The Free State has once again come under the spotlight after the National Treasury announced it would temporarily withhold funding allocations from 69 municipalities across South Africa, including 16 municipalities in the province, over persistent non-compliance with financial management legislation.
According to the Treasury, the decision follows serious and ongoing failures to comply with the Municipal Finance Management Act and its supporting regulations. The Free State has the highest number of affected municipalities, followed by North West.
Among those impacted, is the Mangaung Metro Municipality (MMM), which says it is taking steps to address the compliance issues identified by National Treasury.
Acting general manager for communications Nicolette Maysiels said the municipality has referred cases of unauthorised, irregular, fruitless and wasteful (UIFW) expenditure to the Municipal Public Accounts Committee (MPAC) and the Financial Disciplinary Board.
She added new systems and controls have been introduced to strengthen financial management and curb wasteful expenditure. “Systems and mechanisms were introduced as part of the audit action plan and addressing material irregularities, and these include well-defined payment procedures and process flow for handling UIFW,” Maysiels explained.
She said the city manager has also begun engaging with officials implicated in the non-compliance findings and has instructed them to implement corrective measures without delay.
Addressing concerns about the impact of the funding suspension on residents, Maysiels noted the metro remains under Cabinet intervention and is implementing a financial recovery plan. “The temporary withholding of equitable share will not affect service delivery but will constrain cash flow if it prolongs beyond 120 days. We are in the process of demonstrating progress to National Treasury for early release,” she said.
The municipality aims to meet key compliance targets by 31 July, while Council is expected to consider MPAC recommendations by 31 August and achieve 75% progress in resolving UIFW expenditure. Maysiels said the municipality is optimistic that demonstrating sufficient progress will result in the equitable share being released in September.
