Deputy finance minister explains how flagged municipalities can get their money back
· Citizen
The deputy minister of finance, Ashor Sarupen, says the National Treasury will release the equitable share grant of 69 municipalities once they have taken corrective measures to put their finances in order.
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Treasury withheld this grant for municipalities that had been red-flagged for several issues, including questionable financial decisions and unfunded budgets, with the City of Johannesburg among them.
However, according to reports, some municipalities have received the equitable share while some are still in talks with National Treasury about corrective measures.
Speaking at a press briefing in Johannesburg on Wednesday, Sarupen said the decision to withhold this much-needed grant from these municipalities was not a punitive measure. He said National Treasury wants these municipalities to correct their behaviour.
Sarupen said National Treasury has given these municipalities a list of actions they should take to get back into their good books. This includes investigating fruitless and wasteful expenditure, unauthorised expenditure and irregular expenditure.
“There must be consequence management where there was fraud or any of those things, and people must be held to account,” he said.
The other corrective measure includes servicing of debt to service providers and entities such as Eskom and water boards.
“Municipal debt to Eskom is over R100 billion and what we have done with these municipalities is simple: we have just said to them, pay your bills,” he said.
Corrective measures
Sarupen said some of these municipalities have told National Treasury that they are financially struggling and are not able to meet their commitments because they have not received their equitable share.
“We have said to them, perfectly fine, we will release the charge of your money equal to your current account, pay proof to us that you have paid, and we will release the rest. Alternatively, enter into credit arrangements and send us a signed credit agreement that you are going to adhere to.”
Accountability
He said the consequences of not holding these municipalities accountable would be worse for residents and the state.
“The unintended consequences of not doing this would be worse because then you would have continued reduction in water pressure from water boards when they are not getting paid and they take credit control, even though individual residents in those municipalities are paying for water; you have load reduction from Eskom because the municipality is not paying Eskom and so the consequences of not acting is far worse.”
The Citizen understands that the mayor of Johannesburg, Dada Morero, met with the minister of finance, Enoch Godongwana, to discuss the steps that the metro is taking to correct its financial problems.
A day after this meeting, an extraordinary council meeting took place, where disciplinary action against senior officials was discussed. The discussion took place behind closed doors and the media was not present. But it is understood that this is a measure to convince the National Treasury that the city is taking corrective action related to corruption and wasteful expenditure.