Key Takeaways
- The Waterberg District Municipality in Limpopo has been placed under intervention by the Department of Cooperative Governance, Human Settlements and Traditional Affairs due to serious financial woes.
- The intervention aims to prevent the municipality from being placed under administration and will involve the implementation of a recovery plan.
- The department has spent R25 million to support the district so far, and will monitor the municipality’s progress without a set timeline for delivering results.
- Placing municipalities under administration has previously helped struggling councils in Limpopo, but there is a risk that challenges may reoccur.
- The auditor-general found that most municipalities in Limpopo had inadequate oversight and slow implementation of corrective action, leading to poor audit outcomes.
Introduction to the Waterberg District Municipality Intervention
The Waterberg District Municipality in Limpopo has been placed under intervention by the Department of Cooperative Governance, Human Settlements and Traditional Affairs. This decision was made due to the municipality’s serious financial woes, which have resulted in the institution failing to collect enough revenue in the 2024-25 financial year. The department’s spokesperson, Tsakani Baloyi, explained that the intervention is intended to prevent the municipality from being placed under administration, which would involve the dissolution of the municipal council and the appointment of an administrator.
The Intervention Process
The intervention at Waterberg District Municipality will not result in the council being dissolved. Instead, the provincial executive will impose a recovery plan in an endeavour to make sure the municipality is up and running. The department will monitor the municipality, but there is no timeline yet for it to start delivering results. So far, R25 million has been spent to support the district. The department’s approach is focused on providing support and guidance to the municipality, rather than taking control away from the council. This approach is aimed at addressing the underlying issues that have led to the municipality’s financial woes, and ensuring that the council is able to manage its finances effectively.
Previous Interventions in Limpopo
Placing municipalities under administration has previously helped struggling councils in Limpopo. According to Baloyi, in all municipalities that were placed under administration, there has been improvement as matters that led to intervention were addressed or resolved. However, she noted that this does not mean that such challenges may not reoccur. The department’s experience in intervening in struggling municipalities has shown that with the right support and guidance, councils can be turned around and become financially stable. However, the department is also aware that there is a risk that challenges may reoccur, and therefore, ongoing monitoring and support are necessary.
Audit Outcomes in Limpopo
The auditor-general’s report for the 2022-23 financial year found that inadequate oversight and slow implementation of corrective action continued to overshadow the audit outcomes of most municipalities in Limpopo. Not one municipality received a clean audit, while 18 municipalities received a qualified audit with findings, eight municipalities received qualified audits, and Modimolle-Mookgophong received an adverse audit opinion. The report also found that 19% of municipalities in the province could not meet their obligations, while nine municipalities approved unfunded budgets, which contributed to the total of R2.77 billion in unauthorised expenditure. Furthermore, fruitless and wasteful expenditure totalling R230.58 million placed additional pressure on the financial health of the municipalities, while amounts owed to Eskom and the water boards totalled R2.73 billion.
Financial Challenges in Limpopo
The financial challenges facing the municipalities in Limpopo are significant. The auditor-general’s report highlighted the need for improved oversight and implementation of corrective action to address the financial woes of the municipalities. The department’s intervention in the Waterberg District Municipality is aimed at addressing these challenges and ensuring that the council is able to manage its finances effectively. The department’s support and guidance will be crucial in helping the municipality to overcome its financial challenges and become financially stable. The success of the intervention will depend on the municipality’s ability to implement the recovery plan and address the underlying issues that have led to its financial woes.
Conclusion
The intervention in the Waterberg District Municipality is a critical step in addressing the financial woes of the municipality. The department’s approach is focused on providing support and guidance to the municipality, rather than taking control away from the council. The success of the intervention will depend on the municipality’s ability to implement the recovery plan and address the underlying issues that have led to its financial woes. The department’s experience in intervening in struggling municipalities has shown that with the right support and guidance, councils can be turned around and become financially stable. However, the department is also aware that there is a risk that challenges may reoccur, and therefore, ongoing monitoring and support are necessary.