Parliament’s joint oversight committees have welcomed National Treasury’s announcement that the remaining R7.1-billion in withheld local government equitable share transfers will be released to 49 municipalities on Friday.

The breakthrough follows a critical meeting on Tuesday between Finance Minister Enoch Godongwana and Cooperative Governance and Traditional Affairs Minister Velenkosini Hlabisa regarding Treasury’s recent decision to temporarily freeze R13.5-billion from 69 noncompliant municipalities.

The initial financial freeze severely impacted municipalities across all nine provinces, including the City of Johannesburg, Mangaung, Buffalo City, Nelson Mandela Bay, Madibeng, and Nkomazi.

The Portfolio Committee on Cooperative Governance and Traditional Affairs and the Standing Committees on Public Accounts (Scopa), Finance, and Appropriations strongly commended the departments for taking citizens into account when assessing municipal failures.

During a recent joint meeting, committees directed both departments to ensure that basic service delivery remains uninterrupted throughout the intervention.

Speaking at a media briefing on Tuesday, Godongwana clarified that the release of the funds was strictly conditional.

The intervention aims to safeguard public services while legally forcing the affected municipalities to rectify severe financial weaknesses identified under Section 216(2) of the Constitution.

Portfolio Committee on Cooperative Governance and Traditional Affairs chairperson Dr Zweli Mkhize emphasised that the financial release did not mean local leaders were off the hook.

"Releasing the funds must, however, not suspend accountability or allow responsible officials and office-bearers to escape accountability for their role in governance failures,” said Mkhize.

To ensure long-term compliance, a highly structured monitoring programme will accompany the released funds.

Municipalities face hard reporting and implementation deadlines from September 30 until November 30 to prove they are actively correcting their financial mismanagement.

They need to show measurable progress toward full statutory compliance, conduct thorough internal investigations into financial irregularities and pursue swift disciplinary processes against failing officials.

Municipalities will also need to recover financial losses incurred through mismanagement and institute criminal proceedings where evidence warrants it.

This compliance strategy will be driven by a broad coalition of State institutions, involving the South African Local Government Association, provincial premiers, MECs for finance and cooperative governance, provincial treasuries, and the affected municipalities themselves.

The parliamentary committees also lauded commitments to build stronger early-warning systems and provide targeted, hands-on support to distressed local councils.

A major focus of this turnaround strategy is ending the chronic practice of municipalities passing unfunded budgets.

Scopa chairperson Songezo Zibi noted that National Treasury and the Department of Cooperative Governance and Traditional Affairs would actively assist local governments in stripping out unaffordable, non-essential expenditures to stop “persistent institutional decay”.

Hlabisa confirmed that these interventions were already yielding results, with the number of municipalities operating on unfunded budgets dropping from 113 to about 76.

Looking ahead, Mkhize indicated that Parliament would seek further details on plans to target national and provincial government departments that owed substantial debts to local municipalities, ensuring fiscal discipline was enforced symmetrically across all levels of the State.