CAPE TOWN, WESTERN CAPE — The decision by National Treasury to withhold the 2026 equitable share funding for 69 municipalities has been welcomed by parliamentary oversight committees, with leaders emphasizing that local governments must urgently rectify severe governance and financial management failures.
Speaking during a virtual media briefing by the governance cluster oversight committees of Parliament, Dr. Zweli Mkhize, Chairperson of the Cooperative Governance and Traditional Affairs Portfolio Committee, stressed that while equitable share transfers are vital for enabling service delivery, the affected municipalities must work expeditiously to meet the Treasury’s conditions.
“The committee welcomes and appreciates the intent behind this decision,” Dr. Mkhize stated. He noted that the withheld funds must be released as soon as possible to prevent further hardships on communities caused by ongoing mismanagement.
National Treasury has indicated that the intervention is not intended to disrupt business or service delivery, as the municipalities have been flagged for recurring problems for a long time. Dr. Mkhize outlined that the challenges prompting the Treasury’s intervention mirror findings from previous audit outcomes and oversight engagements. These systemic failures include unfunded budgets, weak internal controls, procurement irregularities, poor revenue collection, significant water and electricity losses, irregular expenditure, and a lack of sanctions for proven wrongdoing.
Urgent Need for Comprehensive Lifestyle Audits
The parliamentary briefing also addressed broader public service governance, with Jan de Villiers, Chairperson of the Public Service and Administration (PSA) committee, raising concerns about the uneven implementation of lifestyle audits for public servants across the country.
De Villiers highlighted that provinces such as the Western Cape, the Northern Cape, and certain departments in KwaZulu-Natal have adopted robust measures, including utilizing the services of the Special Investigating Unit (SIU). Conversely, other regions rely heavily on internal ethics officers and processes, which often result in superficial lifestyle reviews rather than comprehensive audits.
“For the committee, there is an important distinction between financial disclosure and lifestyle audits,” De Villiers emphasized, calling for a fast-tracked and standardized approach to these audits nationwide.
Disciplinary Backlogs Costing State Millions
Furthermore, the PSA committee expressed serious concern regarding the financial burden of disciplinary backlogs within the public sector. De Villiers pointed to reports indicating that more than 670 public servants remain suspended on full pay, costing the state approximately R800 million annually.
He described this as a major governance and financial issue that places immense pressure on an already stretched national fiscus, diverting critical resources away from essential service delivery. The committee is calling for immediate action to clear the disciplinary backlog and significantly reduce the number of paid suspensions.
Looking ahead, Finance Minister Enoch Godongwana is scheduled to address the media on Friday to provide further clarity on the withholding of the municipalities’ equitable share funds and the path forward for local government compliance.
