NC municipalities run up R1.5bn bill

MUNICIPALITIES in the Northern Cape owe their creditors almost R1.5 billion.

This is according to a report released yesterday by National Treasury on local government’s revenue and expenditure for the third quarter of the 2017/18 financial year.

This report covers the third quarter of the municipal financial year ending on March 31 2018.

According to the report, municipalities in the Province owe R694.7 million for bulk electricity, R270 million for water, R10.9 million for PAYE, R33.7 million for VAT, R14.7 million for pensions/ retirement, R286 million for trade creditors and R61.5 million is owed to the auditor-general.

In terms of debtors, organs of state owe municipalities in the Province R880 million, while businesses owe R609 million and households R2.8 billion.

The total outstanding amount owed to municipalities is R4.49 billion. Of this amount, R3.87 billion is outstanding for more than 90 days.

Local municipalities spend a total of R550 million on salaries for staff and a further R38 million on the remuneration of councillors.

A total of R52.7 million is spent on contractual services.

The report is part of the In-year Management, Monitoring and Reporting System for Local Government (IYM), which enables provincial and national government to exercise oversight over municipalities, and identify possible problems in implementing municipal budgets and conditional grants.

“In-year reporting is institutionalised with most municipalities that consistently produce quarterly financial reports” the National Treasury document states. “The reporting facilitates transparency, better in-year management as well as the oversight of municipal budgets. This makes these reports management tools and early warning mechanisms for councils, provincial legislatures and officials in order to monitor and improve municipal performance.”