Enoch Mgijima Local Municipality Faces Continued Financial Challenges Despite Intervention

Despite interventions from both the Eastern Cape provincial government and the national government, Enoch Mgijima Local Municipality continues to grapple with persistent financial challenges. The matter was brought before the Portfolio Committee on Cooperative Governance and Traditional Affairs (COGTA), where various stakeholders presented reports outlining the ongoing issues.

The Auditor-General highlighted serious problems within the municipality, including a lack of compliance with financial regulations, unreliable performance information, and a pattern of qualified audit opinions over the past three years. The municipality heavily relies on consultants for its financial statements, demonstrating poor internal capacity.

Weaknesses in record-keeping and indigent identification systems were also identified, raising concerns about potential erroneous beneficiaries. Additionally, a lack of consequence management further exacerbates the situation, with little accountability for staff flouting rules.

Irregular expenditure was a key focus of the AG’s report, citing instances where procurement procedures were not followed, and bids were awarded improperly. The municipality’s financial woes are further compounded by a substantial Eskom debt, unfunded budgets, and high irregular expenditure.

National Treasury echoed these concerns, pointing out that the Financial Recovery Plan (FRP) implementation has shown minimal progress in addressing root causes. The municipality’s financial crisis is exacerbated by job grading issues post-amalgamation and dependency on grant funding.

While some improvements in service delivery have been noted, such as better road maintenance, challenges persist, particularly with household meter auditing. SALGA expressed confidence in the municipality’s recovery trajectory and called for continued support for the current management team.

In response, the Enoch Mgijima mayor, Councillor Madoda Papiyana, defended the municipality’s current state, attributing improvements to a new administration. However, the committee chair, Fikile Xasa, emphasized the importance of addressing the AG’s findings seriously and not undermining the official report.

The committee’s deliberations shed light on the ongoing struggles of Enoch Mgijima Local Municipality, showcasing the complexities of financial recovery amidst governance challenges and external debt burdens.