Government intervention worsened Mangaung Municipality crisis, but recovery underway — mayor
The appointment of a city manager has brought a measure of stability to the municipality.
Mangaung Municipality Mayor Gregory Nthatisi speaks during a media briefing in Bloemfontein on 9 May 2025. Picture: Gallo Images/Mlungisi Louw
The Mangaung Municipality says it continues to face ongoing challenges related to governance and the delivery of basic services, but emphasised that efforts are actively underway to tackle these issues.
On Wednesday, municipal officials appeared before parliament's Standing Committee on Appropriations to brief MPs on the city's progress.
Mangaung was placed under administration in 2020 after section 139 of the constitution was invoked by the Free State and National Government.
This intervention followed the metropolitan municipality's ongoing dysfunction and repeated failures to implement a financial recovery plan (FRP).
Mangaung Municipality mayor details challenges
Mangaung Mayor Gregory Nthatisi told the committee that political instability and internal conflict within the municipality prompted the Department of Cooperative Governance and Traditional Affairs (Cogta) and Cabinet to intervene.
However, Nthatisi said that the two task teams deployed to Mangaung were hindered by the same political turbulence they were meant to resolve.
'The political infighting also engulfed them as a result. They could just not impact on what they were sent to do,' he said.
ALSO READ: Mangaung Municipality in spending crisis after exceeding budget
He pointed out that some officials on the teams lacked the necessary experience to handle the responsibilities assigned to them.
'Others were quite junior than the responsibility that they were given as HoDs [Heads of Department] and that led to even exacerbating the crisis of Mangaung in a number of spaces, but the best thing that they left us with was a financial recovery plan document, which is guiding us today,' Nthatisi said.
According to Nthatisi, the appointment of a municipal manager has brought a measure of stability to the municipality.
'There's also relative stability when it comes to political structures because people are now performing their tasks, work is being done [and] council is sitting properly. We are now addressing challenges that have to do with administration.'
Financial recovery plan
Mangaung City Manager Sello More told the committee that the FRP is still in its rescue phase, with the implementation progress currently at 53.82%.
More said, the next phase – stabilisation – involves 100 activities.
He noted that the municipality has been receiving qualified audit opinions from the Auditor-General over the past year.
Mangaung has since created an action plan aimed at strengthening internal systems and addressing financial management weaknesses in response.
READ MORE: Eskom to disconnect 15 Free State towns over billions worth of debt
This plan also seeks to address overspending after the Auditor-General reported that the municipality spent 111% of its budget in the 2023/2024 financial year.
'Areas of overspending have been identified as employees' costs and contracted services. So the city must contain employee costs expenditure, especially overtime and acting allowances,' More said.
He revealed that the municipality has introduced a shift system to curb excessive overtime.
Critical positions are now being filled to manage acting allowances, according to the city manager.
'There has been a seriously high number of people in acting posts.'
Watch the meeting below:
The action plan further outlined reviewing staffing levels and costs associated with supporting political offices, as a means of reducing overspending.
More conceded that the municipality relies heavily on contractors for both routine and emergency maintenance due to limited internal capacity.
'We are now moving towards building our own teams and infrastructure required for routine maintenance, especially unblocking of sewer systems.'
Mangaung Municipality's liquidity and revenue challenges
Regarding Mangaung's financial health, More said liquidity challenges are driven by a low revenue collection rate and persistent overspending.
'The collection rate is not picking up from the average of 75%, which was one of the reasons the city was placed under provincial and later Cabinet intervention.
'The previous amalgamations into the city exacerbated the situation, bringing more indigents, billing issues and incomplete records.'
He highlighted an ongoing trend where even reliable ratepayers, both businesses and households, have begun to default, largely due to slow economic growth and underperforming industries.
READ MORE: Water wasted in Free State totals R3.7 billion in last seven years
Additional liquidity pressures stem from costly contracts, such as security and waste management tenders.
More explained that these contracts are often outsourced because in-house services are viewed as more expensive due to salary levels and benefits.
'Our recovery is not matching what we are supposed to be paying.'
He said the reliance on contractors for essential operations, such as service connections, has further strained the municipality's budget due to high costs.
More added that Mangaung is implementing several strategies such as realistic cash projections, tighter cash flow monitoring, and improved revenue management.
This includes restructuring, reviewing credit control procedures, enhancing debt collection, and resolving metering problems.
Supply chain corruption
More stated that no corruption cases within Mangaung's supply chain management had been identified internally by the municipality.
However, some arrests have been made by police based on tips from whistleblowers.
'Our [contract] awards have not been subjected to any court orders. It is safe to say that there is one bid where Saps arrested a successful bidder, two months after the award and start of the contract.'
The arrested bidder was released on bail.
More also indicated an ongoing police investigation into a 2019 security tender.
The municipality has begun rotating staff involved in bid committees to combat corruption.
It has also approved a whistleblower protection policy and established a dedicated hotline for fraud and corruption reporting.
NOW READ: Matjhabeng municipality's appeal rejected amid financial challenges, service delivery collapse
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