contents · web viewin terms of section 73(1)(1) reports on failure to adopt or implement budget -...

MID-YEAR BUDGET AND

PERFORMANCE ASSESSMENT

25 JANUARY 2019

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TABLE OF CONTENTS

CONTENTS PART 1 : MID-YEAR FINANCIAL PERFORMANCE 1.1 EXECUTIVE SUMMARY..........................................................................................6

1.1.1 INTRODUCTION AND PURPOSE OF THE REPORT…………………………….………………….6

1.1.2 LEGISLATIVE FRAMEWORK……………………………………………………….…………………………6

1.2 AUDITOR GENERAL AND PROGRESS ON MATTERS…….....................................7-42

1.3 BUDGET AND FINANCIAL PERFORMANCE.........................................................43-45

1.3.1 OPERATING REVENUE......................................................................................46-48

1.3.2 OPERATING EXPENDITURE............................................................................. 49-51

1.3.3 COUNCILLORS RENUMERATION AND STAFF SALARIES AND ALLOWANCES42-48

1.3.4 CAPITAL PROGRAMME...................................................................................52-56

1.3.4 CAPITAL FUNDING BY SOURCE......................................................................56

1.3.6 DEBTORS MANAGEMENT…………………………………………………………………………58-61

1.3.5 CASH FLOW STATEMENT...............................................................................62-64

PART 2 : SERVICE DELIVERY AND BUDGET IMPLEMENTATION PLAN 2.1 INTRODUCTION............................................................................................67-72

2.2 PEFORMANCE INDICATORS.........................................................................71-72

2.3 OVERALL SERVICE DELIVERY PERFORMAMCE.................... ........................71

CONCLUSION AND RECOMMENDATIONS…………………………………………….………….…71-72

PART 3 : SUPPORTING DOCUMENTATION 3.1 FINANCIAL POSITION ACTUAL.......................................................................73

3.2 CREDITORS A AGE ANALYSIS........................................................................74-77

3.3 TRANSFERS AND GRANTS RECEIPTS............................................................78

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3.4 TRANSFERS AND GRANTS EXPENDITURE......................................................79

3.5 MONTHLY ACTUAL AND REVISED TARGETS FOR CASH RECEIPTS AND

PAYMENTS………………………………………………………………………………………………80-83

3.7 REPAIRS AND MAINTENANCE PER ASSET CLASS..........................................84

PART 4: SUPPORTING DOCUMENTATION 4.1 ANNEXURE A: ADM C SCHEDULE MID YEAR PERFORMANCE

4.2 ANNEXURE B:ADM DETAILED PERFORMANCE INFORMATION

4.3 ANNEXURE C:ADM UTHUKELA WATER MID YEAR PERFORMANCE

4.4 ANNEXURE D: MONTHLY RECONCILLIATIONS

PART 5: QUALITY CERTIFICATES5.1 QUALITY CERTIFICATES……………………………………………………………………………….86

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Glossary of Terms Adjustments Budget

– Prescribed in section 28 of the MFMA, the formal means by which a municipality may revise its annual budget during the year.

Allocations

– Money received from Provincial or National Government or other municipalities.

Budget

– The financial plan of the Municipality. Budget Related Policy

– Policy of a municipality affecting or affected by the budget, such as the tariffs policy, rates policy and credit control and debt collection policy.

Capital Expenditure

- Spending on assets such as land, buildings and machinery. Any capital expenditure must be reflected as an asset on the Municipality’s balance sheet.

Cash flow statement

– A statement showing when actual cash will be received and spent by the Municipality. Cash payments do not always coincide with budgeted expenditure timings. For example, when an invoice is received by the Municipality it scores as expenditure in the month it is received, even though it may not be paid in the same period.

DORA

– Division of Revenue Act. An annual piece of legislation that shows the amount of allocations from national to local government.

Equitable Share

– A general grant paid to municipalities. It is predominantly targeted to help with free basic services.

Fruitless and wasteful expenditure

– Expenditure that was made in vain and would have been avoided had reasonable care been exercised.

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GFS – Government Finance Statistics. An internationally recognised classification system that facilitates like for like comparison between municipalities.

GRAP

– Generally, Recognised Accounting Practice. The new standard for municipal accounting.

IDP

– Integrated Development Plan. The main strategic planning document of the

Municipality KPI’s

– Key Performance Indicators. Measures of service output and/or outcome. MFMA

– The Municipal Finance Management Act – no 53 of 2003. The principle piece of legislation relating to municipal financial management.

MTREF – Medium Term Revenue and Expenditure Framework. A medium term financial plan, usually 3 years, based on a fixed first year and indicative further two years’ budget allocations and also, includes details of the previous and current years’ financial position.

Operating Expenditure – Spending on the day to day expenses of the municipality such as salaries and wages.

Rates – Local Government taxation based on an assessed value of a property. To determine the rates payable, the assessed rateable value is multiplied by the rate in the rand.

SDBIP – Service Delivery and Budget Implementation Plan. A detailed plan comprising quarterly performance targets and monthly budget estimates.

Strategic Objectives – The main priorities of the Municipality as set out in the IDP. Budgeted

spending must contribute towards the achievement of the strategic objectives.

Unauthorised expenditure – Generally, spending without, or in excess of, an approved budget.

Virement – A transfer of budget.

Virement Policy - The policy that sets out the rules for budget transfers. Virements are normally allowed within a vote. Transfers between votes must be agreed by Council through an Adjustments Budget.

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Vote

– One of the main segments into which a budget is divided, usually at directorate / department level

PART 1: MID-YEAR FINANCIAL PERFORMANCE

1.1 Executive Summary

1.1.1 Introduction and Purpose of Report This report is prepared in terms of the Local Government Municipal Finance Management Act, 2003: Municipal Budget and Reporting Regulations. The Municipal Budget and Reporting Regulations (MBRR) are designed to achieve a range of objectives, including improving the local government sphere’s ability to deliver basic services by facilitating improved financial sustainability and better medium- term planning and policy choices on service delivery.

The purpose of this report on service delivery and budget implementation is to report on the performance of the Municipality against the Municipality’s Integrated Development Plan as well as Service Delivery and Budget Implementation Plan for the first half of 2018/19 financial year, i.e. 01 July 2018 to 31 December 2018.

1.1.2 Legislative Framework This report has been prepared in terms of the following legislative framework:

The Municipal Finance Management Act – No. 56 of 2003, Section 72; and The Municipal Budget and Reporting Regulations, 35.

The MBRR highlights the format of the mid-year budget and performance assessment.

“33. A mid-year budget and performance assessment of a municipality referred to in section 72 of the Act must be in the format specified in Schedule C and include all the required tables, charts and explanatory information, taking into account any guidelines issued by the Minister in terms of section 168(1) of the Act.”

The objective of these Regulations is to secure sound and sustainable management of the budgeting and reporting practices of municipalities by establishing uniform norms and standards and other requirements for ensuring transparency, accountability, and appropriate lines of responsibility in the budgeting and reporting process and other relevant matters as required by the Act.

In terms of section 72 (1) of the MFMA, the accounting officer of a municipality must by 25 January of each year assess the performance of the municipality during the first half of the financial year and submit a report on such assessment to the Mayor, the Provincial treasury as well as the National Treasury.

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1.2 Auditor General Opinion and Progress on Matters The Auditor General in his report for the 2017/18 financial year issued a qualified opinion on the municipality’s financial statements. There were, however, matters of emphasis which needed to be addressed. Management had to put together a comprehensive action plan to address the issues raised in the Auditor General’s report.

The issues raised as well as the progress made in addressing these issues are as follows:

Audit FindingInternal control deficiency/Root

causes

AG's Recommendation

Management's response

Costs not incurred in bringing the inventories to their present location and condition (e.g tanker costs were included in the cost of inventory (e.g tanker costs amounting to R16 729 451). Furthermore, supporting documentation could not be provided to substantiate the validity of the capitalisation of these costs to inventory. Furthermore, no basis for inclusion of the costs was provided for audit.

Water inventory is not valued in accordance with the Standard of Generally Recognised Accounting Practice for inventories (GRAP12)• Management did not account for the water inventory cumulative by taking into account the rand value of the closing water inventory of the prior, account for the current year movements to arrive at the year end closing inventory value.

Water inventory is recorded in accordance with GRAP 12. Management should refer to GRAP 12 requirements as stated in paragraphs 20 to 22 and 25. Water inventory balances should be reported cumulative in the financial statements, by taking into the opening water inventory of R7 607 785, account for movements to arrive at closing water inventory of R839 149.

Mangement agrees with the audit finding.

Personnel Costs amounting to 19 874 680: no information is available or has been submitted to ascertain whether these costs relate only to employees involved in the inventory conversion and purification process.

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General Costs amounting to 8 246 903,96: no information is available or has been submitted to ascertain whether these costs relate only to costs for bring the inventory to its present location and condition

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Maintenance Costs 5 963 773,83: no information is available or has been submitted to ascertain whether these costs relate only to costs for bring the inventory to its present location and condition

Operational Expenses – Depreciation: no information has been submitted for audit to confirm how these relate to assets in the inventory conversion or purification process

Operational Expenses - Finance Costs: these do not qualify for capitalisation to inventory as inventory is not a qualifying asset as defined in GRAP 5 paragraph 6

Contribution to funds amounting to R11 698 192: no information is available or has been submitted to ascertain whether these costs relate only to employees involved in the inventory conversion and purification process

The municipality did not determine the mix of purified vs purchased water

The municipality did not keep adequate records so as to enable auditing of the value of purified water on hand at year end by determining production costs per unit which is to be applied to the volume of purified water at year end.

Tanker and septic tank costs have been included in the calculation for production cost per unit whereas these are not production costs

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Raw water purchased from uThukela Water is not included in the calculation of inventory and the balance disclosed in the annual financial statements.

The calculation of the weighted average cost per unit excluded the value of opening stock.

There is no normal capacity fixed overhead absorption rate applied in the costing of inventory.

Management could not provide us with supporting records for auditing water losses and non-revenue water amounting to 4 731 124 and 1 543 384 kilolitres, therefore the completeness and accuracy of the closing kilolitres amounting to 111 934 could not be confirmed.

The entire cost for specific items relating to department 10 was capitalised in the inventory.

The water losses calculation did not take into account the value and kilolitres of water that was included in the opening balance.

Water networks Management could not fully use the work of the management expert in compiling the financial statements.

Management should identify all missing assets and perform necessary investigations on the assets not found.

Management agrees with finding

Waste water networks

Park facilities

The employee related costs as shown in note 24 to the financial statements, included a provision of post-retirement medical aid benefit amounting to R10 924 531 (R2016/17:

Provision for employee retirement benefits was raised without

The total liability has increased by 911% (or R 10.925 million) since the


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R0). There is no disclosure of how the provision arises.

an taking into account the obligating event.

last valuation. A numerical analysis of the unexpected movement (actuarial gain/loss) is provided in the

The financial statements contained debt impairment amounting R43 475 185 which is 100% impairment against the consumer debtors owing more than 150 days. However, management did not follow GRAP 104, Financial Instruments, in respect of the impairment for consumer debtors. Management did not take into account the credit risk associated with the consumer debtors in writing in full the consumer debtors owing more than 150 days. As a result, we were unable to confirm the valuation of the consumer debtors amounting to R17 779 954 (R16 450 635 for 16/17) as shown in note 10 to the financial statements.

The provision for impairment of consumer debtors is not calculated in accordance with the Standard of GRAP 104 (Financial intruments)Management created an allowance for bad debts by taking a fixed percentage of the gross consumer debtors balance for household consumers instead of taking into account the credit risk associated with consumer debtors in making a provision for impairment.

• The provision for impairment of consumer debtors should be calculated in accordance with the Standard of GRAP 104 (Financial intruments)• Management should take into the credit risk associated with consumer debtors in making the provision for impairment applying a fixed percentage of the gross debtors.


There were differences between revenue per the meter reading reports and Sebata billing reports which resulted in an understatement of billing for the service charges revenue. We calculated differences between the revenue per the meter reading reports and Sebata billing reports on a monthly basis for twelve (12) months. We arrived at a projected revenue understatement of R105 393 012.

Management did not ensure that there is sufficient and appropriate controls are in place to ensure the correctness of revenue from service charges.

Management should prepare and review a monthly reconciliation of the kiloliters of water billed vs. purified water and ensure that any variances above the expected norm are followed up and billed if necessary.

Mnagement agrees with the finding.

Water meters were not read and captured on a billing system on a

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monthly basis and monthly reconciliation of the kiloliters of water billed vs. purified water was not prepared.The leadership did not monitor that an action plan to fix the faulty meters is implemented timely during the financial year.

Leadership should monitor the implementation of the action plan to address the faulty meters timely.

For the below consumer accounts for revenue for service charges we could not find some of the meter reading reports, some that we found were not realistic due to faulty meters.

Management did not ensure that there is sufficient and appropriate controls are in place to ensure the correctness of revenue from service charges


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The leadership did not monitor that an action plan to fix the faulty meters is implemented timely during the financial year.

Leadership should monitor the implementation of the action plan to address the faulty meters timely.


Farms that are not on the billing system

The total water losses in rand value was calculated using the average costs of R10.93. The average costs included certain costs that do not qualify as costs directly involved in the conversion process to purify raw water. These costs are not involved in the determination of the costs of water inventory, for example interest on loan and water tanker costs. Water losses reported amounts to R51 712 781 (2016/17: R33 718 261) kiloliters.

Municipal Systems Act, 2000 (Act No. 32 of 2000) regulation 35 of the local government on appointments and conditions of employment of senior managers issued in terms of Government notice No. 21 as published under Government Gazzete No. 37245 of 17 January 2014 regulate the upper limits of total remuneration packages payable to municipal managers and managers directly accountable to the municipal manager

It was noted that the municipal manager and some of his senior managers annual total remuneration packages were not structured in terms of the above requirement.

Financial managementThe municipality did not comply with regulation 35 on appointments and conditions of employment of senior managers

The municipality should comply with regulation 35 on appointments and conditions of employment of senior managers

Management agrees with the finding.

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In terms of framework for managing programme performance information (FMPPI) paragraph 3.2 the indicator needs to have a clear, unambiguous definition so that data will be collected consistently, and be easy to understand and use. The following performance indicators for basic service delivery and infrastructure development do not have a clear unambiguous definition:• ENGS 1.3: Number of completed units with their GPS co-ordinates• ENGS 1.6: % of Brakfontein reservoir work performed per quarter; Brakfontein reservoir constructed by date• ENGS 1.9: % of work completed• Number of completed units under Buffalo Flats Sanitation project• ENGS 1.11: % of work completed• ENGS 1.12: % of work completed

Financial and Performance management• Management does not have technical indicator descriptions that will allow management to be able to document performance indicators that are well defined• Management did not adequately review the planning and reporting documents to ensure that performance indicators are well defined• Inadequate management oversight responsibility regarding performance reporting and the related internal controls.

Management should design technical indicator descriptions so that the performance required and measurement method used is easily understood.

Recommendation from AG is accepted. The Municipality will consider AG’s recommendation during the revision of the SDBIP 2018/19 which will take place after approval of the adjustment budget.

The SDBIP for 2018/19 should be amended so that the performance indicators are well defined.

No need to review the SDBIP.

Supply Chain Management section 36 (1)(a) requires that: “if deviating from, ratifications of minor breaches of procurement processes, A supply chain management policy may allow the accounting officer:(a) To dispense with the official procurement process established by the policy and to procure good and services through any convenient process which may include any direct negotiations but only:i) in an emergencyii) if such goods or services are produced or available from a single provider onlyiii) for the acquisition of special works or historical objects where specifications are

• Controls were not in place to review and monitor compliance with applicable legislation• There are no mechanisms in place to ensure that deviations which do not comply with legislation are not processed.

