Newcastle Municipality has been named as one of eight KwaZulu-Natal municipalities earmarked for intensive provincial intervention as Treasury moves to tackle rising unauthorised, irregular, fruitless and wasteful expenditure across the province.
The intervention follows confirmation from KZN Finance MEC Francois Rodgers that R6.5 million has been allocated to strengthen municipal oversight, supply chain management controls and financial governance.
The move comes as unauthorised, irregular, fruitless and wasteful expenditure across KwaZulu-Natal municipalities has climbed from R13.478 billion in June 2024 to R15.712 billion in June 2025.
According to figures presented by MEC Rodgers, ten municipalities account for the bulk of this amount, collectively contributing R11.490 billion.
Speaking on Tuesday, 9 June 2026, Rodgers said the R6.5 million had been allocated to the Provincial Supply Chain Management unit within the KwaZulu-Natal Department of Provincial Treasury to strengthen oversight mechanisms across municipalities.
A further R6 million has been redirected to the Provincial Accountant-General’s office to support its ongoing oversight work with the Department of Education.
Explaining the source of the funding, MEC Rodgers said:
“This forms part of the R17 million in savings realised within my Ministry during the 2025/26 financial year, reflecting our continued commitment to redirecting resources towards improving financial governance, fighting corruption, and enforcing compliance with the MFMA.”
The R6.5 million municipal intervention fund will focus on weaknesses in financial management, with particular emphasis on reducing unauthorised, irregular, fruitless and wasteful expenditure, improving supply chain management controls, strengthening contract management, and building technical capacity within municipalities.
“The continued rise in irregular and wasteful expenditure is unacceptable and undermines service delivery. Through these targeted interventions, we are strengthening oversight, closing governance gaps, and ensuring that municipalities comply fully with the MFMA,” said Rodgers.
While ten municipalities were identified as contributing most heavily to the province’s irregular expenditure problem, Rodgers explained that two of them, eThekwini and uMsunduzi, are already receiving assistance directly from National Treasury.
As a result, provincial support will be directed at the remaining eight municipalities.
“The municipalities expected to benefit are uMkhanyakude District Municipality, Mtubatuba Local Municipality, uThukela District Municipality, AbaQulusi Local Municipality, uMzinyathi District Municipality, Mpofana Local Municipality, Newcastle Local Municipality, and Zululand District Municipality,” said Rodgers.
He further added that the remaining R4.5 million from the internal savings would be allocated towards the implementation of the Provincial Financial Recovery Plan.
The latest intervention also aligns with the KwaZulu-Natal Department of Treasury’s KZN Consolidated Municipal Budgets Performance Report for the third quarter, published at the end of March 2026. In that report, Treasury noted that 20 municipalities in the province had met the criteria for severe financial distress based on their performance towards the end of the third quarter of the 2025/26 financial year.
Zooming in on a local front, according to the Treasury report, Newcastle recorded an outstanding creditor balance of R540.3 million for bulk electricity older than 90 days.
Rodgers also confirmed that the municipality’s overall electricity debt stood at R752 million at the end of March 2026.
The report further showed that, of the province’s R2.7 billion outstanding bulk water creditor balance, Newcastle Municipality owed R256.9 million.
Treasury noted that Newcastle has a payment arrangement with uThukela Water (Proprietary) Limited, which is currently being honoured. However, the department also recorded the municipality’s explanation for its unpaid creditor balances.
“The municipality indicated that the bulk of the Creditors outstanding as at 31 March 2026, that are in the over 90 days’ category, are due to the financial constraints facing the municipality,” stated Treasury.
Reflecting on the broader reform programme, MEC Rodgers said;
“These interventions build on our reform-driven approach, including the decision in the 2024/25 financial year to reinvest savings from my Ministry into the development of a digital procurement system aimed at reducing opportunities for fraud and corruption within supply chain processes.”
Following the announcement, Newcastillian News submitted a formal media enquiry to Newcastle Municipality on Tuesday morning, 9 June 2026.
The publication requested clarity on Newcastle’s current standalone unauthorised, irregular, fruitless and wasteful expenditure figures, as well as the primary structural causes behind the municipality’s financial distress.
Newcastillian News also asked whether the municipality had been formally engaged by Provincial Treasury regarding the R6.5 million support package, what measurable actions would be enforced under the new compliance process, and whether any officials were currently facing internal disciplinary action or criminal investigation linked to irregular expenditure.
The enquiry further asked municipal leadership to explain how the planned provincial oversight would translate into measurable improvements in basic service delivery for residents, and what internal steps had already been taken to ensure compliance with the Municipal Finance Management Act.
By the close of the stated deadline on Tuesday, 9 June 2026, Newcastle Municipality had not provided a written response to the questions submitted by Newcastillian News.
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2 Responses
I wrote several letters to KZN Cogta, KZN Department of Treasury, AGSA, etc Proved to be a futile exercise, Newcastle Municipality is technically bankrupt considering the debt over R2,1b
The budget supposedly passed by Council is defective and irregular in many areas as it does not conform to the Constitution and MFMA.
Now we have a case of sitting with an unfunded budget of R380m which National Treasury would decline.
No special council meeting held to consider public submissions. The budget roads shows costing millions can be viewed as fruitless expenditure due to the transgressions of the MFMA etc
Just to add, having dealt with matters of governance and the financial situation of Newcastle, the blame’s lies my opinion with KZN Treasury (those many final warning letters to Council where meaningless) as the got deeper into debt; UIF expenditure worst ever in the history of the municipality, the information in budget booklet meaningless as most the important does not talk to the IDP and needs of the wards, the AGSA office is capture I have written letters to them regarding certain matters which they conveniently evaded, a Chapter 9 institution captured, Cogta and Treasury play a game of political football passing the buck to each department. Eskom fails to act decisively with the debt of municipality which stands at about R800m, any business collects its debts in good time, Eskom has led to financial demise of the municipality.
Disaster awaits the new council with debt over R2,1b leaving the other creditors. Cry our beloved town