Limited employment growth and household income constraints are holding back consumption." The country's economic growth prospects were impossible to project given the current pandemic. Given the sluggish growth and weak demand, the company will concentrate resources on maintaining the current network to minimize power outages and shorten supply disruptions The unit's budget for 2020/21 is hereby submitted to the parent municipality for consideration in accordance with MFMA 87 (2).
The purpose of the MTREF 2020/21 is to guide the entity's allocated resources in achieving its service objectives as required by the MFMA Act (No. 56 of 2003). The submission of the budget is the start of a journey towards the final approval of the budget before implementation at the beginning of the new financial year. The budget is a tool through which the municipality engages the communities of the metro to ensure proper public participation, and also to ensure that the needs of the community, as defined in the integrated development plan (IDP), are translated in the implementation budget.
The unit's capital budget projects have been funded as follows over the years. The allocation for the last two years of the MTREF period is R 2.891 billion and R 3.031 billion respectively. Income from service charges constitutes a significant part of the unit's income basket.
The allocation of conditional grants expected in the official gazette accounts for 2.02% of the budgeted income for the 2020/21 financial year.
OPERATING EXPENDITURE
That in terms of Section 24 of the Municipal Financial Management Act, 56 of 2003, the operating revenue of R 2,852 billion, operating expenditure of R 2,462 billion and capital
That the financial position, cash flow, asset management and basic service delivery targets be tabled as set in the following tables
Supply of electricity tariffs as set out in (Annexure A) attached, be noted for approval for the 2020/21 financial year
That the General Tariffs as set out in the Tariffs Booklet (Annexure B) be noted for approval for the 2020/21 financial year
That the Amendment Policy Register as set out in (Annexure C) be noted for approval for the 2020/21 financial year
This table provides an overview of the planned operational performance in terms of funding sources and for which activities the funds should be used. This form of presentation of the statement of financial position is aligned with GRAP 1, which is generally aligned with the international version, which presents assets less liabilities as an "accounting" of community assets. The order of items that each group illustrates is the order of liquidity; assets that are immediately converted into cash or liabilities that must be settled immediately with cash appear first.
The budgeted statement of cash flows is the first measure of whether the budget is funded. It shows the expected level of cash inflow versus cash outflow that is likely to result from budget execution. Support Table SD1: Supporting Details for Measurable Performance Objectives The Measurable Performance Objectives table attempts to outline how the municipality intends to manage and monitor service delivery progress against identified strategic objectives and priorities by the respective directorates.
The table below shows the benchmark ratios based on the actual results of the last three (3) financial years and the outlook for the MTREF period. The table below provides the reader with monetary investment data by type and maturity. Debt coverage (total operating income - operating grants)/debt payments due within the fiscal year).
O/S Servi ice Debtors to Revenue Total unpaid service debtors/annual revenue received for services. that for the calculation of electricity bills, the consumer month will be the period between consecutive monthly readings regardless of the period between readings and with a winter and summer component for all tariffs; and. that the service tariffs as set out in Schedule B for the financial year 2020/21 be approved;
that the policy changes as set out in Schedule C for the 2020/21 financial year be approved; that the training tariffs as set out in Schedule D for the financial year 2020/21 be approved;
OVERVIEW OF ANNUAL BUDGET PROCESS
- BUDGET PRINCIPLES
The budget for salaries, allowances and salary-related benefits must be prepared separately and will not exceed 30% of the total operating budget component of the annual budget. For purposes of applying this principle, the remuneration of the Board of Directors will be excluded from this limit. Centlec - Presentation of the 1st quarter financial reports for the period ending 30 September 2019 on the implementation of the budget and financial state of affairs of the entity to the Finance Committee.
Centlec - Submit the Revised 2nd Draft MTREF 2019/20 to 2021/22 Budget Package including MMM Comments to EXCO for consideration for submission to the Finance Committee. Centlec - Submission of the MTREF 2020/21 to 2022/23 budget package and resolutions to the parent municipality (100 days before the start of the new fiscal year). Centlec - Submission of 3rd quarterly reports for the period ended March 31, 2020 on the execution of the entity's budget and financial performance to the finance committee.
