Enoch Mgijima in capital spend crisis

HAVING spent only R16.4-million of its capital budget grants totalling R60.7-million, Enoch Mgijima local municipality has now approved a R40-million loan to pay salaries and part of its debt to Eskom.

A report, tabled at a council meeting on January 29 and detailing the municipality’s 2017/18 financial performance as at the end of December, also outlines a crisis in revenue collection.

● The mid-year budget assessment report reveals the local authority spent only R136 000 of its R5-million integrated national electrification programme grant from national government. This is despite outstanding service delivery projects including electricity infrastructure that has not been serviced in 13 years;

● Of its R44.5-million municipal infrastructure grant the municipality has spent only R12.9-million;

● Of a R5.9-million financial management grant, it spent R1.7-million;

● Of its R2.3-million municipal demarcation transition grant it spent a mere R533 000;

● Of a R1.223-million grant for the expanded public works programme R1.18 million was spent; and

● Of an infrastructure skills development grant of R1.8-million, only R16 000 was spent.

“Our own funds contribution towards the capital budget also shows under-expenditure. “Only 27.8% of our own funds budget has been used,” municipal manager Chris Magwangqana says in the report.

“In rand and cents terms, only R417 000 of R1.5-million we allocated from own funds has been spent.”

The report states there was a need for accelerated service delivery, with revenue collection 12% below the service delivery budget implementation plan.

This shows the municipality has collected only 50% of its cash revenue. The report says revenue collection in the towns of Tarkastad, Hofmeyr, Ilinge, Whittlesea, Sterkstroom and Molteno is very low.

“There is currently an under-collection of cash receipts against the approved level of collections by R39.8-million,” Magwangqana says.

“It must be noted that in the period under review, R25-million in respect of bulk purchases remained unpaid.”

Acting positions continued to be filled despite not being budgeted for, he noted.

The municipality is indebted to accommodation establishments and universities. The Dispatch recently reported that the municipality is to be a target of a troika reshuffle as the ANC moves to stabilise the struggling local authority. —