COCT FMR – The then R20bn cash reserves

The then R20bn cash reserves

Ald. Neilson had his hands full and finally admitted in April 2020 during the COVID 19 pressure the investment of R20bn in cash reserves. (Cape Town’s looming financial crunch as Covid-19 throttles income streams – Daily Maverick)
Prior to April 2020, the Cost Coverage Ratio was reported at 3:1. (See below) This ratio indicates a municipality’s ability to meet at least its monthly fixed operating commitments from cash and short-term investment without collecting any additional revenue during that period. In March the investment portfolio was R18,300,066,000.
In April 2020, the Cost Coverage ratio dropped to 1.6:1 whilst the cash reserves increased to R20,561,901,000.
Figures don’t lie, so COCT decided to change the definition in adding:
“This outcome shows a significant drop from the previous period’s outcome of 3 months. This change is attributable to the amendments to cash and Restricted Cash based on funding requirements for the 2021 MTREF.”
I thus thought it necessary to add Treasury’s definition also to this post as your latest definition does not comply with the official definition.

Officially Published by Mike Heyns

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