WHAT IS A FINANCIAL RECOVERY PLAN?
Following the successful application by Mafube Business Forum (MBF), the High Court ordered the provincial authorities to intervene at Mafube Local Municipality in terms of section 139 (5) of the Constitution, and further, to implement a Financial Recovery Plan (FRP) aimed at securing the municipality's ability to meet its obligations to provide basic services and to meet its financial commitments. The financial recovery plan currently under consideration is aligned to the 4 pillars used by the National Treasury to assess municipal sustainability.
These 4 pillars are:
· Institutional Stability;
· Financial Health; and
· Service Delivery.
The strategic objective of the FRP, is to address the current financial distress by focusing on improving the short-term financial liquidity of the municipality and by improving the long-term financial sustainability of the municipality. This will be achieved in a phased approach, with a focus on high level targets to be achieved in each phase. Issues pertaining to governance, institutional stability and service delivery will also be addressed in so far as it undermines the financial recovery of the municipality.
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