THE 25th of the month is normally payday for municipal employees in Makana. However, October 25 was frustratingly and annoyingly different.
Instead of seeing a credit appear in their bank accounts, municipal staff and councillors were faced with a blank. Understandably pandemonium broke out.
An official informed the employees that their salaries would be paid into the bank by 10am. By nightfall there was still nothing.
The reason for this state of affairs is simply that the municipality has run out of money. For the past few months the spending of current funds has been too high on activities that were not on the budget, nor were they necessary.
Worst of all is that grant funds, meant for capital expenditure, have been used to prop up the current account. These funds are now also depleted.
This, for Makana, its citizens and municipal staff is a serious situation. Service delivery will now have to take a back seat while finance staff scratch around every month to fund the salary bill.
What are the reasons for this state of affairs? In my opinion the following:
- Too many posts in the executive and senior administration sections of the municipality have been created and filled without the council condoning these appointments. These posts were also not provided for in the budget;
- Extremely low debt recovery rate: for every rand billed only 60c is recovered – and it takes about 200 days to recover this 60c. This translates into a debtors list of R225-million;
- Wild spending on unnecessary activities by the mayor and his executive;
- An unproductive and unmotivated staff;
- Lack of control of the use of municipal assets;
All these factors have progressively led to the seriously negative cash flow that now manifests itself. The DA councillors in Makana have been warning of this impending calamity for years, but it has fallen on deaf ears.
We are now faced with a technically bankrupt municipality, and it is going to take a long time of stringent budget cuts and much gnashing of teeth once again to get on the path of responsible fiscal management. Ultimately it will not be the employees and councillors who bear the brunt of this melt-down, but the citizens of Makana who will not receive crucial resources when Eskom and suppliers go unpaid and the city shutdown begins.
Les Reynolds, DA councillor, Makana Municipality