Towns’ finances show no planning

2016-11-23 10:04
Towns’ finances show no planning 
KZN municipalities owed R13,5?billion, mostly by government.

Towns’ finances show no planning KZN municipalities owed R13,5?billion, mostly by government. (File)

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Massive underspending on critical infrastructure and the enormous amount of money owed to KZN’s municipalities were what caused opposition parties to lambast the state of KZN municipalities’ financial operations on Tuesday.

During the debate on the 4th Quarter Consolidated Statement of Municipalities’ Budget, municipalities came under heavy criticism for failing to spend grants exclusively apportioned for specific projects by the National Treasury.

The funds mostly meant for infrastructure had to be surrendered back to the National Treasury as municipalities failed to spend them.


41 municipalities underspent­ on operational expenditure to the tune of R3,3 billion

R2,3 billion was underspent­ on capital expenditure­

R748,9 million in unspent­ conditional grants was returned to the National Revenue Fund in the previous financial­ year

In total R1,7 billion in unspent conditional grants was returned to the National Revenue Fund over the 2010/11 to 2014/15 Medium Term Expenditure Framework.

Opposition MPLs described the situation in municipalities as a “sorry state of affairs”.

“There is no silver lining to the report on KZN municipalities. And there is no happy ending to this horror story, certainly not under the watch of the ANC,” said DA MPL Francois Rodgers.

“Twenty-two years since democracy and local government continues to regress in its mandate of effective governance, with absolutely no concrete action plans forthcoming. Instead, it remains the political dumping ground of failed cadre deployment with the people of KZN having to shoulder the burden.”

DA Co-operative Governance and Traditional Affairs spokesperson George Mari said the root cause of under-expenditure is poor management at municipalities.

“The state of KZN municipalities continues to paint a worrying picture with very little improvement in areas of finances and especially expenditure.

“It is criminal to underspend on operating expenditure let alone capital expenditure,” he said.

IFP MPL Lourens De Klerk said the province’s municipalities were in a “dire” financial state. He blamed this on “poor planning and management”.

“Our municipalities are failing the people of KZN,” he said.

The report also revealed that KZN municipalities are owed a staggering R13,5 billion, mostly by government departments.

NFP MPL Happy Khuzwayo said she was “deeply concerned” by the debt owed to municipalities.

“This means that municipalities are operating at a loss and this impacts negatively on their ability to deliver services.

“We encourage the provincial government to continue intervening and assist municipalities with capacity building and financial management,” she said.

EFF MPL Vusi Khoza said the debt was “shocking”.

“It is embarrassing to note that government departments and state entities are the worst offenders. Government departments should lead by example and pay their debts on time.

“The failure by municipalities to collect debt is an indictment to highly paid municipal managers whom some of them earn more than the premier of the province,” he said.

Finance MEC Belinda Scott said the provincial Treasury was providing many programmes aimed at helping financial support to municipalities.

“The municipal support programme supported over 14 municipalities with financial management,” she said.

Read more on:    pietermaritzburg  |  msunduzi municipality

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