Funding committed in June last year to protect several Torres Strait islands in far north Queensland from flooding could be under threat.
The previous Federal Government awarded $5 million under the Regional Development Australia Fund and a further $7 million through other programs to rebuild seawalls.
The Queensland Government matched the funds for the project.
However, Torres Strait Island Mayor Fred Gela says the agreement was not signed, putting the project in doubt and meaning communities may again be exposed to flooding and erosion this wet season.
"Prior to the election we were a bit concerned in relation to the circular that was circulated amongst all organisations that any unspent money, regardless [if] it has been committed, any unspent by the day of the election could be treated as savings by the incoming Government," he said.
Councillor Gela says it means the council has not received any of the $24 million committed to the project by the state and Commonwealth.
He says the project is ready to go but work cannot start until the funding is secured.
"Everything's been hanging and waiting for this $5 million basically to come through the door.
"Because of the level of argy-bargy that's been going on for far too long we're not going to be in a position to actually get any works done prior to the monsoon season, so it's beyond a joke."
Federal MP 'frustrated'
Federal Leichhardt MP Warren Entsch says he is frustrated the council left it until a week before the election to tell him the funding agreement had not been signed.
"They blamed the Torres Strait Regional Authority as the reason why it hadn't been signed over but nevertheless from May 2012 until the election the money had not been signed over and they were concerned that the money was going to be lost," he said.
"Now I was absolutely gobsmacked that it had taken them 18 months for them to tell me that."
Mr Entsch introduced a private member's motion to the Parliament more than two years ago lobbying for the funding.
He says he only recently became aware the money had not been secured and he will continue to lobby for previous commitments to be honoured.
"It's unfortunate that in spite of all of my advice their leaders decided to sign-off with the Labor Government and now we're having to try and sort it out," he said.
"I will do the best I can but I can't do anything at all until the Government, until it's been formed and then we can have a look at it."
© ABC 2013
18:22 EST This year's Northern Territory Budget appears to be a straightforward one, with no real surprises or significant announcements for the bush.