Amathole's development agency will be unable to pay its staff next month.
This shocking revelation was made by executive mayor Nomasikizi Khonza on Friday at a council meeting of the cash-strapped district municipality (ADM).
Addressing a press conference afterwards, Khonza said that the financial woes of Aspire, the development agency, were as a result of being months without a chief financial officer (CFO) and chief executive officer (CEO).
“Aspire received a qualified audit from the auditor-general. This is a result of weak governance and some financial management issues,” Khonza said.
In a report Khonza tabled on the municipality’s mid-year budget and performance assessment, she said the challenges facing the agency resulted in the agency achieving only 6% of its quarterly targets.
“These challenges include the constrained budget which is insufficient to cover the operational costs of the agency for the financial year. As such only core expenses have been incurred in order to keep the doors open, but this situation needs to be addressed urgently, as the agency will from February have no budget to even pay salaries,” the report reads.
The agency is not new to controversy – its former board members sued the municipality for defamation costs of R5-million and demanded a public apology last year. A new board has since been appointed but the agency operated for months with an interim board and without a CEO and CFO.
Then-CEO Nokulunga Mnqeta was suspended in December 2014 on charges of misconduct and bringing Aspire into disrepute. The CEO parted ways with the agency in June 2015 following an out-of-court settlement.
The term of the board expired in July, paving the way for council to rehire Mnqeta as CEO of Aspire. She took up the position in August.
Khonza said the municipality would intervene with a cash injection. “We have put measures in place to improve the situation and turn Aspire around, starting with the appointment of the new board recently.
“We will work closely with the board and closely monitor developments within the agency to ensure that it remains the beacon of hope for the regeneration of our small towns.
ADM agency faces cash crisis
This shocking revelation was made by executive mayor Nomasikizi Khonza on Friday at a council meeting of the cash-strapped district municipality (ADM).
Addressing a press conference afterwards, Khonza said that the financial woes of Aspire, the development agency, were as a result of being months without a chief financial officer (CFO) and chief executive officer (CEO).
“Aspire received a qualified audit from the auditor-general. This is a result of weak governance and some financial management issues,” Khonza said.
In a report Khonza tabled on the municipality’s mid-year budget and performance assessment, she said the challenges facing the agency resulted in the agency achieving only 6% of its quarterly targets.
“These challenges include the constrained budget which is insufficient to cover the operational costs of the agency for the financial year. As such only core expenses have been incurred in order to keep the doors open, but this situation needs to be addressed urgently, as the agency will from February have no budget to even pay salaries,” the report reads.
The agency is not new to controversy – its former board members sued the municipality for defamation costs of R5-million and demanded a public apology last year. A new board has since been appointed but the agency operated for months with an interim board and without a CEO and CFO.
Then-CEO Nokulunga Mnqeta was suspended in December 2014 on charges of misconduct and bringing Aspire into disrepute. The CEO parted ways with the agency in June 2015 following an out-of-court settlement.
The term of the board expired in July, paving the way for council to rehire Mnqeta as CEO of Aspire. She took up the position in August.
Khonza said the municipality would intervene with a cash injection. “We have put measures in place to improve the situation and turn Aspire around, starting with the appointment of the new board recently.
“We will work closely with the board and closely monitor developments within the agency to ensure that it remains the beacon of hope for the regeneration of our small towns.
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