Gauteng Business News

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LOCAL GOVERNMENT: Moving Municipalities from Compliance to Performance


Recent Gauteng Business News

As of the end of December 2010, a staggering R62.3 billion was owed to municipalities - this amount was up by 11% from the previous year with households being responsible for R 38.3 billion. Municipalities currently struggle to maintain accurate databases, which results in outstanding debts not being repaid. There is a dire need for municipalities to overcome this issue in order to increase their revenue and improve on service delivery.

Smart Metro
is a service helping municipalities across South Africa meet their compliance requirements and close the gap between revenue and the cost of service delivery. By linking and cross-checking municipal databases, clean data is ensured for compliance and simultaneously results in opportunities for revenue enhancement.

The Smart Metro service uses globally tested technology endorsed by the Chief Surveyor General to efficiently analyse billable asset data and isolate planned and unplanned revenue gaps. Smart Metro lists all immovable assets in the municipal jurisdiction and their corresponding revenue producing potential by way of rates, electricity, water, sewerage and refuse.

Municipalities Struggle With Revenue Collection Process

The revenue collection process is a major concern for municipalities in South Africa. Geoffery Makhubo from the City of Johannesburg’s Finance portfolio head has said that “We need to ensure that revenue collection is complete and correct. We need to restore the confidence of our customers in the city. We aim to create a financially sustainable city and to make Johannesburg a globally competitive city”. Smart Metro is a vital tool that municipalities can use to ensure that Mr. Makhubo’s words are ratified.

The system identifies the provision for “acceptable losses” by accounting for rebated municipal properties, indigent and welfare allowances, and isolates them. Through comprehensive analyses, unplanned losses - such as utility theft, unbilled and under-billed services - are then identified by Smart Metro and highlighted for corrective action. These corrections will reduce the burden that is placed on existing paying customers and reverse the sliding municipality Customer Satisfaction Ratings, which have fallen in cities such as Johannesburg by 4% in the past two years.

Municipalities Use Smart Metro to Aid in Revenue Collection

Smart Metro uses world-class technology such as Munsys (used in the United States and Australia) and UMS (Utility Management System) to enter into a league of its own. By drawing on 30 years of experience, Smart Metro provides municipalities with a proven method of delivering on their promises at a fraction of the cost.

This all round system assists in the collection of these additional amounts billed and provides the municipality with a close out report detailing process weaknesses that have lead to un-billed and under-billed revenues. Smart Metro is also not a short-term fix but provides for updated standard operating procedures to address prior weaknesses that have contributed to shortfalls in billing.

Smart Metro enables municipalities to increase revenue and improve compliance with ease. It is vital for municipalities to have ‘clean’ and accurate data given the transparency and expenditure control requirements of GRAP and legislation such as and the MFMA. The benefits of Smart Metro services extend beyond compliance and ensure sound business practises within municipalities across South Africa.

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