ANNUAL REPORT

JOZINI MUNICIPALITY

2013/14

Jozini municipalityP/Bag x028

Jozini3969

Tel (+27) 35 572 1292Fax (+27) 35 572 1266

eMail: info@jozini.org.zaWebsite: www.jozini.org.za

Vision Statement “A MUNICIPALITY THAT PROVIDES SUSTAINABLE

SERVICE DELIVERY, SOCIOECONOMIC

DEVELOPMENT AND BETTER LIFE FOR ALL.”

Mission Statement “TO BE A PROFESSIONAL, EFFECTIVE, AN EFFICIENT AND

RESULT ORIENTATED MUNICIPALITY THAT, THROUGH

INTEGRATED EFFORT, CONTINUALLY PROMOTES THE SOCIAL

WELFARE AND ECONOMIC PROSPERITY OF ALL ITS RESIDENTS,

INVESTORS AND TOURISTS”.

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TABLE OF CONTENTS CHAPTER 1 – EXECUTIVE SUMMARY 4

1.1 Council Speaker’s Message 6 1.3 Municipal Manager’s Overview 7 1.4 STATUTORY ANNUAL REPORT PROCESS PLAN 8

CHAPTER 2 – GOVERNANCE 9

2.1 EXECUTIVE COMMITTEE 10 2.2 BACKGROUND 19 2.3 SPATIAL ANALYSIS 21 2.4 DEMOGRAPHICS 30

CHAPTER 3 – SERVICE DELIVERY PERFORMANCE REPORT 36

3 Basic Services 36 3.1 Rural roads 36 3.2 Electrification 38

3.3.1 Role of the Developer/ Jozini Local Municipality 39 3.3.2 Role of the Funder/ Department of Human Settlements (DHS) 39 3.3.3 Current projects & Challenges 40

3.3.4 Current housing back log 41 3.3.5 Proposed packaging of housing project 42 3.4 Community Facilities 42

3.4.1 Renovations of community facilities 43 3.5 Waste removal 43

3.5.1 Mkuze 43 3.5.2 UBombo 44 3.5.3 Jozini 44 3.5.4 Bhambanana 44 3.5.5 Ndumo 44 3.5.6 Ingwavuma 44 3.5.7 Recycling Centre 44 3.5.8 Dumpsites 44 3.5.9 Addressing Illegal dump sites 44

3.6 PLANNING AND DEVELOPMENT 45 3.6.1 IDP and Public Participation: 45 3.6.2 Jozini Town Nodal Expansion Plan: 45 3.6.3 Land Use Schemes for Jozini, Ingwavuma, Mkhuze, Bhambanana, Ubombo and Ndumo: 46 3.6.4 Building Plans 46

CHAPTER 4 - ORGANISATIONAL DEVELOPMENT PERFORMANCE 47

4.1 Organisational Framework 47 4.1.1 ORGANISATIONAL PERFORMANCE MANAGEMENT YSTEM 47

4.2 Total Number of Positions, Turnover and Vacancies 53 4.2.1 Senior Management 53 4.2.2 Management Services Department 54 4.2.3 Budget & Treasury Department 55 4.2.4 Corporate Services Department 56 4.2.5 Social and Economic Development Department 57 4.2.6 Technical & Planning Services Department 59

4.3 COMMENT ON VACANCIES AND STAFF TURNOVER 60 4.4 HUMAN RESOURCE POLICIES 61 4.5 BY-LAWS 62 4.6 MANAGEMENT PRACTICES: 62 4.7 SUSPENSIONS (from Disciplinary Hearings) 62 4.8 WORKFORCE CAPACITY DEVELOPMENT 62

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4.8.1 SKILLS TRAINING AND DEVELOPMENT 63 4.8.3 TOTAL INTERNS FUNDED BY THE LGSETA 66 4.8.4 TRAINING BENEFICIARIES – EMPLOYEES 67 4.8.5 TRAINING BENEFICIARIES – UNEMPLOYED 68

4.9 Jozini Library Services 76

CHAPTER 5 – FINANCIAL PERFORMANCE 91

5.1 FINANCIAL INFORMATION 91 5.4 SUPPLY CHAIN MANAGEMENT 96 5.5 GRAP COMPLIANCE 97 5.8 CREDITORS 99

CHAPTER 6 – AUDITOR GENERAL REPORT 100

CHAPTER 7 – Annexures 107

ANNEXURE A – Audited Financial Statements 107 ANNEXURE B – Auditor General Audit Queries - Action Plan 107 ANNEXURE C – Organisational Scorecard 107 CHAPTER 8 - ACRONYMS AND ABBREVIATIONS 108

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CHAPTER 1 – EXECUTIVE SUMMARY

Mayor’s Foreword

I have pleasure in presenting this Annual Report in line with the provisions of the relevant legislative

framework and public accountability responsibilities for the year ended June 2014.

The year 2013/14 was an eventful year in many respects. It was a year the municipality recorded

fascinating progress in many respects, yet there was also daunting negativity. Negative sentiment

against the institution was fuelled by publicity that was politically motivated to cast doubt on the

integrity of our leadership and administration. The resigning of the three top management was

catastrophic for the whole organization, but we thank the support we received from COGTA during

that period and we believe that with the new Acting Municipal Manager we are going to get an

improved audit opinion.

“April 2014 marked 20 years of our Democratic government, led by the ANC. As Jozini Mayor I am

deeply honoured and grateful to the men and women whose sweat, blood and lives were sacrificed

to have the liberties we all enjoy today. As we applaud to the great strides our country under the

ANC government has made in improving the lives of our people, at the same time we need to

acknowledge that more still needs to be done to eliminate the persistent lack of jobs, poverty and

underdevelopment in rural areas like Jozini in particular. This we cannot achieve alone. Hence we

call upon al to be the change we want wherever you are with whatever you have”.

Towards a Clean Audit

In keeping with our resolve to ensure clean government and administration that is responsive to the

needs of our communities, visitors, stakeholders and investors, we collaborated with both COGTA

and AG in conducting an investigation on the alleged allegations of maladministration, tender fraud

and corruption. COGTA subsequently made recommendations to Council to undertake corrective

actions where there was proven wrong doing.

The municipality has been facing numerous challenges one of which was the sudden resignation of

section 56/57 managers which affected the performance of the municipality. Currently the

municipality is working towards improving the audit outcome through the implementation of the

Auditor General Action plan and audit readiness plan.

His Worship, the Mayor Cllr. B. N. Mthethwa

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Fighting Social ills

The Women’s Forum has been the most visible and hard working to help the municipality reach out

to many in our communities, including schools, orphanages and destitute families. The building of

houses, food parcels, sanitary pads and sporting gear are among the noble initiatives that women

have undertaken.

Credit also goes to all sector departments, NGOs and private sector organisations and individuals

who supported us throughout the year. To the staff who continued to work tirelessly to improve the

overall functioning of the municipality and responsiveness to service delivery demands, on behalf of

Council, I do sincerely thank you.

Crime Fighting

I wish to thank law enforcement agencies, the SAPS in particular, at all levels of our government for

the unconditional support on crime issues, stable communities and safety of our communities,

visitors and property.

Synergistic Partnership

I would have failed in my duty if I did not recognise the sterling contributions made by the traditional

leadership of Jozini whose support continues to be a solid pillar of strength and support in our

service delivery planning.

I am proud to be part of Council that is the first within UMkhanyakude District to invite traditional

leaders to participate in our Council meetings on matters that relate to their respective areas.

Cooperatives Programme

Women are an integral part of the wellbeing of our communities and as such economic

empowerment pursued with the exclusion of women is not sustainable. Women cooperatives at

Jozini participated exclusively to the community centres and facilities renovation programme, which

resulted in the rehabilitation of 21 facilities at an investment of about R10m.

Dealing with Backlogs

It is common cause that the region is characterized by major backlogs in respect of social and

economic infrastructure such as roads, housing, electrification, water and sanitation. Plans have

been developed for the purpose of securing the needed finances to implement programmes to

address these challenges in our municipal area.

Available sources of funding such as the Municipal Infrastructure Grant (MIG), the human

settlement grants, electrification funds and other sources including the municipality’s own budget

have been committed within the context of the mid-term expenditure framework.

The private sector has been supportive in that they generously donated building materials to build

homes for specific cases among our poor communities.

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1.1 Council Speaker’s Message

It is for me a singular honour to serve as part of the Jozini municipality, tasked with a huge

responsibility of presiding as Chairperson of Council.

Indeed 2013/14 has had its fair share of dynamics, but was sweetened by the fact that the

municipality is in the safest hands since 2011 local government elections when the new leadership

took power.

Unlike the previous reporting period, the year ending June 2014 was far much better in terms of

unity of purpose among different political parties, which resulted in the smooth functioning of council

and its committees.

Political oversight was greatly improved with all sub-committees including MPAC meeting regularly to

ensure that the municipal administration does not only submit nice reports but practices and reality

on the ground are in agreement with what is being reported periodically by administration.

The sad part of the year 2013/14 was the resigning of 3 top Management Officials at the same time

(MM, CFO & Director Planning and Technical) at the tail end of the year, which inevitably caused

considerable hardship administratively. Among its most telling implications, the situation created an

environment of uncertainty and limitations in the municipality’s ability to provide adequate

accountability thus affecting the smooth handling of the external audit and as a result the

municipality not achieving the desired results in terms of the audit opinion. The audit outcome for

2013/2014 is a disclaimer audit opinion. The Acting Municipal Manager is working tirelessly to

ensure that the audit outcome for 2014/2015 is improved. Implementation plans have been tabled

before the Audit Committee and management is currently busy with the implementation thereof.

If we continue in this fashion in 2014/15 going forward Jozini will never be the same, but will

continue to thrive.

For that I thank all Councillors and ward committees for putting the interest of our communities,

investors and stakeholders first. My Council is blessed with the following 39 Members of the Council

with the exclusion of vacant ward 4 which the by-elections will be conducted on the 27th 0f August

2014 and we are hoping to have the new Ward Councillor in the Second Term of 2014/2015 F/Y,

which will make our Council Members to total.

Honourable Speaker, Cllr. M.Z Nyawo

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1.3 Municipal Manager’s Overview

Change is always here, there and everywhere. It has been said that change never changes. The

Jozini Municipality is not an exception to this rule as far-reaching changes have been witnessed in

the course of our reporting period.

As a struggling municipality short in supply of budget, skills and other resources, we are on the

right path to help make the dream for better lives a reality for thousands of our community

members who for centuries have been neglected and deprived of their rights to access to the

essential and basic services.

The target of 70% met last year in service delivery is testimony that we are indeed forging ahead at

an improved speed to fast-track service delivery regardless of our resources limitations.

This means we improved both our capital projects expenditure and poverty alleviation

programme. The Council, after due consideration of the material conditions facing the

community of Jozini, resolved to implement several local economic development projects in an

effort to fight poverty.

In order to deal effectively with the challenge of skills shortages, the municipality is working hard

and investing considerable amounts in improving the capabilities and abilities of its staff, the

councillors and the community in general. Staff members have been provided with opportunities to

register for courses in different fields, councillors have been registered with institutions of higher

learning to acquire qualifications relevant to local government and there are a number of training

initiatives that are in place to benefit women, youth, people with disabilities and other members of

the community.

As an institution, all efforts will be directed at ensuring that the interventions and the programmes

with which the municipality becomes involved are carried out in an environment that is regulated by

relevant policies and procedures.

A number of new policies will be developed in the new year, informed by a detailed assessment of

the policy environment finalized during the course of the year under review. It may be necessary to

review some of the existing policies, but this will depend on the recommendations emanating from

the assessment.

The administration will further be strengthened through the institutionalization of checks and

balances, primarily to promote controls and accountability in order to revive public confidence in the

functioning of the municipality.

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1.4 STATUTORY ANNUAL REPORT PROCESS PLAN

No Standing Activity Time Frame

1

Consideration of next financial year’s Budget and Integrated

Development Plan (IDP) Process Plan. Except for the legislative

content, the process plan should confirm in-year reporting formats to

ensure that the reporting and monitoring feeds seamlessly into the

Annual Report process at the end of the Budget/ IDP implementation

period.

July

2 Implementation and monitoring of approved Budget and

IDP commences

3 Finalise Q4 Report for the previous financial year

4 Audit/Performance committee considers Draft Annual Report of

Municipality (and its entities where applicable) August

5 Mayor tables the Unaudited Annual Report

6 Municipality submits Draft Annual Report including consolidated Annual

Financial Statements and Performance Report to Auditor General

7 Submit draft 2013/2014 Annual Report to Internal Audit and

Auditor-General

8 Auditor-General assesses draft Annual Report including consolidated

Annual Financial Statements and Performance Data

September –

October

9 Municipalities receive and start to address the Auditor-

General’s comments November –

December

10 Oversight Committee assesses Annual Report

11 Mayor tables Annual Report and Audited Financial Statements

to Council complete with the Auditor-General’s Report January

12 Audited Annual Report is made public and representation is invited

13 Council adopts Oversight Report March

14 Oversight Report is made public

15 Oversight Report is submitted to relevant Provincial Councils

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CHAPTER 2 – GOVERNANCE

It is necessary for a strong relationship to be maintained between the Political and Administrative

wings to promote the existence of smooth functioning of any municipality. Such a relationship

enhances the performance of the municipality as the roles and responsibilities are clarified and

confusion is averted.

The Constitution provides for the existence of three distinct and interdependent spheres of

government, namely Local, Provincial and National. S151 (3) gives municipalities the power to

govern their own affairs subject to national and provincial legislation and S151 (4) prevents

national and provincial government from impeding the exercise of municipal power.

Political and Administrative Governance

Political Leadership

His Worship the Mayor, Cllr. B.N. Mthethwa

Deputy Mayor, Cllr. T.S. Mdluli

Honourable Speaker Cllr. M.Z. Nyawo

Chief Whip, Cllr T. J. Ndlazi

The Council (headed by the Speaker) together with the Executive Committee (chaired by the

Mayor) are the 2 decisive structure within the organisation and have 3 (three) portfolio Committees

reporting thereto. Portfolio Committees, chaired by Exco members are aligned to the core

functions of the existing departments, namely the Community Development, Corporate and Human

Resources; and the Infrastructure, Planning and Development Committees. The Finance

Committee also formulated by Council is chaired by the Mayor and deals with financial

management issues focusing on compliance reporting, budgeting, income and expenditure,

systems and procedures, revenue enhancement etc.

The Audit and the Oversight/ MPAC Committee report directly to Council and the sub-committee,

the Local Labour Forum report to the Portfolio Committee.

The mentioned committees provide structural reporting to various levels to ensure extensive

interrogation before such is tabled before council or Exco and also to ensure proper monitoring

and oversight over the performance of departments.

Political governance within Jozini Municipality is comprised of 39 Councillors plus one vacancy

which adds up to the total of 40 councillors of which 20 are ordinary councillors and 20 are Party

Representative Councillors. The councillors are from the ANC, IFP and NFP political parties.

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POLITICAL DECISION TAKING

Decisions are taken through Committee meetings where reports with recommendations are

prepared and tabled by relevant Heads of Departments, and decisions are made and endorsed by

majority of members present which is 50% +1.

The decisions taken are captured in a decision Circular circulated to all Departments immediately

after the sitting of the meeting.

2.1 EXECUTIVE COMMITTEE

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M. Mathe

Cllr. J. Siyaya Ward 6

Cllr.T.L Mathenjwa Ward 7

Cllr N.S Myeni Ward 1

Cllr J.E Buthelezi Ward 2

Cllr B.N Mthethwa Ward 3

Vacant

Wards 4

Cllr. S.M Mthembu Ward 5

Cllr. T.J. Ndlazi Ward 8

Cllr. J.M Mpotshana Ward 9

Cllr. D M. Mthembu Ward 10

Ward 10

Cllr.S.S Mkhize Ward 11

Cllr. B.Q Gumede Ward 12

Cllr. B.I Msweli Award 13

Cllr.M.E Nlela Ward 14

Cllr. S.B Mathenjwa Ward 15

Cllr. K.N Khumalo Ward 16

Cllr. N.R Ndlovu Ward 17

Cllr.T.P Mbhamali Ward 18

Cllr. D.J Mthembu Ward 19

Cllr. S.M Mathenjwa Ward 20

COUNCILLORS

TOTAL: 39

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K.B. Mbatha

R.H. Gumede M.Z

S. Macwele

N.L. Mathenjwa

G.P. Moodley

T.Z. Nyawo

PARTY REPRESENTATIVE COUNCILLORS:

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Administrative Governance

The critical vacant positions are occupied by managers in an acting capacity to perform

administrative and management functions so that the municipality achieve its vision.

The Municipal Manager as the accounting officer, is the administrative head responsible for the

implementation of organisational goals in line with the national key performance areas namely,

Municipal Transformation and Organizational goals; Basic Service Delivery; Local Economic

Development; Municipal Financial Viability and Management; and lastly Good Governance and

Public Participation.

The Municipal Manager provides leadership and direction through effective strategies, in order to

fulfil the objectives of local government which are provided for in the Constitution of the Republic of

South Africa, and any other legislative framework that governs local government.

At Jozini Municipality we uphold the values of integrity and honesty, promoting a culture of

collegiality throughout the municipality by delegating duties and rewarding excellence. We also

strongly adhere to the Employment Equity policies and ensure that our staff complement has a fair

representation in gender and race.

Intergovernmental Relations

In terms of the Municipal Systems Act No. 32 of 2000, all municipalities should exercise their

executive and legislative authority within the constitutional system of co-operative governance in

the Constitution S41. Jozini is one of the five (5) municipalities within UMkhanyakude District

Municipality

PUBLIC ACCOUNTABILITY AND PARTICIPATION

OVERVIEW OF PUBLIC ACCOUNTABILITY AND PARTICIPATION

MSA S15 (b): requires a municipality to establish and organise its administration to facilitate a

culture of accountability amongst its staff. S16 (i): states that a municipality must develop a system

of municipal governance that compliments formal representative governance with a system of

participatory governance. S18 (i) (d): requires a municipality to supply its community with

information concerning municipal governance, management and development

Municipal Manager

(Vacant)

CFO

(Vacant)

Director: Technical

Services

(Vacant)

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WARD COMMITTEES

Jozini Municipality adheres to Sections 72 to 78 of the Municipal Structures Act, which makes legal

provisions for the elections and operations of ward committees, Section 152 of the Constitution of

the Republic of South Africa which obliges the municipalities to provide democratic and

accountable government for local communities. Ward Committees have been established to serve

as an official specialized participatory structure in the municipality.

In enhancing and developing a culture of community participation, Ward Committees co- ordinate

ward developmental initiatives and performing their function without fear, favour or prejudice. In

creating a formal unbiased communication channels these structures serves as a direct link

between Communities, Jozini Municipality and its Council, make recommendations on matters

affecting the ward, assist councillor in identifying challenges, disseminate information in the ward

concerning affairs such as budget, IDP and performance management(PMS)

Ward committee members hold monthly meetings whereby issues that are affecting the community

are discussed and presented in a form of sectorial reports. Public participation unit ensures that

these issues are forwarded to the relevant stakeholder/departments and ensuring that any

complaints raised are resolved in a proper manner.

Further more centralized ward committee meetings are convened as they serves as an enables a

platform to share challenges and achievements, where Council and its Administration are

represented. Central meetings serves as platform for one on one dialogues in which ward Council,

Administration and ward committee structures are able to fully deliberate on issues that relates to

their respective communities. Any important information that need be cascaded to the community

members is first known by community members.

CORPORATE GOVERNANCE

INTERNAL AUDIT ACTIVITY

The Internal Audit Activity complied with section 165 of the MFMA by developing a risk-based

internal audit plan and an audit program. Internal audit uses systematic processes which

determine whether established procedures are being followed and whether internal controls are

operating effectively. The internal audit observes and formally assesses governance risk and

control structural design and operational effectiveness while not being directly responsible for

operations

The risk-based internal audit plan was approved by the Audit and Performance Audit Committee

and implemented and as a result the internal audit reports were submitted to the audit and

performance audit committee quarterly for review and comments. These reports were discussed

with management and action plans to address weaknesses identified were documented.

RISK MANAGEMENT

Section 62 (1)(c )(i) of the Municipal Finance Management Act(MFMA) states that, the accounting

officer of a municipality is responsible for managing the financial administration of the municipality,

and must for this purpose take all reasonable steps to ensure that the municipality has and

maintains effective, efficient and transparent systems of financial and risk management and

internal control. The MFMA establishes responsibility for Risk Management at all levels of

management and thus becomes everybody’s responsibility.

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Jozini municipality ensures compliance with section 62(1)(c)(i) of the MFMA, enterprise risk

management framework and the risk management policy. The risk management workshop was

conducted during the year to update the municipality’s risk register.

The top five (5) risks facing the municipality are

Poor revenue collection

Illegal development of domestic and commercial structure

Lack of security measures

Poor planning and monitoring of service providers

No compliance with laws and regulations

The key risk areas which are prone to fraud in most institutions includes the procurement process,

embezzlement and theft of cash etc. Jozini has ensured that these key risk areas are properly

managed.

THE AUDIT AND PERFORMANCE COMMITTEE REPORT

REPORT OF THE AUDIT AND PERFORMANCE COMMITTEE TO THE COUNCIL OF JOZINI

LOCAL MUNICIPALITY FOR THE 2013/14 FINANCIAL YEAR

The Jozini Municipality’s Audit and Performance Committee (AUDCOM) presents its report to

Council for the year ended 30 June 2014.

The legal responsibility of AUDCOM are set out in terms of section 166 of the Municipal Finance

Management Act, No. 56 of 2003.

Members and attendance at meetings

The current AUDCOM comprises of 4 independent, external members and met at least four times

relating to the 2013/14 financial year as per the Audit Committee Charter. During the year under

review one position was filled and AUDCOM members are:

Mr I. Ngcobo (Chairperson)

Mr S. Kunene (Member)

Mr D. Mpontshane (Member)

Mr N. Dludla (Member)

Responsibility

The AUDCOM has been set up in accordance with section 166 of the Municipal Finance

Management Act, no 56 of 2003 (MFMA) and section 14(2)© and Local Government Municipal

Planning and Performance Regulations, 2001 (Regulations) and operates within the terms of the

Audit and Performance Committee Charter approved by the council.

In the conduct of its duties, the AUDCOM has performed the following statutory duties:

Reviewed internal financial control and internal audits

The internal audit (Mnotho) presented its annual audit plan for the financial year ending 30 June 2014 to the AUDCOM at its meeting on 23 July 2013. The AUDCOM resolved that the internal audit plan be approved and to prioritise Conditional Grants income and related expenditure,

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procurement and tenders, review of Financial statements and follow up to address the findings of the Auditor-General. Internal audit submitted audit reports to the Committee for the period under review Internal audit reports include recommendations to improve internal controls together with agreed

management action plans to resolve the issues reported on. To further enhance the processes in

place, internal audit conducts follow-up audits on previously reported internal audit findings and

reports progress to senior management and the AUDCOM.

Internal audit rated the effectiveness of internal controls to be inadequate. The AUDCOM has

expressed its concern and management is required to implement appropriate systems of internal

controls and corrective action to address the identified weaknesses and possible irregularities.

Although there are controls in place, the existing systems and procedures require enhancement

and continued monitoring.

Risk Management

The AUDCOM is responsible for oversight of the internal and external auditors as well as financial

reporting because the assessment of internal controls over financial reporting is risk based, the

Audit Committee is responsible for overseeing management’s risk policies and discussing the

Municipality‘s key risk exposures with management.

Management with the assistance of Provincial Treasury, has finalized the Enterprise Wide Risk

Management Process during May 2013, to identify strategic risks with the potential to impede the

Municipality’s ability to achieve its objective and programme goals. During the workshops,

management identified current controls that may be in place to mitigate risks identified and

possible action plans to be implemented to improve the mitigation of risk.

The Municipality has appointed a risk officer and Risk Committee who will facilitate the execution

of the risk management process as a key enabler to achieving the business objectives and

programme goals of the municipality. The risk officer will assist council and management to

establish and communicate the organization’s risk management objectives and direction.

The internal audit function will provide independent assurance in relation to the management’s

assertions surrounding the robustness and effectiveness of risk management (including

compliance) and may comment on the level of risk management maturity.

Review of financial statements and Accounting policies.

Accounting policies and review of the financial statements

The AUDCOM, during its review of the financial statements for the year ended 30 June 2014,

considered the appropriateness, adoption and consistent application of the South African

Statements of Generally Recognised Accounting Practices (GRAP).

Owing to time constraints the AUDCOM did only a high level review and provided management

with inputs/comments to consider before submitting to the Auditor-General. Although there is room

for improvement in the quality of the unaudited financial statements, the AUDCOM is satisfied that

the unaudited financial statements complies, in all material respects, with relevant provisions of the

MFMA and GRAP.

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Review of the Auditor-General’s management report and audit report

Meetings were held between the AUDCOM and representatives of te Auditor-General to discuss

the engagement letter and strategic audit plan for the year under review. The final management

and audit report was discussed with management and explanations were adequate. Hence the

AUDCOM confirms it is satisfied with the Auditor-Generals report.

Audit Action Plan

The AUDCOM reviewed and commented on the audit action plan for 2013/ 2014 based on the

findings 2013/14. Internal audit has provided independent assurance that the majority of corrective

actions have been implemented. The AUDCOM prioritized an updated progress evaluation in the

early part of 2014/15.

Dash Board Report

The AUDCOM has reviewed the progress with implementing key controls and recommended that

the Municipal Manager and Mayor signs the report as proof of commitments and make concerted

effort to implement commitments.

The adequacy, reliability and accuracy of financial reporting and information

Based on the results of the formal documented review of the design, implementation and

effectiveness of the Municipality’s system of internal financial controls conducted by internal audit

function during the year, considering information and explanations given by management and

discussions with external auditor on the results of their audit, the AUDCOM believes that the

Municipality’s system of internal financial controls is not yet fully effective to form a basis for the

preparation of reliable financial statements and to achieve a clean audit.

Performance Management

The AUDCOM also serves as the Performance Audit Committee for Jozini Municipality.

Internal Audit did review the Municipality’s performance for all quarters during the year.

Based on the Internal Audit reports and review of the draft annual performance report the following

concerns were raised:

Portfolio of evidence was not submitted timely for review

Targets were not always specific, measurable, attainable, realistic and time bound (SMART) and

aligned to the Integrated Development Plan (IDP)

Supporting documentation for actual performance was not always adequate.

Corrective action was not always shown or was inadequate where there was a failure to meet

targets.

The Information on the draft annual performance report was not always complete, reliable and

accurate.

Scorecards did not always reflect actual achievements.

Effective Governance

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The AUDCOM fulfils an oversight role regarding the municipality’s reporting process, including the

system of internal control. It is responsible for ensuring that the Municipality’s internal audit

function is independent and has the necessary resources, standing and authority within the

Municipality to enable it to discharge its duties. Furthermore, it oversees cooperation between the

internal and external auditors, and serves as a link between Council and these functions.

The AUDCOM has established communication with the Municipal Public Accounts Committee

(MPAC) by inviting them to all meetings and sharing minutes of meetings.

The AUDCOM is monitoring progress with special investigations in progress.

The internal and external auditors have unlimited direct access to the AUDCOM, primarily through

its chairperson.

Compliance with Legislation and Ethics

The AUDCOM has noted instances of non-compliance with policies and procedures, MFMA,

Performance Regulations and National Treasury Regulations. The progress to move to full

compliance is monitored on a quarterly basis.

Recommendations

Council should ensure that a proper, fully capacitated and competent internal audit function is in

place throughout the year.

Council should ensure that accurate, reliable and complete financial and performance information

is submitted monthly by management for review by the various committees.

Council should ensure that adequate progress is made with commitments on the quarterly Dash

Board Report.

Council should interact with the external auditors for interim audits with a view to identify and

address shortcomings timely.

Council should allocate adequate resources for compiling the annual financial statements and

performance report to be included in the draft annual report before submission to the Auditor-

General. Furthermore, the Municipal Manager should take action against section 56 employees

who did not submit portfolio of evidence as required.

On behalf of the Audit Committee

Mr I.Z Ngcobo (Chairperson)

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2.2 BACKGROUND

Jozini Local Municipality is one of five municipalities within the UMkhanyakude District

Municipality. It is located in the northern portion of KwaZulu–Natal, and is bordered by

Mozambique to the north, Swaziland to the west, Umhlabuyalingana to the east, Hlabisa to the

south and Nongoma and Uphongolo to the west. It consists of four semi formalized towns viz.

Jozini, Mkhuze, Ingwavuma and Ubombo. The remaining parts of the municipality are

characterized as being rural in nature. Jozini Municipality covers 32% (3057 Square Kilometres)

of the total area of 13859 Square Kilometres of uMkhanyakude District Municipality.

The primary investment points are Mkhuze and Jozini; secondary investment points have been

identified at Ingwavuma, Ubombo, Ndumo and Bhambanana and tertiary investment points have

been identified at Ophansi, Manyiseni, Makwakwa, Emabhanoyini. These investment points are

seen as the existing and future growth points in the municipal area and will serve as the basis for

the clustering of activities and services such as schools, shops, community halls, etc.

The municipal area is well served by major movement routes. These include a national link (N2),

the R22 links Jozini to Manguzi in the Umhlabuyalingana Municipality and the 522-1 which

extends from Ubombo in the south to Ingwavuma in the north.

Jozini local municipality consists of twenty wards. Previously it consisted of 17 wards then after

demarcation before the 2011 Local Government elections three wards were added.

The large area of Jozini jurisdiction falls under the ownership of Ingonyama Trust and some

areas are privately owned by individuals while some portions are owned by the State. The

current land ownership is one of the reasons why it is very difficult to control development in the

Municipal area of jurisdiction.

Basic facts Basic figures

Stats SA 2001 Community Survey

2007

Stats SA 2011

Total population 184 052 207 722 186 502

Total number of households 33 534 38 530 38 849

UMkhanyakude District

Municipality

573 341 614 046 625 846

Age profile 0-19

20-64

65+

114 095

56 831

13 090

114 217

85 005

8 501

101 818

77 256

7 428 % Household with no income 49% 47% 43%

Page 20

Investment points

Primary nodes Secondary nodes Tertiary nodes

Mkhuze

Jozini

Ingwavuma

Ubombo

Bhambanana

Ndumo

Ophansi

Manyiseni

Makwakwa

Emabhanoyini

Map showing all 20 wards

Page 21

2.3 SPATIAL ANALYSIS

Jozini Municipality is located in Northern KwaZulu Natal and borders Swaziland and

Mozambique. Jozini Municipality falls within the UMkhanyakude District Municipality and covers

an area of 3073.08 km2. This equates to approximately 32% of the area of the district. The

Lebombo Mountains and Makhatini Flats provide a diverse and beautiful terrain rich in local

resources including water features and even fossil sites. The name Jozini means place of

spears and is attributes to the many spears found in the caves in the area that were used

during ancient wars.

Jozini Municipality borders the following municipal areas as shown on the map at overleaf:

Umhlabuyalingana Local Municipality to the East

Hlabisa and the Big 5 False Bay Local Municipalities to the South

Portions of the Greater St Lucia Wetland Park to the South

The Uphongolo Local Municipality (Zululand District) to the West

Mozambique to the North

Swaziland to the West

ADMINISTRATIVE ENTITIES

The Jozini Municipality has 20 municipal wards and 7 Traditional Council Areas. The following

is a list of Traditional Councils in the Jozini Municipality:

Mathenjwa

Mngomezulu

Nyawo

Myeni-Ntsinde

Jobe

Myeni Ngwenya

Siqakatha

The Jozini Municipality also has a portion of State owned land within its area of jurisdiction as

indicated on the map herewith.

Page 22

Apart from the Administrative entities listed above, the Jozini Municipal area also boasts a

number of environmentally sensitive areas, i.e.:

. Game Farms

. Protected Environmentally Sensitive Areas

. Non-Protected Environmentally Sensitive Areas

. Ezemvelo Wildlife Protected Areas

. Areas of High Intrinsic Biodiversity Value

The location of the above are shown on the Environmental Considerations and the

Environmental and Tourism Asset maps on the following pages.

Page 23

Page 24

STRUCTURING ELEMENTS

. Pongola River

. 2 nature reserves (Ndumo which borders Jozini and Mhlabuyalingana; Mkhuze which

borders Jozini and Big Five)

. Terrain (borders Ingwavuma and Swaziland).

Jozini Dam (Pongola Port Dam)

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EXISTING NODED AND CORRIDORS

Investment points (Nodes) are the existing and future growth points and centers of population

concentration within the municipality .They form the bases for the allocation of funding and

resources as well as the rollout of service delivery .It is crucial to build upon such investment

points we also find a clustering of certain activities such as shops, schools, churches, community

halls and clinics .The table below contains the hierarchy of investment points for Jozini:

Primary nodes Secondary nodes Tertiary nodes

Mkhuze Jozini

Ingwavuma

Ubombo

Bhambanana Ndumo

Ophansi Manyiseni Makwakwa Emabhanoyin

Mkhuze: is the economic hub of the municipal area and will remain the focus for future

development. Mkuze town is central located and it served by major road such as the N2 which

links it with Hluhluwe, Mtubatuba, Richards Bay towns. There is an influx of major services such

as offices, residential development and commercial uses has led to Mkuze being the major

investment node within the area of Jozini Municipality.

Jozini: is the second economic hub within the area of jurisdiction of the Jozini municipality,

however the topographical constraints and land tenure issues has led to flee of potential investors

to another areas.

Rural Areas: rural areas are characterized by extensive commercial and subsistence farming,

mainly crop production and cattle farming.

MOVEMENT PATTERNS AND ROUTES

Investment Links are the activity spines of the municipality as well as they provide access to

services and encourage economic development thereby improving the living conditions of local

municipalities. Such spines link areas/destinations and carry varying volumes of traffic. In the

Jozini context, the following hierarchy of investment links has been identified:

National link ( the N2)

Primary Investment link

Potential Primary Investment Link

Secondary Investment Link

Potential Secondary

Tertiary Investment Link

The above links are all shown on the accompanying spatial development framework map.

Both the potential primary and secondary investment links should be noted. The former instance

the link to Swaziland off the Bhambanana Ingwavuma road through the Cecil Mark Pass and

secondly the route parallel and to the east of the N2. The potential secondary investment link

between Ubombo and Jozini has been identified considering the route.

Page 26

UMkhanyakude District New Corridor Names

. NORTH - SOUTH CORRIDOR (N-2)

(Richards Bay – Mtuba/Habisa – Hluhluwe – Mkhuze – Golela)

. CULTURAL HERITAGE CORRIDOR

HLABISA – NONGOMA (Gateway to the Kingdom)

. BORDER HERITAGE CORRIDOR

(Cecil Mack Pass – Ingwavuma – Bambanani – Ngwanase – Kosi Bay)

. ZULU OCEAN CORRIDOR

(Richards Bay – St Lucia – Hluhluwe – Kosi Bay to Maputo)

. AILE OF KINGS HERITAGE CORRIDOR

(Liberation Route: Jozini/N2 Turnoff – Sikhandane – Kwaliweni – Ingwavuma – Cecil

Mack Pass)

. MAPUTALAND AEROTROPOLIS CORRIDOR

New City Corridor (Emabhanoyini)

BROAD LAND USES

The evident land use pattern and settlement pattern in Jozini LM greatly influenced by

topography, environmentally sensitive sites and sites of historical significance. The land use

pattern has evolved in response to settlement pattern and it relates to places where people live,

play and work. As such the following are the evident broad land uses in Jozini LM (see map)

. Settlements

. Towns

. Agricultural

. Commercial Farmlands

. Conservation Areas

LAND COVER HACTARES PERCENTAGE

Airfields 6.5 0.0

Bare rock and sand 506.2 0.1

Bushland and woodland 191521.8 55.6

Forest 7397.9 2.1

Grasslands 62511.5 18.2

Natural water bodies 2112.0 0.6

Plantations 25.3 0.0

Wetlands 5858.3 1.7

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Mines and Quarries 31.9 0.0

Dams 1066.7 0.3

Commercial-orchards 19.2 0.0

Commercial- Pineapples 78.2 0.0

Commercial- Sugarcane 7441.8 2.2 Commercial- Agriculture 972.9 0.3

Dense settlements 1191.0 0.3 Low density settlements 12079.8 3.5

Scattered low density settlements 47658.2 13.8

Railways 87.8 0.0

Roads 3612.0 1.0

TOTAL 344179.2 100

The above table illustrates in detail the extent of the various land uses. From the table it is evident

that bushland and woodland occupy the majority (55,6%) of the land in Jozini LM and settlements

occupy approximately 17,6%.

