Section 71 Monthly Report: Complete Guide & Free Template for Municipalities

Section 71 is one of the most critical — and most frequently failed — reporting obligations for South African municipalities. Late or incomplete submissions attract Auditor-General findings, National Treasury scrutiny, and reputational damage. Yet there is no single, practical guide that explains the Section 71 report template in plain language for municipal CFOs and finance managers who have to get it right every month.

This guide covers what a Section 71 report is, what it must include, how to prepare it step by step, common mistakes that trigger audit findings, and a reusable preparation checklist. For broader context on municipal finance law, see our MFMA compliance requirements overview.

What Is a Section 71 Report?

A Section 71 report is the monthly budget statement that every municipality in South Africa must submit to the mayor and to National Treasury. It is not an internal report; it is a statutory disclosure that shows how the municipality is performing against its approved budget.

Legal Basis

The obligation comes from Section 71 of the Municipal Finance Management Act (MFMA), Act 56 of 2003. The MFMA is the main law governing municipal financial management. Section 71 requires the accounting officer (the municipal manager) to submit a statement in the prescribed format within a strict deadline. The exact format and content are set out in the Municipal Budget and Reporting Regulations (MBRR) and related National Treasury circulars.

Who Must Submit?

The accounting officer — in practice, the municipal manager — is legally responsible for submission. In most municipalities, the CFO or finance manager compiles the report and the municipal manager signs it off before it is sent. The report must go to two recipients: the mayor (or council) and National Treasury.

Frequency and Deadline

Section 71 reports are monthly. The accounting officer must submit the statement within 10 working days after the end of each month. For example, the report for January must be submitted by the 10th working day after 31 January. Missing this deadline is one of the most common causes of audit findings and is easily avoidable with a clear process.

What Must a Section 71 Report Include?

The MBRR and National Treasury prescribe the content and format. In practice, your Section 71 report template must include the following.

Actual Revenue vs Budget (by Source)

Revenue must be reported by source (e.g. property rates, service charges, grants, other income) with budget and actual figures for the month and year-to-date. This allows National Treasury and the council to see whether revenue collection is on track. Property rates and service charges (water, electricity, sanitation, refuse) typically make up the largest share of own revenue; grants and subsidies from national and provincial government must be shown separately. Any significant shortfall against budget should be explained in the narrative part of the report.

Actual Expenditure vs Budget (by Vote)

Operating expenditure must be reported by vote (department or vote number) with budget and actual for the month and year-to-date. Expenditure should align with the approved budget structure — which is why a proper mSCOA chart of accounts is essential for accurate Section 71 reporting. Salaries, bulk purchases (e.g. electricity, water), and other operational costs are reported under the relevant votes. Variances (overspending or under-spending) must be explained where they are material.

Actual Capital Expenditure vs Budget

Capital spending (assets, infrastructure) must be shown separately from operating expenditure, by vote or project, with budget and actual month and year-to-date. Capital under-spending or over-spending is often a focus of Treasury and the AG. Many municipalities struggle to spend capital budgets on time; the Section 71 report surfaces this early so that council and Treasury can address delays or reallocate funds.

Cash and Investment Position

The report must reflect the municipality’s cash and investment position at month-end. This includes bank balances and investments, and is used to monitor liquidity and borrowing needs.

Debtor and Creditor Age Analysis

A debtors age analysis (who owes the municipality and for how long) and a creditors age analysis (who the municipality owes and for how long) are required. These support assessment of revenue collection and payment discipline.

Service Delivery Reporting

Service delivery indicators or outputs may be required as specified by National Treasury — for example, basic service delivery metrics that link to the budget. Check the latest circulars for the exact list.

Format Requirements: The C Schedule

The detailed format is set out in the C Schedule of the MBRR (and any amendments in circulars). The C Schedule defines the tables, columns, and line items. National Treasury may issue circulars that update or clarify the format; it is the accounting officer’s responsibility to use the current version. Your financial system should be able to produce reports that map to this structure; if it cannot, you will spend excessive time each month rebuilding the statement manually and risk transcription errors.

Step-by-Step Section 71 Preparation Guide

Use this process every month to reduce errors and meet the deadline.

Step 1: Close the Month

Ensure all transactions for the month are posted and that reconciliations are complete (bank, debtors, creditors, suspense accounts). The Section 71 report must be based on closed, reconciled data. Running the report on incomplete data is a common cause of restatements and audit queries.

Step 2: Run Budget vs Actual Reports from Your Financial System

Extract revenue by source and expenditure by vote (operating and capital) from your financial system, with budget and actual for the month and year-to-date. If your system is mSCOA-aligned and configured for municipal reporting, this step should produce outputs that align with the C Schedule.

