Treasury: AG recovered R460m in outstanding debt from municipalities

CAPE TOWN - National Treasury said the auditor-general has managed to recover R460 million in outstanding debt from the country’s municipalities, which failed to pay for their services.

The settlements come after the National Treasury wrote to the country’s 257 municipalities, warning them that they risked losing their equitable share funding for basic services should they fail to pay.

National Treasury and the AG briefed Parliament’s Standing Committee on the auditor-general on the entity’s current funding model.

National Treasury said there was merit in the auditor-general continuing with its current funding model, where auditees pay for their services.

National Treasury accountant-general, Shabeer Khan, said this ensured the office’s financial independence.

He said municipalities that owed the AG millions in outstanding debt had paid up, after notifying them of their intention to impose section 216 (2) of the Constitution and withhold equitable share funds.

As of 31 July, the total outstanding debt to the auditor-general stood at R1.83 billion.

"We’ve seen with this initiative already in the month of December that message has already seen municipalities paying the auditor-general in the tune of R460 million."

But the committee called for a different approach to withholding municipalities' equitable share, warning that this would be detrimental to service delivery.