Dawid Kruiper Municipality Mid-Year Budget & Performance...

Dawid Kruiper Municipality (NC087)_Section 72 Report_Mid-Year Assessment_2016/2017

Dawid Kruiper Municipality

Mid-Year Budget & Performance Assessment for the period 1 July

2016 to 31 December 2016

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Table of Contents

Table of Contents ....................................................... …………………………………………………2

Glossary…………………. ............................................................................................................... 3

Section 1 – Introduction ................................................................................................................. 4

Section 2 – Report of the Executive Mayor .................................................................................... 6

Section 3 – Financial Performance ................................................................................................ 8

Section 4 – Service Delivery Performance ............................................................................ …. 26

Section 5 – Progress on resolving problems identified in the 2015/16 Annual Report ................. 57

Section 6 – Recommendations .................................................................................................... 57

Section 7 – Municipal Manager‟s quality certification ................................................................... 59

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Glossary

Adjustments budget – Prescribed in section 28 of the MFMA. The formal means by which a municipality may revise its annual budget during the year.

Allocations – Money received from Provincial or National Government or other municipalities.

Capital expenditure - Spending on assets such as land, buildings and machinery. Any capital expenditure must be reflected as an asset on the Municipality‟s balance sheet.

Cash flow statement – A statement showing when actual cash will be received and spent by the Municipality. Cash payments do not always coincide with budgeted expenditure timings. For example, when an invoice is received by the Municipality it is shown as expenditure in the month it is received, even though it may not be paid in the same period.

DORA – Division of Revenue Act. Annual legislation that shows the total allocations made by national to provincial and local government.

Equitable share – A general grant paid to municipalities. It is predominantly targeted to help with free basic services.

MBRR – Local Government: Municipal Finance Management Act (56/2003): Municipal budget and reporting regulations.

MFMA – Local Government: Municipal Finance Management Act (56/2003). The principle piece of legislation relating to municipal financial management. Sometimes referred to as the Act.

MTREF – Medium Term Revenue and Expenditure Framework. A medium term financial plan, usually 3 years, based on a fixed first year and indicative further two years budget allocations. Also includes details of the previous and current years‟ financial position.

Operating expenditure – Spending on the day to day expenses of the Municipality such as salaries and wages.

Rates – Local Government tax based on the assessed value of a property. To determine the rates payable, the assessed rateable value is multiplied by the rate in the rand.

SDBIP – Service Delivery and Budget Implementation Plan. A detailed plan comprising quarterly performance targets and monthly budget estimates.

Vote – One of the main segments into which a budget is divided. In Dawid Kruiper Municipality this means at directorate level.

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Section 1 – Introduction

1.1 Purpose

To inform Council of progress made in the implementation of the budget and the performance outcomes in respect of the first six months of the 2016/17 financial year, and to recommend whether an adjustments budget is necessary.

1.2 Legal requirements

In terms of Section 72 of the Local Government: Municipal Finance Management Act, 2003 (Act 56 of 2003):

(1) The accounting officer of a municipality must by 25 January of each year -

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

(i) the monthly statements referred to in section 71 for the first half of the financial year;

(ii) the municipality‟s service delivery performance during the first half of the financial year, and the service delivery targets and performance indicators set in the service delivery and budget implementation plan;

(iii) the past year‟s annual report, and progress on resolving problems identified in the annual report; and

(iv) the performance of every municipal entity under the sole or shared control of the municipality, taking into account reports in terms of section 88 from any such entities; and

(b) submit a report on such assessment to –

(i) the mayor of the municipality

(ii) the National Treasury; and

(iii) the relevant Provincial Treasury.

(2) The statement referred to in section 71(1) for the sixth month of a financial year may be incorporated into the report referred to in subsection (1)(b) of this section.

(3) The accounting officer must, as part of the review -

(a) make recommendations as to whether an adjustments budget is necessary; and

(b) recommend revised projections for revenue and expenditure to the extent that this may be necessary.

Thereafter, the mayor must, in terms of Section 54(1):

(a) Consider the report;

(b) Check whether the municipality's approved budget is implemented in accordance with the service delivery and budget implementation plan;

(c) Consider and, if necessary, make any revisions to the service delivery and budget implementation plan, provided that revisions to the service delivery targets and performance indicators in the plan may only be made with the approval of the council following approval of an adjustments budget;

(d) Issue any appropriate instructions to the accounting officer to ensure-

(i) That the budget is implemented in accordance with the service delivery and budget implementation plan; and

(ii) That spending of funds and revenue collection proceed in accordance with the budget;

(e) Identify any financial problems facing the municipality, including any emerging or impending financial problems; and

(f) Submit the report to the council by 31 January of each year.

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1.3 Contents of this report

With the concurrence of the Chief Financial Officer, it was agreed that:

(a) The Budget & Treasury Office prepared a report complying with the financial requirements of MFMA section 71. The mid-year budget statement for December 2016 was submitted to all legislated parties by the 10th working day of January 2017.

(b) The Performance Management Section in the Office of the Municipal Manager has reviewed the SDBIP in line with recommendations made by the Auditor General during the 2015/16 external audit process to determine whether amendments are required to the current SDBIP.

(c) The Accounting Officer (Municipal Manager) and the Chief Financial Officer (Director Finance) have reviewed the Annual Report and issues that were raised in the Audit Report and final management letter of the Auditor-General and have included these in a section in this assessment.

(d) The outcomes of the above mentioned reports and reviews form the basis of the mid-year budget and performance assessment.

(e) The Section 72 Report will be submitted to the Mayor on the 25th of January 2017, where after it will be tabled to Council on the 31st of January 2017.

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Section 2 – Report of the Executive Mayor

2.1 High level assessment of MFMA S71 financial reports for the past 6 months

2.1.1 Against annual budget (original approved and latest adjustments)

Revenue by Source

The year-to-date actual reflects an achievement of 55% of the year-to-date budget and a positive variance of 9%. The budgeted amount for property rates are R 42.1 million and the actual figure billed is R 48.6 million. This is due to annual property rates levies that are only payable during October of each year. It should be noted that the amount for service charges in Table C4 are the actual amount billed / levied and not the amount that is received. The amount that is received is less which attributed to our cash flow problems.

Quill is still in the process of combining and importing transactions captured on SAMRAS (Mier Municipality‟s financial system) to BIQ. Once all the transactions and ledgers are imported and reconciled, the Section 71 reports will be compared and resubmitted to correct differences. The effective date of the merger was confirmed as the 6th of August 2016. Budget variances will be discussed in detail under Section 3.1.4.

Operating expenditure by type

For the year-to-date all expenditure items that show a positive variance indicates an overspending on that specific expenditure item and where they show negative variances it indicates a saving on that specific expenditure item. A huge concern is the overspending of employee related costs, as it will result in unauthorised expenditure, based on the current trends.

Quill is still in the process of combining and importing transactions captured on SAMRAS (Mier Municipality‟s financial system) to BIQ. Once all the transactions and ledgers are imported and reconciled, the Section 71 reports will be compared and resubmitted to correct differences. The effective date of the merger was confirmed as the 6th of August 2016. Budget variances will be discussed in detail under Section 3.1.4.

Capital expenditure

It is noted that year-to-date capital expenditure shows a 50% negative variance of the year-to-date budget. All the CRR funding is budgeted under the Municipal Manager‟s vote. Before capital expenditure is incurred, the Head of the Department writes a memo requesting funding for the purchase of a capital item. The memo should be supported with at least three quotations. The Municipal Manager will consider the request and on approval thereof the virement of the funds from the Municipal Manager‟s vote to the other vote will follow, in terms of the approved Virement Policy. Thereafter the normal SCM processes will follow. No unauthorised capital expenditure is allowed. Government Grants for both operational and capital projects are being invested. As at 31 December 2016 the unspent grants were R 26.8 million and investments amounted to R 27.6 million. The total investments include an investment of R 3.4 million that is being separately invested for a session on DBSA loans. The amount excludes investments to the value of R 2.8 million that is invested in the name of Mier Municipality at Standard Bank. We are in the process of completing all the relevant bank mandates to access and reinvest the funds in the name of Dawid Kruiper Municipality. The total grant funds that are invested, excluding the R 3.4 million, is R 27 million. Therefore all unspent grants are cash backed as at 31 December 2016. This is an enormous improvement when compared to quarter 2 of 2015/2016 when R 11.8 million was not cash backed.

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Cash Flow

The municipality started the year with total cash/cash equivalents of 15.7 million (Cashbook balance of negative R 5.7 million and cash and cash equivalents of R 21.4 million).

Cash and cash equivalents amounted to a positive balance of R 20.9 million at the end of quarter 2.

Conditional grants received are invested. It should be noted that these funds are only available to pay capital projects which is funded by MIG, INEP, EPWP, etc. in terms of an approved business plan. These funds may not be used for operational expenditure and therefore it is critical that the Municipality levy and collect sufficient funds to pay for operational expenditure.

Non-materialisation of revenue and over expenditure on employee related costs, result in cash flow problems and non-payment of creditors, which are in contravention with Section 65 (2)(e) of the MFMA.

2.2 High level SDBIP overall performance

The Auditor-General raised an unqualified audit report on predetermined objectives and performance management for 2015/16. The top level performance indicators will be reviewed during February 2017 as part of the adjustment budget process and tabled to Council for approval thereof.

The Mid-year assessment is based on the reviewed top level service delivery budget implementation plans for the period 1 July 2016 to 31 December 2016.

In line with recommendations made by Provincial Treasury, municipal key performance indicators making up the top level of the SDBIP need to be reviewed to ensure they support the IDP and the Budget . In addition they need to meet the requirements as set out by National Treasury.

The performance of Directorates and the assessment of the service delivery performance during the period under review are included together with the implementation of the Capital Program.

2.3 Potential impact of the national and provincial adjustments budget

//Khara Hais Municipality and Mier Municipality applied for approval of roll-over funding. Roll-over funding was approved for //Khara Hais Municipality, but not for Mier Municipality. An amount of R 101 thousand for unspent EPWP was withheld. The above mentioned amount was deducted from December 2016‟s equitable share allocation of Dawid Kruiper Municipality.

2.4 Conclusion

The mid-year budget and performance assessment indicates that:

(a) an adjustments budget for 2016/17 will be required, and this must be approved by Council by no later than 28 February 2017;

(b) the revised SDBIP, which forms the basis for the mid-year performance assessments must include adjustments necessitated by a review of the predetermined objectives as highlighted by the Auditor General and adjustments as a result of the adjustments budget, must be approved by Council;

(c) the revised IDP, taking into account revisions as a result of the adjustments budget and revised SDBIP, must be approved by Council.

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Section 3 – Financial Performance

3.1 Monthly budget statements The tables included in section 3 are from the Section 71 December 2016 in-year monthly budget statements which were used to compile the Section 72 budget statement. The full year forecasts have been revised as part of the mid-year assessment. The revised forecasts will inform the adjustments that are tabled for Council approval.

3.1.1 Table C1: S71 Monthly Budget Statement Summary

NC087 Dawid Kruiper - Table C1 Monthly Budget Statement Summary - Mid-Year Assessment

2015/16

Audited

Outcome

Original

Budget

Adjusted

BudgetQuarter 1 Quarter 2

YearTD

actual

YearTD

budget

YTD

variance

YTD

variance

R thousands %

Financial Performance

Property rates 77 873 84 201 84 201 30 286 18 360 48 646 42 101 6 545 16%

Serv ice charges 242 448 368 044 368 044 91 093 98 032 189 125 184 022 5 103 3%

Inv estment rev enue 4 176 600 600 347 488 835 300 535 178%

Transfers recognised - operational 69 715 73 477 73 477 27 682 26 101 53 783 36 738 17 045 46%

Other ow n rev enue 133 559 49 433 49 433 8 969 12 896 21 865 24 717 (2 851) -12%

Total Revenue (excluding capital transfers

and contributions)

527 771 575 755 575 755 158 378 155 877 314 254 287 877 26 377 9%

Employ ee costs 207 690 219 953 219 953 53 740 68 141 121 881 109 977 11 905 11%

Remuneration of Councillors 7 962 8 621 8 621 2 173 2 344 4 518 4 310 207 5%

Depreciation & asset impairment 82 252 82 680 82 680 20 670 20 670 41 340 41 340 (0) 0%

Finance charges 14 658 14 978 14 978 2 202 4 554 6 756 7 489 (733) -10%

Materials and bulk purchases 183 019 206 825 206 825 40 025 39 471 79 497 94 444 (14 947) -16%

Transfers and grants 785 110 110 63 19 82 55 27 49%

Other ex penditure 91 356 79 346 79 346 15 397 21 686 37 083 48 642 (11 559) -44%

Total Expenditure 587 722 612 513 612 513 134 271 156 886 291 157 306 256 (15 100) -5%

Surplus/(Deficit) (59 951) (36 758) (36 758) 24 107 (1 009) 23 098 (18 379) 41 477 -226%

Transfers recognised - capital 25 339 31 819 31 819 3 020 8 605 11 624 15 910 (4 286) -27%

Contributions & Contributed assets – – – – – – – –

Surplus/(Deficit) after capital transfers &

contributions

(34 612) (4 939) (4 939) 27 126 7 595 34 722 (2 469) 37 191 -1506%

Share of surplus/ (deficit) of associate – – – – – – – –

Surplus/ (Deficit) for the year (34 612) (4 939) (4 939) 27 126 7 595 34 722 (2 469) 37 191 -1506%

Capital expenditure & funds sources

Capital expenditure 40 136 69 818 69 818 8 870 8 567 17 437 34 909 (17 472) -50%

Capital transfers recognised 25 339 31 819 31 819 6 827 7 830 14 657 15 910 (1 253) -8%

Public contributions & donations – – – – – – – –

Borrow ing – – – – – – – –

Internally generated funds 14 797 37 998 37 998 2 044 736 2 780 18 999 (16 219) -85%

Total sources of capital funds 40 136 69 818 69 818 8 870 8 567 17 437 34 909 (17 472) -50%

Financial position

Total current assets 103 515 84 392 84 392 114 538 133 337 133 337

Total non current assets 1 773 156 1 777 548 1 777 548 1 760 501 1 748 393 1 748 393

Total current liabilities 132 687 92 123 92 123 103 123 106 857 106 857

Total non current liabilities 228 211 196 138 196 138 189 523 184 885 184 885

Community wealth/Equity 1 515 773 1 573 679 1 573 679 1 582 393 1 589 987 1 589 987

Cash flows

Net cash from (used) operating 23 252 67 106 67 106 17 528 2 790 20 317 33 553 (13 235) -39%

Net cash from (used) inv esting (5 879) (51 611) (51 611) (5 627) (3 527) (9 154) (25 806) 16 652 -65%

Net cash from (used) financing 3 485 (9 383) (9 383) (1 777) (4 125) (5 903) (4 691) (1 211)

Cash/cash equivalents at the month/year end 15 667 11 112 11 112 25 790 (4 862) 20 927 5 556 15 372 277%

Debtors & creditors analysis 0-30 Days 31-60 Days 61-90 Days 91-120 Days 121-150 Dys 151-180 Dys 181 Dys-1 Yr Over 1Yr Total

Debtors Age Analysis

Total By Income Source 35 622 6 388 3 467 3 831 2 922 4 338 5 393 34 886 96 848

Creditors Age Analysis

Total Creditors 3 935 2 734 2 156 682 – – – 3 385 12 892

Description

Budget Year 2016/17

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3.1.2 Table C2: Monthly Budget Statement - Financial Performance (standard classification)

This table reflects the operating budget in the standard classifications which are the Government Finance Statistics Functions and Sub-functions. These are used by National Treasury to assist the compilation of national and international accounts for comparison purposes, regardless of the unique organisational structures used by the different institutions.

