A decision to write off the amount of R288 031 664 had been approved on a Special Council Meeting of the Kouga Municipality held on 29th June 2017. This amount will be reflected in the 2016/17 Annual Financial Statements, being for the financial period 1 July 2016 – 30 June 2017.
According to Municipal Manager, Charl du Plessis, it will have no effect on service delivery in general. According to him the unauthorised expenditure been written off can be attributed to poor budgeting at the time and that the expenditure items in question were not adequately budgeted for. This utterly high amount covers four financial years and mainly relates to non-cash items, such as depreciation, provision for bad debts, provision for leave as well as provision for post-retirement benefits.
A decision was taken by the Municipality to write off the amount because the matter should have been dealt with by the former Municipal Council according with the Municipal Management Act (MFMA). The current Municipal Council therefore decided to deal with the matter in compliance with the MFMA.
On a question if this amount was physically lost, Du Plessis again stated that the amount relates to non-cash items (that no funds were transferred out of the Municipality’s Bank Account) to pay any service providers. Accordingly no money was physically lost. 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. It is in effect an exercise to clean and tidy up the Municipality’s books, in compliance with the MFMA.
Mariza Roux Hofmeyr