TABLE OF CONTENTSngqushwamun.gov.za/download/documents/annual... · HDI Human Development Index. HH Households. HOD Head of Department. HR Human Resource. IDP Integrated Development

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TABLE OF CONTENTS ABBREVIATIONS/CONCEPTS AND MEANING: .............................................................................................................. 4

CHAPTER 1 – INTRODUCTION................................................................................................................................... 6 1.1 MAYOR’S FOREWORD............................................................................................................................ 6 1.2 EXECUTIVE SUMMARY BY THE MUNICIPAL MANAGER ............................................................................... 8 1.3 MUNICIPAL PROGRAM 2015/16 ................................................................................................................ 9 1.4 MUNICIPAL GRAND STRATEGY .............................................................................................................10 1.5 INTRODUCTION TO MUNICIPAL BACKGROUND .......................................................................................11 1.6 SERVICE DELIVERY OVERVIEW.............................................................................................................15

CHAPTER TWO: GOVERNANCE...............................................................................................................................16 2.1 POLITICAL AND ADMINISTRATIVE GOVERNANCE ....................................................................................16 2.2 ADMINISTRATIVE GOVERNANCE ...........................................................................................................22 2.3 INTERGOVERNMENTAL RELATIONS.......................................................................................................22 2.4 PUBLIC ACCOUNTABILITY AND PARTICIPATION ......................................................................................23 2.5 CORPORATE GOVERNANCE .................................................................................................................29

CHAPTER THREE – SERVICE DELIVERY PERFORMANCE ...........................................................................................34 3.1. WATER PROVISION .........................................................................................................................34 3.2 SANITATION........................................................................................................................................35 3.3 ROAD MAINTENANCE...........................................................................................................................35 3.4 PROJECT MANAGEMENT ......................................................................................................................36 3.5 ELECTRICITY ......................................................................................................................................37 3.6 HOUSING............................................................................................................................................38 3.7 WASTE MANAGEMENT .........................................................................................................................44 3.8 PLANNING AND DEVELOPMENT .....................................................................................................44

3.8.1 PLANNING ...........................................................................................................................................45

3.8.2 LAND AND HOUSING.............................................................................................................................45

3.8.3 LAND TENURE AVAILABILITY AND REDISTRIBUTION.................................................................................46

3.8.4 SPATIAL DEVELOPMENT .......................................................................................................................48

3.8.5 LOCAL ECONOMIC AND TOURISM DEVELOPMENT ...................................................................................48

3.9 COMMUNITY & SOCIAL SERVICES .........................................................................................................52 3.9.1 LIBRARIES; ARCHIEVES; MUSEUMS; GALLERIES; COMMUNITY FACILITIES; PARKS &OTHER (THEATRES, ZOOS, ETC) 52

3.10 ENVIRONMENTAL PROTECTION ............................................................................................................53 3.11 SAFETY AND SECURITY .......................................................................................................................54 3.12 INFORMATION AND COMMUNICATION TECHNOLOGY (ICT) SERVICES .......................................................56

CHAPTER FOUR: INSTITUTIONAL DEVELOPMENT AND ORGANISATIONAL PERFORMANCE............................................57 4.1 MUNICIPAL WORKFORCE MANAGEMENT ...............................................................................................57 4.2 MANAGING WORKFORCE EXPENDITURE................................................................................................60 4.3 ORGANIZATIONAL PERFROMANCE REPORT ...........................................................................................64

CHAPTER FIVE: FINANCIAL PERFORMANCE .............................................................................................................65 5.1 STATEMENTS OF FINANCIAL PERFROMANCE .........................................................................................65

5.1.1 Financial Performance.............................................................................................................................65

5.2 GRANTS .............................................................................................................................................67 5.2.1 Grant Performance ................................................................................................................................. 67

5.2.2 Performance of Service Providers ..............................................................................................................67

5.3 ASSET MANAGEMENT ..........................................................................................................................74 5.4 REPAIRS AND MAINTENANCE ...............................................................................................................74 5.5 Financial Ratios Based on Key Performance Indicators ..................................................................................75

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5.5.1 Liquidity Ratio ....................................................................................................................................................... 75

5.5.2 Creditors Management........................................................................................................................................... 76

5.5.3 Borrowing Management ......................................................................................................................................... 77

5.5.4 Employee costs ....................................................................................................................................................... 78

Component B: Spending Against Capital Budget .........................................................................................................................79 5.6 Capital Expenditure............................................................................................................................................... 79 5.7 Sources of Finance ............................................................................................................................................... 79

5.7.1 Capital Expenditure by Funding Source ................................................................................................................... 79

Component C: Cash Flow Management and Investments ............................................................................................................81 5.8 Cash Flow............................................................................................................................................................ 81

CHAPTER SIX: auditor general AUDIT FINDINGS......................................................................................................................82 Component A: Auditor-General Opinion ................................................................................................................................. 82

ANNEXUTERS:...................................................................................................................................................................83

2015/16 Annual Financial Statements ............................................................................................................................84 Report of the Auditor-General.........................................................................................................................................149 2015/16 Audit Action Plan...............................................................................................................................................157 2015/16 SDBIP Performance Report............................................................................................................................187 2015/16 MPAC Oversight Report ..................................................................................................................................223 2015/16 Audit Committee Report to CouncIL..............................................................................................................229

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ABBREVIATIONS/CONCEPTS AND MEANING:

ABBREVIATIONS/CONCEPTS MEANING Accountability documents Documents used by executive authorities to give “full and regular” reports on the matters under

their control to Parliament and provincial legislatures as prescribed by the Constitution. This includes plans, budgets, in-year and Annual Reports.

Activities The processes or actions that use a range of inputs to produce the desired outputs and ultimately outcomes. In essence, activities describe "what we do".

Adequacy indicators The quantity of input or output relative to the need or demand. ADM Amathole District Municipalities. AG Office of the Auditor General. Annual Report A report to be prepared and submitted annually based on the regulations set out in Section 121 of

the Municipal Finance Management Act. Such a report must include annual financial statements as submitted to and approved by the Auditor-General.

Approved Budget The annual financial statements of a municipality as audited by the Auditor General and approved by council or a provincial or national executive.

Baseline Current level of performance that a municipality aims to improve when setting performance targets. The baseline relates to the level of performance recorded in a year prior to the planning period.

Basic municipal service A municipal service that is necessary to ensure an acceptable and reasonable quality of life to citizens within that particular area. If not provided it may endanger the public health and safety or the environment.

BTO Budget and Treasury Office. Budget year The financial year for which an annual budget is to be approved – means a year ending on 30

June. CBOs Community Based Organizations. CDWs Community Development Workers. Cost indicators The overall cost or expenditure of producing a specified quantity of outputs. DBSA Development Bank of Southern Africa. DEDEA Department of Economic Development and Environmental Affairs. DM District Municipality. Distribution indicators The distribution of capacity to deliver services. ECDC Eastern Cape Development Corporation. EPWP Expanded Public Works Programmes. Financial Statements Includes at least a statement of financial position, statement of financial performance, cash-flow

statement, notes to these statements and any other statements that may be prescribed. FY Financial Year General Key performance indicators

After consultation with MECs for local government, the Minister may prescribe general key performance indicators that are appropriate and applicable to local government generally.

GDP Gross Domestic Product. HDI Human Development Index. HH Households. HOD Head of Department. HR Human Resource. IDP Integrated Development Plan. Impact The results of achieving specific outcomes, such as reducing poverty and creating jobs. Inputs All the resources that contribute to the production and delivery of outputs. Inputs are "what we use

to do the work". They include finances, personnel, equipment and buildings. IT Information Technology. LED Local Economic Development. LM Local Municipality. MFMA Municipal Finance Management Act. MIG Municipal Infrastructure Grant. MOU Memorandum of Understanding.

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ABBREVIATIONS/CONCEPTS MEANING MPAC Municipal Public Accounts Committee. MSA Municipal Systems Act (Act No. 32 of 2000). National Key performance areas

Service delivery & infrastructure Economic development Municipal transformation and institutional development Financial viability and management Good governance and community participation

NGOs Non-Governmental Organisations. NLM Ngqushwa Local Municipality. NYDA National Youth Development Agency. Outcomes The medium-term results for specific beneficiaries that are the consequence of achieving specific

outputs. Outcomes should relate clearly to an institution's strategic goals and objectives set out in its plans. Outcomes are "what we wish to achieve".

Outputs The final products, or goods and services produced for delivery. Outputs may be defined as "what we produce or deliver". An output is a concrete achievement (i.e. a product such as a passport, an action such as a presentation or immunization, or a service such as processing an application) that contributes to the achievement of a Key Result Area.

PDOHS Provincial Department of Human Settlements Performance Indicator Indicators should be specified to measure performance in relation to input, activities, outputs,

outcomes and impacts. An indicator is a type of information used to gauge the extent to which an output has been achieved (policy developed, presentation delivered, service rendered)

Performance Information Generic term for non-financial information about municipal services and activities. Can also be used interchangeably with performance measure.

Performance Standards: The minimum acceptable level of performance or the level of performance that is generally accepted. Standards are informed by legislative requirements and service-level agreements. Performance standards are mutually agreed criteria to describe how well work must be done in terms of quantity and/or quality and timeliness, to clarify the outputs and related activities of a job by describing what the required result should be. In this EPMDS performance standards are divided into indicators and the time factor.

Performance Targets: The level of performance that municipalities and its employees strive to achieve. Performance Targets relate to current baselines and express a specific level of performance that a municipality aims to achieve within a given time period.

PGDP Provincial Growth and Development Plan. PMS Performance Management System. PMU Project Management Unit. Service Delivery Budget Implementation Plan (SDBIP)

Detailed plan approved by the mayor for implementing the municipality’s delivery of services; including projections of the revenue collected and operational and capital expenditure by vote for each month. Service delivery targets and performance indicators must also be included.

SDF Spatial Development Framework. SMME Small Micro and Medium Enterprise. Vote: One of the main segments into which a budget of a municipality is divided for appropriation of

money for the different departments or functional areas of the municipality. The Vote specifies the total amount that is appropriated for the purpose of a specific department or functional area.

WSA Water Service Authority. WSDP Water Service Development Plan. WSP Water Service Provider. WTW Water Treatment Works.

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CHAPTER 1 – INTRODUCTION

1.1 MAYOR’S FOREWORD This Annual Report is a culmination of the implementation of 2015/16 revised Integrated Development Plan (IDP) and 2015/16 Service Delivery and Budget Implementation Plan (SDBIP) for the financial year. The highlights and the successes detailed in the chapters of the Annual Report are in line with the Strategic Objectives of the municipality as enacted in the municipality’s 2012/2017 Integrated Development Plan. It is important to note that the municipality adopted 2015/16 IDP and Strategic Score Card .The strategic score card is in line with the five (05) Key Performance Areas of the Local Government and has been developed to respond to the following pieces of legislation:

Constitution of the Republic of South Africa, 1996. Province of the Eastern Cape Provincial Growth and Development Plan 2004-2014(PDG). Municipal Systems Act (MSA) No 32 of 2000.

In line with the call of the PDGP ,South Africa’s Constitution and the general Key Performance Indicators outlined in the Municipal Systems Act ,the municipality has succeeded in implementing the following programmes as outlined in the 2015/16 SDBIP. Basic Service Delivery

The municipality implemented electricity maintenance plan which include maintenance of street lights, high mast lights. Municipal buildings. Km of Roads were re-gravelled. Municipal Public Amenities, Sport fields and Community main road.

Local Economic Development

Local Economic Development has participated in some fields of human activities such as SMME’s/Co-operatives, supporting co-operatives with inputs towards sustainability Tourism and Heritage are the key pillars of Local Economic Development ,hence the prioritisation of maintenance of Heritage sites in partnership with Amathole District

Municipal Transformation and Organisational Development

Work Skills Plan and Annual Training Plans have been implemented to capacitate workforce Organizational structure have been provided to respond to the IDP Objectives and SDBIP Targets

Financial Viability and Management

The 2015/2017 Medium Term Revenue Expenditure is aligned to the IDP Objectives was adopted by the Council For sustainability if the Municipality ,Revenue Collection remains the core function for this Key Performance Area

Good Governance and Public Participation

It thus important to note the progress made such as adoption of the 2015/16 IDP & SDBIP Community participation programmes are implemented as planned

We continue to commit ourselves in improving Service Delivery to our community in collaboration with stakeholders focusing on five (05) Indicators such as:

Accountability. Participatory governance. Government education. Investment in infrastructural development and. Social Responsibility.

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I would like to express my gratitude to all Councillors, Municipal Manager: Mr T.T Mnyimba and all officials, the communities of Ngqushwa Local Municipality and stakeholders for their dedication, support and co-operation. ____________________ S.E.NDWAYANA Mayor

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1.2 EXECUTIVE SUMMARY BY THE MUNICIPAL MANAGER This Annual Report for 2015/16 financial year is a communication tool that reflects an overview of the municipal activities, performance in service delivery and financial position aimed at improving the lives of Ngqushwa communities. The municipality realises that community participation is a major implication on democratising service delivery. Therefore, we continue to utilize space for public participation programmes where we communicate regularly with communities and disseminate relevant information through structures that are in place. We are considerate of indigent people to receive goods and services such as housing, water and sanitation, refuse removal and electricity. We committed ourselves to support the indigent and poor households where 5006 people have access to free basic electricity and 1993 people benefitted to free basic refuse removal per month. Again, with the municipality’s allocation of R21.854 million on Municipal Infrastructure Grant (MIG), the management committed to 100% expenditure to ensure quality service delivery. Indeed that was spent. By so doing, we follow IDP implementation and pride ourselves by ensuring that our people get the best service according to their priority needs. The Municipal Council adopted thirteen policies during the year under review. For the 2015/16 financial year institutional annual performance has improved by 15% compared to previous financial year. All senior managers are appointed except the position of Director: Community Services which will be operational in the next financial year. Through our Local Economic Development we managed to capacitate our Local SMME’s and corporative with workshops, trainings and projects that assisted them to work together in achieving sustainable economic growth and development. Our community also benefitted through Extended Public Works Programme in the Hamburg Aquaculture Project which has an impact on skills development and transfer of technology to communities. Moreover, Community Works Programme employed 1048 people of working age in all wards. We are proud to announce that Hamburg Beach meet a standard of excellence and is awarded Blue Flag status for its safety, cleanliness, environmental information and management. Good governance remains crucial to the success of the organisation and the value of a well-functioning Council with its Committee structure, as well as Ward Committees cannot be overstated. The developments and improvements in our financial management led the municipality to receive a better audit outcome in the year under review to a Qualified Audit Opinion from a Disclaimer. In support for improved audit results, the municipality is in a process of developing a three year Financial Recovery Plan to control both government debt and non – payment by households and businesses which is still a huge challenge. In conclusion, I would like to thank The Mayor Cllr S. Ndwayana, Executive Committee, Councillors, Senior Managers and staff who dedicated themselves and worked hard in ensuring that the people of Ngqushwa benefit from improved quality of life in a sustainably functional municipal area. _____________________ T.T.MNYIMBA Municipal Manager

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1.3 MUNICIPAL PROGRAM 2015/16

Key Communication Activity per KPA

Programme Messenger/Dept. responsible

Time Frame STATUS

Celebration of Isikhumbuzo saseMqwashini (Milkwood Tree)

Celebration of Isikhumbuzo saseMqwashini (Milkwood Tree)

Tourism Unit, Communications Unit, NGO’s

May 2016 Done

Service Delivery Day Delivering services to the people

All Departments May 2016 Done

Child Protection week

Awareness on Children’s Rights

Office of the Municipal Manager: SPU, Communications

June 2016 Done

Youth Month Celebrations

Youth Seminar SPU, Communications, LED

June 2016 Done

Women’s Month Celebrations

1.Handover of Wheelchairs to Physically Disabled Women (Ward 10 ,12 and 6)

Women’s Caucus, SPU, Manager Mayor and Speakers Office, and Communications

August 2015

Done

Heritage and Tourism Month

Women’s Caucus Legacy Programme: Handover of laptops to the blind society, kit to soccer clubs, Bursary handover and food parcels to 5 destitute families

SPU, Manager Mayor and Speakers Office, and Communications

September 2015 Done

Horse Racing Event at Ngqwele


September 2015 Done

Tunyiswa Memorial Day


September 2015 Done

Miss Ward 1 SPU, Manager Mayor and Speakers Office, and Communications

October 2015/16 Done

IDP Steering Committee

IDP Processes IDP/PMS, Budget Manager, Communications, Mayor and Speakers Mayor

Quarterly 2015/16 Done

Rep Forum Meeting IDP Processes IDP/PMS, Budget Manager, Communications, Mayor and Speakers Mayor

Quarterly 2015/16 Done

Crisis Management Intensify Rapid Response to service delivery protests.

Service delivery protests Ongoing Done

Beginning of IDP Consultations for next year. IDP situational needs analysis.

Ward needs verification and profiles.

IDP/PMS Manager, Manger: Office of the Mayor, Communications

November 2015

Done

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Key Communication Activity per KPA

Programme Messenger/Dept. responsible

Time Frame STATUS

Annual Report Roadshows (MPAC)

Public Hearing in all wards(Giving report on the performance of the previous financial year)

Office of the MM and Communications

November 2015

Done

16 Days of Activism Awareness Programme against Women and Children Abuse

SPU, Mayor and Speakers Office and Communications

November 2015

Done

Mayors Christmas party for elderly people and orphans/children

SPU, Communications, DoH, Love Life, Peddie Women Support Centre

December 2015

Done

Christmas Lights Switch on of Christmas lights for festive season.

Tourism Unit, Communications

December 2015 Done

Back to school campaign

Mayoral Visit to best performing school and least performing school ( Mayors Gift to Top Students)

Communications, SPU and Office of the Mayor

January 2016 Done

Electronic Media Talk to your Mayor/ Councillor (interviews

Service delivery slots/dialogues

Ongoing Forte FM Interview, (Fort Hare Fm - Mayor and MM)

Service delivery Day Service Delivering to the people

All Departments January 2016 Done ( Ndwayana Location- Handover of water to Ndwayana Community on the 18th January 2016)

1.4 MUNICIPAL GRAND STRATEGY VISION To be the preferred, vibrant, socio-economically developed municipal area that embraces a culture of human dignity, good governance and characterized by good quality of service for all. MISSION STATEMENT Ngqushwa Local Municipality will strive to become a benchmark institution in the country in respect of good quality and affordable services, through effective resource mobilization and management, stimulation of economic growth, and good governance practices. MUNICIPAL CORE VALUES/STANDARDS Linked to the mission, the municipality identified the following CORE VALUES to be adhered to by the Councillors, management and the officials of the Municipality for all the interactions with customers:

Competency- We commit to attract and retain a competent workforce to service our customers. Honesty and Integrity-We will demonstrate complete honesty and integrity in everything we do. Diligence-We will demonstrate caution, commitment and due diligence in discharging our duties. Transparency-We will be transparent and fair in all our dealings for utmost accountability. Accountability-We will create an environment to be held to account by our stakeholders and customers. Professionalism-We will always uphold and maintain a professional behaviour in executing our mandate and individual responsibilities for the furtherance of service delivery. Value for Money-We commit derive value for money as return on investment in all business engagements with service providers.

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1.5 INTRODUCTION TO MUNICIPAL BACKGROUND GEOGRAPHIC PROFILE Municipal Geographic Information Ngqushwa Local Municipality falls within the jurisdiction of the Amathole District Municipality which is situated in the Eastern Cape Province, Amathole District Municipality and covers an area of 23 573km² and the Ngqushwa municipal area covers 2245 square kilometres which accounts for 10% of the district. The administrative seat of the Municipality finds itself in Peddie and the municipal area is divided into 13 wards. Ngqushwa is located in the west of the Amathole district and consists of two towns Peddie and Hamburg, a portion of King Williams Town villages. It is one of the eight municipalities that fall within the Amathole District Municipality. Ngqushwa Municipality consists of 118 villages. Ngqushwa is bordered by the Great Fish River to the west and the Keiskamma River to the East. The southern boundary comprises a part of the coastline of the Indian Ocean Figure 1: Ngqushwa location Wards and villages

Ward Villages 1 Zalara, Mtati, Tyeni, Ngqwele, Bhele, Nonibe, Gobozana, Nxopho 2 Qaga, Masele, Thamara, Dubu, Tsolo & Jubisa 3 Upper & Lower Mthombe, Thyatha, Mtyholo, Qugqwala, Dlova, Nquthu, Tildin, Tapushe, Rode, Zimbaba & Mavathulana 4 Qawukeni, Mabongo, Khalana, Shushu, Ntsinekana, Mqwashu, Bongweni A, Gcinisa North, Hlosini, Bongweni B,

Maqosha, Nqwenerhana, Crossman/ Mgwangqa, Nomonti & Torr 5 Machibi, Moni, Twecu, Upper & Lower Dube, Cwecweni, Madliki, Phole, Moni, Nxwashu/Tyip-Tyip, Ngxakaxha &

Mdolomba 6 Tyityaba/Ferndale, Bodium, Bell, Lover’s Twist, Crossroads, Tuku A, B & C, Wooldridge, Hoyi, Leqeni, Begha, 7 Cisira, Feni, Dam-dam, Makhahlane, Celetyuma,Mahlubini/Nyaniso 8 Ndlambe, Ndwayana, Glenmore, Qamnyana, Gwabeni, Mankone, Horton, Luxolo & Rura 9 Runletts, Woodlands, Pikoli, Nobumba, Ntloko, Mgwalana, Lewis & Paradise 10 Peddie Town, Peddie Extension, Power, Luxolweni, German village, Durban Location 11 Hamburg, Benton, Gcinisa-South, Wesley, Bhingqala/Soweto, Mqheleni, Tarfield/Nier, Qobo-qobo/Nuloets,Daninge 12 Mpheko, Mgababa, Prudhoe, Mkhanyeni 13 Mtati, Ngqowa, Upper Gwalana, Mabaleni, Ntshamanzi, Newtondale, Maxhegweni, Upper Qeto, Lower Qeto, Lower

Mgwalana, eSigingqini

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Below is the map of Ngqushwa Local Municipality

Demographic Profile: Ngqushwa Local Municipality has an estimated population of 72 190 people according to the 2011 census figures. Compared to the previous census figures the number of Ngqushwa population has decreased by 8.1%. The following table shows a summary of key statistics by gender from statics (2011):

WARD

POPULATION BY WARD MALE FEMALE TOTAL

21206001 2 593 2 962 5 555 21206002 2 864 3 100 5 963 21206003 2 789 3 041 5 830 21206004 2 658 2 902 5 559 21206005 2 899 3 166 6 065 21206006 2 531 2 812 5 343 21206007 2 827 3 224 6 051 21206008 2 543 2 847 5 390 21206009 2 322 2 574 4 897 212060010 2 323 2 688 5 011 212060011 2 798 3 167 5 964 212060012 2 180 2 603 4 783 212060013 2 658 3 120 5 777

GRAND TOTAL 33 984 38 206 72 190

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Figure 2: Below shows sex and age in completed years

The above reflects a high dependency rate with numbers of children aged between 0 and 19 years, school going age estimated at 28 800 with approximately 14 899 being males and 13 901 females. On the other hand, the numbers of those who fall above the economically active population (above 60 years) are estimated at 11 675. Of those, approximately 7 260 are women and about 4 415 are men. This means that the total number of children, youth and elderly is 40 475 which accounts for about 56% of the total population. This is very high and means that the municipality has to focus more efforts and funding towards children and youth development as well as caring for the aged. There is a high rate of school drop outs as well as high unemployment rate. This further promotes the need to develop social and youth development programs, provision of basic services and vigorous job creation programs.

HOUSEHOLDS The table below gives an overview of common statistics of Ngqushwa Local Municipality according to the official census done by Stats SA.

Ngqushwa Local Municipality 2011 2015 Demography

Number of Households 21384 Refuse Removal

% of households without weekly refuse removal 7% 4% (Urban and resort areas) No. of households without weekly refuse removals 200 No backlogs excluding rural areas

Toilet Facilities % of households with flush toilets 5,8 % of households with Pit toilets 84,6 % of households with chemical toilets 2,6 % of households with bucket toilets 0,1 % of households without toilets

Electricity Supply % of households with Electricity 91,4 91,4

Water % of households with access to piped water 96,9

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Economic indicators: Figure 4: Employment rate vs. poverty

Source: Stats SA : 2011 Figure 4 above reflects decreasing poverty levels between 2001, being about 70% to 66% in 2011. Unemployment on the other hand also shows a decrease from 64% in 2011 to about 40% in 2011.The employment rate is on the increase from 36% in 2001 to 60% in 2011. Ward meetings cited poverty and unemployment as one of the major challenges. These meetings also suggested that government should provide more support to orphans and child-headed households.

Source: Stats SA (Census 2011) Figure 5 reflects the majority of households earning very low incomes. Statistics SA information shows the number of the employed households being 11 538 earning between R9 601 and R38 200 per annum. Ward meetings revealed that the majority of the population relies on social grants. They raised that there is a need for projects to provide the community with food security. Proposals for skills development and provision of institutions of higher learning that will ensure improvement of the labour force also came up strongly from the wards.

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1.6 SERVICE DELIVERY OVERVIEW

NATURAL RESOURCES MAJOR NATURAL RESOURCES RELEVANCE TO COMMUNITY

Mining: sand and lime Construction Vegetation: aloe Harvesting, processing and production Ocean and dams Water accessibility

During the period under review, Ngqushwa Local Municipality, under Technical Services Directorate has done a commendable work. Due to the fact that Technical Services is service delivery related, the following was achieved per section: Roads and Storm-water: The municipality is responsible for the repairing of potholes on the existing surfaced road, and unblocking and cleaning of drainage ketch pit to maintain free flow stormwater. Rehabilitation of existing roads, and re-gravelling and blading of gravel roads in rural and peri-urban on regular basis. A total of 108 km gravel roads were maintained through dry blading; re-gravelling also a total of 378m² of potholes were patched (tar roads) in the year under review. Project Management Unit: This section ensures that everybody has an access and better roads as enshrined in the Constitution. All the roads that were identified for 14/15 financial year were budgeted for. Only one road that is under construction and it is 95% complete. Public amenities such as community halls were constructed. A total of six community halls were constructed and only one community hall that is 75% complete. The completed community halls are as follows: Mkhanyeni Community Hall, Feni Community Hall, Tsolo Community Hall, Nxopo Community Hall, Gwabeni Community Hall, under construction is the Runlets Community Hall. Land and Estate: A total of 710 houses were constructed during 15/16. Challenges faced include vandalism as some of the beneficiaries are yet to claim their houses. Peddie 500 is also yet to be finished. Access to Electricity: The Millennium Development Goal states that all households must have universal access to electricity by 2025. Access to electricity will alleviate poverty as the use of electricity supports lighting and cooking facilities. The electricity supply at Ngqushwa Local Municipal area is provided and maintained by Eskom in accordance with their Rural Electrification Program or Integrated National Electrification Programme. There were 125 households that were electrified in 2015/16 financial year, then the number has increased from 94.07% to 94.65% Access to Water: There is an increase in the number of household having access to water provision (by ADM). The percentage has increased from 94.3% to 96.9% which is a 2.6% increase during the financial year 15/16. Access to Sanitation: Sanitation has a slight increase from 63.6% to 69%. This increase is caused by the VIP toilets built/ provided and sanitation projects constructed. Amathole District Municipality has embarked in a front loading program to assist with the provision of sanitation to the communities. Waste Collection: Waste collection is done in urban areas and coastal resort areas excluding 118 villages. Refuse collection is 98% in urban and coastal resort areas as the municipality renders effective waste collection service within Ngqushwa Jurisdiction. Shortfalls: There is lack of appropriate machinery for waste collection which result to delays in waste collection and landfill management.

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CHAPTER TWO: GOVERNANCE 2.1 POLITICAL AND ADMINISTRATIVE GOVERNANCE

INTRODUCTION TO GOVERNANCE: Ngqushwa Local Municipality is a Category B which forms part of the seven (7) local municipalities under the Amathole District Municipality (ADM). A local municipality is a type of municipality that serves as the third, and most local, tier of local government. POLITICAL GOVERNANCE STRUCTURE Ngqushwa Local Municipality has a total number of 13 Ward Councillors and 12 Proportional Representatives including the Mayor and the Representative of the opposition party. Refer to Appendix A for a full list of Councillors, committee allocations and attendance at council meetings. Also included are committees and committee purposes. The Council performs both legislative and executive functions. It focuses on legislative, oversight and participatory roles, and has delegated its executive function to the Executive Committee. Its primary role is to debate issues publicly and to facilitate political debate and discussion. Apart from their functions as policy makers, Councillors are also actively involved in community work and the various special programmes in the municipal area.

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POLITICAL STRUCTURE FUNCTION MAYOR: Cllr. S. E .Ndwayana

FUNCTION: The Mayor of a municipality:

Presides at meetings of the executive committee; and Performs the duties, including any ceremonial functions, and exercises the powers delegated to the mayor by municipal council or the executive committee.

SPEAKER: Cllr. Z. Jowela

Function: The Speaker of a municipal council:

Presides at meetings of the council; Performs the duties and exercises the powers delegated to the speaker in terms of section 59 of the Local Government: Municipal Systems Act, 2000 (Act No. 32 of 2000); Must ensure that the council meets at least quarterly; Must maintain order during the meetings; Must ensure compliance in the council and council committees with the Code of conduct set out in schedule 1 to the Local Government: Municipal Systems Act, 2000 (Act No.32 of 2000); and Must ensure that the council meetings are conducted in accordance with the rules and orders of the council.

CHIEF WHIP: Cllr. N.Gxasheka EXECUTIVE COMMITTEE: Cllr. T. M. Siwisa (BTO) Cllr. M. Faltein (Infrastructure) Cllr. N. Tele (Planning & Development) Cllr. L. Cuka (Corporate Services) MPAC CHAIRPERSON: Cllr. S.A Jali

COUNCILLORS: Below is a table that categorise the Councillors within their specific political parties and wards:

WARD NO COUNCILLOR IDENTITY NUMBER POLITICAL PARTY

PORTFOLIO

1 Z. Jowela 841126 5409 08 7 ANC Ward Councilor/ Municipal Speaker 2 N. Coto 640205 0652 082 ANC Ward Councilor/Infrastructure

Standing Committee 3 P. Sitole 741115 0505 08 1 ANC Ward Councilor/ Community Services

Standing Committee 4 N.N.C. Maphekula 591225 0661 08 0 ANC Ward Councilor/ Corporate Services

Standing Committee 5 M.G. Yolelo 530827 5535 08 8 ANC Ward Councilor/ Infrastructure

Standing Committee 6 M C Mapuma 460509 5492 08 0 ANC Ward Councilor/Infrastructure

Standing Committee/ MPAC 7 T. Magazi 580221 5757 08 3 ANC Ward Councilor/ Infrastructure

Development Standing Committee 8 A Mtshakazi 670701 5868 08 0 ANC Ward Councilor/ Infrastructure

Standing Committee 9 N.Y. Ndabazonke 641124 0901 08 5 ANC Ward Councillor/ Community Services

Standing Committee/ MPAC 10 N A Seysman 680101 3388 08 2 ANC

Ward Councillor/ Community Services

11 A Ndanda 830214 5585 08 1 ANC Ward Councillor/ Corporate Services Standing Committee/ MPAC

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WARD NO COUNCILLOR IDENTITY NUMBER POLITICAL PARTY

PORTFOLIO

12 T. G. Dyibishe 770929 5890 08 0 ANC Ward Councillor/ Infrastructure Standing Committee/MPAC

13 N. Mntanga 871231 0363 08 2 ANC Ward Councillor/Budget and Treasury Standing Committee

Below is a table of PR Councillors :

TRADITIONAL LEADERS

NO TRADITIONAL LEADER IDENTITY NUMBER TRADITIONAL COUNCIL PORTFOLIO 1 N. Mhlauli 801028 5428 083 AMAHLUBI T/C PRINCE 2 Gladness Luvuyo Zitshu 510903 5628 08 4 MSUTU T/C PRINCE 3 Bonisile Matomela 630804 0709 08 7 AMARHELEDWANE T/C PRINCE 4 Ntombizandile V

Njokweni 721205 0524 08 9 DABI T/C PRINCESS

5 Prince Stofile PRINCE

NO COUNCILLOR IDENTITY NUMBER POLITICAL PARTY

PORTFOLIO

1 Mnikelo Tempile Siwisa 730922 5529 08 8 ANC EXCO Member/Portfolio Head: BTO 2 Solomzi Eswell

Ndwayana 521217 5701 08 1 ANC Mayor

3

Mveleleli Faltein 760522 5652 08 9 ANC EXCO Member/Portfolio Head: Infrastructure Standing Committee

4 Mzolisa Bernard Sethuntsa

600505 6320 08 1 ANC PR Councillor/Corporate Services Standing Committee

5 Thuliswa Moreen Dyani

731116 0555 08 6 ANC PR Councillor/ MPAC/ Budget and Treasury Standing Committee

6 Sindile Austin Jali

690909 2440 08 8 ANC PR Councillor/ MPAC Chairperson/Community Services Standing Committee

7 Nolusindiso Caroline Gxasheka

840514 0557 08 6 ANC PR Councillor/MPAC/ Budget and Treasury Standing Committee(Chief Whip)

8 Lindiwe Cuka

640401 0938 08 0 ANC EXCO Member/Portfolio Head: Corporate Services

9 Nozuko Whinette Tele

721118 0657 08 8 ANC EXCO Member/ Portfolio Head: Community Services

10 Thamsanqa Tusani

571223 5885 08 9 ANC PR Councillor/MPAC Corporate Services Standing Committee

11 Mlungisi Boqwana

720812 5955 08 0 ANC PR Councillor/Budget and Treasury Standing Committee

12 Gladwell Mzivumile Ntonjane

580106 6160 08 2 DA PR Councillor/Budget and Treasury Standing Committee/ MPAC

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COUNCILLORS ATTENDANCE AT COUNCIL MEETINGS

Name of Councillor

Ordinary Council Special Council

No. of Meetings Present

Absent With

Apology

Absent Without Apology


Absent With

Apology


Councillor M Boqwana 3 3 Nil Nil 7 5 Nil 2

Councillor NF Coto 3 2 1 0 7 5 Nil 2

Councillor L Cuka 3 2 1 1 7 5 Nil 2

Councilor TM Dyani 3 2 1 Nil 7 3 1 3

Councillor T.G Dyibishe 3 3 Nil Nil 7 1 Nil 6

Councillor M Faltein 3 3 Nil Nil 7 3 Nil 4

Councillor NC Gxasheka 3 3 Nil Nil 7 5 Nil 2

Councilor SA Jali 3 3 Nil Nil 7 6 Nil 1

Councillor Jowela 3 3 Nil Nil 7 6 Nil 1

Councillor T Magazi 3 2 1 Nil 7 6 Nil 1

Councillor NNC Maphekula 3 3 Nil Nil 7 4 1 2

Councillor MC Mapuma 3 3 Nil Nil 7 4 1 2

Councillor N Mntanga 3 3 Nil Nil 7 4 Nil 3

Councillor A Mtshakazi 3 2 Nil 1 7 4 Nil 3

Councillor NY Ndabazonke 3 3 Nil Nil 7 3 1 3

Councillor A Ndanda 3 3 Nil Nil 7 3 1 3

Councillor SE Ndwayana 3 2 1 Nil 7 7 Nil Nil

Councillor GM Ntonjane 3 3 Nil Nil 7 5 Nil 2

Councilor MB Sethuntsa 3 1 2 Nil 7 2 5 Nil

Councillor NA Seysman 3 3 Nil Nil 7 5 Nil 2

Councillor P Sitole 3 3 Nil Nil 7 4 1 2

Councillor MT Siwisa 3 3 Nil Nil 7 6 Nil 1

Councillor NW Tele 3 1 1 1 7 4 Nil 3

Councillor T Tusani 3 3 Nil Nil 7 4 Nil 3

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Name of Councillor



Absent With

Apology



Absent With

Apology


Councillor MG Yolelo 3 3 Nil Nil 7 6 Nil 1

Name of Traditional

Leader



Absent With

Apology



Absent With

Apology


Prince N. Mhlauli 3 3 Nil Nil 7 6 Nil 1

Prince B Matomela Passed On In March 2016

Princess NV Njokweni 3 Nil Nil 3 7 Nil Nil 7

Prince GL Zitshu 3 3 Nil Nil 7 6 Nil 1

Prince S. Sitofile 3 1 Sworn In in April 2016 7 2 Sworn In in April 2016 COUNCILLORS ATTENDANCE AT EXECUTIVE COMMITTEE MEETINGS EXECUTIVE COMMITTEE MEETINGS – 01 July 2015 to 30 June 2016

Name of Councillor

Ordinary Executive Committee Meetings Special Executive Committee Meetings

No. of Mtngs Present

Absent With Apology


No. of Mtngs Present

Absent With Apology


Councillor L Cuka 3 2 Nil 1 6 3 Nil 3 Councillor M Faltein 3 Nil 2 1 6 2 1 3

Councilor MT Siwisa

3 3 Nil Nil 6 5 Nil 1

Councillor N Tele 3 Nil 1 2 6 4 1 1 Councillor SE Ndwayana 3 3 Nil Nil 6 6 Nil Nil

COUNCILLORS ATTENDANCE AT CORPORATE SERVICES STANDING COMMITTEE MEETINGS Corporate Services Standing Committee Meetings – 01 July 2015 to 30 June 2016

Name of Councillor Ordinary Standing Committees

No. of Meetings Present Absent With Apology Absent Without Apology

Councillor L Cuka 3 3 Nil Nil Councillor NNC Maphekula 3 2 1 Nil Councillor A Ndanda 3 3 Nil Nil Councillor MB Sethuntsa 3 Nil 3 Nil Councilor T Tusani 3 3 Nil Nil

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Name of Traditional Leader Ordinary Standing Committees


N. Njokweni 3 Nil Nil 3 COUNCILLORS ATTENDANCE AT PLANNING & DEVELOPMENT STANDING COMMITTEE MEETINGS Council Meetings – 01 July 2015 to 30 June 2016



Councilor SA Jali 3 3 Nil Nil Councillor M Mapuma 3 2 1 Nil Councillor N Seysman 3 1 2 Nil Councilor P Sitole 3 1 1 1 Councilor N Tele 3 2 1 Nil Councillor N Ndabazonke 3 3 Nil Nil



Prince B. Matomela 3 0 Nil 3 COUNCILLORS ATTENDANCE AT BUDGET AND TREASURY STANDING COMMITTEE MEETINGS Council Meetings – 01 July 2015 to 30 June 2016



Councillor M Boqwana 3 1 1 1 Councillor T Dyani 3 1 Nil 2 Councillor N Gxasheka 3 1 Nil 2 Councillor N Mntanga 3 1 Nil 2 Councillor G Ntonjane 3 1 Nil 2 Councillor MT Siwisa 3 3 Nil Nil



Prince N. Mhlauli 3 Nil Nil 3 COUNCILLORS ATTENDANCE AT INFRASTRUCTURE DEVELOPMENT STANDING COMMITTEE MEETINGS Council Meetings – 01 July 2015 to 30 June 2016



Councillor T Magazi 3 2 1 Nil Councillor T Dyibishe 3 3 Nil Nil Councilor M Faltein 3 3 Nil Nil

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Councillor A Mtshakazi 3 1 Nil 2 Councilor M Yolelo 3 3 Nil Nil Councillor N. Coto 3 3 Nil Nil



Prince GL Zitshu 3 3 Nil Nil POLITICAL DECISION MAKING STRUCTURES: Decisions are taken through the council and the Executive Committee oversees that all resolutions are implemented. The audit committee ensures that the Performance is monitored regularly and all departments submit Quarterly Performance Reports which result in a score card. MPAC plays an oversight role. 2.2 ADMINISTRATIVE GOVERNANCE INTRODUCTION TO ADMINISTRATIVE GOVERNANCE: MFMA section 60 (b): The Municipal Manager of a municipality is the accounting officer of the municipality for the purposes of this Act and must provide guidance on compliance with this Act to political structures; political office bearers, and officials of the municipality and any entity under the sole or shared control of the municipality. ADMINISTRATIVE GOVERNANCE STRUCTURE The Municipal Manager is the Accounting Officer of the Municipality.S/He is the head of the administration, and primarily has to serve as chief custodian of service delivery and implementation of political priorities. S/He is assisted by his/her directors which constitutes the Management Team, whose structure is outlined in the table below:

Top Administrative Structure

Position Duration Qualifications

Mr.T.T.Mnyimba Municipal Manager 15 June 2015 Bcom Hons : Business Management

Ms. N Mazwayi HOD at Corporate Services and Acting Municipal Manager

Appointed as HOD Corporate Services on the 1st May 2014. Acted as MM from 13June 2014 till March 2015

BAdmin Hons:Industrial Psychology

Mr V.C Makedama Chief Financial Officer Appointed 1ST November 2014 Bcompt Mr. L. Govu HOD: Technical Services Appointed 1st March 2015 BTech : Civil Engineering Mr. S.S Mnweba Acting HOD: Community

Services Appointed as Acting HOD: Community Services from July 2013 to date

Masters :Urban and Regional Planning

2.3 INTERGOVERNMENTAL RELATIONS INTRODUCTION TO CO-OPERATIVE GOVERNANCE AND INTERGOVERNMENTAL RELATIONS MSA section 3 requires that municipalities exercise their executive and legislative authority within the constitutional system of co-operative governance envisage in the Constitution section 41.

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As outlined in Chapter 3 of the Intergovernmental Relations Framework (2005), the Implementation Protocols (IP) better known as Memorandum of Understanding (MOU) is a useful tool to operationalize the management of a Joint Programme to realize government developmental outcomes. The Inter-governmental Relations Framework Act, (Act No 13 of 2005), requires all spheres of government to work jointly, coordinate, communicate, align and integrate service delivery effectively, to ensure access to services. In this regard the Municipality complies with the provisions of the Act. Intergovernmental Relations (IGR) meetings were held in the 1st and 4th quarter of the financial and the 2nd and 3rd quarter were not convened due to poor attendance by government departments and stakeholders. With the intervention of the District IGR and Provincial IGR efforts were made to strengthen the forum and terms of reference were developed to assist in strengthening the forum and as a result 4th quarter IGR forum was convened and well attended. The following departments attended:

Department of Human Settlements, Amathole District Municipality Municipal Support Unit and Engineering Department, Department of Roads and Public Works Department of Health Department of Home Affairs Department of Agriculture and Agrarian Reform Department of Sport Recreation Arts and Culture Aspire Independent Electoral Commission Department of Social Development and Special Programmes Eskom Department of Cooperative Governance & Traditional Affairs Department of Education Department of Safety and Liason South African Local Government Association Department of Agriculture ,Forestry and Fisheries Department of Sports , Recreation and Culture Community Development Workers Non- Government Organisations South Africa Social Security Services

PROVINCIAL INTERGOVERNMENTAL STRUCTURE Ngqushwa Local Municipality attends the Provincial MUNIMEC and Provincial Municipal Infrastructure Forum, Local Government Communications Forum, EPWP Provincial Steering Committee, Chief Audit Executive Forum, HRD & Collective bargaining Working Group, Provincial Skills Development Facilitators Forum to consult on matters of mutual interest and where the state and progress of municipalities are addressed. DISTRICT INTERGOVERNMENTAL STRUCTURES For district and local municipalities Ngqushwa Municipality attends the district IGR and District Mayors Forum (DIMAFO), Speakers Forum, District Engineering Forum, District Communicators Forum (SDF), Agricultural Forum, Corporate Services District Forum (CSDF), District Skills Development Facilitators Forum, Tourism Forum, District Finance Forum and District Representative Forum. We were involved in the following programmes:

the zoning scheme, SPU Programmes, Moral Regeneration Movement

2.4 PUBLIC ACCOUNTABILITY AND PARTICIPATION OVERVIEW OF PUBLIC ACCOUNTABILITY AND PARTICIPATION MSA section 17 (2): requires a municipality to establish and organise its administration to facilitate a culture of accountability amongst its staff. Section 16 (1): states that a municipality must develop a system of municipal governance that compliments formal representative governance with a system of participatory governance. Section 18 (a) - (d): requires a municipality to supply its community with information concerning municipal governance, management and development.

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PUBLIC MEETINGS: COMMUNICATION, PARTICIPATION AND FORUMS: As guided and inspired by the Legal framework that includes the Constitution of the Republic of South Africa, The Municipal Systems Act 32 of 2000, as well as The Municipal Structures Act No.117 0f 1998, Ngqushwa Local municipality has ensured regular and effective communication with the community. The Municipality has to manage strategically Information flow with relevant target groups, and also to ensure that communication in all spheres of government is driven by a clear message to improve the lives of the people. It is widely recognized and understood that an organization's success rests on how well it understands the needs of its customers, and how it responds to those needs by delivering what is required. Good Customer Care clearly implies delivering a professional service, providing access to quality information, providing services that are timely, cost effective, and useful, for Government’s core objectives. The Presidential Hotline is an electronic tool we are utilizing to manage queries, complaints. Below is a communication checklist of the compliance to the communication requirements:

Communication Activities Yes/No Communication Unit Yes (only one person permanently employed) Communication strategy Yes Communication policy No Customer satisfaction survey No Functional Complaint management system Yes Newsletter distributed quarterly Yes

The municipality has ensured during the year that there is full participation of the public through;

IDP/Budget and PMS Representative Forums. IDP Road shows. MPAC Road shows. Local Communicator’s Forum. Service Delivery Days. National Information Days

Each Ward is afforded the opportunity to host the Rep forum, IDP road shows and Service delivery days. These Service Delivery Days are convened throughout the year.In these gatherings, people who attend are mostly; unemployed youth, adults and elderly citizens.Announcements are done through written communication. WARD COMMITTEES Refer to Appendix E which contains further details on ward committee governance and to Appendix F that contains performance data on a ward by ward basis.

Public meetings Nature and

purpose of the meeting

Date of events

Number of Participating

Municipal Councilors


Municipal Administrators

Number of Community members attending

Issues Addressed (Yes/No)

Date and Manner of

feedback given to community

MPAC Roadshows

10-13 February

2015

25 22 727 Yes Feedback was tabled during IDP and Budget Roads

IDP and Budget Roadshows

21-23 April 2015

25 23 495 Yes

IGR Forum 9 Yes Next IGR meeting and

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Public meetings Nature and

purpose of the meeting

Date of events


Municipal Councilors


Municipal Administrators

Number of Community members attending

Issues Addressed (Yes/No)

Date and Manner of

feedback given to community

through bilateral between departments

Ward: 1

Name of representative Capacity representation Date of meetings held during the year

Z Jowela Ward Councillor 12 October 2015 02 February 2016

A. Zothe Secretary P.A Duma Ward Committee Member B.D Qhomfe Ward Committee Member N. Ntshayi Ward Committee Member T.C Njajula Ward Committee Member S.M Tshefu Ward Committee Member M. Ntlabathi Ward Committee Member N. Mateta Ward Committee Member N. Xozwa Ward Committee Member N. Muyiso Ward Committee Member

Ward: 2


N.F Coto Ward Councillor 03 August 2015 02 February 2016

T. Maseti Secretary Z.M.M Makapela Ward Committee Member N Masina Ward Committee Member M. Tyhuthulana Ward Committee Member N.T Ngojo Ward Committee Member N. Mbaxa Ward Committee Member N.E Guga Ward Committee Member N. Sinuka Ward Committee Member N. Ngqokwe Ward Committee Member N. Xatisa Ward Committee Member

Ward: 3 Name of representative Capacity representation Date of meetings held during the

year P Sitole Ward Councillor

15 September 2015

F Bangani Secretary N. Mpofu Ward Committee Member S. Dlova Ward Committee Member T. Ntsundwana Ward Committee Member M. Makeleni Ward Committee Member M. Laiti Ward Committee Member M. Kazi Ward Committee Member N.J Sese Ward Committee Member V. Mgxwadi Ward Committee Member

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N.A Madwaba Ward Committee Member Ward: 4


N.N.C Maphekula Ward Councillor 02 September 2015

V Bedesho Secretary Mpoli Ward Committee N. Khunjuzwa Ward Committee Member L.L Shiyane Ward Committee Member N.E Thantatha Ward Committee Member B. Koshe Ward Committee Member T.G Peter Ward Committee Member Y. Zono Ward Committee Member T.S Tshemese Ward Committee Member N. Mbovane Ward Committee Member

Ward: 5


G Yolelo Ward Councillor 05 August 2015 12 April 2016

K.K Thunyiswa Secretary N. Ngwendu Ward Committee Member S. Noqoko Ward Committee Member S.D Polweni Ward Committee Member M. Nqaqhela Ward Committee Member K.W Kene Ward Committee Member N. Jack Ward Committee Member B.B Rhoyi Ward Committee Member C.M Thili Ward Committee Member C.G Phethela Ward Committee Member

Ward: 6


M Mapuma Ward Councillor 07 October 2015 P Mkhatshwa Secretary

N.L Swapi Ward Committee Member N. Nyengule Ward Committee Member Z.L Ngwekazi Ward Committee Member N. Majola Ward Committee Member T.V Mpofu Ward Committee Member L. Makhubalo Ward Committee Member N. Lawu Ward Committee Member N. Booi Ward Committee Member P.V Luvuno Ward Committee Member

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Ward: 7 Name of representative Capacity representation Date of meetings held during the

year T Magazi Ward Councillor

06 August 2015 19 April 2016

N Cikido Secretary S. Sam-Sam Ward Committee Member D. Maxengana Ward Committee Member L. Manona Ward Committee Member K.F Dyinana Ward Committee Member N. Mquqo Ward Committee Member M. Dyibhishe Ward Committee Member D. Ndleleni Ward Committee Member X. Sicwebu Ward Committee Member L. Macwili Ward Committee Member

Ward: 8

Name of representative Capacity representation Date of meetings held during the year A.Mtshakanzi Ward Councillor

06 August 2015 17 February 2016 26 April 2016

N Jakavula Secretary N. Hlasela Ward Committee Member N. Madlingozi Ward Committee Member N. Mnqwazi Ward Committee Member M. Dlengezele Ward Committee Member M.C Maki Ward Committee Member M. Ndwayana Ward Committee Member M. Mfundisi Ward Committee Member N.G Mvabaza Ward Committee Member N. Manona Ward Committee Member

Ward: 9


N.Y Ndabazonke Ward Councillor 26 November 2015 16 February 2016

M Malinga Secretary N. Maswana Ward Committee Member B.V Mangi Ward Committee Member N. Mtati Ward Committee Member N.T Maswana Ward Committee Member N.V Mapekula Ward Committee Member C. Zazini Ward Committee Member M. Booi Ward Committee Member Z. Soganga Ward Committee Member M. Tana Ward Committee Member

Ward: 10


N Seysman Ward Councillor 26 November 2015 16 February 2016

M Dlamini Secretary N. Doto Ward Committee Member M. Mpolweni Ward Committee Member D.L Matinise Ward Committee Member K.T Matitibala Ward Committee Member N. Vellem Ward Committee Member

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Vacant Ward Committee Member M. Mpehlo Ward Committee Member M. Faltein Ward Committee Member X. Lento Ward Committee Member

Ward: 11


A Ndanda Ward Councillor 07 October 2015 04 February 2016

N Gxaka/Gusha Secretary Ward Committee Member N. Bacela Ward Committee Member V.W Poni Ward Committee Member X. Mamana Ward Committee Member Ward Committee Member N.V Toto Ward Committee Member T. Dlova Ward Committee Member B. Nzuzo Ward Committee Member L. Qwabe Ward Committee Member N.V Toto Ward Committee Member

Ward: 12


T. Dyibishe Ward Councillor 16 September2015 N Tima Secretary

T. Mvuyiswa Ward Committee Member M.E Deyi Ward Committee Member J. Speelman Ward Committee Member V. Seti Ward Committee Member S. Halana Ward Committee Member E. Daymani Ward Committee Member T. Landu Ward Committee Member T. Mtikitiki Ward Committee Member T. Mvuyiswa Ward Committee Member

Ward: 13


N. Mntanga Ward Councillor 18 August 2015 14 March 2016

N. Siyolo Secretary N. Mbanzi Ward Committee Member W. Bhungu Ward Committee Member A.Mfeketho Ward Committee Member A.Magwaxaza Ward Committee Member M. Malahla Ward Committee Member Z. Ntobolo Ward Committee Member N. Hlangane Ward Committee Member N. Manya Ward Committee Member N. Maswana Ward Committee Member

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IDP PARTICIPATION AND ALIGNMENT

IDP Participation and Alignment Criteria* Yes/No Does the municipality have impact, outcome, input, output indicators? Yes Does the IDP have priorities, objectives, KPIs, development strategies? Yes Does the IDP have multi-year targets? Yes Are the above aligned and can they calculate into a score? Yes Does the budget align directly to the KPIs in the strategic plan? Yes Do the IDP KPIs align to the Section 57 Managers Yes Do the IDP KPIs lead to functional area KPIs as per the SDBIP? Yes Do the IDP KPIs align with the provincial KPIs on the 12 Outcomes Yes Were the indicators communicated to the public? Yes Were the four quarter aligned reports submitted within stipulated time frames? No * Section 26 Municipal Systems Act 2000 T 2.5.1

2.5 CORPORATE GOVERNANCE OVERVIEW OF CORPORATE GOVERNANCE Corporate governance is the set of processes, practices, policies, laws and stakeholders affecting the way an institution is directed, administered or controlled. Corporate governance also includes the relationships among the many stakeholders involved and the goals for which the institution is governed. RISK MANAGEMENT

Ngqushwa Municipality’s council monitors risk through the Audit Committee. The Committee plays an oversight role to ensure that there is an effective risk management process and system within the organisation. This approach provides technical assistance to the Council to exercise its role in ensuring that an adequate and effective risk management system and process is in place. The Council is expected to exercise the duty of care, skill, and diligence in identifying, assessing and monitoring risks as presented by Audit Committee. The Audit Committee recommends to the Council risk strategies and policies that need to be set, implemented and monitored. With the technical support from both internal audit and audit committee Ngqushwa Local Municipality identifies risk areas that are managed systematically and continuously. The municipality has a risk register in place which is treated as a working risk management document of which the identified risks are constantly recorded and properly managed. The municipality’s senior management monitors and evaluates the implementation and efficiency of management’s controls and such actions identified to improve current controls in the risk register. The municipality submits its risk management register to Internal Audit and Audit Committee on a quarterly basis for review. During the period under review, the municipality updated the Strategic and Operational Risk Register in line with the mitigation plans undertaken by management to improve the Risk Management System.

ANTI CORRUPTION AND ANTI FRAUD Section 83© of the MSA refers to the implementation of effective bidding structures to minimise the possibility of fraud and corruption and the Municipal Finance Management Act(MFMA)section 112(1)(m)(i) identify supply chain measures to be enforced to combat fraud and corruption, favouritism and unfair and irregular practices. Section 115(1) of the MFMA states that the accounting officer must take steps to ensure mechanisms and separation of duties in a supply chain management to minimise the likelihood of corruption and fraud.

Name of Strategy Developed : Yes/No Date Adopted /Reviewed Anti-fraud & Anti-Corruption Policy Yes Adopted in May 2012/13

The Anti-fraud and corruption committee has not been established to oversee the approach of the Municipality to fraud prevention, fraud detection strategies and responses to fraud and corruption incidents reported by employees or other external parties.

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The Municipality Audit Committee, appointed in terms of Section 166 of the MFMA has also been appointed as the Performance Audit Committee The Audit Committee assessment report for 2015/2016 financial year in accordance with Section 121(3) (j) of the Municipal Finance Management Act (MFMA) No. 56 of 2003 and King III on corporate governance. The audit committee (the committee) was established in 2009/2010 financial year. The committee is on a second term of services to the municipality that expires in 28 February 2017.left with few months to complete our second term of service to the municipality. The Audit Committee (the Committee) is a sub-committee of Council. The responsibilities of the Committee are detailed in the Audit Committee Charter. This charter was developed by the committee, presented to management and was approved by the council and it is reviewed on a yearly basis. The purpose of the committee is to provide:

Independent assurance on the adequacy of the risk management framework, performance management, governance and the control environment; Independent scrutiny of the municipality’s financial and non-financial performance; and To oversee the financial reporting and compliance processes.

The key benefits of the audit committee are as follows:

Increasing public confidence in the objectivity and fairness of both financial and non-financial reporting; Reinforcing the importance and independence of internal and external audit and similar review processes; Providing additional assurance through a process of independent review. Raising awareness of the need for internal control and the implementation of audit recommendations.

The audit committee is required to report that it has regulated its affairs in compliance with the audit committee charter, and has discharged its responsibilities set out therein. Summary of committee responsibilities: The responsibilities of the Committee, as laid down in the Charter, include providing oversight on financial reporting and other matters such as the monitoring of governance processes, controls and risk management in the municipality. The Committee also ensures effective communication between the internal auditors, external auditors, the Council and management. During this period the Committee conducted the following business and made recommendations for improvement in the relevant areas:

Approval of the internal audit coverage plan; Reviewed the Annual Financial Statement for 2014/2015 financial year; Reviewed the municipalities financial and performance reports; Reviewed the risk management framework of the municipality; Considered litigation matters facing the municipality Reviewed Internal Audit quarterly reports. Reviewed External and Internal Audit recommendations, monitoring and tracking thereof. Concluded on issues that were raised on the previous years.

MEMBERSHIP OF THE AUDIT COMMITTEE The Committee comprises of three independent executive members. Representatives from the office of the Auditor General, Internal Audit and senior management of the municipality attend committee meetings on an ex officio status. In terms of our Charter at least four (04) meetings should be held during a financial year. We are pleased to announce that all four meetings were held in the 2015/2016 financial year. Details of the Committee members are as follows:

Member Expertise Number of meetings attended Dr. W Plaatjes (Chairperson) Finance, auditing, risk management and

performance management 5

Mr. G Bana (Internal Audit specialist) Finance, auditing, and risk management 5 Ms N Hlongwane Finance and risk management 5

The permanent invitees to the Committee meetings include: the Municipal Manager, Chief Finance Officer, senior managers, MPAC Chair and representatives from Internal Audit.

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The Audit Committee recommended the following during the 2015/16 financial year:

Date of Meetings Reports Considered by the Committee

19 August 2015

Merging of ICT and Risk Committee Draft Annual Financial Statements 2014/15 Progress Report AGSA Draft Annual Performance Report 2014/15

03 September 2015

Internal Audit Status Report Strategic Risk Report & Operational Risk Report Audit Action Plan Report Quarterly Financial Report Internal Audit Plan Internal Audit Charter

26 November 2015

Quarterly Financial Report Report on unauthorised, irregular, fruitless and wasteful expenditure Budget Implementation Report Draft Audit Action Plan PMS Q1 Report Internal Audit quarterly Report Draft Annual Report Strategic Risk Report & Operational Risk Report

21 January 2016

Sec 72 Report – Mid-year Report (PMS) Sec 72 Report – Mid-year Report (Finance) Sec 52(d) Report - Quarterly Budget Monitoring Report Budget Adjustment 2015/16 Final Audit Report 2014/15 Audit Action Plan 2015/2016 Implementation Status of the Internal Audit Plan Strategic Risk Report & Operational Risk Report

18 May 2016

Q3 Institutional Overview Report 2015/16 3rd Quarterly Performance Report Draft SDBIP 2016/17 Performance Management Framework Review Bi-annual Financial Statements 2015/16 3rd Quarterly Budget Monitoring Report Draft Budget 2016/17 ICT Reports Implementation Status of the Internal Audit Plan 2015/16 Internal Audit reports Q3 Risk Committee close-out Reports Strategic & Operational Risk Report AC and IA Evaluation Tool 2015/16. Progress Update on the status of the 2015/16 regulatory audit

INTERNAL AUDITING

Each municipality and each municipal entity must have an internal audit unit, subject to MFMA section 165 (1) (2). (2) The internal audit unit of a municipality or municipal entity must—

(a) prepare a risk-based audit plan and an internal audit program for each financial year; (b) advise the accounting officer and report to the audit committee on the implementation of the internal audit plan and matters relating to—

(i) internal audit; (ii) internal controls; (iii) accounting procedures and practices; (iv) risk and risk management;

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(v) performance management; (vi) loss control; and (vii) compliance with this Act, the annual Division of Revenue Act and any other applicable legislation; and

(c) Perform such other duties as may be assigned to it by the accounting officer.

The following Internal Audit Reports were issued

Internal Audit Reports Issued Quarterly PMS Reviews Audit Action Plan Quarterly Dashboard Reports Risk Management Reviews Records Management Review Leave Management Review ICT General Review SCM: Supplier Database Review Bi Annual Financial Statements Review Expenditure Review SCM: Contracts Management Review Q3 Financial Statements Review Internal Projects Review SCM: Irregular Fruitless Review Risk Assessment Workshop Report Draft APR Review 201516 Draft AFS Review 201516 Occupational Health and Safety Review Revenue Management Review Payroll Management Review ICT Application Controls Review

WEBSITES:

Documents published on the Municipality’s/Entity Yes/No Current annual and adjustment budgets and all budget related documents Yes All current budget related policies Yes The annual report for 2013/14 Yes The annual report for 2014/15 to be published All current performance agreements required in terms of section 57(1)(b) of the Municipal Systems Act for 2013/14 and resulting scorecards Yes

Mid - year performance report 2013/14 Yes IDP and Budget 2012-2017 Yes IDP 2015/16 Yes Annual SDBIP 2015/16 Yes All service delivery agreements for 2015/16 No All supply chain management contracts above a prescribed value (give value) for 2015/16 Yes An information statement containing a list of assets over a prescribed value that have been disposed of in terms of section 14 (2) or (4) during 2015/16 Yes

Contracts agreed in Year 1 to which subsection (1) of section 33 apply, subject to subsection (3) of that section Yes All quarterly reports tabled in the council in terms of section 52 (d) during 2015/16 Yes Public private partnership agreements referred to in section 120 made in year 0 Yes All supply chain management contracts above a prescribed value (give value) for 2015/16 Yes An information statement containing a list of assets over a prescribed value that have been disposed of in terms of section 14 (2) or (4) during 2015/16 Yes

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Documents published on the Municipality’s/Entity Yes/No Contracts agreed in Year 1 to which subsection (1) of section 33 apply, subject to subsection (3) of that section Yes All quarterly reports tabled in the council in terms of section 52 (d) during 2015/16 Yes Public private partnership agreements referred to in section 120 made in year 0 No

MUNICIPAL WEBSITE CONTENT AND ACCESS: The municipal website is updated as per section 21 (b) of the Municipal Systems Act and section 75 of the Municipal Finance Management Act. The website was later in the financial year upgraded with a new look and feel to be user friendly, documents according to Municipal Systems Act and Municipal Finance Management Act have been updated. e.g. Tenders, vacancies, notices and monthly budget

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CHAPTER THREE – SERVICE DELIVERY PERFORMANCE 3.1. WATER PROVISION Amathole District Municipality (ADM) is currently mandated to be a Water Services Authority and a Provider in this Municipality and is currently in a process of updating its water services development plan (WSDP) as the current one is outdated. This plan provides an overview of the coverage and gives a strategic direction to the ADM and identifies the most crucial projects in order of priority. Bulk water infrastructure is provided by a number of dams and water purification works within the municipal area which is operated by the Amatola Water Board. Table 14 gives an indication of these

DAM DAM’S CAPACITY FIRM YIELD (Mm3/pa)

Dabi Dam 0.23 0.50 Mankazana Dam 1.85 1.38 Ndlambe Dam 0.06 0.06 Rura Dam 0.05 0.05 Sandile Dam 7.4 4.14 Laing Dam 5.55 2.76 TOTAL 2.84 2.14

The Amatola Water Board also manages and operates six water treatment plants which collectively supply 2.84 million liters of portable water. These water treatment plants are as follows:

Dabi water treatment works. Peddie Regional water treatment works. Glenmore (Enxuba) water treatment works. Sandile Dam water treatment works. Laing dam water treatment works.

In Ngqushwa there is only one pump station which is located at the Water Works in Nqwenerana also known as Kingslyn. The water treatment works at Tyefu has been closed down and all the areas it used to serve are now being served by Glenmore Water Treatment works. In Peddie, adequate water is supplied from the King’s Lynn scheme which is also operated by the Amatola Water Board. In Hamburg, water is supplied by Amatola Water Board from Birha scheme which is also considered adequate for the present purposes. This source is however supplemented by three boreholes which constituted the town’s original supply and which are capable of supplying 25% of the town’s average requirement

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Table: Source of water by ward and source

Ward

Regional/local water scheme (operated by municipality

or other water services provider)

Bore

hole

Sprin

g

Rain

wat

er ta

nk

Dam/pool/stagnant water

River/ stream

Water vendor

Water tanker Other Grand

Total

21206001 1341 1 2 154 97 5 57 27 16 1701 21206002 1110 6 1 191 34 56 18 35 235 1686 21206003 1547 2 3 93 32 1 8 88 17 1792 21206004 1208 14 4 138 73 37 4 70 10 1558 21206005 667 5 3 129 4 102 - 3 2 914 21206006 944 7 4 441 55 6 2 182 25 1667 21206007 1063 44 15 373 79 59 38 250 23 1943 21206008 1246 9 2 277 110 112 18 57 39 1871 21206009 686 4 19 400 152 40 25 90 81 1497 21206010 1505 5 - 85 - 2 2 15 15 1630 21206011 1366 95 10 274 25 - 3 21 45 1839 21206012 854 - 2 407 65 3 - 60 27 1418 21206013 693 7 9 635 312 29 1 60 125 1870 Grand Total 14229 199 74 3595 1039 453 176 957 662 21384

Source: Stats SA (2011) 3.2 SANITATION There is only one sanitation treatment facility in the municipal area and this is at Peddie. The existing Waste Water Treatment Plant in Peddie is operating at its full capacity and is now overloaded. Amathole District Municipality is awaiting for an approval of EIA to construct a new Waste Water Treatment Works in Peddie town. There are no treatment facilities in Hamburg nor does the municipality render a service for the emptying of septic tanks. In rural areas use is primarily made of pit latrines, which are simply moved when the old ones are full. 3.3 ROAD MAINTENANCE INTRODUCTION TO ROAD MAINTENANCE The roads section is primarily responsible for the maintenance and rehabilitation of the Municipal paved; unpaved roads and stormwater within the Ngqushwa Municipal area.The municipality is responsible for 100% access to local roads within its jurisdiction, which include all streets within peri-urban and rural areas. It ensures the maintenance of a number of municipal roads which serve all communities and are regularly maintained, with the objective of addressing specific needs. The majority of municipal roads are gravel, with tar roads comprising 3% (12 km) of all municipal roads. The condition of tar roads 12 km is very bad, with a proportion of gravel roads 121km in good condition and ±357km of gravel roads in very bad condition. A road and stormwater master plans are being developed to address some of the identified future needs and challenges. The municipality is responsible for the repairing of potholes on the existing surfaced road, and unblocking and cleaning of drainage ketch pit to maintain free flow stormwater. Rehabilitation of existing roads, and re-gravelling and blading of gravel roads in rural and peri-urban on regular basis. There are approximately 1271.38km of roads in the municipal area. According to the Department of Roads and Public Works only 153.9km of these roads are tarred which translates to (12.11%) of the roads in the municipal area. A total of 108 km gravel roads were maintained through dry blading; re-gravelling also a total of 378m² of potholes were patched (tar roads) in the year under review.

35

The district comprises national, trunk, main, district, minor and access roads. The Major towns are linked by an adequate network of roads and there is also a good network of proclaimed gravel roads traversing the municipal area. The roads linking the various rural settlements are in a poor state of repair and are not adequately maintained. Municipality is only focusing on maintaining and constructing internal and access roads and in its jurisdiction, ±490km’s is gravel roads and 8.3km’s is surface roads. Roads and Storm-Water Section Staff

Task grade

Year – 14/15 Year 15/16

Employees No.

