Western Cape Government initiates formal action against Central Karoo District and Kannaland
1 July 2021
Despite every effort by both the Provincial Treasury and the Department of Local Government to support both the Central Karoo District Municipality and the Kannaland Municipality to adopt budgets for the new municipal financial year by today (01 July 2021), they have failed to do so.
As such, both municipalities are in breach of the Municipal Financial Management Act, Act No. 56 of 2003, (MFMA) and the provincial government is required to take formal action against both municipalities – which has been initiated today.
In terms of section 139(4) of the Constitution, the Provincial Executive must intervene if a budget is not approved by the start of the new financial year as per the requirements of section 16(1) of the MFMA.
Throughout the period leading to this non-compliance, the Western Cape government has sought to support both municipalities to adhere to the provisions of the MFMA.
Which includes several formal letters from both the provincial Minister of Finance and Economic Opportunities, David Maynier, and the provincial Minister of Local Government, Environmental Affairs and Development Planning, Anton Bredell, to the mayors and speakers of both these municipalities.
A failure to approve the annual budget places sustained service delivery at risk. It also has severe legal consequences. These include the fact that National Treasury may stop the transfer of funds to both municipalities.
The Provincial Executive is also compelled to take immediate measures, which may include, but are not limited to directing the council to consider a budget for approval, dissolving the municipal council, appointing an administrator and approving a temporary budget.
Until such time as a temporary budget is approved by the Provincial Executive, withdrawals from the municipality’s bank accounts may only be done with the provincial Minister of Finance and Economic Opportunities’ prior approval. This has duly been actioned with the bankers of both municipalities today.
On approving the formal action against both municipalities, Minister David Maynier, said: “Unfortunately, the persistent delay in tabling and adopting the 2021/22 annual budget does not reflect well on both municipalities and their leadership. I have repeatedly stressed the importance of maintaining the basic tenets of good governance and their duties to the respective Mayors. Furthermore, Provincial Treasury has done everything possible to support both municipalities to avoid this outcome. As a result of the governance failures by these municipalities we will now take the formal action required of us by the Constitution and the MFMA to secure the continued delivery of services to residents of these municipalities.”
Minister Anton Bredell said: “It is regrettable that political impasses in the municipal councils of both these municipalities have led to this budgetary non-compliance. The speakers of both municipalities have repeatedly convened council meetings to facilitate the approval of the budgets and each time political impasses have led to a breakdown in good governance.”
Statement issued by David Maynier, Western Cape Minister of Finance and Economic Opportunities, 1 July 2021
