The cash-strapped Masilonyana municipality, that’s supposed to serve Theunissen, Brandfort and Winburg, came under intense scrutiny after officials revealed the ailing municipality spends roughly R15m a month on salaries. It, however, collects as little as R1.8m to R2m in revenue.

Municipal officials appeared before parliament’s standing committee on public accounts (Scopa) on Tuesday (26/5) to account for its latest audit outcomes and investigations by the Special Investigating Unit. Mayor Dimakatso Modise acknowledged the municipality’s dire financial position during the meeting, admitting the local authority is heavily reliant on grants to remain operational.

OFM News previously reported Masilonyana’s revenue collection rate sits at approximately 20% of municipal rates and taxes, while ongoing financial mismanagement has left the municipality struggling to meet key obligations.

Payments to third parties, including Sars and employee pension funds, have reportedly been severely affected. The municipality allegedly owes about R75m to third parties despite deductions being made from employees’ salaries.

Municipal bank accounts have also repeatedly been attached, resulting in delayed salary payments and worsening service delivery interruptions, with some residents reportedly going weeks without water or electricity.

“The R75m was deducted from employees’ salaries, but there was not enough money as I indicated based on our revenue collection and the money we pay on a monthly basis,” said Modise.

“The pension fund (debt) has to be paid with the money the municipality collects, but if we collect less money, we can’t even afford the money we owe to our creditors, hence an arrangement has been made by the municipality.”

EFF MP Ntombovuyo Veronica Mente-Nkuna criticised the municipality’s leadership, questioning how the pension money disappeared and accusing officials of having run the municipality into the ground.

“Can you agree with me that you are not running a municipality because if your salary bill and cash in hand, including allocations that you get is R1.8m, you do not have a municipality!”

Modise conceded salaries are being paid using equitable share allocations intended for service delivery.

Municipal manager Mojalefa Matlole told the committee around R8.8m would be paid towards salaries, excluding pension fund obligations and payments owed to SARS.

“When we get (our) equitable share, we sit down, look and project for the next four months we need to be paying towards the salaries of the workers. Secondly, what is it that we should be allocating towards Sars, to the) pension fund, to Eskom, and others.”

The municipality’s annual salary bill amounts to R168m, while its equitable share allocation amounts to R157m, underscoring the municipality’s heavy dependence on government grants.

Meanwhile, chief financial officer Amos Makoae revealed chilling details about financial controls, telling Scopa members officials allegedly bypassed the municipality’s financial management system for years and instead processed transactions manually.

“This municipality has been getting disclaimers for the past nine years. Upon my arrival in the municipality, I noticed officials were transacting using an off-site financial system. Every transaction we do as a municipality, we need to do it through our financial system so that at the end of the financial year, when it's time to prepare the AFS,” he said.

‘… Officials allegedly bypassed the municipality’s financial management system for 
years and instead processed transactions manually’

“All payments that were done in the past were not done through our financial system. They were doing those payments manually; I had to go five years back to capture all those invoices that were made outside the financial system so that we can have a complete GL and tri-balance.”

Service providers were paid without invoices being processed through the municipality’s financial system, said Makoae.

Modise said she had been aware since 2018 that the municipality’s financial system was not being properly used and that assistance had since been sought from National Treasury.

OFM News/Kekeletso Mosebetsi sm

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