CENTLEC (SOC) LTD ANNUAL REPORT FINANCIAL …cms.centlec.co.za/documents/ANNUAL REPORT...

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CENTLEC (SOC) LTD ANNUAL REPORT

FINANCIAL YEAR 2015/16

http://www.bloemfonteincourant.co.za/resignation-details-of-suspended-mangaung-municipal-manager-to-be-revealed/

Centlec (SOC) Ltd Annual Report

01 July 2015 to 30 June 2016

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Registered name of the public entity Centlec (SOC) Ltd

Company registration number 2003/011612/30

Country of incorporation and domicile South Africa

Nature of business and principal activities Electricity distribution

Chief Executive Officer (CEO) Mr. A.N. Mgoqi

Chief Finance Officer (CFO) Mr. T.J. Ramulondi

Chief Operations Officer (COO) Mr. L.G. Kritzinger

Directors Mr. N. Mokhesi (Chairperson)

Ms. D.C Myeni (Deputy Chairperson)

Mr. K.M Moroka

Mr. C.A.K Choeu

Ms. Z.C Uwah

Ms. N.D Mochochoko

Mr. M.P Mohale

Mr. M.I Seoe

Registered office College Square Telkom Building

Bloemfontein

9324

Business address 195 Nelson Mandela Drive

College Square Telkom Building

Bloemfontein

9301

Postal address Private Bag X14

Brandhof

Bloemfontein

9324

Contact telephone numbers +27(51) 412 2613


01 July 2015 to 30 June 2016

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Email address [email protected]

[email protected]

Website address www.centlec.co.za

Controlling entity Mangaung Metropolitan Municipality

Bankers ABSA

Auditors Auditor-General of South Africa

Company Secretary Phatshoane Henney Inc.

Attorneys Leepile & Mbewe Inc.

EG Cooper

Phatshoane Henney Inc.

Eugene Attorneys

Motaung attorneys

Mthembu & Mahomed

Mhlambi Attorneys

Ramothello, Raynard & Tsotetsi Inc.

Maduba Attorneys

Pedzisai Pion Attorneys

mailto:[email protected]



01 July 2015 to 30 June 2016

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COMPANY SECRETARY’S CERTIFICATE TO THE SHAREHOLDER OF CENTLEC (SOC) LTD

In accordance with the provisions of the Companies Act 71 of 2008, Phatshoane Henney Inc., the

Company Secretary of Centlec State Owned Company Ltd, hereby certifies that:

In respect of the reporting period ended 30 June 2016, the Company has lodged with the

Commissioner of the Companies and Intellectual Property Commission (CIPC), all returns and notices

prescribed by the Act and that all such returns and notices are true, correct and up to date.

___________________________________________

COMPANY SECRETARY OF CENTLEC (SOC) LTD

Phatshoane Henney Inc.

Date: 30 November 2016


01 July 2015 to 30 June 2016

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CHIEF EXECUTIVE OFFICER’S QUALITY CERTIFICATION

I, A.N. Mgoqi, Chief Executive Officer of Centlec State Owned Company Ltd, hereby certify that:

The Annual Report for the 2015/2016 financial year has been prepared in accordance with the

Municipal Systems Act and the Municipal Finance Management Act and regulations made under

these Acts.

A.N. Mgoqi

CHIEF EXECUTIVE OFFICER

Date: 30 November 2016


01 July 2015 to 30 June 2016

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Legislation covering financial and administrative management:

The Constitution of the Republic of South Africa 1996, No. 108 of 1996

a) Basic Conditions of Employment Act, No. 15 of 1997 and regulations thereto

b) Labour Relation Act, No. 66 of 1995

c) South African Bargaining Council Main Collective Agreement 2007/2012

d) Occupational Health and Safety Act, No. 85 of 1993 and regulations thereto.

e) Companies Act, No. 71 of 2008, (Chapter 8) and regulations thereto

f) Municipal Finance Management Act, No. 56 of 2003 and regulations thereto

g) Municipal Systems Act, No. 32 of 2000 and regulations thereto.

h) Value Added Tax Act, No. 84 of 1991.

i) Electricity Regulations Act No. 4 of 2006

j) Nationally Energy Regulator Act, No. 40 of 2004

k) King III Corporate Governance

l) NRS048 – 2:2003 Second Edition Electricity Supply – Quality of Supply

m) NRS047 – 1:2005 Third Edition Electricity Supply Quality of Service

n) Supply Chain Management: A guide for accounting officers of Municipalities and Municipal

Entities October 2005

o) National Key Point Act, No. 102 of 1980 and regulations thereto

p) Employment Equity Act, No. 55 of 1998 and regulations thereto

q) Municipal Structures Act, No. 117 of 1998 and regulations thereto

r) Compensation for Occupational Injuries and Diseases Act, No. 130 of 1993 and regulations

thereto

s) Unemployment Insurance Act, No. 63 of 2001 and regulations thereto

t) Promotion of Administrative Justice Act, No. 3 of 2000

u) Skills Development Act, No. 97 of 1998 and regulations thereto

v) Broad-based Black Economic Empowerment Act, No. 53 of 2003

w) Cross-boundary Municipalities Laws Repeal and Related Matters Act, No. 23 of 2005

x) Municipal Fiscal Powers and Functions Act, No. 12 of2007.

y) Intergovernmental Fiscal Relations Act, No. 97 of 1997.

z) Intergovernmental Fiscal Regulations Framework.


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Abbreviations/Acronyms:

a) AFS Annual Financial Statements

b) AGSA Auditor-General South Africa

c) CEO Chief Executive Officer

d) CFO Chief Financial Officer

e) CIPC Companies and Intellectual Property Commission

f) COO Chief Operations Officer

g) DEA Department of Environmental Affairs

h) EDI Electricity Distribution Industry

i) EM Executive Manager

j) EPMDS Employee Performance Management and Development System

k) EME Emerging Micro Enterprise

l) EXCO Executive Committee

m) GRAP Generally Recognised Accounting Practices

n) HDI Historically Disadvantaged Individuals

o) ICT Information and Communication Technology

p) IDP Integrated Development Plan

q) KPA Key Performance Area

r) KPI Key Performance Indicator

s) MFMA Municipal Finance Management Act

t) MFP Municipal Finance Planning

u) MMM Mangaung Metropolitan Municipality

v) MTREF Medium-Term Revenue and Expenditure Framework

w) NERSA National Energy Regulator of South Africa

x) PMS Performance Management System

y) POE Portfolio of Evidence

z) PwC PricewaterhouseCoopers

aa) RED Regional Electricity Distributor

bb) SALGA South African Local Government Association

cc) SAWMU South African Municipal Workers Union

dd) SCM Supply Chain Management

ee) SDBIP Service Delivery and Budget Implementation Plan

ff) SHREQ Safety, Health, Risk, Environment & Quality


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gg) SMME Small Medium Micro Enterprise

hh) SOC State Owned Company

ii) WSP Workplace Skills Plan


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Glossary:

a) Accessibility

indicators:

Explore whether the intended beneficiaries are able to access services

or outputs.

b) Accountability

documents:

Documents used by executive authorities to give “full and regular”

reports on the matters under their control to Parliament and provincial

legislatures as prescribed by the Constitution. These include plans,

budgets, in-year and Annual Reports.

c) Activities: The processes or actions that use a range of inputs to produce the

desired outputs and ultimately outcomes. In essence, activities

describe "what we do".

d) Adequacy

indicators:

The quantity of input or output relative to the need or demand.

e) Annual Report: A report to be prepared and submitted annually based on the

regulations set out in Section 121 of the Municipal Finance

Management Act. Such a report must include annual financial

statements as submitted to and approved by the Auditor-General.

f) Approved Budget: The annual financial statements of a municipality as audited by the

Auditor-General and approved by council or a provincial or national

executive.

g) Baseline: Current level of performance that a municipality aims to improve when

setting performance targets. The baseline relates to the level of

performance recorded in a year prior to the planning period.

h) Basic municipal

service:

A municipal service that is necessary to ensure an acceptable and

reasonable quality of life to citizens within that particular area. If not

provided, it may endanger the public health and safety or the

environment.

i) Budget year: The financial year for which an annual budget is to be approved –

means a year ending on 30 June.

j) Cost indicators: The overall cost or expenditure of producing a specified quantity of

outputs.


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k) Distribution

indicators:

The distribution of capacity to deliver services.

l) Financial

Statements:

Includes at least a statement of financial position, statement of financial

performance, cash-flow statement, notes to these statements and any

other statements that may be prescribed.

m) General Key

performance

indicators:

After consultation with MECs for local government, the Minister may

prescribe general key performance indicators that are appropriate and

applicable to local government generally.

n) Impact: The results of achieving specific outcomes, such as reducing poverty

and creating jobs.

o) Inputs: All the resources that contribute to the production and delivery of

outputs. Inputs are "what we use to do the work". They include finances,

personnel, equipment and buildings.

p) Integrated

Development Plan

(IDP):

Sets out municipal goals and development plans.

q) National Key

performance areas:

• Service delivery and infrastructure

• Economic development

• Municipal transformation and institutional development

• Financial viability and management

• Good governance and community participation

r) Outcomes: The medium-term results for specific beneficiaries that are the

consequence of achieving specific outputs. Outcomes should relate

clearly to an institution's strategic goals and objectives set out in its

plans. Outcomes are "what we wish to achieve".

s) Outputs: The final products, or goods and services produced for delivery.

Outputs may be defined as "what we produce or deliver". An output is

a concrete achievement (i.e. a product such as a passport, an action

such as a presentation or immunization, or a service such as

processing an application) that contributes to the achievement of a Key

Result Area.


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t) Performance

Indicator:

Indicators should be specified to measure performance in relation to

input, activities, outputs, outcomes and impacts. An indicator is a type

of information used to gauge the extent to which an output has been

achieved (policy developed, presentation delivered, service rendered).

u) Performance

Information:

Generic term for non-financial information about municipal services and

activities. Can also be used interchangeably with performance

measure.

v) Performance

Standards:

The minimum acceptable level of performance or the level of

performance that is generally accepted. Standards are informed by

legislative requirements and service-level agreements. Performance

standards are mutually agreed criteria to describe how well work must

be done in terms of quantity and/or quality and timeliness, to clarify the

outputs and related activities of a job by describing what the required

result should be. In this Employee Performance Management and

Development System (EPMDS), performance standards are divided

into indicators and the time factor.

w) Performance

Targets:

The level of performance that municipalities and their employees strive

to achieve. Performance Targets relate to current baselines and

express a specific level of performance that a municipality aims to

achieve within a given time period.

x) Service Delivery

and Budget

Implementation

Plan:

Detailed plan approved by the mayor for implementing the

municipality’s delivery of services; including projections of the revenue

collected and operational and capital expenditure by vote for each

month. Service delivery targets and performance indicators must also

be included.


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y) Vote: One of the main segments into which a budget of a municipality is

divided for appropriation of money for the different departments or

functional areas of the municipality. The Vote specifies the total amount

that is appropriated for the purpose of a specific department or

functional area.

Section 1 of the MFMA defines a “vote” as:

a) one of the main segments into which a budget of a municipality

is divided for the appropriation of money for the different

departments or functional areas of the municipality; and

b) which specifies the total amount that is appropriated for the

purposes of the department or functional area concerned


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Table of Contents

Legislation covering financial and administrative management:.................................... 5

Abbreviations/Acronyms: ................................................................................................... 6

Glossary: .............................................................................................................................. 8

1. CHAPTER 1: CHAIRPERSON’S FOREWORD AND EXECUTIVE SUMMARY .......... 16

1.1. OVERVIEW BY THE CHAIRPERSON ...............................................................................................................16

1.2. Chief Executive Officers’ overview .................................................................................................18

1.3. Vision ..................................................................................................................................................21

1.4. Mission ...............................................................................................................................................21

1.5. Values .................................................................................................................................................21

1.6. Organisational structure ..................................................................................................................22

1.7. Legal Requirements ..........................................................................................................................23

1.8. Purpose of an Annual Report ..........................................................................................................23

1.9. Scope of report ..................................................................................................................................23

1.10. Functions, Population and Service Delivery Overview .................................................................23

1.11. Financial Health Overview ................................................................................................................27

2. CHAPTER 2: GOVERNANCE ...................................................................................... 30

2.1. Intergovernmental relations .................................................................................................................30

2.1.1. Introduction to co-operative governance and intergovernmental relations ....................................30

2.2. Public accountability and participation ................................................................................................31

2.2.1. Overview .........................................................................................................................................31

2.2.2. Public meetings...............................................................................................................................31

2.3. Ethical Leadership ...............................................................................................................................32

2.4. Political Governance: Board of Directors ............................................................................................32

2.4.1. Board Members as at 30 June 2016 ..............................................................................................37

2.4.2. Board meetings ...............................................................................................................................37

2.4.3. Board meeting attendance ..............................................................................................................38

2.4.4. Board Committees ..........................................................................................................................39

2.4.4.6. Engineering Committee ..............................................................................................................43

2.4.4.7. Meetings of Board Committees ..................................................................................................43

2.4.5. Board decision-making ...................................................................................................................44


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2.5. Administrative Governance .................................................................................................................45

2.5.1. The Executive Management ...........................................................................................................45

2.5.2. Remuneration .................................................................................................................................47

2.6. Corporate Governance ........................................................................................................................48

2.6.1. Corporate Citizenship .....................................................................................................................48

2.6.2. Compliance with laws, rules, codes and standards ........................................................................49

2.6.3. Risk Management and Internal Audit .............................................................................................49

2.6.4. Anti-corruption and fraud strategy ..................................................................................................52

2.6.5. Supply Chain Management ............................................................................................................53

2.6.6. The following bids were awarded during the year: .........................................................................54

2.6.7. Policies ............................................................................................................................................54

2.6.8. By-laws ...........................................................................................................................................55

2.6.9. Public participation in drafting of by-laws .......................................................................................55

2.6.10. Website .......................................................................................................................................55

2.6.11. Public Satisfaction on Municipal Services ..................................................................................57

3. CHAPTER 3: SERVICE DELIVERY PERFORMANCE ................................................ 59

3.1. Objectives and strategies ....................................................................................................................59

3.2. Pre-determined Objectives ..................................................................................................................59

3.2.1. The Annual Performance Summary of Executive Managers .........................................................59

3.2.2. Office of Chief Executive .............................................................................................................61

3.2.3. Office of Company Secretary ......................................................................................................83

3.2.4. Human Resource Services ..........................................................................................................89

3.2.5. Department of Finance .................................................................................................................98

3.2.6. Department of Engineering - Wires ..........................................................................................116

3.2.7. Department of Engineering- Retail ...........................................................................................129

3.2.8. Department of Performance & Compliance .............................................................................138

4. CHAPTER 4: ORGANISATIONAL DEVELOPMENT PERFORMANCE ................... 155

4.1. Introduction ........................................................................................................................................156

4.2. Workforce profile ...............................................................................................................................156

4.3. Employees with Disability ..................................................................................................................157

4.4. Workforce movement ........................................................................................................................158

4.4.1. Recruitment ...................................................................................................................................158

4.4.2. Promotion ......................................................................................................................................159

4.4.3. Terminations .................................................................................................................................160


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4.4.4. Human Resource Policies ............................................................................................................161

4.4.5. Financial Competency Development ............................................................................................161

5. CHAPTER 5: FINANCIAL PERFORMANCE ............................................................. 162

5.1. Revenue ............................................................................................................................................162

5.2. Expenditure .......................................................................................................................................162

5.3. Surplus ..............................................................................................................................................163

5.4. Financial Position ..............................................................................................................................163

5.5. Cash Flow Statement ........................................................................................................................163

5.6. Budget ...............................................................................................................................................163

6. CHAPTER 6: AUDITOR-GENERAL FINDINGS ON PRIOR YEAR ISSUES ............. 164

6.1. Purpose of the report.........................................................................................................................164

6.2. Introduction and background .............................................................................................................164

6.3. Executive summary: Implementation of the Audit Action Plan..........................................................165

6.3.1. Improvements to the internal control environment .......................................................................165

6.3.2. Progress on matters reported in the audit report ..........................................................................165

Contact details ................................................................................................................. 171

7. APPENDIXES ............................................................................................................. 173

7.1. APPENDIX A: BOARD MEMBERS; COMMITTEE ALLOCATION AND ATTENDANCE .................173

7.2. APPENDIX B: COMMITTEES AND COMMITTEE PURPOSES ......................................................173

7.3. APPENDIX C: THIRD TIER ADMINISTRATIVE STRUCTURE........................................................173

7.4. APPENDIX D: FUNCTIONS OF ENTITY..........................................................................................173

7.5. APPENDIX E: WARD REPORTING .................................................................................................173

7.6. APPENDIX F: WARD INFORMATION ..............................................................................................173

7.7. APPENDIX G: RECOMMENDATIONS OF THE AUDIT COMMITTEE ............................................173

7.8. APPENDIX H: LONG TERM CONTRACTS AND PUBLIC PRIVATE PARTNERSHIPS .................173

7.9. APPENDIX I: MUNICIPAL ENTITY PERFORMANCE SCHEDULE .................................................173

7.10. APPENDIX J: DISCLOSURES OF FINANCIAL INTERESTS ..........................................................173

7.11. APPENDIX K: REVENUE COLLECTION PERFORMANCE BY VOTE AND BY SOURCE ............173

7.12. APPENDIX L: CONDITIONAL GRANTS RECEIVED .......................................................................173

7.13. APPENDIX M and N: CAPITAL EXPENDITURE ..............................................................................173

7.14. APPENDIX O: CAPITAL PROGRAMME BY PROJECT BY WARD ................................................173

7.15. APPENDIX P: SERVICE CONNECTION BACKLOGS AT SCHOOLS AND CLINICS ....................173


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7.16. APPENDIX Q: SERVICE BACKLOGS EXPERIENCED BY THE COMMUNITY WHERE ANOTHER

SPHERE OF GOVERNMENT IS RESPONSIBLE FOR SERVICE PROVISION .............................173

7.17. APPENDIX R: DECLARATION OF LOANS AND GRANTS MADE .................................................173

7.18. APPENDIX S: DECLARATION OF RETURNS NOT MADE IN DUE TIME UNDER MFMA S71 ....173

7.19. APPENDIX T: ANNUAL FINANCIAL STATEMENTS ......................................................................173

7.20. APPENDIX U: REPORT OF THE AUDITOR GENERAL ON CENTLEC SOC (LTD) .....................173


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1. CHAPTER 1: CHAIRPERSON’S FOREWORD AND EXECUTIVE

SUMMARY

1.1. OVERVIEW BY THE CHAIRPERSON

In order to achieve its vision to all its customers, Centlec operates

according to a clearly defined and carefully developed strategy. We have

spent extensive time and resources on developing, refining and changing

this strategy into action, so that it can form a firm foundation on which we

can work for all the people, businesses and communities of the Southern

Free State.

Centlec has delivered on a number of important strategic areas during the financial year

2015/16. Centlec has continued to align itself to the strategies and goals of its shareholder,

Mangaung Metropolitan Municipality (MMM). The organisation values its strategic

stakeholders and builds and maintains sustainable relationships with them. Great progress

has been made in solving metering problems (tampering), which resulted in the conversion

of rotational meters to pre-paid meters, and identification and replacement of faulty meters.

The major challenge experienced during the year under review was the significant decline of

revenue. Strategies have been developed to ensure that this area of concern is being

addressed going forward.

The entity has obtained an unqualified audit opinion for the year 2014/15, which was a key

focus area because of the implementation of a broad range of controls and measures to

address the issues raised in the Auditor-General’s audit opinion in the previous year.

I am pleased to report that concerns raised over management’s difficulty in stabilising the

revenue control environment have now been addressed, and additional measures have been

instituted.


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In the year ahead, I am confident that the Board and Management of Centlec will continue to

strive to be a “reliable energy utility that enables social and economic upliftment.”

I take this opportunity to thank our shareholder, as well as my colleagues at Centlec, for their

support in the last few months in leading the organisation’s journey to achieving its goals.

As the term of office for the previous Board has come to an end, I would like to extend my

appreciation for their contribution made during their term of office. I am looking forward to this

new chapter and having the opportunity to serve the organisation and the community in the

upcoming financial year.

______________________

CHAIRPERSON OF THE BOARD

Mr. N. MOKHESI


01 July 2015 to 30 June 2016

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1.2. Chief Executive Officers’ overview

As the industry is advancing from being mechanical and technology-

focused to one that recognizes that sustainability depends on a deep

understanding of our customers and their needs, we continue to

focus on strengthening our brand in the Free State. While significant

challenges still confront our city, mostly as a result of rapid growth, I

am confident that we have made significant improvements in

delivering on the objectives of the Service Delivery and Budget

Implementation Plan (SDBIP) during the year under review.

We focused on identifying problem issues as mentioned below, which affected the entity’s

performance and customer service:

- Debt collection;

- Metering (tampering);

- Copper theft; and

- Hiking electricity tariffs.

We examined what needed to be fixed in our business and established clear plans to address

the difficult issues head-on, agreeing on a common way forward and delivering on action

plans by setting measurable milestones with regular review dates to ensure that these

problem issues are addressed and improvements delivered. We also increased our focus on

the team’s ownership and accountability for segment performance, as well as speed of action

in the event of poor delivery. It is important going forward to focus on preventative measures

rather than reactive solutions.

Despite this, we were fortunate that we could continue to render high quality services to our

residents during the past year. We will continue to do so, despite the challenges we face. The

service standards set in the Customer Services Policy will remain one of the instruments

whereby we will measure our performance.


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Centlec also invested a total of R 246 229 941 in capital projects, mainly funding infrastructure

projects. A total of R 204 801 029 of the capital expenditure has been funded internally. Part

of this money helped the entity to provide electricity successfully to the following areas:

Five hundred and thirty-seven (537) connections that have been paid for are completed.

One hundred and ninety-eight (198) new connections and one thousand six hundred and

twenty (1 620) conversions (shiftings) were completed.

Two thousand and fifty-four (2,054) smart street lights have been installed in the MMM

area by 30 June 2016.

There was 100% progress on the establishment of the 132/11kV 20MVA Groenvlei

Distribution Centre by 30 June 2016, as the sub-station has been energized.

Thirty-four (34) high masts have been erected and twenty-six (26) have been energized

in Mangaung (Bloemfontein, Botshabelo and Thaba ‘Nchu).

We place our employees first as we believe that everyone should be able to return home from

work safely. We continue to strive to reduce or eliminate risks that could harm employees,

contractors, and all others affected by our business.

Centlec’s Training and Development Centre is performing at a satisfactory level. Training is

provided to internal and external stakeholders. The section continues to participate in

industry-wide activities aimed at not only improving the electrical engineering profession, but

also at protecting the integrity of the quality of training offered to the candidates.

Centlec has implemented strategies to protect our business and improve livelihoods, to

support long-term sustainable growth, and therefore to create value for shareholders. It has

been a privilege over the past financial year to witness how deeply management and

employees believe in Centlec and the immense support and assistance that is given to local

communities.


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Going into the 2016/2017 financial year, discussions with stakeholders within the energy

sector are held regularly to ensure that Centlec’s strategic direction considers the provision

of alternative sources of energy in its business model.

I would like to extend my appreciation to the Board for their guidance. I also thank the

management team, who have embraced the challenges and worked tirelessly throughout the

year to uphold Centlec’s mission and vision.

CHIEF EXECUTIVE OFFICER

Mr. A.N. MGOQI


01 July 2015 to 30 June 2016

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1.3. Vision

“To be a reliable energy utility that enables social and economic upliftment”

1.4. Mission

To provide optimal service delivery as mandated by the Mangaung Metropolitan Municipal

Council.

To strategically manage our operations in an effective, efficient and financially prudent

manner, as measured against relevant indicators.

