Metro funds redirected to fight coronavirus

Special council meeting to consider spending as city deals with R1.5bn hole in budget

Stock photo.
Stock photo.
Image: 123rf.com/betonstudio

The Nelson Mandela Bay municipality redirected R100.2m from the Urban Settlement Development Grant to fund Covid-19 related projects.

This payment is contained in the early adjustments budget report for the 2020/2021 financial year that council still has to approve.

Councillors are expected to vote on the adjustments budget at a special council meeting on Wednesday.

Previously, Bay CFO Selywn Thys said the National Treasury had permitted metros to redirect unspent and uncommitted funds from the urban settlement allocation to implement their Covid-19 response plans.

This, as the city’s operating budget showed an increase of R156m due to funds being moved from the capital budget, which decreased by R266m, to fight the spread of the coronavirus pandemic in the city.

In his executive summary, acting mayor Thsonono Buyeye confirmed that Treasury had not transferred grants from the last quarter of the 2019/2020 financial year.

The metro has a hole of more than R1.5bn in its budget.

“When tabling the 2019/2020 late adjustments budget on June 29 it was indicated that an amount of R753.8m had not yet been transferred by National Treasury from the 2019/2020 portion of various grants that were meant to be transferred to the municipality.

“This relates to the equitable share allocation [of] R255.4m, USDG R390m, public transport network operations grant R98.2m and neighbourhood development partnership grant of R10m

“It can be confirmed that these grants are yet to be transferred to the institution and the situation has escalated to the current financial year 2020/2021 where a combination of R840,117,000 has not yet been transferred by National Treasury to the municipality’s bank account.

“In essence this means that by the time of concluding this budget, a total of R1,593,917,000 is outstanding in terms of actual grants being made to the municipality,” Buyeye said.

The withholding of grants negatively impacts on service delivery.

This, as the city’s Assistance to the Poor and Expanded Public Works programmes are funded by the equitable share which subsidises water and electricity for most indigent residents.

The National Treasury initially withheld the funds because the metro failed to act on a forensic investigation into the IPTS about three years ago, which uncovered alleged large-scale corruption and how hundreds of millions of rand had been wasted.

The appointment of Mvuleni Mapu as acting city manager on June 8 also became a bone of contention.

However, Mapu was arrested for fraud and corruption and released in August, with economic development head Anele Qaba quickly appointed in his place.

In September, Qaba stepped aside and on Friday, COO Mandla George was appointed by council as the interim accounting officer.

The next scheduled payment for the Bay’s IPTS from National Treasury — of R79,000 — is due for release on October 23.

The redirecting of the grant to help fight the spread of the novel coronavirus will likely form part of the investigation by the Special Investigating Unit — which was unleashed by President Cyril Ramaphosa to probe Covid-19 expenditure.

Last month, The Herald reported that the Hawks had set their sights on seven companies that supplied Covid-19-related items.

Municipal spokesperson Mthubanzi Mniki failed to comment by print deadline on Monday.

HeraldLIVE

subscribe

Would you like to comment on this article or view other readers' comments? Register (it’s quick and free) or sign in now.

Speech Bubbles

Please read our Comment Policy before commenting.