Latest news with #R1.7-billion
Daily Maverick
7 days ago
- Business
- Daily Maverick
Emfuleni crisis highlights local government debt as Treasury cracks the whip
The closure of the Emfuleni Local Municipality offices due to unpaid rent highlights the local government debt crisis, something Treasury hopes to fix by withholding grants from defaulting municipalities. Residents of Emfuleni were unable to make payments or lodge enquiries at the municipality's Vanderbijlpark offices this week after they were locked due to the failure to pay the monthly R6.4-million rent. According to the DA's Emfuleni caucus leader, Duncan Mthembu, this is a 'powerful symbol' of a nationwide crisis of municipal dysfunction and ballooning debt. Freedom Front Plus Councillor Hein van der Lith said the property owner had closed the building, which has more than 100 offices, twice previously this year and three times in 2024. He said the closure follows a recent recommendation from the Gauteng Legislature's Committee on Cooperative Governance and Traditional Affairs (Cogta) to place the troubled municipality under administration. Emfuleni was recently identified by Finance Minister Enoch Godongwana as one of 39 municipalities that have persistently failed to pay water boards and other parties such as pension funds, medical aids, SARS, the Auditor-General, and continues to adopt unfunded budgets. The minister said he would suspend all grants to the 39 municipalities for the rest of the financial year due to their ongoing failures. The DA's Mthembu said the closure of the Emfuleni offices meant 'residents have been left confused and stuck on how to proceed in getting assistance with payments and enquiries'. Emfuleni is located in Gauteng and comprises areas such as Vanderbijlpark. Mthembu said this was 'nothing more but an abject failure in governance, and something as simple as communication. The municipality could not even inform residents of their offices' closure.' Account attached Emfuleni's problems have been compounded by Rand Water's decision to attach the municipality's bank account due to its R1.7-billion unpaid debt. Emfuleni Municipality spokesperson Makhosonke Sangweni denied that the municipality had failed to honour its payment agreement with Rand Water, describing it as 'arbitrary'. Emfuleni Finance MMC Hassan Mako said, 'The municipality is unable to access its bank account because Rand Water has attached the account, and this situation has persisted for two months.' He said the municipality had considered taking the matter to court, but the mayor refused. Mako said the municipality had formed a special purpose vehicle (SPV) with Rand Water that would manage the water and sanitation services. 'However, Rand Water seems to be more focused on delaying the launch process by continuously attaching the municipality's accounts,' said Mako. 'The SPV project requires R1.3-billion, while Rand Water is owed R1.7-billion. Nevertheless, the municipality has committed to servicing the debt in tranches so that other service providers can be paid,' said Mako. Describing the impact of having its bank account attached, Mako said, 'There is no diesel to pick up refuse. Contractors that were assisting us with cleaning illegal dumps are not paid and have left the sites. When offices are closed, it means workers are paid salaries for doing nothing, and municipal infrastructure projects are suffering.' Emfuleni also owes Eskom R8.5-billion as at the end of June 2025. 'We believe the municipality is being held ransom by Rand Water, which negatively impacts service delivery. As a collective, we urge the mayor to lead by allowing this matter to be resolved in court in the best interest of service delivery,' Mako added. Emfuleni's municipal debt came under the spotlight in a letter from Godongwana to Cogta Minister Velenkosini Hlabisa on the ongoing crisis in municipalities. Gondongwana cracks whip on debt-ridden municipalities At the end of June, Godongwana informed Hlabisa that he would invoke Section 216(2) of the Constitution against the 39 most dysfunctional municipalities for 'persistent non-compliance'. This section allows the National Treasury to stop the transfer of funds to an organ of state if it commits a 'serious or persistent material breach' of measures designed to ensure transparency and expenditure control. According to Godongwana, Treasury has outlined a strict mechanism to force compliance: if any of the 18 defaulting municipalities fail to provide proof of full payment to their respective water boards within seven days of the 30 June letter, their Local Government Equitable Share (LGES) will be stopped. This withheld equitable share will only be released in portions, with stringent conditions. The first portion must be strictly used to pay current water board accounts, with proof of payment required, before a second amount is released for arrears owed under a valid repayment arrangement. According to the letter from Godongwana, if these conditions were not met, or if evidence of payments to institutions such as SARS, pension funds and other statutory third parties is not submitted, Treasury would approach Parliament to endorse the stopping of all LGES transfers for the rest of the 2025/26 municipal financial year. Municipal financial years run from 1 July to 30 June. Treasury also plans to withhold conditional infrastructure transfers. 