idp outcome 9: a strategic strategy key ref performance

Amahlathi Local Municipality – 2019/20 Annual Report

110 | P a g e

IDP Ref

Outcome 9: A Responsive

Strategic Objective

Strategy Key Performance Indicator

Annual Target 2019/20

Annual Actual 2018/19


Reason/Comment and Corrective Action

Custodian KPI NO

deferred to 1st quarter 2020-21

5.17 Developed fleet and fuel monitoring strategy submitted to Council for adoption

Developed fleet and fuel monitoring strategy submitted to Council for adoption

New Indicator Target not met Draft strategy has been developed but not submitted to Council for adoption.

Policy workshop where the draft strategy was to be presented before adoption was disrupted and there was national lockdown thereafter. Target deferred to 2020-21 financial year.

Director: Corporate Services

90

5.18 Efficient and economical utilization of council resources

% decrease in telephone expenditure

20% decrease in telephone expenditure

Target met 76.82% decrease on telephone expenditure during 2018/19.

Target met 26.18% decrease in telephone expenditure

N/A Director: Corporate Services

91

5.19 To ensure compliant and prudent safeguarding and preservation

Establishment of legal frameworks, standards and ethical principles to

No. of reports prepared on implementation with the file plan

4 reports prepared on implementation with the file plan

Target met 4 reports prepared on compliance with file plan.

Target met 4 reports prepared on implementation with the file plan

N/A Director: Corporate Services

92


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IDP Ref


Strategic Objective






Custodian KPI NO

of institutional memory by 2022 and beyond

protect the confidentiality of data

5.20 To develop and

implement effective and

compliant frameworks to improve

planning and performance management

by 2022

Integrated Planning and Development

Date on which the 2020/20 IDP is submitted to Council for approval

2020/21 IDP submitted to Council for approval by Council by 31st May 2020

Target met Final IDP submitted to Council on the 31st of May 2019. Council resolution attached Final IDP attached

Target met 2020/21 IDP was submitted to Council on the 29th May 2020

N/A Director; Strategic Services

93

5.21 Improve the effective

functionality and credulity

of the performance management

System

No. of days by which the 2020/21 SDBIP is submitted to the Mayor for approval

2020/20SDBIP submitted to the Mayor for approval by the 28th day after approval of the budget

Target met 2019/20 SDBIP was submitted to Mayor and approved on the 25th June 2018 SDBIP and Proof of submission and approval

Target met SDBIP was submitted to the Mayor approval by the 24th


94

5.22 No of accountability agreements signed

75 accountability agreements signed

Target not met 65 accountability

Target not met 29 accountability agreements

Non submission by departments. Employees


95


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IDP Ref


Strategic Objective






Custodian KPI NO

signed during first quarter

were signed during Q1 of 2019/2020 financial year

were not available due national lockdown. Target deferred to next financial year

5.23 No. of individual performance reviews coordinated (Task grade 12 and upwards)

4 Quarterly individual Performance Reviews coordinated (Task grade 12 and upwards)

Target not met 1 quarterly report prepared on individual performance reviews (Task Grade 12 upwards.)

Target not met No reviews conducted

Variance report attached indicating that the non-submission by departments. Reviews could not be conducted due to national lockdown


96

5.24 No. of quarterly organizational performance reports submitted to Council

4 quarterly organizational performance reported submitted to Council

Target met 4 quarterly organizational performance reports submitted to Council in July 2018, October 2018, March 2019 and May 2019.

Target not met 3 quarterly organizational performance reports submitted to Council. Third quarter report was not submitted to Council

Target not met due covid-19 pandemic regulations that affected municipal operations. Report will be submitted during the 1st quarter of

Director; Strategic Services

97


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IDP Ref


Strategic Objective






Custodian KPI NO

2020-21 financial year.

5.25 Date on which the 2018/19 final and audited Annual Report is submitted to Council and AG

2018/19 Annual report submitted to Council and AG by 31 August 2019

Target met Copy of 2017/18 Audited Annual Report was submitted to AG in August 2017. Attached. Oversight report not attached.

Target met Copy of Unaudited Annual Report, Council resolutions and proof of Submission to Treasury and AG attached by 31st August 2019


98

5.26 To promote sustainable Local economic development by 2022

Development and implementation of the Spatial Development Framework

Presentation of 1st draft SDF to stakeholders

Presentation of 1st draft SDF to stakeholders

Target not met Service provider was appointed in May 2018, Inception report has been attached on the file for the progress made

Target not met Situation analysis developed

This entailed extensive stakeholder engagement, which couldn’t be scheduled due to the COVID-19 lock down regulations. The stakeholder roadshows that precede this have now been

Director Development and Planning

99


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IDP Ref


Strategic Objective






Custodian KPI NO

scheduled for Q1 20/21

5.27 Reviewal of the Local Economic Development Strategy

Developed LED Strategy Situational Analysis report presented to Stakeholders

Developed LED Strategy Situational Analysis report presented to Stakeholders

Target not met

Target not met

Project affected by covid-19 pandemic. Project be uplifted when operations back to normal


100

5.28 Ensure effective and efficient land administration within Amahlathi Local Municipality

Presentation of zoning scheme draft analysis report to stakeholders

Presentation of zoning scheme draft analysis report to stakeholders

Target not met No appointment made due to financial constraints

Target not met Service provider appointed and inception report has been provided

This entailed extensive stakeholder engagement, which couldn’t be scheduled due to the COVID-19 lock down regulations which also kept Municipal staff at home. Target revised & more appropriate targets set for 20/21


101

Amahlathi Local Municipality- Annual Report 2019/2020

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CHAPTER 4: ORGANISATIONAL DEVELOPMENT PERFORMANCE

4.1 INTRODUCTION

There are 6 section 56 managers at the employ of the Municipality and they had signed performance agreements which all

have been submitted to the Department of Local Government and Traditional Affairs within the required time frames.

Three of the directors left the municipality. The positions have been advertised to fill in the vacant positions through

recruitment processes.

The 6 section 56 managers lead the following departments

Engineering Services

Community Services

Development and Town Planning

Budget and Treasury Office

Corporate Services

Strategic Services (Resigned and the position was not filled up)

Full time staff complement per functional area

Employees

Description

Year 18/19 Year 2019/20

Employees Approved Posts Current

year Total No

No. Employees

Corporate Services 22 0 0 21

Development and Planning 19 0 0 19

Engineering Department 89 0 0 84

Community Services 117 0 0 115

Executive Services 33 0 0 30

Strategic Services 9 9

BTO 31 0 0 31

Totals 320 0 0 309

Headings follow the order of services as set out in chapter 3. Service totals should equate to those included in the

Chapter 3 employee schedules. Employee and Approved Posts numbers are as at 30 June, as per the approved

organogram.


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Vacancy Rate: Year 2019/20

Designations

*Total

Approved

Posts

*Vacancies (Total time

that vacancies exist using

fulltime equivalents)

*Vacancies

(as a proportion of total

posts in each category)

No. No. %

Municipal Manager 1 0 100.00

CFO 1 0 100.00

Other S56 Managers (excluding

Finance Posts)

4 2 50%

Other S56 Managers(excluding

Finance Posts) Vacant

1 1 100.00

Senior Manager Levels 13-15 37 3 11.1%

Highly skilled supervision levels 9-12 288 137 39.45%

Total 332 143 47.47%

Note: *For posts which are established and funded in the approved budget or adjustments budget (where changes in

employee provision have been made). Full-time equivalents are calculated by taking the total number of working days lost

(excluding weekends and public holidays) while a post remains vacant and adding together all such days lost by all posts

within the same set (e.g. ‘senior management’) then dividing that total by 250 to give the number of posts equivalent to the

accumulated days.

Turn-over Rate

Details

Total Appointments as of

beginning of

Financial Year

Terminations during the

Financial Year Turn-over Rate*

No. No.

Year (2019 / 2020) 0

Resignations - 6

Retirement - 5

Death – 0

Dismissals– 1

Total Promotions -0

0 12 3.88%

* Divide the number of employees who have left the organisation within a year, by total

number of employees who occupied posts at the beginning of the year T 4.1.3


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4.2 MANAGING THE MUNICIPAL WORKFORCE

HR Policies and Plans

Name of Policy Completed Reviewed Date adopted by council

or comment on failure to

% . adopt

1 Code of conduct for councillors 100 16 September 2019 30 October 2019

2 Rules of order 100

16 September 2019 30 October 2019

3 Petitions Policy 100 16 September 2019 30 October 2019

4 Code of conduct for ward

committees

100 16 September 2019 30 October 2019

5 Career Management policy 100 16 September 2019 30 October 2019

6 Experiential training policy 100 16 September 2019 30 October 2019

7 Scarce Skills Policy 100 16 September 2019 30 October 2019

8 Employee study assistance

policy


9 Training and development policy 100 16 September 2019 30 October 2019

10 Acting allowance policy 100 16 September 2019 30 October 2019

11 Bereavement Policy 100 16 September 2019 30 October 2019

12 Leave Policy 100 16 September 2019 30 October 2019

13 Policy on policy development 100 16 September 2019 30 October 2019

14 Fleet management Policy 100 16 September 2019 30 October 2019

15 Subsistence and Travelling

Policy


16 Official transport to attend

Funerals (Bereavement Policy)


17 Job Evaluation review policy 100 16 September 2019 30 October 2019

18 Occupational health and safety

policy


19 Overtime and shift allowance

policy


20 Performance Management and

Development


21 Recruitment, Selection policy 100 16 September 2019 30 October 2019

22 Code of conduct for staff

members


23 Long Service Allowance Policy 100 16 September 2019 30 October 2019

24 Grievance procedure 100 16 September 2019 30 October 2019

25 Skills Development policy 100 16 September 2019 30 October 2019

26 Staff retention policy 100 16 September 2019 30 October 2019


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4.3 SICK LEAVE

Number and Cost of Injuries on Duty

Type of injury Injury Leave Taken

Employees using injury leave

Proportion employees using sick leave

Average Injury Leave per employee

Total Estimated

Cost

Days No. % Days R'000

Required basic medical attention only

0 0 0% 0 0

Temporary total disablement

0 0 0% 0

Permanent disablement

0 0 0% 0 0

Fatal 0 0 0% 0

Total 0 0 0 0

T 4.3.1

Number of days and Cost of Sick Leave (excluding injuries on duty)

Salary band

Total sick

leave

Proportion of sick leave

without medical

certification

Employees using

sick leave

Total employees in post*

*Average sick

leave per Employe

es

Estimated cost

Days % No. No. Days R' 000

Lower skilled (Levels 2-5)

116 2.58% 20 100 1.16

Skilled (Levels 6-11)

331 7.55% 50

125 2.64

Highly skilled production (levels 12-19)

261 9.96% 36 77 3.38

Interns 0 0% 0 0 0

Other (task grade pending)

0 0% 0 1 1.25

MM and S57 8 0% 2 6 1.3

Total 716 7.68% 108 303 2.36 * - Number of employees in post at the beginning of the year T 4.3.2

27 Telephone usage and cellular

allowance phone


28 Records Management Policy 100 16 September 2019 30 October 2019

29

Uniforms and Protective

Clothing (Health and Safety

Policy)


Use name of local policies if different from above and at any other HR policies not listed. T 4.2.1


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Number and Period of Suspensions

Position Nature of Alleged

Misconduct

Date of

Suspension

Details of Disciplinary Action taken or Status of Case and

Reasons why not Finalised

Human Resources

Development

Manager

Insolent behaviour/

Conduct

Gross Misconduct

Not

Suspended

03 May 2018

We have appointed a new presiding officer and a prosecutor to convene on this matter. Because of

the pandemic we had to put the matter on hold.

Senior Electrician Three Counts of Gross

Misconduct

02 May 2019 Disciplinary hearing was scheduled for the 26th of March but due to the Covid-19 pandemic we

had to postpone the matter.

Artisan Assistant Gross Misconduct 02 May 2019 Disciplinary hearing was scheduled for the 26th of March but due to the Covid-19 pandemic we

had to postpone the matter.

Amahlathi Local Municipality –2019/20 Annual Report

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4.4 CAPACITATING THE MUNIPAL WORKFORCE - SKILLS DEVELOPMENT AND TRAINING

SKILLS DEVELOPMENT MATRIX

Skills Matrix

Management

Level

Gender Employee

s in post

as

at 30 June

Year 2020

Number of Skilled employees required and actual as at 30 June Year

2020

Learnership

s

Skills programmes & other short

courses

No. Actual:

End of

Year 2019

Actual: End

of Year

2020

Year

2020Targe

t

Actual:

End of

Year 2020

Actual: End

of Year 2020

No. Actual:

End of

Year

2019

Actual: End

of Year 2020

Year

2020Target

Actual:

End of

Year 2020

MM and s56 Female 0 0 0 0 0 Female 0 0 0 0 0

Male 0 0 0 0 0 Male 0 0 0 0 0

Councillors, senior

officials and

managers

Female 0 0 0 0 0 Female 0 0 1 1 0

Male 0 0 0 0 0 Male 0 0 0 0 0

Technicians and

associate

professionals*

Female 0 0 0 0 0 Female 0 0 0 0 0

Male 0 0 0 0 0 Male 0 0 0 0 0

Professionals Female 0 0 0 0 0 Female 2 2 0

Male 0 0 0 0 0 Male 0 0 0

Semi-Skilled and

Unskilled

Female 0 0 0 0 0 Female 0 0 0 0 0

Male 0 0 0 0 0 Male 0 0 0 0 0

Sub total Female 0 0 0 0 0 Female 0 0 3 3 0


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Male 0 0 0 0 0 Male 0 0 0 0 0

Total 0 0 0 0 0 0 0 0 3 3 0

*Registered with professional Associate Body e.g. CA (SA) T 4.5.1


122 | Page

Financial Competency Development: Progress Report*

Description

A.

Total number of

officials

employed by

municipality

(Regulation

14(4)(a)

and (c))

Description

A.

Total number of

officials

employed by

municipality

(Regulation

14(4)(a)

and (c))

Description

A.

Total number of

officials employed

by municipality

(Regulation 14(4)(a)

and (c))

Description

Financial Officials Financial Officials Financial

Officials

Financial Officials

Accounting officer 1 Accounting officer 1 Accounting

officer

1 Accounting officer

Chief financial officer 1 Chief financial

officer

1 Chief financial

officer

1 Chief financial officer

Senior managers 3 Senior managers 3 Senior managers 3 Senior managers

Any other financial officials 30 Any other financial

officials

30 Any other

financial officials

30 Any other financial officials

Supply Chain

Management Officials

Supply Chain

Management

Officials

Supply Chain

Management

Officials

Supply Chain

Management Officials

Heads of supply chain

management units

0 Heads of supply

chain

management units

0 Heads of supply

chain

management

units

0 Heads of supply chain

management units


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Supply chain management senior

managers

1 Supply chain

management

senior managers

1 Supply chain

management

senior managers

1 Supply chain management

senior managers

TOTAL 36 TOTAL 36 TOTAL 36 TOTAL

* This is a statutory report under the National Treasury: Local Government: MFMA Competency Regulations (June 2007) T 4.5.2


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1.5 MANAGING THE WORKFORCE EXPENDITURE

Designation Wages and benefits 2018/19 Wages and benefits 2019/20

Municipal Manager R1 307 667 R1 303 761

Corporate Services Manager R946 669 R774 048

Planning and Development Manager R554 954 R830 434

Engineering Services Manager R960 080 R803 635

Community Services Manager R554 953 R830 434

Finance Manager (CFO) R946 564 R946 669

EMPLOYEE RELATED COSTS 2018/19 2019/20

Basic R83 405 084 R84 192 301

Bonus R6 662 704 R6 960 305

Medical aid contributions R5 841 298 R6 155 797

UIF R576 959 R552 122

Travel, motor car, accommodation, subsistence and other allowances R1 880 364 R1 752 665

Overtime payments R629 114 R1 037 209

Acting allowance R272 443 R383 157

Travel allowance R5 335 549 R5 367 477

Housing benefit and allowances R3 262 300 R3 136 500

Industrial Council Levy R34 548 R 35 351

Pension fund contributions by Council R14 231 592 R14 893 583

REMUNERATION OF COUNCILLORS 2018/19 2019/20

Mayor R594 415 R840 313

Speaker R508 076 R683 003

Council Salaries R7 114 595 R7 094 938

Councillor allowances R3 238 448 R3 375 213


125 | P a g e

CHAPTER 5: FINANCIAL PERFORMANCE

5.1 INTRODUCTION

This chapter contains information regarding financial performance and highlights specific accomplishments. The

chapter comprises of three components:

