agement cycle Regardless of where municipality gets its income, the money must be managed and accounted for. The financial management cycle of a municipality consists of four broad activities that take place annually, namely planning and budgeting, implementation, monitoring and evaluation: Planning and budgeting - using its IDP, a municipality determines its goals and development plans. It then uses a budget to set out its strategy for raising revenue and decides how it will allocate its resources to the activities outlined in its IDP; Implementation - it implements its plan by managing its income and expenditure; Monitoring - it will then report on how it utilised its financial resources by preparing monthly, quarterly and mid-year reports. The municipality monitors its financial and service delivery performance; Evaluating - finally, it must evaluate its financial position through financial statements and annual reports, which are also used as tools for exercising oversight over a municipality. Source: https://www.corruptionwatch.org.za/local-government-in-south-africa-part-5-finances/ (3) QUESTION 1 Distinguish between an operating budget and a capital budget? QUESTION 2 Discuss incremental budgeting, performance budgeting and activity based budgeting techniques. (12) 31 PROGRAMME HANDBOOK: JANUARY 2020 INTAKE