SPCA now has to tender for funding from Mossel Bay Municipality

MOSSEL BAY NEWS - The Mossel Bay Sport Council, the Mossel Bay SPCA, the JOC and Mossel Bay Tourism all recently applied for funding from the Mossel Bay Municipality.

However, the SPCA’s application was not approved.

Given the publishing of Circular 131 of the Municipal Finance Management Act (MFMA) in March, and the SPCA and municipality’s recent history with the Harry Giddey Park, these organisations and their funding sparked quite the debate during the monthly open council meeting held at the end of July.

Items addressing each of these funding applications formed part of the meeting’s agenda.

These organisations apply for funding from the municipality in terms of Section 67 of the MFMA, which allows it to make donations to non-government organisations.

What was usually a simpler approval process for these organisations and their funding is now influenced by Circular 131, a document that provides additional guidance criteria a municipality needs to consider when it comes to Section 67 transfers.

In short, if the municipality approves Section 67 transfers to any organisation, it must not receive goods or services from the relevant organisation. If an organisation’s operations is seen as the delivery of goods or services to the municipality, it must follow a procurement process and cannot provide funds under the banner of a Section 67 transfer.

Advice from external legal counsel was obtained for each of these organisations’ applications.

SPCA
The Mossel Bay SPCA applied for R1 408 000 in funding, but was denied.

As soon as this item came to the floor, Mayor Dirk Kotzé addressed the issue head-on. “We are not trying to get back at the SPCA because of Harry Giddey Park, let me say it straight.”

He said the item is worded as it is not because the municipality has an axe to grind with the SPCA, but because it is based in legal opinion.

The external advice the municipality received was summarised as follows: “The crux of the SPCA’s request for a continuing grant is ‘seeking enhanced financial support to fully cover the operational costs of managing the municipal pound’. It is counsel’s view that the managing of a municipal pound involves the supply of services and same should thus be referred to a procurement process.”

Garden Route SPCA area manager Cheri Cooke said there was a meeting between the SPCA and the municipality last week.

“The municipality has explained that National Treasury requires pound services to go to tender, as the current funding model is no longer compliant,” said Cooke.

“They’ve assured us this is purely a compliance process and not connected to the Harry Giddey Park matter. We respect the process and will be applying. Our community knows the SPCA - we have the people, the skills and the heart to keep providing this service for the animals who need it most.”

The FF Plus voted against the item, while the ACDP, PA and ANC abstained.

Sport Council, JOC and Tourism
With the exception of the PA’s vote in favour of approving funding for the Sport Council, the opposition parties all either abstained or voted against Section 67 funding for the Sport Council, the JOC and Mossel Bay Tourism.

During discussion for the Sport Council, both the FF Plus and ACDP said it was not that they did not want to support community organisations, but that they could not go along with something that goes against National Treasury and has been highlighted as irregular expenditure in the past.

Kotzé said they agreed with Treasury in terms of not being corrupt, not stealing and not mismanaging, but that it couldn’t make a blanket rule and by doing so punish those in need.

The FF Plus’ Cllr Elroy Baron said they understood this, but without a working solution to this problem, they could not support the funding.

The ACDP’s Cllr Jeanette Gouws also reiterated her understanding, but said right now Council was approving something it knew was irregular expenditure, which she could not support.

Approved amounts
The Sport Council applied for R195 500, but got approval for R142 740. The JOC applied for R3 050 000 and got approved for R3 000 000, while Tourism applied for R5 102 400, which was approved.

The external legal opinion for these organisations came down to the fact that none of them were delivering a service to the municipality and could thus be granted approval.

The ACDP, however, argued that instead of a community organisation such as the SPCA being seen as providing a service, it was in fact the JOC and Tourism who were fulfilling such functions.

Gouws said the JOC specifically had been referred to as a service provider many a time, and that funding criteria was not being consistently applied.

In a statement Gouws released after the council meeting, she said not only did this process expose the councillors and senior officials to personal financial liability, but it also placed the municipality’s clean audit status at serious risk.

External advice: JOC
External advice said these are some of the relevant factors when considering the JOC: it makes its funding use decisions independently; it is a community-based organisation promoting a ‘personal safety and well-being philosophy’; its projects don’t intrude on municipal functions like policing, traffic and disaster management, but complement it, but it is not a service that the municipality needs to deliver; it has many other partnerships with organisations and individuals and is not an alter ego of the municipality; no municipal employee is remunerated or managed by the JOC; no partnership exists between the municipality and the JOC; there is no obligation on the JOC to render services or supply goods to the municipality, such as an obligation to monitor municipal assets.

External advice: Tourism
External advice in this case was summarised as follows: In short, Mossel Bay Tourism can promote the town, its business, facilities, etc. as it deems best without interference from the municipality. Counsel said it would be naive to argue that the municipality derives no benefit at all or that Section 67 holds that it is a requirement that the municipality derives no benefit. It said any donation or grant in terms of Section 67 will in some measure benefit the municipality, directly and or indirectly. Counsel said this is an intangible benefit and distinct from a measurable deliverable in terms of an agreement or arrangement.

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