LAND OWNERSHIP

Most of the land is under Ingonyama Trust Board and the State. The municipality does not own

land and this is a huge challenge.

LAND CLAIMS

The figure to follow shows the following:

Gazetted Land Claims;

Settled Land Claims; and

Transferred Redistribution of Land

Some of the land that has been claimed and is being claimed occurs on the north western

part of Jozini Local Municipality, in Ingwavuma.

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ENVIRONMENTAL ANALYSIS The factors responsible for high levels of biodiversity present in the area are also responsible for the high levels of biodiversity present in the vegetation. The uMkhanyakude District is part of the Indian Ocean phytogeography region, and is a regional transition zone and a regional mosaic. Flora comprises a mixture of several floristic elements and communities and differs substantially from that of surrounding regions. Vegetation is exceptionally diverse and ranges from forest, thickets and woodlands to grassland and swamps depending on topography and edaphic conditions. These can be classified into 15 discrete vegetation types. Of at least 2180 vascular plant species, 225 species are endemic or near endemic to the Jozini area.

Biodiversity in the municipality is under pressure because of land conversion, climate change,

unsustainable harvesting of natural resources and the wide spread of alien species. Natural

resources provide opportunities for economic empowerment through sustained agriculture,

ecotourism, indigenous plant use etc.

HYDROLOGY

Jozini has an abundance of natural water resources. Major rivers include the Pongola River,

the Ngwavuma River, the Mkuze River, and the Usuthu River, of these only the Usuthu and

Pongola Rivers are perennial. The Pongola is the most important river in Jozini as it traverses

the full length of the area. The flooding of the Ngwavuma and the Usuthu dam up the waters of

the Pongola, resulting in an area of deep flooding during peak floods and the infilling of plains.

Local Mountain drainage comprises a number of seasonal streams that drain the dip-slope

and scarp-slope faces. Some of these streams have perennial pools. In spite of this apparent

abundance of water, there is some concern about the provision of potable water to rural areas.

Page 29

The town of Mkuze obtains its water from the Mkuze River and a small dam. The River

originates in Northern KwaZulu-Natal and flows through the Lebombo Mountains, across the

coastal plain into Lake St Lucia.

It is approximately 290km long and has a drainage basin of 4820 km2, but is not a reliable

water source. The dam referred to is privately owned and arrangements for abstraction are of

a temporary nature and it is considered to be an unstable water source. The town Ubombo

also gets its water from the Mkuze River and a number of boreholes that are not reliable. As

such, the towns of Mkuze and Ubombo do not have sufficient potable water to sustain their

respective populations. This has resulted in restrictions and the occasional total cessation of

their water supply (uPhongolo Sub-Regional Plan, 1999).

According to the Department of Water Affairs and Forestry, water from the Pongolapoort Dam is of

excellent quality, but its total dissolved solid is low which means that it is very aggressive on steel.

Floods are simulated twice a year and, if possible, synchronised with the high flows of the Usuthu

River to obtain the maximum flood effect. The Pongolapoort Dam supplies water for the

Tshongwe-Malobeni water scheme as well as scheme villages. The Pongola River Flood Plain

has a series of pans that flood seasonally. The Pongola River is a major water source supplying

the whole Shemula Scheme. The town of Jozini obtains water from the Jozini Water Treatment

plant, which is presently operating at full capacity (uPhongolo Sub-Regional Plan, 1999).

AIR QUALITY

Due to the rural nature of the municipality; air quality issues in the Jozini are less prevalent.

The presence of sugar cane farming suggests that there is a need of a seasonal check-up

and regulatory mechanisms on the burning of sugarcane farms.

CLIMATE CHANGE

Jozini area is characterised by seasonal dry winters and wet summers with periodic flooding.

The summer temperature ranges from 23° to 40°, while winter temps range from 16° to 26°.

Mean annual rainfall is 600mm and 800mm along the Lebombo Mountains which fall within a

moist belt. The annual average evaporation is approximately 1660mm with evaporation highest

during the winter and early spring months.

Page 30

2.4 DEMOGRAPHICS

POPULATION

According to the Stats SA 2011 Census Jozini Municipality has a population of 186 502

people and 38849 households. This represents 29.8% of the District’s population (625 846).

The municipality is the most populated municipality within UMkhanyakude District.

72% of the total population is under 29 years of age. Such a high number of youth requires

the municipality to put more emphasis on schools, recreation facilities and most important,

job creation.

The statistics in the following table indicate that, the population of Jozini municipal area has

increased with 17.6% between 2001 census and 2007 community survey. Between 2001

census and 2011 census the population has increased with 2%. There is a decrease of

population when comparing the 2007 Community Survey and Census 2011

KZ 272 Population Characteristics in comparison with other LMs in DC 27 (Source: STATSA) MUNICIPALITY PERSONS HOUSEHOLDS

Census CS 2007 Census Census CS 2007 Census

Umkhanyakude 2001

573 341

614 046 2011

625 846

2001

11 563

114 973 128 2011

195 Umhlabuyalingana 140 958 163 694 156 736 25 959 27 006 33 857

Jozini Municipality 184 052 207 250 186 502 33 534 38 530 38 849

The Big Five False

Bay

31 291 34 991 35 258 6 183 6 657 7 998

Hlabisa Municipality 176 890 150 557 91 925 26 876 27 260 12 586

Mtubatuba Municipality 33 612 46 596 175 425 7 472 11 339 34 905

The graph below illustrates a significant increase in the population figures for Jozini between

1996 and 2001 census and 2007 community survey and then a decrease between 2007

community survey and 2011 Census.

Page 31

AGE PROFILE

14000

12000

10000

4 0 0 0

8000

6000

2000

0 1 2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0

Population per Ward

Source: Stats SA DENSITY

Population densities are highest in the northern parts of the Wards 20, 2 and 7 (Umkhuze,

Ubombo and Jozini) and Ingwavuma (ward 14) have relatively high densities.

The following table indicates population per ward.

WARD POPULATION WARD POPULATION

1 7173 11 8094

2 8144 12 10401

3 9422 13 10775

4 8292 14 11634

5 13677 15 8465

6 6939 16 9494

7 9574 17 10425

8 8504 18 7939 9 9506 19 8813

10 11085 20 8148 Source: Stats SA Census 2011

Source: Stats SA (Census 2011)

In terms of 2001 statistical figures, the total figure for males and females within the age

category of 0-19 was 114 095 which was about 60% of the total population (184 052). In

2007 in the same age category the total population figure for males and females was 114

217 which was about 52% of the total population (207 722). Although not much of an

increase (i.e. an addition of 122),this age category saw a decline of around 2.5% due to the

increase in the total population number form 184 052 in 2001 to 207 722 in 2007.

In the 20-64 age category the statistics was as follows; in 2001 the figure was 56 831 (45%)

of the total population and grew to 85 004 (38%) of the total population in 2007. There was

a population increase of 28 173. In the 65+ age category in 2001 there were 13 090 of the

total population. The number decreased to 8 501 in 2007 of the total population, a decrease

of 4 589. This indicates a high mortality rate in the age group.

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30000

25000

20000

15000

10000

5000

0

Age category

00-04

05--09

10--14

15 - 19

20 - 24

25 - 29

30 - 34

35 - 39

40 - 44

45 - 49

50 - 54

55 - 59

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Age category Male Female Number

00 – 04 13855 13490 27345

05 – 09 12413 12166 24579

10 – 14 12725 12300 25025

15 – 19 12398 12471 24869

20 – 24 8708 10321 19029

25 – 29 5772 8443 14215

30 – 34 4084 5993 10077

35 – 39 3289 4844 8133

40 – 44 2723 4386 7109

45 – 49 2355 3898 6353

50 – 54 2264 3132 5396

55 – 59 1767 2240 4007

60 – 64 1254 1783 3037

65 – 69 803 1229 2032

70 – 74 694 1272 1966

75 – 79 342 969 1311

80 – 84 325 872 1197

85+ 246 577 823

Source: Statistics South Africa (Census 2011)

The 0-19 age group constitutes a significant amount of the total population. This is the group that holds

the key to regeneration and development efforts of any municipality. Jozini Municipality should develop

supportive interventions in collaboration with other spheres of government to improve educational and

vocational job opportunities for this group. The municipality should find ways of contributing to early

childhood development initiatives in the municipal area. The municipality should further embark on

interventions to alleviate the plight of young people who have become breadwinners as a result if

HIV/AIDS.

The second highest category is age 20 – 64 constituted 48% of the total population. This group is also

faced by various environmental stresses that expose them to vulnerability and poverty. These include

HIV/AIDS, unemployment and lack of skills. They constitute the poor and marginalised. Only 4% of the

population is over the age of 65.

GENDER

The proportion of females is marginally higher (54%) than that of males; the social implications of this

for the municipality are significant. It is likely to imply that women head most households and thus their

participation in economic activities is limited by the need to fulfil dual roles of being a provider and a

nurturer. The latter role is by its very is time intensive and emotional oriented.

Table: Age and gender profile Age Males Females Total Males Females Total Males Females Total Group (2001) (2001) Population (2007) (2007) Population (2011) (2011) population

(2001) (2007) (2011)

0-19 55148 58947 114095 57929 56288 114217 51391 50427 101818

20-64 24311 32520 56831 35013 49991 85004 32216 45040 77256

65+ 4327 8763 13090 2220 6281 8501 2509 4919 7428

Total 83822 100230 184052 95162 112560 207722 86017 100386 186502

Source: Stats SA Census 2001 and 2011 and Community Survey 2007

Page 34

The strategy focuses on promoting comprehensive administration which is proficient and operative

that will enable the municipality to meet its development needs.

The Municipality must ensure that financial and capacity resources are provided to meet the needs of

the communities as indicated in the IDP Review, and that would also enable the adherence to the

vision, objective and strategies.

MUNICIPAL TRANSFORMATION

Jozini Municipality is an equitable employer with targeted groups represented in various layers of the

municipal structure. However, there are still a number of areas where improvement is required. Heads

of Departments (HODs) comprise of 3 black African males and 1 African woman. Women occupy 3

middle management positions.

An Employment Equity Committee has been established and will be responsible for the following:

Review of Employment Equity Plans.

Ensuring that the Employment Equity Act is being implemented.

EMPLOYMENT OF DISABLED PEOPLE

As per the requirement from the Department of Labour, employers are required to employ a total of 2%

disabled persons. The municipality also employs people living with disabilities. Council currently has 1

disabled employee. In order to attract people with disabilities, positions which are suitable for people

with disabilities are to be identified and will be stated as such on the advertisements.

The main focus of Labour Relations is to manage and strengthen relations between Organised Labour

and Management. Council is currently engaged in a facilitation process under the auspices of the South

African Local Government Bargaining Council (SALGBC).

All disciplinary processes and grievance processes are dealt with in terms of the Collective

Agreements agreed upon by SALGA and Organised Labour. Appeals are also dealt with in terms of

the same Collective Agreement until cases are referred to the Bargaining Council.

The Labour Relations (HR) section is also responsible for the following:

- Facilitation of preparation meetings for Local Labour Forum (LLF prep); -

Attending of Local Labour Forum meetings;

- Assisting Employee Assistance Programme (EAP) with drug and alcohol awareness sessions with

employees;

- Workshop disciplinary process and procedures with employees;

- Foster better relationships between management and Organised Labour;

- Assist and advice line management and employees on good line management

Page 35

ORGANISATIONAL DEVELOPMENT

The Council strives to maintain and enforce a strict workflow to ensure:-

Uniformity

Security

Accessibility

Transparency

during the reporting procedure, from report preparation to the finalization or implementation of

recommendations and resolutions.

There are 5 Portfolio Committees which are scheduled to meet every month that feed into the

1 EXCO per month.

All reports are approved by the Municipal Manager before they are placed on an agenda.

INSTITUTIONAL ARRANGEMENTS

The purpose of conducting an institutional analysis is to ensure that the municipal development strategies take existing institutional capacities into consideration and that institutional shortcomings are addressed. Jozini local municipality was established in 2000 in terms of the Municipal Structures Act, 1998 (Act No. 117 of 1998). The municipal offices are at Jozini Town. The municipality also hosts the UMkhanyakude District offices situated in Mkhuze town. There is also a satellite office in Ingwavuma

town.

MUNICIPAL COUNCIL

Jozini Local Council comprises of the political and administrative components responsible for decision-

making and implementation respectively. The Council of Jozini Municipality is comprised of 40

Councillors, with eight (8) EXCO members. The Mayor chairs the EXCO while the Speaker chairs

Council.

The Municipality has all the powers assigned to it in terms of the Constitution as well as relevant

national and provincial legislation. The executive and legislative authority is vested in the Council. The

Council must, therefore, take all the major decisions of the Municipality including delegation of powers

to political office bearer, Council committees and officials.

There are 5 portfolio Committees established for political oversight over departmental activities and

making recommendations to Council. It is in these committees where policy issues are debated

thoroughly prior to their submission to the Council for adoption.

Through Portfolio Committees, Councillors are able to give political direction to the administrative

programmes of Council. The table below highlights the Portfolio Committees that have been

established to contribute to effective decision-making in processes of governance and ensure effective

implementation of service delivery projects and monitoring thereof.

Page 36

CHAPTER 3 – SERVICE DELIVERY PERFORMANCE REPORT

3 Basic Services

The success of local economic development is tied to the provision of basic and other types of

infrastructure to the people. Infrastructure focuses on the status quo regarding water supply, sanitation

facilities, energy and housing provision, roads and waste management – all of which underpins socio-

economic development and determines people’s quality of life.

The provision of adequate municipal infrastructure remains a challenge throughout the district in

general and Jozini municipality in particular. In the municipality electricity is largely distributed by

Eskom and falls within the areas of powers and functions of the UMkhanyakude District Municipality.

Issues and Challenges faced: Backlog on basic infrastructure (housing, water, electricity, sanitation,

roads); Backlog on infrastructure maintenance in town; Land ownership and Land rights.

3.1 Rural roads

Jozini LM constructed 9 km of new roads where the access to the community was a challenge.

The following roads were completed:

Project name Ward Budget Distance

Bhanjana access gravel road

5 1 270 720.83 1.95 km

Emlotheni phase 2 access road

7 1 164 599.67 1 km

Page 37

Below is an example of Bhanjana road after completion.

Page 38

3.2 Electrification

Due to Jozini Municipality characterization by a huge backlog in electricity provision, electricity has

been identified as the second priority in the municipality through the ward participation meetings.

While such a backlog could be attributed to limited power of the available substations in relation to

demand, sparsely nature of households plays a determining factor in electricity provision as well. The

Municipality is committed to the provision of an individual house connection with 240KW/1kVA through

a card system. Grid electricity is the preferred service as compare to non-grid electricity but non-grid

should remain an option of electricity provision in the municipal areas where grid electricity is not

feasible.

The above graphs paint a realistic picture as far as access to electricity in Jozini Municipality is

concerned. The use of wood for cooking and candles for lighting remain high among households in

Jozini Municipality. About 59% of households still utilize wood for cooking, while around 57% still

relies on candles for lighting. This implies that the use of electricity remain a luxury for households.

The use of woods impacts negatively on the environment, because it intensifies deforestation.

The Municipality is only prioritising and fast tracking implementation of Electrification projects within its

jurisdiction areas. Currently the backlog in terms of electricity supply is estimated at 73.7%. This is

increasing with the development of new townships being established and village extensions.

From 2009 Jozini municipality started receiving electrification grants, since then we have managed

to provide electricity where network supply is adequate to supply households. Last financial year

(2013/14) two projects were completed.

Page 39

Project name Ward Budget Number of household connected

Majozini Electrification project

2 5 711 195.19 163

Ingwavuma electrification project

11 & 14 9 000 000.00 413

Majozini electrification project

3.3 Rural Housing

3.3.1 Role of the Developer/ Jozini Local Municipality

The Jozini acts as a Developer with the following roles:

Plans the approach for the distribution of housing across the municipal area by documenting it in its Human Settlement Development Plan (HSDP).

Coordinates roles played by various stakeholders such as DHS, IA’s, Communities etc. in terms of housing delivery .

3.3.2 Role of the Funder/ Department of Human Settlements (DHS)

The DHS allocates funds for housing development according to the municipal HSDP.

The DHS further advises the municipality on whether funds are available for phasing in of housing projects etc.

Page 40

Below are photos of completed housing units for the above-mentioned project.

3.3.3 Current projects & Challenges

Project Name Number of units

Current status challenges

Kwa-Jobe phase two(2) rural housing project

800 The project is currently at construction. See photos for completed units so far.

No challenge/s at a moment.

Project Name Number of units

Current status Challenge/s

Ndumo rural housing project

1000 The project is currently at stage

1 (planning).

The IA experiences difficulties in securing development rights both from ITB and the Rural Development Department.

Page 41

Project Name Number of units

Current status Challenge/s

Ward 5 housing project

1000 The project is finalizing the pre- feasibility study

The IA experiences difficulties in securing development rights from the Rural Development Department.

Project Name Number of units

Current status Challenge/s

Siqakatha housing project

1000 The developer is waiting for the DHS to allocate funds for the continuation of the project since the municipality won the case against the IA in court.

No challenge yet until DHS allocates funds for the project.

Project Name Number of units

Current status Challenge/s

Ingwavuma housing project

132 The Conveyancers (hired by DHS) are presently transferring titles to beneficiaries. These transfers will enable the close out of the project and the subsequent application for rectification.

Transfers are coming very slowly.

Project Name Number of units

Current status Challenge/s

Jozini Housing Project

502 The project is experiencing a close out problem due to the type of ownership that will be given to beneficiaries. At a moment, the IA has applied to DHS for the change of the project from urban to rural.

Sewage and complications caused by early swapping of beneficiaries.

3.3.4 Current housing back log

Since the dawn of the new political dispensation in 2011, Jozini Municipality has only inherited the long-locked KwaJobe Phase Two (2) housing project with only 800 units. It covers areas in ward 3 & 4. This is the only project which is shows practicability in Jozini municipality.

However, below we attached (separately), a plan for provision of housing across Jozini Municipal wards. This plan may only be successful as long as the DHS allocates funds for implementation:

Page 42

3.3.5 Proposed packaging of housing project

No Project Name Wards Covered

Cluster Allocation

Allocation per ward

1 Ndumo Phase 2 16 1257

2 Siqakatha Housing Project 1000

3 Manyiseni, Nkungwini & Nyamane 15, 18, & 11 1200 400

4 Machobeni, Mamfene & Maphaya 14, 6 & 7 1200 400

5 Msiyane, Mandiyane & Mzinyeni 8, 2 & 10 1200 400

6 Ophondweni, Nondabuya & Zineshe 9, 19 & 3 1200 400

7 Gujini, Mbadleni & Mhlekazi 4, 17 & 1 1200 400

8 Shemula, Hlalanathi & Mkuze 12, 5 & 20 1200 400

9 Makhanisi 13 400 400

3.4 Community Facilities

Last financial year 2013/2014, Technical Department constructed seven community facilities. These

facilities are used for public and private events. Among the major capital projects are the constructions

of Nonjinjikazi and Thelamama community halls. Overall, the above mentioned projects will service a

household of 450 homesteads.

Nonjinjikazi Community hall Thelamama Comminity hall

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3.4.1 Renovations of community facilities

The Municipality renovated 16 community halls, two public toilets, one crèche and one official residents.

Most of them were in a dilapidated stage, through this programme jobs were created for the local

community.

The below community facilities were renovated under this programme.

Project WARD Magwazana Hall 02

Bhambanana Hall 12

Mziki Hall 17

Endabeni Hall 15

Madanishini Hall 10 Sibonokuhle Hall 04 Makhane Hall 13

Ward 5 Creche 05

Jozini Toilets 07 Msiyane Hall 08

Ezibukweni Hall 07

Makhonyeni Hall 05

Ingwavuma Toilets 14

Ingwavuma Office 14

Bhambanana Toilets 12

121 Hall & Official Resident 07

Ophondweni Hall 09

Ophansi Hall 20

Mlingo Hall 20

Jozini Sportfield 07 Mzinyeni Hall 10

Kwashukela Hall 10

3.5 Waste removal

Jozini Municipality has six towns that are currently receiving waste services from the municipality.

Those services are waste collection, street sweeping, grass cutting and storm water drains cleaning.

Having noted that the waste management had become a challenge for town and residents Council took

a decision to recruit 350 general workers for street sweeping, grass cutting and waste collection. This

has bear fruits and created job opportunities through EPWP programme.

3.5.1 Mkuze

The municipality is collecting waste at Mkuze Town (streets and other business storage cages) daily

with the municipal truck, one day a week at suburbs and two days in a week for townships and

Hotels to Mkuze Dumpsite

Page 44

3.5.2 UBombo

The municipality is collecting waste twice in a week at Ubombo with a municipal truck to Mkuze

Dumpsite.

3.5.3 Jozini

The municipality is collecting waste at Jozini Town (streets and other business storage cages) daily

with the municipal truck, one day a week at suburbs and two days in a week for township and Hotels to

Mkhuze Dumpsite

3.5.4 Bhambanana

The municipality is collecting waste twice in a week at Bhambanana with a municipal truck to Mkhuze

Dumpsite.

3.5.5 Ndumo

The municipality is collecting waste twice in a week at Ndumo with a municipal truck to Mkhuze

Dumpsite.

3.5.6 Ingwavuma

The municipality is collecting waste at Ingwavuma Town (streets and business storage cages) daily

starting from Monday to Saturday with the municipal tractor, one day a week at suburbs and two

days in a week for townships and Hotels to Ingwavuma Dumpsite.

3.5.7 Recycling Centre

Jozini Municipality has a recycling which has much equipment to function. It was established to

minimize waste that is going to dumpsites because all of them are illegal and all towns and

residential are producing 85% recyclable material. Currently the recycling centre has been

outsourced to New South Africa Recycling however it is not function up to the required potential.

3.5.8 Dumpsites

Currently the municipality has two illegal dumpsites, those are Ingwavuma and Mkuze. Mkuze need a

weekly maintenance using the TLB because of amount volume of waste disposed.

3.5.9 Addressing Illegal dump sites

AECOM SA (Pty) Ltd has been appointed by Jozini Local Municipality for the design and implementation for the rehabilitation, licensing and further development of an existing Solid Waste Disposal Facility at Mkhuze (Ward 20).

Page 45

3.6 PLANNING AND DEVELOPMENT

The Planning unit falls under the Planning and Technical Department and is responsible for the

implementation of planning requirements in terms of the applicable legislation as well as spatially

represent the spatial logistics for Jozini municipality. The planning unit is there to oversee the land use

management within the municipality. The following are some of the project administered within the

2013/14 financial year;

. Jozini town nodal expansion plan

. Land Use schemes for Jozini, Ingwavuma, Mkhuze, Bhambanana, Ubombo and Ndumo nodes.

3.6.1 IDP and Public Participation:

Jozini local municipality is engaged in the process of Integrated Development Planning as the

requirement of Chapter 5 of the Municipal Systems Act No.32 of 2000. Our IDP is the key goal for

guiding and informing all planning, budgeting, management and decision –making in the municipal area

for the period of five year.

The municipality reviews its IDP on annual basis as the requirement of section 34 of the MSA and that

is done through public participation consultative meetings and IDP representative forums. Through

proper engagement with all stakeholders the municipal IDP has improved.

The IDP is undertaken in-house by the IDP Manager and was successfully reviewed and adopted by the

Municipal Council on time i.e. end May 2014 for submission to the MEC: Corporative Governance and

Traditional Affairs [DCoGTA].

The municipality work together with Ward Committees in its public participation processes and reach

the community by disseminating information to them, by engaging with them in consultation and by

allowing community inputs in municipal decision-making regarding service delivery, developing

credible IDPs, policy formulation, budgeting processes and organisational performance. For this

purpose the Ward Committees of Jozini Municipality held various meetings with the community e.g.

IDP public consultative Meetings and Ward Based Planning Sessions. In addition to this a number of

Community Outreach Programmes were also rolled out in the different wards. During the month of

April 2014, IDP and Budgeting processes information and consultative meetings were held and all

wards were represented.

3.6.2 Jozini Town Nodal Expansion Plan:

This project was approved on the basis of the Small Towns Rehabilitation business plan that was

submitted to COGTA. The purpose of this project is to do a feasibility study and come up with a plan for

the new road that will go behind Jozini town to address the issue of traffic congestion. Layouts were

prepared, the municipality now has to do the PDA processes in order to finalise this project.

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3.6.3 Land Use Schemes for Jozini, Ingwavuma, Mkhuze, Bhambanana, Ubombo and

Ndumo:

With the assistance of COGTA, the municipality began the process of preparing schemes for the six

nodes in Jozini municipality. The main purpose of formalizing the towns is to control land use and

broaden the income base of the municipality by creating a conducive environment for investors to

develop in. By generating more income through property rates, the municipality can develop towns with

a orderly and safe environment to work and live in. Layouts have been prepared and will be presented

to the Traditional council and the affected communities.

The project is undertaken planning Consultants that were appointed by COGTA. The completion status is

at 60% as the draft layout plans have been prepared but still need to be presented before the Tribal

Councils and Communities for public consultation and necessary amendments. The Ingonyama Trust

Board is also one of the key stakeholders that still have to decide on the legal process to be followed.

3.6.4 Building Plans

Plans submitted:

19 plans were submitted

07 plans were approved

12 plans were not approved

Reason for not approving, many plans are referred back to the applicant because of insufficient

information, this leads to lengthy and costly delays in the approval of plans.

Page 47

CHAPTER 4 - ORGANISATIONAL DEVELOPMENT PERFORMANCE

The Wellness Programme, Workplace Skills Plan (WSP), Work and Play and Team Building

sessions are part and parcel of what the municipality practises to promote and ensure

organisational development

4.1 Organisational Framework

Jozini municipality comprises of five (5) Departments namely: Management Services, Corporate

and Social and Economic Services, Technical and Planning Services and Budget and Treasury.

Each Department is headed by section 56/57 managers, with a well-designed and agreed upon

performance scorecard to achieve the vision and mission of the municipality. The scorecard

becomes the key tool against which to measure and assess the performance of the municipality

on the quarterly basis.

4.1.1 ORGANISATIONAL PERFORMANCE MANAGEMENT YSTEM

Legislative requirements

Outlined in Section 40 of the Municipal Systems Act of 2000 (MSA), Municipalities must establish mechanisms to monitor and review its Performance Management System (PMS) so as to measure, monitor, review, evaluate and improve performance at organisational, departmental and employee levels. Section 34 of the MSA furthermore point out that the Integrated Development Plan (IDP) has to be reviewed on an annual basis, and that during the IDP review process the Key Performance Areas, Key Performance Indicators and Performance Targets be reviewed and this review will form the basis for the review of the Organisational Performance Management and Performance Contracts of Senior Managers.

The Municipal Planning and Performance Management Regulations (2001) stipulates that a “municipality’s performance management system entails a framework that describes and represents how the municipality’s cycle and processes of performance planning, monitoring, measurement, review, reporting and improvement will be conducted, organised and managed, including determining the roles of the different role-players” (Chapter 3, Section 7, Municipal Planning and Performance Management Regulations, 2001).

Section 46 of the Municipal Systems Act (Act 32 of 2000), stipulates the following:-

"Annual performance reports

(1) A municipality must prepare for each financial year a performance report

reflecting - (a) the performance of the municipality and of each external service

provider during that financial year; (b) a comparison of the performances referred to in paragraph (a) with

targets set for and performances in the previous financial year; and (c) measures taken to improve performance.

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(2) An annual performance report must form part of the municipality's annual report in terms of Chapter 12 of the Municipal Finance Management Act.”

1. Introduction

The first performance management framework was adopted by the Jozini Municipality on 26 November 2006.The framework was reviewed and amended during 2006/2007 financial year to align with the best practice guidelines suggested by the then Department of Provincial and Local Government and Traditional Affairs of Kwazulu-Natal.

The Performance Management function of Jozini Municipality was previously outsourced to an external service provider and Council resolved during the 2009/2010 financial year to create an internal Performance Management Unit within the Office of the Municipal Manager.

The Performance Management Framework and Policy review for the 2013/2014 financial year was adopted by Council per item Council resolution JMC 252 and is available on Councils Committee Officer.

2. Organisational Performance Management Process

Key performance indicators have been refined in support of the municipality’s development priorities and objectives as set out in the revised IDP framework (aligned with the organizational structure and Council’s priorities) for the new five year IDP period to ensure consistency in measuring and reporting on long terms strategies and projects. Measurable performance targets with regard to each of these development priorities and objectives were established and are reflected on the 2013/2014 OPMS Scorecard. A process to ensure regular reporting is in place and gets reported quarterly to the Council via the Performance Audit Committee.

Individual performance agreements and performance plans were prepared in line with provisions prescribed in the Performance Regulations (Notice 805, published on 1 August 2006 in the official gazette) and signed by the Municipal Manager and Heads of Departments. These agreements are fully implemented and aligned with the Service Delivery and Budget Implementation Plan as required in terms of the Municipal Finance Management Act.

The following diagram illustrates a summary of the newly developed performance management framework for the Jozini Municipality for performance measurement and reporting, adhering to the guidelines suggested by KwaZulu-Natal Province, Department for Cooperative Governance and Traditional Affairs:

Page 49

Jozini Performance Management Framework diagram

3. Performance Audit Committee The Performance Audit Committee for the 2013/2014 financial year was re-affirmed in terms of Section 14(2) (a) of the Local Government: Municipal Planning and Performance Management Regulations of 2001 and the members are as follow:

Mr Z.I. Ngcobo – Chairperson (external member) Mr D. L Mpontshane (External Member) Mr S. Kunene (External Member) Mr N. Dludla (External Member)

The Performance Audit Committee has met quarterly on 16 August 2013, 15 November 2013, 28 March 2014 to consider the reported annual performance achievements reported on the OPMS scorecard as well as the Performance Achievements reported in terms of the Service Delivery Budget Implementation Plan on the completed 2013/2014 financial year. The minutes of meetings are available on the GroupWise electronic document management system.

4. Performance Evaluation Panels

Performance Evaluation Panels have initially been established for the assessment of performance of the Municipal Manager as well as Managers directly accountable to the Municipal Manager.

Page 50

Performance Assessment Panels for the assessment of Section 57 employees were established as follows:

For purposes of evaluating the annual performance of the municipal manager, an evaluation panel constituted of the following persons was established -

i. Mayor – KZ272 ii. Chairperson of the Performance /Audit Committee. iii. Member of the Mayoral or Executive Committee. iv. Mayor and/or Municipal Manager from another Municipality; and v. Member of a Ward Committee as nominated by the Mayor.

Clr B.N. Mthethwa Mayor

Clr R.H. Gumede Exco Member

Mr Z. I. Ngcobo Chairperson of the Performance/ Audit Committee

Mr A. Dhlomo A Mayor/MM from another Municipality (Big 5-False Bay) Mr L.E. Menyuka Ward Committee member (nominated by the Mayor)

For purposes of evaluating the annual performance of managers directly accountable to the Municipal Manager, an Evaluation Panel constituted of the following persons was established:

i. Municipal Manager -KZ272 ii. Chairperson of the Performance/ Audit Committee iii. Executive Committee Member iv. Municipal Manager from another Municipality- Big 5- False Bay v. Ward Committee Member

Mr L.C.Maka AMM-KZ272

Mr Z.I. Ngcobo Chairperson of the Performance/ Audit Committee

Clr R.H Gumede Exco Member

Mr A. Dhlomo Municipal Manager from other Municipality (Big 5 False Bay Municipality)

Mr L.E. Menyuka Ward Committee Member

Performance Evaluation sessions were performed on 5th October 2013 covering the first quarter of the 2013/2014 financial year on progress over the first three months from 1 July 2013 to 30 September 2013. Formal Evaluation sessions covering the first six month period of the covering the period 01 October 2013 to 31 December 2013 were held on 17th of January 2014. Performance Evaluation sessions were performed on 19th April 2014 covering the Third quarter of the 2013/2014 financial year on progress over the ninth months from 1 January 2014 to 30 March 2014.The Final Assessment 2013/2014 held on the 05th of August 2014

Page 51

PMS SUMMARY OF FINAL -TERM RESULTS 13/14 FOR SECTION 56/7 NAME & DESIGNATION CCR

Results KPA Results

Final Score Score Rating

1. Municipal Manager(Organisational) 15%

55%

70%

4

2. Mr S.W.Zondo (Exc. Director Corporate and Community Services)

15% 55% 70% 4

3. Mr S.Bhengu (A Exc. Director Planning and Technical)

15% 66%

76% 4

4. Mr V.I. Gumede (Acting Chief Financial Officer)

14% 56% 70% 4

TOTAL 20% 80% Aver=70% Aver=4

APPROVED BY: Mr L.C. Maka (AMM) DATE: 05 August 2014 An informal performance evaluation was again performed on 19 April 2014 on progress on

performance over the third quarter covering the period 1 January 2014 to 31 March 2014 of

the 2013/2014 financial year. The final performance evaluation sessions of the Municipal

Manager and Managers Directly accountable to the Municipal Manager covering the completed

2013/2014 financial year held on the 5th August 2014. The final performance evaluation results

and scores will be reported via the Performance Audit Committee to the Executive Committee and

Council before submission of the 2013/2014 Annual Financial Statements and the 2013/2014

Annual Report.

5. Auditing of Performance Information

The Municipal Systems Act, 2000, Section 45 requires that the results of performance measurements in terms of section 41 (1)(c), must be audited as part of the internal auditing process and annually by the Auditor-General. All auditing must comply with section 14 of the Municipal Planning and Performance Management Regulations, 2001 (Regulation 796).

Umnotho Business Consulting has been appointed by Jozini municipality as the Internal Auditors commencing their services on 01 December 2012.As part of their scope, auditing of the Performance Management System and Audit of Performance Information was performed and reports received for each quarter in terms of the following:

Page 52

Project Focus Area

Review of Performance Information - Quarter 1

• Consistency in reporting;

• Measurability and reliability;

• Performance reports reviews;

• Performance score verification (Municipal Manager and Deputy Municipal Managers);

• Compliance with relevant laws and regulations.

Review of Performance Information - Quarter 2

• Consistency in reporting;

• Measurability and reliability;

• Performance reports reviews;

• Compliance with relevant laws and regulations

Review of Performance Information - Quarter 3

• Consistency in reporting;

• Measurability and reliability;

• Performance reports reviews;

• Compliance with relevant laws and regulations

Review of Performance

Information - Quarter 4 (Annual Report)

• Consistency in reporting;

• Measurability and reliability;

• Performance reports reviews;

• Compliance with relevant laws and regulations

The Auditor General is performing a complete auditing of information submitted in this report, together with all achievements reported in the Organisational Performance Management System Scorecard is attached in Annexure D.

6. Annual Organisational Performance Information

The annual performance reporting on the 2013/2014 financial year has been completed and reflected in the Organisational Performance Scorecard in a table format (as prescribed by KwaZulu-Natal Department of Co-operative Governance and Traditional Affairs (KZN COGTA). The Draft Organisational Performance report is herewith presented to the Auditor General for auditing together with the Annual Financial Statements on 30 August 2014.

This Annual Performance Report (Tables) once finalized and approved should be read in conjunction with the Jozini Annual Report, including the Annual Financial Statements as well as Auditor General Report on the Annual Financial Statements and Performance Information for 2013/2014.

The following table reflects the organisational performance targets and achievements

as reflected in the Integrated Development Plan, in relation to the achievements of the

previous financial year as well as reflecting corrective measures to be taken in the

2014/2015 financial year in cases of under achievement

Page 53

4.2 Total Number of Positions, Turnover and Vacancies

NUMBER OF EMPLOYEES TURNOVER% TERMINATIONS

180 4.44% 8

The Organisational Framework below covers the whole municipality.

