mid year budget and perfomance assessment 2016/17 assessment.pdf · kpi no. key performance...

Chairperson: Mr. Russel Tembe, Deputy Chairperson: Mr. Sibusiso Gumbi,

Mr. Mfundo Thango, Mr. Zwelisha Ndwandwe, Mr. Sipho Nyawo

Chief Executive Officer: Mr. Mandla Ntuli

www.umda.org.za

Umhlosinga

Development

Agency

308 Ebony Crescent

Mtubatuba

3935

P O Box 367

St Lucia, 3936

Tel: 035 550 3080

Fax 035 550 3088

UMkhanyakude

District Municipality

Harlingen No. 13433

Kingfisher Road

Mkuze

KwaZulu-Natal

P O Box 449

Mkuze

3965

Tel: 035 573 8600

Fax: 035 573 1094

UMHLOSINGA DEVELOPMENT AGENCY

MID YEAR BUDGET AND PERFOMANCE ASSESSMENT

2016/17

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1. Purpose

The purpose of this report is to inform the Board of Directors, on the mid-year budget and performance assessment for the Agency as at 01 January 2017.

2. Legislative framework Municipal Finance Management Act 56 of 2003, section 88 requires: (1)The accounting officer of a municipal entity must by 20 January of each year—

(a) assess the performance of the entity during the first half of the financial year, taking into account—

(i) the monthly statements referred to in section 87 for the first half of the financial year and the targets set in the service delivery, business plan or other agreement with the entity’s parent municipality; and (ii) the entity’s annual report for the past year, and progress on resolving problems identified in the annual report; and

(b) submit a report on such assessment to— (i) the board of directors of the entity; and (ii) the parent municipality of the entity.

(2) A report referred to in subsection (1) must be made public.

For the purpose of this report, the operating budget, the service delivery and budget implementation

plan, the annual report, the monthly statements in terms of section 87 of the MFMA and the actual

performance in terms of the operating budget for the first six months of the financial year have been

used for the assessment.

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3. DISCUSSION

The document presents a six months Budget and Performance Assessment for 2016/17. Revenue

Audited AFS

Total

Budget

Mid year

assessment Variance

2015/16

Conditional Income

Dept. Of Education 8,533,208 22,272,617 10,629,754 11,642,863

EDTEA - - -

COGTA - - -

8,533,208 22,272,617 10,629,754 11,642,863

Operating Income

Dept. Of Education 853,321 2,611,991 1,129,931 1,482,059

COGTA 48,000 - - -

EDTEA - - - -

Umkhanyakude DM 1,127,000 5,558,077 2,779,039 2,779,039

2,028,321 8,170,068 3,908,970 4,261,098

Other Income

Airport Fees 101,690 145,385 42,667 102,717

Interest on Investment 24,164 78,827 103,737 (24,910)

Other Income - 26,143 - 26,143

Tender Monies 30,486 21,400 8,333 13,067

156,340 271,755 154,738 117,017

Total Income 10,717,869 30,714,440 14,693,462 16,020,978

2016/2017

The agency has projected to receive R15 357 220 for the mid-year 2016/17, based on the mid-

year assessment, the Agency has secured R14 693 462 for the first six months that indicate a

short fall of R663 758 against the midterm budget.

The shortfall was caused mainly by the following reasons:

The schools nutrition programme could not achieve 100% also that in the month of

December they are no deliveries as per the contract.

No tenders were advertised in the first quarter which were saleable.

Some of the of achievements

The agency has able to raise more funds through investment to earn interest.