To seek the most cost effective and innovative energy solutions in partnership with relevant

stakeholders in order to maximise shareholder value.

To train, develop, attract and retain a highly skilled workforce and to promote sound

relations with organised labour.

To ensure a safe and healthy environment for our workforce and the community.

To be a socially responsible corporate citizen that is concerned with improving the lives of

the community and the environment in which we operate.

1.5. Values


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BOARD

(VACANT)

Company

Secretary

1.6. Organisational structure

Chief Executive Officer

A.N. Mgoqi

Executive Manager:

Human Resources

G.A.S. Molefe

Chief Operations

Officer

L.G. Kritzinger

Executive Manager:

Engineering Wires

(Acting) T. Nkala

Executive Manager:

Engineering Retail

M.A.E. Pobe

Chief Financial Officer

T.J. Ramulondi


01 July 2015 to 30 June 2016

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1.7. Legal Requirements

In terms of Section 121 (1) of the MFMA, every Municipality and every municipal entity must

for each financial year prepare an annual report in accordance with this Chapter of the MFMA.

The Council of a municipality must, within nine months after the end of a financial year, deal

with the annual report of the municipality and of any municipal entity under the Municipality’s

sole or shared control in accordance with Section 129 of the MFMA.

1.8. Purpose of an Annual Report

a) To provide a record of the activities of the municipality or municipal entity during the

financial year to which the report relates;

b) To provide a report on performance against the budget of the municipality or municipal

entity for that financial year; and

c) To promote accountability to the local community for the decisions made throughout

the year by the municipality or municipal entity.

1.9. Scope of report

This annual report covers Centlec (SOC) Ltd.’s (the municipal entity) governance, financial,

service delivery performance, and environmental, broader economic and overall sustainability

performance information for the financial year 2015/16. It provides an account of the entity’s

progress as at the end of June 2016 and offers a forward-looking perspective in terms of future

plans and value generating strategies.

1.10. Functions, Population and Service Delivery Overview

The municipal entity is mandated to provide electricity services to all its customers. As the

electricity distribution service provider of the MMM, the municipal entity’s core competency is

to purchase, distribute and sell electricity within its geographical footprint.

Centlec was established as a municipal entity wholly owned by MMM in terms of the Municipal

Systems Act, No. 32 of 2000 (“Systems Act”) and the Companies Act, No. 71 of 2008

(“Companies Act”).


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Distribution map:

The municipal entity is accountable to provide network services to all its customers, which

include:

Electricity Distribution/Energy Services: the municipal entity distributes electricity to

Mangaung, Kopanong, Naledi, Mantsopa and Mohokare Municipalities. The municipal

entity purchases most of its energy from Eskom at 20 supply points in 18 towns in the

Southern Free State and the Mangaung supply area.

Construction of Electrical Networks: All new electrification networks and upgrading of

existing networks are handled by the municipal entity’s design and construction sections

and where additional capacity is required, it is done through the supply chain processes

and the appointment of private companies.


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Operation, Maintenance and Extension of Networks: The maintenance of electricity

distribution networks forms a large part of the municipal entity’s operations. A 24-hour

standby service ensures that customers are not inconvenienced by long power outages.

Ongoing evaluation is performed on existing networks to detect any overloading or failure

and this is addressed with the upgrading and/or extension of the particular network.

Metering, Pre-payment Vending and Billing Services: Modern metering systems are

employed to meter the various categories of customers. Pre-payment and credit metering

systems are in use. Extensive pre-payment vending facilities are available to customers

to ensure convenience and availability at all times. Credit meter reading and billing was

done in-house from the 1st of July 2011.

The municipal entity has approximately two hundred and sixteen thousand five hundred and

fifty (216, 550) active customers ranging from domestic to commercial and industrial properties

as detailed below: The number has dropped slightly compared to the previous year due to a

data purification exercise which resulted in non-active meters in the Mangaung area being

deactivated from the system.

Customer Base:

Customer base as per tariff group on 30 June 2016:

Tariff Group: 2015-

2016 (Baseline)

Number of Consumers

Total MMM Kopanong Naledi Mohokare Mantsopa

INCLINING BLOCK 188 626 10 816 5 442 5 229 2 208 212 321

FLAT RATE BUSINESS 4 154 664 262 218 9 5 307

BULK RESELL 2 31 31

BULK RESELL 3 179 179

BULK RESIDENTIAL 2

SFS 1 1

BULK RESIDENTIAL 3

SFS 2 5 7


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26 | P a g e

Tariff Group: 2015-

2016 (Baseline)

Number of Consumers

Total MMM Kopanong Naledi Mohokare Mantsopa

CENTLEC

DEPARTMENTAL TOU 2 2

COMFLEX - SINGLE

PHASE 7 7

COMFLEX - THREE

PHASE 103 103

COMFLEX SFS – THREE

PHASE 9 1 10

ELECFLEX 1 4 4

ELECFLEX 2 162 162

ELECFLEX 2 SFS 4 4

ELECFLEX 3 496 496

ELECFLEX 3 SFS 17 3 9 29

HOMEFLEX - SINGLE

PHASE 3 3

HOMEFLEX - THREE

PHASE 84 84

HOMEFLEX - THREE

PHASE SFS 8 8

SPORT STADIUMS 7 7

SPORT STADIUMS SFS 2 2

TOTAL 193 858 11 522 5 714 5 456 2 217 218 767


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27 | P a g e

1.11. Financial Health Overview

Although the municipal entity has been able to honour its financial commitments, financial

viability remains one of the major challenges faced by municipalities and municipal entities.

The main challenges having an impact on the financial viability of the entity are:

Debt collection;

Low revenue growth;

Above-inflation increase in bulk purchases;

Distribution losses (mainly as a result of theft);

Cable theft; and

High unemployment.

Financial health summary

Details

Original Budget Adjustment Budget Actual

Variance % ( R ) % ( R ) % ( R )

2015/16 2015/16 2015/16

Revenue 2,529,172,610 100% 2,377,871,472 100% 2,148,595,003 229,276,469 10%

Electricity 2,385,422,917 94% 2,235,384,355 94% 2,025,684,694 * 209,699,661 9%

Grants 26,315,789 1% 26,315,789 1% 26,315,789 - 0%

Other Revenue 117,433,904 5% 116,171,328 5% 96,594,520 # 19,576,808 17%

Less: 2,306,433,918 2,131,398,749 2,145,881,886

(14,483,137) -1%

Expenditure 2,306,433,918 2,131,398,749 2,144,867,523

(13,468,774) -1%

Loss on disposal on assets

- - 1,014,363 & (1,014,363) -100%

Surplus

222,738,692 9% 246,472,723 10% 2,713,117 243,759,606 99%

*: The variance results from a plea made by Eskom to inform consumers to use electricity more sparingly and this had an impact on the general

electricity consumption. Other factors include the tariffs adjustments during the course of the year and the electricity theft and meter tampering.

#: The variance is mainly due to the fact that street lights consumption revenue has been removed from the entity’s revenue following the Council

resolution that street lights be transferred from MMM to the entity. (Refer to Note 25)

&: No budget is provided for losses.


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28 | P a g e

Financial Health Summary (Continued):

Details

Capital Expenditure

2015/16 2014/15

Original Budget R 325 356 850 R 298 963 243

Adjustment Budget R 246 122 723 R 299 093 299

Actual Expenditure R 246 229 941 R 248 319 018

R 0,00

R 500 000 000,00

R 1 000 000 000,00

R 1 500 000 000,00

R 2 000 000 000,00

R 2 500 000 000,00

R 3 000 000 000,00

Original Budget Adjustment Budget Actual

Revenue 2015/16

Revenue Electricity Grants Other Revenue Less: Expenditure Surplus

R 0

R 50 000 000

R 100 000 000

R 150 000 000

R 200 000 000

R 250 000 000

R 300 000 000

R 350 000 000

2015/16 2014/15

Capital Expenditure 2015/16

Original Budget Adjustment Budget Actual Expenditure


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29 | P a g e

CHAPTER 2: GOVERNANCE

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30 | P a g e

2. CHAPTER 2: GOVERNANCE

2.1. Intergovernmental relations

2.1.1. Introduction to co-operative governance and intergovernmental relations

Guidance in terms of co-operative governance is achieved via structures and forums created

and functioning in terms of the Intergovernmental Fiscal Relations Act and the

Intergovernmental Fiscal Regulations Framework, Service delivery in line with National

KPAs, which ultimately become municipal KPAs and eventually KPIs.

National intergovernmental structures:

The municipal entity participates in National Forums and this assists in the appropriate

allocation of resources to address service backlogs.

Provincial intergovernmental structure:

The municipal entity entered into Service Delivery Agreements with four (4) neighbouring

municipalities on electricity distribution and maintenance which enhance service delivery to

communities.

Relationships with municipal entities:

Decisions are taken by the Board according to the IDP programmes and interventions from

municipalities as well as the allocated budget for executing these decisions. Performance

contracts are entered into with all executive managers in line with the SDBIP which forms

part of the municipal SDBIP. Progress and performance of these executive managers are

reported on in terms of Section 87 of the MFMA on both a monthly and quarterly basis.

Policies of the entity relating to budget are aligned with those similar policies of the

municipality.

District intergovernmental structures:

The South African Local Government Association (SALGA) regional office plays a key role

in ensuring that regular meetings are held including local and district municipalities, with

derived benefit of service delivery co-ordination.


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2.2. Public accountability and participation

2.2.1. Overview

In terms of Section 15(1) and (2) (b) of the Municipal System Act 32 of 2000, a municipal

entity must create bylaws. These bylaws are in place and are reviewed on a needs basis.

Section 16(1) (a) (i) of the Municipal System Act requires a municipal entity to develop a

system of governance that complements formal representative governance with a system of

participatory governance. In view of this, the municipal entity does the following:

IDP meetings;

Performance management monthly reporting; and

Community participation in the budget process.

Provision is made in terms of the budget to execute Section 16(1) (c) of the Municipal System

Act. Section 18(1) (d) of the Municipal System Act requires the municipality to make available

to the community information concerning municipal governance, management and

development. The municipal entity complies with this in that there are various public meetings

held with the community.

2.2.2. Public meetings

Communication, participation and forums:

This is coordinated by MMM in terms of legislative requirements, with MMM also

responsible for arrangements in relation to the meetings.

Ward committees:

This is contained in the combined annual report of MMM.

Effectiveness of public meetings held:


IDP Participation and alignment:



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32 | P a g e

2.3. Ethical Leadership

Responsible leadership, characterised by the values of responsibility, accountability, fairness

and transparency, has been a defining characteristic of the entity since the entity’s

establishment in 2003. The Board recognises the impact that the municipal entity has on the

economy and society and therefore strives to ensure that there is an ethical relationship

between the entity and all its stakeholders. The Board has taken steps to entrench ethical

leadership in the formulation of its strategy and to ensure that there are consequences for

non-adherence to these values. The Board provides effective leadership based on a

principled foundation and the municipal entity subscribes to high ethical standards. The

Board has put in place structures and controls to inculcate an ethical culture.

The fundamental objective has always been to do business ethically while building a

sustainable entity that recognises the short- and long-term impact of its activities on the

economy, society and the environment. In its deliberations, decisions and actions, the Board

is sensitive to the interests and expectations of the municipal entity’s stakeholders and to

ensure that its decisions are grounded in the municipal entity’s values.

2.4. Political Governance: Board of Directors

The Board of Directors during the reporting term consists of eight (8) non-executive directors

and was appointed with effect from 28 February 2012. The term of the previous Board ended

in November 2011. Four (4) of the previous Board members were appointed for a period of

four (4) years, while the other four (4) members were appointed for a period of three (3)

years. At a sitting on 29 January 2015, council resolved to extend the contract of three (3)

Board members with an extra year.


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33 | P a g e

The new Board of Directors was appointed on 01 July 2016 and will serve for Four (4)

years in office.

Initials And

Surname

Designation Race Gender

N. Mokhesi

Chairperson African Male

D.C Myeni

Deputy Chairperson African Female

K.M Moroka

Non-Executive Director African Male

C.A.K Choeu

Non-Executive Director

African Male


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34 | P a g e

Initials And

Surname


Z.C Uwah

Non-Executive Director Coloured Female

N.D Mochochoko

Non-Executive Director African Female

M.P Mohale


M.I. Seoe


http://www.google.co.za/url?q=http://www.robsinvestment.co.za/pages/about-us.html&sa=U&ved=0ahUKEwiyoP3miN3QAhWMJsAKHdczALUQwW4IFTAA&usg=AFQjCNFkHKkbC3nEJkpFWHLhBSe3k8S50A


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Centlec’s out-going Board of Directors that served during the 2015/16 financial year were

as follows:

Initials And

Surname


M.L Mbali Chairperson African Male

F.P Zitha

Deputy Chairperson African Female

Z.C Uwah

Non-Executive Director Coloured Female

N. Mokhesi


S.G Xulu



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36 | P a g e

Initials And

Surname


M.S Zimu


T.A.J Mongake


K.M Moroka


The Board has met regularly and retains full control of the company. The Board remains

accountable to MMM (the municipal entity’s sole shareholder) and its stakeholders, the

citizens of Mangaung and the other areas where electricity is distributed.

Non-executive directors contribute an independent view to matters under consideration and

add to the depth of experience of the Board. The roles of Chairperson and Chief Executive

Officer of the company are separated, with responsibilities divided between them. The

Chairperson has no executive functions. Members of the Board have unlimited access to the

Company Secretary, who acts as an advisor to the Board and its committees on matters

including compliance with company rules and procedures, statutory regulations and best

corporate practices.

http://www.whoswhosa.co.za/user/8701


01 July 2015 to 30 June 2016

37 | P a g e

The Board or any of its members may, in appropriate circumstances and at the expense of

the company, obtain the advice of independent professionals.

2.4.1. Board Members as at 30 June 2016

2.4.1.1. Duties of directors

Section 93H of the Municipal System Act, No. 32 of 2000, stipulates that:

(1) The Board of Directors of a municipal entity must:

(a) Provide effective, transparent, accountable and coherent corporate governance and

conduct effective oversight of the affairs of the municipal entity;

(b) Ensure that the municipal entity comply with all applicable legislation and agreements;

(c) Communicate openly and promptly with the parent municipality of the municipal entity;

and

(d) Deal with the parent municipality of the municipal entity in good faith.

2.4.1.2. Statement of Compliance

The Board of Directors and executives recognise and are committed to the principles of

transparency, integrity and accountability advocated by the King III Code on Corporate

Governance. Through this process, the shareholder and other stakeholders are assured that

the company is being managed ethically according to prudent risk parameters in compliance

with generally accepted corporate practices. The monitoring of the company’s compliance

with King III forms part of the mandate of the Audit and Risk Committee. The municipal entity

has complied with the code in all material respects during the year under review except for

cases as reported in the note on the financial statements on non-compliance with legislation.

The Board held both ordinary and special meetings during the period under review as follows,

in which a number of decisions were taken.

2.4.2. Board meetings


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38 | P a g e

Type of meeting Date Venue

Ordinary 12/08/2015 Protea Wanderers Hotel, Corlett Drive, Sandton,

Johannesburg

Special 29/08/2015 Mangaung Metro, Bram Fischer Building, Nelson

Mandela Drive, Bloemfontein

Ordinary 07/11/2015 Centlec (SOC) Ltd, Telkom Building, 195 Nelson


Special 04/12/2015 Centlec (SOC) Ltd, Telkom Building, 195 Nelson




Special

Teleconference

13/03/2016 Centlec (SOC) Ltd, Telkom Building, 195 Nelson




2.4.3. Board meeting attendance

Names of

Directors

12/0

8/2

015

29/0

8/2

01

5

07/1

1/2

01

5

04/1

2/2

01

5

26/0

2/2

01

6

13/0

3/2

01

6

26/0

4/2

01

6

Total

M.L. Mbali √ √ √ √ √ √ √ 7/7

F.P. Zitha √ x x √ x √ √ 4/7

Z.C. Uwah x √ √ √ √ √ √ 6/7

M.S. Zimu √ √ √ x x √ √ 5/7

S.G. Xulu √ √ x x x √ √ 4/7

T.A.J. Mongake x x √ √ x √ √ 4/7

K.M. Moroka x x √ √ √ √ √ 5/7


01 July 2015 to 30 June 2016

39 | P a g e

Names of

Directors

12/0

8/2

015

29/0

8/2

01

5

07/1

1/2

01

5

04/1

2/2

01

5

26/0

2/2

01

6

13/0

3/2

01

6

26/0

4/2

01

6

Total

N. Mokhesi x x √ x √ √ x 3/7

√ = present x = apology

2.4.4. Board Committees

The Board had the following committees during the period under review:

Audit and Risk Committee;

Finance Committee;

Human Resources and Remuneration Committee;

Social Responsibility and Ethics Committee;

Information Technology Governance Committee; and

Engineering Committee.

2.4.4.1. Audit and Risk Committee

The committee is responsible for reviewing the effectiveness of the financial reporting

process, the system of internal control and management of financial risks, the assurance

process, and the entity’s process for monitoring compliance with laws and regulations and

its own code of business conduct.

Initials And Surname Designation Race Gender

T.S. Zakuza Chairperson African Male

M.C. Llale Member African Male

C.A. Choeu Member African Male

L. Majake Member African Male

N.P. Lubanga Member African Female

K.M. Moroka Board Representative African Male


01 July 2015 to 30 June 2016

40 | P a g e

Audit and Risk Committee attendance

Names of Members

11/0

8/2

01

5

28/0

8/2

01

5

23/1

0/2

01

5

30/1

1/2

01

5

15/0

1/2

01

6

19/0

2/2

01

6

22/0

4/2

01

6

Total

T.S. Zakuza √ √ √ √ √ √ x 6/7

M.C. Llale √ x √ √ √ √ √ 6/7

C.A. Choeu √ √ √ √ √ √ √ 7/7

L. Majake x √ √ x √ √ √ 5/7

N.P. Lubanga √ √ √ √ x x √ 5/7

2.4.4.2. Finance Committee

The role of the committee is to assist the Board in fulfilling its responsibility of oversight with

respect to all governance aspects, financial management and financial accounting, inter

alia assisting the Board in fulfilling its responsibility to oversee Centlec’s financial position,

financing plans and programmes, cash management, investment management, employee

retirement plans, insurance management and review of financial and procurement policies.

Initials And Surname Designation

N. Mokhesi Chairperson

T.A.J. Mongake Member

F.P. Zitha Member

Z.C. Uwah Member

Chief Executive Officer Prescribed Officer

Chief Financial Officer Prescribed Officer

Chief Operations Officer Prescribed Officer

EM: Corporate Services Invitee


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41 | P a g e

2.4.4.3. Human Resources and Remuneration Committee

The role of the committee is to assist the Board in ensuring that the company remunerates

directors and executives fairly and responsibly and the disclosure of directors and

remuneration is accurate, complete and transparent.


F.P. Zitha Chairperson

S.G. Xulu Member

M.S. Zimu Member


M.L. Mbali Member

K.M. Moroka Member




EM: Corporate Services Invitee

EM: Engineering (Retail) Invitee

EM: Engineering (Wires) Invitee

2.4.4.4. Social Responsibility and Ethics Committee

The role of the committee is to assist the Board with the oversight of social and ethical matters

and ensuring that members of the Board of Directors and employees of the entity adhere to

the established Code of Conduct in terms of Schedule 1 and 2 of Municipal Systems Act, No.

32 of 2000, as amended, the Municipal Finance Management Act, No. 56 of 2003, any other

legislation applicable to the entity as well as good governance principles as outlined in the

King III report.


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42 | P a g e


K.M. Moroka Chairperson


F.P. Zitha Member




2.4.4.5. Information Technology Governance Committee

The role of the committee is to oversee the implementation, monitoring and review of the

Centlec policies, procedures, practices and guidelines aimed at meeting the Information and

Communication Technology (ICT) governance requirements as stipulated in King III.


S.G. Xulu Chairperson

M.S. Zimu Member

Z.C. Uwah Member

K.M. Moroka Invitee






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43 | P a g e

2.4.4.6. Engineering Committee

The committee is charged with the responsibility to oversee the implementation, monitoring

and review of the Centlec policies, procedures, practices and guidelines aimed at meeting

the requirements as stipulated in the NRS 047 and 048 documents.


M.S. Zimu Chairperson

S.G. Xulu Member

N. Mokhesi Member





EM: Engineering (Wires) Invitee

2.4.4.7. Meetings of Board Committees

The respective committees held meetings as follows during the period under

review:

Committee No. of meetings Dates of meetings

IT GOVERNANCE

4

07 August 2015

26 October 2015

22 February 2016

19 April 2016

ENGINEERING

4

07 August 2015

26 October 2015

22 February 2016


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44 | P a g e

Committee No. of meetings Dates of meetings

19 April 2016

HR & REMUNERATION

4

07 August 2015

26 October 2015

22 February 2016

19 April 2016

SOCIAL RESPONSIBILITY

& ETHICS

3

21 December 2015

11 March 2016

25 April 2016

FINANCE

4

12 July 2015

20 October 2015

24 February 2016

19 April 2016

AUDIT & RISK

7

11 August 2015

28 August 2015 Special

23 October 2015

30 November 2015 Special

15 January 2016 Special

19 February 2016

22 April 2016

2.4.5. Board decision-making

During the period under review, the Board has taken a number of decisions for

implementation. Decisions were taken from duly constituted meetings in line with legislation

and such decisions were minuted, the records of which are available in the office of the

Company Secretary.


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45 | P a g e

2.5. Administrative Governance

The functional areas of the municipal entity’s administration are divided into the Office of the

Chief Executive Officer, Chief Financial Officer, Compliance and Performance, Human

Resources, Engineering - Wires and Engineering - Retail. The entity employed over 506 staff

members.

The entire administration is under the leadership of the Chief Executive Officer who is

accountable to the Board of Directors.

2.5.1. The Executive Management

The Chief Executive Officer, together with his senior managers, constitutes the executive

management team of the municipal entity. The following individuals were part of the

executive management team of the municipal entity for the period under review:

Initials And

Surname


A.N. Mgoqi Chief Executive Officer A Male

T.J. Ramulondi Chief Financial Officer A Male

L.G. Kritzinger Chief Operations Officer W Male

M.A.E. Pobe EM: Engineering Retail A Male

T. Nkala* Acting EM: Engineering Wires A Male

G.A.S. Molefe EM: Human Resource A Female

Explanatory notes on the composition of management during the current year

2015/16.

* Mr M. Sekoboto was appointed as acting EM: Engineering Wires from 01 May 2015 to 31

July 2015.

* Mr M.A.E. Pobe was appointed as acting EM: Wires from 01 August 2015 to 10 December

2015.

* Mr X.G. Faku was appointed as acting EM: Engineering Wires from 11 December 2015 to

10 March 2016.


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46 | P a g e

* Mr P. Mohapi was appointed as acting EM: Engineering Wires from 11 March 2015 to 10

June 2016.

* Mr T. Nkala was appointed as acting EM: Engineering Wires from 13 June 2016 to 12

September 2016.

The Executive Committee held various meetings during the year under review.

