In dire straits

Enoch Mgi­jima Municipality run­ning out of cash

The Rep - - FRONT PAGE - ZOLILE MENZELWA

ENOCH MGI­JIMA Municipality is fast run­ning out of money to fund its bud­get for the 2016-17 fi­nan­cial year.

In the mid-year bud­get as­sess­ment re­port tabled in a spe­cial coun­cil meet­ing on Tues­day, in­di­ca­tions were that suf­fi­cient cash would not be avail­able to fund the cap­i­tal and op­er­at­ing bud­get by June – this due to low rev­enue col­lec­tion over the past six months.

Ex­ec­u­tive mayor Lindiwe Gunuza Nk­wentsha said the out­stand­ing debt at the end of De­cem­ber was R552-mil­lion – an in­crease of R163-mil­lion over the six months since June, when it was R389-mil­lion.

“Some of these in­creases may be at­trib­uted to debts taken over from the for­mer mu­nic­i­pal­i­ties of Nk­wanca and Tsol­wana,” she said.

Coun­cil’s in­vest­ment port­fo­lio in­di­cated that R78-mil­lion was in­vested at the end of De­cem­ber last year. This amount in­cluded all bal­ances in the municipality’s ac­counts, in­clud­ing grants.

“What is held in the mu­nic­i­pal call de­posit ac­count has shrunk from R156-mil­lion in June 2016 to R39-mil­lion as at De­cem­ber and in­di­cates that the bud­get is mainly funded from call de­posit in­vest­ments,” the mayor said.

It was pro­jected that the call de­posit ac­count held for in­vest­ment would be wiped out by the end of this month.

Grants to­talling R142-mil­lion were re­ceived dur­ing the first half of the fi­nan­cial year with R28-mil­lion spent in the first six months. At the end of De­cem­ber last year 38%, or R21-mil­lion, had been spent from the mu­nic­i­pal in­fra­struc­ture grant, while the In­te­grated Na­tional Elec­tri­fi­ca­tion Pro­gramme ex­pen­di­ture was at 88%.

“Op­er­at­ing ex­pen­di­ture of R240-mil­lion was spent against the year-to-date bud­geted ex­pen­di­ture of R418-mil­lion,” she said.

The op­er­at­ing bud­get was at a deficit of R26-mil­lion.

The cap­i­tal ex­pen­di­ture for the first six months was R43-mil­lion, an un­favourable de­vi­a­tion of 36% against the ser­vice de­liv­ery bud­get im­ple­men­ta­tion plan fig­ure of R67-mil­lion. Cap­i­tal ex­pen­di­ture was pro­jected to be R84-mil­lion by the end of June with a net op­er­at­ing deficit of R74-mil­lion pro­jected for the year un­der re­view.

DA coun­cil­lor Jerome Shaw said the fig­ures painted a bad pic­ture as the municipality was fail­ing to col­lect, there was no ser­vice de­liv­ery and the cur­rent crop of lead­ers would not be able to steer the lo­cal au­thor­ity out of the sit­u­a­tion.

DA cau­cus leader Chris de Wet said more than R100-mil­lion had been spent on lux­ury cars in a few months, while there were elec­tric­ity out­ages.

“We buy cars for the mayor [Gunuza Nk­wentsha] and speaker [Mzox­olo Peter]. The may­oral com­mit­tee should re­sign be­cause they can not do their jobs,” he said.

“Get rid of the cars we do not need. Cor­po­rate gov­er­nance is fail­ing.”

Bud­get and trea­sury port­fo­lio head Madoda Papiyane said if the DA’s man­i­festo was good, the party would have been voted into power.

“You are an op­po­si­tion and you should get used to that. If you go to other mu­nic­i­pal­i­ties with the same grad­ing as us, they have more ex­pen­sive cars. The bud­get for the cars was ap­proved by coun­cil.”

Coun­cil speaker Mzox­olo Peter said it was un­fair to say it was wrong to buy the cars when the law made pro­vi­sion for it. The re­port was for coun­cil to look at the strengths and weak­nesses of the lo­cal au­thor­ity and plan ac­cord­ingly.

“There was no way we were go­ing to be 100% while man­ag­ing a tran­si­tion. We have merged dif­fer­ent mu­nic­i­pal­i­ties that had dif­fer­ent ways of work­ing.”

The may­oral com­mit­tee should re­sign . . . Get rid of the cars we do not need

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