VBS linked municipality receives intervention

Wednesday, July 11, 2018

Following a meeting with Limpopo municipalities that invested with embattled VBS Mutual Bank, Thabazimbi Local Municipality will receive provincial intervention in terms of sections 139 (1)(b) and 154 of the Constitution.

Cooperative Governance and Traditional Affairs (CoGTA) Minister Zweli Mkhize announced the intervention during his visit to Limpopo where he met seven distressed and dysfunctional municipalities in Polokwane on Wednesday as part of an oversight visit.

The intervention paves the way for assistance with financial affairs where a municipality is in serious or persistent material breach of its obligation.

The distressed municipalities include Mopani, Thabazimbi, Musina, Mogalakwena, Fetakgomo, Tubatse, Modimolle, Mookgopong and Vhembe.

He was joined by Deputy Minister Andries Nel, CoGTA MEC Jerry Ndou, Finance MEC Rob Tooley, Mayors and councillors.

Mkhize expressed concern that municipalities who invested with VBS Mutual Bank were approving unrealistic budgets without the funds to finance their projects.

The Minister also noted that there was a decline in revenue collection by these municipalities, which negatively affected their financial viability and ability to honour their financial obligations for bulk electricity and water.

“The budgets should be aligned to the strategy and this will make it possible to ensure better and improved service delivery that benefits communities. The challenges of the municipalities that invested in the VBS Mutual Bank made this situation worse as the funds might have been lost forever,” said Mkhize.

The failure to fill senior managers’ positions and unstable management arising from issues related to placement of employees within the institutions were among the number of the challenges faced by the municipalities.

The key posts are those of technical directors, chief financial officer and the Municipal Manager.

“From the presentation by the province, there is progress in the filling of posts and the municipalities were urged to fast track the process more to ensure that strategic activities are successfully implemented,” said Mkhize.

The poor audit outcome by the Auditor-General also highlighted severe strain and pressure faced by the municipalities.

“Some municipalities are in coalitions and thus experiencing governance challenges. Challenges that emanate from the municipal amalgamation process post the local government election in August 2016, as is the case with Modimolle and Mookgophong local municipalities.

“The amalgamation of staff has yet to be finalised and this has caused challenges and with no feedback mechanisms,” said Mkhize.

He urged municipalities to go back to basics and efficiently provide municipal services to be able to attract investment in their areas, which could improve revenue collection.

“We want clean municipalities and ensure that our communities are able to benefit,” said Mkhize.

The Minister and Deputy Minister will today hold meetings in Thohoyandou and Malamulele. - SAnews.gov.za

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