annual Report and Executive Summary for 2008/2009:':'-' BE
,8Q..1QJ'}B~J~.Q ...tQ. the next ordinary meeting of the Comrnittee_
9. Social Development Portfolio Committee
SOCDEV 11/02/10 TABLING OF CITY'S ANNUAL REPORT AND EXECUTIVE
SUMMARY FOR 2008109
RESOLVED
That the contents of the City's Annual Report and Executive
Summary for 2008/09 (Annexure A & B) BE NOTED.
......
-
- ..l
~
10. Health Portfolio Committee - 1 February 2010
H EA 1 0/02/1 0
TABLING OF CITY'S ANNUAL REPORT AND EXECUTIVE
SUMMARY FOR 2008/09
RESOLVED that the City's Annual report and Executive summary
for 2008 1 2009 as reflected In Annexures A and B to the report on
the agenda, be noted.
FOR INFORMATION: W CLAASSENS