This was according to a report released by National Treasury on local government revenue and expenditure for the fourth quarter of the 2013/14 financial year. The report revealed that the total outstanding debt for metropolitan municipalities was R52.9 billion.
Of this, the Joburg city council was owed R17.4 billion.
The report, which covered all 278 municipalities during the period July 2013 to June 2014, revealed that the aggregate municipal consumer debts were R94 billion as at 30 June 2014, and that the majority of this debt was incurred by households.
According to the report, contributing factors to the underperformance of collections against billed revenue included, among other things, the reduced affordability of municipal services.
“The economic slowdown and substantial increases associated with municipal cost drivers such as fuel, bulk purchases [water and electricity], material etc. are continuing to impact on affordability and subsequently the ability of consumers to pay for services,” the report said.
“Any underperformance of actual collections against billed revenue holds a significant risk for the cash and liquidity position of municipalities as the planned expenditure is based on a higher level of collections.
“Although the overall performance is pleasing in that municipalities have in aggregate outperformed their budget targets, the fourth quarter performance requires further analysis to ensure credibility of reported performance.”
The report also found that municipalities underspent their budgets by R33.8 billion in the last financial year – R1.4 billion lower than the previous year.
According to the report, municipalities spent 89.3 percent or R281.9 billion of a total adjusted budget of R315.7 billion, which equated to a net underspend of R33.8 billion or 10.7 percent of adjusted budgets.
According to National Treasury, the report was done every year to enable provincial and national authorities to exercise oversight over municipalities and identify possible problems in implementing municipal budgets and conditional grants.
