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The challenges faced by local governments since democracy: How far have we come?
By Nondumiso Alice Sithole
MSc. Public Policy & Management; LLB. Property & Investment Practice Law Postgrad. Cert; Legislative Drafting Postgrad. Cert
Abstract
It is a well-established fact that the municipalities that comprise South Africa’s local government structure have become a focal point since the advent of democracy in South Africa, given their role in delivering on the Executive’s developmental objectives for the State (RSA, 1996). These developmental objectives require local governments to be tasked with the responsibility of developing their own development plans, in the form of Integrated Development Plans (IDP’s).
The Municipal Systems Act 32 of 2000 (RSA,2000) requires municipalities to undertake a robust integrated development planning process in the production of their IDPs. The objectives of the IDP’s are supposed to be achieved through the Service Delivery and Budget Implementation Plan’s (Ekurhuleni, 2021) of municipalities, which are the means by which effect may be given to their respective Integrated Development Plans (IDPs).
The aim of this structure is firstly, to achieve the objectives of local government as stipulated in Section 152 of the Constitution; and secondly, to give effect to its developmental duties, as required by Section 153 of the Constitution. For example, a municipality must structure and manage its administrative, budgeting and planning processes in order to give priority to the basic needs of the community, and secondarily, to promote the social and economic development of that community.
In light of what may be said to be monumental duties that fall to local municipalities, in terms of fulfilling their critical constitutional mandate, one may presume that local governments have recognized the need to ensure that they possess at least the minimum level of human capital, coupled with financial and operational efficiency. Judging by the surge of local community protest that have taken place over the past seven years, this is not, however, the case and it seems clear that the local municipalities face a crisis.
In addition, the continuous findings by the Auditor-General, that local governments are regressing, serve to solidify this fact. It is furthermore apparent that the most significant challenges lie in the human resources; governance; and monitoring and evaluation systems in municipalities.
This article aims to examine these issues, particularly human capital development, with the deficiency of effective human resources systems as an overarching causal factor. It furthermore provides recommendations that may be adopted or modified with the intention of adequately addressing the issues of service delivery at the local levels of government.
Introduction
The municipalities that comprise South Africa’s local government structure have become a focal point since the advent of democracy in South Africa, given their role in delivering on the Executive’s developmental objectives for the State. This accords with what is commonly known as developmental state theory, which is characterized by a state undertaking to prioritize economic development as its top priority, in terms of government policy, and seeking to design policies and institutions that serve to promote this broad objective and foster transformation (Pham, 2012).
Developmental local government is, in turn, defined as:
“a local government that is committed to working with citizens and groups within the community to find sustainable ways to meet their social, economic, and material needs and improve the quality of their lives” (RSA, 1998).
Its fundamental purpose is said to be the unravelling of common national development problems; the creation of new development prospects; and the achievement of shared national development targets.
Thus, developmental local governance gravitates towards creating a better future for communities through the promotion of local socio-economic development programmes and projects. To achieve this, it requires strong and capable institutions, systems, strategies, policies, processes, and procedures in order to promote grass root development. As such, it is evident that the existence of a municipality should be development oriented and our local governments should indeed be tasked with the responsibility of developing their own development plans, in the form of Integrated Development Plans (IDPs).
An Integrated Development Plan endeavours to provide an overall framework for development. Its intentions are to co-ordinate the work of local and other spheres of government into a coherent plan to improve the quality of life for all the residents living in an area (Gueli, Van Huysteen & Liebenberg, 2007). Thus, as a matter of principle, IDP should consider the existing conditions, problems, and resources available for development. Furthermore, the plan should strive for economic and social development for the area as a whole. It must set a framework for how land should be used; what infrastructure and services are needed; and how the environment should be protected (JDA, 2006).
According to the Municipal Systems Act 32 of 2000, municipalities are required to embark on a vigorous integrated development planning process in the production of their IDPs, the purposes of which IDP’s are, in turn, to be achieved through the municipalities’ Service Delivery and Budget Implementation Plans. The aim of this requirement is firstly, to achieve the objectives of local government stipulated in Section 152 of the Constitution, and secondly, to give effect to their developmental duties in terms of Section 153. This is theoretically achieved through means such as structuring and managing of the respective municipality’s administration, as well as its budgeting and planning processes, in order to give priority to the basic needs of the community, and to promote the social and economic development of the community (Ekurhuleni, 2019).
Local government is the level of government that is closest to the citizens. In essence, municipalities are best positioned and should be able to obtain and understand people’s wishes as well as the aspirations for their locality. They should also be able to identify and unlock local potential, and to mobilize resources present in their locality. As such, specific emphasis is generally placed on the developmental service delivery role of local government. These characteristics do not automatically equate to a higher quality of service delivery and legitimacy of decisions, but they certainly have the potential to do so.
Local governments are distinctive. The Constitution (RSA, 1996) enshrines “original” powers and functions to municipalities. The Constitution also provides a list of “local government matters” over which local government has authority - these are captured in Section 156. Additional powers and functions may also be transferred by national and provincial governments to local government as a sphere, or to individual municipalities. A significant part of local government’s financial authority is guaranteed through constitutional provisions that secure local government’s power to levy property rates and surcharges on fees. Lastly, the Constitution provides that local governments are entitled to an “equitable share” of nationally generated revenue, providing municipalities with a legal claim to unconditional revenue streams.
