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.

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