IOUs will cause financial trouble for municipality
THE Thabo Mofutsanyana district municipality may be heading for financial trouble with a shortfall of 13% purported as the new fiscal year begins in July.
With an annual budget of about R100m, the use of IOUs will mean that the municipality will start the new year with a 13% shortfall.
This is according to the DA, which said in a statement that the district needed intervention from the provincial government.
The party said the district was fast running out of money due to “reckless spending”.
In the meeting, it was proposed that the municipality applied for a R5m overdraft and cut spending drastically. However, the ANC said suppliers should be given “IOUs” and be persuaded to accept payment in the new financial year, which would leave a shortfall.
The district has jurisdiction over Maluti-A-Phofung, Nketoana, Setsoto, Phumelela, Matsopa and Dihlabeng local municipalities.
In the last council meeting, it revealed that at the current rate of spending, the municipality ran the risk of having a R 14.5m shortfall in its budget by the end of the financial year, which ends in June.
The New Age could not get hold of the cooperative governance head of department to determine if any kind of assistance will be provided to the municipality.
DA councillor Alison Oates said she would request the Municipal Public Accounts Committee to make an urgent intervention in Mofutsanyana to ensure the crisis was averted.