2013-2014 mid-year budget and performance assessment 18 february 2014 sustainable development

2013-2014 Mid-year Budget and Performance Assessment

18 February 2014

Sustainable Development

KAREEBERG MUNICIPALITY

General Information on the Municipality

Kareeberg Municipality is situated in the western side of the Pixley ka Seme District Municipality in the Northern Cape Province. The district consists of nine municipalities of which Kareeberg is the smallest. The municipality was established through the amalgamation of Carnarvon, Vanwyksvlei and Vosburg, as well as a large area of rural farms.



• The administrative center is located in Carnarvon with Vanwyksvlei and Vosburg being rural service centers. The landscape is typical Karoo with an annual average rainfall of 260mm and an annual evaporation of 230mm. There are no constant rivers running through the municipal area and all towns are dependent on ground water.



• Local economic opportunities are sadly lacking in the municipal area with the declining economy being largely based on sheep farming. With an unemployment rate of approximately 69,6% (Census 2011) most of the residents rely heavily on the provision of free basic services. (64% of consumers) Population has grown by 2,7 % over the period 2001 to 2011.



• The migration of economically active residents to greater urban areas has a huge impact on the population growth. The total population in the municipal area is 11 673, which constitutes 3 222 households. 797 households (population 2 710), are resident in the rural areas whilst 2 425 households (population 8 963) reside in the urban areas.


LeadershipMayor Nico Titus

Councillor Jurie Hoorn

Councillor (PR) Jan Horne

Councillor David Jason

Councillor Dorothy Oliphant

Councillor (PR) Ellen Riley

Councillor (PR) Pienaar ViviersSustainable Development

Leadership

Municipal Manager Willem de Bruin

COM Albertus van Schalkwyk

CFO Brennan Rossouw

Head Corp. Services Calla van Zyl


Session 1

Review of Performance for the 2012-2013

Financial Year


Performance in the 2012-2013 Financial Year1. Audited Financial Performance against the original and

revised Budget


OriginalBudget

AdjustedBudget

AuditedPerformance

∆ 8 274 000 8 274 000 11 443 100

The municipality had a surplus of R 11 443 100 for the year ended 30 June 2013

∆ 39 703 084 52 603 084 56 423 486

The over receipt is due to grants received from Government departments

∆ 41 003 084 53 903 084 44 980 386

∆ 9 574 000 9 574 000 14 499 591

Over performance is due to grants received from Government Departments

∆ 11 979 972 12 729 972 12 463 236

Surplus/(Deficit) for the year ended 30 June

Over/(under) collection of revenue

(Over)/under spending of budget

Capital Performance

Personnel Performance(financial)

Performance in the 2012-2013 Financial Year

2. 2012-2013 performance against IDP and SDBIP targets


a) Implement a Performance Management System

b) Newsletters

c) Oversee that training in terms of the Skills Development Plan is being implemented

d) Reclaim all monies due i.t.o. Skills Development Plan.

e) Ensure that the recommendations in the External Audit report is successfully implemented

No official was charged with the task

Insufficient funding received from LGSETA

Although all the relevant documentation is submitted the exercise is worthless

This is an ongoing process and recommendations are reviewed monthly. All the recommendations made by the AG have not been clarified and the Audit Action Plan has not been completed.




f) 4 Ward Committee meetings per annum

g) The dumping of all waste at the waste sites and administering the maintenance of the dumping site.

h) Manage maintenance of assets

i) Manage the maintenance of the municipal vehicles fleet and equipment

Only three per ward were held. A quorum for all meetings could not be obtained

Although the waste sites have been tidied the community dumps refuse in a disorderly manner.

Cash flow restraints hamper repair and maintenance

Cash flow restraints hamper repair and maintenance


3. 2012-2013 Auditor General’s report

Qualified opinionIn my opinion, except for effects of the matters described in the Basis for qualified opinion paragraphs, the financial statements present fairly, in all material respects, the financial position of the Kareeberg Local Municipality as at 30 June 2013 and its financial performance and cash flows for the year then ended in accordance with SA Standards of GRAP and the requirements of the MFMA and DoRA


Performance in the 2012-2013 Financial YearAudit Action Plan


Item Particulars of Finding Impact of the finding

on the Audit

Report

Action taken Responsible Person and Department

Time Schedule

Progress made

6 The municipality did not include particulars of all irregular expenditure in the notes to the financial statements as required by section 125(d) (i) and (ii) of the MFMA. The municipality made payments in contravention of the supply chain management requirements which were not included in irregular expenditure, resulting in irregular expenditure being understated by an amount of R1 818 064.

Qualification Council wrote off the expenditure on 27 November 2013. The financial statements were corrected, but it was not accepted by the Auditor General. The main reason was misinterpretation of the regulations.

Head: Finance

27 November 2013

7 The municipality did not include particulars of unauthorised expenditure in the notes to the financial statements as required by section 8(1) (a) the DoRA.. The municipality made payments in contravention of the of the conditions of the Financial Management and Municipal System Implementation grants and these payments were not included in unauthorised expenditure being understated by R630 390.

Qualification Authorisation for the payment of FMG was submitted on 27 November 2013. No answer was received from the Auditor General. Approved MSIG plan indicates the expenditure and conditions were met. The Auditor General did not accept this proof. Council will investigate the matter at the council meeting on 28 January 2014.

Municipal Manager

31 March 2014




on the Audit

Report


Time Schedule

Progress made

10 As disclosed in note 34 to the financial statements, the corresponding figures for 30 June 2012 have been restated as a result of errors discovered during 2013 in the financial statements for the year ended, 30 June 2012.

Other matters

Errors discovered by municipality itself and restatement done. See note 34

- -

11 As disclosed in note 16 and 17 of the financial statements, the municipality impaired receivables from exchange transactions to the value of R2 677 508 due to a measurable decrease in future cash flows since initial recognition.

Other matters

Provision of R2 677 508 was made for all debt greater than 30 days

- -

13 Cannot obtained the other information included in the annual report. Consequently not able to identify whether the other information to be included in the annual report contains any material inconsistencies to the information in the financial statements.

Other matters

This matter was never discussed. It is therefore unclear what is referred to.

Auditor General

31 January 2014

Clearer reference was requested.

15 The annual performance report was not presented for audit and consequently the findings are limited to the procedures performed on the strategic planning and performance management documents.

