Durban - The turmoil in the IFP-run eMadlanengi (Utrecht) Local Municipality in northern KwaZulu-Natal is far from over after the municipality was reported to the provincial treasury over allegations that it had passed a questionable budget.
The budget in question is for the 2022-23 period and was passed last week despite objections from the ANC, which is the opposition in the municipality.
According to a letter that was sent to the MEC for Treasury, Nomusa Dube-Ncube, by an ANC councillor, Vusi Ndlovu, the budget is unfunded.
An unfunded municipal budget is one which is deemed not credible or the revenue projections are unrealistic, the operating expenditures are too high, or the capital budget is too ambitious.
“The following reasons are informing me to submit this objection to your attention: There was a special council meeting on 2 May 2022 where the items were to approve the municipality budget and IDP (Integrated Development Plan), but the budget was not approved because it was not funded, then it was sent back for corrections. Also in that meeting the recommendations of the executive was not part of the agenda.
“Then there was a special meeting on 2 June 2022 at 15:30pm and it was a virtual meeting where the Exco (executive council) did not sit to make recommendations to council as mentioned on the structures act of 117 of 1998 in 30(5) which stipulate that: (5) before a municipal council takes a decision on any of the following matters it must first require its executive committee or executive mayor, if it has such committee or mayor, to submit to it a report and recommendations on the matter,“ Ndlovu said in the letter to Dube-Ncube dated 2 June 2022.
He said all that was not done, hence he is objecting to the budget. He added that all municipal laws and procedures were not followed.
Nathi Olifant, who speaks for the department, said: “The Office of the MEC can confirm receipt ... of the letter in question from Cllr Ndlovu. The letter was received via the office of the Head of Department. The MEC is yet (to) apply her mind on its contents which have been noted by her office.”
In a statement on Wednesday, the municipality denied that it had flouted the law in passing the budget, but the points raised by Ndlovu were not addressed.
“The recommendations of the executive committee were tabled to council on 26 May 2022, as per Section 24(1) of the Municipal Finance Management Act 56 of 2003, and council resolved not to approve the budget as the Provincial Treasury assessment on the draft budget had indicated that the budget is unfunded due to an overestimated collection rate and other budget assumptions.
“It must be stated that Provincial Treasury highlighted that they had raised concerns with the budget even in the previous financial year and the previous administration failed to address those concerns,” reads the statement.
The municipality said it did not require a condonation as the July 1 deadline had not yet lapsed.
“The purported condonation that should have been sought is factually incorrect as this is only done if you fail to approve the budget by the first day of the succeeding financial year, which is 1 July,” it said.
In the same statement, the municipality admitted for the first time that it was facing financial challenges, but said it was working on addressing them.
“While the municipality is facing challenges, the current administration is working tirelessly to stabilise and turn around the financial situation of the municipality. In this regard, the council has implemented cost containment measures to curtail irregular and wasteful expenditure and has taken action against those who are alleged to have mismanaged funds of the municipality.”
Daily News