12 june 2013 credit control and indigent management
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12 JUNE 2013 CREDIT CONTROL AND INDIGENT MANAGEMENT. The Steve Tshwete Municipality Experience AMOS TWALA (AIMFO) ASSISTANT :DIRECTOR TREASURY IMFO MPUMALANGA CHAIRPERSON. Effectiveness creates profit, Efficiency maximises it. General Perception: CFO only responsible for credit control

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12 JUNE 2013 CREDIT CONTROL AND INDIGENT MANAGEMENT

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12 june 2013 credit control and indigent management

12 JUNE 2013CREDIT CONTROLAND INDIGENT MANAGEMENT

The Steve Tshwete Municipality Experience

AMOS TWALA (AIMFO)

ASSISTANT :DIRECTOR TREASURY

IMFO MPUMALANGA CHAIRPERSON


Effectiveness creates profit efficiency maximises it

Effectiveness creates profit, Efficiency maximises it.

General Perception:

  • CFO only responsible for credit control

  • Totally distanced from other departments

  • Job of Juniors

  • Seniors only involved with prominent cases


Batho pele

BATHO PELE

The deterioration of debtor payment goes hand in hand with poor customer care.

Eight Batho Pele Principles:

  • Consultation

  • Service Standard

  • Access

  • Courtesy

  • Information

  • Openness and Transparency

  • Redress

  • Value for money


Performance results of the steve tshwete municipality

PERFORMANCE RESULTS OF THE STEVE TSHWETE MUNICIPALITY

  • Average payment rate

    • 2009/2010 100.04%

    • 2010/2011 100.04%

    • 2011/2012 101.29%

      Outstanding Consumer debtors >60 Days:

    • 2009/2010R 16 518 229

    • 2010/2011R 22 745 853

    • 2011/2010R 26 209 820


Performance results of the steve tshwete municipality1

PERFORMANCE RESULTS OF THE STEVE TSHWETE MUNICIPALITY

  • Outstanding debt: Total Annual Consumer levies:-

    • 2009/2010 7.5%

    • 2010/2011 5.74%

    • 2011/2012 5.02%

  • Monthly Debtors / days:

    • 2009/201027 Days

    • 2010/201120 Days

    • 2011/201218 Days


The various stages of credit control at steve tshwete municipality

THE VARIOUS STAGES OF CREDIT CONTROL AT STEVE TSHWETE MUNICIPALITY

1994

  • Middelburg Town Council amalgamated with Mhluzi Town Council (Formal Middelburg TLC)

    • Payment rate less than 10% in Mhluzi

    • Flat rate for electricity (including payment for water)

    • Prepaid electricity in Mhluzi and conventional in Middelburg

    • Prepaid operated by private contractor

    • Electricity distribution loss 79%

    • No meters were read

      1996

  • Uniform tariff structure for entire TLC

  • All meters cleaned – read monthly

  • Electricity distribution loss 9%

  • Payment rate +- 92%


The various stages of credit control at steve tshwete municipality1

THE VARIOUS STAGES OF CREDIT CONTROL AT STEVE TSHWETE MUNICIPALITY

2001

  • Middelburg TLC combines with Hendrina (and Kwazamokuhle) TLC and parts of Middelburg TRC – Form Middelburg Local Municipality (became Steve Tshwete in 2004)

    • Payment rate less than 10% in Kwazamokuhle

    • Prepaid operated by private contractor – Loss paid by TLC from other sources at +- R 60 000 per month

    • Electricity distribution loss at 56%

      2010

  • Payment rate +/- 99%

  • Electricity distribution loss 9.73%

  • All meters cleaned, repaired and being read


Debt management in a firm community partnership

DEBT MANAGEMENT IN A FIRM COMMUNITY PARTNERSHIP

Community

Municipal Council

Community partnership

  • Service provision regulated by acceptable / supportive Policy and By-Laws

    • Service standards and consumer services

    • Credit control and debt collection

    • Control of Services

    • Indigent support and free basic services

Municipal Administration


Debt management in a firm community partnership1

DEBT MANAGEMENT IN A FIRM COMMUNITY PARTNERSHIP

  • Services provision only by legitimate connections

  • No services provision without service agreement

  • Total process supported by delegated authority

    “ IT IS SURVIVAL NOT BRAVERY THAT MAKES A MAN TO CLIMB A THORN TREE ”


Service consumption must be metered

SERVICE CONSUMPTION MUST BE METERED.

