Msunduzi one week from shut down

2010-02-16 00:00

THE Msunduzi Municipality only has enough money to fund roughly one week of operations.

This shocking announcement was made by Co-operative Governance and Traditional Affairs MEC Nomusa Dube, who, together with Finance MEC Ina Cronje, hosted a media briefing in Durban yesterday regarding proposed political intervention into the municipality’s affairs.

Following a meeting with Msunduzi Mayor Zanele Hlatshwayo, council speaker Alpha Shelembe and chief accounting officer Roy Bridgmohan, Dube stated the following: “Facts before us indicate that the financial situation in the municipality has deteriorated. The municipality is now experiencing serious cash flow problems, which may lead to services grinding to a halt.”

Municipal manager Rob Haswell, who in the past has strongly denied that the municipality is on the verge of a financial crisis, was also meant to meet the MECs but failed to do so, saying he was indisposed.

Sources at the municipality told The Witness that Haswell has ta­ken two weeks’ sick leave.

Haswell has come under increasing attack in past executive committee (Exco) meetings about his frequent absences.

Dube said the Provincial Treasury has also analysed the municipality’s financial position and come to the conclusion that its net cash flow has deteriorated significantly over the past two years ending June 30, 2009.

“This is reflected by the net available cash which fell from R120 million in 2007/08 to a mere R1,7 million in 2008/09. As a result, the cash coverage ratio has dropped, indicating that the municipality only has sufficient cash to fund approximately one week of operations,” she said.

Last week, The Witness reported that the municipality spent almost R165 million more than it raised in the current financial year and is presently running at a loss.

In light of Msunduzi’s dire financial situation, a team of experts has been appointed to help the municipality develop a financial turnaround plan.

The three-man team will be made up of highly qualified and knowledgeable finance and governance experts from Provincial Treasury and from the department.

Dube said: “This intervention we are making is a support one for an initial period of three months. However, should we not receive full co-operation or should the situation not improve, we will not shy away from fulfilling our legal obligation of approaching the provincial government to give us permission to undertake an intervention in terms of Section 139 of the Constitution.”

Cronje said the three experts will work impartially and with the utmost integrity. They will also report their findings to the two MECs.

“They will not take over the responsibi­lities of the officials there; they will support them to ensure that there’s no more financial mismanagement,” said Cronje.

When one journalist asked if Msunduzi has any choice in the matter, Dube replied: “No,” drawing derisive laughter from the floor.

The three experts will be officially announced at this Thursday’s Exco meeting.

What will the province’s financial oversight task team do? page 2

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