Finance woes dog municipalities

January 15 2012 at 01:51pm
Source – Business News...www.iol.co.za

Poor financial management has reached epidemic proportions among municipalities, according to a Sunday
Times report.

Of the country's 278 municipalities, 66 are in financial distress, while another 37 municipalities are heading
in the same direction, the Sunday Times reported, according to figures released by the National Treasury.
Symptoms of poor financial management included cadre deployment, crucial posts being left vacant,
political interference and poor revenue collection.

Some municipalities struggled to pay employees and contractors, risking service delivery. This also created
an environment conducive to corruption.

A significant number of municipalities underspent on capital items and grants, and there was a trend to cut
infrastructure maintenance spending.

By the end of the financial year last June, 20 municipalities reported closing cash positions that exceeded
one month's operating expenditure requirements.

Fifty municipalities failed to report closing cash positions, the paper reported. - Sapa