Source document: https://docs-lawep.s3.us-east-2.amazonaws.com/1698140415684.pdf (South Africa)
Wednesday, 27 March 2019] 1 No 39—2019] SIXTH SESSION, FIFTH PARLIAMENT PARLIAMENT OF THE REPUBLIC OF SOUTH AFRICA ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS WEDNESDAY, 27 MARCH 2019 TABLE OF CONTENTS ANNOUNCEMENTS National Assembly 1.

Proclamation establishing Investigative Directorate in Office of National Director of Public Prosecutions ............................................. 2 2.

Referral to Committees of papers tabled ..................................... 2 TABLINGS National Assembly 1.
Speaker ................................................................................................. 2 National Council of Provinces 1.

Chairperson ........................................................................................... 3 COMMITTEE REPORTS National Council of Provinces 1.

Cooperative Governance and Traditional Affairs ............................... 4 2.

Cooperative Governance and Traditional Affairs ............................... 6 3.
Cooperative Governance and Traditional Affairs ............................... 8 4.

Cooperative Governance and Traditional Affairs ............................. 18 5.

Cooperative Governance and Traditional Affairs .............................. 27 ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 2 [Wednesday, 27 March 2019 Petitions and Executive Undertakings ................................................ 34 6.

7.
7.

Appropriations .................................................................................... 92 8.

Appropriations .................................................................................... 96 9.

Appropriations .................................................................................. 137 10.

Finance.............................................................................................. 150 ANNOUNCEMENTS National Assembly The Speaker 1.
Proclamation establishing Investigative Directorate in Office of National Director of Public Prosecutions (a) Proclamation by the President of the Republic of South Africa establishing an Investigative Directorate in the Office of the National Director of Public Prosecutions, tabled in terms of section 7 (2) (c) of the National Prosecuting Authority Act, 1998 (Act No.

32 of 1998).

2.
32 of 1998).

2.

Referral to Committees of papers tabled (1) The following papers are referred to the Portfolio Committee on Public Enterprises for consideration and report.
The Report of the Auditor-General on the Financial Statements is referred the Standing Committee on Public Accounts to for consideration: (a) Report and Financial Statements of the South African Forestry Company SOC (Limited) (SAFCOL) for 2017- 18, including the Report of the Auditor-General on the Financial Statements for 2017-18 [RP 424 – 2018].

TABLINGS National Assembly 1.


The Speaker (a) Reply from the Minister of International Relations and Cooperation to the Budgetary Review and Recommendation Report of the Portfolio Committee on International Relations and Cooperation, as adopted by the House on 22 November 2018.

Referred Relations and Cooperation.


to the Portfolio Committee on International ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 Wednesday, 27 March 2019] 3 (b) Regulations made in terms of section 52 of the Public Audit Act, 2004 (Act No.

25 of 2004).

Referred to the Standing Committee on Auditor-General.

National Council of Provinces 1.


The Chairperson (a) Proclamation establishing an Investigative Directorate in the Office of the National Director of Public Prosecutions issued in terms of section 7 of the National Prosecuting Authority Act, 1998 (Act No.

32 of 1998), as required in section 7(2)(c) of the Act.

Referred to the Select Committee on Security and Justice for consideration.
(b) NOTICE OF INTERVENTION ISSUED IN TERMS OF SECTION 139(1)(b) OF THE CONSTITUTION, 1996 TO MTUBATUBA LOCAL MUNICIPALITY, KWAZULU- NATAL.

Referred to the Select Committee on Cooperative Governance and Traditional Affairs for consideration and report.

(c) NOTICE OF INTERVENTION ISSUED IN TERMS OF SECTION 139(1)(b) OF THE CONSTITUTION, 1996 TO RICHMOND LOCAL MUNICIPALITY, KWAZULU- NATAL.

Referred to the Select Committee on Cooperative Governance and Traditional Affairs for consideration and report.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 4 [Wednesday, 27 March 2019 COMMITTEE REPORTS National Council of Provinces 1.

Report of the Select Committee on Cooperative Governance and Traditional Affairs on Consideration of termination of the Notice of Intervention in terms of Section 139 (1) (b) of the Constitution in Dr Nkosazana Dlamini-Zuma Local Municipality, dated 27 March 2019 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 Dr Nkosazana Dlamini-Zuma Local Municipality to the Office of the Chairperson of the National Council of Provinces.

1.2.
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 07 September 2018, the Select Committee conducted in loco inspection to the above-mentioned local municipality in order to interact with all the critical stakeholders.
1.4 The Select Committee made recommended to the House to approve the intervention issued in terms of section 139 (1) (b) in the local municipality.

1.5.
1.5.

The Select Committee further recommended 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 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.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 Wednesday, 27 March 2019] 5 2.
Briefing on termination of intervention in terms of section 139 (1) (b) of the Constitution 2.1.

On the 5 March 2019, the MEC of KwaZulu- Natal Department of Cooperative Governance and Traditional Affairs briefed members of the Select Committee on the termination of intervention in terms of section 139 (1) (b) of the Constitution.
The presentation focused on progress made in respect of committee’s recommendations and matters related to service delivery, financial management, organisational development and transformation, and good governance 3.
Select Committee Observations 3.1 The Select Committee has noted the progress reported by the MEC of the Department of Cooperative Governance and Traditional Affairs on matters related to service delivery, financial management, organisational development and transformation, and good governance 4.

Select Committee Recommendation 4.1.


Having received presentation of the exit report on the notice of intervention in terms of section 139 (1) (b) of Constitution in the local municipality, the Select Committee recommends to the House as follows: 4.1.1.

The notes the termination of intervention in terms of section 139 (1) (b) of the Constitution in Dr Nkosazana Dlamini –Zuma Local Municipality Report to be considered ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 6 [Wednesday, 27 March 2019 2.
Report of the Select Committee on Cooperative Governance and Traditional Affairs on Consideration of termination of the Notice of Intervention in terms of Section 139(1)(b) of the Constitution in Emadlangeni Local Municipality, dated 27 March 2019 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 Emadlangeni Local Municipality to the Office of the Chairperson of the National Council of Provinces.

1.2.
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 09 June 2017, the Select Committee conducted in loco inspection to the above-mentioned local municipality in order to interact with all the critical stakeholders.
1.4 The Select Committee made recommended to the house to approve the intervention issued in terms of section 139 (1) (b) in the local municipality.

1.5.
1.5.

The select committee further recommended 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 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.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 Wednesday, 27 March 2019] 7 2.
Briefing on termination of intervention in terms of section 139(1)(b) of the Constitution 2.1.

On the 5 March 2019, the MEC of KwaZulu- Natal Department of Cooperative Governance and Traditional Affairs briefed members of the Select Committee on the termination of intervention in terms of section 139(1)(b) of the constitution.
The presentation focused on progress made in respect of committee’s recommendations and matters related to service delivery, financial management, organisational development and transformation, and good governance 3.

Select Committee Observations 3.1.


The Select Committee has noted the progress reported by the MEC of the Department of Cooperative Governance and Traditional Affairs on matters related to service delivery, financial management, organisational development and transformation, and good governance 4.

Select Committee Recommendations 4.1.


Having received presentation of the exit report on the notice of intervention in terms of section 139(1)(b) of the Constitution in the local municipality, the Select Committee recommends to the House as follows: 4.1.1.

The notes the termination of intervention in terms of section 139(1)(b) of the Constitution in Emadlangeni Local Municipality Report to be considered ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 8 [Wednesday, 27 March 2019 3.
Report of the Select Committee on Cooperative Governance and Traditional Affairs in Loco Inspection on the Notice of Intervention in terms of Section in Abaqulusi Local 139(1)(b) of the Constitution Municipality, dated 27 March 2019 1.
Background and Overview 1.1 The Select Committee on Co-operative Governance and Traditional Affairs, having considered the request by the National Council of Provinces (NCOP), to consider and report on the intervention notice invoked in Abaqulusi Local Municipality in terms of section 139(1)(b) of the Constitution, the Select Committee reports as follows: 1.2 In terms of NCOP Rule 101, the Office of the Chairperson of the NCOP referred the notice of intervention by the KwaZulu-Natal MEC for Cooperative Governance, and Traditional Affairs (CoGTA), to the Select Committee for consideration and reporting.
On 14 March 2019, the Select Committee conducted in loco inspection in Abaqulusi Local Municipality.

2.

Objective of the in Loco Inspection in Abaqulusi Local Municipality 2.1 The main objective was to interact with the internal and external stakeholders of the Municipality in order to solicit their opinions on the constitutional, procedural and substantive matters related to the invocation of section 139(1)(b) of the Constitution.

3.
3.

Composition of the Delegation 3.1 The Select Committee delegation was composed of the following Members of Parliament and officials: Hon D Ximbi, Western Cape (ANC); Hon M Chetty, KwaZulu-Natal (ANC) Hon B Engelbrecht, Gauteng (ANC), Mr TM Manele, ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 Wednesday, 27 March 2019] 9 Committee Secretary (Committee Section), Ms T Mathews, Researcher (Research Mr P Bongco, Committee Assistant (Committee Section) and Mr M Mbebe, Procedural Officer (NCOP) 4.
General Overview of the in Loco Inspection at Abaqulusi Local Municipality 4.1.

On 15 March 2019, the delegation of the Select Committee interacted with senior officials of the Department of CoGTA, representatives of the African National Congress (ANC), Democratic Alliance (DA), Economic Freedom Fighters, representative of the South African Local Government Association and forums representing Youth and Women in construction 4.2.
The departmental official made a presentation on the constitutional, procedural and substantive reasons for the intervention.

The representatives of the political parties and Organised Labour, shared their opinions with regard to the intervention as tabled by the MEC for CoGTA.

5.

Presentation by Department of CoGTA 5.1.


The Head of the Department of Cooperative Governance, Human Settlement and Traditional Affairs briefed the delegation of the Select Committee on constitutional, procedural and substantive matters related to the intervention.

The presentation on the substantive matters related to the invocation of the intervention focused on service delivery, governance and financial management 5.2.
The departmental official indicated that the 2016 election resulted in Abaqulusi LM being a hung Council with 44 seats.

The Council comprise of 19 IFP, 1 EFF, 3 DA and 21 ANC councillors.

Currently ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 10 [Wednesday, 27 March 2019 there are two vacancies in the Council as a result of the resignations of 1 IFP and 1 ANC ward councillors.

By-elections will be held on 27 March 2019 and the 10th of April 2019.

5.3.
5.3.

On 20 March 2013, the municipality was placed under constitutional intervention by the Executive Council as a result of a number of failures in undertaking executive functions.

The Executive Council assumed the functions specified in terms of sections 51, 54A and 56 of the Systems Act.

6. building institutional capacity and development 6.1.

The positions of Director Technical Services and Director Community Services remain vacant.
The municipality has not investigated the circumstances surrounding the resignation of Mr A Khumalo who resigned because of allegations that he did not possess matriculation, nor has it laid a criminal complaint with the SAPS as required despite requests from COGTA.

6.2.

The MEC disputed the appointed of the Municipal Manager at the municipality on the basis of nondisclosure of critical information relating investigations that were ongoing at his previous employment, namely Nongoma Municipality.
The MEC referred the matter to the Minister for consideration.

7.

Governance 7.1.

As at January 2019, the last four (6 December 2018, 13 December 2018, 15 January 2019, 22 January 2019) attempts at convening a Council at Abaqulusi LM had failed.

The meeting of the 31st of January 2019 did not successfully dispose of all the matters that were on the agenda, even though compliance matters were considered.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 Wednesday, 27 March 2019] 11 7.2.
The municipality has 22 wards and 6 CDWs.

Most OSS war rooms are not properly functioning since there are no intervention plans in place provided by sector departments, in spite of concerted efforts to provide support these structures.

All Ward committees have provided evidence of holding their meetings, except wards 11 and 17, which have been rated as dysfunctional.

7.3.
7.3.

The provincial rapid response team is entrusted with the responsibility of handling service delivery protests, liaising with local stakeholders, including the Abaqulusi RRT.

There has been poor functionality of the local team, as the Speaker is hardly available to provide the required leadership in this regard.

This usually increases the number of protests as communities feel they are deliberately ignored.

7.4.
7.4.

The issue of high number and costly litigations that Council is dealing with remains a challenge.

As at November 2018, Abaqulusi was dealing with about eight (8) very costly litigations.

The financial impact of these litigations has already negatively compromised the financial position of the municipality.

7.5.
7.5.

The close protection service is outsourced to Qomukufa Security which includes inter alia escorts, evacuations, armed response, ad hoc patrols and guards depending on the nature of the threat or attack.

As at November 2018, there were no threat and risks assessment reports in place.

7.6.

The municipality claims that the SAPS had not finalised the assessments.
This means that the municipality is not compliant with the Minister’s directives in this regard as it provides security without assessments having been conducted.

7.7.

There are allegations that the provision of security services is partisan as it excludes opposition councillors who have filed requests with the municipality following alleged incidents of threats and intimidation.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 12 8.

Finance management [Wednesday, 27 March 2019 8.1.


The Budget and Treasury Office (BTO) at Abaqulusi LM is seriously challenged.

The municipality re-employed the current CFO despite indications that the CFO had presided over the depletion of the reserves and did not correctly advise the municipal council on several key factors.

8.2.

In terms of the Audit Report for 2017/2018, the municipality received a qualified audit opinion for the 2017/2018 financial year.
The basis for the qualification included Property, plant and equipment were not properly accounted for and there was insufficient evidence to determine the correctness of the asset register (recurring finding).

Investment properties were not properly accounted for and there was insufficient evidence to determine the correctness thereof.

8.3.
The municipality experienced non-compliance issues continued on Sec 129(3) of the MFMA – Oversight report was not made public, SCM Regulation 17(a) and (c) – Goods and services below R200 000 were procured without the required price quotations, SCM regulation 43 – Contracts accepted from bidders whose tax affairs were not declared to be in order by SARS, SCM regulation 22(1) and 22(2) – Invitations for bidding were not advertised for the required minimum number of days, Preferential procurement regulation 8(2) – The minimum threshold for local production and content was not stipulated (recurring), Preferential procurement regulation – Suppliers did not submit a declaration on local production and content.
8.4.

Grants were not cash backed for all periods under review as indicated in the table above.

The cash coverage has deteriorated significantly which indicates that the municipality will not be able to cover its short term expenditure requirements.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 Wednesday, 27 March 2019] 13 8.5.
The current ratio has remained below the norm over the period under review and is an indication that the municipality is unable to meet its short term obligations as they fall due.

The information provided from various sources used to determine the ratios is inconsistent and will require a deeper analysis.

A full reconciliation of the grant register is necessary to ensure the credibility of information and resultant ratios computed.

9.

Service Delivery 9.1.


The municipality has a total of 51 472 households and 81.3% of these households have access to piped water and 95% have access to VIP sanitation.

In terms of electricity 83% of the households have access to electricity.

9.2.

One of the major challenges that face the municipality is water and electricity losses which cost the municipality millions every year.
Both management and the political leadership are unable to resolve these losses partly because of their inability to confront defaulting consumers particularly residents.

9.3.

Abaqulusi Local Municipality is neither an official water service authority (WSA) nor provider (WSP) for the local area but continues to manage the operation of the water infrastructure in the local municipality 9.4.

This is a role for which the municipality does not have the financial and technical resources.
Several attempts were made by Cogta officials to facilitate an amicable resolution to the matter without success 9.

Progress Report on the Status of the Intervention in the Local Municipality 9.1.

The Administrator has presented the intervention report to the municipal council and was adopted on 18 November 2018.
The municipality has managed to appoint three section 56 managers such ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 14 [Wednesday, 27 March 2019 as Chief Financial Officer, Director Planning and Local Economic Development and Director of Planning and Community Services 9.2.

The major service delivery progress reported related to unblocking and completion of outstanding projects and payment of creditors.

9.3.
9.3.

The governance progress reported included the improvement of governance within the municipal council, stabilization and improvement of governance and administration, provision of intervention plans and reports and scheduling of portfolio committees to consider and adopt reports.

9.4.
9.4.

Despite the progress reported, the major challenges facing the municipality relate to resignation of the municipal manager, negative audit opinion and lack of capacity to deal with, lack of audit committee and internal audit capacity, connivance and sabotage by some officials, security threats hampering the smooth operations of the municipality and involvement of senior managers in business and neglecting their responsibilities 10.
Opinions of Political Parties and Stakeholders of the Municipality 10.1 During in loco-inspection, the Select Committee interacted and solicited opinions of the political parties, internal and external stakeholders of the Municipality.

Their opinions are tabled below: 11.

Opinion of the African National Congress (ANC) 11.1 The representative of the ANC indicated that the municipal council has acknowledged and welcomed the intervention.
However, the member of the ANC raised concerns with regard to tabling of section 71 reports, capacity within the supply chain management and absence of the chief financial officer.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 Wednesday, 27 March 2019] 15 11.2.

In conclusion the ANC member welcomed the progress made by the local municipal as the result of the intervention and appointment of the administrator.

12.
12.

Opinion of the Democratic Alliance (DA) 12.1 The representative of the DA tabled an opinion that did not support the intervention.

However, concerns were raised with regard to the lack of consultation, fruitless expenditure; non- compliance with tender procedures; lack of service delivery; non-payment of salaries; delays on payment of pension funds; non-implementation of council decisions; lack of consequence management and Eskom debts.

13.
13.

Opinion of the Economic Freedom Fighters 13.1 The representative of the Economic Freedom Fighters tabled an opinion that did not support the intervention, and further raised concerns with matters related to lack of service delivery; payment of rates and taxes; technical problems on water, sanitation, street lights and non-maintenance of road and road signs 14.

Opinion of Inkatha Freedom Party 14.1.


The representative of the South African Local Government Association tabled opinion that did not support the invocation of section 139 (1) (b) of the constitution.

The representative emphasized with the framework of intergovernmental relation the need to ensure that at both political and technical level, there is a platform for common understanding and approach to the issuing of interventions in the municipalities.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 16 [Wednesday, 27 March 2019 15.

Opinion of Organised Labour (IMATU) 15.1.

The representative of South African Municipal Workers Union tabled opinion that did not support the issuing of intervention in terms of section 139 (1) (b) of the Constitution.

The representative, however, raised concerns with regard to administrative instability, high level of management intimidation, lack of security and protection of municipal worker.

16.
16.

Opinion External Stakeholders 16.

1 The representative of youth forum tabled the opinion that did not support the invocation of section 139 (1) (b) of the constitution.

However, the youth representative raised concerns that related to the failure of learner ship programmes, appointment at management level of people who are not from the local municipality, poor infrastructure programme, 17.
Select Committee Observations and Opinion 17.1 In terms of the constitutional and procedural matters, the Select Committee has observed that the National Minister for CoGTA, the NCOP, the KwaZulu-Natal Provincial Legislature and the Municipality were notified of the intervention about the substantive matters related to the invocation of section 139 of the Constitution.
17.2 The Select Committee has also noted general concerns raised by stakeholders on matters related to lack of security and involvement of senior management of the municipality in business.

1.7.3.

The Select committee has noted also the concerns with regard to the identification of stakeholders more especially the exclusion of South African Municipal Workers Unions and the forum representing women ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 Wednesday, 27 March 2019] 17 18.
Recommendations of the Select Committee 18.1 Having conducted the oversight visit to Abaqulusi Local Municipality and interacted with representative of the political parties, the Union, Youth formation.

the Select Committee on Co-operative Governance and Traditional Affairs recommends as follows: 18.1.1 The NCOP to approves the intervention in Abaqulusi Local Municipality in terms of section 139 (1) (b) of the Constitution.
18.1.2 The Administrator should fast-track the process of implementing the municipal turn-around plan, in accordance with the terms of reference assigned by the KwaZulu-Natal MEC for CoGTA.

18.1.3 The Administrator should provide progress reports on allegation of senior managers doing business with the municipality and ensure the implementation of proper management consequences.
18.1.4 The KwaZulu-Natal for CoGTA should table quarterly progress report to the NCOP on the status of the intervention in the Municipality; including challenges encountered.
18.1.5 The Select Committee on Co-operative Governance and Traditional Affairs, in co-operation with the relevant Portfolio Committee in KwaZulu Natal Provincial Legislature, should after 2019 National Election and during the 6TH Parliamentary period conduct a follow-up oversight visit to the Municipality in order to evaluate the progress made in respect of the intervention in the Municipality.

Report to be considered.


ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 18 [Wednesday, 27 March 2019 4.

Report of the Select Committee on Cooperative Governance and Traditional Affairs in Loco Inspection on the Notice of Intervention in terms of Section in Endumeni Local 139(1)(b) of the Constitution Municipality, dated 27 March 2019 1.
Background and Overview 1.1 The Select Committee on Co-operative Governance and Traditional Affairs, having considered the request by the National Council of Provinces (NCOP), to consider and report on the intervention notice invoked in Endumeni Local Municipality in terms of section 139(1)(b) of the Constitution, the Select Committee reports as follows: 1.2 In terms of NCOP Rule 101, the Office of the Chairperson of the NCOP referred the notice of intervention by the KwaZulu-Natal MEC for Cooperative Governance, and Traditional Affairs (CoGTA), to the Select Committee for consideration and reporting.
On 14 March 2019, the Select Committee conducted in loco inspection in Endumeni Local Municipality.

2.

Objective of the in Loco Inspection in Endumeni Local Municipality 2.1 The main objective was to interact with the internal and external stakeholders of the Municipality in order to solicit their opinions on the constitutional, procedural and substantive matters related to the invocation of section 139(1)(b) of the Constitution.

3.
Composition of the Delegation 3.1 The Select Committee delegation was composed of the following Members of Parliament and officials: (ANC); Hon J Mthethwa, KwaZulu-Natal (ANC), Hon T Wana, Eastern Cape (ANC); (ANC); Hon D Ximbi, Western Cape (ANC); Hon M ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 Wednesday, 27 March 2019] 19 Chetty, KwaZulu-Natal (ANC) Hon B Engelbrecht, Gauteng (ANC), Mr TM Manele, Committee Secretary (Committee Section), Mr B Mahlangeni, Researcher (Research Unit, Ms T Mathews, Researcher (Research Unit), Mr P Bongco, Committee Assistant (Committee Section) and Mr M Mbebe, Procedural Officer (NCOP) 4.
General Overview of the in Loco Inspection at Endumeni Local Municipality 4.1 On 14 March 2019, the delegation of the Select Committee interacted with senior officials of the Department of CoGTA, representatives of the Political Parties within the municipality and the representatives of the organised labour and the youth forum.

4.2.

The Departmental Official made a presentation on the constitutional, procedural and substantive reasons for the intervention.
The representatives of the political parties and Organised Labour, shared their opinions with regard to the intervention as tabled by the MEC for CoGTA.

5.

Presentation on substantive matters related to intervention by Department of CoGTA 5.1.

The Head of the Department of Cooperative Governance and Traditional Affairs briefed the delegation of the Select Committee on constitutional, procedural and substantive matters related to the intervention.
The presentation on the substantive matters related to the invocation of the intervention focused on service delivery, governance and financial management 5.2.

Endumeni is a hung municipality with 13 Councillors broken down as follows: 6 from ANC, 4 from IFP, 2 from DA and 1 from the EFF.
The municipality has seen a fair share of instability over the past 12 ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 20 [Wednesday, 27 March 2019 months including instability in the management of the municipality.

On 05 December 2008, the Provincial Executive Council resolved to intervene at Endumeni Local municipality, due to the municipality’s failure in a number of areas including financial weaknesses, governance and service delivery failures.

6.

Governance 6.1.
6.

Governance 6.1.

Council and its Committees, with particular reference to the Executive Committee, Portfolio Committees and MPAC had not functioned optimally over the past few months due to political instability at the municipality.

6.2.

The committees of council were unable to provide oversight over the administration particularly with reference to financial management and the service delivery programme of the municipality.

6.3.
6.3.

Following the tabling of the forensic report on the 4th of October 2018, Council had not been able to consider and process the report and, in particular, the recommendations.

6.4.

On the 19th of November 2018 the municipal council resolved to request the MEC to extend the 21day period within which to develop an implementation plan and notify the MEC of such.

Both the new Mayor and Speaker had committed themselves to ensuring that the recommendations of the report are implemented, speedily so.

6.5.
6.5.

However, it became abundantly clear that due to the instability in the municipal council and municipal administration, there was no or very little appetite to implement the findings and recommendations of the report 6.6.

The forensic investigation identified various instances of irregular, fruitless and wasteful expenditure, procurement irregularities, conflicts of interest, fraud, theft, maladministration and non- compliance with relevant legislation, regulations, circulars and policies.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 Wednesday, 27 March 2019] 21 6.7.

It was normal for Endumeni Local Municipality to avoid implementing the findings of a forensic investigation, as on one occasion, the MEC had to approach the courts to compel the municipal council to comply with legislative requirements in respect of implementing consequence management, arising from the findings of the then section 106 investigation.

6.8.
6.8.

Following the tabling of the forensic report, the Mayor resigned while the Speaker Councillor Mbatha-Makhathini was expelled by her party.

It then became abundantly clear that the municipality was on a verge of collapse, as despite support, the municipality remained unstable and challenged due to poor/absence of leadership and management 7.

Finance Management 7.1.


The municipality also failed to pass its 2018/2019 budget within the prescribed timeframe, as the former Mayor had been arrested for plotting to murder the former Speaker which resulted in further instability at the municipality.

The budget was subsequently passed when the Mayor was released from his incarceration.

7.2.

The municipality received an unqualified audit report with other matters during the previous audit cycle (2016/17).
During the last quarter, the municipality had still not addressed all the issues raised by the Auditor-General which contributed to an unfavourable 2017/2018 audit.

7.3.

This also made it abundantly clear that Council had failed to exercise oversight over its administration to the detriment of the community of Endumeni.

8.

Service Delivery 8.1.

The Endumeni Civic Association (ECA) lodged an application in the High Court against Endumeni Municipality, concerning the enforcement of access to housing.
The ECA operates within Endumeni municipal area.

The association had been approached by ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 22 [Wednesday, 27 March 2019 communities in wards 4 & 5 of Endumeni.

The communities had accused councillors and officials alike of impropriety, fraud and corruption in the allocation of RDP houses.

8.2.
8.2.

It was alleged by the association, that people who deserved to be allocated houses, were overlooked and people who had been allocated houses were later changed or substituted arbitrarily.

There were further allegations of fraud and corruption directed at municipal officials, relating to unjust allocations of RDP houses, including unlawful renting out of the said houses.

8.3.
8.3.

The association made several attempts to engage with the municipal councillors and officials in an effort to get answers regarding the allocation of houses, all in vain.

They then approached the Legal Resources Centre, which ultimately represented the association in lodging the application in the High Court, which culminated in the judgment against the municipality.

8.4.
8.4.

The verdict gave permission to the Department of Human Settlements to take over the function, which had been delegated to the municipality.

Both the municipality and the Department are opposed to the takeover of the projects and are back in court contesting the matter.

8.5.

The municipality was also taken to court by disgruntled contractors over housing projects which were awarded without due process having been followed.
The municipality was ordered by the court to hand over that project to the Department of Human Settlements.

The municipality failed to adequately implement the court order.

9.

Progress Report on the Status of the Intervention in the Local Municipality 9.1.
Konke Solution has been deployed by the Department of Cooperative Governance and Traditional Affairs to assist the municipality in increasing and accurately reporting on generated and billed revenue ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 Wednesday, 27 March 2019] 23 9.2.
Debt concession item has been tabled to the council for all debtors prepared to settle their rates, electricity and housing rental accounts 9.3. Letters of demand have been issued to municipal employees and councillors owing the municipality 9.4.

The municipality has formed rules committee composed of the legal service manager and corporate service director to draft terms of reference to be presented to the council of consideration and adoption.
9.5. the municipality has ensured that all requisitions and orders are approved at the interim finance committee meetings which are chaired by the Administrator.

9.6.

