South African Local Government Association (SALGA)

CONTACTS FOR SALGA OFFICES Published by SALGA SALGA LOGO PO Box 2094 Pretoria 0001 SOUTH AFRICA 1DWLRQDO2ƯFH /LPSRSR Telephone: (012) 369 8000 { Telephone: (015) 291 1400 { Tel: +27 12 369 8000 Fax: (012) 369 8001 Fax: (015) 291 1414

Fax: +27 12 369 8001 SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION Physical Address: Postal Address: Physical Address Postal Address Menlyn Corporate Park PO Box 2094 127 Marshall Street 3ULYDWH%DJ Web: www.salga.gov.za Block B Pretoria Polokwane Polokwane 175 Corobay Avenue 0001 0699 0700 RP229/2019 Cnr Garsfontein and Corobay ISBN: 978-0-621-47533-3 Waterkloof Glen ext11 0SXPDODQJD Title of Publications: SALGA 2017/2018 Annual Report Pretoria Telephone: (013) 752 1200 { Fax: (013) 752 5595 (DVWHUQ&DSH Physical Address Postal Address South African Local Government Association (SALGA) Telephone: (043) 727 1150 { SALGA House PO Box 1693 63((&+%8%%/( % Fax: (043) 7271156/67 YDQ5HQVEXUJ6WUHHW Nelspruit Nelspruit 1200 Physical Address Postal Address @SALGA_Gov %HUHD7HUUDFH2ƯFH%OGJ P.O Box 19511 1200 First Floor Suite 3 East London A NNUAL REPO R T Berea 5214 1RUWK:HVW SALGATV East London Telephone: (018) 462 5290 { 5214 Fax: (086) 686 1845 Physical Address Postal Address salga.org.za A 625,1),1,7<6,*1 )UHH6WDWH SALGA House PO Box 1286 Telephone: (051) 447 1960 { 56 William Street Klerksdorp Fax: (051) 430 8250 Wilkoppies 2570 Physical Address Postal Address Klerksdorp 0F*UHJRU6WUHHW PO Box 14 2571 East End Bloemfontein Bloemfontein 9300 1RUWKHUQ&DSH 9300 Telephone: (053) 836 7900 {

Fax: (053) 833 3828 ANNUAL REPORT 2018/19 *DXWHQJ Physical Address Postal Address Telephone: (011) 276 1150 { Block Two PO Box 3183 Fax: (011) 276 3636/7 Montrio Corporate Park Kimberley Physical Address Postal Address Number 10. Oliver Road, 8300 3rd Floor Braampark PO Box 32161 0RQXPHQW+HLJKWV Forum 2, 33 Hoofd Street Braamfontein Kimberley Braamfontein 2017 8300 2017 :HVWHUQ&DSH Kwazulu Natal Telephone: (021) 446 9800 { Telephone: (031) 817 0000 { Fax: (021) 418 2709 7KHORJRV\PEROE\LWVGHVLJQHPERGLHVWKHFRUHYDOXHVRI 7KHVSHHFKEXEEOHVRIWKHORJR V\PERO FDUU\WKHPHVVDJH Fax: (031) 817 0034 Physical Address Postal Address the SALGA brand. of the brand. Physical Address Postal Address WKƮRRU6WUDQG6WUHHW PO Box 185 4th Floor Clifton Place, PO Box 1525 Cape Town Cape Town 7KHLQƬQLW\VLJQRUWKHn6oFKDUDFWHULVWLFRIWKHORJR V\PERO They say 19 Hurst Grove, Durban 8000 8000 VLJQLƬHVWKHRQJRLQJDQGSURJUHVVLYHFKDQJHRI6$/*$DVLW 0XVJUDYH 4000 continues on the journey of constant improvement. • We are informed Durban • We are consultative 4001 7KLVHOHPHQWRIWKHORJRV\PEROLVHV • We listen • Limitless • We advocate • Boundless r :HLQƮXHQFH • Potential • We represent • Possibility • Harmony • Balance • Unity VISION, MISSION AND VALUES SALGA MANDATE

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9,6,21 V To be an association of 9$/8(6 I municipalities that is at the Responsive S S E I FXWWLQJHGJHRITXDOLW\DQG Innovative U O 01 02 03 04 05 06 sustainable services Dynamic L N A Excellence V LOBBY, KNOWLEDGE & EMPLOYER CAPACITY SUPPORT & STRATEGIC ADVOCATE & INFORMATION BODY BUILDING ADVICE PROFILING REPRESENT SHARING

Lobby, advocate, Act as an employer Build the capacity Support and advise %XLOGWKHSURƬOH Serve as the protect and ERG\UHSUHVHQWLQJ of the municipality our members on a DQGLPDJHRIORFDO custodian of represent the all municipal as an institution, UDQJHRILVVXHVWR JRYHUQPHQWZLWKLQ ORFDOJRYHUQPHQW interest of local members and, as well as the DVVLVWWKHHƪHFWLYH South Africa, as LQWHOOLJHQFHDQG JRYHUQPHQWDW E\DJUHHPHQW leadership and execution of their well as outside the WKHNQRZOHGJH relevant structures associate members. technical capacity mandate. country. hub and centre of and platforms. of both councillors ORFDOJRYHUQPHQW DQGRƯFLDOV LQWHOOLJHQFHIRUWKH sector MISSION 0,66,21 To be consultative, informed, mandated, credible and accountable to our membership and to provide value for money

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Presentation of the SALGA Annual Report ...... 02 PART E General Information ...... 03 HUMAN CAPITAL Highlights 2018/19 ...... 04 • Managing Human Capital ...... 88 • Corporate Social Responsibility ...... 97 PART A EXECUTIVE OVERVIEW PART F • Foreword by the President ...... 08 GOVERNANCE FRAMEWORK • 2YHUYLHZE\WKH&KLHI([HFXWLYH2ƯFHU ...... 10 • Corporate Governance Overview...... 99 • Report of the Audit and Risk Committee ...... 118 PART B • Report of the Performance Management and STRATEGIC OVERVIEW Remuneration Committee ...... 122 • 6$/*$3URƬOH ...... 13 • National and International Mandates ...... 14 PART G • Membership and Stakeholders ...... 16 FINANCIAL INFORMATION • National and Provincial Structure ...... 19 • 5HYLHZE\WKH&KLHI)LQDQFLDO2ƯFHU ...... 130 • Statement of Gifts, Donations and Sponsorships PART C in Cash ...... 139 STRATEGIC PLANNING • Report on Compliance with Section 98(2)(B)(I) of the • Strategic Framework ...... 22 Labour Relations Act, 66 of 1995 ...... 140 • Annual Performance Planning ...... 23 • Report of the Auditor-General of South Africa ...... 142 • Annual Financial Statements ...... 144 PART D PERFORMANCE REPORT Abbreviations and Acronyms ...... 219 • Statement of Responsibility for Performance Municipal members of SALGA ...... 224 Information ...... 26 • Performance against Strategic Goals 2018/19 ...... 27 • Goal 1: Sustainable Inclusive Economic Growth and Spatial Transformation ...... 29 • Goal 2: Good Governance and Resilient Municipal Institutions ...... 55 • Goal 3: Financial Sustainability of Local Government and Greater Fiscal Equity ...... 69 • Strategic Enablers and administration ...... 76

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 PRESENTATION OF THE SALGA ANNUAL REPORT

On behalf of the National Executive Committee and Presidency of the South African Local Government Association (SALGA) and in terms of the SALGA Constitution and governance framework, as adopted by the National Member’s Assembly in March 2008, I am pleased to present the SALGA Annual Report for the period 1 April 2018 to 31 March 2019 to the Parliament of South Africa DQGDOO6$/*$VWDNHKROGHUVDQGRWKHULQWHUHVWHGDQGDƪHFWHGSDUWLHV

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SALGA remains committed to strengthening the transformation of local government so that, as South Africans, we can change WKHZRUOGDURXQGXVWRLPSURYHRXUOLYHOLKRRGVJURZWKHHFRQRP\DQGSDUWLFLSDWHZLWKFRQƬGHQFHLQ6RXWK$IULFDoVQHZGDZQ and the dynamic landscape of the 4th,QGXVWULDO5HYROXWLRQ

Councillor Thembi Nkadimeng SALGA President 31 July 2019

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 GENERAL INFORMATION

Registered name South African Local Government Association (SALGA)

Registration number LR/2/6/3/350

Registration date 22 May 1998

Registered address Menlyn Corporate Park, Block B, 175 Corobay Avenue, cnr Garsfontein Road, Waterkloof Glen Ext 11, Pretoria 0181

Postal address PO Box 2094, Pretoria 0001

Telephone +27 (0)12 369 8000

Fax +27 (0)12 369 8001

Email LQIR#VDOJDRUJ]D Website KWWSZZZVDOJDRUJ]D

External auditor Auditor-General of South Africa 300 Middel Street, New Muckleneuk, Pretoria 0181

Bankers ABSA

Contact person for this report Pauline Matsaung, Strategic Planning, SALGA Tel +27 (0)12 369 8000 SPDWVDXQJ#VDOJDRUJ]D

Reporting period 1 April 2018 to 31 March 2019

Reporting cycle Annually

Date of last report 2018

RP 229/2019 ISBN 978-0-621-47533-3

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 HIGHLIGHTS 2018/19

“As we let our own light shine, we unconsciously give other people permission to do the same.” - Nelson Mandela

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% Audited actual institutional performance outcome of achieving 54 out of 55 predetermined objectives in the 98 Annual Performance Plan

2017/18 South African Institute of Chartered Accountants (SAICA) Excellence in Public Finance Management Award

SALGA Governance and Intergovernmental Relations (IGR) National Working Group endorsed a municipal Consequence and Accountability Regulatory Framework in March 2019

Promoted innovation in inclusive governance and public participation through successful dialogues in KwaZulu-Natal, North-West and the Northern Cape

Developed an interventions framework for provincial municipal executive council members (MECs) to ensure DGHTXDWHDQGULJKWIXOVXSSRUWDQGUHVRXUFHVIRUPXQLFLSDOLWLHVWRIXOƬOWKHLUPDQGDWHV

Developed a Smart City Framework for the transformation and development of South African cities

Published The Journey to Transform Local Government with 11 research papers from the 2nd annual Research Colloquium, hosted with the University of the Western Cape’s Dullah Omar Institute

Facilitated leadership training for a group of mayors and local government managers at the Berkeley Institute for Leadership Development in the US

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 "The philosophy of Africanism holds out the hope of a genuine democracy beyond the stormy sea of struggle." - Robert Sobukwe

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SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 DEVELOPING AND TRANSFORMING LOCAL GOVERNMENT IN SOUTH AFRICA

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 SOUTH AFRICANLOCAL GOVERNMENT ASSOCIATION |

OVERVIEW EXECUTIVE PART change thatwe want to bereme developmental excellence.” local government service through – “SALGA to continue lobby will andadvocate of for thekind

ANNUAL REPORT 2018/19 Parks Tau,Parks former SALGA 2018 President,

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PART A EXECUTIVE OVERVIEW FOREWORD BY THE PRESIDENT

It is my honour and privilege to present this Annual Report for :H EHOLHYH ƬUPO\ WKDW 6$/*$oV SRVLWLYH LPSURYHPHQW LQ WKHƬQDQFLDO\HDURQEHKDOIRIQRWRQO\6$/*$EXWDOVR performance against strategic goals and set targets is worthy as a tribute to the current Deputy Minister of CoGTA, Parks Tau, RI UHSOLFDWLRQ DW PXQLFLSDO OHYHO ,W LV RXU VLQFHUH ZLVK WKDW ZKRVHUYHGDV6$/*$3UHVLGHQWGXULQJWKH\HDUXQGHUUHYLHZ our 257 municipalities will draw inspiration from this and demonstrate a visible commitment to performance excellence 7KLVUHSRUWUHƮHFWVLQVRPDQ\ZD\VWKHYLVLRQDU\OHDGHUVKLS LQWKH\HDUVDKHDG of honourable Tau and the contributions of the National During the reporting period, Executive Committee, as well as SALGA’s continued presence in all SALGA governance structures 3DUOLDPHQW DƯUPHG LWV UROH DV DQGLWVDGPLQLVWUDWLYHDUP a robust and respected lobbyist Undoubtedly, the local government and advocate for positive I appreciate the opportunity system in South Africa needs policy changes on behalf of its to take up the baton as SALGA revitalisation. The solution lies in a PHPEHUV 2XU FRQWULEXWLRQV President and lead a committed included submissions to the team to ever greater heights combination of institutional, political and Municipal Systems Amendment from the strong foundation laid community-focused interventions, aimed Bill and Political Party Funding E\WKRVHEHIRUHXV,WLVDUROHWKDW primarily at addressing governance %LOO ,ZLOOIXOƬOZLWKSULGHDQGSDVVLRQ challenges. SALGA’s partnerships with the $V ZH UHƮHFW RQ \HW DQRWKHU National House of Traditional \HDU RI VLJQLƬFDQW SHUIRUPDQFH ZH FRPPHQG 6$/*$oV Leaders is set to enhance the role of Traditional Leaders (TLs) leadership for its steadfast hand on the tiller that is steering in a democratic state and improve their relationships with the organisation consistently and with robust and implacable municipal councils and participation in municipal structures, GHWHUPLQDWLRQWRZDUGVWKHIXOƬOPHQWRILWVPDQGDWH LQFOXGLQJWKH6HFWLRQVDQG&RPPLWWHHV7KLVSDUWQHUVKLS will also encourage traditional leaders to participate in The compilation of this report also acknowledges the many and SALGA’s governance structures and support sustainable varied roles of our strategic partners and their contributions development through, inter alia, compiling, implementing and WRRXUDFKLHYHPHQWVGXULQJWKHƬQDQFLDO\HDU$Q\ reviewing Integrated Development Plan (IDP) processes, local celebration of our achievements is, indeed, shared with our economic development (LED) strategies and other community SDUWQHUV 3UHPLVHG RQ WKH EHOLHI WKDW ORFDO JRYHUQPHQW LV GHYHORSPHQWSURJUDPPHV everyone’s business, SALGA will continue to collaborate widely DQGHVWDEOLVKMRLQWYHQWXUHVVWUDWHJLFDOO\WRIXOƬOLWVPDQGDWH On the international front, SALGA participated in numerous DQGH[HFXWHLWVVWUDWHJ\JRLQJIRUZDUG global initiatives led by, inter alia, the United Cities and Local

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 Governments (UCLG) organisation and Commonwealth Local $VVHPEO\ (QGRUVHG E\ 6$/*$oV *RYHUQDQFH DQG ,QWHU *RYHUQPHQW)RUXP &/*) 2XUUHSUHVHQWDWLYHVDOVRDWWHQGHG Governmental Relations (IGR) National Working Group in March the United Nations (UN) High-Level Political Forum in New 2019, we believe the framework has laid a strong foundation York on Extending the Sustainable Development Goals beyond the IRUUHJXODWLRQJRLQJIRUZDUG7KLVLVHVSHFLDOO\FULWLFDOLQOLJKW United Nations to Citizens); Global Climate Action Summit in of the concerning regression in audit performance by more San Francisco; 4th UN Environment Assembly Cities Summit WKDQDWKLUGRIRXUPXQLFLSDOLWLHVRYHUWKHSDVW\HDU in Nairobi; Urban Age Conference in Addis Ababa; 4th Annual Elective Conference of the Association of Municipalities of SALGA also developed the Municipal Interventions Framework 0R]DPELTXH $1$00 LQ0DSXWRDQGWKH)HGHUDWLRQRI that will guide provincial municipal members of executive &DQDGLDQ0XQLFLSDOLWLHV )&0 %RDUGPHHWLQJLQ&DQDGD councils (MECs) to support and resource municipalities DGHTXDWHO\DQGULJKWIXOO\WRIXOƬOWKHLUPDQGDWH Continuous participation in these and other global and FRQWLQHQWDO SODWIRUPV QRW RQO\ UDLVHV 6$/*$oV SURƬOH DQG In celebrating our achievements, SALGA remains keenly aware cement its role as a world player of note in the arena of local of the many demands within a local government sector beset JRYHUQPHQWV EXW DOVR DƪRUGV XV D GHVHUYHG RSSRUWXQLW\ WR E\FKDOOHQJHVWKDWUHTXLUHXUJHQWDQGVXVWDLQDEOHVROXWLRQV continue contributing to the agenda for transforming the local The outputs of our Local Government Research Colloquium are JRYHUQPHQWVHFWRUJOREDOO\ encouraging and we believe that a focus on evidenced-based solutions will be the catalyst that will improve governance and An encouraging development locally is the interaction VHUYLFHGHOLYHU\LQRXUPXQLFLSDOLWLHV between some municipalities to share knowledge and learn EHVW SUDFWLFHV IURP RQH DQRWKHU :H ZHOFRPH WKLV LQLWLDWLYH We thank our stakeholders, partners and all SALGA employees EXECUTIVE OVERVIEW and hope that it will embed sound governance in municipalities for supporting our endeavours in a challenging, yet exciting WKURXJKRXWWKHFRXQWU\,QVXSSRUW6$/*$SLORWHGDSHHU VSDFHDQGRQHLQZKLFK6$/*$oVUROHLVFULWLFDO review mechanism in municipalities in the Eastern Cape, Gauteng, KwaZulu-Natal, Mpumalanga, Northern Cape and North-West to implement the Local Government Peer PART A 5HYLHZ0HFKDQLVP*XLGHOLQHV7KHDLPLVWRHQFRXUDJHLQWHU municipal performance peer reviews within a self-discovered or self-appropriated learning context with a focus on good JRYHUQDQFH CouncillorCouncillor ThembiThembi NkadimengNkadimeng &HUWDLQO\DƮDJVKLSSURJUDPPHGXULQJWKHSDVW\HDUZDV SALGA President the development of the Consequence and Accountability 31 July 2019 Framework for Municipalities in South Africa as part of a dedicated political discussion at the SALGA National Members’

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 OVERVIEW BY THE CHIEF EXECUTIVE OFFICER

)XOƬOOLQJ6$/*$oVPDQGDWHKDVDOZD\VEHHQWKHFODULRQFDOOIRU Our intent to continuously improve the impact we create RXUSHUIRUPDQFHDVDQRUJDQLVDWLRQ'XULQJWKHSDVW\HDURXU informed this past year’s business re-engineering process of resolve in this regard resulted in a number of commendable re-aligning our modus operandi with our 2017-2022 Strategic DFKLHYHPHQWVDVSURƬOHGLQWKLV$QQXDO5HSRUW$V&(2,DP 3ODQ 7KH IRFXV ZDV WZRIROG QDPHO\ FRUUHFWLQJ LGHQWLƬHG indeed privileged to lead and work with a dedicated team so VKRUWFRPLQJV WKDW GHWUDFWHG XV IURP GHOLYHULQJ FOHDUO\DQGUHOHQWOHVVO\FRPPLWWHGWRSHUIRUPDQFHH[FHOOHQFH KLJKSHUIRUPDQFHRXWFRPHVDVUHƮHFWHGLQWKHSUHYLRXV year’s Annual Report, and SALGA’s performance during secondly, adding further value the past year attests to this to supporting the country’s FRPPLWPHQW ,Q DGGLWLRQ WR 257 municipalities to improve achieving a clean audit for the service delivery to our 7th consecutive year, we also South Africa’s Constitution and laws FRPPXQLWLHV achieved a performance level of require accountability from councillors RURXWRIWKHWDUJHWV DQGHƪHFWLYHVHUYLFHGHOLYHU\WRDOO I believe that our well-managed set in our Annual Performance re-engineering process Plan (APP) for the 2018/19 citizens. To achieve this, we need has increased our synergy ƬQDQFLDO\HDU7KLVLVDVLJQLƬFDQW cooperation across geographical and internally to tap more gainfully increase over the previous year’s jurisdictional boundaries and the political into SALGA’s diverse range WDUJHW DQGDƬQH ZLOOWRHƪHFWPHDQLQJIXOWUDQVIRUPDWLRQ of talents to reinforce the demonstration of SALGA’s drive relevance of SALGA’s role in WRZDUGV IXOƬOOLQJ LWV PDQGDWH ORFDO JRYHUQPHQW , DP DOVR supporting municipal members and achieving its strategic FRQƬGHQW WKDW JRLQJ IRUZDUG RXU EXVLQHVV SUDFWLFHV ZLOO goals to develop and transform local government in South respond optimally to stakeholder expectations and sector $IULFD needs to help improve service delivery to those dependent on PXQLFLSDOVHUYLFHV,DSSUHFLDWHDORQJZLWKWKHPDQDJHPHQW I believe our performance over the past year, while WHDPWKHFRQWULEXWLRQRIHYHU\RQHLQYROYHGLQDQGDƪHFWHG simultaneously having implemented a business re-engineering by this process, including the men and women who led on all SURFHVVZDVHVSHFLDOO\QRWHZRUWK\7KHULVNVDQGFKDOOHQJHV IURQWVSROLWLFDOO\DQGDGPLQLVWUDWLYHO\ZLWKLQ6$/*$ associated with such a process often result in anxiety, stress DQG XQFHUWDLQW\ DPRQJ HPSOR\HHV , DP SURXG RI WKH ZD\ A continuing and serious concern, however, has been the the SALGA team rallied and also highly appreciative of the overall decline in the local government sector audit outcomes complementary political-administrative interface at SALGA UHOHDVHG E\ WKH $XGLWRU*HQHUDO IRU WKH ƬQDQFLDO WKDW FRQWULEXWHV VLJQLƬFDQWO\ WR D EXVLQHVV HQYLURQPHQW \HDU 7KH JODULQJ DQG HYLGHQW UHJUHVVLRQ LQ DFFRXQWDELOLW\ FRQGXFLYHWRSURGXFWLYHSHUIRUPDQFHDQGJRRGJRYHUQDQFH and governance among our municipalities is particularly

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 disturbing, more so when one realises this is due largely to the UHSRUWV 7KH QXPEHU RI FRQVXPHU XQLWV UHFHLYLQJ VHUYLFHV slow implementation of and disregard for recommendations from municipalities increased, especially in the provision IURPSUHYLRXVDXGLWV RI VHZHUDJH DQG VDQLWDWLRQ IROORZHG E\ VROLG ZDVWH PDQDJHPHQW DQG ZDWHU DQG HOHFWULFLW\ ERWK 6SHFLƬF DUHDV RI FRQFHUQ DUH WKH GHFOLQH LQ RYHUDOO LQWHUQDO 7KHUHSRUWVIXUWKHULQGLFDWHWKDWWKHSURYLVLRQRIZDWHU FRQWUROV EDVLFƬQDQFLDODQGSHUIRUPDQFHPDQDJHPHQW LQFUHDVHGE\ FRQWUROV LQIRUPDWLRQ DQG FRPPXQLFDWLRQV FRQWUROV DQG H[SHQGLWXUH H[FHHGLQJ UHYHQXH LQRI $FFRUGLQJWRWKHUHSRUWVPXQLFLSDOLWLHVLGHQWLƬHGPLOOLRQ PXQLFLSDOLWLHV LQGLJHQWKRXVHKROGVLQ0DQ\PLOOLRQVRIWKHVHEHQHƬWWHG from the indigent support system, including 2,6 million (75, ,QDGGLWLRQRIRXUPXQLFLSDOLWLHVDUHVWLOOQRWUHVSRQGLQJ IURP WKH VXSSO\ RI ZDWHU PLOOLRQ IURP IUHH to interventions to improve internal controls and mitigate EDVLFHOHFWULFLW\SURYLGHGE\PXQLFLSDOLWLHVPLOOLRQ ULVNV ZKLOH VWLOO GHPRQVWUDWH LQDGHTXDWH FRQVHTXHQFH IURPVHZHUDJHDQGVDQLWDWLRQDQGPLOOLRQ IURP management of transgressions and poor performance and VROLGZDVWHPDQDJHPHQW H[SHULHQFHLQVWDELOLW\GXHWRYDFDQFLHVLQNH\SRVLWLRQV DQGDSSRLQWLQJRƯFLDOVZKRODFNVNLOOVDQGFRPSHWHQFLHV I thank our leadership, stakeholders, partners, municipal members, management team and employees for their support, *LYHQWKHVHDXGLWƬQGLQJV6$/*$ZLOOLQWHQVLI\LWVDVVLVWDQFH FRRSHUDWLRQDQGEHOLHILQ6$/*$oVHQDFWPHQWRILWVPDQGDWH to municipalities in the year ahead to address the challenges, VSHFLƬFDOO\ LQ GHDOLQJ ZLWK KLVWRULFDO LPSHGLPHQWV DQG I look forward to a year of deepening our sector footprint as a . credible and respected partner in the eyes of our stakeholders GHƬFLHQFLHV EXECUTIVE OVERVIEW and a progressive driving force in transforming and developing While keenly aware of the challenges ahead, SALGA DQHZORFDOJRYHUQPHQWODQGVFDSH acknowledges the stellar performance of those municipalities WKDWSHUIRUPFRQVLVWHQWO\ZHOO:HZLOOXVHHYHU\DQGDOO PART A RSSRUWXQLWLHV LQ WKH \HDU DKHDG WR LQƮXHQFH DQG VXSSRUW our municipal members to changing South Africa’s local government landscape into one that contributes richly to the ZHOOEHLQJRIDOOSHRSOH

Despite the negative narration we have been exposed to recently, it is encouraging that some of our municipalities Xolile George have been doing reasonably well on the services delivery front, &KLHI([HFXWLYH2ƯFHU as attested to in both the Stats SA and Genera Households 31 July 2019

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 PART

STRATEGIC OVERVIEW B

I believe that here in South Africa, with all our diversities of colour and race, we will show the world a new pattern for democracy. There is a challenge for us to set a new example for all. Let us not side-step this task. - Albert Lutuli

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 SALGA PROFILE

The South African Local Government Association (SALGA) was The NEC consists of elected councillors who represent the established in 1996 as a voluntary body representing all South SROLWLFDOXQLWVRIPHPEHUPXQLFLSDOLWLHVHƪHFWVJRYHUQDQFH African municipalities, including the then nine provincial local RYHUVLJKW DQG LV UHVSRQVLEOH IRU 6$/*$oV DƪDLUV EHWZHHQ JRYHUQPHQWDVVRFLDWLRQV national conferences and members’ assemblies, as the highest and second highest decision-making structures, respectively. In January 1997, the Minister of Cooperative Governance DQG 7UDGLWLRQDO $ƪDLUV &R*7$ SUHYLRXVO\ &RQVWLWXWLRQDO STRATEGIC INTENT Development, recognised SALGA as the national organisation representing South Africa’s local government sector through VISION WKH *RYHUQPHQW 1RWLFH 5 LQ WKH *RYHUQPHQW *D]HWWH To be an association of municipalities that is at the cutting- 9RORI HGJHRITXDOLW\DQGVXVWDLQDEOHVHUYLFHV In July 2002, SALGA was listed as a Schedule 3A public entity in terms of the Public Finance Management Act (PFMA), 1 of MISSION 1999, as the accounting framework for, inter alia, revenue and To be consultative, informed, mandated, credible and H[SHQGLWXUHDVUHƮHFWHGE\WKH*RYHUQPHQW1RWLFHLQ accountable to our membership and to provide value for WKH*RYHUQPHQW*D]HWWHRI PRQH\

SALGA reports on its performance and expenditure annually VALUES AND PRINCIPLES WRWKH6RXWK$IULFDQ3DUOLDPHQW$VDPHPEHUVKLSEDVHG • Responsive %HLQJ TXLFN DQG ƮH[LEOH LQ UHVSRQGLQJ WR association, SALGA is funded through a national government member needs JUDQWOHYLHVIURPPHPEHUPXQLFLSDOLWLHVDQGSURMHFWVSHFLƬF • Innovative: Exploring new ways of doing things and funding from, inter aliaWKHLQWHUQDWLRQDOGRQRUFRPPXQLW\ providing members with fresh and unconventional services • Dynamic%HLQJƮH[LEOHDQGDGDSWLQJWRFKDQJHWRVHUYLFH SALGA’s Constitution, as amended at the 2016 National PHPEHUVHƪHFWLYHO\DQGHƯFLHQWO\ Elective Conference (NEC), frames its accountability to member • Excellence6HUYLQJPHPEHUVZLWKSULGHDQGH[FHOOHQFH municipalities through a well-articulated governance framework WKDWUHJXODWHVLWVVWUXFWXUHVDQGPDQGDWRU\SURFHVVHV STRATEGIC OVERVIEW STRATEGIC PART B

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 NATIONAL AND INTERNATIONAL MANDATES

SALGA MANDATE 7UDQVIRUPORFDOJRYHUQPHQWWRHQDEOHLWWRIXOƬOLWVGHYHORSPHQWDOPDQGDWH 01 02 03 04 05 06

LOBBY, KNOWLEDGE & EMPLOYER CAPACITY SUPPORT & STRATEGIC ADVOCATE & INFORMATION BODY BUILDING ADVICE PROFILING REPRESENT SHARING

Lobby, advocate, Act as an employer Build the capacity Support and advise %XLOGWKHSURƬOH Serve as the protect and body representing of the municipality our members on a and image of local custodian of represent the all municipal as an institution, range of issues to government within local government interest of local members and, as well as the DVVLVWWKHHƪHFWLYH South Africa, as intelligence and government at by agreement, leadership and execution of their well as outside the the knowledge relevant structures associate members. technical capacity mandate. country. hub and centre of and platforms. of both councillors local government DQGRƯFLDOV intelligence for the sector

INSPIRING SERVICE DELIVERY

SALGA has a clear strategic role of representing the interests LEGISLATIVE MANDATES of local government within the overall system of government DQG VXSSRUWLQJ LWV PHPEHUV WR IXOƬO WKHLU GHYHORSPHQWDO In addition to its intergovernmental- and membership- REOLJDWLRQV determined mandate, SALGA’s performance is guided by the following legislation: As a full partner in government, SALGA is expected to participant actively in Intergovernmental Relations (IGR), Constitution of the Republic of South Africa, 108 of provide common policy positions on related issues, voice 1996: Establishment of Organised Local Government (OLG) local government interests and provide solutions to the (section 163; sub-sections (a & b)) through national legislation FKDOOHQJHVIDFLQJORFDOJRYHUQPHQW6$/*$oVRYHUDOOPDQGDWH to represent municipalities in the intergovernmental and LVVXPPDULVHGLQWKHLQIRJUDSKLFDERYH cooperative governance system and representatively participate in the National Council of Provinces (NCoP) on SALGA members consist of 257 metropolitan, district and local PDWWHUVUHODWLQJWR6HFWLRQ F RIWKH&RQVWLWXWLRQ PXQLFLSDOLWLHVLQXUEDQDQGUXUDO6RXWK$IULFD:KLOHWKH6RXWK Subsequent legislation sets out additional OLG obligations, African Municipal Councils comprise councillors who represent which includes: SROLWLFDOSDUWLHV6$/*$LVQRQSDUWLVDQDQGDSROLWLFDO

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 Organised Local Government Act (OLGA), 52 of 1997: Medium-Term Strategic Framework (MTSF) 2014-2019: Recognises SALGA as an OLG representative, eligible for Back-to-Basics (B2B) Campaign for Local Government: nomination to the NCoP and Financial and Fiscal Commission First phase of NDP implementation, while the B2B pillars of (FFC) and consultation with the national and provincial spheres %DWKR 3HOH SHRSOH ƬUVW DQG FRPPXQLW\ HQJDJHPHQW EDVLF RIJRYHUQPHQW VHUYLFH GHOLYHU\ JRYHUQDQFH ƬQDQFLDO PDQDJHPHQW DQG accounting and capacity building and resilient institutions Municipal Systems Act (MSA), 32 of 2000 (as amended 2003, GULYHWKHPHGLXPWHUPDFWLRQSODQIRUORFDOJRYHUQPHQW7KH 2006 and 2011), requires: %%SURJUDPPHLVJLYHQHƪHFWWKURXJKWKHWHQSRLQWSODQ • Municipalities to comply with collective municipal RXWOLQHGLQWKHƬQDQFLDO\HDU Bargaining Council and OLG-mandated agreements and comply with negotiated OLG terms of agreement with Integrated Urban Development Framework (IUDF): trade unions 'HSDUWPHQWRI&RRSHUDWLYH*RYHUQDQFHDQG7UDGLWLRQDO$ƪDLUV • OLG to: (CoGTA) coordinates initiatives to manage urbanisation and - develop a common approach for local government achieve economic development, job creation and improved (LG) as a distinct sphere of government OLYLQJFRQGLWLRQV - enhance cooperation, mutual assistance and resources-sharing among municipalities - provide solutions to local government challenges Africa’s youth represent more than a quarter of - facilitate cooperative government and the world’s under-25s, giving the continent an intergovernmental relations unparalleled and invidious resource to achieve the - UHVSRQGWRRWKHUFRQVXOWDWLYHUHTXLUHPHQWV structural transformation envisioned in Africa’s Intergovernmental Fiscal Relations Act (IGFRA), 97 of 1997: Vision 2063, adopted by the African Union in Critical tool in intergovernmental relations, planning and 2015. coordination of LG budget cycle (where SALGA participates in the Local Government Budget Forum) and recognises SALGA Africa Agenda 2063 – The Africa we want: Advocates as the sole voice of local government, protector of municipal structural transformation and economic independence for interests and driver of participation the intergovernmental Africa through agro-based industrialisation, innovation, new sector. technologies and partnerships to provide food security, jobs SALGA is also cognisant of other legislative directives in DQGFXOWXUDOUHRULHQWDWLRQDQGUHMXYHQDWLRQ IXOƬOOLQJLWVPDQGDWHinter alia, the: • Financial and Fiscal Commission Act (FFCA), 99 of 1997 Sustainable Development Goals (SDGs) Vision 2030: Require • Water Services Act (WSA), 108 of 1997 local governments to be inclusive, economically productive, • Municipal Structures Act (MSA), 117 of 1998 environmentally sustainable and resilient to climate change • Municipal Demarcation Act (MDA), 27 of 1998 and related risks through, inter alia, the use of renewable • Municipal Property Rates Act (MPRA), 6 of 2004 energy and sustainable provision of water and sanitation for • Municipal Fiscal Powers and Functions Act (MFPFA), 12 of DOO6$/*$UHJDUGV*RDODVSHUWLQHQWWRWKH2/*VHFWRUDQG 2007 its commitment to addressing South Africa’s development • Municipal Finance Management Act (MFMA), 56 of 2003 FKDOOHQJHV • National Health Act (NHA), 61 of 2003

• Public Finance Management Act (PFMA), 1 of 1999 • Disaster Management Act (DMA), 53 of 2005 SDG Goal 11: Make cities inclusive, safe, resilient • 5RDG7UDƯF0DQDJHPHQW&RUSRUDWLRQ$FW 570&$ RI and sustainable to create a future in which cities 2007 provide opportunities for all, with access to basic OVERVIEW STRATEGIC • 7KH:KLWH3DSHURQ/RFDO*RYHUQPHQW services, energy, housing, transportation and OTHER FACTORS THAT more. INFLUENCE SALGA’S MANDATE PART B Habitat III: A New Urban Agenda that UHƮHFWV SROLWLFDO commitment to developing sustainable rural and urban towns, SALGA’s activities are also aligned with major national and FLWLHVDQGKXPDQVHWWOHPHQWV international development goals, inter alia:

The National Development Plan (NDP), Vision 2030: Aims Paris Accord on Climate Change: 7KLVDFFRUGFDOOVIRU]HUR WRHOLPLQDWHSRYHUW\DQGUHGXFHLQHTXDOLW\E\6$/*$oV net anthropogenic greenhouse gas emissions by the second strategic priorities are aligned with the critical success factors half of the 21st century and commits signatories to limiting the of the NDP, namely sustainable leadership, institutional WHPSHUDWXUHLQFUHDVHWR&ZKLFKUHTXLUHV]HURHPLVVLRQV UHIRUP UHVRXUFH PRELOLVDWLRQ DQG WUDGHRƪV DQG FODULW\ RI between 2030 and 2050 and replacing fossil fuels almost UHVSRQVLELOLW\LQHDFKDUHD HQWLUHO\ZLWKFOHDQHQHUJ\LQWKHVHFRQGKDOIRIWKLVFHQWXU\ 15

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 MEMBERS AND STAKEHOLDERS

SALGA is a single, unitary membership-based association for all metropolitan, district and local South African municipalities. Since the business of local government is everyone’s business, SALGA SDUWQHUVDQGFROODERUDWHVZLWKVLJQLƬFDQWRWKHUVLQDQGIRUEXVLQHVVDVVLJQPHQWV

Limpopo 27

20 11 Mpumalanga 22 Gauteng North West

Free State 23 KwaZulu-Natal Northern Cape 54 31

Eastern Cape 39

Western Cape 30

South African’s nine provinces

SALGA MEMBERS challenges to those in sophisticated urban areas with (MUNICIPALITIES) VLJQLƬFDQWLQVWLWXWLRQDOFDSDFLW\

According to the Municipal Structures Act, 117 of 1998, Since its legal establishment in 1996, SALGA’s activities have PXQLFLSDOLWLHVDUHFODVVLƬHGXQGHUPHWURSROLWDQ &DWHJRU\$ EHHQGLUHFWHGDWIXOƬOOLQJLWVPDQGDWHRIVXSSRUWLQJWKH ORFDO &DWHJRU\ % RU GLVWULFW &DWHJRU\ & DFFRUGLQJ WR VL]H transformation of local government in a complex environment, ƬQDQFLDOYLDELOLW\WHFKQLFDOVNLOOVTXDOLW\RIVHUYLFHVSURYLGHG characterised by a highly diverse membership base dispersed challenges confronted on a daily basis, responsiveness to WKURXJKRXW6RXWK$IULFDoVQLQHSURYLQFHV community needs, political and administrative stability and JRYHUQDQFH SALGA’s membership consists of 257 municipalities that, collectively, constitute an independent, interdependent and It is incumbent upon SALGA, through the implementation LQWHUUHODWHGVSKHUHRIJRYHUQPHQW of its 2017-2022 Strategic Plan, to respond to the extensive UDQJHRIPXQLFLSDOQHHGV7KHOHYLHVUHFHLYHGIURPPXQLFLSDO They range from municipalities in deep rural areas that PHPEHUVHQDEOHV6$/*$WRIXOƬOLWVPXOWLIDFHWHGPDQGDWHRQ grapple with severe service delivery backlogs and institutional WKHLUEHKDOI

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 SALGA STAKEHOLDERS

P t ro n Donar agencies Private sector v e in m c i rn a e l v G o Research o g Public sector v l institutions e a r c n o m L e n t

Other international Media partners

Employees Member municipalities

International municipal Civil society associations

Professional State-owned bodies entities

N t ational Governmen

Figure 1: SALGA stakeholders.

C: Municipalities A: Key government departments E: Partners (local & international) B: Parliament G: Employees F: SOEs

Importance L: Donors H: Media K: Public & private sectors N: Political Parties I: Professional bodies D: Civil society J: International municipal association M: Research institutions

,QƮXHQFH OVERVIEW STRATEGIC

Figure 2: SALGA key stakeholder map . PART B (ƪHFWLYHDQGHƯFLHQWVWDNHKROGHUPDQDJHPHQWLVFRUHWR6$/*$oVEXVLQHVVLPSHUDWLYHRISURPRWLQJDQGSURWHFWLQJWKHLQWHUHVWV RIORFDOJRYHUQPHQWDQGEROVWHULQJLWVUHVRXUFHFDSDFLW\6$/*$LVNHHQO\DZDUHRIWKHLPSRUWDQFHDQGLQƮXHQFHRIVWDNHKROGHUV LQPHHWLQJPHPEHUQHHGVDQGDFKLHYLQJLWVVWUDWHJLFJRDOVDVGHSLFWHGLQ)LJXUH

6$/*$oVVWDNHKROGHUHQJDJHPHQWLVDOLJQHGZLWKDEURDGHUSURFHVVRIUHSUHVHQWLQJVXSSRUWLQJDQGVHUYLFLQJPHPEHUV'XULQJ the reporting period, SALGA’s engagement with stakeholders further embedded constructive relationships that support mutually EHQHƬFLDOFRPSOHPHQWDU\DQGUHFLSURFDOEXVLQHVVRSSRUWXQLWLHVDQGFRRSHUDWLYHLQLWLDWLYHV

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 ORGANISATIONAL EVOLUTION

1996- 2000- 2007- 2012- 2017- 2000 2007 2012 2017 2022

SALGA ESTABLISHED COORDINATION OF CONSOLIDATION WELL-GOVERNED RELEVANT AND AND LG LAW DEMOCRATIC LOCAL Consolidated as a High-performing MEANINGFUL IMPACT AND POLICY GOVERNMENT (LG) unitary structure that organisation, High-performance DEVELOPMENT Start Coordinating the voice plans, operates and receiving clean audits and good governance of journey with nine of a fragmented local reports as one consistently translate into GLƪHUHQWSURYLQFLDO government meaningful impact structures and participation in LG policy and regulations

ORGANISATIONAL STRUCTURE

Legal Compliance and Risk Chief Executive 2ƯFH Corporate Secretariat Governance and Strategic Programmes Chief of Operations Performance Management Unit

Internal Audit Communications and Marketing

Governance, Municipal Municipal Economic Strategy, Finance and Provincial IGR and Community Institution Infrastructure Development Policy and Coporate 2ƯFH International Development Development and Services and Planning Research Services Relations • • • • • • • Eastern Cape International Collective Solid-waste Human Development Research Financial relations and bargaining and management development management • Policy planning and protocol labour relations • Water and • Safety and planning development control Western Cape • Inter- • Municipal sanitation security • Economic and analysis • Asset- governmental human • Electricity and • Health development • Strategy, management Northern Cape relations resources (ICT, ASGISA, and reporting energy • Social cohesion business • support IDPs, PGDS, systems Advocacy and • Transportation and city planning and North West • NSPS, EPWP) • lobbying Skills and roads diplomacy organisational Supply-chain development • Local performance management • Governance • • and capacity Climate Disaster government • • Limpopo support change and management Knowledge Human building ƬQDQFH hub and resources • Parliamentary environmental • • Special • management Mpumalanga DƪDLUVDQG Single public support Municipal entity • Administration services programmes oversight • research • Sustainable mainstreaming Monitoring and • Information and • Local • P3 country evaluation Gauteng • 5-YLGSA human (incl youth, communications coordination government settlement gender, HIV) project • Stakeholder technology transformation management relations • Free State Travel coordination and management KwaZulu-Natal 18

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 NATIONAL AND PROVINCIAL STRUCTURE

EXECUTIVE MANAGEMENT TEAM

Xolile George Nceba Mqoqi Lance Joel &KLHI([HFXWLYH2ƯFHU &KLHI)LQDQFLDO2ƯFHUDQG ([HFXWLYH0DQDJHU2ƯFHRIWKH Acting Executive Director: CEO and Acting Executive Director: Municipal Finance Governance and Intergovernmental Relations

Seana Nkhahle Jean de la Harpe Acting Executive Director: Executive Director: Municipal Economic Development and Infrastructure and Services Planning STRATEGIC OVERVIEW STRATEGIC PART B

Mirriam Lehlokoa Sonwabo Gqegqe Executive Director: Community Acting Executive Director: Development 3DUOLDPHQWDU\$ƪDLUV 19

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 PROVINCIAL EXECUTIVE OFFICERS

Gcinikhaya Mpumza Zanoxolo Futwa Lucky Leseane (Eastern Cape) (Free State) (Gauteng)

Sabelo Gwala Ledile Molope Gugu Langa (KwaZulu-Natal) (Acting Limpopo) (Mpumalanga)

Thimothy Modibedi William Moraka Khalil Mullagie (Northern Cape) (Acting North West) (Western Cape)

2020

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 PART

STRATEGIC FRAMEWORK C

“Here is a tree rooted in African soil, nourished with waters from the rivers of Africa. Come and sit under its shade and become, with us, the leaves of the same branch and the branches of the same tree.” PLANNING STRATEGIC – Robert Sobukwe PART C

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 STRATEGIC FRAMEWORK

SALGA’s strategic framework, encapsulated in its 2017-2022 Strategic Plan, reignites its support for the White Paper on Local Government that sets out to achieve a sustainable local government by 2030 through spatial transformation and economic JURZWK$SSURYHGLQWKHVWUDWHJLFIUDPHZRUNUHVWVRQFRQVXOWDWLRQVZLWKVWDNHKROGHUVDQGLQSXWVIURPPXQLFLSDOPHPEHUV DQGRWKHULQWHUHVWHGDQGDƪHFWHGSDUWLHVRQWKHNH\PXQLFLSDOFKDOOHQJHVLQWKHORFDOJRYHUQPHQWVHFWRUDVLQGLFDWHGKHUH

CAPABILITIES, GOVERNANCE AND LEADERSHIP SPATIAL TRANSFORMATION AND INCLUSION Weakening municipal governance and leadership, Spatial transformation and inclusive communities are characterised by poor oversight, limited consequence undermined by depressed economic conditions and, management, instability at senior management levels increasingly the impact of climate change, regressive social and a lack of skills, undermine service delivery and cohesion and poor coordination in planning and access to land WUDQVIRUPDWLRQLQORFDOJRYHUQPHQW and bulk services, as well as limited decentralisation in 01 housing delivery and transport and safety and VHFXULW\FKDOOHQJHV 02 04

FISCAL POLICY AND FINANCIAL MANAGEMENT 03 SERVICE DELIVERY AND INFRASTRUCTURE ,QFUHDVHLQPXQLFLSDOLWLHVLQƬQDQFLDOGLVWUHVVGXHWRLQFUHDVHG Increased coverage of basic services but under VHUYLFH FRVWV WDULƪV GHFUHDVH LQ UHYHQXH FROOHFWLRQ pressure from widening infrastructure funding gap, poor life LQHƯFLHQWVXSSO\FKDLQPDQDJHPHQWLUUHJXODUIUXLWOHVVDQG F\FOHDVVHWPDQDJHPHQWPDLQWHQDQFHDQGHƪHFWLYHSURMHFW wasteful expenditure, low revenue bases and high levels of LPSOHPHQWDWLRQDQGDODFNRIWHFKQLFDOFDSDELOLWLHV XQHPSOR\PHQWDQGSRYHUW\

Figure 3: Key interlinking challenges facing municipalities in the local government sector. SALGA STRATEGY AT A GLANCE (2017-2022)

6$/*$oV 6WUDWHJLF 3ODQ LV WKH FHQWUDO SROLF\ WKUXVW IRUWKHGHYHORSPHQWRILWV$QQXDO3HUIRUPDQFH3ODQV7KH strategic goals contained in the plan represent long-term outcomes that SALGA will champion to drive service delivery, spatial WUDQVIRUPDWLRQDQGJURZWKDQGGHYHORSPHQWLQORFDOJRYHUQPHQW

Guided, supported and directed by its strategic vision, goals, enablers and the predetermined targets of its Annual Performance 3ODQ $33 IRU6$/*$oVVWUDWHJLFIUDPHZRUNSURYLGHGWKHFRQWH[WIRULWVSHUIRUPDQFHGXULQJWKHSDVWƬQDQFLDO\HDU

7KLVIUDPHZRUNDOVRHQDEOHV6$/*$WRIXOƬOOLWVUROHVDVDGHPRFUDF\SURWHFWRUORFDOJRYHUQPHQWVHFWRUULJKWVHQIRUFHUDQG FRQVWUXFWLYHGLVUXSWHUZKHUHWKHH[LVWLQJRYHUDOOORFDOJRYHUQPHQWV\VWHPKDVWKHDELOLW\WRIXOƬOOLWVPDQGDWH

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 To support To develop and regional support the To promote To support economic implementation high quality innovative strategies To modernise RIƬQDQFLDO and reliable To strengthen revenue DQGHƪHFWLYH governance strategies for service oversight and enhancement land use systems and long-term provision and strategies management accountability processes sustainability for local infrastructure approaches for and viability government investment scale and social of local cohesion government

STRATEGIC GOAL 1 STRATEGIC GOAL 3 STRATEGIC GOAL 2 Sustainable, Inclusive Financial Sustainability Good Governance and Resilient Economic Growth and of Local Government and Municipal Institutions Spatial Transformation Fiscal Equity

To implement To strengthen To foster sound a sustainable LG’s role in Community and productive To professionalise Urban 7RVWUHQJWKHQƬQDQFLDO Development labour local government Development management systems and controls and Social relations Programme Cohesion

These goals become the basis for measuring the long-term success of local government through their associated strategic objectives. They also serve as a focal point for partners and stakeholders to lead and participate in interventions that are geared towards transforming and developing local government.

Figure 4: At a glance – SALGA 2017-2022 Strategic Plan. ANNUAL PERFORMANCE PLANNING STRATEGIC PLANNING STRATEGIC

7KH$QQXDO3HUIRUPDQFH3ODQ $33 ZDVWKHVHFRQGLQDVHULHVRIƬYHSHUIRUPDQFHSODQVZLWKNH\SHUIRUPDQFHLQGLFDWRUV .3,V WKDWGLUHFWVWKHLPSOHPHQWDWLRQRI6$/*$oVƬYH\HDU6WUDWHJLF3ODQ7KH$33SURYLGHVDQRSSRUWXQLW\DQQXDOO\ to determine the inputs, activities, outputs, outcomes, performance measures, as well as the envisaged sector impact, relevant PART C WRHDFKPRQWKSHUIRUPDQFHF\FOH

SALGA’s Executive Management Team (EMT) approved the 2018/19 APP, related programmes and Working Group priorities at its OHNJRWODLQ$XJXVW)ROORZLQJWKHOHNJRWODHPHUJLQJLVVXHVULVNPLWLJDWLRQDQGVROXWLRQVZHUHGLVFXVVHGDWJRDOGLUHFWHG SODQQLQJVHVVLRQVZLWKGLUHFWRUDWHSDUWLFLSDQWVDQGZLWKPXQLFLSDOPHPEHUVDW3URYLQFLDO0HPEHUVo$VVHPEO\ 30$ PHHWLQJV

7KH DSSURYHG $33 FRQVLVWV RI DQ RSHUDWLRQDO SODQ ZLWK TXDUWHUO\DFWLYLWLHVWRDFKLHYH6$/*$oVDQQXDOWDUJHWV0HDVXULQJ SHUIRUPDQFHDJDLQVWTXDUWHUO\WDUJHWVIRUPVWKHEDVLVIRURUJDQLVDWLRQDOSHUIRUPDQFHUHSRUWLQJ7KHRSHUDWLRQDOSODQDOVRVHUYHV as a management information tool to monitor progress and ensure that organisational performance remains on track for each $33

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 PLANNING PROCESS

SALGA adopted National Treasury’s 2010 outcomes-orientated Framework for Strategic Plans and Annual Performance Plans to GHYHORSWKH$337KHSODQQLQJSURFHVVLVGHSLFWHGLQ)LJXUH

Local government sector goals: WHAT WE AIM TO CHANGE Long-term results at sector and 7KHGHYHORSPHQWDOUHVXOWVRIDFKLHYLQJVSHFLƬFRXWFRPHV IMPACTS community levels

WHAT WE WISH TO ACHIEVE Results of SALGA interventions 7KHPHGLXPWHUPUHVXOWVIRUVSHFLƬFEHQHƬFLDULHVWKDWDUHWKH OUTCOMES FRQVHTXHQFHRIDFKLHYLQJVSHFLƬFRXWSXWV on municipalities as institutions

WHAT WE PRODUCE OR DELIVER 7KHƬQDOSURGXFWVRUJRRGVDQGVHUYLFHVSURGXFHGIRU OUTPUTS delivery

WHAT WE DO Plan, budget, The processes or actions that use a range of inputs implement ACTIVITIES to produce the desired outputs and ultimately and monitor outcomes (delivery of mandate) WHAT WE USE TO DO THE WORK The resources that contribute to the INPUTS production and delivery of outputs

Figure 5: National Treasury Framework for Strategic Plans and Annual Performance Plans. Source: National Treasury (September 2010 ).

The process to develop the 2018/19 Annual Performance Plan unfolded as dipicted below:

SALGA STRATEGY 2017-2022 Operational plans (Feb 2018) EMT Lekgotla (6 May 2017) and APP 2018/19

NEC/NOB meeting Approvals EMT Lekgotla (24-26 Aug (Final 31 Jan 2018) 2017) 1st Draft 31 Aug 2017 ANNUAL PERFORMANCE PLAN (APP) 2018/19 EMT Lekgotla Approvals Business planning sessions per (22 Jan 2018) goal (20, 21, 28 Sep 2017)

Business planning sessions per PMAs Member consultations NEC meeting Draft approval goal (28, 29, 30 Nov 2017) (Oct-Nov 2017) (14 Oct 2017) 2nd Draft (30 Nov 2017)

Figure 6: The planning process for the SALGA Annual Performance Plan for 2018/19 .

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 PART

PERFORMANCE REPORT D

We should put behind us the era of diminishing trust in public LQVWLWXWLRQVDQGZHDNHQHGFRQƬGHQFHLQOHDGHUV:HVKRXOGSXW all the negativity that has dogged our country behind us because REPORT PERFORMANCE a new dawn is upon us. - President Cyril Ramaphosa, State-of-the-Nation Address,

February 2018 PART D

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 STATEMENT OF RESPONSIBILITY FOR PERFORMANCE INFORMATION

$VWKH&KLHI([HFXWLYH2ƯFHURIWKH6RXWK$IULFDQ/RFDO*RYHUQPHQW$VVRFLDWLRQ,DPUHVSRQVLEOHIRUWKHSUHSDUDWLRQRILWV SHUIRUPDQFHLQIRUPDWLRQDQGWKHMXGJHPHQWVPDGHLQWKHLQIRUPDWLRQ

, DP DOVR UHVSRQVLEOH IRU GULYLQJ WKH LPSOHPHQWDWLRQ RI 6$/*$oV $QQXDO 3HUIRUPDQFH 3ODQV WR JLYH HƪHFW WR LWV Strategy and establishing and implementing a system of internal controls to provide reasonable assurance about the integrity DQGUHOLDELOLW\RIWKHSHUIRUPDQFHLQIRUPDWLRQ

,Q P\ RSLQLRQ WKH SHUIRUPDQFH LQIRUPDWLRQ FRQWDLQHG LQ WKLV DQQXDO UHSRUW UHƮHFWV IDLUO\ WKH DFWXDO DFKLHYHPHQWV DJDLQVW SODQQHGREMHFWLYHVLQGLFDWRUVDQGWDUJHWVIRUWKHƬQDQFLDO\HDUWKDWHQGHG0DUFK

The performance information in this report has been examined by external auditors and approved by SALGA’s accounting DXWKRULW\

Xolile George &KLHI([HFXWLYH2ƯFHU 31 July 2019

2626

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 PERFORMANCE AGAINST STRATEGIC GOALS 2018/19

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)LJXUH6$/*$oVRYHUDOOSHUIRUPDQFHIRUWKHƬQDQFLDO\HDU PERFORMANCE REPORT PERFORMANCE We will deal with important performance challenges, VXFKDVGHYHORSLQJWKHVNLOOVDQGNQRZOHGJHWRVWHSZLWKFRQƬGHQFH into a period of unparalleled technological advancement, with a relentless and irrepressible will to succeed. PART D

2727

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 97% 3% 100% 0% 100% 0% 100% 0% 100

0 GOAL 1: Sustainable GOAL 2: Good GOAL 3: Financial Enablers and Inclusive Ecconomic Governance and Sustainability of Administraion Growth and Spatial Resilent Municipal Local Government Transformation Institutions and Greater Fiscal Equity % Achieved Not achieved

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SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 GOAL 1: SUSTAINABLE INCLUSIVE ECONOMIC GROWTH AND SPATIAL TRANSFORMATION

PURPOSE KEY CHALLENGES IN SERVICE To foster integrated and sustainable urban development and DELIVERY AND INFRASTRUCTURE management and regional economic growth that includes • Widening funding gap for capital expenditure needs due to, UXUDOGHYHORSPHQWDQGVRFLDOFRKHVLRQ inter alia XQIXQGHG PDQGDWHV H[SHQGLWXUH LQHƯFLHQFLHV and inadequate transfers STRATEGIC OBJECTIVES (SO) • Underspending on capital budgets, repairs and To implement a sustainable urban development maintenance programme • 6LJQLƬFDQWHOHFWULFLW\DQGZDWHUORVVHVFRXSOHGZLWK 7RVXSSRUWUHJLRQDOHFRQRPLFVWUDWHJLHVDQGHƪHFWLYHODQG mandate overlaps between Eskom and municipalities use management approaches as drivers for economies of • Disruptions in the energy sector, including uptake of scale and social cohesion renewable energy and changing consumer demand, To promote high-quality and reliable service provision through new business models that encourage internal and infrastructure investment (capacity and renewal) in HƯFLHQF\HOHFWULFLW\WUDGLQJJULGFKDUJHVDQGDOWHUQDWLYH support of economic strategies (energy, water, sanitation, energy services 5th Utility) • Inadequate proactive climate change adaptation strategies To strengthen the role of local government in community • Poor infrastructure life cycle management from project GHYHORSPHQWDQGVRFLDOFRKHVLRQ LGHQWLƬFDWLRQWKURXJKWRRSHUDWLRQVDQGPDLQWHQDQFH

GOAL 1 PERFORMANCE NARRATIVE

SO1: IMPLEMENT A SUSTAINABLE URBAN DEVELOPMENT PROGRAMME

SPATIALLY TARGETED RURAL DENSIFICATION

7DUJHWHGUXUDOGHQVLƬFDWLRQUHIHUVWRWKHGHQVLƬFDWLRQDQGVSDWLDOUHFRQƬJXUDWLRQRIUXUDODUHDV REPORT PERFORMANCE WRDFKLHYHPRUHFRPSDFWVSDWLDOO\HƯFLHQWDQGVXVWDLQDEOHUXUDOVHWWOHPHQWVWKDWDUHVHUYLFHDEOH and economically viable.

7KH5XUDO'HQVLƬFDWLRQ3URJUDPPHLVSDUWRI6$/*$oVVSDWLDO FDSLWD FRVWV RI SURYLGLQJ VRFLDO DQG HFRQRPLF VHUYLFHV /HVV PART D transformation agenda in its 2017-2022 Strategic Plan, with a dense areas also reduce the demand threshold (community’s IRFXVSULPDULO\RQJUHHQƬHOGGHYHORSPHQWVWKDWGRQRWUHWURƬW ability to support a service), which makes service delivery, H[LVWLQJVHWWOHPHQWV7KHSURJUDPPHPDUNVDQHZGDZQIRU HYHQ DW D PLQLPXP OHYHO XQVXVWDLQDEOH $GGLWLRQDO FRVWV LQ rural spatial transformation and is premised on creating higher time, money and convenience to overcome distance, reduce density/higher population areas to supply basic and social economies of scale and discourage private sector investment VHUYLFHVFRVWHƪHFWLYHO\DQGHƯFLHQWO\ LQVHWWOHPHQWVWKDWFUHDWHMREVDQGHFRQRPLFJURZWK

Sparsely populated areas with dispersed settlements (often SALGA presented WKH 5XUDO 'HQVLƬFDWLRQ 3URJUDPPH WR linked to poverty and underdevelopment) increase the per VWDNHKROGHUVRQDQXPEHURISODWIRUPVDFURVVWKHFRXQWU\

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 7DEOH5XUDOGHQVLƬFDWLRQSURJUDPPHSUHVHQWDWLRQVWRVWDNHKROGHUV

Presentation platforms Date National Working Group endorsement 22 November 2017 Bushbuckridge LM Development Planning Directorate 5 February 2018 Bushbuckridge LM Planning and LED Portfolio Committee 15 May 2018 Innovation for Rural Development (IPRDP) Learning Forum #3&4 31 March and 25 July 2018 Limpopo Provincial Members Assembly (PMA) 7 August 2018 Mpumalanga SPLUM Forum 30 August 2018 Limpopo Provincial Planning Forum 12 November 2018 Northern Cape SALGA Provincial Working Group 18 January 2019 Research paper at the SALGA LG Research colloquium 11 March 2019 (DVWHUQ&DSHUXUDOGHQVLƬFDWLRQGLDORJXH 14 March 2019

7KHPDLQIRFXVRIWKHSURJUDPPHLVWRH[SORUHWKHYLDELOLW\RIWDUJHWHGGHQVLƬFDWLRQLQJUHHQƬHOGGHYHORSPHQWVLQDUHDVLQ WUDQVLWLRQFRPPRQO\UHIHUUHGWRDVVHPLUXUDORUVHPLXUEDQZLWKRXWUHWURƬWWLQJH[LVWLQJUXUDOVHWWOHPHQWV7KHKLHUDUFK\RI SODFHLGHQWLƬHVWKHGHQVLƬFDWLRQWDUJHWDUHDLQLQWUDQVLWLRQDO]RQH

Informal and dispersed settlement pattern, EXTREME RURAL limited service

SEMI-RURAL Transitional/fringe zone: urban & rural characteristics PERI-URBAN

URBAN

Formal market: highly capitalised prime land

URBAN CORE

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Figure 11: The rural-urban spatial continuum.

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 The Integrated Urban Development Framework (IUDF) is GLVSURSRUWLRQDWHO\ RQ ƬQDQFLDO LQYHVWPHQWV DQG government’s policy framework for the future growth and subsistence agriculture and do not address the underlying PDQDJHPHQW RI XUEDQ DUHDV $OWKRXJK XUEDQIRFXVHG VSDWLDO LQHƯFLHQFLHV WKDW PDNH UXUDO DUHDV HFRQRPLFDOO\ WKH ,8') DFNQRZOHGJHV GLƪHUHQW W\SHV RI FLWLHV DQG WRZQV XQYLDEOH ZLWK GLƪHUHQW UROHV DQG UHTXLUHPHQWV DQG WKH UXUDOXUEDQ d) Discretionary land allocation placing communities in hazardous interdependency, which requires a comprehensive, integrated locations - Outdated land allocation methods result in poorly approach to urban development that responds to both ORFDWHGVHWWOHPHQWV7UDGLWLRQDOOHDGHUVODFNWKHWHFKQLFDO HQYLURQPHQWV acumen to assess the suitability of land for human habitat, OHDYLQJFRPPXQLWLHVH[SRVHGWRQDWXUDOKD]DUGVVXFKDV The interdependencies between rural and urban spaces ƮRRGLQJ7UDGLWLRQDOOHDGHUVUHTXLUHWHFKQLFDODVVLVWDQFH without clear divisions between areas are depicted in Figure ZLWKODQGDOORFDWLRQGHFLVLRQV e) Sprawling and unplanned settlements - Growth in unplanned organic settlements is unsustainable and places a heavy 6$/*$oV5XUDO'HQVLƬFDWLRQ3URJUDPPHVHHNVWRDGGUHVVWKH service delivery burden on municipalities that already lack following socio-economic and spatial challenges: UHVRXUFHVDQGOHDGVWRFRPPXQLW\SURWHVWVDQGLQVWDELOLW\ a) Unserviceable locations – Remote rural settlements and WUHDFKHURXV WHUUDLQ PDNH VHUYLFH GHOLYHU\ XQDƪRUGDEOH 'XULQJWKHSDVWƬQDQFLDO\HDU6$/*$SURYLGHGVSHFLDOLVHG DQGXQIHDVLEOH VXSSRUWRQWDUJHWHGGHQVLƬFDWLRQ WRWKH%XVKEXFNULGJH/0 b) Dispersed spatial patterns - Rural areas on the periphery of )LJXUHUHƮHFWVRQHRIRXWSXWVWKDWSURYLGHGWKHPXQLFLSDOLW\ economic opportunities remain poor and underdeveloped ZLWKDFRVWHƪHFWLYHLQVRXUFHGVROXWLRQ WKHƬUVWVSHFLDOLVHG DQGWKHLUORFDWLRQVFRPSRXQGDOUHDG\GLUHVLWXDWLRQV service of this nature without the aid of a service provider), as c) Lack of variation in current approaches to rural development ZHOODVGLUHFWDQGTXDQWLWDWLYHVXSSRUW - Existing approaches to rural development focus

Figure 12: Settlement layout (land-use plan) for the Bushbuckridge local municipality .

