The KwaZulu-Natal Finance MEC Francois Rodgers is considering recommending to national Finance Minister Enoch Godongwana that Section 216(2) of the Constitution be invoked against some KZN municipalities for persistent failure to comply with financial management prescripts. 

This follows a letter from Rodgers to Godongwana on the state of municipalities in KZN. This process may result in the stoppage of financial transfers to identified municipalities pending the resolution of financial mismanagement matters. 

“This is against the backdrop of the recently finalised fourth quarter review of the 2024/25 consolidated municipal budgets performance report. Municipalities are the closest sphere of government to citizens. They are key to service delivery. Failure to comply with financial management prescripts does not bode well for the agenda of developing an ethical and capable state,” Rodgers said. 

In the third quarter, debt owed to municipalities in KZN stood at R64.3 billion. This increased to R67.1 billion in the fourth quarter, a R2.8 billion increase, which is unsustainable.

“It is alarming that R56.6 billion in the total figure owed to municipalities is debt exceeding 90 days,” highlighted Rodgers. 

Over the same period, money owed by municipalities increased from R7.4 billion to R9.3 billion – an increase of 25.5%, which Rodgers said was a concern.

He also noted with concern that R6 billion, or 64.3 % of the debt owed by municipalities, was outstanding for more than 30 days, in contravention of the Municipal Finance Management Act (MFMA).

Furthermore, the number of municipalities with one or more serious financial management challenges increased from 17 in quarter three to 20 in quarter four. 

Rodgers said there were serious financial problems, as outlined in Sections 138 and 140 of the MFMA, including failure to comply with Supply Chain Management (SCM), debt collection, and credit management prescripts. 

Rodgers said that KZN Treasury provides technical guidance and support to municipalities in the implementation of their SCM policies as well as standard operating procedures. 

“We also induct and train critical units like disciplinary boards. Unfortunately, in one municipality, it was difficult to secure cooperation from officials, and we have had to reallocate resources elsewhere.” 

Rodgers said that consequence management and accountability (CMA) is intended to support corrective action in respect of transgressions of the laws or rules applicable to municipalities and municipal entities. 

“Municipal councils need to demonstrate strong leadership in the implementation of CMA. We urge municipalities to demonstrate a keenness to deal with errant officials as part of efforts to improve service delivery,” he added. 

Rodgers indicated his willingness to invoke Section 216(2) of the Constitution and stop all financial transfers to municipalities that have failed to implement unauthorised, irregular, fruitless, and wasteful expenditure prevention and reduction strategies by August 31, 2025. 

zainul.dawood@inl.co.za

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