North West Provincial Legislature’s Standing Committee on Provincial Public Accounts (SCOPA) led by the Chairperson, Mahlakeng Mahlakeng has requested the Department of Finance, Economy and Enterprise Development and Department of Local Government to urgently assist Ditsobotla and Lekwa-Teemane Local Municipalities to develop a recovery plan that will ensure that salaries and statutory deductions are paid in the last three months of the financial year ending June 2017.
This came after the Standing Committee held an oversight meeting with Mayors and senior management of both municipalities, where they admitted to delays on payments of salaries of employees and statutory deductions including, South African Revenue Services deductions, Unemployment Insurance Fund and other Municipal Gratuity Fund Deductions dating from August 2016.
Mahlakeng said the departments should assist the municipalities in developing the recovery plan and provide key personnel who will ensure that salaries and statutory deductions are paid in the last three months of the financial year ending June 2017.
“The Municipal Public Accounts Committees should also be involved in the turn-around strategy. There is no political and administrative leadership in both municipalities hence there were delays on such important legal payments affecting employees. In Lekwa-Teemane local municipality, the position of the Chief Financial Officer has been vacant for a long time, and consultant is being paid over R3 million to manage its Budget and Treasury Office.
“There is also no clarity on whether the more than three Provincial Government’s interventions at these municipalities yielded any positive results,” said Mahlakeng.
Local Government and Human Settlements Head of Department, Ephraim Motoko said the department is assisting with many interventions including secondment of senior managers and implementation of valuation roll, credit control debt collection, and revenue enhancement measures.
“We are also assisting with collection of debt from different government departments. Stability in senior management positions has been a challenge in these municipalities,” said Motoko.
Linda Negovhle from the Department of Finance said both municipalities’ budget is not sustainable and they are unable to pay its budgeted obligations including creditors due to low revenue collection and high consultancy fees on finance and legal functions which are part of their organograms.
“Both municipalities have outsourced its credit control functions however there is no improvement in collection rates. They also cannot pay Auditor General, their owing Eskom more than R14m , 3rdParties and SARS which resulted in constant accruals.
“At Lekwa-Teemane, Equitable Share (which includes administration cost and community services) is R39 million whilst employee cost is only R57 million. In Ditsobotla the Equitable Share is R89,9 million whilst employee cost is R169.9million. Their salaries are then funded by their revenue collection which is not reliable, that is why they find themselves in this situation,” said Negovhle.
The Acting Municipal Manager at Lekwa-Teemane Local Municipality, Mokgatlhe Ratlhogo said employees and councillors’ salaries were paid on 27 March 2017 instead of the prescribed date of the 25ththrough the conditional grants on understanding that Dr. Ruth Segomotsi Mompati District Municipality could intervene through provision of a short-term loan of R3 million.
“A Special Municipal Council meeting in March 2017 has also resolved to pass a resolution to request the Department of Local Government and Human Settlements to assist with an amount of R14, 1 million for remuneration and salaries for April to June 2017 as the amount will be covered during the implementation of revenue enhancement strategies.
“We still owe SARS for January to March 2017,” said Ratlhogo.
He said the municipality has pleaded with both departments to assist on filing critical positions including senior managers.
The Municipal Manager for Ditsobotla Local Municipality, Tsatsi Ramagaga said due to serious cash flow challenges from August 2016, salaries and statutory deductions were not paid on time.
“Main contributors are non-implementation of credit controls and unavailability of capital budget from own revenue. Although we had these challenges, the municipality managed to pay salaries and statutory deductions with the last tranche of equitable share on 17 March 2017.
“We have made arrangement with SARS to pay the balance in tranches as and when the funds are available.
“The municipality is owed over R348 million by government, businesses and households. The National Department of Cooperative Governance and Traditional Affairs is assisting the municipality in finalising revenue enhancement plan,” said Ramagaga.
Mahlakeng said the municipalities should submit a detailed report on Councillors and municipal employees who do not pay municipal rates and taxes.
“Municipalities should conduct consultative meetings to encourage communities to pay services as municipalities rely on revenue to improve service delivery,”M ahlakeng said.