SALGA also presented a research paper on Stimulating Rural SO2: SUPPORT REGIONAL REPORT PERFORMANCE (FRQRPLHVWKURXJK6SDWLDOO\7DUJHWHG'HQVLƬFDWLRQ at its Annual Research Colloquium, where municipalities, researchers, ECONOMIC STRATEGIES academics, government representatives and policy-makers AND EFFECTIVE LAND USE GLVFXVVHGWRWKHUHVHDUFKRXWFRPHV

MANAGEMENT APPROACHES AS PART D DRIVERS FOR ECONOMIES OF SCALE AND SOCIAL COHESION SMALL-TOWN REGENERATION (STR)

SALGA’s approach to small-town regeneration focuses on creating economic and functional rather than administrative regions with cross-boundary regional planning in PXQLFLSDOLWLHV 7KLV FDOOV IRU WKH LQWHJUDWHG PDQDJHPHQW

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 of regional space, economies and people with connectivity SO3: PROMOTE HIGH- and economic value chains as the main drivers to increase GHYHORSPHQW7KLVDSSURDFKLVEHLQJSLORWHGDWWKH6$/*$675 QUALITY AND RELIABLE VLWHLQWKH)UHH6WDWHZKLFKLVSDUWRIWKH.DURRUHJLRQ SERVICE PROVISION AND INFRASTRUCTURE INVESTMENT SALGA participated in a number of STR-related events during (CAPACITY AND RENEWAL) WKH UHYLHZ SHULRG 7KHVH LQFOXGHG D UHVHDUFK FROORTXLXP LQ Mangaung, hosted by the Free State Provincial Treasury and IN SUPPORT OF ECONOMIC D FDSDFLW\EXLOGLQJ SURJUDPPH IRU RƯFLDOV DQG PXQLFLSDO STRATEGIES (ENERGY, WATER, FRXQFLOORUVLQWKH.DURR7KH$VVRFLDWLRQDOVRVXSSRUWHGWKH SANITATION, 5TH UTILITY) 0EL]DQD /RFDO 0XQLFLSDOLW\ WR UHTXHVW 675 IXQGLQJ IURP 1DWLRQDO7UHDVXU\ZKLOHWKH0EL]DQD'U%H\HUV1DXGH BUILDING INCLUSIVE GREEN MUNICIPALITIES Blue Crane Route, Enoch Mgijima, Inxuba Yethemba and (BIGM) (COMPONENT 1 000) Walter Sisulu LMs and Sarah Baartman, Chris Hani, Walter 6LVXOXDQG-RH*TDEL'0VEHQHƬWWHGIURP675LQIUDVWUXFWXUH The Federation of Canadian Municipalities (FCM) partnered LQWHUYHQWLRQV with SALGA to implement “The Building Inclusive Green SALGA positioned STR as a priority Eastern Cape Provincial 0XQLFLSDOLWLHV %,*0 qSURJUDPPHIRUPRQWKV \HDUV Government programme, which is supported politically by The BIGM project aims to improve the capacity of South WKH 3UHPLHU DQG DGPLQLVWUDWLYHO\ E\ WKH 'LUHFWRU*HQHUDO $IULFDQ PXQLFLSDOLWLHV WR VXSSRUW HƪHFWLYH VHUYLFH GHOLYHU\ Councillors are local STR champions, while municipal inclusive local green economic growth and enhanced climate PDQDJHUV FKLHI ƬQDQFLDO RƯFHUV DQG VHQLRU PDQDJHUV NHHS FKDQJHPLWLJDWLRQDQGDGDSWDWLRQPHDVXUHV WKH 675 LPSOHPHQWDWLRQ RQ WDUJHW ,QWHUHVWHG DQG DƪHFWHG parties are collaborating in infrastructure delivery, job The project will pilot local economic development initiatives FUHDWLRQ VNLOOV GHYHORSPHQW DQG FUHDWLQJ EHQHƬWV IRU ORFDO in six Eastern Cape municipalities to promote job creation, business, while STR training will be extended to local economic poverty reduction and enhanced well-being, while empowering GHYHORSPHQWSUDFWLWLRQHUVLQWKHPXQLFLSDOLWLHV women, youth and vulnerable groups and ensuring their SALGA’s Karoo STR Conference, which included municipalities LQFOXVLRQDVGHFLVLRQPDNHUVDQGEHQHƬFLDULHV from the Free State, culminated in a number of key resolutions: • share Building Inclusive Green Municipalities (BIGM) SALGA and the Eastern Cape Socio-Economic Consultative experiences with Karoo STR municipalities &RXQFLO (&6(&& IDFLOLWDWHG D ZRUNVKRS DW WKH 0EL]DQD • use the BIGM tool in STR training for councillors and Local Municipality to develop a Local Economic Development PXQLFLSDO RƯFLDOV DQG WR PDQDJH FOLPDWH FKDQJH 6WUDWHJ\XQGHUWKH%,*0SURMHFW7KLVFUHDWHGWKHRSSRUWXQLW\ mitigation and disaster readiness for the Strathoy Caradoc Canadian partner municipality and • lobby for a new funding model for local municipalities 0EL]DQD /0 WR VKDUH H[SHULHQWLDO OHDUQLQJ DERXW EXVLQHVV • address renewable energy challenges with the Department LQFXEDWLRQ7KH.LQJ6DEDWD'DOLQG\HER/RFDO0XQLFLSDOLW\DOVR RI(QHUJ\DQG,33RƯFH EHQHƬWWHG IURP WKLV LQWHUDFWLRQ through an implementable • revitalise support for the Agave initiative and mohair and /('VWUDWHJ\DQGDVVLVWDQFHWRIRUPDEXVLQHVVLQFXEDWLRQKXE ZRRODQGOHDWKHUDQGIRRWZHDUFOXVWHUV HOUSING AND HUMAN SETTLEMENTS 6$/*$ZLOOWDNHWKHVHUHVROXWLRQVIRUZDUGLQWKH\HDUDKHDG Municipal accreditation SPLUMA IMPLEMENTATION SALGA met with the Department of Human Settlements (DHS) to expedite municipal accreditation for this critical developmental Many municipalities battle to implement the Spatial Planning IXQFWLRQDQGUHTXHVWHG'+6WRDZDUG%XƪDOR&LW\0HWURSROLWDQ and Land Use Management Act (SPLUMA), 16 of 2013 due 0XQLFLSDOLW\D/HYHODFFUHGLWDWLRQDQGLGHQWLI\DWOHDVWƬYH mainly to a lack of administrative capacity to deal with PXQLFLSDOLWLHVWRVXSSRUWWRZDUGVD/HYHODFFUHGLWDWLRQ GHYHORSPHQWDSSOLFDWLRQV6$/*$HQJDJHGWUDGLWLRQDOOHDGHUV LQ0KORQWOR4DXNHQL*UHDW3ODFHDQGWKH$OIUHG1]R'LVWULFW SALGA and DHS launched capacity-building programmes for WR DGGUHVV WKHVH LPSOHPHQWDWLRQ FKDOOHQJHV 5HVROXWLRQV municipalities to expedite accreditation and hosted a Human from these sessions included expediting a petition to the Settlements Accreditation Working Session to support the Constitutional Court for a declaratory order to test the validity Mangaung Metro and the Moqhaka, Ngwathe, Matjhabeng, of the Act and including traditional leaders in a SPLUMA Dihlabeng and Maluti-A-Phofung Local Municipalities in UHYLHZ$OO(DVWHUQ&DSHPXQLFLSDOLWLHVDJUHHGWREXGJHWIRU the Free State to, respectively, achieve Level 2 and Level 1 recruiting planning capacity to administer development and DFFUHGLWDWLRQ ODQGDGPLQLVWUDWLRQ

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 Human settlements grant funding • account for reckless business practices rather than SALGA’s Free State representatives participated in the Metros transferring the cost to end users Engagement on Human Settlements Grant Funding in the • FRQGXFWEXVLQHVVLQDQHƪHFWLYHDQGWUDQVSDUHQWPDQQHU Western Cape to share: to avoid unnecessary costs • NQRZOHGJH DQG UHVHDUFK ƬQGLQJV E\ WKH &HQWUH IRU • SURYLGH DƪRUGDEOH HOHFWULFLW\ WKDW LV VXVWDLQDEOH DQG $ƪRUGDEOH+RXVLQJ)LQDQFH &$+) RQUHVLGHQWLDOSURSHUW\ DFFHVVLEOHE\DOO markets in Metros (government subsidised housing, implications for spatial transformation, land use planning, ROADS AND TRANSPORT LAW housing delivery and rates policies) ENFORCEMENT • access updates on the Social Housing and Community Residential Units Programme (CRU) and Finance Linked 7KH 5RDG 7UDƯF 0DQDJHPHQW &RUSRUDWLRQ 570& LQYLWHG Individual Subsidy Programme (FLISP) amendments 6$/*$WRUHSUHVHQWORFDOJRYHUQPHQWDWWKHƬQDO1DWLRQDO • propose process improvements to DHS and Metro quarterly 5RDG 7UDƯF /DZ (QIRUFHPHQW &RGH 157/(& FRQVXOWDWLRQ UHYLHZV LQ-DQXDU\6$/*$REWDLQHGLQSXWIURPDOOPXQLFLSDOLWLHV and submitted a consolidation of inputs to the RTMC for CRITICALITY OF AFFORDABLE WATER FRQVLGHUDWLRQLQƬQDOLVLQJWKH157/(&

Municipalities in rural and poor parts of the Eastern Cape SO4: STRENGTHEN THE ROLE H[SHULHQFHZDWHUWDULƪKLNHVRIXSWRZDWHUWDULƪKLNHV SALGA represented these municipalities in consultative OF LOCAL GOVERNMENT IN workshops, facilitated by the Department of Water and COMMUNITY DEVELOPMENT 6DQLWDWLRQ ':6 WRGLVFXVVSURSRVHGEXONZDWHUWDULƪV AND SOCIAL COHESION to fund the direct and related costs of eco-water resource PDQDJHPHQW MUNICIPAL HEALTH SERVICES (MHS)

Following these discussions, SALGA’s recommendations to SALGA lobbied for MHS reform and own funding by DWS for ministerial consideration included: PXQLFLSDOLWLHV WR DGGUHVV 0+6UHODWHG IXQGLQJ VWDƯQJ • National Treasury (provincial representatives) participation DQG VXVWDLQDEOH VHUYLFH GHOLYHU\ FKDOOHQJHV 7KLV LQFOXGHG to reduce equitable share (ES) for indigent consumers presenting the MHS Status Quo Report to the National Health • DWS to provide municipalities with the ES breakdown Council and tabling key challenges at the National Council of relating to water services Provinces (NCoP) during the 6th Local Government Week in 3DUOLDPHQWDQGWKH-XQHEXGJHWYRWH SALGA also requested DWS to clarify dam and bulk plant levies within municipal jurisdictions and the inability of municipalities In addition, SALGA lobbied CoGTA and the Fiscal Allocation WR LQFUHDVH WDULƪV DQG UHGXFH WKH FRVW RI ZDWHU 7KLV FRXOG &RPPLVVLRQWRHPSKDVLVHWKHVHFKDOOHQJHV7KH&RPPLVVLRQ prevent illegal water consumption, municipalities trading at recommended a National Treasury conditional grant or the DORVVDQGKDYLQJWRVXEVLGLVHGHƬFLWVLQIUDVWUXFWXUHQHJOHFW ULQJIHQFLQJ RI IXQGV WR DGGUHVV WKH SOXV UHFUXLWPHQW DQGZDWHUORVVGXHWRDODFNRIIXQGVIRUPDLQWHQDQFHDQGWDULƪ backlog for environmental health practitioners (EHPs) and LQFUHDVHV WR FRYHU GHƬFLWV DQG GHEWV ZKLFK H[DFHUEDWH WKH community service EHPs, while CoGTA resolved to review SUREOHP MHS allocations and overall costing, as well as the prototype RUJDQRJUDPIRUWKHIXQFWLRQ In addition, SALGA advocated for a revised business model and MHS issues were also discussed in the Local Government

IRUXPIRULQWHUHVWJURXSVWRƬQGVROXWLRQVWRDƪRUGDEOHZDWHU REPORT PERFORMANCE WDULƪV7KH:DWHU6HUYLFH$XWKRULW\ :6$ PXQLFLSDOLWLHVLQ Equitable Share Working Group, while SALGA met with WKHSURYLQFHEHQHƬWWHGIURP6$/*$oVLQWHUYHQWLRQV municipalities and the South African Institute of Environmental Health regarding research into MHS costing and lobbied for RESPONSIBLE ELECTRICITY DISTRIBUTION UHYLHZLQJWKHORFDOJRYHUQPHQW(6IRUPXODUHFRQƬJXULQJWKH PART D adjustment factor and including MHS in the National Treasury SALGA participated in a multiyear electricity price determination &LUFXODURQ0+6LQWKH%DFNWR%DVLFV %% UHSRUWLQJWRRO application and invited all Eastern Cape municipalities licensed for electricity distribution to attend round-table discussions Further engagements regarding MHS research included the DERXWWKHSRWHQWLDOLPSDFWRQORFDOJRYHUQPHQWDQGFRQVXPHUV Department of Health (DoH) and stakeholder consultations to develop terms of reference for implementing the research 7KHLQSXWVZHUHWDEOHGDW1(56$FRQVXOWDWLRQVDQGEHQHƬWWHG LQWKHƬQDQFLDO\HDU'LVWULFWDQGPHWURSROLWDQ the 21 electricity distribution license holders, as Eskom agreed PXQLFLSDOLWLHVZLOOEHQHƬWIURPWKHUHVHDUFKUHVXOWVWKURXJKD to: GLƪHUHQWLDWHGDSSURDFKWR0+6IXQGLQJDQGVWDƯQJ

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 MHS platforms Implementing ECD-related infrastructure (Goal 6 in the In addition to helping municipalities improve their health ECD Policy) will require a multidisciplinary approach within services, SALGA conducted an MHS audit in all district and local government between economic development and PHWURSROLWDQ PXQLFLSDOLWLHV 7KH DXGLW LGHQWLƬHG FKDOOHQJHV SODQQLQJVHUYLFHV ]RQLQJSODQQLQJODQGXVH,'36 PXQLFLSDO DQGUHVXOWHGLQDFWLRQSODQVWRFORVHJDSVDQGEXLOGFDSDFLW\ infrastructure services (human settlement, water, sanitation, Peer discussion platforms for municipal MHS managers electricity, waste management); municipal health and safety were also created to stimulate and encourage discourse and and security services (Children’s Amendment Act, 41 of 2007, LQWHUDFWLRQ norms, standards and local by-laws); and intergovernmental UHODWLRQV SROLF\OHJLVODWLRQDQGE\ODZV 6$/*$ZLOORYHUVHH In January 2019, SALGA partnered with the SAIEH, NDOH, IFEH WKLVSURFHVVJRLQJIRUZDUG DQG&LW\RI(NXUKXOHQLWRKRVWWKH0XQLFLSDO+HDOWK6XPPLW The objectives for the summit included creating greater Persons with disabilities MHS awareness, lobbying local government for additional Given the urgent need to coordinate, enhance and consolidate leadership support, addressing the lack of resources, responses to people with disabilities, SALGA met with DSD engaging political leaders to improve service accessibility to regarding, inter alia, improving local government reporting communities and promoting MHS/EHS as a key mandate of on the White Paper on the Rights of Persons with Disabilities &DWHJRULHV$DQG&PXQLFLSDOLWLHV'LVFXVVLRQVDOVRFHQWUHGRQ (WPRPD), strengthening coordination in local government HƯFLHQWDQGVXVWDLQDEOHVHUYLFHGHOLYHU\DVSDUWRIWKHSXEOLF to accommodate disabled persons, identifying existing KHDOWKV\VWHP guidelines to establish disability focal points/coordinators and HVWDEOLVKLQJKRZPDQ\ZHUHHVWDEOLVKHGDQGDUHIXQFWLRQDO 0XQLFLSDO VXPPLW DWWHQGHHV EHQHƬWWHG IURP LQIRUPDWLRQ about best practices, sector development and new policies and SALGA recommended that IGR provincial platforms legislation, while councillors increased their understanding of improve coordination, DSD shares the reporting template/ MHS and actions linked to summit resolutions were assigned implementation matrix within local government and that WRVSHFLƬFUROHSOD\HUV UHSRUWVDUHVLJQHGRƪE\PXQLFLSDODXWKRULWLHV VXSSRUWHGE\ D &RXQFLO UHVROXWLRQ DQG VLJQHG E\ DQ $FFRXQWLQJ 2ƯFHU RU HIV and AIDS 0DQDJHUUHVSRQVLEOHIRUWKHSRUWIROLR 7KHƬJKWDJDLQVW+,9DQG$,'6UHTXLUHVUHVRXUFHVDQG leadership throughout society and local government, which, Further recommendations included inter-municipal UHSRUWHGO\LVODJJLQJEHKLQG6$/*$FRQGXFWHGD+,9$,'6 engagements through direct consultations or available STI and TB (HAST) audit in all 257 municipalities to identify platforms, awareness creation circulars to municipalities and municipal preparedness to deal with these challenges inviting DSD for a presentation through appropriate SALGA HƪHFWLYHO\ JRYHUQDQFHVWUXFWXUHV

The audit results revealed varying levels of response-readiness SALGA also conducted basic sign language training sessions for and served to inform local government’s capacity building disability coordinators to communicate with people living with SODQVWRUHVSRQGWRWKHSDQGHPLF,QFROODERUDWLRQZLWK,$3$& disability in the uGu, ILembe and uMgungundlovu districts in UNAID and the South African National AIDS Council (SANAC), .ZD=XOX1DWDO7KHLQLWLDWLYHDURVHIURPWKHUHFRPPHQGDWLRQ SALGA facilitated a workshop that focused on the municipal of a SALGA feasibility study that indicated that the use of sign Fast-Track project, its responses to HIV, TB and STI and related language can minimise communication barriers at municipal JDSVDQGQHHGVWRGHYHORSDSURMHFWDFWLRQSODQ OHYHO

:KLOH DOO GHOHJDWHV EHQHƬWWHG IURP WKH ZRUNVKRS Children representatives from the 13 Fast-Track municipalities, Given the urgent need to include Children’s Rights into the VSHFLƬFDOO\ LQFUHDVHG WKHLU XQGHUVWDQGLQJ RI WDUJHWHG ORFDO planning and budgeting of local government, SALGA partnered JRYHUQPHQWUHVSRQVHVWR+,9DQG$,'6 with Save the Children South Africa (SCSA) to: • prioritise children’s rights in municipal IDPs and budgets VULNERABLE GROUPS • develop action plans for children in priority provinces and replicate these nationally Early Childhood Development (ECD) • assist municipalities to include and actively involve children SALGA guided the implementation of the National Integrated in local government planning, budgeting and monitoring, Implementation Plan and facilitated the establishment of ECD such as on the child-friendly IDP needs-based inter-departmental structures/mechanisms at • assist leading municipalities to train other municipalities provincial, district and local municipal levels to create greater WUDLQWKHWUDLQHU DFFHVVWRTXDOLW\(&'

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 Other partners, along with SALGA and the SCSA, include the EHQHƬWIURPWKHUHVHDUFKWKURXJKLQFUHDVHGFRPSOLDQFHZLWK South African Human Rights Commission, Centre for Child 5HJXODWLRQRIWKH&RQVWLWXWLRQ /DZDQG'6'0HPEHUPXQLFLSDOLWLHVZLOOEHQHƬWVLJQLƬFDQWO\ when these developments are implemented in the 2019/20 SALGA consulted with member municipalities, provinces ƬQDQFLDO\HDU and partners such as CoGTA, the University of Pretoria and provincial legislatures in Gauteng and KwaZulu-Natal in a YOUTH FRPSUHKHQVLYHUHYLHZDQGXSGDWHRIWKHFHPHWHU\IUDPHZRUN Following approval by municipalities and the organised local SALGA lobbied strongly to mainstreaming youth development government sector, SALGA’s National Working Group on into core municipal programmes that are linked to monitoring, Community Development and Social Cohesion adopted the reporting and evaluation requirements and participated IUDPHZRUN actively in the National Youth Development Coordinating Forum (NYDCF) where institutions reported on youth SAFETY AND SECURITY GHYHORSPHQWLQLWLDWLYHV National government introduced a number of policy The Department of Planning, Monitoring and Evaluation documents on safety and security that have serious (DPME) partnered with the United Nations Population Fund LPSOLFDWLRQVIRUORFDOJRYHUQPHQW7KH:KLWH3DSHURQ6DIHW\ Agency (UNFPA) to develop a monitoring and evaluation and Security advances community safety and encourages (M&E) system that is available to all government, civil society a collective and collaborative approach between state and and private sector entities that are implementing youth QRQVWDWH DFWRUV 6$/*$ FRQYHQHG D SURYLQFLDO FRQVXOWDWLYH SURJUDPPHV session to obtain inputs from Eastern Cape municipalities on WKHSURSRVHGFROODERUDWLYHDSSURDFK SALGA’s participation resulted in the adoption of the M&E SALGA also facilitated municipal consultations in all nine system in local government to assess the implementation provinces on the Implementation Framework of the White RI \RXWK SURJUDPPHV *RYHUQPHQW GHSDUWPHQWV FLYLO Paper on Safety and Security, Policy Framework on the VRFLHW\ PXQLFLSDOLWLHV DQG SULYDWH VHFWRU HQWLWLHV EHQHƬWWHG establishment of a Single Police Service and discussion VLJQLƬFDQWO\IURPWKLVGHYHORSPHQW GRFXPHQW RQ WKH 6LQJOH 4XDOLƬFDWLRQ IRU 3ROLFH Feedback indicated that the shortcomings of the framework SALGA WOMEN COMMISSION (SWC) UHTXLUHG VLJQLƬFDQW UHƬQHPHQW DQG LPSURYHPHQW EHIRUH LPSOHPHQWDWLRQ The SALGA Women’s Commission (SWC) is a governance structure that coordinates, promotes and advocates for SALGA’s NEC approved a Public Safety and Security Technical gender appropriate strategies and practices within member Forum for technical public safety and security matters and PXQLFLSDOLWLHV 6WUDWHJLFDOO\ WKH 6:& 3URJUDPPH RI $FWLRQ 6$/*$.=1ZDVWKHƬUVWWRHVWDEOLVKLWVIRUXPIRUSXEOLFVDIHW\ is aligned with SALGA’s 2018/19 APP and aims to increase the LVVXHV UHSUHVHQWDWLRQDQGHƪHFWLYHSDUWLFLSDWLRQRIZRPHQLQORFDO JRYHUQPHQW Th Association also participated in various IGR fora, including the Police Ministry Technical MinMEC and National Forum Municipalities in the Eastern Cape aligned themselves with this for Municipal Police Service to protect the interest of local initiative through a capacity-building session for chairpersons JRYHUQPHQWDQGDGYRFDWHIRUSROLFLHV of multiparty women caucuses and managers responsible IRUVSHFLDOSURJUDPPHVLQGLVWULFWDQGPHWURPXQLFLSDOLWLHV ARTS, CULTURE AND HERITAGE (ACH)

%HQHƬWVIURPWKHDGRSWLRQRIWKH6:&3URJUDPPHRI REPORT PERFORMANCE $FWLRQZLOODFFUXHWRZRPHQLQWKHSURYLQFHV ,QVXƯFLHQWFRRUGLQDWLRQDQGDODFNRIV\VWHPDWLF$&+FDSDFLW\ development in municipalities spurred SALGA to develop a CEMETERY MANAGEMENT AND FRAMEWORK toolkit in consultation with municipalities and the Tshwane 8QLYHUVLW\ RI 7HFKQRORJ\ 787 %HQHƬFLDULHV LQFOXGH 6$/*$ PART D In response to reports about the poor state of the funeral PHPEHUVDQGWKHORFDOJRYHUQPHQWVHFWRU industry in the country, SALGA conducted research into undertakers’ premises, mortuaries and crematoriums to LIBRARY MANAGEMENT GHWHUPLQH UHJXODWRU\ DQG OHJLVODWLYH FRPSOLDQFH :KLOH WKH research results indicated satisfactory levels of compliance In consultation with municipalities, SALGA and the Department EXW LGHQWLƬHG NH\ VKRUWFRPLQJV VXFK DV D VFDUFLW\ RI ODQG of Arts and Culture (DAC) developed a position paper on for burials, unregistered undertakers, a shortage of EHPs to OLEUDU\ PDQDJHPHQW 6$/*$oV 1DWLRQDO :RUNLQJ *URXS RQ monitor and enforce compliance and better management Community Development and Social Cohesion adopted the RI+HDOWK&DUH5LVN:DVWHE\IXQHUDOSDUORXUV0XQLFLSDOLWLHV SRVLWLRQSDSHUDVDQDGYRFDF\JXLGHDW,*5IRUD

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 Not applicableNot Not applicable Not Utility (broadband th Department of Telecommunications and Postal Services on 13 February 2019 SALGA Municipal and Innovations Technology Information Working Group on 28 February 2019 IT Managers' Provincial Forum in KZN on March 26 2019 tested West North technical soundness on 28 2019 March National Working Group Innovations Municipal on approved strategy on 19 2019 March infrastructure and services) vision, strategy and to implementation model the following structures for purposes:lobbying Develop and presented SALGA 5 - - - - - inputs to Submitted the Accreditation and Assignment Framework was that incorporated into the Department of Human Settlements Frameworks 2018/19 Progress on Performance Progress on 2018/19 variancefor Reason • • Status Achieved Achieved Performance Target 2018/19 2018/19 Output Annual Annual Output SALGA strategy to lobby for broadband to become the 5th utility developed Marchby 31 2019 SALGA input on accreditation policy/ framework for municipalities in Human by Settlement March31 2019 Indicator Performance SALGA strategy to lobby for broadband developed by 31 2019 March SALGA's input accreditation on policy for municipalities in Human Settlement by March31 2019 2018/19 Output Output 2018/19 Develop a Brown Paper and the on Strategy 5th Utility by 31 2018 March Develop proposals to address misalignment of policy as relevant WRGLƪHUHQW sectors by 31 2018 March GOAL SUSTAINABLE 1: INCLUSIVE ECONOMIC GROWTH AND SPATIAL TRANSFORMATION Lobby, advocateLobby, and represent Lobby, advocateLobby, and represent 2018/19 Annual Performance Plan 2018/19 Annual Performance Report Utility in th municipalities Enabling policy legislative and for framework infrastructure services provision Broadband Broadband services are recognised as a basic service and 5 Utility) th high quality and reliable service and provision infrastructure investment (capacity and renewal) in of support economic strategies (energy, water, sanitation, 5 7RLPSOHPHQWD sustainable Urban Development Programme 7RSURPRWH 2 1 No Strategic objectives Outcome Mandate Baseline 2017/18 PERFORMANCE AGAINST PREDETERMINED OBJECTIVES PREDETERMINED AGAINST PERFORMANCE

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 Not applicable Not applicable Not DoE draft Integrated Resource Plan (IRP), as the key electricity new determines that plan electricity capacity, generation published in August for 2018 SXEOLFFRPPHQW0XQLFLSDOLWLHV are vital to the electricity contribute and chain value RIQDWLRQDOGHPDQG DQGSOXVRIPXQLFLSDO FRQVXPHUGHPDQG5LVLQJ HOHFWULFLW\WDULƪVGHFUHDVHG HQHUJ\HƯFLHQF\FRVWVDQG technologies energy renewable electricity reducing are consumption Submitted inputs to the IRP to DoE and engaged with governance structures and the Energy Forum submission the Following made to by SALGA in 2017/18 Department Environmental of $ƪDLUV '($ WRUHYLVHWKH to standards and norms FRQVLGHUDGLƪHUHQWLDWLRQ DSSURDFKVLQFHODQGƬOOVLWHV GLƪHUVLQWHUPVRIVL]HW\SH and amount of waste disposed, SALGA developed a submission proposed the included which content of the revised Norms Standards and standards and norms Proposed LQFOXGHDGLƪHUHQWLDWHG DSSURDFKRQODQGƬOO management Shared the proposed document with the DEA for consideration 2018/19 Progress on Performance Progress on 2018/19 variancefor Reason • • • • • Status Achieved Achieved Performance Target 2018/19 2018/19 Output Annual Annual Output Proposed Proposed and norms standards for a GLƪHUHQWLDWHG approach IRUODQGƬOO management tabled with DEA Marchby 31 2019 SALGA inputs on the role of municipalities renewable in and energy alternative other sources of 31 by energy 2019 March Indicator Performance Norms and standards on proposed GLƪHUHQWLDWHG approach IRUODQGƬOO management tabled with DEA Marchby 31 2019 2018/19 Output Output 2018/19 SALGA's inputs on the role of municipalities renewable in and energy alternative sources of 31 by energy 2019 March Develop proposals to address misalignment of policy as relevant WRGLƪHUHQW sectors by 31 2018 March Develop proposals to address misalignment of policy as relevant WRGLƪHUHQW sectors by 31 2018 March GOAL SUSTAINABLE 1: INCLUSIVE ECONOMIC GROWTH AND SPATIAL TRANSFORMATION Lobby, advocateLobby, and represent Lobby, advocateLobby, and represent PERFORMANCE REPORT PERFORMANCE 2018/19 Annual Performance Plan 2018/19 Annual Performance Report PART D Enabling policy legislative and for framework infrastructure services provision Enabling policy legislative and framework for infrastructure services provision

th Utility) Utility) 7RSURPRWHKLJK quality reliable and service provision infrastructureand (capacityinvestment and renewal) in economic of support strategies (energy, water, sanitation, 5th utility) quality and reliable quality reliable and service provision infrastructureand (capacityinvestment and renewal) in economic of support strategies (energy, water, sanitation, 5 3 4 promote To high No Strategic objectives Outcome Mandate Baseline 2017/18

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 Not applicable Not Not applicable Not applicable Not Lobbied the Minister of Water and Sanitation to consider withdrawal of the proposed a sanitation at and water bill meeting held in February 2019 a developed Subsequently, Local Government Position on Water legislation review and institutions management water Developed a protocol that outlines the legal mandate of local government in management environmental The framework will serve as a guide for implementing between protocol municipalities provinces and Developed the Protocol for Management Environmental Presented the Protocol at the DEA's Local Government Support Forum (LGSF) in February 2019 2018/19 Progress on Performance Progress on 2018/19 variancefor Reason • • • • • • Status Achieved Achieved Achieved Performance Target 2018/19 2018/19 Output Annual Annual Output SALGA inputs to new Water Act to submitted Department of :DWHU$ƪDLUVE\ March31 2019 that Protocol outlines the legal mandate of local government in environmental management as a produced framework for implementing protocol between municipalities and provinces, and tabled with DEA March by 31 2019 Protocol for environmental by management March31 2019 Indicator Performance on the new Water Act to submitted Department of :DWHU$ƪDLUVE\ March31 2019 outlines the legal mandate of local government in environmental management as a produced for framework implementing protocol between municipalities and provinces tabled with DEA Marchby 31 2019 environmental environmental by management March31 2019 2018/19 Output Output 2018/19 New Indicator SALGA's inputs New Indicator Protocol that New Indicator Protocol for GOAL SUSTAINABLE 1: INCLUSIVE ECONOMIC GROWTH AND SPATIAL TRANSFORMATION Lobby, advocateLobby, and represent advocateLobby, and represent Support and advice 2018/19 Annual Performance Plan 2018/19 Annual Performance Report Enabling policy legislative and for framework infrastructure services provision Enabling policy legislative and for framework infrastructure services provision Optimal Optimal institutional arrangements sustainable for infrastructure services

th th th Utility) Utility) Utility) Utility) Utility) quality and reliable quality reliable and service provision infrastructureand (capacityinvestment and renewal) in economic of support strategies (energy, water, sanitation, 5 quality and reliable quality reliable and service provision infrastructureand (capacityinvestment and renewal) in economic of support strategies (energy, water, sanitation, 5 quality and reliable quality reliable and service provision infrastructureand (capacityinvestment and renewal) in economic of support strategies (energy, water, sanitation, 5 5 promote To high 6 promote To high 7 promote To high No Strategic objectives Outcome Mandate Baseline 2017/18

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 Not applicable Not Developed inputs and represented the local government position on the authorityconstitutional for electricity reticulation in the Coordinating Presidential &RXQFLOHQJDJHPHQWV*LYHQ that the PCC did in not 2017 recommendation the support by SALGA to approach the Court to seek a declaratory clarify ‘executive to the order authority’ municipalities of in relation to electricity distribution and reticulation (as stipulated in Section 156 and Scheduled 4B of the Republic the of Constitution of South Africa), the Inter- Ministerial Task (IMTT) Team was established to further look into SALGA's recommendations Following a series of engagements, advisory the panel recommended the appointment of an Advisory Panel to provide legal clarity on the constitutional electricity to matters relating distribution and reticulation 2018/19 Progress on Performance Progress on 2018/19 variancefor Reason • • Status Achieved Performance Target 2018/19 2018/19 Output Annual Annual Output Inputs on Inputs on challenges relating to constitutional authority for electricity by distribution March31 2019 Indicator Performance 2018/19 Output Output 2018/19 SALGA's inputs challenges on relating to constitutional authority for electricity by distribution March31 2019 Develop Develop proposal(s) and recommendations on local government reform sector (industry wide, service authority, and service provider) by 31 2018 March GOAL SUSTAINABLE 1: INCLUSIVE ECONOMIC GROWTH AND SPATIAL TRANSFORMATION Lobby, advocateLobby, and represent PERFORMANCE REPORT PERFORMANCE 2018/19 Annual Performance Plan 2018/19 Annual Performance Report PART D Optimal Optimal institutional arrangements sustainable for infrastructure services quality and reliable quality reliable and service provision infrastructureand (capacityinvestment and renewal) in economic of support strategies (energy, water, sanitation, 5th utility) 8 promote To high No Strategic objectives Outcome Mandate Baseline 2017/18

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 Not applicable Not Not applicable Not Developed position on the Act Transport Land National which were presented in Parliament Commissioned Dular Omar to Research of Institute develop a legal opinion for SALGA to engage NCoP on Amendmentthe NLTA Bill and the constitutionality of the devolution of the contracting challenging - function the constitutionality and the how of consequences contracting is framed in NLTA Bill Meeting held with the Chairperson of the NCoP followed by a technical meeting with the legal representatives to engage on the legal opinion Developed recommendations recommendations Developed institutional sector water for review following the discussions about how to restructure Water Boards Water Boards were originally established to operate regional systems supply water bulk which cannot be managed by a municipalities of combination 2018/19 Progress on Performance Progress on 2018/19 variancefor Reason • • • • • Status Achieved Achieved Performance Target 2018/19 2018/19 Output Annual Annual Output Inputs to Inputs to Transport on MINMEC devolution transport of function by 31 2019 March Recommen- for dation water sector institutional review by 31 2019 March Indicator Performance to Transport on MINMEC devolution transport of function by 31 2019 March recommen- for dation water sector institutional review by 31 2019 March 2018/19 Output Output 2018/19 New Indicator SALGA's inputs New Indicator SALGA's GOAL SUSTAINABLE 1: INCLUSIVE ECONOMIC GROWTH AND SPATIAL TRANSFORMATION Lobby, advocateLobby, and represent advocateLobby, and represent 2018/19 Annual Performance Plan 2018/19 Annual Performance Report Optimal Optimal institutional arrangements sustainable for infrastructure services Optimal institutional arrangements sustainable for infrastructure services

th th Utility) Utility) Utility) quality and reliable quality reliable and service provision infrastructureand (capacityinvestment and renewal) in economic of support strategies (energy, water, sanitation, 5 quality and reliable quality reliable and service provision infrastructureand (capacityinvestment and renewal) in economic of support strategies (energy, water, sanitation, 5 9 promote To high 10 high promote To No Strategic objectives Outcome Mandate Baseline 2017/18

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 Not applicable Not Not applicable Not applicable Not Conducted research into into research Conducted various mechanisms (internal and external) available for the provision of waste servicesmanagement Tabled the research report at the working group and NEC meeting on December 10 2018 Presented the report to municipalities Department and RI(QYLURQPHQWDO$ƪDLUVDWWKH workshop March on the 11 2019 Renewal and maintenance of well is infrastructure existing below what is required, and this category of expenditure has for in neglected been time some IDYRXURIQHZLQIUDVWUXFWXUH This outcome appears in part to be attributable to both arrangements funding current as well as compliance with national targets around new infrastructure many (since smaller municipalities have very little discretion in how to direct infrastructure spend) Developed proposals on Infrastructure Grants System for discussion at the National Treasury Budget Forum Submitted comments on the DSSOLFDWLRQIRUZDWHUWDULƪ Boards Water increase by Such comments were also submitted to SALGA structures governance (Working groups and NEC sanctioning for meeting) 2018/19 Progress on Performance Progress on 2018/19 variancefor Reason • • • • • • • Status Achieved Achieved Achieved Performance Target 2018/19 2018/19 Output Annual Annual Output Proposals submitted Budget to Forum on Infrastructure Grant system by March31 2019 Submissions/ presentations RQEXONWDULƪV (water and electricity) 31 by 2019 March Research report on internal and options external for waste by management March31 2019 Indicator Performance SALGA's SALGA's proposals submitted Budget to Forum on Infrastructure Grant system by March31 2019 submissions/ presentations RQEXONWDULƪV (water and electricity) 31 by 2019 March 2018/19 Output Output 2018/19 on conducted and internal external options for waste by management March31 2019 Develop policy and funding SURSRVDOVRQƬVFDO (Capex transfers and Opex) for presentation to the budget forum Marchby 31 2018 New Indicator SALGA's New Indicator Research GOAL SUSTAINABLE 1: INCLUSIVE ECONOMIC GROWTH AND SPATIAL TRANSFORMATION Lobby, advocateLobby, and represent Lobby, advocateLobby, and represent Support and advice PERFORMANCE REPORT PERFORMANCE 2018/19 Annual Performance Plan 2018/19 Annual Performance Report PART D (QDEOLQJƬVFDO for framework Capex and Opex municipal of infrastructure services (QDEOLQJƬVFDO for framework Capex and Opex municipal of infrastructure services Optimal Optimal institutional arrangements sustainable for infrastructure services

Th th th quality and reliable quality reliable and service provision infrastructureand (capacityinvestment and renewal) in economic of support strategies (energy, water, sanitation, 5 Utility) Utility) Utility) Utility) Utility) Utility) quality and reliable quality reliable and service provision infrastructureand (capacityinvestment and renewal) in economic of support strategies (energy, water, sanitation, 5 quality and reliable quality reliable and service provision infrastructureand (capacityinvestment and renewal) in economic of support strategies (energy, water, sanitation, 5 11 high promote To 12 high promote To 13 high promote To No Strategic objectives Outcome Mandate Baseline 2017/18

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 Not applicable Not Not applicable Not Developed a revised Environmental Costing and Finance Policy Position Paper Presented the paper at the National Working Group (presented to working group Change Climate Convened for Conference Compact Mayors as well as the Green Energy Symposium held in KZN Novemberin 2018 South Africa made United commitments the to Nationals Framework Change Climate on Convention (UNFCCC) collective of Parties, in its National Determined Contributions (NDC) These commitments include the reduction of emissions, where Greenhouse gas emissions are set to peak in 2025 and decline (2035) 2018/19 Progress on Performance Progress on 2018/19 variancefor Reason • • • • • Status Achieved Achieved Performance Target 2018/19 2018/19 Output Annual Annual Output Revised Environmental Finance Policy paper position Marchby 31 2019 Local Government Change Climate StrategyFinance developed by 31 2019 March Indicator Performance on revised Environmental Finance Policy developed by 31 2019 March on Local Government Change Climate Finance developed by 31 2019 March 2018/19 Output Output 2018/19 New Indicator Position paper New Indicator Strategy GOAL SUSTAINABLE 1: INCLUSIVE ECONOMIC GROWTH AND SPATIAL TRANSFORMATION Support and advice Support and advice 2018/19 Annual Performance Plan 2018/19 Annual Performance Report (QDEOLQJƬVFDO for framework Capex and Opex municipal of infrastructure services (QDEOLQJƬVFDO for framework Capex and Opex municipal of infrastructure services

th th quality and reliable quality reliable and service provision infrastructureand (capacityinvestment and renewal) in economic of support strategies (energy, water, sanitation, 5 Utility) Utility) Utility) quality and reliable quality reliable and service provision infrastructureand (capacityinvestment and renewal) in economic of support strategies (energy, water, sanitation, 5 14 high promote To 15 high promote To No Strategic objectives Outcome Mandate Baseline 2017/18

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 Not applicable Not According to recent court rulings, municipalities must provide alternate accommodation to those inner-city from evicted informal or buildings settlements on illegally land occupied Only the Emergency Housing Programme (EHP) in the National Housing Code can provide funding to such cover to municipalities costs but EHP applications are often declined due to a lack of funds This leaves municipalities XQDEOHWRIXOƬOWKHLUREOLJDWLRQV SALGA and DHS have on research conducted emergency housing and SALGA will consult municipalities in the ƬQDQFLDO\HDU 2018/19 Progress on Performance Progress on 2018/19 variancefor Reason • • • • Status Achieved Performance Target 2018/19 2018/19 Output Annual Annual Output Recommen- dations to NDHS and NT RQHƪHFWLYH funding mechanisms emergency for housing by 31 2019 March Indicator Performance recommend- on dations HƪHFWLYH funding mechanisms emergency for housing to submitted NDHS and NT by March31 2019 2018/19 Output Output 2018/19 New Indicator SALGA's GOAL SUSTAINABLE 1: INCLUSIVE ECONOMIC GROWTH AND SPATIAL TRANSFORMATION Support and advice PERFORMANCE REPORT PERFORMANCE 2018/19 Annual Performance Plan 2018/19 Annual Performance Report PART D (QDEOLQJƬVFDO for framework Capex and Opex municipal of infrastructure services

th Utility) Utility) quality and reliable service provision infrastructureand (capacityinvestment and renewal) in economic of support strategies (energy, water, sanitation, 5 16 high promote To No Strategic objectives Outcome Mandate Baseline 2017/18

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 Not applicable Not Lobbied sector departments and other institutions to local government support PDQGDWHVXFKVWDNHKROGHUV include the IMTT, DEA, DHS, DWA, NT Budget Forum Engaged the Department Energy National of (OHFWULƬFDWLRQ$GYLVRU\ Committee this committee was established to ensure increased implementation of HOHFWULƬFDWLRQSURMHFWVDVZHOO for needs support at as looking municipalities Participated in the IMTT work streams that are looking at supporting municipalities who are owing on infrastructure issue like metering as well as management revenue Waste Management, SALGA in collaboration with DEA has municipalities all supported under Chris Hani DM and OR Tambo DM to develop waste bylawsmanagement 2018/19 Progress on Performance Progress on 2018/19 variancefor Reason • • • • Status Achieved Performance Target 2018/19 2018/19 Output Annual Annual Output Sector Sector departments and other relevant institutions engaged to enable support municipalitiesto Marchby 31 2019 Indicator Performance Engage sector sector Engage departments and other relevant to institutions support provide municipalitiesto Marchby 31 2019 2018/19 Output Output 2018/19 Liaise with with Liaise sector appropriate departments to they that ensure dedicated provide support (in terms of section 154) to municipalities by 31 March 2018 GOAL SUSTAINABLE 1: INCLUSIVE ECONOMIC GROWTH AND SPATIAL TRANSFORMATION Support and advice 2018/19 Annual Performance Plan 2018/19 Annual Performance Report Municipalities Municipalities receiving targeted and increased sector whereby support services improve

th quality and reliable quality reliable and service provision infrastructureand (capacityinvestment and renewal) in economic of support strategies (energy, water, sanitation, 5 Utility) Utility) 17 high promote To No Strategic objectives Outcome Mandate Baseline 2017/18

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 Not applicable Not Developed a framework to FDWHJRULVHUHJLRQDOHFRQRPLHV Also continued to support municipalities through the (STR) Regeneration Small-Town programme as follows: Karoo - (Eastern Cape, Western Cape, Free State and Northern Cape) municipalities Supported STRwith implementation Councillors training of through DQGRƯFLDOVDWWKH&HQWUDO Karoo District and its local municipalities STR in Convened conference 2018 October On regional initiatives SALGA supported the Overberg District Municipality to develop economic regional their strategy development Convened a dialogue in August at the Bojanala municipality In NC, EC, FS and KZN, capacitatedmunicipalities were on STR and regional initiatives 2018/19 Progress on Performance Progress on 2018/19 variancefor Reason • • • • • • • Status Achieved Performance Target 2018/19 2018/19 Output Annual Annual Output Framework for the categorisation regional of economies developed by 31 2019 March Indicator Performance Categorisation Categorisation regional of economies framework developed by 31 2019 March 2018/19 Output Output 2018/19 Conduct research research Conduct identifying functional the regional in economies municipalities by March31 2018 GOAL SUSTAINABLE 1: INCLUSIVE ECONOMIC GROWTH AND SPATIAL TRANSFORMATION Support and advice PERFORMANCE REPORT PERFORMANCE 2018/19 Annual Performance Plan 2018/19 Annual Performance Report PART D Aligned Aligned and planning economic development across municipal boundaries economic strategies economic DQGHƪHFWLYH/DQG Use Management approaches as drivers scale of economies of and social cohesion 18 regional support To No Strategic objectives Outcome Mandate Baseline 2017/18

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 Not applicable Not Developed a Framework RQ5XUDO'HQVLƬFDWLRQLQ which2018 was consulted with municipalities and the stakeholders at other PartnershipInnovation for Rural Development Programme (IPRDP) held on the 25th July 7KHIUDPHZRUNZDV adopted at the SALGA working groups held in March 2019 7KHUXUDOGHQVLƬFDWLRQ framework was also piloted with the Bushbuckridge Local 0XQLFLSDOLW\2YHUDQGDERYH WKHSLORWWKHUXUDOGHQVLƬFDWLRQ dialogue was also held in the Eastern Cape on the March 14 2019 In Limpopo, Thulamela 0XQLFLSDOLW\ZDVDOVRLGHQWLƬHG for implementation in the SURYLQFH$ZRUNVKRSZDVKHOG on 5 March to discuss 2019 the whole framework and its implementation procedures 2018/19 Progress on Performance Progress on 2018/19 variancefor Reason • • • Status Achieved Performance Target 2018/19 2018/19 Output Annual Annual Output Framework to facilitate rural GHQVLƬFDWLRQ developed by 31 2019 March Indicator Performance 2018/19 Output Output 2018/19 for rural GHQVLƬFDWLRQ developed by 31 2019 March New Indicator Framework GOAL SUSTAINABLE 1: INCLUSIVE ECONOMIC GROWTH AND SPATIAL TRANSFORMATION Support and advice 2018/19 Annual Performance Plan 2018/19 Annual Performance Report (ƯFLHQW of management space and land municipalitiesin economic strategies economic DQGHƪHFWLYH/DQG Use Management approaches as drivers scale of economies of and social cohesion 19 regional support To No Strategic objectives Outcome Mandate Baseline 2017/18

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 Not applicable Not Municipalities are required to comply with the provisions of the SPLUMA and its regulations within 5 years of the proclamation of the $FW:KLOHDQLQFUHDVLQJ municipalities of are number UHDFKLQJFRPSOLDQFH with the SPLUMA, there municipalities still are WKDWDUHODJJLQJEHKLQG SPLUMAWhile compliance remains a challenge, there are an increasing number of municipalities who are with challenges experiencing WKHLPSOHPHQWDWLRQRIWKH$FW Conducted a gaps analysis in all provinces in order to evaluate the extent of SPLUM municipalities in challenges and; to ascertain the respective SPLUM support requirements municipalitiesby Finalised a consolidated DQDO\VLVUHSRUW6RPHRIWKH NH\JDSVLGHQWLƬHGLQWKHUHSRUW planning town of lack include capacity within municipalities incorporation of poor and and thinking generation new processes in spatial planning and land use practice Developed a SPLUM capacity building manual has been developed based on the SPLUM JDSVDQDO\VLV7KHFDSDFLW\ building manual formed the basis knowledge-sharing the of municipalities with workshops LQVHOHFWHGSURYLQFHV0RUHRYHU the workshops were convened assistto municipalities to HƪHFWLYHO\LPSOHPHQW63/80$ 2018/19 Progress on Performance Progress on 2018/19 variancefor Reason • • • • Status Achieved Performance Target 2018/19 2018/19 Output Annual Annual Output SPLUMA SPLUMA capacity building programmes by implemented March31 2019 Indicator Performance 2018/19 Output Output 2018/19 Implemented SPLUMA capacity building programmes by March31 2019 Develop proposals to address misalignment of policy as relevant WRGLƪHUHQW sectors by 31 2018 March GOAL SUSTAINABLE 1: INCLUSIVE ECONOMIC GROWTH AND SPATIAL TRANSFORMATION Capacity Capacity building PERFORMANCE REPORT PERFORMANCE 2018/19 Annual Performance Plan 2018/19 Annual Performance Report PART D (ƯFLHQW of management space and land municipalitiesin economic strategies economic DQGHƪHFWLYH/DQG Use Management approaches as drivers scale of economies of and social cohesion 20 regional support To No Strategic objectives Outcome Mandate Baseline 2017/18

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 Not applicable Not Despite spatial transformation transformation spatial Despite central principle a being in a number of national policies, the development South African government still has not managed to crack the problem of how to measure spatial change and integration in South African cities and towns SALGA initiated the development of a benchmark reporting on city spatial has transformation which become known as the Spatial to Barometer Transformation address this challenge In developing the City Spatial Benchmark Transformation Report, SALGA convened a reference group on 26 6HSWHPEHU7KHVSDWLDO wastransformation research also presented at the National Working Group (NWG) on Human Planning, Municipal Settlements and City Strategies on 29 November and 2018 15 2019 March 2018/19 Progress on Performance Progress on 2018/19 variancefor Reason • • • Status Achieved Performance Target 2018/19 2018/19 Output Annual Annual Output Benchmark Benchmark report on city transfor- spatial mation index developed by 31 2019 March Indicator Performance SALGA's SALGA's benchmark report on city transformation index was developed by 31 2019 March 2018/19 Output Output 2018/19 Conduct research research Conduct determine to appropriate indicators to measure spatial transfor-mation 31 March 2018 GOAL SUSTAINABLE 1: INCLUSIVE ECONOMIC GROWTH AND SPATIAL TRANSFORMATION Strategic Strategic SURƬOLQJ 2018/19 Annual Performance Plan 2018/19 Annual Performance Report (ƯFLHQW of management space and land municipalitiesin economic strategies economic DQGHƪHFWLYH/DQG Use Management approaches as drivers scale of economies of cohesion social and 21 regional support To No Strategic objectives Outcome Mandate Baseline 2017/18

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 Not applicable Not To thisTo end, a City Spatial Benchmark Transformation the with Report/Publication Transformation “Spatial title Barometer” has been GHYHORSHG7KHSXEOLFDWLRQ outlines a local government GHƬQLWLRQIRUVSDWLDO indicatorstransformation and that will be tracked over time and published bi-annually SpatialThe Transformation Barometer has been presented to the NWG on Municipal Planning, Human Settlements and City Strategies on 15 0DUFK7KH6SDWLDO Barometer Transformation supplementary provide will data and analysis for SALGA’s 0XQLFLSDO%DURPHWHU land generation The new (NGLUMS) management use introduces framework contemporary and novel to approaches and thinking current municipal spatial planning and land use management The NGLUMS was the basis for SPLUM capacity building in workshopsknowledge-sharing with municipalities and has been disseminated to municipalities 2018/19 Progress on Performance Progress on 2018/19 variancefor Reason • • • • Status Achieved Performance Target 2018/19 2018/19 Output Annual Annual Output New generation generation New land use management framework developed by 31 2019 March Indicator Performance 2018/19 Output Output 2018/19 Framework for generation new land use management developed by 31 2019 March Develop a for framework land release in prepared consultation sector with departments, DPW, especially RDLRNT, and DHS Marchby 31 2018 GOAL SUSTAINABLE 1: INCLUSIVE ECONOMIC GROWTH AND SPATIAL TRANSFORMATION Support and advice PERFORMANCE REPORT PERFORMANCE 2018/19 Annual Performance Plan 2018/19 Annual Performance Report PART D (ƯFLHQW of management space and land municipalitiesin economic strategies economic DQGHƪHFWLYH/DQG Use Management approaches as drivers scale of economies of and social cohesion 22 regional support To No Strategic objectives Outcome Mandate Baseline 2017/18

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 Not applicable Not Developed the economic economic the Developed for framework planning intermediary cities for use supporting for blueprint as a intermediary cities, and will be integrated with the IUDF intermediary support cities programme Developed Local Government position paper on the informal economy that provides a set of with LG principles for guiding respect to the informal sector that are aligned to the legal and frameworkpolicy There is a particular emphasis on maintaining law and order while and the same time constitutional the protecting businessesrights informal of operating in a given PXQLFLSDOLW\7KHSDSHUIXUWKHU approach cohesive a provides on how local government can establish better working relations with the informal sector 2018/19 Progress on Performance Progress on 2018/19 variancefor Reason • • • Status Achieved Performance Target 2018/19 2018/19 Output Annual Annual Output Land release for framework cities and towns developed by 31 2019 March Indicator Performance Framework for cities and towns developed by 31 2019 March 2018/19 Output Output 2018/19 Develop a for framework land release in prepared consultation sector with departments, DPW, especially RDLRNT, and DHS Marchby 31 2018 GOAL SUSTAINABLE 1: INCLUSIVE ECONOMIC GROWTH AND SPATIAL TRANSFORMATION Support and advice 2018/19 Annual Performance Plan 2018/19 Annual Performance Report (ƯFLHQW of management space and land municipalitiesin economic strategies economic DQGHƪHFWLYH/DQG Use Management approaches as drivers scale of economies of and social cohesion 23 regional support To No Strategic objectives Outcome Mandate Baseline 2017/18

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 Not applicable Not applicable Not ,QDQHƪRUWWRSDFNDJHWUDGH opportunities investment and for municipalities, a study was conducted together with UNISA to analyse the state of Trade and Investment in municipalities 7KHUHSRUWKDVEHHQƬQDOLVHG and shared with internal VWDNHKROGHUV7KHUHSRUW recommendations includes initiatives investment on and packages that will assist municipalities explore to investment opportunities and and economies their grow revenue 3UHVHQWHGUHSRUWƬQGLQJVDWWKH SALGA Council of Mayors as well as the Research colloquium A brochure on Trade and Investment facts was also developed for municipalities Developed indicators for measuring on performance Community Development and Social Cohesion with consultations Convened stakeholders various 2018/19 Progress on Performance Progress on 2018/19 variancefor Reason • • • • • • Status Achieved Achieved Performance Target 2018/19 2018/19 Output Annual Annual Output Packaged trade and investment opportunities for municipalities by March31 2019 Social Cohesion Cohesion Social /Community Development Indicators published by 31 2019 March Indicator Performance investment investment opportunities for municipalities packaged by 31 2019 March 2018/19 Output Output 2018/19 Indicators published on Social Cohesion/ Community by Development March31 2019 New Indicator Trade and Develop indicators to measure performance community on development cohesion social and reduction vulnerabilityto (measure-ment of access to servicesmunicipal vulnerable by groups and disaster risk reduction) by 31 2018 March GOAL SUSTAINABLE 1: INCLUSIVE ECONOMIC GROWTH AND SPATIAL TRANSFORMATION Strategic Strategic SURƬOLQJ Strategic Strategic SURƬOLQJ PERFORMANCE REPORT PERFORMANCE 2018/19 Annual Performance Plan 2018/19 Annual Performance Report PART D Improved local economic development through investment promotion 'HƬQHGLPSDFW community of development initiatives economic strategies economic DQGHƪHFWLYH/DQG Use Management approaches as drivers scale of economies of and social cohesion of Local Government Government Local of in community and development cohesion social 24 regional support To 25 strengthen To the role No Strategic objectives Outcome Mandate Baseline 2017/18

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 Rolled over to next ƬQDQFLDO\HDU •

SALGA conducted research on the state of compliance funeral undertaker of premises mortuary premises, and crematoriums to the regulations relating to the human of management UHPDLQV)XUWKHUD&HPHWHULHV framework was developed to serve as a guide for PXQLFLSDOLWLHV A Municipal Health Service wasBooklet also developed to guide municipalities on the provision of municipal health VHUYLFHV SALGA also convened engagements Department with of Health and South African Institute of Environmental Health (SAIEH) to inform the approach for the funding to contributed which model WKHƬQDOLVDWLRQRIWKHFRQFHSW QRWH7HUPVRI5HIHUHQFH SALGA convened the national health summit to discuss funding others the amongst model for municipal health VHUYLFH7KHVXPPLWUHVROYHG institutions academic that conduct to approached be the research on funding for PXQLFLSDOKHDOWKVHUYLFH 2018/19 Progress on Performance Progress on 2018/19 variancefor Reason • Status Performance Not achieved Target 2018/19 2018/19 Output Annual Annual Output Funding model model Funding municipal for serviceshealth Marchby 31 2019 Indicator Performance Funding model model Funding municipal for serviceshealth Marchby 31 2019 2018/19 Output Output 2018/19 Develop and a implement program of health on action (focusing on HIV/ AIDS, poverty eradication, safety security in and communities DQGWKHHƪHFWV of disaster to municipalities by 31 March 2018 GOAL SUSTAINABLE 1: INCLUSIVE ECONOMIC GROWTH AND SPATIAL TRANSFORMATION Strategic Strategic 3URƬOLQJ 2018/19 Annual Performance Plan 2018/19 Annual Performance Report Sustainable provision of healthmunicipal services of Local Government Government Local of in Community and Development Social Cohesion 26 strengthen To the role No Strategic objectives Outcome Mandate Baseline 2017/18

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 Not applicable Not applicable Not applicable Not Developed and circulated a municipalitiesquestionnaire to to evaluate the status of local HIV/ government's responses to AIDS, TB and STI Developed a status quo report based on municipal inputs Conducted a status quo assessment on the implementation of the White Paper on public safety and LG security in The assessment resulted in three position papers on the implementation framework of the White Papers on Public Safety and Security, Policy for the Establishment of a Single Police Service and Position on a 6LQJOH4XDOLƬFDWLRQIRU3ROLFLQJ NQF Level 6 Following engagements with stakeholder on disaster risk management, developed a position on funding arrangements disaster of risk management and placement of disaster risk management in municipalities 2018/19 Progress on Performance Progress on 2018/19 variancefor Reason • • • • • Status Achieved Achieved Achieved Performance Target 2018/19 2018/19 Output Annual Annual Output Local Government response report to HIV and AIDS, TB and STI by 31 2019 March Status report on implemen- the White tation of relating Papers to public safety and security in March byLG 31 2019 Funding framework for disaster by management March31 2019 Indicator Performance 2018/19 Output Output 2018/19 Local Government report on HIV and AIDS, TB and STI 31 by complied 2019 March Status report on implemen- the White tation of relating Papers to public safety security in and by complied LG March31 2019 Funding framework for disaster management developed by 31 March 2019 Develop and a implement programme of health on action (focusing on HIV/ AIDS, poverty eradication, safety security in and communities DQGWKHHƪHFWV of disaster to municipalities by 31 March 2018 Develop and a implement programme of health on action (focusing on HIV/ AIDS, poverty eradication, safety security in and communities DQGWKHHƪHFWV of disaster to municipalities by 31 March 2018 Develop and a implement programme of health on action (focusing on HIV/ AIDS, poverty eradication, safety security in and communities DQGWKHHƪHFWV of disaster to municipalities by 31 March 2018 GOAL SUSTAINABLE 1: INCLUSIVE ECONOMIC GROWTH AND SPATIAL TRANSFORMATION Strategic Strategic SURƬOLQJ Knowledge and information sharing Support and advice PERFORMANCE REPORT PERFORMANCE 2018/19 Annual Performance Plan 2018/19 Annual Performance Report PART D Sustainable provision of healthmunicipal services Improved safety security in and municipalities Improved safety security in and municipalities of Local Government Government Local of in community and development cohesion social of Local Government Government Local of in community and development cohesion social of Local Government Government Local of in community and development cohesion social 27 strengthen To the role 29 strengthen To the role 28 strengthen To the role No Strategic objectives Outcome Mandate Baseline 2017/18

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 Not applicable Not applicable Not : SALGA made inputs made SALGA SALGA in partnership : Developed a position Convened Annual Annual Convened Conducted an analysis Developed the 2019 Women: Commission Summit Women's issues gender mainstream of to LQORFDOJRYHUQPHQW'HYHORSHG programme of action for the Commission to implement in 2019/20 Youth: all councillors in young of participated and municipalities in Local Government Youth Development Forum (LGYDF), which informed SALGA's Youth Commission Terms RI5HIHUHQFH)DFLOLWDWHGD capacity programme building in the Free State on National Youth Policy 2015-2020 Children: with the Nelson Mandela Children's Fund and other stakeholders, participated in the formulation of the Manifesto Children's Disability: into the Department of Social Development's Policy of social development's services to persons with disabilities Sport: Sports Framework and conducted a sports facility audit for all the municipalities LQ*DXWHQJ&RQYHQHGWKH municipal games in KZN and EC provinces HeritageArts, and Culture Developed the Arts, Culture and Heritage toolkit for municipalities Libraries on the provision of library services 2018/19 Progress on Performance Progress on 2018/19 variancefor Reason • • • • • • • Status Achieved Achieved Performance Target 2018/19 2018/19 Output Annual Annual Output SALGA SALGA proposals on access and of inclusion vulnerable/ designated groups by 31 2019 March SALGA SALGA proposals sports,on UHFUHDWLRQDUWV culture and heritage by 31 2019 March Indicator Performance 2018/19 Output Output 2018/19 SALGA's proposals on access and of inclusion vulnerable/ designated groups developed by 31 2019 March SALGA's SALGA's proposals sports,on recreation, arts, culture and heritage developed by 31 2019 March Develop indicators to measure performance community on development cohesion social and reduction vulnerabilityto (measure-ment of access to servicesmunicipal vulnerable by groups and disaster risk reduction) by 31 2018 March Develop and a implement programme of health on action (focusing on HIV/ AIDS, poverty eradication, safety security in and communities DQGWKHHƪHFWV of disaster to municipalities by 31 March 2018 GOAL SUSTAINABLE 1: INCLUSIVE ECONOMIC GROWTH AND SPATIAL TRANSFORMATION Lobby, advocateLobby, and represent Lobby, advocateLobby, and represent 2018/19 Annual Performance Plan 2018/19 Annual Performance Report Vulnerable groups in mainstreamed municipalities Improved access to sports, recreation, arts, culture and heritage in municipalities of Local Government Government Local of in community and development cohesion social of Local Government Government Local of in community and development cohesion social 31 strengthen To the role 30 strengthen To the role No Strategic objectives Outcome Mandate Baseline 2017/18

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 GOAL 2: GOOD GOVERNANCE AND RESILIENT MUNICIPAL INSTITUTIONS

PURPOSE processes and related rules during a SALGA-facilitated event Investing in good governance and modernisation of WKDWLQFOXGHGDWRXURI3DUOLDPHQWLQ&DSH7RZQ government approaches, strengthening community interface PHFKDQLVPVVRXQGODERXUUHODWLRQVDQGSURIHVVLRQDOLVDWLRQ CONSEQUENCE AND ACCOUNTABILITY MANAGEMENT

STRATEGIC OBJECTIVES (SO) The 2017/18 Report by the Auditor-General (AG) indicated a 7R VWUHQJWKHQ RYHUVLJKW DQG DFFRXQWDELOLW\ IRU HƪHFWLYH UHJUHVVLRQLQWKHDXGLWRXWFRPHVLQVRPHPXQLFLSDOLWLHV7KH accountable and transparent leadership practices FDXVDOHƪHFWVZHUHLQGLFDWHGPDLQO\DVDODFNRIPXQLFLSDO To modernise governance systems and processes through council accountability and oversight and non-compliance with the use of digital technology and exploration of new PXQLFLSDOSROLFLHVDQGOHJLVODWLYHSUHVFULSWV models of interface with communities To foster sound and productive labour relations In response, SALGA cooperated with Provincial Treasury and 7RSURIHVVLRQDOLVHORFDOJRYHUQPHQW CoGTA to constitute and participate in multidisciplinary audit teams as part of the Municipal Audit Support Programme KEY CHALLENGES IN MUNICIPAL 0$63 7KHSDUWLFLSDWLRQLQFOXGHGDGGUHVVLQJWKHLGHQWLƬHG CAPABILITIES AND GOVERNANCE consequence and accountability issues in the AG’s • ,QHƪHFWLYHSROLWLFDODQGDGPLQLVWUDWLYHOHDGHUVKLS PDQDJHPHQWOHWWHUVDQGWUDLQLQJRISXEOLFRƯFHEHDUHUVDQG • :HDNHQHGRYHUVLJKWGXHWRSROLWLFDOLQƬJKWLQJDWFRXQFLO 0XQLFLSDO3XEOLF$FFRXQWV&RPPLWWHHV 03$& WRIXOƬOWKHLU level and interference in administration UHVSHFWLYHUROHVDQGUHVSRQVLELOLWLHV • Leadership inaction or consistent inaction related to transgressions 6$/*$ VSHFLƬFDOO\ DGYRFDWHG DQG OREELHG IRU WKH XUJHQW • Inadequate support by provincial and national role-players implementation of its Consequence and Accountability for municipalities Framework and submitted the framework to all its provincial • Instability of vacancies in key positions – lack of stability at structures, municipalities and provincial technical MuniMECs VHQLRUPDQDJHPHQWOHYHOVWKDWKDVDPSOLƬHGVLQFH IRUEX\LQDQGJUDGXDOLPSOHPHQWDWLRQ • Inadequate consequences for poor performance and transgression &RXQFLOORUVSXEOLFRƯFHEHDUHUVDQG3XEOLF$FFRXQWV • Shortage of skills for managing infrastructure life-cycle, Committee members were familiarised with the legislation including operations and maintenance that prescribes the roles and responsibilities of municipal • 3RRUO\GHƬQHGDQGVXERSWLPDORUJDQLVDWLRQDOVWUXFWXUHV OHDGHUVLQFOXGLQJWKHRYHUVLJKWVWUXFWXUHV:KLOHDGYRFDWLQJ in relation to the municipal mandates strongly for consequence and accountability management, • 8QVWDEOHODERXUUHODWLRQV SALGA also acknowledged the need to respect the roles and GOAL 2 PERFORMANCE UHVSRQVLELOLWLHVRIFULWLFDOUHVRXUFHVLQPXQLFLSDOLWLHV REPORT PERFORMANCE NARRATIVE INTERGOVERNMENTAL RELATIONS FORA

SO1: STRENGTHEN OVERSIGHT 6WUHQJWKHQLQJRYHUVLJKWDQGDFFRXQWDELOLW\IRUHƪHFWLYHDQG PART D AND ACCOUNTABILITY FOR transparent leadership is a strategic objective in SALGA’s $QQXDO3HUIRUPDQFH3ODQ,WLVDOVRDNH\GHOLYHUDEOHLQ6$/*$oV EFFECTIVE, ACCOUNTABLE AND Governance and Inter-Governmental Relations (GIGR) TRANSPARENT LEADERSHIP annual target of supporting municipalities in governance and PRACTICES LQWHUJRYHUQPHQWDOUHODWLRQV

,QDQHƪRUWWRVWUHQJWKHQRYHUVLJKW6$/*$oVSDUWWLPH 6$/*$HƪRUWVLQWKLVUHJDUGKDYHKRZHYHUEHHQFKDOOHQJHG representatives at the National Council of Provinces (NCoP) at provincial level by, inter alia, not implementing provincial IGR and Provincial Legislatures were inducted in parliamentary Forum decisions, fragmented and uncoordinated reporting at

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 ,*5)RUXPVLQHƪHFWLYHDJHQGDVHWWLQJIRU,*5)RUXPPHHWLQJV As regards oversight, SALGA participated in the EU-funded that resulted in non-attendance by decision-makers and a lack training for Audit Committees and trained the Ngwathe LM of reporting on decisions taken at the Premier’s Coordinating 03$&FRXQFLOORUVWRSUHSDUHDQQXDOƬQDQFLDOVWDWHPHQWVDQG )RUXP 3&) DQG0XQL0(&DQG7HFKQLFDO0XQL0(&PHHWLQJV RYHUVLJKWUHSRUWVDQGPDQDJHDFFRXQWDELOLW\

In response, SALGA developed and circulated an Through SALGA’s councillor welfare and support mandate, Intergovernmental Relations Strategy to all provincial PXQLFLSDOLWLHVEHQHƬWWHGIURPVXSSRUWIRUSXEOLFSDUWLFLSDWLRQ structures and municipalities for implementation by the in municipal governance matters, capacity-building, security UHVSHFWLYHPXQLFLSDOFRXQFLOV6$/*$DOVRGLVFXVVHG IRUWKH0D\RUDQG6SHDNHUDQG6$65,$FRYHUOLPLWV6$/*$oV the challenges with CoGTA and presented its case in the participation in special council sittings at the Xhariep DM 7HFKQLFDODQG3ROLWLFDO0XQL0(&V6LQFHWKHPDLQREMHFWLYHV and Letsemeng LM, respectively, helped to resolve the of the IGR Fora are to coordinate and integrate planning and implementation of upper limits and created an opportunity implementation and encourage improved intergovernmental to present its smart mobile application, aimed at protecting relations between government, SOEs and SALGA, the FRXQFLOORUV DQG RƯFLDOV IURP KDUP DQG LQWLPLGDWLRQ WR WKH Association’s strategy has improved coordination and created /HWVHPHQJ/0DVDSLORWVLWHIRUWKHDSSOLFDWLRQ DFRKHUHQWDSSURDFKDPRQJPXQLFLSDOLWLHVLQWKH3URYLQFH THE SOUTH AFRICAN CONSTITUTION TRAINING COUNCILLORS AND AGSA TRAINEE SECTION 139 INVOCATIONS AUDITORS During the year under review, the invocation of Section 139 6$/*$DOVRIRXQGWKDWFRXQFLOORUVGRQRWIXOƬOWKHLURYHUVLJKW of the Constitution placed the Walter Sisulu, Enoch Mgijima UHVSRQVLELOLW\HƪHFWLYHO\GXHWRDODFNRIFDSDFLW\ and Great Kei municipalities in the Eastern Cape under administration due to serious political and administrative In response, SALGA facilitated training for councillors in FKDOOHQJHV,QVRPHRWKHUPXQLFLSDOLWLHVFKDQJHVLQSROLWLFDO their oversight responsibilities and the preparation of annual OHDGHUVKLSGLUHFWO\RULQGLUHFWO\DƪHFWHGFRQWLQXLW\DQGVHUYLFH ƬQDQFLDO VWDWHPHQWV DQG VXSSO\ FKDLQ PDQDJHPHQW 7KH GHOLYHU\ WUDLQLQJZDVGHYHORSHGIRUƬQDQFHFRXQFLOORUVDQGPHPEHUV of the Municipal Public Accounts Committees (MPAC), Prior to the invocation, SALGA had advocated at the Provincial VSHFLƬFDOO\WKRVHLQ(DVWHUQ&DSHPXQLFLSDOLWLHVDOORIZKRP Technical and Political MuniMEC for the implementation of the EHQHƬWWHGIURPWKHWUDLQLQJ 0XQLFLSDO 6XSSRUW DQG ,QWHUYHQWLRQ )UDPHZRUN 6LQFH WKHQ SALGA has participated in the Provincial Steering Committees Complaints from municipalities that trainee auditors asked formed by the Eastern Cape CoGTA MEC to provide ongoing senior managers unnecessary questions prompted SALGA VXSSRUWWRWKHDƪHFWHGPXQLFLSDOLWLHV to convene an introductory training session to provide information on local government, legislation governing 6$/*$oV OHDGHUVKLS YLVLWHG WKH DƪHFWHG PXQLFLSDOLWLHV WR local government, functions of a municipality and municipal DVVHVV WKHLU SURJUHVV VLQFH WKH DSSOLFDWLRQ RI 6HFWLRQ VRXUFHVRIƬQDQFHWRWUDLQHHDXGLWRUV Despite the persistence of some of the challenges, SALGA’s support is yielding good results, with emerging signs of MUNICIPAL GOVERNANCE AND OVERSIGHT DGPLQLVWUDWLYH DQG SROLWLFDO VWDELOLW\ 6RPH FRPPXQLWLHV DUH DOUHDG\EHQHƬWWLQJIURPUHFHLYLQJEDVLFVHUYLFHVGHVSLWHWKH Wide ranging concerns about the 2017 Upper Limits Notice ƬQDQFLDOFRQVWUDLQWVRIWKHVHPXQLFLSDOLWLHV resulted in the SALGA Presidency recommending the removal of the “but excludes tertiary education” phrase in the capacity SALGA’s inclusion in the Eastern Cape Steering Committee building provisions of the Upper Limits Notice to the CoGTA LVDVLJQLƬFDQWPLOHVWRQHIRUWKHVHFWRURYHUDOODQGPRUH Minister, as well as the need to develop regulations and/or VSHFLƬFDOO\ WKH SURYLQFH DQG LWV DƪHFWHG PXQLFLSDOLWLHV LQ guidelines to unify the MEC concurrence process across all SDUWLFXODU SURYLQFHV6$/*$DOVRSURYLGHGWKH5HPXQHUDWLRQ&RPPLVVLRQ ZLWKDIRUPDOVXEPLVVLRQLQWKLVUHJDUG

Following feedback by the Human Sciences Research Council (HSRC) on research into damage to property, intimidation, threats, harm to and the killing of councillors and senior PXQLFLSDORƯFLDOV6$/*$LQYLWHGDOOPXQLFLSDOLWLHVWR participate in a survey on threats or violence experienced in ORFDOJRYHUQPHQW

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 SO2: MODERNISE GOVERNANCE SO3: FOSTER SOUND AND SYSTEMS AND PROCESSES PRODUCTIVE LABOUR THROUGH THE USE OF RELATIONS DIGITAL TECHNOLOGY AND COLLECTIVE BARGAINING AND LABOUR THE EXPLORATION OF NEW RELATIONS MODELS OF INTERFACING WITH COMMUNITIES The 2019 collective salary and wage agreement negotiations at the Bargaining Council were challenging and resulted in SUPPORT TO MUNICIPALITIES ON USDG D FHUWLƬFDWH RI QRQUHVROXWLRQ ZKHQ RQH RI WKH %DUJDLQLQJ SPENDING &RXQFLOSDUWLHVGLGQRWDFFHSWWKHIDFLOLWDWRUoVSURSRVDO

Support to metros to improve their Urban Settlement SALGA prospect of no salary adjustments for municipal Development Grant (USDG) spending entailed a workshop HPSOR\HHVDWWKHVWDUWRIWKHQHZƬQDQFLDO\HDUZRXOGKDYH to share information on setting framework agreements to UHVXOWHGLQDQXQVWDEOHODERXUHQYLURQPHQW accelerate supply-chain management (SCM) processes for LQIUDVWUXFWXUHSURMHFWV7KHZRUNVKRSFUHDWHGDSODWIRUPIRU SALGA convened successful mandate-seeking sessions across metros to consult about the proposed changes to the USDG DOO SURYLQFHV WR DFFHSW WKH SURSRVDO 7KLV HQDEOHG 6$/*$oV *UDQW)UDPHZRUNIRUWKHƬQDQFLDO\HDULQFOXGLQJWKH National Executive Committee to endorse the proposal at SURSRVHGQHZ+6JUDQWVIRUWKHQH[WEXGJHW its meeting in May 2018 as in the best interest of the local JRYHUQPHQWVHFWRU

The proposal concluded a multiyear (2018-2021) salary and wage agreement for the sector, secured workforce peace and stability for the next three years and assisted municipalities to DFKLHYHWKHLUPHGLXPWHUPEXGJHWREMHFWLYHV7KLVEHQHƬWWHG PXQLFLSDOHPSOR\HHVDQGOHDGHUVKLSLQORFDOJRYHUQPHQW

MUNICIPAL EMPLOYEE RELATIONS

SALGA supported and represented 465 municipalities in local government Bargaining Council disputes, conciliations, arbitrations and disciplinary hearings in UHVSRQVHWRLQVXƯFLHQW capacity to deal with internal legal disputes and the resulting FRVWLPSOLFDWLRQV

Table 2 SALGA’s representation in conciliations, arbitrations and disciplinary hearings in 2018/19

Province Disciplinary hearings Conciliations Arbitrations Eastern Cape 5 -- Free State 4-4 Gauteng - - 3 REPORT PERFORMANCE Kwa-Zulu/Natal - 115 97 Limpopo 637

Mpumalanga 20 - 17 PART D Northern Cape 18718 North West 247 Western Cape 24 8 96 Total 79 137 249

SALGA also developed a Case Law Journal as an easy reference to guide municipalities through arbitrations and labour court case UXOLQJV

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 LABOUR RELATIONS, COLLECTIVE SALGA also convened sessions with municipal representatives BARGAINING AND EMPLOYER RELATIONS IURP WKH 8PJXQJXQGORYX 8P]LQ\DWKL $PDMXED 8PNKDQ\DNXGH 0VXQGX]L /DG\VPLWK $OIUHG 'XPD %LJ 'XULQJ WKH SDVW \HDU 6$/*$ LGHQWLƬHG D JURZLQJ WHQGHQF\ )LYH +ODELVD 8P]LZDEDQWX ,QGDND 'LSDOLVHQJ X0NKRQGR within municipalities to enter into agreements through Local Emalahleni, Mnquma, DJS Moroka and Mbombela /DERXU )RUD //) 7KHVH DJUHHPHQWV XVXDOO\ FRQWUDYHQHG municipalities to help with the roll out of their HCM&D collective agreements and, in some instances, resulted in VWUDWHJLHV6L[WHHQPXQLFLSDOLWLHVEHQHƬWWHGGLUHFWO\DQGIURP ODERXUXQUHVW WKLVVXSSRUW

,QUHVSRQVHPXQLFLSDORƯFLDOV SURVHFXWLQJDQGSUHVLGLQJ In addition, SALGA created a knowledge-sharing platform to ZHUHWUDLQHGWRSDUWLFLSDWHHƪHFWLYHO\LQGLVFLSOLQDU\KHDULQJV discuss municipal recruitment, the implementation of senior WRPLWLJDWHODERXUDFWLRQ6$/*$FROODERUDWHGZLWKWKH6RXWK management level regulation and application of the Upper African Local Government Bargaining Council (SALGBC) to Limits Notice in remuneration packages with the CoGTA Select conduct workshops for Eastern Cape municipalities to revive &RPPLWWHH RQ $SSURSULDWLRQV 7KH GLVFXVVLRQV LQFOXGHG DQ G\VIXQFWLRQDO //)V DQG IDFLOLWDWHG //) WUDLQLQJ DQG EULHƬQJ update on Back-to-Basics (B2B) progress, municipal support sessions for the Sundays River Valley municipality, Amathole DQG0XQLFLSDO,QIUDVWUXFWXUH*UDQW 0,* SHUIRUPDQFH District Local Labour Forum and municipalities in the Free 6WDWH Other knowledge-sharing sessions with a range of VWDNHKROGHUV LQFOXGLQJ PXQLFLSDOLWLHV DQG WKH 2ƯFH RI WKH 7KH (DVWHUQ &DSH DQG )UHH 6WDWH PXQLFLSDOLWLHV EHQHƬWWHG Premier in the Free Sate, focused on HCM&D governance, IURP WKHVH VHVVLRQV ZLWK DQ XQGHUVWDQGLQJ RI WKH GLƪHUHQW transversal issues and disability mainstreaming under the local, provincial and central bargaining levels, which will help (PSOR\PHQW(TXLW\$FW)UDPHZRUN to mitigate industrial action by municipal employees and LPSURYHVHUYLFHGHOLYHU\WRWKHFRPPXQLWLHVWKH\VHUYH Municipal representatives from the Central Karoo and Beaufort West, Cederberg and Bergrivier, West Coast, Stellenbosch, SALGA also represented the Matjhabeng Local Municipality in Cape Agulhas, Amajuba District, Umgungundlovu DM, an arbitration hearing on Organisational Rights Establishment 8PNKDQ\DNXGH8P]LQ\DWKL$OIUHG'XPD5D\1NRQ\HQL/0 in response to an application in this regard from the Municipal %LJ+ODELVD0VXQGX]LDQG8PX]LZDEDQWXDWWHQGHGD6$/*$ $OOLHGDQG7UDGH8QLRQVRI6RXWK$IULFD 0$786$ training session to implement the Services and Behaviour &KDUWHU SO4: PROFESSIONALISE LOCAL GOVERNMENT CAPACITY BUILDING THROUGH THE SCLG SALGA Centre for Leadership and Governance (SCLG) and EMPLOYMENT OF SENIOR MANAGERS training programmes A skilled and capable workforce is central to local government 0XQLFLSDOLWLHVZKRGRQRWIROORZWKHJD]HWWHGSURFHVVZKHQ IXOƬOOLQJ LWV PDQGDWH DQG HQDFWLQJ LWV GHYHORSPHQWDO YLVLRQ recruiting, interviewing and appointing senior managers risk SALGA plays a critical transformation role in this regard and OLWLJDWLRQ ,Q SXUVXLW RI LWV FRPPLWPHQW WR SURIHVVLRQDOLVH acts as the national employer body representative within the human capital (HC) development in local government, SALGA VHFWRU DVVLVWHGƬYHPXQLFLSDOLWLHVWRUHFUXLWDQGVHOHFWLQFXPEHQWV correctly with advice about correct procedures, expediting This entails continuously formulating and implementing recruitment processes and, where necessary, re-advertising a range of interventions to build municipal capacity that SRVLWLRQVWRDYRLGOLWLJDWLRQ FDQ UHVSRQG DGHTXDWHO\ WR VHFWRU FKDOOHQJHV ,QWHUYHQWLRQV range from facilitated leadership conversations to executive Further support entailed assessing the municipal HC system coaching, training sessions and blended learning programmes according to the 12 municipal HC value chain elements WKURXJKWKH6&/* DGRSWHG 7KHUHVXOWVLQGLFDWHGFOHDUO\WKDWWKH majority of municipalities still function at a transactional The SCLG builds capacity through core programmes, UDWKHU WKDQ GHYHORSPHQWDO OHYHO ,Q UHVSRQVH DQG DOLJQHG continuous development programmes and products and with the Human Capital Management and Development VHUYLFHV These training interventions and Councillor (HCM&D) blueprint, SALGA initiated Municipal Human Capital Development Macro Learning Pathway are aligned with the 'HYHORSPHQWDO3URƬOLQJ 0+&'3 WRUHSRVLWLRQWKLVIXQFWLRQ ƬYH\HDUWHUPVRIPXQLFLSDOFRXQFLOV and assist municipalities to achieve related developmental and VHUYLFHGHOLYHU\JRDOV