Posts No.

Employees No.

Vacancies (Fulltime

equivalents) No.

Vacancies (as a % of total posts)

0 - 3 8 8 7 1 87.5 4 – 6 5 5 5 0 100 7 – 9 0 0 0 0 0

10 – 12 3 3 3 0 100 Road Section Staff

Job level/ Task

Grade

Year -14/15 Year 15/16

Employees No.

Posts No.

Employees No.

Vacancies (Fulltime equivalents)

No.


% 0 – 3 1 1 1 100 4 – 6 0 0 0 0 0 7 – 9 1 1 1 1 100 10 – 12 0 0 0 0 0

3.4 PROJECT MANAGEMENT Project Management Unit section ensures that everybody has access and better services as enshrined in the Constitution of the Republic. All the projects that were prioritised by the municipal council for 15/16 financial year and budgeted for, at the end of the financial year were at retention stage i.e. 95% on expenditure. The provision of sports and recreation facilities, parks, community halls are managed and provided by the PMU section. In 2015/16 financial year a total of two community halls at Ndlambe and Nier were constructed, also two sport facilities were constructed at Glenmore and Hamburg successfully. The need for the provision of all these community facilities in both the peri-urban and rural areas is still great, as indicated at most IDP meetings Project Management Unit is the section that is specifically dealing with the project implementation of the municipal capital projects. Responsible for the administration and financial management of MIG and any other Capital funds within the department and national accounting systems for infrastructure projects of the department. Management of the MIG and the preparation of all necessary reports to the Provincial MIG Management Unit and the National MIG Unit the relevant provincial and national departments. Ngqushwa Municipality in terms of Division of Revenue Act (Act No 29 of 2013) forms part of the municipalities that receive grants from national treasury. The municipality is required to submit projects to be implemented under MIG to Provincial and National treasury and report to Treasury about expenditure on the grant.

36

PMU Section Staff

Job level

Year -14/15 Year 15/16

Employees No.

Posts No.

Employees No.


No.


% 0 – 3 0 0 0 0 100 4 – 6 0 0 0 0 0 7 – 9 1 1 1 1 100

10 – 12 1 1 1 1 100 13 - 16 1 1 1 1 100

PMU PROJECTS IN 2015/2016 FY

PROJECT NAME WARD NAME STATUS Ndlambe Community Hall 8 Completed Nier Community Hall 11 Completed Hamburg Sport field 11 95% Retention Glenmore Sport field 8 95% Retention Ngxakaxha Scheme Access Road 3 60% Construction Mgwalana Internal Roads 9 95% Retention Tuku A Internal Roads 6 95% Retention Dube Access Road 5 95% Retention

During 2015/2016 FY Ngqushwa Local Municipality employed 182 people through EPWP. The following are the projects implemented through EPWP:

Ngqushwa Road rangers, Pothole patching, Maintenance of Heritage sites, Refuse removal, Ngqushwa EPWP Interns, and Ngqushwa Local Workers

EPWP EMPLOYMENT AND EXPENDITURE The expenditure on EPWP as at the end of June 2016 is 100% MIG EXPENDITURE The expenditure on MIG as at the end of June 2016 is 100% 3.5 ELECTRICITY The Millennium Development Goal states that all households must have universal access to electricity by 2025. Access to electricity will alleviate poverty as the use of electricity supports lighting and cooking facilities. Eskom supplies electricity in the jurisdiction of Ngqushwa Local Municipality. The 2011 census figures depicts that there are 21384 households in the municipal area of which 94.65%households have access to electricity. This backlog is made up of in-fills and new extensions, rural and farm dweller homes. Eskom supplies electricity to the rural and farm dweller homes. The municipality only maintains the street lights and electricity in its own municipal buildings. The electricity supply to the areas of Ngqushwa is provided and maintained by Eskom in accordance with their Rural Electrification Programme. According to Eskom records there is no electricity backlog in Ngqushwa electrification, the only areas that are not electrified are the in-fills and new extensions of the villages. Ngqushwa local municipality is only maintaining street lights and its own buildings.

37

Electricity Services Policy Currently there is no electricity services policy in the municipality, the municipality has only the electricity maintenance plan which deals with. Electrical Section Staff

Task grade

Year – 14/15 Year 15/16

Employees No.

Posts No.

Employees No.


No.


% 0 - 3 0 0 0 0 0 4 – 6 2 3 2 3 100 7 – 9 0 0 0 0 0 10 – 12 0 0 0 0 0 13 – 16 1 1 1 1 100

Service Objective

Provision for housing for all households

Additional houses provided during the year (Houses required at year end)

additional houses (houses required)



additional houses

( houses required)

additional houses


additional houses

( houses required)

additional houses ( houses required)

815 105 105 815 105 N/A 1500 1500

3.6 HOUSING Housing development in the Ngqushwa Municipality is the function performed by the Department of Human Settlement. The Municipality’s role is to liaise with the department and allocate land for Housing Development. Two projects have been implemented though with successes and challenges. These projects are Peddie 500 (known as Peddie extension) and Peddie 1420 (known as new creation). Peddie Housing projects:

1. Peddie 1420

Peddie 1420, due to its size, the project was divided into two phases of which phase 1 was completed without problems. Phase two was blocked due to mismanagement of funds and shoddy workmanship on the side of the contractor. The project was unblocked and the contractor was on site in January 2012 and the project was completed within the projected time frames. The condition of houses in this project enabled the municipality obtain awards in the province and has been nominated for the National Awards.

2. Peddie 500

This is one of the projects that the Department of Human Settlements is finding hard to finish Construction of Peddie 500 started and upon construction of 394 houses the project was blocked due to financial constraints and inexperienced emerging contractors. The Provincial Department of Human Settlements managed to secure funding for the unblocking and rectification of that project. The contractor is on site, as of now ten (10) houses are finished.

38

HOUSING DEMAND PROFILE OF THE MUNICIPALITY The department of Human Settlements has reviewed the Ngqushwa Housing Sector Plan which will determine the housing demand based on the 2011 Census. The municipality is in the process of developing National Housing Needs Register which will determine the actual backlog as well as the subsidy quantum. The potential Housing Subsidy Qualifiers based on information from the 2014 Reviewed Housing Chapter, can be summarised as follows:

RURAL HOUSING

SOCIAL AND RENTAL

INFORMAL SETTLEMENT STRUCTURES

CHILD HEADED HOUSEHOLDS

4227 267 1314 129 The table above does provide an accurate estimation of informal settlement structures. This shows a sharp reduction in informal housing with the Ngqushwa Municipality. Access to housing

Source: Census 2011 HOUSING SUBSIDY PROJECTS There are 2 approved housing projects comprising 2177 units. Of these, 1420 is for green field’s development and 500 are in-situ development. Both these projects fall within the past projects. PAST AND CURRENT HOUSING PROJECT The housing projects recently completed by the Municipality are in Peddie (Peddie 710 and Peddie 500 though still under construction). A pilot housing project, consisting of 30 low cost houses has been completed in Hamburg and in Peddie, as 28 low cost housing units of the pilot housing project has also been completed. In addition, 395 out of 500 housing units of the Masakhane housing project in Peddie Extension have also been completed. The need for a housing project has been identified for the Glenmore area. Consumer education and beneficiary lists has been compiled and the feasibility study is underway to determine the feasibility of the project. Other projects have also been identified for Ndlovini and German village and feasibility studies are underway. Layouts for both projects have been developed, but the Ndlovini layout has been reviewed due to the constant demarcation of new sites.

Type of dwelling EC 126:Ngqushwa House or brick/concrete block structure on a separate stand 14823 Traditional Dwelling/hut/structure made of traditional material 4575 Flat or apartment in a block of flats 345 Cluster house in a complex 18 Town house (Semi detached house in a complex) 12 Semi detached house 21 House/flat/room in backyard 156 Informal Dwelling (Shack in backyard) 573 Informal dwelling (shack not in backyard;egin an informal/squatter settlement or on a farm) 741 Room /flatlet on a property or larger dwelling/servant’s quarters/granny flat 33 Caravan/tent 27 Other 60

TOTAL 21384

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Project Title Ward Area Sites

Project Value (R’000)

Houses Completed

No of units not started/under construction

Project Type

Project Status Comments

Peddie Masakhane 10 500 7 500 395 105

Green Fields- PLS

The project is in progress

Contractor has been appointed and is on site

Peddie Ph 2R/L 2 10 1420 38 802 710 Complete

Green Fields PHP

Complete Complete

Hamburg (Low cost Pilot Project)

30 - - - - Completed -

Peddie Low cost pilot project

10 28 - - - - Completed -

Prudhoe 12 In-situ ADM Project

Gcinisa South 11 500 - - - - Planning stage

Adjudication stage

Hamburg 11 500 - - - - Planning stage

Adjudication stage

Mpekweni 12 500 - - - - Planning stage

Adjudication stage

Peddie Alf Dlamini heights- middle income

10 150 - - - - Planning stage

Developer to be appointed

Tuku A 5 500 80 286 500 - - Communal land rights program

Planning Planning

Madliki 4 451 72 418 423 -- - - Planning Planning Lovers Twist 5 300 48 171 900 - - -- - - Cisirha 6 626 100 518 698 - - - - - Pikoli 9 499 80 125 927 - - - - - Lewis Village 9 500 80 286 500 - - - - Mankone 7 290 46 566 170 - - - - - German Vill 8 343 55 076 539 - - - - - Glenmore 7 1000 160 573 000 - - - - - Qaga Housing will always be an ongoing need in municipalities which will be hampered by affordability levels. HOUSING PROJECTS Incomplete Project Peddie 500 was unfinished with 105 units outstanding. The contractor has been appointed and is on site. Mpekweni, Gcinisa, and Hamburg Housing projects are at adjudication phase. HOUSING INFRASTRUCTURE Water and Sanitation is the function of Amathole District Municipality. Bulk services for Ngqushwa Municipality, therefore, becomes their responsibility.

40

Bulk water supply is available to accommodate for existing and additional housing projects identified. This however does not apply to sewerage infrastructure. Water borne sewerage is only available in Peddie Town where the bucket system has just been upgraded in 2007. The size of the Waste Water Works stifles housing development in Peddie. Areas such as Alf Dlamini could not be implemented due to its size. It is because of the above that ADM started the process of expanding it. Ngqushwa LM has disposed a portion of Erf 93 for this project. During 2014/15 financial year, ADM has manage to get the Record of Decision (RoD) from the Department of Environmental Affairs. Finances are the only stumbling block. Hamburg town uses septic tanks at the present moment. For the rest of the municipality, VIP toilets are the main form of sanitation. The sanitation backlog in Ngqushwa is very high. 93.4% of households are below the RDP standard and approximately R97 480 950 is required to eliminate the backlog and this in particular in the rural areas. A major challenge facing the municipality is the difficulty in extending bulk infrastructural services to the outlying areas due to the scattered nature of the settlements. Efforts have been made to provide water up to the IDP standard (public stand pipes) but it has not been possible to connect pipes to individual households. This problem equally affects electricity supply because the cost of providing new connections for new extensions will further stretch the resources of the Municipality. Another challenge facing housing delivery was the difficulties experienced in transporting building materials due to the poor state of rural road networks. Suppliers of materials are also not able to supply the required quantities at the given times. Local contractors are also not able to obtain contracts because they are not registered with the NHBRC. These challenges will be addressed and explored in terms of Local Economic Development opportunities. Prudhoe Housing Project. ADM secured funding for the construction of 300 houses in Prudhoe. On construction of those houses extensions within the village lack of capacity at ADM cause some problems that led to the blocking of such project. The Department of Human Settlements is still awaiting Council Resolution from ADM surrendering their developer status. Destitute: The Department of Human Settlements developed a Directorate that deals mainly with destitute. Firstly the task was assigned to the Special Programmes unit within the municipality but has since been referred to the Housing section. To date 112 applications have been submitted to the Department of Human Settlements but not approved yet. Emergency Housing Assistant: 116 applications for emergency houses were submitted to the Department of Human Settlements. 80 applications were approved and the temporary structures erected in various areas of the municipality. DISASTER BACKLOGS WITHIN THE MUNICIPALITY There is quite a number of temporary shelters erected within the municipal area from the year 2010 to date through ADM as the function lies with them. We still have seven incidents where we did the assessments and reported to ADM. The challenge with these temporary structures is their condition. There is no clear direction as to how long is the life span of these structures and when they will be replaced by permanent structures. 26 applications for permanent structures in Ntloko village were approved for the municipality but not yet constructed. There are also 1070 applications from ADM to the Department of Human Settlements for the removal of temporary structures that still needs to be clarified. (Ngqushwa has 430) Requests have been extended to Ward Councillors to report on location of these temporary structures in their wards for assessment Information Sharing: On the 21 of May there was an information sharing day with the Department of Human Settlements and Ward Councillors. The Sections presenting touched on Housing Code, Development of Housing Needs Register for the Municipality, and Housing Consumer Education Development of Register for Indigenous Building Skills CHALLENGES: The main challenge we are facing is the Rural Housing development that needs strong political intervention. Because the land in the rural areas is either communal or state owned, therefore, before any development takes place consent from the National Minster of Rural Development and Land Reform has to be obtained. That poses a great challenge as there is no cooperation from the provincial and regional office.

41

HOUSING IMPLEMENTATION PLAN AND PROJECT SCHEDULES Ngqushwa Municipality has, since 2012- till to date, been submitting business to Department of Human Settlement for housing provision. Table 1Below is a list of submitted business plans for rural housing: Table 1

Year of Submission Business Plan Number of units February 2012 Tuku A Housing Project 500 February 2012 Madliki Housing 451 February 2012 Lovers Twist 300 February 2012 Cisirha 626 February 2012 Ndlovini 500 February 2012 Pikoli 499 February 2012 German Village 343 August 2013 Lewis Village 500 June 2016 Mankone 290 March 2016 Glenmore 1000 Total Total 5009

The estimated amount of housing to address the backlog and the cost of implementing the needs is indicated below, quantum as per the 2014 National Norms and Standards:

House Cost: R110 947 Services Cost: R43 626 Raw land cost : R6 000 Total: R160 573

Based on the above business plans, the estimated subsidy is as follows: Table.

Total number of proposed dwellings Quantum per dwelling Total budget 5009 R110 947,00 R555 733 523.00

The table above shows that the budget has increased over years

42

FE

ASIB

ILIT

Y PH

ASE

PL

ANNE

D AC

TIVI

TIES

& C

OST

ESTI

MATE

S Project Name

Target Size

Planned Instrument

Land Identification

Right to Develop

Beneficiary Identification

Pre-screening

Bulk Availability

Adequacy of Capacity

EIA Requirements (Basic/Full)

STATUS / COMMENT

11/12 TARGETS

ESTIMATED BUDGET

12/13 TARGETS

ESTIMATED BUDGET

13/14 TARGETS

ESTIMATED BUDGET

14/15 TARGETS

ESTIMATED BUDGET

15/16 TARGETS

ESTIMATED BUDGET

Pedd

ie Ph

ase 2

14

20

PHP

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Proje

ct Co

mplet

ed

Pedd

ie 50

0 50

0 PH

P Ye

s Ye

s Ye

s Ye

s Ye

s Ye

s Ye

s Co

nstru

ction

unde

rway

7 5

00 00

0 Gc

inisa

500

500

Rura

l Ye

s No

Ye

s Ye

s No

No

N

o

At a

tende

r stag

e Ha

mbu

rg 50

0 50

0 IR

DP

Yes

No

Yes

Yes

No

No

No

At

a ten

der s

tage

Mpek

weni

500

500

Rura

l Ye

s No

Ye

s Ye

s No

No

No

A Co

nsult

ant h

as be

en ap

point

ed an

d fea

sibilit

y stud

y is u

nder

way

Qaga

500

500

Rura

l Ye

s No

Ye

s Ye

s No

No

No

At a

tende

r stag

e

43

3.7 WASTE MANAGEMENT The refuse collection is done on all our areas except villages. Refuse is collected twice per week in households and every day on the CBD. The street cleaning is also done weekly in the CBD; and once a week in the suburbs areas. Number of drop of zones were erected on the CBD as part of the programme of keeping town clean. Awareness campaigns are conducted in communities. Generally the refuse collection is done very well in our areas, we just have some challenges, like our vehicles are broken. Since the municipality has low volume there is not much in capital projects. Capital Expenditure Since the municipality has low volume there are no much in capital projects. COMMENT ON WASTE MANGEMENT SERVICE PERFORMANCE OVERALL: Our volume as the Municipality is low, therefore we don’t have much to budget on capital project. The municipality has introduced recycling as part of managing landfill site. The main focus on our capital project is on appropriate equipment for refuse collection and management of landfill site machinery. The municipality has installed refused collection cages in strategic positions in Hamburg and Peddie Town . 3.8 PLANNING AND DEVELOPMENT INTRODUCTION TO PLANNING AND DEVELOPMENT Planning and Development deals with, among other things, Municipal positioning in terms of Economic Development. This Planned Economic Development does not only focus on SMMEs and Co-operatives development, but also in Municipal Economic Development at large where investors will be invited to come and invest, developmental nodes are identified and there is proper planning of the town so as to boost investor confidence. Opportunities i. Agriculture- Ngqushwa Municipality has several irrigation schemes, eg, Tyhefu, Mthombe, just to mention but a few. Pineapple

farms are found within the Ngqushwa Municipality jurisdiction. Availability of quality livestock where the Municipality educate and give farmers quality bulls so as to improve livestock

ii. Tourism Attraction- Ngqushwa Municipality has annual commemoration for Tourism attractions such as Mqwashini, Uhambo Loxolo.

iii. Developmental Nodes. Ngqushwa Local Municipality has several nodes that can be developed so as to achieve economic development.

iv. Personnel- the Municipality has hired knowledgeable staff in various sections such as Agriculture, Housing, Spatial Planning and Land Use. The main aim is to get the maximum gain from the potentials that the Municipality has.

Challenges i. Lack of funds ii. Rural nature of the area iii. Size of the Municipality iv. Lack of knowledge from Community v. Even though the directorate has sections and staff but it yet to be a stand-alone directorate due to lack of funds for appointing

both Port-folio head and Head of Department. It is still amalgamated wit vi. h community services.

44

3.8.1 PLANNING Ngqushwa Local Municipality had over the years not having the planning section. Only the building inspector that was employed. The town planning section is bringing a new dimension to the Municipality. Town planning Section brings the following to the Municipality: 1. Compliance with National Building Standard Act and Regulations for every housing development taking place within the

municipality so as to ensure sustainability. 2. To have a synchronised development so as to avoid urban sprawl 3. To develop zoning scheme maps and regulations so as to avoid haphazard planning. 4. Ensure compliance to Spatial Planning and Land Use Management Act (16 of 2013) The above will boost investor confidence, which in the long run lead to sustainable economic development. This will be achieved through identification of areas with potential for economic development within the Municipality. These areas will be of great benefit to both local community and investors. 3.8.2 LAND AND HOUSING SETTLEMENT PATTERNS Ngqushwa is predominantly rural with only 5% of the population living in the urban areas, as opposed to 95% of the population who reside in the rural areas. The settlement patterns of Ngqushwa can be divided into the following categories

Urban Areas Peddie and Hamburg are the only two proclaimed towns within the municipality. There are peri-urban settlements establishes outside of both of these nodes which in the case of Peddie almost encircle it. Peddie can be regarded as a regional hub for service rendering to the entire municipal area. The majority of the region’s services and facilities are located here and economic and social functions are performed from here. It also plays an important administrative role as the seat of the municipality is also in Peddie. Not all areas of the town are serviced, particularly the lower income areas which are found in the main part of the town. Hamburg is primarily a holiday destination. Development in this area has become stagnant over the past 3 decades and facilities are in a poor condition. The area is also not actively promoted as a holiday destination. Rural Areas The majority of the population that is 95% resides in the rural area which means that access to essential services and facilities by the majority of the population is also limited. This also compromises the municipality’s ability to raise revenue on the basis of services. These limitations have been recognized by the municipality and are in the process of being addressed. There are 118 rural villages which are scattered throughout the municipal area. These villages are surrounded by commonage land that is used for a mix of agricultural purposes including crops and livestock which are farmed primarily on a subsistence basis.

Rural villages can be classified as follows: Traditional rural villages such as Bell, Bodium, Crossroad, Lover’s Twist, etc. which owe their establishment to their proximity to an agricultural resource base. Rural villages established in response to commercial agricultural needs in terms of labour on commercial farms. These villages are primarily in ward 6, 7 and 11 and include Benton, Tharfield, Jamesdale, Stourpoort and Lewis. Holiday resorts such as Birha, Mgwalana, and Mpekweni resorts which are newly developed in response to the localized resort potential of the coastal area. Minor and isolated farm communities scattered throughout the municipal area.

45

Conservation Areas There are a number of environmentally sensitive areas which are categorized as conservation areas and which are primarily situated along the coast.

3.8.3 LAND TENURE AVAILABILITY AND REDISTRIBUTION There is sufficient rural and urban land available in Ngqushwa municipal area to accommodate the short, medium and long term demand for land. Land release is however problematic and numerous tenure and distribution issues needs to be addressed. In the Ngqushwa municipal area, most urban land is owned by the Municipality. Rural land is however primarily state owned and interspersed with a number of informal land rights. A need was identified to convert the tenure of the large tracts of state owned land to communal ownership. Land release for housing projects has either been very slow, or has not been responded to in spite of the submission of applications to that effect. Ngqushwa is also characterized by a diversity of land uses and land tenure which is primarily attributable to the previous dispensation as evidenced by historical forms of land rights, such as African freehold, quitrent and permission to occupy (PTO) which are still prevalent in the area. The land tenure arrangements prevalent in Ngqushwa are summarized in the table below:

Land tenure arrangements within Ngqushwa There are a number of surveyed farms which were acquired from former white owners, some of which are in the process of being transferred to black commercial farmers and holders of IPILRA rights. There are also farms which have been transferred to former lessees who had Deeds of Sale under the Ciskei regime. Delays are however being experienced with the transfers of the above properties due to a number of reasons including unregistered subdivisions. Land redistribution of land is also a complex issue and is a major issue within this municipality. The Amathole District Land Reform and Settlement Plan identified the following crucial issues in respect of the current state land disposal process.

There is a lack of consultation between the local municipality and DLA/.DoA over decisions regarding the disposal of state farms. There is insufficient information about the extent and availability of land earmarked for disposal available to the local authority and communities. Legitimate land owners do not have their title deeds. The process whereby the legal occupant of land is identified needs to be done faster. Communities need to be given information on how to access land for farming and the relevant policy provisions. There is a need for greater support and communication from DLA

Bell/Bodiam Freehold/Quitrent Tyefu Irrigation Scheme communities of Glenmore, Ndwayana, Pikoli-Kalekeni and Ndlambe Glenmore established late 70’s early 80’s, Ndwayana

PTO’s in dense settlement Others old nineteenth century settlements PTO’s under TA New tenure arrangements introduced by Ulimocor/irrigation scheme, with foot plots, etc., but never with full community sanction.

All other rural settlements PTO’s Surveyed farms, formerly white owned, purchased by SANT to consolidate former Ciskei

Currently black owned or “leased” pending transfer to black farmers (conveyancing problems) or to be transferred to groups of occupiers with IPILRA rights-CPA.

Former Ulimocor Pineapple farms, same as above. Three separate blocks of land in the south east.

Tenure still under the state, Company (Pineco) running pineapple production, workers organized under Peddie Pineapple Development Trust-intention to investigate transfer of land to Trust over time.

46

The restructuring agreements and subsequent land rights and transfers between the former parastatal, Ulimocor and the Peddie Community Development Trust need to be finalized as there are economic benefits to this. There are unresolved land claims that still needs to be resolved. PLANNED AND SURVEYED SITES The following settlements within the Municipality have recently been planned and surveyed as pilot projects in order to facilitate service and infrastructural provision as advanced by the Rapid Land Development and People’s Housing Process. Table: Planned and surveyed sites

Additional areas have been identified and a business plan submitted to the Department of Housing, Local Government and Traditional affairs for their survey and planning. The surveying and planning of Mavathulana was in progress at the time of compilation of this report. (See table below) Table: Areas identified for survey and planning

Area Approximate number of sites Mavathulana 600 Dlova 300 Lewis 250 Mankone 500 Total 1650

Area Approximate number of sites 1. Hamburg 600 2. Mpekweni 1000 3. Gcinisa 500 4. Ntilini 350 5. Glenmore 600 6. Prudhoe 350 7. Feni 1000 8. Pikoli 820 9. Cisira 500 10. Runlets 450 11. Tuku A 527 12. Durban 500 13. Madliki 500 14. Crossroads 440 15. Upper Gwalana 598 16. Nonibe 623 17. Ntilini 121 18. Mgababa 780 Total 10 709

47

3.8.4 SPATIAL DEVELOPMENT This section deals with the spatial land use applications. These application ensure a synchronised planning and reduce unplanned. However there are challenges that include non-submission of application due lack of knowledge and culture. The Municipality has held some workshops so as to sensitise the community about the legislation in the form of National Acts, Policies and by-laws.

Application for Land Use Development Detail Formalisation of

Townships Rezoning Built Environment

2014/15 2015/16 2014/15 2015/16 2014/15 2015/16 Planning application received 0 0 0 3 4 12 Determination made in year of receipt 0 0 0 0 0 0 Determination made in following year 0 0 0 0 0 0 Application withdrawn 0 0 0 0 0 0 Applications outstanding at year end 0 0 0 0 0 0

3.8.5 LOCAL ECONOMIC AND TOURISM DEVELOPMENT INTRODUCTION TO ECONOMIC AND TOURISM DEVELOPMENT In line with Ngqushwa Local Municipality’s vision we seek to create an enabling environment. Agriculture, SMME’s and Tourism is a competitive advantage of Ngqushwa Local Municipality. The achievement of sustained economic growth and development and the creation of competitive advantage for the municipality relies absolutely on the prioritization of interventions which will have the greatest impact both socially and economically. Agriculture will most potential to contribute to job creation, promoting of livelihoods opportunities and contributing to sustained social and economic growth and development. THE LOCAL MUNICIPALITY IS ENVISAGING TO INCREASE AGRICULTURAL INCOME THROUGH: • Supporting local food systems that keep wealth in rural communities • Investing in capacity building to improve the quality and resilience of crops and livestock • Facilitating investments in local agro-processing to increase product demand and improve prices. • Growing local market for agricultural output TOURISM INCOME THROUGH: • Maintenance of heritages sites and hiking spots. • Establishment of strategic relations with neighbouring municipalities • Provision of support to the existing hospitality industry in Ngqushwa (Home Stays Accommodation Business) through trainings

grading • Promotion and support of craft product development and marketing

PROGRESS TOWARDS ACHIEVING THE LED KEY OBJECTIVES LOCAL ECONOMIC DEVELOPMENT INTIATIVES Community Works Programme Community Works Programme is an initiative designed to provide an employment safety net, by providing participants with predictable number of days of work per month – thus supplementing their live hood strategies and affording them a basics level of income security through work. The program me is targeted at unemployed people of working age, including those whose livelihood activities are

48

insufficient to lift them out of poverty. The programme is designed to employ a minimum of 1,000 people per site for two a week, or eight days per month. Peddie CWP site currently employs 1048 beneficiaries. COMMUNITY BENEFICIATION

Site has 1048 beneficiaries Programme implemented in all wards

Hamburg Aquaculture Project It is an initiative by the Department of Agriculture, Forestry and Fisheries where the department invested an amount of R9, 5m to the project through the EPWP programme. Ngqushwa Local Municipality made land available for the project. COMMUNITY BENEFICIATION

Employed 58 local people Youth (47%) and women (48%) Received training (occupational health and safety, life skills, HIV/AIDS and First Aid course) Registered as Siyazama Aquaculture co-operative member. Programme implemented at Ward 11

The project impact:

Skills development Transfer of technology to communities Food security Job creation

SUMMARY OF FUNDED PROJECTS UNDER LED DURING 2015/16 FINANCIAL YEAR

PROJECT NAME WARD AND VILLAGE ENTERPRISE QUANTITY

Amasirayeli 2 Poultry production 10 starter 10 Finisher

Thembizithonga 9 Poultry production 10 start 10 Finisher

Malilela Co-op 3 Poultry production 10 start 10 Finisher

Pole poultry co-op 5 Poultry production 10 starter 10 Finisher

Khanyisa poultry co-op 7 Poultry production 10 starter 10 Finisher

Makulime Bodium co-op 6 Poultry production 12 layers

Radie Multi purpose 13 Poultry production 10 starter 10 Finisher

Sdubini Agric Co-op 9 Poultry production 10 starter 10 Finisher

Sakhisizwe piggery project 12 Piggery production 15 Growth 15 Germ meal

Tyityaba piggery project 6 Piggery production 15 Growth

49

PROJECT NAME WARD AND VILLAGE ENTERPRISE QUANTITY 15 Germ meal

Ngqushwa Livestock Farmers All ward Livestock production 2 livestock loading ramps Ngqushwa mechanization program All wards Crop production Insecticides

SMME’S AND COOPERATIVES DEVELOPMENT A Cooperative Development Centre was established with the assistance of SEDA as phase one. The aim of the centre is:

To facilitate registration of coops with Companies and Intellectual Properties Commission CIPC. provide business development advice and services, A one stop shop to access all government services and programmes related to cooperative development, To create a meaningful and high impact market linkages for cooperatives, and A centre where an organized and sectored database is updated and readily made available. Through the centres, 68 coops were registered with CIPC within the 15/16 financial year and captured in municipal data base. Trainings: 40 SMME members were trained in financial management, Basics business skills and business management as part of SMME Development.

Programme Beneficiary Ward

Ploughing Programe50 kg Fertilizer

Masele 2 Abambo Maize Production(Qhugqwala) 3 Zusigcine Maize Production(Tarfield ) 11 Gwebindlala (Gwalana) 13 Bodium 6

Agro processing (Apiculture) Masibulele Bee keeping 6 Agro processing machinery Ntsinekane Bee keeping 4

Protective Clothing

Thembalethu Bee keeping 8 Dam- Dam Bee keeping 7 Ngqwenerana Bee keeping 4

Apiculture Equipment Wesley Bee keeping 11 Bee Boxes Tyityaba Bee keeping 6 Poverty Alleviation Projects Masande piggery project (Nobumba) 9 Piggery Feed Shearing Outreach Ministry Agric Co-op 3 Production inputs Upper Gwalana Piggery project 13 Irrigation schemes Dube Irrigation scheme 5

Diesel for mechanization Ngxakaxha 5 Gcinisa north 4

ZIMBABA POULTRY VALUE CHAIN The project is an initiative of Department of Rural Development and Land Reform (DRDLR) identified rural poverty nodes for strategic investment in economic and social infrastructure resulted in Zimbaba Village and Dlova identified for the project concept of an ‘Establishment of Integrated Community Based and Owned Poultry Value Chain for Rural Households’. The department funded with an amount to R9.2 million. The Poultry Value Chain project concept proposes the establishment of five business units divided as follows in terms of business component ownership: Component 1: Hatchery. Build a hatchery house and fit it with hatcheries. Get into contract with Breeder to supply 3600 eggs a week. Hatch and sell to Broiler Farmers.

50

Component 2. Help individual households build 6 houses that can accommodate at least200 broilers. To reduce costs teach them to build their own houses with the help of a quality controller. Give them feeders and founts to run full cycles of broilers. Either sell all to the abattoir operator or get them slaughtered for a fee to sell to specific market. Component 3. Establish a feed mill that produces up to 35 tons of feeds per months. Provide equipment and raw material to produce broiler and layer feeds. Get a truck to deliver and collect feed ingredients. Component 4. Help an individual household build two houses that can accommodate 200 layers each. Provide 200 layers at the point of lay six months apart. Provide egg cooling facilities and marketing facilitate sales of the eggs. Component 5. Establish small scale chicken abattoir that can slaughter at least 200 chickens per day. Equip it with slaughtering equipment, chiller, freezer and display fridge. The abattoir to serve as sales shop for bulks and individuals buyers. COMMUNITY BENEFICIATION

Project beneficiaries are 104 community members. Women 72% Ward 3 (Dlova)

The project impact:

Skills development Food security Job creation Women empowerment

Hamburg Town Centre Upgrade The Municipal has identified 3 Erven and donated them to Department of Public Works for construction of a multi-million clinic in Hamburg. Construction will start in the new financial year. Agricultural Development Programmes

Agriculture Indaba was coordinated, to identify area-specific requirements or opportunities for the municipality’s agricultural enterprises The municipality has partnered with DRDAR for the continuation of cropping programme at Qhugwala, Bodium, Benton,Tarfield and Gwebindlana. Efforts by the Ngqushwa Local Municipality in collaboration with Amatole District Municipality, DRDAR and ECRDA for livestock improvement scheme has been rolled out in 3 wards. Bulls and medication provided to the livestock farmers. Ngqushwa Local Municipality has purchased building material for Qugqwala Wool Growers Association to improve the quality of wool production and accelerate agriculture development through livestock production. The revitalisation of Irrigation Schemes has been continued with Dube and Gcinisa South irrigation scheme. Processing and value addition to agricultural commodities are practised, where the buying power and market demand for value added products exists.Ngqushwa municipality realised the potential that the beekeeping farming has and provided support of agro processing equipment, bee boxes and protective clothing to 7 cooperatives. The skills base of the farmers is a key driver of both economic progress and poverty reduction. The municipality commits to a concerted approach to improve the skill profiles of the emerging farmers. Key areas of action includes a) Successful marketing of livestock training and Honey processing training.

TOURISIM ACTIVITIES

Mqwashini Heritage Commemoration Crafts Product Development Maintenance of Heritage Sites

51

Uhambo Loxolo Hiking Trail Commemoration Fish Festival Durban Toursim Indaba Macufe Festival

3.9 COMMUNITY & SOCIAL SERVICES This component includes: libraries and archives; museums arts and galleries; community halls; parks,cemeteries and crematoria; child care; aged care; social programmes, theatres. INTRODUCTION TO COMMUNITY AND SOCIAL SERVICES Currently the municipality has Technical Services to assist 45 community halls, the municipality provide maintenance of the Community halls. 3.9.1 LIBRARIES; ARCHIEVES; MUSEUMS; GALLERIES; COMMUNITY FACILITIES; PARKS

&OTHER (THEATRES, ZOOS, ETC) INTRODUCTION TO LIBRARIES; ARCHIEVES; MUSEUMS; GALLERIES; COMMUNITY FACILITIES Currently the Municipality has 45 community halls, each ward has its own halls from ward 1 to ward 13, and 6 of them are still under construction. Ward 1 consist of 4 halls in Gobozana, Mtati, Tyeni, Ngqwele and Nxopo. Ward 2 has 3 halls in Dubu, Masele, Jubisa, Tsolo and one in Qaga is still under construction. Ward 3 has 2 halls in Dlova and Qugqwala, Zondeka and Tyatha are in tender process. Ward 4 has 4 halls in Qawukeni, Mgwangqa, Bhongweni, Khalana, Rode and Baltein are still under construction.Ward 5 has 3 halls in Machibi, Madliki and Phole. In ward 6 theres 3 halls in Tuku A, Crossroads, Leqeni and Bell is in Tender process. Ward 7 has 3 halls, in Cisira, Nyaniso, Cheletyuma and Feni Ward 8 has 5 halls in Qamnyana, Glenmore, Mankone, Rura, Ndwayana and Gwabeni. Ward 9 has 3 halls in Pikoli ,Woodland and Runlet is still underconstruction. Ward 10 has 4 halls in Ncumisa Kondlo, Durban, Peddie extension and Luxolweni. Wars 11 has 2 halls in Hamburg and Benton. Ward 12 has 4 halls in Mpekweni, Mgababa, Prudhoe and Mkhanyeni. Ward 13 has 2 halls in Upper Gwalana, Qeto and Lower Gwalana is under construction. COMMENT ON THE PERFORMANCE OF LIBRARIES; ARCHIVES; MUSEUMS; GALLERIES; COMMUNITY FACILITIES; OTHER (THEATRES, ZOOS, ETC) OVERALL: The Municipality has two Libraries one is situated inside municipal building and one mobile library at Hamburg. Both libraries have not officially been handed over to the Municipality by Department of Sport, arts, recreation and culture. INTRODUCTION TO CEMETORIES & CREMATORIUMS We have two sites which we maintain, Ngqushwa Local Municipality is in the process of identifying a new site. Crematorium is the responsibility of ADM and it is not common in our jurisdiction.The municipality has to identify cemetery sites for both Hamburg and Birha. COMMENT ON THE PERFORMANCE OF CEMETERIES & CREMATORIUMS OVERALL: Municipality has two (2) cemeteries and both are in Peddie Town.. There is a general complaint about the distance the community from Ethembeni location have to travel to the cemetery, hence there is a need to open a new cemetery that will be easily accessed. The budget for cemeteries was R200 000 for this financial year for introducing a new cemetery management system. The municipality is responsible for grass cutting and maintenance of cemeteries.

52

INTRODUCTION TO PEDDIE GARDEN Peddie Town seeks to benefit from the programmes due to socio-economic and environmental challenges that make the town to become unattractive and repulsive to public and private sector investments. The Peddie Central Park – commonly known as Ngqushwa Leisure Gardens is a unique asset to the town is well used by locals for social events and gatherings. The park offers further potential to become a great public place, which can be used to build confidence and showcase Peddie to broader users groups and tourists. Other recreation facilities such as sports fields and pocket parks are few within the primary study area. 3.10 ENVIRONMENTAL PROTECTION INTRODUCTION TO ENVIRONMENTAL PROTECTION This component includes: pollution control, biodiversity, landscape and costal protection. Environmental protection deals with the safeguarding of the environment through implementation and complying with legislation such as a constitution, NEMA, and other relevant legislation. Non- compliance with the Environmental legislation will fasten the depletion of Ozone Layer and fasten Climate change. In an attempt to promote compliance, Ngqushwa Local Municipality in conjunction with other government departments such as DEA, DEDEAT, Department of Roads Public Works and Amathole District Municipality came up with several projects that were aligned to Environmental Protection. These include; Working for the Waste, Coastal Management projects. Through tireless efforts of the Municipality and close relations with other stakeholders, the Hamburg beach, which is within the Municipality’s jurisdiction, achieved a Blue Flag Status and Birha beach is still on pilot status during this financial year. During May 2015, the municipality was part of the stakeholders that convened the Environmental week at Great Fish River Nature Reserve, where capacitation of schools and local community was done . POLLUTION CONTROL INTRODUCTION TO POLLUTION CONTROL Nowadays, the world is reeling in climate change, which is a result of pollution, be it water pollution, land or air pollution. Due to the size of Ngqushwa Local Municipality, the responsibility for pollution control lies with the district Municipality (Amathole District Municipality). Be that as it may, the Ngqushwa Local Municipality conducted awareness programs for pollution control in schools, communities as well as clean up campaigns were conducted on schools. Department of Environmental Affairs (DEA) came on board with the programme of litter picking where a total of 120 persons were employed for 18months. This project deals specifically with land pollution as workers are doing litter picking. There are bins that were offered to the Municipality by DEA in support if recycling projects. Department of Environmental Affairs provided a sorting Shed at the Landfill site in an attempt to strengthen recycling projects. Due to financial constraints, the Municipality was unable to hold workshops and awareness campaigns, and had to rely on other stakeholders such as Amathole District Municipality. Even though the Municipality has two (2) licensed landfill sites, it is difficult to comply with the regulations as in most cases the waste is burned, thereby polluting the environment. In future, there is a need of closing and relocating the landfill site away from the residential areas. The other main challenge is the vandalism on our ‘no litter’ signs, most of them are uprooted

53

BIO-DIVERSITY; LANDSCAPE (INCL. OPEN SPACES); AND OTHER (EG. COASTAL PROTECTION) INTRODUCTION BIO-DIVERSITY AND LANDSCAPE Eradification of alien plants in Peddie Town was done as part of biodiversity management. The municipality conducted a workshop on Indigenous plants and eradification of alien plants. Environmental awareness was conducted on coastal communities concerning management of coastal indigenous forest. We are boarded by Great fish river Nature reserve and on a continuous basis we meet them to check on areas of common on biodiversity and general. There are DEA projects that are focussing on coastal management. These projects assisted the Municipality towards the achieving Blue Flag status. 3.11 SAFETY AND SECURITY NGQUSHWA MUNICIPAL TRAFFIC SERVICES The Traffic Services was established in 2005 by a political mandate to address the safety needs of the community of Ngqushwa. The section delivers traffic policing services through a partnership-approach with the communities it serves. It aims to create a safe and secure environment for all residents, citizens and visitors within Ngqushwa Municipal Area through effective traffic policing, by-law enforcement and other integrated crime prevention initiatives. Key Performance Areas Traffic Law Enforcement 1. Visible policing 2. Road Blocks 3. Speed Law 4. Drunken Driving Campaigns 5. Road Safety Campaigns Register Authority 1. Vehicle Registration and Licensing of Motor Vehicles. 2. Renewal of Motor Vehicle Licences. 3. Duplicate Registration Papers. 4. Scrapping of Vehicles Driver’s Licence Technical Centre 1. Renewal of Driver’s Licences 2. Learners licence Tests 3. Drivers Licence Tests 4. Duplicate Driver’s Licences 5. Public Driver’s Licence Permits Road Safety 1. Learner / Driver Education program by simulator and vehicle for youth between 18 – 35 years 2. Road Safety Education at all schools and villages.

54

OVERALL PERFORMANCE OF NGQUSHWA MUNICIPAL TRAFFIC SERVICES: There was a considerable decrease in the number of moving violations and accidents since the establishment of the traffic services. Since 2012/ 2013 financial year a concerted effort was launched to address Road Safety with various Road Safety initiatives that include: Scholar educational projects (Coega Simulators- for both learners licence and Drivers Licences training) by the visiting of schools in the municipal area. Furthermore our continued commitment towards the National Arrive Alive, Parking, Speeding and Un- Roadworthy Vehicles are common phenomenon throughout Ngqushwa Municipal Area which invariably infringes upon the rights of law abiding citizens and visitors and in some cases endangers lives. The Traffic Section is committed to intensify law enforcement against motorists who blatantly disregard the rules of the road. It is an accepted phenomenon that as municipality grows; its public transportation system has to keep pace with such development to ensure that sufficient capacity is provided to meet the growing demand for transportation. To this extent, the traffic section is working earnestly on regulating the minibus and private transport industry to ensure smooth transport of residents of Ngqushwa Municipality. With the establishment of a driver’s licence testing centre and other functions the residents of Ngqushwa Municipality do not have to drive to other towns for services. However there are challenges such outstanding payments of infringement notices (traffic fines), condition of road services in Peddie town and lack of relevant personnel. STATISTICS FOR NGQUSHWA MUNICIPAL TRAFFIC SERVICES 2015 / 2016

Money Collected for DOT / DLTC R 2 257 917.52 STAFF AT NGQUSHWA MUNICIPAL TRAFFIC SECTION

TRAFFIC/ SECURITY MANAGER

MANAGEMENT REP

TRAFFIC OFFICERS

TRAFFIC/ EXAMINERS

SECURITY OFFICERS

ADMIN STAFF

EXAMINER: LEARNER’S

INTERN

1 1 6 3 13 3 1 1

55

3.12 INFORMATION AND COMMUNICATION TECHNOLOGY (ICT) SERVICES ICT section provides appropriate Information and Communication Technologies that enables our users to access the information and services necessary to do their jobs. During 2015/2016 financial year, there were three projects planned: Network wireless link upgrade and labelling of network points; Installation of network monitoring tool and inventory system and desktop support. All three projects were implemented.

Capital Expenditure 2015/2016: ICT Services R' 000

Capital Projects 2015/2016 Budget Adjustment

Budget Actual

Expenditure Variance from original budget

Total Project Value

Computer Costs R 224 400 R 222 700 R 220 000 R 2 700 R 220 000 IT infrastructure and security R 550 000 R 544 960 R 357 542.62 R 187 41738 R 357 542.62 Software R 490 000 R 492 560 R 204 268.25 R 288 294.75 R 204 268.25

Capital Expenditure 2015/2016: ICT Services

R' 000

Capital Projects

2015/2016

Budget Adjustment Budget

Actual Expenditure

Variance from

original budget

Total Project Value

Computer Costs R104 800 N/A N/A N/A R104 800 IT infrastructure and security R298 000 N/A N/A N/A R298 000 Software R300 000 N/A N/A N/A R300 000

Employees: ICT Services

Job Grades

2014/2015 2015/2016

Employees Posts Employees Vacancies (fulltime

equivalents)


No. No. No. No. % 0 - 3 N/A N/A N/A N/A N/A 4 – 7 N/A N/A N/A N/A N/A 8 – 13 1 2 1 1 50 % 14 - 18 1 1 1 0 100% Sect 56 5 5 5 5 0%

Total 2 3 2 0 75 %

56

CHAPTER FOUR: INSTITUTIONAL DEVELOPMENT AND ORGANISATIONAL PERFORMANCE

4.1 MUNICIPAL WORKFORCE MANAGEMENT

Ngqushwa Municipality has a responsibility to manage its workforce by implementing interventions and programmes that will keep employees motivated and enhance performance. This section emphasis on management and administration of employee matters/issues like management of leave, overtime, and training development. The municipality continues to develop workforce management policies in order to maintain productive employees. WORKFORCE POLICY DEVELOPMENT: The Municipality has developed 13 policies during the year under review. These policies are developed and reviewed annually and when required. The following seven policies have been sent to SALGA for comments and input: Attraction & Retention policy, Recruitment policy and Remuneration policy

HR Policies and Plans

Name of Policy Completed %

Reviewed %

Date adopted by council or comment on failure to adopt

1 Acting and acting allowance policy 100% 30 July 2015 2 Employee study assistance policy 100% 30 July 2015 3 Disciplinary Code and Procedures 100% SALGBC Collective Agreement 4 Essential Services 100% SALGBC Collective Agreement 5 Retention policy 100% 30 July 2015 6 Bereavement policy 100% 30 July 2015 7 Recruitment, selection and appointment policy 100% 30 July 2015

57

HR Policies and Plans

Name of Policy Completed %

Reviewed %

Date adopted by council or comment on failure to adopt

8 Relocation policy 100% 30 July 2015 9 Termination policy 100% 30 July 2015 10 Grievance Procedures 100% SALGBC Collective Agreement 11 Organisational Rights 100% SALGBC Collective Agreement 12 Payroll Deductions 100% SALGBC Collective Agreement

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

Salary band Total sick

leave

Proportion of sick leave

without medical

certification

Employees using sick

leave

Total employees in

post*

*Average sick leave per

Employees

Estimated cost

Days % No. No. Days R' 000 Task Grade 0 - 2 N/A 0% Task Grade 2 - 3 680 0 % 55 77 71 % Task Grade 4 - 7 676 0 % 29 38 76 % Task Grade 8 – 13 510 0 % 43 45 95 %

Task Grade 14 - 18 128 0 % 17 17 100 %

MM and S56 3 0 % 1 4 25 % Total 1997 0 % 145 181 80 %

T4.3.2 NUMBER OF EMPLOYES ON INJURY ON DUTY

Number and Cost of Injuries on Duty

Type of injury

Injury Leave Taken

Employees using injury

leave

Average injury leave taken per employee

Average Injury Leave per employee

Total Estimated Cost

Days No. % Days R'000 Required basic medical attention only 5 2 0.03% 2 R4 466.65

Temporary total disablement 76 2 0.4% 38 R100 129.00

Permanent disablement 0 0 0 0 0 Fatal Total 81 4 0.43% 40 R104 595.65 T4.3.1

NUMBER OF EMPLOYEES SUSPENDED

Number and Period of Suspensions

Position Nature of Alleged Misconduct Date of Suspen

sion

Details of Disciplinary Action taken or Status of Case and Reasons why not Finalised

Date Finalised

SUPPLY CHAIN MANAGER General Misconduct 18/07/2015

Suspension on hold due to - Temporal Incapacity- -

EXPENDITURE MANAGER General Misconduct 18/07/2015 Deceased December

2015

58

Number and Period of Suspensions

Position Nature of Alleged Misconduct Date of Suspen

sion

Details of Disciplinary Action taken or Status of Case and Reasons why not Finalised

Date Finalised

MANAGER- SPEAKER & MAYOR’s OFFICE

General Misconduct and Financial Misconduct

08/01/2016 Hearing in progress -

BUDGET MANAGER General Misconduct 13/06/2016 Hearing in progress -

VACANCIES AND TURNOVER On termination of employees, affected department reviews the need for the post. Where there is a need, the affected department informs Corporate Services to facilitate. Corporate Services engages on recruitment processes. Senior Management positions are advertised on both national and regional newspapers. There is no succession planning in place. One of the reasons why employees resign is because there are no prospects to move beyond middle management level. The municipality is in the process of developing attraction and retention policy which will assist in attracting and retaining employees. EMPLOYEE TOTALS, TURNOVER AND VACANCIES

Employees

Description 2014/2015 2015/2016

Employees Approved Posts Employees Variance Variance

No. No. No. No. % Water 0 0 0 0 Waste Water (Sanitation) 0 0 0 0 Electricity 2 4 4 0 0% Waste Management 2 4 4 0 0% Housing 2 4 4 0 0% Roads and Waste Water (Stormwater Drainage) 15 20 18 2 10% Transport 0 0 0 0 Planning 0 0 0 0 0% Local Economic Development 1 1 0 0 100% Planning (Strategic &Regulatory) 3 12 6 6 50% Community & Social Services 62 63 56 7 11% Environmental Protection 0 0 0 0 Health 0 0 0 0 Traffic, Security and Safety 24 45 27 18 40% Sport and Recreation 0 0 0 0 0% Corporate Services 30 35 28 7 20% Budget and Treasury Office 15 29 18 11 37% Municipal Manager’s Office 10 18 14 4 22% Technical Services 25 14 8 6 22% Totals 193 249 187 61 24.5% Headings follow the order of services as set out in chapter 3. Service totals should equate to those included in the Chapter 3 employee schedules. Employee and Approved Posts numbers are as at 30 June.

T4.1.1

59

Vacancy Rate 2015/2016

Designations *Total

Approved Posts

*Variances (Total time that vacancies exist using fulltime equivalents)

*Variances (as a

proportion of total posts in

each category) No. No. %

Municipal Manager 1 0 100% CFO 1 0 100% Other S56 Managers (excluding Finance Posts) 4 2 50% Other S56 Managers (Finance posts) 0 0 Traffic Officers 5 0 100% Middle Management: Levels 13-16 (excluding Finance Posts) 18 3 38% Middle management: Levels 13-16 (Finance posts) 5 0 100% Other employees (excluding the above) 224 61 27% Total 256 66 26% Note: *For posts which are established and funded in the approved budget or adjustments budget (where changes in employee provision have been made). Full-time equivalents are calculated by taking the total number of working days lost (excluding weekends and public holidays) while a post remains vacant and adding together all such days lost by all posts within the same set (e.g. ‘senior management’) then dividing that total by 250 to give the number of posts equivalent to the accumulated days.

T4.1.2

Turn-over Rate

Details

Total Appointments as of

beginning of Financial Year

Terminations during the Financial Year Turn-over Rate*

No. No. 2012/13 167 14 8% 2013/14 182 9 8% 2014/15 175 9 5% 2015/16 34 11 3% * Divide the number of employees who have left the organization within a year, by total number of employees who occupied posts at the beginning of the year T4.1.3

SKILLS DEVELOPMENT AND RELATED EXPENDITURE AND THE FINANCIAL COMPETENCY REGULATIONS There are challenges in conducting skills audit in order to determine the gaps and planning through Workplace Skills Plan. This is due to lack of participation from other departments; this is now improving as the training committee has reviewed its terms of reference. The expenditure on training exceeds the budget because of the increase in number of training needs. In line with MFMA regulations it is required that all finance employees and HOD's must possess minimum competency. Attempts have been made by the municipality as a result there employees were enrolled for CPMD. There were three employees that did not qualify to be enrolled by the institution offering the course because of the minimum entry requirements; however these employees were enrolled in other training programs. 4.2 MANAGING WORKFORCE EXPENDITURE The Municipality spends on what has been approved in both organogram and budget to avoid overspending of Workforce expenditure. The expenditure is monitored monthly and reported to Council on quarterly basis. The spending on salaries were increased in this financial year because the municipality implemented job evaluation and grading results 60% of employees were ‘underpaid’. This means therefore those payments of salaries were higher than previous years.

60

Number Of Employees Whose Salaries Were Increased Due To Their Positions Being Graded Beneficiaries Gender Total

Unskilled and defined decision making (Task grade 0- 3) Female N/A

Male N/A

Semi-skilled and discretionary decision making (Task Grade 7 – 9) Female N/A Male N/A

Skilled technical and academically qualified workers, junior management, supervisors, foremen, and superintendents (Task Grade 8 – 13)

Female N/A

Male N/A

Professionally qualified and experienced specialists and mid-management (Task Grade 14 – 18)

Female N/A Male N/A

MM and S 56 Female N/A

Male N/A Total 0 Those with disability are shown in brackets '(x)' in the 'Number of beneficiaries' column as well as in the numbers at the right hand side of the column.

T4.6.2

Occupation level Number of

employees Job evaluation

level Comment

Unskilled and defined decision making 77 (Task grade 0-3) General Assistants, Office Cleaners Semi-skilled and discretionary decision making 38 (Task Grade 4 –

7) Supervisors, Clerks, Operators, Secretaries, Drivers

Skilled technical and academically qualified workers, junior management, supervisors, foremen, and superintendents

45 (Task Grade 8 – 13)

Officers, Technicians and Middle Managers

Professionally qualified and experienced specialists and mid-management

17 (Task Grade 14 – 18)

Middle Managers

MM and S 56 4 Section 56 & 57 Grading system not applicable

T4.6.3

Employees not appointed to posts not approved

Department Level Date of appointment No. appointed Reason for appointment when no established post exist

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

T4.6.4

61

T4.6.

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4 999

.00

R14 9

99.00

R6

910.0

0 R6

910.0

0 R2

1909

.00

R219

09.00

Ma

le 3

R30 5

00.00

R3

0 500

.00

R0.00

R0

.00

R0.00

R0

.00

R305

00.00

R3

0500

.00

Legis

lator

s, se

nior

offici

als

and

mana

gers

Fema

le 20

R1

5250

0.00

R152

500.0

0 R0

.00

R0.00

R2

7225

.00

R272

25.00

R1

7972

5.00

R179

725.0

0

Male

27

R122

000.0

0 R1

2200

0.00

R0.00

R0

.00

R272

25.00

R2

7225

.00

R147

225.0

0 R1

4722

5.00

Profe

ssion

als

Fema

le 18

R0

.00

R0.00

R3

6746

.56

R367

46.56

R0

.00

R0.00

R3

6746

.56

R367

46.56

Ma

le 9

R0.00

R0

.00

R216

63.30

R2

1663

.30

R0.00

R0

.00

R216

63.30

R2

1663

.30

Tech

nician

an

d as

socia

te pr

ofess

ionals

Fema

le 2

R0.00

R0

.00

R3 49

5.00

R349

5.00

R0.00

R0

.00

R349

5.00

R349

5.00

Male

3 R0

.00

R0.00

R1

3047

.30

R130

47.30

R0

.00

R0.00

R1

3047

.30

R130

47.30

Cler

ks

Fema

le 16

R2

5707

.00

R257

07.00

R4

0974

.01

R409

74.01

R0

.00

R0.00

R6

6681

.01

R666

81.01

Ma

le 2

R0.00

R0

.00

R0.00

R0

.00

R0.00

R0

.00

R0.00

R0

.00

Elem

entar

y oc

cupa

tions

Fe

male

37

R0.00

R0

.00

R531

79.06

R5

3179

.06

R0.00

R0

.00

R531

79.06

R5

3179

.06

Male

32

R0.00

R0

.00

R141

66.00

R1

4166

.00

R0.00

R0

.00

R141

66.00

R1

4166

.00

Total

170

R330

707.0

0 R3

3070

7.00

R198

269.9

3 R1

9826

9.93

R613

60.00

R6

1360

.00

R588

337.2

3 R5

8833

7.23

63

4.3 ORGANIZATIONAL PERFROMANCE REPORT Summary of Organizational performance results Overall Organizational Performance Ngqushwa Municipality Annual Performance for 2015/16 financial year is 68%, which has improved from by 15% as compared to 53% of 2014/15 financial year .All gaps identified will be addressed in 2016/17 Financial Year. 2015/2016 OVERALL PERFORMANCE

KEY PERFORMANCE AREA Q1 Q2 Q3 Q4 TOTAL AP

Institutional and Organisational Performance 61 52 68 58 60 Basic Service Delivery and Infrastructure 71 68 82 76 74 Financial Viability and Management 78 76 94 86 83 Local Economic Development 69 52 60 75 64 Good Governance and Public Participation 61 51 68 58 60 Total Overall Performance 68 60 74 71 68

0

10

20

30

40

50

60

70

80

90

100

InstitutionalDevelopment and

OrganisationalPerformance

Basic Service Deliveryand Infrastructure

Financial Viability andManagement

Local EconomicDevelopmet

Good Governanceand Public

Participation

2015-2016 NLM ANNUAL PERFORMANCE REPORT

Q1 Q2 Q3 Q4

64

CHAPTER FIVE: FINANCIAL PERFORMANCE CHAPTER 5 Component A: Statements of Financial Performance The Statement of financial performance provides an overview of the financial performance of the municipality and focuses on the financial health of the municipality. 5.1 STATEMENTS OF FINANCIAL PERFROMANCE

5.1.1 FINANCIAL PERFORMANCE

The table below indicates the summary of the financial performance for the 2015/16 financial year.

Financial Summary R’000

Description 2014/15 Current Year 2015/2016 2015/2016

Variance to Actual

Actual Original Budget

Adjusted Budget Actual Original

Budget Adjusted Budget

Financial Performance Property Rates 10 721 838 16 840 000 16 840 000 17 137 076 101.76% 101.76% Service Charges 535 518 496 001 645 001 571 929 115.31% 88.67% Investment Revenue 820 414 1 000 000 2 000 000 1 255 184 125.52% 62.76% Transfer recognized – operational 78 900 006 86 892 563 86 659 169 86 659 000 99.73% 100% Other own revenue 5 672 334 33 788 209 22 098 870.44 8 577 480 25.38% 38.81% Total Revenue (excluding capital transfer and contribution) 96 650 110 139 016 882 128 243 040.44 114 200 597 82.15% 89.05%

Employee Costs 43 430 249 50 308 701.07 48 991 053 47 796 803 95.00% 97.56% Remuneration & Councillors 7 223 883 7 309 859.70 7 638 669 7 758 337 106.14% 101.57% Depreciation & asset impairment 20 187 718 29 914 342.16 9 432 297 13 334 238 44.57% 141.37% Finance Charges 1 682 326 - 10 800 000 3 675 138 - 34.03%- Debt Impairment 1 887 912 - 9 000 000 1 963 245 - 21.81%- Repairs and Maintenance 1 325 290 - 9 025 181 3 811 007- - 42.23%- Other expenditures 30 351 742 68 793 580.32 33 356 052 41 846 126 60.83% 125.45% Total Expenditure 106 089 120 156 326 483.25 128 243 252 120 502 939 77.08% 93.96% Surplus/(Deficit) -9 439 010 -17 309 600.76 -212 -6 302 342 -36.41% - -Transfers recognized – Capital 27 454 055 23 310 000 30 649 590 23 484 000 100.76% 76.63% Loss on sale of assets - - - -224 833 - - Surplus/(Deficit) after capital transfers & contributions 18 015 045

Share of surplus / (deficit) of associate 191 000 - - - - - Surplus / (Deficit) for the year 18 206 044 6 000 000 30 649 378 16 956 825 282.61% 55.33% Capital expenditure & Funds Sources Capital Expenditure Capital Transfers recognized 26 316 305 23 309 801 22 309 801 22 309 801 95.71% 100% Public contributions & donations - - - - - - Borrowing - - - - - - Internally generated funds 350 861 8 651 160.20 8 339 787.20 9 841 898 113.76% 118.01% Total Sourced of Capital Funds 26 667 166 31 960 961.20 30 649 588.20 32 151 699 100.60% 104.90% Financial Position

65

Financial Summary R’000

Description 2014/15 Current Year 2015/2016 2015/2016

Variance to Actual




Total Current Assets 21 218 581 19 621 022.75 33 454.448.07 34 392 767 175.29% 102.80% Total non-current assets 185 587 628 280 690 147 228 213 382 201 933 007 71.94% 88.48% Total current liabilities -27 077 061 -7 589 789.93 -40 765 146.93 -32 812 768 432.33% 80.49% Total non-current liabilities -5 666 168 - - -9 868 492 - - Community wealth / Equity 174 062 980 211 006 986.80 175 881 292 193 644 514 79.03% 94.81% Cash Flow Net Cash from (used) operation 19 587 508 43 045 740.64 30 968 405.27 28 769 614 66.83% 92.90% Net cash from (used) investing -26 691 478 -31 660 961 -30 376 588 -26 922 619 -85.03% -88.63% Net cash from (used) financing -1 350 747 - - -809 8019 - - Cash/Cash equivalents at the year end 163 631 6 884 779.64 755 4887.07 1 200 807 17.44% 158.95% Cash backing /surplus reconciliation Cash and investments available - -4 500 000 755 448.07 - Application of cash and investments - 980 000 25 840 492 - Balance – Surplus (Shortfall) - -5 480 000 -25 085 043.93 - Asset Management Asset register summary (WDV) 205 416 458 239 679 337 238 453 504 215 585 287 89.95% 90.41% Depreciation & Asset impairment 19 975 737 15 914 342.16 9 432 297.16 13 652 283 85.79% 144.74% Renewal of Existing Assets - - - - - - Repairs and Maintenance 1 325 290 9 004 831.73 9 025 181.73 3 811 007 42.32% 42.23% Free Services Cost of Free Basic Services provided 1 654 551.13 1 527 000 2 661 172 1 887 522 70.93% 70.93% Revenue Cost of Free Services provided 1 654 551.13 1 572 000 2 661 172 1 887 522 70.93% 70.93% Households below Minimum Service Level Water: - - - - - - Sanitation / Sewerage: - - - - - - Energy: 3 788 3 787 3 787 3 787 100% 100% Refuse: 1 993 1 993 1 933 1 993 100% 100%

66

5.2 GRANTS 5.2.1 GRANT PERFORMANCE The Municipality had a total amount of R97 833 200 for Operational Expenditure available that was received in the form of grants from the National and Provincial Governments during the 2015/16 financial year. The performance in the spending of these grants is summarized as follows: The table below indicates the Grant performance for the 2015/16 financial year:

Grant Performance R’000

Description 2014/15 Current Year 2015/2016 2015/2016 Variance to Actual




Operating transfers and grants National Government Equitable Share 71 805 000 82 854 000 82 854 000 82 854 000 100% 100% FMG 1 800 000 1 875 000 1 875 000 1 875 000 100% 100% MIG (PMU – Operating Expenses_ 1 137 750 11 174 200 11 174 200 11 174 200 100% 100% MSIG 934 000 930 000 930 000 930 000 100% 100% EPWP 1 000 000 1 000 000 1 000 000 1 000 000 100% 100% 76 676 750 97 833 200 97 833 200 97 833 200 100% 100% Provincial Government Health subsidy - - - - - - Ambulance subsidy - - - - - - Sports and Recreation - - - - - - Roads maintenance - - - - District Municipality Total operation transfers and grants revenue 76 676 750 97 833 200 97 833 200 97 833 200 100% 100%

5.2.2 PERFORMANCE OF SERVICE PROVIDERS Annual Cumulative Report on the Performance of the Service Providers in the 2015/16 Financial Year The legislated report on the performance of service providers (awarded bids) in terms of section 46(1) (a) of the Municipal systems Act (No.32 of 2000) is encapsulated in the table below. Detailed project monitoring reports in relation to each project are available for inspection.

NGQUSHWA LOCAL MUNICIPALITY REGISTER OF TENDERS AWARDED DURING 2015/16

Project name

Service provider

Project manager

Dept. / contact person

Amount R

Award/ Appointme

nt date

Targeted Completion date

Status (In-progress/Completed

/Not completed

Comments/Reasons & Corrective

Measures information and communication technology (I.C.T)

First Technology (Pty) Ltd.

