The draft financial recovery plan expresses good intentions to turnaround the dire financial situation at Emfuleni Local Municipality (ELM) but is unlikely to succeed due to unrealistic assumptions. The plan assumes problems like corruption, incompetence, and underperformance among ELM officials and staff will be resolved without consequences or financial investment. It relies on the same managers who oversaw ELM's decline to implement the plan by vague deadlines. True recovery would require concrete actions, not business as usual, to address ELM's entrenched issues through new investment and leadership.

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ELM Draft Financial Recovery Plan – Expressing Only Good
Intentions – No Real ELM Turnaround Likely To Happen
In the first week of June 2018 the Gauteng Provincial Government intervened in the
business of Emfuleni Local Municipality (ELM) in terms of section 139(1)(b) of the
Constitution. The Financial Recovery Services unit within National Treasury was
requested in this process to assist in the development of a financial recovery plan for
ELM. A draft of this plan (166 pages long) was published on 3 October 2018 for
comment.
My personal opinion of the draft plan once I studied it, can be summarised in the
following 2 pictures:
Regardless of a very voluminous, impressive and professional looking document, in
my opinion it was compiled using the following steps:
1. Determine what is wrong at ELM (lots of verified reports on this subject)
2. Determine the variables / levers to be changed to fix the situation
3. Make a lot of assumptions to get ELM fixed
a. Assume the variables / levers to be changed to fix the situation will
miraculously change
b. Assume it will be fixed without financial investment from the Gauteng
province
c. Assume the Municipal Manager (MM) and his managers will turn things
around without program / project managers (although all the key ELM
management positions are currently vacant)
d. Assume the wider council will oversee the turnaround without playing party
politics like in the past
e. Assume ELM staff will change their culture overnight (consequence
management, stealing, unproductive, saving 15% etc.)
f. Assume the ANC will allow voters to be aggravated in election year
(Vigorous revenue collection?)
4. Recalculate and predict a future ELM financial position based on the overall
assumption that all the above assumptions will be realised
5. Calculate a vague wish-list timeline to get things fixed given all the above
assumptions will be realised (no project plan, just rough overall target dates)
6. Make the same ELM managers accountable to implement the plan who got ELM
in its current dire state.
7. Make the MM overall accountable for the success of the plan.

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As discussed at the ELM ward 9 ward committee previously and reported on in the
local press, the ELM financial position can be summarised by the following graphs:
The 166-page document reiterated the reasons for the dire state of ELM but neglected
to mention that some top ELM officials (including the MMC for Finance) are allegedly
paying willing female interns salaries of up to R28,000 a month in return for sexual
favours (exposed by the Daily Sun newspaper on 28/08/2018). The document also
neglected to state the fact that ELM is busy destroying the environment and the Vaal
River with untreated sewerage. (As exposed on a SABC 2 TV program recently)
The report did highlight that:
• ELM workers do not have the correct competency levels
• Little to no consequence management is present in ELM
• Key ELM delivery and financial management positions are vacant
• ELM employees are underperforming and not adhering to legislation
• ELM staff are not legally prosecuted when stealing
• Limited steps are taken to prevent ELM staff from stealing
• ELM municipal courts are severely understaffed (vacancy rate of 71%)
• ELM is giving electricity and water away for free and try to hide it as losses

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• ELM does not make financial provision for any legal liabilities (estimated by the
ward 9 ward committee to be over R1 billion)
• ELM grossly underspends on infrastructure repair and maintenance.
• ELM currently has “only” 2 600 staff positions of its stated 6 314 staff positions filled
(vacancy rate of 59% – heaven forbids that the ANC thinks filling all these positions
would get them more votes in the next election regardless of the financial impact
on ELM).
• ELM currently takes up to 242 days to pay its creditors.
The key ELM positions vacant as mentioned in the plan do explain why ELM residents
are unhappy and their issues stay unresolved:
• Head of Revenue Services;
• Head of Customer Care;
• Chief Audit Executive;
• Head of Operations;
• Chief Director: Utilities and Special Projects;
• Manager Electricity;
• Manager Debtors;
• Manager Revenue Management;
• Manager Fleet Management.
The stated focus areas of the ELM financial recovery plan are:
Strategy One: Service Delivery/ Operating Model;
Strategy Two: Organisational Restructuring;
Strategy Three: Revenue Enhancement and Economic Development;
Strategy Four: Credible Budgeting and Financial Management;
Strategy Five: Service Delivery and Infrastructure Management; and
Strategy Six: Governance and Stakeholder Relations.
The plan is apparently designed to ensure a turnaround of ELM by 2020/21! For
the purpose of the plan, implementation timeframes are defined as Immediate Term
(Current to 31 December 2018); Short Term (Up to 30 June 2019); Medium Term (Up
to 30 June 2020); Long Term (Up to 30 June 2021)
Some of the key actions in the recovery plan are listed as:
1. Filling of the posts of Municipal Manager (The person who should drive the
implementation and success of the plan!), Chief Financial Officer and Head:
Technical Services;
2. Reduction in expenditure on non-essentials, non-core activities, non-revenue
generating activities, and optimising current spending within the Municipality to
accelerate economic growth and job creation;
3. Increasing revenue through improved collections and billing efficiencies and
seeking alternate revenue sources;
4. Optimising asset management;
5. Review of the service delivery model, in particular outsourcing;
6. Negotiations with key creditors and review of major contracts; and
7. Ensuring proper administrative and governance arrangements are in place to
manage and address the key financial and service delivery challenges of the
Municipality.

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In conclusion, according to me this plan (with its vague timelines) entails that
everybody does their normal work correctly, the MM ensures the plan happens
successfully without additional investment / money.
In my opinion and experience business as usual and using the same people to
drive the plan is unlikely to ensure a different outcome for ELM.
Am I the only one wondering whether there are any examples of local
municipalities turned around successfully using this type of intervention
managed as foreseen by this plan?