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 Table 3 SCLG capacity building programmes, products, services and seminars

Core programmes Continuous programmes Products and services • Integrated Councillor Induction • Local Labour Forum Training for • Leadership Competency Model • Leadership in Municipal Governance Employer Representatives Online Assessment Tool • Media and Stakeholder Engagement • Performance Management Training • Municipal Leadership Competency • Women in Leadership Development • Job Task Evaluation Training Assessment Centre • Senior Manager Induction • Back-to-Basics Leadership • Online Communities of Practice • Facilitator Accreditation Development • e-Learning Services • Local Links Annual Local Government Seminars • Employment/Labour Law • Performance Management • Human Capital Best Practice

During the reporting period, SALGA marketed the SCLG capacity building programmes for political and administrative leaders across a number of platforms, including the Eastern Cape Human Capital Practitioners Forum, Local Government Sector (GXFDWLRQ7UDLQLQJ$XWKRULW\ /*6(7$ ,QWHU3URYLQFLDO6NLOOV'HYHORSPHQW)RUXPDQG(DVWHUQ&DSH3URYLQFLDO:RUNLQJ*URXS

0XQLFLSDOLWLHVDOLJQFDSDFLW\EXLOGLQJZLWKWKHLU:RUNSODFH6NLOOV3ODQV :63V ZKLFKWKH\VXEPLWWRWKH/*6(7$7KH:63VLQIRUP D6HFWRU6NLOOV3ODQ 633 WRLPSURYHFDSDFLW\DQGVHUYLFHGHOLYHU\ZLWKLQORFDOJRYHUQPHQW

6$/*$IDFLOLWDWHGDQXPEHURIDFFUHGLWHGDQGQRQDFFUHGLWHGFDSDFLW\EXLOGLQJLQLWLDWLYHVIRUFRXQFLOORUVDQGPXQLFLSDORƯFLDOV DQGDFDSDFLW\EXLOGLQJLQWHUYHQWLRQDWWKH%XƪDOR0HWURSROLWDQ0XQLFLSDOLW\IRUQLQHFRXQFLOORUVZKRVHUYHDWWKH0XQLFLSDO 3XEOLF$FFRXQWV 03$& OHYHO

7DEOH6$/*$oVFDSDFLW\EXLOGLQJLQLWLDWLYHVGXULQJWKHƬQDQFLDO\HDU

Accredited/ Programme &RXQFLOORUV2ƯFLDOV Total Not Accredited Integrated Councillor Induction Programme (ICIP): Councillors Accredited 1 738 Credit Bearing Phase 2 Leadership in Municipal Governance Programme (LMG) &RXQFLOORUVDQGRƯFLDOV Accredited 128

Municipal Leaders Media and Stakeholder Engagement Councillors Accredited 697 Programme (MSEP) Annual LG Performance Management Seminar &RXQFLOORUVDQGRƯFLDOV SABPP accredited 424 (15 CPD Points) Annual LG Labour Law Seminar &RXQFLOORUVDQGRƯFLDOV SABPP accredited 373 (15 CPD Points) Local Links Leadership Conversations (LLLC) &RXQFLOORUVDQGRƯFLDOV Not Accredited 194 REPORT PERFORMANCE ICIP Portfolio Based Inductions Programme Councillors Not Accredited 183 Inaugural Annual LG Human Resource Management &RXQFLOORUVDQGRƯFLDOV Not Accredited 189 Best Practices Seminar PART D Senior Managers Induction Programme (SMIP) 2ƯFLDOV Not Accredited 53 7RWDOQXPEHURIFRXQFLOORUVRƯFLDOVWUDLQHG 3 379

MUNICIPAL PERFORMANCE MANAGEMENT SUPPORT (PMS)

7KHODFNRIFDSDFLW\LQPXQLFLSDOLWLHVPDNHVLWGLƯFXOWWRLPSOHPHQWDQGFDVFDGHSHUIRUPDQFHPDQDJHPHQW6$/*$DVVLVWHGD QXPEHURIPXQLFLSDOLWLHVWRƬOOWKLVJDSLQFOXGLQJKHOSLQJWKH1\DQGHQL/0WRFRQGXFWƬQDOIRUPDOSHUIRUPDQFHDVVHVVPHQWVRI VHQLRUPDQDJHUVDQGUHYLHZWKH3HUIRUPDQFH0DQDJHPHQW3ROLF\

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 Other municipalities involved were the Xhariep DM and the collaborated with DHS to present the workshop, attended Masilonyana, Letsemeng, Mohokare, Emalahleni, Siyancuma, by councillors, as well as the Mayor and Speaker of Council, Umsobomvu, Emthanjeni, Dikgatlong Ubuntu, Phokwane, that focused on equipping councillors to deal with low-cost Ditsobotla, Mamusa, JB Marks, Prince Albert, Oudtshoorn, KRXVLQJLVVXHV :LW]HQEHUJ0DPXVDDQG%H\HUV1DXGH/0VDVZHOODVWKH SURYLQFLDOVWUXFWXUHVLQ*DXWHQJ 306,QGDED .ZD]XOX1DWDO MUNICIPAL TRAINING SERVICES 1RUWKHUQ&DSHDQGWKH)UHH6WDWH SALGA provided hands-on support to the Mantsopa, Maluti A INTEGRATED INDUCTION, ROLES AND 3KRIXQJDQG7RNRORJR/0VWRVHWZDWHUWDULƪVDQGVXSSRUWHG RESPONSIBILITIES the Phumelela and Masilonyana LMs to develop water and VDQLWDWLRQE\ODZV,QDGGLWLRQ6$/*$VXSSRUWHGDOO)UHH New councillors who entered local government after the State municipalities to update indigent registers through a 2016 elections and needed induction training participated SURYLQFLDOZRUNVKRSLQ the second Integrated Councillor Induction Programme (ICIP) UROORXWGXULQJWKHƬQDQFLDO\HDUZKLFKLQFOXGHGDOO Free State municipalities, the eThekwini Metro and RXWVWDQGLQJDQGQHZWUDLQLQJ UHSUHVHQWDWLYHVIURPLWV)UHH6WDWHRƯFHDOVREHQHƬWWHGIURP DNQRZOHGJHVKDULQJZRUNVKRSRQZDWHUWUDGLQJEHQFKPDUNV 7KH ƬUVW SRUWIROLREDVHG LQGXFWLRQ VHVVLRQV IRU UROHV DQG Additional benchmarking workshops on waste hierarchy UHVSRQVLELOLWLHV ZHUH FRQFOXGHGLQWKHƬQDQFLDO LQFOXGHGWKH0DWMKDEHQJ/0DQG)H]LOH'DEL'0LQWKH)UHH \HDU6$/*$LVFXUUHQWO\DWWHQGLQJWRDGKRFUHTXHVWVRQO\LQ 6WDWHDQGWKH)H]LOH'DEL'0DQGLWVORFDOPXQLFLSDOLWLHVLQWKH addition to its normal responsive training to address internal )H]LOH'DELGLVWULFWZKLOH6$/*$VXSSRUWHGWKHGHYHORSPHQW PXQLFLSDOFKDOOHQJHV of waste management by-laws for the Ngwathe, Tokologo, 0DQWVRSD/HWVHPHQJDQG3KXPHOHOD/0V Training in Limpopo included delegates in the Sekhukhune (12), :DWHUEHUJ 9KHPEH DQG7KDED]LPEL GLVWULFWVDV SALGA’s support to municipalities in electricity and energy well as at the Port St Johns Local Municipality (34) in the Eastern included a bulk water and electricity debt resolution round &DSHDQG7KDER0RIXWVDQ\DQD'LVWULFW LQWKH)UHH6WDWH WDEOHWRLQYHVWLJDWHVROXWLRQVWKURXJKFRVWHƪHFWLYHWDULƪ 2YHUDOOFRXQFLOORUVEHQHƬWWHGIURPWUDLQLQJWKURXJKWKLV setting and enhanced revenue and participated in the Mafube 6$/*$LQLWLDWLYH PXQLFLSDOLW\(VNRPHQJDJHPHQWWRUHVROYHHOHFWULFLW\GHEW

INSTITUTIONAL CAPACITY BUILDING AND SALGA also assisted the Moqhaka LM to develop a medium- to HUMAN SETTLEMENT POLICIES long-term infrastructure investment framework to consolidate PXQLFLSDO QHHGV LGHQWLI\ ƬQDQFLQJ RSWLRQV DQG GHWHUPLQH SALGA participated actively in the appointment of competent infrastructure investment impact on the municipality’s senior municipal managers to counteract public perceptions ƬQDQFLDOYLDELOLW\ DERXWLQFRPSHWHQFHSDUWLFXODUO\DW&)2OHYHO7KLVUHVXOWHGLQ LPSURYHGDXGLWRXWFRPHVDQGEHWWHUVHUYLFHGHOLYHU\ Further assistance included partnering with the Provincial Disaster Management Centre and Fire Protection Association SALGA responded to a request from the Ndlambe Local )3$ LQƬUHVHUYLFHFDSDFLW\EXLOGLQJZRUNVKRSV*URXSVRI Municipality to train ward councillors in human settlement ƬUHƬJKWHUVLQDOOPXQLFLSDOLWLHVZHUHWUDLQHGLQƬUHULVN policies to deal with pressure from conveyancing lawyers DVVHVVPHQW,&7V\VWHPVDQGSXEOLFVDIHW\ UHJDUGLQJWKHVDOHRIORZFRVWKRXVHVE\EHQHƬFLDULHV6$/*$

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 Not applicableNot applicableNot applicableNot SALGA developed the and Consequence Accountability Framework which was also consulted in all provinces as well as at the SALGA National Members Assembly Grand Political Debate session held on 11 'HFHPEHU The framework was endorsed by the Councillor Welfare and Governance Empowerment, and IGR WG held March on 12 SALGA developed the Integrity Framework Management which was also consulted in all SURYLQFHV The framework was further endorsed by the Councillor Welfare and Empowerment, Governance and IGR NWG held RQ1RYHPEHU assessment an Conducted RI6$/*$ VLQƮXHQFHLQ,*5 processes and presented the assessment report to the NEC on 5 February 2019 The report was endorsed by the Welfare and Empowerment, Governance and IGR NWG on March12 2019 2018/19 Progress on Performance Progress on 2018/19 variancefor Reason • • • • • • status status Achieved Achieved Achieved Performance Outputs Outputs 2018/19 2018/19 Annual Target Annual Accountability and consequences framework developed by March31 2019 Approved Approved integrity management framework by March31 2019 impact Annual assessment reports on the level of SALGA's LQƮXHQFHLQ,*5 processes by 31 2019 March Output Output 2018/19 2018/19 Indicator Performance accountability and consequences developed by March31 2019 Approved Approved framework for integrity management developed by March31 2019 assessment reports on the level of SALGA's LQƮXHQFHLQ IGR processes 31 by complied 2019 March New Indicator Framework for Conduct an an Conduct assessment integrity of commissioner RƯFHVHVWDEOLVKHG municipalitiesin Marchby 31 2018 New Indicator Annual impact Support and advice Support and advice Strategic SURƬOLQJ PERFORMANCE REPORT PERFORMANCE 2018/18 Annual Performance Plan 2018/19 Annual Performance Report PART D Oversight and accountability strengthened Restored public image of the local sector government Local government empowered by HƪHFWLYHUHJXODWRU\ environment to deliver on its mandate oversight and accountability for HƪHFWLYHDFFRXQWDEOH transparent and leadership practices oversight and accountability for HƪHFWLYHDFFRXQWDEOH transparent and leadership practices oversight and accountability for HƪHFWLYHDFFRXQWDEOH transparent and leadership practices 32 strengthen To 33 strengthen To 34 strengthen To No Strategic objectives Outcome Mandate baseline 2017/18 GOAL 2: GOOD GOVERNANCE AND RESILIENT MUNICIPAL INSTITUTIONS MUNICIPAL RESILIENT AND GOVERNANCE GOOD 2: GOAL PERFORMANCE AGAINST PREDETERMINED OBJECTIVES PREDETERMINED AGAINST PERFORMANCE

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 Not applicableNot applicableNot Developed a MSIF in previous years that guides SALGA's VXSSRUWWRPXQLFLSDOLWLHV The focus during the past year was on interventions in under invocated municipalities Section of the 139 Constitution Convened a workshop with to municipalities those establish the extent of the situation and the need for SALGA support Launched the Municipal Audit Support Programme (MASP) within 2014 a focus on red- ]RQHGPXQLFLSDOLWLHVLQWKH$* Audit Report and supported 40 municipalities of which 28 were LQWKHUHG]RQH of editions three Developed the Accountability and MASP publicationsBulletin that focused on demarcations, ƬQDQFLDOKHDOWKDQG infrastructure as catalysts for delivery service Trained AGSA trainees in all provinces to provide them with a better understanding of the environment audit municipal and assist municipalities to understand information what auditors require and how an audit is conducted 2018/19 Progress on Performance Progress on 2018/19 variancefor Reason • • • • • status status Achieved Achieved Performance Outputs Outputs 2018/19 2018/19 Annual Target Annual Municipal Municipal and support interventions framework implemented Marchby 31 2019 Municipal Municipal support audit programme implemented Marchby 31 2019 Output Output 2018/19 2018/19 Indicator Performance for municipal for and support interventions implemented Marchby 31 2019 Implement Implement municipal the support audit programme selected to municipalities, as per the AG Audit Report by March31 2018 New Indicator Framework Implement Implement the Municipal Audit Support Programme selected to municipalities, as per the AG Audit Report by 31 March 2018 Support and advice Support and advice 2018/18 Annual Performance Plan 2018/19 Annual Performance Report Better collaboration on section and 154 support other Municipalities in in Municipalities the Red Zone are HUDGLFDWHGWRE\ 2021 oversight and accountability for HƪHFWLYHDFFRXQWDEOH transparent and leadership practices oversight and accountability for HƪHFWLYHDFFRXQWDEOH transparent and leadership practices 35 strengthen To 36 strengthen To No Strategic objectives Outcome Mandate baseline 2017/18 GOAL 2: GOOD GOVERNANCE AND RESILIENT MUNICIPAL INSTITUTIONS MUNICIPAL RESILIENT AND GOVERNANCE GOOD 2: GOAL

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 Not applicableNot applicable Not SALGA Devolution Strategy used to lobby for the devolution of powers and functions at the EXCO meeting held between SALGA and CoGTA Telecommunications of and Postal Services and municipalities ICT on devolution 1 November on the 2018 unassigned high-frequency spectrum Parliament subsequent to the Electronic workshop the on Communications Amendment Bill CoGTA Minister on 8 May and2018 5 July to 2018 discuss concerns about the 15 December Upper 2017 Limits Notice Minister included: $PHQGWKHFXUUHQWSURYLVLRQV capacity the on in building Upper Limits Notice by removing the reference to “but tertiary excludes education” +DUPRQLVHWKH0(& process across concurrence all provinces by developing guidelines regulations and/or Remuneration the to Commission 2018/19 Progress on Performance Progress on 2018/19 variancefor Reason • Conducted a review of the • Engaged with the Department • Convened a workshop on • Delivered a submission to • SALGA Presidency met with • Recommendations to the • Submitted a formal submission status status Achieved Achieved Performance Outputs Outputs 2018/19 2018/19 Annual Target Annual Devolution of of Devolution powers and functions 31 by lobbied March 2019 Reforms for councillor and support welfare to equity ensure Marchby 31 2019 Output Output 2018/19 2018/19 Indicator Performance Devolution of of Devolution powers and functions 31 by lobbied 2019 March Reforms for councillor and support welfare to equity ensure Marchby 31 2019 Lobby issues related to welfare councillor and support to CoGTA and the Independent Commission for Remuneration the RI3XEOLF2ƯFH Bearers by 31 0DUFK SALGA to lobby and advocate for the devolution relevant the of powers and functions for the the pursuing of local government developmen-tal agenda by 31 2018 March Lobby, advocateLobby, and represent Lobby, advocateLobby, and represent PERFORMANCE REPORT PERFORMANCE 2018/18 Annual Performance Plan 2018/19 Annual Performance Report housing, ICT, ICT, housing, water, roads, environment Decentralisation is defended and extended in a GLƪHUHQWLDWHG cater to manner for nuances in following the functions: • • • • 1) PART D More equitable support and welfare IRUDOOSXEOLFRƯFH bearers oversight and accountability for HƪHFWLYHDFFRXQWDEOH transparent and leadership practices oversight and accountability for HƪHFWLYHDFFRXQWDEOH transparent and leadership practices 37 strengthen To 38 strengthen To No Strategic objectives Outcome Mandate baseline 2017/18 GOAL 2: GOOD GOVERNANCE AND RESILIENT MUNICIPAL INSTITUTIONS MUNICIPAL RESILIENT AND GOVERNANCE GOOD 2: GOAL

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 Not applicableNot Not applicableNot Salary and Wage Collective municipal Agreement for workers following negotiations with unions municipal circulars through circulated and municipalitiesto Framework to share the vision city transformation and on characteristics of a Smart City clear provides that nation-wide guidance to South African municipalities for the adoption, implementation and utilisation of smart and digital futures Department the of at and Telecommunications Postal Services and Provincial IT Managers Forum in KZN and EC participation assessment tool mechanisms and innovation smart technologies to enhance governance inclusive • Concluded a three-year • Agreement signed by all parties 2018/19 Progress on Performance Progress on 2018/19 variancefor Reason • Developed a Smart Cities • Lobbied the framework • Developed a public • Convened two dialogues on status status Achieved Achieved Performance Outputs Outputs 2018/19 2018/19 Annual Target Annual A multi-year A salary and collective wage agreement in local government by concluded 2018 June Innovative Innovative mechanisms smart and technologies enhance to inclusive governance and public participation by March31 2019 Output Output 2018/19 2018/19 Indicator Performance Conclude a a Conclude multi-year salary and collective wage agreement in local government by 2018 June mechanisms smart and technologies to enhance inclusive governance and public participation by March31 2019 SALGA multi- SALGA Bargainingyear Strategy by 31 2018 March New Indicator Innovative Employer body Develop the Support and advice 2018/18 Annual Performance Plan 2018/19 Annual Performance Report Labour peace Labour peace and stability in municipalities Better management management Better municipal of community interface reducing thus community protests productive labour labour productive relations governance systems and processes through the use of digital technology and exploration new of interface models of with communities 39 Modernise To 40 foster To sound and No Strategic objectives Outcome Mandate baseline 2017/18 GOAL 2: GOOD GOVERNANCE AND RESILIENT MUNICIPAL INSTITUTIONS MUNICIPAL RESILIENT AND GOVERNANCE GOOD 2: GOAL

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 Not applicable Not Annual Annual nd on later-related matters later-related on disciplinary(79 hearings, conciliations126 and 249 arbitrations) in the period under review Local Government Labour Law Seminar, attended by in delegates municipal 373 Gauteng on 5-6 March 2019, to provide labour relations practitioners with an in- depth and comprehensive analysis of the legislative and jurisprudential amendments to Labour Law and discuss the importance of Local Labour Law Forums, the future of the workplace and practical Disciplinary the of experiences Collective Procedure and Code Agreement 2018/19 Progress on Performance Progress on 2018/19 variancefor Reason • Represented 454 cases • Convened the 2 status status Achieved Performance Outputs Outputs 2018/19 2018/19 Annual Target Annual Number Number of cases represented on labour-related matters by 31 2019 March Output Output 2018/19 2018/19 Indicator Performance Number Number of cases represented on labour-related matters by 31 2019 March municipalities on relations labour matters by 31 March 2018 Employer bodyEmployer Represent PERFORMANCE REPORT PERFORMANCE 2018/18 Annual Performance Plan 2018/19 Annual Performance Report Labour peace Labour peace municipalities and stability in PART D productive labour labour productive relations 41 foster To sound and No Strategic objectives Outcome Mandate baseline 2017/18 GOAL 2: GOOD GOVERNANCE AND RESILIENT MUNICIPAL INSTITUTIONS MUNICIPAL RESILIENT AND GOVERNANCE GOOD 2: GOAL

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 Not applicableNot Competency issued training accredited for programmes Induction for 1 738 participants for 183 participants Governance for 128 participants Engagement for 697 participants Localf) Links Leadership Conversations for 194 participants Management Performance Seminar for 424 participants Labour Law Seminar for 373 participants Government HR Best Practices Seminar for 181 participants for 53 participants to 3 979 councillors and PXQLFLSDORƯFLDOVWKURXJKWKH SALGA Centre of Leadership and Governance as follows: D &HUWLƬFDWHVRI b) Councillor Integrated c) Portfolio-based Induction d) Municipal in Leadership e) Media and Stakeholder g) Annual Local Government h) Annual Local Government i) Inaugural Annual Local j) Senior Managers Induction 2018/19 Progress on Performance Progress on 2018/19 variancefor Reason • Rolled out training programmes status status Achieved Performance Outputs Outputs 2018/19 2018/19 Annual Target Annual Capacity Capacity building programme rolled out to councillors DQGRƯFLDOVRQ various local government matters related Marchby 31 2019 Output Output 2018/19 2018/19 Indicator Performance Capacity Capacity building programme rolled out to councillors DQGRƯFLDOVRQ various local government matters related Marchby 31 2019 Train councillors Train portfolio- on based training the through SALGA's centre for leadership and governance 31 by 2018 March Capacity Capacity building 2018/18 Annual Performance Plan 2018/19 Annual Performance Report Capable councillors DQGRƯFLDOV that are able to deliver on the local government mandate Local Government 42 profession-alise To No Strategic objectives Outcome Mandate baseline 2017/18 GOAL 2: GOOD GOVERNANCE AND RESILIENT MUNICIPAL INSTITUTIONS MUNICIPAL RESILIENT AND GOVERNANCE GOOD 2: GOAL

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 Not applicableNot Supported 16 municipalities to to municipalities 16 Supported roll out the HRM&D Strategy knowledge-sharing Facilitated and peer learning for 11 municipalities Convened the Inaugural Local Government Human Resource Practices Best Management Seminar attend by 181 Gauteng in delegates municipal RQ6HSWHPEHU7KH purpose was to provide human practitionersresource with insights about how role players management talent the within can to contribute chain value driving strategic municipal IDP goals by continually making systemimpactful changes 2018/19 Progress on Performance Progress on 2018/19 variancefor Reason • • • status status Achieved Performance Outputs Outputs 2018/19 2018/19 Annual Target Annual Municipalities Municipalities to supported implement the Human Resource & Management Development Strategy by 31 2019 March Output Output 2018/19 2018/19 Indicator Performance Support Support municipalities implement to the Human Resource & Management Development Strategy by 31 2019 March Support Support municipalities in and developing Human deploying Capital Strategies aligned to the HRM&D Strategy Marchby 31 2018 Support and advice PERFORMANCE REPORT PERFORMANCE 2018/18 Annual Performance Plan 2018/19 Annual Performance Report PART D Profession-alised human recourses and management in development local government Local Government 43 profession-alise To No Strategic objectives Outcome Mandate baseline 2017/18 GOAL 2: GOOD GOVERNANCE AND RESILIENT MUNICIPAL INSTITUTIONS MUNICIPAL RESILIENT AND GOVERNANCE GOOD 2: GOAL

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 Not applicable Not applicableNot Annual Local nd with customised with support institutionalise to programmes and management performance PXQLFLSDOLWLHVEHQHƬWWHG through the PMS training Programme Service and Behaviours Charter Municipalitiesfor signed a MoU to implement the 2017 in charter to implement the Framework/ Policy on the Service and Behaviours Charter as a result of the MoU Government Performance Performance Government Seminar, Management attended municipal by 424 11- on Gauteng in delegates February12 to provide 2019, management performance practitioners approaches with and mechanisms for transforming performance designing and impact into performance meaningful indicators for service GHOLYHU\7KHVHPLQDUDOVR aimed to deliver insights and contribute will that learning towards entrenching a high- in culture performance municipalities 2018/19 Progress on Performance Progress on 2018/19 variancefor Reason • Provided 38 municipalities • Convened the 2 • Developed a Framework on the • SALGA and Productivity SA • municipalities 16 Supported status status Achieved Achieved Performance Outputs Outputs 2018/19 2018/19 Annual Target Annual Customised programmes to support municipalities to institutionalise performance management implemented Marchby 31 2019 Framework/ policy on the Service and Behaviours Charter in implemented municipalities Marchby 31 2019 Output Output 2018/19 2018/19 Indicator Performance Implement Implement customised programmes to support municipalities to institutionalise performance management Marchby 31 2019 Implement Implement framework/ policy on the Service and Behaviours Charter in municipalities Marchby 31 2019 Implement Implement customised programme to support municipalities to institutionalise & cascade performance management system by 31 March 2018 on the Local Government Service Charter by 31 March 2018 Support and advice Employer bodyEmployer awareness Create 2018/18 Annual Performance Plan 2018/19 Annual Performance Report Professionalised human recourses and management in development local government Profession-alised human recourses and management in development Local Government Local Government Local Government 45 profession-alise To 44 Professionalise To No Strategic objectives Outcome Mandate baseline 2017/18 GOAL 2: GOOD GOVERNANCE AND RESILIENT MUNICIPAL INSTITUTIONS MUNICIPAL RESILIENT AND GOVERNANCE GOOD 2: GOAL

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 GOAL 3: FINANCIAL SUSTAINABILITY OF LOCAL GOVERNMENT AND GREATER FISCAL EQUITY

PURPOSE GOAL 3 PERFORMANCE ,PSURYHPHQWRIWKHƬQDQFLDOKHDOWKRIPXQLFLSDOLWLHVWKURXJK NARRATIVE • DUHYLVHGORFDOJRYHUQPHQWƬVFDOIUDPHZRUN • HƪHFWLYHUHYHQXHPDQDJHPHQWDQGHQKDQFHPHQW • access to alternative/innovative funding sources SO1: DEVELOP AND SUPPORT • VRXQGƬQDQFLDOPDQDJHPHQW THE IMPLEMENTATION OF FINANCIAL STRATEGIES FOR THE STRATEGIC OBJECTIVES (SO) LONG-TERM SUSTAINABILITY • 7R GHYHORS DQG VXSSRUW WKH LPSOHPHQWDWLRQ RI ƬQDQFLDO AND VIABILITY OF LOCAL strategies for the long-term sustainability and viability of local government GOVERNMENT • To support innovative revenue enhancement strategies for CLIMATE CHANGE BILL local government • 7RVWUHQJWKHQƬQDQFLDOPDQDJHPHQWV\VWHPVDQGFRQWUROV Despite deliberations on mitigating and addressing climate change, South Africa only recently put legislation in place to KEY CHALLENGES IN FISCAL AND PLWLJDWH FOLPDWH FKDQJH :LWKRXW OHJLVODWLRQ JRYHUQPHQW FINANCIAL MANAGEMENT FRXOG QRW DGGUHVV FOLPDWH FKDQJH HƪHFWLYHO\ DQG EDWWOHG WR • +DOIRIWKHFRXQWU\oVPXQLFLSDOLWLHVDUHLQƬQDQFLDOGLVWUHVV ƬQDQFHDQGODXQFKFOLPDWHFKDQJHSURMHFWV (June 2018) • Growth of national transfers now being reduced as part In response to the new legislation, SALGA organised a RI QDWLRQDO ƬVFDO FRQVROLGDWLRQ DQG VXEGXHG ƬVFDO DQG workshop to inform municipalities about the new Climate depressed economic environment &KDQJH %LOO DQG VROLFLW PHPEHU LQSXWV 0XQLFLSDOLWLHV LQ WKH • 1HDUO\DTXDUWHURIPXQLFLSDOLWLHVFROOHFWOHVVWKDQRI (DVWHUQ&DSHEHQHƬWWHGIURPLQVLJKWLQWRWKHHƪHFWRIWKH%LOO revenue owed to them RQORFDOJRYHUQPHQWDQGSURYLGHGWKHLULQSXWV • Increase in municipalities in persistently vulnerable cash- ƮRZSRVLWLRQ SUPPORT TO PORT ST JOHNS MUNICIPALITY • :HDNPXOWL\HDUEXGJHWLQJ6&0LQHƯFLHQFLHVSRRUDVVHW and contract management, weak internal controls Port St Johns Municipality has been engulfed by protracted • *URZWK LQ FRQVXPHU GHEW ZLWK RI PXQLFLSDOLWLHV industrial action characterised by residents spilling rubbish KDYLQJGHEWRUOHYHOVKLJKHUWKDQRIRZQUHYHQXH DQGEORFNLQJVWUHHWV7KLVDƪHFWHGWUDƯFƮRZDQGWKHDELOLW\

• Audit outcomes regressing, with increases in irregular RI VKRSV KDZNHUV DQG WUDQVSRUW V\VWHP WR RSHUDWH IUHHO\ REPORT PERFORMANCE expenditure, fruitless and wasteful expenditure, A SALGA-constituted Task Team visited the municipality to XQDXWKRUL]HGH[SHQGLWXUH. YHULI\WKHDPRXQWVHPSOR\HHVFODLPHGZHUHRZHGWRWKHP 7KHPXQLFLSDOLW\EHQHƬWWHGIURPWKHLQWHUYHQWLRQLQUHVROYLQJ

the labour unrest and the development of an action plan with PART D WLPHIUDPHVWRDGGUHVVWKHJULHYDQFHV$VDJUHHGHPSOR\HHV HQWLWOHGIRUEDFNSD\ZHUHSDLG

FISCAL ENVIRONMENT

0XQLFLSDOLQIUDVWUXFWXUHƬQDQFLQJVHPLQDU SALGA Gauteng hosted the Gauteng Municipal Infrastructure Financing Seminar to encourage capital budget augmentation WR DFFHOHUDWH PXQLFLSDO LQIUDVWUXFWXUH GHYHORSPHQW 7KH

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 seminar responded to a conference resolution for SALGA streams with municipalities that were doing well with revenue and other key stakeholders to act as information/knowledge FROOHFWLRQ7KHUHZDUGIRUDVLJQLƬFDQWDPRXQWRIKDUGZRUNLV EURNHUVLQWKHLQIRUPDWLRQJDSEHWZHHQƬQDQFLHUVDQG the likelihood that at least two municipalities will improve their PXQLFLSDOLWLHV DXGLWRXWFRPHVLQWKHƬQDQFLDO\HDU

The seminar attracted participation from the French Revenue management support was also given to the Enoch Development Agency (AFD), Development Bank of Southern Mgijima and King Sabata Dalindyebo municipalities as Africa (DBSA), National Treasury, C40 Cities and GTAC and secondary cities in partnership with CoGTA EC and other created a knowledge platform for municipalities to access UHOHYDQWVWDNHKROGHUV information about the legislative framework governing municipal borrowing for infrastructure requirements and As indicated in its 2018/19 Annual Performance Plan (APP), improving the municipality’s credit worthiness and access to SALGA committed to support municipalities, especially those WKHFDSLWDOPDUNHW with a poor performance record, with their internal audit and ULVN PDQDJHPHQW DFWLYLWLHV 6$/*$ XVHG LWV LQWHUQDO DXGLW SO2: SUPPORT INNOVATIVE capacity to assess performance throughout the year and used REVENUE ENHANCEMENT LWV SURYLQFLDO RƯFHV WR LGHQWLI\ PXQLFLSDOLWLHV WKDW QHHGHG STRATEGIES FOR LOCAL DVVLVWDQFH6$/*$oV,QWHUQDO$XGLWXQLWHQVXUHWKDWWKHDXGLWV RIDƪHFWHGPXQLFLSDOLWLHVFRPSOLHGZLWKWKHVWDQGDUGVVHWE\ GOVERNMENT WKH,QVWLWXWHRI,QWHUQDO$XGLWRUV ,,$

SUPPORT TO MUNICIPALITIES ON The Internal Audit unit provided this support in conjunction MODERNISING RECORDS MANAGEMENT ZLWK6$/*$oVSURYLQFLDORƯFHVDQGDOLJQHGZLWKWKH0XQLFLSDO ALIGNED WITH PAJA AND PAIA Audit Support Programme (MASP), with the Risk Management Unit and Municipal Finance Directorate when assisting -RLQHGE\WKHUHG]RQHG1RUWK:HVW0DPXVDDQG7VZDLQJ/0V PXQLFLSDOLWLHV SALGA visited the Ekurhuleni Metro to look at their records PDQDJHPHQWV\VWHPVLQIUDVWUXFWXUHSROLFLHVDQGHTXLSPHQW Direct engagements with municipalities were organised to Municipal representatives demonstrated the functioning of discuss the status of their internal audit, risk management the electronic records management system and their PAIA DQG JRYHUQDQFH VWUXFWXUHV 7KH HQJDJHPHQWV UHVXOWHG LQ 6HFWLRQUHVSRQVHV WKH GHYHORSPHQW RI D SURJUDPPH WKDW LGHQWLƬHV DUHDV LQ PXQLFLSDOLWLHVWKDWUHTXLUHDVVLVWDQFH SALGA subsequently organised two Records Management Seminars on Support to Municipalities in the Modernisation of 7ZHQW\ƬYH PXQLFLSDOLWLHV EHQHƬWWHG IURP VXFK DVVLVWDQFH Records Management Systems in the Northern Cape and North DVZHOODVIURPDFWLRQSODQVWRLPSOHPHQWWKH$*6$ƬQGLQJV :HVW7KH6RXWK$IULFDQ+XPDQ5LJKWV&RPPLVVLRQ 6$+5& IRU WKH ƬQDQFLDO \HDU 6RPH RI WKH EHQHƬFLDULHV provided attendees with information about Section 32 ZHUH WKH $PRWKROH 'LVWULFW 0XQLFLSDOLW\ DQG LWV ƬYH ORFDO UHVSRQVHV$SUHVHQWDWLRQE\4XLGGLW\DVHUYLFHSURYLGHURI municipalities and the Nkangala District Municipality and its HOHFWURQLFPDQDJHPHQWV\VWHPVFUHDWHGVLJQLƬFDQWLQWHUHVW ORFDOPXQLFLSDOLWLHV LQUHFRUGVPDQDJHPHQWDQGVSHFLƬFDOO\WKHPRGHUQLVDWLRQRI UHFRUGVPDQDJHPHQWV\VWHPV In May 2018, SALGA’s Internal Audit also attended the District MASP evaluation and knowledge-sharing session attended SO3: STRENGTHEN FINANCIAL E\NH\PXQLFLSDORƯFLDOVDQGDXGLWFRPPLWWHHPHPEHUV MANAGEMENT SYSTEMS AND from the Emalahleni, Nkangala, Gert Sibande, Steve Tshwete, CONTROLS 7KHPELVLOH +DQL 1NRPD]L 0VXNXOLQJZD DQG *RYDQ 0EHNL municipalities to discuss combined assurance, internal audit MUNICIPAL AUDIT SUPPORT PROGRAMME SURFHVVHVDQGWKHUROHRIDXGLWFRPPLWWHHV (MASP) Similarly, during an advisory session at the Nkangala DM 5HG]RQHPXQLFLSDOLWLHVDUHUHJDUGHGDVSRRUSHUIRUPHUVZLWK in July 2018, mSCOA and SALGA Internal Audit advised a disclaimer or adverse audit opinion from the AG’s auditing the Emalahleni LM, Nkangala DM, Gert Sibande LM, Steve SURFHVV7KH'U%H\HUV1DXGH(QRFK0JLMLPD0QTXPDDQG 7VKZHWH/07KHPELVLOH+DQL/01NRPD]L/00VXNXOLQJZD Walter Sisulu municipalities in the Eastern Cape were red- /0DQG*RYDQ0EHNL/0RQEHVWLQWHUQDODXGLWSUDFWLFHV7KH ]RQHG LQWKHƬQDQFLDO\HDU )HWDNJRPR7XEDWVH/0EHQHƬWWHGIURP6$/*$oVVXSSRUWZLWK a review of their draft unaudited Annual Financial Statements SALGA provided hands-on-support to these municipalities (AFS) to identify and correct errors and ensure compliance and facilitated knowledge-sharing about alternative revenue ZLWKDFFRXQWLQJSROLFLHV

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 A SALGA-facilitated session at the Amathole DM on internal audit and risk management followed a request for assistance from their Internal Audit and Risk Management Forum and included the Raymond Mhlaba LM, Great Kei LM, Mbashe LM and Amahlathi /0

Regarding quality assurance reviews, SALGA guided municipalities by: • recommending the best internal audit practices • providing guidance on conducting internal audits • reviewing IA methodology, annual audit plans and three-year rolling plans • DGYLVLQJRQKRZWRWUDFNDQGRUIROORZXSRQ,$DQG$*6$ƬQGLQJV • DGYLVLQJZKLFKGRFXPHQWVDUHUHTXLUHGE\WKH,QVWLWXWHRI,QWHUQDO$XGLWRUV ,,$

The Elias Motswaledi Local Municipality received quality assurance support, as well as those listed in Table 5, along with the type RIVXSSRUWSURYLGHG

7DEOH$GGLWLRQDOVXSSRUWWRPXQLFLSDOLWLHVGXULQJWKHƬQDQFLDO\HDU

Date Municipality Type of support given 13-14 December 2018 Ramotshere Moila Local SALGA IA provided assistance by conducting external quality Municipality assurance and participating in the Audit and Risk Committee meeting 21 January 2019 Collins Chabane Local SALGA provided assistance by conducting a workshop on internal Municipality audit and risk issues, identifying challenges and assisting the Municipality to deal with the challenges 15 February 2019 Impendle Local Municipality SALGA provided assistance by conducting a workshop on internal audit and risk issues, interacting with the attendees, answering questions and providing advice and support as required 14 March 2019 Letsemeng Local Municipality SALGA provided assistance by discussing the municipality's challenges and agreeing on how to assist the municipality

ASSESSMENT OF BY-LAWS FOR CONSTITUTIONALITY AND EFFECTIVENESS

'XULQJWKHƬQDQFLDO\HDUXQGHUUHYLHZ6$/*$XQGHUWRRNIXOOVFDOH DVVHVVPHQWV RI D QXPEHU RI E\ODZV WR HVWDEOLVK WKHLU HƪHFWLYHQHVVDQGOHJDOLW\ZLWKLQORFDOJRYHUQPHQW7KHPXQLFLSDOLWLHVDQGE\ODZVUHYLHZHGLQFOXGHG

Table 6 Review of by-laws in the sphere of local government

Municipality By-law Inkosi Langalibalele Credit control and liquor trading hours Ray Nkoyeni Credit control and debt collection X0VXQGX]L Customer care, credit control and debt collection

uMgeni Credit control and debt collection REPORT PERFORMANCE PART D

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 Not applicableNot Equitable Share (LGES) UHPRGHOOLQJWRUHƮHFWFRVW of services study cost of reforms on LG framework ƬQDO/*(6UHSRUWZLWKLWV determine to remodelling adequacy and potential UHFRPPHQGDWLRQVWRLQƮXHQFH WKHEURDGHUƬVFDODUFKLWHFWXUH at the SALGA MF National Working Group on 5 March 2019 the report (part of SALGA's response on the Division 2019 of Revenue Bill) to the Select and Standing Committee on Appropriations on 8 March and2019 NCoP debate on 28 March and 2019 it formed part of the inputs on the DoRB and the MTBPS Budget Winter Forum, Budget Budget, with Spring and Forum other partners (FFC), to lobby IRUWKHUHYLHZRIWKHƬVFDO towards architecture regime/ more equitable municipal allocations UHYLHZRIƬVFDOUHIRUPVZLWKD focus on the following: a) Local Government b) The impact of legislation/ c) The policy and regulatory • Developed and tabled the • elements of key Presented • Participated in the Technical • Conducted research for the 2018/19 Progress on Performance Progress on 2018/19 for Variance Reason Status Status Achieved Performance Target 2018/19 2018/19 Outputs Annual Outputs Annual 5HYLHZHGƬVFDO reforms by 31 March 2019 Indicator Performance reviewed by 31 2019 March 2018/19 Output Output 2018/19 New Indicator Fiscal reforms Lobby, advocateLobby, and represent 2018/19 Annual Performance Plan 2018/19 Annual Performance Report More equitable reasonable and allocation to Local Government sector support the the support implementation of ƬQDQFLDOVWUDWHJLHV for the long-term sustainability and viability of Local Government 46 develop To and No Strategic Objectives Outcome Mandate Baseline 2017/18 GOAL 3: FINANCIAL SUSTAINABILITY OF LOCAL GOVERNMENT AND GREATER FISCAL EQUITY PERFORMANCE AGAINST PREDETERMINED OBJECTIVES PREDETERMINED AGAINST PERFORMANCE

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 Not applicableNot Innovation InfrastructureInnovation Financing Conference in June to provide2018 proposals and solutions for municipalities on generation revenue alternative VWUHDPV by +/-400 representatives member including municipalities, industry experts and key stakeholders in local infrastructuregovernment ƬQDQFLQJWRH[SORUHGHOLEHUDWH and share ideas on innovative infrastructure funding mechanism for South African PXQLFLSDOLWLHV between shop one-stop PXQLFLSDOLWLHVDQGƬQDQFLHUV showcased best practices infrastructure innovative for ƬQDQFLQJDQGIRFXVHGRQ the evolution of municipal trading services and how infrastructureinnovative can municipalitieshelp with this HYROXWLRQ provincial start a to Gauteng in municipalitiesdialogue among about an exodus of expertise municipal innovative in ƬQDQFLQJDIWHUWKH/RFDO *RYHUQPHQW(OHFWLRQV7KH focus was largely on creating an through environment enabling the Municipal Borrowing Policy Framework and on alternative instrumentsfunding for VXEQDWLRQDOJRYHUQPHQWV It was also convened for Gauteng in municipalities • Convened the Municipal • Conference was attended • Conference provided a • Held an Infrastructure Seminar 2018/19 Progress on Performance Progress on 2018/19 for Variance Reason Status Status Achieved Performance Target 2018/19 2018/19 Outputs Annual Outputs Annual Alternative Alternative revenue generation streams by 31 2019 March Indicator Performance 2018/19 Output Output 2018/19 Alternative revenue generation streams by 31 2019 March Conduct research research Conduct and develop a strategy on alternative revenue generation opportunities by March31 2018 Strategic Strategic SURƬOLQJ PERFORMANCE REPORT PERFORMANCE 2018/19 Annual Performance Plan 2018/19 Annual Performance Report PART D Municipal Municipal revenue GLYHUVLƬHG through innovative revenue sources revenue enhancement enhancement revenue strategies for Local Government 47 innovative support To No Strategic Objectives Outcome Mandate Baseline 2017/18 GOAL 3: FINANCIAL SUSTAINABILITY OF LOCAL GOVERNMENT AND GREATER FISCAL EQUITY

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 Not applicableNot with access to the SARS customer database to data customer improve integrity and revenue with (pilot enhancement eThekwini Municipality) and municipalities has escalated in past years and raised VHULRXVƬQDQFLDOVXVWDLQDELOLW\ challenges for a number of municipalities and the sector Task Inter-Governmental (NIGTT)Team for debts owed to municipalities by organs of municipalities support state to systems data-sharing project to: (1) provide municipalities management summit in KZN in partnership with CIGFARO, the CFO Foundation and Sebata Holdings new explain and introduce to ƬQDQFLDOLQVWUXPHQWVWKDW can assist municipalities with revenue maximisation and them apply capacitate to them LQUHDOZRUNSODFH • Debt owed to and by • Participated in the National • Collaborated with SARS in a 2018/19 Progress on Performance Progress on 2018/19 for Variance Reason • Convened a revenue • Held a workshop in Limpopo Status Status Achieved Performance Target 2018/19 2018/19 Outputs Annual Outputs Annual Municipalities Municipalities to supported debt manage owed to and by municipalities by March31 2019 Indicator Performance municipalities debt manage to owed to and by municipalities by March31 2019 2018/19 Output Output 2018/19 New Indicator Support Support and advice 2018/19 Annual Performance Plan 2018/19 Annual Performance Report Reduction in rate growth debt municipalitiesin support the the support implementation of ƬQDQFLDOVWUDWHJLHV for the long-term sustainability and viability of Local Government 48 develop To and No Strategic Objectives Outcome Mandate Baseline 2017/18 GOAL 3: FINANCIAL SUSTAINABILITY OF LOCAL GOVERNMENT AND GREATER FISCAL EQUITY

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 (PAYE and VAT) and support educational through programmes and collaboration National with Treasury and CoGTA on the National Revenue Steering Management Committee where work streams were established implementation develop to plans on each of the seven categories of the recommendations of the IMTT Advisory Panel to investigate revenue losses related to Eskom reticulation distribution municipal in areas, which should impact the LGES, the establishment of a district collection agency and the repeal of the historical debt household recommendations on the Municipal the to changes Systems Act, Section at 10 the %XGJHW)RUXP (2) (2) increase tax compliance • Embarked on a research project • Developed and lobbied for 2018/19 Progress on Performance Progress on 2018/19 for Variance Reason Status Status Performance Target 2018/19 2018/19 Outputs Annual Outputs Annual Indicator Performance 2018/19 Output Output 2018/19 PERFORMANCE REPORT PERFORMANCE 2018/19 Annual Performance Plan 2018/19 Annual Performance Report PART D No Strategic Objectives Outcome Mandate Baseline 2017/18 GOAL 3: FINANCIAL SUSTAINABILITY OF LOCAL GOVERNMENT AND GREATER FISCAL EQUITY

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 STRATEGIC ENABLERS AND ADMINISTRATION

PURPOSE Broadband Infrastructure and Services This programme shares smart and digital technological To deliver against its three strategic goals, SALGA’s enablers innovations with municipalities to explore new and need to be improved to ensure that resources are made additional revenue sources and promote communications DYDLODEOH IRU HƯFLHQW DQG HƪHFWLYH GHOLYHU\ RI 6$/*$ SODWIRUPVWRGHYHORSVPDUWFLWLHVLQDQHZGLJLWDOODQGVFDSH SURJUDPPHV SALGA’s support to municipalities broadband infrastructure GHSOR\PHQWRSWLRQVRQƬ[HGOLQHDQGZLUHOHVVQHWZRUNVXVLQJ STRATEGIC ENABLERS a variety of communications platforms, options to deploy • Information Communications Technology (ICT) private networks without applying for a services license, • Data intelligence access to the radio frequency spectrum for public protection • Innovation and disaster management and funding, revenue and training • Research and knowledge management RSWLRQVWRLPSOHPHQWEURDGEDQGLQIUDVWUXFWXUHDQGVHUYLFHV • 6WUDWHJLFSURƬOLQJ • (ƪHFWLYHDQGHƯFLHQWDGPLQLVWUDWLRQ Smart Cities Framework • 6WUDWHJLFSDUWQHUVKLSV During the reporting period, SALGA developed a Local Government Smart Cities Framework to provide municipalities ENABLERS AND ADMINISTRATION with a digitisation blueprint that will vitalise South Africa’s PERFORMANCE NARRATIVE social, business and economic landscape into a smart economy (competitive) with smart people (social and human capital), INFORMATION AND COMMUNICATIONS smart governance (participation), smart mobility (transport TECHNOLOGY (ICT) and ICT), a smart environment (natural resources) and smart OLYLQJ TXDOLW\RIOLIH Municipal ICT During the reporting period, SALGA’s IT audit support covered The framework will enable municipalities to use technology four districts and the local municipalities of Joe Gqabi, Chris platforms, smart and digital technologies and data Hani, Vhembe and Mopani with a focus on improving IT LQWHOOLJHQFHWRIXOƬOWKHLUPDQGDWHVPRGHUQLVHDQGWUDQVIRUP FRQWUROV DQG DUWHIDFWV 7KH VXSSRUW LQFOXGHG GHYHORSLQJ WKHLU IXQFWLRQV DQG RSHUDWLRQV LQWR HƯFLHQW HƪHFWLYH DQG implementing and/or managing the municipal: customised deliverables and base decisions on research • Corporate governance of the ICT Policy and Charter and analyses informed by socio-economic and political • ICT Strategy and Master Systems Plan SHUVSHFWLYHV ZKLOH HQDEOHG FLWL]HQV ZLOO DFFHVV PXQLFLSDO • ICT Portfolio Management Framework VHUYLFHVRQOLQH • IT Risk and Audit Plan • Governance and management of ICT Framework 7KH EHQHƬWV LQFOXGH D FOHDU LPSOHPHQWDWLRQ URDGPDS WKDW • Information Security Policy and Procedures GHƬQHV HDFK WHFKQRORJ\ FDSDELOLW\ IRU HDFK PXQLFLSDO • IT Disaster Recovery and Back-up Plan IXQFWLRQ DQG RSHUDWLRQ DQG LGHQWLƬHV WKH FRPPRQ IHDWXUHV • IT Business Continuity Plan and practices that transform current municipal functions and • IT User Access Management Policy RSHUDWLRQVLQWRVPDUWFDSDELOLWLHV • IT Change Control Management Policy and Procedures • ,76HUYLFH/HYHO0DQDJHPHQW3ROLF\

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 MUNICIPAL FUNCTIONS KEY PROCESS AREA / AREA PROCESS KEY FINANCE AND ECONOMY AND FINANCE TELECOMMUNICATIONS ENVIRONMENTAL SOCIAL SERVICES SOCIAL TRANSPORT EDUCATION POLICING HOUSING ENERGY WATER WASTE

STRATEGIC INTENT PRACTICES AND FEATURES COMMON DATA AND INFORMATION ICT SERVICE DELIVERY CITY-WIDE ENGAGEMENT

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The blueprint will assist municipalities to PART D focus their planning on developing smart DQGGLJLWDOPXQLFLSDOLWLHV 05 04 03 02 01

Figure 13: Common features of technology-enabled Smart Cities .

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 DATA INTELLIGENCE

There is no doubt that the local government sector is facing many challenges. Limited funding, coupled with increasing costs associated with service provision and a changing economic and environmental landscape, are forcing municipalities to reconsider services delivery to their constituencies.

Limited funding and rising costs in basic service delivery are budgets in key areas and integrate services and partnerships DƪHFWHG E\ LQFUHDVLQJ GHPDQGV IURP FKDQJLQJ SRSXODWLRQV WRDFKLHYHPD[LPXPEHQHƬWVFRVWHƪHFWLYHO\ concomitant with the rise in migration and indigence in urban DQGUXUDODUHDV$QHDUO\UHVSRQVHWRPDQDJLQJWKLVFKDQJLQJ Risk detection/early warning system for local government ODQGVFDSHHƪHFWLYHO\LVFULWLFDOWRHPEHGGLQJVRXQGPXQLFLSDO Included in strengthening its business intelligence solution, JRYHUQDQFH 6$/*$ LV FROODERUDWLQJ ZLWK WKH &RXQFLO IRU 6FLHQWLƬF DQG Industrial Research (CSIR) to develop an early warning risk During the past year, SALGA assessed its Municipal Barometer GHWHFWLRQV\VWHPIRUORFDOJRYHUQPHQW7KLVZLOOHQDEOHORFDO government to anticipate risks and respond proactively and data intelligence programme to identify improvements LQQRYDWLYHO\ $ GUDIW ULVN GHWHFWLRQ IUDPHZRUN DQG URDGPDS and developed a draft Business Intelligence Strategy that ZLOOEHƬQDOLVHGLQWKH\HDUDKHDG LVVHWIRUDSSURYDODQGLPSOHPHQWDWLRQLQWKH\HDUDKHDG *RLQJIRUZDUG6$/*$oVIRFXVZLOOEHRQUHFRQƬJXULQJWKH SALGA also piloted a data-driven, online Social Unrest Risk Municipal Barometer portal as a source of responsive and Scale (SURS) application across a number of municipalities agile data intelligence to improve decision-making outcomes GXULQJ WKH SDVW \HDU 7KH 6856 LGHQWLƬHV FRPPXQLWLHV DW LQPXQLFLSDOLWLHV$FRQVLVWHQWGDWDLQWHOOLJHQFHDSSURDFKZLOO risk or with a propensity for unrest to enable a timeous and support the implementation of customer strategies, such as DSSURSULDWHUHVSRQVH6$/*$oV5LVN'HWHFWLRQ(DUO\:DUQLQJ the Integrated Development Plan (IDP), target resources and 6\VWHPZLOOH[SDQGWKH6856

Figure 14: SURS application examples based on results for the Ekurhuleni Metropolitan Municipality .

SALGA Mobi, the Municipal Barometer Smart Mobile LWLVODXQFKHGLQWKHIRUWKFRPLQJƬQDQFLDO\HDU6$/*$0REL application that summarises the indicators in the Municipal will provide municipalities and other stakeholders with instant Barometer portal, was registered in the Google Play Store and DFFHVVWRGDWDDQGRWKHULQIRUPDWLRQ Apple Store and will be downloadable to Android and iOS when

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 Figure 15: Example of the SALGA Mobi application .

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6RFLRHFRQRPLFSURƬOHV Northern Cape Highlighted socio-economic performance information and areas for municipalities to prioritise during planning Limpopo Analysed land area and demographic distribution, migration patterns, household dynamics, economic performance, labour market and service delivery North West Indicator analysis of population distribution and gender breakdown, household dynamics, service delivery, sectoral employment, unemployment rate and economic performance by sector Municipal briefs Local Government A brief on the data systems, availability and procurement challenges that confront local Development Data government Valuing the data economy A brief on the role of local government in contributing towards the valuation of the local data economy, including losses experienced by the lack of data use in planning Data support and advisory services Comparative analysis of A comparative analysis of water and sanitation service delivery to households following the household access to water CoGTA budget speech and current service delivery challenges in local government

and sanitation REPORT PERFORMANCE Emfuleni LED indicators A compilation of LED indicators for the Emfuleni municipality to compile a LED strategy Ray Nkonyeni LM indicators A compilation of municipal socio-economic data to present to councillors, business community members and civil society PART D Workshops/training Municipal Barometer (MB) Conducted with the new SALGA MB champions on MB products and services and inducted MB data analysis induction champions on basic data analysis using the MB portal and other relevant data sources Western Cape IDP 3UHVHQWHGWKH0%SURJUDPPHDQGLGHQWLƬHGWKHWHFKQLFDOSODQQLQJWRROVDYDLODEOHWR,'3 Managers Forum managers Social Unrest Risk Scale 3UHVHQWHGDQGSURYLGHGWUDLQLQJRQ6856WR6$/*$HPSOR\HHVDWQDWLRQDODQGSURYLQFLDORƯFHV

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 INDICATORS TO MEASURE MUNICIPAL KNOWLEDGE MANAGEMENT PERFORMANCE Knowledge Hub Developing and aligning indicators with the sector’s mandate During the year under review, SALGA updated its Knowledge will ensure that relevant data is collected to measure municipal Hub with news, events, relevant SALGA business information, SHUIRUPDQFHDJDLQVWPDQGDWHV'XULQJWKHUHSRUWLQJSHULRGD national and international best practices, as well as case 6$/*$&LW\,QVLJKWFROODERUDWLRQFROODWHGUHYLHZHGUHƬQHG VWXGLHVDQGDFRQWDFWOLVWRIPXQLFLSDOLWLHV7KLVLQIRUPDWLRQ developed and aligned the sector’s mandate indicators relating LVDYDLODEOHWKURXJKWKH.QRZOHGJH+XEOLQNDWKWWSZZZ to, inter alia, demographics, access to basic and social services, VDOJDRUJ]DNKXE.+KRPHKWPO SODQQLQJ DQG ƬQDQFH HFRQRPLF JURZWK DQG GHYHORSPHQW good governance, environmental resilience and capacitated SALGA hosted a number of knowledge-sharing and learning PXQLFLSDOLWLHV,QGLFDWRUVUHODWHGWRGLVDVWHUPDQDJHPHQW events that are important to connect people across sectors, sports and recreation, poverty alleviation, vulnerable groups, organisations and hierarchies, as well as enhance and libraries, cemeteries, funeral parlours, crematoria and arts and disseminate policies, strategies, economic data and business FXOWXUHZHUHDOVRFROODWHG WRROV DQG VKDUH VXFFHVV VWRULHV DQG JRRG SUDFWLFHV 'XULQJ the past year, the Knowledge Management and Innovation In the period going forward, the SALGA/City Insight Unit supported events such as the eThekwini Knowledge collaboration will continue developing indicators associated Management Learning Exchange (Master class), Municipal with spatial transformation, reviewing good governance and Innovative Infrastructure Financing Conference (MIIF) JLYLQJDFFHVVWREDVLFVHUYLFHV to illustrate LQQRYDWLYH LQIUDVWUXFWXUH ƬQDQFLQJ DQG WKH eThekwini First Water Resilient Cities Learning Event to explore LOCAL GOVERNMENT EHVWSUDFWLFHVROXWLRQVWRZDWHUVHFXULW\FKDOOHQJHV PROFESSIONALISATION Other supported events, often in partnership with relevant SALGA partnered with professional bodies to implement stakeholders, included the SALGA Men’s and Women’s the Professionalisation Framework for Local Government Dialogues that acknowledged their respective contributions and support vulnerable municipalities to develop and WR ORFDO JRYHUQPHQW 0XQLFLSDO &KLHI ,QIRUPDWLRQ 2ƯFHUVo LQVWLWXWLRQDOLVH HƪHFWLYH KXPDQ FDSLWDO PDQDJHPHQW (CIOs) ICT Workshop to discuss the impact of the Electronic VWUDWHJLHV 7KLV LQFOXGHG SURYLQFLDO NQRZOHGJHVKDULQJ DQG Communications Act, 36 of 2005, on municipalities; SIKE: The peer-learning sessions for municipalities, where 20 Eastern )RXUWK ,QGXVWULDO 5HYROXWLRQ /HDUQLQJ (YHQW WKDW LGHQWLƬHG &DSH PXQLFLSDOLWLHV EHQHƬWWHG IURPLQIRUPDWLRQDERXWEHVW 4IR opportunities; and the National Municipal Managers Fora SUDFWLFHVLQKXPDQFDSLWDOPDQDJHPHQW that exposed municipal managers to, inter alia, innovations and technologies to improve municipal performance and RESEARCH JRYHUQDQFH

6$/*$ GHSHQGV RQ QHZ DQG UHOHYDQW NQRZOHGJH WR IXOƬO Knowledge Products Directory LWV PDQGDWH DQG DV VXFK LGHQWLƬHG ƬYH UHVHDUFK IRFDO SALGA developed a knowledge products directory that enables DUHDV IRU WKH \HDU XQGHU UHYLHZ 0HPRUDQGD RI $JUHHPHQW easy access to its institutional memory that consists of a wide (MoA) to undertake research, such as with the University range of publications, case studies, good practices, toolkits, of the Western Cape’s Dullah Omar Institute, provide rich guidelines, learning and training materials developed over VRXUFHVRILQIRUPDWLRQ'XULQJWKHSDVW\HDU6$/*$DGGHG time to share knowledge and learning that supports municipal to this knowledge repository through MoAs signed with JUTA FDSDFLW\EXLOGLQJ Publishing, the University of the North West and the Public $ƪDLUV5HVHDUFK,QVWLWXWH During the past year, SALGA also published the 5th issue of in.KNOW.vationZKLFKSURƬOHGWKHH7KHNZLQL0HWURoVInnovate Aligned with SALGA’s commitment to knowledge-sharing, Durban innovation agency and featured articles on the UHVHDUFKƬQGLQJVZHUHGLVVHPLQDWHGHƪHFWLYHO\WRPXQLFLSDO LPSOLFDWLRQVDQGRSSRUWXQLWLHVRI,5IRUPXQLFLSDOLWLHV7KH PHPEHUVDQG, $3VGXULQJƬVFDO articles were authored by technology entrepreneur Dr Andile Ngcaba and the Department of Telecommunication and Postal 6HUYLFHV '736 UHVSHFWLYHO\

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 Not applicableNot management capacitymanagement Barometer Municipal through review to identify successes and challenges and develop recommendations 5HƬQHG/*LQGLFDWRUVWRDOLJQ with mandate/powers LG and function system surveymanagement in outcomes consolidated and SALGA Business Intelligence Roadmap/ Strategy and Implementation Plan SHUIRUPDQFHSURƬOLQJWR disseminate and develop VRFLRHFRQRPLFSURƬOHVDQG briefs municipal Barometer Smart Mobile Application for municipalities to access data (even on smart phones) and use it for risk detection with an early- warning system that uses data to assess, anticipate and risk proactively manage Risk Scale implementation and framework 2018/19 Progress on Performance Progress on 2018/19 variancefor Reason data • Strengthened • • Conducted data LG • municipal with Continued Municipal Completed • • Established Social LG Unrest • Constructing a risk detection Status Achieved Performance Outputs Outputs 2018/19 2018/19 Annual Target Annual Integrated data Integrated management capacity by strengthened March31 2019 Indicator Performance 2018-19 Output2018-19 Strengthened Strengthened data integrated management capacity by 31 2019 March STRATEGIC ENABLERS AND ADMINISTRATION AND ENABLERS STRATEGIC 2017/18 2017/18 baseline Conduct Conduct research on data data and management system for Local Government by 31 March 2018 Strategic Strategic SURƬOLQJ PERFORMANCE REPORT PERFORMANCE 2018/18 Annual Performance Plan 2018/19 Annual Performance Report PART D support to Local Government through data intelligence, and research knowledge generation 49 Data intelligence Informed No. Strategic objectives Outcome Mandate PERFORMANCE AGAINST PREDETERMINED OBJECTIVES PREDETERMINED AGAINST PERFORMANCE

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 Not applicableNot Research Colloquium in in Colloquium Research nd Juta, research 11 papers from the 2 a book called “The Journey to Transform Local Government" research papers that deal with assessing the feasibility multi- implementing of jurisdictional municipal services districts in South Africa and the Cost estimates of community protests on public infrastructure impact their and on the South African local JRYHUQPHQW 2018/19 Progress on Performance Progress on 2018/19 variancefor Reason • Published, in partnership with • Developed another two Status Achieved Performance Outputs Outputs 2018/19 2018/19 Annual Target Annual Five research research Five papers published by 31 2019 March Indicator Performance 2018-19 Output2018-19 3XEOLVKƬYH research papers Marchby 31 2019 STRATEGIC ENABLERS AND ADMINISTRATION AND ENABLERS STRATEGIC 2017/18 2017/18 baseline Implement an an Implement aligned SALGA agenda research Marchby 31 2018 Strategic Strategic SURƬOLQJ 2018/18 Annual Performance Plan 2018/19 Annual Performance Report Informed Informed support to Local Government through data intelligence, and research knowledge generation knowledge knowledge management 50 and Research No. Strategic objectives Outcome Mandate

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 Not applicableNot Municipal Innovative Infrastructure Financing (MIIF)Conference Emperors – Conference Palace, JHB Men’s Dialogue – SALGA 1DWLRQDO2ƯFHV Water Resilient Cities Learning Event – Durban Country eThekwini Club, Women’s Dialogue – SALGA 1DWLRQDORƯFH Municipal CIO’s Workshop on ICT – SALGA National RƯFH Municipal Health Services Summit – Southern Sun, OR Tambo Hub with news, events and information relevant from SALGA business units and departmentssector practises best international as as casewell studies, including the updated contact list of PXQLFLSDOLWLHV DFFHVVLEOHDWKWWSZZZVDOJD RUJ]DNKXE.+ KRPHKWPO a) June – 2018 13-15 b) 22 June – SALGA 2018 2nd c) July – 12 – First 2018 11 d) August 17 – SALGA 2018 e) November 01 – 2018 f) February – 6th 13-14 2019 • Updated SALGA Knowledge • Uploaded national and • SALGA Knowledge Hub events: Knowledge-sharing • 2018/19 Progress on Performance Progress on 2018/19 variancefor Reason Status Achieved Performance Outputs Outputs 2018/19 2018/19 Annual Target Annual An accessible accessible An and comprehensive Hub of LG knowledge, intelligence and by innovations March 2019 Indicator Performance 2018-19 Output2018-19 An accessible and comprehensive Hub of LG knowledge, intelligence and by innovations March 2019 STRATEGIC ENABLERS AND ADMINISTRATION AND ENABLERS STRATEGIC 2017/18 2017/18 baseline Develop Develop the Local Government Knowledge Hub promote and it as a premier of source knowledge for the sector by 31 2018 March Knowledge and information sharing PERFORMANCE REPORT PERFORMANCE 2018/18 Annual Performance Plan 2018/19 Annual Performance Report PART D Informed Informed support to Local Government through data intelligence, and research knowledge generation knowledge knowledge management 51 and Research No. Strategic objectives Outcome Mandate

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 Not applicableNot SALGA Innovation Innovation SALGA th SALGA 2nd Research Moses Colloquium, Mabhida Stadium, eThekwini Water Resilient Cities Learning Event, Sun Square Cape City Town Bowl, Cape Town a directory of SALGA’s products to knowledge enable easy access to SALGA’s LQVWLWXWLRQDOPHPRU\ g) March – 12 – 10 2019 h) March – 12 2nd 10 2019 3XEOLFDWLRQ LQ.12:YDWLRQ 7KHSXEOLFDWLRQSURƬOHVWKH innovation Metro’s eThekwini DJHQF\ƬWWLQJO\FDOOHG,QQRYDWH 'XUEDQ approved the SALGA Municipal Awards Programme that aims to recognise achievements and municipalitiescontributions of that lead to a more DFFRXQWDEOHHƪHFWLYHDQG responsive Local Government SALGA National Members Assembly 2018 December in SXEOLFDWLRQIRUWKHODXQFK • Published 5 • Published 2018/19 Progress on Performance Progress on 2018/19 variancefor Reason • Further, SALGA also developed • SALGA NEC on 22 August 2018 • Launched the Awards at the • Developed a video and Status Achieved Performance Outputs Outputs 2018/19 2018/19 Annual Target Annual Well- implemented managed and SALGA Municipal and Awards innovation programmes for local government by 2019 March Indicator Performance 2018-19 Output2018-19 Implement and and Implement SALGA manage Municipal Awards innovation and programmes for local government by March 2019 STRATEGIC ENABLERS AND ADMINISTRATION AND ENABLERS STRATEGIC 2017/18 2017/18 baseline Develop and launch SALGA Municipal Awards by 31 2018 March Knowledge and information sharing 2018/18 Annual Performance Plan 2018/19 Annual Performance Report Positive image image Positive sector LG of through knowledge generation, marketing and SURƬOLQJ knowledge knowledge management 52 and Research No. Strategic objectives Outcome Mandate

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 Not applicableNot 3URƬOHG6$/*$DQG/RFDO Government sector through media platforms to create awareness about SALGA’s LQLWLDWLYHVDQGSURJUDPPHV The following platforms were used: a) City Press for the inaugural conversations leadership hosted in partnership with the Governance of School b) PRIMEDIA - Council of Mayors Exhibitions such platforms c) in as CIGFARO, IMESA as well as structures governance SALGA (Council of Mayors) to keep our members informed of new sector the developments in AVE (average advertising HTXLYDOHQW RIRYHU5PLOOLRQ This was achieved across all PHGLDSODWIRUPV,VVXHVDURXQG killings, SALGA councillor Council of Mayors, Water ERDUGV(VNRP7DULƪKLNHVDQG water shortages were covered Communicators Forum in September with 2018 over 100 delegates in attendance under the theme “Bringing Local Government Closer to the People”, this year’s forum sought to continue to empower HOCs responsible for local communication,government municipalities local at primarily Communication Guidelines for municipalities who do not have FRUSRUDWHLGHQWLW\PDQXDOV 2018/19 Progress on Performance Progress on 2018/19 variancefor Reason • • Generated publicity with an • Convened the 3rd National • Developed Branding and Status Achieved Performance Outputs Outputs 2018/19 2018/19 Annual Target Annual :HOOSURƬOHG SALGA and the local government sector as a whole by 31 March 2019 Indicator Performance 2018-19 Output2018-19 3URƬOH6$/*$ and the local government sector as a whole and March by 31 2019 STRATEGIC ENABLERS AND ADMINISTRATION AND ENABLERS STRATEGIC 2017/18 2017/18 baseline Generate and establish SALGA and Local Government owned content Marchby 31 2018 Strategic Strategic SURƬOLQJ PERFORMANCE REPORT PERFORMANCE 2018/18 Annual Performance Plan 2018/19 Annual Performance Report PART D Positive image image Positive sector LG of through knowledge generation, marketing and SURƬOLQJ communication 53 Marketing and No. Strategic objectives Outcome Mandate

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 Not applicableNot Not applicableNot Plan approved 2019/20 by National Members Assembly and submitted to CoGTA and National Treasury January on 31 quarterly to submitted CoGTA and National 7UHDVXU\ achieved AG clean audit opinion and submitted to CoGTA and National 7UHDVXU\RQ$XJXVW quarterly in reported Audit and Risk Committee PHHWLQJV convened were structures according to the calendar of HYHQWV Signed eight partnership leverage agreements to resources to improve and LG R2,2 of sponsorships sought million for the year United with MoUs Signed Nations SA, University of California- Berkeley, SAHRC, AFSA, SA, Productivity -87$ 0R$ 3XEOLF$ƪDLUV (PARI) Institute Research and University of North West Law) of (Faculty international Implemented partnership agreements signed LQSUHYLRXVƬQDQFLDO\HDU European the with including Canadian of Federation Union, VVSG, (BGIM), Municipalities &/*)DQG8&/* Complied with PFMA planning requirements for and reporting for and 2018/19 completed: $QQXDO3HUIRUPDQFH 4XDUWHUO\5HSRUWV $QQXDO5HSRUW 3HUIRUPHGDXGLWVDQG $OO6$/*$JRYHUQDQFH 2018/19 Progress on Performance Progress on 2018/19 variancefor Reason • • • • Status Achieved Achieved Performance Outputs Outputs 2018/19 2018/19 Annual Target Annual Partnership agreements with national, regional and international by stakeholders March31 2019 8QTXDOLƬHG audit opinion IRUWKHƬQDQFLDO year ending 31 2019 March Indicator Performance 2018-19 Output2018-19 Partnership agreements with regional national, international and by stakeholders March31 2019 8QTXDOLƬHGDXGLW opinion for the ƬQDQFLDO\HDU ending March 31 2019 STRATEGIC ENABLERS AND ADMINISTRATION AND ENABLERS STRATEGIC 2017/18 2017/18 baseline Leverage at least 20 strategic partnerships relevant with to partners implement SALGA's 2017- 2022 Strategic vision by 31 March 2018 8QTXDOLƬHG audit opinion ZLWKRXWƬQGLQJV Marchby 31 2018 Strategic Strategic SURƬOLQJ Strategic Strategic SURƬOLQJ 2018/18 Annual Performance Plan 2018/19 Annual Performance Report awareness of SALGA and Local Government through management of strategic partnerships Positive image image Positive sector LG of through HƪHFWLYH DQGHƯFLHQW of management organisational administrative processes (ƪHFWLYHDQGHƯFLHQW administration 55 54 Strategic partnership Improved No. Strategic objectives Outcome Mandate

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 PART HUMAN CAPITAL E

Let us set our spirit and conscience attune with the spirit of that within us and together serve faithfully the cause of freedom and so help our beloved South Africa to march honourably HUMAN CAPITAL ZLWKWKHUHVWRIWKHGHPRFUDWLFZRUOGWRWKHƬQDOOLEHUDWLRQ of all mankind. – Albert Luthuli PART E

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 MANAGING HUMAN CAPITAL

SALGA takes pride in its human capital (HC) and believes SKILLS DEVELOPMENT in continuously developing its workforce through various HPSOR\HH GHYHORSPHQW LQLWLDWLYHV 7KHVH LQFOXGH VWXG\ (PSOR\HHVLQWKHORFDOJRYHUQPHQWVHFWRUUHTXLUHVSHFLƬFVNLOOV assistance, a targeted workplace skills plan and a formalised and competencies to deal with the demographic and policy LQWHUQVKLSSURJUDPPHWRGHYHORSQHZO\TXDOLƬHGJUDGXDWHV FKDQJHVDQGWKHFKDOOHQJHVZLWKLQWKHVHFWRU6$/*$HQVXUHV that all employees participate regularly in development During the year under review, SALGA redesigned its macro programmes to acquire and improve the competencies needed and micro organisational structure to ensure optimal to assist member municipalities with their developmental DOLJQPHQWZLWKLWV6WUDWHJLF3ODQ'XULQJWKH mandate. past year, a number of dedicated workstreams developed several transitional projects and focused on preparing and Training interventions during the reporting period included transitioning the projects to fruition in the forthcoming levels 8-3 employees in training sessions, conferences and ƬQDQFLDO\HDU7KHH[SHFWHGUHVXOWVLQFOXGHDPRUHSURGXFWLYH seminars. A total of 439 (2018: 331) employees attended and DQGDOLJQHGRUJDQLVDWLRQ EHQHƬWWHGIURPWUDLQLQJRSSRUWXQLWLHVDVZHOODVQHWZRUNLQJ with colleagues and remaining informed about the latest WUHQGVDQGGHYHORSPHQWVLQWKHLUSURIHVVLRQV

Table 8 Skills development programmes implemented and attended during 2018/19

African Smart Conference Smart Procurement Indaba Hygiene and Cleaning Advanced Excel Training Ethics and Integrity Management EAPA-SA Conference Annual Women in HR Learning Presentation and Public Speaking HR Agile Stakeholder Engagement Protocol and Etiquette Policy Development Training Project Management TOGAF 1/2 Municipal Finance Management Training 6th Annual HR Strategy Archives and Records Conference Leadership and Strategic Training Training Committee Training Customer Service Training Monitoring and Evaluation Design Indaba Processing Incapacity in the Workplace Capacity Building Proposal and Report Writing 360 Degree Disability Seminar Editing for Professionals SHE Rep Training CIMS Assessment Study Conference IASA Conference HRD for Good Municipal Governance PFMA Training 3rd Women in HR Summit Contracts Management Company Secretary course SHE Rep Training Case Law Update 2018 Construction Contracts course

