City chaos continues

2010-02-26 00:00

HOURS after police fired stun grenades and rubber bullets to disperse striking municipal workers outside the city hall yesterday, councillors were informed that municipal staff have been instructed to withhold information from the provincial task team charged with helping the municipality in turning its dire financial situation around.

Task team member Naren Mahesh told the executive committee: “On [February 23], upon our request for information, we were informed by the staff of Msunduzi Municipality that they are not to furnish the support team with any information.

“One of the staff members informed us that this instruction had been given by … chief financial officer [Roy Bridgmohan].”

In the task team’s first progress report regarding the municipality’s financial turnaround plan, it was also revealed that Bridgmohan failed to supply the team with the projected cash-flow statement.

“We are informed that a cash-flow forecast is being prepared currently and will be finalised in conjunction with the adjustment budget. In the absence of the cash-flow and projections, no recommendations can be made,” said Mahesh.

He said that at last week’s Exco meeting they were informed that the municipality had recouped R79 million of old debt in January.

However, after perusing the documentation they discovered that only R12 million of old debt was collected in January.

“The total debt owed to Msunduzi Municipality as at [December 31] 2009 was R564 283 436,95 and as at [January 31 this year] was R588 504 906,27. The total debtors have increased by R24 million in one month,” said Mahesh.

He said the task team is having difficulty in controlling expenditure effectively as certain information was not given to them in time for the preparation of the report.

“It is noted that two full months of the remaining six months for 2009/10 have elapsed without adjusted budgets being finalised. We have requested that the adjusted budget be furnished to us by [this past Monday]. To date we have not received [it],” said Mahesh.

As previously reported by The Witness, Mahesh said the municipality recorded an actual deficit of R165 million for the first half of the financial year.

“In addition, preliminary analysis indicates that the bulk purchases budget may be understated and as a result the tariffs could have been set at an incorrect rate … The chief financial officer would need to explain this,” said Mahesh.

Regarding irregular expenditure, Mahesh said certain services procured under the pretext of being emergencies were actually not urgent.

“… apparent misappropriation of funds would need to be investigated further”, he said.

But one of the most shocking aspects of the report has to do with the illegal sale of electricity.

Said Mahesh, “We have been informed by the credit controller that the staff of the service provider undertaking disconnections have received money for illegally reinstating the electricity service that had been disconnected due to outstanding amounts.”

Mahesh said in this month alone, three such cases are known to have taken place and there are other cases where electricity meters were reconnected illegally after being removed.

This, he said, is in the face of the municipality’s R60 052 372 loss on electricity for the year ended June 30, 2009.

Bridgmohan came in for a drubbing after the report, but said he had only just seen it and could not comment.

When Mayor Zanele Hlatshwayo asked if he had met the task team as he was supposed to, he said he had not.

“The MEC’s letter states that you should have regular scheduled meetings and you’re saying you haven’t. Obviously that leads to a breakdown in communication … Unless you have something to hide, why would you avoid having a meeting?” she asked.

Bill Lambert (DA) said councillors resolved to co-operate with the team, so it was distressing to see that this was not the case.

Themba Zungu (ANC) encouraged the task team to name those not co-operating.

Bridgmohan said he will meet the team early next week to discuss the items raised and report back to Exco.

Meanwhile, IFP member of the KZN Legislature, Dr Lionel Mtshali, gave notice of the following motion that he is to put at the next sitting: “The Msunduzi Municipality is facing virtual bankruptcy, with infighting between elected politicians and bureaucrats.

“This house resolves to urge the ruling party to sack the mayor and the municipal manager and replace them with individuals who can work together. It further urges the house to invoke Section 139 of the Constitution and step in to take over the running of the municipality as it has done in three IFP-run municipalities in the province.”

Mtshali noted that the council, despite its financial position, found money to bus people to witness the opening of parliament.

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