Treasury releases local government revenue and expenditure report

(Media Release: Issued and provided by the National Treasury)

National Treasury has released the local government revenue and expenditure report for the first quarter of the 2023/24 financial year. This report covers the performance against the adopted budgets of local government for the first quarter of the municipal financial year ending on 30 September 2023 and includes spending against conditional grant allocations for the same period.

The Section 71 report facilitates transparency in reporting, better in-year management as well as the oversight of the financial performance of municipalities against their adopted budgets. This report is therefore a management tool that serves as an early warning mechanism for councils, provincial legislatures and municipal management to monitor and improve municipal performance timeously.

The improvement of the credibility of the data strings is a priority for national and provincial treasuries and the submitted data strings are analysed monthly and errors are communicated to municipalities for correction.

Key trends:

Aggregate trends

As at 30 September 2023, aggregate spending by municipalities was 20.7 per cent or R122.9 billion of the total adopted expenditure budget of R592.7 billion. Aggregated billing and other revenue was 25.3 per cent or R152.1 billion of the total adopted revenue budget of R600.5 billion.

Capital expenditure amounts to R9.3 billion or 12.6 per cent of the adopted capital budget of R74 billion.

The adopted operating expenditure budget amounts to R518.7 billion, of which R13.6 billion (21.9 per cent) was spent by 30 September 2023.

Municipalities adopted a budget of R154.5 billion in respect of salaries and wages (including remuneration of councillors), representing a R7.9 billion or a 5.4 per cent increase from the adopted budget of R146.6 billion for the 2022/23 municipal financial year.

Aggregate municipal consumer debts amounted to R306.7 billion (compared to R289.8 billion reported in the first quarter of 2022/23) as at 30 September 2023. A total amount of R4.9 billion or 1.6 per cent has been written off as bad debt.

Analysis of the collection rates indicates that while municipalities have budgeted for an 83.1 per cent collection rate, aggregated actual collection performance against billed is only 56.1 per cent. The 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.

Read the full press release here.