Grocott’s Mail broke the bad news to readers, in mid-April, about the municipality's R57.7m underspending shock – they still had 80% of the capital expenditure and conditional grant budgets left to spend, half-way through the financial year.
Grocott’s Mail broke the bad news to readers, in mid-April, about the municipality's R57.7m underspending shock – they still had 80% of the capital expenditure and conditional grant budgets left to spend, half-way through the financial year.
It looked like the money Makana had been allocated for crucial infrastructure was about to go down the drain, because the National Treasury reclaims unspent funds. On 3 May ("Red faces, red tape") we reported on issues at play behind the underspending, as explained by Chief Financial Officer, Jackson Ngcelwane in a Budget, Treasury and Integrated Development Plan Portfolio Committee meeting.
Councillors there expressed alarm that the money was sitting idle while there were urgent needs to be addressed. Now Municipal Manager Ntombi Baart says plans are in place to spend – or at least preserve – all the grant and capital budget funds in the 2010/2011 municipal budget, by 30 June.
The capital budget is funded by both the Asset Finance Fund, which comes from the municipality's own coffers, and conditional grants, which are funds from the National Treasury for specific projects. "There are commitments already made for almost for all the projects," said Baart.
Baart provided Grocott's Mail with the following information on how the spending of conditional grants had progressed, as at the end of March:
* FMG (Finance Management Grant). Received R1 200 000 – Spent R1 082 459 ( 90.2%)
* MSIG (Municipal System Improvement Grant). Received R750 000 – Spent R470 592 (62.75%)
* MIG (Municipal Infrastructure Grant). Received R20,2m – Spent R13,2m (65%)
* NDPG (Neighbourhood Development Partnership Grant). Received R10 213 000 – Spent R7 589 702 (74.31%)
* INEG (Electrification Grant). Received R7 410 000 – Spent R2 682 560 (36.20%)
Baart pointed out that in December the council had approved a boost to the 2010/11 Capital Budget of close on R30 000 000 – from R69 596 100 to R97 347 340.
The money for this increase came from realised investments and allocated for urgent requirements such as the upgrading of roads. While saying he believed spending commitments would be in place by 30 June and funds were unlikely to be forfeited, DA Councillor Michael Whisson, said Technical & Infrastructural Services Director, Dabula Njilo knew at least two years ahead what the MIG budget would be, because the National Treasury announced funding in a three-year rolling cycle.
"There is thus no excuse for failing to get projects rolling out in the appropriate financial year, least of all to risk funding being returned to the National Treasury,” Whisson said. Whisson said that information about the spending backlog had been brought to the BTI meeting only in April.
"A quite unreasonable delay, and the figures could and should have been updated, with full projections on spending to 30 June at that meeting. This would have allayed concerns," he said. "A major problem has been that ANC members of the BTI committee have not attended meetings, rendering them non-quorate."
Baart said the financial report for the end of April would be available after 10 May, after they had closed their books for this financial year. The Acting CFO Marius Crous said at a special council meeting on Wednesday that 85% of the capital budget had already been spent, and that this was a reasonable figure as at this point 83% of the year has been completed.
