Improved financial performance for Makana

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Dear Residents

On 31 August, Makana Municipality submitted it’s 2018/19 Annual Financial Statements to the Auditor General of South Africa on 31 August 2019 in accordance with section 122 and 126 of the Municipal Finance Management Act (Act No. 56 of 2003).

The financial results for the current year depicts a significant improvements when compared to the previous year. However, there are still huge backlogs of debt and service delivery challenges that need to be addressed. Topping the list achievements is the fact that municipality has overturn a deficit of R40.3 million in the 2017/18 financial year to a surplus of R9.6m in the 2018/19 financial year. Coupled with this, the combined bank and investment balances have increased from R13.5m to R67.5m. Included in the cash R67.5m bank balance is the R47m of unspent conditional grants that could not completed by 30 June 2019 which the municipality has applied for roll over; as well as the R8.5m reserve for the June Eskom bulk electricity account that was paid on 1 July 2019. The remaining balance was ring-fenced for insurance funded projects and creditors that were paid in July 2019. The municipality’s Interest on Investments increased from R1m to R 6m.

The outstanding Creditors decreased from R192m in 2017/18 to R174m in 2018/19, which is a move in the right direction. The municipality has been paying the Eskom Account on time and in full since March 2019 and plans are being implemented to maintain this trend to provide stability in our local economy. Regular payments are made to other arrear creditors as well to gradually reduce the outstanding creditors.

Our biggest challenge as the municipality is its inability to collect all its revenue, a debt that is caused by non-payment by its clients that include Residents, Businesses, Schools and Government Departments. The current Debt Book as at 31 August 2019 reads as follows:
• Residents – R 457 342 972
• Business – R 47 541 543
• Government – R 42 059 991
• Total Debt – R 546 944 506

In an efforts to curb the escalating debt, the municipality has from May 2019 launched a programme of ensuring that all meters are read and verified to generate accurate monthly billing accounts; improving customer care and supervision to resolve account disputes; and intensifying credit control mechanisms by disconnecting electricity and issuing legal notices to recover debt from all arrear customers.

The municipality realises that not all customers can afford to pay for services and therefore it has an indigent assistance programme that I widely publicised in this publication and various other media platforms. All households with a combined income of less than R3,600 per month can apply for subsidised municipal services.

For those households earning above R3,600 per month and have arrear debt outstanding for more than 120 days as at 01 July 2019, they can apply to make an arrangement to pay 50% of their debt (over 120 days) off over a maximum of 48 months with the incentive of having the remaining 50% written off if they pay all the installments on time every month. This offer expires on 31 December 2019.

The Annual Financial Statements are now in the process of being audited by the Auditor General of South Africa which will culminate in an audit opinion being expressed thereon by 30 November 2019. The municipality has had qualified opinions for the past 3 years and action plans are being implemented to address past audit findings in order to improve to an unqualified audit opinion in the very near future. The benefit of an unqualified audit opinion would be that the residents would receive certification by a recognized, independent body that the municipality can account in all material aspects for expenditure incurred and accurate revenue collection.

In conclusion, Makana Municipality appeals to all residents to pay their municipal accounts on time each month and where there are disputes, residents are invited to visit the municipality and have their concerns addressed. Disputes that are not resolved may be escalated to the Chief Financial Officer, Mr Gerard Goliath, at the Finance Building or via email at GerardG@makana.gov.za We thank those loyal paying customers who under difficult circumstances still honour their obligations and seek to contribute to the sustainability of the municipality and encourage more residents to do the same. The municipality believes the successful turnaround of the municipality can only be done in partnership with stakeholders and communities.

Hon. Executive Mayor Cllr. Mzukisi Mpahlwa

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