A motion tabled by the Democratic Alliance in the Eastern Cape Provincial Legislature on millions owed by provincial and national departments to Eastern Cape municipalities will be debated during the Legislature sitting today. (subs: Tues, 23 March). It is vital that money owed to municipalities is paid immediately.
The motion seeks approval to have all outstanding monies owed to municipalities in the province quantified and paid by the end of this current financial year (31 March 2010). It also seeks approval for an investigation as to whether the interest owed (R4,38 million) is a cause of fruitless and wasteful expenditure. It will be interesting to know what the full outstanding amount of money due is for the whole province. It is anticipated that the outstanding amounts owed run into hundreds of millions of rand.
If there has been wasteful expenditure, heads need to roll and disciplinary action taken against officials as mandated in the Public Finance Management Act (PFMA). MECs need to account for their departments to the public in this regard.
With the Nelson Mandela Metro owed R57,238 million by the province and national departments owing R25,021 million, the combined debt owed to the Metro just from the state is R82,260 million. Of this the Education Department owes R30,918 million, mainly in school taxes and Public Works owes R19,024 million.
Other municipalities are owed large amounts which, due non payment, are hampering service delivery in these areas. In the Mnquma Municipality a staggering R19 million is owed. Being a small rural and poor municipality, this outstanding amount makes a sizeable portion of their budget. As a result of non payment, the library in the municipality had to be closed down due to financial constraints.
With Makana Municipality owed in excess of R11 million (8 million of this due from provincial Public Works) and several municipalities in a similar position it is time for radical action by the legislature to ensure prompt payment of these monies.
There is a plethora of legislation with regard to payment of monies due by government. The Public Finance Management Act (PFMA) is clear on this aspect and the responsibilities of accounting officers and other officials, yet the law is not being adhered to and being flouted.
While municipalities continue to suffer from declining bases due to economic hardship and poverty from many citizens in the province, there should be a concerted effort by MEC’s and Heads of Departments to ensure timeous payment of monies to try and balance their financial situations.
Clearly once again incapacity and lack of political will is hampering this process. With this being the case, MEC’s must stop making excuses about financial- and capacity challenges and come up with innovative ways to ensure payment to creditors — in this case municipalities.
Should this malaise carry on, service delivery will be further eroded as less funding reaches municipal coffers to service communities. Slow and lack of payment by both national and provincial spheres of government to municipalities in the province is serious and the lackadaisical attitude by these departments to not expedite quicker payment is of great concern.
For further information, please contact Dacre Haddon, MPL on 079 694 3788