In a race to salvage crucial projects in the municipality, a senior Council delegation is being urgently dispatched to the national treasury today to find out why Makana is getting back only around half of the R53.7 million it's been banking on getting rolled over into its new budget.
In a race to salvage crucial projects in the municipality, a senior Council delegation is being urgently dispatched to the national treasury today to find out why Makana is getting back only around half of the R53.7 million it's been banking on getting rolled over into its new budget.
The figure first emerged in May, when Grocott's Mail reported that municipal officials had two months to spend R53.7 million – 80% of the capital expenditure and conditional grant budget for 2010/2011 – before a large chunk of it was returned to the national coffers.
The amount represented money applied for by the municipality, and granted in terms of conditional and unconditional grants – but not spent within the required time-frame.
At a recent mayoral business forum Makana Mayor Zamuxolo Peter told local entrepreneurs that the reasons the money hadn't been spent were:
* Departments could not fill strategic positions and that led to the incumbents being overloaded;
* Employees were careless;
* Officials either lacked the capacity to carry out the projects, or didn't care about the plight of the community.
The non-spending meant that projects meant to uplift township life, in particular, were under threat, with township infrastructure, electrification and the beautification of streets now taking a back seat.
Reliable sources say the bad news has been treated as "top secret" inside the walls of the city hall and that only the mayoral committee has been told. It could be seen as embarrassing for city bosses, with the Mayor himself repeatedly apologising to the public for the fact that the grant money was not used within the allocated time frame.
In a mayoral imbizo at the Noluthando Hall he was quoted in Grocott's Mail saying he was "deeply saddened" by the underspending and its implications and said the new council had managed to get permission for the funds to be rolled over into the next financial year.
At the recent business forum, Peter said the spending was "a very serious challenge". Not only did they have to spend R53 million from the last financial year, but also a current capital budget of R120 million bringing up the total to approximately R170 million. "The question is, you could not spend R53 million, how can you spend R170 million?" Peter asked.
An official at National Treasury told Grocott's Mail they'd sent a letter to the municipality informing them that of the R53.7 million they'd asked for, only R27.1m had been approved for a roll-over – R26.6m short.
Sources have told Grocott's Mail that Municipal Manager Ntombi Baart, Finance committee chairperson Pierre Ranchhod and acting Chief Financial Officer Namhla Dlulane, are on their way to Johannesburg to meet with representatives from the national treasury.
Asked by Grocott's Mail for comment, Municipal Spokesperson, Thandy Matebese said: "The matter was tabled to Council and it proposed the way forward. The response from National Treasury will then have to be presented to Council. Therefore we can only comment on the matter once it has been presented to Council."
How the municipal grants work
State funds for municipalities comes in the form of conditional and unconditional grants. These are declared in the annual Division of Revenue Bill, which is passed immediately after the budget speech in early February.
Examples of conditional grants are the Municipal Infrastructure Grant, for infrastructure in townships; the Neighbourhood Development Partnership Grant, for beautifying townships, and the National Electrification Grant. The conditional grants may only be used for their intended purpose, as indicated in the Division of Revenue Bill.
If a municipality fails to spend all the funds it receives through a conditional grant during a financial year, it loses them, unless it makes a special application to the National Treasury. Only after National Treasury has approved the can a municipality amend its budget to include the unspent portion of conditional grants.
If Treasury does not approve the roll-over, the municipality is required to pay back the unspent portion to Treasury.