'It is advisable that, parallel to the LGES withholding process, Rand Water, Vaal Central, Lepelle Northern, and Magalies Water enforce their credit control policies to also attach the bank accounts of the defaulting municipalities to enforce a change in behaviour of these municipalities. The same applies to all the water boards, in order to avoid a similar situation and prevent escalating debt across water boards,' said Godongwana. Earlier this year, Hlabisa told Daily Maverick the national government was sending a message to municipalities that 'it is time to pay'. During his 2025 departmental budget vote debate speech, the Cogta minister said: 'We have concurred with Treasury to compel the payments for water boards and Eskom, and pay pension and medical aid contributions to third parties. Notably, the same principle will have to apply to all government departments who owe municipalities, they must be compelled to pay what is due to municipalities.' Municipalities across the country owe Eskom almost R110-billion. Writing in Business Live, Municipal IQ managing director Kevin Allan said the local government debt crisis was caused by poor governance, a lack of oversight, and weak administrative capacity. 'The suspension of grants, therefore, represents the Treasury's move from carrot to stick. But this approach is not without risk. Service interruptions, project delays and cash flow constraints may follow in affected municipalities. Residents could bear the brunt of deteriorating services, and protest action may escalate,' said Allan. He described Treasury's decision as 'both bold and necessary'. 'The stakes are enormous. Without intervention, the escalating debt spiral could not only collapse local government, but destabilise national service delivery and weaken the country's fiscal standing,' Allan continued. 'Above all, municipalities must get back to basics. They must adopt funded budgets, bill accurately, collect revenue diligently and prioritise creditor payments. Professionalising financial management, insulating administration from politics and enforcing accountability are not optional – they are essential. DM
The Citizen
30-05-2025
- Business
- The Citizen
Urgent appeal to prevent financial collapse of Moot children's homes
Urgent appeal to prevent financial collapse of Moot children's homes The Jakaranda and Louis Botha Children's Homes in the Moot are facing an unprecedented financial crisis, operating without state funding for more than 60 days. CEO Charlene Grobler described the situation as the most stressful in her nearly 20-year tenure, highlighting the severe impact on both staff and children. During a recent fundraiser at the Atterbury Theatre, Grobler posed a poignant question to the audience: 'How long does it take to bleed out?' This metaphor underscored the urgency of the homes' financial distress. Despite fulfilling all compliance requirements and undergoing successful audits by the Auditor-General and the Gauteng Department of Social Development (DSD), the management of the homes has not received any feedback or funding, leaving it unable to meet basic operational costs. The institution cares for nearly 300 children aged 3 to 18 and employs 122 staff members. Daily operations, including transporting children to 28 schools and maintaining 30 houses, two clinics, and two administrative buildings, require immediate financial support. With the second school quarter concluding and examinations approaching, Grobler emphasised the critical need for electricity and resources to ensure the children's well-being and academic success. Grobler made a direct appeal to the community, urging them to put pressure on the DSD to honour its commitments to the children who are all placed under the care of the homes by court order. 'Help is needed now to care for these children to prevent a total breakdown,' she stated. The situation reflects broader systemic issues within the Gauteng department. In 2023, the department rejected funding for 171 non-profit organisations (NPOs) due to non-compliance, citing reasons such as lack of occupational certificates and building plans. The DA's Refiloe Nt'sekhe MPL and DA Gauteng Shadow MEC for Social Development, said investigations revealed that many state-run facilities continued to receive funding despite similar non-compliance, raising concerns about double standards in the department's funding practices. Furthermore, the department has been criticised by the DA for its handling of funds. In the 2024/25 financial year, it was reported that R1.7-billion allocated for social development purposes remained unspent, while R102-million was returned to the Treasury due to NPOs' non-compliance. Nt'sekhe argues that instead of penalising NPOs, the department should assist them in meeting compliance standards to continue providing essential services. AfriForum's Private Prosecution Unit is also taking up the cudgels for the NPOs. Despite repeated requests for clarification and action, Premier Panayaza Lesufi has yet to respond to concerns raised by the civil organisation about the provincial