4.2.1 Senior Management

Total number of positions =5

Total number of vacancies = 4

The Municipality has got a total number of 5 positions at Senior Management level of which four (4)

are vacant whilst one (1) is filled. There is a need therefore for the municipality to ensure that these

positions are filled as soon as possible to facilitate effective and efficient administration and

management. This will also assist in promoting service delivery which is one of the key priorities of

the government .The process of recruitment and selection will kick-start as soon as the Labour court

matters are resolved.

Page 54

4.2.2 Management Services Department

Total number of positions = 10 Total number of vacancies = 1

The Municipality has got a total number of 10 positions in Management Services Department

and there is one (1) vacant positions to be filled.

Page 55

4.2.3 Budget & Treasury Department

Total number of positions = 21

Total number of vacancies =4

The Municipality has got a

total number of 21 positions

in Budget & Treasury

Department, with four (4)

vacancies.

Page 56

4.2.4 Corporate Services Department

Total number of

positions = 90

Total number of

vacancies = 12

Page 57

Currently the Corporate Services Department has got 90 positions of which 12 of them

is vacant. This then hampers the performance of the department in that it cannot

perform optimally to support other department as a driving force or engine of the

municipality. The future plan is to advertise all the vacant positions to make the

municipality more effective and efficient.

4.2.5 Social and Economic Development Department

Total number of positions =40

Total number of vacancies =26

Page 58

Page 59

Social and Economic Services Department has forty (40) positions and twenty six (26) vacancies

which need to be filled once approval is obtained from council. This Department has a very

important role to play regarding service delivery since it is the face of the municipality in public

participation. It is therefore vital for the municipality to ensure that all vacancies are filled with

immediate effect.

4.2.6 Technical & Planning Services Department

The Technical and Planning Services Department has got 31 positions and 5 vacancies which will

be filled soon. This Department also needs urgent support since it deals with

infrastructural development and planning.

Page 60

VACANCIES

Designation Approved Filled Vacant

Section 56 & 57 05 01 04

Managers 16 14 02

Assistant managers 01 01 0

Superintendents 02 02 0

Officers 49 35 14

Drivers 06 06 0

Admin/Clerks 47 42 05

General Workers

(Permanent)

15 15 0

Securities 24 24 0

Waste Management 15 0 15

The critical positions of Senior Management are vacant and needs to be filled once the matter

submitted to Labour Court has been resolved. This necessitated the temporal appointment of

Acting Municipal Manager, Acting Chief Financial Officer.

4.3 COMMENT ON VACANCIES AND STAFF TURNOVER

The municipality has a turnover of 4.44%.Vacancies are normally filled as soon as people resign to

reduce vacancy rate. Due to resignations and unforeseen circumstances filling of vacancies has

delayed and will be attended to soon.

Financial Year 14-15 Total Employees

beginning of year

Terminations during

financial year

Section 56 & 57 05 03

Managers 16 01

Assistant managers 01 0

Superintendents 02 0

Officers 96 04

Drivers 06 0

General Workers 15 0

Securities 24 0

Page 61

4.4 HUMAN RESOURCE POLICIES

Retention Policy 100% 24-26 June 2014 August 2014

Sexual Harassment 100% 24-26 June 2014 August 2014

Training and Development Policy 100% 24-26 June 2014 August 2014

All the above policies were reviewed submitted to Council for approval in August 2014; the

workshop was done to Councillors and Municipal Officials. The Corporate Services

(Human Resources) will further review the above policies and develop new policies in the

next Financial Year.

Name of policy Completed Date reviewed Date adopted

Recruitment Policy 100% 24-26 June 2014 August 2014

Dress code Policy 100% 24-26 June 2014 August 2014

Disciplinary Policy 100% 24-26 June 2014 August 2014

Facility Policy 100% 24-26 June 2014 August 2014

Induction Policy 100% 24-26 June 2014 August 2014

Migration Policy 100% 24-26 June 2014 August 2014

Promotion Policy 100% 24-26 June 2014 August 2014

Bursary Policy 100% 24-26 June 2014 August 2014

Code of Conduct Policy 100% 24-26 June 2014 August 2014

Municipality Staff Policy 100% 24-26 June 2014 August 2014

Stand-by Policy 100% 24-26 June 2014 August 2014

Desertion & Abscondment Policy 100% 24-26 June 2014 August 2014

Employment Equity Policy 100% 24-26 June 2014 August 2014

Housing Subsidy Policy 100% 24-26 June 2014 August 2014

Leave Policy 100% 24-26 June 2014 August 2014

OHS Policy 100% 24-26 June 2014 August 2014

Records Management Policy 100% 24-26 June 2014 August 2014

Page 62

4.5 BY-LAWS

The municipality has established and customised its Animal Pound and Cemetery By Laws

which have been sent to the Government printers and we are awaiting promulgation of them.

This was done with the assistance of the Department of Cooperative Governance and

traditional Affairs.

4.6 MANAGEMENT PRACTICES:

The Administration and management of the municipality manages the organisation through the

effective implementation of policies and regulations. All the employees of the municipality are

obliged to comply with all the policies and those that do not comply are subjected to disciplinary

proceedings. During the 2013/14 financial year, four (4) officials were charged and disciplinary

procedures were taken against them.

4.7 SUSPENSIONS (from Disciplinary Hearings)

The municipality did not have any suspensions except one official that was dismissed.

4.8 WORKFORCE CAPACITY DEVELOPMENT

MSA 2000 S68 (1) requires Municipalities to develop their Human Resource capacity to

enable the Municipality to perform its functions effectively as well as utilise its resources in

an economical way with accountability. The Municipality has implemented the Workplace

Skills Plan (WSP) in order to train and develop human resource so that the Municipality can

perform its functions to its full capacity.

STAFF TRAINING:

The budget that was spent by the municipality for staff training is R1006 995.05

STAFF BURSARIES:

The budget that was spent by the municipality for staff bursaries is 95 98.60

COMMUNITY BURSARIES: The budget that was spent by the municipality for community

bursaries is R295 000.00

Page 63

4.8.1 SKILLS TRAINING AND DEVELOPMENT

Trained

employees

Courses Name Beneficiaries

Finance

Section

1. MFMP •

•

•

Financial interns

Assistant Manager Income

Senior Payroll Clerk

• Senior Creditors Clerk

• Data Captures x 3

• SCM Manager

• SCM Clerk

• Budget Officer

• Financial Clerk

2. Basic Payroll and • Finance Manager

Advance Payroll

Administration

Section

56/57 1. MFMP ( Municipal • Municipal Manager

Manager) • Chief Financial Officer

2. Sage VIP Payroll (

CFO)

LEGISLATORS

1. Councillors • Executive Committee members Development • All Councillors

Programme •

The Speaker, Mayor and Chief Whip

2. Councillors Induction

3. MFMP

Page 64

Management 1. 2.

MFMP

Performance

Management System

•

•

Internal

Auditor

PMS Officer

Corporate and 1. Health and Safety • HR Clerk

Community 2. Public Participation • Committee officer

Services 3. MFMP • Thusong Manager

4. Human Resource Job

and employee • HR Manager, HR Clerk and HR Officer

management • Secretary to ED Corporate and

5. Minutes Taking and Community Services

Report Writing • Thusong administration Clerks

Receptionist(Ingwavuma)

Technical and 1. Road Construction • Technical Officer

Planning Maintenance and • Junior Town Planner

Repairs • Technical Manager

The Municipal employees attended different courses as indicated below

Municipal Manager attended the Municipal Finance Management Programme

All Finance Section employees has undergone the training of Municipal Finance Management

Programme with an exception of Finance Manager and Manager Reporting and Compliance

The Chief Financial Officer submitted the proof of attendance of the MFMP

Three legislators attended the MFMP and there are no results received

In Management Section, only the Internal Auditor attended the MFMP

Thusong Manager in Corporate and Community Services has attended the MFMP

Page 65

WORKPLACE SKILLS PLAN SUMMARY-2013/ 2014

TOTAL EMPLOYEES

OCCUPATION CATEGORY

FEMALE MALE

TO

TA

L

AGE

GROUPS

TO

TA

L A

G E

PWD

NO

N-

SA

A C I W A C I W

35

a

nd

be

low

35

- 5

5

> 5

5 A C I W

1 3 1

11 - LEGISLATORS 1 0 0 0 5 0 0 0 46 7 29 0 46 0 0 0 0 0

12 - MANAGERS 3 0 0 0 5 0 0 0 8 4 4 0 8 0 0 0 0 0

1

2 - PROFESSIONALS 4 0 0 0 1 0 0 0 15 5 10 0 15 0 0 0 0 0

3 - TECHNICIANS AND

TRADE WORKERS 1 0 0 0 3 0 0 0 4 2 2 0 4 0 0 0 0 0

4 - COMMUNITY AND

PERSONAL SERVICE

WORKERS 1 0 0 0 0 0 0 0 1 1 0 0 1 0 0 0 0 0

5 - CLERICAL AND

ADMINISTRATIVE 1 1

WORKERS 5 0 0 0 5 0 0 0 30 18 10 2 30 2 0 0 0 0

6 - SALES AND SERVICE

WORKERS 4 0 0 0 9 0 0 0 13 7 5 1 13 0 0 0 0 0

7 - MACHINERY

OPERATORS AND DRIVERS 0 0 0 0 9 0 0 0 9 4 5 0 9 0 0 0 0 0

2 1

8 – ELEMENTARY 3 1 14

WORKERS 8 0 0 0 2 0 0 0 350 200 8 2 350 0 0 0 0 0

2 1

7 9 21 1

TOTAL 7 0 0 0 9 0 0 0 476 248 3 5 476 2 0 0 0 0

Page 66

4.8.2 TOTAL INTERNS FUNDED BY OTHERS

OCCUPATION CATEGORY

FEMALE MALE

TO

TA

L

AGE

GROUPS

TO

TA

L A

G E

PWD

NO

N-

SA

A C I W A C I W

35

and

belo

w

35 -

55

> 5

5

A C I W

2 – PROFESSIONALS 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

3 - TECHNICIANS AND TRADE WORKERS

1 0 0 0 0 0 0 0 1 1 0 0 1 0 0 0 0 0

4 - COMMUNITY AND PERSONAL SERVICE WORKERS

1 0 0 0 0 0 0 0 1 1 0 0 1 0 0 0 0 0

5 - CLERICAL AND ADMINISTRATIVE WORKERS

9 0 0 0 0 0 0 0 9 9 0 0 9 0 0 0 0 0

6 - SALES AND SERVICE WORKERS

2 0 0 0 2 0 0 0 4 4 0 0 4 0 0 0 0 0

7 – MACHINERY 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

OPERATORS AND DRIVERS 8 – ELEMENTARY WORKERS 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

1 TOTAL 3 0 0 0 2 0 0 0 15 15 0 0 15 0 0 0 0 0

4.8.3 TOTAL INTERNS FUNDED BY THE LGSETA

OCCUPATION CATEGORY

FEMALE MALE

TO

TA

L

AGE

GROUPS

TO

TA

L A

GE

PWD

NO

N -

SA

A C I W A C I W

35

and

belo

w

35 -

55

>5

5

A C I w

2 – PROFESSIONALS 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

3 - TECHNICIANS AND TRADE WORKERS

0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

4 - COMMUNITY AND PERSONAL SERVICE WORKERS

0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

5 - CLERICAL AND ADMINISTRATIVE WORKERS

0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

6 - SALES AND SERVICE WORKERS

0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

7 – MACHINERY OPERATORS AND DRIVERS

0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

8 - ELEMENTARY WORKERS

0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

TOTAL 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

Page 67

4.8.4 TRAINING BENEFICIARIES – EMPLOYEES

OCCUPATION CATEGORY

FEMALE MALE

TO

TA

L

AGE

GROUPS

T

TO

TA

L A

GE

PWD

NO

N –

SA

A C I W A C I W

35

and

belo

w

35 -

55

>5

5

A C I W

11 – LEGISLATORS

10 0 0 0

29 0 0 0 39 7 27 5 39 0 0 0 0 0

12 – MANAGERS 2 0 0 0 3 0 0 0 5 1 4 0 5 0 0 0 0 0

2 – PROFESSIONALS 2 0 0 0 5 0 0 0 7 2 5 0 7 0 0 0 0 0

3 - TECHNICIANS AND TRADE WORKERS

0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

4 - COMMUNITY AND PERSONAL SERVICE WORKERS

0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

5 - CLERICAL AND 1 0 0 0 3 0 0 0 14 13 1 0 14 0 0 0 0 0

ADMINISTRATIVE WORKERS

1

6 - SALES AND SERVICE WORKERS

0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

7 - MACHINERY

OPERATORS AND DRIVERS 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

8 - ELEMENTARY WORKERS

1 0 0 0 3 0 0 0 4 0 4 0 4 0 0 0 0 0

TOTAL

2

6 0 0 0

4

3 0 0 0 69 23 41

5 69 0 0 0 0 0

Page 68

4.8.5 TRAINING BENEFICIARIES – UNEMPLOYED

OCCUPATION CATEGORY

FEMALE MALE

TO

TA

L

AGE

GROUPS

TO

TA

L A

G E

PWD

NO

N-S

A

A C I W A C I W

35

and

belo

w

35

- 55

>

>5

5

5

A C I W

1 9 0 2 11 – LEGISLATORS 7 0 0 0 3 0 0 0 200 112 68 0 200 0 0 0 0 0

12 – MANAGERS 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

2 – PROFESSIONALS 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

3 - TECHNICIANS AND TRADE WORKERS 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 4 - COMMUNITY AND PERSONAL SERVICE WORKERS 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

5 - CLERICAL AND ADMINISTRATIVE WORKERS 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

1 6 - SALES AND SERVICE 9 4 14 6 WORKERS 8 0 0 0 2 0 0 0 240 25 8 7 240 0 0 0 0 0 7 - MACHINERY OPERATORS AND DRIVERS 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

8 - ELEMENTARY WORKERS 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

2 1 9 4 21 8 TOTAL 5 0 0 0 5 0 0 0 440 137 6 7 440 0 0 0 0 0

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INFORMATION AND COMMUNICATION TECHNOLOGY

In this unit, there is only one ICT Officer and one ICT Assistant that deals with information

technology for the whole organization; they are also assisted by an external service provider that

has appointed by the Municipality

ADMINISTRATION AND REGISTRY

Administration and Registry is a unit that deals with the general administration of the

municipality. It involves Registry which is solely responsible for records keeping and disposal to

create space for the new records .This is where all incoming and outgoing mail is recorded.

Fleet management is also part of general administration which with management of municipal

fleet to promote effective and efficient service delivery. Our municipality has got one reception

area to direct internal and external communication.

Our Registry has got a challenge water leaking from the roof as well as from the ground which

makes it difficult for the employees to perform their duties during the rainy season. It is also

unhealthy for the documents kept in the registry in the sense that they get damaged. The

management has proposed establishment of a new registry office to protect documents and

employees. There is also a shortage of municipal fleet to satisfy all municipal service delivery

programmes and projects.

DEPARTMENT OF SOCIAL AND ECONOMIC DEVELOPMENT SERVICES

The Department comprises of the following units namely: Thusong Centre, Special Programmes unit, Animal Pound and Cemeteries, Local Economic Development (LED), Tourism and Public

Participation. These units are the face of the municipality when it come s to service delivery in the community although we still have some challenges regarding resourcing in terms of financial, physical and human resource. There is still a shortage of resources to effectively deliver services to the community as well as budget constraints.

ANIMAL POUND AND CEMETERIES

This is the unit that deals with collection of stray animals from public roads and towns for

protection and safe keeping in the animal pound. On arrival at the animal pound all stray animals

get registered in the register. They are well taken care of by the animal pound staff for a period

legislated in the Act No 3 of 2006 as well as Animal By Laws. On release of the animals they are

all paid for and receipts are issued by Cashier.

Cemeteries are but one part of the unit. The municipality has got two cemeteries namely Mkhuze

and Ingwavuma as per the requirement from KwaZulu -Natal Cemetery Act of 1996.The

municipality still has four more proposed cemeteries in the following small towns, namely Ubombo,

Jozini, Bhambanana and Ndumo. There is a shortage of human resource to support the function

and land ownership. Transport for stray animals is also a challenge.

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JOZINI THUSONG SERVICE CENTRE

The Jozini Thusong Service Centre is set within the development communication change, which

reflect a democratic approach to a public communication and information system. As it aims to put

the information needs of citizens first in the communication process, this system is to empower the

poor and disadvantaged. Jozini Thusong Service Centre is viewed as a means to operationalize the

development communication approach as well as address information and service imbalances at

local level by bringing government closer to the people.

THE FOLLOWING GOVERNMENT DEPARTMENTS OPERATE AT JOZINI THUSONG SERVICE

CENTRE WHICH WAS LAUNCH ON THE 05 MAY 2011.

DATE OF OCCUPATION NAME OF DEPARTMENT SERVICES RENDERED

JANUARY 2011 INDIPENDENT ELECTORAL COMMISSION

To render free and fair elections, also provide voter education.

APRIL 2011 DEPARTMENT OF LABOUR To provide unemployment related services and other.

MARCH 2012 DEPARTMENT OF SOCIAL DEVELOPMENT

To render developmental social welfare services to the community.

MAY 2012 SOUTH AFRICAN SOCIAL SERVICES AGENCY (SASSA)

To provide child support grant, old age grant and other related services.

THE FOLLOWING DEPARTMENTS OR INSTITUTIONS THAT RENDER MOBILE SERVICES AT

THE CENTRE.

1. SOUTH AFRICAN REVENUE SERVICE (SARS) 2. GOVERNMENT EMPLOYEE PENSION FUND (GEPF).

ACHIEVEMENTS

Since the launch of the Jozini Thusong Service Centres the community of Jozini has

experienced easy access to the most needed services.

People need not have to travel long distances to acquire government services hence the

welfare of this communities has also improved.

Page 71

CHALLENGES

1. The sustainability of the Centre is in question because of the non-availability of lease

agreements for some of this department which Impact negatively on the collection of rent.

2. Limited space at the Centre is compromising the service delivery to the community. Since all the offices are full now we are unable to attract more services to the centre.

DEPT OF LABOUR

STATS DEPARTMENT OF HOME AFFAIRS

STATS

Application UIF Ordinary 97 First issue 50

Payments (6A) 402 Passports application 06

Applications (Maternity) 07 ID Collected 109

Applications (illness) 03 Re-issue 20

Applications( Deceased) 03 Birth applications 98

Payments (UI-3) 13 LBB Application for interview 69

Payments (U-I 4) 14 Finger prints taken 106

BMD issued 30

TOTAL 539 TOTAL 488

SOCIAL DEVELOPMENT STATS SASSA STATS

Foster care placement finalized 25 Old age grant 05

Individuals benefited from social relief 84 Child support grant 19

Child placed in foster care with Section

159

01 Foster care grant 05

Clients referred to Home Affairs 07

Clients referred to SASSA 28

ECD closing functions attended by social workers

10

ECD closing function attended by social

worker

03

TOTAL 158 TOTAL 29

Public Participation Unit

Jozini Municipality has a unit called public participation unit. This unit is mainly responsible

for the day to day running of the Speaker’s offices and councillors. Its main purpose is to

build a working relationship between the council and the communities; this relationship is

through the ward councillors and the ward committees. Ward committees serve as the

vehicles of information from the council to the community and from the community to the

council. Jozini Municipality has got 20 wards and under each ward 10 ward committee

members are elected to serve on the structure.

Jozini municipality has trained all the ward committees on 8 skills development modules.

And on day to day they get support from the office of the Speaker. They are also getting

a stipend of R1000 00 each monthly for easy and smooth running of their programs in

their respective wards.

This unit has developed a public participation plan that the council adopted. This plan

plays a great deal in the IDP processes. It has also developed a ward committee support

Page 72

plan. This plan serves as a guiding document that the council needs to follows when

dealing with public participation matters.

Forums

This unit is also part and parcel of three forums under uMkhanyakude district and the province

1. Speakers Forum (where the Speakers of 5 sister municipalities meet to discuss

public participation matters since they are the champions of it.)

2. Public participation practitioner’s forum ( 5 sister municipalities under the district)

3. Provincial public participation Forum ( where all KZ municipalities meet to discuss

public participation related matters)

Community satisfactory survey

- Jozini Municipality through this Unit has conducted a community satisfaction survey in all wards.

Ward based plans

- For the IDP to be in line with provincial guide lines this Unit has developed ward based plans for each ward.

SPECIAL PROGRAMMES

The Special Programmes unit deals with a variety of programmes and forums to fast track service

delivery. The unit has a severe shortage of manpower drive different programmes such that

officials run with more than one programme to cover for the needs and demands of the

community in the surrounding. The future plan is that the municipality needs to employ more

employees to improve performance of the special programmes unit . The following are the

Special Programmes

1. HIV/AIDS PROGRAMME

This programme deals mainly with HIV/Aids pandemic that adversely affect socio-

economic conditions of people residing in our municipality and outside the jurisdiction of

the municipality. It deals with the ways and means in which to deal with the pandemic

such that different structures have been established in the municipality to deal with it.

This is done under the auspices of the National, Provincial and municipalities policies

dealing with HIV/Aids. A variety of structures exist such as Ward Aids Councils and Local

Aids Council and these structures report on a monthly basis to inform District(District

Aids Council) and Provincial reports(Provincial Aids Council)

The municipality has in consultation with other stakeholders done different activities to

advocate and promote awareness in order to combat the spread of the disease. Such

activities include Heroes Walk, Prayer Day, and World Aids day.

Operation Sukuma Sakhe (OSS) is also part of Special Programmes as initiated by the

Premier of KZN. This structure is composed of virus sector departments where they all

come together to provide for all community needs) service delivery). The Municipality fully

supports OSS through the local task team structure. Monthly reports are always submitted

to the District task team (DTT)

War rooms in all wards have been established to promote service delivery

Page 73

The Municipality has got eight different Forums that assist in the performance of the

municipality as well service delivery.

The women forum as well as youth forum have interalia performed well in satisfying

community needs

Arts & Cultural activities are fully supported by the municipality in promoting cultural values

amongst the community.

Among the activities in which the municipality participate is the Reed Dance ceremony

during the month of September and Amarula (amaganu) which is normally celebrated at

Emachobeni (isigodlo seSilo) during the month of February. We also have the growing

Sakhisizwe ingoma that is attracted many cultural groups from the District and is also

supported by the Municipality.

SALGA games

These games are usually held at different levels extending from ward level up to the

Provincial level, there is a growing number of youth that are keen to participate and develop

their talent in various sport codes. Through SALGA games they get exposed to bigger

teams.

Mayoral Cup

The Mayoral cup starts from Ward level up to the Municipal level and the Teams are

awarded for good performance.

1.PUBLIC SAFETY DEPARTMENT:

Chief Traffic officer

Mr Thabani Mthembu

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Public Safety Department

Emergency Services (Fire Fighters)

Public Safety department is divided into two sections namely: Traffic Law Enforcement and Driving Licence

1.1 TRAFFIC LAW ENFORCEMENT:

This section is responsible for the following activities:

1.1.1 General Law Enforcement e.g. Issuing of Traffic fines and Municipal Bylaws 1.1.2 Ensuring Free Flow of Traffic within the area of jurisdiction

1.1.3 Attending to Traffic Congestions, Obstructions and Accidents

1.1.4 Attending to public complains

1.1.5 Attending to Court proceeding

1.1.6 Safety and Security within the area of jurisdiction

1.1.7 General admin work and daily returns

There is a Shortage of Staff, Traffic Officers and Traffic Wardens.

Page 75

SUMMARY FOR 2013/ 2014:

Our Traffic Law enforcement section has performed the following activities during this Period:

Number of Roadblocks 20 Multidisciplinary Road with other stakeholder RTI & SAPS

Number of Fines Issued 2392 Traffic Fines were issued during this PERIOD

Number of Warrants Executed 45 Warrants were successfully executed and paid for Number of Vehicle Suspended 21 Vehicles were suspended

Number of Motorist arrested 47 Motorist were arrested for Drinking & Driving

Total Revenue Generated R 255 570.00

DRIVING LICENCE TESTING CENTRE

Jozini Driving Licence Testing Centre is responsible for the following transactions:

1.1.1 Booking and Testing the applicants for learners licences Oral & Computerised Test

1.1.2 Issuing of Learners Licences to the applicant who has passed their test

1.1.3 Renewal of Driving Licences

1.1.4 Issuing of Temporal Driving Licences

1.1.5 Conversion of International Driving Licence into RSA Driving Licences

1.1.6 Application and issuing of Professional Driving Permits

1.1.7 Application for Traffic Register number

1. BOOKING

ITEMS

LEARNERS LICENCE BOOKINGS

DRIVERS LICENCE CARD RENEWALS AND PRDP RENEWALS

APPLICATION OF PRDP

2. LEARNERS LICENCES

DISCRIPTION NUMBER ORAL NO. OF

APPLICATIONS

2114 40

PASSED 995 33 FAILED 1038 7 FTA 81 0

Page 76

3. DRIVERS LICENCE RENEWALS

DRIVERS LICENCE CARD& PRDP RENEWALS

1348

PRDP APPLICATION 681 TEMPORAL DRIVERS LICENCE ISSUED

660

LEANERS LICENCE DUPLICATES 50 AMOUNT GENERATED R 877 240.00

4.9 Jozini Library Services Information Literacy

Inter- Library Loan

Short Loans

Mobile Library

E-learning

Video Library

Book Club

Gaming @ Library

Page 77

1. Information Literacy

Its contains information resource such as: dictionaries

: Encyclopedias

: Atlases

: Books

: Periodicals

: Maps

: Internet

: Archived materials

Legal and ethical use of materials : Copyright act

: Plagiarism

Displays & Exhibitions: eye catching with relevant topics/ subjects

Library Orientation, covers the following : In-house activities

: References

: Library orientation vide

2. E-learning

To retrieve on-line learning materials (include old exam papers)

To develop the use of educational technology tools

To help on development of patrons in educational use of technology strategies and tools

Helping patrons on how to electronic mails and other social networks

Library user doing online searching

Below is one of our regular user at Jozini library learning basic computer skills, she is taught by

library Cyber Cadet.

We also had students from Unisa who doing online registration (+/-200). We also had +/-150

students of North West (open learning programme) who were doing online examinations. 10

learners were assisted to apply online in NFSAS bursary scheme

Page 78

Library assistant with grade 6 learners during the outreach programme at Majozini Primary

School. He encourages the learners about importance of education. The visits took place in

June 2014.

Page 79

Library during opening hours

TEACHERS FROM DIFFERENT SCHOOLS ARE ALSO PART OF OUR LIBRARY

Ms. Anitta van der Merwe (Jozini Primary School) visited our library to check library materials for her

school projects.

Library during open hours

Library users during weekends whereby local school visits the library to do their school

project, the picture below shows library patrons during examination period in November

2014. Most of the patrons were grade 12 learners.

Page 80

3. Video Library

Video tapes of variety subjects for purpose of learning, teaching, research and recreation.

Big screen viewing for bigger groups. (book in advanced members only)

Headphones for individual usage also available

In October 2014 Mhlekazi Primary School visited library to use these facilities about 160

learners whereby library orientation programme, which includes the services that are being

provided by Jozini Library

4. Short Loans

This is for specifically academic students and grade 12 learners. These materials are tertiary

books, journals CD ROMs etc.

Duration of these materials on has the maximum of 2 days

5. Inter –Library Loan

It’s the request of the material from other sister libraries, academic libraries, regional depot

and reference depot.

Its take 2 weeks to receive books from these libraries

It has the duration of 4 weeks to patron

NB: no payments for this services

6. Mobile Library

Information literacy training in local schools

Marketing and promoting of library services

Database searches

General enquiries

7. Gaming @ your Library

Below picture are Imbuyiselo Primary School learners doing the following activities in

the library as part of ECD (early childhood development)

Color-in activity

Informative snake & ladder

Story telling

Page 81

Book club

Reading club ( encourages culture of reading & writing in the community)

It also encourages study groups amongst learners

It also helps socio development on literacy among its members

Fun reading activities are also encouraged

Photocopying & printing

Photocopying & printing for patrons are done

Copyright

All users who make photocopies are expected to adhere to the SA Copyright Act 98 of 1978 (as

amended). Complying with copyright law at self-service machines is the responsibility of the library

user and not the Library

"Plagiarism is the theft and use of the ideas, material and other intellectual property of others

that are passed off as one’s own.

Page 82

13. Information Communication Technology

Cyber cadet (Mr Sihle Zulu) helps the general community members to understand the

technological concepts of computers such as Wi-fi, social networks, internet etc

Cyber cadet also teach the organized groups basic computer skills i.e MS Word, Excel &

Power Point

The picture below shows Jozini library during school visits at Ifalethu High School in

KwaJobe area. Library staff visited Zwilenkosi Secondary School and Siqakatha Primary

School as part of community outreach.

CAO forms and tertiary handbooks were given to grade 12 learner and other educational

activities were done with learners. We also assist the learners on how access information

easily at Jozini Public library.

Page 83

Library Outreach Programme

Library material usage

During the period of 2013/ 2014 in Jozini, the library usage by patrons increased, in

particular the youth on non-fiction section and adult section, and some members of the

community are doing distance learning education

Page 84

Library also provides career guidance in particular on grade 12 learners on the

following fields by providing information in these fields

Engineering –aeronautical, agricultural engineer, biomedical engineer, chemical engineer,

civil engineer, electrical engineer, industrial engineer, information engineer, mechanical

engineer, metallurgical engineer, mining engineer & artisan

Mathematics -actuary, bio-methematician, chartered accountant, cost estimator, computer

system analyst, lecturer, insurer, statistician, meteorologist, software engineer, research

scientist & teacher

Earth sciences -climatologist, ecologist, geologist, rock engineer, paleontologist,

oceanographer, soil scientist, water & environmental scientist

Other –librarian, lawyer, police, nurse, social worker, doctor, IT officer, psychologist,

therapist, pharmacist, school teacher, administrators, civil engineer, millwright, welder etc

Mini Library for Blind

On the 14th October 2014 Ms Lindiwe Chirwa from South African Library for Blind

trained 8 blind people did training on how to use Victor Reader Machine, Document

Reader, Braille Books . These are local people who have sight impaired.

NB : library provide braille books, Victor machine and talking books for blind people.

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Page 85

New Books

In 2014 about 1300 new books that were received from Department of Arts & Culture, on the

following classes.

Zulu Fiction books , Adult Afrikaans Fiction books , Adult English Fiction books , Young Adult

English Fiction book , Large Print English fiction was , Large Print Afrikaans was , Easy

Reading English were , Picture books were , Juvenile English Fiction were , Juvenile Zulu

Fiction was , Non Fiction books were ( incl. academics books ), DVD .

Challenges

Satisfying the information needs of the community

Reaching out to the marginalized sectors of our community.

Consistent update of the community and organizations about library matters

Latest editions of academic books

Library staff structure

Librarian

Library assistant

Library assistant

General worker

(cleaner)

General worker

(cleaner)

General worker

(gardener)

Library Cyber Cadet

Page 86

Jozini Public Library

DISASTER MANAGEMENT UNIT.

Disaster management deals mainly with incidents that occur in various communities within the

jurisdiction of the municipality and it comprises of Disaster management and Fire Fighters. There is

one Disaster Officer, and eight (8) Fire Fighters to assist the municipality in case of incidents. The

unit has minimal resources to manage disaster incidents and this supposes that we need a well-

resourced store room with highly skilled human resource to face the ever increasing disaster

incidents as well as to keep relief stock. Awareness campaigns during IDP processes are conducted

to educate communities about disaster issues and how to survive disasters as well as veld fires and

drowning. The municipality is sensitive and normally respond positively to disaster incidents to

support the affected communities .The Department of Cooperative Governance and Traditional

Affairs (Cogta) and District municipality also support the municipality to deal with incidents. They

also provide capacity building.

Page 87

DISASTER INCIDENTS

ward 14 veld fire ward 11 candle fire

Ward 13 unknown cause Ward 5 candle fire

Ward 9 fire incident ward 13 unknown cause of fire

ward 2 fire incident Ward 2 fire incident

Page 88

Ward 2 affected room Ward 2 survived and affected room

Ward 14 affected room Ward14 affected and survived room

Ward 8 affected room Ward 8 survived rooms

Ward 18 affected room ward 18 affected room and place

Ward 18 affected room ward 18 survived rooms

Page 89

Ward 18 affected room and survived room

Ward 18 affected area by veld fire ward 18 affected area

Ward 17 damaged house by unknown cause of fire

Ward 5, Gina family affected by house fire and four children died on the spot

Ward4, Nkwanyana family affected by house fire. There was no injury

Page 90

LOCAL ECONOMIC DEVELOPMENT (LED)

Local Economic Development comprises of three focus areas, namely Agriculture, Tourism and

Business to improve the socio economic conditions of the people and eradicate poverty. It is the

cornerstone for creating a conducive environment for economic growth of the municipality. Programmes

that compose the unit are Poverty Alleviation projects that are implemented in all wards, Tourism

projects and programmes and Business development programmes.

In Tourism projects and programmes there is Tourism awareness, Community Tourism organisations,

Tourism Fora and Tourism marketing and Promotion under the Business and development programme

we have Cooperative development and support, SMME’s and the Informal Economy

The unit is composed of five staff members and three Interns. The challenge faced by the unit regarding

catalytic projects is funding.

There are challenges that impact negatively on performance of the unit such as capacity building

programme, shortage of human resource.

The future plans are to source funding and organize capacity building programmes as well as filling all

the vacant positions.

Page 91Page 91

CHAPTER 5 – FINANCIAL PERFORMANCE

5.1 FINANCIAL INFORMATION

Page 92

The surplus for the year is R15,973,719. This represents a 42% decrease when compared to

the previous year. The significant decrease is primarily due to 232% increase in repairs and

maintenance .The Municipality engaged in renovation of halls . Another notable increase in

expenses is general expenses which constitute among other expenses, poverty alleviation

projects of R12,000,000. Employee related costs decreased from R30,465,754 to R29,730,493

in the current year.

GRANTS

The municipality has received grant funding from the National Treasury as well as COGTA.

These grants can be classified as follows: Non-Conditional Grant, Equitable Share and Conditional Grants

(i) Municipal Infrastructure Grant (ii) Finance Management Grant (iii) Municipal Systems Improvement Grant (iv) Small Towns Rehabilitation Grant (v) Sports field Maintenance Grant (vi) Fresh Produce Market (vii) Library Grant (viii) Expanded Public Works Programme (ix) Department of Human Settlement (x) National Electrification Program Grant (xi) Sports and Recreation

The following unspent grants remain liabilities but the project was completed and an application was submitted to COGTA to utilize the balance of funds for the project of the similar nature, and will be followed up.

(i) Area 17 water schemes (ii) Ndumo Sportsfield (iii) Establishment of internal control unit (iv) Ward committee induction meeting (v) Municipal housing sector plan (vi) Jozini upgrading project (vii) Jozini value adding (viii) Bhambanana town formalization (ix) Synergistic approach (x) Ubuhle besiko cultural village (xi) Bhajana Road (xii) Umnothophansi Ndumo and maize milling project (xiii) Library grant (xiv) IDP Grant (xv) Development of recycling centre (xvi) LG Expert (xvii) DBSA Contribution (xviii) Implementation of pound (xix) Supply of solar, water, and gyser (xx) Housing Grant

Page 93

The total unspent grants with no movement from the last financial year amounts to R2 896 605

With the exception of MSIG, FMG and electrification; most of grants were spent to 100% as at 30 June 2014. This is a huge

improvement within the municipality. The 100% expenditure on the MIG grant specifically speaks directly to improved service

delivery.