In light of the autonomous status of local government in South Africa, coupled with the fact that they have been tasked with such a significant constitutional mandate, it seems reasonable to presume that the municipalities comprising local government would long have recognized the need to ensure that they possess at least the minimum level of financial and operational efficiency (RSA, 1996: 88). Yet, municipalities still fail to generate adequate financial liquidity and are often in a state of financial chaos.
There is a rising trend that demonstrates that the “autonomous rights” of local municipalities don’t extend to operational and financial collapse, as higher levels of government can intervene and “take over” the affairs of municipalities on the verge of collapse (Ledger, 2019). This interdependence in relation to other spheres of government implies a relationship of supervision. The national and provincial governments are constitutionally entitled and mandated to supervise the performance of municipalities. National or provincial interventions are, however, relatively slow and ineffective when dealing with a failing municipality. This begs the question: how effective are the national and provincial levels of government in discharging their constitutionally mandated function of providing support, and at strengthening the capacity of municipalities to manage their own affairs and to exercise their powers and functions as stipulated in section 154(1) of the Constitution (RSA, 1996)?
Moreover, if provinces routinely monitor the work of municipalities and provide necessary support in areas where shortcomings are identified, as required by section 155(6) of the Constitution (RSA, 1996), why have so many municipalities become either partly or fully dysfunctional, particularly in this day and age in the context of a technological world? A few key factors that have led to the consistent downward spiral of South African municipalities are discussed in this paper.
Firstly, the deployment of officials from the national or provincial departments who lack the knowledge required for administration at local level. That being said, it has been observed by the author, that interventions for political purposes are, in any event, expedited when it serves a political agenda. Furthermore, the attention devoted to the administrative management of failing municipalities is not equal. This is one of the main pitfalls of the Inter-Governmental Framework (RSA, 2005) currently in place. In addition, some of the significant challenges lie not only in the availability and allocation of suitable resources but further, in the quality of those resources that are available and accessible to local municipalities, in their various forms.
The Auditor General's report showed that fruitless and wasteful expenditure had amounted to R32 billion, for the audit outcomes of the 2018 to 2019 period. (Auditor-General, 2020). One of the issues in relation to this is cadre deployment. It is an issue that is highly debated, but nonetheless taken for granted. Municipalities must be staffed with qualified individuals and cadre deployment, where insufficiently qualified cadres are deployed, starves municipalities of the qualified individuals they need. The above, in essence, is a challenge of the legislation, the Regulations on the Appointment and Conditions of Employment of Senior Managers (RSA,2000). It is often alleged that most cadres do not have governance as their priority but party-political agendas. This includes qualified officials who are placed for political reasons.
The above limitations detract from municipalities’ ability to function in the manner in which they were intended. Moreover, deficiencies are exacerbated by the fact that most significant challenges faced by municipalities can be attributed to inadequate resource apportionment to those municipalities. The author submits that central to the failure of the grass roots government is the inadequate human capital, or the lack thereof. Other ancillary issues are also examined.
Background
Local governments were established in order to assist in addressing past inequalities at a grass roots level. This level of government was, in fact, a major force leading to the national reform process which began in South African, in 1990. The process resulted in the formation of the Local Government Transition Act of 1993 (herein referred to as “the Act”). However, the Act did not provide a blueprint for a new local government system – rather it simply outlined a process for effecting a change from the apartheid regime.
The process provided for by the Act was a locally negotiated transition which has resulted in a wide and non-uniform array of municipal structures, wherein efficiency and functionality are lacking. This may be the probable cause of the current disparity in municipal structures.
Previously, the weaknesses of the Act exposed its urban bias (Anon., 1995) and lack of structured support processes to enable municipalities to manage the transition process from a transitional system of local government to a democratic non-racial system. The Act’s inadequacies are reflected in the municipal systems. While many municipalities, elected councils and administrations have, in many areas, made significant progress in addressing backlogs and extending services, they still face insurmountable constraints. There are still huge infrastructural disparities and inequalities stemming from the history of the country that remain most visible in grass roots communities.
Furthermore, the transition process has shown that the delivery of new municipal mandates is still not being achieved within the existing institutional framework. It is also becoming increasingly challenging for municipal governments to accelerate development, owing to the difficulties associated with corruption, mismanagement and maladministration, amongst other factors. Key challenges include lack of adequate finance, human resources, leadership; and technology as the main contributors to the slow developmental progress of municipalities (Beyers, 2016).
The current state of local government
Our municipalities’ maladministration permeates across all types of municipal categories including district, local and metropolitans alike. This has led to a state with failing municipalities, and it has resulted in a number of municipalities having been placed under administration since the Act came into effect. In November 2018, twenty-four municipalities were under administration (Evans, 2018). In May 2019, fifteen municipalities in the North West Province alone were placed under administration and citing financial distress; collapse of service delivery; mismanagement of funds; and maladministration as some of the grounds for their failures (Seleka, 2019).
