{"id":62892,"date":"2024-03-18T17:31:27","date_gmt":"2024-03-18T17:31:27","guid":{"rendered":"https:\/\/www.africa-press.net\/south-africa\/all-news\/treasury-flags-big-problems-at-municipalities-including-a-r30-billion-jump-in-debt"},"modified":"2024-03-18T18:38:57","modified_gmt":"2024-03-18T18:38:57","slug":"treasury-flags-big-problems-at-municipalities-including-a-r30-billion-jump-in-debt","status":"publish","type":"post","link":"https:\/\/www.africa-press.net\/south-africa\/all-news\/treasury-flags-big-problems-at-municipalities-including-a-r30-billion-jump-in-debt","title":{"rendered":"Treasury flags big problems at municipalities \u2013 including a R30 billion jump in debt"},"content":{"rendered":"

Africa-Press – South-Africa. <\/strong><\/span>The underspending of grant allocations, accumulating customer and municipal debt, and inadequate progress in revenue collection across South Africa\u2019s 257 municipalities remain a cause of concern for the National Treasury.<\/p>\n

This was outlined by the Treasury discussing the recently released Local Government Revenue and Expenditure report for the second quarter of the 2023\/24 financial year (up until 31 December 2023).<\/p>\n

Municipal spending<\/b><\/p>\n

Municipal spending on both operating and capital budgets accounted for 46.3%, or R283.5 billion, of the total approved expenditure budget of R612 billion.<\/p>\n

Revenue from billing and other sources reached 50.3%, or R310.9 billion, of the total approved revenue budget of R618.5 billion.<\/p>\n

Municipalities also set aside R154.5 billion for salaries and wages. This marks a R7.9 billion, or 5.4%, rise from the R146.6 billion budget allocated for the 2022\/23 municipal financial year. By 31 December 2023, R72.8 billion, or 47.2% of the allocated budget for salaries, had been used.<\/p>\n

Treasury warned that grave underspending in this regard could have dire consequences on respective municipalities, especially in terms of councils fulfilling their service delivery mandates.<\/p>\n

Underspending grants<\/b><\/p>\n

Regarding conditional grants as of December 31, the Treasury said R27.8 billion or 63.5% of the R43.7 billion allocated to municipalities had been transferred to local councils for 2023\/24.<\/p>\n

Looking at four grants (the Municipal Infrastructure Grant, Integrated Urban Development Grant Water, Municipal Disaster Recovery Grant and the Public Transport Network Grant), these all have a spending performance of below 50% (between 25% \u2013 49.3%).<\/p>\n

Treasury said that low expenditure on grants \u201cis a source of concern because this slow performance may eventually lead to unspent conditional grants that have to revert to the National Revenue Fund (NRF).\u201d<\/p>\n

\u201cThe surrendering of unspent conditional grants to the NRF has negative consequences to the communities that must receive the services linked to the infrastructure to be built,\u201d added Treasury.<\/p>\n

Notably, Gauteng\u2019s metros are some of the municipalities that have received warnings over their underspending of grant allocations \u2013 with Treasury threatening to cut the funds.<\/p>\n

Municipal customer debt<\/b><\/p>\n

Looking at revenue owed to municipalities, aggregate municipal consumer debts jumped by over R30 billion over the quarter to R338.2 billion (compared to R306.7 billion in Q1).<\/p>\n

A total amount of R6.4 billion (1.9%) has been written off as bad debt.<\/p>\n

The report shows that while municipalities have budgeted for a 75.6% collection rate, their aggregated actual collection performance for billed accounts is only 58.4%.<\/p>\n

\u201cThe underperformance of actual collections against billed revenue holds a significant risk for the liquidity position of most municipalities as the planned expenditure is based on a higher performance level,\u201d said Treasury.<\/p>\n

However, Treasury said that it is important to note that revenue estimates are \u201cseldom underpinned by realistic or realisable revenue assumptions; resulting in municipalities not being able to collect this revenue, [which results] in difficulties in cash flow.\u201d<\/p>\n

On top of this, a total of R104.3 billion is owed by municipalities \u2013 an increase of R2.9 billion from first quarter of 2023\/24.<\/p>\n

For More News And Analysis About South-Africa<\/a> Follow Africa-Press<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Africa-Press – South-Africa. The underspending of grant allocations, accumulating customer and municipal debt, and inadequate progress in revenue collection across South Africa\u2019s 257 municipalities remain a cause of concern for the National Treasury. This was outlined by the Treasury discussing the recently released Local Government Revenue and Expenditure report for the second quarter of the […]<\/p>\n","protected":false},"author":84,"featured_media":62891,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2,5],"tags":[274,315,275],"class_list":["post-62892","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-all-news","category-economy","tag-africa-press","tag-africa-press-south-africa","tag-south-africa-2"],"yoast_head":"\nTreasury flags big problems at municipalities \u2013 including a R30 billion jump in debt - South Africa<\/title>\n<meta name=\"description\" content=\"The underspending of grant allocations, accumulating customer and municipal debt, and inadequate progress in revenue col ...\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.africa-press.net\/south-africa\/all-news\/treasury-flags-big-problems-at-municipalities-including-a-r30-billion-jump-in-debt\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Treasury flags big problems at municipalities \u2013 including a R30 billion jump in debt\" \/>\n<meta property=\"og:description\" content=\"The underspending of grant allocations, accumulating customer and municipal debt, and inadequate progress in revenue col ...\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.africa-press.net\/south-africa\/all-news\/treasury-flags-big-problems-at-municipalities-including-a-r30-billion-jump-in-debt\" \/>\n<meta property=\"og:site_name\" content=\"South Africa\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/AfricaPressTunisiaa\" \/>\n<meta property=\"article:published_time\" content=\"2024-03-18T17:31:27+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2024-03-18T18:38:57+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/static.africa-press.net\/south-africa\/sites\/31\/2024\/03\/sm_1710774413.104685.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"640\" \/>\n\t<meta property=\"og:image:height\" content=\"437\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"cfeditoren\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"cfeditoren\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/treasury-flags-big-problems-at-municipalities-including-a-r30-billion-jump-in-debt#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/treasury-flags-big-problems-at-municipalities-including-a-r30-billion-jump-in-debt\"},\"author\":{\"name\":\"cfeditoren\",\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/#\/schema\/person\/068c7ab4e9634ae78ec5d54ec46598bb\"},\"headline\":\"Treasury flags big problems at municipalities \u2013 including a R30 billion jump in debt\",\"datePublished\":\"2024-03-18T17:31:27+00:00\",\"dateModified\":\"2024-03-18T18:38:57+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/treasury-flags-big-problems-at-municipalities-including-a-r30-billion-jump-in-debt\"},\"wordCount\":497,\"commentCount\":0,\"image\":{\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/treasury-flags-big-problems-at-municipalities-including-a-r30-billion-jump-in-debt#primaryimage\"},\"thumbnailUrl\":\"https:\/\/static.africa-press.net\/south-africa\/sites\/31\/2024\/03\/sm_1710774413.104685.jpg\",\"keywords\":[\"Africa Press\",\"Africa Press-South-Africa\",\"South-Africa\"],\"articleSection\":[\"all news\",\"economy\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/www.africa-press.net\/south-africa\/all-news\/treasury-flags-big-problems-at-municipalities-including-a-r30-billion-jump-in-debt#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/treasury-flags-big-problems-at-municipalities-including-a-r30-billion-jump-in-debt\",\"url\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/treasury-flags-big-problems-at-municipalities-including-a-r30-billion-jump-in-debt\",\"name\":\"Treasury flags big problems at municipalities \u2013 including a R30 billion jump in debt - 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