DRAFT ANNUAL REPORT 2016/17 · Outputs The final products, or goods and services produced for...

i | P a g e DRAFT ANNUAL REPORT: 2016/17 FINANCIAL YEAR WALTER SISULU LOCAL MUNICIPALITY

DRAFT ANNUAL REPORT

2016/17

ii | P a g e DRAFT ANNUAL REPORT: 2016/17 FINANCIAL YEAR WALTER SISULU LOCAL MUNICIPALITY

TABLE OF CONTENTS

CHAPTER 1 – MAYOR’S FOREWORD AND EXECUTIVE SUMMARY ................. 12

1.1 COMPONENT A: MAYOR’S FOREWORD ........................................................ 12

1.1 COMPONENT B: EXECUTIVE SUMMARY ................................................... 14

MUNICIPAL MANAGER’S OVERVIEW ........................ 14

1.2 MUNICIPAL FUNCTIONS, POPULATION AND ENVIRONMENTAL OVERVIEW

16

1.3 MUNICIPAL OBJECTS AND FUNCTIONS .................................................... 19

1.3.1Functions of municipalities ........................ 19

1.3.2 EDUCATION PROFILE ........................ 22

1.3.3 OCCUPATION PROFILE ........................ 22

1.3.4 SYNTHESIS ........................ 23

1.4 ENVIRONMENTAL OVERVIEW .................................................................... 23

1.5 FINANCIAL HEALTH OVERVIEW ................................................................. 25

1.5 ORGANISATIONAL DEVELOPMENT OVERVIEW ....................................... 26

AUDITOR GENERAL REPORT 2016/17 ................................................................. 33

1.6 STATUTORY ANNUAL REPORT PROCESS................................................ 48

CHAPTER 2 - GOVERNANCE ................................................................................ 50

COMPONENT A: POLITICAL AND ADMINISTRATIVE GOVERNANCE ............... 50

2 POLITICAL GOVERNANCE............................................................................... 50

2.3 LAND COVER ................................................................................................ 56

2.4 ............................................................................................................................ 57

2.4 INTERGOVERNMENTAL RELATIONS ......................................................... 57

2.4.1NATIONAL INTERGOVERNMENTAL STRUCTURE ........................ 57

2.4.2 PROVINCIAL INTERGOVERNMENTAL STRUCTURE ........................ 57

2.4.3DISTRICT INTERGOVERNMENTAL STRUCTURE ........................ 58

COMPONENT C: PUBLIC ACCOUNTABILITY AND PARTICIPATION .................. 59

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2.5 PUBLIC MEETINGS ...................................................................................... 59

2.5.1 WARD COMMITTEES’ ESTABLISHMENT AND FUNCTIONALITY ......... 59

2.5.2 The following methods are being utilised for reaching out to communities:-60

2.5.3 Community Development Workers Performance Monitoring ..................... 62

2.5.4 Communication Strategy ........................ 62

2.6 IDP PARTICIPATION AND ALIGNMENT ...................................................... 63

2.7 RISK MANAGEMENT .................................................................................... 63

2.8 ANTI-CORRUPTION AND FRAUD ................................................................ 64

2.9 SUPPLY CHAIN MANAGEMENT .................................................................. 64

amendment or repeal by the Council of the new municipalitY ................................. 66

2.12 PUBLIC SATISFACTION ON MUNICIPAL SERVICES ................................... 66

CHAPTER3 – SERVICE DELIVERY PERFORMANCE ........................................... 68

COMPONENT A: BASIC SERVICES ...................................................................... 68

3 WATER SERVICES ........................................................................................... 68

3.2.1 Provision Strategy ........................ 68

3.3 WASTE WATER (SANITATION) PROVISION ............................................... 68

3.4 ELECTRICITY ................................................................................................ 68

3.4.1 Provision strategy ........................ 68

3.5 WASTE MANAGEMENT (THIS SECTION TO INCLUDE REFUSE

COLLECTIONS, WASTE DISPOSAL, STREET CLEANING & RECYCLING) ........ 73


3.6 HOUSING ...................................................................................................... 77

Introduction to housing ........................ 77


3.5.2 Measures to improve housing provision performance ........................ 78

Challenges in current housing projects ........................ 78

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3.7 FREE BASIC SERVICE AND INDIGENT SUPPORT .................................... 79

COMPONENT B: ROAD TRANSPORT ................................................................... 80

3.8 ROADS .......................................................................................................... 80

3.8.1 Level and standards in road maintenance services ........................ 81

3.8.2Annual performance as per key performance indicators in road maintenance

services ........................ 81

3.9 TRANSPORT (INCLUDING VEHICLE LICENSING & PUBLIC BUS OPERATION)

82

3.9.1Public Transport Facilities ........................ 82

3.9.2Railway Services ........................ 82

3.9.3 Road Worthiness and Licensing ........................ 82

3.10 WASTE WATER (STORMWATER DRAINAGE) ............................................ 83

COMPONENT C: PLANNING AND DEVELOPMENT ............................................. 83

3.11 PLANNING ..................................................................................................... 83

3.10.1 PLANNING STRATEGIES ........................ 83

3.11 LOCAL ECONOMIC DEVELOPMENT ........................................................... 86

3.11.1 BRIEF PRESENTATION OF LED (LOCAL ECONOMIC DEVELOPMENT)

STRATEGY ........................ 86

3.11.2 PROGRESS TOWARDS ACHIEVING THE LED KEY OBJECTIVE ....... 87

COMPONENT D: COMMUNITY& SOCIAL SERVICES .......................................... 95

3.12 LIBRARIES; ARCHIEVES; MUSEUMS; GALLERIES; COMMUNITY FACILITIES;

OTHER (THEATRES; ZOOS; ETC) ......................................................................... 95

3.12.1LIBRARIES ........................ 95

3.12.2 Museums ........................ 95

3.12.3 ARCHIVES ........................ 95

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3.12.4 COMMUNITY HALLS ........................ 95

3.13 CEMETORIES AND CREMATORIUMS ........................................................ 98

3.14 CHILD CARE; AGED CARE; SOCIAL PROGRAMMES ................................ 98

COMPONENT E: ENVIRONMENTALPROTECTION .............................................. 99

3.15 POLLUTION CONTROL ................................................................................ 99

3.16 BIO-DIVERSITY; LANDSCAPE (INCL. OPEN SPACES); AND OTHER (EG.

COASTAL PROTECTION)..................................................................................... 100

COMPONENT F: HEALTH .................................................................................... 101

3.17 CLINICS ....................................................................................................... 101

3.18 AMBULANCE SERVICES ............................................................................ 101

3.19 INSPECTION; FOOD AND ABBATOIR LICENSING AND INSPECTION .... 101

3.20 HEALTH INSPECTION; FOOD AND ABBATOIR LICENSING AND INSPECTION;

ETC 101

COMPONENT G: SECURITYAND SAFETY ......................................................... 102

3.21 POLICE ........................................................................................................ 102

3.22 FIRE ............................................................................................................. 102

3.23 OTHER (DISASTER MANAGEMENT, ANIMAL LICENCING AND CONTROL,

CONTROL OF PUBLIC NUISANCES AND OTHER) ............................................ 102

COMPONENT H: SPORT AND RECREATION TRANSPORT .............................. 102

3.24 SPORT AND RECREATION ........................................................................ 102

COMPONENT I: CORPARATE POLICY OFFICES AND OTHER SERVICES ...... 103

3.25 EXECUTIVE AND COUNCIL ....................................................................... 103

3.26 FINANCIAL SERVICES ............................................................................... 104

3.27 FINANCIAL PERFORMANCE 2016/17: FINANCIAL SERVICES ................ 104

3.28 HUMAN RESOURCE SERVICES ................................................................ 104

3.29 INFORMATION AND COMMUNICATION TECHNOLOGY (ICT) SERVICES105

3.30 ANNUAL PERFOMANCE REPORT 2016/17 ............................................... 105

QUALITY CERTIFICATE 106

CHAPTER 4 – ORGANISATIONAL DEVELOPMENT PERFORMANCE .............. 107

COMPONENT A: INTRODUCTION TO THE MUNICIPAL PERSONNEL ............. 127

4.2 EMPLOYEE TOTALS, TURNOVER & VACANCIES ....................................... 127

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4.2.1 HR statistics per functional area ...................... 127

4.2.2 HR statistics per functional area ...................... 127

COMPONENT B: MANAGING THE MUNICIPAL WORKFORCE .......................... 128

4.3 Human Resource Policies ............................................................................ 128

4.4 Recruitment and Selection Policy and Procedure ........................................ 129

4.5 Employee Assistance Programme ............................................................... 129

4.6 Succession Planning and Career Patting ..................................................... 130

4.7 Employment Equity ...................................................................................... 130

4.8 Skills Development ....................................................................................... 130

COMPONENT C: CAPACITATING THE MUNICIPAL WORKFORCE .................. 134

4.9 SKILLS DEVELOPMENT AND TRAINING .................................................. 134

4.10 COUNCILLORS RECEIVED TRAINING ON THE FOLLOWING AREAS: ... 134

4.11 EMPLOYEES RECEIVED TRAINING ON THE FOLLOWING AREAS: ....... 134

COMPONENT D: MANAGING THE WORKFORCE EXPENDITURE ................... 134

4.12 EMPLOYEE EXPENDITURE ....................................................................... 135

chapter 6 FINANCIAL HEALTH OVERVIEW ...................... 166

6.1 FINANCIAL SUSTAINABILITY ....................................................................... 166

The indicators or conditions that may, individually or collectively, cast significant doubt

about the going concern assumption are as follows: ............................................. 166

Financial Indicators ............................................................................................. 166

The current liabilities at year end exceeded the current assets and this could result in the

municipality being unable to settle all of its liabilities. ............................................. 167

Management will continue to put measures in place to ensure that municipal current assets

are in excess of the current liabilities. Expenditure patterns and budget control measures

will be enforced to reduce the expenditure that lead to an increase in current liabilities.

............................................................................................................................... 167

The number of days it takes to collect money from consumer debtors has increased from

the prior year and this has placed constraints on the cash flow resulting in delays in settling

the creditors. .......................................................................................................... 167

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Although the debtors' collection period has increased compared to prior year, management

has continued to enforce the credit control measures through electricity disconnections,

prepaid blockages and handover of long outstanding debts to attorneys. ............. 167

The municipality experienced material losses in electricity usage to the value of R12 557

730. This represents a loss of 17.79%. .................................................................. 167

6.1.1 Operating Indicators ................................................................................... 167

No capital grant funds were utilised for operations in the 2016/2017 financial year.167

Payables outstanding at year-end are significant at R252 070 419. This increase can

mainly be attributed to amounts owing to Eskom, Pension Funds and the Auditor General.

............................................................................................................................... 167

6.1.2 Other Indicators .......................................................................................... 167

The municipality has incurred unauthorised, irregular and fruitless & wasteful expenditure.

............................................................................................................................... 168

Key Successes ..................................................................................................... 168

APPENDICES ..................................................................................................... 170

APPENDIX A – COUNCILLORS; COMMITTE ALLOCATION AND COUNCIL

ATTENDANCE .................................................................................................... 176

APPENDIX B – COMMITEES AND COMMITTEE PURPOSES .................. 232

APPENDIX C –THIRD TIER ADMINISTRATIVE STRUCTURE .................. 233

APPENDIX E – WARD REPORTING .............................................................. 235

APPENDIX F – WARD INFORMATION .......................................................... 253

APPENDIX G – RECOMMENDATIONS OF THE MUNICIPAL AUDIT

COMMITTEE 2016/17 ........................................................................................ 266

APPENDIX H – LONG TERM CONTRACTS AND PUBLIC PRIVATE

PARTNERSHIPS ................................................................................................ 266

APPENDIX I – MUNICIPAL ENTITY/ SERVICE PROVIDER PERFORMANCE

SCHEDULE.......................................................................................................... 268

APPENDIX J – DISCLOSURES OF FINANCIAL INTERESTS ................... 268

APPENDIX K: REVENUE COLLECTION PERFORMANCE BY VOTE AND BY

SOURCE .............................................................................................................. 269

APPENDIX K (i): REVENUE COLLECTION PERFORMANCE BY VOTE . 269

APPENDIX K (ii): REVENUE COLLECTION PERFORMANCE BY SOURCE270

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APPENDIX L: CONDITIONAL GRANTS RECEIVED: EXCLUDING MIG 272

APPENDIX M: CAPITAL EXPENDITURE – NEW & UPGRADE/RENEWAL

PROGRAMMES .................................................................................................. 277

APPENDIX M (i): CAPITAL EXPENDITURE - NEW ASSETS PROGRAMME277

APPENDIX M (ii): CAPITAL EXPENDITURE – UPGRADE/RENEWAL

PROGRAMME ..................................................................................................... 277

APPENDIX N – CAPITAL PROGRAMME BY PROJECT 2016/17 ............. 278

APPENDIX O – CAPITAL PROGRAMME BY WARD 2016/17 ................... 278

APPENDIX P – SERVICE CONNECTION BACKLOGS AT SCHOOLS AND

CLINICS ............................................................................................................... 279

APPENDIX Q – SERVICE BACKLOGS EXPERIENCED BY THE COMMUNITY

WHERE ANOTHER SPHERE OF GOVERNMENT IS RESPONSIBLE FOR

SERVICE PROVISION ...................................................................................... 279

APPENDIX R – DECLARATION OF LOANS AND GRANTS MADE BY THE

MUNICIPALITY ................................................................................................... 279

Volume II ............................................................................................................... 281

Annual Financial Statements .............................................................................. 281

2016/17 FINANCAIL YEAR ................................................................................... 281

Refer to Appendix V ............................................................................................. 281

Political and Administrative guidance (Pictures of Councillors) .............................. 414

Refer to the Annual Report above .......................................................................... 414

Auditor General’s Report ....................................................................................... 414

Refer to the Annual Report above .......................................................................... 414

Audit Action Plan .................................................................................................... 414

Refer to the Annual Report above ............................... Error! Bookmark not defined.

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GLOSSARY

Accessibility

indicators

Explore whether the intended beneficiaries are able to access services or outputs.

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. This includes plans, budgets, in-year and Annual Reports.

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".

Adequacy

indicators

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

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.

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.

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.

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.

Budget year The financial year for which an annual budget is to be approved – means a year ending on 30 June.

Cost indicators The overall cost or expenditure of producing a specified quantity of outputs.

Distribution

indicators

The distribution of capacity to deliver services.

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.

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.

Impact The results of achieving specific outcomes, such as reducing poverty and creating jobs.

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.

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Integrated

Development

Plan (IDP)

Set out municipal goals and development plans.

National Key

performance

areas

• Service delivery & infrastructure • Economic development • Municipal transformation and institutional development • Financial viability and management • Good governance and community participation

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".

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.

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)

Performance

Information

Generic term for non-financial information about municipal services and activities. Can also be used interchangeably with performance measure.

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 EPMDS performance standards are divided into indicators and the time factor.

Performance

Targets:

The level of performance that municipalities and its 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.

Service Delivery

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.

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

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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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CHAPTER 1 – MAYOR’S FOREWORD AND EXECUTIVE SUMMARY

1.1 COMPONENT A: MAYOR’S FOREWORD

MAYOR’S FOREWORD:

CLLR B KHWEYIYA, MAYOR

It is with utmost pleasure that I hereby present you with the maiden Annual Report of

Walter Sisulu Local Municipality for the 2016/2017 financial year.

In this report, Council reports on its performance throughout the 2016/17 financial year

and touches on some of the service delivery highlights in our first year of existence

since August 2016.

This report is published in terms of the requirements of the Municipal Finance

Management Act No. 56 of 2003, which requires municipalities to report on all aspects

of performance, providing a true, honest and accurate account of the goals set out by

Council and the success, or otherwise, in achieving these goals.

As Council of a newly established entity, ensuing from the amalgamation of the former

Gariep Local Municipality and Maletswai Local Municipality, it was crucial to develop

short term, as well as long term strategies to guide us in navigating our way through

our five-year administrative term and beyond in order to fulfil our mandate

meritoriously. This process was initiated through the institution’s Strategic Planning


Session where we developed our Vision 2030 strategic document, which also entails

Council’s Vision, Mission, Motto and Core Values.

Our Vision:

“A socially and economically developed community with improved quality of life

for all residents by 2030”

Our Mission:

“To expedite quality service delivery to the people through stimulating a

sustainable economic base and sound governance”

Our Motto:

“Botho Humanity Ubuntu”

As the President of South Africa, Mr Jacob Zuma, declared 2017 the year of OR

Tambo, dedicating the year to the ruling party’s struggle stalwart that would have

turned 100 this year, I think it is of no coincidence that Walter Sisulu Local Municipality

also turns one in such a significant year in the books of history. This provides us more

encouragement and, in this regard, as we forge ahead in our second financial year,

we do so with renewed determination.

I will conclude by extending a word of gratitude to my fellow Councillors for their

support and continued commitment during the 2016/17 financial year – our first year

in existence, the Municipal Manager, management and the entire staff, our

stakeholders, and most importantly, the community of Walter Sisulu Local Municipality

at large for their patience as we found our bearings within our first year in Council. We

are positive that you will continue to work hand in hand with us towards our common

goal of improving our municipality for the better.

Botho Humanity Ubuntu!

I thank you. Ndiyabulela. Kea leboha.

_______________________

Councillor B Khweyiya

Mayor of Walter Sisulu Local Municipality


1.2 COMPONENT B: EXECUTIVE SUMMARY

MUNICIPAL MANAGER’S OVERVIEW

I present the community of Walter Sisulu Local Municipality, and our stakeholders at

large, with the 2016/2017 Annual Report of Walter Sisulu Local Municipality. This is

our first annual report as we are a mere year old, having been established during the

Local Government Elections in August 2016 through the amalgamation of Gariep

Local Municipality and Maletswai Local Municipality.

Our Annual Report for the 2016/17 financial year conforms to the template provided

by the National Treasury. Encompassed in this report is comprehensive information

relating to the municipality’s performance in service delivery, financial management,

governance and organizational development. This report zooms in on the actual

achievements of the municipality for the year under review, in relation to the targets

we had set out for the stipulated period. The report also covers shortfalls encountered

by the municipality within the reporting period.

The municipality started off on the back foot in August 2016, owing to the historic debt

inherited from the erstwhile Gariep and Maletswai local municipalities. This historic

debt of around R200 million inevitably preoccupied the focus of the municipality for the

most part of the year as it called for austerity measures to be devised to address the

escalating debt, interest and penalties thereof. The municipality suffered a further

R12.6 million loss attributed to electricity distribution losses during the period under


review. This adversely affected the attainment of Council’s service delivery targets

as set out in our Service Delivery Budget Implementation Plan (SDBIP) at the

beginning of the year under review. The municipality’s financial strain escalated to a

point where money owed by the municipality was not always paid within 30 days or

within an agreed period, as required by section 65(2)(e) of the Municipal Finance

Management Act (MFMA), which put a strain on our relations with our suppliers.

That being said, leadership and management stretched themselves thin in working

hard to ensure that the municipality carried out its mandate of basic service delivery

to the community of Walter Sisulu. The following are but some of the deliverables of

the municipality during the period under review:

- 100% of the municipal capital budget was spent on capital projects for the

2016/17 financial as per the Integrated Development Plan (IDP)

- 89% of households with basic level of access to solid waste removal

- 87% of households with basic level of access to electricity

- 40 kilometres of gravel roads maintained

- 70% of SMMEs benefitted from the municipality’s supply chain processes

- Functional portfolio committees in place

- Establishment of functional ward committees across all 11 wards of Council

One will appreciate the complexity of a merger and the challenge it presents with

regards to assimilating systems of two entities. It is against this background that

although we are unhappy with the municipality’s audit outcome of a Disclaimer, for the

period under review, we are cognisant that synergising operations and systems was

never going to be an inconsequential task, but one that would be perfected over time.

Leadership and management is confident that from this point going forward, such an

outcome will be a thing of the past as the systems of Walter Sisulu Local Municipality

are well on the way to stability.

MR ZOLILE NONGENI

ACTING MUNICIPAL MANAGER


1.3 MUNICIPAL FUNCTIONS, POPULATION AND ENVIRONMENTAL

OVERVIEW

INTRODUCTION TO BACKGROUND DATA

The Walter Sisulu Local Municipality is making a concerted effort in ensuring that it

fulfils its mandatory obligation of delivering basic services to the majority of people

including the indigents within the constraints of limited resources. In spite of the

progress the municipality has made, there are some bottlenecks which inhibit the

maximum delivery of services which include inter-alia obsolete infrastructure and

financial constraints. The services are not all reaching people due to continuing

population growth.

LOCALITY

The Walter Sisulu Local Municipality is a Category B municipality located in the west

of the Joe Gqabi District in the Eastern Cape Province, south of the Orange River

and Gariep Dam. The Orange River separates Walter Sisulu from both the Northern

Cape and Free State Provinces. It was established by the amalgamation of the

Gariep and Maletswai Local Municipalities in August 2016.

The Walter Sisulu Local Municipality has fairly diverse vegetation and is home to

three distinct vegetation types, one of which – Eastern Mixed Nama Karoo – is

recognised as a nationally significant biome. It is characterised by mountains, hills

and valleys. This area is well known for its stock farming, of which sheep production

is one of the dominating sectors. The streams and rivers team with fish, trout being a

common species. Rock foundations have beautiful artwork made years ago by the

founders of the area – the Khoisan.

A thermal springs resort, named Aliwal Spa, is located within the municipal area and

produces salty water, rich in minerals, from underground.

THE POPULATION OF

The seat of the WSLM is Burgersdorp with administrative units in all five towns which

are managed by unit managers. According to the revised population estimates

based on the 2011 (Statistics South Africa, 2011), the Walter Sisulu local

municipality has a population of approximately 77 477 (compared to the 2001


Census estimate of 68 621). This population accounts for 22% of the total population

residing in the Joe Gqabi District, making it the least populous local municipality in

the district.

In a nutshell the continuing population growth suggests that more educational facilities

and skills training will be required. This will also exerts more pressure on the

municipality to augment its capacity to provide services to the community.

Source: Statistics S.A, 2011

No. Households in Walter Sisulu from 2011

YEARS Population NO. OF HOUSEHOLDS

2011 77 477 21 874


Ages Male Female

Grand total

Ages

Male Female Grand total

00 – 04 4436 4585 9021

45 – 49 1698 2113 3811

05 – 09 4229 4223 8452

50 – 54 1504 1858 3362

10 – 14 3731 3660 7391

55 – 59 1318 1576 2894

15 – 19 3620 3608 7228

60 – 64 985 1285 2270

20 – 24 3570 3560 7130

65 – 69 696 802 1498

25 – 29 3191 3460 6651

70 – 74 493 784 1277

30 – 34 2734 2762 5496

75 – 79 282 484 766

35 – 39 2402 2616 5018

80 – 84 138 384 522

40 – 44 1957 2182 4139

85+ 160 388 548


KEY STATISITCS FOR WALTER SISULU

Population 77477

Females aged 5-14 7883

Males aged 5-14 7960

Females aged 15-34 10 628

Males aged 15-34 13 115

No. of households 21 874


SOCIO – ECONOMIC STATUS 2011

Year 2011

Housing Backlog as proportion of current demand 4,5%

Unemployment Rate 38%

Proportion of households with no income 10,9%

Proportion of population in low- skilled Employment 25,2%

HIV/AIDS Prevalence 11%

Illiterate people older than 14 years 12.5%


Settlement Type 2011

Formal 90.2%


Informal 9,8%


The municipality has some opportunities and challenges which include inter-alia:-

Challenges: High rate of unemployment, the ageing infrastructure, Lower educational

levels, HIV/AIDS, Shortage of houses, Lack of skills and low income.

Opportunities: Large percentage of youth, Orange River and access to National road

(N6).This large percentage of youth should be capacitated with skills in order for

them to improve the livelihood of their communities by using the available natural

assets for the present and future generation. The municipalities should also support

the people financially and with skills for the sustainability of their projects to create

more job opportunities. Aliwal Spa revitalisation project to expand the tourism

potential

1.4 MUNICIPAL OBJECTS AND FUNCTIONS

According to the Constitution of the Republic of South Africa (1996) the Local

Municipalities are obliged to execute these objects that are assigned to them:-

To promote democratic and accountable government for local communities

To ensure the provision of services to communities in a sustainable manner

To promote social and economic development

To promote a safe and healthy environment and

To encourage the involvement of communities and community organisations in the

matters of local government.

Within this Constitutional mandate, powers and functions have been defined in terms

of the Local Government Municipal Structures Act 117 of 1998 as amended.

1.4.1 FUNCTIONS OF MUNICIPALITIES

The functions of the municipality are listed in the table below

Function District Municipality Local Municipality

Air pollution X



Building regulations X

Child Care facilities X

Electricity reticulation X

Fire Fighting X as per regulations

Local Tourism X as per white paper X

Municipal airports X

Municipal Planning X X

Municipal Health Services X

Municipal Public Transport X

Pontoons and Ferries X

Storm water X

Trading regulations X

Water (potable) X

Sanitation X

Schedule 5 part b X

Beaches and amusement

facilities

X

Billboards and the display of

adverts in public places

X

Cemeteries, Crematoria and

funeral parlours

X

Cleansing X

Control of public nuisances X

Control of undertakings that sell

liquor to the public

X

Facilities for the

accommodation, care and burial

of animals

X

Fencing and fences X

Licensing of dogs X



Licensing and control of

undertakings that sell food to the

public

X

Local amenities X

Local sport facilities X

Markets X

Municipal abattoirs X

Municipal parks and recreation X

Municipal roads X

Noise pollution X

Pounds X

Public places X

Refuse removal, refuse dumps

and solid waste disposal

X

Street trading X

Street lighting X

Traffic and parking X

Additional agency functions performed

Licensing of vehicles X

Primary Health Care January 2011 moved

to Provincial

Department of Health

Road maintenance X X

The administration of Walter Sisulu Local Municipality is headed by a Municipal

Manager, and his appointment as an Accounting Officer is enshrined in section 82 of

Municipal Structures Act 117 of 1998, and this [appointment] is formalized by a

signed Employment Contract. An Annual Performance Agreement in respect of the

Municipal Manager have been aligned to the IDP 2016/17 and submitted to the

Mayor together with the annual SDBIP and subsequently to the Municipal Council for

ratification.


1.4.2 EDUCATION PROFILE

A key dimension that directly influences the potential employability of community

members is their educational background and level of skills that they possess. The

level of education and skills within a region impacts on many factors, including: the

productive efficiency of investments (e.g. health, capital), employment potential, the

gender gap and productivity and income levels. Education is therefore acknowledged

as being inextricably linked to the economic development of an area and to a

growing middle class. The educational levels in Walter Sisulu municipal area are as

follows:

- The proportion of the population in Walter Sisulu Local Municipality with no

schooling is 12.5%

- 19% of the population has a Grade 12/Matric

- 8.5% having higher education

(STATSSA 2011 Community Survey)

There is a large proportion of the population who are unable to be fully economically

active members of the community due to their employability. This impacts on income

levels of the community and reduces the potential for economic growth. This poor

level of education could be due to lack of facilities as well the isolated nature of many

people in the rural areas. Another could be the lack of employment opportunities for

more skilled workers, which reduces the incentives for further study. Skilled people

are more likely to leave the area to look for work or higher paying work elsewhere,

reducing the skills available in the area.

1.4.3 OCCUPATION PROFILE

The unemployment and employment levels within the Walter Sisulu Local

Municipality are important to investigate, because the income generated from

employment is used to purchase goods and services. In addition, high levels of

unemployment are generally associated with poor socio-economic conditions and

poverty.



Out of the grand total of nine hundred and seventy (9, 770) household head only

four thousand six hundred and fifty five (4, 655) household heads are employed

whilst the biggest number of household heads are unemployed, are discouraged

work seekers and are not economically active group of the society.

1.4.4 SYNTHESIS

From the socio-economic assessment conducted it is evident that the population is

relatively better off than other households living in our district, however the local

economy is unable to create enough jobs to absorb the working aged people. In

addition to this although the population of Walter Sisulu is relatively well educated

(compared with other areas in the province) most employment is in unskilled,

elementary occupations, which is indicative of low levels of income.

This further undermines the ability of the local economy to grow. Population growth

in Walter Sisulu is growing as there are many government departments that are

relocating to this region. There are still those with specialized and scarce skills that

are vacating the municipality in search of employment in other areas. This is a

negative trend, particularly if higher skilled people are leaving the municipality. A

positive trend is that most households have access to basic services and

infrastructure.

1.5 ENVIRONMENTAL OVERVIEW

Before the commencement of any land development the Maletswai Municipality is

fully complying with chapter 5 of the National environmental Act of 1998. In general,

when considering applications for land development, the Municipality is fully

considering the environmental principles.

The National Environmental Management Act is one of the pieces of legislations

applicable to Maletswai Local Municipality. Also, Joe Gqabi Environmental

Management Plan (2003), Joe Gqabi Spatial Development Framework (2006) and

Maletswai Spatial Development Framework are also documents considered and

applicable to the municipality.

Municipal area

Employed Unemployed Discouraged work-seeker

Other not economically

active

Not applicable

Walter Sisulu

18 885 6733 3104 19 273 29477


SERVICE DELIVERY OVERVIEW

Service delivery is about delivering government services as effectively as possible to

the satisfaction and delight of its citizens. The South African Constitution states that

municipalities have the responsibility to make sure that all citizens are provided with

services to satisfy their basic needs.

It is national government policy that no household should be left without basic

services because it cannot afford either the capital or the recurring monthly costs of

accessing basic services. In line with this policy, National government has therefore

committed to subsidizing both the capital and operating costs of a free basic level of

services for all households who cannot afford to pay.

In compliance with the aforementioned policy the municipality has made a

tremendous progress in providing the basic services to the people including the

indigents. The key service delivery improvements are highlighted below:-

10 521 households have access to potable water and

19030 households have access to electricity services

The main challenges that hinder the optimum delivery of these key services are the

lack of finance and the obsolete infrastructure.

Future commitments to initiatives for improving service delivery

To accelerate the pace for service delivery, the municipality has designed and

adopted the following strategic objectives:-

Development of sector plans dealing with various service infrastructure

requirements, including the possible funding mechanisms necessary to

address the basic service backlogs;

Accessing the consolidated MIG funds allocated to the municipality annually

for projects to roll-out basic service infrastructure to poor communities;

Creative application of the housing subsidy administered by the Department

of Human Settlements for low-cost and middle-income housing to support roll-

out of infrastructure at basic level;

Efficient utilization of the municipality’s equitable share of nationally raised

revenue to fund the recurrent costs of this free basic service provision in their

communities; and

Improvement of municipal rates collections and application of a cross

subsidized system of rates determination to ensure distribution of value

across the various sector active within the local municipality.


1.6 FINANCIAL HEALTH OVERVIEW

The Municipal Systems Act 32 of 2000 requires a municipality to include a financial plan,

including a 3 year budget, in the annual Integrated Development Plan. In essence this

financial plan is a medium term strategic framework on how the municipality plans to

deliver services, within financial means. The Council’s strategic objective of service

delivery includes the persistence of the acceptable levels of service as well as the

improvement in those areas where it lacks acceptable levels. The balancing act is to

achieve these objectives with available financial resources, and to always consider the

effect of tariff adjustments on the community at large, and specifically the poor.

Walter Sisulu has challenges around the amount of income available to deliver services.

Due to their population size they receive only a small amount of equitable share. This is

coupled with the fact that they have urban areas with old infrastructure, which is of a

high level of service, but which still needs to be maintained and they are not drawing in

much income from the sale of services to these communities.

The Municipality have not managed to implement systems around levying rates on the

commercial farmland and this has negatively affected their income. Challenges around

the spending of funds in the municipality, which has been more towards the previously

disadvantaged, has meant that maintenance of some of the higher level services in

other areas have deteriorated beyond reasonable repair. This will impact on the ability

of the municipality to attract and or retain commercial enterprises that could generate

income for the municipality.


1.7 ORGANISATIONAL DEVELOPMENT OVERVIEW

The municipality has a total of number 581 employees inherited from the erstwhile

Maletswai and Gariep municipalities. The municipality are in the process of

conducting staff placements which will than determine the vacancy rate of the

municipality.

Depicted below is the summary of the Walter Sisulu Local Municipality employees.

Full time staff complement: MM/Section 56 and Line Managers

Approved positions Number of

approved and

budgeted posts per

position

Filled posts Vacant posts

1 Municipal Manager 1 1 0

2 Directors s56 5 3 2

4 Sectional Heads/ Line

Managers

40 31 9

Total 46 35 11

Staff complement in the Technical Services

Approved positions Number of approved and

budgeted posts per

position

Filled

posts

Vacant posts

Director 1 1 0

Manager 4 2 2


Foremen 6 5 1

Superintendent 2 2 0

Tool men 4 4 0

Linesman 1 1 0

Shift workers 17 16 1

Drivers 12 12 0

Operators 6 6 0

Public Works

Approved positions Number of approved

and budgeted posts

per position

Filled posts Vacant

posts

1 Director 1 1 0

2 Manager 1 0 1

3 Foreman 0 0 0

4 General assistants 47 47 0

5 Drivers 3 3 0

6 Temporary Staff 54 54 0

Total 106 105 1


Electricity


and budgeted posts

per position

Filled

posts

Vacant posts

1 Director 1 0 1

2 Manager 1 1 0

3 Senior electrician 2 1 1

4 Electricians 9 9 0

5 Semi-Skilled Electricians 5 5 0

6 Street lights repairer 1 1 0

7 Temporary staff 6 6 0

8 Meter Readers 7 7 0

Total 32 30 2

Technical Staff Registered with Professional Bodies

Technical

Service (e.g.

water,

electricity etc…)

Total number

of technical

service

Managers

Total number

registered in

the

accredited

professional

body

Total number

pending

registration

confirmation in

the accredited

professional

body

Total number not

yet registered in

the accredited

professional body

Electricity 1 0 0 1

Building 1 0 0 1


Staff level of education and skills

Total number of staff Number of staff

without Grade 12

Number of staff

with Senior

Certificate only

Number of staff with

Tertiary/accredited

professionals

training

368 (exclusive of 213

casual & contract

employees)

194 74 100

Trends on total personnel expenditure

Financial Years Total number of staff

Total approved operating Budget

Personnel expenditure (salary and salary related)

2016/17 581 95 598 809 45 445 424

List of pension and medical aids to which employees belong

Names of pension fund

Number of members

Names of Medical Aids

Number of members

Cape Joint 91 Key Health 3

SAMWU Provident Fund 130 Samwumed 38

SALA Pension Fund 147 Bonitas 66

Municipal Pension Fund 0 LA Health 17

Hosmed 11

Discovery 16

Total 368 151

SENIOR OFFICIALS’ WAGES AND BENEFITS


The table below is the wages and benefits for the 2016/2017 financial year. There

were no performance bonuses paid to senior managers for the financial year

2016/2017.

Designation Salaries

2016/17

Allowances

2016/17

Bonus

2016/17

Total Paid

Municipal Manager 1 002 726.20 363 287.56 - 1 366

013.76

Director: Financial Services 494 580.50 337 160.70 - 831

741.20

Director: Corporate Services - - - -

Director: Community Services 55 8849.57 297 981.07 46 570.80 903

401.44

Director: Technical Services 589 635.14 263 134.72 - 852

769.86

Director: IPED 490 081.88 499 004.92 - 989

086.80

ANNUAL PERFORMANCE AS PER KEY PERFORMANCE INDICATORS IN MUNICIPAL TRANSFORMATION AND ORGANIZATIONAL DEVELOPMENT

Indicator name Total number of people (planned for) during the year under review

Achievement level during the year under review

Achievement percentage during the year

Comments on the gap

Vacancy rate for all approved and budgeted posts

14% 76% 76% -

Percentage of appointment in

- - - -





Comments on the gap

strategic positions (Municipal Manager and Section 57 Managers)

Percentage of Section 56 Managers including Municipal Managers who attended at least 1 skill development training course within the FY

100%

100%

100%

-

Percentage of Managers in Technical Services with a professional qualification

100% 100% 100% -

Percentage of staff that have undergone a skills audit (including competency profiles) within the current 5 year term

100% 100% 100% _

Percentage of councillors who attended a skills development training within the current 5 year term

100% 100% 100% -





Comments on the gap

Percentage of staff complement with disability

4% 1% 1% There is a limited number of responses from people living with disabilities.

Percentage of female employees

40% 39% 39% -

Percentage of employees that are 35 or younger

35% 60% - -

MAJOR CHALLENGES AND REMEDIAL ACTIONS IN REGARD TO HUMAN

RESOURCE AND ORGANIZATIONAL MANAGEMENT

Challenge Remedial action

Inadequate funds and/or training budget that is not cash backed derails skills development programmes espoused by Work Skills plan

Collaborate with JGDM and LGSETA to ensure that training programmes planned in WSP are implemented.

Inability to fill vacant positions on the organogram

Maximum utilisation of available staff and interns


1.8 AUDITOR GENERAL REPORT 2016/17
















Not Applicable for the year under review

1.9 STATUTORY ANNUAL REPORT PROCESS

No. Activity Timeframe

Activity

done

(yes/no)

1

Consideration of next financial year’s Budget and IDP

process plan. Except for the legislative content, the

process plan should confirm in-year reporting formats

to ensure that reporting and monitoring feeds

seamlessly into the Annual Report process at the end

of the Budget/IDP implementation period. July

Yes

2 Implementation and monitoring of approved Budget

and IDP commences (In-year financial reporting). Yes

3 Finalise 4th quarter Report for previous financial year

Yes

4 Submit draft 2016/17 Annual Report to Internal Audit

and Auditor-General Yes

5 Municipal entities submit draft annual reports to MM

N/A

6 Audit/Performance committee considers draft Annual

Report of municipality and entities (where relevant)

August

No

8 Mayor tables the unaudited Annual Report

No

9

Municipality submits draft Annual Report including

consolidated annual financial statements and

performance report to Auditor General.

No

10

Annual Performance Report as submitted to Auditor

General to be provided as input to the IDP Analysis

Phase

Yes

11

Auditor General assesses draft Annual Report

including consolidated Annual Financial Statements

and Performance data

September

– October

No

12 Municipalities receive and start to address the Auditor

General’s comments

November

Yes

13

Mayor tables Annual Report and audited Financial

Statements to Council complete with the Auditor-

General’s Report

No

14 Audited Annual Report is made public and

representation is invited No


No. Activity Timeframe

Activity

done

(yes/no)

15 Oversight Committee assesses Annual Report

No

16 Council adopts Oversight report

December

No

17 Oversight report is made public

No

18 Oversight report is submitted to relevant provincial

councils No

19

Commencement of draft Budget/ IDP finalisation for

next financial year. Annual Report and Oversight

Reports to be used as input. January

No

T1.7.1


CHAPTER 2 - GOVERNANCE

COMPONENT A: POLITICAL AND ADMINISTRATIVE GOVERNANCE

2 POLITICAL GOVERNANCE

2.1 .1 POLITICAL GOVERNANCE Walter Sisulu Local Municipality (WSLM) is established by Section 12 Notice

promulgated by the Department of Local Government and Traditional Affairs (COGTA)

in the Eastern Cape. Walter Sisulu Local Municipality is a Category B Municipality

(Local Municipality) and comprises 22 Councillors, including the Mayor and the

Speaker; 15 Councillors represent the African National Congress (ANC), 5 Councillors

represent the Democratic Alliance (DA), 1 Councillor represents the Economic

Freedom Fighters (EFF) and 1 Councillor represents the Maletswai Civic Association

(MCA). Of the 22 Councillors, 11 are Ward Councillors for the respective wards, with

the remaining 11 being Proportional Representative Councillors of their respective

political parties in Council. WSLM is comprised of five towns namely; Aliwal North,

Jamestown, Burgersdorp, Steynsburg and Venterstad.

Below is a categorisation of the 22 Councillors according to party representation in

Council:


Fifteen (15) African National Congress Councillor

Five (5) Democratic Alliance Councillors:

One (1) Economic Freedom Fighters Councillor:


EFF CLLR V SCHOEMAN

One (1) Maletswai Civic Association Councillor:

MCA CLLR M JAN

2.1.1 The following councillors are appointed on a proportional basis:

2.1.1.1 Cllr B Kweyiya - Mayor 2.1.1.2 Cllr M Mtshingana 2.1.1.3 Cllr N Ngubo 2.1.1.4 Cllr V Davids 2.1.1.5 Cllr Y Zweni 2.1.1.6 Cllr D Hartkopf 2.1.1.7 Cllr M De Riddel Nel 2.1.1.8 Cllr E Theron 2.1.1.9 Cllr A Van Heerden 2.1.1.10 Cllr V Schoeman 2.1.1.11 Cllr M Jan

The Committees of council are constituted as follows:

2.1.2 Corporate Services Committee

2.1.2.1 Cllr V Davids - Chairperson


2.1.2.2 Cllr Z Mqokwana 2.1.2.3 Cllr Y Zweni 2.1.2.4 Cllr M Solani 2.1.2.5 Cllr E Theron

2.1.3 Technical Services Committee

2.1.3.1 Cllr N Ngubo - Chairperson 2.1.3.2 Cllr B Ndika 2.1.3.3 MW Mokhoabane 2.1.3.4 Cllr X Mabusela

2.1.4 Financial Services

2.1.4.1 Cllr D Hartkopf - Chairperson 2.1.4.2 Cllr Z Masina 2.1.4.3 Cllr Z Mangali 2.1.4.4 Cllr M Mdumisa 2.1.4.5 Cllr V Schoeman

2.1.5 Community Services


2.1.5.1 Cllr B Khweyiya - Chairperson 2.1.5.2 Cllr L Nkunzi 2.1.5.3 Cllr M Mtshingana 2.1.5.4 Cllr E Theron

2.1.6 Institutional Planning and Economic Development

2.1.6.1 Cllr M Solani 2.1.6.2 Cllr C Davids 2.1.6.3 Cllr B Khweyiya 2.1.6.4 Cllr D Hartkopf 2.1.6.5 Cllr N Ngubo

2.1.7 Municipal Public Accounts Committee (MPAC) 2.1.7.1 Cllr Zwelithini Mqokrwana (Chairperson) 2.1.7.2 Cllr Zukiswa Mangali 2.1.7.3 Cllr Mavuyevelile Solani 2.1.7.4 Cllr Babalwa Ndika 2.1.7.5 Cllr Zukiswa Mangali 2.1.7.6 Cllr Vuyisile Schoeman 2.1.7 Ethics & Rules Committee

2.1.7.1 Cllr Yandiswa Zweni (Chairperson) 2.1.7.2 Cllr Magaret Mtshingana 2.1.7.3 Cllr Mavuyevelile Solani

2.1.8 Performance Committee 2.1.8.1 Cllr Babalwa Ndika


All section 79 portfolio heads work as part-time councilors. The legislative and

executive authority vests in the municipal council.

The following successes were registered by the council during 2016/17 financial year:-

Adoption of the draft and final budgets within the prescribed time frames;

Adoption of the Integrated Development Plan (IDP) in line with legislative

prescripts;

The Municipal IDP received a HIGH ranking from Member of Executive Council

(MEC) responsible for Local Government and Traditional Affairs for its credibility

The main function of the standing committees is to consider matters relevant to their

respective directorates and make recommendations to council for approval. Standing

committees also exercise oversight role over the performance of their directorates.

2.2 ADMINISTRATIVE GOVERNANCE

The Committees of council are established in terms of section 79 of the Municipal

Structures Act, Act 117 of 1998. The Municipality has a Collective Executive System

combined with a Ward Participatory System. The former allows for the exercise of

executive authority through an Executive Committee in which executive leadership is

collectively vested, and the latter allows for matters of concern to the wards to be dealt

with by Ward Committees established by the wards.

Within the context of the above, the Mayor and Speaker both hold office as full time

public office bearers; this enables the Mayor to provide political leadership and

direction to the municipal bureaucrats and the Speaker, as Chairperson of Council, to

ensure oversight, accountability, integrity, discipline of office, and the efficient running

of Council meetings.


2.3 LAND COVER

The Walter Sisulu Local Municipality (WSLM) has five towns namely, Aliwal North,

Jamestown, Burgersdorp, Steynsburg and Venterstad. The WSM is located in the

Eastern Cape Province in the western side of the Joe Gqabi District Municipality, that

WSLM is located south Free State Province and is bordered by Senqu Local

Municipality to the East, Xhariep local municipality to the north, Molteno to the

southeast, Takastard to the south, Middelburg to the Southwest. The Orange River

separates the WSLM municipality from both the Northern Cape and the Free State

Provinces. The area of the WSLM local municipality covers an area of 13280.2 km².

With regard to key road networks, the R58 runs through Venterstad, Burgersdorp and

Aliwal North and the N6 runs through Jamestown and Aliwal North to Bloemfontein in

the north and East London to the South.

The plan below indicates the land cover for Walter Sisulu Local Municipality


COMPONENT B: INTERGOVERNMENTAL RELATIONS

2.4INTRODUCTION TO CO-OPERATIVE GOVERNANCE AND

INTERGOVERNMENTAL RELATIONS

Co-operative government means that the three spheres of government should work

together (co-operate) to provide citizens with a comprehensive package of services.

The Constitution states that the three spheres have to assist and support each other,

share information and coordinate their efforts. The implementation of policies and

government programs require close co-operation between the spheres of government.

In Walter Sisulu Local Municipality the working relations between the Departments and

municipality were always cordial. Whilst some Departments attended the IDP

Representative forum, others did not. Some of those who attended were represented

by staff members who lacked the requisite authority to take decisions on behalf of their

Departments. This is an area that requires much attention as it has a potential to

paralyze the effectiveness of the IDP representative forum. The Departments submit

their plans to the municipality so that they can be implemented in collaboration with

the municipality.

2.4 INTERGOVERNMENTAL RELATIONS

2.4.1 NATIONAL INTERGOVERNMENTAL STRUCTURE

All the programmes that are developed by the Municipality are derived from the laws

and policies that are passed by the National and provincial governments. The local

development strategies in the Walter Sisulu Municipal Integrated Development Plan

are aligned to the National development policies.

2.4.2 PROVINCIAL INTERGOVERNMENTAL STRUCTURE

The Walter Sisulu Municipality is represented by the Joe Gqabi District Municipality

(JGDM) in the following Provincial IGR cluster meetings:-

Governance and Administration Cluster

Social needs Cluster and


Economic Growth and Infrastructure

2.4.3 DISTRICT INTERGOVERNMENTAL STRUCTURE

The Walter Sisulu Municipality process plan is aligned to JGDM’s district Framework

plan-this ensures District alignment of the Intergraded Development Plan .The District

Municipality (Joe Gqabi) bilateral conventions with sector departments, and

municipalities to have the same opinion on intergraded procedures, and to facilitate

configuration between District Municipality, Local Municipality and Provincial

Departments in respect of programmes and projects. The Municipality is represented

in the Joe Gqabi District IDP Representative forum (consisting of all local

municipalities in JGDM, government Departments and other key stakeholders). At this

consultative forum meetings, discussions revolves around needs assessment, areas

of prioritization, objectives, alignment of projects and accountability issues within the

context of planning and implementation processes. The Municipality is also

represented in the following District Inter-Governmental Relations (IGR) structures:-

District Inter-Governmental Mayors Forum

In both Political and Technical Meetings

Chief Financial Officer Forum

District Wide Corporate Service Working Group

District Health Advisory Council, and

District Social Needs Cluster


COMPONENT C: PUBLIC ACCOUNTABILITY AND PARTICIPATION

2.5 PUBLIC MEETINGS

2.5.1 WARD COMMITTEES’ ESTABLISHMENT AND FUNCTIONALITY

Consistent with the provision participatory democracy, council adopted that regulates

the establishment and functionality of the ward committees. Subsequent to the

adoption of ward committee policy, council established 11 ward committees which are

constituted by various interest groups in the ward.

Council has set aside approximately R 885 360 for the reimbursement of ward

committee stipend.

Furthermore, council has appointed a Public Participation Officer whose task is to

ensure that public participation in the affairs of the municipality. Provides secretarial

support to all ward committees, taking minutes at ward committee meetings. Record

of ward committee meetings are filed for future reference and usage. The minutes are

kept together with the attendance registers, which are in turn used to process the

payment of the stipend for the ward committees. Ward Committees are sitting as per

their calendar of events unless there are pressing issues that would require special

meetings.

These ward committees consists of interest groups that are drawn from the active

community based structures in the ward. In strengthening the functionality of ward

committees council provided induction workshop and many other trainings to the

sharpen understanding of ward committee on local government work.

The Municipality utilises ward committees and Community Development workers,

special programmes forums, IDP and budget forums for public participation. The

municipality also ensures the ward community consultation through Community Based

Planning and constant report backs.


2.5.2 THE FOLLOWING METHODS ARE BEING UTILISED FOR

REACHING OUT TO COMMUNITIES:-

2.5.2.1 PUBLIC PARTICIPATION PROGRAMME AND LOCAL PRINT

AND ELECTRONIC MEDIA

To limit the language barrier that could cause the public not to participate fully in

matters of government, four languages are being utilised in communicating with the

public namely, (English, Afrikaans, Xhosa and Sotho). Nonetheless, there is still a

challenge because the Municipality is not publishing its documents in all four official

languages. IDP Budget outreach programmes are conducted before and after the

draft IDP and Budget has been finalised for comment by the public. The Ward

Committees, CDW’s, Public Participation Officer and ward councillors assist in

mobilisation of communities towards ward meetings. Community needs are

processed to various government departments through IDP Representative Forum.

To ensure effective participation the following structures were entrusted with the

following tasks:

Municipal Manager – To co-ordinate participation by all structures

Council – To ensure the democratic involvement of people in government

Steering Committee – To serve as a resource to the representative forum by advising

and integrating the forum input.

IDP and Budget Representative Forum: to serve as a public forum for debates

where various interests groups influenced government decisions.

2.5.2.2 WARD COMMITTEE’S ESTABLISHMENT AND FUNCTIONALITY

The ward committee were established in November 2016 and early March 2017 and

have been functional since then. During the year under review 11 ward committee

and general meetings were held in all wards.


Ward number Committee

Meetings

General meetings

1 (Venterstad, Oviston, Sunnyside,

Nozizwe & Lychumville)

4 0

2 (Khaymnandi, Westdene and

Greenfield)

4 1

3 (Burgersdorp town, Mzamamhle,

Masakhane & kroonvlei)

4 0

4 (mzamomhle & Eurika) 4 1

5 (Thembisa, Burgersdorp town and

Steynsburg town)

4 0

6 (Area 13, Block H1 & Vula Vala) 4 3

7 (Egqili sites, Vula Vala, block F,

Zwelitsha, Dukathole Block C & D,

Graded, part of town, Block E & Pola

Park

4 1

8 (Block G (Vergenoeg), Block H2

and Police Station Portion)

4 3

9 (White City, Hilton, Springs, Aliwal

North town, Birds Eye View, Pola

Park)

4 1

10 (Joe Gqabi, Soul City and

Hongerbuild)

4 3

11 (Arborview, Springs, Jamestown &

Masakhane, farming community)

4 1

Total 44 14


2.5.3 COMMUNITY DEVELOPMENT WORKERS PERFORMANCE

MONITORING

Masiphathisane/War Rooms is a consultative platform where all Government spheres,

Provincial Departments and all community organizations within a ward meet to resolve

issues affecting communities and community organisations. This platform was

established in all eleven wards and are presided upon by Ward Councilors and the

CDW`s as the secretariat of these meetings.

2.5.4 COMMUNICATION STRATEGY

A Draft Marketing and Communication Strategy has been developed for Walter Sisulu

Local Municipality for the 2016/17 financial year, with a review of the Strategy done

annually. The Strategy is a roadmap for the enhancement of national government’s

message and call to the “Back to Basics” approach. It also ensures that a participatory

democracy amongst the citizens of Walter Sisulu Local Municipality is strengthened,

so that they participate fully in the affairs of government.

As part of the Communication Strategy, Environmental Scanning is done bi-annually

and a Customer Satisfaction Survey done annually across all 11 wards. Moreover, the

Municipality produces an external newsletter for each quarter of the financial year.

Information sharing with the public is done through various media, including the

Mayor’s Radio slot conducted on a quarterly basis, publishing of articles in the local

newspapers, through the distribution of marketing and communication material (flyers

& posters) through the assistance of Ward Committees, as well as through official

social media platforms.

Our Communication Strategy is there to strengthen the integration of communication

and to ensure coherent messaging through leadership of mechanisms including

Masiphathisane War Rooms, Local Communication Fora, and communication support

to other government departments operating in the Walter Sisulu municipal area.


More significantly, the Communication Strategy is for ensuring that the social distance

between the local community and the municipality’s political structures, political office

bearers and administration is narrowed.

2.6 IDP PARTICIPATION AND ALIGNMENT

As part of enabling the community an opportunity to participate in the decision making

processes of the municipality numerous mechanisms were employed. There were 11

mayoral Imbizos held with communities in the 11 wards that constitute the municipality.

These meetings were preceded by meetings with ward committees. After each session

of Imbizo, an action plan is drawn up for all the matters raised by the members of the

community. The implementation of the plan is then monitored by the Mayor and

Chairpersons of standing committees and on a quarterly basis a report is presented

to the Council.

In light of the above, members of the ward committee attend the council meetings.

They are also furnished with the agenda of the Council to enable them to prepare

themselves for the council meetings.

2.7 RISK MANAGEMENT

The Municipality has a policy in place whereby the Municipal Manager, the Chief

Financial Officer and other key members of the senior management will proactively,

purposefully and regularly identify and define current as well as emerging business,

financial and operational risks and either simultaneously or with due expedition identify

appropriate and cost effective methods of obviating or managing these risks.


2.8 ANTI-CORRUPTION AND FRAUD

Council is in the process of drafting Anti- Corruption and Fraud Strategy as one way

of strengthening its fight against these twin social ills. As a build up to its adoption and

a way of raising employees’ awareness about the existence of such policies, a

workshop was held comprising municipal officials and employees. The strategy will

reviewed every year after its adoption. Furthermore, to demonstrate the seriousness

of the council to fight fraud and corruption, a committee comprising 5 member’s will

established to monitor advice and compile reports on the implementation of the anti-

fraud and corruption Strategy.