Other matters

A consultant started the process but has not been re-appointed to complete the task. MPAC recommended that council reconsider the appointment.

Council 28 January 2014


Audit Action Plan



on the Audit

Report


Time Schedule

Progress made

17 The National Treasury Framework for managing programme performance information requires that the performance targets be specific in clearly identifying the nature and required level of performance. A total of 100% of the targets were not specific in clearly identifying the nature and required level of performance. This was due to the fact that management did not implement the requirements of the National Treasury Framework for managing programme performance information when the Integrated Development Plan was developed and is still in the process of correcting this in order to comply with the requirements.

Other matters




Audit Action Plan


Item Particulars of Finding Impact of the finding on the Audit Report


Time Schedule

Progress made


Other matters




Audit Action Plan



on the Audit

Report


Time Schedule

Progress made


Other matters






on the Audit

Report


Time Schedule

Progress made


Other matters



22 The performance management system of the municipality did not provide for the monitoring of performance and for the measuring and review of performance at least once per year, with regard to each of those development priorities and objectives and against the key performance indicators and targets set, as required by Section 41 of the Municipal Systems act.

Other matters






on the Audit

Report


Time Schedule

Progress made

23 The performance management system of the municipality did not provide for taking steps to improve performance with regard to those development priorities and objectives where performance targets are not met , as required by Section 41 (1)(d) of the Municipal Systems Act.

Other matters



24 The municipality did not set measurable performance targets for the financial year with regard to each of the development priorities and objectives and key performance indicators set out in the Integrated Development Plan , as required by section 41 (1)(b) of the Municipal Systems Act and the Municipal Planning and Performance Management Regulation 12(1) and 12(2)(e).

Other matters



25 The municipality did not establish mechanisms to monitor and review its performance management system, as required by section 40 of the Municipal Systems Act.

Other matters






on the Audit

Report


Time Schedule

Progress made

26 The municipality did not set key performance indicators, including input indicators, output indicators and outcome indicators, in respect of each of the development priorities and objectives set out in the Integrated Development Plan, as required by section 41 (1)(a) of the Municipal Systems Act and the Municipal Planning and Performance Management Regulation 1 and 9(1)(a).

Other matters



27 A performance audit committee was not in place and the audit committee was not used to fulfil the performance audit committee function, as required by Municipal Planning and Performance Regulation 14(2)(a).

Other matters



28 The annual performance report for the financial year under review was not prepared, as required by section 46 of the Municipal Systems Act and section 121(3)(c) of the Municipal Finance Management Act.

Other matters






on the Audit

Report


Time Schedule

Progress made

29 The internal audit did not audit the results of performance measurements, as required by section 45 (1) (a) of the Municipal Systems Act and Municipal Planning and Performance Management Regulation 14(1) (a).

Other matters

Due to the non-determination of the predetermined objectives and the performance indicators, this action could not be undertaken.

Internal Audit Unit

28 January 2014

30 The internal audit unit did not assess the functionality of the performance management system, as required by Municipal Planning and Performance Management Regulation 14(1) (b) (i).

Other matters


Internal Audit Unit

28 January 2014

31 The internal audit unit did not assess the extent to which the performance measurements were reliable in measuring the performance of the municipality on key and general performance indicators, as required by Municipal Planning and Performance Management Regulation 14(1)(b)(iii).

Other matters


Internal Audit Unit

28 January 2014



Item

Particulars of Finding Impact of the finding

on the Audit

Report


Time Schedule

Progress made

32 The internal audit unit did not audit the performance measurements on a continuous basis and submitted quarterly reports on their audits to the municipal manager and the performance audit committee, as required by Municipal Planning and Performance Management Regulation 14(1)(c).

Other matters


Internal Audit Unit

28 January 2014

33 The audit committee did not advise the council on matters relating to internal financial control, internal audits, effective governance, performance management and performance evaluation as required by section 166(2)(a) of the Municipal Finance Management Act.

Other matters

Audit committee members to be appointed on 28 January 2014.

Municipal Manager

31 January 2014

34 The audit committee did not advise the council and accounting officer on matters relating to the adequacy, reliability and accuracy of financial reporting and information, as required by section 166(2)(iv) of the Municipal Finance Management Act.

Other matters


Municipal Manager

31 January 2014




on the Audit

Report


Time Schedule

Progress made

35 The audit committee did not advise the council and accounting officer on matters relating to compliance with legislation, as required by section 166(2)(a)(vii) of the Municipal Finance Management Act.

Other matters


Municipal Manager

31 January 2014

36 The audit committee did not respond to the council on issues raised in the audit reports of the Auditor-General, as required by section 166(2)(c) of the Municipal Finance Management Act.

Other matters


Municipal Manager

31 January 2014

37 The audit committee did not review the annual financial statements to provide the council with an authoritative and credible view of the financial position of the entity, its efficiency and effectiveness and its overall level of compliance with legislation, as required by section 166(2)(b) of the Municipal Finance Management Act.

Other matters


Municipal Manager

31 January 2014

38 The audit committee did not meet at least four times a year, as required by section 166(4)(b) of the Municipal Finance Management Act.

Other matters


Municipal Manager

31 January 2014




on the Audit

Report


Time Schedule

Progress made

39 Goods and services with a transaction value of below R200 000.00 were procured without obtaining the required price quotations as required by Supply Chain Management Regulations 17(a) & (c).

Other matters

A difference of interpretation existed.

Head: Finance

1 December 2013

Implemented according to the Auditor General ‘s interpretation.

41 Sufficient appropriate audit evidence could not be obtained that bids were evaluated by bid evaluation committees which were composed of officials from the departments requiring the goods or services and at least one supply chain management practitioner of the municipality as required by Supply Chain Management Regulation 28(2).

Other matters


Head: Finance

1 December 2013


42 Sufficient appropriate audit evidence could not be obtained that contracts and quotations were awarded only to bidders who submitted a declaration on whether they are employed by the state or connected to any person employed by the state, as required by Supply Chain Management Regulation 13(c).

Other matters


Head: Finance

1 December 2013



Audit Action Plan



on the Audit

Report


Time Schedule

Progress made

43 Invitations for competitive bidding were not always advertised for a required minimum period of days, as required by Supply Chain Management Regulation 22(1) & 22(2).

Other matters

All advertisements are published for the prescribed time in newspapers and CIBD.

