The recent municipal council meeting sought the approval of the Budget, Treasury and Integrated Development Plan (IDP) portfolio committee to write off “uncollectable” debt amounting to R2.1-million.
The report from the Chief Financial Offi cer to the Budget, Treasury and IDP committee stated that they received a detailed report from Whitesides Attorneys who are currently handling the debt collection on behalf of the municipality.
The recent municipal council meeting sought the approval of the Budget, Treasury and Integrated Development Plan (IDP) portfolio committee to write off “uncollectable” debt amounting to R2.1-million.
The report from the Chief Financial Offi cer to the Budget, Treasury and IDP committee stated that they received a detailed report from Whitesides Attorneys who are currently handling the debt collection on behalf of the municipality.
The report revealed that some of the debtors are not traceable, insolvent, indigent and some have been incorrectly charged.
The report also stated that a process called “data cleansing” will commence close to the end of the current fi nancial year.
The process is “aimed at ensuring that the total debt is properly scrutinised and any debt that is viewed to be uncollectable will be dealt with accordingly,” the report read.
According to the report, “if the portfolio committee approves the writing off of the arrear debts, the amount will be written off against the Provision for bad Debts” and there will be no exchange of cash.
Assistant Director of Revenues Collection, Luvuyo Sizani said, “All of these accounts were handed over to Whitesides so they can be traced.” He made an example of Sea Breeze Take Aways which appears on the list of recommended arrear debt to be written off.
Whitesides Attorneys replied that there is nothing they can do as the owner has died. “We are taking what the lawyers say and that they have done all they could legally do” to recoup council’s money from these debtors, Sizani said.
DA Councillor Les Reynolds said that there is a lesson to be learnt here. “We should not allow ratepayers and business owners to have such high arrears. Sea Breeze should have never have got in that position where they owe R16 000. We should be on top of this,” he said.
Concerns were raised about the extra expenses of legal fees and the unfairness of writing off these debts when there are still people who are struggling to pay their debts.
Chief Financial Offi cer, Jackson Ngcelwane explained that writing off debts is appropriate for people such as pensioners and those who had passed away as in this case the debt cannot be transferred from a son to his father.
“On the issue of legal fees, we pay the lawyers on commission of what they collected,” he said. “The committee agreed that it recommends to the council that the arrear debt deemed uncollectable amounting to about R2.1-million be written off,” said Ngcelwane.
This was concluded after legal processes were followed by the municipal debt collectors. “The writing off of arrear debt also included the arrear debt relating to emerging stockowners in the area of Riebeeck East of about R53 000,” he said.
