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City of Cape Town
A metro municipality in Western Cape
Population: 3 740 031 Size: 2 446.4 km² Density: 1 528.8 / km²
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Contacts Last updated October 2020
Mayor/Executive Mayor 021 400 1111
Mr Daniel Plato Email municipality
021 400 1111 http://www.capetown.gov.za [email protected] Civic Centre Secretary of Mayor/Executive Mayor 12 Hertzog Boulevard Cape Town Ms Rushdia Walker 8001
021 400 9481
Municipal Manager
Mr Lungelo Mbandazayo
021 400 1167
Secretary of Municipal Manager
Ms Zakeelah Behardien
021 400 1331
Deputy Mayor/Executive Mayor
Mr Ian D Neilson
021 400 1306
Secretary of Deputy Mayor/Executive Mayor
Ms Karen Haskell
021 400 2963
Chief Financial O cer
Mr Kevin Jacoby
021 400 3265
Secretary of Financial Manager
Ms Tarryn Bell
021 400 5021
[email protected] Financial Performance
Audit Outcomes
2018-2019 2017-2018 2016-2017 2015-2016
Unquali ed - Emphasis of Unquali ed - Emphasis of Unquali ed - Emphasis of Unquali ed - No ndings Matter items Matter items Matter items
Read report Read report Read report Read report
What do di erent audit outcomes mean?
Unquali ed Opinion Unquali ed Opinion No Findings Emphasis of Matter Items Same as an Unquali ed Opinion with no ndings, but the Same as an Unquali ed Opinion with no ndings, but the Auditor-General wants to bring something particular to the Auditor-General wants to bring something particular to the attention of the reader. attention of the reader.
Quali ed Opinion Adverse Opinion
The Auditor-General expresses reservations about the fair This is expressed when the auditor concludes that the annual presentation of the nancial statements. There is some nancial statements do not present the municipality’s nancial departure from the Generally Recognised Accounting Practices position, results of operations and cash ows in line with (GRAP) but is not su ciently serious as to warrant an adverse Generally Recognised Accounting Practices (GRAP). opinion or disclaimer of opinion.
Disclaimer of Opinion
An Outstanding Opinion The Auditor-General does not have all of the underlying documentation needed to determine an opinion. For example, Means that the Auditor General raised queries with the the lack of underlying documentation and the amounts in municipality and therefore has not submitted another opinion. question may be so great so that it is impossible to give any opinion on all.
Cash Balance 2018-2019
R8 712 870 000
Cash balance at the end of the nancial year.
R8bn
About this indicator R6bn A municipality's cash balance refers to the money it has in the bank that it can access easily. If a municipality's bank account is in overdraft it has a R4bn negative cash balance. Negative cash balances are a sign of serious nancial management R2bn problems. A municipality should have enough cash on hand from month to month so that it can pay salaries, suppliers and so on. R 0 2015-2016 2016-2017 2017-2018 2018-2019
Show average for similar municipalities nationally ▶
How is performance measured?
Good Positive balance
Bad Negative balance
Show calculation
Reference:
State of Local Government Finances
Formula:
= Cash available at year end
= [Cash Flow] item code 4200, Audited Actual
Cash Coverage 2018-2019
2.9 months
Months of operating expenses can be paid for with the cash available. 2.5
About this indicator 2
Cash coverage measures the length of time, in 1.5 months, that a municipality could manage to pay for its day-to-day expenses using just its cash 1 reserves. So, if a municipality had to rely on its cash reserves to pay all short-term bills, how long 0.5 could it last? Ideally, a municipality should have at least three months' of cash cover. 0 2015-2016 2016-2017 2017-2018 2018-2019
Show average for similar municipalities nationally ▶
How is performance measured?
Good > 3 months
Average 1-3 months
Bad < 1 month
Show calculation
Reference:
State of Local Government Finances
Formula:
= Cash available at year end / Operating Expenditure per month = [Cash Flow] item code 4200, Audited Actual / ( [Income & Expenditure] item code 4600, Adjusted Budget / 12 )
Spending of Operating Budget 2018-2019
6.0% underspent
Di erence between budgeted operating 0% expenditure and what was actually spent.
