2015/2016 Annual Report This Annual Report is drafted in terms of the Local Government: Municipal Finance Management Act, 2003 (Act 56 of 2003) and the Local Government: Municipal Systems Act, 2000 (Act 32 of 2000).
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1.1 Mayors Foreword
King Sabata Dalindyebo Municipality is one of the fastest growing municipalities in South Africa and the third biggest municipality in the Eastern Cape after the two Metros Nelson Mandela Bay and Buffalo City. As a fastest growing South African municipality, King Sabata Dalindyebo Municipality faces the pressures of a modern, developing towns which are the need to overcome the divisions of the past, and having to deal with a history of inequality and the painful attendant history of separate development. They are the challenges that have resulted from decades of skewed development priorities. And today they are exacerbated by increasing urbanisation, the pressures of broader economic uncertainty and limited resources. With Mthatha town being the former capital city of the erstwhile Transkei government, people from the rural settlement move to Mthatha for better economic opportunities. The consequences of this seemingly unstoppable urbanisation are such that Mthatha is now overcrowded and continues to do so. It is my view as an Executive Mayor of King Sabata Dalindyebo Municipality that, any government must be willing to address those problems that do not appear to have ready solutions, and see them as opportunities. In so doing, the King Sabata Dalindyebo municipality has committed itself to the principles of innovation and dynamic leadership – both of which, we believe, are essential qualities that will help take us forward into the future. As the King Sabata Dalindyebo Municipality we have in the 2015/2016 financial year obtained an improved qualified audit opinion with two items, and I am confident that we will achieve better audit results in the next financial year.
It must be emphasised that building a strong primary agriculture both as Economic
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Development focus and as a feedstock for the Wild Coast SEZ is very crucial for King Sabata Dalindyebo Municipality. The use of science, data and technology (ICT is going to be a bedrock of all planning) behind every step of a value chain and hence the need to have shared platforms with product design capabilities for commodities and or including creating a think tank of value chain experts is also key, as the municipality has partnered with USAASA to ensure broadband connectivity for the entire municipal area.. The performance of the Municipality is fairly stable but need to turnaround the image and posture of the KSD Local Municipality. Improvement of the capabilities of the Municipality requires special attention to strengthening the systems and capacities of the employees including ensuring a great measure of professionalism, commitment with a brand promise. Improving the workers commitment to serve and the general culture of work to earn their benefits.
We will continue to face our challenges and actively address the issues that require attention in order to ensure that we build the best possible city for our citizens, visitors and investors. Through Municipal Infrastructure Grant, Presidential Intervention, Department of Energy and Provincial Treasury Grant funding 2015/2016 financial year saw a massive investment on infrastructure service delivery in the King Sabata Dalindyebo Municipality. In all of this, we will continue to be guided by the five key strategic pillars as reflected in our 2030 vision for King Sabata Dalindyebo Municipality. The broad vision of KSD in that of a city characterised by the following: An economy based the development of value addition of improved local primary production innovative culture, realisation of Blue economy and alternative energy potential that will reduce unemployment significantly Development of an integrated public transport including rail, bus and taxi, air freight and passenger flights Best quality utilities especially electricity provision and access with less outages. Creation of a vibrant cultural industry based ion heritage and local citizenry. Heightened focus on land use management, land administration and land tenure models that enhance economic value of rural land property
The location promotion and marketing of the city must centre on networking nationally and internationally in order to establish links that are required to develop specific industries such as health sector, tourism, Blue Economy and export of goods. Secondly the reputation and prestige of the KSD Municipality must be nurtured and will probably depend on, amongst others, in the next five years.
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Accessibility of the political leadership and administrative by citizens through a dedicated civil service. A clear business case for investment opportunities for KSD Economic potential. Quality and Aesthetic of the city scope and management of public spaces. Institutionalised Capacity for dialogue involving civil society, business, labour and government and ensure acceptance of cosmopolitanism
With respect, it is my honour and privilege to present the 2015/2016 Annual Report of King Sabata Dalindyebo municipality.
Councillor D M Zozo EXECUTIVE MAYOR
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1.2 Municipal Manager’s Overview
It is an honour to present to you the King Sabata Dalindyebo Municipality’s 2015/2016 Annual Report, which has been prepared in compliance with Section 46 of the Local Government: Municipal Systems Act No. 32 of 2000 and Sections 121 and 127(2) of the Local Government: Municipal Finance Management Act No. 56 of 2003. The 2015/2016 Annual Report is displaying positive signs of an improving Municipality which is striving to develop its administrative and governance capacity by ensuring compliance with the laws governing municipalities. King Sabata Dalindyebo Municipality has not recovered from the Land Mark case, which presented serious cash flow challenges for the municipality, threatening the future survival and the financial sustainability of King Sabata Dalindyebo Municipality. This case present an unfortunate reality of land claims which has locked all the land for future development of the municipality and thus thwarting the attainment of the Spatial Development Framework objectives. Though attempts are being made to address the above problems, availability of land for future development of King Sabata Dalindyebo Municipality remains a thorny issue.
Despite the above challenges, King Sabata Dalindyebo Municipality remains grateful of the support received through the Presidential Intervention which saw a massive investment in the
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infrastructure of the area. Provincial Treasury has as well in the 2015-2016 funded electricity and road by-passes to an amount of R300 000 000, 00 (three hundred million). These interventions have significantly changed the face of the municipality by improving better services for the communities of King Sabata Dalindyebo Municipality.
Over and above land availability problem of King Sabata Dalindyebo, the following challenges are persistent within the municipality: Cleanliness of the settlements and towns ;( Mthatha and Mqanduli) Electricity outages Water and sewer spillage Revenue collection Parking problems in town Illegal street trading Lack of resources for implementing the KSD Master Plan Lack of funding for mega projects; On-going litigation against the municipality Qualified audit opinion from Auditor-General. Administrative stability is very crucial for King Sabata Dalindyebo, as well as disciplined workforce that embraces the ethos of clean governance and effective administration. It has equally been identified as crucial to promote the brand of King Sabata Dalindyebo Municipality by forging meaningful partnerships with citizens, local business and government, the Municipality is set to address these challenges in an integrated and collective manner. Finally, I would like to record my sincere appreciation for the support received from the political leadership in Council. Administratively, I would like to thank the Executive Management Team and the entire staff of KSD for their hard work and efforts, without which the service delivery progress reported in this Annual Report would not have been possible.
M ZENZILE MUNICIPAL MANAGER
1.3 OVERVIEW OF KING SABATA DALINDYEBO LOCAL MUNICIPALITY Page 6 of 346
MUNITATA BUILDING – KSD HEAD OFFICE KSD Municipality is comprised of an area of 3027Km² is strategically located equidistant from major cities and towns namely: East London in South West, Queenstown in North West and Kokstad on North Eastern scale; all ± 200 km from KSD. It is composed of 36 wards; 9 urban and 27 rural. It is the third largest secondary Municipality in the Eastern Cape: the city of Mthatha with Mqanduli town being an integral part of King Sabata Dalindyebo Local Municipality. It has a population of almost ½m million inhabitants and 105 240 households. The population has a significantly large youth cohort of 73%. Most people converge around the urban and per 1 – urban wards. The municipality has a staff establishment of 2186 employees of which 7 are section 56 managers and the municipal manager. The vacancy rate is high at 45%. KSD Municipality is the largest contributor to OR Tambo District municipality economy (±70%) with a GDR – R of R12.1 billion. The economic base comprises Government services and community at 46%, wholesale and retail, 15% fiance and real estate, trade and services. The unemployment rate is around 38.3% and people living below poverty line has progressively declined roughly from 64 % in 1996 and 54.5 % in 2011. The literacy rate is a high 61.9% which is above the District average 51.6% . Furthermore 8.9% of the population hold first degrees and honours way above the district levels. Page 7 of 346
Access to formal dwellings rests at 60% and informal housing and traditional dwellings account for the remainder. Access to flush toilets is only 35% while pit latrines account for 51% which 14% of the population have no formal toilets facilities. In 2011, 40% of homesteads had no access to piped water, and access to electricity was at 74% with the most affected area with no access being Mqanduli area. There are approximately 150km of paved roads and 50km of gravel roads in Mthatha / Mqanduli CBD. The maintenance of the road network is grossly inadequate due to budgetary constraints. There major revitalisation of the rail line between Mthatha and East London was abruptly abandoned. All the above-mentioned activities are pressed by a compressive spatial planning to guide all decisions of the municipality relating to the use, development and planning of land. The spatial development framework identifies 4 major nodes and corridors, namely:
Mthatha Airport
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Through the Presidential Intervention, Mthatha Airport has received a major upgrade through construction of a new terminal building, car rental buildings, an expanded runway (3km’s) and new Navigational Landing Aids which make it possible for aircraft to land in bad weather, all secured by a Perimeter Fencing and all of which are fully operational. Travellers are benefiting from the R500 million Mthatha Airport revamp that has resulted in greater interest from low-cost airlines that are now flying between Mthatha and major cities. Currently, SA Airlink and Blue Crane Airlines offer flights between Johannesburg and Mthatha at cheaper and affordable rates. Runway lights are also being installed so that landings can take place at night. At the moment, nine car rental companies are operating from the airport, and a much bigger parking space will form part of the improvements.
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Qunu, the home of Nelson Mandela
Nelson Mandela”s Place, in Qunu, has since become a major Tourist attraction within the King Sabata Dalindyebo Municipality., Situated alongside the N.2 National Road, approximately 13km south of Mthatha City centre, its ease of access sustains heightened visitation even by passerbyes who noticed / knew it for the first time.
The Nelson Mandela Museum offers a memorable cultural experience that gives insights into the life of Nelson Mandela, with guided tours and a heritage trail that follow his footsteps. Cultural offerings, such as traditional dance and food, are available by arrangement. The Nelson Mandela Youth & Heritage Centre – a second component of the Nelson Mandela Museum – in the village of Qunu, where Nelson Mandela’s home is and where he spent his childhood. The museum in Qunu hosts exhibitions, tours and offers accommodation and conference facilities. The remains of young Nelson Mandela’s primary school where he started Grade One and at which the teacher, Miss Mdingane, gave him the name ‘Nelson’ on his first day of school. The remains of the old stone church where he was baptised. The granite ‘sliding’ rock he used to slide down with friends. The graveyard where his two sons, daughter and parents are buried (not controlled by the Museum). The pastures where he roamed as a young shepherd.
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Nelson Mandela’s original home in Qunu, where his mother presided over three huts. Nelson Mandela’s private home, where he entertains a steady stream of people from the neighbouring village (not controlled by the Museum) Traditional activities such as stick fighting and other indigenous games. The iThemba arts project where the arts and crafts depicting Xhosa culture are practiced, developed and packaged. The permanent exhibition of gifts and artefacts given to Nelson Mandela by the international and South African communities that are housed in the historic Bhunga Building in Mthatha. Temporary exhibitions that illuminate Nelson Mandela’s life and times are featured in the Bhunga Building on a regular basis.
Viegdesville Interchange - with N2 off-ramp to Mqanduli and Coffe Bay
One of the thorniest issues affecting KSD communities (especially Ward 32 where the N.2 / Mqanduli Interchange is located) for many years have been road accident fatalities involving mainly school children on this spot. Over the years, many meetings involving KSD councillors and officials, with communities, South African Police, Transport Departments and other stakeholders took place at the Viegdesville Multipupose Centre dealing with this thorny issue, recommendations and resolutions of which were regularly forwarded to relavent authorities. When the Presidential Intervention started in KSD, it highlited the thorny issue resulting in the prioritisation (thanks to National Dept of Transport) of the construction of the above N.2 / Mqanduli Interchange – resulting in drastically reduced road accident fatilities. At the official opening of the Interchange by the Minister of Transport, communities were very jubilant and ululating – some dismissing road accident fatalities on this spot saying, “HAMBA SATHANA” (away you evil omen) Page 11 of 346
The Intechange leads to Mqanduli - a small town which is located at 30 km south of Mthatha and 22 km north-east of Elliotdale. Mqanduli is a fast growing area which has been identified as an agricultural development corridor for King Sabata Dalindyebo Municipality. Currently Mqanduli is producing mealies which is processed to mealie-meal by Mqanduli Milling Plant. Mqanduli also boasts a Tourism Centre, a park and a Multi purpose Centre.
Coffee Bay and Hole-in-the-Wall
Coffee Bay is a small town situated on the Wild Coast of the Eastern Cape Province of South Africa. According to the Intergrated Urban Development Framework, the process in which KSD is participating, the projected urbanisation and population growth show that by 2030 the majority (70%) of our country”s citizens will be living in Cities, towns, townships and informal settlements. Mindful of this apparent and unstoppable population dynamics and that KSD does not exist in isolation from the broader community and in actual fact owes its existence to the imperative of ensuring that the socio-econmic circumstances of its citizens are improved, KSD is accelerating all fundamental essentials – politico/administrative/technico – for the realisation of a new Town in Coffee Bay, which was proclaimed per Provincial Gazette 3210 of 3 July 2014. Towards this end, and to enhance access to Coffee Bay, accelerated maintenance and upgrading of roads and small brigdes, plus provision of bulk water infrastructure has been undertaken. Provision of energy is still work-in-progress. Immense opportunities exist for the ocean economy, harbour development and water front development are being investigated within the Hole in the Wall and Coffee Bay eco-tourism preccinct of King Sabata Dalindyebo Municipality. The town development of Coffee Bay is currently championed by the Executive Mayor who is aligning it with the KSD.PI model as a Presidential Project.
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Coffee Bay Road upgrade.
Coffee Bay Bridge upgrade
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Hole in the Wall
1.3.1 KSD’S VISION 2030 SUSTAINABLE MASTER PLAN KSD’s Master Plan - a product of support by the Department of COGTA- EC – offers a common vision for the future of Mthatha and Mqanduli, and plan to achieve this by 2030. It is the outcome of 09 months of technical investigation and stakeholder engagement, but what is documented in the plan is intended to launch a continuaos process of debate and agreements on projects that can lead to improvement and greater sustainability. The Master Plan identified 280 projects which, if implemented, would lead to the desired state. KSD’s Vision 2030 Master Plan comprising the said 280 projects was officially launched by the Eastern Cape Premier, after which it was presented to various Public Sector Institutions Provincialy and Nationaly, including National Treasury and the Presidency, resulting to His Excellency President Jacob Zuma establishing a Cabinet Committee (commonly known as the Inter – Ministerial Committee) led by the Minister of Perfomance, Monitoring and Evaluation within the Presidency, to chair the Inter- Ministerial Committee (IMC), champion, overseer and monitor progress of the KSD Presidential Revitalisation Programme commonly known as KSD PI (Presidential Intervention). Accounting responsibilities to the IMC for the KSD PI are invested in the
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Technical Inter – Ministerial Committee consisting, in the main, of Director – General is under the Chairmanship of Dr. Cassius Lubisi – DG in the Presidency. The KSD Executive Mayor, in his capacity as a member of the Presidential IMC, is the Local Political Champion of the KSD PI, whilst the Municipal Manager is the Local Accounting Champion. The KSD. PI has hitherto cumulatively invested in excess of R7bn comprising R3.7bn completed projects and R3.3bn projects currently under implementation – the greatest contribution to KSD’s Vision 2030 Sustainable Master Plan. Detail of KSD PI projects can be seen on page 313 of this report. During the year under review, as part of monitoring and evaluation of the KSD. PI, which included site visits, the Potfolio Committee of the Office of the Premier under the Chairmanship of Hon. S. Gqobana visited KSD from 29 to 30 March 2016 to be updated of Programme progress, while Hon. Jeff Radebe, Chair of the IMC visited KSD on 24 June 2016 for the same purpose and also undertook site visits. After the site visits Minister Radebe addressed a community Imbizo at the OR Tambo Hall. He commended progress and the foresight of the KSD Municipality had in producing its Vision 2030, 3 years before the NDP, whose implementation is impacting very positively to the development of KSD.
Source: Demarcation Board 2011
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KSD Municipality wards increased from 35 to 36 Vision A developmental municipality that “strives for socio-economic transformation thereby improving the lives of people”. Mission King Sabata Dalindyebo will strive to be a developmental municipality that is able to provide to the best of its ability. Values Innovation Commitment to society and Participatory governance Transparency, Openness to public scrutiny and Serving Responsiveness Honesty Trust
1.3.2 Demographic and Socio-Economic Indicators
1.3.3 Population King Sabata Dalindyebo has an estimated population of about 451 710 people living in 105 240 households. This translates to a household average size of 4 people per household. Approximately 95% of households live in rural areas and village settlements. Therefore, King Sabata Dalindyebo is a rural municipality. KSD has had the biggest annul average growth rate over 10 years, (2001-2011) in the number of households in comparison to the other municipalities within the ORTDM. Ingquza PSJ Nyandeni Mhlontlo KSD O.R. EC Hill Tambo District
HOUSEHOLDS
Census 50206 28869 54365 43573 89697 266709 1481640 2001
Census 56213 31715 61647 43414 105240 298229 1687385 2011
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PERSONS
Census 254 483 146 965 274 420 202 849 416 347 1295145 6278651 2001
Census 278185 156063 290191 188070 451 710 1363518 6 562 053 2011
HOUSEHOLD SIZE
Census 4.98 5.0 5.0 5.0 4.6 4.8 4.2 2001
Census 5.0 4.9 4.7 4.3 4.3 4.6 3.9 2011
1.3.4 Population distribution
In 2011, there are 149.10 persons per square kilometre living in the King Sabata Dalindyebo Local Municipality. Comparing to the other local municipalities in the District KSD is much more densely populated as it accounts for 31% of the total population within O R Tambo District
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1.3.5 Population by Race, Gender and Age
King Sabata Dalindyebo has a very youthful population with 74% accounted for by people aged 01 to 35 years of age. This also means that the majority of the population are school goers. Given this, it will be imperative for the municipality to prioritize youth and skills development programmes. The results of the 2011 Census are depicted in the
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graph below.
The total population of the municipality was 490,207 of which 444770 are Africans while Indians, Coloureds, and Whites comprise roughly 2%. About 55% of population is female and 45% is male. This calls deliberate programmes of support to empower and engage women as one of the previously disadvantage grouping to play meaningful role in municipal and economic decision making processes. 1.3.6 Age Spread and Dependency Levels
The high numbers of young people in the KSD Municipality leads to high levels of dependency. In 2011, Census reports revealed that approximately 59.90% of the population in KSD municipality was 14 years of age and younger and 5.9% of the population was older than 65 years. According to 2011 Census results, the segment of the population in the King Sabata Dalindyebo area that could be economically active (15-64 years of age) was 59.90%, compared to other local municipalities within the O R Tambo Region. This is evident in all the local municipalities with the exception of KSD LM being the closest to the provincial figures.
Local Municipality Population Numbers % of population 15 – 64 years of age King Sabata 490,207 59.90 Dalindyebo
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Ingquza Hill 278,481 52.20 Mhlontlo 188,226 54.50 Nyandeni 290,390 54.00 Port St John's 156,136 51.80 OR Tambo District 1, 364,943 55.40 Municipality EC PROVINCE 6, 562 ,053 60.20
1.3.7 Life Expectancy (At Birth)
Though the distribution between male and female seems to be similar for the lower age groups, generally females tend to live longer and have a higher life expectancy, resulting in more females for the aggregate population.
Table : Life expectancy by gender and population group (EC)
As seen in the table above, the life expectancy for African males is 51.8 years, while African females are expected to live to 56 years. The life expectancy of the African and Asian population increased while that of the White and Coloured population remained almost constant for both males and females. 1.3.8 HIV+ and AIDS
There are many factors that affect and impact that the virus will have on population progression, namely; the adult HIV prevalence rates, speed at which the virus progresses, age distribution of the virus and the mother to child transmission and child treatment, adult treatment and finally the percentage by which having the virus will decrease total fertility. The table below indicated the number of deaths due to Aids by gender. It can be deduced from Page 20 of 346
the graph that death due to Aids is more prevalent in females than in Males.
HIV/Aids impacts heavily on the ability of the economically active group to effectively play their respective roles in the economy. An analysis of available antenatal statistics reflects that over the past decade, HIV related deaths have been on the rise. As at 2011, the total number of people infected with HIV in KSD Municipality was of 50 470 which is 11.2% of the total number in the entire District was 144 930 in 2011. The number of people infected increased at an average annual rate of 3.2% between 2005 and 2011, and in 2011 represented 11.2% of the total O.R. Tambo District Population
1.3.9 Formal and Informal Employment
In 2007 the KSD labour force (15-64) was made up of roughly 229 668 people or 53% of the total population. Of these, 28% (66 158) were employed; while only 15% (35 944) fell in the category of the unemployed. A staggering 127 566, or some 55% of the labour force was classified as not economically active. The latter is matter of grave concern
1.3.10 Functionality Literacy
KSD is depicted as being 61.9% as at 2010 in terms of literacy rate. KSD is also depicted as being 43.5% of people with matric. KSD is depicted as 8.9% with people holding BA/HON While the District is shown as 7.2%.It is clear that the level of education in the OR Tambo municipal jurisdiction is very low, with illiteracy rate standing at 20.8 % which is a huge gap in comparison to the level of people with Post graduate qualifications. An alarming number of people quit while in high school which is a cause for concern given the serious need for skills in the area.
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1.3.11 Poverty rates The percentage of people living below the poverty line has declined to 59% in 2008 from roughly 64% 13 years earlier. Similarly, the municipal HDI improved since 1995 to 0.48 in 2005 before slipping to 0.47 in 2008.
1.3.12 Development Indicators
In the Municipality the human development and poverty indicators demonstrate the highest levels and concentration of poverty in the Eastern Cape and in the country as a whole. Although the Human Development Indicator (HDI) indicates a slight improvement in the quality of life for people in the Local Municipality over the last decade, other poverty indicators point to an increase in poverty. Not only does this pose challenges to the development trajectory for the Local Municipality, but also pose critical challenges to understand why the large infrastructure and other investments over the last 15 years has had such little developmental impact. In comparison with other Local Municipalities in the District, KSDLM has the lowest levels of poverty. The table and graph below summarises the facts outlined above. Local Municipality GINI HDI Literacy Poverty Name Coefficient Rate Levels King Sabata 0.62 0.47 61.9% 54.5% Dalindyebo Ingquza Hill 0.56 0.37 43.6% 68%
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Mhlontlo 0.56 0.42 51.0% 54.0% Nyandeni 0.56 0.39 48.3% 65.5% Port St John's 0.57 0.36 37.9% 63.2% ORTD – Total 0.59 0.51 51.6% 72.2%
A disaggregation of employment by economic sector further helps to unmask the challenge of employment within the municipality. As shown in table 1.2.7, Government and the Community Services sectors accounted for the largest share (54%) of employment in 2008, followed by the Finance and Wholesale and Trade sectors which respectively accounted for 9 and 8 percentage points.
Natural Resources Major Natural Resource Relevance to Community Agriculture, Forestry and Fishing 0,8% Mining 0,3% Manufacturing Utilities 2,1% Electricity and Water 0,2% Construction 2,9% Wholesale & retail trade; catering and accommodation 7,9%
Transport & communication 1,5% Finance and business services 9,4% Community, social and other personal services 26,8% Other government and social services 9,4% General government services 17,4%
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1.3.13 Economic Indicators Varied topographical and climatic conditions in KSD (temperature climate in Mthatha sub- region and tropical in Mqanduli),Contribute to diverse agricultural potential-including wool , beef and dairy cattle, maize, vegetable Deciduous & tropical fruit, forestry and fishing, it is also a superb tourism destination. Therefore, key sectors unidentified include agriculture, forestry, fishing, tourism, construction & property development. The ravel maize value chain under development is stimulated by the Mqanduli maize milling plant. The SMME business park in Ngangelizwe is to be upscale as a business incubator for three clusters, such as, textiles, timber and steel (welding). In the same premises a SEDA construction incubator is planned to ensure that the local contractors are capacitated to assist them to climb the CIDB grading ladder. The forestry cluster includes the existing incubator – Furntech and fragmented wood entrepreneurs. In the Mqanduli area, there are a number of small gum plantations that are relatively unexploited. The vegetable cluster has the Kei Fresh Produce as the fiscal point. The total capacity of the market is R120 million, but presently reaches maximum capacity of R30 million, less than 5% of the supply originates from KSD farmers. KSD is logistically well located equidistant to surrounding major centres. It also has more than five vertical malls and centres. Therefore there is a high potential for a logistics industrial cluster.
CHAPTER 2: GOVERNANCE
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2.1 Municipal council
The Councillors you elect form a Municipal Council. This is the body that makes the by-laws and decisions for Local Government and oversees the Executive and Administration.
A municipal council has a number of different responsibilities. These include making the laws and policies, providing financial oversight, planning the budget, and hiring the Municipal Manager. It is also responsible for ensuring that the Municipal Administration fulfils its duties to the community.
The executive powers of local government are considerable and include the duty to:
monitor the municipal administration and review the performance of all aspects of local government make recommendations to council oversee provision of services to the community report annually to council on the effect of community participation and consultation in local government (s. 44(3)(g)(h) of the Municipal Structures Act).
The King Sabata Dalindyebo Municipality is a Category B municipality situated within the OR Tambo District in the Eastern Cape Province. It is the largest of the five municipalities in the district, accounting for a quarter of its geographical area. The municipality was formed before the local government elections in the year 2000, when the Mqanduli and Mthatha Transitional and Rural Councils were merged. The majority population of the municipality resides in the rural areas, where they still practice cultural tradition. King Sabata Dalindyebo Municipality still retains many of the earliest buildings of the neoclassical style that was popular during the colonial times. After the 3rd August local government elections the King Sabata Dalindyebo Municipality Council is composed of the following political parties:
ANC 46 Councillors, UDM 16 Councillors MRRA 4 Councillors DA 3 Councillors EFF 3 Councillors
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KSD Executive Mayor, Cllr D. M. Zozo
Hon. Speaker, Cllr N.R. Gcingca
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Chief Whip, Cllr S. Nyengane
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MEMBERS OF MAYORAL COMMITTEE
MMC Planning and Development, Cllr Z. Madyibi
MMC Finance, Cllr T.E. Mapekula
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MMC Infrastructure, Cllr N. Sibeko
MMC LED, Cllr G.N. Nelani
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MMC Human Settlement and Disaster, Cllr M.T. Mtirara
MMC Public Safety, Cllr T. Machaea
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MMC Community Services, Cllr N.A. Ndlela
MMC Corporate Services, Cllr L.N. Ntlonze
MMC SPU, Cllr M. Nyoka
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PR COUNCILLORS AND WARD COUNCILLORS
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Councilor Z. Nokayi Councillor Raymond Councillor N Pali Councillor M.A
(ward 20) Knock PR DA Manzolwandle
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Councillor NM Councillor B Councillor N Councillor M Nqwazi Malghas Bunzana Qotyana
Councillor S Mlotywa Councillor N.F. Councillor N.A Councillor T.G (ward 29) Mzimane Sobahle Maqoko ward 7
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Councillor Z. Councillor L.L. Cpouncillor Bara PR Councilor M Mabaso Ntliziyombi ward 26 Mkonto ward 33 Councillor Ward 4 Cllr
Councilor Malghas Councilor S. Jadiso Councilor Gogo, PR Councilor N. Ward 9 Cllr Mkhontwana
Councillor T Mcimbi Councillor J. Msakeni Councilor N.V. Roji
Councillor L.D. Liwani ward 17 ward 24 ward 10
Councilor Z. Luvatyu Councillor U.Daniso Councilor A. Ndzendze ward 14 Ward 19 Councilor M Ward 28 Mkhotheli ward 32
Councillor C. Councilor N. Diblokwe Councilor Z.M Gusana Councilor X.M. S.Tokwana ward 18 Mbongwana ward 31 ward 21 ward 16 Page 33 of 346
Councillor N. Councillor E.M. Fileyo Councillor N. Councillor A. Mgquba Ngqongwa PR Cllr ward 25 Nyangani PR Cllr ward PR Cllr.
Councilor Z.D. Kutu Councillor J. Voko Councillor M. Mrwebi Councillor K.W. Tsipa ward 03 ward 01 ward 23 PR Cllr
Councillor S. Mhlaba Councillor O. Khotso Councillor T.Mngoma Councillor M.D.Theti ward 27 Ward 22 PR Cllr ward 35
Councillor N. Councillor W.V. Sanda Councillor M.Menzelwa Councillor T.BhovaPage PR 34 of 346 Gcinindawo PR Cllr ward 11 PR Cllr. Cllr.
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Councillor M. W. Councillor S. Councillor B. Babile Malotana PR Sikrenya ward 34 PR Councillor Councillor
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2.2 Council committees
Each Municipal Council will appoint Standing Committees elected from among its members. Usually these include a Finance Committee; Community Services committees, Infrastructure; Corporate Services; and Spatial and Economic Development Committees. The councillor responsible for each department of municipality is called the Portfolio Head. Other important committees include the Oversight Committee and the Ethics Committee that deals with Code of Conduct matters. The KSD municipality is composed of the following Section 80 Committees:
2.2.1 COMMUNITY SERVICES
Cllr N.A. NDLELA -CHAIRPERSON Cllr. S. Mlotywa
Cllr. J. Voko
Cllr. V.N.Roji
Cllr. Z. Luvatyu
Cllr. M. Qotyana
Cllr. L.L.Mkonto
Cllr. N. Mkontwana
Cllr. G.N. Lusu
Cllr. L.M Luwaca
Cllr. N. M. Nqwazi
Cllr. B.D Bara
Cllr. A. Mgquba
Nkosi T.M.Sandile
Nkosi S.N.Mgolombane
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2.2.2 PUBLIC SAFETY AND TRAFFIC MANAGEMENT Cllr: R.T.G. MACHAEA- CHAIRPERSON Cllr. M.Mkoteli
Cllr. N.Nyangani
Cllr. O. khotso
Cllr. S. Mhlaba
Cllr. N. Diblokwe
Cllr. M.A. Manzolwandle
Cllr. A. Babile
Cllr. W.V Sanda
Cllr. T. Mngoma
Nkosi G.V Ndevu
Nkosi Z. Mjanyelwa
2.2.3 BUDGET & TREASURY
Cllr E.T. MAPEKULA -CHAIRPERSON Cllr. M. Mabaso Cllr. Z. Nokayi Cllr. B. Bikani Cllr. D.M. Teti Cllr. U.N.V. Malgas Cllr. M. Menzelwa Cllr. T. Maqoko Cllr. B. Malghas Cllr. K.W Tsipa Cllr. M. Bunzana Cllr. R. Knock Cllr. N.M Nqwazi Cllr. M. Sitshwala Nkosi E. S. Tswina 2.2.4 RURAL & ECONOMIC DEVELOPMENT Page 37 of 346
Cllr G.N.NELANI- CHAIRPERSON Cllr. N. A. Sobahle Cllr. A. Ndzendze Cllr. Z. Ntliziyombi Cllr. Z.M. Gusana Cllr. M. Menzelwa Cllr. N. Gcinindawo Cllr. J. Msakeni Cllr. B. Malghas Cllr. M. Sitshwala Cllr. L.D Liwani Cllr. B.B Gqweta Cllr. M. Mrwebi
2.2.5 HUMAN SETTLEMENT & DISASTER MANAGEMENT
Cllr T.M.MTIRARA- CHAIRPERSON Cllr. L.L. Mkonto Cllr. M. Mkotheli Cllr. X. M Mbongwana Cllr. S. Sikrenya Cllr. S. Mlotywa Cllr. N. Ngqongwa Cllr. M.A Manzolwandle Cllr. L.D Liwani Cllr. N.F Mzimane Cllr. T. Bhova Cllr. A. Mgquba Nkosi T.Mtwa Nkosi Z. Momoza
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2.2.6 CORPORATE SERVICES
Cllr L.N. NTLONZE-CHAIRPERSON Cllr. S.D. Jadiso Cllr. Z.M. Gusana Cllr. N. Mkontwana Cllr. T.E. Mcimbi Cllr. U. Daniso Cllr.C.S. Tokwana Cllr. X. M. Mbongwana Cllr. M.W.Malotana Cllr. M. Mpangele Cllr. B. Ndlobongela Cllr. R. Knock Cllr. T. Mngoma Nkosi L.J. Dalibango
2.2.7 INFRASTRUCTURE
Cllr N.SIBEKO- CHAIRPERSON Cllr. Z.M. Gusana Cllr. M. Mabaso Cllr. V.N. Roji Cllr. U. Daniso Cllr. Z. Nokayi Cllr. E.M. Fileyo Cllr. A. Ndzendze Cllr. B. Malghas Cllr. R. Knock Cllr. M. Gogo Cllr.L.P Zuma Cllr N. Nyangani Cllr. M. Sitshwala Nkosi M. Pongomile
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2.2.8 . PLANNING, RESEARCH & IGR Cllr Z. MADYIBI- CHAIRPERSON Cllr. U.N.V Malgas Cllr. S.D Jadiso Cllr. C.S. Tokwana Cllr. T. E. Mcimbi Cllr. Z. Ntliziyombi Cllr. J. Voko Cllr. O. Khotso Cllr. M.W. Malotana Cllr. N.Mtwa Cllr. N. Pali Cllr. A. Mgquba Nkosi N.R Mandela – Perry
2.2.9 SPECIAL PROGRAMMES & SOCIAL SERVICE Cllr M. NYOKA- CHAIRPESON Cllr. Z.D. Kutu Cllr.T.G Maqoko Cllr. Z. Luvatyu Cllr. C.S. Tokwana Cllr. S. Mhlaba Cllr. S. Sikrenya Cllr. E.M. Fileyo Cllr. G.N. Lusu Cllr. B. D. Bara Cllr. L. P. Zuma Cllr .M. Sitshwala Nkosi N.N.G Maxwele Nkosi M. Ngonyama
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2.2.10 MUNICIPAL PUBLIC ACCOUNT COMMITTEE
The purpose of the Municipal Public Accounts Committee is to strengthen the oversight arrangements in the municipality and to ensure the efficient and effective use of municipal resources.
The Municipal Public Accounts Committee is established in terms of Section 79 of the Municipal Structures Act. The Committee performs an oversight function and will accordingly not take decisions on the part of any other Committee established by the Council. The following members of the MPAC were elected by KSD municipal council:
Initial and Surname Designation 1. Cllr T. Maqoko Chairperson 2. Cllr A. Ndzendze Member 3. Cllr M. Mkhoteli Member 4. Cllr Z. Ntliziyombi Member 5. Cllr S. Mlotywa Member 6. Cllr N. Diblokwe Member 7. Cllr B. Malghas Member 8. Cllr A. Mgquba Member 9. Cllr R. Knock Member 10. Cllr N.F. Mzimane Member 11. Chief S.E. Tswina Member
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2.2.11 PETITIONS AND PUBLIC PARTICIPATION COMMITTEE
King Sabata Municipality seeks to clarity and guide the process of common and uniform approach in dealing with petitions and public participation in the province. The main objectives of the Committee are as follows:
To develop a petitions framework with the aim of harmonizing the petition system in the municipality. To share experiences and challenges emanating from the participation of Traditional Leaders in Municipal Councils. To share the understanding of Public Participation and Petitions process with all spheres of government. To develop a common approach in dealing with Public Participation with other spheres of government. To ensure that there is no clash of roles between Mayors’ and Speakers’ offices with respect to management of petitions and conduct of public participation. The Committee is composed by the following members:
Name and Surname Designation 1. Cllr S. Jadiso Chairperson 2. Cllr X.M. Mbongwana Member 3. Cllr D.M. Teti Member 4. Cllr Z. Luvantyu Member 5. Cllr Z.D. Kutu Member 6. Cllr M. Sitshwala Member 7. Cllr M.A. Manzolwandle Member 8. Cllr B. Bara Member 9. Chief Z.N. Momoza Member
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2.2.12 RULES COMMITTEE
Name and Surname Designation 1. Speaker - Cllr N.R. Gcingca Chairperson 2. Cllr M. Menzelwa Member 3. Cllr M. Qotyana Member 4. Cllr J. Voko Member 5. Cllr C.S. Tokwana Member 6. Cllr Z. Nokayi Member 7. Cllr B. Bikani Member 8. Cllr M.W. Malotana Member 9. Cllr M. Sitshwala Member 10. Cllr L.D. Liwani Member 11. Cllr K.W. Tsipa Member 12. Cllr B.B. Gqweta Member 13. Chief T.M. Sandile Member
2.2.13 ETHICS AND MEMBERS’ INTEREST COMMITTEE
Name and Surname Designation 1. Cllr N. Nyangani Chairperson 2. Cllr O. Khotso Member 3. Cllr U. Daniso Member 4. Cllr L.L. Mkhonto Member 5. Cllr N. Mkhontwana Member 6. Cllr M. Mabaso Member 7. Cllr T. Mngoma Member 8. Cllr M.A. Manzolwandle Member 9. Cllr R. Knock Member 10. Chief T. Mtwa Member
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2.2.14 WOMEN’S CAUCUS
Name and Surname Designation 1. Cllr N. Sobahle Chairperson 2. Cllr V.N. Roji Member 3. Cllr Z. Nokayi Member 4. Cllr N. Mkontwana Member 5. Cllr T. Mcimbi Member 6. Cllr Z. Luvantyu Member 7. Cllr N.F. Mzimane Member 8. Cllr G.N. Lusu Member 9. Cllr L.D. Liwani Member 10. Cllr T. Mgquba Member 10. Chief N. Maxwele Member
2.2.15 List of ward and PR councillors of KSD municipality
Cllr G.N. Nelani MMC – LED (Ward 05) FULL-TIME
Cllr M. Nyoka MMC – SPU (Ward 36) PART– TIME
Cllr N. Sibeko MMC – INFRASTRUCTURE (Ward 13) FULL-TIME Cllr Z. Madyibi MMC – Planning and Development PART-TIME
Cllr. L.N. Ntlonze MMC – Corporate Services FULL-TIME
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Cllr. M.T. Mtirara MMC – Human Settlement and Disaster FULL-TIME Cllr. N.A. Ndlela MMC – Community Services FULL-TIME
Cllr T. Machaea MMC – Public Safety (Ward 6) FULL-TIME Cllr. T.E. Mapekula MMC – Finance (Ward 8) FULL-TIME
Cllr. J. Voko Ward Councillor 01
Cllr Z.D. Kutu Ward Councillor 03
Cllr M. Mabaso Ward Councillor 04 Cllr .T.G. Maqoko Ward Councillor 07 Cllr S. Jadiso Ward Councillor 09 Cllr. V.N. Roji Ward Councillor 10
Cllr. M. Menzelwa Ward Councillor 11
Cllr. M. Qotyana Ward Councillor 12 Cllr. Z. Luvantyu Ward Councillor 14
Cllr N. Mkontwana Ward Councillor 15 Cllr. Z.M. Gusana Ward Councillor 16
Cllr T. Mcimbi Ward Councillor 17
Cllr. C.S. Tokwana Ward Councillor 18
Cllr. U. Daniso Ward Councillor 19 Cllr Z. Nokayi Ward Councillor 20
Cllr N. Diblokwe Ward Councillor 21 Cllr O. Khotso Ward Councillor 22 Cllr M. Mrwebi Ward Councillor 23 Cllr M.J. Msakeni Ward Councillor 24
Cllr E. M. Fileyo Ward Councillor 25
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Cllr. Z. Ntliziyombi Ward Councillor 26 Cllr. S. Mhlaba Ward Councillor 27 Cllr A. Ndzendze Ward Councillor 28
Cllr .S. Mlotywa Ward Councillor 29 Cllr. B. Bikani Ward Councillor 30
Cllr X.M. Mbongwana Ward Councillor 31 Cllr. M. Mkhotheli Ward Councillor 32
Cllr L. Mkonto Ward Councillor 33 Cllr. S. Sikrenya Ward Councillor 34
Cllr M.D. Teti Ward Councillor 35
Cllr L. D. Liwani PR Councillor
Cllr B. Bara PR Councillor
Cllr N. Gcinindawo PR Councillor Cllr. B. Ndlobongela PR Councillor Cllr B. Babile PR Councillor
Cllr T. Mngoma PR Councillor Cllr. T. Bhova PR Councillor
Cllr. M. Bunzana PR Councillor
Cllr. G.N. Lusu PR Councillor Cllr. N.F. Mzimane PR Councillor
Cllr M. W. Malotana PR Councillor Cllr B. B. Gqwetha PR Councillor Cllr K.W. Tsipa PR Councillor Cllr. M. Gogo PR Councillor
Cllr. N. Ngqongwa PR Councillor
Cllr. N. Pali PR Councillor
Cllr. N. Nyangani PR Councillor Page 46 of 346
Cllr. M. Mpangele PR Councillor
Cllr. W.V. Sanda PR Councillor
Cllr. R. Knock PR Councillor Cllr. A. Mgquba PR Councillor
Cllr. L.M. Luwaca PR Councillor
Cllr. U.N.V. Malghas PR Councillor
Cllr. N.M. Nqwazi PR Councillor
Cllr. M. Sitshwala PR Councillor Cllr N. Mtwa PR Councillor Cllr. N.A. Sobahle PR Councillor Cllr. L.P. Zuma PR Councillor Cllr. M.A. PR Councillor Manzolwandle Cllr. B. Malghas PR Councillor
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2.2.16 SUPPLY CHAIN COMMITTEES: The following Committees dealing with Supply Chain exist and are operational
Specification Committee
Bid Evaluation Committee
Bid Ajdudication Committee
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2.3 PUBLIC PARTICIPATION
One of the main features of the IDP Process is the involvement of the community and stakeholder organization in the process as well as participation of affected and interested parties to ensure that the IDP addresses the real issues that are experienced by the citizens of the municipality. 2.3.1 Public Participation Principles
In order to ensure public participation, Chapter 4 (Sec 17 to 22) of the Municipal Systems Act requires the municipality to create appropriate conditions that will enable participation as a minimum requirement. The elected Council is the ultimate decision-making body on IDP s The role of participatory democracy is to inform stakeholders and negotiate with them on issues of development planning To give stakeholders an opportunity to provide input on decisions taken by Council This should be done in particular with regard to disadvantaged and marginalized groups
2.3.2 Structured Participation
A structured public process followed is depicted in the diagram below: Participating Structures in the IDP Process
It is critical for the municipality to embark on a ward based approach in order to reach the vast majority of the community and document their needs and aspirations. Use of ward to ward community IDP Outreach. Existing public participation structures were utilised, for example the existing Representative Forum The residents and stakeholders were informed of the Municipalities intention to embark on the IDP Process Appropriate forms of media are utilised to ensure that all members of the community are notified of progress of the IDP as well as planned meetings The Municipality website is also utilised to communicate and inform the community. Copies of the IDP and Budget are uploaded on the website. All relevant community and stakeholder organizations are invited to register as members of the IDP representative Forum An appropriate language and accessible venues are used to allow all stakeholders to Page 49 of 346
freely participate The IDP Rep Forum meetings are scheduled so as to accommodate the majority of members The Community and Stakeholders representatives are further given adequate time to conduct meetings or workshop with the groups they represent Copies of the final IDP documents adopted by Council are accessible for all communities and stakeholders with adequate time provided to comment Council meetings regarding the approval of IDP are made open to the public IDP Outreach meetings are called and communicated with the Traditional Leaders and the bigger community.
One of the major challenges is the lack of participation of sector departments; as a result the municipality had a meeting focusing on strengthening the IGR Forum. The participation of government departments have improved but it needs a concerted effort to ensure that it is honoured by all stakeholders.
