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VBS scandal could cause R1.8bn loss to municipalities

Auditor-General Kimi Makwetu said during an interview regarding the 2017/2018 local government audit release that the biggest impact of the collapse of VBS Mutual Bank is the delay in implementing disbursements for infrastructure in municipalities.

EWN reported that during the Radio 702 interview with Eusebius Mackaizer Show Makwetu said that Limpopo, North West and Gauteng municipalities are set to lose around R1.8-billion of taxpayers’ money due to their investment in VBS.

The audit was conducted throughout 257 municipalities and 21 municipal entities and identified those who were affected and those will now need to wait for money to be recuperated.

The investment did not comply with the municipal regulations and it is unfortunate that the impact will greatly affect the essential services, said Makwetu.

He also said that the recovery of the investments was highly unlikely due to the banks pending liquidation process.