Malusi Gigaba warns on councils’ underspent budgets
Unspent funds cause a ripple effect of maintenance-related problems
Finance Minister Malusi Gigaba painted a bleak picture of under-spending by municipalities, which he said last week stood at R53.1bn in June 2017. This means funds allocated for infrastructure and other projects are not spent, causing a ripple effect of maintenance-related problems. Underspending worsened 20.8% from R42.7bn for the corresponding period in the previous year. This is compounded by the fact that municipalities are struggling to pay Eskom and water boards for supplying power and water. Along with a letter to National Assembly Speaker Baleka Mbete on the extent of underspending, Gigaba provided a complete report on over-and underspending of municipalities as at July 30 2017. Underspending could be attributed to liquidity challenges emanating from the adoption of unrealistic budgets, poor expenditure management and delays in paying creditors, the minister said. "It should be noted that the underspending of budgets does not translate into an equivalent amount of cash in th...