Management should implement internal controls to monitor compliance with SCM regulations

We agree with the finding

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difficult to compile iv) acquisition of animals for zoo'sv) in any exceptional case where it is impractical or impossible to follow an official Section 32(2)(b) of the MFMA states that a municipality must recover irregular and fruitless and wasteful expenditure from the person liable for that expenditure unless the expenditure, in the case of irregular or fruitless and wasteful, is, after investigation by a council committee, certified by the council as irrecoverable and written off by the council.

It was noted that the municipality did not conduct investigations into the irregular and fruitless and wasteful expenditure that was incurred in the previous years.

LeadershipCouncil investigated all instances of irregular expenditure to determine if any person was liable for the expenditure.

1. Council should investigate all instances of irregular expenditure to determine if any person was liable for the expenditure.

Council minutes were submitted to show consequence management

2. Irregular expenditure investigations were properly conducted.3. The investigations into irregular expenditure included the following criteria.• The investigation was commissioned/ approved at the appropriate level• Terms of reference of the investigations were approved• The scope of the investigation addressed the allegation• The recommendations/ findings were relevant to the allegations• Investigations complied with the municipality's

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policies with regards to independence and qualification/ position4. If an investigation determined that an official was liable for the irregular expenditure, the resultant loss was recovered or is in the process of being recovered from the official, unless if certified by the council as irrecoverable.

In terms of section 65(2)(c) and (e) of the Municipal Finance Management Act of the Republic of South Africa, 2003 (Act No. 56 of 2003), the accounting officer must for the purpose of subsection (1) take all reasonable steps to ensure that the municipality has and maintains a system of internal control in respect of creditors and payments, and 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 We identified invoices from creditors that were not paid within 30 days from receipt of invoice. The listing of the invoices not paid within 30 days has been communicated separately as an annexure.

The municipality did not review and monitor compliance with applicable laws and regulations.

It is recommended that management should ensure that payments are made within 30 days from the receipt of the invoice.

Management agrees with the audit finding. The late payments are caused by the financial challenges that are faced by the municipality.

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The Municipal System Act 32 of 2000 paragraph 97(1) (‘c) “Contents of policy. — (1) A credit control and debt collection policy must provision for indigent debtors that is consistent with its rates and tariff policies and any national policy on indigents.” The municipality does not have andindigent register..

Management did not contruct the indegent registerLeadershipLack of controls for maintaining all the required policies and the register.

We recommend that the municipality develop the indigent register.

Management agrees with the finding

GRAP 17 paragraph 87 requires an entity to disclose the following in the notes to the financial statements in relation to property, plant and equipment which is in the process of being constructed or developed:1. The cumulative expenditure recognised in the carrying value of property, plant and equipment. These expenditures shall be disclosed in aggregate per class of asset. 2. The carrying value of property, plant and equipment that is taking a significantly longer period of time to complete than expected, including reasons for any delays.

3. The carrying value of property, plant and equipment where construction or development has been halted either during the current or previous reporting period(s). The entity shall also disclose reasons for halting the construction or development of the asset and indicate whether any impairment losses have been recognised in relation to these assets

The municipality has work in progress amounting to R89 971 327 shown in note three (3) to the financial statements that is not disclosed as required by GRAP 17 paragraph 87.

Financial managementLack of control to ensure that the financial statements are prepared according to the GRAP requirements. GovernanceThe audit committee did not review to ensure that financial statements comply with GRAP requirements.

We recommend the correction of the financial statements to ensure that WIP is disclosed as required by GRAP 17 paragraph 87.


Generally, Recognized Accounting Practice (GRAP) 17 paragraph 56 requires entity to assess at each reporting date whether there is any indication that the entity’s expectations about the useful life of an asset have changed since the preceding reporting date. If any such indication exists, the entity shall revise the expected useful life accordingly.

• The useful lives and residual values used have not been assessed in accordance with the requirements of GRAP 17.• Management

• Management should assesses the useful lives and residual values in accordance with the requirements of GRAP 17• Management


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The municipality did not provide evidence that useful lives have been assessed as for the year ending 30 June 2018 for property plant and equipment (PPE) as recorded in note three (3) to the financial statements.

This may have result in the value of property, plant and equipment being undervalued /overvalued because of the depreciation being calculated on incorrect carrying amounts and useful lives. Furthermore, depreciation for the year has possibly been calculated on incorrect remaining useful lives and that the carrying amounts of all assets could be misstated by an unquantifiable amount

could not monitor the work performed by the management expert in respect of the annual asset management policies and procedures.

should implement internal control procedure to monitor the work of the management expert to ensure that assets are assessed for useful lives as required by GRAP Standard

In terms of Section 73(1)(1) Reports on failure to adopt or implement budget - related and other policies. The accounting officer must inform the provincial treasury, in writing, of: (a) any failure by the council of the municipality to adopt or implement a budget-related policy or a supply chain management policy referred to in section 111.During the audit the under-mentioned policies were not approved:

Management and councilors did not approved and communicate policies and procedures to enable and support understanding and execution of internal control objectives, processes, and responsibilities.

Management should implement a process where all relevant and active policies are uploaded on the Municipalities website for easy reference and accessibility.Management should also implement a policy register for all the approved and relevant policies. The register should also indicate the subsequent review dates.


Section 62(1)(c)(i) of the MFMA states that the accounting officer of a municipality is responsible for managing the financial administration of the municipality, and must for this purpose take all reasonable steps to ensure that the municipality has and maintains effective, efficient and transparent systems of financial and risk management and internal control The Municipality does not maintain a contract register. This was due to delays in completing the process of inputting the information contained in the manual contracts register

Management has not monitored that the contracts are listed in the contract register and the processes of completing the contract register has not been monitored

Management should monitor that the municipality’s contract register is completed and that all contracts are listed on the contract register.


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into the electronic contracts register template provided by the Provincial Treasury.The municipality does not have Technical Indicator Descriptions or Standard Operating Procedures for any of the indicators included in the SDBIP and APRThis may and has resulted in the Municipality setting indicators that are not appropriate, not verifiable and not well defined.

Management did not exercise oversight responsibility regarding financial and performance reporting and compliance as well as related internal controls.

Management should ensure that Technical Indicator Descriptions are established.


In terms of the Municipal Systems Act section 41(1), a municipality must in terms of its performance management system and in accordance with any regulations and guidelines that may be prescribed:

(a) set appropriate key performance indicators as a yardstick for measuring performance, including outcomes and impact, with regard to the municipality’s development priorities and objectives set out in its integrated development plan;(b) set measurable performance targets with regard to each of those development priorities and objectives;(c) with regard to each of those development priorities and objectives and against the key performance indicators and targets set in terms of paragraphs (a) and (b):(i) monitor performance; and(ii) measure and review performance at least once per year;

Management did not follow National Treasury guidelines in reporting performance informationFinancial and Performance management• Management did not adequately review the planning and reporting documents to ensure that there is consistency between the Service Delivery and Budget Implementation Plan (SDBIP) and annual performance report (APR)• Inadequate management oversight responsibility regarding performance reporting and the

Management should ensure that the necessary adjustments are made to ensure consistency between the APR and SDBIP. Furthermore, going forward, the SDBIP and APR should be thoroughly reviewed by the council before the documents are submitted as the final document.


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related internal controls.

According to the National Treasury Circular 71 of 2014 regarding uniform financial ratios and norms, the formula which should be used to calculate water losses is:

([Number of kiloliters water purchased or purified - Number of kiloliters water sold] ÷ Number of kiloliters water purchased or purified × 100) During the review of the Amajuba District Municipality’s calculation applied to calculate water losses, it has been noted that the formula differed to that prescribed by National Treasury circular 71. The formula applied by the municipality is as follows:

Management was unaware of the formula prescribed by National Treasury in circular 71, therefore it was not applied to calculate water losses.

Management should use the formula as prescribed by National Treasury in circular 71 to calculate water losses. Adjustments to the affected reports should be applied.

The management agrees with audit finding.The water loss calculation will be corrected to be in line with MFMA circular 71.

In terms of section 62(1)(b) & (c)(i) of the MFMA, "The accounting officer of the municipality is responsible for managing the financial administration of the municipality, and must for this purpose take all reasonable steps to ensure that full and proper records of the financial affairs of the municipality are kept and that the municipality maintains effective, efficient and transparent systems of financial and risk management and internal control. The municipality indicated that a new smart metering system for bulk water was implemented during the 2017/18 financial year. These new bulk meters provide automated meter readings to the SCADA system. The no drop report, which the municipality uses to calculate water losses is compiled using information from the SCADA system. The municipality could not provide an alternative supporting documentation to confirm the bulk meter readings. No assurance could be placed on the bulk purification and purchases information provided to audit to re-perform the calculation on water losses. This results in a limitation of scope.

The accounting officer did not ensure that there was adequate evidence supporting the bulk meter readings.

The accounting officer should implement adequate systems to ensure that sufficient supporting evidence relating to bulk water production and purchases is available.


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In terms of section 11(3) (a) of the Municipal Systems Act which states “A municipality exercises its legislative or executive authority by— Developing and adopting policies, plans, strategies and programmes, including setting targets for delivery”; During the audit it was identified that the municipality does not have an approved policy in place that addresses routine maintenance of its water and sanitation infrastructure assets. The absence of an approved routine maintenance policy for water and sanitation resulted in no planned maintenance on water and sanitation infrastructure being conducted (short and long term).

The accounting officer did not exercise adequate oversight responsibility to ensure that all policies governing effective service delivery were in place, approved and implemented.

A comprehensive policy on the maintenance of water and sanitation infrastructure to facilitate decision making should be developed, approved and implemented.

Management agrees with the finding. The municipality has a draft Water and Sanitation Maintenance Policy

The Amajuba district municipality does not have a standard operating procedure guiding the development of condition assessments of water and sanitation infrastructure in the district. Condition data is used to determine the need and timing for some routine maintenance and remedial action to prevent loss of service or economic loss. The conditional assessment of water and sanitation infrastructure for the district was previously completed in 2016. The municipality was assisted by COGTA and a consultant to perform this assessment.

The accounting officer was not aware that standard procedures relating to the development of conditional assessment for water and sanitation infrastructure should be developed.

Standard operating procedures for condition assessment to be conducted on water and sanitation infrastructure in the district should be developed and implement. At a minimum the procedures should include the following:• when and how to conduct a condition assessment, • the frequency of a condition assessment, and • the skills of the officials that should conduct the condition assessment• budget if the conditions assessment would be conducted by a

Management agrees to the finding. A standard operating procedure for conditional assessment to be developed 30 March 2019.

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consultant.In terms of section 11(3) (a) of the Municipal Systems Act which states “A municipality exercises its legislative or executive authority by—Developing and adopting policies, plans, strategies and programmes, including setting targets for delivery”; The municipality does not have a routine maintenance plan water and sanitation infrastructure in the district. During discussions with the relevant individuals from the technical unit, it was indicated that maintenance of water and sanitation infrastructure is done on a reactive basis in the district. A routine maintenance plan should include the following:• definition of maintenance standards;• allowance for the rectification of existing defects;• description of the work to be carried out; and• forecast of the necessary maintenance, major repairs and preventative maintenance expenditure for the planning period. Without a routine maintenance plan management is not in a position to make informed decisions, e.g. prioritizing which water and sanitation infrastructure assets require urgent intervention. Consequently, there was no planned maintenance conducted for the 2017-18 financial year has a high probability of deterioration as well as an increase in repair and maintenance costs.

The accounting officer did not exercise adequate oversight to ensure that all plans governing effective service delivery are in place, approved and implemented.

Management should implement a maintenance plan for water and sanitation infrastructure, per the guideline, to enable maintenance action to be taken in a timely and cost-effective manner, which will also help to preserve the asset’s value. As part of an action plan, a designated senior official should be assigned this responsibility to be achieved within agreed upon timeline with regular reporting and monitoring measures in place.

Management agrees to the finding. A standard operating procedure for conditional assessment to be developed 30 March 2019.

In terms of section 79 of the Municipal Systems Act which states “If a municipality decides to provide a municipal service through an internal mechanism”, it must - “(a) allocate sufficient human, financial and other resources necessary for the proper provision of the service;”; There are insufficient qualified engineers to conduct the condition assessments and meet project needs and oversee the work performed by consulting engineers in relation to water and sanitation infrastructure due to two vacancies in the

The accounting officer did not ensure that the project management unit at the municipality was sufficiently capacitated.

The accounting officer should ensure the project management unit is capacitated in order to assist the municipality in carrying out its service delivery function.


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project management unit. A consequence of not having adequate staff can be seen in the finding on achievement of service delivery targets, with the targets for only 2 of 10 water and sanitation projects implemented for 2017/18 being met. In addition, where quality defects are noted on projects, could be due to the lack of monitoring on projects due to a lack of capacity within the municipality. In terms of section 62(1) (c) (i) of the MFMA, an Accounting Officer (AO) for a municipality “must ensure that the municipality has and maintains effective efficient and transparent systems of financial and risk management and internal control.” Section 62(1) (a) states that the AO “is responsible for the effective, efficient, economical and transparent use of resources of the municipality.” The approved project list of water and sanitation infrastructure projects for implementation in the 2017/18 financial year did not include project values for the projects, nor did it include projected timelines for the projectsTherefore, management and council would not be able to make informed decisions relating to costs, achievement of project milestones, exercise proper project management principles and to identify delays in the projects included on the project list.

The accounting officer did not ensure that the project list which was approved by council contained information relating to the overall project value and timelines on the project.

The accounting officer should ensure that the project list which is approved contains adequate information relating to the projects to be implemented such as project value, timelines, etc.


a) There were no annual targets for the 2017/18 financial year for the Emadlangeni Sanitation project. It was indicated during discussions with the technical team at Amajuba district that the targeted number of VIP units to be constructed was reduced due to other sanitation inventions by other government departments in the targeted area. However, there was no record of the reduced number of units or the revised contract price. In addition, it was indicated that the project is at close out stage, however

The accounting officer did not ensure that adequate planning and project management (annual targets, approvals for revisions in targets and costs, monitoring of quality aspects)

The accounting officer should ensure that adequate planning and project management occurs on projects to ensure that they are implemented as scheduled, in accordance with project timelines

Management noted the AG’s finding.

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the revised number of units or revised cost on the project was not available. As a result, adequate monitoring on the project could not be performed. b) The municipality indicated that although the overall number of VIP units targeted for Buffalo Flats Sanitation were not met, the project was at close out stage. This was due to the duration of the funding agreement lapsing. c) During a site inspection at the Buffalo Flats sanitation site on the 04 October 2018, the following quality issues were noted with the ventilated improved pit (VIP) latrines.

occurred on the selected sanitation projects.

and budgets, and the agreed upon quality aspects are met by the contractors. In addition, appropriate approvals should be required for any revision of the scope indicated in the approved business plans.

The signed protocol agreement, for phase 3 of the EPWP, indicates targets on work opportunities and full time equivalents (FTE’s) which the Amajuba District Municipality should achieve. However, the district municipality has not achieved the targets for FTE’s and work opportunities for the past 4 and 3 financial years respectively. The 2017/18 financial year was the municipality’s most significant year of underperformance relating to FTE’s with only 48% of the target being achieved. The targets and actual achievement of FTE’s of the district municipality for phase 3 of EPWP is indicated below:

Poor planning of projects to ensure that projects were implemented as scheduled in order to achieve the performance targets.

Ensure officials are aware of SCM processes to avoid delays in the implementation of infrastructure projects.


Currently the budgeting for EPWP, only takes into account the grant allocation which is provided to the municipality through the EPWP Integrated grant. Although there are other infrastructure projects which have an EPWP component and are not funded by the EPWP Integrated grant, are not taken into account when budgeting for EPWP. These projects are budgeted for as part of the grants, however the construction and EPWP portions of these projects are not differentiated. As a result, not including all EPWP projects when budgeting for EPWP the municipality will unable to monitor the actual expenditure for all EPWP projects, in order to have a holistic representative image regarding EPWP in the district, and to better inform management decisions relating to EPWP.

Management did not include all projects on the EPWP project list since some of the projects were not funded by the EPWP Integrated grant, as a result these projects EPWP component was budgeted within the infrastructure budgets.

