The DA in Mpumalanga calls on the Mpumalanga Economic Growth Agency (MEGA) CEO, Isaac Mahlangu to provide a progress report on the work by legal practitioners and an external debt collector appointed to consolidate the entity’s outstanding debts.
This after it emerged that the entity contravened section 51(1)(b) of the Provincial Finance Management Act (PFMA), as they failed to implement the process listed in the debt-management policy for the recovery of outstanding debts.
The impact of the entity’s disregard for the PFMA is detrimental. The 2022 Auditor General report indicated that there were material financial losses to the tune of R292,21 million.
The entity subsequently introduced internal controls on defaulting debtors, these include:
- Establishing a credit control committee which is responsible for monitoring debt collection;
- Issuing disconnecting letters to customers who are not settling their accounts
- Implementing a process for entering into loan agreements with debtors and;
- Issuing default letters/final letters of demand to defaulting customers.
Legal action must be considered against defaulting customers. Incurring a financial loss of over R200 million is unacceptable. The DA will not sit back and watch our remaining state-owned entities being run to the ground.
It is gravely concerning that the entity is failing to live up to its mandate, to maintain properties in their portfolio and ensure that they generate income for sustainability. As an entity responsible for economic growth in Mpumalanga, efficient and effective debt-management policy should be a priority.
We will continue holding the ANC administration accountable to ensure that such financial losses are minimized.