KDM cites bulk purchases and security costs as mid-year performance challenges, revenue drops R55-million

Bulk spending and the rising cost of security services were flagged as major issues in the KwaDukuza municipality (KDM) mid-year adjustment budget.

Tabled at the KDM council meeting last Thursday, the mid-year adjustment budget is a legally mandated process whereby the municipality takes stock of the first 6 months of financial performances.

Depending on what has transpired, the revenue and expenditure estimates can be adjusted as necessary, while additional revenue that has become available can also be appropriated.

It is important to note appropriation can only be made to accelerate spending programmes that have already been budgeted for.

“An adjustment budget is not a new budget and as such, no new projects can be added and major adjustments should be avoided where possible,” said KDM chief financial officer, Shamir Rajcoomar.

The operational revenue of the municipality was decreased by 3.3%, from R2.166-billion to R2.111-billion, largely as a result of electricity revenue being down by R74-million.

Operational expenditure was also lowered as a result, decreasing by 3.37% from R2.076 billion to R2.022 billion.

The main concerns from opposition councillors were surrounding an increase in the bulk purchasing budget by R50 million.

“Bulk purchases are a repeated concern from the mid-year budget. The increase has been done to mitigate against possible unauthorised expenditure. Hard decisions must be taken by the energy losses task team to strengthen this revenue stream,” said Democratic Alliance caucus leader, Tammy Colley.

Another issue that was flagged by multiple councillors was the increase in security budget for the municipality.

Security costs include both the protection of municipal assets and the protection of government officials.

“Security services is a runaway cost in the municipality. There is an increase of R13.8 million. It is stated that this it to protect our assets from vandalism. We must see the breakdown of security services which protect out assets, and security services that protect politicians,” said Colley.

ActionSA caucus leader, Nel Sewraj said they had previously raised concerns about security costs. “I would like to make a request for the finance department to make a line item of the security costs for the 2023 budget,” he said.

Despite the aforementioned challenges, KwaDukuza mayor Lindi Nhaca struck a positive tone regarding KDM’s financial performance to date.

“In the past year we have proven ourselves as one of the top municipalities in South Africa, because of our diligence, hard work and commitment to our residents. I am not prepared to give that up at any cost and will therefore continue our relentless mission to deliver services and opportunities to our most beautiful valley,” she said.

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