Most recently, South Africa’s state capital, the City of Tshwane, was placed under administration due to instability, demonstrating a lack of proper management and a lack of adequate and capable human capital (SA News, 2020). Incidents such as those detailed above clearly indicate the need to reform the way in which municipalities are managed, and to further re-examine some of the pieces of legislation, including but not limited to the Municipal Structures Act (RSA, 1998), which outlines the different powers and functions of human capital in municipalities.
In terms of the Act, politicians are prohibited from interfering with the executive. They are not, however, barred from interceding with municipal priorities such as those espoused through the IDP. This causes conflict between the executive and legislative parts of councils over decision making powers (RSA, 1993).
Municipalities are strategically located. As such, they have far greater institutional control over their jurisdictions; policy makers; the entire scope of conduct of their own officials; and the communities within which they govern. This then begs the question: why do they still, notwithstanding this greater degree of control, have so many significant and public failures? It is the author’s submission that the reasons for this vary, from a shortage of adequate skills; ineffective performance management systems; outdated technology; lack of leadership commitment; and most prominently, the deficiency in the human resources of municipalities, coupled with an insufficiency of expertise in critical roles.
For the purposes of this article, it is suggested that the shortage of human capital and effective human capital is at the epicentre of municipalities failing to perform. Section 195(1)(h) of the Constitution (RSA, 1996), states that “good human resource and career-development practices, to maximize human potential, must be cultivated”. This goes to the core of what human capital development should achieve: maximizing the potential of the employees that make up local government organizations, by ensuring that there are sufficient career paths for those who perform, as far as organizational objectives are concerned.
It has been determined that the problems experienced by smaller municipalities include “procedures followed when appointing new staff members” (Du Plessis, 2016). When proper procedures are not correctly applied and followed in the appointment of new employees, one can draw the inference that persons that are ill suited to the respective jobs may be appointed and that this may, in turn, lead to ineffective performance.
It has also been suggested that municipal officials often fail to perform because they do not expect any punitive action against them. This once again points to how problematic the political-administrative interface may be and how political influence in human resource issues can be to the detriment of local government achieving its goals. Political interference in the recruitment process allows for poorly qualified individuals and cadres to be deployed to strategic positions. The testimony at the Zondo Judicial Commission, reveals that this practice is unfortunately widespread throughout all spheres of government.
Academics and practitioners have, for years, maintained that sustained competitive advantage for organizations could accrue from industry level barriers such as “technological supremacy, patent protection and government regulations” (Du Plessis, 2016). Further, they have stated that in the modern environment, requiring flexibility, speed-to-market, effectively developing and managing employees’ knowledge, experiences and skills and expertise – collectively defined as ‘human capital’- has become a key success factor for sustained organizational performance” (Du Plessis, 2016).
The argument is that it is important for any organization to maximize performance outcomes through the optimal deployment of existing resources and that one of the most important of these resources, is human capital. Furthermore, academics argue that if talented employees are not deployed where they are needed, an organization risks “missed market opportunities, poor customer service and revenue erosion” (Du Plessis, 2016).
It is clear that the modern organization requires employees that are knowledgeable, experienced, skilled and who possess the necessary expertise in their vocational areas, in their organizations, in order to optimize performance and therefore the achievement of organizational goals. It is furthermore clear that the maximization of human capital can be regarded as a critical requirement for sustained organizational performance that is imperative for its long-term success. Finally, it is also clear that failing to pay sufficient attention to the issue of human capital development could expose any organization to significant risk. This is the view taken by the author, and specifically, it is the position the author takes when it comes to local government, for the purpose of this article.
Human capital management may be defined as “the approach to staffing which perceives people as assets whose current value can be measured in terms of productivity and whose future value could be enhanced through investment”. The nexus to the above, is the term talent management as “the process through which an organization’s anticipated talent needs are planned for through acquisition or development strategies” (Thornhill, 2014:313).
The assertion is thus that public organizations, like municipalities, have to invest in their existing human capital. This is done by taking care of their developmental needs, whilst there also has to be a process of pre-planning in terms of what the institution’s future human capital needs may be, in order to facilitate sustained organizational performance. It could be argued that if municipalities made a concerted effort in terms of attracting suitably talented people, as well as creating an environment in which investing in existing human resources is part of the organizational culture, being employed by such municipalities will be regarded as a career path of choice (Du Plessis, 2016).
The role that inadequate human resources and shortage of skills plays is at the crux of municipal malperformance and remains the biggest challenge in terms of their ability to achieve efficiency. In many underperforming municipalities, this recurring theme relates, in particular, to key critical positions being occupied by individuals lacking in the essential skills required for the efficient operations of the respective municipalities, or by those managing those who are in those critical positions (Madumo, 2015).
The extensive timeframe in which rare skills are filled exacerbates productivity and efficiency, resultant is inefficient use and underutilization of those precious resources that cities are in possession of, for example, funds directed at filling of vacancies. The role of the most senior municipal official, now called the municipal manager, has changed significantly. Since 2000, each municipal council has had the authority to appoint a municipal manager, as well as other senior management personnel that report directly to the municipal manager (RSA, 2000).
