Munsoft Matters: Completeness of Municipal Revenue – Maximising the revenue generation of the municipal revenue base
26 Mar 2021 - 09:26
Completeness of Municipal Revenue – Maximising the revenue generation of the municipal revenue base
Dear Munsoft Client.
In recent MFMA Circulars (93, 98, and 107) and public statements made by the Finance Minister and other role players, emphasis has been placed on the need for accurate and timeous billing of consumers.
The accurate billing of consumers starts with the reconciliation of the valuation roll to the financial system to ensure that all properties are accounted for. Once the reconciliation has been performed the municipality must ensure that the usage of the property is billed in accordance with the correct tariff linked to the usage of the property, and as per Councils adopted Rates and Tariff policy.
As per Section 23 of the MPRA, a municipality must maintain a property register consisting of Part A and Part B and they must at regular intervals, but at least annually, update Part B of the register. Section 77 of the MPRA states that a municipality must regularly, but at least once a year, update the valuation roll which includes supplementary valuations as well as amendments to the valuation roll.
MFMA Circular 93 (par. 3.1), 98 (par. 4.1), and 107 (par. 5.1) emphasized that it is essential that municipalities reconcile the valuation roll to the billing system to ensure that rates are accurate. A further test would be to reconcile it with the Deeds Office data and this exercise should be performed on a regular basis.
Our Revenue Management tool and methodology focuses on the above-mentioned process as well as the completeness of billing by verifying that all properties are charged for all services in accordance with the usage and the correct tariff. This process also assists with financial year-end processes, and the disclosure of market value per property category, and certain information required for the disclosure of Investment Property or PPE Land and Buildings, as part of the Annual Financial Statements compilation.
Should you require any support please contact your Service Delivery Manager and we will gladly assist.