The Finance Department is mainly responsible legal and sound financial management through:
- planning and preparation of the municipal budget;
- Ensuring effective internal controls and processes for revenue management;
- Debt management;
- Effective Supply Chain Management processes with main focus on fairness, equity and transperancy;
- Accurate and timely financial reporting.
The department in 2013/2014 financial year managed to prepare and submit to the Auditor General its annual financial statements and tabled the 2014/2015 budget for adoption by the municipal council as per the legislative timelines. Although the municipality received a disappointing disclaimed audit opinion, the management has not given up on ensuring that the current financial year’s (2014/2015) audit outcome is improved. An action plan addressing all the Auditor General’s raised findings has been developed and stringent evaluation and monitoring on the implementation of the municipal measures to correct the situation is in place.
The department as at end of December 2014 managed to reduce the cashbook overdraft from R34 million to R14million. The cash-flow situation continues to be unfavourable; however, robust initiatives focusing on revenue collection have been developed. The revenue enhancement strategy of the municipality is under review and it contains various strategies. Critically, is the establishment of the revenue Protection Unit within the Finance department which is daily on the ground engaging businesses with consumer accounts in arrears and effect cut-offs.
The 2014/2015 municipal budget has been approved for adjustment based on a realistic average payment rate of 72%. The adjustment has been approved by the municipal Council to ensure that the municipality work towards a cash backed. This resolution further encourages the municipal management to develop and implement a cost curtailment strategy.
The department continues to enforce the compliance to the municipal supply chain management policy, scm regulations and the MFMA. All payments are reviewed before payments to ensure that all have followed the procurement processes. Should there be payments found to be non-compliant to procurement, the expenditure incurred shall be declared accordingly. The municipality is ensuring that all suppliers are vetted and screened before they are registered into our database in order to ensure that no employees of the municipality and the state continue to do business with the municipality.
Records management has been improved through ensuring that registers are in place for signing out and in of financial documents as well as bid documents.
In conclusion, it is of utmost importance that the department focuses on resolving the issues raised by the Auditor General as basis of the disclaimer. However, it must be noted that the Finance Department cannot resolve the raised findings in isolation without support and co-operation from other departments especially on procurement issues.