The Mayor, Chief Financial Officer and Municipal Manager of Gariep Municipality must be suspended for financial mismanagement. If the Eastern Cape MEC for Local Government, Mlibo Qoboshiyane, is at all serious about improving financial controls in the province he needs to take action and make examples of those officials who ignore the rules.
According to the auditor general in 2009/10, irregular spending in Eastern Cape municipalities increased from R288 million to R813 million and fruitless and wasteful expenditure from R10 million to R27 million. These trends will continue unless officials are forced to account and take responsibility.
As a result of previous financial negligence, the Democratic Alliance had success in getting the MEC to institute a forensic investigation into Gariep municipality earlier this year. However, the dodgy finances continue, in spite of the ongoing investigation.
Some of the latest horrors uncovered by DA councillors in Gariep include the municipality going over its overdraft limit of R5 million to R7,4 million without the knowledge of the council.
In addition, the council wishes to borrow R20 million from “different financial institutions” for earth moving equipment (R9 million), Eskom infrastructure (R6 million) and upgrading the Burgersdorp town hall (R5 million). The council has not been provided with any further details.
How will the municipality repay such a loan? It cannot even pay its current creditors. In one case Gariep is being sued for R2,3 million by a private company for services rendered. The municipality is also unable to pay its bill of R2,5 million to Eskom.
Council has not been informed as to the implications this borrowing would have on rates and taxes in a community were 65% of the population is indigent.
In terms of the Municipal Finance Management Act (MFMA) the council has to inform National and Provincial Treasury and inform the public.
The lack of information in guiding elected councillors to make informed decisions appears to be a deliberate cover up to mislead council.
The council agenda of the meeting of 10 November had none of the relevant documents attached and no notices was placed on public notice boards.
In addition, the flattering expenditure of the Municipal Infrastructure Grant (MIG Grant) of 99.6 percent has allegedly been used to finance operating costs and not infrastructure expenditure for what it was intended.
I have written to MEC Qoboshiyane asking him to intervene and suspend these officials and the mayor.
It is hoped that again the MEC will act with vigour as he did when he instituted a forensic investigation into this municipality.