The staff of Okhahlamba local municipality in the KwaZulu-Natal Midlands is facing a bleak future after the municipality ran into financial difficulties.
The dire situation is such that the municipality has been warned that it may not be able to pay staff salaries for April, May and June this year.
This revelation is contained in a letter that was written by the KwaZulu-Natal Department of Cooperative Governance and Traditional Affairs (CoGTA) to the mayor of the municipality, Vikizitha Mlotshwa.
Coalition of ANC and little-known APEMO party
The municipality is run by a coalition of the ANC and little-known APEMO political party following an electoral stalemate in the November 2021 elections.
CoGTA was first alerted about the dire financial state of the municipality by the audit committee. A team was later sent to assess it. It was then discovered that there were “significant liquidity challenges.”
“The department’s financial assessment revealed significant liquidity challenges within the municipality. This includes substantial cash flow deficits. Cash flow projections provided by the municipality indicate that it will have a cash deficit of R34.6-million. This is projected by the year ending June 2025. The municipality is at risk of not paying salaries in the months of April, May and June 2025,” reads the letter that CoGTA sent to Mlotshwa.
Municipal public accounts committee collapse
During the assessment, it was found that the municipal public accounts committee (Mpac) has collapsed. This is a key committee that is tasked with overseeing spending patterns of the municipality. Its collapse left it vulnerable to further looting of public funds.
The department wanted to know why the investments accounts of the municipality have been emptied. Also why the municipality hired more staff even when there was no money budgeted to pay them.
Cost-cutting measures
The municipality said it has undertaken cost-cutting measures. These include reduced overtime, fuel usage, and a halt on non-essential programmes and social events.
It added that the financial strain partially stems from emergency capital projects. These were initiated in response to severe storm damage and flooding in late 2023 and early 2024.
“To stabilise the municipality’s financial position, the Accounting Officer has initiated a recovery plan. It focuses on debt collection, stricter cost control, and enhanced oversight.
“We are also working closely with stakeholders such as uThukela District Municipality and Eskom. This to implement credit control measures and recover outstanding debts,” the municipality said in response to Sunday World about the matter.