This structure was designed to produce a senior management team in the municipality that understands, and operates in sync with, the political principals in its municipal executive. Although this objective is supported, the structure does have negative side-effects. Now, when there is political instability in a municipal council, there is an immediate and direct ‘knock-on’ effect on senior management. A change in local political leadership; shifts in a ruling coalition’ or even a reform within a ruling party often leads to the dismissal of the municipal manager, and sometimes even to the dismissal of managers reporting to the municipal manager (De Visser, 2009). This is evidenced by the large number of unfilled vacancies in the top two echelons of municipal administration. In some instances, municipalities have high percentages of posts at senior management level that stand vacant for months on end. Municipal administrations thus suffer from a lack of continuity at senior management level. In 2020, Gauteng’s Cooperative Governance and Traditional Affairs, and Urban Planning Department, revealed that Gauteng municipalities had a 20% vacancy rate at senior management level (Zuzile, 2020).
The highly charged political environment and profile of local municipalities and senior management positions has contributed immensely to the shift in control over appointments, from the municipal council to the internal workings of political parties. There has been, and still is, widespread concern, that the need for ‘political suitability’ has eclipsed the need for qualified and skilled senior managers in municipalities. The fact that thirty percent or more of senior municipal management has five years or less of local government experience demonstrates a demoralizing trend towards the appointment of inadequately skilled senior managers (Businesstech, 2021). It is argued that this is the result of excessive political involvement in what should be appointments on the basis of merit.
In order for local government to further improve its performance, a new balance needs to be struck between the need for the political alignment of top management with the municipal executive on the one hand, and an insistence on quality, on the other. Serious consideration should be given to removing the appointment of the second layer of management from the realm of the municipal council and leaving this to the municipal manager. It is suggested that this will assist in reducing political involvement in the administration, whilst leaving the political alignment between the municipal manager and the municipal executive intact. Clarifying the roles and functions of the Council and the municipal manager is crucial. The distinctions between the responsibility of the Council and that of the municipal manager must also be emphasized. The Council is responsible for the formulation of policies, strategies and vision, whereas the municipal manager is responsible and accountable for the implementation of Council’s strategies, plans and policies (Paulin, 2014).
The end result or effect of the failure to adhere to the abovementioned principles is that municipal departments don’t reach their objectives, as a consequence of their inefficient processes. For example, it is a common occurrence that technical posts, such as engineering posts, are occupied by staff who do not possess the appropriate technical qualifications. The damaging effects of this include instances where project managers in municipalities fail at project management undertaken on behalf of the municipalities, that in turn result in the municipalities being embroiled in litigation, with its resultant cost implications and halting of service delivery.
Interventions that may lead to increased efficiency
When considering some of the interventions that may lead to better performance, the undermentioned factors are not discussed in the order of what may be deemed to be most important. They are, in essence, all equally relevant.
An investigation of the exact extent to which municipalities’ strategies are influenced by their human capital capacity and how human capital capacity influences the development and implementation of municipal strategy, should be an ongoing exercise of their respective Human Resources departments. The Human Resources departments should undertake continuous assessments in this regard. They should also determine the extent of the influence of municipal councillors; communities; and community organizations, as significant strategic partners in municipal processes.
Consistent training and upskilling of general employees, but more acutely, of rare skills staff, is also critical to addressing the above identified major constraints, particularly in so far as they relate to shortcomings emanating directly from human resources factors. The focus on the training of staff must be particularly focused in terms of both the quantity and quality of appropriately trained personnel in these key roles. The shortage of expertise in senior positions impacts the capacity of municipalities to perform at the level that they are theoretically capable of. Skills development should become ingrained in the DNA of local governments. It is also essential that skills audit are always continuously conducted.
A key requirement in achieving organizational or municipal goals is that the modern local government organization must ensure that their employees are experienced, have the requisite skill base and knowledge, and also the vital expertise in their vocational areas within their organizations. This may have an impact in terms of contributing positively to the optimization of performance and will ultimately lead to objectives not only being met departmentally, but the municipality will also achieve its organizational goals. An organization that has knowledgeable key staff members leading lower members of staff will be able to lead appropriately and with confidence.
This kind of structure should further be bolstered with performance management systems, which should, in turn, be linked to a greater organizational system, which is related to, amongst other things, organizational performance versus individual employee outputs, and reward and recognition systems within the organization. The author has observed that the importance of motivating municipal employees has been neglected by most municipalities.
