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Nelson Mandela Bay’s budget for the 2012/13 financial year has been cut by R196 million following interaction with National Treasury to ensure it meets the requirement of being cash backed.
Briefing this morning’s joint meeting of the Mayoral and Budget and Treasury committees, Acting Chief Financial Officer Selwyn Thys said the initial draft budget presented in March had reflect-ed a shortfall of R196.8 million.
He said that R38 million would be cut from the budget from savings on the operational budget in areas such as expenditure on traveling, overtime, telephones, consultants and other soft items.
In addition, a further R46 million had been taken from the capital budget, mainly the construction of the scientific laboratory, that would now be included in the 2014/15 budget.
He said a further R60 million had also been cut from the operating budget with the balance coming from the capital budget that would be replaced with VAT returns that had been paid on conditional grants.
Thys said National Treasury had also been an issue with the inclusion of unspent conditional grants being included in the budget.
He said this could not happen until National Treasury had approved the roll-over of the grants - Integrated Public Transport Systems, Water Drought Re-lief and Neighbourhood Partnership grants.
Thys told the meeting that National Treasury had also raised a number of other issues, including the need to “expedite the appointment of a municipal manager and chief financial officer and to ensure that people appointed to positions were appropriately qualified.
In addition, he said, Treasury wanted the municipality to ensure that delivery targets were linked to the budget that was available and to align spending patterns with income.
Further, it said there was a need to develop a long-term financial strategy.
He said the budget would be presented to Council on Wednesday and would thereafter be refined and referred to National Treasury for approval before being presented to Council for adoption.
Source: Metro Minute (To subscribe mail metminutes@iafrica.com)