2.9 SUPPLY CHAIN MANAGEMENT

The Walter Sisulu Local Municipality Supply Chain Management Policy seeks to

encourage socio- economic transformation within its area. To achieve this,

empowerment goals have been set, which aims to address the skewed distribution

of wealth and therefore contributes to the alleviation of poverty. This means the

policy will achieve the above by providing employment opportunities to Historically

Disadvantaged Individuals (HDI’s) and communities enabling socio-economic

transformation objectives to be linked to fair, transparent, equitable, competitive

and cost effective procurement practice. The empowerment goals are proposed to

be used as measures by Council in assessing the impact of its policy in realizing

the socio-economic transformation agenda of government in all spheres. To boost

the declining local economy the Municipality has incorporated a number of local

economic development initiative and projects in the integrated development plan.

It also realizes that its supply chain management and practices can play an

important role in stimulating local economic growth and development. This policy

is therefore designed to contribute to the achievement of the Municipality’s local

economic growth and development objectives.


It is also a primary strategic objective of the Municipality to affirm the historically

disadvantaged community in order to eradicate the legacy of apartheid and

colonialism and the resulting exclusion from opportunity. In this regard the

Municipality supports the Government’s broad – based black economic

empowerment policies and strategy completely.

A key objective of this policy is therefore to promote entrepreneurship to allow

HDI’s access to the mainstream of business opportunities. This will be achieved by

increasing business opportunities for HDI’s and maximizing purchases of goods

and services from black owned and black empowered enterprises. This means that

acceptable norms and standards of quality, service delivery and technical

performance will not be relaxed or compromised in respect of historically

disadvantaged individuals.

The municipality developed the Supply Chain Management Policy in line with the

Preferential Procurement Policy Framework Act (PPPFA), supply regulations and

enabling circulars as well as by-laws that seeks to enforce full compliance with the

requirements of the law. Regular updates will be effected whenever there are

changes to legislation and its regulations.

The supply chain management policy explicitly states the need for quality delivery

of both goods and services and rigorous processes are followed on procuring and

these include among other things three quotations, competitive bidding, evaluation

and adjudication of all tenders. The policy also spells out a procurement threshold

and authorization thereon. All procurement below R30 000 are not advertised but

a minimum of three quotations is a pre-requisite except for those below R2000,

which requires a single quote.

Tenders in excess of R30 000 are advertised in the local newspaper for a period

ranging from seven days to thirty (30) days for those above R10 million. The

accounting officer adjudicates on all tenders above R10 million and makes the final

award. Tenders above R30 000 but below R200 000 are adjudicated by the Chief

Financial Officer as per the delegation framework and those between R200 001


and below R10 million are adjudicated by the Accounting Officer as required by the

policy.

Due to a limited number of established previously disadvantaged entrepreneurs in

the municipal jurisdiction services and goods are sometimes procured from service

providers outside the municipal area. The number of entrepreneurs in general is

limited due to the size of the municipality and this often results in one or two

suppliers available to provide a service or an item. This then results in deviations

from the policy.

2.10 BY-LAWS

All By -laws, regulations and resolutions applicable in the respective areas of the disestablished municipalities immediately prior to the effective date, continue to apply in such areas from the effective date, subject to any amendment or repeal by the Council of the new municipality. (Section 12 Notice)

AMENDMENT OR REPEAL BY THE COUNCIL OF THE NEW

MUNICIPALITY

2.11 Website

Walter Sisulu Local Municipality has developed a new website for the entity. The

website is a channel used for information dissemination and to ensure access to

information by the public as prescribed by the Promotion of Access to Information

Act (PAIA) of 2000. The site is updated regularly with vacancies, municipal news,

events, tenders, Service Level Agreements, as well as other legislated documents

such as monthly, quarterly and annual reports, performance agreements,

Integrated Development Plan, etc.

2.12 PUBLIC SATISFACTION ON MUNICIPAL SERVICES

The municipality performs Customer Satisfaction Surveys once per annum, as well as

conducts environmental scans bi-annually to assess the community’s satisfaction with

the municipality’s service delivery performance. The platforms below are also


available for the public to contribute their inputs on their satisfaction, or lack thereof,

pertaining to the municipality’s service delivery.

(a) Suggestion boxes

A suggestion box can be found in each of the municipal offices - Jamestown, Aliwal

North, Burgersdorp, Steynsburg and Venterstad. The Municipality has developed a

functional website where people are encouraged to submit their complaints,

suggestions and compliments on the performance of the municipality and on service

delivery. The suggestion boxes are cleared on a frequent basis and

suggestion/comments/ complaints escalated to the relevant Directorates for attention.

(b) Social Media

The Municipality has active social media platforms: Facebook, Twitter, Instagram and

YouTube used to engage with the public, as well as to manage complaints raised on

a daily basis by the community. The social media platform predominantly used for the

purpose of Complaints Management is the Municipality’s Facebook page. The page

is checked daily (weekdays) for complaints and all posted reports are escalated to the

relevant department for attendance.

In the 2016/17 financial year the municipality has done well to address issues raised

by the public, having experienced only on public demonstration which was addressed.


CHAPTER3 – SERVICE DELIVERY PERFORMANCE

COMPONENT A: BASIC SERVICES

3 WATER SERVICES

3.9.1 PROVISION STRATEGY

The Joe Gqabi District Council is responsible for water services within the Municipality.

3.10 WASTE WATER (SANITATION) PROVISION

The Joe Gqabi District Council is responsible for water services within the

Municipality.

3.11 ELECTRICITY


The Municipality should provide electricity to its community for the following

consumers as one of the requirements of the Constitution of South Africa to deliver

basic services to its Industrial consumers, Commercial consumers and households

within the municipal area of jurisdiction. The municipality has a role of maintaining a

sustainable supply and quality of electricity for its community in a healthy and safe way

without endangering the lives of those who consume it.


Service Objectives Outline Service Targets

Year 1 Year 2

Target

Service Indicators Target Actual Current

year *Followin

g Year

Eradicate current backlogs and improved access to municipal services

Ratio of street lights maintained

1:01 streetlights maintained

1:01 streetlights maintained

Percentage of

daily

disconnections

executed

100% Disconnections performed

100% Disconnections performed

Percentage

reconnections

executed

100% reconnections performed

100% reconnections performed

Percentage

faults attended

to within 24

hours of

reporting

100% faults attended to within 24 hour

100% faults attended to within 24 hour

Eradicate current backlogs and improved access to municipal services

Number of

application

forms for

funding

submitted to

DOE for

electricity

1 application

forms for

funding

submitted to

DOE

1 application

forms for

funding

submitted to

DOE

The percentage

of households

with access to

basic levels of

electricity

100%

households

with access

to basic

levels of

electricity

100%

households

with access

to basic

levels of

electricity


As a municipality, we must ensure that requirements for availability of supply based

on the individual household load growth, developments around and inside the

municipal area are met.

We have to do feasibility studies in assessing the electricity needs in our area so that

the Electricity Master Plan could be drawn up, this was undertook by the appointed

professional service provider. The consultants had to compile the Master plan to meet

the electricity needs of the Walter Sisulu community reflecting the following on their

reports:

To enhance electricity service delivery, we have changed 100% of electricity meters

that were found and reported to be faulty, meter audits were carried out on an ongoing

process and faulty meters were removed. Faulty kiosks and/or distribution boxes that

are the main connection between the municipal network and the customer, are

repaired and kept locked to prevent vandalism or interruption of supply to consumers.

Network maintenance is carried out as per the monthly planners derived and prepared

from the inspections carried out on the network.

To enhance revenue collection 66 consumers were disconnected for non-payment of

Municipal Services and 90 has been reconnected for services.

Houses that are registered on the institutions Indigent register receive the free 50kW

of electricity per month and all the repairs and maintenance done on their electricity

dispensers or faults are then claimed from the equitable share.

Part of our role in electricity service delivery, is to ensure that there is sufficient public

lighting to prevent /minimize crime activities in and around our residential and business

areas. Street light maintenance are been done daily within the municipality through a

daily report system and site inspections.

The electrical losses for 2016/17 financial year are recorded at 37%. The department

has since employed serious measures to ensure substantial reduction. Meter audits


were being performed on monthly bases to minimize electrical losses and fines were

issued to defaulters for tampering.


Indicator name Total number of household/customer expected to benefit

Estimated backlogs (actual numbers)

Target set for the f. year under review (actual numbers)

Number of HH/customer reached during the FY

Percentage of achievement during the year

Percentage of households with access to electricity services = 87%

21874

2340

100%

19030

87%

Percentage of indigent households with access to basic electricity services = 79%

10000 0

100%

9109

91%

Percentage of indigent households with access to free alternative energy sources = 8.2%

440 0 0 0 0


3.12 WASTE MANAGEMENT (THIS SECTION TO INCLUDE REFUSE

COLLECTIONS, WASTE DISPOSAL, STREET CLEANING &

RECYCLING)

Walter Sisulu Local Municipality appreciates the National Waste Act, 56 of 2008 by

ensuring that its integrated waste management services do not only provide basic

refuse removal, but also augment economic activity and empower communities to

understand the value of waste management, and thus minimize the effects of waste on

human and environmental health under stringent conditions. The municipality is

committed to encourage avoidance, reduction, reuse, recycling processing and

treatment of waste through the public outreaches it conducted during 2016/17 financial

year.


Waste management is one of the primary functions of the municipality. The municipality

facilitates the reduction, reuse and disposal of waste. The municipality has 5 landfill

sites of two that are fully operational in both Steynsburg and Jamestown and the three

on the verged being closed. The Landfill Site Supervisor is responsible for all landfill

sites within the municipal area. A private security company provides security services

to Aliwal North and Jamestown landfill sites to ensure access control, recording the

vehicles that enter the site and the type of refuse carried by the vehicles and safety of

landfill site users. Other role players in waste management are the Maletswai Waste

and Recycling Cooperative, Joe Gqabi District Municipality, Department of

Environmental Affairs, the Department of Public Works and the department of Human

Settlements.

Walter Sisulu Local Municipality being the district’s economic powerhouse is the most

densely populated area in the district. Due to increased population growth and urban

development there is an increase in demand for waste services. This increased

population resulted [in] increased domestic waste. The waste removal occurs at a very

high rate. The Municipality has two refuse removal trucks of which one is not

operational, six tractors of which one has been out of commission for a year, one truck

and a front end loader for ensuring proper waste management services.


MEASURES TO IMPROVE WASTE MANAGEMENT PERFORMANCE

3.12.1.1 REFUSE COLLECTION:

Includes collection of refuse from households once a week, collections from communal

skip bins in informal settlements once a week and collection from businesses are done

on regular (between a period of three to six days in a week). The Municipality has a

weekly programme which is communicated to consumers annually, the programme

indicated the days and times at which refuse was to be removed at a particular

settlement. The household refuse removal included domestic and garden refuse. The

domestic refuse was collected using one truck in Aliwal North, one tracktor and a truck

in Jamestown, one tracktor in Burgersdorp, Venterstad and steynsburg respectively

and the garden refuse was collected using the tractors. This service was accessible to

all households including informal settlements.

The refuse collected was partially seperated at source as businesses and some

households seperated recycliable from non recyclable material at source. The

recyclable material was collected by recyclers. The recycling companies and

organizations collect recycling waste both from source and at the landfill sites

municipality did not have a programme of collecting recyclable material. The

municipality has established a Material Recovery Facility at the Aliwal North landfill site

and Buy Back Centre to ensure that separation of waste is fully realized. The facility is

manage by Maletswai Recycling Cooperatives. The recycling efforts will ensure that

the lifespan of the landfill site is lengthened.

Public Education: The Municipality conducts daily public education programmes using

internal staff, pick it up staff and EPWP staff recruited through the Greening and

Beautification of Towns Project which is funded allocated by DEDEA.

Law enforcement: Ten Peace Officers were trained by the erstwhile Maletswai

Municipality to enforce the Waste Management By- laws, however some Peace

Officers contracts were terminated subsequent to the completion of the project that

was funded by DEDEA. Warnings were issued as well as fines as corrective measures.


3.12.1.2 WASTE DISPOSAL:

The Aliwal North, Burgersdorp and Venterstad solid waste sites are not fully

compliant with either its applicable permit conditions or national legislation or

both, e.g. the cells are filled with raw waste (not incinerated).

Challenges:

The Municipality pays a lot of money for paying a hired bulldozer for

compacting waste.

The Municipality does have compatible plant and equipment to maintain landfill

sites as required by the Integrated Waste Plan as a result the municipality pays

a lot of money in hiring a bulldozer for compacting waste

Cleaning of streets: Street cleaning is done in the Central Business District streets,

daily including week ends and in the residential areas streets were cleaned during

week. The key service delivery priorities were public education on waste management

and mitigation of illegal dumping.

Description 2016/17

Actual No

Solid waste removal (minimum level) 19 534

Remove at least once a week 19 534

Minimum Service level and above sub- total 89%

Minimum Service Level and above percentage 0

Solid waste Removal (Below minimum level) 0

Removed less frequently than once a week 0


Service Delivery Levels and standards

The majority of citizens have access to refuse removal and this includes the 2340

informal settlements. The municipality provides skip bins as receptacle points for

refuse. In all formal settlements, high level waste management service is rendered

through refuse removal once a week in residences and in businesses in line with refuse

collection programme. The municipality set itself a target of 90% weekly door to door

refuses collection.

Annual performance as per key performance indicators in waste management

services

Indicator

name

Total number of

household/cust

omer expected

to benefit

Estimated

backlogs

(actual

numbers)

Target set

for the

financial

year under

review

Number of

HH/customer

reached

Percentage

of

achievement

during the

year

Percentage

of

households

with access

to refuse

removal

services

21874 2340 89% 19534 89%

Using communal refuse dump

Other rubbish disposal 0

No rubbish disposal 0

Total number of households 19534


3.13 HOUSING

INTRODUCTION TO HOUSING


The role of Walter Sisulu Local Municipality with regard to housing delivery is to:

a) Ensure that inhabitants of its area of jurisdiction have access to adequate

housing.

b) Ensure that services in respect of water, sanitation, electricity, roads, storm

water drainage and transport are provided in a manner which is economically

efficient;

c) Identify and designate land for housing development

d) Initiate, plan, coordinate, facilitate, promote and enable appropriate housing

development in its area of jurisdiction through:

Beneficiary identification

Completion of housing application forms

Beneficiary verification

Sign off happy letters

Hand over completed houses to rightful beneficiaries

e) Provide bulk engineering services, and revenue generating services in so far

as such services are not provided by specialist utility suppliers

f) Plans and manage land use and development.


3.5.2 MEASURES TO IMPROVE HOUSING PROVISION PERFORMANCE

Civil society organizations such as NGO’s, labour unions, employer organizations and

business organizations play a prominent role.

PROJECTS ON THE BUSINESS PLAN

Dukathole 172 (45 Units)

Dukathole 172(8 Military Veterans Units)

Dukathole 140 (Accruals & Retention)

Hilton 94 Housing Project (59 Services & Units)

Mzamohle 2 Units

Burgersdorp 130(123)

JGDM Disaster (12 + 20) = 22 UNITS

Gariep 50 (20 Destitute)

Steynsburg 530 (Ceiling & Electricity – 200 Units)

Dukathole 188 Phase 2 (57 Units)

Jamestown 250 (Planning Activities)

Dukathole 743 (Title Deeds)

Joe Gqabi 1087 Rectification (52 Units)

Venterstad 500 (69 Units)

Burgersdorp 955 (15 Units)

CHALLENGES IN CURRENT HOUSING PROJECTS

• Beneficiary administration on previous rectification projects which now on

IRDP instrument.

• Beneficiary nomination conflict issues

Electrical infrastructure to:

• Burgersdorp 30 Destitute

• Dukathole 140, 172 and Hilton 94.


3.14 FREE BASIC SERVICE AND INDIGENT SUPPORT

As part of its overall strategy to alleviate poverty in South Africa the government has

put in place a policy for the provision of a free basic level of municipal services.

Electricity has been prioritized as a free basic service for the poor. In realising this

principle, the National Indigent Policy Guidelines determines that municipalities must

provide free basic services to the indigent people in a sustainable manner.

The following are classified as free basic services to poor households, per month:-

Free basic electricity - 50 kilowatts electricity for grid-based h/holds;

Subsidy amount of R 146.39 for refuse removal

Removal - DEDEA committed to grant subsidies to all indigent household for

refuse removal;

In compliance with the prescribed policy the municipality is providing free or subsidized

basic service for many households who would normally struggle to pay their

accounts.There is an Indigent Policy were qualifying applicants must register for FBS

at the municipality or with their designated councillors (ward councillors). After lodging

the application it will be assessed and approved. An income declaration or proof of

registration as an unemployed person, support the indigent application.

The table hereunder gives a reflection of the number of qualifying poor households over

the past year and the actual financial implication.

Description

No H/H 2016/17

Equitable Share Equitable Share

Print

Refuse removal 8920 5 846 338 4295 728

Electricity 7233 4 163 464 4 732 097

A free Basic service in terms of electrical supply is still a challenge to those receiving electricity in the commercial farming and rural areas.


COMPONENT B: ROAD TRANSPORT

3.15 ROADS

Access Roads are maintained by the municipality in terms of the Municipal Structures

Act 117 of 1998; however there is a significant challenge around capacity, knowledge,

resources and magnitude of the backlogs for them to effectively implement such

service.

Within the technical services department there is a division called PWD (Public Works

Division) 100% focusing on roads maintenance and storm water maintenance. Key

function of this division is continuous patching the potholes from all the tar roads in the

Municipal Jurisdiction.

The Municipality continue with the maintenance streets and 111 potholes were filled,

9km of Stormwater channels cleaned and 26km roads were graveled.

Service Objectives Outline Service Targets

Year 1 Year 2

Service Indicators Target Actual Target actual

Eradicate backlog in order to improve access to services and ensure proper operations and maintenance.

Square meters potholes filled

6 potholes filled 111

Kilometers of

graveled roads

maintained

50km graveled roads maintained 27km

Kilometers of

Stormwater

channels

maintained

32km Stormwater channels maintained 9km


3.15.1 LEVEL AND STANDARDS IN ROAD MAINTENANCE

SERVICES

The service level standard is regarded as high in Walter Sisulu Local Municipality; all

the communities have access to roads facilities. The Walter Sisulu Municipality

through MIG funding has embarked on the programme to upgrade all major routes to

surfaced roads as opposed to gravel roads.

3.15.2 ANNUAL PERFORMANCE AS PER KEY

PERFORMANCE INDICATORS IN ROAD MAINTENANCE

SERVICES

Indicator name Total number of household/customer expected to benefit

Estimated backlogs (actual numbers)

Target set for the f. year under review (Actual numbers)

Number of HH/customer reached during the FY

Percentage of achievement during the year

Percentage of households without access to gravel or graded roads = 0%

0

0

0

0

0

Percentage of road infrastructure requiring upgrade = 60%

13 124

150km

50km

27km

54%

Percentage of planned new road infrastructure actually constructed = 100%

0 0 0 0 0 %

Percentage of capital budget reserved for road upgrading and maintenance effectively used. = 100%

0 0 0 0 0


3.16 TRANSPORT (INCLUDING VEHICLE LICENSING & PUBLIC BUS

OPERATION)

3.16.1 PUBLIC TRANSPORT FACILITIES

Taxi facilities have been constructed in the Central Business District (Aliwal North).

However, there is a need for the sanitation facilities to be improved at the taxi rank and

the municipality is seriously planning to redress that.

3.16.2 RAILWAY SERVICES

The weekly railway transport passenger service between Johannesburg and the

Western Cape is accessible in Burgersdorp [60km from Aliwal North]. Additionally the

high poverty levels in Aliwal North, limits the benefits as many residents cannot afford

the commuting costs to Burgersdorp. It is believed that if the use of the line between

Burgersdorp, Aliwal North through to Barkly East could be reinstated it could boost the

tourism trade, by creating a direct transport link between the Western Cape and

Johannesburg commuters. If effectively maintained, managed and marketed it will

stimulate local economic development, not only in Walter Sisulu but in the whole district

area.

3.16.3 ROAD WORTHINESS AND LICENSING

The municipality has a Vehicle Testing Station in Aliwal North, Burgersdorp which

provides a road worthy and vehicle licensing service. Furthermore, the municipality has

13 fulltime traffic officers i.e. 2 Vehicle examiners, 4 Drivers Licence Examiners, 7 Traffic

Officers, 2 Learners Licence Examiner, 2 Management Representatives and 1 Chief

Traffic Officer and 1 Superintended (some of the staff is multi- skilled and therefore

perform other duties as per the instruction of the Director). Moves are afoot to enhance

the performance levels of the staff as it has demonstrated an ability to augment

municipal revenue. This service is done by the municipality on agency basis.


3.17 WASTE WATER (STORMWATER DRAINAGE)

The Walter Municipality road maintenance strategy is improving gradually. Since the

Municipality purchased plant (i.e. grader, TLB and tipper truck) the road maintenance

programme has improved, the road maintenance programme comprises of storm

water maintenance.

Within the technical services department there is a division called PWD (Public Works

Division) 100% focusing on roads maintenance and storm water maintenance. Key

function of this division amongst other function is to ensure that water surface run off

is channeled to appropriate storm water so that road surface is not damaged or doesn’t

deteriorate at an abnormal rate.

Dedicated number of employees within the Public Works division is 100% focusing on

storm water maintenance especially after the resealing of street budget was exhausted

all personnel in the resealing was put to storm water maintenance team. As a result

about 9km of storm water was cleaned, with storm water catch pits cleaned as well.

The intervention is done on an ongoing basis where flooding occurs during heavy rain

falls.

COMPONENT C: PLANNING AND DEVELOPMENT

3.18 PLANNING

3.10.1 PLANNING STRATEGIES

The Municipality is responsible for the provision of housing and town planning

services. It contracts the services of Town Planning Consultants to provide layout

plans for new residential areas and for other land use needs such as commercial,

industrial, institutional, recreational and tourism.

3.10.2 MEASURES TO IMPROVE PLANNING PERFOMANCE


Moreover, the municipality is in the process of reviewing the spatial development

framework plan to keep in line with changing circumstances. All town planning will be

done within the confines of the framework plan.

The following applications were processed for land use changes:

Rezoning 7

Sub-division 5

Consent use 2

Departures 7

Township establishments (formalization of informal areas) 0


Annual performance as per key performance indicators in housing and town

planning services

Indicator name Total

number

of

househol

d/custom

er

expected

to benefit

Estim

ated

backl

ogs

(Actua

l

numb

ers)

Target

set for

the f.

year

under

review

Numb

er of

HH/cu

stome

r

reache

d

Percenta

ge of

achievem

ent

during

the year

Percentage of households living in

informal settlements

2340 2340 2340 2340 100%

Percentage of informal settlements that

have been provided with basic services

2340 2340 2340 2340 100%

Percentage of households in formal

housing that conforms to the minimum

building standards for residential

houses

19534 19534 19534 19534 100%


3.11 LOCAL ECONOMIC DEVELOPMENT

3.11.1 BRIEF PRESENTATION OF LED (LOCAL ECONOMIC

DEVELOPMENT) STRATEGY

Status on developing the LED strategy:

- Walter Sisulu Local Municipality, as a new municipal entity, has no Local

Economic Development Strategy.

Local Economic Development Unit:

- Walter Sisulu LM has a Local Economic Development Sub-Directorate is

located in the Institutional Planning and Economic Development in the Office of

the Municipal Manager. Currently there are 4 people in the LED Sub-

Directorate, namely: 2 x LED Coordinators, LED Officer and a Tourism Intern.

The availability of a LED expertise:

- The unit has limited expertise in local economic development practises

(expertise are aligned to the capacity and ability of a staff member – what he or

she can do in the practise).

LED stakeholder forum functionality (number of meetings held):

The amalgamation of the erstwhile Maletswai Local Municipality and Gariep Local

Municipality to establish the Walter Sisulu Local Municipality, had a negative effect of

the functionality of the LED Sub-Directorate.

We are now in the process of establishing the LED stakeholder foras to realign with

the new local municipality.

Funding opportunities of LED activities (indicative figures on Donors/funders

and types of programme):

Programme Donor Funding Jobs Created

Environment Protect & Infrastructure Programme

Department of Environmental Affairs (DEA)

R15-million 113

Environment Protect & Infrastructure Programme

Department of Environmental Affairs (DEA)

R5-million 60


Environmental and Town Beautification

Department of Economic Development, Environmental Affairs and Tourism (DEDEAT)

R1-million 32

Municipal Infrastructure Improvement

National Treasury (DORA Allocation)

R26-million 60

TOTAL: R47-MILLION 265

3.11.2 PROGRESS TOWARDS ACHIEVING THE LED KEY OBJECTIVE

Improve public and market confidence:

The Walter Sisulu Local Municipality has no consolidated Spatial Development

Framework (SDF), the two erstwhile municipalities had outdated SDFs. The process

is underway to start the development of a new SDF. As it is a case, the formulation of

the Spatial Development Framework is a legal requirement, in which, every

municipality must adhere to as part of the integrated development processes (refer to

section 26 Municipal Systems Act).

It is the principal instrument for forward planning and decision making on land

development in the entire municipal area. This framework identifies certain structuring

elements, such as nodal points, corridors to guide and inform future planning in

Maletswai. However, the current SDF requires a major overhaul and the municipality

is in the process of seeking funding to develop a new SDF in order to meet its current

developmental obligation.

Red tape reduction: (Turn-around time for licensing and other business related

services):

- Walter Sisulu LM is yet to streamline its policies to reduce red tape in service

delivery, a number of complaints have been received on the length of time ‘we’

take to process applications, payments, and other requirements.

Investments and trading by-laws:

Maletswai has no investment policy or by-laws. We have Street Trading and Liquor

Trading By-Laws; however the affected economic sectors (hawkers and liquor traders)


have identified these two (2) by-laws as making it difficult for them trade or operate in

order to maximise their profits and create more jobs.

The municipality has been commended for its steadfastness in enforcing the liquor

trading by-law, it is said crime has gone down, some businesses have closed down

and a number of jobs have been lost.

New by-laws are to be developed as part of the amalgamation processes and

establishing a new municipality.

Exploit comparative and competitive advantage for industrial activities.

Agriculture:

The main type of farming in Maletswai is stock farming, namely, sheep, goat and cattle

and there is limited crop farming (potatoes, maize, cabbage, onion, etc.) taking place.

This sector is very labour intensive and thus has created about +/- 1500 jobs

opportunities (through commercial farmers) and there are about 55 small scale

farmers operating from four (4) communal farms and others have leased from

established farmers. Tunnel farming has been identified as an opportunity for growth

in the agricultural sector and it is being piloted in Maletswai and is being practised at

a small scale and also the game farming is also seen to have greater opportunities of

growth for the area. The sector is facing a number of challenges that hampers effort

for development, namely: water shortage, poor infrastructure, stock theft, high costs

of productions, lack of start-up capitals and human capacity building.

An Agricultural Training Centre (Farmers Support Centre) is now complete and

operational; it is based in Aliwal North.

Manufacturing:

Production is mostly agro-processing such as maize meal, dairy products and juices

with the key manufacturing/processing companies.

Construction:

The construction sector is currently being driven by the demand for housing, office and

business space. The largest government projects in construction include the


construction of houses, upgrading government office space and infrastructure such as

the roads upgrades and maintenance. Here are the major projects taking place:

- Buffelspruit Nature Reserve Revitalisation

- Maletswai Composting Facility

- R58 upgrading and maintenance

- Provincial Government Office Complex (Phase 2) that commenced in the

2016/2017 FY

- Internal roads paving

- Water and Sanitation Infrastructure

- Low Cost Housing

- Middle to High Income housing development (private sector project)

- Improvement to the current Ikhala Public TVET College Somerset campus

- Construction of a new main campus for the Ikhala Public TVET College

- Construction of Juvenile Referral Facility in Burgersdorp.

Trade:

There are approximately 420 small and medium enterprises operating and majority

are retail businesses. The local trade sector has about 15% enterprises categorised

as formal businesses namely national chain/franchise businesses such as Pick ̀ n Pay,

Jet, Shoprite, Friendly Grocer, Spar, Lewis Store, Fruit & Veg, Wimpy, Steers, Spur

and others, this therefore means the local economy is largely driven by the small

business enterprises. A number of locally owned enterprises have expanded, local

business people invested in new ventures and thus creating a number of job

opportunities.

Aliwal North is the regional trade and business services centre (district economic hub)

and it also a service centre to small towns in Free State (Rouxville, Bethulie, Zastron,

Smithfield, Goedemoed and nearby farming communities).

Transportation and Communication:

The most commonly used mode of transport is taxis and it is estimated that 75% of

the total population uses taxis particularly between towns. The local taxi associations


are affiliates of UNCEDO Taxi Alliance, has 50 members who are registered operators

and there are 40 registered taxi operators. There are approximately 10 ‘illegal’ and

unregistered taxi operators. There are approximately 60 job opportunities created by

this industry. There are eight (13) fuel service station, six (6) of which are located in

Aliwal North, two (2) in Jamestown, three (3) in Burgersdorp, one (1) in Steynsburg

and one (1) in Venterstad – servicing the local and transient market.

Finance and Banking Services

There are 5 main fully fledged banking outlets, namely: ABSA, First National Bank,

Standard Bank, Capitec Bank and NEDBANK. There are about 11 registered micro-

lenders aligned to those banks and the African Bank and many illegal operators (Loan

Sharks).

.

The key market segments that the financial and business services in the area target

are public servants, farmers and agricultural workers, low income earners, elderly,

local businesses and the youth/student market.

Tourism:

There are approximately 90 tourism products operating and can be categorised as

follows: self-catering chalets, guest farms, guest houses, bed & breakfast, hotels,

lodges, restaurants, foods outlets and tea & gift shops, etc. The local industry can

cater for approximately 900 ‘quality’ beds and services (the highest in the district) and

accounts for about 180 permanent job opportunities. Not all establishments are graded

and not all are graded under the South African Tourism Grading Council, others are

graded by the AA Accommodation Services.

Enterprise support and business development:

Enterprise and business development support is not a mandate of the municipality

rather that of SEDA, ECDC and ECRDA, so most customers are referred to the three

(3) state owned entities. Some community members approach the LED Unit to assist

with the following services:

- Business Idea Generation (feasibility)

- Business Plan Evaluation


- Development of pre-business plan

- Business Advice (financial management, administration, business

administration, legalities, etc.)

- Business entity registration (advice on options)

- Tender advice

- Business profiling

Public and private partnerships established:

- None.

Number of new formal SMME established within the municipality:

- Refer to the Trade chapter above.

Number of new employment opportunities through Expanded Public Works

Programs and Public and Private Partnerships:

- There are about 265 jobs opportunities created through municipal driven EPWP

compliant projects.

Support Social Investment Program

- Number of active cooperatives = +/- 30

- Non-governmental Organisations = +/- 40

- Community based organisations = +/- 20

- Small Business Associations = +/- 6

- Women Associations = +/- 7

- Youth Associations = +/-10

Unemployment database: It is difficult to keep an up-to-date data base of the

unemployed, for when they are employed they don’t report. We rely on the database

of the Department of Labour and a list of unemployed people in each of the 6 wards

of which they are not a true picture; however the Census 2011 estimates that the

unemployment rate is at 25,2%.


MUNICIPAL LOCAL ECONOMIC DEVELOPMENT FRAMEWORK- (KPA 3)

Annual performance as per key performance indicators in LED

No. Indicator name Target set

for the

year

Achievement

level during

the year

(absolute

figure)

Achievement

percentage

during the

year

Percentage of LED

Budget spent on LED

related activities.

0% 0% 0%

Number of LED

stakeholder forum held

0 0 0

Percentage of SMME that

have benefited from a

SMME support program

20 20 100%

Number of job

opportunities created

through EPWP

200 265 133%

Number of job


through PPP

0 0 0

LED Strategy aligned to

the Provincial and

National LED

Strategy/Framework

developed

0 0 0

LED Strategy

Implementation Plan

developed and resourced

0 0 0


Number of municipal LED

Intergovernmental

platforms convened

0 0 0

Number of work


through CWP

400 400 100%

Number of job


through other municipal

initiatives such as

infrastructure projects etc.

0 0 0

Number of jobs created

through other government

initiatives

678 678 100%

Number of jobs created

through private/business

sector initiatives

N/A N/A N/A

Red – tape reduction

programme implemented

0 0 0

5 year investment

retention and attraction

strategy plan implemented

0 0 0

CHALLENGES REGARDING LED STRATEGY IMPLEMENTATION

CHALLENGES:

- Absence of the Walter Sisulu LM’s LED Strategy

- Internal financial resources

- Additional capacity (HR)

- Additional expertise (skills development and/or human resource

development).

- Technology (software to collate and analyse LED data)


- Internal understanding of Local Economic Development.

WHAT NEEDS TO BE DONE?

- Develop a new and comprehensive LED Strategy

- Availability of internal dedicated funding to support LED specific initiatives;

- Capacitating (human resources) the LED unit;

- Funding to acquire tools (software) useful for collating and analysing data

relevant to LED;

- Funding for training of communities, Councillors and officials on LED to

increase their understanding; and

- Additional capacity building for unit staff to improve performance.


COMPONENT D: COMMUNITY& SOCIAL SERVICES

3.12 LIBRARIES; ARCHIEVES; MUSEUMS; GALLERIES;

COMMUNITY FACILITIES; OTHER (THEATRES; ZOOS; ETC)

3.12.1 LIBRARIES

This service largely remains a competency of the province and the municipality

performs agency function. In Walter Sisulu Municipality, there are eight (8) libraries,

namely

1. Venterstad;

2. Steynsburg;

3. Burgersdorp;

4. Mzamomhle;

5. Martin Luther King Jnr

6. Eureka

7. Aliwal North and;

8. Jamestown.

Internet connection was installed in Jamestown and Aliwal North. However, there is a

consistent outcry from community members to have more libraries in the townships.

Library campaigns were conducted during the period under review.

3.12.2 MUSEUMS

The museums are privately run by volunteers. The Municipality contributed by

leasing out buildings at a nominal rate and regularly do maintenance of the building

premises when required.

3.12.3 ARCHIVES

The Registry Procedure Manual of council has been approved by the Department of

Sports, Recreation, Arts and Culture.

3.12.4 COMMUNITY HALLS

The municipality has a competence for amenities and community facilities like

halls. The community halls are used for different purposes by various organisations

to hold meetings, recreational programmes, private function and events and

community meetings. Whilst the aims and objectives of having community halls

owned by the municipality is to ensure that community functions are held in

descent public facilities which are accessible to all but these facilities remain


fiscally responsible so to recoup the running costs. So far, there has been the lack

of adequate funds to constantly maintain and offer security services to our

community halls. The municipality has in the recent past noted a high level of

vandalism to all community facilities, including community halls. As a result, the

state of our community halls is deteriorating at an alarming rate.

Two community halls’ roofs in Mzamomhle and Oviston respectively, have

collapsed and are now in disuse due to lack of funds on the part of council to

revamp them. Insurance claims were lodged with our insurers but the one for

Mzamomhle was declined on technical grounds whilst the one in Oviston is being

assessed. A technical assessment on the state of our community halls need to be

commissioned so to avert possible collapse due to lack of maintenance.

The community halls in Walter Sisulu Local Municipality area are listed below:-

Ward no Area based current status Need identified

Ward 1 Venterstad Revamping of the entire building

Nozizwe Hall Repairs fencing and general

maintenance of the building

Oviston Hall Fixing of the roof and revamping

the building on its entirety

Venterstad Sports Ground Hall Repairs and maintenance

Ward 2 Khayamnandi Community Hall Repairs and maintenance

Steynsburg Town Hall Repairs and maintenance

Ward 3 Masakhane Community Hall Revamping and extension of the

hall. The hall needs additional

chairs and tables

Ward 4 Mzamomhle Community Hall The roof was blown away by wind.

There an urgent need to repair the

hall to its original form

Ward 5 Thembisa Community Hall Implementation of phase two

which includes expanding and

fitting of curtains and air

conditioning

Eureka Community Hall Hall is severely vandalized and

needs revamping

Ward 7 Greenslade Community Hall The hall needs revamping,

additional chairs and tables

Mzingisi Bilisho Community Hall The hall needs revamping and

additional chairs and tables


Ward 8 Joe Slovo Community Hall Additional Chairs needed

Ward 9 Hilton Community Hall The hall requires revamping,

maintenance of the fence and

require additional chairs and

tables.

Ward 10 Joe Gqabi Community Hall The hall requires minor revamping

and maintenance of the toilets,

additional chairs and tables.

Ward 11 Burgersdorp Rugby Hall The hall requires minor

revamping, installation of air

conditioning facility, curtains fitting

and ceiling fitting

Service Objectives

Outline Service Targets

Year 1 Year 2

Service Indicators Target Actual Target Actual

Eradicate backlogs in order to improve access to services and ensure proper operations and maintenance

Percentage increase of membership at municipal libraries

18%


3.13 CEMETORIES AND CREMATORIUMS

INTRODUCTION TO CEMETORIES & CREMATORIUMS

The Municipality has a total of 20 cemeteries and 5 of these cemeteries are in

operstion. Two cemeteries, are still fearly new, namely Jamestown and Aliwal

North. The other cemeteries in Burgersdorp, Steynsburg and Venterstad are

nearing closure. There is a need to prioritised the developement of new cemetey

site in all of the aforementioned towns. The Municipality has a functional

Electronic Cemetery Management System linked to Sebata FMS.

The challenge expeienced during the year under review was the fencing of the

cemeteries and theft of fencing to all of our cemeteries. There are simmering

illegal burials in some of our cemeteries and the absence of fulltime care takers

to our cemeteries exercibate the problem.

Crematorium

The Municipality has one Crematorium which is within a cemetery in Smith Street,

Aliwal North.

SERVICE STATISTICS FOR CEMETORIES & CREMATORIUMS

3.14 CHILD CARE; AGED CARE; SOCIAL PROGRAMMES

The Department of Social Development is energetic in the municipal area. They

provide the following services:

Treatment and prevention of substance abuse through educational

programmes, rehabilitation and home based interventions

Care of older persons within residential care-Old Age Homes.

Crime prevention and support to children and youth at risk /in trouble with

the law and adult offenders.

Promote socio –economic empowerment and integration programmes of

people with disabilities.

Child care and protective services


Pre - school

Victim empowerment that facilitate reduction of gender disparities and

incidents of domestic violence.

HIV and AIDS programmes to care and support infected and affected

individuals, groups and families.

Sustainable livelihood programmes looking at poverty reduction among

poor households through food security, income generation and women and

youth. Programmes

Community capacity building through capacitating NPO’s.

Service Objectives

Outline Service Targets

Year 1 Year 2

Service Indicators Target Actual Target Actual

Promote a culture of participatory and good governance.

Number of Special Programmes coordinated 1 0

Contribute to the fight against HIV/ Aids

Number of

Local Aids

Council (LAC)

meetings

convened 4 0

COMPONENT E: ENVIRONMENTALPROTECTION

3.15 POLLUTION CONTROL

The Municipality collects refuse once a week from households. Business refuse

is collected on a regular basis in line with the refuse collection programme for

busineees. Special colllection is performed upon special requests. The

Municipality had an EPWP programme for removal of illegal dumpings, where a

group of unemployed individuals were employed on contract to remove illegal

dumpings. Public education outreaches were conducted to educate


communities on waste management. The appointed and trained Municipal

Peace Officers enforced the bylaws, warnings were issued to individuals who

dumped illegally. The District Municipality monitored illegal dumpings as well as

dilapidated buildings and submitted weekly reports to the municipality.

3.16 BIO-DIVERSITY; LANDSCAPE (INCL. OPEN SPACES); AND

OTHER (EG. COASTAL PROTECTION)

Areas of biodiversity conservation are indicated on the illustration (below), including

natural landscape, cultivated lands and plantations. A large portion of Walter Sisulu

Municipality has near natural landscape.

The municipality has the following environmental opportunities:

Scenic beauty of the area;

Areas for prioritized intervention;

Increased land care;

Increased awareness around better land management practices (especially in

agriculture and urban management);

Reduction in the number of sewerage spills;

Reduction in the number of uncontrolled waste management sites;

Improved disaster management systems;

Increased investment in environmental protection and conservation; and

Infrastructure maintenance especially roads should correlate to the climatic and

topographic conditions of the area.


COMPONENT F: HEALTH

3.17 CLINICS

There are [also] ten clinics in Burgersdorp, Steynsburg, Eureka, Mzamomhle,

Nozizwe, Khayamnandi, Maletswai Clinic, Block H clinic and Hilton Clinic and one

in Jamestown. In addition, there are two Home Base Care Centres in Aliwal North

and one in Jamestown. The priority health programmes are HIV and AIDS, TB and

mother and child services. There are community based initiatives aimed at

prevention of disease and promotion of healthy lifestyles. The district area is

implementing the 5 priority health promotion campaigns of nutrition, substance

abuse, tobacco, use of healthy environments and risks.

In view of the above, primary health care service are the function of the Provincial

Department of Health. This has then resulted in all clinics in Walter Sisulu being

taken over by the provincial department.

3.18 AMBULANCE SERVICES

The ambulance services were available within the District and were under the

jurisdiction of the Eastern Cape Department of Health. The Municipality had as

and when necessary invited the leadership of the emergency services to make

presentations on services offered and mode of operation.

3.19 INSPECTION; FOOD AND ABBATOIR LICENSING AND

INSPECTION

The inspection of food and abattoirs is the competency of the District Municipality

because it had Environmental Health Practitioners and no negative reports

weresubmitted concerning the functioning of the abattoir.

3.20 HEALTH INSPECTION; FOOD AND ABBATOIR LICENSING

AND INSPECTION; ETC

In terms of the powers and functions set out, Environmental Health Services is a function

of the District Municipality. The focus is on issuing business licences, overgrown erven,


enforcement of the national legislation regarding smoking in public places and any

environmental health projects.

COMPONENT G: SECURITYAND SAFETY

3.21 POLICE

There are six fully staffed and capacitated police stations in municipal area. The

crime rate is relatively low especiallly in contrast to other places in the province.

This in part is cotnributed by the efficient enforcement of municipal by-laws by

SAPS and municipal Peace Officers. The working relations between the SAPS

and municipality is very sound. The provincial Department of Safety and Laison

plays an active role in assessing the effectiveness of Policing in municipal area.

The municipality is also an active member of that drives the Community Safety

Forum which plays oversight over the SAPS members.

3.22 FIRE

The Joe Gqabi District Municipality operates a fire control unit in Walter Sisulu

Municipality. The Municipality work together with the District Municipality

whenever fire occurs.

3.23 OTHER (DISASTER MANAGEMENT, ANIMAL LICENCING

AND CONTROL, CONTROL OF PUBLIC NUISANCES AND

OTHER)

There were no disasters that were declared during this period. The control of public

nuisance was implemented in line with the Bylaw.

COMPONENT H: SPORT AND RECREATION TRANSPORT

3.24 SPORT AND RECREATION

The portion of the MIG funding for 2016/17 was partly used for the development of

SA Moorosi stadium.


COMPONENT I: CORPARATE POLICY OFFICES AND OTHER

SERVICES

3.25 EXECUTIVE AND COUNCIL

Subsequent to its election in August 2016, the Council established its 79 Committees

including the Municipal Public Accounts Committee with a view to strengthening its

oversight role over the performance of the Administration. The IDP and Budget

process plan for 2016/17 financial year was approved and its implementation is being

monitored and report thereon discussed by the budget steering committee chaired by

the Mayor.

Monitoring of capital projects was improved by ensuring that councilors formed part of

the project steering committees and that MPAC pays site visits to the projects and

compile report on the findings.

The council received monthly budget statements, implementation of the Supply Chain

Management Reports, debt collection, implementation of council’s resolution and

SDBIP reports at the ordinary council meetings. These reports were interrogated and

appropriate recommendations made to the relevant standing committee and or

administration for implementation.

As a way of improving public participation in the affairs of the municipality, the council

facilitated the election of the ward committees by various ward-based stakeholders,

developed a policy to regulate their functioning and appointed ward co-coordinators to

assist the ward councilor in ensuring effective functioning of the ward committees

The draft and final IDPs and Budgets for 2016/17 financial year were adopted within

the prescribed statutory time frame after consultation with communities through public

participation programmes and issuance of public invitation through the print media.

This was allowed by the approval of the SDBIP and signing of the performance

agreements of the section 56 Managers and Municipal Manager.

The Annual report and MPAC reports on the Annual report were adopted and made

public in accordance with the relevant statutory prescripts.


3.26 FINANCIAL SERVICES

The financial services department has a mandate of improving the financial viability of

the municipality by ensuring that all services rendered are accurately billed and

collected timely. One of its main objectives is to ensure that expenditure incurred is

within the budget and all suppliers are paid within the prescribed timeframe. Its overall

responsibility is to ensure that all internal controls are operating effectively throughout

the year and ultimately enable a proper recording system that will result in a clean

audit report.

Top three service delivery priorities are as follows:

Expand and protect municipal revenue base;

Compliance with prescribed legislative framework and accounting standards;

Ensure efficient, effective and economical monetary management for a

healthy financial position;

Manage, control and maintain all municipal assets;

Reduce red-tape;

Maintain and update the current financial management system;

Provide effective and efficient ICT services

3.27 FINANCIAL PERFORMANCE 2016/17: FINANCIAL

SERVICES

Please refer to Appendix T for details of all departmental performances including the expenditure breakdown.

3.28 HUMAN RESOURCE SERVICES

The human resource policies provide the municipality with a mechanism to manage

risk by staying up to date with current trends in employment standards and legislation.

The policies are framed in a manner that the municipality’s vision and the human

resource helping the municipality to achieve it or work towards it are at all levels

benefited and at the same time not deviated from their main objective.

http://en.wikipedia.org/wiki/Risk


3.29 INFORMATION AND COMMUNICATION TECHNOLOGY (ICT)

SERVICES

According to the 2011 census more than 80% of the population have access either to a

private telephone or one nearby but there is still a section of the population that has no

access to a telephone. Urban areas receive the best service. Parts of the commercial

farming areas and rural areas are provided with telephone services based on radio

linkages to towers, driven by solar panel technology. The reliability of this service is

sometimes a problem as spares are not always available, there is market for the solar

panels resulting in theft, the service cannot effectively cope with Internet, and it is

affected by weather conditions (especially cold). It must be noted that most communities

(99%) have access to telecommunication either in the form of land lines, public phones

or cell phones.

3.30 ANNUAL PERFOMANCE REPORT 2016/17

An attempt has been made to comply with legislative prescripts in terms of the

structure and content of the report. The report has covered the actual performance of

the municipality in the prior year, targets and actual performance for the year under

review. The reasons have been provided where there has been a deviation from the

target.

In order to ensure alignment with the Integrated Development Plan, the strategic

objectives as encapsulated in the IDP have been imported to the Annual Performance

Report. An attempt has also been made to ensure alignment with the SDBIP by

reporting against all targets determined therein.


Municipal Manager's quality certification

QUALITY CERTIFICATE

I, Z Nongene, the Acting Municipal Manager of Walter Sisulu Local Municipality,

hereby certify that the Annual Performance Report for the year ended 30 June 2016/17

has been prepared in accordance with the Municipal Systems Act, Act 32 of 2000 and

Regulations made under that Act.

Print Name Zolile Nongene

Acting Municipal Manager of Walter Sisulu Local Municipality (EC145)

Signature ____________

Date ____________


CHAPTER 4 – ORGANISATIONAL DEVELOPMENT PERFORMANCE

The municipal manager and s56 managers have signed the performance agreements as prescribe by law. The municipal and

departmental SDBIP`s, which are reported on a quarterly basis to the council serves the purpose of evaluating whether or not the

municipality was meeting its targets.

ANNUAL PERFORMANCE REPORT 2016/17

MUNICIPAL TRANSFORMATION AND INSTITUTIONAL DEVELOPMENT

IDP OBJECTIVE

Refe

ren

ce

Nu

mb

er Indicator Annual Target

2016/2017

Quarter Actual

2016/17

Sn

ap

sh

ot

Ass

ess

me

nt

Reason for variance

Remedial Action

Comments

Build and enhance the

human resource capacity of the

municipality

MT

12

Number of organograms approved by Council

1 0

The transitional period occasioned by the merger affected the smooth management and monitoring of targets.

Management will ensure that targets are achieved as planned.


MT

05

-1 Number of

Workplace Skills Plan (WSP) submitted to LGSETA

1 1

MT

01

Percentage of a municipality's budget actually spent on implementing its workplace skills plan.

70% 70%

MT

07

-02

The number of people from employment equity target groups employed in the three highest levels of management in compliance with a municipality's approved employment equity plan.

5 0

The municipality don’t have an EEP in place as the organogram is still not in place.

Approval of the draft Organogram by Council.


Build human resource capacity for institutional and community development by 2017

MT

07

-03

Number of Finance interns appointed

5 0

The municipality don’t have an EEP in place as the organogram is still not in place.

Approval of the draft Organogram by Council.


MT

05

-2

Number of Councillors trained

22 22

MT

15

Number of staff trained as per WSP

48 48


MT

10

-1

Number of Ward Committee members trained

110 110

MT

10

-7

Number of Annual Reports tabled before Council

1 1

MT

10

-6

Number of IDP's submitted to council

1 1

Improve organizational

MT

05

-1

Number of staff workshops on

2 2


cohesion and effectiveness

Human Resource Policies

Improve organizational cohesion and effectiveness

MT

13

Number of policies submitted to Council for approval.

11 22


MT

14

Number of existing policies reviewed and submitted to Council

11 24

Build an efficient, effective, accountable and responsive local government system by 2017

MT

16

Number of Occupational Health and Safety committee meetings held

4 0

The transitional period occasioned by the merger affected the smooth management and monitoring of the targets.



MT

17

Number of standing committee

11 5

Standing Committee meetings clashed with

Members will be urged to adhere to


meetings held per directorate

other Council programmes.

the year planner.


MT

18

Number of EXCO meetings held

11 4

The structure were developed very late in the financial year and all the meetings could not be held.

Strict adherence to the calendar events implemented in the next financial year.

Ensure effective and efficient governance

MT

12

Number of draft Municipal by-laws approved by Council

22 0



KPA 2: INFRASTRUCTURE AND BASIC SERVICE DELIVERY


Eradicate current infrastructure backlogs and improve access to municipal services

S

D08

-1

Number of traffic fines issued

1800 898



SD

05

-2

Number illegal waste sites beautified

10 10

SD

05

-2

Percentage households with access to basic level of solid waste removal

90% 89%

Council do not remove waste from the farming communities hence the shortfall.

The target will be reviewed in order to align it with the relevant area where solid waste is removed

Eradicate backlogs in order to improve access to services and

SD

07

-3 Number of

Service level Agreement signed with the

1 1


ensure proper operations and maintenance

DSRAC for library services


SD

01

2-2

Square Meters of potholes filled

10 33

SD

01

1-5

Ratio of street lights maintained

1:01 1:01

SD

06

-3 Percentage of

monthly disconnections received and performed

100% 100%

SD

06

-4 Percentage of

monthly reconnections received and performed

100% 100%

Eradicate current infrastructure backlogs and improve access S

D01

-01 Number of

application forms for funding submitted to the DOE for the

1 1


to municipal services

Electricity Master Plan

SD

01

1-6

Percentage of electrical faults attended within 24 hours of reporting

100% 98%

Eradicate current infrastructure backlogs and improve access to municipal services S

D01

2-3

Kilometers of gravel roads maintained

50km 40km

The breaking down of the vehicle`s hampered with the effective execution of the target

The bladed for the grader has been ordered in order to speed up service delivery.

SD

01

2-4

Kilometers of storm water channels maintained

32km 17.4km

Non – availability of pre – cast pies

The pipes have been ordered.

Eradicate current infrastructure backlogs and improve access

SD

01

1-1

4 The percentage

of households with access to basic level of electricity

96% 87%

There are areas that are not yet formalized.

The survey and formalization on the effected will assist to


to municipal services

install electricity.

SD

01

3-2

Percentage of a municipality’s capital budget actually spent on capital projects identified for a particular financial year in terms of the municipality’s integrated development plan

100% 100%


SD

06

-4 Number of Spatial

Development Frameworks reviewed and submitted to Council

1 0

No placement of staff

Speeding up of the placement process

SD

06

-2

Number of cemeteries maintained

2 2

Improve financial management in the municipality S

D01

1-1

Percentage reduction in electricity loss

18% 32%

KPA 3: LOCAL ECONOMIC DEVELOPMENT


To coordinate mechanisms for creating job opportunities

LE

D0

3

Number of job opportunities (full-time equivalent as per EPWP standards) created through municipal linked infrastructure projects.

200 235

Coordinate small business access to financial and non-financial services

LE

D0

5 Number of

tourism marketing initiatives undertaken

1 1

Compliance with prescribed legislative framework and accounting standard (legislative requirements of the MFMA): compliance with Supply Chain Management Policy and regulations

LE

D 0

6

Number of informal small enterprises formalized (registered with CIPC)

10 10



LE

D 0

5

Number of Tourism Establishments databases maintained

4 4

KPA4: FINANCIAL VIABILITY AND MANAGEMENT

Improve financial management in the municipality

FM

01

-43

Cost coverage ratio

1 month 90 days

Financial cash flow challenges are hampering the ability to adequate cash to cover for cost for a period in excess of one month.



LE

D 0

4

Percentage of SMME's benefitting from the municipal Supply Chain Processes

70% 70%

Improve financial management in the municipality by 2017

FM

02

-1

Percentage of approved operating budget spent

100% 54%

Budget restrictions and inadequate cash flow have led to reduced spending.


