Ray Nkonyeni Municipality tables adjusted budget
The original operating revenue of R1.32b has now been adjusted to approximately R1.41b.
Ray Nkonyeni Municipality mayor Zodwa Mzindle tabled an adjusted budget for 2025/26 at a special council meeting recently.
Mzindle reminded council that at the time of tabling of the original budget, the municipality was in a favourable working capital position, with debtors exceeding creditors.
She added this supported a surplus-funded budget and reflected a position of relative financial stability.
“However, subsequent developments, particularly those arising from the Auditor-General’s audit process, have materially altered this position. Council should also note that a significant reduction in the debtors’ balance, as confirmed in the audited annual financial statements, has had a direct and adverse impact on the municipality’s revenue position. While this adjustment strengthens the credibility of our financial statements, it has simultaneously created funding pressure that must now be addressed through this adjustment budget.”
She added that the mid-year performance report which was considered at the January council meeting, showed that invoices that were not settled at the end of June 2025 were subsequently paid using the first tranche of the Equitable Share, amounting to just over R52m.
“While this was necessary in order for us to be able to honour prior-year commitments and maintain service continuity, but it placed considerable strain on cash flow and reduced the funding available for the current financial year. As a result of these combined factors, the municipality faced a funding shortfall that needs to be addressed by the adjustment budget we are considering today to ensure that we have a full budget that is also compliant with legislative requirements.”
The original operating revenue was R1.32b, now adjusted to approximately R1.41b, an increase of about R87.27m.
Capital revenue was originally R109.25m, increased by R3.11m to about R112.36m.
According to Mzindle, this adjustment largely represents the recognition of previously unspent conditional grant funds, for example, funds carried over for the Margate Airport project.
Operating expenditure was originally set at R1.27b and the revised budget is now R1.26b.
Mzindle said the bulk of this decrease comes from tighter management of employee-related costs, down by R22.46m, transfers and subsidies down by R2.79m, and other operating expenses down by R1.92m.
“These reductions reflect disciplined cost containment in response to the shortfalls noted in our mid-year assessment.”
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