Polokwane Muni’s unspent millions returned to fiscus

POLOKWANE – Already facing challenges of inadequate funds to finance vital capital projects, the Polokwane Municipality’s 2020/21 annual report reflects that the local authority could not succeed in spending a conditional grant from government amounting to R76.5m and R57.4m had to be returned to National Treasury, leaving only R19.5m for a roll-over to the current financial year.

The funds that did not meet the requirements for a rollover, comprise R4.6m from the Water Services Infrastructure Grant (WSIG), R22.3m from the Integrated Urban Development Grant and R29.7m from the Public Transport Network Grant.

The reasons for the rollovers being denied were for issues of late appointment of contractors and an absence of proof of commitment like appointment letters for service providers for projects.

The criteria for the rollover of conditional grant funds required that the unspent funds must be allocated to identifiable projects and that there must be proof that contractors or service providers were appointed for the delivery of the projects before the end of March, 2021.

According to a DA councillor in the municipality, Tiny Chidi, this means that projects that were earmarked under these grants, will no longer proceed and raise greater concerns about whether the municipality will be able to remedy the situation.

“The DA is especially concerned about the R4,6m of the WSIG that will be lost while the municipality has a serious water crisis,” Chidi said and added that the denied rollover funds will likely have an effect on Cash Reserves Revenue (CRR) projects as the grant funds have been taken away, and the municipality might divert money from CRR to fund projects affected by the failed rollover.

This will negatively affect the municipality’s ability to carry out crucial services for residents of Polokwane such as procurement of vehicles, road repair projects, maintenance of traffic lights, boreholes, pump stations as well as sewer and water reticulation infrastructure.

According to Chidi, the DA will request the management plans to mitigate the denied rollover of funds, whether it will impact other projects and the municipality’s plans to address the water crisis after surrendering funds during the next Municipal Public Accounts Committee (MPAC) public hearing.

According to the mid-year report tabled in council recently, the total amount that is projected to be unspent and rolled over for the 2021/22 Financial year is a further R47.9m. The amount is from the Regional Bulk Water Infrastructure Grant, WSIG and Neighbourhood Development Partnership Grant.

In response to a request for comment, the municipality’s spokesperson Thipa Selala said that the commitments were delayed due to the Covid-19 pandemic.

“Polokwane was regarded as a hotspot during the beginning of the 2021 calendar year. Further, the Cash Reserves Revenue projects will not be affected as the projects will be aligned to the extent of grant funding only,” Selala explained and added that since the projects were not committed, projects will not be affected as it will be catered into the next financial year.