Local Government is everybody’s business – Schmidt

VANDERBIJLPARK. – It is common knowledge that the Emfuleni Local Municipality (ELM) has been in dire financial straits for a number of years already. The Auditor-general’s latest report on the municipality’s financial position as at 30 June 2014 indeed describes a situation of grave financial concern.
“It is clear that the municipality needs to take urgent active steps to resolve its financial crisis,” says Adv Hendrik Schmidt, DA Member of Parliament and Shadow Deputy Minister of Mining.
At the June meeting of the Vanderbijlpark Chamber of Commerce, Schmidt informed members on figures in the Auditor General (AG)’s report which show that the municipality suffered massive losses of multimillions of rands in the 2013/14 financial year. Water losses, amounting to 34% of the total volume of water purchased by the municipality, cannot be accounted for. Emfuleni suffered a further loss of R278 million on electricity distributed by the municipality. These losses alone amount to a staggering R453 million while previous years’ figures don’t look any better.
More concerning however, is that during the 2013-14 financial year ELM incurred a deficit of R192 million and that its liabilities exceeded its assets by R160 million.
“As stated by the AG, these figures create significant doubt on the municipality’s ability to operate. In short, it means that had the municipality been a private company, it would in all probability have had to close its doors as it would have been regarded as being bankrupt in legal terms,” Schmidt said.
With regard to the reliability of information pertaining to the municipality’s duties to provide services of water, electricity and waste water management, the AG reported that the information issued by the municipality was not valid, accurate and complete when compared to the source information or evidence provided.
“These are very concerning statements as it is evident that ELM’s administration is not functioning as it is supposed to be. It was stated unequivocally by the AG that the financial statements submitted by ELM were not in all material respects prepared in accordance with the required legislation. In fact, the AG found that the municipal manager, as the accounting officer, did not adequately exercise oversight responsibility regarding financial and performance reporting in compliance with certain laws and regulations. It is clear where the failures of the ELM arise: an inept controlled council appointing a municipal manager running an administration of which a very high percentage of vacancies have not been filled,” Schmidt said.
(Mr Yunus Chamda, veteran ANC politician and Municipal Manager of Sedibeng District Council was, as an emergency measure, seconded to ELM for a period of three months, following the redeployment of the previous Municipal Manager of ELM, Sam Shabalala’s,).
“The AG also raised concern about the higher than average number of vacancies that exist in the administration, leading to a lack of professionalism with temporary appointments not accepting full responsibility of their duties. While underspending in the capital budget was noted, the under-expenditure in conditional grants was more concerning, as the combined effect had a negative impact on infrastructural spending. This resulted in a decrease in services being rendered and a lack of maintenance of municipal infrastructure,” Schmidt explained.
“It is the business sector that accounts for the highest usage of water and electricity and which provided the bulk of services to the municipality. You will therefore agree that Local Government is everybody’s business,” he concluded.
* Read Adv Schmidt’s complete speech on www.vaalweekblad.com