SALGA LIMPOPO MUNICIPAL FINANCE WEEK 7-8 FEBRUARY 2012 Financial skills enhancement and professional development 1

A MUNICIPALITY IS A BUSINESS AND SHOULD BE RUN ON SOUND BUSINESS PRINCIPLES Entrepeneurial skills Available cash/resources Planning Targeted market niche Product service delivery Gearing for lessons learned 2

ENTREPENEURIAL SKILLS Management and structures having an oversight role must be totally focussed and goal directed Everybody must have their sights set on the target planned for All deviations to plans must be adapted to immediately Discipline is everything on the path to achieving success Failure is not an option 3

CASH RESOURCES AVAILABLE When compiling a budget ensure that you do the income budget first. The cash must be available in your bank. Or pledged by n.t. Ito of dora or mig Never pledge funds before you have received them in your bank Comply stringently with your revenue and debt collection policy (this is where support is needed most from oversight bodies) Provide sufficiently for losses on debtors. 4

PLANNING Revenue is conservatively forecast Determine expenditure within the constraints of your income/cash projection Scour yor expenditure to ensure that there is no unnecessary expenditure/cutback if there is. Ensure that you do not cutback on maintenance and essential services or bypass statutory requirements 5

PRODUCT SERVICE DELIVERY All products purchased in bulk must be re packaged and sold to consumers for a profit Profits may not be exorbitant. (Industries in a metro claim to be paying double the price of electricity that the bulk tariff is that the municipality is paying eskom) All consumer charges should be collected promptly to ensure that a sustainable cashflow is maintained All statutory requirements must be complied with section 71 and such like reports 6

TARGETED MARKET NICHE In public finance the market niche is determined by legislation Try and maximise returns from your consumers without exploitation. Install networks that are affordable to communities. The public participation process when determining tariffs should never be treated lightly In order for bills to be correct your databases must be updated and correct 7

GEARING FOR LESSONS LEARNED Consultation with communities Simplify local government finance legislation and standards to enable municipal finance officers to do produce their own annual financial statements Ensure national and provincial oversight supports local councillors when contentious issues and protests surface. 8

PROFESSIONSLISATION Municipal regulations on minimum competency levels Achieve competence- qualification through unit standards versus notional study hour formal qualifications Councillors can improve their lg finance knowledge to strengthen the civic knowledge in their communities 9

IMFO RECOGNITION AS A PROFESSIONAL BODY BY SAQA 1988 imfo obtains statutory recognition, law 21 of 1988 dissolved in 2005 Board for municipal accountants established in 1988, dissolved in 2005 Recognised by saqa as a professional body in december no professional body for lg 10

IT IS NOW TIME FOR CLOSING RANKS It is time to consolidate the focus areas of sector\provincial and local government focus areas and eliminate all of the costly nice to haves. A national conference needs to be held to include the audit approach of the auditor- general to form a national strategy to improve audit outcomes. 11

Remember that genius is 90% perspiration and 10% inspiration Let us take hands and combine all of our resources to create a better life for all in Thank You 12