Nkomazi Local Municipality 20 - Co-operative Governance and ...

SECTION G21. FINANCIAL STRATEGY [FINANCIAL PLAN]One of the key objectives identified for the sustainability of Nkomazi Local Municipality is to improve revenuecollection in relation to its financial viability. It is therefore critical that the budget process is carefullyundertaken in appropriate ways internally and externally the plans and strategies detailed in this financial plancontribute to the achievements of this objective. Internal Auditors and the Audit Committee are being used toensure financial procedures and compliance.The Municipal area is so vast but the current revenue base is so small and limited to the few and small urbanareas. For the Municipality to be financially independent there is a need to develop effective income generatingstrategies and debt collection mechanism. To be effective in its financial management, the Municipality hasdeveloped the following policies: The Municipality has developed a number of Financial Plans and Policies asindicated in table 28.Mechanisms to finance infrastructure investmentDue to the rural nature of the Municipality, revenue generation remains a challenge. These forces theMunicipality to rely on the MIG to finance infrastructure investments. However the Municipality has developedservices contributions policy which will aid in investing in infrastructure development programmes andprojects.ExpenditureOut of 161606000 capital budget for 2009/2010 financial year 88, 922, 00 which is 55% was actually spent. Atotal of 91 200 000 of 176 720, 176 which is 60% of the Total capital budget was invested in infrastructureprojects.2010/2011 Budget implementationDue to the over expenditure which was incurred during the 2009/2010 financial year and had to be carried overto the 2010/2011 financial year that has put a strain in the municipal finances which makes it difficult toprecisely implement the IDP and the budget as plannedObservation on operating and capital expenditure analysisThe audit report has established that there was an over expenditure in the operational budget.SDBIPThe Municipality is currently working on the SDBIP the Budget and IDP were approved on the 28 th of March2011 as Drafts which are open to the public for inputs and comments.Linkages between the IDP and BudgetAll the projects which are funded and implemented by the municipality are reflected in both the IDP and thebudget. However other projects from sectors can only reflect in the IDP not in the budget as the sources offunding and implementing agents are outside the scope of the municipality.Audit opinion- 2007/2008- disclaimer- 2008/2009- Qualified- 2009/2010- QualifiedNKLM Integrated Development Plan 2012_2013 134