Is our council bankrupt?
All the while, rumours circulate that they are in financial trouble
Looking at the headline, this is a question that has begun plaguing local businessmen as the municipality battles to pay what it owes.
It is not an isolated phenomenon; countless businessmen are carrying municipal debts, ranging from hundreds to hundreds of thousands of rands.
And not for a little while either; some businesses have not been paid in 120 days.
“While it is normal for most municipalities to be slow payers, the scale of the debts which continue to mount is concerning,” explained one businessman owed over R100,000.
The debt which has built up over several months has a single point of origin, it appears: the amalgamation of Indaka and Emnambith/Ladysmith municipalities into Alfred Duma Local Municipality.
Before this, businessmen say you would wait a while for payment, but never this long.
Despite the municipality being asked to respond to allegations that they may be facing a financial crisis, at the time of going to press, they had not responded. All the while, rumours circulate that they are in financial trouble.
While it would be easy to leave the story there, we have dug deeper.
It seems that although nobody has yet admitted it, there appears to be a problem with the accounting package used to pay accounts.
It is unclear at this stage who is to blame and why Alfred Duma Local Municipality needed to buy a brand new R4 million account payment system which we are reliably informed does not work properly.
Currently, where the municipality was able to pay millions of rands to people they owed money to, they are only able to process payments of a few hundred thousand rand per month.
Making a simple payment is very laborious and time-consuming, an insider told the Gazette. It is understood that the municipality is negotiating with the service provider to fix the issue.
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