Stringent budgeting pays off
South Africa desperately needs competent stewards of public funds in all spheres of society. This is according to uThungulu District Municipality Mayor, Ald Stan Larkan as he presented a summary of the budget report for the period ending 31 December 2009 and the January 2010 Adjustment Budget. Commending uThungulu District Municipal Manager, Chief Financial Officer and all competent staff members, the Mayor said the District’s financial matters had always been dealt with in an exceptional manner. As at 31 December 2009, there was an estimated nett surplus of R40.6-million, the majority of which comprises conditional grants not yet expended and Equitable Share and Levy Grant funds received in advance.‘Although Government Grants are above proportional budget by 14% as at 31 December 2009, it should be noted that certain grants will no longer be received in the 2009/10 Financial Year,’ said Larkan.‘The most disappointing of these is the R14-million from the DTLGA for the Richards Bay Soccer Stadium, resulting in the non-completion of certain sectors.‘A concern in the past six months has been the decline in the interest revenue on investment, which was only R12.9m against a proportional budget of R15.5m.’ This resulted in the interest forecast up to June 2010 requiring a downward adjustment budget of R4,752,781.‘Total Non Trading Services are R11,3-million or 23% below budget and the contributing factors are salaries that were 24% under budget due to back pay for councillor allowances still to be effected,’ said Larkan.‘Contract Services are 22% under budget and mostly attributable to IT contracts which are periodically paid and due towards year-end.‘Trading Services are 18% over proportional budget as a result of the water services sub-vote being over budget.‘Water Services are 20% over proportional budget.’
Adjustment
In the 2009/10 adjustment budget, the overall total surplus up to 31 December 2009 depict duly summarised savings of R5,638,181 emanating from a management review in order to reprioritise. This was due to the interest revenue shortfall as a result of the downward trend in the repo rate and to counter the effect of an increase in trading services expenditure.
A surplus from the 2008/2009 audited AFS has been calculated based on the cash based budget principles and an amount of R54m has been brought forward in the 2009/2010 budget.
A summation shows that the Approved 2009/2010 Budget of R634,120,044 was adjusted by R13,001,149 with an adjusted budget in January 2010 of R621,118,895. ‘Although there has been an overall downward trend, the main reason for this is the Government grants that are not forthcoming and a decline in interest revenue, plus the added challenge of managing the additional trading services expenditure. ‘We need to take cognisance of the extensive expenditure being incurred for printing and stationery and heed the call by both the National Minister and Provincial MEC that expenditure must be stringently curbed.’