Ms B Nodada

Office of the Municipal Manager

R 198,360

30/06/2015

15 Months

Ongoing

N/A

67


Project name

Service provider

Project manager


Amount R

Award/ Appointme

nt date



/Not completed


Measures support and maintenance Insurance for Assets and Liabilities cover for NLM for the period of 3 years

Lateral Unison Insurance Brokers

Mr V Makedama

Budget & Treasury Office

R 238,240

30/6/2015

36 Months

Ongoing

N/A

VAT Services

Maximum Profit Recovery

Ms B Matu


R1,220,957.46

5/7/2015

24 Months

Ongoing

N/A

Supply and delivery of Cleaning material

Kabawo Initiatives CC

Ms E Maytham

Corporate Services

R 55,000

3/8/2015

Once off

Complete

N/A

Supply and delivery of Stationery

Tiaglo (Pty) Ltd

Ms E Maytham

Corporate Services

R 121,000

3/8/2015

Once off

Complete

N/A

Financial &Performance Strategy plan and Implementation to improve audit outcometo achieve clean administration

Camelsa Consulting Group

Mr V Makedama


R2,200,000

11/8/2015

24 Months

Ongoing

N/A

Supply & Delivery of Material to repair Peddie Extention Stadium and Hamburg Beach front

Gamalinye Trading

Mr R Mkontwana

Community Services

R 68,400

18/8/2015

Once off

Complete

N/A

68


Project name

Service provider

Project manager


Amount R

Award/ Appointme

nt date



/Not completed


Measures Supply & Delivery of portable equipment for Electrical Section

Tiaglo (Pty) Ltd

Mr B Mangesi

Technical Services

R 42,591.28

18/8/2015

Once off

Complete

N/A

Repairs & Maintenance of 3 Highmast Lights

Ndlambe Investment

Mr B Mangesi

Technical Services

R 198,075

18/8/2015

2 Months

Complete

N/A

Repairs and maintenance of 1 Glen more high mast light

Ndlambe Investment

Mr B Mangesi

Technical Services

R 145,787

18/8/2015

2 Months

Ongoing

N/A

Supply and repairs of material for repairs of high mast lights

Zitime Trading

Mr B Mangesi

Technical Services

R 172,950

18/8/2015

Once off

Complete

N/A

Construction of Nier community hall

Tyume Blocks

Mr T Malingatshoni

Technical Services

R 1,320,426.42

4/9/2015

5 Months

Complete

N/A

Construction of Ndlambe community hall

Mgunculu Trading

Mr T Malingatshoni

Technical Services

R 1,278,195.93

4/9/2015

4 Months

Complete

N/A

Supply and Delivery of 19 Laptops

Lymmyl Technologies

Ms B Nodada


R192,970

7/9/2015

Once off

Complete

N/A

Professional services (design & supervision) for regravelling of Mgwalana Internal roads

THM Engineers

Ms N Mbekela

Technical Services

R 225,460.08

22/9/2015

10 Months

Complete

N/A

69


Project name

Service provider

Project manager


Amount R

Award/ Appointme

nt date



/Not completed


Measures Supply and Delivery of Furniture for Community Halls

Budget Office Furniture

Mr T Malingatshoni

Technical Services

R 173,735.43

16/10/2015

Once off

Complete

N/A

Professional services (design & supervision) for regravelling of Ngxakaxha access roads

Saigent Consulting Engineers

Ms N Mbekela

Technical Services

R 374,460

11/9/2015

10 Months

Complete

N/A

Professional services (design & supervision) for regravelling of Dube access roads

Gilgal Development Consulting Engineering & Project Managers

Ms N Mbekela

Technical Services

R 219,968.70

11/9/2015

10 Months

Complete

N/A

Professional services (design & supervision) for regravelling of Tuku access roads

Beacon Consulting Engineers

Ms N Mbekela Technical Services

Technical Services

R 320,372.58

11/9/2015

13 Months

Ongoing

N/A

Professional services (design & supervision) for regravelling of Glenmore Sports field

Mbesi Consulting

Ms N Mbekela

Technical Services

R 211,293.30

11/9/2015

12 Months

Ongoing

N/A

Supply and Delivery of

Compucare

Ms B Nodada

Office of the

R 23,410.21

8/11/2015

2 Months

Complete

N/A

70


Project name

Service provider

Project manager


Amount R

Award/ Appointme

nt date



/Not completed


Measures Toners and Catridges

Municipal Manager

Proposal for the review of Annual Financial Statements

OHS Business Advisors

Mr V Makedama


R 48,108

8/11/2015

Once off

Ongoing

N/A

Conducting PMS Training

Unakho Training Consultants

Mr M Cekiso


R195,250

13/11/2015

Once off

Complete

N/A

Services for Fencing of Peddie Cemetery

Ariyoki IT Business Solutions and Trading CC

Mr T Malingatshoni

Technical Services

R 180,370

18/11/2015

4 Months

Complete

N/A

Supply & Delivery of Poultry and Piggery Feed

Tiaglo (Pty)Ltd

Ms E Maytham

Corporate Services

R 68,840

30/11/2015

Once off

Complete

N/A

Supply & Delivery of Cattle Loading Ramp TLR (Hi) speed x 2

Ariyoki IT Business Solutions and Trading CC

Mr T Malingatshoni

Technical Services

R 98,500

30/11/2015

4 Months

Complete

N/A

Conducting MPAC Training


Ms N Ncapayi


R 198,580

2/12/2015

Once off

Complete

N/A

Conducting SCM Training for Bid Committees


Ms B Matu


R 198,100

2/12/12015

Once off

Complete

N/A

Supply & Delivery of Luggage Trailer x1

Good Aims Trading

Ms E Maytham

Corporate Services

R 90,854.01

14/12/2015

Once off

Complete

N/A

71


Project name

Service provider

Project manager


Amount R

Award/ Appointme

nt date



/Not completed


Measures Construction of Dube Scheme Access Road

CLP Trade T/A Envirotech

Ms N Mbekela

Technical Services

R 1,492,939.6

2

15/1/2016

4 Months

Complete

N/A

Constraction & Rehabilitation of Glemore Sportsfield

Mgunculu Trading

Mr T Malingatshoni

Technical Services

R 2,437,131.6

15/1/2016

5 Months

Complete

N/A

Fleet Management Monitoring & Vehicle Recovery System

Digicore Management Services T/A CTRAC Mzansi

Ms E Maytham

Corporate Services

R 301,126

27/1/2016

Once off

Complete

N/A

ICT Network Monitoring & Inventory Software

Sybaweb Eastern Cape(Pty) Ltd

Ms B Nodada


R 177,500

27/1/2016

12 Months

Ongoing

N/A

Supply and Installation of 14 Speedhumps

Konrad De Waal- Dura Bump

Mr T Malingatshoni

Technical Services

R 198,560

29/1/2016

Once off

Complete

N/A

Construction of Hamburg Sportsfield

MVI Construction

Mr T Malingatshoni

Technical Services

R 2,280,031.3

0

1/3/2016 6 Months Ongoing

N/A

Supply and Delivery of Double Drum Vibratory Roller

Ndlambe Investment

Mr T Malingatshoni

Technical Services

R176,375

2/4/2016

Once off

Complete

N/A

Supply and Delivery of 10 Laptops PCs

Ndaselele General Trading

Ms B Nodada


R 175,000

26/5/2016

Once off

Complete

N/A

Supply and Delivery of 14 Seater Bus, 2 x

Bange Trading Enterpreneurs CC

Ms E Maytham

Corporate Services

R 1 ,306 ,000

17/6/2016 1 Month Ongoing

N/A

72


Project name

Service provider

Project manager


Amount R

Award/ Appointme

nt date



/Not completed


Measures New Marked Diesel Double Cab with Secure lid (4 x 2)

Asset Register Review and Completioon for 2015/16, 100% Compliance with GRAPS Standards

Arms Audit & Risk Management Solutions (Pty) Ltd

Mr V Makedama


R 765,601

30/6/2016 6 Months Ongoing

N/A

73

5.3 ASSET MANAGEMENT Asset management is practiced within the organization based on a comprehensive asset management policy. The Asset Management Policy provides direction for the management, accounting and control of Property, Plant & Equipment (Assets) owned or controlled by the municipality to ensure the following:

Implementation of the approved Asset Management Policy as required in terms of section 63 of the Municipal Finance Management Act (MFMA). Verify assets in possession of the Council annually, during the course of the financial year. Keep a complete and balanced record of all assets in possession of the Council. Report in writing all asset losses, where applicable, to Council. Those assets are valued and accounted for in accordance with a statement of GRAP. Those assets are properly maintained and safeguarded. The roles of the following are clearly defined within the asset management policy:

Municipal Manager Chief Finance Officer Asset control section Manager budget section Manager Expenditure section Procurement section All other departments

Asset Management is performed in line with the Asset Management Policy as described above. The control and safeguarding of assets remain the responsibility of each department. Each department budgets for the necessary maintenance of the assets under their control in order for the assets to achieve their economic life spans. 5.4 REPAIRS AND MAINTENANCE

Repair and Maintenance Expenditure 2015/16 R' 000

Original Budget

Adjustment Budget Actual Budget

variance Repairs and Maintenance Expenditure 9 004 832 9 025 181 3 811 007 5 214 174 T5.3.4

74

5.5 FINANCIAL RATIOS BASED ON KEY PERFORMANCE INDICATORS 5.5.1 LIQUIDITY RATIO

RATIO BASIS OF CALCULATIONS

2013/14 2014/15 2015/16 CURRENT YEAR AUDITED

Liquidity Ratio Current Assets/current liabilities

0.0 0.8 1.0

2013/2014 2014/2015Current Year2015/2016

Audited

Liquidity Current Ratio

Liquidity Current Ratio 0.0% 0.8% 1.0%

0.0%

0.2%

0.4%

0.6%

0.8%

1.0%

1.2%

Perc

enta

ges

Liquidity Current Ratio

75

5.5.2 CREDITORS MANAGEMENT

Ratio Basis of calculation 12/13 13/14 14/15 current year audited 2015/16

Creditors System Efficiency

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

0.0% 0.0% 0.0% 93%

2012/2013 2013/2014 2014/2015

CurrentYear

2015/2016Audited


Creditors System Efficiency 0.0% 0.0% 0.0% 93%

0.0%10.0%20.0%30.0%40.0%50.0%60.0%70.0%80.0%90.0%

100.0%

Perc

enta

ges


76

5.5.3 BORROWING MANAGEMENT

Ratio Basis of calculation 12/13 13/14 14/15 2015/16 current year audited

Capital Charges to Operating Expenditure

Interest & Principal Paid /Operating Expenditure

0.0% 7.4% 1.6% 3.0%

2012/2013 2013/2014 2014/2015Current Year2015/2016

Audited


Capital Charges to OperatingExpenditure

0.0% 7.4% 1.6% 3.0%

0.0%1.0%2.0%3.0%4.0%5.0%6.0%7.0%8.0%

Perc

enta

ges


77

5.5.4 EMPLOYEE COSTS

Ratio Basis of calculation 12/13 13/14 14/15 2015/16 current year audited

Employee costs

Employee costs/(Total Revenue - capital revenue)

40.3% 56.3% 44.9% 41.9%

2013/2014 2014/2015Current Year

2015/2016 Audited

Employee Costs

Employee Costs 56.3% 44.9% 41.9%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

Perc

enta

ges

Employee Costs

78

COMPONENT B: SPENDING AGAINST CAPITAL BUDGET 5.6 CAPITAL EXPENDITURE

% of Expenditure Budget Original Budget Adjustment

Budget Audited Full Year

Total Capital Expenditure 122.14% 31 960 961 30 649 588 37 436 695 Operating Expenditure 93.93% 124 365 522 128 243 253 120 502 939 Total expenditure 99 156 326 483 158 892 841 157 939 634

5.7 SOURCES OF FINANCE

5.7.1 CAPITAL EXPENDITURE BY FUNDING SOURCE

The table below indicates the capital expenditure by funding source for the 2015/16 financial year:

Capital Expenditure – Funding Sources 2014/2015 – 2015/2016 R’000



Adjusted Budget


Adjustments Budget

Source of Financed Grants & subsidies 26 316 305 23 309 801 22 309 801 22 309 801 95.71% 100% Other 350 861 8 651 160.20 8 339 787.20 15 126 894 174.85% 181.38% Total 26 667 166 31 960 961.20 30 649 588.20 37 436 695 117.13% 122.14% Percentage of Finance External Loans - - - - - - Public Contr & Donations - - - - - - Grants & Subsidies 98.68% 72.93% 72.79% 59.59% 81.71% 81.87% Other 1.32% 27.07% 27.21% 40.41% 149.28% 148.50%

0.00%

20.00%

40.00%

60.00%

80.00%

100.00%

120.00%

140.00%

Capital Expenditure Operating Expenditure

Capital Expenditure 2015/16

% of Expenditure Budget

79

Capital Expenditure – Funding Sources 2014/2015 – 2015/2016 R’000



Adjusted Budget


Adjustments Budget

Capital Expenditure Environment Waste - 1 991 200 1 792 080 - - - Electricity - 500 000 800 000 279 968 55.99% 35% Planning - 1 580 886.88 450 599.88 90 032 5.70% 19.98% Roads & Storm Water 26 041 138 22 309 801 22 309 801 34 595 018 14.18% 155.07% Community and Social Services 24 687 1 410 040.80 273 278.80 200 000 64.86% 73.19% Corporate Services 601 341 4 017 072.52 5 023 828.52 2 270 677 56.3% 45.20% Other - 151 960 - Total 26 667 166 31 960 931.20 30 649 588.20 37 436 695 117.13% 122.14% Percentage of expenditure Environmental Waste - 6..23% 5.85% - - - Electricity - 1.56% 2.61% 0.75% 47.80% 28.67% Planning - 4.95% 1.47% 0.24% 4.87% 16.37% Roads & Storm Water 97.65% 69.80% 72.79% 92.41% 12.11% 126.96% Community and Social Services 0.09% 4.41% 0.89% 0.53% 55.37% 59.92% Corporate Services 2.25% 12.57% 16.39% 6.07% 48.07% 37.01% Other - 0.48% - - - -

80

COMPONENT C: CASH FLOW MANAGEMENT AND INVESTMENTS

5.8 CASH FLOW

Cash Flow Outcomes Description 2014/2015 2015/2016


Adjusted Budget

Actual

CASH FLOW FROM OPERATION ACTIVITIES Receipts 112 634 587 137 496 921.09 140 779 360.88 123 066 940 Ratepayers and other 11 031 167 17 294 358.09 24 566 797.88 11 468 756 Government – Operation 73 328 951 86 892 563 86 902 563 86 859 000 Government – Capital 27 454 055 23 310 000 23 310 000 23 484 000 Interest 820 414 10 000 000 6 000 000 1 255 184 Dividends - - - - Payments -93 050 425 -94 451 180.45 -109 810 955.61 -96 953 366 Suppliers and employees -91 549 099 -94 451 180.45 -109 810 955.61 -93 278 228 Finance charges -1 501 326 - - -3 675 138 Transfers and Grants NET CASH FROM / (USED) OPERATING ACTIVITIES 19 584 162 43 045 740.64 30 968 405.27 26 113 574 CASH FLOW FROM INVESTING ACTIVITIES Receipts Proceeds on disposal of PPE Proceeds from Insurance claim for loss of PPE

- 43 779

300 000 -

273000 -

316 425 30 396

Decrease (increase) in non-current debtors - - - - Decrease (increase) other non-current receivables - - - - Decrease (increase) in non-current investments - - - - Payments - - - - Capital Assets Purchase of Intangible Assets

-26 667 166 -64 745

-31 960 961 -

-30 649 588.20 -

-24 528 277 -

NET CASH FROM/(USED) INVESTING ACTIVITIES -26 688 132 -31 660 961 -30 376 588.20 -24 181 456 CASH FLOW FROM FINANCING ACTIVITIES Receipts - - - - Short term loans - - - - Borrowing long term/refinancing - - - - Increase (decrease) in consumer deposits - - - - Payments - - - - Repayment of borrowing -1 350 747 - - -894 942 NET CASH FROM / (USED) FINANCING ACTIVITIES -1 350 747 - - -894 942 NET INCREASE / (DECREASE) IN CASH FIELD -8 454 717 1 037 176 Cash/Cash equivalents at the year begin 8 618 348 11 384 779.64 591 817.07 163 631 Cash/Cash equivalents at the year end 163 631 6 884 779.64 755 448.07 1 200 807

81

CHAPTER SIX: AUDITOR GENERAL AUDIT FINDINGS COMPONENT A: AUDITOR-GENERAL OPINION

Auditor General Report on Financial Performance 2015/16 Audit Report status Qualification

82

NGQUSHWA LOCAL MUNICIPALITY (Registration number EC126) Annual Financial Statements for the Year Ended 30 June 2016 GENERAL INFORMATION

LEGAL FORM OF ENTITY

Local Municipality

NATURE OF BUSINESS AND PRINCIPAL ACTIVITIES

Ngqushwa is a Local Municipality rendering basic services such as Refuse Collection, Infrastructure Development, Economic Development Community Services, etc.

EXECUTIVE COMMITTEE Mr S.E. Ndwayana (Mayor) Mr Z. Jowela (Speaker) Ms N.C. Gxasheka (Acting Chief Whip) Ms L Cuka (Member of Executive Committee) Mr M. Faltein (Member of Executive Committee) Mr T. Siwisa (Member of Executive Committee) Ms N. Tele (Member of Executive Committee)

COUNCILLORS Mr M. Boqwana Ms N. Coto Ms T.N. Dyani Ms T.G. Dyibhishe Mr S. Jali Mr T. Magazi Ms N.N.C. Maphekula Mr M.C. Mapuma Ms N. Mntanga Mr A. Mtshakazi Ms N. Ndabazonke Mr A. Ndanda Mr M.G. Ntonjane Mr M.B. Sethuntsa Ms N.A. Seysman Ms P. Sithole Mr T. Tusani Mr Y.G. Yolelo

TRADITIONAL LEADERS Mr B Matomela (Chief) Mr N. Mhlauli (Prince) Ms N.V. Njokweni (Princess) Mr G.L Zitshu (Prince)

GRADING OF LOCAL AUTHORITY 3 CHIEF FINANCE OFFICER (CFO) Mr V.C. Makedama

ACCOUNTING OFFICER Mr T.T. Mnyimba REGISTERED OFFICE Corner of N2 and R345 Road

Peddie 5640

BUSINESS ADDRESS Corner of N2 and R345 Road Peddie 5640

85

NGQUSHWA LOCAL MUNICIPALITY (Registration number EC126) Annual Financial Statements for the Year Ended 30 June 2016 GENERAL INFORMATION

POSTAL ADDRESS P.O Box 539 Pedd.2. 5640

BANKERS First National Bank AUDITORS Auditor•General South Africa CONTACT DETAILS Email [email protected]

Telephone 040 673 3095 www ngqushwamun.gov.za

86

NGQUSHWA LOCAL MUNICIPALITY (Registration number EC126) Annual Financial Statements for the Year Ended 30 June 2016 INDEX

ABBREVIATIONS ....................................................................................................................................................................................... 88

ACCOUNTING OFFICER’S RESPONSIBILITIES AND APPROVAL OF THE ANNUAL FINANCIAL STATEMENTS ............................. 89

STATEMENT OF FINANCIAL POSITON AS AT 30 JUNE 2016 ............................................................................................................... 90

STATEMENT OF FINANCIAL PERFORMANCE FOR THE YEAR ENDED 30 JUNE 2016 .................................................................... 91

STATEMENT OF CHANGES IN NET ASSETS FOR THE YEAR ENDED 30 JUNE 2016 ....................................................................... 92

CASH FLOW STATEMENT FOR THE YEAR ENDED 30 JUNE 2016 ..................................................................................................... 93

STATEMENT OF COMPARISON OF BUDGET AND ACTUAL AMOUNTS ............................................................................................. 94

ACCOUNTING POLICIES .......................................................................................................................................................................... 98

NOTES TO THE ANNUAL FINANCIAL STATEMENTS .......................................................................................................................... 113

ABBREVIATIONS ANC African National Congress ASS Accounting Standards Board BTO Budget and Treasury Office CETA Construction Education and Training Authority CRAP Standards of Generally Recognised Accounting Practice IEC Independent Electoral Commission MPAC Municipal Public Accounts Committee PAYE Pay As You Earn PR Public Relations RDP Reconstruction and Development Programme SALGA South African Local Government Association SARS South African Revenue Services SDL Skills Development Levy SPU Special Programs Unit UIF Unemployment Insurance Fund VAT Value Added Tax

87

NGQUSHWA LOCAL MUNICIPALITY (Registration number EC126) Annual Financial Statements for the Year Ended 30 June 2016 ACCOUNTING OFFICER’S RESPONSIBILITIES AND APPROVAL OF THE ANNUAL FINANCIAL STATEMENTS The accounting officer is required by the Municipal Finance Management Act No. 56 of 2003 to maintain adequate accounting records and is responsible for the content and integrity of the annual financial statements and related financial information included in this report. It is the responsibility of the accounting officer to ensure that the annual financial statements fairly present the state of affairs of the municipality as at the financial year ended 30 June 2016 and the results of its operations and cash flows for the period then ended The external auditors are engaged to express an independent opinion on the annual financial statements and were given unrestricted access to all financial records and related data, The annual financial statements have been prepared in accordance with Standards of Generally Recognised Accounting Practice (GRAP) including any interpretations, guidelines and directives issued by the Accounting Standards Board (ASB). The annual financial statements are based on appropriate accounting policies consistently applied and supported by reasonable and prudent judgements and estimates The accounting officer acknowledges that he is ultimately responsible for the system of internal financial control established by the municipality and places considerable importance on maintaining a strong control environment. To enable the accounting officer to meet these responsibilities, the accounting officer sets standards for internal control aimed at reducing the risk of error or deficit in a cost effective manner. The standards include the proper delegation of responsibilities within a clearly defined 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 ethical standards in ensuring the municipality's business is conducted in a manner that in all reasonable circumstances is above reproach. The focus of risk management in the municipality is on identifying, assessing, communicating, managing and monitoring all known forms of risk across the municipality. While operating risk cannot be fully eliminated, the municipality endeavours to minimise it by ensuring that appropriate infrastructure, controls, systems and ethical behaviour are applied and managed within predetermined procedures and constraints. The accounting officer is of the opinion, that based on the information and explanations given by management, the system of internal control provides reasonable assurance that the financial records may be relied upon for the preparation of the annual financial statements. However, any system of internal financial control can provide only reasonable, and not absolute, assurance against material misstatements or deficiencies. The accounting officer has reviewed the municipality's cash flow forecast for the 12 months to 30 June 2017 and in light of this review and the current financial position, he is satisfied that the municipality has or has access to adequate resources to continue in operational existence for the foreseeable future. The external auditors are responsible for independently auditing and reporting on the municipality’s annual financial statements. The annual financial statements set out on pages 5 to 62 which have been prepared on the going concern basis, were agreed to by the Council on 13 December 2016 and were signed on its behalf by: ________________________________ T.T. Mnyimba Accounting Officer ________________________________ Date

annual financial statements setCouncilllllllll oooooonoooooo 13 Decembbbbbbererrrrrrrrr 222222222222222220101010101010101010101010010116 a

________________ _______________________ ___________

T.T. MMMMMMMMMMMMMMMMMMnynnnnnnnnn imba AcAcAcAcAcAcAcAcAcAcAcAcAcAAAA counting Officer

88

NGQUSHWA LOCAL MUNICIPALITY (Registration number EC126) Annual Financial Statements for the Year Ended 30 June 2016 STATEMENT OF FINANCIAL POSITON AS AT 30 JUNE 2016

Notes

2016 R

2015Restated"

RASSETS CURRENT ASSETS

Inventories 3 268,800 268,800Operating Lease Asset 4 67,602 93,650VAT Receivable 5 3,966,173 4,458,535Receivables from Exchange Transactions 6 7.827,999 2,711,917Receivables from Non-Exchange Transactions 7 21,061,386 13,522,048Cash and Cash Equivalents 8 1.200,807 163,631 34,392,767 21,218,581NON-CURRENT ASSETS Intangible Assets 9 565,871 965,517Investment Property 10 37,951,900 37,951,900Property, Plant and Equipment 11 163,415,233 146 670,208Heritage Assets 12 3 3 201,933,007 185,587,628TOTAL ASSETS 236,325,774 206,806,209LIABILITIES CURRENT LIABILITIES Finance Lease Obligation 13 4,761,551 4,121,498Payables from Exchange Transactions 14 26,200,505 20,720,188Payables from Non-Exchange Transactions 16 1,850,712 2,235,375 32,812,768 27,077,061NON-CURRENT LIABILITIES Finance Lease Obligation 13 7,020,261 3,175,357Provisions 17 2,848,231 2,490,811 9,868,492 5,666,168TOTAL LIABILITIES 42,681,260 32,743,229NET ASSETS 193,644,514 174,062,980Accumulated Surplus 18 193,644,514 174,062,980

89

NGQUSHWA LOCAL MUNICIPALITY (Registration number EC126) Annual Financial Statements for the Year Ended 30 June 2016 STATEMENT OF FINANCIAL PERFORMANCE FOR THE YEAR ENDED 30 JUNE 2016

Notes

2016 R

2015Restated*

RREVENUE Revenue from Exchange Transactions

Service Charges 19 571,929 535,518Licences and Permits 20 1,638,850 1,675,561Rental of Facilities and Equipment 21 192,928 225,074Agency Services 315,731 334,015Other Revenue 22 269,155 208,518Interest Earned - Outstanding Debtors 23 3,277,506 2,436,854Interest Revenue 24 1,255,184 820,414Total Revenue from Exchange Transactions 7,521,283 6,235,954 Revenue from Non-Exchange Transactions

Property Rates 25 17,137,076 10,721,837Government Grants 26 110,343,000 106,354,061Fines and Penalties 623,092 732,949Other Transfer Revenue 27 2,060,146 59,363Total Revenue from Non-Exchange Transactions 130,163,314 117,868,210Total Revenue 137,684,597 124,104,164 EXPENDITURE

Employee Related Costs 28 47,796,803 43,430,249Remuneration of Councillors 29 7,758,337 7,223,883Depreciation and Amortisation 30 13,334,238 19,975,737Impairment of Assets 31 318,045 211,981Finance Costs 32 3,675,138 1,682,326Debt Impairment 33 1,963,245 1,887,912Repairs and Maintenance 34 3,811,007 1,325,290Other Expenditure 35 41,846,126 30,351,742Total Expenditure 120,502,939 106,089,120Operating Surplus 17,181,658 18,015,044Loss on Disposal of Assets (224,833) -Remeasurement of Long Service Bonus - 191,000 (224,833) 191,000Surplus for the year 16,956,825 18,206,044

90

NGQUSHWA LOCAL MUNICIPALITY (Registration number EC126) Annual Financial Statements for the Year Ended 30 June 2016 STATEMENT OF CHANGES IN NET ASSETS FOR THE YEAR ENDED 30 JUNE 2016

Accumulated

Surplus R

Total net assets

R Balance as at 30 June 2014 157,513,974 157,513,974 Prior Year Adjustments (1,657,038) (1,657,038) Restated Balance at 01 July 2014 155,856,936 155,856,936 Restated Surplus For The Year 18,206,044 18,206,044 Total changes 16,206,044 18,206,044 Restated Balance at 01 July 2015 174,062,980 174,062,980 Changes in Net Assets Prior Year Adjustment Recognised Directly in Equity 2,624,709 2,624,709 Other Adjustments - - Surplus For The Year 16,956,825 16,956,825 16,956,825 16,956,825 Total Changes for the Year 19,581,534 19,581,534 Balance at 30 June 2016 193,644,514 193,644,514 Refer to Note 39 (Prior Period Errors)

91

NGQUSHWA LOCAL MUNICIPALITY (Registration number EC126) Annual Financial Statements for the Year Ended 30 June 2016 CASH FLOW STATEMENT FOR THE YEAR ENDED 30 JUNE 2016

Notes

2016 R

2015 Restated*

R CASH FLOWS FROM OPERATING ACTIVITIES RECEIPTS

Billed Services 6,592,178 8,064,540 Government Grants 110,343,000 100,783,006 Interest Revenue 1,255,184 820,414 Other Services 4,876,578 2,966,627 123,066,940 112,634,587 PAYMENTS Payments to Employees (57,863,119) (51,795,267) Payments to Suppliers (35,415,109) (39,753,832) Finance Costs 32 (3,675,138) (1,501,326) (96,953,366) (93,050,425) Net cash flows from operating activities 36 26,113,574 19,584,162 CASH FLOWS FROM INVESTING ACTIVITIES

Purchase of Property, Plant and Equipment 11 (24,528,277) (26,667,166)

Proceeds from Sale of Property, Plant and Equipment 11 316,425 - Proceeds from insurance Claim for Loss of Property, Plant and Equipment 22 30,396 43,779 Purchase of Intangible Assets 9 (64,745) Net cash flows from investing activities (24,151,456) (26,688,132) CASH FLOWS FROM FINANCING ACTIVITIES

Finance Lease Repayments 13 (894,942) (1,350,747)

Net increase/(decrease) in Cash and Cash Equivalents

1,037,176 (8,454,717)

Cash and Cash Equivalents at the beginning of the year 163,631 8,618,348 Cash and Cash Equivalents at the end of the year 8 1,200,807 163,631

92

NGQUSHWA LOCAL MUNICIPALITY (Registration number EC126) Annual Financial Statements for the Year Ended 30 June 2016 STATEMENT OF COMPARISON OF BUDGET AND ACTUAL AMOUNTS Budget on Accrual Basis Approved

Budget

R

Adjustments

R

Final Budget

R

Actual amounts on comparable

basis R

Difference between final budget and

actual R

Percentage Variance and

Comment

Statement of Financial Performance for the Year Ended 30 June 2016 REVENUE REVENUE FROM EXCHANGE TRANSACTIONS

Service Charges 419.000 226,000 645,000 571,929 (73,071) -11% See Note 1

Licences and Permits 1,708.000 - 1,708,000 1.638,850 (69,150) -4%

Rental of Facilities and 20.000 230,000 250,000 192,928 (57,072) -23% See Note 2

Equipment

Agency Services 252,000 - 252,000 315,731 63,731 +25% See Note 3

Other Revenue 11,700,000 (2,819,000} 8,881,000 269,155 (8,611,845) -97% See Note 4

Interest Earned - Outstanding 18,000,000 (8.000,000) 10,000,000 3,277,506 (6,722,494) -67% See Note 5

Debtors

Interest Revenue 1,000,000 1,000,000 2,000,000 1,255,184 (744,816) -37% See Note 6

Total revenue from exchange transactions

33,099,000 (9,363,000) 23,736,000 7,521,283 (16,214,717)

REVENUE FROM NON- EXCHANGE TRANSACTIONS

Property Rates 16,840,000 - 16,840,000 17,137,076 297,076 +2%

Government Grants 110203,000 7,107.000 117,310,000 1 1 0 .34 3 ,0 00 (6,967,000) -6%

Fines and Penalties 1,509,000 (1,100,000) 409,000 623,092 214,092 +52% See Note 7

Other Transfer Revenue - - - 2,060,146 2,060,146 +100% See Note 4

Total Revenue from Non- 128,552,000 6,007,000 134,559,000 130,163,314 (4,395,686)

Exchange Transactions

Total Revenue 161,651,000 (3,356,000) 158,295,000 137,684,597 (20,610,403)

EXPENDITURE

Employee Related Costs (50,309,000) 1,318,000 (48,991,000) (47.796,803) 1,194,197 +2%

Remuneration of Councillors (7,310,000) (329,000) (7,639,000) (7 758,337) (119,337) -2%

Depreciation and Amortisation (15.914.000) 6,482,000 (9,432,000) (13.334,238) (3,902,238) -41% See Note 8

Impairment of Assets - - - (318,045) (318,045) -100% See Note 9

Finance Costs - - - (3,675,138) (3,675,138) -100% See Note 9

Debt Impairment (14,000,000) 5,000,000 (9,000,000) (1,963,245) 7,036,755 +78% See Note 10

Repa.rs and Maintenance (9,005,000) (20,000) (9,025,000) (3,811,007) 5,213,993 +58% See Nate 11

Other Expenditure (59,789,000) 15,633,000 (44,156,000) (41,846,126) 2,309,874 +5%

Total expenditure (156,327,000) 28,084,000 (128,243,000) (120,502,939) 7,740,061

Operating Surplus 5,324,000 24,728,000 30,052,000 17,181,658 (12,870,342)

Loss on Disposal of Assets 600,000 - 600,000 (224,833) (824,833) -137% See Note 12

Surplus for the year 5,924,000 24,728,000 30,652,000 16,956,825 (13,695,175)

93

NGQUSHWA LOCAL MUNICIPALITY (Registration number EC126) Annual Financial Statements for the Year Ended 30 June 2016 STATEMENT OF COMPARISON OF BUDGET AND ACTUAL AMOUNTS

Budget on Accrual Basis Approved

Budget

R

Adjustments

R

Final Budget

R


basis R


actual R


Comment

ASSETS CURRENT ASSETS

Inventories - - - 268,800 268,800+100% See Note 9

Operating Lease Asset - - - 67,602 57,602 +100% See Note 9

VAT Receivable - - - 3 966,173 3,966,173 +100% See Note 9

Receivables from Non-Exchange - - - 7.827,999 7,827,999 +100% See Note 13

Transactions - - - Receivables from Non-Exchange 24,121.000 8 578.000 32,699,000 21.061,386 (11,637,614) -36% See Note 13

Transactions Cash and Cash Equivalents (4,500,000) 5,255,000 755,000 1,200,807 445,807-59% See Note 14

19,621,000 13,833,000 33,454,000 34,392,767 9313,767 NON-CURRENT ASSETS

Intangible Assets 1,969.000 (161.000) 1,808,000 555,871 (1,242,129) -69% See Note 15

Investment Property 39,042,000 (1.065.000) 37,977,000 37 951,900 (25,100) 0%

Property, Plant and Equipment 239,679.000 (51 251.000) 188,428,000 163,415,233 (25,012,767) -13% See Note 16

Heritage Assets - - - 3 3 -100% See Note 9

280,690,000 (52,477,000) 228,213,000 201,933,007 (26,279,993) TOTAL ASSETS 300,311,000 (38,644,000) 261,667,000 236,325,774 (25,341,226) LIABILITIES

CURRENT LIABILITIES

Finance Lease Obligation - - - 4,761,551 4,761,551 -100% See Note 9

Payables from Exchange 5 000.000 30,000,000 35,000,000 26.200,505 (8,799,495) +23% See Note 17

Transactions Payables from Non-Exchange - - - 1.850,712 1,850,712 -100% See Note 9

Transactions 5,000,000 30,000,000 35,000,000 32,812,768 (2,187,232) NON-CURRENT LIABILITIES Finance Lease Obligation - - - 7.020,261 7,020,261 -100% See Note 9

Provisions 2,590.000 3,175,000 5,765,000 2,848,231 (2,916,769) -51% See Note 18

2,590,000 3,175,000 5,765,000 9,868,492 4,103,492 TOTAL LIABILITIES 7,590,000 33,175,000 40,765,000 42,681,260 1,916,260 NET ASSETS 292,721,000 (71,819,000) 220,902,000 193,644,514 (27,257,486) NET ASSETS Accumulated Surplus 292,721,000 71.819 000) 220,902,000 193 644,514 (27,257,486) -12%

94



Budget

R

Adjustments

R

Final Budget

R


basis R


actual R


Comment

CASH FLOW STATEMENT FOR THE YEAR ENDED 30 JUNE 2016 CASH FLOWS FROM OPERATING ACTIVITIES RECEIPTS Billed Services 8,711,000 2,409,000

11,120,000 6.592,178

(4,527,822) -

41% See Note 18

Government Grants 110,203,000 10,000

110,213,000 110,343,000 130,000 0%

Interest Revenue 10,000,000 (4,000,000)

6,000,000 1255,184 (4,744,816) -79% See Note 18

Other Services 8,584,000 4,863,000 13,447,000 4 876,578 (8,570,422) -64% See Note 18

137,498,000 3,282,000 140,780,000 123,066,940 (17,713,060) PAYMENTS Employee Costs and Suppliers (94,451,000) (15,360,000) (109,811,000) (93.278,228) 16,532,772 +15% See Note 18

Finance Costs - - - (3,675,138) (3,675,138) -100% See Note 18

(94,451,000) (15,360,000) (109,811,000) (96,953,366) 12,857,634 Net Cash Flows from Operating Activities

43,047,000 (12,078,000) 30,969,000 26,113,574 (4,855,426)

CASH FLOWS FROM INVESTING ACTIVITIES Purchase of Property, Plant and Equipment

(31,961,000) 1,311,000 (30,650,000) (24,528,277) 6,121,723 + 20% See Note 18

Proceeds from Sale of Property, Plant and Equipment

300,000 (27,000) 273,000 316,425 43,425 +16% See Note 18

Proceeds from Insurance Claim for Loss of Property, Plant and Equipment

30,396 30,396 +100% See Note 18

Net Cash Flows from Investing Activities

(31,661,000) 1,284,000 (30,377,000) (24,181,456) 6,195,544

CASH FLOWS FROM FINANCING ACTIVITIES Finance Lease Repayments - - - (894,942) (894,942) -100% See Note 18

Net increase/(decrease) in cash and cash equivalents

11,386,000 (10,794,000) 592,000 1,037,176 445,176 + 75% See Note 18

Cash and Cash Equivalents at the beginning of the year

(4,500,000) 4,664,000 164,000 163,631 (369) 0% See Note 18

Cash and Cash Equivalents at the end of the year

6,886,000 (6,130,000) 756,000 1,200,807 444,807

95



Budget

R

Adjustments

R

Final Budget

R


basis R


actual R


Comment

Material differences between budget and actual amounts (above 10%) The detailed reasons for the differences between budget variances are as follows 1. Service charges raised were less than budgeted for due to places of worship that were included in the budget. 2. Rental of facilities and equipment hall rental was less than anticipated as there were fewer functions being held at the

community halls that are revenue generating. 3. The variance is due to an increase in the number of licence. 4. The budget amount includes the budget for "Other Transfer Revenue" which is shown separately under Revenue from Non-

Exchange Transactions. 5. The budgeted amount was excessive, and was further reduced by the debtor write offs. 6. Interest earned was lower than anticipated. 7. More traffic fines were issued due to increased traffic control measures put in place. 8. During the budgeting phase, internal projects were not anticipated to be completed in the current year resulting in depreciation

for the year being higher than anticipated. 9. The budget for finance costs was included in the repairs and maintenance budget. This overspending must be considered

inline with the underspending on repairs and maintenance. 10. The list of debt write off sent to council was less than the budget and the debt impairment calculation. 11. The budget for finance costs was included in the repairs and maintenance budget. This overspending must be considered

inline with the underspending on repairs and maintenance. 12. The budget did not take into account the current condition of the assets that were earmarked for sale as they were sold at less

than market value due to their current condition. 13. The budget amount included the Receivables from Exchange portion, this is due to correction of double billing that was done in

previous years end has since been corrected in the current year. 14. This is due to larger balances that are included in cash and cash equivalents received from investments. 15. The variance was due to the municipality not purchasing any intangible assets in the current year. 16. The variance is due projects that could not be completed and are still under work-in-progress. 17. The variance is due to the correction of prior year errors on salary suspense accounts. 18. The variance is as a result of the differences in other statements as the cashflow is a reconciliation of all your statements to

the cash balances.

96

NGQUSHWA LOCAL MUNICIPALITY (Registration number EC126) Annual Financial Statements for the Year Ended 30 June 2016 ACCOUNTING POLICIES 1. Presentation of Annual Financial Statements The annual financial statements have been prepared in accordance with the Standards of Generally Recognised Accounting Practice (GRAP), issued by the Accounting Standards Board in accordance with Section 122(3) of the Municipal Finance Management Act No. 56 of 2003. These annual financial statements have been prepared on an accrual basis of accounting and are in accordance with the historical cost convention as the basis of measurement, unless specified otherwise. A summary of the significant accounting policies, which have been consistently applied in the preparation of these annual financial statements are disclosed below These accounting policies are consistent with the previous period but the wording has since been amended and inclusion of required paragraphs has since been included. 1.1 Presentation Currency

These annual financial statements are presented in South African Rands, which is the functional currency of the municipality. All amounts are rounded off to the nearest Rand. 1.2 Going Concern Assumption These annual financial statements have been prepared based on the expectation that the municipality will continue to operate 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 the amounts represented in the annual financial statements and related disclosures. Use of available information and the application of judgement is inherent in the formation of estimates. Actual results in the future could differ from these estimates which may be material to the annual financial statements. Significant judgements include: Receivables The municipality assesses its receivables for impairment at the end of each reporting period. In determining whether an impairment loss should be recorded in surplus or deficit, the municipality makes judgements as to whether there is observable data indicating a measurable decrease in the estimated future cash flows from a financial asset. The impairment for trade receivables is calculated based on the grading of category of debtors according to their payment history. An accumulation of arrear balances is an indicator of debtor delinquency. Such debtors are provided for as they are considered to be impaired due to uncertainty surrounding the recoverability of the outstanding amounts. Provisions Provisions were raised and management determined an estimate based on the information available. Additional disclosure of these estimates of provisions are included in Note 17 "Provisions" of these financial statements. Allowance for Doubtful Debts Impairment loss is recognised in surplus or deficit when there is objective evidence that the debtor is impaired. The impairment is measured using the debtor's balances and the policy for debt impairment considering the probability of not receiving the monies owed to the municipality.

97

NGQUSHWA LOCAL MUNICIPALITY (Registration number EC126) Annual Financial Statements for the Year Ended 30 June 2016 ACCOUNTING POLICIES

1.4 Investment Property Investment property is property held to earn rentals or for capital appreciation or both rather than for:

use in the production or supply of goods or services, or administrative purposes, or sale in the ordinary course of operations.

Investment property is recognised as an asset when it is probable that the future economic benefits or service potential that are associated with the investment property will flow to the municipality, and the cost or fair value of the investment property can be measured reliably. Investment property is initially recognised at cost. Transaction costs are included in the initial recognition. Where investment property is acquired through a non-exchange transaction, its cost is its fair value as at the date of acquisition. Costs include costs incurred initially and costs incurred subsequently to add to, or to replace a cost of, or service the property. If a replacement cost is recognised in the carrying amount of the investment property, the carrying amount of the replaced part is derecognised. Subsequent Measurement - Fair value method Subsequent to initial recognition investment property is measured at fair value. The fair value of investment property reflects market conditions at the reporting date. A gain or loss arising from a change in fair value is included in net municipality's or deficit for the period in which it arises. 1.5 Property, Plant and Equipment Property, plant and equipment are tangible non-current assets (including infrastructure assets) that are held for use in the production or supply of goods or services, or for administrative purposes, and are expected to be used during more than one period. The cost of an item of property, plant and equipment is recognised as an asset when

it is probable that future economic benefits or service potential associated with the item will flow to the municipality; and the cost of the item can be measured reliably.

Property, plant and equipment is initially measured at cost. The cost of an item of property, plant and equipment is the purchase price and other costs attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management. Trade discounts and rebates are deducted in arriving at the cost. Where an asset is acquired through a non-exchange transaction, its cost is its fair value as at the date of acquisition. Where an item of property plant and equipment is acquired in exchange for a non-monetary asset or monetary assets, or a combination of monetary and non-monetary assets, the asset acquired is initially measured at fair value (the cost). If the acquired item's fair value was not determinable, it's deemed cost is the carrying amount of the asset(s) given up. When significant components of an item of property, plant and equipment have different useful lives they are accounted for as separate items (major components) of property plant and equipment. Costs include all costs incurred initially to acquire or construct an item of property, plant and equipment and costs incurred subsequently to add to, replace part of, or service it. If a replacement cost is recognised in the carrying amount of an item of property, plant and equipment, the carrying amount of the replaced part is derecognised. The initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located is also included in the cost of property, plant and equipment, where the entity is obligated to incur such expenditure, and where the obligation arises as a result of acquiring the asset or using it for purposes other than the production of inventories.

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Recognition of costs in the carrying amount of an item of property plant and equipment ceases when the item is in the location and condition necessary for it to be capable of operating in the manner intended by management Major spare parts and stand-by equipment which are expected to be used for more than one period are included in property, plant and equipment. In addition, spare parts and stand by equipment which can only be used in connection with an item of property plant and equ pment are accounted for as property, plant and equipment. Major inspection costs which are a condition of continuing use of an item of property, plant and equipment and which meet the recognition criteria above are included as a replacement in the cost of the item of property, plant and equipment. Any remaining inspection costs from the previous inspection are derecognised Property, plant and equipment is depreciated on a straight line basis over their expected useful lives to their estimated residual value, The residual value estimated for motor vehicles is 20% of the cost at acquisition. Property, plant and equipment is carried at cost less accumulated depreciation and any impairment losses except land which is carried at cost. The useful lives of items of property, plant and equipment have been assessed as follows Item Average useful life Land Indefinite Buildings 9 - 30 years Plant and Machinery 10 -15 years Furniture and Fixtures 5 - 7 years Motor Vehicles 7 years Office Equipment 5 - 7 years Computer Equipment 5 years Infrastructure

Roads - Paved 30 years Roads - Graded 7 - 25 years Electricity (Street Lights and High Masts) 11 - 20 years Speed humps 15 years

Security Equipment 5 years Work in Progress Not depreciated Other Equipment 5 years Minor Assets Immediately Park Facilities 5 - 76 years Maintenance Equipment 10 years Landfill Sites 69-98 years The residual value, useful life and depreciation method of each asset are reviewed at the end of each reporting date If the expectations differ from previous estimates, the change is accounted for as a change in accounting estimate. The depreciation charge for each period is recognised in municipality's or deficit unless it is included in the carrying amount of another asset. Items of property, plant and equipment are derecognised when the asset is disposed of or when there are no further economic benefits or service potential expected from the use of the asset The gain or lass arising from the derecognition of an item of property, plant and equipment is included in municipality's or deficit when the item is derecognised. The gain or loss arising from the derecognition of an item of property, plant and equipment is determined as the difference between the net disposal proceeds, if any, and the carrying amount of the item.

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1.6 Intangible Assets An intangible asset is an identifiable non-monetary asset without physical existence. An asset is identifiable if it either

is capable of being separated or divided from a municipality and sold, transferred, licensed, rented or exchanged, either individually or together with a related contract identifiable assets or liability, regardless of whether the entity intends to do so or arises from binding arrangements (including rights from contracts), regardless of whether those rights are transferable or separable from the municipality or from other rights and obligations.

An intangible asset is recognised when

it is probable that the expected future economic benefits or service potential that are attributable to the asset will flow to the municipality; and the cost or fair value of the asset can be measured reliably.

Intangible assets are initially recognised at cost. The municipality assesses the probability of expected future economic benefits or service potential using reasonable and supportable assumptions that represent management's best estimate of the set of economic conditions that will exist over the useful life of the asset. Intangible assets are carried at cost less any accumulated amortisation and any impairment loss. The amortisation period and the amortisation method for intangible assets are reviewed at each reporting date. The municipality has assumed that the residual value of intangible assets is zero. Amortisation is provided to write down the intangible assets, on a straight line basis to their residual values as follows Item Computer Software

Useful life 5 years

Intangible assets are derecognised

on disposal, or when no future economic benefits or service potential are expected from its use or disposal.

The gain or loss is the difference between the net disposal proceeds, if any, and the carrying amount. It is recognised in municipality's or deficit when the asset is derecognised. 1.7 Heritage Assets Heritage assets are assets that have a cultural, environmental, historical, natural, scientific, technological or artistic significance and are held indefinitely for the benefit of present and future generations. The municipality recognises a heritage asset as an asset if it is probable that future economic benefits or service potential associated with the asset will flow to the municipality, and the cost or fair value of the asset can be measured reliably. Initial Measurement Heritage assets are measured at cost. Where a heritage asset is acquired through a non-exchange transaction, its cost is measured at its fair value as at the date of acquisition.

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Subsequent Measurement After recognition as an asset, a class of heritage assets is carried at its cost less any accumulated impairment losses. If a heritage asset's carrying amount is increased as a result of a revaluation, the increase is credited directly to a revaluation municipality's. However, the increase is recognised in municipality's or deficit to the extent that it reverses a revaluation decrease of the same heritage asset previously recognised in municipality's or deficit. If a heritage asset's carrying amount is decreased as a result of a revaluation, the decrease is recognised in municipality's or deficit. However, the decrease is debited directly to a revaluation surplus to the extent of any credit balance existing in the revaluation municipality's in respect of that heritage asset. Impairment The municipality assesses at each reporting date whether there is an indication that it may be impaired. If any such indication exists, the municipality estimates the recoverable amount or the recoverable service amount of the heritage asset. Derecognition Transfers from heritage assets are only made when the particular asset no longer meets the definition of a heritage asset. Transfers to heritage assets are only made when the asset meets the definition of a heritage asset. The municipality derecognises heritage assets on disposal, or when no future economic benefits or service potential are expected from its use or disposal. The gain or loss arising from the derecognition of a heritage asset is determined as the difference between the net disposal proceeds, if any, and the carrying amount of the heritage asset. Such difference is recognised in municipality's or deficit when the heritage asset is derecognised. 18.8 Financial Instruments

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or a residual interest of another entity. Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation. Derecognition is the removal of a previously recognised financial asset or financial liability from a municipality's statement of financial position. A financial asset is:

cash; a contractual right to: - receive cash or another financial asset from another municipality or any other entity; or - exchange financial assets or financial liabilities with another municipality, or any other entity under conditions that are potentially

favourable to the municipality. A financial liability is any liability that is a contractual obligation to

deliver cash or another financial asset to another municipality or any other entity; or exchange financial assets or financial liabilities with another municipality, or any other entity under conditions that are potentially unfavourable to the municipality.

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Liquidity risk is the risk encountered by a municipality in the event of difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial asset. Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: currency risk, interest rate risk and other price risk.

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A financial asset is past due when a counterparty has failed to make a payment when contractually due. Classification The municipality has the following types of financial assets (classes and categories) as reflected on the face of the statement of financial position or in the notes thereto.

Class Category Receivables from Exchange Transactions Financial asset measured at amortised cost Receivables from Non-Exchange Transactions Financial asset measured at amortised cost VAT Receivable Financial asset measured at amortised cost Operating Lease Asset Financial asset measured at amortised cost Cash and Cash Equivalents Financial asset measured at fair value

The municipality has the following types of financial liabilities (classes and categories) as reflected on the face of the statement of financial position or in the notes thereto

Class Category Payables from Exchange Transactions Financial liability measured at amortised cost Payables from Non-Exchange Transactions Financial liability measured at amortised cost Finance Lease Obligation Financial liability measured at amortised cost

Initial Recognition The municipality recognises a financial asset or a financial liability in its statement of financial position when the municipality becomes a party to the contractual provisions of the instrument. The municipality classifies financial instruments, or their component parts, on initial recognition as a financial asset or a financial liability in accordance with the substance of the contractual arrangement. Financial instruments are measured initially at fair value. Initial Measurement of Financial Assets and Financial Liabilities The municipality measures a financial asset and financial liability initially at its fair value plus transaction costs that are directly attributable to the acquisition or issue of the financial asset or financial liability. Subsequent Measurement of Financial Assets and Financial Liabilities The municipality measures its financial assets and financial liabilities after initial recognition at amortised cost except for cash and cash equivalents. The financial assets that are measured at amortised cost are subject to an annual impairment review. Receivables from Exchange and Non-Exchange Transactions Receivables from Exchange and Non-Exchange Transactions are initially measured at fair value. Payables from Exchange and Non-Exchange Transactions Payables from Exchange and Non-Exchange Transactions are initially measured at fair value. Cash and Cash Equivalents Cash and Cash Equivalents comprise cash on hand and call accounts, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value. These are subsequently measured at fair value. Gains and Losses A gain or loss arising from a change in the fair value of a financial asset or financial liability measured at fair value is recognised in municipality's Statement of Financial Performance

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Impairment and Uncollectibility of Financial Assets The municipality assesses for impairment at the end of each reporting period when there is any objective evidence that a financial asset is impaired. When the allowance is recognised, it is measured as the asset's carrying amount at the date of recognition. The carrying amount of the asset is reduced through the use of an allowance account, and the amount of the deficit is recognised in surplus or deficit within operating expenses. When a trade receivable is uncollectible, it is written off against the allowance account for trade receivables. Subsequent recoveries of amounts previously written off are credited against operating expenses in surplus or deficit Derecognition Financial Assets The municipality derecognises a financial asset only when

the contractual rights to the cash flows from the financial asset expire, are settled or waived or the municipality transfers to another party substantially all of the risks and rewards of ownership of the financial asset.

On derecognition of a financial asset in its entirety, the difference between the carrying amount and the sum of the consideration received is recognised in surplus or deficit. Financial Liabilities The municipality removes a financial liability (or a part of a financial liability) from its statement of financial position when it is extinguished — i.e. when the obligation specified in the contract is discharged, cancelled, expires or waived. Presentation Interest relating to a financial instrument or a financial liability is recognised as revenue or expense in municipality's or deficit. Losses and gains relating to a financial instrument or a component that is a financial liability is recognised as revenue or expense in municipality's or deficit. A financial asset and a financial liability are only offset and the net amount presented in the statement of financial position when the municipality currently has a legally enforceable right to set off the recognised amounts and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously. 1.9 Leases A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership. A lease is classified 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 municipality assesses the classification of each element separately. Finance Leases – Lessee Leases of property, plant and equipment where the municipality substantially assumes the risks and rewards of ownership are classified as finance leases. Finance lease assets and liabilities are recognised at the inception of the lease at the lower of the fair value of the leased asset and the present value of the future minimum lease payments. The present value of the future minimum lease payments are determined using the rate implicit in the lease. In the event that the lease does not specify the rate implicit in the lease, the incremental borrowing rate is used. If the borrowing rate cannot be determined the prime interest rate at inception of the lease is used. Each lease payment is allocated between the liability and finance charges so as to achieve a constant rate on the finance balance outstanding. The interest element of the finance cost is charged to the statement of financial performance over the lease period so as to produce a constant periodic rate of interest on the remaining balances of the liability for each period. The property, plant and equipment acquired under finance leases are depreciated over the shorter of the useful life of the asset or the lease term when there is uncertainty that the ownership of the leased assets will transfer to the lessee otherwise the useful life is used in any other event.

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Operating Leases - Lessor Operating lease revenue is recognised as revenue on a straight-line basis over the lease term. Initial direct costs incurred in negotiating and arranging operating leases are added to the carrying amount of the leased asset and recognised as an expense over the lease term on the same basis as the lease revenue. The aggregate cost of incentives is recognised as a reduction of rental revenue over the lease term on a straight-line basis. The aggregate benefit of incentives is recognised as a reduction of rental expense over the lease term on a straight-line basis. When assets are leased out under an operating lease, the asset is included in the statement of financial position on the nature of the asset. 1.10 Inventories Inventories are initially measured at cost except where inventories are acquired through a non-exchange transaction, then their costs are their fair value as at the date of acquisition. Subsequently inventories are measured at the lower of cost and net realisable value Inventories are measured at the lower of cost and current replacement cost where they are held for

distribution at no charge or for a nominal charge, or consumption in the production process of goods to be distributed at no charge or for a nominal charge.

Net realisable value is the estimated selling price in the ordinary course of operations less the estimated costs of completion and the estimated costs necessary to make the sale exchange or distribution. Current replacement cost is the cost the municipality incurs to acquire the asset on the reporting date. The cost of inventories comprises of all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition. The cost of inventories of items that are not ordinarily interchangeable and goods or services produced and segregated for specific projects is assigned using specific identification of the individual costs. The cost of inventories is assigned using the first-in, first-out (FIFO) formula. The same cost formula is used for all inventories having a similar nature and use to the municipality. When inventories are transferred to beneficiaries, the carrying amounts of those inventories are recognised as an expense in the period in which the related revenue is recognised. If there is no related revenue, the expenses are recognised when the goods are distributed, or related services are rendered. The amount of any write-down of inventories to net realisable value or current replacement cost and all losses of inventories are recognised as an expense in the period the write-down or loss occurs, The amount of any reversal of any write-down of inventories, arising from an increase in net realisable value or current replacement cost, are recognised as a reduction in the amount of inventories recognised as an expense in the period in which the reversal occurs. 1.11 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 commercial return. Impairment is a loss in the future economic benefits or service potential of an asset, over and above the systematic recognition of 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 any accumulated depreciation and accumulated impairment losses thereon.

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A cash-generating unit is the smallest identifiable group of assets held with the primary objective of generating a commercial return that generates cash inflows from continuing use that are largely independent of the cash inflows from other assets or groups of assets. Costs of disposal are incremental costs directly attributable to the disposal of an asset excluding finance costs and income tax expense. 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 between knowledgeable, willing parties, less the costs of disposal. Recoverable amount of an asset or a cash-generating unit is the higher of its falr 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 follows: Cash-Generating Units If there is any indication that an asset may be impaired, the recoverable amount is estimated for the individual asset If it is not possible to estimate the recoverable amount of the individual asset. the municipality determines the recoverable amount of the cash-generating unit to which the asset belongs (the asset's cash-generating unit). If an active market exists for the output produced by an asset or group of assets. that asset or group of assets is identified as a cash-generating unit, even if some or all of the output is used internally. If the cash inflows generated by any asset or cash-generating unit are affected by internal transfer pricing, the municipality uses management's best estimate of future price(s) that could be achieved in arm's length transactions in estimating

the future cash inflows used to determine the asset's or cash-generating unit's value in use; and the future cash outflows used to determine the value in use of any other assets or cash-generating units that are affected by the internal transfer pricing.

Cash-generating units are identified consistently from period to period for the same asset or types of assets, unless a change is justified. The carrying amount of a cash-generating unit is determined on a basis consistent with the way the recoverable amount of the cash-generating unit is determined. An impairment loss is recognised for a cash-generating unit if the recoverable amount of the unit is less than the carrying amount of the unit. The impairment is allocated to reduce the carrying amount of the cash-generating assets of the unit on a pro rata basis, based on the carrying amount of each asset in the unit. These reductions in carrying amounts are treated as impairment losses on individual assets. In allocating an impairment loss, the entity does not reduce the carrying amount of an asset below the highest of:

its fair value less costs to sell (if determinable); its value in use (if determinable); and zero.

The amount of the impairment loss that would otherwise have been allocated to the asset is allocated pro rata to the other cash-generating assets of the unit. Where a non-cash-generating asset contributes to a cash-generating unit, a proportion of the carrying amount of that noncash-generating asset is allocated to the carrying amount of the cash-generating unit prior to estimation of the recoverable amount of the cash-generating unit. 1.12 Employee Benefits Employee benefits are all forms of consideration given by a municipality in exchange for services rendered by employees.

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Termination benefits are employee benefits payable as a result of either. a municipality'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) that are not due to be settled within twelve months after the end of the reporting period in which the employees render the related service. Short-Term Employee Benefits Short-term employee benefits are employee benefits (other than termination benefits) that are due to be settled within twelve months after the end of the reporting 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 alter the end of the reporting period in which the employees render the related employee service; bonus, incentive and performance related payments payable within twelve months after the end of the reporting period 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, cars and cellphones) for current employees.

When an employee has rendered a service to the municipality during a reporting period, the municipality recognises the undiscounted amount of 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 the undiscounted amount of the benefits, the municipality recognises that excess as an asset (prepaid expense) to the extent that 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 increase their entitlement or, in the case of non-accumulating absences, when the absence occurs. The municipality measures the expected cost of accumulating compensated absences as the additional amount that the municipality expects to pay as a result of the unused entitlement that has accumulated at the reporting date. The municipality recognises the expected cost of bonus, incentive and performance related payments when the municipality has a present legal or constructive obligation to make such payments as a result of past events and a reliable estimate of the obligation can be made. A present obligation exists when the municipality has no realistic alternative but to make the payments. 1.13 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 the reporting date. Where the effect of time value of money is material, the amount of a provision is the present value of the expenditures expected 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 to the liability. Where some or all of the expenditure required to settle a provision is expected to be reimbursed by another party, the reimbursement is recognised when, and only when it is virtually certain that reimbursement will be received if the municipality settles the obligation. The reimbursement is treated as a separate asset. The amount recognised for the reimbursement does not exceed the amount of the provision,

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Provisions are reviewed at each reporting date and adjusted to reflect the current best estimate Provisions are reversed 4 it is no longer probable that an outflow of resources embodying economic benefits or service potential will be required to settle the obligation. Where discounting is used, the carrying amount of a provision increases in each period to reflect the passage of time. This increase 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. Contingent assets and contingent liabilities are not recognised. Contingencies are disclosed in note 38 1.14 Revenue from Exchange Transactions Revenue is the gross inflow of economic benefits or service potential during the reporting period when those inflows result in an increase 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 directly gives 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 in an 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. Sale of Goods Revenue from the sale of goods is recognised when all the following conditions have been satisfied

the municipality has transferred to the purchaser the significant risks and rewards of ownership of the goods. the municipality retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold; the amount of revenue can be measured reliably; it is probable that the economic benefits or service potential associated with the transaction will flow to the municipality; and the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Rendering of Services When the outcome of a transaction involving the rendering of services can be estimated reliably, revenue associated with the transaction is recognised by reference to the stage of completion of the transaction at the reporting date. The outcome of a transaction can be estimated reliably when all the following conditions are satisfied:

the amount of revenue can be measured reliably; it is probable that the economic benefits or service potential associated with the transaction will flow to the municipality; the stage of completion of the transaction at the reporting date can be measured reliably; and the costs incurred for the transaction and the costs to complete the transaction can be measured reliably.

When services are performed by an indeterminate number of acts over a specified time frame, revenue is recognised on a straight line basis over the specified time frame unless there is evidence that some other method better represents the stage of completion. When a specific act is much more significant than any other acts, the recognition of revenue is postponed until the significant act is executed. When the outcome of the transaction involving the rendering of services cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that are recoverable. Service revenue is recognised by reference to the stage of completion of the transaction at the reporting date. Stage of completion is determined by services performed to date as a percentage of total services to be performed.

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Interest Revenue arising from the use by others of municipality assets yielding interest is recognised when

It is probable that the economic benefits or service potential associated with the transaction will flow to the municipality, and The amount of the revenue can be measured reliably.

Interest is recognised, in municipality's or deficit, using the effective interest rate method 1.15 Revenue from Non-Exchange Transactions Revenue comprises gross inflows of economic benefits or service potential received and receivable by the municipality, which represents an increase in net assets. Conditions on transferred assets are stipulations that specify that the future economic benefits or service potential embodied in the asset is required to be consumed by the recipient as specified or future economic benefits or service potential must be returned to the transferor. Control of an asset arises when the municipality can use or otherwise benefit from the asset in pursuit of its objectives and can exclude or otherwise regulate the access of others to that benefit. Exchange transactions are transactions in which one entity receives assets or services, or has liabilities extinguished, and directly gives approximately equal value to another entity in exchange. Fines are economic benefits or service potential received or receivable by the municipality, as determined by a court or other law enforcement 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. the municipality either receives value from another entity without directly giving approximately equal value in exchange, or gives value to another entity without directly receiving approximately equal value in exchange. Transfers are inflows of future economic benefits or service potential from non-exchange transactions, other than taxes. Recognition An inflow of resources from a non-exchange transaction recognised as an asset is recognised as revenue, except to the extent that a liability is also recognised in respect of the same inflow. As the municipality satisfies a present obligation recognised as a liability in respect of an inflow of resources from a non-exchange transaction recognised as an asset, it reduces the carrying amount of the liability recognised and recognises an amount of revenue equal to that reduction. Measurement Revenue from a non-exchange transaction is measured at the amount of the increase in net assets recognised by the municipality. When, as a result of a non-exchange transaction, the municipality recognises an asset it also recognises revenue equivalent to the amount of the asset measured at its fair value as at the date of acquisition, unless it is also required to recognise a liability. Where a liability is required to be recognised it will be measured as the best estimate of the amount required to settle the obligation at the reporting date, and the amount of the increase in net assets, if any, recognised as revenue. When a liability is subsequently reduced, because the taxable event occurs or a condition is satisfied, the amount of the reduction in the liability is recognised as revenue.

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Fines Fines are recognised as revenue when the receivable meets the definition of an asset and satisfies the critena for recognition as an asset. Assets arising from fines are measured at the best estimate of the inflow of resources to the municipality:

in full at the transaction date even if there is an uncertainty about the entity's ability to collect such revenue based on past history, as the entity has an obligation to collect all revenue due to it.

The municipality has two types of fines spot fines and summonses. There is uncertainty regarding the probability of the flow of economic benefits or service potential in respect of spot fines as these fines are usually not given directly to an offender. Further legal processes have to be undertaken before the spot fine is enforceable. In respect of summonses the public prosecutor can decide whether to waive the fine, reduce it or prosecute for non-payment by the offender. Subsequent Measurement The municipality assesses the collectability of the revenue and recognises impairment loss where appropriate. The municipality uses estimates to determine the amount of revenue that it is entitled to collect. The impairment is recognised as an expense in the statement of financial performance 1.16 Investment Income Investment income is recognised on a time-proportion basis using the effective interest rate method. 1.17 Borrowing Costs It is inappropriate to capitalise borrowing costs when, and only when there is clear evidence that it is difficult to link the borrowing 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. 1.18 Comparative Figures Where necessary, comparative figures have been reclassified to conform to changes in presentation in the current year. 1.19 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 in the period that the expenditure was incurred. The expenditure is classified in accordance with the nature of the expense, and where recovered, it is subsequently accounted for as revenue in the statement of financial performance. 1.20 Fruitless and Wasteful Expenditure Fruitless and wasteful expenditure means expenditure which was made in vain and would have been avoided had reasonable care been exercised. All expenditure relating to fruitless and wasteful expenditure is recognised as an expense in the statement of financial performance in the period that the expenditure was incurred. The expenditure is classified in accordance with the nature of the expense, and where recovered, it is subsequently accounted for as revenue in the statement of financial performance. 1.21 Irregular Expenditure Irregular expenditure is expenditure that is contrary to the Municipal Finance Management Act No. 56 of 2003, the Municipal Systems Act No. 32 of 2000, and the Remuneration of Public Office Bearers Act No. 20 of 1998 or is in contravention of the municipality's supply chain management policy. Irregular expenditure excludes unauthorised expenditure. Irregular expenditure is accounted for as expenditure in the statement of financial performance and where recovered, it is subsequently accounted for as revenue in the statement of financial performance.

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1.22 Use of Estimates The preparation of annual financial statements in conformity with the Standards of GRAP requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the municipality's accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the annual financial statements are disclosed in the relevant sections of the annual financial statements. Although these estimates are based on management's best knowledge of current events and actions they may undertake in the future, actual results ultimately may differ from those estimates. 1.23 Conditional Grants Revenue received from conditional grants, donations and funding are recognised as revenue to the extent that the municipality has complied with any of the criteria, conditions or obligations embodied in the agreement. To the extent that the criteria, conditions or obligations have not been met, a liability is recognised. 1.24 Related Parties The municipality operates in an economic sector currently dominated by entities directly or indirectly owned by the South African 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 including those charged with the governance of the municipality in accordance with legislation, in instances where they are required to perform such functions. Close members of the family of a person are considered to be those family members who may be expected to influence, or be influenced by, 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. 1.25 Valued Added Tax The municipality accounts for value added tax on accrual basis but pays over to /claims from SARS on a payment basis. 1.26 Expenditure Expenses are decreases in economic benefits or service potential during the reporting period in the form of outflows or consumption of assets or incurrences of liabilities that result in decreases in net assets. An expense is recognised in the municipality's statement of financial performance when, and only when the goods .are received and or services consumed. Where an item possesses the essential characteristics of an expense but fails to meet the criteria for recognition it is disclosed in the note. Where an outflow of economic benefits does not result in future benefits, it is disclosed as fruitless and wasteful expenditure. The point at which an expense is recognised is dependent on the nature of the transaction or other event that gives rise to the expense. Where future economic benefits are consumed immediately or soon after acquisition, for example, repairs and maintenance expenditure, bulk purchases and general expenses, the expense is recognised in the reporting period in which the acquisition of the future economic benefit occurs. Where future economic benefits are expected to be consumed over several reporting periods e.g. non-current assets, expenses (depreciation) are allocated systematically to the reporting period during which the future economic benefits are expected to be consumed; where expenditure produces no future economic benefits e.g. fines paid, an expense is recognised immediately; and where a liability is incurred without the recognition of an asset an expense is recognised simultaneously with the recognition of the liability. Generally, expenses are accounted for on an accrual basis at fair value. Under the accrual basis of accounting expenses are recognised when incurred usually when goods are received or services are consumed. This may not be when the goods or services are actually paid for. Fair value is the amount for which an asset could be exchanged or a liability settled between knowledgeable willing parties in an arm's length transaction. Major expenses include: - Repairs and Maintenance - inclusive of repairs and maintenance to buildings, infrastructure assets, motor vehicles and sports and

recreational facilities; - Other Expenditure which constitute several expense items which are not individually significant and

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- Losses on the disposal of assets are reported separately from expenses on the Statement of Financial Performance. 1.27 Budget Information Municipalities are typically subject to budgetary limits in the form of appropriations or budget authorisations (or equivalent). which is given effect through authorising legislation, appropriation or similar. General purpose financial reporting by the municipality shall provide information on whether resources were obtained and used in accordance with the legally adopted budget. The approved budget is prepared on an accrual basis and presented by economic classification linked to performance outcome objectives. The approved budget covers the fiscal period from 2015/07/01 to 2016/06/30. The annual financial statements and the budget are on the same basis of accounting therefore a comparison with the budgeted amounts for the reporting period have been included in the statement of comparison of budget and actual amounts. The statement of comparison of budget and actual amounts has been included in the annual financial statements as the recommended disclosure when the annual financial statements and the budget are on the same basis of accounting as determined by National Treasury

111

NGQUSHWA LOCAL MUNICIPALITY (Registration number EC126) Annual Financial Statements for the Year Ended 30 June 2016 NOTES TO THE ANNUAL FINANCIAL STATEMENTS NOTES TO THE ANNUAL FINANCIAL STATEMENTS

2016

R

2015 Restated

R 2. NEW STANDARDS AND INTERPRETATIONS 2.1 Standards and interpretations issued, but not yet effective 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 2016 or later periods: GRAP 18: Segment Reporting Segments are identified by the way in which information is reported to management, both for purposes of assessing performance and making decisions about how future resources will be allocated to the various activities undertaken by the municipality. The major classifications of activities identified in budget documentation will usually reflect the segments for which an entity reports information to management. Segment information is either presented based on service or geographical segments. Service segments relate to a distinguishable component of an entity that provides specific outputs or achieves particular operating objectives that are in line with the municipality's overall mission. Geographical segments relate to specific outputs generated, or particular objectives achieved, by an entity within a particular region. This Standard has been approved by the Board but its effective date has not yet been determined by the Minister of Finance. The effective date indicated is a provisional date and could change depending on the decision of the Minister of Finance. Directive 2 - Transitional provisions for public entities, municipal entities and constitutional institutions states that no comparative segment information need to be presented on initial adoption of this Standard, Directive 3 - Transitional provisions for high capacity municipalities states that no comparative segment information need to be presented on initial adoption of the Standard. Where items have not been recognised as a result of transitional provisions under GRAP on Property, Plant and Equipment, recognition requirements of this Standard would not apply to such items until the transitional provision in that Standard expires. Directive 4 - Transitional provisions for medium and low capacity municipalities states that no comparative segment information need to be presented on initial adoption of the Standard. Where items have not been recognised as a result of transitional provisions on the GRAP on Property, Plant and Equipment and GRAP on Agriculture, the recognition requirements of the Standard would not apply to such items until the transitional provision in that standard expires. The effective date of the standard is not yet set by the Minister of Finance. The municipality expects to adopt the standard for the first time when the Minister sets the effective date for the standard. it is unlikely that the standard will have a material impact on the municipality's annual financial statements. GRAP 20: Related parties The objective of this standard is to ensure that a reporting entity's annual financial statements contain the disclosures necessary to draw attention to the possibility that its financial position and surplus or deficit may have been affected by the existence of related parties and by transactions and outstanding balances with such parties. An entity that prepares and presents financial statements under the accrual basis of accounting (in this standard referred to as the reporting entity) shall apply this standard in:

identifying related party relationships and transactions; identifying outstanding balances, including commitments, between an entity and its related parties. identifying the circumstances in which disclosure of the items in (a) and (b) is required, and determining the disclosures to be made about those items.

