Msukaligwa Local Municipality 2008/09 - Co-operative Governance ...

• To curtail expenditure according actual income received — this is very important because one can not spend more money than what hereceives. The National Treasury warned that Council must ensure that this principle be Implemented through proper management ofexpenditure and Income reporting to Council,• To ensure that senior appointments in the finances department fully comply with the Equity Plan and the minimum educationalrequirements. It must be obligatory for senior personnel to register with the financial practices control body, namely the Institute forMunicipal Finance Officers (IMFO) and/or other institutions that may be recognized in future.2.2.1.4 Capital financing strategyThe objectives are:• All capital expenditure, even those obtained through outside funds and donations, must be Included to the capital budget,• Only items projects contained in the IDP strategy will be contained in the budget.• The council will not commit itself for projects stretching over more than one financial year except for infra-structural assets.• All liquid assets for less than RIO 000 will be financed from operational Income.• Ail other liquid assets not subjected to a grant or donation to be financed from the Capital Replacement Reserve.• Fixed assets or infra-structural assets not subjected to grants or donations to be financed from loans and funds recorded in the ExternalFinancing Reserve,• The redemption periods for all assets obtained by advances must be in line with the expected life span of assets as contained in theappendix to GAMAP statement 113.• The availability of funds will be determined according the projected cash flow scenario. Any increase must also be limited to theprescribed percentage increase as determined by the National Treasury on a yearly basis.2.2.1.5 Operational Financing StrategyThe objectives are:• All expenditure must be In compliance with a line item within a vote In the approved annual operating budget.• The budget will be realistic and will provide a fair presentation of the Council’s ability.• All expenditure will be covered by realizable current Income as budgeted (The prudence concept)• All operational financial transactions will be in accordance to the Accounting concept of Matching, which requires that income earned andexpenditure incurred to be matched with one another and with the services to which it relates in the same accounting period.• The budget will allow for votes and line items in a consistent manner and will not provide for a net deficit.• Accounting and reporting entities will be clearly and comprehensively specified In accordance with the standard of budget reform by theSA National Treasury.2.2.1.6 Cost Effectiveness StrategyThe objectives are:• To exercise the Councils procurement policy with emphasis on value for money and In accordance with BEE guidelines determined inrelated policies.• The monitoring of projects through a well-designed cost control system.Msukaligwa Municipality: Integrated Development Plan 2007/2012 304