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Last modified: 06 Jul 2017
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Kouga clears its books of old unauthorised expenditure

30 June 2017

Kouga Municipality is cleaning up its books by writing off unauthorised expenditure spanning five financial years.

The resolution, to write off R288 million of unauthorised expenditure, was taken in a Council meeting held last week.

Executive Mayor Elza van Lingen said the resolution was in line with the prescripts of the Municipal Finance Management Act (MFMA).

“The matter should have been dealt with by the previous Council, but we have decided that it can no longer be postponed and we must comply with the law,” she said.

The period in question runs from the 2009/2010 to the end of the 2013/2014 financial years.

Van Lingen said the unauthorised expenditure could be attributed, mainly to poor budgeting  as issues such as depreciation, provision for bad debts, provision for leave and provision for post-retirement benefits were not adequately budgeted for.

“It is important to note that these are non-cash items and therefore the write-off does not mean that money was misappropriated or stolen, as no physical funds were transferred out of the Municipality’s Bank Account,” she said.

The other negative impact, where money was lost, came from increased bulk electricity and water purchases which were covered by an equivalent increase in electricity and water sales.

The Mayor said the write-off will not affect service delivery as this was only a book-cleaning exercise and the matter of compliance.

The current Council remained committed to delivering the best service possible to its residents, she said.