The main functions are Governance and administration; Community and public safety; Economic and environmental services; and Trading services.

It is for this reason that Financial Performance is reported in standard classification, Table C2, and by municipal vote, Table C3.

2015/16 Budget Year 2016/17

Audited

Outcome

Original

Budget

Adjusted


YearTD

actual

YearTD

budget

YTD

variance

YTD

variance

R thousands %

Revenue - Standard

Governance and administration 180 243 201 093 201 093 65 490 59 744 125 234 100 546 24 687 24.6%

Ex ecutiv e and council 1 624 150 150 1 – 1 75 (74) -99.3%

Budget and treasury office 172 919 179 868 179 868 61 796 53 466 115 262 89 934 25 328 28.2%

Corporate serv ices 5 699 21 075 21 075 3 693 6 278 9 971 10 538 (567) -5.4%

Community and public safety 25 403 23 324 23 324 3 056 4 887 7 943 11 662 (3 719) -31.9%

Community and social serv ices 4 802 2 384 2 384 424 1 136 1 560 1 192 368 30.9%

Sport and recreation 6 414 12 587 12 587 639 1 940 2 579 6 294 (3 715) -59.0%

Public safety 13 095 6 236 6 236 1 994 1 810 3 804 3 118 686 22.0%

Housing 1 092 650 650 – – – 325 (325) -100.0%

Health – 1 467 1 467 – – – 734 (734) -100.0%

Economic and environmental services 7 501 14 538 14 538 1 657 1 552 3 209 7 269 (4 060) -55.9%

Planning and dev elopment 7 253 5 828 5 828 1 620 1 514 3 134 2 914 220 7.6%

Road transport 248 8 710 8 710 37 37 75 4 355 (4 280) -98.3%

Trading services 339 963 368 619 368 619 91 194 98 299 189 492 184 310 5 183 2.8%

Electricity 244 222 268 214 268 214 66 024 71 069 137 093 134 107 2 986 2.2%

Water 47 022 51 238 51 238 11 569 13 935 25 504 25 619 (115) -0.4%

Waste w ater management 27 288 27 024 27 024 7 748 7 627 15 374 13 512 1 862 13.8%

Waste management 21 431 22 144 22 144 5 853 5 669 11 522 11 072 450 4.1%

Other 0 1 1 0 – 0 0 (0) -58.3%

Total Revenue - Standard 553 110 607 574 607 574 161 397 164 481 325 878 303 787 22 091 7.3%

Expenditure - Standard

Governance and administration 146 379 112 709 112 709 30 505 39 549 70 053 56 355 13 699 24.3%

Ex ecutiv e and council 39 728 32 275 32 275 5 443 6 373 11 817 16 138 (4 321) -26.8%

Budget and treasury office 57 037 30 891 30 891 8 053 13 391 21 444 15 446 5 999 38.8%

Corporate serv ices 49 614 49 543 49 543 17 008 19 784 36 793 24 771 12 021 48.5%

Community and public safety 68 014 72 866 72 866 16 019 20 003 36 022 36 433 (411) -1.1%

Community and social serv ices 8 601 9 425 9 425 2 174 2 784 4 958 4 713 245 5.2%

Sport and recreation 29 402 32 902 32 902 6 725 8 817 15 543 16 451 (908) -5.5%

Public safety 23 295 25 958 25 958 6 271 7 531 13 802 12 979 823 6.3%

Housing 3 297 3 409 3 409 684 681 1 365 1 704 (339) -19.9%

Health 3 420 1 172 1 172 165 190 354 586 (231) -39.5%

Economic and environmental services 51 540 68 567 68 567 13 688 17 170 30 858 34 283 (3 426) -10.0%

Planning and dev elopment 12 599 17 458 17 458 4 125 6 121 10 246 8 729 1 517 17.4%

Road transport 38 941 51 109 51 109 9 563 11 049 20 611 25 554 (4 943) -19.3%

Trading services 320 366 356 552 356 552 73 638 79 628 153 266 178 276 (25 011) -14.0%

Electricity 208 318 231 428 231 428 51 981 53 630 105 611 115 714 (10 103) -8.7%

Water 54 778 57 234 57 234 11 127 13 300 24 427 28 617 (4 190) -14.6%

Waste w ater management 33 355 37 976 37 976 5 976 7 174 13 150 18 988 (5 838) -30.7%

Waste management 23 916 29 913 29 913 4 553 5 524 10 077 14 957 (4 879) -32.6%

Other 1 423 1 819 1 819 421 537 958 909 48 5.3%

Total Expenditure - Standard 587 722 612 513 612 513 134 271 156 886 291 157 306 256 (15 100) -4.9%

Surplus/ (Deficit) for the year (34 612) (4 939) (4 939) 27 126 7 595 34 722 (2 469) 37 191 -1506.1%

Description

NC087 Dawid Kruiper - Table C2 Monthly Budget Statement - Financial Performance (standard classification) - Mid-Year Assessment

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3.1.3 Table C3: Monthly Budget Statement - Financial Performance (revenue and expenditure by municipal vote)

The operating expenditure budget is approved by Council at the municipal vote level.

The municipal votes reflect the organisational structure of the municipality which is made up of the following directorates: Municipal Manager; Corporate Services; Budget & Treasury Office; Community Services, Electro Mechanical Services, Civil Engineering Services and Development and Planning Services.

Unauthorised expenditure by year end would occur either for the municipality as a whole if the adjusted budget for „Total Expenditure by Vote‟ or if any of the individual budgets for any specific vote(s) were overspent.

Certain votes are operating with deficits which cannot be afforded by the municipality. Council should ensure that functions like the Eiland Holiday Resort and other essential services make a profit or break even as per Circular 74. From July 2015 invoices are being sent to Provincial Departments for services rendered on behalf of them, also known as unfunded mandates. Environmental Health was transferred to ZFM District Municipality on the 1st of July 2016.

The fact that there is a budgeted amount for expenditure does not necessarily mean that there are funds available to pay for the expenditure incurred. Therefore, the incurrence of expenditure should be considered carefully.

Virements are allowed in terms of the approved Virement Policy. This is an internal control measure to prevent unauthorised expenditure. The unauthorised expenditure will be disclosed in the 2016/2017 annual financial statements.

Vote Description 2015/16

Audited

Outcome

Original

Budget

Adjusted


YearTD

actual

YearTD

budget

YTD

variance

YTD

variance

Full Year

Forecast

R thousands %

Revenue by Vote

Vote 1 - MUNICIPAL MANAGER 1 890 150 150 1 – 1 75 (74) -99.3% 150

Vote 2 - CORPORATE SERVICES 5 643 21 065 21 065 3 693 6 278 9 971 10 533 (562) -5.3% 21 065

Vote 3 - FINANCIAL SERVICES 172 919 179 868 179 868 61 796 53 466 115 262 89 934 25 328 28.2% 179 868

Vote 4 - COMMUNITY SERVICES 40 409 33 363 33 363 8 317 9 469 17 786 16 681 1 105 6.6% 33 363

Vote 6 - ELECTRO MECHANICAL SERVICES 244 278 274 354 274 354 66 024 71 069 137 093 137 177 (84) -0.1% 274 354

Vote 7 - CIVIL ENGINEERING SERVICES 74 558 86 972 86 972 19 375 21 601 40 976 43 486 (2 510) -5.8% 86 972

Vote 8 - DEVELOPMENT AND PLANNING

SERVICES 13 413 11 803 11 803 2 191 2 599 4 790 5 901 (1 111) -18.8% 11 803

Total Revenue by Vote 553 110 607 574 607 574 161 397 164 481 325 878 303 787 22 091 7.3% 607 574

Expenditure by Vote

Vote 1 - MUNICIPAL MANAGER 39 930 32 275 32 275 5 443 6 373 11 817 16 138 (4 321) -26.8% 32 275

Vote 2 - CORPORATE SERVICES 25 585 30 560 30 560 9 554 12 453 22 006 15 280 6 727 44.0% 30 560

Vote 3 - FINANCIAL SERVICES 57 037 30 891 30 891 8 053 13 391 21 444 15 446 5 999 38.8% 30 891

Vote 4 - COMMUNITY SERVICES 96 501 109 892 109 892 21 916 27 698 49 614 54 946 (5 332) -9.7% 109 892

Vote 5 - TECHNICAL DIRECTOR – – – – – – – – –

Vote 6 - ELECTRO MECHANICAL SERVICES 217 356 234 585 234 585 55 980 56 374 112 354 117 293 (4 939) -4.2% 234 585

Vote 7 - CIVIL ENGINEERING SERVICES 132 125 151 506 151 506 28 566 34 294 62 860 75 753 (12 893) -17.0% 151 506

Vote 8 - DEVELOPMENT AND PLANNING

SERVICES 19 189 22 804 22 804 4 758 6 303 11 061 11 402 (341) -3.0% 22 804

Total Expenditure by Vote 587 722 612 513 612 513 134 271 156 886 291 157 306 256 (15 100) -4.9% 612 513

Surplus/ (Deficit) for the year (34 612) (4 939) (4 939) 27 126 7 595 34 722 (2 469) 37 191 -1506.1% (4 939)

NC087 Dawid Kruiper - Table C3 Monthly Budget Statement - Financial Performance (revenue and expenditure by municipal vote) - Mid-Year Assessment

Budget Year 2016/17

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3.1.4 Table C4: Monthly Budget Statement - Financial Performance (revenue and expenditure)

Revenue The annual budget is approved for „Total Revenue by Source‟.

The year to date actual reflects an achievement of 55% (quarter 1: 28%) of the year to date budget of R 575.8 million.

The following revenue sources have positive variances in excess of 5% –

Interest Earned – External Investments (178%) – Conditional grant funding being invested resulted in more interest earned;

Transfers Recognised - Operational (46%) - Equitable Share, FMG and Transitional Amalgamation funding received during August 2016 and December 2016;

Interest Earned – Outstanding Debtors (17%) – Increase in outstanding debtors resulted in more interest being levied;

Property Rates (16%) – Annual Property Rates being levied on the 1st of July 2016;

Service Charges – Sanitation Revenue (14%) – Additional income due to informal settlements being levied and other developments;

Agency Services (11%) – Increase in renewal fees resulted in more income received; and

Fines (10%): The calculated payment ratio of fines issued being paid for 2015/2016 was 7%. The increase can be due to more fines being issued or an increase in the actual payment ratio.

It is noted that some revenue sources have negative variances in excess of 5% -

Other Revenue (32%) – Council resolution to lower the tariff for consent usage resulted in less income being levied;

Rental of facilities and equipment (10%) - Commonage Farmers are being billed bi - annually; and

Gain on disposal of PPE (9%) - Disposal of Eiland Resort budgeted for, but disposal did not realise.

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Expenditure

For the year-to-date all expenditure items that show negative variances, indicate a saving on that specific expenditure item and where they show positive variances, an overspending is indicated on that specific expenditure item.

Salaries and wages paid to employees and councillors represent 45.2% (quarter 1: 35.3%) of actual revenue billed / levied for the quarter. It should be taken into account that bonuses were paid during November 2016. This attributes to the fact that our monthly fixed cost increases above 50% of our actual income levied and will be even more against the actual income received. This is a big concern for the municipality. At this stage the ongoing increase in employee related costs are contributing to the following:

tariff increases beyond inflation rates;

unaffordability of loan raised;

compromising of repairs and maintenance of assets which resulted in impairment losses due to assets not maintained; and

non-payment of creditors which results in accounts being closed and the credibility of the municipality, within the community, being questioned.

The following expenditure sources have positive variances in excess of 5% –

Transfer and Grants (49%) – Donations are being given by the Mayor based on discretion; and

Employee Related Cost (11%) – Additional employees employed by the municipality;

The following expenditure sources have negative variances in excess of 5% –

Debt Impairment (100%) – Pro-rata journal to be processed. The actual amount will only be reflected on the 2016/2017 AFS;

Other Materials (46%) – Budget constraints due to cash flow problems resulting in less expenditure;

Bulk Purchases (16%) – outstanding invoices from DWA not captured on financial system;

Other Expenditure (14%) – Budget constraints due to cash flow problems resulting in less expenditure;

Finance Charges (10%) – Finance Charges are being paid during June and December. Restructuring of DBSA loans are resulting in less finance charges being paid; and

Contracted Services (9%) – Budget constraints due to cash flow problems resulting in less expenditure;

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3.1.5 Table C5: Monthly Budget Statement - Capital Expenditure (municipal vote, standard classification and funding)

Year-to-date capital expenditure shows a 50% negative variance of the year-to-date budget.

Capital projects are still in the planning phase. Some of the tenders have been awarded and consultants were appointed. Expenditure on multi-year projects will continue.

