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Budget Analysis Feedback CHAIRPERSON FOR FINANCE COMMITTEES’ FORUM 29 May 2012.

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Presentation on theme: "Budget Analysis Feedback CHAIRPERSON FOR FINANCE COMMITTEES’ FORUM 29 May 2012."— Presentation transcript:

1 Budget Analysis Feedback CHAIRPERSON FOR FINANCE COMMITTEES’ FORUM 29 May 2012

2 Submission Table – Mopani District Municip ality Tabled budge t submi tted? Date of submissi on Compli ed with submis sion Deadlin e Temp late corre ct Level of complian ce acceptabl e? Budget Assessed Findings from Budget Assessment Draft Feedback sent to Municipal ity? Yes/N o Yes/ No Yes/ No Yes/ No (If No. Why?) Budget Funded (Yes/No ) Budget Sustainable (Yes/No) Cash Flow Realistic (Yes/No) Yes / No MDMYes10/4/2012Yes GLMYes17/4/2012NoYes GGMYes13/4/2012NoYes GTMYes02/4/2012Yes BPMYes10/4/2012Yes MLMYes18/4/2012NoYes

3 Summary of Findings - Mopani District FindingsAssumed root causeProposed remedial Action IDP figures differ from Budget Inadequate review before submission Alignment of the two documents Grants not align to DORA DORA was not adequately utilized when determining projections Align to DORA Lack of adequate narrations or no narrations at all Inadequate leadership commitment and inability to provide oversight role Municipalities to supply adequate narrations Budget tables not completed (particularly break down of repairs and maintenance ) Lack of understanding Inadequate review before submission Comply with the MBRR circulars Budget related policies not provided and non reviewable of policies Lack of leadership commitment Submission of policies and review of policies on annual basis Figures in printed copy differs to electronic copy Inadequate review of budget prior to submission Perform quality assessment Audited outcome figures differs to published AFS Inadequate review of budget prior to submission Perform quality assessment Local municipality budgeted water & sanitation revenue which is already budgeted for by the district municipality Non consideration of advise by the department(s) and AGSA Municipalities should apply correct accounting principles when budgeting for water and sanitation as advised. SDBIP and IDP not submitted Lack of leadership commitment Submission of hard/soft copies.

4 Submission Table – Capricorn District Municipality Tabled budget submitt ed? Date of submissio n Compli ed with submis sion Deadlin e Template correct Level of compli ance accept able? Budget Assesse d Findings from Budget Assessment Draft Feedbac k sent to Municip ality? Yes/ No Yes/ No Yes/ No Yes / No Yes/ No (If No. Why?) Budget Funded (Yes/No ) Budget Sustaina ble (Yes/No ) Cash Flow Realistic (Yes/No ) Yes / No CDMYes10/04/2012Yes No MOLEMOLEYes20/04/2012NoYesNo BLOUBERGYes12/04/2012NoYes No LEPELLE- NKUMPI Yes 12/04/2012 NoYesNo POLOKWANENo - AGANANGYes18/04/2012NoYesNo

5 Summary of Findings - Capricorn District FindingsAssumed root causeProposed remedial Action Late submission Preparing the budget on excel sheet. Unreliable financial system Municipalities to adhere to MFMA timelines To prepare the budget in the required format Non compliance with MBRR Non involvement of Provincial Treasury - request for assistance The level of involvement by the CFO / Acting CFO Training Request for assistance Inability to complete tables Non attendance of training & workshops Or information not readily available Training Budget alignment with DORAMunicipalities not considering Gazzette during the preparation Review tabled budget and recommend the alignment with DORA

6 Submission Table- Waterberg District Municipality Tabl ed budg et sub mitte d? Date of submissio n Complied with submission Deadline Templat e correct Level of complia nce accepta ble? Budget Assessed Findings from Budget Assessment Draft Feedbac k sent to Municip ality? Yes/ No Yes/ No Yes/ No Yes/ No (If No. Why?) Budget Funded (Yes/No) Budget Sustaina ble (Yes/No) Cash Flow Realistic (Yes/No) Yes / No WaterbergYes18/04/2012NoYes In Progress No Mogalakwena Yes16/04/2012NoYes NoYes LephalaleYes26/04/2012NoYes BelaBelaYes25/05/2012NoYes In Progress YesNo ModimolleYes05/04/2012Yes MookgophongYes19/04/2012No Yes NoYes ThabazimbiYes18/04/2012NoYes

7 Summary of Findings - Waterberg District FindingsAssumed root causeProposed remedial Action Submission of Incomplete budget table s Grants not aligned to DoRA Budget Related policies not submitted Inadequate review of budget prior to submission Complete all tables Alignment of the two documents Budget Related Policies to be submitted SDBIP and IDP Documents not submitted Budget Document not Numbered Late Submission of Budgets Inadequate review of budget prior to submission Number budget document Submit Budget Document on time Lack of adequate narrations or no narrations at all (underlying assumptions) Lack of understandingNarrations to be included to support budget figures

