Policy and Budget Speech by Mpumalanga MEC for Local Government, Honourable Candith Mashego Dlamini for Department of Local Government, in the Mpumalanga Legislature

5 June 2008

Honourable Speaker and Deputy Speaker
Honourable Premier: Mr TSP Makwetla
Honourable members of the executive council
Honourable members of the provincial legislature,
Honourable Executive Mayors and Councillors present,
Honourable chairperson of the provincial house of Traditional Leaders, Ikosi Sipho Mahlangu
Our esteemed Amakhosi
Officials from the three spheres of government
Distinguished guests
Ladies and gentlemen

Madam Speaker, with the permission of the house, allow me to table the Policy and Budget Speech for Vote four, the Department of Local Government.

There is an old English adage that says a journey of a thousand miles begins with the first step. When we tabled our budget speech in May last year, we took the first step in the journey of a thousand miles that lay ahead of us. Today as we table our budget speech, we do so with a reflection of the achievements and the challenges that we have met in the past year. These achievements not only give us more positive strength to continue with the work that lies ahead, but it also gives us an opportunity to seek more innovative ways to accelerate the delivery of our programmes. We are also mindful of the challenges that we have encountered during our journey. The achievements and the challenges that we have made have enabled us to chart the course for 2008/09 more succinctly.

Administration

Madame Speaker, as you are aware, the executive council took a decision to split the Department of Local Government and Housing into two votes. This was confirmed by President Thabo Mbeki when he proclaimed the split at the end of March 2008. As from the 1 April 2008, we are now the Department of Local Government and the Department of Housing. We have undergone a process of splitting programme one (Administration) to cater for the two departments. This processes entailed consulting with the Bargaining Chamber. We can now report that the process of staff placement within the Department of Local Government has been completed without any major challenges.

To beef up the administration in the department we have identified critical posts which we hope to appoint by the beginning of July 2008. The restructuring of the department is bringing about a lot of opportunities and will result in a significant increase in the staff compliment of the department, this will therefore necessitate that we secure additional offices.

To address the challenges of office space within the government complex, the restructuring has enabled us to focus more on decentralisation of service delivery programmes to the district levels. We hope that through decentralisation we will be able to deal with the issue of office availability. Key to the decentralisation process will be to enable close monitoring of government functions such as management of traditional leadership, effective functionality of ward committees, and efficient service delivery through the Community Development Programme (CDP) and the proactive Disaster Management Co-ordination in the province.

Madame Speaker, we have just completed a process of reconstituting our Traditional Authorities into Traditional Councils in the province. Elections to elect the 40% members of the Traditional Councils were held on 29 April in the Nkangala, 2 May in Gert Sibande and 4 May in Ehlanzeni districts. These elections were held successfully and they have also taught us a lot of valuable lessons on how to conduct such elections, which was a completely new experience for us as a department. I would like to send a special message of appreciation to the thousands of people who flocked to the voting stations to cast their votes.

I would like to thank all our esteemed Amakhosi for working with us during this programme and submitting the 60% of members of the traditional councils as is stipulated by the Mpumalanga Traditional Leadership and Governance Act of 2005. I would also like to appreciate the co-operation and guidance given by the Provincial House of Traditional Leaders, especially the Chairperson Inkosi Sipho Mahlangu. I would also like to thank officials from the department who worked tirelessly to ensure that these elections were a success. I would be failing in my duties if I did not congratulate all the new councilors of the traditional councils.

However, I must indicate that we were not able to hold elections in six Traditional Authorities, namely Mantjolo, Mbuyane, Lomshiyo, Kgarudi, Madabukela and Mahlaphahlapha due to reasons beyond our control. Elections in these traditional authorities will be held in due course on a date still be determined.

This exercise which has been unprecedented in the country and indeed in the whole of Africa, has given us a rare opportunity to gain first hand experience as to how our people feel about their traditional authorities. The huge turnouts during these elections has clearly indicated that the people value our Amakhosi and they want to be actively involved in matters of governance in our traditional authorities.

