| (1) | Despite section 17, the National Treasury may, in its discretion or on request of a transferring officer or a receiving officer, stop the transfer of a Schedule 4 or 5 allocation, or a portion thereof, to a province or municipality— |
| (i) | a province, if a serious or persistent material breach of this Act, as envisaged in section 216(2) of the Constitution, occurs; or |
| (aa) | a serious or persistent material breach of this Act, as envisaged in section 216(2) of the Constitution, read with section 38(1)(b)(i) of the Municipal Finance Management Act, occurs; or |
| (bb) | a breach or failure to comply, as envisaged in section 38(1)(b)(ii) of the Municipal Finance Management Act, occurs; |
| (b) | if the National Treasury anticipates that a province or municipality shall substantially underspend on the allocation, or any programme, partially or fully funded by the allocation, in the 2021/22 financial year; or |
| (c) | for purposes of the assignment of a function from a province to a municipality, as envisaged in section 10 of the Municipal Systems Act. |
| (2) | The National Treasury must, before stopping an allocation in terms of subsection (1)(a)(i) or (b)— |
| (a) | comply with the procedures in section 17(4)(a); and |
| (b) | inform the relevant provincial treasury of its intention to stop the allocation. |
| (3) | The National Treasury must, before stopping an allocation in terms of subsection (1)(a)(ii), comply with the applicable provisions of section 38 of the Municipal Finance Management Act. |
| (4) | The National Treasury must give notice in the Gazette of the stopping of an allocation in terms of this section and include in the notice the effective date of, and reason for, the stopping. |
(5)
| (i) | an allocation, or any portion thereof, is stopped in terms of subsection (1)(a) or (b); and |
| (ii) | the relevant transferring officer certifies, in writing, to the National Treasury that the payment of an amount in terms of a statutory or contractual obligation is overdue and the allocation, or a portion thereof, was intended for payment of the amount, |
the National Treasury may, by notice in the Gazette, approve that the allocation, or any portion thereof, be used to pay that amount partially or fully.
| (b) | The utilisation of funds envisaged in this subsection is a direct charge against the National Revenue Fund. |
