JB Marks faces deadline to repay R2.4 Million in unspent grants

The JB Marks Municipality is under pressure to repay R2.4 million in unspent conditional grants for the 2023/24 financial year after a directive from National Treasury. The deadline for repayment was outlined in a letter sent on 12 November 2024 by Acting Deputy Director-General of Intergovernmental Relations, Ogalaletseng Gaarekwe. The letter instructed the municipality to return the unspent funds, which were allocated to the Integrated National Electrification Program (INEP), to the National Revenue Fund (NRF) by 18 November 2024.

According to the letter, National Treasury used the pre-audited Annual Financial Statement (AFS) for 2024 to identify the unspent funds, with the fourth-quarter Municipal Finance Management Act Section 71 report used as a backup in the absence of the AFS. If the repayment is not made by the specified deadline, the unspent amount will be deducted from the municipality’s upcoming equitable share installment on 4 December 2024. The municipality was also given 14 days to propose an alternative repayment arrangement.

Failure to meet these conditions would result in the full R2.4 million being deducted from the municipality’s future funding allocation. This situation has raised concerns about the financial management of the municipality, particularly under the leadership of Acting CFO, Mr. Kumbe. Kgotso Sehurutshe, Chairperson of the South African National Civic Organization (SANCO) in JB Marks, expressed serious concerns, stating: “We are deeply concerned about the letter sent by National Treasury requesting the return of R2.4m due to non-spending. This is especially troubling as it occurred under Mr. Kumbe’s tenure as Acting CFO, during which the municipality also failed to utilize its grants, resulting in a staggering R65m being redirected elsewhere. Such actions point to a clear lack of oversight and consequence management.”

In response, Jeanette Tshite, Acting Communications Manager for JB Marks Municipality, provided the municipality’s side of the story. Tshite explained that the R2.4 million remains unspent due to issues with the Integrated National Electrification Program. She said: “The report indicates that an amount of R2.4 million remains unspent in relation to the Integrated National Electrification Program and must be repaid to the National Revenue Fund (NRF). The submission for application of the roll over as at the end of August 2024 was made, and the error and reasons for the rejected rollover are due to the incorrect attachments, as per the letter sent by National Treasury.”

Tshite clarified that the correct attachments were forwarded to the North West Provincial Department of Cooperative Governance, Human Settlements and Traditional Affairs ahead of the stipulated deadline of Monday, 9 September 2024. “The JB Marks Local Municipality is currently in discussions with National Treasury in revising the decision based on the submitted information to Treasury,” Tshite added.

The Acting Communications Manager also outlined how municipalities manage funding for various projects. “Municipalities implement projects through different funding models such as MIG, INEP, RBIG, and WSIG. Projects are planned, and cash flow projections are done timeously to ensure that we exhaust the allocated funds. If challenges arise on sites beyond our control, and the contract as stated in the construction laws requires an extension, we will extend and apply in accordance with the law,” Tshite explained.

She further emphasized that the municipality strives for value for money. “We pay for the work done, and if the work was not completed by the end of June, as per the municipal financial year, we cannot compensate. However, to minimize the possible risks, we have stakeholder engagements that discuss the risks aligned to delays towards the completion of the project, which, thus far, have worked in other projects,” Tshite concluded.