-2% About this indicator
This indicator is about how much more a -4% municipalty spent on its operating expenses, than was planned and budgeted for. It is important that a municipality controls its day-to-day expenses in -6% order to avoid cash shortages. If a municipality sigi cantly overspends its operating budget this is a sign of poor operating controls or something -8% more sinister. 2015-2016 2016-2017 2017-2018 2018-2019 Overspending by up to 5 percent is usually condoned; overspending in excess of 15 percent is Show average for similar municipalities nationally a sign of high risk.
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How is performance measured?
Good 0% - 5%
Average 5% - 15%
Bad > 15%
Show calculation
Reference:
Over and under spending reports to parliament
Formula:
= ((Actual Operating Expenditure - Budget Operating Expenditure) / Budgeted Operating Expenditure) * 100
= ( ( [Income & Expenditure] item code 4600, Audited Actual - [Income & Expenditure] item code 4600, Adjusted Budget ) / [Income & Expenditure] item code 4600, Adjusted Budget ) * 100
Spending of Capital Budget 2018-2019
19.5% underspent
Di erence between budgeted capital expenditure and what was actually spent. 0% 0%
About this indicator -5%
Capital spending includes spending on -10% infrastructure projects like new water pipes or building a library. Underspending on a capital budget can lead to an under-delivery of basic -15% services. This indicator looks at the percentage by which actual spending falls short of the budget for -20% capital expenses. Persistent underspending may be due to underresourced municipalities which -25% cannot manage large projects on time. 2015-2016 2016-2017 2017-2018 2018-2019 Municipalities should aim to spend at least 95 percent of their capital budgets. Failure to spend even 85 percent is a clear warning sign. Show average for similar municipalities nationally
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How is performance measured?
Good 0% - 5%
Average 5% - 15%
Bad > 15%
Show calculation
Reference:
Over and under spending reports to parliament
Formula:
= ((Actual Capital Expenditure - Budgeted Capital Expenditure) / Budgeted Capital Expenditure) * 100
= ( ( [Capital] item code 4100, Audited Actual - [Capital] item code 4100, Adjusted Budget ) / [Capital] item code 4100, Adjusted Budget ) * 100
Spending on Capital Projects 2019-2020
About this indicator Project description Budget
The capital budget of a municipality consists of Zandvliet WWTW: Prim Treatment & Sludge R283 598 269 the capital projects that the municipality plans to do for the next three years arranged under the various functions of the municipal budget. Capital Meter Replacement Programme FY20 R270 000 000 projects can be road upgrades, water distribution, community parks etc, linked to the relevant municipal function. Cape Flats Aquifer R250 000 000
Table Mountain Group Aquifer R250 000 000 ▶ Fire Vehicles: Replacement FY20 R209 000 000 Showing 5 of 1435 See more for this municipality Spending on Repairs and Maintenance 2018-2019
8.1%
Spending on Repairs and Maintenance as a percentage of Property, Plant and Equipment. 8%
About this indicator 6%
Infrastructure must be maintained so that service delivery is not a ected. This indicator looks at how 4% much money was budgeted for repairs and maintenance, as a percentage of total xed assets (property, plant and equipment). For every R10 2% spent on building/replacing infrastructure, R0.80 should be spent every year on repairs and 0% maintenance. 2015-2016 2016-2017 2017-2018 2018-2019 This translates into a Repairs and Maintenance budget that should be 8 percent of the value of Show average for similar municipalities nationally property, plant and equipment.
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How is performance measured?
Good > 8%
Bad < 8%
Show calculation
Reference:
Circular 71
Formula:
= (Repairs and maintenance expenditure / (Property, Plant and Equipment + Investment Property)) * 100
= ( [Capital] item code 4100, Audited Actual / ( [Balance Sheet] item code 1300, Audited Actual + [Balance Sheet] item code 1401, Audited Actual ) ) * 100
Fruitless and Wasteful Expenditure 2018-2019
2.7%
Unauthorised, Irregular, Fruitless and Wasteful Expenditure as a percentage of operating expenditure.