2.3.3 Public Participation Process
Public participation was encouraged throughout the IDP process, to empower communities and harness vibrant democratic culture within the decision making processes of the municipality. Public participation was promoted in the following manner:-
Use of the IDP Representative Forum to afford participants an opportunity to contribute to the process and share the views of their communities Use of the IDP steering committee to debate technical solutions, even though participation was found to be weak in some instances. The need to intensify the IGR structure cannot be overemphasized. Traditional Leaders, Ward Councillors, Community Development Workers and Ward Committees who convene meetings to keep communities informed on the IDP progress as well as conveying community needs to the IDP process. Newspaper advertisements to inform communities of the key steps in the process. Making the IDP available for public comment and once adopted making the IDP document accessible to all members of the public Appropriate language usage including Xhosa, in the IDP meetings. The management of the high levels of illiteracy in the community through facilitation, simple linguistics and explanations in mass meetings which ensured that people understand the process and are empowered to participate in the IDP process.
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2.3.4 Legislative Framework
The Constitution of the Republic of South Africa regulates and directs the operations and existence of the local sphere of government. Section 152 of the Constitution clearly sets out the objects of local government. A municipality must strive to achieve the following objects:- To provide democratic and accountable government for local communities; To ensure the provision of services to communities in a sustainable manner; To promote social and economic development; To promote a safe and healthy environment and; To encourage the involvement of communities and community organization in matters of local government.
Section 153 of the Constitution also stipulates that a municipality must:- Structure and manage its administration and budgeting and planning process to give priority to basic needs of the community and to promote the social and economic development of the community; and Participate in national and provincial development programmes.
Section 25 of the Local Government Municipal Systems Act 32 of 2000, amended 2009 (MSA) stipulates that each municipal council must, after the start of its elected term, adopt a single, inclusive and strategic plan for the development of the municipality which links, integrates and co-ordinates plans and takes into account proposals for the development of the municipality and which aligns the resources and capacity of the municipality with the implementation of the plan. The IDP should form the policy framework and general basis by which annual budgets must be based on and should be compatible with the national and provincial development plans and planning requirements. Section 26 of the Municipal Systems Act, 2000 prescribes the following peremptory components that an IDP must reflect on:- The municipal Council’s vision including the municipal critical development and transformation needs; An assessment of existing level of development in the municipality; The Council’s developmental priorities and objectives including its local economic development aims; The Council’s developmental strategies which must be aligned to national and provincial sector plans; A spatial development framework which must include the provisions of basic guidelines for a land use management system; The Council’s operational strategies;
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A financial plan; which must include a budget projection for the next three years; and The key performance indicators and performance targets determined in terms of section 41.of the MSA 34 of 2000
The Municipal Planning and Performance Management Regulations (2001) sets out the following further requirements for and IDP: An institutional framework for implementation of the IDP and to address the municipality’s internal transformation;
Investment initiatives must be clarified;
Development initiatives including infrastructure, physical social and institutional development; and
All known projects, plans and programmes to be implemented within the municipality by any organ of state.
The Municipal Finance Management Act 56 of 2003 (MFMA) provides for closer alignment between the annual budget and the compilation of the IDP.
2.3.5 Inter-Governmental Planning
Section 41(1) of the Constitution contains the principles of co-operative government and inter- governmental relations. Accordingly Section 41(1) determines that:
All spheres of government and all organs of state within each sphere must:– preserve the peace, national unity and the indivisibility of the Republic;
secure the well-being of the people of the Republic;
provide effective, transparent, accountable and coherent government for the Republic as a whole;
be loyal to the Constitution, the Republic and its people;
respect the constitutional status, institutions, powers and functions of government in the other spheres;
not assume any power or function except those conferred on them in terms of the Constitution;
exercise their powers and perform their functions in a manner that does not encroach on the geographical, functional or institutional integrity of government in another sphere; and Page 52 of 346
co-operate with one another in mutual trust and good faith by:- fostering friendly relations;
Assisting and supporting one another;
Informing one another of, and consulting one another on, matters of common interest;
Coordinating their actions and legislation with one another; adhering to agreed procedures; and
Avoiding legal proceedings against one another.
In essence “intergovernmental relations” means relationships that arise between different spheres of governments or between organs of state from different governments in the conduct of their affairs. The Constitution states that the three spheres of government are distinctive, inter-dependent and inter-related. They are autonomous, but exist in a unitary South Africa and have to cooperate on decision-making and must co- ordinate budgets, policies and activities, particularly for those functions that cut across the spheres. Cooperative governance means that national, provincial and local government should work together to provide citizens with a comprehensive package of services. They have to assist and support each other, share information and coordinate their efforts. Implementation of policies and government programmes particularly require close cooperation between the three spheres of government.
A number of policies, strategies and development indicators have been developed in line with the prescriptions of legislation to ensure that all government activities are aimed at meeting the developmental needs expressed at the local government level.
This section outlines the national and provincial policy directives, sector plans and legislation that set the strategic direction and with which local government must align to ensure that government spending is aligned to the more pressing needs of communities and those that make the economy to grow.
The IDP of KSD Municipality is guided and aligned but not limited to the following:
The Millennium Development Goals (MDGs)
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The National Development Plan (Vision 2030)
The Provincial Development Plan (PDP)
Back to Basics Programme (principles)
OR Tambo District Municipality-IDP
Local Government Turn-around Strategy
King Sabata Dalindyebo is entrusted with the responsibility to ensure that services do reach their intended recipients in a manner that uplifts human dignity. Amongst the responsibility of the Speaker is conducting visits to all communities within the jurisdiction of the municipality to listen and address the issues that cause dissatisfaction therein. The Speaker issued out invitations to all government departments to be part of the Speaker’s Public Participation Outreach Programme so as to get first-hand information from the people and go back to find lasting solutions. Though there were a few glitches here and there, it is important to mention that the departments that attended the Public Participation outreach were prepared with statistics, upcoming programmes / projects, current and completed projects. King Sabata Dalindyebo Municipality comprises of Mthatha and Mqanduli with a total of 36 wards, 25 of which are rural. Geographically, it covers 3092 sq metres. The area prides itself with natural flaura and fauna and vast arable land. The outreach programme is done for both Mthatha and Mqanduli. During the visits, it transpired that there are cross-cutting issues that need attention by various departments. The issue of access roads, unavailability of consumable water, poor state of dipping tanks, livestock improvement through provision of rams and bulls, housing, and many other matters that demoralize our eager communities. These sessions serve as an enabler for all stakeholders to evaluate their own effectiveness in rendering services to the people and improving where necessary. It goes without saying that government at all levels is providing the necessary support but there is still room for improvement on the part of implementers. During the public participation in various wards the following issues emerged:
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DEPARTMENT ISSUES RAISED / CHALLENGES WARD /AREA
DRDAR Shearing sheds, Dipping Tanks, Livestock Ward 21 – improvement, Rams, Ploughing implements, Dams, Kwenxura Fencing of fields, capacitation of extension officers Request for a dipping tank at Maphuzi – Mathuku
village
Spread of foreign plant (Ubuqholo) which poses danger to livestock grazing in the area.
Renovations of the dipping tank at Upper Mpako, a Ward 25- dipping tank is requested at Ntsitshana and Manangeni Ngcwangub
a A/A No shearing shed at Ngojini. Masiye Mafama organization struggles to pack their wool for the market.
Request fencing and reinforcement of wire of ploughing fields Quality of dipping chemicals as livestock often comes back with diseases. Phakamisa Darabe request assistance with feed lots, storage facilities on site and a dipping tank Krakra Maize meal producers request a Bull and
implements No ploughing implements at Dulini Ward 23- Fields remain unused at Dulini Darabe A/A Community of Cacadu requests vegetable seedlings, fencing of ploughing fields to enable ploughing Nenga community needs assistance with cultivation of mielie fields Ncedoluhle wool farmers request a shearing shed and
currently have blocks only. Nenga community requests water tanks to assist in irrigation of fields Refurbishment of the dipping tank Siqikini community is in need of a dipping tank Oxen, Rams and shearing sheds to assist the community No grazing land
Implements are requested by farmers Community request that the promises made by Minister Ntuli during her visit be followed up on and implemented
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Community in need of assistance in cultivating their fields Ward 24 - and be able to produce maize for their poultry projects Nenga A/A Request for assistance to cultivate fields
Oxen, livestock, and seedlings are requested by the Ngqwara community Manzothweni community requested Rams, sheep shearing sheds, and scissors Mazizini / Manqondo raised a concern over their dilapidated dipping tank which needs major renovations Ward 26- as it was constructed in 1905. Hlabatshane The community requested Bulls for livestock A/A improvement Qokolweni community requested seedlings Ncolo community requests tractors, fencing of ploughing fields and any other relevant support Work done by extension officers was commended No dams at Ngcanasini A request for fencing of ploughing fields was made Bulls and Rams were requested to improve livestock The community requested 2 tractors due to high demand which results in incomplete work. Youth employment programmes Filling of Dipping tank officers A request for safe net method of fencing to prevent sheep and goats from accessing ploughing fields at Lower Ngqungqu
Dipping tank in a dilapidated state Mahlungulu community requests fencing of ploughing fields A dipping tank that was promised in 2001 has never been done. A request for made to DRDAR in 2010 for dams at Zanci and Nkampu. An assessment was done by Mr Gcingca Ward 29- but no progress has come forth Ngqwara Corhana community requested Nguni Bulls and Rams A/A The dipping tank at Ward 26 is in a dilapidated state which puts livestock in jeopardy Request dams for livestock and irrigation of farms Request that a dipping officer at Ntlangaza be employed Community cannot afford to pay salaries of dipping tank officers as they are expected to Qhingqolo and Mxambule communities requested a dipping tank Mxambule community made a plea for a sheep shearing shed, Rams and Bulls
Job creation programmes to assist the youth in the area
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Ward 22- Lower Ngqungqu A/A
Ward 26- Ntlangaza A/A
DEPARTME Rest rooms, Playing grounds and Construction of Ward 21 – NT OF permanent structures Kwenxura EDUCATIO N Educator vacant positions are not filled at Kwaaiman J.S.S which leaves parents with the burden of having to pay some educators at a fee of 120.00 per month per child while they cannot afford such. Ward 25- Ngcwangub a A/A There is No School or even a pre-school at Ngcenduna
Requested preschool at Ngcenduna as the other school is too far The school in the area doesn’t have a kitchen to cater for the children.
No development in schools, computers in rural schools. School need security to curb vandalism therein and the last case occurred recently. Employment of Local people to provide security services at the school
Intervention is requested by the community of Lalini where Gobidolo school is based. A contract was terminated before construction of the school was completed with a promise that a new one will be brought in to finish and that never happened. Improvement of preschools in the area Scholar transport not provided at Hlabatshane Ward 23-
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No schools at Siqikini, children have to walk long Darabe A/A distances to access schools, resulting in high dropout rate. Inability of schools to readmit students who fail Grade 12 due to space constraints amongst other factors Hlabatshane J.S.S needs major renovations as it is not Ward 24- conducive to learning. Alcohol and substance abuse Nenga A/A was raised as a contributing factor to the dropout rate. At Nxele school, only one block is in a good condition, the other one used by lower grades is in a very bad state which endangers the lives of children No preschool at Tamsana and Mazizini Students from Holomisa are unable to access transport to school. They have to walk to Bhijolo to get transport which is very far. Parents from Zanci complained that they do not have a Ward high school in their area and do not afford to pay 26/27- transport and accommodation fees for their children. Hlabatshane Mxambule community had the following issues in relation to A/A the department:
Shortage of classrooms Payment of educators by the department of education as parents can’t afford to pay them. Ward 29- Employment of security guards in schools due to rising break-ins Ngqwara Consideration of stipend for SGB members A/A A request for an upgrade of the preschool at Ntlangaza Ward 22- was made. Lower No preschool at qhingqolo Ngqungqu A/A
Ward 26- Ntlangaza A/A
DEPARTME Shortage of Houses Ward 21 – NT OF Kwenxura HUMAN SETTLEME Housing disasters are not attended to. RDP houses to assist the poorest families Page 58 of 346
NTS RDP houses Ward25- Temporary structures for people who lost their homes Ngcwangub due to Thunderstorms a A/A Shortage of houses at Lower Ngqwara for the poorer families, some of which lost their homes due to floods Ward 24- Disaster at Nkwalini which result in communities leaving Nenga A/A their homes to find refuge elsewhere Process of obtaining temporary structures for destitute Ward 26- families is too long and people end up suffering Hlabatshane healthwise. A/A Orphans at Gomatana are homeless and go around the village asking for places to sleep each day Ward 29- The community of Ntlangaza requested assistance with Ngqwara rebuilding of their homes after numerous disasters that hit A/A the area
RDP Houses were raised by the community of Ntlangaza Ward 22- Lower Ngqungqu A/A
Ward 26- Ntlangaza A/A
DEPARTME Hospital for the disabled, Building of clinics, provision of ward 21 - NT OF more ambulances in rural areas, facilities for mentally Kwenxura HEALTH challenged people Clinic personnel closing before time, and people unable to get medical assistance (dispensary)
Lack of sufficient accommodation facilities at Ward 25- Ngcwanguba Clinic resulting in high staff turnover, there Ngcwangub is also a need for a clinic at Khathini a A/A The department is requested to accelerate construction
of the Phumalanga Gateway clinic as no construction work has started The community request consideration of local people when employment opportunities arise in government Request the department to conduct unannounced visits to the clinics to monitor service / performance Request extension of opening hours at Tshezi and Ward 24- Maphuzi clinics as Ngcwanguba Clinic is far. Secondly Nenga A/A the community is concerned that after 12h00 midday, they are not attended at these clinics Only one clinic services the entire Hlabatshane which
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results in patients being turned away without being assisted due to staff shortage and other factors No doctor at the Hlabatshane clinic Infants attended on certain days and turned away Ward 22- unattended sometimes. Lower Poor consultation when employment opportunities come Overgrown grass at the clinic, community requests Ngqungqu intervention from the department. A/A Community complains about the clinic at Mahlungulu which opens Monday to Thursday resulting in the community being unable to access health services In 2002 a piece of land was made available at Zanci for the construction of a clinic and a delegation visited to do sot turning but nothing has happened since then.
A clinic was promised in 1970 but never built No clinic at Mbozisa Employment of more nurses at Wilo to handle the workload as well as a mobile clinic as the ward is vast
Ward 26- Ntlangaza A/A
KSDM Construction, refurbishment & maintenance of roads, Ward 21- INFRASTR Construction of the bridge from Liwalaphakade to Kwenxura UCTURE Xhora, Pothole patching, Engagement of EPWP for road DIRECTOR maintenance, Hako bridge ATE
Refurbishment of the access road from Mntla to Mabhehana dipping tank
Ward 25- Access road to Mlawu, next to Mabhehana S.P School, Ngcwangub Road to Mabhehana, Access road to Lujiji never a A/A maintained, Access road confirmed in the KSD IDP from Mthonjeni to Thuku connecting to Mlaba still not done, Road to Ntsitshana need immediate attention Improve consultation with communities Payment of contractor (A1) prior to completing the
project A Bridge at Ntsitshana to assist the area to be accessible in all seasons Maintenance of the road from Dale across Ngcikazi Extension of the road at Chefane to go further than Komkhulu No services at Khawula since 1994
Financial abuse and poor working conditions endured by Page 60 of 346
youth working for contractors in the area
Chairs and furniture for the community hall.
Some roads are not in a good condition Bad road at Cacadu rendering the area inaccessible No community hall at Dulini Access roads at Krakra No access road at Dulini resulting in people traveling long distance to get to public transport and some drowning in the process Road to Khohlo and other access roads in a bad state Road at Nompozwana joining Skhaleni is in a dire state
No community hall at Nzulwini village Consideration of local contractors in tendering for Ward 23- services in their areas Darabe A/A Access road to Nginza school resulting in crippled schooling of learners and educators particularly on rainy days. Access roads in the villages of Hlabatshane Bridge from Sigwalini to Ngqeleni No community hall
No access road at Mampondweni and Mazizini Zwelivumile school is inaccessible due to bad roads Access road going to Mhlatyana and Ncolo not started up Ward 23- to now though it was promised in 2012 Nenga A/A Access road from Madiba to KwamNqwazi (eMabheleni) Access road to Ntimangweni and Ntlangwini No Access road at Mhlakulo
Request that the road from Qokolweni and Ngcwala be extended to Mqanduli Corhana bridge has not progressed any further, request answers An access road to the school as this results in children Ward 26- starting school older due to inability to cross the river Hlabatshane No access road to the clinic due to heavy rains A/A Ngqungqu to Sigingqini Bridge was planned for 2012 and started in 2014, but up to now, it hasn’t been completed. Consideration of Kwa-Phahla youth when employment opportunities Construction of access road to Tamsana to help school children access school
Roads and bridges are in a very bad state at Kwa-Jola, causing the community to be unable to travel to Ward 29- Ngcanasini Page 61 of 346
Community members are unable to acess public Ngqwara A/A transport are have to walk to Bhijolo due to road conditions Road from Mtengwane down to Nobathana in a very bad condition and therefore needs consideration. The bridge done by SANDF was left incomplete Mbozisa community requested an access road and a Ward 22- bridge Lower Improvement of the Access road from Notshaka as was Ngqungqu promised A/A Construction of a community Hall at Wilo Completion of the Tar road from Qokolweni to Mqanduli Road from Mthatha to Mqanduli via Ngcwala Ward 26- No access roads at Qhingqolo Ntlangaza A/A DEPARTME Slab to Gqubeni & Ngcenduna Ward 25- NT OF High rate of unemployment at Krakra (EPWP, CWP and Ngcwanguba ROADS use of local people in projects) can assist A/A AND No investment by DRPW in terms of skills development PUBLIC on youth Ward 23- WORKS No investment by DRPW in terms of skills development Darabe A/A on youth. Lack of supervision by DRPW in community projects resulting in shoddy workmanship and no induction. Construction of Qokolweni road people paid for 6 months Ward 29- only instead of 18 months Ngqwara A/A Creation of job opportunities and cease of nepotism
Ward 26- Ntlangaza A/A
DEPARTME Provision of chairs for tribal authorities, building of Ward 21 – NT OF structures therein Kwenxura TRADITIO Sob-headmen at Ngqwara request a stipend NAL Chairs to Traditional Authorities given to a chosen few Ward 29- AFFAIRS Ngqwara A/A Ward 22- Lower Ngqungqu A/A
SOUTH Provision of satellite police stations in various areas, Ward 21 – AFRICAN Fas tracking processing of cases Kwenxura POLICE SERVICE
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INDEPEND Improvement of services to the people and fair Ward 21 – ENT recruitment of people prioritizing locals Kwenxura ELECTORA L COMMISSI ON DEPARTME Water availability is a challenge Ward 21- NT OF Kwenxura WATER AFFAIRS ESKOM No electricity nor its infrastructure in place at Dokodela, Ward 25- Eblorweni, Mqhapu and Mgawusi Ngcwanguba A/A Eskom giving problems in electricity installation.
No follow up by the institution after installation of infrastructure. Ward 23 Electricity Installation at Nenga moving at a snail’s pace Darabe A/A Community requests solar power as an interim measure while electricity is still in process Electrification of the area is still a challenge, especially Siqikini Electrification of Mandlovini village very slow, contractor
not in site and handed over to ESKOM. No report as to what happened nor when will the light come on Ward 24- Xolweni community extends a request to ESKOM for Nenga A/A electrification at the new sites below Singana Electrification process incomplete at Phahla, Sigingqi Ward 26- and Corhana, meter boxes are now rotting. Only Hlabatshane Khubeka, Thenji And Lubisana were electrified though A/A they were not part of the plan. Training of local people to be able to electrify their areas Ward 29- themselves Ngqwara A/A Digging of holes and leaving them open has caused many sheep to sink and die. Contractor left without paying workers No electricity at Mahlungulu, the promise of solar power made was never fulfilled. Ward 22- Electrification of Ward 26 incomplete and poses a hazard to children as cables are just lying around Lower Finalization of electricity installation in Mxambule Ngqungqu A/A
Ward 26- Ntlangaza A/A
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SOUTH Long distance traveled by beneficiaries to collect food Ward 25- AFRICAN parcels in Mqanduli Ngcwanguba SOCIAL A/A SECURITY Food parcels are needed for immediate poverty relief AGENCY Provision of food parcels have stopped at Nompozwana Ward 23- Darabe A/A
DEPARTME Spread of foreign plant (Ubuqholo) which poses danger Ward 25- NT OF to livestock grazing in the area. Ngcwanguba ENVIRONM A/A ENTAL AFFAIRS DEPARTME Complicated systems of collecting IDs and processing of Ward 21- NT OF death related applications, Community is closer to Kwenxura HOME Elliotdale but cannot get services there and has to travel A/A AFFAIRS a long distance to Mqanduli for services Krakra community requests the department to assist in rectification of ages in their ID documents which was reduced to qualify for jobs in the Mines during the 1970s and 1980s. Ward 23- Also, that verification bureaucracy be relaxed Darabe A/A Community members complain of being treated with disrespect when they visit the department’s offices in
Mqanduli. There is blame shifting and people will be told to bear it when they need rectification of age on their ID Ward 26- documents. Hlabatshane Identity documents reflecting incorrect ages make it A/A difficult to access social grants. Rectification thereof is difficult A concern over requirements for verification of death at the department particularly old cases. Ward 22- Lower Ngqungqu A/A
DEPARTME Department applauded for its unsurpassed services all- Ward 21- NT OF round. No challenges were raised. Kwenxura SOCIAL Accessing Social grants is still a challenge DEVELOPM The community requests chairs for the traditional ENT authority Ward 23- Chairs to Traditional Authorities given to a chosen few Darabe A/A Ward 24- Nenga A/A
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Ward 22- Lower Ngqungqu a/a
KSD-PSED Request library facilities and the communities request WAard 21- assistance in registration of cooperatives Kwenxura A/A Facilitation of youth engagement and capacitation in the
Cooperatives programme as well as ongoing support for sustainability Ward 25- Support from DTI in commercializing the foreign plant of Ngcwanguba the area (Ubuqholo) A/A Phakamisa Darabe Cooperative needs financial assistance to sustain. Submission made to the DTI Community Requests relaxation of requirements by financiers like DTI and SEDA Exploitation of people by bogus consultants issuing company registration certificates that do not appear on the system The community request capacitation and ongoing support to sustain their businesses Ward 23- Job creation programmes for youth Darabe A/A Ndakana community requests seedlings Community of KwaJola requests seedlings for women projects Ward 26/27 Hlabatshane A/A Ward 29- Ngqwara A/A Ward 22- Lower Ngqungqu A/A
KSD No electricity or paraffin as registered on the KSDM Ward 26/27 MUNICIPA indigent register 5 years ago Hlabatshane LITY Irresponsible selling of alcohol to underage children A/A Disaster at Nkwalini which result in communities leaving their homes to find refuge elsewhere Beneficiation on the ward budget is politicised and biased, clarity needed by the community Ward councillor unavailable to the community when Ward 22- needed Employment opportunities for UDM members only Lower
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Ward committees working for KSDM Ngqungqu Community of KwaJola requests seedlings for women A/A projects No ward committee at KwaJola No Ward committee at Mahlungulu village No service delivery at Corhana, paraffin given in small amount to a selected few. When seedlings arrived, the same happened. Councillor refuses to account to the people Ward Councillor unavailable to assist the community (Councillor Nyoka) at Ntlangaza Ward 26- Ntlangaza A/A
DSRAC Support in sporting activities. Currently the Cacadu Ward 23- community has 2 playing grounds and need assistance in Darabe A/A establishing leagues
No sports grounds at Hlabatshane No sports grounds at Ngqwara Ward 26- 27Hlabatsha ne A/A Ward 29- Ngqwara A/A
OR TAMBO Installation of water metres, the community needs further Ward 25- DISTRICT explanation of the 200m distance between taps. Ngcwanguba MUNICIPA Nothintwa community still struggling. Those households A/A LITY along the river bank are unable to access water
Water still a challenge for the community. No toilets in some areas. Water availability is still a challenge
Water tanks not installed yet but they arrived in 2014, in all sub-headmen houses. Ward 23- Provision of water be fastracked, requesting that at least Darabe A/A 5 households be grouped in one tank. Dam used for livestock drinking, need digging of the dam in July 2015. Travel to neighbouring locations for drinking of livestock, Reinforcement of water infrastructure to avoid regular water outages Reconstruction of the toilets that have fallen to the ground and improvement of quality in materials used therein Availability of water is a challenge for the community Page 66 of 346
Siqikini has no toilets or water Qokolweni community requested water tanks and water to be able to irrigate their gardens / fields Water pipes were installed but never worked, boreholes
are also not operating and has been in that state. Roads at Ntungwana make it difficult to access the area No Bridges at Ntungwana Project of construction of toilets at Lwandlana stalled Ward 24- Community in need of water due to regular attack of Nenga A/A residents by Bilharzia Water systems were installed 15 years ago but are not running still.
Water pipes and tanks are rusty No toilets, water or development in the area Ward 26- Roads from Mbulawa to Qaukeni are in a bad state. Hlabatshane Toilets were not completed at Mancam A/A Corhana and Mahlungulu communities have no consumable water Water engine at Mbozisa not functioning and the community has no choice but to use rivers as water sources No toilets at Lwandlwana Ward 29- No water , infrastructure was started at Qhingqolo Ngqwara A/A but no progress has been made Ward 22- Community cannot access clean and consumable water Lower at Wilo and resort to rivers for their livelihoods which Ngqungqu poses a health hazard A/A Water tanks were provided at Ntlangaza but no water on site The community requests assistance with toilets
Ward 26- Ntlangaza A/A
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2.3.6 WARD TO WARD IDP/ BUDGET PROGRAMME
Date Ward Ward Population Community Officials in 5 Ward Priority Councillor members attendance Needs attended 03 November 03 Councillor 2927- 179 MMC Councillor Communit 2016 ZD Kutu Census L. Ntlonze y Hall 2011 Mr. Z Sontundu Youth 5786 - Mr. K Kata Developm Voters Mr L. Maka ent registered Mr V Poswa Programm - 2016 Mr SC Jubase es Local Miss N. Hlomza RDP elections Houses One-Stop Centre Retail Park 11 Councillor 5567- 110 MMC Roads M Menzelwa Census Councillor N. maintaina 2011 Nelani nce 5894 - MMC High mast Voters Councillor E. Lights registered Mapekula RDP - 2016 Mr. Mvunge Houses Local Miss B Madyibi Communit elections Mr. T Xalisa y Service centre (hall) LED & SPU Programs 27 Councillor 2244- 247 MMC Electrificati S Mhlaba Census Councillor on 2011 Nyoka Water – 5549- Mr. Mayekiso newly built Voters Miss N household registered Gwadiso s - 2016 Miss B Mbenya (extension Local s) elections Farming & Agriculture Sports fields Clinic 35 Councillor M 2981- 101 MMC RDP Teti Census Councillor T. Houses 2011 Machae Road 4948- Mr B Mnqokoyi maintaina Voters Mr Mvunge nce registered- Mr Maliwa Sports 2016 Mr. K. Kata fields Local MR B. Farming & elections Soyamba Agriculture Representative Sanitation Page 68 of 346
s from (toilets) & Mqanduli water for SAPS, new DEDEAT, household DRDAR, NGO- s UCARC 04 November 32 Councillor M 3152- 112 MMC RDP 2016 Mkhoteli Census Councillor L. Houses 2011 Ntlonze Sanitation 5736- Mr. Maliwa (toilets) Voters Mr. K. Kata Electrificati registered- Mr. Mvunge on – new 2016 household Local s elections Water- new household s Farming & Agriculture assistance Roads constructio n & Access roads 33 Councillor L 3649- 129 MMC RDP Mkonto Census Councillor Houses 2011 Nyoka Water & 4774- Miss B Mbenya Sanitation Voters Mr Z Sontundu Electrificati registered- Mr U Mvango on – new 2016 household Local s elections LED projects especial Agricultura l projects Communit y Services & Public Safety 07 November 06 Councillor T 5245- 99 MMC RDP 2016 Machae Census Councillor Houses 2011 Madyibi High Mast 5129- Mr S Mkaza Lights Voters Miss N Speed- registered- Gwadiso Humps 2016 Miss Madyibi Road Local Miss L Mkwali maintaina elections Mr M Mbana nce Mr F Gaba Fencing of Kwa- Mpuku community garden 21 Councillor N 2885- 75 MMC RDP Diblokwe Census Councillor Houses Page 69 of 346
2011 Mtirara Water & 5693- MMC Sanitation Voters Councillor Roads registered- Ndlela constructio 2016 Mr Maliwa n Local Miss Mbenya Communit elections Mr Mvunge y hall Mr Soyamba Assistance Miss Makinana in farming & fencing of agricultura l maize fields and support 12 Councillor M 4209- MMC RDP Qotyana Census Councillor Houses 2011 Sibeko Road 4704- MMC maintaina Voters Councillor T nce registered- Machae Street 2016 Mr Z Sontundu Lights & Local Mr U Mvango High Mast elections Miss B Mbenya Lights Mr MA Farming & Mayekiso Agricultura Mr Dlangagne l assistance Sports fields Communit y Hall Clinic 28 Councillor A 2635- 86 MMC RDP Ndzendze Census Councillor E D Houses 2011 Mapekula Roads 5744- Mr Mtirara constructio Voters Mr Z Sontundu n & registered- Mr A Monakali maintaina 2016 Miss A Mfihlo nce Local LED & elections Communit y Service centres Electrificati on of new houses Water supply 11 November 09 Councillor S 4586- 73 MMC Youth 2016 Jadiso Census Councillor L recreation 2011 Ntlonze centres 4528- Mr Mtirara Road Voters Miss A Mfihlo rehabilitati registered- on & 2016 maintaina Local nce elections Crime prevention Page 70 of 346
Early childhood developm ent centres Special Programm es Unit (SPU) programm es 10 Councillor N 2427- MMC RDP Roji Census Councillor Houses 2011 Madyibi Roads 4995- Mr Mvunge maintaina Voters Mr Kata nce & registered- Access 2016 roads Local Repairing elections of water pump Electrificati on for new houses LED & Agricultura l support 12 Councillor T. 4029- 118 MMC Councillor RDP Qotyana Census Sibeko Houses 2011 MMC Councillor T Road 4704- Machea constructio Voters Mr. Z Sontundu n and registered- Mr U Unati maintaina 2016 Mr Z Maramnca nce Local Mr N Mdlengane High Mast elections Lights Clinics Agricultura l & Farming support 16 Councillor 2739- 64 MMC Councillor RDP ZN Gusana Census Mr MA Mayekiso Houses 2011 Mr L Mooi Roads 5211- Miss Sitonga constructio Voters n and registered- maintaina 2016 nce Local Agricultura elections l and Farming support Electrificati on of new houses Water & Sanitation
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Date Ward Ward Population Community Officials in 5 Ward Priority Councillor members attendance Needs attended 13 November 08 Councillor E 4451- 78 MMC Roads 2016 D Census Councillor rehabilitatio Maphekula 2011 Sibeko n & 5529- MMC maintainan Voters Councillor L ce registered- Ntlonze Electrificati 2016 Mr Mvunge on Local Miss Mbenya Housing elections Representativ developme e from Dept. of nt Health LED, SPU & Community Services Water & Sanitation 14 November 13 Councillor 3933- 114 MMC Community 2016 Sibeko Census Councillor T Hall 2011 Machea Housing 4723- MMC developme Voters Councillor L nt registered- Ntlonze High Mast 2016 Miss Gwadiso Lights Local Mr A Mavango LED elections Mr B Soyamba projects Mr M Maliwa Sport Mr A Monakali facilities A Mayekiso Representativ e from Social Development 05 Councillor 2364- 97 MMC L Roads Nelani Census Ntlonze rehabilitatio 2011 Mr Mbana n 5982- Miss Madyibi Electrificati Voters Mr Mahlasela on of registered- Mr Mooi Marhambe 2016 ni &High Local Mast Lights elections Community Hall Sanitation Community Projects 04 Councillor 4283- 223 MMC Clinic Mabaso Census Councillor E Electricity 2011 Mapekula supply Page 72 of 346
4654- MMC Roads Voters Councillor constructio registered- Nyoka n and 2016 Miss Makasi maintainan Local Mr Mvango ce elections Mr Kata Water Mr Monakali supply Multi- purpose centre 26 Councillor 2771- 215 MMC RDP Ntliziyombi Census Councillor Houses 2011 Mtirara Water & 4314- Mr Mvunge Sanitation Voters Miss Mbenya Clinics registered- Miss Vuthela Electricity 2016 supply Local Roads elections constructio n & maintainan ce 31 Councillor 2498- MMC RDP Mbongwana Census Councillor Houses 2011 Ndlela Water 4924- Miss Mfihlo supply Voters Miss Sitonga Education registered- (Schools) 2016 High Mast Local Lights elections Agriculture
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2.3.7 SUMMATIVE REPORT 2015 /2016
SUBMITTED
ISSUES REPORT BACK W YES/NO INFR H/SETTLEM SASSA, DRDAR SPORT/C EDUC COM OTHE ACTI A AST . SOC RIME & MUN. R ON R R. DEV, HEA MEET D HOME LTH INGS S AFFAIRS YES No Construc No No No No No No
1 substa tion of substantiv substanti substantiv substan substanti subst ntive 22 e ve e tive ve antive reporti houses reporting reporting reporting reportin reporting repor ng complete g ting
YES The was Disabled and No No Meeting No No 10 No 2 electrici elderly will substantiv substanti of sports substan substanti people substan ty receive e ve set on the tive ve have tive upgrade houses from reporting reporting 25-26 reportin reporting been reportin at human April 2016 g employe g Mthath settlement d from a east the ward at ward by KSD 2 and municipa ward 8 lity YES Electrici No No No No Mobile The clinic No 3 ty substantive substantive substantive substantiv police at water substanti reporting reporting reporting e station is fall is ve upgradi reporting requested running reporting ng in by short of Ward 3 residents at medicine is in BT Ngebs especially immunisati progres on s.
The are no street lights , no high mask at Kwezi
YES People No No No No No No 10 people No 4 of substantive substantiv substantive substantive substan substantive received substanti reporting reporting reporting jobs in the ve Gongwe reporting e tive project of reporting ni reporting reportin fixing requite g potholes Page 74 of 346
d 1 high mask light and toilets People of zimban e valley request 1 multipu rpose centre and one high mask light YES Substatio No substantive No No No No No No No 5 n reporting substantive substantive substantive substanti substantive substantive substanti establishe reporting reporting reporting ve reporting reporting ve d at reporting reporting sidwadwe ni
100 million awarded by the provincial governme nt for street lights
The upgrading of KSD water supply is in progress , but the reticulati on of water has not taken place yet
Roads in the ward are in a very bad state.
Refuse recycle will be reschedul ed for the oncoming meeting with residents. Page 75 of 346
YES Drainag The informal Community No Crime is No Black No No 6 e pipes settlement of Mpuku substantive rife at substan refuse substantive substanti are starving reporting backs are reporting ve at must be they are Kuyasa tive not reporting souther eradicated at requesting and reportin supplied at nwood kwampuku food parcels Southern g the railway are and people of and wood station alternative houses. broken the area must energy be allocated supply such houses in the as Paraffin new development s YES No No No No No No No No No 7 substanti substantive substantive substantive substanti substantive substantive substanti ve substantive reporting reporting reporting ve reporting reporting ve reporting reporting reporting reporting YES People of No No No No No No No No 8 Zone 14 substantive substantive substanti substantive substantive substanti request a substantive reporting reporting substant ve reporting reporting ve graider to reporting ive reporting reporting blade their reportin road. g
The is leaking water at phola park YES The The Commu No Police No Refuse No No 9 graider community nity of substan patrols substa bags substan substa is request of sharply khayelis tive are ntive are tive ntive ed to park and ha is reporti request reporti thrown reporti reporti blade thembula requesti ng ed at ng along ng ng second scrap yard ng Median the avenue are paraffin farm road, at Ncambe requesting were dlene RDP the are farms. houses and no toilets dampin No g sites street lights at in the second ward. avenue Ncambe ndlane
The commu nity of hill crest request Page 76 of 346
ed street names
Storm water drains are witho ut lids
Comm unity hall is reques ted at upper water fall with high mask light.
The are no street light at themb u road Ncam bedlan a
YES The At Ntshabeni SASSA No No No No No No 10 Ncambe community food substantive substantiv substant substanti substantive substanti reporting ive reporting ve le youth there are 160 parcels e ve reporting is housing units are very reporting reportin reportin g requesti which are rare. g ng complete and playing only 40 fields to outstanding. be levelled At Ncambele the are about The 100 housing Mthath units which Page 77 of 346
a are done airport building At Ngqwala is done. the are about 800 housing The tar units pending road at R61 is in The progres community of s Mdeni and Matshongwe are requesting RDP housing units and toilets YES Electrifica The are No No No No No No No 11 tion shortage of substantive substantive substantive substanti substantive substantive substanti program toilets at Chris reporting reporting reporting ve reporting reporting ve me is too Hani and reporting reporting slow in Mandela the ward, people The construction are of RDP houses is complaini in progress at ng. Fairfield
Roads are very bad Chris Hani and Mandela.
High mask light is requested at Mandela and Chris Hani
YES The No No No The No No No 12 communi The community substantive substantive substantive principal substantive substantive substanti ty of of Ward 12 has reporting reporting reporting post has reporting reporting ve Thabo requested been reporting Mbeki houses filled at settlemen Bambana t is ni Senior requestin secondary g access School. roads The Human mobile settlemen clinic is t at high still burry has available gravel at Slovo hips on and phola the road park which should be levelled
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The communi ty of link location is requestin g street lights or high mask lights.
YES Street The No No No The Ncambe No 13 lights construction substantiv substanti substantiv glades dlana substanti request of houses is e ve e king unemplo ve ed at at standstill reporting reportin reporting school yment is reportin Mthoza at Rosedale g request exertive g na and ed high Jizana trolley streets. bins
Pothole s are rife at North crest, phase 1,2 and 3.
Access roads at Mphind weni are well attende d to.
The water reservoi r at Mphind weni is full of dirt and dead animals, the must be some form of a lid that covers this reservoi
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r.
Access roads are in progres s at Rosedal e
YES Kwaka Registratio No Agricult No School No No No 14 pulani n of RDP substant ural substant s and substan substan substa and houses is ive project ive schola tive tive ntive newre progress at reportin s are in reportin r reporti reporti reporti st the ward 14 g progres g transp ng ng ng is s in the ort are water Kwatshem ward in conne ese , the good ction are RDP progre projec houses ss in t in available the progre ward ss
Roads are in bad conditi on in the whole ward they need to be fixed YES Water RDP houses No No No No No IDP No 15 connect at Mpafane substantiv substanti substantiv substan substanti meeting substan ion is in location at e ve e tive ve was held tive progres complete reporting reporting reporting reportin reporting now in reportin s in the g April g ward 2016 Ndungwane houses and ntlanzi Page 80 of 346
construction of house is in progress 16 YES Clinic No No No No Lezilly No No No constru substantive substantiv substanti substantiv Nkala substanti substanti substan ction is reporting e ve e school ve ve tive in reporting reporting reporting toilets reporting reporting reportin progres are in g s in the progres ward. s.
Five 4.6 prefabs million class has rooms been have spent in been the built in building the of the school Clinic at Kambi
The materia l for the constru ction of the dipping tank has arrived in the ward
The is no water at Makhu msheni and eziKam pini 17 YES The is No No No No No No IDP was No no substantive substantiv substanti substantiv substan substanti held on substan water reporting e ve e tive ve the 26 at tive given to reporting reporting reporting reportin reporting the ward reportin people g office in g during the funerals ward. from O.R
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Tambo
18 YES The No substantive No No No No No IDP was No reporting constru substanti substant substanti substa substant held on substa ction of ve ive ve ntive ive the 28 ntive roads reporting reportin reporting reporti reportin of April reporti and g ng g 2016 , ng electrifi Bityi cation eRayi in the ward is in progres s
The rune installat ion of electrici ty in progres s
The mqekez weni installat ion of toilets and electrifi cation is in progres s, the only challen ge Is that the is no water in the area.
The Msana road is very Page 82 of 346
bad and the is no electrici ty in the area.
At khunja na the is no water provisio n and no electrifi cation too.
19 YES The No substantive No No No The The The No reporting substantive substantive substantive communit substanti commu reporting reporting reporting y of commu commu ve nity of Ncendese nity of nity of reporting mkhunj is Mqhum mkhunj requestin ana g clinic o ana does request complai not ed for ned have an High about electrici school the ty delivery of The paraffin road from Bilitani to Jongimi zi locatio n is in bad conditi on, while the constru ction of
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toilets is finished in the area
A bridge at Dindala to Malindi ni has been finished
O.R Tambo Munici pality is not assistin g villages of our ward with water when there are funeral s
The road to Bhuwa has been finished .
The village at Bhuwa is request ing for
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a clinic
The road from Msukw eni to Ndibela needs maintai nce
Qunu village has been attacke d by disaster in March 2016 the has not been assistan ce as yet from the munici pality 20 YES The No No Ndibela No No No No No substantive substantiv substantive substantive substanti Mthent substantive substanti construc reporting e reporting reporting ve u and reporting ve tion is reporting reporting Mvezo reporting requesti commu ng nity seeds request ed the constru ction of water Dams
The Tyalarh a village is
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request ing water tanks to assist prescho ols in the area
Commu nities in the ward request for commu nity halls
Roads in the ward are in a very bad conditi on they need urgent attenti on.
The Bumba ne commu nity has run out of water
21 YES Tar No No No No No No No No road at substantive substanti substant substanti substa substant substant substa khalalo reporting ve ive ve ntive ive ive ntive is reporting reportin reporting reporti reportin reportin reporti being g ng g g ng done
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by public works
Residen ts or commu nity has request ed access roads
People of kwenxu rha deman d a meetin g with the munici pality on service delivery back locks in the meetin g doesn’t sit , they said they are not voting in the coming local govern ment electio ns
Khalalo constru
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ction of a commu nity hall is progres s
The fencing of a dam at kwenxu rha is in progres s
MziOm hle commu nity is request ing access road
Electrifi cation will be done at Kwenxu rha, Khalalo, and Ncinase by June 22 YES Residen No No No No No No No No ces are substantive substanti substant substanti substa substant substant substa complai reporting ve ive ve ntive ive ive ntive ning reporting reportin reporting reporti reportin reportin reporti about g ng g g ng the access road to denezw eni school and they
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are also request ing for water tanks.
The munici pality has donate d 18 water tanks in the ward.
The road by the name of 298 needs to be fixed.
