The Democratic Aliance (DA) in the City of Matlosana Local Municipality has criticized the adoption of the Matlosana’s 2025/26 Adjustment Budget, claiming it fails to address the fundamental problem that the original budget was unfunded. On Thursday, 04 March 2025, the DA Caucus Leader, Gerhard Strydom said the budget is meant to correct financial deviations, not compound financial risk. The budget was adopted by the municipal council that the African National Congress (ANC) is leading as a majority party. Strydom argued that an unfunded budget cannot simply be “adjusted” into compliance.
An attempt to fix an unfunded budget by increasing expenditure—without a corresponding, guaranteed increase in cash flow—violates the principle that budgets must be funded.
Strydom reminded the council of the Municipal Finance Management Act (MFMA) Section 18 that requires that all expenditure be backed by realistically anticipated revenue to be collected. He claimed that the council failed to demonstrate how the additional revenue will be realised, nor how the increased expenditure will be sustained without further compromising cash flow, creditor payments, and service delivery.
“The adjustment budget fails to address the fundamental problem that the original budget was unfunded. While operating revenue has adjusted upward by R157.67 million, operating expenditure budget has increased by R341 million, resulting in a net deterioration of R183.33 million.”
“This adjustment deepens the operating deficit instead of correcting it.
“Increasing spending without matching income undermines financial sustainability and increases the risk of cash flow shortages, late payments to creditors, further adverse audit findings, and service delivery collapse,” said Strydom.
