A Guide for Councillors

The Role of Councillors in Municipal Finance Management

Part 1

The council must ensure that themunicipality meets its fi nancial commitments and that it avoids fi nancial problems. Some fi nancial problems may be over-spending, under- spending or unplanned spending, or poor revenue forecasting, billing or collection. Budget reports must show whether: the council has a continuous bank overdraft creditor payments are made within 30 days outstanding electricity, rates and water accounts are being collected expenditure is in line with plans. • • • •

IF WE THINK THERE IS A FINANCIAL PROBLEM WE MUST DEAL WITH IT. COUNCIL CAN ASK THE MUNICIPAL MANAGER TO PRESENT A PLAN OF HOW THE COUNCIL CAN DEAL WITH THE PROBLEM. WE CAN ‛ T AFFORD TO LOSE OUT ON THAT MONEY!

I HEARD THAT HOMES IN SIGNAL HILL ARE NOT PAYING RATES AND THEY DON ‛ T EVEN GET ACCOUNTS… WE WILL NEVER BE ABLE TO GET IN THE MONEY WE NEED…

WHAT KIND OF PLANS DOES HE PRESENT? WHAT CAN WE DO?

IT IS NOT A GOOD THING, BUT STILL IT ‛ S BETTER THAN THE MUNICIPALITY RUNNING INTO FINANCIAL DIFFICULTIES.

USUALLY HE MUST EXPLAIN HOW WE PLAN TO GET IN THE MONEY. IF WE CAN ‛ T GET IT IN, WE MAY HAVE TO CUT THE BUDGET.

A CONTRACTOR IN MY WARD DID A JOB FOR US NINE MONTHS AGO, HE HAS NOT BEEN PAID YET. I AM SO EMBARRASSED, HE KEEPS ASKING ME TO DO SOMETHING.

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Understanding the Municipal Finance Management Act