The thungw ana residen ce request ed for a constru ction of a dipping tank 23 YES All Mdeni SASSA The No No Schools The No roads community must commu substanti substa in this youth of substa in this requested assist nity of ve ntive ward do the ntive ward for a disabled this reporting reporti not ward is reporti are in construction people ward ng have requesti ng bad of a and old request school ng state preschool aged ed for furnitur soccer and and RDP people the e. kits and therefo schools with sharing the re need grant shades Poor levelling to be student of fixed s in the soccer
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ward fields have not received books nor school uniform s
Rate of crime is to high in the ward , police must interven e
The commu nity is requesti ng for a mobile clinic
24 YES The No No No No No No No No Mpuma substantive substanti substant substanti substa substant substant substa langa reporting ve ive ve ntive ive ive ntive clinic is reporting reportin reporting reporti reportin reportin reporti closed g ng g g ng
The is no water at qogi locatio n 25 YES No At Ncengula No No No No Schools Registra substa location substanti substan substanti substa are tion of ntive construction ve tive ve ntive starting voters reporti of houses reporting reportin reporting reporti to have went ng has not g ng their well at started own ngonya school location
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The gardens construction in the of houses ward has started at Ncwanguba and Mabhehana project
26 YES Constr No No No No No No The was No uction substantive substanti substan substanti substa substan a road substa of a reporting ve tive ve ntive tive show at ntive bridge reporting reportin reporting reporti reportin sanguni reporti is g ng g , ng comple Komkhu te at lu on Sigigqin the 26 i. April 2016 Sigigqin i electrifi cation project is comple te
The commu nity of sigigqin i is request ing drinkin g water as well as fencing of its meal fields.
At Mxamb ule the are
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some househ olds withou t electric ity and the constru ction of water supply system s are in progres s.
Roads at Jojweni are very bad and the commu nity is also withou t water.
Connec tion of water is in progres s at Zanci locatio n.
Qingqo lo has no drinkin g water supplie s but the electrifi
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cation project is comple te in the village
Water project at Hlabats he is in progres s.
Electrifi cation at Madwa leni is comple te and the water connec tion project is in progres s in the area
Upper Ntlang aza has , water and electrifi cation project s in progres s
27 YES The the is No The is No No No At No road construction substanti poultry substanti substa substan Luthube substa from of RDP ve project ve ntive tive ni the ntive Mcwas houses at reporting which is reporting reporti reportin has reporti
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a to Kwayimane organis ng g been a ng tsitsha ed by training na is women of very in the young bad area of people and Gqungq in brick needs u and laying , to be they 3 fixed have females saved and 3 Mbozis an males a amount commu of nity R2000 , has they are been also given looking four for water assistan tanks ce from depart ment of agricult ure
The commu nity is requesti ng lima project in the ward 28 YES Commu Community No No No No No The No nity of of New substanti substan substanti substa substan youth of substa Mpunz Tuwe ve tive ve ntive tive the ntive ana requested a reporting reportin reporting reporti reportin ward is reporti request registration g ng g requesti ng ed of RDP ng for for houses and soccer electrifi seedlings as kit and cation they as they food and are dying parcels water of poverty they are connec dying of tion. poverty
The commu nity of
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mathek o is request ing for water connec tion
Macosa commu nity is request ing for road and water dam constru ction in the area
Cacadu commu nity is request ing for the fencing of the meal fields 29 YES Water No SASSA Seedling No No No The No reservo substantive and s which substanti substa substan youth of substa ir in the reporting home the ve ntive tive the ntive ward is affairs ward reporting reporti reportin ward is reporti comple are was ng g requesti ng te. requeste promise ng for d to send d have soccer Extensi their not kits in ons in services arrived. the the to the ward. ward ward. Farmers are at request mqandu ing for li are the prepari constru ng for ction of intensiv toilets. e
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farming Constr in the uction period of road 2017/8 networ therefor k from e myezw requesti eni to ng for zwelivu sharing mili SSS shades is comple te
30 YES Roads Constructio No No No No No No No at new n of substanti substan substanti substa substan substan substa Payne houses at ve tive ve ntive tive tive ntive are old Payne is reporting reportin reporting reporti reportin reportin reporti very finished g ng g g ng bad and require interve ntion from the munici pality.
Indigen t People of the ward are request ing for free electrici ty like all other KSD indigen ts
Commu nity hall request
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was approv ed in the IDP 31 YES The is No No No No No No No No no road substantive substanti substan substanti substa substan substan substa going reporting ve tive ve ntive tive tive ntive toward reporting reportin reporting reporti reportin reportin reporti the g ng g g ng village of Gubevu
The road to fameni has been approv ed
The whole ward has a proble m with water supply system s , we request boreho les for the people of our ward
Constr uction of the clinic at Centule is comple te
Mpeko clinic is
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short of staff 32 YES Electrifi Luthuthu No People No No No No No cation community substanti of substanti substa substan substan substa of requested ve Khongq ve ntive tive tive ntive extensi construction reporting weni reporting reporti reportin reportin reporti on of RDP are ng g g ng areas is houses as requesti request well as ng for ed in construction sawing the of toilets machin ward es for People of their Commu khogqweni project nity request for and request construction constru ed of houses ction of additio and RDP roads in nal toilets their taps. area
The area of upper Xwili is request ing electrifi cation of the whole village
The youth of the ward is request ing playing fields to be levelle d.
Roads of the wards are very
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bad.
The commu nity of Matyen i engqin a is thankf ul of the road constru ction in their area
The is no water at jojweni locatio n taps are dry and roads very bad, the connec tion of electric ity is request ed by this commu nity
The bridge that connec ts Qweqw e has collaps ed and
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require s urgent interve ntion, the same commu nity is request ing for RDP houses and fencing of their meal fields
Lukwet hu commu nity is request ing for drinkin g water in its area
The road to the clinic and school in the ward is very bad 33 YES People The are only No No No No No No No of 35 people substanti substant substanti substa substant substant substa Mabhel who are ve ive ve ntive ive ive ntive eni and registered reporting reportin reporting reporti reportin reportin reporti Mendu for RDP g ng g g ng are houses compla ining
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for an uncom pacted road surface
The is no drinkin g water at qweqw e and MAQIN EBENI
Ntlekis weni bridge under constru ction and the is no water in the area
34 YES No No No No No No No No No substa substantive substanti substan substanti substa substan substan substa ntive reporting ve tive ve ntive tive tive ntive reporti reporting reportin reporting reporti reportin reportin reporti ng g ng g g ng 35 YES Maxwe No No Farmers No No Qokolw No le clinic substantive substanti of substanti substa eni substan receive reporting ve tyumbu ve ntive clinic is tive d reporting are reporting reporti running reportin paintin looking ng smooth g g and for roofing assistan Commu ce in nities The is the are no depart complai water ment of ning in the rural about whole develop the water ment shortag and the and e of roads agrarian staff for are reform sagweni
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also clinic very bad from mahodi ni to vidgisvi lle
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CHAPTER 3: SERVICE DELIVERY PERFORMANCE REPORT
3.1 RURAL AND ECONOMIC DEVELOPMENT
The industrial strategy has two parts namely, the analytical report and the strategy.
The Analytical report identifies existing industry clusters, nodes, industry linkages, municipality’s competitive advantages and highlights the location quotients analysis that identified existing industry concentrations.
Key Challenges identified in the report include
High levels of poverty ,in equality, unemployment
Capacity constraints and low skills based of beneficiaries
Low literacy levels of beneficiaries
Poor marketing and access to market(local products)
Agricultural potential is not fully exploited due to various challenges
Inadequate economic infrastructure
Lack of access to capital to initiate and sustain commercial and industrial activity
Manufacturing sector has declined significantly
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3.1.1 ECONOMIC BASE
The profile of the KSD economy depicts the following economic sectors
General government services 17.4
Other government and social services 9.4
Community, social and other personal services 26.8
Finance and business services 9.4
Transport & communication 1.5
Wholesale & retail trade; catering and accommodation 7.9
Construction 2.9
Electricity & water 0.2
Manufacturing 2.1
Mining 0.3
Agriculture, forestry and fishing 0.8
0 5 10 15 20 25 30
3.1.2 COMMUNITY SERVICES:
The recovery of KSD Municipality is dominated by community services which comprise:
Nelson Mandela Hospital Complex
WSU education complex
Regional Administration Offices (Botha Sigcawu/KSD Matanzima)
Municipal Complex (District / Local Municipalities)
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3.1.3 Fire (Finance, Insurance, Real Estate & Business Services)
Important industry subsections include banking, insurance and real estate
3.1.4 Wholesale & Retail Trade
Municipality is a trading centre for Broad catchment area that extends far beyond municipal boundaries
3.1.5 Construction
Construction is a leading secondary industry in terms of output and employment?
3.1.6 Transport
Load transport activity is dominated by tertiary industries – storage post and telecommunications. Mthatha is a trading hub hence warehousing, logistics and communication are concentrated on here to revive movement and storage of goods
3.1.7 Tourism and related services
A tourism base anchored by natural and cultural heritage attractions
3.1.8 Agriculture
Agriculture is the leading primary sector in the municipality and includes production of livestock, forestry, cropping and fishing. Most activity is at subsistence farming level.
3.1.9 Manufacturing
Manufacturing has declined significantly. The small amount of local manufacturing activity is highly concentrated in local market-serving producers – bakeries, abattoirs, metal work, machine and repair shops. Timber-related manufacturing also play an important role.
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3.1.10 INDUSTRIAL AREAS
Vulindlela Heights, Zamakulungisa are designated industrial sites, Transido & Hillcrest Motortown are SMME oriented industrial nodes.
Key regional cluster, corridors and nodes that give Competitive advantages:
3.1.11 Medical services
KSD Municipality, Mthatha infrastructure is a growing regional centre for health and medical services, e.g. Anchor referral hospital, Nelson Mandela Academic Hospital and medical school – this attracts diverse skills of medical professionals, clinical research can lead commercialisation and downstream production of medicinal and pharmaceuticals
3.1.12 High Education and WSU
This is a university town – making a branding advantage.
Can be a competitive advantage to the economy through capacity building, incubation & training, innovation and technology transfer.
3.1.13 Regional Market Base
Having a relatively central location and accessibility on N2 catmint area is about 2.3 million people
3.1.14 Heritage & Resource Tourism Base
Home to renowned former President Nelson Mandela & the rich Xhosa cultural heritage.
Gateway to the Wild Coast and natural beauty of Coffee Bay and Whole-In- the-Wall.
3.1.15 Public Service
Large and stable employment in all tiers.
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Focus Area Key Economic Spin-offs Characteristics
Regional Market 250km trade Market for agricultural products Base area leverages demand for processing throughput and agricultural production 400km distribution area Demand for wholesale, transportation, and logistics services to serve the large Destination regional market base consumer market of 2.3 million Employment in retail trade as well as up-stream and downstream industries Retail trade area potential of R11.7+ Billion by 2017
Sales for agricultural product, leveraging demand for processing throughput and production
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Higher WSU employs Market base for retail goods, supplies, Education & nearly 2,000 transport and services Research people in Mthatha, some Driver for innovation and with higher entrepreneurship degrees, skills R&D can leverage commercialisation Operates Nelson and product development (such as Mandela plant-based products) for downstream Academic production of pharmaceuticals Hospital Unique programmes can attract Faculty of Health specialty skills not found in other Sciences regions conducts clinical and basic research that leverages broad- based funding
Potential Faculty of Agriculture with 1st Veterinary Sciences degree in nation
Heritage & Nelson International tourism, which has Resource Mandela’s higher economic multipliers because Tourism Base home, and of higher incomes and intensive various sites overnight spending patterns linked to the nation’s Development spin-offs in terms of political tourism services, retail, SMME history development, lodging, and craft merchandise Xhosa culture, Conservation increases value of language and developable land heritage
Wild Coast environmental assets
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Hospitals & 3,000 -4,000 jobs Broad supply chain including catering Medical Services in major hospital and food services, medical instruments complex and equipment, plastics and packaging, transport, maintenance services, etc. Mthatha General Hospital Research capacity to support upgraded to a development and testing of Central medical pharmaceuticals facility to offer specialised High-skilled and high-income services drawing professional staff that enhance from a broad consumer spending power, innovation catchment area and leadership
Nelson Mandela Helps consolidate KSD role as centre Academic for trade and services Hospital, conducting clinical research and leveraging broad funding
Military, private and public hospitals and clinics
Government Large and stable Income impact on trade and services employment base in all tiers Access to Government services
Centre for District Government
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3.1.16 KEY GROWTH SECTORS
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3.1 .17 Agriculture
There is a focus to re-establish commercial agriculture sector.
Several target opportunities – are illustrated:
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3.1.18 Opportunities for Manufacturing
Mthatha had once been a centre of manufacturing. The infrastructure for industrial development is existing albeit in need of serious repairs
3.1.19 Food & Beverages
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3.1.20 Wood Products
3.1.21 Trade, tourism and Services
KSD is already a wholesale and retail hub, warehousing, logistics and distribution cluster development will further enhance its market dominance in the region.
3.1.22 Review of economic and industrial strategy
There is an urgent need for the reviewal of the strategy to incorporate new economic opportunities namely, Blue Economy and energy sector as well as a detailed implementation plan.
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Objectives Sector Project/Programmes
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1.Increase Agriculture 1.Mqanduli Maize Cluster employment contribution of 2.Wool Clip Commercialization (13 sheds) the following sectors 3.Pendu Irrigation
4.(a) other small co-operative project and
(b)Feedlot-Mqanduli
Vulindlela Industrial Park(3 sites)
Manufacturing - Vulindlela
- Trasido
- Motor town
Coffee bay Development
Wild Coast Hiking Trail
Trade and Traditional Horse Racing Services Nelson Mandela Cultural Precinct (Tourism, Wholesale, Acqua-culture Development retail) Initiative
Hole in the wall as a national heritage site Blue Economy Small scale fishing
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No initiative as yet
Renewable Energy
Promote an Support CIS Applications, Flea market Inclusive programmes ,Development of Hawker Stalls, Owen Economy for Informal Street pedestrianizing Sectors, SMMEs and Co operatives
Attraction And Investment Business and Investment Expo retention of production investment Strategies
Create Youth ICT Innovation Programme Entrepreneurial focused spirit amongst economic Life guarding project youth development strategies Tourism product development-TEP
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CORRIDORS CLUSTER AND NODES
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3.1.23 Agriculture
Maize production /Agro processing
Feedlot Cluster : Mqanduli
Wool Clip Commercialisation Cluster : Gxididi – Xhongora
Timber Producing, Langeni/ Vulindlela
3.1.24 Warehousing, Logistics & Distribution
Airport, Vulindlela, Viedgesville
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3.1.25 Manufacturing & Automotive Services
- Vulindlela Industrial Park : Vulindlela, Transido,
- Mqanduli Milling Plant
- Wild Coast SEL – Mthatha Airport
3.1.26 Tourism
Heritage: Airport Mthatha City, Qunu, Mvezo, Mohekelweni
- Nelson Mandela Cultural Precinct
3.1.27 Eco Tourism:
- Mthatha – Ultra City VIC – Manqondo VIC
Coffee Bay – Hole-In-The-Wall
- Nelson Mandela Cultural Precinct : (Nkululekweni, WSU, Nduli, Owen Street, |Jubilee, Callaway, St Johns college)
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3.1.28 KEY ISSUES ON ECONOMIC DEVELOPMENT IN KSD
• Approximately 40% of the population falls between 0-14 years and above 65 years – high dependency rate • Economically active population is estimated to be 60% - 15-64 years • High level of Poverty (54.5%) inequality (Gini) and unemployment (0.62%) • Poor level of institutional support to rural farmers-quality and poor service orientation. • Capacity constraints and low skills base of beneficiaries. • Low literacy levels of project beneficiaries. • Poor marketing and access to markets Sand Mining, Manufacturing, blue economy, alternative energy and tourism are not fully developed • Agricultural potential is not fully exploited due to various challenges • Lack of agricultural infrastructure (Fencing for grazing and arable land, Stock water dams, Dipping tanks , Shearing sheds, Sale pens, Farm stalls, Grain silos, Milling plants, Poultry and Piggery housing) • Low physical integration of Economic Nodes and corridors through transportation infrastructure poor cooperation and linkages between economic development institutions. • Lack of access to business support services • Lack of access to capital to initiate and sustain commercial and industrial activity. • Large amounts of timber is exported and sold to other provinces from Langeni Sawmills. • Shortage of funds to develop forests in adjacent villages • Forest fires • Lack of strategies to improve marine and aqua farming activities • Poor management and support services of informal trading activities.
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3.2 SAFETY AND SECURITY IN KING SABATA DALINDYEBO MUNICIPALITY
• Lack of CCTV’s cameras to detect criminal activity in KSD towns. • Increased criminal activities in KSD areas e.g. Car high jacking • Theft of motor vehicle, motorcycle and commercial crime are more common types of crimes reported in Mthatha (SAPS) • Most common crimes include drug related crimes, followed by cases of sexual crimes (to be confirmed with 2016 census release of Statistics South Africa) • Stock theft is highest in some rural areas.(due to poor roads maintenance and traffic congestion). • Machinery is inadequate for provision of full services for disaster and emergencies covering urban, rural and coastal areas • No disaster satellite in Mqanduli. • No Disaster Management Plan/ Policy in KSD LM • Lack of a fire engine truck to curb fire emergencies • No Fire or implementation) of by-laws adopted by council • No proper drainage management system in the streets around the CBD and areas along Mthatha river, • No audit on wards confronted by severe flooding due to its proximity to rivers and streams (during heavy rains).
3.3 ELECTRICITY SUPPLY AND INFRASTRUCTURE
The report below gives the achievements of the Electricity Division in addressing the challenges of the power outages that are experienced by the communities of Mthatha and this work was made possible among the efforts by the R100M grant that was made available to KSDLM by the EC Provincial Treasury. The report also report on the work that was undertaken in order to give access to the electricity grid to some of the communities of KSDLM who up until now have not had access and those communities are wards 20 and 21 which covers the villages of Mbizana, manyosini etc which are covered in the implementation of Mqanduli phases 3 and 6 project as well as Polar Park.
The Municipality undertook the following ambitious projects in the effort of enhancing Page 123 of 346
the customer satisfaction and to comply with the NERSA license conditions by reducing the frequency of the power interruption and the reducing the duration of power interruptions:
Refurbishment and upgrade of the sections of the bulk lines (66kV lines) from Eskom to 2 of our major substations, namely Sidwadwa and Unitra substations and the project is under construction.
Refurbishment of the medium voltage (11kV lines) lines that supply power to our major load centres like Ngangelizwe, Khwezi and its extension, Mbuqe and its extension, Waterfall, Mdlekeza, Maiden farm, New Brighton, Hillcrest, Ncambedlana, Northcrest, Phase, Wellington prison, Nkululekweni, Zamukulingisa industrial, Sidwadwa View, WSU, Bhongweni, Eskom, Ilitha and these projects are 80% complete
Refurbishment of cable networks to reinforce the CBD, Holiday inn, Myezo, Fortgale and the project is 98% complete
Refurbishment of 14 medium voltage substation inorder to reduce the risk of failure, reduce public liability, improve operator safety and to extend the life of this critical infrastructure.
Implementation of the control centre and SCADA in order to monitor the power system remotely and to safeguard the electricity infrastructure and to ensure the safety of the operators/electricians,
Procured crane truck and a cherry picker.
Implementation of Mqanduli phase 3 and 6 project
Procurement of Service provider to implement the electrification of Polar Park
The following paragraphs will give a summary of the scope of each project and show some pictures.
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Refurbishment and upgrade of the sections of the bulk lines(66kV lines) from Eskom to 2 of our major substations, namely Sidwadwa and Unitra substations.
The major sections of the bulk lines i.e. the 66kV overhead lines are old and of wood technology, underburied and cannot support the future needs of load growth. They are also not safe as they strength has been weakened by people who have removed the supporting stays inorder to develop their households as our servitudes have been invaded. The work which is being done is to replace the wooden poles with steel poles, put in bigger wires in order to carry more electrical energy and to reroute the power lines away from the problematic areas.
The picture below shows the condition of the current bulk power lines.
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Refurbishment and upgrade of the Sidwadwa Substation
Sidwadwa substation is the first substation in Mthatha and the last major refurbishment and upgrade was last done in around 1975. The age and equipment tells us that the substation has long reached the end of it useful life and is no longer meets the current safety and environmental legislation and cannot meet the current and future customer needs in terms of reliability and capacity. The scope of the project is to extend the substation, replace the old equipment and technology, increase the capacity from 30MVA to 60MVA and make it visible to the Supervisory Control and Data Acquisition (SCADA) System for remote monitoring and operation. The following pictures show the snap shot of the journey from the old to the new.
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Old site for the new control building
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Start of the work for control building
The new control building
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New transformer and equipments
3.3.1 Refurbishment of the medium voltage (11kV lines)
The work here is to replace all the old poles, wires and old and leaking transformers as well as all the streetlights that are on the old poles and make sure that all those streetlights work. The following pictures show what is being done on this infrastructure.
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The old pole and the line is being replaced by the one on the left
Replacement work is in progress
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3.3.2 Refurbishment of 14 medium voltage substation
The majority of MV substations with the CBD and Vulindlela are in a sorry state due to old age and vandalism and deliberate threshing. Some of the substations are used as ablution facilities and dumping sites. Because of these conditions they pose a serious risk to the continuity of supply and to a very expensive electrical equipment and the also pose as serious safety risk to the members of staff and public which opens up the municipality to liability claims. So the work that we have started as the Electricity Division under Technical Services going a long way towards reversing this ugly picture as it is evidenced by the pictures shown below. It must be stressed that the current project is not going to address all the MV substations but the worst ones so far.
Sprigg Substation
3.3.3 The Control Center and SCADA project
This project seeks to establish the 24 hour monitoring of our major substations critical circuits so as to be able to respond to power interruption even before our customers call us and it will also make us to proactive in communicating major power interruptions
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to our customers before they even being aware. We believe that this will be a good step towards improving customer perception and satisfaction. The establishment of the control centre will also safeguard the expensive assets, maintain the continuity of power supply and reduce the duration of power interruptions as some of the faults are of a temporal nature and breakers can be close remotely rather sending an operator to the substation to manually close the breaker every time a breaker opens at the substation as we are currently doing. Much time is wasted travelling to a substation especially during pick traffic hours. This will also reduce the risk of electrocutions to our operators as there will always a controller who is monitoring and guiding the field staff remotely in the comfort of the office environment to ensure that they are operating at the right equipment and are reporting their action and are complying with the safety rules at all times. Currently there is no one who is watching the operators when they are operating and the supervisors are relying on the integrity and competence of the operators as it is not possible to supervise each and every point where operation are being carried out and there is no technology and facility to support operations. To minimize the risk to staff only two operators can operate on the electricity network at a time and this is increasing the restoration time and is upsetting customer and there is no way to sacrifice human life in order to satisfy the customers.
Remote terminal units
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Radios and dish 3.3.4 Implementation of Mqanduli phase 3 and 6 project
The Mqanduli project is the 2 phase and multi-year project which is targeting to connect about 5000 people to the grid and currently the infrastructure has been created to connect 1900 households of which 690 are energizable and Eskom is busy finalizing the process of connecting the 690 households and they are targeting the beginning of September 2016 to switch on.
The following pictures depict what is happening on the ground.
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Workers busy correcting the snags identified by Eskom
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Customer education being conducted by Eskom
3.3.5 Electrification of Polar Park
As a result of the violent protest that led to the threshing of our infrastructure which caused the power outage to 5000 paying customers in the Mthatha West for three days Government took a decision to electrify the community of Polar Park and we are at a stage were the consultant is busy with design and the contractor is procuring the materials so as to start construction work.
Below is the picture which shows the outcome of the protest and that set the start of the electrification of Polar park.
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3.4 MUNICIPAL INFRASTRUCTURE GRANT EXPENDITURE
CAPITAL PROJECTS MIG Funding – PMU managed to spend 100% (R80, 071million) of the MIG allocation in the 2015/16 financial year. MIG ALLOCATION EXPEDITURE % EXPENDITURE R83,665,000.00 R83,665,000.00 100%
Other Funding – the PMU has contributed to sourcing of funding and the monitoring and evaluation of the following projects from various funding sources.
Project Funding Source Funding Status R61 ring road Bypass EC Provincial R110m Construction Treasury Revitalization of Department of R70m Construction of Vulindlela Industrial Park Trade and Industry phase 1 (R20million) Errol Spring road OR Tambo DM R24m construction Zanemali road OR Tambo DM R11m Complete
MIG Project Implementation – PMU is implementing Twenty five (25) Projects of which eight (8) projects have been completed in the 2014/15 financial year (FY). The PMU is busy with the termination of contracts on two (2) projects (Ngcinase Access road and Surfacing of Zimbane valley).
Planning – the PMU business plan FOR 2015/16FY was signed and submitted to MIG office for approval. Thirteen (13) projects were approved by the MIG District Appraisal Committee (DAC) for funding application. The 2 surfaced roads projects were approved on condition that KSDM provides co-funding.
Job No. No. of Project Name Ward Opportu Status Km/m2 bridges nities Bhongweni gravel internal streets 4 10.4km 1 20 Complete Darhabe – Tshontini Access Road 23 17km 0 11 Complete Ngqawa Ngcalambeni Access Road – phase 2 21 12.4km 0 17 Complete Qala /Sdulini Access Road 20 8km 0 27 Complete Gqaqhala Access Road 26 4.2km 1 8 Complete Pahla - Sigingqini Access Road 26/22 4km 1 11 Complete Dikweni Gobodo Lusu and Finiza 2 2.5km 0 28 Complete Surfacing of Zimbane Valley Abattoir 4/5/30 7km 1 16 Complete Ngcinase Access Road 21 7.6km 0 8 Complete
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Mpindweni Access Road 13 25.5km 0 17 Complete Madondile - Gotyibeni Access Road 20 13km 0 17 Complete Mahlungulu Access Road 22 16km 0 11 Retention Zithenjini - Lubisana Bridge 22 3.5km 1 13 Complete Lukhwethu, Khonqeni, Gwegwe road & Bridges 32 16km 2 9 Complete Deri Access Road 27 9km 0 7 Complete Jojweni - Ntlukuhla JSS Access Road 15/17 19km 0 18 Complete High Mast Lights 1,2,3,4,5,6,7 1-7 15 0 7 Complete Menga Community Hall 24 365 sqm 0 11 Complete Krakra Community Hall 20 365 sqm 0 27 Complete Manyisane Community Hall 23 365 sqm 0 13 Complete
3.4.1 EMPLOYMENT CREATION
Experiential Learning – 9 students are placed in various PMU projects whilst an additional 5 are placed with consulting engineers.
APPLICATIONS STUDENT STUDENTS IN KSDM RECIEVED PLACEMENTS PROJECTS 68 15 10
Local labour - The MIG projects had a total employment of 172 local labourers.
PMU staff – 2 technicians and 2 data capturers were employed in the PMU section.
3.4.2 CHALLENGES
4 Some projects were delayed in the supply chain processes then projects started late 5 Poor performance by contractors leading to late completion of projects 6 Remuneration and contracts adjustment - Remuneration of staff lower versus other municipalities of lesser size 7 Remuneration lower than what is on the approved business plan 8 High staff turnover 9 Encroachments in Peri - urban and urban areas 10 Drainage discharge in rural settlements – Poor planning 11 Borrow pits access – Communities selling material to contractors 12 Land claims – Mealie fields and vacant land 13 Challenges with MIS system and the turnaround time from the Provincial CoGTA
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3.5 Roads Maintenance
The rural roads maintenance team has been able to maintain 450 km of gravel roads. These were roads that previously were not accessible. But due to efforts made by the team they have managed to maintain them and make them more accessible. They have managed to work in the following wards 14 Ward26 15 Ward 29 16 Ward23 17 Ward22 18 Ward 21 19 Ward31 20 Ward 36 Eskom had projects to electrify the following villages in Ward 25: Mabhehana, Mlawu, Lwandlana and Ward 24: Mapuzi. The rural roads section managed to provide 18km access to these inaccessible roads that lead to positions of Eskom Transformers.
3.5.1 Urban Roads The department has sourced 100 temporal EPWP employees as part of pothole patching turnaround strategy to ensure that there is a full time team in each of the 10 wards in urban area. These team were incorporated to the existing three teams of pothole patching and one team of storm-water cleaning. The roads were riddled with potholes and blocked storm-water drainage. The impact of these team in the KSD roads is so significant that the storm-water target was exceeded by 100%. Although the roads in KSD general has reached the structural design period the pothole patching team continue to play vital role in making sure that the roads are rideable and potholes are patched. The teams ensure that preventative maintenance is being done. Typical roads in which major works have been done: 21 2nd Avenue Noorwoord: Structural rehabilitation. 22 Eagle road in CBD: Structural rehabilitation. 23 Part of Gerald Spilkin in Kwezi : Slurry seal. 24 Delville Road 25 Sisson Street
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PICTURES FOR POTHOLE PATCHING
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Norwood Third Avenue during patching Ikhwezi Ext Buttercup- status of the road before patching
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Ikhwezi Ext- after patching Mbuqe Ext. Merriam and Lusithi road condition before
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Vulindlela road at Zimbane Valley. Pothole before patching Vulindlela Road- Zimbane Valley- A pothole in the middle of the road, that is hazardous to Drivers. Needs some serious attention.
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Vulindlela road @ Zimbane Valley. Edge breaking that results in pothole Vulindlela road @ Zimbane Valley- Erosion: degree 4 developing
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Vulindlela road @Zimbane Valley – Edge breaking Valley road @ Zimbane Valley – portion of the road after patching
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Vulindlela road at Zimbane Valley Vulindlela road at Zimbane Valley
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Vulindlela road at Vulindlela Heights Vulindlela road at Vulindlela Heights
Ikhwezi Ext- Gqunube street pothole after patching and spread of fine dust Norwood during patching
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Ikhwezi- Gerald Spilkin during patching Ikhwezi- Gerald Spilkin during patching
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IKhwezi – Gerald Spilking after patching
IKhwezi- Gerald Spilkine. Completed pothole patch. Recommend slurry seal to seal cracks after
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This portion needs cutting before patching. Gerald Spilkin at Ikhwezi Gerald Spilkin. Prepared pothole which needs priming before asphalt
Ikhwezi during the patching
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Giant pothole at Ikhwezi – Gerald Spilkin
Southernwood road condition
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Southernwood
One of our intern teams during patching processes
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During patching process
Stanley Nelson Drive next to Savoy Spar- state of the road during milling process
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Stanley Nelson Drive
Southernwood next to Southernwood Primary during patching
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Ikhwezi –Gerald Spilkin during patching
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Critical potholes
Ikhwezi – Status of the road before patching
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3.6 KSD PI PROJECTS 2015/2016
Transport and Mobility
NAME WORK PROJECT PLANNE PLANNED STATUS STREAM FUNDER D END BUDGET JOBS START Mdumbi Turn-off to Transport EC DRPW Nov 2013 August 2016 R16 000 000.00 98.5% 73 Coffee Bay & Mobility Complete Notshata to Mdumbi Transport EC DRPW Jan 2015 April 2015 R12 000 000.00 Complete 26 Turn-off to coffee & Mobility d Bay Widening of 3 Transport EC DRPW October Sept 2016 R 77 % 74 Bridges in Mdubi & Mobility 2015 R 27.995.000 Complete Turn-Off to Coffee Bay and Construction of 1 new bridges.
Coffee Bay t o Transport EC DRPW March March 2018 R12 000 000.00 48 % 52 Zithulele Turn off & Mobility 2016 RRR Complete km5.6 to km15.6
Sprigg Street to Transport SANRAL Oct 2013 Mar 2017 R346 000000.00 65% 310 Ngqeleni turn-off & Mobility Complete (including 2 bridges) Waterfall 1183 Transport Human Jan 2015 Jan 2016 R33 100 000.00 12% 32 & Mobility Settlemen Complete Page 163 of 346
upgrade of existing ts civil infrastructure
R61 By Pass / Ring Transport SANRAL Septemb October 2016 R119 000.000.0 7% 22 Road & Mobility er 2015 0 Complete
Zimbane Abattoir Transport KSD July 2013 June 2015 R7 1000 000.00 100% 7 Road & Mobility Complete
Water and Sanitation
NAME WORK PROJECT PLANNED PLANNED STATUS JOBS STREAM FUNDER START END BUDGET Mthatha raw Water & MIG & Nov 2011 Nov 2015 R39 800 40% 43 water Sanitation RBIG 000.00 Complete infrastructure (contractor and upgrades- terminate) Mbokotho Mthatha raw Water & MIG & Nov 2011 Dec 2015 R30 100 100% 15 water Sanitation DWA 000.00 Complete infrastructure rehabilitation and upgrades- Anix Mthatha raw Water & MIG & Nov 2011 Aug 2016 R6 900 93% Nil water Sanitation DWA 000.00 Complete infrastructure rehabilitation and upgrades- RJN 10ML Fairfield Water & MIG Nov 2011 June 2015 R22 600 Complete 80 Reservoir- Sanitation 000.00 Norland Mthatha raw Water & MIG & Nov 2011 Sept 2015 R38 200 Complete 40 water Sanitation RBIG 000.00 infrastructure rehabilitation and upgrades- WK Gravity Main to Water & MIG Nov 2011 June 2015 R17 500 Complete 41 Fairfield Sanitation 000.00 Reservoir - Mpumalanga Rosedale to Water & MIG & Nov 2011 Dec 2015 R49 700 99% 27 Libode Regional Sanitation RBIG (Revised) 000.00 Complete Water Supply Scheme Phase 1- Dokose / Umso 10 ML Mayden Water & MIG Nov 2011 August 2016 R23 000 90% 8 Farm Reservoir- Sanitation 000.00 Complete Xesibe Thornhill WTW Water & MIG & Nov 2011 Oct 2016 R61 800 98% 20 to Signal Hill Sanitation RBIG 000.00 Complete Page 164 of 346
Reservoir Main- Ceremile 15ML Signal Hill Water & MIG & Nov 2011 Jan 2016 R32 700 100% 45 Concrete Sanitation RBIG 000.00 Complete Reservoir Phase 2- Mamlambo Signal Hill Water & MIG & Nov 2011 Nov 2015 R39 900 100% 41 Reservoir to Sanitation RBIG 000.00 Complete Zamukulungisa Reservoir Gravity Main- Ceremile 13.5ML Water & MIG Nov 2011 Nov 2016 R30 100 54% 8 Zamukulungisa Sanitation 000.00 Complete Reservoir- Ruwacon Bulk Water Water & MIG Nov 2011 Dec 2015 R18 400 97% 46 Supply to BNG Sanitation (revised) 000.00 Complete Areas 2&3 Lejamo 6ML Zimbane Water & MIG Nov 2011 Dec 2015 R22 400 80% 29 Reservoir- Sanitation (revised) 000.00 Complete Lejamo 20ML Water & RBIG Nov 2011 October 2016 R58 000 47% 10 Viedgesville Sanitation 000.00 Complete Reservoir- Ruwacon and Qweqwe reservoir 22KM Gravity Water & MIG Nov 2011 Oct 2015 R101 000 90% 45 Main from Sanitation 000.00 Complete Viedgesville to Mqanduli- Cerimele Gravity Mains Water & MIG Nov 2011 Oct 2016 R22 400 50% 21 from Signal Hill Sanitation 000.00 Complete to Areas 1 & 6- Radee Civils Bulk Water Water & MIG Nov 2011 Sept 2016 R28 400 98% 34 Supply to Sanitation 000.00 Complete Seshegu & Kaplan-Zana Manzi Coffee Bay Water & MIG & Aug 2011 June 2016 R96 000 40% 393 Regional Water Sanitation RBIG 000.00 Complete Supply Scheme-Umso Mthatha Water & MIG & Nov 2012 July 2016 R173 000 41% 41 wastewater Sanitation RBIG 000.00 Complete infrastructure rehabilitation and upgrades KSD PI: Water & RBIG Nov 2011 Jan 2016 R107 800 31% 27 Mthatha Sanitation 000.00 Complete Northern Outfall Sewer-Icon Construction
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KSD PI: Water & RBIG Nov 2011 Jan 2016 R53.600 73% 20 Northern Outfall Sanitation 000.00 Complete Sewer- Mpumalanga Construction KSD PI: Water & MIG & Nov 2011 Sept 2017 R44 900 95% 21 Upgrade of the Sanitation RBIG 000.00 Complete Southern park and Kuyasa gravity Sewers- Ruwacon KSD PI: Water & MIG & Nov 2012 Sept 2017 R19 100 31% 18 Upgrade of Sanitation RBIG 000.00 Complete Ngangelizwe Outfall & Gravity Sewers- Biteline SA KSD PI: Water & MIG June 2014 Sept 2015 R49 000 100% 106 Mayden Farm Sanitation 000.00 Complete P/S, Rising Main & Gravity Sewers-Norland Upper Water & MIG Sept 2012 To be revised R11 820 93% 40 Mhlahlane Sanitation 000.00 Complete Water Treatment Plant Mqanduli Sewer Water & MIG Mar 2012 Dec 2015 R16 310 82% 44 Phase 2 Sanitation 000.00 Complete Upper Water & MIG Sep 2016 Mar 2016 R46 320 00 25% 76 Sanitation 0.00 Complete Mhlahlane Water Supply – Phase 3
Energy, Waste and Environment:
NAME WORK PROJECT PLANNED PLANNED STATUS JOBS STREAM FUNDER START END BUDGET
Urban Energy DoE-INEP Oct 2013 June 2016 R35 000 99% Complete 68 Electrification 000.00 of Mthatha West Settlements Upgrade of Energy DoE- Aug 2014 June 2016 R48 80% 133 Sidwadwa ADAM 500.000.00 Substation with 3X20MVA transformers Upgrade of Energy DoE- Apr 2015 Dec 2016 R26 200 Design-100% To be the 66Kv ADAM 000.00 Constr- 10% determin Page 166 of 346
Overhead ed lines of the primary network Electricity- Energy Eskom April 2015 March R13 000.00 Rural 2016 0.00 Electrification: KSD Extensions (610 connectionVill ages: Kwa Link, Marambeni
EC-WftC Environm DEDEA(E Aug 2013 July 2015 R2 300 Complete 26 Mbashe River ental C) 000.00 to Manteku &Waste River Managem ent
Electricity- Energy Eskom April 2015 March R14 500.00 Rural 2016 0.00 Electrification: KSD Extensions. 670 Connections. Villages: Doyveni, Esizindeni, Ekhohlo, Bongweni, Enyandeni, Emathokazini
Electricity- Energy Eskom April 2015 March R6 200.000 Design is 80% Rural 2016 .00 Electrification: Mqanduli Phase 2. 210 Connections
Electricity- Energy Eskom April 2015 March R10 Designs:100% Rural 2016 200.000.00 Electrification: Mqanduli Phase 5.300 Connections
Electricity- Energy DoE-INEP April 2013 Mar 2014 R25 500 66% Complete N/A Rural 000.00 Electrification: Mqanduli phase 5 (1500 connections)
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Electricity- Energy INEP April 2014 June 2016 R61 000 52% 56 Rural 000.00 Electrification Mqanduli 3 & 6-5000 connections EC-Mthatha Environm DEA Jan 2015 April 2017 R38 000 30% 394 Dam Tourism ental 000.00 Centre and &Waste Recreation Managem Phase ent
EC- Environm DEA July 2014 June 2018 R33 000 20% Nil Development ental 000.00 of a New &Waste Landfill Site Managem ent
EC-Waste Environm DEA July 2014 June 2018 R24 000 20% Nil Transfer ental 000.00 Stations &Waste Managem ent
EC-Land Environm DEA July 2014 March R12 000 50% 136 Rehabilitation ental 2017 000.00 &Waste Managem ent
EC-Youth Environm DEDEA(E Oct 2013 Aug 2015 R60 000 Complete 40 Jobs in Waste ental C) 000.00 &Waste Managem (Provincial ent budget)
EC-Youth Environm DEDEA Nov 2015 Oct 2016 R 606 742, 10 Months 40 Jobs in Waste ental 68 (Phase 2) &Waste (EC) Managem ent
Human Settlements: NAME WORK PROJECT PLANNED PLANNED STATUS JOB STREAM FUNDER START END BUDGET S
Emergency Human EC HS Mar 2014 June 2015 R16 000 50% Nil Housing Sites Settlements 000.00 Abandoned due to land invasion Project B Human EC HS Aug 2012 June 2015 R6 516 Complete Nil
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(Planning & Settlements 873.00 Design) 1795 sites Project C Human EC HS Aug 2012 June 2015 R9 591 Complete Nil (Planning & Settlements 965.00 Design) 2642 sites Phola Park Human EC HS May 2012 June 2015 R18 303 Complete 30 550 sites (P1): Settlements 166.00 Planning & Interim Services Phola Park Human EC HS Mar 2014 June 2015 (Part of 38 Complete Nil 850 sites Settlements above) Phase 2
ISUP Phase 2: Human EC HS Feb 2013 June 2015 R32 371 Complete 26 Planning & Settlements 720.00 Interim Services
Social Dev and Health:
NAME WORK PROJECT PLANNED PLANNED STATUS JOBS STREAM FUNDER START END BUDGET
Centuli Social Department May 2014 April 2015 R12 000 0% 20 Clinic Developm of health 000.00 ent &Health Tyelebana Social Department June 2013 April 2016 R12 000 85% 37 Clinic Developm of health 000.00 Complete ent &Health Bumbane Social Department May 2013 Mar 2015 R12 000 73% 27 Clinic Developm of health 000.00 Complete ent &Health Strengthen Social Department Mar 2011 Mar 2014 R2 500 Ongoing 9 ing TB & Developm of health 000.00 HIV ent Programm &Health e /Access through TB and HIV Care Associatio n Gengqe Social Department TBD TBD R20 625 25% Nil Clinic Developm of Health 405.48 complete ent & Health Tabase Social Department July 2016 R23 000 30 Clinic Developm of Health 000.00 ent & Health Page 169 of 346
Kambi Social Department March 2015 April 2016 R23 000 85% 28 Clinic Developm of Health 000.00 ent & Health Sakhele Social Department March 2015 April 2016 R23 000 Clinic Developm of Health 000.00 ent & Health Maxhwele Social Department March 2015 April 2016 R20 862 Clinic Developm of Health 000.00 ent & Health Luthubeni Social Department March 2015 April 2016 R23 000 Clinic Developm of Health 000.00 ent & Health Sisonke Social Department 2014-15 March R250 Ongoing 14 household Developm of Social financial year 2020 000.00 food ent & Developmen garden Health t Dobe Social Department March 2014 April 2019 R1 500 Ongoing 18 household Developm of Social 000.00 food ent & Developmen production Health t Diversion Social Department March 2015 April 2016 R150 Ongoing In-house & Developm of Social 000.00 Mentoring ent & Developmen Health t Crime Social Department 2017 R150 16 KSD Prevention Developm of Social 000.00 Mentors Programm ent & Developmen were e Health t trained
Local Economic Development & Rural Industrialisation
NAME WORK PROJECT PLANNED PLAN STATUS JOBS STREAM FUNDER START NED BUDGET END
Ngangelizw LED & National Oct 2011 Mar R25 000 40% 189 e Transido Rural Treasury 2016 000.00 Small Industrial Business Developme Hub (SMME nt Dev) Mqanduli LED & DBSA Oct 2011 March R42 000 40% 320 Milling Plant Rural Jobs Fund 2016 000.00 Industrial Developme nt
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Kei Fresh LED & ORT DM Oct 2011 Mar No 40% 2000 Produce Rural 2016 project Industrial costing Developme as yet nt Wool Clip & LED & DRDAR Oct 2011 March R900 000 80% 123 Rural 2016 .00 Processing Industrial (Commerciali Developme nt zation)
OR Tambo LED & ORT DM 2015 2018 R 10% 10 Rural 36 000 0 Enterprise Industrial 00.00 Development Developme nt Centre
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3.7 HUMAN SETTLEMENTS, TOWN PLANNING AND PROPERTY MANAGEMENT
The Human Settlements directorate has four (4) core functions and strategies: Development planning and control (Spatial Planning) Building management Development of sustainable human settlements Land and property management
3.7.1 Development Planning and Control.
Spatial Planning is central in developing and promoting an integrated urban and rural areas, addressing spatial injustices and guides spatial development towards attainment of Vision 2030. The spatial transformation Spatial Planning (urban /town/regional planning) is a technical and political process concerned with the control of the use of land and design of the environment, including transportation networks, to guide and ensure the orderly development of settlements and communities/ industries. It concerns itself with research and analysis, strategic thinking, urban design, public consultation, policy recommendations, implementation and management. Human Settlements is in transition towards a stable, visionary, innovative and directive planning department with a vision to pioneer (leading), being a catalytic (enabling) development planning entity and rendering effective spatial management in an integrated manner. The department has six core functions to ensure that the mandate of planning and development is carried forward in a sustainable manner. The key focus of spatial planning during the year under review was the formulation of the Local Spatial Development Frameworks that guide investment and development and urban design. These plans were completed for Coffee Bay, Mqanduli, Vidgesville and Mthatha West to Airport areas. Another key focus area is to facilitate development and control in the municipality’s built environment in the manner that ensures orderly and legally compliant development. Land Use Management entails processing and approving land development applications.
