Gauteng Human Settlements unable to pay debt

30 November 2016

The Gauteng Department of Human Settlements (GDHS) is in major financial distress.

The startling admission by the Head of the GDHS, Daniel Molokomme, that the department is unable to pay a debt of R220 million to the Red Ants is alarming.

According to the GDHS Head, assistance is required from National Treasury, which raises the concern that the department is unable to perform its financial duties.

In the past 2015/16 financial year, the Auditor General attached a damning report to the department’s financial statements in the annual report.

The AG noted:

- The stopping of the conditional grant allocation for the Human Settlements Development Grant by the National Department of Human Settlements, which was adjusted down by R908.3 million in terms of section 19 of the Division of Revenue Act (DORA);
- That effective steps were not taken to prevent irregular expenditure amounting to R438.5 million;
- Controls over daily and monthly processing and reconciling of transactions to support financial reporting commitments and irregular expenditure were insufficiently implemented by senior management;
- That the departments service delivery operating model was inadequate and senior management was not coordinated to achieve valid and accurate financial and performance reporting; and
- That compliance with DORA was not reviewed and monitored on a continuous basis by senior management.

If the department is unable to manage its funds, this may have an adverse effect on all municipalities in the province, especially with conditional grant funding.

Gauteng Human Settlements MEC Paul Mashatile, must publicly state the current financial status of this department, as thousands of resident’s lives may be affected.

It would be disastrous to halt service delivery due to the department’s senior management’s ineptitude.

Before MEC Mashatile makes utterances about placing DA Municipalities under administration, because the ANC has not yet accepted the outcome of the Local Government Elections, he should rather spend his time ensuring that his department can fulfil its Constitutional mandate of service delivery.

Issued by Mervyn Cirota, DA Gauteng Spokesperson, 30 November 2016