Figures in Rand 2014 2013

Government grants and subsidies

Operating grants

Equitable share 83 913 176 70 314 944 FMG 1 601 754 1 636 381 Fresh produce market 632 331 780 196 LGWSETA - 317 128 Library grant 1 081 683 1 150 116 MSIG 870 860 939 095 Supply of water - 1 753 097 School crossing - 13 740 Synergetic services - 3 658 Jozini Town formalization 2 163 599 849 236 Implementation of KZN Pound Act 23 102 775 558 EPWP Department of Human Settlement

1 000 000 1 142 590

- -

91 286 505 78 533 149

Capital grants

National Electrification Program Grant

4 449 504

7 385 690 MIG 31 761 175 32 495 354 Sports and Recreation 2 487 331 6 773

38 698 010 39 887 817

129 984 515 118 420 966

Performance on Grant Expenditure

GRANT PERCENTAGE OF BUDGET SPENT

MSIG 98%

FMG 97%

EPWP 100%

LIBRARY 75%

MIG 100%

INEG 52%

Page 94

UNSPENT GRANTS

Figures in Rand 2014 2013

Unspent conditional grants and receipts

Unspent conditional grants and receipts comprises of:

Unspent conditional grants and receipts

Housing grant 83 492 83 492 MIG - 81 364 Area 17 water scheme 521 807 521 807 Ndumo sport field 721 230 1 203 736 Internal control unit 150 000 150 000 Ward committee induction training 23 355 23 355 Municipal housing sector plan 11 775 11 775 Jozini upgrading projects 107 606 107 606 Fresh produce market 234 683 867 014 Bhambanana town formalization 69 365 69 365 Synegistic program 7 224 7 224 Ubuhle besiko cultural village 69 700 69 700 Bhanjana road 624 412 624 412 Umnothophansi 1 184 150 1 184 150 Library grant 222 306 416 789 IDP Grant 240 240 MSIG 19 140 269 FMG 48 246 404 National electrification grant 164 807 9 671 450 Development of recycling centre 10 730 10 730 LG Expert 22 384 22 384 Jozini town formalization 1 758 152 3 921 752 DBSA contribution for plan 10 365 10 365 Implemantation of pound 51 652 74 754 Supply of solar water gyser 2 312 102 2 312 102

8 428 923 21 446 239

Above is the list of unspent grants for 2013 2014 and 2014 2015.

5.2 DEBTORS

Debtors have increased from the prior year; 2013. Debt collection is still a problem within the municipality

emanating from a general culture of none payment within the South African Communities. A vast majority of

the municipality’s debtors are businesses, individual households and Ingonyama Trust Board.

The municipality is grappling with generating its own revenue and hence relies heavily on grants.

Land under the jurisdiction of Jozini Municipality is owned by the Ingonyama Trust Board and

ratepayers are reluctant to pay and are complaining of having to pay both the ITB and the

Municipality. We are in a process of developing a revenue enhancement strategy to enhance our

self-generated revenue, we will also embark on a process of data cleansing exercise and

thereafter we will consider engaging the services of the debt collector to improve our collection

rate.

Page 95

Figures in Rand 2014 2013

Receivables from exchange transactions

Trade debtors 11 305 756 10 643 030 Rentals debtors 943 926 520 716 Allowance for debt impairment (12 109 203) (8 369 308)

140 479 2 794 438

Receivables from non-exchange transactions

Rates Debtors

35 591 317

25 832 003 Councilors Debtors 9 000 9 000 Staff Debtors 3 832 3 832 Traffic Debtors 943 650 - Allowance for debt impairment (29 784 096) (20 148 962)

6 763 703 5 695 873

Rates Current (0 -30 days)

2 231 725

1 619 775

31 - 60 days 1 255 777 911 437 61 - 90 days 1 168 981 848 441 91 - 120 days 2 102 810 1 526 209 121 - 365 days 28 832 024 20 926 141

35 591 317 25 832 003

Refuse removal Current (0 -30 days)

263 426

379 947

31 - 60 days 13 332 213 794 61 - 90 days 157 225 199 017 91 - 120 days 284 178 197 444 121 - 365 days 408 085 3 986 873 > 365 days 12 746 137 5 665 955

13 872 383 10 643 030

Councillors debtors > 365 days

3 832

3 832

Summary of debtors by customer classification

Balance at beginning of the year

(20 148 962)

(9 702 735) Contributions to allowance - (10 446 227)

VAT receivable

VAT

1 511 623

2 502 866

Page 96

TOP 5 DEBTORS

Account Number Property Describtion Balance

405001162 Ingonyama Trust- Trustees R 6 531 768.78

405001161 Ingonyama Trust-Trustees R 4 496 679.34

405001155 Ingonyama Trust-Trustees R 2 117 706.23

508031016 Regional Land Affairs R 1 602 413.59

600020035 Tiger Lodge R 1 361 161.79

ASSESSMENT BY THE ACCOUNTING OFFICER ON ANY ARREARS ON MUNICIPAL

TAXES AND SERVICE CHARGES

Jozini Municipality will embark on strategies to enhance revenue and improve collection to

eliminate long outstanding debts. More than 70% of the outstanding debtors are more than 180

days in age.

The municipality will engage strategies and the services of debt collectors in order to recoup the

long outstanding debts. This will somewhat improve revenue collection.

5.4 SUPPLY CHAIN MANAGEMENT

The supply chain Management Policy was not in line with Treasury Regulations and hence some of the

Municipality procurements were irregular. We have revised the supply chain policy, with the assistance

of Provincial Treasury to align it to Treasury regulations in particular the thresholds. Bid committees

were also not properly constituted and we have reshuffled especially the Bid Adjudication Committee.

We have also embarked on the intensive training and workshop that relates to SCM compliance issues

for Councillors and Officials to ensure the procurement processes that is in line with SCM Regulations

and policies. The SCM registers will be updated on the monthly basis and also proper control will be

put in place to curb irregular, fruitless &wasteful expenditure and unauthorized expenditure. The

information will be submitted to Council for noting and a formal application for condonation will be

lodged with the MEC for COGTA.

Page 97

5.5 GRAP COMPLIANCE In the current year, the municipality has adopted the following standards and interpretations that are effective for the current financial year and that are relevant to its operations:

Standard/ Interpretation:

Effective date:

Years beginning on or after

• GRAP 25: Employee benefits 01 April 2013

• GRAP 1 (as revised 2012): Presentation of

Financial

01 April 2013

Statements

• GRAP 3 (as revised 2012): Accounting Policies,

Change in

01 April 2013

Accounting Estimates and Errors

• GRAP 9 (as revised 2012): Revenue from

Exchange

01 April 2013

Transactions

• GRAP 13 (as revised 2012): Leases 01 April 2013

• GRAP 16 (as revised 2012): Investment Property 01 April 2013

• GRAP 17 (as revised 2012): Property, Plant and

Equipment

01 April 2013

• GRAP 31 (as revised 2012): Intangible Assets

(Replaces

01 April 2013

GRAP 102)

• IGRAP16: Intangible assets website costs 01 April 2013

•

87IGRAP1 (as revised 2012):Applying the

probability test on initial recognition of revenue

01 April 2013

The municipality has not applied the following standards and interpretations, which have been published and are mandatory for the municipality’s accounting periods beginning on or after 01 July 2014 or later periods:

Standard/ Interpretation: Effective date:

Years beginning on or after

GRAP 20: Related parties 01 April 2014

GRAP108: Statutory Receivables 01 April 2015

Page 98

5.6 CASH FLOW MANAGEMENT

Cash Flow Statement

Figures in Rand Note(s) 2014 2013

Restated*

Receipts

Sale of goods and services 1 296 735 1 992 983 Grants 126 097 766 118 497 743 Interest income 2 011 226 2 715 312 Other receipts 17 948 333 14 982 460

147 354 060 138 188 498

Payments

Employee costs (37 355 859) (40 245 884) Suppliers (61 449 213) (7 321 860) Finance costs (125 000) (470 125) Other payments (11 379 604) (12 852 783) Other cash item (12 153 222) (23 824 281)

(122 462 898) (84 714 933)

Net cash flows from operating activities 25 24 891 162 53 473 565

Cash flows from investing activities

Purchase of property, plant and equipment

6

(46 278 954)

(60 768 924)

Proceeds from sale of property, plant and equipment 6 - 591 690 Purchase of other intangible assets 7 (77 510) (233 139)

Net cash flows from investing activities (46 356 464) (60 410 373)

Cash flows from financing activities

Deposit & Refund

18 044

-

Net increase/(decrease) in cash and cash equivalents

(21 447 258)

(6 936 808)

Cash and cash equivalents at the beginning of the year 30 088 577 37 025 385

Cash and cash equivalents at the end of the year 5 8 641 319 30 088 577

Page 99

Cash and cash equivalents has decreased from R30, 088,577 to R8,641, 319 in the current year. This is primarily due to an increase in payments to suppliers from R7, 321,860 to R61,449,213 in the current year. 5.7 ASSET MANAGEMENT

Each Head of Department is responsible for the safe keeping of any fixed asset controlled by

his or her Department. The Budget and Treasury office is responsible for keeping a fixed asset

register which has all details of the assets of the Municipality. The Municipality has employed

an Asset Management Officer who is responsible for updating the fixed asset register. The

asset Management officer reports to the Manager for Reporting and compliance, who in turn

reports to the Chief Financial Officer. The Municipality has consultants, AB projects, who

assist the Municipality in among other things, the valuation of assets and keeping an updated

and GRAP compliant fixed asset register. The Municipality is also guided by the its asset

management policy on issues related to assets, particularly the recognition of assets,

procedures to be followed in a case of a loss, theft, destruction or impairment of assets.

All the fixed assets of the Municipality are insured by Indwe Risk.

5.8 CREDITORS

To ensure efficiency in payment of creditors, the municipality pays twice per month, the 15th

and 30th of every month to comply with section 65 of the MFMA.

Page 100

CHAPTER 6 – AUDITOR GENERAL REPORT

AUDIT OPINION

The Municipality has regressed from an unqualified with findings audit opinion to a

disclaimer audit opinion. An action plan to address audit findings has been developed

and it’s attached and we have already started with the implementation to improve the

audit outcome. Our target is an improved audit opinion in the year 2014/2015.

REPORT OF THE AUDITOR-GENERAL TO THE KWAZULU – NATAL PROVINCIAL

LEGISLATURE AND COUNCIL ON JOZINI MUNICIPALITY

REPORT ON THE FINANCIAL STATEMENTS

Introduction

1. I was engaged to audit the financial statements of the Jozini Municipality set out on pages 6 to 46, which comprise the statement of financial position as at 30 June 2014, the statement of financial performance, statement of changes in net assets, the cash flow statement and the statement of comparison of budget information with actual information for the year then ended, and the notes, comprising a summary of significant accounting policies and other explanatory information.

Accounting officer’s responsibility for the financial statements

2. The accounting officer is responsible for the preparation and fair presentation of the financial statements in accordance with the South African Standards of Generally Recognised Accounting Practice (SA Standards of GRAP) and the requirements of the Local Government: Municipal Finance Management Act of South Africa, 2003 (Act No. 56 of 2003) (MFMA) and the Division of Revenue Act of South Africa, 2013 (Act No. 2 of 2013) (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.

Auditor-General’s responsibility

3. My responsibility is to express an opinion on the financial statements based on conducting the audit in accordance with the Public Audit Act of South Africa, 2004 (Act No. 25 of 2004) (PAA), the general notice issued in terms thereof and International Standards on Auditing. Because of the matters described in the basis for disclaimer of opinion paragraphs, however, I was unable to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion.

Basis for disclaimer opinion

Property, plant and equipment

4. The municipality did not review the residual values and useful lives of property, plant and equipment (PPE) in accordance with GRAP 17 Property, plant and equipment. Consequently, PPE stated at R212,39 million and its related expenditure was misstated by an undetermined amount. I was not able to determine the correct net carrying amount of PPE, as it was impracticable to do so.

Page 101

Revenue from non-exchange transactions

5. I was unable to obtain sufficient appropriate audit evidence that management had properly accounted for all grant revenue for the current and prior year, due to the status of the accounting records. I was unable to confirm the grant revenue by alternative means. Consequently, I was unable to determine whether any adjustment to grant revenue stated at R131,13 million and the related unspent conditional grant liability stated at R8,43 million in the financial statements was necessary.

6. The municipality did not recognise all outstanding amounts meeting the definition of revenue, in accordance with GRAP 23 Revenue from non-exchange transactions. As the municipality did not maintain adequate records of property rates charged, I was not able to determine the full extent of the misstatement of revenue, as it was impracticable to do so.

Irregular expenditure

7. The municipality made payments in contravention of the supply chain management requirements that were not included in irregular expenditure amounting to R93,04 million in note 27 to the financial statements. As the municipality did not have adequate controls in place and did not maintain complete records and schedules, misstatements were identified during the audit. These misstatements were not adequately adjusted and no evidence was provided that the entire population had been evaluated. I was not able to determine the full extent of the impact on irregular expenditure, as it was impracticable to do so.

Expenditure

8. I was unable to obtain sufficient appropriate audit evidence that management had properly accounted for all expenditure for the current year, due to the status of the accounting records. I was unable to confirm the expenditure by alternative means. Consequently, I was unable to determine whether any adjustment to expenditure stated at R75,14 million in the financial statements was necessary.

Employee Costs

9. System errors resulted in material differences between the payroll system, general ledger, trial balance and the financial statements of the municipality Consequently, I was unable to confirm whether the financial statements are fairly presented due to the effect of the errors. Furthermore, I was unable to obtain sufficient appropriate audit evidence that management had properly accounted for all employee costs for the current year, due to the status of the accounting records. I was unable to confirm the employee costs by alternative means. Consequently, I was unable to determine whether any adjustment to employee costs stated at R29,73 million in the financial statements was necessary.

Payables

10. The municipality did not recognise all outstanding amounts meeting the definition of a liability, in accordance with GRAP 1 Presentation of financial statements. As the municipality did not maintain adequate records of retentions held at year-end. Consequently, retentions of R14,51 million disclosed as part of payables in note 8 to the financial statements was misstated by an undetermined amount. I was not able to determine the full extent of the misstatement of payables, as it was impracticable to do so.

Page 102

Receivables and impairment

11. Included in trade receivables is an impairment provision of R41,89 million as disclosed in note 2 and 3 to the financial statements, which does not agree to the schedule amounting to R43,07 million. The municipality did not calculate the provision based on the risk profile of each debtor. I was unable to confirm the impairment provision by alternative means. Consequently I was unable to determine whether any adjustment to the trade receivables stated at R 6,90 million in the financial statements was necessary.

12. The municipality did not recognise value added tax (VAT) on the accrual basis as required by GRAP 1 Presentation of Financial Statements. VAT was incorrectly recognised on the payments basis. As the municipality did not maintain adequate records of VAT, I was not able to determine the full extent of the misstatement of receivables, as it was impracticable to do so.

Commitments

13. I was unable to obtain sufficient appropriate audit evidence that management had properly accounted for all commitments for the current year, due to the status of the accounting records. I was unable to confirm the commitments by alternative means. Consequently, I was unable to determine whether any adjustment to commitments stated at R4,15 million in note 34 to the financial statements was necessary.

Employee benefit obligation

14. I was unable to obtain sufficient appropriate audit evidence that management had properly accounted for the employee benefit obligation, due to the status of the accounting records as information was not provided to support the valuation calculation prepared by the management expert. I was unable to confirm the employee benefit obligation, by alternative means. Consequently, I was unable to determine whether any adjustment to the employee benefit obligation, stated at R1,30 million in the financial statements was necessary.

Disclaimer of opinion

15. Because of the significance of the matters described in the basis for disclaimer of opinion paragraphs, I have not been able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion. Accordingly, I do not express an opinion on the financial statements.

Additional matter

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

Unaudited disclosure notes

17. In terms of section 125(2)(e) of the MFMA the municipality is required to disclose particulars of non-compliance with the MFMA. This disclosure requirement did not form part of the audit of the financial statements and accordingly I do not express an opinion thereon.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

18. In accordance with the PAA and the general notice issued in terms thereof, I report the following findings on the reported performance information against predetermined objectives for selected objectives presented in the annual performance report, non-compliance with legislation as well as internal control. The objective of my tests was to identify reportable findings as described under each subheading but not to gather evidence to express assurance on these matters. Accordingly, I do not express an opinion or conclusion on these matters.

Page 103

Predetermined objectives

19. I performed procedures to obtain evidence about the usefulness and reliability of the reported performance information for the following selected objectives presented in the annual performance report of the municipality for the year ended 30 June 2014:

KPA2: Improved Service Delivery and Infrastructure Investment

KPA3: Sustainable Economic Development.

KPA5: Municipal Financial Viability and Management.

KPA6: Spatial Planning and Environmental Management.

20. I evaluated the reported performance information against the overall criteria of usefulness and reliability.

21. I evaluated the usefulness of the reported performance information to determine whether it was presented in accordance with the National Treasury’s annual reporting principles and whether the reported performance was consistent with the planned objectives. I further performed tests to determine whether indicators and targets were well defined, verifiable, specific, measurable, time bound and relevant, as required by the National Treasury’s Framework for managing programme performance information (FMPPI).

22. I assessed the reliability of the reported performance information to determine whether it was valid, accurate and complete.

23. The material findings in respect of the selected objectives are as follows:

Improved Service Delivery and Infrastructure Investment, Sustainable Economic

Development, Municipal Financial Viability and Management and Spatial Planning

and Environmental Management

Usefulness of reported performance information

Consistency of objectives, indicators and targets

24. Section 41(c) of the Municipal Systems Act, 2000 (Act No. 32 of 2000 (MSA) requires the integrated development plan (IDP) to form the basis for the annual report, therefore requiring consistency of objectives, indicators and targets between planning and reporting documents. A total of 100% of the reported objectives, indicators and targets were not consistent with those in the approved IDP. This was due to senior staff at the municipality not being aware of the contents of the IDP, their responsibilities in terms of performance reporting and the lack of understanding and implementation of the performance management system, MSA and the National Treasury Framework for Managing Programme Performance Information (FMPPI).

Page 104

Measurability of indicators and targets

Performance targets not specific, measurable and time bound and indicators not

well defined and verifiable

25. The FMPPI requires the following:

Performance targets must be specific in clearly identifying the nature and required level of performance. A total of 100% of the targets were not specific.

Performance targets must be measurable. I could not measure the required performance for 100% of the targets.

The period or deadline for delivery of targets must be specified. A total of 100% of the targets were not time bound.

Performance indicators must be well defined by having clear data definitions so that data can be collected consistently and is easy to understand and use. A total of 100% of the indicators were not well defined.

Performance indicator must be verifiable, meaning that it must be possible to validate the processes and systems that produced the indicator. A total of 100% of the indicators were not verifiable.

26. This was due to a lack of proper systems and processes and formal standard operating procedures or documented system descriptions.

Relevance of indicators

Performance indicators not relevant

27. The FMPPI requires indicators to relate logically and directly to an aspect of the auditee’s mandate and the realisation of strategic goals and objectives. A total of 100% of the indicators did not relate logically and directly to an aspect of the auditee’s mandate and the realisation of strategic goals and objectives as per the five-year IDP. This was because proper performance planning and management practices had not been developed and implemented to provide for the development of performance indicators and targets included in the IDP.

Reliability of reported performance information

Validity, accuracy and completeness

28. The FMPPI requires auditees to have appropriate systems to collect, collate, verify and store performance information to ensure valid, accurate and complete reporting of actual achievements against planned objectives, indicators and targets. I was unable to obtain the information and explanations as to the selected indicators and targets I considered necessary to satisfy myself as to the reliability of the reported performance information. The auditee’s records did not permit the application of alternative audit procedures. This was due to limitations placed on the scope of our work by the absence of information systems, lack of proper record keeping and no employee responsible for managing performance information.

Additional matter

29. I draw attention to the following matter below. This matter does not have an impact on the predetermined objectives audit findings reported above.

Page 105

Achievement of planned targets

30. Refer to the annual performance report on pages 3 to 8 of the annual report for information on the achievement of the 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 for the selected objectives reported in paragraphs 3 to 8 of this report.

Compliance with legislation

31. I performed procedures to obtain evidence that the municipality had complied with applicable legislation regarding financial matters, financial management and other related matters. My findings on material non-compliance with specific matters in key legislation, as set out in the general notice issued in terms of the PAA, are as follows:

Strategic planning and performance management

32. The annual performance report for the year under review did not include a comparison with the previous financial year as required by section 46 (1) (b) of the MSA.

Annual financial statements

33. The financial statements submitted for auditing were not prepared in all material respects in accordance with the requirements of section 122 of the MFMA. Material misstatements identified by the auditors in the submitted financial statements were not adequately corrected and the supporting records could not be provided subsequently, which resulted in the financial statements receiving a disclaimer audit opinion.

Procurement and contract management

34. Sufficient appropriate audit evidence could not be obtained that goods and services with a transaction value of below R200 000 were procured by means of obtaining the required price quotations, as required by Supply Chain Management (SCM) regulation 17(a) and (c).

35. Sufficient appropriate audit evidence could not be obtained that goods and services of a transaction value above R200 000 were procured by means of inviting competitive bids, as required by SCM regulation 19(a).

36. Invitations for competitive bidding were not always advertised for a required minimum period of days, as required by SCM regulation 22(1) and 22(2).

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

38. The performance of contractors or providers was not monitored on a monthly basis, as required by section 116(2)(b) of the MFMA.

39. The contract performance and monitoring measures and methods were insufficient to ensure effective contract management, as required by section 116(2)(c) of the MFMA.

40. Persons in the service of the municipality who had a private or business interest in contracts awarded by the municipality did not disclose such interest, as required by SCM regulation 46(2)(e) and the code of conduct for councillors issued in terms of the MSA.

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Human resource management and compensation

41. Sufficient appropriate audit evidence could not be obtained that the annual report of the municipality reflected information on compliance with prescribed minimum competencies as required by the Regulations on Minimum Competency Levels regulation 14(2)(b).

42. Sufficient appropriate audit evidence could not be obtained that the competencies of financial and supply chain management officials were assessed in a timely manner in order to identify and address gaps in competency levels as required by the Municipal Regulations on Minimum Competency Levels regulation 13.

43. Sufficient appropriate audit evidence could not be obtained that the municipality submitted a report on compliance with prescribed competency levels to the National Treasury and relevant provincial treasury as required by the Regulations on Minimum Competency Levels regulation 14(2)(a).

Expenditure management

44. Sufficient appropriate audit evidence could not be obtained that payments from the municipality's bank account were approved by the accounting officer and the chief financial officer, as required by section 11(1) of the MFMA.

Conditional grants received

45. Sufficient appropriate audit evidence could not be obtained that the Municipal Infrastructure Grant (MIG), Municipal Systems Improvement Grant (MSIG) and Local Government Financial Management Grant (LGFMG) allocations, were spent in accordance with the applicable grant framework, section 16(1) of the DoRA.

Consequence management

46. Unauthorised and irregular 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)(ii) of the MFMA.

47. Irregular expenditure was not always recovered from the liable person, as required by section 32(2) of the MFMA.

48. Council certified irregular expenditure as irrecoverable without having conducted an investigation to determine the recoverability of the expenditure, in contravention of section 32(2)(a)(ii) of the MFMA.

49. Allegations of fraud, corruption, favouritism, unfair or irregular practice and failure to comply with the supply chain management system laid against officials were not investigated by the accounting officer, as required by Municipal supply chain management regulation 38(1)(b).

Waste management

50. The municipality operated their waste disposal site without a waste management licence or permit in contravention of section 20(b) of the National Environmental Management: Waste Act, 2008 (Act No. 59 of 2008) (NEMWA) and section 20(1) of the Environmental Conservation Act, 1989 (Act No. 73 of 1989).

Internal control

51. I considered internal control relevant to my audit of the financial statements, annual performance report and compliance with laws and regulations. The matters reported below under the fundamentals of internal control are limited to the significant deficiencies that resulted in the basis for disclaimer of opinion, the findings on the annual performance report and the findings on compliance with laws and regulations included in this report.

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Leadership

52. The leadership did not implement effective oversight over the review of the financial statements and annual performance report prior to submission for audit. Furthermore, compliance with laws and regulations was not effectively monitored by leadership throughout the financial year.

Financial and performance management

53. Senior management did not implement proper record keeping to ensure that information was accessible and available to support financial and performance reporting. The ineffective monitoring of compliance with laws and regulations and with municipal policies and procedures resulted in errors in daily and monthly processing and reconciling of financial and performance information. These errors were not detected and corrected on a timely basis, resulting in material misstatements in the financial statements and the annual performance report.

Governance

54. The municipality did not effectively implement the recommendations of internal audit and audit committee.

OTHER REPORT

Investigation

55. The municipality performed an investigation which covered the period 1 July 2013 to 30 June 2014. The investigation was initiated based on an allegation of possible misappropriation of the municipality’s assets. The outcome of the investigation is expected by January 2015.

Pietermaritzburg

28 November 2014

CHAPTER 7 – Annexures

ANNEXURE A – Audited Financial Statements

ANNEXURE B – Auditor General Audit Queries - Action Plan

ANNEXURE C – Organisational Scorecard

Page 108

CHAPTER 8 - ACRONYMS AND ABBREVIATIONS

AFS - Annual Financial Statements AG Auditor -General

CIP - Consolidated Infrastructure Plan COGTA Corporative Governance and

Traditional Affairs

CPMD - Certificate Programme in Management Development DOT Department Of

Transport

EXCO - Executive Committee IDP Integrated Development Plan

IGR - Intergovernmental Relations LGSETA Local Government Sectoral

Education and Training Authorities

MFMA - Municipal Finance Management Act MIG Municipal Infrastructure Grant

MSA - Municipal Systems Act MTAS Municipal Turnaround Strategy

PMS - Performance Management Systems SCM Supply Chain Management

MPAC - Municipal Public Accounts Committee SDBIP Service Delivery and

Budget Implementation Plan

SMME - Small Medium Micro Enterprise ODETD Occupation Directed Education and Training Development Programme

WSP - Workplace Skills Plan APAC Audit & Performance Audit Committee

ANNEXURE AAudited Financial Statements

Jozini Local Municipality(Registration number KZN 272)

Annual Financial Statementsfor the year ended 30 June 2014

Jozini Local Municipality(Registration number KZN 272)Annual Financial Statements for the year ended 30 June 2014

General Information

Legal form of entity Local Municipality

Nature of business and principal activities Service Delivery

Municipal Council

Executive Committee members BN Mthethwa Mayor

TS Mdluli Deputy Mayor

MZ Nyawo Speaker

PJ Mabuyakhulu Exco member

J Siyaya Exco member

DP Mabika Exco member

RH Gumede Exco member

NG Fakude Exco member

MZ Tembe Exco member

Ordinary Councillors

JE Buthelezi Ordinary councillor

BZ Mngomezulu Ordinary councillor

SM Mthembu Ordinary councillor

M Mathe Ordinary councillor

TL Mathenjwa Ordinary councillor

JM Mpontshane Ordinary councillor

TZ Nyawo Ordinary Councillor

DM Mthembu Ordinary councillor

SS Mkhize Ordinary councillor

BQ Gumede Ordinary councillor

ZB Ngobe Ordinary councillor

BI Msweli Ordinary councillor

GE Ngcamphalala Ordinary councillor

ME Ndlela Ordinary councillor

BS Mathenjwa Ordinary councillor

BN Khumalo Ordinary councillor

RN Ndlovu Ordinary councillor

TP Mbhamali Ordinary councillor

DJ Mthembu Ordinary councillor

SM Mathenjwa Ordinary councillor

IO Young Ordinary councillor

ML Mavundla Ordinary councillor

SS Macwele Ordinary councillor

GP Moodley Ordinary councillor

NL Mathenjwa Ordinary councillor

KB Madonsela Ordinary councillor

KNC Dlamini Ordinary councillor

KP Mbhatha Ordinary councillor

NS Myeni Ordinary councillor

T J Ndlanzi Chief Whip

Accounting Officer Mr L Maka

Acting Municipal Manager

Chief Finance Officer (CFO) Mr VI Gumede

Acting CFO

1

Jozini Local Municipality(Registration number KZN 272)Annual Financial Statements for the year ended 30 June 2014

General Information

Postal address Private Bag x 028

Jozini

3969

Physical address Bottom Town

Circle Street

Jozini

3969

Bankers ABSA Bank

FNB Bank

Attorneys Weich and Kriel

Preparer The annual financial statements were internally compiled by:

Mr VI Gumede

Index

The reports and statements set out below comprise the annual financial statements presented to the provincial legislature:

Index Page

Accounting Officer's Responsibilities and Approval 4

Audit Committee Report 5

Statement of Financial Position 6

Statement of Financial Performance 7

Statement of Changes in Net Assets 8

Cash Flow Statement 9

Appropriation Statement 10 - 12

Accounting Policies 13 - 24

Notes to the Annual Financial Statements 25 - 46

2

Jozini Local Municipality(Registration number KZN 272)Annual Financial Statements for the year ended 30 June 2014

Abbreviations

COID Compensation for Occupational Injuries and Diseases

CRR Capital Replacement Reserve

DBSA Development Bank of South Africa

SA GAAP South African Statements of Generally Accepted Accounting Practice

GRAP Generally Recognised Accounting Practice

GAMAP Generally Accepted Municipal Accounting Practice

HDF Housing Development Fund

IAS International Accounting Standards

IMFO Institute of Municipal Finance Officers

IPSAS International Public Sector Accounting Standards

ME's Municipal Entities

MEC Member of the Executive Council

MFMA Municipal Finance Management Act

MIG Municipal Infrastructure Grant (Previously CMIP)

3

Jozini Local Municipality(Registration number KZN 272)Annual Financial Statements for the year ended 30 June 2014

Accounting Officer's Responsibilities and Approval

The accounting officer is required by the Municipal Finance Management Act (Act 56 of 2003), to maintain adequateaccounting records and is responsible for the content and integrity of the annual financial statements and related financialinformation included in this report. It is the responsibility of the accounting officer to ensure that the annual financial statementsfairly present the state of affairs of the municipality as at the end of the financial year and the results of its operations and cashflows for the period then ended. The external auditors are engaged to express an independent opinion on the annual financialstatements and was given unrestricted access to all financial records and related data.

The annual financial statements have been prepared in accordance with Standards of Generally Recognised AccountingPractice (GRAP) including any interpretations, guidelines and directives issued by the Accounting Standards Board.

The annual financial statements are based upon appropriate accounting policies consistently applied and supported byreasonable and prudent judgements and estimates.

The accounting officer acknowledges that he is ultimately responsible for the system of internal financial control established bythe municipality and place considerable importance on maintaining a strong control environment. To enable the accountingofficer to meet these responsibilities, the accounting officer sets standards for internal control aimed at reducing the risk oferror or deficit in a cost effective manner. The standards include the proper delegation of responsibilities within a clearlydefined framework, effective accounting procedures and adequate segregation of duties to ensure an acceptable level of risk.These controls are monitored throughout the municipality and all employees are required to maintain the highest ethicalstandards in ensuring the municipality’s business is conducted in a manner that in all reasonable circumstances is abovereproach. The focus of risk management in the municipality is on identifying, assessing, managing and monitoring all knownforms of risk across the municipality. While operating risk cannot be fully eliminated, the municipality endeavours to minimise itby ensuring that appropriate infrastructure, controls, systems and ethical behaviour are applied and managed withinpredetermined procedures and constraints.

I certify that the salaries, allowances and benefits of Councillors ,loans made to Councillors, if any , and payments made toCouncillors for the loss of office ,if any, as disclosed in notes of these annual financial statements are within the upper limits ofthe framework envisaged in section 219 of the Constitution , read with the Remuneration of Office Bearers Act and the Ministerof Local Government's determination in accordance within this act.

The accounting officer is of the opinion, based on the information and explanations given by management, that the system ofinternal control provides reasonable assurance that the financial records may be relied on for the preparation of the annualfinancial statements. However, any system of internal financial control can provide only reasonable, and not absolute,assurance against material misstatement or deficit.

Although the accounting officer are primarily responsible for the financial affairs of the municipality, they are supported by themunicipality's external auditors.

The external auditors are responsible for independently reviewing and reporting on the municipality's annual financialstatements. The annual financial statements have been examined by the municipality's external auditors and their report ispresented on page 6.

The annual financial statements set out on pages 6 to 46, which have been prepared on the going concern basis, wereapproved by the accounting officer on 31 March 2014 and were signed on its behalf by:

Accounting OfficerActing Municipal Manager

4

Jozini Local Municipality(Registration number KZN 272)Annual Financial Statements for the year ended 30 June 2014

Audit Committee Report

We are pleased to present our report for the financial year ended 30 June 2014.

Audit committee members and attendance

The audit committee consists of the members listed hereunder and should meet x times per annum as per its approved termsof reference. During the current year x number of meetings were held.Name of member Number of meetings attendedMr IZ Ngcobo (Chairperson) 5Mr SP Kunene 4Mr DL Mponshane 4

Audit committee responsibility

The audit committee reports that it has complied with its responsibilities arising from section 38(10)(1) of the PFMA andTreasury Regulation 3.1.

The audit committee also reports that it has adopted appropriate formal terms of reference as its audit committee charter, hasregulated its affairs in compliance with this charter and has discharged all its responsibilities as contained therein.

The effectiveness of internal control

The system of internal controls applied by the municipality over financial and risk management is effective, efficient andtransparent. In line with the MFMA and the King III Report on Corporate Governance requirements, Internal Audit providesthe audit committee and management with assurance that the internal controls are appropriate and effective. This isachieved by means of the risk management process, as well as the identification of corrective actions and suggestedenhancements to the controls and processes. From the various reports of the Internal Auditors, the Audit Report on theannual financial statements, and the management report of the Auditor-General South Africa, it was noted that no matterswere reported that indicate any material deficiencies in the system of internal control or any deviations therefrom.Accordingly, we can report that the system of internal control over financial reporting for the period under review wasefficient and effective.

The quality of in year management and monthly/quarterly reports submitted in terms of the MFMA and the Division of RevenueAct.

The audit committee is satisfied with the content and quality of monthly and quarterly reports prepared and issued by theaccounting officer of the municipality during the year under review.

Internal audit

The audit committee is satisfied that the internal audit function is operating effectively and that it has addressed the riskspertinent to the municipality and its audits.

Auditor-General of South Africa

The audit committee has met with the Auditor-General of South Africa to ensure that there are no unresolved issues.