Head: Finance

1 December 2013

Advertisements are still published for the prescribed time.

44 The accounting officer did not meet the prescribed competency areas as required by section 83 of the Municipal Finance Management Act and regulation 2 and 3 of the Municipal Regulations on Minimum Competency Levels.

Other matters

MPAC drawn Council’s attention to section 56(2) of the Municipal Systems Act. All actions taken by the official will therefore have unauthorised expenditure as a result.

Council Council was alerted about the fact at a workshop held on 29 October 2013.

45 Reasonable steps were not taken to prevent unauthorised expenditure and irregular expenditure, as required by section 62(1) (d) of the Municipal Finance Management Act.

Other matters

The actions and interpretation by the Auditor General has a huge impact. The management letter mentions “root cause is misinterpretation of the supply chain regulations and policies”

Auditor General

31 January 2014

Awaiting comments from the Auditor General.


Audit Action Plan



on the Audit

Report


Time Schedule

Progress made

47 The accounting officer did not exercise adequate oversight responsibility over financial and performance reporting, compliance with laws and regulations as well as internal control. The lack of controls in the finance and supply chain management directorates resulted in non-compliance with applicable legislation and expenditure incurred not in terms of objectives. This, in turn, resulted in irregular and unauthorised expenditure.

Other matters

The actions and interpretation by the Auditor General has a huge impact. The management letter mentions “root cause is misinterpretation of the supply chain regulations and policies”

Auditor General

31 January 2014

Awaiting comments from the Auditor General.

48 Leadership did not regularly monitor management’s compliance with laws and regulations and internally designed policies and procedures. As a result, significant non-compliance issues were noted.

Other matters

Inconsistent actions and interpretation by the Auditor General complicates application.

Municipal Manager

31 January 2014


Audit Action Plan



on the Audit

Report


Time Schedule

Progress made

49 Manual or automated controls were not designed to ensure that the transactions occurred were authorised and were completely and accurately processed.

Other matters

This matter was never raised in any previous audits. It is therefore unclear what is referred to.

Auditor General

31 January 2014

More information was requested.

50 The accounting officer did not implement proper record keeping in a timely manner to ensure that complete, relevant and accurate information was accessible and available to support financial and performance reporting. The financial statements were not sufficiently reviewed and the supply chain management unit could subsequently not detect some of the irregular and unauthorised expenditure occurred.

Other matters

This matter was never raised during the audit. It is therefore unclear what is referred to. Mention is made in the management letter that the financial statements are reviewed.

Auditor General

31 January 2014

More information was requested.


4. Special Adjustments Budget in terms of S32 of MFMAAn adjustments budget was passed on 31st January 2013 in terms of section 32 of the MFMA


Original Budget

Adjustments Budget

Total adjustments

2012-2013R'000

2012-2013R'000

2012-2013R'000

Employee related costs 11 980 12 730 750 Bulk purchases 7 000 7 250 250 Other materials 379 417 38 Contracted services 428 478 50 Other expenditure 8 803 20 615 11 812

KareebergMunicipality


4. Special Adjustments Budget in terms of S32 of MFMA

Reasons for passing an adjustments budget Employee related costs were increased due to implementation of

the task evaluations Bulk purchases were higher as a result of increased electricity

sales Other materials and contracted services were increased due to

expected increase in repairs and maintenance Operating grants were increased due to an expected

expenditure to the upgrading of water services to Vanwyksvlei as well as grants received from other departments


Aggregate Financial Performance for 2012-2013


Original Budget

Revised Budget

ActualOutcome

2012-2013R'000

2012-2013R'000

2012-2013R'000

Actual vs. Original

2012-2013%

Actual vs. Revised

2012-2013%

Revenue 49 277 62 177 56 423 1,15 0,91

Expenditure 41 003 53 903 44 980 1,1 0,83Operating Surplus / 8 274 8 274 11 443 1,38 1,38

Percentage Variance


Kareeberg Municipality

1.



Original Budget

Revised Budget

ActualOutcome

2012-2013R'000

2012-2013R'000

2012-2013R'000

Actual vs. Original

2012-2013%

Actual vs. Revised

2012-2013%

Revenue 22 924 35 824 29 356 1,28 0,82

Expenditure 15 647 27 272 17 898 1,14 0,66Operating Surplus / (Deficit)

7 277 8 552 11 458 1,57 1,34

Percentage Variance


Executive and Council



Original Budget

Revised Budget

ActualOutcome

2012-2013R'000

2012-2013R'000

2012-2013R'000

Actual vs. Original

2012-2013%

Actual vs. Revised

2012-2013%

Revenue 9 212 9 212 10 332 1,12 1,12


2 978 2 771 1 752 0,59 0,63

Percentage Variance


Budget and Treasury



Original Budget

Revised Budget

ActualOutcome

2012-2013R'000

2012-2013R'000

2012-2013R'000

Actual vs. Original

2012-2013%

Actual vs. Revised

2012-2013%

Revenue – – – – –


(1 610) (1 740) (1 657) 1,03 0,95

Percentage Variance


Corporate Services



Original Budget

Revised Budget

ActualOutcome

2012-2013R'000

2012-2013R'000

2012-2013R'000

Actual vs. Original

2012-2013%

Actual vs. Revised

2012-2013%


Expenditure 21 21 11 0,51 0,51Operating Surplus / (Deficit)

