UNCOOPERATIVE GOVERNANCE: Plan to write off R23bn is illegal, Treasury tells Nelson Mandela Bay

{JSON.stringify(article.attachments[0], null, 2)} --> The National Treasury says Nelson Mandela Bay’s proposed R23bn write-off is unlawful because the Municipal Public Accounts Committee failed to investigate the expenditure item by item, while an affidavit prepared by the acting city manager, Lonwabo Ngoqo, is legally defective.

The National Treasury has made no bones about the unlawfulness of the manner in which Nelson Mandela Bay (NMB) metro is trying to write off R23-billion in unauthorised, irregular, fruitless and wasteful expenditure (UIFWE).

I n response to questions from the Daily Maverick, the Treasury said that if the council approves the staggering R23-billion write-off without following proper procedures, officials will be required to provide evidence of the processes undertaken by 31 October.

T his comes after NMB’s Municipal Public Accounts Committee (MPAC) earlier this month recommended writing off R23-billion in UIFWE without the requisite item-by-item investigation required by the Municipal Finance Management Act (MFMA).

The Treasury said this would mean that the municipality’s process is not aligned with the requirements of section 32 of the MFMA, and that a council resolution supporting the MPAC recommendation would be unlawful.

Section 32 of the MFMA requires a municipality to recover UIFWE from the person liable for it, unless a council committee has investigated the expenditure, found it to be irrecoverable and recommended that it be written off.

The Treasury said the metro has to submit quarterly reports and supporting evidence for the write-off.

“They must also demonstrate achievement of the applicable UIFWE processing and reduction requirements. Additionally, by 31 October, affected municipalities must demonstrate processing of outstanding matters as at 30 June 2026 through the required legal processes. What will be important is for municipalities to ensure that all processes are compliant with the relevant provisions in the MFMA.”

In a letter to the National Treasury, the acting city manager, Lonwabo Ngoqo, communicated MPAC’s decision and attached an unsigned affidavit aimed at opening a police investigation into the UIFWE.

However, the Treasury was not impressed with the steps undertaken by MPAC.

In a letter to the City dated 19 August, the Treasury’s deputy director-general for intergovernmental relations, Ogalaletseng Gaarekwe, said an item-by-item assessment means that UIFWE recoverability must be considered at the level at which it was actually incurred.

“It does not mean a single assessment for an entire financial year, directorate, contract or aggregated register balance.