Type of meeting Date Particulars of

representative(s)

Ordinary 02 July 2015 None





Extended EXCO meeting 05 August 2015 Engineering GMs

Ordinary 19 August 2015 None

Ordinary 27 August 2015 None

Special 16 September 2015 None

Ordinary 30 September 2015 None

Ordinary 14 October 2015 None

Special 16 October 2015 None

Continuation of Special 21 October 2015 None

Special 04 November 2015 SAMWU

Special 11 November 2015 Trade Unions

Ordinary 18 November 2015 None

Ordinary 25 November 2015 None

Ordinary 03 December 2015 None

Ordinary 09 December 2015 None


01 July 2015 to 30 June 2016

47 | P a g e

Type of meeting Date Particulars of

representative(s)

Special 12 January 2016 None

Ordinary 20 January 2016 None

Ordinary 19 February 2016 None

Extended EXCO meeting 24 February 2016 GMs

Ordinary 16 March 2016 None

Ordinary 30 March 2016 None

Ordinary 14 April 2016 None

Ordinary 20 April 2016 None

Special 13 May 2016 None

Ordinary 01 June 2016 None




Special 24 June 2016 SAWMU


2.5.2. Remuneration

Non-Executive Directors’ and Independent Audit and Risk Committee members’ fees are

only paid in accordance with the council’s approved fee structure. The remuneration of Non-

Executive Directors amounted to R 1,279,036 while the remuneration of Executive

Management amounted to R 8,574,711. A total of R 74, 031 was paid to officials as acting

allowances. See Notes 30 and 47 respectively for detail in the Annual Financial Statements.


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48 | P a g e

2.6. Corporate Governance

The Board of Directors has adopted a Board charter, which includes matters of ethics,

procedure and conduct of members. The charter is aligned with the MMM charter. Registers

are kept and updated on the disclosure and declaration of interests of directors and senior

management. The Board and senior management ensure that there is full material

compliance to all relevant legislation. The municipal entity’s secretary has certified that all

statutory returns have been submitted to the Companies and Intellectual Property

Commission (CIPC) in terms of Section 268(d) of the Companies Act.

The Board of Directors subscribes to the MMM corporate governance protocol which, inter

alia, regulates its relationship with MMM as its sole shareholder and parent municipality in

the interests of good corporate governance and sound ethics.

The municipal entity’s practices are, in most material instances, in line with the principles set

out in King III. The Board continually reviews the municipal entity’s progress to ensure

improvements in corporate governance. During the review period, the municipal entity

entrenched its risk management reviews. Reporting and compliance assessments were

conducted in terms of the Companies Act and the MFMA.

The annual report for the previous year was completed efficiently in accordance with the

prescripts of Section 121 of the MFMA. The compilation of this annual report was guided by

the same principles.

2.6.1. Corporate Citizenship

The Board and Executive Management recognise that the municipal entity is formed under

a political structure. As such, it has a social and moral standing in society with all the

attendant responsibilities. The Board is therefore responsible for ensuring that the municipal

entity protects, enhances and invests in the well-being of the economy, society and the

natural environment, and pursues its activities within the limits of social, political and

environmental responsibilities outlined in international conventions on human rights. The

Board has a Social Responsibility and Ethics Committee which is tasked with the

responsibility of ensuring that the entity strives to be a good corporate citizen.


01 July 2015 to 30 June 2016

49 | P a g e

2.6.2. Compliance with laws, rules, codes and standards

The Board is responsible for ensuring that the municipal entity complies with applicable laws

and considers adhering to non-binding rules, codes and standards. The Board has an Audit

and Risk Committee which is tasked with the responsibility of exercising oversight over

compliance.

2.6.3. Risk Management and Internal Audit

The internal audit function of the entity is outsourced to PricewaterhouseCoopers (PwC) who

have continued to provide this service from the previous financial year.

Centlec’s internal audit activity underwent an external quality assessment in July 2014 of

which the outcome of the assessment was “General Conformance”. This means that the

internal audit activity of Centlec conforms to the International Standards for the Professional

Practice of Internal Auditing, which include the Definition of Internal Auditing, Code of Ethics,

and Standards.

The internal audit strategic and operational plan was prepared for the period under review

for consideration and approval by the Audit and Risk Committee. In line with the MFMA, the

plan is risk-based and determined the priorities of the internal audit activities for the period

under review.

Risk assessment workshops were conducted, and risk registers were compiled: The risk

assessment reports dated July and November 2014 identified the top risks facing Centlec.

Further risks identified during various internal audit engagements with a critical or significant

impact rating during the past 15 months were also taken into consideration as per our

summary report dated 04 August 2015. The reports were submitted to the Audit and Risk

Committee for consideration. Based on 2015/16 Internal Audit Plan, the Internal Audit Unit

prepared the following reports for submission to the Audit and Risk Committee.

Type of Report Date of the

Report

Develop internal audit strategic and operational plan 24 August 2015


01 July 2015 to 30 June 2016

50 | P a g e


Report

Employee appointment date verification (ad hoc) 27 October 2015

Employee verification process internal audit (ad hoc) 21 January 2016

Knowledge and communication management internal audit 01 February 2016

Audit of Performance Information (Q1 review) 02 February 2016

Review and updating of Internal Audit Charter 29 February 2016

Review and updating of Audit and Risk Committee Charter 29 February 2016

Review and updating of Internal Audit Policy and Procedure

Manual

29 February 2016

Review and updating of Quality and Assurance Improvement

Programme

29 February 2016

Combined assurance policy, framework and implementation plan 29 February 2016

Review and update of Centlec Fraud Prevention Plan 16 March 2016

Close-up of employees files for the 2015/2016 financial year (ad

hoc)

08 April 2016

Audit of Performance Information (Q2 review) 18 April 2016

Corporate Governance internal audit 18 April 2016

Organisational health and safety internal audit 06 May 2016

Internal Audit of revised key performance indicators for 2016/2017

financial year

10 May 2016

Budgetary internal audit 23 May 2016

Supply chain and contract management 24 May 2016

Review and update of Centlec Risk Strategy and Policy 30 May 2016

Review of 2016/2017 SDBIP KPIs (ad hoc) 30 May 2016

Business risk assessment 01 June 2016

Audit of Performance Information (Q3 review) 22 June 2016


01 July 2015 to 30 June 2016

51 | P a g e


Report

Human resources management - recruitment and training 29 June 2016

Payroll management 12 July 2016

Fleet management internal audit 22 July 2016

Asset maintenance and security management 25 July 2016

Fraud risk assessment 05 August 2016

Follow-up on previous year’s external audit findings and the

proposed actions

15 August 2016

Financial year-end stock count 18 August 2016

The list below indicates internal audit projects that were in process as at year-end:

Type of Report

The internal audit projects currently in the progress of being completed are:

Internal quality review of the Internal audit division, performed by an IIA accredited

quality assessor

Sectional workshop - IT risk assessment

ICT audit

Customer service internal audit

Mid-year performance evaluation of executive management

Revenue management internal audit

Debtors management

Internal Audit projects scheduled for after year-end:

Review of Annual Financial Statements (AFS) for the 2015/2016 financial year

Leave balance internal audit

Audit of Performance Information (Q4 review)


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52 | P a g e

2.6.4. Anti-corruption and fraud strategy

Centlec subscribes to the principles of good corporate governance, which require the

conducting of business in an honest and transparent manner.

Centlec has a fully functional Audit and Risk Committee in place that executes the oversight

role in fraud prevention. Centlec further has an established and implemented Fraud

Prevention Plan (“the Plan” or “FPP”).

The plan incorporates principles contained in the King Report on Governance for South Africa

– 2009 and the King Code of Governance Principles – 2009, and outlines how Centlec will

address the identification of fraud and taking appropriate action to minimize the effect thereof

on the organisation.

Centlec is committed to fighting fraudulent behaviour at all levels within the organisation.

The policy of Centlec is zero tolerance to fraud. In addition, Centlec will investigate all

incidents of alleged fraud, followed by the application of all remedies available and the

implementation of appropriate prevention and detection controls. These prevention and

detection controls include the existing financial and other controls and checking mechanisms

as prescribed in the systems, policies and procedures of Centlec.

Throughout the financial year, internal audit facilitated several fraud awareness workshops

with employees.

Additionally, a fraud risk assessment workshop was held that incorporated the inputs from

various employees.

During this session, the participants were made aware of the key fraud risks facing Centlec.

The participants completed a survey of the significant risks after the workshop.

The ratings of the identified risks were obtained through a consensus average of the

individual votes obtained on each of these risks.


01 July 2015 to 30 June 2016

53 | P a g e

The risk assessment process focussed on the following components of the framework:

Event identification – Internal and external events affecting the achievement of an

entity’s objectives (distinguishing between risks and opportunities);

Event categorisation – Events were categorised to individual strategic thrust

objectives; and

Risk assessment – Risks are rated on their impact on each objective, if materialised,

and the likelihood of materialising.

Centlec has an in-house fraud hotline where possible fraud, corruption or any activities

relating to illegal or unethical businesses conducted can be reported.

The in-house fraud hotline can be contacted through the switchboard by dialling

Tel 051 409 2303, and selecting the correct option.

The in-house fraud hotline is monitored and properly maintained by the Chief Security Officer

of Centlec, who will maintain a confidential register.

2.6.5. Supply Chain Management

All the bid committees as per the Supply Chain Management Policy and National Treasury

Guideline have been established by the Chief Executive Officer, and convened regularly to

perform their functions. This addresses the MFMA requirement in Section 112.

Consistent with the Supply Chain Management Policy of the entity, none of the directors or

officers entered into any commercial transaction with the entity during the period under

review.

Supply Chain and Expenditure Management reports were submitted to the Audit and Risk

Committee. The following committees administer procurement within the entity:

Bid Specification Committee

Bid Evaluation Committee

Bid Adjudication Committee


01 July 2015 to 30 June 2016

54 | P a g e

2.6.6. The following bids were awarded during the year:

Bids Awarded for

2015/16

Black

Owned

HDI (Women/Africans

Ownership)

Local

50 29 7 32

2.6.7. Policies

Various budget-related policies were submitted to the Board and council for approval. The

table below outlines the approved policies for 2015/16:

No. Approved Policies Board

1 Value-Added Tax (VAT) Policy 25 June 2015

2 SCM Policy 25 June 2015

3 Asset Management Policy 25 June 2015

4 Budget and Reporting Policy 25 June 2015

5 Virement Policy 25 June 2015

6 Credit Control and Debt Collection Policy 25 June 2015

7 Banking and Investment Policy 25 June 2015

8 Bad Debts Policy 25 June 2015

9 Tariffs Policy 25 June 2015

10 Irregular, Fruitless and Wasteful Expenditure Policy 25 June 2015

11 Electricity Connection and Disconnection Policy 25 June 2015

12 Electricity Consumption Estimates Policy 25 June 2015

13 Revenue Policy 25 June 2015

14 Customer Care Policy 25 June 2015

15 Long-term Debtors Policy 25 June 2015

16 Sundry Income Policy 25 June 2015


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55 | P a g e

No. Approved Policies Board

17 Prepaid Electricity Vending Policy 25 June 2015

18 Petty Cash Policy 25 June 2015

19 Subsistence & Travel Policy 25 June 2015

2.6.8. By-laws

There is an Electricity by-law which was published in the Government Gazette on 28 August

1998, under notice 116.

2.6.9. Public participation in drafting of by-laws

Electricity by-laws are revised on a national basis and await supporting legislation in terms

of small scale solar generation.

2.6.10. Website

We are very excited and proud of our re-designed website that was launched during the

financial year. Visit us at our new web address www.centlec.co.za.

The site’s homepage features bright colours and an uncluttered design. We wanted to make

the new website faster, easier to navigate, and more user-friendly.

The website has been divided into the following main tabs:

Home;

Centlec (About us);

Customer care;

Media; Bids;

Services;

Careers;

Tariffs;

Prepaid; and

Contact Us.

http://www.centlec.co.za/


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56 | P a g e

These main tabs were designed to provide detailed information to our appreciated

customers.

The entity’s website has been functional and accessible during the period under review.

Documents to be Published on the Entity’s Website Published / Not

Published

The previous annual reports (2012/13, 2013/14 & 2014/15) Published

All supply chain management contracts above R 100 000 (VAT included) Published

Contracts agreed in 2015/16 to which subsection (1) of Section 33 of the

MFMA applies, subject to subsection (3) of that section

Published

Service Delivery Budget Implementation Plan

SDBIP 2014/15

SDBIP 2015/16

Published

Performance Agreements for 2015/16 and 2016/17 Published

Business Plan

Multi-year Business Plan 2016/17

Published

Budgets

Medium Term Revenue and Expenditure Framework (MTREF)

2014/15 To 2016/17

MTREF 2016-17 To 2018/19

Budget Approval 2015/2016 and 2017/18 by Council

Published

Tariffs

Service Charges 2015/16

Service Charges 2016/17

Electricity Tariffs 2015/16

Electricity Tariffs 2016/17

Published


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57 | P a g e

Documents to be Published on the Entity’s Website Published / Not

Published

Policies

VAT Policy

SCM Policy

Asset Management Policy

Budget and Reporting Policy

Virement Policy

Credit Control and Debt Collection Policy

Banking and Investment Policy

Bad Debts Policy

Tariffs Policy

Irregular, Fruitless and Wasteful Expenditure Policy

Electricity Connection and Disconnection Policy

Electricity Consumption Estimates Policy

Revenue Policy

Customer Care Policy

Long-term Debtors Policy

Sundry Income Policy

Prepaid Electricity Vending Policy

Petty Cash Policy

Subsistence & Travel Policy

Published

2.6.11. Public Satisfaction on Municipal Services

This task is executed by Mangaung Metropolitan Municipality.


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58 | P a g e

CHAPTER 3: SERVICE DELIVERY

PERFORMANCE

CHAPTER 3: SERVICE DELIVERY PERFORMANCE


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59 | P a g e

3. CHAPTER 3: SERVICE DELIVERY PERFORMANCE

The parent municipality must ensure that the annual performance objectives and indicators for

the municipal entity are established in agreement with the municipal entity and included in the

municipal entity’s multi-year business plan in accordance with Section 87(5) (d) of the MFMA.

3.1. Objectives and strategies

In line with Section 87(5) (d) of the MFMA, the municipal entity developed a multi-year business

plan which reflected the objectives for the financial year 2015/16.

Therefore, the developmental strategies as espoused in the entity’s Business Plan are directly

linked to specific developmental needs and objectives which must be measured in the

organisational Performance Management System (PMS), and give effect to the targets/goals of

Service Delivery and Budget Implementation Plan (SDBIP) .

3.2. Pre-determined Objectives

Details of Pre-determined Objectives are provided in Section 3.2.2 of this report.

3.2.1. The Annual Performance Summary of Executive Managers

Centlec understands that performance information is the key to effective management,

including planning, budgeting, implementation, monitoring and reporting. Performance

information also facilitates effective accountability, enabling members of the public and other

interested parties to track progress, to identify the scope for improvement and better

understand the issues involved. Going forward Centlec will strive to achieve 100% of all KPI’S

set going forward towards a 100% achievement rate of all KPI’s set.


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60 | P a g e

The following table presents the key performance of the relevant executives.

Executive Managers Total

No. of

KPIs

Total No. of

KPIs Achieved

for Annual

Performance

Remedial Action

Chief Executive

Officer 17 13

Line managers will closely monitor

performance to ensure the targets are

achieved

Chief Financial

Officer 20 15



achieved

Company Secretary 6 6



achieved

Executive Manager:

Human Resource 9 4



achieved

Executive Manager:

Engineering Wires 13 6



achieved

Executive Manager:

Engineering Retail 10 5



achieved

Executive Manager:

Performance and

Compliance

13 7



achieved

The total No. of

KPI’s of all the

Executive Managers

88 56

For the 2015/2016 financial year Centlec

fully achieved 64% of its set targets.

Centlec (SOC) Ltd Annual Report 01 July 2015 to 30 June 2016

61 | P a g e

3.2.2. Office of Chief Executive

Section 93J of the Municipal Systems Act 32 of 2000: Appointment of chief executive officer.—

The chief executive officer of a municipal entity is accountable to the board of directors for the management of the municipal entity.

VOTE: OFFICE OF THE CHIEF EXECUTIVE OFFICER

UNIT: STRATEGIC SUPPORT

PERFORMANCE OBJECTIVES AND INDICATORS ANNUAL PERFORMANCE TARGETS

FOR THE PERIOD 1 JULY 2015 – 30 JUNE 2016

Key

Performance

Area (KPA)

Strategic

Objective

Key Performance

Indicator (KPI)

Unit of

Measurement

Baseline Annual Target

2015/16

Actual annual

performance

achieved

Reasons for

the Variances

(Over-/under-

achieved)

Corrective

measures taken

to improve

performance

Good

Governance &

Public

Participation

Ensure

compliance

with statutory

financial

reporting

requirements.

12 Monthly, 4

quarterly and 1

annual financial

reports in terms of

section 87, 88, and

121 of Municipal

Finance

Management Act, 56

of 2003 submitted to

12 monthly

financial reports,

4 signed

quarterly signed

off-reports, 1

Mid-term

performance &

budget

assessment

2014/15

Section

87,88 and

121

submitted

to the

parent

municipality

- 12 signed

monthly

financial reports

- 4 signed

quarterly -

reports

- 1 Mid-term

performance &

budget

- Twelve (12)

signed monthly

Section 87

financial reports

were submitted

to the parent

municipality

within seven (7)

Target

Achieved.

Not Required.


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62 | P a g e




Key

Performance

Area (KPA)

Strategic

Objective

Key Performance

Indicator (KPI)

Unit of

Measurement


2015/16

Actual annual

performance

achieved

Reasons for

the Variances

(Over-/under-

achieved)

Corrective

measures taken

to improve

performance

the parent

municipality by 30

June 2016

report,1 final

draft budget for

2016/17, 1

Annual Report

for 2014/15

and 1 Annual

Financial

Statement for

2014/15

assessment

report

- 1 final draft

budget for

2016/17

- 1 Annual Report

for 2014/15

- 1 Annual

Financial

Statement for

2014/15

working days of

each quarter.

- Four (4)

quarterly signed

off reports on

the

implementation

of the SCM

Policy were

submitted to the

parent

municipality

within seven (7)

working days of

each quarter.

- One (1) Mid-

term


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Key

Performance

Area (KPA)

Strategic

Objective

Key Performance

Indicator (KPI)

Unit of

Measurement


2015/16

Actual annual

performance

achieved

Reasons for

the Variances

(Over-/under-

achieved)

Corrective

measures taken

to improve

performance

performance &

budget

assessment

report was

submitted by 20

January 2016.

- One (1) mid-

term

performance

and budget

assessment

report for

2015/16 was

submitted by 20

January 2016.

- One (1) final

draft budget for


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Key

Performance

Area (KPA)

Strategic

Objective

Key Performance

Indicator (KPI)

Unit of

Measurement


2015/16

Actual annual

performance

achieved

Reasons for

the Variances

(Over-/under-

achieved)

Corrective

measures taken

to improve

performance

2016/17 was

submitted by 31

March 2016.

– One (1) Annual

Report for the

2014/15 financial

year and the

financial

statement for

2014/15 was

submitted by 31

August 2015 to

AGSA.

Good

Governance &

Public

Participation

Ensure

achievement

and maintain

Audit report with

clean, unqualified

audit opinion on both

financial and non-

Signed-off

Auditor-

General’s report

2013/14

unqualified

audit

opinion

Unqualified audit

opinion on both

financial and non-

financial

Internal Findings:

Eleven (11)

Internal audit

For Sixteen

(16) Internal

findings

management

Management

actions will be

provided on all


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65 | P a g e




Key

Performance

Area (KPA)

Strategic

Objective

Key Performance

Indicator (KPI)

Unit of

Measurement


2015/16

Actual annual

performance

achieved

Reasons for

the Variances

(Over-/under-

achieved)

Corrective

measures taken

to improve

performance

clean audit

opinion

financial

(performance

information)

for 2015/16

financial year

(performance

information) for

2015/16 financial

year by 30

November 2016

engagements

completed

– Total of One

hundred and

seventy-nine

(179) findings:

Critical – Six (6)

Significant-

Seventy-five (75)

Housekeeping-

Fifty-seven (57)

Positive – Forty-

one (41)

Management

responses:

comments/

action have

not yet been

provided.

outstanding

findings.


01 July 2015 to 30 June 2016

66 | P a g e




Key

Performance

Area (KPA)

Strategic

Objective

Key Performance

Indicator (KPI)

Unit of

Measurement


2015/16

Actual annual

performance

achieved

Reasons for

the Variances

(Over-/under-

achieved)

Corrective

measures taken

to improve

performance

Received – One

hundred and

twenty-two (122)

Not Received –

Sixteen (16)

Not required

(positive) – Forty-

one (41)

External Findings:

For the remaining

forty-two (42)

findings as per

the management

report, the

following took

place:


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67 | P a g e




Key

Performance

Area (KPA)

Strategic

Objective

Key Performance

Indicator (KPI)

Unit of

Measurement


2015/16

Actual annual

performance

achieved

Reasons for

the Variances

(Over-/under-

achieved)

Corrective

measures taken

to improve

performance

•For thirteen (13)

findings

addressed, the

findings were

confirmed to be

resolved and the

documentation

presented were

adequate to

support this fact;

•For sixteen (16)

findings

addressed, the

findings were

confirmed to be

evaluated during

the subsequent


01 July 2015 to 30 June 2016

68 | P a g e




Key

Performance

Area (KPA)

Strategic

Objective

Key Performance

Indicator (KPI)

Unit of

Measurement


2015/16

Actual annual

performance

achieved

Reasons for

the Variances

(Over-/under-

achieved)

Corrective

measures taken

to improve

performance

external audit

process at year

end:

•For nine (9)

findings, the

documentary

proof was readily

made available

for review; and

•For seven (7)

findings, the

documentary

proof was not

made available in

a timely manner

for review.


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Key

Performance

Area (KPA)

Strategic

Objective

Key Performance

Indicator (KPI)

Unit of

Measurement


2015/16

Actual annual

performance

achieved

Reasons for

the Variances

(Over-/under-

achieved)

Corrective

measures taken

to improve

performance

•For thirteen (13)

findings

addressed, the

findings were

confirmed not to

be resolved;

however,

documentary

proof of remedial

actions was

available as

follows:

For eight (8)

findings, the

documentary

proof was readily


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Key

Performance

Area (KPA)

Strategic

Objective

Key Performance

Indicator (KPI)

Unit of

Measurement


2015/16

Actual annual

performance

achieved

Reasons for

the Variances

(Over-/under-

achieved)

Corrective

measures taken

to improve

performance

made available

for review; and

For five (5)

findings, the

documentary

proof was not

made available in

a timely manner

for review.

Infrastructure

Development &

Service

Delivery

Ensure

optimization of

business

processes

Various ICT systems

(i.e. Financial

systems, Vending

systems, etc.,

aligned to the extent

possible and

acquisition of

Internal audit

reports on the

extent of

alignment of ICT

systems and

efficiency

thereof and

relevant signed

Gap/

Situational

analysis

reports

based on

2014/15

progress on

100% alignment

and linking of

various ICT

systems and

acquisition of

automated SCM

to improve

information

The system

integration has

not yet

commenced.

The new

organogram

has been

implemented

and the

system

deliverables

are still going

The new

organogram has

been implemented

and the right

people are going

to be appointed in

the vacant

positions.


01 July 2015 to 30 June 2016

71 | P a g e




Key

Performance

Area (KPA)

Strategic

Objective

Key Performance

Indicator (KPI)

Unit of

Measurement


2015/16

Actual annual

performance

achieved

Reasons for

the Variances

(Over-/under-

achieved)

Corrective

measures taken

to improve

performance

automated SCM

system

agreements for

automated SCM

system

this

objective

efficiency of

information

processing and

reporting by 30

June 2016

to be

conducted.

The system

engineering

department

still has to be

capacitated.

Good

Governance &

Public

Participation

Ensure a

functional

Internal Audit

Unit

4 quarterly Internal

Audit reports

submitted to the

Board of Directors

and Audit and Risk

Committee

Number of

quarterly

Internal Audit

reports

submitted to the

Board of

Directors and

Audit and Risk

Committee

2014/15

Internal

Audit Plan,

related

reports and

minutes of

the Board

and Audit

and Risk

Committee

4 Internal Audit

reports submitted

to the Board of

Directors and

Audit and Risk

Committee by 30

June 2016

Three (3) Internal

Audit reports were

submitted to the

Board of Directors

and the Audit and

Risk Committee

by 30 June 2016.

