Oudtshoorn, 23 February 2016 – The Oudtshoorn Municipality Council passed the town’s adjustment budget for 2015/2016 at a Special Council meeting with the Administrator early this week.
The Mid-Year financial report which was also tabled before the Administrator and Council shows that the Municipality’s financial position is still very critical, particularly the cash flow. This can be attributed to the fundamentally flawed initially approved budget for the 2015/2016 financial year in respect of the principles applied in the compilation thereof which negated the strive towards financial sustainability to the extent that the municipality currently finds itself in severe financial distress.
The budget was a deficit budget and not credible, nor did it support the principles of financial sustainability and viability,” said Mr. Kam Chetty, the administrator. “It was however evident in the revision that certain revenue streams were overestimated and a correction needed to be done.”
The high level summary financial report shows every month the Municipality have a negative balance. The Municipality struggles to meet its current commitments as well as its outstanding creditors. The Administrator and his team however continue to stop the bleeding in the Municipality which is a daunting task.
Income and expenditure streams that were overestimated or under estimated were corrected in the adjustment budget. The budget is still a deficit budget.
Good news is that the Councillors have unanimously agreed not to accept their salary increase saving the Municipality just over R 3 Million for the current financial year. Councillors can be commended for this action since they recognize that the situation is dire. This is an additional savings as all councillors are currently receiving an ordinary councillor’s salary since the Municipality was put under administration last year.
Other highlights during the Special Council Meeting include the following:
- The Annual Report has been tabled timeously before Council for the first time in about three years. This annual report which also includes audited financial statements will now been published on the Municipal website as well as at the Libraries for public consumption and comments.
- The Municipality also approved a Service Delivery and Budget Implementation Plan (SDBIP) which will also be made public.
- The Council has also approved By-Laws on Spatial Planning and Land Use Management Act (SPLUMA)
“This is part of the process of normalizing the process of Council in normalizing the Municipality. However the financial recovery will take between three to five years given the financial position of the Municipality,” Chetty concluded.