The DA has written to the Limpopo Premier, Stan Mathabatha, to urgently dissolve Vhembe District Municipality in accordance with Section 139(1)(c) of the Constitution after it emerged that the municipality is on the verge of collapse due to financial mismanagement, tender irregularities and corruption.
According to the Auditor General (AG) report in possession of the DA, the municipality got a disclaimer opinion due to inadequate systems in place to maintain records of receivables from exchange transactions as well as failing to keep records of outstanding payments for goods and services.
AG has further noted the following about the municipality amongst other things:
There is an outstanding payments of R602 million that was processed in the general ledger but not processed by the bank
Another R400 million was processed in the general ledger but not processed in the bank
R54 million was understated as cash and cash equivalents
The municipality does not have records of leave pay balances for all employees
Meter readings were not consistently done on a monthly basis which resulted in consumers not being billed
The municipality did not charge any interest on long outstanding debtors for the current and previous year
Overpayments to the contracted services to the amount of R15 million
R14 million was incurred as a result of a write off on irrecoverable trade debts
All the financial statements submitted for auditing were not prepared in accordance with section 122 (1) of the MFMA
All the planned budget implementation and IDP’s are not being implemented
Even worse , all payments were made from the municipality’s bank account without the approval of a properly authorised official.
Surprisingly, no steps were taken to implement and maintain an effective system of expenditure control and to prevent wasteful, unauthorised and irregular expenditure that amount to R1.2 billion.
The DA can confirm that some of the invitations for competitive bidding were not advertised and were allocated to close friends and cadres which was in contravention of Supply Chain Management (SCM) regulation 22(1) and 22(2).
Some of these contracts were awarded to bidders who did not submit a declaration stating they are not employed by state as required by SCM regulation 13 (c).
No action has been taken against any senior managers for the financial misconduct and mismanagement allegations.
The AG has further confirmed that based on the audited evidence obtained on whether a material uncertainty exists related to events that may cast significant doubt on the municipality’s ability to continue as a going concern.
It is clear that the municipality is on its knees and is unable to render any services to the residents hence the DA is calling for an urgent intervention.
Section 139(1) (c) clearly indicates that if a municipality does not fulfil an executive obligation in terms of the Constitution or legislation, the relevant provincial executive may intervene by taking any appropriate steps to ensure fulfilment of that obligation, including dissolving the Municipal Council and appointing an administrator until a newly elected Municipal Council has been declared elected, if exceptional circumstances warrant such a step.
The uncaring ANC has failed the people of Vhembe and the residents deserve a DA government that will be committed to prioritizing their needs.
The DA urges Premier Mathabatha to immediately implement our request if he is serious about fighting corruption in Limpopo and failure to do that, will make it clear that he is protecting all the implicated officials responsible for looting the taxpayer’s money and collapsing the municipality.
Under a DA government the people’s hard earned money will always be used to build One South Africa for All and to ensure the speedy delivery of services.