Quarter 4

progress

report will only

be tabled in

July (the date

still needs to

be confirmed)

at the next

Audit and Risk

Not Required.


01 July 2015 to 30 June 2016

72 | P a g e




Key

Performance

Area (KPA)

Strategic

Objective

Key Performance

Indicator (KPI)

Unit of

Measurement


2015/16

Actual annual

performance

achieved

Reasons for

the Variances

(Over-/under-

achieved)

Corrective

measures taken

to improve

performance

meetings

where

internal

audit

reports

were

discussed

Committee

meeting.


01 July 2015 to 30 June 2016

73 | P a g e

UNIT: SAFETY, HEALTH, RISK, ENVIRONMENT & QUALITY (SHREQ)



Key

Performance

Area (KPA)

Strategic

Objective

Key Performance

Indicator (KPI)

Unit of

Measurement


2015/16

Actual annual

performance

achieved

Reasons for

the Variances

(Over-/under-

achieved)

Corrective

measures taken

to improve

performance

Transformation

and

Organisational

Development.

Ensure

sustainable

and

responsible

approach to

business.

4 quarterly internal

Safety, Health, Risk,

Environment &

Quality (SHREQ)

compliance reports

with indicators of

highest level of

compliance with all

applicable legislation

and the company

policy on SHREQ

Number of

quarterly

internal SHREQ

reports, NOSA

reports and/or

Certificates of

Compliance

Accredited

training

intervention

s and rating

of the

company in

line with

NOSA

standards.

Less than 2% of

total workforce

reported and

confirmed to have

sustained injuries

and fatalities

while on duty by

30 June 2016

Three (3) monthly

reports for each

quarter have been

conducted that

reflect the type of

accidents that

took place

There is no

variance as

accidents are

unplanned

uncertainties

More safety talks

need to be

presented so that

employees are

abreast of safety

issues.

Employees also

need to adhere to

safety measures

in order to

eliminate injuries

and fatalities on

duty

Transformation

and

Organisational

Development.

Empower

employees

with

knowledge

Four (4) accredited

training interventions

provided to

Number of

accredited

training

interventions

2014/15

Quarterly

SHREQ

Four (4)

accredited

training

interventions

One (1)

accredited

training

interventions was

Three (3)

accredited

training

interventions

A decision was

made to arrange

training in the

third and fourth


01 July 2015 to 30 June 2016

74 | P a g e




Key

Performance

Area (KPA)

Strategic

Objective

Key Performance

Indicator (KPI)

Unit of

Measurement


2015/16

Actual annual

performance

achieved

Reasons for

the Variances

(Over-/under-

achieved)

Corrective

measures taken

to improve

performance

about SHREQ

Legislation

employees regarding

SHREQ Legislation

provided to

employees

regarding

SHREQ

Legislation

training

reports

provided to

employees

regarding SHREQ

legislation by 30

June 2016

provided to

employees

regarding SHREQ

legislation by 30

June 2016

were not

provided to

employees

regarding

SHREQ

legislation.

The fourth

firefighting

training was

conducted by

the MMM Fire

Department

quarter of every

financial year

Transformation

and

Organisational

Development.

Reduce the

number of

major

environmental

incidents

4 Quarterly

monitoring of

compliance with

SHREQ legislation

and ensure

Number of

quarterly

monitoring

reports and

rating report/

3-star

rating in

line with

NOSA

standards

4 Quarterly

monitoring reports

and 3-star rating

report/certificate

in line with NOSA

Four (4) quarterly

monitoring reports

in line with NOSA

standards were

Target

Achieved

Not Required.


01 July 2015 to 30 June 2016

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Key

Performance

Area (KPA)

Strategic

Objective

Key Performance

Indicator (KPI)

Unit of

Measurement


2015/16

Actual annual

performance

achieved

Reasons for

the Variances

(Over-/under-

achieved)

Corrective

measures taken

to improve

performance

incurred and

reported

enforcement so as to

limit major

environmental

incidents in order to

maintain a 3-star

rating level by 30

June 2016

certificate in line

with NOSA

standards by 30

June 2016

conducted by 30

June 2016

Transformation

and

Organisational

Development.

Empower

employees

with

knowledge

about

HIV/AIDS

A minimum of four

(4) education/

information sessions

held with employees

regarding HIV/AIDS

by 30 June 2016

Number of

education/

information

sessions held

with employees

regarding

HIV/AIDS by 30

June 2016

Number of

information/

education

sessions

held in

2014/15

Four (4)

education/

information

sessions held with

employees

regarding

HIV/AIDS by 30

June 2016

Eleven (11)

education/

information

sessions were

held with

employees

regarding

HIV/AIDS by 30

June 2016.

Target

Achieved

Not Required


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76 | P a g e

UNIT: MARKETING & COMMUNICATION



Key

Performance

Area (KPA)

Strategic

Objective

Key Performance

Indicator (KPI)

Unit of

Measurement


2015/16

Actual annual

performance

achieved

Reasons for

the Variances

(Over-/under-

achieved)

Corrective

measures taken

to improve

performance

Transformation

and

Organisational

Development.

To market

Centlec and

promote

access to

information on

institutional

activities.

4 marketing

initiatives undertaken

by 30 June 2016

Number of

marketing

initiatives

undertaken by

30 June 2016

2014/15

marketing

initiatives

4 marketing

initiatives

undertaken by 30

June 2016

Fourteen (14)

marketing

initiatives were

undertaken by 30

June 2016

Target

Achieved

Not Required

Transformation

and

Organisational

Development.

To enhance

good relations

with the media

(Dedicated

Communicatio

n Platform -

External)

2 media publications

and 4 media

sessions held with

the media about the

business of the entity

by 30 June 2016

Number of

media

publications and

media sessions

held with media

about the

business of the

entity by 30

June 2016

Number of

2014/15

media

publications

and media

session

held.

2 media

publications and 4

media sessions

held with media

about the

business of the

entity by 30 June

2016

Two (2) media

publications and

four (4) media

sessions were

held with the

media about the

business of the

entity by 30 June

2016

Target

Achieved

Not Required


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77 | P a g e

UNIT: MARKETING & COMMUNICATION



Key

Performance

Area (KPA)

Strategic

Objective

Key Performance

Indicator (KPI)

Unit of

Measurement


2015/16

Actual annual

performance

achieved

Reasons for

the Variances

(Over-/under-

achieved)

Corrective

measures taken

to improve

performance

Transformation

and

Organisational

Development.

To publish

Newsletter

regarding the

business of

the entity on a

quarterly

basis.

(Dedicated

Communicatio

n Platform -

Internal)

4 quarterly

newsletters

published regarding

the business of the

entity by 30 June

2016

Number of

quarterly

newsletters

published

regarding the

business of the

entity by 30

June 2016

Number of

quarterly

newsletters

published

regarding

the

business

during

2014/15.

4 quarterly

newsletters

published

regarding the

business of the

entity by 30 June

2016

Six (6) internal

newsletters were

published

regarding the

business of the

entity by 30 June

2016

The target was

over-achieved

due to many

activities that

took place that

needed to be

reported and

published

Not Required


01 July 2015 to 30 June 2016

78 | P a g e

UNIT: LEGAL & CONTRACT SERVICES



Key

Performance

Area (KPA)

Strategic

Objective

Key Performance

Indicator (KPI)

Unit of

Measurement


2015/16

Actual annual

performance

achieved

Reasons for

the Variances

(Over-/under-

achieved)

Corrective

measures taken

to improve

performance

Transformation

and

Organisational

Development.

Ensure

provision of

sound internal

Legal

Services.

100% of user

departments’

requests for legal

and contract services

executed by 30 June

2016

% of user

departments’

requests for

legal and

contract

services

executed by 30

June 2016

N/A 100% of user

departments’

requests for legal

and contract

services executed

by 30 June 2016

The three (3)

monthly contract

management

reports for each

quarter which

reflect legal and

contract services

were submitted by

Phatshoane

Henney by 30

June 2016

Target

Achieved

Not Required


01 July 2015 to 30 June 2016

79 | P a g e

UNIT: AUDIT & RISK MANAGEMENT



Key

Performance

Area (KPA)

Strategic

Objective

Key Performance

Indicator (KPI)

Unit of

Measurement


2015/16

Actual annual

performance

achieved

Reasons for

the Variances

(Over-/under-

achieved)

Corrective

measures taken

to improve

performance

Good

Governance &

Public

Participation

Ensure

effective

Internal Audit

and Risk

Management

Services

Reviewed the

Internal Audit Charter

and submitted to the

Board for approval

by 31 July 2015

Number of

reviewed

Internal Audit

Charters

submitted to the

Board for

approval by 31

July 2015

2014/15

approved

Internal

Audit

Charter

1 Reviewed the

Internal Audit

Charter and

submitted to the

Board for

approval by 31

July 2015

Internal Audit

Charters were

reviewed by the

Board by 31 July

2015

Target

Achieved

Not Required

Good

Governance &

Public

Participation

Ensure

effective

Internal Audit

and Risk

Management

Services

Develop 1 risk-based

Annual Internal Audit

Plan for the 2015/16

financial year and

submit to the Board

for approval by 31

July 2015

Number of risk-

based Annual

Internal Audit

Plan for the

2015/16

financial year

submitted to the

Board for

2014/15

Annual

Internal

Audit Plan

Develop 1-risk

based Annual

Internal Audit

Plan for the

2015/16 financial

year and submit

to the Board for

approval by 31

July 2015

The Internal Audit

plan was

approved by the

Audit Committee

on 28 August

2015

Target

Achieved

Not Required


01 July 2015 to 30 June 2016

80 | P a g e




Key

Performance

Area (KPA)

Strategic

Objective

Key Performance

Indicator (KPI)

Unit of

Measurement


2015/16

Actual annual

performance

achieved

Reasons for

the Variances

(Over-/under-

achieved)

Corrective

measures taken

to improve

performance

approval by 31

July 2015

Good

Governance &

Public

Participation

Ensure

effective

Internal Audit

and Risk

Management

Services

Quarterly evaluate

and improve the

effectiveness of risk

management, control

and governance

processes of the

entity by 30 June

2016

Frequency of

evaluation and

improvement of

the

effectiveness of

risk

management,

control and

governance

processes of the

entity by 30

June 2016

2014/15

Internal

Audit

reports

Quarterly

evaluate and

improve the

effectiveness of

risk management,

control and

governance

processes of the

entity by 30 June

2016

The quarterly

reports for each

quarter were

submitted to the

Audit and Risk

Committee

meetings

Target

Achieved

Not Required


01 July 2015 to 30 June 2016

81 | P a g e




Key

Performance

Area (KPA)

Strategic

Objective

Key Performance

Indicator (KPI)

Unit of

Measurement


2015/16

Actual annual

performance

achieved

Reasons for

the Variances

(Over-/under-

achieved)

Corrective

measures taken

to improve

performance

Good

Governance &

Public

Participation

Ensure

effective

Internal Audit

and Risk

Management

Services

Quarterly examining,

evaluating and

reporting on the

adequacy and

effectiveness of the

risk management

process by 30 June

2016

Frequency of

examining,

evaluating and

reporting on the

adequacy and

effectiveness of

the risk

management

process by 30

June 2016

2014/15

Internal

Audit

reports

Quarterly

examining,

evaluating and

reporting on the

adequacy and

effectiveness of

the risk

management

process by 30

June 2016

Examining,

evaluating and

reporting on the

adequacy and

effectiveness of

the risk

management

process is an

ongoing internal

audit process

Target

Achieved

Not Required


01 July 2015 to 30 June 2016

82 | P a g e




Key

Performance

Area (KPA)

Strategic

Objective

Key Performance

Indicator (KPI)

Unit of

Measurement


2015/16

Actual annual

performance

achieved

Reasons for

the Variances

(Over-/under-

achieved)

Corrective

measures taken

to improve

performance

Quarterly evaluate at

institutional level the

existing controls in

terms of their

adequacy and

effectiveness by 30

June 2016

Frequency of

evaluation at

institutional level

of the existing

controls in terms

of their

adequacy and

effectiveness

2014/15

Internal

Audit

reports

Quarterly

evaluate at

institutional level

the existing

controls in terms

of their adequacy

and effectiveness

by 30 June 2016

Quarterly

evaluating the

existing controls

in terms of their

adequacy and

effectiveness is

an ongoing

internal audit

process

Target

Achieved

Not Required


01 July 2015 to 30 June 2016

83 | P a g e

3.2.3. Office of Company Secretary

Section 88 of the Companies Act No. 71 of 2008: Duties of company secretary.—

(1) A company’s secretary is accountable to the company’s board.

(2) A company secretary’s duties include, but are not restricted to—

(a) Providing the directors of the company collectively and individually with guidance as to their duties, responsibilities and powers;

(b) Making the directors aware of any law relevant to or affecting the company;

(c) Reporting to the company’s board any failure on the part of the company or a director to Comply with the Memorandum of

Incorporation or rules of the company or this Act;

(d) Ensuring that minutes of all shareholders meetings, board meetings and the meetings of any committees of the directors, or of the

company’s audit committee, are properly recorded in accordance with this Act;

(e) Certifying in the company’s annual financial statements whether the company has filed required returns and notices in terms of this

Act, and whether all such returns and notices appear to be true, correct and up to date;

(f) Ensuring that a copy of the company’s annual financial statements is sent, in accordance with this Act, to every person who is entitled

to it;

(g) Carrying out the functions of a person designated in terms of section 33 (3).


01 July 2015 to 30 June 2016

84 | P a g e

VOTE: OFFICE OF COMPANY SECRETARY

UNIT: COMPANY SECRETARY



Key

Performance

Area (KPA)

Strategic

Objective

Key Performance

Indicator (KPI)

Unit of

Measurement


2015/16

Actual annual

performance

achieved

Reasons for

the Variances

(Over-/under-

achieved)

Corrective

measures taken

to improve

performance

Good

Governance &

Public

Participation

Ensure

compliant and

timely

submission of

the company’s

annual return.

Submit the 2016

Statutory Annual

Return of the

company to CIPC as

required by the

Companies Act by 23

May 2016

Date of

submission of

2016 Statutory

Annual Return

of the company

to CIPC as

required by the

Companies Act.

2015

Statutory

Annual

Return

Submit the 2016

Statutory Annual

Return of the

company to CIPC

as required by the

Companies Act by

23 May 2016.

The Statutory

Annual Return of

the company was

submitted to CIPC

as required by the

Companies Act by

23 May 2016.

Target

Achieved.

Not Required.

Good

Governance &

Public

Participation

Maintain an up

to date register

of interests of

directors.

Ensure that all 11

Directors (executive

and non-executive)

of the company

complete appropriate

declaration of

Number of

Directors

(executive and

non-executive)

who completed

declaration of

2014/15

Declaration

of interests

completed

Ensure that all 11

Directors

(executive and

non-executive) of

the company

complete

appropriate

All eleven (11)

(Directors

(executive and

non-executive) of

the company

have completed

the appropriate

Target

Achieved.

Not Required.


01 July 2015 to 30 June 2016

85 | P a g e




Key

Performance

Area (KPA)

Strategic

Objective

Key Performance

Indicator (KPI)

Unit of

Measurement


2015/16

Actual annual

performance

achieved

Reasons for

the Variances

(Over-/under-

achieved)

Corrective

measures taken

to improve

performance

interest forms by 31

July 2015.

interest forms by

31 July 2015.

declaration of

interest forms by

31 July 2015.

declaration of

interest forms by

31 July 2015.

Good

Governance &

Public

Participation

Maintain an

updated

register of

Company

Directors

Ensure that details of

any incoming or

outgoing Director as

appointed from time

to time are updated

on the register for the

period 1 July 2015 to

30 June 2016.

Updated register

of Directors

2014/15

Register of

Directors

Quarterly sign-off

register of

Directors to certify

that details of any

incoming or

outgoing Director

as appointed from

time to time are

updated on the

register for the

period 1 July

2015 to 30 June

2016.

The signed off

register of

Directors to certify

that details of any

incoming or

outgoing Director

as appointed from

time to time were

updated on the

register for the

period 1 July

2015 to 30 June

2016.

Target

Achieved.

Not Required.


01 July 2015 to 30 June 2016

86 | P a g e




Key

Performance

Area (KPA)

Strategic

Objective

Key Performance

Indicator (KPI)

Unit of

Measurement


2015/16

Actual annual

performance

achieved

Reasons for

the Variances

(Over-/under-

achieved)

Corrective

measures taken

to improve

performance

Good

Governance &

Public

Participation

Ensure that

company

records are

retained in

accordance

with the law.

Maintain a signed

register of retained

company records in

compliance with

Section 24 of the

Companies Act for

the period 1 July

2015 to 30 June

2016

Signed register

of retained

company

records in

compliance with

Section 24 of

the Companies

Act for the

period 1 July

2015 to 30 June

2016

2014/15

Register of

company

records

Quarterly signed-

off register of

retained company

records in

compliance with

Section 24 of the

Companies Act

for the period 1

July 2015 to 30

June 2016

The register of

retained company

records in

compliance with

Section 24 of the

Companies Act

for the period 1

July 2015 to 30

June have been

signed off

quarterly.

Target

Achieved.

Not Required.

Good

Governance &

Public

Participation

Ensure

compliance

with

submission of

annual

Ensuring that copies

of the company’s

signed-off pre-

audited 2014/15

annual financial

statements are

Copies of the

company’s

signed-off pre-

audited 2014/15

annual financial

statements are

2013/14

pre-audited

Annual

Financial

statements

Ensuring that

copies of the

company’s

signed-off pre-

audited 2014/15

annual financial

Copies of the

company’s

signed-off pre-

audited 2014/15

annual financial

statements were

Target

Achieved.

Not Required.


01 July 2015 to 30 June 2016

87 | P a g e




Key

Performance

Area (KPA)

Strategic

Objective

Key Performance

Indicator (KPI)

Unit of

Measurement


2015/16

Actual annual

performance

achieved

Reasons for

the Variances

(Over-/under-

achieved)

Corrective

measures taken

to improve

performance

financial

statements.

submitted to the

parent municipality

and the Auditor-

General by 31

August 2015

submitted to the

parent

Municipality and

the Auditor-

General by 31

August 2015

statements are

submitted to the

parent

Municipality and

the Auditor-

General by 31

August 2015

submitted to the

parent

Municipality and

the Auditor-

General by 31

August 2015.

Good

Governance &

Public

Participation

Provide

guidance to the

Board as to

their statutory

responsibility.

Ensure that 100% of

the company and the

Board’s requests for

guidance to comply

with the company’s

Memorandum of

Incorporation, the

Board Charter or

rules of the company

% of the

company and

the Board’s

requests for

guidance to

comply with the

company’s

Memorandum of

Incorporation,

the Board

N/A 100% of user

departments’

requests for legal

and contract

services executed

by 30 June 2016.

100% of the

company and the

Board’s requests

for guidance to

comply with the

company’s

Memorandum of

Incorporation, the

Board Charter or

rules of the

Target

Achieved.

Not Required.


01 July 2015 to 30 June 2016

88 | P a g e




Key

Performance

Area (KPA)

Strategic

Objective

Key Performance

Indicator (KPI)

Unit of

Measurement


2015/16

Actual annual

performance

achieved

Reasons for

the Variances

(Over-/under-

achieved)

Corrective

measures taken

to improve

performance

are executed by 30

June 2016.

Charter or rules

of the company

are executed by

30 June 2016.

company received

for this quarter

are executed by

30 June 2016.


01 July 2015 to 30 June 2016

89 | P a g e

3.2.4. Human Resource Services

The Corporate Services Department is headed by the Executive Manager: Corporate Services and is responsible for, inter alia:

a) the development of a performance-based culture, custodian of the organisational structure; supportive role to the CEO and other

executives;

b) strengthening business structure and applying a range of business goals and overseeing the application of the best practice standards

in human resources management, centralized supports;

c) effective knowledge/information management and business process systems management.

VOTE: HUMAN RESOURCE SERVICES

UNIT: HUMAN RESOURCE MANAGEMENT



Key

Performance

Area (KPA)

Strategic

Objective

Key

Performance

Indicator (KPI)

Unit of

Measurement


2015/16

Actual annual

performance

achieved

Reasons for

the Variances

(Over-/under-

achieved)

Corrective

measures taken

to improve

performance

Transformation

and

Organisational

Development.

Fill all

vacancies as

per request

received from

user

Ensure that

recruitment and

selection of staff is

100% competed

within a period of

Number of

months it takes

for recruitment

and selection of

staff to be 100%

N/A Ensure that

recruitment and

selection of staff

is 100%

competed within a

The recruitment

and selection of

staff was 100%

completed within

a period of three

Target

Achieved.

Not required


01 July 2015 to 30 June 2016

90 | P a g e




Key

Performance

Area (KPA)

Strategic

Objective

Key

Performance

Indicator (KPI)

Unit of

Measurement


2015/16

Actual annual

performance

achieved

Reasons for

the Variances

(Over-/under-

achieved)

Corrective

measures taken

to improve

performance

departments

each financial

year.

three (3) months

after receipt of

approved and

signed requisition

to fill vacancies

from user

departments by

30 June 2016

completed after

receipt of

approved and

signed

requisition to fill

vacancies from

user

departments by

30 June 2016

period of three (3)

months after

receipt of

approved and

signed requisition

to fill vacancies

from user

departments by

30 June 2016

(3) months after

receipt of

approved and

signed requisition

to fill vacancies

from user

departments.

Nine (9)

appointments and

eight (8)

promotions were

made during the

year.

Transformation

and

Review

Employment

Equity Plan

Review

Employment

Equity Plan in line

Reviewed

Employment

Equity Plan in

2014/15

Employment

Equity Plan

Review

Employment

Equity Plan in line

Target not

achieved.

There was a

delay in the

appointment of

The development/

review of the

Employment


01 July 2015 to 30 June 2016

91 | P a g e




Key

Performance

Area (KPA)

Strategic

Objective

Key

Performance

Indicator (KPI)

Unit of

Measurement


2015/16

Actual annual

performance

achieved

Reasons for

the Variances

(Over-/under-

achieved)

Corrective

measures taken

to improve

performance

Organisational

Development.

with the

organisational

staff turnover by

31 May 2016 for

implementation in

the 2016/17

financial year.

line with the

organisational

staff turnover by

31 May 2016 for

implementation

in the 2016/17

financial year.

with the

organisational

staff turnover by

31 May 2016 for

implementation in

the 2016/17

financial year.

the service

provider.

Equity Plan will be

completed in Q1

of the 2016/17

financial year.

The service

provider will be

appointed to

assist with the

development/

review of the

Employment

Equity Plan.

Transformation

and

Organisational

Development.

Effective

management

of leave

records

Update leave

register 100%

monthly with all

the leave forms

received and that

% of leave

register that is

updated

monthly with all

the leave forms

2014/15

Leave

records

Update leave

register 100%

monthly with all

the leave forms

received and that

Target is 97.5%

achieved.

The reason for

the variance is

that the leave

application and

approval

The internal audit

unit has been

appointed to

review and

update the leave


01 July 2015 to 30 June 2016

92 | P a g e




Key

Performance

Area (KPA)

Strategic

Objective

Key

Performance

Indicator (KPI)

Unit of

Measurement


2015/16

Actual annual

performance

achieved

Reasons for

the Variances

(Over-/under-

achieved)

Corrective

measures taken

to improve

performance

the register is

reconciled to the

leave forms by 30

June 2016.

received and

that the register

is reconciled to

the leave forms

by 30 June

2016.

the register is

reconciled to the

leave forms by 30

June 2016.

process was

delayed which

resulted in the

leave forms

received to be

captured late.

process to ensure

that it is complete

and accurately

captured.

