Oudtshoorn is on road to financial recovery

THE past six months has seen Oudtshoorn municipality dramatically turn around its dire financial situation after the previous council administration had been replaced.

Oudtshoorn mayor Colan Sylvester this week said that since his administration took over the running of the council in August the municipality’s balance sheet had improved significantly from a situation where its bank accounts were empty, and creditors were demanding what was owed to them.

He said the bleak financial situation included a cash deficit of R98 million in February 2016. The municipality owed Eskom R54m. Housing funds were misappropriated by R14m, unpaid creditors exceeded R70m, and the municipality’s management structure was left vacant.

An excessive number of temporary staff carried “outside the organogram” increased staff up to 1 100 employees. “Six months later, the current administration is pleased to announce that, following implementation of the financial recovery plan, hands-on oversight by council and the appointment of the top structure, the situation has improved significantly,” Sylvester said.

Housing funds have been paid in excess of R14m and creditors reduced by some R25m. Eskom debt has also been reduced to R16.6m.

“We have saved approximately R2m on temporary staff cut-back(s).

“The organisational structure was reviewed, restructured and reduced to 850 staff. There is also a reduction in overtime, standby and acting allowances,” said Sylvester.

He said the municipality had prepared a credible revised and new budget going forward.

In total there has been a turnaround of about R60m since the municipality’s administration started with a R40m improvement over the last 12 months.

“It is our duty to improve financial management systems across expenditure, revenue and debt to determine the most effective way of solving the municipal financial problems.

“With the above financial status, we are confident that the current administration has shown commitment to improve the livelihoods of the people of the greater Oudtshoorn and has made huge strides to restoring trust and confidence of the community to the council, with its finances,” Sylvester said.

He said management would ensure that the Oudtshoorn Municipality was well governed with a holistic approach on strategic leadership, institutional stabilisation, transformation, financial management and focused sustainable service delivery.