WHILE the preliminary report of the Auditor General gave the City of uMhlathuze the ‘thumbs up’, Mayor Elphas Mbatha said the municipality’s severe under-spending was a call for officials to ‘pull up their socks’.
Congratulations on a clean audit were short-lived when the Mayor announced that the City had sadly failed to spend R230-million on critical service delivery projects in the past financial year.
‘While the outcome of a clean audit is something we must celebrate and be proud of, we also need to spend money,’ he said.
‘We thank the Municipal Manager, the Chief Financial Officer and the Department of Finance for handling the finances in a manner which follows the law. However, the failure to spend the capital budget indicates that service delivery is at a very low level in this municipality,’ said Mbatha.
And it seems that the under-spending trend has continued with expenditure standing at 14.67% (R56.2-million) out of a draft adjusted capital budget of R383-million at the beginning of the new financial year.
At the end of September, an amount of R108,1-million was shown for orders that had been placed. However payment would only take place in the subsequent months and officials were unable to give exact dates thereof.
Cllr Louis Fourie questioned whether the Municipal Infrastructure Grant (MIG) spend of 67%, totalling R20.257-million out of R30.377-million, was inclusive of the previous year’s rollover.
Chief Financial Officer (CFO) Mxolisi Kunene said the rollover was not included in the budget as an application had already been submitted to National Treasury along with a business plan and a response was forthcoming.
Unbudgeted
Unbudgeted and unavoidable expenditure totalling more than R2.6-million for the quarter ending 30 September also came under scrutiny.
This included an amount of more than R1.1-million made to Traffic Management Technologies (TMT).
‘This is a very bad reflection. Surely when we do the budget, we should have an estimated amount of what should be paid to TMT,’ said Cllr Fourie.
Other unavoidable expenditure was various ‘entertainment’ items for electricity administration, Project Management Services, Parks, Sports and Recreation and the Batho Pele session totalling more than R104 246.
The City was also expected to fork out more than R9-million for legal fees for the period between 1 July to 30 September.
‘The Municipal Manager and Corporate Services have already met with the respective service providers to cut down the legal fees by at least R3.3-million,’ said the CFO.
