Two Free State local municipalities are plagued by a string of qualified audit opinions, rising Eskom debt, and a poor record of service delivery, among other challenges.
From 2015, the Dihlabeng local municipality’s audit opinion declined from an unqualified opinion to a string of qualified opinions.
The poor audit outcomes saw Dihlabeng municipality’s Eskom debt rising from R74-million in 2015 to R1.1-billion in 2024.
This was revealed on Tuesday during a virtual parliament meeting with the portfolio committee on cooperative governance and traditional affairs (Cogta), the standing committee on public accounts, and the standing committee on the auditor-general, along with several members of the provincial legislature in the Free State.
The purpose of the meeting was to conclude the engagements with the final four municipalities in the Free State following a joint parliamentary delegation that conducted a joint oversight visit to the province in July.
The delegation, led by Cogta chairperson Dr Zweli Mkhize, engaged with 23 municipalities in the Free State in July.
However, due to time constraints, it was unable to pose questions to the last four municipalities – Setsoto local municipality, Dihlabeng local municipality, Nketoana local municipality, and Phumelela local municipality.
These municipalities appeared before parliament on Tuesday to answer questions from members of parliament.
It was further revealed at the meeting that the Nketoane municipality has ageing water infrastructure and a water treatment works plant that fails to meet the current demand in the municipality.
Municipality’s unfunded budget
During proceedings, Dihlabeng municipality’s municipal manager, Mohau Ntheli, said: “From 2015, the municipality’s audit opinion declined from an unqualified opinion to a string of qualified opinions that has lasted to date. The Eskom debt escalated from R74 million in 2015 to R1.1 billion in 2024.”
Ntheli said the municipality currently has an unfunded budget.
“The income figures have been overinflated, and the provision for debt impairment has been underbudgeted. We have addressed the overinflated income figures and budgeted for a 75% payment rate in the 2025/26 budget.
“The council developed and approved a revenue enhancement strategy and a budget funding plan in December 2024.
“The municipality has managed to improve the payment rate from 45% to 70% in the 2024/25 financial year.
“The hindrance in getting to the 75% is the fact that government departments owe the municipality R140-million,” said Ntheli.
Water services challenges
Mokete Nhlapo, the municipal manager of Nketoana, stated that the municipality faces numerous challenges with its water services.
Nhlapo said there are old asbestos cement pipes that need to be replaced, maintenance challenges that have led to a high number of leakages, ageing water infrastructure, water treatment works that do not meet current water demand, and six water pump stations running without standby pumps, among others.
To address these water challenges, Nhlapo said the municipality plans to replace old asbestos cement pipes with PVC pipes, adding that it is going to increase the capacity of the water treatment works to meet demand.
NNhlapo added that the municipality faces challenges with landfill sites and its reliance on an outdated refuse collection fleet.
To address this challenge, he said, the municipality will purchase refuse compactors every year.
Collapse in service delivery
During parliament’s oversight visit in July, among the issues the delegation interrogated were Free State municipalities’ billions of rand in unpaid debt, with one municipality owing over R8-billion to a water board; failure to pay pension contributions deducted from workers’ salaries; and paying millions of rands in often unauthorised overtime.
At the same time, the parliament delegation concluded that service delivery has all but collapsed.
“Municipalities also had to account for litigation driven by unpaid service providers, irregular tenders, decades-long impunity, and unauthorised, irregular, fruitless, and wasteful expenditure reported of over R7-billion in some municipalities,” said Mkhize.
Following the conclusion of its engagement with municipalities, Mkhize will outline the next steps as the parliamentary committees are scheduled to move to North West and Gauteng at the beginning of September, where members will engage with more municipalities.
