The National Treasury has noted, in a preliminary quarterly report, that municipalities spent 91.9% of the total adjusted expenditure budget that was afforded to local government in the 2020/21 financial year.
Municipalities spent R446-billion of the allocated R485-billion for the financial year.
Thirty one per cent of the total adjusted operational expenditure budget constituted salaries and wages.
In the period under review, municipalities’ capital expenditure amounted to R55.6-billion, or 80%, of the adjusted capital budget of R69-billion.
In respect of revenue, aggregate billing and other revenue amounted to 95%, or R461.2-billion, of the total adjusted revenue budget of R482-billion.
Treasury reports that, when billed revenue is measured against their adjusted budgets, the performance of metros, in particular, reflects a shortfall across water services for the fourth quarter of the 2020/21 financial year.
Water revenue billed was R24.6-billion, against expenditure of R28-billion, while energy sources billed was R78-billion against expenditure of R72-billion.
Wastewater management revenue billed came to R7.3-billion, against expenditure of R7.2-billion and levies for waste management billed were R10.2-billion against expenditure of R9.2-billion.
Aggregate revenue collected for secondary cities was 109%, or R74-billion, of their total adjusted revenue budget of R68-million for the 2020/21 financial year.
Treasury says the performance against the adopted budget for the four core services for the secondary cities also shows surpluses against billed revenue.
Capital spending levels for secondary cities are reported at 90%, or R7.1-bllion, of the adjusted capital budget of R7.8-billion.
Further, aggregate municipal consumer debts amounted to R232-billion in the quarter ended June 30.
This while metropolitan municipalities were owed R114-billion as at the end of June.
An amount of R44-billion was owing to secondary cities.
In turn, municipalities owed their creditors R73-billion at the end of June, while the total balance on borrowing for all municipalities equated to R71-billion.
Overall, Treasury explains, a net total underspending of R39-billion, or 8.1%, of municipalities’ total adjusted expenditure budgets was reported.
Compared with the R96.9-billion recorded as net total underspending in 2019/20, there has been a decrease of R57-billion year-on-year, but this decrease might be misrepresented by municipalities that do not submit their required data strings on time and the fact that many of the submissions do not contain credible data.
Treasury says that, for many years, it has been publishing conditional grant expenditure as reported by municipalities but with the verifications of the respective municipalities through the sign-off process by the accounting officers.
While this has improved both the coverage of reporting, it has also improved the quality of information being reported.
However, there remains scope for improvement on the efficiency of spending between different municipalities.