Speaker, in the first two months of this financial year, the Free State department of co-operative governance, traditional affairs and human settlements had already spent more than half of its yearly budget to bail out struggling municipalities in the Free State. Bail- outs have become an annual occurrence in that province.
In 2010, bail-outs cost the department there R76,4 million. As poor financial management and incompetence lies at the heart of this issue, the problems will persist. Once again, R18,2 million in grants had to be given to five municipalities that could not pay their councillors' salaries. The people that suffer the most as a result of such ineptitude are the indigent who are denied basic services. The fact that the National Treasury was not aware of these transfers is extremely worrisome. This is a deplorable state of affairs. This issue requires urgent investigation. Poor financial management threatens the very functioning of local government.
In spite of government's much-trumpeted turnaround strategy, the situation at local government level is in a state of deep and continuous crisis. The fact that municipalities are floundering just three months after the recent local government elections indicates that serious trouble lies ahead. Surely the payment of councillors cannot be the main focus of any local government. Its core function is to supply essential services to the community it serves.
As the situation in the Free State is so dire, Cope calls for a thorough and immediate investigation into the state of affairs of the Free State municipalities, including the so-called "Operation Hlasela". [Applause.]