Apply Approaches to Municipal Income and Expenditure in a Multi-Year Framework Assignment

Assignment Task

Assignment

Explain the importance of political buy-in and the role-players involved in improving debt collection and credit control.

Explain how you contribute to the design of the various income sources in your organisation and if you have no direct contribution, explain how it should be done.

Explain how you contribute to the development of a credit control and debt collection policy and if you have no direct contribution, explain how it should be done.

1. Introduction to municipal income & expenditure managementBackground

Introduction/Overview

Constitution Section 214 states that:

Local Government Equitable Share must ensure that municipalities:

• are able to provide basic services
•  fulfil their functions

Must take into account fiscal capacity and efficiency;

Municipalities must generate own revenue and also rely on intergovernmental fiscal transfers.

In generating own revenue a municipality will inevitably incur expenses by rendering services.

Revenue is generally regarded as the total amount of money received by an organisation for goods sold or services provided during a certain period.

Municipal Revenue

• What is municipal revenue?
• What is municipal expenditure?

2. Developing approaches to management of municipal revenue in a sustainable manner

Introduction

MFMA, Act 56 of 2003 gives effect to the constitutional principle that recognises that the local sphere of government is distinctive, interdependent and interrelated

• Municipality may generate revenue and determine expenditure priorities

Section 11 of Municipal Systems Act indicates that

• A municipality exercises legislative and executive authority by imposing and recovering rates, taxes, levies, duties, service fees, etc.

3. Subsidy framework for municipal rates and tariffs

• Subsidies at municipal level
• Poverty in a municipality
• Poverty levels in a municipality (1)
• Negative consequences of no subsidy framework
• Indigent and legislative compliant policy
• Who qualifies for indigent support
• Consideration of criteria and process issues
• Indigent database management and vital reports
• Socio-economic impact of a subsidy framework
• Subsidy design and control mechanism against leakages
• Design possibilities and control mechanism
• Information sets to manage an effective subsidy framework

4. Forecasting of medium term revenue and expenditure

• Information sets for forecasting revenue and expenditure (2)
• Information sets for forecasting revenue and expenditure – Planning 3
• Forecasting income and expenditure using data sets (1)
• Forecasting income and expenditure using data sets (2)
• Forecasting income and expenditure using data sets (3)
• SDBIP P67
• Forecasting Social, institutional, economic and environmental influences on municipal finances
• Indicators relating to municipal revenue and expenditure
• Forecasting revenue and expenditures
• Estimating known expenditures for the next financial year
• Estimating revenue and sources for the following year

5. Implication of medium term revenue and expenditure

• The impact of political “buy-in” in revenue management (1)
• The impact of political “buy-in” in revenue management (2)
• The impact of political “buy-in” In revenue management (3)
• Organisational structure to facilitate revenue and expenditure management (1)
• Organisational structure to facilitate revenue and expenditure management (2)
• Municipal MTREF budget structure
• Municipal budgets
• Key role players in revenue management

6. Design of rates, tariffs and user charges in a municipality

• Legislative framework
• Tariffs and user charges
• Tariff policy
• Financial effects and need for a tariff policy

7. Credit control and debt collection policy

• Legislative framework of credit Control policy
• Credit control and debt collection policy
• Debt collection procedures and mechanisms
• Credit control procedures and mechanisms

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