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Expenditure Operating Expenditure

Audited AFS

Total

Budget

Mid year

assessment Variance

2015/16

Operating Expenditure

Employee costs 4,481,948 7,211,866 2,878,124 4,333,742

Board of Directors 356,291 386,000 233,348 152,652

Security 950 7,200 2,516 4,684

Bank charges 8,775 77,760 8,908 68,852

Insurances 15,672 45,360 39,232 6,128

Internet and website - 23,489 47,621 (24,132)

Machine rentals 31,451 65,495 39,898 25,597

Telephone and telefax - 35,000 10,672 24,328

Printing and Stationery 8,428 19,440 15,093 4,347

Computer expenses (IT Support) 35,000 1,240 33,760

Internal audit - 250,000 114,011 135,989

Travel expense - 100,000 12,507 87,493

Auditors general fees 236,443 430,000 416,852 13,148

Audit committtee expense - - - -

Accomodation and car rentals 60,405 50,000 44,540 5,460

Accounting fees 7,847 - 11,221 (11,221)

Advertising 400 15,400 31,178 (15,778)

Interest Paid 135,315 - 3,529 (3,529)

Cleaning Material 1,461 5,000 2,414 2,586

Airport Establishment 46,100 - -

Conference Workshop & Seminar Attendanc84,308 16,772 (16,772)

Depreciation on fixed assets 172,201 200,000 - 200,000

Repairs and maintenance 48,046 50,000 - 50,000

Investment Promotion - 50,000 19,400 30,600

Fresh Produce Feasibility study - 300,000 - 300,000

Total Operating Expenditure 5,139,958 9,357,010 3,949,077 5,407,933

2016/2017

The operating expenditure has been maintained evenly below are some of the reason: Agri-business and Fundraiser were appointed late in the year, HR officer still to be appointed

so they are some savings. Insurance paid cover the whole year. Website development was not budgeted but required as per the MFMA. The re-advert of Fundraising post. Team building was used to discuss our strategy for 2018.

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Capital and Grant Expenditure

Audited AFS

Total

Budget

Mid year

assessment Variance

2015/16

Capital Expenditure

Laptop - - 63,803 (63,803)

Projector - - 5,999 (5,999)

Filling Cabinet - - 15,841 (15,841)

85,643 (85,643)

Conditional Expenditure

Cogta Grants (Small town rehabilitation) 364,499 - - -

EDTEA - - - -

NSN Programme 8,014,245 22,272,617 9,566,779 12,705,838

8,378,744 22,272,617 9,566,779 12,705,838

Total expenditure 13,518,702 31,629,627 13,601,498 18,028,129

2016/2017

The grant expenditure has been maintained evenly. We had experience issues with our computers most of the employees has been using their own tools to work, management decided to buy 10 laptops with cost effective manner. Linkages between the budget, the IDP and political priorities

Firstly, the budget timetable and the IDP process plan are aligned through an integrated time

schedule.

Secondly, the IDP is prepared and the projects are included in the budget with each project properly

reference per IDP reference number.

Moreover, the financial plan comprising the total budget, among other items, is included in the IDP.

Finally, the implementation of electricity and solid waste projects and other assigned functions

through the structures Act constitutes compliance with National, Provincial and Local development

goals to eradicate backlogs of the past.

IDP Strategic Objectives

UMkhanyakude District Municipality, in its progress of aligning the District Growth and

Development Plan (DGDP) and the delivery priorities which were adopted by the Council for the

2016/2017 Integrated Development Plan (IDP).

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4. Performance Management Report

The Mid-term Organizational Scorecard report is as follows:

K

P

A

KPI NO. KEY PERFORMANCE INDICATOR MIDTERM ASSESSMENT RATING RESASONS FOR

DEVIATION

ACTION PLAN

MEASURABLE OUTPUT MEASURABLE UNIT PROJECTION ACTUAL

GO

VE

RN

AN

CE

1.1 Compliance Checklist reviewed by Audit Committee and adopted by BoD.

Date reviewed by Audit

Committee

Date adopted by the

Board

Quarter 1

Checklist Update

Quarter 2

Checklist populated

Checklist

updated

Partly

Achieved

Company Sec appointed during the second quarter whose responsible for the management of the checklist

To request

adjustment of target

from 3 Checklist

report to 2 reports

for Board approval.

1.2 Organizational Policies

reviewed by Audit Committee

and adopted by

Number of policies

reviewed by Audit

Committee and adopted

by the Board

Quarter 1

5 Policies

Quarter 2

5 policies

6 policies

adopted by the

Board

Partly

Achieved

Focus on Plans

for adopted

policies which

were adopted in

the 2015/16 FY

resulted in the

deviation.

