Confession: I am not an accountant. When presented with annual figures my eyes glaze over whenever the accountants try to prove just how valuable they are with over analysis and gobbledegook.
I am only interested in the following figures:
- How much cash is in the bank?
- How much is owed to us?
- How much doe we owe?
- Total Revenue for the period?
- Total expenditure for the period?
Most of us can survive on that knowledge.
When people start moving money around from account to account, budget to budget and begin adjusting (isn’t that a ephemism for fudging or an indication of not being on top of things?) I get worried. Whatever happened to KISS? And when people are censured for not spending their budgets my mind boggles – surely if they did more with less they should be praised? But, it is easier to let a bean counter measure with figures than actually managing the process with intelligence.
On Friday 31 August, the national treasury released the latest Section 71 (quarterly municipal finance) figures. These figures refer to the final quarter of the 2011/2012 municipal financial year, covering the period from April to June 2012.
I have extracted some of the figures in an effort to try and make sense of all the obfuscation:
NMB Service Revenue for the period in question came from: Property Rates (240250) Service Charges (868022) and ‘Other’ (761153)
There is a huge disparity between what is owing (R1984) and what is owed to the NMB Municipality (R1591745) all in 000′s. So huge in fact that the monies owed by the NMB don’t show on the above graph – click Show/Hide Table for the numbers.
I am sure that you will agree with me that the above figures portray a relatively healthy portrait of an institution whose main focus is not profit.
BUT, there is always a but – our long term borrowings are of concern as the Nelson Mandela Bay Municipality has 27 Long Term active loans on terms varying from 10 to 20 years and on interest rates varying from 9.38 to 21.53% per annum totalling R1,259,316,746 (the reported balance outstanding on these loans is unclear from the published report so the actual amount is still under question).
The bulk of the Long Term loans – R976,541,909 – stems from three recent large loans:
- R256,541,909: Loan No. EC102026 – a 10 year loan made on 1 October 2005
- R300,000,000: Loan No. 383 – a 10 year loan made on 15 April 2008
- R420,000,000: Loan No. 103330 – a 20 year loan made on 1 September 2009
Interesting to note is that the average annual interest rate between 1993 and 1999 hovered at 10.35% per annum. In stark contrast the average annual interest rate increased to 15.36% per annum from 2000 to date.
All info sourced HERE.
