By Lehlohonolo Lehana.
City of Tshwane is facing a possibility of losing over R629-million of its grant funding from the National Treasury due to underperformance of the grant allocations.
The city has been given until Friday, February 16, to motivate why the funds should remain in its coffers.
Treasury deputy director-general Malijeng Ngqaleni has proposed that a portion of the 2023/24 allocation to Tshwane in respect of the programme and project preparation support grant (PPPSG) and urban settlement development grant (USDG) be stopped.
The decision will also affect the public transport network grant (PTNG), informal settlement upgrading partnership grant (ISUPG) as well as the neighbourhood development partnership grant (NDPG).
The Treasury this week invited Tshwane to explain why the grants should not be rescinded in terms of Section 18 of the 2023 DoRA and Section 38 of the Municipal Finance Management Act (MFMA).
According to the Treasury the DoRA (Division of Revenue Act) provides that it may, at its discretion, stop the transfer of a Schedule 4B or 5B allocation to a municipality if it anticipates that such municipality shall substantially underspend on any programme, partially or fully funded by the allocation.
Tshwane mayor Cilliers Brink said that a decision had not been made to revoke funding.
“No decision has been made to take away Tshwane’s grant funding. National Treasury is asking the city to give an account of the unspent portion and to motivate why a portion of the grants shouldn’t be forfeited,” Brink said.
“The fact that this letter was leaked shows bad faith. The risk is that the national government is trying to scrape together all the money it can get, even if it means defunding capital programmes in municipalities.”
Treasury also wants a progress report against approved projects, a representation of the initial cash flow projections against actual performance among other things.
“Please be advised that in terms of the section 38 (2) (a) of the MFMA [Municipal Finance Management Act] you are required to submit, within seven days upon receipt of this letter, a written representation to the National Treasury regarding the proposed stopping of the allocation in question, “Ngqaleni said.
Treasury’s move comes as Brink announced plans to increase revenue and reduce expenditure in the range of R1bn a month for the next six months.