This standard requires disclosure of related party relationships, transactions and outstanding balances, including commitments, in the consolidated and separate financial statements of the reporting entity in accordance with the standard.

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NGQUSHWA LOCAL MUNICIPALITY (Registration number EC126) Annual Financial Statements for the Year Ended 30 June 2016 NOTES TO THE ANNUAL FINANCIAL STATEMENTS 2. NEW STANDARDS AND INTERPRETATIONS (continued) Disclosure of related party transactions, outstanding balances, including commitments, and relationships with related parties may affect users' assessments of the financial position and performance of the reporting entity and its ability to deliver agreed services, including assessments of the risks and opportunities facing the entity. This disclosure also ensures that the reporting entity is transparent about its dealings with related parties. The standard states that a related party is a person or an entity with the ability to control or jointly control the other party, or exercise significant influence over the other party, or vice versa, or an entity that is subject to common control, or joint control. As a minimum, the following are regarded as related parties of the reporting entity:

A person or a close member of that person's family is related to the reporting entity if that person: - has control or joint control over the reporting entity; - has significant influence over the reporting entity; - is a member of the management of the entity or its controlling entity. An entity is related to the reporting entity if any of the following conditions apply: - the entity is a member of the same economic entity (which means that each controlling entity, controlled entity and fellow controlled

entity is related to the others); - one entity is an associate or joint venture of the other entity (or an associate or joint venture of a member of an economic entity of

which the other entity is a member); both entities are joint ventures of the same third party;

- one entity is a joint venture of a third entity and the other entity is an associate of the third entity; - the entity is a post-employment benefit plan for the benefit of employees of either the entity or an entity related to the entity, if the

reporting entity is itself such a plan, the sponsoring employers are related to the entity; - the entity is controlled or jointly controlled by a person identified in (a); and - a person identified in (a)(1) has significant influence over that entity or is a member of the management of that entity (or its

controlling entity). The standard furthermore states that a related party transaction is a transfer of resources, services or obligations between the reporting entity and a related party, regardless of whether a price is charged. The standard elaborates on the definitions and identification of:

Close member of the family of a person, Management; Related parties; Remuneration; and Significant influence.

The standard sets out the requirements, inter alia, for the disclosure of:

Control; Related party transactions; and Remuneration of management.

The effective date of the standard is not yet set by the Minister of Finance. The municipality expects to adopt the standard for the first time when the Minister sets the effective date for the standard. The adoption of this standard is not expected to impact on the results of the municipality, but may result in more disclosure than is currently provided in the annual financial statements. GRAP 32: Service Concession Arrangements: Grantor The objective of this Standard is to prescribe the accounting for service concession arrangements by the grantor, a public sector entity. It furthermore covers definitions, recognition and measurement of a service concession asset, recognition and measurement of liabilities, other liabilities, contingent liabilities, and contingent assets, other revenues, presentation and disclosure, transitional provisions, as well as the effective date. The effective date of the standard is not yet set by the Minister of Finance. The municipality expects to adopt the standard for the first time when the Minister set the effective date for the standard

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NGQUSHWA LOCAL MUNICIPALITY (Registration number EC126) Annual Financial Statements for the Year Ended 30 June 2016 NOTES TO THE ANNUAL FINANCIAL STATEMENTS 2. NEW STANDARDS AND INTERPRETATIONS (continued) It is unlikely that the standard will have a material impact on the municipality's annual financial statements. GRAP 108: Statutory Receivables The objective of this Standard is to prescribe accounting requirements for the recognition, measurement, presentation and disclosure of statutory receivables. It furthermore covers definitions, recognition, derecognition, measurement, presentation and disclosure, transitional provisions, as well as the effective date. The effective date of the standard is not yet sets by the Minister of Finance. The municipality expects to adopt the standard for the first time when the Minister sets the effective date for the standard. It is unlikely that the standard will have a material impact on the municipality's annual financial statements. IGRAP 17: Service Concession Arrangements where a Grantor Controls a Significant Residual Interest in an Asset This Interpretation of the standard provides guidance to the grantor where it has entered into a service concession arrangement, but only controls, through ownership, beneficial entitlement or otherwise, a significant residual interest in a service concession asset at the end of the arrangement, where the arrangement does not constitute a lease. This Interpretation of the standards shall not be applied by analogy to other types of transactions or arrangements A service concession arrangement is a contractual arrangement between a grantor and an operator in which the operator uses the service concession asset to provide a mandated function on behalf of the grantor for a specified period of time. The operator is compensated for its services over the period of the service concession arrangement, either through payments, or through receiving a right to earn revenue from third party users of the service concession asset, or the operator is given access to another revenue-generating asset of the grantor for its use. Before the grantor can recognise a service concession asset in accordance with the standards on service concession Arrangements: Grantor, both the criteria as noted in paragraph 01 of this Interpretation of the Standards of GRAP need to be met. In some service concession arrangements, the grantor only controls the residual interest in the service concession asset at the end of the arrangement, and can therefore not recognise the service concession asset in terms of the Standard of GRAP on Service Concession Arrangements: Grantor. A consensus is reached, in this Interpretation of the Standards of GRAP, on the recognition of the performance obligation and the right to receive a significant interest in a service concession asset. The effective date of the standard is not yet set by the Minister of Finance. The municipality expects to adopt the standard for the first time when the Minister set the effective date for the standard. It is unlikely that the standard wig have a material impact on the municipality's annual financial statements. GRAP 16 (as amended 2015): Investment Property Based on the feedback received as part of the post-implementation review, the Board agreed to reconsider certain principles in GRAP 16 and GRAP 17. In particular, the Board agreed to

Review the principles and explanations related to the distinction between investment property and property, plant and equipment. Consider whether an indicator-based assessment of useful lives of assets could be introduced. Clarify the wording related to the use of external valuers. Introduce more specific presentation and disclosure requirements for capital work-in-progress. Review the encouraged disclosures and assess whether any should be made mandatory or deleted. Require separate presentation of expenditure incurred on repairs and maintenance in the financial statements.

Various amendments were made to the Standard, affecting Definitions, Identification, Disclosure, Effective date and Transitional provisions.

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NGQUSHWA LOCAL MUNICIPALITY (Registration number EC126) Annual Financial Statements for the Year Ended 30 June 2016 NOTES TO THE ANNUAL FINANCIAL STATEMENTS 2. NEW STANDARDS AND INTERPRETATIONS (continued) The effective date of the standard is for years beginning on or after 01 April 2016. The municipality expects to adopt the standard for the first time in the 2017 annual financial statements. It is unlikely that the standard will have a material impact on the municipality's annual financial statements. GRAP 17 (as amended 2015): Property, Plant and Equipment Based on the feedback received as part of the post-implementation review, the Board agreed to reconsider certain principles in GRAP 16 and GRAP 17. In particular, the Board agreed to:

Review the principles and explanations related to the distinction between investment property and property, plant and equipment. Consider whether an indicator-based assessment of useful lives of assets could be introduced. Clarify the warding related to the use of external valuers. Introduce more specific presentation and disclosure requirements for capital work-in-progress. Review the encouraged disclosures and assess whether any should be made mandatory or deleted Require separate presentation of expenditure incurred on repairs and maintenance in the financial statements

Amendments identified as part of the post-implementation review, affected the following areas

Indicator-based assessment of the useful lives of assets Use of external valuers Encouraged disclosures Capital work-in-progress Expenditure incurred on repairs and maintenance

The effective date of the standard is for years beginning on or after 01 April 2016. The municipality expects to adopt the standard for the first time in the 2017 annual financial statements. It is unlikely that the standard will have a material impact on the municipality's annual financial statements. GRAP 109: Accounting by Principals and Agents The objective of this Standard is to outline principles to be used by an entity to assess whether it is party to a principal-agent arrangement, and whether it is a principal or an agent in undertaking transactions in terms of such an arrangement. The Standard does not introduce new recognition or measurement requirements for revenue, expenses, assets and/or liabilities that result from principal-agent arrangements. The Standard does however provide guidance on whether revenue, expenses, assets and/or liabilities should be recognised by an agent or a principal as well as prescribe what information should be disclosed when an entity is a principal or an agent. It furthermore covers definitions, identifying whether an entity is a principal or agent, accounting by a principal or agent, presentation, disclosure, transitional provisions and effective date. The effective date of the standard is not yet set by the minister of finance. The municipality expects to adopt the standard for the first time when the Minister sets the effective date for the standard. It is unlikely that the standard will have a material impact on the municipality's annual financial statements. GRAP 21 (as amended 2015): Impairment of Non-Cash-Generating Assets The Board agreed to include a research project on its work programme to review GRAP 21 and GRAP 26 to assess whether the principles in these Standards could be simplified and streamlined. As part of its research project, the Board considered the following aspects which led to the proposed amendments included in this Exposure Draft

simplifying the approach to Impairment to make it clearer when an asset is cash generating or non-cash-generating; assessing the feasibility of one measurement approach for non-cash-generating assets; and assessing the feasibility of combining the two Standards.

115

NGQUSHWA LOCAL MUNICIPALITY (Registration number EC126) Annual Financial Statements for the Year Ended 30 June 2016 NOTES TO THE ANNUAL FINANCIAL STATEMENTS 2. NEW STANDARDS AND INTERPRETATIONS (continued) Summary of changes: The changes to the standard on impairment of non-cash-generating assets are outlined below. General definitions: The definition of cash-generating assets has been amended to be consistent with the amendments made to clarify the objective of cash-generating assets and non-cash-generating assets. Cash generating assets and non-cash-generating assets: Additional commentary has been added to clarify the objective of cash-generating assets and non-cash-generating assets. Identifying an asset that may be impaired: Additional commentary has been added to clarify that physical damage triggers impairment of an asset when it results in a permanent or a significant decline in the potential of an asset. Reversing an impairment loss: An indicator has been added that the restoration of an asset's service potential following physical damage to the asset could indicate a reversal in an impairment loss. Additional commentary has been added to clarify that restoration of an asset's service potential as a result of physical damage is an indication that an impairment loss recognised in prior periods may no longer exist or may have decreased. Disclosures: The requirement to disclose the criteria developed to distinguish non-cash-generating assets from cash-generating assets has been amended to be consistent with the amendments made to clarify the objective of non-cash-generating assets and cash-generating assets. The effective date of the standard is for years beginning on or after 01 April 2017. The municipality expects to adopt the standard for the first time in the 2018 annual financial statements. It Is unlikely that the standard will have a material impact on the municipality's annual financial statements. GRAP 26 (as amended 2015): Impairment of Cash-Generating Assets The Board agreed to include a research project on its work programme to review GRAP 21 and GRAP 26 to assess whether the principles in these Standards could be simplified and streamlined. As part of its research project, the Board considered the following aspects which led to the proposed amendments included in this Exposure Draft:

simplifying the approach to impairment to make it clearer when an asset is cash generating or non-cash-generating. assessing the feasibility of one measurement approach for non-cash-generating assets; and assessing the feasibility of combining the two Standards.

Summary of changes The changes to the Standard of GRAP on impairment of Cash-generating Assets are outlined below General definitions The definitions of cash-generating assets and cash-generating unit have been amended to be consistent with the amendments made to clarify the objective of cash-generating assets and non-cash-generating assets below.

116

NGQUSHWA LOCAL MUNICIPALITY (Registration number EC126) Annual Financial Statements for the Year Ended 30 June 2016 NOTES TO THE ANNUAL FINANCIAL STATEMENTS 2. NEW STANDARDS AND INTERPRETATIONS (continued) Cash generating assets and non-cash-generating assets: Additional commentary has been added to clarify the objective of cash-generating assets and non-cash-generating assets. Disclosures: The requirement to disclose the criteria developed to distinguish cash-generating assets from non-cash-generating assets has been amended to be consistent with the amendments made to clarify the objective of non-cash-generating assets and cash-generating assets. The effective date of the standard is for years beginning on or after 01 April 2017. The municipality expects to adopt the standard for the first time in the 2018 annual financial statements. It is unlikely that the standard will have a material impact on the municipality's annual financial statements. Directive 12: The Selection of an Appropriate Reporting Framework by Public Entities Historically, public entities have prepared financial statements in accordance with generally recognised accounting practice, unless the Accounting Standards Board (the Board) approved the application of generally accepted accounting practice for that entity. "Generally accepted accounting practice" has been taken to mean Statements of Generally Accepted Accounting Practice (Statements of GAAP), or for certain entities, International Financial Reporting Standards (IFRSs) issued by the International Accounting Standards Board. Since Statements of GAAP have been withdrawn from 1 December 2012, public entities will be required to apply another reporting framework in the future. The purpose of this Directive is to prescribe the criteria to be applied by public entities in selecting and applying an appropriate reporting framework. The effective date of the standard is for years beginning on or after 01 April 2018. The municipality expects to adopt the standard for the first time in the 2019 annual financial statements. It is unlikely that the standard will have a material impact on the municipality's annual financial statements.

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NGQUSHWA LOCAL MUNICIPALITY (Registration number EC126) Annual Financial Statements for the Year Ended 30 June 2016 NOTES TO THE ANNUAL FINANCIAL STATEMENTS

2016

R

2015 Restated

R

INVENTORIES Land to be transferred to beneficiaries 268,800 268,800 Inventories comprise of land on which RDP houses are constructed and are awaiting transfer to the beneficiaries. A register of these properties is maintained by the municipality. OPERATING LEASE ASSET Leases for Land 67.602 93 650 The municipality lets land to tenants under leases covering periods ranging from 3 - 30 years. The leases are subject to escalation clauses as per the lease agreement resulting in straight lining of the rentals received and receivable. The amount included above represents the difference between the actual rentals received and the calculated straight line lease. The amount of the commitment arising from the operating leases is covered under note 37 of these annual financial statements. 5, VAT RECEIVABLE VAT Input Provision 1,885,080 3,265,649 VAT Output Provision (157,157) (165,061) VAT Receivable from SARS 2,238,250 1,357,947 3,966,173 4,458,535 6. RECEIVABLES FROM EXCHANGE TRANSACTIONS Gross Balances Refuse 1,011,622 1,223,875 Rent 202,075 30,178 Interest on Overdue Accounts 9,861,451 4.171,412 11,075,148 5,425,465 Less: Allowance for impairment Refuse (296,600) (625,059) Rent (59,247) (14,882) Interest on Overdue Accounts (2,891,302) (2,073,607) (3,247,149) (2,713,548) Net Balance Refuse 715,022 598,816 Rent 142,828 15,296 Interest on Overdue Accounts 6,970,149 2,097,805 7,827,999 2,711,917 Refuse 0 - 30 days 45.714 6,559 31 - 60 days 41,399 38,344 61 - 90 days 43,074 23,713 91 -120 days 23.940 33,455 121 - 150 days 21,888 28,233 Over 151 days 535,607 1,093,571 1 ,011,622 1,223,875

118


2016

R

2015 Restated

R

Rent 0 - 30 days 133.156 5,285 31 - 60 days 9.993 5,285 61 - 90 days 8,737 900 91 - 120 days 4 890 900 121 -150 days 795 900 Over 151 days 44,504 16,908 202,075 30,178 Interest on Overdue Accounts

0 - 30 days 540,659 - 31 - 60 days 565,686 - 61 - 90 days 541,622 (4,280) 91 -120 days 539,328 - 121 -150 days 523,696 291,133 Over 151 days 7,150,460 3,884,559 9,861,451 4,171,412 7. RECEIVABLES FROM NON-EXCHANGE TRANSACTIONS

Property Rates 21,831,100 19.494,034 Less: Impairment on Property Rates (6,400,710) (9,688,409) Other Receivables 5,630,996 3,716,423 21,061,386 13,522,048 Property Rates 0 - 30 days 2,752,979 658,667 31 - 60 days 114,936 603.948 61 - 90 days 1,028,560 1 043.633 91 -120 days 121,442 28,763 121 -150 days 1,810,703 123,433 Over 151 days 16,002,480 17,035,590 21,831,100 19,494,034 Summary of Total Debtors (Exchange and Non-Exchange) by Customer Classification

Residential

0 - 30 days 1,289,888 134,819 31 - 60 days 182,391 70,922 61 -90 days 224,789 93,162 91 - 120 days 166,690 72,425 121 -150 days 163,025 98,441 Over 151 days 4,424,084 3,770,434 6,450,867 4,240,203 Less. Allowance for Impairment (4,211,741) (3,566,108) 2,239,126 674,095

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2016

R

2015 Restated

R

Business 0 - 30 days 162,005 79,804 31 - 60 days 155,215 49,756 61 - 90 days 112,204 43,838 91 -120 days 117,509 53,370 121 -150 days 85,860 53,803 Over 151 days 2,526,364 1,724,527 3,159,157 2,005,098 Less Allowance for Impairment (1,619,951) (1,093,026) 1,539,206 912,072 Government

0 - 30 days 1,155,462 111,524 31 - 60 days 294,007 114,673 61 -90 days 1,181,192 84,728 91 -120 days 307,906 44,128 121 - 150 days 2,020,072 102,648 Over 151 days 12,984,707 8,985,954 17,943,346 9,443,655 Other

0 - 30 days 865,154 191,576 31 - 60 days 100,400 124,476 61 - 90 days 103,807 (13,334) 91 -120 days 97,495 92,671 121 -150 days 88,125 179,747 Over 151 days 4,097,896 8,655,407 5,352,877 9,230,543 Less. Allowance for Impairment (3,816,166) (7,742,824) 1,536,711 1,487,719

0 - 30 days 1,155,462 111,524 31 - 60 days 294,007 114,673 61 -90 days 1,181,192 84,728 91 - 120 days 307,906 44,128 121 -150 days 2,020,072 102,648 Over 151 days 12,984,707 8,985,953 17,943,346 9,443,654 Reconciliation of Provision for Impairment Opening Provision for Impairment 12,401,958 10,514,046 Movement of Provision for Impairment Current Year (2,754,099) 1,887,912 Debtors written off by Council 4,717,344 - Contribution to Impairment (4,717,344) - 9,647,859 12,401,958 TOTAL DEBTORS (EXCHANGE AND NON-EXCHANGE) Balance Net of Credit Balances 22,407,777 11,282,267 Gross Up of Credit Balances 850,612 1,235,275 Other Receivables 5,630,996 3,716,423

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2016

R

2015 Restated

R

28,889,385 16,233,965 8. CASH AND CASH EQUIVALENTS Cash and cash equivalents consist of: Cash on Hand 823 823 Bank Balances 662,254 125,834 Investments 537,730 36,974 1,200,807 163,631 The Municipality had the Following Bank Accounts:

Account number/ description Bank Statement Balances Cash Book Balances 30 June 2016 30 June 2015 30 June 2014 30 June 2016 30 June 2015 30 June 2014 FNB Main Account - 62022000898 662,254 125,834 232, 773 662,254 125, 834 229,373 FNB Call Account : Planning - 61684000098 - - 99,771 - - 99.771 FNB Call Account Reserve Fund - 62035920596 1,767 1,749 66,373 1,767 1.749 66,373 FNB Equitable Share - 62270666616 - - 29,784 - - 29,784 FNB MIG Account - 622770667531 12,260 1,000 6,962 123 12,260 1,000 6,962,123 FNB Small Town Call Account - 62352053301 - - 1 092 - - 1,092 FNB MSIG Account - 62414340894 - - 1,295 - - 1,295 FNB Rates Account - 62414349763 504,656 31,503 111,113 504,656 31,503 111,113

FNB FMG - 62414356594 - - 272,091 - - 272,091 FNB EPWP Call Account - 62414353293 - - (196) - - (196) FNB EPWP - 62414353441 963 1,005 1.048 963 1 005 9.625 FNB Salary Account - 62434762945 - - 477,937 - - 477 936 FNB MIG Operating Account 62437745857 - - 56,279 - - 56 279 FNB MSIG Operating Account - 62437829213 - - 766 - - 766 FNB FMG Operating Account - 62414358912 1,734 1,717 55,003 1,734 1,717 55,003

FNB MIG - 82270667531 - - - - - Cash on Hand - - - 823 823 201 FNB Call Account PHP - 62048047494 - - 245,719 - - 245,719 FNB Call Account (Short-Term Investment) - 62606330463 16,350 16,350

Total 1,199,984 162,808 8,612,971 1,200,807 163,631 8,618,348

9. INTANGIBLE ASSETS 2016 2015

Cost

Accumulated amortisation

and impairment

Carrying value Cost

Accumulated amortisation

and impairment

Carrying value

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2016

R

2015 Restated

R

Computer Software 1,569,514 (1,003,643) 565,871 1,569,514 (603,997) 965,517 Reconciliation of Intangible Assets - 30 June 2016

Opening balance Amortisation Impairment

loss Total

Computer Software 965,517 (284 903) (114,743) 565,871

Reconciliation of Intangible Assets - 30 June 2015 Opening

balance Additions Amortisation Total

Computer Software 1,206,634 64,745 (305,862) 965,517 The municipality amortises all its intangible assets and none of these are regarded as having indefinite useful lives. The useful lives of the intangible assets remain unchanged from the previous year. Impairment loss amounting to R 114 743 have been recognised on the intangible assets of the municipality at the reporting date. 10. INVESTMENT PROPERTY 2016 2015

Cost / Valuation Carrying value Cost / Valuation Carrying value

Investment Property 37,951,900 37,951,900 37,951,900 37,951,900 Reconciliation of Investment Property - 30 June 2016

Opening balance

Closing Balance

Investment Property 37 951,900 37,951 900 Reconciliation of Investment Property - 30 June 2015

Opening Balance

Prior year adjustment

Closing Balance

Investment Property 37,976 900 (25,000) 37,951.900

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2016

R

2015 Restated

R

10. INVESTMENT PROPERTY (continued) Details of Property Erf 2220 Peddie - Land Extent 4340 square meter Land is leased to Engen Petroleum - Cost at acquisition 2,888,000 2,888,000 Erf 447 Hamburg - Land Extent 2824hq Portion of the Caravan Park Leased to Mrs Dorego. - Cost at acquisition 2,050,000 2,050,000 Ed 314 - Land extent 989 square meters Land Leased to ANC Constituency - Cost at acquisition 91,400 91,400 Ed 1836 - Land extent 488 square meters Land Leased to IEC - Cost at acquisition 556,700 556,700 All the municipality's properties are held under freehold interest and no investment property has been pledged as security for any liabilities of the municipality. There are no restrictions on the realisation of Investment Property or the remittance of revenue and the proceeds of disposal. Valuation of investment property was done by Penny Lindstrom Valuations in 2013, an independent valuer. The valuation, which conforms to international standards, was arrived at by reference to market evidence of transaction prices for similar properties. Valuation is performed every four years and the 4 years have not yet elapsed, therefore the properties have not been revalued. At the end of the period, these properties were generating an average monthly income of R 17 989 (2015 - R 15 266). 11. PROPERTY, PLANT AND EQUIPMENT 2016 2015

Cost Accumulated

depreciation and

impairment Carrying value

Cost Accumulated depreciation

and impairment

Carrying value

Land 7,743,600 - 7,743,600 7,743,600 - 7,743,600 Buildings 69,982,102 (12,024,277) 57,957,825 65,372,404 (9.708,791) 55,663,613 Park Facilities 10,859,516 (1,322,342) 9,537,174 9,215,477 (2,018,862) 7,196,615 Infrastructure 114,141,924 (75,747,561) 38,394,363 104,092,434 (67.527,626) 36,564,808 Other Equipment 168,469 (131,583) 36,886 163,435 (121,373) 42,062 Work in Progress 28,320,369 28,320,369 21,716,413 - 21,716,413 Plant and Machinery 19,529,194 (4,944,888) 14,584,306 15,678,121 (4,254,264) 11,423,857 Maintenance Equipment 346,256 (181,403) 164,853 354,848 (228,848) 126,000 Security Equipment 549,785 (380,675) 169,110 549,785 (320,943) 228,842 Motor Vehicles 8,473,771 (3,244,388) 5,229,383 7,411,800 (2,753,057) 4,658,743 Office Equipment 1,255,526 (702,845) 552,681 1,129,161 (598,284) 530,877 Computer Equipment 1,969,351 (1,409,841) 559,510 1,826,124 (1,336,543) 489,581 Furniture and Fixtures 1,499,589 (1,334,416) 165,173 1,476,289 (1,191,092) 285,197 Minor Assets 1,622,352 (1,622,352) - 1,486,391 (1,486,391) - Total 266,461,804 (103,046,571) 163,415,233 238,216,282 (91,546,074) 146,670,208

123

NGQU

SHW

A LO

CAL

MUNI

CIPA

LITY

(R

egist

ratio

n num

ber E

C126

) An

nual

Finan

cial S

tatem

ents

for th

e Yea

r End

ed 30

June

2016

NO

TES

TO T

HE A

NNUA

L FI

NANC

IAL

STAT

EMEN

TS

20

16

R

2015

Re

stat

ed R

11.

PROP

ERTY

, LAN

D AN

D EQ

UIPM

ENT

(con

tinue

d)

Reco

ncilia

tion

of P

rope

rty, P

lant a

nd E

quip

men

t – 30

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2016

Oper

atio

n ba

lance

Ad

ditio

n Fi

nanc

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ase

Addi

tions

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spos

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Tran

sfer

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turn

to

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or

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eciat

ion

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talis

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to P

rojec

ts

Depr

eciat

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t To

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7,7

43,60

0 -

- -

- -

- -

- 7,7

43,60

0 Bu

ilding

s 55

,663,6

13

- -

- 4,6

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8 -

- (2

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- 57

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Facil

ities

7,196

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(154

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(8,21

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her E

quipm

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- 36

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k in P

rogr

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0,369

Pl

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11,42

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27

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(55,1

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) (3

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) -

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Secu

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228,8

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tor V

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(911

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(81,8

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5,229

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e Equ

ipmen

t 53

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t 48

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44

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-

(2,69

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and F

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97

25,70

0 -

(228

) -

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(145

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-

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r Ass

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- 20

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-

- -

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(206

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8 27

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(con

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2015

124

NGQU

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MUNI

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(R

egist

ratio

n num

ber E

C126

) An

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tatem

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for th

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r End

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3,330

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- 84

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(22,3

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8 Pl

edge

d as

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urity

Inc

luded

in pl

ant a

nd m

achin

ery a

re le

ased

asse

ts wi

th the

carry

ing am

ount

of R1

4 217

732 (

2015

– R1

1 230

589)

Th

e lea

sed a

ssets

are h

eld as

a se

curity

by th

e fina

ncier

. Inc

luded

in th

e Infr

astru

cture

is an

amou

nt for

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fill S

ite w

ith a

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lue of

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0 870

(201

5 – R

162 6

54)

125


2016

R

2015 Restated

R

12. HERITAGE ASSETS 2016 2015

Cost

Accumulated Impairment

losses

Carrying value

Cost

Accumulated Impairment

losses

Carrying value

Historical Monuments 3 - 3 3 - 3 Reconciliation of Heritage Assets - 30 June 2016 Opening balance Total Historical Monuments 3 3

Opening balance

Prior Year Adjustment Total

Historical Monuments 2 1 3 All the municipality's heritage assets are held under a freehold interest and no heritage asset have been pledged as security for any liabilities of the municipality. The heritage assets comprise of the Dick King Memorial Site, a Fingo Milkwood Tree and Fort Peddie Tower Complex. These are not income generating assets and shown on the face of the statement of financial position at a nominal value of R1 each. No impairment losses have been recognised on the heritage assets of the municipality at the reporting date. These heritage assets have not been revalued due to them not generating any economic benefit for the municipality as a result valuing the assets will not yield any economic benefit for the municipality as the costs of valuing are higher than the benefit derived from these assets.

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13. FINANCE LEASE OBLIGATION Minimum lease payments due

- within one year 8.609,460 5,082,222 - in second to fifth year inclusive 8,609,460 3,388,150 17,218,920 8,470,372 Less: Future Finance Charges (5,437,108) (1,173.517) 11,781,812 7,296,855 Present Value of Minimum Lease Payments Due - within one year 4,761,551 4,121,498 - in second to fifth year inclusive 7,020,261 3,175,357 11,781,812 7,296,855 Non-Current Liablities 7,020,261 3,175,357 Current Liabilities 4.761,551 4,121,498 11,781,812 7,296,855 It is the municipality's policy to lease certain plant under a finance lease

The municipality's obligations under finance leases are secured by the lessor's charge over the leased assets with a carrying value of R 14 217 732 (2015 - R 11 230 589). The lease term is 3 years at a fixed borrowing rate of 9.25% linked to prime rate prevalent at the inception of the lease on 01 July 2015. Leases have fixed repayment terms. No arrangements have been entered into for contingent rent. 14. PAYABLES FROM EXCHANGE TRANSACTIONS

Trade Payables 19,781,207 16,614,932Accrued Bonus 2,474,905 1,050,097Accrued Leave Pay 3,012,453 2,483,282Retentions 931,940 571,877 26,200,505 20,720,188 Included in trade and other payables is a balance for Amathole District Municipality amounting to R 15 020 192 (2015 – R 20 712 806). 15. UNSPENT CONDITIONAL GRANTS There are no unspent conditional grants in the current and prior year.

16. PAYABLES FROM NON-EXCHANGE TRANSACTIONS

Unallocated Deposit 1,000,100 1,000.100

Receivables with Credit Balances 850,612 1.235.275 1,850,712 2,235,375 Unallocated deposit refers to funds which the Municipality received in the 2012/13 financial period but could not allocate as the source of the funds nor their purpose could not be established. To date, the purpose of the funds has not been ascertained although the source was found to be the Department of Roads.

127

NGQU

SHW

A LO

CAL

MUNI

CIPA

LITY

(R

egist

ratio

n num

ber E

C126

) An

nual

Finan

cial S

tatem

ents

for th

e Yea

r End

ed 30

June

2016

NO

TES

TO T

HE A

NNUA

L FI

NANC

IAL

STAT

EMEN

TS

20

16

R

2015

Re

stat

ed R

17. P

ROVI

SION

S

Reco

ncilia

tion

of P

rovis

ions

– 30

June

2016

Op

enin

g Ba

lance

Ad

ditio

ns

Utilis

ed d

urin

g th

e yea

r Ch

ange

in

disc

ount

fact

or

Tota

l

Prov

ision

for R

ehab

ilitati

on of

Land

fill S

ites

118,8

11

- -

3,420

18

5,231

Pr

ovisi

on fo

r Lon

g Ser

vice A

ward

s

2,3

09,00

0 62

6,000

(2

72,00

0)

- 2,6

63,00

0

2,490

,811

626,0

00

(272

,000)

3,4

20

2,848

,231

Reco

ncilia

tion

of P

rovis

ions

– 30

June

2016

Op

enin

g Ba

lance

Ad

ditio

ns d

urin

g th

e yea

r Ut

ilised

dur

ing

the y

ear

Actu

al Ga

ins

Chan

ge in

di

scou

nt fa

ctor

Ad

just

men

t to

open

ing

liabi

lity

Tota

l

Prov

ision

for R

ehab

ilitati

on of

Land

fill S

ites

178,4

66

- -

- 3,3

45

- 18

1,811

Pr

ovisi

on fo

r Lon

g Ser

vice A

ward

s 1,8

46,72

4 45

8,000

(2

78,00

0)

(191

,000)

-

473,2

76

2,309

,000

2,0

25,19

0 45

8,000

(2

78,00

0)

(191

,000)

3,3

45

473,2

76

2,490

,811

Reha

bilit

atio

n of

Lan

dfill

Site

s Pro

visio

n Th

e Pro

vision

for R

ehab

ilitati

on of

Land

fill S

ites r

elates

to th

e leg

al ob

ligati

on to

reha

bilita

te lan

dfill s

ites u

sed f

or w

aste

disp

osal.

It is

calcu

lated

as th

e pre

sent

value

of th

e futu

re ob

ligati

on. T

he am

ount

for th

e pr

ovisi

on w

as ad

justed

in ac

cord

ance

with

the r

epor

t pro

duce

d by q

ualifi

ed en

ginee

rs fro

m the

Dep

artm

ent o

f Loc

al Go

vern

ment.

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2016

R

2015 Restated

R

17. PROVISIONS (continued) Long Service Award Provision The Long Service Award is payable after every 5, 10, 15, 20 25 years of continuous service. The provision is an estimate of the amounts likely to be paid based on an actuarial valuation performed at the reporting date. The actuarial valuation of the long service awards accrued liability was carried out by ZAQ Consultants and Actuaries. The assumptions used in the valuation are outlined below: Key Assumptions 1. Salary increase rate of 6%. 2. The mortality rate of SA 85 - 90. 3. Normal retirement age of 65 years. 4. The discount rate used was yield curve as at 30 June 2016 as supplied by the Johannesburg Stock Exchange 18. ACCUMULATED SURPLUS Included in the accumulated suprlus is an amount of R 2 624 709 which relates to transactions that were posted against the Accumulated Surplus account in the current year of assessment. These include amounts that should have been transacted in the prior years into their respective income and expense accounts. These include and are not limited to the following: - Billings not raised in prior years, - Correction of errors on invoices. 19. SERVICE CHARGES Refuse Removal 571,929 535,518 20. LICENCES AND PERMITS

Drivers Licence 1,501,622 1,528.213 Learners Licence 137,228 147,348 1,638,850 1,675,561 21. RENTAL OF FACILITIES AND EQUIPMENT

Land and Halls

Various Rentals 185,495 221,196 Facilities and Equipment

Billboards 7,433 3,878 192,928 225,074 At the end of the financial year, the properties were generating monthly income of R 17 989 (2015 - R 15 266).

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2016

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2015 Restated

R

22. OTHER REVENUE Tender Fees 108,828 119,954 Sundry Income 67,421 19,346 Photocopies 650 - Building Plan Fees 61,860 25,439 Insurance Claim for Loss of Property, Plant and Equipment 30,396 43,779 269,155 208,518 Sundry Income includes income from Cemetery Fees and Commission Collection. 23. INTEREST EARNED - OUTSTANDING DEBTORS

Interest Earned - Outstanding Debtors 3,277,506 2,436.854 24. INTEREST REVENUE

Interest on Investments 1,255,184 820,414 25. PROPERTY RATES

Gross Property Rates 18,946,302 12,932,176 Less Rebates (1,809,226) (2,210,339) 17,137,076 10,721,837 Valuations

Residential 320,508,301 320,508,301 Commercial 84,489,000 84,489,000 State 228,507,387 228,507,387 Municipal 84,174,808 84,174,808 Small Holdings and Farms 46,010,000 46,010,000 Place Of Worship 2,396,000 2,396,000 Farms Non-Agricultural 13,711,801 13,711,801 Vacant Land 7,817,718 7,817,718 Game Hunting 6,300,000 6,300,000 793,915,015 793,915,015 Valuations on land and buildings are performed every 4 years. The last general valuation came into effect on 1 July 2013. Interim valuations are processed on an annual basis to take into account changes in individual property values due to alterations and subdivisions. Rates applied to property valuations to determine assessment rates were established by the Council on various usage categories as per the municipality's rates policy. These rate tariffs were published and can be inspected at the municipality's registered address. Rebates of 43% (2015 43%) are granted to residential and state property owners. The new general valuation will be implemented on 01 July 2017.

130


2016

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2015 Restated

R

26. GOVERNMENT GRANTS Equitable Share 82,854,000 71,805,000 Expanded Public Works Programme 1,000,000 1,000,000 Municipal Infrastructure Grant 23,484,000 27,454,055 Financial Management Grant 1,875,000 1,800,000 Municipal Systems Improvement Grant 930.000 934,000 National Sport and Recreation Grant - 3,161,006 Library Grant 200,000 200,000 110,343,000 106,354,061 Conditional and Unconditional Grants

Included in the above are the following grants and subsidies received - - Conditional Grants Received 27,289,000 34,349,061 Unconditional Grants Received 83,054,000 72,005,000 110,343,000 106,354,061 Equitable Share

In terms of Section 227 of the Constitution, this grant is used la enable the municipality to provide basic services and perform functions allocated to it The Equitable Share Grant also provides funding for the municipality to deliver free basic services to poor households and to subsidise the cost of administration and other core services for the municipality. Expanded Public Works Programme Current period receipts 1,000,000 1,000,000 Conditions met - transferred to revenue (1,000,000) (1,000,000) The grant was received from National Roads and Public Works.

- -

The grant was used for stipends for unemployed youths. Municipal Infrastructure Grant Balance unspent at beginning of period - 5,571,055 Current period receipts 23,484,000 22,755,000 Conditions met- transferred to revenue (23,484,000) (27,454,055) Prior year adjustment - (872,000) - - The grant was received from National Treasury. The grant was used for construction of community halls and extension of access roads.

131


2016

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2015 Restated

R

26. GOVERNMENT GRANTS (continued)

Financial Management Grant

Current period receipts 1,875,000 1,800,000 Conditions met - transferred to revenue (1,875,000) (1,800,000) - -

The grant was received from National Treasury. This grant was used to pay stipends for Financial Management Interns and Budget and Treasury Office related expenditure. Municipal Systems Improvement Grant

Current period receipts 930,000 934,000 Conditions met - transferred to revenue (930,000) (934,000) - - The grant was received from Provincial Co-operative Governance and Traditional Affairs.

The grant was used to pay for public participation activities and for the maintenance of systems.

Library Grant

Receipts 200,000 200,000 Conditions met - transferred to revenue (200,000) (200,000) - - The grant was received from the Department of Sport, Recreation, Arts and Culture,

This grant was used to support the maintenance of the library.

National Sport and Recreation Grant

Current period receipts - 3,161,006 Conditions met - transferred to revenue - (3,161,006) - - The grant was received from National Sports and Recreation for the building of sportsfields for communities

Integrated National Electrification Programme

Current-year receipts 4,364,000 2,697,000 Contribution made to households (4,364,000) (2,697,000) - - This is a grant n-kind received from National Treasury for Electrification of Household by Eskom Eskom does the work on behalf of the municipality and transfers directly to the beneficiary, no payments are made by the municipality nor receipts of cash are directed to the municipality. 27. OTHER TRANSFER REVENUE

CETA 2,060,146 59,363

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2016

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2015 Restated

R

28. EMPLOYEE RELATED COSTS

Acting Allowances 500.093 1,494.364 Annual Bonus 3,547 476 2,237,015 Cellphone Allowance 346,587 247,507 UIF 258,106 236,454 Basic Salaries 31,511,768 30,105,993 Housing Allowances 110,457 40,152 Gratuity 4,605 - Medical Aid Contributions 1,891,968 1,577,826 Pension Fund Contributions 4,666,807 4.170,670 Long Service Bonus 462,225 326,247 Subsistence and Travel 3,023,747 1,525,938 SALGA Levies 15,457 15,584 Overtime 296,462 232,274 Redemption of Leave 749,950 838,295 Shift Allowance 19,173 - SDL 391,922 381,930 47,796,803 43,430,249 The amounts below have been included in the above note

Remuneration of Municipal Manager

Basic Salary 1,105,380 589,357 Backpay 37,380 - SDL 11,473 7,722 UIF 1,785 1,041 Travel Expenses 15,917 182,836 1,171,935 780,956 Remuneration of Chief Finance Officer

Basic Salary 552,691 358,000 Travel Expenses 227,710 246,012 SDL 9,153 5,745 UIF 1,785 1,190 Cellphone Allowance 26,285 19,200 Backpay 31,150 - Non-Pensionable Allowance 156,948 - 1,005,722 630,147 Remuneration of Executive Manager: Corporate Services

Basic Salary 772,236 954,190 Backpay 48,063 Travel Expenses 154,758 SDL 9,130 2,871 UIF 1,785 1,785 Medical Aid - 15,702 985,972 974,548 28. EMPLOYEE RELATED COSTS (continued) Remuneration of Executive Manager: Technical Services

133


2016

R

2015 Restated

R

Basic Salary 639,150 178,000Back Pay 31,150 -Travel Expenses 332,683 48 000SDL 8,604 2 871UIF 1,785 595Cellphone Allowance 63,000 24,000Pension and Gratuity - 46,694 1,076,372 300,160 Remuneration of Executive Acting Manager: Community Services

Basic Salary

394,009 385,868

Travel Expenses 66,889 62,291SDL 6,299 2,914UIF 1,785 1,223Pension 68,937 31,495Acting Allowance 143,671 345,922Housing and Cellphone Allowance 19,207 106,637 700,797 936,350 29. REMUNERATION OF COUNCILLORS

Mayor

791 263

743,363

Speaker 647.136 601,266Chief Whip 255,514 334,940MPAC 320,710 315,892Public Relations 1,369,897 1,286,717Other Councillors 4,373.817 3,941,705 7,758,337 7,223,883 The Remuneration of Councillors is based on the upper limit as per the Government Gazette. The Mayor and Speaker each have the use of a separate Council owned vehicle, with a designated driver for the Mayor for official duties, and are provided with an office and secretarial support at the cost of the Council. There were no in-kind benefits declared nor received by other Councillors. 30. DEPRECIATION AND AMORTISATION

Property, Plant and Equipment

13,049,335

19,556,220

Property, Plant and Equipment Adjustment - 113,655 Intangible Assets 284,903 305,862 13,334,238 19,975,737 The depreciation for 2015 was adjusted with an increase of R 113 655 resulting to the restated amount of R 19 975 737. This adjustment is included in the Prior Period Error note disclosure on note 39.

134


2016

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2015 Restated

R

31. IMPAIRMENT OF ASSETS Property, Plant and Equipment

203,302

202,943

During the year, items of property, plant and equipment were impaired due to loss and damage of assets. The recoverable amount of the assets impaired is zero together with the fair value less cost to sell which was found to be zero.

Property, Plant and Equipment Adjustment

-

9,038

During the previous year, items of property, plant and equipment were impaired due to loss and damage of assets. The recoverable amount of the assets impaired is zero together with the fair value less cost to sell which was found to be zero.

Intangible Assets

114,743

-

During the year, items of intangible assets were impaired as no future economic benefits that could be derived from the assets. The value in use of the assets impaired is zero together with the fair value less cost to sell which was found to be zero.

318,045 211,981 The main classes of assets affected by impairment losses are. Motor Vehicles, Office Equipment, Computer Equipment and Computer Software.

32. FINANCE COSTS

Finance Lease

3,652,463

1,497,383

Interest on Long Service Bonus - 181,000 Late Payment of Suppliers 22,675 3,943 3,675,138 1,682,326 33. DEBT IMPAIRMENT

Debt Impairment 1,963,245 1,887,912 Debt impairment is an assessment of the amounts that will not be recovered from the debtors, based on the municipal ty's policy. 34. REPAIRS AND MAINTENANCE Repairs and Maintenance -Infrastructure 732,441 49,847 Repairs and Maintenance -Motor Vehicles 553,436 552,627 Repairs and Maintenance -Buildings 273,527 91,675 Repairs and Maintenance - Park Facilities 11,096 12,887 Repairs and Maintenance -Office Equipment 689,128 2,992 Repairs and Maintenance - Other Equipment 1,551,379 615,262 3,811,007 1,325,290

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35. OTHER EXPENDITURE Accommodation Expenses

2,150,413

1,589,780

Advertising 540,623 578,955 Agriculture 339,407 624,737 Audit Committee Expenses 227,842 340,958 Audit Fees 4,133,775 2,205,149 Auditors Remuneration - 9,650 Bank Charges 84,292 77,047 Books and Publications 52,794 89,822 Catering 264,729 308,392 Computer Expenses 67,287 117,096 Conferences and Seminars 124,102 95,255 Consultation and Professional Fees 6,947,308 4,444,606 Consumables 163,085 186,103 Electricity 2,896,161 2,717,387 Employee Assistance Programme 145,920 125,454 Entertainment 83,729 98,497 Fuel and Oil 876,992 1,258,085 Health and Safety Equipment 291,039 694,668 Hire of Equipment 3,691,460 12,828 1DP Reviewal 315,780 204,906 Legal Expenses 2,795,988 1,202,113 Life Savour Hire 179,458 260,302 Motor Vehicle Expenses 88,136 162,465 Miscellaneous Expenses 2,352,662 856,844 Printing and Stationery 361,575 360,993 Programmes 2,545,379 2,054,237 Public Participation 272,418 375,095 Refuse 146,144 142,920 Royalties and License Fees - 200,570 SPU 607,176 710,165 Subscriptions and Membership Fees 18,864 396,500 Telephone 705,029 692,835 Tourism Development 312,229 297,785 Training 934,007 693,894 Travel Local 34,751 444,704 Uniforms 251,870 304,203 Valuation Costs 11,520 - Water Municipal Use 5,124,182 5,285,159 Ward Committee Expenses 1,708,000 131,583 41,846,126 30,351,742

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36. CASH FLOWS FROM OPERATING ACTIVITIES

Surplus for the year 16,956,825 18,206,044 Adjustments for: - - Depreciation and Amortisation 13,334,238 19,975,737 Impairment of Assets 318,045 211,981 Re-measurement of Long Service Bonus - (191,000) Debt Impairment 1,963,245 1,887,192 Loss on Disposal of Assets 224,883 - Movement in Accrued Bonus 1,424,808 211,647 Movement in Long-Service Bonus 354,000 444,276 Movement on Accrued Leave Pay 529,171 485,212 Interest on Long-Service Bonus - 181,000 Movements in Operating Lease Asset 26,048 (88,280) Movements in Provision for Rehabilitation of Landfill Sites 3,420 3,345 Current Service Costs - 458,000 Changes in working capital: - - VAT Receivable 492,636 (323,879) Receivables from Exchange Transactions (5,116,082) (709,667) Receivables from Non-ExchangeTransactions (7,539,338) (3,163,499) Payables from Exchange Transactions 3,166,275 (11,071,819) Retentions 360,063 (1,076,258) Payables from Nan-Exchange Transactions (384,663) (284,816) Unspent Conditional Grants - (5,571,054) 26,113,574 19,584,162 37. COMMITMENTS

Authorised Capital Expenditure

Already contracted for but not provided for: Property. Plant and Equipment 31,346,162 8,096,930 Intangible Assets 259,136 - 31,605,298 8,096,930 This committed expenditure relates to Property, Plant and Equipment and Intangible Assets and will be financed by Municipal Grants. Operating Lease Asset Minimum lease payments receivable: - within one year 119,124 159,608 - in second to fifth year inclusive 621,269 622,401 - later than five years 1,160,750 1,278,742 1,901,143 2,060,751 Certain of the municipality's equipment is held to generate rental income. Rental of land is subject to various escalation rates as per the lease agreements on an ongoing basis. Lease agreements are cancellable and have terms from 3 to 30 years. There are no contingent rents receivable.

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38. CONTINGENCIES Contingencies arise from pending litigation on contractual disputes and damage claims. As the conclusion of the process is dependent on the setting of the dates by the respective courts, the timing of the economic outflow is therefore uncertain. Dlelanga Trading CC vs Ngqushwa Local Municipality - A claim by Dlelanga Trading CC based on a dispute for services rendered. Nosizwe Madlingozi obo Sesona Manyathi vs Ngqushwa Local Municipality - A claim by Nosizwe Madlingozi obo Sesona Manyathi for damages sustained by a minor on the municipal owned sports field. In this matter, the municipal insurers have been notified. Masincedisane vs Ngqushwa Local Municipality - A claim by Masincedisane 9999 CC based on alleged breach of contract. Contingent Liabilities

The table below summarises the potential financial impact of the law suits:

R Dlelanga Trading CC vs Ngqushwa Local Municipality (Dispute for services rendered) 770 970 Nosizwe Madlingozi obo Sesona Manyathi vs Ngqushwa Local Municipality (Damages sustained) 1,502,180 Masincedisane vs Ngqushwa Local Municipality (Alleged breach of contract) 61.582 2,334,732 39. PRIOR PERIOD ERRORS During the year the following errors were discovered in both the annual financial statements submitted in the prior year and the financial accounting system. These errors have been corrected retrospectively through restatements of prior year through journals in the financial accounting system and through correcting the misrepresented prior year column on the annual financial statements. OPERATING LEASE ASSET (LIABILITY) AND RENTAL OF FACILITIES AND EQUIPMENT. The straight lining of the lease in the prior year was done incorrectly. Therefore the error was corrected in the current year. VAT RECEIVABLE: The amount reflected in the annual financial statements did not agree with the statement from SARS and the correction was done to agree the annual financial statements with SARS. RECEIVABLES FROM EXCHANGE TRANSACTIONS: The error was a result of a non-allocation of receipts to the customers account but were incorrectly allocated to payables from exchange transactions. This error was corrected by allocating the receipts to the customers account RECEIVABLES FROM NON-EXCHANGE TRANSACTIONS: There was incorrect mapping of receivables with credit balances which were mapped under receivables and also payables with debit balances which were mapped in payables. These were corrected through mapping of accounts to the correct line item. Furthermore incorrect billing was done in the prior year and this has since been corrected. INVESTMENT PROPERTY: There were properties that were incorrectly included in the investment property and should have been derecognised in the prior year. The error was corrected through restating the comparative.

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39. PRIOR PERIOD ERRORS (continued) PROPERTY, PLANT AND EQUIPMENT AND DEPRECIATION The allocation of deprecation was overstated and the figures did not agree with the asset register. Furthermore the general ledger did not agree to the amounts reflected on the financial statements. There were completed projects which were not capitalised from Work - in - Progress to Infrastructure or Buildings. This error was corrected by agreeing the asset register to the annual financial statements and capitalising completed projects. HERITAGE ASSETS: A heritage asset was erroneously classified under property, plant and equipment and was since reclassified to heritage assets and a reversal of the depreciation charge on the property plant and equipment had occurred. PAYABLES FROM EXCHANGE TRANSACTIONS and REPAIRS AND MAINTENANCE: Expenses relating to repairs and maintenance were incurred but were only paid after year end, these were not accrued for therefore this correction was to accrue for these expenses. The water accrual was incorrectly stated in the prior year and was since corrected through restatement of the prior year. UNSPENT GRANTS AND INCOME FROM GOVERNMENT GRANTS. The library grant was incorrectly accounted for as an unspent conditional grant and not receipted directly to income, an adjustment of the amount not spent as at year-end was then transferred to income. FINES AND PENALTIES: The fines were understated in the prior year and this error was corrected through restatement of prior year balances. EMPLOYEE RELATED COSTS: The cost of acting allowances was overstated in the prior year due to incorrect application of the acting allowance policy. The error has since been corrected through restatement of the prior year. Furthermore there was incorrect mapping that had occurred, these amounts were since correctly mapped to the correct line item on the financial statements. REMUNERATION OF COUNCILLORS: The amount per the annual financial statements did not agree to the VIP Payroll report resulting in an overstatement. This has since been corrected through restatement of the prior year. Furthermore, there was incorrect mapping that had occurred and these amounts have since been correctly mapped to the correct line item on the financial statements. IMPAIRMENT OF ASSETS: The impairment of assets was included in the depreciation and amortisation and not separately disclosed in the prior year, DEBT IMPAIRMENT: The total impairment was provided for, instead of the movement between prior year and current year. This correction was made in the financial accounting system to correctly reflect the movement of the total impairment. OTHER EXPENDITURE. The error occurred in the annual financial statements due to the mapping of the accounts under incorrect line items and were incorrectly processed in the general ledger. This correction was done through correct mapping on the annual financial statements and an adjustments of the amount not included. ADJUSTMENT INCORRECTLY STATED: An amount of R 396 909 was incorrectly included in the statement of changes in net assets and this amount has since been removed from the statement. CASHFLOW STATEMENT: The cashflow statement could not be recomputed due to not being able to trace the numbers. Therefore the prior year cashflow statement was re-done completely. The correction of the error(s) resulted in adjustments as follows:

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39. PRIOR PERIOD ERRORS (continued) Previously

stated Reclassification

of Accounts Correction of

error Restated STATEMENT OF FINANCIAL POSITION CURRENT ASSETS

Operating Lease Asset 4 27,047 - 66,603 93,650 VAT Receivable 5 8,514,817 - (4,056,282) 4,458,535 Receivables from Exchange Transactions 6 2,688,444 - 23.473 2,711,917 Receivables from Non-Exchange Transactions 7 11,847,192 - 1,674 856 13,522,048 23,077,500 - (2,291,350) 20,786,150 NON-CURRENT ASSETS Investment Property 10 37,976,900 - (25,000) 37,951,900 Property, Plant and Equipment 11 146,434,014 - 236.194 146,670,208 Heritage Assets 12 2 - 1 3 184,410,916 - 211,195 184,622,111 CURRENT LIABILITIES

Payables from Exchange Transactions 14 35,289,551 - (14,569,363) 20,720,188 Unspent Conditional Grants 15 53,285 (53,285) 35,342,836 - (14,622,648) 20,720,188

NET ASSETS

Accumulated Surplus 161,520,487 - 12,542,493 174.062.980 161,520,487 - 12,542,493 174,062,980 STATEMENT OF FINANCIAL PERFORMANCE

REVENUE REVENUE FROM EXCHANGE TRANSACTIONS Rental of Facilities and Equipment 21 131,424 - 93,650 225,074 Government Grants 26 106,300,775 53,286 106,354,061 Fines and Penalties 146,941 586,008 732,949 Total Revenue 106,579,140 732,944 107,312.084 Expenditure

Employee Related Costs 28 44,968 112 (526,182) (1,011,681) 43..130,249 Remuneration of Councillors 29 8,169 214 530,959 (1,476,290) 7,223,883 Depreciation and Amortisation 30 20,065.022 (202,943) 113,658 19,975 737 Impairment of Assets 31 202,943 9,038 211.981 Finance Costs 32 1,501 .326 - 181,000 1.682 326 Debt Impairment 33 12,668,222 - (10,780,310) 1,887,912 Repairs and Maintenance 34 957,132 37,557 330,601 1,325.290 Other Expenditure 35 30,638,770 (42,334) (244,694) 30,351,742 Total Expenditure 118.967,798 - 112.878.6781 106,089,120 Remeasurement of Long-Service Bonus - - (191,000) (191,000) Adjustments incorrectly stated in 201312014 - - (396,909) (396,909) TOTAL ADJUSTMENTS - - (1,650,738) (1,650,738)

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39. PRIOR PERIOD ERRORS (continued) CASH FLOW STATEMENT FOR THE YEAR ENDED 30 JUNE 2016 CASH FLOW FROM OPERATING ACTIVITIES

Billed Services 11,861,655 - (3,797,115) 8,064,540 Other Services 59.363 - 2,907,264 2,966,627 Payments - Payments to Employees (45,330,885) - (6,464,382) (51,795,267) Payments to Suppliers (40.949.262) - 1,195,430 (39,753,832) Impairment of Assets (10,515,064) - 10,515,064 CASH FLOW FROM INVESTING ACTIVITIES Purchase of Property, Plant and Equipment 11 (22,315,174) - (4,351,992) (26,667,166) Proceeds from Insurance Claim for Loss of Property. Plant and Equipment

22 - - 43,779 43,779

40. RISK MANAGEMENT

Liquidity risk

Liquidity risk is the risk that the municipality will not be able to meet its obligations as they fall due. The municipality's approach to managing the liquidity risk is to ensure that sufficient liquidity is available to meet its liabilities when they fall due. without incurring unacceptable losses or risking damage to the municipality's reputation. The municipality manages liquidity risk through an ongoing review of future commitments and grant receipts. Cash flow forecasts are prepared and adequate utilised borrowing facilities are monitored. Interest rate risk Balances with banks, deposits and all call and current accounts attract interest at rates that vary with South African prime rate. The municipality's policy is to manage interest rate risk so that fluctuations in variable rates do not have a material impact on the surplus / deficit. The municipality's income and operating cash flows are substantially independent of changes in market interest rates due to the short term nature of interest bearing assets. Surplus funds are invested with banks for fixed terms on fixed interest rates not exceeding one year. For details refer to note 8. Any change in interest rates will not have any impact on the accumulated surplus of the municipality. At period end financial assets exposed to interest rate risk were as follows Cash and Cash Equivalents - R 1 200 807 (2015 - R 163 631)

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40. RISK MANAGEMENT (continued) Credit risk Credit risk is the risk of financial loss to the municipality if customers or counterparties to financial instruments fail to meet their contractual obligations and arises principally from the municipality's receivables, and cash and cash equivalents. The municipality only deposits cash with major banks with high quality credit standing and limits exposure to any one counter-party. Receivables are amounts owing by consumers and are presented net of impairment losses. Receivables comprise a widespread customer base. Management evaluated credit risk relating to these customers on an ongoing basis. If customers are independently rated, these ratings are used. Otherwise, if there is no independent rating, risk control assesses the credit quality of the group of customers, taking into account their financial position, past experience and other factors Financial instruments exposed to credit risk at current period end were as follows. Financial instrument

Receivables from Exchange Transactions 7,827,999 2,711,917Receivables from Non-Exchange Transactions 21,095,865 13,067,673Cash and Cash Equivalents 1,200,807 163,631Finance Lease Obligation 11,781,812 7,296,855Provisions 2,848,231 2,490,811Payables from Exchange Transactions 26,200,505 20,720,188Payables from Non-Exchange transactions 1,850,712 2,235,375 41. GOING CONCERN

The annual financial statements have been prepared on the basis of accounting policies applicable to a going concern. This basis presumes that the municipality will continue to receive grants from National and Provincial Governments as well as continue to levy rates and charge for refuse collection. The proceeds are presumed to be available to finance future operations and that the realisation of assets and settlement of liabilities, contingent obligations and commitments will occur in the ordinary course of business.

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42. EVENTS AFTER THE REPORTING DATE Due to the municipal elections that occurred on 03 August 2016. a new council has been appointed to the municipality. The names of the members of the recently appointed executive council are as follows Fulani, N.B. (Ward Councillor) Gwavu, S. (PR Councillor) Gxasheka, N.V. (PR Councillor) Gxasheka, N.C. (PR Councillor) Jako, N.M. (PR Councillor) Kolisi, L. (Ward Councillor) Lawu, N. (Ward Councillor) Madlingozi, N.C. (Ward Councillor) Magingxa, N.E. (PR Councillor) Maneli, S.S. (PR Councillor) Moyeni, L.H. (Ward Councillor) Mpoli, N.P. (Ward Councillor) Mquqo, N. (Ward Councillor) Mtati, N. (Ward Councillor) Ncanywa, D. (Ward Councillor) Nduneni, Z.R. (PR Councillor) Phumaphi, F. (PR Councillor) Sikweyiya, T.T. (Ward Councillor) Sitole, P. (Ward Councillor) Siwisa, M.T. (PR Councillor) Taylor, R.C. (PR Councillor) The new traditional leaders are as follows: Goni, A. (Prince) Ngqondi, N. (Princess) Njokweni, Z.P. (Chief) Zitshu, G.L. (Prince) As prescribed in circular 2/2013 on Redetermination of Municipal Boundaries and Circular 2/2014 on Delimitation of Municipal Boundaries for the 2016 Local Government Elections, public consultation sessions were held both by the municipality and the Demarcation board, the outcome of which resulted in the villages of Jubisa, Oaga, Masele, Tamara, Dubu Tsolo, Cwecweni, Mani and Twecu demarcated out of the jurisdiction of Ngqushwa and was deemed to be under the jurisdiction of Buffalo City Metropolitan Municipality as at 3rd August 2016.

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43. UNAUTHORISED EXPENDITURE Details of Unauthorised Expenditure

Remuneration for Councillors 119,337 101,779Depreciation and Amortisation 3,902,238 11,411,547Loss on Disposal of Assets 824,833 Finance Costs 3,675,138 1,682,326Employee Related Costs - 3,401,197Debt Impairment - 6,034,575lmpairment of Assets 318,045 8,839,591 22,631,424

2016 2015Opening balance as previously reported 50,669,691 28,887,536Written off by Council for previous years (22,450,424) Restated Balance 28,219,267 28,887,536Unauthorised expenditure for the year 8,839,591 22,631,424Written off by Council (2,341,029) (849,269) 34,717,829 50,669,691 44. FRUITLESS AND WASTEFUL EXPENDITURE

Fruitless and wasteful expenditure for current year

112,265 34,831

Certified as irrecoverable by Council (97,397) (34,831) 14,868 - Details of Fruitless and Wasteful Expenditure

Interest charged by Auditor General of South Africa 19,751 22,765Interest charged by Telkom 2,366 359Interest charged by Prodiba - 92Interest charged by Eskom 11,083 11.615SARS penalties 79,065 - 112,265 34,831 The above incidents have been taken to Council for consideration.

45. IRREGULAR EXPENDITURE

2016 2015Opening balance as previously reported 59,499,000 -Identified through the audit in the prior year - 28,148,415 59,499,000 28,148,415Add: Irregular Expenditure - current year 23,089,635 8,128.310Amount written off by Council -Audit (40,415,928) (8,128,310)Amount written off by Council - Incurred in current year (1,060,920) Additional irregular identified in the current year relating to prior year - 31,350,585 41,111,787 59,499,000

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45. IRREGULAR EXPENDITURE (continued) Details of irregular expenditure – current year Proper Supply Chain Management processes not followed 21,090,867 Awards to person in state institutions 29,735 Awards to employee with interest 8,500 Sole service provider in the area 1,471,209 Contract amount exceeded 489,324 23,089,635 Details of irregular expenditure identified in the current year relating to prior year Proper Supply Chain Management processes not followed 31,350,585

46 DEVIATIONS FROM SUPPLY CHAIN MANAGEMENT REGULATIONS Paragraph 12(1)(d)(i) of Government gazette No. 27636 issued o 30 May 2005 states that a supply chain management policy must 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 in certain circumstances, provided that he records the reasons for any deviations and reports them to the next meeting of the and includes a note to the annual financial statements. The incident below were procured during the financial year under review and the process followed deviation from the provisions of 12(1)(d)(i) as stated above. The reasons for these deviations were documented and reported to Council who considered them and the accounting officer subsequently approved the deviations from the normal supply chain management regulations:

Incidents Co-sourcing unit for internal audit 3,302,000 Hire, repair and servicing of vehicles 319,009 LED consultant 200,000 Legal services 1,546,536 Municipal Finance Management Programme 305,000 Procurement of fuel and oil 1,201,048 Security services 1,405,000 Deviations below R200 000 871,231 9,149,824

47. ADDITIONAL DISCLOSURE IN TERMS OF THE MUNICIPAL FINANCE MANAGEMENT ACT NO. 56 OF 2003

Contributions to SALGA Current year subscription / fee 15,457 15,584 Amount paid – current year (15,457) (15,584) - -

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47. ADDITIONAL DISCLOSURE IN TERMS OF THE MUNICIPAL FINANCE MANAGEMENT ACT NO 56 OF 2003

AUDIT FEES Opening balance 888,896 695,082 Current year subscription 4,133,775 2,205,149 Amount paid - current year (5,022,671) (2,011,335) - 888,896 PAYE, SDL AND UIF

Opening balance (260,623) 3,489,271 Current year subscriptions 8,780,552 8,598,685 Amount paid - current year (7,488,935) (11,397,993) Correction of misallocations (1,657,602) (950,586) (626,608) (260,623) PENSION AND MEDICAL AID DEDUCTIONS

Opening balance 768,295 5,887,958 Raising for current year 11,438,446 - Amount paid - current year (10,894,990) - Amount paid - previous year (903,142) - Correction of misallocations (336,259) (5,119,663) 72,350 768,295 COUNCILLOR'S ARREAR CONSUMER ACCOUNTS

No councillors had balances in excess of 90 days in the year under review.

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Report of the auditor-general to the Eastern Cape Provincial legislature and the council on the Ngqushwa local Municipality

Report on the financial statements

Introduction

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

which comprise the statement of financial position as at 30 June 2016, the statement of financial

performance, statement of changes in net assets and cash flow statement and the statement of

comparison of budget and actual amounts for the year then ended, as well as 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 these financial

statements in accordance with South African Standards of Generally Recognised Accounting Practice

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

Africa, 2003 (Act No. 56 of 2003) (MFMA) and Division of Revenue Act of South Africa, 2015 (Act No. 1

of 2015) (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 these financial statements based on my audit. I conducted

my audit in accordance with International Standards on Auditing. Those standards require that I comply

with ethical requirements, and plan and perform the audit to obtain reasonable assurance about whether

the financial statements are free from material misstatement.

4. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in

the financial statements. The procedures selected depend on the auditor's judgement, including the

assessment of the risks of material misstatement of the financial statements, whether due to fraud or

error. In making those risk assessments, the auditor considers internal control relevant to the entity's

preparation and fair presentation of the financial statements in order to design audit procedures that are

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

of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies

used and the reasonableness of accounting estimates made by management, as well as evaluating the

overall presentation of the financial statements.

148

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

qualified audit opinion.

Basis for qualified opinion

Corresponding figures

6. During 2014-15 the municipality did not have adequate systems to maintain accurate records of trade

payable for goods and services received but not yet paid. Therefore not all trade payables were accounted

for. As a result trade payables as disclosed in note 14 and expenditure as disclosed in the statement of

financial performance are understated by R2,5 million. It was impracticable for me to determine the full

extent of the understatement in these accounts.

7. My audit opinion on the financial statements for the period ended 30 June 2015 was modified accordingly.

My opinion on the current period's financial statements is also modified because of possible effects of

these matters on the comparability of the current period's figures.

Aggregation of immaterial uncorrected misstatements in corresponding figures

8. The financial statements as a whole were materially misstated due to the cumulative effect of numerous

individually immaterial uncorrected misstatements in the corresponding figures for the following elements

making up the statement of financial position:

• Receivables from non-exchange transactions were overstated by R942 866

9. In addition, I was unable to obtain sufficient, appropriate audit evidence regarding amounts disclosed

for:

• Value Added Tax (VAT) Receivable of R1,2 million

10. My audit opinion on the financial statements for the period ended 30 June 2015 was modified accordingly.

My opinion on the current period's financial statements is also modified because of possible effects of

these matters on the comparability of the current period's figures.

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Qualified opinion

11. In my opinion, except for the possible effects of the matters described in the basis for qualified opinion

paragraphs, the financial statements present fairly, in all material respects, the financial position of the

Ngqushwa Local Municipality as at 30 June 2016 and its financial performance and cash flows for the

year then ended, in accordance with SA Standards of GRAP and the requirements of the MFMA and

DoRA.