• Component A: Statement of Financial Performance

• Component B: Spending Against Capital Budget

• Component C: Other Financial Matters


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COMPONENT A: STATEMENT OF FINANCIAL PERFORMANCE

Reconciliation of Table A1 Budget Summary

Description Year 2019/20 Year -2018/19

R thousands

Original

Budget

Budget

Adjustments (i.t.o. s28 and s31 of the

MFMA)

Final

adjustments budget

Shifting

of funds (i.t.o. s31 of the MFMA)

Virement

(i.t.o. Council approved policy)

Final

Budget

Actual

Outcome

Unauthori

sed expenditure

Varianc

e

Actual

Outcome as % of Final

Budget

Actual

Outcome as % of Original Budget

Reported

unauthorised expenditure

Expenditure

authorised in terms of section 32 of MFMA

Balance

to be recovered

Restated

Audited Outcome

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

Financial Performance

Property rates 17 659 –

17 659 17 659 20 209 13% 114% 114% 17 885

Service charges 55 161 (10 000) 45 161 45 161 38 497 -17% 85% 70% 38 208

Investment revenue 1 894 – 1 894 1 894 1 434 -32% 76% 76% 965

Transfers recognised -

operational

112 541 1 452 113 993 113 993 111 626 -2% 98% 99% 101 005

Other own revenue 10 184 37 710 47 894 47 894 64 765 26% 135% 636% 15 845

Total Revenue

(excluding capital transfers and contributions)

197 439 29 162 226 601

–

–

226 601 236 533 173 908

Employee costs 115 165

(227)

109 137 109 137 124 000 15 346 12% 114% 108% 126 609

Remuneration of councillors

12 244 –

12 244 12 244 11 993 -2% 98% 98% 11 456

Debt impairment 2 500

–

10 000 10 000 32 644 22 644 69% 326% 1306% 9 366

Depreciation & asset impairment

28 000 –

26 000 26 000 26 598 598

2% 102% 95% 26 784

Finance charges

100

900

1 000 1 000 2 667 1 667 63% 267% 2667% 576

Materials and bulk purchases

31 848 –

31 848 31 848 33 309 1 696 4% 105% 105% 28 928

Transfers and grants

–

–

–

–

–

–

–

0% 0% 0% – –

–


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Other expenditure 35 869 10 792 36 483 36 483 42 570 14% 117% 119% 88 861

Total Expenditure 225 725 11 465 226 712 –

–

226 712 273 781 – 292 577

Surplus/(Deficit) (28 286) 460 (111) (111) (37 249) (118 669)

Transfers recognised - capital

43 632 (5 500) 38 132 38 132 12 317 -2

32% 28% 20 745

Contributions recognised - capital &

contributed assets

–

–

Surplus/(Deficit) after capital transfers & contributions

15 346 (5 040) 38 021 –

–

38 021 (24 931) - (97 924)

Loss on disposal of assets

(3 128)

(8 361)

Fair value gain on biological assets

–

Loss on disposal of biological assets

–

–

(200)

(2 999)

Surplus/(Deficit) for the

year

15 346 (5 040) 38 021

–

38 021 (28 260) (109 285)

Capital expenditure & funds sources

Capital expenditure

Transfers recognised - capital

43 632 (5 500) 38 132 38 132 13 298 -187% 35% 30% 20 745

Public contributions &

donations

–

Borrowing –

Internally generated

funds

100

5 700 5 800 5 800

351

-1551% 6% 0% –

Total sources of capital funds

43 732 200

43 932 –

43 932 13 649 –

-1737% 41% 30% – – –

20 745

Cash flows

Net cash from (used) operating

43 068 (9 764)

59 292

59 292

50 320

-18% 85% 117% 20 932

Net cash from (used)

investing

(43 232)

(700)

(43 932) 43 932) (11 932) -268% 27% 28% (17 707)

Net cash from (used) financing

–

–

–

–

(172)

212

Cash/cash equivalents

at the year end

6 758 (27 026) 25 719 25 719 48 330 10 115

T 5.1.1

Notes


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3 = sum of column 1 and 2 2 represents movements in original budget to get to final adjustments budget

(including shifting of funds) Virements must offset each other so that virements in Total Expenditure equals zero 6 = sum of column 3, 4

and 5 8 does not necessarily equal the difference between 9 and 8 because overspending is not the only reason for unauthorised expenditure

9 = 7 - 6

10 = (7/6)*100

11 = (9/1)*100

14 = 13 - 12 15 in revenue equals Audited Outcome plus funds

actually recovered 15 in expenditure equals Audited Outcome less funds actually recovered 15 in Cash Flow equals Audited

Outcome plus funds recovered

This schedule must be part of the financial statements of the municipality (all other schedules, A2 - A7, should form part of the annexures to the financial statements. These schedules do not directly form part of the

audit opinion)


129 | P a g e

Financial Performance of Operational Services

R '000

Description

Year -2018/19 Year 2019/20 Year 2019/20

Variance

Actual Original Budget

Adj Budget Actual Original Budget

Adj Budget

Operating Cost

Electricity (3 868) 14 179 (1 321) (8 930) 259% 85%

Waste Management 7 387 4 165 5 061 (4 401) 195% 215%

Housing (37) (2 253) (2 486) 6 35159% 38782%

Component A: sub-total 3 481 16 091 1 254 (13 324)

Roads 47 236 (53 353) (48 962) (46 373) -15% -6%

Component B: sub-total 47 236 (53 353) (48 962) (46 373)

Planning & Development (7 144) 29 902 29 935 4 603 -550% -550%

Component B: sub-total (7 144) 29 902 29 935 4 603

Community & Social Services 10 793 (9 308) (9 284) (7 236)

-29% -28%

Environmental Protection – (461) (879) – 100% 100%

Public Safety 2 259 (2 250) (2 250) (2 589) 13% 13%

Sport and Recreation 2 558 3 621 3 621 2 066 -75% -75%

Component D: sub-total 15 610 (8 398) (8 792) (7 759)

Total Expenditure 59 183 (15 758) (26 565) (62 853)

In this table operational income is offset against operational expenditure leaving a net operational expenditure total for each service as shown in the individual net service expenditure tables in chapter 3. Variances are calculated by dividing the difference between actual and original/adjustments budget by the actual. T 5.1.2

R' 000

Description

Year -2018/19 Year 2019/20 Year 2019/20

Variance

Actual Budget Adjustments Budget


(%)

Adj Budget

(%)

Operating Transfers and Grants

National Government: 101 187 111 341 111 937 110 426

Equitable share 97 114 105 863 105 863 105 863 0% 0%

FMG Grant 1 770 2 235 2 235 2 235 0% 0%

EPWP Grant 921 1 236 1 236 887 -39% -39%

PMU 5% 1 382 2 007 2 007 1 123 -79% -79%

Disaster Relief Grant – – 596 318 100% -88%

Provincial Government: 1 200 1 200 1 200 1 200

Sports and Recreation 1 200 1 200 1 200 1 200 0% 0%

District Municipality: – – – – –

–

Other grant providers: – – 356 –

Waste Grant – – 356 – #DIV/0! #DIV/0!


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Seta Grant – – – – 0% 0%

Total Operating Transfers and Grants

102 387 112 541 113 493 111 626

Variances are calculated by dividing the difference between actual and original/adjustments budget by the actual. Full list of provincial and national grants available from published gazettes. T 5.2.1

Grants Received From Sources Other Than Division of Revenue Act (DoRA) Details of Donor Actual Grant

Year -2016/17 Actual Grant Year

2017/18

Year 2017/18

Municipal Contribution

Date Grant terminates

Date Municipal

contribution terminates

Nature and benefit from the

grant received, include

description of any

contributions in kind

Parastatals

A - "Project 1" - -

- N/A N/A N/A

Foreign Governments/Development Aid Agencies

A - "Project 1" - -

- N/A N/A N/A

Private Sector / Organisations

A - "Project 1" - -

- N/A N/A N/A

Provide a comprehensive response to this schedule T 5.2.3


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5.2. ASSET MANAGEMENT

The Amahlathi Local Municipality believes that an Asset Management Policy is essential to ensure effective and efficient

utilization of public monies and accountability thereof is heavily dependent on accurate recoding and accounting with the

compilation of the Asset Register that is GRAP compliant. The policy is deemed necessary in order to facilitate the effective

management, control and maintenance of the assets. The prime objectives of the policy is to ensure that the assets of

Amahlathi Municipality are properly managed and accounted for by:-

Ensuring the accurate recording of asset information

The accurate recording of asset movements

Exercising strict control over all assets

Providing correct and meaningful management information

Affecting adequate insurance of all assets

Maintenance of Council’s Assets

The policy is reviewed and amended by council annually during IDP and Budget process. The last review was done in May

2019.

An asset tracking system using bar-coded discs and scanners is implemented. The system allows for regular audits of all

assets to be completed in a shorter time frame and therefore allowing for more regular updates of the register.

TREATMENT OF THE THREE LARGEST ASSETS ACQUIRED YEAR 2019/20

Asset 1

Name Mlungisi Sport field

Description Construction of Mlungisi Sport field

Asset Type Community Assets

Key Staff Involved 2

Staff Responsibilities Monitoring, Managing & Reporting on the implementation of the Project

Asset Value

Year 21/22 Year 20/21 Year 19/20 Year 18/19

12 000 000.00 4 352 300.00

Capital Implications 12 000 000.00

Future Purpose of Asset To provide the community with at least a basic level of service

Describe Key Issues

Policies in Place to Manage Asset Asset Management Policy

Asset 2

Name KKH Paving

Description Construction of KKH Paving

Asset Type Road Infrastructure



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Asset Value


4 000 000.00



Describe Key Issues

Policies in Place to Manage Asset Asset Management Policy

Asset 3

Name Mlungisi Access Road

Description Construction of Mlungisi Access Road

Asset Type Roads Infrastructure



Asset Value


3 500 000.00 4 400 000.00



Describe Key Issues

Policies in Place to Manage Asset Asset Management Policy, Roads Maintenance Policy

T 5.3.2

Repair and Maintenance Expenditure: Year 2019/20

R' 000

Original Budget

Adjustment Budget

Actual Budget

variance

Repairs and Maintenance Expenditure

4 828

3 828

2 321 52%

T 5.3.4


133 | P a g e

Financial Ratios

No. Financial Viability Assessment

Jun-19 Jun-20

Expenditure Management

1.1 Creditors Payment Period 278.3 days 417.8

Revenue Management

2.1 Debt Collection Period (after impairment) 169.3 days 59.4 days

2.2

Debt impairment provision as percentage of accounts receivable

65.5%

81.6%

Amount of debt impairment provision R47 613 476 R80 257 034

Amount of accounts receivable R72 735 327 R98 331 951

Asset & Liability Management

3.1

A deficit for the year was realized (total expenditure exceeded total revenue) Yes

Yes

Amount of surplus/deficit for the year

(R109 284 653)

(28 259 898)

3.2

A net current liability position was realized (total current liabilities exceeded total current assets)

Yes

Yes

Amount of net current asset position

(R67 424 488)

(79 437 522)

3.3 A net liability position was realized (total liabilities exceeded total assets)

No

No

Amount of net asset position

R295 157 676

R266 897 784

Cash Management

4.1

The year-end bank balance was in overdraft

No

No

Amount of year end bank balance (Cash & Cash Equivalents)

R10 144 498

R48 330 017

4.2

Net cash flow for the year from operating activities were negative

No

No

Amount of net cash inflow for the year from operating activities

R20 931 558

R50 319 668

4.3

Creditors as a percentage of cash & cash equivalents

730.7%

178.5%

Amount of creditors (accounts payable) R73 900 082 R86 263 309

Amount of cash and cash equivalents at year end

R10 114 148

R48 330 017

4.4

Current liabilities as a percentage of next year’s budgeted resources 91.5% 147.8%

Amount of current liabilities R103 975 135 R152 384 625

Amount of next year’s budget income R113 662 000 R103 075 000


134 | P a g e

COMPONENT B: SPENDING AGAINST CAPITAL BUDGET

Capital Expenditure - Funding Sources: Year -2018/19 to Year 2019/20

R' 000

Details

Year -2018/19 Year 2019/20


(OB)

Adjustment Budget

Actual Adj to OB

Variance (%)

Actual to OB

Variance (%)

Source of finance

External loans

Public contributions and donations

Grants and subsidies 20 745 43 632 38 132 12 317 -13% -72%

Other – 100 5 800 1 332 0% 0%

Total 20 745 43 732 43 932 13 649 -13% -72%

Percentage of finance

External loans

Public contributions and donations

Grants and subsidies 100.0% 99.8% 86.8% 90.2% 87% 90%

Other 0.0% 0.2% 13.2% 9.8% 0% 0%

Capital expenditure

Water and sanitation

Electricity 5 000 5 500 – 981 -100% -82%

Housing – – – –

MIG Projects 14 594 38 132 38 132 12 317 0% -68%

Other 1 151 100 5 800 351 5700% 251%

Total 20 745 43 732 43 932 13 649 5600% 102%

Percentage of expenditure

Water and sanitation - - - - 0% 0%

Electricity 24.1% 12.6% 0.0% 7.2% -2% -81%

Housing - - - - 0% 0%

Roads and storm water 70.3% 87.2% 86.8% 90.2% 0% -67%

Other 5.5% 0.2% 13.2% 2.6% 102% 248%

T 5.6.1


135 | P a g e

Municipal Infrastructure Grant (MIG)* Expenditure Year 2019/20 on Service backlogs

R' 000

Details

Budget Adjustments Budget

Actual Variance Major conditions applied by donor (continue below if

necessary)

Budget Adj

Budget

Infrastructure - Road transport 14 832 20 629 6 501 -128% -217%

Roads, Pavements & Bridges 14 832 20 629 6 501 -128% -217%

Storm water

Infrastructure - Electricity 2 800 – – -100%

Generation

Transmission & Reticulation

Street Lighting 2 800 – -100%

Infrastructure - Water

Dams & Reservoirs

Water purification

Reticulation

Infrastructure - Sanitation

Reticulation

Sewerage purification

Infrastructure - Other

Waste Management

Transportation

Gas

Other Specify: 20 500 17 503 5 816 -252% -201%

Sports fields 12 000 12 000 3 805 -215% -215%

Fire, Safety & Emergency 3 000 2 403 60 -

4886% -

3894%

Hawker Stalls – 600 540 100% -11%

Other 5 500 2 500 1 411 -290% -77%

Total 38 132 38 132 12 317

* MIG is a government grant program designed to fund a reduction in service backlogs, mainly: Water; Sanitation; Roads; Electricity. Expenditure on new, upgraded and renewed infrastructure is set out at Appendix M; note also the calculation of the variation. Variances are calculated by dividing the difference between actual and original/adjustments budget by the actual. T 5.8.3


136 | P a g e

COMPONENT C: CASH FLOW STATEMENT

Cash Flow Outcomes

R'000

Description

Year -2018/19 Current: Year 2019/20

Audited Outcome

Original Budget

Adjusted Budget

Actual

CASH FLOW FROM OPERATING ACTIVITIES

Receipts 176 960 238 293 252 387 205 514

Ratepayers and other 48 569 80 227 95 591 73 027

Government - operating 101 004 112 541 113 993 111 626

Government - capital 20 745 43 632 38 132 12 310

Interest 6 641 1 894 4 671 8 550

Dividends – – – –

Payments (156 028) (195 225) (193 095) (155 194)

Suppliers and employees (155 455) (195 125) (192 095) (152 527)

Finance charges (573) (100) (1 000) (2 667)

Transfers and Grants – – – –

NET CASH FROM/(USED) OPERATING ACTIVITIES 20 932 43 068 59 292 50 320

CASH FLOWS FROM INVESTING ACTIVITIES

Receipts

Proceeds on disposal of PPE

Decrease (Increase) in non-current debtors Decrease (increase) other non-current

receivables Decrease (increase) in non-current

investments

Payments

Capital assets (17 707) (43 232) (43 932) (11 932)

NET CASH FROM/(USED) INVESTING ACTIVITIES (17 707) (43 232) (43 932) (11 932)

CASH FLOWS FROM FINANCING ACTIVITIES

Receipts

Short term loans

Borrowing long term/refinancing

Increase (decrease) in consumer deposits

Payments

Repayment of borrowing 212 – – (172)

NET CASH FROM/(USED) FINANCING ACTIVITIES 212 – – (172)

