The Dikgatlong Local Municipality in the Northern Cape has committed to submitting a report on unauthorised, irregular and fruitless and wasteful expenditure incurred by the local authority to the municipal public accounts committee and council before March 30. File image. Picture: Soraya Crowie
The Dikgatlong Local Municipality in the Northern Cape has committed to submitting a report on unauthorised, irregular and fruitless and wasteful expenditure incurred by the local authority to the municipal public accounts committee and council before March 30. File image. Picture: Soraya Crowie

Parliament hears of overspending, wasteful expenditure at Northern Cape municipality

By Sandi Kwon Hoo Time of article published Mar 16, 2021

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Kimberley - Dikgatlong Local Municipality in the Northern Cape has committed to submitting a report on unauthorised, irregular and fruitless and wasteful expenditure incurred by the local authority to the municipal public accounts committee and council before March 30.

During a presentation on the state of the municipality to Parliament on Tuesday, it was indicated that there was overspending in the 2019/20 financial year on bulk purchases arising from payments to Eskom and water boards, amounting to R39.8 million, while overspending of R42 million was attributed towards the depreciation of assets.

Irregular expenditure amounting to R1.3 million was also reported, relating to procurement in contravention of municipal supply chain regulations during the 2019/20 financial year.

It was stated that management was further investigating R11.5 million in fruitless and wasteful expenditure on the interest of late payment of suppliers.

Interest of R330,013 was incurred on the interest on late payment of PAYE to the South African Revenue Service, while interest on the late payment of value added tax (VAT) amounted to R4,488 and interest of R14,079 was charged on the late payment to third parties.

The municipality said that irregular expenditure incurred would be investigated to determine if any person was liable.

“A register of irregular expenditure and fruitless and wasteful expenditure is being updated regularly for the 2020/’21 financial year.

“Management has closed the budget in the financial system to prevent unauthorised expenditure.”

The municipality has spent R119 000 from the municipal disaster relief fund on purchasing sanitisers, masks, gloves and other personal protective equipment (PPE) and R5.1 million from the fund on improving municipal infrastructure.

The average revenue collection for March to June 2020 was 38.2 percent, while it dropped to an average of 31 percent for the period July to December 2020.

It was stated that management was ensuring that steps were being taken against anyone that contravened the Municipal Finance Management Act, after allegations of financial misconduct against senior managers had in the past not been investigated as required by disciplinary regulations.

The municipality indicated that only critical positions were being filled as it had been placed under a financial recovery plan.

The position of municipal manager and community services director are still vacant.

“The municipal manager position has been vacant since February 2020 and has been readvertised. The chief financial officer (CFO) post has been filled although the employee is on special leave. An acting CFO has been appointed internally. The technical services director is also on special leave and an acting director has been seconded from the district municipality.”

The municipality filled positions in supply chain management, asset management, civil engineering and town planning from January 2021.

“Vacant positions at senior management affect the overall performance of the municipality - including employees on special leave such as the municipal manager, CFO and technical services director.”

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