GEORGE NEWS - Unauthorised expenditure by the George Municipality of R43,5 million and by Eden District Municipality of R236,7 million in the 2014/1015 book year, was discussed by the Western Cape standing committee on local government on Tuesday.
On Wednesday Ashley Olkers of the Western Cape auditor-general's office was quoted by Die Burger as having told the committee that George is one of six municipalities that contributed the biggest part of R604-million of unauthorised expenditure by 22 municipalities in the province for this period. Unauthorised expenditure is when an expenditure was not sanctioned by council.
In addition to George and Eden, the other big contributors were Oudtshoorn (R96,2 million), Kannaland (R31,2 million), Beaufort West (R28,5 million) and Stellenbosch (R49,8 million).
The report states furthermore that there had also been irregular expenditure by some municipalities to the amount of R340 million in the 2014/2015 book year.
An official in the George Financial Department told the George Herald that the unauthorised expenditures at the George Municipality come down to accounting obligations that have to be executed, but had not been budgeted for in the initial budget. This is annually corrected in the adjustment budget at the beginning of the year and is common practice.
• Employee related cost of R25,2 million. This includes provision for leave, pension payouts and employee benefits;
• Impairment losses of R7,6 million. This relates to budget overspending due to debtors and residents who do not pay their accounts;
• Depreciation and amortisation of R1,53 million;
• Interest charged on provision for the rehabilitation of landfill sites - R1,65 million;
• Capital expenditure of R7,56 million to make provision for the new requirements of landfill sites.
Irregular expenditure amounts to R12,24 million and relates to "minor breaches" of the procurement process as identified in the annual financial statements of 30 June 2014.
In the news report in Die Burger, Olkers is quoted as having said that the biggest problem in municipalities is debt collection. A total of 10% of the income that municipalities had to receive in the 2014/2015 book year, was irrecoverable.
He warned that some municipalities' economic viability is hanging in the balance and that they will be struggling in future. He did not clarify which municipalities these are and the George Herald could not get hold of him before the newspaper went to press to confirm the information.
Olkers also said that Kannaland, Beaufort West and Oudtshoorn had a total debt of R114,5m at the end of August this year and that consumers owed these municipalities more than R260-million.
Comment could not be obtained from Eden Municipal Manager Godfrey Louw or the office of Western Cape Finance Minister Ivan Meyer before going to press.
ARTICLE: MICHELLE PIENAAR AND ALIDA DE BEER, GEORGE HERALD
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