Chairperson of the Audit Committee

Date:

5

Jozini Local Municipality(Registration number KZN 272)Annual Financial Statements for the year ended 30 June 2014

Statement of Financial Position as at 30 June 2014Figures in Rand Note(s) 2014 2013

Restated*

Assets

Current Assets

Receivables from exchange transactions 2 140 479 2 794 438

Consumer debtors 3 6 763 703 5 695 873

VAT receivable 4 1 511 623 2 502 866

Cash and cash equivalents 5 8 641 319 30 088 577

17 057 124 41 081 754

Non-Current Assets

Property, plant and equipment 6 212 393 984 178 709 435

Intangible assets 7 59 091 124 444

212 453 075 178 833 879

Total Assets 229 510 199 219 915 633

Liabilities

Current Liabilities

Payables from exchange transactions 8 22 445 343 15 924 240

Employee benefit obligation 37 1 301 000 1 453 000

Unspent conditional grants and receipts 9 8 428 923 21 446 239

Provisions 10 230 625 482 049

Deposit & refund 18 044 -

32 423 935 39 305 528

Non-Current Liabilities

Provisions 10 6 842 467 6 340 028

Total Liabilities 39 266 402 45 645 556

Net Assets 190 243 797 174 270 077

Accumulated surplus 190 243 797 174 270 077

* See Note 35 & 38

6

Jozini Local Municipality(Registration number KZN 272)Annual Financial Statements for the year ended 30 June 2014

Statement of Financial PerformanceFigures in Rand Note(s) 2014 2013

Restated*

Revenue

Revenue from exchange transactions

Service charges 13 3 389 418 1 992 983

Rental of facilities and equipment 765 640 595 073

Licences and permits 863 361 730 650

Interest earned on overdue account 6 446 946 5 118 552

Other income 15 1 663 927 2 018 841

Interest received - investment 2 011 226 2 715 312

Total revenue from exchange transactions 15 140 518 13 171 411

Revenue from non-exchange transactions

Taxation revenue

Property rates 12 12 904 241 11 910 914

Transfer revenue

Government grants & subsidies 14 131 127 105 118 420 966

Fines 1 199 370 236 875

Transfer of halls - 5 839 066

Total revenue from non-exchange transactions 145 230 716 136 407 821

Total revenue 11 160 371 234 149 579 232

Expenditure

Personnel 17 (29 730 493) (30 465 754)

Remuneration of councillors 18 (9 811 181) (7 660 908)

Depreciation and amortisation 32 (12 697 832) (11 213 362)

Finance costs 19 (125 000) (470 125)

Debt impairment 30 (2 891 060) (563 124)

Allowance for Debt Impairement (14 553 603) (15 985 944)

Repairs and maintenance (10 063 317) (3 033 845)

Contracted services 33 (4 799 086) (3 191 815)

Grants and subsidies paid 21 (4 609 770) (12 581 756)

Cost of housing sold - (407 772)

General Expenses 16 (55 666 173) (36 533 247)

Total expenditure (144 947 515) (122 107 652)

Operating surplus 15 423 719 27 471 580

Acturial (Gain)/Loss 550 000 -

Surplus for the year 15 973 719 27 471 580

* See Note 35 & 38

7The supplementary information presented does not form part of the annual financial statements and is unaudited

Jozini Local Municipality(Registration number KZN 272)Annual Financial Statements for the year ended 30 June 2014

Statement of Changes in Net Assets

Figures in RandAccumulated

surplusTotal netassets

Balance at 01 July 2012 148 251 498 148 251 498Changes in net assetsRestatement - post retirement obligation (1 453 001) (1 453 001)

Net income (losses) recognised directly in net assets (1 453 001) (1 453 001)Surplus for the year 27 471 580 27 471 580

Total recognised income and expenses for the year 26 018 579 26 018 579

Total changes 26 018 579 26 018 579

Restated* Balance at 01 July 2013 174 270 078 174 270 078Changes in net assetsSurplus for the year 15 973 719 15 973 719

Total changes 15 973 719 15 973 719

Balance at 30 June 2014 190 243 797 190 243 797

* See Note 35 & 38

8

Jozini Local Municipality(Registration number KZN 272)Annual Financial Statements for the year ended 30 June 2014

Cash Flow StatementFigures in Rand Note(s) 2014 2013

Restated*

Cash flows from operating activities

Receipts

Sale of goods and services 1 296 735 1 992 983

Grants 126 097 766 118 497 743

Interest income 2 011 226 2 715 312

Other receipts 17 948 333 14 982 460

147 354 060 138 188 498

Payments

Employee costs (37 355 859) (40 245 884)

Suppliers (61 449 213) (7 321 860)

Finance costs (125 000) (470 125)

Other payments (11 379 604) (12 852 783)

Other cash item (12 153 222) (23 824 281)

(122 462 898) (84 714 933)

Net cash flows from operating activities 25 24 891 162 53 473 565

Cash flows from investing activities

Purchase of property, plant and equipment 6 (46 278 954) (60 768 924)

Proceeds from sale of property, plant and equipment 6 - 591 690

Purchase of other intangible assets 7 (77 510) (233 139)

Net cash flows from investing activities (46 356 464) (60 410 373)

Cash flows from financing activities

Deposit & Refund 18 044 -

Net increase/(decrease) in cash and cash equivalents (21 447 258) (6 936 808)

Cash and cash equivalents at the beginning of the year 30 088 577 37 025 385

Cash and cash equivalents at the end of the year 5 8 641 319 30 088 577

* See Note 35 & 38

9

Jozini Local Municipality(Registration number KZN 272)Annual Financial Statements for the year ended 30 June 2014

Statement of comparison between Budget and ActualFigures in Rand

Originalbudget

Budgetadjustments(i.t.o. s28 ands31 of theMFMA)

Finaladjustmentsbudget

Shifting offunds (i.t.o.s31 of theMFMA)

Virement(i.t.o. councilapprovedpolicy)

Final budget Actualoutcome

Unauthorisedexpenditure

Variance Actualoutcomeas % offinalbudget

Actualoutcomeas % oforiginalbudget

2014

Financial PerformanceProperty rates 17 985 624 (12 575) 17 973 049 - 17 973 049 12 904 241 (5 068 808) %72 %72Service charges 3 492 922 971 488 4 464 410 - 4 464 410 3 389 418 (1 074 992) %76 %97Investment revenue 4 710 132 (2 000 000) 2 710 132 - 2 710 132 2 011 226 (698 906) %74 %43Transfers recognised -operational

89 911 000 150 000 90 061 000 - 90 061 000 129 984 515 39 923 515 %144 %145

Other own revenue 7 983 795 3 002 653 10 986 448 - 10 986 448 11 730 782 744 334 %107 %147

Total revenue(excluding capitaltransfers andcontributions)

124 083 473 2 111 566 126 195 039 - 126 195 039 160 020 182 33 825 143 %127 %129

Employee costs (32 083 793) 3 173 150 (28 910 643) - - (28 910 643) (29 730 493) - (819 850) %103 %93Remuneration ofcouncillors

(10 201 358) (256 317) (10 457 675) - - (10 457 675) (9 811 181) - 646 494 %94 %96

Debt impairment (2 000 000) - (2 000 000) (2 000 000) (2 891 060) - (891 060) %145 %145Depreciation and assetimpairment

(1 000 000) - (1 000 000) (1 000 000) (12 697 832) - (11 697 832) %1 270 %1 270

Finance charges - - - - - - (125 000) - (125 000) %- %-Transfers and grants (4 391 000) 1 800 000 (2 591 000) - - (2 591 000) (4 609 770) - (2 018 770) %178 %105Other expenditure (62 921 590) (11 061 899) (73 983 489) - - (73 983 489) (84 532 179) - (10 548 690) %114 %134

Total expenditure (112 597 741) (6 345 066) (118 942 807) - - (118 942 807) (144 397 515) - (25 454 708) %121 %128

Surplus/(Deficit) 11 485 732 (4 233 500) 7 252 232 - 7 252 232 15 622 667 8 370 435 %215 %136

10

Jozini Local Municipality(Registration number KZN 272)Annual Financial Statements for the year ended 30 June 2014

Appropriation StatementFigures in Rand

Originalbudget

Budgetadjustments(i.t.o. s28 ands31 of theMFMA)

Finaladjustmentsbudget

Shifting offunds (i.t.o.s31 of theMFMA)

Virement(i.t.o. councilapprovedpolicy)

Final budget Actualoutcome

Unauthorisedexpenditure

Variance Actualoutcomeas % offinalbudget

Actualoutcomeas % oforiginalbudget

Transfers recognised -capital

44 891 000 (8 425 000) 36 466 000 - 36 466 000 - (36 466 000) %- %-

Surplus (Deficit) aftercapital transfers andcontributions

56 376 732 (12 658 500) 43 718 232 - 43 718 232 15 622 667 (28 095 565) %36 %28

Surplus/(Deficit) for theyear

56 376 732 (12 658 500) 43 718 232 - 43 718 232 15 622 667 (28 095 565) %36 %28

Capital expenditure and funds sources

Total capital expenditure 55 571 000 4 680 000 60 251 000 - 60 251 000 154 678 162 94 427 162 %257 %278

Cash flows

Net cash from (used)operating

59 376 000 (15 658 419) 43 717 581 - 43 717 581 24 891 162 (18 826 419) %57 %42

Net cash from (used)investing

(46 644 636) (4 679 859) (51 324 495) - (51 324 495) (46 356 464) 4 968 031 %90 %99

Net cash from (used)financing

- - - - - 18 044 18 044 %DIV/0 %DIV/0

Net increase/(decrease)in cash and cashequivalents

12 731 364 (20 338 278) (7 606 914) - (7 606 914) (21 447 258) (13 840 344) %282 %(168)

Cash and cashequivalents at thebeginning of the year

37 177 519 - 37 177 519 - 37 177 519 30 088 577 (7 088 942) %81 %81

Cash and cashequivalents at year end

49 908 883 (20 338 278) 29 570 605 - 29 570 605 8 641 319 20 929 286 %29 %17

11

Jozini Local Municipality(Registration number KZN 272)Annual Financial Statements for the year ended 30 June 2014

Appropriation StatementFigures in Rand

Originalbudget

Budgetadjustments(i.t.o. s28 ands31 of theMFMA)

Finaladjustmentsbudget

Shifting offunds (i.t.o.s31 of theMFMA)

Virement(i.t.o. councilapprovedpolicy)

Final budget Actualoutcome

Unauthorisedexpenditure

Variance Actualoutcomeas % offinalbudget

Actualoutcomeas % oforiginalbudget

Refer to Note 42 for explanations on material differences between the budget and actual amounts.

12

Jozini Local Municipality(Registration number KZN 272)Annual Financial Statements for the year ended 30 June 2014

Accounting Policies

1. Presentation of Annual Financial Statements

The annual financial statements have been prepared in accordance with the Standards of Generally Recognised AccountingPractice (GRAP), issued by the Accounting Standards Board in accordance with Section 122(3) of the Municipal FinanceManagement Act (Act 56 of 2003).

These annual financial statements have been prepared on an accrual basis of accounting and are in accordance with historicalcost convention as the basis of measurement, unless specified otherwise. They are presented in South African Rand.

A summary of the significant accounting policies, which have been consistently applied in the preparation of these annualfinancial statements, are disclosed below.

These accounting policies are consistent with the previous period.

1.1 Presentation currency

These annual financial statements are presented in South African Rand, which is the functional currency of the municipality.

1.2 Going concern assumption

These annual financial statements have been prepared based on the expectation that the municipality will continue tooperate as a going concern for at least the next 12 months.

1.3 Significant judgements and sources of estimation uncertainty

In preparing the annual financial statements, management is required to make estimates and assumptions that affect theamounts represented in the annual financial statements and related disclosures. Use of available information and theapplication of judgement is inherent in the formation of estimates. Actual results in the future could differ from these estimateswhich may be material to the annual financial statements. Significant judgements include:

Trade receivables / Held to maturity investments and/or loans and receivables

The municipality assesses its trade receivables, held to maturity investments and loans and receivables for impairment at theend of each reporting period. In determining whether an impairment loss should be recorded in surplus or deficit, the surplusmakes judgements as to whether there is observable data indicating a measurable decrease in the estimated future cash flowsfrom a financial asset.

The impairment for trade receivables, held to maturity investments and loans and receivables is calculated on a portfolio basis,based on historical loss ratios, adjusted for national and industry-specific economic conditions and other indicators present atthe reporting date that correlate with defaults on the portfolio. These annual loss ratios are applied to loan balances in theportfolio and scaled to the estimated loss emergence period.

Impairment testing

The recoverable amounts of cash-generating units and individual assets have been determined based on the higher of value-in-use calculations and fair values less costs to sell. These calculations require the use of estimates and assumptions. It isreasonably possible that the [name a key assumption] assumption may change which may then impact our estimations andmay then require a material adjustment to the carrying value of goodwill and tangible assets.

The municipality reviews and tests the carrying value of assets when events or changes in circumstances suggest that thecarrying amount may not be recoverable. In addition, goodwill is tested on an annual basis for impairment. Assets are groupedat the lowest level for which identifiable cash flows are largely independent of cash flows of other assets and liabilities. If thereare indications that impairment may have occurred, estimates are prepared of expected future cash flows for each group ofassets. Expected future cash flows used to determine the value in use of goodwill and tangible assets are inherently uncertainand could materially change over time. They are significantly affected by a number of factors including [list entity specificvariables, i.e. production estimates, supply demand], together with economic factors such as [list economic factors such asexchange rates inflation interest].

Provisions

Provisions were raised and management determined an estimate based on the information available. Additional disclosure ofthese estimates of provisions are included in note 10 - Provisions.

13

Jozini Local Municipality(Registration number KZN 272)Annual Financial Statements for the year ended 30 June 2014

Accounting Policies

1.3 Significant judgements and sources of estimation uncertainty (continued)

Post retirement benefits

The present value of the post retirement obligation depends on a number of factors that are determined on an actuarial basisusing a number of assumptions. The assumptions used in determining the net cost (income) include the discount rate. Anychanges in these assumptions will impact on the carrying amount of post retirement obligations.

The municipality determines the appropriate discount rate at the end of each year. This is the interest rate that should be usedto determine the present value of estimated future cash outflows expected to be required to settle the pension obligations. Indetermining the appropriate discount rate, the municipality considers the interest rates of high-quality corporate bonds that aredenominated in the currency in which the benefits will be paid, and that have terms to maturity approximating the terms of therelated pension liability.

Other key assumptions for pension obligations are based on current market conditions. Additional information is disclosed inNote 37.

Effective interest rate

The municipality used the prime interest rate to discount future cash flows.

Allowance for doubtful debts

On debtors an impairment loss is recognised in surplus and deficit when there is objective evidence that it is impaired. Theimpairment is measured as the difference between the debtors carrying amount and the present value of estimated future cashflows discounted at the effective interest rate, computed at initial recognition.

14

Jozini Local Municipality(Registration number KZN 272)Annual Financial Statements for the year ended 30 June 2014

Accounting Policies

1.4 Property, plant and equipment

Initial RecognitionProperty, plant and equipment are tangible non-current assets (including infrastructure assets) that are held for use in theproduction or supply of goods or services, rental to others, or for administrative purposes, and are expected to be used duringmore than one year. items for property plant and equipment are initially recognised as assets on acquisition date and areinitially recorderd at cost. the cost of an item of property plant and equipment is the purchase price and other costs attributableto bring asset to the location and condition necessary for it to be capable of operating in the manner intended by themunicipality. Trade discounts and rebates are deducted in arriving at the cost. The cost also includes the necessary costs ofdismantling and removing the asset and restoring the site on which it is located. When significant components of the Property,plant and equipment has useful lives, they are accounted for as seperate items ( major components) of property, plant andequipment. are tangible non-current assets (including infrastructure assets) that are held for use in the production or supply of goods orservices, rental to others, or for administrative purposes, and are expected to be used during more than one year

The cost of an item of property, plant and equipment is recognised as an asset when: the cost of the item can be measured reliably.

Property, plant and equipment is initially measured at cost.

Where an asset is acquired at no cost, or for a nominal cost, its cost is its fair value as at date of acquisition.

Where an item of property, plant and equipment is acquired in exchange for a non-monetary asset or monetary assets, or acombination of monetary and non-monetary assets, the asset acquired is initially measured at fair value (the cost). If theacquired item's fair value was not determinable, it's deemed cost is the carrying amount of the asset(s) given up.

Major spare parts and servicing equipment qualify as property plant, and equipment where the municipality expects to usethem during more than one period. Similarly, if the major spare parts and servicing equipment can be used only in connectionwith an item of property plant and equipment, they are accounted for as property plant and equipment.

Subsequent measurements-cost model

Subsequent to initial recognition, items of property plant and equipment are measured at cost less accumulated depreciationand impairment losses or at fair market value. Land is not depreciated as it deemed to have and indefinite useful life.

Where the municipality replaces parts of an asset, it derecognises the part of that asset being replaced and capitalises the newcomponent. Subsequent expenditure incurred on an asset is capitalised when it increases the capacity or future economicbenefits associated with the asset.

When an item of property, plant and equipment is revalued, any accumulated depreciation at the date of the revaluation isrestated proportionately with the change in the gross carrying amount of the asset so that the carrying amount of the asset afterrevaluation equals its revalued amount.

Depreciation and impairment.

Depreciation is calculated on the depreciable amount, using the straight-line method over the estimated useful lives of theassets. The annual depreciation rates are based on the following estimated average asset lives:

Classes of Assets Average useful lifeLand Landfill site 15 Years Parkhomes 10 YearsInfrastructure Buildings 30 Years Roads and Pavements 30 Years Storm water Drainage 20 Years

Community Assets Buildings 30 Years Community Halls 30 Years Libraries 30 Years

15

Jozini Local Municipality(Registration number KZN 272)Annual Financial Statements for the year ended 30 June 2014

Accounting Policies

1.4 Property, plant and equipment (continued)

Parkings and gardens 10 Years Recreational facilities 30 YearsFurniture and fixtures Furniture and fittings 5 Years Bins and Containers 5 YearsMotor vehicles Other Vehicles 5 YearsOffice equipment Office Equipment 5 Years Computer Equipment 5Years

Items of Property plant and equipment are derecognised when the asset is disposed of or when there are no further economicbenefits or service potential expected from the use of the asset.

The gain or loss arising from the derecognition of an item of property, plant and equipment is included in surplus or deficit whenthe item is derecognised. The gain or loss arising from the derecognition of an item of property, plant and equipment isdetermined as the difference between the net disposal proceeds, if any, and the carrying amount of the item.

1.5 Intangible assets

Intangible assets are carried at cost less any accumulated amortisation and any impairment losses.

An intangible asset is regarded as having an indefinite useful life when, based on all relevant factors, there is no foreseeablelimit to the period over which the asset is expected to generate net cash inflows or service potential. Amortisation is notprovided for these intangible assets, but they are tested for impairment annually and whenever there is an indication that theasset may be impaired. For all other intangible assets amortisation is provided on a straight line basis over their useful life.

The amortisation period and the amortisation method for intangible assets are reviewed at each reporting date.

Reassessing the useful life of an intangible asset with a finite useful life after it was classified as indefinite is an indicator thatthe asset may be impaired. As a result the asset is tested for impairment and the remaining carrying amount is amortised overits useful life.

Internally generated brands, mastheads, publishing titles, customer lists and items similar in substance are not recognised asintangible assets.

Amortisation is provided to write down the intangible assets, on a straight line basis, to their residual values as follows:

1.6 Financial instruments

Initial recognition and measurement

Financial instruments are measured initially at fair value, except for equity investments for which a fair value is notdeterminable, which are measured at cost and are classified as available-for-sale financial assets.

For financial instruments which are not at fair value through surplus or deficit, transaction costs are included in the initialmeasurement of the instrument.

Transaction costs on financial instruments at fair value through surplus or deficit are recognised in surplus or deficit.

Regular way purchases of financial assets are accounted for at .

Subsequent measurement

Financial instruments at fair value through surplus or deficit are subsequently measured at fair value, with gains and lossesarising from changes in fair value being included in surplus or deficit for the period.

Net gains or losses on the financial instruments at fair value through surplus or deficit dividends or similar distributions andinterest.

16

Jozini Local Municipality(Registration number KZN 272)Annual Financial Statements for the year ended 30 June 2014

Accounting Policies

1.6 Financial instruments (continued)

Investments

The fair values of quoted investments are based on current bid prices. If the market for a financial asset is not active (and forunlisted securities), the municipality establishes fair value by using valuation techniques. These include the use of recent arm’slength transactions, reference to other instruments that are substantially the same, discounted cash flow analysis, and optionpricing models making maximum use of market inputs and relying as little as possible on entity-specific inputs.

Receivables from exchange transactions

Trade receivables are measured at initial recognition at fair value, and are subsequently measured at amortised cost using theeffective interest rate method. Appropriate allowances for estimated irrecoverable amounts are recognised in surplus or deficitwhen there is objective evidence that the asset is impaired. Significant financial difficulties of the debtor, probability that thedebtor will enter bankruptcy or financial reorganisation, and default or delinquency in payments (more than 30 days overdue)are considered indicators that the trade receivable is impaired. The allowance recognised is measured as the differencebetween the asset’s carrying amount and the present value of estimated future cash flows discounted at the effective interestrate computed at initial recognition.

The carrying amount of the asset is reduced through the use of an allowance account, and the amount of the deficit isrecognised in surplus or deficit within operating expenses. When a trade receivable is uncollectible, it is written off against theallowance account for trade receivables. Subsequent recoveries of amounts previously written off are credited againstoperating expenses in surplus or deficit.

The carrying amount of the asset is reduced through the use of an allowance account, and the amount of the deficit isrecognised in surplus or deficit within operating expenses. When a trade receivable is uncollectible, it is written off against theallowance account for trade receivables. Subsequent recoveries of amounts previously written off are credited againstoperating expenses in surplus or deficit.

Trade and other receivables are classified as loans and receivables.

Payables from exchange transactions

Trade payables are initially measured at fair value, and are subsequently measured at amortised cost, using the effectiveinterest rate method.

Financial liabilities consist of trade and other payables. They are categorised as financial liabilities held at amortised cost, areinitially recognised at fair value and subsequently measured at amortised which is initially carrying amount, less repayments,plus interest.

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and demand deposits, and other short-term highly liquid investments thatare readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value. These are initiallyand subsequently recorded at fair value.

1.7 Leases

A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership. A lease isclassified as an operating lease if it does not transfer substantially all the risks and rewards incidental to ownership.

When a lease includes both land and buildings elements, the entity assesses the classification of each element separately.

1.8 Impairment of cash-generating assets

Cash-generating assets are those assets held by the municipality with the primary objective of generating a commercial return.When an asset is deployed in a manner consistent with that adopted by a profit-orientated entity, it generates a commercialreturn.

Impairment is a loss in the future economic benefits or service potential of an asset, over and above the systematic recognitionof the loss of the asset’s future economic benefits or service potential through depreciation (amortisation).

17

Jozini Local Municipality(Registration number KZN 272)Annual Financial Statements for the year ended 30 June 2014

Accounting Policies

1.8 Impairment of cash-generating assets (continued)

Carrying amount is the amount at which an asset is recognised in the statement of financial position after deducting anyaccumulated depreciation and accumulated impairment losses thereon.

A cash-generating unit is the smallest identifiable group of assets held with the primary objective of generating a commercialreturn that generates cash inflows from continuing use that are largely independent of the cash inflows from other assets orgroups of assets.

Costs of disposal are incremental costs directly attributable to the disposal of an asset, excluding finance costs and income taxexpense.

Depreciation (Amortisation) is the systematic allocation of the depreciable amount of an asset over its useful life.

Fair value less costs to sell is the amount obtainable from the sale of an asset in an arm’s length transaction betweenknowledgeable, willing parties, less the costs of disposal.

Recoverable amount of an asset or a cash-generating unit is the higher its fair value less costs to sell and its value in use.

Useful life is either:(a) the period of time over which an asset is expected to be used by the municipality; or(b) the number of production or similar units expected to be obtained from the asset by the municipality.

Criteria developed by the municipality to distinguish cash-generating assets from non-cash-generating assets are as follow:

1.9 Impairment of non-cash-generating assets

Cash-generating assets are those assets held by the municipality with the primary objective of generating a commercial return.When an asset is deployed in a manner consistent with that adopted by a profit-orientated entity, it generates a commercialreturn.

Non-cash-generating assets are assets other than cash-generating assets.

Impairment is a loss in the future economic benefits or service potential of an asset, over and above the systematic recognitionof the loss of the asset’s future economic benefits or service potential through depreciation (amortisation).

Carrying amount is the amount at which an asset is recognised in the statement of financial position after deducting anyaccumulated depreciation and accumulated impairment losses thereon.

A cash-generating unit is the smallest identifiable group of assets held with the primary objective of generating a commercialreturn that generates cash inflows from continuing use that are largely independent of the cash inflows from other assets orgroups of assets.

Costs of disposal are incremental costs directly attributable to the disposal of an asset, excluding finance costs and income taxexpense.

Depreciation (Amortisation) is the systematic allocation of the depreciable amount of an asset over its useful life.

Fair value less costs to sell is the amount obtainable from the sale of an asset in an arm’s length transaction betweenknowledgeable, willing parties, less the costs of disposal.

Recoverable service amount is the higher of a non-cash-generating asset’s fair value less costs to sell and its value in use.

Useful life is either:(a) the period of time over which an asset is expected to be used by the municipality; or(b) the number of production or similar units expected to be obtained from the asset by the municipality.

Criteria developed by the municipality to distinguish non-cash-generating assets from cash-generating assets are as follow:[Specify criteria]

18

Jozini Local Municipality(Registration number KZN 272)Annual Financial Statements for the year ended 30 June 2014

Accounting Policies

1.10 Employee benefits

Employee benefits are all forms of consideration given by an entity in exchange for service rendered by employees.

A qualifying insurance policy is an insurance policy issued by an insurer that is not a related party (as defined in the Standardof GRAP on Related Party Disclosures) of the reporting entity, if the proceeds of the policy can be used only to pay or fundemployee benefits under a defined benefit plan and are not available to the reporting entity’s own creditors (even in liquidation)and cannot be paid to the reporting entity, unless either:

the proceeds represent surplus assets that are not needed for the policy to meet all the related employee benefitobligations; or

the proceeds are returned to the reporting entity to reimburse it for employee benefits already paid.

Termination benefits are employee benefits payable as a result of either: an entity’s decision to terminate an employee’s employment before the normal retirement date; or an employee’s decision to accept voluntary redundancy in exchange for those benefits.

Other long-term employee benefits are employee benefits (other than post-employment benefits and termination benefits) thatare not due to be settled within twelve months after the end of the period in which the employees render the related service.

Vested employee benefits are employee benefits that are not conditional on future employment.

Composite social security programmes are established by legislation and operate as multi-employer plans to provide post-employment benefits as well as to provide benefits that are not consideration in exchange for service rendered by employees.

A constructive obligation is an obligation that derives from an entity’s actions where by an established pattern of past practice,published policies or a sufficiently specific current statement, the entity has indicated to other parties that it will accept certainresponsibilities and as a result, the entity has created a valid expectation on the part of those other parties that it will dischargethose responsibilities.

Short-term employee benefits

Short-term employee benefits are employee benefits (other than termination benefits) that are due to be settled within twelvemonths after the end of the period in which the employees render the related service.

Short-term employee benefits include items such as: wages, salaries and social security contributions; short-term compensated absences (such as paid annual leave and paid sick leave) where the compensation for the

absences is due to be settled within twelve months after the end of the reporting period in which the employeesrender the related employee service;

bonus, incentive and performance related payments payable within twelve months after the end of the reportingperiod in which the employees render the related service; and

non-monetary benefits (for example, medical care, and free or subsidised goods or services such as housing, carsand cellphones) for current employees.

When an employee has rendered service to the entity during a reporting period, the entity recognise the undiscounted amountof short-term employee benefits expected to be paid in exchange for that service:

as a liability (accrued expense), after deducting any amount already paid. If the amount already paid exceeds theundiscounted amount of the benefits, the entity recognise that excess as an asset (prepaid expense) to the extentthat the prepayment will lead to, for example, a reduction in future payments or a cash refund; and

as an expense, unless another Standard requires or permits the inclusion of the benefits in the cost of an asset.

The expected cost of compensated absences is recognised as an expense as the employees render services that increasetheir entitlement or, in the case of non-accumulating absences, when the absence occurs. The entity measure the expectedcost of accumulating compensated absences as the additional amount that the entity expects to pay as a result of the unusedentitlement that has accumulated at the reporting date.

The entity recognise the expected cost of bonus, incentive and performance related payments when the entity has a presentlegal or constructive obligation to make such payments as a result of past events and a reliable estimate of the obligation canbe made. A present obligation exists when the entity has no realistic alternative but to make the payments.

19

Jozini Local Municipality(Registration number KZN 272)Annual Financial Statements for the year ended 30 June 2014

Accounting Policies

1.11 Provisions and contingencies

Provisions are recognised when: the municipality has a present obligation as a result of a past event; it is probable that an outflow of resources embodying economic benefits or service potential will be required to

settle the obligation; and a reliable estimate can be made of the obligation.

The amount of a provision is the best estimate of the expenditure expected to be required to settle the present obligation at thereporting date.

Where the effect of time value of money is material, the amount of a provision is the present value of the expendituresexpected to be required to settle the obligation.

The discount rate is a pre-tax rate that reflects current market assessments of the time value of money and the risks specific tothe liability.

Where some or all of the expenditure required to settle a provision is expected to be reimbursed by another party, thereimbursement is recognised when, and only when, it is virtually certain that reimbursement will be received if the municipalitysettles the obligation. The reimbursement is treated as a separate asset. The amount recognised for the reimbursement doesnot exceed the amount of the provision.

Provisions are reviewed at each reporting date and adjusted to reflect the current best estimate. Provisions are reversed if it isno longer probable that an outflow of resources embodying economic benefits or service potential will be required, to settle theobligation.

Where discounting is used, the carrying amount of a provision increases in each period to reflect the passage of time. Thisincrease is recognised as an interest expense.

A provision is used only for expenditures for which the provision was originally recognised.

Provisions are not recognised for future operating deficits.

If an entity has a contract that is onerous, the present obligation (net of recoveries) under the contract is recognised andmeasured as a provision.

Contingent assets and contingent liabilities are not recognised. Contingencies are disclosed in note 22.

A financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse the holder for aloss it incurs because a specified debtor fails to make payment when due in accordance with the original or modified terms of adebt instrument.

Loan commitment is a firm commitment to provide credit under pre-specified terms and conditions.

The municipality recognises a provision for financial guarantees and loan commitments when it is probable that an outflow ofresources embodying economic benefits and service potential will be required to settle the obligation and a reliable estimate ofthe obligation can be made.

Determining whether an outflow of resources is probable in relation to financial guarantees requires judgement. Indications thatan outflow of resources may be probable are:

financial difficulty of the debtor; defaults or delinquencies in interest and capital repayments by the debtor; breaches of the terms of the debt instrument that result in it being payable earlier than the agreed term and the

ability of the debtor to settle its obligation on the amended terms; and a decline in prevailing economic circumstances (e.g. high interest rates, inflation and unemployment) that impact on

the ability of entities to repay their obligations.

Where a fee is received by the municipality for issuing a financial guarantee and/or where a fee is charged on loancommitments, it is considered in determining the best estimate of the amount required to settle the obligation at reporting date.Where a fee is charged and the municipality considers that an outflow of economic resources is probable, an municipalityrecognises the obligation at the higher of:

20

Jozini Local Municipality(Registration number KZN 272)Annual Financial Statements for the year ended 30 June 2014

Accounting Policies

1.11 Provisions and contingencies (continued) the amount determined using in the Standard of GRAP on Provisions, Contingent Liabilities and Contingent Assets;

and the amount of the fee initially recognised less, where appropriate, cumulative amortisation recognised in accordance

with the Standard of GRAP on Revenue from Exchange Transactions.

1.12 Revenue from exchange transactions

Revenue is the gross inflow of economic benefits or service potential during the reporting period when those inflows result in anincrease in net assets, other than increases relating to contributions from owners.

An exchange transaction is one in which the municipality receives assets or services, or has liabilities extinguished, and directlygives approximately equal value (primarily in the form of goods, services or use of assets) to the other party in exchange.

Fair value is the amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties inan arm’s length transaction.

Measurement

Revenue is measured at the fair value of the consideration received or receivable, net of trade discounts and volume rebates.

1.13 Revenue from non-exchange transactions

Revenue comprises gross inflows of economic benefits or service potential received and receivable by an municipality, whichrepresents an increase in net assets, other than increases relating to contributions from owners.

Conditions on transferred assets are stipulations that specify that the future economic benefits or service potential embodied inthe asset is required to be consumed by the recipient as specified or future economic benefits or service potential must bereturned to the transferor.

Control of an asset arise when the municipality can use or otherwise benefit from the asset in pursuit of its objectives and canexclude or otherwise regulate the access of others to that benefit.

Expenses paid through the tax system are amounts that are available to beneficiaries regardless of whether or not they paytaxes.

Fines are economic benefits or service potential received or receivable by entities, as determined by a court or other lawenforcement body, as a consequence of the breach of laws or regulations.

Non-exchange transactions are transactions that are not exchange transactions. In a non-exchange transaction, anmunicipality either receives value from another municipality without directly giving approximately equal value in exchange, orgives value to another municipality without directly receiving approximately equal value in exchange.

Restrictions on transferred assets are stipulations that limit or direct the purposes for which a transferred asset may be used,but do not specify that future economic benefits or service potential is required to be returned to the transferor if not deployedas specified.

Stipulations on transferred assets are terms in laws or regulation, or a binding arrangement, imposed upon the use of atransferred asset by entities external to the reporting municipality.

Tax expenditures are preferential provisions of the tax law that provide certain taxpayers with concessions that are not availableto others.

The taxable event is the event that the government, legislature or other authority has determined will be subject to taxation.

Taxes are economic benefits or service potential compulsorily paid or payable to entities, in accordance with laws and orregulations, established to provide revenue to government. Taxes do not include fines or other penalties imposed for breachesof the law.

Transfers are inflows of future economic benefits or service potential from non-exchange transactions, other than taxes.

21

Jozini Local Municipality(Registration number KZN 272)Annual Financial Statements for the year ended 30 June 2014

Accounting Policies

1.13 Revenue from non-exchange transactions (continued)

Measurement

Revenue from a non-exchange transaction is measured at the amount of the increase in net assets recognised by themunicipality.

When, as a result of a non-exchange transaction, the municipality recognises an asset, it also recognises revenue equivalentto the amount of the asset measured at its fair value as at the date of acquisition, unless it is also required to recognise aliability. Where a liability is required to be recognised it will be measured as the best estimate of the amount required to settlethe obligation at the reporting date, and the amount of the increase in net assets, if any, recognised as revenue. When aliability is subsequently reduced, because the taxable event occurs or a condition is satisfied, the amount of the reduction in theliability is recognised as revenue.

Value Added Tax

In line with the Value Added Tax Act of 1991, the municipality is registered as VAT vendor on a payment basis. Thus, themunicipality declares output tax and claims input tax in the respective tax period only to the extent to which payment of theconsideration is received or made in that tax period.

Fines

Fines are recognised as revenue when the receivable meets the definition of an asset and satisfies the criteria for recognitionas an asset.

Assets arising from fines are measured at the best estimate of the inflow of resources to the municipality.

Where the municipality collects fines in the capacity of an agent, the fine will not be revenue of the collecting entity.

1.14 Borrowing costs

It is inappropriate to capitalise borrowing costs when, and only when, there is clear evidence that it is difficult to link theborrowing requirements of an entity directly to the nature of the expenditure to be funded i.e. capital or current.

Borrowing costs are recognised as an expense in the period in which they are incurred.

1.15 Comparative figures

When the presentation or classification of items in the annual financial statements is amended, prior period comparativeamounts are restated. The nature and reason for the reclassification is disclosed. Where accounting errors have beenidentified in the current year, the correction is made retrospectively as far as practicable, and the prior year comparatives arerestated accordingly.

1.16 Unauthorised expenditure

Unauthorised expenditure means: overspending of a vote or a main division within a vote; and expenditure not in accordance with the purpose of a vote or, in the case of a main division, not in accordance with

the purpose of the main division.

All expenditure relating to unauthorised expenditure is recognised as an expense in the statement of financial performance inthe year that the expenditure was incurred. The expenditure is classified in accordance with the nature of the expense, andwhere recovered, it is subsequently accounted for as revenue in the statement of financial performance.

1.17 Fruitless and wasteful expenditure

Fruitless expenditure means expenditure which was made in vain and would have been avoided had reasonable care beenexercised.

All expenditure relating to fruitless and wasteful expenditure is recognised as an expense in the statement of financialperformance in the year that the expenditure was incurred. The expenditure is classified in accordance with the nature of theexpense, and where recovered, it is subsequently accounted for as revenue in the statement of financial performance.

22

Jozini Local Municipality(Registration number KZN 272)Annual Financial Statements for the year ended 30 June 2014

Accounting Policies

1.18 Irregular expenditure

Irregular expenditure that was incurred and identified during the current financial and which was condoned before year endand/or before finalisation of the financial statements must also be recorded appropriately in the irregular expenditure register. Insuch an instance, no further action is also required with the exception of updating the note to the financial statements.

Irregular expenditure that was incurred and identified during the current financial year and for which condonement is beingawaited at year end must be recorded in the irregular expenditure register. No further action is required with the exception ofupdating the note to the financial statements.

Where irregular expenditure was incurred in the previous financial year and is only condoned in the following financial year, theregister and the disclosure note to the financial statements must be updated with the amount condoned.

Irregular expenditure that was incurred and identified during the current financial year and which was not condoned by theNational Treasury or the relevant authority must be recorded appropriately in the irregular expenditure register. If liability for theirregular expenditure can be attributed to a person, a debt account must be created if such a person is liable in law. Immediatesteps must thereafter be taken to recover the amount from the person concerned. If recovery is not possible, the accountingofficer or accounting authority may write off the amount as debt impairment and disclose such in the relevant note to thefinancial statements. The irregular expenditure register must also be updated accordingly. If the irregular expenditure has notbeen condoned and no person is liable in law, the expenditure related thereto must remain against the relevantprogramme/expenditure item, be disclosed as such in the note to the financial statements and updated accordingly in theirregular expenditure register.