Performance management should be maintained and implemented in organizations in order to achieve, amongst others, the following objectives: the creation of a climate of motivation; the creation of a performance culture; and the linkage of remuneration with performance, amongst other things. It is the author’s submission that the existence and continued proper implementation of a good performance management system within an organization could assist both the organization, and the individual employees. Municipalities should employ the use of participatory monitoring and evaluation techniques, that focus on addressing challenges facing municipalities. Municipalities should decide on evidenced-based monitoring and evaluation framework which consults with the stakeholders and essential business partners of the municipality. (Cloete & Eigelaar-Meets, N.d.). Secondly, the adoption and use of essential, innovative technological systems that are commensurate with the needs of the economy within which the municipalities and their stakeholder operate, continues to occur at what may be termed snails-pace. The impact of technology is that it results in modifications to time spent on service delivery. Moreover, the digital and technological transformation of economies is drastically changing the way that people live in South Africa, Africa and globally. However, Smart City initiatives fail due to changes in political leadership. Smart cities are municipalities that use information and communication technologies (ICT) to increase operational efficiency, share information with the public, and improve both the quality of government services and citizen welfare. Long term projects, such as municipalities developed IDP’s, require long term commitment from municipalities.
One of the main strategies of smart cities is the promotion of innovation (Marais, 2019) and municipalities should be encouraging “innovation ecosystems” (Marais, 2019) that enable structural economic transformation, from traditional to new/IT-based economic activities. The achievement of this objective is, in the authors view, developing at a stagnant pace.
Therefore, it is perhaps necessary to seek to achieve a balance of the use of technology in places where human capital is not necessarily essential. An example of this would be the use of automatized systems at toll gates, where traffic ordinarily piles up, perhaps as a result of the fact that there is only one teller/employee who is doing their best to execute their job but only can only do what is reasonably expected of an individual. The use of an automated system may, in this instance, execute the particular task more speedily. The use of automated systems will, in turn, be aimed at easing the burden of the rate payers.
Thirdly, financial mismanagement is a devastating contributor leading to flawed municipalities, as is the case with any other enterprise. The maladministration of finances is observed to be a widely pervasive malignancy in a wide number of the economies across the African continent. Generally, political structures are not held accountable (Henao, Moyer & Namakula, 2017). A large portion of legislation such as the Municipal Systems Act 32 of 2000 and the Municipal Finance Management Act 56 of 2003 (the MFMA) (RSA, 2003) deals with directives and consequences for the administration. Legislation does not, however, place a similar obligation on politicians and collective accountability for their conduct. The exception is section 32 of the MFMA.
Whilst the legislation provides, for example, that Councillors may not interfere in the administration, who actually polices this? The author’s submission is, therefore, that legislation must be amended to make politicians accountable and liable for their actions. In the case against Bathabile Dlamini (Constitutional Court, 2018) the Court took this route. This will not, however, be a readily available solution until accountability and liability for politicians is legislated. The legislation must also address behaviour and conduct. While political bickering, whether inter-party or internal to a party is a hallmark of democracy, such conduct must be limited when it compromises service delivery. An example of this conduct is when a party walks out of a council meeting, preventing decisions from being made (Frank, 2021).
Furthermore, the under-allocation of budgets to municipalities, by Treasury for municipalities’ functional activities, can also be linked to poor performance in municipal service delivery. Municipalities deliver a range of specified services to relatively small geographically delineated areas. Municipalities should, therefore, be allocated proportionate funds by Treasury, according to the type of municipality that particular local government is.
The creation of new and larger amalgamated municipalities has also resulted in significant transition costs, due to the merging of administrations. This has resulted in municipalities being faced with challenges in terms of containing personnel expenditure. In addition, some local governments are still, to date, struggling with the fact they have limited effective tax capacity. The inhibition of their taxing powers has a negative effect in terms of generating revenue. In 2016/17, Ekurhuleni was, for example, the only city out of five large cities not to have borrowed money for capital expenditure, Sixty two percent of this was funded through internally generated funds (Mughogho, 2018). This is evidently a difficult thing to achieve. Therefore, such challenges must still be re-visited if municipalities are to deliver municipal services at reasonably affordable prices; to provide free basic services to poor households; and to continue to promote social and economic development, in line with their developmental mandate.
With the above submission made, it should also be noted that municipalities should strive to inject supplementary and additional efforts into generating new income streams, perhaps drawing on certain practices from the private sector that may assist in generating revenue.
An area in which municipalities are also lagging behind as far as growing their revenue is concerned, is asset management.
Public property management has historically been a combination of maintaining properties that are used for essential services and disposing of surplus properties, as either a public-sector service, or as part of social development. Property has also been used to address housing needs. Municipalities should not extend their role in so far as their properties are concerned. Public properties must, however, be viewed as a portfolio of assets, the effective management of which can be used to generate income. The establishment of a proper property asset register further establishes the financial value of such a portfolio, which, in turn, requires a direct link to the valuations roll. This requires the establishment of a skilled task team(s), together with the investment of further resources, as this may be the steppingstone to establishing potential value, or future value, that can be obtained from public assets. Task teams should also be in charge of other strategic aspects that will look at ways to expand the economic output/s that can be acquired from any and every property. One must however appreciate the fact that the above can only be achieved once there is clarification of local governments’ property rights and fiscal autonomy. Currently, legislation is very limiting in this regard. Nonetheless, nothing prevents municipalities from creating policies that can assist them in driving effective public property management as one of their core objectives.
