Abaqulusi worst in debt collection

2013-07-25 00:00

VRYHEID’S Abaqulusi Municipality leads the pack of municipalities in KZN that have failed to collect part of a combined R1,222 billion outstanding for services provided over the last two financial years.

In a parliamentary reply to the DA’s Mark Steele, Co-operative Governance and Traditional Affairs (Cogta) MEC Nomsa Dube said the Abaqulusi Municipality wrote off bad debts totalling R184 million between 2010/11 and 2011/12.

Dube’s reply showed that R739 million was written off in 2010/11 and R483 million in 2011/12.

Hot on the heels of Abaqulusi Municipality is the Mnambithi-Newcastle Municipality, which did not collect R174 million, and the Msunduzi Municipality, which wrote off R154 million.

Also writing off huge amounts were Sisonke District at R97 million, iLembe District at R90 million, Zululand at R89 million and Umgungundlovu at R83 million in uncollected money.

The poor recovery rate by these municipalities is in stark contrast to the biggest municipality in KZN, eThekwini Municipality, which wrote off only R1 million.

The municipality that recorded the lowest write-off is Ezinqoleni Municipality, where R252 447 was written off in the two previous years.

Dube said she was satisfied that all the affected municipalities had followed required procedures and regulations before writing off bad debts.

Steele said the writing off of bad debt meant poor budgeting, poor revenue collection or both.

“Municipalities have not only failed to collect the R1,222 billion for services provided, they have also conceded that this money will never be collected,” he said. “Ultimately everyone suffers because this money should have been spent on maintaining the water, electricity and road networks that provide the basic municipal ser­vices.”

Steele also said the failure to collect debt showed that municipalities were under financial stress.

“Sustainable municipalities manage their revenue collection and thus have to write off less than poorly managed municipalities.

“Writing off bad debt is not a get-out-of-jail-free card that means municipalities can escape responsibility for poor financial management.”

Steele said the DA accepted that collecting debt was an enormous task.

“Before bad debts can be written off, all possible measures have to be undertaken to ensure that debts owing have been collected, and municipalities have to show the auditor-general that they have done all they could,” he said.

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