Irregular expenditure is expenditure that is contrary to the Municipal Finance Management Act (Act No.56 of 2003), theMunicipal Systems Act (Act No.32 of 2000), and the Public Office Bearers Act (Act No. 20 of 1998) or is in contravention of theeconomic entity’s supply chain management policy. Irregular expenditure excludes unauthorised expenditure. Irregularexpenditure is accounted for as expenditure in the Statement of Financial Performance and where recovered, it is subsequentlyaccounted for as revenue in the Statement of Financial Performance.

1.19 Budget information

Municipality are typically subject to budgetary limits in the form of appropriations or budget authorisations (or equivalent), whichis given effect through authorising legislation, appropriation or similar.

General purpose financial reporting by municipality shall provide information on whether resources were obtained and used inaccordance with the legally adopted budget.

The approved budget is prepared on a cash basis and presented by economic classification linked to performance outcomeobjectives.

The approved budget covers the fiscal period from 2010/04/01 to 2011/03/31.

The budget for the economic entity includes all the entities approved budgets under its control.

The annual financial statements and the budget are on the same basis of accounting therefore a comparison with the budgetedamounts for the reporting period have been included in the Statement of comparison of budget and actual amounts.

1.20 Related parties

The municipality operates in an economic sector currently dominated by entities directly or indirectly owned by the SouthAfrican Government. As a consequence of the constitutional independence of the three spheres of government in South Africa,only entities within the national sphere of government are considered to be related parties.

Management are those persons responsible for planning, directing and controlling the activities of the municipality, includingthose charged with the governance of the municipality in accordance with legislation, in instances where they are required toperform such functions.

Close members of the family of a person are considered to be those family members who may be expected to influence, or beinfluenced by, that management in their dealings with the municipality.

Only transactions with related parties not at arm’s length or not in the ordinary course of business are disclosed.

23

Jozini Local Municipality(Registration number KZN 272)Annual Financial Statements for the year ended 30 June 2014

Accounting Policies

1.21 Offsetting

Assets, liabilities, revenue and expenses have not been offset except when offsetting is required or permitted by a Standard ofGRAP.

1.22 Commitments

Capital commitments disclosed in the notes to the annual financial statements represents the balance committed to capitalprojects as at the reporting date which will be incurred in the period subsequent to the specific reporting period.

24

Jozini Local Municipality(Registration number KZN 272)Annual Financial Statements for the year ended 30 June 2014

Notes to the Annual Financial StatementsFigures in Rand 2014 2013

2. Receivables from exchange transactions

Trade debtors 11 305 756 10 643 030Rentals debtors 943 926 520 716Allowence for debt impairment (12 109 203) (8 369 308)

140 479 2 794 438

3. Receivables from non-exchange transactions

Rates Debtors 35 591 317 25 832 003Councillors Debtors 9 000 9 000Staff Debtors 3 832 3 832Traffic Debtors 943 650 -Allowence for debt impairment (29 784 096) (20 148 962)

6 763 703 5 695 873

RatesCurrent (0 -30 days) 2 231 725 1 619 77531 - 60 days 1 255 777 911 43761 - 90 days 1 168 981 848 44191 - 120 days 2 102 810 1 526 209121 - 365 days 28 832 024 20 926 141

35 591 317 25 832 003

Refuse removalCurrent (0 -30 days) 263 426 379 94731 - 60 days 13 332 213 79461 - 90 days 157 225 199 01791 - 120 days 284 178 197 444121 - 365 days 408 085 3 986 873> 365 days 12 746 137 5 665 955

13 872 383 10 643 030

Councillors debtors> 365 days 3 832 3 832

Summary of debtors by customer classification

Balance at beginning of the year (20 148 962) (9 702 735)Contributions to allowance - (10 446 227)

4. VAT receivable

VAT 1 511 623 2 502 866

5. Cash and cash equivalents

Cash and cash equivalents consist of:

25

Jozini Local Municipality(Registration number KZN 272)Annual Financial Statements for the year ended 30 June 2014

Notes to the Annual Financial StatementsFigures in Rand 2014 2013

5. Cash and cash equivalents (continued)

Petty Cash 465 5 000Bank balances 6 765 875 8 274 804Short-term deposits 1 874 979 21 808 773

8 641 319 30 088 577

26

Jozini Local Municipality(Registration number KZN 272)Annual Financial Statements for the year ended 30 June 2014

Notes to the Annual Financial StatementsFigures in Rand 2014 2013

5. Cash and cash equivalents (continued)

The municipality had the following bank accounts

`

Description Accountnumber

BankStatement 30

June 2014

BankStatement 30

June 2013

Cashbookbalances 30June 2014

Cashbookbalances 30June 2013

FNB: Main account 6202 4185452

6 457 728 858 172 6 457 728 858 172

Petty cash - 5 000 465 5 000ABSA: Operational account 4069 624 954 1 541 150 2 400 528 270 739 2 400 528FNB: Investment 7437 121 6430 - - - -Grindrod: Investment 16520 - 47 870 - 47 870Grindrod: Investment 164419/11000

034006100 895 96 024 100 895 96 024

STD: Investment 268741042 - 5 000 488 - 5 000 488ABSA: Investment 2073276014 - 5 000 000 - 5 000 000Cashier's collection - 15 617 37 409 15 617FNB: Unspent conditional grant 62406733164 1 598 669 16 664 878 1 598 669 16 664 878FNB MIG 62424077403 174 611 - 174 611 -Ithala: Investment 18607525 803 - 803 -

9 873 856 30 088 577 8 641 319 30 088 577

6. Property, plant and equipment

2014 2013

Cost /Valuation

Accumulateddepreciation

andaccumulatedimpairment

Carrying value Cost /Valuation

Accumulateddepreciation

andaccumulatedimpairment

Carrying value

Buildings 76 746 608 (6 968 029) 69 778 579 49 727 857 (5 058 832) 44 669 025Motor vehicles 6 515 855 (2 651 868) 3 863 987 4 964 821 (2 114 041) 2 850 780Office equipment 7 088 235 (4 366 092) 2 722 143 5 885 222 (3 379 776) 2 505 446Infrastructure 177 139 456 (87 024 931) 90 114 525 171 549 516 (78 105 570) 93 443 946Work-in-progress( WIP) 45 914 750 - 45 914 750 35 240 238 - 35 240 238

Total 313 404 904 (101 010 920) 212 393 984 267 367 654 (88 658 219) 178 709 435

Reconciliation of property, plant and equipment - 2014

Openingbalance

Additions Transfers Depreciation Impairmentloss

Total

Buildings 44 669 025 120 171 27 435 990 (1 974 037) - 69 778 579Motor vehicles 2 850 780 1 740 993 - (727 787) - 3 863 987Office equipment 2 505 446 1 254 760 - (998 617) (40 058) 2 722 143Infrastructure 93 443 946 362 670 4 689 858 (8 854 528) - 90 114 525Work-in-progress( WIP) 35 240 238 - 42 800 360 (32 125 848) - - 45 914 750

178 709 435 46 278 954 - (12 554 969) (40 058) 212 393 984

27

Jozini Local Municipality(Registration number KZN 272)Annual Financial Statements for the year ended 30 June 2014

Notes to the Annual Financial StatementsFigures in Rand 2014 2013

6. Property, plant and equipment (continued)

Reconciliation of property, plant and equipment - 2013

Openingbalance

Additions Disposals Transfers Depreciation Total

Buildings 21 527 624 13 470 258 (6 223) 10 700 824 (1 023 458) 44 669 025Motor vehicles 701 222 2 745 302 (353 130) - (242 614) 2 850 780Office equipment 2 488 220 1 147 676 (232 337) - (898 113) 2 505 446Infrastructure 91 902 290 4 734 087 - 5 232 091 (8 424 522) 93 443 946Work-in-progress (WIP) 12 486 101 38 671 601 - (15 917 464) - 35 240 238

129 105 457 60 768 924 (591 690) 15 451 (10 588 707) 178 709 435

7. Intangible assets

2014 2013

Cost /Valuation

Accumulatedamortisation

andaccumulatedimpairment

Carrying value Cost /Valuation

Accumulatedamortisation

andaccumulatedimpairment

Carrying value

Computer software and systems 568 943 (509 852) 59 091 491 431 (366 987) 124 444

Reconciliation of intangible assets - 2014

Openingbalance

Additions Amortisation Total

Computer software and systems 124 444 77 510 (142 863) 59 091

Reconciliation of intangible assets - 2013

Openingbalance

Additions Amortisation Total

Computer software and systems 135 283 233 139 (243 978) 124 444

8. Payables from exchange transactions

Trade payables 6 309 963 3 373 898Retention and surity 14 508 970 11 880 350Accrued bonus 1 626 410 669 992

22 445 343 15 924 240

28

Jozini Local Municipality(Registration number KZN 272)Annual Financial Statements for the year ended 30 June 2014

Notes to the Annual Financial StatementsFigures in Rand 2014 2013

9. Unspent conditional grants and receipts

Unspent conditional grants and receipts comprises of:

Unspent conditional grants and receiptsHousing grant 83 492 83 492MIG - 81 364Area 17 water scheme 521 807 521 807Ndumo sport field 721 230 1 203 736Internal control unit 150 000 150 000Ward committee induction training 23 355 23 355Municipal housing sector plan 11 775 11 775Jozini upgrading projects 107 606 107 606Fresh produce market 234 683 867 014Bhambanana town formalisation 69 365 69 365Synegistic program 7 224 7 224Ubuhle besiko cultural village 69 700 69 700Bhanjana road 624 412 624 412Umnothophansi 1 184 150 1 184 150Library grant 222 306 416 789IDP Grant 240 240MSIG 19 140 269FMG 48 246 404National electrification grant 164 807 9 671 450Development of recycling centre 10 730 10 730LG Expert 22 384 22 384Jozini town formalisation 1 758 152 3 921 752DBSA contribution for plan 10 365 10 365Implemantation of pound 51 652 74 754Supply of solar water gyser 2 312 102 2 312 102

8 428 923 21 446 239

29

Jozini Local Municipality(Registration number KZN 272)Annual Financial Statements for the year ended 30 June 2014

Notes to the Annual Financial StatementsFigures in Rand 2014 2013

10. Provisions

Reconciliation of provisions - 2014

OpeningBalance

Additions Reversedduring the

year

Total

Provision for long service award 780 000 298 000 - 1 078 000Provision for landfill site 3 585 025 204 439 - 3 789 464Provision for leave pay 56 449 174 176 - 230 625Provision for performance 425 600 - (425 600) -Provision -Leave pay Long tern portion 1 975 003 - - 1 975 003

6 822 077 676 615 (425 600) 7 073 092

Reconciliation of provisions - 2013

OpeningBalance

Additions Total

Provision for long service award 780 000 - 780 000Provision for landfill site 3 585 025 - 3 585 025Provision for leave pay 56 449 - 56 449Provision for performance bonus 425 600 - 425 600Employee benefit cost - 1 975 003 1 975 003

4 847 074 1 975 003 6 822 077

Non-current liabilities 6 842 467 6 340 028Current liabilities 230 625 482 049

7 073 092 6 822 077

11. Revenue

Service charges 3 389 418 1 992 983Rental of facilities and equipment 765 640 595 073Licences and permits 863 361 730 650Interest earned on overdue account 6 446 946 5 118 552Other income 1 663 927 2 018 841Interest received - investment 2 011 226 2 715 312Property rates 12 904 241 11 910 914Government grants & subsidies 131 127 105 118 420 966Fines 1 199 370 236 875Transfer of halls - 5 839 066

160 371 234 149 579 232

The amount included in revenue arising from exchanges of goods orservices are as follows:Service charges 3 389 418 1 992 983Rental of facilities and equipment 765 640 595 073Licences and permits 863 361 730 650Interest earned on overdue account 6 446 946 5 118 552Other income 1 663 927 2 018 841Interest received - investment 2 011 226 2 715 312

15 140 518 13 171 411

30

Jozini Local Municipality(Registration number KZN 272)Annual Financial Statements for the year ended 30 June 2014

Notes to the Annual Financial StatementsFigures in Rand 2014 2013

11. Revenue (continued)

The amount included in revenue arising from non-exchange transactionsis as follows:Taxation revenueProperty rates 12 904 241 11 910 914Transfer revenueGovernment grants & subsidies 131 127 105 118 420 966Fines 1 199 370 236 875Transfer of halls - 5 839 066

145 230 716 136 407 821

12. Property rates

Rates received

Residential 1 110 508 443 021Commercial 3 819 674 8 928 504Small holdings and farms 906 530 684 505Rural Communal Land 3 177 830 2 991 909Public Service 17 627 9 972Specialised Properties 5 794 459 4 231 524Less: Income forgone (1 922 387) (5 378 521)

12 904 241 11 910 914

13. Service charges

Commercial 1 918 556 373 334Rural communal land 731 016 422 059Residential 1 705 524 913 509Specialised properties (965 678) 284 081

3 389 418 1 992 983

31

Jozini Local Municipality(Registration number KZN 272)Annual Financial Statements for the year ended 30 June 2014

Notes to the Annual Financial StatementsFigures in Rand 2014 2013

14. Government grants and subsidies

Operating grants

Equitable share 83 913 176 70 314 944FMG 1 601 754 1 636 381Fresh produce market 632 331 780 196LGWSETA - 317 128Library grant 1 081 683 1 150 116MSIG 870 860 939 095Supply of water - 1 753 097School crossing - 13 740Synergetic services - 3 658Jozini Town formalisation 2 163 599 849 236Implementation of KZN Pound Act 23 102 775 558EPWP 1 000 000 -Department of Human Settlement 1 142 590 -

92 429 095 78 533 149

Capital grantsNational Electrification Program Grant 4 449 504 7 385 690MIG 31 761 175 32 495 354Sports and Recreation 2 487 331 6 773

38 698 010 39 887 817

131 127 105 118 420 966

Conditional and Unconditional

Included in above are the following grants and subsidies received:

Equitable Share

In terms of the Constitution, this grant is used to subsidise the provision of basic services to indigent community members.

Housing Grant

Balance unspent at beginning of year 83 492 83 492

Conditions still to be met - remain liabilities (see note 9).

The project was completed and an application was submitted to COGTA to utilise the balance of funds for a project of a similarnature.

Municipal infrastructure grant

Balance unspent at beginning of year 81 364 3 254 718Current-year receipts 31 891 000 29 322 000Conditions met - transferred to revenue (31 972 364) (32 495 354)

- 81 364

Conditions still to be met - remain liabilities (see note 9).

Provide explanations of conditions still to be met and other relevant information.

Area 17 water scheme

Balance unspent at beginning of year 521 807 521 807

32

Jozini Local Municipality(Registration number KZN 272)Annual Financial Statements for the year ended 30 June 2014

Notes to the Annual Financial StatementsFigures in Rand 2014 2013

14. Government grants and subsidies (continued)

Conditions still to be met - remain liabilities (see note 9).

The project was completed and an application was submitted to COGTA to utilise the balance of funds for a project of a similarnature.

Ndumo Sportfield

Balance unspent at beginning of year 1 203 736 385 510Current-year receipts 2 225 000 825 000Conditions met - transferred to revenue (2 707 506) (6 774)

721 230 1 203 736

Conditions still to be met - remain liabilities (see note 9).

Establishement of internal control unit

Balance unspent at beginning of year 150 000 150 000

Conditions still to be met - remain liabilities (see note 9).

Ward committee induction training

Balance unspent at beginning of year 23 355 23 355

Conditions still to be met - remain liabilities (see note 9).

Municipal housing sector plan

Balance unspent at beginning of year 11 775 11 775

Conditions still to be met - remain liabilities (see note 9).

Jozini upgrading project

Balance unspent at beginning of year 107 606 107 606

Conditions still to be met - remain liabilities (see note 9).

Jozini value adding centre

Balance unspent at beginning of year 867 014 647 210Current-year receipts - 1 000 000Conditions met - transferred to revenue (632 331) (780 196)

234 683 867 014

Conditions still to be met - remain liabilities (see note 9).

Bhambanana town formalisation

Balance unspent at beginning of year 69 365 69 365

Conditions still to be met - remain liabilities (see note 9).

Synergistic programme

33

Jozini Local Municipality(Registration number KZN 272)Annual Financial Statements for the year ended 30 June 2014

Notes to the Annual Financial StatementsFigures in Rand 2014 2013

14. Government grants and subsidies (continued)

Balance unspent at beginning of year 7 224 10 882Conditions met - transferred to revenue - (3 658)

7 224 7 224

Conditions still to be met - remain liabilities (see note 9).

Ubuhle besiko cultural village

Balance unspent at beginning of year 69 700 69 700

Conditions still to be met - remain liabilities (see note 9).

Bhajana road

Balance unspent at beginning of year 624 412 624 412

Conditions still to be met - remain liabilities (see note 9).

Umnothophansi Ndumo and maize milling project

Balance unspent at beginning of year 1 184 150 1 184 150

Conditions still to be met - remain liabilities (see note 9).

Library grant

Balance unspent at beginning of year 416 789 731 104Current-year receipts 886 000 835 800Conditions met - transferred to revenue (1 080 483) (1 150 115)

222 306 416 789

Conditions still to be met - remain liabilities (see note 9).

IDP Grant

Balance unspent at beginning of year 240 240

Conditions still to be met - remain liabilities (see note 9).

MSIG grant

Balance unspent at beginning of year 269 139 364Current-year receipts 890 000 800 000Conditions met - transferred to revenue (871 129) (939 095)

19 140 269

Conditions still to be met - remain liabilities (see note 9).

FMG

Balance unspent at beginning of year 404 136 785Current-year receipts 1 650 000 1 500 000Conditions met - transferred to revenue (1 602 158) (1 636 381)

34

Jozini Local Municipality(Registration number KZN 272)Annual Financial Statements for the year ended 30 June 2014

Notes to the Annual Financial StatementsFigures in Rand 2014 2013

14. Government grants and subsidies (continued)48 246 404

Conditions still to be met - remain liabilities (see note 9).

Provide explanations of conditions still to be met and other relevant information.

Intergrated national electrification

Balance unspent at beginning of year 9 671 450 8 057 139Current-year receipts 3 000 000 9 000 000Conditions met - transferred to revenue (12 506 643) (7 385 689)

164 807 9 671 450

Conditions still to be met - remain liabilities (see note 9).

Development of recycling centre

Balance unspent at beginning of year 10 730 10 730

Conditions still to be met - remain liabilities (see note 9).

LG expert

Balance unspent at beginning of year 22 384 22 384

Conditions still to be met - remain liabilities (see note 9).

Jozini town formalisation

Balance unspent at beginning of year 3 921 752 1 270 987Current-year receipts - 3 500 000Conditions met - transferred to revenue (2 163 600) (849 235)

1 758 152 3 921 752

Conditions still to be met - remain liabilities (see note 9).

DBSA contribution

Balance unspent at beginning of year 10 365 10 365

Conditions still to be met - remain liabilities (see note 9).

Implementation of pound

Balance unspent at beginning of year 74 754 850 312Conditions met - transferred to revenue (23 102) (775 558)

51 652 74 754

Conditions still to be met - remain liabilities (see note 9).

Spply of solar, water and gyser

Balance unspent at beginning of year 2 312 102 2 665 199Current-year receipts - 1 400 000

35

Jozini Local Municipality(Registration number KZN 272)Annual Financial Statements for the year ended 30 June 2014

Notes to the Annual Financial StatementsFigures in Rand 2014 2013

14. Government grants and subsidies (continued)Conditions met - transferred to revenue - (1 753 097)

2 312 102 2 312 102

Conditions still to be met - remain liabilities (see note 9).

15. Other income

Miscellanous 7 851 4 838School crossing DOT 49 680 -Stadiums, Hall hire and Cemetries 93 545 29 953Pound fines 38 443 -Town planning fees 622 812 -Refunds 81 172 193 391Commission received 13 446 36 832Library fines, Combo signs and trading licences 6 947 13 903Sale of documents 60 160 136 324Clearance Certificate 3 540 900Penalties 5 943 462Ashbin waste management 53 200 6 260Penalties - 1 286 358Employees cellphone deduction 260 361 284 369Discount received 192 639 20 173Coffins for Majalantini 200 2 718Donations 15 500 -Insurance claims 155 320 -Direct deposit clearing 3 168 2 360

1 663 927 2 018 841

36

Jozini Local Municipality(Registration number KZN 272)Annual Financial Statements for the year ended 30 June 2014

Notes to the Annual Financial StatementsFigures in Rand 2014 2013

16. General expenses

Advertising 394 584 309 279Audit committee fees 36 142 59 445Auditors remuneration 2 829 337 2 380 166Bank charges 107 729 60 000Cleaning 94 750 82 550Legal fees 534 016 1 459 952Bonus Annual provision - 90 741Entertainment 1 013 466 332 769Wellness 1 285 292 811 466Accomodation expense 2 125 903 1 428 453Levies - 213 965Motor vehicle Licences 68 808 15 305Fuel and oil 1 215 440 597 044Printing and stationery 641 764 524 849Publicity 198 236 363 974Security (Guarding of municipal property) 2 839 283 1 035 026Subscriptions and membership fees 450 096 400 000Postage and Telephone 4 148 794 3 876 955Training 1 006 995 563 672Subsistance and travelling 4 346 784 2 119 225Uniforms 350 677 377 757Other Expenditure 3 846 372 1 456 463Learners license expenses 62 764 47 484Municipal special programmes and events 4 631 670 2 017 447Poverty alleviation 12 657 146 14 283 171Job expansion programme 2 888 000 249 395Valuation roll expense 1 165 287 -Disaster management 1 026 106 837 315Community participation programmes 447 335 539 379OSS 1 110 807 -Casual workers 3 000 000 -Department of Human Settlement 1 142 590 -

55 666 173 36 533 247

37

Jozini Local Municipality(Registration number KZN 272)Annual Financial Statements for the year ended 30 June 2014

Notes to the Annual Financial StatementsFigures in Rand 2014 2013

17. Employee related costs

Basic 19 081 000 19 887 623Bonus 1 352 054 1 067 638Medical aid - company contributions 1 169 902 940 266UIF 206 846 137 793SDL 304 335 189 877Leave pay provision and Bonus charge 704 720 1 058 144Short term benefit 3 273 000 -Defined contribution plans 3 400 193 3 055 161Travelling allowences 1 593 215 1 326 309Overtime payments 791 458 527 302Long-service awards - 1 926 671Acting allowances - 5 499Housing benefits and allowances 79 261 144 868Cellphone allowance 774 509 198 603

29 730 493 30 465 754

Remuneration of municipal manager

Annual Remuneration 485 916 292 834Car Allowance 263 474 156 917Performance Bonuses 80 550 -Contributions to UIF, Medical and Pension Funds 193 048 192 589Other 51 563 31 499

1 074 551 673 839

Remuneration of chief finance officer

Annual Remuneration 435 585 262 500Car Allowance 234 090 139 417Performance Bonuses 71 550 -Contributions to UIF 147 235 86 796Other 4 019 52 849

892 479 541 562

Remuneration of Director Technical

Annual Remuneration 476 666 187 347Car Allowance 176 303 95 417Contributions to UIF 91 171 86 733Other - 3 763

744 140 373 260

Remuneration of Director Corporate

Annual Remuneration 543 019 363 503Car Allowance 215 610 143 778Performance Bonuses 36 778 -Contributions to UIF 112 727 64 750Other 10 242 14 849

918 376 586 880

38

Jozini Local Municipality(Registration number KZN 272)Annual Financial Statements for the year ended 30 June 2014

Notes to the Annual Financial StatementsFigures in Rand 2014 2013

18. Remuneration of councillors

Executive Major 719 369 448 900Deputy Executive Mayor 435 565 211 759Mayoral Committee Members 2 318 600 1 188 197Speaker 756 159 387 008Councillors 5 581 488 5 425 044

9 811 181 7 660 908

In-kind benefits

The Mayor and Speaker are full-time. Each is provided with an office and secretarial support at the cost of the Council.

The Mayor has use of a Council owned vehicle for official duties.

The Mayor has two full-time bodyguards

19. Finance costs

Finance cost - 470 125Other interest paid 125 000 -

125 000 470 125

20. Auditors' remuneration

Fees 2 829 337 2 380 166

21. Expenditure related to grants

Expenditure related to operational conditional grantsFMG 1 623 333 1 462 330Ndumo Sports field 2 017 6 773Library grant 1 070 783 856 248MSIG 358 545 939 095School crossing DOT - 32 970Synegistc (1) 122 374EPWP 998 953 -Jozini town formalisation 556 140 503 861LGWSETA - 9 576Supply of solar water gysers - 1 753 097Electricity Reticulation/Technical - 6 895 432

4 609 770 12 581 756

39

Jozini Local Municipality(Registration number KZN 272)Annual Financial Statements for the year ended 30 June 2014

Notes to the Annual Financial StatementsFigures in Rand 2014 2013

22. Contingencies

Contingent liabilities

Matter Name of claimant Date of claim PossibleLiability

Progress on claim Total

Unlawfularrest andassault

Mr Mthembu& MrNgcamphalala

- 90 000 Awaiting claimant to applyfor trial date

90 000

Breach ofcontracts

Mothey consultingengineers

- 1 200 000 Awaiting trial date. haveattended to municipalitiy'sdiscovery Affidavit.Awaiting requested itermsfrom claimant's discoveryaffidavit

1 200 000

VAT Services Preson investments(pty) LTD

- 3 500 000 Awaiting trial date 3 500 000

Contract NkombankombaneGeneral Trading cc

- 300 000 Pleading closed. matterdue to be heard on the 12September 2014. awaitingfor details fromMunicipality as to whomwill be testifying in thecourt.

300 000

Claim fortravelling andaccomodationarrangements

Rennies travel (pty)LTD

- 64 000 Received settlementproposal from claimant'sattorney's. awaiting formunicipalitiy's instruction

64 000

Breach ofcontract

Eezy-Ads - 1 Awaiting claimant to takefurther steps

1

Breach ofcontracts

Siyakwethembaconstruction JVMbuthumaconstruction

- 670 754 Have filed Municipalitiy'splea and counterclaims.Awaiting claimant's plea toMunicipality's plea andcounterclaim

670 754

Unfairdismissals

Ntuli, Ngiba andHlatshwayo

- 15 114 045 Have placed on recordthat Municipality disputesliability for amountclaimed. Awaitingclaimants reply thereto.awaiting for Municipality'sfurther instructions.Summons not yet issued

15 114 045

Claim fordefamation

Ntuli,Ngiba andHlatshwayo

- 3 650 000 Letter of demand issued.summons not yet issued.

3 650 000

- 24 588 800 24 588 800

40

Jozini Local Municipality(Registration number KZN 272)Annual Financial Statements for the year ended 30 June 2014

Notes to the Annual Financial StatementsFigures in Rand 2014 2013

23. Related parties

`

RelationshipsThe Municipal Mayor Refer to note 18The Deputy Mayor Refer to note 18The Speaker Refer to note 18Executive director corporate and community Refer to note 17Executive director technical and planning Refer to note 17Chief financial officer Refer to note 17

Related party transactions

The following councillor had arreas account outstanding for more than 90days at June 30, 2013S.S Macwele 3 832 3 832GP Moodley 369 627 369 627

24. Reconciliation between budget and statement of financial performance

Reconciliation of budget surplus/deficit with the surplus/deficit in the statement of financial performance:

Net surplus per the statement of financial performance 15 973 719 27 471 580

25. Cash generated from operations

Surplus 15 973 719 27 471 580Adjustments for:Depreciation and amortisation 12 697 832 11 213 362Fair value adjustments (550 000) -Debt impairment 2 891 060 563 124Movements in retirement benefit assets and liabilities (152 000) 1 453 000Movements in provisions 251 015 5 008 166Other non-cash items 589 438 (396 127)Changes in working capital:Receivables from exchange transactions 2 653 958 1 969 282Consumer debtors (3 958 890) 1 206 735Payables from exchange transactions 6 521 103 6 053 491VAT 991 243 (1 146 629)Unspent conditional grants and receipts (13 017 316) 77 581

24 891 162 53 473 565

26. Unauthorised expenditure

Unauthorised expenditure 747 769 1 285 023Incurred during the year 25 103 656 -Less approved by council or condoned - (1 285 023)

25 851 425 -

27. Irregular expenditure

Opening balance 46 241 499 46 071 499Add: Irregular Expenditure - current year 93 043 701 170 000

139 285 200 46 241 499

41

Jozini Local Municipality(Registration number KZN 272)Annual Financial Statements for the year ended 30 June 2014

Notes to the Annual Financial StatementsFigures in Rand 2014 2013

28. Deviation from supply chain management regulations

Paragraph 12(1)(d)(i) of Government gazette No. 27636 issued on 30 May 2005 states that a supply chain management policymust provide for the procurement of goods and services by way of a competitive bidding process.

Paragraph 36 of the same gazette states that the accounting officer may dispense with the official procurement process incertain circumstances, provided that he records the reasons for any deviations and reports them to the next meeting of theaccounting officer and includes a note to the annual financial statements.

Buses and gym equipment were procured during the financial year under review and the process followed in procuring thosegoods deviated from the provisions of paragraph 12(1)(d)(i) as stated above. The reasons for these deviations weredocumented and reported to the accounting officer who considered them and subsequently approved the deviation from thenormal supply chain management regulations.

Deviations from SCM procedures ( in terms of section 36) of Municipalsupply chain management requlationsOpening balance 3 159 206 469 507Add: SCM deviations during the year 2 508 696 2 689 699

5 667 902 3 159 206

29. Fringe benefits

The Jozini Municipality has granted fringe benefits to the followingemployees and has incurred cost of their accomodation and only R2500deducted from their salaries each month.Mrs TNS Ngiba 248 975 71 957Mr B. Ntuli 109 676 153 810

358 651 225 767

30. Debt impairment

Debt impairment 2 891 060 563 124

31. Investment revenue

Interest revenueInterest received: Investments and current account 2 011 226 2 715 312

32. Depreciation and amortisation

Property, plant and equipment 12 697 832 11 213 362

33. Contracted services

Other Contractors 4 799 086 3 191 815

42

Jozini Local Municipality(Registration number KZN 272)Annual Financial Statements for the year ended 30 June 2014

Notes to the Annual Financial StatementsFigures in Rand 2014 2013

34. Commitments

Authorised capital expenditure

Approved and contracted Property, plant and equipment 4 146 676 20 955 346

Approved but not yet contracted for Property, plant and equipment 18 000 000 11 794 550

This committed expenditure relates to plant and equipment and will be financed by available bank facilities, and funds internallygenerated.

Operating leases - as lessee (expense)

Minimum lease payments due - within one year - 540 064 - in second to fifth year inclusive - 225 546

- 765 610

Operating lease payments represent rentals payable by the municipality for certain of its office properties. Leases arenegotiated for an average term of seven years and rentals are fixed for an average of three years. No contingent rent ispayable.

35. Changes in accounting policy

During the year the Municipality changed its accounting policy in terms of recognizing income from Traffic Fines. The reason forchange in accounting policy is to comply with the requirements of IGRAP 1 on Revenue Recognition which require municipalityto recognize income from Traffic Fines when they are issued while traffic fine income was previously recognised on a cashbasis. The standard has been applied prospectively and no comparatives have been adjusted.

43

Jozini Local Municipality(Registration number KZN 272)Annual Financial Statements for the year ended 30 June 2014

Notes to the Annual Financial Statements

36. New standards and interpretations

36.1 Standards and interpretations effective and adopted in the current year

In the current year, the municipality has adopted the following standards and interpretations that are effective for the currentfinancial year and that are relevant to its operations:

Standard/ Interpretation: Effective date:Years beginning on orafter

Expected impact:

GRAP 25: Employee benefits 01 April 2013 GRAP 1 (as revised 2012): Presentation of Financial

Statements01 April 2013

GRAP 3 (as revised 2012): Accounting Policies, Change inAccounting Estimates and Errors

01 April 2013

GRAP 9 (as revised 2012): Revenue from ExchangeTransactions

01 April 2013

GRAP 13 (as revised 2012): Leases 01 April 2013 GRAP 16 (as revised 2012): Investment Property 01 April 2013 GRAP 17 (as revised 2012): Property, Plant and Equipment 01 April 2013 GRAP 31 (as revised 2012): Intangible Assets (Replaces

GRAP 102)01 April 2013

IGRAP16: Intangible assets website costs 01 April 2013 IGRAP1 (as revised 2012):Applying the probability test on

initial recognition of revenue01 April 2013

36.2 Standards and interpretations issued, but not yet effective

The municipality has not applied the following standards and interpretations, which have been published and are mandatoryfor the municipality’s accounting periods beginning on or after 01 July 2014 or later periods:

Standard/ Interpretation: Effective date:Years beginning on orafter

Expected impact:

GRAP 20: Related parties 01 April 2014 GRAP108: Statutory Receivables 01 April 2015

The aggregate impact of the initial application of the statements and interpretations on the municipality's annual financialstatements is expected to be as follows:

44

Jozini Local Municipality(Registration number KZN 272)Annual Financial Statements for the year ended 30 June 2014

Notes to the Annual Financial StatementsFigures in Rand 2014 2013

37. Employee benefit obligations

Defined benefit plan

Independent valuers, ZAQ Consultant and Actuaries carried out a valuation on the post employment medical aid benefit for the2014 financial year.The principal actuarial assumptions used were as follows:

The amounts recognised in the statement of financial position are as follows:

Carrying valuePresent value of the defined benefit obligation-partly or wholly funded (1 301 000) (1 453 000)

Members withdrawn from services: (Average for males and females)

Age 20-24 %16.00 %24.00Age 25-29 %12.00 %18.00Age 30-34 %10.00 %15.00Age 35-39 %8.00 %10.00Age 40-44 %6.00 %6.00Age 45-49 %4.00 %4.00Age 50-54 %2.00 %2.00Age 55-59 %1.00 %1.00

- -

Changes in the present value of the defined benefit obligation are as follows:

Opening balance 2 906 000 1 453 000Current service cost 273 000 -Interest cost 125 000 -Actuarial (gain)/loss (550 000) -Net expense recognised in the statement of financial performance 1 301 000 1 453 000

4 055 000 2 906 000

Net expense recognised in the statement of financial performance

Post Retirement Medical Aid 1 301 000 1 453 000

Calculation of actuarial gains and losses

Post Retirement Medical Aid (550 000) -

Key assumptions used

Assumptions used at the reporting date:

Discount rates used %8.94 %7.89CPI (Consumer Price Index) %7.05 %6.14Medical Aid Contribution Inflation %8.05 %7.14Net discount rate %0.82 %0.70Average retirement age 65 65

38. Prior period errors

Independent valuers, ZAQ Consultant and Actuaries carried out a valuation on the post employment medical aid benefit for the2014 financial year. An amount of R1,453,000 should have been accounted for in the prior year as a post retirement medicalaid obligation.

45

Jozini Local Municipality(Registration number KZN 272)Annual Financial Statements for the year ended 30 June 2014

Notes to the Annual Financial StatementsFigures in Rand 2014 2013

38. Prior period errors (continued)

The correction of the error(s) results in adjustments as follows:

Statement of financial positionPost retirement obligation benefit - 1 453 000

Statement of Financial PerformancePost retirement obligation contribution - 1 453 000

39. Events after the reporting date

There are no material events that occured after the reporting date.