Centlec - Council meeting to consider changes to Public Participation and approve the final MTREF for 2020/21 to 2022/23 budget package (Special Session) 30 days before the start of new financial year. Centlec - Submission of the 4th quarterly reports for the period ending 30 June 2020 on the implementation of the budget and financial state of affairs of the municipality to EXCO to consider submission to the Finance Committee. Centlec - Presentation of the 4th quarterly reports for the period ending 30 June 2020 on the implementation of the budget and financial state of affairs of the municipality to the Finance Committee.
Centlec - Board meeting to consider 4th quarter reports 27-Jul-20 MUST BE DONE Centlec - Budget process plan 2021/22 submission to the board for approval 24-Aug-20 MUST BE DONE MMM - Presentation of IDP and budget process plan for Financial 2021/2022. Neither party intends to make changes in the control and ownership of the entity. Approval of the Mid-Year and Performance Appraisal of the Unit as per MFMA sec.88.
Pursuant to schedule 1 of the Service Delivery Agreement between the entity and the parent municipality, the entity will act as the service provider and will perform on behalf of the parent municipality all services required as required by the electricity distribution license conditions. The budget of the entity will be funded from internal sources, but a portion of capital expenditure will be financed through grants.
MEASURABLE PERFORMANCE OBJECTIVES AND INDICATORS
- Key Parameters
The following indicative growth rates and parameters were given to the directorates for the compilation of their operating budgets and fees; The budget parameters were developed after the approval of the Budget Process Plan and submitted to the department to start the planning process on August 12, 2019. The current audit result especially in relation to impairment, debt impairment and interest on shareholder loan provisions.
Local government is expected to take into account these inflation forecasts as well as local economic conditions when setting tariff rates and other charges in formulating their budgets. a) The budget financing review must explain how the annual budget is financed, which must include at least the following -. i) financing of operational and capital expenditures;. iv) fiscal viability of the municipal entity;. v) general impact on rates and tariffs; and. vi) allocations or distributions to the parent municipality; The entity's budget will be financed from revenues collected internally and conditional grants from the Ministry of Energy. It is important to note that total energy purchases represent more than 69% of the entity's operating budget.
The revenue from the sale of electricity constitutes more than 98% of the company's operating revenue. Increase automated meter reading (AMR). g) Information on contributions received and donations in cash or in kind planned to be received, specifically indicating donor assistance secured by formal. h) Information on planned proceeds from the sale of assets;. i) Information on planned revenue from leasing assets where the leasing period is three years or more. j) Information on the planned use of previous years' cash backed accumulated profits including –. (i) any shortfall between liabilities or provisions and cash reserves set aside for that purpose. ii) details of board decisions to set aside funds, including timetables for gradually meeting the funding of provisions. iii) details of working capital allowance – defined as having sufficient funds to meet any financial obligations as they fall due; and. Closing balance Institute name and investment ID Year/months. k) information on proposed future sources of income.
Refer to (a) above for details. l) data on the planned use of any bank overdraft and the reasons for it; m) data of any existing borrowing and any new borrowing that is proposed to be obtained; n) data on allocations from or distributions from the parent municipality; o) the data of any transfer and other grant for the municipal unit.
ALLOCATIONS OF GRANTS MADE BY THE MUNICIPALITY
Support Table SD6 provides management and budget users with a monthly breakdown of the budget as contained in Tables D2 to D5. These tables should be used as a measure of budget performance on a monthly basis. They should be used in the monthly report from section 87 to monitor the actual implementation of the budget by the administration.
MTREF The following tables describe the monthly targets for revenues and expenses, equity and cash flow are as follows: (continued). Compliance with the implementation requirements of the MFMA has been substantially met through the following activities:.
In-Year Reporting
Budget and Treasury Office
Audit Committee
Risk Management
Service Delivery and Implementation Plan
Annual Report
