Lekwa Local Municipality 2013/14 - Co-operative Governance and ...

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Financial Supervisory AuthorityAs part of its responsibility in monitoring macroeconomic and physical stability, the National Treasury prescribesthe format of the municipality’s annual budget and determines growth limits guidelines for self-generated revenueservices. This ensures: Compliance with legal requirements for an approved budget; Strengthened oversight by Council and improved performance by officials; Readability of and linkages within the budget documentation; Satisfaction of stakeholders information needs (councillors, community, etc) and; Facilitation of comparability between municipalities.Two key concepts to consider when preparing the budget are:1. The Annual Budget may only be funded from: Realistic anticipated revenues to be collected.2. Cash backed accumulated funds from previous year’s surpluses not committed for other purposes.The Annual Budget must be credible. A credible budget is a budget that:Funds only activities consistent with the revised IDP and vice versa ensuring the IDP is realisticallyachievable given the financial constraints of the municipality.Achievable in terms of agreed service delivery and performance agreements.Contains revenue and expenditure projections that are consistent with current and past performance.Does not jeopardize the financial viability of the municipality which ensures that the financial position ismaintained with generally accepted prudentialLimits and the obligations can be met in short, medium and long term.Provides managers with appropriate levels of delegation, sufficient to meet their financial managementresponsibilities.IDP and Budget with their expected outcomes ensure that the Council is in the right direction to become This thebest local municipality in rendering affordable, accessible, efficient and available services whilst at the same timemaximizing infrastructural development through the utilization of all available resources.235 | P a g e
7.24 ANNUAL BUDGET FOR THE FINANCIAL YEAR 2013/2014BackgroundThe municipality is currently experiencing severe cash flow challenges as a result of the past performance and pastpoor planning. The challenges include the municipality not been able to pay its Eskom Account, Water Affairs andLicensing amongst other creditors. These was further evident on the municipality’s inability to repair its aginginfrastructures such as, sewer treatment plant, water pump-station, roads amongst others. In an effort to combatthis practice, during the 2012-13 Adjustment budget the expenditure was reduced to meet the current availablerevenue as the municipality was spending at a rate high than its ability to generate income which resulted in somevotes exceeding their available budget. The municipality further adopted principles which will be used to prepareand implement the 2013-14 budgetDiscussionThe following budget principles & assumptions were taken into consideration when the 2013-14MTREF wasprepared.Section 53 of the MFMA requires the Mayor of the municipality to provide general political guidance in the budgetprocess and the setting of priorities that must guide the preparation of the budget. In addition Chapter 2 of theMunicipal Budget and Reporting Regulations states that the Mayor of the municipality must establish a BudgetSteering Committee to provide technical assistance to the Mayor in discharging the responsibilities set out insection 53 of the Act.The Budget Steering Committee consists of the Municipal Manager and senior officials of the municipality meetingunder the chairpersonship of the Council Committee for Finance.The primary aim of the Budget Steering Committee is to ensure: that the process followed to compile the budget complies with legislation and good budget practices; that there is proper alignment between the policy and service delivery priorities set out in Lekwa LocalMunicipality’s IDP and the budget, taking into account the need to protect the financial sustainability ofmunicipality; that the municipality’s revenue and tariff setting strategies ensure that the cash resources needed todeliver services are available; and that the various spending priorities of the different municipal departments are properly evaluated andprioritised in the allocation of resources.Budget Principles OverviewIn terms of section 18 of the MFMA the municipality may only fund its budget from realistically anticipatedrevenue to be collected as well as cash-backed surpluses. Therefore the municipality must provide for expenditurein line with the revenue that can be collected and don’t overstate the revenue as this will result in cash flowchallenges. The current collection rate is 70% and with the current programmes in place such as debt managementand electricity loss control is estimated that the revenue will grow with an additional 10% therefore the revenuecollected can only fund the expenditure up to 80% as a result none essential expenditures had to be reduced.The budget has to be cash-backed in order for the municipality to be able to implements its Service DeliveryBudget Implementation Plans, therefore the municipality should not have a budget that reflect a cash deficit. Dueto the implementation of the GRAP 17 Standard it is permissible for the municipality to a deficit that is equivalentto its depreciation amount as this is a none-cash item. But it should further be noted that the municipality shouldhave in its reserves an amount equivalent to its depreciation in order for the municipality to have sufficient funds236 | P a g e
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3.10.3 Existing Pump Stations Infra
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3.10.4 Existing Pump Stations Infra
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General information Zone 1 Zone 2 Z
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3.10.7 Existing Reticulation Infras
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3.10.13 Future Bulk Sanitation Infr
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Opportunities High influx of potent
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• Mandla Mthethwa - complained ab
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• Clinic and RDP houses: the comm
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Available land for agricultural and
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CHAPTER: FOUR4 VISION AND MISSION O
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4.2 NINE (9) STRATEGIC FOCUS AREAS
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Promote and support sustainability
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• The fact that the largest numbe
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The myriad of third order routes pr
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NODE LOCALITY ACCESS FACILITIES CHA
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Figure 26/7: OPEN SPACE (left)PROPO
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Third order nodes will serve only a
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Development Principle 6: Prioritize
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Industrial 1 Industry (excludingnox
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• The ability of the municipality
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4.4 IMPLEMENTATION FRAMEWORK OF SDF
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ACTION LOCATION ESTIMATED COST REAS
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CHAPTER FIVE5 STRATEGIC OBJECTIVES,
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ISSUE DESIRED OUTCOME KEY PERFORMAN
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Staff TurnoverLabour Relations andC
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KEY PERFORMANCEAREA(linkage to IDP)
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8. ContractsManage and safekeeping
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2. Submitting the Annual FinancialS
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2. Fraud ReportingHot LineManage th
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monthly basis4.Prepaid Electricity
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Responsible for the procurementof S
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Informal DebtorsManagement of infor
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management of the EEP(Employment Eq
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OccupationalHealth & Safety Act at
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External Service ProviderManage the
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Water ConnectionsResponsible and ma
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Sport FieldsManage themaintenance o
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performance of theappointed externa
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5.1 PROGRAMMES AND PROJECTS FOR THE
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Page 191 and 192: SOPA PRIORITIES KEY ACTIVITIES 2013
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Page 203 and 204: 2013/2014ENVIRONMENTAL PROTECTION A
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Page 227 and 228: LEKWA LOCAL MUNICIPALITY FUNCTIONAL
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Page 233 and 234: easonably expects to derive economi
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Page 253 and 254: MP305 Lekwa - Supporting Table SA34
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Page 259 and 260: outes, Motorbike &quad bike routes.
Page 261 and 262: programmefor industrialInnovationta
Page 263 and 264: Promote and Support Agricultural de
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Page 267 and 268: Following these analyses, important
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