Emfuleni in ‘serious financial trouble’

VANDERBIJLPARK. – “Although it is well- known that the Emfuleni Local Municipality (ELM) has been in financial trouble for a number of years, the Auditor-General report indicating the financial position of the municipality as at 30 June 2014 describes a very concerning financial situation.” This is the message from Hendrik Schmidt, MP Constituency Leader in Emfuleni South.
According to the AG report as at 30 June 2014, the municipality suffered material losses to the amount of R175 million (in the financial year 2012-13: R169 million) for water losses being 34% of the water purchased by the municipality and suffered a further loss of R278 million (in the financial year 2012-2013: R1.211 billion) for electricity distributed by the municipality. These losses alone amount to a staggering R453 million. More concerning however, says Schmidt, is the remarks by the AG that Emfuleni incurred a deficit of R192 million during the 2013-14 financial year alone and that its liabilities exceeded its assets by R160 million. “As stated by the AG, these figures create significant ongoing doubt on the municipality’s ability to operate.
“In short, it means that had the municipality been a private company, it would in all probability have had to close its doors or be in the process of doing so. With regard to the reliability of information pertaining to the municipality’s duties to provide services for water, electricity and waste water management, the AG reported that the information issued by the municipality was not valid, accurate and complete when compared to the source information or evidence provided,” says Schmidt. In his opinion the concerning statements make it clear that the administration of ELM is not functioning as it is supposed to. “It was stated unequivocally by the AG that the financial statements submitted by the ELM were not prepared in all material respects in accordance with the required legislation. The failures of the ELM arose from an inept ABC controlled council appointing an inept municipal manager running an inept administration.
“We call on the municipality to indicate what action steps have been taken to resolve its financial crisis,” demands Schmidt.