Durban — EThekwini Municipality says it has submitted additional information for consideration by the National Treasury following the rejection of a roll-over request for a conditional grant.
This is after the Daily News reported on Monday that the City’s request for R1.9 billion roll-over for a conditional grant from the National Treasury had been turned down, and instead Treasury approved only R720.9 million which it specifically ordered the City to spend on Human Settlements and coastal sewerage repairs. A total of R1.2bn roll-over was declined.
Addressing the council on Tuesday on the process followed and the current status, mayor Mxolisi Kaunda said: “It is important to note that the roll-over application was partially approved by National Treasury, with a roll-over of R720.9m being approved on October 19. The roll-over of the balance of R1.164bn was not approved.”
He said the National Treasury had requested that the City makes further representation.
“And as a result, we have submitted additional information and the City manager and the chief financial officer met with National Treasury to make further representations last week.”
Kaunda said the matter of roll-overs is under review and it is normal practice for the National Treasury to engage with the municipality for clarification and additional information.
“The City remains fully committed to service delivery and we commit to fully spending these grants.”
In a written reply to the Daily News on Tuesday, the National Treasury said the municipality’s roll-over request was not fully supported because the municipality did not provide all the supporting documentation required in terms of MFMA Circular No 123.
The Treasury added that in the letter to the City, it requested the metro to provide all the outstanding information with regards to the rejected disaster funding.
Explaining further, the Treasury said in terms of the Division of Revenue Act, 2002 (Act No 5 of 2022), any unspent conditional grants must revert to the National Treasury (National Revenue Fund) at the end of the financial year unless the National Treasury approves (through a roll-over request) that the unspent conditional grants be rolled over into the next financial year.
“In the case of eThekwini, the municipality’s roll-over request was not fully supported because the municipality did not provide all the supporting documentation required in terms of MFMA Circular No. 123. In the letter, the National Treasury requested the metro to provide all the outstanding information with regards to the rejected disaster funding,” National Treasury said.
Kaunda said the main reason the roll-over of the grants has been out of the control of the municipality was that R1.53bn from the Municipal Disaster Management Grant for the flood damages was only received on 16 March this year.
Another reason cited by the mayor was that in terms of the grant framework, the municipality has 12 months to spend the grant. The mayor said it was not possible to spend R1.5bn in three months considering the processes to be completed. He added that supply chain management processes had to be followed for each of the more than 700 projects, especially from the Engineering Department.
This process includes doing designs before the specifications can be developed.
Kaunda said that in August, the National Treasury indicated that a rollover application was required, “and Treasury advised us that it wanted this application in a prescribed format and that information has now been appropriately packaged and submitted”.
ActionSA leader Zwakele Mncwango, who brought the issue to the public, said he was not buying Kaunda’s explanation.
Mncwango said during the council meeting that the City management refused to share the “roller application letter” so that the opposition could see what the City cited as the reason for failing to spend the money.
“The mayor is running away from accountability and we cannot allow that,” said Mncwango.
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