NET INCREASE/ (DECREASE) IN CASH HELD 3 437 (164) 15 360 38 215

Cash/cash equivalents at the year begin: 6 678 6 922 10 359 10 115

Cash/cash equivalents at the year-end: 10 115 6 758 25 719 48 330

Source: MBRR A7 T 5.9.1


137 | P a g e

Actual Borrowings: Year -2017/18 to Year 2019/20

R' 000

Instrument Year 2017/18 Year 2018/19 Year 2019/20

Municipality

Long-Term Loans (annuity/reducing balance)

Long-Term Loans (non-annuity)

Local registered stock

Instalment Credit -

-

-

Financial Leases -

-

-

PPP liabilities

Finance Granted By Cap Equipment Supplier

Marketable Bonds

Non-Marketable Bonds

Bankers Acceptances

Financial derivatives

Other Securities

Municipality Total NIL

NIL

NIL

Municipal Entities

Long-Term Loans (annuity/reducing balance)

Long-Term Loans (non-annuity)

Local registered stock

Instalment Credit

Financial Leases

PPP liabilities

Finance Granted By Cap Equipment Supplier

Marketable Bonds

Non-Marketable Bonds

Bankers Acceptances

Financial derivatives

Other Securities

Entities Total NIL

NIL

NIL

T 5.10.2


138 | P a g e

Municipal and Entity Investments

R' 000

Investment* type Year 2017/18 Year 2018/19 Year 2019/20

Actual Actual Actual

Municipality

Securities - National Government

Listed Corporate Bonds

Deposits - Bank 5 709 8 309 46 339

Deposits - Public Investment Commissioners

Deposits - Corporation for Public Deposits

Bankers’ Acceptance Certificates

Negotiable Certificates of Deposit - Banks

Guaranteed Endowment Policies (sinking)

Repurchase Agreements - Banks

Municipal Bonds

Other

Municipality sub-total 5 709 8 309 46 339

Municipal Entities

Securities - National Government

Listed Corporate Bonds

Deposits - Bank Deposits - Public Investment

Commissioners

Deposits - Corporation for Public Deposits

Bankers’ Acceptance Certificates

Negotiable Certificates of Deposit - Banks

Guaranteed Endowment Policies (sinking)

Repurchase Agreements - Banks

Other

Entities sub-total - - -

Consolidated total: 5 709 8 309 46 339

T 5.10.4

Amahlathi Local Municipality - 2019/20 Annual Report

139 | P a g e

5.3 SUPPLY CHAIN MANAGEMENT

Section 3(1) (b) and (c) of the SCM regulations states that the accounting officer of a municipality must at least

annually review the implementation of SCM policy and when necessary submit proposal for the amendments of

the policy to council. The SCM policy was initially developed in 2005 and implemented to give effect to the SCM

regulations and it was last reviewed in May 2017. Amahlathi has established an SCM unit which comprises of

four officials. The code of conduct, oath of secrecy and declaration forms are signed by all officials involved in

supply chain management. The SCM manager has reached prescribed levels as required by the Minimum

Competency Regulations Guidelines and the other three officials are still in process. In line with Municipal Finance

Management Act (MFMA), the accounting officer has also established various bid committees that are consistent

with the SCM regulations and any applicable legislation for competitive bidding i.e.

• Bid Specification Committee

• Bid Evaluation Committee

• Bid Adjudication Committee

5.4 GRAP COMPLIANCE

The municipality is required by legislation to report on its financial affairs using GRAP Reporting Framework. The

Annual Financial Statements and Fixed Asset Register have been prepared and submitted using applicable

GRAP standards. In the current year, the municipality has not adopted any new standards and interpretations as

there are none effective in the current financial year. The municipality also became aware that it had to comply

with the requirements of GRAP 27 (Biological Assets) due to the identification of plantations under its control.

The Asset Register and the Annual Financial Statements have been updated through restatements.


140 | P a g e

CHAPTER 6: AUDITOR GENERAL FINDINGS

6.1. AUDITOR GENERAL OPINION 2019/20 The Amahlathi Local Municipality received an unqualified audit opinion in 2019/2020 audit and the following issues

were raised;

Material uncertainty relating to going concern- financial risks that have a negative impact on its

ability to sustain its current level of operations in the near future i.e. an ability to pay creditors within due

dates, Negative key financial ratios and Net current liability was realised.

Material impairments consumer debtors and receivables from non-exchange transactions-

material impairments for consumer debtors and other debtors of R44, 9 million (2019: R26.8, million)

and for receivables from non-exchange transactions of R35, 4 million (2018: R20, 8 million) were

incurred as a result of poor collections.

Material electricity distribution losses- material electricity losses of R9, 8 million (2019: R8, 1 million)

was incurred, which represents 29.51% (2019: 28.4%) of total electricity purchased. The losses are

attributed to normal losses and illegal connections.

Underspending of conditional grant- the municipality materially underspent on the municipal

infrastructure grant by R29.9 million. This was due to a strike action which took place during the

financial year, resulting in the shutdown of municipality offices and operations.


141 | P a g e

AUDIT ACTION PLAN TO ADDRESS 2018/19 FINDINGS

No. Exc. No.

Coaf Finding Impact Action Plan Progress Responsibility Time Frame Status

1 ISS 38 CoAF

18

Procurement and

contract

management –

Non submission of

documents – Tax

clearance

certificates, BAS

reports and

declarations of

interest

Non-compliance with section 74(1)

of the MFMA and Municipal SCM

Regn 13 which results in a scope

limitation on irregular expenditure

disclosed in the AFS and a

possible qualification of the opinion

of the audit report.

1. Documents

will scanned and

archived

electronically as

a backup to hard

copies and for

ease retrieval.

None CFO 2020/03/30 In progress

2 ISS 37 CoAF

18

Procurement and

contract

management –

Non submission of

documents –

Deviation

memorandum



Regn 36, which results in a scope

limitation on irregular expenditure

and a possible qualification of the

opinion of the audit report.

1. Documents

will scanned and

archived

electronically as

a backup to hard

copies and for

ease retrieval.


3 ISS 36 COA

F 22

Procurement and

contract

management -

Scope limitation

(R2k - R10k)



Regn 5 and 16, which results in a

scope limitation on irregular

expenditure and a possible

1. Documents

will scanned and

archived

electronically as

a backup to hard



142 | P a g e

qualification of the opinion of the

audit report.

copies and for

ease retrieval.

4 ISS 68 COA

F 43

Procurement and

contract

management –

Deviations

Irregular expenditure not disclosed

in the financial statements by an

amount of R2 272 833, 20 and

non-compliance with laws and

regulations.

1. Management

will thoroughly

review the

reasons for all

deviations.

2. During

quarterly reviews

reasons will also

be reviewed

building up to the

registers for

disclosure.


5 ISS 86 CoAF

59

Procurement and

contract

management -

SCM Reg 32 not

properly followed

Irregular expenditure amounting to

R243 455, 93 in the current year

due to non-compliance with the

applicable laws and regulations.

In circumstances

where the

municipality

makes use of the

regulation. Strict

adherence to

sections and

salient

requirements as

per the circular

will be monitored

through

development of a

check list.

In progress CFO 2020/03/30 In progress


143 | P a g e

6 ISS 69 CoAF

43

Procurement and

contract

management -

Deviations -

Supplier was not

tax compliant


R473 512, 50 not disclosed in the

financial statements.

Before deviation

is approved Tax

compliance

status of the

service provider

will be verified

and a printout

generated


7 ISS 18 CoAF

18

Procurement and

contract

management -

Declarations

signed after award

date


R918 97, 85

Documents will

scanned and

archived

electronically as

a backup to hard

copies and for

ease retrieval.


8 CoAF

30

Irregular

Expenditure-Non

submission of

supporting

documentation

Limitation of scope Documents will

scanned and

archived

electronically as

a backup to hard

copies and for

ease retrieval.

Not yet

implemented

CFO 2020/03/30 Not yet

implemente

d

9 ISS 84 CoAF

58

AFS - Expenditure

– No system in

place to confirm

the occurrence of

bulk purchases

Material misstatement for bulk

purchases amounting to R29 946

232

Management will

install a check

meter to verify

Eskom invoices

Not yet

implemented

Director:

Engineering

Services

2020/03/30


144 | P a g e

11 ISS 83 CoAF

60

Expenditure - Free

basic services

expenditure not

incurred for the

indigent consumers

Scope limitation of general

expenses - free basic electricity

amount of R9 367 987

Council has

since resolved to

start the process

afresh so as to

have a new

indigent register.

Registration

has already

started and a

new register is

in place

however there

is an

outstanding

debt with

Eskom relating

to Free Basic

Electricity

CFO 30-Jun-20 In

progress

12 ISS 66 CoAF

42

Scope limitation of

general expenses -

free basic

electricity amount

of R9 367 987

Material scope limitation which

may result in a qualification of

opinion on the audit of

performance information

Council has

since resolved to

start the process

afresh so as to

have a new

indigent register.

Registration

has already

started and a

new register is

in place

however there

is an

outstanding

debt with

Eskom relating

to Free Basic

Electricity

CFO 30-Jun-20 In

progress

13 ISS 78 CoAF

50

AOPO - No. of

households and

business with basic

waste collection -

Scope limitation

Material scope limitation which

may result in a qualification of

opinion on the audit of

performance information.

Review of SDBIP

to talk to

available reports

on the system.

In progress Director:

Strategic

Services

31-Mar-20 In

progress


145 | P a g e

14 ISS 54 CoAF

29

Execution - Cash

and cash

equivalent - Bank

account not

recorded and

disclosed in the

AFS

Understatement of the cash and

cash equivalent by R1 680 and

non-compliance with laws and

regulations

Supporting

documentation

will be sourced

and our records

will be updated

Bank statement

sourced and in

place

CFO 31-Mar-20 In

progress

15 ISS 55 CoAF

29

Cash and cash

equivalent -

Balance is

overstated

overstatement of the cash and

cash equivalent by R722 388

1. Amount to be

journalized and

written off as it

was closed

already in the

2018/19 financial

year

1. 3rd quarter

AFS will be

prepared after

full physical

verification and

conditional

assessment of

municipal assets.

2. Development

of AFS

Preparation Plan

and strict

adherence to it.

3. Annual

financial

statements will

be prepared

Supporting

documentation

in place

CFO 31-Mar-20 In

progress


146 | P a g e

early enough to

allow for

thorough

Reviewal.

4. Monthly bank

reconciliation

16 ISS 70 CoAF

56

Cash flow

statement -

Recalculation

differences

Cash flow statements not fairly

presented

Preparation of

quarterly

financial

statements to

facilitate better

review processes

Appointment of

service

providers is in

progress

CFO 31-Mar-20 In

progress

17 ISS 73 CoAF

49

Comparatives not

disclosed in

respect of

contingent liabilities

and assets

Comparative information as

required by GRAP 1 is not

disclosed, as a result financial

statements are not complete

Preparation of

quarterly

financial

statements to

facilitate better

review processes

Appointment of

service

providers is in

progress

CFO 31-Mar-20 In

progress

18 ISS 11 CoAF

7

Planning:

Employee Costs -

Organogram not

reviewed for the

2018/19

1. Lack of accountability if it is not

clear who holds which position

within the municipality and not be

able to ensure that operations are

in line with the strategic objectives

that have been set out for the

municipality.

2. Lack of accountability if it is not

clear who holds which position

within the municipality and not be

able to ensure that operations are

in line with the strategic objectives

Facilitate the

process of

tabling reviewed

organogram to

council

In progress Director

Corporate

services

31-Mar-20 In

progress


147 | P a g e

that have been set out for the

municipality.

3. There could be an impact on the

operational efficiency of the

municipality through having people

holding Acting positions for a long

period of time, which could lead to

an impact on achieving the

strategic objectives of the

municipality.

19 ISS 21 CoAF

24

Employee cost:

Limitation of scope

due non-availability

of documents

Projected scope limitation in the

employee related costs amounting

to R1 002 235

Ensure scanning

of all HR related

documents

In progress CFO and

Corporate

Services

Director

31-Mar-20 In

progress

20 ISS 46 CoAF

34

Employee cost:

Payroll

reconciliation-

payroll amount

does not agree

with amount on the

AFS

Factual overstatement of R60 374

to the employee related costs

Monthly

reconciliations to

be performed

Monthly payroll

has been

prepared and

recons are in

progress

CFO and

Corporate

Services

Director

30-Jun-20 In

progress

21 ISS 76 CoAF

62

Employee benefits

obligation -

Employees did not

took leave at least

of at least 16

working days

Non-compliance with South African

Local Government Bargaining

Council Main Collective

Agreement.

Memos to be

sent to

Departments to

advise on

employees that

are due to take


Corporate

services

30-Jun-20 In

progress


148 | P a g e

during the leave

cycle

compulsory

leave.

22 CoAF

7

Planning:

Employee Costs -

No approved HR

Plan in place for

2018/19

1. Human resources needs of the

municipality might not be properly

planned i.e. determination of the

type and quantity of skills required

in each division, budget available

for remuneration etc.

2. This might have an impact on

the municipality’s ability to meet its

mandate and achieve service

delivery.

Facilitate the

process of

tabling reviewed

organogram to

council


Corporate

services

30-Jun-20 In

progress

23 ISS 67 CoAF

44

Disclosure: Key

management

remuneration -

Amount in the

Payroll does not

agree with AFS

note 25

The misstatement of R1

107208.54 to the amounts

disclosed in note 25 to the financial

statements.

Preparation of

quarterly

financial

statements to

facilitate better

review processes

Appointment of

service

providers is in

progress

CFO and

Corporate

Services

Director

31-Mar-20 In

progress

24 ISS 1 CoAF

9

Internal auditors -

Internal Control

Deficiencies -

1. Internal auditors

did not attend any

trainings during the

current financial

year.

2. Internal audit

unit did not perform

Internal audit will not be fully

effective in its functions which

include quality assurance reviews

of evaluating the information

systems environment resulting in

deficiencies in internal control not

being addressed in a timely manner

by management.

The internal auditors may not be up

1. The

municipality will

be partnering

with other

government

institutions for

the training of

Internal Audit

staff.

2. The will be

In progress MM 30-Jun-20 In

progress


149 | P a g e

all the tasks as per

their annual plan.

3. Internal audit

unit did not

evaluate controls to

determine

effectiveness and

efficiency thereof

with regards to

information

systems i.e. no

information system

review conducted

during the year.

to date with all the changes that are

made to the standards in the IIA.

monitored on a

quarterly basis

through the AC

Meetings.

3. The

Information

Systems review

has been

included in the

2019/2020

Financial Year.

25 ISS2 CoAF

9

Planning - Internal

audit function did

not have an

external quality

assurance review

Non-compliance with laws and

regulations and internal control

deficiency.

The municipality

will be requesting

the Provincial

Treasury for the

Quality Internal

Assessment.

In progress MM 30-Jun-20 In

progress

26 ISS 45 CoAF

33

Use of consultants

- No gap

analysis/needs

assessment and

acute project

planning performed

by Municipality

prior to invitation of

bids.

Non-compliance with the MFMA Develop policy to

regulate the

process of

appointing

consultants.

Draft policy is

in place.

MM 30-Jun-20 In

progress


150 | P a g e

27 ISS9 CoAF

8

Internal Control

Deficiencies -

Reconciliations are

not performed

regularly -


regulations and internal control

deficiency

Monthly

reconciliations to

be performed

Monthly

reconciliations

to be

performed on a

monthly basis

and reported

on their

progress

CFO 30-Jun-20 In

progress

28 ISS 3 CoAF

2

AFS - Prior year

uncorrected

misstatements

Annual financial statements are

not fairly presented as required by

GRAP 1

Preparation of

quarterly

financial

statements to

facilitate better

review processes

Appointment of

service

providers is in

progress

CFO 31-Mar-20 In

progress

29 ISS 43 CoAF

12

Annual Financial

Statements –

Amounts in the

registers/listing/GL

does not agree to

the TB and AFS

Non-compliance with GRAP 1

standards and material differences

will result to financial statements

that do not present fairly, in all

material respects, the financial

position of the municipality in

accordance with GRAP and the

requirements of the MFMA

Preparation of

quarterly

financial

statements to

facilitate better

review processes

Appointment of

service

providers is in

progress

CFO 31-Mar-20 In

progress

30 ISS 60 CoAF

63

Execution -

Compliance -

Roads

Infrastructure

Non-compliance with Standard for

Infrastructure Procurement and

Delivery Management (SIPDM)

Develop a

procedure

manual for the

implementation

of the SIPDM.

