Van Zyl, H.Khawe, Nthabeleng Dorcas2023-09-292023-09-292020http://hdl.handle.net/11660/12245Dissertation (MBA (Business Administration))--University of the Free State, 2020The financial sustainability of local authorities in the Free State has deteriorated gradually, primarily due to structural difficulties and the failure of municipalities to raise and/or produce their own revenues. The subject and aim of this study was to evaluate the delivery of basic services based on the allocated equitable share model for Free State municipalities. A quantitative format for the research process was ideally suited to attain the research objective. The analysis was done using questionnaires. The sample was chosen purposefully and included officials with expertise in financial management and those who frequently deal with municipal finances. With most respondents suggesting that the components of the equitable share formula are no longer applicable to current prevailing circumstances, an alteration to the formula is undeniably needed. The respondents further agreed that basic services as well as institutional support were not adequately apportioned for in the formula. In order to add gravity to the claim that the formula needs to be reviewed, the respondents firmly agreed that the existing data used to determine the formula is irrelevant. It was concerning to note that the current infrastructure was not being maintained and that the 8-10% of the budget earmarked for this maintenance was not being utilised. This means that the current infrastructure will deteriorate even more and will further impede the rate at which service is delivered to those who need it most. Also concerning was that the collection of property rates was not above 60% of the amount billed; therefore, the collection efforts of the municipalities were not effective. The respondents alluded to the fact that credit control mechanisms were not implemented, which further impedes the ability to collect revenue. The indigent registers were also not updated regularly. With the current global economic crunch, municipalities face the real threat of a significant increase in indigent households. This is further exacerbated by the unemployment rates currently faced by the province. Another concern is that respondents are not of the opinion that the current budget allows the municipality to implement at least 70% of the budget for the Integrated Development Programme. This will result in poor performance by the municipalities and will compromise their ability to fulfil the undertakings made to their respective communities. It has been concluded that the different components of the equitable share formula should be reviewed as a matter of urgency. Of significance and urgency are the following components: ? the basic services component that is meant to assist local authorities to provide basic services to the poor, as the indigent net has widened substantially since this component was last reviewed; and ? the component meant to assist with the operations of basic municipal government because the legislative and policy frameworks for municipal environments have significantly evolved since the formula was last reviewed. The current Local Government Equitable Share formulation design needs revision to determine its suitability and significance for the current municipal climate and conditions so as to enable the Free State municipalities to better their provision of basic services to their communities.enDelivery of basic servicesEquitable Share formulaFree State municipalitiesrevenue distributionbasic services grantunconditional grantsProtests Free State provinceDissertationUniversity of the Free State