8 Submission Table – Vhembe District Municipali ty Tabled budget submit ted? Date of submissio n Complied with submissi on Deadline Templat e correct Level of complia nce accepta ble? Budget Assessed Findings from Budget Assessment Draft Feedback sent to Municipa lity? Yes/ No Yes/ No Yes/ No Yes/ No Yes/ No (If No. Why?) Budget Funded (Yes/No) Budget Sustainab le (Yes/No) Cash Flow Realistic (Yes/No) Yes / No MusinaYes18/04/2012NoYesNoYesNo Yes ThulamelaYes18/04/2012NoYesNoYesNo Yes MakhadoYes11/04/2012NoYes No Yes MutaleYes11/04/2012NoYes No Yes Vhembe District Yes18/04/2012NoYes NoYes

9 FindingsAssumed root causeProposed remedial Action The ratio of repairs and maintenance as a percentage of PPE not sufficient Inadequate plans to address backlog of repairs and maintenance of ageing infrastructure. Allocate adequate budget for infrastructure maintenance Service delivery information shows that no households will be provided with access to free basic services over the medium term. In- complete information on the budget tables. Municipality to disclose the minimum social package and the total value of the social package of services they provide to communities Cash flow not covering outstanding creditors and debtors at year end Table A5 not reconciling with SA 18 Estimates of cash flow are in straight line format. Incomplete budget tables Inadequate knowledge Inadequate review of the budget Poor planning Inadequate budget review prior submission Consider outstanding amount at year end Ensure that all tables are reconciled Consider seasonal changes All tables must be completed. Summary of Findings - Vhembe District

10 FindingsAssumed root causeProposed remedial Action Budget Related Policies are not included in the budget document Non- compliance to Budget regulations Budget Related Policies should be included as part of budget documents The municipality is on grade 3 and Remuneration of councillors is higher than the upper limits (December 2011). Non compliance to the upper limits government notice No: issued The municipality is advised to utilize upper limits when preparing budget. Grants not align to DORA DORA was not adequately utilized when determining projections Align to DORA Budget not aligned to IDP Infrastructure project funded by national grants Ignored IDP document during budget preparations Consider IDP document when preparing the budget

11 Submission Table –Sekhukhune District Municipality Tabled budget submit ted? Date of submissio n Complied with submission Deadline Templat e correct Level of compli ance accept able? Budget Assesse d Findings from Budget Assessment Draft Feedba ck sent to Munici pality? Yes/ No Yes/ No Yes/ No Yes/ No (If No. Why?) Budget Funded (Yes/No ) Budget Sustain able (Yes/No ) Cash Flow Realisti c (Yes/No ) Yes / No Ephraim MogaleYes10/04/2012YesNo YesN/A Yes FetakgomoYes17/04/2012NoYes NoYes TubatseYes13/04/2012NoYesNoYes No Yes Elias Motsoaledi Yes 17/04/2012NoYesNoYesN/A Yes SekhukhuneYes30 /03/ 2012Yes NoYesNo Yes MakhuduthamagaYes18 /04/ 2012NoYesNoYesNo Yes

12 Summary of Findings - Sekhukhune District FindingsAssumed root causeProposed remedial Action Budget tabled in wrong formatLack of knowledge and capacity to capture budget on the NT template Table budget in NT template Incomplete Budget Tables and Late submission of budget Tabling budget in excel format Poor coordination btw BTO and other units Poor time management/ late commencement of budget capturing Table budget in NT template Improve Coordination between all units Inadequate provision for R& M No separation btw R&M and Asset Renewal & New Assets Construction No substantiation for R&M ratios below the NT guideline Poor coordination between BTO and other units. Non consideration of NT guidelines Increase provision for R&M or provide adequate substantiation Advise the MM and Political leadership on the importance and guidelines by NT No narrations and supporting documents, i.e. SDBIP, Draft IDP & signed quality certificate Non consideration of MBRR and MFMA Circulars Adherence to legislation and improved communication with PT as supporting department Forgone revenue not disclosed in the relevant schedule. (SA 1) Improper application of budgeting principles No review of budget by relevant authorities Proper disclosure of revenue foregone in budget tables Increased provision for doubtful debt projected / Low revenue collection (sustainability doubtful) Poor culture of payments by communities Challenges in collection in rural area Ineffective implementation of credit and debt collection policies By-In from the political leadership – encourage communicates to pay/awareness campaigns Higher grant dependency to fund the capital budget/ Continued dependence on grants No surplus revenue from operating revenue Low collection rate By-In from the political leadership – encourage communicates to pay/awareness campaigns

13 Way forward PT to assess final budget and forward(engage) municipalities on findings


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