AG says Treasury's Eskom Municipal Debt Relief Support Programme has been a failure

CAPE TOWN - The Auditor General (AG) says Treasury’s Eskom Municipal Debt Relief Support Programme has been a failure. 

Delivering the 2023-24 local government audit outcomes to Parliament on Wednesday, Tsakani Maluleke listed unfunded budgets, mismanaged indigent programmes and failed infrastructure projects as among the many problems plaguing municipalities. 

But overall, Maluleke said a lack of accountability, especially politically, means the problems are likely to persist.  

Maluleke said 113 municipalities are currently operating on unfunded budgets.

At least 80% of this number are doing it for the third consecutive year. 

"So, what happens, you end up with a deficit, and an overdraft situation, you don’t pay your creditors, and you keep try covering this hole every single year."

The situation is worsened by unauthorised expenditure from money the municipality doesn’t have or has borrowed. 

On average, creditors are waiting 286 days to be paid for services rendered to municipalities.

Maluleke said a lack of discipline means settlement arrangements between municipalities and Eskom are also not being honoured. 

"It’s not working. 84% of the municipalities that participate in that programme are not complying with the conditions they subscribed to."

She added that municipalities are providing indigent relief to their own staff, suppliers to the municipality, and even the deceased, while those in need are missing out. 

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