The Free State Department of Co-operative Government, Traditional Affairs and human settlements has spent more than half its annual budget on bailing-out municipalities rather than building homes and improving the life of people in the province.
A report to the Parliament’s joint select committees on finance and appropriation showed that the department had spent R18.2 million on financial assistance grants to five municipalities. The department’s total annual budget for the year is just R29 million.
According to Kadimo Masekoane, administrator of the Nala Local Municipality, which includes Bothaville and Wesselsbron, the municipality was unable to pay councillors’ salaries and the department transferred R6 million to enable it to do so.
The other transfers to other municipalities that received a total of R18.2 million from the department were used mainly for paying salaries or for paying Eskom for electricity that had been used.
In the newly-formed Manguang Metro – which includes Bloemfontein – an amount of R111 million was owed to Eskom.
Meanwhile, the National Treasury’s Vincent Malepa has described the financial state of the Free State municipalities as “dismal” and warned that as the Treasury was not aware of these transfers, they might be deemed illegal.
Malepa said that more and more municipalities in South Africa were depending on grants for their continued operation. He also warned that under-spending in the province was rife while consumer debts in the province amounted to a staggering R4.8 billion.
Poor management and a lack of financial systems and controls have been blamed for the problems facing municipalities in the province. Provincial auditor-general, Ben van Niekerk said irregular expenditure and weak asset management systems led directly to bad service delivery.
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