Ensure that all (IG Grant, MIG/WSIG, Own funding) EPWP projects are budgeted.

Management agrees to the finding under section 1.2. Action plan: to communicate with public works province or national to align the system and improve planning for all projects. (refer to annexure 3 business plan-budget) /reg /progress report )

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Section 16.1.5 of the EPWP Integrated Grant agreement signed between the Amajuba District Municipality and the National Department of Public Works indicated that the municipality should develop an EPWP Project list, which should be an annexure to the grant agreement, to meet or exceed its performance targets. The performance target for the Amajuba District Municipality as indicated in the grant agreement was 98 FTE’s.

Management did not review the amended project list to ensure it complied with Section 16.1.5 of EPWP Integrated Grant agreement.

Implement a proper contract management process to ensure alignment and compliance with key contractual deliverables as stipulated in the EPWP Integrated Grant agreement, and should include a supervisory review of the project list together with the contract requirements with appropriate level sign off as evidence of review.

Management agrees to the finding under section 1.6.Action plan: refer the finding to National and Province to advise on finding.

The municipality provides limited training of EPWP participants conducted on EPWP projects. In terms of paragraph 14 and 14.1 of Government Gazette No. 34032 issued on 18 February 2011, training is regarded as an important component of EPWP. A clear training programme not only ensures that workers obtain all the skills required to complete their work or tasks, it is importantly aimed at assisting participants when leaving the programme to be skilled enough to be employable and/or manage their own enterprise.During discussions with management, it was indicated that basic informal induction training relating to the safety on site is provided to EPWP participants which are employed on infrastructure and environmental sector projects. During the 2017/18 financial year, there was no formal or accredited training provided to any of the EPWP participants in the 589 work opportunities created.

A formal training programme is not in place therefore the municipality is unable to identify the training needs of EPWP participants. As a result, the municipality is unable to request adequate funding to budget for the training needs.

• Engage with National Department of Public Works concerning the challenges and limitations restricting them from implementing EPWP training and request their intervention. • Adopt a formal comprehensive training programme (ie. with a balance of accredited training, experiential training and coaching/mentoring) for the participants. This would assist in the provisioning of a budget for the training of EPWP participants.


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• Include training requirements in the terms and conditions of the participant’s employment contracts. Where the EPWP project is contracted out, the training deliverable should also be included in the contractual arrangement in a specific clause dealing with the provision of training.

The EPWP participant selection was not always done within the prescribed target groups. The EPWP programme aims to draw significant numbers of the unemployed into productive work and that these workers gain skills while they work, thus taking an important step to get out of the pool of those who are marginalised. The selection of each worker must be done based on a clear set of criteria and should follow a fair and transparent process to minimize patronage and abuse. The following selection criterion applies to Phase 3 of the EPWP:1. Are willing and able to take up the offered work,2. Can be categorised as poor,3. Are unemployed or underemployed, and4. Live close to the project area (i.e. local).

Criteria for selection of participants were not clearly communicated and implemented by the project managers, hence the screening of the participants were not in accordance with the EPWP selection criteria.

Enhance the tool used for EPWP selection, which will improve transparency in EPWP selection process. The tool should include:Ø Attendance register Ø ID number, Name, ward, contact details of all proposed EPWP participantsØ ID number, Name, ward, contact details of all selected EPWP participantsØ Provision for the totals of women, youth and disabilities, in order to calculate percentages to ensure compliance to the required target groups.

Enhancement of

Management agrees to the finding under section 2. However, it must be noted that certain projects were very short term related such as the construction of the VIP toilets, therefore the selection was concluded within the ward were construction took place and this was managed by our internal facilitation team.

As at 2018/19, Amajuba DM has compiled a selection

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the tool has already been implemented by the district municipality.

• Consult with NDPW on the functionality of ERS and how the system could provide the municipality with meaningful analysis and exception reporting on a wider spectrum of the municipality’s EPWP initiatives to enhance monitoring and timely corrective actions

process criterion that assists with the transparency for participant selection were EPWP projects are been implemented. The selection is signed off by the facilitation team and director.

Action: to verify employment details and undertake screening of EPWP participants as per recommendations.

Clauses relating to basic conditions of employment, leave, deductions, health and safety, work hours were not included on contracts which the contractors signed with the EPWP participants. The table below provides examples of such instances:

Municipal officials did not review the contracts of the EPWP participants employed through the contractor, included the necessary clauses (ie. basic conditions, leave, deductions, work hours, etc.).

Review the contracts issued to EPWP participants, to ensure that the necessary clauses (basic conditions, leave, deductions, work hours, etc.) for employment are reflected.

Management agrees to the finding under section 3.Action: Undertake induction and insists that all contacts must be EPWP aligned.

The payment certificates received from consultants did not include a breakdown for EPWP workers on site, this cost was included in the construction costs on the project. As a result, the payments on EPWP could not be traced for a specific EPWP participant or a specific month. Furthermore, it could not be confirmed or traced that those participants received the minimum wages as prescribed by legislation.

Municipal officials did not require that EPWP be included as a separate item on the payment certificates nor did they attach the supporting evidence (attendance

Ensure that contractors distinguish EPWP costs on payment certificates, as well as attach supporting evidence such as attendance registers, payment

Management agrees to the finding.Action: refer to national to amend the system for reporting breakdown on associated

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registers, payment registers)

registers, and summary of payments on EPWP, on the payment certificates.

EPWP costs and reflect on contractor payment certificates moving forward.

As previously reported, the Information Security Officer (ISO) position has not been established at the municipality. The IT Unit is currently composed of only one staff member as the following posts depicted on the organogram are vacant:• Chief Technology Officer (CTO) • Network Administrator • Database Administrator

In the absence of adequate staff resources the IT Unit might not be in a position to provide efficient and effective support to the municipality. Furthermore, vacant posts could lead to personnel performing incompatible functions and a breakdown in segregation of duties. This could result in IT not adequately supporting business operations and in turn not meeting the needs of the municipality.

The municipality did not implement an adequate action plan to resolve the prior year IT audit finding. A lack of funding prevented the hiring of individuals to fill the vacant IT positions to resolve the audit findings.

Vacant IT posts should be evaluated, critical positions prioritised to be filled and the required budget made available.

Mangement agrees with the audit finding.

Roles and responsibilities of IT personnel should be designed and filled to ensure appropriate segregation of duties with succession planning implemented to allow for skills transfer to other staff members.

As previously reported, it was noted that although the municipality had amended its IT Charter to now include all required information, this document was only approved on the 22 August 2017 and has not yet been implemented within the municipality.

If the IT Charter is not implemented and distributed to all relevant staff this may result in the IT Unit not having sufficient guidance and direction on its role and responsibilities within the municipality.

The municipality has appointed a consultant firm to develop IT governance policies and procedures, the procedures are awaiting approval from the Amajuba District Municipality Council.

The approved IT Charter should be implemented within the municipality. Formal monitoring and reporting mechanisms to ensure that the objectives of the charter are being realised should be established. Management should perform proactive monitoring of


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agreed upon action plans to ensure audit findings are timeously resolved.

As previously reported, it was noted that although the municipality had amended its IT Strategic Plan to now include all required information, this document was only approved on the 22 August 2017 and has not yet been implemented within the municipality. If the IT Strategic Plan is not adequately implemented this may result in IT goals not contributing to the strategic objectives of the municipality and could cause IT operations not to meet the business needs of the municipality.

The municipality has appointed a consultant firm to review, update and develop IT strategic plan. The plan is awaiting approval from the Amajuba District Municipality Council and will thereafter be implemented.

The approved IT Strategic Plan should be implemented within the municipality. Management must ensure that formal monitoring and reporting mechanisms are established to ensure that the objectives of the plan are being realised. Management should perform proactive monitoring of agreed upon action plans to ensure audit findings are timeously resolved.


As previously reported, the IT Security Policy does not include the following information for Windows Active Directory:• Reviewing system access• Logging and monitoring of privileged accounts• Default and vendor support account management • Administrator passwords• Encryption of authentication

The lack of an adequately documented IT Security Policy could lead to uncertainty and inconsistencies in the application and implementation of IT security processes. This may result in weak and differing IT security controls being configured on application systems used by the municipality and employees not being aware of their IT security responsibilities.

The municipality has appointed a consultant firm to develop IT security policies and procedures to contain sufficient information. The policies and procedures are awaiting approval from the Amajuba District Municipality Council.

Management should ensure that the IT Security Policy is updated to include all required information. The IT Security Policy should thereafter be approved by the relevant levels of authority, implemented within the municipality and communicated to the employees. Management should perform proactive monitoring of agreed upon action


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plans to ensure audit findings are timeously resolved.

As previously reported, it was noted that exception reporting and monitoring had not been performed frequently for patch management updates on Windows Active Directory.

In the absence of regular reviews of patch reports, management may not be able to identify outdated patches which could result in computers and servers becoming vulnerable to data corruption and security breaches.

The municipality did not implement an adequate action plan to resolve the prior year IT audit finding. The single staff member that is employed in the IT Unit did not have the adequate time to review patch installations.

Staff should be trained so that they can perform exception monitoring and reporting for all required aspects on the Windows Active Directory. System generated reports should be regularly reviewed to identify any anomalies and appropriate action taken. Management should perform proactive monitoring of agreed upon action plans to ensure audit findings are resolved.


As previously reported, the the IT Security Policy did not detail the required password parameters to be configured for the following controls:• Password history • Minimum password length• Maximum password age • Lockout threshold • Session timeouts • Password complexity (Refer to the management report for more details).

The municipality did not implement an adequate action plan to resolve the prior year IT audit finding. The single staff member that is employed in the IT Unit did not have the capacity to update the IT Security Policy to include required password parameters and this resulted in inconsistent password settings being configured on systems used by the municipality.

The IT Security Policy should be enhanced to include the parameters that must be configured for passwords on all systems used by the municipality. These recommended settings must thereafter be configured on all systems. Management should perform proactive monitoring of agreed upon action plans to ensure audit findings are

IT Policy has been reviewed and is ready for Council approval.

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resolved.As previously reported, activities performed by users with administrator privileges on the Windows Active Directory, Sebata and Payday application systems were not periodically reviewed and monitored.Users with administrator privileges have full control over the network and IT applications. If activities of administrators are not adequately reviewed and monitored this may result in unauthorised activities performed not being detected in a timely manner. In addition, user account maintenance activities could be performed by administrators without valid and approved requests. This may affect the integrity, confidentiality and availability of data stored on the network and IT applications.

The municipality did not implement an adequate action plan to resolve the prior year IT audit finding. There was not enough staff capacity at the municipality to assign independent persons to monitor administrator activities performed on IT systems.

The activities of individuals with system administrator privileges should be monitored and reviewed by a senior independent person on a regular basis. Evidence of such reviews should be retained. Management should perform proactive monitoring of agreed upon action plans to ensure audit findings are resolved.


As previously reported, the following deficiencies were noted regarding the management of the firewall:• Firewall rules had not been clearly, sufficiently and accurately commented on• Logs were not regularly, proactively analysed and acted upon • The firewall configuration was not backed up and secured• The firewall status was not monitored regularly• Firewall recovery had not been included in the disaster recovery related documents• A firewall recovery test had not been performed to ensure that the firewall was adequately redundant and the mean time to recover acceptable to management• The firewall configuration was not regularly reviewed for inconsistencies and weaknesses• The firewall configuration standard had not been reviewed during the period under review• Rules of access had not been established• Real-time alerts were not sent to firewall administrators • Changes to the firewall security rules were not formally logged and approved• Firewall administrator changes were not

The municipality did not implement an adequate action plan to resolve the prior year IT audit finding. Inadequate capacity and a lack of firewall controls knowledge existed in the IT department as there was only on permanent staff employed who had not been formally trained to manage the firewall.

Staff should attend training to acquire sufficient knowledge regarding the functionality of the firewall and required controls. Controls surrounding the firewall should be enhanced to ensure that the device is operating optimally and being monitored on a regular basis. Management should perform proactive monitoring of agreed upon action plans to ensure audit findings are resolved.


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recorded and monitored • Firewall log reports were not being reviewed and followed up on

In the absence of a robust and adequately managed firewall, the municipality may not be able to detect and monitor potential security threats on a real time basis. Slow or inadequate responses by management to firewall alerts could compromise the availability of IT systems and cause significant disruptions to the business operations of the municipality.As previously reported, formalised user access reviews had not been conducted for the Windows Active Directory, Sebata and Payday systems. Management may not be able to identify users who have been granted excessive access rights or access rights no longer required to perform the roles and responsibilities associated with their job functions. This could compromise the confidentiality, integrity and availability of data stored on systems used by the municipality.

The municipality did not implement an adequate action plan to resolve the prior year IT audit finding. Inadequate capacity and a lack of technical knowledge existed in the IT and Finance departments to perform formalised user access reviews.

Periodic reviews of user access rights assigned on IT systems used by the municipality should be performed to ensure that accesses assigned are still in line with the roles and responsibilities performed by an employee. Evidence of such reviews performed and subsequent actions taken should be retained. Management should perform proactive monitoring of agreed upon action plans to ensure audit findings are resolved.


As previously reported, no reviews had been performed to detect unusual user logon times and repeated failed logon attempts. Furthermore, user activity audit trails had not been reviewed to identify unauthorised transactions and suspicious data changes that had been performed on the systems utilised by the municipality.User accounts being logged onto at unusual times may be an

The municipality did not implement an adequate action plan to resolve the prior year IT audit finding. Inadequate capacity existed in the IT and Finance departments to

Periodic reviews of logon violations and user activity audit trails should be performed to identify suspicious activities. Evidence of such reviews performed and


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indicator that suspicious and unauthorised activities are being performed utilising a specific user account. Not reviewing user access and logon attempts could result in unauthorised access attempts going undetected for extended periods of time. The lack of review of user activity audit trails could result in unauthorised activities performed not being detected in a timely manner.

perform formal reviews of logon violations and audit trails.

subsequent actions taken should be retained. Management should perform proactive monitoring of agreed upon action plans to ensure audit findings are resolved.

As previously reported, password reset forms had not been maintained for password resets actioned on Windows Active Directory and Payday during the period under review.

If the required documentation is not completed for passwords reset, management may not be able to confirm that all passwords that have been reset were initiated by valid and approved requests. This may result in individuals exploiting the password reset process to gain unauthorised access to systems used by the municipality.

The municipality did not implement an adequate action plan to resolve the prior year IT audit finding. The password reset process stipulated in the IT Security Policy was not sufficiently detailed to ensure that password reset forms were consistently completed.

The IT Security Policy should be enhanced to include detailed steps on the requirements to be met before a password reset will be actioned. Password reset forms should be adequately completed prior to any password reset being performed. These forms must be filed and maintained for future reference purposes. Management should perform proactive monitoring of agreed upon action plans to ensure audit findings are resolved.


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As previously reported, it was noted that although access requests are telephonically communicated to the service provider by the municipality, internal access request communications were not maintained for the following on Payday:• Changes of user access implemented• Termination of user access actioned

If the required documentation is not completed and approved for user access amendments, management may not be able to confirm that all user maintenance activities performed by the service provider had been initiated by valid and approved requests. Furthermore, the municipality may not be able to hold the service provider accountable for any incorrect user account management activity performed which could result in inappropriate access being assigned to users. This could compromise the confidentiality, integrity and availability of data stored on the Payday system.

The municipality did not implement an adequate action plan to resolve the prior year IT audit finding. Management was under the impression that user access forms were the responsibility of the service provider since they add, amend and remove access once notified by the municipality. User access forms were therefore not maintained internally.

User access request forms should be adequately completed and approved prior to any user access amendments being performed by the service provider. These forms must be securely filed and maintained by the municipality for future reference purposes. Management should perform proactive monitoring of agreed upon action plans to ensure audit findings are resolved.


