SALGA questioned on the passing of unfunded budgets in municipalities during a briefing on the 2018 Division of Revenue Amendment Bill
The Select Committee on Appropriations (SeCOA) expressed serious concern over the increase in municipalities which adopted unfunded budgets which were 113 in the 2018/19 financial year, compared to 83 in the previous year.
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. 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. SALGA was instructed to submit a list of municipalities’ unfunded mandates.
The committee 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.
The committee questioned the effectiveness of district municipalities in supporting and coordinating local municipalities. Salga was asked to express itself on the possibility of doing away with district municipalities if they were not serving the people, and their funding being used to strengthen the local municipalities. Officials said discussions between SALAG and the Department of Cooperative Governance and Traditional Affairs (CoGTA should yield a view on this soon.
Meanwhile, the committee committed itself to consider the final mandates from provinces, as well as the committee report on the 2018 Division of Revenue Amendment Bill on 20 November 2018.
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