The Witness

The Witness: "City’s cash flow crisis
31 Aug 2009"
THE Msunduzi Municipality is on the verge of a financial crisis.

This is evident in a report written by acting municipal manager Phil Mashoko, which was tabled at last Wednesday’s full council meeting and then suddenly withdrawn at the insistence of council speaker Alpha Shelembe.

Well-placed sources told The Witness that the reason for the sudden withdrawal of the report is that it contains a confidential item about the municipality’s cash flow crisis that was not to be discussed in the presence of the media.

When Mashoko attempted to present the report, Shelembe cut him off and said discussion of the report would be delayed. When DA councillor Bill Lambert asked why “such a good report” is being delayed, Shelembe said there are certain aspects that need to be discussed by the executive commitee (Exco) first.

According to the report, which The Witness now has in its possession, the municipality’s cash flow position is a cause for serious concern.

“… the cash flow position of this municipality is not as healthy as it should be. As at 30 June 2009, the cash position decreased from R256 million to R125 million. As at 25 August 2009, the cash balance position stood at R100 million.”

The report goes on to say that although the municipality’s monthly collection rate is at 75%, it still needs to improve its cash position.

The cash reserves were replenished on August 20 by the municipality’s chief financial officer, Roy Bridgmohan, by “drawing down the long-term loans granted in the 2008/09 financial year”.



Local financial fundis are baffled at how the city’s cashflow could drop by R150 million in just two months, from the beginning of July 2009 to the end of August. They say that councillors have every right to expect a full and detailed explanation on how this has happened and as financial experts, they too are curious. This is more so as the report states that the average collection rate for money owing to the municipality stands at 75% over a 30 day period, which is not a critical scenario. These experts believe that the municipality has to become a lot more imaginative in how it draws up the budget and believes more needs to be done to grow the city’s rates base to enhance the city’s coffers..

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Posted by anon on 31 Aug 2009
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GIVE THE COUNTRY BACK TO THE NATS.EVEN THE BLACKS WOULD BENEFIT

Posted by ANONYMOUS on 31 Aug 2009
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WE ALL KNOW WHERE THE MONEY IS PILLING UP!

ON A OTHER NOTE IN THE NORTHDALE AREA THERE WAS NO ELECTRICITY FROM THURSDAY NITE AND ONLY RETURNED ON SATURDAY @ 3:PM I CANT BELIVE THAT THERE WAS NOTHING SAID ABOUT THIS AND THE MUNICIPALITY WANTS US TO PAY OUR LIGHTS & RATES ON THE DUE DATE.LET ME NOT SAY HOW MUCH THAT CAME TO THIS MONTH.I THINK WE SHOULD GIVE BACK THE WHITES TO RUN THE COUNTRY WE WOULD BE MUCH SAFER

Posted by Anonymous on 31 Aug 2009
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This municipality has probably the largest inflow of cash that it has ever had, yes mismanagement appears to be high on the agenda. WHERE HAS ALL THE MONEY GONE??