Cape Town - Five Western Cape municipalities failed to spend 40% of their grants by December 2022 and as a result the National Treasury is claiming back the funds, hampering service delivery.
The Treasury – which is stopping grant funds worth R61.3m for Western Cape municipalities – stated its intentions to the Cederberg, Saldanha Bay, Kannaland, Knysna and Beaufort West municipalities.
However, Treasury Minister Enoch Godongwana also reallocated another R454.9 million in grants towards other municipalities in the province.
Local Government, Environmental Affairs and Development Planning MEC Anton Bredell’s office has pencilled in his diary engagements with the municipalities to help them with responses to Godongwana, in the hope of changing his mind.
Bredell’s spokesperson Wouter Kriel confirmed that the Treasury had stopped funds. Kriel said all provinces were affected by the stopping and reallocations of conditional grants.
He said officials in the Department of Local Government (DLG) Municipal Infrastructure office are interacting on a “constant basis” with municipal project managers, conducting regular monitoring and evaluation meetings, and providing the latest status of the Municipal Infrastructure Grant programme.
He said they are closely monitoring key projects in the municipalities, which failed to meet the 40% expenditure milestone by December 2022.
He said that after the necessary engagements, the transferring officer made recommendations to National Treasury.
“Thereafter, National Treasury submitted letters of intent to stop a portion of the 2022/23 allocation and allowed the municipalities time to respond before concluding their assessments.
“DLG will conduct engagements with each municipality during April 2023 to adjust their planning to account for the impact the stoppages will have on the implementation of the current projects.”
DLG officers will be closely watching some projects in the five municipalities. Kriel listed delays for all the projects.
The Cederberg Municipality, allocated R17 309 000 for 2022/23 financial year, saw R5.2m stopped by Treasury. As of March 2023, the Cederberg reported an expenditure of R5m or a 41.8% expenditure.
Kriel said that said litigation regarding the Lamberts Bay bulk water source delayed registration of Cederberg projects for 2022/23 financial year.
Furthermore, two projects – Graafwater multi-purpose centre and Graafwater upgrade roads and stormwater projects – were later introduced for registration and appraised and approved during October and November 2022.
Kriel said the contractors had been appointed for the two projects in January.
Saldanha Bay was allocated R21.6m for the 2022/23 financial year, with the Treasury stopping R2.2m. As at March end, Kriel said, the municipality reported an expenditure of R9.9m or 51.4% expenditure.
Kannaland Municipality was allocated R11m and Treasury had stopped R1.9m. Allocated R39.1m, the Knysna Municipality saw Treasury stop R9.4m.
Treasury allocated R15.3m to the Beaufort West Municipality, but has now stopped R5.8m.
He said the Western Cape Provincial Treasury engaged municipalities and, where needed, assisted them in responding to Godongwana.
“As funds are only stopped where they were already likely to be unspent, the impact on service delivery is due to the underspending, not the stopping,” Kriel said.