CFO’s bid to write off R40m of ‘irrecoverable’ debt shot down

Buffalo City Metro chief financial officer Vincent Pillay’s hopes of writing off more than R40-million of “irrecoverable” debt from non-indigent and deceased indigent ratepayers collapsed after council found discrepancies in the report and rejected it.

The report, with the names of those who are claimed to owe the metro millions, was tabled before council on Wednesday with the purpose of getting approval for the write-off of R40.5-million. Instead angry councillors called for the report to be withdrawn until the list was “cleaned”.

The decision came after councillors found the names of professional people, including school principals, teachers, a ward councillor and business owners.

While Pillay said in his report that the municipality had conducted an “in-depth analysis” of the billing book year in 2012 for the debt as at August 30, 2010, councillors tore the report apart and called for it to be fixed.

The DA’s Terence Fritz said: “If they are talking about deceased and indigent write-off, where did they get the information from? Every year we write off bad debts like this, we wrote off last year, and I want to know what happened to the bad debt that was written off last year? Why are some of the same people reflecting on these write-offs again?

“You have a school principal that is written off and he is not deceased. Do we just create bad debt to write off? Is this the actual debt? If you look at King William’s Town Housing Association do we just write off certain amounts?” Fritz asked.

In his defence Pillay said the process of verifying the information was a “tedious” exercise that involved not only the finance department.

The R40.5-million debt was divided as follows:

lElectricity: R8.5-million;

lRates: R3-million;

lRefuse: R5.9-million;

lSewerage: R2.5-million;

lSundries: R7.1-million; and

lWater: R13.5-million.

Council chief whip Mzwandile Vaaibom expressed shock at finding ANC ward 44 councillor Leon Mentoor’s name on the list.

COPE councillor Khayalandile Twalingca said he could not understand how some people owed more than R200000 for municipal rates. “The administration must explore a better way of dealing with this. We have a problem with our system and the administration should go to other municipalities and learn if needs be, because we will write off debts here only to find out it is business owners.”

While the ANC proposed that the write-off be approved and the list cleaned later, opposition parties said it would be impossible to sort out the list after the write-off.

Following the highlights of the discrepancies BCM mayor Alfred Mtsi admitted there were “loopholes” in the metro’s systems and said a permanent solution needed to be implemented.