The Makhado Municipality painted quite a rosy picture of its financial status when enquiries were made last week. The actual surplus or deficit for the past year, however, is still awaited.

The auditor general stated last year that, taking into account that all fund balances should be supported by cash, an overall cash shortfall of almost R80 million existed within the municipality at the end of June 2006

The municipality, through its official spokesperson, Mr Louis Bobodi, said that since the auditor general’s report of last year, there has been an improvement in the financial status.

"A team of financial experts is assisting the existing treasury staff in all aspects of financial management whilst transferring skills at the same time as they are working in conjunction with the staff members concerned."

All media enquiries regarding the municipality’s financial status were answered fairly speedily. The only exception was the important question of the yearly surplus or deficit according to the statement of financial performance for the past year. A record was required from 1994 to date or from as far back as possible.

"The municipality has always paid all its creditors on a regular basis and therefore only current accounts owed to creditors are outstanding at any point in time," was Bobodi’s answer to a question as to the amount of debt owed by the municipality. "The total debt outstanding is R63 million, which comprises consumer services and property rates and taxes. The monthly billing for services is R15 million," Bobodi stated further.

The AG report also mentioned Council’s failure to pay VAT to the South African Receiver of Revenue. Asked whether Council has paid it in the meantime, Bobodi said: "All VAT payments are up to date."

As for feedback regarding Council’s plans and goals in respect of sound financial management, a copy of the service delivery budget implementation plan (SDBIP) of the financial services of the Makhado Municipality was forwarded. No indication of which goals had been realised was given.

Revenue enhancement and a sound debt book were objectives for the whole year and the performance measurement goal is to have a reduction of debt by R10 million. An amount of R350 000 and the operational budget will be utilised to appoint debt collectors and capacitate the existing staff. Amounts of R500 000 and R591 000 were budgeted for financial systems upgrades and furniture fittings and equipment. The time frame is the end of October this year. Correct billing on electricity and water readings was another objective.

In the budgeting office or financial control section, improved and sound municipal budgeting and budget controls were one objective. Another was the implementation of sound financial control and maintenance of accurate financial records. The completion of an accurate fixed asset register was named as an objective that should be completed by June 2008.

In the expenditure and supply management section, an accurate suppliers information database by end October was envisaged. A good relationship between the municipality and suppliers was to be maintained by 98% payment within 30 days of invoice date and 100% within 60 days. The objective of well-coordinated supply chain management processes included timeous supply of ordered materials. The activity of maintaining minimum and maximum stock levels was an activity to ensure uninterrupted supply of store material.