Turnaround strategy needed to save ELM
Without access to its bank accounts, the municipality will be unable to pay for critical services, impacting its service delivery mandate.
SEDIBENG.- Gauteng’s MEC for Finance and Economic Development, Lebohang Maile met the Executive leadership of the Emfuleni Local Municipality (ELM) on Sunday.
The reason for the meeting came about as a result of the provincial governments’ concerns regarding the municipality’s state of finances and their challenges. Earlier this month, Eskom attached the municipality’s bank accounts to recover more than R8b in debt. Earlier last week, Maile met ELM Finance MEC, Hassan Makola and Executive Mayor, Sipho Radebe.
Sunday’s meeting was a follow-up on the state of the municipality’s finances.
“We want the municipality to function optimally and to deliver services to the residents of Emfuleni. If the municipality does not make drastic changes, we will call on the two spheres of government to take action,” Maile warned.
He added that the attachment of ELM’s account is ‘catastrophic’ for service delivery. Meanwhile, Eskom said that it has, since 2018, exhausted all legal avenues to secure payment from the local council. The amount owed by Emfuleni represents approximately 10% of the total R82b owed
by three Gauteng municipalities to the power utility. ELM recently received a qualified audit report from the Auditor General of South Africa for the 2022/2023 financial year, which repeated the audit opinion from the previous financial year.
Speking to the media, Maile said the court’s decision will affect the provision of other services to residents as the municipality will be unable to access its funds.
“Firstly, without access to its bank accounts, the municipality will be unable to pay for critical services, impacting its service delivery mandate. Secondly, the inability of the municipality to sell electricity directly to the consumer means it is unable to generate much-needed revenue,
plunging it into a cycle of debt. Thirdly, the failure of Eskom to recover the debt owed to it has devasting consequences for the broader provincial economy.”
Maile further said that the provincial government and Emfuleni are in talks to develop a turnaround financial strategy for the municipality.
“Another initiative that has been explored and that is to be expanded is the audit preparation workshop where the roles of municipal managers, chief financial officers, audit committee chairpersons and chief audit executives were highlighted for the current audit process,” the MEC concluded.
