Administrative incompetence leaves Merafong in financial turmoil

February 2, 2015

Cilliers,-InaThe ANC led Merafong Local Municipality, through mismanagement and poor administrative controls, is about to fall off a financial cliff.

Financial information tabled at the last Council sitting reveals a municipality that will soon be non-functioning.

Critical failures by the municipality are as follows:

· In the first quarter of this financial year, the municipality lost R147 million in revenue. The collection rate failed to improve in the second quarter, with R100 million still outstanding;
· An amount of R107 million in consumer debtor losses was deemed irrecoverable and was written off in December 2014 – a trend repeatedly identified by the Auditor General;
· No effective measure has been put in place to curb consumer debt, negatively impacting on collection rates. The municipality is currently only collecting at 70%;
· As of December 2014, only 21% of the capital budget for Merafong had been spent – R61 million of R 294 million
· The municipality’s capital investment has been rapidly eroded over a period of 12 months. From December 2013 – December 2014, the investment shrank from R314 million to R49 million.

Coupled with this, Merafong’s Chief Financial Officer revealed that the council had lost a court case against a mining company in the area over an inaccurate property value for assessment rates which the council had placed on the mines property.

As a result, the council now owes the mining company in excess of R300 million.

It is clear that Merafong has completely lost the ability to fulfil its obligation to the people, and it will not be long before there is nothing left of this municipality.

I will write to the MEC for Local Government, Jacob Mamabolo, and request for a provincial intervention in terms of Section 139(1)(b) of the Constitution and to place Merafong under provincial administration.

Residents of this municipality should not have to suffer due to incompetence.

Media enquiries:
Ina Cilliers MPL
DA Constituency Head: Merafong
060 556 4344