Buffalo City Metro’s operating revenue and expenditure budget has shrunk by more than R1.6-million after BCM erroneously added and approved a R3-million Transnet-funded project as part of their 2016-17 budget.
Transnet said the R3-million was theirs to spend, and should not be in BCM’s expenditure budget.
Almost half of the loss has been offset by unspent budget rolled over to this year.
Both revenue and expenditure budgets of R5.9-billion each had to be urgently adjusted last month after it was found that the Medium Term Revenue and Expenditure (MTREF) budget presented in council in May included the R3-million committed by Transnet to establish the Enterprise Development Hub to help small businesses within BCM’s jurisdiction.
In the urgent report presented in council two weeks ago, new mayor Xola Pakati said BCM’s budget for operating revenue and expenditure had decreased “mainly due to a reduction of a
R3-million grant allocation from Transnet which was understood to be a direct transfer”.
However, it has since been clarified that the project will be implemented directly by Transnet within the BCM jurisdiction and therefore is an in-kind allocation.
The city was assisted by funds of R1.4-million which had not been spent in the 2015-16 financial year to boost this year’s budget as unconditional funds (to be used as seen fit to advance service delivery), were rolled over to this year to finish the projects.
The R89858 from the Glasgow-sponsored lighting project, R261565 from the Independent Electoral Commission for the municipal elections and just more than R1-million from a Human Settlements Development Grant for the Duncan Village Redevelopment Initiative pilot project gave BCM an increase of R1.4-million as these funds had not been used in the last financial year.
Transnet spokesman Molatwane Likhethe said: “Transnet entered into an agreement with BCM to establish and manage an enterprise development hub in Mdantsane.
“In terms of the agreement, Transnet committed to fund the establishment and day-to-day management of the hub, while the municipality agreed to avail one of its buildings as the premises.”
BCM and Transnet agreed that Transnet, and not BCM, would pay the service providers.
“The aim of the Transnet Enterprise Development Hub is to create an enabling environment for small businesses to access products and services by both provincial and national economic development institutions under one roof.
“The Mdantsane hub started operating in May. The services on offer include business development, business registration, procurement advisory services, tax registration and compliance, financial support and guidance on black economic empowerment requirements,” Likhethe said.
BCM spokesman Sibusiso Cindi could not comment on how BCM had misunderstood the contract between the two parties. He had not responded by the time of going to print yesterday. — mamelag@dispatch.co.za
BCM R3m ‘misunderstanding’ shrinks budget by R1.6-million
Transnet said the R3-million was theirs to spend, and should not be in BCM’s expenditure budget.
Almost half of the loss has been offset by unspent budget rolled over to this year.
Both revenue and expenditure budgets of R5.9-billion each had to be urgently adjusted last month after it was found that the Medium Term Revenue and Expenditure (MTREF) budget presented in council in May included the R3-million committed by Transnet to establish the Enterprise Development Hub to help small businesses within BCM’s jurisdiction.
In the urgent report presented in council two weeks ago, new mayor Xola Pakati said BCM’s budget for operating revenue and expenditure had decreased “mainly due to a reduction of a
R3-million grant allocation from Transnet which was understood to be a direct transfer”.
However, it has since been clarified that the project will be implemented directly by Transnet within the BCM jurisdiction and therefore is an in-kind allocation.
The city was assisted by funds of R1.4-million which had not been spent in the 2015-16 financial year to boost this year’s budget as unconditional funds (to be used as seen fit to advance service delivery), were rolled over to this year to finish the projects.
The R89858 from the Glasgow-sponsored lighting project, R261565 from the Independent Electoral Commission for the municipal elections and just more than R1-million from a Human Settlements Development Grant for the Duncan Village Redevelopment Initiative pilot project gave BCM an increase of R1.4-million as these funds had not been used in the last financial year.
Transnet spokesman Molatwane Likhethe said: “Transnet entered into an agreement with BCM to establish and manage an enterprise development hub in Mdantsane.
“In terms of the agreement, Transnet committed to fund the establishment and day-to-day management of the hub, while the municipality agreed to avail one of its buildings as the premises.”
BCM and Transnet agreed that Transnet, and not BCM, would pay the service providers.
“The aim of the Transnet Enterprise Development Hub is to create an enabling environment for small businesses to access products and services by both provincial and national economic development institutions under one roof.
“The Mdantsane hub started operating in May. The services on offer include business development, business registration, procurement advisory services, tax registration and compliance, financial support and guidance on black economic empowerment requirements,” Likhethe said.
BCM spokesman Sibusiso Cindi could not comment on how BCM had misunderstood the contract between the two parties. He had not responded by the time of going to print yesterday. — mamelag@dispatch.co.za
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