LIMPOPO – The Greater Giyani Municipality (GGM) is said to have underspent on its operating expenditure despite achieving 100% on conditional grant spending.

Speaking on Thursday during the GGM full council sitting held in the Giyani Community Hall, municipality audit committee chairperson Kenneth Mhlongo expressed concern over the municipality’s failure to utilise its budget fully.

Operational spending falls short

“The municipality managed to spend all the conditional grants it received for the financial year, which is a positive indicator of progress in service delivery,” explained Mhlongo.

“However, one of the concerns is the low operating expenditure, which stood at R540 million against a budget of R744 million. This means the municipality only reached 72.5% of its target, which is below the 100% it was expected to achieve,” he said.

Mhlongo explained that the committee was informed that the low expenditure was partly due to vacant positions for the director of technical services and the director of planning, as well as other posts.

Meanwhile, capital expenditure was also low, with R123 million spent against a target of R171 million, placing the municipality at 71.74%, below the 100% target.

Revenue collection below target

On revenue collection, Mhlongo reported that the municipality achieved only 54.5% against the adjusted budget. “This means that out of every rand the municipality was supposed to collect, it only received R0,54 cents; translating to R52 million against a target of R96 million,” he said.

He further noted that revenue collection on billing was also low, sitting at 52.53%, which translates to R52 million against R101 million that was supposed to be collected during the financial year.

Irregular and fruitless expenditure rises

With regard to fruitless expenditure, Mhlongo reported an increase of R3.3 million.

“The municipality recorded R10.3 million in the third quarter, which increased to R13.3 million in the fourth quarter,” he said. “Irregular expenditure is also quite high, sitting at R22 million.”

According to Mhlongo, the municipality’s total expenditure against the adjusted budget stood at 72.37%. He said the audit committee had recommended that the municipality implement strategies to encourage a culture of paying for services.

Calls for accountability and recovery plans

He further recommended that the performance of the appointed debt collectors be closely monitored.

“We suggest that the municipality set clear targets and track the debt collector’s performance to ensure they deliver as expected,” Mhlongo said.

Meanwhile the issue of irregular expenditure has angered some councillors, who are demanding an explanation of how the municipality failed to detect people doing business with it while also working for the government, which is said to have led to irregular expenditure.

Cllr Tiyani Nkuna questioned the R22 million irregular expenditure. He urged the audit chairman to table a report on the next meeting explaining what the municipality intends to do about those contributing to irregular expenditure.

“Consequence management needs to be applied so that those who are in the wrong are dealt with,” he added.