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A Guide to Municipal Financial Management for Councillors

A Guide to Municipal Financial Management for Councillors

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Published by littleconspirator

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Published by: littleconspirator on Mar 07, 2012
Copyright:Attribution Non-commercial


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The appropriation of funds in an annual or adjustments budget lapses to the extent
that those funds are unspent at the end of the financial year to which the budget
relates,and increases the surplus funds of the municipality.The MFMA provides
an exception for the appropriation for capital expenditure for a period not exceeding
three financial years,provided a separate appropriation is made for each of those
financial years.

In some instances at the end of the budget year,commitments may have been made
under the supply chain management policy for acquiring goods or services for which
delivery or completion has not occurred.These outstanding commitments must be
reviewed to determine if the deliveries will be made in the next financial year.

In such cases,provisions must be made by appropriating money to honour the legal
commitments in either the budget or an adjustments budget for the financial year in which
the transactions will be completed.Because funds for outstanding prior-year commitments
were unspent,cash-backed surplus funds should be available to pay for the expenditure in
a subsequent financial year when delivery or contract completion occurs.

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