Free State’s money mess

2011-08-20 15:50

The Free State department of cooperative government, traditional affairs and human settlements has spent more than half its yearly budget to bail out struggling municipalities in the first two months of its financial year.

The R18.2 million in grants to five municipalities is more than half of its yearly R29 million budget for financial assistance.
Bailing out municipalities cost the department R76.4 million during the previous financial year.

The dire state of the Free State municipalities came to light during an oversight visit by the joint select committees of finance and appropriation from Parliament this week, which will visit more municipalities at designated times.

Appropriation committee chair, Teboho Chaane, said a number of things would have to be investigated.

“The former cooperative government, traditional affairs and human settlements MEC Msebenzi Zwane and the head of department will have to explain.”

Kadimo Masekoane, administrator at Nala Local Municipality, which includes Bothaville and Wesselsbron, said his municipality could not pay councillors’ salaries and the department transferred R6 million to make up for the shortfall.

Most of the transfers to municipalities were for paying salaries or bulk suppliers, such as Eskom, the department said.

It emerged that Mangaung Municipality, which included Bloemfontein, owed Eskom R111 million.

Mangaung mayor Thabo Manyoni was left red-faced this week when he admitted to the committees that his administration did not know it was expected to make a representation.

“I want to take the blame. As a leader I won’t give an impression of disregard for any member of Parliament.”

His apology was accepted and the committees undertook to send him a notice to appear before them in Cape Town.

According to the department, the bail-out money was initially lent to municipalities. Some, however, struggled to service the loans and the department decided to turn the loans into grants.

The National Treasury’s Vincent Malepa described the budgets of Free State municipalities as “dismal”. He also said his department was not aware of these transfers and that they might be illegal.

“You’ve said the transfers have been published in the Government Gazette. If you can prove that, you can have my whole month’s salary.”

Malepa said more and more municipalities were depending on grants and underspending was rife – 20 local municipalities budgeted R8.8?billion, but spent only R6.6 billion in the previous financial year.

He said consumer debt amounted to a whopping R4.8 billion.

Regular training sessions were conducted for municipal financial officers, Malepa said, but most of the time they did not attend.

The provincial department of cooperative government, traditional affairs and human settlements admitted that no skills audit was done at municipalities.

Provincial auditor-general Ben van Niekerk said irregular expenditure and weak asset management systems led directly to bad service delivery.

A report will now be tabled before Parliament, after which action will be taken.

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