1. Presentation to the Select Committee on Finance
Oversight visit to the province city of caPE TOWN BUDGETARY PERFORMANCE AND SUPPORT PROVIDED AS AT THE END OF THE SECOND quarter FOR the 2016/17 financial year
Presentation to the Select Committee on Finance
Parliament
Mr A Dyakala
31 January 2017

2. Presentation Outline Introductory remarks
Presentation by the Provincial Treasury
Summary YTD budget performance as at 31 December 2016
Operating Revenue Budget Performance
Operating Expenditure Budget Performance
Capital Budget Performance
Debtors
Closing remarks by the MEC: Finance
Budgetary Performance & Support provided as at the end of the Second Quarter for the 2016/17 financial year

3. Introductory remarks

4. OVERSIGHT RESPONSIBILITIES IN RESPECT OF THE MFMA
The Minister of Finance is responsible for administering the MFMA in its totality. In order for the effective and holistic operation of the MFMA, the Minister of Finance delegated certain responsibilities to the MECs for Finance in all provinces, relating to support, oversight and administrative procedures in respect to municipalities within their respective provinces.
The National Treasury however retained the monitoring and administrative oversight role in relation to the largest municipalities in each province, which include the City of Cape Town in the Western Cape.
The Provincial Treasury plays a supporting role to the National Treasury in its oversight responsibilities.
Budgetary Performance & Support provided as at the end of the Second Quarter for the 2016/17 financial year

5. City of Cape Town
Section 71 : Municipal Budget Performance as at 31 December 2016

6. Introductory remarks
Financial information contained in the presentation is sourced from the section 71(1) of the Municipal Finance Management Act (Act 56 of 2003)(MFMA) as at 31 December 2016 (also known as the In-Year monitoring (IYM) reports)
On a monthly basis, the accounting officer of a municipality must by no later than 10 working days after the end of each month submit to, amongst others, the relevant provincial treasury a statement in the prescribed format on the state of the municipality’s budget
Budgetary Performance & Support provided as at the end of the Second Quarter for the 2016/17 financial year

7. Summary of the Second Quarter Financial Outcome as at 31 December 2016
Description R'000
Original Budget
Adjusted Budget
YTD Actual
YTD Budget
YTD % of Adjusted Budget
YTD Variance
YTD Variance %
Full Year Forecast
Total Revenue (excluding capital transfers and contributions)
52%
4.00
Total Expenditure
44%
( )
(5.30)
Surplus/(Deficit)
( )
(27 900)
110.06
Transfers recognised - capital
38%
44.22
Contributions recognised- capital and contributed assets -
(16 512)
34 995
(51 507)
(147.18)
Surplus/(Deficit) after capital transfers & contributions
86.82
Share of surplus/(deficit) of associate
Surplus/(Deficit) for the year
Capital expenditure
34%
18.79
Total sources of capital funds
Total outstanding debtors
Total outstanding creditors
Budgetary Performance & Support provided as at the end of the Second Quarter for the 2016/17 financial year

8. Operating Revenue Budget Performance
The City is well on track with the implementation of the operating budget and on aggregate the operating revenue budget performance for the period up to 31 December 2016 amounts to 52 per cent of the total adjusted budget of R34.93 billion
An under performance is noted on the Fines revenue collected to date. The YTD collection is only at 29 per cent
Below is a representation of how the YTD revenue has been collected
Budgetary Performance & Support provided as at the end of the Second Quarter for the 2016/17 financial year

9. Operating Expenditure Budget Performance
Operating expenditure amounts to 44 per cent of the total adjusted budget of R34.96 billion and the spending performance is affected by the annual processing of non-cash items
The YTD performance on transfers and grants reflects an underspending as it is only at per cent
Below is a representation of how the YTD budget has been spent
Budgetary Performance & Support provided as at the end of the Second Quarter for the 2016/17 financial year

10. Capital budget performance
Funding composition of the YTD capital expenditure
YTD Capital Expenditure per Vote
The YTD capital expenditure amounts to per cent
Progress on the top 10 capital projects are being tracked on a monthly basis by Provincial Treasury
Budgetary Performance & Support provided as at the end of the Second Quarter for the 2016/17 financial year

11. Debtors
The total outstanding debtors amounts to R7.58 billion of which the most significant income sources contributing to total debt are Water services and Property rates
The total outstanding debtors, older than 90 days, amounts to R5.31 billion and it equates to 70 per cent of the total aggregated outstanding debtors
Households reflect the largest over 90 day’s customer category with the largest overdue debt relate to water (38.4%) and property rates (16.88%)
Budgetary Performance & Support provided as at the end of the Second Quarter for the 2016/17 financial year

12. Creditors
The total accounts payable at 31 December 2016 amounted to R million
The negative amount is due to legal dispute that awaits legal directive
Budgetary Performance & Support provided as at the end of the Second Quarter for the 2016/17 financial year

13. Cash flow
The monthly cash coverage is 1.20 times as at the end of December This indicates that the cash inflows exceed cash outflows. The cash coverage year-to-date is 1.01 and the short term debt will be met for the year ahead
The closing balance on the Investment Portfolio indicates an amount to R9.85 billion as at end of December 2016
The closing balance indicates an amount of R6.51 billion as at end of December Included in this amount, the municipality has external loans of R2.31 billion and Bonds (Local Registered Stock) of R4.20 billion. Sinking Fund amount to R2.06 billion for the month C
Budgetary Performance & Support provided as at the end of the Second Quarter for the 2016/17 financial year

14. Support provided to the City of Cape Town

15. Towards strengthening evidence-based planning… economic intelligence
Regional economic review
Sectoral growth, employment and skills per municipal area
Value Chains
Infrastructure spending - review and analysis
Municipal socio-economic analysis
Budgetary Performance & Support provided as at the end of the Second Quarter for the 2016/17 financial year

16. Broadband Penetration
Towards strengthening evidence-based planning… socio-economic intelligence
SEP-L
Demographics
Education
Health
Poverty
Basic Services
Safety and Security
Economy
Broadband Penetration
Budgetary Performance & Support provided as at the end of the Second Quarter for the 2016/17 financial year

17. In support of Integrated Development Planning
IDP Structure
Vision
Demographics
Powers and Functions
Development Process
Spatial Economy
Status Quo Assessment
Objectives
Sector Plans
Budgetary Performance & Support provided as at the end of the Second Quarter for the 2016/17 financial year

18. Support package: Other
WORK STREAM
INITIATIVES
MGRO
BTO Capacitation and Development
Compliance with Municipal Regulations on Minimum Competency Levels, 2007
Customisation of NT internship guidelines
Revenue Management
Government Debt Reduction and E-services facility
Expenditure Management
Expenditure Management Charter: Focus is on the continuous improvement and learning.
Supply Chain Management
Compliance with NT Instruction. Registration of Suppliers on the Central Supplier Database (CSD)
Cash Management
Organisational performance management
BEPP
Infrastructure
Provides information to the City of its investments over the MTEF in Education, Health, Human Settlements, Roads and General Infrastructure, including regeneration projects C
Budgetary Performance & Support provided as at the end of the Second Quarter for the 2016/17 financial year

20. Mr Andile Dyakala Chief Directorate : Local Government Public Finance
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