S.African municipalities underspend on budget - CNBC Africa

S.African municipalities underspend on budget

Southern Africa

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The City of Johannesburg is owed the largest amount at 17.4 billion rand. PHOTO: South Africa Travel Online

This is according to South Africa’s National Treasury, which reported local government’s revenue and expenditure for the fourth quarter of the 2013-2014 financial year on Friday.

“This translates into a net under spending of 33.8 billion rand of adjusted budgets for municipalities. The under spending is 1.4 billion rand lower than that of 2012-2013 when municipalities under spent by 35.2 billion rand or 12.2 per cent of their budgets,” Treasury said.

“In respect of revenue, aggregate billing and other revenue amounted to 91.9 per cent or 317 billion rand of the total adjusted revenue budget of 345 billion rand.”

Treasury indicated that the report formed part of the In-year Management, Monitoring and Reporting System for local government.

“This report enables provincial and national government to exercise oversight over municipalities, and identify possible problems in implementing municipal budgets and conditional grants,” it said.

“In-year reporting is now well institutionalised with most municipalities consistently producing quarterly financial reports. The reporting facilitates transparency, better in-year management as well as the oversight of budgets.”

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Municipalities under spent conditional grants by 3.3 billion rand while metropolitan municipalities achieved 94 per cent of billed and other revenue of the total adjusted revenue budget of 198.3 billion rand.

“Aggregate municipal consumer debts were 94 billion rand as at 30 June 2014. The amount for outstanding debtors for government represents 4.8 per cent of the total outstanding debtors. The largest component relates to households which accounts for 61.6 per cent,” said Treasury.

“Metropolitan municipalities are owed 52.9 billion rand in outstanding debt as at 30 June 2014. This represents an increase of 4.2 billion rand or an 8.7 per cent increase from the fourth quarter of the 2012-2013 financial year.”

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Treasury also stated that the City of Johannesburg is still owed the largest amount at 17.4 billion rand, followed by Ekurhuleni Metro at 10.7 billion rand, the City of Tshwane at 6.6 billion rand and Cape Town at 6.5 billion rand.