The City of Tshwane is at risk of losing to the National Treasury part of its conditional grants amounting to R629 million after the municipality failed to spend allocations for 2023/24 financial year.
In a leaked letter dated February 12 to municipal manager Johann Mettler, the Treasury expressed the intention to withdraw millions of rands from the City owing to “underperformance of grant allocations”.
Tshwane has been given a seven-day ultimatum to cite reasons why the allocations should not be taken from the municipal coffers.
The Pretoria News reported last month that the City could forfeit millions of rands to the Treasury after it failed to spend a huge chunk of its conditional grants meant for capital projects upgrading of informal settlements.
In the letter the National Treasury deputy director-general Malijeng Ngqaleni highlighted the intention to stop an amount of R14.4m from the 2023/24 Programme and Project Preparation Support Grant allocation of R62m.
It was also indicated that at least R391.4m from Urban Settlement Development Grant allocation of R978.5 million could be forfeited.
The City also stood to lose R85m from the Public Transport Network Grant allocation of R830.3m.
In addition, an amount of R102.8 from Informal Settlements Upgrading Partnership Grant allocation of R619.8m could be stopped.
The cash-strapped municipality also faced losing at least R36m from Neighbourhood Development Partnership allocation of R155.4 m.
Ngqaleni said: “This decision will not in any way affect future allocations to your municipality.”
The Treasury stated that the metro has seven days to respond to the notice by furnishing reasons why expenditure reported as of December 31 2023 was below 40%.
The City must also provide a progress report against approved projects, representation on the cash coverage for grants transferred and representation on the initial cash flow projections against actual performance.
The response should also include a progress report on any approved rollover for the 2022/23 financial year.
The City should also give motivation to “a commitment that the allocated funds are committed and that they will be fully spent by the end of the financial year June 30 2024”, among other issues raised in the letter.
Yesterday, Tshwane Mayor Cilliers Brink blasted the office of Gauteng Premier Panyaza Lesufi for claiming that R2 646 billion in grants had been withdrawn from the City by the national government.
The claim was made on X by an official in Lesufi's office, Dr Kgosi Maepa, and echoed by Lesufi in a television interview yesterday.
Brink said: “The letter does not say that the City would forfeit in excess of R2 bn. The letter does call on the City to account for the unspent portion of these grants, and to explain why some of this money (about R635m) should not revert back to the national fiscus.”
He said the City’s response was due by the end of the week, adding: “We know that spending our full capital budget is essential to improving infrastructure for service delivery, especially to the poor. We are equally adamant that this spending must procure value for people's money, and not incur irregular, fruitless and wasteful expenditure.”
According to him, some delays on capital projects have been occasioned by last year’s unlawful strike led by South African Municipal Workers’ Union.
Pretoria News
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