Department defies Treasury over grantsComment on this story
Cape Town - The Department of Human Settlements is still withholding R300 million that metros countrywide need to build infrastructure in preparation for housing delivery.
Of this amount R50m is being withheld from the City of Cape Town.
Withholding the grants was despite a stern warning the Treasury gave the department last month when it ordered it to release the money.
On July 10, three days after it should have transferred the funds, the department asked the Treasury permission to withhold the grants for 30 days. The request was denied.
Now metropolitan municipalities, including Cape Town, are still waiting for the grants to be made.
Cape Town mayor Patricia de Lille said the withholding of the funds was illegal.
“Minister Sisulu (Human Settlements Minister Lindiwe Sisulu) is disobeying the National Treasury. This is not about whether the city or the department is wrong, but a legislative requirement that is not being honoured by Minister Sisulu,” De Lille said.
She said the delay could have implications on the city’s bid to receive level-three certification for housing delivery. They city had submitted its draft business plan in April.
To obtain the certification the metropolitan municipalities have to prove they have the capacity, resources and infrastructure to deliver housing opportunities.
In a letter to Human Settlements director-general Thabane Zulu, Treasury deputy director-general Malijeng Ngqaleni had told the department to release the funds by no later than July 24. She said the department had failed to follow the Division of Revenue Act (DORA), which allowed for the equitable share and allocation of funds to the three spheres of government.
The department’s application for an extension had been sent to the Treasury on July 10 while the deadline was July 7, Ngqaleni said, adding that the department had failed to notify the metros of its intentions.
“This is against the spirit of intergovernmental system and the whole notion of forward planning as envisaged by the many guidelines and circular that government has issued with the aim of promoting predictability, certainty and transparency in resource allocation.
“Several municipalities are likely to have already incurred expenditure on the assumption that they would receive their gazetted allocations in terms of the approved payment schedule,” she wrote.
She said the Treasury was “deeply concerned about the frequent violation of the DORA legal requirements and the total disregard by your department for our legislative framework as enacted by Parliament”.
If it happened again, the Treasury would report the department to Parliament and to the auditor-general, Ngqaleni said.
Sisulu’s spokesman Ndivhuwo Mabaya said the department understood the Treasury’s requirement for the law to be followed. However, it was also following law that required municipalities to be held accountable for spending, he said.
Mabaya said none of the municipalities had received level-three accreditation, which was a requirement for the grant to be transferred and it was “premature for them to be demanding that funds be transferred to them”.