FM

01

-8

Percentage of registered households earning less than R2500 per month with access to free basic services

100% 100%


FM

01

-48

Debt Coverage Ratio (Total Borrowings) (Output)

10% 3.5%


FM

04

-02

Number of S71 reports submitted to Provincial and National Treasury by the 10th Working day of each month

12 12

FM

04

-04 Number of Annual

Financial Statements submitted to the Auditor-General by the 31 August

1 1


FM

01

-52 Number of Budgets submitted to Council for approval by the 31 May 2017

1 1


FM

01

-44

The percentage of households with access to free basic electricity

100% 100%


KPA5: GOOD GOVERNANCE AND PUBLIC PARTICIPATION


GG

02 Number of

customer care satisfactory surveys conducted

1 0

Contribute to the fight against HIV/ Aids

GG

011

-1

Number of Local Aids Council (LAC) meetings convened

4 0

Due to challenges during the transitional process the LAC structure were not established.

The Local Aids Council structure will be established in the 2017/18 financial year.

To ensure good governance

GG

06

-2

Number of Audit Committee meetings held (Output)

4 1

Due to challenges during the transitional process the Audit Committee structure were not established

The municipality is in the process of establishing the Audit Committee.


GG

06

-3

Number of Strategic Risk

Registers compiled

1 1

Ensuring Public Participation

GG

013

-1

Number of Stakeholder Engagement

Sessions held (Output)

2 2

To inform the community about

the services rendered by the

municipality

GG

012

-4

Ratio of responses to

complaints raised in SOCIAL

MEDIA platforms

1:01 22:22

Ensuring Public Participation

GG

013

-2

Number of ward committee

meetings held (Output)

22 22

Build an efficient, effective,

accountable and responsive local

government system by 2017

GG

02

Number of Council Outreach programmes held

4 4

GG

02

- 1

Number of Local Labour Fora Committee

meetings held

4 3

The meeting

were postpone due to the

availability of members

Strict adherence

to the calendar of events will

be implemente


d in the next

financial year.

Promote a culture of participatory

and good governance.

GG

01

-2

Number of Council meetings

held

4 4

Promote a culture of participatory

and good governance.

GG

01

-2

Number of MPAC Meetings held

4 4


Annual performance as per key performance indicators in municipal transformation and organizational development

Indicator name Total number of people

(planned for) during the

year under review

Achievement level

during the year under

review

Achievement

percentage during

the year

Comments

on the gap

1 Vacancy rate for all

approved and budgeted

posts;

2 2 100%

2 Percentage of

appointment in strategic

positions (Municipal

Manager and Section 57

Managers)

1 0 0

_

4 Percentage of Managers

in Technical Services with

a professional qualification

100% None None

5 Percentage of

municipalities within the

Not applicable Not applicable Not applicable Not

applicable




year under review

Achievement level


review

Achievement

percentage during

the year

Comments

on the gap

district area that have a

fully functional

Performance

Management System (DM

only)

8 Percentage of staff that

have undergone a skills

audit (including

competency profiles)

within the current 5 year

term

100% 100% 100% _

9 Percentage of councillors

who attended a skill

development training

within the current 5 year

term

100% 100% 100%




year under review

Achievement level


review

Achievement

percentage during

the year

Comments

on the gap

10 Percentage of staff

complement with disability

4% 1% 1% Difficult to

recruit

11 Percentage of female

employees

30% 35% 35% -

12 Percentage of employees

that are younger than 35

aged 35 or younger

35% 60% - -


Challenge Remedial action

Insufficient funds for training of

councilors, staff and ward

committees;

By participating in LGSETA

programmes and those

trainings offered by JGDM in

support of Local Municipalities

and Department of Local

Government also gives

support in the training of

Councillors.

The Institution is gradually

improving in filling of the vacant

post

Inability to fill all posts in the

organogram to ensure effective

service delivery;

Maximum utilization of

available staff and students

placed on experiential training

by strengthening supervision,

on job training and coaching

and performance

management.

Partial implementation of the

performance management system

in the sense that it does not cover

non-s56 employees

Processes are under way to

engage contractual

employees below s56 signs

performance contracts with

their immediate supervisors.


COMPONENT A: INTRODUCTION TO THE MUNICIPAL PERSONNEL

4.2 EMPLOYEE TOTALS, TURNOVER & VACANCIES

MM/Section 56 and Line Managers

4.2.1 HR STATISTICS PER FUNCTIONAL AREA

MM/Section 56 and Line Managers

4.2.2 HR STATISTICS PER FUNCTIONAL AREA

4.2.2.1 FULL TIME STAFF COMPLEMENT PER FUNCTIONAL

AREA

Approved positions

(e.g. MM-S57 etc.)

Number of approved

and budgeted posts

per position

Filled

posts

Vacant

posts

1 Municipal Manager 1 1 0

2 Managers s56 5 3 2

4 Sectional Heads/ Line

Managers

40 31 9

Total 46 35 11

4.2.2.2 STAFF COMPLEMENT IN THE TECHNICAL SERVICES


and budgeted posts

per position

Filled

posts

Vacant

posts

1. Director 1 1 0

2. Assistant Manager 4 2 2

3. Foremen 6 5 1

4. Superintendent 2 2 0

5. Tool men 4 4 0



and budgeted posts

per position

Filled

posts

Vacant

posts

6. Linesman 1 1 0

7. Shift workers 17 16 1

8. Drivers 12 12 0

9. Operators 6 6 0

Total 53 49 4

COMPONENT B: MANAGING THE MUNICIPAL WORKFORCE

4.3 HUMAN RESOURCE POLICIES

The human resource policies provide the municipality with a mechanism to manage

risk by staying up to date with current trends in employment standards and legislation.

The policies are framed in a manner that the municipality’s vision and the human

resource helping the municipality to achieve it or work towards it are at all levels

benefited and at the same time not deviated from their main objective.

HR policies allow an organisation to be clear with employees on:

The nature of the organisation

What they should expect from the organisation

What the organisation expects of them

How policies and procedures work

What is acceptable and unacceptable behaviour

The consequences of unacceptable behaviour

The establishment of policies helps the municipality to demonstrate, both internally

and externally, that it meets requirements for diversity, ethics and training as well as

its commitments in relation to regulation and corporate governance. Human resource

policies can also be very effective at supporting and building the desired institutional

culture. For example recruitment and retention policies might outline the way in which

http://en.wikipedia.org/wiki/Risk


the municipality values a flexible workforce. The Municipality has a Recruitment and

Selection Manual which guides around the issues around staffing and a number of

policies (i.e. standby allowance policy, absenteeism policy, code of conduct, employee

assistance programme, motor vehicle allowance policy etc.)

4.4 RECRUITMENT AND SELECTION POLICY AND PROCEDURE

Walter Sisulu Local Municipality reviewed and approved the Recruitment and

Selection Policy and Procedure in the Council meeting held on 14 September 2016.

The objectives of the policy are to ensure fair and equitable recruitment and screening

process is achieved during the recruitment process. Furthermore the policy is aimed

at guiding appointment process to attract, obtain and retain people with required

competencies at minimum cost in order to satisfy the Human Resource needs of the

Council. Lastly, the policy is used as an instrument to give effect to the Affirmative

Action Policy principles and adheres to the Employment Equity Act and the Labour

Relations Act 66 of 1995. The municipality has been consistent in implementing the

recruitment policy as well as other provisions of the Municipal Systems Act, section 66

(3), in the financial year under review. There has been no litigation against council

owing to inconsistency application of the selection and recruitment procedures.

4.5 EMPLOYEE ASSISTANCE PROGRAMME

Walter Sisulu Local Municipality recognizes that staff’s well-being plays an important

role in meeting its objectives and that personal problems interfere with job

performance. Regardless of how disruptive such problems may be in the life of an

employee, external motivation is always needed before an employee can make

necessary changes or seek professional assistance. The municipality as an employer

is committed to look after the physical emotional, psychological and social well-being

of its employees. To this end, an Employee Assistance Programme was established

in the Human Resource Section to provide support to employees. The department is

performing this function, however the unavailability of skilled personnel in the

department is crippling the section and this result in this function being outsourced,

and the key objective of the programme is to promote the well-being, morale and


productivity of all employees; coordinate counseling services and refer employees for

professional and specialized services.

4.6 SUCCESSION PLANNING AND CAREER PATTING

In Walter Sisulu, succession planning simply means making the necessary

arrangements to ensure that suitably qualified people are available to fill posts which

will arise within any specific department over forthcoming years. The purpose of this

policy is to ensure continuity of suitably trained staff in key posts for the future, to (also)

ensure that someone is always available to fulfill any particular job in the municipal

service, even in the event of illness, resignation or death. Moreover, to comply with

the legal requirement of the Employment Equity Act which requires the appointment

and promotion of suitably qualified person from previously disadvantaged groups, to

ensure proportional representation in all occupational categories and levels? Lastly,

to ensure that training programs are undertaken in an orderly way and that staff does

not simply attend training courses without a purpose in this way training initiatives can

be properly focused.

4.7 EMPLOYMENT EQUITY

The municipality is in the process of developing the Employment Equity Plan which

will have a life-span of 5 years. A wide range of consultation will be done with

various stakeholders and Council.

4.8 SKILLS DEVELOPMENT

The Work Skills Plan was developed and approved by council on the 0 April 2017 which

was subsequently submitted to Local Government SETA on the 27 April 2017. This

plan is operational in the municipality however the cash flow challenges of council

impede the desirable implementation of the plan.


INJURIES, SICKNESS AND SUSPENSIONS

Type of injury

Injury Leave Taken Days

Employees using injury leave No.

Proportion employees using

sick leave %

Average Injury Leave per employee Days

Required basic medical attention only

116 8 1.80% 55.5

Temporary total disablement

0 0 0 0

Permanent disablement 0 0 0 0

Fatal 0 0 0 0

Total 118 8 1.80% 55.5

0

50

100

150

Required basic medicalattention only

Temporary total disablement Permanent disablement Fatal Total

Number of Injuries on Duty

Injury Leave Taken Days Employees using injury leave No. Proportion employees using sick leave % Average Injury Leave per employee Days


Salary band Total sick

leave Days

Proportion of sick leave without medical certification %

Employees using sick leave No.

Total employees

in post* No.

*Average sick leave

per Employees

Days

Lower skilled (Levels 1-2) 1124 2.06% 124 171 29

Skilled (Levels 3-5) 458 2.13% 50 59 27

Highly skilled production (levels 6-8)

360 5.61% 51 75 27

Highly skilled supervision (levels 9-12)

200 3% 21 28 1

Senior management (Levels 13-15)

229 1.53% 15 31 27

MM and S57 39 18% 4 4 32

Total 2410 32.33% 265 368 143


0

500

1000

1500

2000

2500

3000

Lower skilled (Levels1-2)

Skilled (Levels 3-5) Highly skilledproduction (levels 6-8)

Highly skilledsupervision (levels 9-

12)

Senior management(Levels 13-15)

MM and S57 Total

Number of Days and Cost

Total sick leave Days Proportion of sick leave without medicalcertification %

Employees using sick leave No.

Total employees in post* No. *Average sick leave per Employees Days


COMPONENT C: CAPACITATING THE MUNICIPAL WORKFORCE

4.9 SKILLS DEVELOPMENT AND TRAINING

The municipality has committed itself on that with prime purpose of accelerating the

pace for change with the delivery of services. The following programmes/activities are

planned for the 2017/18 financial year:

19 Employees in different Directorates have been registered for Municipal

Finance Management Programme NQF Level 6 (Funded by LGSETA through

Discretionary Grant for 5 Officials the Municipality will be paying for 14 Officials)

3 Employees in different Directorates have been registered for Municipal

Governance Learnership Programme (with the assistance of Joe Gqabi District

Municipality)

22 Councillors have been registered for Community Leadership NQF Level 4

Skills Programme (Funded by LGSETA through Discretionary Grant)

80 Ward Committees have been registered for Ward Committee Governance

(with the assistance of Local Government SETA) The Municipality will top up

for 30 Ward Committees.

15 Employed and 10 unemployed community members from different wards

have been registered for Electrical Engineering (Funded by LGSETA through

Discretionary Grant)

15 Employed and 15 Unemployed community members from different wards

have been registered for Plumbing Skills Programme (Funded by LGSETA

through Discretionary Grant).

ICT Cobit 2 Officials have been registered the Programme is Funded by

LGSETA through Discretionary Grant

Officials and Portfolio Head: Corporate Services were trained on Employment

Equity with the support of Joe Gqabi District Municipality

4.10 COUNCILLORS RECEIVED TRAINING ON THE FOLLOWING

AREAS:

Certificate in Local Government Law and Administration

4.11 EMPLOYEES RECEIVED TRAINING ON THE FOLLOWING

AREAS:

Certificate in Local Government Law and Administration

COMPONENT D: MANAGING THE WORKFORCE EXPENDITURE


4.12 EMPLOYEE EXPENDITURE

Currently, the personnel expenditure stands at 40% of the total general

expenditure.


CHAPTER 5 – FINANCIAL PERFORMANCE

5.1 INTRODUCTION

Chapter 5 contains information regarding financial performance and highlights

specific accomplishments. The chapter comprises of three components:

Component A: Statement of Financial Performance

Component B: Spending Against Capital Budget

Component C: Other Financial Matters

COMPONENT A: STATEMENTS OF FINANCIAL PERFORMANCE

5.2 INTRODUCTION TO FINANCIAL STATEMENTS

The Overall Financial Performance

Walter Sisulu Municipality recognized total revenue amounting to R225.5 million

during the year under review. This amount includes revenue recognized on the

utilization of both operating and capital grant of R63.3 and R27.9 million respectively.

The income raised from service charges was R91.2 million and represents about

40% of the total revenue for the year.

The total expenditure incurred for the same period under review was R267.2 million

which resulted in a deficit of R41.6 million. This also reflects an unfavorable variance

which ultimately means that the municipality has incurred unauthorized expenditure.

Walter Sisulu Municipality’s financial sustainability is not favorable due to the fact

that its current liabilities are in excess of the current assets thus creating a liquidity

problem in the short-term.

Employee Related Costs and Bulk Purchases continue to have a significant

contribution to the overall expenditure and amounted to R76.8 million and R70.5

million respectively. Depreciation and Amortization charges are the major non-cash

flow expense of approximately R26 million allocated in the annual statement of

financial performance.

STATEMENTS OF FINANCIAL PERFORMANCE


EC145 Walter Sisulu - Table B1 Adjustments Budget Summary -

Description

Budget Year 2016/17

Budget Year +1 2017/18

Budget Year +2 2018/19

Original

Budget

Prior Adjust

ed

Accum.

Funds

Multi-year capit

al

Unfore. Unavoi

d.

Nat. or

Prov.

Govt

Other Adjust

s.

Total Adjust

s.

Adjusted

Budget

Adjusted

Budget

Adjusted

Budget

1 2 3 4 5 6 7 8

R thousands A A1 B C D E F G H

Financial Performance

Property rates 24 121

–

–

–

–

– – – 24 121 26 530 29 172

Service charges

121 423

–

–

–

–

–

(19 163)

(19 163)

102 261

117 258

128 082

Investment revenue 834

–

–

–

–

– (303) (303) 531 869 908


Transfers recognised - operational

54 991

–

–

–

–

– 16 280 16 280 71 271 46 099 48 997

Other own revenue 18 420

–

–

–

–

– (4 480) (4 480) 13 940 20 502 22 080

Total Revenue (excluding capital transfers and contributions)

219 790

–

–

–

–

–

(7 666) (7 666) 212 124

211 258

229 239

Employee costs 87 589

–

–

–

–

–

(16 894)

(16 894) 70 695 94 986

101 133

Remuneration of councillors

7 365

–

–

–

–

– (2 839) (2 839) 4 526 7 862 8 368

Depreciation & asset impairment

17 050

–

–

–

–

– 1 740 1 740 18 790 17 418 18 431

Finance charges 993

–

–

–

–

– (672) (672) 321 937 959

Materials and bulk purchases

72 880

–

–

–

–

– (18) (18) 72 861 73 937 75 006

Transfers and grants 19 480

–

–

–

–

– (9 128) (9 128) 10 352 717 808

Other expenditure 54 953

–

–

–

–

–

(21 486)

(21 486) 33 467 65 353 67 360


Total Expenditure

260 309

–

–

–

–

–

(49 297)

(49 297)

211 012

261 209

272 065

Surplus/(Deficit)

(40 519)

–

–

–

–

– 41 631 41 631 1 112

(49 951)

(42 826)

Transfers recognised - capital

20 990

–

–

–

–

– 5 000 5 000 25 990 18 722 19 570

Contributions recognised - capital & contributed assets

–

–

–

–

–

– – – – – –

Surplus/(Deficit) after capital transfers & contributions

(19 529)

–

–

–

–

–

46 631

46 631 27 102 (31 229)

(23 256)

Share of surplus/ (deficit) of associate

–

–

–

–

–

–

– – – – –

Surplus/ (Deficit) for the year

(19 529)

–

–

–

–

–

46 631

46 631 27 102 (31 229)

(23 256)

Capital expenditure & funds sources


Capital expenditure 26 210

–

–

–

–

–

400

400

26 610

9 522

–

Transfers recognised - capital

25 990

–

–

–

–

–

–

–

25 990

9 522

–

Public contributions & donations

–

–

–

–

–

–

–

–

–

–

–

Borrowing –

–

–

–

–

–

–

–

–

–

–

Internally generated funds

220

–

–

–

–

–

400

400

620

–

–

Total sources of capital funds

26 210

–

–

–

–

–

400

400

26 610

9 522

–

Financial position

Total current assets 72 575

–

–

–

–

–

–

–

72 575

76 794

81 057

Total non current assets

650 733

–

–

–

–

–

–

–

650 733

691 079

731 852

Total current liabilities

233 757

–

–

–

–

–

–

–

233 757

244 227

257 505


Total non current liabilities

132 694

–

–

–

–

–

–

–

132 694

135 099

137 190

Community wealth/Equity

357 156

–

–

–

–

–

–

–

357 156

389 144

419 115

Cash flows

Net cash from (used) operating 98 930 – – – – – (9 227) (9 227) 89 703 80 067 85 124

Net cash from (used) investing

(24 928) – – – – – (400) (400)

(25 328) (8 160) (8 642)

Net cash from (used) financing

(1 133) – – – – – 89 89 (1 044) (960) (444)

Cash/cash equivalents at the year end 73 924 – – – – – (9 538) (9 538) 64 386 70 947 76 039

Cash backing/surplus reconciliation

Cash and investments available 7 326 – – – – – – – 7 326 7 499 7 675


Application of cash and investments

151 429 – – – – – 3 332 3 332

154 760

155 354

163 005

Balance - surplus (shortfall)

(144 103) – – – – – (3 332) (3 332)

(147 435)

(147 855)

(155 330)

Asset Management

Asset register summary (WDV)

166 324

–

–

–

–

–

–

–

166 324

176 636

187 057

Depreciation & asset impairment

17 050

–

–

–

–

–

1 740

1 740

18 790

17 418

18 431

Renewal of Existing Assets

–

–

–

–

–

–

–

–

–

–

–

Repairs and Maintenance

11 704

–

–

–

–

–

1 503

1 503

13 207

10 623

10 725

Free services

Cost of Free Basic Services provided

–

–

–

–

–

–

–

–

–

–

–

Revenue cost of free services provided

25 594

–

–

–

–

–

–

–

25 594

28 018

30 769


Households below minimum service level

Water: –

–

–

–

–

–

–

–

–

–

–

Sanitation/sewerage: –

–

–

–

–

–

–

–

–

–

–

Energy: –

–

–

–

–

–

–

–

–

–

–

Refuse: –

–

–

–

–

–

–

–

–

–

–


GRANTS

Budget Year

+1 2017/18

Budget Year

+2 2018/19

Original

Budget

Prior

Adjusted

Multi-year

capital

Nat. or Prov.

Govt

Other

Adjusts.

Total

Adjusts.

Adjusted

Budget

Adjusted

Budget

Adjusted

Budget

2 3 4 5 6 7

R thousands A A1 B C D E F

EXPENDITURE ON TRANSFERS AND GRANT PROGRAM: 1

Operating expenditure of Transfers and Grants

National Government: 71 649 – – – 2 000 2 000 73 649 58 263 57 945

Local Gov ernment Equitable Share 51 948 – 51 948 49 452 52 683

Finance Management 3 835 – 3 835 4 245 4 501

EPWP Incentiv e 2 438 – 2 438

Municipal demarcation transition grant 13 428 2 000 2 000 15 428 4 566

Municipal sy stems improv ements grant – – 761

– –

Other transfers and grants [insert description] – –

Provincial Government: – – – – 1 000 1 000 1 000 – –

Greening and Beautifcation Grant-DEDEA 1 000 1 000 1 000

– –

– –

– –

Other transfers and grants [insert description] – –

District Municipality: – – – – – – – – –

[insert description] – –

– –

Other grant providers: – – – – – – – – –


– –

Total operating expenditure of Transfers and Grants: 71 649 – – – 3 000 3 000 74 649 58 263 57 945

Capital expenditure of Transfers and Grants

National Government: 26 552 – – – – – 26 552 25 231 20 113

Municipal Infrastructure Grant (MIG) 21 552 – 21 552 19 231 20 113

Integrated national electrification programme 5 000 – 5 000

Energy efficiency and demand side management grant – – 6 000

– –

– –

Other capital transfers [insert description] – –

Provincial Government: – – – – – – – – –

Other capital transfers/grants [insert description] – –

– –

District Municipality: – – – – – – – – –


– –

Other grant providers: – – – – – – – – –


– –

Total capital expenditure of Transfers and Grants 26 552 – – – – – 26 552 25 231 20 113

Total capital expenditure of Transfers and Grants 98 201 – – – 3 000 3 000 101 201 83 494 78 058

Description Ref

Budget Year 2016/17


5.3 INTRODUCTION TO ASSET MANAGEMENT

Asset Management Policy in place has been approved by council and is

implemented in conjunction with the supply chain management policy. The policy

was drafted in accordance with the guidelines of the Municipal Finance Management

Act as the statutory framework. It points out the fact that the principal objective of the

policy is to enable the Municipality to meet its service delivery objectives efficiently

and effectively. The responsibilities of the accounting officer with regards to assets

are noted on the policy. The policy predominantly covers the following significant

areas:

Outlines the definitions or terms used in the policy, Recognition of fixed assets,

Asset management system, Roles and responsibilities in respect of asset

management, Format of fixed asset register, Classification of fixed assets,

Safekeeping of assets, Identification of fixed assets, Capitalisation criteria,

Maintenance plans, Deferred maintenance, General maintenance of fixed assets,

Depreciation of fixed assets, Rate of depreciation, Method of depreciation,

Amendment of asset lives and diminution in the value of fixed assets, Alternative

methods of depreciation in specific instances, Carrying values of fixed assets,

Revaluation of fixed assets, Verification of fixed assets, Writing off of fixed assets,

Replacement norms, Insurance of fixed assets, Biological assets, Procedure in case

of loss, theft, destruction, or impairment of fixed assets, etc.

5.4 TREATMENT OF THE ASSET ACQUIRED

5.4.1 PROPERTY, PLANT AND EQUIPMENT

5.4.1.1 Initial Recognition

Property, plant and equipment are tangible non-current assets (including

infrastructure assets) that are held for use in the production or supply of goods or

services, rental to others, or for administrative purposes, and are expected to be

used during more than one year. The cost of an item of property, plant and

equipment shall be recognised as an asset if, and only if it is probable that future

economic benefits or service potential associated with the item will flow to the entity,

and the cost or fair value of the item can be measured reliably.

Items of property, plant and equipment are initially recognised as assets on

acquisition date and are initially recorded at cost. The cost of an item of property,

plant and equipment is the purchase price and other costs attributable to bring the

asset to the location and condition necessary for it to be capable of operating in the

manner intended by the Municipality. Trade discounts and rebates are deducted in

arriving at the cost. The cost also includes the necessary costs of dismantling and

removing the asset and restoring the site on which it is located.


When significant components of an item of property, plant and equipment have

different useful lives, they are accounted for as separate items (major components)

of property, plant and equipment.

Where an asset is acquired by the Municipality for no or nominal consideration (i.e. a

non-exchange transaction), the cost is deemed to be equal to the fair value of that

asset on the date acquired.

Where an item of property, plant and equipment is acquired in exchange for a non-

monetary asset or monetary assets, or a combination of monetary and non-monetary

assets, the assets acquired is initially measured at fair value (the cost). It the

acquired item’s fair value was not determinable, it’s deemed cost is the carrying

amount of the asset(s) given up.

Major spare parts and servicing equipment qualify as property, plant and equipment

when the municipality expects to use them during more than one period. Similarly, if

the major spare parts and servicing equipment can be used only in connection with

an item of property, plant and equipment, they are accounted for as property, plant

and equipment.

5.4.1.2 Subsequent Measurement – Cost Model

Subsequent to initial recognition, items of property, plant and equipment are

measured at cost less accumulated depreciation and any accumulated impairment

losses. Land is not depreciated as it is deemed to have an indefinite useful life.

Where the Municipality replaces parts of an asset, it derecognises the part of the

asset being replaced and capitalises the new component. Subsequent expenditure

incurred on an asset is capitalised when it increases the capacity or future economic

benefits associated with the asset.

5.4.1.3 Depreciation and Impairment

Depreciation is calculated on the depreciable amount, using the straight-line method

over the estimated useful lives of the assets. Depreciation of an asset begins when

it is available for use, i.e. when it is in the location and condition necessary for it to

be capable of operating in the manner intended by management. Components of

assets that are significant in relation to the whole asset and that have different useful

lives are depreciated separately. The estimated useful lives, residual values and

depreciation method are reviewed at each year end, with the effect of any changes

in estimate accounted for on a prospective basis. The annual depreciation rates are

based on the estimated useful lives as determined in the policy.

Property, plant and equipment are reviewed at each reporting date for any indication

of impairment. If any such indication exists, the asset’s recoverable amount is


estimated. The impairment charged to the Statement of Financial Performance is the

excess of the carrying value over the recoverable amount.

An impairment is reversed only to the extent that the asset’s carrying amount does

not exceed the carrying amount that would have been determined had no

impairment been recognised. A reversal of impairment is recognised in the

Statement of Financial Performance.

5.4.1.3 De-recognition

Items of property, plant and equipment are derecognised when the asset is disposed

or when there are no further economic benefits or service potential expected from

the use of the asset. The gain or loss arising on the disposal or retirement of an item

of property, plant and equipment is determined as the difference between the sales

proceeds and the carrying value and is recognised in the Statement of Financial

Performance.

Land and buildings and Other Assets – application of deemed cost (Directive 7)

The Municipality opted to take advantage of the transitional provisions as contained

in Directive 7 of the Accounting Standards Board, issued in December 2009. The

Municipality applied deemed cost where the acquisition cost of an asset could not be

determined. For Land and Buildings the fair value as determined by a valuator was

used in order to determine the deemed cost as on 1 July 2008. For Other Assets the

depreciation cost method was used to establish the deemed cost as on 1 July 2008.

Property, plant and equipment are accounted for according to the revised Generally

Recognised Accounting Practice (GRAP 17) as issued by the Accounting Standards

Board (ASB).

5.5 BORROWING COSTS AND CAPITAL GRANT FUNDING

Borrowing costs and other costs directly attributable to the acquisition, construction

or production of qualifying assets are capitalised to the cost of that asset unless it is

inappropriate to do so. The amount of borrowing costs that the Municipality

capitalises during a period shall not exceed the amount of borrowing costs it incurred

during that period. The Municipality ceases the capitalisation of borrowing costs

when substantially all the activities to prepare the asset for its intended use or sale

are complete. Borrowing costs incurred other than on qualifying assets are

recognised as an expense in the Statement of Financial Performance when incurred.


5.6 COMMENT ON ASSET MANAGEMENT:

Sarah Moroosi phase 1 and 2 were the only projects approved in the period under

review. The main purpose of these projects is to facilitate the provision of service

delivery to the local community and enhance the standard of living in turn. The cost

of projects are capitalised as an asset on completion date. The projects are recorded

at fair value (total project costs as per the certified work) at date of initial recognition

and subsequently depreciated over their estimated useful lives as determined by the

accounting policy. Prior to completion of the project, a work-in-progress (WIP) asset

is recognised as an accumulation of all direct project costs.

5.6.1 Repairs and Maintenance Expenditure

5.6.1.1 COMMENT ON REPAIR AND MAINTENANCE EXPENDITURE:

Repairs and Maintenance is a mechanism in place to restore or maintain all assets in

a condition that will maximize the economic benefits arising from the use of the

affected assets. However, repair and maintenance costs are directly related to the

age of the assets and the care thereon.

Our assets are, in the majority, classified as old and therefore would require constant

repairing. An amount of R4 million was incurred in the period under review. The

major areas that were repaired during the year were Buildings, Vehicles &

Implements, Electricity Reticulation and Streets and Storm-water.

Performance ratios 2016/2017

Total Assets

708 232

314

Less current liabilities

288 032

405


Capital Employed 420 199 909

Surplus/ (Deficit) before interest charges (PBIT)

(29 782

495)

ROCE -0.07

The return on capital employed is a negative

0.07%.

Debt and Gearing Ratios

Debt Ratio (Total debt/total assets) 0.48

Total Debt 342 645 495

Total Assets 708 232 314

Gearing ratio

Gearing ratios measures the municipal level of

indebtness in relation to the value of assets

required to generate economic benefits or cash

inflows that will eventually payback the debts

when they fall due. This is also referred to as a

long term measure of liquidity.


Efficiency Ratios

Debt Collection Period (in days)

(32 428 276*365)/(125 707 614) 94

Trade Receivables 19 673 112

Revenue from non- exchange transactions and

property taxes 12 765 163

Days in a year 365.00

Payment Period (in days) 563

Trade Payables 252 070 419

Purchases 47 763 006

Days in a year 365.00

Current Asset Ratio 0.30

Current Assets 85 463 226

Current Liabilities 288 032 405


Acid Test Ratio 1.00

Current Assets 85 463 226

Less Inventory (316 404)

Net current assets 85 463 226

Current Liabilities 288 032 405

Ratio 0.31

pg. 152 DRAFT ANNUAL REPORT 2016/17 – WALTER SISULU LOCAL MUNICIPALITY

FINANCIAL RATIOS BASED ON KEY PERFORMANCE INDICATORS

NET DEFICIT FOR THE YEAR (41 689 508)

Net Surplus/ (Deficit) before interest (29 782 495)

Add back interest 11 907 013

Net (deficit) income (41 689 508)

Revenue 225 527 101

Return on Sales -0.12

Revenue 225 527 101


Asset Turnover 0.42

Asset Turnover measures how well the asset of the

entity are being used to generate sales. Ability to use

assets to provide a satisfactory service. A higher

turnover means that Assets were used more effectively

and much better in the current year than in the previous

year. Revenue generated is influenced by the tariff rates

applicable to the consumers. The degree of the indigent

population within the municipality has a major

contributing factor on the revenue generated from

exchange and non-exchange transactions.


ROCE -0.07

Revenue from exchange transactions and taxes 125 248 360

Expenditure for trading 24 471 614

less non-operating expenses (62 213 843)

Cash flow Ratio 0.19

Net annual cash inflow (Operations) 49 109 519

Total debts 252 070 419

Measures the municipal annual net cash inflows in relation to its total debts. Indicates the

municipality's position to meet its foreseeable debts and future commitments from the

cash generated by its operations.

Liquidity Ratios

Liquidity is a reflection of the municipality’s ability to meet its short-term obligations

when they fall due. The municipality’s ability to convert current assets into cash to

meet the current liabilities that are convertible into cash within a period of twelve

months or less from the end of the financial year is assessed by its liquidity ratios.


These include current assets to current liabilities ratio which measures the extent

to which total current assets can meet the corresponding total current liability.

Current Ratio

This ratio is 0.30 (1:3.37) indicating that the value of total current assets at year-

end is not adequate to settle the total outstanding debts for the same period. This

means that the total value of current assets could only pay up to 30% of the total

value of current liabilities.

Acid Test Ratio

The other ratio that assesses the municipality’s liquidity is the acid test ratio, which

specifically excludes inventory as an asset that can be easily converted into cash.

This ratio reflects that current assets to current liabilities is at 1:338, meaning that

the total value of current assets at year-end can only cover 30% of total current

liabilities for the same period.

Liquidity Ratio

ACID TEST RATIO 0.30 0.30

The ability of the municipality to cover its short term debt with its current assets

without including the value of its inventory has remained constant when compared

to the previous year.


5.7 COMPONENT B: SPENDING AGAINST CAPITAL BUDGET

5.7.1 INTRODUCTION TO SPENDING AGAINST CAPITAL BUDGET

5.7.1.1 Equitable share

The Equitable Share is the unconditional share of the revenue that is raised nationally

and is being allocated in terms of Section 214 of the Constitution (Act 108 of 1996) to

the municipality by the National Treasury.

5.7.1.2 Finance Management

Grant FMG)

The Financial Management Grant is paid by National Treasury to municipalities to

help implement the financial reforms required by the Municipal Finance Management

Act (MFMA), 2003. The FMG Grant also pays for the cost of the Financial

Management Internship Programme (e.g. salary costs of the Financial Management

Interns).

5.7.1.3 Municipal Infrastructure

Grant (MIG)

The grant was used to construct roads and storm water infrastructure, with the main

focus on the historically disadvantaged areas.


5.7.1.4 Integrated National Electrification Grant

The National Electrification Grant was used to upgrade the sub-station and

electrification network.

5.7.1.5 Expanded Public Works Program (EPWP)

This program is aimed at providing poverty income relief through the creation of

temporary work opportunities.

5.7.1.6 Department of Environmental Affairs and Tourism (DEAT)

The grant is utilised to protect, conserve and enhance our environment, natural and

heritage assets and resources.

5.7.1.7 Other grants


Various grants were received from other spheres of government and includes for

example the following: Spatial Development Framework, Skills Development Grant,

etc.

CAPITAL EXPENDITURE

CAPITAL EXPENDITURE (VOTE) BUDGET ACTUAL VARIANCE

Executive and council 400 000

410 435

10 435

Budget and treasury office 60 000

234 741

174 741

Planning and development -

-

-

Community and social services 40 000

514 105

474 105

Housing 20 000

-

-20 000

Public safety 20 000

-

-20 000

Sport and recreation -

924 673

924 673

Waste management 40 000

25 207

-14 793

Road transport 10 691 324

20 276 197

9 584 873

Electricity 15 339 026

7 007 852

-8 331 174

Total Capital Expenditure by Vote 26 610 350

29 393 212

2 782 861

SOURCES OF FINANCE


FINAL ACTUAL BUDGET

Property rates 24 121 412 18 661 347 -5 460 065

Service charges - electricity revenue 82 932 061 76 276 657 -6 655 403

Service charges - refuse revenue 19 328 832 14 928 625 -4 400 207

Rental of facilities and equipment 1 203 751 2 144 825 941 074

Interest earned - external investments 531 094 1 431 704 900 610

Interest earned - outstanding debtors 4 888 220 5 118 497 230 277

Fines 130 411 459 253 328 842

Licences and permits 3 804 692 3 225 925 -578 767

Agency services 2 990 000 1 618 523 -1 371 477

Transfers recognised - operational 71 270 873 63 340 037 -7 930 836

Other revenue 922 138 10 410 499 9 488 361

Gains on disposal of PPE 818 - -818


212 124 303 197 615 895 -14 508 408

CAPITAL SPENDING ON 5 LARGEST PROJECTS

CAPITAL EXPENDITURE ACTUAL

Executive and council 410 435

Community and social services 514 105

Sport and recreation 924 673

Road transport 20 276 197

Electricity 7 007 852


Total Capital Expenditure by Vote 29 133 262

5.8 BASIC SERVICE AND INFRASTRUCTURE BACKLOGS – OVERVIEW

5.8.1 Major challenges in electricity and remedial actions

The major problems regarding electricity are the infrastructure upgrading and high

replacements costs. The transformers services have never been done in many years,

and as a result it makes the continuous supply of electricity to be unpredictable.

5.8.2 Major challenges in road maintenance services and remedial actions

Major challenges are regarding funding to upgrade from gravel roads to surfaced

roads. The maintenance of potholes and crocodile cracking with limited funding is also

a major challenge.

Major challenges in waste management services and remedial action

The major challenges in waste management are the following:

Damaged incinerator at the landfill site makes it impractical to burn waste in line with

the permit.

Sickly staff that are frequently booked off duty.

Major challenges in housing and town planning services and remedial actions

Shortage of land

Informal settlements

Back yard dwelling

Lack of capacity of appointed developers

Town Planning Consultants have been appointed; the spatial development framework

plan is adopted by Council and has already been reviewed once. Remedial actions are

done on a need as we go basis in between the bi-annual reviews.

Major challenges in spatial planning services and remedial actions

Shortage of land for development

Low capacity infrastructure


5. 9 COMPONENT C: CASH FLOW MANAGEMENT AND INVESTMENTS

5.9.1 INTRODUCTION TO CASH FLOW MANAGEMENT AND INVESTMENTS

5.9.1.1 Cash Flow Management

Liquidity, which is sometimes referred to as cash flow, is a reflection of the

municipality’s ability to meet its short-term obligations when they fall due. The

municipality’s ability to honor its current obligations is determined by its cash reserves

(cash flow) and the duration required converting current assets into cash within a cycle

of twelve months or less from the end of the financial year. These include current

assets to current liabilities ratio which measures the extent to which total current

assets can meet the corresponding total current liability.

This municipal current ratio of 1:3.37 as at 30 June 2017 indicates that the value of

total current assets at year-end is not adequate to settle the total outstanding debts for

the same period. This means that the total value of current assets could only pay up to

30% of the total value of current liabilities.

The other ratio (acid test ratio), that assesses the municipality’s liquidity which

specifically excludes inventory as an asset that can be easily converted into cash,

reflects that current assets to current liabilities is at 1:3.38, meaning that the total value

of current assets at year-end can only cover 30% of total current liabilities for the same

period.

The cash inflows and outflows are monitored on a daily basis to ensure that there are

adequate reserves or cash to meet the daily operational requirements.

CASH FLOWS

(Actual) (Final Budget) (Variance)

CASH FLOW FROM OPERATING ACTIVITIES

Receipts

Property rates 15 614 382 24 121 412 -8 507 030

Service charges 74 257 400 80 347 277 -6 089 877

Other revenue 10 496 517 34 699 239 -24 202 722

Government - operating 73 230 155 87 929 000 -14 698 845

Government - capital 29 931 011 31 552 000 -1 620 989


Interest 1 431 704 5 722 375 -4 290 671

Payments

Suppliers and Employees -147 096 278 -167 999 717 20 903 439

Finance charges -8 563 560 -6 154 193 -2 409 367

Transfers and Grants -191 813 -514 686 322 874

NET CASH FROM OPERATING ACTIVITIES 49 109 519 89 702 708 -40 593 188

CASH FLOWS FROM INVESTING ACTIVITIES

Receipts

Proceeds on disposal of PPE - 1 282 133 -1 282 133

Increase in non-current investments -91 532 - -91 532

Payments

Capital assets -29 393 212 -26 610 350 -2 782 861

NET CASH USED IN INVESTING ACTIVITIES -29 484 744 -25 328 217 -4 156 527

CASH FLOWS FROM FINANCING ACTIVITIES

Receipts

Increase in consumer deposits 98 220 89 000 9 220

Payments

Repayment of borrowing -1 225 989 -1 133 490 -92 499


NET CASH USED IN FINANCING ACTIVITIES -1 127 770 -1 044 490 -83 280

NET INCREASE IN CASH HELD 18 497 006 63 330 001 -44 832 995

Cash and Cash Equivalents recognised on merger date 3 161 071 1 055 815 2 105 256

Cash and Cash Equivalents at the end of the period 21 658 077 64 385 816 -42 727 739

Cash flow Ratios

2016/2017

Cash flow Ratio

0.19

Net annual cash inflow (Operations) 49 109 519

Total debts 252 070 419

Measures the municipal annual net cash inflows in relation to its

total debts. Indicates the municipality's position to meet its

foreseeable debts and future commitments from the cash

generated by its operations.

5.2 BORROWING AND INVESTMENTS


5.2.1 INTRODUCTION TO BORROWING AND INVESTMENTS

Borrowing serves as the finance bridge on any shortfall on which the municipality is

funded for by any sphere of government and is not able to generate the funds from its

internal sources. Council makes use of the bank facility with FNB to fund the purchase

of capital assets as well as DBSA. There are no other loan facilities exercised by the

municipality.

Borrowings 2016/2017

Long-Term Loans (annuity/reducing balance) 2 210 221

Long-Term Loans (non-annuity) -

Instalment Credit 606 427

Financial Leases 527 830

Other Securities -

Municipality Total 3 344 478

Fixed investments

Investment* type

Year 2016/2017

Actual

Municipality

Deposits – Bank (fixed term) 722 677

Cash and Cash Equivalents


2016/2017

Call Investments Deposits 357 910

COMMENT ON BORROWING AND INVESTMENTS:

All investments whether in the form of loans (in cash or kind) made by the municipality

but not to one or more of the organisations set out above and all grants (in cash or

kind) made to any form of organization are set out in full on Appendix R.

Due to the fact that the municipality is not funded by shareholders or investors but by

public funds through government grants and subsidy, accumulated surplus will

therefore be regarded as employment of capital, augmented by external funding from

Development Bank of Southern Africa (DBSA) and commercial institutions, required to

meet operational requirements. The municipality is not heavenly indebted and is

therefore not at risk of failure to obtain further external funding should a need arise in

the near future.

PUBLIC PRIVATE PARTNERSHIPS

Walter Sisulu Municipality does not have any public-private partnership agreements in

place during the year under review.

COMPONENT D: OTHER FINANCIAL MATTERS

SUPPLY CHAIN MANAGEMENT

The municipality has developed a supply chain management policy that conforms to

the requirements or guidelines of the National Treasury Regulations. The policy was

revised and implemented in December 2011 after taking into consideration the

changes on the revised regulations and published circulars. Although the policy was

work-shopped to all councillors and management staff, the full implementation thereon

remains a challenge. Due to the municipal geographical situation, which is on the far

northern end of the Eastern Cape with low economic activity, significant procurement

from local suppliers is always a challenge. The local suppliers and contractors are

often out of stock and resources to deliver the orders requested by the municipality.


All committee membership recommended by the policy is in place and none of the

councillors serves in any of the committees. Management has embarked on a drive to

capacitate its staff by enrolling all qualifying staff members on accredited courses.

The Auditor General’s remarks on the supply chain management are contained in the

audit report; however there was an emphasis in relation to irregular expenditure

incurred due to non-compliance with the policy. An audit action has been developed

on how to address these findings.

GRAP COMPLIANCE

GRAP is the acronym for Generally Recognised Accounting Practice (GRAP) and it

provides the rules by which municipalities are required to maintain their financial

accounts. Successful GRAP compliance will ensure that municipal accounts are

comparable and more informative for the municipality. It will also ensure that the

municipality is more accountable to its citizens and other stakeholders. Information on

GRAP compliance is needed to enable National Treasury to assess the pace of

progress and consider the implications.

The annual financial statements have been prepared on an accrual basis of

accounting and are in accordance with historical cost convention unless specified

otherwise.

The annual financial statements have been prepared in accordance with the Municipal

Finance Management Act (MFMA) and effective standards of Generally Recognised

Accounting Practices (GRAP), including any interpretations and directives issued by

the Accounting Standards Board (ASB) in accordance with Section 122(3) of the

Municipal Finance Management Act, (Act No 56 of 2003).

Accounting policies for material transactions, events or conditions not covered by the

GRAP reporting framework, have been developed in accordance with paragraphs 8,

10 and 11 of GRAP 3 (Revised – February 2010) and the hierarchy approved in

Directive 5 issued by the Accounting Standards Board.


CHAPTER 6 FINANCIAL HEALTH OVERVIEW

FINANCIAL OVERVIEW

6.1 FINANCIAL SUSTAINABILITY

The indicators or conditions that may, individually or collectively, cast significant doubt about the going concern assumption are as follows:

Financial Indicators


The current liabilities at year end exceeded the current assets and this could result in the municipality being unable to settle all of its liabilities.

Management will continue to put measures in place to ensure that municipal current assets are in excess of the current liabilities. Expenditure patterns and budget control measures will be enforced to reduce the expenditure that lead to an increase in current liabilities.

The number of days it takes to collect money from consumer debtors has increased from the prior year and this has placed constraints on the cash flow resulting in delays in settling the creditors.

Although the debtors' collection period has increased compared to prior year, management has continued to enforce the credit control measures through electricity disconnections, prepaid blockages and handover of long outstanding debts to attorneys.

The municipality experienced material losses in electricity usage to the value of R12 557 730. This represents a loss of 17.79%.

6.1.1 Operating Indicators

No capital grant funds were utilised for operations in the 2016/2017 financial year.

Payables outstanding at year-end are significant at R252 070 419. This increase can mainly be attributed to amounts owing to Eskom, Pension Funds and the Auditor General.

6.1.2 Other Indicators


The municipality has incurred unauthorised, irregular and fruitless & wasteful expenditure.

Key Successes

Improved collection efforts through the use of disconnections, blockings, notices through normal mail and short message system.

Challenges

Limitation of office space resulting in compromised filing system and storage

facility. Negotiations in place with potential property owners to let out buildings

with more space to the municipality over a long term lease period with option

of purchasing in the long-term

Unfavorable cash flows resulting from expenditure needs that exceed the

revenue generation sources. Stricter control measures on expenditure and

constant reminder to departmental managers and supervisors to spend within

the budgeted amounts. Tough credit collection measures that ensures an

average collection of over 90% per month.

Unauthorized expenditure resulting from exceeding the budget by using funds

intended for projects in operating requirements. Improved cash-flow

management by ring fencing funds such as projects funds as well as

maintaining a dedicated bank account that will keep all cash that will assist in

ensuring that project funds are cash backed.

Irregular expenditure due to deficiencies in applying the supply chain

management policy. Developed checklist that ensures adherence and

compliance with the regulations and supply chain management policies.

The municipality continues to face severe challenges relating to its financial viability.

This is mainly due to a negative liquidity or profitability ratios. The going concern

status of the municipality is also in doubt due to the fact that the municipality is not

able to meet its short-term obligations with the available short-term assets. The ratio

of current liabilities to current assets reflects an excess of liabilities over assets.


OPERATING RATIOS

Percentage of Employee related costs over the budget 39%

FINANCIAL RATIOS BASED ON KEY PERFORMANCE INDICATORS

2016/2017

NET SURPLUS/(DEFICIT) FOR THE YEAR -41 689 508

Add back interest 8 235 990

Net income -33 453 518

Revenue 225 527 101

Return on Sales -0.15

The deficit has resulted in a significant deficit on Return on Sales at 15%.

Revenue 225 527 101

EXPENDITURE BY TYPE Actual Budget Variance

Employee related costs 76 831 637 70 694 974 6 136 663

Remuneration of councillors 5 882 648 4 525 930 1 356 717

Debt impairment 36 177 542 2 239 474 33 938 068

Depreciation & asset impairment 26 036 302 18 790 051 7 246 250

Finance charges 11 907 013 321 332 11 585 680

Bulk purchases 70 593 781 72 861 427 -2 267 646

Grants and subsidies paid 191 813 10 351 693 -10 159 881

Other expenditure 39 595 874 31 227 557 8 368 316

TOTAL OPERATING EXPENDITURE 267 216 609 211 012 440 56 204 169



Asset Turnover 0.32

Asset Turnover measures how well the assets of the entity are being used to generate sales. Ability to use assets to provide a satisfactory service. A higher turnover means that Assets were used more effectively and much better in the current year than in the previous year. Revenue generated is influenced by the tariff rates applicable to the consumers. The degree of the indigent population within the municipality has a major contributing factor on the revenue generated from exchange and non-exchange transactions.

COMMENT ON OPERATING RATIOS:

The over expenditure in the budget and treasury department is mainly due to the fact

that the municipality did not budget for any depreciation (non-cash flow) charges in the

current year.

AUDITOR GENERAL REPORT

AUDITOR GENERAL REPORT 2016/2017

The municipality received a disclaimer audit opinion in the 2016/17 financial year. An

emphasis of matter was placed on the restatement of opening balances, irregular

expenditure, debt impairment fruitless and wasteful expenditure as well as unauthorised

expenditure however the audit opinion was not modified in respect of the these matters.

APPENDICES

6.3 ADITOR GENERAL REPORT 2016/17

171 | P a g e D R A F T ANNUAL REPORT: 2016/17 FINANCIAL YEAR WALTER SISULU LOCAL MUNICIPALITY

# Audit Finding Classification Solution to the problem Responsible Person Due Date Progress to

date

1. COAF 36. Expenditure:

Differences identified {Iss.78}

- During the testing

performed on

expenditure it was

noted that expenditure

were not paid within

30 days as outlined in

the MFMA Section

65(2)(e).

- Invoice receipts not

stamped upon the

receipt

Risk and Governance The municipality will need to

stick to payment arrangement

between themselves and

suppliers.

That all invoices are stamp

upon receipt thereof.

Chief Financial Officer

monthly

Monthly

2. COAF 63 : Contingent

Liabilities: Legal confirmations

not received(ISS99)

- During the audit of

contingent liabilities,

no legal confirmation

were received for the

following claims

Management should facilitate the process to obtain the legal confirmations in order to ensure the receipt of the information by Auditor General (SA) as agreed in the engagement letter. Furthermore, management

Director Corporate

Services

Ongoing


disclosed in the notes

of the AFS:

Matthews Mbobo - R

100 000

Mr. NW Ngoqo - R

491 919.19

Umhlaba Valuers - no

amount

should maintain a legal correspondence file in order for legal information to be easily accessible

3. COAF 64 :Contingent

Liabilities – Differences

between AFS and legal

confirmation(ISS107)


contingent liabilities,

the financial impact of

the litigation claims for

Pollard Familie Trust

per the AFS disclosure

note 57.2 differs to

that provided by the

attorney, Horn Kumm

Fouche.

- The following

litigations were not

disclosed in the notes

of the AFS:

Management should ensure that the amount disclosed as a contingent liability can be supported by the related attorney.

Director

Corporate/Financial

Services


KS

Sengoatsi

L.S.

Morolong

4. COAF 2. Employee Cost -

Appointment not on approved

structure & Post not funded.

Iss.1

- The municipality does

not have an approved

organisational

structure. The

structure submitted

was a draft with only

municipal manager

and s57 managers on

the structure.

Municipality continued

to appoint new staff

members without an

structure by the

municipality.

Employee cost Municipal management should draft a full organisational structure on the needs of the municipality and table it to municipal council for approval.

Director Corporate

Services

Ongoing

5. COAF.42 Employee Cost -

Irregular appointments. Iss.11

Management should ensure

that all vacant positions are

advertised and that they

Director Corporate

Services

Ongoing


No advertisement of the post

and shortlisting documents

were filled in the employee file

of the following new

appointments as required by

Paragraph 4.1.2of

Comprehensive Human

Resource Policy.

- RG Links

- X R Raisa

follow the recruitment and

selection processes

6. COAF.40 Employee cost -

standby allowances non

submission. Iss.35


standby allowance it

was noted that

insufficient information

were submitted to

support the standby

allowances claims.


that the processes as

describe in the policies are

implemented.

Director Corporate

Services

Ongoing

7. COAF 52 Acting allowances

exceeded three months and

not approved by MEC (Iss 36)

- The following

employee acted in a

The council should ensure that there are proper processes followed to ensure that the key vacant posts are filled within the reasonable period to avoid

Director Corporate

Services

Ongoing


position for more than

three months and no

correspondence

obtained from

employee file

requesting

authorisation for a

further period that

does exceed three

months (Mr. W

Nodwele).

- Paragraph 8.9.7.5 No

person may be

appointed to act in

another position than

that of Municipal

Manager or

Departmental head

without no express

prior approval of the

Municipal Manager

having been obtained.

The following

employee was acting

without municipal

managers prior

approval: Mrs.

Bottoman

further compliance deviations. Management should ensure that prior approval by Municipal Manager for acting allowance is obtained before acting allowances being implemented.


APPENDIX A – COUNCILLORS; COMMITTE ALLOCATION AND COUNCIL ATTENDANCE

8. COAF.48 Employee Cost -

Non submission - Leave

Payments. Iss.67

- Information requested

by AGSA is not always

submitted timeously in

full as required per

request for

information. The leave

form of Mr JR

Ramatlama were not

submitted to AGSA.

Management should approve the change control standards and procedures document and compliance with the procedures and standards should be monitored regularly.

Director Corporate

Services

Ongoing

9. COAF 48 : Employee Cost -

Leave Payments made in the

incorrect financial year (Cut -

off )

- Payments are not

reviewed by senior

officials for correct

calculation

- Overpayments

incurred could result to

irregular and fruitless

expenditure

Management should ensure that payments are reviewed by senior official on regular basis to avoid overpayments incurred. Management should ensure that payments are made within the correct financial year.

Director Corporate

Services/ Financial

Services

Ongoing



Performance Bonuses , Per

Payroll differs to G/L or AFS

- The amount paid to

section 56 Directors as

Performance Bonuses

differs from the

amount as per payroll

and the amount

disclosed in the AFS

and General Ledger.


that adequate reconciliations

are performed between the

general ledger and payroll

and that differences are

cleared on a timely basis.

Director Financial Services Monthly

11. COAF 66 : Partial submission

of information requested on

RFI 63, 88 and 89(ISS97)

- RFI 63: Staff Leave

Provision – schedules

submitted did not

include opening

balances and

movements of the

number of days that

employees were

entitled to and that

were taken throughout

the financial period.


that leave reconciliations are

been done on a monthly

basis and reported.

Director Corporate

Services

Monthly



Performance Bonuses not

Disclosed in AFS

- Performance bonuses

paid to Directors was

never disclosed in the

Annual Financial

Statements as

required by Grap 20 of

Related Parties

Disclosure.

- The impact is

understatement of

Performance bonuses

by R 541 829.29

Management should have disclosed remuneration of management as required by Grap 20 - Related Party Disclosure.