Achievements include:- Development applications received: 19 Development applications approved: 4
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Approvals outstanding at end of financial year: 15
Building Management Key focus area for building control and outdoor advertising is to ensure that building plans are approved prior to construction and outdoor advertising is managed to enhance KSD’s revenue. Building control approve building plans, execute building inspections and initiate legal actions in accordance with the provisions of national building regulations and building standards act, Act 103, 1977, as amended and other related legislation. Law Enforcement consists of management of built up environment contraventions. Outdoor Advertising regulate and manage all forms of outdoor advertising which fall within the jurisdiction of the municipality. A new policy and by-law has been developed.
Achievements include approval and inspection of residential and non-residential buildings. Number of building plan applications received is: 283 Building plans approved: 228 to the value R108, 051,809.70 Building projects completed: 45 to the value R 19,916,508.169 Number of contravention notices issued: 70
Development of Sustainable Human Settlements The role of KSD in developing sustainable human settlements involves planning, development and management of sustainable human settlements. To achieve this partnerships with national and provincial government are critical as the municipality is not delegated the powers to perform housing function. Creating sustainable human settlements also require partnerships with community, private sector, non- governmental organisations etc. Intervention that are economic and environmental in nature are also critical. Challenges experienced in the process of delivery of human settlements include: Growing number of informal settlements Housing backlog of 17400 Unresolved land claims Non availability of suitable land for development Land invasion
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3.7.2 Key achievements include Installation of 1317 services connections (water, sewer), and construction of internal roads in Maydene Farm Ext. Installation of 131 services connections (water, sewer), and construction of internal roads in New Brighton Construction of 20 top structures in Maydene Farm Ext.
3.7.3 Land and Property Management This unit deals with the strategic management of the property portfolio of the municipality which includes lease management, transfer of properties (EEDBS), land invasion management and disposal of Council properties. Key achievements include transfer of 1970 properties under the EEDB scheme in Ngangelizwe, Khwezi, New Brighton and Hillcrest.
3.7.4 LAND CLAIMS Land claims lodged in terms of the Land Restitution Act are randomly spread throughout the municipal area, affecting both rural and urban areas. The progress in dealing with the claims is at different stages, the pace of the finalisation is generally slow impacting negatively on delivery of Breaking New Ground (housing) and commercial developments. No land claims have been settled in the financial year under review.
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The municipality continues to work hard with the claimant communities and the Land Claims Commission towards the resolution of the land claims and unlocking the developments.
3.8 WASTE MANAGEMENT, ENVIROMENTAL MANAGEMENT AND ENVIROMENTAL HEALTH - Community Services continues to strive for clean and healthy environment. In the financial year 2015/16, we have managed to develop Integrated Environmental Management Plan which has been tabled to Council. - 198 Beneficiaries recruited for EPWP Environmental Sector Projects - 14 Co-operatives benefited on cleaning and greening projects - Draft Waste Management By Laws tabled to Council, awaiting Gazetting - We managed to secure a License for Operating & Closure of Mthatha Landfill
Site
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- Mthatha & Mqanduli landfill site under rehabilitation
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With regard to Greening Projects we are busy implementing the following projects in partnership with Department of Environmental Affairs as part of Presidential Intervention:
- Establishment of new Landfill Site in Ward 33 has a budget set aside of R33 million - Establishment of 64 accommodation chalets in Mthatha Dam with a budget of R38 million.
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- Construction of 2 Waste Transfer Stations in Ward 7 and Ward 24 with budget of R24 million - Land Rehabilitation (Rehabilitation of Dongas) in Ward 15, 16, 17, & Ward 31 at a budget of R12 million.
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CHAPTER 4: ORGANISATIONAL DEVELOPMENT PERFORMANCE
4.1 Organisational structure
Municipal
Manager
Mr M Zenzile
Director: Director: Chief Director: Director: Planning Corporat Director: Director: Financial Human Technical Social & e Public Community Officer: Settlements: Services: Mr Economic Services Safety Services: Mr F.E Ms N.N H.Z Ngovela Development Acting: Mr L Maka Jiholo Soldati Mr F Gaba Mr A Mr R Mnqokoyi Mdleleni
Municipal Transformation and Organisational Development
KSD had approved a staff establishment in the year 2010, an HR plan was developed to make sure that each year a number of posts are filled. As per HR plan for 2015/16, the municipality has planned to fill 189 posts and 89 posts have been advertised and filled. The process of reviewal is ready was started since the placement process is finalised.
Critical vacancies have been advertised and filled in some departments but there is still a serious need to fill vacancies for the smooth running of municipality and to achieve IDP Objectives in improving service delivery.
Corporate Services facilitates training for all KSD officials and councillors and we have managed to do exceedingly well in that area considering the budgetary constraints.
The municipality has a total of 2168 approved posts, of this, 48% of the total posts are vacant as at 30 June 2016.
Performance agreements and employment contracts were concluded with the section 57 managers and the Municipal manager and submitted to the department
4.2 Implementation of the Performance Management System (PMS): As required by section 38 of Local Government: Municipal Systems Act, the KSD municipality has established PMS in the following manner:
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A service provider has been appointed for a period of three years starting from 2013 to provide the guidance on PMS. The SDBIP that is aligned with the IDP was approved. Quarterly performance reports were generated and submitted for Council. A draft PMS policy has developed and circulated for comments and it is due to be approved by Council. The municipality conducts Annual Assessments for the S56 Managers to ascertain whether set targets have been achieved. As also required by law, performance agreements have been signed and approved by Council.
Arrangements are being made for cascading of the Performance Management System to the next level of managers.
Municipal Manager and S57 Manager’s employment contract and performance contracts
Position Employment Performance Submitted to Minimum Contract Agreement Department Competency level ( Y/N) Municipal Manager Director: Infrastructure Director: Human Settlements Director: Public Safety Director: Planning Social And Economic Development Director: Community
Services Director Corporate Services
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4.3 Staff development initiatives during the Financial Year
The municipality has, during the financial year ended 30 June 2016 conducted various training sessions. Total number of officials that have benefited from development initiatives is 387, this number is both Councillors and officials.
Below is the table illustrating the breakdown:
No of Beneficiaries Councillors trained 14 Officials trained 154 Interns (14 finance, 19 Infrastructure) 20 Experiential Learners 85 Abet learners 60 Apprentices (Employed) - Apprentices (Unemployed) 20 Bursary holders 34 Total number of beneficiaries 387
Key HR. statistics per functional area
The HR. statistics per functional area within the municipality are presented below
MM, Section 57 and line managers
Approved positions Number of Filled posts Vacant posts approved and
budgeted posts per position
1 Municipal Manager 1 1 0
2 Director: Social and Economic 1 1 0 Development
3 Director: Corporate Services 1 1 0
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4 Director: Health and 1 1 0
Environment
5 Director: Community Safety 1 1 0
6 Chief Financial Officer 1 1 0
7 Director: Technical Services 1 1 0
8 Director: Human Settlements 1 1 0
9 General Manager: Internal 1 0 1 Audit
10 General Manager: Speaker’s 1 0 1 Office
11 General Manager: Mqanduli 1 1 0 Unit
12 General Manager: Civil 1 0 1
Engineering
13 General Manager: Electrical 1 1 Engineering
14 General Manager: Local 1 1 0
Economic Development
15 General Manager: Integrated 1 0 1
Community development
16 General Manager : Supply Chain 1 1 0
17 General Manager: Revenue and 1 0 1 Accounting
18 General Manager: Mayor’s Office. 1 1 0
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Full time staff complement per functional area
Department Approved posts Vacant posts Filled posts
Health and Environment 60 157 9
Corporate Services 15 133 0
Budget and Treasury 13 172 0
Technical Services 53 262 34
Municipal Manager’s office 9 40 01
Community Safety 15 606 23
Social and Economic development 7 148 6
Human Settlement 10 118 01
Municipal Manager’s Office 9 40 01
Technical staff registered with professional bodies
Technical Service Total number of Total number Total number Total number (e.g. Water, technical service registered in the pending not yet Electricity etc…) Managers accredited registration registered in the professional confirmation in accredited body the accredited professional professional body body
Roads 02
Electricity 01
Human 04 01 02 01 Settlements
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Levels of education and skills
The municipality has a total of 1028 permanent employees. Their education level and skills are depicted in the table below: (an appropriate comment will follow based on the information in the table)
Total Number of Number of staff Number of staff with Number of staff staff without grade 12 Senior Certificate with Tertiary / only accredited professional training
1388 814 574 308
TRENDS ON TOTAL PERSONNEL EXPENDITURE
Financial Years Total Number Total Approved Personnel Percentage Of Staff Operating Budget expenditure of (salary and expenditure salary related)
2015-2016 1296 R1 152 209 512 R315 273 225 27,36%
2014-2015 1123 R980 629 000 R274 200 204 27.96%
2013-2014 1031 R651,726,000 R255,795,000 39%
4.4 PENSION AND MEDICAL AIDS
The municipality contributes 60% towards medical aid for each employee as a benefit with a membership to the below listed schemes.
The municipality contributes 18 % of the employee’s basic salary towards the employees’ pension fund.
NAMES OF PENSION NUMBER OF NAMES OF MEDICAL NUMBEROF FUND MEMBERS AIDS MEMBERS
Cape Joint pension 38 Key Health 03 fund (consolidated retirement fund)
National funds for 537 Bonitas 46 municipal workers
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Samwu pension 335 Hosmed 659 fund
SALA Pension Fund 0 Samwumed 63
Eastern Cape group 71 LAMAFF (LA Health) 35 municipal fund
Umtata Provident 47 Fund
HR. Policies and Plans Name of Policy Completed Date adopted by council Reviewed or comment on failure to adopt
% % 1 Abet policy N/A 2 Attraction and Retention N/A 3 Dress code N/A 4 Employee Assistance / Wellness N/A 5 HIV/Aids N/A 6 Human Resource N/A 7 Information Technology N/A 8 Internal bursary N/A 9 KSD coaching N/A 10 KSD induction N/A 11 KSD leadership& management N/A development 12 Occupational Health and Safety N/A 13 Sexual Harassment N/A 14 Skills Development N/A 15 Staff placement N/A 16 Study& examinations N/A 17 Succession planning and career N/A pathing 4.2.1 The policies that are in existence were approved by council on April 2010, all under review and HR Manual was reviewed on September 2015.
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Number of days and Cost of Sick Leave (excluding injuries on duty) Total sick Proportion Employee Total *Average Esti leave of sick s using employee sick leave mate leave sick leave s in post* per d without Employee cost medical s Salary band certificatio n
Days % No. No. Days R' 000 Lower skilled (Levels 1640 06 831 1.97 19-15) 2360 25 650 3.63 Skilled (Levels 14-11) Highly skilled production
(levels 10-9 ) Highly skilled 652 18 317 2.05 supervision (levels 8-6 Senior management 592 07 95 6.23 (Levels 5 upwards) 12 Nil 8 1.5 MM and S57
Total
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Skills Development Expenditure R'000 Emplo Original Budget and Actual Expenditure on skills development Year 1 yees as at Learnerships Skills programmes Other forms of Total the & other short training beginn courses Managem ing of Gender ent level the financi al year No. Original Actual Origina Actual Origina Actual Original Actua Budget l l Budget l Budget Budget MM and 13 S57 Female Male 6 Legislators, senior Female 127 600 74 200 officials and managers Male 48 500 73 902 Profession als Female 53 49 000 32 495 Male 69 15 470 Technician s and Female 98 73 500 8 900 50 070 associate profession als Male 117 24 500 10 830 Clerks 194 Female 167 000 27 960 184 005 Male 124 49 000 60 450 Service 448 and sales Female 69 500 000 000 13 100 44 890 workers 554 Male 121 500 000 000 13 100 72 075 Plant and machine Female 1 operators and assemblers Male 39 Elementary occupation Female 190 12 672 s Male 207 18 014 Sub total 1, 440 Female 500 264 562 575 171 Male
Total 0 0 0 0 0 0 0 *% and *R value of municipal salaries (original budget) allocated for workplace skills plan. %* *R
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Chapter 5: Financial Performance
5.1 Revenue by Source and Expenditure by Type
Description 201516 201415 Comparison Audited Full Year Actual Variance Varian R thousand Outcome Forecast Preaudit s ce % s Revenue By Source Property rates 169 603 180 579 159 482 (21 098) -13% Service charges - electricity revenue 291 449 281 198 239 978 (41 219) -17% Service charges - refuse revenue 33 451 34 934 26 765 (8 169) -31% Rental of facilities and equipment 14 991 15 193 15 068 (125) -1% Interest earned - external investments 4 444 3 341 4 399 1 058 24% Interest earned - outstanding debtors 28 397 32 000 25 091 (6 909) -28% Fines 965 1 026 967 (58) -6% Licences and permits 14 943 13 980 13 618 (361) -3% Transfers recognised – operational 280 123 264 689 220 077 (44 612) -20% Transfers recognised – capital 304 847 204 073 164 242 (39 831) -24% Other revenue 7 742 13 912 19 117 5 205 27%
- Public contributions and donations 108 911 (108 911) 100% Financial Assistance 5 112 178 325 173 213 97% Fair Value Adjustments 20 953 10 690 (10 263) -96% Gains on disposal of PPE 1 254 (5 670) (58 870) (53 200) 90% Total Revenue (excluding capital 1 152 209 1 174 230 1 018 951 (155 280) -15% transfers and contributions)
Expenditure By Type Employee related costs 330 298 328 907 310 827 (18 081) -6% Remuneration of councillors 23 132 22 687 20 854 (1 833) -9% Debt impairment 30 050 62 395 78 897 16 503 21% Depreciation & asset impairment 272 989 169 788 246 411 76 624 31% Finance charges 17 400 14 182 16 290 2 108 13% Bulk purchases 224 883 230 463 185 321 (45 142) -24% Lease Rentals on Operating Lease 28 262 24 408 26 198 1 790 7% Repairs and Maintenance 34 022 29 574 13 398 (16 176) -121% Contracted services 7 611 8 642 7 889 (753) -10% Transfers and grants 40 739 37 949 29 618 (8 331) -28% Other expenditure 120 981 85 140 87 518 2 378 3% Total Expenditure 1 130 367 1 014 135 1 023 221 9 086 1%
Surplus/(Deficit) 21 842 160 095 (4 270) (164 365) (0)
An increase of 15% and 1% on total revenue and total expenditure respectively has been noted. The following significant variances have been noted:- . Donations PPE received of R108.9 million and a reduction of R173.2 million on Financial Assistance received in the prior year as a result of reversal of loan by COGTA that was recognised as income. . Reduction of R76.6 million on depreciation and impairment of assets . An increase of R45.1 million on electricity bulk purchases Page 194 of 346
5.2 Revenue and Expenditure by VOTE
Vote Description 2015/16 2014/15 Final Actual Audited Variance Varian Budget Outcome s Actual ce % Revenue by Vote R’ 000 R’ 000 R’ 000 R’ 000 1 - EXECUTIVE & COUNCIL 2 301 2 162 1 953 (208) -11% 2 - FINANCE & ASSET MANAGEMENT 477 373 515 494 555 397 39 902 7% 3 - CORPORATE SERVICES 2 535 3 592 802 (2 790) -348% 4 - COMMUNITY SERVICES 35 756 36 850 38 185 1 335 3% 5 - PUBLIC SAFETY 22 258 21 535 16 981 (4 554) -27% 6 - PLANNING, SOCIAL AND 14 463 111 539 2 868 (108 672) -3790% ECONOMIC DEVELOPMENT 7 - HUMAN SETTLEMENT 58 840 48 038 29 550 (18 488) -63% 8 – INFRASTRUCTURE 538 683 435 020 373 216 (61 803) -17% Total Revenue by 1 152 209 1 174 230 1 018 951 (155 280) -15% Expenditure by Vote to be appropriated 1 - EXECUTIVE & COUNCIL 79 104 74 306 68 585 (5 721) -8% 2 - FINANCE & ASSET MANAGEMENT 410 440 373 881 467 521 93 640 20% 3 - CORPORATE SERVICES 59 349 44 086 47 567 3 481 7% 4 - COMMUNITY SERVICES 71 725 62 817 60 822 (1 996) -3% 5 - PUBLIC SAFETY 96 805 97 790 89 664 (8 126) -9% 6 - PLANNING, SOCIAL AND 25 709 22 776 17 983 (4 793) -27% ECONOMIC DEVELOPMENT 7 - HUMAN SETTLEMENT 23 599 20 229 19 440 (789) -4% 8 – INFRASTRUCTURE 363 637 318 250 251 639 (66 610) -26% Total Expenditure by Vote 1 130 367 1 014 135 1 023 221 9 086 1% Surplus/(Deficit) for the year 21 842 160 095 (4 270) (164 365) 3849%
5.3 Conditional Grants Received (Excluding MIG)
CONDITIONAL GRANTS RECEIVED 201516 201415 Grant Actual Grant DESCRIPTION Received Expenditure Received Actual Expenditure Financial Management Grant 1 675 000 1 224 031 1 600 000 1 600 000 Municipal Systems Improvement Grant 930 000 882 481 934 000 1 021 133 Infrastructure Skills Development Grant 3 200 000 3 502 737 3 000 000 3 623 126 Integrated National Electrification Program 22 000 000 24 567 965 0 57 890 690 TOTAL 27 805 000 30 177 214 5 534 000 64 134 949
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5.4 Debtors Age Analysis
201516 DESCRIPTION TOTAL RATES 184 814 921 (1 SEWERAGE 654) WATER (1 ELECTRICITY 250) REFUSE 89 069 758 8 SUNDRY 477 1 594 SUNDRY 507 RENTALS 99 301 744 (3 840 OLD BALS BLANK ETC 963) ELECTRICITY:METERED 35 000 739 TOTAL 405 946 277
Consumer Debtors 35,000,739 (3,840,963)
99,301,744 184,814,921
1,594,507 (1,654)
8,477 89,069,758 (1,250) RATES SEWERAGE WATER ELECTRICITY REFUSE SUNDRY SUNDRY RENTALS OLD BALS BLANK ETC ELECTRICITY:METERED
201516 201415 MOVEMENT TYPE DESCRIPTION TOTAL TOTAL VARIANCE % 184 136 48 427 1 RATES 814 921 387 034 887 36%
2 SEWERAGE (1 654) - (1 654) 100%
3 WATER - - 100%
4 ELECTRICITY (1 250) - (1 250) 100% 78 10 432 5 REFUSE 89 069 758 637 326 432 13%
6 SUNDRY 8 477 9 390 (913) -10% 1 (398 7 SUNDRY 1 594 507 993 032 525) -20% 84 14 690 8 RENTALS 99 301 744 611 098 646 17% (3 (3 9 OLD BALS BLANK ETC 840 963) 842 063) 1 100 0%
Page 196 of 346
29 5 616 10 ELECTRICITY:METERED 35 000 739 384 031 707 19% 405 327 78 766 TOTAL 946 277 179 848 429 24%
An increase of 24 % on outstanding debtors has been noted from the report above it is clear that recovery of rates debtors is slow.
Balance Type CURRENT 30 Days 60 Days 90 Days 120 Days 150 Days 180 Days 210 Days 240 Days 270 Days 300 Days TOTAL PENALTIES DEBTOR TOTAL RATES 01 6 158 561 3 211 527 2 953 284 2 532 181 2 485 541 2 369 437 2 167 402 2 488 711 1 744 698 20 795 532 110 997 457 157 904 332 26 910 589 184 814 921 SEWERAGE 02 -1 654 0 0 0 0 0 0 0 0 0 0 -1 654 0 -1 654 WATER 03 0 0 0 0 0 0 0 0 0 0 0 0 0 0 ELECTRICITY 04 -1 250 0 0 0 0 0 0 0 0 0 0 -1 250 0 -1 250 REFUSE 05 3 767 542 1 353 763 1 340 472 1 205 927 1 408 091 1 207 593 1 066 878 1 047 911 1 120 460 9 698 044 51 806 589 75 023 269 14 046 489 89 069 758 SUNDRY 06 -1 332 0 0 0 0 0 0 0 0 0 9 809 8 477 0 8 477 SUNDRY 07 -96 716 3 620 0 0 0 0 0 0 0 0 1 687 602 1 594 507 0 1 594 507 RENTALS 08 1 246 224 1 037 505 993 637 934 267 879 673 862 149 858 648 854 451 855 482 799 387 59 745 065 69 066 489 30 235 254 99 301 744 OLD BALS BLANK ETC 09 -3 911 528 0 0 0 0 0 0 0 0 0 70 564 -3 840 963 0 -3 840 963 ELECTRICITY METERED 10 12 970 182 6 063 680 1 922 763 2 655 714 2 047 297 1 684 782 1 236 307 279 029 291 288 219 928 3 458 116 32 829 086 2 171 652 35 000 739 20 130 029 11 670 095 7 210 156 7 328 089 6 820 603 6 123 961 5 329 235 4 670 103 4 011 928 31 512 891 227 775 202 332 582 293 73 363 985 405 946 277
Page 197 of 346
APPENDICES DESCRIPTIONS Appendix A: Councillors, Committee Allocation and Council Attendance
LIST OF COUNCILLORS, WARDS AND THEIR POLITICAL PARTIES
NAME OF COUNCILLOR POLITICAL PARTY WARD / PR
Honourable Speaker, ANC PR Councillor D.M. Zozo Her Worship the Executive ANC PR Mayor, Councillor N. Ngqongwa Councillor B.D. Bara DA PR Councillor S. Budu ANC 10 Councillor M. Bunzana UDM PR Councillor V. Dangala UDM PR Councillor J. Dlamini UDM PR Councillor F.V. Dondashe ANC PR Councillor E.M. Fileyo ANC 25 Councillor M. Gogo UDM PR Councillor N.R. Gcingca ANC 2 Councillor Z. M. Gusana ANC 16 Councillor V.O. Gwadiso ANC 20 Councillor M. Jafta ANC 18 Councillor N.C. Jijana ANC 01 Councillor R. Knock DA PR Councillor N.S. Kwaza ANC 35 Councillor K.N. Kwetana ANC 06 Councillor N.M. Luqhide ANC 09 Councillor L.M. Luwaca UDM PR Councillor A.Z. Luyenge UDM PR Councillor L.R. Madyibi ANC PR Councillor Z. Magazi COPE PR Councillor E.T. Mapekula ANC 08 Councillor Z.V. Maqabuka COPE PR Councillor H.N. Maroloma UDM 22 Councillor X.T. Matiti ANC 23 Councillor M. Mavukwana ANC 21 Councillor B. Mazini ANC 19 Councillor K.K. Mdikane ANC PR Councillor M. Menzelwa ANC 11 Councillor L.L. Mkhonto ANC 33 Councillor S. Mlamli ANC PR Page 198 of 346
Councillor M.S. Mlandu ANC PR Councillor Z.N. Mncunza UDM PR Councillor B. Momoza ANC 12 Councillor N. Mpemnyama ANC 26 Councillor M.J. Msakeni INDEPENDENT 24 Councillor M. Mtirara ANC PR Councillor T.M. Mtirara ANC 32 Councillor M.H. Mtirara ANC 17 Councillor F.M. Mtwa ANC 29 Councillor N. Mtwa UDM PR Councillor N.F. Mzimane UDM PR Councillor M. Ngabayena ANC 15 Councillor N.A. Ndlela ANC 03 Councillor B. Ndlobongela UDM PR Councillor G.N. Nelani ANC 05 Councillor F.R.S. Ngcobo ANC 07 Councillor S.S. Njemla ANC 30 Councillor T. Nomvete ANC 14 Councillor P.P. Nontshiza CASA PR Councillor T. Nqadolo ANC 28 Councillor L.N. Ntlonze ANC PR Councillor N. Nyangani ANC PR Councillor S. Nyengane ANC PR Councillor M. Nyoka ANC 27 Councillor N. Pali UDM PR Councillor M. Plam UDM PR Councillor N.S.S. Qina- Meyi UDM PR Councillor N. Qwase UDM PR Councillor V.N. Roji ANC 13 Councillor W.V. Sanda UDM PR Councillor N. Sikhonkothela ANC PR Councillor L.A. Tshiseka UDM PR Councillor K.W. Tsipa UDM PR Councillor M.I. Xentsa ANC 34 Councillor V.N. Xhobani ANC 04 Councillor M.A. Zimela ANC 31
MAYORAL COMMITTEE 2015/16 PRESENT = 1
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ABSENT = -
LEAVE OF ABSENCE = LOA
COMMITTEE MEMBERS
DATE 01-07- 23-07- 26-08- 23-09- 12-10- 26-10-15 02-12- 15-12- 26-01- 23-02- 03- 24- 25- 15 15 15 15 15 15 15 16 16 05-16 05-16 05- 16
1. 1 1 1 1 1 1 LOA 1 1 1 1 1 1 Counci llor N. Ngqong wa 2. LOA LOA LOA - - LOA LOA - LOA 1 LOA LOA LO Counci A llor F.M. Mtwa 3. - 1 - LOA LOA 1 - 1 1 1 1 1 1 Counci llor N.A. Ndlela 4. 1 1 1 1 1 1 1 1 1 1 LOA 1 1 Counci llor L.N. Ntlonze 5. 1 1 1 1 - 1 1 1 LOA LAO 1 1 1 Counci llor G.N. Nelani 6. 1 1 LOA 1 LOA 1 - 1 1 1 1 1 1 Counci llor F.R.S. Ngcobo 7. LOA LOA LOA 1 1 LOA LOA 1 1 1 LOA - Counci llor L. Madyib i 8. 1 1 1 1 LOA LOA 1 1 LOA 1 1 1 Counci llor N. Gcingc a 9. 1 1 1 LOA 1 1 - 1 - 1 LOA 1 1 Counci llor M.S. Mland u
ATTENDANCE REGISTER FOR COMMITTEE MEETINGS 2015-16
COMMUNITY SERVICES COMMITTEE Page 200 of 346
2015/16 1 = PRESENT - = ABSENT LOA = LEAVE OF ABSENCE
NAME & 13.10.15 10.02.16 09.06.16 SURNAME Cllr L. Madyibi - 1 1 LOA Chairperson
Cllr N.A. Ndlela - New 1 Chairperson
Cllr M.H. Mtirara 1 1 1
Cllr X. Matiti - LOA 1
Cllr L.L. Mkhonto 1 LOA 1
Cllr B. Momoza LOA 1 1
Cllr N.S. Kwaza 1 1 -
Cllr S. Budu LOA - 1
Cllr N. Nyangani - 1 -
Cllr P.P. Nontshiza - - - Cllr L. Tshiseka 1 1 -
Cllr J. Dlamini LOA 1 - Cllr B.D. Bara 1 1 1 Cllr Z. Magazi 1 - -
PUBLIC SAFETY COMMITTEE
PRESENT = 1 Page 201 of 346
ABSENT = - LEAVE OF ABSENCE = LOA
NAME & SURNAME 19.08.15 17.03.16 Cllr M.S. Mlandu- Chairperson 1 1
Cllr T. Nomvete 1 1
Cllr M. Mavukwana 1 -
Cllr M.I. Xentsa - 1
Cllr N.V. Roji 1 1
Cllr N. Mpemnyama - 1
Cllr K.K. Mdikane 1 LOA
Cllr M. Mtirara - -
Cllr B.D. Bara 1 1
Cllr V.W. Sanda - 1
Cllr V. Dangala 1 -
Cllr B.D. Bara 1 1
Cllr Z. Magazi 1 -
FINANCE COMMITTEE Page 202 of 346
PRESENT = 1 ABSENT = - LEAVE OF ABSENCE = LOA
NAME 13.07.15 13.07.15 18.08.15 17.09.15 15.10.15 16.02.16 17.03.16 20.06.16 Cllr F.R.S. Ngcobo- 1 1 1 1 1 1 1 1 Chairperson
Cllr S. Nyengane LOA LOA 1 1 1 1 1 1
Cllr M.H. Mtirara LOA LOA 1 1 1 1 1 1
Cllr M.A. Zimela 1 1 1 1 LOA LOA LOA 1
Cllr N.V Xhobani 1 1 1 1 LOA 1 1 1
Cllr K.N Kwetana 1 1 - 1 LOA LOA 1 1
Cllr V.O. Gwadiso 1 1 LOA 1 1 - - -
Cllr F.V. Dondashe 1 1 1 1 1 1 1 1
Cllr R. Knock 1 1 1 1 1 1 1 -
Cllr K.W. Tsipa 1 1 1 1 1 1 - 1
Cllr M. Bunzana - - 1 1 1 - - 1
Cllr T. Nqadolo 1 1 1 1 1 1 1 1
Page 203 of 346
PLANNING AND DEVELOPMENT COMMITTEE
PRESENT = 1 ABSENT = - LEAVE OF ABSENCE = LOA
NAME 02.07.15 18.08.15 15.09.15 17.11.15 15.03.16 Cllr G.N. Nelani - Chairperson 1 1 1 1 1
Cllr M. Nyoka 1 1 1 1 1
Cllr N.M. Luqhide - 1 1 LOA 1
Cllr M. Jafta - 1 1 1 1
Cllr T. Nomvete 1 LOA LOA 1 1
Cllr N. Nyangani 1 1 1 1 LOA
Cllr M. Ngabayena LOA LOA - LOA 1
Cllr M.A. Zimela - - - - -
Cllr P.P. Nontshiza - - 1 - -
Cllr B.D Bara 1 1 1 1 1
Cllr N. Qwase 1 LOA - 1 -
Cllr N. Sikonkotela 1 - LOA 1 -
LOCAL ECONOMIC DEVELOPMENT COMMITTEE
PRESENT = 1 ABSENT = - LEAVE OF ABSENCE = LOA
NAME 20.08.15 08.09.15 12.04.16 08.06.16 Cllr M.T. Mtirara - Chairperson 1 1 1 1
Cllr V.O. Gwadiso LOA LOA 1 LOA
Cllr E.M. Fileyo 1 1 - -
Cllr B. Mazini 1 1 1 1
Page 204 of 346
Cllr E.T. Maphekula 1 1 1 1
Cllr N. Mpemnyama - 1 1
Cllr N.M. Luqhide 1 1 1 1
Cllr X.T. Matiti 1 1 - 1
Cllr F.V. Dondashe 1 - - 1
Cllr P. P. Nontshiza - 1 1 -
Cllr B.D Bara 1 1 1 -
Cllr H.M. Maroloma LOA 1 1 LOA
Cllr N. Mzimane - - - -
Cllr Z.A. Luyenge 1 1 - 1
Cllr Z. Magazi - LOA - -
CORPORATE SERVICES COMMITTEE 2015/2016
PRESENT = 1 ABSENT = - LEAVE OF ABSENCE = LOA
NAME & SURNAME
Meeting date 26/7/2015 08/3/2016
1. Councillor L.N. Ntlonze 1 1 (Chairperson)
2. Councillor K.N. Kwetana 1 1
3. Counillor M. Nyoka LOA _
4. Councillor B. Ndlobongela 1 LOA
5. Councillor L.M.Luwaca 1 1
6. Councillor C.N. Jijana LOA _
7. Councillor B. Mazini 1 1
8. Councillor R. Knock 1 1
9. Councillor V.N. Roji 1 _
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10. Councillor M. Zimela 1 1
11. Councillor M. Menzelwa _ 1
12. Councillor M. Mtirara _ _
INFRASTRUCTURE COMMITTEE 2015/2016 PRESENT = 1 ABSENT = - LEAVE OF ABSENCE = L.O.A
NAME & SURNAME
Meeting dates 21/08/15 06/10/15 02/12/15
1. Councillor N.R. Gcingca 1 1 1 (Chairperson)
2. Councillor M. Jafta 1 LOA 1
3. Counillor L.L. Mkhonto 1 1 LOA
4. Councillor N. Roji 1 1 1
5. Councillor M. Gogo _ 1 _
6. Councillor R. Knock 1 1 1
7. Councillor M. Menzelwa 1 1 1
8. Councillor G.M. Fileyo 1 _ 1
9. Councillor N. Mtwa 1 1 _
10. Councillor S.Budu 1 _ _
11. Councillor . S.S. 1 1 1 Njemla
12 Councillor N. 1 1 1 Skhonkothela
13 Councillor P.P. _ _ _ Nontshiza
14. Councillor Z.V. 1 _ LOA Maqabuka
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SPECIAL PROGRAMMES UNIT COMMITTEE PRESENT =1 LEAVE OF ABSENCE = LOA ABSENT = -
SOCIAL SPECIAL PROGRAMME UNIT 25-11-15 COMMITTEE Councillor L.Ntlonze (Caretaker Chaiperson) 1 Councillor N.C. Jijana 1 Councillor N.S. Kwaza 1 Councillor E.T Mapekula 1 Councillor M. Ngabayena 1 Councillor P. Plam - Councillor N. Sikhonkothela 1 Councillor V.N. Xhobani 1 Councillor N.F. Mzimane - Councillor S.S. Qina - Councillor S. Mlamli - Councillor P.P. Nontshiza - Councillor L.L.Mkhonto 1
Page 207 of 346
DISASTER MANAGEMENT COMMITTEE
PRESENT =1 LEAVE OF ABSENCE = LOA ABSENT = -
NAME 01-09-15 01-10-15 03-11-15 22-04-16
Councillor N. Ndlela 1 1 1 1 (Chaiperson) Councillor B. Momoza 1 1 1 1 Councillor S.S. Njemla LOA - 1 1 Councillor T. Nqadolo 1 1 - - Councillor M.I. Xentsa 1 - 1 - Councillor M. Mavukwana 1 1 1 1 Councillor S. Mlamli - - - Councillor R. Knock 1 1 1 1 Councillor N.Z. Mncunza 1 1 - LOA Councillor N. Pali - - - 1 Councillor K. Mdikane LOA LOA LOA 1
ATTENDANCE REGISTER
COUNCILLORS
2015/16
1 = PRESENT - = ABSENT LOA = LEAVE OF ABSENCE
DATE OF 31.0 28.08. 30.09. 06.11. 27.11. 10.12 14.01. 27.01 26.0 07.04 27.05 10.0 30.06.1 MEETINGS 7.15 15 15 15 15 .15 16 .16 2.16 .16 .16 6.16 6
The 1 LOA 1 1 LOA 1 1 1 1 1 1 1 1 Honourable Speaker, Cllr D.M. Zozo
Her 1 1 1 1 1 LOA 1 1 1 1 1 1 1 Worship the Executive Mayor, Cllr N. Ngqongwa
Page 208 of 346
Cllr B.D. 1 1 1 1 1 - - 1 LO 1 1 - 1 Bara A
Councillor 1 - 1 LOA LOA 1 - - 1 1 1 - 1 S. Budu
Cllr M. 1 - - 1 - 1 1 - - 1 1 - - Bunzana
Cllr V. - LOA - 1 1 LOA LOA - - 1 - - - Dangala
Cllr J. LO - 1 LOA - 1 - - - 1 1 - LOA Dlamini A
Cllr F.V. 1 - 1 1 1 1 1 1 - LOA LOA 1 1 Dondashe Cllr E.M. 1 1 1 1 - 1 1 - 1 - - 1 - Fileyo
Cllr M. 1 1 - 1 1 - 1 - 1 1 - 1 - Gogo
Cllr N.R. 1 1 1 1 1 1 LOA LOA 1 LOA 1 LO 1 Gcingca A
Cllr 1 1 1 1 1 1 1 1 1 1 1 1 1 Z.M.Gusan a
Cllr V.O. 1 1 1 1 - 1 1 LOA 1 1 1 1 LOA Gwadiso
Cllr M. 1 1 1 1 1 1 1 1 1 1 1 1 LOA Jafta
Cllr N.C. 1 1 1 1 1 1 1 LOA 1 1 LOA 1 1 Jijana
Cllr R. LO 1 1 LOA 1 1 1 1 LO 1 1 - 1 Knock A A
Cllr N.S. 1 1 1 1 1 1 1 1 1 1 1 - - Kwaza Cllr K.N. 1 1 1 1 1 LOA 1 1 1 1 1 1 1 Kwetana
Cllr N.M. 1 1 1 1 1 1 1 1 1 1 1 1 1 Luqhide
Cllr L.M. - 1 LOA - 1 1 - 1 - 1 1 LO - Luwaca A
Page 209 of 346
Cllr A.Z. 1 1 - 1 1 LOA 1 LOA LO 1 - LO - Luyenge A A
Cllr L.R. 1 1 1 1 1 1 1 1 1 1 LOA 1 - Madyibi
Cllr Z. LO 1 LOA - LOA 1 1 LOA LO LOA - - 1 Magazi A A
Cllr E.T. 1 1 1 1 LOA 1 1 1 1 1 1 1 1 Mapekula
Cllr Z.V. LO 1 LOA LOA LOA 1 LOA 1 1 - 1 - - Maqabuka A
Cllr H.N. LO 1 - 1 1 1 1 1 1 1 1 - 1 Maroloma A
Cllr X.T. 1 1 1 1 1 1 1 1 LO LOA - LO 1 Matiti A A
Cllr M. 1 1 1 1 1 1 LOA LOA - LOA - LO 1 Mavukwan A a
Cllr B. 1 1 1 LOA 1 1 1 1 1 1 1 1 1 Mazini
Cllr K.K. LO 1 LOA 1 LOA 1 - 1 - LOA LOA 1 LOA Mdikane A
Cllr M. 1 1 - 1 1 - 1 1 1 1 1 1 1 Menzelwa
Cllr L.L. 1 1 1 1 1 1 1 1 1 1 1 1 1 Mkhonto
Cllr S. - 1 - - 1 - 1 - 1 - LOA - - Mlamli
Cllr M.S. - 1 1 1 1 1 1 - 1 1 1 1 1 Mlandu
Cllr Z.N. - 1 1 1 ------Mncunza
Cllr B. 1 1 1 1 1 1 1 1 1 1 1 - 1 Momoza
Cllr N. 1 1 1 1 1 1 1 1 1 1 1 1 1 Mpemnyam a
Page 210 of 346
Cllr M.J. 1 1 1 1 1 - 1 1 1 1 1 1 - Msakeni
Cllr M. - 1 1 1 1 1 1 1 - - LOA LO 1 Mtirara A
Cllr T.M. 1 1 1 1 LOA 1 1 1 LO - 1 1 1 Mtirara A
Cllr M.H. 1 1 1 1 LOA 1 - - 1 1 1 1 1 Mtirara
Cllr F.M. LO 1 LOA - LOA LOA 1 - LO LOA LOA LO - Mtwa A A A
Cllr N. LO 1 - 1 - 1 1 - - - 1 - 1 Mtwa A
Cllr N.F. 1 1 - 1 - LOA 1 1 - 1 1 - - Mzimane
Cllr M. 1 1 1 - 1 - 1 1 LO 1 1 - - Ngabayena A
Cllr N.A. - 1 1 - 1 LOA 1 1 1 1 1 1 1 Ndlela
Cllr B. - 1 - 1 - 1 - 1 - - 1 - - Ndlobongel a
Cllr Z. - - - - - 1 - - - 1 - 1 1 Mzamane
Cllr G.N. 1 1 1 1 1 1 1 1 1 1 1 1 1 Nelani
Cllr F.R.S. 1 1 1 1 LOA 1 1 1 1 1 1 1 1 Ngcobo
Cllr S.S. 1 1 1 1 1 1 1 1 1 1 1 LO 1 Njemla A
Cllr T. LO 1 1 1 1 1 1 LOA LO 1 1 1 1 Nomvete A A
Cllr P.P. 1 1 1 LOA LOA 1 - 1 1 1 1 - 1 Nontshiza
Cllr T. 1 1 1 1 1 1 1 1 1 1 1 1 1 Nqadolo
Page 211 of 346
Cllr L.N. LO 1 LOA LOA 1 1 1 1 LO 1 1 1 1 Ntlonze A A
Cllr N. LO 1 1 LOA 1 1 - 1 1 1 1 1 1 Nyangani A
Cllr M. 1 1 1 LOA LOA 1 LOA 1 LO 1 1 LO 1 Nyoka A A
Cllr N. Pali 1 1 - - 1 - - - - - 1 - -
Councillor 1 1 - 1 - 1 - - - 1 1 - 1 M. Plam
Cllr 1 1 1 1 - 1 - - 1 1 1 1 1 S.Nyengane
Cllr N.S.S. LO 1 - - LOA - 1 1 - - - - - Qina A
Cllr N. LO 1 1 LOA - - LOA - 1 1 1 - LOA Qwase A
Cllr V.N. 1 1 1 1 1 1 1 1 1 1 1 1 LOA Roji
Cllr W.V. 1 1 - 1 LOA - - - 1 1 LOA 1 - Sanda
Cllr N. 1 1 1 LOA 1 - - 1 1 - - 1 - Sikhonkot hela
Cllr L.A. 1 1 - 1 - - 1 - - 1 1 - - Tshiseka
Cllr K.W. 1 1 LOA 1 LOA - 1 LOA - 1 1 1 1 Tsipa
Cllr M.I. 1 1 1 1 1 1 1 1 1 1 1 1 1 Xentsa
Cllr V.N. - 1 1 1 1 1 1 1 1 1 - 1 1 Xhobani
Cllr M.A. 1 - 1 1 1 1 1 1 1 1 - 1 LOA Zimela
Page 212 of 346
APPENDIX B
King Sabata Dalindyebo Municipality Financial Statements for the year ended 30 June 2016
Statement of Financial Position as at 30 June 2016 Figures in Rand Notes 2016 2015
Restated*
Assets
Current Assets
Inventories 3 7 656 526 6 718 666
Receivables from exchange transactions 4 31 031 851 27 741 258
Receivables from non-exchange transactions 5 17 927 938 12 478 175
VAT receivable 6 12 708 503 -
Cash and cash equivalents 7 12 501 813 40 186 754
81 826 631 87 124 853
Non-Current Assets
Investment property 8 228 859 454 205 205 355
Property, plant and equipment 9 2 330 679 029 2 172 958 634
Intangible assets 10 1 317 251 1 694 387
Heritage assets 11 4 697 000 4 697 000
2 565 552 734 2 384 555 376
Total Assets 2 647 379 365 2 471 680 229
Liabilities
Current Liabilities
Other financial liabilities 12 9 228 269 9 255 764
Finance lease obligation 13 843 746 10 704 766
Payables from exchange transactions 14 256 704 222 224 488 997
VAT payable 6 - 8 487 640
Consumer deposits 15 15 718 570 12 756 530
Unspent conditional grants and receipts 16 24 423 252 22 461 136
306 918 059 288 154 833
Non-Current Liabilities
Other financial liabilities 12 31 962 542 41 757 159
Finance lease obligation 13 435 514 4 909 531
Provisions 17 37 228 566 38 936 390
69 626 622 85 603 080
Total Liabilities 376 544 681 373 757 913
Net Assets 2 270 834 684 2 097 922 316
Reserves
Revaluation reserve 18 383 988 031 384 413 531
Self insurance reserve 19 3 045 886 2 692 908
Accumulated surplus 1 883 800 767 1 710 815 877
Total Net Assets 2 270 834 684 2 097 922 316
* See Note 48
Page 213 of 346
King Sabata Dalindyebo Municipality Financial Statements for the year ended 30 June 2016
Statement of Financial Performance Figures in Rand Notes 2016 2015
Restated*
Revenue
Revenue from exchange transactions
Service charges 316 131 566 266 742 897 20
Rental of facilities and equipment 21 15 193 296 15 068 459
Licences and permits 22 13 979 592 13 618 392
Other income 23 13 911 831 19 117 291
Investment revenue 24 35 341 040 29 490 272
Total revenue from exchange transactions 394 557 325 344 037 311
Revenue from non-exchange transactions
Taxation revenue
Property rates 25 180 579 393 159 481 681 Transfer revenue
Government grants and subsidies 468 762 307 384 318 650 26
Financial assistance 27 5 111 655 178 325 110
Public contributions and donations 27 108 910 623 -
Fines, penalties and forfeits 28 1 025 516 967 496
Total revenue from non-exchange transactions 764 389 494 723 092 937
Total revenue 1 158 946 819 1 067 130 248 28
Expenditure
Employee related costs (328 907 200) (310 826 620) 29
Remuneration of councillors 30 (22 687 264) (20 853 933)
Depreciation and amortisation 31 (165 781 327) (245 599 769)
Impairment loss 32 (326 443) (11 659 395)
Finance costs 33 (14 181 970) (16 289 902)
Lease rentals on operating lease (24 408 439) (26 198 250) Debt Impairment (62 068 327) (67 237 967) 34
Repairs and maintenance 35 (29 574 093) (13 398 243)
Bulk purchases 36 (227 139 338) (185 320 519)
Contracted services 37 (8 642 297) (7 889 213)
Grants and Subsidies paid 38 (37 943 162) (29 617 556)
General Expenses 39 (85 868 159) (87 517 761)
Total expenditure (1 007 528 019)(1 022 409 128)
Operating surplus 151 418 800 44 721 120
Fair value adjustments 40 20 953 145 10 690 455
Gain on write-off of finance lease liability 4 669 473 -
Loss on disposal of non-current assets (4 056 484) (66 829 085)
21 566 134 (56 138 630)
Surplus (deficit) for the year 172 984 934 (11 417 510)
* See Note 48 Page 214 of 346
King Sabata Dalindyebo Municipality Financial Statements for the year ended 30 June 2016
Statement of Changes in Net Assets Revaluation Insurance Total reserves Accumulated Total net Figures in Rand reserve reserve surplus assets
Opening balance as previously 385 072 030 2 370 759 387 442 789 1 805 220 704 2 192 663 493 reported Adjustments Correction of errors - - - (82 987 317) (82 987 317)
Balance at 01 July 2014 as restated* 385 072 030 2 370 759 387 442 789 1 722 233 387 2 109 676 176 Changes in net assets Revaluation of assets (658 499) - (658 499) - (658 499) Insurance reserve movement - 322 149 322 149 - 322 149
Net income (losses) recognised directly in (658 499) 322 149 (336 350) - (336 350) net assets Surplus for the year - - - (11 417 510) (11 417 510)
Total recognised income and expenses for (658 499) 322 149 (336 350) (11 417 510) (11 753 860) the year Total changes (658 499) 322 149 (336 350) (11 417 510) (11 753 860)
Opening balance as previously 384 413 531 2 692 908 387 106 439 1 799 607 673 2 186 714 112 reported Adjustments Correction of errors - - - (88 791 840) (88 791 840)
Restated* Balance at 01 July 2015 384 413 531 2 692 908 387 106 439 1 710 815 833 2 097 922 272 as restated* Changes in net assets Surplus for the year - - - 172 984 934 172 984 934 Revaluation of assets (425 500) - (425 500) - (425 500) Movement In Self insurance - 352 978 352 978 - 352 978
Total changes (425 500) 352 978 (72 522) 172 984 934 172 912 412
Balance at 30 June 2016 383 988 031 3 045 886 387 033 917 1 883 800 767 2 270 834 684 Notes 18 19
* See Note 48 Page 215 of 346
King Sabata Dalindyebo Municipality Financial Statements for the year ended 30 June 2016
Cash Flow Statement Figures in Rand Notes 2016 2015
Restated*
Cash flows from operating activities
Receipts
Taxation 140 438 140 133 933 589
Receipts from Customers 331 250 731 297 011 445
Grants 469 048 063 295 092 283
Interest income 35 407 427 29 490 272
976 144 361 755 527 589
Payments
Employee costs (353 302 288) (338 200 669)
Suppliers (395 420 573) (336 204 982)
Finance costs (14 181 971) (16 289 899)
(762 904 832) (690 695 550)
Net cash flows from operating activities 213 239 529 64 832 039 43
Cash flows from investing activities
Purchase of property, plant and equipment 9 (328 546 432) (156 479 077)
Proceeds from sale of property, plant and equipment 9 6 718 919 759 478
Purchase of investment property 8 (3 497 454) -
Purchase of other intangible assets 10 - (1 422 438)
Acquisition of Self Insurance (352 978) (322 149)
Donations of property, plant and equipment received 108 910 624 -
Net cash flows from investing activities (216 767 321) (157 464 186)
Cash flows from financing activities
Repayment of other financial liabilities (9 822 112) (168 684 199)
Fair Value Adjustments - 178 325 110
Finance lease payments (14 335 037) (5 217 749)
Other non cash item - (83 725)
Net cash flows from financing activities (24 157 149) 4 339 437
Net decrease in cash and cash equivalents (27 684 941) (88 292 710)
Cash and cash equivalents at the beginning of the year 40 186 754 128 479 464
Cash and cash equivalents at the end of the year 12 501 813 40 186 754
* See Note 48
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King Sabata Dalindyebo Municipality Financial Statements for the year ended 30 June 2016
Statement of Comparison of Budget and Actual Amounts
Budget on Cash Basis
Approved Adjustments Final Budget Actual amounts Difference Reference budget on comparable between final
basis budget and
Figures in Rand Actual
Statement of Financial Performance
Revenue
Revenue from exchange transactions
Service charges 317 314 749 3 583 542 320 898 291 316 131 566 (4 766 725) Ref to note 44
14 990 678 202 618 Rental of facilities and 20 587 709 (5 597 031) 15 193 296 Ref to note 44 equipment Licences and permits 22 869 013 (7 926 447) 14 942 566 13 979 592 (962 974) Ref to note 44
11 387 324 2 524 507 Other income 19 497 677 (8 110 353) 13 911 831 Ref to note 44 32 841 591 2 499 449 Interest received 36 640 040 (3 798 449) 35 341 040 Ref to note 44
Total revenue from exchange 416 909 188 (21 848 738) 395 060 450 394 557 325 (503 125) transactions
Revenue from non-exchange transactions
Taxation revenue
169 960 118 10 619 275 Ref to note 44 Property rates 169 602 951 357 167 180 579 393 Transfer revenue
Government grants & subsidies 501 254 573 78 603 506 579 858 079 468 762 307 (111 095 772) Ref to note 44 5 111 655 - Financial Assistance - 5 111 655 5 111 655 Ref to note 44 - 108 910 623 Public contributions and - - 108 910 623 Ref to note 44 donations 965 225 60 291 Ref to note 44 Fines, Penalties and Forfeits 2 601 209 (1 635 984) 1 025 516
Total revenue from non- 673 458 733 82 436 344 755 895 077 764 389 494 8 494 417 exchange transactions
Total revenue 1 090 367 921 60 587 606 1 150 955 527 1 158 946 819 7 991 292
Expenditure
Personnel (344 746 007) 1 855 498 (342 890 509) (328 907 200) 13 983 309 Ref to note 44 (23 132 404) 445 140 Remuneration of councillors (22 483 372) (649 032) (22 687 264) Ref to note 44 (229 082 069) 63 300 742 Depreciation and amortisation (205 000 000) (24 082 069) (165 781 327) Ref to note 44 (8 906 666) 8 580 223 Impairment loss/ Reversal of - (8 906 666) (326 443) Ref to note 44 impairments Finance costs (5 400 000) (17 717 214) (23 117 214) (14 181 970) 8 935 244 Ref to note 44 (26 590 270) 2 181 831 Lease rentals on operating lease (44 410 743) 17 820 473 (24 408 439) Ref to note 44 (65 050 000) 2 981 673 Debt Impairment (30 050 000) (35 000 000) (62 068 327) Ref to note 44 (34 022 490) 4 448 397 Repairs and maintenance (32 876 542) (1 145 948) (29 574 093) Ref to note 44 (224 883 103) (2 256 235) Ref to note 44 Bulk purchases (224 883 103) - (227 139 338) (8 552 210) (90 087) Ref to note 44 Contracted Services (7 180 000) (1 372 210) (8 642 297) (50 890 193) 12 947 031 Grants and Subsidies Paid (47 014 950) (3 875 243) (37 943 162) Ref to note 44 (96 709 286) 10 841 127 General Expenses (104 103 506) 7 394 220 (85 868 159) Ref to note 44
Total expenditure (1 068 148 223) (65 678 191)(1 133 826 414)(1 007 528 019) 126 298 395
Operating surplus 22 219 698 (5 090 585) 17 129 113 151 418 800 134 289 687
- 20 953 145 Fair value adjustments - - 20 953 145 Ref to note 44 - 4 669 473 Gain on write-off of finance lease - - 4 669 473 Page 217 of 346
liability Loss on disposal of non-current - 1 253 746 1 253 746 (4 056 484) (5 310 230) Ref to note 44
assets L
Page 218 of 346
King Sabata Dalindyebo Municipality Financial Statements for the year ended 30 June 2016
Statement of Comparison of Budget and Actual Amounts
Budget on Cash Basis
Approved Adjustments Final Budget Actual amounts Difference Reference budget on comparable between final
basis budget and
Figures in Rand Actual
- 1 253 746 1 253 746 21 566 134 20 312 388
Surplus before taxation 22 219 698 (3 836 839) 18 382 859 172 984 934 154 602 075
Actual Amount on Comparable 22 219 698 (3 836 839) 18 382 859 172 984 934 154 602 075
Basis as Presented in the
Budget and Actual
Comparative Statement
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King Sabata Dalindyebo Municipality Financial Statements for the year ended 30 June 2016
Accounting Policies
1. Presentation of Financial Statements
The financial statements have been prepared in accordance with the Standards of Generally Recognised Accounting Practice (GRAP), issued by the Accounting Standards Board in accordance with Section 122(3) of the Municipal Finance Management Act (Act 56 of 2003).
