FS Government’s financial mismanagement: The chickens coming home to roost
19 May 2015
For years now the systematic and deliberate mismanagement of public finances by the ANC-led provincial government and all the municipalities governed by them have seen clean and transparent governance and basic service delivery fall by the wayside.
The situation in the Matjhabeng Local Municipality is a perfect example of the ANC in government’s persistent financial mismanagement.
Matjhabeng Local Municipality is not only dysfunctional, it is bankrupt.
The municipality has never received a clean audit since its establishment and have received consecutive disclaimer of opinion audit outcomes with adverse findings for the last five financial years.
The municipality owes ESKOM almost R600 million and Sedibeng Water almost R1,1 billion.
Last week the municipality started disconnecting the electricity supply to public schools because, according to the municipality, 79 public schools owe the municipality about R11 million in overdue fees.
Considering that the municipality owes ESKOM R600 million, the R11 million owed by public schools is really minimal.
The twist, however, is that the ANC-led provincial Department of Public Works is responsible for the payment of bulk services of these no-fee public schools and it has failed to make timely payments. According to the then Public Works MEC, Sam Mashinini, the department has a shortfall of more than R265 million for the payment of municipal services across the province.
In short, the ANC-governed Matjhabeng Local Municipality, who has not paid the ANC-managed ESKOM for bulk electricity, has now disconnected electricity supply to public schools managed by the ANC-led Department of Basic Education, at the expense of our children’s education, because the ANC-led Provincial Department of Public Works has not made payments to the ANC-governed municipality.
The situation across other provincial departments and municipalities are much the same, if not worse.
It is a disaster of perverse proportions. The chickens have come home to roost.
Nine municipalities in the Free State received disclaimed audit outcomes for the 2013/14 financial year and a further five received qualified audits with findings.
Only three provincial departments received a clean audit, Treasury, the Provincial Legislature and Sports Arts, Culture and Recreation.
Free State municipalities collectively owe ESKOM and various Water Boards more than R3,2 billion and carry an uncollected household debt of almost R6 billion.
For years now both the Department of Health and the Department of Education are struggling financially to meet their obligations due to massive accumulated accruals. Accruals for Health exceed R800 million and for Education a staggering R1,2 billion.
More shockingly, the AG reported an increase of 87% in unauthorised expenditure in the Free State amounting to R470 million during the 2013/14 financial year and irregular expenditure came in at R2,429 billion. In total the province lost almost R3 billion to questionable financial management practises.
As the ANC in government continue to place cadres before the interests of the people, the financial situation in the province will only deteriorate further. Increasingly service delivery and good governance are the victims of the ANC’s financial mismanagement.
The DA has repeatedly raised concerns on the entrenched financial mismanagement in the Free State and called for numerous interventions to prevent a total collapse. Sadly, the ANC-led government under the premiership of Ace Magashule have dismissed our concerns since any sort of intervention would not be beneficial to their self-interest.
Only a DA government in the Free State can prevent the total collapse of governance here.
Statement issued by David van Vuuren, DA Chief Whip in the Free State Provincial Legislature, May 19 2015