In order to ensure the functionality of the council and portfolio committees, a schedule of meetings has been drafted and circulated to all the councillors 10.
Opinions of Political Parties and Stakeholders of the Municipality 10.1 During in loco-inspection, the Select Committee interacted and solicited opinions of the political parties, internal and external stakeholders of the Municipality.

Their opinions are tabled below: 11.


Opinion of the African National Congress (ANC) 11.1 The representative of the ANC tabled opinion that supported the invocation of section 139 (1) (b) of the constitution in the municipality However, the member of the ANC raised concerns with regard to political instability.

The representative further acknowledged the progress made by the administrator on matter related to administrative stability and functionality of the council and the municipal portfolio committees.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 24 [Wednesday, 27 March 2019 12.

Opinion of the Democratic Alliance (DA) 12.1 The representative of the DA tabled an opinion that rejected to invocation of section 139 (1) (b) of the constitution in the local municipality.
However, concerns were raised with regard to implementation of the recommendations of the forensic investigation conducted in terms of section 106 of the municipal system act, loose of investors, 40% operational cost of municipality, allocation of VIP services without conducting security threat analysis, 13.

Opinion of the Economic Freedom Fighters (EFF) 13.1 The representative of the Economic Freedom Fighters tabled an opinion that supported the intervention.
The representative raised concerns with regard to the implementation of forensic investigation reports conducted in terms of section 106 of the Local Government: Municipal System Act.

14.

Opinion of Inkatha Freedom Party (IFP) 14.1.

The representative of the Inkatha freedom Party tabled opinion that welcomed and supported the issuing of intervention in terms of section 139 (1) (b) of the Constitution.

14.2.
14.2.

The representative further raised concerns with regard to suspension of municipal workers, service delivery, delays on the appointment of senior managers and lack of financial support to the municipality 16.

Opinion Business Forum 16.1 The representative of business Forum abled the opinion that support the invocation of section 139 (1) (b) of the constitution in the municipality.
However, the representative raised concerns ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 Wednesday, 27 March 2019] 25 with regard to lack of consultation.

The representative emphasised the importance of strengthening the relations through the application of private-public partnership (PPP).

17.
17.

Select Committee Observations and Opinion 17.1 In terms of the constitutional and procedural matters, the Select Committee has observed that the National Minister for CoGTA, the NCOP, the KwaZulu Natal Provincial Legislature and the Municipality were notified of the intervention and its substantive reasons 17.2.
On the basis of the serious challenges prevalent at the municipality, the Provincial Executive Council resolved to intervene in terms of section 139(1)(b) of the Constitution, 1996 at Endumeni Municipality, by assuming the functions specified in sections 51 of Local Government Municipal Systems Act in order to organise the administration in a manner that would enable the municipality to achieve the objects of local government, as set out in section 152 of the Constitution.
17.3 The Provincial Executive Council authorize the MEC for Cooperative Governance and Traditional Affairs to appoint suitably qualified person(s) to develop turn around in line with terms of reference: 17.4.
The Select Committee has noted that the terms of reference of the administrator included preparation and implementation of a recovery plan to be approved by the municipal council; Implementation of governance systems and procedures including oversight over the administration, ratification of decisions taken by the Municipal Council, the Executive Committee, Committees, Municipal Manager and Section 56 Managers, in terms of delegated or original authority; Ensuring the implementation of findings arising from any investigations into fraud or maladministration or corruption; and Ensuring implementation of remedial action plans dealing with negative findings from the Auditor General.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 26 [Wednesday, 27 March 2019 18.

Recommendations of the Select Committee 18.1 Having conducted the oversight visit to Endumeni Local Municipality and interacted with representative of the Political Parties, the Union, Youth Formation.
the Select Committee on Co-operative Governance and Traditional Affairs recommends as follows: 18.1.1 The NCOP approves the intervention in Endumeni Local Municipality in terms of section 139 (1) (b) of the Constitution 18.1.2 The Administrator should fast-track the process of implementing the municipal turn-around plan, in accordance with the terms of reference assigned by the KwaZulu-Natal MEC for CoGTA.
18.1.3 The Administrator should ensure the implementation of the forensic investigation report conducted in terms of section 106 of the Local Government Municipal System Act 18.1.4 The KwaZulu-Natal EC for CoGTA should table quarterly progress report to the NCOP on the status of the intervention in the Municipality; including challenges encountered.
18.1.5 The Select Committee on Co-operative Governance and Traditional Affairs, in co-operation with the relevant Portfolio Committee in KwaZulu Natal Provincial Legislature, should after 2019 National Election and during the 6 Parliamentary period conduct a follow-up oversight visit to the Municipality in order to evaluate the progress made in respect of the intervention in the Municipality.

Report to be considered.


ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 Wednesday, 27 March 2019] 27 The following report replaces the report of the Select Committee on Cooperative Governance and Traditional Affairs which was published page 90 in ATC No 37 - 2019 dated 25 March 2019.

5.
5.

Report of the Select Committee on Cooperative Governance and Traditional Affairs in Loco Inspection on the Notice of Intervention in terms of Section 137 of the Municipal Finance Management Act (2003) in Naledi Local Municipality, dated 19 March 2019 1.
Background and Overview 1.1 The Select Committee on Co-operative Governance and Traditional Affairs, having considered the request by the National Council of Provinces (NCOP), to consider and report on the intervention notice invoked in Naledi Local Municipality in terms of section 137 of Municipal Finance Management Act, the Select Committee reports as follows: 1.2 In terms of NCOP Rule 101, the Office of the Chairperson of the NCOP referred the notice of intervention by the North West MEC for Cooperative Governance, Human Settlement and Traditional Affairs (CoGTA), to the Select Committee for consideration and reporting.
On 30 January 2019, the Multi- Party Delegation of the Select Committee conducted a loco inspection in Naledi Local Municipality.

2.

Objective of the in Loco Inspection in Naledi Local Municipality 2.1 The main objective was to interact with the internal and external stakeholders of the Municipality in order to solicit their opinions on the constitutional, procedural and substantive matters related to the invocation of section 139(1)(b) of the Constitution.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 28 [Wednesday, 27 March 2019 3.
Composition of the Delegation 3.1 The Select Committee delegation was composed of the following Members of Parliament and officials: (ANC); Hon T Wana, Eastern Cape (ANC); (ANC); Hon G Oliphant, Northern Cape (ANC); Hon D Ximbi, Western Cape (ANC); Hon E Matame Limpopo (ANC); Hon B Engelbrecht, Gauteng (DA), Mr TM Manele, Committee Secretary (Committee Section), Mr B Mahlangeni, Researcher (Research Unit) and Mr N Mfuku, Content Advisor (Committee Section) and Mr P Bongco, Committee Assistant (Committee Section) and Mr M Mbebe, Procedural Officer (NCOP) 4.
General Overview of the in Loco Inspection at Naledi Local Municipality 4.1 On 30 January 2019, the delegation of the Select Committee interacted with senior officials of the Department of CoGTA, representatives of the African National Congress (ANC), Democratic Alliance (DA), Agri-Forum.

4.2.

The departmental official made a presentation on the constitutional, procedural and substantive reasons for the intervention.
The representatives of the political parties and Organised Labour, shared their opinions with regard to the intervention as tabled by the MEC for CoGTA.

5.

Presentation on Financial matters related to intervention in the Local Municipality 5.1.
The Head of the Department of Cooperative Governance, Human Settlement and Traditional Affairs briefed the delegation of the select committee on the substantive matters related to the invocation of section 137 of the Municipal Finance Management Act in Naledi local municipality.

The presentation focused on substantive matter related to financial management and associated municipal challenges.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 Wednesday, 27 March 2019] 29 6.
Financial management and reasons for intervention 6.1.

The municipality being in a serious cash flow crisis hence its inability to meet its financial obligation.

The problem has been exacerbated by the failure to pay creditors within 30 days; 6.2.

The local municipality closed the books in June 2017 with a bank balance of R8.9 million which was far less to cover the outstanding creditors of R437 million.
Due to increase of liabilities as the result of non-payment of suppliers, the local municipality have failed to develop cash flow model and a methodology on to prioritize creditor’s payments.

6.3.

The local municipality has implemented unfunded budgets for the past three years which was as a result of over commitment on the operations.
The department of Cogta indicated that an absence of a credible long or medium term financial strategy, it may be difficult to compile effective operational budgets or spend in line with available financial resources 6.4.

The Department of Cooperative Governance, Human Settlement and Traditional Affairs further indicated that the analysis of financial performance reports have shown that the local municipality operating expenditure had far exceeded the projected income as at 2016/2017 financial year.

7.
7.

Progress Made Since the Commencement of the Intervention 7.1 The Administrator reported that the municipality has completed the initial assessment of the financial management system on its functionality and control system.

The municipality has also made significant progress in reviewing debt and control policies; meter reading processes and procedures.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 30 [Wednesday, 27 March 2019 7.2.
The municipality has invoked the clauses in the contract that deals with non-performance and dispute resolution, appointed management of extended public works programme, reviewed debt and credit control policies, reviewed indigent register and verified that all qualifying indigents arrear accounts are written off.

7.3.
7.3.

The Administrator further reported that the municipality has also introduced new mechanisms for bills running, conducted meter audits and reading, terminated non-performing contracts, implemented section 32 of Municipal Finance Management Act, introduced invoice registry, tabled cost cutting measures to the council and ensured compliance to section 18 and 19 of the municipal finance management act for adjustment and budgeting.

7.4.
7.4.

In accordance with the terms of reference, the administrator further indicated that the municipality has already reviewed the organisational structure in order to align with municipal strategy, integrated development planning, service delivery mechanisms, legislative requirements and the core mandate of the municipal finance recovery plan 8.
Opinions of Political Parties and Stakeholders of the Municipality 8.1 During loco-inspection, the Select Committee interacted and solicited opinions of the political parties, internal and external stakeholders of the Municipality.

Their opinions are tabled below: 9.

Opinion of the African National Congress (ANC) 9.1 The representative of the ANC indicated that the municipal council has acknowledged the PEC’s decision to invoke section 137 of the Municipal Finance Management Act in the Municipality.
however, the member of the ANC raised concerns ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 Wednesday, 27 March 2019] 31 with regard to tabling of section 71 reports, capacity within the supply chain management and absence of the chief financial officer.

In conclusion the ANC member welcomed the progress made by the local municipal as the result of the intervention and appointment of the administrator.

10.
10.

Opinion of the Democratic Alliance (DA) 10.1 The representative of the DA tabled an opinion that supported the intervention.

However, concerns were raised with regard to the lack of consultation, fruitless expenditure; non- compliance with tender procedures; lack of service delivery; non-payment of salaries; delays on payment of pension funds; non- implementation of council decisions; lack of consequence management and Eskom debts.

11.
11.

Opinion of Agri- Forum 11.1 The representative of the Agri-Forum tabled an opinion that supported the intervention, and further raised concerns with matters related to lack of service delivery; payment of rates and taxes; technical problems on water, sanitation, street lights and non-maintenance of road and road signs 12.
Select Committee Observations and Opinion 12.1 In terms of the constitutional and procedural matters, the Select Committee has observed that the National Minister for CoGTA, the NCOP, the North West Provincial Legislature and the Municipality were notified of the intervention about the substantive matters related to the invocation of section 137 of the Municipal Finance Management Act.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 32 [Wednesday, 27 March 2019 12.2 The Select Committee has also noted that the planned protests at Naledi Local Municipality and the change of venue has affected the participations of some of the stakeholders including organised labour, women, youth forums.

12.3.
12.3.

In accordance with the terms of references, the select committee has noted that the administrator has made progress in developing the municipal financial recovery plan and the plan was tabled and adopted by the council.

The select committee has noted also that the administrator has assisted the municipality to develop implementation plan dash board to assess the seriousness of the financial problems and developed audit action plan to deal with matters raised by the Auditor-General 13.
Select Committee Recommendations 13.1 Having conducted the oversight visit to Naledi Local Municipality and interacted with members of African National Congress, the democratic party and representatives of the Agri- Forum, the Select Committee on Co-operative Governance and Traditional Affairs recommends as follows: 13.1.1 The NCOP notes the intervention in Naledi Local Municipality in terms of section 137 of the Municipal Finance Management Act.
13.1.2 The Administrator should fast-track the process of implementing the municipal turn-around plan, in accordance with the terms of reference assigned by the North West MEC for CoGTA.

14.1.3 The Administrator should provide progress reports on municipal plan to pay Eskom debt; review of organisational structure and resuscitation of local labour forum.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 Wednesday, 27 March 2019] 33 14.1.4.
The North West MEC for CoGTA must conduct Forensic Investigation on Supply Chain Management in the local municipality and tabled the report to the National Council of Provinces 13.1.4 The North West MEC for CoGTA should table quarterly progress report to the NCOP on the status of the intervention in the Municipality; including challenges encountered.
13.1.5 The Select Committee on Co-operative Governance and Traditional Affairs, in co-operation with the relevant Portfolio Committee in Free State Provincial Legislature, should in future conduct a follow-up oversight visit to the Municipality in order to evaluate the progress made in respect of the intervention in the Municipality.

Report to be considered.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 34 [Wednesday, 27 March 2019 6.
REPORT OF THE SELECT COMMITTEE ON PETITIONS AND EXECUTIVE UNDERTAKINGS ON THE HEARINGS OF THE SIGOGO PETITION, HELD ON 08 NOVEMBER 2018, 28 FEBRUARY 2019 AND 20 MARCH 2019, AT PARLIAMENT, AS ADOPTED ON 27 MARCH 2019 1.
BACKGROUND The Select Committee on Petitions and Executive Undertakings (Committee) having considered the Sigogo Petition (“petition”), referred to the Committee by the Chairperson of the National Council of Provinces (NCOP), on 7 September 2018, for its consideration and resolution, reports as follows: Prior to the referral of the petition to the Committee, the Chairperson of the NCOP first referred the subject matter of the petition to the Public Service Commission (PSC) for investigation.
On 3 May 2018, the PSC submitted an investigative report PSC Report) to the Chairperson of the NCOP.

However subsequent to the release of the PSC Report, the petitioner again submitted a petition to the NCOP averring that aspects of the report are false and that a proper investigation was not conducted by the PSC.
The petitioner, Mr Olwethu Sigogo, submitted the petition in his capacity as a representative of the National Education Health and Allied Workers Union (Nehawu) of the Khayelitsha District Hospital (KDH or Hospital) Constituency.

In the petition, he contends, that the findings of the PSC Report are incorrect.

The complaints relate to inter alia the freezing of posts, irregular appointments, absence of employment equity and mismanagement of funds at KDH.
The petitioner requests the intervention of the NCOP in resolving the complaints he raises in the petition.

The petition states that prior to seeking the intervention of the NCOP, the petitioner had approached ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 Wednesday, 27 March 2019] 35 Management of KDH, the Office of the MEC of Health in the Western Cape Province, the National Department of Health, and the PSC in the Western Cape Province for assistance in addressing the complaints.

2.
2.

HEARING ON THE PETITION The Committee, held a total of three hearings on the petition at Parliament.

A primary purpose of these hearings was to afford the petitioner as well as the relevant stakeholders the opportunity to make first hand oral submissions, to the Committee, on the petition.

3.

FIRST HEARING ON THE SIGOGO PETITION The first hearing on the petition was held on 08 November 2018 at Parliament.
3.1 Committee Members and Officials The following Committee Members attended the hearing on the petition: 3.1.1 Hon D L Ximbi, ANC, Western Cape (Chairperson of the Committee); and 3.1.2 Hon G G Oliphant, ANC Northern Cape The following Committee Members tendered their apologies for being unable to attend the hearing on the petition: 3.1.3 Hon M J Mohapi, ANC, Free State; 3.1.4 Hon H E Mateme, ANC, Limpopo; 3.1.5 Hon J M Mthethwa, ANC, Kwa-Zulu Natal; 3.1.6 Hon S G Mthimunye, ANC, Mpumalanga; 3.1.7 Hon B Engelbrecht, DA, Gauteng; 3.1.8 Hon G Michalakis, Free State; and 3.1.9 Hon T Mokwele, Northern Cape ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 36 [Wednesday, 27 March 2019 The Committee Members present at the hearing on the petition were supported by the following Committee officials: 3.1.10 Mr N Mkhize, the Committee Secretary; 3.1.11 Dr M Gondwe, the Committee Content Advisor; 3.1.12 Adv T Sterris, the Committee Researcher; 3.1.13 Mrs M Cassiem, Intern, Committee Section; 3.1.14 Mr M Nkwali, Researcher, Office of the NCOP Chairperson; and 3.1.15 Ms F L Lombard, Parliamentary Communications Officer.
3.2 Stakeholders The following representatives of the Nehawu Khayelitsha District Hospital Constituency appeared before the Committee during the hearing: 3.2.1 Mr O Sigogo, Branch Chairperson; 3.2.2 Dr M Witbooi, Secretary; 3.2.3 Mrs E S Maloi, Deputy Provincial Secretary; 3.2.4 Mrs B A Relare, Treasurer; 3.2.5 Ms B Saleni, Shop steward; 3.2.6 Ms S Yamiso, Shop steward; 3.2.7 Mr S Jiya, Shop Steward; 3.2.8 Mr A Ernstzen, Nehawu Member and Witness; and 3.2.9 Ms T Konile-Mdekazi, Nehawu Member and Witness The following representatives of the Cape Metropolitan Health Forum appeared before the Committee during the hearing: 3.2.10 Ms D O Kiewies, Chairperson of the Cape Metropolitan Health Forum.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 Wednesday, 27 March 2019] 37 The following representatives of the Department of Labour appeared before the Committee during the hearing: 3.2.11 Ms A Moiloa, Acting Director General; and 3.2.12 Adv.
M T Ntleki, Legal Advisor The following representatives of the Public Service Commission appeared before the Committee during the hearing: 3.2.13 Dr M S Leballo, Commissioner; 3.2.14 Mr L J Goosen, Commissioner; and 3.2.15 Mr. P Rockman, Western Cape Provincial Director.

4.

SUBMISSIONS BY THE PETITIONER 4.1 Submissions by the Petitioner, Mr O Sigogo Mr Olwethu Sigogo (Mr Sigogo), the petitioner explained that he submitted the petition in his capacity as Branch Chairperson of the Nehawu KDH Constituency.
He began his submissions by highlighting that Nehawu had been participating at an institutional level in a forum known as the Institutional Management Labour Committee (IMLC).

The IMLC is a platform intended to facilitate discussions on all matters affecting the staff of the Hospital and further serves as a communication forum discussing critical matters regarding the management and governance of KDH.
He further submitted that Nehawu has been participating in the IMLC since 2012 up until early 2017, wherein the IMLC collapsed due to the fact that the KDH management was no longer eager to engage with Nehawu anymore.

The forum was a critical structure that allowed Nehawu to discuss a number of issues with the management of KDH.
Further in his submissions, Mr Sigogo informed the Committee that he will take it through the issues of the IMLC; freezing of posts and irregular appointments; and employment equity and then allow Dr Witbooi, the Nehawu KDH Constituency Secretary to outline the rest of the issues and supported by submissions from the witnesses.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 38 [Wednesday, 27 March 2019 4.1.1 The Institutional Management Labour Committee Mr Sigogo informed the Committee that NEHWU is and has been the majority union at KDH and in terms of the Organisational Rights Agreement, Nehawu (as a result of it being a majority union) has the power to continue with the IMLC.
In June 2017, the management of the Hospital raised a procedural issue to the effect that Nehawu can no longer participate in the IMLC and discuss issues that are affecting the staff and patients.

This was concerning as other unions are not represented on the IMLC and Nehawu was the only union that was at the forefront in the fight with management on the IMLC.
With regards to the IMLC, the Mr Sigogo further informed the Committee that there was IMLC related training that was organised by management and during that training it was clarified that Nehawu has the right to engage with management, on its own, by virtue of it being the majority union at KDH.

Furthermore, in 2017, Nehawu embarked on a picket and on the day of the picket, members of Nehawu were intimidated by management of KDH.
Notwithstanding this, the picketing was a success and resulted in a memorandum being presented to and received by the Head of the Substructure Office, Dr M Phillips.

Before the picketing, Nehawu had invited the MEC for Health in the Western Cape (MEC) to come and collect the memorandum but the MEC delegated Dr Phillips to collect it on her behalf as she could not personally receive the memorandum.
The memorandum was later handed over to the Chief Director of Metro District Health Services, Dr G Perzez (“Dr Perzez”).

Dr Perzez, subsequently, invited Nehawu to a meeting where both parties could go through the memorandum and address the issues that raised in the memorandum three weeks after the memorandum was received by Dr Phillips, and when members of Nehawu were already complaining and being intimidated by the KDH management after complaining about quality of care at KDH.
According to Mr Sigogo, one would have expected that the KDH Skills Development Committee and its Sub-committee (i.e.

KDH Nurse Training Co-ordinating Committee) could be entrusted and tasked to intensify the ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 Wednesday, 27 March 2019] 39 training and skills development of staff.
On the contrary, over the past year Ms Mashaba (the current Acting Chief Executive Officer of the Hospital) and Mr Plaatjies (Assistant Manager Nursing) have tried to subvert the efforts of the Skills Development Committee.

Further, after being appointed Acting CEO of KDH, Ms Mashaba intensified her efforts to subvert the Nurse Training Co-ordinating Committee and the KDH Skills Development Committee.
The motivation behind their behaviour, in this respect, can only be attributed to the abuse of power, abuse of public funds, nepotism because this is not new to them.

The very existence of the Nurse Training Co- ordinating Committee and the KDH Skills Development Committee is a hindrance to their corrupt efforts.
The KDH Skills Development Committee requested Ms Mashaba and the management team to attend a Skills Development Committee meeting and explain their efforts and as per usual they failed to attend the meeting and ignored the request.

In concluding, this aspect of his submissions, Mr Sigogo submitted that as Nehawu they were disappointed with the outcome of the PSC investigation and in the manner in which the investigation was carried out by PSC.
All victimised staff members mentioned in the report were never interviewed by PSC and PSC only met with the Nehawu leadership and KDH management to the exclusion of victimised staff members.

And the victimisation did not stop following the investigation by PSC.

4.1.2 Freezing of Posts and Irregular Appointments As regards the issues of the freezing of posts, Mr Sigogo submitted that the issue has been part of the agenda since the establishment of the KDH in 2012.
He added that the issue has been constantly raised because it does not only affect the KDH workers but also the community of Khayelitsha and its working class.

He further pointed out that the freezing of posts by the management of KDH has resulted in poor patient care at the Hospital and the members of Nehawu, doctors and nurses are being blamed for this poor patient care despite it being the prerogative of the management to hire people.
The PSC found in its investigative report that the management was correct in freezing posts as it was implementing measures directed by the national government.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 40 [Wednesday, 27 March 2019 In his submissions, Mr Sigogo further informed the Committee that from time to time vacant funded posts are used to fill other posts in the Hospital.
A case in point is that of an admission clerk post that was assigned to assist a specialist doctor without the relevant support staff being assigned to assist the specialist doctor.
Mr Sigogo also informed the Committee that Nehawu has noted in the past that there have been a number of irregular appointments at KDH and as such Nehawu had fought for fourteen (14) of those irregular appointments to be investigated by the PSC and only two (2) of these irregular appoints were found to be substantiated according to the PSC Report.
4.1.3 Employment Equity With regards to the issue of employment equity at the Hospital, Mr Sigogo pointed out that KDH is situated in a black community but the Hospital management does not reflect the demographic composition of the community.
Nehawu believes the issue of employment equity needs to be taken seriously and attended to and when Nehawu queried this with the Hospital management, the response it received was that it is not up to the KDH management to decide on the issues of employment equity but it is a policy that Head Office has to decide on.

In his submissions on the issue of employment equity, Mr Sigogo also touched on the appointment of Ms Mashaba, the current Acting CEO.
In this respect, he submitted that as Nehawu they agreed, in principle, with the MEC that a black person be appointed to the position but the appointment of a person of the calibre of Ms Mashaba is problematic as she is not a worthy candidate for the position.
Mr Sigogo also submitted they have complained several times about her conduct and in the PSC Report her name appears several times in connection with financial misconduct and victimisation of KDH staff members and instead of her being disciplined she was instead promoted to the position of Acting CEO.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 Wednesday, 27 March 2019] 41 In concluding his submissions, Mr Sigogo reported that after the PSC Report was tabled, Nehawu shop stewards were informed by certain KDH managers of a “hit list” of seven (7) people that must be dismissed from KDH and included in this hit list is himself and Dr Witbooi.

Mr Sigogo further reported to the Committee that two individuals on the hit had already been dismissed from KDH.
Mr Sigogo further stressed to the Committee, that once you take on the management of the Hospital, they will look for anything to formally charge you with, even if it does not warrant a formal hearing, and ensure you are formally charged and a hearing is held with a view to eventually dismissing you.

And a specialised, substructure in the form a Labour Relations Officer, Mr K Mbobo specialises in dismissing employees who stand up for their rights.
4.2 Submissions by Dr Witbooi In his opening remarks, Dr Witbooi, the Nehawu KDH Constituency Branch Secretary, appealed to the Committee to assist the union in stopping all forms of intimidation, threats, bullying and victimisation of staff members by the management of the Hospital.
Dr Witbooi submitted that he seeks the following intervention from the Committee: 4.2.1 A thorough investigation of all the issues raised and that appropriate action be taken against all those responsible for “corrupt activities”; and 4.2.2 The steering of KDH towards a better opportunity to restore the public image of KDH and improved relations with the community of Khayelitsha.
In his extensive submissions Dr Witbooi further submitted that the staff and shop stewards at KDH have followed all the lawful and recommended procedures before turning towards the NCOP for intervention and also indicated that the following institutions were approached for intervention, in this respect, but to no avail: 4.2.3 The Public Service Regulated Code of Conduct and the Public Service Act grievance procedures; 4.2.4 KDH management and KESS in IMLC meetings; ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 42 [Wednesday, 27 March 2019 4.2.5 The Western Cape Provincial Chamber of the Public Health and Social Development Sectoral Bargaining Council (PHSDSBC); 4.2.6 Special IMLC meetings (these were declined) in between routinely scheduled IMLC meetings; 4.2.7 Public Service Commission; 4.2.8 Commission for Conciliation, Mediation and Arbitration; 4.2.9 Office of the Chief Director, Western Cape Metro District of Health (Sub-structure) 4.2.10 Head of Department Western Cape Metro; 4.2.11 Office of the MEC for Health; and 4.2.12 Office of the Premier Western Cape.
He also submitted that Public Institutions like the Office of Labour Relations in Western Cape (headed by Mr J Roman) and the Public Service Commission only exist and function on the back of taxes paid either directly through personal income tax and VAT by the members of the public or indirectly from taxes paid by employers and Nehawu expects that these institutions will assist both the staff and management with equal determination and vigour.
However; they have learnt that these institutions are mainly in the service of management and while staff members are delivering a service to the community, these institutions together with the management of KDH are constantly busy using public funds to make the life of the staff unbearable by either doing or tolerating harassment, including sexual harassment, victimisation, bullying, financial mismanagement, corruption and intimidation of staff and leaving staff members and members of public powerless and at their mercy.
Over the past two weeks, the Office of Labour Relations in the Western Cape Province together with the Public Service Commission provided “Grievance procedures and Staff Discipline Training” at KDH.

However, certain supervisors and managers were deliberately excluded from attending these training sessions and when one looks at who these supervisors and managers are, it will be found that they are the ones who spoke out against the wrong doings at KDH.
Yet, as supervisors and managers they should have been invited to attend these training sessions.

It is only when at least two of these excluded supervisors or managers complained that they were ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 Wednesday, 27 March 2019] 43 then they were allowed to attend these training sessions.

The general or non- managerial staff of KDH could have also benefitted from such training sessions but they were also not invited to attend the training sessions.
Dr Witbooi requested the Committee to assist Nehawu in investigating why some supervisors and managers were excluded from attending the training sessions.