2015/16 Budget Year 2016/17

Audited

Outcome

Original

Budget

Adjusted


YearTD

actual

YearTD

budget

YTD

variance

YTD

variance

Budget Year

2016/17

R thousands %

Multi-Year expenditure appropriation

Vote 1 - MUNICIPAL MANAGER 571 – – – – – – – –

Vote 2 - CORPORATE SERVICES 13 – – – – – – – –

Vote 3 - FINANCIAL SERVICES – – – – – – – – –

Vote 4 - COMMUNITY SERVICES – – – – 132 132 – 132 100% –


Vote 6 - ELECTRO MECHANICAL SERVICES – – – – – – – – –

Vote 7 - CIVIL ENGINEERING SERVICES 1 438 – – – 146 146 – 146 100% –

Vote 8 - DEVELOPMENT AND PLANNING SERVICES 2 859 9 290 9 290 2 805 6 460 9 265 4 645 4 620 99% 9 290

Total Capital Multi-year expenditure 4 881 9 290 9 290 2 805 6 738 9 543 4 645 4 898 105% 9 290

Single Year expenditure appropriation

Vote 1 - MUNICIPAL MANAGER 6 1 500 1 500 – 16 16 750 (734) -98% 1 500

Vote 2 - CORPORATE SERVICES 1 591 – – 336 213 548 – 548 100% –

Vote 3 - FINANCIAL SERVICES 1 713 – – – (44) (44) – (44) 100% –

Vote 4 - COMMUNITY SERVICES 84 – – 477 40 517 – 517 100% –


Vote 6 - ELECTRO MECHANICAL SERVICES 25 146 37 799 37 799 4 588 1 437 6 025 18 900 (12 875) -68% 37 799

Vote 7 - CIVIL ENGINEERING SERVICES 5 104 21 229 21 229 431 142 573 10 615 (10 041) -95% 21 229

Vote 8 - DEVELOPMENT AND PLANNING SERVICES 1 611 – – 234 25 259 – 259 100% –

Total Capital single-year expenditure 35 255 60 528 60 528 6 066 1 828 7 894 30 264 (22 370) -74% 60 528

Total Capital Expenditure 40 136 69 818 69 818 8 870 8 567 17 437 34 909 (17 472) -50% 69 818

Capital Expenditure - Standard Classification

Governance and administration 3 977 22 552 22 552 336 223 558 11 276 (10 718) -95% 22 552

Ex ecutiv e and council 577 7 614 7 614 – 16 16 3 807 (3 791) -100% 7 614

Budget and treasury office 1 713 – – – (44) (44) – (44) 100% –

Corporate serv ices 1 687 14 938 14 938 336 251 587 7 469 (6 882) -92% 14 938

Community and public safety 149 – – 457 172 629 - 629 100% –

Community and social serv ices 9 – – – – – – – –

Sport and recreation 107 – – 435 156 591 - 591 100% –

Public safety 34 – – 23 16 38 – 38 100% –

Economic and environmental services 4 642 9 290 9 290 3 039 6 486 9 524 4 645 4 880 105% 9 290

Planning and dev elopment 4 404 9 290 9 290 3 039 6 486 9 524 4 645 4 880 105% 9 290

Road transport 238 – – – – – - – –

Trading services 31 368 37 976 37 976 5 039 1 686 6 725 18 988 (12 263) -65% 37 976

Electricity 25 063 16 747 16 747 4 588 1 399 5 986 8 374 (2 387) -29% 16 747

Water 5 916 6 877 6 877 223 251 474 3 439 (2 964) -86% 6 877

Waste w ater management 389 14 352 14 352 208 36 245 7 176 (6 931) -97% 14 352

Waste management – – – 20 – 20 - 20 100% –

Other – – – – – – - – –

Total Capital Expenditure - Standard Classification 40 136 69 818 69 818 8 870 8 567 17 437 34 909 (17 472) -50% 69 818 –

Funded by: –

National Gov ernment 22 556 28 311 28 311 6 383 7 674 14 058 14 155 (98) -1% 28 311

Prov incial Gov ernment 2 783 3 509 3 509 9 – 9 1 754 (1 746) -100% 3 509

Other transfers and grants – – – 435 156 591 - 591 100% –

Transfers recognised - capital 25 339 31 819 31 819 6 827 7 830 14 657 15 910 (1 253) -8% 31 819

Internally generated funds 14 797 37 998 37 998 2 044 736 2 780 18 999 (16 219) -85% 37 998

Total Capital Funding 40 136 69 818 69 818 8 870 8 567 17 437 34 909 (17 472) -50% 69 818

NC087 Dawid Kruiper - Table C5 Monthly Budget Statement - Capital Expenditure (municipal vote, standard classification and funding) - Mid-Year Assessment

Vote Description

14


3.1.6 Table C6: Monthly Budget Statement - Financial Position

It should be noted that our current assets exceed our current liabilities with R 26.5 million (quarter 1: R 11.4 million). The norm for the liquidity ratio is 2:1, to ensure sufficient assets (cash) is available to pay liabilities. Dawid Kruiper Municipality‟s ratio is: 1.25:1 (quarter 1: 1.11:1). This will result in a going concern matter in the 2016/2017 audit report. However, there is systematically an improvement in the ratio. Quill is still in the process of combining and importing transactions captured on SAMRAS (Mier Municipality‟s financial system) to BIQ. The data that still must be imported will affect most of the line items in the general ledger and sub-legers. The effective date of the merger was confirmed as the 6th of August 2016.

2015/16 Budget Year 2016/17

Audited

Outcome

Original

Budget

Adjusted


Full Year

Forecast

R thousands

ASSETS

Current assets

Cash 21 360 14 112 14 112 25 790 28 953 14 112

Consumer debtors 66 252 56 425 56 425 81 930 96 817 56 425

Other debtors 4 882 7 200 7 200 1 511 1 364 7 200

Current portion of long-term receiv ables 8 5 5 8 8 5

Inv entory 11 013 6 650 6 650 5 300 6 194 6 650

Total current assets 103 515 84 392 84 392 114 538 133 337 84 392

Non current assets

Long-term receiv ables 9 5 5 8 4 5

Inv estment property 202 345 224 138 224 138 217 638 217 638 224 138

Property , plant and equipment 1 567 633 1 550 033 1 550 033 1 539 482 1 527 379 1 550 033

Intangible assets 3 168 3 372 3 372 3 372 3 372 3 372

Total non current assets 1 773 156 1 777 548 1 777 548 1 760 501 1 748 393 1 777 548

TOTAL ASSETS 1 876 671 1 861 940 1 861 940 1 875 039 1 881 730 1 861 940

LIABILITIES

Current liabilities

Bank ov erdraft 5 693 3 000 3 000 – 8 026 3 000

Borrow ing 11 314 8 473 8 473 11 314 11 314 8 473

Consumer deposits 10 916 11 500 11 500 12 078 11 960 11 500

Trade and other pay ables 99 346 59 400 59 400 75 131 70 957 59 400

Prov isions 5 417 9 750 9 750 4 600 4 600 9 750

Total current liabilities 132 687 92 123 92 123 103 123 106 857 92 123

Non current liabilities

Borrow ing 113 064 88 283 88 283 110 126 106 118 88 283

Prov isions 115 147 107 854 107 854 79 397 78 767 107 854

Total non current liabilities 228 211 196 138 196 138 189 523 184 885 196 138

TOTAL LIABILITIES 360 898 288 261 288 261 292 646 291 743 288 261

NET ASSETS 1 515 773 1 573 679 1 573 679 1 582 393 1 589 987 1 573 679

COMMUNITY WEALTH/EQUITY

Accumulated Surplus/(Deficit) 1 515 773 1 573 679 1 573 679 1 582 393 1 589 987 1 573 679

TOTAL COMMUNITY WEALTH/EQUITY 1 515 773 1 573 679 1 573 679 1 582 393 1 589 987 1 573 679

Description

NC087 Dawid Kruiper - Table C6 Monthly Budget Statement - Financial Position - Mid-Year Assessment

15


3.1.7 Table C7: Monthly Budget Statement - Cash Flow

Table C7 provides a comprehensive picture of the cash position of the municipality which includes non-current investments and commitments against available cash resources. Table C7 includes all cash and cash equivalents (cashbook balances, petty cash balances and short-term investment deposits).

The cash flow statement reflects a positive cash and cash equivalents balance of R 20.9 million (quarter 1: positive cash and cash equivalents balance of R 25.8 million).

The municipality has a cash outflow of R 4.9 million for quarter 2 and a cash inflow of R 10.1 million for quarter 1. Capital projects that need counter funding are being restricted to limit the amount of cash from own funding. However, we need to prioritise own funding for the resealing of roads. This will be discussed during the 2016/2017 adjustment budget.

The total outstanding creditors are R 12.9 million and bank overdraft was R 8.0 as at 31 December 2016. This leaves us with obligations / current liabilities of R 20.9 million (Quarter 2 of 2016: R 60.2 million) this can be regarded as “back lock money”. Outstanding debtors in access of 31 days as at 31 December 2016 is: R 61.2 million (Quarter 2 of 2016: R 32.9 million). This figure cannot be offset against the R 20.9 million as the R 61.2 million will not be collected within one month, whereas the creditors must be paid within 30 days as prescribed by Section 65(2)(e) of the MFMA. Therefore if all the vacant erven are being sold at once, Dawid Kruiper Municipality will only be able to pay current liabilities, but this is a short-term fix. Employee related costs are increasing on an annual basis not only with the approved increases of SALGA, but due to additional employees appointed, increases above inflation by medical aid, etc. We will not be able to afford the current personnel corps that we currently have for a period exceeding 5 years if we continue with the current trends.

2015/16 Budget Year 2016/17

Audited

Outcome

Original

Budget

Adjusted


YearTD

actual

YearTD

budget

YTD

variance

YTD

variance

Full Year

Forecast

R thousands %

CASH FLOW FROM OPERATING ACTIVITIES

Receipts

Property rates, penalties & collection charges 47 988 77 516 77 516 18 870 10 686 29 557 38 758 (9 202) -24% 77 516

Serv ice charges 242 448 368 044 368 044 86 984 84 129 171 113 184 022 (12 909) -7% 368 044

Other rev enue 128 297 23 233 23 233 7 464 5 971 13 435 11 617 1 818 16% 23 233

Gov ernment - operating 69 715 73 477 73 477 27 762 26 153 53 915 36 738 17 177 47% 73 477

Gov ernment - capital 25 339 31 819 31 819 3 020 8 605 11 624 15 910 (4 286) -27% 31 819

Interest 4 176 3 600 3 600 1 152 1 435 2 587 1 800 787 44% 3 600

Payments

Suppliers and employ ees (479 269) (495 495) (495 495) (125 459) (129 616) (255 075) (247 748) 7 328 -3% (495 495)

Finance charges (785) (14 978) (14 978) (2 202) (4 554) (6 756) (7 489) (733) 10% (14 978)

Transfers and Grants (14 658) (110) (110) (63) (19) (82) (55) 27 -49% (110)

NET CASH FROM/(USED) OPERATING ACTIVITIES 23 252 67 106 67 106 17 528 2 790 20 317 33 553 8 0% 67 106 –

CASH FLOWS FROM INVESTING ACTIVITIES

Receipts

Proceeds on disposal of PPE 3 101 18 200 18 200 3 242 5 035 8 277 9 100 (823) -9% 18 200

Decrease (increase) other non-current receiv ables 6 6 6 1 4 5 3 2 70% 6

Payments

Capital assets (9 281) (69 818) (69 818) (8 870) (8 567) (17 437) (34 909) (17 472) 50% (69 818)

NET CASH FROM/(USED) INVESTING ACTIVITIES (5 879) (51 611) (51 611) (5 627) (3 527) (9 154) (25 806) (16 652) 65% (51 611) –

CASH FLOWS FROM FINANCING ACTIVITIES

Receipts

Increase (decrease) in consumer deposits 2 176 500 500 1 161 (118) 1 043 250 793 317% 500

Payments

Repay ment of borrow ing 1 309 (9 883) (9 883) (2 938) (4 007) (6 946) (4 941) 2 004 -41% (9 883)

NET CASH FROM/(USED) FINANCING ACTIVITIES 3 485 (9 383) (9 383) (1 777) (4 125) (5 903) (4 691) 1 211 -26% (9 383) –

NET INCREASE/ (DECREASE) IN CASH HELD 20 564 6 112 6 112 10 123 (4 862) 5 261 3 056 6 112

Cash/cash equiv alents at beginning: (4 897) 5 000 5 000 15 667 25 790 15 667 2 500 5 000

Cash/cash equiv alents at month/y ear end: 15 667 11 112 11 112 25 790 20 927 20 927 5 556 11 112

Description

NC087 Dawid Kruiper - Table C7 Monthly Budget Statement - Cash Flow - Mid-Year Assessment

16


3.1.8 Debtors Information

3.1.8.1 Debtors Age Analysis as at 31 December 2016

The total outstanding debtors for quarter 2 of 2017 are R 96.8 million and R 65.3 million for quarter 2 of 2016 (quarter 1 of 2017 was R 91.5 million and R 61.9 million for quarter 1 of 2016). Debtors outstanding from 31 days to over 1 year increased from R 32.9 million to R 61.2 million, when compared with quarter 2 of 2016. Non-collection of outstanding debtors results in cash flow problems. Outstanding debtors should immediately be handed over to attorneys for collection thereof. The write off of bad debts are not encouraged, as it may result in unauthorised expenditure and possible tariff increases above inflation in future. The debtor department must ensure that all outstanding debt of employees are collected and monitored. No hand over of debtors was done for quarter 1 and quarter 2.

Description

R thousands

NT

Code0-30 Days 31-60 Days 61-90 Days 91-120 Days 121-150 Dys 151-180 Dys 181 Dys-1 Yr Over 1Yr Total

Total

over 90

days

Debtors Age Analysis By Income Source

Trade and Other Receiv ables from Ex change Transactions - Water 1200 3 477 682 319 231 242 351 1 131 5 167 11 600 7 122

Trade and Other Receiv ables from Ex change Transactions - Electricity 1300 14 379 299 119 50 44 32 182 690 15 793 997

Receiv ables from Non-ex change Transactions - Property Rates 1400 4 968 495 353 1 508 1 205 343 712 8 868 18 452 12 636

Receiv ables from Ex change Transactions - Waste Water Management 1500 2 001 392 264 224 196 240 679 2 227 6 223 3 565

Receiv ables from Ex change Transactions - Waste Management 1600 1 906 608 466 385 354 361 900 4 970 9 949 6 969

Receiv ables from Ex change Transactions - Property Rental Debtors 1700 312 262 208 169 160 150 144 1 045 2 449 1 667

Interest on Arrear Debtor Accounts 1810 – – – – – – – – – –

Recov erable unauthorised, irregular, fruitless and w asteful ex penditure 1820 – – – – – – – – – –

Other 1900 8 579 3 651 1 739 1 265 721 2 861 1 646 11 920 32 383 18 413

Total By Income Source 2000 35 622 6 388 3 467 3 831 2 922 4 338 5 393 34 886 96 848 51 371

2015/16 - totals only 32 420 3 939 1 819 3 382 3 469 2 097 1 125 17 094 65 346 27 168

Debtors Age Analysis By Customer Group

Organs of State 2200 3 582 154 57 18 322 8 6 493 4 641 848

Commercial 2300 14 876 652 1 329 827 765 307 197 5 160 24 113 7 256

Households 2400 12 555 2 988 1 961 2 547 1 769 1 719 1 770 22 366 47 676 30 171

Other 2500 4 609 2 593 121 439 65 2 305 3 420 6 866 20 418 13 095

Total By Customer Group 2600 35 622 6 388 3 467 3 831 2 922 4 338 5 393 34 886 96 848 51 371

NC087 Dawid Kruiper - Supporting Table SC3 Monthly Budget Statement - aged debtors - Mid-Year Assessment

Budget Year 2016/17

17


3.1.8.2 Payment levels

Collection Rates (payment levels) reflect the total income collected for the period 18 July 2016 – 17 December 2016. The budgeted collection rate is 98%, any collection rate below 98% will therefore result in cash flow problems. This percentage was based on past collection rates.

