Muthambi lashes ‘bankrupt’ Eastern Cape municipality

The Amathole district municipality in the Eastern Cape will be unable to pay salaries beyond this month as its financial crisis continues to deepen.

The portfolio committee on cooperative governance and traditional affairs (Cogta) chair Faith Muthambi this week ordered the cash-strapped municipality to reverse the decisions it had made to become bankrupt.

“You were supposed to have reviewed what you realised was illegal. You see that those decisions render you unable to meet the mandate of the municipality to deliver services to the people,” Muthambi said.

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The decisions included paying its municipal manager and other senior executives way above lawful salary levels. It also remunerated employees at grade seven instead of grade six, which ate into the capital budget.

It received a disclaimer audit opinion in respect of the 2018-19 financial year and future audit reports were hopeless. The municipality blamed its situation on bloated staff compliments while its salary scales were illegally raised by the previous administration.

Its salary bill was approximately R800 million, way above the share it received from the government of R400 000. Local government experts said if the municipality was a company, it would be declared insolvent and put under liquidation.

At a committee meeting on Wednesday, deputy minister of Cogta Obed Bapela said there was a serious rift between the municipality and the province. Department officials had previously raised the matter of a lack of support to the municipality from the provincial department.

But the claim was denied by provincial Cogta MEC Xolile Nqatha. He submitted evidence to the committee indicating his department’s support of Amathole since 2016.

Amathole mayor Khanyile Maneli told the committee the municipality was able to pay salaries to councillors and staff until April.There was uncertainty about payments after that date due to budget challenges.

Bapela said his department would intervene to restore trust between the province and municipality. Muthambi urged Nqatha to brief regularly on the progress regarding the implementation of section 139 (5) (a) in the district.

She appealed to the two sides to meet with the national Cogta department as soon as the auditor-general had briefed parliament about the 2019-20 audit outcomes.

The failing municipality had become a disappointment to President Cyril Ramaphosa’s plan to turn district municipalities into centres of service delivery