In his submissions, Dr Witbooi also submitted that in the past three years Nehawu has reported the financial mismanagement at KDH to all the above mentioned institutions but their reports have fallen on deaf ears, including the case of the former CEO of KDH being paid a quarter million rands in cash for untaken annual leave.
The Office of Mr J Roman (i.e.

Office of Labour Relations in the Western Cape) has been aware of this issue but has not acted upon it.

The PSC did an investigation into the issue and concluded that it found nothing irregular about the payment and consequently, no action was taken to restore public confidence.
The argument used by the PSC in defence of the pay-out to the former CEO of KDH, was that all of the necessary documents to make the pay-out were correctly signed and this appears to be an anomaly at a hospital which repeatedly says that budget and fiscal allocation constraints reduce its ability to provide an improved healthy service to the community of Khayelitsha.
Moreover, the current acting CEO of KDH, Ms Mashaba, appears to be even more dangerous with her abuse of power and once she is thoroughly investigated she must account for her “corruption”.

Dr Witbooi further requested the Committee to assist it in ensuring that everyone who is part of the Hospital management and under her leadership, and knew of her wrong doings but kept silent, be held accountable.
Dr Witbooi also informed the Committee that as a union, Nehawu does not deal directly with quality of care because it is not a direct labour related issue.

However, it is indirectly a labour related issue because financial mismanagement, corruption and constant victimisation of staff have a negative impact on the quality of care in that the resources of the Hospital will not be allocated in an effective way.
And the compromised quality of care has resulted in the following at KDH: ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 44 [Wednesday, 27 March 2019 4.2.13 KDH not having enough drivers to transport specimens in between KDH and Tygerberg Hospital during afterhours; 4.2.14 A senior nursing assistant manager being removed from her position by Ms Mashaba and being assigned to work away from KDH so that she cannot witness the wrong doings of Mrs Mashaba and Mr Plaatjies; 4.2.15 Mr K Mbobo (Mr Mbobo) resigned from his position as Labour Relations Officer for KESS a month ago then got re-appointed by KESS within one week of leaving to able to access his benefits.
The staff at Mfuleni Clinic are unhappy with a recent KESS appointment at the health facility because it is alleged that KESS did not follow a proper recruitment and selection process and the appointment appears to be linked with the irregular re-appointment of Mr Mbobo.

Both KESS and KDH management owe Mr Mbobo a lot because even though he was employed at KESS, he assisted and advised them on how to not resolve grievances at KDH and get away with it.
He also advised and assisted them to render the IMLC dysfunctional; 4.2.16 Ms Mashaba and KESS attempted to make another irregular appointment in relation to an Operational Manager position in the labour ward.

The process was stopped after KDH staff lodged a complaint.

KESS and Ms Mashaba should be investigated for this particular incident; 4.2.17 Over loading the Hospital with patients without clearly communicated contingency measures.
For example, a few months ago, patients from Mfuleni who used to be managed in the Eersteriver drainage area were added to the Khayelitsha drainage area and no clear explanation was given to staff for this decision and no information was provided for the consequences of the quality of care to patients at KDH due to the increased patient load from an additional drainage area.
One expects that an executive decision to increase the patient load for KDH would be accompanied with an announcement of increased resources for KDH but it did not happen that way.
Therefore, the staff was exposed to a greater risk of individual errors and burnout while the complaints from the public against KDH quality of care escalated in number; ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 Wednesday, 27 March 2019] 45 4.2.18 Many high-quality staff are not attracted to working at KDH; 4.2.19 Occupational Health and Safety is compromised and continues to be compromised at KDH; 4.2.20 Staff members appointed through corrupt recruitment and selection processes are blindly being loyal to management and protect management and eventually assist in committing corrupt practices; and 4.2.21 Constantly bullied and victimised staff do not buy into the plans of management and will not provide a service to the best of their ability.
He further indicated that Nehawu had submitted reports relating to the quality of care at KDH and once a thorough investigation is conducted into the issue, many reports are likely surface in this regard.

Dr Witbooi also submitted that the appointment of Mr Stamper was a corrupt appointment and this appointment has been defended by the management in spite of multiple complaints from both the staff and patients.
Mr Stamper, who has now left KDH, was appointed at KDH as an advanced midwife but could not even function at that level of a normal none-advanced qualified midwife or even worse, a general professional nurse who happened to work in labour ward.

As a result, pregnant patients were repeatedly exposed to his clinical mismanagement.
His biggest defenders are the current Acting CEO Ms Mashaba and Mr Plaajies and the severe and inappropriate discipline which was applied to other staff members at KDH was not applied to Mr Stamper.

And the PSC found absolutely nothing wrong with his appointment and role at KDH even though Nehawu believes that the issue of his appointment must be reopened for investigation.
4.3 Submissions by Mr A Ernstzen In his submissions Mr A Ernstzen (Mr Ernstzen) informed the Committee that he was a Human Resources Manager of KDH from 2011 up until his dismissal in July 2018.

He further informed the Committee that his submissions will relate to some of the issues covered in the PSC Report.
He ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 46 [Wednesday, 27 March 2019 added that during the investigation by PSC, PSC did not at any time request to interview him in connection with human resources matters at the Hospital.

He also emphasised that he has dealt with most of the issues articulated in the petition and even more.
In his submissions, Mr Ernstzen submitted that he had worked closely with the former CEO of the Hospital, Dr Kharwa, and that at some stage he was labelled as Dr Kharwa’s “lap dog” because he used to execute most of the instructions given to him by Dr Kharwa.

However, things changed when he was required to respond to issues raised by the Auditor General (AG) regarding irregular recruitment selections, overtime and staff performance.
The AG needed answers, in this regard, but he started to feel uncomfortable and began to question the motive behind many of the things happening at KDH such as the manipulation of performance reports, the hiring of unqualified staff and incidents of nepotism.

And when he began questioning these things, he started falling out of favour with Dr Kharwa and then he became a target.
He also felt that he was not protected under the Promotion of Access to Information Act (Act 2 of 2000) (PAIA), national legislation contemplated in section 32 (2) of the Constitution.

Mr Ernstzen also confirmed that he was aware of the “hit list” referred to by Dr Witbooi in his submissions and is unsure whether to take the “hit list” literally or figuratively as it makes him fearful when there are talks about the existence of a “hit list”.
He further informed the Committee that a few years back, one of the colleagues was shot to death and it is alleged that the colleague used to meet with Dr Kharrwa after hours and he was also favoured by Dr Kharwa.

It is further alleged that this particular colleague kept confidential documents in his locker and all of a sudden these confidential documents disappeared.
Also According to Mr Ernstzen, his job as Human Resources Manager at KDH entailed recording everything and some of the recordings he made have been emailed to the MEC for Health (MEC) such as recordings about the alleged manipulation of the performance management system, the recruitment and selection processes and overtime.
He indicated that when he tried to bring the recordings to the attention of the MEC and the Head of ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 Wednesday, 27 March 2019] 47 Department of Health he ended being a target of the management at KDH.

He further assured the Committee that he still has the documents, recordings and videos exposing some of alleged irregularities at KDH.
He further stated that a case in point, in this regard, is that of Mr Plaatjies not fully recusing himself from the panel where his brother was also an applicant for a position and was later given a written warning for this transgression.

The circumstances of this case point to the fact that Mr Plaaitjies was not fully aware of the procedure in terms of recusing himself from the panel.

Mr Ernstzen also highlighted occupational health and safety issues at KDH, in his submissions to the Committee.
In this respect he indicated that a few months ago the MEC opened a scanner room at the KDH but a year before the official opening of the scanner room, a former Facility Manager at KDH had raised a concern regarding the safety of the scanner room.

According to the former Facility Manager, the scanner room had no ventilation, no exit in and out and as such this posed as a risk.
He then asked the management, the contractor (who constructed the scanner room) and the Department of Public Works who will take the risk if something happens and people are unable to exit that particular room.

The Chief Radiologist raised the very same concerns about the safety of the scanner room.

Mr Ernstzen also submitted that prior to the health and safety issue with the scanner room, there were two fire scares at KDH in September 2018.
In one instance there were no precautionary steps taken to secure the area and also no steps taken to safely move patients out and what happened was that Hospital staff were running out first leaving the patients behind.

Soon thereafter, there was a disaster management meeting, included in that meeting was the Emergency Medical Services, Traffic Police and officials from the Fire Department to assist with how to organise a drill.
All the stakeholders reconvened for a second meeting and made demonstrations to the staff at KDH.

The Chief of the Fire Department was not present at the second meeting but he had issued an inspection report after the first meeting wherein he found a number of fire safety irregularities at the Hospital and informed the Hospital that he refuses to part of the disaster meeting until the fire safety irregularities he identified are sorted out.
The Chief of the Fire Department had issued KDH with a letter in this respect and had given it a ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 48 [Wednesday, 27 March 2019 time frame within which to sort out these irregularities.

In June 2018, it was established that most of these irregularities had not been attended to as per his instructions or recommendations.
In concluding his recommendations, Mr Ernstzen submitted that there have been many other related incidents and he is willing to provide the Committee with recordings on how the performance management system was manipulated, since he was also being subjected to such victimisation and intimidation.

He reported that his dismissal on the 2nd of July 2018 was inclusive of the fictitious charges laid against him but indicated that he is busy with an arbitration.
He further pointed that he has exhausted all the avenues and even tried meeting with the MEC, but the meetings are always postponed.

4.4 Submissions by Ms T Konile-Mdekazi In her submissions, Ms T Konile-Mdekazi, a former manager of the substructure briefly informed the Committee that she was targeted for firstly, assisting an NGO to source funding and secondly, for assisting Ms Gladys Fuzane (the petitioner in the Fuzane petition submitted to the NCOP).
And thirdly, fired without a disciplinary hearing after an incident involving the Western Cape Department of Transport (Department of Transport).

With regards to the assistance she provided to Ms Fuzane, she submitted that when the Committee summoned her to appear before it in relation to the Fuzane petition, Dr Kharwa instructed her to lie and inform the Committee that the late Ms T Fuzane was not beaten but had bed sores.
But according to Ms Konile-Mdekazi, she wrote a different report as to the one she was instructed to provide to the Committee by as per the instruction of Dr Kharwa.

Ms Konile-Mdekazi further explained the events leading up to her unfair dismissal.
In this respect, she submitted that the Department of Transport had allocated her a vehicle with the registration number GCV09IG to use from 1 to 28 February 2017 and although she had been a regular driver of that car for two (2) years, the same car was allocated, to one, Ms Jones for three (3) ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 Wednesday, 27 March 2019] 49 days.
On the second of February 2017, the Transport Officer authorised her to go and swap the cars with Ms Jones at Nolungile Clinic.

However, when she got to Nolungile Clinic, Ms Jones refused to hand over the car to her and Mr Ian Williams, the Transport Manager, in acknowledging and correcting the mistake done by the Department of Transport, instructed Ms Jones to hand over the car to her and Ms Jones handed over the car to her.
A month later, on the 24 March 2017, Ms Sheila Maclean, her secondary supervisor, informed her that Ms Jones had written a complaint against her stating that she had been rude to her and acted in an unprofessional manner when she requested the car.

She then had to write her own statement pointing out the lies that were written in the complaint by Ms Jones.
There was also a lot of correspondence from Ms Maclean to the Human Resources Directorate (HRD), accusing her of not attending meetings yet she was never invited to these meetings.

She was further excluded in most of these communications.

On 30 May 2017, Mr Mbobo, the Labour Relations Officer, requested a meeting with her and she had explained to Mr Mbobo that in light of her itinerary, the meeting notice was sent at short notice.
Mr Mbobo became rude to her when she pointed this out and hung up the phone on her.

She then arranged through Mr Mbobo for the shifting of the meeting to the 31 May, which was agreed upon and evidence to this effect can be provided.

The meeting took place on the 31 May 2017 and Mr Mbobo stated that he is not going to lodge a complaint about the communication of the 30 May 2017.
On the 31 July 2017, she was served with six duplicated charges and Mr Mbobo had also drafted a four-page statement accusing her of being rude to him and all sorts of other accusations.

Mr De Long from the Department of Transport had also written a statement stating that he was not there on the day of the incident and he had heard that she forcefully took the car from Ms Jones even though nobody had given her the authority to go and swap the car.
On 13 October 2017, she was formally invited to a hearing, but unfortunately her Nehawu representative had bereavement and this was communicated to Rozaan of HR.

On the 28 November 2017, she was served with a dismissal letter by Sheila and Rozaan.

The dismissal letter in question had no details on the hearing such ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 50 [Wednesday, 27 March 2019 as the hearing date, hearing venue and time and this point to the fact that there was no formal hearing.
She appealed her dismissal on 30 November 2017 without being given minutes of the hearing, a list of attendees and a report from the presiding officer whom she had never met together with the investigation officer.

Her appeal failed and her dismissal was confirmed and signed by the Substructure Office Head of KDH, Dr Phillips who had been involved in the case from the start.
In concluding her submissions, Ms Konile-Mdekazi submitted that she later found out that her benefits such as medical aid were suspended on the 30 of November 2017, which is the day that she lodged her appeal yet she was only formally dismissed on 11 December 2017.

And this makes her believe that they knew that they were going to dismiss her, so her appeal was just a formality.
4.5 Submissions by Ms D O Kiewies Ms D O Kiewies (“Ms Kiewies”), Chairperson of the Cape Metropolitan Health Forum, briefly informed the Committee that the issues at KDH were as a result of a rushed political project.

She added that when the Hospital was built it was fully known that it was too small to serve the community of Khayelitsha.
She also submitted that there is a lost set of minutes which outlined how the Western Cape Department of Health (“Department”) was going to manipulate and victimise “problematic” staff members.

She emphasised that once the Department determines you are a problem, it has a way of making sure it gets rid of you and she too had been manipulated and victimised by the Department.

5.
5.

SUBMISSIONS BY THE DEPARMENT OF LABOUR The oral submissions on behalf of the Department of Labour (DOL) were led by the Acting Deputy Director General, Ms A Moiloa (Ms Moiloa) and Adv M T Ntleki (Adv Ntleki), a Legal Advisor in the DOL.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 Wednesday, 27 March 2019] 51 In her submissions, Ms Moiloa outlined that there are two issues raised in the petition in respect of which the DOL can play a direct role petition, namely the employment equity and occupational health and safety issues.
With respect to the issue of employment equity at KDH, Ms Moiloa submitted that the DOL is administratively mandated to ensure that institutions comply with the prescripts of the Employment Equity Act (Act No.

55 of 1998) (Act).

She further submitted that having noted the PSC Report and its recommendations, the DOL can conduct a thorough inspection geared towards ensuring compliance with the Act.
She however cautioned that the DOL does not have a mandate to prescribe racial quotas to institutions but can only provide guidance taking into considering the demographics of a particular area.

And the DOL has already assigned an inspector to conduct an employment equity inspection at KDH.

As regards, the issue of occupational of health and safety, she submitted that the DOL has a legal mandate to ensure that employers and employees are not subjected to unhealthy and unsafe working environments.
And in this regard, it has assigned a specialist to conduct an inspection after noting the contents of the PSC Report and it already has an undertaking in the office that the inspection will indeed take place.

In his submissions, Adv Ntleki submitted that in between the presentations he noted that there were issues of employment conditions raised and pointed out that the DOL has a limited involvement in terms of the Labour Relations Act (Act 66 of 1995) (LRA) in so far as such issues are concerned.
However, he assured the Committee that the LRA has put mechanisms in place to deal with such issues.

In fact, the bargaining council is actually mandated to do that in terms of S28 of the LRA.
Further in his submissions, Adv Ntleki raised a concern that during the course of various submissions he did not get a sense that some of the individual cases are purely administrative in nature and that all the ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 52 [Wednesday, 27 March 2019 processes were followed up to a point where they were referred to the bargaining council or the Commission on Conciliation Mediation and Arbitration (CCMA).
He also encouraged Nehawu to assist in ensuring that these cases are referred to the correct platform and even where the cases are unsuccessful on that platform.

Adv Ntleki also added Nehawu should continue to assist and make sure that these cases are referred right up to the Labour Court.

It is where the Labour Court will be able to rule on these cases and take the institution to task where it has erred and correct the matter.

6.
6.

SUBMISSIONS BY THE PUBLIC SERVICE COMMISSION Submissions on behalf of the Public Service Commission (PSC) were led by Dr MS Lebello (Dr Lebello).

In his submissions, Dr Lebello submitted that his submissions will cover the step by step investigation process, overall findings and specific recommendations of the PSC Report.

Dr Lebello submitted that the PSC investigated team engaged all affected parties during this investigation and gathered all the necessary information.
He added that the investigation process by the PSC included the following steps: 6.1 Step 1: Preliminary meeting conducted with the Nehawu leadership at an institutional level.

This took place on 08 March 2018.

6.2 Step 2: Development of Terms of Reference for the investigation.

6.3 Step 3: Investigative meetings conducted with all parties, namely, Nehawu, the Management of KDH, and the Metropole Management.
These meetings (which took place between 19 and 20 March 2018) were conducted to gather oral evidence directly from the complainants, the leadership of the institution and the regional management.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 Wednesday, 27 March 2019] 53 6.4 Step 4: There was scrutiny of all documentary evidence provided by all the parties.

Nehawu provided evidence and the HR unit of the substructure provided evidence.

6.5 Step 5: Analysis of evidence and drafting of report.
This included additional evidence requested from the substructure HR unit and other relevant information.

6.6 Step 6: Submission of the report to PSC Chairperson, NCOP Chairperson, and engagement with all parties on content and recommendations of the report.

Dr Lebello further indicated that feedback sessions were conducted with each of the parties, including the MEC of Health and HOD of Health.

The content of the report was discussed and questions responded to by the investigative team.
In closing his submissions, Dr Lebello indicated that in its overall findings, PSC found that there was merit in most of the allegations made by Nehawu.

However, the severity and veracity of certain conclusions drawn by Nehawu was contestable.

The PSC also found that whilst the facts surrounding the specific allegations differed, they nonetheless pointed to a level of procedural or systemic failures.
In the case of employment equity targets, it recommended a policy review to be undertaken by the Department and found that the decision making process was highly questionable in the case of annual leave pay-outs and the continued utilisation of retired staff.

7.

SECOND HEARING ON THE SIGOGO PETITION The second hearing on the petition was held on 28 February 2019 at Parliament.
7.1 Committee Members and Officials The following Committee Members attended the second hearing on the petition: ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 54 [Wednesday, 27 March 2019 7.1.1 Hon D L Ximbi, ANC, Western Cape (Chairperson of the Committee); 7.

1.2 Hon H E Mateme, ANC, Limpopo; 7.1.3 Hon S G Mthimunye, ANC, Mpumalanga; 7.1.4 Hon G G Oliphant, ANC Northern Cape, 7.1.5 Hon T Wana, ANC Eastern Cape, and 7.1.6 Hon T Mokwele, Northern Cape.
The following Committee Members tendered their apologies for being unable to attend the hearing on the petition: 7.1.7 Hon M J Mohapi, ANC, Free State; and 7.1.8 Hon J M Mthethwa, ANC, Kwa-Zulu Natal; The Committee Members present at the hearing on the petition were supported by the following Committee officials: 7.1.9 Mr N Mkhize, the Committee Secretary; 7.1.10 Dr M Gondwe, the Committee Content Advisor; 7.1.11 Adv.
T Sterris, the Committee Researcher; 7.1.12 Mr M Nkwali, Researcher, Office of the NCOP Chairperson; and 7.1.13 Ms F L Lombard, Parliamentary Communications Officer.
7.2 Stakeholders The following representatives of the Nehawu Khayelitsha District Hospital Constituency appeared before the Committee during the hearing: 7.2.1 Dr M Witbooi, Secretary; 7.2.2 Mr S Manga, Clinical Programme Coordinator; 7.2.3 Mrs M E Warnick, Assistant Nursing Manager; 7.2.4 Mrs M Bennett, Clinical Programme Coordinator; 7.2.5 Mr M C Speelman, Admission Clerk; ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 Wednesday, 27 March 2019] 55 7.2.6 Mrs B Q Rolane, Nehawu Branch Secretary, 7.2.7 Ms S Yamiso, Nehawu Shop steward; 7.2.8 Mr S Jiya, Nehawu Shop Steward; 7.2.9 Mr A Ernstzen, Nehawu Member and Witness; and 7.2.10 Ms T Konile-Mdekazi, Nehawu Member and Witness.
The following representatives of the Department of Labour appeared before the Committee at the hearing: 7.2.11 Mr. D Esau, Chief Inspector; and 7.2.12 Mr. T N Stana, Chief Inspector.

The following representatives of the Public Service Commission appeared before the Committee at the hearing: 7.2.13 Dr M S Lebello, Commissioner; 7.2.14 Mr L J Goosen, Commissioner; 7.2.15 Mr P Nzimande, Commissioner; 7.2.16 Mr R S Erasmus, Deputy Director; and 7.2.16 Mr P Rockman, Western Cape Provincial Director.

8.
8.

SUBMISSIONS BY THE PETITIONER 8.1 Submissions by the Dr M Witbooi Submissions on behalf of the petitioner were led by Dr M Witbooi (Dr Witbooi), the Nehawu KDH Constituency Branch Secretary.

In his submissions, Dr Witbooi briefly recapped on the submissions made before the Committee on 8 November 2018.

In his submissions Dr Witbooi further highlighted that Nehawu represents all workers, including those workers who have issues outside of the health care sector.
Also according to Dr Witbooi, Nehawu had followed all the normal processes in relation to the complaints levelled against the management of KDH but found that despite following the proper processes ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 56 [Wednesday, 27 March 2019 they were not making any progress in resolving the complaints.

He added that he believes that if these complaints are not resolved the biggest victims will be the poor and vulnerable community members of Khayelitsha.
And the staff of KDH will also be at the receiving end as long as these complaints remain unresolved.

Dr Witbooi further submitted that one of the biggest concerns for Nehawu is the financial mismanagement of KDH.

The management of KDH has failed to manage the finances allocated to KDH in a proper manner so that services are properly delivered to the community.
The management of KDH has also failed to be transparent in managing the finances given to the Hospital and the community is often told, by the management of the Hospital, that there is no money to provide proper services.

He did however acknowledge that there are limitations with the finances allocated to KDH but this cannot be used as an excuse for not adequately servicing the community.

He also submitted that the second biggest concern for Nehawu is the way the KDH staff are managed.
If you are too vocal, as a staff member, about the issues that need to be addressed, the management will victimise you and there are witnesses that will make submissions to the Committee on this victimisation.

And the witnesses appearing before the Committee in this regard represent a small portion of so many other people that have been victimised by the management of KDH.
In his submissions, Dr Witbooi also addressed the issue of health and safety at the Hospital, indicating that the staff and patients need to be in a healthy safe working environment including the patients.

He reported that as a union, they had fought hard through all the available channels (including the Institutional Management Labour Committee (IMLC) and Provincial Chamber Bargaining Council (Chamber)) for the health and safety issues at KDH to be addressed but were told that is nothing wrong at KDH.
He further made the Committee aware that the issue was given attention after the first hearing on the petition wherein the Department of Labour (DOL) made an undertaking to conduct an inspection at the Hospital.
And the ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 Wednesday, 27 March 2019] 57 inspection was carried out and Nehawu is impressed with the inspection carried out although there were acts of intimidation perpetuated against staff members by the Provincial Department of Health during the inspection.
In concluding his submissions, Dr Witbooi notified the Committee that the moment the management of KDH knew that there was going to be a labour inspection conducted, it changed a lot of things and prepared for the inspection to ensure that it is found to have complied with the health and safety issues raised by Nehawu in the petition.
He further submitted that KDH management went so far as to summon the non-functioning Health and Safety Committee to a meeting, something which has not been happening for months.

These “misleading tactics” of the management of KDH have also been applied to the clinical care and audit processes, whereby they are always preparing in advance to “cover up” and ensure whoever conducts the audit makes no adverse findings.
In further concluding his submissions, Dr Witbooi made submissions that on the manner in which complaints by staff members are resolved by the management of KDH.

In this respect he stated that where a complaint is filed by a staff member that complaint will not be treated with the urgency it deserves and will instead be dragged out.

He cited as an example an instance where one of the staff members complained about the irregular appointment of one Mr Francois Brandt and lodged a grievance.
The response to this grievance was give 5 (five) years after the grievance had been lodged.

In concluding his submissions Dr Witbooi reiterated that Nehawu has followed all the internal processes in relation to the complaints including elevating them to the IMLC and Chamber but there has been no intervention from the MEC of Health and the Chamber has indicated that the issue is that the management of the Hospital and Nehawu need to be trained in resolving issues.
He also added that Nehawu had elected to appear before the Committee in an effort to resolve its complaints within the framework of the law.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 58 [Wednesday, 27 March 2019 8.2 Submissions by Mr S Manga Mr S Manga (Mr Manga), a Clinical Programme Coordinator responsible for infection control made oral submissions on the issues of recruitment and selection; wellbeing of nursing staff and psychiatric care at the Hospital.
8.2.1 Recruitment and Selection In his extensive submissions, Mr Manga raised concerns, that KDH is in a mess when it comes to its recruitment and selections processes and staff are depressed because when posts are being advertised and they apply they are often told that they do not qualify for the posts and are hence not shortlisted for interviews.
He further added that there is an emerging pattern that almost all managers, at KDH, that are employed under the nursing component are from psychiatric hospitals or have a psychiatric care back ground despite KDH being a general hospital and not a specialist hospital and he often wonders if this does not contribute to the adverse incidents that are occurring at the Hospital.
He further indicated that ever her appointment of Nursing Manager, the Acting CEO of KDH is on a campaign to purge all the existing managers and nurses and replace them with nurses from psychiatric hospitals and not take into account they experience.

KDH is still awaiting the appointment of a new Quality Manager.

Moreover, all the interview panels at the Hospital in the past year have been made up of one Chairperson sitting for all the nursing related interviews.
The management of KDH is divisive and defensive in their approach to the recruitment and selection of staff and if something is not urgently done, KDH will be losing good and experienced nurses, as they are not considered when positions open up.
Further in his submissions on the recruitment and selection processes at the Hospital, Mr Manga informed the Committee that the recruitment and selection processes at KDH leaves too much to be desired, so much so that it disadvantages every nurse with the title of Clinical Programme Coordinator.

Mr Manga also submitted that in 2016, he applied for the post of Assistant Manager in General Nursing and he was not shortlisted for interviews.
And ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 Wednesday, 27 March 2019] 59 he subsequently wrote a letter, in August 2016, seeking clarity as to why he was not shortlisted for interviews but there was no response forth coming.

Then on 16 September 2016, he launched a grievance seeking reasons for not being short listed and he only received a response on 9 November 2016 stating that an error was made but they recommend that he continue to apply in the public service.
Mr Manga further submitted that he forwarded his grievances to the Office Chief Director and, People Management Office and received no response.

He then requested Nehawu to intervene and Nehawu wrote to the Chief Director on 1 March 2017 indicating that if there is no response by 3 March 2017, Nehawu will declare a dispute on the matter.

On 3 March 2017 there was still no response, then Nehawu declared a dispute on the matter and engaged with the Bargaining Council on the matter.
On the 17 March 2017, he received a response from the Chief Director and People Management Officer which basically stated that his grievance was found to be unsubstantiated.

Mr Manga further informed the Committee that an arbitration hearing was scheduled and heard on 05 July 2017.

And he noticed that the advert was changed to state that one needs to be able to show evidence in respect of their managerial experience and also provide evidence that there are people who are currently reporting to them.
One had to show that they had previously managed leave of staff; conflict; assessment appraisals; and taken disciplinary steps against employees reporting to them.

In the previous advert all those requirements were not stipulated.

Mr Manga submitted that he believes that if even these requirements where in the previous advert he would have still qualified for the concerned post.

On the 25 July 2017, an outcome of the hearing was received which favoured the Department of Health.
Also according to Mr Manga, in this sense, all Clinical Programme Coordinators across the Province are stuck in terms of their career development.

