The Provincial and National Treasury had a workshop with the council of the City of Matlosana Local Municipality to discuss the draft Mandatory Financial Recovery Plan (FRP) for the municipality on Wednesday, 06 August 2025.
The meetings and consultations on the draft FRP with the municipal management, organised labour, creditors and council started on Monday, 04 August 2025.
The planned mandatory financial intervention by the Provincial Treasury is viewed as a critical step toward restoring financial and service delivery stability in the City of Matlosana.
The municipality is expected to adhere to the set spending limits, revenue raising measures, and budget parameters. To align the performance agreement of senior managers with FRP objectives and adjustment of the 2025/26 budget to align with FRP budget parameters.
The municipality is also expected to submit monthly reports to the MEC in terms of Section 146 MFMA. To have quarterly assessments by the MEC on the effectiveness of the intervention in accordance with section 147 of the MFMA and establishment of quarterly assessment war room meetings and political oversight committees for monitoring and oversight.
This followed the assistance provided by the North West Provincial Treasury to the municipality in December 2023, when a Voluntary Financial Recovery Plan (FRP) was developed in accordance with Section 154 of the Constitution and Section 142 of the Municipal Finance Management Act No 56 of 2003 (MFMA).
Amongst other challenges faced by the Voluntary Financial Recovery Plan (FRP), was a “precautionary suspension of the Municipal Manager Lesego Seametso and the arrest of the Chief Financial Officer (CFO) Mercy Phetla, who is accused of corruption and fraud – that created instability in the municipality’s administration.”
Speaking to City Report on the basis of anonymity, a municipal official accused the municipality of failing to implement proposed strategies and measures necessary to restore its financial health and improve service delivery. Compromised institutional integrity due to serious allegations levelled against senior managers and political office bearers and inadequate or ineffective consequence management.
“These people failed to follow advice and implement strategies given by the official from the provincial treasury, because they want to continue to loot and destroy our municipality.”
The municipality that has been running on an unfunded budget, has an outdated organisational structure that is not aligned with its powers and functions. Its unsustainable debts owed to Eskom and Midvaal Water Company and nun adherence to the payment plants has also sabotaged the voluntary financial FRP.
The municipality had high distribution losses of 43% for electricity and 59% for water have resulted in the municipality’s inability to service its bulk accounts, with outstanding debts amounting to R2.5 billion to Eskom and R2.2 billion to Midvaal Water Company as at 28 February 2025.
It has also failed to comply with its supply chain management (SCM) policies and regulations resulting in irregular expenditure of R3.0 billion in 2022/23 and R3.3 billion in 2023/24.
City Report understands that in September 2024, the North West PEC resolved to intervene in terms of Section 139(5)(a)and(c) of the Constitution and placed the municipality under a Mandatory Intervention.
The draft FRP will soon be published in local newspapers for 14 days for public input before final approval and implementation.
The Democratic Alliance (DA) in Matlosana said the intervention comes after years of financial mismanagement, unfunded budgets, and the municipality’s failure to meet its financial obligations — all of which have crippled service delivery and damaged public trust.
The party said this plan is long overdue and essential to prevent further decline.
“It will enable stronger financial oversight, improve controls, and ensure that municipal spending aligns with service delivery priorities. It will also help curb waste and corruption through tighter monitoring of expenditure.
“The DA views this intervention as a win for the people of Matlosana, who deserve a municipality that is financially accountable and service oriented. It is vital that the process remains transparent and that the public is kept informed throughout. The DA will continue to monitor the process to ensure the community’s interests are prioritised every step of the way.”
