Plan on voting? Do you know how much money your municipality spent on new assets last year?

Are you happy paying taxes to someone, but you don’t know  how they spend that money? Or on what they spend that money?

While municipalities provide a range of services from roads, primary healthcare, electricity and water distribution, refuse removal, fire and ambulance, and the list goes on. Without expenditure on assets, municipalities would not be able to provide these services.

If you  want to know how much your municipality has spent on new assets during a year, you can find this in their financial statements. The ASB sets the rules that municipalities must use to prepare their financial statements.

The following items should be reviewed in the financial statements:

Statement of financial position at 30 June R Notes to the financial statements R
Non-current Assets   Note X. Property, plant and equipment  
Property, plant and equipment 1,000 Opening balance at 1 July 750
Additions 360
Disposals (25)
Depreciation (75)
Impairment (10)
Closing balance at 30 June 1,000

The line item “additions” in the financial statements reflects the amount spent on new assets. There may be an additional line item called “work-in-progress”. This indicates the amounts spent on assets that are still being constructed. It is essential to understand what types of assets are being constructed, and how long it is (or has) taken to complete construction.

Knowing what a municipality spent on the acquisition of assets is just one part of the puzzle. You should know whether the amount spent was included in the budget and whether the amount spent was less or more than the budgeted amount. The amount planned for  acquiring  new assets will be called “capital expenditure” in the budget.  

Where can you access information? There are several sources, but these two are a good starting point.

This has been prepared by the Secretariat of the ASB and not the Board


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