This, as the committee has on Tuesday started engaging municipalities in Limpopo and the Northern Cape on their financial woes following a briefing they recently had with the Auditor-General (AG), Kimi Makwetu.

The Bojanala District Municipality and the Lekwa-Teemane, Madibeng, and Mamusa Local Municipalities are the four North West municipalities that will appear before Scopa, followed by the Free State’s Mafube and Masilonyana. Municipalities in both provinces have for years made news over poor service delivery and adverse audit opinions from the AG.

While municipalities in the Free State are often lambasted by members of opposition parties in the Legislature for their inability to generate income and escalating Eskom debts, those in the North West have been heavily criticised for their poor audit outcomes and their investment in the VBS Mutual Bank.

In his latest 2017/18 local government audit outcomes report, Makwetu outlined that the R1.6 billion loss of investments made with the VBS Mutual Bank significantly weakened the financial position of municipalities in the North West.

Of the four that will be appearing before Scopa, Madibeng is also amongst those that got under fire for its R31 million loss in the now liquidated VBS Mutual Bank.

This municipality, together with the Mahikeng Local Municipality, the Dr Ruth Segomotsi Mompati District Municipality, and the Moretele Local Municipality have drawn much controversy and placed municipalities in the North West under much scrutiny following the release of Jerry Motau’s ‘Great Bank Heist’ report on the liquidated VBS.

Motau alleged several entities and individuals received “gratuitous payments” from the bank. His report also indicated that the Mahikeng Local Municipality invested approximately R83 million, the Dr Ruth Segomotsi Mompati District Municipality about R150 million, and the Moretele Local Municipality R50 million.

The committee has meanwhile indicated that they will continue calling municipalities that either incurred a disclaimer or adverse audit opinion in the past five years.

OFM News