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Govt debt to municipalities: R250 million – Service delivery hampered


An approximate R250 million in debt owed to Limpopo municipalities by some twenty defaulting national and provincial government departments and parastatals for municipal services and property rates respectively poses a hot potato likely to hamper service delivery across the province.
The matter served as discussion point during the two-day annual Provincial Members Assembly of the South African Local Government Association (Salga) that commenced at Protea Hotel Ranch Resort on Tuesday. In an interview prior to the event, Salga Provincial Executive Officer Thapelo Matlala pointed out that the matter was a standing item on the agenda of the quarterly meetings of Salga’s Provincial Executive Committee (PEC).
The outstanding amount of R247 886 413 owed to municipalities across Limpopo by September this year, reflected in the latest figures made available to Polo­kwane Observer, does not sketch as bleak a picture as the scenario a few months back. Figures contained in Salga’s Limpopo Organisational Performance Report for the 2014/15 financial year confirmed the outstanding amount owed to municipalities as R403 856 172 as at 31 March 2015.
Matlala stressed that in most cases the excuse for non-payment was wrong billing by municipalities. He added that Salga, however, was concerned that the particular departments were not proactive in engaging municipalities with regards to wrong billing. Ultimately outstanding monies contributed to service delivery by municipalities being drastically hampered and in instances such as Thabazimbi Local Municipality – which found itself in financial trouble – the payment of outstanding debts would help relieve their woes, indicated Matlala. He said Salga was of the view that National Treasury should withhold the equitable share of government departments owing municipalities until such monies were paid, as was the case with municipalities countrywide not meeting their commitment with Eskom in the recent past.
It was learnt that millions were owed for assessment rates and services delivered that had accumulated over an extended period. In the Salga report reference is made to municipalities reporting that they had a serious predicament with the Department of Education as most schools were not paying their accounts for services.
“Municipalities believe that outstanding accounts cannot be written of as this would lead to loss of revenue for services provided and consumed. From the figures it seems that the Department of Education and some of its affiliated institutions are after all the biggest defaulters with almost R177 million outstanding by end of March this year. The latest figures show that the bill for the Department of Education totals an estimated R80 million.
The Salga assembly programme and commissions gave prominence to the 2016 local government elections, readiness of the Independent Electoral Commission (IEC) in facilitating the elections and critical matters municipalities would have to address post the elections, indicated Matlala. According to him it included topics such as strong and credible leadership, positioning local government at the centre of the cooperative governance system, securing viability of municipalities and long-term financial sustainability, reconfirming commitment to decentralisation, accelerating and expanding basic services to the poor, achieving clean audits as well as responsive and accountable municipalities.
Speaking to Polokwane Observer on an unrelated matter this week, African National Congress Youth League (Ancyl) Provincial Task Team (PTT) Coordinator Che Selane expressed concern about the state of affairs at Thabazimbi Municipality, which is seen to have collapsed. He stressed the ANC should urgently attend to matters and intervene in that regard to effect radical change. According to him the ruling party should try and resolve the challenges of which the root causes are seemingly lack of management, capacity and commitment as well as maladministration of resources.
In the meantime Democratic Alliance (DA) Provincial Leader Jacques Smalle stated in a media release that the DA has asked for an urgent meeting with Cooperative Governance, Human Settlements and Traditional Affairs MEC Makoma Makhurupetje to request her to place Thabazimbi Municipality under administration with immediate effect. He stressed that the DA would give notice to file a Public Access to Information Act (PAIA) application to obtain multiple forensic audits being withheld by the municipality and to urge the MEC to implement strong disciplinary action against those who were responsible for the financial collapse of the municipality.

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Photo: South African Local Government Association (Salga) Provincial Executive Officer Thapelo Matlala.