These financial statements have been prepared on an accrual basis of accounting and are in accordance with historical cost convention as the basis of measurement, unless specified otherwise.
In the absence of an issued and effective Standard of GRAP , accounting policies for material transactions, events or conditions were developed in accordance with paragraphs 8, 10 and 11 of GRAP 3 as read with Directive 5.
Assets, liabilities, revenues and expenses were not offset, except where offsetting is either required or permitted by a Standard of GRAP.
A summary of the significant accounting policies applied in the preparation of these financial statements and which are consistent with those applied in the preparation of the prior year financial statements are disclosed below.
These accounting policies are consistent with the previous year.
1.1 Presentation currency
These financial statements are presented in South African Rand, which is the functional currency of the municipality.
All figures have been rounded off to the nearest Rand.
1.2 Going concern assumption
These financial statements have been prepared based on the expectation that the municipality will continue to operate as a going concern for at least the next 12 months.
1.3 Prior year comparatives
When the presentation or classification of items in the annual financial statements is amended, prior period comparative amounts are also reclassified and restated, unless such comparative reclassification and / or restatement is not required by a Standard of GRAP. The nature and reason for such reclassifications and restatements are also disclosed.
Where material accounting errors, which relate to prior periods, have been identified in the current year, the correction is made retrospectively as far as is practicable and the prior year comparatives are restated accordingly. Where there has been a change in accounting policy in the current year, the adjustment is made retrospectively as far as is practicable and the prior year comparatives are restated accordingly.
The nature and reasons for the reclassification and restatement are disclosed in Note 48 “Prior period errors", to the Financial Statements.
1.4 Significant judgements and sources of estimation uncertainty
In preparing the financial statements, management is required to make estimates and assumptions that affect the amounts represented in the financial statements and related disclosures. Use of available information and the application of judgement is inherent in the formation of estimates. Actual results in the future could differ from these estimates which may be material to the financial statements. Significant judgements include:
Trade receivables
The municipality assesses its trade receivables for impairment at the end of each reporting period. In determining whether an impairment loss should be recorded in surplus or deficit, the municipality makes judgements as to whether there is observable data indicating a measurable decrease in the estimated future cash flows from a financial asset.
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Asset Management and Intangible Assets
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King Sabata Dalindyebo Municipality Financial Statements for the year ended 30 June 2016
Accounting Policies
1.4 Significant judgements and sources of estimation uncertainty (continued)
Assets: Management is required to exercise judgement when assessing the fair value/deemed cost of an asset, the extent of any potential impairment, the useful lives and depreciation methods applied to assets.
Intangible Assets: Management is required to assess the useful life of intangible assets based on the period the asset is expected to generate net cash inflows or service potential.
Provisions
Provisions were raised and management determined an estimate based on the information available. Additional disclosure of these estimates of provisions are included in note 17 - Provisions.
Effective interest rate
The municipality makes use of government bond rate to discount future cash flows in the event of it being material.
Allowance for doubtful debts
On debtors an impairment loss is recognised in surplus and deficit when there is objective evidence that it is impaired. The impairment is measured as the difference between the debtors carrying amount and the present value of estimated future cash flows discounted at the effective interest rate, computed at initial recognition.
Fair value determination of properties (excluding heritage assets)
In determining the fair value of investment property (and / or property, plant and equipment) the entity applies a valuation methodology to determine the fair value of the properties based on any one of, or a combination of the following factors: - The market related selling price of the property; or - The market related rental that can be earned from the property; or - The market related selling price of similar properties in the area; or - The rentals currently or previously earned by the property.
Heritage Assets
Heritage assets, which are culturally significant resources and which are shown at cost, are not depreciated due to the uncertainty regarding their estimated useful lives. The valuation of heritage assets is dependent on the type of the asset and the availability of reliable information. Management makes estimates and assumptions about factors such as the restoration cost, replacement cost and cash flow generating ability in estimating fair value.
Impairment of non-financial assets
In testing for, and determining the value-in-use of non-financial assets, management is required to rely on the use of estimates about the asset’s ability to continue to generate cash flows (in the case of cash-generating assets). For non- cash-generating assets, estimates are made regarding the depreciated replacement cost, restoration cost, or service units of the asset, depending on the nature of the impairment and the availability of information.
1.5 Investment property
Investment property is property (land or a building - or part of a building - or both) held to earn rentals or for capital appreciation or both, rather than for: use in the production or supply of goods or services or for administrative purposes, or sale in the ordinary course of operations.
Owner-occupied property is property held for use in the production or supply of goods or services or for administrative purposes.
Investment property is recognised as an asset when, it is probable that the future economic benefits or service potential that are associated with the investment property will flow to the municipality, and the cost or fair value of the investment property can be measured reliably.
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Investment property is initially recognised at cost. Transaction costs are included in the initial measurement.
King Sabata Dalindyebo Municipality Financial Statements for the year ended 30 June 2016
Accounting Policies
1.5 Investment property (continued)
Where investment property is acquired through a non-exchange transaction, its cost is its fair value as at the date of acquisition.
Costs include costs incurred initially and costs incurred subsequently to add to, or to replace a part of, or service a property. If a replacement part is recognised in the carrying amount of the investment property, the carrying amount of the replaced part is derecognised. The cost of day to day servicing of investment property is recognised in the statement of financial performance when incurred.
Fair value
Subsequent to initial measurement investment property is measured at fair value.
The fair value of investment property reflects market conditions at the reporting date.
To the extent that the fair value model is applied investment property is not depreciated.
A gain or loss arising from a change in fair value is included in net surplus or deficit for the period in which it arises.
If the entity determines that the fair value of an investment property under construction is not reliably determinable but expects the fair value of the property to be reliably measurable when construction is complete, it measures that investment property under construction at cost until either its fair value becomes reliably determinable or construction is completed (whichever is earlier). If the entity determines that the fair value of an investment property (other than an investment property under construction) is not reliably determinable on a continuing basis, the entity measures that investment property using the cost model (as per the accounting policy on Property, plant and equipment). The residual value of the investment property is then assumed to be zero. The entity applies the cost model (as per the accounting policy on Property, plant and equipment) until disposal of the investment property.
Once the entity becomes able to measure reliably the fair value of an investment property under construction that has previously been measured at cost, it measures that property at its fair value. Once construction of that property is complete, it is presumed that fair value can be measured reliably. If this is not the case, the property is accounted for using the cost model in accordance with the accounting policy on Property, plant and equipment.
The assumptions for determining the fair value of the investment property is set out in Note 8 to the financial statements.
Derecognition
Investment property is derecognised on disposal or when the investment property is permanently withdrawn from use Page 223 of 346
and no future economic benefits or service potential are expected from its disposal.
Gains or losses arising from the retirement or disposal of investment property is the difference between the net disposal proceeds and the carrying amount of the asset and is recognised in surplus or deficit in the period of retirement or disposal.
Compensation from third parties for investment property that was impaired, lost or given up is recognised in surplus or deficit when the compensation becomes receivable.
Property interest that is held by a lessee under an operating lease may be classified and accounted for as investment property, provided that the property would otherwise meet the definition of investment property and the lessee uses the fair value model.
When classification is difficult, the criteria used to distinguish investment property from owner-occupied property and from property held for sale in the ordinary course of operations established by using the criteria that it can utilise to exercise judgment consistently in accordance with the definition of investment property and with the related guidance
1.6 Property, plant and equipment
Property, plant and equipment are tangible non-current assets (including infrastructure assets) that are held for use in the production or supply of goods or services, rental to others, or for administrative purposes, and are expected to be used during more than one period.
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King Sabata Dalindyebo Municipality Financial Statements for the year ended 30 June 2016
Accounting Policies
1.6 Property, plant and equipment (continued)
The cost of an item of property, plant and equipment is recognised as an asset when: it is probable that future economic benefits or service potential associated with the item will flow to the municipality; and the cost of the item can be measured reliably.
Initial recognition and measurement
Property, plant and equipment is initially measured at cost.
The cost of an item of property, plant and equipment is the purchase price and other costs attributable to bring the asset to the location and condition necessary for it to be capable of operating in the manner intended by management. Trade discounts and rebates are deducted in arriving at the cost.
Where an asset is acquired through a non-exchange transaction, its cost is its fair value as at date of acquisition.
Where an item of property, plant and equipment is acquired in exchange for a non-monetary asset or monetary assets, or a combination of monetary and non-monetary assets, the asset acquired is initially measured at fair value (the cost). If the acquired item's fair value was not determinable, it's deemed cost is the carrying amount of the asset(s) given up.
When significant components of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.
Costs include costs incurred initially to acquire or construct an item of property, plant and equipment and costs incurred subsequently to add to, replace part of, or service it. If a replacement cost is recognised in the carrying amount of an item of property, plant and equipment, the carrying amount of the replaced part is derecognised.
The initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located is also included in the cost of property, plant and equipment , where the entity is obligated to incur such expenditure, and where the obligation arises as a result of acquiring the asset or using it for purposes other than the production of inventories.
Recognition of costs in the carrying amount of an item of property, plant and equipment ceases when the item is in the location and condition necessary for it to be capable of operating in the manner intended by management.
Major spare parts and stand by equipment which are expected to be used for more than one period are included in property, plant and equipment . In addition, spare parts and stand by equipment which can only be used in connection with an item of property, plant and equipment are accounted for as property, plant and equipment.
Major inspection costs which are a condition of continuing use of an item of property, plant and equipment and which meet the recognition criteria above are included as a replacement in the cost of the item of property, plant and equipment. Any remaining inspection costs from the previous inspection are derecognised.
Subsequent measurement - Cost model
Property, plant and equipment other than land, buildings and community assets is carried at cost less accumulated depreciation and any impairment losses.
Land is not depreciated as it is regarded as having an infinite life.
Subsequent measurement - Fair Value model
Land, buildings and community assets are carried at revalued amount, being the fair value at the date of revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses.
Revaluations are made with sufficient regularity such that the carrying amount does not differ materially from that which would be determined using fair value at the end of the reporting period.
When an item of property, plant and equipment is revalued, any accumulated depreciation at the date of the revaluation is eliminated against the gross carrying amount of the asset and the net amount restated to the revalued amount of the asset.
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P a g e 2 2 6 of 3 4 6
King Sabata Dalindyebo Municipality Financial Statements for the year ended 30 June 2016
Accounting Policies
1.6 Property, plant and equipment (continued)
Any increase in an asset’s carrying amount, as a result of a revaluation, is credited directly to a revaluation surplus. The increase is recognised in surplus or deficit to the extent that it reverses a revaluation decrease of the same asset previously recognised in surplus or deficit.
Any decrease in an asset’s carrying amount, as a result of a revaluation, is recognised in surplus or deficit in the current period. The decrease is debited directly to a revaluation surplus to the extent of any credit balance existing in the revaluation surplus in respect of that asset.
The revaluation surplus in equity related to a specific item of property, plant and equipment is transferred directly to retained earnings when the asset is derecognised.
Depreciation
Property, plant and equipment are depreciated on the straight line basis over their expected useful lives to their estimated residual value.
The useful lives of items of property, plant and equipment have been assessed as follows:
Item Average useful life Land infinite Buildings 5 - 130 years Plant and machinery 5 - 10 years Furniture and fixtures 3 - 5 years Office equipment 5 - 7 years IT equipment 5 - 7 years Infrastructure - Roads and paving 30 years - Access roads 3-10 years - Pedestrian malls 30 years - Electricity 10 - 50 years - Sewerage 15 - 20 years Community - Buildings 30 - 130 years - Recreational equipment 20 - 30 years - Security 5 years - Halls 130 years - Libraries 130 years - Parks and gardens 20 - 30 years - Sport fields 20 - 30 years Other property, plant and equipment - Other vehicles 5 years - Other items of plant and equipment 7 - 10 years - Landfill sites 4-30 years - Fire engines 10 - 20 years Bins and containers 5 years Other leased assets - Motor vehicles 5-20 years Laboratory equipment 5 - 7 years Specialised vehicles 10 years Heritage assets Infinite Cemetery 25 - 30 years Stadium 25 - 30 years
The residual value, and the useful life and depreciation method of each asset are reviewed at the end of each reporting date. If the expectations differ from previous estimates, the change is accounted for as a change in accounting estimate.
Reviewing the useful life of an asset on an annual basis does not require the entity to amend the previous estimate unless expectations differ from the previous estimate. Page 227 of 346
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King Sabata Dalindyebo Municipality Financial Statements for the year ended 30 June 2016
Accounting Policies
1.6 Property, plant and equipment (continued)
Each part of an item of property, plant and equipment with a cost that is significant in relation to the total cost of the item is depreciated separately.
The depreciation charge for each period is recognised in surplus or deficit unless it is included in the carrying amount of another asset.
Impairment
The entity tests for impairment where there is an indication that an asset may be impaired. An assessment of whether there is an indication of possible impairment is done at each reporting date. Where the carrying amount of an item of property, plant and equipment is greater than the estimated recoverable amount (or recoverable service amount), it is written down immediately to its recoverable amount (or recoverable service amount) and an impairment loss is charged to the Statement of Financial Performance
Where items of property, plant and equipment have been impaired, the carrying value is adjusted by the impairment loss, which is recognised as an expense in the Statement of Financial Performance in the period that the impairment is identified.
An impairment is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined had no impairment been recognised. A reversal of the impairment is recognised in the Statement of Financial Performance
Derecognition
Items of property, plant and equipment are derecognised when the asset is disposed of or when there are no further economic benefits or service potential expected from the use of the asset.
The gain or loss arising from the derecognition of an item of property, plant and equipment is included in surplus or deficit when the item is derecognised. The gain or loss arising from the derecognition of an item of property, plant and equipment is determined as the difference between the net disposal proceeds, if any, and the carrying amount of the item.
1.7 Intangible assets
An intangible asset is an identifiable non-monetary asset without physical substance.
An asset is identifiable if it either: is separable, i.e. is capable of being separated or divided from an entity and sold, transferred, licensed, rented or exchanged, either individually or together with a related contract, identifiable assets or liability, regardless of whether the entity intends to do so; or arises from binding arrangements (including rights from contracts), regardless of whether those rights are transferable or separable from the municipality or from other rights and obligations.
A binding arrangement describes an arrangement that confers similar rights and obligations on the parties to it as if it were in the form of a contract.
An intangible asset is recognised when: it is probable that the expected future economic benefits or service potential that are attributable to the asset will flow to the municipality; and the cost or fair value of the asset can be measured reliably.
The municipality assesses the probability of expected future economic benefits or service potential using reasonable and supportable assumptions that represent management’s best estimate of the set of economic conditions that will exist over the useful life of the asset.
Initial recognition
Intangible assets are initially recognised at cost
Where an intangible asset is acquired through a non-exchange transaction, its initial cost at the date of acquisition is measured at its fair value as at that date. Page 229 of 346
Expenditure on research (or on the research phase of an internal project) is recognised as an expense when it is incurred.
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King Sabata Dalindyebo Municipality Financial Statements for the year ended 30 June 2016
Accounting Policies
1.7 Intangible assets (continued)
Subsequent measurement
Intangible assets are subsequently carried at cost less any accumulated amortisation and any impairment.
The cost of an intangible asset is amortised over the useful life where that useful life is finite. The amortisation expense on intangible assets with finite lives is recognised in the Statement of Financial Performance in the expense category consistent with the function of the intangible asset.
Intangible assets with indefinite useful lives are not amortised, but are tested for impairment annually, either individually or at the cash generating unit level. The assessment of indefinite life is reviewed annually to determine whether the indefinite life assumption continues to be supportable. If not, the change in useful life from indefinite to finite is made on a prospective basis.
Amortisation and impairment
The amortisation period and the amortisation method for intangible assets are reviewed at each reporting date.
The amortisation period, the amortisation method and residual value for intangible assets with finite useful lives are reviewed at each reporting date and any changes are recognised as a change in accounting estimate in the Statement of Financial Performance.
Reassessing the useful life of an intangible asset with a finite useful life after it was classified as indefinite is an indicator that the asset may be impaired. As a result the asset is tested for impairment and the remaining carrying amount is amortised over its useful life.
Amortisation is provided to write down the intangible assets, on a straight line basis, to their residual values as follows:
Item Useful life
Computer software, other 2 - 5 years
Derecognition
Intangible assets are derecognised: on disposal; or when no future economic benefits or service potential are expected from its use or disposal.
The gain or loss is the difference between the net disposal proceeds, if any, and the carrying amount. It is recognised in surplus or deficit when the asset is derecognised.
1.8 Heritage assets
Heritage assets are assets that have a cultural, environmental, historical, natural, scientific, technological or artistic significance and are held indefinitely for the benefit of present and future generations.
Recognition
The municipality recognises a heritage asset as an asset if it is probable that future economic benefits or service potential associated with the asset will flow to the municipality, and the cost or fair value of the asset can be measured reliably.
Initial measurement
Heritage assets are measured at cost.
Where a heritage asset is acquired through a non-exchange transaction, its cost is measured at its fair value as at the date of acquisition.
Subsequent measurement
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After recognition as an asset, a class of heritage assets, whose fair value can be measured reliably, is carried at a revalued amount, being its fair value at the date of the revaluation less any subsequent impairment losses.
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King Sabata Dalindyebo Municipality Financial Statements for the year ended 30 June 2016
Accounting Policies
1.8 Heritage assets (continued)
If a heritage asset’s carrying amount is increased as a result of a revaluation, the increase is credited directly to a revaluation surplus. However, the increase is recognised in surplus or deficit to the extent that it reverses a revaluation decrease of the same heritage asset previously recognised in surplus or deficit.
If a heritage asset’s carrying amount is decreased as a result of a revaluation, the decrease is recognised in surplus or deficit. However, the decrease is debited directly to a revaluation surplus to the extent of any credit balance existing in the revaluation surplus in respect of that heritage asset.
Impairment
The municipality assess at each reporting date whether there is an indication that it may be impaired. If any such indication exists, the municipality estimates the recoverable amount or the recoverable service amount of the heritage asset.
Transfers
Transfers from heritage assets are only made when the particular asset no longer meets the definition of a heritage asset.
Transfers to heritage assets are only made when the asset meets the definition of a heritage asset.
Derecognition
The municipality derecognises heritage asset on disposal, or when no future economic benefits or service potential are expected from its use or disposal.
The gain or loss arising from the derecognition of a heritage asset is determined as the difference between the net disposal proceeds, if any, and the carrying amount of the heritage asset. Such difference is recognised in surplus or deficit when the heritage asset is derecognised.
1.9 Financial instruments
A financial instrument is any contract that gives rise to a financial asset of one municipality and a financial liability or a residual interest of another municipality.
The amortised cost of a financial asset or financial liability is the amount at which the financial asset or financial liability is measured at initial recognition minus principal repayments, plus or minus the cumulative amortisation using the effective interest method of any difference between that initial amount and the maturity amount, and minus any reduction (directly or through the use of an allowance account) for impairment or uncollectibility.
Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation.
The effective interest method is a method of calculating the amortised cost of a financial asset or a financial liability (or group of financial assets or financial liabilities) and of allocating the interest income or interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial instrument or, when appropriate, a shorter period to the net carrying amount of the financial asset or financial liability. When calculating the effective interest rate, a municipality shall estimate cash flows considering all contractual terms of the financial instrument (for example, prepayment, call and similar options) but shall not consider future credit losses. The calculation includes all fees and points paid or received between parties to the contract that are an integral part of the effective interest rate (see the Standard of GRAP on Revenue from Exchange Transactions), transaction costs, and all other premiums or discounts. There is a presumption that the cash flows and the expected life of a group of similar financial instruments can be estimated reliably. However, in those rare cases when it is not possible to reliably estimate the cash flows or the expected life of a financial instrument (or group of financial instruments), the municipality shall use the contractual cash flows over the full contractual term of the financial instrument (or group of financial instruments).
Fair value is the amount for which an asset could be exchanged, or a liability settled, between knowledgeable willing parties in an arm’s length transaction.
A financial asset is: Page 233 of 346
cash; a residual interest of another entity; or
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King Sabata Dalindyebo Municipality Financial Statements for the year ended 30 June 2016
Accounting Policies
1.9 Financial instruments (continued) a contractual right to: - receive cash or another financial asset from another entity; or - exchange financial assets or financial liabilities with another entity under conditions that are potentially favourable to the entity.
A financial liability is any liability that is a contractual obligation to: deliver cash or another financial asset to another entity; or exchange financial assets or financial liabilities under conditions that are potentially unfavourable to the entity.
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates.
Liquidity risk is the risk encountered by an entity in the event of difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial asset.
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: currency risk, interest rate risk and other price risk.
Financial instruments at amortised cost are non-derivative financial assets or non-derivative financial liabilities that have fixed or determinable payments, excluding those instruments that: the entity designates at fair value at initial recognition; or are held for trading.
Financial instruments at cost are investments in residual interests that do not have a quoted market price in an active market, and whose fair value cannot be reliably measured.
Financial instruments at fair value comprise financial assets or financial liabilities that are: derivatives; combined instruments that are designated at fair value; instruments held for trading. A financial instrument is held for trading if: - it is acquired or incurred principally for the purpose of selling or repurchasing it in the near-term; or - on initial recognition it is part of a portfolio of identified financial instruments that are managed together and for which there is evidence of a recent actual pattern of short term profit-taking; - non-derivative financial assets or financial liabilities with fixed or determinable payments that are designated at fair value at initial recognition; and - financial instruments that do not meet the definition of financial instruments at amortised cost or financial instruments at cost.
Classification
The entity has the following types of financial assets (classes and category) as reflected on the face of the statement of financial position or in the notes thereto:
Class Category Receivables from exchange transactions Financial asset measured at amortised cost Receivables from non-exchange transactions Financial asset measured at amortised cost Cash and cash equivalents Financial asset measured at fair value
The entity has the following types of financial liabilities (classes and category) as reflected on the face of the statement of financial position or in the notes thereto:
Class Category Other financial liability - Long term Financial liability measured at amortised cost Other financial liability - Short term Financial liability measured at amortised cost Trade and other payables Financial liability measured at fair value
Initial recognition
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King Sabata Dalindyebo Municipality Financial Statements for the year ended 30 June 2016
Accounting Policies
1.9 Financial instruments (continued)
The municipality recognises a financial asset or a financial liability in its statement of financial position when the municipality becomes a party to the contractual provisions of the instrument.
The municipality recognises financial assets using trade date accounting.
Upon initial recognition the entity classifies financial instruments or their component parts as financial liabilities, financial assets or residual interests in conformity with the substance of the contractual arrangement and to the extent that the instrument satisfies the definitions of a financial liability, a financial asset or a residual interest.
Financial instruments are evaluated, based on their terms, to determine if those instruments contain both liability and residual interest components (i.e. to assess if the instruments are compound financial instruments). To the extent that an instrument is in fact a compound instrument, the components are classified separately as financial liabilities and residual interests as the case may be.
Initial measurement of financial assets and financial liabilities
The entity measures a financial asset and financial liability initially at its fair value plus transaction costs that are directly attributable to the acquisition or issue of the financial asset or financial liability.
Subsequent measurement of financial assets and financial liabilities
The entity measures all financial assets and financial liabilities after initial recognition using the following categories: Financial instruments at fair value. Financial instruments at amortised cost. Financial instruments at cost.
All financial assets measured at amortised cost, or cost, are subject to an impairment review.
Reclassification
The entity does not reclassify a financial instrument while it is issued or held unless it is: combined instrument that is required to be measured at fair value; or an investment in a residual interest that meets the requirements for reclassification.
Gains and losses
For financial assets and financial liabilities measured at amortised cost or cost, a gain or loss is recognised in surplus or deficit when the financial asset or financial liability is derecognised or impaired, or through the amortisation process.
Impairment and uncollectibility of financial assets
The entity assess at the end of each reporting period whether there is any objective evidence that a financial asset or group of financial assets is impaired.
Financial assets measured at amortised cos t:
If there is objective evidence that an impairment loss on financial assets measured at amortised cost has been incurred, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the financial asset’s original effective interest rate. The carrying amount of the asset is reduced directly. The amount of the loss is recognised in surplus or deficit.
If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed directly. The reversal does not result in a carrying amount of the financial asset that exceeds what the amortised cost would have been had the impairment not been recognised at the date the impairment is reversed. The amount of the reversal is recognised in surplus or deficit.
Financial assets measured at cost: Page 237 of 346
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King Sabata Dalindyebo Municipality Financial Statements for the year ended 30 June 2016
Accounting Policies
1.9 Financial instruments (continued)
If there is objective evidence that an impairment loss has been incurred on an investment in a residual interest that is not measured at fair value because its fair value cannot be measured reliably, the amount of the impairment loss is measured as the difference between the carrying amount of the financial asset and the present value of estimated future cash flows discounted at the current market rate of return for a similar financial asset. Such impairment losses are not reversed.
Derecognition
Financial assets
The entity derecognises financial assets using trade date accounting.
The entity derecognises a financial asset only when: the contractual rights to the cash flows from the financial asset expire, are settled or waived; the entity transfers to another party substantially all of the risks and rewards of ownership of the financial asset; or the entity, despite having retained some significant risks and rewards of ownership of the financial asset, has transferred control of the asset to another party and the other party has the practical ability to sell the asset in its entirety to an unrelated third party, and is able to exercise that ability unilaterally and without needing to impose additional restrictions on the transfer. In this case, the entity : - derecognise the asset; and - recognise separately any rights and obligations created or retained in the transfer.
On derecognition of a financial asset in its entirety, the difference between the carrying amount and the sum of the consideration received is recognised in surplus or deficit.
Financial liabilities
The entity removes a financial liability (or a part of a financial liability) from its statement of financial position when it is extinguished — i.e. when the obligation specified in the contract is discharged, cancelled, expires or waived.
The difference between the carrying amount of a financial liability (or part of a financial liability) extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in surplus or deficit. Any liabilities that are waived, forgiven or assumed by another entity by way of a non- exchange transaction are accounted for in accordance with the Standard of GRAP on Revenue from Non-exchange Transactions (Taxes and Transfers).
Presentation
Interest relating to a financial instrument or a component that is a financial liability is recognised as revenue or expense in surplus or deficit.
Losses and gains relating to a financial instrument or a component that is a financial liability is recognised as revenue or expense in surplus or deficit.
A financial asset and a financial liability are only offset and the net amount presented in the statement of financial position when the entity currently has a legally enforceable right to set off the recognised amounts and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.
In accounting for a transfer of a financial asset that does not qualify for derecognition, the entity does not offset the transferred asset and the associated liability.
Policies relating to specific financial instruments
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King Sabata Dalindyebo Municipality Financial Statements for the year ended 30 June 2016
Accounting Policies
1.9 Financial instruments (continued)
Investments
Investments, which include fixed deposits and short-term deposits invested in registered commercial banks are categorised as financial instruments at amortised cost and are subsequently measured at amortised cost. Where investments have been impaired, the carrying value is adjusted by the impairment loss, which is recognised as an expense in the period that the impairment is identified. On disposal of an investment, the difference between the net disposal proceeds and the carrying amount is charged or credited to the Statement of Financial Performance.
Trade and other receivables
Trade and other receivables are classified as loans and receivables and are measured at initial recognition at fair value and are subsequently measured at amortised cost using the effective interest rate method.
All trade and other receivables are assessed at least annually for possible impairment. Impairment adjustments are made through the use of an allowance account. An estimate is made for doubtful receivables based on a review of all outstanding amounts at year-end.
Bad debts are written off in the year in which they are identified as irrecoverable. Amounts receivable within 12 months from the reporting date are classified as current. Interest is charged on overdue accounts.
Trade and other payables
Trade payables are initially measured at fair value plus transaction costs that are directly attributable to the acquisition and are subsequently measured at amortised cost using the effective interest rate method.
Cash and cash equivalents
Cash includes cash on hand and cash with banks. Cash equivalents are short-term highly liquid investments that are held with registered banking institutions with maturities of three months or less and are subject to an insignificant risk of change in value
For the purposes of the Cash Flow Statement, cash and cash equivalents comprise cash on hand and deposits held on call with banks.
Bank overdrafts and borrowings
Bank overdrafts are recorded based on the facility utilised. Finance charges on bank overdrafts are expensed as incurred. Amounts owing in respect of bank overdrafts are categorised as financial liabilities carried at amortised cost.
Borrowings are initially measured at fair value, and are subsequently measured at amortised cost, using the effective interest rate method. Any differences between the proceeds (net of transaction costs) and the settlement or redemption of borrowings is recognised over the term of the borrowings in accordance with the municipality's accounting policy on borrowing costs.
1.10 Leases
A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership. A lease is classified as an operating lease if it does not transfer substantially all the risks and rewards incidental to ownership.
When a lease includes both land and buildings elements, the entity assesses the classification of each element separately.
Finance leases - lessee
Finance leases are recognised as assets and liabilities in the statement of financial position at amounts equal to the fair value of the leased property or, if lower, the present value of the minimum lease payments. The corresponding liability to the lessor is included in the statement of financial position as a finance lease obligation.
The discount rate used in calculating the present value of the minimum lease payments is the interest rate implicit in the lease. Page 241 of 346
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King Sabata Dalindyebo Municipality Financial Statements for the year ended 30 June 2016
Accounting Policies
1.10 Leases (continued)
Minimum lease payments are apportioned between the finance charge and reduction of the outstanding liability. The finance charge is allocated to each period during the lease term so as to produce a constant periodic rate of on the remaining balance of the liability.
Operating leases - lessor
Operating lease revenue is recognised as revenue on a straight-line basis over the lease term .
Initial direct costs incurred in negotiating and arranging operating leases are added to the carrying amount of the leased asset and recognised as an expense over the lease term on the same basis as the lease revenue.
Income for leases is disclosed under revenue in statement of financial performance .
Operating leases - lessee
Operating lease payments are recognised as an expense on a straight-line basis over the lease term . The difference between the amounts recognised as an expense and the contractual payments are recognised as an operating lease asset or liability.
1.11 Inventories
Inventories are initially measured at cost except where inventories are acquired through a non-exchange transaction, then their costs are their fair value as at the date of acquisition.
Subsequently inventories are measured at the lower of cost and net realisable value.The basis of determining the cost is the weighted average method.
Inventories are measured at the lower of cost and current replacement cost where they are held for; distribution at no charge or for a nominal charge; or consumption in the production process of goods to be distributed at no charge or for a nominal charge.
Net realisable value is the estimated selling price in the ordinary course of operations less the estimated costs of completion and the estimated costs necessary to make the sale, exchange or distribution.
When inventories are sold, the carrying amounts of those inventories are recognised as an expense in the period in which the related revenue is recognised. If there is no related revenue, the expenses are recognised when the goods are distributed, or related services are rendered. The amount of any write-down of inventories to net realisable value or current replacement cost and all losses of inventories are recognised as an expense in the period the write-down or loss occurs. The amount of any reversal of any write-down of inventories, arising from an increase in net realisable value or current replacement cost, are recognised as a reduction in the amount of inventories recognised as an expense in the period in which the reversal occurs.
1.12 Construction contracts and receivables
Construction contract is a contract, or a similar binding arrangement, specifically negotiated for the construction of an asset or a combination of assets that are closely interrelated or interdependent in terms of their design, technology and function or their ultimate purpose or use.
Contractor is an entity that performs construction work pursuant to a construction contract.
Cost plus or cost based contract is a construction contract in which the contractor is reimbursed for allowable or otherwise defined costs and, in the case of a commercially-based contract, an additional percentage of these costs or a fixed fee, if any.
Fixed price contract is a construction contract in which the contractor agrees to a fixed contract price, or a fixed rate per unit of output, which in some cases is subject to cost escalation clauses.
A contractor is an entity that enters into a contract to build structures, construct facilities, produce goods, or render services to the specifications of another entity either itself or through the use of sub-contractors. The term “contractor” thus includes Page 243 of 346
a general or prime contractor, a subcontractor to a general contractor, or a construction manager.
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King Sabata Dalindyebo Municipality Financial Statements for the year ended 30 June 2016
Accounting Policies
1.12 Construction contracts and receivables (continued)
The entity assesses the terms and conditions of each contract concluded with customers to establish whether the contract is a construction contract or not. In assessing whether the contract is a construction contract, an entity considers whether it is a contractor.
Where the outcome of a construction contract can be estimated reliably, contract revenue and costs are recognised by reference to the stage of completion of the contract activity at the reporting date, as measured by the proportion that contract costs incurred for work performed to date bear to the estimated total contract costs .
Variations in contract work, claims and incentive payments are included to the extent that they have been agreed with the customer.
