Mock budget to aid credibility at iLembe Mock budget set for iLembe

2016-11-30 06:01
iLembe District Mayor Sduduzo Gumede. Photo: supplied

iLembe District Mayor Sduduzo Gumede. Photo: supplied

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A MOCK budget will be used as a monitoring tool to ensure that the iLembe District’s budget remains credible under the cash flow constraints the municipality is currently experiencing.

This was revealed to council for noting at a special meeting last week.

After council tabled and approved the annual budget for 2016/2017, the Provincial Treasury Office assessed iLembe’s annual budget for credibility and funding and requested a meeting with the municipality to discuss a way forward.

The preparation of a mock budget is one of the resolutions taken during a meeting with the Treasury office.

Mayor of iLembe District Municipality Sduduzo Gumede, the chairperson of the Finance Portfolio Committee councillor Sandeep Oudhram, the municipal manager Nonhlanhla Gamede and management were all part of the important meeting.

“This mock budget will assist us in formulating the adjustment budget which will be tabled in February next year as per the requirements of the Municipal Finances Management Act,” said the mayor.

The district municipality is currently fully implementing austerity measures – which is also another resolution of the meeting with province, he added.

“We indicated to Treasury that as part of ensuring that cash flow challenges do not persist we will fully implement the measures. This will not be impossible for us, as we have already started partly implementing austerity measures,” said Gumede.

The council of iLembe has also adopted the policy on austerity measures. Some of the notable measures the municipality has implemented include paying Project Management Unit employee related costs out of the Municipal Infrastructure Grant (MIG) instead of the operational budget.

“We have reviewed contracts with external service providers and lessened dependency on service providers by making use of internal resources. The cost saving based on the project management unit business plan is R4.97 million based on the 2015/2016 financial year and the budgeted cost saving for 2016/17 financial year is R9.3 million,” said Gumede.

The mayor said, however, that the effects of the austerity measures will take some time to bear fruit, stating that decent savings had been made to date on printing costs alone.

“We have consolidated and improved on our printing including contracting a single service provider for the supply and maintenance of printing, copying and faxing equipment at a monthly fixed cost of R133 501.40 compared to a monthly averaged cost of R332 469.91 that was previously spent. This is a saving of R2.4 million a year.”

Another cost cutting measure used to save council money is the distribution of meeting agendas for councillors and officials via an electronic system.

“Previously agendas were often distributed to councillors during weekends which meant that a driver assigned with this task claimed overtime. Distribution of agendas electronically means less printing and a reduction on the purchase of printing paper,” said the mayor.

“The municipality continues with its vigorous efforts in exploring further cost cutting measures focusing on transport costs, overtime and travel claims.

“We have initiated a financial turnaround strategy and developed a comprehensive financial recovery plan in support of the strategy which will focus on revenue enhancement, protection, and debt collection and the implementation of cost containment measures. This is a three-year plan that addresses short-term and long-term challenges,” said Gumede.

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