Maphumulo IDP - KZN Development Planning

7 CHAPTER 7 – FINANCIAL MANAGEMENT7.1 FINANCIAL MANAGEMENT7.1.1 FINANCIAL MANAGEMENT STRATEGIESAs mentioned at the beginning of this document, Maphumulo Local Municipality is apredominantly rural municipality. Accordingly, the municipality does not have the revenuepotential associated with more urbanized and possibly industrialized municipalities.The main source of income for the municipality is government grants, and there’s therefore avery limited tax base for the municipality. In view of this situation as well as the financialdifficulties resulting from the global credit crunch, the municipality recognizes the need forinnovative measures to be taken and strategies to be devised to counter the negativeimpact of the situation. These strategies will be aimed at ensuring that in the short term allreasonable efforts are taken to collect all possible revenues due to the municipality, and thataggressive but realistic plans are put in place to increase the municipality’s revenue base inthe long-term. The measures that the municipality will put in place and the strategies to beemployed are guided by and in compliance with legislation governing local government,particularly the following:Municipal Systems Act, 2000 (MSA);Municipal Finance Management Act, 2003 (MFMA);Communal Land Rights Act, 2004 (CLARA);Municipal Property Rates Act, 2004 (MPRA);Division of Revenue Act, 2010 (DORA); andNational Treasury and MPRA RegulationsAn overview of the measures to be taken and strategies to be implemented is provided inthe subsequent sections.7.1.2 STRENGTHENING DEBT COLLECTION AND CREDIT CONTROLOne of the municipality’s key projects for the 2012/13 financial year is to strengthening itsdebt collection systems. This is to ensure that although the municipality lacks a broadrevenue base, it is able to collect all the revenues due to it in the short to medium term. Thisincludes the ability to recover funds from service providers who have been appointed andrendered a sub-standard quality of service to the municipality.7.1.3 IMPLEMENTATION OF THE MUNICIPAL PROPERTY RATES ACTThe implementation of the MPRA is assisting the municipality towards the achievement of itsrevenue-collection objectives. The collection of rates has increased the percentage ofrevenue collected by the Municipality to 45%. We are currently billing the Governmentproperties, commercial, PSI and Ingonyama Trust. Out of all these structures, Governmentand partly commercial that are paying others we are still having the challenge to collectfrom them.__________________________________________________________________________________________Maphumulo Integrated Development Plan (IDP) 2012 - 2013Final June 2012Page 119 of 142