Transformation

and

Organisational

Development.

Review Human

Resources

Policies

Review 20

Human Resource

policies in line

with applicable

collective

agreements and

legislation by 30

June 2016

Number of

Human

Resource

policies

reviewed in line

with applicable

collective

agreements and

legislation by 30

June 2016

20 Human

Resource

Policies

implemented

in 2014/15

Review 20

Human Resource

policies in line

with applicable

collective

agreements and

legislation by 30

June 2016

Target not

achieved.

There was a

delay in the

commencement

of the work by

the service

provider.

The training

committee has

been assigned to

review and

update human

resource policies

of the entity.

Updating will be

concluded in Q2

of the 2016/17

financial year.


01 July 2015 to 30 June 2016

93 | P a g e

UNIT: LABOUR RELATIONS



Key

Performance

Area (KPA)

Strategic

Objective

Key

Performance

Indicator (KPI)

Unit of

Measurement


2015/16

Actual annual

performance

achieved

Reasons for the

Variances

(Over-/under-

achieved)

Corrective

measures taken

to improve

performance

Transformation

and

Organisational

Development.

Ensure Sound

Labour

Relations

12 Monthly

meetings held

with Labour

Unions by 30

June 2016

Number of

monthly

meetings with

Labour Unions

by 30 June

2016

Number of

meetings

held with

Labour

Unions in

2014/15.

12 Monthly

Meetings with

Labour Unions by

30 June 2016

Twelve (12)

meetings were

held with the

Labour Unions

during the year

under review.

Target Achieved. Not required.

Transformation

and

Organisational

Development.

Ensure Sound

Labour

Relations

Conduct 4

quarterly

workshops on

collective

agreements on

discipline with all

staff members by

30 June 2016

Conduct 4

quarterly

workshops on

collective

agreements on

discipline with

all staff

members by 30

June 2016.

N/A Conduct 4 quarterly

workshops on

collective

agreements on

discipline with all

staff members by

30 June 2016

Seventeen (17)

workshops were

conducted during

the year on

collective

agreements on

discipline with all

staff.

We strive for

excellency in

order to

contribute to the

success of the

company

successful.

Not required.


01 July 2015 to 30 June 2016

94 | P a g e

UNIT: LABOUR RELATIONS



Key

Performance

Area (KPA)

Strategic

Objective

Key

Performance

Indicator (KPI)

Unit of

Measurement


2015/16

Actual annual

performance

achieved

Reasons for the

Variances

(Over-/under-

achieved)

Corrective

measures taken

to improve

performance

Transformation

and

Organisational

Development.

Instil

Workplace

Discipline

Ensure internal

disciplinary

actions for each

case are

completed within

3 months after

initiation for the

period 1 July

2015 to 30 June

2016

Number of

months it takes

for internal

disciplinary

actions for each

case to be

completed after

initiation for the

period 1 July

2015 to 30 June

2016

N/A Ensure internal

disciplinary actions

for each case are

completed within 3

months after

initiation for the

period 1 July 2015

to 30 June 2016

There were

twenty-one (21)

cases of

misconduct

reported up to 31

March 2016 and

only twenty (20 )

of the reported

cases were

concluded by 30

June 2016.

There is one

case outstanding

pending the

investigations.

We endeavour to

finalise the cases

within prescribed

timeframes and

manage them in

terms of the

conditions of

service.


01 July 2015 to 30 June 2016

95 | P a g e

UNIT: HUMAN RESOURCE DEVELOPMENT



Key

Performance

Area (KPA)

Strategic

Objective

Key Performance

Indicator (KPI)

Unit of

Measurement


2015/16

Actual annual

performance

achieved

Reasons for

the Variances

(Over-/under-

achieved)

Corrective

measures taken

to improve

performance

Transformation

and

Organisational

Development.

Ensure

capacitated

and

empowered

workforce

Implement

approved

Workplace Skills

Plan 100% and

ensure quarterly

monitoring and

reporting thereof

against employees’

progress by 30

June 2016

% of Workplace

Skills Plan

implemented

and Quarterly

Workplace Skills

reports

2014/15

Workplace

Skills

reports

Implement

approved

Workplace Skills

Plan 100% and

ensure quarterly

monitoring and

reporting thereof

against

employees’

progress by 30

June 2016.

There are three (3)

courses that are

ongoing and five (5)

courses approved

as per WSP, which

are the following:

1. Municipal

Finance

Management

Programme

(MFMP),

2. Apprenticeship;

and

The service

provider for

customer

services and

project

management

courses had

not been

appointed at

the end of Q4.

The SCM

processes will be

fast-tracked to

accelerate the

appointment of

the service

provider(s) to

provide training

on customer

service and

project

management

courses.


01 July 2015 to 30 June 2016

96 | P a g e




Key

Performance

Area (KPA)

Strategic

Objective

Key Performance

Indicator (KPI)

Unit of

Measurement


2015/16

Actual annual

performance

achieved

Reasons for

the Variances

(Over-/under-

achieved)

Corrective

measures taken

to improve

performance

3. Adult Basic

Education &

Training (ABET)

Transformation

and

Organisational

Development.

Ensure

compliance

with

Regulations on

the Minimum

Competency

Levels.

Ensure that all 6

Executives

(including the CEO)

meet the prescribed

minimum

competency levels

by 30 November

2016.

Number of

Executive

Managers who

meet the

prescribed

minimum

competency

levels by 30

November

2016.

N/A Ensure that all 6

Executives

(including the

CEO) meet the

prescribed

minimum

competency

levels by 30

November 2016.

The COO, CFO

and the Executive

Manager:

Engineering Retail

have enrolled for

the MFMP course

in 2014.

The CEO and

Executive Manager:

Human Resource

have also enrolled

for the MFMP

The MFMP

course is still

in progress.

Not required.


01 July 2015 to 30 June 2016

97 | P a g e




Key

Performance

Area (KPA)

Strategic

Objective

Key Performance

Indicator (KPI)

Unit of

Measurement


2015/16

Actual annual

performance

achieved

Reasons for

the Variances

(Over-/under-

achieved)

Corrective

measures taken

to improve

performance

course on the 04

April 2016.


01 July 2015 to 30 June 2016

98 | P a g e

3.2.5. Department of Finance

Section 81 of Municipal Finance Management Act 56 of 2003; Role of chief financial officer: (1) the chief financial officer of a municipality.

(a) Is administratively in charge of the budget and treasury office;

(b) Must advise the accounting officer on the exercise of powers and duties assigned to the accounting officer in terms of this Act;

(c) Must assist the accounting officer in the administration of the municipality’s bank accounts and in the preparation and implementation of

the municipality’s budget;

(d) Must advise senior managers and other senior officials in the exercise of powers and duties assigned to them in terms of section 78 or

delegated to them in terms of section 79; and

(e) Must perform such budgeting, accounting, analysis, financial reporting, cash management, debt management, supply chain

management, financial management, review and other duties as may in terms of section 79 be delegated by the accounting officer to the

chief financial officer.


01 July 2015 to 30 June 2016

99 | P a g e

VOTE: FINANCE

UNIT: REVENUE MANAGEMENT



Key

Performance

Area (KPA)

Strategic

Objective

Key

Performance

Indicator (KPI)

Unit of

Measurement


2015/16

Actual annual

performance

achieved

Reasons for

the Variances

(Over-/under-

achieved)

Corrective

measures taken

to improve

performance

Financial

Viability and

Management

Ensure

efficient

revenue

collection and

management.

Debt collection

improved by 50%

on arrear debt and

80% on current

accounts based

on 2014/15

figures by 30 June

2016.

% of Debt

collection

improvement on

arrear debt and

on current

accounts based

on 2014/15

figures by 30

June 2016.

2014/15

revenue

collection

reports and

debtors age

analysis.

Improve debt

collection by 50%

on arrear debt and

80% on current

accounts based

on 2014/15

figures by 30 June

2016.

Arrear Debt

80.5% and

Current Bill

80.4%.

New staff was

appointed and

that improved

performance on

accounts billing.

Not required.

Financial

Viability and

Management

Improve

allocation of

payments

received to

accounts.

95% allocation of

payments

received through

Cashiers and 90%

through Direct

deposits on a

monthly basis

% allocation of

payments

received

through

Cashiers and

through Direct

deposits on a

2014/15

reconciliation

statements

95% allocation of

payments

received through

Cashiers and 90%

through Direct

deposits on a

monthly basis

98% Cashier

allocation

95% Direct

deposit allocation.

New staff was

appointed and

that improved

performance on

allocation of

payments

Not required.


01 July 2015 to 30 June 2016

100 | P a g e




Key

Performance

Area (KPA)

Strategic

Objective

Key

Performance

Indicator (KPI)

Unit of

Measurement


2015/16

Actual annual

performance

achieved

Reasons for

the Variances

(Over-/under-

achieved)

Corrective

measures taken

to improve

performance

throughout the

year.

monthly basis

throughout the

year.

throughout the

year.

received and

direct deposits.

Financial

Viability and

Management

Improve

accuracy of

accounts

billing

95% accuracy in

billing based on

the number of

accounts billed on

a monthly basis

throughout the

year.

% accuracy in

billing based on

the number of

accounts billed

on a monthly

basis

throughout the

year.

2014/15

accounts

billing reports

95% accuracy in

billing based on

the number of

accounts billed on

a monthly basis

throughout the

year.

100% accurate

billing for the year

under review.

New staff was

appointed and

that improved

performance on

billing of

accounts

Not required.

Financial

Viability and

Management

Improve

efficiency of

accounts

mailing

100% mailing/

sending of printed

statements on a

monthly basis

throughout the

year.

% mailing/

sending of

printed

statements on a

monthly basis

2014/15

accounts

mailing

registers

100% mailing/

sending of printed

statements on a

monthly basis

throughout the

year.

100% sending of

printed

statements on a

monthly basis for

the year under

review.

Target

Achieved.

Not required.


01 July 2015 to 30 June 2016

101 | P a g e




Key

Performance

Area (KPA)

Strategic

Objective

Key

Performance

Indicator (KPI)

Unit of

Measurement


2015/16

Actual annual

performance

achieved

Reasons for

the Variances

(Over-/under-

achieved)

Corrective

measures taken

to improve

performance

throughout the

year.

Financial

Viability and

Management

Ensure billing

based on

actual readings

100% of actual

meter readings

taken are

uploaded and

billed on accounts

on a monthly basis

throughout the

year.

% of actual

meter readings

taken, uploaded

and billed on

accounts on a

monthly basis

throughout the

year.

2014/15

meter

reading

reports

100% of actual

meter readings

taken are

uploaded and

billed on accounts

on a monthly basis

throughout the

year.

100% of meter

reading taken

were uploaded

and billed for the

year under

review.

Target

Achieved.

Not required.

Financial

Viability and

Management

Ensure timely

handling of

customer

queries/

complaints.

Clear/resolve 90%

of all accounts-

related customer

queries/

complaints

received each

% of all

accounts-

related

customer

queries/

complaints

cleared/

2014/15

Helpdesk

reports.

Clear/resolve 90%

of all accounts-

related customer

queries/

complaints

received each

100% clearing/

resolving of

customer

queries/complaint

s for the year

under review.

Target

Achieved.

Not required.


01 July 2015 to 30 June 2016

102 | P a g e




Key

Performance

Area (KPA)

Strategic

Objective

Key

Performance

Indicator (KPI)

Unit of

Measurement


2015/16

Actual annual

performance

achieved

Reasons for

the Variances

(Over-/under-

achieved)

Corrective

measures taken

to improve

performance

week throughout

the year.

resolved as

received each

week

throughout the

year.

week throughout

the year.

Financial

Viability and

Management

Perform

periodic main

revenue-

related ledger

accounts

reconciliations

Monthly

reconciliation of

all bank, debtors,

vendors and

merchants

accounts

throughout the

year.

Frequency of

reconciliation of

all bank,

debtors,

vendors and

merchants

accounts

throughout the

year.

2014/15

reconciliation

statements.

Reconcile all

bank, debtors,

vendors and

merchants

accounts on a

monthly basis

throughout the

year.

100% of the

debtors, bank,

vendors and

merchants

accounts

reconciliations

were performed.

Target

Achieved.

Not required.


01 July 2015 to 30 June 2016

103 | P a g e

UNIT: FINANCIAL MANAGEMENT & SUPPORT



Key

Performance

Area (KPA)

Strategic

Objective

Key

Performance

Indicator (KPI)

Unit of

Measurement


2015/16

Actual annual

performance

achieved

Reasons for

the Variances

(Over-/under-

achieved)

Corrective

measures taken

to improve

performance

Financial

Viability and

Management

Ensure

prudent cost

management

and prevent

fruitless and

wasteful

expenditure

Contain all

controllable costs

e.g. travelling

costs, pay

suppliers within

30 days of receipt

of valid invoice,

throughout

2015/16.

The period of

payment of

suppliers’

invoices

2014/15

approved

budget

Contain all

controllable costs,

pay suppliers

within 30 days of

receipt of valid

invoice with no

disputed delivery

of goods/ services

throughout

2015/16

98% of suppliers

and creditors

were paid within

30 days.

2% of suppliers’

invoices were

submitted late to

the Finance

Department for

processing of

payments.

Ensure that

project managers

and SCM officials

submit invoices

on time to the

Finance

Department for

payment

processing

according to the

stipulated

timeframes.

Financial

Viability and

Management

Maintain

sustainable

liquidity levels

Maintaining

positive cash flow

represented by

net cash flow from

operating

Bank

statements with

positive Bank

Balance month-

2014/15

Section 87

reports and

bank

statements

Maintain positive

cash flow

represented by

net cash flow from

operating

100% positive

cash flow for each

Quarter. Cash

flow statements

were submitted

Target

Achieved.

Not Required.


01 July 2015 to 30 June 2016

104 | P a g e




Key

Performance

Area (KPA)

Strategic

Objective

Key

Performance

Indicator (KPI)

Unit of

Measurement


2015/16

Actual annual

performance

achieved

Reasons for

the Variances

(Over-/under-

achieved)

Corrective

measures taken

to improve

performance

activities after

capital

expenditure

month-on-month

for the financial

year.

on-month for the

financial year.

activities after

capital

expenditure

month–o- month

for the financial

year.

for each quarter

for the year under

review.

Financial

Viability and

Management

Ensure

retention and

safekeeping of

expenditure

documents

File and register

100% of all

monthly payment

vouchers and

accompanying

supporting

documents and

keep in safe

custody within 30

days of the end of

each month

% of monthly

payment

vouchers and

accompanying

supporting

documents filed

and registered

within 30 days

of end of each

month

throughout the

2014/15

expenditure

records

File and register

100% of all

monthly payment

vouchers and

accompanying

supporting

documents and

keep in safe

custody within 30

days of the end of

each month

98% of all

payment

vouchers and

supporting

documents are

kept in safe

custody within 30

days at the end of

each month

throughout the

2% of the

payment

vouchers and

accompanying

supporting

documents were

not sent to

storage at the

time of

reporting.

We will Ensure

that officials

requesting

payment

vouchers take

responsibility by

signing for the

vouchers when

taking them out of

the cabinet as


01 July 2015 to 30 June 2016

105 | P a g e




Key

Performance

Area (KPA)

Strategic

Objective

Key

Performance

Indicator (KPI)

Unit of

Measurement


2015/16

Actual annual

performance

achieved

Reasons for

the Variances

(Over-/under-

achieved)

Corrective

measures taken

to improve

performance

throughout the

2015/16 financial

year.

2015/16

financial year.

throughout the

2015/16 financial

year.

2015/16 financial

year.

well as when

returning them.

Financial

Viability and

Management

Perform

periodic

creditors

ledger

reconciliations

Creditors on the

system

reconciling to

supporting

documentation on

a monthly basis

throughout the

financial year.

Creditors’

Reconciliation

Statements

2014/15

monthly

reconciliations

Reconcile all

creditors on the

system to

supporting

documentation on

a monthly basis

throughout the

financial year.

70% of the

reconciliations are

up to date as at

the time of

reporting.

As a result of

the year-end

system closure,

there is always

a time lag

between year-

end and the

system closure;

however, all

year-end sundry

creditors are

accounted for as

part of the year-

end process.

Increase effort in

purification of

database in order

to clearly identify

prospective

suppliers who

should be

reconciled

monthly.


01 July 2015 to 30 June 2016

106 | P a g e

UNIT: ASSET MANAGEMENT



Key

Performance

Area (KPA)

Strategic

Objective

Key

Performance

Indicator (KPI)

Unit of

Measurement


2015/16

Actual annual

performance

achieved

Reasons for

the Variances

(Over-/under-

achieved)

Corrective

measures taken

to improve

performance

Financial

Viability and

Management

Ensure

efficient Asset

Management &

Control

4 Quarterly

assets

verifications

performed and

asset registers

updated with all

assets

movements, and

report any

damaged/

missing items by

30 June 2016.

Number of

assets

verifications

performed and

asset registers

updated with all

assets

movements,

and report any

damaged/

missing items

by 30 June

2016.

2014/15

Asset

Registers

4 Quarterly assets

verifications

performed and

asset registers

updated with all

assets

movements, and

report any

damaged/ missing

items by 30 June

2016.

The asset register

is fully GRAP

compliant; the

infrastructure

asset register is

maintained on the

GIS database and

is up to date. The

Movable, Fleet,

Land and

Buildings

registers are

currently

maintained in the

AMS 360 system

and are in the

Target

Achieved.

Not Required.


01 July 2015 to 30 June 2016

107 | P a g e




Key

Performance

Area (KPA)

Strategic

Objective

Key

Performance

Indicator (KPI)

Unit of

Measurement


2015/16

Actual annual

performance

achieved

Reasons for

the Variances

(Over-/under-

achieved)

Corrective

measures taken

to improve

performance

process of being

integrated with

the Solar system.

100% of assets

were verified at

year-end. For the

4th quarter, all

additions have

been verified.

Infrastructure

assets are only

recognised as

assets once the

project is

commissioned;

the work in

progress has


01 July 2015 to 30 June 2016

108 | P a g e




Key

Performance

Area (KPA)

Strategic

Objective

Key

Performance

Indicator (KPI)

Unit of

Measurement


2015/16

Actual annual

performance

achieved

Reasons for

the Variances

(Over-/under-

achieved)

Corrective

measures taken

to improve

performance

been recognised

for the 4th

quarter. There

were no disposals

in the 1st quarter;

all assets to be

written off have

been recorded as

such. Asset

compliance

checklist has also

been completed.


01 July 2015 to 30 June 2016

109 | P a g e

UNIT: BUDGET & COMPLIANCE



Key

Performance

Area (KPA)

Strategic

Objective

Key

Performance

Indicator (KPI)

Unit of

Measurement


2015/16

Actual annual

performance

achieved

Reasons for

the Variances

(Over-/under-

achieved)

Corrective

measures taken

to improve

performance

Financial

Viability and

Management

Ensure budget

preparation

and reporting

in compliance

with MFMA

and treasury

regulations

and guidelines.

Prepare 2016/17

annual budget,

2015/16

adjustment

budgets and

submit in-year

financial reports

in relation thereto

in accordance

with sections 87

and 88 of MFMA

by 30 June 2016.

Annual and

Adjustment

budgets that are

compliant with

MFMA sections

87 & 88

requirements

2014/15 In-

year reports

Prepare 2016/17

annual budget,

2015/16

adjustment

budgets and

submit in-year

financial reports in

relation thereto in

accordance with

sections 87 and

88 of MFMA by

30 June 2016.

Three (3) monthly

Section 87

Reports have

been prepared in

accordance with

the legislative

framework and

submitted to the

parent

municipality as

prescribed in the

MFMA.

Target Achieved Not Required.

Financial

Viability and

Management

Review and

update

budget-related

and

Review and

updating 25

budget-related

and accounting

Number of

budget-related

and accounting

policies

2014/15

Reviewed

budget-

related and

Review and

updating 25

budget-related

and accounting

Twenty (20)

Budget-related

polices were

submitted for

The five (5)

remaining

policies are

AFS-related

The AFS-related

policies are

currently under

review.


01 July 2015 to 30 June 2016

110 | P a g e




Key

Performance

Area (KPA)

Strategic

Objective

Key

Performance

Indicator (KPI)

Unit of

Measurement


2015/16

Actual annual

performance

achieved

Reasons for

the Variances

(Over-/under-

achieved)

Corrective

measures taken

to improve

performance

accounting

policies

policies by 30

June 2016.

reviewed and

updated by 30

June 2016.

accounting

policies.

policies by 30

June 2016.

approval by

council on 09

June 2016.

policies that are

under review

with AFS

process

Financial

Viability and

Management

Ensure

adequacy of

financial

reporting-

related internal

controls.

4 quarterly

reviews and

updating of

financial

reporting-related

internal controls

based on the

Internal Audit

reports to enable

preparation of

Annual Financial

Statements that

are free from

Number of

quarterly

reviews and

updating of

financial

reporting-related

internal controls

based on

Internal Audit

Reports.

2015/16

Internal Audit

Reports

4 quarterly

reviews and

updating of

financial

reporting-related

internal controls

based on the

Internal Audit

reports to enable

preparation of

Annual Financial

Statements that

are free from

Monthly controls

such as

reconciliations

and allocation/

classifications are

performed.

Internal audit

reports issued are

responded to and

corrective actions

are in place.



01 July 2015 to 30 June 2016

111 | P a g e




Key

Performance

Area (KPA)

Strategic

Objective

Key

Performance

Indicator (KPI)

Unit of

Measurement


2015/16

Actual annual

performance

achieved

Reasons for

the Variances

(Over-/under-

achieved)

Corrective

measures taken

to improve

performance

material

misstatements or

errors by 30 June

2016.

material

misstatements or

errors by 30 June

2016.

Financial

Viability and

Management

Monitor

financial

reporting-

related internal

controls

Implement

approved

financial

reporting-related

internal controls

100% and ensure

monthly

monitoring so as

to ensure that

they give effect to

adequate and

timely financial

reporting

% of Approved

financial

reporting-related

controls

implemented

and frequency

of monitoring

thereof

throughout

2015/16

N/A Implement

approved financial

reporting-related

internal controls

100% and ensure

monthly

monitoring so as

to ensure that

they give effect to

adequate and

timely financial

reporting

The quarterly

Dashboards were

prepared and

submitted to

EXCO for review

and approval and

submitted to

AGSA on a

quarterly basis.



01 July 2015 to 30 June 2016

112 | P a g e




Key

Performance

Area (KPA)

Strategic

Objective

Key

Performance

Indicator (KPI)

Unit of

Measurement


2015/16

Actual annual

performance

achieved

Reasons for

the Variances

(Over-/under-

achieved)

Corrective

measures taken

to improve

performance

throughout

2015/16

throughout

2015/16

Financial

Viability and

Management

Ensure

preparation of

compliant

Audit File.

Prepare Audit

File for 2014/15

financial year that

is compliant with

Annexure A of

MFMA Circular

50 by 31 August

2015.

MFMA Circular

50

2014/15

Audit File

Prepare Audit File

for 2014/15

financial year that

is compliant with

Annexure A of

MFMA Circular 50

by 30 June 2016.

Audit File for

2014/15 financial

year was

prepared in

compliant with

Annexure A of

MFMA Circular 50

by 31 August

2015.


Financial

Viability and

Management

Ensure

compliant

Annual

Financial

Statements

Prepare 2015/16

Annual Financial

Statements in

accordance with

the GRAP and

section 122 of

Auditor-

General’s

Management

Letters (GRAP

Standards,

2014/15

Audited

Annual

Financial

statements.