Madam Speaker, now that we have reconstituted these traditional councils, the real work begins. During this month we will publish these new traditional councils, proclaim the number of seats and they will hold their first sittings where they will sign their code of conducts.

The successful holding of the elections of the traditional councils, indicates that we have began the journey for 2008 with a bang. It therefore indicates that our first step of the journey was remarkable and if that is a gauge we can use to gauge ourselves then it's clear that 2008 will be a year in which we will make remarkable strides. We can confidently say that we will not falter on our targets but instead we will accelerate our efforts to bring a better life to our people.

Status of our Municipalities

Madam Speaker, we are encouraged by the progress that has been made by the Mbombela Local Municipality since they were put under administration, under the leadership of Mr Khayelihle Mpungose. Under the administrators leadership a recovery plan was finalised for implementation. This recovery plan was approved by the department and it included activities such as review of the organisational structure, skills audit, evaluation and revision of all policies, financial capacity building, and finalisation of asset registers and development of skills for infrastructure plans. The progress reports which I receive on a monthly basis from the administrator and his team indicates positive progress towards recovery of the municipality. We will review the situation in August 2008, when the six months given to the team of administrators comes to an end. We are confident that as the new leadership of the municipality takes over, they will find a stable and well performing municipality.

The performance of some of our municipalities is a matter of great concern to the department. We continue to have some municipalities that perform below the required threshold. Matters of governance continue to be affected by infighting. We have held meetings with a number of municipalities, where we have indicated our dissatisfaction at how matters of governance have been compromised. I trust that municipalities will heed our call to improve their performance. Our department was forced to conduct investigations in municipalities according to Section 106 of the Municipal Systems Act. Most of these allegations were with regard to maladministration, fraud, corruption and poor service delivery. These investigations could have been avoided if proper financial management systems was implemented and maintained within municipalities.

We are also satisfied by the progress that has been made by Thaba Chweu municipality. Due to the good progress that has been made by the municipality we have decided to remove the municipality from administration in terms of section 139(1)(b) of the Constitution of the Republic of South Africa. I hope that the municipality will continue on its good path and that they will take the lessons that they have learnt whilst under administration.

When we tabled our budget speech last year we raised the concern of the debts totalling more than R1.5 billion that was owed to municipalities. One of the major challenges that contributed to these huge debts was the poor and inaccurate billing system used by the municipalities. This resulted in consumers losing faith in the invoices they receive from the municipality resulting in them not paying these accounts and this definitely contributed to debt escalation. Some municipalities do not review their indigent policies on regular intervals and some do not have the capacity to administer the indigent policy. Our focused intervention that we provided to municipalities has been in the development of by laws and the review of their indigent policies. Through this intervention we were able to assist municipalities recoup R50 million from government departments in outstanding debts. The department will now focus on providing assistance to municipalities with regard to the collection of outstanding consumer accounts.

In releasing the outcomes for the municipalities' audits for 2006/07, the Auditor General, Mr Terrence Nombembe, has highlighted that municipalities are still failing to account for funds meant for service delivery largely because of critical shortage of staff and lack of internal controls through out the country. He has also indicated that there has been an improvement in Mpumalanga as municipalities who received unqualified reports increased from 43% to 52%. However we share the concerns raised by the Auditor General because 34% of our municipalities have received poor audit opinions (adverse or disclaimer).

The outcome of the 2006/07 financial reports indicate that in the province 11 municipalities received unqualified reports, three received qualified reports, four received disclaimers, two received adverse reports and one audit outcome is not yet available. This clearly indicates that we still have a lot of work to do to strengthen the financial capacity of our municipalities. Despite the gloom picture indicated above I must congratulate our municipalities for the substantial progress they have made towards the timely submission of Annual Financial Statements. 20 out of twenty one municipalities submitted their financial statements on time for 2006/07 as compared to 18 in 2005/06 financial year. Thembisile municipality submitted their financial statements 14 days late with permission from the office of the Auditor-General.