As previously reported, the following deficiencies were identified regarding physical and environmental controls surrounding the server room:• Humidity controls had not been implemented • Guidelines for eating, drinking and smoking in proximity to the server room have not been established• A video camera was installed outside the server room however it has not been activated• Periodic reviews were not performed to establish the adequacy of users with access to the service room via the biometric access controlsInadequate physical and environmental controls increase the risk of the IT equipment being damaged or tampered with. This may compromise the availability of IT systems and cause significant disruptions to the business operations of the municipality.

The municipality did not implement an adequate action plan to resolve the prior year IT audit finding in a timely manner. Management will be moving its’ operations to the server and thus making changes to the physical and environmental controls in the server room would be wasteful expenditure.

The physical and environmental controls surrounding the server room must be enhanced to ensure that in the event of a disaster or deliberate tampering with IT equipment the controls present will be sufficient to mitigate the risks and allow management to take appropriate action. Management should perform proactive monitoring of agreed upon action


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plans to ensure audit findings are resolved timeously.

As previously reported, it was noted that although the municipality had amended its IT Service Continuity Policy to include details on the current backup procedures performed, the updated document was still in draft and had not yet been approved.

The lack of approved backup procedures may result in employees who are required to perform backups not being aware of the correct procedures to be followed to ensure that a backup is successfully completed. This could result in the municipality not being able to rely on backups taken to restore systems and data.

The municipality has appointed a consultant firm to develop and update the IT service continuity policies and procedures. The policies and procedures are awaiting approval from the Amajuba District Municipality Council and will thereafter be implemented.The municipality has appointed a consultant firm to develop and update the IT service continuity policies and procedures. The policies and procedures are awaiting approval from the Amajuba District Municipality Council and will thereafter be implemented.

The IT Service Continuity Policy should be approved, implemented within the municipality and communicated to relevant employees. Management should perform proactive monitoring of agreed upon action plans to ensure audit findings are timeously resolved.

IT Service Continuity Policy has been reviewed and is ready for Council approval.

As previously reported, it was noted that the Continuity Strategy document and Disaster Recovery (DR) Instruction document omitted details on maintenance and testing, including the frequency of DR tests.

In the event of a disaster the municipality may not be able to recover business operations in a timely manner if disaster recovery documents have not been adequately maintained and are reflective of the current IT environment. Management may not be aware of the

The municipality has appointed a consultant firm to develop IT disaster recovery documents to contain sufficient detail. The policies and procedures are awaiting approval from the Amajuba District

The disaster recovery documents of the municipality should be updated to include all required information. Management should perform proactive monitoring of agreed upon action


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effectiveness of its disaster recovery documents if regular testing is not performed as per the required frequency.

Municipality Council and will thereafter be implemented.

plans to ensure audit findings are timeously resolved.

As previously reported, it was noted that although service level agreements (SLA’s) held with service providers state that they will manage and perform all system changes, the following change management responsibilities that cannot be outsourced were not being performed by the municipality: (Refer to the Management Report for more details).

The municipality has appointed a consultant firm to develop IT governance policies and procedures, the procedures are awaiting approval from the Amajuba District Municipality Council.Inadequate capacity existed in the IT and Finance departments to take accountability and embed stringent change management controls.

Change management processes should be enhanced to ensure that the municipality is aware of and approves all system changes prior to them being rolled out by service providers. Management should perform proactive monitoring of agreed upon action plans to ensure audit findings are resolved.


Amajuba District Municipality has not complied with the requirements of MSCOA

The Amajuba District Municipality has not complied with the National Treasury MSCOA requirements. As at 1 July 2017, the municipality was not able to successfully implement and report using the new required chart of accounts. Currently there are two financial systems, Sebata Financial Management System (FMS) and Sebata Enterprise Management System (EMS) running parallel at

The municipality did not adequately and timeously address system and service provider challenges experienced.

Management should liaise with the service provider and determine the actions required to go live with the MSCOA compliant system.A detailed action plan should then be developed and closely monitored by the municipality to ensure that the timelines are met and required activities

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the municipality with the Sebata FMS which is not

timeously performed.

It was noted that the Amajuba district municipality has migrated from Sebata financial management system (FMS) to mScoa required Sebata enterprise management system (EMS) on 1 September 2018. It was noted that majority of the data has not been migrated. The municipality is still using the FMS system to bill customers. Not using the new system means that the municipality has been funding an application which is idle and the data is scattered over two systems. Additionally, it further indicated that the municipality has not been complying with mScoa which mandated that the municipality go live on 1 July 2017.

The municipality did not adequately and timeously address system and service provider challenges experienced.

The municipality in conjunction with Sebata should draw up a plan to fully implement the EMS system. The municipality should also take steps to solving issues identified in order for the municipality to operate on the mScoa mandated Sebata EMS.

Managmenet agrees with the finding.

It was noted that Sebata FMS does not enforce segregation of duties when making changes to the municipality tariffs. It was further noted that the service provider (Sebata) has access to make tariff changes on Sebata. The access is granted as when needed by the municipality however segregation still is not enforced and thus not ensuring that the change is per the requested tariff. Not enforcing the control may lead to inaccurate tariff changes being made to the system and thus incorrect charges being made to accounts.

The system has been replaced by Sebata EMS which will enforce segregation and thus employing the service provider to make changes to an outgoing system would be fruitless.

The municipality should ensure that any problems identified with the system are resolved so that the Sebata EMS is fully functional. The municipality should further make certain that the newly live system is used when making changes to the yearly tariffs. Lastly, the municipality should ensure that the service provider is not granted access to perform business activities on the system.

Managmenet agrees with the finding.

During review of the annual performance report for 2017/18 it was found that the targets for 8 of the 10 infrastructure projects to be implemented during the 2017/18

The accounting officer did not ensure that: • Projects were

• The accounting officer should ensure that projects have the

Management notes AG’s findings and recommendati

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financial year were not met. The following table reflects these projects and the performance thereof during the 2017/18 year: (Refer to the management report for more information).

approved and ready for implementation during the financial year• Projects were adequately planned for items such as water use licenses and funding arrangements between the different funding sources on projects were finalised• Implementation of projects was delayed due to contractors and panel of consultants not being finalised.

necessary approvals, as well as funding arrangements before projects are finalised for implementation • The accounting officer should ensure that the challenges with the appointment of contractors or panel of consultants are remedied speedily to prevent delays in the planned implementation of projects.

ons. AG indicated that the information on the above finding will be extracted from the SDBIP Q4 Report.

As previously reported, it was noted that the following clauses as required by COBIT 5 have been omitted from the service level agreements (SLA’s) held with Sebata, Payday and Mimecast:• Requirement for performance assessment reports to be sent to management on a periodic basis• Support and call logging procedures.

If formal performance assessment reports are not periodically submitted to the municipality by service providers this may result in management not being aware of deviations from minimum agreed upon service levels. Staff may not be following the correct procedures when logging calls or requesting support which could result in a delayed response by the service provider.

LeadershipThe municipality has appointed a consultant firm to develop IT governance policies and SLA management procedures, the procedures are awaiting approval from the Amajuba District Municipality Council.

SLA’s held with service providers should be updated to include all required information and relevant clauses. These SLA’s should thereafter be signed off by both parties and monitored to ensure that the terms of the agreements are being adhered to. Management should perform proactive monitoring of agreed upon action plans and provide adequate training to ensure audit findings are resolved.


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The Auditor General in his report for the 2017/18 financial year issued the municipality with a qualified opinion of its financial statements. With the input of the Audit Committee, Management has drafted and put an action plan to address the issues raised in the Auditor General’s report. With the support from KZN COGTA and Provincial Treasury as well as the Audit Committee, Management is confident that these issues will be fairly addressed as indicated in the action plan.

1. 3 Budget and Financial Performance This report is a summary of the main budget issues arising from the monitoring process. It compares the progress of the budget to the projections contained in the Service Delivery and Budget Implementation Plan (SDBIP).

The following categories provide a consolidated overview of the implementation of the budget of the municipality.

1.3.1 Operating revenue The following table is a summary of the 2018/19 budget (classified by main revenue source):

DESCRIPTION

CURRENT YEAR2018/2019

2018/2019

2018/2019

2018/2019

2018/2019 2018/2019

Original Budget

YTD BUDGET

YTD ACTUAL

Balance Available

Projected forecast

%

RECEIVED

TOTAL OPERATING REVENUE BUDGET

189 933 202 94 966 601 187 893

855 2 039 346 245 035 794 99%

DC25 Amajuba - Financial Performance (revenue and expenditure)

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DESCRIPTION

CURRENT YEAR

2018/2019 2018/2019 2018/2019 2018/2019

Original Budget

YTD ACTUAL

Balance Available

Projected forecast

REVENUE PER SOURCE

Water Sales 23 225 251

10 837 131 12 388 120

21 674 263

Sanitation Sales 5 240 436

2 349 245 2 891 191

4 698 490

Interest on Overdue Account 4 083 654

2 905 993 1 177 661

5 811 987

Interest on Debtors:Sewerage - 359 -359 718

Interest Earned-Ext Invest 4 551 860

2 215 622 2 336 238

4 431 243

Equitable Share-FBS Portion 148 705 000

111 528 000 37 177 000

148 705 000

Finance Management Grant; 1 570 000

1 354 149 215 851

1 570 000

ROAD ASSET MANAGEMENT SYSTEM - 74 195 -74 195

148 390

Operating Grants -PPE-MIG; - 55 509 338 -55 509 338

55 509 338

EPWP -Publicworks Grant; 1 620 000

886 640 733 360

1 620 000

Tele/Cellphone Cost Recovered 5 000 - 5 000 -

Tender Deposits 100 000 - 100 000 -

Sundry Income 2 000

4 713 -2 713 9 425

Rental facilities-Hall Hire 250 000

8 900 241 100 17 800

Skills Development Grant ; 180 000

89 135 90 865

178 270

Shared Services Grant -DPSS 400 000 - 400 000

400 000

Atmospheric Emmission LicencE - 130 435 -130 435

260 870

TOTAL DIRECT OPERATING INCOME 189 933 202

187 893 855 2 039 346

245 035 794

Table 1: table C4 – Monthly Budget Statement – Financial Performance (Revenue and Expenditure

DC25 Amajuba - Table C4 Monthly Budget Statement - Financial Performance (revenue and expenditure) - M06 December

Description Ref

2017/18 Budget Year 2018/19

Audited Outcom

e

Original

Budget

Adjusted

Budget

Monthly

actual

YearTD

actual

YearTD

budget

YTD varianc

e

YTD varianc

eFull Year Forecast

R thousands %

Revenue By Source Property rates – Service charges - electricity

revenue –Service charges - water revenue 23 494 23 225 – 1 849 10 837 11 613 (775) -7% 23 225

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Service charges - sanitation revenue 5 479 5 240 – 484 2 349 2 620 (271) -10% 5 240

Service charges - refuse revenue – –Service charges - other – – – – – – – –Rental of facilities and equipment 283 250 – – 9 125 (116) -93% 250Interest earned - external

investments 4 709 4 552 – 414 2 216 2 276 (60) -3% 4 552Interest earned - outstanding

debtors 4 166 4 084 – 523 2 906 2 042 864 42% 4 084Dividends received – –Fines, penalties and forfeits 1 677 – –Licences and permits – –Agency services – –

Transfers and subsidies 226 903152 295 – 65 377

169 352 76 148 93 205 122% 152 295

Other revenue 274 287 – 3 225 144 81 57% 287Gains on disposal of PPE –

Total Revenue (excluding capital transfers and contributions)

266 984 189 933

– 68 651 187 894

94 967 92 927 98% 189 933

It should be noted that the figures for service charges for water and sanitation relate to billed income and not cash collected. The payment rate for the municipality for the first six months of the financial year averaged 41%.

Revenue generated from water and sanitation service charges forms a small percentage of the revenue of the municipality. A significant portion of the revenue of the municipality comes from grants and subsidies notably equitable share and levy replacement grant. The above table excludes revenue foregone arising from discounts and rebates associated with the tariff policies of the municipality.

The approved operating revenue budget amounts to R189 933 202 million. For the period under review the planned target is R 94 966 601 million and the actual revenue earned to date is R187 893 855 million. When comparing the planned against the actual revenue, an over-performance of 98% is shown. This is mainly due to that transfers recognised from Conditional Grant Revenue in the Income statement are reconciled monthly instead at the end of the Financial year

Reasons for major variances between planned and actual revenue earned: Revenue from water and sanitation service charges is above anticipated since we are now getting a clearer picture of the customers we serve. There are however other issues to be addressed around the quality of data in our billing system. Operational grants received are higher than anticipated due to the recognition of Conditions met on Conditional grants received are reconciled and transferred monthly in the Income statement.

The chart 1. Operating Revenue below depicts how municipality is performing in terms of revenue on monthly basis.

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1.3.2 Operating Expenditure

The following table is a summary of the 2018/19 budget (classified by main expenditure types):

DESCRIPTION

CURRENT YEAR

2018/2019 2018/2019 2018/2019 2018/2019 2018/2019 2018/2019

Original Budget

YTD BUDGET

YTD ACTUAL

Balance Available

Projected forecast

%

RECEIVED TOTAL OPERATING EXPENDITURE BUDGET 223 459 751 111 729 876 102 933 091 120 526 660 205 866 182 46%

DESCRIPTION CURRENT YEAR

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Billed Revenue; 16092369.9; 9%

Interest on In-vestment;

2215621.67; 1%

Grants and Subdidies; 169352322.14; 90%

Otrher Income; 233541.69; 0%

Billed RevenueInterest on InvestmentGrants and SubdidiesOtrher Income

2018/2019 2018/2019 2018/2019 2018/2019 2018/2019 Original Budget

MNT ACTUAL YTD ACTUAL

Balance Available

Projected forecast

EXPENDITURE PER CATERGORY

Salaries , Wages & Allowances 86 824 590 7 037 674 41 253 244 45 571 345 82 506 489

Renumeration of Councillors 5 685 460 460 447 3 260 689 2 424 771 6 521 378

Depreciation 33 178 215 2 764 851 16 589 108 16 589 107 33 178 216

Repairs & Maintenance 11 287 533 1 107 456 2 923 907 8 363 625 5 847 814

Bulk Water Purchases 17 263 000 1 429 486 7 158 768 10 104 232 14 317 536

Contracted Services 17 013 968 718 297 9 115 757 7 898 211 18 231 514

Operating Grants Expenditure - -

General Costs-Other 36 829 920 2 565 109 16 190 315.15 20 631 112 32 380 630

- -

TOTAL DIRECT OPERATING EXPENDITURE 208 082 686 16 083 320 96 491 788 111 582 405 192 983 577

Contributions to capital 348 000 - 24 763 323 237 348 000

Contributions to funds 14 265 065 2 841 972 6 000 975 8 264 090 14 265 065

Interest -External Loans 764 000 - 415 565 348 435 764 000

-

TOTAL OPERATING EXPENDITURE 223 459 751 18 925 292 102 933 091 120 518 168 208 360 642

DC25 Amajuba - Table C4 Monthly Budget Statement - Financial Performance (revenue and expenditure) – Mid Year Assessment

Description Ref

2017/18 Budget Year 2018/19

Audited Outco

me

Original

Budget

Adjusted

Budget

Monthly

actual

YearTD

actual

YearTD

budget

YTD varian

ce

YTD varian

ceFull Year Forecast

R thousands %

Expenditure By Type

Employee related costs 98 232 86 825 7 038 41 253 43 412 (2 159) -5% 86 825

Remuneration of councillors 5 134 5 685 460 3 261 2 843 418 15% 5 685

Debt impairment 11 698 13 000 2 842 6 001 6 500 (499) -8% 13 000

Depreciation & asset impairment 22 379 33 178 2 765 16 589 16 589 0 0% 33 178

Finance charges 993 764 4 847 382 465 122% 764

Bulk purchases 18 052 17 263 1 429 7 159 8 632 (1 473) -17% 17 263

Other materials – – –

Contracted services 21 485 17 014 718 9 116 8 507 609 7% 17 014

Transfers and subsidies – – – –

Other expenditure 57 741 49 731 3 668 18 707 24 865 (6 158) -25% 49 731

Loss on disposal of PPE – – – –

Total Expenditure 235 714223 460 – 18 925

102 933

111 730 (8 797) -8% 223 460

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The approved operating expenditure budget amounts to R223 459 751 million. For the period under review the planned target is R111 729 876 million and the actual expenditure to date is R 102 933 091 million.

