Local Government, Environmental Affairs and Development Planning

With regard to the expenditure of the Municipal Infrastructure Grant (MIG) in the province:

(1)        Whether there are any municipalities in the province that failed to spend the MIG funding fully; if so, what are the relevant detail;

(2)        whether there are any measures in place to mitigate the underexpenditure of MIG funding; if not, why not; if so, what are the relevant details;

(3)        what is the detailed breakdown of how much MIG funding was returned to the national government by municipalities in the province for each year between 2016/17 and 2019/20?

1. The MIG programme is a schedule 5b grant which primarily focuses on providing specific capital finance for eradicating basic municipal infrastructure backlogs for poor households. The grant must therefore strictly comply with the conditions as stipulated in the Division of Revenue Act (DoRA). The transferring officer (DCoG) has the obligation to stop and reallocate funds should the Municipalities fail to comply with the conditions of the grant.  The original MIG allocation for the Western Cape was promulgated in the 2018/19 DoRA at an amount of R502 371 000. The result of the Stoppage and Reallocation process brought about an overall increase in the Western Cape’s allocation of R10 071 000, i.e. the revised Western Cape MIG Allocation was increased to R512 442 000. The 2018/19 financial year, ending June 2019, resulted in 8 of the 24 Municipalities not spending their full allocation. This resulted in the Western Cape Province achieving a total expenditure of 95.54%. Kindly refer to the table attached in reply no. 3 for the names of the relevant Municipalities and the amounts not spent.

If so, what are the relevant details?

Based on our analysis, the under-expenditure incurred by the eight Municipalities during the 2018/19 financial year can be ascribed to the following reasons.

Four of the Eight Municipalities that paid funds back to National Treasury were as a result of savings incurred on projects. The remaing four Municipalities’ under-expediture can be ascribed to the following reasons:

• Lack of credible project implementation planning.

• Lack of technical capacity at some Municipalities.

• Supply chain related issues.

• Late gazzeting of the Special Ring-fenced Sport projects.

2. The Municipalities have been supported by the Department of Local Government (DLG) through the course of the financial year via the monthly Infrastructure Co-ordination Forum. In addition, specific Municipal Intervention meetings were conducted to ascertain the reason for under-expenditure and to collectively agree on an acceleration plan to counter the under-performance. These meeting were followed up with one-on-one meetings with a number of Municipalities to improve their immediate and medium-term planning.

If not, why not?

Not applicable

If so, what are the relevant details?

DLG conducts monthly Infrastruture Co-ordination Forum meetings which aims to highlight specific challenges faced by Municipalities to inform tailor-made support by DLG. The forum also serves to share best practices so that Municipalities may learn from one another. Ultimately, all relevant sector departments and transversal spheres of Government use the forum to align themselves in terms of their responsibility to ensure effective management of the grant.

The following mitigating tools have been prioritised going-forward:

• Escalating under-performance at IGR platforms such as TIME and JDA engagements to enhance top-management and political support.
• Municipal Intervention meetings with MM; CFO’s and Technical Directors to break-down the silo mentality and improve inter-municipal co-planning and communication.
• Analysing and supporting Municipalities in drafting credible 3-year Capital Plans to ensure a pipeline of implementation ready projects .
• To improve intergovernmental planning ensuring alignment between human settlements, spatial, infrastructure and finance planning.
• Conducting regular site-visits to validate expenditure performance and quality of workmanship.
• Provide technical advisory services to Municipalities to improve the quality of technical reports and thereby ensuring the effective and efficient utilisation of the funds.

3. The Western Cape Provinces’ MIG expenditure performance record over the past three financial years (2016/17-2018/19) shows an overall expenditure of 93.54%; 99.20% and 95.54% respectively.

The table below provides the specific detail pertaining the unspent MIG funds per Municipality.