Warning on CHDM liquidity

The Chris Hani District Municipality (CHDM) performance audit committee has warned that the municipality is likely to face liquidity challenges due to non-collection of revenue and due to “huge problems of irrecoverable debt”.

Performance audit committee chair Ananiah Langa presented a progress report on audits for the financial year ended

2017/18 on Monday during an ordinary council meeting.

Langa said the culture of non-payment for municipal services rendered was demonstrated by an increasing debtors’ balance which currently was at

R1.37bn with R1.26bn projected as irrecoverable debt.

“The average 13.1% collection rate on an outstanding debtors’ balance of R1.37bn needs a robust revenue collection strategy driven politically.

Another issue is of irregular, fruitless and wasteful expenditure which costs the municipality huge sums of money.”

Langa indicated that one amount of R516,444.35 had been classified as irregular, yet appeared not to meet the definition of irregular expenditure based on numerous failed attempts to secure quotations for the purchase of clothing.

Langa also slammed directorates which performed poorly in their key performance area (KPA) in the quarter ending September 30 and suggested there be corrective measures for non-achievement.

“Certain directors do not contribute to some KPAs and in the next quarter we have recommended that we focus on the underachieved areas and request reasons. Corrective measures for non-achievement need to talk directly to why some KPAs were not achieved.”

The overall institutional performance for CHDM for the quarter under review was 68% and was attributed to several factors, including the lack of accountability agreements, staff performances which were not monitored and assessed on a regular basis, timeous submission of files and the evidence of work done not being in line with set targets.

In order to improve performance, accountability and productivity, Langa recommended that the municipality considered entering into a three-month performance contract with the acting municipal manager to ensure the achievement of institutional quarterly targets.