8.2.2 Wellbeing of Nursing Staff In his submissions on the wellbeing of the nursing staff at KDH, Mr Manga submitted that there are 3 (three) nurses, at the Hospital, who have been diagnosed with depression and all 3 (three) nurses are reporting to the same manager and that manager is refusing to help or assist them.
The manager also refused to act on the recommendations made by a doctor who examined ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 60 [Wednesday, 27 March 2019 and diagnosed 1 (one) of the 3 (three) nurses.

2 (two) of the nurses are currently on sick leave due to depression.
Mr Manga also cited the case of a nurse who is suffering from a backache and was diagnosed with deep vein thrombosis diagnosed an on January 2018 and the doctor recommended that she be removed and placed where she can avoid lifting and put strain on her legs, the nurse even signed a PILLAR (Temporally Incapacity Leave Long Period) and submitted it to her manager but her manager refused to act on it.
8.2.3 Psychiatric Ward Mr Manga lastly reported to the Committee that KDH was not, initially, designed to accommodate psychiatric patients and its wards are not built in such way as to accommodate such clients.

Moreover, there are no staff employed for psychiatric ward but the Hospital still operates a psychiatric ward which is 35 bed ward.
Mr Manga further submitted that there are no cleaning staff for that ward and during its recent inspection at the Hospital the Department of Labour recommended that cleaning staff be employed for the ward however to date nothing has been done.

He had previously raised concerns on this issue with the management of KDH and the Acting CEO had instructed him to do investigation and come up with recommendations and he did just.
But his recommendations were rejected and told that “this happens in all other psychiatric and district hospitals provincially”.

Mr Manga concluded his submissions in this respect, by informing in the Committee that in February 2019, that there were 79 patients in the psychiatric ward which is a 30 bed ward.

This has led to maintenance unit being called 3 to 4 times a day to unblock the toilets or fix whatever is broken.
He also cautioned that the psychiatric ward which is located or accommodated on the first floor of the Hospital presents a risk in itself as recently, a patient nearly jumped from the first floor to the ground floor.

There have been a lot of other similar incidents involving psychiatric clients.

He further indicated that nursing staff are sent to do advanced psychiatric courses however they qualify most nurses resign and go back to work in other hospitals as their qualifications are completely disregard.
The attrition rate at KDH is generally very high because of such practices.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 Wednesday, 27 March 2019] 61 8.3 Submissions by Ms M Bennett In her detailed submissions Ms M Bennett (Ms Bennett), a qualified nurse and manager of the training department at KDH, submitted that the purpose of her submissions is to inform the Committee about the concerns she has around the poor management of adverse incidents at KDH.
According to Ms Bennett patients have become victims of bad care and the management of KDH and its staff are not being held accountable for transgressions committed in the jobs that they are employed to do.
Ms Bennett also informed of the following adverse incidents that have occurred over the years at the Hospital and that is aware of: 8.3.1 Incident 1: 2 (two) neonates died, in the nursery department of KDH, after a blood transfusion was given to them by an agency staff nurse you had no experience in working in the nursery department.

The incident occurred during the night duty shift and was reported to them, in the morning, during the handover meeting.
Ms Bennett and a colleague went to the nursery department to get the full details of the incident.

When they arrived at the nursery department they found the mother of one of the deceased babies sitting and looking distraught in one of the rooms.

The mother informed them that her baby just turned blue after the nurse started the blood transfusion.

It later emerged that the professional nurse who carried out the transfusion was booked to work at the Hospital on an agency night duty shift.
And during her night duty shift, the agency staff nurse, was directed by the night manager to work in the nursery department, despite the agency staff nurse indicating to the night manager that she was not experienced in working in a nursery department.

It also later emerged that the deceased babies died of a fluid overload during the blood transfusion.

8.3.2 Incident 2: On January 2015, a doctor reported that a mother had collapsed in the nursery department in the morning.
The doctor on call was informed by the nursing staff that the mother collapsed.

On her arrival, the doctor found the patient still lying on the floor, face down with no nurse attending to her.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 62 [Wednesday, 27 March 2019 There was no vital sign monitoring carried out on the patient, no basic life support measures implemented nor was there any attempt made to see if the patient was alive or dead.
The doctor on call activated the red box alarm but found the nursing staff very unhelpful and they claimed that the patient was already discharged.

The patient was then managed and then sent for a CT scan.

The doctor on call viewed this incident in a very serious light and therefore requested an investigation into the incident.

It is unclear if an investigation into the incident took place.
8.3.3 Incident 3: On 27 December 2016, a female patient was admitted in the emergency care department with complaints of headache and neck stiffness.

She was nursed in the emergency department, trolley area on a stretcher and transferred to a two bed side room in medical 2 ward on 29 November 2016.

The patient later jumped through the window of her room on the afternoon of 2 December 2016.
The patient was taken from the area in the garden where she fell to the resus area in the emergency care department and was resuscitated, intubated, ventilated and transferred to TygerBerg Hospital (TBH) in a critical condition having sustained multiple injuries.

that the patient survived the fall and was transferred back to KDH.
The Assistant Manager of Nursing was the only manager at the Hospital on the day of the incident and the rest of the managers were attending the staff year end function at a house in Eerste River.

This incident was never fully investigated by that Assistant Manager of Nursing but was instead investigated by Ms Warnick who could clearly see that the patient was not going to get the justice she deserves.
Ms Warnick made it her personal business to investigate the incident in the presence of the Operational Manager and Assistant Manager of Nursing who was ultimately the accountable person to have investigated this incident.

Through her investigation, Ms Warnick discovered that the patient suffered from symptomatic hyponatraemia linked to syndrome of inappropriate ADH release in patients with HIV.
The patient was a high risk patient as it was recorded that the patient was confused and had altered mental status yet no interventions were implemented to ensure the safety of this patient.
The nursing assessment of this patient was, throughout the admission and stay of ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 Wednesday, 27 March 2019] 63 the patient, done by a nursing assistant despite nursing assistants possessing limited educational qualifications and not being expected to make assessments on certain aspects of patients care as in the case of the patient concerned.

The nursing care of this patient was supposed to have been guided by a registered nurse or a nursing manager.
One of the recommendations of this incident was the implementation of disciplinary steps, however it is unclear if these disciplinary steps were taken against those in the wrong.

8.3.4 Incident 4: On 02 December 2016, a female patient allegedly died in the emergency care department after KCL was administered intravenously by an agency staff nurse during a night duty shift.

This patient was admitted with deep vein thrombosis and was nursed in the asthma area of the emergency care department at the time.
On the night in question, the Hospital was managed by a registered nurse from emergency care department and the patient later died.

The incident was never reported to Sister M Warnick (Sister Warnick), the champion of the adverse incidents management at the time and the Assistant Manager for the Maternal and Child Health Stream.

Rumours doing the rounds in the Hospital at the time were that the patient died of natural causes.
However, some of the porters alleged that the patient screamed so loud when she was taken to the resus area and she eventually died.

KCL has the tendency to burn, especially if it was given as a bolus and not reconstituted with saline and given as a transfusion.
Ms Bennett submitted that she asked the following questions after hearing of this incident - why was the staff nurse administrating KCL intravenously (administrating 1V medication falls under the scope of a registered nurse) and why was this drug given in the asthma area and not in the resus area where the patient could be monitored (KCL is a potentially dangerous drug that can cause arrhythmias if not given with causing through an infusion pump and where the patient could be monitored).
Ms Bennett further submitted that she does not know if the agency staff nurse and the agency she worked for were ever held accountable for this incident and for her working out of her scope of practice on that night.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 64 [Wednesday, 27 March 2019 8.3.5 Incident 5: Ms Bennett submitted that in or around February 2017 she went to the medical ward 2 to follow up some nursing students.
As she was waiting for the students, one of the doctors came to ask her to give training on medication training.

The doctor showed her a part of a prescription chart where warfarin and clexane were prescribed for a patient that was admitted with deep vein thrombosis.

These lifesaving drugs were not given for four days to the patient and the doctor made her a copy of one side of the prescription chart.
As she was perusing the prescription chart, she overheard the manager of the ward asking the doctor why she (Ms Bennett) is involved in the matter.

The following day, she went back to the doctor to get the rest of the prescription chart and more details on the patient.

The doctor then informed her that she was scolded by the manager for involving her and it is best if she let go of the incident.
Ms Bennett further indicated that she went to the pharmacy manager and explained to him what happened the previous day and to brainstorm what else they can do to ensure compliance in medication management.

The pharmacy manager told her, that he was aware of the incident since the manager already came to see me him and blamed the shading of the prescription as the reason for the drugs not being administered to the patient.
This new prescription chart was trailed for a year in that ward before it was implemented and the manager never said anything until the incident came up.

Ms Bennet submitted that she reported her concerns around the matter to the supervisor, but nothing was done.

A few months after the incident the CEO called her to a meeting to discuss the challenges that they have with training in the hospital.
Ms Bennet further explained, she brought this incident to the CEO attention as an example of the challenges that they have in terms of training in the hospital.

He agreed it was unacceptable and instructed the nursing manager to investigate the incident.

The manager and the assistant manager denied in an email that they ever knew about the incident.
She then proposed to the nursing manager to call all the parties involved to a meeting as it was clear that those managers were not going to admit to knowing about the incident.

The nursing manager refused to invite the other staff to the meeting and threatened Ms Bennett with insubordination if she did not turn up for the ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 Wednesday, 27 March 2019] 65 meeting.
Ms Bennet attended the meeting and at the meeting both managers denied knowledge of the incident.

She was interrogated by all three of them and treated as if she had committed a crime.

She indicated that she did not deserve to be treated like that.

The manager eventually admitted knowing about the incident, but nothing came of the admission.

No further investigation was done by the nursing manager and the staff involved in the incident were not held accountable for this incident.
8.3.6 Incident 6: On 20 May 2018, a patient refused to take medication from a staff nurse whom the patient alleged was drunk whilst on duty.

This incident was reported by the night duty shift leader and reported to the registered nurse that was managing the Hospital on the night in question night.

The incident occurred in surgical ward 1.

The registered nurse that managed the hospital found the staff nurse drunk and removed him from clinical duties.
She requested him to wait in the staff tea room whilst she consults with the Nursing Manager responsible for matters that occurs on night duty.

When she returned to the ward, she found that the staff nurse had absconded from his point of duty.

There is no evidence in the report that actions were taken against the staff nurse for being drunk or leaving his point of duty without permission despite both actions constituting dismissible transgressions.
In December 2016, Sister Warnick, the Assistant Manager for the Maternal and Child Health Stream, took the imitative to establish a platform where adverse incidents occurring, in the Hospital, could be discussed and remedied.

Sister Warnick discovered that most incidents were not reported nor investigated.

She became the champion of adverse incidences management and even got a register where adverse incidents were reported.
Most operational managers and staff saw the value of it and it finally got, the Hospital, to the point where managers and staff could be accountable for adverse incidents, this initiative that Sister Warnick started, were later incorporated in the Norms and Standards of the National Health Act (Act 61 of 2003).
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 66 [Wednesday, 27 March 2019 In June 2017, Sister Warnick removed herself as the champion of adverse incident management after being subjected to victimisation and abuse from certain managers.

There is nothing wrong that Sister Warnick did apart from exposing Operational Managers, Assistant Managers and the Nursing Manager for not taking accountability for the reporting and investigation of adverse incidents.
For the first time, in the history of the Hospital, there was a platform where incidents could be discussed, but the platform became dormant after Sister Warnick removed herself from driving this platform.

The Quality Assurance manager at the time often came to complain to Ms Bennett about how she struggles to get the reporting and the investigation of adverse incidents done by the relevant the managers.
To this day no adverse incidents were reported after the resignation of Sister Warnick in June 2017 and in 2018.

The staff that advocate for patient care, for fair and correct nursing processes and who would like to take hospital forward are victimised by the Nursing Manager and other Assistant Nursing Managers.
The management of adverse incidents is part of her performance plan, but she is never included nor notified of adverse incidents, especially since Sister Warnick was removed from being the Assistant Manager of Maternal and Child Health.

During the latter part of 2018, Sister Warnick, was made an offer to manage a project by the Director of KESS and her position has now evolved to that of Research Coordinator and a Quality Assurance Coordinator.
According to Ms Bennett, the Director of KESS offered her this position because her clinical competence, management style, strong advocacy for patient care and service delivery had become a threat to the lack of competence on the part of the Nursing Manager.
The Director of KESS and the CEO of KDH have on many occasions made a verbal offer, to Ms Bennet, to move to KESS and provide training in the surrounding clinics but she has refused the offer because they have failed to put the offer in writing and she could clearly see that they were trying to get rid of her.

In concluding her submissions, Ms Bennett reported that she took the initiative of getting all the role players together in compiling an SOP in order to agree upon the standard of care for patients.
Clinicians attended all the meetings pertaining to the matter but some of the relevant managers ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 Wednesday, 27 March 2019] 67 only attended the first two meetings.

She eventually compiled the SOP and presented it to her Supervisor in May 2018, to date that SOP is still not approved.
However, SOPs like the Nursing Training Forum and the Nursing Stamp, which were submitted after the SOP on the standard of patient care, were readily approved because they were driven by the personal agendas of the Nursing Manager and her friends.
Further according to Ms Bennett, an incident later occurred where a doctor connected a patient to the wrong unit, something that could have been prevented if that SOP on the standard of patient care was approved as the relevant drains could have been ordered and training carried out.
If this particular SOP had been approved, it could have resulted in the following: • • • • • Added value to patient care; Prevented adverse incidents from occurring; Reduced the length of stay of patients and freed up desperately needed beds if the low suction units were ordered as agreed upon; Improved the patients experience in terms of the care received; and Relieved the service pressure on other hospitals such as Tygerburg Hospital.
Also in concluding her submissions, Ms Bennet submitted that the following needed attention at the Hospital: • • • • • • • The ordering of name stamps for staff nurses - this constitutes irregular expenditure; Establishment of a Nurse Training Forum in the presence of a functional Skills Committee; Payment of Registered Nurses working in the Thutuzela Forensic Unit at KDH; The working hours of the Assistant Managers on the night duty shift; The transfer of two professional nurses to provide support to the Assistant Nursing Managers on the night duty shift; The assistance provided to the emergency care manager by removing specialist nurses from clinical duties; Corrupt recruitment and selection processes; ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 68 • • [Wednesday, 27 March 2019 Unresolved grievances of victimisation; and Emails to the Head of Health and the CEO of KDH reporting the victimisation of staff members.
8.4 Submissions by Ms M Warnick In her submissions Ms M Warnick, operational manager at the maternal neonatal unit briefly raised certain the issues that she had encountered with the senior management of KDH.

In this respect, she submitted that she was initially appointed as an operational manager in the neonatal unit of KDH and was later promoted to the position of operational manager, charged with supervising the maternal neonatal unit of KDH.
She further submitted that she is concerned with staffing norms at Hospital having noted that the steep growth in patient numbers.

She added that she believes the current staffing profile is insufficient to effectively manage the total number of patients that the Hospital is servicing.

Take for instance the staffing of the women’s health unit at the Hospital, which manages women with complications of early pregnancy, acute gynaecologist emergencies and second trimester abortions is so poor.
In her submissions Ms Warnick also related how in August 2016, before taking over the management of the maternal neonatal, she received an email from the attending specialist obstetrician asking why am experienced and competent staffing nurse was transferred to another area, leaving only one professional nurse to assist him with medical procedures.

She then referred the specialist obstetrician to head of nursing and a year after the specialist obstetrician raised this issue there was still no intervention.
She then raised this with head of nursing and CEO of hospital as no one else was trained in comprehensive abortion care and she received offensive response indicating that previous manager was able to manage the maternal neonatal unit with the assistance of agency nursing staff with no disruptions.

Ms Warnick indicated that she had contacted agencies but very few professional nurses want to deliver a service of this nature.
Ms Warnick also informed the Committee that from 2016 the agency staffing nurses procured were not ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 Wednesday, 27 March 2019] 69 trained in comprehensive abortion care and this is contrary to the provisions of the Termination of Pregnancy Act (Act 92 of 1996).

She added that she requested that the professional staffing nurse with experienced be transferred back, the manager and head of nursing refused to support her move back to the unit.
Ms Warnick further submitted that she had raised number of grievances, that have either dragged on or been ignored and in instances where her grievances were addressed they received an unfavourable outcome and she was informed they do not constitute as a grievance and hold no substance.

In one instance she received an unfavourable outcome in relation to a grievance where an investigation was carried out without a hearing being held around the grievance.
Ms Warnick also submitted that the management of clinical services at KDH is also poor.

She cited the following incidents as indicative of the poor nature of the management of clinical services at the Hospital: 8.4.1 She investigated a case of gross negligence involving 2 professional staff nurses who were sleeping at entrance of labour ward and made a patient to sit on a chair and the patient lost her baby.
She requested that the case be investigated but there were no consequences for staff nurses involved in the matter.

She was further excluded from the disciplinary process.
Another case happened on night duty, mother meant to undergo a caesarean and mid wife absent when baby born and anaesthetist had to attend to the baby; 8.4.2 Another case of alleged clinical negligence occurred during a night duty shift whereby a mother who had to be rushed to a theatre for C- section but because the midwife was absent when the baby was born, the anaesthetist was compelled to attend to the baby; 8.4.3 On 31 December 2018, the Hospital’s labour ward was closed because there was no staff on duty; and 8.4.3 Nurses being placed in wards without meeting the requisite qualifications and experience to properly execute the required or necessary duties.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 70 [Wednesday, 27 March 2019 In concluding her submissions, Ms Warnick, indicated that after she had raised some of these incidents she was victimised to an extent that she had to frequently see a psychologist, especially after receiving notices to attend disciplinary hearings.
8.5 Submissions by Mr A Ernstzen Mr A Ernstzen (Mr Ernstzen), a former human resources manager at KDH, reiterated most of the oral submissions he made before the Committee on 8 November 2018.

In his submissions to the Committee, Mr Ernstzen maintained that his dismissal in June 2018 was unfair more so because he was dismissed on the basis of recommendations that were made without him receiving a hearing.
He also informed the Committee that the complaints and grievances he had raised, during his submissions made before the Committee in November 2018, had even been ignored by the MEC for Health.
He also pointed he is being blamed for being incompetent in his arbitration hearing and the submissions he made before the Committee in November in 2018 also being used against him in the arbitration hearing as he is accused of speaking about the case even though he had only made submissions on the occupational health and safety concerns and the irregularities in the recruitment and selection processes of KDH without touching on the merits of his case.
Mr Ernstzen also submitted that on 25 September 2018, the MEC for Health and the Chief Director for Health, receiving support from provincial legislature, issued notices of disciplinary hearings against various staff.

He also stated that the recommendations made by PSC and DOL were being ignored by the management of KDH at the expense of the staff and patients of the Hospital.
In concluding his brief submissions, Mr Ernstzen submitted that there have been many other related incidents confirming the complaints against the senior management of KDH and he is willing to provide the Committee with more evidence to support his submissions.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 Wednesday, 27 March 2019] 71 8.6 Submissions by Ms T Konile-Mdekazi In her brief submissions, Ms T Konile-Mdekazi (Ms Konile-Mdekazi), a former manager of the substructure, briefly reiterated some of the submissions she made on 8 November 2018.
In this regard she informed the Committee that she was targeted for by the management of KDH for challenging the removal of funding from black NGOs as the substructure of health wanted to do away with the black NGOs.

And since she challenged everything about not doing away with the black NGOs she was overlooked for senior posts in which she met the short listing requirements whereas people her junior were being appointed to such posts.
She also mentioned that in February 2017 she was charged with driving a government car without authority and this charge ultimately led to her dismissal in December 2017.

Also according to Konile-Mdekazi there is “syndicate” in the substructure, starting from the Director, Deputy Director and Labour Relations, which is trying to get rid of individuals that fight for the right course of action to be taken in the Department of Health.
With regards to her dismissal, Ms Konile-Mdekazi still believes that the dismissal process was unfair as she was not invited to any disciplinary hearing.

She also added that that she had been serving the substructure for the past 14 years with a clean record.

But the labour relations officer built a case around her dismissal without being given opportunity to state her side and failing to follow proper procedures before her dismissal.

9.
9.

SUBMISSIONS BY THE PUBLIC SERVICE COMMISSION Submissions on behalf of the Public Service Commission (PSC) were led by Dr MS Lebello (Dr Lebello).

In his submissions, Dr Lebello submitted that the presentation the PSC made before the Committee on 8 November 2018 covered the step by step investigation process that the PSC undertook, in investigating the complaints contained in the petition, as well as the overall findings and specific recommendations of the PSC Report.
Dr Lebello further reiterated that the PSC investigating process involved visiting KDH and meetings with the management of KDH, Nehawu KDH Constituency Branch members, ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 72 [Wednesday, 27 March 2019 Metropol management and also involved meetings with the Western Cape MEC of Health.

He also stated that the investigation has roped in different commissioners and he had led the process of the investigation from the national level.
In his submissions, Dr Lebello, also informed the Committee that the PSC commissioner for the Western Cape had been appointed at the time of investigation but was not involved in the investigative process.

In his submissions, Dr Lebello refreshed the Committee that the PSC in its investigation and findings had come up with 12 recommendations.
He indicated that if the KDH management and the Provincial Department of Health had implemented the formulated 12 recommendations, or even half of them, the current situation would have been very different.

Dr Lebello also assured the Committee that the PSC executes its mandate without any fear and favour, and therefore PSC cannot and has not been involved in any cover up as it being alleged by the petitioner.
He further assured the Committee that PSC is there to assist with good governance, administration and best practices.

Lastly, Dr Lebello indicated that the complainant has a right if they disagree with the outcome of the investigative report of the PSC to elevate it.

10.

SUBMISSIONS BY THE DEPARMENT OF LABOUR Oral submissions on behalf of the Department of Labour (DOL) were led by Chief Inspectors, Mr D Esau and Mr T N Stana.
Both inspectors informed the Committee that following its last hearing on the petition two labour inspections were conducted, at KDH, on the 15 and 16 of November 2018.

The purpose of the labour inspections was to establish whether KDH compiles with Occupational Health and Safety Act (Act 85 of 1993) and its regulations by perusing of documents such as, registers, risk assessments, fall protection plan, medical surveillance program, training records and incidents register.
The Chief Inspectors also indicated that 38 people attended the inspection including Nehawu and the inspectors interviewed certain staff members.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 Wednesday, 27 March 2019] 73 In the submissions on behalf of the DOL Chief Inspectors also indicated that during the course of the inspection the following contraventions were noted and served on KDH 6 (six) prohibition notices; 4 (four) contraventions were identified and notice of contravention notices served; and 9 (nine) improvement notices were served for required improvement.
The Committee was further informed that on 23 January 2019, a further inspection was conducted.

It was discovered that all the 6 (six) prohibition notices served on KDH have been compiled with and out of the 4 (four) contravention notices, 3 (three) have been compiled with and out of the 9 (nine) improvement notices served, one was outstanding.

Following the inspection of 23 January 2019, there was a request from KDH for the extension of time, to comply with the two outstanding notices.
Below is report that covers some of the extensively admistrative information gathered and during the physical inspection contravention noted forming part of the feedback report: 10.1 Occupational Health and Safety Act The audit findings reported that the health and safety policy was available which was signed by the CEO in the health and safety file and displayed in the workplace.

The organogram was available on the file and displayed for each ward.
With regards to the legal appointments the following observations have been noted: 10.1.1 All the required legal appointment as per OHS Act were done and appointment letters were readily available on the health and safety file at the workplace.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 74 [Wednesday, 27 March 2019 10.1.2 Forty – five (45) health and safety representatives are in possession of certificate of training and have appointed in writing with period of service.
10.1.3 First aiders; KDH was granted exemption letter in terms of Section 40 (1) by the Chief inspector from training first aiders.

10.1.4 Fire fighters were also legally appointed in writing and still waiting for certificate of training attendance register was readily available.

10.1.5 The GMR 2 was appointed in writing.

10.1.6 Incident investigator in terms of General Administrative Regulations 9 (2) was appointed in writing.
10.2 Health and Safety Committee KDH has 581 employees therefore the Health and Safety Committee is formed by 45 (fourty-five) health and safety representatives, the Occupational Health and Safety Nurse, Maintenance Manager and Infection Procedure Control Manager as the Chairperson of the Committee.

The Health and Safety Committee meetings are held once in every month and the copies of minutes of the meetings were readily available for the year 2018, the last meeting was held on 17 October 2018.
The Health and Safety representatives are conducting the OHS monthly checklist where all the inspections records are kept in the work place.

Issues noted during inspection are discussed in the meeting, allocated to a responsible official to action and time frames for rectification of the issue specified.
10.3 Risk Assessment KDH has conducted the risk assessment for workplace to identify potential hazards and risk however it was not complete other departments were not covered (improvement notices are issued).

To be noted also, employees are informed and trained during induction training about the hazards precautionary measures put in place to minimise or eliminate them.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 Wednesday, 27 March 2019] 75 10.4 Occupational Hygiene The infection control policy was available that outlines the preventative measures in order to prevent any cross contamination of hazardous biological agent (HBA).
During the walk through inspections it was observed, at the theatre, that the Hospital is re-using the diathermy lead pencil by washing it then sterilizing it due to the reason that the Hospital has run out of stock, however, the pencil itself is meant to be used once and be disposed of.

The infection control policy did not cover the process of re-use of the diathermy lead pencil hence a prohibition notice was issued.
In terms of waste disposal, it was submitted that KDH has brought machine that crushes and sterilizes medical waste except for human waste and turns it into homogeneous dehydrated granules, and this reduces the initial volume by 75% and is packed into bags straight from the machine.

Employees does not have direct contact with the waste and permission was granted to the Hospital by the Department of Environmental Affairs in this regard.
The machine supplier is Alloro Africa Enviro Services therefore the operators of the machine are employed by them and no KDH employee is working in this area.

Averda South Africa collects and disposes the waste to Vissershok Depot.

The issue of insufficient ventilation either natural or medical in most areas of KDH was identified, therefore regular inspections and maintenance of them is critical and important especially in high risk areas.

A contravention notice was therefore issued in this respect.
10.5 Training Proof of training and information for health and safety representatives and fire fighters was readily available.

The medical waste crusher machine is operated by the employees from the supplier and they are in possession of training certificates as the operators.

And the Hospital does conduct induction training to new employees about health and safety of the workplace.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 76 [Wednesday, 27 March 2019 10.6 Incident Investigation KDH is reporting the incident in terms of Compensation for Occupational Injuries and Diseases Act (Act 130of 1993 (COIDA) by completing the WCL 2 form for injury and WCL 1 form for diseases for compensation.
It indicated that a copy of Annexure 1 (one) as per General Administrative Regulations 9 was available, however it was observed that the form is not properly completed because they are remarks from the Chairperson of Health and Safety Committee and Health and Safety representatives.

Moreover, KDH has failed to report the incidents for investigations, as some employees have contracted diseases like TB and an improvement notice was issued in this regard.
10.7 Occupational Health Surveillance Programme KDH is conducting vaccination for Hepatitis B to its employees, the last one was conducted in October 2018.

The medical waste room was noisy due to the operation of the medical waste crusher machine, however there was no noise survey conducted in order to determine if employees may be exposed noise level of 85 Db and a contravention notice was therefore issued in this regard.
10.8 Contractor Management KDH has several outsourced activities with the following companies Cleaning Services-Pronto Cleaners; Catering-Universal Catering; Security-Comwezi Security; Alloro Enviro Services- Waste crusher; and Waste disposal-Averda South Africa.

10.9 Emergency Preparedness The emergency plan was clearly displayed in the offices and in each ward and the assembly point was visible without any obstruction.

The emergency exit doors are designed to open outwardly without any obstruction.
With regards to the fire incident that happened on 24th April 2018 in the training room, the following was gathered: ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 Wednesday, 27 March 2019] 77 10.9.1 On the first day of inspections, 15 November 2018, an inspector asked in the presence of everyone about the fire incident and no one knew about it.

