1. a) According to National Treasury’s records, 14 municipalities currently have funds invested with the Venda Building Society (VBS) Mutual Bank
b) Please see below list of municipalities and investment amounts currently held by VBS Mutual Bank.
Name of municipality |
Amount |
Merafong City Local Municipality |
R50 000 000 |
West Rand District Municipality |
R81 676 155 |
Makhado Local Municipality |
R61 694 081 |
Greater Giyani Local Municipality |
R159 262 692 |
Collins Chabane Local Municipality |
R121 824 657 |
Elias Motsoaledi Local Municipality |
R54 973 |
Vhembe District Municipality |
R300 000 000 |
Ephraim Mogale Local Municipality |
R83 428 490 |
Tubatse Fetakgomo Local Municipality |
R240 649 836 |
Lepelle-Nkumpi Local Municipality |
R153 321 224 |
Madibeng Local Municipality |
R31 035 191 |
Mafikeng Local Municipality |
R82 191 000 |
Moretele Local Municipality |
R50 000 000 |
Dr Ruth Segomotsi Mompati District Municipality |
R150 000 000 |
2. According to National Treasury records, there were no municipalities that closed their accounts with VBS Mutual Bank, however the following 4 municipalities’ investments matured and there was no re-investments of the funds.
a) Polokwane Local Municipality
b) Capricorn District Municipality
c) Makhuduthamaga Local Municipality
d) Dr JS Moroka Local Municipality
3. National Treasury had communicated with 7 municipalities that were identified through the in-year reporting system that had invested funds with VBS Mutual Bank in August 2017. The communication drew municipalities’ attention to section 7(3)(b) of the MFMA, which states that a municipality may not open a bank account with an institution not registered as a bank in terms of the Banks Act 94 of 1990; read with the Municipal Investment Regulations, which regulate the instruments within which municipalities are allowed to invest municipal funds. The National Treasury also held a meeting with the municipalities listed above on 22 March 2018 with the aim of establishing the extent of their investments and confirming the amounts still invested with VBS Mutual Bank at the time when the SARB intervened.
It should be noted that in terms of the MFMA, read together with the Municipal Regulations on Financial Misconduct Procedures and Criminal Proceedings, council must, through the disciplinary board, investigate all acts of non-compliance with the MFMA and its Regulations, to establish whether an act of financial misconduct was committed by any of the municipal officials. It is therefore the municipal council that must ensure that the conduct of the Accounting Officer, the Chief Financial Officer and any other relevant officials of the effected municipalities is investigated to ascertain whether financial misconduct was committed and based on that, institute further action, including disciplinary action. National Treasury will continue to monitor the corrective action implemented in this regard.