Municipality that ploughed R77m into VBS can't pay staff March salaries

25 March 2019 - 13:16
By Nico Gous
The West Rand district municipality is one of 15 municipalities which made deposits with now-bankrupt VBS Bank despite an instruction from National Treasury forbidding them to do so.
Image: BusinessLIVE The West Rand district municipality is one of 15 municipalities which made deposits with now-bankrupt VBS Bank despite an instruction from National Treasury forbidding them to do so.

Municipal workers at the West Rand District municipality on the outskirts of Johannesburg were left in the lurch on Monday after not being paid their salaries.

The municipality told employees on Friday, in a letter seen by SowetanLIVE's sister publication TimesLIVE, that they would not receive their salaries.

"We had wished to pay salaries today [Friday], but are unable to do so," the municipality wrote.

"Whilst we have funds in our coffers, they are not sufficient to complete the full salary run. We are currently in a position of uncertainty as to when the transfer will be done."

The municipality said it was supposed to receive money from the co-operative governance and traditional affairs department (Cogta) but was informed about a "technical glitch which would be sorted out before end of business on the 20th (last Wednesday)".

On Friday the municipality received an e-mail from the National Treasury "indicating a change in dates for receipt of transfers, the cumulative effect being that municipalities will not receive their Equitable Allocations due to the cash flow situation of national treasury".

TimesLIVE has approached the municipality for comment and this story will be updated.

This is the same municipality where officials were held hostage at the end of October 2018 after salaries were not paid. The municipality has 458 employees.

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Times Select reported in October 2018 that the municipality had invested R77m in VBS Mutual Bank.

Municipal manager David Mokoena said at the time that the municipality had "experienced a shortfall of funds and could not run the complete salary bill".

In November, the municipality said it did not flout any regulations by investing millions in VBS.

According to the Treasury’s municipal data on 2016/17 government, for every rand the municipality received, 91c came from the government and the other 9c was generated locally. More than half (55%) of the budget was spent on salaries and wages.

The DA's Gauteng premier candidate, Solly Msimanga, on Sunday called the situation "unacceptable".

"The employees and their families depend on this salary," Msimanga said. "Considering the solemnity of this situation as it impacts on the lives of our people, both the national treasury and the department of co-operative governance and traditional affairs should have ensured that the equitable share was transferred to this municipality as a matter of urgency."

Msimanga called on Gauteng premier David Makhura to intervene.