The Department of Cooperative Governance and Traditional Affairs (CoGTA) has taken over the running of Great Kei Municipality after its failure to fulfil executive obligations.
The Eastern Cape municipality has an estimated debt of around R28 million and according to provincial CoGTA MEC Fikile Xasa has failed to comply with the Municipal Finance Management Act (MFMA) in relation to expenditure management.
“The municipality is unable to fund its daily operations and currently owes creditors approximately R28 million, of which an amount of R22 million is more than 90 days old that is owed to creditors,” Xasa said.
A long list of unpaid creditors
According to the MFMA, municipal managers are expected to take all reasonable steps to ensure money owed by the municipality is paid within 30 days of receiving the relevant invoice or statements, unless prescribed otherwise for certain categories of expenditure.
In this regard, Xasa said the local municipality failed to pay all money owed to its creditors within the stipulated period.
He said Great Kei municipality currently owes, among other creditors, R1.1 million in staff pensions, R7 million, excluding penalties, to the South African Revenue Services; R5.8 million to the Municipal Standard Chart of Accounts and R1.2 million to Eskom.
Xasa said under the circumstances, CoGTA, through the Provincial Executive Council, has intervened and assumed responsibilities in the corporate services and financial management and administration.
Part of the department’s work in the municipality will include the recruitment processes and appointment of the municipal manager. The department will also assist with credit control and debt collection as well as supply chain management and the development of a financial recovery plan.
“We call on the political principals and officials to work with us to sustain the intervention once we have pulled out. We need to refocus and a mind-set change to realise the common objectives of cooperative governance,” he said.