In addition to the training programmes, employees also SALGA also accommodated 22 students in its Internship EHQHƬWWHGIURPEXUVDULHVWRLPSURYHWKHLUIRUPDOTXDOLƬFDWLRQV 3URJUDPPH VHYHQ PDOHV DQG IHPDOHV 7KH VWXGHQWV Bursaries were provided to 50 of the 63 applicants to pursue a EHQHƬWWHG IURP H[SRVXUH WR D EXVLQHVV HQYLURQPHQW DQG UDQJHRINQRZOHGJHHQKDQFLQJTXDOLƬFDWLRQV gaining work experience that will assist them in their future FDUHHUV

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 Employee relations is the management of \HDUV $OLJQHG ZLWK WKH UHTXLUHPHQWV LQ &KDSWHU ,,, 3DUW $ individual and collective relationships within (Organisational Rights) of the Labour Relations Act, 66 of the organisation through the implementation 1995, SALGA started collective bargaining discussions with the of good practices that enable the achievement 3XEOLF6HUYLFH$VVRFLDWLRQRI6RXWK$IULFD 36$ LQ-XQH of organisational objectives that comply with legislation and appropriate socio-economic Having met the membership threshold and other requirements in Section 12 (Trade Union Access to Workplace), the PSA conditions. received organisational rights from SALGA on 7 December EMPLOYEE RELATIONS AND COLLECTIVE DQGDUHFRJQLWLRQDJUHHPHQWRQ-XQH BARGAINING The relationship between SALGA and PSA is ongoing and includes quarterly Management/Union Consultative forum The aims of employee relations in the workplace are to: • create a climate of trust, cooperation and stability within meetings.'XULQJWKHƬQDQFLDO\HDUWKHFROOHFWLYH the organisation bargaining meetings took place on 15 January 2019 and 20 • promote a harmonious and productive working )HEUXDU\ environment • UHVROYH FRQƮLFW E\ PDQDJLQJ JULHYDQFHV, disputes, LABOUR RELATIONS collective bargaining and adherence to policies and SURFHGXUHV While no misconduct cases were reported internally, externally or through the fraud hotline, 35 labour relations cases were Collective bargaining UHFRUGHGIRUƬVFDO7KHQXPEHUUDFHDQGJHQGHURI SALGA entered a new era in terms of freedom of association WKH FDVHV DQG QDWXUH RI GLVFLSOLQDU\ DFWLRQ DUH UHƮHFWHG LQ DQGFROOHFWLYHEDUJDLQLQJGXULQJWKHDQGƬQDQFLDO 7DEOH

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Nature of disciplinary action Number Male Race Female Race Incapacity 2 1 Black 1 Black Grievances 127Black5Black Misconduct 11 6 Black 5 Black Appeal 10Black1Black CCMA 63Black3Black Labour Court 1 1 Black 0 Black Collective bargaining 2 Mix of male and female Total 34 18 15 HUMAN CAPITAL PART E

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 17 101 20

811 10

0 Black Coloured Indian White

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Employment equity SALGA’s Employee Assistance Programme provides all The Employment Equity Act, 55 of 1998, requires employers to employees and their immediate families with access to advice prepare an Employment Equity Plan and submit a report to the from an accredited service provider on, inter alia, personal 'HSDUWPHQWRI/DERXU 'R/ 7KH'R/DFNQRZOHGJHG6$/*$oV ƬQDQFLDOPDQDJHPHQWKHDOWKDZDUHQHVVDQGSK\VLFDOZHOOQHVV 2018/19 submission on 14 January 2019. EHUHDYHPHQWVXSSRUWDQGRFFXSDWLRQDOKHDOWKDQGVDIHW\

Section 16 (1) (a) of the Act also requires a discrimination-free Given the high premium SALGA places on gender equality, HPSOR\PHQWSROLF\SURFHGXUHVDQGSUDFWLFHV7KHVHUHODWHWRD its annual wellness calendar includes local as well as broad range of human capital matters, including recruitment, internationally-observed events, such as Women’s month and DGYHUWLVLQJ VHOHFWLRQ DSSRLQWPHQW MRE FODVVLƬFDWLRQ DQG 0HQoV+HDOWK0RQWK 0HQoV'LDORJXH JUDGLQJ UHPXQHUDWLRQ EHQHƬWV, terms and conditions, job assignments, the workplace, training and development, The Employee Wellness Unit prioritised key service delivery performance evaluation, promotion, transfer, demotion, DUHDVLQOLQHZLWKWKHVWUDWHJLFREMHFWLYHV7KHVH disciplinary measures and other relevant legislative relevant included an employee wellness programme with physical PDWWHUV wellness and occupational health and safety (OHS) activities, HPSOR\HHUHFRJQLWLRQDZDUGVDQGGHDOLQJZLWK&DUHZD\VFDVHV SALGA’s Employment Equity Skills Development Forum (EESDF) complies with Section 16 and facilitates employer/ Employee wellness interventions HPSOR\HH FRQVXOWDWLRQ DERXW FRQGLWLRQV RI HPSOR\PHQW SALGA’s policy is to create a challenging, enabling and The forum meets quarterly and consists of employee productive work environment where employees and their representatives of the organisation’s race/gender/disability immediate families can take advantage of opportunities to PL['XULQJWKHUHSRUWLQJSHULRGPHHWLQJVWRRNSODFHRQ HQKDQFHWKHLUZHOOEHLQJ'XULQJWKHSDVW\HDUWKH(PSOR\HH June, 28 September and 7 December in 2018 and on 1 March Wellness Unit consistently and continuously promoted wellness initiatives and encourage employee participation, since single opportunity or inconsistent use does not constitute EMPLOYEE WELLNESS DFRPSUHKHQVLYHDSSURDFKWRHPSOR\HHKHDOWKDQGZHOOQHVV

As the leading voice in local government, SALGA SALGA’s role The 32 wellness interventions/sessions during the reporting LVFULWLFDOLQSURYLGLQJHPSOR\HHZHOOQHVVSURJUDPPHV7KLV SHULRGDUHUHƮHFWHGLQ7DEOH VWUDWHJLFLQWHUYHQWLRQEHQHƬWVHPSOR\HHVDQGHPSOR\HUVE\ managing the personal, health and work-related concerns and FKDOOHQJHVRILQGLYLGXDOHPSOR\HHVSURDFWLYHO\

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 7DEOH6$/*$HPSOR\HHZHOOQHVVLQWHUYHQWLRQVVHVVLRQVIRUƬVFDO

QUARTER 1QUARTER 2QUARTER 3QUARTER 4 • Financial wellness, wills • 2nd SALGA Men’s dialogue • Mental health awareness • Targeted intervention with and estate (North West, (National) month (Gauteng) Careways Limpopo) • Women Empowerment • Universal children’s day • Mental and emotional • 4x Employee wellness (National) in collaboration with health awareness (Gauteng, National, • Mental health awareness Sanlam (Gauteng) • Financial management in North West, Limpopo) (Limpopo) • Ergonomics wellness, collaboration with Sanlam • Parenting skills (Gauteng) • Respiratory diseases loss and resilience, • Eye screening, malaria and • Healthy living and eating (Gauteng) distressing with laughter albinism habits (Mpumalanga, • Healthy eating habits/ (Mpumalanga) • Workplace bullying Limpopo) diet (Gauteng) • Wellness day (Free State) • Blood donation, health • Mental health disorders • Motivational talk (North • Workplace stress (KZN) massage, basic swimming (Gauteng) West) lessons • Workplace bullying • Women’s health and • Financial management (North West) breast examination • Couple relationship and • Building positive (Mpumalanga) kidney awareness relationships (EC and FS) • Parenting skills (Free • Blood donation, health • Wellness, chronic State) massage, basic swimming diseases and sexuality lessons (Mpumalanga) • :HOOQHVVLQGRRUƬWQHVV • Men’s health and men’s • Deloitte Race dialogue (Mpumalanga, National) • &RQƮLFWPDQDJHPHQW

Employee wellness cases 'XULQJWKHUHSRUWLQJSHULRG6$/*$PDQDJHGHPSOR\HHZHOOQHVVFDVHVZKLFKUHSUHVHQWHGDXWLOLVDWLRQUDWHRI0RVW HPSOR\HHVXVHGWKHIDFHWRIDFHFRXQVHOOLQJVHUYLFHV

Table 11 Number of employee wellness cases and case utilisation rates

Report period Number of cases Case utilisation rate (%) April 2018 10 25 May 2018 10 25 June 2018 5 30 July 2018 10 12,5 August 2018 10 25 September 2018 10 25 October 2018 8 20 HUMAN CAPITAL November 2018 9 22 December 2108 5 12,5 January 2019 13 32,5 February 2019 12 30 PART E March 2019 Not yet received from Careways Government sector January 2019 8,02

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SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 Wellness articles and posters relating to health and wellness absence, including the managerial referral process and topics were communicated continuously via email and identifying troubled employees QHZVOHWWHUV • Empower managers and supervisors to monitor and document absenteeism, identify trends and conduct ABSENTEEISM return-to-work interviews with employees who had taken PRUHWKDQWKUHHGD\VVLFNOHDYH 6$/*$oVDEVHQWHHLVPUDWHIRUƬVFDOZDV ZKLFKLVORZHUWKDQWKHDYHUDJHUDWHRILQ6RXWK$IULFD SALGA will continue to monitor absenteeism trends and EXWKLJKHUWKDQEHVWSUDFWLVH ,QDQHƪRUWWRPLWLJDWH SURYLGHSURJUDPPHVSURDFWLYHO\WRFXUEDEVHQWHHLVPUDWHV absenteeism and lower the rate to a best practice level, SALGA UHTXHVWHG&DUHZD\VWRDQDO\VHLWVDEVHQWHHLVPGDWD EMPLOYEE WELLNESS PROGRAMME (EWP) SURVEY The reported was presented to MANCOM with key recommendations: Careways conducted an EWP Client Satisfaction Survey • Require employees to submit sick and annual leave to determine the needs of employees and ensure that the requests consistently and impress the importance of this SURJUDPPHUHPDLQVUHOHYDQWWRDGGUHVVLQJHPSOR\HHQHHGV upon management • 5HTXHVWPHGLFDOFHUWLƬFDWHVIRUVLFNOHDYHWDNHQWKHGD\ before or after a weekend or public holiday if not already 2QO\RIWKHHPSOR\HHVSDUWLFLSDWHGLQWKHVXUYH\0RVW standard protocol/procedure UHVSRQGHQWV FRQƬUPHG WKDW WKH\ HQMR\ WKH :HOOQHVV DQG • Arrange a session for employees with a Bradford score of Sports Days and some suggested the creation of Men’s and 901 and higher (red-heated) to explain management’s :RPHQoV )RUXPV DV SODWIRUPV WR GLVFXVV LVVXHV WKDW DƪHFW FRQFHUQDERXWWKHXVHRIVLFNOHDYHRƪHUDUHIHUUDOWRWKH HPSOR\HHVDQGVXEPLWVXJJHVWLRQVWRPDQDJHPHQW EWP and note refusals • Calculate sick leave taken in an employee’s sick leave cycle PHYSICAL WELLNESS and refer those with less than 10 days available in their current cycle to the EWP The following activities took place during the 2018/19 • Train managers to focus on the role of the EWP in managing reporting period:

QUARTER 1QUARTER 2QUARTER 3QUARTER 4 • Tennis ball production • MTN/702 Walk-the- • Soccer Fridays (National) • Board games and stick management Talk and Soccer Fridays • Virgin Active aerobics (Mpumalanga) (Free State) (National) (Free State) • Fun games and • Spar Women’s Race (KZN) • Mind games • Cycle-for-a-smoothie swimming lessons (NC) • Mkhaba-must-fall (Mpumalanga) (WC) • Virgin Active aerobics Biggest Loser Challenge • Spring Walk (EC) (Limpopo) (Mpumalanga) • 5 & 10 km Fun Run (KZN) • :HOOQHVVLQGRRUƬWQHVV and Deloitte Race

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 OCCUPATIONAL HEALTH AND SAFETY (OHS) EMPLOYEE RECOGNITION AWARDS

Compliance with the Occupational Health and Safety Act, 85 of The awards nomination process was opened between 3 to DVDPHQGHGLVDVWDWXWRU\UHTXLUHPHQW+HDOWKDQGVDIHW\ 2FWREHU6HOHFWLRQFRPPLWWHHVH[DPLQHGDOOWKH matters are reported on quarterly through SALGA’s Health and nominations and submitted reports to the ERA adjudication 6DIHW\&RPPLWWHH'XULQJWKHUHSRUWLQJSHULRGTXDUWHUO\2+6 SDQHOIRUWKHƬQDOVHOHFWLRQRIDZDUGHHV meetings took place on 24 May and 12 September in 2018 and )HEUXDU\DQG0DUFKLQ The 8th SALGA Employee Recognition Awards event on 30 November 2018 was attended by 260 national and provincial )LUHGULOOH[HUFLVHVHYDFXDWLRQVWRRNSODFHDWDOO6$/*$RƯFHV HPSOR\HHV$QDZDUGIRU(PHUJLQJ/HDGHUVKLSZDVLQWURGXFHG according to the OHS Act requirements, while the second OHS and employees, provinces and directorates who submitted QHZVOHWWHUZDVGLVWULEXWHGWRDOO6$/*$RƯFHV$Q2+6DQQXDO ZHOOZULWWHQPRWLYDWLRQVUHFHLYHG&HUWLƬFDWHVRI5HFRJQLWLRQ status report on SALGA buildings will be submitted to CFO by to acknowledge their contributions and encourage future $SULO SDUWLFLSDWLRQLQWKH(5$SURFHVV,QWRWDODZDUGVZHUH presented and award payments were added to the December VDODULHV

1 2 9 18

3 37

Best Provincial Employee of the Year & Runners-up Males Best Directorate Employee the Year & Runners-up Females Best Employee of the Year & Runners-up Africans Special Awards Coloured Indian HUMAN CAPITAL Figure 18: 2018/19 Employee Recognition Awards. Figure 19: Award winners per gender and race. PART E

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 SALGA is grateful to the following stakeholders who generously sponsored gift vouchers for the 2018/19 Employee Recognition $ZDUGV

Table 12 Employee Recognition Awards 2018/19 sponsorships

Sponsor. Description Quantity American Express Mugs, notebook, USB hampers 4 TWF Fruit, biltong hampers 3 Europcar 2-day Group B car rental 1 Capital Hotel Group Bed & breakfast voucher for 2 (2 nights) 2 City Lodge Hotel Group Bed & breakfast voucher for 2 (2 nights) 2 Protea Hotel Marriott Hunters Rest Bed & breakfast voucher for 2 (2 nights) 2 The Regency Apartment Hotel Menlyn Bed & breakfast voucher for 2 (2 nights) 1 Careways Fruit baskets 2 Discovery Fleece blankets and gadgets 2 Bonitas Medical Scheme Biltong and wine hampers 3 Sanlam Hampers 4

RECRUITMENT AND SELECTION

6$/*$oVKXPDQFDSLWDOVWUDWHJ\VWULYHVWRDWWUDFWUHWDLQDQGGHYHORSHPSOR\HHVZKRPHHWWKHJURZWKQHHGVRIWKHRUJDQLVDWLRQ 7KHRUJDQLVDWLRQFRQWLQXHVWRPDQDJHKHDGFRXQWWRHQVXUHRSHUDWLRQDOHƪHFWLYHQHVVDQGHƯFLHQFLHVDQGFRQWDLQDGPLQLVWUDWLRQ RYHUKHDGV'XHWRWKHRUJDQLVDWLRQDOPLFURUHGHVLJQSURFHVVWKHPRUDWRULXPRQƬOOLQJYDFDQFLHVUHPDLQHGLQSODFHGXULQJWKH UHSRUWLQJSHULRGDQGFULWLFDOYDFDQFLHVRQO\UHFHLYHGDWWHQWLRQ

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Female Female Male Male Occupational level Grand Total AC IWTotal AC IWTotal Top management 2001 3 10110 1215 Senior management 9001 1010212 1525

3URIHVVLRQDOTXDOLƬHG 37132 4343404 5194

Skilled 78533 8951402 57146 Semi-skilled 75418 888000 8 96 Unskilled 16300 198000 8 27

Temporary employees11000 1140 04 15

Total 228 13 7 15 263 134 11 2 8 155 418

Key: = African, C = Coloured, I = Indian, W = White

The organisation still faces some challenges in terms of attracting and employing people with disabilities and females at senior management level in permanent positions.

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 Table 14 New appointments 1 April 2018 – 31 March 2019

Female Male Occupational Levels Total AC IWACIW Top management 00000000 0 Senior management 00000100 1

3URIHVVLRQDOTXDOLƬHG 10000000 1

Skilled 00000000 0 Semi-skilled 00000000 0 Unskilled 00000000 0

Temporary employees 000000 0 0

Total 10000100 2

Key: A = African, C = Coloured, I = Indian, W = White

EMPLOYEE TURNOVER

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% of total number of employees Reason for termination Number leaving Death 0 Resignation 35 Dismissal 0 Retirement 0 Ill-health 3 Expiry of contract 0 Other 0 Total 38 8.4

VACANCY RATE

Filling vacant positions is informed, inter aliaE\RUJDQLVDWLRQDOSULRULWLHVDQGEXGJHWDYDLODELOLW\$WFXUUHQWIXQGLQJOHYHOVWKH HUMAN CAPITAL RUJDQLVDWLRQFRXOGQRWIXQGDIXOOHPSOR\HHFRPSOHPHQW

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SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 7DEOH(PSOR\PHQWDQGYDFDQFLHVGXULQJWKHƬQDQFLDO\HDU

2017/18 2017/18 2018/19 2017/18 Occupational level Approved % of vacancies Number of Number of Vacancies employees posts employees Top management 17 20 15 5 Senior management 27 36 25 11 3URIHVVLRQDOTXDOLƬHG 104 135 94 41 Skilled 165 190 146 44 Semi-skilled 99 96 96 0 Unskilled 28 45 27 0 Temporary employees 12 0 15 0 Total 452 522 418 101 24.2

WORKFORCE AGE GROUP DISTRIBUTION

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150

100

0 0-29 30-39 40-49 50-59 60+

Figure: 20 SALGA’s workforce age group distribution indicates a maturing organisation.

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 CORPORATE SOCIAL RESPONSIBILITY

&RUSRUDWH6RFLDO5HVSRQVLELOLW\UHƮHFWWKHZD\RUJDQLVDWLRQVLQWHJUDWH social, environmental and economic concerns into organisational operations in a transparent and accountable manner – for itself, its stakeholders and the public.

CSR at SALGA is integral to its long-term growth and success provided to 100 elders who were 100 years old in 2018 to DQGFRQWULEXWHVWRSURPRWLQJLWVSULQFLSOHVDQGYDOXHV6$/*$ UHGXFHWKHLUVXƪHULQJDQGLPSURYHWKHLUTXDOLW\RIOLIH partners with the business community, civil society, employees • partnering with the Stellenbosch Municipality, Pniel DQGRWKHUVWDNHKROGHUVWRJLYHHƪHFWWRLWV&65LQLWLDWLYHV community and Boland Quilting Association to provide milling for potholes, general gardening services, stories 'XULQJ WKH ƬQDQFLDO \HDU 6$/*$oV &65 DFWLYLWLHV about Nelson Mandela for children at the Pniel library and ranged from participating in Mandela Day and employee cakes for the Heritage and Cultural Trust tea garden at the ZHOOQHVVLQLWLDWLYHVWRVXSSRUWLQJLWVVSRUWVWHDPV Pniel Museum, all of which brought together businesses, tertiary education and young entrepreneurs and taught NELSON MANDELA DAY 2018 young girls from Pniel Primary how to knit, crochet and quilt Under the theme Being the Legacy, SALGA celebrated the 2018 • partnering with Sanlam, Klerksdorp Cargo Motors, Dr Nelson Mandela Day in all nine provinces, including at its Kenneth Kaunda DM, Mitsubishi Klerksdorp, Maroon QDWLRQDORƯFH(PSOR\HHSDUWLFLSDWHGLQHYHQWVDQGJDYHRI Waters, Miss Klerksdorp, Miss Klerksdorp Teen and WKHLUWLPHDWGLƪHUHQWLQVWLWXWLRQVLQWKHQLQHSURYLQFHV employees at Prominent Paint in Klerksdorp to paint a playground wall at the Klerksdorp SAN Parks Recreation The purpose of the Nelson Mandela Day celebratory Centre, a rehabilitation centre for drug and alcohol activities was to promote the developmental agenda of local addiction and donating groceries to indigent families in JRYHUQPHQW6$/*$FHOHEUDWHGWKHGD\LQSDUWQHUVKLSVZLWK :ROPDUDQVVWDG LGHQWLƬHG E\ WKH 'HSDUWPHQW RI 6RFLDO the: Development • Thuma Foundation and Moral Regeneration Movement (MRM) in a graduation event for 150 municipal councillors to LPSURYHOHDGHUVKLSLQORFDOJRYHUQPHQW.H\QRWHVSHDNHUV included SALGA past-President Cllr Parks Tau and CEO Mr Xolile George, as well as Dr Frank Chikane, Professor Thuli 0DGRQVHODDQG)DWKHU6PDQJDOLVR0NKDWVZD • Nelson Mandela Foundation (NMF) in a Nelson Mandela Lecture delivered by President Barak Obama, former president of the United States who shared his leadership insights and their application in today’s society • Kagiso Trust, SALGA helped to raise R60 000 that was HUMAN CAPITAL donated to the Takalani Home for the disabled in Diepkloof, Soweto • National Development Agency by providing meals for learners and educators at the !Xunkhwesa Combined School in Platfontein near Kimberley, that include members of the PART E !Xun and Khwe SAN tribes who were relocated from Angola WELLNESS THROUGH SPORT in the 1970s and still struggle today for recognition and VHOIGHWHUPLQDWLRQ During the reporting period, SALGA’s predominant sporting Further celebratory activities included: FRGHZDVVRFFHUIRRWEDOO7KHWHDPSOD\HGHLJKWPDWFKHVDQG • providing donations and refurbishing school infrastructure participated in the ABSA Public Sector Soccer Tournament in at the disadvantaged Rusoord Secondary School in the -RKDQQHVEXUJ7KHWHDPSOD\HGYDOLDQWO\EXWORVWDJDLQVWWKUHH Midvaal Local Municipality area, in collaboration with the worthy opponents with scores of 3-1 against the Airports Sedibeng DM Company of South Africa (ACSA), 6-0 against Eskom and 5-2 • providing pain management and personal care information DJDLQVW7UDQVQHW

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 PART

GOVERNANCE FRAMEWORK F

King IV emphasises the creation of an ethical culture and mindset. When this mindset is present, individuals and companies will seek to act in the right way – even when nobody is looking – because they understand that to do so makes good business sense and reduces risk. - Institute of Directors in Southern Africa, 2017

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 CORPORATE GOVERNANCE OVERVIEW

SALGA’s value-driven culture underpins governance structures and processes that commits it to high standards of business activity. These structures are reviewed and adapted regularly to DFFRPPRGDWHDQGUHƮHFWEHVWSUDFWLFH SALGA is a registered employer body in terms of the Labour NATIONAL MEMBERS’ ASSEMBLY (NMA) Relations Act, 66 of 1996 and listed as a Schedule 3A Public (QWLW\LQWHUPVRIWKH3XEOLF)LQDQFH0DQDJHPHQW$FWRI In between National Conferences, SALGA’s ultimate authority The Association is recognised as the national organisation resides in the National Members’ Assembly (NMA) whose representing local government through Government Notice powers and duties range from acting in accordance with 5LQ*RYHUQPHQW*D]HWWH9RORI the directions of the National Conference and considering the audited Annual Financial Statements to adopting the SALGA’s political and administrative functions are aligned to association’s strategic plan and budget as NEC-approved, HQVXUHEXVLQHVVVXFFHVV7KHJRYHUQDQFHIUDPHZRUNFRQVLVWV UHYLHZLQJLWVƬQDQFLDOSHUIRUPDQFHFRQVLGHULQJUHSRUWVIURP of the following structures: Working Groups and oversight bodies and dealing with any THE POLITICAL WING RWKHUPDWWHUWKDWPD\DULVHIURP6$/*$oV&RQVWLWXWLRQ PROVINCIAL MEMBERS’ ASSEMBLIES (PMAS) NATIONAL CONFERENCE (NC) Similar to the Provincial Conferences, Provincial Members’ The National Conference is SALGA’s highest decision-making Assemblies (PMAs) play the role of the National Members’ body, with the powers and duty to elect the members of the $VVHPEO\DWWKHOHYHORISURYLQFHV National Executive Committee; establish and review SALGA’s oversight bodies as and when the law requires; consider the THE PRESIDENCY association’s audited Annual Financial Statements (AFS); approve SALGA’s strategic plan and the accompanying budget; Article 14 of the SALGA Constitution (as amended by the DQGUHYLHZWKHDVVRFLDWLRQoVSHUIRUPDQFH 1DWLRQDO&RQIHUHQFHRI1RYHPEHU JLYHVHƪHFWWRWKH H[LVWHQFHRIWKLVVWUXFWXUH 7KH ƬYH\HDU WHUP RI WKH 1DWLRQDO &RQIHUHQFH LV OLQNHG directly to the political term of municipal councils and local Collectively, the SALGA Presidency consists of a President JRYHUQPHQWHOHFWLRQV7KHFXUUHQW1DWLRQDO&RQIHUHQFHZDV and three Deputy Presidents, each representing a municipal constituted after the local government elections of 3 August FDWHJRU\DQGDOOIURPGLƪHUHQWSURYLQFHVWRHQVXUH UHSUHVHQWLYLW\

PROVINCIAL CONFERENCES (PC) Cllr Thembi Nkadimeng became the SALGA President following the appointed of cllr Parks Tau to cabinet as the The National Conference is represented at provincial level GHSXW\0,QLVWHURI&2*7$ FRAMEWORK GOVERNANCE by Provincial Conferences with resolutions feeding into the 1DWLRQDO&RQIHUHQFH 'XULQJWKHƬQDQFLDO\HDUXQGHUUHYLHZWKH6$/*$3UHVLGHQF\ was constituted as follows: PART F

Cllr Parks Tau Cllr Thembi Nkadimeng, Cllr Zandile Gumede Cllr Sebenzile Ngangelizwe President Deputy President Deputy President Deputy President (up to 31 March 2019) (as at 31 March 2019) 99

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 Duties of the Presidency The SALGA Presidency is tasked mainly with the following critical duties: • Oversees the implementation of decisions of the National Conference (NC), National Members Assembly (NMA) and National Executive Committee (NEC) within all SALGA governance structures and by all its functionaries • Reports on the state and performance of the governance structures of the organisation • Ensures the implementation and management of the Members’ Compact as provided in the Constitution • Presents reports on enforcing the Code of Conduct within relevant SALGA structures • %XLOGVHƪHFWLYHUHODWLRQVKLSVZLWKPHPEHUV • Resolves disputes between SALGA and its members • 3UHVLGHVRYHUWKHGHYHORSPHQWDQGLPSOHPHQWDWLRQRIWKH6$/*$6WUDWHJLF3ODQIRUWKHWHUPRIRƯFHRIWKH6$/*$1(& • Responsible for political communication between the organisation, its members and stakeholders • Politically responsible for overseeing fundraising and sponsorships for SALGA events • 3HUIRUPVRWKHUIXQFWLRQVDVGHOHJDWHGE\WKH1(&LQDFFRUGDQFHZLWKWKH6$/*$)UDPHZRUNRI'HOHJDWLRQ

THE NATIONAL EXECUTIVE COMMITTEE (NEC)

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The NEC exercises its authority between NCs and NMAs, while the Presidency oversees the implementation of decisions taken at 1&V10$VDQGWKH1(&E\DOOIXQFWLRQDULHVZLWKLQ6$/*$oVJRYHUQDQFHVWUXFWXUHV

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'XULQJWKHƬQDQFLDO\HDUWKH6$/*$1(&ZDVFRQVWLWXWHGDVIROORZV NATIONAL EXECUTIVE COMMITTEE

Parks Tau Cllr Thembi Nkadimeng Cllr Zandile Gumede Sebenzile Ngangelizwe Sindiswa Gomba President Deputy President Deputy President Deputy President Chairperson Women’s (up to 31 March 2019) (as at 31 March 2019) Commission

Nomakhosazana Meth Deon De Vos %KHNXPX]L6WRƬOH Robert Mashego Thami Ngubane NEC Member NEC Member NEC Member NEC Member NEC Member

100

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 Jesta Sidell Nombulelo Hermans Bongile Mhaleni Justice Makolomakwa Mpho Khunou NEC Member NEC Member NEC Member NEC Member NEC Member

Xhanthea Limberg Memory Booysen Mxolisi Koyo Matawana Mlamleli NEC Member NEC Member NEC Member NEC Member

Busisiwe Modisakeng Mluleki Ndobe Gibson Chirwa 6RƬD0RVLNDWVL NEC Member NEC Member NEC Member NEC Member GOVERNANCE FRAMEWORK GOVERNANCE

Fetsang Molosiwa Anton Coetsee Xolani Sotashe Xola Pakati NEC Member NEC Member NEC Member NEC Member PART F

Maphefo Letsie Stanley Ramaila Linah Malatjie Florence Radzilani NEC Member NEC Member NEC Member NEC Member 101

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 Other important governance structures are the Provincial Executive Committees (PECs) and the National Working Groups (NWGs) DQG3URYLQFLDO:RUNLQJ*URXSV 3:*V

Main responsibilities of the NEC The NEC exercises the authority of SALGA between NCs and NMAs as SALGA’s highest decision-making body and, inter alia, elects the President and Presidency members to serve in the governance structures, proposes policy and considers the Association’s ƬQDQFLDOSHUIRUPDQFH

Working Groups 6$/*$ZRUNLQJJURXSVIXQFWLRQDWQDWLRQDODQGSURYLQFLDOOHYHOV7KHQDWLRQDOOHYHOZRUNLQJJURXSVIRUWKHSHULRGDUH OLVWLQ7DEOH

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Working group Dedicated focus Municipal Finance and Fiscal Policy • ,QWHUJRYHUQPHQWDOƬVFDOSROLFLHV • 0XQLFLSDOƬQDQFH - Credit control and enforcement mechanisms - Revenue generation strategies - 0XQLFLSDOƬQDQFHPDQDJHPHQW • Municipal-owned entities (performance and governance) • Municipal capital projects - Infrastructure investment - Municipal debt management and review • mSCOA review Human Settlements and Municipal • Housing and planning strategies Planning • $ƪRUGDEOHKRXVLQJPDUNHWV • Spatial planning and land use management • Integrated Urban Development Framework (IUDF) Urban Agenda and City • Urbanisation and sustainable development Development • Broad urban economy • Urban planning and the new urban agenda • Managing urbanisation • City Development Strategies (GDS) Health and Emergency Services • HIV and AIDS • Environmental health • Municipal health services • Primary health care • Global and national agenda • Continental agenda • National agenda • Alignment to SALGA Strategic Plan and Annual Performance Plan Public Safety and Security • Global and national agendas • 6LQJOHTXDOLƬFDWLRQIRUSROLFH • Implementation of the White Papers on Police and Safety • Safer Spaces Portal

102

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 Working group Dedicated focus Community Development and • HIV/Aids awareness Social Cohesion • Health • Poverty alleviation • Arts and culture • Public safety - Local crime prevention - Disaster management - Policing and law enforcement - (PHUJHQF\DQGƬUHVHUYLFHV • Youth development programmes • Children and the elderly • Gender mainstreaming • Disability Environmental Planning, Climate • Environmental regulations and policies Resilience • Air pollution • &OLPDWHFKDQJHHQYLURQPHQWDODƪDLUVDQGVXVWDLQDELOLW\ • Paris Agenda on Climate Change • Environmental Management Programmes Economic Empowerment and • Integrated development planning (IDPs, GDS, NSDP) Public Employment • Town planning and land use management • Public Employment Programmes • Expanded Public Works Programme (EPWP) • Community Works Programme • Municipal/Private sector innovation on public employment initiatives Electricity and Energy Provision • Energy matters • Electricity value chain • Licensing and NERSA matters • 7DULƪ0RGHOOLQJDQG7HFKQRORJ\6\VWHPV • Integrated Resource Plan (IRP) • Renewable energy Rural Development and Public • Land Reform Programme Works • Comprehensive Rural Development Programme • Rural enterprise infrastructure development • Agri-parks and land audits • Land restitution and redistribution programmes • Land tenure regulations and policies Capacity Building and Institutional • Capacity development: Human capital, capacity building and labour relations Resilience implications • Organisational development: LR Implications • Restructuring of municipalities

• Labour relations matters FRAMEWORK GOVERNANCE • Institutional issues relating to municipal service partnerships PART F

103

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 Working group Dedicated focus Councillor Welfare and • Councillors remuneration Empowerment, Governance and • Tools of trade IGR • Councillor indemnity and related matters • Roles of elected municipal representatives • Councillor welfare and empowerment • Review of the local government legislation • Public participation • Develop a Social Charter for municipalities • An assessment of integrity management in municipalities • An assessment of the process of handling petitions, complaints and community protest actions in municipalities • $QDVVHVVPHQWRIFXUUHQWSUDFWLFHVRQRƯFHVRIDFRPPXQLW\RPEXGVPDQ • Oversight and accountability Water and Sanitation • Water • Sanitation • Waste management • 7DULƪPRGHOOLQJ • Water Boards • Bulk water, distribution and reticulation value chain International Programmes and • Municipal international relations Partnerships • Support for organised local governments in the Continent • UCLGA, UCLG, SADC, NEPAD, AU imperatives • Mentoring and twinning partnerships Public Transport and Roads • Public Roads • Transport • Road Asset Management Systems • Road policies • Roads bylaws Municipal Innovations and IT • Information and Communications Technology • Knowledge-sharing and Barometer • SALGA Municipal Awards • Disruptive technologies and systems Trade and Investment • Tourism • Economic empowerment • Trade, export and investment in municipal areas • Industrial development and localised investment • Business licencing RECORDS OF MEETINGS OF GOVERNANCE STRUCTURES

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104

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 SALGA PRESIDENCY

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Meetings and attendance Members of the Presidency Total 8/5/2018 8/8/2018 8/11/2018 8/12/2018 4/5/2019 Cllr Parks Tau 999984/5 Cllr Zandile Gumede 999995/5 &OOU6HEHQ]LOH1JDQJHOL]ZH 999995/5 Cllr Thembisile Nkadimeng 999995/5 Quorum Yes Yes Yes Yes Yes

Key: 9 = present 8= absent with apology

SALGA NATIONAL EXECUTIVE COMMITTEE (NEC)

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DATE DATE DATE DATE MEMBER Total 10-11/05/18 22/08/18 11/12/18 5/02/2019 Cllr Parks Tau 99983/4 Cllr Zandile Gumede 998 82/4 &OOU6HEHQ]LOH1JDQJHOL]ZH 99994/4 &OOU1RPDNKRVD]DQD0HWK 89881/4 Cllr Deon De Vos 99994/4 &OOU%KHNXPX]L6WRƬOH 99893/4 Cllr Robert Mashego 99994/4 Cllr Thami Ngubane 89993/4 &OOU)ORUHQFH5DG]LODQL 988 1/3 Cllr Jesta Sidell 98982/4 Cllr Nombulelo Hermans 98892/4 Cllr Bongile Mhaleni 88880/4 Cllr Justice Makolomakwa 88891/4

Cllr Mpho Khunou 89993/4 FRAMEWORK GOVERNANCE Cllr Xhanthea Limberg 88891/4 Cllr Memory Booysen 89993/4

Cllr Mxolisi Koyo 99994/4 PART F Cllr Matawana Mlamleli 998 82/4 Cllr Busisiwe Modisakeng 99993/4 Cllr Mluleki Ndobe 99994/4 Cllr Thembisile Nkadimeng 99994/4 Cllr Gibson Chirwa 98993/4 &OOU6RƬD0RVLNDWVL 99983/4 Cllr Fetsang Molosiwa 88891/4

105

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 DATE DATE DATE DATE MEMBER Total 10-11/05/18 22/08/18 11/12/18 5/02/2019 Cllr Anton Coetsee 98982/4 Cllr Xolani Sotashe 99994/4 Cllr Xola Pakati 99893/4 Cllr Sindiswa Gomba 98892/4 Cllr Maphefo Letsie 99893/4 Cllr Linah Malatjie 880/2 Cllr Stanley Ramaila 992/2 Quorum Yes Yes Yes 4 meetings

Key: 9 = present 8 = absent with apology Not yet appointed/resigned EASTERN CAPE PROVINCIAL EXECUTIVE COMMITTEE (PEC)

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2018 2019 Designation Eastern Cape PEC member Municipality Total 13/6 9/12 22/3 Chairperson Cllr Mxolisi Koyo Chris Hani 9993/3 Deputy-Chairperson Cllr Nonkqubela Pieters Sarah Baartman 9 RR1/1 Deputy-Chairperson Cllr Bulelwa Mabhengu 8P]LPYXEX 89D 1/2 Deputy Chairperson Cllr Makhaya Twabu 0EL]DQD 8992/3 Deputy Chairperson Cllr Alfred Mtsi BCM 999 Additional member &OOU7KRNR]LOH6RNKDQ\LOH OR Tambo 8993/3 Additional member Cllr Laverne Jacobs Amathole 99 2/3 Additional member Cllr Nomveliso Nyukwana Emalahleni 8891/3 Additional member &OOU/LQGHOZD1WORQ]H KSD 8891/3 Additional member Cllr Tsileng Sobuthongo $OIUHG1]R 9993/3 Additional member Cllr Buyelwa Mafaya NMBM 9993/3 Additional member Cllr Samkelo Janda Mbhashe 9993/3

Key: 9 = present 8 = absent with apology R = Resigned D = Deceased

106

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 FREE STATE PROVINCIAL EXECUTIVE COMMITTEE (PEC)

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2018 2019 Designation Free State PEC member Municipality Total 12/6 3/8 16/11 7/3 Chairperson Cllr Olly Matwana Mlameli Mangaung Metro 99 9 94/4 Deputy Chairperson Cllr Tshidi Koloi Moqhaka LM 89 8 81/4 Deputy Chairperson Cllr Lindiwe Makhalima Dihlabeng LM 99 9 83/4 Deputy Chairperson Cllr Nkosinjane Speelman Matjhabeng LM 99 9 94/4 Additional member Cllr Zollie Mancotywa Mangaung Metro 99 8 93/4 Additional member Cllr Brutus Mahlaku Metsimaholo LM 99 8 93/4 Additional member &OOU0DOHIX9LODND]L Thabo Mofutsanyane DM 99 9 94/4 Additional member &OOU0[ROLVL6L\RQ]DQD Mangaung Metro 88 8 80/4 Additional member &OOU1R]LOLOR0DVL\D+ODWKL Nala LM 88 9 92/4 Additional member Cllr Itumeleng Seakge Tokologo LM 99 8 93/4 Co-opted member &OOU6HEHQ]LOH1JDQJHOL]ZH Lejweleputswa DM 98 9 93/4 Co-opted member &OOU%KHNXP]L&KDUOHV6WRƬOH Matjhabeng LM 98 8 81/4

Key: 9 = present 8 = absent with apology

GAUTENG PROVINCIAL EXECUTIVE COMMITTEE (PEC)

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2018 2019 Total Designation Name Municipality 8/6 3/9 27/11 15/3 Chairperson Cllr Joyce Busisiwe Sedibeng DM 89993/4 Modisakeng Deputy Chairperson Cllr Patricia Kumalo Ekurhuleni 8 R--0/4 (Resigned June 2018) Deputy Chairperson Cllr Naga Lipudi Mogale City 99994/4 Deputy Chairperson Cllr Dady Mollo Sedibeng DM 99994/4 Chairperson: Community &OOU0DWVKLGLVR0ƬNRH City of Jo’burg 99983/4 Development and Social Cohesion WG Chairperson: Economic &OOU1RQNROLVR7XQG]L West Rand District 9882/4

Empowerment and Hawu FRAMEWORK GOVERNANCE Employment Creation WG Chairperson: Governance and Cllr Mapiti Matsena City of Tshwane 88992/4 IGR WG

Chairperson: Capacity &OOU-RQJL]L]ZH Ekurhuleni 98892/4 PART F Building and Institutional Dlabathi Resilience WG Chairperson: Environmental Cllr Anette Deppe City of Joburg 98881/4 Climate Planning and Climate Resilience WG Chairperson: Human Cllr Johnny Tsotetsi Sedibeng District 98893/4 Settlements and Municipal Planning WG

107

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 2018 2019 Total Designation Name Municipality 8/6 3/9 27/11 15/3 Chairperson: Public Transport Cllr Connie Bapela City of Joburg D ---0/4 and Roads WG (Deceased) Chairperson: Municipal Cllr Farouk Bhayat West Rand District 998 83/4 Finance and Fiscal Policy WG Chairperson: Municipal Cllr Enerst Modise Mogale City 8 R --0/4 Innovation and Information (Resigned October 2018) Technology WG Chairperson: Water, Sanitation Cllr Audrey Mosupyoe City of Tshwane 99994/4 and Waste Management WG

Key: 9 = present 8 = absent with apology WG = Working Group R = Resigned D = Deceased

KWA-ZULU/NATAL PROVINCIAL EXECUTIVE COMMITTEE (PEC)

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2018 2019 Designation Name Municipality Total 28/2 2/5 27/6 26/9 4/12 1/3 Chairperson Cllr ME Ndobe Harry Gwala 9999996/6 Deputy Chairperson Cllr NNP Mkhulisi King Cetshwayo 9 9 889 4/6 Deputy Chairperson Cllr S Mkhombo UMkhanyakude 9 9 9 9 9 9 6/6 Deputy Chairperson Cllr T Maphumulo UMgun-gundlovu 9 9 88882/6 Additional member &OOU70Q\D\L]D Ugu 9998995/6 Additional member Cllr A Rehman Amajuba 9999996/6 Additional member Cllr L Mapena eThekwini 9999895/6 Additional member Cllr P Zulu .ZD'XNX]D 9989995/6 Additional member &OOU'0D]LEXNR UThukela Not yet 99994/6 appointed Additional member Cllr F Khumalo 80]LQ\DWKL Not yet 99994/6 appointed Additional member &OOU'=30D]LEXNR UThukela 999 R --3/6 Additional Cllr P Zulu .ZDGXNX]D 9999895/6 Member Additional member Cllr M Lourens X0KODWKX]H Not yet appointed 8891/6

Key: 9 = Present 8 = Absent with apology R = Resigned

108

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 LIMPOPO PROVINCIAL EXECUTIVE COMMITTEE (PEC)

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2018 2019 Designation Name Municipality Total 8/6 6/8 29/11 1/3 Chairperson Cllr Thembi Nkadimeng Polokwane LM 998 82/4 Deputy Chairperson Cllr Stanley Ramaila Sekhukhune DM 998 82/4 Deputy Chairperson Cllr Morris Mataboge Waterberg DM 88992/4 Deputy Chairperson Cllr John Mpe Capricorn DM 98982/4 Chairperson Cllr Nkakareng Rakgoale Mopani DM 99994/4 Member Cllr Julia Mathebe Elias Motsoaledi LM 99893/4 Member Cllr Sophi Makhubele Greater Giyani LM 98892/4 Member Cllr Joyce Bila Collins Chabane LM 98993/4 Member Cllr Cromwell Nhemo 7]DQHHQ/0 99994/4 Member Cllr Jack Maeko Lephalale LM 8 0/4 Member Cllr Orginia Mafefe Sekhukhune DM 89993/4 Member Kgoshi Malesela Dikgale House of Traditional 89881/4 Leaders Member Cllr Thami Ngubane Umvoti LM 89881/4 Member Cllr Maphefo Mogale- Merafong LM 88880/4 Letsie Elected after 2018 PMA Chairperson &OOU)ORUHQFH5DG]LODQH Vhembe DM Not yet 992/2 appointed Deputy Chairperson Cllr Pule Shayi Ba-Phalaborwa LM Not yet 992/2 appointed

Key: 9 = Present 8 = Absent with apology

MPUMALANGA PROVINCIAL EXECUTIVE COMMITTEE (PEC)

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2018 2019 Designation Name Municipality Total 2/5 27/6 26/9 4/12 1/3 Chairperson &OOU0X]L*LEVRQ&KLUZD Gert Sibande District 5/5 99999 FRAMEWORK GOVERNANCE Deputy Chairperson Cllr Linah Masellane Nkangala District 99 ---2/2 Malatjie Deputy Chairperson Cllr Sibusiso Peter City of Mbombela ---880/2

Mathonsi PART F Deputy Chairperson Cllr Sylvia Cecilia Bushbuck-ridge 999995/5 Nxumalo Additional member Cllr Enoch Ishmael Terra (KODQ]HQL'LVWULFW 888880/5 Shabangu Additional member Cllr Rhoda S Mathabe Dr JS Moroka 98982/5 Additional member Cllr Flora Noliqhwa Govan Mbeki 998994/5 Maboa Boltman

109

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 2018 2019 Designation Name Municipality Total 2/5 27/6 26/9 4/12 1/3 Additional member Cllr Peter Mokhachane Dipaleseng 999984/5 Mokoena Additional member Cllr Lesetja Jacob Dikgale Nkangala District 988982/5 Additional member Cllr Selina Sekgobela Thaba Chweu 889881/5 Mashigo Co-opted member Cllr Busi Martha Emalahleni 998983/5 Hlumbane Co-opted member &OOU0DNKRVD]DQD Lekwa 9 9995/5 Khumalo Co-opted member &OOU6LPHRQ0DEX]D 1NRPD]L 999995/5

Key: 9 = Present 8 = Absent with apology

NORTHERN PROVINCE PROVINCIAL EXECUTIVE COMMITTEE (PEC)

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2018 2019 Designation Name Municipality Total 7/6 29/8 18/9 29/11 20/2 Chairperson &OOU6RƬD0RVLNDWVL John Taolo Gaetsewe 988892/5 DM Deputy chairperson Cllr Sipho S’thonga Emthanjeni LM 998983/5 Deputy chairperson Cllr Eunice Mathe Sol Plaatje LM 988881/5 Additional member Cllr Limakatso Koloi David Kruiper LM 898982/5 Additional member Cllr Lulamile Nkumbi Pixley-ka-Seme DM 998882/5 Additional member Cllr Lindie Bruntjies – Namakwa MD 888880/5 Groenewalt Additional member Cllr Brenda Mpamba Thembelihle LM 988993/5 Additional member Cllr Dineo Moyo Gamagara LM 888891/5 Additional member &OOU/RUHQ]R)DEHU Namakhoi LM 888880/5 Additional member Cllr Paulus Mgcera Tsantsabane LM 9998 83/5

Key: 9 = Present 8 = Absent with apology

NORTH WEST PROVINCE PROVINCIAL EXECUTIVE COMMITTEE (PEC)

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2018 Designation North West PEC member Municipality Total 30/8 10/10 28/11 Chairperson Cllr Fetsang Mokati Bojanala Platinum District 9993/3 Municipality Deputy Chairperson Cllr Kgotso Khumalo JB Marx 8992/3 Deputy Chairperson Cllr Bitsa Lenkopane Kagisano/Molopo 9892/3 Deputy Chairperson Cllr Maggy Malwane Tswaing 9993/3 Additional member Cllr Shiela Mabale-Huma Rustenburg 9881/3 Additional member Cllr Kim Medupe Kgetlengrivier 8880/3

110

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 2018 Designation North West PEC member Municipality Total 30/8 10/10 28/11 Additional member Cllr Asnath Molekwa Bojanala Platinum 9993/3 Additional member Cllr Aaron Motswana Mamusa 8992/3 Additional member Cllr Jostine Mothibe Madibeng 9982/3 Additional member Cllr Ntombi Koloti Dr Kenneth Kaunda 8992/3

Key: 9 = Present 8 = Absent with apology

WESTERN CAPE PROVINCIAL EXECUTIVE COMMITTEE (PEC)

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2018 2019 Designation Name Municipality Total 12/4 20/7 19/8 19/10 6/12 25/01 12/04 Chairperson Ald Anton Overstrand 99999997/7 Coetsee Municipality Deputy Cllr Shaun August City of Cape Town 998R 21/8 ---2/3 Chairperson Deputy Cllr Kyle Carls City of Cape Town -----891/2 Chairperson Deputy Ald Harold West Coast DM 99999896/7 Chairperson Cleophas Deputy Cllr Aidan Drakenstein 99999896/7 Chairperson Stowman Municipality Additional Ald Garin City of Cape Town -----891/2 member Cavanagh Additional Cllr Gert Drakenstein 88898881/7 member Combrink Municipality Additional Cllr Derrick Stellenbosch 99998996/7 member Hendrickse Municipality Additional Cllr Donovan Cape 99998985/7 member Joubert Winelands DM [previously Stellenbosch Municipality] Additional Cllr Goliat Prince Albert 99999997/7 member Lottering Municipality

Additional Ald Mrs Eve Cape Agulhas 99989884/7 FRAMEWORK GOVERNANCE member Marthinus Municipality Additional Ald Francois Saldanha Bay 99999986/7 member Schippers Municipality PART F Co-opted Cllr Thulani City of Cape Town 98R 21/8 - - --1/2 member Stemele Metro Co-opted Cllr Mrs Beverley &LW\RI&DSH7RZQ 99888893/7 member van Reenen Metro Co-opted Cllr Mrs Georlene Knysna 89999895/7 member Wolmarans Municipality Chairperson Cllr Dr Annelie Central Karoo DM 99999896/7 SWC Western Rabie Cape

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SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 2018 2019 Designation Name Municipality Total 12/4 20/7 19/8 19/10 6/12 25/01 12/04 Invited NEC Cllr Memory Garden Route DM 8 8999984/7 member Booysen Invited NEC Cllr Ms Pixley ka Seme 88888880/7 member Nombulelo DM Hermans Invited NEC Cllr Ms Xanthea City of Cape Town 88899893/7 member Limberg Metro Invited NEC Cllr Xolani City of Cape Town 88888880/7 member Sotashe Metro Member Ald Melvin Naik George 8 8 899994/7 Provincial Municipality Legislature Member Cllr Albert Ntsodo City of Cape Town 89899894/7 Provincial Metro Legislature Member Cllr Rhandall West Coast DM 8 8999984/7 Provincial Swarts Legislature Invited NCOP Cllr Nyaniso Stellenbosch 88989882/7 member Jindela Municipality Invited NCOP Cllr Gillion City of Cape Town 89988983/7 member Bosman Metro Invited NCOP Cllr Mario Wessels Bergrivier 98988983/7 member Municipality

Key: 9 = present 8 = absent with apology / R = Resigned

ADMINISTRATIVE WING $QQXDO3HUIRUPDQFH3ODQ0$1&20LVDOVRUHVSRQVLEOHIRU the implementation of the resolutions taken within SALGA’s As with all public sector institutions, SALGA’s political JRYHUQDQFHVWUXFWXUHV governance structures are supported by an administrative VWUXFWXUH 7KH 6$/*$ QDWLRQDO RƯFH LV VXSSRUWHG E\ QLQH INTERNAL CONTROLS SURYLQFLDORƯFHVWRIXOƬOWKHDGPLQLVWUDWLYHIXQFWLRQ INTERNAL AUDIT The administrative support includes logistics, technical assistance, information and data management and the tabling This function reports administratively to the CEO and RI UHSRUWV 7KH DGPLQLVWUDWLYH IXQFWLRQ DOVR FRQWH[WXDOLVHV functionally to the Audit and Risk Committee to ensure reports and recommendations by considering all legal, LWV LQGHSHQGHQFH DQG OHJLVODWLYH DOLJQPHQW 7KH SXUSRVH ƬQDQFLDOKXPDQFDSLWDODQGRWKHULPSOLFDWLRQVDQGIDFLOLWDWHV authority and responsibilities of the internal audit function are the processing of reports through all SALGA structures to GHƬQHGLQWKH,QWHUQDO$XGLW&KDUWHUDGRSWHGE\6$/*$oV1(& ensure wide organisational participation in decision-making DQG$XGLWDQG5LVN&RPPLWWHH7KH&KDUWHUJUDQWVWKHLQWHUQDO SURFHVVHV audit function access to records, personnel and physical SURSHUWLHVUHOHYDQWWRWKHRSHUDWLRQVRIWKHRUJDQLVDWLRQ In addition to the national and provincial administrative leadership, the management structure includes specialists, RISK MANAGEMENT directors, programme managers, strategic managers and DGYLVRUV ZKR DOO IXOƬO LPSRUWDQW PDQDJHPHQW DQG WHFKQLFDO SALGA uses an enterprise-wide risk management process UROHVLQVWUDWHJ\GHYHORSPHQWDQGLPSOHPHQWDWLRQ WRPDQDJHDQGPLWLJDWHEXVLQHVVULVN7KLVHQWDLOVWKH implementation of a Risk Management Strategy that is The SALGA Management Committee (MANCOM) consists supported by a Risk Management Policy, Anti-Fraud and Anti- of national and provincial managers who meet regularly &RUUXSWLRQ3ROLF\DQGDIUDXGKRWOLQH to drive strategy implementation through, inter alia, the

112

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 Executives at SALGA serve on a Risk Management Committee, Table 29 Members of the Audit and Risk Committee for the which reports to the Audit and Risk Committee, to facilitate and ƬQDQFLDO\HDU FRRUGLQDWHWKHVWUDWHJ\DQGSROLF\LPSOHPHQWDWLRQ7KH5LVN Management Committee oversees risk management activities, Committee member Role which include anti-fraud and anti-corruption monitoring and Mr Andrew Mashifane Chairperson DGYLFH RQ WKH HƪHFWLYHQHVV RI WKH ULVN PDQDJHPHQW system Mr Nala Mhlongo Member DQGSURFHGXUHV Ms Nosisi Kekana Member The organisational risk register contains a mitigation plan and Mr Zukisani Samsam Member LGHQWLƬHGULVNVDUHUHSRUWHGWRWKH$XGLWDQG5LVN&RPPLWWHH Mr Victor Songelwa Member

LEGAL AND COMPLIANCE Remuneration of Audit and Risk Committee members The remuneration of Audit and Risk Committee members for 7KH FRUH IXQFWLRQV RI 6$/*$oV /HJDO DQG &RPSOLDQFH RƯFH WKH DQG ƬQDQFLDO \HDUV LV GLVFORVHG LQ WKH entail: 1RWHVWRWKH$QQXDO)LQDQFLDO6WDWHPHQWV • reviewing, implementing and monitoring processes for legislative and governance compliance PERFORMANCE MANAGEMENT AND • minimising, mitigating and managing legal disputes and REMUNERATION COMMITTEE related costs • guiding and coordinating litigation SALGA’s Performance Management and Remuneration • HQVXULQJ HƪHFWLYH FRUSRUDWH JRYHUQDQFH LQ D SURGXFWLYH Committee supports the implementation and and ethical internal environment institutionalisation of performance management within the • ensuring compliance with the Public Finance Management RUJDQLVDWLRQ7KHFRPPLWWHHDGYLVHVWKH1(&DQGLVDXWKRULVHG Act (PFMA), 1 of 1999, National Treasury Regulations to review, guide and monitor the organisation’s performance and the National Treasury Risk Management Framework management policy and procedures, remuneration philosophy (NTRMF), King IV governance guidelines and related DQGVWUDWHJ\7KHPHPEHUVDUHOLVWHGLQ7DEOH legislative requirements imposed on SALGA as an LQVWLWXWLRQ Table 30 Members of the Performance Management and 5HPXQHUDWLRQ&RPPLWWHHIRUWKHƬQDQFLDO\HDU NEC OVERSIGHT SUBCOMMITTEES Committee member Role As SALGA’s accounting authority, the NEC subscribes to the governance principles espoused in the King Code on Mr Chose Choeu Chairperson Corporate Governance (King IV). Accordingly, SALGA’s internal Adv Motlatjo Ralefatane Member oversight structures include an Audit and Risk Committee and Ms Barbara Lombard Member 3HUIRUPDQFH0DQDJHPHQWDQG5HPXQHUDWLRQ&RPPLWWHH Ms Rosetta Xaba Member Cllr Parks Tau ([RƯFLRPHPEHU Members of NEC subcommittees, such as those mentioned above, are not employed by the state and are reimbursed on an &OOU6HEHQ]LOH1JDQJHOL]ZH ([RƯFLRPHPEHU KRXUO\EDVLVDFFRUGLQJWRSURIHVVLRQDOIHHVFKHGXOHV Cllr Robert Mashego ([RƯFLRPHPEHU Cllr Thembisile Nkadimeng ([RƯFLRPHPEHU AUDIT AND RISK COMMITTEE Remuneration of Performance Management and GOVERNANCE FRAMEWORK GOVERNANCE This committee is constituted in terms of Section 77(a) of the Remuneration Committee members Public Finance Management Act (PFMA), 1 of 1999, as well as The remuneration of the subcommittee members for the 3)0$7UHDVXU\5HJXODWLRQVDQGRI7KH1(& DQGƬQDQFLDO\HDUVLVGLVFORVHGLQWKHQRWHV UHFRQVWLWXWHGWKH$XGLWDQG5LVN&RPPLWWHHZLWKHƪHFWIURP WRWKHDQQXDOƬQDQFLDOVWDWHPHQWV PART F $SULO7KHFRPPLWWHHPHPEHUVDUHOLVWHGLQ7DEOH

113

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 GOING-CONCERN CONSIDERA- A further consideration in assessing the going-concern status TIONS of the organisation was Section 163 of the Constitution of the 5HSXEOLFRI6RXWK$IULFD7KLVVHFWLRQHQYLVDJHVDQLPSRUWDQW role for organised local government and provides for an Act of 7KH 1(& UHYLHZHG WKH DQQXDO ƬQDQFLDO VWDWHPHQWV IRU Parliament to recognise national and provincial organisations ƬQDQFLDO \HDU DQG LQIRUPDWLRQ UHJDUGLQJ WKH that represent municipalities, determine procedures for IRUWKFRPLQJƬQDQFLDO\HDUWRDVVHVVWKHJRLQJFRQFHUQVWDWXV local government to consult the national and provincial RI6$/*$%DVHGRQWKLVLQIRUPDWLRQWKH1(&KDVHYHU\UHDVRQ government, designate representatives to participate in the WREHOLHYHWKDW6$/*$ZLOOUHPDLQDJRLQJFRQFHUQ National Council of Provinces NCoP and nominate persons to WKH)LQDQFLDODQG)LVFDO&RPPLVVLRQ ))& • SALGA will continue to receive Parliamentary grant funding for the Medium-Term Expenditure Framework SALGA’s membership consists of all South African 07() SHULRGDFFRUGLQJWRD1DWLRQDO7UHDVXU\QRWLƬFDWLRQ PXQLFLSDOLWLHVWKURXJKRXWWKHFRXQWU\$VVXFKDQGLQWHUPV IRUWKHƬQDQFLDO\HDULV5PLOOLRQDQG5 of the Organised Local Government Act (OLGA), 52 of 1997, PLOOLRQIRU the organisation is recognised as the sole voice of organised ORFDOJRYHUQPHQWLQWKHFRXQWU\ • 6$/*$ KDV VXFFHHGHG LQ UDLVLQJ 5 PLOOLRQ 5 PLOOLRQ LQVSRQVRUVKLSUHYHQXH There is also no indication that in the foreseeable future • Conditional donor and grant funding raised amounts to the public sector governance model of three spheres of 5PLOOLRQ 5PLOOLRQ government, namely local, provincial and national, will change • Conditional donor and grant funding secured to pursue RUWKDWWKH0LQLVWHUoVUHFRJQLWLRQLQWKH*RYHUQPHQW*D]HWWH the organisation’s mandate in the coming year amounts to No 18645, Regulation 6087, Vol 391of 30 January 1998, will 5PLOOLRQ 5PLOOLRQ EHLQH[LVWHQFH:LWKLQWKLVFRQWH[WWKH1(&FRQFOXGHGWKDW • $W 0DUFK WKH VWDWHPHQW RI ƬQDQFLDO SRVLWLRQ 6$/*$ZLOOEHLQH[LVWHQFHIRUWKHQH[WPRQWKV VKRZHG WKDW WKH RUJDQLVDWLRQ KDG VHFXUHG 5 PLOOLRQ 5 PLOOLRQ DV nSD\PHQWV UHFHLYHG LQ DGYDQFHo FRUITLESS AND WASTEFUL EX- 7KLVLQFOXGHGPHPEHUVKLSOHYLHVRI5PLOOLRQ PENDITURE AND IRREGULAR 5PLOOLRQ SDLGLQDGYDQFHE\PHPEHUPXQLFLSDOLWLHV EXPENDITURE 7KHUHPDLQLQJ5WKRXVDQG 5WKRXVDQG ZLOOEH XWLOLVHGWKURXJKSURJUDPPHLPSOHPHQWDWLRQ Fruitless and wasteful expenditure is disclosed in note 41 • 7KH VWDWHPHQW RI ƬQDQFLDO SRVLWLRQ DW 0DUFK RIWKHDQQXDOƬQDQFLDOVWDWHPHQWV)UXLWOHVVDQGZDVWHIXO UHƮHFWV JURZWK LQ WRWDO DVVHWV RI SHU FHQW WR 5 expenditure amounting to R11 331 was incurred during PLOOLRQ 5PLOOLRQ WKH ƬQDQFLDO \HDU 7KH DFFRXQWLQJ DXWKRULW\ VXEVHTXHQWO\ • The organisation is solvent with total assets exceeding FRQGRQHGWKHH[SHQGLWXUHDVQRWUHFRYHUDEOH WRWDO OLDELOLWLHV E\ 5 PLOOLRQ 5 PLOOLRQ UHSUHVHQWLQJDSHUFHQWLQFUHDVH SHUFHQW IRREGULAR EXPENDITURE • 7KHVROYHQF\UDWHLVWLPHV WLPHV ZKLFK means that SALGA had a liability of 100 cents for each 253 'XULQJ WKH \HDU XQGHU UHYLHZ WKH RUJDQLVDWLRQ LGHQWLƬHG FHQWVLWKROGVLQWRWDODVVHWV irregular expenditure in terms of the Public Finance • 7RWDO FXUUHQW DVVHWV RI 5 PLOOLRQ 5 Management Act (PFMA), 1 of 1999, in the amount of PLOOLRQ H[FHHGFXUUHQWOLDELOLWLHVRI5PLOOLRQ 5 VHHQRWHRIWKHDQQXDOƬQDQFLDOVWDWHPHQWV 5PLOOLRQ 1RGLVFLSOLQDU\DFWLRQZDVWDNHQDJDLQVWDQ\RƯFLDOUHVSRQVLEOH • The current ratio is 211 per cent (2018: 209 per cent), which IRULQFXUULQJWKHLUUHJXODUH[SHQGLWXUH7KHH[SHQGLWXUHZDV PHDQV WKDW 6$/*$ KDG 5 5 LQ FXUUHQW due to an erroneous allocation of B-BBEE points to a supplier DVVHWVWRFRYHUHYHU\5RIFXUUHQWOLDELOLWLHV ZKRVH %%%(( &HUWLƬFDWH KDG H[SLUHG DW WKH WLPH RI WKH • 2SHUDWLRQV IRU WKH \HDU UHVXOWHG LQ D VXUSOXV RI 5 DOORFDWLRQ PLOOLRQ 5PLOOLRQ DQGWKH • 2019/20 to 2021/22 MTEF budget cycle projects operating The expenditure, which was submitted to the relevant authority VXUSOXVHVLQWHUPVRIWKHRUJDQLVDWLRQDOVWUDWHJ\ for condonation, was not condoned by National Treasury and • Membership levy revenue projections for the 2019/20 ZDVZULWWHQRƪDVDSSURYHGE\WKH1(& ƬQDQFLDO\HDUDPRXQWWR5PLOOLRQ • Total revenue projection over the 2019/20 MTEF cycle is 5PLOOLRQ

114

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 LOSSES, IRREGULARITIES AND LEGAL PROCEEDINGS OTHER MATTERS The organisation did not disclose any contingent liabilities a 7KH RUJDQLVDWLRQoV PDWHULDOLW\ DQG VLJQLƬFDQFH IUDPHZRUN OLNHOLKRRGRIDQRXWƮRZRIUHVRXUFHV was developed and agreed to in terms of PFMA Treasury 5HJXODWLRQV BROAD-BASED BLACK ECO- NOMIC EMPOWERMENT ,QWHUPVRI6HFWLRQWKHIROORZLQJDUHVSHFLƬHGDVPDWWHUV WKDW PXVW EH UHSRUWHG RQ LQ WKH DQQXDO UHSRUW DQG ƬQDQFLDO AMENDMENT ACT, 46 OF 2013, statements: REPORTING REQUIREMENTS • any material losses through criminal conduct and any irregular, fruitless and wasteful expenditure that occurred GXULQJWKHƬQDQFLDO\HDU ,QWHUPVRIVHFWLRQ* RIWKH%%%(($FWDOOSXEOLFHQWLWLHV • any criminal or disciplinary steps taken as a consequence of must report on their compliance with broad-based black such losses or irregular, fruitless and wasteful expenditure HFRQRPLF HPSRZHUPHQW LQ WKHLU DXGLWHG DQQXDO ƬQDQFLDO • DQ\ORVVHVUHFRYHUHGRUZULWWHQRƪ statements and annual reports required under the Public • DQ\ ƬQDQFLDO DVVLVWDQFH UHFHLYHG IURP WKH 6WDWH DQG )LQDQFH0DQDJHPHQW$FW $FW1RRI commitments made by the State on its behalf • DQ\RWKHUPDWWHUVWKDWPD\EHSUHVFULEHG The reporting requirements in Part 2 of B-BBEE Regulation 12(1)(a) and (b) require SALGA to report its compliance in 6$/*$oV DQQXDO ƬQDQFLDO VWDWHPHQWV FRPSO\ ZLWK WKH respect of: UHTXLUHPHQWVDVVWDWHGDERYHZKHUHDSSOLFDEOH • ownership, where applicable MATERIALITY AND SIGNIFI- • management control • skills development CANCE FRAMEWORK • enterprise and supplier development • socio-economic development The NEC, as the Executive Authority, approved the materiality • DQ\RWKHUVHFWRUVSHFLƬFHOHPHQW DQGVLJQLƬFDQFHIUDPHZRUNGHYHORSHGLQWHUPVRIWKH3)0$ 7UHDVXU\ 5HJXODWLRQ 7KH IUDPHZRUN GHƬQHV DVSHFWV RIVLJQLƬFDQFHDQGPDWHULDOLW\LQWHUPVRIVHFWLRQV DQG E L RIWKH3)0$

7DEOH6$/*$oVIXOƬOOPHQWRI%%%((UHJXODWRU\UHTXLUHPHQWVIRUWKHƬQDQFLDO\HDU

Element Element Score weighting Management control 20 Skills development 25 Enterprise and supplier development 50 Socio-economic development 5 Total Score 100 55.92 GOVERNANCE FRAMEWORK GOVERNANCE

7DEOH6$/*$oVYHULƬFDWLRQRXWFRPHRIWKHƬQDQFLDO\HDU

Element Element weighting PART F Discounted B-BBEE status Level Level 8 BEE procurement recognition percentage Black ownership percentage N/A Black women ownership percentage N/A %ODFNGHVLJQDWHGJURXS N/A Empowering supplier Yes

115

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 7DEOH6$/*$oVFRQWULEXWLRQVWRWKH&RGHVRI*RRG3UDFWLFHVFRUHFDUGRXWFRPHVIRUWKHƬQDQFLDO\HDU

Element Contribution Ownership N/A Management & control Black Female representation at Board; Black Female representation at Exec Directors; %ODFN0LGGOH0DQDJHPHQWDVRIDOOPLGGOHPDQDJHPHQW %ODFN-XQLRUPDQDJHPHQWDVRIDOOMXQLRUPDQDJHPHQW %ODFN(PSOR\HHVZLWKGLVDELOLWLHVDVRIDOO(PSOR\HHV Skills development 6NLOOVVSHQGRQ%ODFNSHRSOHDVRIOHYLDEOH 6NLOOVVSHQGRQ'LVDEOHGVWDƪDVRIOHYLDEOH Learnerships and categories of B, C and D programmes for black %RQXVSRLQW1XPEHURIEODFNSHRSOHDEVRUEHGE\HQWLW\ Enterprise & supplier development Preferential Procurement: Total BEE procurement with Empowering Suppliers as a percentage of total measured procurement spend:; Total BEE procurement from QSE's as a percentage of total measured procurement spend; Total BEE procurement from EME's as a percentage of total measured procurement spend; 7RWDO%((SURFXUHPHQWIURPEODFNRZQHGVXSSOLHUVDVDSHUFHQWDJHRIWRWDO measured procurement spend; 7RWDO%((SURFXUHPHQWIURPEODFNZRPHQRZQHGVXSSOLHUVDVDSHUFHQWDJH of total measured procurement spend; and Bonus Points:3URFXUHPHQWVSHQGZLWKGHVLJQDWHGJURXSVZKRPDUHDWOHDVW Black Owned

Supplier Development: 6XSSOLHUGHYHORSPHQWFRQWULEXWLRQVDVDRI$QQXDO%XGJHW

Enterprise Development: (QWHUSULVHGHYHORSPHQWFRQWULEXWLRQVDVDRIDQQXDOEXGJHW Bonus points: Graduation of one or more Enterprise; for one or more jobs created DVDGLUHFWUHVXOW Socio-economic development 6RFLRHFRQRPLFGHYHORSPHQWFRQWULEXWLRQVDVDRI$QQXDO%XGJHW

116

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 LABOUR RELATIONS ACT, REPORTING REQUIREMENTS

Section 100(a) of the Labour Relations Act, 66 of 1995, requires the organisation as a local government employer body to certify that it accords with its records and report on the QXPEHURILWVPHPEHUVDVDW'HFHPEHURIWKHSUHYLRXV\HDU

5HƮHFWHG KHUHXQGHU LV FHUWLƬFDWLRQ E\ WKH 6HFUHWDU\ LQ IXOƬOPHQWRIWKHVHUHTXLUHPHQWV

(PSOR\HUERG\FHUWLƬFDWLRQ I, Nceba Mqoqi hereby certify that the South African Local *RYHUQPHQW$VVRFLDWLRQDFFRUGVZLWKLWVUHFRUGV The organisation had 257 members as at 31 December 7KHQDPHVRIPHPEHUVDUHLQFOXGHGRQWKHOLVWLQJRI PXQLFLSDOPHPEHUVRI6$/*$LQWKLVDQQXDOUHSRUW

Nceba Mqoqi &KLHI)LQDQFLDO2ƯFHU 31 July 2019 GOVERNANCE FRAMEWORK GOVERNANCE PART F

117

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 REPORT OF THE AUDIT AND RISK COMMITTEE

The SALGA Audit and Risk Committee is pleased to present the • To act as a distinct and clear communication channel UHSRUWIRUWKHƬQDQFLDO\HDUHQGHG0DUFK between the National Executive Committee, Executive 0DQDJHPHQW7HDPDQGH[WHUQDODQGLQWHUQDODXGLWRUV CONSTITUTION AND • To receive, challenge and conclude the fair presentation of OBJECTIVES 6$/*$oVƬQDQFLDOVWDWHPHQWVIRUWKHƬQDQFLDO\HDUHQGLQJ 0DUFK • 7RPRQLWRUWKHHƪHFWLYHQHVVRILQWHUQDOFRQWUROVDQGWKH The committee is constituted in terms of section 77(a) of the LQWHUQDODXGLWIXQFWLRQDW6$/*$ Public Finance Management Act (PFMA) as well as Treasury • To monitor management and the internal and external 5HJXODWLRQV, 3 and 4 and meets as required in its Terms audits as regards the drafting, review and auditing of the of Reference (ToR). DQQXDOƬQDQFLDOVWDWHPHQWV The Audit and Risk Committee is a subcommittee of the • To enhance the objectivity and credibility of reporting to National Executive Committee (NEC) with the following VWDNHKROGHUV objectives: • 7RUHYLHZWKHHƪHFWLYHQHVVHƯFLHQF\DQGWUDQVSDUHQF\RI The Audit and Risk Committee is empowered to request all ƬQDQFLDODQGULVNPDQDJHPHQWDQGLQWHUQDOFRQWUROV\VWHPV information necessary to assess and, if required, act on such PDLQWDLQHGE\6$/*$WKDWFRQWULEXWHWRWKHHƯFLHQWDQG information and convene meetings at any time, including in- HƪHFWLYH XWLOLVDWLRQ RI UHVRXUFHV VDIHJXDUGLQJ RI DVVHWV FRPPLWWHHPHHWLQJVWRDFKLHYHLWVREMHFWLYHV and accomplishment of established strategic objectives IRUDOO6$/*$RSHUDWLRQVRUSURJUDPPHV COMMITTEE MEMBERS • 7RSURPRWHWKHHƯFLHQF\DQGHƪHFWLYHQHVVRIDFFRXQWLQJ DQGPDQDJHPHQWLQIRUPDWLRQV\VWHPV • To monitor that, in accordance with SALGA’s responsibility The Committee comprises members who are external WRLWVPHPEHUVMXVWLƬDEOHGHFLVLRQVDERXWWKHSURYLVLRQRI professionals, functions independently of management services are taken and are aligned with SALGA policies and structures within SALGA and endeavours to remain and SUDFWLFHV SUHVHUYHLWVREMHFWLYLW\DWDOOWLPHV • To ensure that the organisation complies with the relevant laws and regulations and uncovers malpractice, where The Audit and Risk Committee consists of the following DSSOLFDEOH independent non-executive members who are not members of the accounting authority/NEC:

118

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 Good governance never depends upon laws but upon the personal qualities of those who govern. The machinery of government is always subordinate to the will of those who administer that machinery. The most important element of government, therefore, is the method of choosing leaders. – Frank Herbert, 2008

National Executive Committee

ACCOUNTING AUTHORITY / NEC

AUDIT AND RISK COMMITTEE (Independant non-executive Mr Andrew members) Mashifane (Chairperson) GOVERNANCE FRAMEWORK GOVERNANCE

Mr Nala Ms Nosisa Mr Zukisani Mr Victor Mhlongo Kekana Samsam Songelwa PART F

Figure 21: Audit and Risk Committee members.

