Ten municipalities’ budgets in the province fall short of the funding compliance criteria, as set out in the Municipal Finance Management Act.
This is according to an analysis conducted by the Provincial Treasury revealed at a meeting. Held by MEC for Finance, Economic Development and Tourism, Vusi Mkhatshwa together with MEC for Cooperative Governance and Traditional Affairs, Mandla Ndlovu. This is where they met with the 10 local municipalities to assess their budget plans for tabling next month.
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This was aimed at assisting municipalities to resolve matters relating to unfunded budgets before tabling for the year 2022/3 financial year. The affected municipalities are Emalahleni, Lekwa, Dr Pixley Isaka Seme, Thaba Chweu. Mkhondo, Dipaleseng, Govan Mbeki, Msukaligwa, Chief Albert Luthuli and Victor Khanye.
Each municipality, represented by Mayors, Municipal Managers and Chief Financial Officers presented their plans and projections to the Provincial Treasury team responsible for Municipal Finance. This forms part of the Provincial Treasury’s role to enhance accountability. Both in the Public Finance Management Act and Municipal Finance Management Acts through inter-governmental collaborations.
Mkhatshwa said that over the past two weeks, the Provincial Treasury engaged in a consultative process with each municipality. This is in terms of Section 23 of the MFMA. He said the engagements, the draft budget was discussed, and they agreed it will incorporate the recommendations from the department into the draft budgets prior to consideration by the council for approval.
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“The process afforded us an opportunity to test the credibility of budgets. To also check whether they meet the MFMA and funding requirements to prioritise basic services. We wish to highlight that the unfunded budget goes against Section 18 of the MFMA–in short, it is a pure transgression of the law,” he said.
He also added that unfunded budgets further contribute to Section 138 and 140 triggers. Further interventions for the affairs of the municipality are required. “It should remind us of the consequences of this non-compliance. It will cause the implementation of Section 216 of the Constitution. I want to appeal to all of us to use this budget engagement process as an opportunity to engage frankly and work towards the improvement of the unfunded budget,” concluded Mkhatshwa.