The higher the collection rate the better collection of the service charges billed.

The table below reflects the total income billed and received per service group.

The table below reflects the total income billed and received per ward.

Service group Billed Received Dep journals Indigent subs Tot payments Cash col rate Nett col rate Non payment Corrections Total Received Coll Rate

Property tax 34 206 451 48 133 701 (8) 1 147 624 49 281 318 141% 144% (15 074 867) (9 376 672) 39 904 646 116.7%

Electricity 77 746 507 68 831 638 8 168 541 508 77 000 686 89% 99% 745 821 (210 403) 76 790 283 98.8%

Water 20 881 587 16 250 681 1 647 577 762 164 18 660 422 78% 89% 2 221 165 (11 453 850) 7 206 572 34.5%

Sewage 13 649 580 10 450 855 54 992 2 244 117 12 749 965 77% 93% 899 616 12 353 717 25 103 682 183.9%

Refuse Removal 12 402 447 8 727 657 45 009 2 569 195 11 341 861 70% 91% 1 060 586 5 565 222 16 907 083 136.3%

Other 6 057 532 8 148 777 2 011 352 820 8 503 607 135% 140% (2 446 075) (7 685 302) 818 305 13.5%

Total 164 944 105 160 543 309 9 918 122 7 076 428 177 537 859 97% 108% (12 593 754) (10 807 289) 166 730 570 101.1%

Ward Billed Received Dep journals Indigent subs Tot payments Cash col rate Nett col rate Non payment Corrections Total Received Coll Rate

Ward 1 3 297 891 2 037 417 77 118 1 126 264 3 240 799 62% 98% 57 092 1 650 3 242 449 98.3%

Ward 2 3 177 265 2 254 217 - 917 604 3 171 821 71% 100% 5 444 (10 326) 3 161 495 99.5%

Ward 3 4 128 089 3 917 654 40 893 497 757 4 456 304 95% 108% (328 215) (13 521) 4 442 784 107.6%

Ward 4 17 138 551 13 094 582 7 368 097 561 498 21 024 177 76% 123% (3 885 627) (40 003) 20 984 174 122.4%

Ward 5 3 717 316 3 288 158 23 390 535 426 3 846 974 88% 103% (129 657) 2 701 3 849 675 103.6%

Ward 6 2 329 652 1 516 121 19 482 508 610 2 044 213 65% 88% 285 439 (15 476) 2 028 737 87.1%

Ward 7 8 758 339 8 498 814 20 017 386 655 8 905 487 97% 102% (147 148) (21 214) 8 884 273 101.4%

Ward 8 56 139 792 61 782 919 97 112 232 638 62 112 670 110% 111% (5 972 878) (9 705 490) 52 407 180 93.4%

Ward 9 26 439 359 27 531 347 - 45 695 27 577 042 104% 104% (1 137 683) (151 929) 27 425 113 103.7%

Ward 10 7 359 720 6 721 882 9 018 824 885 7 555 785 91% 103% (196 065) (62 534) 7 493 251 101.8%

Ward 11 10 452 200 11 998 094 2 162 929 198 107 14 359 130 115% 137% (3 906 930) (306 474) 14 052 656 134.4%

Ward 12 3 068 233 2 746 453 3 333 241 512 2 991 297 90% 97% 76 936 (107 293) 2 884 005 94.0%

Ward 13 8 888 207 7 825 874 - 530 192 8 356 066 88% 94% 532 140 (24 120) 8 331 946 93.7%

Ward 14 881 488 866 092 4 120 145 364 1 015 576 98% 115% (134 088) (13 827) 1 001 749 113.6%

Not specified 9 168 003 6 463 684 92 612 324 222 6 880 518 71% 75% 2 287 486 (339 434) 6 541 084 71.3%

Total 164 944 105 160 543 309 9 918 122 7 076 428 177 537 859 97% 108% (12 593 754) (10 807 289) 166 730 570 101.1%

18


The table below reflects the total income billed and received per district group.

District group Billed Received Dep journals Indigent subs Tot payments Cash col rate Nett col rate Non payment Corrections Total Received Coll Rate

Keidebees 7 706 605 7 752 722 378 8 857 7 761 957 101% 101% (55 352) (107 635) 7 654 322 99.3%

Middelpos 6 070 124 6 285 515 - 6 209 6 291 724 104% 104% (221 600) 37 201 6 328 925 104.3%

Oosterville 7 716 127 8 050 563 - 9 916 8 060 479 104% 104% (344 352) (89 275) 7 971 204 103.3%

Blydeveld 3 517 819 3 380 291 378 1 154 3 381 823 96% 96% 135 995 (6 558) 3 375 265 95.9%

Akademia 1 955 394 1 732 607 - 44 911 1 777 518 89% 91% 177 876 (9 701) 1 767 817 90.4%

Florapark 2 408 255 3 401 764 - 11 733 3 413 496 141% 142% (1 005 241) (313 138) 3 100 358 128.7%

Die Rand 16 357 545 16 591 327 1 784 18 063 16 611 174 101% 102% (253 629) (250 873) 16 360 301 100.0%

Town Centre / Business Area 31 380 178 32 753 440 48 958 40 236 32 842 635 104% 105% (1 462 456) (3 619 087) 29 223 548 93.1%

Riverside 7 905 933 11 341 931 18 147 54 285 11 414 363 143% 144% (3 508 430) (38 919) 11 375 443 143.9%

Progress 4 822 323 3 687 219 51 383 1 187 252 4 925 855 76% 102% (103 532) (30 495) 4 895 359 101.5%

Bellvue 2 461 287 2 459 487 - 157 947 2 617 434 100% 106% (156 146) (1 795) 2 615 639 106.3%

Morning Glory 2 523 530 1 934 778 - 595 072 2 529 849 77% 100% (6 319) (9 531) 2 520 318 99.9%

Rosedale 6 511 673 4 521 579 84 295 1 985 095 6 590 969 69% 101% (79 296) (50 771) 6 540 198 100.4%

Paballelo 6 776 840 4 663 501 39 499 1 425 832 6 128 833 69% 90% 648 007 (41 396) 6 087 436 89.8%

Dakotaweg 288 660 163 751 - 93 994 257 745 57% 89% 30 916 (9 869) 247 875 85.9%

Kameelmond / Lemoendraai 701 121 799 198 967 27 705 827 871 114% 118% (126 750) (157 736) 670 134 95.6%

Industrial Areas 21 724 221 24 960 843 116 811 - 25 077 654 115% 115% (3 353 433) (5 604 701) 19 472 954 89.6%

Commonage 13 732 751 4 972 759 9 450 628 - 14 423 388 36% 105% (690 637) (932 365) 13 491 022 98.2%

Karos 237 182 36 817 2 703 59 026 98 546 16% 42% 138 637 (84) 98 461 41.5%

Lambrechtsdrift 118 356 6 680 - 26 128 32 808 6% 28% 85 548 (1) 32 807 27.7%

Leerkrans 153 374 61 805 1 417 60 740 123 962 40% 81% 29 412 (3 574) 120 388 78.5%

Raaswater 737 195 75 414 3 333 124 509 203 256 10% 28% 533 939 (122) 203 133 27.6%

Sesbrugge / Klippunt 495 685 520 073 - - 520 073 105% 105% (24 388) (5 492) 514 581 103.8%

Kalksloot 511 436 277 143 712 146 127 423 982 54% 83% 87 454 (2 314) 421 668 82.4%

Louisvale Dorp 3 310 701 3 205 903 378 62 721 3 269 002 97% 99% 41 699 (3 616) 3 265 386 98.6%

Leseding 10 135 2 935 - 3 814 6 750 29% 67% 3 385 - 6 750 66.6%

Ntsekelelo 356 584 - - 584 164% 164% (227) (544) 40 11.2%

Louisvaleweg 2 156 751 1 581 065 23 390 594 209 2 198 664 73% 102% (41 914) (1 569) 2 197 096 101.9%

Upington Farming Areas 1 391 813 1 361 721 751 10 159 1 372 630 98% 99% 19 183 (9 369) 1 363 261 97.9%

Gordonia Farming Areas 4 063 866 7 556 249 - 84 7 556 333 186% 186% (3 492 467) (112 135) 7 444 198 183.2%

Karos Farming Areas 115 605 396 786 - - 396 786 343% 343% (281 181) (9 624) 387 162 334.9%

Kenhart Farming Areas 2 204 394 2 528 327 - - 2 528 327 115% 115% (323 933) (111 970) 2 416 357 109.6%

Olyvenhoutsdrift Farming Areas 3 018 722 3 291 117 72 210 - 3 363 327 109% 111% (344 605) 10 913 3 374 240 111.8%

Vaalkoppies Farming Areas 113 511 165 813 - - 165 813 146% 146% (52 302) - 165 813 146.1%

Melkstroom 33 088 10 091 - 3 154 13 245 30% 40% 19 843 284 13 529 40.9%

Not specified 1 711 549 11 511 - 317 495 329 006 1% 19% 1 382 543 678 572 1 007 578 58.9%

Total 164 944 105 160 543 309 9 918 122 7 076 428 177 537 859 97% 108% (12 593 754) (10 807 289) 166 730 570 101.1%

19


3.1.8.3 Debtor arrear summaries

The arrear summaries that follow are not prescriptive in terms of the MFMA or the MBRR. They are included to provide further information on debtors arrears based on various classifications.

All debtors‟ information is coded on the financial database in terms of the following:

Suburb; e.g. Keidebees, Progress, Pabalello

Consumer type; e.g. Business, Household (Domestic), Government

Additional Table SC3-6: Arrears by Service Group

The total outstanding debtors for quarter 2 of 2017 as at 17 December 2016 are R 55.0 million and R 38.9 million for quarter 2 of 2016 as at 17 December 2015, which indicates an increase of R 16.1 million for a period of 12 months. An increase in debtors has a negative impact on the cash flow as rates and services are being levied, but not paid.

The table indicates the total outstanding debt per service group. The main concern is the increase in outstanding debt of businesses and residential debtors.

Service group Current

31 - 60

days

61 - 90

days

91 - 120

days 120 days + Total Credits

% Arrears

of Total

Property tax 945 896 409 326 347 379 306 038 10 472 922 12 481 561 (7 381 400) 23%

Electricity 2 348 317 99 482 68 534 46 141 503 523 3 065 998 (16 085) 6%

Water 1 143 738 546 676 297 267 230 891 4 988 452 7 207 024 (156 746) 13%

Sewage 648 504 310 897 251 021 219 754 2 372 102 3 802 278 (12 733) 7%

Refuse Removal 855 334 536 900 436 978 382 043 5 565 940 7 777 196 (14 091) 14%

Other 4 130 345 962 475 387 760 1 546 224 7 987 741 15 014 545 (40 121) 27%

Deposits 7 721 - - - 35 188 42 909 (820) 0%

Vat 891 733 394 824 242 259 215 221 3 858 000 5 602 037 (52 998) 10%

Total 10 971 588 3 260 581 2 031 200 2 946 312 35 783 867 54 993 548 (7 674 994) 100%

20


Additional Table SC3-7: Arrears by suburb

The table indicates the total outstanding debt per suburb; this includes current and outstanding debt in excess of 1 year. The table below summarises the 30 highest consumer accounts based on the outstanding debt in excess of 30 days. As at the end of quarter 2 of 2017 the 30 highest accounts represent R 10.1 million or 24% (quarter 2 of 2016: R 6.0 million or 19%) of all arrear accounts in excess of 31 days.

District group Current

31 - 60

days

61 - 90

days

91 - 120

days 120 days + Total Credits

31 - 120

days +

% of Arrears

of 31 - 120

days +

% of Arrears of

31 - 120 days +

as % of total

Keidebees 307 392 46 052 27 752 44 438 95 667 521 301 (276 611) 213 909 41% 0%

Middelpos 205 170 43 130 18 311 13 363 63 116 343 091 (205 884) 137 920 40% 0%

Oosterville 142 408 23 475 15 724 10 013 43 054 234 674 (164 171) 92 267 39% 0%

Blydeveld 105 270 48 945 34 235 38 887 592 096 819 433 (132 175) 714 163 87% 2%

Akademia 266 694 130 468 108 477 114 942 765 356 1 385 937 (41 125) 1 119 243 81% 3%

Florapark 88 948 19 453 15 820 8 863 50 946 184 030 (619 651) 95 082 52% 0%

Die Rand 260 678 66 347 44 617 27 496 155 901 555 038 (253 649) 294 360 53% 1%

Town Centre / Business Area 3 974 120 189 097 68 389 43 785 602 614 4 878 005 (652 350) 903 884 19% 2%

Riverside 998 874 90 369 38 740 39 435 2 152 948 3 320 366 (87 671) 2 321 492 70% 5%

Progress 429 544 185 813 130 687 134 939 1 821 814 2 702 797 (132 666) 2 273 252 84% 5%

Bellvue 228 483 60 850 34 353 19 718 191 039 534 442 (18 842) 305 959 57% 1%

Morning Glory 202 421 89 837 67 117 63 380 734 517 1 157 272 (35 121) 954 851 83% 2%

Rosedale 646 765 397 332 277 668 249 358 2 901 416 4 472 539 (256 540) 3 825 774 86% 9%

Paballelo 826 487 639 005 406 251 462 400 5 317 329 7 651 472 (299 467) 6 824 985 89% 16%

Dakotaweg 40 036 29 713 4 499 3 522 61 987 139 757 (9 760) 99 721 71% 0%

Kameelmond / Lemoendraai 34 260 21 887 15 240 12 311 121 470 205 168 (17 498) 170 909 83% 0%

Industrial Areas 889 897 67 617 21 852 24 990 883 325 1 887 681 (2 034 955) 997 784 53% 2%

Commonage 107 691 42 916 3 251 979 988 117 799 1 251 645 (671 819) 1 143 953 91% 3%