40. Fruitless and wasteful expenditure

41. Finance costs

Finance costs 125 000 470 125

42. Budget differences

Material differences between budget and actual amounts

1. Property rates-Property rates have been overly projected ,considering the fact that Jozini Municipality clients arecomplaining of having to pay rent to the Ingonyama Trust Board and also pay property rates to the Municipality. A huge numberof residents are acutely affected by poverty and unemployment.2.Service rates-Customers are complaining about a huge increase in tariff charges for example a 100% increase in servicecharges for commercial , industrial and tourism sectors for a once a week upliftment. This exorbitant tariffs have resulted to anover projection in service charges3.Investment revenue-Over projection in investment revenue resulting from an overestimation in Municipality Investments .4.Other own revenue-The municipality has collected more than budgeted for items like hall hire , town planning fees andgained more in items like discount received.5.Depreciation-There was gross under budgeting in depreciation as only R1,000,000 was budgeted .6.Transfers and grants-The municipality has spent more than budgeted in grants like EPWP. The Municipality has more than200 casual workers in 20 wards , earning 1,200 each 94 general workers, earning R2,500 each per month.7.Other expenditure-The municipality did not budget for expenses like allowance for debt impairment.8.Debt Impairment-The municipality has also written off duplicated accounts and those accounts which should not be in thedebtors book because we don’t collect refuse for. We have also under budgeted for debt impairment.

46

ANNEXURE BAuditor General Audit Queries - Action Plan

No. AFS Component Criteria AGSA Finding Root cause Remedial action required Status/Progress to date Responsibility Due date

1 PPE

1.1 No assets system in place

According to Section 63(1) (a) of the

MFMA, the accounting officer of a

municipality is responsible for the

management of the assets of the

Municipality, including safeguarding

and the maintanance of those assets.

Section 63(2)(a) further states that

the accounting officer must for the

purposes stated above take all

reasonable steps to ensure that the

municipality has and maintains a

management, accounting and

information system that accounts for

the assets and liabilities of the

municipality.

Upon inquiry with Sandile Mpontshane

(Asset Officer), it was discovered that the

municipality uses an editable spread sheet

that is not password protected as an asset

register which could result to theft of assets

without detection because the spreadsheet

does not keep track of any editing and loss

of data related to assets as the information

is not backed up along with other

information

Under utilisation of the financial system

Lack of internal controls

Perfomance of service providers not

monitored by a senior official adequate

skills in asset management

1.We are using Pastel Evolution Accounting System

with Asset Module and will load the Fixed Asset

Register onto Pastel Fixed Assets module that is

backed up regularly, as it keeps logs of edits and

deletion after the figures for the prior year have been

corrected as the FAR was adjusted to agree with the

AFS in 20112012 financial year reuslting in revision of

usefull lives incorrectly calculated thus throwing out

depreciation figures.

2.The system and the general ledger accounts will be

reconciled on a monthly basis and be reviewed by a

senior official.

3.Appointment of service provider to conduct asset

verification and compile a GRAP compliant FAR as per

GRAP17

In progressCFO: Finance/Finance Manager & Asset

Officer30 March 2015 & Ongoing

1. Review municipal accounting policies for movable,

immovable, finance lease and any other assets to

ensure correct accounting treatment of specific classes.

In progressCFO: Finance/Finance Manager & Asset

Officer30-Jan-15

2. Obtain the FAR for 2011/2012 and analyse the logic,

correctness and reasonableness of the method,

percentage, residual value, calculation of depreciation,

review useful lives, analyse impairment calculations,

investigate of obsolete, damaged and unusual items

and do the same for 2013 and 2014.

In progressCFO: Finance/Finance Manager & Asset

Officer30-Jan-15

3. Review schedules to ensure correctness on leased

assets, investment property and intangible

assets.Update the FAR, prepare adjusting journals and

prepare PPE note and update AFS accordingly. In progressCFO: Finance/Finance Manager & Asset

Officer30-Jan-15

4. Finalise & Submit the GRAP compliant FAR for

2014/2015In progress CFO: Finance/Service Provider(Assets) 30-May-15

2 SCM

2.1 Tenders not advertised for 14 days

Section 22(1) of the Municipal Supply

Chain Management (SCM)

Regulations states that :

An SCM policy must determine the

procedure for the invitation of

competitive bids and must stipulate -

(b) the information on a public

advertisement must contain, which

must include -

(1) the closure date for the

submission of bids which may not be

less than 30 days, in the case of

transactions over R10 million, or

which are of a long term nature, 14

days in any other case from the date

on which the advertisement is placed

in a newspaper, subject to sub

regulation

(2) . Section 22 (2) of the SCM

Regulations states that an SCM

policy may allow the accounting

officer to determine a closer date for

the submission of bids which is less

that 30 or 14 days requirement, but

only if such shorter period can be

justified on the grounds of urgency or

emergency or any exceptional case

where it id impracable or imposible to

follow the official procurement

process.

Two adverts were discovered to have been

advertised for less than five days, both of

the above are in contravention with the

Treasury's SCM Regulations as

expenditure cannot be justified under

grounds of urgency or exceptional cases

and it was also not impracticable or

impossible to follow normal procurement

process.

Non compliance with SCM Regulations

and SCM Policy not aligned to SCM

Regulations.

1.2

Depreciation Incorrectly Calculated

GRAP 17, the depreciation method

used shall reflect the pattern in which

the asset's future economic benefits

or service potential are expected to be

consumed by the entity,

In accordance with GRAP 17 sec 55 "

The depreciable amount of an asset

shall be allocated on a systematic

basis over its useful life,

GRAP 17 sec 58 continues to state

that "where asset management

policies exacerbate the wear and tear

of an asset, its useful life is

reassessed and adjusted accordingly"

During the audit of depreciation for the

following asset numbers: 102, 304, 330,

007, 1247 and 1256, it was noted that the

depreciation was incorrectly calculated.

Furthermore the explanation of how

depreciation was calculated could not be

obtained.

The remaining useful life of the assets has

been adjusted to zero with no reasonanble

explanation as to why this has occured.

As a result it appears that the assessment

of the useful lives of assets has not been

conduted as required by GRAP 17.

Incorrect values used in the asset register

for 2011/2012.

The useful lives of assets were not

reviewed by management.

Staff members do not understand the

applicable financial reporting framework

and requirements of

(GRAP 17).

Poor monitoring of work performed by

service providers by management.

1. 100% audit of all contracts awarded during the

20122013 , 20132014 and 20142015 financial year

2. Disclose the expenditure as irregular expenditure

3. Align SCM Policy to SCM Regulations.

4. Checklist be developed to identify non compliance

with SCM Regulations and related acts.

5. Training of bid committee members

60% complete CFO Finance/SCM Manager/SCM Officer 30-Jan-15

2.1 Tenders not advertised for 14 days

Section 22(1) of the Municipal Supply

Chain Management (SCM)

Regulations states that :

An SCM policy must determine the

procedure for the invitation of

competitive bids and must stipulate -

(b) the information on a public

advertisement must contain, which

must include -

(1) the closure date for the

submission of bids which may not be

less than 30 days, in the case of

transactions over R10 million, or

which are of a long term nature, 14

days in any other case from the date

on which the advertisement is placed

in a newspaper, subject to sub

regulation

(2) . Section 22 (2) of the SCM

Regulations states that an SCM

policy may allow the accounting

officer to determine a closer date for

the submission of bids which is less

that 30 or 14 days requirement, but

only if such shorter period can be

justified on the grounds of urgency or

emergency or any exceptional case

where it id impracable or imposible to

follow the official procurement

process.

Two adverts were discovered to have been

advertised for less than five days, both of

the above are in contravention with the

Treasury's SCM Regulations as

expenditure cannot be justified under

grounds of urgency or exceptional cases

and it was also not impracticable or

impossible to follow normal procurement

process.

Non compliance with SCM Regulations

and SCM Policy not aligned to SCM

Regulations.

2.2 Price Quotation not obtained

Section 12(1)© of the Supply Chain

Management Regulations states

that an SCM Policy must provide for

the procurement of goods and

services by way of a formal written

quotations for the procurement of a

transaction value of R10 000 to R200

000.

Furthermore, section 17 (1) (a) states

that quotations must be obtained

from at least three different providers

whose names appear on the list of

accredited prospective providers of

the Municipality.

Vouchers inspected and quotations from

suppliers could not be obtained.Non compliance with SCM Regulations

2.3Non compliance with SCM Regulations

(Suppliers in the service of the state)

SCM Regulations 13 states that an

SCM policy must state that the

municipality may not consider a

written quotation or bid unless the

provider who submitted the quotation

or bid has indicated -

(i) whether he or she is in the service

of the state, or has been in the

service of the in the previous twelve

months

(ii) if the provider is not a natural

person, whether any of its directors,

managers, principal shareholders or

stakeholders is in the service of the

state, or has been in the service of

the state in the previous twelve

months.

(iii) whether a spouse, child or parent

of the provider or of director,

manager, shareholder or stakeholders

referred to in subparagraph (ii) is in

the service of the state, or has been

in the service of the state in the

previous twelve months.

No declaration of interest and supplier is in

the service of the state related to

Councillors and Employees

Non Compliance with SCM Regulation

1. 100% audit of all contracts awarded during the

20122013 , 20132014 and 20142015 financial year

2. Disclose the expenditure as irregular expenditure

3. Align SCM Policy to SCM Regulations.

4. Checklist be developed to identify non compliance

with SCM Regulations and related acts.

5. Training of bid committee members

60% complete CFO Finance/SCM Manager/SCM Officer 30-Jan-15

1. 100% voucher audit and all vouchers with no three

quotations be declared irregular expenditure.

2. All SCM Registers( i.e Deviations, irregular, fruitless

and wasteful and unauthorised expenditure)be updated

accordingly and thereafter on a monthly basis and be

reviewed by senior official.

3. A checklist be developed to identify non compliance

with the act at procurement stage and also to ensure

that all vouchers are properly authorised.

4. Training of SCM and Finance expenditure staff on

proper processes and compliance issues

60% Complete CFO Finance/SCM Manager/SCM Officer 30-Jan-15

1. 100% voucher audit and identify vouchers where

payments were made to suppliers in the service of the

state and declare them as irregular and disclose as

such in the AFS.

2. Quantify all transactions where there was conflict of

interest which affected councillors and employees and

investigate them.

3. Workshop councillors and municipal officials on the

SCM Regulations including(declaration of interest) and

importance and consequence of such non compliance.

4. Review SCM Policy to be aligned to the SCM

Regulations

60% Complete CFO Finance/SCM Manager/SCM Officer 30-Jan-15

2.5 Condoned Irregular Expenditure

In terms of section 170 of the MFMA,

only the National Treasury may

condone non- compliance with a

regulation issued in terms of MFMA

or a condition imposed by the Act

itself.

The municipal Council therefore has

no power in terms of the MFMA to

condone any act of non compliance in

terms of the MFMA or any of its

regulations

Council may however condone any

other irregular expenditure

National Treasury Circular 68 states

that : In terms of section 32 (2) (b)

irregular expenditure may only be

written off by Council if, after an

investigation by Council Committee,

the irregular expenditure is certified

as irrecoverable. In other words

writting off is not a primary response ,

its a sub ordinate to the recovery

processes, and may only take place if

the irregular expenditure is certified

by Council as irrecoverable, based on

the findings of an investigation.

Upon the inspection of the notes to the

financial statements, Note 27 of the

financial statements indicates that irregular

expenditure of R46 071 499 was condoned

in 2013/14.

However upon requests of the investigation

that was conducted on this amount, no

information could be provided to the

auditors, also the approval to condone the

irregular expenditure from National

Treasury or Council could not be provided

to the auditors.

None compliance with the act

Lack of understanding of the application

of the act by management

1. Amount written off be reversed and restated in the

Annual Financial Statements

2. Conduct investigation on disclosed amount

3. Table to Council the outcome of the investigation

4. Lodge the application for condonation with Council or

Treasury as informed by the outcome of the

investigation.

5. Train SCM Officials and Management on compliance

and procedures and processes involved in dealing with

SCM Registers

20% complete CFO Finance/SCM Manager/SCM Officer 30-Mar-15

2.3Non compliance with SCM Regulations

(Suppliers in the service of the state)

SCM Regulations 13 states that an

SCM policy must state that the

municipality may not consider a

written quotation or bid unless the

provider who submitted the quotation

or bid has indicated -

(i) whether he or she is in the service

of the state, or has been in the

service of the in the previous twelve

months

(ii) if the provider is not a natural

person, whether any of its directors,

managers, principal shareholders or

stakeholders is in the service of the

state, or has been in the service of

the state in the previous twelve

months.

(iii) whether a spouse, child or parent

of the provider or of director,

manager, shareholder or stakeholders

referred to in subparagraph (ii) is in

the service of the state, or has been

in the service of the state in the

previous twelve months.

No declaration of interest and supplier is in

the service of the state related to

Councillors and Employees

Non Compliance with SCM Regulation

2.4Councillor's / Employees disclosure of

interest

According to Schedule 1 of the

Municipal Systems Act, Code of

Conduct for Councillors, 7.

Declaration of interest -

(1) When elected or appointed, a

councillor must within 60 days

declare in writing to the Municipal

Manager the following financial

interests held by the councilor

(a) Shares and securities in any

company

(b) membership and close

corporation

(f) financial interest in any business

undertaking ect.

(2) Any change in the nature or detail

of the financial interests of councillor

must be declared in writing to the

municipal manager annually

Suppliers traded with the Municipality that

has a relationship with the person in the

service of the auditee

Non Compliance with Municipal Systems

Act

1. 100% voucher audit and identify vouchers where

payments were made to suppliers in the service of the

state and declare them as irregular and disclose as

such in the AFS.

2. Quantify all transactions where there was conflict of

interest which affected councillors and employees and

investigate them.

3. Workshop councillors and municipal officials on the

SCM Regulations including(declaration of interest) and

importance and consequence of such non compliance.

4. Review SCM Policy to be aligned to the SCM

Regulations

60% Complete CFO Finance/SCM Manager/SCM Officer 30-Jan-15

1. Encourage councillors and officials to honestly

declare all their direct business interest annually,

2. Process must be put in place to monitor declarations

made by Councillors and Officials,

3. Conduct investigations for non disclosure.

In progress CFO Finance/SCM Manager/SCM Officer 30-Jan-15

2.6 Irregular Expenditure

Section 62(1)(d) of the Municipal

Finance Management Act states that

the accounting officer of a

municipality is responsible for

managing the financial administration

of the municipality must for this

purpose take all reasonable steps to

ensure that unauthorised, irregular or

furitless and other losses are

prevented

During the audit of expenditure certain

transactions were found not to be in

accordance with the Supply Chain

Management (SCM) policy of the

municipality and municpal SCM regulations

Municipal SCM regulations were not

adhered to as the SCM policy is not

aligned to the treasury regulations

1. 100 % voucher audit for 2012 & 2013 financial year

2. 100% voucher audit for 2013 &2014 financial year

3. Quantify expenditure not in line with SCM

Regulations and disclose as irregular expenditure and

conduct investigations

4. Develop checklist to be used for each voucher to

identify non compliance with relevant legislation

40% Complete CFO Finance/SCM Manager/SCM Officer 30-Jan-15

2.7SCM Policy is not aligned to SCM

regulations

The Municipal Supply Chain

Management Regullations

(a) Petty Cash transactions

R2 000.00

(b) written or verbal R2000 up

R10 000.00

© Formal R10 000.00 to

R 200 00.00

(d) A competitive bidding process

(i) Procurements above a

transactions value of R200 000.00

(VAT) and procurement of long term

contracts

Whereas Jozini Municipality Supply

Chain Policy states the following : (a)

Petty Cash =R5 000.00 (c) formal

written quotation R200 000 up to

R499 999.00 (d) competetive bidding

process R500 000.00

The entity's SCM Policy is contradictory to

the requirements of the SCM regulations.

The SCM regulation 12(2) (a) indicates that

the SCM Policy may allow the accounting

officer to lower, but not to increase the

threshold valued as specified in the SCM

Regulations

Non compliance with SCM Regulations

1. Align the SCM Policy to SCM Regulations

2. Workshop the draft policy to Councillors and Officials

3. Submit the policy to Council for approval and

implement.

80% Complete CFO Finance / SCM Manager 30-Jan-15

2.8Payments not approved by the

Accounting Officer and CFO

According to Section 11(1)(a) of the

Municipal Finance Management Act,

only the accounting officer or the cfo

may withdraw money or authorise the

withdrawal of money from any of the

Municipality's bank accounts

Upon the audit of expenditure, several

payments made were found to have not

been approved by the accounting officer

and cfo

Poor controls over daily and monthly

processing of transactions

Negligence

Non compliance with internal controls

1. Controls will be put in place to ensure that all

vouchers are properly authorised before the payment is

made.

2.The Accounting Officer and the CFO should ensure

that the payments are authorised and vouchers are

signed thereof as evidence thereof

In progress MM and CFO

1/30/2015

&ONGOING

2.9Bid adjudication committee

membership

SCM Regulations 29(2) requires that

the bid adjudication committee

consist of at least four senior

managers

Upon inspection of various bid adjudication

committee minutes and inquiry with the

acting CFO, It was determined that the

committee does not have at least four

senior managers

Non Compliance with SCM Regulation

1. The Accounting Officer should restructure the bid

committees to ensure that they are compliant with

relevant legislation.

2. The appointment letters should be issued to each

committee member stating the minimum following

information:

(i) Name , Surname and Position

(ii) ID No and Employee Number

(iii) Committee appointed to

(iv) Effective date and duration.

NB: Signed Copies for these letters should be filed in

the employees individual personal file.

3. The policy should be revised and state that the

Municipality does not have four senior managers as per

its structure and that the next line of managers will be

considered for the fourth adjudication committee

member. The above can only be implemented after

approval by Council.

4. Train bid committees and management of their

functions and compliance with SCM related legislation.

In progress MM and CFO 30-Jan-15

2.10Suppliers not paid within 30 days of

receipt of invoice

Section 65(2)€ of the MFMA states

that the accounting officer must for all

purposes ensure that all money owing

by the Municipality be paid within 30

days

During the audit it was noted that some of

the suppliers were not paid within 30 days

Non Compliance with the Act

Weakness in the internal controls

1. Create invoice register which will be monitored

monthly and reviewed by Senior Official

2. Date stamp invoices when received and use that date

as the basis to calculate 30 days

3. All invoices should be stamped "PAID" after the

payment has been made to avoid duplication

4. Perfom monthly creditors reconciliations with ageing

and be reviewed by Senior Offical

5. Design a clear payment procedure outlining the steps

and segregation of duties in the procurement process.

6. Punitive measures for officials found to be in

transgression of the this act.

In progress CFO Finance/ Expenditure Accountant 30-Jan-15

2.11Weaknesses in Internal Controls -

SCM

In terms of Section 12(3) of The

Supply Chain Management (SCM)

Regulations:

A supply chain management policy

must state -

(a) that goods or services may not

deliberately be split into parts or

items of a lesser value merely to

avoid complying with the

requirements of the policy.

Section 10(3) of the municipality's

SCM Policy states that goods or

services may not deliberately be split

into parts or items of a lesser value

merely to avoid complying with the

requirements of the policy, however

upon inquiry with the SCM Manager

of how this is ensured, he stated that

there are no detection controls in

place to ensure compliance with this

regulation. Therefore it cannot be

established whether this regulation is

complied with.

(2) In terms of section 116(2)(b) of

the Municipal Finance Management

Act (MFMA), the accounting officer of

a municipality must monitor on a

monthly basis the performance of the

contractor under contract or

agreement.

Upon enquiry from the SCM Manager, it

was confirmed that there are no controls in

place to monitor perfomance of contractors

on a monthly basis Upon inquiry from the

SCM Manager it was ascertained that there

are no controls in place to ensure that all

bids submitted are sealed.

Upon inspection of the SCM policy of the

municipality, it was ascertained that Section

48(1) states that "Persons aggrieved by

decisions or actions taken in the

implementation of this supply chain

management policy, may lodge within 10

and 5 days in respect of projects with the

value above R2m and value above R500

000 but less than R2m respectively, a

written objection or complaint against the

decision or action"

Furthermore SCM notice number 14/13/14

published on the 9th of May 2014, signed

by Municipal manager Mr B Ntuli was

inspected. This notice required objections to

be sent up to the 16 of May 2014. These

are only 7 days after the publishing of the

SCM notice.

Both the SCM policy of the municipality and

the notice is in contravention of the

regulations as it does not allow 14 days for

objections to be submitted by aggrieved

parties.

Non compliance with SCM Regulations

1. Management will ensure that proper internal controls

around SCM are implemented and

2. that all bid committee members are trained to assit

them in execution of their respective duties.

3. Management will also ensure that the contractors/

service providers perfomance is monitored on monthly

basis.

4. SCM Policy to be aligned with the SCM Regulations

In progress CFO Finance / SCM Manager 30-Jan-15

2.12Construction projects not registered

with CIDB

Section 22(3) The CIDP Act states

that all construction contracts above

the precribed value must be recorded

in the register

Through enquiry with the SCM Manager it

was noted that the Municipality does not

and has never registered any of its

contstruction contracts above R200 000

with CIDB

Non compliance with lawsManagement will register contracts above R200 000.00

with CIDBIn progress

CFO Finance/ Acting Technical Services

DirectorImmediate

2.13Ability to execute contract not

evaluated by the bid evaluation

committee

Section 28 (1)(b) of the Supply Chain

Management regulations states that,

a bid evaluation committee must

evaluate each bidders ability to

execute the contract

Upon the inspection of minutes of the bid

evaluation committee for the meeting that

was held on 30 September 2013, where the

tender to construct Slindokuhle creche was

given to Mantegu & Njenge Industries, it

could not be found on the minutes that each

bidder's ability to execute the contract was

considered by the committee

Non compliance with laws

that all bid committee members are trained to assit

them in execution of their respective duties. In progress CFO Finance/SCM Manager 30-Jan-15

2.14 Consequence Management

Section 32 (2) of the Municipal

Finance Management

Act(MFMA) states that a municipality

must recover unauthorised, irregular

or fruitless and wasteful expenditure

from the person liable for that

expenditure

According to Section 5(3)(a) of the

disciplinary regulations for senior

managers, if the municipal council is

satisfied that there is a reasonable

cause to believe that an act of

misconduct has been committed by

the senior manager, the municipal

council must within seven days

appoint an independent investigator

to investigate the allegations of

misconduct.

There were allegations of fraud and

corruption related to the abuse of the SCM

systems in the municipality which led to the

suspension of the former CFO, Technical

Director and MM. However no documents

were provided to the auditors of the

investigation that followed these

suspensions.

As a result the accounting officer did not

comply with the requirements of Section 37

of the SCM policy.

After having suspended the 3 officials as

per the above, council did not appoint an

independent investigator to investigate the

allegations within 7 days, which is not in

line with disciplinary regulations for senior

managers.

No system of consequence management

within the municipality

Senior managers and other employees should be held

accountable for unauthorised, irregular and fruitless and

wasteful expenditure reported in prior year, fraud and

improper conduct in SCM, financial misconduct and any

other act not in line with the code of conduct or amounts

to fraud, as such there needs to be a clearly defined

policy to deal with these matters. This policy must be in

line with The Disciplinary Regulations for Senior

Managers and Section 171 of the MFMA.

In progress MM/Director Corporate Services 30-Jan-15

2.15 Weaknesses in use of Consultants

In terms of section 11(3) (a) of the

municipal systems act which states

“A municipality exercises its

legislative or executive authority by—

Developing policies, plans,

strategies,and programs, including

setting of targets for delivery which

will include Demand Management,

Transfer of Skills and Clear Terms of

Reference

Weaknesses were identified with regards to

management of the use of consultant

including amongst others,

1. Leadership,

2. Planning and appointing process.

3.Interrnal capacity ,

4. training and skills transfer and

evaluating consultants against perfomance

5. Perfomance management and

monitoring of consultants

Lack of internal controls to govern

processes around the the hiring of

consultants, transfer of skills by

consultants to employees and monitoring

of services provided by consultants

1. Develop a strategy that defines the main purpose and

objective for appointing consultants and measures to

adress over reliance.

2. Analyse the extent of use consultants

3. Conduct a formal needs assessment before

appointing consultants and ensure that contracts in

place where filled positions exist in the establishment

are scrutinised and corrective action taken.

4. Terms of reference to include transfer of skills

specifying the nature, scope and goals of the training

programme

5. Service Providers (Consultants will be monitored by

staff member who is reletively senior with adequate

skills and experience to ensure that work done and

progress made by consultants is effective.

6. Review all current contracts and ensure that SLA'S,

contracts and terms of reference are agreed upon and

progress is being monitored on the monthly basis.

In progress All HOD's 30-Jan-15

3.VAT

3.1 VAT Reconciliation

As per Section 62(1) (c) of

the Municipal Finance Management

Act No. 56 of 2003, the accounting

officer must take all reasonable steps

to ensure that the municipality has

and maintains effective, efficient and

transparent systems of financial and

risk management and internal control.

During the audit of VAT, it was noted that

the municipality did not reconcile the

VAT 201 returns to the VAT accounts in the

general ledger on the monthly basis and at

year end.

Lack of internal controls

1. The VAT returns will be reconciled to the general

ledger on a monthly basis,

2. and at year end the VAT as prepared on the payment

basis will be converted to accrual basis by recording on

the financial statement all amounts as per VAT input,

output and the amount as per the VAT return.

3. A year end reconciliation will be prepared and the

financial statements should be revised in accordance

with the year end reconciliation.

70% CFO Finance/Asset Officer 31-Dec-14

3.2 VAT Incorrectly claimed

As per the VAT act, where goods or

services are acquired or imported by

a vendor partly for consumption, use

or supply (hereinafter referred to as

the intended use) in the course of

making taxable supplies and partly for

another intended use, the extent to

which any tax which has become

payable in respect of the supply to the

vendor or the importation by the

vendor, as the case may be, of such

goods or services or in respect of

such goods under section 7 (3) or any

amount determined in accordance

with paragraph (b) or (c) of the

definition of “input tax” in section 1, is

input tax, shall be an amount which

bears to the full amount of such tax or

amount, as the case may be, the

same ratio (as determined by the

Commissioner in accordance with a

ruling as contemplated in section 41A

or 41B) as the intended use of such

goods or services in the course of

making taxable supplies bears to the

total intended use of such goods or

services:

During the audit of expenditure it was found

that VAT on some instancesn was

incorrectly calculated

Lack of management supervision

1. Management will review all invoices with VAT

implications to ensure the correct amount for input

VAT was claimed,

2.Should material discrepancies be found, management

should make necessary disclosures to The Receiver on

the next return.

3. Training will be conducted for staff responsible for

VAT

80% CFO Finance/Asset Officer 30-Jan-15

Where a supply of goods is deemed

by section 8 (10) to be made and

both the recipient and the supplier in

relation to that supply are registered

vendors, the recipient shall, within 21

days after the day on which such

supply is deemed by section 9 (8) to

be made, create and furnish to the

supplier a document which contains

the particulars specified in this

section, and such document shall for

the purposes of this Act be deemed to

be a tax invoice provided by the

supplier under subsection (1) of this

section.

During the audit of expenditure, it was noted

that some invoices did not have the VAT

details of the municipality as required by the

section of the VAT Act.  

Lack of management supervision

Management will have a checklist and ensure all tax

invoices contain both the suppliers details as well as the

municipality's details and also that all tax invoices

meets the minimum requirement as defined by the VAT

Act.

In progressCFO Finance/Financial Manager & Asset

Officer30-Jan-15

(4) Except as the Commissioner may

otherwise allow, and subject to this

section, a tax invoice (full tax invoice)

shall be in the currency of the

Republic and shall contain the

following particulars:

Management will investigate this supplier and

recover ALL monies paid to this supplier in the 2013/14

financial year as VAT if the supplier is found not to be a

registered VAT vendor.

a.) The words “tax invoice” in a

prominent place;

Also, management will consider reporting the supplier to

the Receiver of Revenue if the supplier is found to be

fraudulently charging VAT.

b.) the name, address and VAT

registration number of the supplier;

All invoices received will be reviewed to ensure that they

are made out to the municipality. The municipal

manager should sign off on the invoice only when all of

the relevant details per the invoice have been reviewed

and accepted as being correct.

VAT details not on supplier invoice ,

supplier not a VAT vendor, Invoices

does not reflect the VAT number of the

Municipalityand Invoices not adressed

to the Municipality

3.3

Upon the receipt of the invoice, the finance clerk will

ensure that all of the relevant VAT details are recorded

on the invoice. Management will only sign off on an

invoice for payment once all the VAT details on the

invoice have been verified and determined to be correct.

4.DISCLOSURE

GRAP 25 requires an entity to

recognise:

Management will consider the report of the actuary and

include the required disclosure in the financial

statements for the current and prior period.

100%CFO Finance/ Manager Reporting and

Compliance28-Nov-14

(a) a liability when an employee has

provided service in exchange for

employee benefits to be paid in the

future; and

 - The supporting documents to test the accuracy and

completeness of the report issued by the actuary must

be supplied for audit.

100%CFO Finance/ Manager Reporting and

Compliance28-Nov-14

(b) an expense when the entity

consumes the economic benefits or

service potential arising from service

provided by an employee in exchange

for employee benefits.

 - All disclosure requirements of GRAP 25 must be

considered and applied.100%

CFO Finance/ Manager Reporting and

Compliance28-Nov-14

 - A prior period error note must be included for the

effects of the change relating the the non-disclosure in

the prior year financial statements.

100%CFO Finance/ Manager Reporting and

Compliance28-Nov-14

4.2

Approved and contracted

commitments are where the

expenditure has been approved and

the contract has been awarded at the

reporting date.

Upon the audit of the municipality's

contracts, it was discovered that the

municipality has the following active capital

contracts as at 30 June 2014: 

There is a lack of understanding of the

requirements of the financial frameworks

for preparation of the financial

statements.

Approved and not yet contracted

commitments are where the

expenditure has been approved and

the contract has yet to be awarded or

is awaiting finalisation at the reporting

date.

4.3 Incorrect disclosure of bad debts

As per Section 62(a) of

the MFMA, “The accounting officer for

a department must keep full and

proper records of the financial affairs

of the department in accordance with

any prescribed norms and

standards."

However per inspection of the supporting

schedules (The Agenda which had been

presented to council, which was approved)

it was established that approval was

received from council to write of a total of R

2 540 007.78 as bad debts, only R 59 101

has been disclosed in the AFS.

Lack of management supervision

Management will immediately investigate reasons for

the above errors made. All errors will be rectified and

the adjusted supporting schedule / listing should be

provided for audit purposes.

100% 28-Nov-14

As per inspection of the reports submitted

by the actuaries, ZAQEN Actuaries (Pty)

Ltd, a report for the post-retirement medical

benefits of the municipality was supplied.

This report has however not been

considered and no disclosure has been

made in the financial statements for an

amount of R1 301 000. No such disclosure

was made in the prior year financial

statements and the report makes reference

to employees that belonged to the scheme

in prior years.

Lack of understanding of requirements of

GRAP

Both categories of commitments will be disclosed on the

financial statements as at 30 June 2014.100%

CFO Finance/ Manager Reporting and

Compliance26-Nov-14

CFO Finance/ Manager Reporting and

Compliance

VAT details not on supplier invoice ,

supplier not a VAT vendor, Invoices

does not reflect the VAT number of the

Municipalityand Invoices not adressed

to the Municipality

3.3

4.1

No post retirement benefit benefits

disclosed in the annual financial

statements and Incorrect disclosure of

GRAP 25

Commitments Disclosure

In assessing the provision as disclosed in

the financial statements, it has been

ascertained that only rates and refuse

debtors have been included in the

calculation and no provision has been made

for traffic debtors and other debtors.

Management will apply a risk based approach when

calculating the provision for bad debts.

Further to that, the provision has been

made based on a percentage of the

outstanding debt and not as stated above.

Management will investigate the above matter and

provide the correct calculations in support of the

provision and any proposed adjustments to the financial

statements.

The total provision per the calculation is R

43 071 873 and the total amount per the

AFS is R41 893 299. The difference is R

1 178 574.

In progress 30-Jan-15

Upon inquiry with the Acting CFO and

through inspection of the lease register it

was noted that the municipality has

operating leases with Nashua Mobile for the

telephone management system and with

Kulanathi Office Automation for the use of

photocopying machines.

However upon inspection of the financial

statements for the necessary disclosures as

required by GRAP 13, no disclosures could

be found on the financial statements.

4.6 Loss on derecognition of asset

GRAP 17 paragraph 73 states that

the gain or loss arising from the

derecognition of an item of property,

plant and equipment shall be included

in surplus or deficit when the item is

derecognised

Through inspection of note 6 of the financial

statements, it was identified that an amount

of R40 058 is disclosed under disposals for

office equipment. Through discussions with

the Asset Officer it was ascertained that this

was a derecognition of laptops stolen.

Lack of management supervision

Lack of proper document management

The statement of financial performance and cash flow

statement will be amended to reflect the above.

Correct mapping on the Caseware file

In progress 30-Jan-15

Lack of management supervision 30-Jan-15

4.4 Provision for doubtful debts

Section 122(1)(a) of the

MFMA requires that every

municipality must for each financial

year prepare annual financial

statements which fairly present that

state of affairs of the municipality.

In progress

CFO Finance/ Manager Reporting and

Compliance

GRAP 13 paragraph 40 state that

lease payments under an operating

lease shall be recognised as an

expense in the statement of financial

performance on a straight-line basis

over the lease term unless another

systematic basis is more

representative of the time pattern of

the user’s benefit.

Operating Lease Disclosure4.5 Lack of management supervision

The financial statements will be prepared taking into

consideration all GRAP requirements to fairly

represent the financial performance and state of the

municipality

In progress 30-Jan-15

CFO Finance/ Manager Reporting and

Compliance

CFO Finance/ Manager Reporting and

Compliance

Management should ensure that all invoices received

prior to year end are recorded as expenditure and

included as accruals.

All orders outstanding at year end must be reviewed

and if it is identified that the goods or services were

received prior to year end, but not invoiced, the

transactions must be recorded as accrued expenditure.

The above transaction must be recorded as an accrual.

4.8Property rates charged in an incorrect

catergory

As per the Municipal Properties Rates

Act section 19, a municipality may in

terms of the criteria set out in its rates

policy levy different rates for different

categories of rateable property.

During the audit it was found that the

following transactions were charged at a

different rate according to their category.

lack of management supervision and

review of the property rates charged on

the system.

The rates charged to vendors will be reviewed and all

vendors will be charged accordingly.

Reconciliation between the General Valuation Roll and

the billing system will be conducted.

Debtors ledger will be reconciled to the billing system on

the monthly basis.

In progress CFO Finance/ Assistant Manager Revenue 28-Feb-15

4.9Incorrect retention disclosed and

retention schedule does not agree to

the gl

65(2)(j) of the MFMA states that the

accounting officer must for the

purpose of subsection (1) take all

reasonable steps to ensure that all

financial accounts of the municipality

are closed at the end of each month

and reconciled with its records.

During the audit, it was determined that the

retention schedule does not agree to the

general ledger, and also certain retentions

recorded as per the schedule do not agree

to the payment certificate

Lack of internal controls

At the end of each month a reconciliation will be

performed between the retention schedule and the

general ledger.

The above difference must be investigated by

management and an explanation provided with the

supporting schedule for the difference.

In progressCFO Finance/ Manager Reporting and

Compliance, Budget Officer2/28/2015 & ONGOING

4.10 GL and Payroll does not agree

section 65(2)(j) of the MFMA states

that the accounting officer must for

the purpose of subsection (1) take all

reasonable steps to ensure that all

financial accounts of the municipality

are closed at the end of each month

and reconciled with its records.

General Ledger does not agree to payroll

related to Councillors and EmployeesLack of internal controls

Management needs to perform a monthly recon of the

payroll to the GL entries, identify differences, obtain

explanations for differences and timely resolve the

variances.

In progressCFO Finance/ Finance Manager/Senior

Payroll Clerk2/28/2015 & ONGOING

5COMPLIANCE, POLICIES , PLANS &

OTHER

100% 26-Nov-14

CFO Finance/ Manager Reporting and

Compliance

4.7 Accruals not accounted for at year end

In accordance with GRAP 19 par

16(b), accruals are liabilities to pay

for goods or services that have been

received or supplied but have not

been paid, invoiced or formally

agreed with the supplier, including

amounts due to employees.

Whilst performing the testing of accruals it

was noted that outstanding invoices at 30

June 2014 were not recorded as accruals

on the accrual listing. 

