IN YEAR REPORT
Prepared in terms of the Local Government: Municipal Finance
Management Act (56/2003): Municipal Budget and Reporting
Regulations
MONTHLY BUDGET STATEMENT
JULY 2014
1

Table of Contents
PART 1 – IN-YEAR REPORT ……………………………………………………………….…
Section 1 – Mayor’s Report ………………………………………………………………….3
Section 2 – Resolutions …………………………………………………………….……..….3
Section 3 – Executive Summary …………………………………………………………4-5
Section 4 – In-year budget statement tables ……………………………………6-12
PART 2 – SUPPORTING DOCUMENTATION …………………………………………
Section 5 – Debtors' analysis …………………………………………………………….14
Section 6 – Creditors' analysis ………..……………………………………………………15
Section 7 – Allocation and grant receipts and expenditure ………………..16-17
Section 8 – Expenditure on councilor and Senior Managers allowances and employee benefits ……………………………………………………………………….………..18
Section 9 – Capital programme performance ………………………………………19
Section 10 – Municipal manager’s quality certification ………………………..20
2

PART 1 – IN-YEAR REPORT
Section 1 – Mayor’s Report
PURPOSE:
To report on the financial performance result of the month of July 2014.
Section 2-RESOLUTIONS
Council noting the monthly budget statement and any supporting documents.
RECOMMENDATION:
That the Financial and Performance documentation be noted.
3

Section 3 –Executive summary
3.1 Introduction
As part of the implementation of the budget, on a monthly basis the
Municipal Manager must submit a report on budget progress to Mayor. This monthly budget statement must be in a prescribed schedule C format.
The municipality endeavors to change its financial position by implementing revenue enhancement strategy and ensuring the policies in place are being implemented fully.
Revenue by standard
The budgeted revenue including grants amounts to R75.2 million, budgeted revenue for the month was R 6.9 million. In the month of July the municipality received income from grants amounting to R13.4 million and R2 million from own revenue.
Below is a comparison of what was billed and received. Refuse removal is a problem area as only 18% was received against what was billed.
Service
Rates
Refuse
Electricity
Total
Billed
420160.74
632358.1
1105456.41
Received
225069.16
117235.16
800315.39
Variance
195091.58
515122.94
305141.02
2157975.25 1142619.71 1015355.54
The table below depicts the age analysis of debtors. The financial position of the municipality would improve if there debtors would pay what they owe.
AGE
ANALYSIS -
PER SERVICE RATES
VAT INCL
CURRENT
30 DAYS
309189.44
157448.52
60 DAYS
90+ DAYS
TOTAL
133345.55
9931087.52
ELECTRICITY
813329.21
361843.39
242862.81
2588219.05
10,531,071.03 R 4,006,254.46
BASIC ELEC
207053.43
94056.79
BASIC REFUSE
428901
365237.35
68419.89 354701.85
1124137.37 24722611.52
1,493,667.48 25,871,451.72
OTHER(ADMIN/I
N & SU&HOUS) TOTALS
360274.88
336687.09
2,118,747.96
1,315,273.14
45412.56 844,742.66
21357385.37 59,723,440.83
22,099,759.90 64,002,204.59
4

Expenditure by standards
The total budgeted expenditure for operational costs amounts to R83.2 million. The budgeted expenditure for the 1 st month of the financial year was
R6.9 million and R4.7 million was spent, variance being R2.2 million.
Capital expenditure
There was no expense incurred relating to capital budget.
5

Section 4 Monthly budget statements.
4.1.1Table C1: s71 Monthly Budget Statement Summary
6

4.1.2 Table C2: Monthly Budget Statement – Financial Performance (standard classification)
This table reflects the operating budget (Financial Performance) in the standard classifications which are the Government Finance Statistics Functions and Subfunctions. These are used by National Treasury to assist the compilation of national and international accounts for comparison purposes, regardless of the unique organizational structures used by the different institutions.
7

4.1.3 Table C3: Monthly Budget Statement – Financial Performance (revenue and expenditure by municipal vote)
The operating expenditure budget is approved by Council on the municipal vote level.
The municipal votes reflect the organizational structure of the municipality which is made up of the following directorates: Executive & Council;
Corporate Services; Financial Services; Planning & Development;
Community Services; Electrical Services; and Technical Services
8

4.1.4 Table C4: Monthly Budget Statement – Financial Performance (revenue and expenditure)
9

4.1.5 Table C5: Monthly Budget Statement - Capital Expenditure (municipal vote, standard classification and funding)
10

4.1.6 Table C6: Monthly Budget Statement - Financial Position
11

4.1.7 Table C7: Monthly Budget Statement - Cash Flow
12

4.1.8 Supporting Table SC9: Monthly Budget Statement – Actual and revised targets for cash receipts and cash flows.
This supporting table gives a detailed breakdown of information summarized in Table C7.
13

Part 2 Supporting documents
Section 5 – Debtors' analysis
5.1 Supporting Table SC 3
Debtors’ age analysis
Debtors for the month amounted to R64 million. From the report is it clear that community is not paying for refuse removal service charges. The age analysis per service debtors indicates that households followed by businesses are the largest debtors.
14

Section 6 – Creditors' analysis
6.1 Supporting Table SC4
The creditors of the municipality are still high with Eskom at the top. The total creditors are equivalent to the total income from grants which will be received by the municipality in the 2014/15 financial year. From the financial position of the municipality it is clear that these creditors the municipality will not be able to pay fully unless an intervention occurs.
15

Section 7 – Allocation and grant receipts and expenditure
7.1 Supporting Table SC6 – Grant receipts
In the month of July the municipality received a portion of the equitable share, MIG and FMG. Total amount received from grants amounts to R13
418 000.
16

7.2 Supporting Table SC7 – Grant expenditure
Expenditure occurred for all the grants except MIG. Expenditure on FMG is alarming as 50% of the allocation has already been spent. This indicates that the activity plans for the grant will not be implemented fully. The expenditure incurred was in respect of consultation fees for the preparation of Annual Financial Statements of the 2013/14 financial year.
17

Section 8 – Expenditure on councilor and Senior Managers allowances and employee benefits
The budget for personnel costs amounts to R29 million and year to date budget being R2.4 million, in July R1.9 million was spent.
18

Section 9 – Capital programme performance
9.1 Supporting Table SC12
The capital budget for the year amounts to R9.1 million. There was no capital expenditure for the month of July.
19

Section 10 – Municipal manager’s quality certification
I, ________________________________, Municipal Manager of Nxuba Municipality hereby certify that –
(mark as appropriate)
□
□
□
The monthly budget statement
The quarterly report on the implementation of the budget and financial state of affairs of the municipality
The mid-year budget and performance assessment
For the month of July 2014 has been prepared in accordance with the Municipal Finance
Management Act and regulations made under that Act
Print Name: _______________________________________________
Municipal Manager of Nxuba Municipality (EC128)
Signature:_______________________________
Date:__________________________________
20