Prepare 2015/16

Annual Financial

Statements in

accordance with

the South African

Standards of

The preparation

and compilation of

AFS for the

2015/16 financial

year has

commenced and



01 July 2015 to 30 June 2016

113 | P a g e




Key

Performance

Area (KPA)

Strategic

Objective

Key

Performance

Indicator (KPI)

Unit of

Measurement


2015/16

Actual annual

performance

achieved

Reasons for

the Variances

(Over-/under-

achieved)

Corrective

measures taken

to improve

performance

MFMA by 31

August 2016.

Section 122 of

MFMA)

Generally

Recognised

Accounting

Practices (GRAP)

and section 122

of MFMA by 31

August 2016.

the draft will be

submitted to both

the AGSA and

National Treasury

on 31 August

2016.


01 July 2015 to 30 June 2016

114 | P a g e

UNIT: SUPPLY CHAIN MANAGEMENT



Key

Performance

Area (KPA)

Strategic

Objective

Key

Performance

Indicator (KPI)

Unit of

Measurement


2015/16

Actual annual

performance

achieved

Reasons for

the Variances

(Over-/under-

achieved)

Corrective

measures taken

to improve

performance

Good

Governance &

Public

Participation

Ensure

compliant

procurement

processes &

procedures

0% irregular

expenditure

incurred due to

non-compliance

with the

company’s

Supply Chain

Management

Policy, Supply

Chain

Management

Regulations,

2005 and the

MFMA by 30

June 2016

% of irregular

expenditure

incurred due to

non-compliance

with the

company’s Supply

Chain

Management

Policy, Supply

Chain

Management

Regulations, 2005

and the MFMA by

30 June 2016

2014/15

Annual

Financial

Statements

0% irregular

expenditure

incurred due to

non-compliance

with the

company’s Supply

Chain

Management

Policy, Supply

Chain

Management

Regulations, 2005

and the MFMA by

30 June 2016

Irregular expenditure

amounting to

R41, 103.10 was

incurred for the

period under review.

R351, 500.00 is due

regarding previous

incidents that the

Auditor-General

recommended to be

reported as irregular

expenditure.

SCM

processes

were not

followed.

New service

provider will be

appointed

following the

correct SCM

processes.


01 July 2015 to 30 June 2016

115 | P a g e

UNIT: SUPPLY CHAIN MANAGEMENT



Key

Performance

Area (KPA)

Strategic

Objective

Key

Performance

Indicator (KPI)

Unit of

Measurement


2015/16

Actual annual

performance

achieved

Reasons for

the Variances

(Over-/under-

achieved)

Corrective

measures taken

to improve

performance

Good

Governance &

Public

Participation

Monitor

Suppliers/

Service

Providers

performance

Ensure that the

suppliers/

services

providers are

monitored

100% in line

with contracts

entered into and

submit monthly

reports

throughout

2015/16.

Frequency of

reports submitted

by suppliers

throughout

2015/16

2014/15

Suppliers’

monitoring

reports

Ensure that the

suppliers/

services providers

are monitored

100% in line with

contracts entered

into and submit

monthly reports

throughout

2015/16.

All monthly and

quarterly reports

submitted by all

service providers

were reviewed by the

finance office.

Target

Achieved

Not Required.


01 July 2015 to 30 June 2016

116 | P a g e

3.2.6. Department of Engineering - Wires

Engineering Wires is a sub-directorate of Centlec that comprises the asset creation, operations and maintenance of the electricity distribution

systems. The Engineering Wires Department carries this mandate through four division, namely Planning, Network Operations and

Maintenance, System Utilization and Process Engineering, and Southern Free State (Kopanong, Mohokare) and Mantsopa municipalities,

Thaba Nchu and Botshabelo.

The Planning Division ensures at all times that other important municipal planning outcomes (e.g. Spatial Development Framework, Sector

Plans, Integrated Development Plans, etc.) and national planning (Integrated Resource Plans, National Development Plans, etc.) are part of

the Electrical Master Plans (EMPs) for each town under review.

The Network Operation and Maintenance, Southern Free State and other municipalities as well as Thaba Nchu and Botshabelo Divisions

deliver an economic and efficient maintenance service to provide the best possible quality of supply to Centlec customers and to complete all

construction projects.

The System Utilization and Process Engineering is concerned with the control and energy management in order to maximize the served

energy and minimize the down time, planning and coordinating the distribution of electricity to meet the energy demand and render a 24-hour

service for customer complaints as well as the restoration of all power failures. It is also to ensure that the power system performance is

assessed regularly and analysed to maximize reliability and availability as well as to design and upgrade all protective and telemetry systems.

It is further concerned with the maintenance of all substations and the associated equipment such as Power Transformers, Circuit Breakers,

and Busbars, Substation buildings, Miniature substation housings and Yards.


01 July 2015 to 30 June 2016

117 | P a g e

VOTE: ENGINEERING – WIRES

UNIT: SYSTEMS UTILISATION AND PROCESS ENGINEERING



Key

Performance

Area (KPA)

Strategic

Objective

Key Performance

Indicator (KPI)

Unit of

Measurement


2015/16

Actual annual

performance

achieved

Reasons for

the Variances

(Over-/under-

achieved)

Corrective

measures taken

to improve

performance

Infrastructure

Development &

Service

Delivery

Provide 100%

access to

electricity

Install and complete

the number of public

connection

applications

received, paid for this

financial year by 30

June 2016.

The number of

public

connection

applications

received, paid

for vs. the

number of

public

connections

installed from 1

July 2015 to 30

June 2016.

New and

upgrade

connections

in 2014/15

financial

years.

To install public

connections for all

public connection

applications

received, paid for

between 1 July

2015 to 30 May

2016 by 30 June

2016.

Five hundred and

thirty-seven (537)

connections that

have been paid

for are completed.

Target

Achieved.

Not Required.

Infrastructure

Development &

Provide 100%

access to

electricity

Investigate

servitudes and land

earmarked for

Servitudes

Investigation

Report

N/A Investigate

servitudes and

land earmarked

In quarter one (1):

Two (2)

applications were

Target

Achieved.

Not Required.


01 July 2015 to 30 June 2016

118 | P a g e




Key

Performance

Area (KPA)

Strategic

Objective

Key Performance

Indicator (KPI)

Unit of

Measurement


2015/16

Actual annual

performance

achieved

Reasons for

the Variances

(Over-/under-

achieved)

Corrective

measures taken

to improve

performance

Service

Delivery

electricity

infrastructure

expansion in the

area of the entity’s

supply so as to

broaden access to

electricity capacity by

30 June 2016

for electricity

infrastructure

expansion in the

area of the

entity’s supply so

as to broaden

access to

electricity capacity

by 30 June 2016

sent to the DEA

(Elite DC and

Maphikela DC)

and only one

response was

received for

Maphikela DC.

In quarter two (2):

Two (2)

applications were

sent to the DEA

(Elite DC and

Northern Line). A

response for Elite

DC was received.

In Quarter three

(3): One (1)


01 July 2015 to 30 June 2016

119 | P a g e




Key

Performance

Area (KPA)

Strategic

Objective

Key Performance

Indicator (KPI)

Unit of

Measurement


2015/16

Actual annual

performance

achieved

Reasons for

the Variances

(Over-/under-

achieved)

Corrective

measures taken

to improve

performance

application was

sent to DEA for

the Northern Line.

In Quarter four

(4): One (1)

applications was

sent to the DEA

(Northern Line)

and a Record of

decision has been

received. All

Records of

decisions have

been received for

all applications

that have been

sent to the DEA.


01 July 2015 to 30 June 2016

120 | P a g e




Key

Performance

Area (KPA)

Strategic

Objective

Key Performance

Indicator (KPI)

Unit of

Measurement


2015/16

Actual annual

performance

achieved

Reasons for

the Variances

(Over-/under-

achieved)

Corrective

measures taken

to improve

performance

Infrastructure

Development &

Service

Delivery

Provide 100%

access to

electricity

Convert and/or

replace 5 000

electricity meters in

Botshabelo by June

2016.

Number of

conversions

and/or

replacement

electricity

meters made in

Botshabelo by

30 June 2016

500 meters

converted

and/or

replaced by

2014/15

financial

year.

Convert and/or

replace 5 000

electricity meters

in Botshabelo by

June 2016.

One hundred and

ninety-eight (198)

new connections

and one thousand

six hundred and

twenty (1 620)

conversions

(shiftings) were

conducted.

The annual

target could

not be reached

due to

depletion of

the vote funds.

Management will

ensure that job

cards will be

created to ring-

fence the

Botshabelo and

Bloemfontein

expenditure.

Infrastructure

Development &

Service

Delivery

Provide

reliable public

lighting in

areas as

required by

MMM

Installation of 300

smart street lights in

the area of MMM by

30 June 2016.

Certificates of

completion

Number of

public

lighting

(high mast

lights)

installed in

2014/15

Installation of 300

smart street lights

in the area of

MMM by 30 June

2016.

Two thousand

and fifty-four

(2 054) smart

street lights have

been installed in

the MMM area by

30 June 2016.

The

performance

has been over-

achieved due

to the

efficiency and

effectiveness

of the work

Not Required.


01 July 2015 to 30 June 2016

121 | P a g e




Key

Performance

Area (KPA)

Strategic

Objective

Key Performance

Indicator (KPI)

Unit of

Measurement


2015/16

Actual annual

performance

achieved

Reasons for

the Variances

(Over-/under-

achieved)

Corrective

measures taken

to improve

performance

financial

year.

performed by

the service

provider in

order to reach

the target

contained in

the Service

Level

Agreement.


01 July 2015 to 30 June 2016

122 | P a g e

UNIT: PLANNING



Key

Performance

Area (KPA)

Strategic

Objective

Key Performance

Indicator (KPI)

Unit of

Measurement


2015/16

Actual annual

performance

achieved

Reasons for

the Variances

(Over-/under-

achieved)

Corrective

measures taken

to improve

performance

Infrastructure

Development &

Service

Delivery

Provide for

sufficient

electricity

distribution

infrastructure

Establishment of

132/11kV Fichardt

Park Distribution

Centre by 30 June

2016

% of progress

made on the

establishment of

132/11kV

Fichardt Park

Distribution

Centre by 30

June 2016

2014/15

performance

100% progress on

the establishment

of 132/11kV

Fichardt Park

Distribution

Centre by 30

June 2016

A tender has

been advertised

and has served in

the evaluation

committee.

There is a

delay in the

appointment of

a consultant.

SCM must speed

up the internal

processes such

that the

consultant can be

appointed.

Infrastructure

Development &

Service

Delivery

Provide for

sufficient

electricity

distribution

infrastructure

Establishment of

132/11kV Cecilia

Distribution Centre

by 30 June 2016.

% of progress

made on the

establishment of

132/11kV

Cecilia

Distribution

Centre by 30

June 2016

2014/15

performance

50% progress on

the establishment

of 132/11kV

Cecilia

Distribution

Centre by 30

June 2016

Boundary wall

100%, Earth mat

100%, Fire wall

100%, Control

Building 90%,

Internal Pave

100%, Steel gate

90%, HV &

Gantry

Target

Achieved.

Not Required.


01 July 2015 to 30 June 2016

123 | P a g e

UNIT: PLANNING



Key

Performance

Area (KPA)

Strategic

Objective

Key Performance

Indicator (KPI)

Unit of

Measurement


2015/16

Actual annual

performance

achieved

Reasons for

the Variances

(Over-/under-

achieved)

Corrective

measures taken

to improve

performance

foundations

100%, HV VT's

are 80% installed.

2x132/11kV

transformers have

been delivered on

site and

contractor is busy

assembling

transformers,

cable trench is

0% complete.

Infrastructure

Development &

Service

Delivery

Provide for

sufficient

electricity

distribution

infrastructure

Establishment of

132/11kV 20MVA

Groenvlei

Distribution Centre

by 30 June 2016

% of progress

made on

establishment of

132/11kV

20MVA

2014/15

performance

100% progress on

establishment of

132/11kV 20MVA

Groenvlei

Distribution

There is 100%

progress on

establishment of

132/11kV 20MVA

Groenvlei

Target

Achieved.

Not Required.


01 July 2015 to 30 June 2016

124 | P a g e

UNIT: PLANNING



Key

Performance

Area (KPA)

Strategic

Objective

Key Performance

Indicator (KPI)

Unit of

Measurement


2015/16

Actual annual

performance

achieved

Reasons for

the Variances

(Over-/under-

achieved)

Corrective

measures taken

to improve

performance

Groenvlei

Distribution

Centre by 30

June 2016

Centre by 30

June 2016

Distribution

Centre and the

substation was

energized by 30

June 2016.

Infrastructure

Development &

Service

Delivery

Provide for

sufficient

electricity

distribution

infrastructure

Establishment of

132kV Northern

Ring from

Noordstad to

Harvard DC (ward

44 and 48) by 30

June 2016

Milestone

progress as

indicated on

quarterly targets

on multi-phased

project 132kV

Northern Ring

from Noordstad

to Harvard DC

(ward 44) by 30

June 2016

2014/15

performance

Complete Phase

1 (Line from

Harvard DC to

Cecelia DC) of

the project and

obtain a ROD

from the DEA by

30 June 2016

Phase 1

Stringing of

overhead

conductor to

Cecilia is

completed

Phase 2

Designs have

been approved,

the contractor has

started with

relocation of a

Target

Achieved.

Not Required.


01 July 2015 to 30 June 2016

125 | P a g e

UNIT: PLANNING



Key

Performance

Area (KPA)

Strategic

Objective

Key Performance

Indicator (KPI)

Unit of

Measurement


2015/16

Actual annual

performance

achieved

Reasons for

the Variances

(Over-/under-

achieved)

Corrective

measures taken

to improve

performance

coupler and

incorporation of

two feeder bays

at Harvard.

Infrastructure

Development &

Service

Delivery

Provide for

sufficient

electricity

distribution

infrastructure

Establishment of

132/11kV Elite Sub-

station (Airport

Node) by 30 June

2016

% of progress

on the

establishment of

132/11kV Elite

Sub-station

(Airport Node)

30 June 2016

2014/15

performance

(10%)

Approved Elite

Sub-station

Design, signed

agreement

between Centlec

and land owner

completed and

approval from the

EIA for

establishment of

132/11kV Elite

Sub-station

(Airport Node)

Design drawings

have been

approved by the

engineering

department and

have proposed a

new position for a

sub-station from

the council and

the department is

currently waiting

for an approval.

We are

awaiting land

acquisition.

This is a multi-

year project and

we could not

acquire land.

Centlec opted for

a new position

which is owned by

MMM and a

request has been

sent to MMM, for

which we await a

response from the

council.


01 July 2015 to 30 June 2016

126 | P a g e

UNIT: PLANNING



Key

Performance

Area (KPA)

Strategic

Objective

Key Performance

Indicator (KPI)

Unit of

Measurement


2015/16

Actual annual

performance

achieved

Reasons for

the Variances

(Over-/under-

achieved)

Corrective

measures taken

to improve

performance

obtained by 30

June 2016

Infrastructure

Development &

Service

Delivery

Provide for

sufficient

electricity

distribution

infrastructure

Establishment of

Botshabelo:

132kV11kV

Distribution Centre

Sub-station in ward

27 by 30 June 2016

% of progress

on the

establishment of

Botshabelo:

132kV/11kV

Distribution

Centre Sub-

station in ward

27 by 30 June

2016

2014/15

performance

(30%)

100% progress on

the establishment

of Botshabelo:

132kV/11kV

Distribution

Centre Sub-

station in ward 27

by 30 June 2016

A tender has

been advertised

and has served in

the evaluation

committee.

There is a

delay in the

appointment of

a consultant.

SCM must speed

up the SCM

processes.

Infrastructure

Development &

Service

Delivery

Provide for

sufficient

electricity

distribution

infrastructure

Establishment of

Botshabelo: 132kV

connection point at

Vaalkraal DC by 30

June 2016

% of progress

on the

establishment of

Botshabelo:

132kV

2014/15

performance

(30%)

100% progress on

the establishment

of Botshabelo:

132kV connection

point at Vaalkraal

A tender has

been advertised

and has served in

the evaluation

committee.

There is a

delay in the

appointment of

a consultant.

SCM must speed

up the SCM

processes.


01 July 2015 to 30 June 2016

127 | P a g e

UNIT: PLANNING



Key

Performance

Area (KPA)

Strategic

Objective

Key Performance

Indicator (KPI)

Unit of

Measurement


2015/16

Actual annual

performance

achieved

Reasons for

the Variances

(Over-/under-

achieved)

Corrective

measures taken

to improve

performance

connection point

at Vaalkraal DC

in ward 30 by 30

June 2016

DC in ward 30 by

30 June 2016

Infrastructure

Development &

Service

Delivery

Provision for

adequate

lighting within

the residential

areas of

Mangaung

Erection of 28 high

mast lights within

Mangaung by 30

June 2016

Completed high

mast light by 30

June 2016

2014/15

performance

28 erected and

commissioned

high mast lights

within Mangaung

by 30 June 2016

Thirty-four (34)

high masts have

been erected and

twenty-six (26)

have been

commissioned.

There is a

delay of the

electricity

connection

from Eskom.

Follow up with

Eskom on

electricity

connection with

regard to

outstanding high

masts.

Infrastructure

Development &

Service

Delivery

Provide for

sufficient

electricity

distribution

infrastructure

Establishment of

new 132/11kV

Maphikela DC by 30

June 2016

% of progress

on the

establishment of

new 132/11kV

Maphikela DC

N/A 100% progress on

the establishment

of new 132/11kV

Maphikela DC by

30 June 2016

A ROD for the

construction of the

distribution centre

has been received

from the DEA and

a tender has been

There is a

delay in the

appointment of

a consultant.

SCM must speed

up the SCM

processes


01 July 2015 to 30 June 2016

128 | P a g e

UNIT: PLANNING



Key

Performance

Area (KPA)

Strategic

Objective

Key Performance

Indicator (KPI)

Unit of

Measurement


2015/16

Actual annual

performance

achieved

Reasons for

the Variances

(Over-/under-

achieved)

Corrective

measures taken

to improve

performance

by 30 June

2017

advertised and

has served in the

evaluation

committee.

*Note: These indicators from the Engineering Wires Department are also reported by MMM (parent municipality) as agreed upon with the municipal entity based on the business plan and SDBIP submitted.


01 July 2015 to 30 June 2016

129 | P a g e

3.2.7. Department of Engineering- Retail

The Retail component of the municipal entity is divided into two main components, namely Network Utilization and Retail.

The Utilization Department consists of Network Control, Network Optimization, Sales Systems and Power Quality, and Customer Service. This department

is headed by the Executive Manager: Retail. Energy and Network Control is the section where most of the functions in the control room, stand by and Call

Centre are run for 24 hours.

The business unit functions include control and energy management to maximize served energy and minimize down time; plan and coordinate the distribution

of electricity to meet the energy demand; do energy management to meet the demand while minimizing the cost of energy purchased; keep records of all

incidents, power failures and statistics to measure the level of performance; render a 24-hours service for customers complaints as well as the restoration

of all power failures and do construction and maintenance of all supervisory equipment on the network.


01 July 2015 to 30 June 2016

130 | P a g e

VOTE: ENGINEERING – RETAIL

UNIT: REVENUE & CUSTOMER MANAGEMENT



Key

Performance

Area (KPA)

Strategic

Objective

Key Performance

Indicator (KPI)

Unit of

Measurement


2015/16

Actual annual

performance

achieved

Reasons for

the Variances

(Over-/under-

achieved)

Corrective

measures

taken to

improve

performance

Infrastructure

Development &

Service

Delivery

Ensure optimal

accuracy and

performance of

all installed

meters

Conduct 12

monthly meter

audits to minimize

losses through

tampering and

illegal connections

by 30 June 2016

Number of

monthly meter

audits

conducted to

minimize losses

through

tampering and

illegal

connections by

30 June 2016

2014/15

performance

Conduct 12

monthly meter

audits to minimize

losses through

tampering and

illegal

connections by 30

June 2016

One thousand two

hundred and

seventy eight

meters (1 278)

were inspected

throughout the

twelve-month

period to minimize

losses through

tampering and

illegal

connections.

Target

Achieved.

Not Required.


01 July 2015 to 30 June 2016

131 | P a g e

UNIT: REVENUE & CUSTOMER MANAGEMENT



Key

Performance

Area (KPA)

Strategic

Objective

Key Performance

Indicator (KPI)

Unit of

Measurement


2015/16

Actual annual

performance

achieved

Reasons for

the Variances

(Over-/under-

achieved)

Corrective

measures

taken to

improve

performance

Infrastructure

Development &

Service

Delivery

Improve

customer care

management

Procure and

implement

integrated customer

queries

management

system by 30 June

2016.

Progress

Reports

N/A Procure and

implement

integrated

customer queries

management

system by 30

June 2016.

90 %

Implemented.

New Customer

Centre numbers

were tested

through Vodacom

and Telkom for

inbound

System

Implementation.

There were

delays on the

project

implementation.

The project is

ongoing and will

be finalised in

Q1 of the

2016/2017

financial year.


01 July 2015 to 30 June 2016

132 | P a g e

UNIT: TRADING SERVICES



Key

Performance

Area (KPA)

Strategic

Objective

Key Performance

Indicator (KPI)

Unit of

Measurement


2015/16

Actual annual

performance

achieved

Reasons for

the Variances

(Over-/under-

achieved)

Corrective

measures

taken to

improve

performance

Infrastructure

Development &

Service

Delivery

Ensure 100%

access to

electricity to by

all.

Ensure that 100%

of registered

indigents receive

Free Basic

Electricity (FBE) on

a monthly basis

throughout

2015/16.

% of registered

indigents who

receive FBE on a

monthly basis

throughout

2015/16.

2014/15

reports

Ensure that 100%

of registered

indigents receive

FBE on a monthly

basis throughout

2015/16.

84% of registered

indigents

collected (FBE)

for the year under

review.

16% of the

registered

indigents did not

collect FBE.

One of the

reasons for non-

collection of

FBE by

indigents might

be that they

have tampered

with the prepaid

meter box.

Prepaid Meter

Field Audit

underway for

customer

information

verification and

identification of

tampered

meters.


01 July 2015 to 30 June 2016

133 | P a g e




Key

Performance

Area (KPA)

Strategic

Objective

Key Performance

Indicator (KPI)

Unit of

Measurement


2015/16

Actual annual

performance

achieved

Reasons for

the Variances

(Over-/under-

achieved)

Corrective

measures

taken to

improve

performance

Infrastructure

Development &

Service

Delivery

Ensure

effective

vending points/

stations.

Ensure that 80% of

vending stations

are accessible at

least between

08h00-17h00

during normal

working days and

08h00-12h00

during weekends

and holidays

throughout

2015/16.

% of vending

stations that are

accessible at

least between

08h00-17h00

during normal

working days and

08h00-12h00

during weekends

and holidays

throughout

2015/16.

50% of

Vending

stations

Ensure that 80%

of vending

stations are

accessible at

least between

08h00-17h00

during normal

working days and

08h00-12h00

during weekends

and holidays

throughout

2015/16.

Ensured that at

least 80% of

vending stations

are accessible

between 08h00-

17h00 during

normal working

days and 08h00-

12h00 during

weekends and

holidays

Target

achieved.

Not required.

Infrastructure

Development &

Ensure

reliability of

Ensure 100%

management of

customers’

% of customers’

essential loads

managed on a

2014/15

reports

Ensure 100%

management of

customers’

Ensured 100%

management of

customers’

Target

Achieved.

Not Required.


01 July 2015 to 30 June 2016

134 | P a g e




Key

Performance

Area (KPA)

Strategic

Objective

Key Performance

Indicator (KPI)

Unit of

Measurement


2015/16

Actual annual

performance

achieved

Reasons for

the Variances

(Over-/under-

achieved)

Corrective

measures

taken to

improve

performance

Service

Delivery

electricity

supply

essential loads on a

continuous basis

throughout 2015/16

continuous basis

throughout

2015/16

essential loads on

a continuous

basis throughout

2015/16

essential loads on

a continuous

basis throughout

2015/16.


