Deputy Finance Minister David Masondo has expressed serious concern about R96 billion in underspending by municipalities while communities were battling to get service delivery.
Masondo told the National Council of Provinces on Tuesday that it was a matter of concern to them when there was R96bn that was underspent by municipalities by the end of June this year.
"It's not acceptable that you have under-expenditure in this sphere of government when our people need our services. We stand on shaky moral ground on underspending if we are not able to deal with the things that we need to deal with," said Masondo.
But Minister of Cooperative Governance and Traditional Affairs Nkosazana Dlamini Zuma said most of the underspending was on infrastructure.
Some of the small, struggling municipalities do not have the expertise to fix infrastructure, she said.
"Because the municipality is so small it cannot put a proper plan on infrastructure. In the end it can't spend on the Municipal Infrastructure Grant," said Dlamini Zuma.
"The money is there but if the expertise are not there it is sometimes difficult. We must look at the totality of the challenges," she said.
Masondo also said that there were discussions on the funding formula of municipalities.
This was after Dlamini Zuma and the South African Local Government Association said the funding formula of municipalities needs to change.
Masondo said in the last budget forum they agreed there should be a lekgotla on this issue.
"One issue we should look at is why municipalities are not collecting what is owed to them. I am advised municipalities are owed over R101 billion," said Masondo in reference to the municipal debt now sitting at R127.7bn.
He said they were owed a lot of money.
He called on municipalities to start collecting billions owed to them before they could look at the funding formula.
"We can work on the formula but if we don't collect what is due to us we won't be able to assist that sphere to be financially viable" said Masondo.
Political Bureau