Most households from rural areas did not have access to basic municipal services prior to the advent of democracy in 1994. The most affected were those from the former homelands and deep rural areas from the former South Africa. Hence, since 1994, the South African government has inherited huge infrastructure backlogs which affect effective delivery of basic municipal services, particularly Free Basic Services (FBS), to alleviate the plight of the rural and poor communities. Municipalities have to be self-sustainable for effective service delivery, even though their revenue base is such that they cannot generate enough income to maintain, extend and sustain basic services. Yet, they are mandated by the Constitution of the Republic of South Africa, 1996 to deliver services to all communities within their areas of jurisdiction, irrespective of whether the beneficiaries of the services contribute to their revenue. For this reason, the national government has committed in the Constitution to allocate funding to municipalities through the equitable share allocations to subsidise the costs of providing FBS to indigent households. However, the impact of the FBS programme on indigent households in the Polokwane Local Municipality has not been significant, given the effective management of the programme. Hence, this study was conducted at the Polokwane Local Municipality to establish the effectiveness of the management of the funding allocated for the provision of FBS. The primary aim of the study was to determine the extent to which the Polokwane Local Municipality effectively manages the provision of FBS and the related funding to establish deficiencies in the system, with a view to improve the effectiveness of FBS delivery to indigent households. The data comprised responses to a questionnaire, semi-structured interviews, documents and studies conducted at the Polokwane Local Municipality. The study highlighted that the Polokwane Local Municipality has developed an indigent policy for the implementation of the FBS programme; however, it is only applied in urban or established areas, thus only covering Polokwane city, Seshego and Westernburg out of a possible 265 settlements. Proper planning is also only done around these three areas, while estimations are made for rural areas or villages in terms of targeted households and budgets. Furthermore, National Treasury provided more than three times the funding budgeted by the municipality to fund the FBS programme. This suggests that the rest of the funds allocated for FBS delivery were used for municipal operations rather than for benefitting indigent households. Therefore, it can be concluded that the Polokwane Local Municipality does not manage the funding allocated for FBS effectively, given the limitations in the registration of indigent households as well as the planning, budgeting and implementation of the FBS programme. Finally, the study could not establish whether the municipality is making any impact on the lives of the indigent households as the municipality has not assessed the impact of the FBS programme on the indigent households since the inception of the programme in 2000. The study will enable the development of proposals and recommendations which can assist in improving the effectiveness of the Polokwane Local Municipality’s management of funding allocated for the provision of FBS. / Public Administration and Management / M. Admin. (Public Administration)