A Guide for Councillors

Part 4 Understanding the Municipal Finance Management Act

To draw up a budget a council needs to follow a cycle of activities that starts about a year before the beginning of each fi nancial year. The mayor leads a review of the previous budget process to see what went well and what improvements can be made. Following this review the mayor then tables in council the schedule of key deadlines for the new budget process.

The role of councillors

I MUST REMEMBER TO BUDGET FOR UPGRADING THE POWER SUPPLY IN SECTION A OF MY WARD. I DON ‛ T WANT A REPEAT OF LAST YEAR!

WE MUST BUDGET FOR REGULAR MAINTENANCE FOR THE NEXT THREE YEARS.

last year...

WE WANT ELECTRICITY AND STREET LIGHTS!

WE WANT BETTER SERVICE DELIVERY NOW!

There were fi ve power outages in July and August.

Councillors must make sure that the budgets they approve are realistic. They must be based on realistic estimates of revenue to be collected and realistic expenditure estimates. They must strike a balance between revenue anticipated to be collected and anticipated expenditure. All contractual obligations must be fully provided for and allocations must be set aside for operating costs and maintenance of assets such as streets, water and sewerage pipes.

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The Role of Councillors in Municipal Finance Management