DSD. Lesufi is now also facing serious allegations of orchestrating a cover-up involving widespread corruption, money laundering, and fraud within the department. The AfriForum unit has now approached the Gauteng Legislature with a letter, urging the Speaker to fulfil the constitutional duty to exercise oversight of the provincial executive authority, which includes the premier. The legislature's Speaker and the Deputy Speaker have confirmed receipt of the letter. The accusations, which have been ongoing for several months, claim that Lesufi failed to act on forensic reports detailing misconduct by senior officials. The unit asserts that the implicated officials were suspended between September 2023 and January 2024 but have since been reinstated. Advocate Gerrie Nel, head of the unit, criticised Lesufi's response to the allegations, stating that the premier's actions appear to be an effort to conceal the alleged crimes and protect the implicated officials. Questions were forwarded to the premier's office, but no answers have been received by publication date. ALSO READ: What's happening in Pretoria this weekend? Here is the ultimate guide Do you have more information about the story? Please send us an email to bennittb@ or phone us on 083 625 4114. For free breaking and community news, visit Rekord's websites: Rekord East For more news and interesting articles, like Rekord on Facebook, follow us on Twitter or Instagram or TikTok. At Caxton, we employ humans to generate daily fresh news, not AI intervention. Happy reading!
Daily Maverick
23-05-2025
- Daily Maverick
‘Vetting crisis' — thousands of Gauteng scholar transport drivers not screened against offenders list
More than 3,400 scholar transport drivers in Gauteng have not been vetted against the Child Protection Register, exposing pupils to potential risk. While the Department of Education deflects responsibility, parents, industry leaders and the DA have raised the alarm about gaps in regulation, background checks and accountability. The safety of thousands of schoolchildren in Gauteng is under threat after it was revealed that the Gauteng Department of Education (GDE) has failed to vet 3,400 scholar transport drivers against the Child Protection Register, potentially allowing individuals unsuitable to work with children to transport pupils daily. This alarming revelation emerged in a written response by Gauteng education MEC Matome Chiloane to questions by the DA in the Gauteng legislature. The party has since announced it will report the department to the South African Human Rights Commission, demanding a forensic investigation into what it calls a 'vetting crisis'. According to section 126 (1) of the Children's Act, any person working with or having access to children must be cleared against the Child Protection Register to ensure they are not deemed unfit to work with minors. The Act mandates that institutions responsible for children, including schools and youth care facilities, must ensure thorough vetting before employment. The DA expressed outrage over the department's failure to uphold this law, warning that it exposes pupils to potential abuse, including sexual harassment and access to inappropriate materials. The party also criticised Chiloane for shifting the responsibility of vetting to bus owners. The controversy follows another scandal involving 12 convicted sex offenders who were allowed to continue teaching in Gauteng schools, further highlighting systemic weaknesses in safeguarding measures. 'The MEC should hang his head in shame for endangering our learners' lives by failing to vet drivers who have unrestricted access to children during their daily commutes to and from school The DA will continue to pressurise the Gauteng Department of Education to ensure that all individuals working with our children are properly vetted without any further delay. This is essential to protect our learners from any potential criminal intent that could endanger their future,' the DA's Gauteng education spokesperson, Michael Waters, said. Vetting gaps exposed In his response to the legislature Chiloane defended the department's approach, saying all drivers are required to have valid police clearance certificates and had undergone the necessary security screening as part of the tender process. He insisted that the responsibility for Child Protection Register vetting lies with the private bus companies that employ the drivers. 'The department will request the companies to address this matter,' Chiloane stated. He also revealed that the GDE allocates R1.7-billion annually to scholar transport and works with multiple stakeholders, including the departments of community safety, roads and transport and health, as well as local municipalities, to ensure regulatory compliance. However, Chiloane also said the GDE has not received any formal safety status reports for the vehicles transporting pupils, saying this function falls under the Department of Community Safety. Responding to questions from Daily Maverick, the GDE insisted that it considered vetting 'a crucial aspect for individuals working with children', but added that the responsibility of vetting drivers fell onto the shoulders of service providers. 