119

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 7DEOH4XDOLƬFDWLRQVDQGRWKHUUROHVRI&RPPLWWHHPHPEHUV

Member Profession 4XDOLƬFDWLRQV([SHUWLVH Mr Andrew Mashifane • Chartered Accountant (SA) • BCom (Accounting) [Wits] • Registered Auditor with the Independent • Bachelor Accounting Science/(CTA) Hons Regulatory Board for Auditors (IRBA) [Unisa] • Director • &HUWLƬFDWHLQ$GYDQFHG7D[DWLRQ>8QLVD@ Mr Nala Mhlongo • Chartered Global Management • BCom [UWC] Accountant (CGMA) • BCom Hons [UWC] • Chartered Management Accountant (ACMA) • Chartered Accountant (SA) • Director Ms Nosisa Kekana • Advocate of the High Court of South Africa • BJuris [Walter Sisulu University] • LLB [Walter Sisulu University] • Higher Diploma in Company Law [Wits] • LLM [UJ] Mr Zukisani Samsam • Chartered Accountant (SA) • MCom Finance [UP] • Financial Management Consultant • 3RVWJUDGXDWH&HUWLƬFDWHLQ$XGLWLQJ>5$8@ • Postgraduate Diploma in Accounting [Natal] • BCom (Accounting) [Natal] Mr Victor Songelwa • Chartered Accountant (SA) • BCom [Unisa] • Holds several board memberships (past • BCompt Hons [Unisa] DQGSUHVHQW DQGSURIHVVLRQDODƯOLDWLRQV • MBL [Unisa] • Postgraduate Diploma in Auditing [Unisa] COMMITTEE MEETING AND MEMBER ATTENDANCE

7KH&RPPLWWHHPHWIRXUWLPHVGXULQJWKHƬQDQFLDO\HDU7KHPHHWLQJVZHUHDWWHQGHGE\WKHH[WHUQDODXGLWRUVDQG 6$/*$&(2&)2+HDGRI,QWHUQDO$XGLWDQGRWKHUUHOHYDQWFRUSRUDWHRƯFLDOV7KH&KDLUSHUVRQRIWKH$XGLWDQG5LVN&RPPLWWHH UHSRUWVRQFRPPLWWHHDFWLYLWLHVWRWKH1DWLRQDO([HFXWLYH&RPPLWWHHRQDUHJXODUEDVLVLQWHUPVRIWKHFKDUWHU

$OOPHPEHUVGHFODUHGSHUVRQDORUƬQDQFLDOLQWHUHVWVDWHDFK$XGLWDQG5LVN&RPPLWWHHPHHWLQJLQUHVSHFWRILWHPVLQFOXGHGLQWKH DJHQGDRIYDULRXVPHHWLQJV7DEOHKLJKOLJKWVWKH$XGLWDQG5LVN&RPPLWWHHoVUHFRUGRIDWWHQGDQFHDWFRPPLWWHHPHHWLQJV

7DEOH$XGLWDQG5LVN&RPPLWWHHPHPEHUVPHHWLQJVDQGDWWHQGDQFHIRUWKHƬQDQFLDO\HDU

Committee meetings and record of attendance Member 23 May 2018 20 Jul 2018 7 Dec 2018 8 Mar 2019 Mr Andrew Mashifane (Chairperson) 99 9 Mr Nala Mhlongo (Member) 9999 Ms Nosisa Kekana (Member) 8999 Mr Zukisani Samsam (Member) 9999 Mr Victor Songelwa (Member) 9999

Key: 9 Attended meeting 8 Did not attend meeting COMMITTEE RESPONSIBILITIES

The Audit and Risk Committee complied with its responsibilities according to Sections 51(1) (a) (ii) and 76(4) (d) of the PFMA, as ZHOODV7UHDVXU\5HJXODWLRQ7KH$XGLWDQG5LVN&RPPLWWHH&KDUWHULVEDVHGRQIRUPDOO\DGRSWHGDQGDSSURSULDWH7HUPVRI 5HIHUHQFH 7R5 WKDWUHJXODWHVFRPPLWWHHDƪDLUV'XULQJWKHUHYLHZSHULRGWKHFRPPLWWHHGLVFKDUJHGDOOREOLJDWLRQVVHWRXWLQ its Charter. 120

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 THE EFFECTIVENESS OF 6LJQLƬFDQWULVNVDUHHOHYDWHGWRWKH5LVN0DQDJHPHQW INTERNAL CONTROL Committee, which is responsible for ensuring that risks are managed in accordance with these approved organisational ULVNVWUDWHJLHV2SHUDWLRQDOULVNVDUHPRQLWRUHGFRQVWDQWO\WR 7KH $XGLW DQG 5LVN &RPPLWWHH UHYLHZV WKH HƪHFWLYHQHVV RI determine occurrence frequency and adapt controls to deal 6$/*$oVV\VWHPRILQWHUQDOFRQWUROV7KLVUHYLHZLVLQIRUPHG ZLWKWKHULVNH[SRVXUHRIHDFKULVN by the reports submitted by the Internal Audit function, external auditors (Auditor-General) and management, who The Internal Audit Function follows a risk-based approach and is responsible for the development and maintenance of the has developed an appropriate Internal Audit Coverage Plan LQWHUQDOFRQWUROVV\VWHP WRSURYLGHDVVXUDQFHRIWKHHƪHFWLYHQHVVRIULVNPLWLJDWLQJ PHDVXUHVDQGUHSRUWWRWKH$XGLWDQG5LVN&RPPLWWHH 1R VLJQLƬFDQW ƬQGLQJV ZHUH LQGLFDWHG LQ WKHVH UHSRUWV DQG PDQDJHPHQW DGGUHVVHV DQ\ LGHQWLƬHG ZHDNQHVVHV RQ D 7KH$XGLWDQG5LVN&RPPLWWHHKDVVDWLVƬHGLWVHOIWKDW6$/*$oV FRQWLQXRXVEDVLV ULVNPDQDJHPHQWSURFHVVLVHƪHFWLYHDQGHƯFLHQWLQHQVXULQJ WKDWVWUDWHJLFDQGRSHUDWLRQDOULVNVDUHLGHQWLƬHGHDUO\DQG RISK MANAGEMENT PDQDJHG

6$/*$ IROORZV DQ HQWHUSULVHZLGH ULVN LGHQWLƬFDWLRQ EVALUATION OF FINANCIAL methodology that ensures that the entire risk universe of the STATEMENTS RUJDQLVDWLRQLVFRYHUHG7KHSURFHVVGLƪHUHQWLDWHVEHWZHHQ strategic and operational risks to assign the required level The Audit and Risk Committee has: RI PDQDJHPHQW IRFXV RQ LGHQWLƬHG ULVNV 6WUDWHJLF ULVNV DUH • elevated to the Risk Management Committee and ultimately HYDOXDWHGWKHƬQDQFLDOVWDWHPHQWVRI6$/*$IRUWKHSHULRG HQGHG0DUFK the Audit and Risk Committee, while the operational risks are • reviewed the Auditor-General’s report to management PDQDJHGE\OLQHPDQDJHPHQW and management’s response to the report. SALGA adopted and implements the following risk strategies: The Audit and Risk Committee concurs with and accepts • Mitigate and manage – constantly managing risk to reduce WKH $XGLWRU*HQHUDOoV FRQFOXVLRQ RQ WKH DQQXDO ƬQDQFLDO DQGRUUHPRYHQHJDWLYHFRQVHTXHQFHVRUHƪHFWVWRDWWDLQ positive results, which includes updating controls and VWDWHPHQWV DQG LV RI WKH RSLQLRQ WKDW WKH DXGLWHG ƬQDQFLDO statements be accepted and read in conjunction with the changing strategies to reduce or eliminate a risk. UHSRUWRIWKH$XGLWRU*HQHUDO • Avoid – avoiding risks above the organisation’s qualitative and quantitative risk tolerance level, based on SALGA’s annually-reviewed Risk and Materiality Framework. • Insure – outsourcing risk by insuring against risks inherent to the nature of the organisation in conjunction with related internal policies,HJ6$/*$LVLQVXUHGDJDLQVWWKH loss of operational working tools, such as laptops but also has a loss control policy that augments the outsourcing strategy. Andrew Mashifane • Accept – managing the acceptance of risks that fall outside Chairperson the organisation’s Risk and Materiality Framework and are 31 July 2019 QRW PDWHULDO RU SRVH VLJQLƬFDQW RSHUDWLRQDO RU VWUDWHJLF GOVERNANCE FRAMEWORK GOVERNANCE ULVNWR6$/*$ PART F

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SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 REPORT OF THE PERFORMANCE MANAGEMENT AND REMUNERATION COMMITTEE

The Performance Management and Remuneration Committee The Committee’s Terms of Reference include the following is pleased to present its report for the year ended 31 March responsibilities: • promoting consistent employee attraction, retention, motivation and reward and performance improvement The Committee is a subcommittee of the National Executive and assessment Committee (NEC) and supports the implementation and • approving the remuneration policy adopted by the LQVWLWXWLRQDOLVDWLRQ RI SHUIRUPDQFH PDQDJHPHQW LQ 6$/*$ organisation The Committee is an advisory body to the NEC, authorised to • ensuring that the remuneration strategy is market-related review, guide and support SALGA in the proper implementation and competitive and strategic alignment of the organisation’s Performance • GHWHUPLQLQJVSHFLƬFH[HFXWLYHPDQDJHPHQWUHPXQHUDWLRQ Management Policy and procedures, remuneration philosophy packages that include short- and long-term performance- DQGVWUDWHJ\ based incentives • considering the relationship between executive RESPONSIBILITIES OF THE management and employee remuneration COMMITTEE • approving the design of short-term incentive schemes, including determining targets and participation thresholds • approving the design of the long-term incentive schemes, The main purpose of the Committee is to ensure the adoption including determining the allocation criteria and of remuneration policies that attract and retain top talent, are performance conditions aligned with the organisation’s strategy and drive short- and • reviewing and monitoring progress in people management ORQJWHUPSHUIRUPDQFH • providing oversight of targets and ensuring that these UHPDLQFKDOOHQJLQJDQGUHƮHFW6$/*$oVVWUDWHJLFREMHFWLYHV The Committee oversees: • recommending and suggesting actions to achieve agreed a) proper application of organisational Performance targets or assist where deviations from targets are Management Policy and procedures, remuneration SUREDEOH philosophies, strategies and other policies aligned with the approved organisational strategy and objectives of SALGA COMPOSITION OF THE b) recommendations to the NEC on all matters relating to performance management and remuneration at SALGA COMMITTEE c) that policy frameworks and policy decisions taken by the REMCO are binding to all administrative structures of Committee members comprise external, private sector SALGA professionals and SALGA NEC members as H[RƯFLRPHPEHUV d) the presentation of reports to and feedback from SALGA’s The Committee is independent of SALGA’s management QDWLRQDORƯFHEHDUHUVDQGQDWLRQDOH[HFXWLYHFRPPLWWHHV structures and endeavours to retain and preserve its objectivity RQDOOZRUNUHODWHGPDWWHUV DWDOOWLPHV

122

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 Good governance, driven by performance excellence and fair remuneration, should be the hallmark of local government. At SALGA, implementation with integrity in this regard is a core passion, pursued with vigour.

The Performance Management and Remuneration Committee consists of the following independent, non-executive members DQGWKHLUUROHVDQGUHVSRQVLELOLWLHVDUHUHƮHFWHGLQ)LJXUHDQG7DEOH

National Executive Committee ACCOUNTING AUTHORITY / NEC

PERFORMANCE MANAGEMENT AND REMUNERATION COMMITTEE Mr Chose (Independent non-executive members) Choeu (Chairperson)

Adv Motlatjo Ms Barbara Ms Rosetta Ralefatane Lombard Xaba GOVERNANCE FRAMEWORK GOVERNANCE PART F

Cllr &OOU6HEHQ]LOH Cllr Robert Cllr Parks Tau Thembisile 1JDQJHOL]ZH Mashego Nkadimeng

National Executive Committee members, ex-officio members of REMCO

Figure 22: Performance Management and Remuneration Committee members. 123

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 7DEOH5ROHVDQGTXDOLƬFDWLRQVRI&RPPLWWHHPHPEHUV

Member Profession 4XDOLƬFDWLRQV([SHUWLVH Mr Chose Choeu • Director • BA (cum laude) [University of the North] • Holds several board • BA Hons (cum laude) [University of the North] memberships (past and • BA Masters (International Relations) [University of Denver] present) and professional • Diploma in Company Direction [Graduate institute of DƯOLDWLRQV Management and Technology] • &HUWLƬFDWHLQ)LQDQFHIRU1RQ)LQDQFLDO0DQDJHUV>:LWV Graduate School of Business Administration] • Executive Development Programme [Wits] • 0DVWHUVRI3KLORVRSK\>8QLYHUVLW\RI3RUW(OL]DEHWK@ • $FFHOHUDWHG'LUHFWRUVKLS3URJUDPPH&HUWLƬFDWH>,QVWLWXWH of Directors] • +ROGVVHYHUDORWKHUTXDOLƬFDWLRQVWKDWUDQJHIURP3ULPDU\ 7HDFKLQJ&HUWLƬFDWH3DUOLDPHQWDU\$GPLQLVWUDWLRQDQG Procedure; Telecommunications Network Fundamentals; Telecommunications Policy and Management; Telecommunications Regulatory Master Class; Diploma in Public Relations; Diploma in Business Management Adv Motlatjo Ralefatane • Advocate of the Supreme • BProc [University of the North] &RXUWRI6RXWK$IULFD • Bachelor of Laws (LLB) [University of the North] • Holds several board • &HUWLƬFDWHLQ/DERXU5HODWLRQV>8QLYHUVLW\RI3UHWRULD@ memberships (past and • &HUWLƬFDWHLQ+XPDQ5LJKWV>8QLYHUVLW\RI3UHWRULD@ present) and professional • &HUWLƬFDWHLQ&RUSRUDWH*RYHUQDQFH>,QVWLWXWHRI'LUHFWRUV DƯOLDWLRQV of South Africa] • &HUWLƬFDWHLQ'LUHFWRUVKLS>8QLYHUVLW\RIWKH:LWZDWHUVUDQG@ • +ROGVYDULRXVRWKHUTXDOLƬFDWLRQVIURPVHYHUDOLQVWLWXWLRQV Ms Barbara Lombard • Executive: Corporate • Diploma in General Nursing and Midwifery [Baragwanath Services Hospital] • Non-executive director on • Industrial Relations [Wits Business School] various other boards and • Executive Development Programme – CTS [New School of board subcommittees Social Research New York, USA] • Nominated by CEO • International Registry of Organisation Design [Louw Du Toit &RPPXQLFDWLRQVPDJD]LQH & Associates, UK] for p0RVW,QƮXHQWLDO:RPHQLQ • Telecommunications Network Engineering [Matthew Business and Government 2014 Bolton, UK] Awards” Ms Rosetta Xaba • Chartered Accountant (SA) • BSc [Wits] • Director • 3RVWJUDGXDWH'LSORPDLQ(GXFDWLRQ>6ZD]LODQG@ • BCompt Hons [Unisa] • Postgraduate Diploma in Accounting [Natal] • Accounting Professional Training [UJ and UCT] RECORD OF MEETINGS AND ATTENDANCE

&RPPLWWHHPHHWLQJVDUHVFKHGXOHGDFFRUGLQJWRWKH7R5ZLWK1(&PHPEHUVDQGWKH&(2DWWHQGLQJE\LQYLWDWLRQ7KH&RPPLWWHH &KDLUSHUVRQUHSRUWVWRWKH1(&RQWKHDFWLYLWLHVRIWKHFRPPLWWHH7KHFRPPLWWHHPHWWKUHHWLPHVGXULQJWKHSDVWƬQDQFLDO\HDU

124

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 7DEOH&RPPLWWHHPHPEHUVPHHWLQJVDQGDWWHQGDQFHIRUWKHƬQDQFLDO\HDU

Member Meeting dates and record of member attendance 29 June 2018 30 November 2018 29 March 2019 Mr Chose Choeu 999 Adv Josephine Ralefatane 999 Ms Barbara Lombard 999 Ms Rosetta Xaba 999

Key: 9 Attended the meeting REMUNERATION PHILOSOPHY EMPLOYEE REMUNERATION

SALGA’s remuneration philosophy is designed to attract, The total remuneration package for other employees consists develop and retain passionate, committed and talented of: SHRSOHWRLPSOHPHQWWKHRYHUDOO6$/*$VWUDWHJ\HƪHFWLYHO\WR • 7RWDOJXDUDQWHHGSD\WKDWLQFOXGHVEHQHƬWVDQGLVVXEMHFW WKHEHQHƬWRILWVPHPEHUV to an annual review by the Performance Management and 5HPXQHUDWLRQ&RPPLWWHH The remuneration strategy for executive management is • Variable pay short-term incentive scheme designed to based on principles of retaining key and critical skills and focus employees on achieving the short-term strategic, driving performance aligned with SALGA’s strategy through ƬQDQFLDO DQG RSHUDWLRQDO REMHFWLYHV RI WKH $QQXDO JXDUDQWHHG SD\ DQG VKRUW DQG ORQJWHUP LQFHQWLYHV 3HUIRUPDQFH 3ODQ $33 7KH LQFHQWLYH LV SD\DEOH XSRQ $ VLJQLƬFDQW SRUWLRQ RI WKH WRWDO SRWHQWLDO H[HFXWLYH DFKLHYLQJVWUDWHJ\DOLJQHGSUHGHƬQHGVWUHWFKWDUJHWVDQG management remuneration is performance-related to embed rewards performance when targets are met, with higher behaviour that optimises organisational performance within UHZDUGVIRUH[FHSWLRQDOSHUIRUPDQFH DQ\SUHYDLOLQJHFRQRPLFHQYLURQPHQW RETENTION SCHEME – VARIABLE LONG- The Performance Management and Remuneration Committee TERM INCENTIVE (LTI) SCHEME DQG 1(& DSSURYHG WKH 6$/*$ 5HPXQHUDWLRQ DQG %HQHƬWV Policy that espouses the organisations remuneration During the year under review on 14 March 2015, the Committee philosophy that stipulates, inter alia, that all positions are approved a performance-based, long-term incentive (LTI) HYDOXDWHGIRUUHODWLYHVL]HVFRSHDQGLPSDFWDFFRUGLQJWRWKH VFKHPH WR UHWDLQ Ƭ[HGWHUP FRQWUDFW HPSOR\HHV ZKR DUH +$

The short-term incentive (STI) scheme, cascaded to all PART F SD\DEOH XSRQ DFKLHYLQJ SUHGHƬQHG VWUDWHJ\DOLJQHG employee levels, is a variable pay short-term incentive scheme stretch targets and rewards performance for targets met, designed to focus all employees on achieving the short-term ZLWKKLJKHUUHZDUGVIRUH[FHSWLRQDOSHUIRUPDQFH VWUDWHJLFƬQDQFLDODQGRSHUDWLRQDOREMHFWLYHVRIWKH$QQXDO • Variable long-term incentive share schemes designed to 3HUIRUPDQFH 3ODQ $33 7KH LQFHQWLYH LV SD\DEOH XSRQ align senior management objectives with those of SALGA’s DFKLHYLQJ SUHGHƬQHG VWUHWFK WDUJHWV LQ OLQH ZLWK 6$/*$oV ƬYH\HDU VWUDWHJLFSODQWRHQVXUHVXVWDLQDEOH VWUDWHJ\ ORQJWHUPSHUIRUPDQFH

125

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 BEHAVIOURS CHARTER – VARIABLE SHORT- outside of the salary band maximum, despite annual band TERM INCENTIVE (STI) SCHEME adjustments to cover base-cost-of-living increases • Salary packages that exceed the salary band maximum This charter was adopted as part of SALGA’s performance ZLWKLQWKHVDODU\IUDPHZRUN PDQDJHPHQWV\VWHPIRUWKHƬUVWWLPHLQWKHƬQDQFLDO year as a framework for key behaviours that support the (PSOR\HHVZLWKVDODU\SDFNDJHVDVLGHQWLƬHGDERYHDUHULQJ RUJDQLVDWLRQDOFXOWXUHDQGYDOXHV fenced and managed on a “personal-to-holder basis” until their HPSOR\PHQWWHUPH[SLUHV The objectives are to shape operational excellence, support management and organisational development, develop 6$/*$HPSOR\VLWVH[HFXWLYHPDQDJHPHQWWHDPRQDƬ[HG capacity and core leadership within the organisation and WHUPFRQWUDFW7KLVDSSOLHVWRWKH&(2DQGGLUHFWUHSRUWV LGHQWLI\DUHDVIRULQGLYLGXDODQGWHDPGHYHORSPHQW Currently, the CEO is remunerated on a “personal-to-holder basis” until the term of contract expires or through natural The charter carries a 15 per cent weighting in the overall DWWULWLRQRUHDUOLHU5HPXQHUDWLRQIRUVXFFHHGLQJLQFXPEHQWV employee performance scorecard and is premised on two will be according to approved salary scales to phase out the types of behavioural components: enabling (supported by “personal-to-holderqOHJDF\SDFNDJHV GLVFORVHGLQWKLVUHSRUW the organisation) and constraining (frowned upon by the RUJDQLVDWLRQ (ƪRUWVWRPDQDJHWKHHVFDODWLRQLQUHPXQHUDWLRQVSHFLƬFDOO\ DWH[HFXWLYHOHYHOKDYHEHHQDƪHFWHGE\WKHQHHGWRUHPDLQ SALGA’s individual performance management system (iPMS) competitive in the labour market and mitigate a growing encourages enabling behaviour aligned with its values to: WUHQGE\PHWURSROLWDQPXQLFLSDOLWLHVWRSRDFKWRSH[HFXWLYHV • uphold the highest level of organisational ethics and During the past year, these factors necessitated a benchmark adhere to policies and procedures of executive pay against Metros and a review of SALGA’s • be responsive and member-centric H[HFXWLYHUHPXQHUDWLRQSROLF\ • strive for and recognise excellence • work collectively in cooperative teams SALGA remains committed, however, to the sector imperative • communicate timeously, accurately and appropriately RI QRUPDOLVLQJ UHPXQHUDWLRQ VSHFLƬFDOO\ H[HFXWLYH VDODU\ • SURPRWHPXWXDOUHVSHFW SDFNDJHV 7KLV LQFOXGHV DSSO\LQJ WKH XSSHU OLPLW VHFWRU guidelines set by the Minister of Cooperative Governance and These behaviours contain sub-behavioural statements that 7UDGLWLRQDO$ƪDLUV &R*7$ ZKLFKDOVRFRPSHOPXQLFLSDOLWLHV GHWHUPLQH UDWLQJV %HKDYLRXUV DUH PHDVXUHG E\ DSSO\LQJ D to recruit executives at salary packages within the prescribed 360-degree assessment that includes subordinate, peer and VDODU\ OLPLWV *RLQJ IRUZDUG 6$/*$ ZLOO FRPSO\ ZLWK WKHVH VXSHUYLVRUIHHGEDFNDVZHOODVVHOIHYDOXDWLRQ JXLGHOLQHVWRGHWHUPLQHVDODU\SDFNDJHVIRUQHZUHFUXLWV

PERSONAL-TO-HOLDER REMUNERATION ORGANISATIONAL PERFORMANCE PACKAGES The Committee monitors and reviews organisational SALGA manages remuneration escalation according to the SHUIRUPDQFH RQ D TXDUWHUO\ EDVLV 6$/*$oV FRPPHQGDEOH salary grading and remuneration curves of the Hay system performance during the past year of attaining 98 per cent WKDW LGHQWLƬHV HPSOR\HHV ZLWKLQ DQG RXWVLGH WKH DSSURYHG of its targets against pre-determined objectives attests JUDGLQJ VFDOHV ,QVWDQFHV ZKHUH HPSOR\HHV UHFHLYH VDODU\ WR WKH &RPPLWWHHoV FRQVLVWHQW DQG HƪHFWLYH RYHUVLJKW RI packages that exceed the salary band maximum within the RUJDQLVDWLRQDOSHUIRUPDQFH organisation’s salary framework include: • Salaries inherited during the amalgamation of provincial INDIVIDUAL PERFORMANCE MANAGEMENT RƯFHVLQWRWKHRUJDQLVDWLRQ • 6DODULHVWKDWH[FHHGWKHVDODU\EDQGPD[LPXPRƪHUHGWR The Committee also oversees the performance of executives DWWUDFWVSHFLƬFVNLOOV RQO\ZKHUHWKHVXFFHVVIXOFDQGLGDWHoV in the formulation of targets to ensure that these remain existing salary package is equal to or higher than the FKDOOHQJLQJ DQG UHƮHFW 6$/*$oV VWUDWHJLF REMHFWLYHV 7KH SALGA salary band maximum) Committee formulated the organisations’ performance curve • Higher than average annual salary increases due to by comparing individual performance outcomes with a standard continuous performance excellence that moved salaries SHUIRUPDQFHFXUYHIRUKLJKSHUIRUPDQFHRUJDQLVDWLRQV

126

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 EVALUATION OF PERFORMANCE AGAINST PRE-DETERMINED OBJECTIVES

The Performance Management and Remuneration Committee evaluated SALGA’s performance against predetermined objectives for the period ended 31 March 2019 and reviewed the Auditor-General’s report to management and management’s response to the report.

The Committee concurs with and is of the opinion that the Auditor-General’s conclusion about the performance against predetermined objectives be accepted and read in conjunction ZLWKWKHUHSRUWRIWKH$XGLWRU*HQHUDO

Chose Choeu Chairperson 31 July 2019 GOVERNANCE FRAMEWORK GOVERNANCE PART F

127

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 PART ANNUAL FINANCIAL STATEMENTS G

Money won’t create success, the freedom to make it will. We must use time wisely and forever realise that the time is always ripe to GRULJKW0DQoVJRRGQHVVLVDƮDPHWKDWFDQEHKLGGHQEXWQHYHU extinguished. - Nelson Mandela

128

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 CONTENTS

5HYLHZE\WKH&KLHI)LQDQFLDO2ƯFHU ...... 130

Statement of Gifts, Donations and Sponsorships in Cash ...... 139

Report on Compliance with Section 98(2) (B) (I) of the Labour Relations Act, 66 of 1995 ...... 140

Report of the Auditor-General to Parliament on SALGA ...... 142

Accounting Authority’s Responsibilities and Approval ...... 144

Statement of Financial Position ...... 145

Statement of Financial Performance ...... 146

6WDWHPHQWRI6XUSOXVRU'HƬFLWDQG2WKHU&RPSUHKHQVLYH,QFRPH ...... 147

Statement of Changes in Net Assets ...... 148

Cash Flow Statement ...... 149

Statement of Comparison of Budget and Actual Amounts...... 150

Accounting Policies ...... 151

Notes to the Annual Financial Statements ...... 172 ANNUAL FINANCIAL STATEMENTS ANNUAL PART G

129

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 REVIEW BY THE CHIEF FINANCIAL OFFICER

OVERVIEW OF OPERATING RESULTS

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Statement of Financial Performance 2019 2018 2019 2018 2017 R million % change % change Operating revenue 625.0 579.2 589.8 7.9 (1.8) Operating expenditure (640.6) (596.3) (593.2) 7.4 0.5 Operating surplus (15.6) (17.1) (3.4) (9.1) 404.0 Net non-operating revenue 28.9 25.3 18.4 14.2 37.4 Surplus for the period 13.3 8.2 15.0 62.8 (45.5)

7RWDO RSHUDWLQJ UHYHQXH LQFUHDVHG E\ SHU FHQW WR 5 PLOOLRQ 7KH LQFUHDVH LQ RSHUDWLQJ UHYHQXH LV SULPDULO\ GXH WR an increase of 78 per cent in delegate registration fees for the provincial and national member assemblies (PMAs and NMA) FRQYHQHGGXULQJWKH\HDUXQGHUUHYLHZ0HPEHUVKLSOHY\UHYHQXHLQFUHDVHGE\SHUFHQWZKLFKZDVDWWULEXWDEOHWRLQƮDWLRQDU\ DGMXVWPHQWVDQGRUJDQLFJURZWKRIWKHEDVHXVHGWRGHULYHWKHPHPEHUVKLSOHY\DPRXQW

7RWDORSHUDWLQJH[SHQGLWXUHLQFUHDVHGE\SHUFHQWWR5PLOOLRQ7KHLQFUHDVHLQRSHUDWLQJH[SHQGLWXUHZDVSULPDULO\ due to an increase in the allowance for doubtful debt of over 100 per cent as a result of member municipalities that entered into VHWWOHPHQWDUUDQJHPHQWVZLWKWKHDVVRFLDWLRQEHFDXVHRIƬQDQFLDOGLƯFXOW\

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130

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 The past year’s phased approach to acquiring SALGA’s administrative buildings VHWRXWWRHQKDQFHLWVEDODQFHVKHHWVWLPXODWHFDVKƮRZDQGLQMHFWIXQGLQJLQWR SURJUDPPHVWKDWEHQHƬW6$/*$PHPEHUVGLUHFWO\

MEMBERSHIP LEVIES

SALGA applies the following formula to calculate membership levies:

Membership levy formula Metropolitan municipalities Flat rate of plus 1 percentage point above the Consumer Price Index (CPI) Local and district municipalities RIDQQXDOVDODU\EXGJHWZLWKDPLQLPXPRI5{

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MEMBERSHIP LEVY PAYMENT LEVELS

As at 31 March 2019, 78 per cent (2018: 79 per cent) of all membership levies had been paid, while the collection rate was three SHUFHQWDJHSRLQWVEHORZEXGJHWDWSHUFHQW SHUFHQW

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PAYMENT LEVELS PER PROVINCE 2019 2018 Current Current Overall Overall Percentage year year FINANCIAL STATEMENTS ANNUAL Eastern Cape 83 71 85 73 Free State 82 78 80 75 Gauteng 76778888 PART G KwaZulu-Natal 92 82 92 83 Limpopo 89 83 99 93 Mpumalanga 97 100 77 79 Northern Cape 69 50 66 50 North West 76 57 73 61 Western Cape 99 97 97 96 Total payment levels rate 86 78 87 79

131

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 A comparison of the cumulative monthly interval of membership levy payment levels between 2018/19 and 2017/18 is illustrated EHORZ 23 25 25 48 66 71 72 75 77 78 78 78 80

0 Apr May Jun Jul Aug Sept OctNov Dec Jan Feb Mar

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The key feature of the payments level curve for 2018/19 is that a cumulative payment level of 48 per cent (2018: 41 per cent) was achieved by the constitutional due date of 31 July 2018, when almost half of member municipalities had settled their membership OHYLHV

In terms of SALGA’s Constitution (as adopted in December 2016), membership levies are billed on 1 April and are payable by 31 July HDFK\HDU7KLVLPSOLHVDSD\PHQWOHYHORISHUFHQWE\-XO\LIDOOPHPEHUVSD\E\WKHGXHGDWH

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20 Payment levels percentage levels Payment percentage levels Payment 10

0 Apr May Jun Jul Aug Sept Oct NovDec Jan Feb Mar

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132

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 REVENUE

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TOTAL OPERATING REVENUE

7KHRUJDQLVDWLRQLVSULPDULO\IXQGHGIURPPHPEHUVKLSIHHVOHYLHGRQPHPEHUPXQLFLSDOLWLHV0HPEHUVKLSOHY\UHYHQXHUHPDLQHG WKHPDLQVRXUFHRILQFRPHIRU6$/*$IRUWKH\HDUXQGHUUHYLHZDQGFRPSULVHGSHUFHQW SHUFHQW RIWRWDOUHYHQXH

TOTAL OPERATING REVENUE 2019 2018 2019 2018 2017 R million % change % change Rendering of services - membership levies 563.8 525.1 495.0 7.4 6.1 Transfers and subsidies - Executive Authority 33.1 31.3 29.5 5.8 6.1 Revenue from non-exchange transactions 16.0 14.7 34.8 8.8 (57.8) Delegate registration fee revenue - exchange transactions 10.6 5.9 21.4 77.6 (72.2) Other revenue from exchange transactions 1.5 2.1 1.8 (31.0) 18.4 Total operating revenue 625.0 579.2 589.8 7.9 (1.8)

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7RWDORSHUDWLQJUHYHQXHLQFUHDVHGE\SHUFHQWRU5PLOOLRQWR5PLOOLRQ7KH10$KHOGLQ'HFHPEHUUHVXOWHG LQDVLJQLƬFDQWLQFUHDVHRISHUFHQWLQGHOHJDWHUHJLVWUDWLRQIHHVIRUWKH\HDUXQGHUUHYLHZ7UDQVIHUVDQGVXEVLGLHVIURP WKH ([HFXWLYH $XWKRULW\ LQFUHDVHG E\ SHU FHQW WR 5 PLOOLRQ 5 PLOOLRQ :KLOVW UHYHQXH IURP QRQH[FKDQJH WUDQVDFWLRQVLQFUHDVHGE\SHUFHQWGXHWRWKHLPSOHPHQWDWLRQRIGRQRUIXQGHGSURJUDPPHVVXFKDVWKH(XURSHDQ8QLRQ IXQGHG(QKDQFLQJ0XQLFLSDO&DSDFLW\IRU'HYHORSPHQW

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Operating revenue distribution per category - 2019 Operating revenue distribution per category - 2018

3% 1% 5% 2% 5% 3% ANNUAL FINANCIAL STATEMENTS ANNUAL 201990% 2018 91% PART G

Other revenue Other revenue Rendering of services - membership levies Rendering of services - membership levies Transfers and subsidies - Executive Authority Transfers and subsidies - Executive Authority Revenue from non-exchange transactions Revenue from non-exchange transactions

133

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 EXPENDITURE

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TOTAL OPERATING EXPENSES Operating expenditure by function 2019 2018 2019 2018 2017 R million % change % change Employee-related costs 100.4 83.1 95.4 20.8 (12.9) Programme costs 349.3 355.8 344.4 (1.8) 3.3 Administrative overheads 113.4 82.7 59.2 37.2 39.5 Depreciation and amortisation 7.2 8.1 6.6 (11.8) 22.5 Other operating expenses 70.3 66.6 87.5 5.5 (23.9) Total operating expenditure 640.6 596.3 593.2 7.4 0.5

Programme costs comprised 55 per cent (2018: 61 per cent) of total operating expenditure and consisted of direct programme FRVWVDQGSURJUDPPHLPSOHPHQWDWLRQFRVWV

Programme costs are incurred in pursuance of the organisation’s mandate, namely for:

• lobbying, advocacy and representation • the employer role • capacity building • support and advice; • VWUDWHJLFSURƬOLQJRIWKHORFDOJRYHUQPHQWVHFWRU • NQRZOHGJHDQGLQIRUPDWLRQVKDULQJ

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Operating expenditure distribution per category - 2019 Operating expenditure distribution per category - 2018

11% 11% 1% 16% 1% 14%

18% 14% 2019 2018

54% 60%

Employee-related costs Employee-related costs Programme costs Programme costs Administrative overheads Administrative overheads Depreciation and amortisation Depreciation and amortisation Other operating expenses Other operating expenses

134

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NET NON-OPERATING REVENUE Net non-operating revenue 2019 2018 2019 2018 2017 R million % change % change Investment revenue 30.3 26.5 19.9 14.6 33.0 Finance costs (1.4) (1.1) (1.5) 23.6 (22.2) Net non-operating income 28.9 25.3 18.4 14.2 37.4

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)LQDQFHFRVWVLQFUHDVHGWRSHUFHQWWR5PLOOLRQ 5PLOOLRQ COMPARISON OF ACTUAL OPERATING RESULTS AGAINST ADJUSTED BUDGET

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Comparison of actual operating results against 2018/2019 adjusted budget

Variance FINANCIAL STATEMENTS ANNUAL Actual Budget Variance R million % Revenue 625.0 652.2 (27.3) (4.2) Expenses 640.6 659.2 18.7 2.8

Non-operating revenue 28.9 7.4 21.5 290.7 PART G Operating surplus 13.3 0.4 12.9 3,215.7

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135

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 A comparison of actual operating results against adjusted budget is illustrated below:

R7,4 R28,9 R659,2 R640,6 R652,2 R625,0 R800,0

R700,0

R600,0

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EXPLANATION OF VARIANCES

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REVENUE • Investment revenueLVDKHDGRIEXGJHWGXHWRDQLQFUHDVHRISHUFHQWLQWKHDYHUDJHFDVKEDODQFHVKHOGWKURXJKRXWWKH ƬQDQFLDO\HDU7KHSRVLWLYHYDULDQFHLV5PLOOLRQRUPRUHWKDQSHUFHQW • Revenue from non-exchange transactionsUHƮHFWDQHJDWLYHYDULDQFHRI5PLOOLRQRUSHUFHQW7KHYDULDQFHLVSDUWO\ GXHWRXQVSHQWFRQGLWLRQDOJUDQWVRI5PLOOLRQZKHUHJUDQWFRQGLWLRQVZHUHQRWPHWEHFDXVHRISURJUDPPHVWKDWZHUH VWLOOEHLQJUROOHGRXW7KHQRQUHDOLVDWLRQRIDQWLFLSDWHGJUDQWUHYHQXHDOVRFRQWULEXWHGWRWKHRYHUDOOQHJDWLYHYDULDQFH

EXPENDITURE • Employee costsUHƮHFWDSRVLWLYHYDULDQFHRI5PLOOLRQRUSHUFHQWGXHWRDPRUDWRULXPRQƬOOLQJQRQFULWLFDOYDFDQFLHV GXULQJWKHRUJDQLVDWLRQDOUHGHVLJQSKDVH • Administrative overheads DUHDKHDGRIEXGJHWGXHWRD5PLOOLRQLQFUHDVHLQWKHDOORZDQFHIRUGRXEWIXOGHEWIRUPHPEHU PXQLFLSDOLWLHVWKDWHQWHUHGLQWRVHWWOHPHQWDUUDQJHPHQWVZLWK6$/*$7KHQHJDWLYHYDULDQFHLV5PLOOLRQRUSHUFHQW • Depreciation and amortisation lagged behind budget due to the review of the remaining useful life for the IT equipment asset FODVV7KHSRVLWLYHYDULDQFHLV5PLOOLRQRUSHUFHQW • Finance costsLQGLFDWHGDQHJDWLYHYDULDQFHRI5PLOOLRQRUSHUFHQWGXHWRƬQDQFHOHDVHDFTXLVLWLRQRIQHZODERXU VDYLQJGHYLFHV

136

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 FINANCIAL POSITION

STATEMENT OF FINANCIAL POSITION 2019 2018 2019 2018 2017 R million % change % change Current assets 229.4 213.6 222.0 7.4 (3.8) Non-current assets 59.9 57.8 37.8 3.8 52.8 Total assets 289.4 271.4 259.8 6.6 4.4 Current liabilities 108.9 102.3 99.2 6.5 3.2 Non-current liabilities 5.3 7.3 7.0 (27.1) 3.4 Total liabilities 114.2 109.5 106.2 4.3 3.2 Total net assets 175.2 161.8 153.6 8.2 5.3 Total net assets and liabilities 289.4 271.4 259.8 6.6 4.4

NET ASSETS

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CURRENT ASSETS

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NON-CURRENT ASSETS

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CAPITAL EXPENDITURE CAPITAL EXPENDITURE 2019 2018 2019 2018 2017

R million % change % change FINANCIAL STATEMENTS ANNUAL Capital acquisitions 10.5 30.7 9.8 (65.7) 212.6

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137

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 OUTLOOK FOR THE YEAR AHEAD

As SALGA forges ahead with its 2017-2022 Strategic Plan, the organisation is reviewing its operating model to provide members ZLWK DQ HQKDQFHG H[SHULHQFH PHPEHUFHQWULF ZKHQ LQWHUDFWLQJ ZLWK WKH RUJDQLVDWLRQ 7KH UHYLHZ HQFRPSDVVHV VHYHUDO projects, including: 1) Business Process Re-engineering and Systems Architecture 2) 3URGXFWVDQG6HUYLFHV0DSSLQJ

Business Process Re-engineering and Systems Architecture project objectives: • 'HYHORSDPHPEHUFHQWULFRSHUDWLQJPRGHOWKDWZLOOUHVSRQGWR6$/*$oVIXWXUHƬQDQFLDOVXVWDLQDELOLW\UHTXLUHPHQWV • Conduct a business process review and recommend process re-engineering improvements • Review and design the business systems architecture of the SALGA’s business systems architecture to support its modernisation • 5HFRPPHQGRSHUDWLQJPDQDJHPHQWV\VWHPV

Products and Service Mapping project objective: • 'HYHORSDFDWDORJXHIRUWDUJHWHGPXQLFLSDOEHQHƬFLDULHVDQGVHFWRUGHSDUWPHQWVWRGHƬQH6$/*$oVSURGXFWVDQGVHUYLFHV VHUYLFHVWDQGDUGVHOLJLELOLW\FULWHULDGHOLYHU\PHWKRGDQGFRVWLPSOLFDWLRQV

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Lastly, I also thank the members of the Performance Management and Remuneration Committee and Audit and Risk Committee IRUWKHLUZLVHFRXQVHODQGVWUDWHJLFGLUHFWLRQDVSDUWRIWKHLURYHUVLJKWUROH

Nceba Mqoqi &KLHI)LQDQFLDO2ƯFHU 31 July 2019

138

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 STATEMENT OF GIFTS, DONATIONS AND SPONSORSHIPS IN CASH

SALGA greatly appreciated the sponsorships and donations from the organisations and stakeholders listed below for some of its DFWLYLWLHVGXULQJWKHSDVW\HDU

Details of sponsorship, donation, partnered event or Amount Name of sponsor or donor programme Rand SBS Water Systems (Pty) Ltd KwaZulu-Natal Provincial Members Assembly, 2018 50,000 0D[LPXP3URƬW5HFRYHU\ Eastern Cape Provincial Members Assembly, 2018 50,000 FNB Public Sector Banking Mpumalanga Provincial Members Assembly, 2018 10,000 Standard Bank South Africa Limpopo Provincial Members Assembly, 2018 50,000 SBS Water Systems (Pty) LTD National Members Assembly, 2018 150,000 Deutsche Gesellschaft Für Internationale Municipal Infrastructure Financing Conference, 2018 466,863 Zusammenarbeit Deutsche Gesellschaft Für Internationale Municipal Infrastructure Financing Conference, 2018 181,887 Zusammenarbeit CCG Systems (Pty) Ltd National Municipal Managers Forum 13 - 14 November 2018 120,000 Ntiyiso Consulting National Members Assembly, 2018 250,000 Old Mutual National Members Assembly, 2018 100,000 Audit & Risk Management Solutions (Pty) National Members Assembly ,2018 300,000 Ltd Bigen National Members Assembly, 2018 250,000 Kamstrup South Africa (Pty) Ltd Free State Provincial Members Assembly, 2018 3,000 Nedbank Free State Provincial Members Assembly, 2018 10,000 0D[LPXP3URƬW5HFRYHU\ Free State Provincial Members Assembly, 2018 15,000 Carbonblaq Free State Provincial Members Assembly, 2018 44,772 SBS Water Systems (Pty) Ltd PMAs and Council of Mayors 2019 50,000 Department of Cooperative Governance KwaZulu-Natal Climate Change Compact of Mayors Gala 60,000 DQG7UDGLWLRQDO$ƪDLUV Dinner SBS Water Systems (Pty) Ltd KwaZulu-Natal Provincial Members Assembly, 2018 50,000 Flooid (Pty) Ltd Municipal Innovative Infrastructure Financing Conference, 200,000 2018 ABSA Business Bank Municipal Innovative Infrastructure Financing Conference, 250,000 2018 NEPAD Business Foundation Municipal Innovative Infrastructure Finance Conference, 20,000 2018 FINANCIAL STATEMENTS ANNUAL Twenty-First Century Labour Law Seminar, 2018 5,000 SBS Water Systems (Pty) Ltd Northern Cape Provincial Members Assembly, 2018 50,000

Old Mutual Life Assurance (South Africa) Mpumalanga Provincial Members Assembly, 2018 50,000 PART G Limited Sedibeng Water Northern Cape Provincial Members Assembly 2018 50,000 Standard Bank South Africa Northern Cape Provincial Members Assembly, 2018 50,000 Sedibeng Water North West Provincial Members Assembly, 2018 50,000 Magalies Water North West Provincial Members Assembly, 2018 50,000 Vodacom Service Provider (Pty) Ltd Northern West Provincial Members Assembly, 2018 100,000 ABSA Retail Business Banking Western Cape Provincial Members Assembly, 2018 50,000 Total sponsorships and donations 3,136,522

139

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 REPORT ON COMPLIANCE WITH SECTION 98(2)(B)(I) OF THE LABOUR RELATIONS ACT, 66 OF 1995

We have undertaken a reasonable assurance engagement on compliance with Section 98(2)(b)(i) of the Labour Relations Act, 66 RI p/5$q DVDPHQGHGRIWKH6RXWK$IULFDQ/RFDO*RYHUQPHQW$VVRFLDWLRQ p6$/*$q IRUWKH\HDUHQGHG0DUFK 7KLVHQJDJHPHQWZDVFRQGXFWHGE\DQDXGLWWHDPZLWKUHOHYDQWH[SHULHQFHLQFRPSOLDQFHDXGLWLQJ

SUBJECT MATTER

We have been engaged to provide a reasonable assurance opinion on compliance with Section 98(2)(b)(i) of the LRA with the FRQVWLWXWLRQRI6$/*$

Section 98(2)(b)(i) of the LRA requires that: “Every registered trade union and every registered employers’ organisation must DUUDQJHIRUDQDQQXDODXGLWRILWVERRNVDQGUHFRUGVRIDFFRXQWDQGLWVƬQDQFLDOVWDWHPHQWVE\DQDXGLWRUZKRPXVWUHSRUWLQ writing to the trade union or employers’ organisation and that report express and opinion as to whether or not the trade union or HPSOR\HUVoRUJDQLVDWLRQKDVFRPSOLHGZLWKWKRVHSURYLVLRQVRILWVFRQVWLWXWLRQUHODWLRQWRƬQDQFLDOPDWWHUVDQGfq

THE NATIONAL EXECUTIVE COMMITTEE RESPONSIBILITIES

OUR INDEPENDENCE AND QUALITY CONTROL

We have complied with the independence and all other ethical requirements of the Code of Professional Conduct for Registered Auditors, issued by the Independent Regulatory Board for Auditors (“IRBA”), that is consistent with the International Ethics Standards Board for Accountants Code of Ethics for Professional Accountants (Parts A and B), which is founded on the fundamental SULQFLSOHVRILQWHJULW\REMHFWLYLW\SURIHVVLRQDOFRPSHWHQFHDQGGXHFDUHFRQƬGHQWLDOLW\DQGSURIHVVLRQDOEHKDYLRU

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AUDITORS’ RESPONSIBILITIES

Our responsibility is to perform our reasonable assurance engagement so that we are able to express our reasonable assurance opinion that compliance with Section 98(2)(b)(i) of the LRA with your constitution were conformed to, in all material respects, LQDFFRUGDQFHZLWKWKHUHTXLUHPHQWVWKHUHRI:HZLOOFRQGXFWRXUDVVXUDQFHHQJDJHPHQWLQDFFRUGDQFHZLWKWKH,QWHUQDWLRQDO Standard on Assurance Engagements ISAE 3000 (Revised), Assurance Engagements other than the Audits or Reviews of Historical )LQDQFLDO,QIRUPDWLRQLVVXHGE\WKH,QWHUQDWLRQDO$XGLWLQJDQG$VVXUDQFH6WDQGDUGV%RDUG7KDW6WDQGDUGUHTXLUHVXVWRSODQDQG SHUIRUPRXUHQJDJHPHQWWRREWDLQUHDVRQDEOHDVVXUDQFHDERXWZKHWKHU\RXFRPSOLHGZLWK6HFWLRQ E L RIWKH/5$

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140

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 ,Q PDNLQJ WKRVH ULVN DVVHVVPHQWV ZH ZLOO FRQVLGHU LQWHUQDO FRQWURO UHOHYDQW WR \RXU FRPSOLDQFH UHTXLUHPHQWV $ UHDVRQDEOH assurance engagement also includes: (a) (YDOXDWLQJ WKH DSSURSULDWHQHVV RI TXDQWLƬFDWLRQ PHWKRGV UHSRUWLQJ SROLFLHV DQG LQWHUQDO JXLGHOLQHV XVHG DQG WKH reasonableness of any estimates made; (b) Assessing the suitability in the circumstances of the clients’ use of the applicable reporting criteria as a basis for preparing the selected information; and; (c) (YDOXDWLQJWKHRYHUDOOSUHVHQWDWLRQRIWKHDSSOLFDEOHFRPSOLDQFHUHTXLUHPHQWV

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REASONABLE ASSURANCE OPINION

In our opinion, the South African Local Government Association complied with the compliance requirements of Section 98(2)(b) (i) of the Labour Relations Act, 66 of 1995 for the year ended 31 March 2018, in all material respects, and in accordance with the FRQVWLWXWLRQ

RESTRICTION OF LIABILITY

Our work has been undertaken to enable us to express a reasonable assurance opinion on compliance with Section 98(2)(b)(i) of WKH/5$ZLWK\RXUFRQVWLWXWLRQLQDFFRUGDQFHZLWKWKHWHUPVRIWKLVDJUHHPHQWDQGIRUQRRWKHUSXUSRVH:HGRQRWDFFHSWRU assume liability to any party other than the National Executive Committee, for our work, for this report, or for the conclusion we KDYHUHDFKHG

MVB AUDIT AND ADVISORY Theunis O’Neil Chartered Accountant (SA) Registered Auditor 7 June 2019 ANNUAL FINANCIAL STATEMENTS ANNUAL PART G

141

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 REPORT OF THE AUDITOR-GENERAL TO PARLIAMENT ON SALGA

REPORT ON THE AUDIT OF THE the PFMA, and for such internal controls as the accounting authority determines is necessary to enable the preparation of FINANCIAL STATEMENTS ƬQDQFLDOVWDWHPHQWVWKDWDUHIUHHIURPPDWHULDOPLVVWDWHPHQW ZKHWKHUGXHWRIUDXGRUHUURU OPINION ,KDYHDXGLWHGWKHƬQDQFLDOVWDWHPHQWVRIWKH6RXWK$IULFDQ ,Q SUHSDULQJ WKH ƬQDQFLDO VWDWHPHQWV WKH DFFRXQWLQJ Local Government Association, set out on pages 144 to authority is responsible for assessing the South African Local ZKLFK FRPSULVH WKH VWDWHPHQW RI ƬQDQFLDO SRVLWLRQ DV Government Association’s ability to continue as a going DW 0DUFK WKH VWDWHPHQW RI ƬQDQFLDO SHUIRUPDQFH concern, disclosing, as applicable, matters relating to a going VWDWHPHQW RI FKDQJHV LQ QHW DVVHWV FDVK ƮRZ VWDWHPHQW concern and using the going concern basis of accounting and statement of comparison of budget and actual amounts unless the appropriate governance structure either intends IRUWKH\HDUWKHQHQGHGDVZHOODVWKHQRWHVWRWKHƬQDQFLDO to liquidate the public entity or to cease operations, or has no VWDWHPHQWV LQFOXGLQJ D VXPPDU\ RI VLJQLƬFDQW DFFRXQWLQJ UHDOLVWLFDOWHUQDWLYHEXWWRGRVR SROLFLHV AUDITOR-GENERAL’S RESPONSIBILITIES ,QP\RSLQLRQWKHƬQDQFLDOVWDWHPHQWVSUHVHQWIDLUO\LQDOO FOR THE AUDIT OF THE FINANCIAL PDWHULDOUHVSHFWVWKHƬQDQFLDOSRVLWLRQRIWKH6RXWK$IULFDQ Local Government Association as at 31 March 2019 and its STATEMENTS My objectives are to obtain reasonable assurance about ƬQDQFLDOSHUIRUPDQFHDQGFDVKƮRZVIRUWKH\HDUWKHQHQGHG, in accordance with the South African Standards of Generally ZKHWKHU WKH ƬQDQFLDO VWDWHPHQWV DV D ZKROH DUH IUHH IURP material misstatement, whether due to fraud or error and to Recognised Accounting Practice (SA Standards of GRAP) and the requirements of the Public Finance Management Act of LVVXHDQDXGLWRUoVUHSRUWWKDWLQFOXGHVP\RSLQLRQ5HDVRQDEOH assurance is a high level of assurance but is not a guarantee 6RXWK$IULFD $FW1RRI 3)0$ . that an audit conducted in accordance with the ISA will always GHWHFWDPDWHULDOPLVVWDWHPHQWZKHQLWH[LVWV0LVVWDWHPHQWV BASIS FOR OPINION can arise from fraud or error and are considered material if, I conducted my audit in accordance with the International individually or in aggregate, they could reasonably be expected 6WDQGDUGV RQ $XGLWLQJ ,6$ 0\ UHVSRQVLELOLWLHV XQGHU WKRVH WRLQƮXHQFHWKHHFRQRPLFGHFLVLRQVRIXVHUVWDNHQRQWKHEDVLV standards are further described in the Auditor-General’s RIWKHVHƬQDQFLDOVWDWHPHQWV UHVSRQVLELOLWLHVIRUWKHDXGLWRIWKHƬQDQFLDOVWDWHPHQWVVHFWLRQ RIWKLVDXGLWRUoVUHSRUW A further description of my responsibilities for the audit of WKHƬQDQFLDOVWDWHPHQWVLVLQFOXGHGLQWKHDQQH[XUHWRWKLV I am independent of the public entity in accordance with DXGLWRUoVUHSRUW sections 290 and 291 of the International Ethics Standards Board for Accountants’ Code of ethics for professional accountants (IESBA code), parts 1 and 3 of the International REPORT ON THE AUDIT OF Ethics Standards Board for Accountants’ International Code REPORTED PERFORMANCE of Ethics for Professional Accountants (including International Independence Standards) and the ethical requirements that are INFORMATION UHOHYDQWWRP\DXGLWLQ6RXWK$IULFD,KDYHIXOƬOOHGP\RWKHU ethical responsibilities in accordance with these requirements DQGWKH,(6%$FRGHV INTRODUCTION AND SCOPE In accordance with the Public Audit Act of South Africa, 2004 $FW1RRI 3$$ DQGWKHJHQHUDOQRWLFHLVVXHG ,EHOLHYHWKDWWKHDXGLWHYLGHQFH,KDYHREWDLQHGLVVXƯFLHQW in terms thereof, I have a responsibility to report material DQGDSSURSULDWHWRSURYLGHDEDVLVIRUP\RSLQLRQ ƬQGLQJV RQ WKH UHSRUWHG SHUIRUPDQFH LQIRUPDWLRQ DJDLQVW predetermined objectives for selected goals presented in the RESPONSIBILITIES OF THE ACCOUNTING DQQXDOSHUIRUPDQFHUHSRUW,SHUIRUPHGSURFHGXUHVWRLGHQWLI\ AUTHORITY FOR THE FINANCIAL ƬQGLQJVEXWQRWWRJDWKHUHYLGHQFHWRH[SUHVVDVVXUDQFH STATEMENTS The accounting authority is responsible for the preparation My procedures address the reported performance information, DQGIDLUSUHVHQWDWLRQRIWKHƬQDQFLDOVWDWHPHQWVLQDFFRUGDQFH which must be based on the approved performance planning with the SA Standards of GRAP and the requirements of GRFXPHQWVRIWKHSXEOLFHQWLW\,KDYHQRWHYDOXDWHGWKH

142

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 completeness and appropriateness of the performance REPORT ON THE AUDIT LQGLFDWRUVLQFOXGHGLQWKHSODQQLQJGRFXPHQWV0\SURFHGXUHV also did not extend to any disclosures or assertions relating to OF COMPLIANCE WITH planned performance strategies and information in respect LEGISLATION of future periods that may be included as part of the reported SHUIRUPDQFH LQIRUPDWLRQ $FFRUGLQJO\ P\ ƬQGLQJV GR QRW H[WHQGWRWKHVHPDWWHUV INTRODUCTION AND SCOPE In accordance with the PAA and the general notice issued in WHUPVWKHUHRI,KDYHDUHVSRQVLELOLW\WRUHSRUWPDWHULDOƬQGLQJV I evaluated the usefulness and reliability of the reported RQWKHFRPSOLDQFHRIWKHSXEOLFHQWLW\ZLWKVSHFLƬFPDWWHUVLQ performance information in accordance with the criteria NH\OHJLVODWLRQ,SHUIRUPHGSURFHGXUHVWRLGHQWLI\ƬQGLQJVEXW developed from the performance management and reporting QRWWRJDWKHUHYLGHQFHWRH[SUHVVDVVXUDQFH IUDPHZRUNDVGHƬQHGLQWKHJHQHUDOQRWLFHIRUWKHIROORZLQJ selected goals presented in the annual performance report of ,GLGQRWUDLVHPDWHULDOƬQGLQJVRQFRPSOLDQFHZLWKWKHVSHFLƬF the public entity for the year ended 31 March 2019: matters in key legislation set out in the general notice issued in WHUPVRIWKH3$$ Pages in the annual OTHER INFORMATION GOALS performance The accounting authority is responsible for the other report LQIRUPDWLRQ7KHRWKHULQIRUPDWLRQFRPSULVHVWKHLQIRUPDWLRQ Goal 1 - Sustainable inclusive 29 – 54 LQFOXGHGLQWKHDQQXDOUHSRUW7KHRWKHULQIRUPDWLRQGRHVQRW LQFOXGHWKHƬQDQFLDOVWDWHPHQWVWKHDXGLWRUoVUHSRUWDQGWKRVH economic growth and spatial selected goals presented in the annual performance report transformation WKDWKDYHEHHQVSHFLƬFDOO\UHSRUWHGLQWKLVDXGLWRUoVUHSRUW Goal 2 - Good governance and 55 – 68 resilient municipal institutions 0\ RSLQLRQ RQ WKH ƬQDQFLDO VWDWHPHQWV DQG ƬQGLQJV RQ WKH reported performance information and compliance with Goal 3 - Financial sustainability and 69 – 75 legislation do not cover the other information and I do not JUHDWHUƬVFDOHTXLW\ express an audit opinion or any form of assurance conclusion WKHUHRQ I performed procedures to determine whether the reported performance information was properly presented and whether In connection with my audit, my responsibility is to read the performance was consistent with the approved performance other information and, in doing so, consider whether the RWKHULQIRUPDWLRQLVPDWHULDOO\LQFRQVLVWHQWZLWKWKHƬQDQFLDO SODQQLQJ GRFXPHQWV , SHUIRUPHG IXUWKHU SURFHGXUHV WR statements and the selected goals presented in the annual determine whether the indicators and related targets were performance report, or my knowledge obtained in the audit, or measurable and relevant and assessed the reliability of the RWKHUZLVHDSSHDUVWREHPDWHULDOO\PLVVWDWHG reported performance information to determine whether it ZDVYDOLGDFFXUDWHDQGFRPSOHWH I did not receive the other information prior to the date of this DXGLWRUoVUHSRUW:KHQ,GRUHFHLYHDQGUHDGWKLVLQIRUPDWLRQ , GLG QRW UDLVH DQ\ PDWHULDO ƬQGLQJV RQ WKH XVHIXOQHVV DQG if I conclude that there is a material misstatement therein, reliability of the reported performance information for these I am required to communicate the matter to those charged goals: with governance and request that the other information be • Goal 1 - Sustainable inclusive and economic growth and FRUUHFWHG ,I WKH RWKHU LQIRUPDWLRQ LV QRW FRUUHFWHG , PD\ have to retract this auditor’s report and re-issue an amended spatial transformation UHSRUWDVDSSURSULDWH+RZHYHULILWLVFRUUHFWHG, this will not • Goal 2 - Good governance and resilient municipal EHQHFHVVDU\ institutions • *RDO)LQDQFLDOVXVWDLQDELOLW\DQGJUHDWHUƬVFDOHTXLW\ INTERNAL CONTROL DEFICIENCIES I considered internal control relevant to my audit of the

OTHER MATTER ƬQDQFLDOVWDWHPHQWVUHSRUWHGSHUIRUPDQFHLQIRUPDWLRQDQG FINANCIAL STATEMENTS ANNUAL ,GUDZDWWHQWLRQWRWKHPDWWHUEHORZ compliance with applicable legislation; however, my objective ZDVQRWWRH[SUHVVDQ\IRUPRIDVVXUDQFHRQLW,GLGQRWLGHQWLI\ ACHIEVEMENT OF PLANNED TARGETS DQ\VLJQLƬFDQWGHƬFLHQFLHVLQLQWHUQDOFRQWURO Refer to the annual performance report on pages 27 to 86 for PART G information on the achievement of planned targets for the \HDU Pretoria 31 July 2019

143

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION Registered Employer Body in terms of the Labour Relations Act, 66 of 1996 - Registration LR/2/6/3/350 (Schedule 3A Public Entity ito the Public Finance Management Act, 1 of 1999, and recognised ito the Organised Local Government Act, 52 of 1997)

ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2019 Annual Financial Statements Accounting Authority's Responsibilities and Approval

The National Executive Committee as Accounting Authority is required by the Public Finance Management Act (Act 1 of 1999), WRPDLQWDLQDGHTXDWHDFFRXQWLQJUHFRUGVDQGLVUHVSRQVLEOHIRUWKHFRQWHQWDQGLQWHJULW\RIWKHDQQXDOƬQDQFLDOVWDWHPHQWVDQG UHODWHGƬQDQFLDOLQIRUPDWLRQLQFOXGHGLQWKLVUHSRUW,WLVWKHUHVSRQVLELOLW\RIWKH1DWLRQDO([HFXWLYH&RPPLWWHH 1(& WRHQVXUH WKDWWKHDQQXDOƬQDQFLDOVWDWHPHQWVIDLUO\SUHVHQWWKHVWDWHRIDƪDLUVRI6$/*$DVDWWKHHQGRIWKHƬQDQFLDO\HDUDQGWKHUHVXOWV RILWVRSHUDWLRQVDQGFDVKƮRZVIRUWKHSHULRGWKHQHQGHG7KHH[WHUQDODXGLWRUVDUHHQJDJHGWRH[SUHVVDQLQGHSHQGHQWRSLQLRQ RQWKHDQQXDOƬQDQFLDOVWDWHPHQWVDQGZHUHJLYHQXQUHVWULFWHGDFFHVVWRDOOƬQDQFLDOUHFRUGVDQGUHODWHGGDWD

7KH DQQXDO ƬQDQFLDO VWDWHPHQWV KDYH EHHQ SUHSDUHG LQ DFFRUGDQFH ZLWK 6RXWK $IULFDQ 6WDQGDUGV RI *HQHUDOO\ 5HFRJQLVHG $FFRXQWLQJ3UDFWLFH *5$3 LQFOXGLQJDQ\LQWHUSUHWDWLRQVJXLGHOLQHVDQGGLUHFWLYHVLVVXHGE\WKH$FFRXQWLQJ6WDQGDUGV%RDUG

7KHDQQXDOƬQDQFLDOVWDWHPHQWVDUHEDVHGXSRQDSSURSULDWHDFFRXQWLQJSROLFLHVFRQVLVWHQWO\DSSOLHGDQGVXSSRUWHGE\UHDVRQDEOH DQGSUXGHQWMXGJHPHQWVDQGHVWLPDWHV

The National Executive Committee is of the opinion that the system of internal control provides reasonable assurance that the ƬQDQFLDOUHFRUGVPD\EHUHOLHGRQIRUWKHSUHSDUDWLRQRIWKHDQQXDOƬQDQFLDOVWDWHPHQWV

7KH DQQXDO ƬQDQFLDO VWDWHPHQWV VHW RXW RQ SDJHV [[ WR [[ ZKLFKKDYHEHHQSUHSDUHGRQWKHJRLQJFRQFHUQEDVLVDQGWKH performance information set out on pages XX to XX were approved by the Presidency on 15 May 2019 and were signed on the NEC's behalf by:

CLCLLRLLRR THETHEMBIMBBI NKADIMENGNKADIMMENG XOLILE GEORGE PRESIDENT CHIEF EXECUTIVE OFFICER

Pretoria 31 July 2019

144

ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2019 Statement of Financial Position

Figures in Rand Note(s) 2019 2018 Assets Current Assets Operating lease asset 6 { { Deposits 5 { { Receivables from exchange transactions 8 {{ {{ Receivables from non-exchange transactions 9 {{ {{ Cash and cash equivalents 10 {{ {{ { {{ {{ Non-Current Assets Investment property 2 {{ {{ Property, plant and equipment 3 {{ {{ Intangible assets 4 { { Deposits 5 {{ {{ { {{ {{ Total Assets {{ {{ Liabilities Current Liabilities Finance lease obligation 13 {{ { Operating lease liability 6 {{ {{ Payables from exchange transactions 16 {{ {{ (PSOR\HHEHQHƬWREOLJDWLRQ 7-{ Unspent conditional grants and receipts 14 {{ {{ Provisions 15 {{ {{ { {{ {{ Non-Current Liabilities Finance lease obligation 13 {{ {{ Operating lease liability 6 {{ {{ (PSOR\HHEHQHƬWREOLJDWLRQ 7-{ Provisions 15 { {

{ {{ {{ FINANCIAL STATEMENTS ANNUAL Total Liabilities {{ {{ Net Assets Revaluation reserve 12 {{ {{ PART G Accumulated surplus {{ {{ Total Net Assets {{ {{ Total Net Assets and Liabilities {{ {{

145

ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2019 Statement of Financial Performance

Figures in Rand Note(s) 2019 2018 Revenue Revenue from exchange transactions Revenue from exchange transactions 18 {{ { Other revenue from exchange transactions 21 {{ { Investment revenue 26 {{ { Total revenue from exchange transactions {{ { Revenue from non-exchange transactions Grant recognised – LGSETA (LGCAC) 18 { 503 146 Grant recognised – LGSETA (MaSE) 18 - { Grant recognised – LGSETA (ICIP) 18 - 704 700 Government grants and subsidies - Executive Authority 18 {{ { Grant recognised – Federation of Canadian Municipalities (BiGM) 18 {{ { Sponsorships and donations from non-exchange transactions 18 {{ { Grant recognised – GIZ (Governance Support Programme) 18 - 585 852 Grant recognised – DPSA (Tirelo Bosha) 18 { - Grant recognised – European Union (SGCLG) 18 {{ { Grant recognised – LGSETA (LiGO) 18 { { Grant recognised – LGSETA (LLC) 18 { - Grant recognised – EU (Enhancing Municipal Capacity for Development) 18 {{ - Grant recognised – VVSG (Enhancing Capacity in LG Waste Management) 18 { - Total revenue from non-exchange revenue {{ {{ Total Revenue {{ {{ Expenses Personnel expenses 25 {{ {{ Programme costs 19 {{ {{ Administrative expenses 22 {{ {{ Depreciation and amortisation expense 3 & 4 {{ {{ Other operational expenditure 23 {{ {{ Finance costs 29 {{ {{ Total Expenses {{ {{ Surplus for the year {{ {{

146

ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2019 6WDWHPHQWRI6XUSOXVRU'HƬFLWDQG2WKHU Comprehensive Income

Figures in Rand Note(s) 2019 2018 Revenue {{ {{ Rendering of services - membership levies 18 {{ { Event recoveries 21 {{ {{

Direct expenditure – Programme cost {{ {{ Municipal advisory and support service cost 19 {{ {{ OLG Mandate implementation cost 19 {{ {{ IGR Participation & mandating cost (Councillors) 19 {{ {{

Gross margin {{ {{

Other revenue {{ {{ Other revenue 21 {{ {{ Government grant – executive authority 18 {{ {{ Other grants – donors 18 {{ {{ Sponsorship and donations 18 {{ {{

Contribution to overheads {{ {{

6WDƪFRVW {{ {{ Administration costs 22 {{ {{ Depreciation and amortisation 3 & 4 {{ {{ Other operational expenditure 23 {{ {{

2SHUDWLQJVXUSOXVRU GHƬFLW EHIRUHƬQDQFHFKDUJHV {{ {{

Interest revenue 26 {{ { Finance cost 29 {{ {{

Surplus for the year 13 329 175 {{ FINANCIAL STATEMENTS ANNUAL

Other comprehensive income: - - PART G Total comprehensive surplus for the year {{ {{

147

ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2019 Statement of Changes in Net Assets

Revaluation Accumulated Total net Figures in Rand surplus surplus assets Balance at 1 April 2017 {{ {{ {{ Changes in net assets Surplus for the year - {{ {{ Total changes - {{ {{ Balance at 1 April 2018 {{ {{ {{ Changes in net assets {{ {{ Surplus for the year - {{ {{ Total changes - Balance at 31 March 2019 {{ {{ {{ Note(s) 12

148

ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2019 Cash Flow Statement

Figures in Rand Note(s) 2019 2018 &DVKƮRZVIURPRSHUDWLQJDFWLYLWLHV Cash receipts from customers {{ {{ Cash paid to suppliers and employees {{ {{ 1HWFDVKƮRZVIURPRSHUDWLQJDFWLYLWLHV {{ {{ Interest received 26 {{ {{ Interest paid 29 {{ {{ Cash generated from / (utilised in) operations 32 {{ {{

&DVKƮRZVIURPLQYHVWLQJDFWLYLWLHV Purchase of property, plant and equipment 3 {{ {{ Proceeds from sale of property, plant and equipment { { Purchase of intangible assets 4 - - 0RYHPHQWLQƬQDQFLDODVVHWV 5-{{ 1HWFDVKƮRZVIURPLQYHVWLQJDFWLYLWLHV {{ {{

&DVKƮRZVIURPƬQDQFLQJDFWLYLWLHV Finance lease payments {{ { 1HWFDVKƮRZVIURPƬQDQFLQJDFWLYLWLHV {{ {

Net (decrease) / increase in cash and cash equivalents {{ {{ Cash and cash equivalents at the beginning of the year {{ {{ Cash and cash equivalents at the end of the year 10 {{ {{ ANNUAL FINANCIAL STATEMENTS ANNUAL PART G

149

ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2019 Statement of Comparison of Budget and Actual Amounts

Budget on comparable basis {{ {{ { { Actual 'LƪHUHQFH amounts on EHWZHHQƬQDO Approved comparable budget and Figures in Rand Note(s) budget Adjustments Final Budget basis actual Revenue Revenue from exchange transactions Rendering of services – membership levies 18 {{ - {{ {{ {{ Other revenue 21 {{ - {{ {{ { Investment revenue 26 {{ - {{ {{ {{ Total revenue from exchange transactions {{ - {{ {{ {{

Revenue from non-exchange transactions Grant recognised – LGSETA (LGCAC) 18 {{ {{ {{ { { Grant recognised – LGSETA (MaSE) 18 { {{ 2 000 000 - {{ Grant recognised – LGSETA (ICIP) 18 { - { - {{ Government grants and subsidies - Executive Authority 18 { - { { - Grant recognised – Federation of Canadian Municipalities (BiGM) 18 6 000 000 - 6 000 000 { { Sponsorships and donations from non- exchange transactions 18 { - { { {{ Grant recognised – Commonwealth Local Government Forum 18 { {{ { - {{ Grant recognised – GIZ (Governance Support Programme) 18 { - { - {{ Grant recognised – DPSA (Tirelo Bosha) 18 0 { { 750 150 { Grant recognised – European Union (SGCLG) 18 { - { { {{ Grant recognised – LGSETA (LiGO) 18 { - { 310 845 {{ Grant recognised – LGSETA (LLLC) 18 600 000 - 600 000 246 453 { Grant recognised – EU (Enhancing Municipal Capacity) 18 - { { { 33 037 Grant recognised – VVSG (Enhancing Capacity in LG Waste Management) 18 - { { 140 639 { Total revenue from non-exchange transactions { - { { {{ Total revenue { - { { {{

Expenditure Personnel expenses 25 { - { {{ { Programme costs 19 { - { {{ { Administrative expenses 22 { - { {{ {{ Depreciation and amortisation expense 3 & 4 { - { {{ { Other operational expenditure 23 { - { {{ {{ Finance costs 29 { - { {{ 791 534 Total expenditure { - { {{ { Surplus for the year 402 001 - 402 001 { {

Also refer to note 43. 150

ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2019 Accounting Policies

1. PRESENTATION OF FINANCIAL STATEMENTS - BASIS OF PREPARATION

STATEMENT OF COMPLIANCE

7KHDQQXDOƬQDQFLDOVWDWHPHQWVKDYHEHHQSUHSDUHGLQDFFRUGDQFHZLWKWKH6WDQGDUGVRI*HQHUDOO\5HFRJQLVHG$FFRXQWLQJ Practice (GRAP), issued by the Accounting Standards Board in accordance with Section 91(1) of the Public Finance Management Act (Act 1 of 1999).