Emphasis of matters

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

Irregular expenditure

13. As disclosed in note 45 to the financial statements, irregular expenditure amounting to R23,1 million

(2015: R59,5 million) has been incurred in the current year due to the supply chain management (SCM)

processes not being followed.

Unauthorised expenditure

14. As disclosed in note 43 to the financial statements, unauthorised expenditure amounting to R8,8 million

(2015: R22,6 million) has been incurred in the current year due to overspending on the budget.

Restatement of corresponding figures

15. As disclosed in note 39 to the financial statements, the corresponding figures for 30 June 2015 have been

restated as a result of errors discovered during 30 June 2016 in the financial statements of the municipality

at, and for the year ended, 30 June 2015.

Material impairments

16. As disclosed in note 33 to the financial statements, material impairments to the amount of R2 million were

incurred as a result of a write-off of irrecoverable trade debtors.

Additional 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.

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Report on other legal and regulatory requirements

18. In accordance with the Public Audit Act of South Africa, 2004 (Act No. 25 of 2004) and the general notice

issued in terms thereof, I have a responsibility to report findings on the reported performance information

against predetermined objectives of selected development priorities presented in the annual performance

report, compliance with legislation and 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.

Predetermined objectives

19. I performed procedures to obtain evidence about the usefulness and reliability of the reported

performance information of the following selected development priorities presented in the annual

performance report of the municipality for the year ended 30 June 2016:

• Development priority 1: Service Delivery and Infrastructure Development on pages x to x

• Development priority 2: Local Economic Development on pages x to x

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 development priorities. 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 development priorities are as follows:

Service delivery and infrastructure development and Local economic development

Usefulness of reported performance information

24. I did not identify any material findings on the usefulness of the reported performance information for the

following development priorities:

• Development priority 1: Service Delivery and Infrastructure Development on pages x to x

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• Development priority 2: Local Economic Development on pages x to x

Reliability of reported performance information

25. The FMPPI requires auditees to have appropriate systems to collect, collate, verify and store performance

information to ensure reliable reporting of actual achievements against planned objectives, indicators and

targets. I was unable to obtain the information and explanations I considered necessary to satisfy myself

as to the reliability of the reported performance information for both selected development priorities. This

was as result of limitations placed on the scope of my work due to the fact that the municipality could not

provide sufficient appropriate evidence in support of the reported performance information and the

auditee's records not permitting the application of alternative audit procedures.

Additional matters

26. I draw attention to the following matters:

Achievement of planned targets

27. Refer to the annual performance report on pages x to x; x to x for information on the achievement of planned

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

expressed on the reliability of the reported performance information in paragraph 26 of this report.

Compliance with legislation

28. I performed procedures to obtain evidence that the municipality had complied with applicable legislation

regarding financial matters, financial management and other related matters. My material findings on

compliance with specific matters in key legislation, as set out in the general notice issued in terms of the

PAA, are as follows:

Annual report and annual financial statements

29. 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 of non-current assets, current

assets, liabilities, revenue, expenditure and disclosure items identified by the auditors in the submitted

financial statements were subsequently corrected, but the uncorrected material misstatements resulted

in the financial statements receiving a qualified audit opinion.

Expenditure management

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

the MFMA.

152

31. Reasonable steps were not taken to prevent unauthorised, irregular and fruitless and wasteful

expenditure, as required by section 62(1)(d) of the MFMA.

Asset management

32. An effective system of internal control for assets was not in place, as required by section 63(2)(c) of the

MFMA.

Procurement and contract management

33. Goods and services with a transaction value of below R200 000 were procured without obtaining the

required price quotations, in contravention of by SCM regulation 17(a) and (c).

34. The performance of contractors or providers was not monitored on a monthly basis, as required by

section 116(2)(b) of the MFMA.

Human resources management

35. The competencies of the chief financial officer and head of supply chain were not assessed in a timely

manner in order to identify and address gaps in competency levels as required by Municipal Regulations

on Minimum Competency Levels 13.

36. The municipality did not submit a report on compliance with prescribed competency levels to the National

Treasury and relevant provincial treasury as required by the Municipal Regulations on Minimum

Competency Levels 14(2)(a).

37. The annual report of the municipality did not reflect information on compliance with prescribed minimum

competencies as required by the Municipal Regulations on Minimum Competency Levels 14(2)(b).

Internal control

38. I considered internal control relevant to my audit of the financial statements, annual performance report

and compliance with legislation. The matters reported below are limited to the significant internal control

deficiencies that resulted in the basis for qualified opinion, the findings on the annual performance report

and the findings on compliance with legislation included in this report.

Leadership

39. Although leadership has set the correct tone in the municipality it has not been fully effective due to the

number of historical issues that are being addressed in financial reporting, predetermined objectives and

compliance with laws and regulations.

153

Financial and performance management

40. Management has not effectively implemented daily and monthly controls as designed for the

municipality's business processes, resulting in:

• significant misstatements not being detected or corrected in the financial statements

• a lack of supporting evidence being available to support predetermined objectives

• non-compliance with laws and regulations

Governance

41. The municipality has a functional internal audit and audit committee, however, the internal control

weaknesses identified by external and internal auditors have not been adequately addressed by

management.

East London

21 December 2016

154

2015

/16

AU

DIT

AC

TIO

N P

LAN

COAF

# EX

C #

Exce

ptio

n He

adin

g Su

mm

ary o

f Fin

ding

Na

ture

Su

gges

ted

Cont

rol

Impr

ovem

ents

Di

rect

orat

e HO

D Re

spon

sible

Offic

ial

Tim

e Lin

e

02

1 Re

cord

s Rev

iew

(Qua

rter 4

): Su

ppor

ting d

ocum

ents

not s

ubmi

tted f

or au

dit

purp

oses

(RFI

29 of

20

16)

Infor

matio

n req

ueste

d fro

m RF

I 29

issu

ed on

the 2

9th of

Aug

ust

2016

was

not s

ubmi

tted f

or

audit

purp

oses

Inter

nal

Contr

ols

Mana

geme

nt sh

ould

imple

ment

prop

er re

cord

keep

ing sy

stems

in a

timely

man

ner t

o ens

ure t

hat

comp

lete,

relev

ant a

nd ac

cura

te inf

orma

tion i

s acc

essib

le an

d av

ailab

le to

supp

ort fi

nanc

ial an

d pe

rform

ance

repo

rting.

Corp

orate

Se

rvice

s N

Mazw

ayi

Mana

ger A

dmin:

30

-Jun-

17

03

2 Re

ceiva

bles:

Gros

s re

ceiva

bles f

rom

exch

ange

tran

sacti

ons

in the

AFS

do no

t ag

ree t

o the

amou

nt pe

r age

analy

sis.

The g

ross

rece

ivable

s fro

m ex

chan

ge tr

ansa

ction

s dis

close

d in t

he A

FS do

not

agre

e to t

he am

ount

per a

ge

analy

sis (R

1 10

3 521

.40)

Finan

cial

Debto

rs Mo

nthly

reco

ncilia

tions

sh

ould

be pe

rform

ed an

d rev

iewd

by se

nior o

fficial

to en

sure

ther

e ar

e no e

rrors

or m

istak

es th

at ha

ve

been

proc

esse

d thr

ough

the

acco

untin

g sys

tem. A

dequ

ate

revie

ws sh

ould

be pe

rform

ed on

the

finan

cial s

tatem

ents

to en

sure

tha

t figu

res d

isclos

ed ar

e su

ppor

ted w

ith ac

cura

te inf

orma

tion.

prefa

rable

by

some

one i

ndep

ende

nt of

the

prep

arati

on pr

oces

s.

Budg

et an

d Tr

easu

ry V

Make

dama

Ma

nage

r Rev

enue

1)

Rec

on G

L vs

Age

An

alysis

31

July

2016

to

date.

2) R

econ

GV

vs M

onthl

y Ra

ising

Mo

nthly

31

July

2016

to

date.

04

3 SC

M: T

ende

r do

cume

nts no

t su

bmitte

d for

audit

pu

rpos

es (R

FI’s

10 of

20

16)

Infor

matio

n rela

ting t

o poin

t b) o

f RF

I 33 w

as no

t sub

mitte

d by t

he

due d

ate of

the R

FI.

Inter

nal

Contr

ols

Comm

unica

tion t

o the

Aud

itor

Gene

ral (A

G) fo

r req

ueste

d inf

orma

tion s

hould

alwa

ys go

thr

ough

the d

esign

ated A

udit

Contr

oller

to en

sure

that

all

comm

unica

tion t

o the

AG

is ev

idenc

ed.

Offic

e of th

e Mu

nicipa

l Ma

nage

r

T Mn

yimba

Na

me: N

Mba

du

Posit

ion: I

ntern

al Au

dit

Mana

ger

Ongo

ing

05

4 Pr

ocur

emen

t and

Co

ntrac

t Ma

nage

ment:

Bidd

er

that s

core

d the

hig

hest

point

s was

not

appo

inted

(Exc

.22)

Whe

n rec

alcula

ting t

he po

ints

for th

e pro

cure

ment

of cle

aning

ma

terial

, we n

oted t

hat th

e Ndo

li Tr

ading

scor

ed th

e high

est

point

s and

was

not a

ppoin

ted

for th

e con

tract.

(R 55

000.

)

Inter

nal

Contr

ols

Devia

tions

to no

rmal

proc

urem

ent

proc

esse

s as d

ocum

ented

in th

e mu

nicipa

lity's

Supp

ly Ch

ain

Mana

geme

nt po

licy,

shou

ld be

ap

prov

ed by

the d

esign

ated l

evel

of au

thority

and c

aptur

ed tim

ely in

a d

eviat

ions r

egist

er. F

urthe

rmor

e, su

ch de

viatio

ns ar

e to b

e su

ppor

ted by

relev

ant

Budg

et an

d Tr

easu

ry V

Make

dama

Ma

nage

r SCM

01

-Dec

-16

156

COAF

# EX

C #

Exce

ptio

n He

adin

g Su

mm

ary o

f Fin

ding

Na

ture

Su

gges

ted

Cont

rol

Impr

ovem

ents

Di

rect

orat

e HO

D Re

spon

sible

Offic

ial

Tim

e Lin

e

docu

menta

tion t

o sub

stanti

ate th

e pr

opos

ed co

urse

of ac

tion.

05

5

Proc

urem

ent a

nd

Contr

act

Mana

geme

nt: T

hree

Qu

otatio

n not

obtai

ned

(Exc

.20)A

udit f

inding

Thre

e quo

tation

s wer

e not

obtai

ned f

or th

e pro

cure

ment

of the

good

s and

servi

ce an

d the

re

ason

s for

thes

e dev

iation

s we

re no

t rec

orde

d and

ap

prov

ed by

the C

FO or

an

offici

al de

signa

ted by

the C

FO.

Comp

lianc

e De

viatio

ns to

norm

al pr

ocur

emen

t pr

oces

ses a

s doc

umen

ted in

the

munic

ipality

's Su

pply

Chain

Ma

nage

ment

polic

y, sh

ould

be

appr

oved

by th

e des

ignate

d lev

el of

autho

rity an

d cap

tured

timely

in

a dev

iation

s reg

ister

. The

SCM

Po

licy n

eeds

to be

upda

ted to

suit

the op

erati

onal

envir

onme

nt of

the

munic

ipality

Budg

et an

d Tr

easu

ry V

Make

dama

Ma

nage

r SCM

01

-Dec

-16

05

6 Pr

ocur

emen

t and

Co

ntrac

t Ma

nage

ment:

Cov

er

Quoti

ng (E

xc.24

)

Thes

e ind

icate

manip

ulatio

n of

the “t

hree

quote

syste

m”

wher

eby m

ultipl

e quo

tation

s are

su

bmitte

d by t

he sa

me su

pplie

r or

by re

lated

supp

lier a

s if th

ere

were

inde

pend

ent q

uotes

Inter

nal

Contr

ols

The S

CM P

olicy

need

s to b

e up

dated

to su

it the

oper

ation

al en

viron

ment

of the

mun

icipa

lity

Budg

et an

d Tr

easu

ry V

Make

dama

Ma

nage

r SCM

31

-Mar

-17

05

7 6.

Proc

urem

ent a

nd

Contr

act

Mana

geme

nt:

Supp

lier w

ith th

e low

est q

uote

not

Selec

ted (E

xc.26

)

The s

uppli

er w

ith th

e low

est

price

quote

was

not s

electe

d for

the

proc

urem

ent o

f ac

comm

odati

on. (

RR 15

000.)

Comp

lianc

e De

viatio

ns to

norm

al pr

ocur

emen

t pr

oces

ses a

s doc

umen

ted in

the

munic

ipality

's Su

pply

Chain

Ma

nage

ment

polic

y, sh

ould

be

appr

oved

by th

e des

ignate

d lev

el of

autho

rity an

d cap

tured

timely

in

a dev

iation

s reg

ister

. Fur

therm

ore,

such

devia

tions

are t

o be

supp

orted

by re

levan

t do

cume

ntatio

n to s

ubsta

ntiate

the

prop

osed

cour

se of

actio

n.

Budg

et an

d Tr

easu

ry V

Make

dama

Ma

nage

r SCM

01

-Dec

-16

05

8 7.

Proc

urem

ent a

nd

Contr

act

Mana

geme

nt: A

ward

s to

Supp

lier in

whic

h sp

ouse

has i

ntere

st (E

xc.29

)

awar

ds w

ere m

ade t

o Kyo

way

PTY

LTD

in wh

ich sp

ouse

of

emplo

yee (

Noluv

uko V

uba)

has

an in

teres

t. Eve

n tho

ugh t

he

emplo

yee d

eclar

ed th

e inte

rest,

the

decla

ratio

n for

m su

bmitte

d by

the s

uppli

er st

ated t

hat th

ere

is no

conn

ectio

n with

the

emplo

yee.

( R

82 62

0.00 )

Inter

nal

Contr

ols

SCM

Secti

on sh

ould

manta

in a

Datab

ase o

f all m

unici

pal o

fficial

s tha

t hav

e bus

iness

inter

est. T

he

said

datab

ase s

hould

be co

nsult

ed

ever

y tim

e an a

ward

is m

ade t

o a

supp

lier t

o ens

ure t

hat th

ere i

s no

confl

ict of

inter

est.

Budg

et an

d Tr

easu

ry V

Make

dama

Ma

nage

r SCM

01

-Jan-

17

05

9 Pr

ocur

emen

t and

Co

ntrac

t Th

e foll

owing

awar

ds w

ere

made

to su

pplie

rs in

which

Int

erna

l Co

ntrols

Ma

intain

a da

tabas

e of S

uppli

ers

who h

ave i

n the

past

subm

itted

Budg

et an

d Tr

easu

ry V

Make

dama

Ma

nage

r SCM

31

-Jan-

17

157

COAF

# EX

C #

Exce

ptio

n He

adin

g Su

mm

ary o

f Fin

ding

Na

ture

Su

gges

ted

Cont

rol

Impr

ovem

ents

Di

rect

orat

e HO

D Re

spon

sible

Offic

ial

Tim

e Lin

e

mana

geme

nt: :

Awar

ds to

Sup

plier

in

which

partn

ers h

as

inter

est (

Exc.3

0)

partn

ers o

r ass

ociat

es of

em

ploye

es ha

ve an

inter

est a

nd

no de

clara

tions

wer

e sub

mitte

d by

thes

e emp

loyee

s.

(R

485 7

47 )

false

decla

ratio

ns an

d flag

such

su

pplie

rs on

the s

uppli

er da

tabas

e so

as to

ensu

re th

at qu

otatio

ns ar

e no

t acc

epted

from

thes

e ser

vice

prov

iders.

05

10

9.

Proc

urem

ent a

nd

Contr

act

Mana

geme

nt:

Supp

liers

in the

se

rvice

of ot

her s

tate

institu

tions

(Exc

.31)

The f

ollow

ing aw

ards

wer

e ma

de to

supp

liers

who a

re in

the

servi

ce of

othe

r stat

e ins

titutio

ns. (

R 5 2

92 32

2 )

Inter

nal

Contr

ols

Maint

ain a

datab

ase o

f Sup

plier

s wh

o hav

e in t

he pa

st su

bmitte

d fal

se de

clara

tions

and f

lag su

ch

supp

liers

on th

e sup

plier

datab

ase

so as

to en

sure

that

quota

tions

are

not a

ccep

ted fr

om th

ese s

ervic

e pr

ovide

rs.

Budg

et an

d Tr

easu

ry V

Make

dama

Ma

nage

r SCM

31

-Jan-

17

06

11

1. Au

dit C

ommi

ttee :

No

revie

w of

contr

ols

to en

sure

asse

ts ar

e sa

fegua

rded

(Exc

.1)

The a

udit c

ommi

ttee d

id no

t re

view

contr

ols to

ensu

re th

at as

sets

are s

afegu

arde

d. Ne

ither

is

there

evide

nce t

hat in

terna

l au

dit un

it rev

iewed

inter

nal

contr

ols ar

ound

safeg

uard

ing of

as

sets.

Inter

nal

Contr

ols

Revis

e the

Inter

nal A

udit a

nd A

udit

Comm

ittee's

repo

rt tem

plate

to inc

lude o

r allo

w for

repo

rting o

n the

eff

ectiv

enes

s of m

anag

emnt

contr

ols ar

ound

safeg

uard

ing of

as

sets.

Offic

e of th

e Mu

nicipa

l Ma

nage

r

T Mn

yimba

Int

erna

l Aud

it Man

ager

31-

Mar-1

7

06

12

Audit

Com

mitte

e - N

o re

view

of fra

ud

prev

entio

n plan

(E

xc.2)

The a

udit c

ommi

ttee d

id no

t re

view

fraud

prev

entio

n plan

(2

015/1

6).

Inter

nal

Contr

ols

Audit

comm

ittee s

hould

proa

ctive

ly pe

rform

a re

view

of fra

ud

prev

entio

n plan

on a

n ann

ual

basis

to ad

dres

s any

frau

d risk

s tha

t may

arise

. Re

viewa

l of th

e Fra

ud P

reve

ntion

Pl

an sh

ould

be a

Stan

ding I

tem in

the

Age

nda o

f the 1

st Au

dit

Comm

ittee M

eetin

g ann

ually

.

Offic

e of th

e Mu

nicipa

l Ma

nage

r

T Mn

yimba

Na

me: N

Mba

du

Posit

ion: I

ntern

al Au

dit

Mana

ger

30-Ju

n-17

06

13

Inter

nal C

ontro

l : W

eak C

ontro

l En

viron

ment

(Exc

.3)

Durin

g the

audit

of th

e eff

ectiv

enes

s of th

e inte

rnal

contr

ols, w

eakn

esse

s in t

he

contr

ol en

viron

ment

were

noted

.

Inter

nal

Contr

ols

Deve

lop, im

pleme

nt an

d mon

itor

an A

ction

Plan

to ad

dres

s all

inter

nal c

ontro

l wea

knes

s tha

t hav

e be

en id

ernti

fied t

hrou

gh th

e aud

it pr

oces

(Inte

rnal

and E

xtern

al).

Offic

e of th

e Mu

nicipa

l Ma

nage

r

T Mn

yimba

Na

me: N

Mba

du

Posit

ion: I

ntern

al Au

dit

Mana

ger

31-Ja

n-17

06

14

Plan

ning:

No

proc

edur

es to

iden

tify

subs

eque

nt ev

ents

(Exc

.4)

Munic

ipality

does

not h

ave

docu

mente

d pro

cess

es or

pr

oced

ures

in pl

ace t

o ide

ntify

subs

eque

nt ev

ents.

Inter

nal

Contr

ols

Mana

geme

nt to

deve

lop a

proc

edur

e man

ual fo

r the

ide

ntific

ation

and r

ecor

ding o

f su

bseq

uent

even

ts, re

lated

party

tra

nsac

tion a

nd ot

her M

ateria

l AFS

Di

sclos

ure N

otes

Budg

et an

d Tr

easu

ry V

Make

dama

Na

me: T

Matt

hyse

n Po

sition

: Chie

f Ac

coun

tant

30-M

ar-1

7

158

COAF

# EX

C #

Exce

ptio

n He

adin

g Su

mm

ary o

f Fin

ding

Na

ture

Su

gges

ted

Cont

rol

Impr

ovem

ents

Di

rect

orat

e HO

D Re

spon

sible

Offic

ial

Tim

e Lin

e

06

15

Plan

ning :

Wea

k co

ntrol

envir

onme

nt (S

CM) (

Exc.8

)

Vario

us co

ntrol

weak

ness

wer

e no

ted in

SCM

durin

g the

pla

nning

phas

e of th

e Aud

it

Inter

nal

Contr

ols

Deve

lop, im

pleme

nt an

d mon

itor

an A

ction

Plan

to ad

dres

s all

inter

nal c

ontro

l wea

knes

s tha

t hav

e be

en id

ernti

fied t

hrou

gh th

e aud

it pr

oces

(Inte

rnal

and E

xtern

al) .

Offic

e of th

e Mu

nicipa

l Ma

nage

r

T Mn

yimba

Na

me: N

Mba

du

Posit

ion: I

ntern

al Au

dit

Mana

ger

31-Ja

n-17

06

16

Plan

ning -

Disc

losur

e :

Lack

of ef

fectiv

e int

erna

l con

trols

(Exc

.9)

The m

unici

pality

does

not h

ave

prop

er do

cume

nted,

appr

oved

an

d imp

lemen

ted pr

oced

ure

manu

al for

the f

ollow

ing

disclo

sure

items

: Co

nting

ent L

iabilit

ies, R

elated

pa

rties,

Fruit

less w

astef

ul,

irreg

ular a

nd un

autho

rised

ex

pend

iture

and C

ommi

tmen

ts

Inter

nal

Contr

ols

Mana

geme

nt to

deve

lop a

proc

edur

e man

ual fo

r the

ide

ntific

ation

and r

ecor

ding o

f su

bseq

uent

even

ts, re

lated

party

tra

nsac

tion a

nd ot

her M

ateria

l AFS

Di

sclos

ure N

otes

Budg

et an

d Tr

easu

ry V

Make

dama

Na

me: T

Matt

hyse

n Po

sition

: Chie

f Ac

coun

tant

30-M

ar-1

7

06

17

Emplo

yee C

ost :

No

payro

ll rec

oncil

iation

be

twee

n VIP

and

Paste

l (Exc

.11)

Durin

g the

plan

ning s

tage i

t was

no

ted th

at no

reco

ncilia

tion

betw

een t

he (f

inanc

e) sy

stem

and V

IP (p

ayro

ll) sy

stem

done

for

the m

onth

of Fe

brua

ry 20

16.

Inter

nal

Contr

ols

Pay

roll s

ectio

n sho

uld pe

rform

mo

nthly

reco

ncilia

tions

betw

een

VIP

and P

astel

and t

hese

shou

ld be

revie

wed b

y the

Chie

f ac

coun

tant. B

oth th

e pre

pare

r and

re

viewe

r sho

uld si

gn th

e re

conc

iliatio

n.

Budg

et an

d Tr

easu

ry V

Make

dama

Na

me: T

Ma

tthys

enPo

sition

: Ch

ief A

ccou

ntant

31-M

ar-1

7

06

18

Jour

nals

: Lac

k of

effec

tive i

ntern

al co

ntrols

whe

n jou

rnals

ar

e pro

cess

ed

(Exc

.13)

Whil

st pe

rform

ing th

e un

derst

andin

g of th

e bus

iness

pr

oces

ses a

nd ris

k ass

essm

ent

proc

edur

es th

e foll

owing

contr

ol we

akne

sses

wer

e note

d.

1. No

revie

w of

journ

als

proc

esse

d in t

he sy

stem

is pe

rform

ed by

a se

nior o

fficial

. 2.

Jour

nals

are n

ot se

quen

tially

nu

mber

ed.

3. Th

ere i

s no d

ocum

ented

and

appr

oved

proc

edur

e man

ual

that g

over

ns jo

urna

ls

Inter

nal

Contr

ols

Jour

nals

shou

ld be

prep

ared

and

revie

wed b

y sen

ior of

ficial

s. Th

e jou

rnals

shou

ld ha

ve de

fined

fields

wh

ere t

he pr

epar

er, r

eview

er an

d au

thoris

er ar

e req

uired

to si

gn an

d da

te. A

proc

edur

e man

ual o

utlini

ng

the jo

urna

l pro

cess

shou

l be

deve

loped

and

comm

unica

ted to

all

relea

vant

staff i

n the

Fina

nce

depa

rtmen

t.

Budg

et an

d Tr

easu

ry V

Make

dama

Na

me: T

Matt

hyse

n Po

sition

: Chie

f Ac

coun

tant

30-M

ar-1

7

06

19

Bank

and c

ash:

Lette

r no

t sen

t to P

rovin

cial

treas

ury a

nd th

e Au

ditor

Gen

eral

South

Af

rica f

or ne

wly

The m

unici

pality

has n

ot su

bmitte

d a le

tter t

o the

Pr

ovinc

ial T

reas

ury a

nd th

e Au

ditor

Gen

eral

South

Afric

a to

Comp

lianc

e Ma

nage

ment

to su

bmit a

nnua

lly

befor

e the

star

t of a

finan

cial y

ear,

the na

me of

each

bank

whe

re th

e mu

nicipa

lity ho

lds a

bank

acco

unt,

and t

he ty

pe an

d num

ber o

f eac

h

Budg

et an

d Tr

easu

ry V

Make

dama

Bu

dget

& Re

portin

g Ma

nage

r Ju

n-17

159

COAF

# EX

C #

Exce

ptio

n He

adin

g Su

mm

ary o

f Fin

ding

Na

ture

Su

gges

ted

Cont

rol

Impr

ovem

ents

Di

rect

orat

e HO

D Re

spon

sible

Offic

ial

Tim

e Lin

e

open

ed ba

nk

acco

unts

(Exc

.14)

confi

rm ne

w ba

nk ac

coun

ts op

ened

in th

e cur

rent

year

. ac

coun

t as r

equir

ed by

MFM

A.

Lette

r to b

e sen

t dur

ing th

e mon

th of

June

each

year

to th

e Pr

ovinc

ial

Trea

sury

and t

he A

udito

r Gen

eral

South

Afric

a.

06

20

Plan

ning -

Pay

ables

: Re

tentio

n liab

ilities

not

corre

ctly a

ccou

nted

(Exc

.17)

Durin

g the

audit

of pa

yable

s it

was i

denti

fied t

hat r

etenti

ons

withh

eld ar

e not

in ac

cord

ance

wi

th the

appli

cable

requ

ireme

nts Fin

ancia

l Re

tentio

ns sh

ould

be ac

crued

wh

en in

voice

s are

supp

lied b

y su

pplie

rs an

d not

when

the p

rojec

t is

comp

leted

Budg

et an

d Tr

easu

ry V

Make

dama

Na

me: T

Matt

hyse

n Po

sition

: Chie

f Ac

coun

tant

31-M

ar-1

7

07

21

Proc

urem

ent &

Co

ntrac

ts Ma

nage

ment

(Bids

) Irr

egula

r Exp

endit

ure

(Exc

.32)

The w

inning

prov

ider s

ubmi

tted

an or

igina

l/vali

d cer

tified

-copy

of

Tax C

leara

nce C

ertifi

cate

certif

ying t

he ta

x affa

irs of

that

perso

n to b

e in o

rder

or th

at su

itable

arra

ngem

ents

have

be

en m

ade w

ith S

ARS.

Al

terna

tively

the m

unici

pality

ob

taine

d the

tax c

leara

nce f

rom

SARS

. (PP

R 14

SCM

reg 1

3(b)

; SC

M re

g 43)

Inter

nal

Contr

ols

To st

rutin

ise al

l Ten

der f

iles f

rom

the 20

14/15

finan

cial y

ear t

o date

, to

ensu

re th

at all

nece

ssar

y aud

it tria

l doc

umen

ts ar

e file

d ac

cord

ingly

(i.e. T

ax C

leara

nces

, De

clara

tions

, BEE

Cer

tifica

tes,

etc).

A ch

eckli

st sh

ould

be

deve

loped

and i

mplem

ented

going

for

ward

to en

sure

that

these

are

maint

ained

and f

illed a

ccor

dingly

fro

m inc

eptio

n. An

y Dev

iation

s to

norm

al pr

ocur

emen

t pro

cess

es as

do

cume

nted i

n the

mun

icipa

lity's

Supp

ly Ch

ain M

anag

emen

t poli

cy,

shou

ld be

appr

oved

by th

e de

signa

ted le

vel o

f auth

ority

and

captu

red t

imely

in a

devia

tions

re

gister

. Fur

therm

ore,

such

de

viatio

ns ar

e to b

e sup

porte

d by

relev

ant d

ocum

entat

ion to

su

bstan

tiate

the pr

opos

ed co

urse

of

actio

n.

Budg

et an

d Tr

easu

ry V

Make

dama

Ma

nage

r SCM

01

-Dec

-16

07

22

Proc

urem

ent &

Co

ntrac

ts Ma

nage

ment

(Bids

) Irr

egula

r Exp

endit

ure

(Exc

.32)

Appli

cable

if fun

ction

ality

was

used

as an

evalu

ation

crite

rion:

On

ly ten

ders

which

achie

ved

the m

inimu

m qu

alifyi

ng sc

ore f

or

functi

onali

ty as

indic

ated i

n the

ten

der in

vitati

on w

ere r

egar

ded

as ac

cepta

ble te

nder

s and

ev

aluate

d fur

ther in

term

s of th

e pr

efere

nce p

oints.

(PPR

4(4)

)

Inter

nal

Contr

ols

To st

rutin

ise al

l Ten

der f

iles f

rom

the 20

14/15

finan

cial y

ear t

o date

, to

ensu

re th

at all

nece

ssar

y aud

it tria

l doc

umen

ts ar

e file

d ac

cord

ingly

(i.e. T

ax C

leara

nces

, De

clara

tions

, BEE

Cer

tifica

tes,

etc).

A ch

eckli

st sh

ould

be

deve

loped

and i

mplem

ented

going

for

ward

to en

sure

that

these

are

Budg

et an

d Tr

easu

ry V

Make

dama

Ma

nage

r SCM

01

-Dec

-16

160

COAF

# EX

C #

Exce

ptio

n He

adin

g Su

mm

ary o

f Fin

ding

Na

ture

Su

gges

ted

Cont

rol

Impr

ovem

ents

Di

rect

orat

e HO

D Re

spon

sible

Offic

ial

Tim

e Lin

e

maint

ained

and f

illed a

ccor

dingly

fro

m inc

eptio

n. An

y Dev

iation

s to

norm

al pr

ocur

emen

t pro

cess

es as

do

cume

nted i

n the

mun

icipa

lity's

Supp

ly Ch

ain M

anag

emen

t poli

cy,

shou

ld be

appr

oved

by th

e de

signa

ted le

vel o

f auth

ority

and

captu

red t

imely

in a

devia

tions

re

gister

. Fur

therm

ore,

such

de

viatio

ns ar

e to b

e sup

porte

d by

relev

ant d

ocum

entat

ion to

su

bstan

tiate

the pr

opos

ed co

urse

of

actio

n.

07

23

Proc

urem

ent &

Co

ntrac

ts Ma

nage

ment

(Bids

) Irr

egula

r Exp

endit

ure

(Exc

.32)

All te

nder

s whic

h ach

ieved

the

minim

um qu

alifyi

ng sc

ore f

or

functi

onali

ty we

re re

gard

ed as

ac

cepta

ble te

nder

s and

wer

e ev

aluate

d fur

ther in

term

s of th

e pr

efere

nce p

oints.

(PPR

4(5)

)

Inter

nal

Contr

ols

Any

Dev

iation

s to n

orma

l pr

ocur

emen

t pro

cess

es as

do

cume

nted i

n the

mun

icipa

lity's

Supp

ly Ch

ain M

anag

emen

t poli

cy,

shou

ld be

appr

oved

by th

e de

signa

ted le

vel o

f auth

ority

and

captu

red t

imely

in a

devia

tions

re

gister

. Fur

therm

ore,

such

de

viatio

ns ar

e to b

e sup

porte

d by

relev

ant d

ocum

entat

ion to

su

bstan

tiate

the pr

opos

ed co

urse

of

actio

n.

Budg

et an

d Tr

easu

ry V

Make

dama

Ma

nage

r SCM

01

-Dec

-16

07

24

Proc

urem

ent &

Co

ntrac

ts Ma

nage

ment

(Bids

) Irr

egula

r Exp

endit

ure

(Exc

.32)

The c

ontra

ct wa

s awa

rded

to

the bi

dder

that

scor

ed th

e hig

hest

total

numb

er of

point

s. (P

PR 6(

5) &

11(5

))

Inter

nal

Contr

ols

Any

Dev

iation

s to n

orma

l pr

ocur

emen

t pro

cess

es as

do

cume

nted i

n the

mun

icipa

lity's

Supp

ly Ch

ain M

anag

emen

t poli

cy,

shou

ld be

appr

oved

by th

e de

signa

ted le

vel o

f auth

ority

and

captu

red t

imely

in a

devia

tions

re

gister

. Fur

therm

ore,

such

de

viatio

ns ar

e to b

e sup

porte

d by

relev

ant d

ocum

entat

ion to

su

bstan

tiate

the pr

opos

ed co

urse

of

actio

n.

Budg

et an

d Tr

easu

ry V

Make

dama

Ma

nage

r SCM

01

-Dec

-16

07

25

Proc

urem

ent &

Co

ntrac

ts Ma

nage

ment

(Bids

)

If two

or m

ore t

ende

rs we

re

equa

l in to

tal po

ints,

the co

ntrac

t wa

s awa

rded

to th

e ten

der

Inter

nal

Contr

ols

Any

Dev

iation

s to n

orma

l pr

ocur

emen

t pro

cess

es as

do

cume

nted i

n the

mun

icipa

lity's

Budg

et an

d Tr

easu

ry V

Make

dama

Ma

nage

r SCM

01

-Dec

-16

161

COAF

# EX

C #

Exce

ptio

n He

adin

g Su

mm

ary o

f Fin

ding

Na

ture

Su

gges

ted

Cont

rol

Impr

ovem

ents

Di

rect

orat

e HO

D Re

spon

sible

Offic

ial

Tim

e Lin

e

Irreg

ular E

xpen

ditur

e (E

xc.32

) sc

oring

the h

ighes

t poin

ts for

B-

BBEE

. (PP

R 6(

5) &

11(5

)) Su

pply

Chain

Man

agem

ent p

olicy

, sh

ould

be ap

prov

ed by

the

desig

nated

leve

l of a

uthor

ity an

d ca

pture

d tim

ely in

a de

viatio

ns

regis

ter. F

urthe

rmor

e, su

ch

devia

tions

are t

o be s

uppo

rted b

y re

levan

t doc

umen

tation

to

subs

tantia

te the

prop

osed

cour

se

of ac

tion.

07

26

Pr

ocur

emen

t &

Contr

acts

Mana

geme

nt (B

ids)

Irreg

ular E

xpen

ditur

e (E

xc.32

)

Howe

ver,

when

func

tiona

lity is

pa

rt of

the ev

aluati

on pr

oces

s an

d two

or m

ore t

ende

rs ha

ve

scor

ed eq

ual p

oints

includ

ing

equa

l pre

feren

ce po

ints f

or B

-BB

EE, th

e con

tract

was

awar

ded t

o the

tend

er sc

oring

the

high

est s

core

for

functi

onali

ty.(P

PR 6(

5) &

11(5

))

Inter

nal

Contr

ols

Any

Dev

iation

s to n

orma

l pr

ocur

emen

t pro

cess

es as

do

cume

nted i

n the

mun

icipa

lity's

Supp

ly Ch

ain M

anag

emen

t poli

cy,

shou

ld be

appr

oved

by th

e de

signa

ted le

vel o

f auth

ority

and

captu

red t

imely

in a

devia

tions

re

gister

. Fur

therm

ore,

such

de

viatio

ns ar

e to b

e sup

porte

d by

relev

ant d

ocum

entat

ion to

su

bstan

tiate

the pr

opos

ed co

urse

of

actio

n.

Budg

et an

d Tr

easu

ry V

Make

dama

Ma

nage

r SCM

01

-Dec

-16

07

27

Proc

urem

ent &

Co

ntrac

ts Ma

nage

ment

(Bids

) Irr

egula

r Exp

endit

ure

(Exc

.32)

Evalu

ation

and a

djudic

ation

cri

teria

appli

ed in

evalu

ating

and

adjud

icatin

g the

bids

are t

he

same

as th

ose i

ndica

ted in

the

origi

nal b

id do

cume

ntatio

ns.

(SCM

reg.

28(1

)(a)(i

))

Inter

nal

Contr

ols

Any

Dev

iation

s to n

orma

l pr

ocur

emen

t pro

cess

es as

do

cume

nted i

n the

mun

icipa

lity's

Supp

ly Ch

ain M

anag

emen

t poli

cy,

shou

ld be

appr

oved

by th

e de

signa

ted le

vel o

f auth

ority

and

captu

red t

imely

in a

devia

tions

re

gister

. Fur

therm

ore,

such

de

viatio

ns ar

e to b

e sup

porte

d by

relev

ant d

ocum

entat

ion to

su

bstan

tiate

the pr

opos

ed co

urse

of

actio

n.

Budg

et an

d Tr

easu

ry V

Make

dama

Ma

nage

r SCM

01

-Dec

-16

07

28

Proc

urem

ent &

Co

ntrac

ts Ma

nage

ment

(Bids

) Irr

egula

r Exp

endit

ure

(Exc

.32)

If the

invit

ation

for b

ids

stipu

lated

90/10

prefe

renc

e po

int sy

stem

will b

e use

d and

all

bids r

eceiv

ed w

ere e

qual

or

below

R1 m

illion

the t

ende

r was

ca

ncell

ed an

d re-

adve

rtised

as

Inter

nal

Contr

ols

Any

Dev

iation

s to n

orma

l pr

ocur

emen

t pro

cess

es as

do

cume

nted i

n the

mun

icipa

lity's

Supp

ly Ch

ain M

anag

emen

t poli

cy,

shou

ld be

appr

oved

by th

e de

signa

ted le

vel o

f auth

ority

and

captu

red t

imely

in a

devia

tions

Budg

et an

d Tr

easu

ry V

Make

dama

Ma

nage

r SCM

01

-Dec

-16

162

COAF

# EX

C #

Exce

ptio

n He

adin

g Su

mm

ary o

f Fin

ding

Na

ture

Su

gges

ted

Cont

rol

Impr

ovem

ents

Di

rect

orat

e HO

D Re

spon

sible

Offic

ial

Tim

e Lin

e

a 80/2

0 pre

feren

ce po

ints.(

PPR

8)

regis

ter. F

urthe

rmor

e, su

ch

devia

tions

are t

o be s

uppo

rted b

y re

levan

t doc

umen

tation

to

subs

tantia

te the

prop

osed

cour

se

of ac

tion.

07

29

Pr

ocur

emen

t &

Contr

act M

anag

emen

t (B

ids) U

neco

nomi

cal

(Exc

.33)

The p

rocu

reme

nt wa

s not

econ

omica

l - the

good

s/ se

rvice

s wer

e not

obtai

ned a

t a

reas

onab

le pr

ice. (

MFMA

sec

62(1

)(a) a

nd M

FMA

sec 9

5(a)

)

Inter

nal

Contr

ols

Any

Dev

iation

s to n

orma

l pr

ocur

emen

t pro

cess

es as

do

cume

nted i

n the

mun

icipa

lity's

Supp

ly Ch

ain M

anag

emen

t poli

cy,

shou

ld be

appr

oved

by th

e de

signa

ted le

vel o

f auth

ority

and

captu

red t

imely

in a

devia

tions

re

gister

. Fur

therm

ore,

such

de

viatio

ns ar

e to b

e sup

porte

d by

relev

ant d

ocum

entat

ion to

su

bstan

tiate

the pr

opos

ed co

urse

of

actio

n.

Budg

et an

d Tr

easu

ry V

Make

dama

Ma

nage

r SCM

01

-Dec

-16

08

30

Valua

tion R

oll:

Valua

tion r

oll is

not

displa

yed o

n the

mu

nicipa

lity's

webs

ite

(Exc

.41)

Per in

spec

tion o

f the N

gqus

hwa

Munic

ipality

's we

bsite

, co

nfirm

ed th

at the

mun

icipa

lity's

valua

tion r

oll is

not d

isplay

ed on

the

web

site.

Comp

lianc

e Ma

nage

ment

to en

sure

that

the

valua

tion r

oll is

uploa

ded a

nd

displa

yed o

n the

mun

icipa

lity's

webs

ite.

Budg

et an

d Tr

easu

ry V

Make

dama

Ma

nage

r Esta

te NO

T FO

R BT

O

08

31

Rev

enue

from

ex

chan

ge

trans

actio

ns: D

irect

incom

e reg

ister

is no

t re

conc

iled t

o the

re

levan

t dire

ct inc

ome

vote

on a

month

ly ba

sis (E

xc.45

)

The r

egist

ers f

or ha

ll ren

tals a

nd

incom

e fro

m pu

blic t

oilets

are

not r

econ

ciled

to th

e dire

ct inc

ome v

ote on

a mo

nthly

basis

.

Inter

nal

Contr

ols

Mana

geme

nt sh

ould

ensu

re th

at re

gister

s for

hall r

ental

s and

inc

ome f

rom

publi

c toil

ets ar

e re

conc

iled t

o the

dire

ct inc

ome

vote

on a

month

ly ba

sis.

Budg

et an

d Tr

easu

ry V

Make

dama

Ma

nage

r Rev

enue

Mo

nthly

Reco

ns 31

Ju

ly 20

16 to

da

te

08

32

Reve

nue f

rom

exch

ange

tra

nsac

tions

: Bala

nce

of ha

ll hire

depo

sits

per r

egist

er is

not

reco

ncile

d mon

thly t

o the

gene

ral le

dger

(E

xc.46

)

The b

alanc

e of d

epos

its fo

r hall

hi r

e held

acco

rding

to th

e re

gister

of de

posit

s is n

ot re

conc

iled t

o the

gene

ral le

dger

on

a mo

nthly

basis

.

Inter

nal

Contr

ols

Mana

geme

nt sh

ould

ensu

re th

at the

balan

ce of

depo

sits f

or ha

ll hire

he

ld ac

cord

ing to

the r

egist

er of

de

posit

s is r

econ

ciled

to th

e ge

nera

l ledg

er on

a mo

nthly

basis

.

Budg

et an

d Tr

easu

ry V

Make

dama

Ma

nage

r Rev

enue

Mo

nthly

Reco

ns 31

Ju

ly 20

16 to

da

te

08

33

Rece

ivable

s fro

m ex

chan

ge tr

ansa

ction

: Du

ring t

he te

sting

of in

teres

t ea

rned

from

outst

andin

g Int

erna

l Co

ntrols

Ma

nage

ment

to ha

ve an

inter

est

reca

lculat

ion m

odule

embe

dded

in

Budg

et an

d Tr

easu

ry V

Make

dama

Ma

nage

r Rev

enue

W

ill inv

estig

ate

163

COAF

# EX

C #

Exce

ptio

n He

adin

g Su

mm

ary o

f Fin

ding

Na

ture

Su

gges

ted

Cont

rol

Impr

ovem

ents

Di

rect

orat

e HO

D Re

spon

sible

Offic

ial

Tim

e Lin

e

Inter

est o

n ou

tstan

ding

rece

ivable

s is

incom

plete

(Exc

.52)

debto

rs, no

ted th

at no

inter

est

was c

harg

ed on

Tra

nsne

t's

custo

mer a

ccou

nt (A

ccou

nt Nu

mber

: 100

0070

4). A

t the e

nd

of Ju

ne 20

16 ha

d the

follo

wing

ag

eing:

Paste

l evo

lution

to re

calcu

late

inter

est a

nd en

sure

accu

racy

and

comp

leten

ess t

here

of

09

34

Gove

rnme

nt gr

ants

and s

ubsid

ies: In

voice

no

t VAT

comp

liant

(Exc

.56)

Durin

g the

audit

, the f

ollow

ing

issue

s wer

e ide

ntifie

d in t

he

invoic

es pa

id by

the

munic

ipality

:

Inter

nal

Contr

ols

An in

voice

comp

liant

chec

klist

shou

ld be

deve

loped

and

imple

mente

d by E

xpen

ditur

e and

att

ache

d to e

ach p

ayme

nt vo

uche

r. Th

e che

cklis

t sho

uld be

comp

leted

by

a Ju

nior o

fficial

and s

igned

off

by a

Senio

r Offic

ial.

Budg

et an

d Tr

easu

ry V

Make

dama

Ma

nage

r Exp

endit

ure

31-M

ar-1

7

12

35

Expe

nditu

re: G

oods

re

ceive

d note

not

attac

hed

Whil

st au

diting

repa

irs an

d ma

inten

ance

it wa

s note

d tha

t go

ods r

eceiv

ed no

te/

confi

rmati

on of

good

s and

se

rvice

s ren

dere

d for

the

follow

ing pa

ymen

ts wa

s not

subm

itted f

or au

dit pu

rpos

es

Finan

cial

Mana

geme

nt to

stamp

''Goo

ds an

d Se

rvice

s'' ha

ve be

en re

ceive

d on

the pa

ymen

t vou

cher

and /

invo

ice.

Budg

et an

d Tr

easu

ry V

Make

dama

Na

me: N

Mhlo

ngo

Posit

ion:E

xpen

ditur

e Ma

nage

r

01-D

ec-1

6

12

36

Repa

irs an

d Ma

inten

ance

: Amo

unt

reco

gnise

d in t

he G

L do

es no

t agr

ee w

ith

the in

voice

amou

nt (E

xc.63

)

Whil

st au

diting

repa

irs an

d ma

inten

ance

it wa

s note

d tha

t the

follo

wing

paym

ents

were

ina

ccur

ately

reco

rded

in th

e ge

nera

l ledg

er.

Finan

cial

Mana

geme

nt sh

ould

ensu

re th

at the

re is

a re

view

of tra

nsac

tions

pr

oces

sed i

n the

gene

ral le

dger

to

ensu

re th

at the

y are

corre

ctly

class

ified.

The C

hief A

ccou

ntant

shou

ld re

gular

ly sc

an th

e Gen

eral

ledge

r to i

denti

fy po

ssibl

e om

ission

s or e

rrors.

Budg

et an

d Tr

easu

ry V

Make

dama

Ma

nage

r Exp

endit

ure

01-D

ec-1

6

12

37

Repa

irs an

d Ma

inten

ance

: Ex

pend

iture

inc

orre

ctly c

lassif

ied

as

Repa

irs/m

ainten

ance

(E

xc.64

)

Whil

st au

diting

repa

irs an

d ma

inten

ance

it wa

s note

d tha

t the

follo

wing

paym

ents

were

inc

orre

ctly c

lassif

ied as

repa

irs

and m

ainten

ance

. [refe

r to

CoAF

12 of

2016

for d

etaile

d ex

cepti

ons]

Finan

cial

Mana

geme

nt sh

ould

ensu

re th

at the

re is

a re

view

of tra

nsac

tions

pr

oces

sed i

n the

gene

ral le

dger

to

ensu

re th

at the

y are

corre

ctly

class

ified.

The C

hief A

ccou

ntant

shou

ld re

gular

y sca

n the

Gen

eral

ledge

r to i

denti

fy ins

tance

s of

misc

lassif

icatio

ns.

Budg

et an

d Tr

easu

ry V

Make

dama

Na

me: T

Matt

hyse

n Po

sition

: Chie

f Ac

coun

tant

01-D

ec-1

6

15

38

Emplo

yee C

ost: N

o em

ploym

ent c

ontra

ct on

file (

Exc.3

8)

No em

ploym

ent c

ontra

cts on

file

for th

e foll

owing

emplo

yees

, the

refor

e was

unab

le to

confi

rm

wheth

er th

e noti

ce pe

riod

Inter

nal

Contr

ols

Mana

geme

nt sh

ould

ensu

re a

prop

er do

cume

nt ma

nage

ment

and

filing

syste

m in

place

. Any

do

cume

ntatio

n req

ueste

d sho

uld

Corp

orate

Se

rvice

s N

Mazw

ayi

Name

: Mkh

useli

Mx

ekez

o Po

sition

: Hum

an

Reso

urce

s Man

ager

31-M

ar-1

7

164

COAF

# EX

C #

Exce

ptio

n He

adin

g Su

mm

ary o

f Fin

ding

Na

ture

Su

gges

ted

Cont

rol

Impr

ovem

ents

Di

rect

orat

e HO

D Re

spon

sible

Offic

ial

Tim

e Lin

e

stipu

lated

by th

e emp

loyer

on

the co

ntrac

t is in

acco

rdan

ce

with

pres

cripts

.

be si

gned

off o

n a se

para

te do

cume

nt re

gister

. A ch

eckli

st ou

tlining

the m

inimu

m do

cume

nts

to be

stor

ed in

a pe

rsonn

el file

sh

ould

be de

velop

ed an

d im

pleme

nted.

The c

heck

list is

to be

sig

ned o

ff by b

oth th

e pre

pare

r and

re

viewe

r 15

39

Em

ploye

e Cos

ts: S

taff

debt

not r

ecov

ered

(E

xc.39

)

Staff

debt

not r

ecov

ered

from

the

emplo

yee (

T Ms

i) Int

erna

l Co

ntrols

Ma

nage

ment

to ins

tigate

debt

reco

very

proc

edur

es an

d ens

ure

debts

are r

ecov

erab

le fro

m em

ploye

es. C

ost b

enefi

t exe

rcise

sh

ould

howe

ver b

e con

sider

ed. A

let

ter of

Dem

and s

hould

be is

sued

to

the em

ploye

e con

cern

ed.

Corp

orate

Se

rvice

s N

Mazw

ayi

Name

: Mkh

useli

Mx

ekez

o Po

sition

: Hum

an

Reso

urce

s Man

ager

31-M

ar-1

7

16

40

Proc

urem

ent a

nd

Contr

act

Mana

geme

nt:

Appli

catio

n of S

CM

Regu

lation

32

(Exc

.42)

The m

unici

pality

proc

ured

the

follow

ing co

ntacts

thro

ugh

appli

catio

n of s

ectio

n 32 o

f SCM

re

gulat

ion; h

owev

er th

ese

contr

acts

were

not v

alidly

pr

ocur

ed by

othe

r org

ans o

f the

state

as th

ey ha

ve re

sulte

d in

irreg

ulariti

es. (

R 8 7

94 28

2.00)

Inter

nal

Contr

ols

Mana

geme

nt sh

ould

ensu

re th

at all

co

ntrac

ts pr

ocur

ed th

roug

h SCM

re

gulat

ion 32

are v

alidly

proc

ured

by

the o

ther o

rgan

s of th

e stat

e. A

confi

rmati

on Le

tter t

o tha

t effe

ct sh

ould

be so

ught.

Budg

et an

d Tr

easu

ry V

Make

dama

Ma

nage

r SCM

01

-Jan-

17

17

41

Asse

ts: S

tands

at

spor

ts fie

ld no

t Ca

pitali

sed

Durin

g Phy

sical

verifi

catio

n of

park

facilit

ies, w

e note

d tha

t sta

nds a

t the f

ollow

ing sp

orts

field

were

not a

ccou

nted f

or an

d de

prec

iated

sepa

ratel

y in f

ixed

asse

ts re

gister

.• Gl

enmo

re

spor

ts fie

ld • P

eddie

Spo

rt fie

ld.Ot

her s

ports

fields

may

als

o be i

mpac

ted an

d it w

ould

be ne

cess

ary t

o ree

xami

ne th

e wh

ole po

pulat

ion of

spor

ts fie

lds. L

ack o

f pro

per

asse

ssme

nt for

unbu

ndlin

g of

spor

ts fie

ld as

sets.

Depr

eciat

ion

for al

l spo

rts fie

ld mi

ght b

e ma

terial

ly mi

sstat

ed.

Finan

cial

Mana

geme

nt sh

ould

ensu

re th

at

an as

set c

ount

is pe

rform

ed

annu

ally a

nd th

e ass

ets re

gister

on

the sy

stem

is up

dated

. Ass

et re

gister

shou

ld be

sign

ed an

d da

ted as

evide

nce o

f wor

k don

e

Budg

et an

d Tr

easu

ry V

Make

dama

Na

me: T

Ma

tthys

enPo

sition

: Ch

ief A

ccou

ntant

2/28/2

017.

Half y

early

AF

S to

refle

ct co

rrect

asse

t inf

orma

tion

165

COAF

# EX

C #

Exce

ptio

n He

adin

g Su

mm

ary o

f Fin

ding

Na

ture

Su

gges

ted

Cont

rol

Impr

ovem

ents

Di

rect

orat

e HO

D Re

spon

sible

Offic

ial

Tim

e Lin

e

17

42

Asse

ts: B

uildin

gs no

t in

good

phys

ical

cond

ition

Durin

g phy

sical

verifi

catio

n of

asse

ts we

noted

that

the

follow

ing bu

ilding

s are

not in

go

od w

orkin

g con

dition

s and

we

re no

t teste

d for

impa

irmen

t ind

icator

s at th

e end

of th

e re

portin

g per

iod.

Finan

cial

Mana

geme

nt sh

ould

ensu

res t

hat

the as

sets

of the

mun

icipa

lity ar

e we

ll main

taine

d. Re

pairs

and

maint

enan

ce of

the a

ssets

shou

ld oc

cur a

t reg

ular in

terva

ls to

ensu

re

that th

e ass

ets ar

e fun

ction

ing

optim

ally t

hrou

ghou

t their

usefu

l liv

es. W

here

ther

e are

sign

s of

impa

irmen

t, man

agem

ent s

hould

re

vise t

he us

eful li

ves a

nd/ o

r re

sidua

l valu

es of

the a

ssets

to

ensu

re th

at as

sets

are c

arrie

d at

the co

rrect

carry

ing va

lues.

Budg

et an

d Tr

easu

ry V

Make

dama

Na

me: T

Matt

hyse

n Po

sition

: Chie

f Ac

coun

tant

2/28/2

017.

Half y

early

AF

S to

refle

ct co

rrect

asse

t inf

orma

tion

17

43

Ass

ets: U

nbun

dling

of

Asse

t Reg

ister

W

e rev

iewed

the v

aluati

on

repo

rt for

unbu

ndlin

g of a

ssets

re

gister

and n

oted t

hat th

e mu

nicipa

lity un

bund

led ro

ad

asse

ts ba

sed o

n the

ratio

of

30:70

for r

oad s

urfac

e and

road

str

uctur

e res

pecti

vely,

howe

ver

we co

uld no

t asc

ertai

n the

me

thodo

logy a

nd as

sump

tions

us

ed to

unbu

ndle

cost

for

Glen

more

spor

ts fie

ld in

to dif

feren

t com

pone

nts.

Finan

cial

Mana

geme

nt sh

ould

ensu

re th

at an

asse

t cou

nt is

perfo

rmed

an

nuall

y and

the a

ssets

regis

ter on

the

syste

m is

upda

ted. A

sset

regis

ter sh

ould

be si

gned

and

dated

as ev

idenc

e of w

ork d

one

Budg

et an

d Tr

easu

ry V

Make

dama

Na

me: T

Matt

hyse

n Po

sition

: Chie

f Ac

coun

tant

2/28/2

017.

Half y

early

AF

S to

refle

ct co

rrect

asse

t inf

orma

tion

17

44

Ass

ets: A

ssets

re

cord

ed at

Zer

o Th

e mun

icipa

lity di

d not

revie

w an

d rev

ise th

e use

ful lif

e of th

e fol

lowing

acce

ss ro

ad an

d as

resu

lts th

ey w

ere f

ully

depr

eciat

ed an

d rec

orde

d at

zero

. This

is no

t con

sisten

t with

GR

AP st

anda

rd as

ther

e are

ec

onom

ic be

nefits

and s

ervic

e po

tentia

l der

iving

from

the u

se

of the

se ro

ads b

y the

co

mmun

ity m

embe

rs.

Finan

cial

Mana

geme

nt sh

ould

ensu

re th

at an

asse

t cou

nt is

perfo

rmed

an

nuall

y and

the a

ssets

regis

ter on

the

syste

m is

upda

ted. A

sset

regis

ter sh

ould

be si

gned

and

dated

as ev

idenc

e of w

ork d

one

Budg

et an

d Tr

easu

ry V

Make

dama

Na

me: T

Ma

tthys

enPo

sition

: Ch

ief A

ccou

ntant

28-F

eb-1

7

19

45

Gov

ernm

ent g

rants

an

d sub

sidies

: Am

ount

per t

he

expe

nditu

re ge

nera

l

The g

ener

al led

ger a

ccou

nt do

no

t agr

ee to

the r

ecalc

ulated

am

ount

and t

here

fore

Gove

rnme

nt gr

ant r

even

ue an

d

Finan

cial

Gran

ts re

conc

iliatio

ns sh

ould

be

perfo

rmed

on a

month

ly ba

sis to

en

sure

accu

racy

of th

e rec

orde

d inf

orma

tion

Budg

et an

d Tr

easu

ry V

Make

dama

Bu

dget

& Re

portin

g Ma

nage

r Mo

nthly

Reco

ns

166

COAF

# EX

C #

Exce

ptio

n He

adin

g Su

mm

ary o

f Fin

ding

Na

ture

Su

gges

ted

Cont

rol

Impr

ovem

ents

Di

rect

orat

e HO

D Re

spon

sible

Offic

ial

Tim

e Lin

e

ledge

r acc

ount

does

no

t agr

ee to

the

invoic

e amo

unt

(Exc

.90)

expe

nditu

re ha

s bee

n un

derst

ated b

y an e

xtrap

olated

am

ount

of (R

29 66

2.39)

20

46

VAT

rece

ivable

: Su

ppor

ting s

ched

ule

could

not b

e pro

vided

(E

xc.11

3)

sche

dule

could

not b

e pro

vided

to

supp

ort th

e VAT

rece

ivable

am

ounti

ng to

R46

2 295

.13

Inter

nal

Contr

ols

The A

ccou

ntant

(who

is in

contr

ol of

VAT

reco

ns),

Lulam

ile

Gway

iman

i, is r

espo

nsibl

e for

the

safek

eepin

g of a

ll VAT

supp

ortin

g do

cume

ntatio

n (Re

cons

, VAT

20

1's, S

ched

ules o

f Outs

tandin

g inv

oices

, ect)

Budg

et an

d Tr

easu

ry V

Make

dama

Na

me: T

Matt

hyse

n Po

sition

: Chie

f Ac

coun

tant

01-Ju

l-16

20

47

VAT

Rece

ivable

: VAT

on

prior

year

invo

ices

not r

ecov

erab

le fro

m SA

RS (E

xc.10

8)

Invoic

es w

ith a

VAT

portio

n am

ounti

ng to

R1 0

36 90

0 (pr

ior

and c

urre

nt ye

ar in

voice

s) we

re

rejec

ted by

SAR

S as

a re

sult o

f no

t bein

g VAT

comp

liant

and

the m

unici

pality

can n

o lon

ger

claim

this

amou

nt fro

m SA

RS

(VAT

rece

ivable

not

reco

vera

ble)

Inter

nal

Contr

ols

mana

geme

nt to

perfo

rms o

ngoin

g ex

pend

iture

testi

ng to

iden

tify no

n-va

t com

plian

t invo

ices.

Chec

klist

for V

at Co

mplia

nt Inv

oices

be

imple

mente

d and

attac

hed t

o eve

ry pa

ymen

t vou

cher

. Che

cklis

t to be

sig

ned o

f by b

oth th

e pre

pare

r and

re

viwer

.

Budg

et an

d Tr

easu

ry V

Make

dama

Ma

nage

r Exp

endit

ure

31-M

ar-1

7

21

48

Use o

f Con

sulta

nt -

Inter

nal C

ontro

l De

ficien

cies (

Exc.1

27) At

the t

ime o

f emp

loyme

nt of

the

cons

ultan

t the I

ntern

al Au

dit

Mana

ger a

nd in

terns

wer

e em

ploye

d. Th

ey ha

d the

skills

ne

cess

ary t

o per

form

inter

nal

audit

dutie

s. [O

HS]

Inter

nal

Contr

ols

Prior

to th

e app

ointm

ent o

f a

servi

ce pr

ovide

r to p

rovid

e co-

sour

cing s

ervic

es, a

thor

ough

skils

ga

p ana

lysis

shou

ld be

cond

ucted

an

d doc

umen

ted to

infor

m the

so

urcin

g of a

servi

ce pr

ovide

r and

a s

kills

trans

fere p

lan be

de

velop

ed, im

pleme

nted a

nd

monit

ored

.

Offic

e of th

e Mu

nicipa

l Ma

nage

r

T Mn

yimba

Na

me: N

Mba

du

Posit

ion: I

ntern

al Au

dit

Mana

ger

31-M

ar-1

7

21

49

Use o

f Con

sulta

nt -

Inter

nal C

ontro

l De

ficien

cies (

Exc.1

27) Pe

r insp

ectio

n of th

e ter

ms of

re

feren

ce it

was n

oted t

hat th

e tra

nsfer

of sk

ill wa

s not

includ

ed. In

the c

urre

nt ye

ar, n

o ev

idenc

e of tr

ansfe

r of s

kills

and

less r

elian

ce on

the c

onsu

ltant

was n

oted.

[Arm

s Aud

it an

d Ri

sk S

olut

ion,

Cam

elsa]

Inter

nal

Contr

ols

Prior

to th

e app

ointm

ent o

f a

servi

ce pr

ovide

r to p

rovid

e co-

sour

cing s

ervic

es, a

thor

ough

skils

ga

p ana

lysis

shou

ld be

cond

ucted

an

d doc

umen

ted to

infor

m the

so

urcin

g of a

servi

ce pr

ovide

r and

a s

kills

trans

fere p

lan be

de

velop

ed, im

pleme

nted a

nd

monit

ored

.

Budg

et an

d Tr

easu

ry V

Make

dama

Na

me: T

Ma

tthys

enPo

sition

: Ch

ief A

ccou

ntant

Outst

andin

g

167

COAF

# EX

C #

Exce

ptio

n He

adin

g Su

mm

ary o

f Fin

ding

Na

ture

Su

gges

ted

Cont

rol

Impr

ovem

ents

Di

rect

orat

e HO

D Re

spon

sible

Offic

ial

Tim

e Lin

e

21

50

Use o

f Con

sulta

nt -

Inter

nal C

ontro

l De

ficien

cies (

Exc.1

27) Pe

r insp

ectio

n of th

e con

tract

the re

spec

tive r

espo

nsibi

lities

of

the m

unici

pality

and t

he

cons

ultan

t wer

e not

clear

ly de

fined

. [Ar

ms A

udit

and

Risk

So

lutio

n, C

amels

a]

Inter

nal

Contr

ols

The m

inimu

m re

quire

ments

of

contr

act s

hould

be ad

here

d to

durin

g the

prep

arati

on of

ou

tsour

cing o

r co-

sour

cing

contr

acts

betw

een s

ervic

e pr

ovide

rs an

d the

mun

icipa

lity.

The r

oles a

nd re

spon

sibilit

ies of

bo

th pa

rties s

hould

be cl

early

de

fined

on th

e con

tract

as a

basis

of

meas

urme

nt of

perfo

rman

ce by

the

servi

ce pr

ovide

r. Up

on pr

epar

ation

of th

e con

tract

by

the de

signa

ted of

ficial

or U

nit, it

sh

ould

be ve

tted b

y a s

uitab

ly qu

alifie

d offic

ial (i.

e. Le

gal/c

orpo

rate

servi

ces).

Budg

et an

d Tr

easu

ry V

Make

dama

Na

me: T

Matt

hyse

n Po

sition

: Chie

f Ac

coun

tant

Outst

andin

g

21

51

Use o

f Con

sulta

nts:

Inter

nal C

ontro

l De

ficien

cy (E

xc.12

6)

Thro

ugh e

nquir

y, it h

as be

en

deter

mine

d tha

t the m

unici

pality

do

es no

t hav

e a po

licy/s

trateg

y in

place

that

defin

es th

e main

pu

rpos

es fo

r app

ointin

g co

nsult

ants.

Inter

nal

Contr

ols

The m

unici

pality

shou

ld de

velop

a po

licy/s

trateg

y tha

t defi

nes t

he

main

purp

oses

for a

ppoin

ting

cons

ultan

ts.

The r

esult

ant p

olicy

/ stra

tegy

shou

ld be

revie

wed a

nd ap

prov

ed

by E

XCO

and e

ndor

sed f

or

adop

tion b

y Cou

ncil.

Corp

orate

Se

rvice

s/Bud

get

and T

reas

ury

V Ma

keda

ma/N

Ma

zway

i Na

me: M

khus

eli

Mxek

ezo

Posit

ion: H

uman

Re

sour

ces M

anag

er

31-M

ar-1

7

21

52

Use o

f Con

sulta

nts:

Inter

nal C

ontro

l De

ficien

cy (E

xc.12

6)

Per in

spec

tion o

f the p

rior y

ear

mana

geme

nt re

port,

the

follow

ing w

eakn

esse

s wer

e ide

ntifie

d:1.D

eficie

ncies

noted

in

the ap

point

ment

of co

nsult

ants

as th

e agr

eeme

nt did

not m

ake

prov

ision

for t

he su

fficien

t tra

nsfer

of sk

ills to

perm

anen

t fin

ance

staff

.

Inter

nal

Contr

ols

Prior

to th

e app

ointm

ent o

f a

servi

ce pr

ovide

r to p

rovid

e co-

sour

cing s

ervic

es, a

thor

ough

skils

ga

p ana

lysis

shou

ld be

cond

ucted

an

d doc

umen

ted to

infor

m the

so

urcin

g of a

servi

ce pr

ovide

r.The

ide

ntifie

d skil

ls ga

p sho

uld th

en be

tra

nslat

ed in

to a S

kills

Tran

sfer

Plan

to be

inco

rpor

ated i

n the

Se

rvice

Leve

l Agr

eeme

nt be

twee

n the

servi

ce pr

ovide

r and

the

munic

ipality

.

All D

epar

tmen

ts Al

l HOD

s Al

l Dep

artm

ents

Ongo

ing

168

COAF

# EX

C #

Exce

ptio

n He

adin

g Su

mm

ary o

f Fin

ding

Na

ture

Su

gges

ted

Cont

rol

Impr

ovem

ents

Di

rect

orat

e HO

D Re

spon

sible

Offic

ial

Tim

e Lin

e

21

53

Use o

f Con

sulta

nts:

Inter

nal C

ontro

l De

ficien

cy (E

xc.12

6)

2. Th

ere w

as a

lack o

f skil

ls tra

nsfer

and o

ver-r

elian

ce on

the

wor

k of c

onsu

ltants

. Ma

nage

ment

did no

t take

actio

n to

addr

ess t

he w

eakn

esse

s on

the us

e and

man

agem

ent o

f co

nsult

ants

For e

xamp

le, th

e pr

epar

ation

and m

ainten

ance

of

the fix

ed as

set r

egist

er th

e mu

nicipa

lity st

ill us

e the

co

nsult

ants,

the f

uncti

ons

relat

ing to

the p

repa

ratio

n of th

e fin

ancia

l stat

emen

ts all

sc

hedu

les ar

e still

done

by th

e co

nsult

ants,

the r

eview

of th

e AF

S ar

e still

done

by

cons

ultan

ts an

d add

itiona

l co

nsult

ants

has b

een a

ppoin

ted

for in

terna

l aud

it fun

ction

.