Lack of management supervision

5.1No permit to operate dumpsite and no

comprehensive waste management

plan

commence an activity listed or

specified in terms of section 24 (2) (a)

or (b) unless the competent authority

or the Minister of Minerals and

Energy, as the case may be, has

granted an environmental

authorisation for the activity

During the audit it was noted that the landfill

site is unlicensed and there is no

comprehensive waste management plan

Non compliance with Act

Management will develop a comprehensive waste

management plan which will, amongst other things

include the licensing of Landfill site.

In progress MM/Director Technical Services 30-Mar-15

5.2Fraud and Prevention Strategy not in

place

Accounting officer of a municipality is

responsible for managing the

financial administration of the entity,

and must for this purpose take all

reasonable steps to ensure that the

entity has and maintains effective,

efficient and transparent systems of

financial and risk management and

internal control. 

Upon request of all municipal policies,

standard operating procedures and

frameworks, it was noted that the fraud

prevention plan was not part of the

documents submitted. Further inquiries

were made with the Human Resources (HR)

department but to no avail of the fraud

prevention plan.

Lack of internal control and policy

development

The municipality will develop a comprehensive fraud

prevention plan/strategy and workshop this document to

all employees of the municipality and ensure that each

and every employee is aware of what fraud and

corruption entails and what they should do, should they

suspect such activities.

In progress CFO Finance 30-Apr-15

5.3Investment policy not in line with

Municipal Investment Regulations

Section 4 of the Municipal Investment

and Municipal PPP Regulation,

Gazette No 27431 deals with the core

elements of investment policies

During the audit it was noted that has none

of the core elements of investment policies

as required by the regulation.

Lack of internal control and policy

development

The banking and investment policy will be revised, to

align it with the regulations that are applicable.In progress CFO Finance 30-Jan-15

5.4 No roads infrastructure policy

In terms of section 11(3) (a) of the

municipal systems act which states

“A municipality exercises its

legislative or executive authority by

developing and adopting policies,

plans, strategies and programmes,

including setting targets for delivery”

Through inquiry with the Acting Technical

Director it was noted that the municipality

does not yet have an approved policy in

place for the planning, management and

reporting of road infrastructure.

The accounting officer did not exercise

adequate oversight responsibility to

ensure that all policies governing the

effective service delivery responsibilities

were in place, approved and

implemented.

The municipality will formulate a policy in respect of

roads infrastructure and this policy must be

implemented as soon as practically possible, so as to

ensure that planning and decision making is guided by

an approved policy in order to achieve desired

outcomes.

In progress CFO Finance/Acting Technical Director 30-Mar-15

5.5 No roads maintanance plan in place

In terms of the Local Government

Capital Asset Management Guideline

which states: “Once the asset policy

has been formulated, operation and

maintenance plans should be

developed to give effect to the policy.

Through inquiry with the Acting Technical

Director, it was noted that the municipality

does not have an approved roads

maintenance plan which clearly indicates

the strategy to be followed for the financial

year.

Management has not established and

communicated policies/procedures with

regards to roads maintenance to enable

and support understanding and execution

of processes and responsibilities.

Roads maintenance will not be happening at a random

basis, a structured detailed plan that also drives the

budgeting for roads maintenance should be used.

In progress CFO Finance/ Acting Technical Director 30-Mar-15

5.6 No road asset management system

RAMs is a structured procedure, to

facilitate coordination of all road

networks aimed at ensuring the

desired service delivery.

Through inquiry with the Acting Technical

Director it was noted that the municipality

does not have a road asset management

system.

Management has not established and

communicated a roads asset

management system.

The municipality will have a road asset management

system (electronic or manual) which should contain

information that is indicated above, to enable accurate

budgeting and sound decision making.

In progress CFO Finance/ Acting Technical Director 30-Mar-15

5.7Policies related to travel allowances

and bonuses are not in place

Section 62 (1) of the MFMA states

that “The accounting officer of a

municipality is responsible for

managing the financial administration

of the municipality.

As per enquiry with Vusi Gumede (Acting

CFO) and Mpume Gumede (HR Manager) it

was established that there is no

established policy governing the travel

allowances that employees receive.

Management has not structured policies

related to the benefits that they provide

employees with namely travel allowances

and employee bonuses.

Management will provide explanations as to how it

decides on which employees are entitled to benefits

such as travel allowances and bonuses. Management

must establish and implement policies related to travel

allowances and bonuses. These policies should at all

times be in line with the requirements of SALGA and

COGTA as well as the basic conditions of employment.

In progress CFO Finance/ Director Corporate Services 30-Jan-15

5.8 Oversight Report

Section 129(3) of the Municipal

Finance Management Act(MFMA)

states that the accounting officer

must in accordance with section 21A

of the Municipal Systems Act make

public an oversight report within 7

days of its adoption.

Section 129(1) of the MFMA requires

that the municipal council, by no later

than two months from the date on

which the annual report was tabled in

the council in terms of section 127 of

the MFMA, adopt an oversight report

containing the council’s comments on

the annual report, which included a

statement whether the council:

a) had approved the annual report

with or without reservations

b) had rejected the annual report

c) had referred the annual report back

for revision of those components that

can be revised.

The oversight report was adopted by

council on the 3rd

of April 2014, however

evidence to support that the oversight report

was made public within 7 days and was

adopted within 2 months of tabling to

council could not be provided to auditors

upon request.

Evidence to support that the accounting

officer submitted the annual report for the

municipality and oversight report, to the

provincial legislature within seven days after

adoption of the oversight report by the

council could not be provided to auditors

upon request.

Lack of proper record keeping sytem

Lack of proper document management

system

1. The municipality will establish a proper record

keeping system, so as to enable easy retrieval of

information requested by auditors.

2. The responsibility of keeping municipal records will

not be placed upon one certain individual, as the

records belong to the municipality and when that certain

individual leaves the employ of the municipality the

records cannot be accounted for by the municipality.

In progress Director Corporate Services 30-Jan-15

5.9Programs or functiions not evaluated

on the annual perfomance report

As per DoRA 12 (5) Within two

months after the end of the financial

year the municipality

has to evaluate its performance in

respect of programmes or functions

funded by the allocation.

Upon inspection of the annual performance

report it was noted that the programmes or

functions funded by the allocation were not

evaluated

Lack of knowledge of requirements of

DORA Act

The municipality will put measures in place to ensure

that within two months after the end of the financial year

the municipality will evaluate its performance in respect

of programmes or functions funded by the allocation.

In progress MM 30-Jan-15

5.10No evedence of competency

assessments performed

The regulations on Minimum

Competency Levels, regulation 13

requires that the competencies of the

following officials be assessed in

order to identify and address gaps in

competency levels:-

(i) Chief Financial Officer

(ii) Head of Supply Chain

(iii) all financial officials and SCM

officials

Regulations on Minimum

Competency Levels reg14(2)(a)

requires the municipality to submit a

consolidated report on compliance

with prescribed competency levels by

30 January and 30 July to:-

(i) National Treasury

(ii) Provincial Treasury

No evidence has been provided to confirm:

- that the competencies of the listed officials

were assessed in order to identify and

address gaps in competency levels and

- that the municipality submitted a

consolidated report on compliance with

prescribed competency levels by 30

January and 30 July to the national treasury

and the relevant provincial treasury

No proper recording keeping

Non compliance with Laws and

Regulations

Annual assessment of minimum competency levels will

be perfomed.

The evidence in support of the assessment and the

submission should be provided for audit.

In progress CFO Finance 1/30/2015 & 7/30/2015

5.11No reporting of minimum

competencies in the annual report

The regulations on Minimum

Competency Levels, regulation

14(2)(b) requires that the annual

report of the municipality or municipal

entity reflected the information on

compliance with prescribed minimum

competency as at the end of the

financial year to which it relates.

The annual report submitted does not

include the required information.

Inadequate review of compliance with

laws and regulations

The annual report will be updated to include this

information.In progress MM 30-Jan-15

5.12Minister and MEC not given written

notice of suspension of the MM

As per the Disciplinary Regulations

for Senior Managers reg 6(5)(b) The

municipality should notify  the

Minister and the MEC responsible for

local government in the province

where such suspension has taken

place, in writing of the suspension

and the reasons for such within a

period of seven days after the

suspension.

Through discussion with the Director of

Corporate Mr SW Zondo, it was noted that

the Minister and MEC were not notified in

writing with regards to the suspension of the

MM & CFO. Although it was noted a call

was made to the MEC to notify him of the

suspensions

Inadequate measures to monitor

compliance with the related laws and

regulations.

Management will comply with the Disciplinary

Regulations for Senior Managers reg 6(5)(b)  In progress Director Corporate Services 30-Jan-15

6 LIMITATION OF SCOPE

6.1Supporting documents not provided for

audit

In terms of paragraph 47 of the

engagement letter, all documentation

and information in support of the

consolidated and separate financial

statements, the annual performance

report and compliance with legislation

must be available on request and be

retrievable within a reasonable time,

which should not exceed two working

days. If this information is not

provided in the time agreed, it will be

regarded as a limitation on the audit

which could result in a modification of

the audit opinion.

supporting documents were requested

formally but not submitted for audit.

No audit readiness plan implemented by

management to ensure that complete and

accurate information is prepared before

commencement of the audit

Lack of proper record keeping sytem

Lack of proper document management

system

Management will prepare and implement audit

readiness plan.

Management will have a designated official responsible

to co ordinate auditors requests and ensure that

complete and accurate information is submitted to the

auditors

The audit steering committee will be formulated to

monitor the progress of the implementation of both

internal and external audit action plans and both audit

processes.

Management will develop a proper document

management system

Management will submit information requested by

auditors within the agreed period in the management

letter.

In Progress Relevant Official During Audits

6.2No supporting documents for purchase

returns and recurring expenses" " " " " " "

6.3 No MOAs for grants received " " " " " " "

6.4No perfomance reports submitted for

audit" " " " " " "

6.4Policies relating to travel allowances

and bonuses are not in place" " " " " " "

7 INFORMATION TECHNOLOGY

7.1 USER ACCESS CONTROL

Security management within a

computerised information system

environment prevents unauthorised

access to the application system that

generates the information used to

prepare the financial statements and

enable personnel to access and

utilise information system resources

and information.

When it was enquired from the IT

Officer whether there are standard user

access forms that are prepared to grant

employees to systems such Pasted and VIP

in 2013/14. It was ascertained that there no

user account management standards

and/or procedures.

Lack of design and implementation of IT

controls

Develop user account management standards and/or

procedures. which will include amongst other things :

1. Request for access,

2. Approval of requests,

3. Resetting of passwords,

4. Termination of access and inactive accounts,

5. Change in priviledges, (transfers and promotions)

This policy will be comprehensively and appropriately

approved by Council and workshopped so that every

Municipal Employee is aware and understand the

content thereof.

In progress Director Corporate/ IT Officer 30-Jan-15

7.2 User access not reviewed

Security management within a

computerised information system

environment prevents unauthorised

access to the application system that

generates the information used to

prepare the financial statements and

enable personnel to access and

utilise information system resources

and information.

When it was enquired from the IT Officer

whether there are periodical reviews of user

access to Pastel and VIP. It was ascertain

that there are no such reviews done on a

periodical basis to determine whether

employee's access privileges are still

commensurate with the job requirements at

every point.

No periodical review of access to

priviledges of users performed

A policy will be in place that enforces periodical review

of user access privileges as to reasonably ensure that

employees only have access to systems and

applications that are requirements of their jobs and

nothing more.

The policy will govern IT goals and activities and

ensure that key processes are established to ensure

that system controller activities are periodically

reviewed.

60% Director Corporate/ IT Officer 30-Jan-15

7.3No reviews of person granting users

access to the financial system

Security management within a

computerised information system

environment prevents unauthorised

access to the application system that

generates the information used to

prepare the financial statements and

enable personnel to access and

utilise information system resources

and information.

When it was enquired from the IT Officer

whether there are periodical reviews of user

access to Pastel and VIP. It was ascertain

that there are no such reviews done on a

periodical basis to determine whether

employee's access privileges are still

commensurate with the job requirements at

every point.

Management is unaware of the risk posed

by the lack of periodical review of access

privileges of users.

A policy will be in place that enforces periodical review

of user access privileges to as to reasonably ensure that

employees only have access to systems and

applications that are requirements of their jobs and

nothing more.

The policy will govern IT goals and activities and ensure

that key processes are established to ensure that

system controller activities are periodically reviewed.

60% Director Corporate/ IT Officer 30-Jan-15

7.4   IT - Programme change

management weaknesses

  Program change management

ensures that any proposed changes

to the existing information system

environment are co-ordinated,

scheduled, authorised, tested to

prevent unnecessary disruptions,

erroneous changes, and unauthorised

and inappropriate access.

 1. there are no formally documented and

approved processes in place to manage

upgrades/updates made to all financial

systems .2. Upgrades and updates are not

approved by management.3. No formal

documentation completed when change is

made to the system

The lack of controls governing the

change management processes could

lead to unauthorised system upgrades

and also unauthorised access to the

production (live) environment.No

formalised policies and procedures to

provide guidance on the processes to be

followed

Management will ensure that there is proper

documentation of all upgrades and that all upgrades are

approved by management and not left to the discretion

of the IT department/Officer.

The policy on IT change management will be

developed, workshopped and approved by Council.

60% Director Corporate/ IT Officer 30-Jan-15

8 PREDETERMINED OBJECTIVES

"6.5 Lease agreement not provided " " " " " "

8.1Planned and reported development

priorities are not alligned/consistent

The SDBIP gives effect to the

Integrated Development Plan (IDP)

and budget of the municipality and

will be possible if the IDP and budget

are fully aligned with each other, as

required by the MFMA.

It was identified during the audit of

predetermined objectives that the strategic

objectives in the IDP, SDBIP, and Annual

Performance report (APR) were not aligned.

Sufficient monitoring controls were not in

place to ensure that all legislative

requirements are complied with when

compiling the IDP, SDBIP and APR.

1.    A checklist will be developed by the municipality

listing all legislative requirements that the municipality

should comply with. Ongoing monitoring, by a

delegated official, against this compliance checklist will

be performed.

2 The IDP or PMS Manager/Officer will ensure that the

development priorities listed in the IDP, SDBIP and APR

are aligned.

60% MM/ PMS Risk Officer 30-Jan-15

8.2Planned and reported indicators are

not aligned/consistent

The SDBIP gives effect to the

Integrated Development Plan (IDP)

and budget of the municipality and

will be possible if the IDP and budget

are fully aligned with each other, as

required by the MFMA.

It was identified during the audit of

predetermined objectives that

the projects/KPIs in the IDP, SDBIP, and

Annual Performance report (APR) were not

aligned.

Sufficient monitoring controls were not in

place to ensure that all legislative

requirements are complied with when

compiling the IDP, SDBIP and APR

1.    A checklist will be developed by the municipality

listing all legislative requirements that the municipality

should comply with. Ongoing monitoring, by a

delegated official, against this compliance checklist will

be performed.2 The IDP or PMS Manager/Officer will

ensure that the development priorities listed in the IDP,

SDBIP and APR are aligned.

60% MM/ PMS Risk Officer 30-Jan-15

8.3 Perfomance indicators not well defined

The municipality must in terms of its

performance management system

and in accordance with any regulation

and guidance that may be prescribed -

(a) set appropriate key perfomance

indicators as yardstick for

perfomance, including outcome and

impact

During the audit of the predetermined

objectives, it was identified that the

municipality did not develop well defined

performance indicators to ensure that

information is collected consistently.

Sufficient monitoring controls were not in

place to ensure that performance

indicators developed are well defined for

measuring performance.

1.    The criteria for establishing whether a performance

indicator is well defined will be considered prior to

developing a performance indicator.

2. The perfomance management section will perfom an

assessment of all perfomance indicators developed by

the Municipality against the criteria to establish if these

indicators are well defined.

60% MM/ PMS Risk Officer 30-Jan-15

9 Reporting ( Caseware reporting )

9.1

The Annual Financial statements were

not prepared accourding to the

compliance reporting of GRAP

standards and resulted into material

adjustments made in order to finalise

the AFS for the current year

The municipality must prepare the

AFS according to GRAP

requirements and as per the treasury

compliance template.

Material adjustments on the Annual

Financial Statements .

1. The Mapping on the caseware file has

not been done accordingly , as a result

the votes are not correctly reflected on

the lead schedules and Mapping reports.

1. Re-mapping of the caseware file needs to be done in

order to ensure that all the votes are properly allocated

correctly. 2. The

AFS Template needs to be reviewed and all the relevant

statements , schedules and notes updated accordingly

in order to ensure compliance.

3. Vote chart of accounts needs to be created in order to

align the reporting caseware tool with the financial

system . 4. Caseware

reporting and Pastel System needs to be linked in order

to reduce the risk of incorrect information imported into

the AFS.

In Progress CFO Finance 28-Feb-15

NB: The audit outcome is a disclaimer audit opinion hence the following areas should be adressed

1. The audit readiness plan will be developed which will ensure that all transactions are properly captured and has all supporting documents.

This should include financial and non financial information for 20132014 & 20142015 financial year

2. The AFS Plan will also be developed to monitor completeness , accuracy of information used to compile the AFS and also ensure that the leg work to the completion and submission of AFS is done on time

3. The Action Plan for AG findings together with the Internal Audit findings will be implemented by 30 January 2015

4. The Interim AFS will be completed by the end of March 2015 and restate amounts affected and bring in AG to audit by April 2015

5. A turnaround strategy will have to be developed and be implemented together with other plans with immediate effect to ensure (take into account other areas not covered by internal and external audits) , that the audit outcome improves in the next financial year.

6. The action plans be standing item in the Council Committees to monitor progress

ANNEXURE COrganisational Scorecard

Q1 Q2 Q3 Q4Deman

d Baselin

e Backlo

gProjected

Target Projected

Target Projected

Target Projected

Target JLM01 JLM1 Number of Policies Reviewed 59 100 50 30 15 15 15 14 Corporate 0 Policies

JLM02 JLM2 Number of Policies developed 13 10 50 30 3 3 3 4 Corporate 0 PoliciesJLM03 JLM3 Date of implementation of Policy Plan. 30-Dec-13 1 1 Nil 30-Dec-13 Corporate 0 Policies

JLM04JLM4

Date of Policy Plan establishment30-Dec 1 1 1 30-Dec-13

Corporate 0 Council Resolution

JLM05JLM5

Date of policy Plan adoption by Council30-Jan-14 1 1 1

30-Jan-14Corporate 0 Council

Resolution

JLM06JLM6

Number of women Appointed in Sec 54/56 Post3 2 2 4 3

Corporate 0 Appointment Letters

JLM07JLM78

Number of Website Monthly updates12 12 12 6

33

3 3Corporate 0 Updates

Reports

JLM08Establishment of SDC

JLM8% of budget spent on implementation of WSP

15% 25% 10% 5%3%

3%4% 5%

Corporate 0 Reduction report

JLM09JLM9

Number of Training workshops held as per plan55 100 50 35

1414

14 13Corporate 0 Council

Resolution

JLM10Review EEP

JLM10Number of reviews conducted

1 1 1 0 1Corporate 0 Council

Resolution

JLM111.2.To monitor Risk Management

Conduct risk management Assessment JLM11

Number of Assessment conducted1

1 1 0 1Management 0 Minutes/Regist

ers

JLM12Establisment of Municipal Risk Committee

JLM12Date Risk Committee Established

30-Sep-131 1 0 30-Sep-13

Management 0 Council Resolution

JLM13Number of Risk Management Reviews

JLM13Number of Risk Management Reviews

44 4 0 1 1 1 1 Management 0

Minutes/Registers

JLM14

1.3.To provide Information technology support for the municipalityImproved technology,Updated website JLM14

Number of Website Updates4

4 4 0 1 1 1 1 Corporate 0Minutes/Regist

ers

JLM151.4.To ensure proper and safer records keeping

Improved electronical FillingJLM15

Number of Electronic Management system developed

11 1 1 corporate 0 Filling System

JLM16

1.5.To ensure fleet control measures are in placeConduct Fleet Management Meetings withVehichle users JLM16

Number of Electronic Fleet Management system developed 1

1 1 1

Corporate 0 Fleet Management

Sstem

JLM17

1.6. To ensure compliance with labour legislation andlegal services

Conduct Labour Forum MeetingsJLM17

Number of Labour Forum Meetings Conducte4

4 4 0 1 1 1 1

Corporate 0Minutes/Regist

ers

JLM181.7.To review and implement OPMS System

Implementation of PMS policy (Adjusment Budget)

JLM18Date PMS Policy reviewed and adopted

30-Sep-131 1 0 30-Sep-13 Management R 200 000

Minutes/Registers

JLM19JLM19

Number of OPMS Reports submitted to Council2

2 2 0 1 1 Management 0Minutes/Regist

ers

JLM20Sec 54/56 Employment Contract Signed and submitted to Council & Cogta

JLM20Number of Employment Contracts Signed & submitted

44 4 R 0 4 Management 0

Employment Contracts

JLM21 Sec 54/56 Performamce Agreements Concluded & Signed

JLM21Number of Performance Agreements Signed

44 4 0 4

Management 0 Performance Agreements

JLM22Conduct PMS Reviews

JLM22Number of PMS Reviews Conducted

44 4 0 1 1 1 1 Management R 0

Minutes/Registers

JLM23 Participation in IGR Meetings JLM23 Number of IGR Reports submitted to Council 4 4 4 10 1 1 1 1 All Departments R 250 000 Reports

JLM242.2. Access to basic Services

Improve Access to ElectricityJLM24

Number of new consumer units with access to electricity

1655 10000 413 10000414

414414 413

Technical & Planning

R 40 000 000Reports

JLM25Provision of basic Services

JLM25Number of New Solar Gysers installed

30010000 2400 10000 75 75 75 75

Technical & Planning

R 2 312 102.00Reports

JLM26 Improve access to Roads Infrustructure JLM26 Number of KMS of gravel roads graded 30KMS 100KMS 20KMS 70KMS 7.5 KMS 7.5 KMS 7.5 KMS 7.5KMS Technical & Planning R 1 000 000 ReportsJLM27 Number of By-pass Bridges constructed JLM27 Number of By-pass Bridges constructed One(W 7) 5 0 4 1 Technical & Planning R 0.00 ReportsJLM28 JLM28 Number of Causeway Constructed 1(W 19) 10 0 9 1 Technical & Planning R 2 059 825 Reports

JLM29Improved collection of waste

JLM29Number of New consumer units with access to refuse removal

5001000 500 1000 125 125 125 125 Technical & Planning R 1 722 500 Reports

JLM30JLM30

Number of existing consumer unit with access to refuse removal

10002000 1000 2500 250 250 250 1000 Technical & Planning R 0 Reports

JLM312.3.To improve Access to Shelter anderadication of housing backlog

Improve acess to adquate shelterJKLM31

Date Approved HSP by Council30-Sep-13

1 1 1 30-Sep-13 Technical & Planning R 0 HSPJLM32 JLM32 Number of new housing units constructed 18000 5000 2500 2500 450 450 450 450 Technical & Planning R 0 Reports

JLM33 Implementation of New building Projects JLM33Number of Tax Ranks Constructed

3 61 2

Technical & Planning

R 8 000 000Reports

JLM34 JLM34Number of community halls constructed

7 103

62 2 2 1

Technical & Planning

R 21 138 616Reports

JLM35 JLM35 Number of Sportfields Constructed 3 10 10 10 1 2 Technical & Planning R 2 552 388 ReportsJLM36 Develop Mantanance Plan JLM36 Date Maintanance Plan adopted 30-Sep-13 30-Sep 30-Sep 0 30-Sep-13 Technical & Planning R 2 868 759 Reports

JLM37 3.1.To stimulate Local Economic growth Jobs created through EPWP JLM37 Number of jobs created through EPWP 73 100 60 200 18 18 18 17Community Services/Social DevelopmentR 3 360 000 ReportsJLM38 JLM38 % of Youth employed 50% 80% Unknown 30% 12 12 12 Eleven Community Services/Social Deve 0 ReportsJLM39 JLM39 % of Women employed 50% 80% Unknown 30% 12 12 12 Eleven Community Services/Social Deve 0 ReportsJLM40 JLM40 % of Disabled employed 65% 75% Unknown 45% 16 16 16 Fifteen Community Services/Social Deve 0 ReportsJLM41 Jobs created through LED Projects JLM41 Number of Jobs Created through LED 200 80 Unknown 100 50 50 50 50Community Services/Social Deve 0 ReportsJLM42 Jobs created through CWP JLM42 Number of jobs created through CWP 200 80 Unknown 100 50 50 50 50Community Services/Social Deve 0 ReportsJLM43 Jobs created through Tourism JLM43 Number of Jobs Created through Tourism 50 100 Unknown 100 12 12 12 11Community Services/Social Deve 0 Reports

JLM44Review & Implement LED,Tourism & EPWP

StrategiesJLM44 Date LED Strategy reviewed and Implemented 30-Sep-13 1 1 0 30-Sep-13 Community Services/Social Deve R 200 000 LED Strategy

JLM45JLM45

Date Tourism Strategy reviewed and Implemented30-Sep-13

1 1 0 30-Sep-13 Community Services/Social Deve 0Tourism Strategy

JLM46JLM46

Date EPWP Strategy reviewed and Implemented30-Sep-13

1 1 0 30-Sep-13 Community Services/Social Deve 0 EPWP Strategy

JLM47JLM47 Number of meetings held per Forum 20

20 20 0 5 5 5 5Community Service/Social Dev R 20 000Registers/Minu

tesJLM48 JLM48 Number of reports per forum 20 20 20 0 5 5 5 5Community Services/Social Dev 0 ReportsJLM49 JLM49 Number of Tourism Awareness Campaigns 8 10 8 0 2 2 2 2 Community Srvices 0 ReportsJLM50 JLM50 Number Agri-sector committee Meetings 4 4 4 0 1 1 1 1 Community Services 0 Reports

JLM51Conduction of Poverty Alleviation Projects. JLM51

Number of Poverty Alleviation Projects conducted60

150 60 90 15 15 15 15 Community Serv R 12 000 000 Reports

JLM52JLM52

Number of SMME'S/Corporatives Registered25

100 20 75 6 6 6 5 Comm Serv R 200 000Reprts/Register

s

JLM53JLM53

Number of Workshops conducted for SMME'S4

4 4 0 1 1 1 1 Comm Serv 0Reports/Regist

ers

CO

MM

UN

ITY

WO

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P

RO

GR

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AN

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OP

ERA

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ES

SUP

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D

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AL

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MIC

D

EVEL

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T

Improve functioning of LED , Tourism & Agriculture Forums

3.2.Improved support to Local development Support of local Buisinesses

2.4.Construction of Municipal Ifrustructure

IMP

RO

VED

AC

CES

S TO

BA

SIC

SER

VIC

ES

BA

SIC

SER

VIC

ES

2.1.To facilitate provision of access to basic services,

Review existing policies

1.1.To improve Municipal Institutional andorganisational capacity

Develop new identified policies

DIF

FER

ENTI

ATE

D A

PP

RO

AC

H T

O M

UN

ICIP

AL

FIN

AN

CIN

G, P

LAN

NIN

G A

ND

SU

PP

OR

T

MU

NIC

IPA

L TR

AN

SFO

RM

ATI

ON

AN

D O

RG

AN

ISA

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NA

L D

EVEL

OP

ME

NT

ORGANISATIONAL SCORECARD FOR 2013 /2014

IDP / SDBIP NO.

OUTCOME 9 NATIONAL KEY

PERFORMANCE AREASOBJECTIVE STRATEGIES NO INDICATORS

ANNUAL TARGET

2012/2013Responsible Dept Budget

Portfolio of Evidence

JLM54JLM54

Number of Meeting held per Ward Committees 120 120 Nil 0

3030

30 30

Community Services

R 2 823 353 Attendance Registers and

Minutes

JLM55

JLM55% of Attendance by members per ward.

240% 100% 60% 40%

60%

60%

60% 60%

Community Services

R 0 Attendance Registers and

Minutes

JLM56JLM56

Number ward base plans compiled20 20 20 0

55

5 5Community

ServicesR 0 Ward base

plans

JLM57

Improved Public ParticipationJLM57

Number Communication Strategy Workshops held.Four Four Four 0%

OneOne

One One

Community Services

R 1 075 000 Attendance Registers and

Minutes

JLM58JLM58

Number of IDP Public Participation Meetings20 20 20 0

55

5 5Community

ServicesR 600 000 Registers/Minu

tes

JLM59JLM59

Number of IDP/BUDGET ROADSHOWS held1 1 1 1

1Community

ServicesR 200 000 Rigisters/Minut

es

JLM60

4.2.To Strengthen relation ship between Municipal Council and Traditional Authorities

Promote the Synegestic Partnership JLM60

Number of Meetings Conducted 4 4 4 0

11

1 1

Community Services

R 200 000Registers/Minu

tes

JLM61

4.3.To promote healthy Life style through Sports andReceational Activities

Conduct Sportinng & Recreational ActivitiesJLM61

Number of Sporting & Recreational Activities.3

3 3 5 1 2

Community Services

R 664 244.50Registers/Minu

tes

JLM624.4. To promote Art and Culture Activities. Conduct Art and Culture Activities

JLM62Number of Art and Culture Activities Conducted

31 3 5 1 1 1

Community Services

R 696 593.60 Registers/Minutes

JLM634.5. To promote Social cohesion through functional Forums.

Improved functionality of all Municipal Forums

JLM63Number of Forum Meetings Conducted

1212 0 3 3 3 3 3 Community Services

Registers/Minutes

JLM64JLM64

Number of Programes heldFive

5 5 5 2 1 1 1 Community Services R 121 574.64Registers/Minu

tes

JLM65

4.6.To promote Culture of reading through extention of Library Services to more Communities

Conduct Reading ProgrammesJLM65

Number of Outreach Programmes to be conducted48

48 48 10 12 12 12 12 Community Services R 930 000

JLM66 4.7.To Improve road Safety Implement Road Safety Programmes JLM66 Number of public safety road blocks 20 20 20 10 5 5 5 5 Community Services R 3 280 752 Registers

JLM67JLM67

Number of Safety Awareness Campaigns held4

4 4 4 1 1 1 1 Community Services R 1 400 000Registers/Minu

tes

JLM684.8.To Improved Service Delivery

Provision of intergrated gorvement Sevices to the Community.

JKLM68Date Sector Departs sign Lease Agreements with Thusong Centre

30-Sep-1330-Sep 30-Sep 30-Sep 30-Sep-13 Community Services R 30 000

Service Level Agreement

JLM694.9.To Improve functioning of the Animal Pound.

Conduct Community Awareness CampaignsJLM69

Number of Community Campaigns held4

4 4 10 1 1 1 1 Community Services R 150 000Registers/Minu

tes

JLM70 Review Pounds By-Laws JLM70Date of Adoption by Council

30-Sep 30-Sep30-Sep

030-Sep-13

Community Services

R 500 000Pound By-Laws

JLM71 Formalization of Cemetries JLM71Number of Registers Compiled

3 6 31 1 1

Community Services

R 1 000 000 Cemetry Registers

JLM72 JLM72Date EIA Conducted

30-Sep-13 30-Sep30-Sep

030-Sep-13

Community Services

R 0EIA Reports

JLM73 JLM73Number of Cementries Formalised

3 33

01 2

Community Services

R 0Reports

JLM74

Prepare income & expenditure reports and Financial Statements in compliance with legislative requirements

JLM74 Date of Completion 30-Dec

30-Dec 30-Dec 0 30-Dec-13 BTO R 750 000 Budget

JLM75Improved Audit Opinion

UnQualified Audit Clean

Audit Unqualified AuditClean Audit Unqualified Audit-30 Jan 1 R 2 591 961 Audit ReportJLM76 Number of Updates for Asset Register 4 4 4 0 1 1 1 1 1 R 250 000 Asset Register

JLM77Number of Updates for Loan & Investment Register

4 44 0 4 1 1 1 1 0

Investment Loan Register

JLM78% to Improve cash flow Management

10% 15%10% 55% Three 3 3 1 BTO 0

Revenue Strategy

JLM79Number of Budget steering Committee Meetings

4 44 0 1 1 1 1 BTO 0

Minutes/Registers

JLM80Percentage Capital expenditure budget implementation (actual capital expenditure/budget capital expenditure x 100)

75% 65%0 0 18 18 18 17 BTO 0

Capital Expenditure

JLM81Percentage operating expenditure budget implementation (actual operating expenditure/budget operating expenditure x 100)

65% 55%

0 0 16 16 16 15 BTO 0Operational Expenditure

JLM82JLM82

Percentage service charges and property rates revenue buget implementation (actual service

70%65% 0 0 17 17 17 1600% BTO R 638 647 Service Charges

JLM835.4.To optimise revenue collections. develop and implement revenue

enhancement strategyJLM83

Date Revenue Enhancement Strategy developed & adopted

30-Sep30-Sep 30-Sep 0 30-Sep-13 BTO R 638 647 Strategy

JLM84 JLM84 % increase in revenue collection 10% 5% 0 0 2 2 2 4% BTO R 638 647 Strategy

JLM855.5.To ensure efficient, cost effective, transparent, competitive and equitable SCM.

Improved SCM processes JLM85 Number of SCM Trainnings conducted TwelfTwelf Twelf 0 3 3 3 Three BTO R 0

Registers/Minutes

JLM86Developed Departmental Procurement Plans JLM86

Date Procurement Plans developed and submitted

to SCM30-Sep-13

30-Sep 30-Sep 0 30-Sep-13 BTO R 0

Registers/Minu

tes

JLM87Conduct SCM Workshops with Stakeholders JLM87 Number of Workshops Conducted Four

Four Four 0 1 1 1 1% BTO R 0Registers/Minu

tes

JLM88Tranning of Traditional Councils on Land Use Management and Introduction of wall to wall

JLM88 Number of TC;s Trainings Conducted 6 6 6 0 2 2 1 1 Tech & Planning R 0Certificates/Re

ports

JLM89JLM89

Date Human Settlement Plan adopted by Council30-Dec 30-Dec

30-Dec 0 30-Dec Tech & Planning R 0 HSP Doc

JLM90JLM90

Improvement in the % scored in the IDP Credibility ranking

85% 75%85% 0 21.25% 21.25% 21.25% 21.25% Tech & Planning R 0

IDP Doc/MEC Comments

JLM91 Improved Spatial development Framework Planning

JLM91Date Review Spatial Development Framework

30-Sep 30-Sep30-Sep 0 30-Sep Tech & Planning R 250 000 SDF Doc

JLM92 JLM92 Number of identified SDF Piorities 10 10 10 0 2 2 4 2 Tech & Planning R 0 Reports

JLM936.4.To improve the monitoring of compliance with building regulations

Well organised Towns JLM93 Number of programes monitored SixSix Six 0 2 2 1 One Tech & Planning R 0 Reports

JLM946.5.To develop and Implement Disaster Management MachanismFunctional disaster management in line with

DisasterManagement PlanJLM94 Date Disaster Management Plan adopted by Council 30-Sep-13

30-Sep 30-Sep 30-Sep 30-Sep-13 Tech & Planning R 450 000 ReportsJLM95

JLM95Date Establish local disaster management committee

30-Sep-13 30-Sep30-Sep 30-Sep 30-Sep-13 Tech & Planning R 0

Minutes/Reports

JLM96JLM96

Number of Roll out disaster awareness campaigns4 4

4 0 1 1 1 1 Tech & Planning R 0Minutes/Repor

tsJLM97

JLM97Number of Identified areas mostly affected by disaster

20 2020 0 5 5 5 5 Tech & Planning R 0

Minutes/Reports

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NS 6.1. To promote sustainable land use

6.2.To transform rural and urban settlements into integrated andsustainable human settlements

Identify priority settlements for settlement planning

6.3.Efficient and credible strategic and spatial Municipal Planning

Revision of a Credible IDP

4.10.To improve cemetery services

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5.1.To manage budget and actual expenditure of the municipality.

75,7

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5.2.To achieve excellence in financial management and clean Audit Improved Financial Management

5.3.To ensure the implementation of budget processes

Improved Budgeting

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4.1.To involve Local Communities in Municipal Affairs in a structural manner

Strengthen the functioning of ward Committees