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The DA will be writing to MEC: Co-operative Governance, Traditional Affairs and Human Settlements (COGTA), Jacob Mamabolo to summon the Merafong Mayor: Ms Maphefo Mogale-Letsie, the Municipal Manager: M G Seitisho and Chief Financial Officer: Ms A R Ngwenya to appear before the Portfolio to account for the municipality’s dire financial situation.

This is after Merafong tabled its draft annual financial statements for the period 1 July 2014 to 30 June 2015 which revealed the following:
·          A deficit of R145 million for the year under review.
·         Unaccounted water losses of 6,516 million kilolitres of water to the value of R44, 574 million
·         Unaccounted electricity losses of 49,632 kilowatt hours to the value of R44, 268 million.
·         A failure to collect debts for municipal services supplied to residents to the value of R756 million, which is a 88% or R90 million increase from the previous financial year.

In July 2015 Merafong recorded a record low collection level of only 64%. This is against a budgeted 87%.

Currently Merafong City Local Municipality makes priority payments only to Eskom, the Rand Water Board and pays staff salaries. All other creditors are paid as and when funds are available.
This is in direct contravention of section 65 (2)(e) of the MFMA, which requires all creditors to be paid within 30 days.

It is clear that the Merafong City Local Municipality is in insolvent. Its financial commitments far exceeds its available revenue and any attempts at a turnaround strategy is clearly failing.

In terms of National Treasury Municipal Financial Management Act (MFMA) Circular 49 dealing with Non-Payment of Obligations, a municipality is regarded as being in financial distress if: “…a municipality fails to make payments when due and such failures amount in total to 2% of the municipality’s operating budget for that year may indicate that the municipality is in serious breach of its obligations, which is a factor in considering whether a mandatory intervention is necessary.”

The DA governed Midvaal municipality has been ranked as the best performing municipality in Gauteng when it comes to financial management. We have prioritised sound financial management where we govern because we realise that a municipality can’t deliver basic services if its finances aren’t in order.

It is critical that the ANC leadership in Merafong accounts for the current financial situation of the municipality, which is why the DA will ask for them to appear before the Gauteng legislature.

Issued by DA