Director Financial

Services

13. COAF 10. INFORMATION

TECHNOLOGY

GOVERNANCE: No IT

Governance Framework

developed. Iss.16

- Management of the

municipality did not

develop an IT

Governance

Framework. There

was also no IT

Governance

Risk and Governance Management should develop

an IT Framework to ensure

effective and efficient IT

Governance within the

Municipality.

Municipal Manager 30 June 2018


Framework for the

Maletswai and Gariep

municipalities before

the merger.


TECHNOLOGY

GOVERNANCE: No approved

IT Strategic Plan. Iss.17

- The organisation did

not have an approved

IT strategic plan to

ensure that its IT

operations would be

aligned to its business

and operational

objectives


that a staff member is

identified and the IT strategic

plan is developed and

approved.

Municipal Manager 30 June 2018


TECHNOLOGY

GOVERNANCE: No

Information Security Officer or

Corporate Governance

Champion responsible for IT.

Iss.18

- The entity did not have

a security officer.

Although, the function

Management should speed

up the placement process

and allocate a specific

employee to be responsible

to perform the security officer

functions.

Municipal Manager 28 February 2018


of a security officer

were performed by the

head of ICT at both

Aliwal North and

Burgersdorp

operations, there are

no formal roles

developed for the

combined Walter

Sisulu Local

Municipality.

16. COAF.10.INFORMATION

TECHNOLOGY

GOVERNANCE: No ICT

Committees established for the

Governance of IT. Iss.19

- ICT Committee had

not been establish to

accept the

responsibility for

oversight over policies

and procedures

governing the IT

environment.

Management should establish

the ICT Committee to ensure

proper oversight to ICT

policies and procedures.


17. COAF 10: INFORMATION

TECHNOLOGY

GOVERNANCE: No IT Risk

Management should speed

up the placement process

and allocate a specific



Register has been developed.

(Iss 20)

- An IT Risk register has

not been established

for the organisation.

Without an IT risk

register management

cannot adequately

manage risks

pertaining to IT.

employee to be responsible

to perform the security officer

functions.

18. COAF.10. SECURITY

MANAGEMENT: There is no

approved IT Policy. Iss.21

- A formally approved

information technology

(IT) security policy had

not been established

by management. The

informal processes

implemented were

inadequately designed

to ensure data

confidentiality, integrity

and availability.



identified and the IT policy is

developed and approved.


19. COAF 10. SECURITY

MANAGEMENT: No formal

Management should develop

an IT Framework to ensure

effective and efficient IT



document in place facilitating

patch management. Iss.22

- Security patches

address important

security issues in

between services

packs. If it is not

installed, systems are

exposed to

vulnerability that could

be exploited to gain

unauthorised access

to the systems.

Governance within the

Municipality.

20. COAF.10. USER ACCESS

CONTROL: No approved

process for granting access to

users (Sebata).Iss.23

Management should ensure that a user account management policy and related procedures are developed and implemented to ensure that:

- a single user access form is developed for all applications in use at the entity

- users who sign on to any application are required to have their own user IDs allocated to them

- the access allocation for new users, changes to existing users’ access and



Councillors, Committees Allocated and Council Attendance

procedures for dealing with resignations, terminations and retirements are clearly documented and managed

- time frames for notifying the staff of user movements are documented.

21. COAF 10. USER ACCESS

CONTROL: No formal

documentation required for

amending access rights for

users. Iss.24

- Processes were not in

place to ensure that

reviews would

periodically be

undertaken to

determine whether

employee’s current

access and privileges

on the system were

commensurate with

their job responsibility.

Management should ensure that a user account management policy and procedures are developed and documented.



22. COAF. 10. USER ACCESS

CONTROL: No formal periodic

review of user access. Iss.25

- No processes were in

place to ensure that

the activities of the

systems administrator

who granted user

access to the FMS

Sebata system and

the network are been

review.


that user account

management policy and

procedures are developed

and documented.


23. COAF.10.USER ACCESS

CONTROL: No independent

review of the Systems

Administrator(s). Iss.26



identified and the IT strategic

plan is developed and

approved.


24. COAF 10. PROGRAM

CHANGE MANAGEMENT: No

process facilitating upgrades to

the Sebata System. Iss.27

Application change control standards and procedures should be developed and should include key elements such as ensuring that updates are approved and tested prior to implementation. Management should approve the change control standards and procedures document



and compliance with the procedures and standards should be monitored regularly.

25. COAF 10: INFORMATION

TECHNOLOGY SERVICE

CONTINUITY: There is no IT

continuity and Disaster

Recovery Plan.(ISS28)

- An IT continuity plan designed to reduce the impact of a major disruption on key business functions and processes and disaster recovery plan (DRP) for recovering and resuming services had not been developed and approved.

-

An assessment should be made of the time required to replace hardware, software and all critical systems in order to resume normal processing after a disaster. The IT continuity plan and DRP should be compiled and be formally approved.


26. COAF.10 INFORMATION

TECHNOLOGY SERVICE

CONTINUITY: No backup and

retention strategy. Iss.29

- A backup and retention strategy that determines the types

Management should develop and implement a backup and retention strategy in line with contractual, legal/regulatory and business requirements.



Council Members

Full Time /

Committees Allocated

Percentage Apologies

of information to be backed-up, backup cycles and methods for backing up data and systems, together with the period it should be retained, has not been implemented.

27. COAF.32 Information

Technology General Control

Review: No Signed contract

with the service provider.

Iss.63

- During the general control assessment of the IT environment for the municipality, we noted that Walter Sisulu Local Municipality does not have a service level agreement signed with the financial management system service provider, Sebata Municipal Systems.

Management should put systems in place to renew or extend contracts with service providers well in advance, before expiry of existing contracts, should the services still be required.



Part Time

for non-attendance

28. COAF. 2. Planning: Lack of

consequence management.

Iss.2

- Municipality has not instituted disciplinary procedures for financial misconduct, and no investigations were made on prior year identified financial misconduct against any employee of the municipality.

Municipal council should establish a disciplinary board to investigate any financial misconduct within the municipality.


29. COAF 2. Planning: No

required minimum level of

competency for SCM officials.

Iss.3

Per the Municipal Regulations on Competency Levels for Unit Standards, it was noted that the official’s involved with procurement and contract management had not attained the required financial management competency levels.

Management should perform regular reviews of the applicable legislation and ensure that the Municipality complies with all the relevant legislation. Follow-ups with individual employees should be conducted in order to remain aware of the situation and ensure competencies can be met within a reasonable time frame.

Director Financial

Services/ Director

Corporate Services

Ongoing


30. COAF 2 Planning: No internal

audit function inplace for the

municipality. Iss.4

During the strategic planning phase of the audit it was noted that the municipality did not have a functioning internal audit unit during the period under review. The audit function has stopped audit work as result of not being paid by the municipality.

The municipality needs to develop an action plan such as signing of a payment arrangement or payment plan in dealing with the issue of non-payment to internal audit so that work can continue. In the interim, an internal auditor should be appointed to continue with as much of the audit plan as possible particularly focusing on those areas where the municipality has weaknesses.

Municipal Manager

31. COAF 2. Planning: Internal

controls: bank reconciliation no

prepared Iss.5

- During the planning stage of the audit we identified that bank reconciliation was not done for all municipal banks.

- Transfer of opening balances have not taken place, therefore reconciliation of bank to the system will not be correct until all

Management should ensure that opening balances are fixed soon as possible to easy the process of reconciliation for the bank.

Director Financial Services Monthly


system amounts have been transferred.

32. COAF 3. Planning - Receipts

daily cash summary deposited

not agrees to deposited

amount. Iss.6

- Proper banking system was not followed: Walkthrough test performed for daily cash summary dated 20 July 2016 amounted to 56 928.50 received by cashier was not deposited in full as per stamped deposit slip dated 21 July 2016, only R4 002.50 was deposited and therefore R52 926.50 could not be accounted for.

- Management should

ensure that money on the deposit slip does agrees to the daily cash summary

- Revenue received is not banked in full

Management should ensure that money on deposit slip agrees to the daily cash summary and is banked in full.

Director Financial Services


therefore bank account is understated.

33. COAF.2. Planning: Internal

control deficiencies

identified.Iss.7

- Municipal employees have

not signed declaration of interest for the new municipality.

- There is no proof that

municipality evaluates compliance by its employees with code of conduct. - No proof that municipal

manager and employees reporting directly to the municipal manager have signed performance contracts for Walter Sisulu Local Municipality for year ended 30 June 2017 - Municipality does not have a performance evaluation and monitoring in place - Municipality does not have

an IT governance

Management should ensure there are proper systems and controls in place to enhance control environment within the municipality

Municipal Manager


framework and IT policy in place

34. COAF.32. Irregular

expenditure: Scope limitation.

Iss.66

During the audit of the

disclosure item irregular

expenditure, we were not

provided with supporting

documents for the following

entries in the schedules:

- Aliwal Petroleum

- Aliwal Aluminium and

Glass cc

- Masscom Investments

- Gina Décor & Catering

Services

- Oranje dienste

- Skulpspruit Motors

- Steers Aliwal North

Management should

implement proper record

keeping in a timely manner to

ensure that complete,

relevant and accurate

information is accessible and

available to support financial

and performance reporting.


35. COAF.37 Unauthorised

expenditure: Incomplete

Expenditure disclosed. Iss.74

- During the audit of unauthorised

Management must ensure a full review of the annual financial statements before they are submitted to the various interested parties.



expenditure, we noted that the Sport and Recreation unit of the municipality spent R924 673, whereas there was no capital budget for it. This expenditure is not included in the unauthorised expenditure disclosed in the annual financial statements.

- Management did not

review the annual financial statements to ensure all presentation and disclosure is reflective of the circumstances it purports to depict.

36. COAF 39. Non-submission of

RFI 58 (Capital

Commitments)(ISS-79)

Management should






Director Financial

Services


Non submission of contracts of

the following contractors:

- Ngelethu Construction R2 471 747.80

- Negelethu Construction R 1 788 716.09

- Induscomm Power Project cc R448 547.97

- Inyameko Trading R9 776 290.59

- Tiro Trading Enterprise R12 517 271.59

- Abednego Mvelase Contractors R3 681 267.48

- Amadwala Trading 363 CC R5 606 755.70

- Mnqayana General construction R9 125 340.91

- Ukhwolayo Contractors R170 000.00

- Nduvho Construction R16 129 800.00

- ERMSA R4 739 193.18



37. COAF 50: Commitments -

Commitments not recorded in

the contract register(ISS84)

Management should ensure that controls are implemented and monitored over the financial reporting process

Director Financial

Services


The following commitments

were not included in the

contract:

- Ngelethu Construction

- R 2 471 747.80

- Ngelethu Construction

- R 1 788 716.09

- Induscomm Power

Project cc R 448

547.97

- Zoleka Estates

- R 3 434 675.38

- Pro Construction -

R 5 061 589.17

- Inyameko Trading -

R 780 900.00

- Ikageng Electrical -

R 3 803 024.75

- Inyameko Trading

R 9 776 291

- Kwalo Construction JV

Kantera Trading

Enterprises

R 3 771 649.53

- Tiro Trading

Enterprise

R12 517 271.59

- Ukhwolayo

Contractors

R 170 000.00

and review the process on a regular basis to ensure that it agrees with underline accounting records.


- Nduvho Construction

R 16 129 800.00

- ERMSA

R 4 739 193.18

38. COAF 72 :Cash flow statement

: Disagreement in the amount

disclosed in the cash

flow(ISS90)

-

Management must ensure

that there are effective

controls in place to reduce

the risk of error in the

preparation of Financial

Statements such as

independent reviews (by a

person who did not prepare

the AFS).

Director Financial

Services

39. COAF 50: Commitments :

Difference between amount on

commitment register and

signed contract(ISS85)

- The amount recorded

in the commitment

register is different

form the amount in the

signed contract for

Amadwala Trading

363 CC for the Brick

Paving of Streets in

Maletswai.

Management should ensure sufficient review is performed and that the supporting schedules agree to the AFS submitted.

Director Financial

Services


- Differences were noted in the recalculation of the Cash flow statements.

40. COAF 07 Noncompliance : No

functional internal audit

function and audit committee

function (Iss 9)

- In terms of the MFMA section 165, subsection (1) each municipality and each municipal entity must have an internalaudit unit, subject to subsection (3).

Management should ensure that there is a functional internal audit function and that the audit committee is appointed.

Director Financial

Services

41. COAF 21. Consequence

management: No

investigations conducted.

Iss.58

During the audit of consequence management, we could not find evidence of investigations with regards to the unauthorised,

Management should ensure the municipality complies with all applicable laws and regulations governing the municipality. Proper steps should be taken to recover the unauthorised, irregular, fruitless and wasteful expenditure, in order to prevent repeat offences.

Director Financial

Services


irregular, fruitless and wasteful expenditure incurred by the Maletswai and Gariep local municipalities in the prior year.

42. COAF 24 Compliance: No

Section 32(4) reports

submitted (Iss 62)

Section 74(1) of the MFMA states that the accounting officer of a municipality must submit to the AGSA such information, returns, documents, explanations and motivations as may be prescribed or as may be required.

During the audit of unspent conditional grants, we had requested supporting invoices on 24 November 2017 per RFI 83 which the municipality partially provided.

Management should








Director Financial

Services


43. COAF 68 : Late submission of

AFS(ISS104)

The following was noted during the AFS Compliance evaluation: 1.The municipality did not submit the Annual Financial Statement at 31 August 2017 and the reasons for non-submission were not provided. 2. The municipal council did not do the following: i) request the speaker or any other councillor to investigate the reasons for the failure to submit annual financial statements ii) took appropriate steps to ensure that the financial statements were submitted to the Auditor-General.

Management should ensure that they comply with applicable laws and regulations

Municipal Manager

1. COAF 70:Compliance: No

evaluation of municipal

performance respect of

Management should ensure that they comply with the applicable legislation by performing

Municipal Manager


programmes funded by the

MIG(ISS105)

The receiving officer must evaluate the financial and nonfinancial Performance of the provincial department or municipality, as the case maybe, in respect of programmes partially or fully funded by a Schedule 5 allocation and submit such evaluation to the transferring officer and the relevant Provincial treasury within two months after the end of the 2017/18 financial year applicable to a provincial department or a municipality, as the case maybe. During the compliance testing of utilisation of grants, identified that the municipality has not performed an evaluation of the municipality's performance in respect of the programmes funded by the MIG.

an evaluation of municipal performance in respect of programmes funded by the MIG.


2. COAF 71: Human Resource

ComplianceISS106)

- No evidence could be obtained to confirm that the council has appointed Acting Municipal Manager or Municipal manager on the first council meeting of Walter Sisulu local municipality as prescribed by section 82 of the act and Provincial notice 148

The council should at its next council meeting appoint an acting municipal manager or municipal manager as prescribed by of the act.

Director Corporate

Services

3. COAF 22. GRAP Checklist:

Differences identified in the

annual financial statements

and the schedules submitted.

Iss.64

- Per inspection of the

annual financial

statements (AFS) and

the supporting

schedules there were

various differences

Management should ensure sufficient review is performed and that the supporting schedules agree to the AFS submitted.

Director Financial

Services


FT/PT Ward and/or Party Represented

No. of meetings held

No. of not meetings attended

No. of apologies submitted

Percentage meetings not attended

identified as attached

in annexure

4. COAF 59: Reconciliations of

consumer deposits not

performed adequately(ISS 59)

- During the audit of consumer deposits, we had requested the consumer deposits reconciliation on 16 November 2017 per RFI 80 upon inspection thereof, were found to be performed inadequately.

- The general ledger column in the reconciliation was not completed and there was no evidence of approval by a senior official.

Management should perform monthly reconciliations of the Consumer deposit account and evidence approval by a senior official.

Director Financial

Services


5. COAF 62: Unspent Conditional

Grants: Supporting invoices

not submitted(ISS95)

- During the audit of unspent conditional grants, we had requested supporting invoices on 24 November 2017 per RFI 83 which the municipality partially provided.

Management should








Director Financial

Services

6. COAF 60 Non-Submission of

supporting documents (

Opening balances) (Iss 96)

Section 74(1) of the Municipal Finance Management Act (MFMA) states that "The accounting officer of a municipality must submit to the National Treasury, the provincial treasury, the department for local government in the province or the Auditor-General such information,

Management should ensure that they provide the information requested by Auditor General (SA) as agreed in the engagement letter

Directors Financial

Services


% %

B Khweyiya FT PR = ANC Council 6 5 0 17% 0%

Exco 1 1 0 0% 0%

returns, documents, explanations and motivations as may be prescribed or as may be required

We requested supporting documented for adjustment passed to opening balances (refer to note 44), however management provided the journals but not supporting documents for these journals.

7. COAF 44- Journals Non-

submission(ISS100)

During the execution stage of

the audit, the following

information was requested RFI

64 of 2017 that was due

FRIDAY on 27 October 2017.

Non submission of information.

Management should








Director Financial

Services


Community Services

1 0 0 100% 0%

8. COAF 28. Expenditure :

Inconsistency identified in

Subsistence and allowance

{Iss.59}

- The lack of proper review of the invoices included in the bulk purchases expenditure account.

- The lack of consistency in the allocation of provision amount

Management should ensure that:

Only invoice relating to the current period are included in the current year’s financial statements.

Consistency is maintained in recording of the bulk purchase expenditure.

Director Financial

Services


Limitation of scope {Iss.60}

Non – submission of journals

requested in RFI 33

Management should ensure that they provide the information requested by Auditor General (SA) as agreed in the engagement letter

Director Financial

Services


Inconsistency identified in Bulk

Purchases {Iss.61}

Management should








Director Financial

Services


11. COAF.26 Limitation of scope:

Incomplete submission of

requested information. Iss.69

Based on no submission the following misstatement has been identified during the testing of Finance Charges:

UNWINDING OF INTEREST

ON - 599,486

PROV ESKOM ACC JUNE(2)

20 - 88,857

RECOGNISE INTEREST AND

CU - 2,269,206

Management should








Director Financial

Services

12. COAF 36.Expenditure :

Expenditure not paid within 30

days {Iss.76}

During the testing performed on expenditure, noted that identified expenditure was not paid within 30 days:

Management should ensure that:

Only invoice relating to the current period are included in the current year’s financial statements

Invoice are stamped upon the receipt by the municipality.

Director Financial

Services


13. COAF 36. Expenditure:

Inconsistency in expenditure

identified. {Iss.77

In the audit of expenditure the following inconsistencies were identified:

VAT charge on Non VAT supplier

Three Quotations not sourced from different suppliers

No three Quotation sourced from different suppliers and no deviation attached to the payment voucher.

No three quotations and the deviation state that the suppliers are the only suppliers while there are suppliers of the same goods/services.

Supplier’s contract extension was approved after the service have been rendered.

Vouchers were recorded and cancelled in the General Ledger.

Management should ensure that there is an adequate review of expenditure captured in the general ledger.

Director Financial

Services


Payment as per the system does not agree to the payment as bank statements, the remittances show that the payment was captured and signed for before the invoice date.

No evidence of the approval for the reversal of the journal.

No invoice attached of the outstanding amount paid above the invoice amount.

14. COAF.34 Payables from

exchange transactions -

Limitation of Scope.(ISS71)

Non – submission of

supporting documents

Management should








Director Financial

Services

15. COAF.14 Limitation of Scope -

No supporting evidence for the

LED indicators(issue 37)

Information to support indicators reported in the Annual Performance Report

Management should implement control measures to ensure that all records are kept and recorded on the timely manner.

Municipal Manager


for Local Economic Development program were not submitted for audit purposes posing a limitation on verifying whether the indicator disclosed is complete, valid and accurate.

The supporting evidence for the following indicators was requested:

Number of Tourism establishment database maintained

Number of Tourism initiative undertaken

Percentage of SMMES Benefiting from the municipal supply chain process

Management should ensure that a portfolio of evidence is kept by each directorate for indicators and targets reported.

Management should implement control measures that will ensure continuous update of portforlio of evidence i.e monthly reports

16. COAF.29. AOPO Limitation:

None submission of

information to support basic

services targets achieved.

Iss.43

Information to support indicators reported in the

Management should implement control measures to ensure that all records are kept and recorded on the timely manner.

Management should ensure that a portfolio of

Municipal Manager


Strat Plan & Economic Development

1 1 0 0% 0%

Annual Performance Report for Basic services program were not submitted for audit purposes posing a limitation on verifying whether the indicator disclosed is complete, valid and accurate.

evidence is kept by each directorate for indicators and targets reported.

Management should implement control measures that will ensure continuous update of portforlio of evidence i.e monthly reports

17. COAF 11 : Procurement: Non-

compliance with section 20 of

the supply chain management

policy(Aliwal Sound)(ISS12)

During the audit of procurement, we noted that a transaction with a procurement value of more than R200 000 (including VAT) did not go through the competitive bidding process, as required by the above quoted section of the supply chain management policy.

Management should ensure that the before approving each procurement transaction, the requirements of the supply chain management policy are complied with, which is also in compliance of the Municipal Supply Chain Management Regulations.

Director Financial

Services


18. COAF 11 Procurement: Three

quotations not obtained (Iss

13)

During the audit of procurement, we noted transactions which did not follow the supply chain management practice of obtaing three quotations, as required by the above section of the policy.


Director Financial

Services

19. COAF 13 Procurement: Non-

compliance with section 20 of

the supply chain management

policy (Kimjer Motors and

Workshop Elec) Iss 30

During the audit of procurement, it was noted that some transactions with a procurement value of more than R200 000 (including VAT) did not go through the competitive bidding process, as required by the above


Director Financial

Services


quoted section of the supply chain management policy.

20. COAF 13:Procurement:

Procurement documents

(Value between R2000.00 -

R10 000.00)(ISS32)

During the audit of procurement, we had requested the appropriate documentation to assess compliance with legislation, through request 7. We were not provided with the documentation for the following transactions;

- Ntlakohlaza Travel

agency

- Aliwal Printers

Management should








Director Financial

Services

21. COAF 13:Procurement:

Deviations from supply chain

processes not approved by the

Accounting Officer.(ISS33)

During the audit of supply

chain management, we noted

Management must ensure that all the transactions the municipality enters into comply with all the applicable laws and regulations. A compliance specialist may be

Director Financial

Services


several cases of deviations

from the normal supply chain

management processes, which

did not comply with the stated

requirements, which either

were not approved by the

Accounting Officer, no

application for deviation was

applied for

appointed or an existing position strengthened.

22. COAF 17 Procurement:

Possible fictitious suppliers

(Iss 45)

During the audit of

procurement, we noted cases

of possible fictitious suppliers

due to shared information.

Management must ensure that suspected cases of duplicated information relating to suppliers is thoroughly investigated, to avoid non-compliance with procurement prescripts.

Director Financial

services


Expired contract without an

extension or modification (Iss

46)

During the audit of contract management, we noted that the contract register indicates that the contract with Abednego Mvelase

Management must ensure that the municipality has a system in place to monitor all active contracts, and completed contracts are reflected as such on the contract register.

Director Financial

Services


Contractors is still active, despite it having expired on 29 July 2015. We could not find evidence of an extension, in compliance with Section 116(3) of the MFMA.

24. COAF 18:

Procurement(contract

management):No monitoring

on contracts(ISS47)

During the audit of contract management, we could not find evidence that the municipality conducted contract monitoring on the agreements entered into with the following service providers;

Park Point

Abednego Mvelase Contractors

AON South Africa (Pty) Ltd

SKC Engineers Maletswai CC

Lekeba Security Services & Training

Management must ensure that the municipality has a system in place to monitor all active contracts, and completed contracts are reflected as such on the contract register.

Director Financial

Services


KS Lange PT Ward 11 Council 6 5 0 17% 0%

Primedia Outdoor (Pty) Ltd

Buzaphi

Ikageng Electrical Contractors

KET Civils

Tiro Trading enterprise

Amadwala Trading cc 25.

COAF

18:Procurement(Contract

Management):No contracts

and record of payments

provided(ISS48)

The following is a list of the contractor for which payment information and the actual contracts were not provided;

Abednego Mvelase Contractors

AON South Africa (Pty) Ltd (no payment information)

SKC Engineers Maletswai CC

Management should implement proper record keeping in a timely manner to ensure that complete, relevant and accurate information is accessible and available to support financial and performance reporting.

Director Financial

Services


Lekeba Security Services & Training

Primedia Outdoor (Pty) Ltd

Buzaphi

Ikageng Electrical Contractors

KET Civils

Tiro Trading enterprise

Amadwala Trading cc 26.

COAF 31 Procurement:

Decision of the bid evaluation

committee overruled without

ratification (Iss 49)

During the audit of supply chain management, for the procurement of laptops (notice number 13/2016-17), we noted that the bid evaluation committee on 28 March 2017 had resolved to award the bid to Goshuma Trading Enterprise (highest points and lowest price), but the bid adjudication committee resolved to

Management should ensure the municipality complies fully with all applicable laws and regulations before proceeding with transactions. The members of the bid committees must be capacitated to have a basic understanding of the relevant prescripts.

Director Financial

Services


award the bid to Imbutho Designs, without complying regulation 29(5)

27. COAF 31 Procurement: No bid

adjudication committee

appointed (Iss 50)

- During the audit of supply chain management, we noted that a bid adjudication committee was not set up for the procurement of logo designs. The award was granted to Mzobo Designs, in the absence of the decision making committee.


the municipality complies fully

with all applicable laws and

regulations before proceeding

with transactions

Director Financial

Services

28. COAF 31 Procurement: No

Declaration of interest

submitted by a bidder. (Iss 51)

- During the audit of supply chain management, we noted that the supplier awarded





with transactions

Director Financial

Services


VD Davids PT PR = ANC Council 6 5 0 17% 0%

the bid for the supply of facilitation of a strategic session for the Walter Sisulu Local Municipality, Lwakhula Ulwazi Consulting, did not submit form MBD 4, which outlines their declaration of interest.


Advertisement only open for 8

days (Iss 52)

- During the audit of supply chain management, we noted that the invite for the supply of facilitation of a strategic session for the Walter Sisulu Local Municipality, was advertised in the Aliwal Weekblad on 11 April 2017 and closed on 18 April





with transactions

Director Financial

Services


2017, which is less than 14 days.

30. COAF 31 Procurement: Bid

adjudication committee not

properly constituted (Iss 53)

- During the audit of supply chain management, we noted that the bid adjudication committee for the bid to find a service provider to facilitate a strategic session for the municipality, awarded to Lwakhula Ulwazi Consulting, only consisted of two officials, the chief financial officer and a supply chain management official.





with transactions

Director Financial

Services

31. COAF 31 Procurement: No Bid

evaluation committee in

established (Iss 54)

- During the audit of supply chain

Management should ensure the municipality complies fully with all applicable laws and regulations before

Director Financial

Services


management, we noted that a bid evaluation committee was not set up for the procurement of a facilitator for a strategic session for the municipality. The award was granted to LWakhula Ulwazi Consulting.

proceeding with transactions


declaration of interest

submitted by suppliers (Iss 55)

During the audit of supply chain management, we noted that awards were granted to the following suppliers, in the absence of declarations of interest:

- Sparks and Ellies (Order number 26179

- Alberts Nissan (ORD 25356)

- Cecil Nurse (ORD 660)

- Putcomafani Consulting (Order number 670)

Management should ensure the municipality complies fully with all applicable laws and regulations before proceeding with transactions

Director Financial

Services


- Vodacom (Order number 26150)

- Imbokotho Mkhonto Security (Order number 26210)

- Ntlakohlaza Travel agency (Order number 26201)

- Computers @Stephenson's (Order number 26206)

- Thlabo Ya Letsatsi & Projects (Order number 434)

- Pinlimbe General Trading & Services (Order number 664)

- NTF Tent Hire CC (Order number 500)

- Walaza Music (Pty) Ltd (Order number 675)


payment documentation

provided (Iss 56)

- During the audit of supply chain management, we were not provided with payment

Management should ensure the municipality complies fully with all applicable laws and regulations before proceeding with transactions.

Director Financial

Services


vouchers for the awards given to Pinlimbe General Trading & Services (R20 000.00) and NTF Tent Hire CC (R14 500).


advertisements placed (Iss 57)

During the audit of supply chain management, we were not provided with evidence that the following awards were advertised for 7 days;

- Sparks and Ellies - Alberts Nissan - Cecil Nurse - Imbokotho Mkhonto

Security

Management should ensure the municipality complies fully with all applicable laws and regulations before proceeding with transactions.

Director Financial

Services


Supplier not from the database

(Iss 72)

- During the audit of procurement, we identified that

Management should ensure that the municipality complies with all relevant laws and regulations in relation to procurement.

Director Financial

Services

Ongoing


services were procured from Mr Reiner (Phycology Practice), who does not appear in the supplier database of the municipality.

- Management did not

review procurement processes to ensure all procurement processes are complied with.


Contract not awarded to bidder

scoring the highest points (Iss

73)

- During the audit of procurement, on consideration of the preferential points for the procurement of a service provider to design a logo for the municipality, we noted that the contract was awarded to Mzobo

Management should ensure that the municipality complies with all relevant laws and regulations, particularly those that relate to procurement.

Director Financial

Services


Designs, who scored 38.82 points, instead of Imbutho Designs, who had scored 100 points. We did not obtain evidence that the requirements of Section 2(1)(f) of the PPPFA were complied with.

37. COAF 67 : Use of Consultants:

No evidence of transfer of

skills to the municipal

employees(ISS103)

The management does not review on an annual basis, whether the objectives of the institution are better achieved through use of consultants or permanent staff. No evidence could be submitted to the auditors as evidence of performing the reviews. No evidence could be found that the municipality is trying to do away with the consultants

Management should review, at least on an annual basis, whether the objectives of the institution are better achieved through use of consultants or permanent staff. Managers should ensure that they train their internal staff to ensure continuity and service delivery.

Managers should analyse the extent of the use of consultants and this will assist them in identifying instances of over reliance on consultants and possibly form the basis for

Director Financial

Services


and employ or train the internal staff.

2. No evidence could be found that the municipality analyses the extent of the use of consultants. 3. There is also no evidence of skills transfer

the consultancy reduction plan

38. COAF 65: Receivables -

Limitation of scope on

impairment

During the audit of receivables

differences were identified

between AFS and age analysis

provided. A further difference

was identified in the

recalculation of provision for

impairment as per calculation

provided

The municipality did not adjust the AFS with adjusting journals at the date of the merger - 06 August 2016 resulting in

Management should ensure that adjustment journals are done timeously to reflect correct amounts in the AFS which corresponds to supporting schedules.

Director Financial

Services


incorrect balances used to calculate impairment provision

39. COAF 49: Receivables from

non-exchange: Non-

Submission of supporting

schedules ISS.101

During the testing of receivables from non-exchange, the balances were not supported by schedules

Management should ensure that all line items on the statement of financial position are supported by valid, accurate and complete supporting schedules.

Director Financial

Services

40. COAF 08 Limitation of scope:

Incomplete submission of

requested information. Iss 31

- Not received allocation letters from the District which indicates whether there are any grants allocated to Walter Sisulu Local Municipality.

- None submission of evidence to support the Percentage of a

Management should implement proper record keeping in a timely manner to ensure that complete, relevant and accurate information is accessible and available to support financial and performance reporting

Director IPED 30 June 2018


municipality’s capital budget actually spent on capital projects identified

- None submission of evidence to support the Number of Service level Agreement signed with the DSRAC for library services

41. COAF.25 Revenue from non-

exchange - Limitation of

scope. Iss.68

- Non submission of

business plans

(ECDLGTA and Joe

Gqabi District

municipal grant

business plans)

Management should implement proper record keeping in a timely manner to ensure that complete, relevant and accurate information is accessible and available to support financial and performance reporting

Director Financial

Service

Monthly

42. COAF.33 Revenue from non-

exchange - fines. Iss.38

- We noted that cash received from fines was recorded more

Management should implement proper record keeping in a timely manner to ensure that complete, relevant and accurate information is accessible and available to support

Director Financial

Services

Monthly


Corporate Service

1 1 0

0% 0%

Exco 1 1 0 0% 0%

than once in the general ledger.

- A system error occurred when excel spreadsheet for revenue was uploaded into the system. Excel information was not reconciled prior to uploading into the system to ensure accuracy

- This results in overstatement of revenue and overstatement of receivables from non-exchange.

T- he projected misstatement is R24,653.09

financial and performance reporting



1 1 0

0% 0%

N Ngubo PT PR = ANC

Council 6 5 0 17% 0%

Technical Services

2 2 0

0% 0%

Exco 1 1 0 0% 0%


1 1 0

0% 0%

ZG Mqokrwana

PT Ward 2

Council 6 5 0 17% 0%

Corporate Service

6 0 0

100% 0%

MPAC 1 1 0 0% 0%

ZD Mangali PT Ward 1

Council 6 5 0 17% 0%

Financial Service 2 1 0 50% 0%

MPAC 1 1 0 0% 0%

BM Ndika PT Ward 3

Council 6 4 0 33% 0%

Technical Service 6 4 0 33% 0%

Performance 0 0 0 0%

MPAC 1 1 0 100% 0%

MN Solani PT Ward Four (4)

Council 6 5 0 17% 0%

Corporate Services

1 1 0

0% 0%


Rules and Ethics 0 0 0 0%

Strat Plan & Development

1 1 0

0% 0%

MPAC 1 1 0 0% 0%

L Nkunzi PT Ward Five (5)

Council 6 5 0 17% 0%

Community Services

2 2 0

0% 0%

ZE Masina PT Ward Six (6)

Council 6 5 0 17% 0%

Financial Services

2 2 0

0% 0%

M Mdumisa PT Ward Seven (7)

Council 6 5 1 17% 0%

Financial Services

2 2 0 0% 0%

X Mabusela PT Ward Eight (8)

Council 0%

Community Services

6 3 3 50% 0%

Technical Services

2 2 0 0% 0%

DT De Jong PT Ward Nine (9)

Council 6 5 1 17% 0%

Corporate Services

1 1 0 0% 0%

MW Mokhoabane

PT Ward Ten (10)

Council 6 5 1 17% 0%

Technical Services

2 2 0 0% 0%


M Mtshingana PT PR = ANC

Council 6 5 1 17% 0%

Community Services

1 1 0 0% 0%

Rules & Ethics 0 0 0 0%

Y Zweni PT PR = ANC

Council 6 5 1 17% 0%

Corporate Services

1 0 0 100% 0%

Rules & Ethics 0 0 0 0%

DF Hartkopf PT PR = DA

Council 6 5 0 17% 0%

Financial Services

2 2 0 0% 0%

Exco 1 1 0 0% 0%

Strat Plan & Development

1 1 0 0% 0%

MDR Nel PT PR = DA Council 6 4 0 0%

E Theron PT PR = DA

Council 6 5 1 17% 0%

Community Services

1 1 0 0% 0%

AJ Van Heerden

PT PR = DA Council 6 5 0 0%

VA Schoeman PT PR = EFF

Council 7 4 3 43% 0%

Financial Services

2 1 1 50% 0%

MPAC 1 1 0 0% 0%


M Jan

PT

PR = MCA

Council 6 4

2 33%

0%

Financial Services

0 0 0 0%

Technical Services

1 0 1 0%


APPENDIX B – COMMITEES AND COMMITTEE PURPOSES

Committees (other than Mayoral/Executive Committee) and Purpose of

Committees

Municipal Committees Purpose of Committee

Corporate Services Standing

Committee

To play an oversight role in ensuring municipal

transformation, institutional development and

good governance

Financial Services Standing

Committee

To ensure good financial management and

viability, transparency and openness

Technical Services Standing

Committee

To provide effective and efficient, sustainable

technical and quality basic services

Community Services Standing

Committee

To provide effective and efficient, sustainable

basic health and social services

IPED Standing Committee To ensure good and sustainable planning tools

and methods within the municipality.

Municipal Public Accounts

Committee (MPAC)

To exercise oversight and accountability to ensure

that programmes and plans are implemented in a

way that is consistent with policy, legislation and

the dictates of the constitution.

Bid Adjudication Committee To adjudicate over tenders awarded and ensure

transparency, fairness, equitable, competitive and

cost effective and comply with prescribed

regulatory framework for municipal supply chain

management.

Audit Committee To advise the municipal council, the accounting

officer and the management staff of the

municipality and review the annual financial

statements to provide the council with an

authoritative and credible view of the financial

position of the municipality and perform other

duties as may be prescribed.

Performance Appraisal

Committee

To assess, monitor, measure, review, manage

and reward performance of s57 managers with a

view of achieving stated objectives and levels of

performance.

Budget Steering Committee To provide general political guidance over the

budget process and the priorities that must guide


Committees (other than Mayoral/Executive Committee) and Purpose of

Committees

Municipal Committees Purpose of Committee

the preparation of a budget and coordinate annual

revision of the IDP.

Employment Equity & Skills

Development Committee

To coordinate and manage employment equity

and monitor the implementation of skills

development plans in the work place in

compliance the prescribed legislations.

Local Labour Forum Committee To create and maintain a healthy relationship with

labour.

Occupational Health & Safety

Committee

To ensure a safe and secure working environment

by implementation of the Occupational Health and

Safety Policy.

APPENDIX C –THIRD TIER ADMINISTRATIVE STRUCTURE

Third Tier Structure

Directorate Director/Manager (State title and name)

Corporate Services

Department

Director Corporate Services

Vacant

Financial Services

Department


Thomas Maseko - (Contract ended 28/04/2017)

Vacant

Budget & Treasury Office Manager

Unathi Peter (Acting CFO)

Community Services

Department

Director: Community Services

Zolani Eric Pungwani

IPED Director: IPED

Ntati Belina Belinda Mokhantso

Technical Services

Department

Director: Technical Services

Zolile Nongene

Assistant Director: Technical Services

(Electricity)

Joseph Sello Mosenene

Assistant Manager: Technical Services (civil)


Vacant

APPENDIX D – FUNCTIONS OF MUNICIPALITY

Municipal

MUNICIPAL FUNCTIONS Functions Applicable to Municipality (Yes/No)

Constitution Schedule 4, Part B functions:

Air pollution Yes

Building regulations Yes

Child care facilities Yes

Electricity and gas reticulation Yes

Firefighting services Yes

Local tourism Yes

Municipal airports/aerodrome Yes

Municipal planning Yes

Municipal health services No

Municipal public transport Yes

Municipal public works only in respect of the needs of municipalities in the discharge of their responsibilities to administer functions specifically assigned to them under this Constitution or any other

Yes

Pontoons, ferries, jetties, piers and harbours, excluding the regulation of international and national shipping and matters related

No

Storm-water management systems in built-up areas Yes

Trading regulations Yes

Water and sanitation services limited to potable water supply systems and domestic waste-water and sewerage disposal systems

No

Schedule 5, Part B functions:

Beaches and amusement facilities Yes, amusement facilities only

Billboards and the display of advertisements in public places

Yes

Cemeteries, funeral parlours and crematoria Yes

Cleansing Yes

Control of public nuisances Yes


Control of undertakings that sell liquor to the public Yes

Facilities for the accommodation, care and burial of animals

Yes

Fencing and fences Yes

Licensing of dogs Yes

Licensing and control of undertakings that sell food to the public

Yes

Local amenities Yes

Local sport facilities Yes

Markets Not Applicable

Municipal abattoirs Yes

Municipal parks and recreation Yes

Municipal roads Yes

Noise pollutions Yes

Pounds Yes

Public places Yes

Refuse removal, refuse dumps and solid waste disposal

Yes

Street trading Yes

Street lighting Yes

Traffic and parking Yes

If municipality: indicate (Yes or No); If entry: Provide name of entity

APPENDIX E – WARD REPORTING

Functionality of Ward Committees

Ward Name

(Number)

Name of Ward

councillor and

elected Ward

committee

members

Committ

ee

establish

ed

(Yes/No)

Number of

monthly

Committe

e

meetings

held

during the

year

Number of

monthly

reports

submitted

to

Speakers

office on

time

Number of

quarterly

(Monthly)

public ward

meetings held

during the

financial year

One (1) Cllr ZD Mangali Yes Please

refer

below for

details

Please

refer

below for

details

Please refer

below for

details

AB Mbeka Yes

EN Makasi Yes

D Gxalaba Yes



Ward Name

(Number)

Name of Ward

councillor and

elected Ward

committee

members

Committ

ee

establish

ed

(Yes/No)

Number of

monthly

Committe

e

meetings

held

during the

year

Number of

monthly

reports

submitted

to

Speakers

office on

time

Number of

quarterly

(Monthly)

public ward

meetings held

during the

financial year

R Labuschagne Yes

TF Thompson Yes

NT Gcuku Yes

M Nthsinga Yes

M Alexander Yes

NS Lidziya Yes

Two (2) Cllr Z

Mqokrwana

Yes Please

refer below

for details

Please

refer below

for details

Please refer

below for

details

M Notyeke Yes

R Bentley Yes

SB Phike Yes

L Futshane Yes

MJ Notyeke Yes

M Gxekwa Yes

VR Kamana Yes

S Tyokolo Yes

N Xelegu Yes

Yes

Three (3) Yes Please

refer below

for details

Please

refer below

for details

Please refer

below for

details

N Tsobileyo Yes

A Makhoba Yes

N Makhoba Yes

N Ntlodi Yes

N Ramashala Yes

S Mnikina Yes



Ward Name

(Number)

Name of Ward

councillor and

elected Ward

committee

members

Committ

ee

establish

ed

(Yes/No)

Number of

monthly

Committe

e

meetings

held

during the

year

Number of

monthly

reports

submitted

to

Speakers

office on

time

Number of

quarterly

(Monthly)

public ward

meetings held

during the

financial year

S Silwana Yes

P Mohapi Yes

N Mngxuma Yes

L Malangeni Yes

Four (4)

Cllr MN Solani

Yes Please

refer below

for details

Please

refer below

for details

Please refer

below for

details

GLZ Mzenene Yes

B Jotina Yes

VP Kolanisi Yes

L Diniso Yes

S Mpande Yes

T Mbi Yes

P Khanzi Yes

F Geza Yes

M Khweyiya Yes

Yes

Five (5)

Yes Please

refer below

for details

Please

refer below

for details

Please refer

below for

details

Z Wele Yes

S Silo Yes

G Jika Yes

A Redeiro Yes

DC Radford Yes

L Prens Yes

L Prens Yes

L Shoba Yes

MJ Nkothani Yes



Ward Name

(Number)

Name of Ward

councillor and

elected Ward

committee

members

Committ

ee

establish

ed

(Yes/No)

Number of

monthly

Committe

e

meetings

held

during the

year

Number of

monthly

reports

submitted

to

Speakers

office on

time

Number of

quarterly

(Monthly)

public ward

meetings held

during the

financial year

T Moleka

L Anderson

Six (6) Cllr Z Masina Yes Please

refer below

for details

Please

refer below

for details

Please refer

below for

details

N Ganyaza Yes

M Ramokepa Yes

L Noyo Yes

M Magopheni Yes

L Masina Yes

A Madikwa Yes

M Kwinana Yes

T Matlotlo Yes

M Nzongeni Yes

T Bango Yes

T Plaatjie(CDW) Yes

Seven (7) Cllr M Mdumisa Yes Please

refer below

for details

Please

refer below

for details

Please refer

below for

details

SB Mpela Yes

RF Monaheng Yes

S Stragon Yes

S Tyongo Yes

LE Mbuli Yes

KH Mathunya Yes

NE Matyunjwa Yes

NG Mqela-

Ntshobodi

Yes

TM Olifant Yes



Ward Name

(Number)

Name of Ward

councillor and

elected Ward

committee

members

Committ

ee

establish

ed

(Yes/No)

Number of

monthly

Committe

e

meetings

held

during the

year

Number of

monthly

reports

submitted

to

Speakers

office on

time

Number of

quarterly

(Monthly)

public ward

meetings held

during the

financial year

Eight (8) Cllr X Mabusela Yes Please

refer below

for details

Please

refer below

for details

Please refer

below for

details

N Meje Yes

N Malgas Yes

S Mawonga Yes

T Gaba Yes

N Paul Yes

M Liwani Yes

Stuurman Yes

S Jaza Yes

M Mbele Yes

M Mtabane Yes

F Makisi (CDW) Yes

Nine (9) Yes Please

refer below

for details

Please

refer below

for details

Please refer

below for

details

P Letuka Yes

E Pretorius Yes

M Kula Yes

S Ruiters Yes

S Wood Yes

N Ndulula Yes

N Pretorius Yes

TA Sithukuza Yes

DG Heynes Yes

Yes



Ward Name

(Number)

Name of Ward

councillor and

elected Ward

committee

members

Committ

ee

establish

ed

(Yes/No)

Number of

monthly

Committe

e

meetings

held

during the

year

Number of

monthly

reports

submitted

to

Speakers

office on

time

Number of

quarterly

(Monthly)

public ward

meetings held

during the

financial year

Yes

Ten (10) Cllr MW

Mokhoabane

Yes Please

refer below

for details

Please

refer below

for details

Please refer

below for

details

PC Seleke Yes

BS Dumsela Yes

T Matlotlo Yes

L Marhawule Yes

N Siyale Yes

D Morake Yes

A Motlhokoa Yes

Z Ngantweni Yes

S Kolomba Yes

K Morake Yes

Eleven (11) Cllr KS Lange Yes Please

refer below

for details

Please

refer below

for details

Please refer

below for

details

NS Nkani Yes

N Thulelo Yes

R Ntintili Yes

W Tamane Yes

M Boyana Yes

Baatyi Yes

B Mafo Yes

E Heyns Yes

T Sdindi Yes



Ward Name

(Number)

Name of Ward

councillor and

elected Ward

committee

members

Committ

ee

establish

ed

(Yes/No)

Number of

monthly

Committe

e

meetings

held

during the

year

Number of

monthly

reports

submitted

to

Speakers

office on

time

Number of

quarterly

(Monthly)

public ward

meetings held

during the

financial year

PS Olifant Yes


WARD 1 Jul-16 Aug-

16 Sep-

16 Oct-

16 Nov-

16 Dec-

16 Jan-

17 Feb-

17 Mar-

17 Apr-

17 May-

17 Jun-

17

No. of meetings attended

Cllr ZD Mangali 1 1 1 1

AB Mbeka 1 1 1 1

EN Makasi 1 1 1 1

DT Gyalaba 1 1 1 1

T Mncayi 1 0 1 1

TF Thompson 1 1 1 1

NT Gcuku 1 1 1 1

MB Ntominga 1 1 1 1

M Alexander 1 1 1 1

NS Lidziya 1 1 1 1


WARD 2 Jul-

16 Aug-16

Sep-16

Oct-16

Nov-16

Dec-16

Jan-17

Feb-17

Mar-17

Apr-17

May-17

Jun-17


Cllr Z Mqokrwana 1 1 1

M Notyeke 1 1 1

R Bentley 1 1 1

SB Phiko 1 1 1

L Futshane 1 1 1

MJ Notyeke 1 1 1

M Gxekwa 1 1 1

VR Kamana 1 1 1

S Windvoel 1 1 1

T Jada 1 1 1

S Tyokolo 1 1 1

1 1 1


WARD 3 Jul-

16 Aug-

16 Sep-

16 Oct-

16 Nov-

16 Dec-

16 Jan-

17 Feb-

17 Mar-

17 Apr-

17 May-

17 Jun-

17


Cllr B Ndika 1 1 1 1

Nombulelo Nngxumo 1 1 1 1

Andiswa Makhoba 1 1 1 1

Puseletso Mohapi 1 1 1 1

Nokosinathi Tsobileyo

1 1 1 1

Sivuyila Mnikina 1 1 1 1

Sindiswa Silwani 1 1 1 1

M Mhondi 1 1 1 1

X Gumente 1 1 1 1


WARD 4 Jul-

16 Aug-

16 Sep-

16 Oct-

16 Nov-

16 Dec-

16 Jan-

17 Feb-

17 Mar-

17 Apr-

17 May-

17 Jun-

17


Cllr MN Solani 1 1 1

GLZ Mzenene 1 1 1

B Jotina 1 1 1

VP Kolanisi 1 1 1

L Diniso 1 1 1

S Mpande 1 1 1

T Mbi 1 1 1

P Khanzi 1 1 1

V Arends 1 1 1

F Geza 1 1 1

M Khweyiya 1 1 1


WARD 5 Jul-

16 Aug-

16 Sep-

16 Oct-

16 Nov-

16 Dec-

16 Jan-

17 Feb-

17 Mar-

17 Apr-

17 May-

17 Jun-

17


Cllr L Nkunzi 1 1 1 1

Silo Sandile 1 1 1 1

Lulama Shoba 1 1 1 1

Nzimeni George 1 1 1 1

Wele Zibongile 1 1 1 1

Lulama Prens 1 1 1 1

Nkothani Mabhuti 1 1 1 1

Moleka Thembinkosi 1 1 1 1


WARD 6 Jul-

16 Aug-

16 Sep-

16 Oct-

16 Nov-

16 Dec-

16 Jan-

17 Feb-

17 Mar-

17 Apr-

17 May-

17 Jun-

17


Cllr Z Masina 1 1 1 1

N Ganyaza 1 1 1 1

M Ramokepa 1 1 1 1

L Noyo 1 0 1 1

M Magopheni 1 1 0 1

L Masina 1 0 1 1

A Madikwa 1 1 0 1

M Kwinana 0 1 1 1

T Matlotlo 1 1 1 1

M Ndzongeni 0 1 0 0

T Bango 1 0 1 1

T Plaatjie(CDW) 0 0 0 1


WARD 7 Jul-

16 Aug-

16 Sep-

16 Oct-

16 Nov-

16 Dec-

16 Jan-

17 Feb-

17 Mar-

17 Apr-

17 May-

17 Jun-

17


Cllr M Mdumisa 1 1 1 1

SB Mpela 1 1 1 1

RF Monaheng 1 1 1 1

S Stragon 1 1 1 1

S Tyongo 1 0 1 1

LE Mbuli 1 0 1 1

KH Mathunya 1 1 1 1

NE Matyunjwa 1 1 1 1

NG Mqela- Ntshobodi 1 0 1 1

TM Olifant 1 1 1 1


WARD 8 Jul-

16 Aug-

16 Sep-

16 Oct-

16 Nov-

16 Dec-

16 Jan-

17 Feb-

17 Mar-

17 Apr-

17 May-

17 Jun-

17


Cllr X Mabusela 1 1 0 1

N Meje 1 1 1 1

N Malgas 1 1 1 1

S Mawonga 1 1 1 1

T Gaba 1 1 1 1

N Paul 1 1 1 1

M Liwani 1 1 1 1

Stuurman 1 1 1 1

S Jaza 0 0 0 0

M Mbele 1 1 1

1

M Mtabane 1 1 1 1

F Makisi (CDW) 1 1 1


WARD 9 Jul-

16 Aug-

16 Sep-

16 Oct-

16 Nov-

16 Dec-

16 Jan-

17 Feb-

17 Mar-

17 Apr-

17 May-

17 Jun-

17


Cllr D De Jongh 1 1 1 1

Elizabeth Kula 1 1 1 1

Sabelo Wood 1 1 1 1

Natasha Pretorius 1 1 1 1

Elrico Pretorius 1 1 1 1

Stoffels Ruitres 1 1 1 1

Dinah Heyens 1 1 1 1

Nozuko Ndulula 1 1 1 1

Timothy Sithukuza 1 1 1 1


WARD 10 Jul-

16 Aug-

16 Sep-

16 Oct-

16 Nov-

16 Dec-

16 Jan-

17 Feb-

17 Mar-

17 Apr-

17 May-

17 Jun-

17


Cllr MW Mokhoabane 1 0 1 0

PC Seleke 1 1 1 1

BS Dumsela 1 1 1 1

T Matlotlo 1 1 1 1

L Makhaule 1 1 1 1

N Siyale 1 1 1 1

D Morake 1 1 1 1

A Pitolo 1 1 1 0

Z Ngontweni 1 1 1 1

S Kolombo 1 1 1

1

K Morake 1 1 1 1


WARD 11 Jul-

16 Aug-

16 Sep-

16 Oct-

16 Nov-

16 Dec-

16 Jan-

17 Feb-

17 Mar-

17 Apr-

17 May-

17 Jun-

17


Cllr KS Lange 1 1 1 1

NS Nkani 1 1 1 0

N Thulelo 1 1 1 1

R Ntintili 1 1 1 1

W Tamane 1 1 1 0

M Boyana 1 1 1 1

Baatyi 1 1 1 1

B Mafo 1 1 1 1

E Heyns 1 1 1 0


T Sdindi 1 1 1

0

PS Olifant 1 1 1 0

APPENDIX F – WARD INFORMATION

Ward Title: Ward Name (Number)

Capital Projects: Seven Largest in 2016/17 Full List at Appendix X)

No Project and Detail Start Date End date Total Value

60/2015/2016 Brick Paving of streets in Maletswai - Phase 4

02 November 2015

13 June 2016

R 2, 425, 886.11

37/2014-2015 Construction of Synthetic Track

29 May 2015 29 July 2015 R 3, 681, 267.48

01/2015-2016 Implementation of Energy Efficient Demand Site Management

01 February 2016

30 June 2016

R 2,578,771.83


Basic Service Provision

Detail Water Sanitation Electricity Refuse

Households with minimum service delivery

0 0 19118 19534

Households without minimum service delivery

0 0 0 0

Total households*

21874 21874 21874 21874

*including informal settlements


Top Four Service Delivery Priorities for Ward

Priorities per Ward

Responsible Directorate

Progress to date

Ward 2 PRIORITIES

17 November 2016

Electricity costs to high Director Financial Services

Construction of Clinic Steynsburg Department of Health

Purification of Water Joe Gqabi District Municipality

The JGDM will attend the issue of water

Water and Sanitation is still challenge Joe Gqabi District Municipality

The JGDM will attend the issue of water and sanitation

Maintenance of Streetlights Director Technical Services

Paving of streets Steynsburg Director Technical Services

Satellite Offices Home Affairs Mayor

Recreation Park Director Community Services

Unemployment and crime rate high Director IPED

Stray Animals Director Community Services

Illegal Dumping Director Community Services

Storm drainage vandalized Director Technical Services

Ambulances are not available in Steynsburg Ward Councillor

Regravelling of roads Director Technical Services

Rectification of Old Houses built 1970’s Department of Human Settlement

Firefighting trucks in Steynsburg Joe Gqabi District Municipality


Fencing of Cemeteries Director Community Services

Provision of Burial Sites Director Community Services

Upgrading Sport Ground Director Community Services

Revive Mayoral Cup Mayor

Sanitation it’s a challenge I Steynsburg Joe Gqabi District Municipality

Provision of Super markets and clothing shops and more banks

Director Financial Services and

Ward 6 PRIORITIES

27 October 2016

Intervention of Councillors in other wards employment processes

Office of the Mayor

Establish LED programme to work in hand with LED coordinator to assist emerging businesses and projects

IPED Directorate

Include Small businesses in upcoming projects. IPED Directorate

Unregistered tarven owners must be arrested they pose danger to the community by selling out of By-law hours

Community Services Directorate

Block H1 unsurveyed portion via Area 13 paved street needs to be looked at it is a surveyable area request to connect services.

