Treasury releases local government revenue and expenditure

Local Government Revenue and Expenditure: Third Quarter Local Government Section 71 Report

National Treasury has today released local government’s revenue and expenditure for the third quarter of the 2015/16 financial year, as well as spending on conditional grants for the same period.  This report covers the third quarter of the municipal financial year ending on 31 March 2016.

The report is part of the In-year Management, Monitoring and Reporting System for Local Government (IYM) which enables provincial and national government to exercise oversight over municipalities, and identify possible problems in implementing municipal budgets and conditional grants.

In-year reporting is now well institutionalised with most municipalities consistently producing quarterly financial reports. The reporting facilitates transparency, better in-year management as well as the oversight of budgets, making these reports management tools and early warning mechanisms for councils and officials to monitor and improve municipal performance.

Key trends:

Aggregate trends

1. On aggregate, municipalities spent 62.2 per cent, or R236.4 billion, of the total adjusted budget of R377.8 billion as at 31 March 2016 (third quarter results for the 2015/16 financial year).  In respect of revenue, aggregate billing and other revenue amounted to 70.6 per cent or R262.1 billion of the total adjusted revenue budget of R371.2 billion.
2. In the period under review, capital expenditure amounted to R32.2 billion or 47.5 per cent of the adjusted capital budget of R67.8 billion. Generally, spending has increased from the second quarter of this year and the performance has increased compared to the third quarter of the previous year.
3. Of the adjusted operating expenditure budget amounting to R310 billion, R204.3 billion (66 per cent) was spent by 31 March 2016.
4. Municipalities have adjusted the budget for salaries and wages expenditure to R84.2 billion for the 2015/16 municipal financial year. This represents 27.2 per cent of their total operational expenditure budget of R310 billion.  At 31 March 2016 spending is R61.4 billion or 72.9 per cent.
5. Aggregated year-to-date expenditure reported by metropolitan municipalities amounts to R141.4 billion or 65 per cent of the adjusted budget of R217.5 billion. The aggregated adjusted capital budget for metros in the 2015/16 financial year was R35 billion of which they have spent 46.6 per cent or R16.3 billion.

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