Step 3: Compile Debtors and Creditors Age Analysis

Generate age analysis reports for debtors (outstanding consumer and other debt) and creditors (outstanding payables). Populate the prescribed age bands (e.g. current, 30 days, 60 days, 90 days, over 90 days) as required by the template.

Step 4: Prepare Cash Position Statement

Compile the month-end cash and investment position from your bank reconciliations and investment registers. Ensure the figures tie to the general ledger.

Step 5: Add Explanatory Notes for Significant Variances

Where actuals differ materially from budget (revenue shortfalls, overspending, or under-spending), add brief explanatory notes. Treasury and the AG expect reasons for material variances; missing explanations are a frequent audit finding.

Step 6: CFO Review and Sign-Off

The CFO (or equivalent) should review the draft report for completeness, consistency, and accuracy. Once satisfied, the municipal manager (accounting officer) signs off. The report is submitted on behalf of the accounting officer.

Step 7: Submit to the Mayor and to National Treasury

Submit the report to both the mayor (or council) and National Treasury. Submission to National Treasury is done via the local government reporting portal (or the system currently specified by Treasury). Submitting to only one of the two recipients is a breach of Section 71 and will be raised by the Auditor-General.

For the mid-year equivalent of this process, see our Section 72 mid-year report guide.

Common Section 71 Mistakes That Trigger AG Findings

The Auditor-General’s reports repeatedly flag the same types of failure. Avoiding these will put your municipality in a stronger position at year-end and support a clean municipal audit.

Late submissions. Submitting after the 10 working days is a direct breach of Section 71 and is regularly reported by the AG. Plan your month-end close and reporting timetable so that the Section 71 report is ready and submitted within the deadline. Many councils set an internal deadline (e.g. day 8) to allow a buffer for sign-off and portal upload.

Incomplete data. Missing schedules, blank sections, or omitted age analyses lead to qualified opinions or findings. Use a checklist (see below) to ensure every required part of the C Schedule is completed. Cross-check that no table or column is left blank where data exists.

Discrepancies between monthly and annual figures. The figures in your Section 71 reports must reconcile to your annual financial statements. Unexplained differences suggest poor reconciliation or inconsistent data and attract AG attention. Run a reconciliation between the sum of monthly Section 71 figures and the AFS before year-end to catch and correct errors early.

Lack of variance explanations. Material variances without explanations are a recurring finding. A short note for each material variance (revenue or expenditure) reduces audit risk and improves transparency. Define “material” in your policy (e.g. more than 5% or 10% of budget for that line) and document the reason (e.g. delayed grant transfer, delayed project, higher bulk costs).

Submitting to only one recipient. The Act requires submission to both the mayor and National Treasury. Submitting only to Treasury, or only to the mayor, is non-compliance. Some municipalities submit to the mayor first (for information to council) and then to Treasury; others do both on the same day. Either way, both must receive the report.

How to Automate Section 71 Reporting

Many municipalities still compile the Section 71 report by pulling data from multiple spreadsheets or legacy systems and manually filling the C Schedule. That approach is error-prone and makes the 10-day deadline difficult to meet consistently. Each month, staff re-enter figures, increasing the risk of transposition errors and consuming time that could be spent on analysis and variance explanations.

Modern municipal financial management systems can auto-generate the C Schedule from live general ledger and budget data. When your chart of accounts and budget structure align with mSCOA and the prescribed reporting format, the system can produce draft revenue, expenditure, cash, and age-analysis reports that map directly to the Section 71 template. Finance staff then focus on review, variance explanations, and sign-off rather than on manual re-keying. Automation also makes it easier to run “what if” checks before month-end (e.g. early drafts to spot missing data or misallocated items). If you are evaluating software for your municipality, look for solutions that support Section 71 (and Section 72) reporting out of the box. Dolobha is built for South African municipal finance and reporting requirements, including Section 71.

Section 71 Preparation Checklist

Use this checklist each month before submission.

Resources

MFMA and MBRR: National Treasury — MFMA for the Act and Municipal Budget and Reporting Regulations. The MBRR contains the C Schedule and related reporting formats.
Circulars and templates: National Treasury issues circulars that update reporting requirements or clarify deadlines. The local government reporting portal holds the latest submission instructions and, where applicable, templates or system specifications.
Audit guidance: Auditor-General South Africa (AGSA) publishes general reports on local government and specific municipal audit reports. Reviewing AG findings on Section 71 in your province or similar municipalities helps you avoid the same issues.

Getting the Section 71 report right every month is a cornerstone of transparent, compliant municipal financial management. With a clear process, a consistent checklist, and — where possible — automated reporting from your financial system, your team can meet the deadline, reduce audit risk, and give council and National Treasury the information they need.