Finance Minister Enoch Godongwana says the National Treasury will release the remaining withheld July 2026 Local Government Equitable Share transfers
Image: GCIS
Finance Minister Enoch Godongwana says the National Treasury will release the remaining withheld July 2026 Local Government Equitable Share transfers from Thursday, July 31, to prevent disruptions to basic municipal services.
Treasury had frozen about R13.5-billion in equitable share transfers to 69 municipalities after finding persistent and serious failures to comply with the Municipal Finance Management Act (MFMA).
Some municipalities had already received their allocations, while about R7.1-billion remained outstanding for 49 municipalities.
However, the move sparked outrage among some unions and municipalities, who warned that withholding the funds could affect the delivery of basic services.
Speaking during a media briefing on Tuesday, Godongwana said the release of the funds did not mean the affected municipalities had complied with Treasury’s requirements.
He said the decision was taken to protect communities while municipalities are still required to fix their financial management problems.
"National Treasury has decided to release funding on Friday 31 July 2026 because we have withheld it for close to 30 days, which ends on Monday, 03 August, and to avoid having an adverse short- to medium-term effect on the delivery of basic municipal services" Godongwana said.
He also said the process had exposed deeper problems in municipal financial management and governance.
Godongwana said Treasury’s assessment found that the challenges went beyond individual cases of unauthorised, irregular, fruitless and wasteful expenditure (UIFWE).
“The section 216(2) process has therefore also highlighted the need for greater scrutiny of the credibility and funding of municipal budgets,” he said.
The Minister said Treasury had identified weaknesses in budgeting, cash-flow management, financial oversight and consequence management.
He said some municipalities had failed to properly investigate UIFWE cases, implement disciplinary processes and take corrective action.
“National Treasury will therefore place greater emphasis on the conduct not only of persons responsible for the original expenditure, but also of officials and structures responsible for investigating, reporting and acting on that expenditure,” Godongwana said.
He said the release of the funds was a conditional release and municipalities were still required to take action to address the problems identified by Treasury.
“Progress will not be measured only by reductions in UIFWE balances but also implementation of consequence management processes,” he said.
Godongwana said municipalities would be required to submit reports and supporting evidence as part of the compliance programme, with the first reporting deadline set for 30 September 2026.
He warned that Treasury would continue monitoring municipalities and that failure to show progress could lead to further action in future funding allocations.
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