The financial health report of the Matjhabeng Local Municipality in Free State presents a bleak picture, despite a mandatory financial recovery plan (FRP). In June of last year, Matjhabeng was placed under provincial administration following a Bloemfontein High Court ruling amid the total collapse of service delivery and a R16-billion debt crisis.
Matjhabeng, which covers areas such as Welkom, Virginia, Odendaalsrus and Allanridge, has been the epicentre of rampant corruption, financial mismanagement, and questionable appointments, including service delivery failures when it comes to sewerage, water, electricity, and infrastructure collapses.
Sunday World has seen the report on the ANC-led municipality under mayor Thanduxolo Khalipha, which reveals how Matjhabeng had repeatedly failed to meet its financial obligations. When it was placed under administration, former economic, small business development, tourism, environmental affairs and education MEC Makalo Mohale was appointed provincial executive representative, tasked with
stabilising the municipality and ensuring the implementation of the FRP.
Mohale’s priority was to restore Matjhabeng’s financial health through restructuring operations, reduce financial leakages, and implement control measures to manage financial obligations, including an enhanced revenue collection drive.
According to the report, the municipality owes Eskom R7-billion and Vaal Central Water a staggering R9-billion.
The report also states that the municipality received a qualified opinion in the past three years because the budget steering committee was not meeting to discuss crucial budget matters and votes, while issues around expenditure, revenue, and contract management, including asset management, were flagged as concerns. For several years, Matjhabeng’s revenue collection stood at 51%, resulting in its debt increasing to R895-million.
The procurement of goods and services is said to be uncoordinated and not compliant with legal statutes. Governance issues, including the appointment of legal contractors and a dysfunctional disciplinary board, are also cited.
On the issue of service delivery, which directly affects residents, water distribution losses cost Matjhabeng R418-million, electricity supply losses are sitting at R204-million, and the infrastructure has completely collapsed with sewer and water leakages across areas run by the municipality. Money spent on maintenance was found to be 1.2% of the budget, much lower than the norm of 8%, as master plans are non-existent and outdated.
Mohale said: “I can confirm that there are serious problems with the implementation of the Financial Recovery Plan. However, please contact Provincial Treasury and Cogta departments for further details. I cannot discuss these with the media.”
Free State provincial government acting spokesperson, Setjhaba Maphalla and the premier Maqueen Letsoha-Mathae’s spokesperson, Mpho Sikisi as well as Tshediso Tlali who speaks for Matjhabeng did not respond to questions sent to them at the time of going
to print.