N/A Director:

Engineering/CF

O

Feb-20 Not yet

implemente

d


151 | P a g e

31 ISS 8 CoAF

10

Non-compliance -

Consequence

Management

Material non-compliance with laws

and regulations

Develop a

process plan for

MPAC to conduct

the necessary

investigations

into UIFW

Expenditure.

Not yet

implemented

MM Mar-20 In progress

32 ISS 47 CoAF

31

Compliance -

Annual report

Material non-compliance with the

MFMA

The institution

will look at the

guidance of

Legislation and

Regulation in

2019/20

Financial year

Annual Report

will be

submitted to

AG on the 13th

of December

and will be

submitted to

Council by 25th

January and

notice will

issued for

public

comments

thereafter.


33 ISS 48 CoAF

31

Compliance -

Consequences

management

Material non-compliance with the

MFMA

The institution

will look at the

guidance of

Legislation and

Regulation in

2019/20

Financial year

Annual Report

will be

submitted to

AG on the 13th

of December

and will be

submitted to

Council by 25th

January MPAC

Roadshows will



152 | P a g e

be conducted

in January and

oversight report

be submitted to

Council

34 ISS

90

CoAF

61

Execution -

Statement of

changes in net

assets - Casting

error

Misstatement of R1 966 179 to the

balance reported for accumulated

surplus in the statement of

changes in net assets

Preparation of

quarterly

financial

statements to

facilitate better

review processes

Appointment of

service

providers is in

progress

CFO

35 ISS 19 CoAF

15

Unauthorized

expenditure

misstated

Material misstatement of

unauthorized expenditure

1. 3rd quarter

AFS will be

prepared to

identify

unauthorized

expenditure.

2. Annual

financial

statements will

be prepared

early and

thoroughly

reviewed

3. Management

submit to council

a

recommendation

on the way

Appointment of

service

providers is in

progress

CFO 30-Jun-20 In progress


153 | P a g e

forward in line

with Circular 68

36 ISS 20 CoAF

16

AFS: Statement of

comparison of

budget and actual

amounts

Misstatement of the statement of

comparison of budget and actual

amounts

1. 3rd quarter

AFS will be

prepared to

identify

unauthorized

expenditure.

2. Annual

financial

statements will

be prepared

early and

thoroughly

reviewed

3. Management

submit to council

a

recommendation

on the way

forward in line

with Circular 68

Appointment of

service

providers is in

progress


38 ISS 52 CoAF

30

Fruitless and

wasteful

expenditure -

Understatement of

note 43

Understatement of fruitless and

wasteful expenditure amounting to

R463 260.72 in note 43 of the

annual financial statements

Develop process

flow for

identifying and

reporting fruitless

and wasteful

expenditure.

In progress CFO 30-Jun-20 In progress


154 | P a g e

39 ISS 91 CoAF

66

PPE - Buildings

burnt not

considered for

impairment

Factual misstatement of

impairment loss by R2 922 720.19

and non-compliance with GRAP

and this also affects the

depreciation amount recognized in

the financial statement.

1. 3rd quarter

AFS and FAR

will be prepared

after full physical

verification and

conditional

assessment of

municipal assets.

2. Development

of AFS

Preparation Plan

and strict

adherence to it.

3. Annual

financial

statements and

FAR will be

prepared early

enough to allow

for thorough

reviewal.

Appointment of

service

providers is in

progress


40 ISS 80 CoAF

51

Inventory –

Inventory at year

end is misstated

The issue will result in a projected

misstatement of R535 505, 15

1. 3rd quarter

AFS and FAR

will be prepared

after full physical

verification and

conditional

assessment of

municipal assets.

2. Development

of AFS

Appointment of

service

providers is in

progress

CFO 30-Jun-20


155 | P a g e

Preparation Plan

and strict

adherence to it.

3. Annual

financial

statements and

FAR will be

prepared early

enough to allow

for thorough

reviewal.

41 ISS

62

CoAF

47

Investment

property -

Depreciation on

investment

property calculated

incorrectly -

Projected overstatement in

depreciation and understatement

of investment property of R5 920

807, 92

1. 3rd quarter

AFS and FAR

will be prepared

after full physical

verification and

conditional

assessment of

municipal assets.

2. Development

of AFS

Preparation Plan

and strict

adherence to it.

3. Annual

financial

statements and

FAR will be

prepared early

enough to allow

Appointment of

service

providers is in

progress



156 | P a g e

for thorough

reviewal.

42 ISS 64 CoAF

27

Investment

Property -

Differences in

carrying values

noted in asset

register -


standards and factual

overstatement of R5 808 856.43 to

the investment property balance

reported in the financial statements

1. 3rd quarter

AFS and FAR

will be prepared

after full physical

verification and

conditional

assessment of

municipal assets.

2. Development

of AFS

Preparation Plan

and strict

adherence to it.

3. Annual

financial

statements and

FAR will be

prepared early

enough to allow

for thorough

reviewal.

Appointment of

service

providers is in

progress



157 | P a g e

43 ISS 72 CoAF

53

Execution - PPE -

Limitation of scope

- Assets could not

be verified

Overstatement of Property, plant

and equipment balance by an

extrapolated amount of R4 280.60.

1. 3rd quarter

AFS and FAR

will be prepared

after full physical

verification and

conditional

assessment of

municipal assets.

2. Development

of AFS

Preparation Plan

and strict

adherence to it.

3. Annual

financial

statements and

FAR will be

prepared early

enough to allow

for thorough

reviewal.

Appointment of

service

providers is in

progress

All 30-Jun-20 In progress

44 ISS 71 CoAF

53

PPE Depreciation

disclosure

Financial statements do not fairly

present the state of affairs of the

municipality

1. 3rd quarter

AFS and FAR

will be prepared

after full physical

verification and

conditional

assessment of

municipal assets.

2. Development

of AFS

Appointment of

service

providers is in

progress

CFO In progress


158 | P a g e

Preparation Plan

and strict

adherence to it.

3. Annual

financial

statements and

FAR will be

prepared early

enough to allow

for thorough

reviewal.

45 ISS 33 CoAF

19

Expenditure -

Misallocated

transactions

relating to

electricity

consumption

Results to an overstatement of

bulk purchases by R115 278.56

Allocation for

bulk purchases

to be monitored

continuously

Allocations are

currently done

accordingly


46 ISS 34 CoAF

23

COAF 23:

Execution -

Expenditure -

Misclassification

A projected misstatement of

expenditure by R266 592.85

1. 3rd quarter

AFS and FAR

will be prepared

after full physical

verification and

conditional

assessment of

municipal assets.

2. Development

of AFS

Preparation Plan

and strict

adherence to it.

3. Annual

Appointment of

service

providers is in

progress



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financial

statements and

FAR will be

prepared early

enough to allow

for thorough

reviewal.

47 ISS 32 CoAF

33

Expenditure -

Interest charge

included in bulk

purchases

Overstatement of bulk purchases

by R538 741.81

Allocation for

bulk purchases

to be monitored

continuously

Allocations are

currently done

accordingly


48 ISS 26 CoAF

19 &

23

Compliance -

Expenditure -

Payments not

made within 30

days


(e) of the MFMA and possible

fruitless and wasteful expenditure

as a result of penalties due to

interest charged

The municipality

is currently

experiencing

cash flow

challenges

Strides are

made to ensure

payments are

made within 30

days when

there are funds


49 ISS 27 CoAF

19

Expenditure - VAT

amount incorrectly

included in Bulk

Purchases

Overstatement of bulk purchases

by R364 512

Allocation for

bulk purchases

to be monitored

continuously

Allocations are

currently done

accordingly


50 ISS 44 CoAF

23

Expenditure - No

purchase order

Projected limitation of scope to

expenditure – contracted services

amounting to R70 450.82

Documents will

scanned and

archived

electronically as

a backup to hard



160 | P a g e

copies and for

ease retrieval.

51 ISS 85 CoAF

57

Execution - Trade

and other payables

from exchange –

Misstatements

identified

Overstatement of trade and other

payables by R88 696.38

Perform monthly

reconciliations


52 ISS 6 CoAF

35

Execution - Trade

and other payables

- Scope Limitation

Non- compliance with section

74(1) of the MFMA which also lead

to a factual limitation of scope on

the trade and payables balance

amounting to R3 848 069.73 and


of the audit report

Perform monthly

reconciliations

In progress CFO

53 ISS 29 CoAF

38

Trade and other

payables - Scope

limitation

Material overstatement of the trade

and other payables by R6 266 911

and the receivables from exchange

transactions and non-exchange

transactions by the same amount.

Perform monthly

reconciliations

In progress CFO

54 ISS 5 CoAF

14

AOPO -

Misstatement

identified - POE

does not agree to

the APR

Results to the misstatement of

reported achievements for the

aforementioned key performance

indicators in the annual

performance report and non-

compliance with applicable laws

and regulations.

Engineering

department to

develop a

mechanism to

find credible

approach on

ways to support

information

needed to be

Currently

department is

working on

improving on

supporting

information on

activities

achieved and

those that are

Director

Engineering

Feb-20 Engineering

department

to interact

with

manager

IDP to

develop a

structured

approach


161 | P a g e

supported in the

municipal AOPO

file.

partially

achieved.

on

corrective

measures

to be

undertaken

on AOPO

55 ISS 61 CoAF

40

Reported strategic

objectives are not

consistent with

planned strategic

objectives


regulations and the reported

information in the APR will not be

valid, accurate and complete

APR was

adjusted

accordingly. An

oversight will be

conducted during

the compilation

of 2019/20 APR.

Done MM 30th

November

Done

56 ISS 31 CoAF

34

Provision for

bonuses not

disclosed in the

AFS

Non-compliance with GRAP and

MFMA

1. 3rd quarter

AFS and FAR

will be prepared

after full physical

verification and

conditional

assessment of

municipal assets.

2. Development

of AFS

Preparation Plan

and strict

adherence to it.

3. Annual

financial

statements and

FAR will be

prepared early

Appointment of

service

providers is in

progress

CFO 31-Mar-20 In progress


162 | P a g e

enough to allow

for thorough

reviewal.

57 ISS 30 CoAF

32

Provision for landfill

sites -

Keiskammahoek

landfill site not

disclosed in the

AFS

Non-compliance with GRAP and

MFMA

1. 3rd quarter

AFS and FAR

will be prepared

after full physical

verification and

conditional

assessment of

municipal assets.

2. Development

of AFS

Preparation Plan

and strict

adherence to it.

3. Annual

financial

statements and

FAR will be

prepared early

enough to allow

for thorough

reviewal.

Appointment of

service

providers is in

progress


58 ISS 63 CoAF

39

Receivables from

exchange and non-

exchange

transactions -

Understatement

Material understatement of the

trade and other receivables from

exchange transactions and non-

exchange transactions by

R2 522 415, 79 and the trade and

Perform monthly

reconciliations

In progress CFO 31-Mar-20 In progress


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other payables by the same

amount.

59 ISS 51 CoAF

28

Consumer debtors

- Existence of the

debtors was not

confirmed

Projected misstatement of

consumer debtors arising from

exchange transactions amounting

to R3 993 349, 56

Perform monthly

reconciliations


60 ISS 57 CoAF

36

Indigent debtors Scope limitation on the indigent

subsidy amount

Develop new in

indigent register


61 ISS 12 CoAF

13

Annual Financial

Statements –

Differences in

comparative

figures


standards

1. 3rd quarter

AFS and FAR

will be prepared

after full physical

verification and

conditional

assessment of

municipal assets.

2. Development

of AFS

Preparation Plan

and strict

adherence to it.

3. Annual

financial

statements and

FAR will be

prepared early

enough to allow

for thorough

reviewal.

Appointment of

service

providers is in

progress



164 | P a g e

62 ISS 15 CoAF

20

Difference between

the statement and

the recalculated

amount.

Projected misstatement of revenue

from exchange transactions by

R235 248, 06 and consumer

debtors by the same amount

Perform monthly

reconciliations


63 ISS 22 CoAF

20

Sale of electricity Projected misstatement of revenue

from sale of electricity by R1 794

533,84 and consumer debtors by

the same amount

Perform monthly

reconciliations


64 ISS 25 CoAF

20

Revenue interest

received -

investment

understated

Revenue from exchange

transactions - Interest received

from investments to be

understated by R 645 876, 63

Perform monthly

reconciliations


65 ISS 59 CoAF

45

Compliance for

conditional grants


of the Division of Revenue Act 1 of

2018

Continuous

monitoring of

compliance to

DoRA

In progress CFO 30-Jun-20 On-going

monitoring

66 ISS 82 CoAF

65

VAT - Amount of

interest and

penalty not

recorded in the GL

and non-

compliance with

VAT act.

Fruitless and wasteful expenditure

understated by R25 550.74

Amount to be

corrected and

recorded under

fruitless and

wasteful

expenditure in

the AFS

Interest and

penalties are

recorded in

their respective

votes in the GL

CFO 30-Jun-20 On-going

monitoring

67 ISS 42 CoAF

22

Procurement and

contract

management -

Differences in

points calculation

Internal control deficiency. A recalculation of

points will be

done by Bid

Adjudication

Committee to

ensure accuracy



165 | P a g e

68 CoAF

17

Procurement and

contract

management –

Scope limitation


of the MFMA and Municipal Supply

Chain Management regulation 27

which results in a scope limitation

on irregular expenditure disclosed

in the financial statements and a


of the audit report

Documents will

scanned and

archived

electronically as

a backup to hard

copies and for

ease retrieval.


69 CoAF

17

Procurement and

contract

management -

Scope Limitation -

Bid adjudication

committee meeting

minutes not

submitted


of the MFMA and Municipal Supply

Chain Management regulation 29

which results in a scope limitation

on irregular expenditure disclosed

in the financial statements and a


of the audit report

Documents will

scanned and

archived

electronically as

a backup to hard

copies and for

ease retrieval.


70 CoAF

17

Procurement and

contract

management –

Scope limitation –

Bid documents


of the MFMA which results in a

scope limitation on irregular

expenditure disclosed in the

financial statements and a possible

qualification of the opinion of the

audit report

The first 3

responsive bids

will be scanned

and archived for

ease of retrieval

(relevant pages).


166 | P a g e

6.2 AUDIT REPORT OF THE AUDITOR GENERAL 2019/20 FINANCIAL YEAR

Report of the auditor-general to Eastern Cape Provincial Legislature and the council of Amahlathi Local

Municipality

Report on the audit of the financial statements Opinion

1. I have audited the financial statements of the Amahlathi Local Municipality set out on pages … to …, which

comprise statement of financial position as at 30 June 2020, statement of financial performance, statement

of changes in net assets, statement of cash flows and statement of comparison of budget and actual

information for the year then ended, as well as the notes to the financial statements, including a summary

of significant accounting policies.

2. In my opinion, the financial statements present fairly, in all material respects, the financial position of the

Amahlathi Local Municipality as at 30 June 2020, and financial performance and cash flows for the year

then ended in accordance with the South African Standards of Generally Recognised Accounting Practice

(SA Standards of GRAP) and the requirements of the Municipal Finance Management Act of South Africa,

2003 (Act no. 56 of 2003) (MFMA) and the Division of Revenue Act of South Africa, 2019 (Act no.16 of

2019) (Dora).

Context for the opinion

3. I conducted my audit in accordance with the International Standards on Auditing (ISAs). My responsibilities

under those standards are further described in the auditor-general’s responsibilities for the audit of the

financial statements section of this auditor’s report.

4. I am independent of the municipality in accordance with sections 290 and 291 of the Code of ethics for

professional accountants and parts 1 and 3 of the International Code of Ethics for Professional Accountants

(including International Independence Standards) of the International Ethics Standards Board for

Accountants (IESBA codes) as well as the ethical requirements that are relevant to my audit in South

Africa. I have fulfilled my other ethical responsibilities in accordance with these requirements and the

IESBA codes.

5. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my

opinion.

Material uncertainty relating to going concern

6. I draw attention to the matters below. My opinion is not modified in respect of these matters.

7. As disclosed in note 43 to the financial statements, the municipality disclosed the following financial risks

that have a negative impact on its ability to sustain its current level of operations in the near future, before

taking into account government grants:

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An ability to pay creditors within due dates

Negative key financial ratios

Net current liability was realised

8. In addition, the actions taken by management to mitigate the impact of these risks are disclosed in this note

Emphasis of matters

9. I draw attention to the matters below. My opinion is not modified in respect of these matters.

Restatement of corresponding figures 10. As disclosed in note 41 to the financial statements, the corresponding figures for 30 June 2019 were

restated as a result of errors in the financial statements of the municipality at, and for the year ended, 30

June 2020.