When comparing the planned against the actual expenditure, an under-expenditure of 8% is shown. When comparing the original budget against the actual expenditure, 46 % expenditure has been expended.

Reasons for major variances between planned and actual expenditure incurred:

1. The Councillor renumeration budget will have to be increased due to the Upper Limits for Councillors Notice 42134 dated 21 December 2018 which amount to +\- R 6 434 238.80.

2. Over-expenditure on salaries and wages for Municipal Officials has been overspent by 5% when comparing actual to anticipated YTD budget. The root cause of this is mainly due to overtime, standby and Shift allowances

3. Bulk purchases reflect an under expenditure when compared to the target due to the department of Water Affairs delaying the submission of invoices for raw water purchase.

4. The expenditure on other expenditure is under- spent as compared to the target because some programs were suspended, and budget diverted to other essential services such as water delivery.

The chart 2: Operating Expenditure below depicts how municipality is performing in terms of expenditure on monthly basis. Operating Expenditure per month amounts to R15 133 million and monthly Budget amounts to R17 470, we are well within the budgeted parameters for this Quarter.

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July August September October November December -

2,000,000 4,000,000 6,000,000 8,000,000

10,000,000 12,000,000 14,000,000 16,000,000 18,000,000 20,000,000

OPERATING EXPENDITURE

BUDGET ACTUAL

1.3.3 Councillors and staff remuneration

Table 2 below gives a breakdown of Councillors and staff remuneration

DC25 Amajuba - Supporting Table SC8 Monthly Budget Statement - councillor and staff benefits - Mid Year Assement

Summary of Employee and Councillor remuneration Ref

2017/18 Budget Year 2018/19

Audited Outcome

Original Budget

Adjusted

BudgetMonthly actual

YearTD actual

YearTD budget

YTD varianc

eYTD

varianceFull Year Forecast

R thousands %

1 A B C DCouncillors (Political Office Bearers plus Other)

Basic Salaries and Wages 5 174 5 685 460 3 261 2 843 418 15% 5 685

Other benefits and allowances –

Sub Total - Councillors 5 174 5 685 – 460 3 261 2 843 418 15% 5 685% increase 4 9.9% 9.9%

Senior Managers of the Municipality 3

Basic Salaries and Wages 7 076 5 146 406 1 123 858 265 31% 5 146

Performance Bonus 991 – – – –

Motor Vehicle Allowance – 19 29 – 29 #DIV/0!

Cellphone Allowance 108 108 9 23 18 5 29% 108

Housing Allowances –Sub Total - Senior Managers of Municipality 8 175 5 254 – 434 1 176 876 300 34% 5 254

% increase 4 -35.7% -35.7%

Other Municipal Staff

Basic Salaries and Wages 47 639 51 936 4 311 25 017 4 328 20 689 478% 51 936

Pension and UIF Contributions 6 618 7 154 591 2 946 596 2 350 394% 7 154

Medical Aid Contributions 3 191 3 890 312 1 549 324 1 225 378% 3 890

Overtime 4 114 6 408 449 2 795 534 2 261 423% 6 408

Performance Bonus 3 963 4 309 – – 359 (359) -100% 4 309

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Motor Vehicle Allowance 5 085 5 184 447 2 399 432 1 967 455% 5 184

Cellphone Allowance 585 551 46 (46) -100% 551

Housing Allowances 490 582 33 163 48 114 236% 582

Other benefits and allowances 2 439 1 556 461 5 208 130 5 078 3915% 1 556

Payments in lieu of leave –

Long service awards 163 (163) -100%

Sub Total - Other Municipal Staff 74 125 81 571 – 6 604 40 077 6 960 33 117 476% 81 571% increase 4 10.0% 10.0%

Total Parent Municipality 87 473 92 510 – 7 499 44 513 10 679 33 835 317% 92 510 5.8% 5.8%TOTAL SALARY, ALLOWANCES & BENEFITS 87 473 92 510 – 7 499 44 513 10 679 33 835 317% 92 510

% increase 4 5.8% 5.8%

TOTAL MANAGERS AND STAFF 82 299 86 825 – 7 038 41 253 7 836 33 417 426% 86 825

The following Charts 3. depicts salaries and allowances trends per month averaging to R7 418 million per month.

July August September October November December 6,200,000

6,400,000

6,600,000

6,800,000

7,000,000

7,200,000

7,400,000

7,600,000

7,800,000

8,000,000

8,200,000

BUDGET ACTUAL

EXPENDITURE PER DEPARTMENT

DEPARTMENT

CURRENT YEAR 2018/2019 2018/2019 2018/2019 2018/2019

Original Budget

YTD ACTUAL

Balance Available % SPENT

MAYOR AND COUNCILLORS 6 090 910 3 449 554 2 641 356 57%MUNICIPAL MANAGER 13 430 474 4 928 121 8 502 353 37%FINANCIAL SERVICES(BTO) 19 141 805 12 702 674 6 439 131 66%CORPORATE SERVICES(HUMAN RESOURCES) 34 543 495 12 101 158 22 442 338 35%

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COMMUNITY SERVICES -SOCIAL DEVELOPMENT 6 880 518 3 708 332 3 172 186 54%ENVIRONMENTAL HEALTH 3 898 018 1 538 146 2 359 872 39%TECHNICAL SERVICES(PMU) 10 893 957 4 897 103 5 996 855 45%DISASTER MANAGEMENT SERVICES 5 696 178 2 479 664 3 216 514 44%TOUSONG SERVICES(HALLS AND FACILITIES 856 776 387 579 469 197 45%PLANNING AND DEVELOPMENT 14 844 502 8 489 014 6 355 488 57%WSA -WATER AND SANITATION 107 183 117 48 251 747 58 931 371 45% 223 459 751 102 933 091 120 526 660 46%

INCOME PER DEPARTMENT

DEPARTMENT

CURRENT YEAR 2018/2019 2018/2019 2018/2019 2018/2019

Original Budget

YTD ACTUAL

Balance Available % SPENT

MAYOR AND COUNCILLORS 6 090 910 6 090 910 -0 100%MUNICIPAL MANAGER 13 430 474 - - 0%FINANCIAL SERVICES(BTO) 19 141 805 16 492 429 2 549 377 86%CORPORATE SERVICES(HUMAN RESOURCES) 34 543 495 34 447 633 95 862 100%COMMUNITY SERVICES -SOCIAL DEVELOPMENT 6 880 518 6 639 418 241 100 96%ENVIRONMENTAL HEALTH 3 898 018 - - 0%TECHNICAL SERVICES(PMU) 10 893 957 65 744 130 -54 850 173 603%DISASTER MANAGEMENT SERVICES 5 696 178 5 696 178 -0 100%TOUSONG SERVICES(HALLS AND FACILITIES 856 776 856 776 0 100%PLANNING AND DEVELOPMENT 14 844 502 14 574 937 400 000 98%

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MAYOR AND COUNCILLORS

MUNICIPAL MANAGER

FINANCIAL S

ERVICES(BTO)

CORPORATE SERVICES(HUMAN RESOUR...

COMMUNITY SERVICES -SOCIAL D

EVELO...

ENVIRONMENTAL HEALT

H

TECHNICAL SERVICES(PMU)

DISASTER MANAGEMENT SERVICES

TOUSONG SERVICES(HALLS

AND FACILI...

PLANNIN

G AND DEVELOPMENT

WSA -WATER AND SANITATIO

N -

20,000,000

40,000,000

60,000,000

80,000,000

100,000,000

120,000,000 EXPENDITURE PER DEPARTMENT

BUDGETEXPENDITURE

WSA -WATER AND SANITATION 73 656 568 37 351 445 36 305 123 51% 189 933 202 187 893 855 -15 258 711 99%

1.3.3 Capital Programmes

DESCRIPTION

CURRENT YEAR 2018/2019 2018/2019 2018/2019 2018/2019 2018/2019 2018/2019

Original Budget YTD BUDGET YTD

ACTUALBalance

AvailableProjected forecast

%

RECEIVEDCAPITAL REVENUE BUDGET

127 206 000 63 603 000 70 944 000 56 262 000 141 888 000 56%

CURRENT YEAR 48 | P a g e

MAYOR AND COUNCILLORS

MUNICIPAL MANAGER

FINANCIAL S

ERVICES(BTO)

CORPORATE SERVICES(HUMAN RESOURCES)

COMMUNITY SERVICES -SOCIAL D

EVELOPMENT

ENVIRONMENTAL HEALT

H

TECHNICAL SERVICES(PMU)

DISASTER MANAGEMENT SERVICES

TOUSONG SERVICES(HALLS

AND FACILITIES

PLANNIN

G AND DEVELOPMENT

WSA -WATER AND SANITATIO

N -

10,000,000

20,000,000

30,000,000

40,000,000

50,000,000

60,000,000

70,000,000

80,000,000 REVENUE PER DEPARTMENT

BUDGETINCOME

CAPITAL EXPENDITURE BUDGET

127 206 000 63 603 000 48 544 261 78 661 739 97 088 523 38%

The following table is a summary of the 2018/19 capital budget (classified by directorate): DC25 Amajuba - Capital Expenditure

DC25 Amajuba - Table C5 Monthly Budget Statement - Capital Expenditure (municipal vote, functional classification and funding) – Mid-Term Assessment

Vote Description Ref

2017/18 Budget Year 2018/19Audited Outcom

eOriginal Budget

Adjusted

Budget

Monthly

actual

YearTD

actual

YearTD

budget

YTD varianc

e

YTD varianc

eFull Year Forecast

R thousands 1 % Single Year expenditure appropriation 2 Finance and Administration _Budget and Treasury Office – 150 – 9 47 75 (28) -38% 150 Finance and Administration_Corporate Services 1 626 198 – – 48 99 (51) -52% 198

Trading Services Services_Other 346 803 126 858 – 15 206 55 584 63 429 (7 845) -12% 126 858

Total Capital single-year expenditure 4 348 429 127 206 – 15 214 55 678 63 603 (7 925) -12% 127 206

Total Capital Expenditure 348 429 127 206 – 15 214 55 678 63 603 (7 925) -12% 127 206 Capital Expenditure - Functional Classification

Governance and administration 1 626 348 – 9 95 174 (79) -46% 348Executive and council –

Finance and administration 1 626 348 9 95 174 (79) -46% 348

Internal audit –

Trading services 346 803 126 858 – 15 206 55 584 63 429 (7 845) -12% 126 858Energy sources –

Water management 346 803 126 858 15 206 55 584 63 429 (7 845) -12% 126 858Total Capital Expenditure - Functional Classification 3 348 429 127 206 – 15 214 55 678 63 603 (7 925) -12% 127 206

The approved capital expenditure budget amounts to R127 206 million. For the period under review the planned target is R63 603 million and the actual expenditure to date is R55 678 million which includes vat. On the General ledger the Vat is not capitalized as it is treated as own revenue which is utilized for operating service delivery programs.

When comparing the planned against the actual expenditure, an under performance of 12% is shown. It must be noted that capital projects are being fast tracked to ensure that allocations are fully spent by the end of the financial year. The municipality must carefully monitor the situation as this could lead to service delivery challenges as National Treasury will not hesitate to recover any unspent conditional grants from the municipality’s equitable share allocation.

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The following graph indicates the spending pattern per month

July August September October November December -

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

14,000,000

16,000,000

CAPITAL EXPENDITURE

BUDGET ACTUAL

1.3.4. DETAILED CAPITAL BUDGET

CAPITAL PROJECTS

CURRENT YEAR 2018/2019 2018/2019 2018/2019 2018/2019

Original Budget RECEIVED TO DATE

YTD ACTUAL

Balance Available

CAPITAL EXPENDITURE IDP-GRANT FUNDED PROJECTS MIG GRANT FUNDING PROJECTSMIG PMU admin cost 453 000 26 000 000 56 448 396 552EMANDLANGENI SANITATION-MIG; 2 000 000 2 000 000Goedehoop bulk water and sanitation 10 000 000 351 034 9 648 966Danhauser Housing Development Bulk Water and Sanitation 10 000 000 1 023 063 8 976 937Buffalo Flats Water Supply Scheme Phase 3B 14 500 000 16 964 329 -2 464 329Amajuba Disaster Management Centre Phase 2 3 300 000 3 300 000 2 102 359 -2 102 359SUB TOTAL 40 253 000 26 000 000 20 497 234 19 755 766

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WSIG GRANT FUNDED PROJECTSEmxhakeni reticulation water scheme is an extension of existing water reticulation scheme to serve 500 households 1 000 000.00 1 000 000Pipeline extension and infrastructure in Skobharen and Alcockspruit 35 000 000.00 43 400 000

20 960 10814 039 892

Construction of vip toilets in Dannhauser 5 000 000.00 3 040 326 1 959 674Refurbishment of DNC WWTP,Tweediedale and Utrecht WTP 4 000 000.00 4 000 000Refurbishment and upgrade of Durnacol Water Treatment Works in Dannhauser 12 000 000.00

3 877 7078 122 293

Construction of Brakfontein resevoir 15 000 000.00 15 000 000

Upgrade of Citicall system 5 000 000.00 5 000 000Ermegency water supply to Ramaphosa,skobharen and 2 megalitre reservoir at Hilltop - Emadlangeni LM 5 000 000.00 5 000 000Dannhauser Borehole Refurbishment Program 2 400 000.00 2 400 000 SUB TOTAL 84 400 000 43 400 000 27 878 142 56 521 859

ROAD TRANSPORT & PUBLICWORKS PROGRAMME PROJECTSROAD ASSET MANAGEMNET GRANT 2 205 000 1 544 000 74 195 2 130 805

SUB TOTAL 2 205 000 1 544 000 74 195 2 130 805 126 858 000 70 944 000 48 449 570 78 408 430 OPERATING CAPITAL -CONTRIBUTIONS FROM OWN REVENUE Office Furniture & Equipment-Corporate Services 198 000 46 752 151 248Office Furniture & Equipment-Financial services 150 000 47 940 102 060 TOTAL 348 000 - 94 691 253 309 127 206 000 70 944 000 48 544 261 78 661 739

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It must be noted that capital projects are being fast tracked to ensure that allocations are fully spent by the end of the financial year. The municipality must carefully monitor the situation as this could lead to service delivery challenges as National Treasury will not hesitate to recover any unspent conditional grants from the municipality’s equitable share allocation.

1.3.4.1. The municipality has budget R 127 206 000 million for Capital Projects. 1.3.4.2. There has been R48 544 261 million expenditure on our capital projects for the Quarter ended 31st December 2018 which represents 38% of our Capital Budget.

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.3.4 Capital funding by source

DESCRIPTION

CURRENT YEAR 2018/2019 2018/2019 2018/2019 2018/2019 2018/2019 2018/2019

Original Budget YTD BUDGET YTD

ACTUALBalance

AvailableProjected forecast

%

RECEIVEDCAPITAL REVENUE BUDGET

127 206 000 63 603 000 70 944 000 56 262 000 141 888 000 56%

DC25 Amajuba - Capital Expenditure (municipal vote, standard classification and funding) Our capital budget is almost entirely funded from grants. This means that we depend on Provincial and National government to fund our service delivery initiatives.