Karos 47 943 52 830 39 409 45 310 839 938 1 025 430 (9 410) 977 487 95% 2%

Lambrechtsdrift 24 547 29 447 19 782 23 193 563 474 660 443 (549) 635 895 96% 1%

Leerkrans 25 628 22 802 16 515 18 734 427 891 511 571 (29 885) 485 943 95% 1%

Raaswater 153 930 178 971 119 073 140 176 2 438 738 3 030 886 (6 962) 2 876 957 95% 7%

Sesbrugge / Klippunt 6 093 3 057 1 057 759 43 701 54 666 (3 249) 48 574 89% 0%

Kalksloot 65 400 44 588 84 156 31 556 475 892 701 592 (11 983) 636 192 91% 1%

Louisvale Dorp 46 763 17 084 10 117 11 598 266 686 352 249 (14 541) 305 485 87% 1%

Leseding 1 658 1 426 1 003 1 056 14 910 20 053 (200) 18 395 92% 0%

Ntsekelelo 507 438 360 354 1 192 2 851 - 2 344 82% 0%

Louisvaleweg 241 657 131 853 92 552 84 947 1 231 670 1 782 679 (46 040) 1 541 022 86% 4%

Upington Farming Areas 54 188 13 367 3 859 3 888 43 181 118 482 (41 379) 64 294 54% 0%

Gordonia Farming Areas 170 964 180 073 126 374 117 388 7 444 814 8 039 613 (1 018 265) 7 868 650 98% 18%

Karos Farming Areas 12 753 13 881 9 574 11 133 551 211 598 551 (27 455) 585 799 98% 1%

Kenhart Farming Areas 58 836 19 936 12 730 13 725 203 599 308 827 (36 318) 249 990 81% 1%

Olyvenhoutsdrift Farming Areas 77 159 82 004 18 025 16 593 118 774 312 555 (95 488) 235 396 75% 1%

Vaalkoppies Farming Areas 14 312 8 601 5 816 6 237 210 741 245 707 (86 354) 231 395 94% 1%

Melkstroom 9 910 8 209 5 137 - - 23 257 (877) 13 346 57% 0%

Not specified 204 202 259 708 132 679 127 837 4 235 063 4 959 488 (336 082) 4 755 286 96% 11%

Total 10 971 588 3 260 581 2 031 200 2 946 312 35 783 867 54 993 548 (7 674 994) 44 021 959 80% 100%


Additional Table SC3-8: Age Analyses of 30 highest consumer accounts

Account no Name Account group Ward Current

31 - 60

days

61 - 90

days

91 - 120

days 120 days + Total

31 - 120

days +

0115805 NASIONALE REGERING RSA DOMESTIC 0 0 0 0 0 3 419 010 3 419 010 3 419 010

010021936000008 EIMAN,G 0 11 18 189 33 747 1 053 17 647 1 964 306 2 034 941 2 016 752

010000001073018 ZELPY (1756) PROPRIETARY LIMITED BUSINESS 0 19 596 22 904 0 976 422 0 1 018 922 999 326

100720959993 DART PLANT SERVICES CC INDUSTRY 8 6 380 8 980 3 688 6 376 400 983 426 407 420 027

230000058000008 MOHLOTSANA,MAMOKEBE DOMESTIC 12 7 002 9 096 4 788 6 954 304 541 332 380 325 378

010014977001012 SHOW TIME MEDIA BUSINESS 8 8 211 10 311 5 963 8 135 297 346 329 965 321 754

0121013

ASKHAM KAMEELDUIN KLEINVEE BOERE

COMMUNAL PROPERTY BUSINESS 0 0 0 0 0 313 440 313 440 313 440

0115771 REPUBLIEK VAN SUID AFRICA DOMESTIC 0 0 0 0 0 186 643 186 643 186 643

141020520005

SIYAVUKA LAUNDRY AND DRY CLEANING PRIMARY

PTY(LTD) BUSINESS 7 6 887 7 221 5 733 5 955 162 010 187 807 180 919

0116208 TRUSTEES SCHOOL DISTRICT GORDONIA & RSA BUSINESS 0 0 0 0 0 177 572 177 572 177 572

0003109 PAGE (GROOT MIER WINKELKOMPLEKS),CHARL H MUNICIPAL 0 437 437 237 18 679 138 455 158 245 157 808

0121020 BLINK BELEG TWAALF PTY LTD BUSINESS 0 0 0 0 0 156 720 156 720 156 720

310251023000009 REP VAN SUID-AFRIKA National: Public Works 11 1 085 1 121 724 749 145 022 148 702 147 617

100362639998 DART PLANT SERVICES CC INDUSTRY 8 1 778 2 682 853 1 787 139 514 146 614 144 836

310326000000003 MIER MUNISIPALITEIT OTHER 11 4 818 5 595 3 943 4 828 103 962 123 146 118 328

310251021000003 REP VAN SUID-AFRIKA OTHER 11 4 384 5 141 3 539 4 322 100 510 117 897 113 513


310251020000008 REP VAN SUID-AFRIKA OTHER 11 4 348 5 099 3 509 4 287 99 717 116 960 112 612

010001791000011 COMMISSION FOR CHILDREN BUSINESS 8 2 014 2 719 1 277 2 006 105 404 113 420 111 406

010012943001029 DAWID KRUIPER MUNISIPALITEIT MUNICIPAL 13 16 981 16 981 8 262 5 741 78 366 126 332 109 350


310251112000014 REP VAN SUID-AFRIKA DOMESTIC 11 4 140 4 842 3 355 4 081 92 323 108 740 104 600

310251077000006 THEUNIS JACOBS FAMILIE TRUST OTHER 11 4 356 5 009 3 614 4 289 83 777 101 046 96 690

310251104000005 B&S MARITZ FAMILIE TRUST OTHER 11 722 746 349 360 91 678 93 855 93 133

010017003000034 DUNDAN,SADIQ,YUSSUF DOMESTIC 8 934 84 645 166 249 5 668 91 662 90 728

010020063000018 KALIYAMURTHY,SURESH DOMESTIC 8 779 1 052 0 0 86 366 88 197 87 418

010020064000011 KALIYAMURTHY,SURESH DOMESTIC 8 779 1 052 0 0 86 366 88 197 87 418

310373000000018 REP VAN SUID-AFRIKA National: Public Works 11 634 655 409 423 83 932 86 053 85 419

310178000000004 FJ VAN ZYL & SEUNS BOERDERY PTY LTD OTHER 11 3 414 3 909 2 848 3 360 63 590 77 122 73 708

170061010000 SEPTEMBER,FRANK,MATTHEWS DOMESTIC 5 1 401 1 957 826 1 347 68 657 74 188 72 787


3.1.9 Creditors Information

The municipality is experiencing cash flow problems which results in the non-payment or creditor payments in excess of 30 days, which is a non-compliance in terms of Section 65 (2)(e) of the MFMA. The outstanding creditors for quarter 2 of 2017 are R 12.9 million and R 38.8 million for quarter 2 of 2016. This implicates a decrease of R 25.9 million. Non-payment of debtors, non-materialisation of erven sales as well as the high employee related cost results in the non-payment of creditors. The municipality should ensure that the non-payment of creditors do not result in the local businesses being left bankrupt and therefore work losses occur within Dawid Kruiper Municipality and local communities.

Non-payment of creditors can also result in creditors levying interest and possibly taking legal action against the municipality, therefore resulting in additional legal costs. Furthermore local creditors might refuse to deliver a service to the municipality that may result in that services must be obtained from outside the municipal jurisdiction which could lead to additional costs and delivery time. This also means that money will “leave” our municipal jurisdiction.

3.1.10 Cash and Investments

The municipality‟s investments as at 31 December 2016 are set out in Table SC5 above. The municipality started the beginning of the month with a market value of R 0. These investments however qualify as cash and cash equivalents. Therefore our total Market value at month end is R 0.

Budget Year 2016/17

R thousands

Creditors Age Analysis By Customer Type

Bulk Electricity 0100 – – – – – – – – – –

Bulk Water 0200 – – – – – – – – – –

PAYE deductions 0300 – – – – – – – – – –

VAT (output less input) 0400 – – – – – – – – – –

Pensions / Retirement deductions 0500 – – – – – – – – – –

Loan repay ments 0600 – – – – – – – – – –

Trade Creditors 0700 3 935 2 734 2 156 682 – – – 3 385 12 892 31 407

Auditor General 0800 – –

Other 0900 – – – – – – – – – 7 355

Total By Customer Type 1000 3 935 2 734 2 156 682 – – – 3 385 12 892 38 762

181 Days -

1 Year

Over 1

Year

Total

NC087 Dawid Kruiper - Supporting Table SC4 Monthly Budget Statement - aged creditors - Mid-Year Assessment

Description NT

Code

Prior y ear

totals for chart

(same period)

0 -

30 Days

31 -

60 Days

61 -

90 Days

91 -

120 Days

121 -

150 Days

151 -

180 Days

Investments by maturity

Name of institution & investment ID

R thousands

Municipality

Daw id Kruiper Sav ings 0 25 – 25

Mier Municipality - Interest Only Call Account 33 – – 33

Daw id Kruiper Smart Rate on Call 353 19 145 – 27 510

Minus: Inv estments qualify ing as cash and cash equiv alents – (19 170) – (27 569)

Municipality sub-total 386 – – –

Entities

Entities sub-total – – – –

TOTAL INVESTMENTS AND INTEREST 386 – – –

NC087 Dawid Kruiper - Supporting Table SC5 Monthly Budget Statement - investment portfolio - Mid-Year Assessment

Type of Investment Accrued

interest for

the quarter

Market value at

beginning of

the Quarter

Change in

market

value

Market value at end

of the month

23


Conditional grants received are invested. These funds are only available to pay capital projects which are funded by MIG, INEP, EPWP, etc. in terms of an approved business plan. These funds may not be used for operational expenditure.

3.1.11 Allocation and Grant Receipts and Expenditure

The municipality‟s position with regard to grant allocations received and the actual expenditure on the grant allocations received are set out in the table above. The municipality started at the beginning of the year with unspent conditional grants to the value of R 3.8 million and unpaid grants to the value of R 2.9 million. During the past six months conditional grants to the value of R 39.3 million were received and capital and operational expenditure to the value of R 14.1 million were transferred to revenue. Therefore, unspent conditional grants amounted to R 26.8 million and unpaid grants to R 662 thousand. All unspent grants are cash backed as at 31 December 2016.

Account Description

Opening Balance

- 1 July 2016 Total Received

Expenditure

Transferred to

Revenue

Correction /

Withheld

Closing Balance

- 31 December

2016

INEP

Integrated Nationale Electrification

Programme (INEP) - (1 000 000) - - (1 000 000)

NDR100 Township Establishment (COGHSTA) (2 925 281) - - - (2 925 281)

NDR102 Cultural Festival (39 204) - - - (39 204)

NDR104 EPWP - DoRA Allocation (170 916) (500 000) 172 304 - (498 612)

NDR105 Department of Water Affairs (DWA) (7 206) - 7 206 - -

NDR11 Amalgamation Grant - (8 058 000) - - (8 058 000)

NDR111

Community Development Grant (Directo

Signs) - (50 000) - - (50 000)

NDR1605 Finance Management Grant (FMG) - (3 635 000) 549 812 - (3 085 188)

NDR49 Municipal Infrastructure Grant (MIG) 2 234 168 (19 416 000) 12 564 440 - (4 617 393)

NDR59 Housing Accreditation - (650 000) - - (650 000)

NDR86 Energy Efficiency Demand Management (0) (6 000 000) 150 000 - (5 850 000)

NDR87 National Lotteries Board (672 339) - 669 981 - (2 358)

NDR92 Extended Public Works Programme (EPWP) 662 079 - - - 662 079

Total (Unspent) / Unpaid Grants (918 699) (39 309 000) 14 113 742 - (26 113 957)

GRANT REGISTER FROM 1 JULY 2016 - 31 DECEMBER 2016

24


3.1.12 Expenditure on councillor allowances and employee benefits

Employee related costs for quarter 2 ended 31 December 2016 are set out below.

Employee related cost is in excess of the acceptable norm of 35 – 40% of total expenditure. Employee related cost (including councillors) as a percentage of total expenditure, excluding non-cash items, for quarter 2 is 51.7% (quarter 1: 49.2%) and employee related cost as a percentage of total revenue for quarter 2 is 45.2% (quarter 1: 35.3%). It could be that employees of the municipality are not working productively, which results in the need for temporary employees to perform the tasks / duties of permanent employees. Employee related cost (including councillors) as a percentage of total expenditure, excluding depreciation and bulk purchases on electricity should be 50.0% or less. Dawid Kruiper Municipality‟s ratio for quarter 2 is 71.9% (quarter 1: 75.5%). If the excess percentage of 21.9% is expressed as an amount, the actual figure will be R 21.5 million for quarter 2 (quarter 1: R 18.9 million). The total figure for the past six months is: R 40.4 million or 23.5%. At this stage creditors are used to fund salary payments. It should be noted that due to cost constraints expenditure on operational costs have decreased leading to a proposed increase in the percentage of employee related cost as a percentage of total expenditure, excluding non-cash items. Therefore it seems that too much employees are employed by the municipality. In the overtime per function table below overtime paid per function is compared with the approved budget allocations. Overtime worked by employees (specifically water distribution, streets & storm water and sewerage distribution) is normally to repair the networks (water, storm / water, sewerage) in emergency situations and normally takes place after hours. Overtime paid for quarter 2 was R 4.1 million (quarter 1: R 3.8 million). It should be noted that overtime performed by parks, electricity department and civil services could be part of employee cost capitalised - refer to 3.1.12, page 25.