When the outcome of a construction contract cannot be estimated reliably, contract revenue is recognised to the extent that contract costs incurred are recoverable. Contract costs are recognised as an expense in the period in which they are incurred.
When it is probable that total contract costs will exceed total contract revenue, the expected deficit is recognised as an expense immediately.
1.13 Impairment of cash-generating assets
Cash-generating assets are those assets held by the municipality with the primary objective of generating a commercial return. When an asset is deployed in a manner consistent with that adopted by a profit-orientated entity, it generates a commercial return.
Impairment is a loss in the future economic benefits or service potential of an asset, over and above the systematic recognition of the loss of the asset’s future economic benefits or service potential through depreciation (amortisation).
Carrying amount is the amount at which an asset is recognised in the statement of financial position after deducting any accumulated depreciation and accumulated impairment losses thereon.
A cash-generating unit is the smallest identifiable group of assets held with the primary objective of generating a commercial return that generates cash inflows from continuing use that are largely independent of the cash inflows from other assets or groups of assets.
Costs of disposal are incremental costs directly attributable to the disposal of an asset, excluding finance costs and income tax expense.
Depreciation (Amortisation) is the systematic allocation of the depreciable amount of an asset over its useful life.
Fair value less costs to sell is the amount obtainable from the sale of an asset in an arm’s length transaction between knowledgeable, willing parties, less the costs of disposal.
Recoverable amount of an asset or a cash-generating unit is the higher its fair value less costs to sell and its value in use.
Useful life is either: (a) the period of time over which an asset is expected to be used by the municipality; or (b) the number of production or similar units expected to be obtained from the asset by the municipality.
Identification of a potential impairment
When the carrying amount of a cash-generating asset exceeds its recoverable amount, it is impaired.
The municipality assesses at each reporting date whether there is any indication that a cash-generating asset may be impaired. If any such indication exists, the municipality estimates the recoverable amount of the asset.
Irrespective of whether there is any indication of impairment, the municipality also test a cash-generating intangible asset with an indefinite useful life or a cash-generating intangible asset not yet available for use for impairment annually by comparing its carrying amount with its recoverable amount. This impairment test is performed at the same time every year. If an intangible asset was initially recognised during the current reporting period, that intangible asset was tested for Page 245 of 346
impairment before the end of the current reporting period.
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King Sabata Dalindyebo Municipality Financial Statements for the year ended 30 June 2016
Accounting Policies
1.13 Impairment of cash-generating assets (continued)
Value in use
Value in use of a cash-generating asset is the present value of the estimated future cash flows expected to be derived from the continuing use of an asset and from its disposal at the end of its useful life.
When estimating the value in use of an asset, the municipality estimates the future cash inflows and outflows to be derived from continuing use of the asset and from its ultimate disposal and the municipality applies the appropriate discount rate to those future cash flows.
Recognition and measurement (individual asset)
If the recoverable amount of a cash-generating asset is less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. This reduction is an impairment loss.
An impairment loss is recognised immediately in surplus or deficit.
Any impairment loss of a revalued cash-generating asset is treated as a revaluation decrease.
When the amount estimated for an impairment loss is greater than the carrying amount of the cash-generating asset to which it relates, the municipality recognises a liability only to the extent that is a requirement in the Standard of GRAP.
After the recognition of an impairment loss, the depreciation (amortisation) charge for the cash-generating asset is adjusted in future periods to allocate the cash-generating asset’s revised carrying amount, less its residual value (if any), on a systematic basis over its remaining useful life.
Recognition and measurement of cash-generating units
If there is any indication that an asset may be impaired, the recoverable amount is estimated for the individual asset. If it is not possible to estimate the recoverable amount of the individual asset, the municipality determines the recoverable amount of the cash-generating unit to which the asset belongs (the asset's cash-generating unit).
If an active market exists for the output produced by an asset or group of assets, that asset or group of assets is identified as a cash-generating unit, even if some or all of the output is used internally. If the cash inflows generated by any asset or cash-generating unit are affected by internal transfer pricing, the municipality use management's best estimate of future price(s) that could be achieved in arm's length transactions in estimating: the future cash inflows used to determine the asset's or cash-generating unit's value in use; and the future cash outflows used to determine the value in use of any other assets or cash-generating units that are affected by the internal transfer pricing.
Cash-generating units are identified consistently from period to period for the same asset or types of assets, unless a change is justified.
The carrying amount of a cash-generating unit is determined on a basis consistent with the way the recoverable amount of the cash-generating unit is determined.
An impairment loss is recognised for a cash-generating unit if the recoverable amount of the unit is less than the carrying amount of the unit. The impairment is allocated to reduce the carrying amount of the cash-generating assets of the unit on a pro rata basis, based on the carrying amount of each asset in the unit. These reductions in carrying amounts are treated as impairment losses on individual assets.
In allocating an impairment loss, the entity does not reduce the carrying amount of an asset below the highest of: its fair value less costs to sell (if determinable); its value in use (if determinable); and zero.
The amount of the impairment loss that would otherwise have been allocated to the asset is allocated pro rata to the other cash-generating assets of the unit.
Where a non-cash-generating asset contributes to a cash-generating unit, a proportion of the carrying amount of that non- Page 247 of 346
cash-generating asset is allocated to the carrying amount of the cash-generating unit prior to estimation of the recoverable amount of the cash-generating unit.
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King Sabata Dalindyebo Municipality Financial Statements for the year ended 30 June 2016
Accounting Policies
1.13 Impairment of cash-generating assets (continued)
Reversal of impairment loss
The municipality assess at each reporting date whether there is any indication that an impairment loss recognised in prior periods for a cash-generating asset may no longer exist or may have decreased. If any such indication exists, the entity estimates the recoverable amount of that asset.
An impairment loss recognised in prior periods for a cash-generating asset is reversed if there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised. The carrying amount of the asset is increased to its recoverable amount. The increase is a reversal of an impairment loss. The increased carrying amount of an asset attributable to a reversal of an impairment loss does not exceed the carrying amount that would have been determined (net of depreciation or amortisation) had no impairment loss been recognised for the asset in prior periods.
A reversal of an impairment loss for a cash-generating asset is recognised immediately in surplus or deficit.
Any reversal of an impairment loss of a revalued cash-generating asset is treated as a revaluation increase.
After a reversal of an impairment loss is recognised, the depreciation (amortisation) charge for the cash-generating asset is adjusted in future periods to allocate the cash-generating asset’s revised carrying amount, less its residual value (if any), on a systematic basis over its remaining useful life.
A reversal of an impairment loss for a cash-generating unit is allocated to the cash-generating assets of the unit pro rata with the carrying amounts of those assets. These increases in carrying amounts are treated as reversals of impairment losses for individual assets. No part of the amount of such a reversal is allocated to a non-cash-generating asset contributing service potential to a cash-generating unit.
In allocating a reversal of an impairment loss for a cash-generating unit, the carrying amount of an asset is not increased above the lower of: its recoverable amount (if determinable); and the carrying amount that would have been determined (net of amortisation or depreciation) had no impairment loss been recognised for the asset in prior periods.
The amount of the reversal of the impairment loss that would otherwise have been allocated to the asset is allocated pro rata to the other assets of the unit.
Redesignation
The redesignation of assets from a cash-generating asset to a non-cash-generating asset or from a non-cash-generating asset to a cash-generating asset only occur when there is clear evidence that such a redesignation is appropriate.
1.14 Impairment of non-cash-generating assets
Cash-generating assets are those assets held by the municipality with the primary objective of generating a commercial return. When an asset is deployed in a manner consistent with that adopted by a profit-orientated entity, it generates a commercial return.
Non-cash-generating assets are assets other than cash-generating assets.
Impairment is a loss in the future economic benefits or service potential of an asset, over and above the systematic recognition of the loss of the asset’s future economic benefits or service potential through depreciation (amortisation).
Carrying amount is the amount at which an asset is recognised in the statement of financial position after deducting any accumulated depreciation and accumulated impairment losses thereon.
A cash-generating unit is the smallest identifiable group of assets held with the primary objective of generating a commercial return that generates cash inflows from continuing use that are largely independent of the cash inflows from other assets or groups of assets.
Costs of disposal are incremental costs directly attributable to the disposal of an asset, excluding finance costs and Page 249 of 346
value added taxes.
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King Sabata Dalindyebo Municipality Financial Statements for the year ended 30 June 2016
Accounting Policies
1.14 Impairment of non-cash-generating assets (continued)
Depreciation (Amortisation) is the systematic allocation of the depreciable amount of an asset over its useful life.
Fair value less costs to sell is the amount obtainable from the sale of an asset in an arm’s length transaction between knowledgeable, willing parties, less the costs of disposal.
Recoverable service amount is the higher of a non-cash-generating asset’s fair value less costs to sell and its value in use.
Useful life is either: (a) the period of time over which an asset is expected to be used by the municipality; or (b) the number of production or similar units expected to be obtained from the asset by the municipality.
Identification
When the carrying amount of a non-cash-generating asset exceeds its recoverable service amount, it is impaired.
The municipality assesses at each reporting date whether there is any indication that a non-cash-generating asset may be impaired. If any such indication exists, the municipality estimates the recoverable service amount of the asset.
Irrespective of whether there is any indication of impairment, the entity also test a non-cash-generating intangible asset with an indefinite useful life or a non-cash-generating intangible asset not yet available for use for impairment annually by comparing its carrying amount with its recoverable service amount. This impairment test is performed at the same time every year. If an intangible asset was initially recognised during the current reporting period, that intangible asset was tested for impairment before the end of the current reporting period.
Value in use
Value in use of non-cash-generating assets is the present value of the non-cash-generating assets remaining service potential.
Recognition and measurement
If the recoverable service amount of a non-cash-generating asset is less than its carrying amount, the carrying amount of the asset is reduced to its recoverable service amount. This reduction is an impairment loss.
An impairment loss is recognised immediately in surplus or deficit.
Any impairment loss of a revalued non-cash-generating asset is treated as a revaluation decrease.
When the amount estimated for an impairment loss is greater than the carrying amount of the non-cash-generating asset to which it relates, the municipality recognises a liability only to the extent that is a requirement in the Standards of GRAP 21 - Impairment of non-cash generating assets.
After the recognition of an impairment loss, the depreciation (amortisation) charge for the non-cash-generating asset is adjusted in future periods to allocate the non-cash-generating asset’s revised carrying amount, less its residual value (if any), on a systematic basis over its remaining useful life.
Reversal of an impairment loss
The municipality assess at each reporting date whether there is any indication that an impairment loss recognised in prior periods for a non-cash-generating asset may no longer exist or may have decreased. If any such indication exists, the municipality estimates the recoverable service amount of that asset.
An impairment loss recognised in prior periods for a non-cash-generating asset is reversed if there has been a change in the estimates used to determine the asset’s recoverable service amount since the last impairment loss was recognised. The carrying amount of the asset is increased to its recoverable service amount. The increase is a reversal of an impairment loss. The increased carrying amount of an asset attributable to a reversal of an impairment loss does not exceed the carrying amount that would have been determined (net of depreciation or amortisation) had no impairment loss been recognised for the asset in prior periods.
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A reversal of an impairment loss for a non-cash-generating asset is recognised immediately in surplus or deficit.
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King Sabata Dalindyebo Municipality Financial Statements for the year ended 30 June 2016
Accounting Policies
1.14 Impairment of non-cash-generating assets (continued)
Any reversal of an impairment loss of a revalued non-cash-generating asset is treated as a revaluation increase.
After a reversal of an impairment loss is recognised, the depreciation (amortisation) charge for the non-cash-generating asset is adjusted in future periods to allocate the non-cash-generating asset’s revised carrying amount, less its residual value (if any), on a systematic basis over its remaining useful life.
Redesignation
The redesignation of assets from a cash-generating asset to a non-cash-generating asset or from a non-cash-generating asset to a cash-generating asset only occur when there is clear evidence that such a redesignation is appropriate.
1.15 Share capital / contributed capital
An equity instrument is any contract that evidences a residual interest in the assets of an municipality after deducting all of its liabilities.
1.16 Employee benefits
Employee benefits are all forms of consideration given by a municipality in exchange for service rendered by employees.
Termination benefits are employee benefits payable as a result of either: a municipality’s decision to terminate an employee’s employment before the normal retirement date; or an employee’s decision to accept voluntary redundancy in exchange for those benefits.
Other long-term employee benefits are employee benefits (other than post-employment benefits and termination benefits) that are not due to be settled within twelve months after the end of the period in which the employees render the related service.
Vested employee benefits are employee benefits that are not conditional on future employment.
A constructive obligation is an obligation that derives from a municipality’s actions where by an established pattern of past practice, published policies or a sufficiently specific current statement, the municipality has indicated to other parties that it will accept certain responsibilities and as a result, the municipality has created a valid expectation on the part of those other parties that it will discharge those responsibilities.
Short-term employee benefits
Short-term employee benefits are employee benefits (other than termination benefits) that are due to be settled within twelve months after the end of the period in which the employees render the related service.
Short-term employee benefits include items such as: wages, salaries and social security contributions; short-term compensated absences (such as paid annual leave and paid sick leave) where the compensation for the absences is due to be settled within twelve months after the end of the reporting period in which the employees render the related employee service; bonus, incentive and performance related payments payable within twelve months after the end of the reporting period in which the employees render the related service; and non-monetary benefits (for example, medical care, and free or subsidised goods or services such as housing, cars and cellphones) for current employees.
When an employee has rendered service to the entity during a reporting period, the entity recognise the undiscounted amount of short-term employee benefits expected to be paid in exchange for that service: as a liability (accrued expense), after deducting any amount already paid. If the amount already paid exceeds the undiscounted amount of the benefits, the municipality recognise that excess as an asset (prepaid expense) to the extent that the prepayment will lead to, for example, a reduction in future payments or a cash refund; and as an expense, unless another Standard requires or permits the inclusion of the benefits in the cost of an asset.
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King Sabata Dalindyebo Municipality Financial Statements for the year ended 30 June 2016
Accounting Policies
1.16 Employee benefits (continued)
Leave pay
The expected cost of compensated absences is recognised as an expense as the employees render services that increase their entitlement or, in the case of non-accumulating absences, when the absence occurs. The municipality measures the expected cost of accumulating compensated absences as the additional amount that the municipality expects to pay as a result of the unused entitlement that has accumulated at the reporting date.
The liability is based on the total amount of leave days due to the employees at reporting date and on the total cost to the municipality of the employees.
Annual Bonuses
The entity recognise the expected cost of bonus, incentive and performance related payments when the municipality has a present legal or constructive obligation to make such payments as a result of past events and a reliable estimate of the obligation can be made. A present obligation exists when the entity has no realistic alternative but to make the payments.
The municipality pays out an annual bonus to its employees annually from the date of employment. A liability relating to the anticipated bonuses payable is raised and is based on the total cost to the municipality.
Long service awards
The entity provides long service awards to eligible employees, payable on completion of a certain number of years of employment. A provision is raised to account for the expected long service awards due to be paid in future years.
Post-employment benefits
Post-employment benefits are employee benefits (other than termination benefits) which are payable after the completion of employment.
Post-employment benefit plans are formal or informal arrangements under which a municipality provides post-employment benefits for one or more employees.
The municipality does not provide any post employment benefits to any employees.
Post-employment benefits: Defined contribution plans
Defined contribution plans are post-employment benefit plans under which an entity pays fixed contributions into a separate entity (a fund) and will have no legal or constructive obligation to pay further contributions if the fund does not hold sufficient assets to pay all employee benefits relating to employee service in the current and prior periods.
When an employee has rendered service to the entity during a reporting period, the entity recognise the contribution payable to a defined contribution plan in exchange for that service: as a liability (accrued expense), after deducting any contribution already paid. If the contribution already paid exceeds the contribution due for service before the reporting date, an entity recognise that excess as an asset (prepaid expense) to the extent that the prepayment will lead to, for example, a reduction in future payments or a cash refund; and as an expense, unless another Standard requires or permits the inclusion of the contribution in the cost of an asset.
Where contributions to a defined contribution plan do not fall due wholly within twelve months after the end of the reporting period in which the employees render the related service, they are discounted. The rate used to discount reflects the time value of money. The currency and term of the financial instrument selected to reflect the time value of money is consistent with the currency and estimated term of the obligation.
Termination benefits
The municipality recognises termination benefits as a liability and an expense when the entity is demonstrably committed to either: Page 255 of 346
terminate the employment of an employee or group of employees before the normal retirement date; or provide termination benefits as a result of an offer made in order to encourage voluntary redundancy.
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King Sabata Dalindyebo Municipality Financial Statements for the year ended 30 June 2016
Accounting Policies
1.16 Employee benefits (continued)
The municipality is demonstrably committed to a termination when the entity has a detailed formal plan for the termination and is without realistic possibility of withdrawal. The detailed plan includes [as a minimum]: the location, function, and approximate number of employees whose services are to be terminated; the termination benefits for each job classification or function; and the time at which the plan will be implemented.
Implementation begins as soon as possible and the period of time to complete implementation is such that material changes to the plan are not likely.
Where termination benefits fall due more than 12 months after the reporting date, they are discounted using an appropriate discount rate. The rate used to discount the benefit reflects the time value of money. The currency and term of the financial instrument selected to reflect the time value of money is consistent with the currency and estimated term of the benefit.
In the case of an offer made to encourage voluntary redundancy, the measurement of termination benefits shall be based on the number of employees expected to accept the offer.
1.17 Provisions and contingencies
Provisions are recognised when: the municipality has a present obligation as a result of a past event; it is probable that an outflow of resources embodying economic benefits or service potential will be required to settle the obligation; and a reliable estimate can be made of the obligation.
The amount of a provision is the best estimate of the expenditure expected to be required to settle the present obligation at the reporting date.
Where the effect of time value of money is material, the amount of a provision is the present value of the expenditures expected to be required to settle the obligation.
The discount rate is a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability.
Where some or all of the expenditure required to settle a provision is expected to be reimbursed by another party, the reimbursement is recognised when, and only when, it is virtually certain that reimbursement will be received if the municipality settles the obligation. The reimbursement is treated as a separate asset. The amount recognised for the reimbursement does not exceed the amount of the provision.
Provisions are reviewed at each reporting date and adjusted to reflect the current best estimate. Provisions are reversed if it is no longer probable that an outflow of resources embodying economic benefits or service potential will be required, to settle the obligation.
Where discounting is used, the carrying amount of a provision increases in each period to reflect the passage of time. This increase is recognised as an interest expense.
A provision is used only for expenditures for which the provision was originally recognised.
Provisions are not recognised for future operating deficits.
If an entity has a contract that is onerous, the present obligation (net of recoveries) under the contract is recognised and measured as a provision.
Contingent assets and contingent liabilities are not recognised. Contingencies are disclosed in note 46.
A financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due in accordance with the original or modified terms of a debt instrument.
Loan commitment is a firm commitment to provide credit under pre-specified terms and conditions. Page 257 of 346
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King Sabata Dalindyebo Municipality Financial Statements for the year ended 30 June 2016
Accounting Policies
1.17 Provisions and contingencies (continued)
The municipality recognises a provision for financial guarantees and loan commitments when it is probable that an outflow of resources embodying economic benefits and service potential will be required to settle the obligation and a reliable estimate of the obligation can be made.
Decommissioning, restoration and similar liability
The municipality has raised a provision for rehabilitation of landfill sites and this relates to the legal obligation to rehabilitate landfill sites used for waste disposal. It is calculated as the present value of the future obligation, discounted over the a certain period as determined by the valuer. For key assumptions refer to Note 17 "Provisions"
1.18 Revenue from exchange transactions
Revenue is the gross inflow of economic benefits or service potential during the reporting period when those inflows result in an increase in net assets, other than increases relating to contributions from owners.
Revenue from exchange transactions refers to revenue that accrued to the municipality directly in return for services rendered/goods sold, the value of which approximates the consideration received or receivable excluding indirect taxes, rebates and discounts.
An exchange transaction is one in which the municipality receives assets or services, or has liabilities extinguished, and directly gives approximately equal value (primarily in the form of goods, services or use of assets) to the other party in exchange.
Fair value is the amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in an arm’s length transaction.
Measurement
Revenue is measured at the fair value of the consideration received or receivable, net of trade discounts and volume rebates.
Sale of goods
Revenue from the sale of goods is recognised when all the following conditions have been satisfied: the municipality has transferred to the purchaser the significant risks and rewards of ownership of the goods; the municipality retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold; the amount of revenue can be measured reliably; it is probable that the economic benefits or service potential associated with the transaction will flow to the municipality; and the costs incurred or to be incurred in respect of the transaction can be measured reliably
Rendering of services
When the outcome of a transaction involving the rendering of services can be estimated reliably, revenue associated with the transaction is recognised by reference to the stage of completion of the transaction at the reporting date. The outcome of a transaction can be estimated reliably when all the following conditions are satisfied: the amount of revenue can be measured reliably; it is probable that the economic benefits or service potential associated with the transaction will flow to the municipality; the stage of completion of the transaction at the reporting date can be measured reliably; and the costs incurred for the transaction and the costs to complete the transaction can be measured reliably.
When services are performed by an indeterminate number of acts over a specified time frame, revenue is recognised on a straight line basis over the specified time frame unless there is evidence that some other method better represents the stage of completion. When a specific act is much more significant than any other acts, the recognition of revenue is postponed until the significant act is executed.
When the outcome of the transaction involving the rendering of services cannot be estimated reliably, revenue Page 259 of 346
is recognised only to the extent of the expenses recognised that are recoverable.
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King Sabata Dalindyebo Municipality Financial Statements for the year ended 30 June 2016
Accounting Policies
1.18 Revenue from exchange transactions (continued)
Service revenue is recognised by reference to the stage of completion of the transaction at the reporting date. Stage of completion is determined by services performed to date as a percentage of total services to be performed .
Service Charges
Service charges relating to electricity are based on consumption. Meters are read on a monthly basis and revenue is recognised providing that the benefits can be measured reliably. Provisional estimates of consumption are made monthly when meter readings have not been performed. The provisional estimates of consumption are recognised as revenue when invoiced. Adjustments to provisional estimates of consumption are made in the invoicing period in which meters have been read. These adjustments are recognised as revenue in the invoicing period. The estimates of consumption between meter readings are based on average consumption.An accrual on the basis of a determined consumption factor is made for consumption not measured as at the end of the financial year.
Prepaid Electricity
Revenue from the sale of electricity prepaid meter cards and other services provided on a pre-payment basis are only recognised as income once the related units are consumed.
Refuse removal
Revenue relating to refuse removal are recognised on a monthly basis in arrears by applying the approved tariff to each property. Tariffs are determined per category of property usage, and are levied monthly based on the recorded number of refuse containers per property.
Rental income
Revenue from the rental of facilities and equipment is recognised on a straight-line basis over the term of the lease agreement.
Tariff Charges
Revenue arising from the application of the approved tariff is recognised when the relevant service is rendered by applying the relevant gazetted tariff. This includes the issuing of licences and permits.
Income from Agency fees
Revenue arising out of situations where the municipality acts as an agent on behalf of another entity (the principal) is limited to the amount of any fee or commission payable to the municipality as compensation for executing the agreed services.
Interest, royalties and dividends
Revenue arising from the use by others of entity assets yielding interest, royalties and dividends or similar distributions is recognised when: It is probable that the economic benefits or service potential associated with the transaction will flow to the municipality, and The amount of the revenue can be measured reliably.
Interest is recognised, in surplus or deficit, using the effective interest rate method.
Royalties are recognised as they are earned in accordance with the substance of the relevant agreements.
Dividends or similar distributions are recognised, in surplus or deficit, when the municipality’s right to receive payment has been established.
Service fees included in the price of the product are recognised as revenue over the period during which the service is performed.
1.19 Revenue from non-exchange transactions
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Revenue comprises gross inflows of economic benefits or service potential received and receivable by an municipality, which represents an increase in net assets, other than increases relating to contributions from owners.
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King Sabata Dalindyebo Municipality Financial Statements for the year ended 30 June 2016
Accounting Policies
1.19 Revenue from non-exchange transactions (continued)
Fines are economic benefits or service potential received or receivable by entities, as determined by a court or other law enforcement body, as a consequence of the breach of laws or regulations such as the .
Non-exchange transactions are transactions that are not exchange transactions. In a non-exchange transaction, an municipality either receives value from another municipality without directly giving approximately equal value in exchange, or gives value to another municipality without directly receiving approximately equal value in exchange.
Transfers are inflows of future economic benefits or service potential from non-exchange transactions, other than taxes.
Recognition
An inflow of resources from a non-exchange transaction recognised as an asset is recognised as revenue, except to the extent that a liability is also recognised in respect of the same inflow.
As the municipality satisfies a present obligation recognised as a liability in respect of an inflow of resources from a non- exchange transaction recognised as an asset, it reduces the carrying amount of the liability recognised and recognises an amount of revenue equal to that reduction.
Income received from conditional grants, donations and funding are recognised as revenue to the extent that the municipality has complied with any of the criteria or conditions attached, where conditions have not been met, a liability is raised. Government grants that are received as compensation for expenses or losses incurred or for the purpose of giving immediate financial support with no future related costs are recognised in the statement of financial performance in the year in which they have been received.
Interest earned on investments is treated in accordance with the grant conditions. If it is payable to the funders, it is recorded as part of creditors, and if it is the municipality's interest, it is recognised as interest earned in the statement of financial performance in the period in which it is received.
Government grants are recognised as revenue when : it is probable that the economic benefits or service potential associated with the transactions will flow to the entity. The amount of revenue can be measured reliably and to the extent that the conditions have been discharged and there has been a compliance with any restrictions associated with the grant.
Measurement
Revenue from a non-exchange transaction is measured at the amount of the increase in net assets recognised by the municipality.
When, as a result of a non-exchange transaction, the municipality recognises an asset, it also recognises revenue equivalent to the amount of the asset measured at its fair value as at the date of acquisition, unless it is also required to recognise a liability. Where a liability is required to be recognised it will be measured as the best estimate of the amount required to settle the obligation at the reporting date, and the amount of the increase in net assets, if any, recognised as revenue. When a liability is subsequently reduced, because the taxable event occurs or a condition is satisfied, the amount of the reduction in the liability is recognised as revenue.
Property rates
Revenue from property rates is recognised when the legal entitlement to this revenue arises. Collection charges are recognised when such amounts are legally enforceable. Penalty interest on unpaid rates is recognised on a time proportionate basis.
Rebates are granted to certain categories of rate payers, and these are deducted from revenue.
Transfers
Apart from Services in kind, which are not recognised, the municipality recognises an asset in respect of transfers when the transferred resources meet the definition of an asset and satisfy the criteria for recognition as an asset.
The municipality recognises an asset in respect of transfers when the transferred resources meet the definition of an Page 263 of 346
asset and satisfy the criteria for recognition as an asset.
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King Sabata Dalindyebo Municipality Financial Statements for the year ended 30 June 2016
Accounting Policies
1.19 Revenue from non-exchange transactions (continued)
Transferred assets are measured at their fair value as at the date of acquisition.
Fines
Fines constitute both spot fines and summonses. Revenue from spot fines and summonses is recognised when payment is received.
Where the municipality collects fines in the capacity of an agent, the fine will not be revenue of the collecting entity.
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King Sabata Dalindyebo Municipality Financial Statements for the year ended 30 June 2016
Accounting Policies
1.19 Revenue from non-exchange transactions (continued)
Gifts and donations, including goods in-kind
Gifts and donations, including goods in kind, are recognised as assets and revenue when it is probable that the future economic benefits or service potential will flow to the municipality and the fair value of the assets can be measured reliably.
Revenue from public contribution is recognised when all conditions associated with the contribution have been met or where contribution is to finance property, plant and equipment or when such items of property, plant and equipment are brought into use. Where contributions have been received but the conditions have not been met, a liability is recognised.
Services in-kind
Services in-kind are recognised as revenue and as assets.
1.20 Investment income
Investment income is recognised on a time-proportion basis using the effective interest method.
1.21 Borrowing costs
Borrowing costs that are directly attributable to the acquisition, construction or production of qualifying assets are capitalised to the cost of that asset unless it is inappropriate to do so. The municipality ceases the capitalisation of borrowing costs when substantially all the activities to prepare the asset for its intended use or sale are complete.
It is considered inappropriate to capitalise borrowing costs when, and only when, there is clear evidence that it is difficult to link the borrowing requirements of an entity directly to the nature of the expenditure to be funded i.e. capital or current
Borrowing costs are interest and other expenses incurred by an entity in connection with the borrowing of funds
Borrowing costs are recognised as an expense in the period in which they are incurred.
1.22 Surplus or deficit
Gains and losses arising from fair value adjustments on investments and loans, and from the disposal of assets, are presented separately from other revenue in the Statement of Financial Performance.
Income, expenditure, gains and losses are recognised in surplus or deficit except for the exceptional cases where recognition directly in net assets is specifically allowed or required by a Standard of GRAP.
1.23 Contingent assets and contingent liabilities
The municipality does not recognise contingent liabilities or contingent assets but discloses them
A contingent liability is a possible outflow of resources embodying economic benefits or service potential that is subject to a future event.
A contingent asset is where an inflow of economic benefits is probable.
1.24 Commitments
Items are classified as a commitment when the Municipality has committed itself to future transactions that will normally result in an outflow of resources embodying economic benefits or service potential. A commitment is disclosed to the extent that it has not already been recognised anywhere else in the financial statements.
At the end of each financial period the Municipality determines commitments in respect of capital expenditure that has been approved and contracted for which is then disclosed in the commitments note to the financial statements.
1.25 Comparative figures
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Where necessary, comparative figures have been reclassified to conform to changes in presentation in the current year.The nature and reason for the reclassification are disclosed in the comparative figure note to the financial statements.
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King Sabata Dalindyebo Municipality Financial Statements for the year ended 30 June 2016
Accounting Policies
1.25 Comparative figures (continued)
Where material accounting errors, which relate to prior periods, have been identified in the current year, the correction is made retrospectively as far as is practicable and the prior year comparatives are restated accordingly. Where there has been a change in accounting policy in the current year, the adjustment is made retrospectively as far as is practicable and the prior year comparatives are restated accordingly.
1.26 Unauthorised expenditure
Unauthorised expenditure means: overspending of a vote or a main division within a vote; and expenditure not in accordance with the purpose of a vote or, in the case of a main division, not in accordance with the purpose of the main division.
Also included is expenditure that is not in terms of the conditions of an allocation received from another sphere of government, municipality or organ of state and expenditure in the form of a grant that is not permitted in terms of the Municipal Finance Management Act (Act No.56 of 2003).
All expenditure relating to unauthorised expenditure is recognised as an expense in the statement of financial performance in the year that the expenditure was incurred. The expenditure is classified in accordance with the nature of the expense, and where recovered, it is subsequently accounted for as revenue in the statement of financial performance .
1.27 Fruitless and wasteful expenditure
Fruitless expenditure means expenditure which was made in vain and would have been avoided had reasonable care been exercised.
All expenditure relating to fruitless and wasteful expenditure is recognised as an expense in the statement of financial performance in the year that the expenditure was incurred. The expenditure is classified in accordance with the nature of the expense, and where recovered, it is subsequently accounted for as revenue in the statement of financial performance .
1.28 Irregular expenditure
Irregular expenditure is expenditure that is contrary to the Municipal Finance Management Act (Act No.56 of 2003), the Municipal Systems Act (Act No.32 of 2000), and the Public Office Bearers Act (Act No. 20 of 1998) or is in contravention of the economic entity’s supply chain management policy. Irregular expenditure excludes unauthorised expenditure. Irregular expenditure is accounted for as expenditure in the Statement of Financial Performance and where recovered, it is subsequently accounted for as revenue in the Statement of Financial Performance .
1.29 Internal reserves
Self insurance reserve
The municipality has a Self-Insurance Reserve to set aside amounts to offset potential losses or claims that cannot be insured externally. The balance of the Self-Insurance Reserve is determined based on 5% of the insurance risk carried by the municipality and past claims history in terms of a Council Resolution and is reinstated or increased by a transfer from the accumulated surplus/(deficit). The balance of the self-insurance fund is invested in short-term cash investments.
Claims are settled by transferring a corresponding amount from the self-insurance reserve to the accumulated surplus.
The municipality operates a self-insurance scheme under the Self-Insurance Reserve, which has a policy that is aligned with the practice in the Insurance Industry. The balance of the Self-Insurance Reserve is determined based on surpluses accumulated since inception.
At the end of each financial year the surplus as computed per above is transferred from accumulated surplus to Self- Insurance Reserve.
Premiums are calculated on past claims experience.
The balance of the self-insurance fund is fully cash backed and is invested in call accounts.
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King Sabata Dalindyebo Municipality Financial Statements for the year ended 30 June 2016
Accounting Policies
1.30 Revaluation reserve
The surplus arising from the revaluation of property, plant and equipment is credited to a non-distributable reserve. The revaluation surplus is realised as revalued buildings are depreciated, through a transfer from the revaluation reserve to the accumulated surplus/deficit. On disposal, the net revaluation surplus is transferred to the accumulated surplus/deficit while gains or losses on disposal, based on revalued amounts, are credited or charged to the statement of financial performance .
1.31 Change in accounting policy,estimate and errors
Changes in accounting policies that are effected by management have been applied retrospectively in accordance with GRAP 3 - Accounting policies, changes in accounting estimate and errors, requirements except to the extent that it is impracticable to determine the period-specific effects or the accumulative effect of the change in policy. In such cases the municipality shall restate the opening balances of assets and liabilities and net assets for the earliest period for which retrospective restatement is practicable. Details of the changes in accounting policy are disclosed in the notes to the financial statements where applicable.
Changes in accounting estimate are applied prospectively in accordance with GRAP 3 requirements. Details of changes in estimates are disclosed in the notes to the annual financial statements where applicable.
Correction of errors is applied retrospectively in the period in which the error has occurred in accordance with GRAP 3 except to the extent that it is impracticable to determine the period specific effects or the cumulative affect of the error. In such cases the municipality shall restate the opening balances of assets and liabilities and net assets for the earliest period for which retrospective treatment is practicable. Details of the prior period errors are disclosed in the notes to the financial statements where applicable.
1.32 Budget information
Municipality are typically subject to budgetary limits in the form of appropriations or budget authorisations (or equivalent), which is given effect through authorising legislation, appropriation or similar.
General purpose financial reporting by municipality shall provide information on whether resources were obtained and used in accordance with the legally adopted budget.
The approved budget covers the fiscal period from 2015/07/01 to 2016/06/30.
The budget for the economic entity includes all the entities approved budgets under its control.
The financial statements and the budget are on the same basis of accounting therefore a comparison with the budgeted amounts for the reporting period have been included in the Statement of comparison of budget and actual amounts .
The Statement of comparative and actual information has been included in the financial statements as the recommended disclosure when the financial statements and the budget are on the same basis of accounting as determined by National Treasury.
A difference of 10% or more between budget and actual amounts is regarded as material. All material differences are explained in the notes to the financial statements
Comparative information is not required.
1.33 Related parties
The municipality operates in an economic sector currently dominated by entities directly or indirectly owned by the South African Government. As a consequence of the constitutional independence of the three spheres of government in South Africa, only entities within the provincial sphere of government are considered to be related parties.
Key management are those persons responsible for planning, directing and controlling the activities of the municipality , including those charged with the governance of the municipality in accordance with legislation, in instances where they are required to perform such functions.
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Close members of the family of a person are considered to be those family members who may be expected to influence, or be influenced by, that management in their dealings with the municipality.
Page 270 of 346
King Sabata Dalindyebo Municipality Financial Statements for the year ended 30 June 2016
Accounting Policies
1.33 Related parties (continued)
Only transactions with related parties not at arm’s length or not in the ordinary course of business are disclosed in the financial statements.
1.34 Events after reporting date
Events after reporting date are those events, both favourable and unfavourable, that occur between the reporting date and the date when the financial statements are authorised for issue. Two types of events can be identified: those that provide evidence of conditions that existed at the reporting date (adjusting events after the reporting date); and those that are indicative of conditions that arose after the reporting date (non-adjusting events after the reporting date).
The municipality will adjust the amount recognised in the financial statements to reflect adjusting events after the reporting date once the event occurred.
The municipality will disclose the nature of the event and an estimate of its financial effect or a statement that such estimate cannot be made in respect of all material non-adjusting events, where non-disclosure could influence the economic decisions of users taken on the basis of the financial statements.
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King Sabata Dalindyebo Municipality Financial Statements for the year ended 30 June 2016
Notes to the Financial Statements
2. New standards and interpretations
2.1 Standards and interpretations Issued and Effective
The following accounting standards have been issued and are effective.These have been adopted by the municipality during the current financial period and the annual financial statements have been prepared in accordance with these.
GRAP 1 Presentation of Financial Statements
GRAP 2 Cash Flow Statements
GRAP 3 Accounting Policies, Changes in Accounting Estimates and Errors
GRAP 4 The Effects of Changes in Foreign Exchange Rates
GRAP 5 Borrowing costs
GRAP 6 Consolidated and Separate Financial Statements
GRAP 7 Investments in Associates
GRAP 8 Interests in Joint Ventures
GRAP 9 Revenue from Exchange Transactions
GRAP 10 Financial reporting in hyperinflationary economies
GRAP 11 Construction contracts
GRAP 12 Inventories
GRAP 13 Leases
GRAP 14 Events After the Reporting Date
GRAP 16 Investment property
GRAP 17 Property, Plant and Equipment
GRAP 18 Segment Reporting
GRAP 19 Provisions, Contingent Liabilities and Contingent Asset
GRAP 21 Impairment of non-cash generating assets
GRAP 23 Revenue from Non-exchange Transactions
GRAP 24 Presentation of Budgeted Information
GRAP 25 Employee Benefits
GRAP 26 Impairment of Cash-generating assets
GRAP 27 Agriculture
GRAP 31 Intangible Assets (replaces GRAP 102)
GRAP 100 Non-current assets held for sale and discontinued operations
GRAP 102 Intangible assets (replaced by GRAP 31)
GRAP 103 Heritage Assets Page 272 of 346
King Sabata Dalindyebo Municipality Financial Statements for the year ended 30 June 2016
Notes to the Financial Statements
2. New standards and interpretations (continued)
GRAP 104 Financial Instruments
GRAP 105 Transfer of functions between entities under common control - Issued November 2010
GRAP 106 Transfer of functions between entities not under common control - Issued November 2010
GRAP 107 Mergers - Issued November 2010
The following Interpretations have been issued and are effective.These have been adopted by the municipality during the current financial period and the annual financial statements have been prepared in accordance with these.
IGRAP 1 Applying the Probability Test on Initial Recognition of Exchange Revenue IGRAP 2 Changes in existing Decommissioning, Restoration and similar liabilities IGRAP 3 Determining whether an arrangement contains a Lease IGRAP 4 Rights to interest arising from Decommissioning, Restoration and Environmental Rehabilitation Funds IGRAP 5 Applying the restatement approach under the standard of GRAP on Financial Reporting in Hyperinflationary Economies IGRAP 6 Loyalty Programmes IGRAP 7 The limit on a defined benefit asset , Minimum funding requirements and their interaction IGRAP 8 Agreements for the construction of Assets from Exchange Transactions IGRAP 9 Distributions of non cash assets to Owners IGRAP 10 Assets received from Customers IGRAP 11 Consolidation - Special Purpose Entities IGRAP 12 Jointly Controlled Entities - Non-Monetary Contributions IGRAP 13 Operating Leases - Incentives IGRAP 14 Evaluating the substance of transactions involving the Legal form of a lease IGRAP 15 Revenue - Barter transactions Involving advertising Services IGRAP 16 Intangible Assets - Website Costs
Where there is no equivalent standard of GRAP or IPSAS an International Financial Reporting Standard (IFRS) that is effective forms part of the GRAP reporting framework. This applies to the accounting standards below
IAS 12 (AC 102) Income Taxes IAS 24 (AC 126) Related Party Disclosures IAS 32 (AC 125) Financial Instruments : Disclosure and presentation IAS 39 (AC 133) Financial Instruments : Recognition and measurement IFRS 07 (AC 144) Financial Instruments : Disclosures
2.2 Standards and interpretations issued, but not yet effective
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King Sabata Dalindyebo Municipality Financial Statements for the year ended 30 June 2016
Notes to the Financial Statements
2. New standards and interpretations (continued)
The following Standards of GRAP and / or amendments thereto have been issued by the Accounting Standards Board, but will only become effective in future periods or have not been given an effective date by the Minister of Finance. The entity has not early-adopted any of these new Standards or amendments thereto, but has referred to them for guidance in the development of accounting policies in accordance with GRAP 3 as read with Directive 5:
GRAP 20 Related Party Disclosures - Issued June 2011 GRAP 32 Service Concession Arrangements - Issued August 2013 GRAP 108 Statutory receivables - Issued September 2013 GRAP 109 Accounting by principals and agents - Issued July 2015
GRAP 20 - Related Party Disclosures
This standard requires the disclosure of related party relationships, transactions and outstanding balances, including commitments, in the consolidated and separate financial statements of the reporting entity.The precise impact of this on the financial statements of the municipality is still being assessed but it is expected that this will only result in additional disclosures without affecting the underlying accounting. This standard does not yet have an effective date.
GRAP 32 - Service Concession Arrangements : Grantor
The objective of the standard is to prescribe the accounting for service concession arrangements by the grantor, a public entity. The municipality must assess whether it is a grantor i.e. has granted the right to use the service concession asset to the operator. This standard then requires the municipality to recognise an asset provided by the operator and an upgrade to an existing asset of the grantor as a service concession asset if (a) the grantor controls or regulates what services the operator must provide with the asset,to whom it must be provided and at what price, and (b) the grantor controls through ownership, beneficial entitlement or otherwise, any significant residual interest in the asset at the end of the arrangement. Where a service concession asset is recognised, the grantor shall also recognise a liability at the same amount as the service concession asset.The precise impact of this on the financial statements of the municipality is still being assessed but it is not expected to be significant. This standard does not yet have an effective date.
GRAP 108 - Statutory Receivables
This standard requires the entity to recognise any receivables that arise from legislation,supporting legislations, or similar means and requires settlement by the entity in cash or another financial asset as statutory receivables.The municipality shall recognise statutory receivables using the standard of GRAP on revenue from exchange transactions if the transaction is an exchange transaction or the standard of GRAP on revenue from non exchange transactions if it is a non exchange transaction. Where the transaction is not within the scope of the above, the receivable must be recognised when the definition of an asset is met. The precise impact of this on the financial statements of the municipality is still being assessed but it is not expected to be significant. This standard does not yet have an effective date
GRAP 109 - Accounting by principals and agents
The objective of this Standard is to outline principles to be used by an entity to assess whether it is party to a principal- agent arrangement, and whether it is a principal or an agent in undertaking transactions in terms of such an arrangement.The precise impact of this on the financial statements of the municipality is still being assessed but it is expected that this will only result in additional disclosures without affecting the underlying accounting. This standard does not yet have an effective date.f
The following interpretation has been issued by the Accounting Standards Board but has not been given an effective date by the Minister of Finance. The entity has not early-adopted this new interpretation, but has referred to it for guidance in the development of accounting policies in accordance with GRAP 3 as read with Directive 5:
IGRAP 17 Interpretation of the Standard of GRAP on Service Concession Arrangements Where a Grantor Controls a Significant Residual Interest in an Asset - Issued August 2013
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King Sabata Dalindyebo Municipality Financial Statements for the year ended 30 June 2016
Notes to the Financial Statements
2. New standards and interpretations (continued)
IGRAP 17 - Interpretation of the Standard of GRAP on Service Concession Arrangements Where a Grantor Controls a Significant Residual Interest in an Asset
This Interpretation of the Standards of GRAP provides guidance to the grantor where it has entered into a service concession arrangement, but only controls, through ownership, beneficial entitlement or otherwise, a significant residual interest in a service concession asset at the end of the arrangement, where the arrangement does not constitute a lease. The impact of this on the financial statements is not expected to be significant. This interpretation does not yet have an effective date
Management has considered all the above-mentioned GRAP standards issued but not yet effective and anticipates that the adoption of these standards will not have a significant impact on the financial position, financial performance or cash flows of the municipality.