Capital Grants were also received from national government which is Rural Asset Management Grant (RRAMS), Municipal Infrastructure(MIG) Grant and Water Systems Infrastructure Grant(WSIG)

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Table 4: GRANTS RECEIVED BY THE MUNICIPALITY TO DATE

GAZETTED GOVERNMENT GRANT ALLOCATION 2018-2019-2020/21

Current Year Medium Term Revenue and

Expenditure Framework

Budget

Year Received Actual Balance

% spen

t

GOVERNMENT GRANTS & SUBSIDIES - ALLOCATIONS 2018/19 2018/19 SPENT BALANCE %

R'000 R'000 R'000 R'000R'00

0National Grant Allocations 1 1. Municipal Infrastructure Grant 40 253 000 26 000 000 20 497 234 19 755 766 51%2. Municipal Systems Improvement Grant(Allocations in Kind) - 0%3. Financial Management Grant 1 570 000 1 570 000 2 314 279 -744 279 147%

4. Equitable Share 71 070 000111 528

000 102 933 091 -31 863 091 145%5. RSC Levies Replacement 77 635 000 77 635 000 0%7.Municipal Water Infrastructure Grant 84 400 000 43 400 000 27 878 142 56 521 859 33%8.Expanded Public Works Programme incentive Grant 1 620 000 1 134 000 884 306 735 694 55%9.Rural Transport and Infrastructure 2 205 000 1 544 000 74 195 2 130 805 3%10.Rural Households Infrastructure Grant - 0%11.Energy Efficiency and Demand Side Management Grant - 0%

Sub Total - National Grant Allocations278 753

000185 176

000 154 581 246124 171

754 55%Provincial Grant Allocations 2 12.Development Planning Shared Services 400 000 400 000 400 000 -13.Growth and Development Summit 120 224 -120 224 -

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Sub Total - Provincial Grant Allocations 400 000 400 000 120 224 279 776 -

TOTAL GRANT ALLOCATIONS279 153

000185 576

000 154 701 470124 451

530 55%

OUTSTANDING DEBTORS AS AT 31 DECEMBER 2018

DC25 Amajuba - Supporting Table SC3 Monthly Budget Statement - aged debtors - Mid-Term AssessmentDescription Budget Year 2018/19

R thousands

NT Code

0-30 Days

31-60 Days

61-90 Days

91-120 Days

121-150 Dys

151-180 Dys

181 Dys-1

YrOver 1Yr Total

Total over 90 days

Actual Bad Debts Written Off against Debtors

Impairment - Bad Debts i.t.o Council Policy

Debtors Age Analysis By Income Source

Trade and Other Receivables from Exchange Transactions - Water 1200 2 589 1 621 1 529 1 451 1 225 1 106 9 422 31 107 50 049 44 311

Trade and Other Receivables from Exchange Transactions - Electricity 1300 – – – – – – – – – –

Receivables from Non-exchange Transactions - Property Rates 1400 – – – – – – – – – –

Receivables from Exchange Transactions - Waste Water Management 1500 691 587 545 531 437 399 3 268 10 472 16 929 15 106

Receivables from Exchange Transactions - Waste Management 1600 – – – – – – – – – –

Receivables from Exchange Transactions - Property Rental Debtors 1700 – – – – – – – – – –

Interest on Arrear Debtor Accounts 1810 – – – – – – – – – –Recoverable unauthorised, irregular, fruitless and wasteful

expenditure 1820 – – – – – – – – – –

Other 1900 17 17 17 17 17 17 103 1 893 2 098 2 046

Total By Income Source 2000 3 297 2 225 2 091 1 998 1 679 1 522 12 793 43 472 69 076 61 464 – –2017/18 - totals only – –Debtors Age Analysis By Customer Group

Organs of State 2200 1 072 261 185 140 131 124 822 1 965 4 700 3 182

Commercial 2300 178 133 118 121 95 85 629 1 505 2 863 2 434

Households 2400 2 047 1 831 1 788 1 738 1 452 1 310 11 341 39 988 61 496 55 830

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Other 2500 0 0 0 0 0 0 1 14 15 14

Total By Customer Group 2600 3 297 2 225 2 091 1 998 1 679 1 519 12 793 43 472 69 073 61 461 – –

0 - 30 31 - 60 61 - 90 91 - 120 121 - 150 151 - 180 181 - 365 >365 Total

Debtors by Income Source

Water 2 588 658.851 620

567.761 528

700.321 450

659.311 225

101.511 102

637.02 9 422 347.3331 107 423.39 50 046 095.49

Sewerage 691 148.72 586 932.11 545 014.71 530 532.95 436 584.97 399 478.94 3 267 632.8710 471 927.61 16 929 252.88

Other 17 238.65 17 244.74 16 867.23 16 884.11 16 889.00 16 893.98 102 818.19 1 892 751.01 2 097 586.91

Total 3 297 046.222 224

744.612 090

582.261 998

076.371 678

575.481 519

009.9412 792 798.39

43 472 102.01 69 072 935.28

Debtors by Customer Classification

Government 1 071 848.52 261 167.78 184 561.75 139 503.83 131 492.76 124 162.05 821 758.44 1 965 044.20 4 699 539.33

Business 177 662.07 132 630.45 118 382.99 120 527.77 94 542.93 84 804.01 629 124.82 1 505 341.18 2 863 016.22

Households 2 047 427.441 830

838.191 787

531.741 737

938.991 452

434.011 309

938.1011 341 273.22

39 988 200.64 61 495 582.33

Other 108.19 108.19 105.78 105.78 105.78 105.78 641.91 13 515.99 14 797.40

Total 3 297 046.222 224

744.612 090

582.261 998

076.371 678

575.481 519

009.9412 792 798.39

43 472 102.01 69 072 935.28

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DEBTORS PAYMENT RATIO

DEBTORS PAYMENT RATIO

Payment ratio

Month Water Sewer Interest Corrections Total invoiced Payments TotalJun-17 2 759 619.17 651 325.96 449 991.39 -369 636.85 3 491 299.67Jul-18 1 405 343.83 346 217.94 459 932.28 41 130.29 2 252 624.34 2 616 481.16 -363 856.82 74.94%

Aug-18 2 107 939.20 402 021.52 466 851.63 -73 961.35 2 902 851.00 1 416 747.82 1 486 103.18 62.89%Sep-18 2 177 210.34 442 849.05 484 302.73 -214 293.58 2 890 068.54 330 175.98 2 559 892.56 11.37%Oct-18 2 297 751.07 523 636.96 487 095.47 -84 944.38 3 223 539.12 2 440 623.16 782 915.96 84.45%Nov-18 2 254 303.00 503 965.63 509 367.91 -138 914.53 3 128 722.01 1 542 847.39 1 585 874.62 47.86%Dec-18 2 138 130.53 561 001.11 524 104.58 -25 263.50 3 197 972.72 1 269 298.62 1 928 674.10 40.57%Total 12 380 677.97 2 779 692.21 2 931 654.60 -496 247.05 17 595 777.73 9 616 174.13 7 979 603.60

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JULY AUGUST SEPTEMBER OCTOBER NOVEMBER DECEMBER -

10,000,000

20,000,000

30,000,000

40,000,000

50,000,000

60,000,000

DEBTORS AGE ANALYSIS BY INCOME SOURCE

WaterSewerageOtherSeries4

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1.3.5 Cash flow statement This statement, Table 5, below, reflects the actual cash that was received and spent by the municipality. DC25 Amajuba - Cash Flow

DC25 Amajuba - Table C7 Monthly Budget Statement - Cash Flow - Mid-Year Assessment

Description Ref2017/18

Budget Year 2018/19

Audited Outcom

eOriginal Budget

Adjusted

Budget

Monthly

actualYearTD actual

YearTD budget

YTD varianc

e

YTD varianc

eFull Year Forecast

R thousands 1 % CASH FLOW FROM OPERATING ACTIVITIES Receipts

Service charges 15 079 17 079 1 253 10 008 8 540 1 468 17% 17 079

Other revenue 11 458 537 1 473 8 988 269 8 719 3247% 537

Government - operating 134 948 152 295 49 568114 232 76 148 38 085 50% 152 295

Government - capital 91 041 126 858 14 000 37 544 63 429 (25 885) -41% 126 858

Interest 6 524 7 002 594 4 097 3 501 596 17% 7 002

Payments

Suppliers and employees (182 216)

(222 696)

(14 503)

(95 598)

(111 348) (15 749) 14% (222 696)

Finance charges (764) (764) – (764) (382) 382 -100% (764)

Transfers and Grants – – –NET CASH FROM/(USED) OPERATING ACTIVITIES 76 070 80 312 – 52 385 78 506 40 156 (38 350) -96% 80 312 CASH FLOWS FROM INVESTING ACTIVITIES

Receipts

Proceeds on disposal of PPE –

Payments

Capital assets (91 150)(127 206)

(15 214)

(55 678) (63 603) (7 925) 12% (127 206)

NET CASH FROM/(USED) INVESTING ACTIVITIES (91 150)

(127 206) –

(15 214)

(55 678) (63 603) (7 925) 12% (127 206)

CASH FLOWS FROM FINANCING ACTIVITIES

Receipts

Short term loans –

Payments

Repayment of borrowing –NET CASH FROM/(USED) FINANCING ACTIVITIES – – – – – – – – NET INCREASE/ (DECREASE) IN CASH HELD (15 080) (46 894) – 37 170 22 828 (23 447) (46 894)

Cash/cash equivalents at beginning: 17 990 67 983 – 67 983

Cash/cash equivalents at month/year end: 2 909 (46 894) – 90 811 (23 447) 21 088

A summary of the cash flow for the year is reflected in the table above.

1.3.5.1 The total cash received includes cash received for operating activities such as grants, water and sanitation services, rental of facilities and other general income.

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The CFS report for 31 December 2018 indicates a closing balance (cash and cash equivalents) of R90 813 557 which comprise of the following:

Bank balance and cash = R 7 498 094 Investment Balance= R 83 312 463 Petty Cash= R 3 000 Cash Available = R 90 813 557

As at the end of 31 December 2018 the Municipality had R90 813 557 cash available.

The Cash Coverage Ratio is 1 month against the norm is 1 to 3 months.

Cash / Cost Coverage Ratio (Excl. Unspent Conditional Grants)

((Cash and Cash Equivalents - Unspent Conditional Grants - Overdraft) + Short Term Investment) / Monthly Fixed Operational Expenditure excluding (Depreciation, Amortisation, Provision for Bad Debts, Impairment and Loss on Disposal of Assets)

Statement of Financial Position, Statement of Financial Performance, Notes to the AFS, Budget, In year Reports and AR

1 - 3 Months

2.74 MonthsCash and cash equivalents 7 501 094Unspent Conditional Grants 50 967 812Overdraft

Short Term Investments 83 312 463

Total Annual Operational Expenditure

14 575 373

Please note that this Cost Coverage Ratio is based on MFMA Circular No 71, who formulated this model based on the fact that creditors are paid within 30 days.

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The below Cash Coverage Ratio does take into account unspent conditional grants and other outstanding creditors.

Cash / Cost Coverage Ratio (Excl. Unspent Conditional Grants)

((Cash and Cash Equivalents - Unspent Conditional Grants - Outstanding Creditors) + Short Term Investment) / Monthly Fixed Operational Expenditure excluding (Depreciation, Amortisation, Provision for Bad Debts, Impairment and Loss on Disposal of Assets)

Statement of Financial Position, Statement of Financial Performance, Notes to the AFS, Budget, In year Reports and AR

1 - 3 Months

0.50 MonthCash and cash equivalents 7 501 094Unspent Conditional Grants 50 967 812

Outstanding Creditors 32 659 646

Short Term Investments 83 312 463

Total Annual Operational Expenditure

14 575 373

The Cash Coverage Ratio is 0 Days s against the norm is 1 to 3 months, indicating that the municipality is not financially viable, and it will not continue to exist if it does not receive revenue for even one month.

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1.3.5.2. Municipality has Short Term Investments which is invested by approved financial services providers and is as follows

INSTITUTION BALANCE INVESTEDWithdrawal Transfer INTEREST BALANCE INTEREST

2017/07/0

1in current year

capitalised paid

STD- 1 500 - - 49 1 549

Investec - 1 500 000 1 500 000 11 306 11 306

INVESTEC-Equitable share - - - - - -

STD-Equitable share - 29 000 000 29 312 273 312 273 0

STD-Equitable share 2 257 424 - - 73 836 2 331 261

STD-water operating Subsidy grant 685 068 - 617 876 3 504 70 696 -

INVESTEC-WSIG 3 160 853 - -(2 679 573) (13 806) 467 474 33 475

INVESTEC(WSIG)- 622 526 - - - 20 366 642 892 -

STD-WSIG2 61 607 - - 1 999 63 605 -

STD-WSIG2 14 760 126 10 000 000 24 436 745 401 069 724 450

INVESTEC-WSIG 18 842 478 33 400 000 10 277 838 (739 780) 943 09542 167

955

INVESTEC 34 779 - - 1 138 35 917

INVESTEC 1 216 723 23 400 000 1 216 934 - 105 99323 505

781

INVESTEC - 400 000 - 5 911 405 911

STD-Human Settlement 1 018 729 000 - - 7 115 737 133 -

STD 463 443 - - 15 158 478 601

STD-FMG 189 1 570 000 - 36 801 1 606 989 -

STD 1 163 236 - 38 047 1 201 284

INVESTEC-Rural Road 83 686 1 544 000 - 39 483 1 667 169

STD 51 113 - - 817 51 930

INVESTEC 271 251 - - - 6 661 277 912

INVESTEC-EPWP - 405 000 - - 9 638 414 638

STD-Disaster Centre Management 2 446 709 - - - 80 028 2 526 736 -

STD-Environment Grant 403 979 - - - 13 213 417 193 -

STD-Internal Operation 359 945 - - - 11 773 371 719 -

INVESTEC(MIG) - - - - - -

INVESTEC MIG 70 321 - - - 2 301 72 622

INVESTEC-MIG 5 797 - - - 5 797

STD-MIG 4 840 260 - 4 872 270 39 259 7 249

STD - 12 000 000 9 393 415 127 432 2 734 017

INVESTEC - - 3 419 353 3 419 353 - -

STD-Growth Summit 302 772 - - 9 903 312 676

TOTAL 52 106 805 113 948 000 85 046 704 - 2 304 36383 312

463 33 475

52 106 805 113 948 000 85 046 704 2 304 36383 312

463 33 475

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Table 5:INVESTMENT PORTFOLIO

DC25 Amajuba - Supporting Table SC5 Monthly Budget Statement - investment portfolio - Mid-Year Assessment

Investments by maturityName of institution & investment ID Re

f

Period of Investment

Type of Investment

Expiry date of

investment

Accrued interest for the month

Yield for the

month 1

(%)

Market value at

beginning of the month

Change in

market value

Market value at end of

the month

R thousands Yrs/Months

Municipality

ABSA BANK Months CALL – –

FIRST NATIONAL BANK Months FIXED – –

INVESTEC Months CALL 54 235 69 675

STANSARD BANK Months CALL 13 561 13 637

NEDBANK

Municipality sub-total – 67 796 – 83 312

TOTAL INVESTMENTS AND INTEREST 2 – 67 796 – 83 312

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PART 2: SERVICE DELIVERY AND BUDGET IMPLEMENTATION PLAN

2.1 Introduction

2.2 Performance Indicators

An analysis of the performance indicators per department reveals the following:

OFFICE OF THE MUNICIPAL MANAGER

Performance Targets Status Achieved Not Achieved Not Applicable Total

Number 13 30 6 49

Percentage 27% 61% 12% 100%

Conclusion and observation of the Accounting Officer

No indication of the monitoring and management of fraud and corruption by management; No clarity on the location of the Public Participation Unit; Poor attendance of IGR; Overall, the department achieved 27% of its targets by the 31st of December 2018.

Recommended Action

Matter of IGR attendance to be escalated to political/office bearers of the respective municipalities;

Public Participation to be in the Speaker’s Office;

FINANCIAL SERVICES


Number 16 13 5 34

Percentage 47% 38% 15% 100%


No indication of the Finance Interns in the SDBIP; No mention of the development and/or review of an Indigent Register in the SDBIP; and Overall, the department achieved 47% of its targets by the 31st of December 2018.

Recommended Action

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The department to consider the development of an Indigent Register and update it regularly.

