Gauteng municipalities are a mess – unpaid bills, poor oversight and more wasteful spending

The Portfolio Committee on Cooperative Governance and Traditional Affairs (Cogta) has raised concerns about the general state of municipalities in Gauteng, where water and power bills go unpaid, and wasteful spending is piling up with little oversight.

The committee on Tuesday (13 October) highlighted a host of issues with local councils – from high vacancy rates for senior manager positions and dysfunctional municipal public accounts committees, to high water and electricity losses and investigations and consequence management into unauthorised, irregular, fruitless and wasteful expenditure.

“The general picture of functionality of municipalities in the province is concerning, and impacts directly on the ability of municipalities in providing quality services to the people of the province,” it said.

Regarding the high vacancy rate, the committee noted that of the 11 municipalities, four municipal manager positions are vacant. However, the high vacancy rate of supporting senior manager posts is much worse, it said.

In the City of Johannesburg there is a 42% vacancy rate, Sedibeng has a 50% vacancy rate, Lesedi and West Rand are at 33% vacancy rate, and Merafong is standing at 42%.

“This rate can be attributed to the lack of strategic direction and lack financial prudence in those municipalities. While the committee acknowledges challenges in recruiting adequately skilled personnel for those positions, it believes these challenges can be overcome,” it said.

Poor finances

On the financial side, of the 11 municipalities, five municipalities’ public account committees have not approved the 2019/20 annual plan.

“This undermines their critical oversight role and is reflected in the backlog in investigating unauthorised, irregular, fruitless and wasteful expenditure.

“Furthermore, the committee is concerned that only 55% of municipalities are compliant in approving the oversight report. This undermines good governance and must be rectified immediately.”

Municipalities are also counting huge losses when it comes to utility accounts, which puts pressure on the cash flow balances and contributes to poor service delivery.

The group counted water losses of R1.4 billion  in Johannesburg, R1.1 billion in Tshwane and R1 billion in Ekurhuleni. The committee urged municipalities to deal with customers who access water services illegally, address inaccurate billing to increase payment and fix ageing infrastructure.

This has been exacerbated by the high number of councillors in arrears, it said.

Of the eight municipalities reporting councillors in arrears – amounting to R1.72 million in total – only Merafong has no councillors in arrears.

“This fosters a general culture of non-payment, as residents follow the example set by councillors. Public representatives have a moral and societal responsibility to pay for services,” the committee said.

Government debt to municipalities is also a concern and requires urgent attention from both provincial and national government if the culture of non-payment is to be overcome, it said.

Wasteful spending

Regarding unauthorised, irregular, fruitless and wasteful expenditure, the committee noted that in Gauteng 77% of unauthorised expenditure for the 2018/19 financial year and prior years is still to be addressed.

This equates to R7.3 billion, which supports the perception of lack of consequence management.

“It is unacceptable that in the City of Johannesburg, unauthorised, irregular, fruitless and wasteful expenditure increased from R1.2 billion in the 2014/15 financial year to R3.07 billion in the 2018/19 financial year.”

In West Rand, the aggregated unauthorised, irregular, fruitless and wasteful expenditure incurred for the 2018/19 financial year is R149.7 million. R92.09 million (61%) of the amount has not been investigated, the committee said.

In Mogale City, unauthorised expenditure amounts to R166.3 million in the 2019/20 financial year.

“The committee calls for the urgent completion of the investigation and implementation of consequence management against those in the wrong and recovery of finances where possible,” it said.

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Gauteng municipalities are a mess – unpaid bills, poor oversight and more wasteful spending