Lack of consequence management a death knell for local municipalities in Limpopo
11 October 2019
The Portfolio Committee on Cooperative Governance has criticised the lack of clear and substantial consequence management in local government in Limpopo despite continuous transgressions. The committee is of the considered view that without concomitant action, municipalities will continue to struggle to deliver quality services, which will impact on residents, especially the poor.
What has come out clearly from the engagements with the Office of the Auditor-General, the Provincial Co-operative Governance, Human Settlements and Traditional Affairs (CoGHSTA) and municipalities that invested monies into Venda Mutual Bank is that those municipalities are technically insolvent. This impacts on their financial viability and on the ability of municipalities to service their creditors. This is likely to continue in the foreseeable future and has a direct impact on the ability of municipalities to deliver quality service delivery to the people. For example, the Collins Chabane municipality is now unable/unwilling to fill vacant positions in an effort to maintain a positive cash-flow balance, but to the detriment of the ability of the municipality to service its clients.
The saga around investments into the Venda Mutual Bank (VBS) is concrete illustration of lack of consequence management in the face of municipalities in the province cumulatively losing over R1.2 billion, which has a direct impact on service delivery. “It is concerning that some municipalities have even paid out Municipal Managers (MMs) and Chief Financial Officers (CFOs) who have been identified to have been central in investing the money of the municipalities into VBS. There is clear lack of appetite for consequence management, which undermines prescripts of good governance,” said Ms Faith Muthambi, the Chairperson of the committee.
The Municipal Finance Management Act clearly sets out the responsibilities of both Accounting Officers and Municipal Council and the consequences attached to any action that is contrary to the act. It is obvious that various MMs and CFOs committed financial misconduct in terms of section 171 (2) and 173 (1)(a)(iii). It is in this context that the committee is perplexed that despite suspensions of various MMs and CFOs, no further action has been taken.