Net Assets – Net assets are the remaining portion of an entity's assets after deducting all of its liabilities. Operating expenses – Spending on day-to-day costs of the municipality, such as salaries and wages.
Service Charges
Annual budget tables
SUPPORTING DOCUMENTATION
Section 5–Overview of annual budget process
A schedule of key deadlines has been prepared for presentation to the Council by the Mayor before the end of August 2018. At the culmination of the consultation process, the Mayor must consider any representations and decide whether any changes should be made to the budget. It is necessary to plan and budget on a 3-year basis to take into account resource constraints and also capacity constraints in service delivery.
The MFMA requires municipalities to prepare 3 year budgets to ensure more thorough financial planning and provide for seamless service delivery. However, as was the case last year, in the current uncertain economic climate, both capital and operating income and expenditure figures in the outer years are indicators of need or wish, and in some cases hope, rather than reality. The municipality will outline measurable performance objectives to link the financial input from the budget to service delivery on the ground.
This will be done in the form of the quarterly service targets and monthly financial targets contained in the Service Delivery and Budget Implementation Plan (SDBIP). This must be agreed by the Mayor within 28 days of approval of the final budget and forms the basis for the Municipality's in-year monitoring.
Section 6–Overview of alignment of the annual budget with the Integrated Development Plan
Section 7–Measurable performance objectives and indicators
- Overview of budget assumptions
- Overview of budget funding
- Expenditure on allocations and grant programmes
- Allocations and grants made by the Municipality
- Councillor allowances and employee benefits
- Monthly targets for revenue, expenditure and cash flow
- Annual budgets and service delivery and budget implementation plans –
- Annual budgets and service
Nevertheless, there will always be an element of the total amount invoiced that will remain unclaimed. The ability of the Municipality to deliver quality services is dependent on its staff and the ability to deliver services to the Walter Sisulu population at a viable level. The Government allocates revenue via the Distribution of Revenue Act (DORA) in the form of the Fair Share Allocation with the primary objective of assisting municipalities with the cost of providing free or subsidized basic services.
There is a large increase in tariffs over the CPIX forecast, mainly due to the effect of the increase in electricity. Funds only activities in accordance with the revised EDP and vice versa ensuring that the EDP is realistically achievable given the municipality's financial constraints; It does not endanger the financial stability of the municipality (it ensures that the financial position is kept within generally accepted prudent limits and that obligations can be fulfilled in the short, medium and long term); and.
Furthermore, budgets tabled for consultation at least 90 days before the beginning of the budget year must already be credible and reasonably close to the final approved budget. Due to the fact that the majority of capital expenditure is financed from own sources by means of own cash, the municipality must ensure that the principle of "the user pays for the use of the assets" is applied in its long-term financial strategy. The Municipality may receive contributions from developers to provide infrastructure and other works as part of the conditions for planning permission.
The key figures as set out in the Liquidity and Management Investment Policy are used to establish prudent levels of borrowing in terms of affordability and the municipality's overall indebtedness.
- Contracts having future budgetary implications
- Capital expenditure details
- Legislation compliance status
- Other supporting documents
- Rates and tariffs 2019/20
- Municipal Manager’s quality certification
The various sections of the Act are phased in according to the designated financial management capacity of municipalities. The MFMA is the foundation of the municipal financial management reforms that municipalities are implementing. The Mayor must coordinate the budget preparation process and the review of the Council's IDP and budget-related policy, with the assistance of the municipal manager.
The Mayor must ensure that the IDP review forms an integral part of the budget process and that any changes to strategic priorities as contained in the IDP document have realistic projections of income and expenditure. When the draft budget is tabled, the Council must consider the views of the local community, the National Treasury and the relevant provincial treasury and other municipalities and government departments that may have made submissions on the budget. Following the presentation of the draft budget at the end of March, the months of April and May should be used to accommodate public and government comments and to make any revisions that may be necessary.