BASIS OF MEASUREMENT

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1.1 PRESENTATION CURRENCY

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1.2 GOING CONCERN ASSUMPTION

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1.3 SIGNIFICANT JUDGEMENTS AND SOURCES OF ESTIMATION UNCERTAINTY

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1.3.1 TRADE RECEIVABLES AND OTHER RECEIVABLES FINANCIAL STATEMENTS ANNUAL SALGA assesses its trade receivables for impairment at the end of each reporting period. In determining whether an impairment ORVVVKRXOGEHUHFRUGHGLQVXUSOXVRUGHƬFLWPDQDJHPHQWPDNHVMXGJHPHQWVDVWRZKHWKHUWKHUHLVREVHUYDEOHGDWDLQGLFDWLQJ DPHDVXUDEOHGHFUHDVHLQWKHHVWLPDWHGIXWXUHFDVKƮRZVIURPDƬQDQFLDODVVHW PART G 1.3.2 FAIR VALUE ESTIMATION

The carrying value less impairment losses of trade receivables and the carrying value of trade payables are deemed to approximate their fair values.

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151

ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2019

Accounting Policies (continued)

1.3 SIGNIFICANT JUDGEMENTS AND SOURCES OF ESTIMATION UNCERTAINTY CONTINUED

1.3.3 POST-RETIREMENT MEDICAL BENEFITS

The present value of the post-employment medical obligation depends on a number of factors that are determined on an actuarial basis using a number of assumptions. The assumptions used in determining the net cost include the discount rate. Any changes in these assumptions will impact on the carrying amount of post-employment medical obligations.

SALGA determines the appropriate discount rate at the end of each year. This is the interest rate that will be used to determine WKHSUHVHQWYDOXHRIHVWLPDWHGIXWXUHFDVKRXWƮRZVH[SHFWHGWREHUHTXLUHGWRVHWWOHWKHPHGLFDOREOLJDWLRQV,QGHWHUPLQLQJ WKHDSSURSULDWHGLVFRXQWUDWH6$/*$FRQVLGHUVWKHPHGLFDODLGLQƮDWLRQWKDWKDYHWHUPVWRPDWXULW\DSSUR[LPDWLQJWKHWHUPV of the related medical liability.

Other key assumptions for medical aid obligations are based on current market conditions. Additional information is disclosed in note 7.

1.3.4 EFFECTIVE INTEREST RATE

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1.3.5 ALLOWANCE FOR DOUBTFUL DEBTS

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1.3.6 USEFUL LIVES AND RESIDUAL VALUES

SALGA re-assesses the useful lives and residual values of property, plant and equipment on a yearly basis. These assessments require judgements and assumptions to be made by management. The assessments involve the estimation of months or years based on past experience and historical information to determine the estimated period of time over which an asset is expected WREHXVHG2WKHUDVVHVVPHQWVLQYROYHWKHGHWHUPLQDWLRQRIYDOXHZKHUHDFRPSDULVRQRIWKHUHVDOHYDOXHRIWKHVSHFLƬFDVVHW taking into consideration its age and condition. This determination represents the estimated amount that SALGA would currently obtain from disposal of the asset, after deducting the estimated costs of disposal, if the asset was already of the age and in the condition expected at the end of its useful life.

1.3.7 IMPAIRMENT OF NON-CASH GENERATING ASSETS

Criteria developed by SALGA to distinguish non-cash-generating assets from cash-generating assets are as follows: SALGA's mandate or intention is not in pursuit of commercial return but service delivery to its members, therefore assets acquired by SALGA are solely for service delivery to facilitate service delivery to its members (i.e. administrative in nature).

There is no uncertainty as to whether SALGA assets are non-cash generating assets, as SALGA does not have an asset or class RIDVVHWVWKDWRSHUDWHRUJHQHUDWHFDVKƮRZVLQGHSHQGHQWO\IURPRWKHUDVVHWVQRUGRHVLWVDVVHWVIRUPSDUWRIDJURXSRIDVVHWV WKDWJHQHUDWHFDVKƮRZVLQGHSHQGHQWO\IURPRWKHUDVVHWV

152

ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2019

Accounting Policies (continued)

1.4 INVESTMENT PROPERTY

RECOGNITION AND MEASUREMENT

Investment property is property (land or a building - or part of a building - or both) held to earn rental income or for capital appreciation or both, rather than for: • use in the production or supply of goods or services, • administrative purposes, or • sale in the ordinary course of operations.

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Investment property is initially recognised at cost plus any transaction costs included in initial measurement.

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 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.

SUBSEQUENT MEASUREMENT

Subsequent to initial measurement, investment property is measured at fair value.

7KHIDLUYDOXHRILQYHVWPHQWSURSHUW\UHƮHFWVPDUNHWFRQGLWLRQVDWWKHUHSRUWLQJGDWH

$JDLQRUORVVDULVLQJIURPDFKDQJHLQIDLUYDOXHLVLQFOXGHGLQQHWVXUSOXVRUGHƬFLWIRUWKHSHULRGLQZKLFKLWDULVHV

5HPHDVXUHPHQWVWRIDLUYDOXHDUHPDGHDQQXDOO\WRHQVXUHWKDWWKHFDUU\LQJDPRXQWGRHVQRWGLƪHUPDWHULDOO\IURPWKDWZKLFK would be determined using fair value at the end of the reporting period.

1.5 PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment are tangible non-current assets (including infrastructure assets) that are held for use in the production or supply of goods or services, rental to others, or for administrative purposes, and are expected to be used for more than one period. ANNUAL FINANCIAL STATEMENTS ANNUAL INITIAL RECOGNITION AND MEASUREMENT

The cost of an item of property, plant and equipment is recognised as an asset when:

• LWLVSUREDEOHWKDWIXWXUHHFRQRPLFEHQHƬWVRUVHUYLFHSRWHQWLDODVVRFLDWHGZLWKWKHLWHPZLOOƮRZWRWKHHQWLW\DQG PART G • the cost of the item can be measured reliably.

Property, plant and equipment is initially measured at cost.

The cost of an item of property, plant and equipment is the purchase price and other costs attributable to 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.

153

ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2019

Accounting Policies (continued)

1.5 PROPERTY, PLANT AND EQUIPMENT CONTINUED

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.

:KHQVLJQLƬFDQWFRPSRQHQWVRIDQLWHPRISURSHUW\SODQWDQGHTXLSPHQWKDYHGLƪHUHQWXVHIXOOLYHVWKH\DUHDFFRXQWHGIRUDV separate items (major components) of property, plant and equipment.

7KHFRVWRIDQLWHPRISURSHUW\SODQWDQGHTXLSPHQWLVUHFRJQLVHGDVDQDVVHWLIDQGRQO\LI

i) LWLVSUREDEOHWKDWWKHIXWXUHHFRQRPLFEHQHƬWVRUVHUYLFHSRWHQWLDODVVRFLDWHGZLWKWKHLWHPZLOOƮRZWR6$/*$DQGWKHFRVW of fair value of the item can be measured reliably. ii) where an asset is acquired at a cost that is less than a thousand Rand, its cost is fully depreciated in the period in which it is acquired.

SUBSEQUENT EXPENDITURE

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.

6XEVHTXHQWH[SHQGLWXUHRIDQLWHPRISURSHUW\SODQWDQGHTXLSPHQWLVUHFRJQLVHGDVDQDVVHWLIDQGRQO\LI

D LWLVSUREDEOHWKDWWKHIXWXUHHFRQRPLFEHQHƬWVRUVHUYLFHSRWHQWLDODVVRFLDWHGZLWKWKHLWHPZLOOƮRZWR6$/*$DQG (b) the cost or fair value of the item can be measured reliably.

&RVWVRIWKHGD\WRGD\VHUYLFLQJDUHUHFRJQLVHGLQVXUSOXVDQGGHƬFLWDVLQFXUUHG

Property, plant and equipment is carried at cost less accumulated depreciation and any impairment losses.

)ROORZLQJLQLWLDOUHFRJQLWLRQDWFRVWODQGDQGEXLOGLQJVFODVVLƬHGDV3URSHUW\SODQWDQGHTXLSPHQWLVFDUULHGDWUHYDOXHGDPRXQW being the fair value at the date of revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses.

5HYDOXDWLRQVDUHPDGHZLWKVXƯFLHQWUHJXODULW\VXFKWKDWWKHFDUU\LQJDPRXQWGRHVQRWGLƪHUPDWHULDOO\IURPWKDWZKLFKZRXOG 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 restated proportionately with the change in the gross carrying amount of the asset so that the carrying amount of the asset after revaluation equals its revalued amount.

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.

Any increase in an asset’s carrying amount, as a result of a revaluation, is credited directly to a revaluation surplus. The increase LVUHFRJQLVHGLQVXUSOXVRUGHƬFLWWRWKHH[WHQWWKDWLWUHYHUVHVDUHYDOXDWLRQGHFUHDVHRIWKHVDPHDVVHWSUHYLRXVO\UHFRJQLVHG LQVXUSOXVRUGHƬFLW

$Q\GHFUHDVHLQDQDVVHWoVFDUU\LQJDPRXQWDVDUHVXOWRIDUHYDOXDWLRQLVUHFRJQLVHGLQVXUSOXVRUGHƬFLWLQWKHFXUUHQWSHULRG 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.

154

ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2019

Accounting Policies (continued)

1.5 PROPERTY, PLANT AND EQUIPMENT CONTINUED

7KHUHYDOXDWLRQVXUSOXVLQHTXLW\UHODWHGWRDVSHFLƬFLWHPRISURSHUW\SODQWDQGHTXLSPHQWLVWUDQVIHUUHGGLUHFWO\WRUHWDLQHG earnings when the asset is derecognised.

7KHUHYDOXDWLRQVXUSOXVLQHTXLW\UHODWHGWRDVSHFLƬFLWHPRISURSHUW\SODQWDQGHTXLSPHQWLVWUDQVIHUUHGGLUHFWO\WRUHWDLQHG HDUQLQJVDVWKHDVVHWLVXVHG7KHDPRXQWWUDQVIHUUHGLVHTXDOWRWKHGLƪHUHQFHEHWZHHQGHSUHFLDWLRQEDVHGRQWKHUHYDOXHG carrying amount and depreciation based on the original cost of the asset.

Property, plant and equipment are depreciated on the straight-line basis over their expected useful lives taking into account their estimated residual value.

The useful lives of items of property, plant and equipment have been assessed as follows:

Item Depreciation method Average useful life Land None ,QGHƬQLWHQRWGHSUHFLDWHG Buildings Straight-line 75 years )XUQLWXUHDQGƬ[WXUHV Straight-line 3 to 20 years Motor vehicles Straight-line 5 years 2ƯFHHTXLSPHQW Straight-line 2 to 20 years IT equipment Straight-line 3 to 4 years Leasehold improvements Straight-line The shorter of useful life or lease term (36 to 60 months) Leased equipment Straight-line The shorter of useful life or lease term (24 to 36 months)

RESIDUAL VALUES

The residual value, and the useful life and depreciation method of each asset are reviewed at the end of each reporting date. If WKHH[SHFWDWLRQVGLƪHUIURPSUHYLRXVHVWLPDWHVWKHFKDQJHLVDFFRXQWHGIRUDVDFKDQJHLQDFFRXQWLQJHVWLPDWH

Reviewing the useful life of an asset on an annual basis does not require the entity to amend the previous estimate unless H[SHFWDWLRQVGLƪHUIURPWKHSUHYLRXVHVWLPDWH

(DFKSDUWRIDQLWHPRISURSHUW\SODQWDQGHTXLSPHQWZLWKDFRVWWKDWLVVLJQLƬFDQWLQUHODWLRQWRWKHWRWDOFRVWRIWKHLWHPLV depreciated separately.

The depreciable amount of an asset is determined by deducting the residual value of an asset from its original cost (or revalued amount, where applicable). ANNUAL FINANCIAL STATEMENTS ANNUAL

7KHGHSUHFLDWLRQFKDUJHIRUHDFKSHULRGLVUHFRJQLVHGLQVXUSOXVRUGHƬFLWXQOHVVLWLVLQFOXGHGLQWKHFDUU\LQJDPRXQWRIDQRWKHU asset.

No residual value is assessed for assets where the value of the residual is considered immaterial in relation to the cost of the PART G DVVHW0DQDJHPHQWLQWHQGVXVLQJWKHDVVHWVVKRZQLQWKHVWDWHPHQWRIƬQDQFLDOSRVLWLRQRYHUWKHLUHQWLUHHFRQRPLFOLIH

The residual values of motor vehicles are set as determined by market forces. When setting a residual value for a motor vehicle consideration is given to the expected useful life and expected proceeds that could be received today if the same vehicle at the end of its useful life were to be sold.

155

ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2019

Accounting Policies (continued)

1.5 PROPERTY, PLANT AND EQUIPMENT CONTINUED

DERECOGNITION

,WHPVRISURSHUW\SODQWDQGHTXLSPHQWDUHGHUHFRJQLVHGZKHQWKHDVVHWLVGLVSRVHGRƪRUZKHQWKHUHDUHQRIXUWKHUHFRQRPLF EHQHƬWVRUVHUYLFHSRWHQWLDOH[SHFWHGIURPWKHXVHRIWKHDVVHW

7KHJDLQRUORVVDULVLQJIURPGHUHFRJQLWLRQRIDQLWHPRISURSHUW\SODQWDQGHTXLSPHQWLVLQFOXGHGLQVXUSOXVRUGHƬFLWZKHQWKH item is derecognised. The gain or loss arising from derecognition of an item of property, plant and equipment is determined as WKHGLƪHUHQFHEHWZHHQWKHQHWGLVSRVDOSURFHHGVLIDQ\DQGWKHFDUU\LQJDPRXQWRIWKHLWHP

The carrying amount of property, plant and equipment is reviewed for impairment when events or changes in the circumstances indicate that the carrying amount may not be recoverable.

6SHFLƬFFDWHJRULHVRISURSHUW\SODQWDQGHTXLSPHQW

LAND AND BUILDINGS

Land and buildings are separable assets and are accounted for separately, even when they are acquired together. Land has an unlimited useful life and therefore is not depreciated.

Buildings have a limited useful life and therefore are depreciable assets.

The useful lives of the land and buildings are re-assessed annually.

FURNITURE AND FITTINGS AND OFFICE EQUIPMENT

2ƯFH HTXLSPHQW DQG IXUQLWXUH DQG ƬWWLQJV DUH QRW FXUUHQWO\ FRPSRQHQWLVHG DV QR FRPSRQHQW DFFRXQWLQJ LV FRQVLGHUHG QHFHVVDU\GXHWRWKHQDWXUHRIRƯFHIXUQLWXUHDQGƬWWLQJVDQGRƯFHHTXLSPHQWQDPHO\WKDWWKHXVHIXOOLYHVRILQGLYLGXDO FRPSRQHQWVGRQRWGLƪHUIURPWKHZKROH

Estimated useful lives are based on past experience and historical information.

IT EQUIPMENT

IT equipment can be separated into the following components: • computer hardware • computer software (integral part and embedded into hardware)

IT equipment is not currently componentised as no component accounting is considered necessary due to the nature of the computer information.

Expenditure relating to ongoing maintenance (which does not meet the recognition criteria), IT support and customisation is H[SHQVHGLQWKHVWDWHPHQWRIƬQDQFLDOSHUIRUPDQFHDVDQGZKHQLQFXUUHG

Purchased software is recognised at cost, including all direct costs associated with the customisation and installation thereof.

MOTOR VEHICLES

Where there is an indicator of impairment, the recoverable amount of the individual asset is estimated. When the residual values DUHUHDVVHVVHGDQQXDOO\WKHFDUU\LQJDPRXQWLVFRPSDUHGWRWKHUHVDOHYDOXHRIWKHVSHFLƬFYHKLFOHWDNLQJLQWRFRQVLGHUDWLRQ its age and condition.

156

ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2019

Accounting Policies (continued)

1.5 PROPERTY, PLANT AND EQUIPMENT CONTINUED

GAINS AND LOSSES

The gains or losses arising from de-recognition or disposal of an item of property, plant and equipment is included in surplus DQGGHƬFLWZKHQWKHLWHPLVGHUHFRJQLVHG7KHJDLQVDQGORVVHVDULVLQJIURPGHUHFRJQLWLRQRIDQLWHPRISURSHUW\SODQWDQG HTXLSPHQWLVGHWHUPLQHGDVWKHGLƪHUHQFHEHWZHHQWKHQHWGLVSRVDOSURFHHGVLIDQ\DQGWKHFDUU\LQJDPRXQWRIWKHLWHP

LEASED ASSETS

Leased assets can be separated into the following categories: • OHDVHVIRURƯFHHTXLSPHQW • leasehold improvements

Capitalised leased assets are depreciated over the shorter of the estimated useful life of the asset and the lease term, if there is no reasonable certainty that SALGA will obtain ownership by the end of the lease term.

Leasehold improvements arise when SALGA improves the premises occupied under operating leases to suit operational requirements. Capitalised leasehold improvements are depreciated over the shorter of the estimated useful life of the asset and the lease term.

1.6 INTANGIBLE ASSETS

$QDVVHWLVLGHQWLƬDEOHLILWLVHLWKHU • separable, i.e. is capable of being separated or divided from an entity and sold, transferred, licensed, rented or exchanged, HLWKHULQGLYLGXDOO\RUWRJHWKHUZLWKDUHODWHGFRQWUDFWLGHQWLƬDEOHDVVHWVRUOLDELOLW\UHJDUGOHVVRIZKHWKHUWKHHQWLW\LQWHQGV WRGRVRRU • arises from binding arrangements (including rights from contracts), regardless of whether those rights are transferable or separable from the entity or from other rights and obligations.

An intangible asset is recognised when: • LWLVSUREDEOHWKDWWKHH[SHFWHGIXWXUHHFRQRPLFEHQHƬWVRUVHUYLFHSRWHQWLDOWKDWDUHDWWULEXWDEOHWRWKHDVVHWZLOOƮRZWR WKHHQWLW\DQG • the cost or fair value of the asset can be measured reliably.

6$/*$DVVHVVHVWKHSUREDELOLW\RIH[SHFWHGIXWXUHHFRQRPLFEHQHƬWVRUVHUYLFHSRWHQWLDOXVLQJUHDVRQDEOHDQGVXSSRUWDEOH assumptions that represent management’s best estimate of the set of economic conditions that will exist over the useful life of the asset.

Intangible assets are initially recognised at cost. FINANCIAL STATEMENTS ANNUAL

Subsequent to initial recognition intangible assets are carried at cost less any accumulated amortisation and any impairment losses. PART G

$QLQWDQJLEOHDVVHWLVUHJDUGHGDVKDYLQJDQLQGHƬQLWHXVHIXOOLIHZKHQEDVHGRQDOOUHOHYDQWIDFWRUVWKHUHLVQRIRUHVHHDEOHOLPLW WRWKHSHULRGRYHUZKLFKWKHDVVHWLVH[SHFWHGWRJHQHUDWHQHWFDVKLQƮRZVRUVHUYLFHSRWHQWLDO$PRUWLVDWLRQLVQRWSURYLGHGIRU these intangible assets, but they are tested for impairment annually and whenever there is an indication that the asset may be impaired. For all other intangible assets, amortisation is provided on a straight-line basis over their useful life.

The amortisation period and the amortisation method for intangible assets are reviewed at each reporting date.

157

ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2019

Accounting Policies (continued) 1.6 INTANGIBLE ASSETS CONTINUED

Amortisation is provided to write down the intangible assets, on a straight-line basis, to their residual values as follows:

Item Depreciation method Useful life Computer software Straight-line 2 to 5 years

Intangible assets are derecognised: • RQGLVSRVDORU • ZKHQQRIXWXUHHFRQRPLFEHQHƬWVRUVHUYLFHSRWHQWLDODUHH[SHFWHGIURPLWVXVHRUGLVSRVDO

7KHJDLQRUORVVLVWKHGLƪHUHQFHEHWZHHQWKHQHWGLVSRVDOSURFHHGVLIDQ\DQGWKHFDUU\LQJDPRXQW,WLVUHFRJQLVHGLQVXUSOXV RUGHƬFLWZKHQWKHDVVHWLVGHUHFRJQLVHG

1.7 FINANCIAL INSTRUMENTS

$ƬQDQFLDOLQVWUXPHQWLVDQ\FRQWUDFWWKDWJLYHVULVHWRDƬQDQFLDODVVHWRIRQHHQWLW\DQGDƬQDQFLDOOLDELOLW\RUDUHVLGXDOLQWHUHVW of another entity.

CLASSIFICATION

6$/*$KDVWKHIROORZLQJW\SHVRIƬQDQFLDODVVHWV FODVVHVDQGFDWHJRU\ DVUHƮHFWHGRQWKHIDFHRIWKHVWDWHPHQWRIƬQDQFLDO position or in the notes thereto:

Class Category Operating lease receivables – exchange transactions Financial asset measured at amortised cost Trade and other receivables from exchange transactions Financial asset measured at amortised cost Trade and other receivables from non-exchange Financial asset measured at amortised cost transactions Cash and cash equivalents Financial asset measured at amortised cost

6$/*$KDVWKHIROORZLQJW\SHVRIƬQDQFLDOOLDELOLWLHV FODVVHVDQGFDWHJRU\ DVUHƮHFWHGRQWKHIDFHRIWKHVWDWHPHQWRIƬQDQFLDO position or in the notes thereto:

Class Category Trade and other payables from exchange transactions Financial liability measured at amortised cost Sundry payables – exchange transactions Financial liability measured at amortised cost Other payables (lodge cards) – exchange transactions Financial liability measured at amortised cost

INITIAL RECOGNITION

6$/*$UHFRJQLVHVƬQDQFLDODVVHWVDQGOLDELOLWLHVLQLWVVWDWHPHQWRIƬQDQFLDOSRVLWLRQZKHQWKHHQWLW\EHFRPHVDSDUW\WRWKH contractual provisions of the instrument.

6$/*$UHFRJQLVHVƬQDQFLDODVVHWVDQGOLDELOLWLHVXVLQJWUDGHGDWHDFFRXQWLQJ

INITIAL MEASUREMENT OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES

:KHQDƬQDQFLDODVVHWRUOLDELOLW\LVUHFRJQLVHGLQLWLDOO\6$/*$PHDVXUHVLWDWLWVIDLUYDOXHSOXVLQWKHFDVHRIDƬQDQFLDODVVHW RUƬQDQFLDOOLDELOLW\LQLWLDOO\QRWVXEVHTXHQWO\PHDVXUHGDWIDLUYDOXHWUDQVDFWLRQFRVWVWKDWDUHGLUHFWO\DWWULEXWDEOHWRWKH DFTXLVLWLRQRULVVXHRIWKHƬQDQFLDODVVHWRUƬQDQFLDOOLDELOLW\

158

ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2019

Accounting Policies (continued)

1.7 FINANCIAL INSTRUMENTS CONTINUED

SUBSEQUENT MEASUREMENT OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES

6$/*$PHDVXUHVDOOƬQDQFLDODVVHWVDQGƬQDQFLDOOLDELOLWLHVDIWHULQLWLDOUHFRJQLWLRQXVLQJWKHIROORZLQJFDWHJRULHV • Financial instruments at amortised cost.

$OOƬQDQFLDODVVHWVPHDVXUHGDWDPRUWLVHGFRVWDUHVXEMHFWWRDQLPSDLUPHQWUHYLHZ

7KHDPRUWLVHGFRVWRIDƬQDQFLDODVVHWRUƬQDQFLDOOLDELOLW\LVWKHDPRXQWDWZKLFKWKHƬQDQFLDODVVHWRUƬQDQFLDOOLDELOLW\LV PHDVXUHGDWLQLWLDOUHFRJQLWLRQPLQXVSULQFLSDOUHSD\PHQWVSOXVRUPLQXVWKHFXPXODWLYHDPRUWLVDWLRQXVLQJWKHHƪHFWLYH LQWHUHVWPHWKRGRIDQ\GLƪHUHQFHEHWZHHQWKDWLQLWLDODPRXQWDQGWKHPDWXULW\DPRXQWDQGPLQXVDQ\UHGXFWLRQ GLUHFWO\RU through the use of an allowance account) for impairment or non-collectability.

7KHHƪHFWLYHLQWHUHVWPHWKRGLVDPHWKRGRIFDOFXODWLQJWKHDPRUWLVHGFRVWRIDƬQDQFLDODVVHWRUDƬQDQFLDOOLDELOLW\ RUJURXS RIƬQDQFLDODVVHWVRUƬQDQFLDOOLDELOLWLHV DQGRIDOORFDWLQJWKHLQWHUHVWLQFRPHRULQWHUHVWH[SHQVHRYHUWKHUHOHYDQWSHULRG 7KHHƪHFWLYHLQWHUHVWUDWHLVWKHUDWHWKDWH[DFWO\GLVFRXQWVHVWLPDWHGIXWXUHFDVKSD\PHQWVRUUHFHLSWVWKURXJKWKHH[SHFWHG OLIHRIWKHƬQDQFLDOLQVWUXPHQWRUZKHQDSSURSULDWHDVKRUWHUSHULRGWRWKHQHWFDUU\LQJDPRXQWRIWKHƬQDQFLDODVVHWRU ƬQDQFLDO OLDELOLW\ :KHQ FDOFXODWLQJ WKH HƪHFWLYH LQWHUHVW UDWH WKH HQWLW\ HVWLPDWHV FDVK ƮRZV FRQVLGHULQJ DOO FRQWUDFWXDO WHUPVRIWKHƬQDQFLDOLQVWUXPHQW IRUH[DPSOHSUHSD\PHQWFDOODQGVLPLODURSWLRQV EXWGRHVQRWFRQVLGHUIXWXUHFUHGLWORVVHV The calculation includes all fees and points paid or received between parties to the contract that are an integral part of the HƪHFWLYHLQWHUHVWUDWHWUDQVDFWLRQFRVWVDQGDOORWKHUSUHPLXPVRUGLVFRXQWV7KHUHLVDSUHVXPSWLRQWKDWWKHFDVKƮRZVDQG WKHH[SHFWHGOLIHRIDJURXSRIVLPLODUƬQDQFLDOLQVWUXPHQWVFDQEHHVWLPDWHGUHOLDEO\+RZHYHULQWKRVHUDUHFDVHVZKHQLWLV QRWSRVVLEOHWRUHOLDEO\HVWLPDWHWKHFDVKƮRZVRUWKHH[SHFWHGOLIHRIDƬQDQFLDOLQVWUXPHQW RUJURXSRIƬQDQFLDOLQVWUXPHQWV WKHHQWLW\VKDOOXVHWKHFRQWUDFWXDOFDVKƮRZVRYHUWKHIXOOFRQWUDFWXDOWHUPRIWKHƬQDQFLDOLQVWUXPHQW RUJURXSRIƬQDQFLDO instruments).

IMPAIRMENT AND NON-COLLECTABILITY OF FINANCIAL ASSETS

At the end of each reporting period SALGA assess whether there is any objective evidence (e.g. continuous defaults on VHWWOHPHQW WKDWDƬQDQFLDODVVHWRUJURXSRIƬQDQFLDODVVHWVLVLPSDLUHG

FINANCIAL ASSETS MEASURED AT AMORTISED COST:

,IWKHUHLVREMHFWLYHHYLGHQFHWKDWDQLPSDLUPHQWORVVRQƬQDQFLDODVVHWVPHDVXUHGDWDPRUWLVHGFRVWKDVEHHQLQFXUUHGWKH DPRXQWRIWKHORVVLVPHDVXUHGDVWKHGLƪHUHQFHEHWZHHQWKHDVVHWoVFDUU\LQJDPRXQWDQGWKHSUHVHQWYDOXHRIHVWLPDWHGIXWXUH FDVKƮRZV H[FOXGLQJIXWXUHFUHGLWORVVHVWKDWKDYHQRWEHHQLQFXUUHG GLVFRXQWHGDWWKHƬQDQFLDODVVHWoVRULJLQDOHƪHFWLYH interest rate. The carrying amount of the asset is reduced through the use of an allowance account. The amount of the loss is UHFRJQLVHGLQVXUSOXVRUGHƬFLW ANNUAL FINANCIAL STATEMENTS ANNUAL

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 in surplus or GHƬFLW7KHUHYHUVDOGRHVQRWUHVXOWLQDFDUU\LQJDPRXQWRIWKHƬQDQFLDODVVHWWKDWH[FHHGVZKDWWKHDPRUWLVHGFRVWZRXOGKDYH been had the impairment not been recognised at the date the impairment is reversed. The amount of the reversal is recognised PART G LQVXUSOXVRUGHƬFLW

INTEREST, LOSSES OR GAINS

,QWHUHVWUHODWLQJWRDƬQDQFLDOLQVWUXPHQWRUDFRPSRQHQWWKDWLVDƬQDQFLDOOLDELOLW\LVUHFRJQLVHGDVLQFRPHRUH[SHQVHLQ VXUSOXVRUGHƬFLW

/RVVHVDQGJDLQVUHODWLQJWRDƬQDQFLDOLQVWUXPHQWRUDFRPSRQHQWWKDWLVDƬQDQFLDOOLDELOLW\LVUHFRJQLVHGDVLQFRPHRUH[SHQVH LQVXUSOXVRUGHƬFLW

159

ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2019

Accounting Policies (continued)

1.8 LEASES

:KHWKHUDOHDVHLVDƬQDQFHOHDVHRUDQRSHUDWLQJOHDVHGHSHQGVRQWKHVXEVWDQFHRIWKHWUDQVDFWLRQUDWKHUWKDQWKHIRUPRI WKHFRQWUDFW6LWXDWLRQVWKDWLQGLYLGXDOO\RULQFRPELQDWLRQZRXOGQRUPDOO\OHDGWRDOHDVHEHLQJFODVVLƬHGDVDƬQDQFHOHDVHDUH • WKHOHDVHWUDQVIHUVRZQHUVKLSRIWKHDVVHWWR6$/*$E\WKHHQGRIWKHOHDVHWHUP • 6$/*$KDVWKHRSWLRQWRSXUFKDVHWKHDVVHWDWDSULFHWKDWLVH[SHFWHGWREHVXƯFLHQWO\ORZHUWKDQWKHIDLUYDOXHDWWKHGDWH WKHRSWLRQEHFRPHVH[HUFLVDEOHIRULWWREHUHDVRQDEO\FHUWDLQDWWKHLQFHSWLRQRIWKHOHDVHWKDWWKHRSWLRQZLOOEHH[HUFLVHG • WKHOHDVHWHUPLVIRUWKHPDMRUSDUWRIWKHHFRQRPLFOLIHRIWKHDVVHWHYHQLIWLWOHLVQRWWUDQVIHUUHG • at the inception of the lease the present value of the minimum lease payments amounts to at least substantially all of the IDLUYDOXHRIWKHOHDVHGDVVHW • WKHOHDVHGDVVHWVDUHRIVXFKDVSHFLDOLVHGQDWXUHWKDWRQO\WKHOHVVHHFDQXVHWKHPZLWKRXWPDMRUPRGLƬFDWLRQV • LI6$/*$FDQFDQFHOWKHOHDVHWKHOHVVRU VORVVHVDVVRFLDWHGZLWKWKHFDQFHOODWLRQDUHERUQHE\6$/*$ • JDLQVRUORVVHVIURPWKHƮXFWXDWLRQLQWKHIDLUYDOXHRIWKHUHVLGXDODFFUXHWR6$/*$ IRUH[DPSOHLQWKHIRUPRIDUHQWUHEDWH HTXDOOLQJPRVWRIWKHVDOHVSURFHHGVDWWKHHQGRIWKHOHDVH • WKHOHVVHHKDVWKHDELOLW\WRFRQWLQXHWKHOHDVHIRUDVHFRQGDU\SHULRGDWDUHQWWKDWLVVXEVWDQWLDOO\ORZHUWKDQPDUNHWUHQW and • $OHDVHLVFODVVLƬHGDVDƬQDQFHOHDVHLILWWUDQVIHUVVXEVWDQWLDOO\DOOWKHULVNVDQGUHZDUGVLQFLGHQWDOWRRZQHUVKLS

$QRSHUDWLQJOHDVHLVDOHDVHRWKHUWKDQDƬQDQFHOHDVH

FINANCE LEASES - WHERE SALGA IS THE LESSEE

)LQDQFHOHDVHVDUHUHFRJQLVHGDVDVVHWVDQGOLDELOLWLHVLQWKHVWDWHPHQWRIƬQDQFLDOSRVLWLRQDWDPRXQWVHTXDOWRWKHIDLUYDOXH of the leased property or, if lower, the present value of the minimum lease payments. The corresponding liability to the lessor is LQFOXGHGLQWKHVWDWHPHQWRIƬQDQFLDOSRVLWLRQDVDƬQDQFHOHDVHREOLJDWLRQ

The discount rate used in calculating the present value of the minimum lease payments is the interest rate implicit in the lease.

0LQLPXPOHDVHSD\PHQWVDUHDSSRUWLRQHGEHWZHHQWKHƬQDQFHFKDUJHDQGUHGXFWLRQRIWKHRXWVWDQGLQJOLDELOLW\7KHƬQDQFH charge is allocated to each period during the lease term so as to produce a constant periodic reduction of the remaining balance of the liability.

Subsequent to initial recognition the asset is accounted for in accordance with the accounting policy applicable to that asset.

OPERATING LEASES - WHERE SALGA IS THE LESSOR

Operating lease income is recognised as revenue on a straight-line basis over the lease term.

OPERATING LEASES - WHERE SALGA IS THE LESSEE

2SHUDWLQJOHDVHSD\PHQWVDUHUHFRJQLVHGDVDQH[SHQVHRQDVWUDLJKWOLQHEDVLVRYHUWKHOHDVHWHUP7KHGLƪHUHQFHEHWZHHQ the amounts recognised as an expense and the contractual payments are recognised as an operating lease asset or liability.

Any contingent rentals are expensed in the period in which they are incurred.

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1.9 CASH AND CASH EQUIVALENTS

Cash comprises cash on hand and demand deposits.

160

ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2019

Accounting Policies (continued)

1.9 CASH AND CASH EQUIVALENTS CONTINUED

Cash and cash equivalents are measured at amortised cost.

Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash and which are VXEMHFWWRDQLQVLJQLƬFDQWULVNRIFKDQJHVLQYDOXH

Cash equivalents are held for the purpose of meeting short-term cash commitments rather than for investment or other purposes. For an investment to qualify as a cash equivalent it must be readily convertible to a known amount of cash and be VXEMHFWWRDQLQVLJQLƬFDQWULVNRIFKDQJHVLQYDOXH7KHUHIRUHDQLQYHVWPHQWQRUPDOO\TXDOLƬHVDVDFDVKHTXLYDOHQWRQO\ZKHQ it has a short maturity of, say, three months or less from the date of acquisition.

SALGA does not have an overdraft facility and is restricted in terms of section 66(3)(c) of the PFMA to borrow money, subject to the approval of the Minister (Executive Authority) in concurrence with the Minister of Finance.

1.10 REVALUATION RESERVE

The revaluation reserve results from the revaluation of property, plant and equipment while still owner occupied. It remains after treating the same assets as investment property since they were vacated by the entity.

Upon transfer of the owner-occupied property to investment property the revaluations surplus is treated in the following manner: • any remaining part of the increase is credited directly to net assets in revaluation surplus. On subsequent disposal of the LQYHVWPHQWSURSHUW\WKHUHYDOXDWLRQVXUSOXVLQFOXGHGLQQHWDVVHWVPD\EHWUDQVIHUUHGWRDFFXPXODWHGVXUSOXVHVRUGHƬFLWV 7KHWUDQVIHUIURPUHYDOXDWLRQVXUSOXVWRDFFXPXODWHGVXUSOXVHVRUGHƬFLWVLVQRWPDGHWKURXJKVXUSOXVRUGHƬFLW

1.11 IMPAIRMENT OF NON-CASH-GENERATING ASSETS

Non-cash-generating assets are assets other than cash-generating assets.

,PSDLUPHQWLVDORVVLQWKHIXWXUHHFRQRPLFEHQHƬWVRUVHUYLFHSRWHQWLDORIDQDVVHWRYHUDQGDERYHWKHV\VWHPDWLFUHFRJQLWLRQ RIWKHORVVRIWKHDVVHWoVIXWXUHHFRQRPLFEHQHƬWVRUVHUYLFHSRWHQWLDOWKURXJKGHSUHFLDWLRQ DPRUWLVDWLRQ

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) WKHSHULRGRIWLPHRYHUZKLFKDQDVVHWLVH[SHFWHGWREHXVHGE\6$/*$RU (b) the number of production or similar units expected to be obtained from the asset by SALGA.

Criteria developed by SALGA to distinguish non-cash-generating assets from cash-generating assets are as follows: SALGA's FINANCIAL STATEMENTS ANNUAL mandate or intention is not in pursuit of commercial return but service delivery to its members, therefore assets acquired by SALGA are solely for service delivery or facilitate service delivery to its members (i.e. administrative in nature)

There is no uncertainty as to whether SALGA assets are non-cash generating assets, as SALGA does not have an asset or class PART G RIDVVHWVWKDWRSHUDWHRUJHQHUDWHFDVKƮRZVLQGHSHQGHQWO\IURPRWKHUDVVHWVQRUGRHVLWVDVVHWVIRUPSDUWRIDJURXSRIDVVHWV WKDWJHQHUDWHFDVKƮRZVLQGHSHQGHQWO\IURPRWKHUDVVHWV

IDENTIFICATION

When the carrying amount of a non-cash-generating asset exceeds its recoverable service amount, it is impaired.

SALGA assesses at each reporting date whether there is any indication that a non-cash-generating asset may be impaired. If any such indication exists, SALGA estimates the recoverable service amount of the asset.

161

ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2019

Accounting Policies (continued)

1.11 IMPAIRMENT OF NON-CASH-GENERATING ASSETS CONTINUED

When SALGA is assessing whether there is any indication that an asset may be impaired, at a minimum the following indications are considered:

External sources of information (a) Cessation, or near cessation, of the demand or need for services provided by the asset. (b) 6LJQLƬFDQWORQJWHUPFKDQJHVZLWKDQDGYHUVHHƪHFWRQWKHHQWLW\KDYHWDNHQSODFHGXULQJWKHSHULRGRUZLOOWDNHSODFHLQ the near future, in the technological, legal or government policy environment in which the entity operates.

Internal sources of information (c) Evidence is available of physical damage of an asset. (d) 6LJQLƬFDQWORQJWHUPFKDQJHVZLWKDQDGYHUVHHƪHFWRQWKHHQWLW\KDYHWDNHQSODFHGXULQJWKHSHULRGRUDUHH[SHFWHGWR take place in the near future, in the extent to which, or manner in which, an asset is used or is expected to be used. These changes include the asset becoming idle, plans to discontinue or restructure the operation to which an asset belongs, or plans to dispose of an asset before the previously expected date. (e) (YLGHQFHLVDYDLODEOHIURPLQWHUQDOUHSRUWLQJWKDWLQGLFDWHVWKDWWKHVHUYLFHSHUIRUPDQFHRIDQDVVHWLVRUZLOOEHVLJQLƬFDQWO\ worse than expected.

VALUE IN USE

Value in use of a non-cash-generating asset is the present value of the asset's remaining service potential.

The present value of the remaining service potential of non-cash-generating assets is determined using the following approach:

SERVICE UNITS APPROACH

The present value of the remaining service potential of the asset is determined by reducing the current cost of the remaining service potential of the asset before impairment, to conform to the reduced number of service units expected from the asset in its impaired state. The current cost of replacing the remaining service potential of the asset before impairment is determined as the depreciated reproduction or replacement cost of the asset before impairment, whichever is lower.

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.

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REVERSAL OF AN IMPAIRMENT LOSS

SALGA 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 recoverable service amount of that asset is estimated.

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.

162

ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2019

Accounting Policies (continued)

1.11 IMPAIRMENT OF NON-CASH-GENERATING ASSETS CONTINUED

$UHYHUVDORIDQLPSDLUPHQWORVVIRUDQRQFDVKJHQHUDWLQJDVVHWLVUHFRJQLVHGLPPHGLDWHO\LQVXUSOXVRUGHƬFLW

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.

1.12 EMPLOYEE BENEFITS

SHORT-TERM EMPLOYEE BENEFITS

7KHFRVWRIVKRUWWHUPHPSOR\HHEHQHƬWV WKRVHSD\DEOHZLWKLQPRQWKVDIWHUWKHHQGRIWKHUHSRUWLQJSHULRGLQZKLFKWKH VHUYLFHLVUHQGHUHGVXFKDVSDLGYDFDWLRQOHDYHDQGVLFNOHDYHERQXVHVDQGQRQPRQHWDU\EHQHƬWVVXFKDVVWXG\OHDYH DUH recognised in the period in which the service is rendered and are not discounted.

The organisation remunerates employees on total cost-to-company basis, this package includes SALGA's portion of contribution LQUHVSHFWRIUHWLUHPHQWEHQHƬWV7KHH[SHFWHGFRVWRIFRPSHQVDWHGDEVHQFHVLVUHFRJQLVHGDVDQH[SHQVHDVWKHHPSOR\HHV render services that increase their entitlement or, in the case of non-accumulating absences, when the absence occurs.

The expected cost of bonus payments is recognised as an expense when there is a legal or constructive obligation to make such payments as a result of past performance.

DEFINED CONTRIBUTION PLANS

3D\PHQWVWRGHƬQHGFRQWULEXWLRQUHWLUHPHQWEHQHƬWSODQVDUHFKDUJHGDVDQH[SHQVHDVWKH\IDOOGXH

3D\PHQWVPDGHWRLQGXVWU\PDQDJHGUHWLUHPHQWEHQHƬWVFKHPHVDUHGHDOWZLWKDVGHƬQHGFRQWULEXWLRQSODQVZKHUHWKH 6$/*$oVREOLJDWLRQXQGHUWKHVFKHPHVLVHTXLYDOHQWWRWKRVHDULVLQJLQDGHƬQHGFRQWULEXWLRQUHWLUHPHQWEHQHƬWSODQ

6$/*$ VGHƬQHGFRQWULEXWLRQSODQVDUHDVIROORZV • Pension fund - an employer contribution based on 10.5% p.a. based on 75% of an employee’s basic salary towards pension and/or retirement funds. Employees are required to contribute a corresponding contribution of 6.5% p.a. based on their basic salary. • Medical aid - an employer contribution capped at R2 755 per month (2017: R2 585) per employee per calendar year. The FRQWULEXWLRQDPRXQWLVUHYLHZHGDQQXDOO\GHSHQGLQJRQSUHYDLOLQJPHGLFDOLQVXUDQFHLQƮDWLRQ • *URXSULVNDQHPSOR\HUFRQWULEXWLRQWKDWFRYHUVIXQHUDOEHQHƬWIRUWKHHPSOR\HHDQGLPPHGLDWHIDPLO\PHPEHUVDWDFRVW of R99.6 per employee. FINANCIAL STATEMENTS ANNUAL • The risk cover also includes life assurance at three times an employee’s annual salary in case of death. The risk cover is based on 1.715% (2017: 1.278%) of SALGA's basic payroll costs. • Long-term incentive scheme - the employer provides for Long-Term Incentive (LTI) scheme for Fixed Term Contract (FTC)

HPSOR\HHV7KHVHHPSOR\HHVPDNHXSWKHWRSPDQDJHPHQWVWUXFWXUHRIWKHRUJDQLVDWLRQDQGDUHHPSOR\HGRQDƬYH PART G \HDUƬ[HGWHUPFRQWUDFW7KHLQFHQWLYHVFKHPHLVEDVHGRQSHUIRUPDQFH PHULW DQGWKHHPSOR\HHUHPDLQLQJLQWKHHPSOR\ of the organisation for a period longer than 3 years.

DEFINED BENEFIT PLANS

$GHƬQHGEHQHƬWSODQLVDSRVWHPSOR\PHQWEHQHƬWSODQZKHUHWKHHQWLW\ VREOLJDWLRQLVWRSURYLGHWKHDJUHHGEHQHƬWVWR FXUUHQWDQGIRUPHUHPSOR\HHVDQGWKHDFWXDULDOULVNVIDOOLQVXEVWDQFHRQWKHHQWLW\

)RUGHƬQHGEHQHƬWSODQVWKHFRVWRISURYLGLQJWKHEHQHƬWVLVGHWHUPLQHGXVLQJWKHSURMHFWHGFUHGLWPHWKRG

163

ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2019

Accounting Policies (continued)

1.12 EMPLOYEE BENEFITS CONTINUED

Re-measurements or actuarial valuations are conducted on an annual basis by independent actuaries separately for each plan.

6$/*$UHFRJQLVHVWKHQHWWRWDORIWKHIROORZLQJDPRXQWVLQVXUSOXVRUGHƬFLW (a) interest cost (b) re-measurements or actuarial gains and losses

*DLQVRUORVVHVRQWKHFXUWDLOPHQWRUVHWWOHPHQWRIDGHƬQHGEHQHƬWSODQLVUHFRJQLVHGZKHQ6$/*$LVGHPRQVWUDEO\FRPPLWWHG to curtailment or settlement.

7KHDPRXQWUHFRJQLVHGDVDQREOLJDWLRQLQWKHVWDWHPHQWRIƬQDQFLDOSRVLWLRQUHSUHVHQWVWKHSUHVHQWYDOXHRIWKHGHƬQHG EHQHƬWREOLJDWLRQDVDGMXVWHGIRUXQUHFRJQLVHGDFWXDULDOJDLQVDQGORVVHVDQGXQUHFRJQLVHGSDVWVHUYLFHFRVWVDQGUHGXFHGE\ the fair value of plan assets.

6$/*$SURYLGHVSRVWHPSOR\PHQWKHDOWKFDUHEHQHƬWXSRQUHWLUHPHQWWRVRPHUHWLUHHV

7KHHQWLWOHPHQWWRSRVWUHWLUHPHQWKHDOWKFDUHEHQHƬWVLVEDVHGRQWKHHPSOR\HHUHPDLQLQJLQVHUYLFHXSWRUHWLUHPHQWDJHDQG WKHFRPSOHWLRQRIDPLQLPXPVHUYLFHSHULRG7KHH[SHFWHGFRVWVRIWKHVHEHQHƬWVDUHDFFUXHGRYHUWKHSHULRGRIHPSOR\PHQW ,QGHSHQGHQWTXDOLƬHGDFWXDULHVFDUU\RXWYDOXDWLRQVRIWKHVHREOLJDWLRQV$QDQQXDOFKDUJHWRVXUSOXVRUORVVLVPDGHWRFRYHU both these liabilities.

1.13 PROVISIONS AND CONTINGENCIES

Provisions are recognised when: • 6$/*$KDVDSUHVHQWREOLJDWLRQDVDUHVXOWRIDSDVWHYHQW • LWLVSUREDEOHWKDWDQRXWƮRZRIUHVRXUFHVHPERG\LQJHFRQRPLFEHQHƬWVRUVHUYLFHSRWHQWLDOZLOOEHUHTXLUHGWRVHWWOHWKH REOLJDWLRQDQG • a reliable estimate can be made of the obligation.

The amount of a provision is the best estimate of the expenditure expected to settle the present obligation at the reporting date.

:KHUHWKHHƪHFWRIWLPHYDOXHRIPRQH\LVPDWHULDOWKHDPRXQWRIDSURYLVLRQLVWKHSUHVHQWYDOXHRIWKHH[SHQGLWXUHVH[SHFWHG to settle the obligation.

7KHGLVFRXQWUDWHLVDSUHWD[UDWHWKDWUHƮHFWVFXUUHQWPDUNHWDVVHVVPHQWVRIWKHWLPHYDOXHRIPRQH\DQGWKHULVNVVSHFLƬF 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 SALGA settles the obligation. The reimbursement is treated as a separate asset. The amount recognised for the reimbursement is limited to the amount of the provision.

3URYLVLRQVDUHUHYLHZHGDWHDFKUHSRUWLQJGDWHDQGDGMXVWHGWRUHƮHFWWKHFXUUHQWEHVWHVWLPDWH3URYLVLRQVDUHUHYHUVHGLILWLV QRORQJHUSUREDEOHWKDWDQRXWƮRZRIUHVRXUFHVHPERG\LQJHFRQRPLFEHQHƬWVRUVHUYLFHSRWHQWLDOZLOOEHUHTXLUHGWRVHWWOHWKH obligation.

:KHUHGLVFRXQWLQJLVXVHGWKHFDUU\LQJDPRXQWRIDSURYLVLRQLQFUHDVHVLQHDFKSHULRGWRUHƮHFWWKHSDVVDJHRIWLPH7KLV increase is recognised as an interest expense.

A provision is used only for expenditures for which the provision was originally recognised.

164

ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2019

Accounting Policies (continued)

1.14 CONDITIONAL GRANTS AND RECEIPTS

Revenue received from conditional grants, donations and funding are recognised as revenue and a corresponding asset to the extent that SALGA has complied with any of the criteria, conditions or obligations embodied in the agreement. To the extent that the criteria, conditions or obligations have not been met, a liability is recognised.

1.15 REVENUE FROM EXCHANGE TRANSACTIONS

5HYHQXHLVWKHJURVVLQƮRZRIHFRQRPLFEHQHƬWVRUVHUYLFHSRWHQWLDOGXULQJWKHUHSRUWLQJSHULRGZKHQWKRVHLQƮRZVUHVXOWLQ an increase in net assets.

An exchange transaction is one in which SALGA 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.

MEASUREMENT

Revenue is measured at the fair value of the consideration received or receivable, net of trade discounts and volume rebates.

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 WUDQVDFWLRQFDQEHHVWLPDWHGUHOLDEO\ZKHQDOOWKHIROORZLQJFRQGLWLRQVDUHVDWLVƬHG • WKHDPRXQWRIUHYHQXHFDQEHPHDVXUHGUHOLDEO\ • LWLVSUREDEOHWKDWWKHHFRQRPLFEHQHƬWVRUVHUYLFHSRWHQWLDODVVRFLDWHGZLWKWKHWUDQVDFWLRQZLOOƮRZWR6$/*$ • WKHVWDJHRIFRPSOHWLRQRIWKHWUDQVDFWLRQDWWKHUHSRUWLQJGDWHFDQEHPHDVXUHGUHOLDEO\DQG • the costs incurred for the transaction and the costs to complete the transaction can be measured reliably.

:KHQVHUYLFHVDUHSHUIRUPHGE\DQLQGHWHUPLQDWHQXPEHURIDFWVRYHUDVSHFLƬHGWLPHIUDPHUHYHQXHLVUHFRJQLVHGRQD VWUDLJKWOLQHEDVLVRYHUWKHVSHFLƬHGWLPHIUDPHXQOHVVWKHUHLVHYLGHQFHWKDWVRPHRWKHUPHWKRGEHWWHUUHSUHVHQWVWKHVWDJH RIFRPSOHWLRQ:KHQDVSHFLƬFDFWLVPXFKPRUHVLJQLƬFDQWWKDQDQ\RWKHUDFWVWKHUHFRJQLWLRQRIUHYHQXHLVSRVWSRQHGXQWLO WKHVLJQLƬFDQWDFWLVH[HFXWHG

When the outcome of the transaction involving the rendering of services cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that are recoverable.

STAGE OF COMPLETION FOR MEMBERSHIP LEVIES ANNUAL FINANCIAL STATEMENTS ANNUAL 7KHPHPEHUVKLSOHY\HQWLWOHVPHPEHUVWR VHUYLFHV RU EHQHƬWVRIDVVRFLDWLRQ IRUWKHƬQDQFLDOSHULRGRI6$/*$$OWKRXJKWKH formula for fees is based on annual budgeted salary, this is not relevant in terms of revenue recognition. The recognition of UHYHQXHGHSHQGVUDWKHURQWKHWLPLQJQDWXUHDQGYDOXHRIEHQHƬWVSURYLGHG PART G On the basis of the accounting standard GRAP 9, the stage of completion needs to be determined at year end, and revenue recognised in accordance with the stage of completion of the transaction.

The guidance in GRAP 9 par A11 of the Appendix also states that the membership levies should be recognised on the basis ZKLFKUHƮHFWVWKHWLPLQJRIEHQHƬWVSURYLGHG

165

ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2019

Accounting Policies (continued)

1.15 REVENUE FROM EXCHANGE TRANSACTIONS CONTINUED

"Revenue recognition depends on the nature of the services provided. If the fee permits only membership, and all other services or products are paid for separately, or if there is a separate annual subscription, WKHIHHLVUHFRJQLVHGDVUHYHQXHZKHQQRVLJQLƬFDQWXQFHUWDLQW\DVWRLWVFROOHFWDELOLW\H[LVWV. If the fee entitles the member to services or publications to be provided during the membership period or to purchase goods or services at prices lower than those charged to non-members, it is recognised on a EDVLVWKDWUHƮHFWVWKHWLPLQJQDWXUHDQGYDOXHRIWKHEHQHƬWVSURYLGHG".

1.16 REVENUE FROM NON-EXCHANGE TRANSACTIONS

1RQH[FKDQJHWUDQVDFWLRQVDUHGHƬQHGDVWUDQVDFWLRQVZKHUHWKHHQWLW\UHFHLYHVYDOXHIURPDQRWKHUHQWLW\ZLWKRXWGLUHFWO\ giving approximately equal value in exchange.

7UDQVIHUVDUHLQƮRZVRIIXWXUHHFRQRPLFEHQHƬWVRUVHUYLFHSRWHQWLDOIURPQRQH[FKDQJHWUDQVDFWLRQVRWKHUWKDQWD[HV

RECOGNITION AND MEASUREMENT

$QLQƮRZRIUHVRXUFHVIURPDQRQH[FKDQJHWUDQVDFWLRQUHFRJQLVHGDVDQDVVHWLVUHFRJQLVHGDVUHYHQXHH[FHSWWRWKHH[WHQW WKDWDOLDELOLW\LVDOVRUHFRJQLVHGLQUHVSHFWRIWKHVDPHLQƮRZ

$V6$/*$VDWLVƬHVDSUHVHQWREOLJDWLRQUHFRJQLVHGDVDOLDELOLW\LQUHVSHFWRIDQLQƮRZRIUHVRXUFHVIURPDQRQH[FKDQJH transaction recognised as an asset, it reduces the carrying amount of the liability recognised and recognises an amount of revenue equal to that reduction.

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.

Revenue is measured at the fair value of the consideration received or receivable, net of trade discounts and volume rebates.

TRANSFERS

Apart from services in kind, which are not recognised, SALGA recognises an asset in respect of transfers when the transferred UHVRXUFHVPHHWWKHGHƬQLWLRQRIDQDVVHWDQGVDWLVI\WKHFULWHULDIRUUHFRJQLWLRQDVDQDVVHW

Transferred assets are measured at their fair value as at the date of acquisition.

GIFTS AND DONATIONS

*LIWVDQGGRQDWLRQVDUHUHFRJQLVHGDVDVVHWVDQGUHYHQXHZKHQLWLVSUREDEOHWKDWWKHIXWXUHHFRQRPLFEHQHƬWVRUVHUYLFH SRWHQWLDOZLOOƮRZWR6$/*$DQGWKHIDLUYDOXHRIWKHDVVHWVFDQEHPHDVXUHGUHOLDEO\

1.17 INVESTMENT REVENUE

,QYHVWPHQWUHYHQXHLVUHFRJQLVHGRQDWLPHSURSRUWLRQEDVLVXVLQJWKHHƪHFWLYHLQWHUHVWPHWKRG

1.18 BUDGET INFORMATION

*HQHUDO SXUSRVH ƬQDQFLDO UHSRUWLQJ E\ 6$/*$ VKDOO SURYLGH LQIRUPDWLRQ RQ ZKHWKHU UHVRXUFHV ZHUH REWDLQHG DQG XVHG LQ accordance with the legally adopted budget.

7KHDQQXDOƬQDQFLDOVWDWHPHQWVDQGWKHEXGJHWDUHSUHSDUHGRQDFRPSDUDEOHEDVLVRIDFFRXQWLQJWKHUHIRUHDFRPSDULVRQ ZLWKWKHEXGJHWHGDPRXQWVIRUWKHUHSRUWLQJSHULRGKDYHEHHQLQFOXGHGLQWKHQRWHVWRWKHDQQXDOƬQDQFLDOVWDWHPHQWV

166

ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2019

Accounting Policies (continued)

1.19 TRANSLATION OF FOREIGN CURRENCIES

FOREIGN CURRENCY TRANSACTIONS

A foreign currency transaction is recorded, on initial recognition in Rand, by applying to the foreign currency amount the spot exchange rate between the functional currency and the foreign currency at the date of the transaction.

At each reporting date: • IRUHLJQFXUUHQF\PRQHWDU\LWHPVDUHWUDQVODWHGXVLQJWKHFORVLQJUDWH • non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange UDWHDWWKHGDWHRIWKHWUDQVDFWLRQDQG • non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined.

([FKDQJHGLƪHUHQFHVDULVLQJRQWKHVHWWOHPHQWRIPRQHWDU\LWHPVRURQWUDQVODWLQJPRQHWDU\LWHPVDWUDWHVGLƪHUHQWIURP WKRVHDWZKLFKWKH\ZHUHWUDQVODWHGRQLQLWLDOUHFRJQLWLRQGXULQJWKHSHULRGRULQSUHYLRXVDQQXDOƬQDQFLDOVWDWHPHQWVDUH UHFRJQLVHGLQVXUSOXVRUGHƬFLWLQWKHSHULRGLQZKLFKWKH\DULVH

When a gain or loss on a non-monetary item is recognised directly in net assets, any exchange component of that gain or loss is UHFRJQLVHGGLUHFWO\LQQHWDVVHWV:KHQDJDLQRUORVVRQDQRQPRQHWDU\LWHPLVUHFRJQLVHGLQVXUSOXVRUGHƬFLWDQ\H[FKDQJH FRPSRQHQWRIWKDWJDLQRUORVVLVUHFRJQLVHGLQVXUSOXVRUGHƬFLW

&DVKƮRZVDULVLQJIURPWUDQVDFWLRQVLQDIRUHLJQFXUUHQF\DUHUHFRUGHGLQ5DQGE\DSSO\LQJWRWKHIRUHLJQFXUUHQF\DPRXQWWKH ruling spot exchange rate.

1.20 COMPARATIVE FIGURES

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1.21 FRUITLESS AND WASTEFUL EXPENDITURE

Fruitless expenditure means expenditure which was made in vain and would have been avoided had reasonable care been exercised.

$OO H[SHQGLWXUH UHODWLQJ WR IUXLWOHVV DQG ZDVWHIXO H[SHQGLWXUH LV UHFRJQLVHG DV DQ H[SHQVH LQ WKH VWDWHPHQW RI ƬQDQFLDO SHUIRUPDQFHLQWKH\HDUWKDWWKHH[SHQGLWXUHZDVLQFXUUHG7KHH[SHQGLWXUHLVFODVVLƬHGLQDFFRUGDQFHZLWKWKHQDWXUHRIWKH ANNUAL FINANCIAL STATEMENTS ANNUAL H[SHQVHDQGZKHUHUHFRYHUHGLWLVVXEVHTXHQWO\DFFRXQWHGIRUDVLQFRPHLQWKHVWDWHPHQWRIƬQDQFLDOSHUIRUPDQFH

1.22 IRREGULAR EXPENDITURE

,UUHJXODUH[SHQGLWXUHDVGHƬQHGLQVHFWLRQRIWKH3)0$LVH[SHQGLWXUHRWKHUWKDQXQDXWKRULVHGH[SHQGLWXUHLQFXUUHGLQ PART G contravention of or that is not in accordance with a requirement of any applicable legislation, including- (a) WKH3)0$RU (b) WKH6WDWH7HQGHU%RDUG$FW $FW1RRI RUDQ\UHJXODWLRQVPDGHLQWHUPVRIWKH$FWRU (c) any provincial legislation providing for procurement procedures in that provincial government.

167

ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2019

Accounting Policies (continued)

1.22 IRREGULAR EXPENDITURE CONTINUED

National Treasury INSTRUCTION NO.2 OF 2019/2020 ON IRREGULAR EXPENDITURE FRAMEWORK issued in terms of section F LL DQG E LL RI3)0$RQHƪHFWLYHVWHSVWRSUHYHQWLUUHJXODUH[SHQGLWXUH7KHLQVWUXFWLRQUHIHUHQFHGVHFWLRQ F and 57(c) of the PFMA with regard to appropriate steps to regard to prevent irregular expenditure. The INSTRUCTION draws its DXWKRULW\IURPVHFWLRQV H WR D RIWKH3)0$7KHHƪHFWLYHGDWHRIWKH,16758&7,21LVIURP0D\ • ,UUHJXODUH[SHQGLWXUHWKDWZDVLQFXUUHGDQGLGHQWLƬHGGXULQJWKHFXUUHQWƬQDQFLDO\HDUDQGZKLFKZDVFRQGRQHGEHIRUH \HDUHQGDQGRUEHIRUHƬQDOLVDWLRQRIWKHDQQXDOƬQDQFLDOVWDWHPHQWVPXVWDOVREHUHFRUGHGDSSURSULDWHO\LQWKHLUUHJXODU expenditure register. In such an instance, no further action is required with the exception of updating the note to the annual ƬQDQFLDOVWDWHPHQWV • ,UUHJXODUH[SHQGLWXUHWKDWZDVLQFXUUHGDQGLGHQWLƬHGGXULQJWKHFXUUHQWƬQDQFLDO\HDUDQGIRUZKLFKFRQGRQHPHQWLVEHLQJ awaited at year end must be recorded in the irregular expenditure register. No further action is required with the exception RIXSGDWLQJWKHQRWHWRWKHƬQDQFLDOVWDWHPHQWV • :KHUHLUUHJXODUH[SHQGLWXUHZDVLQFXUUHGLQWKHSUHYLRXVƬQDQFLDO\HDUDQGLVRQO\FRQGRQHGLQWKHIROORZLQJƬQDQFLDO\HDU WKHUHJLVWHUDQGWKHGLVFORVXUHQRWHWRWKHƬQDQFLDOVWDWHPHQWVPXVWEHXSGDWHGZLWKWKHDPRXQWFRQGRQHG • ,UUHJXODUH[SHQGLWXUHWKDWZDVLQFXUUHGDQGLGHQWLƬHGGXULQJWKHFXUUHQWƬQDQFLDO\HDUDQGZKLFKZDVQRWFRQGRQHGE\WKH National Treasury or the relevant authority must be recorded appropriately in the irregular expenditure register. If liability for the irregular expenditure can be attributed to a person, a debt account must be created if such a person is liable in law. Immediate steps must thereafter be taken to recover the amount from the person concerned. If recovery is not possible, the DFFRXQWLQJRƯFHURUDFFRXQWLQJDXWKRULW\PD\ZULWHRƪWKHDPRXQWDVGHEWLPSDLUPHQWDQGGLVFORVHVXFKLQWKHUHOHYDQW QRWHWRWKHDQQXDOƬQDQFLDOVWDWHPHQWV7KHLUUHJXODUH[SHQGLWXUHUHJLVWHUPXVWDOVREHXSGDWHGDFFRUGLQJO\,IWKHLUUHJXODU expenditure has not been condoned and no person is liable in law, the expenditure related thereto must remain against the UHOHYDQWSURJUDPPHH[SHQGLWXUHLWHPEHGLVFORVHGDVVXFKLQWKHQRWHWRWKHDQQXDOƬQDQFLDOVWDWHPHQWVDQGXSGDWHG accordingly in the irregular expenditure register.

1.23 RELATED PARTIES

SALGA operates in an economic sector currently dominated by entities directly or indirectly owned by the South African Government. As a consequence of the constitutional independence of the three spheres of government in South Africa, only entities within the national sphere of government in respect of the Executive Authority (CoGTA) and members of the NEC and their respective municipalities belonging from the local sphere of government are considered to be related parties.

Management are those persons responsible for planning, directing and controlling the activities of SALGA, including those charged with the governance of SALGA in accordance with legislation and SALGA Constitution.

&ORVHPHPEHUVRIWKHIDPLO\RIDSHUVRQDUHFRQVLGHUHGWREHWKRVHIDPLO\PHPEHUVZKRPD\EHH[SHFWHGWRLQƮXHQFHRUEH LQƮXHQFHGE\WKDWPDQDJHPHQWLQWKHLUGHDOLQJVZLWKWKHHQWLW\

A related party is considered to be related if one party has the ability to control the other party or jointly control or exercise VLJQLƬFDQWLQƮXHQFHRYHUWKHRWKHUSDUW\LQPDNLQJƬQDQFLDODQGRSHUDWLQJGHFLVLRQVRULIWKHUHODWHGSDUW\DQGWKHRWKHUHQWLW\ are subject to common control.

6SHFLƬFLQIRUPDWLRQZLWKUHJDUGVWRUHODWHGSDUW\WUDQVDFWLRQVLVLQFOXGHGLQWKHGLVFORVXUHQRWHV

IDENTIFICATION OF RELATED PARTIES

&RQWUROOLQJ(QWLWLHV5HODWHG3DUW\LGHQWLƬFDWLRQ All municipalities are represented at SALGA through direct membership to SALGA, furthermore representation in SALGA structures is carried by the elected provincial representative at a Provincial Conference as well at National Conference.

The National Conference elects representatives that comprise the National Executive Committee of SALGA (Accounting Authority). Each municipality has a single vote that entitles it to vote at SALGA governance structures. A single municipality ZRXOGQRWKDYHFRQWURORUVLJQLƬFDQWLQƮXHQFHRYHUWKHUXQQLQJWKHDƪDLUVRUGHWHUPLQLQJWKHSROLFLHVRI6$/*$7KHFRQWURO

168

ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2019

Accounting Policies (continued)

1.23 RELATED PARTIES CONTINUED

DQGVLJQLƬFDQWLQƮXHQFHRYHU6$/*$oVSROLFLHVDQGƬQDQFHVLVMRLQWO\KHOGP\DOOWKHPXQLFLSDOLWLHV,QWHUPVRI6$/*$oV constitution all the municipalities are members and would have equal rights over the residual assets of the organisation XSRQGLVVROXWLRQ7KHWHQGLUHFWO\HOHFWHGPHPEHUVDW1DWLRQDO&RQIHUHQFHDQGWKHQLQHH[RƯFLRPHPEHUVHOHFWHGE\WKH respective Provincial Conferences are related parties of SALGA by virtue of being part of the National Executive as well as WKH&KLHI([HFXWLYHZKRLVDOVRDQH[RƯFLRPHPEHURIWKH1(&GXHWRKLVUROH7KH1(&KDVDQRSWLRQWRFRRSWXSWRWKUHH members, who once co-opted become related parties by virtue of being part of the National Executive of SALGA.

SALGA does not have a sister entity that is subjected to common control by the National Conference or jointly by the 257 municipalities in South Africa.

SIGNIFICANT INFLUENCE ENTITIES RELATED PARTIES IDENTIFICATION

/HJLVODWLYHO\ 6$/*$ UHSRUWV WR WKH 'HSDUWPHQW RI &RUSRUDWH *RYHUQDQFHDQG7UDGLWLRQDO$ƪDLUV &R*7$ 6$/*$UHSRUWV on a quarterly to the Minister of CoGTA in line with Public Finance Management Act (PFMA) and its regulations. CoGTA has VLJQLƬFDQWLQƮXHQFHRYHU6$/*$oVDFWLYLWLHVE\YLUWXHRI&R*7$oVUROHDVWKHGHVLJQDWHG([HFXWLYH$XWKRULW\LQWHUPVRIWKH PFMA. The department is tasked with the function of developing national policies and legislation with regard to provinces and ORFDOJRYHUQPHQW&R*7$oVUROHKDVDGLUHFWLPSDFWRUVLJQLƬFDQWLQƮXHQFHRYHUWKHGHFLVLRQVRI6$/*$oVSROLFLHVDQGƬQDQFH decisions. Although disclosed as a Related Party transaction, the fees paid by CoGTA to SALGA are part of normal funding that Government grants to its entities.

6HQLRUPDQDJHPHQWRI6$/*$FRPSULVHVRIWKH&KLHI([HFXWLYH2ƯFHU&KLHI)LQDQFLDO2ƯFHU([HFXWLYH0DQDJHULQWKH2ƯFH RIWKH&KLHI([HFXWLYHDQGRWKHUVHQLRUPDQDJHUVLQFOXGLQJWKHLUFORVHIDPLO\PHPEHUVKDYHEHHQLGHQWLƬHGDV5HODWHG3DUWLHV RI6$/*$GXHWRWKHVLJQLƬFDQWLQƮXHQFHWKDWVHQLRUNH\PDQDJHPHQWH[HUWRYHU6$/*$oVRSHUDWLQJDQGƬQDQFHSROLFLHV

7KHJRYHUQLQJERG\PHPEHUVRI6$/*$EHLQJWKH1(&$XGLW&RPPLWWHHDQG3HUIRUPDQFHDQG5HPXQHUDWLRQ &RPPLWWHHPHPEHUVDQGWKHLUFORVHIDPLOLHVKDYHEHHQLGHQWLƬHGDV5HODWHG3DUWLHVGXHWRWKHVLJQLƬFDQWLQƮXHQFHWKHVH VWUXFWXUHVH[HUWRYHU6$/*$oVRSHUDWLQJDQGƬQDQFHSROLFLHV

6$/*$GRHVQRWSURYLGHORDQVZKHWKHUDWPDUNHWUDWHVSULFHVRUQRQPDUNHWUHODWHGUDWHVSULFHVWRHLWKHU6HQLRU0DQDJHPHQW 1(&PHPEHUV$XGLW&RPPLWWHHDQG3HUIRUPDQFHDQG5HPXQHUDWLRQ&RPPLWWHHPHPEHUV

Only transactions with related parties not at arm’s length or not in the ordinary course of business are disclosed.

Compensation paid to key management personnel including their family members, where relevant is included in the disclosure notes

1.24 COMMITMENTS ANNUAL FINANCIAL STATEMENTS ANNUAL

&RPPLWPHQWVDUHUHFRUGHGDWFRVWLQWKHQRWHVWRWKHƬQDQFLDOVWDWHPHQWVZKHQWKHUHLVDFRQWUDFWXDODUUDQJHPHQWRUDQ approval by management in a manner that raises a valid expectation that SALGA will discharge its responsibilities thereby LQFXUULQJIXWXUHH[SHQGLWXUHWKDWZLOOUHVXOWLQWKHRXWƮRZRIFDVK PART G

,WHPVDUHFODVVLƬHGDVFRPPLWPHQWVZKHQDQHQWLW\KDVFRPPLWWHGLWVHOIWRIXWXUHWUDQVDFWLRQVWKDWZLOOQRUPDOO\UHVXOWLQWKH RXWƮRZRIFDVK

1.25 SEGMENT REPORTING

SALGA has considered the implementation of GRAP 18 – Segment reporting, however the organisation is unable to implement the standard because it does not satisfy all the requirements of the standard. GRAP 18.05(b) requires regular review of the SRWHQWLDOVHJPHQWƬQDQFLDOLQIRUPDWLRQDWLWVPDQDJHPHQWPHHWLQJVIRUWKHSXUSRVHRIPDNLQJGHFLVLRQVDERXWUHVRXUFHV allocations.

169

ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2019

Accounting Policies (continued)

1.25 SEGMENT REPORTING CONTINUED

6HFWLRQ D L RIWKH3)0$UHTXLUHVWKDWSXEOLFHQWLWLHVPXVWHQVXUHDQGPDLQWDLQDQHƪHFWLYHHƯFLHQWDQGWUDQVSDUHQW V\VWHPVRIƬQDQFLDODQGULVNPDQDJHPHQW,QHQVXULQJDWUDQVSDUHQWV\VWHPIRUUHVRXUFHDOORFDWLRQ6$/*$EXGJHWLQJSURFHVV includes “Budget Panel Hearings”. The Budget Panel is a formal established forum where all business units are granted an equal opportunity to present their respective programmes, in detail or summary depending on the process for each year.

The SALGA budget process requires all business units to populate their budget, in a prescribed format, on an annual basis based on their annual priorities in line with the approved annual plan. The respective budgets are presented to the Budget Panel which is chaired by a member of SALGA’s National Executive Committee (NEC). Members of the Budget Panel also include WKH&KLHI)LQDQFH2ƯFHU &)2 ([HFXWLYH0DQDJHU (0 DQGWKH&KLHI([HFXWLYH2ƯFHU &(2 DOWHUQDWHFKDLUSHUVRQ ZKR assist the panel in dealing with various inputs from the directorates and provinces. The Budget panel is a structure that decides and recommends the budget allocation after deliberations and requests presentation from all cost centres, based on the organisational strategic imperatives and advice of the CFO.

Financial management reports for business units are only presented at management meetings for budget implementation DQGFRVWPRQLWRULQJSXUSRVHV7KHUHDUHQRFRPSUHKHQVLYHVHJPHQWƬQDQFLDOUHSRUWVWKDWVHUYHDWPDQDJHPHQWPHHWLQJVIRU SXUSRVHVRIPDNLQJGHFLVLRQVDERXWUHVRXUFHVDOORFDWLRQVDVGHƬQHGLQWKHVWDQGDUG,QYLHZRIWKHDERYHPHQWLRQHG6$/*$ cannot comply with all the requirements of GRAP 18 and thus the standard is not applicable to the organisation.