Technical Services Directorate

Who was responsible for election of War Room Representatives because it was silent

Ward Councillor COGTA EC& Ward Councillor

What is the resolution to decrease the number of unemployment rate

IPED Directorate

Absorb graduates instead of hiring them for contracts

Corporate Services Directorate

Find assistance for SPU Coordinator he has too much duties to perform and he fails a young suitable disabled person may assist

IPED Directorate


Rectification of Old Houses Vulavala Director Technical Services

Covering of Storm Water drainage Director Technical Services

Paving from Vula Vala Hall require extension to Area 13 students struggle to go to school when it has rained

Director Technical Services The municipality will apply for fund

Survey Brickfield Area Director Technical Services The municipality to investigate the issue.

Nepotism in Recruitment Processes Mayor

Define difference between War Room representatives and the Ward Committees

Ward Councillor

COGTA Eastern Cape

Survey land next to grave yard Area 13

Develop training centre so people can acquire skills

IPED Directorate

Ward 6 Street lights not functioning Technical Services Directorate

General Assistants workers are not doing their duties

Technical & Community Services

Directorate

Ward 7 PRIORITIES

15 November 2016

Assist Young Artist with resources Director IPED

Sewer spillage should be attended to urgently Joe Gqabi District Municipality

House 3572 Sewer is overflowing inside the house Joe Gqabi District Municipality

House 1816 Block G has no title deed Director Community Services

HIV/ Aids programmes not active in the Ward Director IPED

Graduates are unemployment political intervention Mayor

Resealing of Tarred Roads Director Technical Services

Streetlights maintenance Director Technical Services


Sports Committee be consulted during upgrading of Sport fields

Director Community Services

Aliwal Spa should operate and generate income Director Community Services

Surveying of Phola Park

Provision of Water & Sanitation and Electricity

Director IPED

Sewer spillage Block C, D, and F Joe Gqabi District Municipality

Re-gravelling of Phola Park, Meje Park and Egqili Sites

Director Technical Services

Covering of Storm Water Mzingisi Bilisho Director Technical Services

Provide Street lights for Block C, D, E and High mast lights

Director

Speed humps Broadway, Phola Park and Malcomes street


Cleaning of Taxi Rank Director Community Services

Cleanliness outside Boere Pub Tavern Director Community Services

Rectification of houses Block A & C Director Technical Services

Recruitment process must rotate according to database

Ward Councillor

Ambulance must return patients back Mayor

Assistants Phelopha Train Mayor

Ward 8 PRIORITIES

10 November 2016

Street lights not functioning Director Technical Services

Paving of streets not yet done Director Technical Services

Provide Storm water drainage Director Technical Services

Provide taps at R58 area Director Technical Services

Public Toilets and sewer overflowing Director Technical Services


No Priority name and Detail

Provide services at surveyed sites Director Technical Services

Install internet at the Library Director Community Services

Decorate Malcomess High School residents use the space as a dumping site


Council give attention to the bills from the District Municipality they are too high tough no meter readers take readings

Mayor

Provide security personnel at the Halls and Crèche there is too much vandalism

Ward Councillor

Sports Grounds need upgrading they is nowhere to do programmes


Scholar transport for children in Area 13 Department of Transport

The Municipality promised flats for youth but where never built

Ward Councillor

House 1670 Block H2 have no running water but water bills do come at the end of the month

Ward Councillor

Disabled structure needs renovation assistance there is no fence residents do illegal dumping there

Office of the Premier &

Department of Social Development

Informal settlements toilets at R58 area not cleaned

Joe Gqabi District Municipality

Management and the Mayor always not available during office hours

Mayor

What is the progress with Sauer Park stadium Director Technical Services

Councillors after elections do not attend to people’s needs they do not hold meetings

Mayor

Municipal budget must be tabled before residents so they prioritize themselves

Mayor

House 2643 Block H2 toilet overflowing Director Technical Services

New RDP house number 235 half painted not done matter reported but was never attended to



Improving Basic Service Delivery and Infrastructure Investment;

Maize field grave yard hard to dig request Municipality to provide caterpillar


Ward Councillor hires people who voted for him only has the hiring criteria changed

Mayor

Council must intervene at the clinic people queue for hours without assistance

Mayor

R58 residents had registered for houses but no response had been received also the streets are closed ambulances and police have no access

Director Technical & Community Services

Sites next to the hall are surveyed on top of a storm water Council must intervene

Director IPED

Elderly living behind the hall were promised sites but where never given

Mayor

Install electricity at surveyed sites behind the hall Director Technical Services

What is the progress on the Joe Gqabi extension matter

Director Community Service

Solar Energy Matter progress Director Technical Services New Council still to discuss the Solar Energy project

Ward Councillors bring divisions inside the wards that must stop

Mayor Ward Councillor only holds Public meetings but discovered that after meetings people hold their own without Councillors knowledge

Ward 9 PRIORITIES

14 November 2016

Electrification of Phola Park Director Technical Services

Provision of Houses Hilton Department of Human Settlement

Streetlights maintenance Director Technical Services

Hilton Community Hall usage Director Community Services

Sewer spillage

Title Deeds of Old House in Hilton Director Technical Services


- Ensuring all communities have access to clean water and sanitation;

Fire Services provision for 24 hours Joe Gqabi District Municipality

Budget for Hilton Director Financial Services

Renovation of Old Hilton Library Director Community Services

Sportfield for Children Director Community Services

Speed humps Hilton Director Technical Services

Too high Water bills Joe Gqabi District Municipality

Parking Meters Director Financial Services

Teenage Drug Abuse Juana Park

Department of Social Development & Health, SAPS

Ward 10 PRIORITIES

07 November 2016

Soul city electrification, streets development, houses and water & sanitation.


Erect speed humps at rose and Angelier street Director Technical Services

Arrange for Mobile Police station and Clinic weekly at Joe Gqabi


Prioritize elderly ahead of youth when building houses

Department of Human Settlement

Build a Primary School for Joe Gqabi students Department of Education

Traffic officers are not assisting students at school during rush hours


Whilst waiting for a school to be built provide scholar transport for Joe Gqabi students

Department of Transport DOT has allocated a bus for scholar transport

Many Joe Gqabi RDP houses need rectification Department of Human Settlement

Does the Municipality have a youth budget and how is it utilized

Director IPED


Provide churches sites where there is illegal dumping areas

Director IPED

Soul City needs paved streets there is too much mud when it rains


House number 4382 residents dump refuse in front of the house


All Joe Gqabi streets need to be re – graveled gravel is over there is mud and the rain water does not flow


Provide support to emerging small businesses so they grow

Director IPED

What will happen to Phola Park residents living at R58 road as the area won’t be surveyed

Director IPED

Erf 79 at Soul City was moved near the public toilets that people utilize occupants are no longer living there because of the smell.


Joe Gqabi house number 4100 rain water flowing inside the house during raining periods


Request that Soul City be taken as a first priority during implementation phase


Request that the Municipality appoint registered experienced contractors in future to be build houses so there won’t be a need of rectification and unfruitful expenditure


Ward 11 PRIORITIES

09 November 2016

Only ANC volunteers are hired in upcoming projects

Mayor

Paving of streets needed many streets not paved Director Technical Services

Storm water drainage is too deed cars were not accommodated they can’t pass at Phama street


Upgrading of Town Park project residents were not informed people where just seen working

Ward Councillor


RDP houses connection pipes are leaking leading to houses falling and cracking


There must be a provision made for people who built houses by themselves


RDP houses toilets overflowing Joe Gqabi District municipality

Testing Station was promises but not yet built what was the hold back


Street lights not functioning, Mzomhle street not yet paved, Youth Centre not yet built also request for a Supermarket to be built.


Request that the Water Dam to be fenced stray animals drink from the dam which is harmful to the community


Disabled people need to be provided with their own budget at the Municipality

Mayor

Farmers must be assisted with tractors Department of Rural Development & Agrarian Reform

Students be provided with free internet access at the Library


Local Clinic be extended there is no space even if it is raining elders wait outside also hire more staff people die in queues


House 169 Bongani street house overflowing sewer inside


Building of houses not yet done since they were promised


Newly built ATM’s not properly working and there is nowhere to deposit



- Ensuring all houses have access to electricity;

Build a shopping Centre to grow the Local economy

Director IPED

Graduates be hired in more qualified positons than being hired in EPWP projects

Director Corporate Services

Provide mobile Police Station at the township SAPS

Construction of toilets for disabled people inside the houses


Construct disabled ramp for the disabled at the Municipality


Eyethu Community Garden require assistance with resources from the Municipality

Department of Rural Development & Agrarian Reform

Sarah Moorosi sports field contractor no longer on site what happened


Extend Community Hall, Provide more refuse trucks, job creation and attend to the Eskom electricity matter it is too weak


Local Business owners must be engaged so that they assist in youth programmes

Director IPED

Primary School needs extension Department of Basic Education

Town Library situated at a church building owners need it back there must be a provision


Cleanliness at the clinic a concern to the community

Ward Councillor

Provide office space for Ward 3 Councillor Mayor

Provide patient transport for patients transferred to far hospitals


There is always no medicines at the Hospital Department of Health


- Ensuring universal access to free basic services;

Improve Local Economic Development;

Doctor at the Hospital does not attend to female patients

Mayor

Nurses at the Hospital are always drunk Mayor

Ward 3 & 4 Priorities

09 March 2017

Regraveling of streets (Mountain View) Director Technical Services

Electrification of Houses 340Project and Matyotyombeni area


Prioritiaztion of High mass light and street light in Eureka


Renovation/rectification of Houses Sisokola Sonke area


Prioritization of youth programmes initiated by the municipality,establishment of youth council for the Walter Sisulu Local Youth Council

Director IPED

Establishment of Street Committees Director Technical Services

Prioritization of local contractors Director IPED

Youth and community Skills development Director Corporate Services

Construction of Speed humps in Eureka paved road


Storm Water Drainage System


Sewer Spillage



APPENDIX G – RECOMMENDATIONS OF THE MUNICIPAL AUDIT

COMMITTEE 2016/17

Municipal Audit Committee Recommendations

Date of Committee

Audit Findings/Concern

Committee Recommendations during 2016/17

Recommendations Adopted (enter Yes); not adopted (provide explanations)

None None

APPENDIX H – LONG TERM CONTRACTS AND PUBLIC PRIVATE

PARTNERSHIPS

Long Term Contracts (20 Largest Contracts Entered into 2016/17


Name of Service Provider (Entity or Municipal Department )

Description of Services Rendered by the Service Provider

Start Date of Contract

Expiry date of Contract

Project manager

Contract Value

39/2011 Rental of Photocopiers

27 June 2011 Continuing Mr Botha R 64 620.00 pm

84/2014/15 Short term insurance 11 February 2016

Continuing Mr T Maseko

R 684 389.00 p.a

122/2014-2015 Supply of Security Services

Continuing Mr S Botha

R 1 146 353.05


APPENDIX I – MUNICIPAL ENTITY/ SERVICE PROVIDER

PERFORMANCE SCHEDULE

There is no municipal entity

APPENDIX J – DISCLOSURES OF FINANCIAL INTERESTS

Disclosures of Financial Interests

Period 1 July 2016 to 30 June 2017

Position Name Description of Financial interests* (Nil / Or details)

(Executive) Mayor B Khweyiya None

Speaker KS Lange None

Councillors N Ngubo None

VD Davids None

M Solani None

Z Mqokrwana None

B Ndika None

Z Mangali None

L Nkunzi None

Y Zweni None

ZE Masina None

M Mdumisa None

MW Mokhoabane None

M Mtshingana None

X Mabusela None

D Hartkopf None

D De Jong None

E Theron None

M De Ridder Nel None

A Van Heerden None

V Schoeman None

M Jan None

Municipal Manager Thembinkosi Mawonga None


Thomas Maseko None

(Executive) Directors Z Nongene None

N.B.B.Mokhantso None

T. Maseko None

Z.E Pungwani None

None

Other S57 Officials None None


None

* Financial interests to be disclosed even if they incurred for only part of the year. See MBRR SA34A T J

APPENDIX K: REVENUE COLLECTION PERFORMANCE BY VOTE AND

BY SOURCE

APPENDIX K (i): REVENUE COLLECTION PERFORMANCE BY VOTE

2014 2014 2014 2015 2015 2015

Actual Actual Surplus/ Actual Actual Surplus/

Vote Income Expenditure (Deficit) Income Expenditure (Deficit)

R R R R R R

Council 6

636 390 (12 491

361) (5

854 971) 2

468 254 (11 844

351) (9

376 097)

Municipal Manager

-

(3 106 513)

(3 106 513)

-

(3 366 463)

(3 366 463)

Integrated Development Planning

-

(464 000)

(464 000)

-

(359 957)

(359 957)

Special Program Unit

-

(420 555)

(420 555)

-

(493 381)

(493 381)

Corporate Services

136 956

(8 025 806)

(7 888 849)

642 464

(8 417 095)

(7 774 631)

Occupational Health & Safety

-

(1 553)

(1 553)

-

(8 220)

(8 220)

Traffic 3

896 607 (3 777

120) 119

487 3

691 566 (3 592

452) 99

114

Aerodrome 11

639 (71

104) (59

465) 13

365 (77

824) (64

460)

Commonage 175

625 (10

751) 164

873 257

899 (3

390) 254

509

Financial Services

30 449 332

(20 546 060)

9 903 272

30 335 572

(23 304 699)

7 030 873

Assessment Rates

11 436 797 -

11 436 797

11 150 337 -

11 150 337

Technical Services

246

(1 753 801)

(1 753 555)

1 548

(1 251 235)

(1 249 686)

Administration and Land Affairs

1 793 076

(2 507 579)

(714 503)

1 720 518

(2 430 038)

(709 520)


Public Works 9

371 247 (12 441

073) (3

069 826) 6

596 132 (12 632

663) (6

036 531)

Refuse Removal

4 382 593

(6 584 386)

(2 201 794)

5 160 943

(6 827 726)

(1 666 782)

Parks and Public Places

912

(3 371 336)

(3 370 424)

2 293

(3 426 886)

(3 424 593)

Cleansing

-

(19)

(19)

- -

-

Community Services

-

(1 767 569)

(1 767 569)

50 815

(1 767 231)

(1 716 416)

Local Economic Development

10 000

(498 077)

(488 077)

6 585

(522 933)

(516 347)

Cemetry 173

863 (8

048) 165

815 177

302 (4

781) 172

522

Sport Grounds 19

781 (23

275) (3

494) 2

254 796 (28

170) 2

226 626

Libraries 709

697 (1 208

222) (498

526) 708

298 (1 422

501) (714

203)

Aliwal Spa 388

662 (3 049

012) (2

660 350) 319

512 (2 830

235) (2

510 722)

Conference Centre

203 167

(95 038)

108 130

119 201

(94 016)

25 184

Nature Reserve

636 751

(29 169)

607 582

133 583

(393 888)

(260 305)

Museum

- (1

617) (1

617)

- (1

737) (1

737)

Housing

- (1 461

711) (1

461 711)

- (1 741

678) (1

741 678)

Electricity 53

323 358 (53 611

430) (288

072) 55

937 659 (56 442

611) (504

952)

Total 123

756 700 (137 326

187) (13

569 487) 121

748 643 (143 286

160) (21

537 516)

APPENDIX K (ii): REVENUE COLLECTION PERFORMANCE BY SOURCE

Revenue collection By Source 2014/15 2013/14

Property rates 11

150 11

437

Service charges 60

613 56

112

Rental of facilities and equipment 1

958 2

095

Interest earned - external investments

671

478


Interest earned - outstanding debtors

562

342

Fines

322

248

Licences and permits 1

798 2

074

Agency services 1

701 4

705

Transfers recognised - operational 31

559 30

350

Other revenue 3

883 7

333

Gains on disposal of PPE

393

170


114 610

115 343


APPENDIX L: CONDITIONAL GRANTS RECEIVED: EXCLUDING MIG

WALTER SISULU LOCAL MUNICIPALITY

APPENDIX D (UNAUDITED)

DISCLOSURE OF GRANTS AND SUBSIDIES FOR THE PERIOD ENDING 30 JUNE 2017

BALANCE ON

GRANTS

TRANSFERRED TO

TRANSFERRED TO

RETURNED

TRANSFERRED

CLOSING

MERGER

RECEIVED

REVENUE

REVENUE

TO FROM BALANCE

DATE (OPERATING)

(CAPITAL)

TREASURY

RECEIVABLES

R R R R R R R

NATIONAL GOVERNMENT


Equitable Share -

43,290,000

(43,290,000)

-

-

-

-

Financial Management Grant (FMG)

-

3,835,000

(3,715,022)

-

-

(119,978)

-

Municipal Infrastructure Grant (MIG)

2,019,694

27,552,000

(4,462,368)

(22,034,120)

(820,000)

-

2,255,206

Skills Development Fund

-

91,288

(91,288)

-

-

-

-

Integrated National Electrification Programme (INEP)

-

5,000,000

(614,035)

(4,385,965)

-

-

-

Energy Efficiency and Demand Side Management Grant

511,967

-

(62,873)

(449,094)

-

-

-

Expanded Public Works Program (EPWP)

-

2,438,000

(2,438,000)

-

-

-

-

Municipal Demarcation and Transition Grant

-

15,428,000

(5,594,987)

-

-

-

9,833,013


Total 2,531,660

97,634,288

(60,268,573)

(26,869,179)

(820,000)

(119,978)

12,088,219

PROVINCIAL GOVERNMENT

Library Grant -

1,947,000

(1,947,000)

-

-

-

-

Spatial Development Plan

361,000

-

-

-

-

-

361,000

1218 Link Houses 271,617

-

-

-

-

-

271,617

330 Houses 168,331

-

-

-

-

-

168,331

Area 5 Services 63,514

-

-

-

-

-

63,514

Hilton 89 Houses 6,746

-

-

-

-

-

6,746

Area 13 - Fund 98,454

-

-

-

-

-

98,454


318 Houses Jamestown

373,367

-

-

-

-

-

373,367

Jamestown 858 Houses Planning

6,090

-

-

-

-

-

6,090

Jamestown 858 Houses

639,778

-

-

-

-

-

639,778

838 Wonings Fonds

690,403

-

-

-

-

-

690,403

Land Survey Management

467,500

-

-

-

-

-

467,500

LED Garden Project Jamestown

97,454

-

-

-

-

-

97,454

ECDLGTA - Greening and Beautification

-

1,000,000

(1,000,000)

-

-

-

-

JL De Bruin Dam 193,973

-

-

-

-

-

193,973

DPLG Funding (Gariep)

110,993

-

-

-

-

-

110,993


Total 3,549,222

2,947,000

(2,947,000)

-

-

-

3,549,222

DISTRICT MUNICIPALITY

Joe Gqabi District Municipality Grant

76,500

2,579,878

(124,464)

(1,042,028)

-

-

1,489,886

Total 76,500

2,579,878

(124,464)

(1,042,028)

-

-

1,489,886

ALL SPHERES GOVERNMENT

6,157,382

103,161,166

(63,340,037)

(27,911,207)

(820,000)

(119,978)

17,127,327

pg. 277 DARFT ANNUAL REPORT - 2016/17 WALTER SISULU LOCAL MUNICIPALITY

APPENDIX M: CAPITAL EXPENDITURE – NEW & UPGRADE/RENEWAL

PROGRAMMES

Maletswai Sports Field (Sarah Moroosi Stadium: Phase 1 and 2)

APPENDIX M (i): CAPITAL EXPENDITURE - NEW ASSETS PROGRAMME

As above

APPENDIX M (ii): CAPITAL EXPENDITURE – UPGRADE/RENEWAL

PROGRAMME

2015 2015 2015 2015

Capital expenditure by vote (Actual) (Budget) (Variance) Variance %

Executive & Council 13 127 435 000 (421 873) -3214%

Budget and Treasury 248 292 620 000 (371 708) -150%

Public Safety 11 560 420 000 (408 440) -3533%

Road Transport 4 270 122 5 220 000 (949 878) -22%

Waste Management 265 622 55 000 210 622 79%

Sport and Recreation 2 480 128 9 084 290 (6 604 162) -266%

Community and Social Services 17 543 50 000 (32 457) -185%

Housing 1 921 20 000 (18 079) -941%

Electricity 1 638 727 1 416 680 222 047 14%

8 947 041 17 320 970 (8 373 929) -94%


APPENDIX N – CAPITAL PROGRAMME BY PROJECT 2016/17

Capital Programme by Project 2016/17

Capital Project Original Budget

Adjustment Budget

Actual Variance (Act –Adj

%)

Variance (Act –OB

%)

Water

Sanitation/Sewerage

Electricity

Housing 0 0 0 0 0

Refuse Removal

Storm water

Economic Development

Sports, Arts and Culture

0 0 0 0 0

Environment 0 0 0 0 0

Health 0 0 0 0 0

Safety and Security 0 0 0 0 0

ICT and Other 0 0 0 0 0

APPENDIX O – CAPITAL PROGRAMME BY WARD 2016/17

Capital Project Ward(s) affected R000

Works Completed

(yes/no)

Water 0 0

428 Sanitation/Sewerage 0 0

Electricity 0 0

Housing 0 0


Capital Project Ward(s) affected R000

Works Completed

(yes/no)

Refuse Removal 0 0

Storm water 0 0

Economic Development 0 0

Sports, Arts and Culture 0 0

Environment 0 0

Health 0 0

Safety and Security 0 0

ICT and Other 0 0

APPENDIX P – SERVICE CONNECTION BACKLOGS AT SCHOOLS AND

CLINICS

Not applicable to Walter Sisulu Local Municipality

APPENDIX Q – SERVICE BACKLOGS EXPERIENCED BY THE

COMMUNITY WHERE ANOTHER SPHERE OF GOVERNMENT IS

RESPONSIBLE FOR SERVICE PROVISION

Not applicable to Walter Sisulu Local Municipality

APPENDIX R – DECLARATION OF LOANS AND GRANTS MADE BY THE

MUNICIPALITY

Declaration of Loans and Grants made by the municipality: Year 0

All Organisation or Person in

receipt of Loans */Grants*

provided by the municipality

Nature of project

Conditions attached to

funding

Value Year 0 R' 000

Total Amount

committed over

previous and future

years

* Loans/Grants - whether in cash or in kind T R

There were no loans or grants made by the Walter Sisulu Local Municipality


APPENDIX S – NATIONAL AND PROVINCIAL OUTCOMES FOR LOCAL

GOVERNMENT

National and Provincial Outcomes for Local Government

Outcome/Output Progress to date Number or Percentage Achieved

Output: Improving access to basic services

The focus of Maletswai Local Municipality is provision of Electricity, refuse removal and maintenance of municipal access roads.

87.61% Access to basic electricity 90% Access to refuse removal 54% Access road maintained

Output: Implementation of the Community Work Programme

The District Municipality has priorities the implementation of the Community Works Programme

Output: Deepen democracy through a refined Ward Committee model

The Ward Committees of Maletswai Local Municipality is fully functional and participate various programmes and activities of Council. These programmes include the Mayoral Public Participation Programme, IDP Rep forum.

Significant progress achieved

Output: Administrative and financial capability

In the year 2013/14 the Municipality received an unqualified Audit opinion form the Auditor General.

Unqualified Audit Opinions

* Note: Some of the outputs detailed on this table may have been reported elsewhere in the Annual Report. Kindly ensure that this information consistent.

T S


APPENDIX U- MINIMUM COMPETENCY LEVELS OF WALTER SISULU LOCAL

MUNICIPAL OFFICIALS

Volume II

Annual Financial Statements

2016/17 FINANCAIL YEAR

Refer to Appendix V


Content Page

2 - 3

4

5

6

7

8

- 9 - 10

- 11 - 12

- 13 - 14

15 - 48

49 - 115

APPENDICES - Unaudited

A 116

B 117

C 118

D 119 - 120

E

- 121 - 122

- 123 - 124

- 125 - 126

- 127 - 128

- 129 - 130Cash Flows

Statement of Financial Position

Statement of Financial Performance

Cash Flow Statement

Accounting Policies and Significant Judgements and Estimates

Notes to the Financial Statements

Revenue and Expenditure (Standard Classification)

Revenue and Expenditure (Municipal Vote Classification)

Revenue and Expenditure (Revenue by Source and Expenditure by Type)

Capital Expenditure by Vote, Standard Classification and Funding

Segmental Statement of Financial Performance - Municipal Votes

National Treasury Appropriation Statements

Schedule of External Loans

Segmental Statement of Financial Performance - GFS Votes

Disclosure of Grants and Subsidies

WALTER SISULU LOCAL MUNICIAPLTIY

INDEX

Statement of Changes In Net Assets

Cash Flow Statement

Statement of comparison of budget and actual amounts

General Information

Approval of the Financial Statements

Statement of Financial Position

Statement of Financial Performance


Aliwal North Burgersdorp Venterstad

Jamestown Steynsburg Oviston

Mr. T Mawonga

Mr. U. Peter


GENERAL INFORMATION

NATURE OF BUSINESS

LEGAL FORM

MUNICIPAL MANAGER

ACTING CHIEF FINANCIAL OFFICER

JURISDICTION

REGISTERED OFFICE

AUDITORS

1 Jan Greyling Street, Burgersdorp, 9744

PRIMARY BANKER

Auditor General South Africa

First National Bank, Aliwal North

#REF!

South African Category B Municipality (Local Municipality) as defined by the Municipal Structures Act.

(Act no 117 of 1998). The municipality provides functions as included in Schedule 4B and Schedule 5B of

the Constitution. It should however be noted that the Water and Sanitation function, which is

generally allocated to Category B municipalities, are performed by the District Municipality.

The Minister of Co-operative Governance and Traditional Affairs has requested the Municipal

Demarcation Board to re-determine the boundaries of Maletswai and Gariep Local Municipalities as

per section 122 of the Local Government Municipal Demarcation Board.

The Walter Sisulu Local Municipality was subsequently established by the amalgamation of the

Maletswai Local Municipality and Gariep Local Municipality. Operations in the Walter Sisulu Local

Municipality commenced on 6 August 2016, being the merger date.

The financial statements covers a period of 328 days (from 6 August 2016 to 30 June 2017) and in line

with the requirements of GRAP 107, paragraph 42, no comparative information is presented.


Horn & Kumm

RELEVANT LEGISLATION

Municipal Finance Management Act (Act no 56 of 2003)

Division of Revenue Act

The Income Tax Act

Value Added Tax Act

Municipal Structures Act (Act no 117 of 1998)

Municipal Systems Act (Act no 32 of 2000)

Water Services Act (Act no 108 of 1997)

Housing Act (Act no 107 of 1997)

Municipal Property Rates Act (Act no 6 of 2004)

Electricity Act (Act no 41 of 1987)

Municipal Planning and Performance Management Regulations

Skills Development Levies Act (Act no 9 of 1999)

Employment Equity Act (Act no 55 of 1998)

Unemployment Insurance Act (Act no 30 of 1966)

Basic Conditions of Employment Act (Act no 75 of 1997)

Supply Chain Management Regulations, 2005

Collective Agreements

Douglas and Botha

ATTORNEYS



Councillor Position Councillor Position

Cllr B Khweyiya Executive Mayor Cllr Z Mangali Ward 1 Councillor

Cllr KS Lange Speaker Cllr Z Mqokrwana Ward 2 Councillor

Cllr E Theron PR Councillor Cllr BM Ndika Ward 3 Councillor

Cllr VA Schoeman PR Councillor Cllr M Solani Ward 4 Councillor

Cllr N Ngubo PR Councillor Cllr L Nkunzi Ward 5 Councillor

Cllr MB Mtshingana PR Councillor Cllr ZE Masina Ward 6 Councillor

Cllr M Jan PR Councillor Cllr M Mdumisa Ward 7 Councillor

Cllr DF Hartkopf PR Councillor Cllr X Mabusela Ward 8 Councillor

Cllr VD Davids PR Councillor Cllr D De Jongh Ward 9 Councillor

Cllr M De Ridder Nel PR Councillor Cllr MW Mokhoabane Ward 10 Councillor

Cllr M Van Heerden PR Councillor

Cllr Y Zweni PR Councillor

Mr. T Mawonga Date

Municipal Manager

APPROVAL OF FINANCIAL STATEMENTS

APPROVAL OF ACCOUNTING OFFICER

#REF!

I acknowledge that I am ultimately responsible for the system of internal financial control and that the

system of internal control provides reasonable assurance that the financial records can be relied on.

MEMBERS OF COUNCIL

I have reviewed the Municipality’s cash flow forecast for the year to and is satisfied that the

Municipality can continue in operational existence for the foreseeable future.

The external auditors are responsible for independently reviewing and reporting on the Municipality’s

financial statements.

I certify that the remuneration of Councillors and in-kind benefits are within the upper limits of the

framework envisaged in Section 219 of the Constitution, read with the Remuneration of Public Officer

Bearers Act and the Minister of Provincial and Local Government's determination in accordance with

this Act.


2017R

Notes (Actual)

ASSETS

Current Assets 85,463,226

Cash and Cash Equivalents 2 21,658,077

Receivables from exchange transactions 3 19,673,112

Receivables from non-exchange transactions 4 12,765,163

Operating Lease Asset 5 -

Taxes 6 31,050,470

Inventory 7 316,404

Non-Current Assets 622,769,087

Non-Current Investments 8 1,368,838

Investment Property 9 153,159,502

Property, Plant and Equipment 10.1 455,005,784

10.2 7,782,215

Biological Assets 11 1,880,250

Heritage Assets 12 2,984,705

Intangible Assets 13 587,794

Total Assets 708,232,314

Current Liabilities 288,032,405

Annuity Loans 14.1 606,427

Hire Purchases 14.2 620,658

Consumer Deposits 15 2,126,012

Payables from exchange transactions 16 252,070,419

Unspent Conditional Government Grants 17 17,127,327

Current Employee benefits 18 14,587,162

Provisions 19 894,400

Non-Current Liabilities 54,613,089

Annuity Loans 14.1 2,210,221

Hire Purchases 14.2 527,830

Employee benefits 20 27,416,005

Non-Current Provisions 21 24,459,033

Total Liabilities 342,645,495

NET ASSETS 365,586,819

COMMUNITY WEALTH

Accumulated Surplus 22 365,586,819

TOTAL COMMUNITY WEALTH 365,586,819


STATEMENT OF FINANCIAL POSITION AT 30 JUNE 2017

Property, Plant and Equipment - Capitalised Restoration Cost


2017

R

Notes (Actual)

REVENUE

REVENUE FROM NON-EXCHANGE TRANSACTIONS 118,940,089

Taxation Revenue 18,661,347

Property Rates 23 18,661,347

Transfer Revenue 91,251,244

Government Grants and Subsidies - Capital 24 27,911,207

Government Grants and Subsidies - Operating 24 63,340,037

Other Revenue 9,027,498

Fines 25 459,253

Actuarial Gains 26 7,958,108

Fair Value Adjustments 27 597,200

Insurance Receipts 12,936

REVENUE FROM EXCHANGE TRANSACTIONS 106,587,013

Operating Activities 106,587,013

Service Charges 28 91,205,282

Rental of Facilities and Equipment 2,144,825

Interest Earned - external investments 1,431,704

Interest Earned - outstanding debtors 29 5,118,497

Licences and Permits 30 3,225,925

Agency Services 31 1,618,523

Other Income 32 1,842,255

TOTAL REVENUE 225,527,101

EXPENDITURE

Employee related costs 33 76,831,637

Remuneration of Councillors 34 5,882,648

Debt Impairment 35 36,177,542

Depreciation and Amortisation 36 26,036,302

Repairs and Maintenance 37 4,010,665

Finance Charges 38 11,907,013

Bulk Purchases 39 70,593,781

Transfers and Grants 40 191,813

Operating Grant Expenditure 41 11,113,594

Other Expenditure 42 24,471,614

TOTAL EXPENDITURE 267,216,609

NET DEFICIT FOR THE PERIOD (41,689,508)


STATEMENT OF FINANCIAL PERFORMANCE FOR THE PERIOD ENDING 30 JUNE 2017


ACCUMULATED

SURPLUS TOTAL

R R

- -

403 956 871 403 956 871

3 319 456 3 319 456

Net Deficit for the period (41,689,508) (41,689,508)

365,586,819 365,586,819 Balance on 30 June 2017


STATEMENT OF CHANGES IN NET ASSETS FOR THE PERIOD ENDING 30 JUNE 2017

Balance on 6 August 2016

Assets acquired and liabilities assumed on merger date - 6

August 2016 - Refer to note 43

Adjustments to Assets acquired and liabilities assumed on

merger date - 6 August 2016 - Refer to note 44


2017

R

Notes (Actual)


Receipts

Property rates (15 614 382)

Service charges 74 257 400

Other revenue 10 496 517

Government - operating 73,230,155

Government - capital 29,931,011

Interest 1,431,704

Payments

Suppliers (724 942 786)

Employees (72 153 492)

Finance charges (8,563,560)

Transfers and Grants (191,813)

45 (49 109 519)

CASH FLOW FROM INVESTING ACTIVITIES

Receipts

Increase in non-current investments (91,532)

Payments

Purchase of Property, Plant and Equipment (29,226,442)

Purchase of Intangible Assets (166,770)

NET CASH USED IN INVESTING ACTIVITIES (29 484 744)

CASH FLOW FROM FINANCING ACTIVITIES

Receipts

Increase in Consumer Deposits 98 220

Payments

Loans repaid 1 225 989

NET CASH USED IN FINANCING ACTIVITIES 1 127 770

NET INCREASE IN CASH HELD (18 497 006)

Cash and Cash Equivalents recognised on merger date 3 161 071

Cash and Cash Equivalents at the end of the period 21,658,077

NET INCREASE IN CASH HELD 18 497 006


CASH FLOW STATEMENT FOR THE PERIOD ENDING 30 JUNE 2017

NET CASH FROM OPERATING ACTIVITIES


COMPARISON OF ACTUAL FIGURES TO FINAL BUDGET

2017 2017 2017R R R


ASSETS

Current assets

Cash and Cash Equivalents 21,658,077 6,437,253 15,220,823

Consumer debtors 23,609,833 28,538,529 (4,928,696)

Other Receivables 39,878,913 37,266,978 2,611,935

Inventory 316,404 332,069 (15,665)

Total current assets 85,463,226 72,574,829 12,888,397

Non current assets

Investments 1,368,838 888,657 480,181

Investment property 153,159,502 164,307,469 (11,147,967)

Property, plant and equipment 462,787,999 480,339,170 (17,551,171)

Biological Assets 1,880,250 1,367,731 512,519

Heritage Assets 2,984,705 3,181,696 (196,991)

Intangible Assets 587,794 648,578 (60,785)

Total non current assets 622,769,087 650,733,301 (27,964,213)

TOTAL ASSETS 708,232,314 723,308,130 (15,075,816)

LIABILITIES

Current liabilities

Borrowing 1,227,085 1,133,490 93,595

Consumer deposits 2,126,012 2,148,158 (22,146)

Trade and other payables 269,197,745 220,024,976 49,172,770

Provisions and Employee Benefits 15,481,563 10,450,335 5,031,228

Total current liabilities 288,032,405 233,756,958 54,275,447

Non current liabilities

Borrowing 2,738,051 91,159,129 (88,421,078)

Provisions and Employee Benefits 51,875,038 41,535,216 10,339,822

Total non current liabilities 54,613,089 132,694,345 (78,081,255)

TOTAL LIABILITIES 342,645,495 366,451,303 (23,805,808)

NET ASSETS 365,586,819 356,856,827 8,729,992

COMMUNITY WEALTH

Accumulated Surplus 365,586,819 357,155,776 8,431,043

TOTAL COMMUNITY WEALTH 365,586,819 357,155,776 8,431,043

Refer to note 47.2 for details of material variances.


STATEMENT OF FINANCIAL POSITION AT 30 JUNE 2017

STATEMENT OF COMPARISON OF BUDGET AND ACTUAL AMOUNTS


ADJUSTMENTS TO APPROVED BUDGET

2017 2017 2017R R R

(Approved Budget) (Adjustments) (Final Budget)

ASSETS

Current assets

Cash and Cash Equivalents 6,437,253 - 6,437,253

Consumer debtors 28,538,529 - 28,538,529

Other Receivables 37,266,978 - 37,266,978

Inventory 332,069 - 332,069

Total current assets 72,574,829 - 72,574,829

Non current assets

Investments 888,657 - 888,657

Investment property 164,307,469 - 164,307,469

Property, plant and equipment 480,339,170 - 480,339,170

Biological Assets 1,367,731 - 1,367,731

Heritage Assets 3,181,696 - 3,181,696

Intangible Assets 648,578 - 648,578

Total non current assets 650,733,301 - 650,733,301

TOTAL ASSETS 723,308,130 - 723,308,130

LIABILITIES

Current liabilities

Borrowing 1,133,490 - 1,133,490

Consumer deposits 2,148,158 - 2,148,158

Trade and other payables 220,024,976 - 220,024,976

Provisions and Employee Benefits 10,450,335 - 10,450,335

Total current liabilities 233,756,958 - 233,756,958

Non current liabilities

Borrowing 91,159,129 - 91,159,129

Provisions and Employee Benefits 41,535,216 - 41,535,216

Total non current liabilities 366,451,303 - 366,451,303

TOTAL LIABILITIES 366,451,303 - 366,451,303

NET ASSETS 356,856,827 - 356,856,827

COMMUNITY WEALTH

Accumulated Surplus 357,155,776 - 357,155,776

TOTAL COMMUNITY WEALTH 357,155,776 - 357,155,776




2017 2017 2017R R R


REVENUE BY SOURCE

Property rates 18,661,347 24,121,412 (5,460,065)

Service charges - electricity revenue 76,276,657 82,932,061 (6,655,403)

Service charges - refuse revenue 14,928,625 19,328,832 (4,400,207)

Rental of facilities and equipment 2,144,825 1,203,751 941,074

Interest earned - external investments 1,431,704 531,094 900,610

Interest earned - outstanding debtors 5,118,497 4,888,220 230,277

Fines 459,253 130,411 328,842

Licences and permits 3,225,925 3,804,692 (578,767)

Agency services 1,618,523 2,990,000 (1,371,477)

Government Grants and Subsidies -

Operating 63,340,037 71,270,873 (7,930,836)

Other revenue 10,410,499 922,138 9,488,361

Gains on disposal of PPE - 818 (818)

TOTAL OPERATING REVENUE 197,615,895 212,124,303 (14,508,408)

EXPENDITURE BY TYPE

Employee related costs 76,831,637 70,694,974 6,136,663

Remuneration of councillors 5,882,648 4,525,930 1,356,717

Debt impairment 36,177,542 2,239,474 33,938,068

Depreciation & asset impairment 26,036,302 18,790,051 7,246,250

Finance charges 11,907,013 321,332 11,585,680

Bulk purchases 70,593,781 72,861,427 (2,267,646)

Grants and subsidies paid 191,813 10,351,693 (10,159,881)

Other expenditure 39,595,874 31,227,557 8,368,316

TOTAL OPERATING EXPENDITURE 267,216,609 211,012,440 56,204,169

OPERATING SURPLUS/(DEFICIT) FOR THE

PERIOD (69,600,714) 1,111,863 (70,712,577)

Government Grants and Subsidies - Capital 27,911,207 25,990,324 1,920,883 0

NET SURPLUS/(DEFICIT) FOR THE PERIOD (41,689,508) 27,102,187 (68,791,694)


WALTER SISULU LOCAL MUNICIPALITYSTATEMENT OF COMPARISON OF BUDGET AND ACTUAL AMOUNTS

STATEMENT OF FINANCIAL PERFORMANCE FOR THE PERIOD ENDING 30 JUNE 2017



2017 2017 2017R R R


REVENUE BY SOURCE

Property rates 24,121,412 - 24,121,412

Service charges - electricity revenue 98,470,744 (15,538,684) 82,932,061

Service charges - refuse revenue 22,952,743 (3,623,911) 19,328,832

Rental of facilities and equipment 2,999,307 (1,795,556) 1,203,751

Interest earned - external investments 834,156 (303,062) 531,094

Interest earned - outstanding debtors 4,888,220 - 4,888,220

Fines 351,494 (221,083) 130,411

Licences and permits 3,804,692 - 3,804,692

Agency services 2,990,000 - 2,990,000

Government Grants and Subsidies -

Operating 54,990,873 16,280,000 71,270,873

Other revenue 3,296,894 (2,374,756) 922,138

Gains on disposal of PPE 89,375 (88,557) 818

TOTAL OPERATING REVENUE 219,789,910 (7,665,608) 212,124,303

EXPENDITURE BY TYPE

Employee related costs 87,589,029 (16,894,055) 70,694,974

Remuneration of councillors 7,364,853 (2,838,923) 4,525,930

Debt impairment 3,357,532 (1,118,058) 2,239,474

Depreciation & asset impairment 17,049,696 1,740,355 18,790,051

Finance charges 992,844 (671,512) 321,332

Bulk purchases 72,879,647 (18,220) 72,861,427

Grants and subsidies paid 19,480,040 (9,128,347) 10,351,693

Other expenditure 51,595,618 (20,368,061) 31,227,557

TOTAL OPERATING EXPENDITURE 260,309,259 (49,296,819) 211,012,440

OPERATING SURPLUS/(DEFICIT) FOR THE

PERIOD (40,519,349) 41,631,211 1,111,863

Government Grants and Subsidies - Capital 20,990,324 5,000,000 25,990,324

NET SURPLUS/(DEFICIT) FOR THE PERIOD (19,529,025) 46,631,211 27,102,187




2017 2017 2017R R R



Receipts

Property rates 15,614,382 24,121,412 (8,507,030)

Service charges 74,257,400 80,347,277 (6,089,877)

Other revenue 10,496,517 34,699,239 (24,202,722)

Government - operating 73,230,155 87,929,000 (14,698,845)

Government - capital 29,931,011 31,552,000 (1,620,989)

Interest 1,431,704 5,722,375 (4,290,671)

Payments

Suppliers and Employees (147,096,278) (167,999,717) 20,903,439

Finance charges (8,563,560) (6,154,193) (2,409,367)

Transfers and Grants (191,813) (514,686) 322,874

NET CASH FROM OPERATING ACTIVITIES 49,109,519 89,702,708 (40,593,188)


Receipts

Proceeds on disposal of PPE - 1,282,133 (1,282,133)

Increase in non-current investments (91,532) - (91,532)

Payments

Capital assets (29,393,212) (26,610,350) (2,782,861)

NET CASH USED IN INVESTING

ACTIVITIES (29,484,744) (25,328,217) (4,156,527)


Receipts

Increase in consumer deposits 98,220 89,000 9,220

Payments

Repayment of borrowing (1,225,989) (1,133,490) (92,499)

NET CASH USED IN FINANCING

ACTIVITIES (1,127,770) (1,044,490) (83,280)

NET INCREASE IN CASH HELD 18,497,006 63,330,001 (44,832,995)

Cash and Cash Equivalents recognised on

merger date 3,161,071 1,055,815 2,105,256

Cash and Cash Equivalents at the end of

the period 21,658,077 64,385,816 (42,727,739)


WALTER SISULU LOCAL MUNICIPALITYSTATEMENT OF COMPARISON OF BUDGET AND ACTUAL AMOUNTS

CASH FLOW STATEMENT FOR THE PERIOD ENDING 30 JUNE 2017



2017 2017 2017R R R



Receipts

Property rates 24,121,412 - 24,121,412

Service charges 109,509,872 (29,162,594) 80,347,277

Other revenue 37,193,696 (2,494,457) 34,699,239

Government - operating 71,649,000 16,280,000 87,929,000

Government - capital 26,552,000 5,000,000 31,552,000

Interest 5,722,375 - 5,722,375 -

Payments

Suppliers and Employees (168,478,457) 478,741 (167,999,717)

Finance charges (6,825,705) 671,512 (6,154,193)

Transfers and Grants (514,686) - (514,686)

NET CASH FROM OPERATING ACTIVITIES 98,929,506 (9,226,799) 89,702,708


Receipts

Proceeds on disposal of PPE 1,282,133 - 1,282,133

Payments

Capital assets (26,210,350) (400,000) (26,610,350)

NET CASH USED IN INVESTING

ACTIVITIES (24,928,217) (400,000) (25,328,217)


Receipts

Increase in consumer deposits - 89,000 89,000

Payments

Repayment of borrowing (1,133,490) - (1,133,490)

NET CASH USED IN FINANCING

ACTIVITIES (1,133,490) 89,000 (1,044,490)

NET INCREASE IN CASH HELD 72,867,799 (9,537,799) 63,330,001

Cash and Cash Equivalents recognised on

merger date 1,055,815 - 1,055,815

Cash and Cash Equivalents at the end of

the period 73,923,614 (9,537,799) 64,385,816



1 ACCOUNTING POLICIES

1.01 BASIS OF PREPARATION

1.02 TRANSITIONAL PROVISIONS

The Municipality resolved to take advantage of the following transitional provisions:

1.03 PRESENTATION CURRENCY

1.04 GOING CONCERN ASSUMPTION


NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDING 30 JUNE 2017

The financial statements are presented in South African Rand, rounded off to the nearest Rand, which

is the Municipality's functional currency.

These financial statements have been prepared on a going concern basis.

The financial statements have been prepared on an accrual basis of accounting and are in accordance

with historical cost convention, unless specified otherwise.

The financial statements have been prepared in accordance with the Municipal Finance Management

Act (MFMA) and effective standards of Generally Recognised Accounting Practices (GRAP), including

any interpretations and directives issued by the Accounting Standards Board (ASB) in accordance with

Section 122(3) of the Municipal Finance Management Act, (Act No 56 of 2003).

Accounting policies for material transactions, events or conditions not covered by the GRAP reporting

framework, have been developed in accordance with paragraphs 8, 10 and 11 of GRAP 3 (Revised –

November 2013) and the hierarchy approved in Directive 5 issued by the Accounting Standards Board.

Assets, liabilities, revenue and expenses have not been offset, except when offsetting is permitted or

required by a Standard of GRAP.

The accounting policies applied are consistent with those used to present the previous year’s financial

statements, unless explicitly stated otherwise. The details of any changes in accounting policies are

explained in the relevant notes to the financial statements.

A summary of the significant accounting policies, which have been consistently applied except where

an exemption has been granted, are disclosed below.

In term of Directive 7 - "The Application of Deemed Cost on the Adoption of Standards of GRAP", the

Municipality applied deemed cost to Investment Property, Property, Plant and Equipment and

Intangible Assets where the acquisition cost of an asset could not be determined.

The Standard of GRAP on Mergers allows for a two year measurement period from merger date.

Where the accounting of merger items are incomplete at the reporting period, provisional amounts

are recorded in the financial statements.


1.05 COMPARATIVE INFORMATION

1.06 MATERIALITY

1.07 BUDGET INFORMATION

1.08

1.08.1 Effective GRAP standards

No comparitive information is disclosed as the Municipality was only established in the current

financial year.

Material omissions or misstatements of items are material if they could, individually or collectively,

influence the decision or assessments of users made on the basis of the financial statements.

Materiality depends on the nature or size of the omission or misstatements judged in the surrounding

circumstances. The nature or size of the information item, or a combination of both, could be the

determining factor. Materiality is determined as 1% of total operating expenditure. This materiality

is from management's perspective and does not correlate with the auditor's materiality.

Budget information is presented on the accrual basis and is based on the same fiscal period as the

The Statement of Comparison of Budget and Actual Amounts includes the comparison between the

approved and final budget amounts, as well as a comparison between the actual amounts and final

The disclosure of comparative information in respect of the previous period is not required by the

Standards of GRAP.

NEW STANDARDS, AMENDMENTS TO STANDARDS AND INTERPRETATIONS ISSUED BUT NOT YET

Where a Standard of GRAP has been issued but is not yet effective, the Municipality may resolve to

early adopt such a Standard of GRAP if an effective date has been determined by the Minister of

Finance.


1.08

Standard Effective Date

The Municipality resolved to early adopt the following amended Standards of GRAP which were

issued but are not yet effective:

Description

Heritage Assets

Transfer of Functions Between Entities Not Under

Common Control

The effect of the above-mentioned amended Standards of GRAP which were early adopted is

considered insignificant. The amendments to the Standards of GRAP mainly relate to the clarification

of accounting principles.

The Municipality resolved not to early adopt the following Interpretation of the Standard of GRAP

which was issued but is not yet effective:

Description

Recognition and Derecognition of Land

When the above-mentioned Interpretation of the Standards of GRAP becomes effective, the effect

will be insignificant as the Municipality’s current treatment is already in line with the interpretation's

requirements and will only result in additional disclosure.

The Municipality further resolved not to early adopt Directive 12 - "The Selection of an Appropriate

Reporting Framework by Public Entities" (effective 1 April 2018) as this Directive is not applicable to

municipalities and will have no impact on the Municipality once it becomes effective.

GRAP 106 (2017) 1 April 2018

Standard Effective Date

iGRAP 18 (2017) 1 April 2019

GRAP 103 (2017) 1 April 2018

Inventories

Investment Property

Property, Plant and Equipment

Impairment of non-cash-generating assets

Impairment of cash-generating assets

Agriculture

Intangible Assets

GRAP 27 (2017) 1 April 2018

GRAP 31 (2017) 1 April 2018

GRAP 17 (2017) 1 April 2018

GRAP 21 (2017) 1 April 2018

GRAP 26 (2017) 1 April 2018

GRAP 12 (2017) 1 April 2018

GRAP 16 (2017) 1 April 2018


EFFECTIVE (CONTINUED)


1.08

1.08.2 Effective dates not yet determined

1.08.2.1 GRAP 18 - Segment Reporting (Original - February 2011)

1.08.2.2 GRAP 20 - Related Party Disclosure (Original - June 2011)

1.08.2.3 GRAP 32 - Service Concession Arrangements: Grantor (Original - August 2013)

1.08.2.4 GRAP 34 - Separate Financial Statements (Original - March 2017)

No significant impact is expected as the Municipality has no investments in any entities.



Where a Standard of GRAP has been issued but not yet effective and the Minister of Finance has not

yet determined an effective date, the Municipality may select to apply the principles established in

that standard in developing an appropriate accounting policy dealing with a particular section or

event.

The following Standards of GRAP have been issued but are not yet effective as the Minister of Finance

has not yet determined the effective date for application:

The objective of this Standard is to establish principles for reporting financial information by

segments.

Preliminary investigations indicated that, other than additional disclosure, the impact of the

Standards on the financial statements will be not be significant.

The objective of this Standard is to ensure that a Municipality’s financial statements contains the

disclosures necessary to draw attention to the possibility that its financial position and surplus or

deficit may have been affected by the existence of related parties and by transactions and

outstanding balances with such parties.

The Municipality resolved to develop an accounting policy as set out in note and also adopt the

disclosure requirements of this Standard.

The impact of this Standard on the financial statements will be minimal.

The objective of this Standard is to prescribe the accounting for service concession arrangements by

the grantor and a public sector entity.

Preliminary investigations indicated that, other than possibly additional disclosure, the impact of the


The objective of this Standard is to prescribe the accounting and disclosure requirements for

investments in controlled entities, joint ventures and associates when an entity prepares separate



1.08

1.08.2.5 GRAP 35 - Consolidated Financial Statements (Original - March 2017)

1.08.2.6 GRAP 36 - Investments in Associates and Joint Ventures (Original - March 2017)

1.08.2.7 GRAP 37 - Joint Arrangements (Original - March 2017)

1.08.2.8 GRAP 38 - Disclosure of Interests in Other Entities (Original - March 2017)

(a)

(b)

1.08.2.9 GRAP 108 - Statutory Receivables (Original - September 2013)

The impact of this Standard on the financial statements will be minimal.

The Municipality resolved to develop an accounting policy as set out in

the effects of those interests on its financial position, financial performance and cash flows.

No significant impact is expected as the Municipality does not have an interest in any entities,

associates, joint ventures or joint arrangements.

The objective of this Standard is to prescribe accounting requirements for the recognition,

measurement, presentation and disclosure of statutory receivables.

The objective of this Standard is to establish principles for the presentation and preparation of

consolidated financial statements when an entity controls one or more other entities.

No significant impact is expected as the Municipality does not control any entities.

The objective of this Standard is to prescribe the accounting for investments in associates and joint

ventures and to set out the requirements for the application of the equity method when accounting

for investments in associates and joint ventures.

No significant impact is expected as the Municipality does not have investments in any associates or

joint ventures.

The objective of this Standard is to establish principles for financial reporting by entities that have an

interest in arrangements that are controlled jointly (i.e. joint arrangements).

No significant impact is expected as the Municipality does not have an interest in any arrangements

that are controlled jointly.

The objective of this Standard is to require an entity to disclose information that enables users of its

financial statements to evaluate:

the nature of, and risks associated with, its interests in controlled entities, unconsolidated

controlled entities, joint arrangements and associates, and structured entities that are not

consolidated; and




1.08

1.08.2.10 GRAP 109 - Accounting by Principles and Agents(Original - July 2015)

1.08.2.11 GRAP 110 - Living and Non-living Resources (Original - March 2017)

(a)

(b) disclosure requirements for non-living resources.

