Cango Caves is well managed and financially secured
Oudtshoorn, 08 July 2015 – Recent media reports that Oudtshoorn Municipality owes suppliers an outstanding amount of R3 Million for upgrading done at the Cango Caves are false.
The Cango Caves is not in a financial crisis; instead it enjoys financial security that is regulated by the Municipal Finance Management Act 56 of 2003 since it is managed by the Oudtshoorn Municipal Council. The budget of the Cango Caves falls under the responsibility of the Office of the Municipal Manager of the municipality.
It is the policy of the Council not to discuss contractual details of between the Municipality and service providers or suppliers in the media. However, for the benefit of the public interest emanating from media enquiries and reports regarding the Cango Caves matter we deemed it necessary to make the following corrections:
The Oudtshoorn Municipality contracted a company to upgrade and renew the Caves’ electrical infrastructure to the value of R 4 Million from the Municipal capital budget.
The contracted company has completed work of over R 3.5 Million of the total contract
An amount of up to R 3 Million has already been paid to the supplier for the completed work.
An amount of just over R 350 000 is still outstanding and is still in a process of being paid to the supplier.
The remainder of upgrading amounting to about R 500 000 will be done in the 2015/2016 financial year.
The municipality's policy on the payment of creditors is in line with section 65(2) (e) of the Municipal Finance Management Act No. 56 of 2003 and regulations. All moneys owing by the municipality are paid within 30 days of receiving the relevant invoice from the service provider. If a service provider has not been paid it is due to the fact that their account does not reflect as outstanding, there are various reasons for this, but in most cases the municipality is not presented with information timeously by suppliers.
The R 16 Million funds reallocated to Oudtshoorn was not done in error, it was due to the fact that a long outstanding loan payable to Oudtshoorn by the Cango Caves was written off in error during 2008, this was deemed to be an incorrect accounting entry and as such corrected in die Annual Financial Statements for the year ended 30 June 2014. The transfer of the funds as well as the accounting entries relating to this matter was scrutinised by Auditor General, and no finding were made in their report.
Despite this the Municipality appreciates and acknowledges the value of the Cango Caves for the people of Oudtshoorn and as such these funds were re-allocated to a capital project for the Cango Caves. The capital budget of Cango Caves also falls under the responsibility of the Office of the Municipal Manager and treated the same as the other user departments within the municipality that have capital projects. The specific capital project earmarked for the upgrading of buildings at the Cango Caves did not take place as a priority was placed on the operations of the municipality which includes the Cango Caves.
It is unfortunate that wrong information had been leaked out to the media pertaining to the balance of the upgrading of the lights infrastructure at the Cango Caves. The Municipal Manager is in a process to institute an internal disciplinary action in this regard. This also includes unofficial comment by Municipal officials with the media.
Statement issued by Ntobeko Mangqwengqwe, Oudtshoorn Municipality’s Communication & Media Services on Wednesday, July 8 2015