01 July 2015 to 30 June 2016

135 | P a g e

UNIT: SYSTEMS ENGINEERING



Key

Performance

Area (KPA)

Strategic

Objective

Key Performance

Indicator (KPI)

Unit of

Measurement


2015/16

Actual annual

performance

achieved

Reasons for

the Variances

(Over/under

achieved)

Corrective

measures

taken to

improve

performance

Infrastructure

Development &

Service

Delivery

Improve sales

and

communicatio

n infrastructure

30% upgrade of the

current PABX to

VOIP

telecommunication

infrastructure by 30

June 2016.

% of progress in

upgrading of the

current PABX to

VOIP

telecommunicatio

n infrastructure by

30 June 2016.

N/A 30% upgrade of

the current PABX

to VOIP

telecommunicatio

n infrastructure by

30 June 2016.

Target is 25%

achieved.

Voice PBX

Testing - Testing

of Calls Dials.

New VoIP

Systems

Implementation -

New Voice

Systems were

implemented and

users can receive

and make

outgoing calls.

Service provider

is still going to

finalise the

telephone

applications.

The project is

ongoing and will

be finalised in

Q1 of the

2016/2017

financial year.


01 July 2015 to 30 June 2016

136 | P a g e




Key

Performance

Area (KPA)

Strategic

Objective

Key Performance

Indicator (KPI)

Unit of

Measurement


2015/16

Actual annual

performance

achieved

Reasons for

the Variances

(Over/under

achieved)

Corrective

measures

taken to

improve

performance

Infrastructure

Development &

Service

Delivery

Improve sales

and

communicatio

n infrastructure

50% progress in

upgrade of vending

back office by 30

June 2016.

% of progress in

upgrading of

vending back

office by 30 June

2016.

N/A 50% progress in

upgrade of

vending back

office by 30 June

2016.

Target is 48%

achieved.

2%

Finalisation of

the existing

contract was

delayed by the

extension of

project scope.

The project is

ongoing and will

be finalised in

Q1 of the

2016/2017

financial year.

Infrastructure

Development &

Service

Delivery

Ensure

strategic risk

management

with regard to

systems

Implement 30% of

business continuity

and disaster

recovery

infrastructure by 30

June 2016.

% of business

continuity and

disaster recovery

infrastructure

implemented by

30 June 2016.

N/A Implement 30% of

business

continuity and

disaster recovery

infrastructure by

30 June 2016.

20% of business

continuity and

disaster recovery

infrastructure has

been

implemented.

There were

delays on

project

implementation.

The project is

ongoing and will

be finalised in

Q1 of the

2016/2017

financial year.

Infrastructure

Development &

Upgrading of

IT

infrastructure

100% upgrade of IT

servers and

network

% of IT servers

and network

infrastructure and

N/A 100% upgrade of

IT servers and

network

IT servers,

network

infrastructure and

Target

Achieved.

Not Required.


01 July 2015 to 30 June 2016

137 | P a g e




Key

Performance

Area (KPA)

Strategic

Objective

Key Performance

Indicator (KPI)

Unit of

Measurement


2015/16

Actual annual

performance

achieved

Reasons for

the Variances

(Over/under

achieved)

Corrective

measures

taken to

improve

performance

Service

Delivery

and network in

response to

changing

needs.

infrastructure and

systems to support

SCOA

implementation

project by 30 June

2016.

systems

upgraded to

support SCOA

implementation

project by 30

June 2016.

infrastructure and

systems to

support SCOA

implementation

project by 30

June 2016.

systems to

support SCOA

implementation

project are 100%

upgraded.

Infrastructure

Development &

Service

Delivery

Upgrading of

IT

infrastructure

and network in

response to

changing

needs.

100% upgrade and

refurbishment of

the existing

computer networks

by 30 June 2016.

% of upgrade and

refurbishment of

the existing

computer

networks by 30

June 2016.

N/A 100% upgrade

and refurbishment

of the existing

computer

networks by 30

June 2016.

The existing

computer

networks are

100% upgraded

and refurbished.

Target

Achieved.

Not Required.

*Note: These indicators from the Engineering Retail Department are also reported by MMM as agreed upon with the municipal entity based on the business plan and SDBIP submitted to the parent municipality.


01 July 2015 to 30 June 2016

138 | P a g e

3.2.8. Department of Performance & Compliance

UNIT: COMPLIANCE & PERFORMANCE MANAGEMENT



Key

Performance

Area (KPA)

Strategic

Objective

Key Performance

Indicator (KPI)

Unit of

Measurement


2015/16

Actual annual

performance

achieved

Reasons for

the Variances

(Over-/under-

achieved)

Corrective

measures taken

to improve

performance

Transformation

and

Organisational

Development.

Ensure

compliance

with prescribed

annual

planning

processes of

the entity

Review Multi-Year

Business Plan for

2016/17, ensure

that the related

Budget, SDBIP

Performance Plans

and Agreements of

the Executives are

compiled and

submitted for

approval by 31

March 2016.

Proof of

submission of

reviewed Multi-

Year Business

Plan, Budget,

SDBIPs,

Performance

Plans and

Agreements of

the Executives

are compiled

and submitted

for approval by

31 March 2016.

N/A Review Multi-Year

Business Plan for

2016/17, ensure

that the related

Budget, SDBIP

Performance

Plans and

Agreements of

the Executives

are compiled and

submitted for

approval by 31

March 2016.

1. Multi-Year

Business Plan

for 2016/17 and

SDBIP were

compiled and

submitted to

Mangaung

Metropolitan

Municipality on

18 March 2016

and

subsequently

approved by the

Council on 09

June 2016.



01 July 2015 to 30 June 2016

139 | P a g e




Key

Performance

Area (KPA)

Strategic

Objective

Key Performance

Indicator (KPI)

Unit of

Measurement


2015/16

Actual annual

performance

achieved

Reasons for

the Variances

(Over-/under-

achieved)

Corrective

measures taken

to improve

performance

2. Performance

Agreements

have all been

signed for the

2016/17 financial

year.

Transformation

and

Organisational

Development.

Ensure

monitoring and

evaluation of

organisational

performance

Ensure that the

performance of

Executives is

assessed quarterly

as prescribed in

their respective

Performance

Agreements and

that it is internally

audited and reports

are submitted to the

Quarterly

Performance

Assessment

reports of the

performance of

Executives

N/A Ensure that the

performance of

Executives is

assessed

quarterly as

prescribed in their

respective

Performance

Agreements and

that it is internally

audited and

Target not

achieved.

Performance of

the Executives

was not

assessed bi-

annually.

Performance

assessment of

Executives for Q1

- Q2 and Q3 – Q4

will be concluded

in quarter 1 of the

2016/17 financial

year.


01 July 2015 to 30 June 2016

140 | P a g e




Key

Performance

Area (KPA)

Strategic

Objective

Key Performance

Indicator (KPI)

Unit of

Measurement


2015/16

Actual annual

performance

achieved

Reasons for

the Variances

(Over-/under-

achieved)

Corrective

measures taken

to improve

performance

Audit Committee

and the Board by 30

June 2016.

reports are

submitted to the

Audit and Risk

Committee and

the Board by 30

June 2016.

Transformation

and

Organisational

Development.

Ensure

monitoring and

evaluation of

organisational

performance

Quarterly Centlec

audit improvement

Dashboard

developed and

submitted to the

AGSA within the

prescribed

timeframes for

2015/16.

Frequency of

Centlec audit

improvement

Dashboard

developed and

submitted to the

AGSA within the

prescribed

timeframes for

2015/16.

N/A Quarterly Centlec

audit

improvement

Dashboard

developed and

submitted to the

AGSA within the

prescribed

timeframes for

2015/16.

Quarterly

Dashboard

reports were

developed and

submitted to the

AGSA within the

prescribed

timeframes.

Target

Achieved.

Not Required.


01 July 2015 to 30 June 2016

141 | P a g e

UNIT: FLEET & SECURITY MANAGEMENT



Key

Performance

Area (KPA)

Strategic

Objective

Key Performance

Indicator (KPI)

Unit of

Measurement


2015/16

Actual annual

performance

achieved

Reasons for

the Variances

(Over-/under-

achieved)

Corrective

measures taken

to improve

performance

Infrastructure

Development &

Service

Delivery

Continuous

coordinated

security

management

and planning.

Four (4) Joint

Planning Committee

(JPC) meetings held

during 2015/16 to

discuss, and plan for

security

arrangements

regarding potential

security threats to

the business of the

entity.

Number of Joint

Planning

Committee

(JPC) meetings

held during

2015/16 to

discuss, and

plan for security

arrangements

regarding

potential

security threats

to the business

of the entity.

N/A Four (4) Joint

Planning

Committee (JPC)

meetings held

during 2015/16 to

discuss, and plan

for security

arrangements

regarding

potential security

threats to the

business of the

entity.

Four (4) Joint

Planning

Committee (JPC)

meetings were

held during

2015/16 to

discuss, and plan

for security

arrangements

regarding

potential security

threats to the

business of the

entity.

Target

Achieved.

Not Required.

Conduct

security threat

assessment

Ensure that security

assessment is

conducted twice (2)

Number of times

security

assessment is

N/A Ensure that

security

assessment is

One (1) security

assessment was

conducted during

State Security

Agency (SSA)

is currently

SSA and SAPS

should fast track


01 July 2015 to 30 June 2016

142 | P a g e




Key

Performance

Area (KPA)

Strategic

Objective

Key Performance

Indicator (KPI)

Unit of

Measurement


2015/16

Actual annual

performance

achieved

Reasons for

the Variances

(Over-/under-

achieved)

Corrective

measures taken

to improve

performance

during 2015/16 so as

to ensure efficient

allocation of

resources to the

most vulnerable

areas.

conducted

during 2015/16

so as to ensure

efficient

allocation of

resources to the

most vulnerable

areas.

conducted twice

(2) during

2015/16 so as to

ensure efficient

allocation of

resources to the

most vulnerable

areas.

2015/16 to ensure

efficient allocation

of resources to

the most

vulnerable areas.

busy with the

second risk

assessment.

This function is

completely

dependent on

SSA

processes and

SAPS.

their internal

processes.

Conduct daily

patrols at

vulnerable

points

Ensure that three (3)

daily patrols are

conducted at

identified vulnerable

points (i.e. power

stations, exposed

power cables,

premises, etc.) so as

Number of daily

patrols

conducted at

identified

vulnerable

points (i.e.

power stations,

exposed power

N/A Ensure that three

(3) daily patrols

are conducted at

identified

vulnerable points

(i.e. power

stations, exposed

power cables,

Three (3) daily

patrols are

conducted at

identified

vulnerable points

(i.e. power

stations, exposed

power cables,

Target

Achieved.

Not Required.


01 July 2015 to 30 June 2016

143 | P a g e




Key

Performance

Area (KPA)

Strategic

Objective

Key Performance

Indicator (KPI)

Unit of

Measurement


2015/16

Actual annual

performance

achieved

Reasons for

the Variances

(Over-/under-

achieved)

Corrective

measures taken

to improve

performance

to minimize the effect

of potential losses

throughout 2015/16.

cables,

premises, etc.)

so as to

minimize the

effect of

potential losses

throughout

2015/16.

premises, etc.) so

as to minimize the

effect of potential

losses throughout

2015/16.

premises, etc.) so

as to minimize the

effect of potential

losses.

Ensure optimal

service

delivery by

procuring

requisite fleet

Procure new fleet

within two (2) months

as per requests from

the various user

departments during

2015/16.

The period it

takes to procure

new fleet as per

requests from

the various user

departments

during 2015/16.

N/A Procure new fleet

within two (2)

months as per

requests from the

various user

departments

during 2015/16.

Two (2) UD60s

vehicles were

bought during the

2015/16 financial

year.

Target

Achieved.

Not required as

requests are

dependent on

user departments.

Ensure regular

and timely

Fleet booked in for

repairs or

Number of

hours it takes

N/A Fleet booked in

for repairs or

Fleet is booked in

for repairs or

Target

Achieved.

Not Required.


01 July 2015 to 30 June 2016

144 | P a g e




Key

Performance

Area (KPA)

Strategic

Objective

Key Performance

Indicator (KPI)

Unit of

Measurement


2015/16

Actual annual

performance

achieved

Reasons for

the Variances

(Over-/under-

achieved)

Corrective

measures taken

to improve

performance

maintenance

of fleet

maintenance within

48 hour of receiving

requisitions from

user departments

throughout 2015/16

for fleet to be

booked in for

repairs or

maintenance

from receiving

requisitions from

user

departments

maintenance

within 48 hour of

receiving

requisitions from

user departments

throughout

2015/16

maintenance

within forty eight

(48) hour of

receiving

requisitions from

user departments

throughout the

four quarters.


01 July 2015 to 30 June 2016

145 | P a g e

UNIT: BUSINESS DEVELOPMENT



Key

Performance

Area (KPA)

Strategic

Objective

Key Performance

Indicator (KPI)

Unit of

Measurement


2015/16

Actual annual

performance

achieved

Reasons for

the Variances

(Over-/under-

achieved)

Corrective

measures taken

to improve

performance

Infrastructure

Development &

Service

Delivery

Explore and

develop

alternative

revenue

streams for the

entity

Conduct focused

research into

alternative revenue

streams for the entity

by 30 June 2016.

Research report N/A Conduct focused

research into

alternative

revenue streams

for the entity by

30 June 2016.

Target not

achieved.

The CEO has

changed the

strategic

direction on

revenue

enhancement,

therefore the

old power

station will not

be re-

energised and

as a result the

research will

not be

necessary.

New strategic

vision on revenue

enhancement will

be implemented

in the 2016/17

financial year.


01 July 2015 to 30 June 2016

146 | P a g e

UNIT: POWER GENERATIONS



Key

Performance

Area (KPA)

Strategic

Objective

Key Performance

Indicator (KPI)

Unit of

Measurement


2015/16

Actual annual

performance

achieved

Reasons for

the Variances

(Over-/under-

achieved)

Corrective

measures taken

to improve

performance

Infrastructure

Development &

Service

Delivery

Re-

engineering of

old power

stations

Generate 30 MW

by 30 June 2016.

Number of

Megawatts

generated by 30

June 2016.

N/A Generate 30 MW

by 30 June 2016.

Target not

achieved.

The bidders

did not meet

the minimum

requirement

set in the bid

document and

as a result the

tender process

could not

escalate to the

next phase.

The tender will be

re-advertised in Q1

of the 2016/17

financial year.

Revitalisation

of old power

stations (Fort

Street) –

(Incorporation

into the

Develop and

include Phase 1 of

power station

project into the

Waaihoek precinct

Number of Project

Phases

completed by 30

June 2016.

N/A Develop and

include Phase 1

of power station

project into the

Waaihoek

Target not

achieved.

There are

ongoing

discussions

with MMM and

Centlec

Both parties

should expedite

the decision

process regarding

this matter in

order for the


01 July 2015 to 30 June 2016

147 | P a g e

UNIT: POWER GENERATIONS



Key

Performance

Area (KPA)

Strategic

Objective

Key Performance

Indicator (KPI)

Unit of

Measurement


2015/16

Actual annual

performance

achieved

Reasons for

the Variances

(Over-/under-

achieved)

Corrective

measures taken

to improve

performance

Waaihoek

Precinct).

project by 30 June

2016.

precinct project

30 June 2016.

regarding this

matter.

project to

commence in the

next financial

year.


01 July 2015 to 30 June 2016

148 | P a g e

UNIT: FACILITIES MANAGEMENT



Key

Performance

Area (KPA)

Strategic

Objective

Key Performance

Indicator (KPI)

Unit of

Measurement


2015/16

Actual annual

performance

achieved

Reasons for

the Variances

(Over-/under-

achieved)

Corrective

measures

taken to

improve

performance

Infrastructure

Development &

Service

Delivery

Ensure upkeep

of existing

facilities,

offices and

infrastructure

30% progress in

the project of

incorporation of old

power station at

Fort Street (non-

technical work) with

the Waaihoek

precinct by 30 June

2016

% of progress

made in the

project of

incorporation of

old power station

at Fort Street

(non-technical

work) with the

Waaihoek

precinct by 30

June 2016

N/A 30% progress in

the project of

incorporation of

old power station

at Fort Street

(non-technical

work) with the

Waaihoek

precinct by 30

June 2016

This is a MMM

project and scope

and

commencement

of the project will

be upon go-ahead

received from

MMM.

This is a MMM

project and

scope and

commencement

of the project

will be upon go-

ahead received

from MMM.

Commencement

of the project

will be upon go-

ahead received

from MMM.

Infrastructure

Development &

Service

Delivery

Ensure upkeep

of existing

facilities,

offices and

infrastructure

100% upgrade the

existing office

buildings by 30

June 2016

according to the

% of progress

made on the

upgrade of the

existing office

buildings by 30

N/A 100% upgrade

the existing office

buildings by 30

June 2016

according to the

There was a

100% upgrade of

the existing

facilities by 30

June 2016

Target

Achieved.

Not Required.


01 July 2015 to 30 June 2016

149 | P a g e

UNIT: FACILITIES MANAGEMENT



Key

Performance

Area (KPA)

Strategic

Objective

Key Performance

Indicator (KPI)

Unit of

Measurement


2015/16

Actual annual

performance

achieved

Reasons for

the Variances

(Over-/under-

achieved)

Corrective

measures

taken to

improve

performance

assessed needs to

ensure conducive

working

environment for

employees

June 2016

according to the

assessed needs

to ensure

conducive

working

environment for

employees

assessed needs

to ensure

conducive

working

environment for

employees.

according to the

assessed needs

to ensure a

conducive

working

environment for

employees,

visitors and

customers.


01 July 2015 to 30 June 2016

150 | P a g e

A detailed three year capital works plan is required to ensure sufficient detail is available to measure and monitor delivery of

planned infrastructure projects.

Project Name

MTREF ESTIMATES

War

d N

o

Project Description / Type

of Structure Outputs

Project Duration

2015/2016

R’000

2016/2017

R’000

2017/2018

R’000

Start Date Completion

Date

PROGRAMME 6: ENGINEERING RETAIL

UPGRADE OF CURRENT PABX TO VOIP TELCOMMS INFRASTRUCTURE 6 048 2 627 8 688 N/A Telecommunication Systems Telecommunication Systems 1 April 2015 30 June 2016

IMPLEMENTATION OF BUSINESS CONTINUITY AND DISASTER RECOVERY

INFRASTRUCTURE 1 491 3 825 12 651 N/A

Disaster Recovery

Infrastructure

Disaster Recovery

Infrastructure 1 April 2015 30 June 2017

WEBSITE 97 285 439 N/A Website Website 1 March 2015 30 June 2015

VENDING BACK OFFICE 4 842 9 486 4 702 All Infrastructure Infrastructure 1 April 2014 30 June 2017

UPGRADE AND REFURBISHMENT OF CENTLEC COMPUTER NETWORK 2 024 1 313 4 344 N/A Telecommunication Telecommunication 1 July 2015 30 June 2016

SCOA IMPLEMENTATION PROJECT 1 248 11 858 6 270 N/A Systems Systems 1 January 2015 30 June 2017

PROGRAMME 5: ENGINEERING WIRES

NETWORK SERIVES

PARK WEST, 132/33 T2B 45MVA 5 429 5 690 6 003 18 Electricity Infrastructure Electricity Infrastructure 01 July 2015 30 June 2019

REPLACEMENT OF OIL PLANT 0 822 867 All Electricity Infrastructure Electricity Infrastructure

REPLACEMENT OF DECREPIT HAMILTON SUBSTATION 1 730 2 529 2 668 18 Electricity Infrastructure Electricity Infrastructure 01 July 2015 30 June 2019

TIBBIE VISSER RIPPLE CONTROL 0 443 467 1 - 45 Electricity Infrastructure Electricity Infrastructure 01 July 2015 30 June 2019


01 July 2015 to 30 June 2016

151 | P a g e

Project Name

MTREF ESTIMATES

War

d N

o



Project Duration

2015/2016

R’000

2016/2017

R’000

2017/2018

R’000


Date

CLOVER & VISTA DC’s PARK ACCESS CONTROL (CCTV) 0 443 467 Electricity Infrastructure Electricity Infrastructure 01 July 2015 30 June 2019

REPLACEMENT OF 110V BATTERIES FOR EAST YARD, WESTDENE,MANGAUNG B,

MARK, MASELSPOORT 0 569 600 1 - 45 Electricity Infrastructure Electricity Infrastructure 01 July 2015 30 June 2019

REPLACEMENT OF 11KV SWITCHGEARS FOR MAGISTRATE SUB 0 1 517 1 601 Electricity Infrastructure Electricity Infrastructure 01 July 2015 30 June 2019

REPLACEMENT OF 32V BATTERIES 0 443 467 1 - 45 Electricity Infrastructure Electricity Infrastructure 01 July 2015 30 June 2019

REPLACEMENT OF LOW VOLTAGE DECREPIT 2,4,8 WAY BOXES 90 1 897 2 001 1 - 45 Electricity Infrastructure Electricity Infrastructure 01 July 2015 30 June 2019

REPLACEMENT OF BRITTLE OVERHEAD CONNECTIONS 789 885 934 1 - 45 Electricity Infrastructure Electricity Infrastructure 01 July 2015 30 June 2016

REMEDIAL WORK 132KV SOUTHERN LINES 3 478 5 058 5 336 1 - 45 Electricity Infrastructure Electricity Infrastructure 01 July 2014 30 June 2017

AUTOMATED MAINTENANCE SYSTEM 282 632 667 1 - 45 Electricity Infrastructure Electricity Infrastructure 01 July 2015 30 June 2017

REPLACEMENT OF 2 &4 WAY FIBREGLAS BOX IN SECTION H 527 1 264 1 334 30 Electricity Infrastructure Electricity Infrastructure 01 July 2014 30 June 2016

PLANNING

INSTALLATION OF PREPAID METERS (INDIGENTS) 1 100 1 150 1 213 All Electricity Infrastructure Electricity Infrastructure 01 July 2015 30 June 2016

ELECTRIFICATION CONNECTIONS (INEP) 26 316 26 316 23 358 27 Electricity Infrastructure Electricity Infrastructure 01 July 2015 30 June 2016

SERVITUDES AND LAND (INCLUDING INVESTIGATION, REMUNERATION,

REGISTRATION) 530 1 108 1 169 45 Administrative Administrative 01 July 2015 30 June 2016

PUBLIC ELECTRICITY CONNECTIONS 20 953 22 744 24 109 All Electricity Infrastructure Electricity Infrastructure 01 July 2015 30 June 2016


01 July 2015 to 30 June 2016

152 | P a g e

Project Name

MTREF ESTIMATES

War

d N

o



Project Duration

2015/2016

R’000

2016/2017

R’000

2017/2018

R’000


Date

EXTENSION AND UPGRADING OF THE 11KV OVERHEAD NETWORK IN THE PERI-

URBAN AREAS 7 003 9 315 9 827 All Electricity Infrastructure Electricity Infrastructure 01 July 2015 30 June 2017

FICHARDTPARK DC: 132KV/11KV 20MVA DC 4 000 10 000 6 800 25 Electricity Infrastructure Electricity Infrastructure 01 July 2015 30 June 2017

CECELIA DC: 132KV/11KV 30MVA DC 13 000 12 000 5 000 26 Electricity Infrastructure Electricity Infrastructure 01 Jan 2015 30 June 2017

GROENVLEI DC: 132KV/11KV 20MVA 7 888 8 851 9 338 22,23 Electricity Infrastructure Electricity Infrastructure 01 July 2014 30 June 2016

132KV NORTHERN RING FROM NOORDSTAD DC TO HARVARD DC 4 000 10 000 5 000 44 Electricity Infrastructure Electricity Infrastructure 01 July 2014 30 June 2017