1.08.2.12

1.09 INVESTMENT PROPERTY

1.09.1 Initial Recognition

Investment property includes property (land or a building, or part of a building, or both land and

buildings held under a finance lease) held to earn rentals and/or for capital appreciation, rather than

held to meet service delivery objectives, the production or supply of goods or services, for

administration purposes, or the sale of an asset in the ordinary course of operations. Property with a

currently undetermined use, is also classified as investment property.

Investment property is recognised as an asset when it is probable that the future economic benefits

or service potential that are associated with the investment property will flow to the Municipality,

and the cost or fair value of the investment property can be measured reliably.

Investment property is initially measured at cost on its acquisition date. The cost of investment

property is the purchase price and other costs attributable to bring the asset to a condition necessary

for it to be capable of operating in the manner intended by the Municipality.

The objective of this Standard is to prescribe the:

recognition, measurement, presentation and disclosure requirements

No significant impact is expected as the Municipality does not have any living

The objective of this Standard is to outline principles to be used by an entity to assess whether it is

party to a principal-agent arrangement, and whether it is a principal or an agent in undertaking

transactions in terms of such an arrangement.

No significant impact is expected as the Municipality’s current treatment is already in line with the

Standard's requirements.

IGRAP 17 - Service Concession Arrangements Where a Grantor Controls a Significant Residual Interest in

an Asset

This Interpretation of the Standards provides guidance to the grantor where it has entered into a

service concession arrangement, but only controls a significant residual interest in a service

concession asset at the end of the arrangement, where the arrangement does not constitute a lease.

Preliminary investigations indicated that, other than possibly additional disclosure, the impact of the





1.09 INVESTMENT PROPERTY (CONTINUED)

1.09.2 Subsequent Measurement – Cost Model

1.09.3 Depreciation – Cost Model

The annual depreciation rates are based on the following estimated useful lives:

YEARS

Buildings 100

Land Indefinite

1.09.4 Impairment

At each reporting date the Municipality assesses whether there is any indication that expectations

about the residual value and the useful life of an asset may have changed since the preceding

reporting date. If any such indication exists, the expected residual value and useful life are revised

and the effect of any changes in estimate accounted for on the a prospective basis.

Investment property is reviewed at each reporting date for any indication of impairment. If any such

indication exists, the asset’s recoverable amount is estimated. The impairment recognised in the

Statement of Financial Performance is the excess of the carrying value over the recoverable amount.

Depreciation of an asset begins when it is available for use, i.e. when it is in the location and

condition necessary for it to be capable of operating in the manner intended by the Municipality.

Depreciation of an asset ceases at the date that the asset is derecognised.

Depreciation is calculated on the depreciable amount, using the straight-line method over the

estimated useful lives of the assets. The depreciation charge for each period is recognised in

Statement of Financial Performance, unless it is included in the carrying amount of another asset.

The depreciation method is reviewed at each reporting date, with the effect of any changes in

estimate accounted for on a prospective basis.

Where an investment property is acquired through a non-exchange transaction, its cost is measured at

its fair value as at the date of acquisition and any other costs attributable to bring the asset to a

condition necessary for it to be capable of operating in the manner intended by the Municipality. The

cost of self-constructed investment property is the cost at date of completion. Transfers are made to

or from investment property only when there is a change in use.

Where investment property is acquired in exchange for a non-monetary asset or monetary assets, or a

combination of monetary and non-monetary assets, the asset acquired is initially measured at fair

value (the cost). If the acquired item's fair value was not determinable, its deemed cost is the carrying


Subsequent to initial recognition, items of investment property are measured at cost less

accumulated depreciation and any accumulated impairment losses. Land is not depreciated as it is


1.09 INVESTMENT PROPERTY (CONTINUED)

1.09.5 Derecognition

1.10 PROPERTY, PLANT AND EQUIPMENT


Property, plant and equipment are tangible non-current assets that are held for use in the production

or supply of goods or services, rental to others, or for administrative purposes, and are expected to be

used during more than one year.

The cost of an item of property, plant and equipment is recognised as an asset if it is probable that

future economic benefits or service potential associated with the item will flow to the Municipality,

and the cost or fair value of the item can be measured reliably.

Items of property, plant and equipment are initially recognised at cost on its acquisition date. The

cost of an item of property, plant and equipment is the purchase price and other costs attributable to

bring the asset to the location and condition necessary for it to be capable of operating in the manner

intended by the Municipality. Trade discounts and rebates are deducted in arriving at the cost. The

cost also includes the necessary costs of dismantling and removing the asset and restoring the site on

which it is located.

Where an asset is acquired through a non-exchange transaction, the cost is deemed to be equal to the

fair value of that asset as at date of acquisition and any other costs attributable to bring the asset to

the location and condition necessary for it to be capable of operating in the manner intended by the

Municipality.

Where an item of property, plant and equipment is acquired in exchange for a non-monetary asset or

monetary assets, or a combination of monetary and non-monetary assets, the asset acquired is

initially measured at fair value (the cost). If the acquired item's fair value was not determinable, its

deemed cost is the carrying amount of the asset(s) given up.

An impairment is reversed only to the extent that the asset’s carrying amount does not exceed the

carrying amount that would have been determined had no impairment been recognised. A reversal of

an impairment is recognised in the Statement of Financial Performance.

An investment property is derecognised on disposal or when the investment property is permanently

withdrawn from use and no future economic benefits or service potential are expected from its

disposal.

Gains or losses arising from the retirement or disposal of investment property is determined as the

difference between the net disposal proceeds and the carrying amount of the asset and is recognised

in the Statement of Financial Performance in the period of the retirement or disposal.

Compensation from third parties for items of investment property that were impaired, lost or given

up is recognised in the Statement of Financial Performance when the compensation becomes

receivable.


1.10 PROPERTY, PLANT AND EQUIPMENT

1.10.2 Subsequent Measurement - Cost Model

1.10.3 Depreciation

The annual depreciation rates are based on the following estimated useful lives:

YEARS YEARS

Infrastructure Land and Buildings

Roads and Stormwater 7 - 50 Buildings 100

Electricity 20 - 45 Land Indefinite

Community Assets Other Assets

Recreation Grounds and Office Equipment and tools 1 - 20

Facilities 25 Motor vehicles and

Cemetery 25 implements 5 - 15

Lease assets

Office Equipment 3 - 5

Depreciation of an asset begins when it is available for use, i.e. when it is in the location and

condition necessary for it to be capable of operating in the manner intended by the Municipality.

Depreciation of an asset ceases at the date that the asset is derecognised.

Depreciation is calculated on the depreciable amount, using the straight-line method over the

estimated useful lives of the assets. The depreciation charge for each period is recognised in

Statement of Financial Performance, unless it is included in the carrying amount of another asset.

At each reporting date the Municipality assesses whether there is any indication that expectations

about the residual value and the useful life of an asset may have changed since the preceding

reporting date. If any such indication exists, the expected residual value and useful life are revised

and the effect of any changes in estimate are accounted for on a prospective basis.

When significant components of an item of property, plant and equipment have different useful lives,

they are accounted for as separate items (major components) of property, plant and equipment.

Spare parts and stand by equipment which are expected to be used for more than one period are

included in property, plant and equipment.

Subsequent to initial recognition, items of property, plant and equipment are measured at cost less

accumulated depreciation and any accumulated impairment losses. Land is not depreciated as it is

deemed to have an indefinite useful life.

Where the Municipality replaces parts of an asset, it derecognises the part of the asset being replaced

and capitalises the new component. Subsequent expenditure incurred on an asset is capitalised

when it increases the capacity or future economic benefits or service potential associated with the


1.10 PROPERTY, PLANT AND EQUIPMENT (CONTINUED)

1.10.4 Impairment


1.11 BIOLOGICAL ASSETS


A biological asset or agricultural produce is recognised when:

(a)

(b)

(c) and the fair value or cost of the asset can be measured reliably.

Biological assets are initially measured at their fair value less cost to sell.

1.11.2 Subsequent Measurement

A biological asset is a living animal or plant, while agricultural produce is the harvested product of the

biological asset.

Property, plant and equipment is reviewed at each reporting date for any indication of impairment. If

any such indication exists, the asset’s recoverable amount is estimated. The impairment recognised in

the Statement of Financial Performance is the excess of the carrying value over the recoverable

amount.




Items of property, plant and equipment are derecognised when the asset is disposed or when there

are no further economic benefits or service potential expected from the use of the asset.

The gain or loss arising on the disposal or retirement of an item of property, plant and equipment is

determined as the difference between the sales proceeds and the carrying value and is recognised in

the Statement of Financial Performance.

Compensation from third parties for items of property, plant and equipment that were impaired, lost

or given up is recognised in the Statement of Financial Performance when the compensation becomes

receivable.

it is probable that future economic benefits or service potential associated with the asset will

flow to the Municipality;

Where the Municipality acquires a biological asset through a non-exchange transaction, the biological

asset is also measured at its fair value less cost to sell.

Biological assets are measured at their fair value less cost to sell.

the Municipality controls the asset as a result of a past event;


1.11 BIOLOGICAL ASSETS (CONTINUED)

1.12 HERITAGE ASSETS


1.12.2 Subsequent Measurement – Cost Model

Heritage assets are carried at its cost less any accumulated impairment losses.

1.12.3 Depreciation

Heritage assets are not depreciated.

Where a heritage asset is acquired in exchange for a non-monetary asset or monetary assets, or a


value (the cost). If the acquired item’s fair value is not determinable, its deemed cost is the carrying


Where an asset is acquired through a non-exchange transaction, the cost is deemed to be equal to the

fair value of that asset as at date of acquisition and any other costs attributable to bring the asset to

the location and condition necessary for it to be capable of operating in the manner intended by the

Municipality.

Heritage assets are initially recognised at cost on its acquisition date. The cost of heritage assets is the

purchase price and other costs attributable to bring the asset to the location and condition necessary

for it to be capable of operating in the manner intended by the Municipality. Trade discounts and

rebates are deducted in arriving at the cost.

A heritage asset is recognised as an asset if it is probable that future economic benefits or service

potential associated with the asset will flow to the Municipality, and the cost or fair value of the asset

can be measured reliably.

A heritage asset is defined as an asset that has a cultural, environmental, historical, natural, scientific,

technological or artistic significance and is held and preserved indefinitely for the benefit of present

and future generations.

The fair value of game is determined based on market prices of livestock of similar age, breed, and

genetic merit in the local industry. Game is considered to be consumable biological assets.

A gain or loss arising on initial recognition of biological assets at fair value less cost to sell is

recognised in the Statement of Financial Performance for the period in which it arises.

Agricultural produce harvested from the Municipality's biological assets is measured at its fair value

less costs to sell at the point of harvest.


1.12 HERITAGE ASSETS (CONTINUED)

1.12.4 Impairment


1.13 INTANGIBLE ASSETS


An intangible asset is an identifiable non-monetary asset without physical substance.

Heritage assets are derecognised when it is disposed or when there are no further economic benefits

expected from the use of the heritage asset.




Heritage assets are reviewed at each reporting date for any indication of impairment. If any such



The Municipality recognises an intangible asset only when it is probable that the expected future

economic benefits or service potential that are attributable to the asset will flow to the Municipality

and the cost or fair value of the asset can be measured reliably.

Compensation from third parties for heritage assets that were impaired, lost or given up is recognised

in the Statement of Financial Performance when the compensation becomes receivable.

The gain or loss arising on the disposal or retirement of a heritage asset is determined as the

difference between the sales proceeds and the carrying value of the heritage asset and is recognised

in the Statement of Financial Performance.

Intangible assets are initially recognised at cost on its acquisition date. The cost of an intangible asset

is the purchase price and other costs attributable to bring the asset to the location and condition

necessary for it to be capable of operating in the manner intended by the Municipality. Trade

discounts and rebates are deducted in arriving at the cost.

Where an intangible asset is acquired through a non-exchange transaction, its initial cost is measured

at its fair value at the date of acquisition.

Where an intangible asset is acquired through a non-exchange transaction, its initial cost is measured

at its fair value at the date of acquisition and any other costs attributable to bring the asset to the

location and condition necessary for it to be capable of operating in the manner intended by the

Municipality.


1.13 INTANGIBLE ASSETS (CONTINUED)

(a)

(b) its intention to complete the intangible asset and use or sell it;

(c) its ability to use or sell the intangible asset;

(d)

(e)

(f)

1.13.2 Subsequent Measurement - Cost Model

1.13.3 Amortisation

The residual value of an intangible asset with a finite useful life is considered to be zero.

The annual amortisation rates are based on the following estimated useful lives:

Years

Computer Software 5 - 10

The amortisation period and amortisation method are reviewed at each reporting date, with the

effect of any changes in estimate accounted for on a prospective basis.

how the intangible asset will generate probable future economic benefits or service potential;

the availability of adequate technical, financial and other resources to complete the

development and to use or sell the intangible asset; and

its ability to measure reliably the expenditure attributable to the intangible asset during its

Intangible assets are subsequently carried at cost less accumulated amortisation and any accumulated

impairments losses.

The cost of an intangible asset is amortised over the useful life where that useful life is finite. Where

the useful life is indefinite, the asset is not amortised but is still subject to an annual impairment test.

Amortisation of an intangible with a finite life asset begins when it is available for use, i.e. when it is

in the location and condition necessary for it to be capable of operating in the manner intended by

the Municipality. Amortisation ceases at the date that the asset is derecognised.

Amortisation is calculated on the depreciable amount, using the straight-line method over the

estimated useful lives of the intangible assets. The amortisation charge for each period is recognised

in Statement of Financial Performance, unless it is included in the carrying amount of another asset.

the technical feasibility of completing the intangible asset so that it will be available for use or

sale;

Internally generated intangible assets are subject to a strict recognition criteria before they are

capitalised. Research expenditure is never capitalised, while development expenditure is only

Where an intangible asset is acquired in exchange for a non-monetary asset or monetary assets, or a


value (the cost). If the acquired item’s fair value is not determinable, its deemed cost is the carrying



1.13 INTANGIBLE ASSETS (CONTINUED)

1.13.4 Impairment


1.14 NON-CURRENT INVESTMENTS

1.15 IMPAIRMENT OF NON-MONETARY ASSETS

1.15.1 Recoverable amount of Cash-generating assets

The Municipality assesses at each reporting date whether there is any indication that an asset may be

impaired. If any such indication exists, the Municipality estimates the recoverable amount of the

asset.

The recoverable amount of an asset or a cash-generating unit is the higher of its fair value less costs to

sell and its value in use.

An impairment is a loss in the future economic benefits or service potential of an asset, over and

above the systematic recognition of the loss of the asset’s future economic benefits or service

potential through depreciation.

Cash-generating assets are assets held with the primary objective of generating a commercial return.

Non-cash-generating assets are assets other than cash-generating assets.

Intangible assets are reviewed at each reporting date for any indication of impairment. If any such






Intangible assets are derecognised when the asset is disposed or when there are no further economic

benefits or service potential expected from the use of the asset.

The gain or loss arising on the disposal or retirement of an intangible asset is determined as the

difference between the sales proceeds and the carrying value and is recognised in the Statement of

Financial Performance.

On disposal of an investment, the difference between the net disposal proceeds and the carrying

amount is recognised in the Statement of Financial Performance.

Investments include only fixed deposits invested in registered commercial banks.

Where investments have been impaired, the carrying value is adjusted by the impairment loss, which

is recognised as an expense in the Statement of Financial Performance in the period that the

impairment is identified.


1.15 IMPAIRMENT OF NON-MONETARY ASSETS (CONTINUED)

1.15.2 Recoverable amount of Non-cash-generating assets

1.15.3 Impairment loss

1.15.4 Reversal of an impairment loss

A reversal of an impairment loss of assets carried at cost less accumulated depreciation or

amortisation is recognised immediately in the Statement of Financial Performance.

A reversal of an impairment loss of assets carried at a revalued amount in accordance with another

Standard of GRAP is treated as a revaluation increase in accordance with that Standard of GRAP.

After the reversal of an impairment loss, the depreciation (amortisation) charge for the asset is

adjusted in future periods to allocate the asset's revised carrying amount, less its residual value (if

any), on a systematic basis over its remaining useful life.

If the recoverable amount of an asset is less than its carrying amount, the carrying amount of the asset

is reduced to its recoverable amount. That reduction is an impairment loss.

An impairment loss of assets carried at cost less any accumulated depreciation or amortisation is

recognised immediately in the Statement of Financial Performance.

An impairment loss of assets carried at a revalued amount in accordance with another Standard of

GRAP is treated as a revaluation decrease in accordance with that Standard of GRAP.

After the recognition of an impairment loss, the depreciation (amortisation) charge for the asset is

adjusted in future periods to allocate the asset's revised carrying amount, less its residual value (if

any), on a systematic basis over its remaining useful life.

The Municipality assesses at each reporting date whether there is any indication that an impairment

loss recognised in prior periods for assets may no longer exist or may have decreased. If any such

indication exists, the recoverable amounts of those assets are estimated.

The increased carrying amount of an asset attributable to a reversal of an impairment loss does not

exceed the carrying amount that would have been determined had no impairment loss been

recognised for the asset in prior periods.

The best evidence of fair value less costs to sell is the amount obtainable from the sale of an asset in

an arm’s length transaction between knowledgeable, willing parties, less the costs of disposal.

Value in use of a cash-generating asset is the present value of the estimated future cash flows

expected to be derived from the continuing use of an asset and from its disposal at the end of its

useful life.

The recoverable service amount is the higher of a non-cash generating asset's fair value less costs to

sell and its value in use.

The value in use for a non-cash generating asset is the present value of the asset’s remaining service

potential. Fair value less costs to sell is the amount obtainable from the sale of an asset in an arm’s

length transaction between knowledgeable, willing parties, less the costs of disposal.


1.16 INVENTORIES


Inventories are assets:

(a)

(b)

(c)

(d)


Inventories are valued at the lower of cost and net realisable value unless they are to be distributed

at no or nominal charge, in which case they are measured at the lower of cost and current

replacement cost.

Net realisable value is the estimated selling price in the ordinary course of operations less the

estimated costs of completion and the estimated costs necessary to make the sale, exchange or

distribution. Current replacement cost is the cost the Municipality would incur to acquire the asset on

the reporting date.

The amount of any write-down of inventories to net realisable value or current replacement cost and

all losses of inventories is recognised as an expense in the period the write-down or loss occurs.

The amount of any reversal of any write-down of inventories, arising from an increase in net

realisable value or current replacement cost, is recognised as a reduction in the amount of inventories

recognised as an expense in the period in which the reversal occurs.

in the process of production for sale or distribution.

Inventories are recognised as an asset if it is probable that future economic benefits or service

potential associated with the item will flow to the Municipality, and the cost of the inventories can be

measured reliably.

Inventories are initially recognised at cost. Cost generally refers to the purchase price, plus non-

recoverable taxes, transport costs and any other costs in bringing the inventories to their current

location and condition. Trade discounts, rebates and other similar items are deducted in determining

the costs of purchase.

Where inventory is manufactured, constructed or produced, the cost includes the cost of labour,

materials and overheads used during the manufacturing process.

Where inventories are acquired through a non-exchange transaction, the cost is measured at the fair

value as at the date of acquisition plus any other costs in bringing the inventories to their current

location and condition.

When inventories are sold, exchanged or distributed the carrying amount of those inventories are

recognised as an expense in the period in which the related revenue is recognised. If there is no

related revenue, the expense is recognised when the goods are distributed, or related service is

rendered.

in the form of materials or supplies to be consumed in the production process;

in the form of materials or supplies to be consumed or distributed in the rendering of services;

held for sale or distribution in the ordinary course of operations; or


1.16 INVENTORIES (CONTINUED)

The basis of allocating cost to inventory items is the weighted average method.

1.17 EMPLOYEE BENEFITS

1.17.1 Post-Retirement Benefits

1.17.1.1 Multi-employer defined benefit plans

1.17.1.2 Post Retirement Medical Obligations

Defined-contribution plans are post-employment benefit plans under which the Municipality pays

fixed contributions into a separate entity (a fund), and will have no legal or constructive obligation to

pay further contributions if the fund does not hold sufficient assets to pay all employee benefits

relating to employee service in the current and prior periods. The contributions to fund obligations for

the payment of retirement benefits are recognised in the Statement of Financial Performance in the

year during which they become payable.

Defined-benefit plans are post-employment benefit plans other than defined-contribution plans.

The Municipality provides retirement benefits for its employees and councillors. Retirement benefits

consist of defined-contribution plans and defined-benefit plans.

The municipality contributes to various National- and Provincial-administered defined benefit plans

on behalf of its qualifying employees. These funds are multi-employer funds. The contributions to

fund obligations for the payment of retirement benefits are recognised in the Statement of Financial

Performance in the year they become payable. These defined benefit funds are actuarially valued on

the projected unit credit method basis. Deficits are recovered through lump sum payments or

increased future contributions on a proportional basis from all participating municipalities.

The Municipality provides post-retirement medical benefits by subsidizing the medical aid

contributions of certain retired staff according to the rules of the medical aid funds. Council pays 60%

as contribution and the remaining 40% is paid by the members. The entitlement to these benefits is

usually conditional on the employee remaining in service up to retirement age and the completion of

a minimum service period. The present value of the defined benefit liability is actuarially

determined. The plan is unfunded.

At reporting date, the water volume is determined by way of dip readings and the calculated volume

in the distribution network. Water inventory is then measured by multiplying the cost per kilo litre of

purified water by the amount of water in storage.

Cost of land held for sale is assigned by using specific identification of their individual costs.


1.17 EMPLOYEE BENEFITS (CONTINUED)

1.17.2 Long-term Benefits

1.17.2.1 Long Service Awards

1.17.3 Short-term Benefits

1.17.3.1 Provision for Staff Leave

1.17.3.2 Staff Bonuses Accrued

Accumulating leave is carried forward and can be used in future periods if the current period’s

entitlement is not used in full. All unused leave will be paid out to the specific employee at the end

of that employee’s employment term. Accumulated leave is vesting.

The liability for staff bonuses is based on the accrued bonus for each employee at reporting date.

Actuarial gains and losses arising from the experience adjustments and changes in actuarial

assumptions, are recognised in the Statement of Financial Performance in the period that it occurs.

These obligations are valued annually by independent qualified actuaries.

Long service awards are provided to employees who achieve certain pre-determined milestones of

service within the Municipality. The Municipality’s obligation under these plans is valued by

independent qualified actuaries annually and the corresponding liability is raised. Payments are set-

off against the liability, including notional interest, resulting from the valuation by the actuaries and

are recognised in the Statement of Financial Performance as employee benefits upon valuation.

Actuarial gains and losses arising from the experience adjustments and changes in actuarial

assumptions, is recognised in the Statement of Financial Performance in the period that it occurs.

These obligations are valued annually by independent qualified actuaries.

Liabilities for annual leave are recognised as they accrue to employees. The liability is based on the

total amount of leave days due to employees at reporting date and also on the total remuneration

package of the employee.

Contributions are recognised in the Statement of Financial Performance when employees have

rendered the service entitling them to the contribution. The liability is calculated by means of the

projected unit credit actuarial valuation method. The liability in respect of current pensioners is

regarded as fully accrued, and is therefore not split between a past (or accrued) and future in-service

element. The liability is recognised at the present value of the defined benefit obligation at the

reporting date, minus the fair value at the reporting date of plan assets (if any) out of which the

obligations are to be settled directly, plus any liability that may arise as a result of a minimum funding

requirements. Payments made by the Municipality are set-off against the liability, including notional

interest, resulting from the valuation by the actuaries and are recognised in the Statement of

Financial Performance as employee benefits upon valuation.


1.17 EMPLOYEE BENEFITS (CONTINUED)

1.17.3.3 Provision for Performance Bonuses

1.18 PROVISIONS

(a) The Municipality has a detailed formal plan for the restructuring identifying at least:

• the business or part of a business concerned;

• the principal locations affected;

•

• the expenditures that will be undertaken; and

• when the plan will be implemented.

(b)

Future events that may affect the amount required to settle an obligation are reflected in the amount

of a provision where there is sufficient objective evidence that they will occur. Gains from the

expected disposal of assets are not taken into account in measuring a provision. Provisions are not

recognised for future operating losses. The present obligation under an onerous contract is

recognised and measured as a provision.

Where some or all of the expenditure required to settle a provision is expected to be reimbursed by

another party, the reimbursement is recognised when it is virtually certain that reimbursement will

be received if the Municipality settles the obligation. The reimbursement is treated as a separate

asset. The amount recognised for the reimbursement will not exceed the amount of the provision. In

the Statement of Financial Performance, the expense relating to a provision may be presented net of

the amount recognised for a reimbursement.

A provision for restructuring costs is recognised only when the following criteria over and above the

recognition criteria of a provision have been met:

the location, function and approximate number of employees who will be

compensated for terminating their services;

The Municipality has raised a valid expectation in those affected that it will carry out the

restructuring by starting to implement that plan or announcing its main features to those

affected by it.

A provision, in respect of the liability relating to the anticipated costs of performance bonuses

payable to Section 57 employees, is recognised as it accrue to Section 57 employees. Provisions are

based on the employment contract stipulations as well as previous performance bonus payment

trends.

A provision is a liability of uncertain timing or amount. Provisions are recognised when the

Municipality has a present legal or constructive obligation as a result of past events, it is probable that

an outflow of resource embodying economic benefits or service potential will be required to settle

the obligation and a reliable estimate of the provision can be made.

Provisions are reviewed at reporting date and adjusted to reflect the current best estimate of future

outflows of resources. Where the effect is material, non-current provisions are discounted to their

present value using a discount rate that reflects the market’s current assessment of the time value of

money, adjusted for risks specific to the liability.


1.18 PROVISIONS (CONTINUED)

1.19 LEASES

1.19.1 Municipality as Lessee

1.19.1.1 Finance Leases

1.19.2 Municipality as Lessor

1.19.2.1 Operating Leases

Operating lease revenue is recognised in the Statement of Financial Performance on a straight-line

basis over the term of the relevant lease, unless another systematic basis is more representative of

the time pattern in which benefit derived from the leased asset is diminished. The difference

between the straight-lined revenue and actual payments received will give rise to an asset.

A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to

ownership. A lease is classified as an operating lease if it does not transfer substantially all the risks

and rewards incidental to ownership.

At the commencement of the lease term, the Municipality recognises assets acquired under finance

leases as assets and the associated lease obligations as liabilities in the Statement of Financial

Position.

At the inception of the lease, the assets and liabilities are recognised at the lower of the fair value of

the leased property and the present value of the minimum lease payments. The discount rate to be

used in calculating the present value of the minimum lease payment is the interest rate implicit in the

lease. If the rate implicit to the lease is not available the Municipality's incremental borrowing rate is

used. Any initial direct costs of the Municipality are added to the amount recognised as an asset.

Subsequent to initial recognition, the minimum lease payments are apportioned between the finance

charge and the reduction of the outstanding liability. The finance charge are allocated to each period

during the lease term so as to produce a constant periodic rate of interest on the remaining balance of

the liability. Contingent rents, if any, are charged as expenses to the Statement of Financial

Performance in the periods in which they are incurred. The leased assets are accounted for in

accordance with the stated accounting policies applicable to the assets.

If it is no longer probable that an outflow of resources embodying economic benefits or service

potential will be required to settle the obligation, the provision is derecognised.


1.20 FINANCIAL INSTRUMENTS



Financial instruments are categorised as follow:

(a)

(b)

(c)

(i) derivatives;

(ii) combined instruments that are designated at fair value;

(iii) instruments held for trading;

(iv)

(v)

Financial instruments at fair value comprise of financial assets or financial liabilities that are:

non-derivative financial assets or financial liabilities with fixed or

determinable payments that are designated at fair value at initial

recognition; or

financial instruments that do not meet the definition of financial

instruments at amortised cost or financial instruments at cost.

Both, financial assets and financial liabilities are subsequently measured at fair value with

unrealised gains or losses recognised directly in the Statement of Financial Performance.

Financial instruments (financial assets and financial liabilities) are recognised on the Municipality's

Statement of Financial Position when it becomes party to the contractual provisions of the

instrument.

Financial instruments are initially recognised at fair value plus, in the case of a financial asset or

financial liability not at fair value, transaction costs that are directly attributable to the acquisition or

issue of the financial asset or financial liability. If finance charges in respect of financial assets and

financial liabilities are significantly different from similar charges usually obtained in an open market

transaction, adjusted for the specific risks of the Municipality, such differences are immediately

recognised in the period it occurs, and the unamortised portion adjusted over the period of the loan

transactions.

Financial instruments at amortised cost are non-derivative financial instruments with fixed or

determinable payments that are not quoted in an active market. They are included in current

assets or current liabilities, except for maturities greater than 12 months, which are classified as

non-current. After initial recognition, both financial assets and financial liabilities are measured

at amortised cost, using the effective interest rate method. Financial assets are also subject to

an impairment review.

Financial instruments at cost are investments in residual interests that do not have a quoted

market price in an active market, and whose fair value cannot be reliably measured. Both

financial assets and financial liabilities are subsequently measured at cost. Financial assets are

subject to an impairment review.


1.20 FINANCIAL INSTRUMENTS (CONTINUED)

1.20.3 Impairment and uncollectability of financial assets

1.20.3.1 Financial assets measured at amortised cost

1.20.3.2 Financial assets measured at cost

1.20.4 Derecognition of financial instruments

1.20.4.1 Financial assets

If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be

related objectively to an event occurring after the impairment was recognised, the previously

recognised impairment is reversed by adjusting an allowance account. The amount of the reversal is

recognised in Statement of Financial Performance.

If there is objective evidence that an impairment loss has been incurred on an investment in a

residual interest that is not measured at fair value because its fair value cannot be measured reliably,

the amount of the impairment loss is measured as the difference between the carrying amount of the

financial asset and the present value of estimated future cash flows discounted at the current market

rate of return for a similar financial asset. Such impairment losses is not be reversed.

The Municipality derecognises financial assets only when the contractual rights to the cash flows from

the asset expire or it transfers the financial asset and substantially all the risks and rewards of

ownership of the asset to another entity. Financial assets (receivables) are also derecognised when

Council approves the write-off of financial assets due to non-recoverability.

If the Municipality neither transfers nor retains substantially all the risks and rewards of ownership

and continues to control the transferred asset, the Municipality recognises its retained interest in the

asset and an associated liability for amounts it may have to pay. If the Municipality retains

substantially all the risks and rewards of ownership of a transferred financial asset, the Municipality

continues to recognise the financial asset and also recognises a collateralised borrowing for the

proceeds received.

Financial assets, other than those at fair value, are assessed for indicators of impairment at each

reporting date. Financial assets are impaired where there is objective evidence of impairment of

financial assets.

If there is objective evidence that an impairment loss on financial assets measured at amortised cost

has been incurred, the amount of the loss is measured as the difference between the asset’s carrying

amount and the present value of estimated future cash flows discounted at the financial asset’s

original effective interest rate (i.e. the effective interest rate computed at initial recognition). Cash

flows relating to short-term financial assets are not discounted where the effect of discounting is

immaterial. The carrying amount of the asset is reduced through the use of an allowance account. The

amount of the loss is recognised in the Statement of Financial Performance.


1.20 FINANCIAL INSTRUMENTS (CONTINUED)

1.20.4.2 Financial liabilities

1.20.5 Offsetting of financial instruments

1.21 STATUTORY RECEIVABLES



1.21.3 Impairment and uncollectability of statutory receivables

Financial assets and financial liabilities are offset and the net amount reported in the Statement of

Financial Position if there is a currently enforceable legal right to offset the recognised amounts and

there is an intention to settle on a net basis, or to realise the assets and settle the liabilities

simultaneously.

Statutory receivables arise from legislation, supporting regulations, or similar means and require

settlement by another entity in cash or another financial asset. Statutory receivables can arise from

both exchange and non-exchange transactions.

Statutory receivables are recognised when the related revenue (exchange or non-exchange revenue)

is recognised or when the receivable meets the definition of an asset. The Municipality initially

measure statutory receivables at their transaction amount.

The Municipality measures statutory receivables after initial recognition using the cost method. Under

the cost method, the initial measurement of the receivable is subsequently changed to reflect any

interest or other charges that may have accrued on the receivable, less any impairment losses and

amounts derecognised.

The Municipality assesses at each reporting date whether there is any indication that a statutory

receivable may be impaired.

The Municipality derecognises financial liabilities when the Municipality's obligations are discharged,

cancelled or they expire.

The Municipality recognises the difference between the carrying amount of the financial liability (or

part of a financial liability) extinguished or transferred to another party and the consideration paid,

including any non-cash assets transferred or liabilities assumed, in the Statement of Financial

Performance.


1.21 STATUTORY RECEIVABLES (CONTINUED)


1.22 CASH AND CASH EQUIVALENTS

1.23 RECEIVABLES

For the purposes of the cash flow statement, cash and cash equivalents consist of cash and cash

equivalents as defined above, net of any bank overdrafts.

Receivables are recognised initially at fair value, which approximates amortised cost less provision for

impairment. Amounts receivable within 12 months from the date of reporting are classified as

current.

An impairment loss recognised in prior periods for a statutory receivable is revised if there has been a

change in the estimates used since the last impairment loss was recognised, or to reflect the effect of

discounting the estimated cash flows. Any previously recognised impairment loss is adjusted by

adjusting the allowance account. The amount of any adjustment is recognised in the Statement of


The Municipality derecognises a statutory receivable when the rights to the cash flows from the

receivable are settled, expire or are waived or the Municipality transfers the receivable and

substantially all the risks and rewards of ownership of the receivable to another entity.

When the Municipality, despite having retained some significant risks and rewards of ownership of

the receivable, has transferred control of receivable to another entity, the Municipality derecognises

the receivable and recognises separately any rights and obligations created or retained in the transfer.

Cash includes cash on hand, cash held with banks, and call deposits. Cash equivalents are short-term

highly liquid investments with registered banking institutions with maturities of three months or less

from inception, readily convertible to cash without significant change in value.

Bank overdrafts are recorded based on the facility utilised. Finance charges on bank overdraft are

expensed as incurred in the Statement of Financial Performance.

If there is an indication that a statutory receivable may be impaired, the Municipality measures the

impairment loss as the difference between the estimated future cash flows and the carrying amount.

Where the carrying amount is higher than the estimated future cash flows, the carrying amount of the

statutory receivable is reduced, through the use of an allowance account. The amount of the loss is

recognised in the Statement of Financial Performance. In estimating the future cash flows, the

Municipality considers both the amount and timing of the cash flows that it will receive in future.

Consequently, where the effect of the time value of money is material, the Municipality discounts the

estimated future cash flows using a rate that reflects the current risk free rate and any risks specific to

the statutory receivable for which the future cash flow estimates have not been adjusted.


1.23 RECEIVABLES (CONTINUED)

1.24 TAXES (VALUE ADDED TAX)

1.25 PAYABLES AND ANNUITY LOANS

1.26 CONSUMER DEPOSITS

1.27 UNSPENT CONDITIONAL GOVERNMENT GRANTS AND UNSPENT PUBLIC CONTRIBUTIONS

Payables and annuity loans are initially recognised at fair value and subsequently measured at

amortised cost using an effective interest rate, which is the initial carrying amount, less repayments,

plus interest.

Consumer deposits are disclosed as a current liability. Consumer deposits are levied in line with

council's policy to consumers when services are initially connected. When services are disconnected

or terminated, the outstanding deposit is utilised against any arrear accounts the consumer might be

liable for on that date. Any excess deposit after all debt is settled is refunded to the specific

consumer.

Grants, transfers and donations received or receivable are recognised as assets when the resources

that have been transferred to the Municipality meet the definition and criteria for recognition as

assets.

Conditional grants, transfers and donations are recognised as revenue to the extent that the

Municipality has complied with the conditions embodied in the agreement. Where the agreement

contains a stipulation to return the asset, other future economic benefits or service potential, in the

event of non-compliance to these stipulations and would be enforced by the transferor, a liability is

recognised to the extent that the conditions have not been met. Where such requirements are not

enforceable, or where past experience has indicated that the transferor has never enforced the

requirement to return the transferred asset, other future economic benefits or service potential

when breaches have occurred, the stipulation will be considered a restriction and is recognised as

revenue.

A provision for impairment of receivables is established when there is objective evidence that the

Municipality will not be able to collect all amounts due according to the original terms of receivables.

An estimate is made for impairment of receivables, based on past default experience of all

outstanding amounts at reporting date.

Bad debts are written off in the year during which they are identified as irrecoverable, subject to the

approval by the appropriate delegated authority. When a receivable is considered uncollectible, it is

written off against the allowance account. Subsequent recoveries of amounts previously written off

are credited against the Statement of Financial Performance.

Revenue, expenses and assets are recognised net of the amounts of value added tax. The net amount

of Value Added Tax recoverable from, or payable to, the taxation authority is included in the

Statement of Financial Position. The Municipality accounts for value-added tax (VAT) on the payment

basis.


1.27 UNSPENT CONDITIONAL GOVERNMENT GRANTS AND UNSPENT PUBLIC CONTRIBUTIONS (CONTINUED)

1.28 REVENUE

1.28.1 Revenue from Non-Exchange Transactions

1.28.1.1 Taxation Revenue

1.28.1.2 Transfer Revenue

Taxation revenue comprises of property rates. Revenue from property rates is recognised when the

legal entitlement to this revenue arises. Collection charges are recognised when such amounts are

legally enforceable. Penalty interest on unpaid rates is recognised on a time proportion basis with

reference to the principal amount receivable and effective interest rate applicable. A composite

rating system charging different rate tariffs is employed. Rebates are granted to certain categories of

ratepayers and are deducted from revenue.

Grants, transfers and donations received or receivable are recognised when the resources that have

been transferred, meet the criteria for recognition as an asset. A corresponding liability is recognised

to the extent that the grant, transfer or donation is conditional. The liability is transferred to revenue

as and when the conditions attached to the grant are met.

Grants, transfers and donations without any conditions attached are recognised as revenue when the

asset is recognised.

The liability recognised to the extent that the conditions associated with the grant, transfer or

donation have not been met, always has to be cash-backed. The cash which backs up the liability is

invested as a individual investment or part of the general investments of the Municipality until it is

utilised.

Interest earned on investments of grants, transfers and donations are treated in accordance with

conditions as stipulated in the agreement. If it is payable to the grantor it is recorded as part of the

creditor and if it is the Municipality’s interest it is recognised as interest earned in the Statement of


At the time of initial recognition, the full amount of revenue is recognised where the Municipality has

an enforceable legal obligation to collect, unless the Municipality has no intention of collecting this

revenue. Where the Municipality has no intention of collecting the revenue, rebates and discounts

are offset against the related revenue. If the Municipality does not successfully enforce its obligation

to collect the revenue this would be considered a subsequent event.

Revenue from non-exchange transactions refers to transactions where the Municipality received

revenue from another entity without directly giving approximately equal value in exchange.

Revenue from non-exchange transactions is generally recognised to the extent that the related

receipt or receivable qualifies for recognition as an asset and there is no liability to repay the amount.


1.28 REVENUE (CONTINUED)

1.28.1.3 Fines

1.28.1.4 Insurance Receipts

1.28.1.5 Unclaimed deposits

1.28.1.6 Revenue from Recovery of Unauthorised, Irregular, Fruitless and Wasteful Expenditure

1.28.1.7 Services in-kind

When the criteria for recognition is satisfied, services in-kind are recognised at their fair value as at

the date of acquisition.

Income from the recovery of unauthorised, irregular, fruitless and wasteful expenditure is based on

legislated procedures, including those set out in the MFMA (Act 56 of 2003), and is recognised upon

the recovery thereof from the responsible party.

Services in-kind include services provided by individuals to the Municipality at no charge or where the

Municipality has the right to use assets at no charge.

The Municipality's recognises services in-kind that are significant to its operations as assets and

recognises the related revenue when it is probable that the future economic benefits or service

potential will flow to the Municipality and the fair value of the assets can be measured reliably.

Fine Revenue constitutes both spot fines and summonses. Fine revenue is recognised when the spot

fine or summons is issued. In cases where fines and summonses are issued and collected by another

government institute, revenue will only be recognised when monies are received, as the Municipality

does not have any control over fines issued or collected by other government institutes.

Revenue from third parties i.e. insurance payments for assets impaired, are recognised when it can be

measured reliably and is not being offset against the related expenses of repairs or renewals of the

impaired assets.

All unclaimed deposits are initially recognised as a liability until 12 months expires, when all

unclaimed deposits into the Municipality’s bank account will be treated as revenue. Historical

patterns have indicated that minimal unidentified deposits are reclaimed after a period of twelve

months. Therefore the substance of these transactions indicate that even though the prescription

period for unclaimed monies is legally three years, it is reasonable to recognised all unclaimed

monies older than twelve months as revenue. Although unclaimed deposits are recognised as

revenue after 12 months, the Municipality still keep record of these unclaimed deposits for three

years in the event that a party should submit a claim after 12 months, in which case it will be

expensed.



1.28.1.3 Fines

1.28.1.4 Insurance Receipts

1.28.1.5 Unclaimed deposits

1.28.1.6 Revenue from Recovery of Unauthorised, Irregular, Fruitless and Wasteful Expenditure

1.28.1.7 Services in-kind

When the criteria for recognition is satisfied, services in-kind are recognised at their fair value as at

the date of acquisition.

Income from the recovery of unauthorised, irregular, fruitless and wasteful expenditure is based on

legislated procedures, including those set out in the MFMA (Act 56 of 2003), and is recognised upon

the recovery thereof from the responsible party.

Services in-kind include services provided by individuals to the Municipality at no charge or where the

Municipality has the right to use assets at no charge.

The Municipality's recognises services in-kind that are significant to its operations as assets and

recognises the related revenue when it is probable that the future economic benefits or service

potential will flow to the Municipality and the fair value of the assets can be measured reliably.

Fine Revenue constitutes both spot fines and summonses. Fine revenue is recognised when the spot

fine or summons is issued. In cases where fines and summonses are issued and collected by another

government institute, revenue will only be recognised when monies are received, as the Municipality

does not have any control over fines issued or collected by other government institutes.

Revenue from third parties i.e. insurance payments for assets impaired, are recognised when it can be

measured reliably and is not being offset against the related expenses of repairs or renewals of the

impaired assets.

All unclaimed deposits are initially recognised as a liability until 12 months expires, when all

unclaimed deposits into the Municipality’s bank account will be treated as revenue. Historical

patterns have indicated that minimal unidentified deposits are reclaimed after a period of twelve

months. Therefore the substance of these transactions indicate that even though the prescription

period for unclaimed monies is legally three years, it is reasonable to recognised all unclaimed

monies older than twelve months as revenue. Although unclaimed deposits are recognised as

revenue after 12 months, the Municipality still keep record of these unclaimed deposits for three

years in the event that a party should submit a claim after 12 months, in which case it will be

expensed.



1.28.1.8 Contributed Assets

1.28.2 Revenue from Exchange Transactions

1.28.2.1 Service Charges

Service Charges are levied in terms of approved tariffs.

If the services in-kind are not significant to the Municipality’s operations or does not satisfy the

criteria for recognition, the Municipality only disclose the nature and type of services in-kind received

during the reporting period.

Contributed assets are recognised at fair value when such items of property, plant and equipment

qualifies for recognition and become available for use by the Municipality.

Revenue from exchange transactions refers to revenue that accrued to the Municipality directly in

return for services rendered or goods sold, the value of which approximates the consideration

received or receivable.

Service charges relating to electricity is based on consumption and a basic charge as per the approved

tariffs. Meters are read on a monthly basis and are recognised as revenue when invoiced. Where the

Municipality was unable to take the actual month's reading of certain consumers, a provisional

estimate of consumption for that month will be created, based on consumption history. The

provisional estimates of consumption are recognised as revenue when invoiced, except at reporting

date when estimates of consumption up to the reporting date are recorded as revenue without being

invoiced. Adjustments to provisional estimates of consumption are made in the invoicing period in

which meters have been read. These adjustments are recognised as revenue in the invoicing period.

In respect of estimates of consumption between the last reading date and the reporting date, an

accrual is made based on the average monthly consumption of consumers.

Revenue from the sale of electricity prepaid meter cards is recognised at the point of sale. It is

estimated that pre-paid electricity is consumed within 5 to 7 days after date of purchase. The pre-paid

electricity sold, but not consumed yet at reporting date is recognised as a liability under Payables

from Exchange Transactions in the Statement of Financial Position.

Service charges relating to refuse removal are recognised on a monthly basis in arrears by applying the

approved tariff to each property that has improvements. Tariffs are determined per category of

property usage, and are levied monthly based on the number of refuse containers on each property,

regardless of whether or not all containers are emptied during the month.



1.28.2.2 Investment income

1.28.2.3 Rental income

1.28.2.4 Income from Agency Services

1.28.2.5 Other Tariffs

1.28.2.6 Sale of goods

(a)

(b)

(c) The amount of revenue can be measured reliably.

(d)

(e)

1.28.2.7 Deferred payment

Revenue from the sale of goods is recognised when all the following conditions are satisfied:

The Municipality retains neither continuing managerial involvement to the degree usually

associated with ownership nor effective control over the goods sold.

It is probable that the economic benefits or service potential associated with the transaction will

flow to the Municipality.

The costs incurred or to be incurred in respect of the transaction can be measured reliably.

In most cases, the consideration is in the form of cash or cash equivalents and the amount of revenue

is the amount of cash or cash equivalents received or receivable. However, when the inflow of cash or

cash equivalents is deferred, the fair value of the consideration may be less than the nominal amount

of cash received or receivable. When the arrangement effectively constitutes a financing transaction,

the fair value of the consideration is determined by discounting all future receipts using an imputed

rate of interest.

Interest earned on investments is recognised in the Statement of Financial Performance on the time

proportionate basis that takes into account the effective yield on the investment.

Revenue from the rental of facilities and equipment is recognised on a straight-line basis over the

term of the lease agreement.

Revenue arising out of situations where the Municipality acts as an agent on behalf of another entity

(the principal) is limited to the amount of any fee or commission payable to the Municipality as

compensation for executing the agreed services.

Income from agency services is recognised on a monthly basis once the income collected on behalf of

agents has been quantified. The income recognised is in terms of the agency agreement.

Revenue arising from the application of the approved tariff of charges is recognised when the

relevant service is rendered by applying the relevant tariff. This includes the issuing of licences and

permits.

The Municipality has transferred to the purchaser the significant risks and rewards of ownership

of the goods.



1.29 BORROWING COSTS

1.30 UNAUTHORISED EXPENDITURE

1.31 IRREGULAR EXPENDITURE

1.32 FRUITLESS AND WASTEFUL EXPENDITURE

1.33 CONTINGENT LIABILITIES AND CONTINGENT ASSETS

Borrowing costs that are incurred by the Municipality are expensed in the Statement of Financial

Performance in the period during which they are incurred, regardless of how the borrowings are

applied.

Unauthorised expenditure is expenditure that has not been budgeted, expenditure that is not in

terms of the conditions of an allocation received from another sphere of government, municipality or

organ of state and expenditure in a form of a grant that is not permitted in terms of the Municipal

Finance Management Act (Act No. 56 of 2003). Unauthorised expenditure is accounted for as an

expense (measured at actual cost incurred) in the Statement of Financial Performance and where

recovered, it is subsequently accounted for as revenue in the Statement of Financial Performance.

Contingent assets represent possible assets that arise from past events and whose existence will be

confirmed only by an occurrence or non-occurrence of one or more uncertain future events not wholly

within the control of the Municipality.

Irregular expenditure is expenditure that is contrary to the Municipal Finance Management Act (Act

No. 56 of 2003), the Municipal Systems Act (Act No. 32 of 2000), the Public Office Bearers Act, and (Act.

No. 20 of 1998) or is in contravention of the Municipality’s Supply Chain Management Policy. Irregular

expenditure is accounted for as expenditure (measured at actual cost incurred) in the Statement of

Financial Performance and where recovered, it is subsequently accounted for as revenue in the

Statement of Financial Performance.

Fruitless and wasteful expenditure is expenditure that was made in vain and could have been avoided

had reasonable care been exercised. Fruitless and wasteful expenditure is accounted for as

expenditure (measured at actual cost incurred) in the Statement of Financial Performance and where

recovered, it is subsequently accounted for as revenue in the Statement of Financial Performance.

A contingent liability is a possible obligation that arises from past events and whose existence will be

confirmed only by the occurrence or non-occurrence of one or more uncertain future events not

wholly within the control of the Municipality. A contingent liability could also be a present obligation

that arises from past events, but is not recognised because it is not probable that an outflow of

resources embodying economic benefits will be required to the obligation or the amount of the

obligation cannot be measures with sufficient reliability.

The difference between the fair value and the nominal amount of the consideration is recognised as

interest revenue.


1.33 CONTINGENT LIABILITIES AND CONTINGENT ASSETS (CONTINUED)

1.34 CAPITAL COMMITMENTS

1.35 EVENTS AFTER REPORTING DATE

(a)

(b)

1.36 RELATED PARTIES

Events after the reporting date are those events, both favourable and unfavourable, that occur

between the reporting date and the date when the financial statements are authorised for issue. Two

types of events can be identified:

those that provide evidence of conditions that existed at the reporting date (adjusting events

after the reporting date); and

those that are indicative of conditions that arose after the reporting date (non-adjusting events

after the reporting date).

If non-adjusting events after the reporting date are material, the Municipality discloses the nature

and an estimate of the financial effect.

The Municipality regards a related party as a person or an entity with the ability to control the

Municipality either individually or jointly, or the ability to exercise significant influence over the

Municipality, or vice versa.

Management is regarded as a related party and comprises the Councillors, Executive Mayor, Deputy

Mayor, Speaker, Mayoral Committee members, Municipal Manager, executive directors and all other

managers reporting directly to the Municipal Manager or as designated by the Municipal Manager.

A close family member of management is also considered to be related party. A person is considered

to be a close member of the family of another person if they are married or live together in a

relationship similar to a marriage or are separated by no more than two degrees of natural or legal

consanguinity or affinity.

Remuneration of management includes remuneration derived for services provided to the

Municipality in their capacity as members of the management team or employees. Benefits derived

directly or indirectly from the Municipality for services in any capacity other than as an employee or a

member of management do not meet the definition of remuneration. Remuneration of management

excludes any consideration provided solely as a reimbursement for expenditure incurred by those

persons for the benefit of the Municipality.

The Municipality does not recognise a contingent liability or contingent asset. A contingent liability is

disclosed unless the probability of an outflow of resources embodying economic benefits or service

potential is remote. A contingent asset is disclosed where the inflow of economic benefits or service

potential is probable.

Capital commitments disclosed in the financial statements represents the contractual balance

committed to capital projects on reporting date that will be incurred in the period subsequent to the

specific reporting date.


1.36 RELATED PARTIES (CONTINUED)

1.37 SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS

1.37.1 Application of Directive 7

1.37.2 Impairment of Receivables

1.37.3 Useful lives and residual values

The useful lives of assets are based on management’s estimates. Management considers the impact

of technology, availability of capital funding, service requirements and required return on assets to

determine the optimum useful life expectation, where appropriate.

The estimated residual values of assets are also based on management's judgement on whether the

assets will be sold or used to the end of their useful lives, and what their condition will be at that

time.

In the process of applying the Municipality’s accounting policy, management has made the following

significant accounting judgements, estimates and assumptions, which have the most significant effect

on the amounts recognised in the financial statements:

For deemed cost applied to Property, Plant and Equipment as per adoption of Directive 7,

management used the depreciation cost method which was based on assumptions about the

remaining duration of the assets.

For deemed cost applied to land and buildings as per adoption of Directive 7, management made use

of on independent valuator. The valuator's valuation was based on assumptions about the market's

buying and selling trends and the remaining duration of the assets.

For deemed cost applied to intangible assets as per adoption of Directive 7, management used the

depreciation cost method which was based on assumptions about the remaining duration of the

assets.

For deemed cost applied to Investment Property as per adoption of Directive 7, management made

use of on independent valuator. The valuator's valuation was based on assumptions about the

market's buying and selling trends and the remaining duration of the assets.

The calculation in respect of the impairment of receivables is based on an assessment of the extent to

which debtors have defaulted on payments already due, and an assessment of their ability to make

payments based on their creditworthiness. This was performed per service-identifiable categories

across all classes of debtors.

The Municipality operates in an economic environment currently dominated by entities directly or

indirectly owned by the South African government. As a result of the Constitutional independence of

all three spheres of government in South Africa, only parties within the same sphere of government

will be considered to be related parties. Only transactions with such parties which are not at arm’s

length and not on normal commercial terms, are disclosed.


1.37 SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS (CONTINUED)

1.37.4 Impairment of non-monetary assets

1.37.5 Post-Retirement and Long-term Benefits

1.37.6 Provisions and Contingent Liabilities

1.37.7 Financial assets and liabilities

Impairment charges relating to capitalised restoration costs are linked to the portion of landfill site

being utilised in the year under review.

Management's judgement is required when recognising and measuring provisions, as well as when

measuring contingent liabilities. Provisions are discounted where the time value effect is material.

The provision for rehabilitation of the landfill site is recognised as and when the environmental

liability arises. The provision is calculated by a qualified environmental engineer. The provision

represents the net present value at the reporting date of the expected future cash flows to

rehabilitate the landfill site. The discount rate used to calculate the effect of time value of money is

linked to the index for earthworks as published by Statistics South Africa.

The classification of financial assets and liabilities, into categories, is based on judgement by

management. In making the judgement, management considered the definition and recognition

criteria for the classification of financial instruments as set out in the Standard of GRAP on Financial

Instruments.

Non-monetary assets can include, but is not limited to, Property, Plant and Equipment, Investment

Property, Intangible assets and Heritage assets.

The Municipality is not a profit-oriented entity, as its primary objective is service delivery. Tariffs and

charges are cost-reflective to ensure continued financial sustainability. No profit element is included

in the determination of a tariff. As such, management has determined that the Municipality does not

control assets that meet the definition of cash-generating assets and that the Standard of GRAP on

Impairment of Non-cash-generating Assets will apply to all assets of the Municipality.

