KDM underspend on key projects

KwaDukuza municipality has been holding back the cash for infrastructure related projects earmarked for the 2016/2017 financial year.

This is according to the KDM annual report that highlighted serious concerns in the municipality’s financial management.

While complaints and service delivery protests in the district continue to flare up, the review showed that grants allocated to KDM from the provincial treasury for projects like building roads, housing and fixing beach infrastructure were hardly touched.

Only R61 million of the allocated R230 million has been spent.

It is considered unlikely that KDM will meet its target spend before the end of June.

Also read: Ilembe’s downward spiral

Unspent funds are likely to be taken back and grant allocations in the new financial year could decrease, as it is implied that the municipality does not need the money or does not have enough projects.

DA caucus leader Madhun Sing said underspending was directly linked to service delivery.

He said the municipality was not allocating funds or following through with key projects.

“We have already seen protest marches. Realistic allocation towards capital projects given, and finalising procurement of goods and services timeously must be addressed urgently.”

In 2016/2017 KDM scored 34 percent for performance based on service delivery.

“By any measure or standard, this is unacceptable. We must at all times strive for 70-80 percent targets, anything below it is under-performance.”

It is believed that KDM uses their own internal money to fund projects in the municipality.

In this way, they internally monitor the progress of the projects without having to adhere to strict deadlines from provincial treasury who would normally oversee how the grants are being used.

Causing further concern, the municipal finance department announced at the council that the midterm reserves stood at only five weeks.

Reserves are based on the operating expenditure the municipality would need in an event of an emergency or closure.

It should stand between three and four months.

Over time, high employee costs and a loss from illegal connections are seen to be the main causes of the municipality’s financial dilemma.

KDM has not responded to questions on the progress of projects in the district or their financial state.

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  AUTHOR
Erica Abrahams
Journalist

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