National Treasury Line Item

2016/2017

Original

Budget

2016/2017

Year to Date Quarter 1 Quarter 2

Quarter 2 as %

of Original

Budget

Year to Date as

% of Original

Budget

Bargaining Council Contribution 73 363 38 469 18 179 20 291 28% 53%

Bonus 10 428 579 11 208 024 130 924 11 077 099 106% 99%

Contributions to Medical Aid 12 275 099 6 296 770 3 149 494 3 147 276 26% 50%

Contributions to Pension 23 853 744 12 893 123 6 256 698 6 636 425 28% 51%

Contributions to UIF 1 274 487 684 302 320 759 363 543 29% 53%

Contributions to WCA 1 503 160 – – – 0% 0%

Group Life Insurance 1 486 479 778 149 387 043 391 106 26% 50%

Housing benefits 1 796 158 838 718 395 144 443 574 25% 53%

Less: Employee Costs Capitalised (984 771) (424 337) (162 592) (261 745) 27% 62%

Overtime 13 760 665 7 874 039 3 775 560 4 098 480 30% 52%

Performance Bonus 1 102 400 – – – 0% 0%

Salaries and Wages 143 104 353 74 758 040 36 201 887 38 556 153 27% 52%

Training Levies 1 754 487 1 026 031 456 492 569 539 32% 56%

Travel, motor car, accom & other

allowances 8 525 251 5 909 952 2 810 661 3 099 291 36% 52%2 057 833 –

TOTAL EMPLOYEE RELATED COST 219 953 454 121 881 280 53 740 248 68 141 031 31% 55%153 102 637

EMPLOYEE RELATED COST FOR QUARTER 2 ENDED 31 DECEMBER 2016

25


National Treasury Line Item

2016/2017

Original

Budget

2016/2017

Year to Date Quarter 1 Quarter 2

Quarter 2 as

% of Original

Budget

Year to Date

as % of

Original

Budget

Administration 325 743 144 307 64 973 79 334 24% 44%

Libraries 3 564 65 202 1 385 63 816 1791% 1829%

Tourism & Marketing – 609 – 609 100% 100%

Financial Services 330 035 146 229 76 459 69 770 21% 44%

Municipal Manager 14 076 – – – 0% 0%

Housing and Development 3 307 – – – 0% 0%

Traffic Services 415 050 258 435 125 226 133 209 32% 62%

Fire Brigade Services 931 947 372 761 199 627 173 135 19% 40%

Security Services 1 142 864 292 262 147 455 144 807 13% 26%

Environmental Health Services – 1 129 – 1 129 100% 100%

Sanitation Services 831 045 506 199 249 466 256 732 31% 61%

Refuse Removal Services 1 687 253 943 220 377 978 565 241 34% 56%

Vacuum Tank Services 32 112 26 243 11 837 14 407 45% 82%

Primary Health Care 13 408 – – – 0% 0%

Information Technology 132 128 40 922 24 532 16 391 12% 31%

Civil Engineering Services – 978 – 978 100% 100%

Streets and Storm water drainage 898 276 476 003 283 876 192 128 21% 53%

Workshop 145 626 85 333 22 383 62 951 43% 59%

Sewerage Purification Plant 437 481 409 022 156 847 252 175 58% 93%

Building Construction Unit – 12 423 5 682 6 741 100% 100%

Sewerage Distribution Networks 1 000 135 654 924 340 275 314 649 31% 65%

Parks 544 951 158 677 45 686 112 991 21% 29%

Island Holiday Resort 519 035 286 915 123 038 163 876 32% 55%

Swimming Pools 224 307 47 240 4 934 42 305 19% 21%

Sport Grounds 120 590 67 117 27 909 39 208 33% 56%

Cemetries 161 783 70 284 18 369 51 915 32% 43%

Electricity Administration 43 873 9 977 2 232 7 745 18% 23%

Electricity Maintenance 332 544 206 599 88 897 117 702 35% 62%

Electricity Distribution 649 575 524 703 254 855 269 848 42% 81%

Water Production 929 499 559 391 277 780 281 612 30% 60%

Water Distribution 1 871 994 1 164 983 608 408 556 576 30% 62%

Client Services 1 139 – – – 0% 0%

Community Services and Overtime – 129 932 38 972 90 961 100% 100%

Sundry Donations / Projects – 10 409 2 143 8 266 100% 100%

Parks: Temporary Workers 17 325 – – – 0% 0%

Paving Projects – 4 480 – 4 480 100% 100%

LED - Temporary Workers – 2 793 – 2 793 100% 100%

Refuse Removal - Temporary – 194 338 194 338 – 100% 100%

– 100% 100%

TOTAL OVERTIME 13 760 665 7 874 039 3 775 560 4 098 480 30% 57%

OVERTIME FOR QUARTER 2 ENDED 31 DECEMBER 2016


Section 4 – Service Delivery Performance

Performance Evaluations Portfolio Dawid Kruiper Municipality

Section 72 Mid-Year Performance Assessment Report for 2016/2017

27


The SDBIP for 2016/2017

The Service Delivery and Budget Implementation plan (SDBIP) is a management, implementation and monitoring tool that will assist the

Mayor, Councillors, Municipal Manager and Administration that will secure proper service delivery to the community. Therefore the SDBIP set

goals and objectives through the Council in respect of quantifiable outcomes.

The definition of an SDBIP in accordance with the MFMA 56 of 2003:

“a detailed plan approved by the Mayor of a municipality in terms of section 53(1)(c)(ii) for implementing the municipality’s delivery of services

and the execution of its annual budget and which must include the following:

(a) projections of each month of-

(i) revenue to be collected, by source: and

(ii) operational and capital expenditure, by vote:

(b) service delivery targets and performance indicators for each quarter.”

With reference to the Municipal Finance Management Act (MFMA) 56 of 2003 Section 72(1):

“The accounting officer of a municipality must by 25 January of each year –

a) assess the performance of the municipality during the first half of the financial year, taking into account –

i. ....

ii. the municipality’s service delivery performance during the first half of the financial year, and the service delivery targets and

performance indicators set in the service delivery and budget implementation plan;

iii. ....

iv. ....

b) Submit a report on such an assessment to –

i. the mayor of the municipality;

ii. the National Treasury; and

iii. the relevant provincial treasury.”

28


TOP LEVEL SDBIP – PERFORMANCE KEY PERFORMANCE INDICATORS

MFMA Circular 13 states that “The SDBIP is a layered plan, with the top layer of the plan dealing with consolidated service delivery targets and

in-year deadlines, and linking such targets to top management. Diagram 1 shows how only the tip of the pyramid is

published as the SDBIP.

Once the top-layer targets are set, the top management is then expected to develop the next(lower) layer of detail of the SDBIP,

by providing more detail on each output for which they are responsible for, and breaking up such outputs into smaller outputs and

linking these to each middle-level and junior manager. Much of this lower layer detail will not be made public nor tabled in council

– whilst the municipal manager has access to such lower layer detail of the SDBIP, it will largely only be the senior manager in

charge who will be using such detail to hold middle-level and junior-level managers responsible for various components of the

service delivery plan and targets of the municipality.

Only the highest layer of information of the SDBIP will be made public or tabled in the council. Such high-level information should

also include per ward information, particularly for key expenditure items on capital projects and service delivery – this will enable

each ward councillor and ward committee to oversee service delivery in their ward.

Published 2016/2017

SDBIP

Top Layer

Lower Layers

SDBIP

Supporting Documentation

(per Directorate)

29


Rating Scales

Outstanding

performance 5

Performance far exceeds the standard expected of an employee

at this level. The appraisal indicates that the employee has

achieved above fully effective results against all performance

criteria and indicators as specified in the PA, performance plan

and maintained this in all areas of responsibility.

Performance

significantly above

expectation

4

Performance is significantly higher than the standard expected in

the job. The appraisal indicates that the employee has achieved

above fully effective results against more than half of the

performance criteria and indicators and fully achieved all others.

Fully effective 3

Performance fully meets the standards expected in all areas of

the job. The appraisal indicates that the employee has fully

achieved effective results against all significant performance

criteria and indicators as specified in the PA and performance

plan.

Performance not

fully effective 2

Performance is below the standard required for the job in key

areas. Performance meets some of the standards expected for the

job. The review/assessment indicates that the employee has

achieved below fully effective results against more than half the

key performance criteria and indicators as specified in the PA

and performance plan.

Unacceptable

Performance 1

Performance does not meet the standard expected for the job.

The review/assessment indicates that the employee has achieved

below fully effective results against almost all of the

performance criteria and indicators as specified in the PA and

performance plan. The employee has failed to demonstrate the

commitment or ability to bring performance up to the level

expected in the job despite management efforts to encourage

improvement.

N/A

0

Not applicable. Indicator not measured. This rating does not

have any effect on the end result.

30


Dawid Kruiper Municipality

Quarterly Performance Report

Section 72 Mid-Year Performance Assessment Report for 2016/2017

July 2016 to December 2016

The report summarises organisational performance at Dawid Kruiper Municipality for the mid-year assessment of the 2016/2017 financial year.

31


Table of Contents

1. Introduction

2. Office of the Municipal Manager

3. Budget & Treasury Office

4. Directorate Community Services

5. Directorate Corporate Services

6. Directorate Electro – Mechanical Services

7. Directorate Planning & Development

8. Directorate Civil Engineering Services

32


1. Introduction

This report represents the first and second quarter (July 2016 – December 2016) SDBIP performance evaluations for the financial year

2016/2017.

It is portrayed in the required format as approved by Council on 28 July 2009. Evaluations were conducted during the periods 14 – 21 November

2016 and 10 - 18 January 2017.

Directorates evaluated for this period:

Office of the Municipal Manager;

Budget & Treasury Office;

Directorate Community Services;

Directorate Corporate Services;

Directorate Electro-Mechanical Services

Directorate Planning & Development

Directorate Civil Engineering Services

33


2. OFFICE OF THE MUNICIPAL MANAGER

KPI No

Indicator Target Q1 Actual Q1 Measure of Attainment Q1

Reason for Performance Q1

Remedial Action Q1

Target Q2

Actual Q2 Measure of Attainment Q2


Remedial Action Q2

Owner

1 Actual Operational expenditure / Operational Budget. 5% deviation of actual operational expenditure of departmental budget by 30 June 2017

N/A To be evaluated in quarter 4

Not Applicable

To be evaluated in quarter 4

N/A Not applicable. To be evaluated in Q4

Not Applicable

Not applicable. To be evaluated in Q4

Municipal Manager

3 PMS framework : Signed Performance Agreements for all Section 57 employees by 30 June 2017 (Financial year 2017/2018)


Not Applicable



Not Applicable


Municipal Manager

2 Actual Capital expenditure / Capital budget. 95% of capital expenditure of unallocated funds by 30 June 2017


Not Applicable



Not Applicable


Municipal Manager

4 3 year Risk based audit rolling plan and annual operational plan submitted to Audit Committee by 30 June 2017


Not Applicable



Not Applicable


Municipal Manager

5 Project clean audit: to maintain a clean audit opinion


Not Applicable



Not Applicable


Municipal Manager

34


6 Compilation and approval of Section 72 Report by 25/01/2017


Not Applicable



Not Applicable


Municipal Manager

7 Compilation and submission of Section 46 report by 31/08/2016

Compilation and submission of Section 46 report by 31/08/2016

Report compiled and submitted

Fully Effective

Report compiled and submitted

N/A Not applicable. Evaluated in Q1

Not Applicable

Not applicable. Evaluated in Q1

Municipal Manager

61 Quarterly mSCOA Risk Assessment register

Updated mSCOA Assessment risk register


Fully Effective




Fully Effective


Municipal Manager

62 Compile mSCOA risk register


Not Applicable



Not Applicable


Municipal Manager

35


3. BUDGET & TREASURY OFFICE

KPI No



Remedial Action

Target Q2



Remedial Action

Owner

8 Actual operational expenditure as a % of approved expenditure - 95%

95% (Quarterly) on a pro rata basis

104.28% Outstanding 104.28% 95% (Quarterly) on a pro rata basis

98.67% Above Expectations

98.67% Director Financial Services

9 Actual operational revenue as a % of approved revenue - 99%


160.27% Outstanding Equitable share and yearly property tax


104.40% Above Expectations

104.40% Director Financial Services

10 Quality of Annual Financial Statements and Audit File particulars. Reduction of financial related exceptions to 25 by 30/11/2016

N/A To be evaluated in Q2

Not Applicable


Reduction of financial related exceptions to 25 by 30/11/2016

18 exceptions

Above Expectations

18 exceptions

Director Financial Services

11 Compilation & submission of Annual Financial Statements - External Audit Strategy for 2016/2017 audit - MFMA compliance by 30/06/2017


Not Applicable

To be evaluated in Q4


Not Applicable



12 80% of assigned council resolutions executed by end of each quarter

80% completed

100% completed

Above Expectations

100% completed

80% completed

8 of 8 = 100% completed

Above Expectations

8 of 8 = 100% completed


36


13 Develop new Finance related policies, By-Laws and procedures - 100% updated register by 31/05/2017


Not Applicable



Not Applicable



14 Review Finance related policies, By-Laws and procedures - 100% updated register by 30/06/2017


Not Applicable



Not Applicable



15 Free Basic Services - Number of households earning less than the amount approved by Council (2x old age pension allowance per month) with access to free basic services on the financial system (indigent households)

100% July 5374; August 5596; Sept 6613 = 100%

Fully Effective

July 5374; August 5596; Sept 6613 = 100%

100% October - 6908 November - 7106 December - 7249

Fully Effective

October - 6908 November - 7106 December - 7249


16 Debtors administration - Debtors Test = (Gross Debtors / Total Revenue from Rates and Services) x 365 Days

66 days 73.84 days Not Fully Effective

Annual property tax levied payable on or before 31/10 2016

Debtors' accounts to be monitored to ensure that payments are done timeously

66 days 54993548/452245143 *365 = 44.38 days

Above Expectations

54993548/452245143 *365 = 44.38 days


37


17 Financial viability as expressed by the following ratios: (i) A=B-C/D. Where- “A” represents debt coverage. “B” represents total operating revenue received - “C” represents operating grants; “Dl’ represents debt service payments (i.e. interest + redemption) due within the financial year.


Not Applicable



Not Applicable



18 Financial viability as expressed by the following ratios: A = B+C / D Where - “A” represents cost coverage; “B” represents all available cash at a particular time; “C” represents investments; “D”re presents monthly fixed operating expenditure,


Not Applicable



Not Applicable



19 100% of FMG grants spent by 30 June 2017


Not Applicable



Not Applicable



58 Quaterly Steering committee meetings

1 Meeting No meetings held

Not Fully Effective

No meetings scheduled

Meetings should be scheduled and held

1 Meeting

Quarterly Meeting

Fully Effective

Quarterly Meeting


38


60 Compile high level mSCOA project plan


Not Applicable



Not Applicable



64 Correct asset class on the Asset Register for every asset and asignment to the mSCOA chart


Not Applicable


Complete and accurate Asset Register31/

Not completed

Unacceptable

Financial system (BIQ) not updated

System to be updated to compile asset register.