(21) (21) (11) 0,51 0,51

Percentage Variance


Health



Original Budget

Revised Budget

ActualOutcome

2012-2013R'000

2012-2013R'000

2012-2013R'000

Actual vs. Original

2012-2013%

Actual vs. Revised

2012-2013%

Revenue 7 7 8 1,23 1,23


(979) (979) (967) 0,99 0,99

Percentage Variance


Community and Social Services



Original Budget

Revised Budget

ActualOutcome

2012-2013R'000

2012-2013R'000

2012-2013R'000

Actual vs. Original

2012-2013%

Actual vs. Revised

2012-2013%

Revenue 1 1 4 5,7 5,7


(71) (121) (81) 1,14 0,67

Percentage Variance


Public Safety



Original Budget

Revised Budget

ActualOutcome

2012-2013R'000

2012-2013R'000

2012-2013R'000

Actual vs. Original

2012-2013%

Actual vs. Revised

2012-2013%

Revenue 18 18 66 3,68 3,68


(498) (498) (442) 0,89 0,89

Percentage Variance


Sport & Recreation



Original Budget

Revised Budget

ActualOutcome

2012-2013R'000

2012-2013R'000

2012-2013R'000

Actual vs. Original

2012-2013%

Actual vs. Revised

2012-2013%

Revenue 3 050 3 050 2 932 0,96 0,96


661 661 447 0,68 0,68

Percentage Variance


Waste Management



Original Budget

Revised Budget

ActualOutcome

2012-2013R'000

2012-2013R'000

2012-2013R'000

Actual vs. Original

2012-2013%

Actual vs. Revised

2012-2013%

Revenue 2 616 2 616 2 561 0,98 0,98


227 (236) (491) -2,16 2,08

Percentage Variance


Waste Water Management



Original Budget

Revised Budget

ActualOutcome

2012-2013R'000

2012-2013R'000

2012-2013R'000

Actual vs. Original

2012-2013%

Actual vs. Revised

2012-2013%

Revenue 2 2 5 2,43 2,43


(2 820) (2 995) (2 930) 1,04 0,98

Percentage Variance


Road Transport



Original Budget

Revised Budget

ActualOutcome

2012-2013R'000

2012-2013R'000

2012-2013R'000

Actual vs. Original

2012-2013%

Actual vs. Revised

2012-2013%

Revenue 3 881 3 881 3 951 1,02 1,02


3 023 3 023 3 169 1,05 1,05

Percentage Variance


Water



Original Budget

Revised Budget

ActualOutcome

2012-2013R'000

2012-2013R'000

2012-2013R'000

Actual vs. Original

2012-2013%

Actual vs. Revised

2012-2013%

Revenue 7 567 7 567 7 209 0,95 0,95


27 (223) (886) -33,10 3,97

Percentage Variance


Electricity



Original Budget

Revised Budget

ActualOutcome

2012-2013R'000

2012-2013R'000

2012-2013R'000

Actual vs. Original

2012-2013%

Actual vs. Revised

2012-2013%

Property Rates 4 527 4 527 4 318 95% 95%Property rates - penalties imposed and collection charges

190 190 180 95% 95%

Service charges - electricity revenue

7 240 7 240 6 882 95% 95%

Percentage Variance


Revenue by source2.



Original Budget

Revised Budget

ActualOutcome

2012-2013R'000

2012-2013R'000

2012-2013R'000

Actual vs. Original

2012-2013%

Actual vs. Revised

2012-2013%

Service charges - water revenue

3 555 3 555 3 624 102% 102%

Service charges - sanitation revenue

2 290 2 290 2 234 98% 98%

Service charges - refuse revenue

3 049 3 049 2 931 96% 96%

Percentage Variance


Revenue by source



Original Budget

Revised Budget

ActualOutcome

2012-2013R'000

2012-2013R'000

2012-2013R'000

Actual vs. Original

2012-2013%

Actual vs. Revised

2012-2013%

Rental of facilities and equipment

411 411 504 123% 123%

Interest earned - external investments

1 297 1 297 1 213 93% 93%

Interest earned - outstanding debtors

3 3 3 101% 101%

Percentage Variance


Revenue by source



Revenue by source - explanations



Rental for commonage is advertised and therefor accurate budgetary estimates cannot be given

Less cash available due to the low payment rate for services (57%) and rates boicot



Original Budget

Revised Budget

ActualOutcome

2012-2013R'000

2012-2013R'000

2012-2013R'000

Actual vs. Original

2012-2013%

Actual vs. Revised

2012-2013%

Fines 12 12 11 89% 89%

Licences and permits

7 7 6 87% 87%

Agency services 97 97 127 131% 131%

Percentage Variance


Revenue by source




Fines


Agency services

Fines cannot really be determined as it depends on fines imposed by the magistrate

Revenue cannot really be determined as it depends on customers

Revenue cannot really be determined as it depends on customers



Original Budget

Revised Budget

ActualOutcome

2012-2013R'000

2012-2013R'000

2012-2013R'000

Actual vs. Original

2012-2013%

Actual vs. Revised

2012-2013%

Government Grants and Subsidies

25 480 36 880 31 999 126% 87%

Other revenue 1 119 2 619 2 386 213% 91%

Percentage Variance


Revenue by source




Government Grants and Subsidies

Other revenue

These are additional grants made by Government departmentsEstimates for bulk water supply to Vanwyksvlei did not realise

Revenue as budgeted for, did not realise



Expenditure by type

Original Budget

Revised Budget

ActualOutcome

2012-2013R'000

2012-2013R'000

2012-2013R'000

Actual vs. Original

2012-2013%

Actual vs. Revised

2012-2013%

Employee related costs

11 980 12 730 12 463 104% 98%

Remuneration of councillors

1 881 1 881 1 784 95% 95%

Debt impairment

225 225 491 218% 218%

Percentage Variance




Expenditure by type - explanations

Debt impairment An increase in debtors caused an increased contribution to the provision



Expenditure by type

Original Budget

Revised Budget

ActualOutcome

2012-2013R'000

2012-2013R'000

2012-2013R'000

Actual vs. Original

2012-2013%

Actual vs. Revised

2012-2013%

Depreciation & asset impairment

3 135 3 135 2 562 82% 82%

Finance charges

– – 1 378 – –

Bulk purchases 7 000 7 250 7 036 101% 97%

Percentage Variance






Finance charges

Expenditure was not as high as anticipated – PPE was recorded as work in progress, for which depreciation is not recorded as yet

Finance charges cannot be determined accurately because the actuarial survey is done annually



Expenditure by type

Original Budget

Revised Budget

ActualOutcome

2012-2013R'000

2012-2013R'000

2012-2013R'000

Actual vs. Original

2012-2013%

Actual vs. Revised

2012-2013%

Other materials 379 417 434 114% 104%

Contracted Services

428 478 301 70% 63%

Transfers and grants

7 169 7 169 7 409 103% 103%

Other expenditure

8 803 20 615 11 088 126% 54%

Loss on disposal of PPE

2 2 34 1697% 1697%

Percentage Variance





Contracted Services

Other expenditure


Because of cash constraints, budgeted repairs and maintenance are neglected

This includes expenditure on grants received from government departmentsEstimates for bulk water supply to Vanwyksvlei did not realise

Council only allows periodical culling of game, and then partly as benefit to the local community



Personnel remuneration - Councillors,Original Budget

Revised Budget

ActualOutcome

2012-2013R'000

2012-2013R'000

2012-2013R'000

Actual vs. Original

2012-2013%

Actual vs. Revised

2012-2013%

Salary 1 362 1 362 1 280 94% 94%

Motor vehicle allowance

421 421 412 98% 98%

Cell phone allowance

98 98 92 94% 94%

Total Councillors

1 881 1 881 1 784 95% 95%

Percentage Variance


3.