Material impairments consumer debtors and receivables from non-exchange transactions 11. As disclosed in note 4 and 5, respectively, to the financial statements, material impairments for consumer

debtors and other debtors of R44, 9 million (2019: R26.8, million) and for receivables from non-exchange

transactions of R35, 4 million (2018: R20, 8 million) were incurred as a result of poor collections.

Material electricity distribution losses 12. As disclosed in note 49 to the financial statements, material electricity losses of R9, 8 million (2019: R8, 1

million) was incurred, which represents 29.51% (2019: 28.4%) of total electricity purchased. The losses are

attributed to normal losses and illegal connections.

Underspending of conditional grant 13. As disclosed in note 18 to the financial statements, the municipality materially underspent on the municipal

infrastructure grant by R29.9 million. This was due to a strike action which took place during the financial

year, resulting in the shutdown of municipality offices and operations.

Other matters

14. I draw attention to the matter below. My opinion is not modified in respect of this matter.

Unaudited disclosure note 15. In terms of section 125(2) (e) of the MFMA, the municipality is required to disclose particulars of non-

compliance with this legislation. This disclosure requirement did not form part of the audit of the financial

statements and, accordingly, I do not express an opinion on it.

Responsibilities of the accounting officer for the financial statements

16. The accounting officer is responsible for the preparation and fair presentation of the financial statements in

accordance with the SA Standards of GRAP and the requirements of the MFMA and Dora, and for such

internal control as the accounting officer determines is necessary to enable the preparation of financial

statements that are free from material misstatement, whether due to fraud or error.

17. In preparing the financial statements, the accounting officer is responsible for assessing the municipality’s

ability to continue as a going concern, disclosing, as applicable, matters relating to going concern and

168 | P a g e

using the going concern basis of accounting unless the appropriate governance structure either intends to

liquidate the municipality or to cease operations, or has no realistic alternative but to do so.

Auditor-general’s responsibilities for the audit of the financial statements

18. My objectives are to obtain reasonable assurance about whether the financial statements as a whole are

free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that

includes my opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an

audit conducted in accordance with the ISAs will always detect a material misstatement when it exists.

Misstatements can arise from fraud or error and are considered material if, individually or in aggregate,

they could reasonably be expected to influence the economic decisions of users taken on the basis of

these financial statements.

19. A further description of my responsibilities for the audit of the financial statements is included in the

annexure to this auditor’s report.

Report on the audit of the annual performance report

Introduction and scope

20. In accordance with the Public Audit Act 25 of 2004 (PAA) and the general notice issued in terms thereof, I

have a responsibility to report on the usefulness and reliability of the reported performance information

against predetermined objectives for the selected key performance area presented in the annual

performance report. I performed procedures to identify material findings but not to gather evidence to

express assurance.

21. My procedures address the usefulness and reliability of the reported performance information, which must

be based on the municipality’s approved performance planning documents. I have not evaluated the

completeness and appropriateness of the performance indicators/measures included in the planning

documents. My procedures do not examine whether the actions taken by the municipality enabled service

delivery. My procedures also do not extend to any disclosures or assertions relating to planned

performance strategies and information in respect of future periods that may be included as part of the

reported performance information. Accordingly, my findings do not extend to these matters.

22. I evaluated the usefulness and reliability of the reported performance information in accordance with the

criteria developed from the performance management and reporting framework, as defined in the general

notice, for the following selected the selected key performance area presented in the municipality’s annual

performance report for the year ended 30 June 2020:

Key performance area Pages in the annual performance report

KPA 01: Service delivery and infrastructure development (SDI) 35 – 50

23. I performed procedures to determine whether the reported performance information was properly

presented and whether performance was consistent with the approved performance planning documents. I

performed further procedures to determine whether the indicators and related targets were measurable and

relevant, and assessed the reliability of the reported performance information to determine whether it was

valid, accurate and complete.

169 | P a g e

24. The material findings in respect of the reliability of the selected key performance area are as follows:

KPA 1 – Service delivery and infrastructure development (SDI) Indicator: % of Faulty reported meters repaired per inspection report

25. The achievement of 100% of the faulty meters repaired only in quarter 1 was reported against the target of

80% of faulty reported meters repaired as per inspection report in the annual performance report. However,

I was unable to obtain sufficient appropriate audit evidence to support the performance against the target

as reported in the annual performance report. This was due to the inability to obtain the reported number of

faulty meters requiring repair and consequently an achievement percentage could not be determined. I was

unable to confirm the reported performance taken by alternative means. Consequently, I was unable to

determine whether any adjustments were required to the reported performance.

Indicator: No. of kms of gravel roads maintained (blading)

26. The reported measures taken to improve performance against the planned target, did not agree to the

supporting evidence provided. Based on the supporting evidence provided, non-performance during

quarter 1 to 3 was due to microeconomic factors within the municipality and the measures taken to improve

performance were not stipulated, whereas the measures to improve performance as reported in the annual

performance report related solely to macroeconomic challenges brought by the COVID-19 pandemic, a

pandemic that was only rampant during quarter 4.

Other matters

27. I draw attention to the mattes below.

Achievement of planned targets 28. Refer to the annual performance report on pages … to … for information on the achievement of planned

targets for the year. This information should be considered in the context of the material findings on the

usefulness and reliability of the reported performance information in paragraphs 24 to 26 of this report.

Adjustment of material misstatements 29. I identified material misstatements in the annual performance report submitted for auditing. These material

misstatements were in the reported performance information of KPA 1: basic services and infrastructure

development. As management subsequently corrected only some of the misstatements, I raised material

findings on reliability of the reported performance information. Those that were not corrected are reported

above.

Report on the audit of compliance with legislation Introduction and scope

30. In accordance with the PAA and the general notice issued in terms thereof, I have a responsibility to report

material findings on the municipality’s compliance with specific matters in key legislation. I performed

procedures to identify findings but not to gather evidence to express assurance.

31. The material findings on compliance with specific matters in key legislation are as follows:

Annual financial statements, annual performance report and annual report 32. The financial statements submitted for auditing were not prepared in all material respects in accordance

with the requirements of section 122(1) of the MFMA. Material misstatements of property, plant and

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equipment, irregular expenditure, contingent asset, statement of budget comparison with actuals,

commitments and related party disclosure identified by the auditors in the submitted financial statement

were subsequently corrected, resulting in the financial statements receiving an unqualified audit opinion.

33. The oversight report adopted by the council on the 2019 annual report was not made public, as required by

section 129(3) of the MFMA.

Expenditure management 34. Money owed by the municipality was not always paid within 30 days, as required by section 65(2) (e) of the

MFMA.

35. Reasonable steps were not taken to prevent irregular expenditure amounting to R20, 5 million as disclosed

in note 48 to the annual financial statements, as required by section 62(1) (d) of the MFMA. The majority of

the irregular expenditure was caused by standardisation of salaries without appropriate approval and

supply chain management processes not followed.

36. Reasonable steps were not taken to prevent fruitless and wasteful expenditure amounting to R4, 3 million

as disclosed in note 47 to the annual financial statements, in contravention of section 62(1) (d) of the

MFMA. The majority of the disclosed fruitless and wasteful expenditure was caused by interest paid on

overdue accounts.

37. Reasonable steps were not taken to prevent unauthorised expenditure amounting to R42, 5 million, as

disclosed in note 46 to the annual financial statements, in contravention of section 62(1) (d) of the MFMA.

The majority of the unauthorised expenditure was caused by exceeding budget.

Consequence management 38. All unauthorised expenditure incurred by the municipality was not investigated to determine if any person is

liable for the expenditure, as required by section 32(2)(a) of the MFMA.

39. All irregular expenditure incurred by the municipality were not investigated to determine if any person is

liable for the expenditure, as required by section 32(2)(b) of the MFMA.

40. All fruitless and wasteful expenditure incurred by the municipality was not investigated to determine if any

person is liable for the expenditure, as required by section 32(2)(b) of the MFMA.

Procurement and contract management 41. Some of the quotations were accepted from bidders who did not submit a declaration on whether they are

employed by the state or connected to any person employed by the state, as required by SCM regulation

13(c).

42. Some of the quotations were accepted from bidders whose tax matters had not been declared by the South

African Revenue Service to be in order, in contravention of SCM regulation 43. Similar non-compliance was

also reported in the prior year.

Conditional grants 43. Performance in respect of programmes funded by the Municipal Infrastructure Grant was not evaluated

within two months after the end of the financial year, as required by section 12(5) of the Division of

Revenue Act (Act 16 of 2019).

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Asset management 44. Capital assets were disposed of without the municipal council having, in a meeting open to the public,

decided on whether the assets were still needed to provide the minimum level of basic municipal services

and considered the fair market value of the assets and the economic and community value to be received

in exchange for the assets, as required by section14 (2) (a) of the MFMA.

Other information 45. The accounting officer is responsible for the other information. The other information comprises the

information included in the annual report. The other information does not include the financial statements,

the auditor’s report and those selected key performance areas presented in the annual performance report

that have been specifically reported in this auditor’s report.

46. My opinion on the financial statements and findings on the reported performance information and

compliance with legislation do not cover the other information and I do not express an audit opinion or any

form of assurance conclusion on it.

47. In connection with my audit, my responsibility is to read the other information and, in doing so, consider

whether the other information is materially inconsistent with the financial statements and the selected key

performance areas presented in the annual performance report, or my knowledge obtained in the audit, or

otherwise appears to be materially misstated.

48. If, based on the work I have performed, I conclude that there is a material misstatement of this other

information, I am required to report that fact. I have nothing to report in this regard.

Internal control deficiencies 49. I considered internal control relevant to my audit of the financial statements, reported performance

information and compliance with applicable legislation; however, my objective was not to express any form

of assurance on it. The matters reported below are limited to the significant internal control deficiencies that

resulted in the findings on the annual performance report and the findings on compliance with legislation

included in this report.

Adequate internal controls has not been implemented over year end reporting and, management did not

adequately review,scruitnise and verify the supporting evidence for each reported target on the annual

performance report.

The audit action plan was not adequately implemented and monitored to address prior years findings as

repeated material findings were identified on compliance with the legislation.

Other reports 50. I draw attention to the following engagements conducted by various parties which had, or could have, an

impact on the matters reported in the municipality’s financial statements, reported performance information,

compliance with applicable legislation and other related matters. These reports did not form part of my

opinion on the financial statements or my findings on the reported performance information or compliance

with legislation.

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51. The President of South Africa promulgated an investigation by the Special Investigating Unit (SIU) based

on the allegation of possible procurement irregularities. This investigation was still in progress at the date of

this report.

52. An independent consultant finalised a forensic investigation on possible irregularities in the traffic

department and possible procurement irregularities. The investigation is finalised.

53. An inquiry by the Department of Cooperative Governance and Traditional Affairs (Cogta) into allegations of

impropriety and irregularities in terms of section 105 of the Municipal Systems Act. The investigation is

finalised.

54. An independent firm was appointed by Cogta to investigate various allegations into procurement processes

not followed and to investigate all personnel. The investigation is finalised.

An independent consultant firm finalised on the investigation on procurement irregularities.

East London 28 Feb 2021

173 | P a g e

Annexure – Auditor-general’s responsibility for the auditi

1. As part of an audit in accordance with the ISAs, I exercise professional judgement and maintain

professional scepticism throughout my audit of the financial statements and the procedures performed on

reported performance information for selected key performance areas and on the municipality’s compliance

with respect to the selected subject matters.

Financial statements

2. In addition to my responsibility for the audit of the financial statements as described in this auditor’s report, I

also:

identify and assess the risks of material misstatement of the financial statements, whether due to fraud

or error; design and perform audit procedures responsive to those risks; and obtain audit evidence that

is sufficient and appropriate to provide a basis for my opinion. The risk of not detecting a material

misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve

collusion, forgery, intentional omissions, misrepresentations or the override of internal control

obtain an understanding of internal control relevant to the audit in order to design audit procedures that

are appropriate in the circumstances, but not for the purpose of expressing an opinion on the

effectiveness of the municipality’s internal control

evaluate the appropriateness of accounting policies used and the reasonableness of accounting

estimates and related disclosures made by the accounting officer

Conclude on the appropriateness of the accounting officer use of the going concern basis of accounting

in the preparation of the financial statements. I also conclude, based on the audit evidence obtained,

whether a material uncertainty exists relating to events or conditions that may cast significant doubt on

the ability of the Amahlathi Local Municipality to continue as a going concern. If I conclude that a

material uncertainty exists, I am required to draw attention in my auditor’s report to the related

disclosures in the financial statements about the material uncertainty or, if such disclosures are

inadequate, to modify my opinion on the financial statements. My conclusions are based on the

information available to me at the date of this auditor’s report. However, future events or conditions may

cause a municipality to cease operating as a going concern

evaluate the overall presentation, structure and content of the financial statements, including the

disclosures, and determine whether the financial statements represent the underlying transactions and

events in a manner that achieves fair presentation

Communication with those charged with governance

3. I communicate with the accounting officer regarding, among other matters, the planned scope and timing of

the audit and significant audit findings, including any significant deficiencies in internal control that I identify

during my audit.

4. I also confirm to the accounting officer that I have complied with relevant ethical requirements regarding

independence, and communicate all relationships and other matters that may reasonably be thought to

have a bearing on my independence and, where applicable, the actions taken to eliminate threats or the

safeguards applied.

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REPORT OF THE AUDIT COMMITTEE

Purpose

The function of the Audit Committee (hereinafter referred to as the Committee) is primarily to assist the

Amahlathi Municipality (hereinafter referred to as the Council) in discharging its duties relating to the

safeguarding of assets, the operation of adequate systems, control processes and the preparation of financial

reports and statements.

Legal / Statutory Requirements

The Committee operates in terms of Section 166 of the Municipal Finance Management Act (MFMA), Act No. 56

of 2003 and has endeavoured to comply with its responsibilities arising from those requirements. Other pieces of

legislation that regulates function of the Committee are:-

- Municipal Structures Act

- Municipal Systems Act 32 of 2000

BACKGROUND

An audit committee is an independent advisory body which must meet at least four times a year in order to

perform the following duties:

Advise the municipal council, the political office-bearers, the accounting officer and the management

staff of the municipality, or the board of directors, the accounting officer and the management staff of

the municipal entity, on matters relating to—

a) internal financial control and internal audits;

b) risk management;

c) accounting policies;

d) the adequacy, reliability and accuracy of financial reporting and information;

e) performance management;

f) effective governance;

g) compliance with this Act, the annual Division of Revenue Act and any other applicable

legislation; h) performance evaluation; and

i) Any other issues referred to it by the municipality or municipal entity;

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a. review the annual financial statements to provide the council of the municipality or, in the case

of a municipal entity, the council of the parent municipality and the board of directors of the entity, with

an authoritative and credible view of the financial position of the municipality or municipal entity, its

efficiency and effectiveness and its overall level of compliance with this Act, the annual Division of

Revenue Act and any other applicable legislation;

b. respond to the council on any issues raised by the Auditor-General in the audit report;

c. carry out such investigations into the financial affairs of the municipality or municipal entity as

the council of the municipality, or in the case of a municipal entity, the council of the parent municipality

or the board of directors of the entity, may request; and

d. Perform such other functions as may be prescribed.

Role and Responsibility of the Audit Committee

The function of the Audit Committee is primarily to assist the Amahlathi Municipality (hereinafter referred to as

the Council) in discharging its duties relating to the safeguarding of assets, the operation of adequate systems,

control processes, the preparation of financial reports and statements and ensuring good governance.

Audit Committee Members and Attendance

The audit committee consists of the members listed hereunder and should meet 4 times per annum as per its

approved terms of reference. In terms of the Audit Committee Charter, the committee should consist of a minimum

of 3 members. Ms L. Smith was appointed as the Chairperson of the Audit Committee. The audit committee held

3 ordinary meetings and 1 special meeting during the year under review.

Name of Member No of ordinary meetings attended

Ms. L. Smith (Chairperson) 4

Mr. M. Mafani 4

Mr. M Mdani 4

Dates of Audit Committee Meetings

09 September 2019

22 November 2019

28 May 2020

09 June 2020

The ordinary audit committee meetings are also attended by the Municipal Manager, Section 56 Managers,

internal and external auditors and other relevant stakeholders.

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The effectiveness of internal controls

The audit committee has assessed the internal controls for the municipality through the Internal Audit unit on

a quarterly basis. Below there are some of the findings that have been identified regarding the internal

controls for the municipality.