1.26 NEW STANDARDS AND INTERPRETATIONS

STANDARDS AND INTERPRETATIONS ISSUED, BUT NOT YET EFFECTIVE

7KHHQWLW\KDVQRWDGRSWHGWKHIROORZLQJVWDQGDUGVDQGLQWHUSUHWDWLRQVZKLFKKDYHEHHQSXEOLVKHGLVVXHGEXWQRW\HWHƪHFWLYH

Document no Title Business case link GRAP 34 Separate Financial 6HSDUDWHƬQDQFLDOVWDWHPHQWV are those presented by an entity, in which the 6WDWHPHQWV{ entity could elect, subject to the requirements in this Standard, to account for its investments in controlled entities, joint ventures and associates either at cost, in accordance with the Standard of GRAP on Financial Instruments (GRAP 104) or using the equity method as described in the Standard of GRAP on Investments in Associates and Joint Ventures (GRAP 36). [Not applicable to SALGA as the organisation does not have JV’s] GRAP 35 Consolidated Financial Not applicable to SALGA, the organisation does not have subsidiaries or Statements entities that it controls. *5$3{ Investments in Not applicable to SALGA the organisation does not have subsidiaries or Associates and Joint entities that it controls. Ventures *5$3{ Joint Arrangements Joint control is the agreed sharing of control by way of a binding arrangement, which exists only when decisions about the relevant activities require the unanimous consent of the parties sharing control. [Not applicable to SALGA due to the non-existence of such assets] GRAP 38 Disclosure of Interests in Not applicable to SALGA, the organisation does not have subsidiaries or Other Entities entities that it controls. GRAP 104 Financial Instruments 6$/*$ DOUHDG\ FRPSOLHV ZLWK WKH LVVXHG VWDQGDUG RQ ƬQDQFLDO LQVWUXPHQWV *5$3 5HYLVHG 7KHQRQHƪHFWLYHVWDQGDUGH[FOXGHVIURPLWVVFRSHWKH Financial Guarantee Contracts which are not applicable to SALGA because the organisations does not frequently guarantee the debt of other entities or its employees.

170

ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2019

Accounting Policies (continued)

1.26 NEW STANDARDS AND INTERPRETATIONS CONTINUED

Document no Title Business case link {GRAP 110 Living and Non-living Living resources are those resources that undergo biological transformation. 5HVRXUFHV{ Non-living resources are those resources, other than living resources, that occur naturally and have not been extracted. Not applicable to SALGA - The organisation does not have any biological assets under its control. {,*5$3 Applying the probability SALGA is fully compliant with this interpretation because only revenue that Test on Initial Recognition passes the recognition criteria test is recognised. of Revenue IGRAP 20 Accounting for The interpretation is not applicable to SALGA because the organisation does Adjustment in Revenue not have revenue that is prescribed by any legislation and is further subjected to an appeal by persons that are supposed to pay such revenue. ANNUAL FINANCIAL STATEMENTS ANNUAL PART G

171

ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2019 Notes to Annual Financial Statements

2. INVESTMENT PROPERTY

Figures in Rand 2019 2018 Valuation Valuation Valuation Carrying value Investment property 7 800 000 7 800 000 6 610 000 6 610 000

Reconciliation of investment property - 2019 Fair value Opening adjustment Total balance gain / (loss) Investment property 6 610 000 {{ 7 800 000

Reconciliation of investment property - 2018 Fair value Opening adjustment Total balance gain / (loss) Investment property 8 290 000 (1 680 000) 6 610 000

Details of property

(a) Stand 3278, Johannesburg, Gauteng (b) Stand 750, Kimberley, Northern Cape (c) Portion 654 of the farm Albinia no. 957, FT KwaZulu-Natal

Details of valuation

7KHHƪHFWLYHGDWHRIWKHUHYDOXDWLRQVZDV0DUFK5HYDOXDWLRQVZHUHSHUIRUPHGE\DQLQGHSHQGHQWYDOXHU0U:LOOLDP John Hewitt NDPV, C.I.E.A., F.I.V. (SA), Appraiser of Mills Fitchet (TVL) CC. Mills Fitchet (TVL) CC are not connected to SALGA and have recent experience in location and category of the investment property being valued.

The valuation was based on open market value for existing use. For the purpose of determining the market value of the investment properties the capitalisation of the "Net Annual Income", generally considered to determine the market value of an LQFRPHSURGXFLQJSURSHUW\VXFKDVVKRSSLQJFHQWUHVRƯFHVDQGLQGXVWULDORUFRPPHUFLDOSURSHUWLHVZKHUHWKHEXLOGLQJKDV an earning potential.

$PRXQWVUHFRJQLVHGLQVXUSOXVDQGGHƬFLWIRUWKH\HDU

The only rental income received from letting a portion of the investment property relates to the Hillcrest property in KwaZulu- Natal, where a portion of the land is let to Mobile Telephone Networks (MTN) for a cellular phone mast erected on the land. Such OHDVLQJRIWKHSURSHUW\LVLQFLGHQWDODQGLQVLJQLƬFDQWUHODWLYHWRWKHSRWHQWLDORIWKHSURSHUW\7KHUH VQRUHQWDOLQFRPHHDUQHG on other investment property, rather they are held for capital appreciation.

There are no restrictions on the realisation of investment property or the remittance of revenue and proceeds of disposal. There are also no contractual obligations to purchase, construct or develop investment property or for repairs, maintenance or enhancements.

None of the investment property has been pledged as security for any loan.

172

ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2019 Notes to Annual Financial Statements

2. INVESTMENT PROPERTY CONTINUED

Figures in Rand 2019 2018 $PRXQWVUHFRJQLVHGLQVXUSOXVRUGHƬFLW Rental revenue from investment property { { Fair value (gain) or loss {{ {{ From investment property that generated rental revenue Direct operating expenses (including repairs and maintenance) { { From investment property that did not generate rental revenue Direct operating expenses (excluding repairs and maintenance) {{ {

The organisation initiated a process to dispose of investment property. Advertisements were placed on the Government Tender %XOOHWLQQDWLRQDOQHZVSDSHUVH7HQGHUSRUWDODQG6$/*$ VZHEVLWHRQ{-XO\{DQG{1RYHPEHU{

3. PROPERTY, PLANT AND EQUIPMENT

{ 2019 2018 Accumulated Accumulated depreciation depreciation Carrying Carrying Cost and Cost and value value accumulated accumulated { impairment impairment Land {{ - {{ {{ - {{ Buildings {{ { {{ 16 456 267 { {{ )XUQLWXUHDQGƬ[WXUHV {{ {{ {{ { {{ {{ Motor vehicles {{ { {{ { { {{ 2ƯFHHTXLSPHQW {{ {{ {{ { {{ {{ IT equipment {{ {{ {{ { {{ {{ /HDVHGRƯFHHTXLSPHQW {{ {{ {{ {{ {{ {{ Leasehold improvements {{ {{ {{ {{ {{ {{ Work in progress - - - { - { Total {{ {{ {{ { {{ { ANNUAL FINANCIAL STATEMENTS ANNUAL PART G

173

ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2019 Notes to Annual Financial Statements

3. PROPERTY, PLANT AND EQUIPMENT CONTINUED Total Total {{ {{ {{ {{ {{ {{ {{ {{ {{ {{ {{ {{ {{ - - - - - {{ 213 loss reversal Impairment Impairment --- { loss { { { { { {{ {{ Impairment ------(749) {{ { { { { {{ { { { { {{ { {{ { {{ { {{ {{ {{ { { { {{ {{ {{ {{ {{ { {{ { {{ Additions Disposals Depreciation - - - - - 3 785 367 {{ { { {{ 9 683 544 balance 27 832 011 Opening Opening ------Additions Disposals Depreciation Transfers {{ {{ { {{ {{ { {{ {{ {{ balance {{ {{ Opening Opening Land Reconciliation of property, plant and equipment - 2019 - equipment and plant property, of Reconciliation Buildings Motor vehicles Motor )XUQLWXUHDQGƬ[WXUHV {{ { 2ƯFHHTXLSPHQWIT equipment {{ {{ /HDVHGRƯFHHTXLSPHQW {{ {{ Land)XUQLWXUHDQGƬ[WXUHV - Leasehold improvements Leasehold progress in Work Work in progress in Work - Reconciliation of property, plant and equipment - 2018 - equipment and plant property, of Reconciliation BuildingsMotor vehicles 972 750 - { {{ {{ { {{ {{ { { { IT equipment/HDVHGRƯFHHTXLSPHQW {{ {{ 7 648 472 2ƯFHHTXLSPHQW improvements Leasehold

174

ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2019 Notes to Annual Financial Statements

3. PROPERTY, PLANT AND EQUIPMENT CONTINUED

&RPSHQVDWLRQUHFHLYHGIRUORVVHVRQSURSHUW\SODQWDQGHTXLSPHQWsLQFOXGHGLQRSHUDWLQJSURƬW

Figures in Rand 2019 2018 )XUQLWXUHDQGƬ[WXUHV { { Motor Vehicle - { IT equipment { { 2ƯFHHTXLSPHQW { - { {

Assets subject to lease (Net carrying amount)

Figures in Rand 2019 2018 /HDVHGRƯFHHTXLSPHQW {{ {{ Leasehold improvements {{ {{ {{ {{

Other information

Property, plant and equipment fully depreciated and still in use (Gross carrying amount)

Figures in Rand 2019 2018 )XUQLWXUHDQGƬ[WXUHV - { 2ƯFHHTXLSPHQW - { - {

Reconciliation of Work-in-progress (included within PPE)

Reconciliation of Work-in-progress 2019 Opening Transfers Total balance Capital expenditure / Additions {{ {{ -

Reconciliation of Work-in-progress 2018 ANNUAL FINANCIAL STATEMENTS ANNUAL Opening Included within Total balance PPE Capital expenditure / Additions - {{ {{ PART G

There are no assets pledged as security, contractual commitments for Property, Plant and Equipment.

The compensation for losses of assets Furniture and Fittings (cause for the losses), IT equipment (cause for the losses) and 2ƯFH(TXLSPHQW PDLQFDXVHIRUWKHORVVHV

175

ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2019 Notes to Annual Financial Statements

4. INTANGIBLE ASSETS

2019 2018 Accumulated Accumulated depreciation depreciation Carrying Carrying Cost and Cost and value value accumulated accumulated { impairment impairment Computer software { { { 771 127 { {

Reconciliation of intangible assets - 2019 Opening Amortisation Total balance Computer software { { {

Reconciliation of intangible assets - 2018 Opening Amortisation Total balance Computer software { { {

5. DEPOSITS

Figures in Rand 2019 2018 At amortised cost

Rental deposits held by lessors {{ {{ Terms and conditions The deposits are refundable by the lessors only on termination of the lease agreement {{ {{

Non-current assets Rental deposits held by lessors {{ {{ Current assets Rental deposits held by lessors and held at attorney's trust account { {

6. OPERATING LEASE ASSET / (LIABILITY) (ACCRUAL)

Figures in Rand 2019 2018 Current assets { { Non-current liabilities {{ {{ Current liabilities {{ {{ {{ {{

7KHRSHUDWLQJOHDVHDVVHWDURVHDVDUHVXOWRIVWUDLJKWOLQLQJWKHRSHUDWLQJOHDVHUHFHLSWVLQDFFRUGDQFHZLWK*5$3{

176

ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2019 Notes to Annual Financial Statements

6. OPERATING LEASE ASSET / (LIABILITY) (ACCRUAL) CONTINUED

SALGA leases a portion of its property in KwaZulu-Natal to a cellular phone operator for a cellular phone mast. The lease period on integration of SALGA KwaZulu-Natal into the SALGA fold was 96 months. The annual escalation is 8% and the remaining lease period is 12 months.

7KHRSHUDWLQJOHDVHOLDELOLW\DURVHGXHWRWKHVWUDLJKWOLQLQJRIRSHUDWLQJOHDVHSD\PHQWVLQDFFRUGDQFHZLWK*5$3{5HIHUWR note 33 for details on the non-cancellable operating lease rentals payable in future.

SALGA leases premises with a lease period ranging from 36 to 60 months. The average annual escalation is 9% and the average remaining lease term is 9 months.

$OOOHDVHVH[FHSWIRU*DXWHQJKDYHH[WHQVLRQRSWLRQVLQFOXGHGLQWKHFRQWUDFWV)RXURIWKHOHDVHFRQWUDFWV 1DWLRQDO2ƯFH .ZD=XOX1DWDO1RUWKHUQ&DSHDQG1RUWK:HVW KDYHH[WHQVLRQRSWLRQVWKDWDUHVXEMHFWWRQHJRWLDWLRQEHWZHHQ6$/*$DQG the Lessors at the end of the current contracts. SALGA normally enters into negotiations to extend lease contracts at least six months before the termination of the lease.

7KHQDWLRQDORƯFHOHDVHKDVDQRSWLRQWRSXUFKDVHWKHSXUFKDVHSULFHVKDOOEHEDVHGRQPDUNHWYDOXHDWWKHWLPHRIH[HUFLVLQJ the option.

7. EMPLOYEE BENEFIT OBLIGATIONS

7.1 DEFINED BENEFIT PLAN

7KHSODQLVDSRVWHPSOR\PHQWPHGLFDOEHQHƬWSODQ

Post-employment medical aid plan

When the then Western Cape Local Government Organisation (WECLOGO) was incorporated into SALGA, to form a unitary RUJDQLVDWLRQ :(&/2*2 KDG IRUPHU HPSOR\HHV IRU ZKRP LW FRQWULEXWHGWRZDUGVDPHGLFDODLGSRVWHPSOR\PHQWEHQHƬW One of the conditions of the unitary structure was that conditions of service of any employee in the employ of the provincial DVVRFLDWLRQVZLOOQRWEHDƪHFWHGXSRQDPDOJDPDWLRQLQOLQHZLWKVHFWLRQRIWKH/DERXU5HODWLRQV$FW7KH:(&/2*2 PHPEHUVZHUHLQFRUSRUDWHGLQWR6$/*$DVRI)HEUXDU\DQG6$/*$LQKHULWHGWKHSRVWHPSOR\PHQWPHGLFDOEHQHƬW scheme of the two remaining pensioners.

6$/*$FRQWUDFWHG,QGHSHQGHQW$FWXDULHV &RQVXOWDQWV 3W\ /WGDQLQGHSHQGHQWƬUPRIDFWXDULHVQRWFRQQHFWHGWR6$/*$ to assist with the determination of the post-employment medical obligation as at 31 March 2019. The report provided by the DFWXDULHVYDOXHGWKHREOLJDWLRQDW5QLO 5{ 7KHGHFUHDVHLQWKHSRVWHPSOR\PHQWPHGLFDOREOLJDWLRQLVGXHWRWKH termination of the post-retirement medical aid subsidy. ANNUAL FINANCIAL STATEMENTS ANNUAL

7KHDPRXQWVUHFRJQLVHGLQWKHVWDWHPHQWRIƬQDQFLDOSRVLWLRQDUHDVIROORZV

Carrying value PART G Figures in Rand 2019 2018 3UHVHQWYDOXHRIWKHGHƬQHGEHQHƬWREOLJDWLRQZKROO\XQIXQGHG - {

Non-current liabilities - { Current liabilities - { - {

177

ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2019 Notes to Annual Financial Statements

7.1. DEFINED BENEFIT PLAN) CONTINUED

&KDQJHVLQWKHSUHVHQWYDOXHRIWKHGHƬQHGEHQHƬWREOLJDWLRQDUHDVIROORZV Figures in Rand 2019 2018 Opening balance { { %HQHƬWVSDLG - { 1HWH[SHQVHVUHFRJQLVHGLQWKHVWDWHPHQWRIƬQDQFLDOSHUIRUPDQFH - { Curtailment of liability { - - {

1HWH[SHQVHUHFRJQLVHGLQWKHVWDWHPHQWRIƬQDQFLDOSHUIRUPDQFH Interest cost - { Re-measurement or actuarial gain or loss - { - {

Key assumptions used Assumptions used at the reporting date: Discount rates used -8.81% Medical cost trend rates -7.61% &RQVXPHU3ULFH,QƮDWLRQ -6.11% Real discount rate -1.12% Expected increase in healthcare costs - 6.11%

Discount rate assumption

There are no discount rate assumptions for the year under review due to the termination of the scheme on 1 April 2018.

7.2 DEFINED CONTRIBUTION PLAN

,WLVWKHSROLF\RI6$/*$WRSURYLGHUHWLUHPHQWEHQHƬWVWRDOOLWVHPSOR\HHV$GHƬQHGFRQWULEXWLRQSHQVLRQRUUHWLUHPHQWIXQG subject to the Pensions Fund Act exist for this purpose.

6$/*$LVXQGHUQRREOLJDWLRQWRFRYHUDQ\XQIXQGHGEHQHƬWV

Figures in Rand 2019 2018 7KHDPRXQWUHFRJQLVHGDVDQH[SHQVHIRUGHƬQHGFRQWULEXWLRQSODQLV { {{

,QFOXGHGLQGHƬQHGFRQWULEXWLRQSODQLQIRUPDWLRQDERYHLVWKHIROORZLQJSODQZKLFKLVDFFRXQWHGIRUDVDGHƬQHGFRQWULEXWLRQ plan: • Pension fund – R19 576 104 (2018: R20 788 953)

8. TRADE AND OTHER RECEIVABLES FROM EXCHANGE TRANSACTIONS

Figures in Rand 2019 2018 Trade receivables {{ {{ Prepayments {{ {{ Sundry receivables { {{ {{ {{ 178

ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2019 Notes to Annual Financial Statements

8. TRADE AND OTHER RECEIVABLES FROM EXCHANGE TRANSACTIONS CONTINUED

Credit quality of trade and other receivables

The credit quality of trade and other receivables that are past due and not impaired can be assessed by reference to historical GHIDXOWUDWHV7KHFUHGLWTXDOLWLHVUDWLQJRIHDFKRIWKHVHƬQDQFLDOLQVWUXPHQWVDUHDVIROORZV

Low credit grade (High risk) - The counter parties have evidenced high occurrences of defaults and / or re-negotiations of FRQWUDFWXDOWHUPVLQSULRUSHULRGV)XUWKHUPRUHDQDVVHVVPHQWRIWKHƬQDQFLDOSRVLWLRQDQGOLTXLGLW\SRVLWLRQRIWKHSDUWLHVKDV SURYLGHGHYLGHQFHRIƬQDQFLDOGLƯFXOWLHVWKDWPD\LPSHGHWKHUHFRYHUDELOLW\RIWKHRXWVWDQGLQJDPRXQWV$VVXFKWKHFRXQWHU parties included in the low credit grade category pose a high credit risk to the entity.

Medium credit grade (Medium risk) - The counter parties have evidenced instances of defaults and/or re-negotiations of FRQWUDFWXDOWHUPVLQSULRUSHULRGVRQWKHUHSD\PHQWRIRXWVWDQGLQJDPRXQWV$QDVVHVVPHQWRIWKHƬQDQFLDOSRVLWLRQDQG OLTXLGLW\ SRVLWLRQV RI WKH SDUWLHV KDV SURYLGHG HYLGHQFH RI ƬQDQFLDO GLƯFXOWLHV WKDW PD\ LPSHGH WKH UHFRYHUDELOLW\ RI WKH outstanding amounts. The counter parties included in this credit grade category are active in an industry that is highly sensitive WRPDUNHWƮXFWXDWLRQVDQGYRODWLOLW\LQWKHLQWHUQDWLRQDOHFRQRPLHV

High credit grade (Low risk) - The counter parties have evidenced no instances of defaults and/or re-negotiations of contractual terms in prior periods.

Figures in Rand 2019 2018 Trade receivables schedule Trade receivables schedule (gross carrying amount) {{ {{ Less: Allowance for impairment {{ {{ {{ {{

Trade and other receivables past due but not impaired (Exchange transactions):

$VRI0DUFKWUDGHDQGRWKHUUHFHLYDEOHVIURPH[FKDQJHWUDQVDFWLRQVRI5{{{ {5{{{ ZHUHSDVW due payment date and not impaired:

Figures in Rand 2019 2018 The ageing of amounts past due payment date but not impaired is as follows: Not more than 30 days -- More than 30 days but not more than 60 days {{ {{

More than 60 days but not more than 90 days - - FINANCIAL STATEMENTS ANNUAL More than 90 days but not more than 120 days - - More than 120 days {{ {{ {{ {{ PART G

The carrying amount of trade and other receivables that are past due and have re-negotiated settlement terms amount to R14 798 897 (2018: R2 388 828)

Trade and other receivables past due but not impaired (exchange transactions):

As of 31 March 2019, trade and other receivables of R124 562 642 (2018: R73 543 010) were impaired and provided for.

179

ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2019 Notes to Annual Financial Statements

8. TRADE AND OTHER RECEIVABLES FROM EXCHANGE TRANSACTIONS CONTINUED

Figures in Rand 2019 2018 The ageing of impaired amounts is as follows: Not more than 30 days - { More than 30 days but not more than 60 days { { More than 60 days but not more than 90 days - - More than 90 days but not more than 120 days - - More than 120 days {{ {{ {{ {{

Reconciliation of allowance account for doubtful debt Opening balance {{ {{ Increase in allowance for impairment {{ {{ $PRXQWVZULWWHQRƪDVXQFROOHFWDEOH - {{ Unused amounts reversed {{ {{ {{ {{

7KHFUHDWLRQDQGUHOHDVHRIDOORZDQFHIRULPSDLUHGUHFHLYDEOHVKDYHEHHQLQFOXGHGLQRSHUDWLQJH[SHQVHVLQVXUSOXVRUGHƬFLW (note 24 ).

The maximum exposure to credit risk at the reporting date is the fair value of each class of loan mentioned above. SALGA does not hold any collateral as security.

SALGA is exposed to credit risk as a result of transactions entered into with customers on extended payment terms, and cash and cash equivalents held with commercial banks that may not be able to produce cash on demand.

SALGA manages these risks by independent checks and only using commercial banks approved by National Treasury. No changes occurred in the management of these risks from the prior year

9. RECEIVABLES FROM NON-EXCHANGE TRANSACTIONS

Figures in Rand 2019 2018 Receivables from non-exchange transactions {{ {{ Sundry receivables from non-exchange transactions - {{ 23 788 070 {{

Credit quality of receivables from non-exchange transactions

The credit quality of other receivables from non-exchange transactions that are neither past nor due nor impaired can be assessed by reference to external credit ratings (if available) or to historical information about counterparty default rates:

Low credit grade (High risk) - The counter party has evidenced high occurrences of defaults and/or re-negotiations of FRQWUDFWXDOWHUPVLQSULRUSHULRGV)XUWKHUPRUHDQDVVHVVPHQWRIWKHƬQDQFLDOSRVLWLRQDQGOLTXLGLW\SRVLWLRQRIWKHSDUW\KDV SURYLGHGHYLGHQFHRIƬQDQFLDOGLƯFXOWLHVWKDWPD\LPSHGHWKHUHFRYHUDELOLW\RIWKHRXWVWDQGLQJDPRXQWV$VVXFKWKHFRXQWHU parties included in the low credit grade category pose a high credit risk to the entity.

180

ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2019 Notes to Annual Financial Statements

9. RECEIVABLES FROM NON-EXCHANGE TRANSACTIONS CONTINUED

Medium credit grade (Medium risk) - The counter party has evidenced instances of defaults and / or re-negotiations of FRQWUDFWXDOWHUPVLQSULRUSHULRGVRQWKHUHSD\PHQWRIRXWVWDQGLQJDPRXQWV$QDVVHVVPHQWRIWKHƬQDQFLDOSRVLWLRQDQG OLTXLGLW\SRVLWLRQVRIWKHSDUW\KDVSURYLGHGHYLGHQFHRIƬQDQFLDO GLƯFXOWLHV WKDW PD\ LPSHGH WKH UHFRYHUDELOLW\ RI WKH outstanding amounts. The counter parties included in this credit grade category are active in an industry that is highly sensitive WRPDUNHWƮXFWXDWLRQVDQGYRODWLOLW\LQWKHLQWHUQDWLRQDOHFRQRPLHV

High credit grade (Low risk) - The counter party has evidenced no instances of defaults and / or re-negotiations of contractual terms in prior periods.

Receivables from non-exchange transactions past due but not impaired:

$VRI0DUFKUHFHLYDEOHVIURPQRQH[FKDQJHWUDQVDFWLRQVRI5{{ 5{{ ZHUHSDVWGXHDQGQRW impaired:

Figures in Rand 2019 2018 The ageing of amounts past due but not impaired is as follows: Not more than 30 days {{ {{ More than 30 days but not more than 60 days - { More than 60 days but not more than 90 days - {{ More than 90 days but not more than 120 days { { More than 120 days {{ {{ {{ {{

Receivables from non-exchange impaired:

$VRI0DUFKUHFHLYDEOHVIURPQRQH[FKDQJHWUDQVDFWLRQVRI5{{ 5{ ZHUHLPSDLUHGDQGSURYLGHG for.

Figures in Rand 2019 2018 The ageing of impaired amounts is as follows: Not more than 30 days { { More than 30 days but not more than 60 days - { More than 60 days but not more than 90 days - {

More than 90 days but not more than 120 days { { FINANCIAL STATEMENTS ANNUAL More than 120 days {{ { {{ { PART G Reconciliation of provision for impairment of receivables from non-exchange transactions: Opening balance { { Provision for impairment {{ { Unused amounts reversed { { {{ {

181

ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2019 Notes to Annual Financial Statements

10. CASH AND CASH EQUIVALENTS

The carrying value of cash and cash equivalents is measured at amortised cost. None of the instruments included in the cash DQGFDVKHTXLYDOHQWVZHUHSOHGJHGDVVHFXULW\IRUDQ\ƬQDQFLDOREOLJDWLRQ

Cash and cash equivalents consist of:

Figures in Rand 2019 2018 Cash on hand { 19 589 Bank balances {{ 89 038 952 {{ 89 058 541

11. DISPOSAL OF A SIGNIFICANT ASSET

The organisation has initiated a process to dispose of investment property. Advertisements were placed on the Government 7HQGHU%XOOHWLQQDWLRQDOQHZVSDSHUVH7HQGHUSRUWDODQG6$/*$oVZHEVLWHRQ-XO\DQG1RYHPEHU

Description of the asset(s)

The investment property is held for capital appreciation. i) Stand 3278, Johannesburg, Gauteng. ii) Stand 750, Kimberly, Northern Cape. iii) Portion 654 of the farm Albania no. 957, FT KwaZulu-Natal.

Carrying values

Figures in Rand 2019 2018 Carrying values of the assets {{ {

Facts and circumstances of the disposal

The NEC which is the Accounting Authority approved the disposal of the investment property on 5 August 2013 with a proviso WKDWSURFHHGVIURPWKHGLVSRVDOEHULQJIHQFHGIRUWKHDFTXLVLWLRQRIDGPLQLVWUDWLYHEXLOGLQJVIRUWKHUHVSHFWLYHRƯFHV

Approval of the Executive Authority was sought and obtained in 2015 in terms of the PFMA and the organisation’s Materiality DQG6LJQLƬFDQFH)UDPHZRUN

Further approvals required

There are no further approvals required.

The expected sale or transfer date is 31 March 2020.

182

ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2019 Notes to Annual Financial Statements

12. REVALUATION SURPLUS RESERVE

The revaluation surplus is non-distributable.

Figures in Rand 2019 2018 Opening balance { 2 259 566

Upon transfer of the owner-occupied property to investment property the revaluation surplus is treated in the following manner: • any remaining part of the increase is credited directly to net assets in revaluation surplus. On subsequent disposal of the LQYHVWPHQWSURSHUW\WKHUHYDOXDWLRQVXUSOXVLQFOXGHGLQQHWDVVHWVPD\EHWUDQVIHUUHGWRDFFXPXODWHGVXUSOXVHVRUGHƬFLWV 7KHWUDQVIHUIURPUHYDOXDWLRQVXUSOXVWRDFFXPXODWHGVXUSOXVHVRUGHƬFLWVLVQRWPDGHWKURXJKVXUSOXVRUGHƬFLW

13. FINANCE LEASE OBLIGATION

Figures in Rand 2019 2018 Minimum lease payments due - within one year {{ { LQVHFRQGWRƬIWK\HDULQFOXVLYH {{ {{ {{ {{ OHVVIXWXUHƬQDQFHFKDUJHV { { Present value of minimum lease payments {{ {{

Present value of minimum lease payments due - within one year {{ { LQVHFRQGWRƬIWK\HDULQFOXVLYH {{ {{ {{ {{

Non-current liabilities {{ {{ Current liabilities {{ { ANNUAL FINANCIAL STATEMENTS ANNUAL {{ {{

,WLV6$/*$ VVWDQGDUGRSHUDWLQJSUDFWLFHWROHDVHFHUWDLQRƯFHHTXLSPHQWXQGHUƬQDQFHOHDVHV2EOLJDWLRQVXQGHUƬQDQFH leases are secured by the lessor's title to the leased assets. PART G

SALGA ordinarily concludes these leasing arrangements for a period that ranges up to 36 months. The average lease period for OHDVHGRƯFHHTXLSPHQWLVPRQWKV7KHDYHUDJHUHPDLQLQJOHDVHWHUPLV{PRQWKVDQGWKHDYHUDJHHƪHFWLYHLQWHUHVWUDWH implicit in the lease was 10.22% (2018: 10%).

,QWHUHVWUDWHVDUHƬ[HGDWWKHFRQWUDFWGDWH$OOOHDVHVKDYHƬ[HGUHSD\PHQWVDQGQRDUUDQJHPHQWVKDYHEHHQHQWHUHGLQWRIRU contingent rent. There are purchase options entered into on these leased assets. SALGA does not renew the leases upon expiry as the useful life approximates the lease term.

183

ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2019 Notes to Annual Financial Statements

13. FINANCIAL LEASE OBLIGATION CONTINUED

6$/*$ VREOLJDWLRQVXQGHUƬQDQFHOHDVHVDUHVHFXUHGE\WKHOHVVRU VFODLPRYHUWKHOHDVHGDVVHWVLQDQLQVWDQWZKHUH6$/*$ defaults on the contractual lease payments. Refer note 3.

/HDVHGRƯFHHTXLSPHQWZLWKDFDUU\LQJDPRXQWRI5{ 5{{{ DUHVXEMHFWWRWKH/HVVRUVUHVWULFWLRQVLQ terms of movement (relocation).

14. UNSPENT CONDITIONAL GRANTS AND RECEIPTS

$VVHWVUHFRJQLVHGDQGLQFOXGHGLQFDVKDQGFDVKHTXLYDOHQWVDPRXQWLQJWR5{{{{ 5{{{ DUHULQJIHQFHG and can solely be used in terms of the conditions of the grants.

Unspent conditional grants and receipts comprises of:

Figures in Rand 2019 2018 Unspent conditional grants and receipts Deutsche Gesellschaft fur Internationale Zusammernarbeit (GIZ) - LED Network { { Local Government SETA – Leadership Development Workshops (LDW) {{ {{ Local Government SETA - Capacity Building (CB) { { European Union (SGCLG) {{ { Local Government SETA (LGCAC) {{ {{ Local Government SETA (MaSE) {{ - Federation of Canadian Municipalities (BIGM) { { Department of Public Service and Administration (Tirelo Bosha) - { European Union - Enhancing Municipal Capacity (EMC) { { Local Government SETA (LiGO) { { Commonwealth Local Government Forum (LED) { - Local Government SETA (LLLC) { - Department of Science and Technology (MIMI) { - VVSG (Enhancing Capacity in Local Government Waste Management) { - {{ {{

Movement during the year Balance at the beginning of the year {{ {{ Additions during the year {{ {{ Revenue recognition during the year {{ {{ {{ {{

7KHQDWXUHDQGH[WHQWRIFRQGLWLRQDOJRYHUQPHQWJUDQWVUHFRJQLVHGLQWKHDQQXDOƬQDQFLDOVWDWHPHQWVDQGDQLQGLFDWLRQRI RWKHUIRUPVRIDVVLVWDQFHIURPZKLFK6$/*$KDVGLUHFWO\EHQHƬWHGDUHGLVFORVHGLQQRWHDQGDQ\XQIXOƬOOHGFRQGLWLRQVDQG DWWDFKLQJWRJRYHUQPHQWDQGRWKHUDVVLVWDQFHKDVQRWEHHQUHFRJQLVHGLQVXUSOXVRUGHƬFLWDQGUHPDLQUHƮHFWHGDVDOLDELOLW\ (Unspent conditional grants and receipts).

See note 20 for reconciliation of grants from National/Provincial Government and other Institutions.

184

ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2019 Notes to Annual Financial Statements

15. PROVISIONS

Reconciliation of provisions – 2019

Opening Reversed Additions Total Balance during the year FTC employee long term incentive {{ {{ { {{ Legal settlements (CCMA) { --{ {{ {{ { {{

Reconciliation of provisions – 2018

Opening Reversed Additions Total Balance during the year FTC employee long term incentive {{ {{ {{ {{ Legal settlements (CCMA) - { - { {{ {{ {{ {{

Figures in Rand 2019 2018 Non-current liabilities { { Current liabilities {{ {{ {{ {{

The Fixed Term Contract (FTC) employee long-term retention incentive represents management's best estimate of SALGA's OLDELOLW\XQGHU\HDUƬYHRIWKHUHWHQWLRQLQFHQWLYHVFKHPH7KH)7&UHWHQWLRQLQFHQWLYHVFKHPHRQO\YHVWVWR)7&HPSOR\HHV provided the employee’s performance is acceptable in terms of SALGA's merit-based rating matrix. Furthermore, should the employee remain in the employ of SALGA for a period exceeding three years whereupon the incentive shall vest to the employee.

There is no change on the basis used to calculate the entity’s obligation on the retention scheme.

The provision for legal settlements is for a CCMA award to an employee for constructive dismissal the organisation is appealing the ruling at the Labour Court.

16. TRADE AND OTHER PAYABLES FROM EXCHANGE TRANSACTIONS FINANCIAL STATEMENTS ANNUAL

Figures in Rand 2019 2018

Trade payables {{ {{ PART G Membership levies received in advanced {{ {{ Sundry payables { { Accrued leave pay {{ {{ Accrued thirteenth cheque {{ {{ Accrued expenses {{ {{ Accrued performance rewards {{ {{ Other payables (lodge cards) {{ {{ {{ {{

185

ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2019 Notes to Annual Financial Statements

17. FINANCIAL INSTRUMENTS DISCLOSURE

&DWHJRULHVRIƬQDQFLDOLQVWUXPHQWV

2019 At amortised Financial assets Total cost Operating lease receivables – exchange transactions { { Trade and other receivables from exchange transactions { { Other receivables from non-exchange transactions {{ {{ Cash and cash equivalents {{ {{ { {{ {{

Financial liabilities Trade and other payables from exchange transactions {{ {{ Sundry payables { { Other payables (lodge cards) {{ {{ { {{ {{

2018 At amortised Total Financial assets cost Operating lease receivables – exchange transactions { { Trade and other receivables from exchange transactions {{ {{ Other receivables from non-exchange transactions {{ {{ Cash and cash equivalents {{ {{ { {{ {{

At amortised Financial liabilities Total cost Trade and other payables from exchange transactions {{ {{ Sundry payables { { Other payables (lodge cards) {{ {{ { {{ {{

186

ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2019 Notes to Annual Financial Statements

18. REVENUE

7RWDOUHYHQXHGLVFORVHGLQWKHVWDWHPHQWRIƬQDQFLDOSHUIRUPDQFHLVPDGHXSDVIROORZV

Figures in Rand 2019 2018 Revenue from exchange transactions {{ {{ Revenue from non-exchange transactions {{ {{ Other revenue (refer note 21) {{ {{ Investment revenue (refer note 26) {{ {{ Total revenue {{ {{

The amounts included in revenue arising from exchanges of goods or services are as follows:

Figures in Rand 2019 2018 Rendering of services - Membership levies {{ {{ Other revenue (refer note 21) {{ {{ { {{ {{

The amount included in revenue arising from non-exchange transactions is as follows:

Figures in Rand 2019 2018 Grant recognised – LGSETA (CAC) { { Grant derecognised – LGSETA (MaSE) - {{ Grant recognised – LGSETA (ICIP) - { Grant recognised – LGSETA (PBCDP) - - Transfers – Government grant and subsidies {{ {{ Grant recognised – FoCM (BIGM) {{ {{ Sponsorship and donations {{ {{ Grant recognised – Commonwealth Local Government Forum - - Grant recognised – GIZ Governance Support Programme - { Grant recognised – DPSA (Tirelo Bosha) { - Grant recognised – European Union (SCLG) {{ {{ ANNUAL FINANCIAL STATEMENTS ANNUAL Grant recognised – LGSETA (LiGO) { {{ Grant recognised – LGSETA (LLC) { - Grant recognised – EU (Enhancing Municipal Capacity for Development) {{ -

Grant recognised – VVSG (Enhancing Capacity in LG Waste Management) { - PART G { {{ {{

187

ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2019 Notes to Annual Financial Statements

19. DIRECT EXPENDITURE – PROGRAMME COST

Figures in Rand 2019 2018 Municipal advisory and support service cost Annual remuneration {{ {{ Performance rewards {{ {{ Employer contribution to medical aid {{ {{ UIF { { SDL {{ {{ Other payroll levies {{ {{ Leave pay accrual charge { {{ Cell phone allowance {{ {{ Employer contribution to group risk {{ {{ 'HƬQHGFRQWULEXWLRQSODQsHPSOR\HUFRQWULEXWLRQWRUHWLUHPHQWIXQGV {{ {{ /RQJWHUPEHQHƬWVsUHWHQWLRQLQFHQWLYHVFKHPH {{ {{ {{ {{

IGR Participation and mandating cost (councillors) Sitting allowance {{ {{ Travel allowance { {{ {{ {{

OLG Mandate implementation cost Member support – professional and advisory services {{ {{ Travel expenditure {{ {{ Venue hire and accommodation {{ {{ Capacity building expenditure {{ {{ Logistical support expenses {{ {{ {{ {{ {{ {{

188

ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2019 Notes to Annual Financial Statements

20. GOVERNMENT GRANTS AND SUBSIDIES

Figures in Rand 2019 2018 Transfers and subsidies - Executive Authority {{ {{

Conditional grant -LGSETA – Integrated Councillor Induction Programme (ICIP) Grant

Figures in Rand 2019 2018 Balance unspent at beginning of year (20 498) {{ Current-year receipts - {{ Conditions met - transferred to revenue (refer note 18) - {{ Included in trade and other receivables (sundry receivables) (refer note 10) { - Balance unspent at end of year - {

Conditions still to be met – remaining liability (refer note 14)

A conditional grant was obtained from the LGSETA to assist in SALGA's programme to induct the new Councillors, after the 3 August 2016 local government elections, into the local government sphere.

Conditional grant - Deutsche Gesellschaft fur Internationale Zusammernarbeit (GIZ) - LED Network Grant)

Figures in Rand 2019 2018 Balance unspent at end of year 105 260 {

Conditions still to be met – remaining liability (refer note 14)

The grant is funded by Deutsche Gesellschaft fur Internationale Zusammernarbeit (GIZ) to build capacity within SALGA for a Local Economic Development (LED) specialist.

Conditional grant -Local Government SETA Leadership Development Workshops (LDW)

Figures in Rand 2019 2018 Balance unspent at end of year 1 151 838 1 151 838

Conditions still to be met – remaining liability (refer note 14) FINANCIAL STATEMENTS ANNUAL

The grant is from the Local Government Sector Education and Training Authority (LG SETA). Its intention is to provide support to SALGA's capacity building programmes targeted to SALGA members i.e. municipalities and its primary aim is to fund the Leadership Development Workshop (LDW). PART G

Conditional grant -Local Government SETA (Capacity Building)

Figures in Rand 2019 2018 Balance unspent at beginning of year { {

Conditions still to be met – remaining liability (refer note 14)

189

ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2019 Notes to Annual Financial Statements

20. GOVERNMENT GRANTS AND SUBSIDIES CONTINUED

The grant is for the activation of capacity building through a Human Resources Development Indaba that will inform SALGA's programme on Human Resource Development for the sector. The grant received from the LG SETA will also fund the following projects: (i) FDSDFLW\EXLOGLQJ (ii) FRQGXFWLQJDIHDVLELOLW\VWXG\IRUWKHIDFLOLWDWLRQRI/RFDO*RYHUQPHQW/HDGHUVKLS$FDGHP\6FRSLQJDQG (iii) 'HYHORSPHQWRIUHTXLUHPHQWVVSHFLƬFDWLRQIRUWKH+50 ',QIRUPDWLRQ6\VWHPV

Conditional grant -Conditional grant - Commonwealth Local Government Forum (LED)

Figures in Rand 2019 2018 Balance unspent at beginning of year - - Current-year receipts { Conditions met - transferred to revenue (refer note 18) - - Balance unspent at end of year { -

Conditions still to be met – remaining liability (refer note 14)

The grant from the Commonwealth Local Government Forum (CLGF) is to fund SALGA's partnership with CLGF to support local government in promoting local economic development. The objectives of the intervention are to address the following key actions to enable local government to play its full role in LED. • Provide clear national framework for LED • Create an enabling environment • Local strategies to promote LED partnerships with the private sector.

Conditional grant - LGSETA Portfolio Based Councillor Development Programme (PBCDP)

Figures in Rand 2019 2018 Balance unspent at beginning of year {{ (1 634 411) Current-year receipts - 1 000 000 Conditions met - transferred to revenue (refer note 18) - (450 971) Included in trade and other receivables (sundry receivables) (refer note 10) {{ - Balance unspent at end of year - (1 085 382)

Conditions still to be met – remaining liability (see note 14)

7KHJUDQWLVIURPWKH/*6(7$DQGLWLVLQWHQGHGWRSURYLGHƬQDQFLDOVXSSRUWWR6$/*$WRHQDEOHWKHUROORXWRID3RUWIROLREDVHG &RXQFLOORU'HYHORSPHQW3URJUDPPH 3%&'3 SURJUDPPH7KHSURJUDPPHLVWDUJHWHGDWUHDFKLQJDWOHDVW{FRXQFLOORUVWR be provided with portfolio-based training based on their respective roles in municipalities.

Conditional grant - European Union (EU) – Strengthening Governance and Capacity in Local Government (SCLG)

Figures in Rand 2019 2018 Balance unspent at beginning of year { {{ Current-year receipts {{ - Conditions met - transferred to revenue (refer note 18) {{ {{ {{ {

190

ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2019 Notes to Annual Financial Statements

20. GOVERNMENT GRANTS AND SUBSIDIES CONTINUED

Conditions still to be met – remaining liability (refer note 14)

The grant is from the European Union (EU) – SCLG to fund SALGA to strengthen governance and capacity building in municipalities

Conditional grant – Local Government SETA (CAC)

Figures in Rand 2019 2018 Balance unspent at beginning of year {{ {{ Current-year receipts {{ - Conditions met - transferred to revenue (refer note 18) { { {{ {{

Conditions still to be met – remaining liability (refer note 14)

The grant is from LGSETA-CAC and it is intended to establish Local Government competency assessment centre and general administration.

Conditional grant – Local Government SETA (MaSE)

Figures in Rand 2019 2018 Balance unspent at beginning of year { { Current-year receipts {{ { Conditions met - transferred to revenue (refer note 18) - {{ Included in trade and other receivables (sundry receivables) (refer note 10) - - Balance unspent at end of year {{ {

Conditions still to be met – remaining liability (refer note 14)

The grant is from LGSETA-(MaSE) and it is intended to implement National Skills Development Strategy III by improving HƪHFWLYHQHVVDQGHƯFLHQF\RIVNLOOVGHYHORSPHQWV\VWHP7KLVSURJUDPZLOODVVLVWLQSURPRWLQJDQGVXSSRUWLQJWKHLQWHJUDWLRQ of theoretical learning with work place training

Conditional grant – Federation of Canadian Municipalities (BIGM)

Figures in Rand 2019 2018 FINANCIAL STATEMENTS ANNUAL Balance unspent at beginning of year { {{ Current-year receipts {{ {{

Conditions met - transferred to revenue (refer note 18) {{ {{ PART G Balance unspent at end of year { {

Conditions still to be met – remaining liability (refer note 14)

7KLVJUDQWLVIURP)HGHUDWLRQRI&DQDGLDQ0XQLFLSDOLWLHV,WVPDLQSXUSRVHLVWRVXSSRUWPXQLFLSDOLWLHVWRLPSURYHWKHLUFDSDFLW\ GHYHORSDQGLPSOHPHQWSODQVIRUJUHHQLQIUDVWUXFWXUHWUDGHDQGHFRQRPLFGHYHORSPHQWDQGHQKDQFH6$/*$oVFDSDFLW\WR provide institutional support to its members.

191

ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2019 Notes to Annual Financial Statements

20. GOVERNMENT GRANTS AND SUBSIDIES CONTINUED

Conditional grant – Department of Public Service and Administration (Tirelo Bosha)

Figures in Rand 2019 2018 Balance unspent at beginning of year { { Current-year receipts { { Conditions met - transferred to revenue (refer note 18) { - - {

Conditions still to be met – remaining liability (refer note 14)

This grant is from Department of Public Service and Administration and it is intended fund SALGA to support its member municipalities to improve their capacity and to develop and implement plans for the green infrastructure, trade and economic development and enhance SALGA’s capacity to provide institutional support to its member municipalities.

Conditional grant – European Union (Enhance Municipal Capacity for Development)

Figures in Rand 2019 2018 Balance unspent at beginning of year {{ - Current-year receipts - {{ Conditions met - transferred to revenue (refer note 18) {{ - { {{

Conditions still to be met – remaining liability (refer note 14).

This conditional grant is funded by European Union. The main purpose is to enhance municipalities' capacity for economic development.

Conditional grant – Local Government SETA (LiGO)

Figures in Rand 2019 2018 Balance unspent at beginning of year { - Current-year receipts { {{ Conditions met - transferred to revenue (refer note 18) { {{ { {

Conditions still to be met – remaining liability (refer note 14)

This grant is funded by LGSETA. It is aimed at providing skills programmes in Leadership governance and oversight such as SROLF\OHDGHUVKLSVWUDWHJ\DQGSODQQLQJOHDGLQJORFDOHFRQRPLHVDQGƬQDQFLDOOHDGHUVKLS

192

ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2019 Notes to Annual Financial Statements

20. GOVERNMENT GRANTS AND SUBSIDIES CONTINUED

Conditional grant – VVSG (Enhancing Capacity in Local Government Waste Management)

Figures in Rand 2019 2018 Balance unspent at beginning of year - - Current-year receipts { - Conditions met - transferred to revenue (refer note 18) { - { -

Conditions still to be met – remaining liability (refer note 14)

The grant is funded by the Association of Flemish Cities and Municipalities (VVSG). The objectives of the grant are to (1) To enhance the capacity of local governments in SA to contribute to the implementation of the integrated waste management SROLFLHVUHVSHFWLQJWKHSULQFLSOHVRIJRRGORFDOJRYHUQDQFH &RQWULEXWHWRJRRGLQFOXVLYHORFDOJRYHUQDQFHWKURXJKWKH enhance digital capacity for smart governance and improved service delivery of SALGA and its member municipalities.

Conditional grant – Local Government SETA (LLLC)

Figures in Rand 2019 2018 Balance unspent at beginning of year - - Current-year receipts { - Conditions met - transferred to revenue (refer note 18) { - { -

Conditions still to be met – remaining liability (refer note 14).

7KH JUDQW LV IXQGHG E\ WKH /*6(7$ ,W LV LQWHQGHG IRU WKH LPSOHPHQWDWLRQRIWKH16'6,,,E\LPSURYLQJWKHHƪHFWLYHQHVV DQGHƯFLHQF\RIWKHVNLOOVGHYHORSPHQWV\VWHPV$OVRWRSURPRWHDQGVXSSRUWWKHLQWHJUDWLRQRIWKHRUHWLFDOOHDUQLQJZLWK workplace training.

Conditional grant – Department of Science and Technology (MIMI)

Figures in Rand 2019 2018 Balance unspent at beginning of year - - Current-year receipts { - ANNUAL FINANCIAL STATEMENTS ANNUAL Conditions met - transferred to revenue (refer note 18) - - { -

Conditions still to be met – remaining liability (refer note 14). PART G

The grant is funded by Department of Science and technology to develop Municipal Innovation Maturity Index (MIMI).

193

ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2019 Notes to Annual Financial Statements

21. OTHER REVENUE

Figures in Rand 2019 2018 Delegate fees - national and provincial members assembly {{ {{ Sundry revenue {{ {{ Commission revenue { { Rent revenue { { Management fee – LGSETA Projects - { /RVV RUJDLQRQIRUHLJQH[FKDQJHGLƪHUHQFHV { { { {{ {{

22. ADMINISTRATIVE EXPENDITURE

Figures in Rand 2019 2018 Impairment loss { { Lease rentals {{ {{ Allowance for doubtful debt {{ {{ Repairs and maintenance {{ {{ (Gain) or Loss on disposal of assets { { Investment property fair value adjustments {{ {{ Other overheads {{ {{ {{ {{

194

ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2019 Notes to Annual Financial Statements

23. OTHER OPERATIONAL EXPENDITURE

Figures in Rand 2019 2018 Advertising {{ {{ Auditors remuneration {{ {{ Bank charges { { Cleaning {{ { IT consumables { { Professional and advisory services {{ {{ Donations - { Gifts 41 976 { Insurance { { Community development initiatives { { IT support and licence fees {{ {{ Marketing {{ {{ Magazines, books and periodicals { { Motor vehicle expenses { { Postage and courier {{ { Printing and stationery {{ {{ 0XQLFLSDOSURƬOLQJ {{ {{ Security costs {{ {{ 6WDƪZHOIDUH {{ { Subscriptions and membership fees { { Telephone and fax {{ {{ Training {{ {{ Assets expensed { { Municipal charges - utilities {{ {{ Municipal charges - other levies {{ {{ Uniforms { { Legal settlements (CCMA) - {

2WKHURƯFHDFFRPPRGDWLRQFRVWV { { FINANCIAL STATEMENTS ANNUAL Recruitment costs { { Corporate Governance costs {{ { General expenses -400 PART G { {{ {{

195

ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2019 Notes to Annual Financial Statements

24. OPERATING SURPLUS OR (DEFICIT)

2SHUDWLQJVXUSOXVRU GHƬFLW IRUWKH\HDULVVWDWHGDIWHUDFFRXQWLQJIRUWKHIROORZLQJDPRQJVWRWKHUV

Figures in Rand 2019 2018 Operating lease charges Premises • Straight-lined amounts {{ {{ Equipment • Lease expenses { { {{ {{

Loss on sale of property, plant and equipment { { Legal fees {{ {{ Repairs and maintenance {{ {{ Impairment on property, plant and equipment { { Amortisation of intangible assets { { Depreciation of property, plant and equipment {{ {{ Municipal advisory and support service cost {{ {{ Employee costs {{ 83 072 187 $PRXQWH[SHQVHGLQUHVSHFWRIUHWLUHPHQWEHQHƬWSODQV {{ {{ 'HƬQHGFRQWULEXWLRQIXQGV {{ {{ 'HƬQHGEHQHƬWIXQGV - { Litigation settlement (CCMA) - {

25. EMPLOYEE RELATED COSTS

The disclosed personnel cost is inclusive of direct expenditure for municipal advisory and support service cost which are necessary for the organisation to provide member support.

The distribution of personnel costs between core services i.e. implementation of SALGA’s mandate and administration support is as follows:

Figures in Rand 2019 2018 Municipal advisory and support service cost (refer note 19) {{ {{ Administration support {{ {{ {{ {{

Core services accounts for 70% (2018: 75%) of total employee related costs.

196

ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2019 Notes to Annual Financial Statements

25. EMPLOYEE RELATED COST CONTINUED

Personnel cost

Figures in Rand 2019 2018 Annual remuneration {{ {{ Performance rewards {{ {{ Employer contribution medical aid {{ {{ UIF { { WCA { { SDL { { Other payroll levies {{ { Leave pay accrual charge { {{ Cell phone allowance {{ {{ Employer contribution group risk {{ {{ Other short-term costs { { 'HƬQHGFRQWULEXWLRQSODQs(PSOR\HUFRQWULEXWLRQSHQVLRQIXQG {{ {{ /RQJWHUPEHQHƬWVsUHWHQWLRQLQFHQWLYHVFKHPH {{ {{ {{ {{

Remuneration of senior management

Figures in Rand 2019 2018 Annual remuneration {{ {{ Employer contribution to retirement fund {{ {{ Performance rewards {{ {{ 6XEVLVWHQFHFHOOSKRQHDQGWUDYHODOORZDQFHV { { Employer contribution to group risk { { Employer contribution to medical aid { { {{ {{

Also refer to note 34 - Related parties for further details on remuneration of senior management.

26. INVESTMENT REVENUE ANNUAL FINANCIAL STATEMENTS ANNUAL

Figures in Rand 2019 2018 Interest revenue

Bank {{ {{ PART G Trade and other receivables at amortised cost – interest revenue {{ {{ {{ {{

7RWDOLQWHUHVWUHYHQXHFDOFXODWHGXVLQJWKHHƪHFWLYHLQWHUHVWUDWHRQƬQDQFLDOLQVWUXPHQWVQRWDWIDLUYDOXHWKURXJKVXUSOXVRU GHƬFLWDPRXQWHGWR5{{ 5{{

197

ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2019 Notes to Annual Financial Statements

27. FAIR VALUE ADJUSTMENTS

Figures in Rand 2019 2018 Investment property (Fair value model) (see note 2) {{ {

28. IMPAIRMENT OF ASSETS

Figures in Rand 2019 2018 Impairments Property, plant and equipment { { An impairment loss has been recognised on items of property, plant and equipment due WRWKHVDLGDVVHWVKDYLQJQRIXWXUHVHUYLFHSRWHQWLDO)XUQLWXUHDQGƬ[WXUHVWKDWLVEURNHQ DQGWKXVKDYLQJQRVHUYLFHSRWHQWLDO5{{ 5{{ :KLOVWLPSDLUPHQW losses were recognised for IT equipment no longer required for delivery of services to PHPEHUVRYHUWKHORQJHUSODQQLQJSHULRGGXHWRWHFKQRORJLFDOREVROHVFHQFH5{{ 5{{ 2ƯFHHTXLSPHQWDPRXQWLQJWR5{{ { ZHUHLPSDLUHG due to the equipment having no service potential over the longer planning period. All these assets are not required for the delivery of services to members, either currently, or over the longer planning period and some have evidenced physical damage to the asset. { { Reversal of impairments Property, plant and equipment { - ,PSDLUPHQWSUHYLRXVO\UHFRJQLVHGRQ)XUQLWXUHDQGƬ[WXUHVDQG2ƯFHHTXLSPHQW reversed due to the change on the intent/commitment to use the assets for service GHOLYHU\WRPHPEHUVWKHUHE\VLJQLƬFDQWO\LQFUHDVLQJWKHQHHGIRUWKHDVVHWVVHUYLFH SRWHQWLDOs)XUQLWXUHDQGƬ[WXUHV5{{ 5{QLO DQG2ƯFHHTXLSPHQWs5{ 5{QLO 7KHUHFRYHUDEOHVHUYLFHDPRXQWRIWKHDVVHWZDVEDVHGRQLWVYDOXHLQXVH { - Total impairment losses recognised (reversed) { {

7KHPDLQFODVVHVRIDVVHWVDƪHFWHGE\LPSDLUPHQWORVVHVDUH

• )XUQLWXUHDQGƬ[WXUHVs5{ 5{ • ,7HTXLSPHQWs5{ 5{ • 2ƯFHHTXLSPHQWs5{ 5{

The main events and circumstances that led to the recognition of these impairment losses are as follows:

• )XUQLWXUHDQGƬ[WXUHVZDVGDPDJHGEURNHQUHVXOWLQJLQWKHVHDVVHWVKDYLQJQRVHUYLFHSRWHQWLDO • IT equipment - these assets are not required for the delivery of services to members, either currently, or over the longer planning period due to technological obsolescence. • 2ƯFHHTXLSPHQWWKHVHDVVHWVDUHQRWUHTXLUHGIRUWKHGHOLYHU\RIVHUYLFHVWRPHPEHUVHLWKHUFXUUHQWO\RURYHUWKHORQJHU planning period and some have evidenced physical damage to the asset.

7KHPDLQFODVVHVRIDVVHWVDƪHFWHGE\LPSDLUPHQWUHYHUVDODUHDVIROORZV

• )XUQLWXUH Ƭ[WXUHVs5{ 5QLO • 2ƯFHHTXLSPHQWs5 5QLO

198

ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2019 Notes to Annual Financial Statements

28. IMPAIRMENT OF ASSETS CONTINUED

Value in use

In determining the recoverable amount of the assets subjected to impairment SALGA considered the following:

• 8VHIXOQHVVRIWKHDVVHWVDQGWKHLUFXUUHQWVWDWH6$/*$ V,7GHSDUWPHQWH[SHUWVWKDWWKHLQWDQJLEOHDVVHWVKDYHDQLQGHƬQLWH useful life and will be assessed annually for usefulness. • 7KHLQWHQWLRQRIPDQDJHPHQWRQWKHFXUUHQWXVHRIWKHDVVHWVDQGXSJUDGHVHƪHFWHGRQVSHFLƬFDVVHWV • 7KHQDWXUHFODVVHVRIWKHDVVHWVDƪHFWHGEHLQJERWKLQWDQJLEOHDQGWDQJLEOHLH6RIWZDUH)XUQLWXUHDQG)LWWLQJVDQG2ƯFH Equipment. • The appropriateness of the carrying value of the assets prior the change in use. • In the absence an active market for the same assets due to technological advancements and change in design, management opted for the cost replacement approach to determine value in use, this was done through the application of Consumer 3ULFH,QFUHDVH &3, RQWKHDƪHFWHGDVVHWV

6$/*$GHWHUPLQHGWKHYDOXHLQXVHRIWKHDVVHWVDƪHFWHGE\LPSDLUPHQWDVIROORZV

A depreciated replacement cost approach was used, where the replacement cost of an asset is the cost to replace the asset’s JURVVVHUYLFHSRWHQWLDO7KLVFRVWLVGHSUHFLDWHGWRUHƮHFWWKHDVVHWLQLWVXVHGFRQGLWLRQ,QWKHDEVHQFHRIDQDFWLYHPDUNHW for assets of a similar condition the depreciated replacement cost is measured as the reproduction or replacement cost of the DVVHWZKLFKHYHULVORZHUOHVVDFFXPXODWHGGHSUHFLDWLRQFDOFXODWHGRQWKHEDVLVRIVXFKFRVWWRUHƮHFWWKHDOUHDG\FRQVXPHG or expired service potential of the asset.

29. FINANCE COSTS

Figures in Rand 2019 2018 Trade and other payables { { Finance leases { { Trade and other payables at amortised cost – interest expense {{ { {{ {{

7RWDOLQWHUHVWH[SHQVHFDOFXODWHGXVLQJWKHHƪHFWLYHLQWHUHVWUDWHRQƬQDQFLDOLQVWUXPHQWVQRWDWIDLUYDOXHWKURXJKVXUSOXVRU GHƬFLWDPRXQWHGWR5{{ 5{{

30. TAXATION

No provision is made for taxation as SALGA is exempt from Income Tax in terms of section 10(1) of the Income Tax Act. FINANCIAL STATEMENTS ANNUAL

No Value Added Tax was applicable to SALGA as it is exempt from complying with the Value Added Tax Act.

31. AUDITORS’ REMUNERATION PART G

Figures in Rand 2019 2018 Audit fees {{ {{

199

ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2019 Notes to Annual Financial Statements

32. CASH GENERATED FROM / (UTILISED IN) OPERATIONS

Figures in Rand 2019 2018 Surplus {{ {{ Adjustments for: Depreciation and amortisation {{ {{ (Gain) / loss on sale of assets { { (Gain) / loss on foreign exchange { { Fair value adjustment to investment property {{ {{ Recognised Impairment loss { { Increase / (Decrease) in allowance for doubtful debt {{ {{ Movements in operating lease assets and accruals { { 0RYHPHQWVLQUHWLUHPHQWEHQHƬWOLDELOLW\ { { Movements in provisions {{ {{ (Decrease) / increase in accruals relating to employee costs { { Transfers from WIP {{ - Changes in working capital: Trade and other receivables from exchange transactions {{ {{ Trade and other receivables from non-exchange transactions {{ {{ Trade and other payables from exchange transactions {{ {{ Unspent conditional grants and receipts {{ { { {{ {{

33. COMMITMENTS

Authorised capital expenditure Already contracted for but not provided for Figures in Rand 2019 2018 • Property, plant and equipment { {

Total capital commitments Figures in Rand 2019 2018 Already contracted for but not provided for { {

Authorised operational expenditure Already contracted for but not provided for Figures in Rand 2019 2018 • Expenditure {{ {{

Total operational commitments Figures in Rand 2019 2018 Already contracted for but not provided for {{ {{

200

ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2019 Notes to Annual Financial Statements

33. COMMITMENTS CONTINUED

Total commitments Figures in Rand 2019 2018 Authorised and contracted capital expenditure { { Authorised and contracted operational expenditure 28 922 295 {{ { { {{

This committed operational expenditure relates to expenditure where purchase orders were issued and handed-over to suppliers as at year-end. All these commitments will be realised in the normal operating cycle of SALGA and are funded from internal resources.

Operating leases - as lessee (expense) Figures in Rand 2019 2018 Minimum leases payments due - within one year {{ {{ LQVHFRQGWRƬIWK\HDULQFOXVLYH {{ { { {{ {

6$/*$KDVWHQRSHUDWLQJOHDVHVIRURƯFHDFFRPPRGDWLRQDFURVVDOOSURYLQFHV2SHUDWLQJOHDVHSD\PHQWVUHSUHVHQWUHQWDOV SD\DEOHE\6$/*$IRULWVDGPLQLVWUDWLYHRƯFHDFFRPPRGDWLRQ

/HDVHVDUHQHJRWLDWHGIRUDQDYHUDJHWHUPRIƬYH\HDUV7KHDYHUDJHH[WHQVLRQSHULRGLV{\HDUV {{\HDUV 7KHDYHUDJH escalation rate is 9%.

Operating leases - as lessor (income) Figures in Rand 2019 2018 Minimum leases payments due - within one year { { LQVHFRQGWRƬIWK\HDULQFOXVLYH - { ODWHUWKDQƬYH\HDUV -- ANNUAL FINANCIAL STATEMENTS ANNUAL { { {

SALGA leases a portion of its property in KwaZulu-Natal to a cellular phone operator for a cellular phone mast. The lease period upon integration of SALGA KwaZulu-Natal into the SALGA fold was 96 months. The annual escalation is 8% and the remaining PART G lease period is 12 months.

201

ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2019 Notes to Annual Financial Statements

34. RELATED PARTIES

Relationships Members of the National Executive Committee (“NEC”) 3UHVLGHQWRI6$/*$ 2ƯFHEHDUHU Cllr Parks Tau Councillor- City of Johannesburg Metropolitan Municipality 'HSXW\3UHVLGHQWRI6$/*$ 2ƯFHEHDUHU Cllr Sebenzile Ngangelizwe Executive Mayor – Matjhabeng District Municipality 'HSXW\3UHVLGHQWRI6$/*$ 2ƯFHEHDUHU Cllr Zandile Gumende Executive Mayor: eThekwini Metropolitan Municipality 'HSXW\3UHVLGHQWRI6$/*$ 2ƯFHEHDUHU Cllr Lindiwe Mabona-Ntshalintshali Mayor – Emalahleni Local Municipality Member of the NEC Cllr Nomakhosazana Meth Executive Mayor OR Tambo District Municipality Member of the NEC Cllr Deon De Vos Mayor – Dr Beyers Naudei Local Municipality Member of the NEC &OOU%KHNXPX]L&KDUOHV6WRƬOH Speaker - Matjhabeng District Municipality Member of the NEC Cllr Robert Mashego MMC – Ekurhuleni Metropolitan Municipality Member of the NEC Cllr Thami Ngubane Mayor – Umvoti Local Municipality Member of the NEC Cllr Florence Radzelane Executive Mayor – Vhembe District Municipality Member of the NEC Cllr. Jesta Sidell Mayor – Enhlanzeni District Municipality Member of the NEC Cllr. Nombulelo Hermans Speaker – Pixley Ka-Seme District Municipality Member of the NEC Cllr. Bongile Mhaleni Mayor - Mogareng Local Municipality Member of the NEC Cllr. Justice T Mokolomakwa Executive Mayor – Ngaka-Modiri District Municipality Member of the NEC Cllr Mpho Khunou Mayor – Rustenburg Local Municipality Member of the NEC Cllr Xanthea Limberg MMC – City of Cape Town Metropolitan Municipality Member of the NEC Cllr Memory Booysen Executive Mayor Eden District Municipality ([RƯFLRPHPEHURIWKH1(& Cllr Mxolisi Koyo Speaker – Chris Hani District Municipality ([RƯFLRPHPEHURIWKH1(& Cllr Olly Matawana Mlamleli Executive Mayor – Mangaung Metropolitan Municipality ([RƯFLRPHPEHURIWKH1(& Cllr Busisiwe Modisakeng Executive Mayor –Sedibeng District Municipality

202

ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2019 Notes to Annual Financial Statements

34. RELATED PARTIES CONTINUED

Relationships Members of the National Executive Committee (“NEC”) ([RƯFLRPHPEHURIWKH1(& Cllr Mluleki Ndobe Executive Mayor –Harry Gwala District Municipality ([RƯFLRPHPEHURIWKH1(& Cllr Thembisile Nkadimeng Executive Mayor –Polokwane Local Municipality ([RƯFLRPHPEHURIWKH1(& Cllr Gibson Chirwa Executive Mayor –Gert Sibande District Municipality ([RƯFLRPHPEHURIWKH1(& &OOU6RƬD0RVLNDWL Executive Mayor –John Taolo-Gaetsewe District Municipality ([RƯFLRPHPEHURIWKH1(& Cllr Maria Fetsang Mokati Executive Mayor –Bojanala District Municipality

Relationships Members of the National Executive Committee (“NEC”) ([RƯFLRPHPEHURIWKH1(& Ald Anton Coetsee Speaker –Overstrand Local Municipality Member of the NEC (co-opted) Cllr Xola Pakati ([HFXWLYH0D\RUs%XƪDOR&LW\0HWURSROLWDQ0XQLFLSDOLW\ Member of the NEC (co-opted) Cllr Xolani Sotashe Councillor - City of Cape Town Metropolitan Municipality ([RƯFLRPHPEHURIWKH1(& Cllr Sindiswa Gomba &RXQFLOORUs%XƪDOR&LW\0HWURSROLWDQ0XQLFLSDOLW\ Member of the NEC Cllr S. Maphefo Mogale-Letsie Executive Mayor – Merafong City Local Municipality ([RƯFLRPHPEHURIWKH1(& Mr Xolile George &KLHI([HFXWLYH2ƯFHU

Executive Authority Executive Authority 1DWLRQDO'HSDUWPHQWRI&RRSHUDWLYH*RYHUQDQFH 7UDGLWLRQDO$ƪDLUV

Members of the Audit and Risk Committee

Chairperson of Audit Committee Mr Andrew Mashifane FINANCIAL STATEMENTS ANNUAL Member of Audit Committee Mr Nala Mhlongo Member of Audit Committee Ms Nosisa Kekana Member of Audit Committee Mr Zukisani Samsam PART G Member of Audit Committee Mr Victor Songelwa

Members of the Performance Management and Remuneration Panel Chairperson of Performance and Mr Chose Choeu Remuneration Committee Member of Performance and Remuneration Adv Motlajo Ralefatane Committee

203

ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2019 Notes to Annual Financial Statements 34. RELATED PARTIES CONTINUED

Members of the Performance Management and Remuneration Panel Member of Performance and Remuneration Ms Barbara Lombard Committee Member of Performance and Remuneration Ms Rosetta Xaba Committee

Executive Management Team Senior Management – Executive Director: Economic Development and Mr Seana Nkhahle Planning 6HQLRU0DQDJHPHQWs([HFXWLYH0DQDJHU2ƯFHRIWKH&KLHI([HFXWLYH Mr Lance Joel 2ƯFHU 6HQLRU0DQDJHPHQW&KLHI)LQDQFLDO2ƯFHU Mr Nceba Mqoqi Senior Management - Executive Director (Community Development) Ms Mirriam Lehlokoa Senior Management - Executive Director (Municipal Finance) Mr Simphiwe Dzengwa (resigned 31 Oct 2018) Senior Management - Executive Director (Municipal Infrastructure and Ms Jean De La Harpe Services) Senior Management - Executive Directors (Municipal Institutional Mr Rio Nolutshungu Development)

Municipalities

$OOWUDQVDFWLRQVZLWKWKHEHORZOLVWHGPXQLFLSDOLWLHVDUHDWDUPoVOHQJWKDQGLQWHUPVRI6$/*$oV&RQVWLWXWLRQSROLFLHVDQG procedures. All transactions are on terms and conditions that are no more or less favourable than those which it is reasonable to expect SALGA to have adopted if dealing with any other municipality or entity in the same circumstances.

All terms and conditions are within the normal operating parameters established by SALGA’s legal mandate.

The nature of transactions entered into with related parties are comprised primarily by membership levies that SALGA levies WRDOOLWVPHPEHUVFRQIHUHQFHHYHQWUHJLVWUDWLRQIHHVDQGWXLWLRQIHHVIRUFDSDFLW\EXLOGLQJSURJUDPPHV$OORXWVWDQGLQJ balances emanate from these transactions.

These municipalities are related party to SALGA by virtue of either an Executive Mayor; Speaker or Councillor being elected to serve on SALGA’s NEC. Mangaung Metropolitan Municipality Umsobomvu Local Municipality Gert Sibande District Municipality uThukela District Municipality Ekurhuleni Metropolitan Municipality Lejweleputswa District Municipality Umvoti Local Municipality City of Johannesburg Metropolitan Municipality Bojanala District Municipality City of Cape Town Metropolitan Municipality OR Tambo District Municipality

204

ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2019 Notes to Annual Financial Statements

34. RELATED PARTIES CONTINUED

These municipalities are related party to SALGA by virtue of either an Executive Mayor; Speaker or Councillor being elected to serve on SALGA’s NEC. Ehlanzeni District Municipality %XƪDOR&LW\0HWURSROLWDQ0XQLFLSDOLW\ Vhembe District Municipality (current year) Matjhabeng Local Municipality (current year) George Local Municipality Emalahleni Local Municipality Overstrand Local Municipality Tubatse Local Municipality Pixley Ka Seme District Municipality Magareng Local Municipality Ngaka-Modiri Molema District Municipality Rustenburg Local Municipality Eden District Municipality Chris Hani District Municipality Sedibeng District Municipality Harry Gwala District Municipality Polokwane Local Municipality John Taolo-Gaetsewe District Municipality Dr Beyers Naude Local Municipality Merafong Local Municipality

Other entities

$OOWUDQVDFWLRQVZLWKWKHEHORZOLVWHGHQWLWLHVDUHDWDUPoVOHQJWKDQGLQWHUPVRI6$/*$oV&RQVWLWXWLRQSROLFLHVDQGSURFHGXUHV All transactions are on terms and conditions that are no more or less favourable than those which it is reasonable to expect SALGA to have adopted if dealing with any other municipality or entity in the same circumstances.

All terms and conditions are within the normal operating parameters established by SALGA’s legal mandate.

7KHQDWXUHRIWKHWUDQVDFWLRQVDUHPHPEHUVKLSIHHVRUGLQDULO\SDLGORFDOJRYHUQPHQWDVVRFLDWLRQVFDSDFLW\EXLOGLQJLQLWLDWLYHV and pursuance of common mandate initiatives and strengthening of local government associations. FINANCIAL STATEMENTS ANNUAL

7KHVHHQWLWLHVDUHUHODWHGSDUW\WR6$/*$E\YLUWXHRIHLWKHUDQ1(&PHPEHU([HFXWLYH0DQDJHPHQW7HDPPHPEHUVHUYHVRQ the board or governance structure of these entities. PART G

Green Buildings Council of South Africa (GBCSA) Passenger Rail Agency of South Africa (PRASA) Local Government Sector Education and Training Authority (LGSETA) South African Cities Network (SACN) United Cities and Local Governments (UCLG) United Cities and Local Governments of Africa (UCLGA) 8QLWHG&LWLHVDQG/RFDO*RYHUQPHQWVRI$IULFD6RXWKHUQ$IULFD5HJLRQDO2ƯFH 8&/*$6$52 Municipal Demarcation Board (MDB) (up to 31 October 2018) 205

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Figures in Rand 2019 2018 Related party transactions Transfers – Government grant and subsidies 'HSDUWPHQWRI&RRSHUDWLYH*RYHUQDQFHDQG7UDGLWLRQDO$ƪDLUV {{ {{

7KHJUDQWSDLGE\WKH'HSDUWPHQWRI&RRSHUDWLYH*RYHUQDQFHDQG7UDGLWLRQDO$ƪDLUVWR6$/*$LVSDUWRIQRUPDOIXQGLQJWKDW Government grants to public entities to further state policies.

