Written by Kormorant | 2 September 2010

Madibeng municipality has no money for anything but the most essential services and maintenance. That was the message of the Administrator, Mr Eric Matlawe, when he presented the restructured budget and the financial recovery plan to a cluster meeting in Brits last week.

The 2010 / 2011 budget was restructured after the initial budget was rejected by National Treasury and with its assistance as well as facilitation from Development Bank of Southern Africa (DBSA) appointees the restructured budget is what is termed a “Cash Backed” budget. The ward councilor for ward 30, Clr Greame Peplar, explains that this means that the income budgeted for the 2010 / 2011 financial year is equal to the actual moneys received for the 2009 / 2010 financial year concentrating on the main income sources viz. rates, electricity, water, solid waste and sewage levies. The operating expenses had to be cut by R258 million to be covered by the reduced revenue budget and a further cut of R146 million on the capital budget has also been implemented.

Kormorant earlier reported that the initial budget, which generated considerable controversy, was forced through by the majority party in the council despite objections that it did not comply with financial regulations and was described by the opposition as the worst budget ever compiled by Madibeng municipality. It was the first budget since the municipality has been put under administration and its rejection by the Treasury was no surprise. Amongst other provision for items such as contracted services had been reduced by almost R30,5 million while R2,5 million for contractors' commission was removed completely. An amount of R900 thousand for community participation was reduced to R50 thousand while the provision of R1,2 million for the training of personnel and councilors has also been scrapped.

As was reported last week, a financial recovery plan has been compiled by a task team comprising officials from the National Treasury, the Provincial Treasury, the DBSA and municipal officials. The document is severely critical of the way the municipality has been managed up to now and the restructuring of the budget is one of the steps to implement the recovery plan. Matlawe said that the recovery plan would be the 'development bible' of Madibeng. He appealed to councilors to be honest with the community in order to involve them in the recovery process to get Madibeng functioning again.

As Peplar put it, “The long and short of it all, don't expect any major projects to take place. First and foremost is repair and maintenance of the current infrastructure.”

A revised budget will be presented and adopted in January 2011 and it is hoped that a significant change in the finances will be noted by then.