Growth agency’s cash crash

Staff leave in droves as ADM’s Aspire budget is not enought to pay salaries

BARELY a year after Amathole district municipality (ADM) splashed millions on a failed rural toilet project, its development agency, Aspire is experiencing such a severe cash crisis that it can’t pay its staff.

As a result, senior Aspire officials are said to be resigning in droves, while some critical posts – such as for chief operations officer and human resources manager – remain unfilled due to a lack of finance.

This is contained in a confidential report tabled in council earlier this year, and which for the first time revealed a bleak picture of operations at the agency.

The confidential report revealed that Aspire’s R12.5-million budget for 2016-17 was not enough to pay salaries or fill vacant, critical posts.

The report revealed that the agency’s board had initially sought a budget of R27-million from ADM, but only R12.5-million was approved.

Their salary bill stood at R18.1- million at the time, and has since been cut back to R13.1-million.

The report stated that the then Aspire board decided that the chief operations officer position would not be filled and “will be changed to director [of] operations, so as to reduce the salary thereof”.

It further said the board had decided not to fill the positions of human resources manager and project manager for the small-town regeneration unit, company secretary and that of executive personal assistant to the chief executive because of the lack of funds.

It said the company secretary work would be “outsourced as and when needed”.

“This is not a good business decision, but due to financial constraints, the board had to take such a decision,” stated the report.

The report further said that the non-filling of the executive positions would give the agency an opportunity to revise the salary scales of the affected positions to manage the overhead costs of the agency.

“The board also resolved that the overheads be cut from R10.2-million to R6-million and the salary bill be cut from R18.1-million to R13.1-million,” it read.

The agency is also said to be facing “a worrisome” exodus of staff at all levels, “as a result of financial instability, unforeseeable future and job uncertainty”.

The report revealed the board had removed key day-to-day activities to balance its R12.5-million budget.

“This may have a negative effect in the long run and staff morale seems to be very low and employees are looking for alternative positions due to funding challenges.”

ADM spokesman Siyabulela Makunga had not responded to emailed questions at the time of going to print, while attempts to obtain comment from Aspire proved fruitless.

Earlier this year, three senior Aspire employees were arrested by the Hawks on allegations of fraud and corruption. They are out on bail.