Are administrators worth their weight in gold?

With growing concerns about administrators sinking municipalities and state entities instead of rescuing them, the cash-strapped Emfuleni Local Municipality in Gauteng has splurged more than R800,000 in four months, on two administrators’ salaries.

According to information revealed by Gauteng cooperative governance MEC Lebogang Maile, in an oral reply to the DA questions in the provincial legislature, the team of four administrators arrived in the municipality in August.

Two were paid by the Gauteng provincial cooperative governance department and the other two administrators by Emfuleni municipality.

They were paid an hourly rate of R2264 each, in line with Treasury regulations which constitute 52 hours per month, with each administrator pocketing about R111,748 a month, which works out to a R893,984 salary bill for the embattled municipality in four months.

READ MORE: Emfuleni dysfunctional with little ‘evidence of improvement’

The DA charged that it was unacceptable that the cash-strapped municipality continued to pay ridiculous salaries to administrators while facing a serious cash flow problem.

Stuck in debt

This was despite the municipality battling to pay its R2.3 billion Eskom bill and R100-million Rand Water debt, as well as its arrears with other service providers.

“Service delivery has completely collapsed in Emfuleni under the watch of these administrators who are failing to rescue this municipality from its serious financial situation. We see no use in having a team of four administrators if this municipality continues to move from one challenge to another with no lasting solution.,” Kingsol Chabalala, DA MPL in Gauteng, said.

He said Maile needed to review the work done by these administrators in Emfuleni so far to establish whether they were assisting in rescuing this municipality from its long-term financial and service delivery problems.

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The DA in Tshwane also lamented that the metro was in a healthy financial position when administrators arrived in March but by the time they left, the metro was in a worse financial situation.

Between March and the end of June this year, the administrators had turned a budget surplus of R284 million to a deficit of R4.4 billion, with cash reserves down from R4.8 billion to R2.2 billion.

“When they arrived in March, the metro was in a positive financial status. We were in no financial difficulties as claimed when the harshest intervention, which dissolved the council instead of just bringing in an administrator, was brought in. Unlike in Emfuleni, where the council was kept intact, we were slapped with the harshest, extensive intervention, which of course has since been thrown out by the court as invalid,” Mare-Lise Fourie, member of the mayoral committee (MMC) for finance, said.

Prasa

Trade unions have also lamented that the embattled Passenger Rail Agency of SA (Prasa) had nothing to show for the R3.8 million it paid Bongisizwe Mpondo, who was brought in as an administrator for nine months before his appointment was declared unlawful.

Mpondo’s work included expediting Prasa’s modernisation programme, implementing security, developing capacity to manage Prasa’s capital programme and competitive procurement, “to ensure effective consequence management as well as review Prasa’s business model”.

READ MORE: ‘No hope for Prasa’ after extensive pillaging of infrastructure

But Prasa executives reported irregular expenditure of R1.3 billion in the 2019-2020 financial year and R23 billion of unspent capital.

Lack of security has left the rail infrastructure pillaged and destroyed, leading to a collapse in passenger services.

According to the United National Transport Union (UNTU), it was “disgraceful” that an amount of over R3 million was paid to Mpondo, at a time where the entity was experiencing such severe cash troubles.

“Prasa, to date, failed to pay its employees who worked overtime in March and April 2020, the monies due to them in terms of the Basic Conditions of Employment Act yet the payment could be made to Mr Mpondo days before his appointment was declared unlawful by the Western Cape High Court. There can be no justification for that,” the union’s deputy general secretary, Sonja Carstens said.

Prasa spokesperson, Makhosini Mgitywa, referred questions to Transport Minister Fikile Mbalula’s spokesperson, Ayanda Allie-Paine, who did not respond to questions.

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