The lack of enforcement of financial accountability in municipal organizations has had a detrimental effect on their operational efficiency; how the leadership of municipalities are viewed; but most importantly the performance of the municipalities. In many municipalities financial accountability is absent to non-existent given the significantly high levels of the mismanagement of resources (Reddy, 2017). Municipal leadership can, however, assist in the stemming of corruption in local government, by providing support to law enforcement agencies enforcing the law, as prescribed by the Public Finance and Management Act (PFMA) in terms of illegal activities, and prosecuting corrupt officials misusing public resources for personal gratification (Reddy, 2017).
It is pertinent knowledge that local governments have an array of legislation and policies at their disposal which in the instant are developed by them. Furthermore, local governments adopted “Batho Pele” (Ekurhuleni, 2017) good governance principles to facilitate, improve and sustain service delivery by them. This has not necessarily resulted in higher levels of performance by municipalities, which has been evidenced by numerous service delivery protests over the years.
Local governments, in general, face a wide range of risks associated with their daily operations, including financial, reputation, political and operational risks. One may therefore assume that care would be exercised in establishing the functions and role of corporate governance in municipal organizations.
The authors’ assertion is that government, as a whole, but in this context specifically local governments have neglected the development and up scaling of their corporate governance departments and in essence, they lack such offices within their institutions. So, although local governments have good legislative frameworks and policies on managing local government, they have failed to fully implement corporate governance.
The protocol on corporate governance in the public sector provides guidance to state owned entities in achieving the socio-economic objectives of the government, without particular emphasis on local governments (DPE, 2002). The legislative frameworks and policies do not provide clear guidelines as to how corporate governance can transpire in local governments. This is what has also led to a lack of accountability and disregard for good governance, and inevitably, to severe failures in local governments.
There is a significant degree of responsibility entrusted in local government leadership, which necessitates ethical values to enhance accountability, fairness and transparency as dictated by corporate governance principles. It is in the implementation where the deficiency exists. It is suggested that a strong system of accountability, that works effectively to make sure that municipalities are constantly reminded and held to account as far as their obligations are concerned, is the remedy for this.
In order to achieve this, it is recommended that the Ministry of Cooperative Governance and Traditional Affairs and the Ministry of Public Service and Administration, together with SALGA (the South African Local Government Association), must therefore provide expertise and facilitate the development of corporate governance frameworks that will apply to different categories of municipalities, or to each local government. Secondly, the facilitation of corporate governance must be compulsory for all local governments. This means the actual establishment of divisions or offices within their departments designated to monitor implementation of policies by the various employees and to develop and explain their practices, according to their environment.
In cases where there is no capacity and capability in terms of skills, competence, and expertise in the management of the local government, external agents should temporarily be utilized, in order to provide strategic guidance on the creation of such offices. The employees, who are employed by these departments, should be required to be custodians of good governance in the organization. Their role would be not to get involved in the politics of the local government, but to oversee and ensure that there is compliance with the corporate governance principles and policies in place.
The above places an earnest emphasis on the proper implementation of monitoring and evaluation mechanisms in local government structures. Although there is a policy tool, the Policy Framework for the Government-wide Monitoring and Evaluation System (RSA, 2007), that has been developed, much can be said as to whether this has been effectively used as a developmental tool.
In general, monitoring and evaluation capacity is low in the majority of municipalities - perhaps even more so in smaller municipalities. This also has an adverse effect on their capacity to deliver quality monitoring and evaluation services. Local municipalities should prioritize the skilling of their current staff responsible for monitoring and evaluation functions. Again, an environment that attracts and retains technical staff by offering incentives, such as training opportunities, should be promoted by local municipalities.
The foundation for proper monitoring and evaluation systems must stem from the support of both the political and administrative leadership at a municipal level, in order to ensure that such municipality functions optimally by offering citizen-responsive services. The strengthening of accountability within the municipality and holding municipal leadership accountable for their performance will serve to eliminate or address systemic challenges in local government, thereby enhancing quality service provision.
It is furthermore recommended that interdepartmental relations should be enhanced among colleagues to assist in addressing challenges at different levels. This would enable departments to play an oversight role, when required at certain intervals, thereby mitigating errors made by colleagues from other departments. Legal, Risk and Internal Audit departments should also assist in identifying risks and ongoing breaches that occur in municipalities, the reasons why they occur and possible remedies and interventions that ought to be employed.
It suggested that an awareness of the advantages of good governance should be promoted in municipal councils, in line with the principles of the King III report (IODSA, 2009). Furthermore, the political leadership occupying key positions, should set the collective tone with respect to accountability issues and challenging transgressions. They must lead by example in effectively managing bad governance, poor performance and non-compliance – and they must do so in relation to not only their staff, but also with their very own peers. The establishment of and adherence to good governance principles in local governments should not be met with resistance from politicians, as this sets the tone of the municipalities. Corporate governance should be used as a tool to effectively manage the relationship between the administrative and political leaderships in local governments, since such governance concerns itself with issues of responsibility and accountability.
Local governments should begin to challenge the view that now predominates, in terms of which they are viewed as having enabled an erosion of accountability, and that they are incapable of leading world class municipalities. This is something that needs to be addressed if a capable state is to be established and sustained. African countries such as Egypt, Congo, and Lesotho, etcetera (Francois, 2018). In particular face extensive challenges due to above-mentioned.
