Discrepancies in Nala Budget a threat to service delivery

Issued by David Ross – DA Councillor and Chairperson Section 80 Finance Committee Nala Local Municipality
29 Apr 2024 in Press Statements

Note to editors: Please find attached English and Afrikaans soundbites by Cllr David Ross and Sesotho by Jafta Mokoena MPL.

The coordination of budget processes is essential for Nala Local Municipality to maintain credibility and consistency, ensuring that the annual budget and integrated development plan align seamlessly with previous procedures. To this extent, the DA has consistently presented proposals to Committees and Councils to adhere to Treasury Circular Number 126, which mandates a funded and solvent budget.

These processes encompass the full-year actual amounts, projected full-year revenue and expenditure, and adjusted budgets. They must now be consistently linked to the proposed draft budget for 2024/25.

We acknowledge the need to rectify discrepancies in the Draft Budget, particularly understated expenditure and overstated revenue. Therefore, we will engage with the Nala community at a public meeting on 29 April 2024 to address the following issues:

  • Bulk Electricity expenditure in the adjustment budget is less than the projected full-year expenditure and should be increased to the projected expenditure of R140 million from R90 Million in the current draft budget.
  • Debt impairment based on a collection rate of 80% also seems unrealistic and constructive discussions with the Administration will occur before the public meeting. In this regard, a debt impairment of R76 m should reflect R125 m.
  • On the revenue side, revenue interest was inflated with R40 million as well as a 10% tariff hike and not 5% on all services were charged.
  • The DA ‘s current projected cash shortfall of R244 million will be highlighted at the meeting as opposed to the administration’s Draft Budget Shortfall of R48 Million.

An unbalanced and non-credible budget sets the stage for poor service delivery which has been the reality for the residents of Nala year after year.

Realistically anticipating revenue from each source and ensuring that expenditure is not understated is pivotal for balancing the Nala budget for 2024/25 and delivering services the residents of this municipality is owed. The DA will continue to drive the rectification of these budget issues that directly impacts the quality of life for Nala residents.