REVIEW OF THE ANNUAL FINANCIAL STATEMENTS

Annual Financial Statements were reviewed by both the Internal Audit Unit and the Audit Committee. There were

no major issues that were found on the draft Financial Statement. The following were some of the findings that

were identified:

• Differences between the prior year amounts and the restated amounts;

• Differences between the Annual Financial Statements and the Trial Balance; and

• Differences between the notes of the Annual Financial Statements and the face of the

Statement of the Financial Position and the Statement of the Financial Performance.

PERFORMANCE MANAGEMENT

It was noted that the municipality has not fully implemented the Performance Management System indicating the

process of monitoring, measuring and reviewing performance on a quarterly basis. 2019/20 Annual Performance

information report was reviewed and the committee noted that information was prepared appropriately with

regressed performance rate of 46.53% when compared to the previous financial year (2018/19). Service delivery,

local economic development and municipal transformation key performance areas had poor performance results.

During the 2020/21 mid-term review the performance of the municipality is currently sitting at 63.94%. Management

were advised to address recommendations from internal audit for compliance, reliability and usefulness before the

report is escalated to Council for adoption.

The municipality has been adversely affected by the community protests that have been ongoing since the 16

October 2018. This has caused inefficiencies in the operations of the municipality.

FOLLOW-UP ON THE INTERNAL AUDIT REPORTS ISSUED

It was noted that the municipality has implemented satisfactory recommendations from previous internal audit

reports. Management needs to monitor the implementation of audit action plans for continuous improvement in

the control environment. Robust monitoring of audit action plans needs to take place particularly on high risks

areas that were identified on fleet management. Furthermore control mechanisms need to be instituted and

extensive investigation need to be conducted on the misuse of fuel.

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AUDITOR GENERAL REPORT

The municipality has not addressed audit findings relating to the Office of the Auditor General as only 15% of the

findings were implemented and in-progress at 69%. Improvement was noted as compared to previous financial

year. This has affected the municipality negatively as there might be repeat findings that will be raised by the Office

of the Auditor General.

The quality of In-year management and monthly/quarterly reports

The Municipal Manager submitted reports during the year under review with regard to financial and non-financial

performance. It was noted that the municipality is adversely affected financially as the result majority of the targets

relating to service delivery were not met.

Developed process plans for both IDP and Budget have not been adhered to, which resulted in non-compliance

on the implementation of the plan.

Internal Audit

The Internal Audit Unit managed to assess control environment during the financial. 100% planned audits were

executed completely and the reports were discussed with management. There was a delay in developing risk

based internal audit plan for 2020/21 financial year. During 2020/21 mid-term the following emerging risks were

reported and management need to ensure that risk mitigation plans developed

Auditor General South Africa

It must be noted that the municipality needs to put more controls in terms of implementing and monitoring the AG

and internal audit action plans including risk mitigation plans. There is a sound and professional relationship

between the Audit Committee and the Office of the Auditor General so as to ensure compliance.

SIGNED BY:

_______________________________________

Chairperson of the Audit Committee

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CHAPTER 7 APPENDICES

APPENDIX A: COUNCILLORS, COMMITTEES ALLOCATED AND COUNCIL ATTENDANCE Councillor's Council Meetings Attendance: 2019/ 2020 Financial Year July 2019 - June 2020

Council Members No. of Meeting

s Attende

d

Percentage

Council Meeting

s Attenda

nce

Percentage Apologies for

non-attendance

Percentage Absenteeis

m

30-Jul-19

30-Aug-

19

10-Sep-19

18-Sep-19

25-Sep-19

10-Oct-19

30-Oct-19 07-Nov-19

13-Dec-19

18-Dec-19

20-Mar-20

26-03-2020

29-May-

20

Meetings

% % % 1. Cllr. M. Mjikelo P P P P P P P P P P P P P 13 100% 0% 0% 2. Cllr. A. Hobo P P P P P P P P P P P P P 13 100% 0% 0% 3. Cllr. D. Mzili P P P P P P P P 8 100% 0% 0% 4. Cllr. N Busika P APOL

OGY ABSENT

P P P P P P ABSENT

ABSENT

P P 13 69% 8% 23%

5. Cllr. N. Monti P P P P P P APOLOGY

P P P P P APOLOGY

13 85% 15%

0% 6. Cllr. N. Manyika P P ABSEN

T P ABSEN

T P APOLOG

Y ABSENT

P P APOLOGY

P APOLOGY

13 54% 23%

23% 7. Cllr. P. Qaba APOL

OGY APOLOGY

APOLOGY

APOLOGY

ABSENT

P APOLOGY

P P P ABSENT

P APOLOGY

13 39% 46%

15% 8. Cllr. N.Pose P P ABSEN

T P P P P P P P ABSEN

T APOLOGY

ABSENT

13 69% 8%

23% 9. Cllr. N. C. Nongqayi

P P APOLOGY

P P P P P P ABSENT

P P P 13 85% 8%

7% 10. Cllr. N. Mlahleki P P P P P P APOLOG

Y P P P APOLO

GY P ABSE

NT 13 77% 15%

8% 11. Cllr. D.S. Gxekwa

P ABSENT

P APOLOGY

P P P APOLOGY

P ABSENT

APOLOGY

P P 13 62% 15% 23%

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12. Cllr. M, Ngcofe ABSENT

P ABSENT

ABSENT

APOLOGY

P ABSENT ABSENT

P ABSENT

ABSENT

ABSENT

ABSENT

13 23% 8% 69%

13. Cllr. X. Mngxaso APOLOGY

P ABSENT

APOLOGY

ABSENT

P ABSENT APOLOGY

P ABSENT

ABSENT

ABSENT

ABSENT

13 23% 23% 54%

14. Cllr. X.M. Tokwe P P ABSENT

P P P P P ABSENT

P ABSENT

APOLOGY

P 13 69% 8% 23%

15. Cllr. N. Klaas P P P P P P P 7 100% 0% 0% 16. Cllr. N. Jikazayo P APOL

OGY ABSENT

ABSENT

P P P P P P ABSENT

P P 13 69% 23% 8%

17. Cllr. X. Nqata P P P P P P P P P P P P P 13 100% 0% 0% 18. Cllr. M. Nqini P P P P P P P P P P P P P 13 100% 0%

0% 19. Cllr. V. W. Tshaka

P P P P P P P P P P P P P 13 100% 0%

0% 20. Cllr. S. G. Venkile

ABSENT

APOLOGY

APOLOGY

P ABSENT

ABSENT

P ABSENT

ABSENT

APOLOGY

P APOLOGY

P 13 31% 31% 38%

21. Cllr. R. T. Desi P P P P P P P P P P P APOLOGY

P 13 92% 8% 0%

22. Cllr. S. Malawu APOLOGY

APOLOGY

APOLOGY

APOLOGY

APOLOGY

P P P P P P 11 55% 45% 0%

23. Cllr. P. G. Noxeke

ABSENT

P P P P P P P P P P P P 13 92% 0% 8%

24. Cllr. N. A. Mtati ABSENT

P ABSENT

P P P P APOLOGY

ABSENT

P P P P 13 69% 8% 23%

25. Cllr. T. Balindlela P APOLOGY

P P P P P P P P P APOLOGY

P 13 84% 16% 0%

26. Cllr. R.B. Pickering

P P P P P P P P P P P ABSENT

APOLOGY

13 84% 8% 8%

27. Cllr. N. Ngxakangxaka

P P P P P P P 0 P P P P P 13 100% 0% 0%

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Councillor's Council Meetings Attendance: 2019/ 2020 Financial Year July 2019 - June 2020

Council Members Percentage

Council Meeting

s Attenda

nce

Percentage Apologies for

non-attendance

Percentage Absenteeis

m 30-

Jul-19 30-

Aug-19

10-Sep-19

18-Sep-19

25-Sep-19

10-Oct-19

30-Oct-19 07-Nov-19

13-Dec-19

18-Dec-19

20-Mar-20

No. of Meeting

s

% % % 28. Cllr. G. D. Mxosa P APOL

OGY P P P P ABSENT APOLO

GY P P P P APOL

OGY 13 69% 23%

8% 29. Cllr. C.T. Ngxingolo

P APOLOGY

APOLOGY

APOLOGY

APOLOGY

P ABSENT P P P P P P 13 61% 31% 8%

30. Cllr. P. Ntwanambi

P P P P P ABSENT

ABSENT P P ABSENT

ABSENT

ABSENT

ABSENT

13 54% 0% 46%

31. Traditional Leader: Mr. K. Sandile

P P P P P P P P P P P P P 13 100% 0%

0% 32. Traditional Leader: Mr. Z. Ngudle

ABSENT

P P p P P P ABSENT

ABSENT

ABSENT

ABSENT

P P 13 62% 0%

38% 33. Traditional Leader: Mr S.N. Mdledle

P P P p P P P P P P ABSENT

P P 13 92% 0%

8% 34. Traditional Leader: Mr. A. T. Daka

P P P p P P P P P P P P P 13 100% 0%

0% 35. Traditional Leader: Mrs . N.G. Mekuto

P P P p P P P P P P P P P 13 100% 0%

0% 36. Traditional Leader: Mr. X. Zake

P P P p P P P ABSENT

P P P P P 13 92% 0%

8%

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APPENDIX B: COUNCIL COMMITTEES (Other than Mayoral/ Executive Committee) and Purposes of the Committees

Municipal Committees Purpose of Committee

Budget and Treasury The purpose of the Budget and Treasury Standing Committee as a Section 79 Committee of Council is to:-

Provide Political Leadership by being responsible for Policy outcomes, oversight and holds the Chief Financial Officer accountable for

Performance by regular and consistent reporting to Council through the Committee.

Service Delivery Report on Progress and Challenges on Capital Projects.

Report on work done as per the Maintenance programme of Roads, also alerting the committee of the repairs done on Machinery

That might have caused delays in the Programme.

Challenges in the Department in General.

Amount of Jobs created.

The response time in repairing any complaints from the Community.

Report on Budget Expenditure.

Development and Planning To create a conducive environment for business to invest at Amahlathi area.

To encourage business to create jobs in order to reduce unemployment.

To promote SMME's and co-operatives within Amahlathi.

To promote tourism as a vehicle for Job creation within Amahlathi.

To support emerging farmers that are within Amahlathi and link them with business in order to sell their products.

Strategic Services Empowerment is meant to create a conducive Environment for designated groups to be allowed equal opportunities

To ensure that everyone has free access to government benefits irrespective of any kind of disability.

To ensure that Gender is taken care to all workplaces.

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Municipal Committees Purpose of Committee

To restore Human dignity to previously disadvantage groups

To capacitate and empower the community to all matters of government

To conduct awareness campaigns for designated groups about their rights.

Community Services To provide accessible, affordable, equitable and sustainable service as well as a healthy environment to residents and business operating in the Amahlathi Local Municipality.

To contribute towards a safe and secure environment.

To promote a clean and healthy environment.

To promote a culture of reading and learning.

To ensure that Public Amenities are improved and well managed.

Corporate Services To oversee the proper, efficient and effective operations of Human Resources and Administration Department.

To ensure that Policy Formulation and recommendation from both Sections are in line with vision and mission of the municipality as well as

Compliant with National and Provincial Legislation.

To represent employer component in Provincial Institution Cluster of SALGA, Amathole District Municipality

To champion good working relations between the employer and employee component of the municipality.

To ensure that Departmental goals and Departmental Budget are aligned.

To devise programs for imparting of skills to Stakeholders within the municipal area.

To oversee that proper employment procedures are undertaken without disadvantaging anyone.

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APPENDIX C: THIRD TIER STRUCTURE

Third Tier Structure

Directorate Director/Manager (State title and name)

BUDGET AND TREASURY OFFICE MR L MANJINGOLO

CORPORATE SERVICES DEPARTMENT MRS. N. PLAATJIE – ACTING DIRECTOR (SECONDED AS AT MAY 2020 )

ENGINEERING SERVICES DEPARTMENT MR. CEKISO – ACTING DIRECTOR (SECONDED AS AT MAY 2020)

COMMUNITY SERVICES DEPARTMENT MRS P DIBELA

PLANNING AND DEVELOPMENT DEPARTMENT MR M MAKUNGA

STRATEGIC SERVICE DEPARTMENT VACANT

Use as a spill-over schedule if top 3 tiers cannot be accommodated in chapter 2 (T2.2.2). T C


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APPENDIX D: FUNCTIONS OF MUNICIPALITY

MUNICIPAL FUNCTIONS Function Applicable to Municipality (Yes / No)*

Constitution Schedule 4, Part B functions:

Air pollution Yes

Building regulations Yes

Child care facilities Yes

Electricity and gas reticulation Yes

Firefighting services Yes

Local tourism Yes

Municipal airports No

Municipal planning Yes

Municipal health services No

Municipal public transport No

Municipal public works only in respect of the needs of municipalities in the discharge of their responsibilities to administer functions specifically assigned to them under this Constitution or any other law

Yes

Pontoons, ferries, jetties, piers and harbours, excluding the regulation of international and national shipping and matters related thereto

No

Storm water management systems in built-up areas Yes

Trading regulations Yes

Water and sanitation services limited to potable water supply systems and domestic waste-water and sewage disposal systems

No

Beaches and amusement facilities Yes

Billboards and the display of advertisements in public places Yes

Cemeteries, funeral parlours and crematoria Yes

Cleansing Yes

Control of public nuisances Yes

Control of undertakings that sell liquor to the public Yes

Facilities for the accommodation, care and burial of animals Yes

Fencing and fences Yes

Licensing of dogs Yes

Licensing and control of undertakings that sell food to the public Yes

Local amenities Yes

Local sport facilities Yes

Markets Yes

Municipal abattoirs Yes

Municipal parks and recreation Yes

Municipal roads Yes

Noise pollution Yes

Pounds Yes

Public places Yes

Refuse removal, refuse dumps and solid waste disposal Yes

Street trading Yes

Street lighting Yes

Traffic and parking Yes

* If municipality: indicate (yes or No); * If entity: Provide name of entity


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APPENDIX E: WARD REPORTING

Ward Name (Number)

Name of Ward Councillor and elected Ward Committees

Committee established (Yes /NO)

Number of Committee meetings held during the year

Number of quarterly reports submitted to the Speaker on time

Number of quarterly public meeting held during year

WARD 1 Cllr D.Mzili 1.Lindela Manyakanya 2.Nokrisimesi Mbande 3.Nozolile Mfuleni 4.Lulama Kwankwa 5.Cynthia Vane 6.Phumla Bobo 7.Nokuthula Madlokazi 8.Thulani Mlarsheni 9.Vuyokazi Bikitsha 10.Vuyisile Mandla

YES 6 1 1

WARD 2 Cllr D.S.Gxekwa 1.Veliswa Mhluzi 2.Vuyelwa Nkovu 3.Siyabulela Mpayipheli 4.Siseko Cawa 5. 6.Cebo Madlokazi 7.Kungeka Sixholo 8.Ndodomzi Manyakanyaka 9.Mongameli Rode 10.Nomataru Mhlauli

YES 4 0 1

WARD 3 Cllr M.Ngcofe 1.Sikelelwa Tamba 2.Alfred Veto 3.Phiweka Socishe 4.Thozama Madlokazi 5.Zimasa Mthi 6.Akhona Tweni 7.Mfuyo Jumba 8.Nkosabantu Busika 9.Fundiswa Luthuli 10.Makhi Manentsa

YES 2 0 1

WARD 4 Cllr M Mjikelo 1.Nocwaka Nonyongo 2.Portia Mbesi Nancy Cofa 4. 5.Ntombizakhe Nkwentsha 6.Veronica Vellem

YES 6 1 3


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7.Ali Sautana 8.Thandiswa Tshali 9.Nonzuzo Mahlathi 10Nonkanyiso Charlie

WARD 5 Cllr Brukhwe 1.Sakhumzi Lubengu 2.Ntombizanele Nono 3.Nomakorinte Ngcaku 4.Thobigunya Kolobile 5.Vukaphi Mpumelelo 6.Neliswa Nyathi 7.Vivian Sajini 8.Phindiwe Blom

YES 3 0 0

WARD 6 Cllr Tokhwe 1.Olwethu Booi 2.Nosango Manoni 3.Luyanda Sindi 4.Hussein Wayne Mopp 5.Nontekelelelo Xiniwe 6.Siphokazi Funani 7.Gudiswa Matomela 8.Nosiphiwo Nogqala 9. 10.Veliswa Mondeleki

YES 5 0 2

WARD 7 Cllr Jikazayo 1.Sihlalo Magibizela 2.Phatheka Nojoko 3.Nontuthuzelo Damane 4.Nozukile Felem 5.Nosithile Momeni 6.Nwabisa Mbelwana 7.Nokona Bacela 8.Norah Toyiya 9.Kholiwe Sindaphi

YES 7 0 1

WARD 8 Cllr X.Nqatha 1.Lulama Kama 2. 3.Lee Fletcher 4.X.Mbiko 5.Mthuthuzeli Mkefu 6.Bulelwa Pinana 7.Busisa Xongwana 8.Nombuzo Bhanethi 9.Wonke Ntlombe 10.Nosiphiwo

YES 9 1 2

WARD 9 Cllr M.Nqini 1.Vuyo Mdutywa 2.Athini Somana 3.Zukisani Tancu

YES 10 1 2


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4.Khanya Sotyantsi 5.Msa Madliwa 6.Athule Melani 7.Thandeka Ntsasa 8.Zoleka Mbekeni 9.Zameka Sotyantsi 10.Nobekaphi Wawa

WARD 10 Cllr V.Tshaka 1.N.Maseti 2. 3.Ntombizakhe Jaza 4.Bukelwa Soyi 5.Buntu Mpondo 6.Unathi Potose 7.Ndileka Magwaxaza 8.Nomfanelo Fikilane 9.Ntombizanele Sodzeme 10.Cebokazi Nxawe

YES 4 0 1

WARD 11 Cllr S.Venkile 1.Sizeka Mqwebedu 2.Sebenzile Barney 3.Nokwanda Sinina 4.Lusanda Habule 5.Andile Ngwalangwala 6.Nomsebenzi Lantu 7.Nontyantyambo Charles 8.Mzwamabhele Norushe 9.Sindiswa Lunge 10.Bukiwe Madikane

YES 6 0 1

WARD 12 Cllr R.Desi 1.Thandeka Blom 2.Thumeka Nobavu 3.Nomvuyo Ntsudushe 4.Cebo Kotsobe 5.Phelisa Zipindile 6.Fanelwa Ngese 7.Luvuyo Mtila 8.Nosicelo Tishala 9.Lote Nosipiwo 10.Zukiswa Komani

YES 9 0 2

WARD 13 Cllr S.Malawu 1.Nomandithini Sotyantsi 2. 3. 4.Tshona Caswell 5.Siyabulela Krishi 6.Zingaphi Sawuti

YES 9 0 2


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7.Vuyelwa Nyamakazi 8.Vuyo Jakuja 9.Veliswa Lamana 10.

