Amahlathi municipality too broke to pay December salaries

Almost 300 municipal employees, councillors and traditional leaders at Amahlathi municipality have not been paid their December salaries.

The beleaguered municipality is so broke that it cannot pay its 253 workers, 30 councillors and six traditional leaders. Their salaries were supposed to have been paid  11 days ago, on December 9.

The same situation occurred in May and June, with authorities  saying at the time a large chunk of the municipality's annual budget had to be channelled towards a high wage bill.

The departure of Cogta administrator Sindisile Maclean on December 4 and empty municipal coffers have been cited for failure to pay salaries this time around.

Maclean was seconded to the municipality when Amahlathi was placed under administration by former Cogta MEC Fikile Xasa amid administrative and political instability. His term came to an end this month.

This week the Dispatch was leaked a copy of a confidential council report authored by mayor Agnes Hobo in which she raised concerns about  lack of funds and non-payment of salaries.

The report, dated December 17 and tabled in a council meeting on Wednesday, says: “Currently there is no funding for salaries of December 2019. The municipality had requested an overdraft of R10m and utilised money from the insurance payout to pay salaries for the previous months. The equitable share tranche has been used to pay the overdraft and the insurance payout. The cash at the bank currently is not enough to pay salaries.”

She then references the departure of Maclean.

“Ever since the municipality was put under administration, the financial management and corporate services functions were delegated fully to the administrator. The administrator was appointed by Cogta for the period of six months which was extended by three months. On December 4, the nine months period for the administrator lapsed.

“Now there are two important problems that makes a dead stop on the payment of salaries, approvals and funding model, as all financial delegations are approved by the administrator in line with his terms of reference. Certain allowances including those of traditional leaders and ward committees cannot be processed without approval.”

Neither Hobo nor municipal manager Ivy Sikhulu-Nqwena could be reached on Thursday as their cellphones went unanswered.

Makhaya Komisa, the spokesperson for Cogta MEC Xolile Nqatha, said they were unaware of the salary challenge.

“This is news to us. No-one has written to us and told us about such challenge. As far as we know, our intervention there was working perfectly and there was financial stability the last time we checked,” Komisa said.

When salaries were not paid out in May, Maclean told workers the municipal coffers had dried up because 55% — R125.1m — of its R227.5m annual budget had gone towards paying salaries.

A council decision to standardise salaries caused staff costs to rise by 49% during 2016-2017.

At the time Maclean said the future of the municipality depended on whether the salary bill could be amicably brought down.

The almost five-month total shutdown of the municipality in 2018, which turned violent with municipal properties torched and vandalised by residents, also contributed to revenue collection taking a nosedive.