Treasury on Publication of Local Government Section 71 Information for Second Quarter

Local Government Revenue and Expenditure: Second Quarter Local Government Section 71 report for the period: 1 July 2017 31 December 2017National Treasury has today released local government's revenue and expenditure for the second quarter of the 2017/18 financial year, as well as spending on conditional grants for the same period. This report covers the second quarter of the municipal financial year ending on 31 December 2017.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 institutionalised with most municipalities that consistently produce quarterly financial reports. The reporting facilitates transparency, better in-year management as well as the oversight of municipal budgets.

This makes these reports management tools and early warning mechanisms for councils, provincial legislatures and officials in order to monitor and improve municipal performance.Key trends:brAggregate trends1. On aggregate, municipalities spent 40.4 per cent, or R168.3 billion, of the total adopted budget of R416.9 billion as at 31 December 2017 (Second quarter results for the 2017/18 financial year).

In respect of revenue, aggregate billing and other revenue amounted to 46.5 per cent, or R192.0 billion, of the total adopted revenue budget of R413.2 billion.2.

Of the adopted operating expenditure budget amounting to R346.3 billion, R146.6 billion or 42.6 per cent was spent by 31 December 2017.3. Municipalities have adopted a budget for salaries and wages expenditure at R111.1 billion, which is R18.6 billion more than the adjusted budget of R92.5 billion for the 2016/17 municipal financial year.

This constitutes 32.1 per cent of their total operational expenditure budget of R346.3 billion. At 31 December 2017, spending is 43.1 per cent, or R47.9 billion.

In the period under review, capital expenditure amounted to R20.6 billion, or 29.2 per cent, of the adopted capital budget of R70.6 billion. The slow spending on the capital budget is a concern.

This partly relates to the hockey stick phenomena in Local Government but also the late start of effective SCM planning processes.4.

Aggregated year-to-date total expenditure for metros amounts to R105.1 billion, or 43.5 per cent, of their adopted budget expenditure of R241.3 billion. The aggregated adopted capital budget for metros in the 2017/18 financial year is R37.9...