Councils use build grant cash to meet salary bill

Broke municipalities are dipping into their infrastructure grant funds to pay salaries, a concern for the South African Local Government Association (Salga) and the Department of Co-operative Governance and Traditional Affairs.

The misuse of infrastructure grants is expected to get worse as the Department of Water and Sanitation is increasingly passing on the refurbishment and maintenance of water infrastructure to councils.

Salga has introduced a “differentiated approach” to review municipalities on a case-bycase basis to assess the extent to which they are financially distressed and how the organisation can help them get their books in order as well as balance their obligations to spend their infrastructure grants in appropriate ways.

MPs on the standing committee on appropriations and the select committee on appropriations recently got an alarming insight into the competing priorities for funding at provincial and local government level.

The Department of Co-operative Governance and Traditional Affairs and the Rural Health Advocacy Project warn that the situation at some municipalities not only undermines service delivery but puts managementlevel jobs at risk.

Department deputy directorgeneral Tebogo Motlashuping said: “Municipalities are not spending the [infrastructure grant] ... money for their intended purposes .... In the end, residents and ratepayers suffer.”

The department had tried to intervene by diverting funds to district municipalities, withholding the equitable share or transferring the money to the Municipal Infrastructure Support Agent. Despite this, Motlashuping conceded that “we have still not seen the desired result”.

In 2015, the Treasury raised eyebrows when it withheld funds from 50 councils because they owed money to Eskom.