The Council must then consider approving the budget by May 31 and formally approve the budget by June 30. Implementation management – the Service Delivery and Budget Implementation Plan (SDBIP). The municipal secretary must submit a draft SDBIP and annual performance agreements for all managers involved to the mayor for approval within fourteen days of approval of the annual budget. An SDBIP is a detailed plan for implementing the delivery of municipal services as planned in the annual budget and should include monthly revenue and expenditure forecasts and quarterly service delivery targets and performance indicators. The mayor must approve the draft SDBIP within 28 days of approving the annual budget. This plan must then be monitored by the mayor and regularly reported to the municipal council. The municipal manager is responsible for the implementation of the budget and must ensure that all expenditure is in accordance with the budget and that revenue and expenditure are properly monitored. In general, Councils may only make expenditure if this is in terms of the budget, within the limits of the amounts allocated at each budget vote – and in the case of capital expenditure, only if the Council has approved the project. Spending outside these parameters may be considered unauthorized or, in some cases, irregular, fruitless and wasteful. Unauthorized expenditure must be reported and may result in criminal prosecution. Review of budget estimates – the annual budget. It may occasionally be necessary for a Council to consider a revision of its original budget as a result of material and significant changes in revenues, expenditure patterns or forecasts thereof for the remainder of the financial year. In such cases, a municipality may adopt an annual budget, prepared by the municipal manager and submitted to the mayor for consideration and to the Council for adoption. The annual budget must contain certain prescribed information, must not result in further increases in taxes and rates, and must contain appropriate justifications and supporting materials when adopted by the Council. Requirements of the MFMA regarding the content of annual budgets and supporting documentation. Article 17 of the MFMA provides that an annual budget of a municipality must be a budget in the prescribed format and specifies what must be included in that format. In its MFMA Circular 48, the National Ministry of Finance has provided detailed guidance on the content of budget documentation and supporting schedules. The municipality of Walter Sisulu has done everything possible to comply with the circular. The following table shows how the Municipality of Walter Sisulu complies with the disclosure requirements of Section 17 of the MFMA. documentation Schedule of reasonably expected income for. the budget year of each source of income A4 Schedule showing the expenditure appropriations for the budget year under the various votes of the municipality. Diagram showing the indicative revenues per source of income and the expected expenditure per vote for the two budget years following the budget year. i) estimated income and expenditure per vote for the current year, and. ii) Actual receipts and expenditure by vote for the financial year preceding the current year. i) approving the budget of the municipality, (ii) imposing any municipal taxes and setting any municipal rates as required for the financial year, and. iii) To approve any other matters that may be prescribed. Measurable performance targets for revenue. from every source and for every vote in the Section 7 and SA 7 budget, taking into account the municipality's Integrated Development Plan. Projection of cash flow for the financial year by. source of income broken down per month SA 25 – SA 26 Proposed changes in the municipality. integrated development plan following the annual assessment of the IDP against Article 34 of the Municipal System Act. Details about the investments of the municipality SA 16 Any prescribed information about municipal entities. under the sole or shared control of the municipality. Data from all proposed new municipal bodies that the municipality wants to establish or in which the municipality wants to participate. Details of any proposed service agreements, including material changes to existing service agreements. Information about any proposed allocations or subsidies by the municipality. ii) any municipal entities and other external mechanisms that assist the municipality in the exercise of its functions or powers. iii) all other state organs. (iv) any organization or body referred to in Article 67 (1) (bodies outside government). The proposed costs for the municipality for the financial year of the salary, allowances and benefits of -. i) every political office holder of the municipality. (ii) Councilors of the municipality. (iii) the municipal manager, the financial director, any senior manager of the municipality and any other official of the municipality with a remuneration package greater than or equal to that of a senior manager. The proposed costs for the financial year for a municipal body under the sole or shared control of the municipality of the salary, allowances and benefits of-. (ii) the CEO and any senior manager of the entity. In addition to the requirements of the MFMA, the law also imposes tasks on municipalities, particularly in the area of reporting obligations.
One of the key objectives of the Municipal Systems Act is to ensure financially and economically viable communities.
