THE financial woes of the city of Tshwane is getting worse.
Recently, National Treasury issued a directive asking the Metro to justify why part of its funding should not be stopped.
This came after National Treasury announced its intention to stop several grants amounting to R629.6 million because the city had not spent the funds as intended.
Treasury's reasoning for stopping the funding was underperforming compliance with programmes such as the Project Preparation Support Grant, Urban Settlement Development Grant, the Informal Settlement Upgrading Grant, Public Transport Grant and the Neighbourhood Development Grant.
In a letter dated 12 February 2024 from the Deputy Director-General of National Treasury, Malijeng Ngqaleni, to Tshwane City Manager, Johann Mettler, the department indicated its intention to cut payouts of the conditional grants by R629 million.
"National Treasury intends invoking Section 18 of Division of Revenue Act (DoRA) which provides that the department may, in its discretion or on request of a transferring officer or a receiving officer, stop the transfer of a scheduled 4B or 5B allocation, or a portion thereof to a municipality, if National Treasury anticipate that a municipality shall substantially underspend on the allocation, or any programme, partially or fully funded by the allocation in 2024," the letter reads.
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It further states that the department intends to stop the allocations of Section 18 of the DoRA 2023 and Section 38 of the Municipal Finance Management Act (MFMA) 2023.
The department requested Tshwane to explain why the expenditure reported as at 31 December 2023 is below 40%, provide a progress report on the approved projects, show the coverage of the grants transferred and provide a further presentation of the original cash flow projections compared to actual performance.
It also requested a progress report on the approved rollover for the financial year 2022/23, a commitment that the allocated funds are committed and that they will be fully spent by the end of the financial year, 30 June 2024.
"That is, a commitment that the municipality will not request rollover against the funds proposed to be stopped. A Representation on all projects awarded after the second quarter of the municipal financial year as at 31 December 2023. Representation on any commitments made against Supply Chain Management Regulation 32 projects in terms of the Supply Chain Management policy and Chapter 11 of the Municipal Finance Management Act (MFMA) and progress made against these projects. A declaration by the municipality on the amount that should be stopped by National Treasury; and an acceleration plan against the 2023/24 approved implementation plan," the letter reads.
City of Tshwane spokesman, Selby Bokaba said the city was in the process to submit a detailed plan to the treasury department on how the money would be spent and that they were hopeful and optimistic that once the acceleration plan was submitted, they would reconsider their intention to withdraw the grant funds.