ELITE SUBSTATION (AIRPORT NODE) 21 000 23 000 25 825 30 Electricity Infrastructure Electricity Infrastructure 01 Nov 2014 30 June 2017

TRANSFORMER REPLACEMENT 8 650 21 000 22 000 All Electricity Infrastructure Electricity Infrastructure 01 July 2015 30 June 2019

REPLACEMENT OF DECREPIT 11KV CABLE 3 498 3 655 3 856 19 Electricity Infrastructure Electricity Infrastructure 01 July 2015 30 June 2019

SMART STREETLIGHTS 35 000 25 000 15 000 All Electricity Infrastructure Electricity Infrastructure 01 July 2014 30 June 2019

REFURBISHMENT OF THE TAP CHANGER CONTROL PANELS AT PARK WEST,

BAYSWATER AND NAVAL PARK DISTRIBUTION CENTRES 106 222 234 All Electricity Infrastructure Electricity Infrastructure 01 July 2014 30 June 2017

REFURBISHMENT OF PROTECTION AT BAYSWATER, CORONATION, NAVAL PARK,

DAN PIENAAR 288 602 636 All Electricity Infrastructure Electricity Infrastructure 01 July 2014 30 June 2019

METER PROJECT 29 042 25 000 30 000 All Electricity Infrastructure Electricity Infrastructure 01 July 2015 30 June 2016

NETWORK CATALYST PROJECTS 0 13 750 14 671 All Electricity Infrastructure Electricity Infrastructure 01 July 2014 30 June 2017

ELECTRIFICATION PROJECTS 6 500 10 260 10 947 All Electricity Infrastructure Electricity Infrastructure 01 July 2015 30 June 2016


01 July 2015 to 30 June 2016

153 | P a g e

Project Name

MTREF ESTIMATES

War

d N

o



Project Duration

2015/2016

R’000

2016/2017

R’000

2017/2018

R’000


Date

INSTALLATION OF PUBLIC LIGHTING 5 500 16 539 17 647 All Electricity Infrastructure Electricity Infrastructure 01 July 2015 30 June 2016

MAPHIKELA DC 132/11KV 0 3 000 4 000 All Electricity Infrastructure Electricity Infrastructure 01 July 2015 30 June 2018

PROGRAMME 3: HUMAN RESOURCE SERVICES

TRAINING & DEVELOPMENT 1 773 1 400 1 400 All

Human Resource

Development

Human Resource

Development 01 July 2015 30 June 2016

PROGRAMME 7: COMPLIANCE & PERFORMANCE

OFFICE BUILDING 8 000 8 500 8 800 All Infrastructure Infrastructure 01 July 2015 30 June 2016

FURNITURE AND OFFICE EQUIPMENT 600 2 717 2 866 All Equipment Equipment 01 July 2015 30 June 2016

VEHICLES 6 000 6 000 2 000 All Acquisition of Fleet Acquisition of Fleet 01 July 2015 30 June 2016

RE-ENGINEERING OF OLD POWER STATIONS 500 5 000 10 000 All Upgrade of Infrastructure Upgrade of Infrastructure 01 July 2015 30 June 2017

REVITALIZATION OF OLD POWER STATIONS (FORTSTREET) – (Incorporation into the

Waaihoek Precinct) 3 800 3 000 1 800 All

Improvement of

Infrastructure Improvement of Infrastructure 01 July 2015 30 June 2017

PROGRAMME 1: OFFICE OF THE CEO

MARKETING COMMUNICATION – (Banding & Communication Equipment) 3 000 5 000 5 000 N/A

Communication & Marketing

Tools

Communication & Marketing

Tools 01 July 2015 30 June 2016


01 July 2015 to 30 June 2016

154 | P a g e

Project Name

MTREF ESTIMATES

War

d N

o



Project Duration

2015/2016

R’000

2016/2017

R’000

2017/2018

R’000


Date

TOTAL 246 123 326 714 323 002


01 July 2015 to 30 June 2016

155 | P a g e

4. CHAPTER 4: ORGANISATIONAL DEVELOPMENT PERFORMANCE

Centlec’s Training Centre.


01 July 2015 to 30 June 2016

156 | P a g e

CHAPTER 4: ORGANISATIONAL DEVELOPMENT PERFORMANCE

4.1. Introduction

The municipal entity has an appropriate system and procedures to ensure fair, transparent,

effective and efficient personnel administration in accordance with the Employment Equity

Act 1998 and other relevant labour legislation and Bargaining Council Agreements.

4.2. Workforce profile

Occupational

Levels

Male Female Foreign

Nationals

Total

A C I W A C I W MALE FEMALE

Top Management 3 0 0 1 1 0 0 0 0 0 5

Senior

Management 5 0 0 0 1 0 0 0 0 0 6

Professionally

qualified and

experienced

specialists and

mid-management 8 1 0 4 4 1 0 0 0 0 18

Skilled technical

and academically

qualified workers,

junior

management,

supervisors,

foremen and

superintendents 77 3 0 16 64 0 0 3 0 0 163

Semi-skilled and

discretionary

decision-making 59 0 0 2 49 0 0 1 0 0 111


01 July 2015 to 30 June 2016

157 | P a g e

Occupational

Levels

Male Female Foreign

Nationals

Total


Unskilled and

defined decision-

making 37 0 0 0 47 0 0 0 0 0 84

Total Permanent 189 4 0 23 166 1 0 4 0 0 387

Temporary

employees 11 0 0 6 12 0 0 2 0 0 31

Grand Total 200 4 0 29 178 1 0 6 0 0 418

*Please take note that this number excludes seconded employees of MMM.

4.3. Employees with Disability

Occupational

Levels

Male Female Foreign

Nationals

Total


Top Management 0 0 0 0 0 0 0 0 0 0 0

Senior

Management 0 0 0 0 0 0 0 0 0 0 0

Professionally

qualified and

experienced

specialists and

mid-management

0 0 0 0 1 0 0 0 0 0 1

Skilled technical

and academically

qualified workers,

junior

management,

supervisors,

foremen and

superintendents

0 0 0 0 0 0 0 0 0 0 0


01 July 2015 to 30 June 2016

158 | P a g e

Occupational

Levels

Male Female Foreign

Nationals

Total


Semi-skilled and

discretionary

decision-making

0 0 0 0 0 0 0 0 0 0 0

Unskilled and

defined decision-

making

1 0 0 0 0 0 0 0 0 0 1

Total Permanent 1 0 0 0 1 0 0 0 0 0 2

Temporary

employees 1 0 0 0 1 0 0 0 0 0 2

Grand Total 2 0 0 0 2 0 0 0 0 0 4

4.4. Workforce movement

4.4.1. Recruitment

Occupational

Levels

Male Female Foreign Nationals Total


Top Management 0 0 0 0 0 0 0 0 0 0 0

Senior

Management 0 0 0 0 0 0 0 0 0 0 0

Professionally

qualified and

experienced

specialists and

mid-management

1 0 0 1 0 0 0 0 0 0 2

Skilled technical

and academically

qualified workers,

junior

1 0 0 0 4 0 0 0 0 0 5


01 July 2015 to 30 June 2016

159 | P a g e

Occupational

Levels



management,

supervisors,

foremen and

superintendents

Semi-skilled and

discretionary

decision-making

0 0 0 0 0 0 0 0 0 0 0

Unskilled and

defined decision-

making

0 0 0 0 0 0 0 0 0 0 0

Total Permanent 2 0 0 1 4 0 0 0 0 0 7

Temporary

employees 11 0 0 5 10 0 0 1 0 0 27

Grand Total 13 0 0 6 14 0 0 1 0 0 34


4.4.2. Promotion

Occupational

Levels



Top Management 0 0 0 0 0 0 0 0 0 0 0

Senior

Management 0 0 0 0 0 0 0 0 0 0 0

Professionally

qualified and

experienced

specialists and

mid-management

3 0 0 0 4 0 0 0 0 0 7


01 July 2015 to 30 June 2016

160 | P a g e

Occupational

Levels



Skilled technical

and academically

qualified workers,

junior

management,

supervisors,

foremen and

superintendents

1 0 0 0 3 0 0 0 0 0 4

Semi-skilled and

discretionary

decision-making

0 0 0 0 1 0 0 0 0 0 1

Unskilled and

defined decision-

making

0 0 0 0 0 0 0 0 0 0 0

Total Permanent 4 0 0 0 8 0 0 0 0 0 12

Temporary

employees 0 0 0 0 0 0 0 0 0 0 0

Grand Total 4 0 0 0 8 0 0 0 0 0 12


4.4.3. Terminations

Terminations for

the period



Resignation 10 0 0 2 3 0 0 1 0 0 16

End of contract 64 0 0 60 2 0 0 0 0 126

TOTAL 74 0 0 2 63 2 0 1 0 0 146



01 July 2015 to 30 June 2016

161 | P a g e

4.4.4. Human Resource Policies

The municipal entity utilised the policies of MMM for the financial year 2015/16.

4.4.5. Financial Competency Development

In terms of the Guideline for Municipal Competency Levels: Finance officials at Middle

Management Level of the entity conducted the minimum competency assessments as

required by Sections 107 and 119 of the Municipal Finance Management Act No. 56 of 2003.

Identified officials attended the MFMP training and assessment; however, as at year–end,

the process was still ongoing to ensure that all officials attend the training within the specified

period.


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162 | P a g e

5. CHAPTER 5: FINANCIAL PERFORMANCE

5.1. Revenue

The entity’s total revenue from exchange transactions increased by 0.4% to R 2 076 788 655

in 2015/16. This insignificant increase is mainly attributed to

the conversion to prepaid meters and a call from Eskom to

notify consumers to use electricity sparingly.

As highlighted above, the increase in revenue has been

adversely affected by the conversion of rotational meters to

prepaid meters, faulty meters and the tampering with the

meters by customers.

Grant income decreased by 0.7% due to a decrease in receipts from the Urban Settlements

Development Grant. In the prior year this amount related to R 26 491 228 whilst only R 26 315

789 was received during the 2015/16 year.

5.2. Expenditure

As in prior periods, the most significant expense disclosed by

the entity relates to its bulk electricity purchases. This

expenditure represents 62% of the entity’s total expense.

Expenditure increased, in total, by 2%. The entity

implemented several cost-cutting measures, in order to

ensure a low expenditure base, which would result in

affordable tariffs being charged to the end-users.

Employee related costs: New appointments, salary increase & MMM seconded

employees who moved over to Centlec payroll from MMM.

Depreciation & Amortisation: Increase due to asset revaluation in the previous financial

year which increased the asset values and which resulted in increased depreciation and

amortisation for the 2015/16 financial year in comparison to the 2014/15 financial year.

New asset acquisition during 2015/16.

Debt impairment: The main reason for the decrease is due to the transfer of MMM consumer

debtor accounts from the consumer debtors to the intercompany loan. This decrease in the

REVENUE

0.4% increase in total Revenue

Decrease in Grant Income

EXPENDITURE

44% increase in Employee Related Costs

70% increase in Depreciation and Amortisation

1117% decrease in Debt Impairment

34% decrease in the Repairs and Maintenance expense


01 July 2015 to 30 June 2016

163 | P a g e

consumer debtor balance impacted the impairment calculation significantly as most of these

accounts fell in the category of long outstanding debt.

Repairs & maintenance: A large volume of Centlec’s assets were recently acquired and still

in a relatively new condition. This resulted in lower repairs and maintenance than initially

anticipated.

5.3. Surplus

The entity generated a surplus of R 7 000 489 for the year, compared to R 96 871 746 surplus

for the 2014/15 year. This was as a result of expenditure increasing more significantly than

the revenue generated by the entity during the year.

5.4. Financial Position

The 2015 financial year saw a decline in the municipal entity’s financial position. This is

clearly evident on the following line items on the statement of financial position:

An increase of cash and cash equivalents of R 165 634 225.

Liquidity - Current liabilities exceeded current assets by approximately R 7 525

729.

Solvency - Total assets exceeded total liabilities by R 2 291 865 808 at the end of

2015/16 financial year.

5.5. Cash Flow Statement

As referred to above in the CEO’s preview, there was a significant decrease in the cash and

cash equivalents mainly due to the utilization of the prior year investments to fund capital

projects

5.6. Budget

The municipal entity’s final approved budget for 2016 indicated a profit of R 246 472 723.

The actual amount on a comparable basis amounted to R 7 000 489.


01 July 2015 to 30 June 2016

164 | P a g e

6. CHAPTER 6: AUDITOR-GENERAL FINDINGS ON PRIOR YEAR

ISSUES

6.1. Purpose of the report

To provide feedback on the progress made with respect to the implementation of the Audit

Action Plan as developed in response to the municipal entity’s audit and management reports

for the financial year ended 30 June 2016.

To provide feedback on the current control environment and corrective measures implemented

during the 2015/16 financial year.

6.2. Introduction and background

The municipal entity continued with the resolute effort to address the audit findings as raised

by the office of the Auditor General in the 2014/15 financial year. The focus while implementing

and monitoring the follow up on the audit action plan has been primarily the improvement on

the audit outcomes of the previous years.

This is in pursuit of the clean audit outcome as envisaged by the municipal entity’s leadership

and management.

An audit action plan was developed and has been vigorously implemented and monitored with

involvement of all directorates, internal audit, office of the Auditor General, Audit Committee

and the Board of Directors.

Furthermore, a task team was established comprising of senior management representing all

user departments. The task team meets on a weekly basis to track the overall progress made

by the entity in terms of the Audit Action Plan.

The progress report was tabled before the Audit and Risk Committee and the Board of

Directors for deliberation and consideration. This progress was further shared with the office

of the Auditor General who provided continuous feedback.


01 July 2015 to 30 June 2016

165 | P a g e

6.3. Executive summary: Implementation of the Audit Action Plan

This section will provide an executive summary of the corrective measures implemented by

the municipal entity to deal with the audit findings as reported on by the Auditor-General.

6.3.1. Improvements to the internal control environment

The 2014/15 Management report issued by the Auditor General’s office (AGSA) covered

matters that were not resolved at the finalization of the 2014/15 audit process. However, in an

attempt to those issues resolved the management will make ensure that they are not repeated,

the action plan developed covered all issues as initially reported.

Management accordingly analysed the findings raised as per the audit report and determined

that the following matters required immediate attention in order to improve on the 2015/16

audit outcome:

Vacancies in senior management positions

Irregular expenditure management

Declaration of interest- employees in service of state

Audit of predetermined objectives- performance management framework and targets

not being smart

Incorrect interpretation of the reporting framework

Inadequate controls over ensuring that payments are made within 30 days

6.3.2. Progress on matters reported in the audit report

Auditor General Finding

6.3.2.1. Vacancies in senior management positions

At the time of the audit report the positions of the Company Secretary and Chief

Executive wires were vacant.


01 July 2015 to 30 June 2016

166 | P a g e

Management’s response

The organizational structure was approved by the board and by council of the parent

municipality.

Critical positions will be identified and filled accordingly based on their level of urgency with

the staff possessing the required competencies and skills.

Management assessment of the status of the item:

The work done to date should be sufficient to address the reasons why the office of the

Auditor General raised concern over the existence of vacant positions at senior management

level


6.3.2.2. Irregular expenditure management

The Auditor-General reported that the entity did not take reasonable steps to prevent

irregular expenditure as required by MFMA sec. 95(d).


The municipal entity has made tremendous effort to improve on the internal controls so as to

contain and manage the occurrence of irregular, fruitless and wasteful expenditure. The

impact of this has been the significant decrease in the fruitless and wasteful expenditure.

The occurrence of irregular expenditure has been contained though the decline thereof has

not been significant owing to the fact that there was one bid evaluation that did not fully

comply with the Preferential Procurement Regulations 2011.

Controls put in place include amongst others:

Improved process of reviewing all supporting documents to avoid incurring irregular

expenditure.

Monthly and quarterly reports are prepared and reported to the finance committee,

Board and council of the parent municipality as required by legislation.

Improvement on the review of the contents of the contract register and the supporting

information. Update contract register with all new developments or changes and


01 July 2015 to 30 June 2016

167 | P a g e

submission of quarterly reports to the Chief Financial Officer on existing contracts -

expiry/extended/deviations/awarded.

Most of the major contracts reported as irregular expired towards the end of the

2014/15 financial year and procurement of new services providers has been effected

in full compliance with the supply chain management regulations and MFMA.

A large number of employees of the entity have been enrolled on to the Municipal

Finance Management programme to update their knowledge and meet the minimum

competence requirements.

However, management of contracts remains a challenge that requires some improvement.


The work done to date should be sufficient to address the reasons why the office of the

Auditor General identified lack of effective steps to prevent irregular, fruitless and wasteful

expenditure.


6.3.2.3. Declaration of interest- employees in service of state

The Auditor-General reported on non-compliance with the supply chain management

regulations as services were procured from suppliers in service of state who did not

make the required declaration to the entity.


The matter remains a challenge to the entity as all suppliers are required to complete the

SCM forms to provide the required declaration.

In the absence of access to the Government’s employee’s data, the entity has relied on the

honesty of the service provider when completing the SCM forms.

In an effort to address the matter, the entity appointed a service provider to conduct the

vetting of all existing and prospective suppliers on the data base and link to the Government’s

persal system.


01 July 2015 to 30 June 2016

168 | P a g e


The work done to date will significantly assist management in the identification of service

providers who may be in the service of the state.

The matter will be adequately addressed in the future as the municipal entity has started

utilising the Centralised Suppliers’ data base created by the National Treasury.


6.3.2.4. Audit of predetermined objectives- performance management framework and targets not

being smart.

The Auditor-General raised concern over the entity not having an appropriate system

to collect, collate, verify and store performance information. Along with the above it

was also noted that the staff were not provided with the required training so as to

understand what needs to be reported.


The municipal entity did a review of the business plan for the 2016/17 and

- Aligned the business plan and the budget.

- Formulated SMART key performance indicators during the mid-year SDBIP review for the

2015/16 financial year.

- Considered capacitating the performance and compliance section with suitably qualified

and adequate staff.

- Collected all the supporting documents for the SDBIP reports on a quarterly basis and

reviewed it for reliability, accuracy and validity.

The internal audit unit performed a review of each quarter’s SDBIP for the 15/16 financial

year. The reports submitted in this regard have been considered by management and

corrective action taken.

A procedure manual was drafted to provide guidance on the collection and receiving of

performance information and was submitted to the Executive committee for comments.


01 July 2015 to 30 June 2016

169 | P a g e

A large number of employees of the entity have been enrolled on to the Municipal Finance

Management programme to update their knowledge and meet the minimum competence

requirements.

However, the filling of critical vacant posts remains one of the issues that needs to be

addressed to ensure that each Directorate has an official responsible for the collection and

reporting on performance information.


The work done to date should be sufficient to address the reasons why the AGSA identified

material audit findings on the 2014/15 annual performance report.


6.3.2.5. Incorrect interpretation of the reporting framework

The Auditor-General reported that management’s interpretation of the financial

reporting frame was not in line with the requirements.


The entity secured the services of the professional training company that has provided GRAP

training to staff in the finance section to keep track with the most recent developments in the

reporting framework.

The Annual financial statements for the 2015/16 financial year have been subject to review

by an external service provider as well as the internal audit review prior to submission to the

office of the Auditor General.


The work done to date should be sufficient to address the concern raised by the office of the

Auditor General over the entity’s incorrect interpretation of GRAP standards.


01 July 2015 to 30 June 2016

170 | P a g e


6.3.2.6 The Auditor General reported that money owed by the municipal entity was not always

paid within 30 days as required by section 99(2) (b) of the MFMA


A re-register of all payment vouchers received was created to keep track of progress and

movement of the documents within the different divisions of the entity


The work done to date has helped to improve on the controls over the processing of payment

vouchers within time.

However, the challenge still remains as some of the factors contributing to the delays are as

a result of the entity’s diverse operations and the suppliers who in some cases do not submit

invoices with all the required information on time.


01 July 2015 to 30 June 2016

171 | P a g e

Contact details

Registered office: 195 Nelson Mandela drive


Bloemfontein,

Free State

9324

Business address: 195 Nelson Mandela drive


Bloemfontein, 9324

Postal address: Private Bag X14

Brandhof

Bloemfontein, 9324

Tel: (051) 412 2613

Chief Executive Officer

A.N Mgoqi

(051) 412 2613

[email protected]

Chief Financial Officer

Jonathan Ramulondi

(051) 412 2603

[email protected]


01 July 2015 to 30 June 2016

172 | P a g e

APPENDIXES


01 July 2015 to 30 June 2016

173 | P a g e

7. APPENDIXES

7.1. APPENDIX A: BOARD MEMBERS; COMMITTEE ALLOCATION AND ATTENDANCE

- See paragraph 2.4

7.2. APPENDIX B: COMMITTEES AND COMMITTEE PURPOSES

- See paragraph 2.4

7.3. APPENDIX C: THIRD TIER ADMINISTRATIVE STRUCTURE

- See paragraph 1.6

7.4. APPENDIX D: FUNCTIONS OF ENTITY

- See paragraphs 1.3, 1.4, 1,5 and 1.10

7.5. APPENDIX E: WARD REPORTING

- Not applicable

7.6. APPENDIX F: WARD INFORMATION

- Not applicable

7.7. APPENDIX G: RECOMMENDATIONS OF THE AUDIT COMMITTEE

- See paragraph 6.3

7.8. APPENDIX H: LONG TERM CONTRACTS AND PUBLIC PRIVATE PARTNERSHIPS

- Not applicable

7.9. APPENDIX I: MUNICIPAL ENTITY PERFORMANCE SCHEDULE

- Not done in full compliance with reporting requirements.

7.10. APPENDIX J: DISCLOSURES OF FINANCIAL INTERESTS

- See paragraph 10 of the Directors Report in the Annual Financial Statements attached as Appendix

T

7.11. APPENDIX K: REVENUE COLLECTION PERFORMANCE BY VOTE AND BY SOURCE

- See Notes 24, 25, 26, 30, 31, 32 of the Annual Financial Statements attached as Appendix T

7.12. APPENDIX L: CONDITIONAL GRANTS RECEIVED

- See Note 30 of the Annual Financial Statements attached as Appendix T

7.13. APPENDIX M and N: CAPITAL EXPENDITURE

- See Notes 9 and 10 the Annual Financial Statements attached as Appendix T

7.14. APPENDIX O: CAPITAL PROGRAMME BY PROJECT BY WARD

- Not applicable

7.15. APPENDIX P: SERVICE CONNECTION BACKLOGS AT SCHOOLS AND CLINICS

- Not applicable

7.16. APPENDIX Q: SERVICE BACKLOGS EXPERIENCED BY THE COMMUNITY WHERE ANOTHER SPHERE

OF GOVERNMENT IS RESPONSIBLE FOR SERVICE PROVISION

- Not applicable

7.17. APPENDIX R: DECLARATION OF LOANS AND GRANTS MADE

- Not applicable

7.18. APPENDIX S: DECLARATION OF RETURNS NOT MADE IN DUE TIME UNDER MFMA S71

- Not applicable

7.19. APPENDIX T: ANNUAL FINANCIAL STATEMENTS

- Pages to follow (Pg. 121 to 236)

7.20. APPENDIX U: REPORT OF THE AUDITOR GENERAL ON CENTLEC SOC (LTD)

- Pages to follow (Pg. 238 to 244)

174 | P a g e

Centlec (SOC) Ltd

(Registration number 2003/011612/30) Annual Report for the year ended 30 June 2016

www.centlec.co.za

Chief Executive Officer: A.N Mgoqi Tel: +27(51) 412 2613

Email: [email protected]

Chief Financial Officer: T.J. Ramulondi Tel: +27(51) 412 2603

Email: [email protected]


mailto:Email:%[email protected]

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