Annual target will

not be adjusted; as

short fall will be

recovered in quarter

3 and 4.

1.3.1 Shareholder Compact with

Annual Performance Targets

and Budget signed between

the Board and UKDM

Date signed Quarter 1

Sign Shareholder

Compact

Shareholder

Compact not

signed

Not

Achieved

The Shareholder

Compact and its

annexures have

been submitted to

UKDM; however;

change in political

leadership in

August 2016

resulted in the

deviation.

A Strategic

Planning session to

be held between

the UMDA and

UKDM Council

which will lead in

signing of

Shareholder

Compact

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K

P

A


DEVIATION

ACTION PLAN


GO

VE

RN

AN

CE

1.3.2 Quarterly reports submitted to UKDM

Number of Report Quarter 1

1 Report

Quarter 2

1 Report

2 reports

submitted to

UKDM

Achieved

None

n/a

1.4 Quarterly Board meetings Number of Board

meetings

Quarter 1

1 Board meeting

Quarter 2

1 Board meeting

2 ordinary Board

meetings and 1

special Board

meeting

Achieved

None n/a

1.5 Quarterly Audit Committee

meetings

Number of Audit

Committee meetings

Quarter 1

1 Audit Committee

meeting

Quarter 2

1 Audit Committee

meeting

1 Audit

Committee

meeting

Partly

Achieved

Meeting could not

be held due to

unavailability of

Audit Committee

members which

led to the

deviation

Annual target of 4

Audit Committee

meetings to be met

by having 2

meetings in quarter

3.

1.6.1 Quarterly Internal Audit

assessment reports

Number of Internal Audit

assessment

Quarter 1

Quarterly Internal

Audit report

Quarter 2

Quarterly Internal

Audit report

1 Internal Audit

report Partly

Achieved

SCM process

delayed which led

to deviation

Appointment to be

made in quarter 3

and internal audit

assessment to

consider all

quarters.

1.6.2 PoE Reports Number of PoE reports Quarter 1

Quarterly Internal

Audit report

Quarter 2

Quarterly Internal

Audit report

1 Internal Audit

report Partly

Achieved

SCM process

delayed which led

to deviation

Appointment to be

made in quarter 3

and internal audit

assessment to

consider all

quarters.

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K

P

A


DEVIATION

ACTION PLAN


LO

CA

L E

CO

NO

MIC

DE

VE

LO

PM

EN

T

2.1.1 Investment Promotion Dialog

Project phase Quarter 2

Establishment of an

Investment

Committee

Committee

established;

planning for an

investment

seminar and

application for

funding have

been made.

Achieved

None n/a

2.1.2 Stakeholder engagements

for technical and/or funding

for capital projects

Number of

engagements

Quarter 1

4 engagements

Quarter 2

4 engagements

11 engagements

with stakeholder;

2 approval letters

and 1 MoU

signed

Exceeded

None n/a

2.2.1 Feasibility Study for Hlabisa

Node

Project Phase Quarter 1

Project Plan

Quarter 2

Prefeasibility Study

Project Plan

approved

Prefeasibility

Study in progress

Partly

Achieved

Signing of

agreement for the

land delayed due

to prolonged

negotiations. Site

measureme-nts

and draft concept

in place.

Complete

prefeasibility by

quarter 3.

2.2.2 Feasibility Study for Jozini

Cecil Marks Pass


Project Plan

Quarter 2

Prefeasibility Study

Project Plan

approved

Site Visit

Partly

Achieved

2.2.3 Prefeasibility Study for

Jozini Mountain Top


Project Plan

Quarter 2

Concept document

Project Plan

Partly

Achieved

Coneptualis-ation

not done pending

site visit

Requested

cancellation of

project until project

funds have been

confirmed.