Inter

nal

Contr

ols

Prior

to th

e app

ointm

ent o

f a

servi

ce pr

ovide

r to p

rovid

e co-

sour

cing s

ervic

es, a

thor

ough

skils

ga

p ana

lysis

shou

ld be

cond

ucted

an

d doc

umen

ted to

infor

m the

so

urcin

g of a

servi

ce pr

ovide

r. Th

e ide

ntifie

d skil

ls ga

p sho

uld

then b

e tra

nslat

ed in

to a S

kills

Tran

sfer P

lan to

be in

corp

orate

d in

the S

ervic

e Lev

el Ag

reem

ent

betw

een t

he se

rvice

prov

ider a

nd

the m

unici

pality

.

All D

epar

tmen

ts Al

l HOD

s Al

l Dep

artm

ents

Ongo

ing

21

54

Use o

f Con

sulta

nts:

Inter

nal C

ontro

l De

ficien

cy (E

xc.12

6)

Thro

ugh d

iscus

sion i

t has

been

de

termi

ned,

mana

geme

nt do

es

not p

repa

re fo

rmal

repo

rts on

the

exten

t of w

ork p

erfor

med b

y co

nsult

ants,

also

ther

e is n

o ev

idenc

e tha

t this

has b

een

cons

idere

d as m

anag

emen

t has

no

t take

n acti

on to

redu

ce th

e ex

tent o

f wor

k per

forme

d by

cons

ultan

ts.

Inter

nal

Contr

ols

A St

anda

rdise

d rep

ort te

mplat

e sh

ould

be de

velop

ed an

d im

pleme

nted f

or re

portin

g on t

he

perfo

rman

ce of

Con

sulta

nts

Budg

et an

d Tr

easu

ry V

Make

dama

Ma

nage

r SCM

31

-Jan-

16

21

55

Use o

f Con

sulta

nts:

Irreg

ular a

nd N

on

Comp

lianc

e (Ex

c.128

)

Per in

spec

tion o

f the t

erms

and

cond

itions

of th

e con

tract

enter

ed in

to by

partie

s, it h

as

been

noted

that

such

a cla

use

had n

ot be

en in

clude

d. [C

AMEL

SA an

d Ar

ms A

udit

and

RIsk

Sol

utio

n]SC

M re

quire

men

t not

com

plied

wi

th :-

The c

ontra

ct sti

pulat

es

the te

rms a

nd co

nditio

ns fo

r the

Inter

nal

Contr

ols

The m

inimu

m re

quire

ments

of

contr

act s

hould

be ad

here

d to

durin

g the

prep

arati

on of

ou

tsour

cing o

r co-

sour

cing

contr

acts

betw

een s

ervic

e pr

ovide

rs an

d the

mun

icipa

lity.

Upon

prep

arati

on of

the c

ontra

ct by

the

desig

nated

offic

ial or

Unit

, it

shou

ld be

vette

d by

a suit

ably

quali

fied o

fficial

.

Offic

e of th

e Mu

nicipa

l Ma

nage

r

T Mn

yimba

Le

gal S

ervic

es

Ongo

ing

169

COAF

# EX

C #

Exce

ptio

n He

adin

g Su

mm

ary o

f Fin

ding

Na

ture

Su

gges

ted

Cont

rol

Impr

ovem

ents

Di

rect

orat

e HO

D Re

spon

sible

Offic

ial

Tim

e Lin

e

termi

natio

n of th

e con

tract

in the

ca

se of

non-

or

unde

rper

forma

nceM

FMA

sec

116(

1)(b

)(i)

21

56

Use o

f Con

sulta

nts:

Irreg

ular a

nd N

on

Comp

lianc

e (Ex

c.128

)

Per in

spec

tion o

f the t

erms

and

cond

itions

, the c

ontra

ct do

es no

t inc

lude a

pena

lty cl

ause

. [C

AMEL

SA an

d Ar

ms A

udit

and

RIsk

Sol

utio

n]

Note

: Nor

mall

y pen

alty

claus

es ar

e inc

lude

d in

the

Gene

ral C

ondi

tions

of

Cont

ract

(GCC

)

Inter

nal

Contr

ols

The m

inimu

m re

quire

ments

of

contr

act s

hould

be ad

here

d to

durin

g the

prep

arati

on of

ou

tsour

cing o

r co-

sour

cing

contr

acts

betw

een s

ervic

e pr

ovide

rs an

d the

mun

icipa

lity.

Upon

prep

arati

on of

the c

ontra

ct by

the

desig

nated

offic

ial or

Unit

, it

shou

ld be

vette

d by

a suit

ably

quali

fied o

fficial

.

Offic

e of th

e Mu

nicipa

l Ma

nage

r

T Mn

yimba

Le

gal S

ervic

es

Ongo

ing

21

57

Use o

f Con

sulta

nts:

Irreg

ular a

nd N

on

Comp

lianc

e (Ex

c.128

)

The t

otal e

xpen

ditur

e as a

t 31

Octob

er 20

16 of

R3 1

37 81

3 ex

ceed

s the

contr

act v

alue o

f R2

200 0

00 by

R93

7 813

.00.

[CAM

ELSA

] SC

M re

quire

men

t not

co

mpl

ied w

ith :-

Th

e tota

l pay

ments

/expe

nditu

re

made

unde

r the

contr

act u

p to

date

does

not e

xcee

d the

or

igina

l con

tract

price

plus

any

furthe

r app

rove

d exte

nsion

s to

the co

ntrac

t. SC

M re

gulat

ion. 5

Inter

nal

Contr

ols

The c

ontra

ct va

lue an

d the

total

co

ntrac

t exp

endit

ure m

ust b

e re

cord

ed an

d reg

ularly

upda

ted on

the

contr

acts

regis

ter. R

egist

er to

be

sign

ed as

evide

nce o

f Rev

iew

by a

senio

r offic

ial.

Budg

et an

d Tr

easu

ry V

Make

dama

Ma

nage

r SCM

31

-Mar

-17

22

58

Trad

e Pay

able:

Re

tentio

ns no

t re

cord

ed in

the

reten

tions

gene

ral

ledge

r acc

ount

(Exc

.117)

Durin

g the

audit

of re

tentio

ns it

was n

oted t

hat th

e foll

owing

re

tentio

ns (r

efer t

o CoA

F 22

of

2016

for s

ched

ule) s

electe

d fro

m the

invo

ices i

ssue

d to t

he

munic

ipality

by th

e sup

plier

s wa

s not

reco

rded

in th

e re

tentio

ns ge

nera

l ledg

er

Finan

cial

Mana

geme

nt sh

ould

ensu

re th

at the

y rev

iew an

d rec

oncil

e the

re

tentio

n list

ing at

the e

nd of

the

finan

cial p

eriod

to en

sure

that

all

reten

tions

with

held

are r

ecor

ded.

Reten

tions

shou

ld be

accru

ed fo

r ev

ery i

nvoic

e rec

eived

from

the

contr

actor

and n

ot at

the E

nd of

the

contr

act.

Budg

et an

d Tr

easu

ry V

Make

dama

Na

me: T

Ma

tthys

enPo

sition

: Ch

ief A

ccou

ntant

31-M

ar-1

7

170

COAF

# EX

C #

Exce

ptio

n He

adin

g Su

mm

ary o

f Fin

ding

Na

ture

Su

gges

ted

Cont

rol

Impr

ovem

ents

Di

rect

orat

e HO

D Re

spon

sible

Offic

ial

Tim

e Lin

e

acco

unt a

nd th

e rete

ntion

s lis

ting.

22

59

Trad

e Pay

ables

: Tr

ade p

ayab

les

balan

ces c

ould

not b

e ve

rified

(Exc

.119)

Durin

g the

audit

of tr

ade

paya

bles,

the fo

llowi

ng tr

ade

paya

bles b

alanc

es co

uld no

t be

verifi

ed:

Prov

ident:

Pen

sion C

ontro

l R

2 269

562.0

0 Me

dical

Aid C

ontro

l

R

2 922

451.0

0 SA

MWU

Strik

e Fun

d

R

635 1

68.00

Ot

her D

educ

tions

Con

trol

R

945 7

64.00

Th

e non

-subm

ission

of th

e thir

d pa

rty st

ateme

nts ha

s res

ulted

to

factua

l limi

tation

miss

tatem

ent

of R6

772 9

45.00

Inter

nal

Contr

ols

The E

xpen

ditur

e cler

k and

Chie

f Ac

coun

t sho

uld m

aintai

n a

docu

ment

regis

ter w

hich s

hould

be

cons

tantly

upda

ted an

d rec

oncil

ed

to the

mov

emen

t of d

ocum

ents.

Al

so, d

ocum

ents

requ

ests

shou

ld be

logg

ed w

ith a

sign o

ff fro

m bo

th pa

rties a

nd do

cume

nts sh

ould

be

store

d in s

oft co

py an

d ph

otoco

pies

Budg

et an

d Tr

easu

ry V

Make

dama

Na

me: T

Matt

hyse

n Po

sition

: Chie

f Ac

coun

tant

31-M

ar-1

7

22

60

Trad

e Pay

ables

: Ac

crued

bonu

s pr

ovisi

on ha

s bee

n inc

orre

ctly c

alcula

ted

(Exc

.120)

Durin

g the

audit

of ac

crued

bo

nus p

rovis

ions i

t was

noted

tha

t the a

ccru

ed bo

nus

prov

ision

has b

een i

ncor

rectl

y ca

lculat

ed. [r

efer t

o CoA

F 22

of

2016

for s

ample

sche

dule]

Th

e acc

rued

leav

e pro

vision

has

been

miss

tated

by an

ex

trapo

lated

disa

gree

ment

miss

tatem

ent o

f R1 3

01 99

6.90.

Finan

cial

leav

e rec

oncil

iation

s sho

uld be

do

ne on

a mo

nthly/

week

ly ba

sis

and s

hould

be re

viewe

d and

sig

ned o

ff by t

he H

R Ma

nage

r or

senio

r offic

ial.

Budg

et an

d Tr

easu

ry V

Make

dama

Ch

ief A

ccou

ntant

30-Ju

n-17

24

61

Comm

itmen

ts:

Comm

itmen

ts sc

hedu

le do

es no

t ag

ree t

o the

amou

nt pe

r AFS

(Exc

.105)

Durin

g the

audit

of co

mmitm

ents

the fo

llowi

ng di

ffere

nces

wer

e ide

ntifie

d: -T

he am

ount

disclo

sed i

n the

AFS

does

not

agre

e to t

he C

ommi

tmen

t re

gister

subm

itted f

or

audit

:Amo

unt p

er A

FS

R 31

02

6 339

.00Am

ount

per

Comm

itmen

ts Sc

hedu

le R

Finan

cial

An in

hous

e or I

ntern

al AF

S

Revie

w pr

oces

s sho

uld be

im

pleme

nted w

here

in the

CFO

and

Chief

Acc

ontan

t to re

view

and s

ign

finan

cial re

ports

befor

e sub

miss

ion

to au

ditor

s. su

bjecti

ng th

e AFS

thr

ough

a str

ingen

t rev

iew pr

oces

s wi

ll ass

ist in

elim

inatin

g cer

tain

obvio

us om

misio

ns an

d erro

rs.

Budg

et an

d Tr

easu

ry V

Make

dama

Na

me: T

Ma

tthys

enPo

sition

: Ch

ief A

ccou

ntant

31-M

ar-1

7

171

COAF

# EX

C #

Exce

ptio

n He

adin

g Su

mm

ary o

f Fin

ding

Na

ture

Su

gges

ted

Cont

rol

Impr

ovem

ents

Di

rect

orat

e HO

D Re

spon

sible

Offic

ial

Tim

e Lin

e

3052

0338

.63Fa

ctual

differ

ence

of

R 50

6 000

.37

Audit

files

to be

prep

ared

in

dupli

cates

to sa

ve fa

cilita

lete a

n eff

ectiv

e rev

iew pr

oces

s. 24

62

Co

mmitm

ents:

Co

mmitm

ents

sche

dule

does

not

agre

e to t

he am

ount

per A

FS (E

xc.10

5)

The t

otal p

ayme

nts co

lumn

(refer

to C

oAF

24 of

2016

for

table)

indic

ates t

hat p

ayme

nts

made

wer

e mor

e tha

n the

co

ntrac

t amo

unts

howe

ver,

these

over

paym

ents

are

includ

ed in

the c

ommi

tmen

ts re

gister

as co

mmitm

ents

by th

e mu

nicipa

lity as

per t

able.

Finan

cial

Enus

re pr

oper

contr

act

mana

geme

nt sy

stem

in pla

ce fo

r the

iden

tifica

tion a

nd re

cogn

ition o

f ca

pital

comm

itmen

ts A

senio

r offic

ial sh

ould

frequ

ently

up

date

the co

ntrac

t reg

ister

and

revie

ws sh

ould

be pe

rform

ed by

the

chief

acco

untan

t and

shou

ld sig

n off a

s evid

ence

of ha

ving

perfo

rmed

such

revie

ws.

Budg

et an

d Tr

easu

ry V

Make

dama

Na

me: T

Matt

hyse

n Po

sition

: Chie

f Ac

coun

tant

31-M

ar-1

7

26

63

Reve

nue f

rom

exch

ange

tra

nsac

tions

: Rev

enue

fro

m CE

TA G

rant

Fund

ing in

corre

ctly

class

ified a

s rev

enue

fro

m ex

chan

ge

trans

actio

ns (E

xc.65

)

The m

unici

pality

invo

iced C

ETA

for an

amou

nt of

R881

778.2

2 re

lating

to a

refun

d of c

osts

that

were

paid

by th

e mun

icipa

lity in

ter

ms of

the s

hort

skills

de

velop

ment

prog

ramm

e, a

CETA

Disc

retio

nary

Gran

t Fu

nding

proje

ct. T

his re

venu

e tra

nsac

tion i

s a no

n-ex

chan

ge

trans

actio

n bec

ause

the

munic

ipality

rece

ived v

alue f

rom

CETA

with

out d

irectl

y givi

ng

appr

oxim

ately

equa

l valu

e in

exch

ange

.

Finan

cial

Chief

Fina

ncial

Offic

er an

d Chie

f ac

coun

tant to

revie

w int

erim

fin

ancia

l stat

emen

ts an

d isg

n as

evide

nce o

f rev

iew be

fore

subm

ission

to In

terna

l Aud

it and

the

audit

comm

ittee.

Budg

et an

d Tr

easu

ry V

Make

dama

Na

me: T

Matt

hyse

n Po

sition

: Chie

f Ac

coun

tant

Ongo

ing

28

64

Prior

Per

iod E

rrors:

Su

ppor

ting d

ocum

ents

not s

ubmi

tted f

or au

dit

purp

oses

Durin

g the

audit

of pr

ior pe

riod

erro

r, su

fficien

t app

ropr

iate a

udit

evide

nce c

ould

not b

e obta

ined

for th

e res

tatem

ent in

the

corre

spon

ding f

igure

s. Th

e inf

orma

tion s

ubmi

tted b

y ma

nage

ment

in re

spon

se to

RFI

69

dated

27 O

ctobe

r 201

6 cou

ld no

t sup

port

the ad

justm

ents

as

desc

ribed

in no

te 37

to th

e fin

ancia

l stat

emen

ts. W

e wer

e un

able

to co

nfirm

the

Finan

cial

Munic

ipality

achie

ved c

lean

admi

nistra

tion i

n the

2015

/16

balan

ces.

Thes

e will

intur

n be t

he

corre

spon

ding b

alanc

es in

the

2016

/17 fin

ancia

l yea

r. Th

e prio

r pe

riod i

ssue

thus

autom

atica

lly

falls

away

. As p

er th

e Aud

it rep

ort

the pr

ior ye

ar er

rors

have

no

impc

at on

the 2

015/1

6 bala

nces

.

Budg

et an

d Tr

easu

ry V

Make

dama

Na

me: T

Ma

tthys

enPo

sition

: Ch

ief A

ccou

ntant

31-M

ar-1

7

172

COAF

# EX

C #

Exce

ptio

n He

adin

g Su

mm

ary o

f Fin

ding

Na

ture

Su

gges

ted

Cont

rol

Impr

ovem

ents

Di

rect

orat

e HO

D Re

spon

sible

Offic

ial

Tim

e Lin

e

resta

temen

t by a

ltern

ative

me

ans a

nd co

nseq

uentl

y we

were

unab

le to

deter

mine

wh

ether

any a

djustm

ents

to the

co

rresp

ondin

g figu

re w

ere

nece

ssar

y.Fur

therm

ore,

the

unco

rrecte

d miss

tatem

ents

noted

in th

e prio

r yea

r aud

it we

re no

t acc

ounte

d for

whe

n ad

justin

g prio

r per

iod er

rors.

Pr

ior ye

ar

unco

rrecte

d iss

ues

affec

ting

opini

on

para

grap

h

Pa

yable

s: Th

e pa

yable

s in t

he

credit

ors l

isting

wer

e inc

omple

te (R

isk of

Un

derst

ateme

nt)

Mana

geme

nt co

uld no

t pro

vide

furthe

r evid

ence

of th

e co

mplet

enes

s of th

e pay

ables

ba

lance

in th

e 201

4/15 f

inanc

ial

year

. Of th

e two

invo

ices

samp

led, o

nly P

rodib

a inv

oices

we

re su

bmitte

d and

Arn

o St

rydom

invo

ices w

ere n

ot su

bmitte

d thu

s the

proje

cted

amou

nt mo

ved f

rom

R3 80

7 52

0.10 t

o R2 4

94 54

8.

Finan

cial

Mana

geme

nt sh

ould

imple

ment

prop

er re

cord

keep

ing sy

stems

in a

timely

man

ner t

o ens

ure t

hat

comp

lete,

relev

ant a

nd ac

cura

te inf

orma

tion i

s acc

essib

le an

d av

ailab

le to

supp

ort fi

nanc

ial an

d pe

rform

ance

repo

rting.

Budg

et an

d Tr

easu

ry V

Make

dama

Na

me: N

Mhlo

ngo

Posit

ion: E

xpen

ditur

e ma

nage

r

01-D

ec-1

6

Prior

year

un

corre

cted

issue

s aff

ectin

g op

inion

pa

ragr

aph

VA

T on

insta

llmen

ts pa

id for

the K

wane

Ca

pital

amou

nting

to

R 80

6, 12

0 inv

oices

we

re no

t sub

mitte

d wh

en re

ques

ted

throu

gh R

FI 10

1 of

2015

resu

lting i

n a

scop

e lim

itatio

n.

Mana

geme

nt fai

led to

prov

ide

proo

f of s

ubmi

ssion

of th

e inv

oice t

o SAR

S to

have

the

amou

nt as

sess

ed as

that

will

give e

viden

ce to

the a

vaila

bility

an

d vali

dity o

f the s

uppo

rting

docu

menta

tion.

Finan

cial

Mana

geme

nt, th

roug

h Tax

co

nsult

ant (

MaxP

rof),

perfo

rm an

d inv

oice t

est a

nd ve

rify if

these

inv

oices

wer

e ind

eed s

ubmi

tted.

Also

man

agem

ent to

test

if all

invoic

es ar

e VAT

comp

liant

acco

rding

to th

e app

licab

le leg

islati

on.

Budg

et an

d Tr

easu

ry V

Make

dama

Na

me: N

Mhlo

ngo

Posit

ion: E

xpen

ditur

e ma

nage

r

01-Ja

n-17

Prior

year

un

corre

cted

issue

s aff

ectin

g op

inion

pa

ragr

aph

Th

e aud

itee c

ould

not

prov

ide th

e sta

temen

ts an

d inv

oices

to su

ppor

t the

follow

ing cr

edit

balan

ces a

moun

ting

to R

486,

089 a

s it

was r

eque

sted

throu

gh R

FI 85

of

2015

.

Only

the su

ppor

ting d

ocum

ents

for th

e pay

ment

of R9

000 t

o W

onca

Glad

man c

ould

be

verifi

ed of

the i

nform

ation

su

bmitte

d. Th

is thu

s res

ulted

in

the pr

ojecte

d miss

tatem

ent

move

ment

from

R1 33

4 598

to

R 1 2

26 24

4.74.

Finan

cial

Mana

geme

nt sh

ould

imple

ment

prop

er re

cord

keep

ing sy

stems

in a

timely

man

ner t

o ens

ure t

hat

comp

lete,

relev

ant a

nd ac

cura

te inf

orma

tion i

s acc

essib

le an

d av

ailab

le to

supp

ort fi

nanc

ial an

d pe

rform

ance

repo

rting.

Budg

et an

d Tr

easu

ry V

Make

dama

Na

me: N

Mh

longo

Posit

ion:

Expe

nditu

re m

anag

er

01-D

ec-1

6

173

COAF

# EX

C #

Exce

ptio

n He

adin

g Su

mm

ary o

f Fin

ding

Na

ture

Su

gges

ted

Cont

rol

Impr

ovem

ents

Di

rect

orat

e HO

D Re

spon

sible

Offic

ial

Tim

e Lin

e

32

65

Non-

routi

ne Jo

urna

ls:

No su

ppor

ting

docu

menta

tion (

Ex.

130)

Durin

g the

audit

of N

on ro

utine

jou

rnal

entrie

s the

supp

ortin

g do

cume

ntatio

n for

certa

in jou

rnals

(refe

r to C

oAF

32 of

20

16 fo

r jour

nals)

wer

e not

attac

hed f

or th

e aud

itors

to co

nfirm

the v

alidit

y of th

e jou

rnal:

Inter

nal

Contr

ols

Chief

Acc

ount

shou

ld ma

intain

a do

cume

nt re

gister

whic

h sho

uld be

co

nstan

tly up

dated

and r

econ

ciled

to

the m

ovem

ent o

f doc

umen

ts.

Also

, doc

umen

ts re

ques

ts sh

ould

be lo

gged

with

a sig

n off f

rom

both

partie

s and

docu

ments

shou

ld be

sto

red i

n soft

copy

and

photo

copie

s

Budg

et an

d Tr

easu

ry V

Make

dama

Na

me: T

Matt

hyse

n Po

sition

: Chie

f Ac

coun

tant

01-Ju

l-17

36

66

AOPO

- No

evide

nce

to su

ppor

t vali

dity a

nd

accu

racy

of re

porte

d tar

gets

Inspe

cted t

he po

rtfoli

o of

evide

nce s

ubmi

tted f

or K

PA

and c

onfirm

ed th

at the

re is

ins

uffici

ent o

r no e

viden

ce w

hich

supp

orts

the va

lidity

and

accu

racy

of th

e foll

owing

ind

icator

s and

targ

ets. [r

efer t

o Co

AF 36

of 20

16 fo

r sch

edule

of

findin

gs]

Inter

nal

Contr

ols

To de

velop

evid

ence

chec

klist

for

each

indic

ator t

o fas

t trac

k the

su

fficien

t evid

ence

requ

ired

Offic

e of th

e Mu

nicipa

l Ma

nage

r

T Mn

yimba

Na

me: S

Sak

i Po

sition

: PMS

Ma

nage

r (Ac

ting)

31-M

ar-1

7

36

67

AOPO

- Re

porte

d tar

gets

not a

ccur

ate,

valid

and o

r com

plete

Whil

e tes

ting t

he fo

llowi

ng

indica

tor, id

entifi

ed th

e foll

owing

dis

agre

emen

ts:

1. Th

ere w

ere 3

busin

ess p

lans

subm

itted i

nstea

d of 4

as

repo

rted i

n the

Ann

ual

Perfo

rman

ce R

epor

t. 2.

The b

usine

ss pl

an su

bmitte

d for

Lewi

s Hou

sing P

rojec

t was

no

t sign

ed as

evide

nce o

f va

lidity

.

Inter

nal

Contr

ols

Mana

geme

nt sh

ould

deve

lop,

appr

ove,

imple

ment

and

comm

unica

te a d

etaile

d sys

tem

desc

riptio

n or s

tanda

rd op

erati

ng

proc

edur

es fo

r eac

h ind

icator

Offic

e of th

e Mu

nicipa

l Ma

nage

r

T Mn

yimba

Na

me: S

Sak

i Po

sition

: PMS

Ma

nage

r (Ac

ting)

31-M

ar-1

7

37

68

AoPO

: Mid-

year

pe

rform

ance

as

sess

ment

repo

rts

not s

ubmi

tted w

ithin

the sp

ecifie

d tim

efram

es A

udit

findin

g

AoPO

: Mid-

year

perfo

rman

ce

asse

ssme

nt re

ports

not

subm

itted w

ithin

the sp

ecifie

d tim

efram

es A

udit

findin

gSub

miss

ion da

te to

coun

cil:28

-Jan-

16Le

gislat

ed

date:

25-Ja

n-16

The a

udit f

inding

wa

s rais

ed in

the p

rior y

ear a

nd

mana

geme

nt ag

reed

with

the

Inter

nal

Contr

ols

Durin

g plan

ning,

Mana

geme

nt sh

ould

ensu

re st

rateg

ic ali

gnme

nt of

the M

unici

pal c

alend

ar w

ith

legisl

ative

dead

line d

ates,

to en

sure

that

legisl

ative

dead

lines

for

subm

ission

are m

et.

Offic

e of th

e Mu

nicipa

l Ma

nage

r

T Mn

yimba

Na

me: S

Sak

iPos

ition:

PMS

Mana

ger (

Actin

g) 31

-May

-17

174

COAF

# EX

C #

Exce

ptio

n He

adin

g Su

mm

ary o

f Fin

ding

Na

ture

Su

gges

ted

Cont

rol

Impr

ovem

ents

Di

rect

orat

e HO

D Re

spon

sible

Offic

ial

Tim

e Lin

e

findin

g, ho

weve

r the

re w

as no

co

rrecti

ve ac

tion t

aken

to

addr

ess t

he au

dit fin

ding i

n the

cu

rrent

year

. 37

69

Ao

PO: L

ack o

f ad

equa

tely d

esign

ed

and i

mplem

ented

pr

oces

ses a

nd

proc

edur

es to

mon

itor

and r

eview

pe

rform

ance

inf

orma

tion A

udit

findin

g

Munic

ipality

's pe

rform

ance

inf

orma

tion s

ystem

s, pr

oces

ses

and p

roce

dure

s, su

bmitte

d for

au

dit pu

rpos

e for

each

indic

ator

relev

ant to

the s

electe

d de

velop

ment

prior

ity/ob

jectiv

e ar

e not

adeq

uatel

y de

signe

d to

ensu

re ac

cura

cy, c

omple

tenes

s an

d vali

dity o

f per

forma

nce

infor

matio

n:-

[refer

to C

oAF

37

of 20

16 fo

r sch

edule

of fin

dings

] Th

e aud

it find

ing w

as re

porte

d in

the pr

ior ye

ar, h

owev

er th

ere

was n

o res

pons

e fro

m ma

nage

ment

which

agre

es or

dis

agre

es w

ith th

e aud

it find

ing.

Inter

nal

Contr

ols

Mana

geme

nt sh

ould

deve

lop,

appr

ove,

imple

ment

and

comm

unica

te a d

etaile

d sys

tem

desc

riptio

n or s

tanda

rd op

erati

ng

proc

edur

es fo

r eac

h ind

icator

Offic

e of th

e Mu

nicipa

l Ma

nage

r

T Mn

yimba

Na

me: S

Sak

i Po

sition

: PMS

Ma

nage

r (Ac

ting)

31-M

ar-1

7

37

70

AoPO

: Loc

al Ec

onom

ic De

velop

ment:

Pe

rform

ance

ind

icator

s not

verifi

able

and w

ell

defin

ed

The f

ollow

ing pe

rform

ance

ind

icator

s for

the s

electe

d de

velop

ment

prior

ity ar

e not

verifi

able:

- The

follo

wing

pe

rform

ance

indic

ators

for th

e se

lected

deve

lopme

nt pr

iority

ar

e not

verifi

able:

-Indic

ator 1

. An

nual

Chris

tmas

light

even

ts 2.

Tour

ism S

trateg

y3. N

o of

comm

unity

halls

to be

ma

intain

ed. T

he fo

llowi

ng

perfo

rman

ce in

dicato

rs for

the

selec

ted de

velop

ment

prior

ity

are n

ot we

ll defi

ned:

-Indic

ator 1

. An

nual

Chris

tmas

light

even

ts 2.

Tour

ism S

trateg

y3. A

ppoin

tmen

t of

a ser

vice p

rovid

er4.

Ensu

re

comp

lianc

e with

SPL

UMA1

6 of

2013

5. Int

erna

l aud

it plan

6.

Inter

nal

Contr

ols

Mana

geme

nt sh

ould

deve

lop an

d ad

opt c

heck

lists

for ea

ch in

dicato

r to

expe

dite t

he co

llecti

on of

re

levan

t, reli

able

and u

seful

inf

orma

tion.T

hese

chec

klists

are t

o be

appr

oved

by th

e unit

head

prior

to

subm

ission

of pe

rform

ance

ev

idenc

e for

revie

w pu

rpos

es.

Offic

e of th

e Mu

nicipa

l Ma

nage

r

T Mn

yimba

Na

me: S

Sak

iPos

ition:

PMS

Mana

ger (

Actin

g) 31

-Mar

-17

175

COAF

# EX

C #

Exce

ptio

n He

adin

g Su

mm

ary o

f Fin

ding

Na

ture

Su

gges

ted

Cont

rol

Impr

ovem

ents

Di

rect

orat

e HO

D Re

spon

sible

Offic

ial

Tim

e Lin

e

Deve

lop an

d sub

mit a

pplic

ation

for

Birh

a Bea

ch.

37

71

AoPO

: Per

forma

nce

targe

ts no

t me

asur

able,

spec

ific

and t

ime-

boun

d

A us

eful s

et of

criter

ia for

se

lectin

g per

forma

nce t

arge

ts is

the "S

MART

" crite

ria. C

ertai

n pe

rform

ance

targ

ets in

clude

d in

the S

DBIP

did n

ot ad

here

to

some

of th

ese S

MART

pr

incipa

ls. [r

efer t

o CoA

F 37

of

2016

for d

etaile

d sch

edule

of

findin

gs]T

he fo

llowi

ng

perfo

rman

ce ta

rgets

inclu

ded i

n the

SDB

IP w

ere n

ot sp

ecific

:Dev

elopm

ent p

riority

20

15/16

Ann

ual ta

rget

1. Se

rvice

De

liver

y and

Infra

struc

ture

Deve

lopme

nt1.

7 mun

icipa

l bu

ilding

s main

taine

d ann

ually

in

terms

of qu

arter

s2.10

co

mmun

ity ha

lls m

aintai

ned p

er

annu

m 3.

2 Qua

rterly

ma

nage

ment

repo

rts to

be

subm

itted.4

. Cas

h flow

re

ports

.5. E

PWP

expe

nditu

re

repo

rts.2.

Loca

l Eco

nomi

c De

velop

ment

1.Ann

ual to

urism

str

ategy

2.Ag

ricult

ural

deve

lopme

nt pr

ogra

mmes

3.

No. o

f bus

iness

plan

s de

velop

ed. 4

. Bus

iness

plan

s su

bmitte

d to r

eleva

nt de

partm

ents.

5. T

wo w

orks

hops

to

be co

nduc

ted. 6

. Qua

rterly

re

port

Inter

nal

Contr

ols

Durin

g the

plan

ning p

hase

of P

MS,

the de

velop

ment

of ind

icator

s sh

ould

be do

ne in

cons

ultati

on

with

Inter

nal A

udit a

nd P

MS

secti

on to

ensu

re in

dicato

rs an

d tag

ets ad

here

to th

e 'S

MART

' pr

incipl

es as

advo

cated

by th

e Au

ditor

Gen

eral.

Offic

e of th

e Mu

nicipa

l Ma

nage

r

T Mn

yimba

Na

me: S

Sak

iPos

ition:

PMS

Mana

ger (

Actin

g) 31

-Jan-

17

37

72

AoPO

: Per

forma

nce

targe

ts no

t me

asur

able,

spec

ific

and t

ime-

boun

d

The f

ollow

ing pe

rform

ance

tar

gets

includ

ed in

the S

DBIP

we

re no

t mea

sura

ble:-

Deve

lopme

nt pr

iority

2015

/16

Annu

al tar

get1.

Ser

vice D

elive

ry an

d Infr

astru

cture

Dev

elopm

ent

Inter

nal

Contr

ols

Durin

g the

plan

ning p

hase

of P

MS,

the de

velop

ment

of ind

icator

s sh

ould

be do

ne in

cons

ultati

on

with

Inter

nal A

udit a

nd P

MS

secti

on to

ensu

re in

dicato

rs an

d tag

ets ad

here

to th

e 'S

MART

'

Offic

e of th

e Mu

nicipa

l Ma

nage

r

T Mn

yimba

Na

me: S

Sak

iPos

ition:

PMS

Mana

ger (

Actin

g) 31

-Jan-

17

176

COAF

# EX

C #

Exce

ptio

n He

adin

g Su

mm

ary o

f Fin

ding

Na

ture

Su

gges

ted

Cont

rol

Impr

ovem

ents

Di

rect

orat

e HO

D Re

spon

sible

Offic

ial

Tim

e Lin

e

1. No

of C

ounc

il and

MAN

CO

reso

lution

s2. Q

uarte

rly

mana

geme

nt re

ports

to be

su

bmitte

d.3. C

ash f

low

repo

rts.4.

EPW

P ex

pend

iture

re

ports

.

princ

iples

as ad

voca

ted by

the

Audit

or G

ener

al.

37

73

AoPO

: Per

forma

nce

targe

ts no

t me

asur

able,

spec

ific

and t

ime-

boun

d

The f

ollow

ing pe

rform

ance

tar

gets

includ

ed in

the S

DBIP

we

re no

t time

-bou

nd:-

Deve

lopme

nt pr

iority

2015

/16

Annu

al tar

get

1. Se

rvice

Deli

very

and

Infra

struc

ture D

evelo

pmen

t 1.

June

2015

a pr

oject

list

subm

itted t

o Esk

om

Inter

nal

Contr

ols

Durin

g the

plan

ning p

hase

of P

MS,

the de

velop

ment

of ind

icator

s sh

ould

be do

ne in

cons

ultati

on

with

Inter

nal A

udit a

nd P

MS

secti

on to

ensu

re in

dicato

rs an

d tag

ets ad

here

to th

e 'S

MART

' pr

incipl

es as

advo

cated

by th

e Au

ditor

Gen

eral.

Offic

e of th

e Mu

nicipa

l Ma

nage

r

T Mn

yimba

Na

me: S

Sak

i Po

sition

: PMS

Ma

nage

r (Ac

ting)

31-Ja

n-17

38

74

Road

s Infr

astru

cture

: No

appr

oved

polic

y for

the

plan

ning,

mana

geme

nt an

d re

portin

g of r

oads

inf

rastr

uctur

e

1. Th

e mun

icipa

lity di

d not

have

the

follo

wing

polic

ies an

d pr

oced

ures

in pl

ace p

ertai

ning

to ro

ads i

nfras

tructu

re:--

An

appr

oved

polic

y in p

lace f

or th

e pla

nning

, man

agem

ent a

nd

repo

rting o

f roa

ds

infra

struc

ture.2

. The

mu

nicipa

lity do

es no

t hav

e an

appr

oved

RMP

/prior

ity lis

t in

place

for t

he re

newa

l and

ro

utine

main

tenan

ce of

road

s inf

rastr

uctur

e.3. T

he

munic

ipality

did n

ot pe

rform

co

nditio

n ass

essm

ents

for al

l ro

ads i

nfras

tructu

re un

der t

heir

contr

ol to

infor

m the

RM

P/Pr

iority

list. 2

. In ad

dition

the

mun

icipa

lity un

dersp

ent o

n the

rene

wal p

rojec

ts for

the

year

, due

to a

delay

in

proc

urem

ent p

roce

sses

for t

he

proje

cts.

Inter

nal

Contr

ols

To de

velop

and i

mplem

ent a

po

licy f

or th

e plan

ning,

mana

geme

nt an

d rep

ortin

g of

road

s infr

astru

cture

.Man

agem

ent

shou

ld de

velop

and i

mplem

ent a

Ro

ads M

aster

Plan

(RMP

)/prio

rity

List fo

r the

rene

wal a

nd ro

utine

ma

inten

ance

of ro

ads

infra

struc

ture

Tech

nical

Servi

ces

L Gov

u

31-M

ar-1

7

177

COAF

# EX

C #

Exce

ptio

n He

adin

g Su

mm

ary o

f Fin

ding

Na

ture

Su

gges

ted

Cont

rol

Impr

ovem

ents

Di

rect

orat

e HO

D Re

spon

sible

Offic

ial

Tim

e Lin

e

38

75

AoPO

: Lac

k of

adeq

uatel

y des

igned

an

d imp

lemen

ted

proc

esse

s and

pr

oced

ures

to m

onito

r an

d rev

iew

perfo

rman

ce

infor

matio

n Aud

it fin

ding

Munic

ipality

's pe

rform

ance

inf

orma

tion s

ystem

s, pr

oces

ses

and p

roce

dure

s, su

bmitte

d for

au

dit pu

rpos

e for

each

indic

ator

relev

ant to

the s

electe

d de

velop

ment

prior

ity/ob

jectiv

e ar

e not

adeq

uatel

y de

signe

d to

ensu

re ac

cura

cy, c

omple

tenes

s an

d vali

dity o

f per

forma

nce

infor

matio

n:- 1

. Dev

elopm

ent

prior

ity:S

ervic

e Deli

very

and

Infra

struc

ture D

evelo

pmen

t Ob

jectiv

e: Er

adica

te ba

cklog

s in

orde

r to i

mpro

ve ac

cess

to

servi

ce an

d ens

ure p

rope

r op

erati

ons a

nd m

ainten

ance

.2.

Deve

lopme

nt pr

iority

: Loc

al Ec

onom

ic De

velop

mentO

bjecti

ve:C

reati

ng

an en

ablin

g env

ironm

ent th

at pr

omote

s the

deve

lopme

nt of

the lo

cal e

cono

my an

d fac

ilitate

job

. The

audit

findin

g was

re

porte

d in t

he pr

ior ye

ar,

howe

ver t

here

was

no re

spon

se

from

mana

geme

nt wh

ich ag

rees

or

disa

gree

s with

the a

udit

findin

g.

Inter

nal

Contr

ols

Mana

geme

nt sh

ould

deve

lop,

appr

ove,

imple

ment

and

comm

unica

te de

tailed

polic

y and

pr

oced

ures

to re

gulat

e the

PMS

.

Offic

e of th

e Mu

nicipa

l Ma

nage

r

T Mn

yimba

Na

me: S

Sak

iPos

ition:

PMS

Mana

ger (

Actin

g) 31

-Mar

-17

38

76

AoPO

: Loc

al Ec

onom

ic De

velop

ment:

Pe

rform

ance

ind

icator

s not

verifi

able

and w

ell

defin

ed

The f

ollow

ing pe

rform

ance

ind

icator

s for

the s

electe

d de

velop

ment

prior

ity ar

e not

well

defin

ed:-I

ndica

tor 1

. Ann

ual

Chris

tmas

light

even

ts 2.

Tour

ism S

trateg

y3. A

ppoin

tmen

t of

a ser

vice p

rovid

er4.

Ensu

re

comp

lianc

e with

SPL

UMA1

6 of

2013

5. Int

erna

l aud

it plan

6. De

velop

and s

ubmi

t app

licati

on

for B

irha B

each

.

Inter

nal

Contr

ols

Durin

g the

plan

ning p

hase

of P

MS,

the de

velop

ment

of ind

icato

rs sh

ould

be do

ne in

cons

ultati

on

with

Inter

nal A

udit a

nd P

MS

secti

on to

ensu

re in

dicato

rs an

d tag

ets ad

here

to th

e 'S

MART

' pr

incipl

es as

advo

cated

by th

e Au

ditor

Gen

eral.

Offic

e of th

e Mu

nicipa

l Ma

nage

r

T Mn

yimba

Na

me: S

Sak

iPos

ition:

PMS

Mana

ger (

Actin

g) 31

-Jan-

17

178

COAF

# EX

C #

Exce

ptio

n He

adin

g Su

mm

ary o

f Fin

ding

Na

ture

Su

gges

ted

Cont

rol

Impr

ovem

ents

Di

rect

orat

e HO

D Re

spon

sible

Offic

ial

Tim

e Lin

e

38

77

AoPO

: Per

forma

nce

targe

ts no

t me

asur

able,

spec

ific

and t

ime-

boun

d

The f

ollow

ing pe

rform

ance

tar

gets

includ

ed in

the S

DBIP

we

re no

t spe

cific:

1. Se

rvice

De

liver

y and

Infra

struc

ture

Deve

lopme

nt:-1

. 7 m

unici

pal

build

ings m

aintai

ned a

nnua

lly in

ter

ms of

quar

ters 2

.10

comm

unity

halls

main

taine

d per

an

num

3. 2

Quar

terly

mana

geme

nt re

ports

to be

su

bmitte

d. 4.

Cash

flow

repo

rts.

5. EP

WP

expe

nditu

re re

ports

.2.

Loca

l Eco

nomi

c Dev

elopm

ent:-

1.A

nnua

l tour

ism st

rateg

y 2.A

gricu

ltura

l dev

elopm

ent

prog

ramm

es 3

. No.

of bu

sines

s pla

ns de

velop

ed. 4

. Bus

iness

pla

ns su

bmitte

d to r

eleva

nt de

partm

ents

5. Tw

o wor

ksho

ps

to be

cond

ucted

6. Q

uarte

rly

repo

rt

Du

ring t

he pl

annin

g pha

se of

PMS

, the

deve

lopme

nt of

indica

tors

shou

ld be

done

in co

nsult

ation

wi

th Int

erna

l Aud

it and

PMS

se

ction

to en

sure

indic

ators

and

tagets

adhe

re to

the

'SMA

RT'

princ

iples

as ad

voca

ted by

the

Audit

or G

ener

al.

Offic

e of th

e Mu

nicipa

l Ma

nage

r

T Mn

yimba

Na

me: S

Sak

iPos

ition:

PMS

Mana

ger (

Actin

g) 31

-Jan-

17

38

78

AoPO

: Per

forma

nce

targe

ts no

t me

asur

able,

spec

ific

and t

ime-

boun

d

The f

ollow

ing pe

rform

ance

tar

gets

includ

ed in

the S

DBIP

we

re no

t mea

sura

ble:-1

. Ser

vice

Deliv

ery a

nd In

frastr

uctur

e De

velop

ment

1. No

of C

ounc

il an

d MAN

CO re

solut

ions2

. Qu

arter

ly ma

nage

ment

repo

rts

to be

subm

itted.3

. Cas

h flow

re

ports

.4. E

PWP

expe

nditu

re

repo

rts.

Inter

nal

Contr

ols

Durin

g the

plan

ning p

hase

of P

MS,

the de

velop

ment

of ind

icator

s sh

ould

be do

ne in

cons

ultati

on

with

Inter

nal A

udit a

nd P

MS

secti

on to

ensu

re in

dicato

rs an

d tag

ets ad

here

to th

e 'S

MART

' pr

incipl

es as

advo

cated

by th

e Au

ditor

Gen

eral.

Offic

e of th

e Mu

nicipa

l Ma

nage

r

T Mn

yimba

Na

me: S

Sak

iPos

ition:

PMS

Mana

ger (

Actin

g) 31

-Jan-

17

MGT

Repo

rt 79

Ao

PO: P

erfor

manc

e tar

gets

not

meas

urab

le, sp

ecific

an

d tim

e-bo

und

The f

ollow

ing pe

rform

ance

tar

gets

includ

ed in

the S

DBIP

we

re no

t time

-bou

nd:-

1. Se

rvice

Deli

very

and

Infra

struc

ture D

evelo

pmen

t:-

1. Ju

ne 20

15 a

proje

ct lis

t su

bmitte

d to E

skom

Inter

nal

Contr

ols

Durin

g the

plan

ning p

hase

of P

MS,

the de

velop

ment

of ind

icato

rs sh

ould

be do

ne in

cons

ultati

on

with

Inter

nal A

udit a

nd P

MS

secti

on to

ensu

re in

dicato

rs an

d tag

ets ad

here

to th

e 'S

MART

' pr

incipl

es as

advo

cated

by th

e Au

ditor

Gen

eral.

Offic

e of th

e Mu

nicipa

l Ma

nage

r

T Mn

yimba

Na

me: S

Sak

i Po

sition

: PMS

Ma

nage

r (Ac

ting)

31-Ja

n-17

179

COAF

# EX

C #

Exce

ptio

n He

adin

g Su

mm

ary o

f Fin

ding

Na

ture

Su

gges

ted

Cont

rol

Impr

ovem

ents

Di

rect

orat

e HO

D Re

spon

sible

Offic

ial

Tim

e Lin

e

MGT

Repo

rt 80

An

nual

Repo

rt an

d An

nual

Finan

cial

State

ments

The f

inanc

ial st

ateme

nts

subm

itted f

or au

diting

wer

e not

prep

ared

in al

l mate

rial re

spec

ts in

acco

rdan

ce w

ith th

e re

quire

ments

of se

ction

122 o

f the

MFM

A. M

ateria

l mi

sstat

emen

ts of

non-

curre

nt as

sets,

curre

nt as

sets,

liabil

ities,

reve

nue,

expe

nditu

re an

d dis

closu

re ite

ms id

entifi

ed by

the

audit

ors i

n the

subm

itted

finan

cial s

tatem

ents

were

su

bseq

uentl

y cor

recte

d, bu

t the

unco

rrecte

d mate

rial

miss

tatem

nts re

sulte

d in t

he

finan

cial s

tatem

ents

rece

iving

a qu

alifie

d aud

it opin

ion.

Comp

lianc

e 1.

Chief

Acc

ounta

nt an

d Ac

coun

tants

to pr

epar

e inte

rim

Finan

cial S

tatem

ents,

to en

sure

mi

sstat

emen

t are

detec

ted an

d co

rrecte

d on t

ime.

2. Int

erna

l Aud

itors

to re

view

Inter

im an

d Ann

ual F

inanc

ial

State

ments

prior

being

subm

itted

to Au

dit C

ommi

tte fo

r fur

ther

revie

w.

Budg

et an

d Tr

easu

ry V

Make

dama

Na

me: T

Matt

hyse

n Po

sition

: Chie

f Ac

coun

tant

Mar-1

7

MGT

Repo

rt 81

Ex

pend

iture

ma

nage

ment

Mo

ney o

wed b

y the

mun

icipa

lity

was n

ot alw

ays p

aid w

ithin

30

days

, as r

equir

ed by

secti

on

65(2

)€ of

the M

FMA.

Comp

lianc

e A

reco

rd bo

ok sh

ould

be

maint

ained

detai

ling t

he m

ovem

ent

of the

invo

ices a

s the

y arri

ve an

d dis

tribute

d to t

he re

spon

sible

offici

als an

d a tim

e fra

me be

de

termi

ned o

n how

long

a ba

tch of

inv

oices

stay

s to e

ach o

fficial

, but

shou

ld be

with

in 30

days

until

paym

ent.

Budg

et an

d Tr

easu

ry V

Make

dama

Ma

nage

r Exp

endit

ure

31-M

ar-1

7

MGT

Repo

rt 82

Ex

pend

iture

ma

nage

ment

Re

ason

able

steps

wer

e not

taken

to pr

even

t una

uthor

ised,

irreg

ular a

nd fr

uitles

s and

wa

steful

expe

nditu

re, a

s re

quire

d by s

ectio

n 62(

1)(d

) of

the M

FMA.

Comp

lianc

e 1,

Mana

geme

nt sh

ould

includ

e the

ir defi

nition

as pe

r the

guida

nce

abou

t wha

t con

stitut

es an

all

owab

le de

viatio

n with

in the

SCM

po

licy d

ocum

ent.

2, Ma

nage

ment

shou

ld en

sure

that

all in

stanc

es of

irreg

ular

expe

nditu

re ar

e rec

orde

d in t

he

Irreg

ular,

Fruit

less a

nd W

astef

ul an

d Una

uthor

ised E

xpen

ditur

e Re

gister

with

detai

led de

scrip

tions

of

the pr

ohibi

ted ex

pend

iture

inc

urre

d.

3, Ma

nage

ment

shou

ld en

sure

Budg

et an

d Tr

easu

ry V

Make

dama

Ma

nage

r SCM

31

-Mar

-16

180

COAF

# EX

C #

Exce

ptio

n He

adin

g Su

mm

ary o

f Fin

ding

Na

ture

Su

gges

ted

Cont

rol

Impr

ovem

ents

Di

rect

orat

e HO

D Re

spon

sible

Offic

ial

Tim

e Lin

e

that a

Pay

ment

Chec

klist

is co

mplet

ed co

mplet

ely an

d ac

cura

tely a

s inte

nded

for a

ll ex

pend

iture

incu

rred a

nd at

tache

d to

the pa

ymen

t vou

cher

prior

to

paym

ent b

eing m

ade.

4,

Mana

geme

nt sh

ould

ensu

re th

at the

Pay

ment

Chec

klist

is ad

equa

tely s

igned

by th

e rev

iewer

an

d rev

iewer

prior

to pa

ymen

t be

ing m

ade.

MG

T Re

port

83

Proc

urem

ent a

nd

contr

act m

anag

emen

t Go

ods a

nd se

rvice

s with

a tra

nsac

tion v

alue o

f belo

w R2

00

000 w

ere p

rocu

red w

ithou

t ob

tainin

g the

requ

ired p

rice

quota

tions

, in co

ntrav

entio

n of

SCM

regu

lation

17(a

) and

(c)

Comp

lianc

e 1,

Mana

geme

nt sh

ould

ensu

re th

at a d

eviat

ion pr

oces

s is f

ollow

ed fo

r all

insta

nces

whe

re th

e mini

mum

numb

er of

quota

tions

as pe

r the

SC

M Po

licy i

s not

adhe

red t

o. W

here

the m

inimu

m nu

mber

of

quota

tions

has n

ot be

en ob

taine

d, ma

nage

ment

shou

ld pr

epar

e a

memo

rand

um fo

r app

rova

l by t

he

Acco

untin

g Offic

er w

hich d

etails

the

reas

ons f

or no

t obta

ining

the

requ

ired n

umbe

r of q

uotat

ions.

The

reas

ons d

ocum

ented

for a

ppro

val

shou

ld be

spec

ific in

term

s of th

e all

owab

le de

viatio

n cate

gorie

s as

per t

he S

CM P

olicy

.

Budg

et an

d Tr

easu

ry V

Make

dama

Ma

nage

r SCM

01

-Dec

-16

MGT

Repo

rt 84

Pr

ocur

emen

t and

co

ntrac

t man

agem

ent

The p

erfor

manc

e of c

ontra

ctors

or pr

ovide

r was

not m

onito

red

on a

month

ly ba

sis, a

s req

uired

by

secti

on 11

6(2)

(b) o

f the

MFMA

.

Comp

lianc

e A

Stan

dard

ised r

epor

t temp

late

shou

ld be

deve

loped

and

imple

mente

d for

repo

rting o

n the

pe

rform

ance

of se

rvice

prov

iders.

Th

e rep

ort s

hould

be pr

epar

ed on

a Q

urter

ly ba

sis an

d sho

ld se

rve

befor

e cou

ncil.

Budg

et an

d Tr

easu

ry V

Make

dama

Ma

nage

r SCM

01

-Jan-

17

MGT

Repo

rt 85

Hu

man r

esou

rces

mana

geme

nt

The c

ompe

tencie

s of th

e chie

f fin

ancia

l offic

er an

d hea

d of

supp

ly ch

ain w

ere n

ot as

sess

ed

in a t

imely

man

ner in

orde

r to

identi

fy an

d add

ress

gaps

in

comp

etenc

y lev

els as

requ

ired

Comp

lianc

e HR

dep

artm

ent to

facil

itate

the

asse

ssme

nt of

the co

mpete

ncies

of

the ch

ief fin

ancia

l offic

er an

d hea

d of

supp

ly ch

ain w

ere i

n ord

er to

ide

ntify

and a

ddre

ss an

y gap

s in

comp

etenc

y lev

els. M

anag

emen

t

Corp

orate

Se

rvice

s N

Mazw

ayi

Name

: Mkh

useli

Mx

ekez

o Po

sition

: Hum

an

Reso

urce

s Man

ager

31-M

ar-1

7

181

COAF

# EX

C #

Exce

ptio

n He

adin

g Su

mm

ary o

f Fin

ding

Na

ture

Su

gges

ted

Cont

rol

Impr

ovem

ents

Di

rect

orat

e HO

D Re

spon

sible

Offic

ial

Tim

e Lin

e

by M

unici

pal R

egula

tions

on

Minim

um C

ompe

tency

Leve

ls 13

.

to es

calat

e the

prog

ress

and

chall

enge

s at M

ANCO

MGT

Repo

rt 86

Hu

man r

esou

rces

mana

geme

nt

The m

unici

pality

did n

ot su

bmit

a rep

ort o

n com

plian

ce w

ith

pres

cribe

d com

peten

cy le

vels

to the

Nati

onal

Trea

sury

and

relev

ant p

rovin

cial tr

easu

ry as

re

quire

d by t

he M

unici

pal

Regu

lation

s on M

inimu

m Co

mpete

ncy L

evels

14(2

)(a).

Comp

lianc

e HR

dep

artm

ent to

subm

it a re

port

on co

mplia

nce w

ith pr

escri

bed

comp

etenc

y lev

els to

the N

ation

al Tr

easu

ry an

d rele

vant

prov

incial

tre

asur

y as r

equir

ed by

the

Munic

ipal R

egula

tions

on M

inimu

m Co

mpete

ncy L

evels

14(2

)(a).

Corp

orate

Se

rvice

s N

Mazw

ayi

Name

: Mkh

useli

Mx

ekez

o Po

sition

: Hum

an

Reso

urce

s Man

ager

30-Ju

n-17

MGT

Repo

rt 87

Hu

man r

esou

rces

mana

geme

nt

The a

nnua

l repo

rt of

the

munic

ipality

did n

ot re

flect

infor

matio

n on c

ompli

ance

with

pr

escri

bed m

inimu

m co

mpete

ncies

as re

quire

d by

the M

unici

pal R

egula

tions

on

Minim

um C

ompe

tency

Leve

ls 14

(2)(b

).

Comp

lianc

e Th

e 201

5/16 A

nnua

l Rep

ort is

to

be up

dated

to in

clude

or re

flect

infor

matio

n on c

ompli

ance

with

pr

escri

bed m

inimu

m co

mpete

ncies

as

requ

ired b

y the

Mun

icipa

l Re

gulat

ions o

n Mini

mum

Comp

etenc

y Lev

els 14

(2)(b

).

Corp

orate

Se

rvice

s N

Mazw

ayi

Name

: Mkh

useli

Mx

ekez

o Po

sition

: Hum

an

Reso

urce

s Man

ager

25-Ja

n-17

MGT

Repo

rt 88

IT

Gov

erna

nce

The I

nform

ation

and

Comm

unica

tion T

echn

ology

(IC

T) go

vern

ance

fram

ewor

k do

cume

nt wa

s not

comp

rehe

nsive

and s

till in

draft

. As

a re

sult s

uffiei

cent

contr

ols

for th

e effe

ctive

man

agem

ent

and i

mplem

entat

ion of

IT

Gove

rnan

ce w

ere n

ot pu

t in

place

. Som

e of th

e key

polic

ies

to go

vern

the e

nviro

nmen

t wer

e als

o not

yet d

ocum

ented

. In

addit

ion, th

e mun

icipa

lity fa

ces

the ch

allen

ge of

limite

d ICT

staff

to

assis

t with

fully

imple

menti

ng

relev

ant IC

T co

ntrols

. This

was

du

e to t

hat IT

man

agem

ent w

as

not a

ware

of ho

w the

IT

gove

rnan

ce F

rame

work

docu

ment

and s

ome p

olicie

s sh

ould

entai

l.

Infor

matio

n Te

chno

logy

The I

nform

ation

and

Comm

unica

tion T

echn

ology

(ICT

) go

vern

ance

fram

ewor

k doc

umen

t sh

ould

be d

rafte

d and

be

nchm

arke

d aga

inst th

ose o

f sim

ilar o

rgan

isatio

ns to

ensu

re th

at it i

s com

preh

ensiv

e. Th

e dra

ft ICT

go

vern

ance

fram

ewor

k sho

uld th

en

be fo

rwar

ded t

o the

relev

ant

struc

tures

for r

eview

, app

rova

l and

ad

optio

n.Man

agem

ent s

houl

comm

ence

with

Imple

menta

tion o

f Ph

ase 1

ofthe

gove

rnan

ce

frame

work

Offic

e of th

e Mu

nicipa

l Ma

nage

r

T Mn

yimba

Na

me: B

ongis

a No

dada

Posit

ion: IC

T Ma

nage

r

30-Ju

n-17

182

COAF

# EX

C #

Exce

ptio

n He

adin

g Su

mm

ary o

f Fin

ding

Na

ture

Su

gges

ted

Cont

rol

Impr

ovem

ents

Di

rect

orat

e HO

D Re

spon

sible

Offic

ial

Tim

e Lin

e

MGT

Repo

rt 89

Se

curity

Man

agem

ent

Inter

venti

on is

requ

ires a

roun

d the

secu

rity m

anag

emen

t co

ntrols

as co

ntrols

wer

e ina

dqua

tely d

esign

ed an

d im

pleme

nted f

or th

e ma

nage

ment

of fire

walls

,. The

wa

s no f

orma

lly do

cume

nted

and a

ppro

ved f

irewa

ll ma

nage

ment

polic

y to g

uide t

he

secu

rity te

am on

how

to co

nfigu

re th

e fire

wall a

ccor

ding

to re

quire

ments

and t

he be

st int

eres

ts of

the m

unici

pality

. The

fire

wall l

ogs w

ere n

ot re

gular

ly re

viewe

d and

the c

hang

es

made

on th

e fire

wall b

y the

ad

minis

trator

wer

e not

reco

rded

. Th

is wa

s due

to th

e fac

t that

the

ICT

depa

rtmen

t was

not fu

lly

capa

citate

d and

as su

ch st

affs

have

been

assig

ned m

ultipl

e re

spon

sibilit

ies an

d a lo

w pr

iority

wa

s plac

ed on

firew

all

mana

geme

nt. In

addit

ion to

this,

the

curre

nt IC

T tec

hnica

l staf

f did

not h

ave t

he ex

perie

nce t

o mo

nitor

and m

anag

e the

fire

walls

.

Infor

matio

n Te

chno

logy

1. Re

view

of IC

T pr

oced

ure

manu

al to

incor

pora

te fire

wall

mana

geme

nt.2.

Appr

oval

of IC

T pr

oced

ure m

anua

l3.

Imple

menta

tion o

f fire

wall

mana

geme

nt pr

oced

ure.

4.Con

duct

a fire

wall t

raini

ng an

d sk

ills tr

ansfe

r on I

CT st

aff.

Offic

e of th

e Mu

nicipa

l Ma

nage

r

T Mn

yimba

Na

me: B

ongis

a No

dada

Posit

ion: IC

T Ma

nage

r

28 F

ebru

ary

2017

30 A

pril

2017

31 M

ay

2017

, on

going

28

Febr

uary

2017

MGT

Repo

rt 90

IT

Ser

vice C

ontin

uity

Inter

venti

on is

requ

ires a

roun

d the

secu

rity co

ntrols

; wer

e not

adeq

uatel

y des

igned

and

imple

mente

d. Th

e Di

saste

r Re

cove

ry Pl

an (D

RC) w

as no

t ye

t doc

umen

ted. F

ull sy

stem

back

up re

store

s wer

e not

perfo

rmed

regu

larly

as th

e ba

ckup

resto

res w

ere d

one

base

d on u

ser r

eque

sts. T

his

can b

e attr

ibuted

to th

at a l

ow

prior

ity w

as pl

aced

on

Infor

matio

n Te

chno

logy

1. Re

view

of the

Dra

ft Data

Re

cove

ry Pl

an by

Inter

nal A

udit

2. Ap

prov

al an

d imp

lemen

tation

of

the D

RP

3. Re

view

the cu

rrent

data

back

up

and r

ecov

ery p

olicie

s and

pr

oced

ures

4.

Appr

oval

of da

ta da

ta ba

ckup

an

d rec

over

y poli

cies a

nd

proc

edur

es

Offic

e of th

e Mu

nicipa

l Ma

nage

r

T Mn

yimba

Na

me: B

ongis

a No

dada

Po

sition

: ICT

Mana

ger

28 F

ebru

ary

2017

30

June

2017

30

Mar

ch

2017

30

June

2017

183

COAF

# EX

C #

Exce

ptio

n He

adin

g Su

mm

ary o

f Fin

ding

Na

ture

Su

gges

ted

Cont

rol

Impr

ovem

ents

Di

rect

orat

e HO

D Re

spon

sible

Offic

ial

Tim

e Lin

e

imple

menti

ng an

d tes

ting t

he

DRP

due t

o bud

get c

onstr

aints.

MG

T Re

port

91

Prog

ram

Chan

ge

Mana

geme

nt

Prog

ram

chan

ge m

anag

emen

t co

ntrols

wer

e con

cern

ing, d

ue

to tha

t alth

ough

the c

hang

e ma

nage

ment

proc

edur

es w

ere

docu

mente

d, the

y wer

e not

comp

rehe

nsive

. In ad

dition

, the

acce

ss of

the v

endo

rs/

prog

ramm

ers t

o the

prod

uctio

n en

viron

ment

was n

ot mo

nitor

ed.

This

was d

ue to

over

sight

by

mana

geme

nt to

ensu

re th

at the

co

ntrols

are a

dequ

ately

docu

mente

d. Al

so th

ere w

ere

limite

d ICT

reso

urce

s to e

nsur

e eff

ectiv

e mon

itorin

g of th

e se

rvice

prov

iders.

Infor

matio

n Te

chno

logy

1. Be

nchm

ark

chan

ge

mana

geme

nt pr

oced

ures

and

proc

esse

s with

othe

r insti

tution

s 2.

Revie

w cu

rrent

contr

ols to

ensu

re

effec

tive c

hang

e man

agem

ent.

3. Ap

prov

al of

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nage

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185

NGQU

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A LO

CAL

MUNI

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Se

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To en

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mplia

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17 an

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inter

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ved

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Ma

nage

r: Co

rpor

ate

Servi

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ntinu

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pacit

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levels

of th

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and

25

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mad

e

Achie

ved

N/A

N/A

Exec

utive

Ma

nage

r: Co

rpor

ate

Servi

ces

187

NGQU

SHW

A LO

CAL

MUNI

CIPA

LITY

IN

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SCOR

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ter of

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ancia

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r.

Exec

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nage

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Servi

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To en

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conti

nuou

s im

pleme

ntatio

n of

Munic

ipal v

ision

and

miss

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roug

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man R

esou

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geme

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n by

2017

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of

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ship

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for

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Exec

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Ma

nage

r: Co

rpor

ate

Servi

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188

NGQU

SHW

A LO

CAL

MUNI

CIPA

LITY

IN

STIT

UTIO

NAL

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2015

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and

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C08

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ted

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cil

calen

dar

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ved

N/A

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Exec

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Ma

nage

r: Co

rpor

ate

Servi

ces

Di

stribu

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f cou

ncil

notic

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and

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ld.

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regis

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rterly

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Partia

lly

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no fo

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quar

terly

ordin

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coun

cil

meeti

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ere

conv

ened

The t

arge

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be

en co

rrecte

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2016

/17

finan

cial y

ear,

so as

to

acco

mmod

ate

spec

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uncil

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nage

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and C

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ve

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Se

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Exter

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meeti

ngs

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have

ex

terna

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verts

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tially

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re

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be

en co

rrecte

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2016

/17

SDBI

P

Exec

utive

Ma

nage

r: Co

rpor

ate

Servi

ces

189

NGQU

SHW

A LO

CAL

MUNI

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LITY

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STIT

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nage

ment

Polic

y and

Re

cord

s Man

agem

ent

Proc

edur

es by

Sep

tembe

r 20

15

Repo

rts on

Re

cord

s Ma

nage

ment

Polic

y rev

iew &

Re

cord

s Ma

nage

ment

Pr

oced

ures

C14

R 38

,122

Reco

rds

mana

geme

nt po

licy

and

proc

edur

e ha

s not

been

re

viewe

d.

.Q1P

roce

dure

ma

nual

and

proo

f of

appr

oval.

1. Q3

Wor

ksho

p re

port

signe

d. 2.

Atten

danc

e re

gister

.1.Q4

im

pleme

ntatio

n re

port

signe

d by

HOD

.

Reco

rds

Mana

geme

nt po

licy

revie

wed a

nd

mana

geme

nt pr

oced

ure.

Partia

lly

Achie

ved

Prior

ity w

as

given

to B

TO

polic

ies

To be

done

in

the se

cond

qu

arter

of

2016

/17

finan

cial y

ear.

Exec

utive

Ma

nage

r: Co

rpor

ate

Servi

ces

KPA2

: BAS

IC S

ERVI

CE D

ELIV

ERY

AND

INFR

ASTR

UCTU

RE

KPA

Weig

ht 20

%

To en

sure

effec

tive,

effici

ent a

nd

econ

omica

l pro

vision

of

electr

ical s

ervic

es an

d str

eet li

ghtin

g to t

he

Maint

enan

ce of

ligh

ts in

rura

l are

as

No of

lights

ma

intain

ed in

a vil

lage

I01

R1,50

0,000

40

0 Stre

et lig

hts ha

ve

been

ma

intain

ed

1. Q1

to Q

4 qu

arter

ly re

ports

sign

ed

by th

e HOD

.

750 S

treet

lights

to be

ma

intain

ed

Partia

lly

Achie

ved

The s

ervic

e pr

ovide

r was

ap

point

ed la

te du

e to f

inanc

ial

cons

traint

s

The s

ervic

e pr

ovide

r has

be

en

appo

inted

and

the pr

oject

will

Exec

utive

Ma

nage

r: Te

chnic

al Se

rvice

s

190

NGQU

SHW

A LO

CAL

MUNI

CIPA

LITY

IN

STIT

UTIO

NAL

SCOR

ECAR

D 20

15-1

6 Ann

ual P

erfo

rman

ce R

epor

t as a

t 30 J

une 2

016

Stra

tegi

c Ob

jectiv

e St

rate

gy

Indi

cato

r In

dica

tor

Code

Bu

dget

Ba

selin

e Ev

iden

ce

Requ

ired

Annu

al Ta

rget

20

15/16

Achi

eved

/Not

Ac

hiev

ed

Reas

ons f

or

Varia

tion

Corre

ctive

Ac

tion

Cust

odian

comm

unity

of

Ngqu

shwa

by

2015

/2016

start

at the

be

ginnin

g of

2015

/16

finan

cial y

ear.

Ma

inten

ance

of m

unici

pal

build

ings

No of

build

ings t

o be

main

taine

d I02

R1

,621,7

14

No

munic

ipal

build

ing ha

s be

en

maint

ained

.

1. Q1

to Q

4 qu

arter

ly re

ports

sign

ed

by H

OD.

7 mun

icipa

l bu

ilding

s ma

intain

ed

annu

al in

terms

of

quar

ters

Achie

ved

N/A

N/A

Exec

utive

Ma

nage

r: Te

chnic

al Se

rvice

s

Ma

inten

ance

of M

unici

pal

Comm

unity

halls

No

of co

mmun

ity

halls

to be

ma

intain

ed

I03

R600

,000

4 mun

icipa

l co

mmun

ity

halls

have

be

en

maint

ained

1. Q1

to Q

4 Re

ports

sign

ed

by H

OD.

10 co

mmun

ity

halls

ma

intain

ed

per a

nnum

Achie

ved

N/A

N/A

Exec

utive

Ma

nage

r: Te

chnic

al Se

rvice

s

Ma

inten

ance

of st

reet

lights

and h

igh m

ast li

ghts

in ur

ban a

reas

.

