Date: 10 December 2018 By: Andries van Zyl
All is obviously not well within the Makhado Municipality’s financial department. Following hard on the heels of their recent property rates blunder, where thousands of municipal account holders were not charged property rates for a number of months, what came to light this week is that local taxpayers have been paying a little bit more than they should as a result of a calculation error on their monthly accounts.
As for the property rates blunder, the municipality explained that it was caused by “technical problems” when they uploaded the new 2018 valuation roll onto their system. The new valuation roll came into effect on 1 July this year. As promised by the municipality, local taxpayers, or at least the 9 472 of them who were not billed for property rates since July this year, received a nasty surprise on their November account – a single account for the whole outstanding amount in property rates. For many, the arrears totalled thousands, which will definitely make Christmas a bit less festive this year for those affected. The municipality did, however, say that local taxpayers could make arrangements for paying off their outstanding debt.
What was apparent was that a lot of people do not look at their monthly accounts, although many people actually do. They were the ones who spotted another discrepancy on their November account.
The municipality has apparently calculated residents’ monthly property rates over an 11-month period and not a 12-month period. One resident even claimed that they had calculated his monthly property rates payment over a 10-month period. Another discrepancy on the November account was the amount of the rebate owners of residential properties qualify for. Homeowners qualify for an annual R26 137.20 rebate on their total property value. Yet somehow, the municipality lowered this amount to R24 565.
Now, one might argue that this small sum might make no big difference to the monthly amount, whether calculated over 11 or 12 months. Similarly, no big difference is made in the monthly rebate amount between R26 137 and R24 565 (the difference is literally 45 cents). What is the big fuss, then?
Despite the calculations being wrong - something that is totally unacceptable in good accounting practices - what remains to be seen is how on earth the municipality would be able to balance their books over a year-long period?
The Zoutpansberger took a closer look at one local taxpayer's account. Apart from having to pay an outstanding amount of R2 771.19 in arrears property rates since July this year, he is now being billed R775.27 per month (based on an 11-month period) in property rates, minus the R17,87 erroneous monthly rebate (on R24 565 and not R26 137), totalling R757,40 per month. He should be paying R693,25 per month. Considering the R2 771.19 he was billed for property rates in arrears, the taxpayer will be paying R451,49 too much every year, based on the municipality’s current calculations. On a single account, this might not seem like a lot, but if one multiplies this amount by the thousands of local taxpayers with an average property value of R1 million, this “extra” amount will run into millions annually. If the erroneous billing was only made for one month and, for instance, only on the 9 472 accounts on which property rates have not been charged since July this year, the municipality would have pocketed just more than R350 000 in “extra” money.
Municipal spokesperson Mr Louis Bobodi confirmed on Tuesday that mistakes had indeed been made on municipal accounts. He was responding to a media enquiry regarding the problems in question. “All those accounts are currently being reconciled to the overall twelve months of billing in a year. The same reconciliation undertaken is targeted at correcting the residential discount amount from R24 565 to R26 137.20,” said Bobodi.
Bobodi’s response sparked further questions, namely from when these erroneous calculations were made, whether the municipality intends to refund those people who paid too much and whether the municipality will investigate who or what was responsible for the erroneous calculation. The municipality acknowledged receipt of the questions, but had yet to reply at the time of our going to press. The Zoutpansberger can, however, confirm that correct billing practices and calculations were made on the above-mentioned taxpayer's account (used as example) up to June this year.
Andries joined the Zoutpansberger and Limpopo Mirror in April 1993 as a darkroom assistant. Within a couple of months he moved over to the production side of the newspaper and eventually doubled as a reporter. In 1995 he left the newspaper group and travelled overseas for a couple of months. In 1996, Andries rejoined the Zoutpansberger as a reporter. In August 2002, he was appointed as News Editor of the Zoutpansberger, a position he holds until today.