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You are at:Home»NEWS»Funding rollover is good news for projects
NEWS

Funding rollover is good news for projects

Staff ReporterBy Staff ReporterNovember 8, 2019No Comments3 Mins Read
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Last week the Municipal Council sat and deliberated on a number of crucial issues pertaining to the performance of the municipality. Among the items that were discussed was the matter of an unfunded budget. The 2019/2020 budget adopted by the municipality in July was unfunded by R109m. Section 18(i) of the Municipal Finance Management Act state that a “municipal budget must be funded from realistically anticipated revenue, cash backed accumulated funds”. Accordingly, National Treasury instructed Makana Municipality to review its budget and adopt a fully funded budget or risk the withdrawal of its equitable share which is due in December.

In this regard, National Treasury instructed the municipality to:

  • Present a repayment plan to ensure that all arrear creditors are paid before June 2020;
  • Review the operating expenditure items in full on non-essential items;
  • Present a plan on how the municipality will improve the revenue collection rate to recover arrear debtors;
  • Ensure that apportionment is part of the repayment plan to our arrear creditors;
  • Ensure that the remaining balance from our arrear creditors is to be paid from our 2019/2020 revenue collection.

In short, our operating budget needs to be cut to ensure that it is within our revenue generation budget. The CFO and his team worked tirelessly and reprioritised and came up with a fully funded budget. A special council meeting this week will adopt the revised fully funded budget for the 2019/2020 financial year. At the same council meeting, council will adopt a comprehensive Financial Recovery Plan.

Among other matter discussed at last week’s full council meeting was the matter of unspent grant funding. During the previous financial year our municipality spent 50% of its allocated grant funding. This amounted to R47.4m. Our Municipality applied to the National Treasury for a roll-over for the incomplete projects. National Treasury approved a rollover of R43.5m, with only R3.9m not approved. The municipality intends to appeal this rejected amount.

The following projects were approved by the National Treasury:

  • MIG – Waainek Water Treatment Works Refurbishment (R5.2m)
  • MIG – Alicedale Sewer Reticulation upgrade (R6.9m)
  • WSIG – Water Conservation and Demand Management
  • WSIG – Refurbishment of Riebeeck East Water Treatment Works (R7.9m)
  • WSIG – Refurbishment of Alicedale Water Treatment Works (R11.7m)
  • WSIG – Grounded Water development (Boreholes) (R10.1m)
  • INEP – 66KV Network – Refurbishment of Power Lines (R1.8m)

The approval of these rollover applications by National Treasury means as the municipality we shall be able to complete the projects that we have started.

Mzukisi Mpahlwa

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