Pretoria: Improved co-operation between Gauteng provincial government departments and municipalities has helped to speed up payments of the departments’ obligations to municipalities.
“Gauteng provincial departments owed local authorities R476m at the end of June 2012, a fact that we are not quite content about,” Matlakala Motloung, the Head of Communications in the province said in a statement on Wednesday.
However, added Motloung, this was a reduction from the R619m owed by departments at the end of March 2012.
“Because we are cognisant of the importance of cash-flow to municipalities; we have been working hand-in-glove with local authorities to ensure that we meet our obligations faster.
“We have a Debt Management Strategy in place and a Debt Management Committee sits every quarter to attend to issues of debt to municipalities. We are also working closely with municipalities to ensure that they have adequate personnel to help them deal with this challenge,” Motloung said.
“We are aware that as a province, we must take a lead in these matters so that the rest of the citizens can take a leaf out of our book.”
Government debt to municipalities often relates to assessment rates and or services that have in certain instances accumulated over an extended period of time.
“We realised a while back that there were challenges that faced both our departments and municipalities that needed to be resolved so that our accounts with municipalities are up-to-date.
“On the one hand municipalities had to correct service billings and property addresses while on the other departments had to fix their administrative procedures to ensure faster payment of account.
“The challenge was that if these two entities did not speak to each other; payments stalled and municipalities suffered,” Motloung said.
The introduction of the Debt Management Committee specifically its Government Debtors Project, which focuses mainly on data cleaning and the collection of government debtors and is managed by the Department of Local Government and Housing while the Gauteng Treasury, has helped improve the situation.
“Of the R476m owed to municipalities at the end of June, the Department of Infrastructure Development (DID) owe more than R182m.
“One of the major contributors to the DID’s high debt was because some municipalities still bill the DID at the beginning of the financial year for the whole year; yet the department receives its devolution grant in quarterly tranches.
“This, then, gives a view that the department is overly outstanding,” said Motloung.
The other two departments which owe municipalities substantial amounts of money are Education (R107m) and Health (R100m).
The Department of Education allocates funds to the schools in a form of a subsidy for the year – including municipal services funds for schools to pay for municipal accounts.
Some of the schools are not paying the municipalities as required and this affects the payment record of the department.
According to Motloung, the Education Department has also raised concerns about the lack of financial management within School Governing Bodies as they have a role to play in ensuring that funds are used for the purpose they were disbursed for and no other activities.
The provincial government has also identified that most schools with exorbitant outstanding amounts were due to poorly-maintained, aged or vandalised water infrastructure that resulted in water leakages.
However, other schools are not properly secured and some communities abuse the water and electricity infrastructure.