WARD 14 Cllr D.Noxeke 1.Neliswa Mbulawa 2.Lina Busika 3.Victoria Poni 4.Zukile Jaqula 5.Yoliswa Mapukatha 6.Nozuko Mbiko 7.Mlingiseleli Cetywayo 8.Mziyanda Mtsewu 9.Bulelani Ndoloshe 10.Nomsa Jeremiah

YES 5 0 1

WARD 15 CLLR Mtati 1.Vulindlela Mvandaba 2.Zoliswa Kweleta 3.Mlandeli Mbende 4.Themba Mdedetyana 5.Mbulelo Ndinisa 6.Vusumzi Foslara 7.Sintombi Frans 8.Mzikayise Dyosi 9.Thembisa Nkangala 10.Yolanda Mampangashe

YES 10 1 2


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APPENDIX F: MUNICIPAL AUDIT COMMITTEE RECOMMENDATIONS

ITEM RESPONSIBLE

PROGRESS

Register of Fruitless & Wasteful Expenditure

• It was resolved that going forward the MM should forward the MMs Status quo report to

the AC Members prior the AC sittings so that the AC can be able to engage on matters

raised on MMs report thoroughly.

• It was also resolved that Audit Committee will include the report on Standardisation as

reported by MM on their report to the Council.

Municipal Manager

Budget vs Actual Expenditure

It was indicated that Revenue Enhancement Strategy was developed by BTO however it

could not be work-shopped to Councillors on the 31st March 2020 due to National

Lockdown.

Chief Financial Officer


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ITEM RESPONSIBLE

PROGRESS

Fraud Awareness Campaigns

It was resolved that Internal Audit Unit should request for IT’s assistance to conduct the

long overdue Fraud Awareness Workshop that was supposed to be conducted for EXCO

Members.

Internal Audit Unit Fraud Awareness for EXCO Members could

not be held due to number of commitments

on the EXCO side.

Municipal Re-engineering

On 22nd November 2019, it was indicated that Corporate Services Department needs to

present the solution regarding unavailability of job descriptions and the issue of

Institutional organogram.

COGTA has assisted the municipality in conducting an organisational analysis, report will

be presented to Management and the Council.

Director Corporate Services

Fleet Management Report

• On the 22nd November 2019, it was resolved that Director Corporate Services should

provide detailed actions to address the findings that were raised on the Fleet

Management Audit Report and present those actions in the next AC Meeting due to the

fact that the findings that were raised on the report were of serious nature and huge

financial implications.

• MM indicated that she will make a follow up on the matter.

Director Corporate Services Action plan was prepared and included on

the next AC Pack for discussions.


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ITEM RESPONSIBLE

PROGRESS

Supply Chain Management Report

It was resolved that SCM should develop action plans on findings raised on the report and

these actions will be discussed in the next AC Meeting.

Chief Financial Officer Action plan was prepared and included on

the next AC Pack for discussions.

Municipal Commonage

On the 22nd November 2019 it was resolved that the Director Community Services should

write a letter to Provincial Treasury and Environmental Affairs and seek advice regarding

Municipal Commonages.

On the 28th May 2020 an update was given by MM indicating that letter was drafted and

submitted, site visits were conducted.

Director Community Services

Draft Tariff Structure was developed and

sent for adoption by Council on the

29/06/2020 but meeting could not sit as

scheduled


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APPENDIX G: DISCLOSURES OF FINANCIAL INTERESTS

Disclosures of Financial Interests

Period 1 July 2019 to 30 June of Year 2020

Position Name Description of Financial interests* (Nil / Or details)

(Executive) Mayor Cllr A. Hobo Nil

Member of EXCO Cllr. N Pose Nil

Cllr. Kato Manyika Nil

Cllr. Mzili Nil

Cllr. Monti Nil

Cllr. Mjikelo Nil

Cllr. Balindlela Nil

Councillor

Municipal Manager I Sikhulu-Nqwena Nil

Chief Financial Officer L Manjingolo Nil

Directors X Mntonintshi Nil

N Mahlahi-Nkuhlu Nil

O Makhunga Nil

P Dibela Nil

Other S57 Officials

* Financial intersests to be disclosed even if they incurred for only part of the year. See MBRR SA34A T J


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APPENDIX H: REVENUE COLLECTION PERFORMANCE BY VOTE

Revenue Collection Performance by Vote

R' 000

Vote Description

Year 2018/19

Current: Year 2019/20 Year 2018/19 Variance


Adj Budget Actual Original

Budget

Adj Budget

Vote 1 - Executive & Council 98 259 109 372 109 751 103 660 -6% -6%

Vote 2 - Budget & Treasury 42 015 20 200 60 161 74 823 73% 20%

Vote 3 - Corporate Services – – – 0% 0%

Vote 4 - Planning & Development 4 212 40 256 40 189 13 464 -199% -198%

Vote 5 - Health – 0% 0% Vote 6 - Community & Social

Services 13 206 2 010 1 634 1 482 -36% -10%

Vote 7 - Housing 476 244 8 0% 0%

Vote 8 - Public Safety 35 13 13 – -100% -100%

Vote 9 - Sport & Recreation – – – -100% 0%

Vote 10 - Waste Management 14 260 11 389 12 341 8 832 -29% -40%

Vote 11 - Road Transport 2 739 6 211 5 175 4 922 -26% -5%

Vote 12 - Electricity 19 927 50 661 35 161 29 340 -73% -20%

Vote 13 - Environmental Protection 0 482 64 – #DIV/

0! #DIV/0!

Total Revenue by Vote 194 653 241 071 264 733 236 533

Variances are calculated by dividing the difference between actual and original/adjustments budget by the actual. This table is aligned to MBRR table A3 T K.1


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APPENDIX I: LONG TERM CONTRACTS

Long Term Contracts (20 Largest Contracts Entered into during Year 2019/20

R' 000

Name of Service Provider (Entity or Municipal

Department)

Description of Services Rendered by the Service Provider

Start Date of Contract

Expiry date of Contract

Project manager

Contract Value

None

T H.1

Public Private Partnerships Entered into during Year 2019/20

R' 000

Name and Description of Project

Name of Partner(s) Initiation Date Expiry date Project manager

Value 2018/19

None

T H.2


195 | P a g e

APPENDIX J: MUNICIPAL ENTITY

Municipal Entity/Service Provider Performance Schedule Name of Entity & Purpose

(a) Service Indicators

Year 0 Year 1 Year 2 Year 3

(b) Service Targets

Target Actual Target Actual Target

*Previous

Year

*Previous Year

*Current Year

*Current Year

*Current Year

*Following Year

(i) (ii) (iii) (iv) (v) (vi) (vii) (viii) (ix) (x)

N/A

Note: This statement should include no more than the top four priority indicators. * 'Previous Year' refers to the targets that were set in the Year -1 Budget/IDP round; *'Current Year' refers to the targets set in the Year 0 Budget/IDP round. *'Following Year' refers to the targets set in the Year 1 Budget/IDP round. Note that all targets must be fundable within approved budget provision. In column (ii) set out the Service Indicator (In bold italics) then the Service Target underneath (not in bold - standard type face) to denote the difference. T I


196 | P a g e

APPENDIX K: REVENUE COLLECTION PERFORMANCE BY SOURCE

Revenue Collection Performance by Source

R '000

Description

Year 2018/19 Year 2019/20 Year 2018/19

Variance


Adjustments Budget


Adj Budget

Property rates 17 885 17 659 17 659 20 209 13% 13%

Property rates - penalties & collection charges – – – –

Service Charges - electricity revenue 26 514 45 161 35 161 26 368

-71% -33%

Service Charges - water revenue – – – – 0% 0%

Service Charges - sanitation revenue – – – –

0% 0%

Service Charges - refuse revenue 11 433 10 000 10 000 12 052

17% 17%

Service Charges - other 261 – – 76 0% 0%

Rentals of facilities and equipment 486 1 112 251 58

-1806% -330%

Interest earned - external investments 965 1 894 1 894 1 434

-32% -32%

Interest earned - outstanding debtors 5 676 2 777 2 777 7 116

61% 61%

Dividends received – – – – 0% 0%

Fines 13 506 106 16 -3142% -581%

Licences and permits 1 170 2 749 2 749 1 183 0% -132%

Agency services 852 1 668 1 000 1 758 5% 43%

Transfers recognised - operational 101 004 112 541 113 993 111 626

-1% -2%

Other revenue 28 394 1 371 41 010 54 634 97% 25%

Gains on disposal of PPE – – – – 0% 0%

Total Revenue (excluding capital transfers and contributions)

194 653 197 439 226 601 236 533 16.53% 4.20%

Variances are calculated by dividing the difference between actual and original/adjustments budget by the actual. This table is aligned to MBRR table A4. T K.2

197 | P a g e

APPENDIX L: CONDITIONAL GRANTS EXCLUDING MIG

Conditional Grants: excluding MIG

R' 000

Details

Budget Adjustments Budget

Actual Variance Major conditions applied by donor (continue below

if necessary)

Budget Adj Budget

Neighbourhood Development Partnership Grant

Public Transport Infrastructure and Systems Grant

Other Specify:

FMG Grant 2 235 2 235 2 235 0% 0% Yes

MSIG Grant – – – 0% 0% Yes

EPWP Grant 1 236 1 236 887 -39% -39% Yes

Equitable Share 105 863 105 863 105 863 0% 0% Yes

PMU 5% 2 007 2 007 1 123 -0.79 -0.79 Yes

Disaster Relief Grant – 596 318 1.00 -0.88

Provincial

Library Grant 1 200 1 200 1 200 0% 0% Yes

Waste Grant – 356 – 0% 0% Yes

Total 112 541 113 493 111 626

* This includes Neighbourhood Development Partnership Grant, Public Transport Infrastructure and Systems Grant and any other grant excluding Municipal Infrastructure Grant (MIG) which is dealt with in the main report, see T 5.8.3. Variances are calculated by dividing the difference between actual and original/adjustments budget by the actual. Obtain a list of grants from national and provincial government.

T L

198 | P a g e

APPENDIX M: CAPITAL EXPENDITURE - NEW ASSETS PROGRAMME

Capital Expenditure - New Assets Programme*

R '000

Description Year 2019/20 Planned Capital expenditure

Original Budget

Adjustment Budget

Actual Expenditure

FY + 2019/20

FY + 2020/21

FY + 2021/22

Capital expenditure by Asset Class

Infrastructure - Total 23 132

20 629

8 096

–

–

–

Infrastructure: Road transport - Total 14 832

20 629

7 115

–

–

–

Roads, Pavements & Bridges 14 832

20 629

7 115

Storm water

Infrastructure: Electricity - Total 8 300

–

981

–

–

–

Generation

Transmission & Reticulation 5 500

–

981

Street Lighting 2 800

– –

Infrastructure: Water - Total –

– –

–

–

–

Dams & Reservoirs

Water purification

Reticulation

Infrastructure: Sanitation - Total – –

–

–

–

Reticulation



199 | P a g e

Infrastructure: Other - Total – –

–

–

–

Waste Management

Transportation

Gas

Other

Community - Total 20 500

17 503

5 202

–

–

–

Parks & gardens

Sports fields & stadia 12 000

12 000

3 805

Swimming pools

Community halls 2 500

2 500

797

Libraries

Recreational facilities

Fire, safety & emergency 3 000

2 403

60

Security and policing

Buses

Clinics

Museums & Art Galleries

Cemeteries 3 000

– –

Social rental housing

Other –

600

540

Table continued next page

Table continued from previous page

Capital Expenditure - New Assets Programme*


200 | P a g e

R '000

Description Year 2017/18 Planned Capital expenditure

Original Budget

Adjustment Budget

Actual Expenditure

FY + 2018/19

FY + 2019/20

FY + 2020/21


Heritage assets - Total –

– –

–

–

–

Buildings

Other

Investment properties - Total –

5 000 –

–

–

–

Housing development

Other –

5 000 –

Other assets 100

800

351

–

–

–

General vehicles

Specialised vehicles

Plant & equipment

Computers - hardware/equipment –

500

129

Furniture and other office equipment

Abattoirs

Markets

Civic Land and Buildings

Other Buildings

Other Land Surplus Assets - (Investment or

Inventory)


201 | P a g e

Other 100

300

223

–

–

Agricultural assets –

– –

–

–

–

List sub-class

Biological assets – –

–

–

–

List sub-class

Intangibles –

– –

–

–

–

Computers - software & programming

Other (list sub-class)

Total Capital Expenditure on new assets 43 732

43 932

13 649

–

–

–

Specialised vehicles –

– –

–

–

–

Refuse –

–

–

Fire

Conservancy

Ambulances

* Note: Information for this table may be sourced from MBRR (2009: Table SA34a) T M.1


202 | P a g e

Capital Expenditure - Upgrade/Renewal Programme*

R '000

Description

Year 2017/18 Planned Capital expenditure

Original Budget

Adjustment Budget

Actual Expenditure

FY + 2018/19

FY + 2019/20

FY + 2020/21


Infrastructure - Total –

– –

–

–

–

Infrastructure: Road transport -Total –

– –

–

–

–

Roads, Pavements & Bridges

Storm water

Infrastructure: Electricity - Total –

– –

–

–

–

Generation – –

–

–

–

Transmission & Reticulation

Street Lighting

Infrastructure: Water - Total –

– –

–

–

–

Dams & Reservoirs

Water purification

Reticulation

Infrastructure: Sanitation - Total – –

–

–

–

Reticulation


Infrastructure: Other - Total –

– –

–

–

–

Waste Management

Transportation


203 | P a g e

Gas

Other

Community –

– –

–

–

–

Parks & gardens

Sports fields & stadia –

– –

–

–

–

Swimming pools –

– –

–

–

–

Community halls –

– –

–

–

–

Libraries –

– –

–

–

–

Recreational facilities –

– –

–

–

–

Fire, safety & emergency –

– –

–

–

–

Security and policing –

– –

–

–

–

Buses –

– –

–

–

–

Clinics –

– –

–

–

–

Museums & Art Galleries –

– –

–

–

–

Cemeteries –

– –

–

–

–

Social rental housing –

– –

–

–

–

Other –

– –

–

–

–

–

– –

Heritage assets –

– –

–

–

–

Buildings


204 | P a g e

Other

Table continued next page

Table continued from previous page

Capital Expenditure - Upgrade/Renewal Programme*

R '000

Description

Year 2017/18 Planned Capital expenditure

Original Budget

Adjustment Budget

Actual Expenditure

FY + 2018/19

FY + 2019/20

FY + 2020/21


Investment properties –

– –

–

–

–

Housing development

Other

Other assets –

– –

–

–

–

General vehicles

Specialised vehicles

Plant & equipment

Computers - hardware/equipment

Furniture and other office equipment

Abattoirs

Markets

Civic Land and Buildings

Other Buildings

Other Land Surplus Assets - (Investment or

Inventory)

