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2013 Report on the Financial Status of our Municipalities

Date: 09-12-2013


National Treasury has released their 2013 report on the financial status of our municipalities (as at 30 June). Treasury's annual analysis incorporates a number of key financial indicators to determine the financial well being of South Africa's local government.  Smart Metro looks at some of the major talking points of this year's report: 

  • 95 of the 278 municipalities were reported to be in financial distress. This is just one less than last year. 
  • Direct correlation between poor audit outcomes and the absence of a permanent Municipal Manager and/or Chief Financial Officer. 
  • Acting MM's and CFO's: 48 Municipalities (17%) had acting Municipal Managers; 60 Municipalities (22%) had acting Chief Financial Officers; 22 Municipalities (8%) had both an acting MM and an acting CFO. 
  • 42% of the CFO's in the Free State were acting. 
  • 226 municipalities (71%) made use of external consultants at a total cost of R378m for the year. 
  • 52 municipalities (19%) reported a negative cash closing position for the year. 
  • 142 municipalities have a cash coverage ratio of less than one month!
  • Overspending on operational budgets has decreased significantly to R2.6bn (from R8bn last year)
  • Underspending on capital budgets remains high at R13.4bn (24.7%). 
  • 190 municipalities had debtor levels higher than 30% of own revenue (up from 154 municipalities last year).
  • Total municipal debtors has increased from R78bn to R87bn (11.5%). 

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