PART 2 SUPPORTING DOCUMENTATION
2.10 A NNUAL BUDGETS AND SDBIP S – INTERNAL DEPARTMENTS
2.10.12 FINANCE DEPARTMENT
The result statements of the department is contained in the IDP in Annexure A
The Finance Department Revenue Enhancement flagship project is Siyakhokha Siyathuthuka “We pay and We Progress”. This flagship project has been launched throughout the City of Ekurhuleni at the various CCA’s. Siyakhokha online platform has also been created which enables customers to view and pay their accounts online without having to stand in queues.
Aim of Customer Care open day promotions are as follows:
Creating an exciting and positive outlook towards campaign
Indigent Registration
Siyakhokha Registration
Promote payment for services and encourage customers to pay via online platform
Receive queries from customers
Update customer details on City of Ekurhuleni billing system
Assist CCAs with credit control.
Total of 169 000 users registered through Siyakhokha online platform. This project will continue in 2020/21 especially in respect of the development and use of electronic media platform.
Operating Budget of the Finance Department
The Finance Department renders a financial service to the municipality and Council. It therefore has to secure sound and sustainable management of the fiscal and financial affairs of the municipality; and ensure transparent, accountable and appropriate lines of responsibility in the fiscal and financial affairs of the municipality and its entities.
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The department manages the borrowing, investments, supply chain management, revenue, expenditure, assets and liabilities of the municipality and therefore has to draw up the budgets and ensure that financial planning processes are followed and complied with in terms of legislation and other regulations and to coordinate these not only within the municipality but also with other organs of state in the different spheres of government.
The Operating Budget will enable the department to perform the above functions and duties and many other functions that it would be expected to be perform
Revenue Management
Revenue services bill customers in respect of consumer services and applicable property rates and taxes. Consumer Services are rendered through service departments - Water, Electricity and Waste Management. Revenue services is responsible for collection of billed services from customers, the implementation of credit control measures and to ensure that the City pay point systems and networks are operating efficiently and effectively. The collection rate performance indicator target of ninety four percent (94%) revenue collection to be maintained in 2020/21 financial year.
Expenditure and cost management
Through the expenditure the payments are processed for goods and services procured on behalf of the City departments. The 2019/20 performance indicator target of ninety percent (90%) payment of creditors within 30 days as per MFMA will remain at ninety percent (90%) in 2020/21.
Budget and Management Accounting
The Budget & Management Accounting is responsible for the costing, drafting and compiling of the City’s Annual Budget. The budget consists of the Operational & Capital budget which is used for the allocating of financial resources for the rendering of service delivery. The Budget and Accounting Division’s key deliverable with the 2018/19 budget include be fully compliant with the latest Municipal Standard Chart of Accounts (MSCOA) version6.4.
Supply Chain Management
The Supply Chain Management (SCM) provides a SCM platform that ensures efficient and effective procurement of requisite goods and services for City.
Its key objective are to ensures optimisation of the financial delivery value chain, through strategic planning and alignment of SCM practices and processes, ensuring delivery of and compliance with protocols and Acts through:
Demand Management
Acquisition Management
Logistics Management
Inventory Management
Disposal Management
Performance Management
Contract Management Legal Compliance
The performance of the City in terms of service delivery is largely affected by the effectiveness of the Supply Chain Management (SCM) processes. The SCM Division’s key deliverables with the 2019/20 budget is to execute the SCM operations and improve capacity to process tenders within targeted turnaround times (adjudicate within 120 days after bids’ closing date) with the performance indicator for 2019/20 remaining at 90%.
This KPI still remains unchanged for 2020/21 FY. This will ensure continuous
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improvement of the SCM processes that will benefit the City’s departments, the community and businesses to ensure that the service delivery is not compromised.
Financial Reporting, MIS and Treasury Services
Financial Reporting is responsible for the preparation and presentation of the Group Annual Financial Statements and Asset Management function for the City, to ensure compliance with accounting standards. The maintenance of relations with the National Treasury and Provincial Treasury regarding statutory reporting processes and submission of financial reports as required. The implementation of the budget also brings in-year financial reporting requirement. In-year reporting and Annual Financial Statements are prepared in compliance with relevant legislation. The 2020/21 core deliverable is to achieve the unqualified audit opinion without findings.
The City’s treasury office (Treasury) serves as internal banker of City and is, in general terms, responsible for cash management and borrowings for financing the Capital Expenditure programme. The decisions taken by Treasury are investments, funding and Treasury Risk management processes in the financial market place and in accordance with the provisions of the MFMA. The role of Treasury is to provide liquidity to City by sourcing the most efficient financial instruments at the best price and to administer and account for such instruments within the bounds of relevant legal framework. Treasury division ensure that this function contributes positively to the cash collections of the City to sustain the City to meet its expenditure commitments and to remain in a positive cash coverage in line with the targeted cash coverage to sustain the City as ensure financial viability.
The City has to continue to increase its revenue base to improve its revenue collection facilities, customers can pay via, rates halls, internet, banks, E – Siyakhokha and other Third Party Payments vendors like Easy Pay, Cigi Cell, Sandulela Technology, XET Solutions, Flash Mobile Vending, Ontech System, Sapex/ Kititla Joint Venture and Pay@
this facilitates for pre-paid electricity and bill payments at the following but not limited to Pick ‘n Pay, Spar, Shoprite, Checkers, Woolworths, Pep stores etc.
The Treasury section is also facilitating the Transport Section for Harambee (IRPTN) in ensuring that the process of revenue collection is under its domain with the relevant monitoring and controls in place.
The City’s enjoys a favourable credit rating of Baa3/Aa1.za national scale rating, downgrade from a previous rating of Aaa.za/Prime-1 due to the downgrade of the sovereign. This facilitates the City of Ekurhuleni to attract favourable investments and funding.
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Table 64 Operating Budget of the Financial Services Department