About this indicator
Unauthorised expenditure means any spending that was not budgeted for or that is unrelated to the municpal department's function. An example is using municipal funds to pay for unbudgeted projects. Irregular expenditure is spending that
goes against the relevant legislation, municipal policies or by-laws. An example is awarding a contract that did not go through tender co ac a d d o go oug e de procedures. Fruitless and wasteful expenditure 2.5% concerns spending which was made in vain and would have been avoided had reasonable care 2% been exercised. An example of such expenditure would include paying a deposit for a venue and not using it and losing the deposit. 1.5%
1%
0.5%
0% ▶ 2015-2016 2016-2017 2017-2018 2018-2019 Show average for similar municipalities nationally
How is performance measured?
Good 0%
Bad > 0%
Show calculation
Reference:
Circular 71
Formula:
= (Unauthorised, Irregular, Fruitless and Wasteful Expenditure / Actual Operating Expenditure) * 100
= ( [unde ned] item code irregular,fruitless,unauthorised / [Income & Expenditure] item code 4600, Audited Actual ) * 100
Current Ratio 2018-2019
2.04
The value of a municipality's short-term assets as a multiple of its short-term liabilities. 2
1.5 About this indicator
The current ratio compares the value of a 1 municipality's short-term assets (cash, bank deposits, etc) compared with its short-term liabilities (creditors, loans due and so on). The 0.5 higher the ratio, the better. The normal range of the current ratio is 1.5 to 2 (the municipality has assets more than 1.5 to 2 times its current debts). 0 Anything less than that and the municipality may 2015-2016 2016-2017 2017-2018 2018-2019 struggle to keep up with its payments.
Show average for similar municipalities nationally ▶
How is performance measured?
Good > 1.5
Average 1 - 1.5 Bad < 1
Show calculation
Reference:
Circular 71
Formula:
= Current Assets / Current Liabilities
= [Balance Sheet] item code 2150, Audited Actual / [Balance Sheet] item code 1600, Audited Actual
Liquidity Ratio 2018-2019
1.22
The municipality's immediate ability to pay its current liabilities. 1.2
1 About this indicator 0.8
Liquidity ratios show the ability of a municipality to 0.6 pay its current liabilities (monies it owes immediately such as rent and salaries) as they 0.4 become due, and their long-term liabilities (such as loans) as they become current. 0.2 These ratios also show the level of cash the municipality has and / or the ability it has to turn 0 other assets into cash to pay o liabilities and 2015-2016 2016-2017 2017-2018 2018-2019 other current obligations. Show average for similar municipalities nationally ▶
How is performance measured?
Good > 1
Bad < 1
Show calculation
Reference:
Municipal Budget and Reporting Regulations
Formula:
= (Cash + Call Investment Deposits) / Current Liabilities
= [Balance Sheet] item code 1800,2200, Audited Actual / [Balance Sheet] item code 1600, Audited Actual
Current Debtors Collection Rate 2018-2019 132.8%
The percentage of new revenue (generated within the nancial year) that a municipality actually collects. 120%
100% About this indicator 80%
Municipalities don't manage to collect all of the 60% money they earn through rates and service charges. This measure looks at the percentage of 40% new revenue that a municipality collects. It is also 20% referred to as the Current Debtors Collection Ratio. 0% 2015-2016 2016-2017 2017-2018 2018-2019
Show average for similar municipalities nationally ▶
How is performance measured?
Good > 95%
Bad < 95%
Show calculation
Reference:
Municipal Budget and Reporting Regulations
Formula:
= (Collected Revenue / Billed Revenue) * 100
= ( [Cash Flow] item code 3010,3030,3040,3050,3060,3070,3100, Audited Actual / [Income & Expenditure] item code 0200,0300,0400,0500,0600,0800,0900,1000, Audited Actual ) * 100
Income
Where does the municipality get money from? Financial year: 2018-2019 Audited actual
R44 399 450 584 79.5% 20.5% R35 292 953 505 R9 106 497 079 Total income for this municipality
Learn more Locally generated Transfers
This shows how much of this municipality's income From residents paying for water & From the Equitable Share of taxes, is from its own activities that it bills for, and how electricity, rates, licenses & nes, and and Grants from national and much is paid to it by national and provincial from interest and investments. provincial Government. government.
