Birmingham's devolution experiment faces financial crisis after the city council admitted it had no idea how much was being spent on the 'power-to-the-people' pledge.
It is known the 11 district committees - dubbed mini town halls when they were established two years ago by the former Labour administration - are overspending on management costs by #250,000 a year.
But corporate finance director Brendan Arnold told a scrutiny committee that the council did not, as a matter of course, collect information about the cost of devolution and localisation.
"Rather, it maintains management accounts to ensure that budget holders can be properly held accountable for the monies they are responsible for spending," he said.
"As a result, it is not possible to say what the cost of devolution and local-isation is, not least because the council has always had some element of local management and delivery."
Two years ago, the council said devolution would lead to better local services at no additional cost.
However, Mr Arnold said the notion that offices for the 11 districts could be acquired on a self-funding basis had not proved possible.
The difficulties are likely to get worse given the council's need to meet Government-driven efficiency savings of #150 million over the next three years.
A decision by the Perry Barr District Committee to axe more than #70,000 from an environmental improvement budget and use the money to shore up overspending is the subject of a separate scrutiny inquiry.
Council cabinet member for local services, Coun Jim Whorwood (Lib Dem South Yardley) said: "All the districts have been asked to make savings, a small amount, about two per cent across the board.
"But cutting #70,000 is an awful lot of money and it looks as if the result is going to be dirtier rather than cleaner streets. That is not what we want."
Perry Barr councillor Jon Hunt, a member of the district committee, wants to reduce the management budget by #100,000, leaving more money to spend on improving local services. ..SUPL: