Parliament, Thursday, 17 September 2020 – The Select Committee on Cooperative Governance and Traditional Affairs, Water and Sanitation is of the view that while there is marginal progress in improving the functioning of Thaba Chweu Local Municipality, but the road to full functionality remains long.

The committee visited the municipality to assess progress since the invocation of Section 139 (1) (b) of the Constitution. The improvement in the audit outcome from the previous 12 Disclaimers to two successive qualified audit opinions is noted despite the lingering concerns that it remains a negative audit opinion.

“We must acknowledge that there is a slight improvement especially in dealing with matters of emphasis in their reports. The municipality must strengthen its internal controls and governance to ensure that its audit outcomes improve,” said Mr China Dodovu, the Chairperson of the committee.

The committee is concerned by ever increasing irregular, fruitless and wasteful, and unauthorised expenditure at the municipality. This expenditure is standing at R435.4 million, R165 million and R188.7 million respectively for the 2018/19 financial year. There has been an increase on these items over the last three financial years.

What is even more worrying remains the lack of appetite for the implementation of internal controls and application of consequence management against those who continue to undermine the municipality’s supply chain management policies and laws. “If the municipality does not implement these controls and implement consequence management, then the municipality is certainly going to regress to pre-intervention days,” Mr Dodovu emphasised.

The committee raised its concerns regarding the state of roads in the municipality that are horrendous and that will negatively impact on the opportunities to foster economic development in the town. The committee is of the view that the R43.8 million Municipal Infrastructure Grant is not adequate to upgrade the municipal infrastructure to the requisite level and has requested the Provincial Executive to assist the municipality in this regard.

The municipality’s cash flow challenges remain a concern that needs urgent attention. Furthermore, the committee remains concerned over the municipal debt to Eskom which is currently at R807 million and any payment made by the municipality is negligible due to high interest being levied. It is also concerning that the payment period to creditors remains exceedingly high. “It is completely unacceptable that it takes the municipality an average of 797 days to pay its creditors. This trend will kill the ability of small businesses to operate leading to increased unemployment rate,” Mr Dodovu said.

The continued use of consultants by the municipality to perform essential functions that should be performed by its officials, especially in the finance division, also concerned the committee. The committee has requested the South African Local Government Association and the provincial treasury to continuously assist the municipality with skills development.

Despite the challenges that confront the municipality, the committee has welcomed the prevalence of stability at both political and administrative levels of the municipality, and is hopeful that, that stability will assist the municipality to resolve some of its lingering problems. Meanwhile, the committee has called for the institutionalisation of Section 154 of the Constitution with habitual support to municipalities.

ISSUED BY THE PARLIAMENTARY COMMUNICATION SERVICES ON BEHALF OF THE CHAIRPERSON OF THE SELECT COMMITTEE ON COOPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS, WATER AND SANITATION, MR CHINA DODOVU

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