Households in Buffalo City Metro owe more than R1.29-billion in rates and services.
And business, government and unnamed others, owe a further R800-million, bringing the metro’s total debtor’s book to R2-billion.
This was revealed by metro mayor Xola Pakati in tabling the 2017-18 mid-year budget and performance assessment report before the BCM council on Wednesday.
“Total gross debtor’s book as at 31 December 2017 amounts to R2.13-billion compared to R1.94-billion in the 2016-17,” Pakati said.
Of this amount, BCM households account for R1.29-billion, businesses R526.37-million, government accounts R37.4-million and “other” accounts R267.52-million, Pakati’s report read.
This week the Eastern Cape auditor-general Sithembele Pieters applauded the metro for achieving an unqualified audit opinion.
However he flagged “other important matters” for the 2016-17 financial year and cautioned the metro to adopt an improved strategy around the collection from debtors “because in the long run it might affect the financial sustainability of the municipality”.
Pakati, addressing the media yesterday about the metro’s unqualified audit opinion, said the metro leadership had noted the comments made by Pieters,
“The other matter that was a concern of the auditor-general was our debt impairment as an institution which currently stands at R1.2-billion. We have noted these comments and we have developed an aggressive revenue enhancement strategy whose key feature is the management of our debtor’s book,” Pakati said.
Earlier, in his presentation to council, Pakati said it was a big problem that businesses were not keen to pay for services rendered to them.
“We are paying our taxes to the state, and the state is owing us R37-million .
“Although it is not a big amount,the state is expected to meet its obligations as we do with our tax returns,” said Pakati.
The report also highlighted that the total arrears owed by government departments to BCM since the start of the 2017-18 financial, as measured on December 31 2017 was already at R23.35-million.
“This indicates a decrease of R314831 when compared to the previous month, in the amount of R23.66-million,” the report read.
On December 31 the national Department of Public Works owed BCM R3.7-million while the provincial arm of the department owed R2-million.
The provincial department of education owed R2.9-million, health owed R7.5-million, social development owed R243 229 and members of the provincial legislature owed R246 587. Minor debtors in December month-end included the department of agriculture (R8435), human settlements (R62002) and the department of sports, recreation, arts and culture owed R797, among other departments.
Asked how the metro had allowed the debt to accumulate to more than R1-billion, Pakati said the debt was a result of the slow recovery of old consumer debt.
“We are still pursuing this but we are mindful of the socio-economic situation in our city, issues of unemployment where people are not capable of meeting the obligations to the municipality.”
As part of its unqualified audit opinion BCM recorded R287-million in irregular expenditure for the 2016-2017 financial year.
“If you talk about issues of irregular expenditure, it was a huge amount and now it has dropped to R287-million.
“We are still not happy about that, which I must underscore. We are coming from R500-million plus in the previous year; we have halved this and I think even this year we want to do more including halving this or eliminating it all.
“Our objective is to eliminate it all,” said city manager Andile Sihlahla yesterday. — mamelag@dispatch.co.za
BCM owed R1.29bn in rates by households
And business, government and unnamed others, owe a further R800-million, bringing the metro’s total debtor’s book to R2-billion.
This was revealed by metro mayor Xola Pakati in tabling the 2017-18 mid-year budget and performance assessment report before the BCM council on Wednesday.
“Total gross debtor’s book as at 31 December 2017 amounts to R2.13-billion compared to R1.94-billion in the 2016-17,” Pakati said.
Of this amount, BCM households account for R1.29-billion, businesses R526.37-million, government accounts R37.4-million and “other” accounts R267.52-million, Pakati’s report read.
This week the Eastern Cape auditor-general Sithembele Pieters applauded the metro for achieving an unqualified audit opinion.
However he flagged “other important matters” for the 2016-17 financial year and cautioned the metro to adopt an improved strategy around the collection from debtors “because in the long run it might affect the financial sustainability of the municipality”.
Pakati, addressing the media yesterday about the metro’s unqualified audit opinion, said the metro leadership had noted the comments made by Pieters,
“The other matter that was a concern of the auditor-general was our debt impairment as an institution which currently stands at R1.2-billion. We have noted these comments and we have developed an aggressive revenue enhancement strategy whose key feature is the management of our debtor’s book,” Pakati said.
Earlier, in his presentation to council, Pakati said it was a big problem that businesses were not keen to pay for services rendered to them.
“We are paying our taxes to the state, and the state is owing us R37-million .
“Although it is not a big amount,the state is expected to meet its obligations as we do with our tax returns,” said Pakati.
The report also highlighted that the total arrears owed by government departments to BCM since the start of the 2017-18 financial, as measured on December 31 2017 was already at R23.35-million.
“This indicates a decrease of R314831 when compared to the previous month, in the amount of R23.66-million,” the report read.
On December 31 the national Department of Public Works owed BCM R3.7-million while the provincial arm of the department owed R2-million.
The provincial department of education owed R2.9-million, health owed R7.5-million, social development owed R243 229 and members of the provincial legislature owed R246 587. Minor debtors in December month-end included the department of agriculture (R8435), human settlements (R62002) and the department of sports, recreation, arts and culture owed R797, among other departments.
Asked how the metro had allowed the debt to accumulate to more than R1-billion, Pakati said the debt was a result of the slow recovery of old consumer debt.
“We are still pursuing this but we are mindful of the socio-economic situation in our city, issues of unemployment where people are not capable of meeting the obligations to the municipality.”
As part of its unqualified audit opinion BCM recorded R287-million in irregular expenditure for the 2016-2017 financial year.
“If you talk about issues of irregular expenditure, it was a huge amount and now it has dropped to R287-million.
“We are still not happy about that, which I must underscore. We are coming from R500-million plus in the previous year; we have halved this and I think even this year we want to do more including halving this or eliminating it all.
“Our objective is to eliminate it all,” said city manager Andile Sihlahla yesterday. — mamelag@dispatch.co.za
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