MEDIA STATEMENT
BY THE
INKATHA FREEDOM PARTY
Umzimkhulu Municipality Grants Loans in Breach of MFMA
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The Umzimkhulu Municipality is using its limited funds to grant loans to councillors and officials in contravention of the Municipal Finance Management Act (MFMA), the IFP has discovered. “We have documents proving that Umzimkhulu’s Municipal Manager has authorised at least four loans to its councillors and officials in breach of the legislation that explicitly forbids such practice,” said IFP MPL Mntomuhle Khawula, who visited the municipality during last week’s Mandela Week aimed at reaching out to communities across KwaZulu-Natal. The IFP has documents to prove that in 2010, at least three high-ranking municipal officials, including the Chief Financial Officer and one councillor, were granted loans ranging from R7 000 to R80 000. “This practice flies in the face of section 164(1)(c) of the MFMA relating to forbidden activities by municipalities as clarified by the National Treasury in Circular 8/2004 as well as the municipality’s presentation to the visiting delegation from the provincial Legislature,” said Khawula. Section 164(1)(c) of the MFMA states that “no municipality or municipal entity may make loans to councillors or officials of the municipality, directors or officials of the entity or members of the public”. In order to assist municipalities in legally interpreting this provision, the National Treasury prepared a circular in 2004 that stipulates that “no loans may be granted to or taken up by persons mentioned in section 164(1)(c) after 1 July 2004”. “Despite these legal provisions, the Umzimkhulu Municipality continues to break the law and divert its meagre resources to benefit its councillors and officials at the expense of its residents and ratepayers,” said Khawula. The IFP calls on the MEC for Co-operative Governance and the provincial Treasury to act against the Umzimkhulu Municipality in connection with the unlawful loans. “We also urge the MEC for Co-operative Governance to conduct a comprehensive investigation into unlawful loans in all municipalities in the province,” said Khawula. Contact: |