City on course to spend grant fund

City of Tshwane spokesperson Selby Bokaba. Picture: Masi Losi

City of Tshwane spokesperson Selby Bokaba. Picture: Masi Losi

Published Feb 20, 2024


The City of Tshwane believes it is on course to spend its grant funds from the national government despite doubts cast by the National Treasury that it would be unable to do so.

Municipal spokesperson Selby Bokaba expressed optimism that the City made a compelling case to the Treasury to avoid the cancellation of its grants allocation before the end of this financial year in June.

This was after the National Treasury penned a letter to municipal manager Johann Mettler, expressing the intention to cancel at least R629 million, which is part of conditional grants allocated to the municipality for the 2023/24 financial year.

The Treasury cited “underperformance of grant allocations” as the reason for wanting to withhold the grants.

Bokaba said: “Tshwane wrote a letter to the National Treasury in which it made an elaborate, detailed and comprehensive submission about how it intends to spend its grant funds allocation before the end of the current financial year.”

He said the letter was in response to the one Treasury had written to various municipalities last week, threatening to “stop grant funds and afforded the municipalities the opportunity to motivate why it should not stop the transfer of the third tranche of the funds due to underperformance”.

He said the City’s migration from the old financial management system to the new system, was one of the contributing factors for the underperformance on the part of the municipality.

The migration, he said, impacted on processing and accounting for expenditure.

The other factor for underperformance, Bokaba said, was the reduction of the Urban Settlement Development Grant and Informal Settlements Upgrading Partnership Grant during the second quarter, as directed by National Treasury, which necessitated early review and repackaging of a number of programmes to accommodate the cuts.

Last year’s prolonged unprotected labour strike also impacted heavily on the implementation and monitoring of projects.

The City’s underperformance was also linked to delays in the initial stages of procurement and the appointment of the contractors to provide electrical cables and spares, as well as lead times in the supply and delivery of materials for electricity projects.

Bokaba said: “The City has shown tremendous progress in most projects by issuing appointment letters and concluding contracts with the appointed service providers. The City has also reprioritised grant-funded projects as part of the 2023/24 Budget Adjustment process.”

Crucially, he said, the City has already depleted the transferred tranches when current expenditure and commitments for February 2024 were considered.

“From the beginning of March, the City will face serious funding shortfalls when it comes to paying contracted service providers.

“Therefore, to mitigate this challenge, the final tranches must be transferred by the end of March 2024, as per the approved payment schedule.

Total spending, including commitments, was R1.2 billion, versus R1.5 billion in transfers,” he said.

He said by the end of January 2023, 84% of transferred funds had been spent.

“The unspent balance for the five identified grants was R232 million. As demonstrated in the recovery plans, spending is expected to reach 100% by the end of the financial year,” he said.

Pretoria News

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