No of

stre

et lig

hts

and h

igh m

asts

lights

main

taine

d in

urba

n are

as.

I04

R1,00

0,794

50

% of

mu

nicipa

l hi

mast

lights

an

d stre

et lig

hts ha

ve

been

ma

intain

ed

1. Q1

to Q

4 Re

port

signe

d by

the H

OD

High

mas

t lig

hts

maint

ained

10

0% an

d 10

0 Stre

et lig

hts

maint

ained

.

Partia

lly

Achie

ved

80%

of th

e hig

h mas

t lig

hts

maint

ained

an

d stre

et lig

hts w

ere n

ot ma

intain

ed

100%

, this

was

due t

o fina

ncial

co

nstra

ints.

This

proje

ct is

ongo

ing as

ma

intain

ed is

cu

rrentl

y tak

ing pl

ace,

and t

o be

finali

zed a

t the

end o

f the f

irst

quar

ter of

20

16/17

fin

ancia

l yea

r.

Exec

utive

Ma

nage

r: Te

chnic

al Se

rvice

s

Fa

cilita

tion o

f Insta

llatio

n of

electr

icity

in vil

lage

exten

sions

No of

mee

tings

an

d list

of vi

llage

ex

tensio

ns

I05

Pr

oject

list

was

subm

itted t

o Es

kom.

1. Q1

Rep

ort

signe

d by

HOD.

1.

Q2&Q

3 At

tenda

nce

regis

ter.

2. A

gend

a of

the m

eetin

g. 3.

Sign

ed

minu

tes.

June

2015

a pr

oject

list

subm

itted t

o Es

kom

Achie

ved

N/A

N/A

Exec

utive

Ma

nage

r: Te

chnic

al Se

rvice

s

191

NGQU

SHW

A LO

CAL

MUNI

CIPA

LITY

IN

STIT

UTIO

NAL

SCOR

ECAR

D 20

15-1

6 Ann

ual P

erfo

rman

ce R

epor

t as a

t 30 J

une 2

016

Stra

tegi

c Ob

jectiv

e St

rate

gy

Indi

cato

r In

dica

tor

Code

Bu

dget

Ba

selin

e Ev

iden

ce

Requ

ired

Annu

al Ta

rget

20

15/16

Achi

eved

/Not

Ac

hiev

ed

Reas

ons f

or

Varia

tion

Corre

ctive

Ac

tion

Cust

odian

To en

sure

a pr

oper

co

mmun

icatio

n be

twee

n Ngq

ushw

a LM

and A

DM in

issu

es of

wa

ter an

d san

itatio

n by

2015

/16 an

d bey

ond.

Arra

nging

and a

ttend

ing of

me

eting

s for

wate

r and

sa

nitati

on.

No of

mee

tings

att

ende

d I06

Op

erati

onal

3 Qua

rterly

me

eting

s we

re

atten

ded.

1. Q1

to Q

4 At

tenda

nce

regis

ter.

2. A

gend

a of

the m

eetin

g. 3.

Sign

ed

minu

tes.

4 Qua

rterly

me

eting

s att

ende

d

Achie

ved

N/A

N/A

Exec

utive

Ma

nage

r: Te

chnic

al Se

rvice

s

To en

sure

Con

struc

tion

of ex

isting

acce

ss

road

s and

inter

nal

stree

ts by

2015

/16 an

d be

yond

.

Cons

tructi

on of

Mgw

alana

int

erna

l road

s No

of km

’s of

grav

el ro

ad

cons

tructe

d

I07

R277

,280

No

Kilom

eters

w ere

co

nstru

cted

at Mgwa

lana.

1. Q1

Des

ign

repo

rt.

1. Q2

Ne

wspa

per

adve

rt for

co

nstru

ction

. 1.

Q3

Appo

intme

nt let

ter.

1. Q4

Pro

ject

comp

letion

ce

rtifica

te.

14 km

of

inter

nal ro

ads

to be

grav

eled

at Mg

walan

a

Achie

ved

N/A

N/A

Exec

utive

Ma

nage

r: Te

chnic

al Se

r vice

s

Co

nstru

ction

of D

ube

Sche

me ac

cess

road

No

of km

’s of

grav

el ro

ad

cons

tructe

d

I08

R4 00

0 000

No

Ki

lomete

rs we

re

cons

tructe

d at

Dube

.

1. Q1

Des

ign

repo

rt.

1. Q2

Ne

wspa

per

adve

rt for

co

nstru

ction

. 1.

Q3

Appo

intme

nt let

ter.

1. Q4

Pro

ject

comp

letion

ce

rtifica

te.

3,5 km

acce

ss

road

in D

ue

cons

tructe

d

Achie

ved

N/A

N/A

Exec

utive

Ma

nage

r: Te

chnic

al Se

rvice

s

Co

nstru

ction

of

Ngxa

kaxh

a Sch

eme

acce

ss ro

ads.

No of

km’s

of gr

avel

road

co

nstru

cted

I09

R2,00

0,000

No

Ki

lomete

rs we

re

cons

tructe

d at Ng

xaka

xha

1. Q1

Des

ign

repo

rt.

1. Q2

Ne

wspa

per

adve

rt for

co

nstru

ction

1.

Q3

3,8 km

of

grav

el ro

ads

cons

tructe

d in

Ngxa

kaxh

a

Partia

lly

Achie

ved

Shor

tage o

f pla

nt op

erato

rs re

sulte

d in t

he

delay

of

cons

tructi

on of

Tu

ku A

, int

erna

l road

s

Appo

intme

nt of

plant

oper

ators

first

quar

ter of

20

16/17

fin

ancia

l yea

r.

Exec

utive

Ma

nage

r: Te

chnic

al Se

rvice

s

192

NGQU

SHW

A LO

CAL

MUNI

CIPA

LITY

IN

STIT

UTIO

NAL

SCOR

ECAR

D 20

15-1

6 Ann

ual P

erfo

rman

ce R

epor

t as a

t 30 J

une 2

016

Stra

tegi

c Ob

jectiv

e St

rate

gy

Indi

cato

r In

dica

tor

Code

Bu

dget

Ba

selin

e Ev

iden

ce

Requ

ired

Annu

al Ta

rget

20

15/16

Achi

eved

/Not

Ac

hiev

ed

Reas

ons f

or

Varia

tion

Corre

ctive

Ac

tion

Cust

odian

Appo

intme

nt let

ter.

1. Q4

Pro

ject

comp

letion

ce

rtifica

te.

which

is al

so

being

done

int

erna

lly.

Co

nstru

ction

of T

uku A

n ac

cess

road

No

of km

’s of

grav

el ro

ad

cons

tructe

d

I10

R4,00

0,000

No

Ki

lomete

rs we

re

cons

tructe

d

1. Q1

Des

ign

repo

rt.

1. Q2

Ne

wspa

per

adve

rt for

co

nstru

ction

1.

Q3

Appo

intme

nt let

ter.

1. Q4

Pro

ject

comp

letion

ce

rtifica

te

8,7 km

of

grav

el ro

ad

cons

tructe

d in

Tuku

A

Achie

ved

N/A

N/A

Exec

utive

Ma

nage

r: Te

chnic

al Se

rvice

s

To en

sure

main

tenan

ce

of ex

isting

acce

ss

road

s and

relat

ed

storm

wate

r by 2

015/1

6 an

d bey

ond.

Blad

ing of

exist

ing gr

avel

road

s in r

ural

area

s. No

of km

’s of

exist

ing gr

avel

road

s blad

ed

(Dry

bladin

g

I11

R4,00

0,000

25

% of

Ex

isting

gr

avel

road

s wer

e bla

ded.

1. Q1

to Q

4 Re

port

signe

d by

HOD

120k

m Gr

avel

road

s blad

ed

in ru

ral a

reas

Achie

ved

N/A

N/A

Exec

utive

Ma

nage

r: Te

chnic

al Se

rvice

s

Potho

le pa

tching

in ur

ban

area

s Sq

uare

mete

rs of

potho

le pa

tched

in

urba

n ar

eas.(

Surfa

ced

Road

s)

I12

R4,10

0,240

50

% of

Sq

uare

Po

thole

patch

ing in

ur

ban a

reas

wa

s don

e.

1. Q1

to Q

4 Re

port

signe

d by

HOD

.

Patch

ing of

po

tholes

in

urba

n are

as

800 S

quar

e me

ter

Partia

lly

Achie

ved

Due t

o the

we

ather

and

finan

cial

cons

traint

s not

all po

tholes

we

re do

ne as

pe

r the

targ

et.

This

targe

t is

ongo

ing.

Exec

utive

Ma

nage

r: Te

chnic

al Se

rvice

s

Gr

avell

ing an

d clea

ning o

f sto

rm w

ater d

rains

in

urba

n are

as.

Squa

re m

eters

of gr

avel

road

s pa

tched

and n

o of

storm

wate

r dra

ins

clean

ed.

I13

R4,10

0,240

30

% of

sto

rm w

ater

drain

s and

re

-gra

vellin

g wa

s don

e.

1. Q1

to Q

4 Re

port

signe

d by

HOD

.

Re-g

rave

lling

of 5 k

m in

a fin

ancia

l yea

r an

d clea

ning

100m

open

v-dr

ains o

f sto

rm-w

ater in

ur

ban a

reas

.

Partia

lly

Achie

ved

The r

e-gr

avell

ing pa

rt of

this t

arge

t ha

s not

been

do

ne du

e to

the fa

ct the

co

uncil

took

a re

solut

ion to

co

nstru

ct

Appo

intme

nt of

plant

oper

ators

first

quar

ter of

20

16/17

fin

ancia

l yea

r.

Exec

utive

Ma

nage

r: Te

chnic

al Se

rvice

s

193

NGQU

SHW

A LO

CAL

MUNI

CIPA

LITY

IN

STIT

UTIO

NAL

SCOR

ECAR

D 20

15-1

6 Ann

ual P

erfo

rman

ce R

epor

t as a

t 30 J

une 2

016

Stra

tegi

c Ob

jectiv

e St

rate

gy

Indi

cato

r In

dica

tor

Code

Bu

dget

Ba

selin

e Ev

iden

ce

Requ

ired

Annu

al Ta

rget

20

15/16

Achi

eved

/Not

Ac

hiev

ed

Reas

ons f

or

Varia

tion

Corre

ctive

Ac

tion

Cust

odian

proje

cts

inter

nally

. This

led

to th

e ma

inten

ance

off

ice no

t ha

ving

capa

city t

o do

re-g

rave

lling.

To

facil

itate

the

maint

enan

ce of

pr

ovinc

ial ro

ads a

nd

relat

ed st

orm

water

by

2015

/16 an

d bey

ond.

Facil

itate

the m

ainten

ance

of

prov

incial

road

s by

depa

rtmen

t of r

oads

and

trans

port

No of

mee

tings

ar

rang

ed an

d att

ende

d betw

een

NLM

and D

RPW

.

I14

Oper

ation

al 3 Q

uarte

rly

Meeti

ngs

were

att

ende

d

Atten

danc

e re

gister

. 2.

Age

nda o

f the

mee

ting.

3. S

igned

mi

nutes

.

4 mee

tings

to

be at

tende

d.

N/A

N/A

Exec

utive

Ma

nage

r: Te

chnic

al Se

rvice

s

To en

sure

cons

tructi

on

of Co

mmun

ity H

alls b

y 20

15/16

and b

eyon

d

Cons

tructi

on of

Mqw

ashu

C o

mmun

ity H

all

% C

omple

tion o

f Mq

wash

u Co

mmun

ity H

all

I15

R1,25

6,717

No

co

mmun

ity

hall w

as

cons

tructe

d at

Mqwa

shu

1. Q1

Ap

point

ment

letter

. 1.

Q2

Cons

tructi

on

stage

and 5

0%

work

done

. 1.

Q3

Comp

letion

ce

rtifica

te.

100%

Co

mplet

ion of

Mq

wash

u co

mmun

ity

hall

Achie

ved

N/A

N/A

Exec

utive

Ma

nage

r: Te

chnic

al Se

rvice

s

Co

nstru

ction

of N

ier

Comm

unity

Hall

%

Com

pletio

n of

Nier

Com

munit

y ha

ll

I16

R1,25

6,717

No

co

mmun

ity

Hall w

as

cons

tructe

d at

Nier

.

1. Q1

Ap

point

ment

letter

. 1.

Q2

Cons

tructi

on

stage

and 5

0%

work

done

1.

Q3

Comp

letion

ce

rtifica

te.

100%

co

mplet

ion of

Ni

er

Comm

unity

Ha

ll

Achie

ved

N/A

N/A

Exec

utive

Ma

nage

r: Te

chnic

al Se

rvice

s

Co

nstru

ction

of N

dlamb

e Co

mmun

ity H

all

% C

omple

tion o

f Nd

lambe

Co

mmun

ity H

all

l17

Ndlam

be no

co

mmun

ity

Hall

1. Q1

Ap

point

ment

letter

. 1.

Q2

100%

Co

mplet

ion of

Nd

lambe

Achie

ved

194

NGQU

SHW

A LO

CAL

MUNI

CIPA

LITY

IN

STIT

UTIO

NAL

SCOR

ECAR

D 20

15-1

6 Ann

ual P

erfo

rman

ce R

epor

t as a

t 30 J

une 2

016

Stra

tegi

c Ob

jectiv

e St

rate

gy

Indi

cato

r In

dica

tor

Code

Bu

dget

Ba

selin

e Ev

iden

ce

Requ

ired

Annu

al Ta

rget

20

15/16

Achi

eved

/Not

Ac

hiev

ed

Reas

ons f

or

Varia

tion

Corre

ctive

Ac

tion

Cust

odian

Cons

tructi

on

stage

and 5

0%

work

done

1.

Q3

Comp

letion

ce

rtifica

te.

Comm

unity

Ha

ll.

Co

ordin

ate co

nnec

tion o

f all

comm

unity

halls

10

0% co

nnec

tion

of all

unco

nnec

ted

comm

unity

halls

l18

R2,50

0,000

60

% of

co

mmun

ity

halls

are

conn

ected

.

1. Q3

& Q

4 Si

gned

Rep

ort

by H

OD on

co

nnec

tions

100%

co

nnec

tion f

or

all

unco

nnec

ted

comm

unity

ha

lls.

Achie

ved

N/A

N/A

Exec

utive

Ma

nage

r: Te

chnic

al Se

rvice

s

To en

sure

cons

tructi

on

of Sp

orts

field

by

2015

/16

Cons

tructi

on of

Ham

burg

Sp

orts

field

% C

omple

tion o

f Ha

mbur

g spo

rts

field

l19

R2,03

9,650

0%

spor

t fie

ld wa

s co

nstru

cted

at Hamb

urg.

1. Q1

Ap

point

ment

letter

. 1.

Q2 R

epor

t ind

icatin

g 25%

. 1.

Q3

Appo

intme

nt let

ter.

1. Q4

Co

mplet

ion

certif

icate.

100%

Co

mplet

ion of

Ha

mbur

g Sp

orts

Field

Partia

lly

Achie

ved

This

proje

ct sta

rted l

ate

due t

o ins

tabilit

y in

the

comm

unity

.

The p

rojec

t to

be fin

alize

d in

the fir

st qu

arter

of

2016

/17

finan

cial y

ear.

Exec

utive

Ma

nage

r: Te

chnic

al Se

rvice

s

Co

nstru

ction

of G

lenmo

re

Spor

ts fie

ld %

Com

pletio

n of

Glen

more

spor

ts fie

ld

l20

R25 2

64 11

6 0%

spor

t fie

ld wa

s co

nstru

cted

at Glen

more

.

1. Q2

Adv

ert

for

cons

tructi

on.

1. Q3

Ap

point

ment

letter

. 1.

Q4

Comp

letion

ce

rtifica

te.

100%

Co

mplet

ion of

Gl

enmo

re

Spor

ts Fie

ld

Achie

ved

N/A

N/A

Exec

utive

Ma

n age

r: Te

chnic

al Se

rvice

s

To en

sure

comm

itmen

t of

MIG

expe

nditu

re fo

r the

2015

/16 fin

ancia

l ye

ar

100 %

Spe

nding

of M

IG

funds

for 2

015/2

016 F

Y %

Com

pletio

n of

MIG

funds

for

2015

/2016

FY

l21

Oper

ation

al No

MIG

qu

arter

ly ex

pend

iture

re

port

was

prep

ared

.

1. Q1

to Q

4 Si

gned

ex

pend

iture

re

ports

.

100%

MIG

ex

pend

iture

re

port.

Achie

ved

N/A

N/A

Exec

utive

Ma

nage

r: Te

chnic

al Se

rvice

s

195

NGQU

SHW

A LO

CAL

MUNI

CIPA

LITY

IN

STIT

UTIO

NAL

SCOR

ECAR

D 20

15-1

6 Ann

ual P

erfo

rman

ce R

epor

t as a

t 30 J

une 2

016

Stra

tegi

c Ob

jectiv

e St

rate

gy

Indi

cato

r In

dica

tor

Code

Bu

dget

Ba

selin

e Ev

iden

ce

Requ

ired

Annu

al Ta

rget

20

15/16

Achi

eved

/Not

Ac

hiev

ed

Reas

ons f

or

Varia

tion

Corre

ctive

Ac

tion

Cust

odian

To en

sure

comp

lianc

e an

d acc

ounta

bility

by

2015

/16.

Coor

dinate

im

pleme

ntatio

n of M

anco

re

solut

ions t

hat ta

lks to

Te

chnic

al Se

rvice

s.

Imple

menta

tion o

f Co

uncil

and

MANC

O re

solut

ions

l22

Oper

ation

al Co

uncil

re

solut

ion

regis

ter an

d MA

NCO

reso

lution

re

gister

we

re

prep

ared

.

1. Q1

to Q

4 Co

uncil

and

MANC

O re

solut

ion

regis

ter

No of

Cou

ncil

and M

ANCO

re

solut

ions

Achie

ved

N/A

N/A

Exec

utive

Ma

nag e

r: Te

chnic

al Se

rvice

s

Atten

d to

corre

ctive

s me

asur

es as

ide

ntifie

d in

inter

nal a

udit

repo

rts to

redu

ce

risk a

reas

with

in the

depa

rtmen

t

l23

3 C

orre

ctive

me

asur

es

identi

fied b

y IA

to re

duce

ris

k wer

e att

ende

d.

1. Up

dated

risk

regis

ter fo

r tec

hnica

l se

rvice

s with

25

% re

ducti

on

to ris

ks.

2 Qua

rterly

ma

nage

ment

repo

rts to

be

subm

itted.

Achie

ved

N/A

N/A

Exec

utive

Ma

nage

r: Te

chnic

al Se

rvice

s

Atten

d to

corre

ctive

s me

asur

es as

ide

ntifie

d by A

G tal

king t

o the

de

partm

ent.

l24

4 %

of

issue

s ra

ised b

y A G

wer

e att

ende

d.

1. Q3

Upd

ated

audit

plan

sh

owing

40%

re

solve

d iss

ues.

1.Q4 U

pdate

d au

dit ac

tion

plan s

howi

ng

100%

reso

lved

100%

att

enda

nce o

n iss

ues r

aised

by

AG

affec

ting

Tech

nical

servi

ce.

Achie

ved

N/A

N/A

Exec

utive

Ma

nage

r: Te

chnic

al Se

rvice

s

To en

sure

prop

er

plann

ing on

road

s and

sto

rm w

ater b

y 201

5/16

and b

eyon

d

Coor

dinate

deve

lopme

nt of

road

and s

torm

water

ma

nage

ment

plan.

Deve

lop R

oad

and S

torm -

water

ma

nage

ment

Plan

l25

Oper

ation

al

Draft

Ma

inten

anc

e plan

not in

ex

isten

ce.

1. Q3

Adv

ert

for

cons

tructi

on.

2.

Appo

intme

nt let

ter.

1.Q4 D

raft

Maste

r Plan

Appr

oved

St

orm -

water

Ma

nage

ment

Maste

r Plan

.

Partia

lly

Achie

ved

Await

ing

appo

intme

nt by

the M

M

Appo

intme

nt by

the 3

0 of

Sep 2

016

Exec

utive

Ma

nage

r: Te

chnic

al Se

rvice

s

Deve

lop m

unici

pal

road

datab

ase i

n 20

15/16

.

l26

Ro

ad

datab

ase i

s no

t in

exist

ence

.

1. Q3

Dra

ft de

sktop

repo

rt sig

ned.

1. Q4

Dra

ft re

port

signe

d.

Data

base

for

all M

unici

pal

road

s and

Bu

sines

s

Achie

ved

N/A

N/A

Exec

utive

Ma

nage

r: Te

chnic

al Se

rvice

s

196

NGQU

SHW

A LO

CAL

MUNI

CIPA

LITY

IN

STIT

UTIO

NAL

SCOR

ECAR

D 20

15-1

6 Ann

ual P

erfo

rman

ce R

epor

t as a

t 30 J

une 2

016

Stra

tegi

c Ob

jectiv

e St

rate

gy

Indi

cato

r In

dica

tor

Code

Bu

dget

Ba

selin

e Ev

iden

ce

Requ

ired

Annu

al Ta

rget

20

15/16

Achi

eved

/Not

Ac

hiev

ed

Reas

ons f

or

Varia

tion

Corre

ctive

Ac

tion

Cust

odian

2. Bu

sines

s pla

ns fo

r all 1

3 wa

rds.

Plan

s for

each

wa

rd

Monit

oring

of fu

nds i

n MI

G pr

ojects

Mo

nthly

cash

flow

monit

oring

in 20

15/16

FY

proje

cts.

% fu

nds s

pent

in ea

ch pr

oject

l27

12

MIG

ca

sh flo

w re

ports

we

re

prod

uced

.

1. Mo

nthly

signe

d rep

orts

12 M

onthl

y ca

sh flo

w MI

G re

ports

Achie

ved

N/A

N/A

Exec

utive

Ma

nage

r: Te

chnic

al Se

rvice

s

Comm

itmen

t of E

PWP

expe

nditu

re fo

r the

20

15/16

finan

cial y

ear

100 %

Spe

nding

of E

PWP

funds

for 2

015/2

016 F

Y %

Com

pletio

n of

EPW

P fun

ds fo

r 20

15/20

16 F

Y

l28

12

EPW

P sp

endin

g re

ports

we

re

prod

uced

.

1.12 m

onths

sig

ned E

PWP

expe

nditu

re

repo

rts.

12 E

PWP

expe

nditu

re

repo

rts.

Achie

ved

N/A

N/A

Exec

utive

Ma

nage

r: Te

chnic

al Se

rvice

s

KPA

3 : F

INAN

CIAL

VIA

BILI

TY

K

PA W

eight

20%

To

have

and m

aintai

n an

effic

ient a

nd

effec

tive s

ystem

of

expe

nditu

re

mana

geme

nt by

20

15/16

and b

eyon

d.

Revie

wal o

f exis

ting

polic

ies an

d the

proc

edur

e ma

nuals

and i

ts im

pleme

ntatio

n and

mo

nitor

ing.

Appr

oved

re

viewe

d poli

cies

and p

roce

dure

ma

nuals

by

Coun

cil fo

r con

trol

envir

onme

nt

F01

R 44

2 808

Ex

pend

iture

ma

nage

ment

polic

y in

place

.

1.Poli

cy

2.Cou

ncil

reso

lution

Appr

oved

ex

pend

iture

ma

nage

ment

polic

y.

Achie

ved

N/A

N/A

Chief

Fina

ncial

Of

ficer

Ensu

re al

l com

plian

ce

reco

ncilia

tions

and

expe

nditu

re re

lated

re

ports

are d

one

timeo

usly.

Timeo

usly

reco

ncilia

tion a

nd

expe

nditu

re

repo

rts pr

epar

ed

base

d on t

he ag

e an

alysis

from

the

finan

cial s

ystem

F02

12 ba

lance

sh

eets

items

re

conc

iliatio

n rep

orts

and o

ther

expe

nditu

re

repo

rts

were

pr

epar

ed

1. Q1

to Q

4 re

cons

and

expe

nditu

re

repo

rts si

gned

by

CFO

.

12 A

ccur

ate

reco

ncilia

tion

and o

ther

expe

nditu

re

repo

rts

prep

ared

and

revie

wed.

Achie

ved

N/A

N/A

Chief

Fina

ncial

Of

ficer

Ef

fectiv

e man

agem

ent o

f pa

yroll s

ystem

Pa

ymen

t of a

ll Of

ficial

s, Co

uncil

ors a

nd

third

partie

s with

in the

requ

ired

perio

d.

F03

12 P

ayro

ll re

ports

and

third

party

pa

ymen

t re

port

were

pr

epar

ed.

1. Q1

to Q

4 Re

ports

sign

ed

by C

FO.

12 P

ayro

ll re

ports

and

third

party

pa

ymen

t re

port.

Achie

ved

N/A

N/A

Chief

Fina

ncial

Of

ficer

To co

ntinu

ously

ensu

re

an ef

ficien

t, effe

ctive

De

velop

ment,

Rev

iew an

d Mo

nitor

ing of

Rev

enue

Ap

prov

ed

revie

wed p

olicie

s F0

4 R

3,199

,707.0

0 Re

vue

enha

ncem

e1. En

hanc

emen

t Ap

prov

ed

Reve

nue

Achie

ved

N/A

N/A

Chief

Fina

ncial

Of

ficer

197

NGQU

SHW

A LO

CAL

MUNI

CIPA

LITY

IN

STIT

UTIO

NAL

SCOR

ECAR

D 20

15-1

6 Ann

ual P

erfo

rman

ce R

epor

t as a

t 30 J

une 2

016

Stra

tegi

c Ob

jectiv

e St

rate

gy

Indi

cato

r In

dica

tor

Code

Bu

dget

Ba

selin

e Ev

iden

ce

Requ

ired

Annu

al Ta

rget

20

15/16

Achi

eved

/Not

Ac

hiev

ed

Reas

ons f

or

Varia

tion

Corre

ctive

Ac

tion

Cust

odian

syste

m of

reve

nue

mana

geme

nt by

20

15/16

and b

eyon

d .

Mana

geme

nt Po

licies

, pr

oced

ure m

anua

ls an

d the

deve

lopme

nt of

reve

nue e

nhan

ceme

nt str

ategy

.

and p

roce

dure

ma

nuals

by

Coun

cil fo

r /co

ntrol

envir

onme

nt.

nt str

ategy

is

in pla

ce.

strate

gy.

2.Cou

ncil

reso

lution

enha

ncem

ent

strate

gy

Monit

or th

e im

pleme

ntatio

n of th

e Re

venu

e enh

ance

ment

Stra

tegy t

o inc

reas

e the

ov

erall

reve

nue c

ollec

tion

by 60

%

Month

ly re

venu

e co

llecti

on re

ports

. F0

5 12

mon

thly

reve

nue

colle

ction

s re

ports

we

re

prep

ared

.

1.Rep

orts

signe

d by C

FO

with

colle

ction

ra

te of

15%

x4

12 m

onthl

y re

venu

e co

llecti

ons

repo

rts.

Achie

ved

N/A

N/A

Chief

Fina

ncial

Of

ficer

Deve

lop th

ree y

ear

finan

cial re

cove

ry pla

n. Ap

prov

ed

Finan

cial re

cove

ry pla

n.

F06

Fin

ancia

l re

cove

ry pla

n is n

ot in

place

.

1. Q3

Dra

ft pla

n. 2.

Coun

cil

reso

lution

. 1.

Q4 fin

al pla

n. 2.C

ounc

il re

solut

ion

Appr

oved

thr

ee ye

ar

finan

cial

reco

very

plan

Not A

chiev

ed

Prov

incial

Tr

easu

ry co

uld

not a

ssist

as

requ

ested

The t

arge

t will

be

imple

mente

d in

the se

cond

qu

arter

of

2016

/17

Finan

cial y

ear.

Chief

Fina

ncial

Of

ficer

Ensu

re in

digen

t ho

useh

olds w

ithin

Ngqu

shwa

Loca

l Mu

nicipa

lity ju

risdic

tion

are r

egist

ered

for F

r ee

Basic

Ser

vices

Deve

loped

cre

dible

indige

nt re

gister

.

F07

Ind

igent

regis

ter is

in

place

.

1. Ind

igent

regis

ter

upda

ted.

2.Cou

ncil

reso

lution

Upda

ted

Indige

nt re

gister

Achie

ved

N/A

N/A

Chief

Fina

ncial

Of

ficer

Data

Clea

nsing

(sou

nd

billin

g sys

tem fo

r su

staina

bility

)

Accu

rate

and

relia

ble of

mon

thly

billin

g info

rmati

on

syste

m tha

t will

be

reco

ncile

d with

va

luatio

n roll

on a

month

ly ba

ses.(

Month

ly bil

ling r

epor

t

F08

12

Mon

thly

accu

rate

billin

g inf

orma

tion

repo

rts

were

pr

epar

ed.

1. Q1

to Q

4 bil

ling r

epor

ts sig

ned b

y CF

O.

repo

rts fo

r 12

Month

s on

billin

g

Achie

ved

N/A

N/A

Chief

Fina

ncial

Of

ficer

To en

sure

and m

aintai

n an

effec

tive,

effici

ent,

fair,t

rans

pare

nt,co

mpati

Revie

w of

the ex

isting

scm

polic

ies an

d pro

cedu

re

manu

als an

d

Appr

oved

re

viewe

d poli

cies

and p

roce

dure

F09

R 34

,140

Revie

wed

SCM

polic

y 1.

Q3 D

raft

polic

y. 2.

Coun

cil

Appr

oved

and

revie

wed

SCM

polic

y.

Achie

ved

N/A

N/A

Chief

Fina

ncial

Of

ficer

198

NGQU

SHW

A LO

CAL

MUNI

CIPA

LITY

IN

STIT

UTIO

NAL

SCOR

ECAR

D 20

15-1

6 Ann

ual P

erfo

rman

ce R

epor

t as a

t 30 J

une 2

016

Stra

tegi

c Ob

jectiv

e St

rate

gy

Indi

cato

r In

dica

tor

Code

Bu

dget

Ba

selin

e Ev

iden

ce

Requ

ired

Annu

al Ta

rget

20

15/16

Achi

eved

/Not

Ac

hiev

ed

Reas

ons f

or

Varia

tion

Corre

ctive

Ac

tion

Cust

odian

tive,

econ

omica

l and

co

st eff

ectiv

e sys

tem of

su

pply

chain

ma

nage

ment

by

2015

/16 an

d be y

ond

imple

menta

tion,

monit

oring

and r

epor

ting

manu

als by

Co

uncil

for c

ontro

l en

viron

ment.

is no

t in

place

. re

solut

ion.

1. Q4

Fina

l po

licy.

2.Cou

ncil

reso

lution

Ensu

re th

at the

re is

da

tabas

e man

agem

ent

syste

m, an

d ens

ure

comp

lianc

e with

SCM

re

gulat

ion in

ensu

ring

strict

ly us

e of s

uppli

ers

regis

tered

in th

e Mun

icipa

l su

pplie

r data

base

Imple

menta

ble

datab

ase i

n the

fin

ancia

l sys

tem.

F10

4 q

uarte

rly

Revie

wed

repo

rt on

us

e of

supp

liers

re

gister

ed

on

datab

ase

were

pr

epar

ed

1. Q1

to Q

4 re

viewe

d da

tabas

e sig

ned b

y CFO

4 qua

rterly

re

viewe

d da

tabas

e

Partia

lly

Achie

ved

Prov

incial

Tr

easu

ry ha

s int

rodu

ced

a ne

w ce

ntra

lised

Pr

ovinc

ial d

ata

base

To ut

ilised

da

tabas

e by

Prov

incial

Tr

easu

ry

Chief

Fina

ncial

Of

ficer

To en

sure

and m

aintai

n an

effec

tive,

effici

ent,

fair,

econ

omica

l and

eff

ectiv

e sys

tem of

su

pply

chain

ma

nage

ment

by

2015

/16 an

d bey

ond.

Imple

menta

tion o

f con

tract

mana

geme

nt sy

stem

as

per s

ec 11

6 of th

e MFM

A

Timeo

usly

repo

rting o

n pe

rform

ance

of al

l mu

nicipa

l ser

vices

pr

ovide

rs to

ensu

re th

at the

re

is va

lue fo

r mon

ey

for se

rvice

s re

nder

ed.

F11

3 qua

rterly

re

ports

for

servi

ce

prov

iders

perfo

rman

ce w

ere

prep

ared

1.Q1 t

o Q4

perfo

rman

ce

repo

rts of

se

rvice

pr

ovide

rs,

signe

d by C

FO

and S

CM

Mana

ger

Quar

terly

repo

rts fo

r se

rvice

pr

ovide

rs pe

rform

ance

Achie

ved

N/A

N/A

Chief

Fina

ncial

Of

ficer

Imple

menta

tion o

f the

appr

oved

proc

urem

ent

plans

in lin

e with

20

15/20

16 S

DBIP

.

No. r

epor

ts pr

epar

ed on

im

pleme

ntatio

n of

the ap

prov

ed

proc

urem

ent p

lan.

F12

2 q

uarte

rly

repo

rts on

im

pleme

ntat

ion of

pr

ocur

emen

ts pla

ns

were

done

.

1. Q1

to Q

4 qu

arter

ly re

ports

sign

ed

by C

FO.

4 Qua

rterly

pr

ocur

emen

t pla

ns re

ports

to

coun

cil

struc

tures

Achie

ved

N/A

N/A

Chief

Fina

ncial

Of

ficer

Effec

tive b

udge

t ma

nage

ment

syste

ms

by 20

15/16

and

beyo

nd.

Revie

w of

exist

ing po

licies

an

d the

proc

edur

e ma

nuals

and i

ts im

pleme

ntatio

n and

mo

nitor

ing

Appr

oved

re

viewe

d poli

cies

and p

roce

dure

ma

nuals

by

Coun

cil fo

r con

trol

envir

onme

nt

F13

R 38

,681

Polic

ies an

d pr

ocur

e ma

nuals

to

be re

viewe

d

1. Q1

.2 po

licies

2.

Coun

cil

reso

lution

. 1.Q

2.Fina

l po

licies

2 Rev

iewed

Bu

dget

polic

ies an

d 1

proc

edur

e Ma

nual

Achie

ved

N/A

N/A

Chief

Fina

ncial

Of

ficer

199

NGQU

SHW

A LO

CAL

MUNI

CIPA

LITY

IN

STIT

UTIO

NAL

SCOR

ECAR

D 20

15-1

6 Ann

ual P

erfo

rman

ce R

epor

t as a

t 30 J

une 2

016

Stra

tegi

c Ob

jectiv

e St

rate

gy

Indi

cato

r In

dica

tor

Code

Bu

dget

Ba

selin

e Ev

iden

ce

Requ

ired

Annu

al Ta

rget

20

15/16

Achi

eved

/Not

Ac

hiev

ed

Reas

ons f

or

Varia

tion

Corre

ctive

Ac

tion

Cust

odian

2.Cou

ncil

reso

lution

To

conti

nuou

sly

ensu

re ef

fectiv

e, ec

onom

ical a

nd

comp

liant

munic

ipal

busin

ess o

pera

tions

in

line w

ith ap

prov

ed

plans

by 20

15/16

and

beyo

nd

Prep

arati

on of

a bu

dget

proc

ess p

lan in

line w

ith

MFMA

and M

SA.

Adop

ted bu

dget

proc

ess p

lan by

co

uncil

befor

e 31

Augu

st an

d mo

nitor

its

imple

menta

tion.

F14

Budg

et pr

oces

s pla

n in

place

1. Pr

oces

s pla

n. 2.

Coun

cil

reso

lution

.

Appr

oved

bu

dget

proc

ess p

lan.

Achie

ved

N/A

N/A

Chief

Fina

ncial

Of

ficer

Pr

epar

ation

of a

reali

stic

and c

redib

le bu

dget

for

soun

d fina

ncial

ad

minis

tratio

n and

mo

nitor

ing its

im

pleme

ntatio

n.

Appr

oved

cred

ible

annu

al bu

dget

by

coun

cil an

d en

sure

its

imple

menta

tion

and m

onito

ring.

F15

Appr

oved

20

16/20

17

Budg

et in

place

1. Q1

to Q

2 Re

port

signe

d by

CFO

. 1.

Q3 D

raft

budg

et.

2. Co

uncil

re

solut

ion.

1. Q4

final

budg

et.

2. Co

uncil

re

solut

ion.

2016

/2017

bu

dget

appr

oved

by

coun

cil

Achie

ved

N/A

N/A

Chief

Fina

ncial

Of

ficer

Month

ly pr

epar

ation

and

subm

ission

s of b

udge

t re

turns

and m

onthl

y re

quire

d rep

orts,

quar

terly

and h

alf ye

ar in

line w

ith

the M

FMA.

Proo

f of p

repa

red

revie

wed a

nd

subm

itted

month

ly, qu

arter

ly an

d half

year

re

ports

in lin

e with

the

MFM

A.

F16

Numb

er of

Se

ction

52,

S71 r

epor

ts su

bmitte

d to

Acco

untin

g Of

ficer

, Ma

yor a

nd

other

au

thoriti

es

were

pr

epar

ed.

1. Q3

to Q

4 re

ports

and

proo

f of

subm

ission

4 Qua

rterly

re

ports

. Ac

hieve

d N/

A N/

A Ch

ief F

inanc

ial

Offic

er

Mid-

year

budg

et an

d per

forma

nce

asse

ssme

nt re

port.

F17

Mid-

year

bu

dget

and

perfo

rman

ce

1. Mi

d-ye

ar

repo

rt.

2. Co

uncil

re

solut

ion.

Appr

oved

Mi

d-ye

ar

budg

et an

d pe

rform

ance

Achie

ved

N/A

N/A

Chief

Fina

ncial

Of

ficer

200

NGQU

SHW

A LO

CAL

MUNI

CIPA

LITY

IN

STIT

UTIO

NAL

SCOR

ECAR

D 20

15-1

6 Ann

ual P

erfo

rman

ce R

epor

t as a

t 30 J

une 2

016

Stra

tegi

c Ob

jectiv

e St

rate

gy

Indi

cato

r In

dica

tor

Code

Bu

dget

Ba

selin

e Ev

iden

ce

Requ

ired

Annu

al Ta

rget

20

15/16

Achi

eved

/Not

Ac

hiev

ed

Reas

ons f

or

Varia

tion

Corre

ctive

Ac

tion

Cust

odian

asse

ssme

nt re

port.

as

sess

ment

repo

rt.

Ad

justm

ent

Budg

et of

2015

/2016

ap

prov

ed by

co

uncil

F18

1 Ad

justm

ent

budg

et ap

prov

ed

by co

uncil

. Gr

ant

expe

nditu

re

repo

rts

subm

itted t

o the

relev

ant

struc

ture

were

pr

epar

ed.

1. Q2

Bud

get

analy

sis re

port

signe

d. 1.

Q3.A

djuste

d bu

dget.

2.C

ounc

il re

solut

ion

2015

/2016

ap

prov

ed

adjus

tmen

t bu

dget.

12

gran

t ex

pend

iture

re

ports

su

bmitte

d to

the re

levan

t str

uctur

e.

Achie

ved

N/A

N/A

Chief

Fina

ncial

Of

ficer

Monit

or &

ensu

re th

e im

pleme

ntatio

n of A

udit

and R

isk A

ction

Plan

s by

2015

/16 an

d bey

ond

to ac

hieve

bette

r aud

it op

inion

.

Deve

lopme

nt an

d im

pleme

ntatio

n of a

udit

and r

isk ac

tion p

lans t

o ac

hieve

bette

r aud

it op

inion

for 2

015/2

016.

Deve

loped

risk

plan a

nd au

dit

actio

n plan

Re

ducti

on fo

r bes

t co

ntrol

envir

onme

nt in

orde

r to a

chiev

e cle

an

admi

nistra

tion.

F19

R26 0

88 95

8 4 A

udit

Actio

n plan

pr

ogre

ss

repo

rts an

d ris

k acti

on

plan.

1. Q1

to Q

4 up

dated

audit

ac

tion p

lan.

2. Pe

rcenta

ges

Audit

actio

n pla

n pro

gres

s re

port

and r

isk

actio

n plan

pr

ogre

ss

repo

rt

Achie

ved

N/A

N/A

Chief

Fina

ncial

Of

ficer

To de

velop

soun

d fin

ancia

l man

agem

ent

withi

n the

insti

tution

for

finan

cial v

iabilit

y to

achie

ve cl

ean

admi

nistra

tion b

y 20

15/16

and b

eyon

d.

Prep

arati

on an

d su

bmiss

ion of

cred

ible

finan

cial s

tatem

ents

quar

terly

for hi

gh le

vel o

f ac

coun

tabilit

y.

Deve

loped

and

revie

wed q

uarte

rly

credib

le re

ports

an

d fina

ncial

sta

temen

ts thr

ough

mon

thly

upda

tes an

d mo

nitor

ing of

G.L.

F20

20

14/20

15

Annu

al Fin

ancia

l St

ateme

nts

in pla

ce

1. Q1

Pro

of of

subm

ission

. 1.

Q2 pr

oof o

f su

bmiss

ion to

CF

O.

1. Q3

Bi-

annu

al fin

ancia

l sta

temen

ts sig

ned.

2014

/2015

An

nual

Finan

cial

State

ments

Su

bmitte

d to

the O

ffice o

f AG

(SA)

by

the 31

st Au

gust

2015

.Sub

miss

ion of

2015

/16

Bi- A

nnua

l

Achie

ved

N/A

N/A

Chief

Fina

ncial

Of

ficer

201

NGQU

SHW

A LO

CAL

MUNI

CIPA

LITY

IN

STIT

UTIO

NAL

SCOR

ECAR

D 20

15-1

6 Ann

ual P

erfo

rman

ce R

epor

t as a

t 30 J

une 2

016

Stra

tegi

c Ob

jectiv

e St

rate

gy

Indi

cato

r In

dica

tor

Code

Bu

dget

Ba

selin

e Ev

iden

ce

Requ

ired

Annu

al Ta

rget

20

15/16

Achi

eved

/Not

Ac

hiev

ed

Reas

ons f

or

Varia

tion

Corre

ctive

Ac

tion

Cust

odian

Finan

cial

State

ment

to Ac

coun

ting

Offic

er

Ensu

re co

mplia

nce w

ith

GRAP

17 st

anda

rds a

nd

secti

on 63

of M

FMA

throu

gh re

view

and

imple

menta

tion o

f Ass

et Ma

nage

ment

polic

y.

Perfo

rm Q

uarte

rly

Phys

ical a

sset

verifi

catio

n and

up

date

asse

t re

gister

on a

quar

terly

basis

to

ensu

re it

meets

the

relev

ant

acco

untin

g sta

ndar

ds.

F21

R2 30

00 00

0 3 r

epor

ts on

up

date

of as

set

regis

ter an

d Ph

ysica

l As

set

verifi

catio

n we

re m

ade

1. Q1

to Q

4 re

ports

sign

ed

by C

FO.

Asse

t GRA

P 17

comp

liant

Regis

ter

Upda

ted an

d sa

fegua

rding

of

asse

ts re

ports

.

Achie

ved

N/A

N/A

Chief

Fina

ncial

Of

ficer

KPA

4 : L

ocal

Econ

omic

Deve

lopm

ent

KPA

Weig

ht 2

0%

To pr

omote

tour

ism in

or

der t

o pos

iti on

Ngqu

shwa

mun

icipa

lity

as th

e Tou

rist

desti

natio

n by 2

017

Sour

ce an

d mon

itorin

g fun

ding f

rom

DEDE

A,

ADM,

IDC

and N

ation

al He

ritage

Cou

ncil

No. o

f bus

iness

pla

ns su

bmitte

d to

poten

tial fu

nder

s

C01

R 36

0,000

4 B

usine

ss

Plan

s wer

e su

bmitte

d

1. Q1

to Q

4 Bu

sines

s plan

. 2.

Proo

f of

subm

ission

.

4 Bus

iness

pla

ns to

be

subm

itted t

o DE

DEA,

IDC,

AD

M an

d Na

tiona

l He

ritage

co

uncil

.

Partia

lly

Achie

ved

Busin

ess w

ere

subm

itted b

ut no

t inten

ded

recip

ients

busin

ess p

lans

are b

eing

subm

itted i

n dif

feren

t do

nors

Actin

g Exe

cutiv

e Ma

nage

r: Co

mmun

ity

Servi

ces

To

prom

ote an

nual

Chris

tmas

lights

even

t in

line w

ith se

ason

open

ing

even

ts

Annu

al Ch

ristm

as

light

even

ts

C02

Annu

al /

Prev

ious

even

t co

nduc

ted.

1. Re

port

signe

d by

HOD.

Annu

al Ch

ristm

as

lights

Achie

ved

N/A

N/A

Actin

g Exe

cutiv

e Ma

nage

r: Co

mmun

ity

Servi

ces

To pr

omote

Tou

rism

withi

n NLM

area

in

orde

r to p

ositio

n the

mu

nicipa

lity as

a tou

rism

desti

natio

n in

2017

Partic

ipate

in Sp

orts

touris

m No

. of T

ouris

m sp

ort p

erfor

med

C03

To

urism

sp

orts

were

no

t pe

rform

ed

1. Re

port

signe

d. 2.

Atten

danc

e re

gister

. 3.

Finan

cial

comm

itmen

ts

Two T

ouris

m sp

orts

to be

pe

rform

ed.

Achie

ved

N/A

N/A

Actin

g Exe

cutiv

e Ma

nage

r: Co

mmun

ity

Servi

ces

202

NGQU

SHW

A LO

CAL

MUNI

CIPA

LITY

IN

STIT

UTIO

NAL

SCOR

ECAR

D 20

15-1

6 Ann

ual P

erfo

rman

ce R

epor

t as a

t 30 J

une 2

016

Stra

tegi

c Ob

jectiv

e St

rate

gy

Indi

cato

r In

dica

tor

Code

Bu

dget

Ba

selin

e Ev

iden

ce

Requ

ired

Annu

al Ta

rget

20

15/16

Achi

eved

/Not

Ac

hiev

ed

Reas

ons f

or

Varia

tion

Corre

ctive

Ac

tion

Cust

odian

To

have

tour

ism st

rateg

y in

place

To

urism

stra

tegy

C04

To

urism

str

ategy

is

not in

plac

e

1. Q3

Dra

ft str

ategy

. 2.

Coun

cil

reso

lution

. 1.

Q4Fin

al str

ategy

. 2.

Coun

cil

reso

lution

.

Annu

al tou

rism

strate

gy

Not A

chiev

ed

The s

trateg

y is

unde

r de

velop

ment

To be

av

ailab

le in

the

seco

nd qu

arter

of

2016

/17

finan

cial y

ear.

Actin

g Exe

cutiv

e Ma

nage

r: Co

mmun

ity

Servi

ces

To pr

omote

Tou

rism

withi

n NLM

area

in

orde

r to p

ositio

n the

mu

nicipa

lity as

a tou

rism

desti

natio

n in

2017

Revit

aliza

tion a

nd

comm

emor

ation

of

herita

ge si

te

No. o

f her

itage

sit

es m

aintai

ned

C05

No

Her

itage

sit

es w

ere

maint

ained

1. Q1

& Q

4 Re

ports

sign

ed

by H

OD.

Annu

al tou

rism

strate

gy

Achie

ved

N/A

N/A

Actin

g Exe

cutiv

e Ma

nage

r: Co

mmun

ity

Servi

ces

Fa

cilita

te cra

ft pro

duct

deve

lopme

nt an

d ma

rketin

g

Numb

er of

repo

rts

prep

ared

on

marke

ting

supp

ort,

gene

rated

tur

nove

r and

job

create

d

C06

R322

,780

2 qua

rterly

re

ports

ma

rketin

g su

ppor

t, ge

nera

ted

turno

ver

and j

ob

create

d we

re

prep

ared

1. Q1

to Q

4 Qu

arter

ly re

ports

sign

ed

by H

OD.

4 qua

rterly

re

ports

on

marke

ting

supp

ort,

gene

rated

tur

nove

r and

job

crea

ted

Achie

ved

N/A

N/A

Actin

g Exe

cutiv

e Ma

nage

r: Co

mmun

ity

Servi

ces

To pr

omote

Tou

rism

withi

n NLM

area

in

orde

r to p

ositio

n the

mu

nicipa

lity as

a tou

rism

desti

natio

n in

2017

To co

nven

e Tou

rism

Indab

a LE

D str

ategy

C0

7

LED

Stra

tegy i

n pla

ce

1. To

urism

se

ctor p

lan

appr

oved

. 2.

Coun

cil

reso

lution

.

Tour

ism

secto

r plan

de

velop

ed

Not A

chiev

ed

The t

ouris

m pla

n is u

nder

de

velop

ment

To be

av

ailab

le in

the

seco

nd qu

arter

of

2016

/17

finan

cial y

ear.

Actin

g Exe

cutiv

e Ma

nage

r: Co

mmun

ity

Servi

ces

To m

axim

ize ec

onom

ic gr

owth,

and

Ag

ricult

ure

deve

lopme

nt t ak

ing

place

in a

cond

ucive

en

viron

ment

withi

n Ng

qush

wa by

2017

To en

sure

partic

ipatio

n of

stake

holde

rs in

agric

ultur

al for

um lo

cal

and d

istric

t wise

.

No of

agric

ultur

al for

ums a

ttend

ed

quar

terly.

C08

R100

,000

4 dist

rict

agric

ultur

al for

ums

atten

ded

and 4

qu

arter

ly loc

al for

ums

1. Q1

to Q

4 Re

ports

sign

ed

by H

OD.

4 dist

rict

forum

s att

ende

d and

4 l

ocal

forum

s att

ende

d.

Achie

ved

N/A

N/A

Actin

g Exe

cutiv

e Ma

nage

r: Co

mmun

ity

Servi

ces

203

NGQU

SHW

A LO

CAL

MUNI

CIPA

LITY

IN

STIT

UTIO

NAL

SCOR

ECAR

D 20

15-1

6 Ann

ual P

erfo

rman

ce R

epor

t as a

t 30 J

une 2

016

Stra

tegi

c Ob

jectiv

e St

rate

gy

Indi

cato

r In

dica

tor

Code

Bu

dget

Ba

selin

e Ev

iden

ce

Requ

ired

Annu

al Ta

rget

20

15/16

Achi

eved

/Not

Ac

hiev

ed

Reas

ons f

or

Varia

tion

Corre

ctive

Ac

tion

Cust

odian

To m

axim

ise ec

onom

ic gr

owth,

and A

gricu

lture

de

velop

ment

taking

pla

ce in

a co

n duc

ive

envir

onme

nt wi

thin

Ngqu

shwa

by 20

17

Prom

ote an

d Sup

port

agric

ultur

e dev

elopm

ent

Numb

er of

agric

de

velop

ment

prog

ramm

es

identi

fied a

nd

supp

orted

C09

4 Agric

ultur

al de

velop

men

tal

prog

ramm

es w

ere

perfo

rmed

.

1. Q1

to Q

4 re

ports

sign

ed

by H

OD.

Agric

ultur

al de

velop

ment

prog

ramm

es

Achie

ved

N/A

N/A

Actin

g Exe

cutiv

e Ma

nage

r: Co

mmun

ity

Servi

ces

To

facil

itate

value

chain

an

d men

toring

of co

ops

and S

MME.

No. o

f co

ops/S

MMEs

su

ppor

ted fo

r ag

ro-p

roce

ssing

. Nu

mber

of re

ports

pr

epar

ed

C10

R 24

,800

2 coo

ps

were

su

ppor

ted

and 2

qu

arter

ly re

ports

to

be pr

epar

ed 1.

Q1 to

Q4

repo

rt sig

ned

by H

OD.

8 coo

ps to

be

supp

orted

and

4 qua

rterly

re

ports

to be

pr

epar

ed

Achie

ved

N/A

N/A

Actin

g Exe

cutiv

e Ma

nage

r: Co

mmun

ity

Servi

ces

Fa

cilita

tion o

f reg

istra

tion

of co

oper

ative

s and

tra

ining

Upda

ted

coop

erati

ves

datab

ase a

nd

traini

ng re

ports

C11

2 coo

ps

were

su

ppor

ted

and 2

qu

arter

ly re

ports

to

be pr

epar

ed 1.

Q1 to

Q4

repo

rt

2. At

tenda

nce

regis

ter.

8 coo

ps to

be

supp

orted

and

4 qua

rterly

re

ports

to be

pr

epar

ed

Achie

ved

N/A

N/A

Actin

g Exe

cutiv

e Ma

nage

r: Co

mmun

ity

Servi

ces

Re

view

of LE

D St

rateg

y Ap

point

ment

of Se

rvice

prov

ider

C12

R 31

4,480

LE

D St

rateg

y in

place

.

1. Q3

ap

point

ment

letter

. 1.Q

4 Fina

l str

ategy

2.C

ounc

il re

solut

ion

1 LED

St

rateg

y de

velop

ed

Partia

lly

Achie

ved

The s

ervic

e pr

ovide

r was

ap

point

ed la

te du

e to f

inanc

ial

cons

traint

s

To be

av

ailab

le in

the

seco

nd qu

arter

of

2016

/17

finan

cial y

ear.

Actin

g Exe

cutiv

e Ma

nage

r: Co

mmun

ity

Servi

ces

To co

ntinu

ously

redu

ce

road

accid

ent

Road

Safe

ty ca

mpaig

ns/aw

aren

ess

Colle

ction

of

outst

andin

g inf

ringe

ment

notic

es, L

aw

enfor

ceme

nt an

d aw

aren

ess

camp

aigns

.

C13

RR29

950

2 roa

d aw

aren

ess

camp

aigns

we

re

cond

ucted

1. Re

ports

sig

ned b

y HO

D.

2.Pict

ures

(d

ated)

3 roa

d aw

aren

ess

camp

aigns

to

be co

nduc

ted Ac

hieve

d N/

A N/

A Ac

ting E

xecu

tive

Mana

ger:

Comm

unity

Se

rvice

s

To en

sure

acce

ss to

lan

d pro

pertie

s for

de

velop

ment

and

Monit

oring

the p

rogr

ess o

f the

se bu

sines

s plan

s No

. of b

usine

ss

plans

subm

itted

C14

R 20

0,000

2 b

usine

ss

plans

wer

e su

bmitte

d.

1. Q1

to Q

4 pr

oof o

f su

bmiss

ion

4 Bus

iness

pla

ns to

be

subm

itted

Achie

ved

N/A

N/A

Actin

g Exe

cutiv

e Ma

nage

r:

204

NGQU

SHW

A LO

CAL

MUNI

CIPA

LITY

IN

STIT

UTIO

NAL

SCOR

ECAR

D 20

15-1

6 Ann

ual P

erfo

rman

ce R

epor

t as a

t 30 J

une 2

016

Stra

tegi

c Ob

jectiv

e St

rate

gy

Indi

cato

r In

dica

tor

Code

Bu

dget

Ba

selin

e Ev

iden

ce

Requ

ired

Annu

al Ta

rget

20

15/16

Achi

eved

/Not

Ac

hiev

ed

Reas

ons f

or

Varia

tion

Corre

ctive

Ac

tion

Cust

odian

integ

rated

huma

n se

ttleme

nt pa

ttern

by

2017

.

and p

lans

subm

itted.

Comm

unity

Se

rvice

s

To co

ntinu

ously

ma

intain

an up

dated

mu

nicipa

l ass

ets

Regis

ter m

unici

pal

prop

ertie

s No

. of p

rope

rties

regis

tered

C1

5 Op

erati

onal

2 m

unici

pal

prop

ertie

s we

re

regis

tered

on

a ne

w da

tabas

e.

1. Q2

to Q

4 pr

oof o

f re

gistra

tion

signe

d by

HOD.

2 Reg

ister

ed

munic

ipal

prop

ertie

s on

a new

da

tabas

e.

Not A

chiev

ed

Due t

o fin

ancia

l co

nstra

ints t

his

was n

ot ac

hiev e

d

To be

av

ailab

le in

the

seco

nd qu

arter

of

2016

/17

finan

cial y

ear.

Actin

g Exe

cutiv

e Ma

nage

r: Co

mmun

ity

Servi

ces

To co

ntinu

ously

ensu

re

effici

ent a

nd

econ

omica

l ma

inten

ance

of

munic

ipal b

uildin

gs by

20

17 an

d bey

ond

Maint

enan

ce of

mun

icipa

l bu

ilding

No

. of m

unici

pal

build

ings

maint

ained

C16

1 m

unici

pal

build

ing

was

maint

ained

.

1. Q1

to Q

4 Re

ports

sign

ed

by H

OD.

4 mun

icipa

l bu

ilding

s to

be

maint

ained

.

Achie

ved

N/A

N/A

Actin

g Exe

cutiv

e Ma

nage

r: Co

mmun

ity

Servi

ces

To co

ntinu

ously

ensu

re

effec

tive r

egula

tion o

f the

envir

onme

nt

Effec

tive e

nforce

ment

of by

-laws

Nu

mber

of re

ports

su

bmitte

d C1

7

1 qua

rterly

re

ports

for

enfor

ceme

nt o

f en

viron

men

tal by

-laws

1. Q1

to Q

4 re

ports

sign

ed

by H

OD.

4 Qua

rterly

re

ports

on

enfor

ceme

nt of en

viron

menta

l by

-laws

.

Achie

ved

N/A

N/A

Actin

g Exe

cutiv

e Ma

nage

r: Co

mmun

ity

Servi

ces

To co

ntinu

ously

ma

intain

an up

dated

ge

nera

l valu

ation

roll

for th

e mun

icipa

lity by

20

17 an

d bey

ond

Cond

uct s

upple

menta

ry va

luatio

n Up

dated

Gen

eral

Valua

tion R

oll

C18

An

nual

supp

lemen

tar

y va

luatio

n co

nduc

ted.

1. Supp

lemen

tary

valua

tion

signe

d. 2.C

ounc

il re

solut

ion

Supp

lemen

tary v

aluati

ons

cond

ucted

.

Achie

ved

N/A

N/A

Actin

g Exe

cutiv

e Ma

nage

r: Co

mmun

ity

Servi

ces

To en

sure

prov

ision

of

adeq

uate

and

susta

inable

huma

n se

ttleme

nts by

2017

an

d bey

ond

Deve

lopme

nt of

a nee

ds

regis

ter

Need

s reg

ister

de

velop

ed

C19

Oper

ation

al

Need

s re

gister

in

place

1. Q1

to

Q2.D

ata.

1.Q3to

Q4

Data

captu

red

To ha

ve a

need

s reg

ister

an

d sub

mitte

d to

Huma

n se

ttleme

nt.

Achie

ved

N/A

N/A

Actin

g Exe

cutiv

e Ma

nage

r: Co

mmun

ity

Servi

ces

To co

ntinu

ously

ensu

re

that p

rope

rty

deve

lopme

nt in

Ngqu

shwa

is in

line

with

build

ing la

ws an

d

Imple

menta

tion,

monit

oring

and r

eview

of

polic

ies an

d byla

ws

No. o

f sub

mitte

d an

d adju

dicate

d Bu

ilding

plan

s. Tu

rnar

ound

time

for ad

judica

tion o

f ap

plica

tions

C20

5 B

uildin

g pla

ns w

ere

adjud

icated

. 1. Q1

to Q

4 Re

port

signe

d by

HOD

and

plans

.

12 B

usine

ss

plans

ad

judica

ted.

Achie

ved

N/A

N/A

Actin

g Exe

cutiv

e Ma

nage

r: Co

mmun

ity

Servi

ces

205

NGQU

SHW

A LO

CAL

MUNI

CIPA

LITY

IN

STIT

UTIO

NAL

SCOR

ECAR

D 20

15-1

6 Ann

ual P

erfo

rman

ce R

epor

t as a

t 30 J

une 2

016

Stra

tegi

c Ob

jectiv

e St

rate

gy

Indi

cato

r In

dica

tor

Code

Bu

dget

Ba

selin

e Ev

iden

ce

Requ

ired

Annu

al Ta

rget

20

15/16

Achi

eved

/Not

Ac

hiev

ed

Reas

ons f

or

Varia

tion

Corre

ctive

Ac

tion

Cust

odian

regu

lation

s by 2

017

and b

eyon

d To

ensu

re ac

cess

to

land a

nd pr

oper

ties f

or

deve

lopme

nt an

d co

ntinu

ous o

f an

effici

ent a

nd in

tegra

ted

settle

ment

patte

rn by

20

17

Imple

menta

tion S

patia

l Pl

annin

g and

Land

Use

Ma

nage

ment

Act 1

6 of

2013

Ensu

re

comp

lianc

e with

Sp

luma 1

6 of

2013

C21

DRDA

LR

Splum

a 16

of 20

13.

1.Q3 B

y-law

po

wers

and

functi

on

1.4 P

roof

of su

bmiss

ion

Adop

ted an

d Ga

zette

d Cu

stomi

sed

Splum

a By -

laws,

Adop

ted

Splum

a Po

wers

and

functi

ons.

Achie

ved

N/A

N/A

Actin

g Exe

cutiv

e Ma

nage

r: Co

mmun

ity

Servi

ces

To en

hanc

e Mun

icipa

l re

venu

e thr

ough

bu

ilding

plan

s and

tra

ffic fin

es.

Adjud

icatin

g buil

ding

plans

. Nu

mber

of

build

ing pl

ans

appr

oved

.

C22

La

nd

identi

fied f

or

retai

l co

mplex

.

Am

ount

of re

venu

e ra

ised.

N/A

The d

etails

of

this t

arge

t are

in

the bu

dget

and t

reas

ury

depa

rtmen

t

The w

hole

targe

t is be

ing

repo

rted a

t in

Budg

et an

d Tr

easu

ry De

partm

ent

unde

r rev

enue

se

ction

.

Actin

g Exe

cutiv

e Ma

nage

r: Co

mmun

ity

Servi

ces

Issuin

g o tr

affic

fines

to tr

affic

offen

ders

C23

30

0 Tra

ffic

fines

wer

e iss

ued

1. Q1

to Q

4 re

port

signe

d by

HOD

.

400 T

raffic

fin

es to

be

issue

d

Partia

lly

Achie

ved

To m

oder

nise a

nd

beau

tify th

e ima

ge of

Pe

ddie/

Hamb

urg i

n or

der t

o attr

act

inves

tors b

y 201

7

Subm

ission

of bu

sines

s pla

ns to

Dep

t. of P

ublic

wo

rks, A

spire

Cog

ta an

d AD

M de

partm

ents.

No. o

f bus

iness

pla

ns de

velop

ed.

C24

R250

,000

1.P

roof

of su

bmiss

ion

and b

usine

ss

plan

Busin

ess

plans

su

bmitte

d to

relev

ant

depa

rtmen

ts

N/A

Cons

tructi

on of

sign

age

for bo

th tow

ns

No of

sign

age

cons

tructe

d C2

5 2 s

ignag

e co

nstru

cted

2 w

elcom

e sig

nage

to be

co

nstru

cted

Not A

chiev

ed

Due t

o fin

ancia

l co

nstra

ints t

his

was n

ot ac

hieve

d

To be

im

pleme

nted

in the

seco

nd

quar

ter of

20

16/17

fin

ancia

l yea

r

Actin

g Exe

cutiv

e Ma

nage

r: Co

mmun

ity

Servi

ces

To en

sure

effec

tive,

effici

ent a

nd ec

onom

ic ma

nage

ment

of the

en

viron

ment

by 20

17

and b

eyon

d.

Imple

menta

tion a

nd

monit

oring

Ad

opted

ma

nage

ment

plan%

im

pleme

ntatio

n of

the E

MP

C26

Mana

geme

nt pla

n not

in pla

ce.

1 Q1 D

raft

Plan

. 2.

Coun

cil

Reso

lution

. 1.Q

2 Fina

l

Adop

ted

mana

geme

nt pla

n.

Achie

ved

N/A

N/A

Actin

g Exe

cutiv

e Ma

nage

r: Co

mmun

ity

Servi

ces

206

NGQU

SHW

A LO

CAL

MUNI

CIPA

LITY

IN

STIT

UTIO

NAL

SCOR

ECAR

D 20

15-1

6 Ann

ual P

erfo

rman

ce R

epor

t as a

t 30 J

une 2

016

Stra

tegi

c Ob

jectiv

e St

rate

gy

Indi

cato

r In

dica

tor

Code

Bu

dget

Ba

selin

e Ev

iden

ce

Requ

ired

Annu

al Ta

rget

20

15/16

Achi

eved

/Not

Ac

hiev

ed

Reas

ons f

or

Varia

tion

Corre

ctive

Ac

tion

Cust

odian

Plan

and

reso

lution

Co

ntinu

ously

ensu

re

effec

tive s

afegu

ard o

f mu

nicipa

l buil

dings

and

asse

ts inc

luding

em

ploye

es an

d co

uncil

ors o

f the N

LM

throu

gh ad

equa

te se

curity

syste

ms an

d pr

oces

ses b

y 201

7 and

be

yond

To en

sure

the

deve

lopme

nt of

a Safe

ty an

d Sec

urity

Plan

Safet

y and

Se

curity

p lan

de

velop

ed

C27

Oper

ation

al Mu

nicipa

l Se

curity

pla

n not

in pla

ce

1. Q3

Ter

ms of

re

feren

ce.

1. Q4

.Qua

rterly

re

port

signe

d by

HOD

.

1 safe

ty an

d se

curity

plan

de

velop

ed

and

imple

mente

d

Partia

lly

Achie

ved

Servi

ce

prov

ider w

as

appo

inted

late

due t

o fina

ncial

co

nstra

ints.

This

plan w

ill be

avail

able

in the

third

qu

arter

of

2016

/17

finan

cial y

ear.

Actin

g Exe

cutiv

e Ma

nage

r: Co

mmun

ity

Servi

ces

To en

sure

effec

tive,

effici

ent a

nd ec

onom

ic ma

nage

ment

of the

en

viron

ment

by 20

17

and b

eyon

d

Cond

uct c

apac

ity bu

ilding

. Nu

mber

of

works

hops

co

nduc

ted

C28

R100

00

1 wor

ksho

p wa

s co

nduc

ted.

1. Q1

to Q

3 re

port.

2.

Atten

danc

e re

gister

.

Two

works

hops

to

be co

nduc

ted No

t Ach

ieved

Du

e to

finan

cial

cons

traint

s this

wa

s not

done

.

This

will b

e co

nside

red i

n the

2016

/17

finan

cial y

ear

upon

av

ailab

ility o

f fun

ds.

Actin

g Exe

cutiv

e Ma

nage

r: Co

mmun

ity

Servi

ces

Im

pleme

ntatio

n and

mo

nitor

ing of

air q

uality

ma

nage

ment

Imple

menta

tion o

f po

licy

C29

Ai

r qua

lity

polic

y not

in pla

ce.

1. Q1

to Q

4 re

port

signe

d by

HOD

.

100%

im

pleme

ntatio

n of th

e poli

cy Ac

hieve

d N/

A N/

A Ac

ting E

xecu

tive

Mana

ger:

Comm

unity

Se

rvice

s

To en

sure

safet

y of

emplo

yees

wor

king a

t the

landfi

ll site

Inter

nal A

udit p

lan

C30

Re

port

from

Inter

nal

Audit

plan

in

place

1. Q3

.Pro

of of

supp

lied

servi

ce.

1. Q4

.Rep

ort

signe

d by

HOD.

Imple

menta

tion o

f inter

nal

Audit

plan

10

0%

affec

ting

Depa

rtmen

t

Achie

ved

N/A

N/A

Actin

g Exe

cutiv

e Ma

nage

r: Co

mmun

ity

Servi

ces

To pr

otect

and

pres

erve

the

envir

onme

nt of

Ngqu

shwa

thro

ugh

effec

tive ,

effici

ent, a

nd

econ

omica

l meth

ods o

f wa

ste m

anag

emen

t by

2017

To co

nduc

t cap

acity

bu

ilding

No

. of c

apac

ity

build

ing

works

hops

co

nduc

ted

Adop

ted w

aste

by-la

w Pr

ocur

emen

t of

C31

No

was

te by

-law

and

capa

city

build

ing

works

hop

were

done

1.Q1 C

ounc

il re

solut

ion.