3. Inventories
Consumables Stores 6 546 891 3 293 356 Electrical Equipment 1 109 635 3 425 310
7 656 526 6 718 666
Inventories recognised as an expense during the year 3 189 269 2 293 756
4. Receivables from exchange transactions
Creditors with debit balances 596 232 369 675 Consumer debtors Other 9 809 9 390 Consumables Sundry Debtors 1 691 222 2 075 674 Consumer debtors - Electricity 40 781 742 34 816 024 Consumer debtors - Refuse (Filtered) 89 095 812 78 981 347 Consumer debtors - Rentals 99 301 744 87 258 897 Provision for Impairment (200 444 710) (175 769 749)
31 031 851 27 741 258
Trade and other receivables pledged as security
The municipality does not have any receivables from exchange transactions that have been pledged as security
Fair value of trade and other receivables
Trade and other receivables 31 031 851 27 741 258
The fair value of Trade and other receivables from exchange transactions approximates their carrying amount.
Trade and other receivables past due but not impaired
The normal credit term for the municipality is 30 days. At 30 June 2016, receivables of R 11 322 188 (2015: R 13 279 664) were past due but not impaired.
The ageing of amounts past due but not impaired is as follows:
1 month past due 4 539 770 6 976 688 2 months past due 702 643 2 346 802 3 months past due 840 575 525 036 over 3 months 4 403 544 2 855 622 Page 275 of 346
Penalties and interest 835 656 575 516
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King Sabata Dalindyebo Municipality Financial Statements for the year ended 30 June 2016
Notes to the Financial Statements Figures in Rand 2016 2015
4. Receivables from exchange transactions (continued)
Trade and other receivables impaired
As of 30 June 2016, trade and other receivables of R 200 444 710 (2015: R 175 769 749) were impaired and provided for.
The ageing of these amounts is as follows:
1 to 3 months 29 746 017 40 309 925 4 to 6 months 11 316 017 7 811 727 Over 6 months 118 587 486 96 874 950 Penalties and interest 40 795 190 30 769 147
Included in the above are receivables from exchange transactions as follows;
Electricity -Ageing Current 18 751 185 14 744 274 31 - 60 days 6 063 680 6 454 708 61 - 90 days 1 922 763 3 238 026 91 - 120 days 2 655 714 2 758 494 > 120 days 9 216 747 6 212 665 Penalties and interest 2 171 652 1 407 857
40 781 741 34 816 024
Refuse - Ageing Current 3 799 522 3 758 102 31 - 60 days 1 350 855 11 227 596 61 - 90 days 1 337 564 5 590 364 91 - 120 days 1 205 927 1 224 355 > 120 days 67 355 566 48 569 962 Penalties and interest 14 046 378 8 630 951
89 095 812 79 001 330
Rentals - Ageing Current 1 246 224 1 087 794 31 - 60 days 1 037 505 1 027 166 61 - 90 days 993 637 941 693 91 - 120 days 934 267 853 002 > 120 days 64 854 856 58 155 905 Penalties and interest 30 235 255 25 189 992
99 301 744 87 255 552
Sundry debtors- Ageing Current - - 31 - 60 days 3 620 - 61 - 90 days - - > 120 days 1 687 602 2 075 674
1 691 222 2 075 674
Reconciliation of provision for impairment of trade and other receivables
Opening balance 175 769 749 144 023 310 Provision for impairment 24 674 961 31 746 439
200 444 710 175 769 749
Page 277 of 346
King Sabata Dalindyebo Municipality Financial Statements for the year ended 30 June 2016
Notes to the Financial Statements
Figures in Rand 2016 2015
4. Receivables from exchange transactions (continued)
Summary of debtors by customer classification Consumers Industrial/ Government Total
Commercial as at 30 June 2016
Current 4 430 578 13 231 326 3 500 115 21 162 019
31 -60 days 1 829 854 5 352 063 1 273 744 8 455 661
61 - 90 days 1 764 817 2 311 840 177 307 4 253 964
91 - 120 days 1 659 299 2 866 952 269 657 4 795 908
>120 days 113 223 624 26 480 566 3 420 390 143 124 580
Penalties and interest 38 049 569 7 781 224 622 492 46 453 285
160 957 741 58 023 971 9 263 705 228 245 417
Less provision for impairment (157 083 115) (43 361 595) - (200 444 710)
3 874 626 14 662 376 9 263 705 27 800 707
Summary of debtors by customer classification Consumers Industrial/ Government Total
Commercial as at 30 June 2015
Current 4 215 729 9 442 975 4 014 154 17 672 858
31 - 60 days 11 066 015 6 011 380 1 632 075 18 709 470
61 - 90 days 5 538 501 3 561 593 669 988 9 770 082
91 - 120 days 1 326 186 3 231 472 278 192 4 835 850
>120 days 93 852 182 18 265 265 2 906 571 115 024 018
Penalties and interest 29 214 756 5 427 852 586 192 35 228 800
145 213 369 45 940 537 10 087 172 201 241 078
Less provision for impairment (142 595 244) (33 174 505) - (175 769 749)
2 618 125 12 766 032 10 087 172 25 471 329
5. Receivables from non-exchange transactions
Other receivables from non-exchange revenue 2 065 385 315 083 Consumer debtors old balances 70 564 69 464
Consumer debtors - Rates 200 696 123 159 777 863
Impairment (184 904 134) (147 684 235)
17 927 938 12 478 175
Receivables from non-exchange transactions pledged as security
The municipality does not have any receivables from non exchange transactions that have been pledged as security.
Fair value of receivables from non-exchange transactions
Other receivables from non-exchange transactions 17 927 938 12 478 175
The fair value of trade and other receivables from non exchange transactions, approximates their carrying amount.
Page 278 of 346
King Sabata Dalindyebo Municipality Financial Statements for the year ended 30 June 2016
Notes to the Financial Statements Figures in Rand 2016 2015
5. Receivables from non-exchange transactions (continued)
Receivables from non-exchange transactions past due but not impaired
The normal credit term for the municipality is 30 days. At 30 June 2016, receivables of R 10 229 274 (2015: R 9 158 185) were past due but not impaired.
The ageing of amounts past due but not impaired is as follows:
1 month past due 776 105 4 602 469 2 months past due 606 715 256 851 3 months past due 408 800 16 046 more than 3 months past due 7 384 760 3 856 915 Penalties and interest 1 052 891 425 904
Receivables from non-exchange transactions impaired
As of 30 June 2016, other receivables from non-exchange transactions of R 184 904 134 (2015: R 147 684 235) were impaired and provided for.
The ageing of the amounts impaired and provided for as follows:
1 to 3 months 25 976 134 47 299 832 4 to 6 months 6 803 501 2 065 132 Over 6 months 127 340 112 85 715 675 Penalties and interest 24 784 387 12 673 597
Included in the above are receivables from non-exchange transactions are as follows;
Rates - Ageing Current 22 039 763 19 069 612 31 - 60 days 3 211 527 24 037 743 61 - 90 days 2 953 284 8 234 661 91 - 120 days 2 532 181 795 046 > 120 days 143 048 779 94 559 153 Penalties and interest 26 910 589 13 777 055
200 696 123 160 473 270
Other (old balances) - Ageing Current - - 31 - 60 days - - 61 - 90 days - - 91 - 120 days 70 564 69 464 > 120 days - -
70 564 69 464
Reconciliation of provision for impairment of receivables from non-exchange transactions
Opening balance 147 684 235 112 153 600 Provision for impairment 37 219 899 35 530 635
184 904 134 147 684 235
6. VAT receivable (payable)
VAT receivable (payable) 12 708 503 (8 487 640)
Page 279 of 346
King Sabata Dalindyebo Municipality Financial Statements for the year ended 30 June 2016
Notes to the Financial Statements Figures in Rand 2016 2015
7. Cash and cash equivalents
Cash and cash equivalents consist of:
Cash on hand 1 050 1 050 Bank balances 6 236 869 7 486 171 Own investments- Short term 5 856 614 5 369 538 Other cash and cash equivalents 407 280 27 329 995
12 501 813 40 186 754
Pledged as security
The municipality has ceded an investment equivalent to the principal loan amount plus interest calculated up to September 2003 in favour of the DBSA loan 10875/102.
Credit quality of cash at bank and short term deposits, excluding cash on hand
The credit quality of cash at bank and short term deposits, excluding cash on hand that are neither past due nor impaired can be assessed by reference to external credit ratings (if available) or historical information about counterparty default rates. Excess cash is invested with reputable financial institutions with good credit ratings.
The municipality had the following bank accounts
Account number / description Bank statement balances Cash book balances 30 June 2016 30 June 2015 30 June 2014 30 June 2016 30 June 2015 30 June 2014 FNB Call Account 62090323636 837 213 2 738 409 549 033 837 213 2 738 409 550 988 ABSA Call Account- 1 443 439 2 661 792 456 567 1 443 439 2 661 792 456 112 4061496604 ABSA Cheque Account 355 280 1 997 039 3 702 280 355 280 1 992 149 3 993 752 4048218780 ABSA Cash Focus 4053806112 - (224) 34 030 - 1 211 20 781 Self Insurance Reserve (Hollard 3 045 886 2 692 908 2 370 759 3 045 886 2 692 908 2 370 759 Insurance Company - Experience Account) ABSA Transkei United Dairies - - 1 845 835 - - 1 852 283 9279137106 ABSA Call Account - - 3 189 006 - - 3 200 260 Ngangelizwe 9105768376 ABSA Call Account MTAB 16 741 514 265 514 265 17 190 516 167 517 079 9061932550 Unclaimed Group Life Insurance 2 398 819 2 283 953 2 185 286 2 409 564 2 292 307 2 192 919 ABSA 9057846202 ABSA Call Zimbane Heights - - 5 311 980 - - - 9279140385 ABSA Target Save -Various 179 012 171 331 162 904 179 010 171 331 229 894 Accounts ABSA Call Account MIG - - 9 551 - - 42 434 9148935255 ABSA Call Disaster - - 2 300 889 - - 2 309 010 Management 9111059492 ABSA Call Account DOE - - 67 371 176 - - 67 371 176 9259916285 ABSA Call Fire Station - - 2 333 449 - - 2 341 669 9260112315 ABSA Call Acc DOT - - 7 638 419 - - 7 664 902 9282955018 ABSA Call Acc Grant Admin 15 683 25 768 430 000 15 753 25 866 431 514 9260118400 ABSA Call Acc MPCC - - 1 857 644 - - 1 864 133 Page 280 of 346
9272373062
46
Page 281 of 346
Transkei United Dairies King Sabata Dalindyebo Municipality Financial Statements for the year ended 30 June 2016
Notes to the Financial Statements
Figures in Rand
7. Cash and cash equivalents (continued) ABSA Call Acc Ngangelizwe 1 936 110 783 119 546 1 989 ISUP 9264472169 ABSA Call Acc Hillcrest ISUP - - 2 194 585 - 9281805743 ABSA Call Acc ISUP Joe Slove - - 14 270 370 - 9264255581 ABSA Call Acc ISUP Maydene - - 6 084 - 9264472915 ABSA Call Acc 9264472541 - - 2 774 491 - Investec Bank Invest 219 313 212 956 206 644 219 313 1100456924 ABSA Call Acc KSD Election 2 671 251 467 251 446 2 721 9260118662 ABSA Call Acc KSD Intervention - 30 020 30 135 - 4061496125 ABSA Call MSG 9097169945 54 395 53 893 53 893 54 395 ABSA Call Infrastructure Skills - - 930 232 - Development 9285398815 ABSA Call Mqanduli Milling 3 679 3 728 3 738 3 676 9118441412 ABSA Call MSIG 9153705564 - - 212 486 - ABSA Call 9279137350 - - 2 179 232 - Maydene Farm Ext ABSA call Rural Planning 3 436 449 277 468 034 3 492 9260110101 ABSA Call UphuhlisoLwethu 5 310 167 114 179 120 5 334 9260112632 ABSA Call Organogram Dev 5 888 294 477 294 477 5 958 9260110397 ABSA Call Library 9279137211 - - 1 034 561 - ABSA Call Mqanduli Middle 5 528 333 652 333 651 5 528 Income 9095799392 ABSA Call Light The Pilot 8 082 236 947 236 946 8 152 9260109699 FNB Cheque 62471836513 3 570 268 248 080 1 027 3 600 936 FNB Call 62480366345 DOE 16 268 3 573 255 - 16 268 Electrification FNB Call 62480370031 FMG 2 280 67 349 - 2 280 FNB Call 62480368838 MIG 13 052 1 000 - 13 052 Account UCCMIP FNB Call 62480371592 MSIG 3 922 205 060 - 3 922 FNB Call 62480372863 Library 3 644 1 070 313 - 3 644 FNB Call 62486520151 2 896 360 774 - 2 896 Infrastructure Skills Dev FNB Call 62500280516 LED 1 686 106 674 - 1 686 Support FNB Call 62500281936 1 842 1 241 907 - 1 842 Chamber Of Mines FNB Call 62504407801 2 797 2 788 938 - 2 797 Ngangelizwe Urban Ren FNB Call 62504409477 Disaster 5 905 2 277 899 - 5 905 Management FNB Call 62504410383 Fire 4 330 2 340 938 - 4 330 Station FNB Call 62504411315 ISUP 6 755 2 732 731 - 6 755 Phola Park FNB Call 62504412066 6 300 6 237 - 6 300 Maydene ISUP FNB Call 62504413741 23 712 27 066 - 23 712 Page 282 of 346
295 562 295 522
- 1 038 544 334 886 334 829
2016 2015 237 819 237 781 92 609 (12 137) 111 192 119 963 3 573 255 - 67 349 - - 2 202 251 1 000 - - 14 270 370 205 060 - 1 070 313 - - 6 106 360 774 - - 2 784 182 212 992 206 645 106 674 -
252 393 252 966 1 241 907 -
30 091 30 144 2 788 938 - 54 092 54 083 2 277 899 - - 930 232 2 340 938 - 3 709 3 737 2 732 731 - - 213 757 - 2 186 845 6 237 -
450 906 469 633 27 066 -
167 729 179 751
47
Page 283 of 346
King Sabata Dalindyebo Municipality Financial Statements for the year ended 30 June 2016
Notes to the Financial Statements
Figures in Rand 2016 2015
7. Cash and cash equivalents (continued)
FNB Call 62504414608 34 730 125 281 - 34 730 125 281 -
Maydene Farm Extension
FNB Call 62504417420 40 109 47 654 - 40 109 47 654 -
Zimbane Heights
FNB Call 62504418022 ISUP 43 482 33 357 - 43 482 33 357 -
Hillcrest
FNB Call 62504444639 DOT 8 105 7 263 487 - 8 105 7 263 488 -
Taxi Rank
FNB Call 62505830811 ISUP 9 638 412 298 - 9 638 412 298 -
Joe Slovo
FNB Call 62521207911 644 146 420 - 644 146 420 -
Electricity Demand Side
FNB Call 62523941070 New 10 590 10 473 - 10 590 10 473 -
Brighton
FNB Call 62523942408 KEI Rail 10 590 10 474 - 10 590 10 473 -
FNB Call 74486524158 - 1 - - - -
FNB Call 62557024785 H S 29 816 - - 29 816 - -
Graduates
FNB 62559404092 Asset 2 856 - - 2 841 - -
Financing
Total 12 458 528 40 327 221 128 043 771 12 500 763 40 185 705 123 214 869
8. Investment property
2016 2015
Cost / Accumulated Carrying value Cost / Accumulated Carrying value Valuation depreciation Valuation depreciation
And and
accumulated accumulated
impairment impairment
- Investment property 228 859 454 - 228 859 454 205 205 355 205 205 355
Reconciliation of investment property - 2016
Opening Additions Disposals Fair value Total Balance adjustments
Investment property 205 205 355 3 497 454 (796 500) 20 953 145 228 859 454
Reconciliation of investment property - 2015
Opening Disposals Fair value Total balance adjustments
Investment property 195 167 900 (653 000) 10 690 455 205 205 355
Pledged as security
The municipality does not have any investment property that is pledged as security:
A register containing the information required by section 63 of the Municipal Finance Management Act is available for inspection at the registered office of the municipality.
Details of valuation
The effective date of the revaluations was 30 June 2016. Revaluations were performed by an independent valuer, Mr Kwasi Agyaben-Boateng, B.Sc Honours (Land Economy) and registered as a professional valuer in terms of the Valuers Act Page 284 of 346
(Registration No 3550/9), of Khanyisa Property Management Services. Khanyisa Property Management Services are not connected to the municipality and have recent experience in location and category of the investment property being valued.
Page 285 of 346
King Sabata Dalindyebo Municipality Financial Statements for the year ended 30 June 2016
Notes to the Financial Statements Figures in Rand 2016 2015
8. Investment property (continued)
The valuation was based on open market value for existing use.
Amounts recognised in surplus and deficit for the year
Rental revenue from investment property 1 449 231 1 455 919
Fair value adjustments recognised in surplus or deficit 20 953 145 10 690 455
9. Property, plant and equipment
2016 2015
Cost / Accumulated Carrying value Cost / Accumulated Carrying value Valuation depreciation Valuation depreciation
And and
accumulated accumulated
Impairment impairment
Land 234 893 000 - 234 893 000 236 169 000 - 236 169 000 Buildings 302 860 461 (30 476 795) 272 383 666 270 642 511 (14 766 780) 255 875 731
Infrastructure 1 961 625 132 1 086 704 078) 874 921 054 1 967 564 912 1 106 019 166) 861 545 746
Community 468 166 690 (47 192 089) 420 974 601 463 153 299 (26 334 239) 436 819 060
Other property, plant and 20 830 099 (15 694 352) 5 135 747 19 670 957 (12 980 128) 6 690 829 equipment
Work In Progress 493 237 557 - 493 237 557 344 361 625 - 344 361 625
Specialised vehicles 43 058 094 (13 924 690) 29 133 404 71 988 319 (40 491 676) 31 496 643
Total 3 524 671 033 (1 193 992 004) 2 330 679 029 3 373 550 623 (1 200 591 989) 2 172 958 634
Page 286 of 346
P a g e 2 8 7 of 3 4 6
King Sabata Dalindyebo Municipality Financial Statements for the year ended 30 June 2016
Notes to the Financial Statements
Figures in Rand
9. Property, plant and equipment (continued)
Reconciliation of property, plant and equipment - 2016
Opening Additions Disposals Transfers Depreciation Impairment Total Balance loss Land 236 169 000 - (1 276 000) - - - 234 893 000 Buildings 255 875 731 32 217 930 - - (15 709 995) - 272 383 666 Infrastructure 861 545 746 48 575 029 (1 562 357) 81 692 052 (115 002 973) (326 443) 874 921 054 Community 436 819 060 1 117 940 - 3 895 450 (20 857 849) - 420 974 601 Other property, plant and equipment 6 690 829 1 175 680 (16 537) - (2 714 225) - 5 135 747 Work In Progress 344 361 625 234 463 434 - (85 587 502) - - 493 237 557 Specialised vehicles 31 496 643 10 996 419 (2 240 508) - (11 119 150) - 29 133 404
2 172 958 634 328 546 432 (5 095 402) - (165 404 192) (326 443) 2 330 679 029
Reconciliation of property, plant and equipment - 2015
Opening Additions Disposals Transfers Write-offs Depreciation Impairment Total balance loss Land 238 150 500 - (1 981 500) - - - - 236 169 000 Buildings 270 642 786 - - - - (14 767 055) - 255 875 731 Infrastructure 1 017 654 006 3 088 107 (14 100 335) 57 782 120 - (143 270 025) (59 608 127) 861 545 746 Community 455 941 979 175 265 - 6 351 278 - (25 649 462) - 436 819 060 Other property, plant and equipment 7 240 146 2 454 637 (20 434) - - (2 983 520) - 6 690 829 Work In Progress 374 998 415 143 599 058 (50 755 475) (64 133 398) (59 346 975) - - 344 361 625 Specialised vehicles 35 126 712 7 162 010 - - - (10 792 079) - 31 496 643
2 399 754 544 156 479 077 (66 857 744) - (59 346 975) (197 462 141) (59 608 127) 2 172 958 634
Pledged as security
The municipality has ceded to DBSA all rights, title and interest to residential properties owned by it valued at approximately R12 million in relation to the DBSA loan 13335/201.
The Munitata building, Erf 9441, 47 to 49, was ceded to PIC as security for a loan. Page 288 of 346
Assets subject to finance lease
Page 289 of 346
King Sabata Dalindyebo Municipality Financial Statements for the year ended 30 June 2016
Notes to the Financial Statements Figures in Rand 2016 2015
9. Property, plant and equipment (continued)
Included under specialised motor vehicles are 64 vehicles which are under finance lease from Aristopix (Pty) Ltd with a total carrying amount of R0 (2015: R8 605 86). Refer to Note 13 "Finance Lease Obligation" for additional information.
Included under other property, plant and equipment are 160 computers which are under a finance lease from Information Communication Technology (Pty) Ltd with a total carrying amount of R1 279 260 (2015: R1 618 76).
Revaluations
The effective date of the revaluations was 30 June 2015. Revaluations were performed by independent valuer, Mr Kwasi Agyaben-Boateng, of Messrs Khanyisa Property Management Services. Messrs Khanyisa Property Management Services are not connected to the municipality.
Land, buildings and community assets are re-valued independently after 3 - 5 years.
These assumptions used were based on current market conditions.
A register containing the information required by section 63 of the Municipal Finance Management Act is available for inspection at the registered office of the municipality.
10. Intangible assets
2016 2015
Cost / Accumulated Carrying value Cost / Accumulated Carrying value Valuation amortisation Valuation amortisation
and and
accumulated accumulated
impairment impairment
Computer software, other 2 416 037 (1 098 786) 1 317 251 2 416 037 (721 650) 1 694 387
Reconciliation of intangible assets - 2016
Opening Amortisation Total balance
Computer software, other 1 694 387 (377 136) 1 317 251
Reconciliation of intangible assets - 2015
Opening Additions Disposals Amortisation Total balance
Computer software, other 465 864 1 422 438 (77 820) (116 095) 1 694 387
Pledged as security
The municipality does not have any intangible assets that are pledged as security.
11. Heritage assets
2016 2015
Cost / Accumulated Carrying value Cost / Accumulated Carrying value Page 290 of 346
Valuation impairment Valuation impairment
losses losses
Recreational parks 4 697 000 - 4 697 000 4 697 000 - 4 697 000
Page 291 of 346
King Sabata Dalindyebo Municipality Financial Statements for the year ended 30 June 2016
Notes to the Financial Statements
Figures in Rand 2016 2015
11. Heritage assets (continued)
Reconciliation of heritage assets 2016
Opening Total balance Recreational parks 4 697 000 4 697 000
Reconciliation of heritage assets 2015
Opening Total balance Recreational parks 4 697 000 4 697 000
12. Other financial liabilities
At amortised cost Annuity Loan DBSA 23 937 370 27 703 811
DBSA loan 61001245 is redeemable in March 2018 and borrowing rate is 15% DBSA loan 61003135 is redeemable in December 2020 and borrowing rate is based on the JIBAR rate DBSA loan 61001048 is redeemable in 2026 and a borrowing rate is 6.75 %
Annuity Loan PIC 17 253 441 23 309 112
PIC loan is redeemable in December 2018 and the borrowing rate is 8% . KSD cedes to PIC in securitatem debiti rights in the Municipal Building of KSD situated at ERF 9441, 47 to 49 Sutherland Street Mthatha measuring 8.309 square metres.
41 190 811 51 012 923
Non-current liabilities Designated at fair value - - Annuity Loan - DBSA 21 209 099 24 468 409 Annuity Loan - PIC 10 753 443 17 288 750
31 962 542 41 757 159
Current liabilities Designated at fair value - - Annuity Loan DBSA 2 728 271 3 235 402 Annuity Loan - PIC 6 499 998 6 020 362
9 228 269 9 255 764
Page 292 of 346
King Sabata Dalindyebo Municipality Financial Statements for the year ended 30 June 2016
Notes to the Financial Statements
Figures in Rand 2016 2015
13. Finance lease obligation
Minimum lease payments due
- within one year 1 220 389 15 981 652
- in second to fifth year inclusive 516 654 6 022 863
1 737 043 22 004 515
less: future finance charges (457 783) (6 390 218)
Present value of minimum lease payments 1 279 260 15 614 297
Present value of minimum lease payments due
- within one year 843 746 10 704 766
- in second to fifth year inclusive 435 514 4 909 531
1 279 260 15 614 297
Non-current liabilities 435 514 4 909 531
Current liabilities 843 746 10 704 766
1 279 260 15 614 297
The Aristopix (Pty) Ltd motor vehicle finance lease contract was entered into during 2010. The finance lease period is for 5 years and each vehicle's period of lease begins on the delivery date and expires after 5 years. The finance lease balance is R0 (2015: R13 690 166) and attracts an average interest rate of 0% (2015: 51%) per annum.
The Information Communication Technology (Pty Ltd computer finance computer leases contract was entered into during the 2014/15 financial year. The finance lease is for the period of 3 years and each computer's lease period begins on the delivery date and expires after 3 years. The finance lease balance had a balance of R1 279 260 (2015: R1 924 132) and attracts an average interest rate of 18%.
14. Payables from exchange transactions
Trade payables 104 550 324 105 498 221 BT Ngebs 16 721 958 - Operating lease smoothing 21 571 - Deferred interest 18 392 - Income Received In Advance 1 970 704 1 695 100 Salary payovers 17 984 767 13 067 990 Staff Prepaid Houses 1 075 999 1 075 999 Study Loans 24 335 24 335 Retentions 6 306 310 5 552 185 National Revenue Fund Funds to be surrendered 1 285 257 1 285 257 Unknown Deposits 7 509 373 6 908 549 Litigations Liability (122 874) (122 874) Insurance Claims 192 701 192 701 Other payables 29 947 537 35 761 241 Deposits received 1 348 483 1 156 587 Accrued expense 14 200 280 5 006 498 Accrued Leave Pay and Bonus 51 654 865 45 372 968 Unclaimed Group Life 2 014 240 2 014 240
256 704 222 224 488 997
The fair value of Trade and other payables approximates the carrying amount.
15. Consumer deposits
Electricity 15 718 570 12 756 530
Page 293 of 346
King Sabata Dalindyebo Municipality Financial Statements for the year ended 30 June 2016
Notes to the Financial Statements Figures in Rand 2016 2015
16. Unspent conditional grants and receipts
Unspent conditional grants and receipts comprises of:
Unspent conditional grants and receipts National: Department of Energy- Electrification Projects 1 559 320 86 430 Grant Admin Development 15 608 15 979 Provincial: Municipal Infrastructure Grant 12 060 - Provincial: Department of Housing 333 652 333 652 Provincial : Uphuhliso Lwethu 5 280 167 114 Provincial: Rural Planning and Survey 449 250 449 250 Provincial: KSD Elections- Road Maintenance 1 251 467 251 720 Library Grant 640 286 1 060 496 LED Support 1 668 106 411 Infrastructure Skills Development 54 685 357 422 Human Settlements Projects 5 806 574 3 348 266 Human Settlements Graduates 128 775 - Electricity Demand Side Management 429 106 429 FMG 450 969 - Provincial : Organogram Development 294 477 294 477 Provincial: MTAB Grant 514 265 514 265 Provincial: Municipal Systems Improvement Grant (12 060) 105 421 Provincial: Multipurpose Community Centre 10 10 Provincial: Light the Pilot Media 236 947 236 947 Provincial: Urban Renewal Grant 2 779 830 2 779 830 Provincial : Department of Transport- Taxi Rank 7 236 277 7 236 277 Provincial: Disaster Management 1 536 138 2 270 515 Provincial: Fire Station Refurbishment 720 570 2 333 450 Provincial : Municipal Support Grant 53 893 53 893 Chamber of Mines Grant 352 882 352 882
24 423 252 22 461 136
Movement during the year
Balance at the beginning of the 22 461 136 111 687 503 year Additions during the year 165 444 937 90 319 000 Income recognition during the year (162 854 723) (178 987 240) Re-allocation of funds (2 206 000) - Reclasification to sundry debtors 1 676 360 - Interest payover to Human (377 737) (1 163 665) Settlements Interest Received 279 279 605 538
24 423 252 22 461 136
17. Provisions
Reconciliation of provisions - 2016
Opening Reductions Interest Total Balance Provision for long service awards 17 536 000 (2 334 153) - 15 201 847 Environmental rehabilitation 21 400 390 - 626 329 22 026 719
38 936 390 (2 334 153) 626 329 37 228 566
Page 294 of 346
King Sabata Dalindyebo Municipality Financial Statements for the year ended 30 June 2016
Notes to the Financial Statements Figures in Rand 2016 2015
17. Provisions (continued)
Reconciliation of provisions – 2015
Opening Reductions Change in Interest Total Balance provision of obligation Provision for long service awards 18 069 000 (533 000) - - 17 536 000 Environmental Rehabilitation 27 387 505 - (6 619 509) 632 394 21 400 390
45 456 505 (533 000) (6 619 509) 632 394 38 936 390
Environmental rehabilitation provision
The provision relates to the rehabilitation of landfill sites. At the current valuation date, 30 June 2016 the duration of the liability was 14 years. At this duration the discount rate determined by using the Bond Exchange Zero Coupon Yield Curve as at 30 June 2016 is 8.76% per annum. The assumed discount rate used at the previous valuation, 30 June 2015, was 9.08% per annum determined in the same way. At 30 June 2016 the yield on inflation linked bonds of a similar term was about 2.31% per annum. This implies an underlying expectation of inflation of 6.97% per annum with a risk premium adjustment for the uncertainty implicit in guaranteeing real increases of 0% (2015: 0.50%). An adjustment was made to correct the financial statements so that there is consistency between the financial statements as well as the information provided by the external valuer Kazuo Resources
Provision for long service awards
Service cost increased the liability by R2 029 000. Interest cost over the valuation period resulted in an increase in liability by R1 371 000. Some of the employees attained milestones during the valuation period and this resulted in bonus payments of R2 276 000 which reduced the accrued liability by the same margin.
The average liability has decreased by 16% due to an increase in the net discount rate, partially offset by an increase in the average salary and an increase in the average past service. The total liability has decreased by 13% (or R 2,334,153) due to an increase in the net discount rate from 1.21% to 1.25%, partially offset by the fact that there are 30 more eligible employees than at the last valuation.
Provision for long service award 2016 2015 Opening net liability 17 536 000 18 069 000 Service cost 2 029 000 1 570 000 Interest cost 1 371 000 1 473 000 Actuarial loss (3 458 153) (2 046 000) Bonus Paid (2 276 000) (1 530 000)
15 201 847 17 536 000
18. Revaluation reserve
Opening balance 384 413 531 385 072 030 Change during the year (425 500) (658 499)
383 988 031 384 413 531
The revaluation reserve arises out of revaluation of land and buildings.
19. Self insurance reserve
The self-insurance reserve is established to cater for declined or disputed insurance claims.
Opening balance 2 692 908 2 370 759 Movement during the year 352 978 322 149
3 045 886 2 692 908 Page 295 of 346
King Sabata Dalindyebo Municipality Financial Statements for the year ended 30 June 2016
Notes to the Financial Statements
Figures in Rand 2016 2015
20. Service charges
Sale of electricity 281 197 609 239 978 170
Refuse removal 34 933 957 26 764 727
316 131 566 266 742 897
21. Rental of facilities and equipment
Premises
Premises 13 129 662 13 077 294
Facilities and equipment
Rental of facilities 428 607 302 073
Rental of equipment 1 635 027 1 689 092
2 063 634 1 991 165
15 193 296 15 068 459
22. Licences and permits
Licence fees - Drivers Licence 4 843 993 5 720 244 Vehicle registration and roadworthy fees 1 526 628 1 591 840
Motor vehicle registration fees 7 437 211 6 162 837
Licence fees – Business 67 469 35 077
Permits - Vending and Hawking 104 291 108 394
13 979 592 13 618 392
23. Other Income
Building plan approvals 1 323 213 819 691 Call out revenue 24 517 1 064
Disconnection fees 483 834 410 499
Insurance claims - 79 257
Meter testing 775 077 603 043
Library fees 140 588 -
Tender fees 545 692 540 180
Recoveries 609 016 805 090
Pound fees 15 090 42 163
Fees earned 6 792 297 8 741 921
Other income 115 711 254 977
Sundry income 752 643 199 897
Reversal of provision for Landfill Site - 6 619 509
Reversal of provision for Long Service Awards 2 334 153 -
13 911 831 19 117 291
24. Investment revenue
Interest received
Interest from investments and bank 3 340 930 4 398 838
Interest charged on trade and other receivables 32 000 110 25 091 434
35 341 040 29 490 272
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King Sabata Dalindyebo Municipality Financial Statements for the year ended 30 June 2016
Notes to the Financial Statements Figures in Rand 2016 2015
25. Property rates
Rates received
Residential 39 829 181 40 906 302 Commercial 62 244 557 44 772 846 State 77 991 444 73 316 890 Municipal – parking 514 211 485 643
180 579 393 159 481 681
Valuations
Residential 7 897 555 500 8 053 745 000 Commercial 4 086 428 500 2 448 851 500 State 3 391 072 500 2 251 422 000 Municipal 2 011 314 000 2 568 707 000 Small holdings, farms and agriculture 59 104 000 13 042 000 Open spaces 44 651 500 745 116 500 Places of public worship 109 630 000 112 675 000 Vacant Land 583 187 000 767 420 500 Schools - 405 744 000
18 182 943 000 17 366 723 500
Valuations on land and buildings are performed every 4 years. The last general valuation came into effect on 1 July 2014. Interim valuations are processed on an annual basis to take into account changes in individual property values due to alterations and subdivisions.
The Department of Education has become the sole custodian for schools therefore the schools property category now falls under "State"..
26. Government grants and subsidies
Operating grants Equitable share 251 210 000 206 246 000 MIG 1 612 413 2 288 362 VAT Operational 133 793 (2 259 997) Electricity Demand Side Management Grant - 2 641 395 Disaster Management Grant 728 780 30 374 Infrastructure Skills Development 3 456 119 3 527 558 Human Settlements: Graduates 714 002 - MM Intervention Grant - 31 081 SETA Grant 876 526 497 963 MSIG Grant 1 000 341 987 377 FMG 1 193 928 1 538 687 Various grants 266 578 995 979 Library Grant 2 025 696 1 623 934 Urban Renewal - 399 233 Expanded Public Program Grant 1 471 000 1 529 000
264 689 176 220 076 946
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King Sabata Dalindyebo Municipality Financial Statements for the year ended 30 June 2016
Notes to the Financial Statements Figures in Rand 2016 2015
26. Government grants and subsidies (continued) Capital grants Provincial: Infrastructure Intervention 52 350 656 - Fire Station Refurbishment 1 612 880 - MIG 74 189 113 68 895 496 VAT Capital 12 152 826 16 023 363 Human Settlement 45 761 419 28 538 537 DOE Grant 18 006 237 50 784 308
204 073 131 164 241 704
468 762 307 384 318 650
Conditional and Unconditional
Included in above are the following grants and subsidies received:
Conditional grants received 202 651 584 158 344 790 Unconditional grants received Equitable Share 251 210 000 206 246 000 SETA 876 526 497 963 Expanded Public Program Grant 1 471 000 1 529 000 VAT Operational 133 793 681 555 VAT Capital 12 152 826 16 023 363 Various grants 266 578 995 979
468 762 307 384 318 650
Equitable Share
In terms of the Constitution, this grant is used to subsidise the provision of basic services to indigent community members.
All registered indigents receive a monthly subsidy and the total expenditure for the period was R 17 396 216 (2015: R 10 558 242), which is funded from the grant.
Human Settlements ISUP
Balance unspent at beginning of year 3 348 266 30 580 796 Current-year receipts 50 418 161 - Conditions met - transferred to revenue (45 761 418) (28 538 537) Interest received 279 279 545 860 Transfer from MPCC 107 430 1 923 832 Transfers out (2 207 460) (1 163 685) Interest payover (377 684) -
5 806 574 3 348 266
Conditions still to be met - remain liabilities (see note 16).
Electricity Demand Site Management
Balance unspent at beginning of year 106 429 117 351 Current-year receipts - 3 000 000 Conditions met - transferred to revenue - (3 010 922) Reallocation of funds (106 000) -
429 106 429
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Conditions still to be met - remain liabilities (see note 16).
Page 299 of 346
King Sabata Dalindyebo Municipality Financial Statements for the year ended 30 June 2016
Notes to the Financial Statements 2016 2015 Figures in Rand
26. Government grants and subsidies (continued)
Grant Admin Development 15 979 430 000 Balance unspent at beginning of year - - Current-year receipts (371) (414 021) Conditions met - transferred to revenue 15 608 15 979
Conditions still to be met - remain liabilities (see note 16).
DOHS: Community Multipurpose Centre Ngangelizwe 10 1 864 144 Balance unspent at beginning of year - 59 680 Interest - (1 923 814) Transfer to Maydene 10 10
Conditions still to be met - remain liabilities (see note 16).
Uphuhliso Lwethu 167 114 178 503 Balance unspent at beginning of year (161 834) - Conditions met - transferred to revenue - (11 389) Other 5 280 167 114
Conditions still to be met - remain liabilities (see note 16).
Provincial: MTAB Grant 514 265 514 265 Balance unspent at beginning of year - - Current-year receipts 514 265 514 265
Conditions still to be met - remain liabilities (see note 16).
Municipal Infrastructure Grant - 28 640 809 Balance unspent at beginning of year 83 665 000 63 872 000 Current-year receipts (85 329 300) (92 512 809) Conditions met - transferred to revenue 1 676 360 - Reclassification to sundry debtors 12 060 -
Conditions still to be met - remain liabilities (see note 16).
Page 300 of 346
King Sabata Dalindyebo Municipality Financial Statements for the year ended 30 June 2016
Notes to the Financial Statements Figures in Rand 2016 2015
26. Government grants and subsidies (continued)
National: Financial Management Grant
Current-year receipts 1 675 000 1 600 000 Conditions met - transferred to revenue (1 224 031) (1 600 000)
450 969 -
Conditions still to be met - remain liabilities (see note 16).
Provincial : Intervention Grant
Balance unspent at beginning of year - 31 081 Current-year receipts - - Conditions met - transferred to revenue - (31 081)
- -
Municipal Systems Improvement Grant
Balance unspent at beginning of year 105 421 192 554 Current-year receipts 930 000 934 000 Conditions met - transferred to revenue (1 047 481) (1 021 133)
(12 060) 105 421
Conditions still to be met - remain liabilities (see note 16).
Provincial: Rural planning & survey
Balance unspent at beginning of year 449 250 449 250 Current-year receipts - - Conditions met - transferred to revenue - -
449 250 449 250
Conditions still to be met - remain liabilities (see note 16).
Provincial : Light the Pilot Media
Balance unspent at beginning of year 236 947 236 947 Current-year receipts - -
236 947 236 947
Conditions still to be met - remain liabilities (see note 16).
Provincial: KSD Elections- Road Maintanance
Balance unspent at beginning of year 251 720 251 720 Current-year receipts 1 000 000 - Conditions met - transferred to revenue (253) -
1 251 467 251 720
Conditions still to be met - remain liabilities (see note 16).
Page 301 of 346
King Sabata Dalindyebo Municipality Financial Statements for the year ended 30 June 2016
Notes to the Financial Statements
Figures in Rand 2016 2015
26. Government grants and subsidies (continued)
Department of Housing and Local Government
Balance unspent at beginning of year 333 652 333 652
Current-year receipts - -
333 652 333 652
Conditions still to be met - remain liabilities (see note 16).
Library Grant
Balance unspent at beginning of year 1 060 496 1 033 995 Current-year receipts 1 714 000 1 714 000
Conditions met - transferred to revenue (2 134 210) (1 687 499)
640 286 1 060 496
Conditions still to be met - remain liabilities (see note 16).
Provincial: Urban Renewal Grant
Balance unspent at beginning of year 2 779 830 3 179 064
Conditions met - transferred to revenue - (399 234)
2 779 830 2 779 830
Conditions still to be met - remain liabilities (see note 16).
Infrastructure Skills Development
Balance unspent at beginning of year 357 422 980 548 Current-year receipts 3 200 000 3 000 000
Conditions met - transferred to revenue (3 502 737) (3 623 126)
54 685 357 422
Conditions still to be met - remain liabilities (see note 16).
Organogram Development Grant
Balance unspent at beginning of year 294 477 294 477
Conditions still to be met - remain liabilities (see note 16).
Department of Transport
Balance unspent at beginning of year 7 236 277 7 236 277
Conditions still to be met - remain liabilities (see note 16).
Provincial : Disaster Management Grant
Balance unspent at beginning of year 2 270 515 2 300 889
Conditions met - transferred to revenue (734 377) (30 374)
1 536 138 2 270 515
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Conditions still to be met - remain liabilities (see note 16).
Page 303 of 346
King Sabata Dalindyebo Municipality Financial Statements for the year ended 30 June 2016
Notes to the Financial Statements Figures in Rand 2016 2015
26. Government grants and subsidies (continued)
Provincial Fire Station Refurbishment Grant
Balance unspent at beginning of year 2 333 450 2 333 450
Conditions met - transferred to revenue (1 612 880) -
720 570 2 333 450
Conditions still to be met - remain liabilities (see note 16).
Provincial:Municipal Support Grant
Balance unspent at beginning of year 53 893 53 893
Conditions still to be met - remain liabilities (see note 16).
LED Support
Balance unspent at beginning of year 106 411 229 275 Current-year receipts - -
Conditions met - transferred to revenue (104 743) (122 864)
1 668 106 411
Conditions still to be met - remain liabilities (see note 16).
LLR Chamber of Mines
Balance unspent at beginning of year 352 882 888 252
Conditions met - transferred to revenue - (535 370)
352 882 352 882
Conditions still to be met - remain liabilities (see note 16).
National: Department of Energy - Electrification Projects
Balance unspent at beginning of year 86 430 57 977 120 Current-year receipts 22 000 000 -
Conditions met and transferred to revenue (20 527 110) (57 890 690)
1 559 320 86 430
Conditions still to be met - remain liabilities (see note 16).
Human Settlements – Graduates
Current-year receipts 842 777 -
Conditions met and transferred to revenue (714 002) -
128 775 -
Conditions still to be met - remain liabilities (see note 16).
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King Sabata Dalindyebo Municipality Financial Statements for the year ended 30 June 2016
Notes to the Financial Statements Figures in Rand 2016 2015
26. Government grants and subsidies (continued)
Changes in level of government grants
Based on the allocations set out in the Division of Revenue Act, no significant changes in the level of government grant funding are expected over the forthcoming 3 financial years.
