The National Treasury has warned that Nelson Mandela Bay risks losing its December grant allocation if it fails to address the historic R30bn in unauthorised, irregular, fruitless and wasteful expenditure (UIFW) — the highest of any municipality in SA.
Officials from the National Treasury met councillors and officials in two separate meetings on Monday.
At the top of the agenda was the R30bn.
According to councillors who attended the meeting, the National Treasury directed the metro to urgently convene the municipal public accounts committee (Mpac) to write off expenditure that can be accounted for before the next tranche is due.
However, despite this stark warning, a scheduled Mpac meeting was postponed on Tuesday.
Several councillors from the ANC, EFF and DA failed to attend, and the meeting did not quorate.
About 40% of the city’s total R21.61bn budget for the 2025/2026 financial year is made up of grant funding, while it battles to reach the targeted 85% revenue collection rate.
Some of the reports on the agenda include:
- Payment of city creditors;
- Status of the city’s fleet management; and
- The Mandela Bay Development Agency.
ACDP councillor Lance Grootboom said the city lost out on an opportunity to approve the write-off of about R1bn had the meeting proceeded as planned.
“It’s a serious concern that members of the three biggest parties in this council are not here because we were told in the meeting with the National Treasury that if we don’t deal with the expenditure, they will withhold our grant funds.
“Time is running out for us because the National Treasury said Mpac should convene at least twice a week until the end of December to bring down the UIFW to a reasonable amount for them to release the grants.”
Mpac chair Luxolo Namette said he was informed about four apologies from the ANC caucus.
“No reasons were provided,” he said.
“The lack of attendance by members is something that I have to take up with the speaker, Eugene Johnson, because this is the second time we’ve had a postponement.
“We wanted to sit and do the work. We hope we will be back soon to hold our meeting.”
ANC councillor Xolani Notshe confirmed receipt of the apologies from the four councillors.
“When a councillor submits an apology, we don’t necessarily interrogate them, but I know some of them have serious issues to deal with.
“We will have another meeting very soon to deal with matters of concern.”
Notshe said the National Treasury had the right to advise the city about how often Mpac should convene, but he considered all meetings important.
“We are concerned about the UIFW and the postponement of the meeting, especially considering the risk of losing grant funds.”
DA councillor Gert Engelbrecht said the postponement was highly upsetting, considering what was said by the officials from the National Treasury in Monday’s meeting.
“Another matter of concern is the failure to include certain important information that will help us deal with the UIFW, information about whether we got value for money for some of the expenditure that was flagged and how the consequences were managed.”
Municipal spokesperson Sithembiso Soyaya did not respond to a request for comment by the time of publication.
The Herald
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