1. Q2

.Rep

ort

3.Atte

ndan

ce

regis

ter.

Was

te by

- law

adop

ted an

d ca

pacit

y bu

ilding

wo

rksho

p co

nduc

ted

Partia

lly

Achie

ved

The b

y law

is

in pla

ce

await

ing

adop

tion.

To be

adop

ted

in the

seco

nd

quar

ter of

20

16/17

fin

ancia

l yea

r

Actin

g Exe

cutiv

e Ma

nage

r: Co

mmun

ity

Servi

ces

207

NGQU

SHW

A LO

CAL

MUNI

CIPA

LITY

IN

STIT

UTIO

NAL

SCOR

ECAR

D 20

15-1

6 Ann

ual P

erfo

rman

ce R

epor

t as a

t 30 J

une 2

016

Stra

tegi

c Ob

jectiv

e St

rate

gy

Indi

cato

r In

dica

tor

Code

Bu

dget

Ba

selin

e Ev

iden

ce

Requ

ired

Annu

al Ta

rget

20

15/16

Achi

eved

/Not

Ac

hiev

ed

Reas

ons f

or

Varia

tion

Corre

ctive

Ac

tion

Cust

odian

appr

opria

te ma

chine

ry for

re

fuse c

ollec

tion

To pr

otect

and

pres

erve

the

envir

onme

nt of

Ngqu

shwa

thro

ugh

effec

tive ,

effici

ent, a

nd

econ

omica

l meth

ods o

f wa

ste m

anag

emen

t by

2017

Deve

lopme

nt of

Integ

rated

Inf

orma

tion W

aste

Infor

matio

n Sys

tem

Adop

ted

Integ

rated

Was

te Inf

orma

tion

Syste

m

C32

W

aste

integ

rated

inf

orma

tion

syste

m no

t in

place

1. Q1

Dra

ft and

co

uncil

re

solut

ion.

1. Q2

.Cou

ncil

reso

lution

and

final

syste

m.

Was

te int

egra

ted

infor

matio

n sy

stem

in pla

ce.

To pr

otect

and

pres

erve

the

envir

onme

nt of

Ngqu

shwa

thro

ugh

effec

tive ,

effici

ent, a

nd

econ

omica

l meth

ods o

f wa

ste m

anag

emen

t by

2017

Site

Identi

ficati

on,

appli

catio

n for

licen

sing

Cons

tructi

on of

ne

w La

ndfill

site

C33

1 l

and f

ill sit

es is

in

exist

ence

1. Q3

Adv

ert

and

appo

intme

nt let

ter.

1. Q4

feas

ibility

stu

dy.

1 lan

d fill

sites

co

nstru

ction

stu

dy

Partia

lly

Achie

ved

The s

ervic

e pr

ovide

r was

ap

point

ed la

te du

e to f

inanc

ial

cons

traint

s

The s

tudy

repo

rt to

be

avail

able

at the

end o

f qu

arter

4 of

2016

/17

finan

cial y

ear.

Actin

g Exe

cutiv

e Ma

nage

r: Co

mmun

ity

Servi

ces

Site

identi

ficati

on fo

r a

new

ceme

tery a

t Pow

er

Loca

tion

Estab

lishm

ent o

f ne

w ce

meter

y C3

4

2 ceme

teries

in

exist

ence

1. Ap

point

ment

letter

. 2.

Feas

ibility

stu

dy re

port.

1 cem

etery

cons

tructi

on

study

Partia

lly

Achie

ved

The s

ervic

e pr

ovide

r was

ap

point

ed la

te du

e to f

inanc

ial

cons

traint

s

The s

tudy

repo

rt to

be

avail

able

at the

end o

f qu

arter

4 of

2016

/17

finan

cial y

ear.

Actin

g Exe

cutiv

e Ma

nage

r: Co

mmun

ity

Servi

ces

To en

sure

effec

tive,

effici

ent a

nd

econ

omica

l ma

nage

ment

of ce

meter

ies by

2017

an

d bey

ond

Deve

lopme

nt,

Imple

menta

tion a

nd

monit

oring

bylaw

and

polic

y

Deve

lopme

nt of

ceme

tery p

olicy

an

d byla

ws

C35

Ce

meter

y an

d poli

cy

by-la

w to

be

in pla

ce.

1. Q1

.By-l

aw

Q2.C

ounc

il re

solut

ion.

Q3 D

raft p

olicy

an

d cou

ncil

reso

lution

. Q4

.Cou

ncil

reso

lution

and

appr

oval

Ceme

tery a

nd

polic

y by-l

aw

deve

loped

Not A

chiev

ed

The p

olicy

ne

eds t

o be

revie

wed a

nd

align

ed

To be

av

ailab

le in

the

third

quar

ter of

20

16/17

fin

ancia

l yea

r.

Actin

g Exe

cutiv

e Ma

nage

r: Co

mmun

ity

Servi

ces

To en

sure

effec

tive,

effici

ent, a

nd

econ

omica

l coa

stal

area

to st

imula

te loc

al

• Rev

iew, Im

pleme

ntatio

n an

d mon

itorin

g of C

oasta

l Ma

nage

ment

Plan

.

Adop

ted C

oasta

l Ma

nage

ment

Plan

.

C36

Co

astal

ma

nage

ment

plan i

n pla

ce

Q1 D

raft p

lan

Q2Fin

al pla

n an

d cou

ncil

reso

lution

.

Revie

wed

coas

tal

mana

geme

nt pla

n.

Not A

chiev

ed

The c

oasta

l ma

nage

ment

plan w

ill be

re

viewe

d and

To be

table

d in

2016

/17

finan

cial y

ear

Actin

g Exe

cutiv

e Ma

nage

r: Co

mmun

ity

Servi

ces

208

NGQU

SHW

A LO

CAL

MUNI

CIPA

LITY

IN

STIT

UTIO

NAL

SCOR

ECAR

D 20

15-1

6 Ann

ual P

erfo

rman

ce R

epor

t as a

t 30 J

une 2

016

Stra

tegi

c Ob

jectiv

e St

rate

gy

Indi

cato

r In

dica

tor

Code

Bu

dget

Ba

selin

e Ev

iden

ce

Requ

ired

Annu

al Ta

rget

20

15/16

Achi

eved

/Not

Ac

hiev

ed

Reas

ons f

or

Varia

tion

Corre

ctive

Ac

tion

Cust

odian

and i

ntern

ation

al tou

rists

inflow

and

acce

ss in

to the

Ng

qush

wa M

unici

pal

area

by 20

15 an

d be

yond

• Ope

ning o

f the f

estiv

e se

ason

tab

led in

the

coun

cil in

20

16/20

17

finan

cial y

ear.

durin

g the

third

qu

arter

.

Deplo

ymen

t of li

fe gu

ards

in al

l be

ache

s

C37

Co

ntrac

t wi

th se

rvice

pr

ovide

r is

in pla

ce

1qua

rterly

re

port.

Qu

arter

ly re

port

Achie

ved

N/A

N/A

Actin

g Exe

cutiv

e Ma

nage

r: Co

mmun

ity

Servi

ces

Apply

for B

lue F

lag B

each

sta

tus fo

r one

beac

h per

ye

ar.

Deve

lop an

d su

bmit a

pplic

ation

for

Birh

a Bea

ch.

C38

Oper

ation

al

Appr

oved

Bl

ue F

lag

Beac

h at

Hamb

urg

Busin

ess p

lan

Appr

oved

bu

sines

s plan

Achie

ved

N/A

N/A

Actin

g Exe

cutiv

e Ma

nage

r: Co

mmun

ity

Servi

ces

To en

sure

effec

tive a

nd

effici

ent L

ocal

Econ

omic

Deve

lopme

nt

• Ens

ure t

hat L

ED S

ummi

t is

conv

ened

. • R

eview

of th

e LED

St

rateg

y • D

evelo

pmen

t of P

over

ty all

eviat

ion st

rateg

y • D

evelo

pmen

t of S

MME

Stra

tegy

Revie

w an

d De

velop

ment

of LE

D str

ategie

s

C39

LE

D St

rateg

y 1.

Appo

intme

nt let

ter

2.stra

tegy a

nd

coun

cil

reso

lution

.

Appr

oved

LE

D St

rateg

y Pa

rtially

Ac

hieve

d Th

e ten

der

was a

dver

tised

bu

t due

to

finan

cial

cons

traint

s, no

aw

ard w

as

given

.

The d

raft

revie

wed L

ED

strate

gy w

ill be

av

ailab

le in

the

seco

nd qu

arter

of

2016

/17

finan

cial y

ear

Actin

g Exe

cutiv

e Ma

nage

r: Co

mmun

ity

Servi

ces

To en

sure

effec

tive,

effici

ent, a

nd

econ

omica

l coa

stal

area

to st

imula

te loc

al an

d inte

rnati

onal

touris

ts inf

low an

d ac

cess

into

the

Ngqu

shwa

Mun

icipa

l ar

ea by

2015

and

beyo

nd

Imple

menta

tion o

f Coa

stal

maint

enan

ce pl

an.

Appr

oved

ma

inten

ance

plan

. C4

0

Appr

oved

co

astal

ma

inten

anc

e plan

not in

pla

ce.

1. Dr

aft pl

an.

2. Ap

prov

ed

and c

ounc

il re

solut

ion.

Coas

tal

maint

enan

ce

plan t

o be

appr

oved

.

Not A

chiev

ed

The c

oasta

l ma

inten

ance

pla

n has

not

been

appr

oved

by

coun

cil.

It will

also b

e de

velop

ed in

20

16/17

fin

ancia

l yea

r.

Actin

g Exe

cutiv

e Ma

nage

r: Co

mmun

ity

Servi

ces

To co

ntinu

ously

pr

ovide

adeq

uate

and

effec

tive s

uppo

rt to

local

SMME

s for

inc

reas

ed lo

cal

econ

omy b

y 201

7 and

be

yond

Prov

ide bu

sines

s de

velop

ment

supp

ort

throu

gh ca

pacit

y buil

ding

and t

echn

ical s

uppo

rt to

exist

ing m

icro-

busin

ess

initia

tives

Numb

er of

micr

o-

busin

ess

initia

tives

su

ppor

ted

C41

4 b

usine

ss

initia

tives

su

ppor

ted

1. Re

ports

sig

ned b

y HO

D.

4 Bus

iness

ini

tiativ

es to

be

supp

orted

.

Achie

ved

N/A

N/A

Actin

g Exe

cutiv

e Ma

nage

r: Co

mmun

ity

Servi

ces

209

NGQU

SHW

A LO

CAL

MUNI

CIPA

LITY

IN

STIT

UTIO

NAL

SCOR

ECAR

D 20

15-1

6 Ann

ual P

erfo

rman

ce R

epor

t as a

t 30 J

une 2

016

Stra

tegi

c Ob

jectiv

e St

rate

gy

Indi

cato

r In

dica

tor

Code

Bu

dget

Ba

selin

e Ev

iden

ce

Requ

ired

Annu

al Ta

rget

20

15/16

Achi

eved

/Not

Ac

hiev

ed

Reas

ons f

or

Varia

tion

Corre

ctive

Ac

tion

Cust

odian

To co

ntinu

ously

pr

ovide

adeq

uate

and

effec

tive s

uppo

rt to

local

SMME

s for

inc

reas

ed lo

cal

econ

omy b

y 201

7 and

be

yond

To en

sure

that

local

sub-

contr

actor

s ar

e sub

-co

ntrac

ted

Prov

ide te

chnic

al an

d bu

sines

s sup

port

to loc

al su

b-co

ntrac

tors

Numb

er of

co

ntrac

tors

capa

citate

d Va

lue of

busin

ess

CIDB

grad

ing

C42

3 co

ntrac

tors

were

su

ppor

ted

on ca

pacit

y bu

ilding

.

1 Rep

ort

signe

d by

HOD.

4 Con

tracto

rs su

ppor

ted on

ca

pacit

y bu

ilding

Achie

ved

N/A

N/A

Actin

g Exe

cutiv

e Ma

nage

r: Co

mmun

ity

Servi

ces

KPA

5 : G

ood

Gove

rnan

ce an

d Pu

blic

Parti

cipat

ion

KPA

Weig

ht 2

0%

To co

ntinu

ously

ensu

re

an ef

fectiv

e and

co

mplia

nt sy

stem

of mu

nicipa

l gov

erna

nce

by 20

17 an

d bey

ond

Quar

terly

Sitti

ngs o

f MP

AC

No of

MPA

C sit

tings

G0

1 R3

018,

046

MPAC

set 4

qu

arter

ly.

1. Mi

nutes

sig

ned.

2. At

tenda

nce

regis

ter.

4 qua

rterly

MP

AC

seati

ng’s

2015

/2016

.

Partia

lly

Achie

ved

Only

three

qu

arter

ly MP

AC

meeti

ngs h

ave

mater

ialise

d, du

e to n

on

atten

danc

e by

other

mem

bers

To be

stro

ngly

monit

ored

in

2016

/17

finan

cial y

ear,

failur

e for

MP

AC to

seat

that w

ill be

es

calat

ed to

re

levan

t str

uctur

es fo

r as

sistan

ce.

Munic

ipal

Mana

ger

MPAC

mee

tings

to fo

rm

part

of an

nual

calen

dar

Coun

cil ca

lenda

r tha

t refl

ects

MPAC

pr

ogra

mmer

s.

G02

Coun

cil

calen

dar

conta

ining

MP

AC

prog

ramm

es i

s in

place

.

1. Co

uncil

Ca

lenda

r with

MP

AC

prog

ramm

es.

Coun

cil

calen

dar

cons

ists o

f MP

AC

prog

ramm

es

Achie

ved

N/A

N/A

Munic

ipal

Mana

ger

Imple

menta

tion o

f the

Prog

ramm

e of a

ction

No

of M

PAC

repo

rts to

coun

cil

G03

3 MPA

C re

ports

that

were

table

d to

coun

cil.

1.Qua

rterly

MP

AC re

port

2.cou

ncil

reso

lution

4 Qua

rterly

MP

AC

repo

rts.

Partia

lly

Achie

ved

Only

two

MPAC

repo

rts

that w

ent to

the

coun

cil du

e to

non-

seati

ng

of the

MPA

C

To be

stro

ngly

monit

ored

in

2016

/17

finan

cial y

ear,

failur

e for

MP

AC to

seat

that w

ill be

es

calat

ed to

re

levan

t str

uctur

es fo

r as

sistan

ce.

Munic

ipal

Mana

ger

210

NGQU

SHW

A LO

CAL

MUNI

CIPA

LITY

IN

STIT

UTIO

NAL

SCOR

ECAR

D 20

15-1

6 Ann

ual P

erfo

rman

ce R

epor

t as a

t 30 J

une 2

016

Stra

tegi

c Ob

jectiv

e St

rate

gy

Indi

cato

r In

dica

tor

Code

Bu

dget

Ba

selin

e Ev

iden

ce

Requ

ired

Annu

al Ta

rget

20

15/16

Achi

eved

/Not

Ac

hiev

ed

Reas

ons f

or

Varia

tion

Corre

ctive

Ac

tion

Cust

odian

Stre

am lin

e stra

tegic

plans

thr

ough

annu

al ac

tion f

or

shor

ter le

ad tim

es

Imple

menta

tion o

f co

uncil

reso

lution

s G0

4 Co

uncil

re

solut

ion

regis

ter

deve

loped

.

1. Co

uncil

re

gister

2.

Coun

cil

reso

lution

4 Qua

rterly

co

uncil

re

solut

ion

regis

ter to

co

uncil

.

Partia

lly

Achie

ved

Not a

ll 4

quar

terly

coun

cil

reso

lution

re

gister

s wer

e tak

en to

co

uncil

.

this t

arge

t will

be ta

ken t

o co

rpor

ate

servi

ces

Munic

ipal

Mana

ger

Reso

urcin

g of C

ommi

ttee

(App

ointm

ent o

f MPA

C Re

sear

cher

)

Appo

intme

nt of

MPAC

rese

arch

er.

G05

MP

AC

rese

arch

er

is no

t in

place

.

1. Ap

point

ment

letter

sign

ed by

the

Acc

ounti

ng

Offic

er.

Appo

intme

nt of

MPAC

re

sear

cher

.

Achie

ved

N/A

N/A

Munic

ipal

Mana

ger

To en

sure

effec

tive,

effici

ent, e

cono

mica

l an

d com

plian

t pub

lic

partic

ipatio

n sys

tems

by 20

17 an

d bey

ond

Imple

menta

tion o

f the

War

d Com

mitte

e Pr

ogra

mme o

f acti

on

(stre

amlin

ed P

rogr

amme

for

repo

rting o

f war

d Co

mmitte

es on

mon

thly

basis

)

% im

pleme

ntatio

n of

the w

ard

comm

ittee

Prog

ramm

e

G06

Oper

ation

al 50

%

Imple

menta

tion o

f war

d co

mmitte

es

Prog

ramm

e of

actio

n.

1.Qua

rterly

Re

ports

2.C

ounc

il re

solut

ion

Prog

ramm

e of

actio

n for

wa

rd al

l war

d co

mmitte

es

from

ward

1 to

ward

13

Achie

ved

N/A

N/A

Munic

ipal

Mana

ger

Capa

citati

on of

War

d Co

mmitte

es on

effec

tive

imple

menta

tion o

f War

d Op

erati

onal

Plan

s.

% im

pleme

ntatio

n of

the P

ublic

Pa

rticipa

tion P

lan

G07

Oper

ation

al Pu

blic

partic

ipatio

n wo

rk pla

n in

place

.

1. Qu

arter

ly re

ports

sign

ed

by M

anag

er in

the

Offic

e of

the S

peak

er.

4 Qua

rterly

re

ports

on

publi

c pa

rticipa

tion

plan

imple

menta

tion.

Achie

ved

N/A

N/A

Munic

ipal

Mana

ger

Quar

terly

War

d mee

ting

repo

rts to

Spe

aker

s Offic

e to

infor

m qu

arter

ly Sp

eake

rs re

port

to co

uncil

Quar

terly

ward

me

eting

s rep

ort to

sp

eake

rs’ of

fice.

G08

Oper

ation

al 4 q

uarte

rly

ward

me

eting

s re

port

to Sp

eake

rs’

Offic

e.

1. Cons

olida

ted

ward

mee

tings

re

ports

and

signe

d by

Mana

ger in

the

Offic

e of th

e Sp

eake

r. 2.

Atten

danc

e re

gister

s of th

e wa

rd m

eetin

gs. 4 Q

uarte

rly

War

d me

eting

s re

port.

Not A

chiev

ed

The w

ard

meeti

ngs c

ould

not s

eat a

s pla

nned

, the

ward

ch

airpe

rsons

did

n’t co

nven

e wa

rd

meeti

ngs.

The p

lan fo

r the

seati

ng of

wa

rd m

eetin

gs

will b

e im

pleme

nted

in 20

1 6/17

aft

er th

e new

co

uncil

has

been

es

tablis

hed.

Munic

ipal

Mana

ger

211

NGQU

SHW

A LO

CAL

MUNI

CIPA

LITY

IN

STIT

UTIO

NAL

SCOR

ECAR

D 20

15-1

6 Ann

ual P

erfo

rman

ce R

epor

t as a

t 30 J

une 2

016

Stra

tegi

c Ob

jectiv

e St

rate

gy

Indi

cato

r In

dica

tor

Code

Bu

dget

Ba

selin

e Ev

iden

ce

Requ

ired

Annu

al Ta

rget

20

15/16

Achi

eved

/Not

Ac

hiev

ed

Reas

ons f

or

Varia

tion

Corre

ctive

Ac

tion

Cust

odian

To co

ntinu

ously

ensu

re

effec

tive,

effici

ent a

nd

comp

liant

custo

mer

mana

geme

nt by

2017

an

d bey

ond

Effec

tive i

mplem

entat

ion

of the

petiti

ons p

olicy

. Pe

tition

s qua

rterly

re

ports

. G0

9 Op

erati

onal

Petiti

ons

polic

y is i

n ex

isten

ce.

1. Qu

arter

ly pe

tition

s re

ports

sign

ed

by th

e ch

airpe

rson.

Petiti

ons

repo

rts 4

per

quar

ter.

Not A

chiev

ed

The p

etitio

ns

repo

rts co

uld

not b

e pr

epar

ed du

e to

non -

seati

ng

of the

petiti

ons

comm

ittee.

this w

ill be

att

ende

d to

after

the n

ew

coun

cil ha

s es

tablis

hed i

ts su

b -co

mmitte

es

like t

he

petiti

ons

comm

ittee

Munic

ipal

Mana

ger

Qu

arter

ly m

eetin

gs of

the

petiti

ons c

ommi

ttee

Petiti

ons

comm

ittee

meeti

ng

G10

Oper

ation

al Pe

tition

s co

mmitte

e me

t 4

quar

terly.

1. Qu

arter

ly Pe

ti tion

s co

mmitte

e re

ports

sign

ed

by th

e ch

airpe

rson.

Atten

danc

e re

gister

.

4 qua

rterly

pe

tition

s co

mmitte

e re

ports

.

Not A

chiev

ed

To en

sure

effec

tive a

nd

comp

liant

syste

ms of

as

sura

nce o

n inte

rnal

contr

ols, s

ervic

e de

liver

y and

finan

cial

repo

rting i

n line

with

leg

islati

on by

2017

and

beyo

nd.

Subm

ission

of ad

visor

y Au

dit C

ommi

ttee r

epor

ts to

Coun

cil an

d Ma

nage

ment

Quar

terly

advis

ory

repo

rts to

coun

cil

from

Audit

co

mmitte

e

G11

Oper

ation

al Au

dit

comm

ittee

had 4

qu

arter

ly ad

visor

y re

ports

to

coun

cil.

1. Qu

arter

ly ad

visor

y re

ports

to

coun

cil

2. Co

uncil

re

solut

ion.

4 qua

rterly

Ad

visor

y re

ports

to

coun

cil fr

om

the au

dit

comm

ittee.

Achie

ved

N/A

N/A

Munic

ipal

Mana

ger

Coor

dinate

and s

ubmi

t W

oman

’s ca

ucus

quar

terly

repo

rts.

Wom

an’s

cauc

us

quar

terly

repo

rts

to co

uncil

.

G12

Oper

ation

al W

oman

’s ca

ucus

had

two

quar

terly

repo

rts to

co

uncil

1.Qua

rterly

re

ports

2.C

ounc

il re

solut

ion

4 qua

rterly

re

ports

of th

e wo

man’s

ca

ucus

to

coun

cil

Not A

chiev

ed

The w

oman

's ca

ucus

could

no

t sea

t for

many

times

, tha

t mad

e it

diffic

ul t to

pr

oduc

e re

ports

.

Wom

an’s

cauc

us re

ports

to

be pr

epar

ed

after

the n

ew

coun

cil ha

s es

tablis

hed a

ll its

stru

cture

s.

Munic

ipal

Mana

ger

Over

sight

on C

ompli

ance

wi

th re

gulat

ions/C

ircula

rs. Au

dit co

mmitte

e co

mplia

nce

repo

rts

G13

Oper

ation

al Au

dit

comm

ittee

had o

ne

1. Qu

arter

ly re

ports

2.C

ounc

il re

solut

ions.

4 Qua

rterly

au

dit

comm

ittee

comp

lianc

e

Achie

ved

N/A

N/A

Munic

ipal

Mana

ger

212

NGQU

SHW

A LO

CAL

MUNI

CIPA

LITY

IN

STIT

UTIO

NAL

SCOR

ECAR

D 20

15-1

6 Ann

ual P

erfo

rman

ce R

epor

t as a

t 30 J

une 2

016

Stra

tegi

c Ob

jectiv

e St

rate

gy

Indi

cato

r In

dica

tor

Code

Bu

dget

Ba

selin

e Ev

iden

ce

Requ

ired

Annu

al Ta

rget

20

15/16

Achi

eved

/Not

Ac

hiev

ed

Reas

ons f

or

Varia

tion

Corre

ctive

Ac

tion

Cust

odian

comp

lianc

e re

port.

re

ports

on

regu

lation

s an

d circ

ulars.

Co

ordin

ate co

-sour

cing o

f the

inter

nal a

udit f

uncti

on.

Appo

intme

nt of

the qu

alifie

d aud

it co

mpan

y.

G14

R 35

0,000

Co

-sour

cing

of the

int

erna

l au

dit

functi

on is

no

t in pl

ace.

1. Ap

point

ment

Lette

r sign

ed

by th

e Ac

coun

ting

Offic

er.

Appo

intme

nt of

the

quali

fied a

udit

comp

any.

Achie

ved

N/A

N/A

Munic

ipal

Mana

ger

To en

sure

effec

tive a

nd

comp

liant

syste

ms of

as

sura

nce o

n inte

rnal

contr

ols, s

ervic

e de

liver

y and

finan

cial

repo

rting i

n line

with

leg

islati

on by

2017

and

beyo

nd

Co-o

rdina

tion a

nd

facilit

ation

of A

G’s A

ction

Pl

ans o

n qua

rterly

basis

% im

pleme

ntatio

n of

the A

G im

prov

emen

t pla

ns

G15

R 22

9,358

Co

mmun

icatio

n acti

on

plan t

o be i

n pla

ce

Dece

mber

20

15.

1. Q1

Dra

ft Co

mmun

icatio

n Plan

. 2.

Coun

cil

Reso

lution

. 1.

Q2 A

dopte

d Pl

an

2. Co

uncil

Re

solut

ion.

1.Q3&

4 qu

arter

ly im

pleme

ntatio

n re

ports

sign

ed

by C

/Man

ager

Adop

ted

Comm

unica

tion p

lan an

d tw

o qua

rterly

im

pleme

ntatio

n rep

orts.

Partia

lly

Achie

ved

The

comm

unica

tion

plan i

s in p

lace

but n

ot ad

opted

by

coun

cil an

d ho

weve

r im

pleme

ntatio

n rep

orts

were

pr

epar

ed

altho

ugh t

he

plan i

s not

appr

oved

by

coun

cil.

The p

lan to

be

taken

to

coun

cil in

the

seco

nd qu

arter

of

2016

/2017

fin

ancia

l yea

r.

Munic

ipal

Mana

ger

Deve

lop Im

pleme

ntatio

n an

d mon

itore

d the

Risk

Ba

sed A

sses

smen

t

Numb

er of

audit

s im

pleme

nted

G16

Oper

ation

al 4 q

uarte

rly

upda

ted ris

k re

gister

and

audit

s.

1. Up

dated

risk

regis

t er an

d au

dit co

nfirm

ed

by IA

M.

Annu

al ris

k re

gister

up

dated

and

audit

s

Achie

ved

N/A

N/A

Munic

ipal

Mana

ger

To en

sure

effec

tive,

effici

ent, e

cono

mica

l an

d com

plian

t pub

lic

partic

ipatio

n sys

tems

by 20

17 an

d bey

ond

Effec

tive i

mplem

entat

ion

of the

comm

unica

ti on

actio

n plan

.

Comm

unica

tion

actio

n plan

ad

opted

by

coun

cil

G17

R 22

9,358

Co

mmun

icatio

n acti

on

plan t

o be i

n pla

ce

Dece

mber

20

15.

1. Q1

Dra

ft Co

mmun

icatio

n Plan

. 2.

Coun

cil

Reso

lution

. 1.

Q2 A

dopte

d Pl

an

2. Co

uncil

Adop

ted

Comm

unica

tion p

lan an

d tw

o qua

rterly

im

pleme

ntatio

n rep

orts.

Partia

lly

Achie

ved

The

comm

unica

tion

plan w

ill be

ad

opted

in

2016

/17

finan

cial y

ear,

howe

ver

quar

terly

imple

menta

tio

The

comm

unica

tion p

lan w

ill be

ad

opted

in th

e se

cond

quar

ter

of 20

16/17

fin

ancia

l yea

r.

Munic

ipal

Mana

ger

213

NGQU

SHW

A LO

CAL

MUNI

CIPA

LITY

IN

STIT

UTIO

NAL

SCOR

ECAR

D 20

15-1

6 Ann

ual P

erfo

rman

ce R

epor

t as a

t 30 J

une 2

016

Stra

tegi

c Ob

jectiv

e St

rate

gy

Indi

cato

r In

dica

tor

Code

Bu

dget

Ba

selin

e Ev

iden

ce

Requ

ired

Annu

al Ta

rget

20

15/16

Achi

eved

/Not

Ac

hiev

ed

Reas

ons f

or

Varia

tion

Corre

ctive

Ac

tion

Cust

odian

Reso

lution

. 1.Q

3&4

quar

terly

imple

menta

tion

repo

rts si

gned

by

C/M

anag

er

n rep

orts

were

be

ing

prep

ared

.

Stre

ngthe

n the

Loca

l Co

mmun

icator

’s Fo

rum

throu

gh qu

arter

ly sit

tings

.

No of

quar

terly

meeti

ngs

cond

ucted

.

G18

R 22

9,358

LC

F 3

quar

terly

meeti

ngs

cond

ucted

.

1. Qu

arter

ly re

ports

sign

ed

by th

e ch

airpe

rson.

2. At

tenda

nce

regis

ter.

3.Age

nda

LCF

2 qu

arter

ly me

eting

s to

be co

nduc

ted.

Not A

chiev

ed

The L

CF co

uld

not s

eat fo

r 20

15/16

due t

o no

n -att

enda

nce b

y tho

se w

ho

cons

titute

it.

It will

be

prop

erly

plann

ed fo

r 20

16/17

fin

ancia

l yea

r, ne

cess

ary

actio

ns to

re

vive i

t will

be

emba

rked o

n.

Munic

ipal

Mana

ger

Effec

tive c

ontrib

ution

to

institu

tiona

l cor

pora

te ide

ntity,

imag

e and

br

andin

g of N

LM

No of

news

letter

s pr

epar

ed an

d dis

tribute

d.

G19

Munic

ipal 4

qu

arter

ly ne

ws le

tters

were

pr

oduc

ed.

1. Qu

arter

ly ne

wslet

ters.

News

letter

s pr

oduc

ed fo

r the

3rd a

nd

4th qu

arter

of

2015

/16.

Achie

ved

N/A

N/A

Munic

ipal

Mana

ger

1. Ind

ividu

al ph

oto of

NLM

vis

ion m

ission

2.B

atho p

ele

princ

iples

. 3 r

epor

t sign

ed

by C

/Man

ager

.

Ac

hieve

d N/

A N/

A Mu

nicipa

l Ma

nage

r

To en

sure

an ef

fectiv

e an

d effic

ient IG

R fun

ction

by 20

17 an

d be

yond

Facil

itate

the

imple

menta

tion o

f sign

ed

MOU

MOU

signe

d by

munic

ipality

and

depa

rtmen

t

G20

Oper

ation

al

2 MOU

’s ha

ve be

en

signe

d be

twee

n Ng

qush

wa

and o

ther

secto

r de

partm

ent

s

Q1 (3

) MOU

’s sig

ned.

Q2 (1

) MOU

sig

ned.

Q4 (1

) MOU

sig

ned

betw

een N

LM

& AD

M

5 MOU

’s sig

ned

betw

een N

LM

and 5

secto

r de

partm

ents.

Not A

chiev

ed

The M

OU's

signin

g pr

oces

s will

be

dealt

with

in

2016

/17 as

it co

uld no

t ma

teri al

ised

due t

o othe

r pr

ogra

mmes

to be

eff

ectiv

ely

imple

mente

d in

2016

/17

finan

acial

ye

ar.

Munic

ipal

Mana

ger

214

NGQU

SHW

A LO

CAL

MUNI

CIPA

LITY

IN

STIT

UTIO

NAL

SCOR

ECAR

D 20

15-1

6 Ann

ual P

erfo

rman

ce R

epor

t as a

t 30 J

une 2

016

Stra

tegi

c Ob

jectiv

e St

rate

gy

Indi

cato

r In

dica

tor

Code

Bu

dget

Ba

selin

e Ev

iden

ce

Requ

ired

Annu

al Ta

rget

20

15/16

Achi

eved

/Not

Ac

hiev

ed

Reas

ons f

or

Varia

tion

Corre

ctive

Ac

tion

Cust

odian

Coor

dinate

plan

ning a

nd

repo

rting b

y sec

tor

depa

rtmen

ts in

line w

ith

2015

/2016

IDP

throu

gh

IGR

Monit

or se

ating

s of

IGR

meeti

ngs.

G21

Oper

ation

al

IGR

4 qu

arter

ly me

eting

s ha

ve be

en

cond

ucted

.

1. Qu

arter

ly re

ports

. 2.

Agen

da of

the

mee

ting.

3. At

tenda

nce

regis

ter.

4 qua

rterly

IG

R me

eting

s. Ac

hieve

d N/

A N/

A Mu

nicipa

l Ma

nage

r

Ad

here

nce t

o gov

ernm

ent

comm

unica

tion c

ycle

with

rega

rds t

o ann

ual o

pen

coun

cil da

y.

No of

coun

cil

open

days

G2

2 R

39,60

0 1 c

ounc

il op

en da

y ha

s bee

n ma

de.

1.Rep

ort

2.Atte

ndan

ce

regis

ter

1 Cou

ncil

open

day a

nd

proo

f ther

eof.

Achie

ved

N/A

N/A

Munic

ipal

Mana

ger

To en

sure

effec

tive

mana

geme

nt of

risk

withi

n Ngq

ushw

a Mu

nicipa

li ty in

20

15/20

16 an

d bey

ond.

Coor

dinate

the

Imple

menta

tion o

f Risk

Ac

tion P

lans o

n a

quar

terly

basis

Cond

uct R

isk

Asse

ssme

nt wo

rksho

ps

G23

Oper

ation

al

Annu

al ris

k as

sess

ment

works

hop

has b

een

cond

ucted

.

1. Mi

nutes

sig

ned.

2. At

tenda

nce

regis

ter.

One q

uarte

r ris

k as

sess

ment

works

hops

co

nduc

ted pe

r an

num.

N/A

The r

isk

asse

ssme

nt wa

s con

ducte

d an

nuall

y not

quar

terly.

going

forw

ard

the ta

rget

has

been

chan

ged

to an

nuall

y ins

tead o

f qu

arter

ly

Munic

ipal

Mana

ger

Coor

dinate

the

Imple

menta

tion o

f Ri

sk A

ction

Plan

s

G24

Oper

ation

al

4 qua

rterly

ris

k acti

on

plans

have

be

en

upda

ted.

1. Up

dated

Ri

sk ac

tion

plans

co

nfirm

ed by

IA

M.

4 qua

rterly

ris

k acti

on

plans

up

dated

.

Achie

ved

N/A

N/A

Munic

ipal

Mana

ger

W

orks

hop t

he R

isk an

d an

ti -fra

ud p

olicie

s an

nuall

y

Imple

menta

tion o

f Ri

sk an

d anti

-Fr

aud P

olicie

s

G25

Oper

ation

al

Risk

and

anti-

fraud

wo

rksho

p ha

s not

been

co

nduc

ted.

1. Q1

repo

rt,

Prog

ramm

e.

2. At

tenda

nce

regis

ter.

1. Q4

repo

rt Pr

ogra

mme.

2. At

tenda

nce

regis

ter.

2 Anti

-frau

d se

meste

r wo

rksho

ps.

Not a

chiev

ed

Due t

o fin

ancia

l co

nstra

ints t

his

was n

ot ac

hieve

d as

the pl

an w

as to

ha

ve so

meon

e fro

m ou

tside

.

To be

im

pleme

nted

in the

seco

nd

quar

ter of

20

16/17

fin

ancia

l yea

r.

Munic

ipal

Mana

ger

Ca

pacit

ate/R

esou

rce R

isk

Unit

Imple

menta

tion R

isk

mana

geme

nt S

trateg

y

Revie

w Ri

sk

Mana

geme

nt St

rateg

y

G26

Oper

ation

al

Risk

ma

nage

ment

strate

gy

has n

ot be

en

revie

wed.

1. Q3

Dra

ft re

viewe

d risk

ma

nage

ment

strate

gy

2. Co

uncil

re

solut

ion.

1. Q4

Ado

pted

Annu

al re

viewe

d risk

ma

nage

ment

strate

gy.

Partia

lly

Achie

ved

The s

trateg

y is

in pla

ce bu

t no

t app

rove

d by

coun

cil.

To be

take

n to

coun

cil in

the

seco

nd qu

arter

of

2016

/17

finan

cial y

ear.

Munic

ipal

Mana

ger

215

NGQU

SHW

A LO

CAL

MUNI

CIPA

LITY

IN

STIT

UTIO

NAL

SCOR

ECAR

D 20

15-1

6 Ann

ual P

erfo

rman

ce R

epor

t as a

t 30 J

une 2

016

Stra

tegi

c Ob

jectiv

e St

rate

gy

Indi

cato

r In

dica

tor

Code

Bu

dget

Ba

selin

e Ev

iden

ce

Requ

ired

Annu

al Ta

rget

20

15/16

Achi

eved

/Not

Ac

hiev

ed

Reas

ons f

or

Varia

tion

Corre

ctive

Ac

tion

Cust

odian

strate

gy an

d 2.c

ounc

il re

solut

ion.

To co

ntinu

ously

ensu

re

Integ

rated

De

velop

ment

plann

ing

and P

erfor

manc

e Ma

nage

ment

that h

as a

syste

m de

scrip

tion

by

2015

/2016

and b

eyon

d

Effec

tive i

mplem

entat

ion

of PM

S Fr

amew

ork

No of

pe

rform

ance

re

ports

subm

itted

to int

erna

l aud

it.

G27

Oper

ation

al

4 qu

arter

ly pe

rform

anc

e rep

orts

have

been

su

bmitte

d to

inter

nal

audit

.

1. Pr

oof o

f su

bmiss

ion.

4 qua

rterly

pe

rform

ance

re

ports

su

bmitte

d to

inter

nal a

udit.

.

Achie

ved

N/A

N/A

Munic

ipal

Mana

ger

De

velop

insti

tution

al sy

stem

desc

riptio

n alig

ned

to 20

15/16

SDB

IP.

Institu

tiona

l sy

stem

desc

riptio

n de

velop

ed an

d ap

prov

ed by

co

uncil

.

G28

Oper

ation

al

Institu

tiona

l sy

stem

desc

riptio

n is

not in

pla

ce.

1. Q3

Dra

ft sy

stem

desc

riptio

n 2.C

ounc

il re

solut

ion.

1. Q4

Ado

pted

syste

m de

scrip

tion.

2.

Coun

cil

reso

lution

.

Appr

oved

ins

titutio

nal

syste

m de

scrip

tion b

y co

uncil

that

is ali

gned

to

2015

/2016

SD

BIP.

N/A

The v

ariat

ion

has b

een

prep

ared

and

appr

oved

by

the M

M, as

thi

s sys

tem

does

n’t ha

ve

to be

take

n to

coun

cil.

It doe

sn’t h

ave

to be

su

bmitte

d to

coun

cil fo

r ap

prov

al be

caus

e the

SD

BIP

has

been

appr

oved

by

coun

cil

alrea

dy.

Munic

ipal

Mana

ger

Secti

on 46

repo

rt su

bmitte

d to c

ounc

il and

dis

tribute

d to A

G, N

T, P

T,

and C

OGTA

.

2014

/2015

Ann

ual

perfo

rman

ce

repo

rt su

bmitte

d to

coun

cil in

Au

gust

as pe

r C6

3 MFM

A an

d va

rious

au

thoriti

es.

G29

Oper

ation

al

Annu

al re

port

has

been

su

bmitte

d to

coun

cil.

1. Q1

Dra

ft A/

repo

rt an

d co

uncil

re

solut

ion.

2.Q2 F

inal

Adop

ted

A/re

port

and

coun

cil

reso

lution

2014

/2015

An

nual

repo

rt su

bmitte

d to

coun

cil 20

15.

Achie

ved

N/A

N/A

Munic

ipal

Mana

ger

Numb

er of

train

ing

works

hops

on P

MS.

1 Ann

ual P

MS

works

hop

G30

Oper

ation

al

PMS

annu

al wo

rksho

p ha

s not

been

co

nduc

ted.

1. Re

port

signe

d. 2.

Prog

ramm

e 3.

Atten

danc

e re

gister

Annu

al PM

S wo

rksho

p. Ac

hieve

d N/

A N/

A Mu

nicipa

l Ma

nage

r

To

have

insti

tution

al tur

n-ar

ound

stra

tegy i

n plac

e by

2016

/17

1insti

tution

al tur

n-ar

ound

stra

tegy

frame

work

and

G31

Oper

ation

al

Turn

-ar

ound

str

ategy

is

1. Q3

Dra

ft tur

n -ar

ound

str

ategy

Institu

tiona

l tur

n -ar

ound

str

ategy

N/A

The v

ariat

ion

has b

een

prep

ared

and

To be

im

pleme

nted

Munic

ipal

Mana

ger

216

NGQU

SHW

A LO

CAL

MUNI

CIPA

LITY

IN

STIT

UTIO

NAL

SCOR

ECAR

D 20

15-1

6 Ann

ual P

erfo

rman

ce R

epor

t as a

t 30 J

une 2

016

Stra

tegi

c Ob

jectiv

e St

rate

gy

Indi

cato

r In

dica

tor

Code

Bu

dget

Ba

selin

e Ev

iden

ce

Requ

ired

Annu

al Ta

rget

20

15/16

Achi

eved

/Not

Ac

hiev

ed

Reas

ons f

or

Varia

tion

Corre

ctive

Ac

tion

Cust

odian

draft

stra

tegy

tabled

to co

uncil

. no

t in

exist

ence

. Fr

amew

ork.

2. Co

uncil

re

solut

ion.

1. Q4

draft

tur

n - ar

ound

str

ategy

. 2.C

ounc

il re

solut

ion

frame

work

and d

raft

strate

gy

tabled

to

coun

cil.

appr

oved

by

MM,

in 20

16/17

fin

ancia

l yea

r.

Table

2014

/2015

Ann

ual

Repo

rt Pr

oces

s Plan

to

coun

cil.

Annu

al re

port

proc

ess p

lan to

be

tabled

to co

uncil

.

G32

Oper

ation

al

Annu

al re

port

proc

ess

plan n

ot in

exist

ence

.

1. Q1

Ann

ual

repo

rt pr

oces

s pla

n. 2.

Coun

cil

Reso

lution

. 1.

Q2 R

oad

show

s rep

ort

signe

d. 2.a

ttend

ance

re

gister

Appr

oved

20

14/15

An

nual

repo

rt pr

oces

s plan

Achie

ved

N/A

N/A

Munic

ipal

Mana

ger

To ha

ve ID

P/PM

S an

d Bu

dget

Proc

ess P

lan in

pla

ce

2015

/2016

ID

P/PM

S an

d Bu

dget

Proc

ess

Plan

.

G33

R 35

0,000

ID

P/PM

S an

d Bud

get

proc

ess

plan i

s in

exist

ence

.

1. Pr

oces

s pla

n. 2.

Coun

cil

reso

lution

.

Appr

oved

20

15/20

16

IDP/

PMS

and

Budg

et pr

oces

s plan

.

Achie

ved

N/A

N/A

Munic

ipal

Mana

ger

Numb

er of

IDP/

PMS

and

Budg

et Re

pres

entat

ive

Foru

m he

ld.

To ha

ve ID

P/PM

S an

d Bud

get

Repr

esen

tative

Fo

rums

G34

IDP/

PMS

and B

udge

t Re

pres

entat

ive F

orum

s ha

ve be

en

conv

ened

.

Q1, 2

, 3 an

d 4

1. Ne

wspa

per

Adve

rts

2. Re

ports

sig

ned.

3. Pr

ogra

mmes

an

d att

enda

nce

regis

ter.

4 qua

rterly

ID

P/PM

S an

d Bu

dget

Repr

esen

tativ

e For

um.

N/A

The P

urpo

se

of the

ID

P/Bu

dget

and P

MS

repr

esen

tative

for

um w

as

cove

red u

nder

Ma

yora

l Im

bizo,

so

there

was

no

need

for t

he

dupli

catio

n of

activ

ities t

o the

The v

ariat

ion

memo

has

been

sign

ed

and a

ppro

ved

by th

e Mu

nicipa

l Ma

nage

r.

Munic

ipal

Mana

ger

217

NGQU

SHW

A LO

CAL

MUNI

CIPA

LITY

IN

STIT

UTIO

NAL

SCOR

ECAR

D 20

15-1

6 Ann

ual P

erfo

rman

ce R

epor

t as a

t 30 J

une 2

016

Stra

tegi

c Ob

jectiv

e St

rate

gy

Indi

cato

r In

dica

tor

Code

Bu

dget

Ba

selin

e Ev

iden

ce

Requ

ired

Annu

al Ta

rget

20

15/16

Achi

eved

/Not

Ac

hiev

ed

Reas

ons f

or

Varia

tion

Corre

ctive

Ac

tion

Cust

odian

same

sta

keho

lders.

Numb

er of

IDP/

PMS

and

Budg

et Ro

ad S

hows

To

have

IDP/

PMS

and B

udge

t Ro

adsh

ows.

G35

IDP/

PMS

and B

udge

t ro

ad sh

ows

have

been

co

nduc

ted.

Q2 &

3 1.

News

pape

r ad

verts

. 2.

Repo

rt sig

ned.

2. Pr

ogra

mmes

an

d att

enda

nce

regis

ters.

2 IDP

/PMS

an

d Bud

get

Road

show

s

N/A

The P

urpo

se

of the

ro

adsh

ows

was c

over

ed

unde

r May

oral

Imbiz

o, so

the

re w

as no

ne

ed fo

r the

du

plica

tion o

f ac

tivitie

s to t

he

same

sta

keho

lders.

The v

ariat

ion

memo

has

been

sign

ed

and a

ppro

ved

by th

e Mu

nicipa

l Ma

nage

r.

Munic

ipal

Mana

ger

Co

ordin

ate M

ayor

al Im

bizo i

n Apr

il 201

6. To

have

May

oral

Imbiz

o. G3

6 Ma

yora

l Im

bizo h

as

not b

een

coor

dinate

d.

1. Ne

wspa

per

adve

rt.

2. Pr

ogra

mme

and

atten

danc

e re

gister

.

Mayo

ral

Imbiz

o co

ordin

ated i

n Ap

ril 20

16.

Achie

ved

N/A

N/A

Munic

ipal

Mana

ger

Dr

aft 20

16/20

17 ID

P Re

viewe

d and

Ado

pted.

2016

/2017

IDP.

G3

7

IDP

has

been

re

viewe

d an

d ad

opted

.

1. Q2

sit

uatio

nal

analy

sis

pres

entat

ion.

1. Q3

Draft

IDP.

2.

Coun

cil

Reso

lution

. 1.

Q4 A

dopte

d ID

P.

2. Co

uncil

re

solut

ion.

Appr

oved

20

16/17

IDP.

Ac

hieve

d N/

A N/

A Mu

nicipa

l Ma

nage

r

Ap

prov

ed S

ervic

e Deli

very

and B

udge

t Im

pleme

ntatio

n Plan

20

16/20

17.

2016

/2017

SDB

IP

G38

SD

BIP

has

been

de

velop

ed.

1. Q3

Dra

ft SD

BIP.

2.

Coun

cil

reso

lution

. 1.

Q4 F

inal

Appr

oved

20

16/17

SD

BIP.

Achie

ved

N/A

N/A

Munic

ipal

Mana

ger

218

NGQU

SHW

A LO

CAL

MUNI

CIPA

LITY

IN

STIT

UTIO

NAL

SCOR

ECAR

D 20

15-1

6 Ann

ual P

erfo

rman

ce R

epor

t as a

t 30 J

une 2

016

Stra

tegi

c Ob

jectiv

e St

rate

gy

Indi

cato

r In

dica

tor

Code

Bu

dget

Ba

selin

e Ev

iden

ce

Requ

ired

Annu

al Ta

rget

20

15/16

Achi

eved

/Not

Ac

hiev

ed

Reas

ons f

or

Varia

tion

Corre

ctive

Ac

tion

Cust

odian

SDBI

P.

2. Co

uncil

re

solut

ion.

De

velop

ment

of wa

rd

profi

les fo

r all 1

3 Ng

qush

wa M

unici

pal

ward

s.

Proc

ure s

ervic

e pr

ovide

r tha

t will

deve

lop w

ard

profi

les.

G39

R 35

0,000

W

ard

profi

les ar

e no

t in

exist

ence

.

1. Q3

Sp

ecific

ation

. 2.

News

pape

r ad

vert.

3.

Appo

intme

nt let

ter.

4. Dr

aft w

ard

profi

les.

5. Co

uncil

re

solut

ion.

1. Q4

Fina

l wa

rd pr

ofiles

. 2.

Coun

cil

reso

lution

.

Profi

les fo

r ea

ch of

13

Ngqu

shwa

Mu

nicipa

l wa

rds.

N/A

The v

ariat

ion

has b

een

prep

ared

and

appr

oved

by

the M

M, du

e to

finan

cial

cons

traint

s this

tar

get c

ould

not b

e im

pleme

nted.

to be

im

pleme

nted

in 20

16/17

fin

ancia

l yea

r (e

nd of

the

seco

nd

quar

ter)

Munic

ipal

Mana

ger

Co

ordin

ate re

view

of wa

rd

base

d plan

s. To

have

a dr

aft of

re

viewe

d war

d ba

sed p

lans.

G40

War

d bas

ed

plann

ing

has b

een

cond

ucted

.

1. Dr

aft w

ard

base

d plan

. 2.

Coun

cil

reso

lution

.

Draft

re

viewe

d wa

rd ba

sed

plans

table

d to

coun

cil.

N/A

The v

ariat

ion

has b

een

prep

ared

and

appr

oved

by

the M

M, as

thi

s sys

tem

does

n’t ha

ve

to be

take

n to

coun

cil.

To en

sure

effec

tive a

nd

comp

liant

mains

tream

ing of

sp

ecial

prog

ramm

es

into m

unici

pal p

lans

and s

trateg

ies by

2017

an

d bey

ond.

Revie

w of

the S

PU

Stra

tegy

% im

pleme

ntatio

n of

the S

PU ac

tion

plan

G41

R 80

9,000

SP

U str

ategy

an

d acti

on

plan h

as no

t be

en

revie

wed.

. Q3 D

raft

Revie

wed S

PU

strate

gy.

2. Co

uncil

re

solut

ion.

1. Q4

Ado

pted

strate

gy.

2.Cou

ncil

reso

lution

Adop

ted S

PU

strate

gy an

d Ac

tion p

lan.

Partia

lly

Achie

ved

The S

PU

strate

gy an

d pla

n is i

n plac

e bu

t not

adop

ted.

To be

take

n to

coun

cil in

the

seco

nd qu

arter

of

2016

/17

finan

cial y

ear.

Munic

ipal

Mana

ger

219

NGQU

SHW

A LO

CAL

MUNI

CIPA

LITY

IN

STIT

UTIO

NAL

SCOR

ECAR

D 20

15-1

6 Ann

ual P

erfo

rman

ce R

epor

t as a

t 30 J

une 2

016

Stra

tegi

c Ob

jectiv

e St

rate

gy

Indi

cato

r In

dica

tor

Code

Bu

dget

Ba

selin

e Ev

iden

ce

Requ

ired

Annu

al Ta

rget

20

15/16

Achi

eved

/Not

Ac

hiev

ed

Reas

ons f

or

Varia

tion

Corre

ctive

Ac

tion

Cust

odian

La

unch

of in

tegra

ted

prog

ramm

es in

co

mplia

nce w

ith th

e mu

nicipa

l com

munic

ation

pla

n.

Integ

rated

plan

of

SPU

with

Comm

unica

tions

pla

n.

G42

Int

egra

ted

plan n

ot in

exist

ence

.

1. Int

egra

ted

plan a

nd

signe

d.

2015

/2016

int

egra

ted

plan b

etwee

n SP

U an

d Co

mmun

icatio

ns

Achie

ved

N/A

N/A

Munic

ipal

Mana

ger

To co

ntinu

ously

pr

omote

the u

near

thing

an

d nur

turing

of ta

lent

in va

rious

spor

ting

code

s with

in NL

M by

20

17 an

d bey

ond

Imple

menta

tion a

nd

revie

w of

Spor

t De

velop

ment

Stra

tegy

actio

n plan

% im

pleme

ntatio

n of

the S

ports

de

velop

ment

actio

n plan

G43

30

% of

the

Spor

t de

velop

men

t stra

tegy

actio

n plan

ha

s bee

n im

pleme

nted a

nd

strate

gy

actio

n plan

ha

s not

been

re

viewe

d.

1. Q3

Dra

ft re

viewe

d spo

rt de

velop

ment

plan

2. Co

uncil

re

solut

ion.

1. Q4

Ap

prov

ed pl

an.

2.Cou

ncil

reso

lution

Spor

t de

velop

ment

actio

n plan

im

pleme

nted

quar

terly

Partia

lly

Achie

ved

The a

ction

pla

n is i

n plac

e bu

t not

appr

oved

by

coun

cil.

To be

take

n to

the co

uncil

in

the se

cond

qu

arter

of

2016

/17

finan

cial y

ear.

Munic

ipal

Mana

ger

To en

sure

an

integ

rated

, res

pons

ive

and e

fficien

t ICT

functi

on fo

r NLM

by

2017

and b

eyon

d.

Deve

lopme

nt of

the IC

T str

ategy

(inclu

ding

busin

ess c

ontin

uity.

Adop

tion o

f the

ICT

Stra

tegy b

y co

uncil

G44

R1 45

1 101

IC

T str

ategy

is

not in

ex

isten

ce.

1. Q1

Dra

ft ICT

str

ategy

. 1.

Adop

ted

strate

gy.

2. Co

uncil

Re

solut

ion.

1. Q3

&4

Imple

menta

tion

repo

rts si

gned

.

Appr

oval

of the

ICT

strate

gy by

co

uncil

and

imple

menta

tion q

uarte

rly

repo

rts.

Partia

lly

Achie

ved

The I

CT

strate

gy is

in

place

but n

ot ap

prov

ed by

co

uncil

, only

BT

O bu

dget

relat

ed po

licies

we

re

prior

itised

.

To be

take

n to

coun

cil in

the

seco

nd qu

arter

of

2016

/17

finan

cial y

ear.

Munic

ipal

Mana

ger

De

velop

ment

of IC

T go

vern

ance

stra

tegy.

Adop

tion o

f the

ICT

gove

rnan

ce

strate

gy by

co

uncil

G45

IC

T go

vern

ance

str

ategy

is

not in

ex

isten

ce.

1. Q3

Dra

ft ICT

go

vern

ance

fra

mewo

rk.

2. Co

uncil

Re

solut

ion an

d au

dit

comm

ittee

agen

da si

gned

.

Appr

oved

ICT

gove

rnan

ce

frame

work

by

coun

cil.

Partia

lly

Achie

ved

The I

CT

gove

rnan

ce

frame

work

is in

place

but n

ot ap

prov

ed by

co

uncil

, only

BT

O bu

dget

relat

ed po

licies

To be

take

n to

coun

cil in

the

seco

nd qu

arter

of

2016

/17

finan

cial y

ear.

Munic

ipal

Mana

ger

220

NGQU

SHW

A LO

CAL

MUNI

CIPA

LITY

IN

STIT

UTIO

NAL

SCOR

ECAR

D 20

15-1

6 Ann

ual P

erfo

rman

ce R

epor

t as a

t 30 J

une 2

016

Stra

tegi

c Ob

jectiv

e St

rate

gy

Indi

cato

r In

dica

tor

Code

Bu

dget

Ba

selin

e Ev

iden

ce

Requ

ired

Annu

al Ta

rget

20

15/16

Achi

eved

/Not

Ac

hiev

ed

Reas

ons f

or

Varia

tion

Corre

ctive

Ac

tion

Cust

odian

1. Q4

Ap

prov

ed IC

T go

vern

ance

fra

mewo

rk.

2. Co

uncil

re

solut

ion.

were

pr

ioritis

ed.

221

TABLE OF CONTENTS

INTRODUCTION / BACKGROUND ......................................................................................................................................................... 225

MEMBERS OF THE MUNICIPAL PUBLIC ACCOUNTS COMMITTEE AND ATTENDANCE OF MEETINGS ...................................... 225

MPAC MEETINGS ON THE ANNUAL REPORT ..................................................................................................................................... 226

RECOMMENDATIONS PERTAINING TO THE ANNUAL REPORT ....................................................................................................... 227

8. RECOMMENTATIONS PERTAINING TO THE OVERSIGHT REPORT ................................................................................. 227

223

INTRODUCTION / BACKGROUND MPAC has an obligation to exercise an oversight role over the executive obligations of Council, therefore a resolution was taken in Council on the 30 August 2016 for MPAC to consider the 2015/2016 Draft Annual Report.

The functions of the Oversight Committee on the Annual report are to:

Undertake a review and analysis of the Annual Report Invite, receive and consider inputs on the Annual Report Consider written comments received on the Annual Report from the members of the public Receive and consider Councils’ Audit Committee views and comments on the annual financial statements and the performance report Prepare the Oversight Report to be tabled before Council for consideration

In terms of MUNICIPAL FINANCE MANAGEMENT ACTCircular No. 63 Mayor was supposed to table the audited annual report 2015/16 and financial statements to council by December 2016, however, that was not achieved as the Regulatory Audit process was delayed and only concluded on the 23rd December 2016. The municipality’s Annual Report could thus not be tabled to council within the required period. The Audited Annual report 2015/16 should be made public in order for MPAC to get public comments. The non-compliance of the municipality for not tabling the Audited Annual Report 2015/16 to council before going to recess made it impossible for MPAC to conclude with the 2015/16 oversight report before the 31st December and will then be tabled in the Council Meeting to be held on the 26th of January 2016.

The process for the finalisation and approval of the 2015/2016 Annual Report is set out in the table below:

ACTIVITY DESCRIPTION PROVISION

Preparation of annual financial statements of the municipality and submission to the Auditor-General MUNICIPAL FINANCE MANAGEMENT ACTSection 122(1)(2)

Receipt of final audit report from Auditor-General MUNICIPAL FINANCE MANAGEMENT ACTSection 126(3)(b)

Tabling of Final Draft Annual Report in Council by Mayor MUNICIPAL FINANCE MANAGEMENT ACTSection 127(2)

Allowing for comment by community and relevant state organs

MUNICIPAL FINANCE MANAGEMENT ACTSection 127(5)(a) & (b)

Corrective actions to AG’s opinion formulated and tabled in Council MUNICIPAL FINANCE MANAGEMENT ACTSection 121(3)(g)

Submission of Annual Report and Oversight Report to AG, Provincial Treasury and MEC: Local Government MUNICIPAL FINANCE MANAGEMENT ACTSection 129(2)(b)

Communication of final Annual Report / Oversight Report (Website, hard copies and other mediums) MUNICIPAL FINANCE MANAGEMENT ACTSection 129(3)

Submit Annual Report / Oversight Report to the provincial legislature

MUNICIPAL FINANCE MANAGEMENT ACTSection 132 (1) (2)

MEMBERS OF THE MUNICIPAL PUBLIC ACCOUNTS COMMITTEE AND ATTENDANCE OF MEETINGS

COUNCILLOR NAME PORTFOLIO DATES OF MEETINGS 27 September 2016 18 October 2016 17 January 2017

Cllr. N. Mquqo Chairperson Yes Yes Yes Cllr. L. Moyeni Member Yes Yes Yes Cllr. N. Mtati Member Yes Yes Yes Cllr. R. Taylor Member Yes Yes Yes

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COUNCILLOR NAME PORTFOLIO DATES OF MEETINGS 27 September 2016 18 October 2016 17 January 2017

Cllr. N. V. Gxasheka Member Yes Yes Yes Prince N. Mhlauli Member Yes Yes Yes

This Oversight Report is prepared in line with Section 129 of the Municipal Finance Management Act read in conjunction with Municipal Finance Management Act, Circular No.63.

The following table displays the nature of the accountability framework for local government:

Council Structures/Directorate Responsible for Oversight over Accountable to

Council Approving policy and budget Executive Committee Community

Mayor or Executive Committee

Policy, budgets, outcomes Municipal Manager Council

Municipal Manager Outputs and implementation The Administration Mayor or Executive

Committee

Chief Financial Officer and Senior Managers

Outputs and implementation

Financial Management and Operational Functions Municipal Manager

The Oversight Report is the final major step in the annual reporting process of a municipality. The oversight report must consider any input from the public and council.

The Oversight Report on the Annual Report is a product of comprehensive consideration and consultation on the Annual Report and is considered to be a report of the municipal council to the community disclosing the extent to which the priority needs have been met as contained in the IDP.

MPAC MEETINGS ON THE ANNUAL REPORT

WARD DATE ACTIVITY VENUE TIME 3 06/10/2016 Tabling of Annual Report 2015/2016 Crossman Community Hall 10H00 12 07/10/2016 Tabling of Annual Report 2015/2016 Wesley Community Hall 10H00 5 10/10/2016 Tabling of Annual Report 2015/2016W Crossroads Community Hall 10H00 6 12/10/2016 Tabling of Annual Report 2015/2016 Feni Community Hall 10H00 7 14/10/2016 Tabling of Annual Report 2015/2016 Rura Community Hall 10H00 10 17/10/2016 Tabling of Annual Report 2015/2016 Lower Gwalana Community Hall 10H00 9 20/10/2016 Tabling of Annual Report 2015/2016 Nobumba Community Hall 10H00 8 21/10/2016 Tabling of Annual Report 2015/2016 Peddie Extension Community Hall 10H00 2 08/11/2016 Tabling of Annual Report 2015/2016 Qugqwala Community Hall 10H00 1 09/11/2016 Tabling of Annual Report 2015/2016 Ngqwele Community Hall 10H00 4 10/11/2016 Tabling of Annual Report 2015/2016 Phole Community Hall 10H00 11 11/11/2016 Tabling of Annual Report 2015/2016 Mgababa Community Hall 10H00

Subsequent to the conclusion of the Annual Roadshows (as per table above), The Municipal Public Accounts Committee convened on the 17th January 2017, to consider the public inputs received on the Draft Annual Report 2015/16

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RECOMMENDATIONS PERTAINING TO THE ANNUAL REPORT

That Council approves 2015/2016 Annual Report of the Ngqushwa Local Municipality with no reservations and representations thereof in terms of section 129 of the Municipal Finance Management Act.

That Council approves the 2015/2016 Annual Report without reservations; in terms of section 129 (1) (a) of the Municipal Finance Management Act.

That management follows Circular 63 in terms of reporting timelines of the Annual Report.

8. RECOMMENTATIONS PERTAINING TO THE OVERSIGHT REPORT

Accordingly the Municipal Public Accounts Committee (MPAC) of Ngqushwa Local Municipality recommends to Council that:

That Council adopts 2015/2016 Oversight Report of the Ngqushwa Local Municipality and representations thereof in terms of section 129 of the Municipal Finance Management Act;

The MPAC Oversight Report be made public in accordance with the prescripts of the Municipal Finance Management Act.

Cllr. N. Mquqo Chairperson

Signature:……..……………………………. Date: ………………………

………………………………………..……………………………………………………………………………………………………………………. ……………………………………………………

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NGQUSHWA MUNICIPALITY 2015/16 AUDIT COMMITTEE REPORT TO COUNCIL

Report of the Audit Committee We present our report for the financial year ended 30 June 2016. ROLE AND RESPONSIBILITY OF THE AUDIT COMMITTEE The function of the Audit Committee (hereinafter referred to as the Committee) is primarily to assist the Ngqushwa Municipality (hereinafter referred to as the Council) in discharging its duties relating to the safeguarding of assets, the operation of adequate systems, control processes and the preparation of financial reports and statements. The Committee operates in terms of section 166 of the Municipal Finance Management Act (MFMA), Act No. 56 of 2003 and has endeavoured to comply with its responsibilities arising from those requirements. The Committee has performed its duties according to its terms of reference in the form of an approved Audit Committee Charter which stipulates amongst other issues the primary purpose of the Committee, which is:

To monitor the integrity of the Council’s financial statements and announcements relating to its financial performance, reviewing significant reporting financial reporting judgements; To review the effectiveness of the Council’s internal controls and risk management systems; To monitor the effectiveness of the internal audit function and review its material findings; and, To oversee the relationship with the internal and external auditors, including agreeing to the latter’s audit fees and terms of engagement, monitoring their independence, objectivity and effectiveness.

The Committee has no executive function and its primary objective is to review and challenge rather than assume responsibility for any matters within its remit. Audit Committee Members and Attendance The audit committee consists of the members listed hereunder and should meet at least 4 times per annum as per its approved terms of reference. In terms of the Audit Committee Charter, the committee should consist of a minimum of 3 members. The current audit committee held 5 meetings during the year under review (including the review of financial statements): Name of Member Number of Meetings Attended WA Plaatjes 5 G Bana 5 N Hlongwane 5 The committee meetings are also attended by the Mayor, the Chair of MPAC, the Municipal Manager, Chief Financial Officer, National Treasury, Internal and External Auditors. The Effectiveness of Internal Control The system of internal control was not entirely effective for the period under review. During the period under review, several deficiencies in the system of internal control and/or deviations were identified by the audit committee and the internal auditors. Information and Communications Technology (ICT) National Treasury mSCOA Circular No. 2 requires the Municipality to conduct ICT infrastructure, network and archiving policy and procedures. The ICT infrastructure was conducted in May 2016 to implement the requirements as outlined in the circular. The assessment was done in the following ICT infrastructure:

Servers Bandwidth and internet Network Security Microsoft products, and Server room environment and any other ICT infrastructure.

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The Audit Committee awaits a holistic implementation plan, rather than the ad hoc pattern of implementation. Risk Management In August 2015 the risk management office facilitated a risk assessment and assisted various departments within the municipality to updating their risk registers and developing an action plan to address risks. The action plans is derived from the risk registers and is constituted mainly by suggested control improvements to address risks that may negatively affect the institution’s ability to achieve its objectives. Performance Management Performance related matters remain a concern as the SDBIP targets were not Specific, Measurable, Attainable, Reliable, and Time Specific (SMART); this affected the reliability and validity of findings. The Performance Management (PMS) Framework was reviewed by the Committee. Challenges relating to timeframes are improving, but this should be closely monitored. The cascading of PMS remains a challenge in all local municipalities. Compliance with the MFMA, the Annual Division of Revenue Act and any other applicable legislation The Audit Committee reports that it is not aware of any material occurrence or omission resulting or potentially resulting in non-compliance with the Municipal Finance Management Act; the Annual Division of Revenue Act and any other key legislation applicable to the Local Municipality. Evaluation of the Financial Statements The Audit Committee has:

Reviewed and discussed the unaudited annual financial statements to be included in the annual report; Reviewed changes in accounting policies and practices; Reviewed the municipality’s compliance with legal and regulatory provisions; Reviewed the information on pre-determined objectives to be included in the annual report, and Reviewed significant adjustments used in the compilation of the annual financial statements.

Internal Audit The Audit Committee is satisfied that the internal audit function is operating effectively and that it has addressed the risks pertinent to the municipality during the year under review. Auditor General South Africa The Audit Committee have met with the Auditor General during the year to ensure that there are no outstanding issues relating to the Municipality. ____________________________ Dr. W Plaatjes Chairperson of the Audit Committee Date: 12 January 2017

_________________________________________________________________________Dr. . . . . W WWWWWWWWWWWWWWWWW Plaatjes Ch i f th A dit C it

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