Chris Ndaliso
Senior journalist
5 minute read
10 Jun 2022

Msunduzi placed under voluntary financial intervention

Chris Ndaliso

Msunduzi Municipality has placed itself under voluntary financial intervention by the National Treasury, the executive committee heard on Thursday.

Msunduzi Municipality has placed itself under voluntary financial intervention by the National Treasury, the executive committee heard on Thursday. 

A team from treasury presented their finance recovery plan for the ailing municipality, with opposition parties applauding the move.

Addressing the councillors during a virtual meeting, treasury representative Ronnie Makopo said the (acting) municipal manager Nelisiwe Ngcobo had approached them with a proposal to review the City’s financial recovery plan.

There are no clear time frames for the team’s involvement in the financial affairs of the municipality. 

“On our part we identify all the root causes of municipal struggles and work on a plan that will turn municipalities’ fortunes around. Lack of the right people to action and implement recovery plans and programmes can drive municipalities under. The new approach to the finance recovery for Msunduzi will be three-fold – rescue, stabilisation and sustainability,” said Makopo.

“What we have established in most municipalities is that political and administrative instability were the cause of troubles for the well-functioning of the councils. A number of other factors also play a role in the failure of municipalities,” said Makopo.

He said the process of assisting struggling municipalities involves ensuring that municipal expenditure doesn’t translate to irregular, wasteful or fruitless exercise. “We ensure that we don’t pay inflated prices for goods and services in any category. 

“In some municipalities managers hold on to power alone, hence the delays in turnaround times in services delivery. 

“We also need to ensure consequence management because when one wrong goes unpunished for a long time, some employees and officials begin to think that wrongdoing is the right thing to do,” he said.

“Lack of organisational structure that is fit for purpose (of working for the good of the municipality) is another challenge for some municipalities,” he said.

He warned that customer care and data accuracy was crucial in curbing service delivery related protests.

“A happy customer finds it easy to come and pay for services rendered,” he said.

He said a key success factor in the plan was political by-in where political problems find political solutions.The finance recovery plan activities should be linked to key financial outputs, that is, increasing revenue and decreasing expenditure.

“The first step in the financial recovery process is a diagnostic assessment to determine the reasons for the crises in a municipality’s financial affairs. 

“The goal of this is to determine the status quo, root causes of the financial crisis and to what extent an intervention is required, and if so, which type of intervention. 

“The key assessment areas for such intervention are governance, human resources, financial management and service delivery,” said Makopo.

“We believe the voluntary intervention was long overdue because for us it is the well-being of our people that counts most. If we can’t give people what’s due to them on our own, then we are prepared to do that with the assistance of other state organs,” said Msunduzi Mayor Mzimkhulu Thebolla.

“This intervention was not imposed on us but we saw it fit to seek this necessary support. We will work with the team from the National Treasury,” he added.

DA councillor in Msunduzi, Ross Strachan said the intervention was long overdue.

“After many cries, requests, and the handing over of a memorandum highlighting our pleas for National Treasury to intervene with a Financial Recovery Plan, this has finally been conceded by Msunduzi leadership.

“The current intervention has failed dismally, only taking this municipality on a downward spiral, especially with the political interference from the province. 

“We welcome this progressive, and long overdue intervention that will surely make a positive impact on this crippled situation,” said Strachan. 

He said his party will ensure it works hard with the National Treasury and all parties willing to co-operate in terms of making the decisive unpopular decisions to turn this situation around.

In a joint statement, Msunduzi Association of Residents, Ratepayers and Civics, and Chasedene and Chase Valley Residents Ratepayers Association said this was a necessary intervention as putting the municipality under administration has failed. 

“National Treasury officials will do what is necessary, as long as they are not scared off by death threats. 

“The time frames are realistic but they are very thin on dealing with the structural challenges.  Systems (SAPS) do not work, the credit control policy needs to be aligned with the Municipal Systems Act. But overall, to whom will they report: Municipal Public Accounts Committee or Exco? 

“The community is entitled to participate in reviews of municipal performance and the ratepayers associations need to be involved in this process. 

“What is needed is a comprehensive long-term turnaround strategy and political will to turn things around for the better,” said the ratepayers.

According to Thebolla, they will be accountable to both Treasury and Msunduzi council. The ACDP is in full support of such proposed intervention by national treasury.

It is abundantly clear that the financial turnaround that the Cogta intervention (section 139 b of the constitution) was supposed to bring about was a spectacular failure. The theft of water and electricity continues unabated.

Officials are not implementing the credit control policy of council — in direct violation of their job descriptions with no consequence management from senior management who are in cahoots with the majority party in allowing their constituents to steal in exchange for political support. It is therefore imperative that national treasury intervene.

The intervention should result in the credit control policies being implemented and monitored, politicians kept at bay and with the implementation of consequence management for non compliance by officials.

No business in the world can afford to pay senior management officials R2 million a year to be ineffective. The intervention by national treasury will be welcomed by the ACDP.