DA wants EMLM under administration over R58m underspending

THE DA has indicated its concerns about the deteriorating financial situation at the Enoch Mgijima Local Municipality (EMLM).

DA caucus chairman Chris de Wet said the quarterly budget monitoring report tabled by executive mayor Lindiwe Gunuza-Nkwentsha on Monday, and which reflects the financial administration of the municipality for the last quarter of the 2016-17 financial year, and the performance of the full financial year, reflected that the authority had underspent by R58-million, which represents 47% of the annual capital budget.

“This means that R58-million of the allocated and budgeted funds to be spent on infrastructure like electricity supply, roads and maintenance etc was not used during the 2016-17 financial year. This comes at a time when our municipality and towns are teetering on the brink of collapse.”

De Wet said the state of affairs could “be solely attributed to the governing ANC being unable to govern our municipality and its citizens. We are all suffering as a result of their maladministration”.

The unspent funds allocated from central government would have to be returned, resulting in the poorest residents of the community suffering the most.

A further concern, he said, was the under-collection by 25% of budgeted revenue which represented R161-million.

“This under-collection will inevitably put huge strain on the reserves and resources of the municipality. It should also be noted that, although the municipality inherited cash reserves of over R150-million from the old Lukhanji Municipality, there is currently nothing left. The financial viability of the municipality is at serious risk.”

De Wet said the expenditure reflected during the last quarter of the financial year was also disturbing with the municipality paying out R3.1-million for fuel in April, May and June.

With this amount, 30000km could have been travelled every day, including Saturdays and Sundays, of the entire five months. In addition, an amount of R1.8-million was paid out to travel agencies, representing about R20 000 every day.

The municipality, in addition to its monthly salary bill of R18.3-million, also paid a further R1.9- million in overtime. “From the aforesaid, it is clear that the administration has all but lost control over expenditure, and it has now become a free-for-all.”

De Wet said the DA had consistently opposed all forms of maladministration and over-expenditure, but that due to the ongoing internal factional fighting within the ruling party, and a general lack of leadership and expertise, the ANC had allowed EMLM to deteriorate to the brink of financial collapse.

“This leaves the DA with no alternative but to consider approaching the relevant MEC to place the municipality under administration. This might be the only way to save the Enoch Mgijima Municipality from bankruptcy and total collapse.”

EMLM had not responded at the time of going to press.