CORPORATE SERVICES


Number 12 13 5 30

Percentage 40% 43% 17% 100%


The department was unable to manage Sebata (Service Provider) in ensuring that the EDMS system is functional; thereby assisting with the recording and safekeeping of documents;

The delay in the filling of the Director: Corporate Services post may destabilize the department.

Overall, the Corporate Services Department achieved 40% by the 31ST of December 2018.

Recommended Action

The department should ensure that the indicators are compliant with the SMART principles of Performance Management;

That, the planning process is undertaken simultaneously with the IDP and Budget process. This will ensure proper and proper planning that will ensure that the actual implementation of its targets commences on the 01st of July of each Financial Year;

That the targets dates for each target are congruent with all applicable pieces of legislation; e.g. submission of report in terms of the MFMA (2005);

To refrain from setting targets that are not within the control of the department; e.g. sitting of twelve meetings of Council per annum. Rather, the target should be to coordinate and submit twelve reports to Council by 30 June of the Financial Year;

The Head of Department should review the Performance reports of the Units

COMMUNITY SERVICES


Number 14 12 5 31

Percentage 45% 39% 16% 100%


The department should consider the separation of the programmes of provincial sector departments from those that are initiated by the municipality.

Some indicators are not clear (SMART); e.g. SDBIP Ref. 3.1.;

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No clarity on the programme to be implemented through the Operation Sukuma Sakhe Programme; and

That an overall, the achievement of the department stands at 45% as at the 31st of December 2018.

Recommended Action

Indicators to be revised to ensure compliance to SMART (PMS Principles).

PLANNING AND DEVELOPMENT SERVICES


Number 8 9 7 24

Percentage 33% 38% 29% 100%


No budget allocation for Local Economic Development; No indication of long- term planning for the district; Overall, the department achieved 33% of its targets by the 31st of December 2018.

Recommended Action

Department to consider sourcing funding from the national, provincial and private business to implement LED related programmes and projects;

That an effort should be made to improve the performance of the department; and The department to consider the development of a long-term planning programme.

ENGINEERING SERVICES


Number 10 9 3 22

Percentage 45% 41% 14% 100%


SCM process to be rolled out in advance and timeously; and Failure by contractors to be reported and punitive measures applied; Overall, the department achieved 45% of its targets by the 31st of December 2018.

Recommended Action

Improvement in the management of Service Providers; and That an effort should be made to improve the performance of the department.

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2.3 Overall Service Delivery Performance

Key Performance Areas (KPAs) Total

Number of KPIs

Achieved Not Achieved

Not Applicable

Basic Service Delivery (BSD) 20 6 10 4

Municipal Institutional Development and Transformation (MID&T) 31 12 14 5

Local Economic Development (LED) 14 2 11 1

Municipal Financial Viability and Management (MFV&M) 36 17 15 4

Good Governance and Public Participation (GG&PP) 77 35 32 10

Spatial Planning and Environment Management (SP&EM) 12 1 4 7

Total (number) 190 73 86 31

Total (percentage) 100% 38% 45% 16%

DC25 Amajuba - Supporting Table SC2 Monthly Budget Statement - performance indicators - Mid-Year Assessment

Description of financial indicator Basis of calculation Ref2017/18 Budget Year 2018/19

Audited Outcom

eOriginal Budget

Adjusted Budget

YearTD actual

Full Year Forecast

Borrowing Management

Capital Charges to Operating

ExpenditureInterest & principal paid/Operating Expenditure

0.4% 15.2% 0.0% 0.8% 2.9%

Borrowed funding of 'own' capital expenditure

Borrowings/Capital expenditure excl. transfers and grants

0.0% 0.0% 0.0% 0.0% 0.0%

Safety of Capital

Debt to Equity Loans, Accounts Payable, Overdraft & Tax Provision/ Funds & Reserves

18.9% 5.0% 0.0% 5.2% 5.0%

Gearing Long Term Borrowing/ Funds & Reserves

0.0% 0.0% 0.0% 0.0% 0.0%

Liquidity

Current Ratio Current assets/current liabilities 1 71.0% 187.6% 0.0% 288.4% 187.6%

Liquidity Ratio Monetary Assets/Current Liabilities 47.2% 39.2% 0.0% 151.8% 39.2%

Revenue Management

Annual Debtors Collection Rate (Payment Level %)

Last 12 Mths Receipts/ Last 12 Mths Billing

Outstanding Debtors to Revenue Total Outstanding Debtors to Annual 10.0% 28.2% 0.0% 42.8% 28.2%

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RevenueLongstanding Debtors Recovered Debtors > 12 Mths Recovered/Total

Debtors > 12 Months Old

0.0% 0.0% 0.0% 0.0% 0.0%

Creditors Management

Creditors System Efficiency % of Creditors Paid Within Terms (within MFMA s 65(e))

Funding of Provisions

Percentage Of Provisions Not Funded Unfunded Provisions/Total Provisions

Other Indicators

Electricity Distribution Losses % Volume (units purchased and generated less units sold)/units purchased and generated

2

Water Distribution Losses % Volume (units purchased and own source less units sold)/Total units purchased and own source

2

Employee costs Employee costs/Total Revenue - capital revenue

36.8% 45.7% 0.0% 22.0% 45.7%

Repairs & Maintenance R&M/Total Revenue - capital revenue 0.0% 0.0% 0.0% 0.0% 0.0%

Interest & Depreciation I&D/Total Revenue - capital revenue 8.8% 17.9% 0.0% 0.5% 3.4%

IDP regulation financial viability indicators

i. Debt coverage (Total Operating Revenue - Operating Grants)/Debt service payments due within financial year)

ii. O/S Service Debtors to Revenue Total outstanding service debtors/annual revenue received for services

iii. Cost coverage (Available cash + Investments)/monthly fixed operational expenditure

Overall, the Municipality achieved 48% as at 31ST of December 2018. Refer to Annexure B below for detailed performance information.

OVERALL CONCLUSION AND RECOMMENDATIONS In spite of the current financial challenges, the municipality has the potential to improve its performance financial by 30 June 2019; subject to the following:

Commitment by Councilors and management to implement and monitor the strategic and operational objectives of the municipality as set out in the approved IDP, Budget and SDBIP;

Council Committees’ to improve their oversight role; Improvement of the Public Participation and stakeholder involvement initiatives; Development of a system to hold external service providers to account on the agreed upon

terms and conditions; Improvement of the reporting and accountability system; and Regular management of risk;

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Considering the financial and performance assessment made based on the first six months of the financial year it is projected that an Adjustments Budget for the 2018/19 financial year is required and it be submitted to Council for approval and adoption during February 2019.

The performance of the municipality further suggests that revenue and expenditure for the financial year be revised in an Adjustment Budget for the various votes to reflect the additional revenues and to utilize the projected savings on expenditure among the different votes to allow for expected over expenditure.

It is therefore recommended:

1. That the mid-year budget and performance assessment as tabled be noted;

2. That the 2018/19 Annual Budget be adjusted during February 2019; and

3. That the mid-year budget and performance assessment report be submitted to the Mayor, the National and Provincial Treasury by 25 January 2019 as provided for by Sec 72 (1) (b) of the MFMA.

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PART 3 : SUPPORTING DOCUMENTATION

FINANCIAL POSITION ACTUAL

3.1 Financial Position (Table 6)DC25 Amajuba - Financial Position

DC25 Amajuba - Table C6 Monthly Budget Statement - Financial Position - Mid-Year Assessment

Description Ref2017/18 Budget Year 2018/19

Audited

OutcomeOriginal Budget

Adjusted Budget

YearTD actual

Full Year Forecast

R thousands 1

ASSETS Current assets

Cash 54 079 6 000 7 498 6 000

Call investment deposits 592 10 000 83 312 10 000

Consumer debtors 17 780 41 900 69 073 41 900

Other debtors 8 992 11 000 10 818 11 000 Current portion of long-term

receivables – 750 591 750

Inventory 839 7 000 1 186 7 000

Total current assets 82 282 76 650 – 172 478 76 650

Non current assets

Investment property

Investments in Associate 266 420 289 848 292 306 289 848

Property, plant and equipment 391 362 494 599 391 374 494 599

Intangible assets 3 474 1 000 3 474 1 000

Other non-current assets 1 826

Total non current assets 663 083 785 447 – 687 153 785 447 TOTAL ASSETS 745 364 862 097 – 859 631 862 097

LIABILITIES

Current liabilities

Bank overdraft

Borrowing 743 1 547 743 1 547

Trade and other payables 106 473 30 890 32 660 30 890

Provisions 8 709 8 419 26 407 8 419

Total current liabilities 115 924 40 856 – 59 810 40 856

Non current liabilities

Borrowing 7 360 8 193 7 528 8 193

Provisions 16 851 4 900 4 900

Total non current liabilities 24 212 13 093 – 7 528 13 093 TOTAL LIABILITIES 140 136 53 948 – 67 337 53 948

NET ASSETS 2 605 228 808 149 – 792 294 808 149

COMMUNITY WEALTH/EQUITY

Accumulated Surplus/(Deficit) 605 228 808 149 792 294 808 149

Reserves

TOTAL COMMUNITY WEALTH/EQUITY 2 605 228 808 149 – 792 294 808 149

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3.2 CREDITORS

Table 7. Monthly Creditors age analysis – Mid Year Assessment- 31st December 2018

DC25 Amajuba - Supporting Table SC4 Monthly Budget Statement - aged creditors - Mid-Year Assessment

Description NT Code

Budget Year 2018/19 Prior year totals for chart (same period)

0 - 30 Days

31 - 60 Days

61 - 90 Days

91 - 120 Days

121 - 150 Days

151 - 180 Days

181 Days -1 Year

Over 1Year Total

R thousands

Creditors Age Analysis By Customer Type

Bulk Electricity 0100 – – – – – – – – –

Bulk Water 0200 – – 1 644 – – – – 18 995 20 639

PAYE deductions 0300 – – – – – – – – –

VAT (output less input) 0400 – – – – – – – – –

Pensions / Retirement deductions 0500 – – – – – – – – –

Loan repayments 0600 – – – – – – – – –

Trade Creditors 0700 – 1 151 2 853 671 1 471 813 815 4 246 12 021

Auditor General 0800 – – – – – – – – –

Other 0900 – – – – – – – – –

Total By Customer Type 1000 – 1 151 4 497 671 1 471 813 815 23 241 32 660 –

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KEY OUTSTANDING CREDITORS PER SUPPLIER

NAME OF SUPPLIER DESCRIPTION OF SERVICE AMOUNT DATE OF INVOICE

AVES CYBER SECURITY (PTY) LTD FIREWALL AND ANTIVIRUS 84 473.42 2018/12/11

BIDVEST STEINER / BIDVEST SERVICES (PTY) LTD TOILETARY 16 426.46 2018/11/01

BIDVEST STEINER / BIDVEST SERVICES (PTY) LTD TOILETARY 16 426.46 2018/12/01

CONFIG SYSTEMS (PTY) LTD LAPTOPS 10 000.00 2018/11/30

EMADLANGENI LOCAL MUNICIPALITY ELECTRICITY APR16-MAR17 364 473.85 2016/04/30

EMADLANGENI LOCAL MUNICIPALITY ELECTRICITY DEC16-FEB17 274 069.84 2016/12/31

EMADLANGENI LOCAL MUNICIPALITY ELECTRICITY SEP16-NOV16 270 712.60 2016/09/30

EMADLANGENI LOCAL MUNICIPALITY ELECTRICITY APR16-AUG16 436 021.88 2016/04/30

EMADLANGENI LOCAL MUNICIPALITY ELECTRICITY APRIL17-JUNE17 -128.93 2017/04/30

ESKOM ELECTRICITY 75 507.18 2018/12/14



GONDWANA ENVIRONMENTAL SOLUTIONS INTERNATIONAL (PTY) LTD AIR QUALITY MANAGEMENT PLAN 217 350.00 2018/11/30

GREMONI CONTRACTORS (PTY) LTD SUPPLY AND DELIVERY OF PLUMBING PIPES, FITTINGS,TOOLS AND WATER METER 761 701.25 2018/12/18

HANKAI PEST CONTROL AND TRADING CC PEST CONTROL SERVICE 21 125.00 2018/10/24

JENNY INTERNET CC C03 FIBRE OVERWIRELESS 43 979.00 2018/12/01

KANTECH SERVICES (PTY) LTD TRADING AS KANTECH REPAIRS 54 600.07 2018/09/10



KANTECH SERVICES (PTY) LTD TRADING AS KANTECH DESLUDGE 31 094.90 2018/09/10

KDM SPORTS CC GOLFERS,T-SHIRTS 158 355.00 2018/12/05

KWAZULU-NATAL TRANSPORT REVENUE LICENSE FEE 31 410.00 2018/12/18

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LESOGO GLEN HALL DEPOSIT REFUND 2 000.00 2018/12/19

MAJUBA PROJECTS DUO (PTY) LTD T/A PG GLASS NEWCASTLE EXCESS ON INSURANCE CLAIM 673.82 2018/12/11

MARKET DEMAND TRADING 773 PTY LTD LICENSE FEE 28 226.52 2018/12/04

MARKET DEMAND TRADING 773 PTY LTD FIXED ASSET REGISTER COMPILATION 2018 402 202.15 2018/09/30

M-CHARLIE TRADING ENTERPRISE CC WATER TANKER SERVICE 295 447.00 2018/06/30








MI7 SECURITY INTELLIGENCE (PTY) LTD SECURITY SERVICE 138 000.00 2018/11/30

MILLIMAGIC TRADING ENTERPRISE FRIDGE, STOVE,MEAT CUTTER 5 500.00 2018/12/04

MILLIMAGIC TRADING ENTERPRISE TOILETS 14 000.00 2018/12/04

NDIMBAS TRANSPORTATION WATER TANKER SERVICE 356 738.00 2018/05/31








OCEAN DAWN TRADING AND PROJECTS CC SECURITY SERVICE 325 659.46 2018/12/31

OCEAN DAWN TRADING AND PROJECTS CC SECURITY SERVICE 24 424.47 2018/12/31

PHANDU COMMUNICATIONS (PTY) LTD UNIFI SWITCHES AND ACCESS POINTS 82 800.00 2018/12/10

SCHINDLER LIFTS (SA)(PTY) LTD ELEVATORS 6 266.79 2018/11/30

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SEBATA MUNICIPAL SOLUTIONS (PTY) LTD METER READ 48 554.56 2018/11/30

SEE AND SAY TRANSPORT AND PROJECTS (PTY) LTD TRANSPORT 8 900.00 2018/12/07

SENZUMUSA PROJECTS (PTY) LTD WATER TANKER SERVICE 459 275.50 2018/05/31





SIVEST SA (PTY) LTD PROVISION OF BULK SERVICES TO THE DANNHAUSER HOUSING PROJECT 380 492.20 2018/10/31

SIVEST SA (PTY) LTD GOEDEHOOP HOUSING PROJECT PROVISION OF BULK SERVICES 194 298.73 2018/11/30

SIVEST SA (PTY) LTD PROVISION OF BULK SERVICES TO THE DANNHAUSER HOUSING PROJECT 293 866.52 2018/12/13

TELKOM TELEPHONE 38 882.61 2018/12/27

THE NEWCASTLE MUNICIPALITY WATER & ELECTRICITY 548.46 2018/12/21

THE NEWCASTLE MUNICIPALITY WATER & ELECTRICITY 11 064.48 2018/12/21

THE NEWCASTLE MUNICIPALITY WATER & ELECTRICITY 43.39 2018/12/21

THE NEWCASTLE MUNICIPALITY WATER & ELECTRICITY 45 276.54 2018/12/21

TSHINGWAYO CONTRACT CC T/A TCC CHEMICALS TOILET PAPER, SOAP, PINE GEL, MOP , BROOM 26 676.50 2018/11/30

UTHUKELA WATER (PTY) LTD BIGGARSBERG TO HATTINGSPRUIT 1 643 909.13 2018/11/30

UTHUKELA WATER (PTY) LTD BIGGARSBERG TO HATTINGSPRUIT 1 556 709.17 2018/12/31

As at the end of 31 December 2018, a total amount of R32 660 000 was outstanding in respect of unpaid creditors excluding old Uthukela Water Payments which is still under dispute amounting to R 18 995 160

All payments for outstanding creditors have been put on hold due to our cash position. Payments have been made for critical operating items such as electricity, water samples

pumps and plant maintenance, chemicals, water tanker hire and other creditors where legal action was being threatened.The situation regarding the unpaid creditors remains critical and all care is taken to ensure that we do not unnecessarily accumulate creditors.