During the 2008/09 financial year in an effort to support municipalities in providing efficient and effective administration, the department will ensure that all posts for municipal managers and other Section 57 employees remain filled and that municipalities have all the basic systems and policies in place to function as dynamic and professional entities. Timeous compliance to all pieces of local government legislation and frameworks, effective implementation of council resolutions by administrators and meeting service delivery targets will be a benchmark and key indicator for an ideal municipality that is accountable and responsive to the needs of its citizens. The department has made provision on the budget for this support to the amount of R1.5 million.

Madame Speaker, as I have indicated above, despite the gloomy picture painted earlier on some of our municipalities have continued to perform well and they have done us proud. This has been reflected by the awards we won during the 2007 National Vuna Awards. In this regard I would like to congratulate Steve Tshwete Municipality for winning the Best Improved Project Consolidate Municipality Award and the Best Performing Local Municipality under the Key Performance Areas (KPAs): Financial Viability and Good Governance and Nkangala District for winning the best Performing District Municipality under the KPA: Financial Viability.

In an attempt to make sure that we continuously scrutinise all our municipalities, we will be making it compulsory for all municipalities to participate in this year's Vuna Awards. This will give us a unique opportunity to glean more information on our municipalities that can assist us to make informed decisions on the interventions that we need to make timeously rather than making interventions late. Municipalities must not see these awards as exposing their weaknesses but they must view it as an opportunity to test themselves against the best, for how will you know where to improve if you do not compete with the best?

The enactment of Municipal Property Rates Act (MPRA) in 2005 has created challenges for local municipalities in the Province. The challenges range from funds to develop a valuation roll and the scarcity of Professional or Associated Valuers. The Department of Local Government is assisting municipalities with the implementation of the Act. Msukaligwa has commenced with the implementation of property rates as at 1 July 2007 and serves as a pilot for the province. Albert Luthuli, Govan Mbeki and Emakhazeni will implement by 1 July 2008. The remaining municipalities will implement by 1 July 2009. The four year phase in period lapses on 31 July 2009.

Thembisile, Dr J.S Moroka and Dipaliseng municipalities have been nominated by the Department of Provincial and Local Government (dplg) to receive hands on support on the development of rates policies, by laws that give effect to the rates policy and the rating aspects in terms of Property Rates Act.

The Valuation Appeal Board for Gert Sibande district has been appointed.
The functions of an Appeal Board are:
1. to hear and decide appeals against the decisions of a municipal valuer concerning objections to matters reflected in, or omitted from the valuation roll of a municipality
2. to review decisions of a municipal valuer

The Valuation Appeal Board for Nkangala and Ehlanzeni districts will be appointed in the 2008/09 financial year.

Service delivery

Madame Speaker, our efforts to deal with backlogs faced by our communities in service delivery are beginning to bear fruit, albeit at a slow pace. Today a total of 667 495 households out of 926 050 in the province have access to water. The backlog that we still need to address is 258 555. Through the Water for All Flagship we will address this backlog by 2010. We have finalised the planning and prioritisation of projects across all district municipalities. Through this process we were able to reduce the backlog by 46 230 households at the end of the 2007/08 financial year and we will reduce the backlog by 86 000 households in 2008/09 and 126 325 by 2009/10.

Water for All

The main objective of the project is to report on, monitor, facilitate and accelerate the roll-out of water infrastructure to meet higher level of services by 2010, in order to ensure that the basic level of services are progressively provided in areas without infrastructure.

The Department of Local Government is currently co-ordinating the consolidation of information with the Department of Water Affairs and Forestry, district and local municipalities for the Water for All Flagship Project. This will be an ongoing process for the duration of the project. Four Project Management Units (PMUs) have been deployed on a provincial (one) and district (three) level to verify and update project information and provide support.

A total amount of R2.385 billion is required to eradicate priority A water backlogs as per the project lists submitted by the municipalities, by 2010 Medium Term Expenditure Framework period (MTEF). The total resources currently allocated as indicated on the project lists, and available in the province, is R1.279 billion, including Municipal Infrastructure Grant (MIG), own funding and sector funding would be largely utilised to cater for minimum access to water for priority A areas in line with the 2008 target whilst ensuring progressive roll-out for higher service levels by 2010. The project lists indicate a shortfall to the amount of R1.1 billion. Value of the shortfall for bulk water projects are estimated at R718 million and reticulation R294 million.