An inspector again before the walkthrough inspections asked about it again no one knew.
Until the 16 November 2018, two officials confirmed that there was indeed fire incident in the training room and people were evacuated out of the building.

10.9.2 When the Acting CEO was asked in person, she said that according to the investigations conducted the fire was triggered by the faulty wires from the air conditioner that resulted into fire.
10.9.3 The service provider detected the root cause and replaced the faulty part and continued inspections will be conducted at least twice a year to prevent reoccurrence.

The fire inspection certificate was not produced for the whole Hospital.

An inspector requested the report on the fire, however no report was submitted and an issued.

KDH conducted an emergency evacuation drill on the 6th March 2018 improvement notice was from different departments and according to the report it was successful.
10.10 Other The Hospital could not provide the certificate of fire test/inspection compliance for the whole Hospital, it only produced for Area D surgical ward first floor and lifts and improvement notice issued.

The OHS Act and Regulations 85 of 1993 were also displayed in an accessible area for the employees.

10.11.

Physical Inspection 10.11.1 Drinking water The water and cold was tested and approved safe for human consumption for the whole KDH in terms of SAN 241.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 78 [Wednesday, 27 March 2019 10.11.2 Signage Symbolic signs were conspicuously displayed at the workplace for chemical storage room emergency exits and fire extinguishers etc.

Each ward has a notice board that clearly indicates the sister in charge, health and safety representative and fire fighters.
10.11.3 Personal Protective Equipment During the walkthrough inspection it was noted that porters were not wearing any protective clothing as they receive patients with infectious diseases and are in contact with bleeding patients that have not been treated yet and a prohibition notice was accordingly served for the porters to use the proper protective wear.
Employees allege that they struggle to get the masks to protect themselves against infectious disease, however, they are expected to work with the infectious patients, an employer sometimes runs out of stock sometimes.
10.11.4 Change Rooms Facilities and Environmental and General Safety During the walkthrough inspection there was a note discovered that was displayed in the children wards inside the sluice reading as follow: “Dear Mothers, ensure that you close the bin lid properly after you throw away the diapers” and this note gives access to the public to enter a restricted area.
10.11.5 Prohibition Notice Issued Each department has its own dining room for the employees with enough tables and chairs, however lockers for safe keeping for employee’s personal belongings were not sufficient, and an improvement notice was issued in this respect.

Contaminated linen is kept in the sluice rooms from each ward thereafter it is collected and sent to Tygerberg Hospital for cleaning and sterilisation.
The contami-nated linen is not stored in different colour coded bags for easy identification and to avoid the spread of HBA, an improvement notice was therefore issued.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 Wednesday, 27 March 2019] 79 10.11.6 Issued The MSDS in terms of HCSR 9a were readily available for each hazardous chemical.
As regards the toilets in the maternity ward, the first one is working properly, however the roof is leaking, the second one is not flushing properly, an improvement and contravention notice was issued.

During the walk through in the theatre department there was an unlocked deep freezer located in the passage way where they keep human medical waste.

The Hospital was issued with a prohibition notice to keep the human waste in a separate lockable area.
Further during the walkthrough inspections, it was noted that the sharp containers were not mounted on the wall in some wards, an improvement notice was issued.

Some windows and the toilet cover were broken in some areas.

There were roof leakages in the maternity ward and at the theatre, and in terms of environmental regulations for workplaces the employer should keep walls leak free, a contravention notice was issued.
It was noted that KDH has too much stock laying around the passage ways which could result in serious injuries of trip and falls and poor housekeeping, an improvement notice was therefore issued.

10.11.7 Machinery The certificate of compliance with electrical installations for the whole Hospital which were issued in 2011 immediately before occupying the Hospital premises were readily available.

KDH oxygen is supplied by Afrox and the oxygen tank is situated in the separate lockable area.
All the ventilators gas cylinders are also serviced by Afrox and all the service records were perused.

The boilers are in good working order, the certificate of registration in the Department of Labour and inspections records were available.

The KDH hospital kitchen has gas installation used by the outsourced catering company, the certificate of conformity for gas installation in terms of pressure equipment regulations was available at the Hospital.
The maintenance department indicated that the kitchen occupants are keeping records and inspectors are to schedule another inspection for the outsourced companies at the ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 80 [Wednesday, 27 March 2019 Hospital.

Other medical machines are sent to Tygerberg Hospital to the Clinical Engineers for inspections and repairs and most importantly for calibration.
10.11.8 Other Legislation KDH is in good standing with COIDA, all incidents are reported by the Hospital using the WCL 2 for injuries and WCL 1 for occupational disease.

Employees were interviewed and they all confirm that the induction training was conducted and that the PPE was issued free of charge and that most employees were part of the one on one interviews that were conducted whilst walk through inspections was conducted.
And that during the walk through inspections it was observed that the Hospital does not have enough space keep their stock, the stock was laying outside the hospital.

Some of the stock is packed in the passages and in dining room areas.

With regards to the new patient’s admissions the Hospital also struggles to get placement to the ward as the Hospital is always full, the Hospital resolve on mixing infectious and pregnant patients etc.

without prior consultation with the infection control professional.
KDH needs serious intervention in terms of creating more space as the congested space could lead to unexpected cross contamination of infectious disease.

11.

THIRD HEARING ON THE SIGOGO PETITION The third and final hearing on the petition was held, on 20 March 2019 at Parliament.
11.1.1 Committee Members and Officials The following Committee Members attended the third hearing on the petition: The third hearing on the petition was attended by the following Committee Members: ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 Wednesday, 27 March 2019] 81 11.1.2 Hon D L Ximbi, ANC, Western Cape (Chairperson of the Committee); 11.1.3 Hon JM Mthethwa, ANC, Kwa-Zulu Natal, 11.1.4 Hon H E Mateme, ANC, Limpopo; 11.1.5 Hon G G Oliphant, ANC Northern Cape, and 11.1.6 Hon B Engelbrecht, DA, Gauteng The Committee Members present at the hearing on the petition were supported by the following Committee officials: 11.1.6 Mr N Mkhize, the Committee Secretary; 11.1.7 Adv.
T Sterris, the Committee Researcher; 11.1.8 Mr S H Njikela, Senior Parliamentary Legal Adviser; 11.1.9 Mr M Nkwali, Researcher, Office of the NCOP Chairperson; and 11.1.10 Ms F L Lombard, Parliamentary Communications Officer.

11.2 Stakeholders The following representatives of the Nehawu Khayelitsha constituency branch and witnesses appeared before the Committee during the hearing: 11.2.1 Mr A Ernstzen, Nehawu Member and Witness; and 11.2.2 Ms T Konile-Mdekazi, Nehawu Member and Witness.
The following representatives of the Department of Labour appeared before the Committee at the hearing: 11.2.3 Adv.

M Ntleki, Head of the Director General’s Office; and 11.2.4 Mr. T N Stana, Chief Inspector.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 82 [Wednesday, 27 March 2019 12.
SUBMISSIONS BY THE CONSTITUTIONAL AND LEGAL SERVICE OFFICE OF PARLIAMENT The submissions by the Constitutional and Legal Service Office of Parliament (CLSO) were led by Mr S H Njikela (Mr Njikela), Senior Parliamentary Legal Adviser.

In his submissions to the Committee Mr Njikela briefly outlined the legal proceedings the Committee had followed in issuing the summons against the WCDH in compelling it to appear before the Committee.
And he further gave clarity on the powers of the Committee to issue the summons in this regard.

In his submissions, Mr Njikela also briefly provided a background on the refusal of WCDH to appear before the Committee.

He reported that the WCDH had expressed an opinion that it does not believe that the Committee has the powers to request the WCDH to appear before it.

And in arriving at this conclusion the WCDH placed reliance on the legal opinion which it apparently sourced from senior counsel.
Mr Njikela also indicated that because CLSO had not been provided with a copy of this legal opinion and he is therefore not in a position to comment on it.

Mr Njikela further submitted, that the WCDH, in refusing to appear before the Committee, had quoted extensively from the legal opinion provided by senior counsel and has reached this decision by means of a preferred interpretation given that it does not refer the Committee to any specific section of the Constitution that relates to section 69.
Further according to Mr Njikela the Constitution, specifically section 69(d), and the Rules of NCOP, specifically Rules 229 – 236 regulating the handling of petitions by the NCOP, give the Committee an open mandate to receive petitions and to call to account all officials (in particular section 92(2) of the Constitution), whom may have to answer to it.
He elaborated, that the powers conferred on the Committee in the Constitution are clear and are not limited to legislative matters which is in contradiction with the legal reasoning relied upon by the WCDH.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 Wednesday, 27 March 2019] 83 Mr Njikela also indicated that subsequent to the summons being issued, the WCDH raised the two reasons for declining the Committee’s invitation.
First, the WCDH submitted that it had been informed of the late serving of summons the day before the date of the hearing, citing that this was unreasonable.

Second, when the summons was re-issued for the WCDH to appear before the Committee, the WCDH had difficulty in appearing before the Committee, citing that the primary responsibility of the NCOP is a legislative one and as such the Committee cannot assume any greater powers then those conferred on the NCOP.
Mr Njikela added that as a result of the legal advice the WCDH had received, it then issued an application to court to interdict the Committee from enforcing such summons, indicating that it was notified, of the summons the day before the second hearing on the petition.

In concluding his submissions, he informed the Committee that it is not prevented from proceeding with the hearing despite the absence of the WCDH or in light of the notice of motion of the WCDH to review and set aside the summons.
He further informed the Committee that it can conclude its consideration of the petition and formulate recommendations based on the evidence or submissions that have already been tendered during the past hearings.

He also highlighted that the WCDH has been given opportunities to appear before the Committee to make submissions on the petition and for its reasons the WCDH has chosen not to appear before the Committee.
Mr Njikela also pointed out that whether the Committee has the powers to summon the WCDH to appear before it, is a matter that still needs to be determined by a court of law He added that there is difference of legal opinion between Parliament and Western Cape Government regarding the powers of the Committee to summon the Western Cape Government.
Also in concluding his submissions, Mr Njikela reiterated that there is nothing preventing the Committee from proceeding with the hearing on the bases of the information that is already available to it to conclude its deliberations and make recommendations in relation to the petition.
The matter that the WCDH has taken to court will be postponed sine die (without a date) and the matter will still need to go to court to debate the issue of whether the Committee has the powers to summon the Western Cape Government to appear before it.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 84 [Wednesday, 27 March 2019 13.

SUBMISSIONS BY THE DEPARMENT OF LABOUR Oral submissions on behalf of the Department of Labour (DOL) were led by Adv Ntleki (Adv.
Ntleki) and supplemented by Mr D Esau.

In his submissions, Adv Ntleki, explained that the purpose of the DOL appearing before the Committee is for it to provide clarity on the role of inspectors and the mandate of the DOL in relation to unfair labour practice as there were concerns in the previous hearing about its role in assisting with matters related to unfair labour conduct.
In this respect, Adv Ntleki submitted that having listened to submissions and analyzed the subject matter of the petition, two issues raised in the petition need to be clarified in relation to the DOL and its mandate.

The first being the issues related to health and safety and second being the issue related to the allegations of unfair labour practices or unfair labour conduct on the part of the management of KDH.
He also submitted that an element of the Occupational Health and Safety Act (Act 85 of 1993) (OSHA) and its regulations are also implicated in the petition, pointing out that the issues relating to OSHA were no longer merely allegations since a recent inspection by the DOL had proved that KDH is not compliance with certain elements of this legislation.
He added that the allegations of unfair labour practices on the part of the management of KDH management, on the other hand, remained allegations because they had not been proved.

Further in his submissions Adv Ntleki notified the Committee that the DOL operates through labour inspectors and these inspectors are part of the Inspectorate Section, and are appointed in terms of section 63 of the Basic Conditions of Employment Act (Act 75 of 1975).
And the inspectors perform certain functions within a specified legal framework.

Adv Ntleki also submitted that inspectors cannot be involved in the resolution of disputes relating to unfair labour practice disputes.
He further indicated that are there are certain institutions such as the bargaining council which deal specifically with dispute mechanisms agreed upon by the people within that sector and in this ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 Wednesday, 27 March 2019] 85 case the relevant bargaining council is the Public Health and Social Development Sector Bargaining Council.

And once a bargaining council is involved, the role of DOL becomes limited.
As such the role of inspectors is limited to the health and safety of the particular institutions it has been assigned to and there is no other institution that can actually exercise these powers except the inspectors under the directorship of the Chief Inspectors.

He also explained that there is a legal document which initiates a legal process for labour inspectors called a compliance order.
In his submissions, he further reiterated that issues of unfair labour practices fall within the purview of the bargaining council and inspectors have no jurisdiction when it comes to issues of unfair labour practices.

Adv Ntleki advised that where there is a dispute in a sector, the employee in that sector will need to refer the matter to that specific bargaining council then a dispute can be declared.
In practice the process starts with addressing the issue of unfair labour practices with the employer and the employee does this by submitting a grievance, the grievance gets investigated (depending on the outcome).

If the grievance is unresolved, it is then referred to the executive authority and depending on the outcome of the executive authority and if the employee feels the matter remains unresolved, the matter will then be referred to the bargaining council by the employee.
And during this whole process the labour inspectors are not involved and as they are not mandated by law to be involved.

Adv Ntleki also pointed out there are also other institutions that are created to actually deal with disputes around unfair labour practices such as the Commission for Conciliation, Mediation and Arbitration (CCMA), Public Service Commission (PSC) and the Labour Court.

However, the Labour Court can only be approached when all the other processes have been exhausted.
In concluding his submissions, Adv Ntleki submitted that it is difficult for the DOL to get involved in issues of unfair labour practices since it does not have the powers to investigate such conduct.
However, he indicated that the DOL does not send people away when they come to it ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 86 [Wednesday, 27 March 2019 for assistance in relation to issues of unfair labour practices but it instead advises on the processes that must be followed in order to get the issues resolved by the relevant institution.
He gave assurance that he will try to communicate with the relevant bargaining council, and at the same time indicating that it must be noted that the bargaining council is an independent institution and that the DOL is not mandated to conduct oversight over it, in an attempt to find out whether there has been any matter from KDH referred to the bargaining council and where the matter has been referred to the bargaining council, to also find out what has been done so far.
Further in concluding his submissions, Adv Ntleki indicated that it will be important for KDH to have referred the issues relating to unfair labour practices to the relevant bargaining council as there is a process that is prescribed on referring matters to the bargaining council.

And the DOL does not play a role in these processes.
He also advised that the Committee invite the relevant bargaining council and request is to explain what it has done in relation to resolving the unfair labour practice issues raised in the petition.

In his brief supplementary submissions to the Committee, Mr Esau submitted that after the hearing of the 28 February 2019, he requested the inspectors to go back to KDH and investigate the issues around the building that nearly caught fire and to also inspect the electrical installations at KDH.
The feedback report showed that there was compliance after the incident and also proper electrical installation.

He further submitted there was an approved inspection of authority specifically on the electrical side and they had received confirmation from an electrical expert who inspected the electrical installation at KDH and declared it safe and issued a certificate of compliance in this regard.
Mr Esau also informed the Committee that a risk assessment is being done, which will outline the risks at KDH and interventions in place to deal with such risks.

He also explained that inspections are carried out in two ways.

First, during an inspection, the inspectors can request certain documents which are prescribed by law and expected to be kept by employer for auditing purposes.
Second, an inspection can take the ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 Wednesday, 27 March 2019] 87 form of a walk through and this type of inspection can be done by, for instance, checking on the location of fire extinguishers at an institution and if they are not in the right place the inspector will note it as non- compliance or contravention in terms of OSHA.
He also indicated that during a walk through inspection, inspectors have an obligation to interview employees and to be accompanied by the safety officers residing within the institution itself and trade unions.

14.

SUBMISSIONS BY MR A ERNSTZEN Mr A Ernstzen (Mr Ernstzen), a former human resources manager at KDH, reiterated most of the oral submissions he made before the Committee on 8 November 2018 and 28 February 2019.
He also made brief submissions in relation to the fire that took place and the electrical compliance certificate issued following the fire in question.

He submitted that he has seen a letter issued by the Fire Chief setting out seven (7) to nine (9) issues that point to non-compliance on the part of KDH and the cut off dates for these issues to be addressed and these issues were never addressed despite the cut-off date at the end of November 2017.
He further submitted that at some point there was a fire near one of the training rooms for staff members and at that time there was no fire training and fire marshals or evacuation process.

Mr Ernstzen concluded his submissions in stating that the management of KDH had been negligent in taking time to resolve the issues highlighted by the Fire Chief and indicated he had learnt from other KDH employees that they have not seen the electrical compliance certificate reportedly issued after the fire.

15.
OBSERVATIONS AND KEY FINDINGS The Committee made the following observations and key findings in relation to the various submissions made in relation to the subject matter of the petition: 15.1 The Committee noted the refusal by the Western Cape MEC for Health, Head of the Department of Health of Western Cape, Acting Chief Executive of KDH and Substructure Office of KD ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 88 [Wednesday, 27 March 2019 to attend all of the three hearings on the petition on grounds that the Committee is acting outside of the powers afforded to it by the Constitution.
15.2 Nehawu contends it has followed all the correct procedures before submitting a petition to the NCOP but there has been no intervention from the MEC of Health.

15.3 In its Report, the PSC found that there was merit in most of the allegations made by Nehawu however, the severity and veracity of some of the conclusions drawn by Nehawu were contestable.
15.4 According to the Department of Labour, some of the individual cases raised in the petition are purely administrative in nature and it is not clear if all the labour processes were followed and lead to the cases being referred to the bargaining council or the Commission on Conciliation Mediation and Arbitration or even the Labour Court, were followed.
15.5 The Department of Labour can play a direct role in the resolving two of the issues raised in the petition, namely the issues of employment equity and occupational health and safety.

But the department cannot investigate issues of unfair labour practices since it does not have the powers to investigate such matters.
15.6 There are other institutions that are created and mandated to deal with disputes relating to unfair labour practices such as the Commission for Conciliation, Mediation and Arbitration, Public Service Commission and the Labour Court.

15.7 During the inspection conducted by the Department of Labour, it was discovered KDH was not in compliance with certain elements of the Occupational Health and Safety Act (Act 85 of 1993) when it recently conducted an inspection at the institution.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 Wednesday, 27 March 2019] 89 15.8 According to CLSO, the Committee may proceed with the hearing on the petition on the basis of the information that is already available to it and that will enable it to conclude its deliberations on the petition and make suitable recommendations.

15.9 The issue of whether the Committee has the powers to summon the WCDH to appear before it is a matter that still needs to be determined by a court of law.

16.
RECOMMENDATIONS Following extensive deliberations on the submissions made during the hearing on the petition, the Committee recommends as follows: 16.1 The Committee strongly recommends that Parliament’s CLSO provide the Committee with a thorough legal opinion relating to the refusal by the Western Cape MEC for Health, Head of the Department of Health of Western Cape, Acting Chief Executive of KDH and Substructure Office of KD to attend all of the three hearings on the petition on grounds that the Committee is acting outside of the powers afforded to it by the Constitution.
16.2 The Committee recommends that Parliament’s CLSO assist the Committee in identifying processes, such as commissioning an inquiry, in order to conduct further forensic investigations into public health care facilities in the Western Cape.

16.3 The Committee recommends that Parliament’s CLSO look into the apparent contradictory and unethical conduct of the Office of the State Law Adviser.
The said State Law Adviser acted for the Committee when a subpoena was served to secure attendance of senior officials from the Western Cape Department of Health while also issuing an urgent interdict on behalf of the senior officials of the Western Cape Department of Health.

The CLSO should recommend a way forward for the Committee.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 90 [Wednesday, 27 March 2019 16.4 The Committee recommends that during the 6Th Parliament the Select Committee on Social Services prioritie conducting oversight at all hospitals within the Western Cape.

16.5 The Committee recommends that during the 6Th Parliament the Select Committee on Public Accounts (SCOPA) call the KDH management to account on the mismanagement of funds at the Khayelitsha District Hospital.
16.6 The National Department of Health is to conduct a thorough forensic investigation into the complaints raised in the petition, in particular the complaints relating to the mismanagement of funds and corruption on the part of the management of Khayelistha District Hospital (KDH) and the harassment, victimisation, bullying and intimidation of staff members by the management of KDH.
16.7 The Office of the Health Ombud is to commission a thorough forensic investigation or Commission of inquiry aimed at conclusively determining the number of neonates, children and adult patients who have died, often due to negligence and use of inexperienced staff within the KDH.
16.8 The House is to assist the petitioners to refer the complaints relating to the poor provision of health care and treatment; the poor and unsatisfactory management of adverse incidents; and the poor state of psychiatric care at KDH to the Office of the Health Ombud for further investigation.

16.9 The South African Human Rights Commission must investigate the allegations of human rights abuse that have been levelled against KDH management.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 Wednesday, 27 March 2019] 91 16.10 The Department of Labour (DOL), through Adv.

Ntleki, is to assist the petitioners to bring the complaints relating to unfair labour practices (on the part of the management of KDH) to the Public Health and Social Development Sector Bargaining Council for their resolution.

16.11 The DOL is to investigate the complaint of poor employment equity at KDH (i.e.
the complaint that the management of KDH does not reflect the demographic composition of the community that the Hospital serves) in order to determine if the Hospital complies with the with the prescripts of the Employment Equity Act (Act No.

55 of 1998).

16.12 The DOL is to conduct regular health and safety related inspections at KDH in an effort to ensure it complies with the relevant health and safety legislation as a public health facility.
16.13 The National Department of Health should take over at the KDH until all the issues within the KDH have been resolved.

16.14 The National Department of Health, Department of Labour and Health Ombud to provide the Committee with a progress report on recommendations 16.1 to 16.12 above within 60 (sixty) days of the tabling of this Report in the House.

Report to be considered.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 92 [Wednesday, 27 March 2019 7.
REPORT OF THE SELECT COMMITTEE ON APPROPRIATIONS ON THE PUBLIC AUDIT EXCESS FEE BILL [B7-2019] (NATIONAL ASSEMBLY – SECTION 77), DATED 27 MARCH 2019 The Select Committee on Appropriations, having considered the Public Audit Excess Fee Bill [B7 – 2019], referred to it on 19 March 2019 and tagged as a section 77 Bill, reports as follows: 1.
Introduction Section 213(2) of the Constitution of the Republic of South Africa, provides that money may be withdrawn from the National Revenue Fund (NRF) only in terms of an appropriation by an Act of Parliament.

The Public Audit Excess Fee Bill, hereinafter referred as the Bill, sets out to provide that the specified excess of the audit fee of certain categories of organs of state, payable to the Auditor-General, as envisaged in the Public Audit Act, No.
25 of 2004, is, if the stated conditions are complied with, a direct charge against the NRF; and to provide for matters connected therewith.

In executing this mandate, the Select Committee on Appropriations, hereinafter referred to as the Committee, was established in terms of section 4(3) of the Money Bills Amendment Procedure and Related Matters Amendment Act, No.

13 of 2018, and herein after referred to as the Money Bills Act.
In line with section 13(2) of the Money Bills Act, the Committee has a responsibility to hold public hearings on any money bills and and report to the National Council of Provinces.

To this end, advertisements were published in national and regional newspapers from 1 to 8 March 2019, inviting general public inputs.

No submissions were received on the Bill, therefore the public hearings that were scheduled for 13 March 2019 had not taken place.
National Treasury briefed the Committee on the Bill in its entirety on 7 March 2019.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 Wednesday, 27 March 2019] 2.

Background 93 National Treasury reported that the proposed direct charge for the audit fees in excess of 1 percent against the NRF was a result of a joint proposal from the Auditor-General (AG) and National Treasury to the Select Committee on the Auditor-General (SCOAG) during the deliberations on the 2018 Public Audit Amendment Bill.
The 2018 Public Audit Amendment Bill was initiated by SCOAG and passed by Parliament in 2018 where after it was assented to by the President.

The audit fees are used to cover the AG’s expenses, finance the fixed assets and generate a surplus, which ranges from 1 to 4 per cent for working capital and general reserve requirements.

The said fees are based on the hours worked on auditee projects (audits) based upon published tariff rates per salary level of all audit staff.
Unpaid fees therefore deprive the AG of the needed cash flow to support the execution of its constitutional mandate.

However, National Treasury reported that 10 percent of the AG’s client base falls under the financially distressed category comprising a substantial amount of revenue.

These auditees are predominantly low capacity municipalities and small auditees such as museums, trusts and boards.
National Treasury further submitted that currently section 23(6) of the Public Audit Act provides that if the audit fee is in excess of 1 percent of the current and capital expenditure of the auditee, then the excess must be defrayed from National Treasury’s budget vote if it is of the view that the auditee has financial difficulty to pay the excess.
It was reported that historically, the excess audit fees to be paid from National Treasury’s budget vote, was substantially higher than the amount appropriated and thus resulted in shortfalls.

Table 1 below provides an overview of the shortfalls between 2014/15 and 2018/19.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 94 [Wednesday, 27 March 2019 Table 1: Overview of the shortfalls between 2014/15 and 2018/19.
Financial year Amount claimed Amount Additional funds Shortfalls by AG appropriated by made available NT by NT (R’million) (R’million) (R’million) (R’million) 2014/15 2015/16 2016/17 2017/18 2018/19 Total 127.02 154.86 169.33 132.67 139.29 723.17 41.86 44.08 46.28 46.28 47.74 20.00 - 35.00 150.00 - (65.17) (110.79) (88.05) (86.39) (91.55) 226.24 205.00 (441.95) National Treasury (2019) National Treasury submitted that the unpredictability of the total amount of excess audit fees made it difficult to estimate the required funding accurately.
Furthermore, it needed to fund its own operations and also other competing priorities thus putting the financial viability of the AG at risk and ultimately threatening its constitutional independence.

The direct charge against the NRF would mean that the payment to the AG would not form part of the normal appropriated funds of National Treasury but would be made by the Office of the Accountant-General directly from the NRF.
In conclusion, National Treasury reported that should the Bill not become law, the relevant provisions of the Public Audit Amendment Act of 2018, in which the principle of a direct charge is captured, will not commence and those provisions will have to be repealed or amended by Parliament.

3.

Provisions of the 2019 Public Audit Excess Fee Bill Clause 1 provides that the excess of any audit fee, envisaged in section 23(6) of the Public Audit Act, 2004 (Act No.
25 of 2004), as amended by section 10 of the Public Audit Amendment Act, 2018 (Act No.

5 of 2018), is a direct charge against the National Revenue Fund.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 Wednesday, 27 March 2019] 95 Clause 2 contains the short title of the Bill and stipulates that it takes effect on a date to be determined by the Minister of Finance by notice in the Gazette.

4.
4.

Committee Recommendation on the Bill The Select Committee on Appropriations, having considered the Public Audit Excess Fee Bill [B7 – 2019], referred to it, and classified by the Joint Tagging Mechanism as a section 77 Bill, reports that it has agreed to the Bill without amendments.

The Democratic Alliance objected to the Bill.

