The Makhado Municipality lashed out at the Democratic Alliance (DA) this week, following the DA´s accusation that the municipality´s finance department is "rotten from within" and that they should be placed under administration. The DA´s response was with regard to the recent discussion surrounding the municipality´s annual adjustment budget.

The municipality´s Director Community Services, Mr Elias Mugari, issued a statement the past week, stating that the DA´s statement in relation to the finance department of the municipality is "unfounded, misleading and cannot be scientifically proven". He says the municipality strongly believes that the media statement by the DA is irresponsible and misleading and that they regard it as political point scoring on the part of the DA.

"The municipality has been managing the finances very well for the past two financial years. We have seen a great improvement in terms of financial management, and management is continuously committed to improve ... the municipality has confidence in all its top management (municipal manager and directors), presently employed, and it is satisfied with their work progress and performance,” reads the statement.

This is in contrast with the latest report of the auditor general (AG), for the financial year ended June 30, 2009. The AG gave the municipality a disclaimer of opinion, based on the non-compliance of correction of the previous year’s financial problems. The previous report gave an adverse opinion.

Concerning the spending of the capital budget, which goes hand in hand with service delivery, Mr Mugari said that the municipality had plans in place to spend the capital budget for the 2010/11 financial year and that they had full confidence that it would be exhausted by the end of the financial year. The capital budget expenditure for the first six months of the present financial year was just under R50 900 000, which represents only 23% of the total capital expenditure budget of close to R225 770 000.

Great strides have been made to intensify the implementation of the debt collection policy, says the municipality.

“A service provider specializing in debt collection has already been engaged in January 2011, with the intention to improve the revenue collection in the municipality. The municipal finances are in good standing and the objective is to effectively implement our credit control policy to address challenges of service delivery,” states Mr Mugari.

The Budget Adjustment is dealt with in terms of Section 28 of the Municipal Finance Management Act (MFMA), Act 56 of 2003.

“After the assessment of the mid-year performance in terms of section 72 of the MFMA, Makhado Municipality, like other municipalities in the country, has adjusted the budget accordingly. The budget adjustment was also informed by the priorities of service delivery, such as the recent natural disasters that are adversely affecting our municipality,” reads the media statement.