Amathole district told to fix financial woes

The Bhisho legislature last week gave the cash-strapped Amathole District Municipality 30 days to table a comprehensive report detailing how it would address its financial and administration woes.

This, after the legislature’s portfolio committee on co-operative governance and traditional affairs (Cogta) found that the ailing municipality was technically bankrupt and was now using grant funds to pay salaries while also struggling to settle long standing debts.

The ever-ballooning salary bill currently stands at R745m a year – about 49% of its R1.5bn annual budget.

This comes at a time when Raymond Mhlaba Municipality DA councillor Ernie Lombard, laid criminal charges against ADM mayor Nomfusi Nxawe and municipal manager Thandekile Mnyimba for allegedly failing to deal with sewage spills in Fort Beaufort.

ADM is responsible for water and sanitation in six local municipalities under its jurisdiction.

In a report dated August 7, tabled at the legislature on August 15 by ANC MPL and committee chair Mninawa Nyusile, the committee gave ADM until mid next month to provide a report on how it would address some of these challenges.

Nyusile’s report comes after the committee had conducted oversight visits to ADM, Joe Gqabi district, Alfred Nzo, Chris Hani, Sarah Baartman district municipalities and Nelson Mandela Bay Metro.

The portfolio committee found that ADM’s organogram was unreasonably high and that its entire equitable share “goes to compensation of employees rather than to service delivery”.

It further found that ADM was technically bankrupt and that its expenditure exceeded its income, while revenue collection was very low.

The committee found that ADM has owed Amatola Water Board and the department of sanitation & water affairs R50m since 2006.

“The district further owes an amount of R143m to their top 10 creditors. These creditors have been owed since last year while the municipality does not have money in its bank account,” wrote Nyusile.

Nyusile recommended that the provincial Cogta department develop a strategy that would assist the district address these anomalies “to ensure service delivery is not compromised”.

Mnyimba confirmed the committee had visited his district and that a report detailing challenges in the municipality had been presented to the team.

Mnyimba said they had briefed the committee about “strategic interventions” to turn the institution around.

Meanwhile Lombard confirmed he had opened a case against Nxawe and Mnyimba.

Mnyimba also confirmed he was aware of the criminal case against him and Nxawe. He said ADM had already appointed a service provider to rectify the problem.

Its entire equitable share [of ADM] goes to employees salaries rather than to service delivery