Report to be considered.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 96 [Wednesday, 27 March 2019 8.
REPORT OF THE SELECT COMMITTEE ON APPROPRIATIONS ON THE DIVISION OF REVENUE BILL [B5-2019], DATED 27 MARCH 2019 The Select Committee on Appropriations, having considered the Division of Revenue Bill [B5 – 2019] (National Assembly-Section 76(1)), referred to it and classified by the JTM as a Section 76(1) bill, reports as follows: 1.
Introduction and background Section 214(1) of the Constitution of the Republic of South Africa requires that every year a Division of Revenue Act should determine the equitable division of nationally raised revenue between national, provincial and local government.
In line with Section 7(1) (3) of the Money Bills Amendment Procedure and Related Matters Act (Act No 9 of 2009), as amended by Act No 13 of 2018 (the Money Bills Act); Section 27(1) of the Public Finance Management Act (Act No 1 of 1999), as amended by Act 29 of 1999, and Section 10(1) of the Intergovernmental Fiscal Relations Act (Act No.
97 of 1997), the Minister of Finance, Mr T Mboweni, tabled the 2019 annual national Budget, including the Division of Revenue Bill (the Bill) in the National Assembly (NA) on 20 February 2019.
The purpose of the Bill is to provide for – (a) the share of each sphere of government of the revenue raised nationally for the relevant financial year; (b) each province’s share of the provincial share of that revenue; and (c) any other allocations to the provinces, local government or municipalities from the national government’s share of that revenue, and any conditions on which those allocations are or must be made.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 Wednesday, 27 March 2019] 97 The 2019 Budget has been reprioritised in response to the weaker than expected economic and fiscal environment.
In order to remain within the revised expenditure ceiling, the government’s policy priorities for the 2019 Medium Term Expenditure Framework (MTEF) period that are funded through reprioritisation in the division of revenue include – Improving the implementation of the Upgrading of Informal Settlements Programme by ring-fencing funds within conditional grants; Eradicating pit latrines in schools; and Supporting the roll-out of free sanitary products to learners from low- income households.
These reprioritisations complement baselines that provide R1.97 trillion to provinces and R414.7 billion to local government in transfers over the 2019 MTEF period.

These transfers will fund basic education, health, social development, roads, housing and municipal services.

According to the previously mentioned legislative frameworks, the Bill must be processed in accordance with the procedure established by Section 76(1) of the Constitution.
Due to the limited time available to process the Bill, and in order to save costs, the Committee was briefed on the Bill by National Treasury, jointly with the Standing Committee on Appropriations, on 07 March 2019.

In addition, in compliance with section 214(2) (1) of the Constitution and Section 10 (4) of the Intergovernmental Fiscal Relations Act, the Committee consulted the Financial and Fiscal Commission (FFC) and the South African Local Government Association (Salga) on the Bill.
Furthermore, in line with Section 72 (1)(2) of the Constitution and 9 (5)(b) of the Money Bills Act, the Committee has a responsibility to hold a public hearing on the Bill each year.

To this end, adverts calling for public submissions were published in the national print media in all eleven official laguages..
The Committee received and considered written submissions ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 98 [Wednesday, 27 March 2019 from Mr E Matlala; Mr MG Buthelezi; the Rural Health Advocacy Project and the Budget Justice Coalition; as well as written and oral submissions from the Western Cape Forum for Intellectual Disability and Equal Education.
Furthermore, having considered the submission from Mr MG Buthelezi, the Committee was of the view that it was not relevant to the Bill and therefore it was not included in this Report.

The Committee also consulted the Parliamentary Budget Office (PBO).

On 13 March 2019, the Bill was passed by the National Assembly (NA) and transmitted to the National Council of Provinces (NCOP) for concurrence.
The National Council of Provinces, through the Permanent Delegates – Committee Members - briefed all nine provinces on 14 and 15 March 2019.

Members submitted provincial negotiating mandates on 20 March 2019 and final mandates on 27 March 2019, which was an indication that provinces had fully participated in the processing of the Bill, as envisaged in Section 214(2) of the Constitution.

2.
2.

The 2019 Division of Revenue allocations The Bill is a product of the South African Constitution guided by Section 214(1), which mandates that the revenue raised nationally must be shared equitably between the national, provincial and local spheres of government.

The Bill was the outcome of an extensive consultative process between the three spheres of government, which culminated in the tabling, for consideration and adoption, of the Bill in Parliament on 20 February 2019.
Over the MTEF period, after budgeting for debt-service costs, the contingency reserve and provisional allocations, 47.9 percent of nationally raised funds are allocated to national government, 43 percent to provinces and 9.1 percent to local government.

As reflected under schedule 1 of the Bill, Table 1 below shows the division of nationally raised revenue among these spheres of government.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 Wednesday, 27 March 2019] 99 Table 1: 2019 Medium Term Expenditure Framework (MTEF) Division of Revenue Column A Column B 2019/20 Forward Estimates Spheres of Government Allocation 2020/21 2021/22 National Provincial Local TOTAL (R thousand) (R thousand) (R thousand) Table 2 below shows that the total transfers to provinces amount to R612.3 billion in 2019/20, of which the provincial equitable share (PES) amounts to R505.6 billion and conditional grant allocations to R106.7 billion.
Of note is that, over the 2019 MTEF, besides the proposed reductions to some transfers, the average annual growth is still above inflation for all three spheres of government.

Also added in the total conditional grant allocation of R106.7 billion is an unallocated amount of R408 million, which are funds set aside for provincial disaster relief (R130.9 million for 2019/20) and emergency housing (R276.9 million).
In terms of the Bill’s framework, these funds will only be released once a disaster has been declared and an application for allocation of funds has been approved.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 100 [Wednesday, 27 March 2019 Table 2: Provincial equitable share, conditional grants, forward estimates per province Column A Column B Province Provincial Conditional Total Forward Provincial equitable Grants Transfers Equitable Share Estimates share allocations 2019/20 2019/20 2019/20 2020/21 2021/22 (R million) (R million) (R million) (R million) (R million) Eastern Cape 68 824 12 079 80 903 72 744 Free State 28 187 7 863 36 050 30 338 76 293 32 411 Gauteng 102 448 23 077 125 525 111 636 120 700 KwaZulu- Natal 106 014 21 137 127 151 113 370 120 324 Limpopo 58 965 9 061 68 026 62 986 Mpumalanga 41 428 8 245 49 673 44 475 Northern Cape 13 424 4 483 17 907 14 388 North West 34 973 7 551 42 524 37 694 Western Cape 51 291 12 809 64 100 55 278 Unallocated 408 408 66 779 47 389 15 309 40 325 59 115 TOTAL 505 554 106 713 612 267 542 909 578 645 From Table 2 above, it can be noted that KwaZulu-Natal has been allocated the highest equitable share over the 2019 MTEF, followed by Gauteng.
The Northern Cape receives the lowest allocation.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 Wednesday, 27 March 2019] 101 2.1 Summary of the main changes to the Bill and key considerations in transfers to provinces and municipalities This section outlines major changes in the Bill as well as key considerations in relation to transfers to provinces and municipalities.
National Treasury in its submission to the Committee indicated that the proposed reductions are far smaller than in the 2018 MTEF.

The National Treasury’s submission also indicated that allocations through the Division of Revenue transfers are higher per capita/per household to rural areas.

For instance, allocations to rural municipalities are R11 200 per household while those to metros average R4 900.
Therefore, allocations to rural municipalities per household are more than twice as much those to metros.
National Treasury further submitted that, to manage the growth of government debt, while funding priorities (including Eskom), the 2019 Budget effects reductions to some transfers as follows: • The bulk of the reduction in the provincial transfers (R3 billion) comes from the Human Settlements Development Grant (HSDG) largely due to a history of poor performance; • The reduction of R132.8 million from the provincial equitable share (PES) is offset by a salary freeze for provincial political office bearers; and • There is a reduction of R500 million in 2020/21 from the Integrated National Electrification Programme (Eskom) Grant.
Furthermore, National Treasury cited two examples of how blending conditional grant funds can leverage private financing.

The first is the Energy Efficiency and Demand Side Management Grant, which has been redesigned to allow grant funds to develop project pipelines and create a new market for private investors to scale-up retrofitting energy efficiency technology in public infrastructure.

Savings on the cost of energy will finance the upgrades.
The other relates to funding from the Comprehensive Agricultural Support Programme (CASP) Grant, which has been reprioritised to subsidise Land Bank loans to support emerging commercial farmers so that they can enter the loan market at a cheaper rate and expand production.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 102 [Wednesday, 27 March 2019 3.
Changes to provincial conditional grant frameworks In order to protect basic services funded by the PES, the major changes in the provincial conditional grant framework are as follows: 3.1 New grant The Human Resources Capacitation Grant, allocated R2.8 billion over the 2019 MTEF period, was previously a component of the indirect National Health Insurance Grant and will become a direct grant to enable provincial health departments to fill critical posts in health facilities.
3.2 Additions to grant funds 3.2.1 A sum of R200.3 million has been added to the Education Infrastructure Grant in the 2019/20 financial year.

This allocation is earmarked for the reconstruction and rehabilitation of school infrastructure affected by natural disasters in KwaZulu-Natal.

3.2.2 In addition, a sum of R2.8 billion has been added over the medium term to the indirect School Infrastructure Backlogs Grant, meant to provide for safe and appropriate sanitation at schools.
3.3 Expanded scope of grants 3.3.1 New components have been added to the Comprehensive HIV, AIDS and TB Grant.

The first component aims to strengthen the continued fight against malaria in three provinces, and the second component enables the Health Department to earmark support for community health workers.

Funding for TB has also been split out into a separate component.
The Grant is now referred to as the HIV, TB, Malaria and Community Outreach Grant, with a total baseline amount of R74.2 billion over the MTEF period.

3.3.2 The Provincial Emergency Housing Grant’s purpose is expanded in the 2019/20 financial year to include the funding of the repair of houses damaged by disasters, if the repairs are deemed to be more cost-efficient than relocating households to temporary shelters.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 Wednesday, 27 March 2019] 103 3.4 Grant funding reprioritisation 3.4.1 The unallocated funds within the Comprehensive Agricultural Support Programme Grant amounting to R271.5 million in the 2019/20, R295.8 million in the 2020/21 and R320.1 million in the 2021/22 financial years, have been reprioritised.
These funds will be used for the implementation of a new blended finance mechanism developed by the Department of Agriculture, Forestry and Fisheries and the Land Bank to leverage both Government and private funds to extend more affordable credit to black farmers.

3.4.2 Due to slow spending in the personnel services component of the National Health Insurance Indirect Grant, R2.8 billion has been reprioritised from this component towards the new Human Resources Capacitation Grant over the 2019 MTEF period.
3.5 Baseline reduction A baseline reduction of R3 billion (R1 billion and R2 billion from the 2020/21 and 2021/22 financial years, respectively) in the Human Settlements Development Grant is being effected over the 2019 MTEF period.

This baseline reduction is meant to stabilise the growth of national debt.
3.6 Ring-fencing of grant funds 3.6.1 R2.5 billion of the Human Settlements Development Grant allocation is ring-fenced over the MTEF period to upgrade human settlements in mining towns in six provinces.

This R2.5 billion is in addition to the allocations determined through the formula for this grant.
3.6.2 Through government’s efforts to intensify the upgrading of informal settlements in partnership with communities, a window with specific conditions relating to informal settlement upgrading is introduced in the Human Settlements Development Grant in 2019/20 to intensify efforts to upgrade informal settlements.

Provinces will be required to work with municipalities to identify and prioritise informal settlements for upgrading in and to submit a plan for each settlement to be upgraded.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 104 [Wednesday, 27 March 2019 This window will amount to 15 percent of the formula-based grant allocation to each province.

This window also serves as the planning and preparatory platform for the introduction of the new Informal Settlements Upgrading Grant for Provinces in 2020/21.

3.7 Grants termination 3.7.1 The Substance Abuse Treatment Grant and the Social Worker Employment Grant have been phased out.
Over the 2019 MTEF period, the allocations of these grants are being incorporated into the PES.

This will allow provinces to use their equitable share to start operating facilities built to address substance abuse and employ the social workers previously funded through these two grants.

3.7.2 The component of the Provincial Roads Maintenance Grant meant for rehabilitation of roads that are heavily used in support of electricity production, will come to an end in the 2019/20 financial year.
The funding of this component will form part of the grant’s incentive baseline as of the 2020/21 financial year.

3.8 Change from provincial to municipal transfer The Public Transport Operations Grant subsidises commuter bus services.

The Grant helps ensure that provinces meet their contractual obligations and provide services efficiently.

The public transport contracting and regulatory function may be assigned to certain metropolitan municipalities during the 2019/20 financial year.
If this occurs, the allocated R20.2 billion to this Grant will be transferred directly to the assigned municipalities.

4.

Local government allocations The below table indicates the Bill’s local government equitable share (LGES) allocation per province.

For the 2019/20 financial year, the overall equitable share allocation for local government amounts to R68.97 billion which is projected to rise to R74.68 billion and R81.06 billion for the 2020/21 and 2021/22 financial years.
In the 2019/20 financial year, the major chunk of the allocation goes to KwaZulu-Natal (19.6 percent), Gauteng (19.2 percent), Eastern Cape (14 percent) and Limpopo (13.7 percent).
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 Wednesday, 27 March 2019] 105 Table 3: Local government equitable share allocation per province Local 2019/20 2019/20 2020/21 2021/22 Government allocation Percentage Allocation Allocation Equitable Share per Province R’000 Share estimate estimate R’000 R’000 Eastern Cape Free State Gauteng 9 833 056 4 159 233 13 215 067 KwaZulu-Natal 13 547 961 Limpopo Mpumalanga 9 418 518 5 944 991 Northern Cape 1 840 628 North West 5 973 290 Western Cape Total 68 973 465 100% 74 683 326 81 061 819 4.1 Changes to local government conditional grants 4.1.1 New grant The Bill introduces the new Integrated Urban Development Grant which is specifically targeting urban local municipalities in support of spatially aligned public infrastructure investment that will lead to functional and efficient urban spaces.
The Grant aims to incentivise municipalities to invest more non-grant funding in infrastructure projects in intermediate cities.

For the 2019/20 financial year, the Grant has been allocated R856.9 million and the municipalities that qualify for this Grant will be eligible to receive a performance-based incentive component.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 106 [Wednesday, 27 March 2019 The seven municipalities that meet the qualification criteria to benefit from this Grant in the 2019/20 financial year are Polokwane, uMhlathuze, Mogale City, Ray Nkonyeni, Sol Plaatjie, Stellenbosch and Drakenstein.

But of these seven municipalities, only four qualify for the incentive component.
The four municipalities are uMhlathuze (R29.96 million), Ray Nkonyeni (R7.40 million), Stellenbosch (R10.03 million), and Drakenstein (R12.85 million).

4.1.2 Additional grant funds A sum of R2.8 billion has been added to the Public Transport Network Grant over the MTEF for the City of Cape Town’s new phase of the MyCiti public transport network, approved through the Budget Facility for Infrastructure.
This additional funding is for a new public transport corridor for the MyCiti network, which will link the under-served areas of Khayelitsha and Mitchells Plain to the city centre.

4.1.3 Expanded scope of grants With respect to the Energy Efficiency and Demand Side Management Grant, provision of 15 percent of the grant funds is made for municipalities to use for the Energy Efficiency in Public Infrastructure and Building Programme.
The programme aims to create a market to private companies to invest in large-scale retrofitting of municipal infrastructure, which will be reimbursed through the savings on energy costs achieved.

4.1.4 Change in grant allocation formula The Public Transport Network Grant allocation formula which has been in existence since the 2016/17 financial year will be changed.
A performance- based incentive component accounting for 5 percent of the allocation formula is being introduced in the 2019/20 financial year.

For a municipality to qualify for an incentive allocation, an operational municipal public transport system must exist after it has been approved by the national Department of Transport and 80 percent of their grant allocation should have been spent in the previous financial year.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 Wednesday, 27 March 2019] 4.1.5 Ring-fenced funding 107 (a) A sum of R798.5 million of the Municipal Infrastructure Grant has been ring-fenced over the MTEF period for specific sport infrastructure projects identified by the national Department of Sport and Recreation.

(b) A sum of R318.5 million of the indirect component of the Regional Bulk Infrastructure Grant will be ring-fenced in 2019/20 financial year.
These funds will be used for bulk infrastructure needed to complete the eradication of all bucket sanitation systems in formal residential areas that were in existence in 2014.

(c) A window amounting to 20 percent of the Urban Settlements Development Grant has been introduced for the upgrading of informal settlements.

The window sets a minimum amount that each city must spend on informal settlement upgrades and requires cities to work in partnership with communities.
4.1.6 Grant funding limited to existing projects The Department of Water and Sanitation has placed a moratorium on new projects funded through the Regional Bulk Infrastructure Grant.

This has been done in order to prioritise existing projects, particularly those that have been under construction for a long time.
4.1.7 Transfer of funding between conditional grants Electrification in municipalities, including in the eight metropolitan municipalities, are funded through the Integrated National Electrification Programme (Municipal) Grant.

However, the Urban Settlements Development Grant has been used by cities to implement electrification projects in informal settlements despite the grant funding not being allocated for this purpose.
To align funding to the cities’ needs, their Integrated National Electrification Programme (Municipal) Grant allocations will be incorporated into their Urban Settlements Development Grant allocation from the 2019/20 financial year.

This will allow these funds to also be used for informal settlements upgrades, making use of the ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 108 [Wednesday, 27 March 2019 skills and experience of the municipalities that implement these projects.
The baseline of the Municipal Infrastructure Grant is reduced by a total of R2.9 billion over the 2019 MTEF period to fund the new Integrated Urban Development Grant.
4.1.8 Shifting funds from departmental programme to a grant A sum of R9.7 million will be shifted from the Department of Water and Sanitation’s accelerated community infrastructure programme, which is being phased out, to the indirect component of the Water Services Infrastructure Grant (R4.4 million) and the indirect component of the Regional Bulk Infrastructure Grant (R5.3 million) over the MTEF period.
4.1.9 Reductions to baselines The Bill shows the following reductions to conditional grant baseline allocations over the 2019 MTEF: (a) Urban Settlements Development Grant The baseline of the Urban Settlements Development Grant is reduced by R100 million in 2019/20 and R100 million in 2020/21 to fund other government priorities.
(b) Integrated National Electrification Programme (Eskom) Grant The baseline of the Integrated National Electrification Programme (Eskom) Grant is reduced by R50 million in the 2019/20 and R550 million in the 2021/22 financial years, respectively, to fund other government priorities and manage the growth of the national deficit.

This indirect grant funding is allocated to Eskom to implement projects on behalf of municipalities that lack the capacity to do so.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 Wednesday, 27 March 2019] 109 5.

Submissions by stakeholders 5.1 Financial and Fiscal Commission The Financial and Fiscal Commission (FFC) agreed with the general thrust of the Bill, given the tight macroeconomic and fiscal environment, as well as with the new measures introduced to improve governance and performance of conditional grants.
The FFC recognised that government had managed to maintain real growth in the allocation of resources to the three spheres under difficult economic circumstances, but emphasised the need for greater oversight over provincial and municipal spending.

The FFC further noted the reduction in the funding of provincial conditional grants as well as their restructuring, but accepted that this was partly due to the fiscal crisis.
In local government, the FFC recognised that allocations were expected to grow modestly, and recommended that attention should be paid to greater efficiency of spending.

Government’s continuing efforts to reduce poverty through maintaining the increase in social grants was applauded, as was the allocations for economic development.
With regard to specific adjustments in the Bill, the FFC welcomed the addition of Clauses 9(4) and 10(11) as it would ensure that other departments mentioned in the conditional grant frameworks were also accountable, ensuring collaboration by all departments involved and affected, so that grants could be effectively managed to achieve their purpose.
The FFC welcomed the revision of Clause 10(6)(b) to give the transferring officer of a Schedule 5 or 6 allocation more time to submit information in the required format, as it would give national departments enough time to prepare information for the reports to National Treasury, and may also have positive effects on the quality of reported information.
The FFC further supported the addition of Clause 17(3), as it emphasised the use of service level agreements, which was important for accountability and would assist in eliminating issues of unfunded mandates and duplication.

The revision of Clause 26(3) was welcomed ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 110 [Wednesday, 27 March 2019 by the FFC, as it allowed for a more immediate response to disaster situations within the requirements of the Disaster Management Act, 2002 (Act No.
57 of 2002).

The FFC also welcomed the addition of Clause 27(2)(b), as it formalised the responsibilities of departments relative to transferring officers.This was in line with previous FFC recommendations that national and provincial departments should not neglect their leadership roles in monitoring and evaluating grants and should boost their capacity to support effective grant design, and monitor and evaluate grant implementation.
The FFC welcomed the expansion of Clause 28(1) to make reference to the Appropriations Act on transfers prior to the commencement of the Division of Revenue Act, as it improved alignment and concurrence in the implementation of government legislation regulating the same function.
The FFC further supported the revision of Clause 29(2), as it emphasised the importance of infrastructure maintenance; and a service level agreement between districts and local municipalities would address the issue of accountability, as it would clarify both the funding and expenditure responsibilities.
The FFC did not agree with the addition of Clause 27(5)(c), and was of the view that the Department of Cooperative Governance and Traditional Affairs should be allowed to manage the process of the Integrated Urban Development Grant (IUDG) without National Treasury approval, using the conditional grant framework.
With regard to the fiscal framework, the FFC welcomed the real growth in the equitable share allocation, especially to municipalities, where projected growth was at a real annual average of 5.1 percent per year over the next three years.

However, conditional grant allocations to provinces and municipalities continued to bear the brunt of the need to cut and reprioritise spending over the next three years.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 Wednesday, 27 March 2019] 111 Regarding the provincial fiscal framework, the 2019 Budget provided an estimated total provincial allocation of R1.9 trillion over the MTEF, with the composition of unconditional transfers relative to conditional grants expected to remain the same.
The FFC welcomed the incorporation of the Substance Abuse Treatment Grant and the Social Worker Employment Grant into the provincial equitable share (PES) allocation, but emphasised that the transition must be accompanied by greater oversight at inception, to minimise crowding out.
The PES allocation was expected to maintain a nominal average growth rate of 7.2 percent over the MTEF, notwithstanding a baseline cut of R340 million in 2020/21; and the FFC welcomed the fact that new priorities were kept to a minimum.

The FFC was of the opinion that thorough expenditure management should be exercised to manage the impact of cost escalation on service delivery due to low real increases in the PES.
Conditional grants continued to bear the largest burden of consolidation with a projected reduction of R5 billion over the 2019 MTEF.

The FFC’s stance was that funding should be reprioritised away from under- performing grants, while readjustment should not interfere with approved delivery plans.
With regard to the reduction of the Comprehensive Agricultural Support Programme (CASP) Grant by R887.4 million and these funds being transferred to the Land Bank for the implementation of a new blended finance mechanism; the FFC welcomed the fact that reprioritised funding remained within the sector, and recommended that provincial agriculture departments work with the Land Bank to implement this new mechanism.
However, the FFC was of the view that the reduction in the baseline of the Human Settlements Development Grant (HSDG) by R3 billion over the 2019 MTEF, would significantly affect its outputs.

Furthermore, the FFC expressed concern over the earmarking of R7.4 billion within the HSDG over the MTEF for the implementation of the informal settlements upgrade programme, as it limited provincial discretion over the implementation of housing projects.
While the FFC supported the phasing back of the Title Deeds ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 112 [Wednesday, 27 March 2019 Grant into the HSDG in 2020/21, it recommended that in future, a comprehensive evaluation of whether earmarked funding had achieved its goals, as well as the challenges encountered, had to be undertaken instead of terminating a grant simply because its predetermined life span had been reached.
The FFC supported the anticipated assignment of the public transport contracting and regulatory functions to metropolitan municipalities during 2019/20 and that R20.2 billion would be transferred directly to the affected municipalities; as it was in line with previous FFC recommendations on the devolution of the public transport function.

Further, the FFC recommended that a decision on devolution should be taken without further delay as this could affect planning and performance in those municipalities.
The FFC supported the introduction of a Human Resources Capacitation Grant to assist provincial departments of health to address critical vacant posts in health facilities, as human resources were key to the functioning of health facilities and this would address shortages of staff in the sector which in turn could improve the effectiveness of the National Health Insurance (NHI).
The FFC further noted the additional R2.8 billion allocated to the School Infrastructure Backlogs Grant (SIBG) for the replacement of pit latrines as well as to provide water in schools, but emphasised the need for effective and efficient expenditure of the additional funds, given the historical poor spending and service delivery performance of this grant.
The FFC reported that an analysis of the infrastructure value-chain revealed that a lack of oversight at key delivery points was increasing incentives to engage in fiscal misappropriation; and that the status quo mode of delivering most provincial infrastructure projects, weakened the accountability chain.
The FFC welcomed efforts by government to protect the local government equitable share (LGES), as it would go a long way in cushioning the poor against the negative effects of limited economic ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 Wednesday, 27 March 2019] 113 growth.

The local government fiscal framework was allocated R414.7 billion over the 2019 MTEF.
In nominal terms, the local government allocations would grow modestly by 8.4 percent over the MTEF, however well above the projected average MTEF inflation rate of 5.4 percent.

In real terms, the growth of local government allocations over the next three years was positive, but growth was weighed down by the poor growth of conditional grants (due to baseline cuts in the previous budget) and of fuel levy grants, envisaged to grow by 0.05 percent and 1 percent in real terms over the 2019 MTEF.
The FFC supported the introduction of the new Integrated Urban Development Grant (IUDG) for non-metro cities with the purpose of promoting spatial integration and greater leveraging of non-grant financing, as it was in line with previous FFC recommendations that grants should follow a differentiated allocation system.
The FFC further welcomed the revision of the Public Transport Network Grant (PTNG) by the introduction of an incentive element, as it was in line with the FFC’s 2014/15 recommendation which urged government to introduce performance-based incentives in the grant framework.

The FFC believed this would enhance the performance of the PTNG.
The revision of the Urban Settlements Development Grant (USDG) to ring- fence 20 percent to fund the upgrading of urban informal settlements, had been long overdue and was a step in the right direction.

However, the FFC was of the view that the basis and adequacy of the 20 percent was unclear, and that the proposed one-year testing period for this funding window before it became a stand-alone grant, may not be enough time to draw conclusions on its performance and efficacy.
The FFC welcomed the merger of the USDG and the Integrated National Electrification Programme (INEP) Grant for metros, as it would provide a basis for a holistic approach to building human settlements.

The FFC supported the expansion in the scope of the Municipal Emergency Housing Grant to include repair of houses damaged in a disaster, but emphasised the need to ensure that there is a link between the increased scope and the funding.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 114 [Wednesday, 27 March 2019 With regard to sector-specific issues, the FFC welcomed the 7.4 percent average growth in social protection expenditure, as cushioning social assistance beneficiaries was critical in compensating the poor for the adverse effects emanating from both government spending constraints in general and the fiscal consolidation adjustment.
The social protection programme therefore played a pivotal role in alleviating poverty and inequality through the provision of social grants and social welfare services for the most vulnerable groups.

The FFC further supported government in introducing new service providers in the delivery of grants aimed at minimising intermediation costs and enhancing efficiency in social spending.
The FFC commended government for the contribution of R100 billion to a blended-finance infrastructure fund over the next 10 years, as more reliable, modern, and affordable infrastructure would greatly enhance South Africa’s competitiveness and benefit both businesses and citizens, including the poor.
The FFC also welcomed the additional allocation of R3.5 billion between 2019/20 and 2021/22 for resurfacing and strengthening non-toll national roads, as it would improve the connectivity between primary and secondary road networks and enhance the mobility for goods and people, which was critical in accessing key markets and boosting trade facilitation.
5.2 South African Local Government Association (Salga) Salga reported that local government finances were in distress, as evidenced by the 145 municipalities achieving unqualified audits in 2016/17 (noted by the Auditor-General as a continued pattern of deterioration) and the fact that 40 municipalities had negative cash balances at the end of 2017/18.
In addition, revenue collection rates had reportedly declined, which negatively affected the municipal financial position and increased the debt owed by municipalities to Eskom and water boards, incurring penalties.

The number of municipalities adopting unfunded budgets had increased from 83 municipalities in 2017/18 to 113 in 2018/19.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 Wednesday, 27 March 2019] 115 It was Salga’s view that, although there was certainly money lost each year due to poor and/or mismanagement of funds, this amount was only a fraction of the funding shortfall.

Nonetheless, more concerted efforts should be put in place to reduce this.
In this respect, Salga alluded to the role that national and provincial government had played in facilitating financial mismanagement by neglecting their constitutional obligations in respect of the oversight of local government.

In addition, the rising reporting and compliance burden on local government had significantly increased operating costs, representing money that was urgently needed elsewhere, and to little effect.
With regard to the division of revenue for 2019/20, Salga reported that local government was underfunded in the current financial year by an amount of approximately R55 billion.

