Some Limpopo municipalities still reeling impact of VBS losses, says Makwetu

JOHANNESBURG – Auditor-General Kimi Makwetu said some Limpopo municipalities were still reeling from the impact of the R1.2 billion losses incurred when VBS Mutual Bank went bust.Service delivery was also affected in these municipalities, with Makwetu adding that cost-containment measures and recovery plans were introduced in the hope of recovering from the “huge financial loss.”Eight municipalities in Limpopo are among 14 others across the country that invested funds in VBS Mutual Bank, which is now under curatorship, with seven losing out on the funds when the bank got defunct.Makwetu said Limpopo’s financial woes were reflected in municipalities’ inability to pay creditors on time, putting a strain on small businesses.“A lot of their project money was earmarked for water infrastructure and all of that, as we know, got swallowed in the VBS saga. Some of the infrastructure projects that were not able to be funded are beginning to show now because they no longer have that (money) to pay for that particular infrastructure.”The province has a municipality that has recorded a clean record for the first time in three years.Overall, the AG’s report stated that losses, misuse and harm is not being prevented in municipalities with the evidence of rising irregular expenditure not being dealt with and lack of action on potential fraud and corruption.Download the EWN app to your iOS or Android device.Source: EWN

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