In as much as the author has highlighted other key arears that municipalities must focus on including resources and leadership etcetera, it is suggested that they are all ancillary issues to the epicentre of the problem, namely the need to have human capital that has a strong sense of service orientation in local government. What is needed is local governments that will apply the correct procedures in the appointment of employees, that will accordingly be well suited to the job they fill, the end result of which is more effective performance.
The electorate must also be educated about their rights and the power they have to bring about change. Currently, communities tend to vote for parties because of sentiment, rather than serving their interests. This allows non-functioning councillors to remain in office and even to return in successive elections (Frank, 2021).
Municipalities that perform well are generally characterized by the following; a strong tone set by effective leadership characterized by accountability; controlled environments that are institutionalized; a strong oversight on financial management and debt collection; capable and skilled staff members; proper governance structures in place, with effective monitoring and evaluation systems in place; compliance with supply chain management processes and relevant. These are just some of the elements which, when collectively applied, lead a municipality to perform better.
In a qualitative analysis, undertaken by the author, the following municipalities were evaluated: Ngaka Modiri Molema District Municipality (North West province), Dipaleseng Local Municipality (Mpumalanga province) and Okhahlamba Municipality (KwaZulu-Natal province). . The majority of the failures of these municipalities stemmed from exactly the same challenges, or extremely similar challenges.
Ngaka Modiri Molema District Municipality has been experiencing serious challenges since the year 2014, when it was placed under Administration. Section 139 of the Constitution (RSA, 1996) provides for an intervention by the provincial sphere of government, where a municipality, as a result of a crisis in its financial affairs, is in serious or persistent material breach of its obligations to provide basic services or to meet its financial commitments. The province is empowered to intervene and can take steps to impose a recovery plan; dissolve the council; or assume responsibility.
In this case, the Section 139 intervention arose due to the fact that the District Municipality had been experiencing a myriad of governance and administrative challenges. The Council had appointed a Municipal Manager and senior managers who did not meet the competency requirements in terms of the local government regulations, despite being advised against such appointments. In addition to the other unsuitably qualified senior management staff, the Chief Financial Officer, who was appointed in the 2012/2013 financial year, was also insufficiently qualified, in that he did not have the relevant experience as a financial management practitioner in the local sphere of government.
Furthermore, there were reports that the supply chain management processes, with respect to key services, were being consistently flouted by the Municipal Manager and other senior managers. Lastly, failure by the Council to act on the alleged maladministration, fraud and corruption led to the collapse of the municipality. The collapse of this municipality is not surprising given that it accounted for half of the six material irregularities, that were identified as having occurred at three municipalities under audit by the Auditor General (Auditor General, 2020). The Auditor General’s 2020 report still identified the most material financial irregularities, three, at Ngaka Modiri Molema (Auditor-General, 2020).
The challenges that the Dipaleseng municipality faced around service delivery emanated from administrative, financial management and governance issues. It appears that these challenges recurred over long periods of time, and that they have been repeatedly highlighted in the Municipality’s annual reports, as well as the 2020 report of the Auditor-General. It is reported that the municipality has not been proactive in employing procedures or taking steps to prevent the losses incurred or to mitigate the abuse of the supply chain management regulations and contraventions of MFMA laws that have been prevalent within the municipality (Dipaleseng District Municipality, 2018). The financial sustainability challenges are a result of poor financial management, operations, administration, lack of proper leadership and planning, inadequate delegations, lack of staff discipline, poor performance and lack of accountability.
Given the nature of local government, rural municipalities fall short in collecting revenue compared to the urban cities and district municipalities. As a rural municipality, OKhahlamba municipality suffers from staff that lack technical skills, knowledge, leadership and management skills within local government. In addition to the officials and councillors of the municipality lacking these basic skills and knowledge, the local government also lacks adequate tools and resources to carry out the necessary tasks to deliver services. This has resulted in the quantity and quality of service delivery being compromised (Mabizela & Matsiliza, 2020).
Non-compliance by municipal officers is also a pervasive threat that leads to poor performance and inefficiency in the Okhahlamba municipality. A further challenge in rural arears is that of technology in remote arears. The lack of electricity, or access to it, results in a slow pace of service delivery and innovative ways need to be utilized for effective service delivery to occur. The supply of energy can play a crucial role in underpinning efforts to achieve the Millennium Development Goals and improving the lives of poor people across South Africa. However, there are low levels of access to electricity in rural arears. This also affects officials in terms of being able to obtain information; collect and store data; and most importantly, to become trained and skilled through the use of technology.
The above demonstrates that the issues that affect the municipalities reviewed, resemble the issues that other municipalities have. A recent report, released in August 2020 by the Research Unit in Parliament, and dealing with Municipalities Under Section 139 Intervention, found that 140 municipalities had been placed under administration between the years 1998 to 2019 (Parliament, 2020). The findings of the study revealed that the challenges of service delivery in local governments remains a serious governance challenge and that this challenge is most prevalent in rural areas in the KwaZulu-Natal and North West provinces.
