No money for service delivery, but cash for breakaways
The Organisation Undoing Tax Abuse (OUTA) has learned that the executive and administration of Govan Mbeki Local Municipality have left for a three-day meeting at a spa resort.
Michael Holenstein, OUTA Local’s Regional Manager, says this is unacceptable for a municipality which was placed under a mandatory intervention a few months ago.
“The financial situation in the municipality is so dire that the Auditor General was unable to give an opinion which resulted in a disclaimer on the Annual Financial Statements,” says Holenstein. A disclaimer means the municipality couldn’t provide enough financial documentation on which to base an audit opinion.
Govan Mbeki is one of five municipalities in which the Mpumalanga provincial government intervened in October 2018, in terms of the Municipal Finance Management Act.
The three-day breakaway at the Badplaas Forever Resort is for 52 delegates for 10-12 April is outlined in a letter from the municipal manager.
This is expected to cost the municipality in the region of R1 500 per person per day, excluding any other costs such as facilitators, transport and beverages. The bill, which the community will have to pay, is expected to be more than R250 000.
“This is very irresponsible and totally unacceptable in a bankrupt municipality. This municipality is unable to provide basic services to residents and cannot pay creditors such as Eskom and Rand Water. Where is the Provincial Executive in all of this?” says Holenstein.
“Provincial CoGTA and Treasury have been standing by and watching the degradation and virtual collapse of the municipality.”
OUTA calls on the Provincial Executive to place the municipality under administration – a much stronger form of intervention – by invoking Section 139(1)(c) of the Constitution. This involves dissolving the municipal council and appointing an administrator.
“The exceptional circumstances, the disclaimer of audit opinion and the collapse of municipal services certainly warrants the intervention. Let me also remind you that this municipality is not in a position to function as a going concern, because its liabilities far outweigh its assets,” says Holenstein.
It is OUTA’s opinion that the administrator should be appointed as soon as possible, through a transparent and participative selection process that includes organised civil society and community forums. A financial recovery plan and a turnaround strategy including professional and accountable project management must be implemented urgently.
Julius Kleynhans, OUTA Operations Executive: Local Government, says OUTA hopes to see those implicated in wrongdoing held to account.
“It is critical that all parties get involved to remedy Govan Mbeki municipality's challenges and work together for the benefit of the citizens who are all affected. OUTA is establishing structures in the province to assist municipalities and the Province to resolve the municipal decay, fight corruption and challenge maladministration on behalf of the people.”