Question NW3843 to the Minister of Cooperative Governance and Traditional Affairs
27 November 2023 - NW3843
Opperman, Ms G to ask the Minister of Cooperative Governance and Traditional Affairs
What are the reasons that her department withheld the Local Government Equitable Share from municipalities that are already in dire financial distress as her department only spent R110,7 billion of the R115 billion that was allocated to it leaving an underexpenditure of R4,3 billion which will be surrendered to the National Revenue Fund?
Reply:
In terms of Section 21(1) of the Division of revenue Act (DoRA), despite a provision to the contrary in the Public Finance Management Act or the Municipal Finance Management Act, any conditional allocation, or a portion thereof, that is not spent at the end of a financial year reverts to the National Revenue Fund, unless the roll-over of the allocation is approved in terms of subsection (2) which states that, the National Treasury may, at the request of a transferring officer, receiving officer or provincial treasury, approve a roll-over of a conditional allocation if the unspent funds are committed to identifiable projects.
For the 2022/23 financial year, an amount of R87,3 billion was allocated for the Local Government Equitable Share (LGES) grant to all 257 municipalities. A total of R83,9 billion was transferred to the municipalities, leaving a balance of R3,4 billion at the end of the financial year. The R3,4 billion was not withheld to municipalities, but was rather offset against unspent conditional grants of municipalities that failed to surrender their unspent allocations to the National Revenue Fund. The offsetting of the R3,4 billion was as per the National Treasury directive.
End.