Personnel remuneration – Senior managers

Original Budget

Revised Budget

ActualOutcome

2012-2013R'000

2012-2013R'000

2012-2013R'000

Actual vs. Original

2012-2013%

Actual vs. Revised

2012-2013%

Basic Salary and wages

2 188 2 223 2 244 103% 101%Pension and UIF Contributions

289 298 303 105% 102%

Medical Aid Contributions

122 122 111 91% 91%

Performance Bonus

203 203 162 80% 80%

Motor Vehicle Allowance

386 386 385 100% 100%

Other benefits or allowances

17 17 0 2% 2%

Total Senior managers

3 204 3 248 3 205 100% 99%

Percentage Variance




Personnel remuneration – Other staffOriginal Budget

Revised Budget

ActualOutcome

2012-2013R'000

2012-2013R'000

2012-2013R'000

Actual vs. Original

2012-2013%

Actual vs. Revised

2012-2013%

Basic Salaries and wages

6 240 6 839 6 988 112% 102%

Pension and UIF Contributions

1 056 1 164 1 124 106% 97%


357 357 320 90% 90%

Overtime 155 155 320 207% 207%

Motor Vehicle Allowance

72 72 66 91% 91%

Housing allowance

24 24 10 40% 40%


277 277 81 29% 29%

Long Service Awards

– – 104 – –

Post retirement benefit obligations

594 594 246

Total Other staff

8 182 8 888 9 259 113% 104%

Percentage Variance


Performance against the IDP and SDBIP targets for 2012-2013


Kareeberg MunicipalityIDP Objective

Project Baseline Status Quo

Measurable Performance Indicator

2012-2013 Original SDBIP Target(Annual)

2012-2013 Revised SDBIP Target(Annual)

Actual Performance for 2012-2013

2012-2013 Original Budget

2012-2013 Revised Budget

2012-2013 Actual Outcome

Provide paved roads in Carnarvon, Vanwyksvlei and Vosburg

Paving of gravel roads in Carnarvon, Vanwyksvlei and Vosburg

40 km of gravel roads in Carnarvon, Vanwyksvlei and Vosburg

Replace 3,5 km of gravel roads with paving in Carnarvon, Vanwyksvlei and Vosburg

3 500 m 2 934m 2 934m 9 574 8 474 8 374

Provide a safe environment in Carnarvon, Vanwyksvlei and Vosburg

Supply High mast Lighting in Carnarvon, Vanwyksvlei and Vosburg

Erect 3 High mast lights in Carnarvon, Vanwyksvlei and Vosburg

Erect 3 High Mast Lights in Carnarvon, Vanwyksvlei and Vosburg

3 3 3 0 1 100 1 200

2012-2013 Auditor General’s Report


Qualified opinion

In my opinion, except for effects of the matters described in the Basis for qualified opinion paragraphs, the financial statements present fairly, in all material respects, the financial position of the Kareeberg Local Municipality as at 30 June 2013 and its financial performance and cash flows for the year then ended in accordance with SA Standards of GRAP and the requirements of the MFMA and DoRA



Finding 2012/13Yes/No

Recurrence from 2011/2012

Yes/No

Non-current Assets No No

Current Assets No No

Liabilities No No

Other Disclosure Items No No

Revenue No No

Expenditure No No

Irregular Expenditure Yes No

Unauthorised Expenditure Yes No

Fruitless and Wasteful Expenditure

No No

Matters of emphasis

Was mentioned in the audit action plan on previous slides



Matters of emphasis

Was mentioned in the audit action plan on pages 13 to 27

Supply chain irregularities

Was mentioned in the audit action plan on pages 13 to 27

Special Adjustments Budget in terms of Section 32 of MFMA and Regulation 23.5


Unauthorised expenditure

Unauthorised expenditure 2012-2013– capital

Reason Amount % overspent

Condoned/written off by council

Budget and Treasury office

Community and SocialServices

Road Transport

Water

Electricity

Purchase of computer equipment

Purchase of office equipment and additions to buildings

Paving of streets

Bulk water supply Vanwyksvlei

High mast Lighting

13 853

262 531

4 272 834

311 638

19 585

100

100

100

100

100

13 853

262 531

4 272 834

311 638

19 585



Unauthorised expenditure

Unauthorised expenditure current year– capital

Reason Amount % overspent

Condoned/written off by council

Non up to 31 December 2014



Value of unauthorized, irregular or fruitless and wasteful expenditure for the past five years

Year Value Amount condoned/written off

2008-2009 0 0

2009-2010 0 0

2010-2011 949 299 949 299

2011-2012 4 358 789 4 358 789

2012-2013 4 880 441 4 880 441

Session 2


2013-2014 In-year Performance

Mid-year performance 2013-2014 financial year


Original Budget

Mid-year to date Budget

Mid-yearPerformance

2013-2014

R'000

2013-2014

R'000

2013-2014

R'000

Actual vs. Original

2013-2014%

Actual vs. Year to

date2013-2014

%

Revenue 43 186 28 199 23 444 54% 83%

Expenditure 44 986 20 620 21 413 48% 104%Operating Surplus / (Deficit)

(1 800) 7 579 2 031 -113% 27%

Percentage Variance


Kareeberg Municipality

1.



