The Tshwane metro has pushed back against claims of an impending financial crisis, insisting its finances remain stable despite warnings from National Treasury over failures to adequately address unauthorised, irregular, fruitless and wasteful expenditure (UIFW).

The issue came under the spotlight during a recent Council meeting where a policy aimed at preventing UIFW expenditure was tabled before councillors.

Freedom Front Plus (FF+) councillor Mark Surgeon said the policy exposed deeper governance and administrative failures within the metro, warning that the National Treasury had threatened to withhold grant funding from the metro due to serious compliance shortcomings.

“At first glance, this policy appears to be a step in the right direction, and the FF+ will always welcome additional oversight and accountability in the supply chain process,” Surgeon said.

“However, when the report and its annexures are thoroughly examined, it sets alarm bells ringing.”

According to Surgeon, the party is concerned that the policy was compiled in response to the National Treasury indicating its intention to stop grant allocations because of failures in compliance processes and alleged poor responses from municipal officials.

“What is even more alarming is that it is municipal officials’ failure to respond to correspondence from the National Treasury that prompted this step,” he said.

Surgeon warned that any withholding of grant funding could have severe implications for service delivery in the capital city.

According to the metro’s proposed draft budget for the 2026/27 financial year, the metro is expected to receive about R7.7-billion in grant funding from the national government.

The FF+ further raised concerns that the correspondence and policy processes were handled by former CFO Garath Mnisi shortly before his suspension pending an investigation into allegations related to undermining supply chain processes.

“The FF+ cannot endorse a policy drafted by someone under suspicion,” Surgeon said.

He said the party ultimately voted against the policy and called on the metro administration to urgently address what it described as a self-created governance crisis.

However, Tshwane mayoral spokesperson Samkelo Mgobozi disputed claims that the city’s relationship with the National Treasury had deteriorated or that grant funding was under immediate threat.

Mgobozi said the matter had already been addressed by the municipality in December 2025 and described suggestions of an impending financial collapse as misleading.

“It is important to state upfront that this matter is neither new nor unresolved,” Mgobozi said.

“While the matter may recently have been raised again at Council, it has indeed already been dealt with.”

According to Mgobozi, the metro responded to National Treasury’s correspondence, committed to corrective measures and ongoing quarterly reporting, and subsequently received its Equitable Share allocation in full.

“Attempts to create the impression of an imminent financial crisis or a collapse in relations with National Treasury are therefore inaccurate and misleading,” he said.

Mgobozi said tackling UIFW expenditure and improving consequence management has been a long-standing governance priority for the current administration, particularly in response to repeated findings by the Auditor-General of South Africa over several financial years.

“These are matters repeatedly flagged by the Auditor-General over several financial years and which the current administration has deliberately prioritised as part of restoring institutional credibility, strengthening accountability and improving audit outcomes,” he said.

He added that the UIFW policy has since been approved and implemented following what the metro described as an extensive development and consultation process.

“It is incorrect to suggest it was rushed or reactive,” Mgobozi said.

The metro also maintained that broader financial reforms are already yielding results, including two consecutive funded budgets, improved cash reserves and stronger governance oversight mechanisms.

National Treasury confirmed that it had alerted the Tshwane metro about possible enforcement measures should the municipality fail to adequately address issues relating to UIFW expenditure and consequence management in terms of the Municipal Finance Management Act.

According to National Treasury, the concerns specifically related to the submission of supporting information previously requested from the municipality.

“The National Treasury is in communication with the City of Tshwane in relation to the letter. A decision has not been made on this matter,” it said.

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