Umzinyathi: We’re not bust

2013-05-13 00:00

UMZINYATHI District Municipality claims to have a “healthy” bank account with a current balance of more than R78 million.

This, however, didn’t stop Co-operative Governance and Traditional Affairs MEC Nomusa Dube from placing the municipality’s finances under administration last Tuesday following reports that the municipality was bankrupt and that huge amounts of funds were unaccounted for.

In a municipal report seen by The Witness, the municipality stated that it had a current bank balance of R78 628 355 as at May 6.

This balance included cash-backed conditional grants with fixed reserves of R15 million until June 30, 2014, read the report.

The municipality insisted that all its creditors and contractors had been paid within the 30-day payment time frame.

The municipality is one of the 17 that are without chief financial officers and rely on the services of acting CFOs and consultants to manage their finances.

Cogta had found the municipality to be technically insolvent and that it faced serious financial problems.

The report stated that the municipal council had agreed to review the contract of the consulting CFO.

It hopes to appoint a full-time CFO in July.

“The mayor, the executive committee and council are committed to providing leadership and support in order for this supportive intervention to be successful in achieving the desired result and turning around the financial situation of the municipality,” the report stated.

Asked to comment on the municipality’s “healthy” bank account and the intervention by the department, Cogta spokesperson Lennox Mabaso said the intervention was meant to support the municipality and steer it out of the challenges it faced.

“The department will not comment beyond the statement the MEC made when she took over the finances of the district municipality. We are happy progress is being made by the intervention,” said Mabaso.

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