Opposition parties are calling for the dismissal of eThekwini Municipality Mayor Mxolisi Kaunda after the municipality failed to spend R1.9 billion of a conditional grant allocated to fix infrastructure. Opposition parties allege the money was forfeited to the National Treasury.
Yesterday, Monday October 30 the municipality released a statement refuting the allegations that R1.9 billion had been forfeited to National Treasury. Referencing an article published in the Daily News, the municipality said the newspaper’s evidence had been based on incomplete information and was misleading as consultations were still under way.
“The article unnecessarily sensationalises the matter without allowing the full process to unfold and be concluded. The final outcome of this matter should have been awaited before publishing non-factual information. For the record, no money has been forfeited by the municipality to National Treasury at this stage. The municipality met with National Treasury last week Thursday to discuss the grant funding. Therefore, it is premature to discuss this matter as it is currently under review. It is normal practice for National Treasury to engage with the municipality for clarification and additional information,” the statement read.
ActionSA provincial leader Zwakele Mncwango, told the newspaper that the city manager, Musa Mbhele, had written to the National Treasury at the end of August asking for a rollover of the R1.9 billion. Mr Mncwango said that National Treasury turned down the R1.9 billion rollover and instead approved only R720.9 million which it specifically ordered the city to spend on Human Settlements and coastal sewerage repairs. He said that the city lost R1.2 billion to National Treasury because they failed to spend it.
“This is poor planning by Kaunda and his management. He has failed to run the city. The only thing he must do is voluntarily resign or the ANC must fire him. He doesn’t know what he is doing. How can the city – which is besieged by infrastructure problems – fail to spend the money? Kaunda must go,” said Mr Mncwango.
Both the DA and the IFP agreed with Mr Mncwango, calling for the ANC to fire Mr Kaunda. ANC eThekwini spokesperson Mlondi Mkhize said the party had identified administrative inefficiency in the city which prompted the National Treasury to bring in a team to assist. Those responsible for the return of such a large amount of money to the National Treasury will face consequences, he said.
Mluleki Mntungwa, the mayor’s spokesperson said the National Treasury had granted a roll-over meaning they had extended the period in which the money could be used.
“No money has been returned to Treasury. The call by Action SA is misleading,” said Mr Mntungwa.
The National Treasury has recently issued a circular on strict cost cutting and austerity measures in national and provincial government. In addition, as per the communication from the National Department Human of Settlement, a Cabinet decision was taken to cut the Urban Settlement Development Grant (USDG) and the Informal Settlement Upgrading Partnership Grant allocations for the 2023/2024 financial year. This is not only in the eThekwini Municipality, as other metros in the country are also affected. There is a proposed budget cut of R142.4 million for the eThekwini allocation.
To set the record straight the municipality said, they could confirm that an application had been made to National Treasury to roll over unspent conditional grants of R1.885 billion of which R 1.5 billion related to the Municipal Disaster Management Grant for the flood damages.
“The funds for the Municipal Disaster Management Grant were only transferred to the city in March 2023, three months before the end of the city’s financial year. In terms of the grant framework the municipality has 12 months to spend the grant. Furthermore, Supply Chain Management processes had to be followed for each of the more than 700 projects.
“This process includes doing designs before the specifications can be developed. Even once designs are done, service providers still need some time to start the project. It was not a case of poor planning by the municipality. It was simply impractical to expect these projects to be complete in the 2022/2023 financial year. It was impossible to spend R 1.5 billion in three months considering the processes to be completed,” the municipality said in their statement.
The rollover application for the Municipal Disaster Recovery Grant was partially approved by National Treasury with a rollover of R720.9 million being approved on October 19, 2023. The city has submitted additional information for consideration by National Treasury and is awaiting the Treasury’s final decision.