DA calls MEC Shiba to investigate the root cause of the R15.1 billion debt to creditors by Mpumalanga municipalities
We find it extremely concerning that no action was taken to enforce recommendations that would have improved the Report on the Local Government Audit Outcomes for 2019/2020 in the province.
It is indicated that the province is unable to draw an income through debt collection resulting in only R4.6 billion out of R14.8 billion being considered recoverable from the sale of basic services and property rates in all municipalities across the province.
Over the past couple of years, the AG has always been noting that a poor state of internal controls, failure to enforce consequence management for transgressions, and weak oversight are at the center of deteriorating accountability in the province.
The inaction contributed to four municipalities being disclaimed in the 2019/2020 financial year: Govan Mbeki, Lekwa, Dipaleseng, and Dr. Pixley Ka Isaka Seme.
The AG further noted that because of these internal control weaknesses, only four municipalities have improved on their audit outcomes for the 2019/2020 financial year.
On service delivery challenges, the AG painted a grim outlook regarding the ability of municipalities in the province to draw on an income and as a direct consequence an inability to pay their creditors.
The DA finds this inability to draw an income from the sale of services in local municipalities concerning as this not only, in turn, affects the ability of municipalities to pay their creditors on time but also contributes to increasing fruitless and wasteful expenditure being incurred in the form of interest.
Municipalities in the province took an average of 279 days to pay their suppliers and as this is in excess of the 30-day principal, it resulted in generating interest of R837.9 million.
In the 2019/2020 MFMA report of the AG, it was noted that 7 material irregularities were identified in the below-mentioned municipalities with an estimated financial loss of R255.23 million at four of the identified municipalities and likely substantial harm to public sector institutions at three municipalities with repeat disclaimers.
Below are the identified municipalities:
City of Mbombela
Dr. JS Moroka
The DA will write to MEC and request her to investigate the irregularities found in Mpumalanga’s local municipalities and to comply with recommendations made by the Auditor-General.