One of the most important duties of a municipal council is to manage its funds effectively. This means –

• Drawing up a budget – working out what income the municipality will receive and balancing this with what they think they will have to spend it on
• Protecting the income, capital and assets such as money in the bank, motor vehicles, and computer equipment, by putting in proper controls
• Monitoring the actual income and expenditure and comparing this to the budget through regular financial reporting and taking action to correct things when necessary
• Auditing on a regular basis and reporting the financial statements to all stakeholders

DRAWING UP A BUDGET

Municipalities must prepare budgets for each financial year (which runs from 1 July of each year to 30 June of the next year). Council must approve these budgets before the new financial year begins, after proper planning and consultation with ward committees and other stakeholder groups in the area. However, the Council must prepare a draft budget a few months before this to allow for proper consultation to take place.

ROLE OF THE WARD COMMITTEE IN DRAWING UP A BUDGET

Ward committees have the right and duty to ask questions and make recommendations to the council on the best ways to generate (make) income, keep costs down, prevent corruption and protect the assets of the municipality. Approving the budget is one of the most important functions of the ward councillor who should not approve the budget until there has been proper consultation with the ward committee and other stakeholders. So, ward committees play an important role in the process and they should look carefully at all the parts of the budget that will affect the people in their area. All members of the community have the right to observe the special council meeting when the budget is debated and voted on.

Ward committees should also be given regular feedback on the ‘cash flow’ of the municipality. ‘Cash flow’ means the movement of money into and out of the municipality’s bank account. If too much money is spent and not enough money is raised then the municipality will eventually go bankrupt. Ward committees have a right to ask questions about how well the ‘cash flow’ is being planned, monitored and followed up by the treasurer and executive or mayoral committee. Ward committee members can also play a positive role in the ‘cash flow’ of the municipality by –

• Setting an example and paying all rates and taxes for services
• Encouraging others to pay their property rates, accounts for water, power, sanitation, etc.
• Challenging any waste of municipal money that they hear about and asking for an investigation
• Making councillors accountable for fighting corruption or wastage of municipal funds