In dire straits


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.”

Leave a Reply