A number of high impact projects will be identified and consolidated into a business plan to enable the securing of co-funding where needed.

It is important to note that the municipalities shall remain central in the implementation of the projects with district municipalities taking a larger portion of the work due to the extent of the capacity required for the success of the project. The key focus for district municipalities shall be bulk supply, co-ordination and support, and the Local Municipalities shall focus on reticulation and planning.

At least 24 priority A projects have been completed since the inception of the programme, to the value of R71.5 million benefiting 46 230 households. 74 Water projects are currently under construction to the value of R260 million as funded by the MIG.716 priority A projects have been registered by municipalities for 2008/09 financial year.

What is of concern to us is that out of 499 837 indigent households in the province only 305 632 households receive free basic water. This represents 61% of the population who should be getting the free basic water. We will continue to work tirelessly to increase the number of households who receive free basic water.

Electricity

The issue of electricity shortage and culture of saving by households as we approach the 2010 World Cup will be central in the agenda of all intergovernmental structures involving municipalities. The electricity shortage that hit the country has been an eye opener to us. It really brought home the realisation of the important things that have become a part of our everyday life that we take them for granted. Having to go to bed without electricity or waking up without electricity due to load shedding has highlighted the importance of saving electricity.

We have set up a Provincial Energy Optimisation Committee which is dealing with assisting the province to save energy. The committee has raised awareness to communities on the importance of saving electricity and also ensuring that big consumers embark on a load shifting programme, where they use electricity during off peak hours instead of peak hours. The Committee has also developed a working document on how we can save 10% of electricity consumption in the province. The document is still a consultative document, and I would like to appeal to individuals, municipalities and businesses to support this process. The process of saving electricity is an ongoing programme and we must collectively contribute to make it a success.

The department will further assist municipalities in implementing strategies and measures that will deal with electricity load shedding, saving and renewable energy alternatives measures. To strengthen its support to municipalities the department has advertised a post of an electrical engineer at an Assistant Director level to support municipalities to coordinate the implementation of energy related matters and develop a strategy to deal with load shedding.

We have managed to provide 583 505 households with electricity, and we are still faced with a backlog of 242 059 households. Of these 232 239 households are receiving free basic electricity. In the 2008/09 financial year we will monitor the implementation of the electricity strategy through the Provincial Energy Forum where all municipalities, Department of Minerals and Energy (DME), South African Local Government Association (SALGA) and ESKOM are participating and issues pertaining to electricity or energy are discussed.

The capacity of all municipalities in rolling out free basic services will be further boosted by the recent appointment of service delivery facilitators on an 18 months contract expiring in July 2009, to provide hands-on technical and legal support to our municipalities in areas of financial modeling, equitable share utilization, indigent policy implementation, indigent register development, maintenance and infrastructure development to ensure that poor households particularly in previously neglected areas receive the economic benefits of free basic water, sanitation, electricity and refuse removal. These service delivery facilitators will work in collaboration with other partners providing strategic support to municipalities like the Development Bank of South Africa (DBSA) and others.

Basic service delivery and infrastructure development

Madame Speaker, the department has deployed engineers to assist municipalities to expedite registration of infrastructure projects and technical reports. This intervention assisted the municipalities in the province to improve the expenditure on the MIG from 53% in the previous year to 75% as at 31 March 2008. The municipalities in the province have also improved and 95% of the MIG funds have been committed for the 2008/09 financial year.

Additional support provided to municipalities includes the appointment of a service provider to fast track the rate of submissions of business plans and technical reports to the Department of Water Affairs and Forestry (DWAF). There is still a challenge with regard to slow procurement of service providers by municipalities.

Municipalities through the appointed PMU have already identified projects for the water for all flagship project and work is progressing well to meet the targets of a higher level of service by 2010.

