Mangaung Municipality in spending crisis after exceeding budget

The fact that the Mangaung Municipality in Bloemfontein managed to spend 111% of its budget in 2023-24, yet only delivered 45% of expected services, shows that the municipal sector in South Africa is in crisis, says the SA Municipal Workers Union (Samwu).

Samwu Free State provincial secretary Thabang Tseuoa said the crisis was brought about by “systemic governance failures, entrenched financial mismanagement, widespread corruption”.

He said underperforming and corrupt officials were “often protected due to party loyalty rather than competence or ethical conduct”.

Auditor-general report on Mangaung Municipality

Auditor-general (AG) Tsakane Maluleke told the select committee on public accounts this month that the metro had overshot its budget by spending 111% for the 2023-24 financial year.

In cases where payment obligations were to be fulfilled, payments and extensions made were not in line with the contract and contractual obligations were not settled within 30 days as required by Treasury rules.

ALSO READ: Eskom to disconnect 15 Free State towns over billions worth of debt

The AG found that the root cause of the problem was the metro’s weak financial governance, lacking oversight mechanisms and insufficient knowledge, skills, or awareness among staff regarding proper internal control procedures.

The union blamed the provincial cooperative governance and traditional affairs department and provincial Treasury for implementing ineffective interventions that worsened the rot.

DA expresses concern over city manager

The sentiments were echoed by DA ward 24 councillor and party caucus chair Dirk Kotzé, who said Mangaung’s financial woes would continue because its senior officials were allegedly implicated in financial mismanagement and not made to account.

“It is deeply problematic that the city manager is expected to initiate investigations through the disciplinary board, while being directly implicated,” Kotzé said.

“There are no countermeasures in place to curb excessive overtime payments, which threaten to leave the budget unfunded.

“Additionally, there are no commitments to improve revenue collection rates, nor has there been any change in the policy to collect outstanding government debt.”

READ MORE: Water wasted in Free State totals R3.7 billion in last seven years

Kotzé said that consequence management was not prioritised by both the political and administrative leadership in Mangaung.

He cited a case of hacking of the municipality’s information system in a ransomware attack where the hackers demanded R10 million.

“The incident was investigated by the Hawks and a report was presented to the council implicating certain officials.

“However, to date, there has been no feedback and no action,” Kotzé said.

Full probe into Mangaung Municipality

He called for the AG to conduct a full forensic investigation into the Mangaung metro and Centlec billing systems, which allegedly had inaccurate readings and estimated billing.

“We believe the integrity of the system’s data has been compromised since the 2023 ransomware attack,” Kotzé said.

In 2019, Mangaung was placed under national government intervention to rescue it from its dire financial situation.

“Despite the financial recovery plan implementation, only 45% of key service delivery targets were achieved, but 111% of the budget was spent.

“After a year of implementation, it has not yielded improvements in the financial state of the municipality,” the AG report said.

NOW READ: Matjhabeng municipality’s appeal rejected amid financial challenges, service delivery collapse