Maverick Citizen

MUNICIPAL DEBT

R227m owed to Matatiele local municipality by government, businesses and individuals

R227m owed to Matatiele local municipality by government, businesses and individuals
Matatiele, in the northern part of the Eastern Cape. (Photo: Mlungisi Mbele)

The DA blames Matatiele’s mayor for treating government departments with ‘kid gloves’ when it comes to paying millions of rands owed, but the municipality says this is simply cheap politics.

Government, businesses and ratepayers owe Matatiele Local Municipality in the Eastern Cape more than R200-million in rates and taxes.

This was revealed by municipal spokesperson Luncedo Walaza in response to questions from Daily Maverick.

Walaza’s revelations come after DA councillor Wonga Potwana alleged that the municipality was owed R254-million because defaulting government departments, including health, public works and education, are being treated with kid gloves.

“R254-million will help reduce the backlog of (repairing) the rural gravel roads and increase our reserves as the municipality,” Potwana said.

Read in Daily Maverick: EC municipality head of good governance embroiled in alleged tender scandal worth R3.5-million

matatiele debt

Matatiele mayor Sonwabile Mngenela. (Photo: Supplied)

He said the DA blamed mayor Sonwabile Mngenela because he seemed “unable to understand the value of money”.

“It is unfortunate that the ANC has put in a person who doesn’t understand money since he has no matric at all, but only Grade 10.”

Potwana said they advised Mngenela that the municipality needed to go all-out and cut the services of defaulting government departments to force them to pay if the money was not received by the seventh day of each month.

“Where the DA governs, these departments do pay, so why not apply tough measures here so our municipal bank balance can grow?”

Municipality hits back

In response, Walaza maintained that even some DA members had debts with the municipality.

“This is a cheap political stunt as the country is heading to the polls,” Walaza said.

He said debt owed to the municipality could not be blamed on one individual, Mayor Mngenela, who did not deal with municipal finances but exercised oversight to ensure that finances were used properly.

“Those who owe the municipality do pay on a monthly basis as per the bills submitted to debtors.”

Walaza said the municipality was not only owed by government departments but also by individuals, businesses, ratepayers and farmers.

“The debt revenue owed to the municipality is currently at R227-million and this has a huge impact on the delivery of services,” he said.

He said the debt accumulated every year.

Debt recovery process

Walaza said the municipality raised bills for services to government departments every month.

“The revenue sub-unit then makes a follow-up with the respective departments,” he said.

Monthly reconciliations, he said, were done between the municipality and government departments.

Walaza said the Department of Cooperative Governance and Traditional Affairs held meetings relating to debt owed every quarter with municipalities and departments.

Read more in Daily Maverick: The fight is on for the heart and soul of Matatiele — can the AIC claw back votes in the town where the ducks have flown away?

Walaza said their strategy included efforts to improve the revenue and financial performance of the municipality.

He said they would launch the annual Matatiele Ratepayers’ Golf Day on 13 December 2023 as part of these efforts.

“The purpose of this initiative is to also mobilise ratepayers and stakeholders to partner with the municipality to reduce the debt by introducing strategic innovations available for ratepayers, introduce the new general valuation roll and the introduction of incentive/discount schemes.”

He said the Municipal Finance Management Act stated that the accounting officer – municipal manager Lizo Matiwane – was responsible for the management of revenue, and had to take all reasonable steps to ensure that there were systems and controls in place to account for municipal revenue.

“The Ratepayers’ Annual Golf Day will open a platform for the municipality to interact with customers and provide instant resolutions on account queries. This will help strengthen the relationship with ratepayers,” Walaza said.

Debtors

According to information Daily Maverick has seen, some of the departments in debt to the municipality as of June this year include:

  • R81,270,620 owed by the Eastern Cape Department of Public Works and Infrastructure;
  • R6,987,581 owed by the Eastern Cape Department of Health;
  • R1,418,111 owed by the National Department of Agriculture, Land Reform and Rural Development; and
  • R85,828 owed by the Eastern Cape Department of Education.

Health department spokesperson Sizwe Kupelo said the department had experienced cash pressures because of settlements of unbudgeted-for medico-legal claims.

Read more in Daily Maverick: Eastern Cape warns of drastic budget-slashing to meet national government targets

Kupelo said negotiations were ongoing with municipalities and other suppliers to ensure that health services continued uninterrupted.

“Engagements also look into issues of gross overcharging by some municipalities,” he said.

Agriculture department spokesperson Reggie Ngcobo confirmed the accuracy of the amount owed to Matatiele.

Ngcobo said the invoices received to date from Matatiele amounted to R458,633.

This amount, which is owed for rates and taxes, breaks down as follows:

  • R395,633 in invoices for old state land – these are all processed, and
  • R63,000 in invoices for land leased by the department to farmers.

“The remaining amount of R932,478 was the interest the municipality charged the department from previous financial years and the department sent a letter for waiver of the interest (as it is a government-to-government transaction). The municipality has not yet responded to the letter,” Ngcobo said.

“The department is only behind with the amount of R63,000, which is for [old state] farms and  it is due to be paid by 15 December 2023.”

Ngcobo said the total amount owed to Eastern Cape municipalities was still being verified and once the process had been completed, the municipalities would be engaged in disputes, especially on property ownership.

The provincial department of education indicated that it was still waiting for information from the office of the chief financial officer, Thuliswa Ngcingwane.

The provincial department of public works said it was waiting for the head of department, Thandolwethu Manda, to approve its response. This is despite questions having been sent on 1 December. DM

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