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3.3 Transfers and Grants Received (Table 9)DC25 Amajuba - Supporting Table SC6 Monthly Budget Statement - transfers and grant receipts - Mid-Year Assessment


Audited

OutcomeOriginal Budget

Adjusted Budget

Monthly actual

YearTD actual

YearTD budget

YTD variance

YTD variance

Full Year Forecast

R thousands %

RECEIPTS: 1,2 Operating Transfers and Grants

National Government: 133 198 151 895 – 49 568 114 232 75 948 26 425 34.8% 151 895 Local Government Equitable Share 63 222 71 070 – 61 960 35 535 26 425 74.4% 71 070

RSC Levy Replacement 65 938 77 635 49 568 49 568 38 818 77 635

Finance Management 1 500 1 570 – 1 570 785 1 570

EPWP Incentive 1 497 1 620 – 1 134 810 1 620

Municipal Systems Improvement 1 041 – –

Other transfers and grants [insert description] –

Provincial Government: 350 400 – – 400 200 200 100.0% – SHARED SERVICES PLANNING GRANT 400 400 200 200 100.0%

District Municipality: – – – – – – – – Total Operating Transfers and Grants 5 133 548 152 295 – 49 568 114 632 76 148 26 625 35.0% 151 895 Capital Transfers and Grants

National Government: 91 041 126 858 – 14 000 70 944 63 429 7 515 11.8% 126 858

Municipal Infrastructure Grant (MIG) 39 577 40 253 14 000 26 000 20 127 5 874 29.2% 40 253

Rural Transport Services and Infrastructure – Municipal Water Infrastructure Grant

(MWIG) 49 400 84 400 – 43 400 42 200 1 200 2.8%

84 400

Rural Transport Services and Infrasructure 2 064 2 205 – 1 544 1 103 442 40.0% 2 205

Provincial Government: – – – – – – – – Total Capital Transfers and Grants 5 91 041 126 858 – 14 000 70 944 63 429 7 515 11.8% 126 858 TOTAL RECEIPTS OF TRANSFERS & GRANTS 5 224 589 279 153 – 63 568 185 576 139 577 34 140 24.5% 278 753

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3.4 Transfers and Grants Expenditure (Table 10)DC25 Amajuba - Supporting Table SC7(1) Monthly Budget Statement - transfers and grant expenditure - Mid-Year Assessment


Audited Outcome

Original Budget

Adjusted Budget

Monthly actual

YearTD actual

YearTD budget

YTD variance

YTD variance

Full Year Forecast

R thousands %

EXPENDITURE

Operating expenditure of Transfers and Grants

National Government: 133 198 151 895 – 15 066 87 418 75 948 11 470 15.1% 151 895

Local Government Equitable Share 63 222 71 070 – 71 070 35 535 35 535 100.0% 71 070

RSC Levy Replacement 65 938 77 635 14 503 14 503 38 818 (24 314) -62.6% 77 635

Finance Management 1 500 1 570 350 960 785 175 22.3% 1 570

EPWP Incentive 1 497 1 620 213 884 810 74 9.2% 1 620

Municipal Systems Improvement 1 041 – – – – –

Provincial Government: 750 400 – – 120 167 (46)

-27.9%

400 Growth and Development Summit 350 120 – 120 #DIV/0!

SHARED SERVICES PLANNING GRANT 400 400 – – 167 (167) -100.0% 400

Total operating expenditure of Transfers and Grants: 133 948 152 295

– 15 066 87 538 76 114 11 424

15.0%

152 295

Capital expenditure of Transfers and Grants

National Government: 91 041 126 858 – 15 206 55 584 63 429 (7 845) -12.4% 126 858

Municipal Infrastructure Grant (MIG) 39 577 40 253 4 877 21 153 20 127 1 027 5.1% 40 253

Municipal Water Infrastructure Grant (MWIG) 49 400 84 400 10 255 34 356 42 200 (7 844) -18.6% 84 400

Rural Transport Services and Infrasructure 2 064 2 205 74 74 1 103 (1 028) -93.3% 2 205

Total capital expenditure of Transfers and Grants 91 041 126 858 – 15 206 55 584 63 429 (7 845)

-12.4%

126 858

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TOTAL EXPENDITURE OF TRANSFERS AND GRANTS 224 989 279 153 – 30 272 143 122 139 543 3 578

2.6% 279 153

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3.6 MONTHLY ACTUAL AND REVISED TARGETS FOR CASH RECEIPTS AND PAYMENTS (Table 13)

DC25 Amajuba - Supporting Table SC9 Monthly Budget Statement - actuals and revised targets for cash receipts - Mid-Year Assessment

DescriptionRef

Budget Year 2018/19 2018/19 Medium Term Revenue & Expenditure Framework

July August Sept October Nov Dec January Feb March April May June Budget

Year 2018/1

9

Budget Year +1 2019/20

Budget Year +2 2020/21R thousands 1 Outcome Outcome Outco

me Outcome Outcome

Budget

Budget

Budget Budget Budge

t Budget Budget

Cash Receipts By Source Property rates –

Service charges - electricity revenue –

Service charges - water revenue 2 000 1 127 300 1 970 1 066 1 022 1 161 1 161 1 161 1 161 1 161 644 13 935 24 318 25 655

Service charges - sanitation revenue 600 150 90 443 240 231 262 262 262 262 262 80 3 144 5 487 5 789

Rental of facilities and equipment 2 1 3 3 – – 21 21 21 21 21 137 250 264 278

Interest earned - external investments 19 232 65 418 39 414 379 379 379 379 379 1 467 4 552 4 798 5 062

Interest earned - outstanding debtors 69 75 2 480 187 180 204 204 204 204 204 436 2 450 4 276 4 511

Transfer receipts - operating 61 960 1 975 400 12 986 729 49 568 12 691 12 691 12 691 12 691 12 691 (38 779)152 295 163 026 176 756

Other revenue 1 431 5 1 339 244 1 473 24 24 24 24 24 (4 324) 287 303 319

Cash Receipts by Source 66 080 3 565 2 199 16 299 2 506 52 888 14 743 14 743 14 743 14 743 14 743 (40 338)176 913 202 470 218 369

–

Other Cash Flows by Source –

Transfer receipts - capital 22 000 1 544 – 33 400 – 14 000 10 601 10 601 10 601 10 601 10 601 (3 880)120 067 129 334 141 870

Contributions & Contributed assets –

Total Cash Receipts by Source 88 080 5 109 2 199 49 699 2 506 66 888 25 343 25 343 25 343 25 343 25 343 (44 218)296 980 331 805 360 239

–

Cash Payments by Type –

Employee related costs 6 493 7 105 6 987 6 792 6 838 7 038 7 235 7 235 7 235 7 235 7 235 9 394 86 825 91 513 96 546

Remuneration of councillors 412 386 1 052 484 467 460 474 474 474 474 474 56 5 685 5 908 6 233

Interest paid 416 – – – – 64 64 64 64 64 30 764 764 764

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Bulk purchases - Electricity – – – – – – – – – – –

Bulk purchases - Water & Sewer – 1 406 – 1 421 2 899 – 1 439 1 439 1 439 1 439 1 439 4 344 17 263 18 195 19 196

Other materials – – – – – – – – – – –

Contracted services 39 1 659 1 071 2 707 2 416 – 1 418 1 418 1 418 1 418 1 418 2 033 17 014 17 933 18 919Grants and subsidies paid - other

municipalities – – – – – – – – – – –

Grants and subsidies paid - other – – – – – – – – – –

General expenses 36 806 1 203 253 3 833 1 860 19 883 7 992 7 992 7 992 7 992 7 992 (7 892) 95 909 99 929 104 576

Cash Payments by Type 44 166 11 759 9 362 15 237 14 480 27 381 18 622 18 622 18 622 18 622 18 622 7 966223 460 234 242 246 234

–

Other Cash Flows/Payments by Type

Capital assets 10 5 730 3 871 9 363 5 725 16 679 10 006 10 006 10 006 10 006 10 006 28 661120 067 129 334 141 870

Repayment of borrowing –

Other Cash Flows/Payments 13 987 (13 987)

Total Cash Payments by Type 44 176 17 489 13 233 38 587 20 206 44 060 28 627 28 627 28 627 28 627 28 627 22 640343 527 363 576 388 104

–NET INCREASE/(DECREASE) IN CASH HELD 43 904 (12 380)

(11 034) 11 112

(17 699) 22 828 (3 284) (3 284) (3 284) (3 284) (3 284) (66 858)

(46 546) (31 772) (27 864)

Cash/cash equivalents at the month/year beginning: 54 079 97 983 85 604 74 569 85 682 67 983 90 811 87 527 84 243 80 959 77 675 74 391 54 079 7 533 (24 239)

Cash/cash equivalents at the month/year end: 97 983 85 604 74 569 85 682 67 983 90 811 87 527 84 243 80 959 77 675 74 391 7 533 7 533 (24 239) (52 103)

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DC25 Amajuba - Table C4 Monthly Budget Statement - Financial Performance (revenue and expenditure) - Mid-Year Assessment


Audited Outcome

Original Budget

Adjusted Budget

Monthly actual

YearTD actual

YearTD budget

YTD variance

YTD variance

Full Year Forecast

R thousands %

Revenue By Source Property rates – Service charges - electricity revenue – Service charges - water revenue 23 494 23 225 – 1 849 10 837 11 613 (775) -7% 23 225 Service charges - sanitation revenue 5 479 5 240 – 484 2 349 2 620 (271) -10% 5 240 Service charges - refuse revenue – – Service charges - other – – – – – – – – Rental of facilities and equipment 283 250 – – 9 125 (116) -93% 250 Interest earned - external investments 4 709 4 552 – 414 2 216 2 276 (60) -3% 4 552 Interest earned - outstanding debtors 4 166 4 084 – 523 2 906 2 042 864 42% 4 084 Dividends received – – Fines, penalties and forfeits 1 677 – – Licences and permits – – Agency services – – Transfers and subsidies 226 903 152 295 – 65 377 169 352 76 148 93 205 122% 152 295 Other revenue 274 287 – 3 225 144 81 57% 287 Gains on disposal of PPE –

Total Revenue (excluding capital transfers and contributions)

266 984 189 933 – 68 651 187 894 94 967 92 927 98% 189 933

Expenditure By Type

Employee related costs 98 232 86 825 7 038 41 253 43 412 (2 159) -5% 86 825

Remuneration of councillors 5 134 5 685 460 3 261 2 843 418 15% 5 685

Debt impairment 11 698 13 000 2 842 6 001 6 500 (499) -8% 13 000

Depreciation & asset impairment 22 379 33 178 2 765 16 589 16 589 0 0% 33 178

Finance charges 993 764 4 847 382 465 122% 764

Bulk purchases 18 052 17 263 1 429 7 159 8 632 (1 473) -17% 17 263

Other materials – – –

Contracted services 21 485 17 014 718 9 116 8 507 609 7% 17 014

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Transfers and subsidies – – – –

Other expenditure 57 741 49 731 3 668 18 707 24 865 (6 158) -25% 49 731

Loss on disposal of PPE – – – –

Total Expenditure 235 714 223 460 – 18 925 102 933 111 730 (8 797) -8% 223 460

Surplus/(Deficit) 31 270 (33 527) – 49 725 84 961 (16 763) 101 724 (0) (33 527)Transfers and subsidies - capital (monetary allocations) (National / Provincial

and District) –

Transfers and subsidies - capital (monetary allocations) (National / Provincial Departmental Agencies, Households, Non-profit Institutions, Private Enterprises, Public Corporatons, Higher Educational Institutions) –

Transfers and subsidies - capital (in-kind - all) – Surplus/(Deficit) after capital transfers & contributions 31 270 (33 527) – 49 725 84 961 (16 763) (33 527)

Taxation –

Surplus/(Deficit) after taxation 31 270 (33 527) – 49 725 84 961 (16 763) (33 527)Attributable to minorities

Surplus/(Deficit) attributable to municipality 31 270 (33 527) – 49 725 84 961 (16 763) (33 527)

Share of surplus/ (deficit) of associate

Surplus/ (Deficit) for the year 31 270 (33 527) – 49 725 84 961 (16 763) (33 527)

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3.7 Repairs and Maintenance per Asset Class (Table 14)

DC25 Amajuba - Supporting Table SC13c Monthly Budget Statement - expenditure on repairs and maintenance by asset class - Mid-Year Assessment

Description Ref

2017/18Budget Year 2018/19

Audited Outcome

Original Budget

Adjusted Budget

Monthly actual

YearTD

actualYearTD budget

YTD varianc

e

YTD varianc

e

Full Year

Forecast

R thousands 1 % Repairs and maintenance expenditure by Asset Class/Sub-class

Infrastructure 4 888 9 534 – 1 107 2 767 4 767 2 000 42.0% 9 534Water Supply Infrastructure 4 888 9 534 – 1 107 2 767 4 767 2 000 42.0% 9 534

Dams and Weirs 4 888 9 534 1 107 2 767 4 767 2 000 42.0% 9 534

Boreholes –

Computer Equipment – – – – – – – –Computer Equipment –

Furniture and Office Equipment 1 076 1 753 – – 157 877 720 82.1% –Furniture and Office Equipment 1 076 1 753 – 157 877 720 82.1%

Machinery and Equipment 185 – – – – – – –Machinery and Equipment 185 –

Transport Assets – – – – – – – –Transport Assets –

Libraries – – – – – – – –Libraries –

Zoo's, Marine and Non-biological Animals – – – – – – – –Zoo's, Marine and Non-biological Animals –

Total Repairs and Maintenance Expenditure 1 6 148 11 288 – 1 107 2 924 5 644 2 720 48.2% 9 534

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PART 4 – SUPPORTING DOCUMENTATION4.1 ANNEXURE A

ADM C Schedule -Mid Year Budget Performance

4.2 ANNEXURE B

Detailed Performance Information

The schedules depicting the detailed information per department per KPI are attached

4.3 ANNEXURE C:

uThukela Water Mid- year performance report

4.4 ANNEXURE D:

Bank Reconciliation as 31 December 2018 Bank Statements Investment Register Grant Register Trial Balance

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PART 5: QUALITY CERTIFICATES

Municipal manager’s quality certificate

5.1 Municipal Manager’s Quality Certificate

I, MR SR ZWANE., The Municipal Manager of Amajuba District Municipality hereby certify that the mid-year budget and performance assessment for the 2018/2019 financial year has been prepared in accordance with the Municipal Finance Management Act and regulations made under the Act.

Print Name:

Municipal Manager of Amajuba District Municipality

Signature: ...........................Signed………....................

Date: 25 January 2019

5.2 Mayor’s Quality Certificate

{Section 54 of the MFMA requires the Mayor of a municipality to take certain actions on the receipt of this report to ensure that the approved budget is implemented in accordance with the projections contained in the Service Delivery and Budget Implementation Plan}

I, CLLR NG NGUBANE, the Mayor of Amajuba District Municipality hereby certifies that the mid-year budget and performance assessment for the 2018/2019 financial year has been prepared in accordance with the Municipal Finance Management Act and regulations made under the Act.

Print Name:

Mayor of Amajuba District Municipality

Signature: .................. Signed........................

Date: 25 January 2019

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contents · web viewin terms of section 73(1)(1) reports on failure to adopt or implement budget -...

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