SOUND FINANCIAL MANAGEMENT NEEDED IN SMALL MUNICIPALITIES – Bobby Stevenson, Shadow MEC for Finance

The financial viability of small municipalities in the province came under the spotlight at the recent Taking Legislature to the People-event, held in Burgersdorp.

During a question-session for oral reply, I asked the MEC for Provincial Planning and Treasury whether the Gariep- and Maletswai municipalities owed money to employee pension funds, Eskom, SARS, the Auditor-General and other any other creditors.

In the case of Gariep, it was revealed that Gariep owed its creditors R61.2 million as at 31 August 2014. This is a very large chunk of the municipality’s operating budget of 2014/15 of R122.1 million.

Maletswai Municipality’s outstanding debt amounted to R41.4 million while its operating budget for 2014/15 amounted to R129.7 million.

Since solid financial management lies at the heart of good service delivery it’s time that action was taken to deal with poor financial management at municipal level. Smaller municipalities such as Gariep and Maletswai are clearly not viable financially when they cannot even pay for basics such as the pension funds of their own employees, ESKOM and SARS.

For the 2012/13 financial year not one municipality in the Eastern Cape received a clean audit; 17 received adverse and disclaimer opinions — the highest of any province.  In comparison to the previous year, the Eastern Cape regressed instead of improving.

The question we need to ask ourselves is do we have officials with the right competency involved in financial management at municipal level. If one looks at the outcomes, it is clearly no.

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