According to the Financial Sector Conduct Authority, the municipality had not made contributions to the MWRF for 76 months as at April 30.
It was also found to not have made contributions to the Municipal Councillors Pension Fund (MCPF) for 46 months as at April 30.
Administrator and acting municipal manager, Tshepang Lepheana, on Monday told Sowetan that he did not have details around councillors who are not paying for services, saying he would need to get the information from the CFO.
By 6pm on Tuesday, he had not responded to questions about whether any money had been recouped.
“If we [administrators] find that any councillors are owing, we will use all legal ways to recoup the money. [We will also put] credit control measures [in place],” said Lepheana.
On revenue collection, he said: “The finance system of the municipality is outdated and the municipality is currently in a process of procuring a new solar system for finance.
He said the municipality currently owes millions to different pension funds – R119.4m to the South African Local Authorities Pension Fund (SALA); R96.3m to MWRF; R1.6m to MCPF and R491,037 to the Free State Pension Fund.
Mafube’s financial woes became evident in 2015 when the municipality struggled with providing services to residents and settling its debts.
The provision of services slowly declined since then and as of last year issues with salary payment arose with workers not being paid in July.
Mafube’s issue of non-payment of MWRF dates back 2011 when the fund first launched an application against council to compel it to pay. Judgment was granted in 2015.
However, in 2021, the fund brought another application over unpaid contributions for the period between July 2015 and April 2021 which amounted to R37.7m.
The court ordered the municipality to pay the contributions and made scathing remarks that the council was prejudice towards its workers.
“The prejudice to the employees, the former employees and their families is too ghastly to contemplate. No explanation is forthcoming as to why this is so. ...History has taught that the municipality tramples on the rights of contributories to the fund and who will rely on their pension’s growth when they retire or may have to rely on earlier...
Mafube councillors owe municipalities R500K for services
Cash-strapped council unable to pay salaries for 3 months
Image: Supplied
Mafube local municipality, which this week said it might not be able to pay salaries for three months, is in so much disarray that councillors owe hundreds of thousands in services.
The municipality’s financial statements as at June 2022, and was released in October that year, reveal its revenue collection problem with councillors owing R511,518 on their accounts for over 90 days.
This was an increase from R297,511 in June 2021.
Chief whip, Jonase Kotsi, is among officials owing thousands to the municipality. Kotsi owed R47,265 on his account overdue by 270 days (nine months) as at June 2022.
Kotsi did not respond to requests for comment on Tuesday.
The municipality, which was placed under administration in November, this week issued a notice to employees, saying it might not be able to pay salaries for December, January and February because the Municipal Workers Retirement Fund (MWRF) attached its bank account due to non-payment of contributions.
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According to the Financial Sector Conduct Authority, the municipality had not made contributions to the MWRF for 76 months as at April 30.
It was also found to not have made contributions to the Municipal Councillors Pension Fund (MCPF) for 46 months as at April 30.
Administrator and acting municipal manager, Tshepang Lepheana, on Monday told Sowetan that he did not have details around councillors who are not paying for services, saying he would need to get the information from the CFO.
By 6pm on Tuesday, he had not responded to questions about whether any money had been recouped.
“If we [administrators] find that any councillors are owing, we will use all legal ways to recoup the money. [We will also put] credit control measures [in place],” said Lepheana.
On revenue collection, he said: “The finance system of the municipality is outdated and the municipality is currently in a process of procuring a new solar system for finance.
He said the municipality currently owes millions to different pension funds – R119.4m to the South African Local Authorities Pension Fund (SALA); R96.3m to MWRF; R1.6m to MCPF and R491,037 to the Free State Pension Fund.
Mafube’s financial woes became evident in 2015 when the municipality struggled with providing services to residents and settling its debts.
The provision of services slowly declined since then and as of last year issues with salary payment arose with workers not being paid in July.
Mafube’s issue of non-payment of MWRF dates back 2011 when the fund first launched an application against council to compel it to pay. Judgment was granted in 2015.
However, in 2021, the fund brought another application over unpaid contributions for the period between July 2015 and April 2021 which amounted to R37.7m.
The court ordered the municipality to pay the contributions and made scathing remarks that the council was prejudice towards its workers.
“The prejudice to the employees, the former employees and their families is too ghastly to contemplate. No explanation is forthcoming as to why this is so. ...History has taught that the municipality tramples on the rights of contributories to the fund and who will rely on their pension’s growth when they retire or may have to rely on earlier...
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"The registrar is directed to bring this judgment to the attention of the National Director of Public Prosecutions for consideration of instituting criminal proceedings against the municipality for breach of the Pension Funds Act."
Lepheana said the team of administrators has flagged a 2012 contract that was erroneously signed which has led to the municipality losing millions.
“The 25-year long contract was signed without requirements being met. No feasibility study was conducted, Nersa and the department of energy had to approve the contract after overseeing all requirements, but this was not done.”
Lepheana said part of the rescue plan was to end the contract and have money flowing into the coffers of the municipality but the contractor has challenged this decision in court and the matter is still pending.
sibiyan@sowetan.co.za
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