This included R35 billion for operating expenditure like the maintenance deficit, unfunded mandates and under-funding of the delivery of basic services from the equitable share; and R20 billion in capital expenditure compared to consolidated budget.
Salga proposed that this gap could be filled by a combination of the following: • A higher allocation of nationally raised revenue to local government; • Restructuring conditional grants in terms of flexibility and maintenance; • Review of municipal demarcation to focus on financial viability; • Concerted campaign to reduce distribution losses; • Restructuring the Social and Labour Plan (SLP) programme; • National incentives to enforce commercial customers to settle their debt; • The reduction of the reporting and compliance burden; • Removing Eskom from the municipal electricity distribution market; ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 116 [Wednesday, 27 March 2019 • Addressing confusion over the respective powers and functions between local government and other parts of government; and • Requiring other parts of government to settle their outstanding accounts with local government, and to pay their accounts timeously.
With regard to the conceptual framework, Salga proposed that the 1998 White Paper on Local Government be completely revised, as it was silent on how a situation such as the one local government currently found itself in (where the amount of money required in transfers to make it financially sustainable was simply not available) had to be addressed.
Salga was of the view that things had changed significantly during the previous 20 years and that certain assumptions underlying the White Paper were no longer accurate.

These included the following: • Actual own revenue potential fell far short of what was assumed in the White Paper.

Empirical evidence showed an approximate R50 billion shortfall in the current financial year.

• White Paper assumptions about revenue collection from the on- selling of bulk services had proven to be incorrect.
The targeted amount to be collected from the sale of electricity turned out to be an impossible one, through Eskom’s own strategy since 1998.

Bulk service costs had increased rapidly and exceeded inflation, while levying and collecting accounts on traditional authority land had proven to be extremely challenging.
Lack of maintenance (including by national departments) meant that distribution losses continued to increase, to the extent that some municipalities could never make a profit on the sale of water.

• White Paper assumptions about the ability of local government to access alternative funding options (including the municipal debt market) and alternative service delivery options had not materialised due, in part, to over-zealous regulation.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 Wednesday, 27 March 2019] 117 • The assumption that the LGES would be sufficient to enable municipalities to deliver a basic package of services to all low- income and indigent households in their areas, had also not been accurate.

Salga further reported that its 2018/19 Municipal Health Services Audit had highlighted certain challenges.
The first of which was that municipal health services did not receive priority when it came to allocation of budget as compared to other municipal services, even though it was an essential service which could lead to loss of life and burden of diseases if not rendered.
Secondly, the current equitable share allocation to district and metropolitan municipalities for municipal health and related services was R 9.31 per household per month, with not much of this allocation being transferred to municipalities given the revenue adjustment factor.

In addition, the current LGES allocation for municipal health services allowed for the allocation to be channeled to other services.
While the National Environmental Health Policy (2003) and World Health Organisation guidelines provided for the appointment of at least one Environmental Health Practitioner for every ten thousand people for provision of environmental health services or municipal health services in the case of local government, municipal health services staffing at local government currently had a backlog of approximately 70 percent, impacting negatively on service delivery.
In light of this, Salga proposed a differentiated approach to the funding of municipal health services, which should include the review of the revenue adjustment factor on municipal health services equitable share allocation and also promote improved budgeting for municipal health services by municipalities.

Salga further reported that the current structure of conditional grants was counter-productive.
This was reportedly because it was costly, particularly for smaller municipalities; the funding was unpredictable and funds were withdrawn as “punishment” for municipalities; it failed to address the actual needs in municipalities, forcing them to prioritise ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 118 [Wednesday, 27 March 2019 programmes that did not reflect local priorities; and poor maintenance was creating a huge contingent liability, undermining current service delivery efforts and the revenue model through growing distribution losses, and dis-incentivising account payments.
Salga made the following short-term recommendations to ease fiscal pressure on local government: • Municipalities needed to have an additional allocation for maintenance as a matter of urgency.

This could be achieved by restructuring (and increasing) the Municipal Infrastructure Grant to allow it to be used for maintenance, as well as allowing it to be used in any area of the municipality.
• The outstanding accounts of other organs of state must be settled in full within 90 days, that is, by the end of May 2019.

In addition, Salga recommended the following long-term policy changes to address the underlying structural problems that have created the current situation: • The creation of a working group to critically review the current architecture and funding model for local government, based on the current fiscal reality, with the aim of drafting a new White Paper for local government.
The entire conditional grant system should be overhauled to make it more flexible, cost-effective and efficient.

 The proposed restructuring of Eskom must take into account the impact of the current distribution model on municipal financial viability.

 The powers and functions of municipalities need to be finalised as a matter of urgency.

This is the only accurate foundation on which the current LGES model can be evaluated.
Long-term policy changes are required to address the underlying structural problems that have created the current situation.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 Wednesday, 27 March 2019] 119 A working group to critically review the current architecture and funding model for local government, based on the current fiscal reality of local government, with the aim of drafting a new White Paper for local government.
The entire conditional grant system should be overhauled to make it more flexible, cost-effective and efficient.

 The proposed restructuring of Eskom must take into account the impact of the current distribution model on municipal financial viability The powers and functions of municipalities need to be finalised as a matter of urgency.

This is the only accurate foundation on which the current LGES model can be evaluated.
5.3 Western Cape Forum for Intellectual Disability The Western Cape Forum for Intellectual Disability (WCFID) reported that, after they had lobbied government for 13 years and finally resorted to litigation, an order was handed down by the Cape High Court on 11 November 2010 that government had failed to take reasonable measures to make provision for the educational needs of severely and profoundly intellectually disabled children in the Western Cape; and that government should forthwith take reasonable measures to give effect to the rights of these children.
In response to the court order, the Learners with Profound Intellectual Disabilities Grant was introduced in 2017, together with a framework for its distribution.

The purpose of this Grant was to provide the necessary support, resources and equipment to identified care centres and schools for the provision of education to children with severe to profound intellectual disabilities (SPID).
While it welcomed the provision of this conditional grant, and the recognition that the court order, although limited in scope to the Western Cape, had implications for learners with SPID nationally; WCFID expressed concern that the Grant reportedly excluded the majority of the requirements of the court order.
WCFID reported that learners at special care centres continued to face compound marginalisation nationally through exclusion from state schools; ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 120 [Wednesday, 27 March 2019 insufficient and inadequately trained staff who were not accredited (many staff members did not earn the Basic Minimum Wage); high turnover of staff; lack of, or inadequate, inappropriate and sometimes unsafe, transport; and home-based centres in shacks, RDP houses, uncertain leases from churches, businesses, schools and community organisations and evictions.
WCFID further raised the following concerns: • Implementation of the Grant was not on track; • The Grant was under-spent in some provinces; and only partially implemented in others, with funds reportedly being withheld from some provinces due to under-spending; • The Grant did not achieve its stated aims: to provide access to education for learners with severe to profound intellectual disability who are denied admission to state schools; • WCFID had been unable to adequately monitor DBE performance on the implementation of the Grant, as the DBE had limited its reporting to funds transferred to provinces, without reporting on funds spent by provinces.
While commending the DBE for its willingness to engage on this matter, owning its mandate, and expressing the desired commitment to make legislative, regulatory and other amendments to enable the implementation of the court order; WCFID noted with concern that the structure of the Learners with Profound Intellectual Disabilities Grant in the Division of Revenue Bill [B5 – 2019], was similar to that of the Learners with Profound Intellectual Disabilities Grant in the 2018 Division of Revenue Act.
WCFID recommended that the Department of Basic Education (DBE) and the National Treasury restructure the Grant for the education of learners with SPID at special care centres, so that it adequately responds to the court order, in particular that it makes provision for funds to centres for the hiring of adequate staff and facilities and appropriate transport.

WCFID further recommended a review of the Grant performance.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 Wednesday, 27 March 2019] 121 In conclusion, WCFID requested the Committees on Appropriations to do the following: • • Institute the necessary measures to monitor and evaluate the DBE’s implementation of the Grant; Instruct the DBE to develop a drastic turnaround strategy to ensure that the Grant is spent timeously and appropriately; • Require the DBE to provide a comprehensive report on the implementation of the Grant annually; • Urgently investigate the possibility of an appropriate pilot to implement the court order in two provinces (Western Cape and Gauteng) with conditional grant funds that the provincial education departments were not spending, so that, at the very minimum, the DBE provided funding to centres for adequate staff and facilities as well as transport for learners at centres; and begin a process of allocating or building classrooms for learners currently at special care centres or subsidise special care centres as state schools on private property.
5.4 Equal Education In its presentation, Equal Education (EE) focused specifically on basic education financing, including allocation and expenditure trends and the performance of the national and provincial departments with regard to the delivery of school infrastructure.

EE reported that the basic education sector budget made up 14.4 percent of the total 2019/20 consolidated Budget.
This made it the fifth fastest-growing line item after higher education, debt servicing costs, social development and health.

Allocations towards the sector had remained relatively steady over the previous five years, keeping up marginally with inflation.

However, funds allocated to the national Department of Basic Education (DBE) had, over the same period, remained slow in nominal terms.

Additionally, these allocations had not kept up with inflation.
While the allocations had increased year on year, the nominal rate of increase had slowed down by an average of about ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 122 [Wednesday, 27 March 2019 4.7 percent between 2015/16 and 2019/20; leading to the DBE’s budget decreasing in real terms when inflation was taken into account.

EE expressed concern over this, especially in an environment where learner enrolments and the price of goods have increased.
EE questioned how the rollout and implementation of ICT (as envisioned in the 2019 Estimates of National Expenditure) could take place in a context where funding was not keeping up with inflation or where there were other more urgent and competing priorities?

EE further reported that the state of school infrastructure in South Africa continued to be a challenge for the basic education sector – and a threat to thousands of learners and teachers across the country.
The national and provincial departments had in the past failed to spend what little funds was allocated to them, particularly in the case of school infrastructure conditional grants.
EE felt that reduced infrastructure grants in the face of inefficient spending, woull be detrimental for those whose education experience was marred by inadequate and unsafe facilities; and it recommended that, instead of cutting funding, more should be done to hold these departments accountable and to support them in executing their mandates.
According to EE, the National Education Infrastructure Management System (NEIMS) report, released annually, demonstrated that there has been a positive correlation between the promulgation of the Norms and Standards in 2013 and improvement in school infrastructure delivery.

However, this had unfortunately not been at an acceptable pace.
The Norms and Standards set deadlines for infrastructure delivery, the first of which was 29 November 2016, by which date there should have been no schools without water, electricity and sanitation, or schools built from inappropriate materials.

EE found it unacceptable that the DBE had missed this deadline, and had also failed to completely eradicate and replace plain pit latrines, particularly in schools based in rural provinces.
EE further expressed concern over the announcement in the 2018 Budget speech that the Education Infrastructure Grant (EIG) and the School Infrastructure Backlogs Grant (SIBG), which funded the ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 Wednesday, 27 March 2019] 123 Accelerated Schools Infrastructure Delivery Initiative (ASIDI) programme, would be cut by R7 billion over the MTEF; and also that the SIBG in particular further decreased – in both nominal and real terms – between the 2018/19 and 2019/20 financial years.
However, EE welcomed the additional R2.8 billion allocated specifically to eradicate pit toilets over the MTEF.

EE was of the opinion that Treasury should not reduce the allocations for school infrastructure, but should provide direction to the DBE and provincial education departments on how best to spend their funds; and the DBE and provinces should deal decisively with non-compliant and poorly performing implementing agents.
With regard to early learning, EE had been hopeful when the President spoke during the 2019 State of the Nation address of the importance of investing in early learning so that more children could access early childhood development (ECD) facilities and services and that two years of this programme be made compulsory.
However, EE did not see the President’s bold commitments reflected in the 2019 Budget Speech - the ECD Grant remained with the Department of Social Development, with no clarity on when or how the shift to the DBE would take place; and it also remained unclear how two years of compulsory ECD for all learners in South Africa would be funded, when the ECD Grant was projected to remain almost stagnant over the next three years.
Furthermore, EE expressed disappointment that the 2019 Budget made no mention of the Early Grade Reading Study (EGRS), despite the success of the study where it was piloted in the North West Province.

With regard to the provincial equitable share (PES) formula, EE was of the view that the education component needed to be revised to consider rurality; as the cost of providing quality education in rural provinces was often much higher given their geographic location and historic under-funding.
While welcoming the continued review of the PES and the inclusion of a new data-collection methodology for the education component; EE expressed concern that there was no mention of the structure – including plans and timelines – of the review.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 124 [Wednesday, 27 March 2019 Regarding learner transport, EE reported that it had been making submissions on the Division of Revenue Bill since 2016, calling for the creation of a learner transport conditional grant.

The current provision of learner transport was funded through the PES allocations, but provinces often cited inadequate funding as one of the main reasons for not providing transport to all learners who qualify.
According to EE, National Treasury and the Department of Planning, Monitoring and Evaluation (DPME) had committed to looking into developing such a grant.

However, EE expressed concern over various aspects of governmnet’s study in this regard, of wich the outcome was mentioned in the 2019 Division of Revenue Bill.
In conclusion, Equal Education requested that the Committees do the following: • Ensure that the increases to the education sectoral budget and the DBE budget keep up with inflation; • Reverse the R7 billion cuts to school infrastructure grants over the MTEF; and ensure that the EIG and SIBG are spent effectively, with support from National Treasury; • Migrate ECD services and funds from the Department of Social Development to the DBE, as promised by the President, and ensure that the ECD conditional grant is increased in order to accommodate the expansion of the services and include two years of compulsory ECD; • Ensure that National Treasury provides funding towards the expansion of the EGRS.
The DBE must expand the EGRS coaching intervention to other provinces; • Ensure that National Treasury finalises its investigation into whether a conditional grant for scholar transport is feasible, and put this into effect; and ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 Wednesday, 27 March 2019] 125 • Ensure that the equitable share formula review process time- frames are released and made publicly available and require National Treasury and the Department of Planning, Monitoring and Evaluation to provide an update on the progress made during the review process.
5.5 Rural Health Advocacy Project The Rural Health Advocacy Project (RHAP) submitted that, in considering access to health care services by rural communities, it is important to consider the impact of pre-existing deprivation and vulnerability on service delivery.

Former homeland areas, all rural, are the most deprived in South Africa with the majority of rural people surviving on less than R33 per day.

This broader context affects the ability of people to access healthcare and attain good health.
Historical neglect of the rural areas, poor roads and access to facilities, high unemployment, food insecurity, and high school drop-out rates are examples of the broader context affecting health outcomes.

RHAP’s submission focused on the Provincial Equitable Share (PES) and the health related conditional grants i.e.

the Human Resources Capacitation Grant, the National Health Insurance Grant, and Health Facility Revitalisation Grant.
RHAP emphasised the need for government to streghten primary healthcare services and to prioritise rural districts when drafting the budget.
RHAP made the following recommendations: • Review the current fiscal relations with the view to improving the management and allocation of resources earmarked for health; • Investigate the management of current supply chain management policies within provincial departments of health; ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 126 [Wednesday, 27 March 2019 • Provinces should assess the capability of hospital and health committees to conduct facility-based oversight and ensure that the necessary funding is available to support this; and • Government should prioritise the rural healthcare system with the establishment of a rural health task team to investigate the state of delivery, specifically in rural districts.
5.6 Budget Justice Coalition The Budget Justice Coalition (BJC) comprises a range of civil society organisations including the Rural Health Advocacy Project, the Children’s Institutute at the University of Cape Town, Equal Education, Equal Education Law Centre, the Institute for Economic Justice, Oxfam, Pietermaritzburg Economic Justice and Dignity, the Public Service Accountability Monitor, Alternative Information and Development Centre, Section27, and the Studies in Poverty and Inequality Institute.
The submission from BJC focussed on education, health, social development, local government, human settlements, gender budgeting, and Parliament’s oversight role.
BJC made the following recommendations related to the above-mentioned areas: Education • Reductions in school infrastructure grants over the medium-term should be reversed, as they may have an impact on government’s ability to deliver the necessary school infrastructure and address the circumstances under which learners, especially those in rural provinces, are expected to learn.
• There needs to be a concerted effort to provide both the national and provincial departments of education with the necessary support to overcome governance and administrative challenges in respect of school infrastructure delivery.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 Wednesday, 27 March 2019] 127 • Migrate Early Childhood Development (ECD) services and funds from the Department of Social Development to the Department of Basic Education, as promised by the President.
• National Treasury should make sure that funding towards the ECD Grant is increased in order to ensure an effective two years of compulsory ECD.

• National Treasury should provide funding towards the expansion of the Early Grade Reading Study (EGRS) and the Department of Basic Education should expand the EGRS coaching intervention to other provinces.

• Government should ensure that the time-frames of the equitable share formula review process are released and made public.
National Treasury and the Department of Planning, Monitoring and Evaluation (DPME) need to provide an update on the progress made during the review process.

Health • BJC recommends an increase in the level of funding for health.

• Parliament should require National Treasury to speed up the allocation of a minimum wage for Community Health Workers so that they can be paid their dues as from 1 April 2019.
• A comprehensive financial plan for the NHI should be drafted immediately, in consultation with stakeholders, and should be based on a flexible economic scenario to ensure that sustainable funding for NHI is secured whether the country experiences low or high economic growth.

• A business plan for the NHI Grant should be published to enable better public oversight.
• National Treasury should implement cost containment measures, where necessary, that comply with human rights standards of equity, non-retrogression and minimum core obligations.

This should be done while supporting the provincial departments of health’s capacity to contain costs in a manner that will not undermine service delivery.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 128 Social Development [Wednesday, 27 March 2019 • Publish clear commitment plans to increase the Child Support Grant in line with the survivalist Food Poverty Line by February 2020.
• Publish a clear road map by the 2019 Medium Term Budget Policy Statement (MTBPS) by which the State sets out its commitment to progressively realise universal coverage of social security to all in terms of headcount and in terms of adequacy of values as required by the Constitution.

• The said road map should clearly commit to rapid extension of coverage to all people between the ages of 18 and 59 and Parliament should prioritise the Social Assistance Amendment Bill in line with the court order.
Local government • An expert panel should be appointed to undertake a study into the municipal revenue model and provide recommendations.

• Government should mitigate against the risks to service delivery provision if Eskom requests that the equitable share of indebted municipalities be paid directly to settle outstanding debts.
Gender budgeting The Budget Justice Coalition notes the recommendations contained in the submission of civil society organisations relating to Gender Based Violence to the Standing and Select Committees on Finance and support these recommendations: • Emphasise to the Minister of Finance and National Treasury that it has a crucial role to play in combating Gender-Based Violence when it comes to ensuring gender-responsive budgeting.
• Call on National Treasury to include a chapter on gender in the Budget Review with clear gender targets and indicators.

• Note that the DPME is currently conducting a synthesis evaluation of the relationship between government and the not-for-profit sector ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 Wednesday, 27 March 2019] 129 and to flag this in order to engage with the implications of the DPME evaluation as they pertain to the funding of NGO’s, particularly in light of the NAWOGO case.
• Engage Statistics South Africa in respect of the importance of official statistics when it comes to budgeting and the need for further work on crime statistics, and statistics that pertain to the realities of Lesbian, Gay, Bisexual, Transgender, Queer or Questioning, and Intersex (LGBTQI) persons.

Strengthening Parliament’s Oversight capacity Parliament must improve its own capacity to scrutinise budget proposals by filling posts within its research units, especially the Parliamentary Budget Office.
5.7 Mr E Matlala Mr Matlala submitted that the Bill should include a section on accountability of people misusing public funds without consequences.

He further submitted that the Bill should include the amendment of section 100(b) of the Public Administration Act to allow national goverment to dismiss or suspend politicians or administrators failing to account for public funds allocated to them.
He was of the view that the Bill should be amended to allow for action to be taken against those found to be involved in wrongdoing and also emphasised the need for improved accountability for allocated funds.

6.

Provincial mandates 6.1 Negotiating mandates 6.1.1 Eastern Cape was in favour of the Bill, and raised concerns.

6.1.2 Free State was in favour of the Bill.

6.1.3 Gauteng supported the Bill, and made recommendations.

6.1.4 KwaZulu-Natal supported the Bill.


6.1.5 Limpopo was in favour of the Bill, and made recommendations.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 130 [Wednesday, 27 March 2019 6.1.6 Mpumalanga was in favour of the Bill, and made recommendations.

6.1.7 Northern Cape was in favour of the Bill, with recommendations.

6.1.8 North West was in favour of the Bill 6.1.9 Western Cape did not support the Bill and provided reasons.
6.2 Final mandates 6.2.1 Eastern Cape voted in favour of the Bill 6.2.2 Free State voted in favour of the Bill.

6.2.3 Gauteng voted in favour of the Bill 6.2.4 KwaZulu-Natal supported the Bill.

6.2.5 Limpopo did not submit a final mandate.

6.2.6 Mpumalanga voted in favour of the Bill 6.2.7 Northern Cape voted in favour of the Bill 6.2.8 North West voted in favour of the Bill.

6.2.9 Western Cape did not support the Bill.

7.
Findings and observations The Select Committee on Appropriations, having considered the 2019 Division of Revenue Bill and received inputs thereon, made the following findings and observations: 7.1 The Committee noted the following new and additional conditional grants in the provincial allocations: (a) The new Human Resources Capacitation Grant amounting to R2.8 billion over the 2019 MTEF, which was previously a component of the indirect National Health Insurance Grant and now will become a direct grant to enable provincial health departments to fill critical posts in health facilities; (b) The additional R2.8 billion, which is added to the School Infrastructure Backlogs Grant to provide for safer and appropriate sanitation at schools; ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 Wednesday, 27 March 2019] 131 (c) The additional R200.3 million for the Education Infrastructure Grant which is ring-fenced for the construction and rehabilitation of school infrastructure affected by natural disasters in the KwaZulu-Natal Province; and (d) The new components which are added to the Comprehensive HIV, AIDS and TB Grant.
The first component will strengthen the continued fight against malaria in three provinces and the second will enable the national Department of Health to earmark support for community health workers.
7.2 The Committee welcomed the reprioritisation of the unallocated Comprehensive Agricultural Support Programme (CASP) Grant amounting to R271.5 million in 2019/20, R295.8 million in 2020/21 and R320.1 million in 2021/22, which will be used for the implementation of a new blended finance mechanism developed by both the Department of Agriculture, Forestry and Fisheries and the Land Bank to extend more affordable credit to black farmers.
7.3 The Committee welcomed the ring-fenced R2.5 billion for the Human Settlements Development Grant for the 2019 MTEF period to upgrade human settlements in mining towns in six provinces.

7.4 The Committee noted that the Finance Linked Individual Subsidy programme will be shifted from provincial government to the National Housing Finance Corporation.

This was done with a view to increasing the qualifying beneficiary uptake on the said programme.
7.5 The Committee noted the following new and additional conditional grants in the local government allocations: (a) The Committee welcomed the new R856.9 million Integrated Urban Development Grant, which is introduced for urban local municipalities in support of spatially aligned public infrastructure investment which will lead to functional and efficient urban spaces; and ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 132 [Wednesday, 27 March 2019 (b) Over the MTEF, R2.8 billion has been added to the Public Transport Network Grant for the City of Cape Town’s new phase of the MyCity public transport network which will link the under-served areas of Khayelitsha and Mitchell’s Plain.
7.6 The Committee noted the following redirection and/or reductions in municipal conditional grants: (a) Redirection of an amount of R2.9 billion from the Municipal Infrastructure Grant over the MTEF to fund the new Integrated Urban Development Grant; (b) Reduction of an amount of R100 million in 2019/20 and R100 million in 2020/21 from the Urban Settlements Development Grant to fund other government priorities; and (c) Reduction of an amount of R50 million in 2019/20 and R550 million in 2020/21 from the Integrated National Electrification Programme Grant to fund other government priorities.
7.7 The Committee was concerned about the capacity of some provincial departments of cooperative governance to effectively support struggling municipalities, especially in the Free State Province.
7.8 The Committee was also concerned about the following specific issues in the sphere of local government: (a) The culture of the non-payment for municipal services by communities, negative cash balances and debt owed by provincial and national departments, which lead to declining municipal revenue; (b) The heavy reliance on conditional grants by some district municipalities, confusion around the powers and functions in the sphere of local government; and (c) The continuous increase in the number of municipalities in financial distress, increase in the adoption of unfunded mandates, regression in the municipal audit outcomes and the state of financial management in local government.
7.9 The Committee noted the reprioritisation of conditional grants away from under-performing programmes and was concerned about the implications thereof for service delivery.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 Wednesday, 27 March 2019] 133 7.10 The Committee noted the submission from Salga calling for the Municipal Infrastructure Grant (MIG) allocations to be utilised for anything including maintenance of infrastructure by municipalities, and National Treasury’s view that a maintenance allocation is catered for in the Local Government Equitable Share allocation (LGES) and municipal own revenue.
7.11 The Committee noted that an incorrect list of municipalities had been erroneously submitted to National Treasury by the Department of Energy in respect of the Energy Efficiency and Demand Side Management Grant allocations and therefore a request for a technical amendment was made by the Department of Energy.

8.
Recommendations The Select Committee on Appropriations, having considered the 2019 Division of Revenue Bill, recommends as follows: 8.1 In order to ensure that the new and additional provincial conditional grants are utilised and monitored according to the conditions in the Bill – (a) The Minister of Finance, the provincial treasuries, the Minister of Health and the provincial health departments should ensure that measures, including proper monitoring and evaluation systems, are put in place to ensure that the new R2.8 billion for the Human Resources Capacitation Grant is utilised as required by the framework conditions to fill critical posts in health facilities.
This monitoring should include the new components which are added to the Comprehensive HIV, AIDS and TB Grant.
The National Council of Provinces (NCOP) will monitor progress on a regular basis; (b) The Minister of Finance and the Minister of Basic Education should ensure that measures, including monitoring and evaluation systems, are put in place to effectively spend the additional R2.8 billion for the School Infrastructure Backlogs Grant to provide for safe and appropriate sanitation at schools as required by the conditions in the framework.
This monitoring should include the R200.3 million ring-fenced for the rehabilitation of schools in the Kwazulu-Natal Province.
The NCOP will monitor progress on a regular basis; ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 134 [Wednesday, 27 March 2019 (d) The Minister of Finance and the Minister of Agriculture, Forestry and Fisheries should ensure that the provincial departments of agriculture and the Land Bank put measures, including proper monitoring and evaluation systems, in place to ensure that the funds reprioritised from the Comprehensive Agricultural Support Programme Grant, which will be used for the implementation of a new blended finance mechanism to extend more affordable credit for black farmers, are effectively spent as required by the framework.
The NCOP will monitor progress on a regular basis; (e) The Minister of Finance and the Minister of Human Settlements should ensure that measures and proper monitoring and evaluation systems are put in place for the ring-fenced R2.5 billion for the Human Settlements Development Grant to be effectively used as required by the conditions.
The NCOP should monitor progress on a regular basis; and (f) The Minister of Finance and the Minister of Human Settlements should ensure that the National Housing Finance Corporation develops a realistic implementation and monitoring plan for the Finance Linked Individual Subsidy programme to increase the qualifying beneficiary uptake, and, the NCOP should monitor progress on a regular basis.
8.2 With regard to the new and additional conditional grants to local government – (a) The Minister of Finance and the Minister of Cooperative Governance and Traditional Affairs should ensure that the new Integrated Urban Development Grant is administered and implemented as required by the framework conditions without compromising service delivery.
The NCOP should monitor pregress on a regular basis (b) The Minister of Finance and the Minister of Transport should ensure that the R2.8 billion which is added to the Public Transport Network Grant for the City of Cape Town’s new phase of the MyCity public transport network is administered ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 Wednesday, 27 March 2019] 135 and implemented as required by the framework conditions without compromising service delivery.
The NCOP should monitor pregress on a regular basis; and (c) The Minister of Finance and the Minister of Cooperative Governance and Traditional Affairs (CoGTA) and provincial treasuries should ensure that provincial departments of CoGTA have the requisite capacity to support and monitor municipalities.

