Council to write off millions

2017-07-06 06:01

THE Kouga Municipality has resolved to write off over R280 million in unauthorized expenditure incurred over four financial years.

This decision was taken at a special Council Meeting on June 29 and will reflect in the annual financial statements for the financial period July 1, 2016 to June 30, 2017.

Kouga Executive Mayor Elza van Lingen says the decision to write off the R288 031 664 million is in accor-dance with the guidelines of the Municipal Finance Management Act (MFMA).

This matter should have been dealt with by the former Municipal Council. In accordance with the MFMA, the current Municipal Council decided to deal with the matter,” she says. “This write off, is in effect, an entry to clean the municipality’s book in compliance with the MFMA.”

Van Lingen says unauthorized expenditure can be attributed to non-cash items, such as depreciation, provision for bad debts, provision for leave and provision for post-retirement benefits.

“It is important to note that it is not cash items. The depreciation of the money does not mean that it has been improperly used or stolen, as no money has been transferred from the municipality’s bank account to pay any service providers.

“No money was physically lost, apart from increased bulk electricity and water purchases, which were covered by an equivalent increase in electricity and water sales.

“It is worth noting that no unauthorised expenditure was incurred during the 2014/ 15 and 2015/16 financial years.”

According to Van Lingen, the depreciation of expenses will not affect service delivery.

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