KZN faces cash flow problems

2010-02-15 16:34

Durban - KwaZulu-Natal’s uMsunduzi municipality, incorporating the provincial capital Pietermaritzburg, has enough money to operate for just one more week, local governance MEC Nomusa Dube says.

She said on Monday the municipality's net available cash fell from R120m in 2007/2008 to R1.7m in 2008/09.

"A number of financial discrepancies have been highlighted by the Auditor General in his 2008/2009 audit report to the municipality," Dube said in Durban.

She had appointed a three-man team of experts, including officials from the provincial treasury, to come up with a turn-around strategy, but did not name the team.

Team members would focus on rates, water and electricity revenue, monitor the municipality's functionality, report on its supply chain management and oversee the collection and recording of debts.

It would also assume responsibility for cash flow management and projection and freeze all but essential expenditure.

Dube said the uMsunduzi municipality had lost its chance of becoming a metropolitan municipality and would remain part of the uMgungundlovu district municipality - a decision made by the municipal demarcation board.

"There is high responsibility that comes with converting from municipality to being a metro. uMsunduzi was not ready," she said.

While the government supported the idea of having a second metropolitan municipality in KwaZulu-Natal, better planning would have to take place.

"We should now pursue the objectives of having a sustainable municipality with clean audits and good governance," she said.