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K

P

A


DEVIATION

ACTION PLAN


LO

CA

L E

CO

NO

MIC

DE

VE

LO

PM

EN

T

2.2.4 Prefeasibility Study for Umhlabuyalingana Node


Project Plan

Quarter 2

Concept document

Project Plan

Site visit

Partly

Achieved

Site visit

conducted in

quarter 2;

however

actual node

and concept

not finalized

with led to

the

deviation.

Prefeasibility to be

completed by

quarter 3

2.2.5 Implementation of Phase A Project Phase Quarter 1

Application for

accreditation

Quarter 2

Course Development

Application for

accreditation

Engageme-nts

with UMfolozi

FET

Sourcing of land

Partly

Achieved

Course

development

delayed pending

partnership

agreement with

UMfolozi TVET

College

Conclude

partnership

agreement by

quarter 3.

2.2.6 Marketing of Route 22 Development of

marketing systems

Quarter 1

Website

development

Quarter 2

Application for

marketing support

Website

developed

Application made

EDTEA

supported

marketing of

Route 22 through

KZN is Summer

Route 22

branding created

Exceeded

None n/a

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K

P

A


DEVIATION

ACTION PLAN


LO

CA

L E

CO

NO

MIC

DE

VE

LO

PM

EN

T

2.3.1 Feasibility Study for Fresh Produce Market


Project Plan

Quarter 2

Feasibility Study

Project Plan

Partly

Achieved

There was

no project

manager

during the

first quarter

which led to

the deviation

Feasibility to be

conducted quarter 3

2.3.2 Identification of sites for

Food Security Estate


Project Plan

Quarter 2

Identification of sites

Project Plan

Engageme-nts

for sites

identification

Partly

Achieved

There was

no project

manager

during the

first quarter

which led to

the deviation

Identification to be

done in quarter 3.

2.3.3 Securing of land for

Hydroponic tunnels

Date secured Quarter 1

Site identification

Quarter 2

Engagements with

land owners

Work plan

Not Achieved

Project manager

started in quarter

2 and prioritized

the

implementation of

the NSNP and

Fresh Produce

Market

Site identification to

be done in quarter

3.

2.3.4.1 Sustainable supply of

produce received from local

farmers

% of local produce Quarter 1

10%

Quarter 2

20%

34%

Achieved

None n/a

2.3.4.2 Supply of fruits and

vegetables to 533 schools

Number of deliveries Quarter 1

Delivery to all 533

schools

Quarter 2

Delivery to all 533

schools

>533 school

Partly

Achieved

Plan in place Monitoring of

deliveries and

strategy for

inaccessible areas

2.3.4.3 Farmers support Project Phase Quarter 1

Project Plan

Quarter 2

Implementation of

plan

Planting

schedules in

place

Achieved

None n/a

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K

P

A


DEVIATION

ACTION PLAN


LO

CA

L E

CO

NO

MIC

DE

VE

LO

PM

EN

T

2.4.1 Engagements with

investors Mtubatuba

Interchange Project


Engagements with

investors for the

Engagement

made

Achieved

None n/a

2.4.2 Business Plans for

projects identified in

the Mkhuze

Regeneration Plan

Date completed Quarter 1

Project Plans

Quarter 2

Costing

Project Plans

Costing

Achieved

None n/a

2.4.3 Construction of Ndumo Market

Stalls


Construction

Quarter 2

Handover

Appointment

Construction

Partly

Achieved

Appointment

delayed due to

SCM processes

which resulted in

construction to

commerce in the

second quarter.

Request adjustment

for Handover of

market stalls to be

at the end of

quarter 4.

2.4.4 Construction of Mkhuze

Market Stalls

Date of construction Quarter 1

Application for

funding

Quarter 2

Tender Phase

Close out of the

Establish-ment of

Mkhuze Market

Stalls

Not Achieved

Initial funding for

the project was

directed at

drawings and

planning.

Additional funding

required for

construction.

Request adjustment

to Apply for funding

with COGTA.

Communicate with

Jozini LM regarding

funding for

construction.