27. Public contributions and donations
Financial Assistance 5 111 655 178 325 110 Public contributions and donations 108 910 623 -
114 022 278 178 325 110
Financial assistance received relates to payments made to Eskom on behalf of the municipality by COGTA. The municipality was having cashflow challenges and COGTA assisted by paying the amount as it was overdue.
28. Revenue
Service charges 316 131 566 266 742 897 Rental of facilities and equipment 15 193 296 15 068 459 Licences and permits 13 979 592 13 618 392 Financial Assistance 5 111 655 178 325 110 Other income 13 911 831 19 117 291 Interest received 35 341 040 29 490 272 Property rates 180 579 393 159 481 681 Government grants & subsidies 468 762 307 384 318 650 Public contributions and donations 108 910 623 - Fines, Penalties and Forfeits 1 025 516 967 496
1 158 946 819 1 067 130 248
The amount included in revenue arising from exchanges of goods or services are as follows: Service charges 316 131 566 266 742 897 Rental of facilities and equipment 15 193 296 15 068 459 Licences and permits 13 979 592 13 618 392 Other income 13 911 831 19 117 291 Interest received 35 341 040 29 490 272
394 557 325 344 037 311
The amount included in revenue arising from non-exchange transactions is as follows: Taxation revenue Property rates 180 579 393 159 481 681 Transfer revenue Government grants & subsidies 468 762 307 384 318 650 Financial Assistance 5 111 655 178 325 110 Public contributions and donations 108 910 623 - Fines, Penalties and Forfeits 1 025 516 967 496
764 389 494 723 092 937
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King Sabata Dalindyebo Municipality Financial Statements for the year ended 30 June 2016
Notes to the Financial Statements Figures in Rand 2016 2015
29. Employee related costs
Basic 193 336 262 174 412 133 Acting allowances 6 897 166 6 670 919 Overtime payments 10 505 317 12 612 162 Bonus- Annual Leave 13 726 824 11 857 626 Medical aid - company contributions 24 641 630 21 363 378 Pension and Provident Fund Contribution 26 338 993 24 194 966 UIF 1 838 559 1 737 046 WCA 1 755 543 3 346 517 Leave pay provision charge 7 221 781 14 864 997 Other short term costs - 1 441 182 Travel, motor car, accommodation, subsistence and other allowances 14 519 870 12 525 654 Long-service awards 5 353 226 4 484 541 Housing benefits and allowances 17 430 521 16 345 269 Termination benefits 5 341 508 4 970 230
328 907 200 310 826 620
Remuneration of municipal manager
Annual Remuneration 310 742 71 665 Contributions to UIF, Medical and Pension Funds 446 297 Other 4 804 2 140
315 992 74 102
Remuneration of chief finance officer - N. Ntshanga
Annual Remuneration - 503 363 Car Allowance - 157 392 Contributions to UIF, Medical and Pension Funds - 59 500 Other - 133 083
- 853 338
Remuneration of chief finance officer - E Jiholo
Annual Remuneration 1 109 210 - Acting Allowance 65 855 - Back pay 67 670 - Contributions to UIF, Medical and Pension Funds 1 785 - Other 52 869 -
1 297 389 -
Remuneration of Director: Technical Services
Annual Remuneration 1 209 334 1 154 416 Contributions to UIF, Medical and Pension Funds 1 785 1 785 Other 81 762 81 698
1 292 881 1 237 899
Remuneration of Director: Community Services
Annual Remuneration 1 185 871 1 120 977 Contributions to UIF, Medical and Pension Funds 1 785 1 785 Other 82 987 40 109
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1 270 643 1 162 871
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King Sabata Dalindyebo Municipality Financial Statements for the year ended 30 June 2016
Notes to the Financial Statements Figures in Rand 2016 2015
29. Employee related costs (continued)
Remuneration of Director: Corporate services
Annual Remuneration 1 100 652 416 849 Back pay 112 091 - Contributions to UIF, Medical and Pension Funds 1 785 892 Other 56 965 -
1 271 493 417 741
Remuneration of Director : Public Safety
Annual Remuneration 1 100 652 531 013 Backpay 112 091 - Contributions to UIF, Medical and Pension Funds 1 785 - Other 47 724 12 729
1 262 252 543 742
Remuneration of Director : Human Settlements
Annual Remuneration 1 216 816 1 159 815 Contributions to UIF, Medical and Pension Funds 1 784 1 784 Other 29 642 207 119
1 248 242 1 368 718
Remuneration of Director: Local Economic Development
Annual Remuneration 1 185 871 1 120 977 Acting Allowance 24 620 - Contributions to UIF, Medical and Pension Funds 1 785 1 785 Other 26 757 24 265
1 239 033 1 147 027
30. Remuneration of councillors
Executive Mayor 851 302 849 217 Chief Whip 658 225 591 234 Speaker 622 986 621 880 Councillors 20 554 751 18 791 602
22 687 264 20 853 933
In-kind benefits
The Executive Mayor, Speaker and Mayoral Committee Members are full-time. Each is provided with an office and secretarial support at the cost of the Council.
The Executive Mayor and the Speaker of the Council have the use of separate Council owned vehicles for official duties.
31. Depreciation and amortisation
Property, plant and equipment 165 781 327 245 599 769
32. Impairment loss
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Impairment of assets
Property, plant and equipment 326 443 11 659 395
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King Sabata Dalindyebo Municipality Financial Statements for the year ended 30 June 2016
Notes to the Financial Statements
Figures in Rand 2016 2015
33. Finance costs
Borrowings 8 899 119 11 499 477
Trade and other payables 5 282 851 4 790 425
14 181 970 16 289 902
34. Debt impairment
Impairment of debtors 62 068 327 67 237 967
35. Repairs and maintenance
Buildings 596 575 562 202
Computer equipment and software 365 887 9 501
Electrical 9 019 665 3 310 213
Fencing 53 623 326 003
Furniture and office equipment 32 217 7 118
Roads and streets 12 156 025 6 709 440
Toilets 505 16 906
Tools and equipment 61 069 98 605
Traffic 4 397 357 371 864
Vehicles, machinery and plant 2 891 170 1 986 391
29 574 093 13 398 243
36. Bulk purchases
Electricity 227 139 338 185 320 519
37. Contracted services
Collection of arrear debts 5 643 494 3 950 040 Tourism 162 739 170 175
Other 841 280 1 261 643
Agency Fees Security Services 1 994 784 2 507 355
8 642 297 7 889 213
38. Grants and Subsidies paid
Other subsidies
Other grants 933 717 970 605
Council ward committees 3 928 000 3 662 015
Municipal systems improvement grant 1 023 743 929 896
SETA 476 816 639 660
Bursaries 503 261 -
Public expense 1 569 342 991 755
Indigent Subsidy 17 390 813 10 558 243
Uphuhliso Lwethu 161 834 9 990
Expanded Public works program 1 730 614 1 231 798
Department of Local Government 796 546 34 688
Electricity demand side management - 2 641 395
Infrastructure skills development grant 2 880 466 3 719 874
Finance Management Grant 1 909 621 1 486 169
Library grant 1 874 328 458 586
Ward based budgeting 2 764 061 2 282 882
37 943 162 29 617 556
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P a g e 3 1 1 of 3 4 6
King Sabata Dalindyebo Municipality Financial Statements for the year ended 30 June 2016
Notes to the Financial Statements
Figures in Rand 2016 2015
39. General expenses
Advertising 542 663 687 229 Audit committee expenses 185 397 87 179
Auditors remuneration 8 007 208 9 447 041
Bank charges 860 931 1 016 789
Cleaning 1 001 488 949 787
Commission paid 2 378 505 2 324 300
Community development and training 1 642 036 594 089
Conferences and seminars 396 598 331 691
Consulting and professional fees 5 527 936 7 551 891
Consumables 1 893 337 2 105 776
Donations 1 170 -
Entertainment 244 803 136 127
Erven Cleaning Fees 76 219 1 372 650
Fuel and oil 6 240 511 6 884 376
Insurance 3 217 342 3 054 785
Legal Fees 13 005 907 11 120 705
Levies 6 097 257 6 185 514
Magazines, books and periodicals 2 280 12 727
Material & Stores 2 434 270 4 112 322
Motor vehicle expenses 255 596 146 289
Municipal Service Charges 3 563 580 2 192 371
Other expenses 4 572 637 5 374 026
Printing and stationery 2 515 063 2 128 515
Promotions and sponsorships 652 175 682 276
Recruitment Expenses 148 259 411 284
Rehabilitation of Tip Sites 2 797 746 1 919 710
Royalties and license fees 2 779 631 1 934 286
Solid waste management 680 968 1 168 539
Staff welfare 69 594 57 566
State Funeral Expenses - (570)
Subscriptions and Membership Fees 1 897 1 936
Subsistence & Travelling 1 989 126 2 510 608
Telephone and fax 6 622 918 6 628 835
Tourism Development 49 268 39 272
Training 3 573 925 2 664 278
Uniforms 1 439 260 1 562 127
Valuation expenses 400 658 121 435
85 868 159 87 517 761
40. Fair value adjustments
Investment property (Fair value model) 20 953 145 10 690 455
41. Auditors' remuneration
Fees 8 007 208 9 447 041
42. Operating lease
The municipality has entered into various operating lease agreements for the lease of printers and copiers.The lease periods vary between 3 and 5 years with an annual escalation of 10% on the annual rentals.
Operating Lease Obligation Payable within 12 months 294 629 308 811 Payable within 2 - 5 years 6 017 91 148
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300 646 399 959
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King Sabata Dalindyebo Municipality Financial Statements for the year ended 30 June 2016
Notes to the Financial Statements Figures in Rand 2016 2015
43. Cash generated from operations
Surplus (deficit) 172 984 934 (11 417 510) Adjustments for: Depreciation and amortisation 165 781 327 245 599 769 Gain on write-off of finance lease liability (4 669 473) - Loss on sale of assets and liabilities 4 056 484 66 829 085 Fair value adjustments (20 953 145) (10 690 455) Impairment deficit 326 443 11 659 395 Debt impairment 62 068 327 67 237 967 Movements in provisions (1 707 824) (6 520 115) Other non-cash items – Donations (108 910 624) (178 325 110) Other non-cash items 66 380 - Changes in working capital: Inventories (937 860) 3 867 336 Receivables from exchange transactions (3 290 593) 14 210 846 Movement in provision for debt impairment (62 068 327) (67 237 967) Receivables from non-exchange transactions (5 449 763) 8 975 939 Payables from exchange transactions 32 215 230 34 540 913 VAT (21 196 143) (26 085 652) Unspent conditional grants and receipts 1 962 116 (89 226 367) Consumer deposits 2 962 040 1 413 965
213 239 529 64 832 039
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King Sabata Dalindyebo Municipality Financial Statements for the year ended 30 June 2016
Notes to the Financial Statements Figures in Rand 2016 2015
44. Budget differences
Material differences between budget and actual amounts
Only variances exceeding 10% or R1 mllion are considered material and have been explained below.
Other income This is due to the reversal of the provisions for landfill sites and long service awards and the overcollection of other income items.
Grants and subsidies The underspending of R116 million is as a result of unfunded commitments by Human Settlements and old grants that could not be spent due to litigation on the projects funded.
Financial assistance An amount of R5 million was received from National Treasury that was not budgeted for.
Public contributions and donations An amount of R108.9 million was received that consists of buildings that were donated by Public Works and roads that were constructed by SANRAL, OR Tambo and BT Ngebs.
Depreciation A large number of redundant assets and fully depreciated assets were disposed of.
Impairment loss The majority of roads were newly constructed in 2015 and no disasters occurred during the year under review that would have affected their condition.
Lease rentals on operating lease This is due to disputed leases that were put on hold.
Repairs and maintenance Due to cashflow challenges that the municipality is facing repairs and maintenance could only be carried out when the funds were available.
General expenses This is due to financial constraints.
45. Commitments
Authorised capital expenditure
Already contracted for but not provided for
Property, plant and equipment 141 130 627 119 120 405
Total capital commitments
Already contracted for but not provided for 141 130 627 119 120 405
This committed expenditure relates to property and will be financed by available bank facilities, retained surpluses, existing cash resources, funds internally generated, etc.
46. Contingencies
At year end the municipality had the following contingent assets and contingent liabilities.
Pending litigations and claims
Disclose: any contingent liabilities that the venturer has incurred in relation to its interest in joint ventures and its share in Page 315 of 346
each of the contingent liabilities that have been incurred jointly with other ventures.
Page 316 of 346
King Sabata Dalindyebo Municipality Financial Statements for the year ended 30 June 2016
Notes to the Financial Statements Figures in Rand 2016 2015
46. Contingencies (continued) its share of the contingent liabilities of the joint ventures themselves for which it is contingently liable, and those contingent liabilities that arise because the venturers is contingently liable for the liabilities of the other venturers of a joint venture.
Sakhiwo Robert Dudumashe // KSD 300 000 - Claim for damages due to alleged withholding of councillors' salaries and allowances. Dormant for many years, being revived now. Dowa Vena Mgudlwa // KSD 300 000 - Claim for damages allegedly suffered due to alleged illegal witholding of councillors' salaries and allowances. Dormant for many years, being revived now. Nyusile Majokweni // KSD 300 000 - Claim for damages allegedly suffered due to alleged witholding of councillors' salaries and allowances. Dormant for many years, being revived now. Richard Ngqele // KSD 300 000 - Claim for damages allegedly suffered due to alleged illegal witholding of councillors' salaries and allowances. Dormant for many years, being revived now. Fumanekile Hintsho // KSD 300 000 - Claim for damages allegedly suffered due to alleged illegal withholding of councillors' salaries and allowances. Dormant for many years, being revived now. Masiza Dudumayo // KSD Municipality 300 000 - Claim for damages allegedly suffered due to alleged illegal withholding of councillor's salaries and allowances Ilitha Lelizwe // KSD Municipality 2 219 340 300 000 Company engaged to reconcile VAT collections and claim rebates from SARS on behalf of the municipality is claiming commission on the basis that it successfully rendered the services as agreed. Matter is still pending Max Prof // KSD Municipality 8 931 148 300 000 Claim for Commission due, owing and payable allegedly flowing from an agreement to reconcile VAT and claim what is due to KSD. The matter is still pending. Nomthunzi Simane // KSD Municipality 150 000 - Claim for damages in respect of illegal, unlawful arrest and detention and contumelia. The matter is still pending. S & F Construction Intsimi Yemfene// KSD Municipality - 384 921 Claim for payment in respect of services allegedly rendered. Pending/dormant – plaintiff appears to have lost interest, at this stage, letting the sleeping dogs lie approach being applied. Mzuvukile Jazi & 15 Others // KSD Municipality - 3 200 000 Volunteers claiming to be paid salaries alleging they were promised employment and employed. Matter still pending Babalwa Qomoyi and 9 others// KSD Municipality - 675 000 Application for an order for the release of an impounded vehicles. Matter being appealed as the judgment granted does not grant certainty and finality. Charmaine Ursula Barkley // KSD Municipality 2 310 000 - Claim for damages arising out of the electrocution of a child. Merits already conceded. Municipal legal representatives still waiting for export report from
Page 317 of 346
plaintiff's legal representative. A settlement negotiation is being explored.
Page 318 of 346
King Sabata Dalindyebo Municipality Financial Statements for the year ended 30 June 2016
Notes to the Financial Statements Figures in Rand 2016 2015
46. Contingencies (continued) Meyisi Xatula // Municipality 600 000 - Claim for unlawful arrest and detention. The matter is still pending. Buyisile Jobe // KSD Municipality 280 000 - Claim for damages arising out of alleged unlawful arrest and detention. Musa Lonwabo Kwetana // KSD Municipality 110 000 - Alleged assault by the "members of the municipality's law enforcement officers". The matter is still pending. Naledi Mgwebi // KSD Municipality 1 100 000 - Claim for damages for alleged botched midwifery procedures. The matter is still pending. Pumza Malefane // KSD Municipality 155 194 - Claim for damages allegedly caused due to blockage of storm water drain leading to damage to vehicle. The matter is still pending. Zamile Derrick Ntshoyi // KSD Municipality 295 000 - Alleged unlawful arrest, detention and loss of money. The matter is still pending. Fanekhaya Ngxola // KSD Municipality 500 000 - Claim for damages for alleged unlawful arrest, detention, deprivation of liberty and humiliation. The matter is still pending. Viwe Madyibhi // KSD Municipality 5 008 000 - Claim for damages for alleged broken ankle, pain and suffering and psychological trauma and stress due falling in an open hole. The matter is still pending. Mlimli Mzini // KSD Municipality 2 774 655 - Claim for damages and financial loss suffered due to lapsed policies as a result of alleged unfair dismissal and malicious hauling before a disciplinary hearing. The matter is still pending. Monwabisi Memela // KSD Municipality 305 000 - Alleged wrongful and malicious setting of the law in motion against the plaintiff by some fellow employees. The matter is still pending. Mabatho Eppydodia Veco // KSD Municipality 750 000 - Claim for damages for alleged failure to cover a pit resulting in the plaintiff getting injured. The matter is still pending. Zoleka Tamia Mgogoshe // KSD 550 000 - Claim for damages allegedly suffered due to falling in a dug hole allegedly left uncovered. The matter is still pending. Zondwa Lutshete // KSD 490 000 - Claim for damages for alleged unlawful, wrongful arrest and detention. Matter ripe for hearing. Waiting for a court date. Mpendulo Vava // KSD 490 000 - Claim for damages for alleged unlawful wrongful arrest and detention. Matter ripe for hearing. Waiting for a court date. Welekazi Sokuthu // KSD Municipality 185 000 - Claim for alleged unlawful arrest and detention. The matter is still pending. Thobile Ngcame // KSD Municipality & Others 754 000 - Motor vehicle accident. Insurance repudiated liability. The matter is still pending. Page 319 of 346
King Sabata Dalindyebo Municipality Financial Statements for the year ended 30 June 2016
Notes to the Financial Statements Figures in Rand 2016 2015
46. Contingencies (continued) Vuyolwethu Fihla // KSD Municipality 511 000 - Claim for damages for alleged unlawful, wrongful arrest and detention. The matter is still pending. Mcingeleni Sikade // KSD Local Municipality* 430 000 250 000 Claim for damages arising out of an impounded combi which allegedly got stripped at the municipal pound. The matter is still pending. Lwandiso Menze & Others // KSD Municipality* 2 000 000 - Alleged unlawful arrest and detention. The matter is still pending. KSD Municipality & Others // Erf 778 (UMT) Prop. CC 50 000 - Interdict interdicting the respondent from executing a writ of execution. The determination of the costs is still pending. Thumekile Phalamahashe 10 000 000 - Claim for damages arising out of an incident of electrocution. The matter is still pending. The insurance matter accepted and defended at the instance of the insurance. The claimed amount exceeds the amount of the cover. R12 million claimed, maximum cover R2 million. Nomawabo Lubanga // KSD 200 000 - Claim for acting allowance. The matter is still pending. Wandile Macingwana // KSD 360 000 - Claim for damages resulting from alleged illegal stripping of an impounded kombi. The matter is being defended. Sibongile Ratshalala // KSD Municipality and Chief Traffic Officer, KSD 409 000 - Claim for loss of income. The matter is still pending. Amanda Bekezulu // KSD Municipality 130 000 - Claim for alleged unlawful arrest and detention. The matter is still pending and being defended. Mzikayifani Gumede // KSD 250 000 - Claim for damages in respect of alleged assault by a municipal traffic officer. Defended and still pending. Jabu BV Njomane // KSD 2 664 309 - Claim for monies due as result of an agreement allegedly reached among the parties. Defended and still pending. Sibonelelo Mavume // KSD Municipality 270 000 - Claim for damages arising out of alleged illegal impounding of vehicle. The matter is being defended. KSD // Taylor & Taylor & Others 150 000 - Judgement against the municipality rescinded and set aside, municipality granted leave to defend the case. The matter is still pending. Claims relating to employment disputes - 2 654 968 Various claims from employees relating to amounts due, unlawful dismissal. Matters still pending M Nondlwana // KSD 2 300 000 - Claim for damages arising out of alleged shooting incident by municipal law enforcement or traffice polic. The matter is still pending.
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King Sabata Dalindyebo Municipality Financial Statements for the year ended 30 June 2016
Notes to the Financial Statements Figures in Rand 2016 2015
46. Contingencies (continued) KSD Municipality // Unknown Persons - illegal occupants of erven 300 000 - Eviction proceedings. The matter is still pending. Patrick Mpaka & 3 Others 300 000 - Application for declaratory order. The matter is still pending. A Ndlambe & 28 Others // KSD Municipality 400 000 - Claim for alleged illegal damage to structures. The matter is still pending. Monwabisi Gabada & Others // KSD 150 000 - Claim for overtime. The matter is still pending. Lehlohonolo Mokoena & 13 others// KSD & Another** 12 700 000 - Claim for damages for alleged unlawful,wrongful arrest and detention. Musa Hickson Gqwaru // KSD 75 483 - MVA Claim repudiated by the insurance. Big Blue Marketing CC // KSD* 1 600 000 - Claim for specific performance. The matter is still pending African Bulk Earthworks (Pty) Ltd // KSD** 5 124 846 30 000 000 Claim for compound interest allegedly ommitted / neglected during the initial stages. The matter is still pending. Adrian Howard Bell / Mfihlo& Others 250 000 - Interdicting the municipality from disconnecting electricity. The matter is still pending. Siyabonga Abednigo Fikizolo // KSD Municipality 400 000 - Claim for damages arising out of the alleged unlawful arrest and detention. The matter is still pending. Jabulani Petros Mdlalose // KSD municipality 400 000 - Claim for alleged unlawful arrest and detention. The matter is still pending. KSD Municipality // Erf 778 (UMT) Property cc and others 250 000 - To recover monies illegally attached. The matter is still pending. Various claims for damages against the municipality - 16 881 794 Various claims instituted against the municipality. Most cases still pending and some pending settlement negotiations Sikhumbuzo Mange // KSD Municipality* 257 028 - P a g e 3 2 1 of 3 4 6
Claim for underpayment. The matter is still pending. KSD municipality// Unknown Persons unlawfully occupying ERF 937, 926, 14817 & - 500 000 14818 Eviction of land invaders. Demolition carried out. Matter is now subject of appeal before the Constitutional Court. Big Blue Marketing t/a Ikwezi Computers // KSD* 576 117 - Damages for alleged breach of contract. The matter is still pending. Cape Gannet Properties 118 (Pty) Ltd // KSD** 265 472 026 - Breach of contract. Pending mediation date. Proud Heritage Properties (Pty) Ltd // KSD** 163 476 883 - Breach of contract. Pending mediation date.
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King Sabata Dalindyebo Municipality Financial Statements for the year ended 30 June 2016
Notes to the Financial Statements Figures in Rand 2016 2015
46. Contingencies (continued) KSD Municipality // Illegal Occupants, remainder of ERF 912* 200 000 - Eviction proceedings. The matter is still pending. KSD Municipality // Makhubu Consortium 150 000 - Eviction proceedings. Court papers are being prepared. Adrian Howard Bell // KSD 150 000 - Interdict and contempt. The matter is still pending. KSD / Qotoyi 50 000 - Return of a motor vehicle allegedly unlawfully disposessed. The matter is still pending. KSD Municipality // Lwandile Nyebevu 280 000 - Application for reinstatement after employee dismissed and for a higher post. The matter is still pending. Jerome Frank Heunis & Others // KSD Municipality** 6 300 000 - Claim for damages allegedly suffered. The matter is still pending. Sibonele Mavume // KSD 179 000 - Claim for loss of income. The matter is still pending.
508 523 029 55 146 683
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King Sabata Dalindyebo Municipality Financial Statements for the year ended 30 June 2016
Notes to the Financial Statements
Figures in Rand 2016 2015
47. Related parties
The following transactions with related parties occurred in the period under review.
Related party transactions Cllr M H Mtirara- Crossbar Agencies - 558 459 Cllr Z V Maqabuka - Vivile Publishers and Booksellers - 2 882 Cllr K K Mdikane - Rhweba Trading - 975 Cllr K K Mdikane - Rhweba Trading 1131 CC - 198 000
- 760 316
Relationships Mayor Cllr N Ngqongwa
Speaker Cllr D M Zozo
Chief Whip Cllr Z M Gusana
Executive council members Cllr L N Ntlonze Cllr M S Mlandu Cllr F R S Ngcobo Cllr M T Mtirara Cllr L R Madyibi Cllr N R Gcingca Cllr N A Ndlela
Key management M Zenzile (Municipal manager) E Jiholo (CFO) Z H Ngovela (Director:Technical services) L P Maka (Director:Community services) A Mdleleni (Director:Corporate services) F Gaba (Director:Public safety) N N Soldati (Director:Human settlements) R B Mnqokoyi (Director:LED)
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King Sabata Dalindyebo Municipality Financial Statements for the year ended 30 June 2016
Notes to the Financial Statements Figures in Rand 2016 2015
47. Related parties (continued) Councillors Cllr A Z Luyenge Cllr K K Mdikane Cllr N Nyangani Cllr B Mazini Cllr B Momoza Cllr B Ndlobongela Cllr B D Bara Cllr E M Fileyo Cllr T E Mapekula Cllr F M Mtwa Cllr G N Nelani Cllr H N Maroloma Cllr J Dlamini Cllr K N Kwetana Cllr K W Tsipa Cllr L A Tshiseka Cllr L L Mkhonto Cllr L M Luwaca Cllr M Bunzana Cllr M Gogo Cllr M Jafta Cllr M Mavukwana Cllr M Menzelwa Cllr M Ngabayena Cllr M Nyoka Cllr M Plam Cllr M A Zimela Cllr M H Mtirara Cllr M I Xentsa Cllr J Msakeni Cllr N Mpemnyama Cllr N Mtwa Cllr N Pali Cllr N Qwase Cllr Z N Mncunza Cllr V Dangala Cllr N F Mzimane Cllr W V Sanda Cllr R Knock Cllr P P Nontshiza Cllr Z Magazi Cllr Z V Maqabuka Cllr F Dondashe Cllr S Nyengane Cllr N Sikonkotela Cllr S Mlamli Cllr N S Kwaza Cllr M Mtirara Cllr S Njemla Cllr T Nqadolo Cllr X Matiti Cllr V O Gwadiso Cllr T Nomvete Cllr V Roji Cllr S Budu Cllr N M Luqhide Cllr V N Xhobani Cllr S S N Meyi Cllr Z P Mzamane Page 325 of 346
King Sabata Dalindyebo Municipality Financial Statements for the year ended 30 June 2016
Notes to the Financial Statements Figures in Rand 2016 2015
47. Related parties (continued)
Related party transactions are at arms length.
Key management remuneration is disclosed in Note 29.
Councilor remuneration is disclosed in Note 30.
Apart from the remuneration and transaction disclosed above no further transactions occurred with councillors and key management.
48. Prior period errors
The financial statements have been prepared in accordance with GRAP on a basis consistent with the prior year. Where adjustments were done in the current annual financial statements, management considered the impact on the opening balances of the earliest comparative figures and these were adjusted accordingly.
The aggregate effect of the prior period adjustment on the comparative figures in the financial statements for the year ended 30 June 2016 is as follows.
The correction of the error(s) results in adjustments as follows:
Statement of Financial Performance As previously Prior Period Reclassificatio Restated as at
reported Error n 30 June 2015 Revenue from exchange transactions
Interest received 29 498 968 (8 696) - 29 490 272
Service charges 266 761 628 (18 731) - 266 742 897
Rental of facilities and equipment 15 055 253 13 206 - 15 068 459
Other income 19 123 860 (6 569) - 19 117 291
Revenue from non-exchange transactions
Property rates 166 333 200 (6 851 519) - 159 481 681
Government grants and subsidies 387 260 202 (2 941 552) - 384 318 650
Expenditure
Debt impairment (25 637 571) (41 600 396) - (67 237 967)
Depreciation (287 473 581) 41 873 812 - (245 599 769)
Impairment loss (7 146 805) (4 512 590) - (11 659 395)
Lease rentals on operating lease (26 196 021) (2 229) - (26 198 250)
Repairs and maintenance (13 368 857) (29 386) - (13 398 243)
Grants and subsidies paid (29 614 009) (3 547) - (29 617 556)
General expenses (85 823 496) (1 694 265) - (87 517 761)
Loss on disposal of assets (52 728 750) (14 100 335) - (66 829 085)
356 044 021 (29 882 797) - 326 161 224
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King Sabata Dalindyebo Municipality Financial Statements for the year ended 30 June 2016
Notes to the Financial Statements
Figures in Rand 2016 2015
48. Prior period errors (continued)
Statement of Financial Position As Previously Prior Period Reclassificatio Restated as at
Reported Error n 30 June 2015 Current Assets
Cash and cash equivalents 40 262 440 (75 686) - 40 186 754
Receivables from exchange transactions 39 425 878 (11 684 620) - 27 741 258
Receivables from non-exchange transactions 49 267 995 (36 789 820) - 12 478 175
Inventories 8 814 153 (2 095 487) - 6 718 666
Non-current assets
Property, plant and equipment 2 211 504 023 (38 373 997) - 2 173 130 026 Current liabilities
Finance lease obligations (10 058 923) (645 843) - (10 704 766)
Payables from exchange transactions (226 112 915) 1 623 919 - (224 488 996)
VAT payable (7 091 491) (1 396 149) - (8 487 640)
Non current liabilities
Finance Lease Obligations (5 555 374) 645 843 - (4 909 531)
Net Assets
Accumulated surplus (1 799 779 110) 88 791 840 - (1 710 987 270)
300 676 676 - - 300 676 676
Notes to the annual financial statements As previously Prior period Reclassificati Restated as at
reported error on 30 June 2015
Commitments
Already committed but not yet provided for
Property, plant and equipment 115 925 632 3 194 773 - 119 120 405
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King Sabata Dalindyebo Municipality Financial Statements for the year ended 30 June 2016
Notes to the Financial Statements Figures in Rand 2016 2015
48. Prior period errors (continued)
Interest received Long outstanding items were cleared from the bank reconciliations
Service charges Due to corrections of tariffs charged for the year ended 30 June 2015.
Rental of facilities and equipment Correction of accrual for rental income.
Other income Due to corrections of tariffs charged for fire brigade fees for the year ended 30 June 2015.
Property rates Due to corrections of tariffs charged for property rates for the year ended 30 June 2015.
Government grants and subsidies Due to the correction of VAT on financial assistance that was incorrectly allocated to grants and subsidies.
Debt impairment The impairment calculation for 2015 was found to be incorrect and was reperformed.
Finance costs A journal incorrectly discounting the value of a loan from LGCTA in 2014 was reversed.
Depreciation and amortisation In 2014 depreciation was calculated on Community assets that were not initially capitalised. In 2015 a depreciation error of R44 million was corrected. Depreciation on WIP capitalised for projects completed prior to 30 June 2015 of R4 million.
Impairment loss Infrastructure assets of R4 million were impaired after valuation by a technical expert.
Lease rentals on operating lease Due to store issues that were not finalised in the general ledger.
Repairs and maintenance Due to store issues that were not finalised in the general ledger.
Grants and subsidies paid Due to store issues that were not finalised in the general ledger.
General expenses Due to store issues that were not finalised in the general ledger.
Loss on disposal of non-current assets Work in progress of R59 346 975 that could not be linked to any active projects was written off.
Fair value adjustments Investment property was valued by an independent valuer and found to be undervalued by R20 million.
Cash and cash equivalents Long outstanding items were cleared from the bank reconciliations
Receivables from exchange transactions The impairment calculation for 2015 was found to be incorrect and was reperformed.
Receivables from non-exchange transactions The impairment calculation for 2015 was found to be incorrect and was reperformed. Page 329 of 346
King Sabata Dalindyebo Municipality Financial Statements for the year ended 30 June 2016
Notes to the Financial Statements Figures in Rand 2016 2015
48. Prior period errors (continued) Inventories Inventory decreased to the reallocation of asset items incorrectly moved to inventory.
Property, plant and equipment Work in progress of R59 346 975 that could not be linked to any active projects was written off. In 2015 roads of R6,1 million that were replaced were disposed of and a depreciation error of R44 million was corrected. Infrastructure assets of R4 million were impaired after valuation by technical expert. Depreciation on WIP capitalised for projects completed prior to 30 June 2015 of R4 million.
Finance lease obligation The split between current and non-current liabilities was found to be incorrect and was restated.
Payables from exchange transactions Retentions decreased by R1,8 million due to retentions that will not be paid, recalculation of retentions for existing projects and retentions recognised to offset payments made on projects for which retentions were not previously raised.
VAT payable VAT was adjusted for errors in the calculation of the VAT provision for debtors and creditors. R4,4 million VAT was reversed on state funeral expenses.
Other financial liabilities A journal incorrectly discounting the value of a loan from LGCTA in 2014 was reversed.
Commitments Commitments increased as - R31.4 million of projects were added that were not previously disclosed or included in the commitments register, - VAT of R13.8 million was removed from the contract values and payments, - projects of R30 million were removed which were completed before 30 June 2015 but were still sitting in the commitments register and - retentions to the value of R15.6 million that were incorrectly deducted on the commitments register was removed.
49. Unauthorised expenditure
Opening Balance 497 166 312 354 440 360 Add: Unauthorised expenditure - current year 12 776 158 142 725 952
509 942 470 497 166 312
Current year Reason Amount Bulk purchases Due to increased prices from Eskom. 5 579 848 Contracted services Due to increasing costs for collection of 272 881 arrear debt. Loss on disposal Roads that were resurfaced during the 6 923 429 year that had to be written off.
12 776 158
50. Fruitless and wasteful expenditure
Opening Balance 343 371 421 338 580 996 Add: Fruitless and wasteful expenditure-current year 5 282 851 4 790 425
348 654 272 343 371 421
Fruitless and wasteful expenditure was incurred as a result of interest and penalties charged on late payments.
The Fruitless and wasteful expenditure has been referred to the Municipal Council to be written off in accordance
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with Section 32(2)(b) of the MFMA.
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King Sabata Dalindyebo Municipality Financial Statements for the year ended 30 June 2016
Notes to the Financial Statements
Figures in Rand 2016 2015
51. Irregular expenditure
Opening balance 497 893 114 365 690 453 Add: Irregular Expenditure - current year 101 521 428 132 202 661
599 414 542 497 893 114
Analysis of expenditure awaiting condonation per age classification
Current year 101 521 428 132 202 661 Prior years 497 893 114 365 690 453
599 414 542 497 893 114
Details of irregular expenditure – current year
Reason Amount
The Tender Document and all attachments could 53 062 524 not be located thus there is no proof that a valid procurement process was followed.
The newspaper advertisement could not be 2 329 826 located therefore there is no proof that the bid was advertised.
The bid specifications committee was not 46 129 078 established at the time the procurement took place. 101 521 428
52. Additional disclosure in terms of Municipal Finance Management Act
Contributions to organised local government
Opening balance - - Current year subscription / fee 3 282 795 3 394 194 Amount paid - current year (3 282 795) (3 394 194)
- -
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King Sabata Dalindyebo Municipality Financial Statements for the year ended 30 June 2016
Notes to the Financial Statements Figures in Rand 2016 2015
52. Additional disclosure in terms of Municipal Finance Management Act (continued)
Distribution losses
During the 2016 financial year the Municipality incurred distribution losses relating to electricity of 13.14% (2015: 9.92%).
Electricity distribution losses in units Purchases 272 257 263 246 539 047 Own use (7 444 867) (5 644 800) Pre-paid consumer electricity sold (94 680 754) (93 517 815) Conventional consumer billed (134 370 945) (122 917 059)
35 760 697 24 459 373
Units purchased during the year 272 257 263 246 539 047 Units sold during the year (236 496 566) (222 079 674)
35 760 697 24 459 373 Rand per unit 1.33 1.20 Cost in rands 47 387 319 29 317 798
Audit fees
Opening balance 1 504 666 - Current year subscription / fee 9 211 943 10 372 075 Amount paid - current year (7 434 984) (8 867 409)
3 281 625 1 504 666
PAYE and UIF
Opening balance 6 462 299 2 863 274 Current year subscription / fee 47 616 748 42 616 351 Amount paid - current year (39 600 883) (39 017 326)
14 478 164 6 462 299
Pension and Medical Aid Deductions
Opening balance 10 647 079 4 195 425 Current year subscription / fee 68 849 742 73 260 847 Amount paid - current year (62 743 376) (66 809 193)
16 753 445 10 647 079
VAT
All VAT returns have been submitted by the due date throughout the year.
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King Sabata Dalindyebo Municipality Financial Statements for the year ended 30 June 2016
Notes to the Financial Statements Figures in Rand 2016 2015
52. Additional disclosure in terms of Municipal Finance Management Act (continued)
Councillors' arrear consumer accounts
The following Councillors had arrear accounts outstanding for more than 90 days at 30 June 2016:
30 June 2016 Outstanding Outstanding Total less than 90 more than 90 R days days R R Cllr Ngcobo FRS 638 15 843 16 481 Cllr Mtirara MT 3 121 12 289 15 410 Cllr Knock R 1 192 9 1 201 Cllr Luqhide LM 1 118 2 104 3 222 Cllr Mapekula E T 375 1 472 1 847 Cllr Ngqonwa N 1 716 22 1 738 Cllr Nelani N T 5 000 86 5 086
13 160 31 825 44 985
30 June 2015 Outstanding Outstanding Total less than 90 more than 90 R days days R R Cllr Ngcobo FRS 9 794 - 9 794 Cllr Mtirara MT 2 054 - 2 054 Cllr Tsipa KW 93 - 93 Cllr Knock R 5 130 - 5 130 Cllr Luqhide LM 561 - 561 Cllr Francis RS / Ngcobo LM 1 212 6 057 7 269
18 844 6 057 24 901
Supply chain management regulations
In terms of section 36 of the Municipal Supply Chain Management Regulations any deviation from the Supply Chain Management Policy needs to be approved/ dispensed by the Accounting Officer and noted by Council.
53. Supply Chain Management Regulations
The expenses incurred listed below are instances of Supply Chain Management deviations reported to the council.
Incident 3 quotations not obtained 1 223 379 86 346 Sole supplier 1 148 806 1 594 380 Emergency procurement 822 272 346 431 Advertising in local newspaper 948 998 742 588 Pauper burials-body already at parlour 125 870 87 911 Rotation system for utilisation of all shops, hence there is only one quote - 315 290
4 269 325 3 172 946
54. Bids awarded to employees in service of the state
In terms of section 45 of the Municipal SCM Regulations, any award above R2 000 to family of employees in the service of the state must be disclosed in the annula financial statements.
No conflicts of interest have been identified in the current year.
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King Sabata Dalindyebo Municipality Financial Statements for the year ended 30 June 2016
Notes to the Financial Statements Figures in Rand 2016 2015
55. Risk management
Financial risk management
The municipality’s activities expose it to a variety of financial risks: market risk (including currency risk, fair value interest rate risk, cash flow interest rate risk and price risk), credit risk and liquidity risk.
The municipality’s overall risk management program focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the municipality’s financial performance. Risk management is carried out under policies approved by the accounting officer and council. The municipality identifies, evaluates and hedges financial risks in close co-operation with the municipality's various departments. The accounting officer and council provides written principles for overall risk management, as well as written policies covering specific areas.
Liquidity risk
The municipality’s risk to liquidity is a result of the funds available to cover future commitments. The municipality manages liquidity risk through an ongoing review of future commitments and credit facilities.
Cash flow forecasts are prepared and adequate utilised borrowing facilities are monitored.
The table below analyses the municipality’s financial liabilities into relevant maturity groupings based on the remaining period at the statement of financial position to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows. Balances equal their carrying balances as the effect of discounting is not significant.
At 30 June 2016 Less than 1 Between 1 and Between 2 and Over 5 years year 2 years 5 years Payables from exchange transactions 256 704 222 - - - VAT payable 12 708 503 - - - Other financial liabilities 9 228 269 31 962 542 - - Consumer deposits 15 718 570 - - - Finance lease obligation 843 746 435 514 - -
At 30 June 2015 Less than 1 Between 1 and Between 2 and Over 5 years year 2 years 5 years Payables from exchange transactions 224 263 277 - - - VAT payable 8 487 640 - - - Other financial liabilities 9 255 764 41 757 159 - - Consumer deposits 12 756 530 - - - Finance lease obligation 10 704 766 4 909 531 - -
Liquidity risk is mainly concentrated on the Trade and other payables balance.
The municipality does not have any collateral and /or credit enhancements that aid in the mitigation of the liquidity risks.
Credit risk
Credit risk is the risk of financial loss to the municipality if customers or counterparties to financial instruments fail to meet their contractual obligations, and arises principally from the municipality’s investments, loans, receivables, and cash and cash equivalents .
The municipality limits its exposure to credit risk by investing with only reputable financial institutions that have a sound credit rating,and limits exposure to any one counter-party in accordance with Council’s approved investment policy.
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King Sabata Dalindyebo Municipality Financial Statements for the year ended 30 June 2016
Notes to the Financial Statements Figures in Rand 2016 2015
55. Risk management (continued)
Trade receivables comprise a widespread customer base. Management evaluated credit risk relating to customers on an ongoing basis and assesses the credit quality of the customer, taking into account its financial position, past experience and other factors. The Entity establishes an allowance for impairment that represents its estimate of anticipated losses in respect of receivables. Sales to retail customers are settled in cash or using major credit cards.
The municipality’s maximum exposure to credit risk is represented by the carrying value of each financial asset in the statement of financial performance.
Financial assets exposed to credit risk at year end were as follows:
Financial instrument 2016 2015 Cash and cash equivalents 12 501 813 40 186 754 Receivables from exchange transactions 31 031 851 27 741 258 Receivables from non-exchange transactions 17 927 938 12 478 175
The municipality does not hold any collateral in relation to the financial assets above.
Market risk
Market risk is the risk of changes in market prices, such as foreign exchange rates and interest rates, affecting the municipality’s income or the value of its financial instrument holdings. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return on the risk.
Interest rate risk
The municipality’s interest rate risk arises from long-term borrowings. Borrowings issued at variable rates expose the municipality to cash flow interest rate risk. Borrowings issued at fixed rates expose the municipality to fair value interest rate risk.
56. Financial instruments disclosure
Categories of financial instruments
2016
Financial assets
At fair value At amortised Total cost Trade and other receivables from exchange transactions - 31 031 851 31 031 851 Trade and other receivables from non-exchange transactions - 17 927 938 17 927 938 Cash and cash equivalents 12 501 813 - 12 501 813
12 501 813 48 959 789 61 461 602
Financial liabilities
At amortised Total cost Other financial liabilities 41 190 811 41 190 811 Trade and other payables from exchange transactions 256 704 222 256 704 222
297 895 033 297 895 033
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King Sabata Dalindyebo Municipality Financial Statements for the year ended 30 June 2016
Notes to the Financial Statements
Figures in Rand 2016 2015
. Financial instruments disclosure (continued)
2015
Financial assets
At amortised Total cost Trade and other receivables from exchange transactions 27 741 258 27 741 258 Trade and other receivables from non-exchange 12 478 175 12 478 175 transactions Cash and cash equivalents 40 186 754 40 186 754
80 406 187 80 406 187
Financial liabilities
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At amortised Total cost Other financial liabilities 51 012 923 51 012 923 Trade and other payables from exchange transactions 224 263 277 224 263 277
275 276 200 275 276 200
57. Events after the reporting date
The municipality is not aware of any events after 30 June 2016 that may have an impact on the financial statements or require disclosure,
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