The African National Congress (ANC) in the Western Cape confirmed that a R1 million donation from businessman Iqbal Survé had been spent.
The party said the money was distributed to various regions before an order for the funds to be returned.
The Provincial Working Committee suspended Maurencia Gillion, the treasurer of the ANC in the Western Cape, pending an investigation into the matter.
ANC Western Cape spokesperson Lionel Adendorf said on Thursday Gillion defied instruction from provincial leadership.
He said once the donation was accepted, it was distributed to regions.
Adendorf added the party needed an explanation as to why the money was not returned.
He said Gillion’s suspension wouldn’t affect any parliamentary list.
Earlier in May, the ANC in the Western Cape announced it had decided to return the donation.
Survé, who is the chairperson of Sekunjalo Group, reportedly gave the party R1 million to help in its election campaign.
ANC acting provincial chair Khaya Magaxa said the party had decided to avoid being associated with “questionable funders”.