This will reduce the prevalent instances of under-spending and poor performance of conditional grants, which ultimately lead to reprioritasation of certain grants.
The NCOP should monitor progress on a regular basis.
8.3 With regard to local government in general - (a) The Committee further emphasises the need for municipalities to improve their revenue management mechanisms, billing and debt collection systems, and to ensure that their budgets are aligned to their Integrated Development Plans; (b) The Minister of Cooperative Governance and Traditional Affiars, in consultation with Salga and National Treasury, should investigate whether there is still a need for the existence of district municipalities, given their heavy reliance on conditional grants and their lack of capacity to effectively support local municipalities.
The Department of Cooperative Governance should finalise its study on where there is a need for two tiers of municipalities; (c) Salga should ensure that there is value for all the training and workshops conducted in the local government, and further request the Financial and Fiscal Commission to assist by training municipal officials on budgets to better manage municipal finances and procurement processes.
8.4 The Committee concurs with the National Treasury that the Municipal Infrastructure Grant (MIG) must only be used for its intended purpose.

The Committee is of the view that maintenance of municipal assets must be budgeted for by municipalities as it is catered for in the local government equitable share and in their own revenue.

8.5 The Minister of Finance should ensure that there is a comprehensive review of a grant to check if the intended objectives were met before the grant is terminated.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 136 [Wednesday, 27 March 2019 8.6 The Minister of Finance should ensure that the National Treasury corrects the list of municipalities in the government gazette in terms of the Energy Efficiency and Demand Side Management Grant allocations for the 2019 MTEF as indicated in the letter from the Department of Energy.

9.
9.

Committee’s Recommendation on the Bill The Select Committee on Appropriations, having considered the Division of Revenue Bill [B5 – 2019] (National Assembly-Section 76(1)) referred to it and classified by the Joint Tagging Mechanism as a section 76 Bill, reports that despite the technical changes on the Energy section it has agreed to the Bill without amendments.

The Western Cape reserved its position on the Bill.

10.
10.

Conclusion The central objectives over the 2019 MTEF period are to stabilise the growth of debt as a share of GDP and to strictly adhere to the planned expenditure ceiling.

The 2019 Division of Revenue Bill reprioritises existing funds to ensure economic growth and inclusivity.

Schedule 1 of the Bill, sets out the overall amounts allocated to all three spheres of government for 2019/20, 2020/21 and 2021/22.
Therefore all three spheres of government are called upon to strengthen their monitoring and evaluation mechanisms to ensure value for money.

Parliament and provincial legislatures are also called upon to strengthen their oversight to ensure that these allocations are spent according to the approved plans and Division of Revenue Bill conditions.
This calls for a collaborative and synergic effort from all relevant bodies, be it internal or external oversight bodies to join hands and work together to ensure that these allocations are used to push back the frontiers of poverty and ensure a better life for all South Africans.

Report to be considered.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 Wednesday, 27 March 2019] 137 9.
REPORT OF THE SELECT COMMITTEE ON APPROPRIATIONS ON THE EASTERN CAPE PROVINCE’S EARLY CHILDHOOD DEVELOPMENT GRANT PROGRESS REPORT AND EXPENDITURE AS AT THE THIRD QUARTER OF THE 2018/19 FINANCIAL YEAR, DATED 27 MARCH 2019 1.
Background After having conducted two hearings, on 16 May and 15 August 2018, on the implementation of the Early Childhood Development Grant by the Eastern Cape Department of Social Development, the Select Committee on Appropriations held a third hearing with the Province on 13 February 2019.

This hearing emanated from a resolution taken by the Committee on 12 August 2018 that a follow-up hearing should be convened early in 2019.
The focus for the third hearing was to assess the progress report and expenditure as at the end of the third quarter of the 2018/19 financial year.

Present in the hearing were the National Treasury, Eastern Cape Provincial Treasury, the national Department of Social Development and the Eastern Cape Department of Social Development, led by the MEC.

2.
2.

Submission by National Treasury On the background of the Early Childhood Development, National Treasury explained that children had rapid cognitive and emotional development during the period from birth up to the start of Grade R. As a result, Early Childhood Development (ECD) played a critical role in preparing a child to thrive in primary and secondary school.
National Treasury added that ECD comprises of cognitive, emotional, physical, mental, communication, social and spiritual development of children.

Over and above having a positive impact on a child’s readiness to enter the schooling system, according to National Treasury, ECD could reduce the number of times a child repeats grades at advanced levels and minimise school dropout rates.
National Treasury further submitted that over the long term, ECD programmes were likely to yield many benefits, such as a productive workforce, reducing inequality across the richest and poorest quintiles and positive societal ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 138 [Wednesday, 27 March 2019 impacts.
The National Treasury added that given the inadequate provision of ECD services, particularly amongst poor households, a National Integrated Plan had been adopted as a South African policy in 2005.

The policy objective was to ensure that each child had access to ECD even if their parents or caregivers could not afford it.

The National Integrated Early Childhood Development Policy had been approved by the Cabinet in 2015.
Following the adoption of the ECD Policy, the Early Childhood Development Grant was established in the 2017/18 financial year to extend access to ECD services to South Africa’s children.

The purpose of the ECD Grant was to increase the number of poor children accessing subsidised ECD services using partial care facilities and through a subsidy component.
Furthermore, this was also meant to assist existing conditionally registered partial care facilities providing an ECD programme to meet the basic requirements in order to attain full registration through a maintenance component.

The key outputs of the ECD Grant subsidy component were measured against the number of poor children that benefit from ECD services which are subsidised; number of days subsidised; and number of children attending ECD services in registered centres.
Whereas the outputs of the maintenance component are measured against the number of ECD centres conditionally registered as per the registration framework; ECD centres assessed for the maintenance component; ECD centres upgraded from the maintenance component; ECD centres that moved from conditional registration to full registration as a result of the maintenance component; and the number of children that ECD centres were registered to accommodate (capacity).
With respect to the annual budget allocation, the National Treasury reported that R85.093 million (including a roll-over of R6.378 million) had been allocated to the Eastern Cape for the 2018/19 financial year.

As at the end of the third quarter, after receiving receipts, R59.871 million had been transferred to the Eastern Cape and R49.561 million was spent.

This translated to a percentage expenditure of 58.2 percent against the annual allocation of R85.093 million.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 Wednesday, 27 March 2019] 139 With regard to the subsidy component, as at the end of the third quarter, 20 429 children had benefitted for 237 days instead of 264 days, against a target of 20 472; and with regard to the maintenance component, only six ECD centres had been upgraded and/or maintained against a target of 26.

In addition, 12 ECD centres were under construction and a further eight projects were still going through procurement processes.
National Treasury further reported that R22.6 million in ECD Grant funds were surrendered by the Province after a roll-over of R6.3 million had been approved from 2017/18 funds.

The challenges, as reported by the National Treasury, included the late signing of Service Level Agreements between the provincial Department of Social Development and ECD centres due to non-alignment with the stipulated format.
Added to that, the delays in the supply chain management processes for the appointment of contractors were likely to impact negatively on the completion of all projects at the end of the financial year.

This was due to the fact that some contracts were not awarded in time due to contactors not responding to requests for quotations.

Moreover, some projects were experiencing delays due to lack of connections for services such as water and sanitation.
On a positive note, the National Treasury reported that there had been improvement in spending and performance in the third quarter.

However, the maintenance component of the ECD Grant was lagging behind.

This could result in under-spending and under-performance at the end of the financial year.

The National Treasury submitted that, as at the end of the third quarter of the 2018/19 financial year, the Eastern Cape had maintained only six out of a target of 26 ECD centre projects.
This was despite the fact that the Province indicated that they would complete the targeted 26 by the end of March 2019.

Based on the experienced delays, the Treasury submitted that they were sceptical that the target would be realised.

The Treasury also highlighted that the Eastern Cape was not in compliance with the national norm of providing subsidies for 264 days, as they were only providing subsidies for 237 days.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 140 [Wednesday, 27 March 2019 3.

Submission by Department of Social Development The Department of Social Development (DSD) reported that the Eastern Cape had been allocated a total of R78.7 million for the ECD Grant in the 2018/19 financial year, of which R72.7 million was for the subsidy component, R3.3 million for the maintenance component, and R2.7 million for the administration.
By the end of the third quarter, R48 million (66 percent) had been spent on the subsidy component; R10.1 million (30 percent) on the maintenance component; and R 588 000 (22 percent) on the administration.

The Department further reported that, by the end of the third quarter, 20 429 children, against the target of 20 472, were benefitting from the Grant for 237 days per year; and two centres had benefitted from the maintenance component out of the annual target of 26.
Despite the slow progress on the maintenance component thus far, the Department was confident that the target of 26 centres and 100 percent expenditure would be achieved by 31 March 2019.

They indicated that, by February 2019, nine centres had been completed and work had commenced on a further nine centres.

The advert for the work on the outstanding eight centres would close on 15 February, with the handover expected to take place on 1 March and all invoices expected to be paid by 26 March 2019.
The DSD reported on the challenges causing under-performance by the Eastern Cape (and the resultant mitigations), as follows: • The reviewing of the Service Level Agreements (SLAs) with ECD centres on an annual basis had caused delays; but this was being addressed by the standardisation of the signing of three year SLAs.

• There had been non-compliance with the framework requirement of 264 days, but from the 2019/20 financial year, the Province will implement the 264 days as per the grant framework.
• An incorrect code had been used in the first quarter for the 900 children who had benefited from the Grant; but the Province had since created a journal entry to correct the misallocation.
With regard to the support it provided to the Province, the DSD reported that the allocation for the maintenance component of the Grant for 2018/19 had been reduced from R12 million to R3.3 million to enable the Province ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 Wednesday, 27 March 2019] 141 to address its challenges and fine-tune its processes.

In addition, the task team continued to monitor the implementation of the project plan.
Meetings between the national and provincial teams had been held on 15 to 17 October 2018 to assess progress and provide guidance on the intervention; and site visits undertaken on 3 and 4 December 2018 and 5 and 6 February 2019, to check progress.

Another task team meeting had been scheduled for 25 February 2019.

The DSD was of the opinion that these interventions were effective and that the Province would be able to spend 100 percent of the Grant allocation by the end of the fourth quarter.
With respect to the Grant implementation in the 2019/20 financial year, the Department reported that the 2019/20 conditional grant framework had been reviewed in consultation with provinces and finalised and signed off by the Acting Director-General (DG) and submitted to National Treasury in December 2018.

Provinces were expected to submit their signed off Business Plans to the Department by 31 March 2019, and these had to be signed off by the Acting DG and submitted to National Treasury in April 2019.
In addition, a meeting with provinces to prepare for the first quarter implementation was scheduled for 26 February 2019, and quarterly meetings would be held with provinces to monitor the implementation of the Grant.

4.
Submission by Eastern Cape Department of Social Development The submission of the Eastern Cape Department of Social Development (ECDSD) covered the ECD Grant performance since the previous engagement with the Committee on 15 August 2018; progress made on implementation of the Operational Strategy for the 2018/19 financial year; the ECD Grant performance, specifically during the second and third quarter of the 2018/19 financial year; and most importantly to reflect on the challenges the Provinces was experiencing in the process of implementing the Grant.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 142 [Wednesday, 27 March 2019 With respect to financial allocation and expenditure performance, the ECDSD reported that the EDC Grant allocation had been R78.715 million (excluding roll-over funds totalling R6.378 million) in the 2018/19 financial year.

The total allocation was divided into three components: The subsidy component (R72.727 million); the maintenance component (R3.

336 million); and the administration (R2.652 million).
As at the end of the second quarter, the ECDSD had R17.378 million (42.4 percent) of the total transferred funds of R41.026 million; and at the end of the third quarter, after having received R59.871 million, the ECDSD had spent R49.558 million (63 percent).
With respect to the revised Operational Strategy for implementation of the ECD Grant in the 2018/19 financial year, the ECDSD reported that the strategy focused on governance and reporting structures within the department, but specifically on the ECD Grant management unit.
The objectives of the strategy were reported to be to address the backlog of ECD Grant projects emanating from the 2017/18 financial year; secondly to review the maintenance component operations; and under the subsidy component, to increase access to ECD centres.

Most importantly, the strategy intended to safeguard compliance with the ECD Grant framework.
In order to address the backlog and implement planned ECD Grant projects, the ECDSD reported that over and above the R3.336 million allocation meant for maintenance of 26 ECD centres, a sum of R5 million had been allocated from the provincial equitable share and this was earmarked for reducing a backlog of 38 ECD centre projects to 22.
The ECDSD further reported that a total of 64 ECD centres had been identified for infrastructure maintenance in the 2018/19 financial year, and only 48 (backlog of 22 projects and 26 projects identified for the 2018/19 financial year) had been implemented.

This was due to the high costs as estimated by the Eastern Cape Department of Public Works (ECDPW).
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 Wednesday, 27 March 2019] 143 On progress made regarding the maintenance component of Grant, the ECDSD reported that the recruitment of the technical staff – Construction Project Manager and two Project Managers – had been completed in November 2018.

According to the ECDSD, their appointment had improved technical capacity in validating technical assessments done by the ECDPW.
Moreover, the procurement strategy of the ECDSD was reported to have been revised to follow the quotation route as opposed to a tender process which resulted in a quicker turnaround time to award.

Added to that, the ECDSD submitted that they had engaged with the Eastern Cape Provincial Treasury and the ECDPW to establish a database of prequalified contractors in each district to enable a more efficient process.
With respect to the financial expenditure under the maintenance component, under the revised Operational Strategy for implementation of the Grant in the 2018/19 financial year, R1 554.4 million had been spent on constructing or maintaining nine projects; nine projects were still under construction and they would cost R1 815.9 million; and a further eight projects were on tender and the closing date was 15 February 2019 with an estimated completion date of 22 March 2019.
The estimated costs were reported to be R1 834.3 million.
The spread of projects per region was reported as follows: Three projects under construction in the Alfred Nzo District; seven projects (four completed, two under construction and one re-advertised with a closing date of 15 February 2019) in the Amathole District; four projects (one completed, one under construction, and two re-advertised with a closing date of 15 February 2019) in the Chris Hani District; five projects (two completed and three under construction) in the Joe Gqabi District; one completed project in the Nelson Mandela Metropolitan District; and six projects (one completed and five re-advertised with a closing date of 15 February 2019) in the Sarah Baartman District.
Under the subsidy component of the Grant, the ECDSD submitted that there had been increased access to ECD centres, as 20 429 children in 1 094 ECD centres were benefiting from the Grant for 237 days in the 2018/19 financial ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 144 [Wednesday, 27 March 2019 year.

According to the ECDSD, in-loco inspections had been conducted in these ECD centres whenever necessary in order to confirm Grant compliance.
The misallocations identified in the first two quarters had been rectified by creating journals of payments received from the Grant.

Over and above that, the newly adopted ECD massification strategy was a guiding systematic strategy to accelerate ECD Grant registration targeting the rural, semi-urban and urban areas, but being biased towards rural areas that were under- serviced.

The targeted districts were OR Tambo and Chris Hani.
In order to improve governance and administration, the ECDSD’s Revised Operational Strategy for implementation of the ECD Grant had led to the establishment of war rooms at both provincial and district levels and progress on payment of NPOs was evaluated on a weekly basis.

The provincial war room was chaired by the Deputy Director-General, whilst district war rooms were being chaired by the District Directors.
Moreover, the provincial war room reported to the Head of the Department and the Executive Authority.

Added to that, the ECDSD reported that monitoring of progress on NPO payments was also taking place monthly through in-year monitoring meetings.

Ad-hoc meetings and in-loco inspections were reported to be conducted whenever necessary in order to confirm Grant compliance.
Moreover, the ECDSD reported that capacity of NPO management at district level had been enhanced through transfers and the appointment of 42 officials in the Alfred Nzo, Joe Gqabi and Sarah Baartman Districts.

In order to ensure that a dedicated unit existed, the payment of the Grant was migrated from Programme 3 to the NPO Management Directorate effectively from August 2018.
Until the final upgrade of the new system, the Procure to Pay System was being used, generating weekly NPO payment reports which were assisting in analysing and managing the progress made.

The ECDSD reported the completion of a pilot project on a Revised Facilities (NGO Management) module which was aligned to the requirements of the Policy for Financial Awards and other national legislation, including the conditional grant framework.
The ECDSD further ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 Wednesday, 27 March 2019] 145 reported that capturing of the NPO processes for the next financial year was already taking place in the upgraded system, which would enhance the Department’s capacity in the monitoring of NPO performance and ultimately the processing of NPO payments.
With regard to the challenges in implementing the Grant and remedial action plans to address these, the ECDSD reported that there had been delays in implementation due to the discrepancies in the assessments conducted by the Eastern Cape Department of Public Works (ECDPW).

These assessments had been used as Bill of Quantities on the awarded tenders, but did not reflect the true state of the work to be done – which then incurred variations.
The ECDSD reported that a Construction Project Manager for the ECD Grant and two Project Managers had assumed duties on 6 November and 12 November 2018, respectively.

With this new technical capacity, re-assessments had been undertaken of the 26 ECD centres to target the completion of centres funded by the Grant.

Construction was underway on some projects and some projects were currently on tender.
Another challenge was that the lower CIDB-graded contractors delayed the hand-over process and execution of the projects due to the financial capacity of their companies and the inability to submit post-award compliance requirements.

To address this, the ECDSD, through the ECDPW, would develop a database of general building contractors in each district and the prequalified contractors would be requested to urgently provide quotations expediting the procurement process.
The tender for this database would close on 1 March 2019.

A further challenge had been the Alfred Nzo District Business Forum stopping projects in the Alfred Nzo District.

The ECDSD reported that several engagements held in an attempt to resolve the impasse had not been successful.

A political intervention had since been sought through the office of the MEC.
A meeting between the Department and the Business Forum ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 146 [Wednesday, 27 March 2019 took place in August 2018 to resolve the impasse and the Eastern Cape Provincial Treasury was now undertaking an investigation with regards to the allegations emanating from the complaints.

The ECDSD also reported that, during hand-over of some projects, the structures that had been awarded could not be renovated but rather required new construction.
These centres were now being replaced and the 2019/20 ECD conditional grant framework made an allowance for new buildings.

The ECDSD reported that it had been allocated an amount of R5.7 million for the maintenance of 31 ECD centres during the 2019/20 financial year.

The Province had engaged with the Provincial Treasury and Public Works to establish a database of pre-qualified contractors in each district to enable a more efficient process.
As mentioned above, the tender for this database would close on 1 March 2019.

In addition, the ECDSD would conduct a contractor workshop with contractors on the ICDP list.

5.
5.

Observations Having considered the submissions by the two national departments and the Eastern Cape Department of Social Development, the Committee observed the following: 5.1 The Committee noted the reduction of the maintenance component of the Grant from R12 million to R3.3 million for the 2018/19 financial year, however the allocation was expected to increase each year according to the National Treasury.
5.2 The Committee observed the approval of the National Integrated Early Childhood Development Policy in 2015 by Cabinet to broaden access to the service and to cater for the less privileged people.
5.3 The Committee observed the following expenditure trends for the period under review, which were significantly below the 25 percent expenditure benchmark: ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 Wednesday, 27 March 2019] 147 • The expenditure of 23 percent for the subsidy component in the second quarter that suddenly increased to 66 percent at the end of the third quarter of the 2018/19 financial year.
• The expenditure of 0 percent for the maintenance component that suddenly increased to 30 percent at the end of the third quarter of the 2018/19 financial year.

• The expenditure of 22 percent for administration at the end of the third quarter of the 2018/19 financial year.

However, the overall expenditure amounts to R1.725 million which is 63 percent of the allocated R3.336 million for the 2018/19 financial year.
5.4 The Committee observed the following challenges which contributed to the delays in expenditure and grant performance: • The late signing of Service Level Agreements between the provincial Department of Social Development and ECD centres.

• Delays in the supply chain management processes for the appointment of contractors.

• Some projects were experiencing delays due to lack of connections for services such as water and sanitation.
• Non-compliance with the Conditional Grant Framework on the implementation of 264 days.

5.5 The Committee noted the R22.6 million in ECD Grant funds which was surrendered by the Eastern Cape Province after a roll-over of R6.3 million was approved.

5.6 The Committee observed the slow performance in the maintenance component of the Grant in which 26 projects were set for completion by 31 March 2019 but only nine projects were completed in February.
The Committee was concerned about the feasibility of setting a target of completing all projects within a period of one month.

The main concern for the Committee is that this could result in fiscal dumping.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 148 [Wednesday, 27 March 2019 5.6 The Committee noted the support provided by the national Department, who is still continuing to monitor the implementation of the project plan, and the Committee noted the improvement in performance from 0 percent to the projected 61 percent which occurred after the intervention by the national Department.

6.
6.

Recommendations Emanating from the above observations, the Select Committee on Appropriations recommends the following: 6.1 Given the year-on-year increase of the maintenance component allocation, which was highlighted by National Treasury, the Committee recommends that the increase should be properly managed and be aligned to realistic annual performance targets, which are clearly defined, achievable and time-bound.

The Eastern Cape Provincial Legislature and the NCOP should monitor progress.
6.2 The national Department of Social and Provincial Department should ensure the implementation of the National Integrated Early Childhood Development Policy and the Provincial Legislature and the NCOP should monitor progress.
6.3 The national Department of Social Development, together with the Provincial Department should develop an exit strategy for a smooth handover to the Provincial Department once the intervention comes to an end, so that the Provincial Department can continue to maintain the same level of improvement.
6.4 The national Department of Social Development and Provincial Department should ensure the improvement of Grant expenditure and performance on a quarterly basis in order to avoid the March spike or surrendering funds at the end of the financial year.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 Wednesday, 27 March 2019] 149 6.5 The national Department of Social Development, together with the Provincial Department, should ensure that the following challenges are resolved: • Delays in signing Service Level Agreements (SLAs) with the centres; • Delays in the supply chain management process that delay the appointment of contractors; • Projects delays due to lack of connections for services such as water and sanitation; 6.6 The national Department of Social Development, together with the Provincial Department, should ensure the completion of the eight outstanding maintenance projects without incurring fiscal dumping or wasteful and fruitless expenditure.
6.7 Even though the national Department of Social Development is monitoring the intervention and supporting it, the Provincial Legislature and the NCOP should follow up this matter until there is 100 percent expenditure with the corresponding non-financial performance outputs.

Report to be considered.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 150 [Wednesday, 27 March 2019 10.
Report of the Select Committee on Finance on the Financial Matters Amendment Bill [B 1B - 2019] (National Assembly – section 75), dated 27 March 2019.

1.

Background The Financial Matters Amendment (FMA) Bill proposes amendments to the Insolvency Act, 1936, (Act No.

24 of 1936—‘‘the Insolvency Act’’), the Military Pensions Act, 1976 (Act No.

84 of 1976—‘‘the Military Pensions Act’’), the Banks Act, 1990 (Act No.
94 of 1990—‘‘the Banks Act’’), the Government Employees Pension Law, 1996 (‘‘Proclamation No.

21 of 1996—‘‘the GEP Law’’) and the Auditing Profession Act, 2005 (Act No.

26 of 2005—‘‘the Auditing Profession Act’’).

2.


Objectives of the Bill 2.1 Amendments to Insolvency Act The Insolvency Act is to be amended to provide for a process to be followed when a creditor realizes his or her security and also to provide for a power for the Master of the High Court to deal with disputes regarding preference by trustees.
2.2 Amendments to Military Pensions Act Section 9(1) of the Constitution of the Republic of South Africa Act, 1996 (‘‘the Constitution’’), provides that everyone is equal before the law and has the right to equal protection and benefit of the law.
In terms of section 9(3) of the Constitution the State may not unfairly discriminate directly or indirectly against anyone on one or more grounds, including race, gender, sex, pregnancy, marital status, ethnic or social origin, colour, sexual orientation, age, disability, religion, conscience, belief, culture, language and birth.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 Wednesday, 27 March 2019] 151 The Bill seeks to amend the Military Pensions Act, 1976 by introducing gender neutrality and recognising various forms of legal marriages for purposes of benefits for all military staff in accordance with the right to equality in section 9 of the Constitution.

2.3 Amendments to Banks Act Under the Companies Act, 2008 (Act No.

71 of 2008), state-owned companies are no longer classified as public companies.
Currently, the Banks Act only allows for public companies to establish a bank.

As a result, state-owned companies meeting the prudential and other requirements of the Banks Act are unable to apply for authorisation to establish a bank.

The Banks Act, 1990 will enable qualifying SOEs to apply for banking licenses subject to executive approval.

2.4 Amendments to Government Employees’ Pension Law .
Non-member spouses were denied the enjoyment of their share of the pension benefit immediately upon divorce or on dissolution of a customary marriage.

Instead, they had to wait until their former spouses became entitled to their own benefit, whereas the Pension Funds Act, 1956 (Act No.

24 of 1956), entitled non-members spouses to immediate enjoyment of their pension interest in other funds, governed by the Pension Funds Act, upon divorce or dissolution of a customary marriage.
The Bill seeks to amend the Government Employees Pension Law, 1996 by introducing a principle of “service reduction approach” to ensure that member’s pension pay-outs to former spouses upon divorce are not converted into debt obligation as is case under current approach.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 152 [Wednesday, 27 March 2019 3.
Committee process 3.1 On the 13 March 2019, the National Council of Provinces (NCOP) referred the Financial Matters Amendment Bill [B 1B - 2019] (National Assembly – section 75) to the Select Committee on Finance for consideration and report.

3.2 The Committee called for public submissions on the Financial Matters Amendment Bill [B 1B - 2019] (National Assembly – section 75).
3.3 On 19 March 2019, the Committee received a briefing on the Financial Matters Amendment Bill [B 1B - 2019] (National Assembly – section 75), from the National Treasury.

3.4 The public hearings on the Bill were held on 26 March 2019, and the Committee received written and oral submission from the Congress of South African Trade Unions.
3.5 The following stakeholder made written submissions but did not make oral submission (the content of the submission does not relate to the Bill): Mr. Mali George Buthelezi.

4.
4.

Inputs from stakeholder 4.1 Congress of South African Trade Unions (COSATU) The Congress of South African Trade Unions made the following submission on the Bill: COSATU supports the broad objectives and provisions of the FMA Bill with some critical proposed amendments recommended for the 6th Parliament to consider to further strengthen its public accountability and oversight provisions with regards to its proposed amendments of the Banks and Auditing Professions Acts.
The act seeks to address problems experienced in the auditing profession as seen recently where some auditors helped cover up corruption in the firms and State Owned Enterprises (SOEs) they were contracted to be playing an auditing and oversight role in.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019 Wednesday, 27 March 2019] 153 The federation strongly supports its proposed amendments of the Military and Government Employees’ Pension Acts.
These are in line with the progressive anti-discrimination values and requirements of the Constitution.

They are urgently needed to help the South African National Defence Force (SANDF) and the GEPF members, their spouses and families in their moments of need.

These must be fast tracked.

The federation supports the additional provisions in the FMA Bill, that would provide much needed checks and balances on the granting of banking licenses to SOEs.
However, COSATU feels that this checks and balances and oversight mechanisms need and must be further strengthened as outlined in their proposed amendments by the 6th Parliament.

5.

Recommendation 5.1 The Committee will continuously engage with the National Treasury to ensure effective monitoring of the implementation of the Financial Matters Amendment Bill, an approach that should facilitate an envisaged phased approach and to ensure government’s commitment to transformation of the financial sector.
The Select Committee on Finance, having considered the Financial Matters Amendment Bill [B 1B - 2019] (National Assembly – section 75), referred to it, and classified by the JTM as a section 75 Bill, reports that it has agreed to the Bill without amendments.

DA support the amendments on Insolvency Act, Military Pensions Act, Government Employees Pension Law, but are having a challenge with the amendments on the Banks Act.

Report to be considered.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 39─2019