Financial Services


It is essential that Nongoma have access to adequate sources of revenue, from both its own operations and intergovernmental transfers, to enable it to carry out its functions. It is furthermore necessary that there is a reasonable degree of certainty with regard to source, amount and timing of revenue.

It is important to track the respective sources of revenue received by Nongoma as they can be quite different and can vary substantially depending upon the phase that the municipality is in. Knowledge of the sources of funds will illustrate Nongoma’s position more accurately, its ability to secure loans relative to its income streams and its borrowing capability.

The financial policy of the Nongoma Municipality is to provide a sound financial base and the resources necessary to sustain a satisfactory level of municipal services for the citizens of The Nongoma Municipality. It is the goal of Nongoma to achieve a strong financial position with the ability to:

  • Withstand local and regional economic impacts
  • Effectively maintain, improve and expand Nongoma’s infrastructure;
  • Manage Nongoma’s budget and cash flow to the maximum benefit of the community;
  • Prudently plan, coordinate and implement responsible and sustainable community development and growth;
  • Provide a high level of fire and other protective services to assure public health and safety.
  • Manage Nongoma’s budget and cash flow to the maximum benefit of the community;

Nongoma’s financial policies shall address the following fiscal goals: -

  • Maintain sufficient financial liquidity through regular reviews and adjustments to meet normal operating and contingent obligations;
  • Apply credit control policies which maximize collection while providing relief for the indigent;
  • Credit control policies that recognize the basic policy of customer care and convenience;
  • Maintain existing infrastructure and capital assets;
  • Provide a framework for the prudent use of debt financing; and
  • Direct Nongoma’s financial resources toward meeting the goals of Nongoma’s Integrated Development Plan.

The annual budget is the central financial planning document that embodies all operating revenue and expenditure decisions. It establishes the level of services to be provided by each department. It is the Chief Financial Officer’s roll to incorporate The Nongoma Municipality ’s priorities in the formulation of the preliminary and final budget proposal. The budget is subject to monthly control and be reported to Council with recommendations of action to be taken to achieve the budget’s goal. The budget will be subject to a mid-term review, which will result in a Revised Budget. Adequate maintenance and replacement of the City’s capital plant and equipment will be provided for in the annual budget. The budget shall balance recurring operating expenses to recurring operating revenues. The budget will have Revenue plans based on realistically expected income and expenditure figures. Plans will be included to achieve maximum revenue collection percentages.

The Nongoma Municipality will establish and implement a comprehensive five-year Capital Investment Plan (CIP). This plan will be updated annually. An annual Capital Investment Budget will be developed and adopted by the Municipality as part of the annual budget. The Municipality will make all capital improvements in accordance with the CIP. Unexpended capital project budgets shall not be carried forward to future fiscal years unless the Project Expenditure is committed or funded from grant funding.

Routine capital needs will be financed from current revenues. The Municipality will maintain all assets at a level adequate to protect the capital investment and to minimize future maintenance and replacement costs. The management of assets will be in terms of the Municipality’s Asset Control Policy.


The Municipality will estimate annual revenues through a conservative, objective and analytical process based on realistically expected income. The Chief Financial Officer will consider market rates and charges levied by other public and private organizations for similar services in establishing rates, fees and charges. A new valuation system based on market values of all properties within it’s boundary will be established as well as periodical reviews.

Fees and user charges will be set at a level that fully supports the recovery of the outlay. Tariffs will be set to reflect the Development and Social Policies. The Chief Financial Officer will continue to identify and pursue grants and appropriations from Province, Central Government and other agencies that are consistent with the IDP. The Chief Financial Officer will follow an aggressive policy of collecting revenues.


Nongoma needs to ensure that its actual income covers its actual expenditure, due to the fact that the revenues sources are limited. It is prudent to assume that the revenues from Provincial and National Government will be ongoing, however that which must be borne in mind is that these parastatals have expectancies in the turnaround of the sustainability of Nongoma.

In terms of the objects of local government, there is an obligation to ensure the provision of services to the community in a sustainable manner; hence the focus must be on affordable service delivery. Many experts have developed models for the delivery of affordable services, and it is onerous on Nongoma to select the model that is practicable and deliverable (the best fit).

Deliverables on infrastructure development come with great cost and time; therefore a practical forward plan is required in order that Nongoma delivers on its mandate. It is factual scenario that Nongoma has been a city that has been overlooked during the apartheid years, and seriously lacks the financial muscle to overcome those barriers of the past in a few years. The IDP has provided the perfect platform for Nongoma, having had the research undertaken provides the city with a wealth of information in terms of the number of households that lack basic services. Strategies to target these poor households have been developed. Delivery on these strategies will see revenue filtering through to the municipality.

The IDP has also reflected on the economic profile of the city, and serious cognizance has to be taken of the type of service delivery necessary to sustain this economy of scale. Subsidization in the form of free basic electricity and free basic services will encourage these households to begin to appreciate the services and contribute towards the economic development of the city.

The Supply Chain Management Function resides in the Financial Management Department. The main objective of this function is to provide an effective, efficient and economic instrument of procuring goods and services, including the acquisition and disposal of municipal assets.

The section is responsible for the following functions:

  • Maintenance of the suppliers database
  • Price quotations, competitive bidding and tender documents
  • Implementation of the supply chain management policy
  • Issue of orders to prospective suppliers
  • Provision of support to all three bid committees
  • Stores management
Performance Review

The SCM Unit was not fully fledged in the year under review. Major challenges are currently being addressed to ensure that the Municipality complies fully with the Supply Chain Management Policy Framework and the Municipal Finance Management Act.

The following challenges in the SCM Unit were prevalent throughout the year under review:

  • The municipality did not have a fully-fledged Supply Chain Management Unit during the year under review due to human capacity constraints and relevant skills.
  • The lack of capacity resulted in ineffective procurement planning and proper implementation of policies and procedures.
  • Understanding of supply chain management by Bid Committees due to lack of training.
  • Inadequate segregation of incompatible functions within the SCM unit due to shortage of staff.
  • Due to the lack of technical expertise within the municipality, the assistance of engineers was sought to verify technical services tenders/bids for compliance with the bid specifications. In all other cases the internal Bid Evaluation Committee performed the evaluation of non-technical bids.

The following committees were operational throughout the financial year:

  • Bid Specifications Committee
  • Bid Evaluation Committee
  • Bid Adjudication Committee