The calculation in respect of the impairment of non-monetary assets is based on an assessment of the

extent to which the recoverable amount of the asset has declined below the carrying amount. This

calculation will only be performed if there is an indication of an impairment.

The cost of post retirement medical obligations and long-service awards are determined using

actuarial valuations. The actuarial valuation involves making assumptions about discount rates,

expected rates of return on assets, future salary increases, mortality rates and future pension

increases. Due to the long-term nature of these plans, such estimates are subject to significant

uncertainty.


1.37 SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS (CONTINUED)

1.37.8 Revenue Recognition

1.37.9 Revenue Recognition

1.38 MERGERS

Accounting Policy on Revenue from Non-Exchange Transactions and Accounting Policy on Revenue

from Exchange Transactions describes the conditions under which revenue will be recognised by

management of the Municipality.

In making their judgement, management considered the detailed criteria for the recognition of

revenue as prescribed in the Standard of GRAP on Revenue from Exchange Transactions and Standard

of GRAP on Revenue from Non-Exchange Transactions. Specifically, when goods are sold, whether the

significant risks and rewards of ownership of the goods have been transferred to the buyer and when

services are rendered, whether the service has been performed.

Accounting Policy on Revenue from Non-Exchange Transactions and Accounting Policy on Revenue

from Exchange Transactions describes the conditions under which revenue will be recognised by

management of the Municipality.

A merger is the establishment of a new combined Municipality in which none of the former

Municipalities obtain control over any other and no acquirer can be identified.

As of the merger date, the Municipality recognises all the assets acquired and liabilities assumed from

the former municipalities. The assets acquired and liabilities assumed are measured at their carrying

amounts. The difference between the carrying amounts of the assets acquired and the liabilities

assumed, is recognised in accumulated surplus.

Any adjustments made to the carrying amounts as a result of errors in the former municipalities'

records, are also recognised in accumulated surplus.

Where the former municipalities applied a different basis of accounting, the new combined

Municipality recognises the assets acquired and the liabilities assumed of the former municipalities

on the merger date at their existing carrying amounts and subsequently adjust it only as a result of

conforming with the combined Municipality’s accounting policies. Where management is of the

opinion that the conforming of accounting policies as on merger date, rather than subsequently to

merger date, will be more beneficial to the users of the financial statements, it will state this fact and

disclose the items effected as on merger date.

The Standard of GRAP on Mergers allows for a two year measurement period from merger date.

Where the accounting of merger items are incomplete at the reporting period, provisional amounts

are recorded in the financial statements.

Assets required and liabilities assumed in the merger are subsequently measured in accordance with

the applicable Standards of GRAP applied by the Municipality.


2017

R

CASH AND CASH EQUIVALENTS

Current Accounts 1,676,055

Call Investments and Notice Deposits 19,967,258

Cash Floats 14,764

Total 21,658,077

Unspent Conditional Grants 17,127,327

Committed for DBSA loan 255,310

Working Capital Requirements 4,275,440

21,658,077

Primary Bank Account

Bank Statement Balance - Balance on Merger Date 958,022

Bank Statement Balance - Closing Balance 1,450,787

Cashbook Balance - Balance on Merger Date 1,622,928

Cashbook Balance - Closing Balance 1,479,413

Other Current Accounts


Bank Statement Balance - Closing Balance 7,586

Cashbook Balance - Balance on Merger Date 8,324

Cashbook Balance - Closing Balance 7,586






NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDING 30 JUNE 2017

Due to the short term nature of cash deposits, all

balances included above is in line with their fair value.

Cash and Cash Equivalents are held to support the

following commitments:

First National Bank - Aliwal North Branch - Account

Number 6247 6326 965

ABSA Bank - Aliwal North Branch - Account Number 4053

40 8352


14 1125


2017

R

2 CASH AND CASH EQUIVALENTS (CONTINUED)









Call Investments and Notice Deposits

ABSA 32 Day Notice - Account Number 92 7883 5880 18,886,670

ABSA Call Account - Account Number 92 7435 2868 255,310

722,677



ABSA 32 Day Notice - Account Number 90 6448 9631 7,042

ABSA 32 Day Notice - Account Number 50 6434 4937 2,142

19,967,258

First National Bank Call Account - Account Number 62

4822 13247

Call Investments and Notice Deposits consist out of the

following accounts:

There are no overdraft facility at any of the bank

accounts.

There are no guarantees held on any of the bank

accounts.


12 9037

ABSA Bank - Burgersdorp Branch - Account Number 1800

22 0161


3 RECEIVABLES FROM EXCHANGE TRANSACTIONS

30 JUNE 2017

Gross Balance

Allowance for

Impairment Net Receivable

R R R

Service Receivables 86,867,865 67,194,752 19,673,112

Electricity 25,880,961 11,291,310 14,589,651

Refuse 44,605,849 40,743,829 3,862,019

Other Arrears 16,381,055 15,159,613 1,221,442

Total 86,867,865 67,194,752 19,673,112

2017

R

Ageing of service receivables:

Electricity Ageing

Current (0 - 30 days) 10,422,304

Past Due (31 - 60 Days) 1,714,450

Past Due (61 - 90 Days) 939,230

Past Due (90 Days +) 12,804,977

Total 25,880,961

Refuse Ageing

Current (0 - 30 days) 1,528,770

Past Due (31 - 60 Days) 1,248,683

Past Due (61 - 90 Days) 1,147,817

Past Due (90 Days +) 40,680,579

Total 44,605,849

Other Arrears Ageing

Current (0 - 30 days) 278,153

Past Due (31 - 60 Days) 297,644

Past Due (61 - 90 Days) 180,034

Past Due (90 Days +) 15,625,224

Total 16,381,055

The carrying value of receivables are in line with their

fair value. A credit period of 30 days are granted on

initial recognition of the receivable, which is considered

to be in line with industry norms. Interest at prime rate

+ 1% is charged on overdue accounts.


2017

3 RECEIVABLES FROM EXCHANGE TRANSACTIONS (CONTINUED) R

Total Service Receivables Ageing

Current (0 - 30 days) 12,229,226

Past Due (31 - 60 Days) 3,260,777

Past Due (61 - 90 Days) 2,267,081

Past Due (90 Days +) 69,110,780

Total 86,867,865

Reconciliation of Allowance for impairment

Balance recognised on Merger Date 46,281,809

Contribution to the provision 26,430,419

Electricity 7,037,959

Refuse 17,184,496

Other Arrears 2,207,965

Bad Debts Written off (5,517,477)

Electricity (2,043,635)

Refuse (3,473,842)

Balance at the end of the period 67,194,752

4 RECEIVABLES FROM NON-EXCHANGE TRANSACTIONS

30 JUNE 2017

Gross Balance

Allowance for

Impairment Net Receivable

R R R

Service Receivables 30,432,972 26,496,252 3,936,720

Rates 30,432,972 26,496,252 3,936,720

Other Receivables 8,828,443 - 8,828,443

Accrued Interest 72,400 - 72,400

Staff 377,390 - 377,390

Deposits 212,253 - 212,253

Government 188,880 - 188,880

Other Debtors 7,977,520 - 7,977,520

Total 39,261,415 26,496,252 12,765,163

The Allowance for impairment of Receivables has been

made for all consumer balances outstanding based on

the payment ratio over 12 months. Based on these

payment trends, management is satisfied that no

further credit provision is required in excess of the

current allowance. The risk of non-payment is further

mitigated due to the large customer base over which

the outstanding receivable balance is spread.


4 RECEIVABLES FROM NON-EXCHANGE TRANSACTIONS (CONTINUED)

2017

R

Ageing of service receivables:

Rates Ageing

Current (0 - 30 days) 1,497,356

Past Due (31 - 60 Days) 940,764

Past Due (61 - 90 Days) 631,989

Past Due (90 Days +) 27,362,864

Total 30,432,972

Reconciliation of Allowance for impairment

Balance recognised on Merger Date 15,273,854

Contribution to the provision 11,222,399

Balance at the end of the period 26,496,252

5 OPERATING LEASE ASSET

Operating Lease Asset -

The carrying value of receivables are in line with their

fair value. A credit period of 30 days are granted on

initial recognition of the receivable, which is considered

to be in line with industry norms. Interest at prime rate

+ 1% is charged on overdue accounts.

Lease escalation is effective annually on 01 July in

accordance with the rental charge determined by

council in the annual budget. Thus no leased asset is

calculated on 30 June 2017.

The Allowance for impairment of Receivables has been

made for all consumer balances outstanding based on

the payment ratio over 12 months. Based on these

payment trends, management is satisfied that no

further credit provision is required in excess of the

current allowance. The risk of non-payment is further

mitigated due to the large customer base over which

the outstanding receivable balance is spread.


2017

R

5 OPERATING LEASE ASSET (CONTINUED)

Within 1 Year 1,033

Between 1 and 5 Years 3,977

After 5 Years 6,088

Total 11,098

6 TAXES

VAT Receivable (In suspense) 46,572,029

VAT Payable to SARS (959,335)

VAT Payable (In suspense) (14,562,224)

Total 31,050,470

7 INVENTORY

Consumable Stores - Electrical Stock 312,440

Consumable Stores - General Stock 3,964

Total 316,404

Inventory recognised as an expense during the period 605,300

VAT is payable/receivable on the cash basis. Payments

to and claims from SARS only occurs when actual cash

flow takes place.

No interest is payable to SARS if the VAT is paid over

timeously, but interest for late payments is charged

according to SARS policies

The municipality will receive the following lease

payments from contracts that have defined lease

payments and terms.

No inventory were pledged as security for liabilities.

Inventory are disclosed at the lower of cost or net

realisable value.


8 NON-CURRENT INVESTMENTS

Fixed Deposits 1,368,838

Total 1,368,838

ABSA Fixed Deposit - Account number 20 6626 7402 858,473

ABSA Fixed Deposit - Account number 20 4791 9733 35,639

ABSA Fixed Deposit - Account Number 20 6740 1932 474,726

Total 1,368,838

9 INVESTMENT PROPERTY

Investment Property - Carrying Value 153,159,502

Total 153,159,502

Carrying value recognised on Merger Date 154,030,241

Cost 174,128,575

Accumulated Depreciation (20,098,335)

Depreciation for the period (870,739)

Closing Carrying Value 153,159,502

Cost 174,128,575


The movement in investment properties is reconciled as

follows:

There are no restrictions on the realisability of

Investment Property or the remittance of revenue and

proceeds of disposal.

There are no contractual obligations to purchase,

construct or develop investment property or for repairs,

maintenance or enhancements.

The ABSA Fixed Deposit - Account number 20 6626 7402

is committed as security for the DBSA long-term

liability.

Fixed Deposits consist out of the following accounts:

Fixed Deposits are investments with a maturity period

of more than 12 months and earn interest rates varying

from 7.25 % to 8.13 % per annum.


10.1 PROPERTY PLANT AND EQUIPMENT

30 JUNE 2017

Recognised on Closing Recognised on Closing Carrying

Merger Date Additions Disposals Balance Merger Date Additions Disposals Balance Value

R R R R R R R R R

Land and Buildings 148,340,245 170,000 - 148,510,245 55,723,254 1,885,643 - 57,608,897 90,901,348

Land 24,044,018 - - 24,044,018 - - - - 24,044,018

Buildings 124,296,227 170,000 - 124,466,227 55,723,254 1,885,643 - 57,608,897 66,857,330

Infrastructure 547,689,076 27,242,480 - 574,931,556 226,787,620 19,706,605 - 246,494,225 328,437,331

Roads and Stormwater 389,890,907 20,276,197 - 410,167,104 162,173,259 14,358,828 - 176,532,087 233,635,017

Electricity 154,115,514 6,966,283 - 161,081,797 64,182,906 5,252,343 - 69,435,249 91,646,548

Other 3,682,655 - - 3,682,655 431,455 95,434 - 526,889 3,155,766

Community Assets 33,924,747 918,615 - 34,843,362 9,437,992 611,218 - 10,049,210 24,794,152

Recreation Grounds and

Facilities 29,563,790 918,615 - 30,482,405 7,448,636 445,670 - 7,894,305 22,588,100

Cemetery 4,360,957 - - 4,360,957 1,989,356 165,549 - 2,154,905 2,206,052

Lease Assets 6,199,197 - - 6,199,197 6,196,635 952 - 6,197,587 1,610

Office Equipment 6,199,197 - - 6,199,197 6,196,635 952 - 6,197,587 1,610 0

Other Assets 25,847,627 895,347 - 26,742,973 13,861,143 2,010,486 - 15,871,629 10,871,344

Furniture, Equipment and

Machinery 11,876,874 895,347 - 12,772,221 7,245,598 1,300,552 - 8,546,150 4,226,071

Motor Vehicles and Implements 13,970,752 - - 13,970,752 6,615,545 709,934 - 7,325,479 6,645,273

Total 762,000,891 29,226,442 - 791,227,333 312,006,644 24,214,905 - 336,221,549 455,005,784



Cost Accumulated Depreciation and Impairment


10.1 PROPERTY PLANT AND EQUIPMENT (CONTINUED)

Merger

Date 2017

R R

The following work in progress balances are included in PPE. No Depreciation charge is recognised against these amounts.

Infrastructure - Roads and Stormwater 26,633,302 -

Infrastructure - Electricity 5,820,176 -

Infrastructure - Other 2,984,642 2,984,642

Community Assets - Recreation Grounds 13,528,075 14,446,691

Buildings 7,396,225 7,396,225

Total Work in Progress (WIP) 56,362,420 24,827,558

No property, plant and equipment is used as security for long term liabilities, except assets acquired in terms of a finance

lease- or hire purchase agreement as disclosed in note 14 to the financial statements

A fixed asset register containing the information required by section 63 of the MFMA is available for inspection at the

registered office of the municipality.


2017

R

10.2

Capitalised Restoration Cost - Carrying Value 7,782,215

Carrying value recognised on Merger Date 8,559,075

Cost 15,562,660


Depreciation for the period (776,860)

Closing Carrying Value 7,782,215

Cost 15,562,660


The movement in capitalised restoration cost is

reconciled as follows:



PROPERTY, PLANT AND EQUIPMENT - CAPITALISED

RESTORATION COST

The municipality is required by relevant

Environmental Legislation to rehabilitate landfill sites

at the closure date of each respective site. The

"Capitalised Restoration Cost" asset, which is

capitalised in line with the requirements of GRAP 17

and iGRAP 2, relates to the initial estimate of costs

involved to restore landfill sites under control of the

Walter Sisulu Local Municipality.

Although this item is accounted for under the Property

Plant and Equipment Standard (GRAP 17), the

characteristics and nature of this item does not

resemble that of normal PPE (such as the tangible

nature of assets normally associated with PPE). Based

on the aforementioned and in line with the

requirements of GRAP 1, Capitalised Restoration Cost

is disclosed as a separate item on the face of the

Statement of Financial Position.

Refer to note 21 for more detail relating to this asset

financed by way of a provision


2017

R

11 BIOLOGICAL ASSETS

Biological Assets - Fair Value 1,880,250

Total 1,880,250

Fair Value recognised on Merger Date 1,283,050

Fair value adjustments - Physical changes and death 1,717,725

Fair value adjustments - Price adjustments (1,120,525)

Closing Fair Value 1,880,250

-

-

No title or other restrictions are placed on biological

assets.

No biological assets were pledged as security for

liabilities.

There are no commitments for the development or

acquisition of biological assets.

All biological assets are classified as consumable and

are held for sale.

All biological assets are located in the Aliwal North

Nature Reserve, the Aliwal North Spa and

Burgersdorp Nature Reserve. The primary activities

revolving around biological assets are as follows:

Ensure that the game life in the municipal area

are conserved for future generations.

Ensure that game numbers are managed

adequately. When the need arises to reduce

the game number, prospective hunters are

invited to submit tenders for the purchase of

game, resulting in an inflow of resources to the

municipality.

The movement in biological assets is reconciled as

follows:

Although game prices have come down since merger

date, this decline market value of biological assets

was offset by the return of a number of buffalos,

which broke out of the Aliwal North Nature Reserve

during 2015 and 2016. This return saw the number of

buffalo under control of the municipality increase

from 3 to 18 during the current period.


2017

R

11 BIOLOGICAL ASSETS (CONTINUED)

-

-

Asset Fair Value

R

Springbuck 600 259,800

Blesbuck 819 178,600

White Blesbuck 950 6,650

Black Wildebeest 1,239 79,300

Impala 900 1,800

Gemsbuck 3,500 157,500

Redhartebeest 2,200 136,400

Eland 3,000 69,000

Zebra 3,527 116,400

Ostrich 800 4,800

Buffalo 48,333 870,000

Total 1,880,250

12 HERITAGE ASSETS

Heritage Assets - Cost 2,984,705

Total 2,984,705

Due to the unwillingness of insurance companies to

carry the risk and potential losses relating to

biological assets, the financial risk is managed as

follows:

Regular inspection and maintenance of

boundary fences to manage movement of

biological assets.

2

45

33

6

18

There were no movement in heritage assets during

the period other than the assets recognised on

merger date.

The Fair value of biological assets is based on selling

prices less costs to sell in an open active market.

218

7

64

Biological Assets consist out of the following at

period-end:

62

23

433

Regular monitoring of game quantities by

municipal staff.

Quantity


2017

R

12 HERITAGE ASSETS

Details of Heritage Assets Location

Block House Burgersdorp 326,500

Jubilee Fountain Burgersdorp 114,212

Taal Monument Burgersdorp 222,450

Voortrekkerdrif Aliwal North 1

Light of the Century Aliwal North 1

Concentrion Camp Kerkhof Aliwal North 1

Durban Street Cemetery Aliwal North 150,000

Old Cemetery by the river Dukathole 149,000

Fort at Nature Reserve Aliwal North 1

Fort on "Bronepad" Aliwal North 10,000

Fort behind the hospital Aliwal North 1

SA War Memorial Site Aliwal North 90,000

Freedom Square Dukathole 1

Kerkplein Museum Aliwal North 1,459,500

Joe Gqabi Statue Aliwal North 58,536

Museum - Old Library Aliwal North 343,000

Frere Bridge Aliwal North 1

Jamestown Museum Jamestown 61,500

Total 2,984,705

The municipality holds heritage assets, but was

unable to obtain fair values for all such assets. These

assets are disclosed herein in terms of GRAP 103.17

(at R 1) which states that if an entity holds an asset

that might be regarded as a heritage asset but which,

on initial recognition, does not meet the recognition

criteria of a heritage asset because it cannot be

reliably measured, relevant and useful information

about it shall be disclosed in the notes to the


There are no restrictions on the realisability of

Heritage Assets or the remittance of revenue and

proceeds of disposal.

There are no contractual obligations to purchase,

construct or develop Heritage Assets or for repairs,

maintenance or enhancements.

There are no Heritage Assets pledged as security for

liabilities


2017

R

13 INTANGIBLE ASSETS

Intangible Assets - Carrying Value 587,794

Total 587,794

Carrying value recognised on Merger Date 594,822

Cost 2,903,254


Additions 166,770

Amortisation for the period (173,798)

Closing Carrying Value 587,794

Cost 3,070,024


14 LONG-TERM LIABILITIES

14.1 ANNUITY LOANS

Annuity Loans 3,830,619

Less: Current portion (606,427)

Sub-total 3,224,191

Unamortised Loan Charges (1,013,971)

Balance recognised on Merger Date (1,190,440)

Unwinding of discounted interest 176,469

Total 2,210,221

Annuity Loans were fully utilised to purchase

property plant and equipment. No loans were

unspent at period end.

No intangible asset were assessed having an

indefinite useful life.

The movement in intangible assets is reconciled as

follows:

Intangible Assets consist only out of software

There are no intangible assets pledged as security for

liabilities

There are no contractual commitments for the

acquisition of intangible assets.

There are no intangible assets whose title is restricted.

There are no internally generated intangible assets at

reporting date.


2017

14 LONG-TERM LIABILITIES (CONTINUED) R

Development Bank of South Africa (DBSA) (Maletswai Local Municipality) 3,281,069

Development Bank of South Africa (DBSA) (Gariep Local Municipality) 549,550

Total 3,830,619

Annuity loans are payable as follows:

Payable within one year 790,498

Payable within two to five years 1,814,573

Payable after five years 2,229,380

Total amount payable 4,834,451

Less: Outstanding Future Finance Charges (1,003,833)

Present value of annuity loans 3,830,619

14.2 HIRE PURCHASES

Hire Purchases 1,148,488

Less: Current portion (620,658)

Total 527,830

Nr Institution Interest Rate Redemption Date

1 ABSA (TATA Water Truck) 10.25% 12/15/2017

2 ABSA (Nissan UD 330) 10.25% 3/1/2018

3 ABSA (Isuzu KB 200I) 10.25% 3/1/2018

4 FNB (CHEVROLET TRAILBLAZER) 10.25% 10/1/2020

5 FNB (NISSAN NP200 1.6) 10.25% 10/1/2020

6 FNB (Chevrolet Aveo) 10.25% 10/1/2020

7 FNB (Chevrolet Aveo) 10.25% 10/1/2020

Annuity loans are secured by long and short term

deposits. Refer to notes 2 and 8.

Interest is calculated at 5.00% interest rate and the

loan will be fully redeemed on 30 September 2018.

Annuity Loans, disclosed at amortised cost, consist

out of the following agreements:

Interest is calculated at 5.00% interest rate and the

loan will be fully redeemed on 30 September 2027.

Hire Purchases, disclosed at amortised cost, consist

out of the following agreements:


14 LONG-TERM LIABILITIES (CONTINUED)

Nr Asset Liability

2017 2017

R R

1 ABSA (TATA Water Truck) 816,586 99,971

2 ABSA (Nissan UD 330) 439,297 299,349

3 ABSA (Isuzu KB 200I) 97,907 30,861

4 FNB (CHEVROLET TRAILBLAZER) 357,175 336,593

5 FNB (NISSAN NP200 1.6) 123,808 118,359

6 FNB (Chevrolet Aveo) 130,411 131,677

7 FNB (Chevrolet Aveo) 130,411 131,677

2,095,593 1,148,488

2017

R

Hire Purchases are payable as follows:

Payable within one year 704,988

Payable within two to five years 589,495

Total amount payable 1,294,482

Less: Outstanding Future Finance Charges (145,994)

Present value of Hire Purchases 1,148,488

15 CONSUMER DEPOSITS


Total 2,126,012

-

Assets and liabilities associated with hire purchase

contracts:

Carrying Value

The carrying value of assets, which are pledged as

security for outstanding liabilities, are included in the

property, plant and equipment carrying value in note

10.1.

The carrying value of consumer deposits are in line with

its fair value. Outstanding balances does not attract any

interest.

Guarantees held in lieu of Electricity Deposits


2017

R

16 PAYABLES FROM EXCHANGE TRANSACTIONS

Trade Payables 199,578,776

Retentions 3,712,142

Interest Accrued 57,091

Pre-paid electricity 2,431,933

Payments received in advance 5,145,913

Joe Gqabi District Municipality (Water and Sanitation) 3,482,045

Unallocated Deposits 564,429

Other Creditors 35,559,031

Sundry deposits 1,539,058

Total 252,070,419

17 UNSPENT CONDITIONAL GOVERNMENT GRANTS

National Government 12,088,219

Provincial Government 3,549,222

District Municipality 1,489,886

Total 17,127,327

As prescribed by the MFMA, all payables are payable

within 30 days. This credit period granted is considered

to be in line with industry norms. The carrying value of

payables are in line with its fair value.

Sundry deposits include Hall, Builders and Housing

Deposits.

Detail reconciliations of all grants received and grant

conditions met are included in note 24. Unspent grant

balances are recognised to the extent that conditions are

not yet met.

Payables are being recognised net of any discounts

received

Payables are not secured.

Due to the short term nature of unspent grant

balances, the carrying value approximates the fair

value of the unspent conditional grants at period-

end.


2017

R

18 CURRENT EMPLOYEE BENEFITS

Post Retirement Medical Benefits 697,582

Long Service Awards 482,732

Performance Bonuses 1,523,393

Bonuses 2,227,241

Staff Leave 9,656,215

Total 14,587,162

Performance Bonuses

Balance on Merger Date 932,471

Contribution during the period 590,922

Closing Balance 1,523,393

Bonuses

Balance on Merger Date 2,202,044

Contribution during the period 3,956,027

Payments made (3,930,831)


Bonuses are being paid to all municipal staff,

excluding section 57 Managers. The balance at year

end represent to portion of the bonus that have

already vested for the current salary cycle. There is

no possibility of reimbursement.

The movement in current employee benefits are

reconciled as follows:

Performance bonuses are being paid to the Municipal

Manager and Directors after an evaluation of

performance by the council. There is no possibility of

reimbursement.


2017

R

18 CURRENT EMPLOYEE BENEFITS (CONTINUED)

Staff Leave



Payments made (919,721)


19 PROVISIONS

Compensation for injuries on duty contribution 894,400

Total 894,400

Compensation for injuries on duty contribution

Balance on Merger Date 349,439

Contribution during the year 628,387

Payments made (83,426) -

Closing Balance 894,400

Staff leave accrued to employees according to

collective agreement. Provision is made for the full

cost of accrued leave at reporting date. This provision

will be realised as employees take leave or in the

event of encashment. There is no possibility of

reimbursement.

The balance on the compensation for injuries on duty

contribution represents the current liability of the

municipality that has not yet been paid over to the

relevant authorities. The balance represents the best

estimate of the outflow of resources. The timing and

amount of the outflow is dependant on when an

assessment is received from the relevant authorities.

The movement in provisions are reconciled as

follows:


2017

R

20 EMPLOYEE BENEFITS

Post Retirement Medical Benefits 24,296,535

Long Service Awards 4,299,784

Sub-Total 28,596,319

Less: Current portion of Employee Benefits 1,180,314

Post Retirement Medical Benefits 697,582


Total 27,416,005

20.1 Post Retirement Medical Benefits



Current Service Cost 1,243,120

Interest Cost 2,269,206


Actuarial Gain (7,451,723)

Total balance at period-end 24,296,535

Less Current Portion 697,582

Total 23,598,953

2017

In-service members 140

In-service non-members 227

Continuation members 18

Total 385

The movement in Post Retirement Medical Benefits

are reconciled as follows:

The Post Retirement Medical Benefit Plan is a

defined benefit plan, of which the members are

made up as follows:


2017

20 EMPLOYEE BENEFITS (CONTINUED) R

In-service members 14,678,972

In-service non-members 1,243,998

Continuation members 8,373,565

Total Unfunded Liability 24,296,535

Bonitas

LA Health

Hosmed

Samwumed

Keyhealth

Interest Rates 2017

Discount rate 9.78%

Health Care Cost Inflation Rate 8.06%

Net Effective Discount Rate 1.60%

Mortality Rates

Normal Retirement Age

Last Valuation

Actuarial Valuation Method

The discount rate used is a composite of all

government bonds and is calculated using a

technique is known as "bootstrapping"

The PA 90 ultimate table, rated down by 1 year of age

was used by the actuaries.

The municipality contributes to the following medical

schemes on a monthly basis:

The liability in respect of past service has been

estimated to be as follows:

The entity was established on 6 August 2016. No

comparative information relating to historical

liabilities and experience adjustments is available for

disclosure as required by GRAP 25.

It has been assumed that in-service members will

retire at age 65, which then implicitly allows for

expected rates of early and ill-health retirement.

The last valuation was performed on 27 August 2017.

The Projected Unit Credit Method has been used to

value the liabilities.

Key Actuarial Assumptions used are as follows:


20 EMPLOYEE BENEFITS (CONTINUED)

Sensitivity Analysis - Liability at period end

Assumption

In-service

members

(Rm)

Continuation

members

(Rm)

Total liability

(Rm) % change

Liability 15.923 8.374 24.297

Health care inflation

+ 1% 19.382 9.229 28.611 18%

- 1% 13.208 7.639 20.847 -14%

Discount rate

+ 1% 13.267 7.656 20.923 -14%

- 1% 19.356 9.222 28.578 18%

Post-retirement mortality

- 1 year 16.444 8.703 25.147 4%

Average retirement age

- 1 year 17.217 8.374 25.591 5%

Continuation of membership at retirement

- 10% 12.037 8.374 20.411 -16%

Sensitivity Analysis - Future Service and Interest Cost (Next Financial Year)

Assumption

Current Service

Cost

(Rm)

Interest Cost

(Rm)

Total Cost

(Rm) % change

Future Cost 1.173 2.343 3.516

Health care inflation

+ 1% 1.478 2.765 4.243 21%

- 1% 0.940 2.006 2.946 -16%

Discount rate

+ 1% 0.953 2.219 3.173 -10%

- 1% 1.462 2.480 3.942 12%

Post-retirement mortality

- 1 year 1.211 2.427 3.637 3%


- 1 year 1.194 2.470 3.663 4%

Continuation of membership at retirement

- 10% 0.868 1.963 2.832 -19%


2017

R

EMPLOYEE BENEFITS (CONTINUED)

20.2 Long Service Awards

Opening Balance 4,247,908

Contribution during the period 809,120

Current Service Cost 510,829

Interest Cost 298,291


Actuarial Gain (506,386)

Total balance at period-end 4,299,784

Less Current Portion 482,732

Total 3,817,052

2017

In-service members 367

2017

R

In-service members 4,299,784

Total Unfunded Liability 4,299,784

The following members are eligible for long service

bonuses:

The liability in respect of past service has been

estimated to be as follows:

The entity was established on 6 August 2016. No

comparative information relating to historical

liabilities and experience adjustments is available for

disclosure as required by GRAP 25.

The movement in Long Service Awards are reconciled

as follows:



2017

Interest Rates

Discount rate 8.36%

General Salary Inflation (long-term) 6.18%

2.05%

Last Valuation

Actuarial Valuation Method

Sensitivity Analysis - Liability at period-end

Assumption

Total liability

(Rm) % change

Liability 4.300

General salary inflation

+ 1% 4.552 6%

- 1% 4.069 -5%

Discount rate

+ 1% 4.060 -6%

- 1% 4.567 6%


- 2 years 4.025 -6%

+ 2 years 4.566 6%

Withdrawal rates

- 50% 5.174 20%

The Projected Unit Credit Method has been used to

value the liabilities.

Net Effective Discount Rate applied to salary-related

Long Service Bonuses

Key Actuarial Assumptions used are as follows:

The last valuation was performed on 27 August 2017.

The discount rate used is a composite of all

government bonds and is calculated using a

technique is known as "bootstrapping"



Sensitivity Analysis - Future Service and Interest Cost (Next Financial Year)

Assumption

Current Service

Cost

(Rm)

Interest Cost

(Rm)

Total Cost

(Rm) % change

Future Cost 0.532 0.340 0.871

General salary inflation

+ 1% 0.567 0.361 0.928 6%

- 1% 0.500 0.321 0.820 -6%

Discount rate

+ 1% 0.503 0.358 0.861 -1%

- 1% 0.563 0.319 0.882 1%


- 2 years 0.508 0.317 0.824 -5%

+ 2 years 0.558 0.362 0.920 6%

Withdrawal rates

- 50% 0.671 0.413 1.084 24%

20.3 Other Pension Benefits

Defined Contribution Plans

2017

R

SALA Pension Fund 3,650,799

Cape Joint Retirement Fund 2,377,473

SAMWU National Provident Fund 1,016,627

Municipal Workers Retirement Fund 1,389,720

Total 8,434,618

Council contributes to the pension funds above

which are considered to be defined contribution

funds. The retirement benefit fund is subject to the

Pension Fund Act, 1956, with pension being

calculated on the pensionable remuneration paid.

Current contributions by Council are charged against

expenditure on the basis of current service costs.

Council contributes to the following defined

contribution plans:


2017

R

21 NON-CURRENT PROVISIONS

Rehabilitation Provision - Landfill Sites 24,459,033

Total 24,459,033


Contribution during the Period 599,486

Interest Cost 599,486

Total 24,459,033

Site

Expected Closure

Date

Aliwal North 2020 8,963,560

Burgersdorp 2044 6,160,204

Jamestown 2029 3,581,993

Steynsburg 2021 2,538,462

Venterstad 2051 3,214,815

Total 24,459,033

The total obligation at period-end can be attributed

to the following sites:

The movement in Rehabilitation Provision - Landfill

Sites are reconciled as follows:

It is estimated that no site will be rehabilitated

within 1 year from reporting date and thus there are

no short term portion associated with this provision.

The timing of the outflow of resources relating this

provision is uncertain, but management expects the

timing to be in line with the legal requirements

subsequent to the expected closure date of the site

as indicated below.


21 NON-CURRENT PROVISIONS (CONTINUED)

2017

Aliwal North 21,020

Burgersdorp 11,800

Jamestown 5,914

Steynsburg 2,625

Venterstad 3,022

Aliwal North 426

Burgersdorp 522

Jamestown 606

Steynsburg 967

Venterstad 1,064

2017

R

22 RESERVES

Accumulated Surplus 365,586,819

Total 365,586,819

Discount rates specific to the nature of the provision

is utilised to calculate the effect of time value of

money. The discount rate is based on the Earthworks

Index as published by Statssa which increased by

2.51% during the period under review..

The estimated area per site to be rehabilitated at

year end were as follows (Rehabilitation area - m²):

Environmental Specialists were utilised to determine

the cost of rehabilitation of landfill sites as well as to

assist the municipality in identifying any changes (if

any) to estimated closure dates previously reported

on in former entities.

The cost of rehabilitation per square meter is based

on the current cost of construction at each reporting

period. The cost per square meter were estimated as

follows (R/m²):


2017

R

23 PROPERTY RATES

Total Property Rates 18,661,347

Total 18,661,347

Former Maletswai Local Municipality

Aliwal Residential 1,331,759,119

Sectional Title 30,600,006

Jamestown 58,457,121

Dukathole 277,553,320

Aliwal Agricultural 1,034,793,381

Dordrecht Agricultural 740,524,000

Sub-Total 3,473,686,947

Former Gariep Local Municipality

Burgersdorp 369,108,200

Venterstad 68,983,000

Steynsburg 111,494,000

Oviston 67,375,000

Mzamomhle 104,961,000

Khayamnandi 46,301,000

Steynsburg Farms 675,484,000

Odendaalstroom Farms 370,000

Colesberg Farms 91,494,000

Albert Farms 1,387,221,000

Sub-Total 2,922,791,200

Total Valuation 6,396,478,147

Valuations on land and buildings are performed

every four years. The last valuation came into effect

on 1 July 2014 (in former municipalities).

The first R 15 000 of the valuation on properties used

only for residential purposes are exempted from

property rates in terms of the Property Rates Act.

Property rate levied are based on the following

rateable valuations and disclosed net of any rebates

granted:


2017

R

23 PROPERTY RATES (CONTINUED)

Former Gariep

Local

Municipality

Former

Maletswai Local

Municipality

Residential Properties 1.078539c/R 0.8644c/R

Residential Properties-mixed use 1.682840c/R 0.0000c/R

Commercial/Business an Industrial Properties 0.235981c/R 1.0373c/R

Public Service Infrastructure properties 0.0000c/R 0.2161c/R

Public Benefit Organisation Properties 0.0000c/R 0.0000c/R

Agricultural Properties used for agricultural purposes 0.126223c/R 0.2161c/R

0.0000c/R 0.4322c/R

0.0000c/R 0.4322c/R

State Owned properties 3.097541c/R 0.8644c/R

Municipal Properties 0.0000c/R 0.0000c/R

Mining Properties 0.0000c/R 1.7289c/R

Vacant Properties 2.243911c/R 1.7289c/R

Indigents (Valuation exemption) 65,000

Rebates can be defined as any income that the

Municipality is entitled by law to levy, but in terms of

Council's own policy opted not to collect it. The

following Rebates are granted:

Agricultural Properties used for

Commercial/Industrial purposes

Agricultural Properties used for Hunting/Trading of

Game

The following rates are applicable to the valuations

above:

Rates are levied annually and monthly. Monthly

rates are payable by the 25th of the following month

and annual rates are payable before 30 September.

Interest is levied at the prime rate plus 1% on

outstanding monthly rates.


2017

R

24 GOVERNMENT GRANTS AND SUBSIDIES

Unconditional Grants - National Government 43,290,000

Equitable Share 43,290,000

Conditional Grants - National Government 43,847,752

Financial Management Grant (FMG) 3,715,022

Municipal Infrastructure Grant (MIG) 26,496,488

Skills Development Fund 91,288

Integrated National Electrification Programme (INEP) 5,000,000

Energy Efficiency and Demand SideManagement Grant 511,967

Expanded Public Works Program (EPWP) 2,438,000

Municipal Demarcation and Transition Grant 5,594,987

Conditional Grants - Provincial Government 2,947,000

Library Grant 1,947,000

ECDLGTA - Greening and Beautification 1,000,000

Conditional Grants - District Municipality 1,166,492

Joe Gqabi District Municipality Grant 1,166,492

Total 91,251,244

Disclosed as:

Government Grants and Subsidies - Capital 27,911,207

Government Grants and Subsidies - Operating 63,340,037

Total 91,251,244

Grants per Vote (MFMA Sec 123 (c)):

Equitable share 43,290,000

Budget and Treasury Office 8,467,303

Community and Social Services 1,947,000

Executive and Council 4,986,450

Road Transport 26,340,948

Sport and Recreation 397,800

Waste Management 986,684


Total 91,251,244


2017

R

24 GOVERNMENT GRANTS AND SUBSIDIES (CONTINUED)

24.01 Equitable Share

Grants Received 43,290,000

Transferred to Revenue - Operating (43,290,000)

Closing Unspent Balance -

24.02 Financial Management Grant (FMG)



Transferred from Receivables (119,978)


24.03 Municipal Infrastructure Grant (MIG)

Unspent Balance on Merger Date 2,019,694


Transferred to Revenue - Capital (22,034,120)


Returned to National Revenue Fund (820,000)

Closing Unspent Balance 2,255,206

The movements per grant can be summarised as

follows:

The Equitable Share is the unconditional share of the

revenue raised nationally and is being allocated in

terms of Section 214 of the Constitution (Act 108 of

1996) to the municipality by the National Treasury.

The Financial Management Grant is a conditional

grant to assist municipalities in the implementation

of financial reforms required by the Municipal

Finance Management Act (MFMA), 2003. The grant

also utilised to cover expenditure relating to the

Financial Management Internship Programme.

The MIG grant is a conditional grant used to upgrade

infrastructure in the municipal area with the main

focus on previously disadvantaged areas.


2017

R


24.04 Skills Development Fund

Grants Received 91,288

Transferred to Revenue - Operating (91,288)


24.05 Integrated National Electrification Programme (INEP)





24.06 Energy Efficiency and Demand SideManagement Grant

Unspent Balance on Merger Date 511,967

Transferred to Revenue - Capital (449,094)



24.07 Expanded Public Works Program (EPWP)




The INEP grant is a conditional grant to provide

capital subsidies to municipalities to address the

electrification backlog of occupied residential

dwellings and the installation of bulk infrastructure.

The grant is utilised to implement Energy Efficiency

and Demand Side Management initiatives within

municipal infrastructure in order to reduce electricity

consumption and improve energy efficiency.

The EPWP grant is a conditional grant to incentivise

municipalities to expand work creation efforts

through the use of labour intensive delivery methods

in the identified focus areas in compliance with the

EPWP guidelines.

The Skills Development fund is utilised to cover

expenditure relating to training.


2017

R


24.08 Municipal Demarcation and Transition Grant




24.09 Housing Grants



24.10 Joe Gqabi District Municipality Grant

Unspent Balance on Merger Date 76,500





24.11 Other Provincial Allocations





To assist the Municipality in building in house

capacity to perform their functions and stabilise

institutional and governance systems as required in

the Municipal Systems Act (MSA) and related

legislation, policies and local government turnaround

strategy.

The housing allocation is a conditional grant to

support the creation of sustainable human

settlements that enables and improved quality of

household life, provision of basic infrastructure, top

structures and basic social and economic amenities.

The grant is allocated for the following purposes:

- Street refurbishment Aliwal North

- Fencing of Community Hall

- Sports track upgrading


2017

R


24.12 Total Grants





Transferred from Receivables (119,978)

Returned to National Revenue Fund (820,000)


25 FINES

Traffic Fines 345,976

Library Fines 1,714

Meter Tampering 111,564

Total 459,253

26 ACTUARIAL GAINS


Long Service Awards 506,386 Infrastructure: Water

Total 7,958,108

27 FAIR VALUE ADJUSTMENTS

Biological Assets 597,200 Infrastructure: Water

Total 597,200

Other Provincial Allocations includes grants such as:

- Spatial Development Plan

- Land Survey Management

- LED Garden Project Jamestown

- JL De Bruin Grant

- Other DPLG Funding

- Library Grant

- Greening and Beautification Grant


2017

R

28 SERVICE CHARGES

Electricity Revenue 81,803,993

Refuse Removal Revenue 19,224,353

Total Revenue 101,028,346

Less: Rebates (9,823,064)

Electricity Revenue (5,527,336)

Refuse Removal Revenue (4,295,728)

Total 91,205,282

29 INTEREST EARNED - OUTSTANDING DEBTORS

Interest Earned - Service Debtors 4,173,683

Interest Earned - Penalty Interest on Property Rates 944,814

Total 5,118,497

30 LICENCES AND PERMITS

Drivers License Fees 1,426,276

Public License Fees 98,028

Roadworthy Certificates 73,276

Special Permits 42,058

Vehicle License Fees 1,315,737

Vehicle Registration Fees 270,550

Total 3,225,925

31 AGENCY SERVICES

Commission on collections 1,267,028

Prodiba Fees 351,495

Total 1,618,523

32 OTHER INCOME

Admission Fees 309,504

Encroachment Fees 103,714

Sundry Income 689,581

Building Plan & Inspection Fees 90,426

Electricity Re-Connection Fees 342,682

Cemetery Fees 306,348

Total 1,842,255

Rebates can be defined as any income that the

Municipality is entitled to levy, but in terms of

Council's own policy opted not to collect it.


2017

33 EMPLOYEE RELATED COSTS R

Basic Salaries and Wages 48,103,354

Pension and UIF Contributions 8,852,357

Medical Aid Contributions 2,911,768

Overtime 1,546,982

Performance Bonus 590,922

Bonuses 3,956,027

Motor Vehicle Allowance 2,540,922

Cellphone Allowance 158,316

Housing Allowances 551,315

Standby Allowance 1,125,285

Provision for compensation for injuries on duty 628,387

Provision for leave 3,187,178

Acting Allowance 212,378

Skills Development Levy 679,683

Industrial Council Levy 32,815

Long service awards 510,829

Post Retirement Medical Benefits 1,243,120 #REF!

Total 76,831,637

Remuneration of Key Personnel

Remuneration of the Municipal Manager - M P Nonjola (up to 31 October 2016)

Basic Salary 230,942

Other benefits and allowances 269,416

Total 500,358

Remuneration of the Municipal Manager - T A Mawonga (6 August to 30 June 2017)



Total 1,237,807

Remuneration of the Community and Social Services - NBB Mokhantso


Other benefits and allowances 479,096 0

Total 921,476

Remuneration of the Corporate and Support Services - ZE Pungwani



Total 854,206

All Managers are appointed on a 5-year contract.

There are no post-employment or termination

benefits payable to them at the end of the contract

period. The benefits are as follows:


2017

R

33 EMPLOYEE RELATED COSTS (CONTINUED)

Remuneration of the Technical Services - Z Nongene



Total 772,407

Remuneration of the Chief Financial Officer - T Maseko (Up to 30 April 2017)



Total 787,703

34 REMUNERATION OF COUNCILLORS

Councillors 5,331,112

Travelling allowance 64,320

Telephone allowance 487,215 #REF!

Total 5,882,648

Remuneration per Councillor

Cllr B Khweyiya Executive Mayor 640,888

Cllr KS Lange Speaker 521,450

Cllr E Theron PR Councillor 213,931

Cllr VA Schoeman PR Councillor 213,931

Cllr N Ngubo PR Councillor 282,712

Cllr MB Mtshingana PR Councillor 212,818

Cllr M Jan PR Councillor 255,095

Cllr DF Hartkopf PR Councillor 282,712

Cllr VD Davids PR Councillor 282,712

Cllr M De Ridder Nel PR Councillor 213,931

Cllr M Van Heerden PR Councillor 213,931

Cllr Y Zweni PR Councillor 257,110

Cllr Z Mangali Ward 1 Councillor 211,374

Cllr Z Mqokrwana Ward 2 Councillor 261,481

Cllr BM Ndika Ward 3 Councillor 265,899

Cllr M Solani Ward 4 Councillor 265,899

Cllr L Nkunzi Ward 5 Councillor 213,961

Cllr ZE Masina Ward 6 Councillor 217,323

Cllr M Mdumisa Ward 7 Councillor 213,816

Cllr X Mabusela Ward 8 Councillor 213,931

Cllr D De Jongh Ward 9 Councillor 213,931

Cllr MW Mokhoabane Ward 10 Councillor 213,816

Total 5,882,648


2017

R

35 DEBT IMPAIRMENT

Receivables from exchange transactions 26,430,419

Receivables from non-exchange transactions 11,222,399

Total Debt Impairment 37,652,818

Movement in VAT included in debt impairment (1,475,276)

Total 36,177,542

36 DEPRECIATION AND AMORTISATION

Investment Property 870,739

Property, Plant and Equipment 24,214,905

Property, Plant and Equipment - Capitalised Restoration Cost 776,860

Intangible Assets 173,798

Total 26,036,302

37 REPAIRS AND MAINTENANCE

Land and Buildings 1,749,948

Investment Property 32,352

Tools and equipment 51,567

Furniture and office equipment 107,115

Vehicles and Implements 1,037,833

Streets and stormwater 305,123

Landfill Site 96,620

Electricity Reticulation 499,231

Swimming Pool 24,733

Fencing 74

Street Lights 106,069

Total 4,010,665

38 FINANCE CHARGES

Annuity Loans 360,529

Actual Payments 184,059

Unwinding of discounted interest 176,469

Hire Purchases 143,474

Rehabilitation Provision - Landfill Sites 599,486



Overdraft Facilities 37

Interest on Overdue Accounts 8,235,990 Infrastructure: Water

Total 11,907,013


2017

39 BULK PURCHASES R

Electricity 70,593,781 Infrastructure: Water

Total 70,593,781

40 TRANSFERS AND GRANTS

Indigent Subsidies 191,813 Infrastructure: Water

Total 191,813

41 OPERATING GRANT EXPENDITURE

Expanded Public Works Program 2,438,000

Financial and Systems Management 3,886,620

Municipal Demarcation and Transition Grant 4,644,052

Valuation Costs 144,923 Infrastructure: Water

Total 11,113,594

42 OTHER EXPENDITURE

Advertisements 161,110

Audit Fees 6,327,584

Bank Charges and other related costs 363,139

Books, Publications and magazines 2,078

Cleaning Materials and Chemicals 94,560

Commission Prepaid Vendors 1,286,170

Electricity (Eskom) 810,415

Insurance 1,120,260

Integrated development planning 7,120

Legal Costs 1,656,938

License Fees 2,147,757

Local Government Activities 186,432

Membership Fees 21,050

Postage 9,592

Printing and Stationary 941,269

Professional Services 144,972

Projects from own funds 197,725

Protective Clothing 50,774

Security Services 2,026,299

Subsistence and Travelling 1,336,250

Telephone Charges 1,641,296

Training 289,875

Transport Costs 829

Vehicle: Fuel & Oil 1,428,743

Water Purchases 58

General Expenses 2,219,319 Infrastructure: Water

Total 24,471,614


2017

R

43 ASSETS ACQUIRED AND LIABILITIES ASSUMED ON MERGER DATE

Maletswai Local

Municipality

Gariep Local

Municipality

Walter Sisulu

Local

Municipality

R R R

ASSETS

Current Assets 35,810,318 44,999,267 80,809,585

Cash and Cash Equivalents 2,243,411 1,455,407 3,698,818

11,909,632 17,221,884 29,131,516

13,735,638 16,868,310 30,603,948

Operating Lease Asset - - -

Taxes 7,645,033 9,449,702 17,094,735

Inventory 276,604 3,964 280,568

Non-Current Assets 274,007,885 336,720,216 610,728,100

Non-Current Investments 833,637 - 833,637

Investment Property 46,903,142 107,203,560 154,106,702

Property, Plant and Equipment 222,293,288 228,631,897 450,925,185

- - -

Biological Assets 1,214,800 68,250 1,283,050

Heritage Assets 2,321,543 663,162 2,984,705

Intangible Assets 441,475 153,347 594,822

Total Assets 309,818,203 381,719,482 691,537,685

The Walter Sisulu Local Municipality was subsequently established by the amalgamation of the

aforementioned municipalities. Operations in the Walter Sisulu Local Municipality commenced on

6 August 2016 and the following assets and liabilities were transferred from the combining entities:

Receivables from exchange

transactions

Receivables from non-

exchange transactions

Property, Plant and Equipment -

Capitalised Restoration Cost

The Minister of Co-operative Governance and Traditional Affairs has requested the Municipal

Demarcation Board to re-determine the boundaries of Maletswai - and Gariep Local Municipalities

as per section 122 of the Local Government Municipal Demarcation Board.


