SALGA raises concerns over Treasury’s withholding of LGES funds
The South African Local Government Association (SALGA) has called on the National Treasury to urgently release the withheld equitable share funds
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The South African Local Government Association (SALGA) has called on the National Treasury to urgently release the withheld equitable share funds, saying poor communication and unclear compliance processes have unfairly affected 75 municipalities across the country.
This comes after the Treasury withheld the December 2025 local government equitable share tranche over non-compliance issues, including outstanding budget funding plans, irregularities flagged by the Auditor-General, pension fund submission backlogs, South African Revenue Service compliance problems and unpaid water board debts.
In a media statement, SALGA said it made several attempts to engage the National Treasury to prevent the withholding and help municipalities address compliance issues, but was hampered by a lack of cooperation and clear guidance.
"SALGA has identified significant shortcomings in the process undertaken by the National Treasury. Notably, there was a lack of consistency in communications with the affected municipalities. Treasury's correspondence was often unclear regarding the specific information or documentation required to rectify identified non-compliances."
SALGA said that in several cases, deadlines for submission were not adequately communicated, leaving municipalities uncertain about the time frames for compliance.
"SALGA has called on the National Treasury to immediately release the LGES tranche for all municipalities that have adequately responded and complied with the requirements.
"In addition, SALGA advocates for the establishment of a formal, transparent, and time-bound process within the Division of Revenue Bill (DORA) for the withholding of equitable share allocations. SALGA also recommends that structural engagements be facilitated through Intergovernmental Relations (IGR) platforms to improve coordination and oversight."
SALGA added that it has also urged the National Treasury to apply Section 216(2) of the Constitution and relevant provisions of the Municipal Finance Management Act consistently across all government entities, not just municipalities, to ensure fairness and accountability in addressing non-compliance and financial mismanagement.
"SALGA will continue to liaise with National Treasury to clarify any outstanding requirements for impacted municipalities. The goal is to ensure the timely release of the outstanding Local Government Equitable Share tranche and to safeguard service delivery at the local government level."
mthobisi.nozulela@iol.co.za
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