Lekwa Local Municipality has three years to get its finances in order. This is in terms of a rescue plan drafted by National Treasury.
The municipality, which includes Standerton, is insolvent, with liabilities exceeding assets by some R741 million. Earlier this year, the North Gauteng High Court ordered the national government and the National Treasury to draw up a recovery plan for the municipality.
It was placed under administration in May.
The Mpumalanga Treasury envisages a shortfall of some R2.2 billion in the current financial year.
The National Treasury reported that the municipality had weak internal controls, was not compliant with prescribed policies and incurred a great deal of fruitless, wasteful, unauthorised and irregular expenditure.
The municipality had also adopted unfunded budgets in recent years. Its revenue collection projections were unrealistic and operating costs were high.
The plan calls, among other things, for proper funding of the budget, monitoring of daily cash-flows, improved debt collection, and containing costs.