It is also apparent from the research material that was studied, that the state of rural developments is slow. That being said, it is worth noting that the majority of residents in rural arears, where agriculture and farming are the backbone of economies for the district municipalities, cannot afford to pay for basic services, due to the fact that jobs are scarce. Consequently, these municipalities do not receive sufficient revenue from residents; hence they do not have sustainable resources, with which to provide services.
It is the author’s submission that political leaders and senior management officials employed by local government in rural areas should make more use of structures such as traditional leaders and chiefs in such areas for the distribution of information, but also for data and governance purposes. Local leaders are normally able to transmit crucial information and to win over the local population.
A recent poll conducted in 2021 by Ratings Afrika, on behalf of Money web, listed the most improved and the most deteriorated municipalities over a period of five years. The findings indicated that the most improved municipalities focused on getting the basics right. These were improving revenue collection; eliminating wastage and corruption; and better service delivery, which is, in turn, dependent on maintaining and improving infrastructure spending and the maintenance of existing infrastructure.
In these municipalities, there was a concerted effort from the senior management to improve the municipalities’ financial sustainability. What stood out the most – and served as a huge alarm bell - is the fact that the calibre of management staff in municipalities was\ found to have had a huge bearing on their performance. The fact that many municipalities have chased away skilled administrators has left the door opened for incompetency. Furthermore, municipalities are often embroiled in legal battles to get rid of “problematic staff”. In the final analysis, what was suggested is that it’s not impossible to fix the messy situation that municipalities find themselves in. This can be achieved by targeting the actual source of the problems at local government level, which is usually the quality of management and human capital (Ryan, 2021).
Recommendations
It is recommended that in working towards the 2030 sustainable development goals (Lina Henao, 2017), municipalities should focus on the following issues:: human resources departments must be capacitated with human resources specialists, who must play a strategic role in the acquiring of skilled human capital; corporate governance must be prioritized in the public sector, coupled with a revamp in legislation to help guide the implementation; legislation with respect to the policing of those in leadership positions must be reworked in order to achieve effective accountability and provide for proper checks and balances to be put in place; continuous upgrading and modification of monitoring and evaluation systems so as to align them with global standards; and technology must be used as a tool to assist in achieving effective service delivery. Rural municipalities must also utilize the assistance of traditional leaders as they are the bridge to their communities. Finally, the continuous upgrading of the level of education for councillors is crucial to guarantee that they will be able to ensure proper oversight, and to ensure proper accountability.
Conclusion
The global outbreak of Covid 19 requires local governments to be more aggressive in respect of being innovative, progressive and instrumental in ensuring that service delivery is not hindered and ensuring that they meet their objectives as outlined in their respective IDPs. Frameworks of reference, defining the qualifications and responsibilities of local government staff and a national local government capacity-building strategy should be implemented at local level.
Vacancy rates for senior management positions by municipalities should be highly regulated through the use of external HR consultants, who can be utilized in ensuring that the hiring of senior professional staff is conducted properly and purely on the basis of merit. The adoption of this procedure, as a formal requirement, would solidify ongoing “buy-in” (author’s emphasis) to the commitment of adequate and appropriate resourcing and to the up-skilling of municipal staff. Capacity building should include regular training; improvements to salary structures; adequate working conditions; mandatory development courses; and a demonstrable commitment to staff well-being.
Monitoring systems and measures related to performance management should be vigorously implemented by Human Resources departments, in order to keep track of the skills base. It is critical that municipalities be adequately resourced with competent monitoring and evaluation tools and system for their personnel. They must also be well-resourced with up to-date training in the maintenance and use of such mechanisms. This is important for strengthening their capacity to deliver efficient monitoring and evaluation services.
Smart technology methods should be employed by municipalities in order to increase their abilities to meet citizens demand for services. An example of this is the use of automated machines to operate toll gate operations. This may have job-loss implications, but such losses may be mitigated through increased opportunities in other areas. Automation, for example, results in a greater need for technical roles in terms of app development and equipment maintenance.
The need for guidelines and a legal framework that will facilitate the implementation of corporate governance in a municipal context, is also a key factor in working towards improving the performance of local governments. This must be coupled with the personnel who are adequately trained to assist municipalities in implementing the guidelines within their respective organizations.
Furthermore, it is the authors observation that factors such as leadership, technology, and adequate human and financial resources as invaluable in achieving what Sections 152 and 153 of the 1996 Constitution determine is the very essence and purpose of local government: namely to provide public goods and services to local communities and to enable their social and economic development.
Lastly, the author has considered the crucial issue of human capital as a meaningful contributor to local government organizational performance. Having done so, the author has made recommendations to the effect that consistent ongoing training is key if municipalities are to achieve their objectives. The functioning of municipalities is highly dependent on the people involved in them and on those who run the day-to-day operations of the organization. Their ability to work optimally has a direct nexus to the achievement of the organization’s mandate. It is therefore evident that no organizational strategy can be easily accomplished or achieved without aligning it with the human capital available, or without taking decisions on human capital acquisition or development, with the organizational strategy in mind.
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