According to a recent report it appears that eThekwini Municipality’s human settlements department is R3.9 billion in the red. The report states that the department has not aligning its grants with the city’s housing infrastructure programme.

Even more alarming is the fact that unless the municipality and the provincial department find out a method to align the funding, a R1 billion loan will be required to fund the shortfall. This could leave Durban ratepayers foaming at the mouth as they face being slapped with a 5% rates increase.

According to the report, the city’s human settlements department spent R1.6 billion in the 2013/14 financial year against a budget of R589.5 million.

It goes on to state: “During this period the municipality received an R709 million subsidy from the provincial Department of Human Settlements. This resulted in the department’s overdraft and debtors balance increasing to R1.3 billion and R2,6 billion respectively as at June 30, 2014.”

“In an effort to eradicate the housing backlog and expedite service delivery to the poor, the human settlements department anticipated an expenditure of R1,2 billion for 2014/15. Due to the budgetary constraints the requirements were reduced to R527,6 million.

“The anticipated expenditure after properly analysing the procurement planning for top structures in the 2014/15 year is expected to increase to R1.6 billion, as compared to an approved budget of R527, 6 million.

The report goes on to say that the planned capital spend on the community residential unit was R144,5 million compared against a budget of R70 million – exceeding the budget by R74,5 million.

This over-expenditure could be categorised as “unauthorised expenditure” and result in a negative finding in the auditor- general’s report.