43 ASSETS ACQUIRED AND LIABILITIES ASSUMED ON MERGER DATE (CONTINUED)

Maletswai Local

Municipality

Gariep Local

Municipality

Walter Sisulu

Local

Municipality

R R R

Current Liabilities 113,595,251 126,510,137 240,105,388

Annuity Loans 232,729 342,976 575,705

Hire Purchases 766,401 - 766,401

Consumer Deposits 1,869,193 158,599 2,027,792

Deferred Revenue 11,672,063 - 11,672,063

86,621,584 78,715,271 165,336,855

- 43,660,266 43,660,266

3,832,722 2,489,767 6,322,489

Current Employee benefits 8,251,121 - 8,251,121

Provisions 349,439 1,143,258 1,492,697

Non-Current Liabilities 20,488,017 22,493,020 42,981,037

Annuity Loans 2,184,916 572,775 2,757,691

Hire Purchases 1,030,870 - 1,030,870

Employee benefits 12,524,897 19,140,352 31,665,249

Non-Current Provisions 4,747,334 2,779,893 7,527,227

Total Liabilities 134,083,268 149,003,157 283,086,425

NET ASSETS 175,734,935 232,716,326 408,451,260

COMMUNITY WEALTH

Accumulated Surplus 175,734,935 232,716,326 408,451,260

Payables from non-exchange

transactions

Unspent Conditional

Government Grants

Payables from exchange

transactions


44 ADJUSTMENTS TO ASSETS ACQUIRED AND LIABILITIES ASSUMED ON MERGER DATE

Assets Acquired

and Liabilities

assumed on

Merger Date

Adjustments to

Carrying Value on

Merger Date

Adjusted Value

Recognised on

Merger Date

R R R

ASSETS

Current Assets 80,809,585 10,938,208 91,747,793

Cash and Cash Equivalents 3,698,818 (537,747) 3,161,071

29,131,516 (1,076,101) 28,055,415

30,603,948 5,765,839 36,369,786

Operating Lease Asset - - -

Taxes 17,094,735 6,786,218 23,880,953

Inventory 280,568 - 280,568

Non-Current Assets 610,728,100 7,995,345 618,723,445

Non-Current Investments 833,637 443,669 1,277,306

Investment Property 154,106,702 (76,461) 154,030,241

Property, Plant and Equipment 450,925,185 (930,938) 449,994,247

- 8,559,075 8,559,075

Biological Assets 1,283,050 - 1,283,050

Heritage Assets 2,984,705 - 2,984,705

Intangible Assets 594,822 - 594,822

Total Assets 691,537,685 18,933,553 710,471,238

Current Liabilities 240,105,388 4,152,413 244,257,801

Annuity Loans 575,705 - 575,705

Hire Purchases 766,401 - 766,401

Consumer Deposits 2,027,792 - 2,027,792

Deferred Revenue 11,672,063 7,117,888 18,789,951

165,336,855 38,398,694 203,735,549

43,660,266 (43,660,266) -

6,322,489 (165,107) 6,157,382

Current Employee benefits 8,251,121 3,604,461 11,855,581

Provisions 1,492,697 (1,143,258) 349,439

In line with GRAP 107, paragraphs 22 and 23, the following differences between the carrying

amounts of the assets acquired and the liabilities assumed, including any inconsistencies between

the basis employed relating to these assets and liabilities, were identified:

Receivables from exchange

transactions

Receivables from non-

exchange transactions


transactions

Payables from non-exchange

transactions

Unspent Conditional

Government Grants

Property, Plant and Equipment -

Capitalised Restoration Cost


44 ADJUSTMENTS TO ASSETS ACQUIRED AND LIABILITIES ASSUMED ON MERGER DATE (CONTNUED)

Assets Acquired

and Liabilities

assumed on

Merger Date

Adjustments to

Carrying Value on

Merger Date

Adjusted Value

Recognised on

Merger Date

R R R

Non-Current Liabilities 42,981,037 15,956,074 58,937,111

Annuity Loans 2,757,691 (116,010) 2,641,680

Hire Purchases 1,030,870 - 1,030,870

Employee benefits 31,665,249 (260,236) 31,405,013

Non-Current Provisions 7,527,227 16,332,321 23,859,547

Total Liabilities 283,086,425 20,108,487 303,194,912

NET ASSETS 408,451,260 (1,174,934) 407,276,327

COMMUNITY WEALTH

Accumulated Surplus 408,451,260 (1,174,934) 407,276,327

DETAIL OF ADJUSTMENTS TO CARRYING VALUE ON MERGER DATE

6 AUGUST 2016

44.01 CASH AND CASH EQUIVALENTS R

(169,243)

(25,754)

51,408

(443,669)

50,000

(490)

Total adjustment on Merger Date (537,747)

44.02 RECEIVABLES FROM EXCHANGE TRANSACTIONS

(356,010)

(620,761)

1,510,723

1,495,654

Recognise payments in advance on merger date in line with supporting sub-

ledgers (Gariep Local Municipality)

Correct immaterial difference identified on Call Accounts on merger date

(Gariep Local Municipality)

Reallocate fixed deposit of Long Term nature to Non-Current Investments

(Gariep Local Municipality)Reversal of unsupported withdrawal recognised against cash suspense

account (Gariep Local Municipality)

Recognise corrections on merger date identified in current period

Correction of interest on investments previously not accounted for up to 6

August 2016 (Gariep Local Municipality)

Remove unsupported control accounts and discrepancies on control

accounts on merger date (Gariep Local Municipality)

Correction of opening balances not aligned to 30 June 2016 audited financial

statements (Gariep Local Municipality)

Correct outstanding receivables in line with supporting sub-ledgers on

merger date (Gariep Local Municipality)

Unsupported difference between trial balance and financial statements on

6 August 2016 (Gariep Local Municipality)


44 ADJUSTMENTS TO ASSETS ACQUIRED AND LIABILITIES ASSUMED ON MERGER DATE (CONTINUED)

6 AUGUST 2016

R

(6,050,976)

2,945,269

Total adjustment on Merger Date (1,076,101)

44.03 RECEIVABLES FROM NON-EXCHANGE TRANSACTIONS

1,002

25,389

71,445

7,629,302

1,499,004

(3,460,303)

Total adjustment on Merger Date 5,765,839

44.04 TAXES

1,082,463

45

101,564

6,050,976

(3,388,131)

2,835,296

104,006


44.05 NON-CURRENT INVESTMENTS

443,669

Total adjustment on Merger Date 443,669

Correct VAT on outstanding debtors on merger date in line with supporting

ledger (Gariep Local Municipality)



Debtors control vote incorrectly included as part of Taxes (Gariep Local

Municipality)

Debtors control vote incorrectly included as part of Taxes (Gariep Local

Municipality)

Reallocate fixed deposit of Long Term nature to Non-Current Investments






Recognise Roads WIP expenditure previously not recognised (Maletswai

Local Municipality)

Impair portion of outstanding output VAT on debtors recognised on merger

date (Gariep Local Municipality)

Correct outstanding receivables in line with supporting sub-ledgers on



Remove unsupported balances on cash suspense accounts not taken

forward into merger





Eskom Accrual incorrectly allocated to Taxes (Maletswai Local Municipality)

Recognise electricity consumption up to merger date only billed after




6 AUGUST 2016

R

44.06 INVESTMENT PROPERTY

(76,461)


44.07 PROPERTY PLANT AND EQUIPMENT

(1,648,646)

(25,192)

742,899


44.08 PROPERTY PLANT AND EQUIPMENT - CAPITALISED RESTORATION COST

1,648,646

6,910,429


44.09 DEFERRED REVENUE

7,117,888


44.10 PAYABLES FROM EXCHANGE TRANSACTIONS

(10,538,048)

16,126

3,090,125

Land disposed of during period ending 6 August 2016 incorrectly not

removed from asset register (Gariep Local Municipality)

Correction of depreciation relating to movable assets (R 426 580) previously

included as part of Work in Progress (Buildings) (Gariep Local Municipality)

Reallocate asset relating to landfill site rehabilitation cost to separate line

on statement of financial position (Gariep Local Municipality)

Reallocate asset relating to landfill site rehabilitation cost to separate line

on statement of financial position (Gariep Local Municipality)


Local Municipality)

Alignment on landfill site provision and related asset to estimates on

merger date, taking into account new capping design requirements as well

as principles included in iGRAP 2

Correction of assistance received from COGHTA during the period up to 6

August 2016 (Eskom payment on behalf of Gariep Local Municipality)

Accrued interest, not yet capitalised on 6 August 2016, incorrectly included

as part of annuity balance (Gariep Local Municipality)



Property rates relating to the period ending 30 June 2017 incorrectly

recognised as revenue during the period ending 6 August 2016 (Gariep Local

Municipality)



6 AUGUST 2016

R

312,860

46,286,820

724,822

15,068

101,564

50,000

(4,934,580)

2,994,658

846,905

(1,250,554)

682,928


44.11 PAYABLES FROM NON-EXCHANGE TRANSACTIONS

6,046,355

(3,419,801)

(46,286,820)


44.12 UNSPENT CONDITIONAL GOVERNMENT GRANTS

66,808

(231,915)



Local Municipality)



Recognise payables previously not recognised on 6 August 2016 (Maletswai

Local Municipality)

Eskom Accrual incorrectly allocated to Taxes (Maletswai Local Municipality)



Payables from non-exchange transactions not defined as a minimum

disclosure requirement in GRAP 1. Balance reallocated to Payables from

Exchange Transactions (Gariep Local Municipality)

Payables from non-exchange transactions not defined as a minimum

disclosure requirement in GRAP 1. Balance reallocated to Payables from

Exchange Transactions (Gariep Local Municipality)



Account for salary expense accrued for up to 6 August 2016 (Gariep Local

Municipality)

Reversal of unsupported withdrawal recognised against cash suspense

account (Gariep Local Municipality)

Councillors Remuneration incorrectly accounted for up to merger date

(Maletswai Local Municipality)

Correction of MSIG returned to National Treasury during 2015/2016 (Gariep

Local Municipality)

Current Employee Benefits (Staff Leave and Bonuses) incorrectly included

as part of payables (Gariep Local Municipality)


forward into merger

Reversal of unsupported balance included as part of payments in advance

on merger date (Gariep Local Municipality)

Recognise unused pre-paid electricity on merger date (Gariep Local

Municipality)



6 AUGUST 2016

R

44.13 CURRENT EMPLOYEE BENEFITS

1,143,258

3,014

(157,819)

3,419,801

152,645

(988,162)

31,725


44.14 PROVISIONS

(1,143,258)


44.15 LONG-TERM LIABILITIES - ANNUITY LOANS

(5,597)

(94,287)

(16,126)


Correction of current portion of Long Service Awards on 6 August 2016


Correction of interest and redemption charges recognised up to 6 August

2016 on DBSA Loan (Gariep Local Municipality)

Correct duplicated leave provision recognised during 2015/2016 Maletswai

Local Municipality)

Current Employee Benefits (Staff Leave and Bonuses) incorrectly included

as part of payables (Gariep Local Municipality)

Correction of current portion of Post Retirement Medical Benefits on 6


Accrued interest, not yet capitalised on 6 August 2016, incorrectly included

as part of annuity balance (Gariep Local Municipality)

Unamortised loan charges previously not recognised on low interest rate

loan taken up from DBSA during 2008/2009 (Gariep Local Municipality)

Account for bonuses previously not accrued for between 30 June 2016 and


Employee related liabilities incorrectly included as part of Provisions

(Bonuses, Long Service Awards and Post Retirement Medical Benefits)


Employee related liabilities incorrectly included as part of Provisions

(Bonuses, Long Service Awards and Post Retirement Medical Benefits)


Account for performance bonuses previously not accrued for between 30

June 2016 and merger date (Gariep Local Municipality)



6 AUGUST 2016

44.16 EMPLOYEE BENEFITS R

(628,622)

157,819

(3,014)

191,004

22,576


44.17 NON-CURRENT PROVISIONS

16,332,321


44.18 ACCUMULATED SURPLUS

5,967,729

(320)

(7,117,888)

(191,004)

(22,576)

5,597

94,287

(3,090,125)

(284,565)

(312,860)

Correction of current portion of Long Service Awards on 6 August 2016


Account for movement (Interest and Current Service Cost) on Post

Retirement Medical Benefits for the period ending 6 August 2016 (Gariep

Local Municipality)Account for movement (Interest and Current Service Cost) on Long service

awards for the period ending 6 August 2016 (Gariep Local Municipality)



Property rates relating to the period ending 30 June 2017 incorrectly

recognised as revenue during the period ending 6 August 2016 (Gariep Local

Municipality)





Account for movement (Interest and Current Service Cost) on Post

Retirement Medical Benefits for the period ending 6 August 2016 (Gariep

Correction of current portion of Post Retirement Medical Benefits on 6


Account for movement (Interest and Current Service Cost) on Long service

awards for the period ending 6 August 2016 (Gariep Local Municipality)

Align landfill site provision on merger date to latest valuations that includes

new capping design requirement previously not included

Correction of interest and redemption charges recognised up to 6 August

2016 on DBSA Loan (Gariep Local Municipality)

Unamortised loan charges previously not recognised on low interest rate

loan taken up from DBSA during 2008/2009 (Gariep Local Municipality)


Recognise payables previously not recognised on 6 August 2016 (Maletswai

Local Municipality)

Correction of assistance received from COGHTA during the period up to 6

August 2016 (Eskom payment on behalf of Gariep Local Municipality)



6 AUGUST 2016

R

(9,421,891)

51,408

(76,461)

(724,822)

(15,068)

(25,192)

231,915

4,934,580

(620,761)

(490)

(152,645)

(31,725)

(3,388,131)

2,835,296

7,629,302

1,510,723

988,162

(2,209,748)

(682,928)

2,945,269


Impair portion of outstanding output VAT on debtors recognised on merger

date (Gariep Local Municipality)Correct outstanding receivables in line with supporting sub-ledgers on

merger date (Non-Exchange) (Gariep Local Municipality)Correct outstanding receivables in line with supporting sub-ledgers on

merger date (Exchange) (Gariep Local Municipality)

Correct immaterial difference identified on Call Accounts on merger date


Correction of interest on investments previously not accounted for up to 6


Account for salary expense accrued for up to 6 August 2016 (Gariep Local

Municipality)

Account for bonuses previously not accrued for between 30 June 2016 and


Remove unsupported control accounts and discrepancies on control

accounts on merger date (Gariep Local Municipality)

Land disposed of during period ending 6 August 2016 incorrectly not

removed from asset register (Gariep Local Municipality)

Alignment on landfill site provision and related asset to estimates on

merger date, taking into account new capping design requirements as well

as principles included in iGRAP 2

Reversal of unsupported balance included as part of payments in advance

on merger date (Gariep Local Municipality)

Correction of MSIG returned to National Treasury during 2015/2016 (Gariep

Local Municipality)

Correction of depreciation relating to movable assets (R 426 580) previously

included as part of Work in Progress (Buildings) (Gariep Local Municipality)

Councillors Remuneration incorrectly accounted for up to merger date

(Maletswai Local Municipality)

Correct duplicated leave provision recognised during 2015/2016 Maletswai

Local Municipality)

Correct VAT on outstanding debtors on merger date in line with supporting

ledger (Gariep Local Municipality)

Recognise unused pre-paid electricity on merger date (Gariep Local

Municipality)Recognise electricity consumption up to merger date only billed after



forward into merger

Account for performance bonuses previously not accrued for between 30

June 2016 and merger date (Gariep Local Municipality)


2017

R

CASH FROM OPERATIONS

Net Deficit for the period (41,689,508)

Non-Cash Expenditure and Revenue 57,001,988

Actuarial Gains (7,958,108)

Fair Value Adjustments (597,200)

Debt Impairment 36,177,542

Depreciation and Amortisation 26,036,302

Finance Charges 3,343,453

Contributions - Provisions and Employee Benefits 10,116,464



Performance Bonuses 590,922

Bonuses 3,956,027

Staff Leave 3,187,178

Compensation for Injury on Duty 628,387

Expenditure - Provisions and Employee Benefits (5,438,318)

Post Retirement Medical Benefits (253,483)

Long Service Awards (250,858)

Bonuses (3,930,831)

Staff Leave (919,721)

Compensation for Injury on Duty (83,426)

Other adjustments (6,337,477)

Bad Debts Written Off (5,517,477)

Grants Withheld (820,000)

Operating Surplus before changes in working capital 13,653,149

Movement in working capital 175,552,530

(63,098,341)

-

Inventory (316,404)

Payables from exchange transactions 252,070,419

Unspent Conditional Government Grants 17,947,327

Taxes (31,050,470)

Cash Flow from Operating Activities 189,205,679

Receivables from exchange and non-exchange

transactions

Deferred Revenue


2017

R

46 CASH AND CASH EQUIVALENTS

Cash and Cash Equivalents comprise out of the following:

Current Accounts 1,676,055

Call Investments and Notice Deposits 19,967,258

Cash Floats 14,764

Total 21,658,077

47 BUDGET COMPARISONS

47.1 COMPARABLE BASIS

Statement of financial position

Statement of financial performance

The budget statements does not provide for all the different revenue classifications per statement

of financial performance. For this reason, all line items not specifically catered for is incorporated

under the line item Other Revenue in the budget statement. Other revenue per budget statement

consist out of the following line items - Public Contributions and donations, Other Income,

Actuarial Gains and Insurance Receipts.

Employee Benefits and Provisions (Current and Non-Current) are included under the provisions

line item in the budget statements.

Refer to note 2 for more details relating to cash and

cash equivalents.

Differences were identified between the disclosure requirements in terms of GRAP and the

reporting requirements in terms of National Treasury budget formats.

The following items are affected by these classification differences:

Consumer Debtors consist out of both Receivables from Exchange Transactions as well as the Rates

Receivable.

Other Receivables incorporate all other current receivable balances not specifically provided for in

the National Treasury formats.

Trade and Other Payables incorporates Payable from exchange transactions, Unspent grants,

Unspent public contributions, Taxes and Operating lease liabilities.

The statement of financial performance is comparable on a line by line basis except for the

following items:


47 BUDGET COMPARISONS (CONTINUED)

Cash Flow Statement

47.2 MATERIAL VARIANCES

Statement of financial position - Budget Adjustments

None

Statement of financial position - Budget versus Actual

Statement of financial performance - Budget Adjustments

The budget statements does not provide for all the different expenditure classifications per

statement of financial performance. For this reason, all line items not specifically catered for is

incorporated under the line item Other Expenditure in the budget statement. Other Expenditure

per budget statement consist out of the following line items - Other Expenditure, Repairs and

Maintenance, Operating Grant Expenditure, Fair Value Adjustments and Actuarial Losses.

Depreciation and Amortisation and Impairments are aggregated on the budget statements while it

is shown separately on the Statement of Financial Performance

Cash

Variance mainly due to grants not yet fully spent on 30 June

2017

Consumer Debtors

Revenue lower than anticipated in the budget combined with

higher impairment charge raised during the period.

Investment Property

Budget not aligned to balances of former entities on merger

date.

Property, plant and equipment


date.

Trade and Other Payables

Budget did not fully account for the cash flow constraints

experienced by the municipality.

Borrowing


date. Capital Budget did not provide for any capital to be

funded from external funding.

Provisions and Employee

Benefits


date. Significant increase recognised on provision for landfill

site rehabilitation not budgeted for.

Accumulated Surplus

Deficit realised in current year, while an surplus was

projected. Budget not fully aligned to the actuals of former

municipalities.

All proposed adjustments based on actual figures available during mid-year performance

assessment of the municipality.

The Cash Flow Statement is presented on a comparable basis.


47 BUDGET COMPARISONS (CONTINUED)

Statement of financial performance - Budget versus Actual

Cash Flow Statement - Budget Adjustments

Cash Flow Statement - Budget versus Actual

All proposed adjustments based on actual figures available during mid-year performance

Refer to reasons provided under Statement of Financial Position and Statement of Financial

Performance above.

Property Rates

Grants and subsidies paid

Rebates/Revenue foregone incorrectly budgeted as an

expense.

Other Expenditure

Budget not fully aligned to spending program of the

municipality.

Budget not accurately aligned to the period covered being less

than a 12 month cycle.

Service Charges

Rebates/Revenue foregone incorrectly budgeted as an

expense.

Government Grants and

Subsidies - Operating Grants not fully spent at period-end

Other revenue

Significant Actuarial Gain of approximately R 8 m materialised

in the current period not anticipated during compilation of the

budget.

Employee Related Costs

Inadequate allocation in the budget towards non-cash

contributions (i.e. Leave, Bonuses, Post Employment Benefits

and Long Service Awards)

Debt Impairment

Inadequate allocation in the budget towards debt impairment

considering that a large portion of outstanding debt is

outstanding for period over 90 Days.

Depreciation & asset

impairment

Budget not fully aligned to the depreciation charge previously

recognised by the 2 former municipalities.

Finance Charges

Budget did not provide for allocations towards non-cash

revenue (landfill sites, Post Retirement Benefits and Long

Service Awards. Significant portion of interest paid relates to

arrear accounts which were not budgeted for.


2017

R

48.1 UNAUTHORISED EXPENDITURE


Transferred from Maletswai Local Municipality 37,120,119

Transferred from Gariep Local Municipality 34,663,877

Unauthorised expenditure current year - operating 64,826,837

Unauthorised expenditure current year - capital 10,244,155

Approved by Council -

Unauthorised expenditure awaiting approval 146,854,988

2017 2017 2017

(Actual) (Final Budget) (Unauthorised)

R R R

Unauthorised expenditure - Operating

Executive and Council 29,434,305 14,890,817 14,543,487

Planning and Development 5,160,821 2,390,775 2,770,046

Budget and Treasury Office 59,469,323 29,443,946 30,025,377

Public Safety 6,053,313 5,636,020 417,293

Road Transport 25,585,682 31,501,410 -

Other 1,639,263 2,503,506 -

Waste Management 36,607,704 21,378,653 15,229,051

Sport and Recreation 1,947,196 2,235,596 -

Community and Social Services 4,737,171 6,291,467 -

Housing 2,328,202 1,782,827 545,375

Electricity 94,253,630 92,957,422 1,296,208

Total 267,216,609 211,012,440 64,826,837

Unauthorised expenditure consist out of the

following:

UNAUTHORISED, IRREGULAR, FRUITLESS AND

WASTEFUL EXPENDITURE

Unauthorised expenditure only relates to

expenditure in excess of approved budget votes. No

disciplinary steps or criminal proceedings were

instituted as a result of unauthorised expenditure

incurred. Variance analysis was performed and

submitted to Council to condone.


48

2017 2017 2017

(Actual) (Final Budget) (Unauthorised)

R R R

Unauthorised expenditure - Capital

Executive and Council 410,435 400,000 10,435

Budget and Treasury Office 234,741 60,000 174,741

Public Safety - 20,000 -

Road Transport 20,276,197 10,691,324 9,584,873

Waste Management 25,207 40,000 -

Sport and Recreation 924,673 -

Community and Social Services 514,105 40,000 474,105

Housing - 20,000 -

Electricity 7,007,852 15,339,026 -

Total 29,393,212 26,610,350 10,244,155

2017

R

48.2 FRUITLESS AND WASTEFUL EXPENDITURE




Fruitless and wasteful expenditure incurred 8,235,990


Fruitless and wasteful expenditure awaiting approval 46,603,279 0

Interest on late payments 8,235,990

Total 8,235,990


WASTEFUL EXPENDITURE (CONTINUED)

Fruitless and wasteful expenditure consist out of the

following:

Details of Fruitless and wasteful expenditure

incurred :

No disciplinary steps or criminal proceedings were

instituted as a result of fruitless and wasteful

expenditure incurred.


2017

R

48

48.3 IRREGULAR EXPENDITURE




Irregular expenditure incurred 933,372


Irregular expenditure awaiting approval 48,114,622

889,503

43,869

Total 933,372

48.4 MATERIAL LOSSES

Electricity distribution losses

- Units purchased (Kwh) 77,441,517

- Units sold (Kwh) 63,734,511

- Units lost during distribution (Kwh) 13,707,006

- Percentage lost during distribution 17.70%

- Rand Value of Loss 7,602,628

The root causes of these losses are technical and

administrative in nature. Technical losses are

distribution network electrical losses inherent in the

physical delivery of electric energy. It includes

conductor losses, transformer core losses, and

potential/current coils in metering equipment.

Administrative losses includes distribution network

losses that accounts for the electric energy used by

the distribution utility in the proper operation of the

distribution network.


WASTEFUL EXPENDITURE (CONTINUED)

SCM Procedures not followed

Suppliers not registered on CSD

Irregular expenditure consist out of the following:

Details of Irregular expenditure incurred :

No disciplinary steps or criminal proceedings were

instituted as a result of irregular expenditure

incurred.


2017

R

49

49.1 Salga Contributions [MFMA 125 (1)(b)]


Expenditure incurred 1,031,166

Outstanding Balance 4,076,270

49.2 Audit Fees [MFMA 125 (1)(c)]

Opening balance 6,259,782

Expenditure incurred 6,709,677

External Audit - Auditor-General 6,444,930

Internal Audit 237,826

Audit Committee 26,922

Payments (2,014,748)

Interest on late payment - Auditor-General 955,895


49.3 VAT [MFMA 125 (1)(c)]


Movement during the period (4,265,130)

Outstanding Balance 959,335

Vat in suspense due to cash basis of accounting (32,009,805)

49.4 PAYE, SDL and UIF [MFMA 125 (1)(c)]


Payments due to SARS 9,350,317

Payments (9,350,317)

Outstanding Balance - 7,522,054

ADDITIONAL DISCLOSURES IN TERMS OF MUNICIPAL

FINANCE MANAGEMENT ACT

VAT is accounted for on the cash basis.


2017

R

49

49.5 PENSION AND MEDICAL AID CONTRIBUTIONS [MFMA 125 (1)(c)]


Payments due to pension fund and medical aid 17,963,622

Payments (24,069,135)


49.6 COUNCILLORS ARREAR ACCOUNTS [MFMA 124 (1)(b)]

90 Days

R

Cllr VA Schoeman 274

Cllr N Ngubo 611

Cllr Y Zweni 5,254

Cllr Z Mqokrwana 34,806

Cllr M Solani 3,447

Cllr L Nkunzi 5,690

Cllr D De Jongh 714

49.7 QUOTATIONS AWARDED - DEVIATIONS FROM SCM

Impractical to follow SCM process 3,261,878

Emergency 444,169

Special Works 17,121

Total 3,723,168


FINANCE MANAGEMENT ACT (CONTINUED)

The following Councillors had arrear accounts

outstanding for more than 90 days during the period

ending 30 June 2017.

During the year under review the municipality

procured goods and services in accordance with the

requirements of the supply chain management policy

and all deviations from the policy and its related

regulations were noted and condoned by council.


49.8 OTHER NON-COMPLIANCE [MFMA 125(2)(e)]

2017

R

49

49.9 TRADING WITH EMPLOYEES IN SERVICE OF THE STATE

None

50

Approved and contracted for - Infrastructure 13,963,600

51

51.1 Credit Risk

During the year under review, the municipality

engaged with the following employees in service of

the state (SCM 44)

CAPITAL COMMITMENTS


FINANCE MANAGEMENT ACT (CONTINUED)

The municipality did not comply with section 65 (2)

(e) of the MFMA. All reasonable steps to ensure, that

all money owing by the municipality be paid within

30 days of receiving the relevant invoice or

statement, unless prescribed otherwise for certain

categories of expenditure, was not taken.

Section 126 of MFMA - The municipality must prepare

and submit the annual financial statements within 2

months after year end to the Auditor General for

auditing. The annual financial statements was only

signed on the 22 September 2017 and submitted to

the Auditor General.

All Commitments will be financed from Government

Grants.

The municipality is potentially exposed to the

following risks:

Credit risk is the risk that one party to a financial

instrument will cause a financial loss for the other

party by failing to discharge an obligation.

FINANCIAL RISK MANAGEMENT


51

Cash and Cash Equivalents 21,643,312



Non-Current Investments 1,368,838

Total 51,513,706

Cash and Cash Equivalents and Non-Current Investments

Receivables

Receivables comprise of a large number of users, dispersed across different sectors and

geographical areas. On-going credit evaluations are performed on the financial condition of these

receivables. Credit risk pertaining to receivables are considered to be moderate due the

diversified nature of receivables and immaterial nature of individual balances. In the case of

consumer debtors the municipality effectively has the right to terminate services to customers

but in practice this is difficult to apply. In the case of debtors whose accounts become in arrears,

Council endeavours to collect such accounts by "levying of penalty charges", "demand for

payment", "restriction of services" and, as a last resort, "handed over for collection", whichever

procedure is applicable in terms of Council's Credit Control and Debt Collection Policy.

Receivables are disclosed after taking into account the provision for impairment raised against

each class of receivable.

Receivables are payable within 30 days. All receivables outstanding for more than 30 days are

considered to be passed due.

The following financial assets are exposed to credit

risk:

Deposits of the municipality is only held at reputable banks that are listed on the JSE. The credit

quality is regularly monitored through required SENS releases by the various banks. The risk

pertaining to these deposits are considered to be very low.

Refer to notes 3 and 4 for more information regarding the provision for impairment raised against

each service type as well as receivables considered to be passed due.

No receivables were pledged as security for liabilities and no collateral is held from any

consumers (other than consumer deposits).

FINANCIAL RISK MANAGEMENT (CONTINUED)

There are no restrictions on the cash deposits held and no cash were pledged as security. No

collateral is held for any cash and cash equivalents.


2017

R

51

Rates 28,935,617


Refuse 43,077,079

Other 16,102,902

Total 103,574,255

Long Term Receivables (including current portion)

51.2 Currency risk (Market Risk)

51.3 Interest rate risk (Market Risk)

2017

R

21,643,312

1,368,838

Long-term Liabilities (Including Current Portion) 3,965,136

Non-Current Provisions 24,459,033

Net balance exposed 51,436,320

Non-Current Investments

The following service receivables are considered

passed due (more than 30 Days Outstanding):

Long Term Receivables are disclosed after taking into account any provision for impairment raised

against the outstanding balance. Each outstanding balance are individually assessed for

impairment.

No receivables were pledged as security for liabilities and no collateral is held from any of the

counter parties.

The following balances are exposed to interest rate

fluctuations:

Cash and Cash Equivalents (Excluding Cash on Hand)

Rates is not considered to be a financial asset, but is included in analysis for user purposes.

Currency risk is the risk that the fair value or future

cash flows of a financial instrument will fluctuate

because of changes in foreign exchange rates.


The financial instruments of the municipality is not

directly exposed to any currency risk.

Interest rate risk is the risk that the fair value or

future cash flows of a financial instrument will

fluctuate because of changes in market interest rates.


51

257,182

(514,363)

51.4 Liquidity risk

30 JUNE 2017

Within 1 Year Two to five years After five years

Annuity Loans 790,498 1,814,573 2,229,380

Hire Purchases 704,988 589,495 -

243,928,143 - -

Total 245,423,629 2,404,067 2,229,380

South Africa have reached the turning point in the

rates cycle and any further upward adjustments are

remote.

Liquidity risk is mitigated by approving cash funded

budgets at all times to ensure commitments can be

settled once due over the long term. The

municipality also monitors its cash balances on a daily

basis to ensure cash resources are available to settle

short term obligations.

The following balances are exposed to liquidity risk:

Although the non-current provision is not defined as

a financial instrument, the potential effect of

changes in interest rates used to discount this

balance over time, is included for the benefit of the

user of the financial statements.

Potential effect of changes in interest rates on

surplus and deficit for the year/period:

0.5% increase in interest rates

PAYABLE


transactions


1% decrease in interest rates

Liquidity risk is the risk encountered by an entity in

the event of difficulty in meeting obligations

associated with financial liabilities that are settled by

delivering cash or another financial asset.


51

51.5 Other price risk (Market Risk)

2017

R

52

Financial Assets

Cash and Cash Equivalents 21,658,077



Non-Current Investments 1,368,838

Total 51,528,470

Financial Liabilities

Current Portion of Long-term Liabilities 1,227,085

Payables from exchange transactions 243,928,143

Long-term Liabilities 2,738,051

Total 247,893,279

Other price risk is the risk that the fair value or future

cash flows of a financial instrument will fluctuate

because of changes in market prices (other than

those arising from interest rate risk or currency risk),

whether those changes are caused by factors specific

to the individual financial instrument or its issuer, or

factors affecting all similar financial instruments

traded in the market.

The municipality is not exposed to any other price

risk.

The municipality recognised the following financial

instruments (All balances are recognised at

amortised cost.)


FINANCIAL INSTRUMENTS


53

Rates 3,936,720

Taxes 31,050,470

Total 34,987,190

54

55

The municipality received no donated assets during the period ending 30 June 2017.

EVENTS AFTER REPORTING DATE

IN-KIND DONATIONS AND ASSISTANCE

The Municipal Regulations on Standard Chart of Accounts promulgated in terms of Government

Gazette 37577 dated 22 April 2014 apply to all municipalities and municipal entities and became

effect as from 1 July 2017 .

The main objective of this Regulations is to provide for a national standard in respect of uniform

recording and classification of municipal budget and financial information at a transaction level by

prescribing a standard chart of accounts for municipalities and municipal entities which-

(a) are aligned to the budget formats and accounting standards prescribed for municipalities and

municipal entities and with the standard charts of accounts for national and provincial

government; and

(b) enable uniform information sets recorded in terms of national norms and standards across the

whole of government for the purposes of national policy coordination and reporting,

benchmarking and performance measurement in the local government sphere.

The impact of this mSCOA regulations definitely affected the municipality's current business

processes; transacting and reporting requirements.

In order for the municipality to ensure full compliance with the mSCOA regulations it was

necessary to do an ICT Due Diligence report on the current financial system's capability and

evaluate the performance of the vendors aligned with mSCOA requirements. Based on the

assessment done an item was submitted to Council to consider continuing with the current

service provider (SEBATA) by making use of the National Treasury RT25 transversal tender in order

for the municipality to ensure full compliance and functionality as per mSCOA requirements with

the effective date of implementation 1 July 2017.

STATUTORY RECEIVABLES

In accordance with the principles of GRAP 108,

Statutory Receivables of the municipality are

classified as follows:

Refer to notes 4 and 6 for more detail relating to the

rates receivables and taxes


56

57

57.1

57.2

57.3

57.4

58

The applicant is suing the municipality for R940 642 (30 June 2016 - R 940 642)

The municipality did not enter into eny PPP's in the current and prior year.

RELATED PARTIES

Related parties are defined in note 1.36

All rates, service charges and other charges in respect of related parties are in accordance with

approved tariffs that were advertised to the public. No impairment charge have been recognised

in respect of amounts owed by related parties.

CONTINGENT LIABILITIES

Matthews Mbobo, Amanda Mbobo and Playlink Singers - Claims of R100 000 (30 June 2016 - R 100

000) from the municipality made on 29 May 2014 regarding the special and general damages

suffered by the claimant for economic loss incurred in making 800 tickets which were sold in

advance, advertising, making beamers and posters, making tickets, possible profit, possible

selling of CDs and DVDs, booking, rental and deposit paid, inconvenience, humiliation,

impairment of dignity and reputation resulting from an erroneous allocation or booking of the

same venue to two different events at the same time. Adequate notice for cancellation was not

given to the claimant for alternative arrangements. The municipality has opted to defend the

case.

PRIVATE PUBLIC PARTNERSHIPS (PPP's)

The trustees of the Pollard Familie Trust has submitted a litigation claim for damages made the

municipality’s buffaloes that broke out of the nature reserve and grazed on the farm of the

applicant. The applicant’s farm is mostly veld pasture with approximately 22 hectares of planted

pastures, currently under Lucerne cultivation. The applicant established the Lucerne explicitly for

hay production as an income for the farm. The applicant has suffered damages due to the

Respondent’s buffaloes’ unauthorised grazing on the Lucerne pastures.

The outflow of the future economic benefits will be confirmed by the outcome of the court ruling,

an event that will occur subsequent to year end over which the municipality has no control.

The municipality is not expecting any re-imbursement on the damages made against it and no

contingent asset has been recognised.

The municipality were exposed to the following contingent liabilities at period end:

The municipality was sued by Mr NW Ngoqo the former employee of the municipality for pension

fund contributions not paid over to him due to non-payment of arrear contributions owed by the

municipality to the pension fund. Plaintiff suffered damages of R329 146.73 in Pension fund

contributions and loss in growth of R162 772.46. Total liability of Defendant is R491 919.19

[Summons is dated 2017/07/03]

The municipality was sued by Umhlaba Valuers for services rendered on the municipal valuation.

The summons is dated 2017/02/28] and the rand value of damages are not specified.


58

Remuneration of related parties are disclosed in notes 33 and 34

The municipality engaged with related entities in service of the state (SCM 44) - Refer to note 49.9

59

Financial Indicators

The majority of outstanding debt owed to the municipality is outstanding for more than 90 days.

The inability to recover old debt from consumers has placed constraints on the cash flow of the

Management has continued to enforce the credit control measures through electricity

disconnections, prepaid blockages and handover of long outstanding debts to attorneys.

Other related parties transactions relates to the acquisition of goods under terms and conditions

applicable to open market trading on a willing buyer and seller principles. The payment terms are

not favourable to other transactions (other related parties) and are not secured or encumbered.

Settlement terms are in accordance with the general terms of trade with no guarantees received

or given. The provision for doubtful debts is not made as the municipality is not owed by the

supplier and no bad debts expense was recognised on these related parties.

The Municipal Manager of the Walter Sisulu Local Municipality is a non-executive director of Joe

Gqabi Development Agency representing council as an ex-officio member.

Walter Sisulu Local Municipality provides a site in Obbiebron Flats to Joe Gqabi Development

Agency at no cost to the entity.

There are no loans outstanding to any related party. Since 1 July 2004 loans to councillors and

senior management employees are not permitted.

FINANCIAL SUSTAINABILITY

The indicators or conditions that may, individually or collectively, cast significant doubt about the

going concern assumption are as follows:

The current liabilities at year end exceeded the current assets and this could result in the

municipality being unable to settle all of its liabilities.

Management will continue to put measures in place to ensure that municipal current assets are in

excess of the current liabilities. Expenditure patterns and budget control measures will be

enforced to reduce the expenditure that lead to an increase in current liabilities.

The municipality experienced material losses in electricity usage to the value of R 7 602 628. This

represents a loss of 17.7%.

RELATED PARTIES (CONTINUED)


59

Operating Indicators

Other Indicators

FINANCIAL SUSTAINABILITY (CONTINUED)

Outstanding payables (especially Eskom) are high with payment periods exceeding the 30 day

limit in terms of legislation. This can mainly be attributed to the current cash constraints

experienced by the municipality.

The municipality has incurred unauthorised, irregular and fruitless & wasteful expenditure as

shown in note 48 above.

No capital grant funds were utilised for operations in the period ending 30 June 2017.


INSTITUTION LOAN RATE REDEMPTION OPENING RECEIVED REDEEMED CLOSING

NUMBER DATE BALANCE DURING YEAR DURING YEAR BALANCE

7 August 2016 30 JUNE 2017

R R R R

ANNUITY LOANS

DBSA 102312 5.00% 9/30/2027 3,513,798 - (232,729) 3,281,069

DBSA 102619 5.00% 9/30/2018 894,027 - (344,478) 549,550

Total Annuity Loans 4,407,825 - (577,206) 3,830,619

HIRE PURCHASES

ABSA (TATA Water Truck) 83338631 10.25% 12/15/2017 268,999 - (169,028) 99,971

ABSA (Nissan UD 330) 83577440 10.25% 3/1/2018 603,208 - (303,859) 299,349

ABSA (Isuzu KB 200I) 83520421 10.25% 3/1/2018 62,188 - (31,326) 30,861

FNB (CHEVROLET TRAILBLAZER) 85237353353 10.25% 10/1/2020 404,337 - (67,744) 336,593

FNB (NISSAN NP200 1.6) 85237353492 10.25% 10/1/2020 142,181 - (23,822) 118,359

FNB (Chevrolet Aveo) 85237353505 10.25% 10/1/2020 158,179 - (26,502) 131,677

FNB (Chevrolet Aveo) 85237353517 10.25% 10/1/2020 158,179 - (26,502) 131,677

Total Hire Purchases 1,797,271 - (648,783) 1,148,488

Total Long-Term Liabilities 6,205,096 - (1,225,989) 4,979,107

SCHEDULE OF EXTERNAL LOANS FOR THE PERIOD ENDING 30 JUNE 2017


APPENDIX A (UNAUDITED)


SURPLUS/

VOTE REVENUE EXPENDITURE (DEFICIT)

R R R

Council #REF! #REF! #REF!

Municipal Manager #REF! #REF! #REF!

Strategic Services #REF! #REF! #REF!

Corporate Services #REF! #REF! #REF!

Occupational Health & Safety #REF! #REF! #REF!

Financial Services #REF! #REF! #REF!

Assessment Rates #REF! #REF! #REF!

Administration and Land Affairs #REF! #REF! #REF!

Information and Communication Technology #REF! #REF! #REF!

Integrated Development Planning #REF! #REF! #REF!

Special Program Unit #REF! #REF! #REF!

Local Economic Development #REF! #REF! #REF!

Planning and Economic Development #REF! #REF! #REF!

Community Services #REF! #REF! #REF!

Cemetery #REF! #REF! #REF!

Libraries #REF! #REF! #REF!

Conference Centre and Community Halls #REF! #REF! #REF!

Museum #REF! #REF! #REF!

Housing #REF! #REF! #REF!

Traffic #REF! #REF! #REF!

Sport Grounds #REF! #REF! #REF!

Aliwal Spa #REF! #REF! #REF!

Refuse Removal #REF! #REF! #REF!

Parks and Public Places #REF! #REF! #REF!

Technical Services #REF! #REF! #REF!

Public Works #REF! #REF! #REF!

Electricity #REF! #REF! #REF!

Aerodrome #REF! #REF! #REF!

Commonage #REF! #REF! #REF!

Nature Reserve #REF! #REF! #REF!

Commonage & Reserves #REF! #REF! #REF!

Municipal Buildings #REF! #REF! #REF!

Total #REF! #REF! #REF!

#REF!APPENDIX B (UNAUDITED)

#REF!

#REF!


SURPLUS/

VOTE REVENUE EXPENDITURE (DEFICIT)

R R R

Executive and Council 5,030,242 (29,434,305) (24,404,062)

Planning and Development - (5,160,821) (5,160,821)

Budget and Treasury Office 87,171,111 (59,469,323) 27,701,789

Public Safety 5,154,895 (6,053,313) (898,418)

Road Transport 26,370,987 (25,585,682) 785,305

Other 910,299 (1,639,263) (728,964)

Waste Management 15,981,401 (36,607,704) (20,626,302)

Sport and Recreation 768,785 (1,947,196) (1,178,411)

Community and Social Services 2,341,659 (4,737,171) (2,395,512)

Housing - (2,328,202) (2,328,202)

Electricity 81,797,721 (94,253,630) (12,455,909)

Total 225,527,101 (267,216,609) (41,689,508)


APPENDIX C (UNAUDITED)

SEGMENTAL STATEMENT OF FINANCIAL PERFORMANCE (GFS) FOR THE PERIOD

ENDING 30 JUNE 2017

2017



BALANCE ON GRANTS TRANSFERRED TO TRANSFERRED TO RETURNED TRANSFERRED CLOSING

MERGER RECEIVED REVENUE REVENUE TO FROM BALANCE

DATE (OPERATING) (CAPITAL) TREASURY RECEIVABLES

R R R R R R R

NATIONAL GOVERNMENT

Equitable Share - 43,290,000 (43,290,000) - - - -

Financial Management Grant (FMG) - 3,835,000 (3,715,022) - - (119,978) -

Municipal Infrastructure Grant (MIG) 2,019,694 27,552,000 (4,462,368) (22,034,120) (820,000) - 2,255,206

Skills Development Fund - 91,288 (91,288) - - - -

Integrated National Electrification

Programme (INEP) - 5,000,000 (614,035) (4,385,965) - - - Energy Efficiency and Demand Side

Management Grant 511,967 - (62,873) (449,094) - - -

Expanded Public Works Program (EPWP) - 2,438,000 (2,438,000) - - - -

Municipal Demarcation and Transition Grant - 15,428,000 (5,594,987) - - - 9,833,013

Total 2,531,660 97,634,288 (60,268,573) (26,869,179) (820,000) (119,978) 12,088,219

PROVINCIAL GOVERNMENT

Library Grant - 1,947,000 (1,947,000) - - - -

Spatial Development Plan 361,000 - - - - - 361,000

1218 Link Houses 271,617 - - - - - 271,617

330 Houses 168,331 - - - - - 168,331

Area 5 Services 63,514 - - - - - 63,514

Hilton 89 Houses 6,746 - - - - - 6,746

Area 13 - Fund 98,454 - - - - - 98,454

318 Houses Jamestown 373,367 - - - - - 373,367

Jamestown 858 Houses Planning 6,090 - - - - - 6,090


APPENDIX D (UNAUDITED)

DISCLOSURE OF GRANTS AND SUBSIDIES FOR THE PERIOD ENDING 30 JUNE 2017


Jamestown 858 Houses 639,778 - - - - - 639,778

838 Wonings Fonds 690,403 - - - - - 690,403

Land Survey Management 467,500 - - - - - 467,500

LED Garden Project Jamestown 97,454 - - - - - 97,454

ECDLGTA - Greening and Beautification - 1,000,000 (1,000,000) - - - -

JL De Bruin Dam 193,973 - - - - - 193,973

DPLG Funding (Gariep) 110,993 - - - - - 110,993

Total 3,549,222 2,947,000 (2,947,000) - - - 3,549,222

DISTRICT MUNICIPALITY

Joe Gqabi District Municipality Grant 76,500 2,579,878 (124,464) (1,042,028) - - 1,489,886

Total 76,500 2,579,878 (124,464) (1,042,028) - - 1,489,886

ALL SPHERES GOVERNMENT 6,157,382 103,161,166 (63,340,037) (27,911,207) (820,000) (119,978) 17,127,327


REVENUE AND EXPENDITURE (STANDARD CLASSIFICATION)

ORIGINAL BUDGET FINAL ACTUAL BUDGET

BUDGET ADJUSTMENTS BUDGET OUTCOME VARIANCE

2017 2017 2017 2017 2017

R R R R R

REVENUE

Governance and administration 74,734,744 13,503,726 88,238,470 92,201,354 3,962,884

Executive and council 6,764,469 15,280,000 22,044,469 5,030,242 (17,014,227)

Budget and treasury office 63,362,178 - 63,362,178 87,171,111 23,808,933

Corporate services 4,608,097 (1,776,274) 2,831,823 - (2,831,823)

Community and public safety 11,603,908 (912,919) 10,690,989 8,265,339 (2,425,649)

Community and social services 4,603,254 (415,424) 4,187,830 2,341,659 (1,846,170)

Sport and recreation 493,930 (320,084) 173,846 768,785 594,939

Public safety 6,506,724 (177,411) 6,329,313 5,154,895 (1,174,418)

Economic and environmental services 24,382,056 (265,178) 24,116,878 26,370,987 2,254,109

Planning and development 304,500 (210,548) 93,952 - (93,952)

Road transport 24,077,556 (54,630) 24,022,926 26,370,987 2,348,061

Trading services 129,201,899 (13,750,001) 115,451,898 97,779,122 (17,672,776)

Electricity 99,290,079 (11,101,177) 88,188,902 81,797,721 (6,391,182)

Waste management 29,911,820 (2,648,825) 27,262,995 15,981,401 (11,281,594)

Other 857,629 (648,057) 209,572 910,299 700,727 OtherTotal Revenue - Standard

Total Revenue - Standard 240,780,236 (2,072,430) 238,707,806 225,527,101 (13,180,705)


APPENDIX E (1) (UNAUDITED)

NATIONAL TREASURY APPROPRIATION STATEMENTS FOR THE PERIOD ENDING 30 JUNE 2017


REVENUE AND EXPENDITURE (STANDARD CLASSIFICATION)



2017 2017 2017 2017 2017

R R R R R

EXPENDITURE

Governance and administration 68,015,241 (23,680,478) 44,334,763 88,903,627 44,568,864

Executive and council 24,911,170 (10,020,353) 14,890,817 29,434,305 14,543,487

Budget and treasury office 27,385,994 (9,215,619) 18,170,375 59,469,323 41,298,948

Corporate services 15,718,077 (4,444,506) 11,273,571 - (11,273,571)

Community and public safety 20,990,086 (5,044,176) 15,945,910 15,065,882 (880,028)

Community and social services 8,452,452 (2,160,985) 6,291,467 4,737,171 (1,554,296)

Sport and recreation 2,986,091 (750,495) 2,235,596 1,947,196 (288,400)

Public safety 7,306,555 (1,670,535) 5,636,020 6,053,313 417,293

Housing 2,244,988 (462,161) 1,782,827 2,328,202 545,375

Economic and environmental services 36,819,308 (2,927,122) 33,892,186 30,746,503 (3,145,682)

Planning and development 3,384,552 (993,777) 2,390,775 5,160,821 2,770,046

Road transport 33,434,756 (1,933,346) 31,501,410 25,585,682 (5,915,728)

Trading services 130,497,416 (16,161,341) 114,336,075 130,861,334 16,525,259

Electricity 98,787,232 (5,829,810) 92,957,422 94,253,630 1,296,208

Waste management 31,710,184 (10,331,531) 21,378,653 36,607,704 15,229,051

Other 3,987,208 (1,483,702) 2,503,506 1,639,263 (864,244) OtherTotal Revenue - Standard

Total Expenditure - Standard 260,309,259 (49,296,819) 211,012,440 267,216,609 56,204,169

Surplus/(Deficit) for the year (19,529,023) 47,224,389 27,695,366 (41,689,508) (69,384,874)


REVENUE AND EXPENDITURE (MUNICIPAL VOTE CLASSIFICATION)



2017 2017 2017 2017 2017

R R R R R

REVENUE

Executive and council 6,764,469 15,280,000 22,044,469 5,030,242 (17,014,227)


Planning and development 304,500 (210,548) 93,952 - (93,952)

Community and social services 4,603,254 (415,424) 4,187,830 2,341,659 (1,846,170)

Public safety 6,506,724 (177,411) 6,329,313 5,154,895 (1,174,418)

Sport and recreation 493,930 (320,084) 173,846 768,785 594,939

Waste management 29,911,820 (2,648,825) 27,262,995 15,981,401 (11,281,594)

Road transport 24,077,556 (54,630) 24,022,926 26,370,987 2,348,061

Electricity 99,290,079 (11,101,177) 88,188,902 81,797,721 (6,391,182)

Other 857,629 (648,057) 209,572 910,299 700,727 OtherTotal Revenue - Standard

Total Revenue by Vote 240,780,236 (2,665,608) 238,114,628 225,527,101 (12,587,527)





REVENUE AND EXPENDITURE (MUNICIPAL VOTE CLASSIFICATION)



2017 2017 2017 2017 2017

R R R R R

EXPENDITURE

Executive and council 24,911,170 (10,020,353) 14,890,817 29,434,305 14,543,487


Planning and development 3,384,552 (993,777) 2,390,775 5,160,821 2,770,046

Community and social services 8,452,452 (2,160,985) 6,291,467 4,737,171 (1,554,296)

Housing 2,244,988 (462,161) 1,782,827 2,328,202 545,375

Public safety 7,306,555 (1,670,535) 5,636,020 6,053,313 417,293

Sport and recreation 2,986,091 (750,495) 2,235,596 1,947,196 (288,400)

Waste management 31,710,184 (10,331,531) 21,378,653 36,607,704 15,229,051

Road transport 33,434,756 (1,933,346) 31,501,410 25,585,682 (5,915,728)

Electricity 98,787,232 (5,829,810) 92,957,422 94,253,630 1,296,208

Other 3,987,208 (1,483,702) 2,503,506 1,639,263 (864,244) OtherTotal Revenue - Standard

Total Expenditure by Vote 260,309,259 (49,296,819) 211,012,440 267,216,609 56,204,169

Surplus/(Deficit) for the year (19,529,023) 46,631,211 27,102,188 (41,689,508) (68,791,696)


REVENUE AND EXPENDITURE



2017 2017 2017 2017 2017

R R R R R

REVENUE BY SOURCE

Property rates 24,121,412 - 24,121,412 18,661,347 (5,460,065)

Service charges - electricity revenue 98,470,744 (15,538,684) 82,932,061 76,276,657 (6,655,403)

Service charges - refuse revenue 22,952,743 (3,623,911) 19,328,832 14,928,625 (4,400,207)

Rental of facilities and equipment 2,999,307 (1,795,556) 1,203,751 2,144,825 941,074

Interest earned - external investments 834,156 (303,062) 531,094 1,431,704 900,610

Interest earned - outstanding debtors 4,888,220 - 4,888,220 5,118,497 230,277

Fines 351,494 (221,083) 130,411 459,253 328,842

Licences and permits 3,804,692 - 3,804,692 3,225,925 (578,767)

Agency services 2,990,000 - 2,990,000 1,618,523 (1,371,477)

Transfers recognised - operational 54,990,873 16,280,000 71,270,873 63,340,037 (7,930,836)

Other revenue 3,296,894 (2,374,756) 922,138 10,410,499 9,488,361

Gains on disposal of PPE 89,375 (88,557) 818 - (818) OtherTotal Revenue - Standard

Total Revenue (excluding capital transfers and contributions) 219,789,910 (7,665,608) 212,124,303 197,615,895 (14,508,408)





REVENUE AND EXPENDITURE



2017 2017 2017 2017 2017

R R R R R

EXPENDITURE BY TYPE

Employee related costs 87,589,029 (16,894,055) 70,694,974 76,831,637 6,136,663

Remuneration of councillors 7,364,853 (2,838,923) 4,525,930 5,882,648 1,356,717

Debt impairment 3,357,532 (1,118,058) 2,239,474 36,177,542 33,938,068

Depreciation & asset impairment 17,049,696 1,740,355 18,790,051 26,036,302 7,246,250

Finance charges 992,844 (671,512) 321,332 11,907,013 11,585,680

Bulk purchases 72,879,647 (18,220) 72,861,427 70,593,781 (2,267,646)

Transfers and grants 19,480,040 (9,128,347) 10,351,693 191,813 (10,159,881)


CASH FLOWS



2017 2017 2017 2017 2017R R R R R


Receipts

Property rates 24,121,412 - 24,121,412 (11,771,625) (35,893,037)

Service charges 109,509,872 (29,162,594) 80,347,277 15,200,997 (65,146,281)

Other revenue 37,193,696 (2,494,457) 34,699,239 117,504,859 82,805,620

Government - operating 71,649,000 16,280,000 87,929,000 73,230,155 (14,698,845)

Government - capital 26,552,000 5,000,000 31,552,000 29,931,011 (1,620,989)

Interest 5,722,375 - 5,722,375 1,431,704 (4,290,671)

Payments

Suppliers and employees (168,478,457) 478,741 (167,999,717) (258,461,236) (90,461,520)

Finance charges (6,825,705) 671,512 (6,154,193) (8,563,560) (2,409,367)

Transfers and Grants (514,686) - (514,686) (191,813) 322,874

NET CASH FROM OPERATING ACTIVITIES 98,929,506 (9,226,799) 89,702,708 (41,689,508) (131,392,215)


Receipts

Proceeds on disposal of PPE 1,282,133 - 1,282,133 - (1,282,133)

Decrease/(Increase) in non-current investment - - - (1,368,838) (1,368,838)

Payments

Capital assets (26,210,350) (400,000) (26,610,350) (29,393,212) (2,782,861)

NET CASH USED IN INVESTING ACTIVITIES (24,928,217) (400,000) (25,328,217) (30,762,049) (5,433,832)





CASH FLOWS



2017 2017 2017 2017 2017R R R R R


Receipts

Increase (decrease) in consumer deposits - 89,000 89,000 2,126,012 2,037,012

Payments

Repayment of borrowing (1,133,490) - (1,133,490) 3,788,667 4,922,157

NET CASH FROM FINANCING ACTIVITIES (1,133,490) 89,000 (1,044,490) 5,914,679 6,959,169

NET INCREASE/ (DECREASE) IN CASH HELD 72,867,799 (9,537,799) 63,330,001 (66,536,878) (129,866,879)

Cash/cash equivalents at the period begin: 1,055,815 1,055,815 - (1,055,815)

Cash/cash equivalents at the period end: 73,923,614 (9,537,799) 64,385,816 21,658,077 (42,727,739)


# Audit Finding

Classification

Solution to the problem

Responsible Person

Due Date

Progress to date

1. Financial Sustainability

Risk and Governance

Improving the municipal liquidity by ensuring that current assets are in excess of current liabilities

Management

30 June 2017

Management is updating the financial recovery plan in consultation with all stakeholders

2. Amalgamation of the two municipalities

Governance Compliance with the Municipal Demarcation Board notices and requirements

Management

03 August 2016 on wards

Consultation with the Department of Co-operative Governance and Traditional Affairs (CoGTA) is continuing and adherence to all notices issued by CoGTA is in place

3. Unauthorised Expenditure

Expenditure Expenditure limitations within the budget and financial management budget locking system

Budget and Treasury Office Manager

On going

Budget adjustments indicators have been identified and overall budget revision exercise has been conducted


4. Fruitless and Wasteful Expenditure

Expenditure Compliance with legislation and payment within the 30 days required period.

Consequence management


On going

Financial viability is limiting the efforts of paying within 30 days, however financial recovery plan put in place will address the challenge

5. Irregular Expenditure

Compliance Compliance with all legislation

Management and Council

On going

Management and council is regularly reminded of the adherence to policies and legislation

6. Restatement of Corresponding figures

Cut-Off Adhere to cut off procedures at year end through the timely identification of all supporting documents

Management

30 June 2016

A road map or plan was drafted as a guide for processes to be followed for monthly, quarterly and year end cut-offs

7. Material losses on Electricity

Risk and Governance

Avoid illegal connections, tampering and all other root causes of the electricity losses

Technical Services Directorate

On going

Consultations with Eskom and Consumers is being considered to identify technical and non-technical losses


8. Debt Impairment

Accounts Receivable

Evaluation and assessment of individual classes of accounts receivable to determine indicators of impairment


Quarterly

All accounts receivables are classified in accordance to its characteristics or similarity for ease identification of impairment indicators. Write-offs motivations are submitted to council for approval

9. Oversight internal audit function was not performed effectively

Internal Audit

Effective Internal audit unit that will enhance the functionality of the audit committee

Municipal Manager

Quarterly

A new audit committee has been appointed by council to ensure that the internal audit oversight function is performed effectively

Political and Administrative guidance (Pictures of Councillors)

Refer to the Annual Report above

Auditor General’s Report

Refer to the Annual Report above

Audit Action Plan

Date post:	03-Jul-2020
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