Financial turnaround for Mbombela
This is one of the achievement Neil Diamond had in his term as municipal manager.
MBOMBELA – “The City of Mbombela is doing well and on a path of financial recovery,” said the municipal manager, Neil Diamond this week.
As his 18-month term might come to and end soon, here is a look at what he did to turn the financial state of the city around.
“The city still has many challenges, but the administration is working tirelessly to ensure we run a clean and financially stable municipality,”
Diamond said.
He joined the City of Mbombela in June 2017 with a mission to implement a turnaround strategy and ensure a financially sound, transparent and clean administration that delivers quality services to the residents of Mbombela.
The City also appointed a new CFO, Wiseman Khumalo, to assist Diamond with the financial recovery. The results seem to show that it is successful in its strategy and financial recovery.
The Auditor General is currently auditing the financial affairs of Mbombela but preliminary results show that the city has improved its cash reserves with more than 300 per cent from just R20 million in June 2017 to over R80 million in July 2018.
Diamond said his greatest problem was irregular expenditure where the City of Mbombela was under the top five municipalities with this in 2016/17. The City has reduced this with R1,171 billion in the last year representing a reduction of over
60 per cent.
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There was a 23 per cent reduction in expenditure by implementing cost curtailment measures and Mbombela was able to effect saving of R140 million from contracted services.
Finance charges have also been reduced with 48 per cent by improving internal controls and effective financial management, delivering a further saving of almost R20 million. The nett operating surplus ratio increased to 26 per cent, reflecting the operational efficiency under the new management.
Mbombela has a strategic financial recovery plan in place that was adopted by the council in June. It is clear that service delivery is also a priority with improved grant spending that has increased to a record high of 97 per cent.
Diamond added that this is not just thanks to his interventions, but to the entire management team and political leadership that worked tirelessly together as a collective to turn things around.
“The CFO and management team’s efforts will be directed at responsible resource management that will continue to improve the financial viability of the City of Mbombela through the optimised use of resources to focus on improving service delivery and reduce waste,”
Diamond said.
He concluded by saying the financial recovery will be a multi-year process but the recovery foundation is solid and internal controls have been put in place to ensure ongoing financial recovery and the delivery of municipal services to all communities in Mbombela.
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