We congratulate the following municipalities who performed well by spending 100% of their MIG allocation during the 2007/08 financial year.

* Thaba Chweu Municipality
* Dipaliseng Municipality
* Pixley ka Seme Municipality
* Steve Tshwete Municipality
* Nkomazi Municipality
* Umjindi Municipality
* Bushbuckridge Municipality
* Mkhondo Municipality

We encourage all the other municipalities to learn from these municipalities and we are hopeful that through the assistance from the department more municipalities will be able to have a 100% spending.

Madame Speaker, allow me to convey my sincere gratitude to the DBSA for their support. They have been equally concerned with the capacity challenges experienced in municipalities and they have entered into partnership with government which has seen the deployment of Technical, Financial and Town Planning experts in some municipalities such as Nkomazi, Bushbuckridge, Albert Luthuli and Mkhondo. We have seen an improvement in the MIG expenditure for an example Mkhondo, Nkomazi and Bushbuckridge are some of the municipalities that recorded 100% expenditure. The program has been extended to Nkangala district and will be further extended to cover some of the municipalities in Gert Sibande district.

Disaster Management

Madame Speaker, the province has launched the Mpumalanga Provincial Disaster Management Advisory Forum (PDMAF). This is a forum, consisting of 44 members representing 37 stakeholders across the disaster management spectrum in the province.

The primary purpose of the PDMAF will be to provide a mechanism and develop a strategy for relevant stakeholders to consult one another and co-ordinate their activities with regard to disaster risk management issues. The forum will also give advice, monitor and make recommendations on disaster-related issues and risk management, as well as gather critical information about the provincial capacity to assist in disasters and to access resources. It will also implement response management systems that must ensure a systematic approach to the effective utilisation of facilities, personnel, equipment, resources, procedures and communication. The forum is mandated by Section (37) (1) of Disaster Manager Act.

Madame Speaker, our plans for the construction of the Disaster Management Centre has been delayed due to the late appointment of the tribunal, which was key in the whole process. I must hasten to add that the challenges that had plagued the construction of the centre have been addressed, as we speak the contractor is already on site and work has commenced. We are still confident that despite the challenges that we faced we will complete the centre by the end of 2009 and it will be ready for the 2010 world cup.

The department has entered into a service level agreement with the Mbombela Local Municipality to set up a temporary centre. The site for the temporary centre was handed over to the contractor on 14 April 2008. As you are aware our province is prone to disasters. During July to September 2007 and April 2008 the province experienced ravaging fires and hailstorm disasters, respectively. The fires and the storms caused extensive damage to the province. We would like to appreciate the support that we received from our partners especially Gift of Givers led by its Chairperson Dr. Imitiaz Suliman.

It has been identified that there is a need to capacitate all disaster management practitioners especially at the local municipalities as they are the first responders when an incident occurs. The need for a disaster management centre for effective co-ordination has also been identified. Plans to capacitate disaster practitioners in a form of workshops and training are in place. There will also be visits to other provincial centres as part of the training. We have set aside an amount of R2.5 million to upgrade fire fighting equipment in various municipalities. We will also increase our awareness in our vulnerable communities and strengthening the links with all sectors in preparation for 2010 and strengthen the provincial disaster response. Awareness campaigns will be conducted in Umjindi, Thaba Chweu, Dr. J.S. Moroka, Msukaligwa and Emakhazeni.

Thusong Service Centres

As government we are continuing with our efforts to ensure that people do not have to traverse long distances to access the basic government services such obtaining birth certificates, identity document and government grants. It is our responsibility that all citizens irregardless of race or gender access government services.

Government has set a target that every municipality must have one Thusong Service Centre by 2014. The province has set a target that each municipality must have two Thusong Service Centers by 2014. We have ensured that ten of the fourteen Thusong Service Centers are in operation namely Mbangwane, Casteel, Mpuluzi, Breyten, Siyathemba, Wonderfontein, Marapyane, Moremele, Matsamo and Tholulwazi. Thuthukani, Louisville, Daggakraal, and Doornkop TSCs will be functional this financial year 2008/09. Fourteen centre Managers and 14 IT Specialist have been appointed in various Thusong Service Centers in Mpumalanga.