Municipalities are supposed to be able to support themselves nancially - to fund the services they provide from the rates paid by the local residents.
A heavy reliance on outside funding is a cause for concern.
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Local income sources Financial year: 2018-2019 Audited actual
Property rates R10 762 608 821 R35 292 953 505 Service Charges R19 754 554 681
Total locally-generated income Rental income R610 564 003
Interest and investments R1 503 497 247
Learn more Fines R1 459 193 981
Licenses and Permits R58 078 299 This shows how much income this municipality receives from each local source. Agency services R230 144 449
Other R914 312 024
Legend: ▶ Amount received
Types of transfers Financial year: Not available
Data not available yet. Not available
Total transfers to this municipality
Learn more
Transfers is income that the municipality receives from other parts of government.
This shows how much income this municipality receives from each type of transfer.
Each type of transfer is intended for an express purpose, and should not be used for anything else.
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Equitable share Financial year: Not available
Data not available yet. Not available Total equitable share allocated to this municipality
Learn more
This shows how much income this municipality receives as their equitable share.
Equitable share comes from the taxes paid to national government, and is intended to ensure that no one in South Africa shall go without their basic needs being met.
Provincial and national government also receive equitable share to fund the services that are provided by those spheres of government.
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National conditional grants Financial year: 2019-2020 Allocations
Municipal Disaster Grant Not available R1 458 524 000 Energy E ciency and Deman… R11 065 000
Local Government Financial … R1 000 000 Total income from conditional grants from national departments for this municipality. Integrated City Developmen… Not available
Integrated National Electri … R45 937 000
Learn more Infrastructure Skills Develo… R11 000 000 Municipal Infrastructure Gra… Not available
Conditional grants are money paid to Municipal Systems Improve… Not available municipalities and provinces to achieve speci c outcomes. Neighbourhood Development… R3 000 000
This might be to ensure money is available for Neighbourhood Development… R42 000 000 building infrastructure, or ensuring sta at the Public Transport Network Gr… R1 311 645 000 municipality receive the training needed to perform their job. Expanded Public Works Prog… R32 877 000
This shows how much money has been allocated Urban Settlement Developm… Not available to the municipality for each grant that they are receiving, how much has been paid to the Legend: municipality so far, and how much they have spent. Allocations Amount transferred up to 2020 Q4 Amount spent up to 2020 Q4
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Provincial transfers Financial year: Not available
Data not available yet. Not available Legend:
Total transfers from provincial government to Amount budgeted this municipality.
Learn more
Provincial transfers are income from the o c a a s e s a e co e o e government of the province where this municipality is located.
This income could be for services that are provided by the municipality under an agreement with the province, when it is actually the provincial government's responsibility. This can happen when the municipality is better-placed to provide that service.
It could also be for conditional grants paid by the province for disaster relief or other purposes.
This shows how much income the municipality receives from each provincial department.
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Planned and actual income over time
How much income is planned for, and how R45.0bn much is actually received? R40.0bn R35.0bn R30.0bn Learn more R25.0bn R20.0bn Municipalities must plan for the income they can realistically receive. R15.0bn R10.0bn Unrealistic plans result in disappointing service delivery. R5.0bn R0 On the time series we can see whether the 2015-2016 2016-2017 2017-2018 2018-2019 municipality regularly over- or under-estimates how much money it will receive. Legend:
Original budget Adjusted budget Audited actual Forecast budget ▶
Where did the di erences in planned income occur? 2018-2019
Which sources provided more or less income Original Budget than planned? Fines −R49.4m -3.86% R179.0m 13.99%
Government Transfers R1.0bn 11.66% Learn more R235.0m 2.65%
By looking at where the di erences in planned Interest and investments −R6.8m -0.53% and actual income occurred, we can start seeing R221.5m 17.28% whether it was bad planning on unforeseeable Licenses and Permits R7.8m 16.92% circumstances. R12.0m 26.12%
Other −R5.4m -0.44% −R103.6m -8.3%
Property rates R20.5m 0.19% −R3.3m -0.03%
Rental income −R14.3m -2.69% ▶ R76.4m 14.3% Service Charges R296.7m 1.55% R574.7m 3%
Legend:
Original to adjusted budget Original budget to audited outcome % Change within category
Spending
Sta Wages and Salaries 2018-2019
34.1%
Sta salaries and wages as a percentage of operating expenditure. 30%
25% About this indicator 20% Employee-related costs are typically the largest portion of operating expenditure, but they should 15% not grow so large that they threaten the sustainability of the operating budget. 10%
The normal range for this indicator is between 25% 5% - 40% of total operating expenditure. Municipalities must guard against spending too 0% 2015-2016 2016-2017 2017-2018 2018-2019 much on sta while also making sure they have the people they need to deliver services e ectively. Show average for similar municipalities nationally
How is performance measured?
