THE City of uMhlathuze’s under-spending woes from the previous financial year has already crept into the new ledger books.
At the start of the new financial year the municipality showed capital expenditure of only 1.68% totalling R6.8-million out of the more than R419-million capital budget.
Assessing the financial position of the City as at 31 July at Tuesday’s Exco meeting in Richards Bay, Councillors were less than impressed with the ‘bad start’.
‘We are very concerned that only 1.49% of the Municipal Infrastructure Grant (MIG) funding has been spent. We must ensure that we have a plan in place to spend the capital budget,’ said Cllr Louis Fourie.
Cllr Dumisani Nxumalo said the figures were ‘not what was expected’ at the beginning of the financial year.
City Mayor Elphas Mbatha said the situation had to improve otherwise the City faced the risk of losing its funding rollover from the previous year.
‘If we do not spend the money, provincial government will not hesitate to take it away from us and give it to another municipality that needs the funding,’ Mbatha said.
In the report, Chief Financial Officer Mxolisi Kunene said while the liquidity situation was improving and there was surplus on the current figures, expenditure had to take place in accordance with the approved budget.
‘If not, the objective of attempting to create internal reserves for future capital expenditure from accumulated cash reserves is not going to materialise.’
For the monthly financial report as at July, the municipality showed a surplus of R20.8-million.
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