67 Final 2017/18 Budget to be mSCOA compliant


Not Applicable



Not Applicable



68 ICT infrastracture and system requirement assessment


Not Applicable


Completed assessment report

Completed Report Submitted

Fully Effective

Completed Report Submitted


39


4. DIRECTORATE COMMUNITY SERVICES

KPI No



Remedial Action Q1

Target Q2



Remedial Action Q2

Owner

20

5% deviation of actual expenditure vs departmental budget by 30 June 2017

N/A


Not Applicable


N/A


Not Applicable


Director Community Services

21

80% of assigned council resolutions executed by end of each quarter


1 of 1 = 100% executed

Above Expectations

1 of 1 = 100% executed


0 resolutions assigned

Not Applicable

0 resolutions assigned


22

100% rendering of refuse removal services as per service delivery programme per quarter


100% of refuse removal service executed

Fully Effective




Fully Effective



23 100% of LOTTO allocation spent by 30 June 2017

N/A


Not Applicable


100%

100% of LOTTO allocation spent

Fully Effective

100% of LOTTO allocation spent


40


5. DIRECTORATE CORPORATE SERVICES

KPI No



Remedial Action Q1

Target Q2



Remedial Action Q2

Owner

24 Annual Report compiled and approved by 31 March 2017


Not Applicable



Not Applicable


Director Corporate Services

25 80% of assigned council resolutions executed by end of each quarter


13 of 16=81% council resolution executed

Fully Effective

13 of 16=81% council resolution executed


23 of 26 = 88% completed - 3 in process

Fully Effective

23 of 26 = 88% completed - 3 in process


26 Policy guidance - Updated register and publishing of all policies on data storage device per quarter

Updated register and publishing of all policies on data storage device per quarter

Updated Register

Fully Effective

Updated Register

Updated register and publishing of all policies on data storage device per quarter

Updated Register

Fully Effective

Updated Register


41


27 The number of people from employment equity target groups employed in the three highest levels of management in compliance with a municipality approved employment equity plan


Not Applicable



Not Applicable



28 The percentage of a municipality salary budget actually spent on implementing its workplace skills plan


Not Applicable



Not Applicable



29 Municipal website - 3 updates per quarter

Municipal website - 3 updates per quarter

128 Updates

Outstanding More updates than target

Municipal website - 3 updates per quarter

52 Updates Outstanding More updates than target


63 Alignment of organisational structure with functions perform

Approved aligned organisational structure

Aligned organisational structure

Fully Effective

Aligned organisational structure

N/A Evaluated in Q1

Not Applicable

Evaluated in Q1


42


6. DIRECTORATE ELECTRO-MECHANICAL SERVICES

KPI No



Remedial Action Q1

Target Q2



Remedial Action Q2

Owner

30




Not Applicable



No resolutions for quarter

Not Applicable

No resolutions for quarter

Director Electrical - Mechanical Services

31

Energy Management -<10% electricity losses due to distribution per annum


Not Applicable


N/A


Not Applicable



32 Prepayment meters for new customers


Not Applicable


N/A


Not Applicable



33 Prepayment meters for Indigent customers


Not Applicable


N/A


Not Applicable



43


34

The number of full time equivelant jobs (FTEs) created through municipality’s local, economic development initiatives including capital projects


Not Applicable


N/A


Not Applicable



35 100% of INEP allocation spent by 30 June 2017


Not Applicable


N/A


Not Applicable



36 95% of CRR funds spent by 30 june 2017 (Capital projects)


Not Applicable


N/A


Not Applicable



37 100% of EEDSM allocation spent by 30 June 2017


Not Applicable


15% of allocation spent

R131578.95/R6114035.00 - 2.15% spend

Not Fully Effective

Tender process is being delayed

Tender process should be speed up so that a contractor can be appointed


44


7. DIRECTORATE PLANNING & DEVELOPMENT

KPI No



Remedial Action Q1

Target Q2



Remedial Action Q2

Owner

53

Required information submitted for compilation of Annual Report to Auditor General by 31/08/2016

Submit info by 31/08/2016

Information Submitted

Fully Effective

Information Submitted

N/A N/A Not Applicable

Evaluated in Q1

Director Planning and Development

54



No requests for quarter

Not Applicable




Not Applicable



55



Not Applicable





56 90% of DORA allocation spent by 30 June 2017


Not Applicable




45


57 95% of MIG allocation spent by 30 June 2017


43.68% of allocation spent

Fully Effective




Above Expectations



46


8. DIRECTORATE CIVIL ENGINEERING SERVICES

KPI No



Remedial Action Q1

Target Q2



Remedial Action Q2

Owner

38



Not applicable. No resolutions for Directorate for quarter

Not Applicable

Not applicable. No resolutions for Directorate for quarter


100% assigned council resolutions executed

Fully Effective

100% assigned council resolutions executed

Director Civil Engineering

39 Number of households with access to functional water service

N/A


Not Applicable





40

Number of households with access to functional sanitation service

N/A


Not Applicable





41

Sewer connections : All new sewer connections to be executed within 90 days from date of approval

All new sewer connections to be executed within 90 days from date of approval

1 of 1 completed within timeframe

Fully Effective

1 of 1 completed within timeframe

All new sewer connections to be executed within 90 days from date of approval

0 of 0 executed

Not Applicable

No requests for quarter.


47


42


N/A


Not Applicable





43

Water Connections : All new water connections to be executed within 90 days from date of approval

All new water connections to be executed within 90 days from date of approval

All request executed within 90 days

Fully Effective

All new water connections to be executed within 90 days from date of approval

All request executed within 90 days = 77.77%

Fully Effective

All request executed within 90 days = 77.77%


44 100% of EPWP allocation spent by 30 June 2017

N/a


Not Applicable




Not Fully Effective

Delays in tender procedures. Consultant will on ly be appointed in January 2017

Proper communication between department and supply chain unit to ensure that procedures are in place.


45 95% of CRR funds spent by 30 june 2017 (Capital projects)

N/A


Not Applicable





48


46 25% of RBIG allocation spent by 30 june 2017 (Capital projects)

N/A


Not Applicable





47

Ensure minimum drinking water quality standards compliant with SANS 241 : 95% of quarterly samples meeting minimum biological standards

95% 98% Above Expectations

98% 95%

98% samples meeting biological standards

Fully Effective

98% samples meeting biological standards


48

Maintenance (Cleaning) of UDS toilets - 2 times per year

N/A


Not Applicable


Maintenance (Cleaning) of UDS toilets as per planned maintenance plan

Maintenance plan not executed

Not Fully Effective

Maintenance plan not executed due to equipment not available.

Vehicles to be repair or budgeted for to ensure service delivery.


49

Rendering of vacuum tank services on request - 95% of requests executed per quarter

95% 100% executed

Fully Effective

100% executed

95% 100% executed

Above Expectations

100% executed


50

Rendering of sanitation services as per service delivery programme per quarter

Rendering of sanitation services as per service delivery

Service rendered as per programme

Fully Effective


Rendering of sanitation services as per


Fully Effective



49


programme per quarter

service delivery programme per quarter

51

Review of WSP : WSP approved and submitted by 31 December 2016

N/A


Not Applicable


Review of WSP : WSP approved and submitted by 31 December 2016

Reviewed and approved WSP

Fully Effective

Reviewed and approved WSP


52

Ensure minimum effluent quality standards compliant : 80% of samples meeting minimum biological standards quarterly

80% 77.30% Not Fully Effective

Sewerage treatment works are under capacitated

Upgrading of works

80%

85% of samples meeting biological standards

Above Expectations

85% of samples meeting biological standards



4.2 Progress on implementation of the operating expenditure and revenue budgets 2016/17

4.2.4.1 Revenue by source

Graphic of Actual Year-to-Date Operational Revenue versus Year-to-Date Budget

2015/16

Audited

Outcome

Original

Budget

Adjusted


YearTD

actual

YearTD

budget

YTD

variance

YTD

variance

Full Year

Forecast

R thousands %

Revenue By Source

Property rates 77 873 84 201 84 201 30 286 18 360 48 646 42 101 6 545 16% 84 201

Serv ice charges - electricity rev enue 242 448 267 694 267 694 65 924 70 845 136 768 133 847 2 922 2% 267 694

Serv ice charges - w ater rev enue 46 977 51 232 51 232 11 568 13 892 25 461 25 616 (156) -1% 51 232

Serv ice charges - sanitation rev enue 27 288 26 974 26 974 7 748 7 626 15 374 13 487 1 887 14% 26 974

Serv ice charges - refuse rev enue 21 398 22 144 22 144 5 853 5 669 11 522 11 072 450 4% 22 144

Rental of facilities and equipment 9 144 8 538 8 538 972 2 890 3 862 4 269 (407) -10% 8 538

Interest earned - ex ternal inv estments 1 090 600 600 347 488 835 300 535 178% 600

Interest earned - outstanding debtors 3 087 3 000 3 000 805 947 1 752 1 500 252 17% 3 000

Fines 6 800 541 541 145 154 299 271 28 10% 541

Licences and permits 1 566 1 583 1 583 440 359 799 791 7 1% 1 583

Agency serv ices 4 111 4 307 4 307 1 247 1 147 2 394 2 154 240 11% 4 307

Transfers recognised - operational 69 715 73 477 73 477 27 682 26 101 53 783 36 738 17 045 46% 73 477

Other rev enue 13 174 13 264 13 264 2 118 2 364 4 482 6 632 (2 150) -32% 13 264

Gains on disposal of PPE 3 101 18 200 18 200 3 242 5 035 8 277 9 100 (823) -9% 18 200

Total Revenue (excluding capital transfers and

contributions)

527 771 575 755 575 755 158 378 155 877 314 254 287 877 26 377 9% 575 755

NC087 Dawid Kruiper - Table C4 Monthly Budget Statement - Financial Performance (revenue and expenditure) - Mid-Year Assessment

Description

Budget Year 2016/17

–

20,000

40,000

60,000

80,000

100,000

120,000

140,000

YTD Actual

YTD Budget

Operational Revenue '000

51


4.2.4.2 Expenditure by type

Graphic of Actual Year-to-Date Operational Expenditure versus Year-to-Date Budget

2015/16

Audited

Outcome

Original

Budget

Adjusted


YearTD

actual

YearTD

budget

YTD

variance

YTD

variance

Full Year

Forecast

R thousands %

Expenditure By Type

Employ ee related costs 207 690 219 953 219 953 53 740 68 141 121 881 109 977 11 905 11% 219 953

Remuneration of councillors 7 962 8 621 8 621 2 173 2 344 4 518 4 310 207 5% 8 621

Debt impairment 21 160 5 000 5 000 – – – 2 500 (2 500) -100% 5 000

Depreciation & asset impairment 82 252 82 680 82 680 20 670 20 670 41 340 41 340 (0) 0% 82 680

Finance charges 14 658 14 978 14 978 2 202 4 554 6 756 7 489 (733) -10% 14 978

Bulk purchases 170 416 188 887 188 887 40 025 39 471 79 497 94 444 (14 947) -16% 188 887

Other materials 12 603 17 937 17 937 1 868 2 990 4 858 8 969 (4 111) -46% 17 937

Contracted serv ices 7 770 7 169 7 169 805 2 449 3 254 3 584 (330) -9% 7 169

Transfers and grants 785 110 110 63 19 82 55 27 49% 110

Other ex penditure 62 427 67 178 67 178 12 724 16 247 28 971 33 589 (4 618) -14% 67 178

Loss on disposal of PPE – – – – – – - – –

Total Expenditure 587 722 612 513 612 513 134 271 156 886 291 157 306 256 (15 100) -5% 612 513

NC087 Dawid Kruiper - Table C4 Monthly Budget Statement - Financial Performance (revenue and expenditure) - Mid-Year Assessment

Description

Budget Year 2016/17

–

20,000

40,000

60,000

80,000

100,000

120,000

YTD Actual

YTD Budget

Operational Expenditure '000

52


4.2.4.3 Projected revenue and operating expenditure

The table indicates the monthly cash flow position of the municipality. For July 2016 – December 2016 actual cash flow figures are indicated.

The table indicates the surplus / (deficit) as per cash flow per month.

NC087 Dawid Kruiper - Supporting Table SC9 Monthly Budget Statement - actuals and revised targets for cash receipts - Mid-Year Assessment

July August Sept October Nov Dec

R thousands Outcome Outcome Outcome Outcome Outcome Outcome

Cash Receipts By Source

Property rates 3 115 8 064 7 692 3 201 1 287 6 198 73 612 75 152 78 179

Serv ice charges - electricity rev enue 20 620 20 175 22 029 19 144 22 490 16 389 253 027 262 271 278 007

Serv ice charges - w ater rev enue 3 395 3 238 3 989 3 837 3 887 5 149 48 401 52 164 55 863

Serv ice charges - sanitation rev enue 2 479 2 516 2 719 2 536 2 550 2 506 33 127 32 892 35 195

Serv ice charges - refuse 1 951 1 804 2 071 1 860 1 955 1 826 29 098 31 731 34 589

Rental of facilities and equipment 255 295 422 512 549 1 829 7 467 10 369 11 283

Interest earned - ex ternal inv estments 83 119 145 148 177 164 580 636 674

Interest earned - outstanding debtors 250 271 284 290 307 350 3 000 2 544 2 697

Fines 42 48 54 40 56 59 521 457 484

Licences and permits 142 164 140 146 118 96 1 523 1 709 1 811

Agency serv ices 393 431 423 363 394 390 3 450 3 657 3 876

Transfer receipts - operating 9 272 17 990 500 1 769 688 23 696 68 135 70 948 76 844

Other rev enue 361 1 028 3 265 1 019 (244) 644 10 721 9 168 9 718

Cash Receipts by Source 42 357 56 142 43 734 34 864 34 214 59 297 532 661 553 696 589 222

Other Cash Flows by Source

Transfer receipts - capital – 208 2 811 3 933 1 277 3 394 27 043 20 326 22 151

Proceeds on disposal of PPE 341 1 279 1 622 646 4 323 67 60 932 1 211 2 011

Increase in consumer deposits 161 646 354 55 (379) 206 2 000 500 500

Receipt of non-current receiv ables 0 (3) 3 1 2 1 7 6 6

Total Cash Receipts by Source 42 859 58 272 48 525 39 498 39 437 62 966 622 644 575 739 613 890

Cash Payments by Type

Employ ee related costs 17 525 17 037 19 174 18 672 30 069 19 391 204 706 184 740 197 672

Remuneration of councillors 664 726 789 790 789 774 8 133 9 138 9 777

Interest paid 708 785 709 722 756 3 075 7 706 12 070 11 414

Bulk purchases - Electricity (2) 19 874 19 666 11 920 12 503 13 814 170 000 190 740 214 010

Bulk purchases - Water & Sew er – – 487 554 – 680 5 164 5 525 5 912

Other materials 185 765 896 1 170 783 963 16 308 19 884 21 077

Contracted serv ices 102 140 563 275 619 1 556 8 748 12 707 13 744

Grants and subsidies paid - other 26 5 33 13 6 – 21 490 23 107 24 493

General ex penses 31 845 (830) 409 16 081 3 140 (4 537) 102 964 66 615 56 451

Cash Payments by Type 51 052 38 501 42 725 50 198 48 664 35 717 545 218 524 525 554 550

Other Cash Flows/Payments by Type

Capital assets 365 3 631 4 874 1 336 3 513 3 718 51 098 22 566 24 280

Repay ment of borrow ing 968 947 1 023 1 010 1 041 1 956 16 430 10 837 7 394

Other Cash Flow s/Pay ments (3 766) (429) (359) (1 566) 2 726 (1 550) – – –

Total Cash Payments by Type 48 620 42 649 48 264 50 978 55 944 39 841 612 746 557 929 586 224

NET INCREASE/(DECREASE) IN CASH HELD (5 761) 15 623 261 (11 480) (16 507) 23 125 9 897 17 811 27 666

Cash/cash equiv alents at the month/y ear beginning: 15 667 9 906 25 529 25 790 14 310 (2 197) (4 897) 5 000 22 811

Cash/cash equiv alents at the month/y ear end: 9 906 25 529 25 790 14 310 (2 197) 20 927 5 000 22 811 50 476

Budget Year

+1 2017/18

Budget Year

+2 2018/19

Description

Budget Year

2016/17

Budget Year 2016/172016/17 Medium Term Revenue &

Expenditure Framework

53


4.2.5 Progress on the implementation of the capital program 2016/17

4.2.5.1. Projected capital expenditure reported per regulation 13(a) - 13(c)

The table reflects capital expenditure on new assets.

