04 Mar 2025

Serowe District Council chairperson, Mr Atamelang Thaga says the entity is facing a worsening financial crisis marked by depleting reserves and persistent deficits, with no signs of improvement.

Officially opening the full council meeting yesterday, Mr Thaga said the 2023/2024 Abstract of Accounts highlighted a significant general fund deficit of P45 439 173.82, reflecting a trend of increasing financial instability since the 2019/2020 financial year.

He said initially, the positive balances from the former Central District Council helped offset deficits, however, this was no longer sufficient, indicating that current budget allocations were inadequate, especially in the face of continued budget cuts.

The chairperson said this financial strain had resulted in cash flow problems that were now affecting the council’s ability to deliver services efficiently.

“A key issue contributing to the deficit is the growing gap between approved budgets and actual expenditures. Since 2019/2020, the council’s approved budgets have failed to meet rising operational costs, particularly for essential services such as food provision for destitute individuals, support for needy students, vehicle maintenance, school supplies, security, and utilities,” he said.

Mr Thaga noted that for the 2024/2025 financial year, the recurrent budget was set at P215 373 940.00, including a P207 016 390.00 Revenue Support Grant (RSG) and P8 357 550.00 from the council’s own revenue. However, P10 379 969.89, cutting the total budget to P204 993 970.11, reduced the fourth-quarter RSG.

This shortfall, he said could hinder the council’s ability to meet its financial obligations, including payments to suppliers and staff salaries, with expenditure already reaching 95 per cent of the available budget by January 2025.

“The council’s efforts to generate revenue from its own sources have also fallen short, with only P3 603 540.00 collected by January 2025, just 43 per cent of the annual target. This underperformance was largely due to client reluctance to pay dues and reduced tender fees for youth, which decreased potential income by 50 per cent. These factors have left the council with limited options for recovering the lost revenue,” he said.

Mr Thaga told councillors that the overall situation revealed that the budget allocations for the district council had been consistently insufficient since 2019/2020, worsened by annual budget cuts and rising costs of essential services. ENDS