MEC Motlalepula Rosho tells OFM News that over half of municipalities’ financial systems and governance and financial information are deficient. Following a 5-year assessment on these distressed local municipalities, the MEC says they will have to rebuild the internal control, make sure that they adhere to concerns of the Auditor-General (AG) such as non-compliance. Rosho adds that these municipalities need to stabilise themselves and further adds for municipalities to stabilise, it doesn’t necessarily mean pumping money into them.

The analysis came to conclude that 13 municipalities in the province are in serious financial crises. "They are not able to provide basic services to their people [and] they can’t collect revenue and even service debt. So it’s a number of factors - over time the municipalities continued to adopt the unfunded budget and other unfunded budget implications are that they will not be able to provide basic services to our communities,” she adds.

Rosho, the Head of the Department (HOD) Ndlela Kunene, and the Chief Director for Municipal Support Programme Linda Nengovhela, kicked off a process of giving feedback to municipalities that are in financial distress in the province.

“The feedback analysis is a result of a five-year assessment (2015/2020) of provincial municipalities by the Provincial Treasury in line with the provisions of Section 138 and 140 of the Municipal Finance Management Act to determine if a municipality is in serious material breach of its financial commitments.

Based on the outcome of the assessment, thirteen (13) of the 22 municipalities in the province are said to be in financial dire straits and as a result, service delivery is on the brink of collapse,” she further adds.

Rosho alludes that the culture of planning to spend more resources than available is wrong and cannot be changed by simply adding more resources and that instilling fiscal discipline and consequence management are critical to creating financially viable municipalities.

At least twelve municipalities in the province are under the administration for failure to deliver basic service delivery to residents.

OFM News