Other –

–

–


205 | P a g e

Agricultural assets –

– –

–

–

–

List sub-class

Biological assets –

– –

–

–

–

List sub-class

Intangibles –

– –

–

–

–

Computers - software & programming

Other (list sub-class)

Total Capital Expenditure on renewal of existing assets

–

– –

–

–

–

Specialised vehicles – –

–

–

–

Refuse

Fire

Conservancy

Ambulances

* Note: Information for this table may be sourced from MBRR (2009: Table SA34b) T M.2


206 | P a g e

APPENDIX N: CAPITAL PROGRAMME

Capital Programme by Project: Year 2019/20

R' 000

Capital Project Original Budget Adjustment Budget

Actual Variance (Act - Adj) %

Variance (Act - OB) %

Executive & Council

Buildings – 5 000 –

Budget & Treasury

Other Assets – – –

Corporate Services

Other Assets 100 600 154

Planning & Development

Other Assets – – – 0% 0%

MIG Projects 38 132 38 132 12 317 -210% -210%

Community & Social Services


Housing


Public Safety


Sports & Recreation - Parks & Gardens


Refuse


Road Transport – 200 198

Other Assets


207 | P a g e

Electricity

Upgrade Electricity Infrastructure 5 500 – 981 100% -461%

Environmental Protection


43 732 43 932 13 649


208 | P a g e

APPENDIX O: Capital Programme by Project by Ward: Year 18/19

Capital Programme by Project by Ward: Year 19/19

R' 000

Capital Project Ward(s) affected Works completed (Yes/No)

Capital Programme by Project by Ward: Year 19/20 Gubevu 12

In progress

Border Post 8 In progress

Sophumelela 1 In progress

Keiskammahoek paving 1 In progress

Keiskammahoek Fire Station 1 In progress

Capital Programme by Project by Ward: Year 18/19 ETHEMBENI INTERNAL ROADS PH 3 7 Not Complete

KEI ROAD INTERNAL ROADS 8 Practical Complete

NOTHENGA INTERNAL ROADS 12 Complete

RHAWINI INTERNAL ROADS 5 Complete

LANGDRAI INTERNAL ROADS 4 Complete

ZINGCUKA INTERNAL ROADS 1 Complete

RABHULA INTERNAL ROADS 3 Complete

GXULU INTERNAL ROADS 1 In progress

CATA INTERNAL ROADS 2 In progress

KHAYELITSHA INTERNAL ROADS 8 In progress

LOWER XHOLORHA SURFACING 13 In progress

MLUNGISI SURFACING 14 In progress

Water

"Project A"

"Project B"

Sanitation/Sewerage

Electricity

AMAHLAHI HIGHMAST LIGHTS 1 and 5 Complete

BUSHPIG UPGRADE 13 In progress

Housing

Refuse removal


209 | P a g e

Storm water

N/A

Economic development

Sports, Arts & Culture

MLUNGISI SPORTSFIELD PH1 15 In progress

Environment

Health

Safety and Security

ICT and Other

T O


210 | P a g e

APPENDIX P: Declaration of Loans and Grants made by the municipality

Declaration of Loans and Grants made by the municipality: Year 2019/20 All Organisation or Person in receipt of

Loans */Grants* provided by the

municipality

Nature of project Conditions attached to

funding

Value Year 0 R' 000

Total Amount committed over

previous and future years

None

* Loans/Grants - whether in cash or in kind T R


211 | P a g e

APPENDIX Q: Service Delivery Backlog experienced by the community where

another sphere of government is responsible for service provision

Services by Sector Departments Services Implemented/Provided Service Backlogs

Access to Sanitation 93% 5,9%

Access to Water 89.7% 10.3%

Electricity 85.9% 10,3% (New extensions)

Housing 459 3 172

Refuse Removal 30,8% 69,2%

Roads 18% 82%


212 | P a g e

ANNEXURE R: COGTA KEY PERFORMANCE INDICATORS

RE: REQUEST FOR THE CONSIDERATION OF KEY PERFORMANCE INDICATORS

IN THE ANNUAL REPORT FOR 2019//20 FINANCIAL YEAR

The following is the list of indicators that were agreed upon and on how the performance information should be

populated:-

CHAPTER: ORGANISATIONAL TRANSFORMATION AND INSTITUTIONAL DEVELOPMENT –KPA 1

Annual performance as per key performance indicators in municipal transformation and organizational

development

Indicator name Total number of

people (planned

for) during the

year under

review

Achievement

level during

the year

under review

Achievement

percentage during

the year

Comments on the

gap

1 Vacancy rate for all

approved and

budgeted posts;

0 0 0 There were no

positions advertised

as there were no

planning for the

current year

2 Percentage of

appointment in

strategic positions

(Municipal Manager

and Section 57

Managers)

6 2 33.33% The two directors

have resigned and we

are in a process of

filling the positions

3 Percentage of

Section 57 Managers

including Municipal

Managers who

attended at least 1

skill development

training course within

the FY

0 0

4 Percentage of

Managers in

Technical Services

0 0 0


213 | P a g e

with a professional

qualification

6 Level of effectiveness

of PMS in the LM –

(LM to report)

In effective because employees do not comply, Not signing the accountability

agreement and no reviews done.

7 Percentage of staff

that have undergone

a skills audit

(including

competency profiles)

within the current 5

year term

142 None No new changes for

the current financial

year

8 Percentage of

councillors who

attended a skill

development training

within the current 5

year term

10 None No training has been

done in the current

financial year

9 Percentage of staff

complement with

disability

1 3 33.33% No new employees,

the status quo

remains the same

10 Percentage of female

employees

331 None The number of

employees has

dropped due to the

fact that there were

only resignations and

no new employees

11 Percentage of

employees that are

aged 35 or younger

89 None No new employees

12 Adoption and

implementation of a

District Wide/ Local

Performance

Management System


214 | P a g e

CHAPTER: BASIC SERVICE DELIVERY PERFORMANCE HIGHLIGHTS (KPA 2)

Annual performance as per key performance indicators in Electricity services

Indicator

name

Total number of

household/customer

expected to benefit

Total House

Holds=34159

Estimated

backlogs

(actual

numbers)

Target set

for the f.

year under

review

(actual

numbers)

Number of

HH/customer

reached

during the FY

Percentage of

achievement

during the year

1 Percentage

of

households

with access

to electricity

services

24 269 3 429 20 840 20 840 100

2 Percentage

of indigent

households

with access

to basic

electricity

services

24 269 3 429 24 269 20 840 86

3 Percentage

of indigent

households

with access

to free

alternative

energy

sources

24 269 886 886 886 100

Annual performance as per key performance indicators in road maintenance services

Indicator

name

Total number of

household/custo

mer expected to

benefit

Estimated

backlogs

(actual

numbers)

Target set

for the f.

year under

review

(Actual

numbers)

Number of

HH/customer

reached

during the FY

Percentage of

achievement

during the year


215 | P a g e

1 Percentage of

households

without access

to gravel or

graded roads

24 269 14 561 11 648 11 648 80

2 Percentage of

road

infrastructure

requiring

upgrade

980 km 580 km 12 km 12 km 100

3 Percentage of

planned new

road

infrastructure

actually

constructed

980 km 580 km 24 km 24 km 100

4 Percentage of

capital budget

reserved for

road upgrading

and

maintenance

effectively

used.

R 522 m R 522 m R17.4 m R 17.4 m 100

Annual performance as per key performance indicators in waste management services

Indicator

name

Total number of

household/cust

omer expected

to benefit

Estimated

backlogs

(actual

numbers)

Target set

for the f.

year

under

review

Number of

HH/customer

reached

Percentage of

achievement

during the year

Percentage

of

households

with

access to

refuse

removal

services

No. of

households

and

businesses

with basic

waste

collection

29 994 House

Holds

20 742

households

and

businesses

with access to

basic waste.

(29 994-9252

=20 742)

9252

household

s and

businesse

s with

access to

basic

waste

30,8% in the

Amahlathi

Municipality

(9252 / 29 994

X 100= 30,

8%)

Percentage of

households with

access to refuse

removal

services 30,8%


216 | P a g e

2 Existence of

waste

management

plan

-Integrated Waste Management Plan is due for its Reviewal - the plan was endorsed in 2012 (2012- 2017) and it is due for reviewal, due to the non-availability of funds, we have requested assistance from National Department of Environmental Affairs to assist with the IWMP reviewal. The municipality has been funded by DEDEAT, for the restoration of Stutterheim Waste Disposal Facility, therefore the process of restoration will go simultaneously with the reviewal of IWMP, and therefore the implementation process will start in 2020/21 financial year.

Annual performance as per key performance indicators in housing and town planning services

Indicator

name

Total number of

household/custo

mer expected to

benefit

Estimated

backlogs

(Actual

numbers)

Target set

for the f.

year under

review

Number of

HH/customer

reached

Percentage of

achievement

during the year

1 Percentage of

households

living in

informal

settlements

4,4% 1527 N/A N/A 0%

2 Percentage of

informal

settlements

that have been

provided with

basic services

N/A N/A N/A N/A N/A

3 Percentage of

households in

formal housing

that conforms

to the

minimum

building

standards for

residential

houses

57% 19950 N/A N/A N/A

4 Existence of

an effective

indigent policy

There is Indigent policy that has been adopted and it is reviewed annually.


217 | P a g e

5 Existence of

an approved

SDF

There is an approved Amahlathi Municipality Spatial Development Framework (2012) which

is valid up until 2015/2016 FY. This SDF is currently being reviewed to make it SPLUMA

complaint, but the process was delayed due to the Municipality’s cash flow position that

affected the payment of the Service Provider. The reviewed SDF will be ready for

implementation by the beginning of 2021 as the review process has resumed

6 Existence of

Land Use

Management

System

(LUMS)

Land Use Surveys (determination of land uses within Amahlathi Local Municipality),

informed by Land Use Ordinance of 15 1985 was conducted in August 2012 and Zoning

Maps were created. However a completed Zoning Scheme to regulate land development/ to

control land use rights was not finalised, due to the fact that the Municipality was awaiting

on the Implementation of Spatial Planning and Land Use Management Act No 13 of 2013.

The development of a SPLUMA compliant Wall to Wall Land Use Scheme will be will be

finalised by the end of 2020 though a recently appointed Town Planning Consultant.

CHAPTER: MUNICIPAL LOCAL ECONOMIC DEVELOPMENT FRAMEWORK- (KPA 3)

Annual performance as per key performance indicators in LED

No Indicator name Target set for

the year

Achievement level during

the year (absolute figure)

Achievement

percentage during

the year

1 Existence of LED unit None

- No new recruitments 0%

2 Percentage of LED

Budget spent on LED

related activities.

100% 100% 100%

3 Existence of LED

strategy

LED strategy was adopted by Council in 2012 and it is being reviewed

with assistance from COGTA, which has stalled due to the limitations of

this support process.

4 Number of LED

stakeholder forum

meetings held

8

- 2 Contractors meeting

held

- 4 Agricultural Forum

Meeting held

- 2 CTO’s and LTO’s

meetings

- 3 Hawkers meeting held

- 3 Cooperative meeting

held (Amahlathi Wethu

Secondary Co-Op).

100%

5 Plans to stimulate

second economy

-3 business

plans

developed for

3 cluster

towns

- Keiskammahoek

shopping complex

expression of interest

issued, which is now at

BEC stage.

50%


218 | P a g e


the year



Achievement

percentage during

the year

- Target 2

twining

agreements

with

Strategic-

Institutions in

the EC

MOU developed with Fox

Cox College but not signed

yet.

6 Percentage of SMME

that have benefited from

a SMME support

program

-Training of 10

Contractors

- 30% of

Amahlathi

budget

allocated to

local SMME’s

- 3 trainings

conducted for

Community

Tourism

Organisation

(CTO) and

Local Tourism

Organisations

(LTO’S)

-3 contractors

subcontracted

and

benefited.

- 5 farmers to

be supported

with capacity

building

- 19 Contractors trained

through a Department of

Human Settlements

intervention which was

designed to enable them

to sub-contract in two

new Housing Projects

- % of Amahlathi budget

allocated to local

SMME’s (BTO should

provide the figure)

- 3 training session

conducted for CTOs & LTOs

- 11 contractors met

requirements for

subcontracting on

Cenyulands and Cenyu

Village housing project

implemented by the

Department of Public Works.

-SMME business training by

IDC at Mgwali Village

- Farmers supported on

Capacity building.

- 2 Tourism Events attended

to market Amahlathi craft

artefacts

80%


219 | P a g e


the year



Achievement

percentage during

the year

-4 tourism

event

attended to

provide

access to

market for

Crafters

7 Number of job

opportunities created

through EPWP

80 people to

be employed

by 30 June

2020

80 people were employed

under EPWP Programme

77%

8 Number of job

opportunities created

through PPP

n/a n/a n/a

CHAPTER: MUNICIPAL FINANCIAL VIABILITY AND MANAGEMENT (KPA 4)

Annual performance as per key performance indicators in financial viability

Indicator name Target set for the year

R(000)

Achievement level

during the year

R(000)

Achievement percentage

during the year

1 Percentage expenditure of

capital budget

R 38 132 050 R 13 649 432.32

31%

2 Target set for the year

R(000)

Achievement level

during the year

R(000)


during the year vs the

operational budget

3 Salary budget as a percentage

of the total operational budget

(Including Councillor

Allowances)

R121 381 334 R135 993 101

112%


R(000)

Achievement level

during the year

R(000)


during the year vs the actual

revenue

5 Total municipal own revenue as

a percentage of the total actual

budget

R112 607 793

R112 596 526

99.9%


R(000)

Achievement level

during the year

R(000)


during the year

7 Rate of municipal consumer

debt reduction

10 000 000 R32 643 558 326%


220 | P a g e

8 Percentage of MIG budget

appropriately spent

R38 132 050 R12 317 096 32%

9 Percentage of MSIG budget

appropriately spent

R 0 R 0 0%

10 AG Audit opinion

Unqualified Unqualified

11 Functionality of the Audit

Committee

4 meetings 4 meetings 100%

12 Submission of AFS after the end

of financial year

31 October 2020 31 October 2020 100%

CHAPTER: GOOD GOVERNANCE AND PUBLIC PARTICIPATION- (KPA 5)

No Indicator name

Target set for the

year

Achievement level

during the year

(absolute figure)


during the year

1 % war room 12 meetings 12 100%

3 Existence of an effective system to monitor CDWs

Currently there is no tool to motor CDWs. Only assisting them administratively (i.e. venue and communicating their meetings to relevant stakeholders)

5 Effective of IGR structural meetings

Amahlathi Political IGR forum meetings sit on a quarterly basis and are led by the Honourable Mayor. All the Executive Committee members of the Council also form part of the forum as required by the terms of reference of the committee. The IGR is currently coordinated in the Office of the MM and is attached to the Office Administrator.

6 Existence of an effective communication strategy

Communication Strategy adopted by council February 2015, and it is reviewed on an annually basis by reviewing the Communication Action Plan

6 Existence of an effective communication strategy

Communication Strategy adopted by council February 2015, and it is reviewed on an annually basis by reviewing the Communication Action Plan

7 Number of mayoral imbizos conducted

2 2 100%

8 Existence of a fraud prevention mechanism

The Internal Audit Unit is conducting Fraud Awareness Campaigns within the municipality on quarterly basis and those awareness programs are included on the Approved Risk Based Internal Audit Plan for 2015/16 financial year. Employees are workshopped on what constitutes Fraud and what they should do when they suspect that fraud is happening within the municipality. The Internal Audit Unit has also developed Fraud Prevention Plan and Whistle-blowing policy for protection of the Whistle blowers. Policy was submitted to the Council and was adopted in April 2015.


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VOLUME II: 2019/20 AUDITED ANNUAL FINANCIAL

STATEMENTS