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R13bn debt threat to KwaZulu-Natal municipalities

R13bn debt threat to KwaZulu-Natal municipalities

Photo by Reuters

10th May 2017

By: African News Agency

  

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A failure to pay over R13-billion to municipalities across KwaZulu-Natal was threatening the livelihood of some councils and has prompted the provincial cooperative governance and traditional affairs (Cogta) department to enlist the services of the South African Revenue Services (Sars) to assist in recovering money owed to municipalities.

MEC Nomsa Dube-Ncube said it was worrying that some customers opted to live lavish lifestyles paying for DStv but not honouring payments to the municipalities.

According to the figures presented to Members of the Provincial Legislature on Tuesday, between households, businesses, and government departments they owe R13.5-billion.

“If this problem is not addressed, municipalities are going to collapse as they rely primary on debt collection for their sustainability unlike provincial or national departments that get funds through appropriations, Dube-Ncube warned on Tuesday.

She stressed that it was important for each of the owing parties to live up to their end of the bargain and told MPLs that municipalities should not be afraid to cut services on delinquent government departments.

She added that the department suspected that some customers were not disclosing their full financial status and this had prompted the department to go elsewhere in a bid to get information on debtors.

“We want to strengthen the enforcement to enable municipalities to deal decisively with deliberately defaulting customers and we will look at options of legally accessing creditor information from Sars, banks and credit bureau. Consumers run the risk of having properties attached for owing debts to municipalities,” Dube-Ncube said.

She decried the habit some customers had of making false submissions in a bid to get free government services, but warned that such individuals would soon be flushed out.

“We have to uncover those who illegally benefit from policies meant for the poor and indigent. They own mansions in townships and rural areas, while they do not pay for water and electricity. It is unfortunate that people prioritise payment for DStv over payment for municipal services. This has to change,” the MEC insisted.

Dube-Ncube also told the sitting that the department had continued on its quest to fight fraud and corruption, reflected in the 23 cases of fraud and corruption that were reported to her department last year and now the subject of forensic investigations.

According to the MEC, 16 were getting finalised while seven were pending. The investigations across municipalities covered areas such as R2.5-million in fruitless and wasteful expenditure, directors who did not have the experience or qualifications to hold senior positions and contracts awarded on roads that were never constructed.

The cases had been uncovered at Nongoma Municipality, which is in Zululand District Municipality. In addition to this, a municipal manager in uMzinyathi District had been suspended pending an investigation into R95-million meant for service delivery, while  councillors involved in social grant fraud in Ingwe Municipality have been arrested.

The MEC said disciplinary action would be taken against senior officials including municipal managers and chief financial officers on the fingered municipalities, while criminal cases would be opened with the SAPS and civil recovery launched against implicated individuals.

Edited by African News Agency

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