Note to editors: Please find attached English and Afrikaans soundbites by Cllr David Ross and Sesotho by Karabo Khakhau MP.
As chair of the finance committee, the DA in Nala has called for a meeting on 25 May 2024 to ensure that the municipality is informed about the upcoming requirements from the National/Provincial Treasury to prepare a surplus budget. The National/Provincial Treasury requires municipalities to prepare a surplus budget.
With effect from 1 July 2024, all municipal Councils are advised not to approve a deficit budget. Failure thereof may result in Councils implementing section 171 of the MFMA, dealing with financial misconduct, to both the accounting officer and Chief Financial Officer.
Strengthening accountability and consequence management can be done through improved monitoring of internal processes to ensure early detection of performance failures or financial transgressions. According to the DA manifesto, accountability must be enforced without fear or favour for performance and delivery failures across the public service.
Funding municipal budgets has become critical to avoid financial distress and liquidity challenges at the municipal level. It is for this reason that we will inform the municipality to:
- Encourage municipal officials at Nala to prepare a surplus budget as the adoption of a credible budget starts with the preparation of a surplus budget.
- Inform that with effect from 1 July 2024, all municipal councils are advised not to approve a deficit budget.
- Inform that Accounting officers and CFO are responsible for preparing budgets and must guard the mayor against submitting a deficit budget for adoption.
- Municipalities are cautioned by NT /PT to not assume collection rates that are unrealistic and unattainable.
- Setting out indicative revenue per revenue source and projected expenditure by vote for the two financial years following the budget year.
- Setting out estimated revenue and expenditure by vote for the current year and actual revenue and expenditure by vote for the financial year preceding the current year.
According to Nala’s annual report 2022/2023 financial year, their revenue collection rate 55% far below the national norm of 95%. Additionally, according to the SDBIP they did not submit their annual financial statements in August as legislated. The same SDBIP also indicated that the municipality did not achieve their net operating surplus margin.
The DA is committed to maximising the revenue generation of the municipal revenue base and to addressing the incorrect funding choices of the ANC, in terms of overstated employee-related costs, which are now more than the equitable share allocation to the municipality.
In adopting a surplus budget, service delivery at the municipality will improve. Therefore, it is imperative to maximise revenue generation potential, eliminate wasteful and non-core expenditure, and ultimately maintain tariff increases at levels that reflect an appropriate balance between affordability and financial sustainability at the municipality.