  • All service connections must be metered

  • Meters suitable to application

  • Defects immediately reported

  • Meter replacement programme

  • Pre-paid electricity metering

  • Standardizing of meters

  • Regular audit of meters

  • Controlled on GIS

  • Units of un-metered service simple and understandable


Reading of meters

READING OF METERS

  • Electronic Terminals (Route Master)

  • Monthly read at similar date

  • All meters read

  • Accessibility – deviations reported

  • Text messages (SMS) to consumers

  • Notes from the meter readers

  • Deviation keyed in on terminals

  • Immediately dealt with

  • Meter Reader Contractors

  • Checking defaults separate from readers


Fixed internal work schedule

FIXED INTERNAL WORK SCHEDULE

  • Exact and comprehensive planning

  • Regular fixed dates / strict compliance

  • All work processes covered

  • Serve as guidance for all planning

  • Provide sufficient time for each process

  • Ensure all work covered and within limits

  • Rigid

  • Consistent


Monthly consumer statements

MONTHLY CONSUMER STATEMENTS

  • Combined Statement

  • Clear understanding lay-out

  • Reflect all transactions for the month

  • Reflect meter readings and consumption

  • Reflect all tariffs (even on sliding scales)

  • Include a last payment date

  • Contain a notice of service termination if not paid at due date

  • Contain clear and correct address (Obtain PAM Certificate – twice (2) per year)

  • Allow for a fourteen day payment period from delivery to final pay date

  • In the official communication language of the Municipality


Payment facilities

PAYMENT FACILITIES

  • 12 Own pay points spread over municipality

  • Available to public – 60 hours per week

  • 3 ATM vending machines

  • Available 24 hours / 7 days

  • 6 Receptors at garages available 24 hours/7 days

  • A pay point within 4 km from any residential premises

  • 14 days payment period before due date

  • Credit card / Debit card facilities

  • Accept Electronic payments

  • Identity numbers for direct deposits

  • Accounts listed for bulk consumers

  • No pre-paid electricity sold if basic account not up to date


Accounts not paid by due date

ACCOUNTS NOT PAID BY DUE DATE

Payment extension subject to:

  • Sign acknowledgement of Debt / payment understanding

  • Regulated by delegated authority

    Prior warning arrangement:

  • Telephone call to responsible person

  • Text messages (SMS) to cell phones

  • Letters to larger consumers

    Termination of services

  • Private contractor

  • All on one day (early as possible)

  • Re-connection fees

  • Adjustment of deposit

  • Accountant on standby until 21:00


First 14 days final notice

FIRST 14 DAYS: FINAL NOTICE

  • Service Termination without payment followed up

    • Restrict water meters

    • Disconnect at pole

  • Final Notices for:

    • Non-payment after termination

    • Services that can not be terminated

  • Transfer lessee debt to owners account

  • Arrange to attach lessee’s rent

  • Removal of tampered pre-payment meters

  • Penalty for electricity theft

  • Awards for information on illegal use


Next 30 days personal interaction

NEXT 30 DAYS: PERSONAL INTERACTION

Difficult accounts handed to independent debt collector:

  • On percentage basis

  • Can not institute formal legal action

  • Must not disturb consumer relations

  • Can not collect payments

    Lists provided to Ward Councillors:

  • Interact with defaulters

  • Visit cases of payment resistance

  • Report findings

  • Report on needy cases


Indigent support free basic services

INDIGENT SUPPORT / FREE BASIC SERVICES

  • Formal enlistment

  • Only consumers of all four consumer services

  • Restricted to 20 ampere electricity demand

  • Can only revert back if account is up to date

  • Receive free basic services:

    • Assessment Rates 100%

    • 50 kWh electricity per month

    • 10 kl water per month

    • Free sewerage

    • Free refuse removal

  • Water restriction if consumption exceeds 15 kl per month

  • +/- 15500 indigents listed

  • Include child headed households


After 60 days hand over

AFTER 60 DAYS: HAND OVER

  • Three different law firms appointed

  • Follow full debt collection process until attachment of property

  • Sale in execution of properties but only if:

    • Empty stands

    • Empty houses

    • Business premises

  • Attachment remain for period granted and immediate sale arrangement by sheriff:

    • When house becomes empty

    • Occupiers change


Bad debt identification

BAD DEBT IDENTIFICATION

  • Each step in debt collection process coded

  • Once identified irrecoverable, list for approved to write off

  • Prevent “dead wood” on debtors register

  • Delegations to CFO for all debt less than R2000, above R2000 item to council


Handling of governments accounts that are arrears

HANDLING OF GOVERNMENTS ACCOUNTS THAT ARE ARREARS

  • A report of all government accounts that are in arrears is prepared by the Accountant income and forwarded to the provincial treasury and the national treasury department on monthly basis

  • Monthly engagements with identified officials on the payment of accounts

  • Regular meetings with officials from government departments


Questions

QUESTIONS


Thank you siyabonga

THANK YOU SIYABONGA


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