Original Budget


Mid-yearPerformance

2013-2014

R'000

2013-2014

R'000

2013-2014

R'000

Actual vs. Original

2013-2014%

Actual vs. Year to

date2013-2014

%

Revenue 23 528 25 902 8 036 34% 31%


6 262 18 154 (928) -15% -5%

Percentage Variance


Executive and council



Original Budget


Mid-yearPerformance

2013-2014

R'000

2013-2014

R'000

2013-2014

R'000

Actual vs. Original

2013-2014%

Actual vs. Year to

date2013-2014

%

Revenue 10 424 4 262 6 553 63% 154%


3 157 1 333 3 058 97% 229%

Percentage Variance


Budget and Treasury office



Original Budget


Mid-yearPerformance

2013-2014

R'000

2013-2014

R'000

2013-2014

R'000

Actual vs. Original

2013-2014%

Actual vs. Year to

date2013-2014

%


Expenditure 1 899 981 946 50% 96%Operating Surplus / (Deficit)

(1 899) (981) (946) 50% 96%

Percentage Variance


Corporate services



Original Budget


Mid-yearPerformance

2013-2014

R'000

2013-2014

R'000

2013-2014

R'000

Actual vs. Original

2013-2014%

Actual vs. Year to

date2013-2014

%


Expenditure 21 5 4 19% 82%Operating Surplus / (Deficit)

(21) (5) (4) 19% 82%

Percentage Variance


Health



Original Budget


Mid-yearPerformance

2013-2014

R'000

2013-2014

R'000

2013-2014

R'000

Actual vs. Original

2013-2014%

Actual vs. Year to

date2013-2014

%

Revenue 7 3 6 90% 206%


(1 142) (899) (487) 43% 54%

Percentage Variance


Community and social services



Original Budget


Mid-yearPerformance

2013-2014

R'000

2013-2014

R'000

2013-2014

R'000

Actual vs. Original

2013-2014%

Actual vs. Year to

date2013-2014

%

Revenue 1 0 1 96% 185%


(82) (243) (35) 43% 14%

Percentage Variance


Public Safety



Original Budget


Mid-yearPerformance

2013-2014

R'000

2013-2014

R'000

2013-2014

R'000

Actual vs. Original

2013-2014%

Actual vs. Year to

date2013-2014

%

Revenue 18 7 5 27% 69%


(553) (419) (270) 49% 64%

Percentage Variance


Sport and recreation



Solid Waste management

Original Budget


Mid-yearPerformance

2013-2014

R'000

2013-2014

R'000

2013-2014

R'000

Actual vs. Original

2013-2014%

Actual vs. Year to

date2013-2014

%

Revenue 3 096 1 009 1 551 50% 154%


593 17 1 408 237% 8452%

Percentage Variance




Waste Water management

Original Budget


Mid-yearPerformance

2013-2014

R'000

2013-2014

R'000

2013-2014

R'000

Actual vs. Original

2013-2014%

Actual vs. Year to

date2013-2014

%

Revenue 2 663 914 1 347 51% 147%

Expenditure 2 147 937 1 678 78% 179%Operating Surplus / (Deficit)

516 (23) (331) -64% 1461%

Percentage Variance




Road Transport

Original Budget


Mid-yearPerformance

2013-2014

R'000

2013-2014

R'000

2013-2014

R'000

Actual vs. Original

2013-2014%

Actual vs. Year to

date2013-2014

%

Revenue 2 1 2 122% 374%


(2 671) (970) (884) 33% 91%

Percentage Variance




Water

Original Budget


Mid-yearPerformance

2013-2014

R'000

2013-2014

R'000

2013-2014

R'000

Actual vs. Original

2013-2014%

Actual vs. Year to

date2013-2014

%

Revenue 4 115 1 803 2 025 49% 112%


3 214 1 352 1 666 52% 123%

Percentage Variance




Electricity

Original Budget


Mid-yearPerformance

2013-2014

R'000

2013-2014

R'000

2013-2014

R'000

Actual vs. Original

2013-2014%

Actual vs. Year to

date2013-2014

%

Revenue 8 421 3 387 3 918 47% 116%


(85) (649) (217) 256% 33%

Percentage Variance




Revenue by source

Original Budget


Mid-yearPerformance

2013-2014

R'000

2013-2014

R'000

2013-2014

R'000

Actual vs. Original

2013-2014%

Actual vs. Year to

date2013-2014

%

Property rates 5 005 5 005 4 237 85% 85%

Property rates - penalties & collection charges 190 106 66 35% 62%Service charges - electricity revenue

8 095 4 113 3 755 46% 91%

Percentage Variance


2.




Property rates

Property rates-collection costs/ penalties

New valuation roll. Rebates under budgeted for

Because of late levying of property rates, council extended the due date and therefor penalties will only be levied from January



Revenue by sourceOriginal Budget


Mid-yearPerformance

2013-2014

R'000

2013-2014

R'000

2013-2014

R'000

Actual vs. Original

2013-2014%

Actual vs. Year to

date2013-2014

%

Service charges - water revenue

3 789 1 925 1 862 49% 97%

Service charges - sanitation revenue

2 337 1 187 1 183 51% 100%

Service charges - refuse revenue

3 095 1 573 1 550 50% 99%

Percentage Variance




Revenue by source

Original Budget


Mid-yearPerformance

2013-2014

R'000

2013-2014

R'000

2013-2014

R'000

Actual vs. Original

2013-2014%

Actual vs. Year to

date2013-2014

%


411 188 250 61% 133%


1 297 499 380 29% 76%

Interest earned - outstanding debtors

3 2 2 46% 98%

Percentage Variance






Interest earned – external investments

Rental of facilities are invoiced during the year

The bulk of interest revenue was budgeted for in June



Revenue by source

Original Budget


Mid-yearPerformance

2013-2014

R'000

2013-2014

R'000

2013-2014

R'000

Actual vs. Original

2013-2014%

Actual vs. Year to

date2013-2014

%

Fines 12 6 3 28% 56%


7 2 5 70% 210%

Agency services

97 40 66 68% 165%

Transfers recognised - operational

17 728 12 654 9 951 56% 79%

Other revenue1 119 899 132 12% 15%

Percentage Variance





Fines

Licenses and permits

Agency services


No real pattern of revenue can be determined, thus this revenue source is budgeted for conservatively.

No real pattern of renewal of vehicle licenses can be determined, thus this revenue source is budgeted for conservatively.

No real pattern of renewal of vehicle licenses can be determined, thus this revenue source is budgeted for conservatively.