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K

P

A


DEVIATION

ACTION PLAN


LO

CA

L E

CO

NO

MIC

DE

VE

LO

PM

EN

T

2.5.1 Tender Studies Date completed Quarter 1

Application for funding

Quarter 2

Technical Studies

Engageme-nts

with Jozini LM

and UKDM for

support

Achieved

Outstanding to

completion of

PDA process

is the studies

from Land

Surveyor and

Town Planner

and the

process of

sourcing

funding has

led to the

deviation

Terms of Reference

to be created by

quarter 3.

2.5.2 Fencing


Fencing

Quarter 2

Fencing

Fencing

Achieved

None n/a

2.5.3 Runway Rehabilitation Initiation date Quarter 1

Project Plan

Quarter 2

Tender Phase

Engagements

with EDTEA and

COGTA for

project funding.

MoU signed with

EDTEA for

runway

rehabilitation

Partly

Achieved

Delays in transfer of

funds after signing of

MoU.

Will go on tender on

Risk as MoU is

signed.

2.5.5 Sign airline contract Date signed Quarter 1

Engage airline

operators

Quarter 2

Engage airline

operators

Engageme-nts

made and

contract

negotiations in

progress

Achieved

None n/a

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K

P

A


DEVIATION

ACTION PLAN


LO

CA

L E

CO

NO

MIC

DE

VE

LO

PM

EN

T

2.6 Feasibility report Date completed Quarter 1 & 2

Feasibility Study

Communication

sent to service

provider

Request for a

meeting regarding

project sent

Not Achieved

Project is

managed by

the IDC which

doesn’t allow

the UMDA to

request

service

provider to still

to contractual

obligations

Request

cancellation of

project until

confirmation of

funds.

2.7 Obtain

authorizations

Date obtained Quarter 1

Feasibility Study

review

Quarter 2

Application for

authorisations

Engagements

with investors in

progress.

Letters to

requesting

authorizations

prepared.

Partly

Achieved

Negotiations

with investors

in progress as

project is

investor driven

Meeting investors

Submit application

for water license

and energy

generation.

INS

TIT

UT

ION

AL

DE

VE

LO

PM

EN

T

3.1 Performance

Management

Number of

performance reviews

Quarter 1

Sign performance

agreements

Quarter 2

Performance review

Signed

Performance

reviews

Achieved

None n/a

3.2 Skills Training % of employees

trained

Quarter 1

Skills Plan

Skills Plan

Achieved

None n/a

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K

P

A


DEVIATION

ACTION PLAN


FIN

AN

CIA

L V

IAB

ILIT

Y A

ND

MA

NA

GE

ME

T

4.1.1 Draft Annual

Report adopted by

the Board and

submitted to AG

Date adopted

Date submitted

Quarter 1

Board approved

2015/16 Draft Annual

Report and submit to

AG

Board approved

Submitted to AG

Achieved

None n/a

4.3.1 S87(11) Reporting

Number of reports Quarter 1

3 reports submitted to

the MM

Quarter 2

3 Reports submitted to

MM

6 reports

submitted

Achieved

None n/a

4.3.4 S122 Statements Date submitted Quarter 1

S122 Statements

submitted to AG

Submitted

Achieved

None n/a

Overview of UMDA’s Organizational Scorecard performance

Rating Key No of targets Total %

1

Not Achieved 06 17%

2

Partially Achieved 15 43%

3

Achieved 12 34%

4

Target Exceeded 2 6%

5

Excellent 0 0%

Total 35 100%

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Recommendation

It is recommended to Audit Committee to consider the content to the assessment; offer guidance

and recommend approval to the board of directors.

QUALITY CERTIFICATE I, MM Ntuli, Chief Executive Officer of Umhlosinga Development Agency, hereby certify that the

mid-year review for 2016/2017 financial year and supporting documentation has been prepared in

accordance with the Municipal Finance Management Act, and the regulations made under the Act,

and that the annual budget and supporting documents are consistent with the service level

agreement with the district municipality.

Mr MM Ntuli Chief Executive Officer Umhlosinga Development Agency

mid year budget and perfomance assessment 2016/17 assessment.pdf · kpi no. key performance...

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