'All service providers signed service-level agreements, which stipulate that they must conduct vetting of drivers. The department submits a comprehensive list of all drivers to the Department of Justice,' said GDE spokesperson Steve Mabona. He said that once a driver is found to be unfit to transport pupils, the service provider is told to immediately withdraw the implicated driver. Mabona added that the department was in the process of collating all driver information to submit to justice and community safety departments, for the second year of the contract, and that all scholar transport drivers would be vetted by 30 June 2025. Limited screening Sibongile Maseko, the general secretary of the Greater Gauteng Learner Transport Organisation, acknowledged significant regulatory shortcomings in the scholar transport sector. She told Daily Maverick that while the organisation operates under the framework of the National Land Transport Act and the Transport Safety Act, it lacks a formal mechanism to vet drivers for criminal histories. 'There is a policy being developed around an offenders list,' Maseko said. 'That list is currently with the Department of Transport, but as a scholar transport sector, we don't have it on our desks yet.' According to Maseko, the organisation's current vetting process relies on document verification rather than comprehensive background checks. 'Before someone becomes a member, they must present themselves at our offices,' she explained. 'We inspect their vehicle, verify that it is roadworthy and ensure the driver holds a valid licence, a Professional Driving Permit, and ideally an operating licence. However, many operators still don't have one, and we're in the process of helping them apply.' Maseko stressed that while physical documents are reviewed, there is no system in place to screen for prior convictions. 'What we do not have is a system to check criminal records. We only assess at face value. It is something we have been pushing for and we want to be able to thoroughly vet.' She also detailed how local associations function at the regional level. Each region has its own leadership and administrative officers who work directly with drivers. Once a driver passes the initial checks, they are given an official sticker indicating they are authorised to transport children. Beyond that, Maseko said, there is a contractual safeguard between drivers and parents. 'Because this is a door-to-door service, we require that every driver enters into a formal agreement with the child's parent. This contract is provided by the association, signed by all parties, and copies are retained both by the parent and our office,' she said. The organisation oversees about 5,200 drivers across Gauteng. Maseko added that regional associations regularly update their driver databases and submit reports to the provincial office to maintain oversight. Parents in the dark Many parents admitted they were unaware that scholar transport drivers were not vetted against the Child Protection Register. Instead, they often relied on word-of-mouth recommendations from other parents or residents when choosing a transport provider, basing their decisions on factors such as vehicle condition and cost and the driver's perceived reliability. One mother said she goes out of her way to monitor her child's safety each day. 'In the morning I wait until my daughter is in the taxi before I leave. In the afternoon, my older daughter, who's 23 and studying through Unisa, waits for her,' she explained, adding that she's taught both her children about inappropriate behaviour and regularly checks in with her younger daughter. 'I ask her if the driver has ever done anything wrong or made her uncomfortable. Thankfully, she's always said no, but I would feel much better knowing that he had been vetted against the Child Protection Register.' Another mother said she had assumed the drivers were properly screened. 'I thought they would be, because everything seemed very formal and official. They were recommended to us by the school, you sign this contract, and the drivers always look neat and clean,' she said. She acknowledged that, as a working parent, she has no choice but to rely on scholar transport services. 'I can't fetch and drop my child off every day. Vetting would give me peace of mind and it should be standard,' she said. A father said he trusted the driver because the same person had been transporting children in the area for years without any reported issues. 'We know him from the community. He's never given us a reason to doubt him. But when you hear that there's no official check, it makes you worry what if someone slips through the cracks?' he said. 'There should be a national system. You shouldn't have to rely on reputation when it comes to your child's safety.' Another parent said affordability often outweighs concerns about vetting. 'I pick the transport I can afford, and I ask other moms if they've had any problems. That's really all I can do. Most of us don't even think about background checks because we just assume the government is taking care of that part,' she said. She added that she would support proper vetting if it meant her children were safer, and was shocked that this is not already taking place. DM
