Mafube Business Forum (MBF) note with concern that on Friday 27 October, the Acting Municipal Manager of Mafube Local Municipality (MLM), Advocate Mothusi Lepheana, yet again issued a communique to employees that there would be a delay in payment of their salaries. The reason given is that MLM’s “accounts have been attached by a creditor since last week”.
It appears that the financial position at MLM has deteriorated even further than anticipated but it cannot be said that non-payment of salaries came as a surprise to anyone. Report upon report reflect the dismal state of affairs at the municipality. The Municipal Manager’s section 52 quarterly report, indicate that on a monthly basis there is a salary deficit of R6.6-million (R79m per annum). Virtually the entire Equitable Share Grant is used for salaries and “nothing is left for the operations and service delivery.” MLM forfeited R12-million of a conditional infrastructure grant – most likely spent on salaries and not for its intended purpose. Between SARS and the Municipal Workers Retirement Fund, a further R12 605 049 was seized from MLM’s primary bank account. Irregular expenditure for the month of June 2023 amounted to R83 573.80 while fruitless and wasteful expenditure for the year (2022/23) amounted to R51 822 442, meaning that interest on overdue payments now exceed R5-mllion per month. The collection rate for municipal service charges and rates have hit a low of 15% during June 2023.
Ultimately, MLM owe creditors a total of R958-million against the recoverable service arrears debt of R420-million, that means that the municipality is technically insolvent by R538-million.
Despite the mandatory provincial intervention and Financial Recovery Plan (MFRP), nothing substantial is being done to alleviate the situation. The proposal brought by MBF, initially accepted by the Provincial EXCO Representative and the council of MLM, has never been implemented and scant attention is paid to it by the Municipal Financial Recovery Service of National Treasury (MFRS). Nothing in the MFRP compels MLM to resolve the over-700 legally-declared disputes, which if correctly addressed, could do much to restore trust in the municipality and almost immediately have a huge positive impact on the collection rate for municipal service charges.
MBF have written to the MFRS to point out the shortcomings of their MFRP and unless these are addressed, will likely apply to have the plan set aside. While the plan recognises abysmal governance, poor financial control and lack of oversight as systemic at MLM, it tip-toes around these issues and does not offer the practicable solutions desperately needed to effect recovery. The plan disregards the need for information flow to key community stakeholders, and makes no provision for public participation.
MBF invites residents, business owners and taxpayers to visit our offices at 18A Church Street, Frankfort on Mondays to Thursdays from 08h30 to 16h00 and Fridays 08h30 to 12h00. Call or send a WhatsApp message to Marina on 079 145 4295. Visit our website www.mafubebf.org and follow us on Facebook.