North West Treasury Enforces Section 32 MFMA Compliance on Municipal UIFWE

Posted 28 October 2026 Written by Acts Online
Category Municipal Law

Brought to you by SAnews: The North West Provincial Treasury, in coordination with the Department of Cooperative Governance and Traditional Affairs (COGTA) and the South African Local Government Association (SALGA), has intensified enforcement measures across provincial municipalities to address historical unauthorised, irregular, fruitless, and wasteful expenditure (UIFWE).

Under Section 32 of the Local Government: Municipal Finance Management Act, No. 56 of 2003 (MFMA), municipalities are legally required to investigate all instances of UIFWE, determine liability, recover losses where applicable, and apply formal consequence management. Municipal councils and Municipal Public Accounts Committees (MPACs) must ensure that expenditure write-offs are lawful, properly evidenced, and strictly separated from irregular transactions that warrant cost-recovery proceedings or disciplinary action.

The provincial interventions focus on preventing statutory breaches that trigger Section 216(2) of the Constitution of the Republic of South Africa, 1996. Section 216(2) empowers the National Treasury to stop transfers—specifically municipal equitable-share allocations—to an organ of state that commits serious or persistent material breaches of expenditure control and transparency standards.

Key Compliance Mandates for Municipalities

Municipal administrations must implement the following corrective steps ahead of the December 2026 equitable-share allocation tranche:

  • Provide verifiable documentary evidence demonstrating measurable reductions in historical UIFWE registers;
  • Ensure all proposed expenditure write-offs comply with MFMA evidentiary standards before submission to municipal councils;
  • Enforce consequence management against implicated officials, including civil recovery processes and internal misconduct disciplinary steps;
  • Ensure MPAC oversight processes actively scrutinise internal control failures rather than routinely endorsing write-offs; and
  • Establish structured handover files of all outstanding UIFWE matters from outgoing MPAC members and municipal committees to ensure continuity of financial oversight.

National Treasury retains the statutory authority to withhold the December 2026 equitable-share tranche from any non-compliant municipality that fails to implement substantiated corrective measures.

What this means for you, your business, or your clients

  • For yourself: Municipal accounting officers, chief financial officers, and compliance advisors must ensure Section 32 investigation registers are fully reconciled, backed by audit-grade documentary proof, and tabled formally before MPAC structures without delay.
  • For your business: Audit and legal advisory firms operating in local government must audit client UIFWE registers, test write-off resolutions against MFMA regulations, and prepare Section 32 recovery dockets to avert statutory transfer stops.
  • For your clients: Contractors and municipal suppliers must evaluate liquidity exposure, as municipalities facing potential Section 216(2) equitable-share withholding by National Treasury are at severe risk of payment moratoriums and settlement delays.

Originally published at https://www.sanews.gov.za/south-africa/north-west-steps-efforts-address-municipal-financial-irregularities

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