SA municipalities owed billions

South Africa’s municipalities are owed R19,2-billion and do not expect to recover more than 50% of this debt.

Municipalities’ failure to effectively collect money for services rendered is severely impacting on service delivery, Auditor General Shauket Fakie said on Monday.

Johannesburg alone has made a bad-debt provision of R7,2-billion.

”Really, that’s serious stuff,” Fakie told the delegates at the national assembly of the South African Local Government Association (Salga) in Durban.

Some municipalities have average debt-collection periods of up to 500 days, with the average of the country’s top 50 municipalities being 136 days.

This delay affected the liquidity ratio for municipalities, which was at 1,2:1 when the norm was 2:1.

Without municipalities’ bad-debt provision, many would be in ”serious trouble”, said Fakie.

Municipalities’ late submission of annual financial statements is another problem.

It makes accountability difficult, particularly in cases of mismanagement and corruption — as did high staff turnover — and places enormous stress on his department’s ability to carry out municipal audits.

”They [annual financial statements] are a key to show how we have spent money. They are an important tool to hold municipalities to account. Accountability delayed is accountability denied.”

Fakie said a few of the country’s 284 municipalities have still not submitted statements for the 2004 financial year-end.

He said 27 had not submitted their 2005 statements by March 2006. The municipal year-end is April 30.

However, this is an improvement on the previous year when 40 municipalities did not submit their statements.

Fakie said other issues needing attention were:

Deputy President Phumzile Mlambo-Ngcuka will address Salga delegates on Tuesday, the second day of the three-day conference at Durban’s International Conference Centre.

A progress report on salary negotiations with trade unions will also be released on Tuesday. — Sapa