Financial disparities at GMM uncovered
The recently released Section 71 report indicated that the Govan Mbeki Municipality owed their creditors R4.7b whilst being owed R3.6b for services provided.
According to a recent Section 71 report, the Govan Mbeki Municipality (GMM) has a debt of R4.7b to its creditors while it is owed R3.6b for services provided.
The Section 71 report uncovered financial discrepancies in the Emalahleni and Govan Mbeki Local municipalities.
Trudie Grovè-Morgan, the DA spokesperson at the Department of Cooperative Governance and Traditional Affairs (CoGTA), said it was concerning to see how the department had turned a blind eye to these municipalities’ fiscal management.
“The flaunting of treasury regulations and the Municipal Finance Management Act (MFMA) in these municipalities is alarming.
“Noteworthy, the department of CoGTA has a mandate to ensure sustainable management of finances across municipalities.
“It is high time the department works toward improving these municipalities’ expenditure, revenue collection and borrowing.
“Considering that these two municipalities have struggled financially since 2018 when they accumulated R13b debt to their creditors, as DA, we feel placing them under administration would be beneficial,” said Grovè-Morgan.
GMM Mayor Nhlakanipho Zuma said during the State of the Municipal Address that before he could reshuffle his mayoral committee, there was a need for a Revenue Enhancement MMC, whose role would be to collect money owed to the municipality.
Councillor Jabu Zwane is now in that position. The council was supposed to adjust its budget for the first quarter in March, but Zuma said it should be downscaled.
He said they would only move unused money to an area where it was needed, such as legal services.
Zuma called the GMM dysfunctional because it had to budget for a huge deficit.
Zuma said the municipality was at a R2.9b deficit, while the MFMA only allowed a municipality to have an unfunded budget if it had a budget plan.
Zuma said the GMM’s budget plan would only focus on prioritised services because they could not do anything else.
ALSO CHECK: Huis brand op Bronkhorstspruit
According to Zuma, there was an improvement in their payments to Eskom and Rand Water, though it was not sufficient.
The interest alone consumed whatever the municipality paid. This included interest of R3.4b for Eskom’s debt annually.
“Our budget might give the appearance we are progressing, while, in fact, we are not. Grant funding makes it look positive,” Zuma told the council.
Grovè-Morgan said in a statement that the DA in Mpumalanga had written to CoGTA MEC Mandla Msibi to consider implementing stricter measures in municipalities facing a financial crisis.
