I have written to the MEC of Cooperative Governance and Traditional Affairs (CoGTA), Fikile Xasa, appealing to him for immediate intervention and investigation into the entire financial management system of Sunday’s River Valley Municipality (SRVM).
Up to 57 000 residents and consumers are being adversely affected by failures in terms of financial management in Sunday’s River Valley Municipality. It is alleged that there are various irregularities and non-compliance issues with the Municipal Finance Management Act (MFMA).
The Revenue collection rate in the Sunday’s River Valley Municipality is currently at less than 58%. This has resulted in major cash-flow problems in the municipality and an inability to pay creditors on time, including the Lower Sundays River Water Users Association. Service delivery is also severely affected by such failures due to this dismal collection rate.
The MFMA calls for efficient management and accounting information systems to be in place, including a system of internal control and further asks for weekly as well as monthly reconciliation of accounts.
Consumers are receiving accounts late (up to 3 months late in some cases), emailed and posted accounts for the same period differ from each other, payments are not being allocated to accounts, various accounts have queries attached to them with no action being taken, consumers are handed over to an outsourced collection agency that is not updated with new and relevant information relating to the accounts in arrears.
The municipality is blaming the issues on staff shortages, a lack of training, postal services and access to the system as reasons for the non-compliance with the MFMA.
Total Change is desperately needed in the financial management system of this municipality.
Continued failure in terms of non-compliance with the MFMA will have catastrophic consequences for the financial management and cash-flow of this municipality and in the end service delivery will be severely affected. This means that residents of this municipality will continue to suffer as infrastructure fails and creditors are threatening to revoke outsourced services to the municipality. — Vicky Knoetze MPL, Shadow MEC for Cooperative Governance and Traditional Affairs.