2015/16 Budget Year 2016/17

Audited

Outcome

Original

Budget

Adjusted


YearTD

actual

YearTD

budget

YTD

variance

YTD

variance

Full Year

Forecast

R thousands %

Capital expenditure on new assets by Asset

Class/Sub-class

Infrastructure 28 411 36 514 36 514 6 898 6 499 13 397 18 257 714 3.9% 36 514

Infrastructure - Road transport 1 819 171 171 2 193 4 148 6 341 85 (6 256) -7329.8% 171

Roads, Pavements & Bridges 1 819 171 171 2 193 4 148 6 341 85 (6 256) -7329.8% 171

Infrastructure - Electricity 19 375 16 697 16 697 4 588 1 267 5 855 8 349 2 494 29.9% 16 697

Transmission & Reticulation 19 375 16 697 16 697 4 588 1 267 5 855 8 349 2 494 29.9% 16 697

Infrastructure - Water 5 199 5 877 5 877 118 184 301 2 939 2 637 89.8% 5 877

Dams & Reservoirs 5 – 20 20 - (20) 100.0%

Reticulation 5 193 5 877 5 877 118 164 281 2 939 2 658 90.4% 5 877

Infrastructure - Sanitation 332 13 769 13 769 – 953 953 6 884 5 931 86.2% 13 769

Reticulation 332 13 769 13 769 – – – 6 884 6 884 100.0% 13 769

Sewerage purification – – 953 953 - (953) 100.0%

Infrastructure - Other 1 686 – – – (52) (52) - 52 100.0% –

Other 1 686 – (52) (52) - 52 100.0%

Community 2 674 9 119 9 119 868 1 363 2 231 4 559 2 328 51.1% 9 119

Parks & gardens 1 633 5 813 5 813 502 1 179 1 681 2 907 1 226 42.2% 5 813

Sportsfields & stadia 1 041 3 306 3 306 366 184 550 1 653 1 103 66.7% 3 306

Recreational facilities – – – – – – – – –

Heritage assets – – – – – – – – –

Investment properties – – – – – – – – –

Other assets 2 481 1 550 1 550 117 295 412 775 363 46.9% 1 550

Specialised v ehicles – – – – – – – – –

Plant & equipment 268 1 000 1 000 18 57 74 500 426 85.1% 1 000

Computers - hardw are/equipment 299 81 208 289 – (289) 100.0%

Furniture and other office equipment 870 18 31 49 – (49) 100.0%

Other Buildings 474 – – – – –

Other Land 571 – – – – –

Agricultural assets – – – – – – – – –

Biological assets – – – – – – – – –

Intangibles 30 – – – 25 25 – – –

Computers - softw are & programming 30 – 25 25 – –

Total Capital Expenditure on new assets 33 596 47 183 47 183 7 883 8 182 16 065 23 591 7 526 31.9% 47 183

Description

NC087 Dawid Kruiper - Supporting Table SC13a Monthly Budget Statement - capital expenditure on new assets by asset class - Mid-Year Assessment

54


The table reflects capital expenditure on renewal assets. This means existing assets that should have been replaced. If the capital expenditure on the renewal of assets is too high it raises concerns about whether assets are sufficiently maintained and safe guarded.

2015/16 Budget Year 2016/17

Audited

Outcome

Original

Budget

Adjusted


YearTD

actual

YearTD

budget

YTD

variance

YTD

variance

Full Year

Forecast

R thousands %

Capital expenditure on renewal of existing assets

by Asset Class/Sub-class

Infrastructure 6 353 6 747 6 747 285 212 498 3 374 2 876 85.2% 6 747

Infrastructure - Road transport 27 – – – – – – – –

Roads, Pavements & Bridges 27 – – – – –

Infrastructure - Electricity 5 688 6 164 6 164 – 132 132 3 082 2 950 95.7% 6 164

Transmission & Reticulation 5 688 6 164 6 164 – 132 132 3 082 2 950 95.7% 6 164

Infrastructure - Water 581 – – 77 48 125 - (125) 100.0% –

Reticulation 581 77 48 125 - (125) 100.0%

Infrastructure - Sanitation 57 583 583 208 33 241 292 50 17.3% 583

Reticulation 36 133 133 – – – 67 67 100.0% 133

Sewerage purification 21 450 450 208 33 241 225 (16) -7.2% 450

Infrastructure - Other – – – – – – – – – –

Community – – – 435 156 591 – (591) 100.0% –

Sportsfields & stadia – – – 435 156 591 – (591) 100.0% –

Heritage assets – – – – – – – – – –


Housing dev elopment – – – – – – – – –

Other – – – – – –

Other assets 187 15 888 15 888 267 17 284 7 944 7 660 96.4% 15 888

General v ehicles – 10 525 10 525 – – – 5 263 5 263 100.0% 10 525

Specialised v ehicles – 3 509 3 509 – – – 1 754 1 754 100.0% 3 509

Plant & equipment 2 354 354 – 3 3 177 174 98.3% 354

Computers - hardw are/equipment 99 – – 255 – 255 – (255) 100.0%

Furniture and other office equipment 80 – – 13 14 26 – (26) 100.0%

Other Buildings 6 – – – – – – –

Other – 1 500 1 500 – – – 750 750 100.0% 1 500



Intangibles – – – – – –

Total Capital Expenditure on renewal of existing

assets 6 540 22 635 22 635 987 385 1 372 11 318 9 946 87.9% 22 635

NC087 Dawid Kruiper - Supporting Table SC13b Monthly Budget Statement - capital expenditure on renewal of existing assets by asset class - Mid-Year

Assessment

Description

55


The table reflects repairs and maintenance by asset class. The norm for total repairs and maintenance as a percentage of total book value (written down value) is 5% – 8%. Dawid Kruiper Municipality‟s ratio is 0.1% due to the implementation of GRAP 17 with the higher DRC values.

4.2.5.2. Monthly budget statement tables and graphs for capital expenditure at 31 December 2016

2015/16

Audited

Outcome

Original

Budget

Adjusted


YearTD

actual

YearTD

budget

YTD

variance

YTD

variance

Full Year

Forecast

R thousands %

Repairs and maintenance expenditure by Asset

Class/Sub-class

Infrastructure 2 831 7 895 7 895 368 337 705 3 948 3 243 82.1% 7 895

Infrastructure - Road transport 735 1 032 1 032 97 61 159 516 357 100.0% 1 032

Roads, Pavements & Bridges 295 1 032 1 032 51 33 84 516 432 -6.1% 1 032

Storm water 440 46 28 74 – (74) -6.1%

Infrastructure - Electricity 982 3 201 3 201 168 70 238 1 600 1 363 85.2% 3 201

Transmission & Reticulation 982 3 201 3 201 168 70 238 1 600 1 363 85.2% 3 201

Infrastructure - Water 739 1 980 1 980 99 197 296 990 694 70.1% 1 980

Dams & Reservoirs 25 0 5 6 – (6) 100.0%

Reticulation 714 1 980 1 980 99 191 290 990 700 70.7% 1 980

Infrastructure - Sanitation 358 1 635 1 635 4 7 10 818 807 98.7% 1 635

Reticulation 355 176 176 4 6 10 88 78 88.8% 176

Sewerage purification 4 1 460 1 460 – 0 0 730 729 99.9% 1 460

Infrastructure - Other 15 48 48 – 3 3 24 21 89.0% 48

Waste Management – 38 38 – – – 19 19 100.0% 38

Other 15 10 10 – 3 3 5 2 47.4% 10

Community 228 1 486 1 486 97 75 171 743 571 76.9% 1 486

Parks & gardens 98 284 284 45 15 60 142 82 58.0% 284

Sportsfields & stadia 103 218 218 36 40 76 109 33 30.6% 218

Sw imming pools – 126 126 – – – 63 63 100.0% 126

Libraries – 38 38 – – – 19 19 100.0% 38

Recreational facilities 22 471 471 16 19 35 235 200 85.0% 471

Fire, safety & emergency – 257 257 – – – 129 129 100.0% 257

Security and policing – 40 40 – – – 20 20 100.0% 40

Clinics – 25 25 – – – 13 13 100.0% 25

Cemeteries 5 26 26 – 1 1 13 12 94.6% 26

Heritage assets – – – – – – – – –


Other assets 9 545 8 634 8 634 1 403 2 578 3 981 4 317 336 7.8% 8 634

General v ehicles 7 302 6 495 6 495 937 1 587 2 524 3 248 723 22.3% 6 495

Specialised v ehicles – – – – – – – – –

Plant & equipment 659 85 85 191 234 425 43 (382) -897.1% 85

Computers - hardw are/equipment 139 363 363 30 71 101 182 81 44.7% 363

Other Buildings 1 123 1 075 1 075 214 558 772 538 (235) -43.6% 1 075

Other 321 615 615 31 129 160 307 148 48.1% 615



Intangibles – – – – – – – – –

Total Repairs and Maintenance Expenditure 12 603 17 937 17 937 1 868 2 990 4 858 8 969 4 111 45.8% 17 937

NC087 Dawid Kruiper - Supporting Table SC13c Monthly Budget Statement - expenditure on repairs and maintenance by asset class - Mid-Year Assessment

Description

Budget Year 2016/17

56


Graphic of Actual Year-to-Date Capital Expenditure versus Year-to-Date Budget

2015/16

Audited

Outcome

Original

Budget

Adjusted

Budget

Monthly

actual

YearTD

actual

YearTD

budget

YTD

variance

YTD

variance

% spend of

Original

Budget

R thousands %

Monthly expenditure performance trend

July 15 5 818 5 818 365 365 5 818 5 453 93.7% 1%

August 797 5 818 5 818 3 631 3 996 11 636 7 640 65.7% 6%

September 2 232 5 818 5 818 4 874 8 870 17 454 8 584 49.2% 13%

October 373 5 818 5 818 1 336 10 206 23 273 13 066 56.1% 15%

Nov ember 1 129 5 818 5 818 3 513 13 719 29 091 15 372 52.8% 20%

December 720 5 818 5 818 3 718 17 437 34 909 17 472 50.1% 25%

January 427 5 818 5 818 – 17 437 40 727 23 290 57.2% 25%

February 1 396 5 818 5 818 – 17 437 46 545 29 108 62.5% 25%

March 1 446 5 818 5 818 – 17 437 52 363 34 926 66.7% 25%

April 3 588 5 818 5 818 – 17 437 58 181 40 745 70.0% 25%

May 9 185 5 818 5 818 – 17 437 64 000 46 563 72.8% 25%

June 18 827 5 818 5 818 – 17 437 69 818 52 381 75.0% 25%

Total Capital expenditure 40 136 69 818 69 818 17 437

Month

NC087 Dawid Kruiper - Supporting Table SC12 Monthly Budget Statement - capital expenditure trend - Mid-Year Assessment

Budget Year 2016/17

57


Section 5 – Progress on resolving problems identified in the 2015/16 Annual Report

5.1 Introduction

Comments made by the Auditor General in his Audit Report which have also been highlighted and/or included in the Annual Report are addressed in this section.

5.2 Shortcomings and recommendations to address shortcomings

5.2.1 Performance issues raised in the Audit Report included in the Annual Report

5.2.1.1 Predetermined Objectives

There were no material findings on the annual performance report concerning the usefulness and reliability of the information.

5.2.2 Financial issues raised in the Audit Report included in the

Annual Report

A number of issues were raised by the Auditor General in his Audit Report, which is included as an Appendix in the Annual Report.

Dawid Kruiper Municipality has compiled and submitted an Operation Clean Audit Report (OPCAR) to Council for the approval thereof. This document contains all the 2015/2016 audit queries, solutions, due dates and the responsible person who should resolve the query.

The Performance Management Unit is responsible for updating the OPCAR on a monthly basis. The report is also discussed at the monthly MPAC meeting and tabled for information to the Mayoral Committee.

Section 6 – Recommendations

6.1 Motivations

6.1.1 Adjustment Budget

As required by section 72(3) of the MFMA, an adjustments budget is needed to deal with items listed in section 28(2) of the MFMA. The adjustments budget will have to at a minimum take into account changes in the national and provincial adjustments budgets; effects of implementation of the capital programme; unforeseen and unavoidable expenditure and adjustments required as a result of the increased revenue estimates.

6.1.2 SDBIP Top Level

Revisions to the SDBIP will have to be made taking into consideration the review of performance indicators and the effects of the adjustments budget. These revisions must be approved following the approval of the adjustments budget as required by section 54(1) of the MFMA.

6.1.3 IDP

Revisions to the IDP will have to be made as a result of changed priorities of certain capital projects and the changes in ward projects which will be reflected in the adjustments budget; outcomes of the Auditor-General report and changes effected to the SDBIP.

58


RECOMMENDATION:

That:

(1) An adjustments budget for 2016/17 be prepared and approved by Council by no later than 28 February 2017;

(2) Following the approval of the adjustments budget the revised SDBIP which forms the basis of the mid-year assessments be approved by Council;

(3) Following the approval of the adjustments budget the revised IDP be approved by Council.

Dawid Kruiper Municipality Mid-Year Budget & Performance...

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