In a letter sent to the municipality, the Treasury’s Malijeng Ngqaleni says Treasury intends to stop an amount of R36.9 million and R183.3 million from the municipality’s 2021/22 Water Service Infrastructure Grant and Regional Bulk Infrastructure Grant allocations of R66.9 million and R458.3 million respectively. 

Ngqaleni, in a 2-page letter, informs the municipality that the Treasury’s intended action is due to the underperformance of the grant allocations. The municipality has, however, been offered a window period to respond to the National Treasury's letter explaining why this should not be effected. The municipality is yet to respond to OFM News' questions.

Ngqaleni says, in terms of section 38(2)(a) of the Municipal Finance Management Act (MFMA), the municipality is then required to submit its answers and replies within seven days upon receipt of this letter.

“Following the 2021/22 mid-year expenditure reports in terms of section 10 of the 2021 Division of Revenue Act, (Act No. 9 of 2021) (DoRA) and section 72 of the Municipal Finance Management Act, 2003 (Act No. 56 of 2003) (MFMA), National Treasury intends invoking section 18 of DoRA which provides that the National Treasury may in its discretion or on request of a transferring officer or a receiving officer stop the transfer of a Schedule 4B or 5B allocation, or a portion thereof to a municipality if the National Treasury anticipates that a municipality shall substantially underspend on the allocation, or any programme, partially or fully funded by the allocation, in the 2021/22 financial year,” she adds in a letter.  

OFM News previously reported that the municipality is amongst four ailing municipalities in the province which illegally invested R314 million of taxpayers’ money with the now-defunct VBS Mutual Bank.

It was found that the Madibeng Local Municipality invested R31 million of their conditional grant, while the Dr Ruth Segomotsi Mompati District Municipality invested R150 million, the Moretele Local Municipality invested R50 million from their water services infrastructure grant, and the Mahikeng Municipality invested over R83 million.

OFM News