Masilonyana workers are still waiting for their June salaries after the National Treasury withheld the Theunissen-based municipality’s equitable share allocation.

In a letter to employees, municipal manager Mojalefa Matlole acknowledged the delay and said the administration was trying to resolve the crisis. He told workers salaries would be paid by no later than Wednesday(15/7). 

Where possible, the municipality may release payments earlier as revenue is collected.

National Treasury decided to withhold equitable share funding from 69 municipalities for failing to comply with key provisions of the Municipal Finance Management Act.

In the Free State, the 13 affected municipalities include Mangaung, Mohokare, Xhariep, Masilonyana, Matjhabeng, Dihlabeng and Ngwathe. In North West, Madibeng, Ditsobotla, City of Matlosana, Maquassi Hills and JB Marks are among more than a  dozen affected, while in the Northern Cape the list includes Kamiesberg, Khâi-Ma, Renosterberg, Siyathemba, Kai !Garib and Magareng.

Treasury said the decision followed months of engagement. The municipalities received written notices about their financial management failures and were given a chance to explain why their allocations should not be withheld.

Masilonyana has battled repeated salary delays in recent years. In 2023, workers were paid late in September, October and November. 

At one point, employees received R1,000 food vouchers at a local supermarket after the municipality could not pay salaries.

The municipality’s finances have come under pressure because it spends about R15m a month on salaries while collecting only between R1.8m and R2m in monthly revenue. Its collection rate is estimated at only 20% of rates and taxes.

Financial mismanagement has also affected payments to creditors, including Sars and employee pension funds. Parliament’s standing committee on public accounts (Scopa) previously heard Masilonyana allegedly owes about R75m to third parties, despite deductions having been made from workers’ salaries.

The municipality’s bank accounts have also been attached several times, disrupting cash flow and delaying salaries. Service delivery has also suffered, with some communities reportedly facing long water and electricity outages.

During Scopa proceedings, EFF MP Ntombovuyo Veronica Mente-Nkunaquestioned whether Masilonyana was still functioning as a municipality, saying its salary bill and available cash showed it could not operate properly.

Mayor Dimakatso Modise previously admitted the municipality had been using equitable share funding, meant mainly for basic services, to pay salaries. Matlole told Scopa the municipality decides how to split the equitable share between salaries, Sars, pension funds, Eskom and other creditors whenever the allocation is received.

Masilonyana’s annual salary bill is about R168m, higher than its annual equitable share allocation of R157m. Former CFO Amos Makoae also told Scopa officials had allegedly bypassed the municipality’s financial system for years by processing transactions manually. 

Makoae was later removed after the Free State High Court found his appointment unlawful.

OFM News/Kekeletso Mosebetsi dg

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