Msunduzi debt plight worsening

2013-12-02 00:00

HALF of the money owed to Msunduzi is owed by national departments, and in pole positions are Public Works, Education and Treasury.

This is according to a report by the Municipal Public Accounts Committee (MPAC). It also pointed out the Msunduzi debt situation is not being brought under control; in fact, it is escalating.

Chairperson of MPAC Mike Tarr said they would be monitoring the situation and checking whether debt control measures that have been proposed are being implemented. The report notes that part of the problem could be incorrect billing and the need for the municipality to clean up its billing system. The KZN Treasury task team that is assisting in ensuring that government departments pay their debts has offered to assist the municipality.

According to the latest Treasury report total government debt — owed by provincial and national departments — is about R171 million. In the council’s financial statements the total current debt is estimated at R1,5 billion, of which about R1,3 million is owed by households and businesses in the city.

When the municipality went under administration in 2009, outstanding debt stood at about R800 million.

On the domestic front the municipality has stepped up its debt collection efforts and residents have been warned that there will be an increase in disconnections for non-payment.

Tarr said MPAC was concerned at reports that disconnections were not being carried out properly and that many disconnections were allegedly being fraudulently re-connected. It had written to the chief financial officer Nelly Ngcobo to suggest that there should be different service providers for disconnection and re-connection services.

Council is also offering residents a 175th anniversary amnesty that allows them to pay half of any debt that is over 120 days old. The latest budget also has provision for debt write-offs in the current financial year.

On government debt, the Treasury report notes that half of the money owed to Msunduzi is owed by national departments.

The Task Team has undertaken to ensure that all Section21 school arrear debt is paid by this month. R16 million will be given to the municipality in December 2013. It has noted that the municipality also needs to cleanse its billing system to ensure that the correct bills are going out to the departments and there is a one-to-one match of all properties with client departments. Disputes are being investigated with a February 2014 deadline to resolve problematic accounts.

The municipality in the past had charged government departments rates for such infrastructure as roads.

This has been under dispute and is currently being reviewed by National Treasury. publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

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