Good 25% - 40%
Bad < 25% or > 40%
Contractor Services 2018-2019
5.7%
Costs of contractor services as a percentage of operating expenditure. 12%
10% About this indicator 8% Private contractors are sometimes needed for certain work, but they are usually more expensive 6% than municipal sta . This should be kept to a 4% minimum and e orts should be made to provide services in-house, where possible. 2% This measure is normally between 2 percent and 5 percent of total operating expenditure. 0% 2015-2016 2016-2017 2017-2018 2018-2019
Show average for similar municipalities nationally How is performance measured?
Good 0% - 5%
Bad > 5% What is money spent on?
Municipalities spend money on providing services and maintaining facilities for their residents.
Community & Social Services
Electricity
Environmental Protection
Governance, Administration, Planning and Development Health
Housing
Other
Public Safety
Road Transport
Sport And Recreation
Waste Management 2019 Waste Water Management 2018 2017 Water 2016
Planned and actual spending over time
How much did the municipality plan on R40.0bn spending, and how much did they actually R35.0bn spend? R30.0bn
R25.0bn Learn more R20.0bn
R15.0bn Running a municipality and delivering services costs money. R10.0bn
By looking at how much money a municipality R5.0bn planned to spend, and how much they actually R0 spent, we can understand more of what happened 2015-2016 2016-2017 2017-2018 2018-2019 during the year and what challenges they might have had. Legend:
A municipality might underspend - spend less than Original budget Adjusted budget Audited actual Forecast budget planned - if they did not get as much income as they planned, or if they did not manage their work properly. There might also have been other external disruptions.
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Where did the changes to planned spending occur? 2018-2019
What did the municipality spend more on, and Original Budget where did they spend less than planned? Bulk purchases −R499.8m -5.27% −R842.5m -8.88% Contracted services R620.2m 10.14% Learn more −R4.1bn -66.23%
Employee related costs −R406.5m -3.12% By looking at which items the municipality spent more on, and which they spent less on, we can get −R585.0m -4.5% a sense of which services might have had funding Finance charges −R182.6m -16.76% challenges, or disruptions that slowed work in that −R115.1m -10.56% area. Other −R476.3m -5.03% Some kinds of spending is also more exible than R2.6bn 27.43% others - if the municipality has less money than planned and has payment that can not be adapted Remuneration of councillors R128.4k 0.08% to circumstances, the more exible spending −R16.5m -9.75% areas will have to su er. Transfers and subsidies R155.6m 59% −R92.2m -34.96%
Legend:
Original to adjusted budget Original budget to audited outcome ▶ % Change within category
Household Bills
Monthly Total for Income Levels Over Time
About this indicator
Your municipal bill is made up of property rates, basic electricity levy, electricity consumption charge, basic water levy, water consumption Affordable Range charge, sanitation, refuse removal and ‘other’. Indigent HH receiving FBS 8000 Middle Income Range The property values, water consumption and electricity consumption of a household in an income category may di er from municipality to 6000 municipality.
