AG CONCERNED ABOUT FINANCIAL HEALTH OF MUNICIPALITIES
Whereas the Auditor Common has famous enhancements in lots of municipalities, he says the monetary well being in 9-out-of-10 councils is regarding or requires intervention.
They present that fifty four out of 272 municipalities acquired clear audits, that’s up from simply thirteen in 2010.
Makwetu says there’s a excessive danger uncertainty surrounding the monetary sustainability of many municipalities some even incurring internet deficits.
“Which means that the entire quantity of assets out there for them to spend are exceeded by the quantities of cash they’re dedicated to within the type of expenditure.”
He says in some instances there are indicators of present liabilities exceeding present belongings.
“To be a internet present legal responsibility place, these belongings which are alleged to be obtainable for the continuation of the supply of providers are beginning to disappear over time.”
Makwetu has urged municipalities to implement stricter monetary controls.
MAKWETU CITES PAYING DEBT LATE AS CONTRIBUTING FACTOR TO CASH FLOW ISSUES
The AG additionally says the failure to timeously gather debt has led to money circulate issues at many municipalities, which finally impacts their capability to ship providers.
He says many municipalities merely take too lengthy to get well debt for providers they’ve offered.
“Nevertheless, once they should make their funds to their suppliers they’re usually pushed to pay a lot earlier or to pay faster.”
He says this implies the majority of their money is sitting is another person’s pocket for more often than not.
“Which is elevating problems with liquidity of the municipality. Does the municipality all the time have adequate money assets to satisfy its obligations as and once they come up?”
Makwetu says non-compliance of provide chain administration controls stays stubbornly excessive.
(Edited by Refilwe Pitjeng)