This year, the Treasury issued stern warnings and wrote to several municipalities in the region. 

Recently, it alerted the troubled Qwaqwa-based Maluti-A-Phofung Local Municipality over its continued adoption of an unfunded budget and ignoring key and essential acts such as the Municipal Finance Management Act (MFMA). 

In a leaked letter shown to OFM News, the department's Malijeng Ngqaleni warns the struggling municipality that if it continued with such transgressions, it would withhold the conditional grant. This has the potential to hamper service delivery to residents who are already frustrated following the recent debacles with water and electricity supply.

This was the second warning the municipality received, but seemingly the first one fell on deaf ears, prompting the second warning as it continued to adopt the unfunded budget. 

The municipal spokesperson, Thabo Kessah, has since confirmed to OFM News that a letter was indeed received and they are responding to it accordingly.

"Both the National Treasury’s 30 September 2022 letter, relating to the persistent adoption of an unfunded budget by your municipality and the municipality’s related contravention of the MFMA, as well as MFMA Budget Circular no. 112 (issued 6 December 2021), advising you of the National Treasury’s intention to invoke section 216(2) of the Constitution parallel to MFMA sections 38 and 171 respectively, and having a reference.

"MFMA Budget Circular no. 112 set out the specific criteria the National Treasury will consider prior to the release of the 2022/23 Local Government Equitable Share (LGES) and was communicated to all municipalities, including your municipality. 

"The MFMA Budget Circular was clear in that the municipality’s failure to comply with the criteria set out in Paragraph 8 (Transfers to Municipalities) will result in National Treasury invoking section 216(2) of the Constitution, which runs parallel to MFMA section 38," Ngqaleni adds.

Free State MEC for Treasury, Gadija Brown, announced in October that the cash-strapped Free State municipalities, which often failed to pay the salaries of employees, will not be receiving bailouts from the provincial government anymore. 

She says all provincial departments have received a directive from the national treasury that municipalities will not be bailed out anymore. Brown said that instead, these municipalities have been encouraged to stimulate and enhance their revenue collection campaign to ensure that workers and services are paid.

ALSO READ: No more bailouts for broke Free State municipalities - Treasury

In June, a report by the Auditor General of South Africa Tsakani Maluleke, indicated that the troubled metro municipality forfeited over R400 million of the national conditional grant meant for much-needed service delivery.

In 2020, the national treasury is said to have withheld grant funding of R429 million due to underspending. Maluleke, in her report, said the Treasury’s action was a result of the delays by the metro in completing grant-funded projects.

In March this year, the Treasury told the cash-strapped Mangaung Metro Municipality to reduce its number of heads of departments (HODs). According to the mayor, Mxolisi Siyonzana, during an ordinary council meeting, the national treasury requested that HODs be reduced from nine to seven.

ALSO READ: Treasury tells cash-strapped Mangaung to reduce HODs

In October 2021, Treasury shot down Mangaung’s metro police establishment.

Treasury's Ngqaleni stated in a scathing letter to the metro's then Acting City Manager (ACM), Sello More, among others, that the metro police unit cannot be a priority, given the metro's financial and service delivery performance.

In this letter, the metro was told that for years it has been ignoring advice from the department. Ngqaleni said a warning to the metro over the years to manage its expenditure and prioritise the basic service delivery of water and waste management was largely ignored.

ALSO READ: Treasury shoots down planned Mangaung Metro Police establishment

On 15 February 2022, Ngqaleni wrote a letter to the Vryburg-based Dr Ruth Segomotsi Mompati District Municipality to stop funds due to non-compliance, informing it of its intention to stop funding worth millions of rands after the municipality failed to utilise the water services infrastructure and regional bulk infrastructure grants.

ALSO READ: National Treasury intends to stop funding to NW municipality

OFM News