Limpopo Government attempts to rescue financially troubled munis

Provincial Treasury has developed terms of reference for the undertaking of forensic investigations on municipalities that invested over R200 million in Venda Building Society (VBS) Mutual Bank. The investigations are envisaged to commence by the end of June and be completed within a period not exceeding three months.
This was resolved by the Executive Council (Exco) during a meeting at the Premier’s Office last Wednesday. When briefing journalists during the Post Exco media briefing at the Office of the Premier the following day, Cooperative Governance, Human Settlements and Traditional Affairs (Coghsta) MEC Jerry Ndou said the Provincial Government is planning to approach the courts on behalf of Modimolle-Mookgophong Local Municipality in terms of Section 152 of the Municipal Finance Management Act (MFMA) for the stay of all legal proceedings including execution of legal process against the municipality.
This follows government’s decision to place the municipality under Section 139 of the Constitution. Ndou said the department considered subsection 139(1)(a) and subsection 139(1)(b) in order to determine the appropriate subsection for the intervention. He further stated that the department has, after consideration of the advantages and disadvantages of the two subsections resolved to place the municipality under Section 139(1)(b).
Notifications to this effect have been sent to the municipality, the National Council of Provinces, Provincial Legislature and the Minister of Cooperative Governance and Traditional Affairs informing them of the decision and the Exco resolutions in line with Section 139 of the Constitution, he stated.
“We have since sent teams of financial management, Information Technology (IT) and corporate services to try and help stabilise the municipality. We will consult with Provincial Treasury to assist with bail-out if necessary. We bailed out several municipalities before but we want to ensure that Modimolle-Mookgophong gets back on its feet,” Ndou said.
On stabilisation of Modimolle-Mookgophong and Mogalakwena Municipalities, Ndou indicated that the council also resolved that the Office of the Premier should work out a dedicated Public Service Programme for the deployment of senior management service members to the two financially troubled municipalities during July or August to assess the state of service delivery and present a report thereof to the Exco with key observations and key recommendations to address the identified service delivery challenges. He further highlighted that out of the R159,3 million Municipal Infrastructure Grant (MIG) allocated to Mogalakwena for 2017/18 financial year, by the end of March 2018 the municipality had only spent R69 million which is 43,4% of the allocated funds. He concluded by saying the assessment would assist government to get to the root of this underspending.

Story & photo: ENDY SENYATSI
>>endy@observer.co.za