Nelson Mandela Bay’s 229% June “Spike” in Capital Expenditure
Spending of the capital budget in Nelson Mandela Bay reflects a “spike” of 229% in June, according to figures released by National Treasury.
This is the fourth highest “spike” of the eight metros after Ekurhuleni (281%), Buffalo City (263%) and Mangaung (249%).
The figures show that while average monthly capital expenditure in the metro is R106.3 million this jumps to R449.7 million in June, the last month of the financial year.
Commenting on this phenomenon, National Treasury says that generally, spending “gets off to a very slow start in the first quarter of the financial year, especially July and August.
“This indicates that municipalities have not completed the project design, planning and procurement preparation necessary to begin immediate implementation of the capital budget at the beginning of the new financial year.”
National Treasury says the “spike” also reflect a failure to use the section of the Municipal Finance Management Act that allows municipal councils to approve multi-year budgets.
It says that the slow start to spending means municipalities have to play “catch up for the rest of the financial year.
This is “exacerbated” by the dip in capital spending in the third quarter.
This dip is the result of the traditional shut-down by the construction industry during the December-January holiday period.
National Treasury says that although there is “no set standard rate” at which municipalities should spend their capital budget, it is expected that “spending should start at a brisk pace from the start of the financial year”.
It says it views the “spike” “as an indicator of a lack of adequate expenditure planning”.
Further, it notes, it is “an indicator of risk in the effectual use of capital budgets”.
The most recent Budget and Treasury report indicates that at the end of the first quarter the metro had spent 11.8% of its capital budget for 2014/15.
The report shows that some directorates had not spent one cent of their capital budgets. - MetroMinutes.
Photo courtesy of www.sastudy.co.za
The Nelson Mandela Metropolitan University (NMMU) choir
The Student Representative Council (SRC) at the...
NMMU’s famous choir will be appearing on...
Around 1 000 women from the Eastern Cape left...
On Friday Suicide Squad opened in Port Elizabeth...
The Transnet-Phelophepa Healthcare Train brings...
On Saturday 30th July, Port Elizabeth born...
Former Democratic Alliance (DA) Leader, Helen...
- 24-year-old woman arrested for possession of illegal firearm and ammunition
- Notification of the interruption of the electricity supply - The following areas will be affected
- Veld fire conditions and extreme heat forecast for parts of Eastern Cape
- Man handed lengthy jail sentence for mystery 2016 murder
- Xtreme Projects: emergencies don't wait for regular business hours, neither do we!