adminTHE purpose of coming up with budgets – even at household level – is to put expenditure in line with expected income.
The process of creating a budget takes management away from its short-term, day-to-day management of the business and forces it to think longer-term.
This is the chief goal of budgeting, even if management does not succeed in meeting its goals as outlined in the budget – at least it is thinking about the company’s competitive and financial position and how to improve it.
A properly structured budget points out what aspects of the business produce money and which ones use it, which forces management to consider whether it should drop some parts of the business, or expand in others.
The budgeting process forces management to think about why the company is in business, as well as its key assumptions about its business environment.
With these few underlying important facts on budgeting it makes sad reading when you hear that a local authority that is supposed to make good use of money being paid by residents as rates has come up with a makeshift budget to sail it through till year end.
Elsewhere in this issue we carry a story in which the Mutare City Council came up with a sub-standard 2016 budget which it forwarded to the Ministry of Local Government, Public Works and National Housing as its operating framework for the financial year.
Though the ministry approved it, the budget was viewed as sub-standard as it did not meet the required specifications that under line public sector management with reference to the operations of local authorities.
To that effect the ministry instructed the local authority to promptly put its house in order and come up an operating framework that addresses short coming in the budget.
This is a serious issue which city fathers at the Civic Centre should sleep over and act the following day in their possible sober senses.
From our vague understanding of budgeting, the local authority can use a well structured budget for performance evaluations which will later cascade down and give it on how to reward hard-working employees in terms of their performance.
By coming up with a budget that lacked innovativeness in the face of dwindling income levels we believe that those responsible had done a shoddy job.
Bookish knowledge suggests that a properly structured budget must derive the amount of cash that will be spun off or which will be needed to support operations.
With such information the director of finance Mr Lloyd Musasa will plan for the local authority’s funding needs. He will be in a better position to allocate cash and analyse bottlenecks where council need to either expand the capacity of those bottlenecks or avoid them.
We concur with the ministry when it warned the local authority to tighten its belt and do business in a more serious manner.
Days of unplanned operations are long gone and it is high time the municipality plan its activities.
The risks of doing things out of the blues are too high. Residents will buy council operations if things are laid bare for all to see and budgets are one way of doing that.
Things that are held in secrecy, in apparent cultic fashion, do not get the input and support of the people and such operations are bound to fail because they leave out important stakeholders.
As we go forward and institute the recovery plan we pray that those who are calling the shots observe the very tenets of good corporate governance and restore the pride this beautiful city used to have. Rock bottom service delivery evidenced by gushing sewerage pipelines, erratic water supplies and a poor road network – to mention but a few – must be a thing of the past.
People deserve better.
Online Reporter