Late payment due to cash flow problems

Strike action loomed this week at the offices of the Vhembe District Municipality (VDM) when the municipality failed to pay their workers their monthly salaries on time.

The Democratic Alliance (DA) was quick to respond to the impending crisis. “The DA will be writing a letter to the MEC for Cooperative Governance in Limpopo, Ms Makoma Makhurupetje, to establish investigations into the financial affairs of the Vhembe District Municipality,” said the DA’s provincial leader, Mr Jacques Smalle, in a press release. According to Smalle, the workers were supposed to be paid on 23 January, but only got paid on 27 January.

Smalle said that the situation was brought about by the VDM’s failure to manage their financial affairs. “The municipality spends an estimated R20 million on salaries every month. It is alleged that the municipality is bankrupt and has less than R7 million in their account, which is not enough for salaries,” Smalle said. He added that a financial audit of the VDM’s financial affairs was urgently needed to prevent such a situation from recurring.

In response to a media enquiry regarding the alleged late payment of workers, VDM’s municipal spokesperson, Mr Matodzi Ralushai, confirmed on Tuesday evening that workers had indeed received late payment of their salaries. “Vhembe workers were not paid on time due to cash-flow-management challenges,” Ralushai said.

According to Ralushai, salaries are usually paid on the 25th of each month, but because of their cash-flow problems, payment for the month of January was made from the 23rd to the 26th. He added that the VDM still had to finalise outstanding payments of medical schemes by the 27th.

Ralushai did not respond to any questions relating to the CDM’s current state of financial affairs and the DA’s claim that they are bankrupt. “The municipality is financially stable. It is only cash-flow-management problems, but as government sphere it will be resolved,” Ralushai said.

As to initial reports that VDM workers had embarked on strike action in protest against getting paid late, Ralushai confirmed that they were aggrieved. “They downed tools [on Tuesday], but are committed to their work as they turn up for work,” Ralushai said.

News - Date: 30 January 2015

Andries van Zyl

Andries joined the Zoutpansberger and Limpopo Mirror in April 1993 as a darkroom assistant. Within a couple of months he moved over to the production side of the newspaper and eventually doubled as a reporter. In 1995 he left the newspaper group and travelled overseas for a couple of months. In 1996, Andries rejoined the Zoutpansberger as a reporter. In August 2002, he was appointed as News Editor of the Zoutpansberger, a position he holds until today.

Email: [email protected]