Friday , March 31 2023

Concerns about the increase in the number of municipalities that adopt unfunded budgets


Parliament's Selected Loan Committee (SeCOA) has expressed serious concerns about the increase in the number of municipalities that have adopted unfinished budgets for the financial year 2018/2019.

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

According to the committee, the Local Government Association of South Africa (Salga) was asked to explain, among other things, why municipalities continue to pass unfinished budgets without taking into account the Municipal Finance Management Act.

"The Briefing Committee on Loans, Salga officials have said that the reason for passing unfinished budgets is complex and has a number of contributing factors," the statement said.

"One of these is the task for municipalities to finance projects for which they have not budgeted. However, municipalities are often encouraged not to lend unfunded budgets."

The Committee asked Salga to submit a list of municipalities' non-funded mandates.

SeCOA also questioned Salga's actions to ensure that counselors are trained to understand Section 71 of the Municipal Finance Management Act, the 2003 Statements of Expenditure Reports published by the National Treasury.

"Officials told the committee that Salga has an established management institute that offers various training and counseling training."

"Salga also has agreements with various higher education institutions that will equip counselors with the skills they need to meet the challenges they face."

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