Only six municipalities do not have Thusong service Centers namely Mbombela, Delmas, Emalahleni, Umjindi, Steve Tshwete and Thembisile. We are currently negotiating with these municipalities for old buildings that can be used as Thusong Service Centers for this current financial year, the department has set aside a budget of R8.4 million for the construction of Swalala Thusong Service Centre and the upgrading of Matsamo Thusong Service Centre.

The Provincial Executive Council has approved a Thusong Service branding with the inclusion of a provincial logo. The department has budgeted R1 million to brand all the Thusong Service Centers in 2008/09 financial year. The department has circulated a service level agreement to sector departments and relevant stakeholders requiring them to enter into such agreements so that they are able to operate in the Thusong service Centers.

Integrated Development Planning (IDP)

Striving for credible municipal IDPs is a task that we are continuously involved in as a department. In the past financial year we were able to support municipalities in the development of their (IDPs). IDP engagements were held with all three families of districts to improve the integration and credibility of the IDPs thereof. All 21 municipalities in the province have adopted and submitted IDPs for 2008/09 financial year, eight final IDPs and 13 draft IDPs. In Nkangala, the district and all six local municipalities have final IDPs. In Gert Sibande, the district and all local municipalities have draft IDPs, in Ehlanzeni; Umjindi Local Municipality has its final IDP, the district and four locals have draft IDPs.

During the IDP engagement processes municipalities conducted community participation as per the process plans and frameworks for the districts. The department was part of the community meetings and the invitations were extended to other sector departments. The whole process was conducted satisfactorily and communities were able to raise their needs as part of the IDP processes. During these processes we made the following observations:

* Municipalities did not indicate the status quos in terms of the integrated comprehensive Infrastructure development plans
* Gert Sibande District still does not have a Spatial Development Framework
* Municipalities not able to articulate planning challenges that they are faced with i.e. Land use management which is hindering service delivery
* Poor alignment and spatial reference due to non availability of the Spatial Development Frameworks (SDFs)

The importance of ensuring that the IDPs are in the languages of the communities cannot be over emphasised. The department has put aside R500 000 to translate the IDPs into various languages to allow communities an opportunity to be able to interact with these IDPs on a daily basis through the simplified translated IDPs.

Local Economic Development (LED)

In terms of the five year Local Government Strategic Agenda, all provinces were required to conduct capacity assessments of all District and Local Municipalities in terms of the state of readiness to implement the LED mandate. In Mpumalanga province this has been done. The Capacity assessment indicates that municipalities have to configure LED appropriately and accord it the status it deserves as a KPA and budget for it accordingly.

LED experts were also deployed to the seven priority municipalities which included: Thaba Chweu, Nkomazi, Umjindi, Mbombela, Dr. J.S.Moroka, Thembisile, and Bushbuckridge to provide hands-on technical support. An NQF level seven LED course (Honors equivalent) is being provided to LED officials in all municipalities.

LED still remains a challenge for almost all officials in terms of its definition and what it entails hence the need to create a common understanding. There is a need to create a common understanding and capacity building among all political and administrative officials on LED.

We will support the development and review of LED strategies in all municipalities in the province to ensure that all municipalities have implementable LED Strategies that enables them to exploit economic opportunities within their space. We have set aside an amount of R935.482.00 to support Govan Mbeki, Mkhondo, Lekwa, Msukaligwa, Albert Luthuli, Dipaliseng and Pixley Ka Seme Local Municipalities.

We will also provide special unique support programs to the four large municipalities, Emalahleni, Govan Mbeki, Mbombela and Steve Tshwete to stimulate the following:

a) Local markets to benefit the poor
b) Promote city competitiveness
c) Integration of economic zones, districts shared growth and investment initiatives

Community Development Workers (CDW)

The Department of Local Government has recruited 420 Community Development Workers (CDWs). Of the 420 CDWs recruited, 95 of them are still in the learnership and are due for permanent appointment in November this year, with 325 already appointed permanently into the Public Service. The department has budgeted R51 million for the CDWs programme for this financial year 2008/09. A total of R2 million is earmarked for financing the activities of the programme while R49 million will be spent on payment of CDWs salaries and officials in the programme office.