4000
2000
0 ▶ 2015/16 2016/17 2017/18 2019/20 2020/21 2021/22 2018/19
Monthly Bills for Middle Income Over Time
14.81%
Average increase over the nancial years
154.64 % 8000 Property rates About this indicator Refuse removal Sanitation Water: Consumption A middle income household use as base a property 6000 Electricity: Consumption value of R700 000, consumption of 1 000 kWh 8 % electricity and 30kl water. 7 % -71.75 % The bill is made up of property rates, service 4000 charges for electricity, water, sanitation and 18.45 % refuse removal and various other charges which N/A are typically small. 2000 Minimum service standards may di er between municipalities. These standards form part of the municipality’s budget which is consulted with 0 citizens in the period 1 April to 31 May each year. 2015/16 2016/17 2017/18 2019/20 2020/21 2021/22
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Monthly Bills for A ordable Income Over Time
16.22%
Average increase over the nancial years
187.52 % 5000 Property rates About this indicator Refuse removal Sanitation 4000 Water: Consumption Electricity: Consumption The statistical standard set for a ordable income 8 % 3000 7 % households is a base property value of between -71.02 % R500 000 and R700 000, consumption of 500 kWh electricity and 25kl water. 2000 17.93 % N/A A basic levy is a xed monthly charge that does not change with the amount of service consumed. 1000 Not all municipalities use basic levies.
0 2015/16 2016/17 2017/18 2019/20 2020/21 2021/22 ▶
Monthly Bills for Indigent Income Over Time
10.29%
Average increase over the nancial years
2500 16.86 % Property rates
About this indicator 143.99 % Refuse removal 2000 Sanitation Free basic service (FBS) is de ned as the minimum Water: Consumption amount of basic levels of services, provided on a Electricity: Consumption 1500 day to day basis, su cient to cover or cater for the basic needs of the poor households. 8 % 7 % -57.82 % 1000 Various sector departments have set minimum 23.79 % standards outlining basic amount of services or N/A quantity to be supplied to the indigents with regards to water, energy, sanitation and refuse 500 removal.
Only indigent households qualify for FBS and the 0 programme is solely intended to assist them. 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 2021/22 Municipalities subject all applications to means tests to determine whether households applying meet the criteria set by their municipality to qualify for indigent status.
There are di erent categories of subsidies as set out by the various indigent by-laws/policies of the municipalities. In some municipalities, households qualify for 100% subsidies while other qualify for less that 100% depending on the criteria set. The bill represented in the graph re ects what it costs the municipality to render the services to indigent households, not what each indigent household needs to pay as these costs are covered by the Equitable Share grant allocation to the municipality.
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Resources
Understanding Municipal Financial reports Further reading
Finance Read more about Local Government Finances and Resources from the South African and international Treasury's Municipal Finance website is lled learn about how your money is spent. community. with resources on municipal nance. Annual Financial Statements of municipalities Local Government in South Africa – Part 5, Circular 71 explains many of the nancial norms since 2002-2003. These include the Notes to Finances, 19 March 2014 by Corruption Watch the Annual Financial Statements where you and indicators used to gauge the nancial Engaging with Government Budgets. An can nd explanations of speci c accounting performance of Municipalities. Activist’s Guide to South African Government practises and calculations used by the Budgets at Local, Provincial and National Level MFMA Return Forms submitted by municipality in its nancial reporting and some produced in 2012 by Ndifuna Ukwazi and the Municipalities to National Treasury. decision making. Understanding these forms can help you Social Justice Coalition State of Local Government Finances reports understand the information on Municipal Infographic: South Africa: Public Participation are published every year by National Treasury Money. Mechanisms in Fiscal Matters, 01 July 2015 by and describe in detail how Municipalities are Global Initiative for Fiscal Transparency (GIFT) A Million Bags of a Million Rand - a video by the performing. Auditor General's o ce which simpli es audit Infographic: High Level Principles on Fiscal In-year Management, Monitoring and outcomes. Transparency, 04 July 2015 by Global Initiative Evaluation of Municipal Finances . Annual and for Fiscal Transparency (GIFT) Understanding the Standard Chart of Accounts quarterly PDF and Excel reports on Municipal - a video by the National Treasury on mSCOA. nances since 2007. A Guide to Conducting Social Audits in South Understanding the Public Finance Management Africa, November 2015 by International Budget Act & Municipal Finance Management Act - a Partnership (IBP) video by the National Treasury on irregular Infographic: Open Budget Survey 2015 by expenditure and material irregularity. International Budget Partnership (IBP)
Open Budget Survey 2015 by International Budget Partnership (IBP)
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