List of Figures Abbreviations and Acronyms LED Local Economic Development BPC Budget Planning Committee CFO Chief Financial Officer MM Municipal Manager CPI Consumer Price Index CRRF Capital Replacement Reserve Fund DBSA Development Bank of South Africa DoRA Division of Revenue Act DWA Department of Water Affairs EE Employment Equity EEDSM Energy Efficiency Demand Side Management EM Executive Mayor FBS Free basic services GAMAP Generally Accepted Municipal Accounting Practice GDP Gross domestic product GDS Gauteng Growth and Development Strategy GFS Government Financial Statistics GRAP General Recognised Accounting Practice HR Human Resources HSRC Human Science Research Council IDP Integrated Development Strategy IT Information Technology kℓ kilolitre km kilometre KPA Key Performance Area KPI Key Performance Indicator kWh kilowatt ℓ litre MEC Member of the Executive Committee MFMA Municipal Financial Management Act
Programme MIG Municipal Infrastructure Grant MMC Member of Mayoral Committee MPRA Municipal Properties Rates Act MSA Municipal Systems Act MTEF Medium-term Expenditure Framework MTREF Medium-term Revenue and Expenditure Framework NERSA National Electricity Regulator South Africa NGO Non-Governmental organisations NKPIs National Key Performance Indicators OHS Occupational Health and Safety OP Operational Plan PBO Public Benefit Organisations PHC Provincial Health Care PMS Performance Management System PPE Property Plant and Equipment PPP Public Private Partnership PTIS Public Transport Infrastructure System RG Restructuring Grant RSC Regional Services Council SALGA South African Local Government Association SAPS South African Police Service SDBIP Service Delivery Budget Implementation Plan SMME Small Micro and Medium Enterprises
Figure 3 Planning, budgeting and reporting cycle The performance of the municipality relates directly to the extent to which it has achieved success in realising its goals and objectives, complied with legislative requirements and meeting stakeholder expectations. The municipality therefore has adopted one integrated performance management system which encompasses: Planning (setting goals, objectives, targets and benchmarks); Monitoring (regular monitoring and checking on the progress against plan); Measurement (indicators of success); Review (identifying areas requiring change and improvement); Reporting (what information, to whom, from whom, how often and for what purpose); and Improvement (making changes where necessary). The performance information concepts used by the municipality in its integrated performance management system are aligned to the Framework of Managing Programme Performance Information issued by the National Treasury: Figure 4 Definition of performance information concepts The following table provides the main measurable performance objectives the municipality undertakes to achieve this financial year. Table 15 MBRR Table SA7 - Measurable performance objectives
cash flows. The funding compliance measurement table essentially measures the degree to which the proposed budget complies with the funding requirements of the MFMA. Each of the measures is discussed below. Table 44 MBRR SA10 – Funding compliance measurement Cash/cash equivalent position The municipality forecast cash position was discussed as part of the budgeted cash flow statement. A ‘positive’ cash position, for each year of the MTREF would generally be a minimum requirement, subject to the planned application of these funds such as cash-backing of reserves and working capital requirements. Cash plus investments less application of funds The purpose of this measure is to understand how the municipality has applied the available cash and investments as identified in the budgeted cash flow statement. The detail reconciliation of the cash backed reserves/surpluses is contained in Table 25, on page 25. Monthly average payments covered by cash or cash equivalents The purpose of this measure is to understand the level of financial risk should the municipality be under stress from a collection and cash in-flow perspective. Regardless of the annual cash position an evaluation should be made of the ability of the municipality to meet monthly payments as and when they fall due. Surplus/deficit excluding depreciation offsets The main purpose of this measure is to understand if the revenue levels are sufficient to conclude that the community is making a sufficient contribution for the municipal resources consumed each year. An ‘adjusted’ surplus/deficit is achieved by offsetting the amount of depreciation related to externally funded assets. Municipalities need to assess the result of this calculation taking into consideration its own circumstances and levels of backlogs. It needs to be noted that a surplus does not necessarily mean that the budget is funded from a cash flow perspective and the first two measures in the table are therefore critical. Property Rates/service charge revenue as a percentage increase less macro inflation target The purpose of this measure is to understand whether the municipality is contributing appropriately to the achievement of national inflation targets. This measure is based on the increase in ‘revenue’, which will include both the change in the tariff as well as any assumption about real growth such as new property development, services consumption growth etc. Cash receipts as a percentage of ratepayer and other revenue This factor is a macro measure of the rate at which funds are ‘collected’. This measure is intended to analyse the underlying assumed collection rate for the MTREF to determine the relevance and credibility of the budget assumptions contained in the budget.