We will also be training our CDWs on report writing skills, conflict management, and community project management. We have also identified the need to conduct workshops with councillors and ward Committees in the three Districts to clarify roles and responsibilities of the CDWs and cement good working relationships amongst all public participation agents. As a way of going forward and inspiring CDWs to perform their duties diligently, the best performing CDWs award has been introduced and will be implemented during this financial year.

I would like to pay special tribute to the following CDWs who have gone an extra mile in their duties. These are the cadre of civil servants we want, who will not rest until a quality service has been rendered:

* Ms Nomsa Sithole (Dr. JS Moroka Local Municipality) best CDW in promoting effective service delivery in the province and in Nkangala
* Mr Emmanuel Mathole (Mbombela Local Municipality) best CDW in promoting effective service delivery in Ehlanzeni
* Ms Nomini Khumalo (Msukaligwa Local Municipality) best CDW in promoting effective service delivery in Gert Sibande

Traditional Leadership

The province continues to enjoy tremendous support from our traditional leaders. Indeed we know that we can count on their support in all our programmes. In line with the skills analysis programme of Local Government Sector Education and Training Authority (LGSETA), capacity building programmes for institutions of traditional leadership will be developed and implemented. We have set aside an amount of R2.7 million for this. We have also set aside R2,8 million to co-ordinate workshops for participation of traditional leaders in municipalities in-terms of Section 81 of the Municipal Structures Act.

Madame Speaker, we are continuing with our programme of paying allowances to our Headmen. Since the 1st April 2007 our headmen are receiving allowances of R1083.33. The challenge that we are faced with is the sitting allowances of the traditional councils that we have reconstituted. There are ongoing engagements with Provincial Treasury to address this matter.

Another challenge facing the department is the disparities of office administration allowances between the traditional authorities who we inherited from Limpopo and those in Mpumalanga. Those who were in Limpopo are receiving R78 000 whilst those in Mpumalanga are receiving R43 000. We have requested Provincial Treasury to assist us address this disparity. To address this we will need an amount of R1,7 million.

Section 38 of the Public Finance Management Act (PFMA) obliges the department as the transferer to request from the transferee (in this case the traditional authority) to provide a certificate of assurance that the transferred funds will be used by the traditional authority for the sole purpose of office administration and that there are adequate internal controls. In this regard the department will provide capacity building programmes to assist the Traditional Authorities to efficiently use these funds.

Conclusion

Madame Speaker, it is indeed my honour and privilege to stand before this house and table the 2008/09 budget speech for the Department of Local Government and Housing. I stand before this house, wiser and more aware of the tasks that lie ahead in the department. When I stood before this house last year, I must say I was a bit nervous and not sure of the journey that lay ahead. Having travelled the journey in 2007/08, I must say that I am aware of the sharp curves, speed humps and pot holes that lay ahead and will therefore make sure that the department arrives at its destination safely. I can say without a shadow of doubt that 2008/09 will be a better year for the department, and our people can expect better service delivery from the department.

I would like to take this opportunity to express my sincere appreciation to my family, especially my husband who has been a pillar of strength, the portfolio committee led by Honourable N J Mahlangu, the Acting Head of Department for Local Government, Mr Sam Ngubane, the senior management of the department and the rest of the staff for the commitment they have shown towards their work and in bringing about a better life to our people.

Madame Speaker, allow me to table the budget for the Department of Local Government and I accordingly request the house to approve the amount of R245, 229 million for the financial year 2008/09, to be allocated as follows:

Allocated amount 2008/09

* Administration: R47 161
* Local Governance: R86 459
* Development and Planning: R79 762
* Traditional Institutional Management: R31 847
* Total: R245 229

I thank you.

Issued by: Department of Local Government and Housing, Mpumalanga Provincial Government