Municipality set to lose big chunk of grants after under-spending
Treasury to block more than R200m allocation
Embattled Dr Ruth Segomotsi Mompati district municipality is set to lose a portion of its grant allocation from the National Treasury.
This follows a letter from the National Treasury to the municipality, informing it of its intention to stop the funds due to non-compliance with the water service infrastructure grant (WSIG) and the regional bulk infrastructure grant (RBIG).
In a letter dated February 15, the National Treasury’s head of intergovernmental relations, Malijeng Ngqaleni, said: “The National Treasury hereby informs you of the intention to stop an amount of R36.9-million and R183.3-million from your 2021/22 WSIG, RBIG allocations of R66.9-million and R458.3-million respectively in terms of section 18 of the 2021 DORA [Division of Revenue Act].”
She said the decision was based on the 2021/22 mid-year expenditure reports after the municipality substantially under-spent on its allocation.
“The National Treasury hereby proposes that a portion of the 2021/22 allocation to your municipality in respect of the WSIG and the RBIG as gazetted in the 2021 DORA be stopped due to underperformance of the grant allocations.
“However, the decision will not in any way affect future allocations to your municipality. Your municipality is requested in a response to motivate to the National Treasury why the expenditure reported as at 31 December 2021 is below 45%,” she continued.
According to the letter, the municipality was requested to submit a progress report for approved projects, its representation on the cash coverage for grants transferred and on the initial cash flow projections against actual performance.
“The municipality was also requested to commit that the allocated funds ... will be fully spent by the end of the financial year, 30 June 2022. It was requested to make a commitment that the municipality will not request a roll-over against the proposed stopped funds...”
The municipality is expected to respond within seven days of receiving the letter.
The North West MEC for finance, Motlalepula Rosho, said they have noted the letter with concern. Rosho said her department would work with the municipality to ensure it met the deadline for submission, and to produce a comprehensive response as to how they planned to protect funding meant for service delivery.
“It is our understanding that the municipality is expected to make representation to the National Treasury, and on the basis of the evaluation of the reasons the final determination would be made. The provincial treasury, working with COGTA [the Department of Cooperative Governance and Traditional Affairs] will be providing the necessary support to the municipality so as to fulfil this assignment,” she said.
Meanwhile, the executive mayor of the municipality, Tebogo Bauile, alleged that he had not received the letter yet and would not comment further.