Pretoria - National Treasury has withdrawn the suspension of transfers to Nala Municipality in the Free State because the municipality has made satisfactory progress, it said on Friday.
The matter is related to concerns raised by Treasury in connection with financial management and the implementation of the recommendations made by KPMG on dealing with corruption.
Section 216(2) of the Constitution was invoked in September 2012 and stopped transfers to Nala of the municipality’s remaining share of the 2012/13 Equitable Share and conditional grants allocations.
By then, Nala had already received R82 million of its R203.9 million allocation for the 2012/13 financial year.
On 24 January, Treasury officials visited the municipality and concluded that the municipality was on the right track. The municipality has appointed a chief financial officer and a municipal manager, as recommended by KPMG.
Treasury recommended to Finance Minister Pravin Gordhan that the suspension of transfers to Nala be withdrawn on condition that the council of Nala Municipality adopted a resolution to:
• Ensure that Nala Municipality finalises its 2009/10 and 2010/11 annual financial statements and the said statements are submitted to the Auditor-General for audit purposes by no later than 30 June 2013;
• Fully support municipal management’s implementation of the recommendations in KPMG’s 2010 forensic report;
• Cooperate with the Office of the Accountant-General (OAG) in the National Treasury when the OAG investigates allegations of fraud and corruption by councillors and officials named in the KPMG report;
• Ensure that Nala Municipality strives to recoup monies from municipal officials who were recently found guilty of corruption charges, and subsequently dismissed from the municipality;
• Supports efforts by the municipality to recover all monies paid to contractors who failed to complete or implement projects and ensure that the municipality provides the Minister of Finance with monthly progress reports on matters raised in this resolution.
The council has since adopted the resolution and council members have each signed a pledge to adhere by the conditions of the resolution.
“Despite the progress, Treasury is under no illusion that Nala will be able to implement successfully all of KPMG’s recommendations and fix its financial management challenges without assistance. The National Treasury will therefore provide the municipality with the technical assistance and the support it may need in the short to medium term,” said Treasury.
Nala Municipality has been warned that non-compliance with any of the above nine conditions will result in National Treasury promptly re-invoking Section 216(2) of the Constitution and, for the second time, stopping the transfer of all grant allocations due to the municipality. - SAnews.gov.za
