District dips into conditional grants to pay staff’s salaries

2019-05-29 15:00

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uMgungundlovu District apparently tapped into conditional grants to pay staff’s salaries as the municipality continues to face financial constraints. 

During Tuesday’s executive committee meeting councillors confronted the administration about the financial problems that continue to plague the district.

They were responding to a presentation by the acting chief financial officer, Linda Africa, which painted a grim picture of the district’s fiscal position.

According to his report, uMgungundlovu had a cash coverage of less than a month at the end of April. The norm is for the municipality to have a coverage of between one month and three months.

DA caucus leader Bongumusa Nhlabathi said the district had been limping financially for most of the term but Tuesday’s report shocked him.

“Unfortunately Madam Mayor, there’s never been a political will to correct this.”

He said he had received a report from one of the DA councillors who sits on the municipal public accounts committee that the district had used grant funding to pay staff’s salaries.

Nhlabathi said uMgungundlovu’s finances had reached crisis stage because the administration had been misleading council structures about the severity of the situation.

ANC’s Sibongile Mkhize said the concern about the district’s finances was shared across political parties.

District manager Dr Ray Ngcobo first confirmed that conditional grants were used to pay salaries and later changed his statement, saying it did not happen.

He started by saying that some grants allowed the municipality to use a portion of the funds on non-related costs but it was paid back after receiving income from other sources.

“We acknowledge, it’s not a correct principle,” he said.

However, he changed his tune when the DA and IFP questioned the legality of what they had done.

They also wanted to know who gave authority for the administration to use the grants for running costs as there was no council resolution.

Nhlabathi said Ngcobo’s contradictory statements were an insult to the executive committee.

IFP’s Bukelani Zuma said Ngcobo’s somersault left the councillors with more questions than answers about the district’s financial situation.

Ngcobo said the councillors were never misled as they received reports on a monthly basis.

“Those figures cannot lie because they come directly from the system.”

‘Culture of non-payment’ to blame for district’s troubles

Ngcobo blamed the culture of non-payment amongst the municipality’s customers, saying the debtor’s book was sitting at close to R600 million.

The defaulters include households, businesses and government institutions such as the Department of Education whose schools get water from uMgungundlovu.

“For the past three years we’ve been getting into a new financial year with a huge deficit from the previous years,” he said.

When he presented the draft financial recovery plan, which is hoped to turn things around, Africa said the municipality was losing 40% of its water — that is 400 litres for every kilolitre bought from Umgeni Water.

Some of this is through theft, ageing infrastructure and wastage by consumers. As part of the plan the municipality intends to intensify its collection rate —which is currently hovering around 65%.

Africa said illegal connections should be identified so that they could be legalised and funding should be allocated to the maintenance of the infrastructure. An expenditure committee will also be established to scrutinise all procurements for goods and services.

He said those who could not afford to pay for services should be urged to register for indigent status to qualify for six kilolitres of free water.

Ngcobo said they would also be cutting down on employee-related costs but closely monitoring overtime worked. The draft financial recovery plan will be considered for adoption by the full council on Friday


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