KZN wants unspent housing money back
Category Local News
KwaZulu-Natal housing boss Ravi Pillay has reined in municipalities, giving them until today to return all unspent money plus interest - said to be hundreds of millions - from their housing accounts.
The Human Settlements MEC told the Daily News the move was aimed at cleaning up municipal housing coffers in the province.
It was a way to ensure checks and balances on what money was available for housing in the fund, and how it was being spent.
"This is essentially a compliance issue as it will allow the auditor-general to look at the figures and how the money was spent," Pillay, who has been in office since November, said.
"We will also have cases where the money was spent irregularly, and we need to reconcile the books before we can give an accurate figure of the total amount."
He did not estimate how much he expected back from the municipalities.
A circular sent to municipalities last Tuesday read: "The department has embarked on an exercise to clean its housing fund and the all municipal housing operating accounts that are within the municipalities.
"A circular ... has been sent to municipalities recalling all funds that are within the municipalities to be returned to the department before the end of the week.
"The municipalities that are busy implementing development programmes on behalf of the department are expected to put forward business plans and motivations to utilise these funds.
"The MEC is the only person authorised to approve such expenditure... A resolution of council needs to be part of the submission to the department/mec in this regard."
The memo is said to have taken local municipalities by surprise, with one senior housing official who asked not to be named, saying: "The MEC is taking the right approach, as many municipalities have been dipping into the Housing Fund for projects other than housing, in some cases for many years, which is a clear violation of national policy.
"The fund is also often abused by some municipalities as petty cash, running into millions of rands. There has been little control up until now, so well done to the new MEC."
The Daily News has learnt that money in the housing fund has, in many cases, been lying unspent as far back as 2003.
Many projects stalled or failed to start due to a number of reasons, including lack of bulk services, such as roads and electricity, drainage and other infrastructure, skills shortages, legal disputes over land and administrative backlogs.
The DA welcomed the the MEC'S crackdown. "The MEC'S announcement that circulars have been issued in an attempt to have funds released marks a refreshing change, as it is aimed at recalling some R600m in unspent money on housing."