Revenue is only recognised in June 2014



Expenditure by typeOriginal Budget


Mid-yearPerformance

2013-2014

R'000

2013-2014

R'000

2013-2014

R'000

Actual vs. Original

2013-2014%

Actual vs. Year to

date2013-2014

%Employee related costs 13 915 6 623 5 937 43% 90%

Remuneration of councillors

1 881 891 884 47% 99%

Debt impairment

225 – – 0% –


1 944 – – 0% –

Finance charges

531 – – 0% –

Percentage Variance




Expenditure by typeOriginal Budget


Mid-yearPerformance

2013-2014

R'000

2013-2014

R'000

2013-2014

R'000

Actual vs. Original

2013-2014%

Actual vs. Year to

date2013-2014

%Bulk purchases 7 907 4 339 3 880 49% 89%

Other materials

431 226 180 42% 80%

Contracted services

521 273 123 24% 45%


7 536 5 024 6 897 92% 137%

Other expenditure

10 093 3 245 3 514 35% 108%


2 – – 0% –

Percentage Variance




Personnel remuneration - councillors3.

Original Budget


Mid-yearPerformanc

e

Percentage Variance

2013-2014

R'000

2013-2014

R'000

2013-2014

R'000

Actual vs. Original

2013-2014%

Actual vs. Year to

date2013-2014

%

Salary 1 333 642 635 48% 99%


444 202 212 48% 105%

Cell phone allowance

104 47 38 36% 80%

Total Councillors

1 881 891 884 47% 99%




Personnel remuneration – senior managersOriginal Budget


Mid-yearPerformanc

e

Percentage Variance

2013-2014

R'000

2013-2014

R'000

2013-2014

R'000

Actual vs. Original

2013-2014%

Actual vs. Year to

date2013-2014

%

Salary 2 668 1 344 1 174 44% 87%

Pension and UIF Contributions

353 176 166 47% 94%


124 62 57 46% 92%

Performance Bonus

203 203 139 69% 69%


413 206 206 50% 100%


20 10 0 1% 1%

Total Senior managers

3 780 2 001 1 743 46% 87%




Personnel remuneration – other staff

Original Budget


Mid-yearPerformanc

e

Percentage Variance

2013-2014

R'000

2013-2014

R'000

2013-2014

R'000

Actual vs. Original

2013-2014%

Actual vs. Year to

date2013-2014

%

Salary 7 218 3 031 3 139 43% 104%Pension and UIF Contributions

1 277 638 630 49% 99%


362 181 164 45% 90%

Overtime 200 100 143 72% 143%


68 34 34 50% 100%

Housing Allowances

16 8 5 30% 61%


399 200 47 12% 24%

Long Service Awards

– – 32 – –

Total Other staff

9 540 4 192 4 194 44% 100%


Performance in the 2013-2014 Financial Year4. 2013-2014 performance against IDP and SDBIP targets


a) Approval revised IDP Plan

b) Approval of the Annual Report 2012/13

c) Implement a Performance Management System

d) Newsletters

e) Public Meetings

f) Oversee that training in terms of the Skills Development Plan is being implemented

g) Reclaim all monies due i.t.o. Skills Development Plan

Council referred the IDP Process Plan back to shared services for completion

Could not be approved due to audit action plan referred back to MPAC

Evaluation of managers not done for quarters 1 and 2

No official was charged with the task

Mayor did not convene meetings

Insufficient funding received from LGSETA

Although all the relevant documentation is submitted the exercise is worthless




h) 100% Support for the Audit Committee.

i) Ensure that the recommendations in the External Audit report is successfully implemented

j) To facilitate active and structured public participation during the drafting of the IDP Process

k) To record the priority needs of all sectors of the community in the amended IDP document.

Audit committee is only appointed on 28th January 2014

This is an ongoing process and recommendations are reviewed monthly. All the recommendations made by the AG have not been clarified and the Audit Action Plan has not been completed.

The IDP process has not yet commenced


Performance in the 2013-2014 Financial Year4. 2013-2014 performance against IDP and SDBIP targets


l) To ensure the alignment of the IDP objectives be reflected in the municipal budget

m) 4 Ward Committee meetings per annum

n) Draft IDP for approval by Council

o) Facilitate community meetings for Mayor per town.

p) The dumping of all waste at the waste sites and administering the maintenance of the dumping site.


Only first quarter. No quorum could be assembled

IDP Process Plan was referred back to the shared services

Mayor did not convene meetings

The only contractor available was not approved for the cleaning of the waste sites. The community dumps waste irresponsibly




q) Manage maintenance all electrical distribution machinery and mechanical equipment. (excl. Eskom)

r) Manage maintenance of assets

s) Manage the maintenance of the municipal vehicles fleet and equipment

Lack of necessary cash



Mid-year SDBIP performance against targets for 2013-2014


Kareeberg MunicipalityIDP Objective

Project Baseline Status Quo

Measurable Performance Indicator

2013-2014 Original SDBIP Target

2013-2014 Revised SDBIP Target

Actual Perfor-mance for 2013-2014

2013-2014 Original Budget

2013-2014 Year to date Budget

2013-2014 Mid-year Perfor-mance

Provide paved roads in Carnarvon

To provide recreational facilities in Carnarvon

Cemetries in Vanwyksvlei and Vosburg

Paving of gravel roads in Carnarvon

Upgrading of sport complex in Carnarvon

Cemetries in Vanwyksvlei and Vosburg

1,338km of gravel roads in Carnarvon

Insufficient sport facilities in Carnarvon

Insufficient burial space in Vanwyksvlei and Vosburg

Replace 1,338km of gravel roads with paving

Sport complex in Carnarvon

New cementries in Vanwyksvlei and Vosburg

1 338m

Sport Complex

Cementry in Vanwyksvlei and Vosburg

1 338m

Sport Complex

Cementry in Vanwyksvlei and Vosburg

0m

0

0

4 189 000

4 900 000

400 000

4 189 000

4 900 000

400 000

123 273

406 509

0

4.

