While Makana Municipality struggles to recoup large amounts of money owed to it, close to R8 million has been found sitting idle in municipal accounts. No one knows where it comes from - and the municipality can't use it until the sources are traced.
At a finance committee last week, it was announced that the bank reconciliation statements at the end of June had balanced for the first time. While congratulations were made to acting chief financial officer, Namhla Dlulane, and the finance department, it was revealed that during the process of finalising the reconciliation statement, revenue of R7.6m and R1 000 905.61 was discovered found sitting in municipal accounts as unidentified deposits.
“Technically, these form part of the suspense account for revenue, but were never receipted and allocated to any account,” stated a report tabled to the committee. The amount reflected payments made between 2 April 2009 and June this year.
It was also reported that the municipality had a serious problem with arrear debt management and collection. A contributing factor was the inability to allocate payments to relevant accounts, due to unclear or incorrect referencing used by debtors.
Municipal Manager, Ntombi Baart said she had tasked Dlulane, deployed by the department of local government as part of its operation clean audit, to contact the banks in order to trace the payments.
The report stated that the municipality’s suspense account had not been cleared for a number of years and another amount, R3.7m, had been in the account since 2004. Dlulane said money could be allocated from the suspense account only after it had been receipted.
“The MFMA [Municipal Finance Management Act] says that the suspense account must be cleared in 30 days,” she said.