Lesedi Local Municipality has received a partial release of its withheld equitable share allocation after making progress in complying with National Treasury’s financial management requirements.

National Treasury confirmed that Lesedi is among 17 municipalities that received part of their equitable share allocation on July 16.

The release follows the municipality’s efforts to meet conditions set by Treasury after funding was withheld due to financial management concerns.

While the partial allocation has been released, the municipality must meet additional requirements before it can access the remaining balance.

According to National Treasury, Lesedi must first use the funds received to settle outstanding priority debts, which may include payments to SARS, Eskom, pension funds, the Auditor-General and water boards. Once the municipality provides proof that these creditors have been paid, Treasury will consider releasing the remainder of the equitable share allocation.

The announcement forms part of a wider intervention by National Treasury, which withheld R13.5b in equitable share transfers from 69 municipalities across South Africa over serious concerns about financial management and non-compliance with legislation.

Addressing a joint meeting of Parliament’s oversight committees, National Treasury Director-General Duncan Pieterse said municipalities are being assessed individually as they demonstrate compliance with Treasury’s requirements.

He said that of the 69 municipalities affected, 10 have now received their full equitable share allocations, while 17 municipalities, including Lesedi, have received partial payments to enable them to settle priority creditors before the balance is released.

A further 22 municipalities are expected to receive funding as they continue to comply with the required conditions.

Finance Minister Enoch Godongwana said the withholding of equitable share allocations is a measure of last resort but remains necessary to promote sound financial management, accountability and improved governance in municipalities.

Minister of Cooperative Governance and Traditional Affairs Velenkosini Hlabisa acknowledged the financial challenges facing many municipalities and said his department is working closely with National Treasury to ensure that the interventions do not disrupt the delivery of essential municipal services.