Concerns raised around increase in municipalities adopting unfunded budgets

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Parliament. (Duncan Alfreds, News24)
Parliament. (Duncan Alfreds, News24)

Parliament's Select Committee on Appropriations (SeCOA) has expressed serious concerns over the increase in municipalities that adopted unfunded budgets for the 2018/2019 financial year.

In a statement issued on Saturday, the SeCOA said that 113 municipalities adopted unfunded budgets in the 2018/2019 financial year, compared to 83 in the previous year.

According to the committee, the South African Local Government Association (Salga) was asked to explain, among other things, why municipalities are continuously passing unfunded budgets without consideration of the Municipal Finance Management Act. 

"Briefing the Select Committee on Appropriations, Salga officials said the reason for passing unfunded budgets are complex and has a number of contributing factors," the statement read.

"One of these are the burdens placed on municipalities to fund projects which they have not budgeted for. Despite this, municipalities are often encouraged not to pass unfunded budgets."

The committee asked Salga to submit a list of municipalities’ unfunded mandates. 

The SeCOA also questioned the actions taken by Salga to ensure that councillors are trained to understand section 71 of the Municipal Finance Management Act, 2003 reports of expenditure as published by the National Treasury.

"Officials told the committee that Salga has an established leadership institute which provides various training and capacity building courses to councillors."

"Salga has also entered into agreements with various institutions of higher learning which will equip councillors with the skills to respond to the challenges they are faced with."

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