R9.6 billlion owed to KZN municipalities, R13 million spent on consultants
The KZN MEC for Cooperative Governance and Traditional Affairs (Cogta) Nomusa Dube-Ncube has urged municipalities to desist from hiring consultants to prepare municipal financial statements at a considerable cost without direct accountability for municipal audit outcomes.
“There are municipalities which spend excessive amounts on consultants to collate their financial statements and yet they receive a disclaimer from the Auditor-General. How is this possible and why is no one taken to task for this?” said Dube-Ncube who was speaking at the SALGA KZN Finance Week Conference in Durban today.
The total amount spent by KZN municipalities on external consultants for financial management in municipalities was R6,939,189 in 2012/2013. This amount subsequently increased to a staggering R13,369,721 in 2013/2014 despite repeated calls from Cogta to build sustainable in-house capacity in municipalities.
Dube-Ncube has also addressed the issue of debt owed to municipalities which affects their financial position as well as their ability to meet their constitutional mandate which is to expand public infrastructure and deliver basic services to communities.
“We must vigorously address the challenges pertaining to the debtor’s book of our municipalities. We must ensure proper verification and data cleansing processes. The amounts owed to municipalities are still of great concern,” said Dube-Ncube to a gathering of the province’s mayors and municipal managers.
The municipal debt currently stands at a provincial total of R9.6-billion based on the audited figures as at the end of June 2014. Less than 5% of this is attributed to state institutions such as government departments at both provincial and national level.
“Where there are challenges with state institutions owing to municipalities, these are being dealt with through intergovernmental relations between the various spheres of government. But the primary concern is consumer debt and our municipalities need to begin to collect outstanding amounts with vigour,” said Dube-Ncube.
Dube-Ncube also reminded municipalities that by September 2015, all municipalities with CFO’s that does not comply with norms and standards in addition to their municipal finance qualification will by law have to vacate their jobs.
Dube-Ncube furtheset implored KZN municipalities to set aside 5% of the budget towards repairs and maintenance. "In the recent analysis we found out that there is poor maintenance of infrastructure and public property in many of our municipalities. Most municipalities don’t have a repair and maintenance budget, hence the continued deterioration of infrastructure. And this has somehow contributed to the frustrations of communities as experienced through service delivery protest. Communities at times protest against the deterioration of public infrastructure and not against the perceived lack of service delivery"
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