Infrastructure delivery achievement against 2013-2014 infrastructure


5. Infrastructure projectsProject 2013-2014 2014-2015 2015-2016

Upgrade of streets

Bulk water supply - Vanwyksvlei

Upgrade of water network

Upgrading of refuse site-Carnarvon

Surface of runway-airstrip

Upgrade of sports field-Carnarvon

Erection of speed humps

4 189

4 500

15 000

7 850

13 700

1 000

3 000

300



5. Infrastructure projectsProject 2013-2014 2014-2015 2015-2016

Layout of cemetery-Vanwyksvlei

Layout of cemetery – Vosburg

Erection of High Mast Light-Carnarvon

Placing of refuse containers

Upgrading of heritage sites

Building of taxi rank

Purchase of additional commonage

200

200

200

500

1 000

500

1 533



Infrastructure projects brought forward

Upgrade of sports field-Carnarvon

Challenges during project implementation

Changes in plans for the sport complex CIBD-ratings of contractors not renewed

Reasons for slow performance

Changes in plans for the sport complex CIBD-ratings of contractors not renewed

Impact on grant spending

Conditional grants will be spent in full

Conditional Grants performance per grant type 2013-2014


Original Budget

2013-2014R'000

Actual Outcome

2013-2014R'000

Actual Outcome

2013-2014%

Full Year Forecast

2013-2014 R'000

Operating GrantsFinance Management 1 650 1 001 61% 1 650 Municipal Systems Improvement 890 375 42% 890 EPWP Incentive 1 000 519 52% 1 000

Provincial GovernmentSport and recreation 720 225 31% 720

Total Operating Grants 4 260 2 120 50% 4 260

Capital GrantsMunicipal Infrastructure Grant (MIG)9 089 234 3% 9 089

Total Capital Grants 9 089 234 3% 9 089

2014 Adjustments Estimate


Is the adjustments budget completed in B-Schedule format?

Have the adjustments budget been reviewed by the budget steering committee?

Have the necessary adjustments to the SDBIP and performance agreements been made?

When will the adjustments budget be tabled before council?

Was there a presentation made and explanation given for the proposed adjustments?

Is the adjustments budget properly funded i.t.o. Tables A7 and A8?

Were there any significant reductions/ additions that stems from poor planning processes?

No budget benchmark was done for the 2013-2014 adjustments budget

Yes

Yes

No

28 February 2014

Yes

Yes

No

Status of 2014-2015 Budget Preparation Process


Has the municipality tabled the 2014-2015 IDP and budget process schedule in council by 31 August 2013?

Yes

Activity Responsibility Target Date Progress against Target

Explanation for non-compliance

Table before council the schedule of key deadlines

Budget steering committee meeting

Revision of the IDP

Workshop with heads of department

Accounting officer

Mayor

Mayor

CFO

31 August 2013

30 November 2013

30 November 2013

30 November 2013

Tabled before council on 28 August 2013

13 December 2013

N/A

N/A

Process Plan only approved 28 January 2014

The size of the municipality does not justify to hold workshops. It forms part of the budget steering committee

Status of 2013-2014 Budget Preparation Process


Activity Responsibility Target Date Progress against Target

Explanation for non-compliance

Advertise for input from community

Accounting officer

30 November 2013 No input or comments received

Has the municipality included dates for the 2014 MTREF Municipal budget and benchmark engagement schedule to take place between April and May 2014?

Yes – Treasury to supply dates

Session 3


Financial Management Issues

Institutional arrangements


Budget and Treasury Office

Supply Chain Management

Internal Audit

Vacancies

Competencies of personnel

All personnel has more than one function because of a small staff establishment

Only three managers on adjudication committee. Specification and evaluation committees established.

The municipality makes use of the shared services unit from Pixley ka Seme District Municipality

There are no vacancies at administrative level

Three senior managers have acquired the necessary unit standards equal to NQF level 6

One senior accountant has acquired the necessary unit standards equal to NQF level 6

Institutional arrangements


Competencies of personnel

Further finance management training

Four junior staff members have successfully completed NQF level 4 training

Three junior staff members completed SAQA 48965

All personnel were accorded the opportunity to enroll for training

MFMA Issues


Status of MFMA compliance

Update on MFMA system of delegations

Management of asset/ GRAP compliance

Management of liabilities

The municipality strive to comply with the MFMA

The municipality has delegations

The municipality’s asset register is GRAP compliant. The financial statements are compiled in accordance with GRAP standards

Employee benefits comprise the bulk of liabilities(R 7 710 858)

Provision for rehabilitation of landfill sites(R 7 337 450)

Unspent conditional grants(R 6 259 145-31/12/2013)

Consumer deposits and other payables amount to R 5 123 337

MFMA Issues


Status on supply chain management

Revenue/ debtor management

Status on internal audit

Timely payment of creditors

All staff members in the BTO handles supply chain when necessary

Debtors have increased by R 2 499 878 for the six months

The credit control and debt collection by-law regulates debt management

Shared services at Pixley ka Seme DM renders the internal audit function. Internal audit is done each quarter where after the audit committee convenes and takes note of the internal audit report and makes recommendations to council if necessary

All trade creditors are paid within 30days

Audit Action Plans


Plans to address issues raised by the Auditor General in 2012-2013 report

Repeat issues

Status on preparation of 2012-2013 annual financial statements

Draft audit action plan was approved by MPAC but council referred it back to MPAC.

Predetermined objectives have not been reported on

AFS has been submitted and audit has been completed

Section 139 Interventions

At this stage council is not aware of any section 139 intervention

Session 4


Risk Management

Top ten risks in the municipality


Risk name Assigned to Progress made to date

Alignment with IDP and Budget

1. Dumping of rubbish on open spaces and in trenches

2. Pot holes in tarred roads

3. Insufficient cash

4. Unsafe electrical installations

5. No lasting water resources-Vanwyksvlei

6. Condition of refuse sites

Chief Operational Manager


Head: Finance




Wait for council resolution on the way forward

Personnel shortage hampers the project

Consumers handed over to attorneys and reminders sent


Consultants busy with test of underground water yields


Part of maintenance budget


Included in the IDP project list




Risk name Assigned to Progress made to date

Alignment with IDP and Budget

7. Over grazing of commonage

8. Limited maintenance of assets

9. Stray animals in streets

10. Overflow of oxidation ponds

11. Operation Clean Audit 2014


Chief Operational Manager/ Head: Finance



Accounting officer


Council is regularly informed about the status of maintenance

Animals are pounded during normal office hours, it is however a problem after hours

Consultant busy with business plans to build additional ponds

MPAC recommended that consultants be appointed to finalise the whole issue in connection with predetermined objectives

Part of the maintenance budget



Has a formal risk register been drafted?

Has the municipality appointed a Chief Risk Officer?

What internal structures have been established to deal with risk management?

Have risks been aligned with IDP and budget?

Yes

Yes

None

Partially

I Thank you


Brennan Rossouw

Head: Finance

2013-2014 mid-year budget and performance assessment 18 february 2014 sustainable development

Documents

maintenance slide

audited financial performance

financial statements

skills development plan

performance assessment

review of performance

financial position

kareeberg local municipality