More than R115 million in equitable share allocations has been withheld from three Western Cape municipalities by the National Treasury as it moves to enforce compliance with municipal financial management laws.
Laingsburg, Beaufort West and Theewaterskloof are among 69 municipalities nationwide that have been penalised for persistent and serious non-compliance with the Municipal Finance Management Act (MFMA) and its regulations, despite repeated support, guidance and engagement from National Treasury.
The biggest allocation affected is Theewaterskloof, which has had R65.8 million withheld after Treasury found no evidence of adequate consequence management relating to allegations of financial misconduct and unauthorised, irregular, fruitless and wasteful expenditure (UIFWE).
Beaufort West has had R39.9 million withheld, while Laingsburg will forfeit R9.86 million until it demonstrates sufficient progress in addressing similar shortcomings.
The outstanding UIFWE balances currently stand at R397 million for Theewaterskloof, R190 million for Laingsburg and R62 million for Beaufort West.
Deputy director-general Ogalaletseng Gaarekwe said that the withholding of funds is intended to encourage compliance and should not affect service delivery.
He said the funds would be released once municipalities demonstrated measurable progress in addressing the deficiencies identified by Treasury.
Western Cape Finance MEC Deidré Baartman acknowledged concerns about the financial strain the withholding could place on municipalities with limited cash reserves.
“Provincial Treasury will continue working closely with National Treasury and the affected municipalities to help them achieve the required 30% reduction in UIFWE as quickly as possible, enabling the full release of their Local Government Equitable Share allocations,” she said.
Municipalities that achieve a 15% reduction in UIFWE by the end of August will receive 50% of their withheld allocation, with the remaining funds to be released once a further 15% reduction is achieved by the end of September.
Baartman said Provincial Treasury would intensify monitoring and technical support to help municipalities meet the targets. Joint training sessions with National Treasury on UIFWE compliance and reporting requirements are scheduled for July.
She added that Knysna and Kannaland had already met the required targets with provincial support.
Theewaterskloof Mayor Alderman Lincoln de Bruyn said the municipality was treating the matter with urgency.
“Our foremost responsibility is to safeguard sustainable service delivery to our communities. The Equitable Share allocation plays a vital role in fulfilling that mandate, and we are committed to taking the necessary steps to secure the release of these funds,” he said.
He said the municipality was engaging closely with both National and Provincial Treasury to address all outstanding requirements as quickly as possible.
Meanwhile, Beaufort West acting municipal manager Gerald Esau said the municipality had already begun correcting the issues identified by Treasury.
“The biggest issue with dealing with the UIFWE has been the non-sitting of the Municipal Public Accounts Committee (MPAC), which was affected by by-elections. It has now met, and a report has been submitted to council for adoption, which will remove the balance from the municipal books entirely,” he said.
Esau said other compliance issues related to staff registration on the Treasury e-Portal and councillor training were also being addressed.
“I will write back to National Treasury, and I expect to receive a favourable response as early as next week,” he said.
Laingsburg municipal manager Jafta Booysen did not respond to questions by deadline.
Cape Times
Ntsikelelo Qoyo
iol.co.za