Key management information Class Description Number Non-executive board sub-committee $XGLWDQG5LVN&RPPLWWHH DQG members Performance Management and remuneration committee (4) 9 Non-executive board members Accounting authority 31 Executive board member &KLHI([HFXWLYH2ƯFHU 1 Executive management Executive Management Team (Senior Management excludes the Chief ([HFXWLYH2ƯFHU 6

35. KEY MANAGEMENT PERSONNEL

National Executive Committee members ,QWHUPVRIWKHQRWLFHLVVXHGLQWHUPVRIWKH5HPXQHUDWLRQRI3XEOLF2ƯFH%HDUHUV$FW $FW1RRI 6$/*$ is required to pay sitting allowances to councillors appointed to governance structures of Organised Local Government. The VDLGDOORZDQFHLVOLPLWHGWR5{SHUVLWWLQJRIWKH3URYLQFLDO([HFXWLYH&RPPLWWHHRU1DWLRQDO([HFXWLYH&RPPLWWHHRUDQ\ committee of organised local government, regardless of the number of meetings that are attended by such councillor on a VSHFLƬFGD\7KHVLWWLQJDOORZDQFHLVDOVRSD\DEOHWRPHPEHUVRI6$/*$GHSOR\HGWRIRUPDOLQWHUJRYHUQPHQWDOUHODWLRQVIRUXPV

No loans were advanced to NEC members and no remuneration or compensation was provided to close family members of NEC members. There were no transactions entered with entities that are owned by NEC members.

Executive Management Team No loans were advanced to Senior Management and no remuneration or compensation was provided to close family members of Senior Management. There were no transactions entered with entities that are owned by Senior Executives of SALGA.

Audit & Risk Committee members No loans were advanced to Audit & Risk Committee members and no remuneration or compensation was provided to close family members of Audit Committee members. There were no transactions entered with entities that are owned by Audit Committee members.

Performance Management and Remuneration Committee members No loans were advanced to Audit Committee Members and no remuneration or compensation was provided to close family members of Remuneration Committee members. There were no transactions entered with entities that are owned by Remuneration Committee members.

Entities; Department and Agencies 7KHJUDQWVSDLGE\WKH'HSDUWPHQWRI&RRSHUDWLYH*RYHUQDQFHDQG7UDGLWLRQDO$ƪDLUVWR6$/*$DUHSDUWRIQRUPDOIXQGLQJWKDW Government grants to public entities to further the policies of government.

206

ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2019 Notes to Annual Financial Statements 35. KEY MANAGEMENT PERSONNEL CONTINUED 1 020 3 906 3 060 Total HQWSDUWDNHVLQ*RYHUQDQFH LHVWKH6$/*$1(&PDQGDWHV DWWHQGHGE\VXFKFRXQFLOORURQDVSHFLƬF ICIP ICIP RJRYHUQDQFHVWUXFWXUHVRI2UJDQLVHG/RFDO fee*** Facilitation refund Expense Expense 36 298 43 438 56 884 68 104 181 481181 188 621 1+DELWDW813DQHO,QSXUVXLWRI6$/*$ VPDQGDWHLQWKHVHERG *$ VPDQGDWHRIVWUDWHJLFSURƬOLQJ)RUH[DPSOH6$/*$ V3UHVLG (UCLGA). The President of SALGA also presides over the world body United Cities and Local allowance allowance (foreign) * (foreign) Subsistence Subsistence SHUVLWWLQJUHJDUGOHVVRIWKHQXPEHURIPHHWLQJVWKDWDUH governance structures of organised local government (where applicable). The rates used for local travel VUHTXLUHGWRSD\VLWWLQJDOORZDQFHVWRFRXQFLOORUVDSSRLQWHGW impart knowledge to new councillors. These trainers are paid a daily fee for each session that is facilitated (local) * allowance allowance Subsistence Subsistence travel travel allowance * allowance Reimbursed LQWHUQDWLRQDOSHUGLHPLVSDLGWR1(&PHPEHUVZKRXQGHUWDNH6$/ V&RPPRQZHDOWK/RFDO*RYHUQPHQW)RUXP &/*) DQG0HWURSROLV8 YHUQPHQWDO5HODWLRQVIRUXPV7KHVDLGDOORZDQFHLVOLPLWHGWR5 9 122 061 3 944 2 328 624 14 { { RI3XEOLF2ƯFH%HDUHUV$FW $FW1RRI 6$/*$L { 23 402 645 32 56 047 ANNUAL FINANCIAL STATEMENTS ANNUAL 160 754 977 81 9 600 467 363 2 988 27 504 750 186 Sitting Sitting allowance ** allowance PART G day. (ICIP). Programme Induction Councillor Integrated the in instance for DQGVXEVLVWHQFHDUHEDVHGRQ6$56UDWHVGHHPHGDVH[SHQGHG$Q *RYHUQPHQWDVZHOODVWR&RXQFLOORUVGHSOR\HGWRIRUPDO,QWHUJR structures of international bodies such as the local government*RYHUQPHQW 8&/* 6$/*$DOVRSDUWLFLSDWHVDWWKHVHZRUOGERGLH Pan-African body, United Cities and Local GovernmentsNEC of Africa members to participate at these bodies from time to time. Cllr SebenzileCllr Ngangelizwe ThembisileCllr Nkadimeng Cllr Parks Tau Ald Anton Coetsee 240 12 793 37 944 2 336 18 53 305 Cllr Bongile MhaleniCllr &OOU6RƬD0RVLNDWVL 020 1 Cllr Nomakhosazana MethCllr Deon De Vos&OOU%KHNXPX]L&KDUOHV6WRƬOH Cllr Robert Mashego FlorenceCllr Radzelane 4 080 7 140 120 6 906 3 9 429 768 536 24 29 903 28 616 337 17 36 023 Cllr Sindiswa Gomba 5 100 780 2 432 595 51 78 242 Cllr Nombulelo HermansCllr Memory BooysenCllr Mxolisi KoyoCllr Busisiwe Modisakeng 3 060Cllr Gibson Chirwa 23 6 120 180 8 160 200 10 7 734 1 536 9 180 1 152 384 603 384 751 15 28 379 2 057 9 168 006 15 23 911 752 19 9 180 Cllr Mluleki Ndobe 084 10 751 15 25 835 Cllr Xola Pakati Xola Cllr 060 3 Cllr Xolani Sotashe{ 260 13 22 519 35 779 *** As part of ushering in new councillors’ post the local government elections, Trainers accredited by the LGSETA are used to National Executive Committee (NEC) 2019 * Reimbursed travel and local subsistence allowances is remitted to NEC members in terms of SALGA policy for participating in ,QWHUPVRIWKHQRWLFHLVVXHGLQWHUPVRIWKH5HPXQHUDWLRQ

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ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2019 Notes to Annual Financial Statements

35. KEY MANAGEMENT PERSONNEL CONTINUED Total { HQWSDUWDNHVLQ*RYHUQDQFH LHVWKH6$/*$1(&PDQGDWHV DWWHQGHGE\VXFKFRXQFLOORURQDVSHFLƬF ICIP ICIP Fee *** Fee RJRYHUQDQFHVWUXFWXUHVRI2UJDQLVHG/RFDO Facilitation refund Expense Expense 1+DELWDW813DQHO,QSXUVXLWRI6$/*$ VPDQGDWHLQWKHVHERG *$ VPDQGDWHRIVWUDWHJLFSURƬOLQJ)RUH[DPSOH6$/*$ V3UHVLG (UCLGA). The President of SALGA also presides over the world body United Cities and Local allowance allowance (foreign) * (foreign) Subsistence Subsistence SHUVLWWLQJUHJDUGOHVVRIWKHQXPEHURIPHHWLQJVWKDWDUH governance structures of organised local government (where applicable). The rates used for local travel VUHTXLUHGWRSD\VLWWLQJDOORZDQFHVWRFRXQFLOORUVDSSRLQWHGW impart knowledge to new councillors. These trainers are paid a daily fee for each session that is facilitated (local) * allowance allowance Subsistence Subsistence travel travel allowance * allowance Reimbursed LQWHUQDWLRQDOSHUGLHPLVSDLGWR1(&PHPEHUVZKRXQGHUWDNH6$/ V&RPPRQZHDOWK/RFDO*RYHUQPHQW)RUXP &/*) DQG0HWURSROLV8 22 126 - - 8 743 - - 30 869 13 46813 150 11 738 470 18 - - 43 826 YHUQPHQWDO5HODWLRQVIRUXPV7KHVDLGDOORZDQFHLVOLPLWHGWR5 177 122177 740 151 574 15 532 904 3 953 184 119 RI3XEOLF2ƯFH%HDUHUV$FW $FW1RRI 6$/*$L Sitting Sitting allowance ** allowance DQGVXEVLVWHQFHDUHEDVHGRQ6$56UDWHVGHHPHGDVH[SHQGHG$Q structures of international bodies such as the local government*RYHUQPHQW 8&/* 6$/*$DOVRSDUWLFLSDWHVDWWKHVHZRUOGERGLH Pan-African body, United Cities and Local GovernmentsNEC of Africa members to participate at these bodies from time to time. day. (ICIP). Programme Induction Councillor Integrated the in instance for *RYHUQPHQWDVZHOODVWR&RXQFLOORUVGHSOR\HGWRIRUPDO,QWHUJR Cllr Bongile Mhaleni4 810-----4 810 924 810-----4 924-----1 Mhaleni4 Mashego1 Robert Bongile Cllr Cllr Florence RadzelaneCllr Nombulelo HermansCllr Cllr Memory Booysen 924 1 6 734 34 002 8 658 - 2 196 5 701 - 860 - 961 24 ------932 42 885 26 - 219 15 Cllr Mxolisi KoyoCllr Busisiwe Modisakeng 8 658 9 620 - - - 2 074 22 428 22 669 472 - 73 344 - 108 179 086 31 Cllr Parks Tau Cllr Sebenzile Ngangelizwe Lindiwe Mabona-NtshalintshaliCllr Cllr Nomakhosazana MethCllr Deon De Vos&OOU%KHNXPX]L&KDUOHV6WRƬOH 696 7 506 13 544 12 4 810 - - 696 7 - - 25 049 498 55 663 19 996 2 209 265 ------194 63 - 33 169 - 809 221 - 4 810 35 741 Cllr Mluleki Ndobe 544 11 - - 559 17 - - 29 103 Cllr Thembisile Nkadimeng 3 848 - - 599 14 - - 447 18 Cllr Gibson Chirwa12 506-----12 506 506-----12 Chirwa12 Gibson Cllr &OOU6RƬD0RVLNDWVL Ald Anton Coetsee 506 12 087 67 4 148 841 24 3 481 - 063 112 Cllr Sindiswa Gomba 5 810 8 751 2 562 23 714 - 45 840 86 677 Cllr Xola Pakati Xola Cllr Cllr Xolani Sotashe{ 5 772 962 - - - - 55 457 037 15 - - - - 229 61 999 15 National Executive Committee (NEC) 2018 * Reimbursed travel and local subsistence allowances is remitted to NEC members in terms of SALGA policy for participating in ,QWHUPVRIWKHQRWLFHLVVXHGLQWHUPVRIWKH5HPXQHUDWLRQ *** As part of ushering in new councillors’ post the local government elections, Trainers accredited by the LGSETA are used to

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209

ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2019 Notes to Annual Financial Statements

35. KEY MANAGEMENT PERSONNEL CONTINUED { { { { { { { Total { { { { ,QSXUVXLWRI6$/*$ V ularly in instances in ularly FSURƬOLQJ6$/*$ VFKDLUSHUVRQ DJH WKH HVFDODWLRQ RI GHQWRIWKH8&/*$6RXWKHUQ$IULFD ation competitoration SALGA to Employer Employer contribution contribution to group risk group to cies as it pertains to its Executives 219 436219 239 082 aid aid Employer Employer to medical contribution contribution 59 29659 145 12 445 9 and and funds funds { Employer Employer * &RPPRQZHDOWK/RFDO*RYHUQPHQW)RUXP &/*) DQG0HWURSROLV to pension retirement retirement contribution contribution he Performance Management and Remuneration Committee comprised by independent non- minimum) to 20% (maximum). 20% to minimum) LVSDLGWRHPSOR\HHVZKRXQGHUWDNH6$/*$ VPDQGDWHRIVWUDWHJL YHUQPHQWVRI$IULFD 8&/*$ DV9LFH3UHVLGHQWKHLVDOVR3UHVL palities pose the greatest remuner direct the pose palities per diem per 832 703 and other Subsistence Subsistence allowances * allowances till the expiry of the contract or through natural attrition or earlier. The Chief executive HVHFDWHJRULHVRIHPSOR\HHV1RWZLWKVWDQGLQJWKHHƪRUWVWRPDQ 142 018142 344 163 689 152 29 613 313 24 192 012192 641 61 635 156 29 613 918 24 122 324122 938 39 527 103 29 613 855 16 161 692161 28 669 039 114 - 255 18 199 641199 712 12 231 244231 34 804 183 131 29 613 25 029 182 756182 96 097 887 143 29 613 22 981 165 396165 35 182 254 158 - 117 24 631 973631 295 332 349 329 29 613 864 51 162 840162 64 984 838 132 29 613 305 21 related related payments ** payments ** Bonuses and performance UOGZLGHERGLHVVXFKDV8QLWHG&LWLHVDQG/RFDO*RYHUQPHQW 8&/ { { Basic Basic { { { { { { { salary { { "personal to holder basis" holder to "personal HORFDOJRYHUQPHQW3DQ$IULFDQERG\8QLWHG&LWLHVDQG/RFDO*R icularly Metro'sicularly metropolitan since munici DQFHDQGDFWLQJDOORZDQFH ZKHUHDSSOLFDEOH ,QWHUQDWLRQDO executive members. The applicable performance rewards are based on merit and the applicable reward rates matrix range from 9% ( mandate in these bodies the chairperson is supported by the Chief Executive of the organisation. SDUWDNHVLQ*RYHUQDQFHVWUXFWXUHVRILQWHUQDOERGLHVVXFKDVWK 5HJLRQDO2ƯFH 8&/*$6$52 6$/*$DOVRSDUWLFLSDWHVLQRWKHUZR Mr Nceba Mqoqi Mr Seana Nkhahle Mr Simphiwe Dzengwa Mr Xolile George Xolile Mr Ms Lorette Tredoux (resigned Aug 31 2017)Mr Lance Joel 651 755 Mr Rio Nolutshungu Mr Ashraf Adam (resigned Jan 31 2018) Ms Jean De La Harpe Ms Mirriam Lehlokoa { (also see report of the chairperson of SALGA's Performance Management and Remuneration Committee in the annual report). chairperson Performance annual the SALGA's report Management Remunerationthe see of Committee of in and (also RƯFHU V FXUUHQW UHPXQHUDWLRQ KDV EHHQ LGHQWLƬHG WR EH RQH RI WK where salary bands of some executives are on a remuneration at SALGA, particularly part municipalities benchmark these with and those of Executives, it is important to note that SALGA had to review its remuneration poli Executive Management Team Executive 2018 2WKHUDOORZDQFHVFRPSULVHWUDYHODOORZDQFHFHOOSKRQHDOORZ PerformanceSALGA's Management Remuneration remuneration Committee and normalising is framework, SALGA's with charged of partic ** ** Performance related bonuses are per the SALGA Performance Management policy that is implemented with an oversight role of t

210

ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2019 Notes to Annual Financial Statements

35. KEY MANAGEMENT PERSONNEL CONTINUED

Audit Committee and Performance and Remuneration Committee members

2019 Reimbursed Attendance Other fees Expense travel cost Retainer Total fees * *** refund ** ** Audit and Risk Management Committee MrAndrew Mashifane (chairperson) { 2 202 - - { { Ms Nala Mhlongo { 2 275--{ { Mr Nosisa Kekana 70 059 1 562 - - { { Mr Zukisani Samsam { 1 373 - - { { Mr Victor Songelwa { 1 516 - - { { Performance Management and Remuneration Committee Mr Chose Choeu (chairperson) { 2 830 - - { { Adv Motlatjo Ralefatane { 1 343 - - { { Ms Barbara Lombard { 2 253 - - { { Ms Rosetta Xaba { 347--{ { { 15 701 - - { {{

* Members of SALGA's NEC sub-committees are remunerated for participating in SALGA's governance structures based on SALGA's policy for remuneration of NEC sub-committees. Attendance fees are based on an hourly rate and claimable hours are capped regardless of the duration on the meeting or preparation time.

** Reimbursed travel allowance is remitted to members based on the applicable SARS rates deemed as expended.

2018 Reimbursed Attendance Retainer Other fees travel cost Total fees * fees * *** ** Audit and Risk Management Committee Mr Andrew Mashifane (chairperson) 78 744 1 852 48 096 - 128 692 Ms Nala Mhlongo 63 420 1 996 32 385 - 97 801 Mr Nosisa Kekana 63 420 1 365 32 385 - 97 170 Mr Zukisani Samsam 62 071 1 084 32 385 - 95 540 Mr Victor Songelwa 78 263 1 496 32 385 - 112 144 Performance Management and Remuneration Committee FINANCIAL STATEMENTS ANNUAL Mr Chose Choeu (chairperson) 65 250 1 397 { -114 743 Adv Motlatjo Ralefatane 64 769 1 768 32 385 - 98 922

Ms Barbara Lombard 75 938 2 740 32 385 37 408 148 471 PART G Ms Rosetta Xaba { 456 32 385 - 97 610 { 616 644 14 154 322 887 37 408 991 093

** Reimbursed travel allowance is remitted to members based on the applicable SARS rates deemed as expended.

*** Other fees are for an independent observer status in the adjudication of the annual employee recognition awards.

211

ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2019 Notes to Annual Financial Statements

36. CHANGE IN ESTIMATE

Operating lease liability

The Minister of Finance during the current 2019 Budget Speech, announced a one (1) percentage point change in the VAT rate and due to the fact that our Operating Leases were straight lined using the old rate of 14% a change in the straight lining amount was required and this also had an impact on the measurement if liabilities at year-end. In terms of GRAP 3, when new FLUFXPVWDQFHVDƪHFWLQJWKHHVWLPDWHRIKRZOLDELOLWLHVRUDVVHWVDUHFRQVXPHGDFKDQJHLQHVWLPDWHLVUHTXLUHG6$/*$KDV accounted for this change in estimate prospectively in accordance with GRAP 3.

Amount after one Amount before (1) percentage Details the rate change Change point change in in VAT VAT rate

Statement of Financial Performance Total straight-lined expense (GRAP 13) {{ {{ {

{{ {{ {

Statement of Financial Position /LDELOLW\DWHQGRIƬQDQFLDO\HDU • Current portion of operating lease liability {{ {{ { • Non-current portion of operating lease liability {{ {{ {

{{ {{ 326 213

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ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2019 Notes to Annual Financial Statements

37. COMPARATIVE FIGURES

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Note 3 – Property, plant and equipment Accumulated Gross carrying depreciation and Carrying value amount impairment &RPSDUDWLYHƬJXUHVSUHYLRXVO\UHSRUWHG Leased assets {{ {{ {{ {{ {{ {{

5HFODVVLƬFDWLRQ /HDVHGRƯFHHTXLSPHQW {{ {{ {{ Leasehold improvements {{ {{ {{ {{ {{ {{

7KHVHUHFODVVLƬFDWLRQVKDGQRHƪHFWRQWKHUHSRUWHGUHVXOWVRIRSHUDWLRQV

38. RISK MANAGEMENT

Financial risk management 6$/*$oVDFWLYLWLHVH[SRVHLWWRDYDULHW\RIƬQDQFLDOULVNVPDUNHWULVN LQFOXGLQJFXUUHQF\ULVNIDLUYDOXHLQWHUHVWUDWHULVNFDVK ƮRZLQWHUHVWUDWHULVNDQGSULFHULVN FUHGLWULVNDQGOLTXLGLW\ULVN

Liquidity risk 3UXGHQWOLTXLGLW\ULVNPDQDJHPHQWLPSOLHVPDLQWDLQLQJVXƯFLHQWFDVK6$/*$UHFHLYHVFDVKLQWKHIRUPRIPHPEHUVKLSOHYLHV from its members and grants from government. The entity maintains liquidity by limiting capital and operational expenditure within the approved budget. ANNUAL FINANCIAL STATEMENTS ANNUAL SALGA’s risk to liquidity is as a result of inadequate funds available to cover future commitments. SALGA manages liquidity risk through an ongoing review of future commitments and credit facilities.

2019 PART G

Maturity analysis Trade payables Other payables Not later than one month {{ - /DWHUWKDQRQHPRQWKDQGQRWODWHUWKDQWKUHHPRQWKV {{ - /DWHUWKDQWKUHHPRQWKVDQGQRWODWHUWKDQRQH\HDUDQG {{ {{ /DWHUWKDQRQH\HDUDQGQRWODWHUWKDQƬYH\HDUV - {{ {{ {{

213

ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2019 Notes to Annual Financial Statements

38. RISK MANAGEMENT CONTINUED

2018

Maturity analysis Trade payables Other payables Not later than one month 29 812 102 - /DWHUWKDQRQHPRQWKDQGQRWODWHUWKDQWKUHHPRQWKV 24 575 102 - /DWHUWKDQWKUHHPRQWKVDQGQRWODWHUWKDQRQH\HDUDQG 1 868 966 17 968 252 /DWHUWKDQRQH\HDUDQGQRWODWHUWKDQƬYH\HDUV - 21 847 477 56 256 170 39 815 729

Values presented in the maturity analysis are undiscounted according to the terms of the instrument. These amounts will all be settled in cash. Trade payables are considered to mature in 30 days after year end as these suppliers require 30 days settlement terms. No changes between the current and prior year assumptions have been made.

Credit risk &UHGLWULVNFRQVLVWVPDLQO\RIFDVKGHSRVLWVFDVKHTXLYDOHQWVGHULYDWLYHƬQDQFLDOLQVWUXPHQWVDQGWUDGHUHFHLYDEOHV7KHHQWLW\ only deposits cash with major banks with high quality credit standing and limits exposure to any one counter-party.

Trade receivables comprise of municipalities which are invoiced once a year based on their budgeted salary cost. There is QRLQGHSHQGHQWUDWLQJWKHUHIRUHPDQDJHPHQWDVVHVVHVWKHFUHGLWTXDOLW\RIWKHFXVWRPHUWDNLQJLQWRDFFRXQWLWVƬQDQFLDO position, past experience and other factors. The entity establishes an impairment that represents its estimate of incurred losses in respect of trade receivables.

Market risk

Interest rate risk SALGA's interest rate risks arise from market and economic factors, loans and other payables, cash and cash equivalents and loans and other receivables. The entity's exposure to interest rate risk is minimal due to the following factors: • QRLQWHUHVWLVOHYLHGRQRYHUGXHWUDGHUHFHLYDEOHV • LQWHUHVWSDLGRQWUDGHSD\DEOHVLVOLPLWHGDVLWLVWKHSROLF\RIWKHHQWLW\WRVHWWOHZLWKLQWKHFUHGLWWHUPVFDVKƮRZSHUPLWWLQJ LQRUGHUWRFRPSO\ZLWKWKH3XEOLF)LQDQFH0DQDJHPHQW$FW 3)0$ UHTXLUHPHQWVDQG • the PFMA does not allow for the entity to utilise bank overdrafts, without prior approval of the Executive Authority and Minister of Finance.

%DVHGRQWKHDFWLYLWLHVRI6$/*$WKHRQO\DUHDDƪHFWHGE\LQWHUHVWUDWHULVNLVƬQDQFHOHDVHVDQGLQYHVWPHQWLQFRPHHDUQHGRQ call deposits and other bank balances.

At 31 March 2019, if interest rates at that date had been 200 basis points lower with all other variables held constant, surplus for WKH\HDUZRXOGKDYHEHHQ5{ 5{ ORZHUDULVLQJPDLQO\DVDUHVXOWRIORZHULQWHUHVWHDUQHGRQFDOOGHSRVLWV and bank balances.

,ILQWHUHVWUDWHVKDGEHHQEDVLVSRLQWVKLJKHUZLWKDOORWKHUYDULDEOHVKHOGFRQVWDQWVXUSOXVZRXOGKDYHEHHQ5{ {5{ KLJKHUDULVLQJPDLQO\DVDUHVXOWRIKLJKHULQWHUHVWH[SHQVHRQYDULDEOHSD\DEOHDQGUHFHLYDEOHV

The sensitivity is higher in 2019 than in 2018 for investment revenue because of an increase in average cash and cash equivalents KHOGGXULQJWKH\HDU7KHVHQVLWLYLW\LVDOVRKLJKHULQYHUVXVGXHDQLQFUHDVHLQƬQDQFHFRVWV

&DVKƮRZLQWHUHVWUDWHULVN 6$/*$ VH[SRVXUHWRWKLVW\SHRIULVNDULVHVZKHQWKHHQWLW\KDVDƬQDQFLDOLQVWUXPHQWZLWKDƮRDWLQJLQWHUHVWUDWH7KHHQWLW\ is seldom exposed to this type of risk. When the need arises, management employs conservative approaches with a limited

214

ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2019 Notes to Annual Financial Statements

38. RISK MANAGEMENT CONTINUED

ULVNH[SRVXUHVXFKDV&DOO$FFRXQWVRUOLPLWWKHULVNFRPSOHWHO\E\HPSOR\LQJƬ[HGGHSRVLWV7KHIROORZLQJFUHGLWIDFLOLWLHVDUH available, which are payable 30 days from statement date:

• Lodge cards R15 000 000 • 2ƯFHHTXLSPHQWUHQWDOV 5{{ • )OHHWFDUGV 5{

Fair value interest rate risk 6$/*$ VH[SRVXUHWRWKLVW\SHRIULVNLVVOLJKWO\KLJKHUWKDQWKHFDVKƮRZLQWHUHVWUDWHULVNSULPDULO\GXHWRWKHFRQVHUYDWLYH LQYHVWPHQWSKLORVRSK\2UGLQDULO\Ƭ[HGGHSRVLWVH[SRVHWKHHQWLW\WRWKLVW\SHRIULVN7KHHQWLW\PDQDJHVWKLVULVNE\NHHSLQJ Ƭ[HGLQYHVWPHQWVRQDVKRUWHUWHUPWRPLWLJDWHWKHLPSDFWWKDWWKLVW\SHRIULVNPLJKWKDYHRQWKHRUJDQLVDWLRQ

Foreign exchange risk 6$/*$GRHVQRWKHGJHIRUHLJQH[FKDQJHƮXFWXDWLRQV

SALGA is seldom exposed to this type of risk. Whenever the risk arises it is normally on the incurrence of per diem for international travel. The organisation's policy on international travel allows for payment of USD 215 per day. As the allowance LVGHQRPLQDWHGLQIRUHLJQFXUUHQF\6$/*$LVH[SRVHGWRFXUUHQF\ƮXFWXDWLRQVRQSD\PHQWEDVHGRQWKHUXOLQJVSRWUDWH Furthermore, an infrequent incurrence of a foreign currency denominated expenditure relating to Microsoft product suite licences, the organisation is also exposed to this risk as it settles these expenditures at the ruling spot rate on payment date.

Due to the infrequent nature and magnitude of the expenditure management does not employ any hedging mechanisms against this risk.

Price risk 7KHHQWLW\ VH[SRVXUHWRSULFHULVNLVOLPLWHGWRWKHHƪHFWWKDWLQƮDWLRQKDVRQWKHPDUNHWSULFHVIRUJRRGVDQGVHUYLFHVRUGLQDULO\ procured by the organisation. The risk arises when the entity's revenue does not escalate at a similar or better rate that the prevailing market conditions, this is rare since the entity's major source of revenue is its membership levies which due to the EDVLVRIGHULYLQJWKHOHY\DPRXQWQRUPDOO\HVFDODWHVDWDUDWHKLJKHURUHTXLYDOHQWWRWKHSUHYDLOLQJLQƮDWLRQDU\WUHQGV

Other than membership levies adjusted annually, there are no special mechanisms employed by management to manage this kind of risk other than pursuing a fair market value/price through a 'dip-stick' in the market viz. sourcing formal price quotations and open tenders per the organisations SCM policy.

39. GOING CONCERN

:HGUDZDWWHQWLRQWRWKHIDFWWKDWDW0DUFK6$/*$KDGDFFXPXODWHGVXUSOXVHVRI5{{DQGWKDWWKHHQWLW\ V FINANCIAL STATEMENTS ANNUAL WRWDODVVHWVH[FHHGLWVOLDELOLWLHVE\5{{LQGLFDWLQJWKDWWKHRUJDQLVDWLRQLVVROYHQW

7KHDQQXDOƬQDQFLDOVWDWHPHQWVKDYHEHHQSUHSDUHGRQWKHEDVLVRIDFFRXQWLQJSROLFLHVDSSOLFDEOHWRDJRLQJFRQFHUQ7KLV EDVLVSUHVXPHVWKDWIXQGVZLOOEHDYDLODEOHWRƬQDQFHIXWXUHRSHUDWLRQVDQGWKDWWKHUHDOLVDWLRQRIDVVHWVDQGVHWWOHPHQWRI PART G liabilities, contingent obligations and commitments will occur in the ordinary course of business.

7KHDELOLW\RI6$/*$WRFRQWLQXHDVDJRLQJFRQFHUQLVGHSHQGHQWRQDQXPEHURIIDFWRUV7KHPRVWVLJQLƬFDQWRIWKHVHLV WKHUHFRJQLWLRQRI6$/*$E\WKH0LQLVWHURI&RRSHUDWLYH*RYHUQDQFHDQG7UDGLWLRQDO$ƪDLUVLQWHUPVRIWKH2UJDQLVHG/RFDO Government Act, 1997 as the sole voice of local government.

215

ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2019 Notes to Annual Financial Statements

40. EVENTS AFTER THE REPORTING DATE

7KHUHDUHQRPDWHULDOIDFWVRUFLUFXPVWDQFHVWKDWKDYHDULVHQEHWZHHQWKHUHSRUWLQJGDWHDQGWKHGDWHRIDSSURYDOZKLFKDƪHFW WKHƬQDQFLDOSRVLWLRQRI6$/*$DVUHƮHFWHGLQWKHVHDQQXDOƬQDQFLDOVWDWHPHQWV

41. FRUITLESS AND WASTEFUL EXPENDITURE

Figures in Rand 2019 2018 Opening balance - - Fruitless and wasteful expenditure { { Less: Fruitless and wasteful expenditure recouped - - Over-recovery of fruitless and wasteful expenditure - - Less: Fruitless and wasteful expenditure (condoned) { { { - -

)UXLWOHVVDQGZDVWHIXOH[SHQGLWXUHDPRXQWLQJWR5{ 5{ ZDVLQFXUUHGGXULQJWKHƬQDQFLDO\HDU

The accounting authority condoned the fruitless and wasteful expenditure on 15 May 2019.

216

ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2019 Notes to Annual Financial Statements 0 33,037 873,976 791,534 (762,478) 1,136,711 (249,850) (353,547) (725,360) 3,976,768 5,933,496 actual 25,151,880 (1,359,361) (6,689,155) 20,712,547 (1,863,478) 37,308,549 (4,633,625) (1,000,000) (1,000,000) (2,000,000) 'LƪHUHQFH (50,854,470) budget and and budget (11,5000,000) EHWZHHQƬQDO 0 0 0 0 750,150 637,522 246,453 310,845 140,639 3,136,522 basis 5,274,640 3,633,037 1,866,375 Actual Actual 1,408,466) (7,167,253) 12,037,976 30,310,996 33,100,000 corporate (70,274,679) 563,848,319 amounts on amounts on (113,391,074) (349,342,623) (100,380,204) FFRXQWLQJ$XWKRULW\RQ ƬQDQFLDO\HDUZDV WKH&)2oV5HYLHZ EDVHGRQWKHQDWXUHRIH[SHQVHV 600,000 9,598,449 7,000,000 1,400,000 1,500,000 1,000,000 1,000,000 1,000,000 3,600,000 5,000,000 2,000,000 6,500,000 6,000,000 11,164,000 33,100,000 11,500,000 (8,303,964) (2,200,000) 559,871,551 (76,208,175) (62,536,604) (386,651,172) (125,532,084) 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1,500,000 1,000,000 3,600,000 (1,500,000) (1,000,000) (3,6000,000) (3,6000,000) Adjustments Budget Final 0 0 0 600,000 2,900,00 5,600,00 9,598,449 7,000,000 1,000,000 5,000,000 2,000,000 6,500,000 6,000,000 Budget 11,164,000 33,100,000 11,500,000 (8,303,964) (2,200,000) Approved Approved 559,871,551 (76,208,175) (62,536,604) (386,651,172) (125,532,084) 24 18 21 21 18 18 18 18 18 18 18 18 18 18 18 18 18 18 27 20 20 23 3 & 4 HW YDULDQFHVJUHDWHURUHTXDOWRSHUFHQW DUHLQFOXGHGLQ MXVWHGEXGJHWIRUƬQDQFLDO\HDUZDVDSSURYHGE\WKH$ UDEOHZLWKWKHƬQDQFLDOVWDWHPHQWV7KHRULJLQDOEXGJHWIRUWKH HEXGJHWLVSUHSDUHGRQWKHDFFUXDOEDVLVXVLQJDFODVVLƬFDWLRQ

ANNUAL FINANCIAL STATEMENTS ANNUAL Figures in RandFigures in Note(s) PART G

Total revenue revenue Total 661,834,000 0 661,834,000 655,293,474 (6,540,526) Total revenue from non-exchange revenue revenue non-exchange from revenue Total Expenses Employee costs costs Programme Administrative expenses expense amortisation and Depreciation expenditure operational Other Final costs 81,200,000 0 81,200,000 49,096,183 (32,103,817) Revenue transactions exchange from Revenue Revenue from exchange transactions transactions exchange from Revenue transactions exchange from revenue Other Investment revenue Revenue from non-exchange transactions Grant recognised – LGSETA (LGCAC) Grant recognised – LGSETA (MaSE) Grant recognised – LGSETA (ICIP) ExecutiveGovernment – grants subsidies Authority and Grant recognised – Federation of Canadian Municipalities Sponsorships and donations from non-exchange transactions Grant recognised – Commonwealth Local Government Forum (CWLGF) ) Grant recognised – GIZ (Governance Support Programme) Grant recognised – DPSA (Tirelo Bosha) Grant recognised – European Union (SGCLG) Grant recognised – LGSETA (LiGO) Grant recognised – LGSETA (LLLC) Capacity) Municipal Grant (Enhancing recognised EU – Grant recognised – WSG (Enhancing Capacity in LG Waste Management 0 0 0 0 0 503,146 704,700 585,852 2018 2,931,707 1,416,322 2,633,168 4,031,923 8,087,987 1,890,963 8,188,337 year the for Surplus 402,001 0 402,001 13,329,175 12,927,174 Actual Actual (8,127,231) 45,997,781 (1,139,500) 26,452,705 31,300,000 31 March31 (83,072,187) 605,630,514 525,092,041 (82,670,444) 559,632,733 transactions exchange from revenue Total 580,634,000 0 580,34,000 606,197,291 25,563,291 (66,605,534) (355,827,281) (355,827,281) (597,442,177) Expenses Total (661,431,999) 0 (661,431,999) (641,964,299) 19,467,700 42. BUDGET OF COMPARATIVE STATEMENT AND ACTUAL INFORMATION 7KH6$/*$EXGJHWLVSUHSDUHGRQDQDFFUXDOEDVLVZKLFKLVFRPSD ([SODQDWLRQRIYDULDQFHVEHWZHHQDFWXDOVDQGƬQDODSSURYHGEXGJ DSSURYHGE\WKH$FFRXQWLQJ$XWKRULW\RQ)HEUXDU\7KHDG May 2019. 7KHEXGJHWFRYHUVWKHSHULRGV$SULOWR0DUFK7K LQWKHVWDWHPHQWRIƬQDQFLDOSHUIRUPDQFH basis comparable on Budget

217

ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2019 Notes to Annual Financial Statements

43. IRREGULAR EXPENDITURE

Figures in Rand 2019 2018 Opening balance - - Add: Irregular expenditure – current year 167 966 { Add: Irregular expenditure – prior year (discovered in current year) - - Less: Amounts condoned - {{ Less: Amounts recoverable (not condoned) - - Less: Amounts not recoverable (not condoned) - - 167 966 -

7KHRUJDQLVDWLRQLQFXUUHGLUUHJXODUH[SHQGLWXUHIRUWKH\HDURI5{ 5QLO

Details of irregular expenditure – current year Details Steps taken by the organisation Incorrect allocation of BBBEE points to a supplier whom SALGA is currently processing the non- 167 966 LWV%((&HUWLƬFDWHKDGH[SLUHGDWWKHWLPHRIDZDUG compliance in accordance with the latest instruction note on irregular expenditure IUDPHZRUNLVVXHGRQ0D\DQGHƪHFWLYH from 17 May 2019.

218

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 ABBREVIATIONS AND ACRONYMS

5YLGSA Five Year Local Government Strategic Agenda Ald Alderman AGSA Audit General South Africa APP Annual Performance Plan ARC Audit and Risk Committee ATR Annual Training Report ASGISA Accelerated and Shared Growth Initiative of South Africa AU African Union BAAM Business-Adopt-A-Municipality BCEA Basic Conditions of Employment Act CD Community Development CDP Councillor Development Programme CEO &KLHI([HFXWLYH2ƯFHU CFO &KLHI)LQDQFLDO2ƯFHU CIP Councillor Induction Programme CLGF Commonwealth Local Government Conference CLLR Councillor CMRA Centre for Municipal Research and Advice CoGTA 'HSDUWPHQWRI&RRSHUDWLYH*RYHUQDQFHDQG7UDGLWLRQDO$ƪDLUV COO &KLHI2SHUDWLRQV2ƯFHU CRDP Comprehensive Rural Development Programme CSIR &RXQFLOIRU6FLHQWLƬFDQG,QGXVWULDO5HVHDUFK DACF District Assemblies Common Fund DAFF Department of Agriculture, Forestry and Fisheries DBSA Development Bank of Southern Africa DC Disciplinary Code DCoG Department of Cooperative Governance DEA 'HSDUWPHQWRI(QYLURQPHQWDO$ƪDLUV DHS District Health System DLG Department of Local Government DLG & HS Department of Local Government and Human Settlement

DM District Municipality AND ACRONYMS ABBREVIATIONS DoE Department of Energy DoJ Department of Justice DPME Department of Planning, Monitoring and Evaluation DPSA Disabled People South Africa DRDLR Department of Rural Development and Land Reform DRM Disaster Risk Management DSD Department of Social Development

219

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 DST Department of Science and Technology DTPS Department of Telecommunications and Postal Services EC Eastern Cape ECD Early Childhood Development ED Executive Director EDI Electricity Distribution Industry EDP Economic Development Planning EESDCF Employment Equity Skills Development Consultative Forum EIUG Intensive User Group of Southern Africa EMS Emergency Medical Services EPWP Expanded Public Works Programme ER Employee Recognition ESTA Extension of Security of Land Tenure Act ETG Evolution Technologies Group EWP Employee Wellness Programme FBS Free Basic Service FFC Financial and Fiscal Commission FS Free State FTTH Fibre to the House Africa Council GIS Geographic Information System GIGR Governance and Intergovernmental Relations GIZ Gesellschaft für Internationale Zusammenarbeit GIZ-GSP GIZ – Government Support Programme GP Gauteng GRAP Generally Recognised Accounting Practice HC Human Capital HDA Housing Development Agency HDF Human Development Framework HOD Head of Department HRDCSA Human Resource Development Council of South Africa HRM&D Human Resource Management and Development ICAS Independent Counselling and Advisory Service ICT Information and Communication Technology ICLEI International Council for Local Environmental Initiatives IDP Integrated Development Plan IGR Intergovernmental Relations IS Information Systems IMATU Independent Municipal and Allied Trae Union IMFO ,QVWLWXWHRI0XQLFLSDO)LQDQFH2ƯFHUV IOM ,QWHUQDWLRQDO2UJDQL]DWLRQIRU0LJUDWLRQ IGR Intergovernmental Relations ILO ,QWHUQDWLRQDO/DERXU2UJDQL]DWLRQ IPAP Industrial Policy Action Plan IRM Integrated Risk Management ISDF Integrated Service Delivery Framework IUDG Integrated Urban Development Grant

220

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 KPI Key Performance Indicator KZN KwaZulu-Natal LAN Local Area Network LED Local Economic Development LG Local Government LGA Local Government Association of England and Wales LGCCC Local Government Climate Change Champions LGPCC Local Government Partnership for Climate Change LGES Local Government Equitable Share LGFF Local Government Fiscal Framework LGHC Local Government Human Capital LGICT Local Government Information Communication Technology LGS Local Government support LGSETA Local Government Sector Education Authority LGSTT Local Government Support Task Team LGTAS Local Government Turnaround Strategy LM Local Municipality LODLOG Local Democracy and Local Governance LP Limpopo LR Labour Relations LRA Labour Relations Act LUMS Land Use Management Systems MALGA Malawian Local Government Association MASP Municipal Audit Support Programme MBI Municipal Benchmarking Initiative MDB Municipal Demarcation Board MDG Millennium Development Goals MEC Member of Executive Council M&E Monitoring and Evaluation MFMA Municipal Finance Management Act MHS Municipal Health Services MHSCG Municipal Human Settlements Capacity Grant MID Municipal Institutional Development MILE Municipal Institute of Learning MINMEC Ministers and Members of Executive Council Meeting MIS Municipal Infrastructure Services MLCAC Municipal Leadership Competency Assessment MMC Member of the Mayoral Committee MoU Memorandum of Understanding ABBREVIATIONS AND ACRONYMS ABBREVIATIONS MP Mpumalanga MPAC Municipal Public Accounts Committee MRT Municipal Rating Tool MSA Municipal Systems Act MTEF Medium-Term Expenditure Framework MTIR Municipal Transversal Issues Report MTSF Medium Term Strategic Framework

221

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 MYPD Multi-year price determination NC Northern Cape NCoP National Council of Provinces NDA National Development Agency NDP National Development Plan NEC National Executive Committee NEDLAC National Economic Development and Labour Council NEPAD New Partnership for Africa's Development NERSA National Energy Regulator of South Africa NGP National Growth Plan NHI National Health Insurance NMA National Members Assembly NOB 1DWLRQDO2ƯFH%HDUHUV NQF 1DWLRQDO4XDOLƬFDWLRQV)UDPHZRUN NSDP National Spatial Development Perspective NTRMF National Treasury Risk Management Framework NW North West NWG North West Government NWG National Working Group OHS Occupational Health and Safety OLG Organised Local Government PA Personal Assistant PDG Palmer Development Group PDP Professional Development Programme PEC Provincial Executive Committee PEERC Public and Environmental Economics Research Centre PEO 3URYLQFLDO([HFXWLYH2ƯFHU PFMA Public Finance Management Act PHDA Priority Housing Development Areas PIE Prevention of Illegal Eviction PMA Provincial Members Assembly PMM Performance Matrix Model PMS Performance Management System PRZ Provisional Restructuring Zones RM Risk Management PHC Primary Health Care SADC Southern African Development Community SAE Sustainable Energy Africa SAIEH South African Institute of Environmental Health SALGA South African Local Government Association SALGBC South African Local Government Bargaining Council SAMHS South African Military Health Service SAMWU South Africa Municipal Workers Union SANBS South African National Blood Service SANEDI South African National Energy development Institute SANRAL South African National Roads Agency Limited

222

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 SARS South African Revenue Services SASCOC South African Sports Confederation and Olympic Committee SCLG SALGA Centre for Leadership and Governance SCM Supply Chain Management SCOA Standard Charts of Accounts SDA Service Delivery Agreement SDF Spatial Development Framework SERI Social Economic Rights Institute of South Africa SIP Strategic Infrastructure Project SMART Simple, Measurable, Attainable, Relevant, Timebound SMME 6PDOO0HGLXP0LFURVL]HG(QWHUSULVH SPLUMA Spatial Planning and Land Use Management Act STR Small Town Regeneration SWC SALGA Women Commission SWPN Strategic Water Partnership Network ToR Terms of Reference UCLG United Cities and Local Government UCLGA United Cities and Local Governments of Africa UCLGA – SARO 8&/*$6RXWKHUQ$IULFD5HJLRQDO2ƯFH UNEP United Nations Environment Programme UNFCCC United Nations Framework Convention on Climate Change UNISA University of South Africa UJ University of Johannesburg UK United Kingdom USDG Urban Settlement Development Grant VVSG The Association of Flemish Cities and Municipalities WAN Wide Area Network WC Western Cape WC/WDM Water Conservation / Water Demand Management WG Working Group WILGS Women in Local Government Summit WIPLGS Women in Provincial Local Government Summit WSA Water Services Authority WSP Water Services Provider ABBREVIATIONS AND ACRONYMS ABBREVIATIONS

223

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 MUNICIPAL MEMBERS OF SALGA

6$/*$ LV DQ DXWRQRPRXV DVVRFLDWLRQ ZLWK D PHPEHUVKLS RI DOO 6RXWK$IULFDQPXQLFLSDOLWLHV7KHGLVWULEXWLRQRIWKHVH PXQLFLSDOLWLHVSHUSURYLQFHDQGFDWHJRU\LVWDEXODWHGEHORZ

Table 35 Distribution and categories of South African municipalities

Category Number of Province Metropolitan District municipalities Local municipalities municipalities municipalities Eastern Cape 39 2 6 31 Free State 23 1 4 18 Gauteng 11 3 2 6 KwaZulu-Natal 54 1 10 43 Limpopo 27 - 5 22 Mpumalanga 20 - 3 17 Northern Cape 31 - 5 26 North West 22 - 4 18 Western Cape 30 1 5 24 Total 257 8 44 205

SALGA MEMBERS LISTED PER PROVINCE

Eastern Cape 1. %XƪDOR&LW\0HWURSROLWDQ 2. Sakhisizwe Local Postal: PO Box 134, East London 5200 Postal: PO Box 26, Cala5455 Physical: 117 Oxford Street, Cnr North & Oxford Physical: 458 Umthatha Road, Cala Streets, Trust Centre, East London Tel: 047 877 5200 Tel: 043 705 2000 Fax: 047 877 0000 Fax: 043 743 1688 Web: www.sakhisizwe.gov.za :HEZZZEXƪDORFLW\JRY]D 3. Nelson Mandela Bay Metropolitan 4. Joe Gqabi District Postal: PO Box 116, Port Elizabeth 6000 Postal: Private Bag X102, Barkly East 9786 Physical: City Hall, Vuyisile Mini Square, Govan Physical: Cnr Cole & Graham Streets, Barkly East Mbeki Avenue, Nelson Mandela Bay Tel: 045 979 3000 Tel: 041 506 3208/9 Fax: 045 971 0251 Fax: 041 506 2422 Web: www.jgdm.gov.za Web: www.nelsonmandelabay.gov.za 5. Alfred Nzo District 6. Elundini Local 3RVWDO3ULYDWH%DJ;0RXQW$\OLƪ Postal: PO Box 1, Maclear 5480 3K\VLFDO(UI1WVL]ZD6WUHHW0RXQW$\OLƪ Physical: 1 Seller Street, Maclear Tel: 039 254 5000 Tel: 045 932 8100 Fax: 039 254 0343 Fax: 045 932 1094 Web: www.andm.gov.za Web: www.elundini.org.za

224

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 Eastern Cape 7. Matatiele Local 8. Senqu Local Postal: PO Box 35, Matatiele 4730 Postal: Private Bag X03, Lady Grey 9755 Physical: 102 Main Street, Matatiele Physical: 19 Murray Street, Lady Grey Tel: 039 737 8100 Tel: 051 603 1300 Fax: 039 737 3611 Fax: 051 603 0445 Web: www.matatiele.gov.za Web: www.senqu.gov.za 9. Mbizana Local 10. Walter Sisulu Local Postal: PO Box 12, Bizana 4800 Postal: Private Bag X1011, Aliwal North 9750 Physical: 51 Main Street, Bizana Physical: Cnr Barkly & Somerset Streets, Aliwal Tel: 039 251 0230 North Fax: 039 251 0917 Tel: 051 633 2441 Web: www.mbizana.gov.za Fax: 051 634 1307 11. Ntabankulu Local 12. OR Tambo District Postal: PO Box 234, Ntabankulu 5130 Postal: Private Bag X6043, Mthata 5100 Physical: 85 Main Street, Ntabankulu Physical: OR Tambo House, Nelson Mandela Drive, Tel: 039 258 0056 Myezo Park, Mthata Fax: 039 258 0173 Tel: 047 501 6400 Web: www.ntabankulu.gov.za Fax: 047 532 6518 Web: www.ortambodm.gov.za 13. Umzimvubu Local 14. Ingquza Hill Local Postal: Private Bag X9020, Mount Frere 5090 3RVWDO32%R[)ODJVWDƪ Physical: 813 Main Street, Mount Frere 3K\VLFDO0DLQ6WUHHW)ODJVWDƪ Tel: 039 255 8500 Tel: 039 252 0131 Fax: 039 255 0167 Fax: 039 252 0699 Web: www.umzimvubu.gov.za Web: www.ihlm.gov.za 15. Amathole District 16. King Sabata Dalindyebo Local Postal: PO Box 320, East London 5200 Postal: PO Box 45, Mthatha 5099 Physical: 40 Cambridge Street, East London Physical: Munitata Building, Sutherland Street, Tel: 043 701 4000 Mthatha Fax: 043 742 0337 Tel: 047 501 4000 Web: www.amathole.gov.za Fax: 047 531 3128 Web: www.ksd.gov.za 17. Amahlathi Local 18. Mhlontlo Local Postal: Private Bag X4002, Stutterheim 4930 Postal: PO Box 31, Qumbu 5180 Physical: Cnr Maclean & Hill Streets, Stutterheim Physical: 96 LG Mabindla Avenue, Qumbu Tel: 043 683 5000 Tel: 047 553 7000 Fax: 043 683 2970 Fax: 047 553 0189 Web: www.amahlathi.gov.za Web: www.mhlontlolm.gov.za 19. Great Kei Local 20. Nyandeni Local Postal: Private Bag X2, Komga 4950 Postal: Private Bag X504, Libode 5160 Physical: 17 Main Street, Komga, 4950 Physical: B Nomandela Drive, Municipality Building, Tel: 043 831 1028 Libode Fax: 043 831 1483 Tel: 047 555 5000 Web: www.greatkeilm.gov.za Fax: 047 555 0202 Web: www.nyandenilm.gov.za MEMBERS OF SALGA MUNICIPAL 21. Mbhashe Local 22. Port St Johns Local Postal: PO Box 25, Dutywa 5000 Postal: PO Box 2, Port St Johns 5120 3K\VLFDO6WUHDWƬHOG5RDG'XW\ZD Physical: 257 Main Street, Port St Johns Tel: 047 489 5800 Tel: 047 564 1207 Fax: 047 489 5800 Fax: 047 564 1206 Web: www.mbhashemun.gov.za Web: www.psjmunicipality.gov.za

225

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 Eastern Cape 23. Mnquma Local 24. Sarah Baartman District Postal: PO Box 36, Butterworth 4960 Postal: PO Box 318, Port Elizabeth 6000 Physical: Cnr King & Mthatha Streets, Butterworth Physical: 32 Govan Mbeki Avenue, Port Elizabeth Tel: 047 401 2400 Tel: 041 508 7111 Fax: 047 491 0195 Fax: 041 508 7000 Web: www.mnquma.gov.za Web: www.sarahbaartman.co.za 25. Ngqushwa Local 26. Blue Crane Route Local Postal: PO Box 539, Peddie 5640 Postal: PO Box 21, Somerset East 5850 Physical: Erf 313, Main Road, Peddie Physical: 67 Nojoli Street, Somerset East Tel: 040 673 3095 Tel: 042 243 1333 Fax: 040 673 3771 Fax: 042 243 0633 Web: www.ngqushwamun.gov.za Web: www.bcrm.gov.za 27. Raymond Mhlaba Local 28. Dr Beyers Naudé Local Postal: PO Box 36, Fort Beaufort 5720 3RVWDO32%R[*UDDƪ5HLQHW Physical: 8 Somerset Road, Fort Beaufort 3K\VLFDO&KXUFK6TXDUH*UDDƪ5HLQHW Tel: 046 645 7400 Tel: 049 807 5700 Fax: 046 645 2562 Fax: 049 892 4319 Web: www.camdeboo.gov.za 29. Chris Hani District 30. Kou-Kamma Local Postal: Private Bag X7121, Queenstown 5320 Postal: Private Bag X011, Kareedouw 6400 Physical: 15 Bells Road, Queenstown Physical: 5 Keet Street, Kareedouw Tel: 045 808 4600 Tel: 042 288 7200 Fax: 045 838 1556 Fax: 042 288 0797 Web: www.chrishanidm.gov.za Web: www.koukammamun.co.za 31. Emalahleni Local 32. Kouga Local Postal: Private Bag X1161, Lady Frere 5410 3RVWDO32%R[-HƪUH\V%D\ Physical: 37 Indwe Road, Lady Frere 3K\VLFDO'D*DPD5RDG-HƪUH\V%D\ Tel: 047 878 0020 Tel: 042 200 2200 Fax: 047 878 0112 Fax: 042 200 8606 Web: emalahleni.local.gov.za Web: www.kouga.gov.za 33. Engcobo Local 34. Makana Local Postal: PO Box 24, Engcobo 5050 Postal: PO Box 176, Grahamstown 6140 Physical: 58 Union Street, Engcobo Physical: City Hall, High Street, Grahamstown Tel: 047 548 5600 Tel: 046 603 6131 Fax: 047 548 1078 Fax: 046 622 9700 Web: www.engcobolm.gov.za Web: www.makana.gov.za 35. Enoch Mgijima Local 36. Ndlambe Local Postal: PO Box 21, Tarkastad 5370 Postal: PO Box 13, Port Alfred6170 Physical: 12 Murray Street, Tarkastad Physical: 47 Campbell Street, Port Alfred Tel: 045 846 0033 Tel: 046 624 1140 Fax: 045 8460025 Fax: 046 624 2669 Web: www.ndlambe.gov.za 37. Intsika Yethu Local 38. Sundays River Valley Local 3RVWDO3ULYDWH%DJ;&RƬPYDED Postal: PO Box 47, Kirkwood 6120 3K\VLFDO0DLQ6WUHHW&RƬPYDED Physical: 31 Middle Street, Kirkwood, 6120 Tel: 047 874 8700 Tel: 042 230 7700/0077 Fax: 047 874 0010/0237 Fax: 042 230 1799 Web: www.intsikayethu.gov.za Web: www.srvm.gov.za

226

SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 Eastern Cape 39. Inxuba Yethemba Local Postal: PO Box 24, Cradock 5880 Physical: 1 J A Calata Street, Cradock Tel: 048 801 5000 Fax: 048 881 1421 Web: www.iym.co.za

Free State 1. Mangaung Metropolitan 2. Thabo Mofutsanyana District Postal: PO Box 3704, Bloemfontein 9300 Postal: Private Bag X810, Witsieshoek 9870 Physical: Bram Fischer Building, Nelson Mandela Physical: 1 Mampoi Street, Old Parliament Building, 'ULYH 0DUNJUDDƪ6WUHHW%ORHPIRQWHLQ Phuthaditjhaba Tel: 051 405 8911 Fax: 051 405 8707 Tel: 058 718 1089/36 Web: www.mangaung.co.za Fax: 058 718 1034 Web: www.thabomofutsanyana.gov.za 3. Fezile Dabi District 4. Dihlabeng Local Postal: PO Box 10, Sasolburg 1947 Postal: PO Box 551, Bethlehem 9700 Physical: John Vorster Road, Sasolburg Physical: 9 Muller Street, Bethlehem Tel: 016 970 8600 Tel: 058 303 5732 Fax: 016 970 8733 Fax: 058 303 4703 Web: www.feziledabi.gov.za Web: www.dihlabeng.gov.za 5. Mafube Local 6. Maluti-A-Phofung Local Postal: PO Box 2, Frankfort 9830 Postal: Private Bag X805, Witsieshoek 9866 Physical: 64 JJ Hadebe Street, Frankfort Physical: Cnr Moremoholo & Motloung Streets, Tel: 058 813 1051/9700/9718 Setsing Complex, Phuthaditjhaba Fax: 058 813 3072 Tel: 058 718 3700 Web: www.mafubemunicipality.gov.za Fax: 058 718 3777 Web: www.map.fs.gov.za 7. Metsimaholo Local 8. Mantsopa Local Postal: PO Box 60, Sasolburg 1947 Postal: PO Box 64, Ladybrand 9745 Physical: Civic Centre, Fichardt Street, Sasolburg Physical: 38 Joubert Street, Ladybrand Tel: 016 973 8300 Fax: 016 973 2191 Tel: 051 924 0654 Web: www.metsimaholo.gov.za Fax: 051 924 0020 Web: www.mantsopa.fs.gov.za

9. Moqhaka Local 10. Nketoana Local Postal: PO Box 302, Kroonstad 9500 Postal: PO Box 26, Reitz 9810 Physical: Hill Street, Kroonstad Physical: Cnr Church & Voortrekker Streets, Reitz Tel: 056 216 9911 Tel: 058 863 2811 Fax: 056 216 9122 Fax: 058 863 2523 Web: www.moqhaka.gov.za 11. Ngwathe Local 12. Phumelela Local Postal: PO Box 359, Parys 9585 Postal: Private Bag X5, Vrede 9835 Physical: Liebenburg Street, Parys Physical: Cnr Prinsloo & Kuhn Streets, Vrede MUNICIPAL MEMBERS OF SALGA MUNICIPAL Tel: 056 816 2700 Tel: 058 913 8300 Fax: 056 816 2146 Fax: 058 913 2317 Web: www.ngwathe.fs.gov.za Web: www.phumelela.gov.za

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SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 Free State 13. Lejweleputswa District 14. Setsoto Local Postal: PO Box 2163, Welkom 9460 Postal: PO Box 116, Ficksburg 9730 Physical: Cnr Jan Hofmeyer & Tempest Streets, Physical: 27 Voortrekker Street, Ficksburg Welkom Tel: 051 933 9300 Tel: 057 353 3094/5/8/9 Fax: 051 933 9309 Fax: 057 353 3382/057 391 8911 Web: www.setsoto.co.za Web: www.lejwe.co.za 15. Masilonyana Local 16. Xhariep District Postal: PO Box 8, Theunissen 9410 Postal: Private Bag X136, Trompsburg 9913 Physical: 47 Le Roux Street, Theunissen, 9410 Physical: 20 Louw Street, Trompsburg Tel: 057 733 0106 Tel: 051 713 9300 Fax: 057 733 2417 Fax: 051 713 0461 Web: www.masilonyana.fs.gov.za Web: www.xhariep.gov.za 17. Matjhabeng Local 18. Kopanong Local Postal: PO Box 708, Welkom 9460 Postal: Private Bag X23, Trompsburg 9913 Physical: 319 Stateway, Welkom Physical: 20 Louw Street, Trompsburg Tel: 057 391 3359 Tel: 051 713 9200 Fax: 057 357 4393 Fax: 051 713 0292 Web: www.matjhabeng.fs.gov.za Web: www.kopanong.gov.za 19. Nala Local 20. Letsemeng Local Postal: Private Bag X15, Bothaville 9660 3RVWDO3ULYDWH%DJ;.RƯHIRQWHLQ Physical: 8 Preller Street, Bothaville 3K\VLFDO*URRW7UHN6WUHHW.RƯHIRQWHLQ Tel: 056 514 9200 Tel: 053 205 9200 Fax: 056 515 3922 Fax: 053 205 0144 Web: www.nala.org.za Web: www.letsemeng.gov.za 21. Tokologo Local 22. Mohokare Local 3RVWDO3ULYDWH%DJ;%RVKRƪ Postal: PO Box 20, Zastron9950 Physical: Market Square, Voortrekker Street, Physical: Hoofd Street, Zastron %RVKRƪ Tel: 051 673 9600 Tel: 053 541 0014 Fax: 051 673 1550 Fax: 053 541 0360 Web: www.mohokare.gov.za Web: www.tokologo.gov.za 23. Tswelopele Local Postal: PO Box 3, Bultfontein 9670 Physical: Civic Centre, Bosman Street, Bultfontein Tel: 051 853 1111 Fax: 051 853 1332 Web: www.tswelopele.gov.za

Gauteng 1. City of Ekurhuleni Metropolitan 2. Midvaal Local Postal: Private Bag X1069, Germiston 1400 Postal: PO Box 9, Meyerton1960 Physical: 47 Van Buuren Road, Germiston Physical: Mitchell Street, Meyerton Tel: 011 999 0003 Tel: 016 360 7400 Web: www.ekurhuleni.gov.za Fax: 016 360 7519 Web: www.midvaal.gov.za 3. City of Johannesburg Metropolitan 4. West Rand District Postal: PO Box 1049, Johannesburg 2000 Postal: Private Bag X033, Randfontein 1759 Physical: 158 Civic Boulevard, Braamfontein, Physical: Cnr Sixth & Park Streets, Randfontein Johannesburg Tel: 011 411 5000 Tel: 011 407 6111 Fax: 011 412 3663 Fax: 011 403 8723 Web: www.wrdm.gov.za Web: www.joburg.org.za

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SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 Gauteng 5. City of Tshwane Metropolitan 6. Merafong City Local Postal: PO Box 440, Pretoria 0001 Postal: PO Box 3, Carletonville 2500 Physical: Isivuno House, 135 Lilian Ngoyi Street, Cnr Physical: 3 Halite Street, Carletonville Madiba & Lilian Ngoyi Streets, Pretoria Tel: 018 788 9500 Tel: 012 358 9999 Fax: 018 786 1105 Fax: 012 358 4896 Web: www.merafong.gov.za Web: www.tshwane.gov.za 7. Sedibeng District 8. Mogale City Local Postal: PO Box 471, Vereeniging 1930 Postal: PO Box 94, Krugersdorp 1740 3K\VLFDO&QU%HDFRQVƬHOG /HVOLH6WUHHWV Physical: Cnr Commissioner & Market Streets, Vereeniging Krugersdorp Tel: 016 450 3000 Tel: 011 951 2000/1 Fax: 016 455 2573 Fax: 011 953 2547 Web: www.sedibeng.gov.za Web: www.mogalecity.gov.za 9. Emfuleni Local 10. Rand West City Local Postal: PO Box 3, Vanderbijlpark 1900 Postal: PO Box 218, Randfontein 1760 Physical: Cnr Klasie Havenga & Frikkie Meyer Physical: Cnr Surtherland & Pollock Streets, Boulevard, Vanderbijlpark Randfontein Tel: 016 950 5000 Tel: 011 411 0000 Fax: 016 950 5050 Fax: 011 693 1736 Web: www.emfuleni.gov.za 11. Lesedi Local Postal: PO Box 201, Heidelberg 1438 Physical: Cnr HF Verwoerd & Louw Streets, Heidelberg Tel: 016 492 0049 Fax: 016 340 4394 Web: www.lesedilm.gov.za

KwaZulu-Natal 1. eThekwini Metropolitan 2. uMshwathi Local Postal: PO Box 1014, Durban 4000 Postal: Private Bag X29, Wartburg 3233 Physical: City Hall, 263 Dr Pixley Ka Seme (West) Physical: Main Street, New Hanover Street, Durban Tel: 033 815 2249 Tel: 031 311 1111 Fax: 031 311 2170 Fax: 033 502 0286 Web: www.durban.gov.za Web: www.umshwathi.gov.za 3. Amajuba District 4. uMkhanyakude District Postal: Private Bag X6615, Newcastle 2940 Postal: PO Box 449, Mkuze 3965 Physical: B9356 Amajuba Building, Madadeni Physical: Harlingen No.13433, Mkuze Tel: 034 329 7200 Tel: 035 573 8600 Fax: 034 314 3785 Fax: 035 573 1094 Web: www.amajuba.gov.za Web: www.ukdm.gov.za 5. Dannhauser Local 6. Big 5 Hlabisa Local Postal: Private Bag X1011, Dannhauser 3080 Postal: PO Box 89, Hluhluwe 3960 MUNICIPAL MEMBERS OF SALGA MUNICIPAL Physical: 8 Church Street, Dannhauser Physical: 163 Zebra Street, Library Building, Tel: 034 621 2666 Hluhluwe Fax: 034 621 3114 Tel: 035 562 0040 Web: www.dannhauser.gov.za Fax: 035 562 0988

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SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 KwaZulu-Natal 7. eMadlangeni Local 8. Jozini Local Postal: PO Box 11, Utrecht 2980 Postal: Private Bag X28, Jozini 3969 Physical: 34 Voor Street, Utrecht Physical: Circle Street, Bottom Town, Jozini Tel: 034 331 3041 Tel: 035 572 1292 Fax: 034 331 4312 Fax: 035 572 1266 Web: www.emadlangeni.gov.za Web: www.jozini.org.za 9. Newcastle Local 10. Mtubatuba Local Postal: Private Bag X6621, Newcastle 2940 Postal: PO Box 52, Mtubatuba 3935 Physical: 37 Murchison Street, Newcastle Physical: Lot 105, Inkosi Mtubatuba Road, Tel: 034 328 7600 Mtubatuba Fax: 034 312 1570 Tel: 035 550 0069 Web: www.newcastle.gov.za Fax: 035 550 0060 Web: www.mtubatuba.org.za 11. Harry Gwala District 12. uMhlabuyalingana Local Postal: Private Bag X501, Ixopo 3276 Postal: Private Bag X901, KwaNgwanase 3973 Physical: 40 Main Street, Ixopo Physical: R22 Main Road, 01 Manguzi, Manguzi Tel: 039 834 8700 Tel: 035 592 0680 Fax: 039 834 1701/1750 Fax: 035 592 0672 Web: www.harrygwaladm.gov.za Web: www.umhlabuyalingana.gov.za 13. Greater Kokstad Local 14. uMzinyathi District Postal: PO Box 8, Kokstad 4700 Postal: PO Box 1965, Dundee 3000 Physical: 75 Hope Street, Kokstad Physical: 39 Victoria Street, Princess Magogo Tel: 039 797 6600 Building, Dundee Fax: 039 727 5501 Tel: 034 219 1500 Web: www.kokstad.org.za Fax: 034 218 1940 Web: www.umzinyathi.gov.za 15. Nkosazana Dlamini-Zuma Local 16. Endumeni Local Postal: PO Box 43, Himeville 3256 Postal: Private Bag X2024, Dundee 3000 Physical: 32 Arbuckle Street, Himeville Physical: 64 Victoria Street, Dundee Tel: 033 702 1060 Tel: 034 212 2121 Fax: 033 702 1148 Fax: 034 212 3856 Web: www.endumeni.gov.za 17. Ubuhlebezwe Local 18. Msinga Local Postal: PO Box 132, Ixopo 3276 Postal: Private Bag X530, Tugela Ferry 3010 Physical: 29 Margaret Street Ixopo Physical: R33 Main Road, Tugela Ferry Tel: 039 834 7700 Tel: 033 493 0761 Fax: 039 834 1168 Fax: 033 493 0766 Web: www.ubuhlebezwe.org.za Web: www.msinga.org 19. uMzimkhulu Local 20. Nquthu Local Postal: PO Box 53, uMzimkhulu 3297 Postal: Private Bag X5521, Nquthu 3135 Physical: 169 Main Street, uMzimkhulu Physical: 83 Mdlalose Street, Nquthu Tel: 039 259 5300/039 259 5000 Tel: 034 271 6100 Fax: 039 259 0223 Fax: 034 271 6111 Web: www.umzimkhululm.gov.za Web: www.nquthu.gov.za 21. iLembe District 22. Umvoti Local Postal: PO Box 1788, KwaDukuza 4450 Postal: PO Box 71, Greytown 3250 Physical: iLembe House, 59/61 Mahatma Ghandi Physical: 41 Bell Street, Greytown Street, KwaDukuza Tel: 033 413 9100 Tel: 032 437 9300 Fax: 033 417 1393 Fax: 032 437 9588 Web: www.umvoti.gov.za Web: www.ilembe.gov.za

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SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 KwaZulu-Natal 23. KwaDukuza Local 24. uThukela District Postal: PO Box 72, KwaDukuza 4450 Postal: PO Box 116, Ladysmith 3370 Physical: 14 Chief Albert Luthuli Street, KwaDukuza Physical: 36 Lyel Street / 33 Forbes Street, Tel: 032 437 5000 Ladysmith Fax: 032 437 5098 Tel: 036 638 5100 / 036 638 2400 Web: www.kwadukuza.gov.za Fax: 036 637 5608 / 036 635 5501 Web: www.uthukeladm.co.za 25. Mandeni Local 26. Alfred Duma Local Postal: PO Box 144, Mandeni 4490 Postal: PO Box 29, Ladysmith 3370 3K\VLFDO.LQJƬVKHU5RDG0DQGHQL Physical: 221 Murchison Street, Lister Clarence Tel: 032 456 8200 Building, Ladysmith Fax: 032 456 2504 Tel: 036 637 2231 Web: www.mandeni.gov.za Fax: 036 631 1400 27. Maphumulo Local 28. Inkosi Langalibalele Local Postal: Private Bag X9205, Maphumulo 4470 Postal: PO Box 750, Estcourt 3310 Physical: MR 711, LOT 152, Maphumulo Physical: D1249 Sobabili Road, Ntabamhlophe Tel: 032 481 4500 Area, Estcourt Fax: 032 481 2053 Tel: 036 353 0693/0681/0691 Web: http://maphumuloonline.gov.za Fax: 036 353 6661 29. Ndwedwe Local 30. Okhahlamba Local Postal: Private Bag X503, Ndwedwe 4342 Postal: PO Box 71, Bergville 3350 Physical: P100 Road, Ndwedwe Physical: 259 Kingsway Street, Bergville Tel: 032 532 5000 Tel: 036 448 8000 Fax: 032 532 5031/2 Fax: 036 448 1986 Web: www.ndwedwe.gov.za Web: www.okhahlamba.org 31. Ugu District 32. uThungulu District Postal: PO Box 33, Port Shepstone 4240 Postal: Private Bag X1025, Richards Bay 3900 Physical: 28 Connor Street, Port Shepstone Physical: uThungulu House, Kruger Rand, Richards Tel: 039 688 5700 Bay Fax: 039 682 4820 Tel: 035 799 2500 Web: www.ugu.gov.za Fax: 035 789 1641 Web: www.uthungulu.org.za 33. Ray Nkonyeni Local 34. City of uMhlathuze Local Postal: PO Box 5, Port Shepstone 4240 Postal: Private Bag X1004, Richards Bay 3900 Physical: 10 Connor Street, Port Shepstone Physical: 5 Mark Strasse, Central Business District, Tel: 039 688 2000 Richards Bay Fax: 039 682 0327 Tel: 035 907 5000 / 0800 222 827 Web: www.hcm.gov.za Fax: 035 907 5444/5/6/7 Web: www.umhlathuze.gov.za 35. Umdoni Local 36. Mthonjaneni Local Postal: PO Box 19, Scottburgh 4180 Postal: PO Box 11, Melmoth 3835 Physical: Cnr Bram Fischer & Williamson Streets, Physical: 21 Reinhold Street, Melmoth Scottburgh Tel: 035 450 2082 Tel: 039 976 1202 / 039 978 4313 Fax: 035 450 2056 Fax: 039 976 2194/2020 Web: www.mthonjaneni.org.za MEMBERS OF SALGA MUNICIPAL Web: www.umdoni.gov.za 37. Umuziwabantu Local 38. Nkandla Local Postal: Private Bag X1023, Harding 4680 Postal: Private Bag X161, Nkandla 3855 Physical: Murchison Street, Harding Physical: Lot 292, Maree Road, Nkandla Tel: 039 433 1205 Tel: 035 833 2000 Fax: 039 433 1208 Fax: 035 833 0920 Web: www.umuziwabantu.gov.za Web: www.nkandla.org.za

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SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 KwaZulu-Natal 39. Umzumbe Local 40. uMfolozi Local Postal: PO Box 561, Hibberdene 4220 Postal: PO Box 96, KwaMbonambi 3915 Physical: Sipofu Road, Mathulini MPCC, Mthwalume, Physical: 25 Bredelia Street, KwaMbonambi 4186 Tel: 035 580 1421 Tel: 039 972 0005 Fax: 035 580 1141 Fax: 039 972 0099 Web: www.umfolozi.gov.za Web: www.umzumbe.gov.za 41. uMgungundlovu District 42. uMlalazi Local Postal: PO Box 3235, Pietermaritzburg 3200 Postal: PO Box 37, Eshowe 3815 Physical: 242 Langalibalele Street, Pietermaritzburg Physical: Hutchinson Street, Eshowe Tel: 033 897 6700 Tel: 035 473 3300 Fax: 033 342 5502 Fax: 035 474 4733 Web: www.umdm.gov.za Web: www.umlalazi.org.za 43. Impendle Local 44. Zululand District Postal: Private Bag X512, Impendle 3227 Postal: Private Bag X76, Ulundi 3838 Physical: 21 Mafahleni Street, Impendle Physical: 400 Ugagane Street, Ulundi Tel: 033 996 6000 Tel: 035 874 5500 Fax: 033 996 0852 Fax: 035 874 5531/5589 Web: www.impendle.gov.za Web: www.zululand.org.za 45. Mkhambathini Local 46. AbaQulusi Local Postal: Private Bag X04, Camperdown 3720 Postal: PO Box 57, Vryheid 3100 Physical: 18 Old Main Road, Camperdown Physical: Cnr High & Mark Streets, Vryheid Tel: 031 785 9300 Tel: 034 982 2133 Fax: 031 785 2121 Fax: 034 980 9637 Web: www.mkhambathini.gov.za Web: www.abaqulusi.gov.za 47. Mpofana Local 48. eDumbe Local Postal: PO Box 47, Mooi River 3300 Postal: Private Bag X308, Paulpietersburg 3180 Physical: 10 Claughton Terrace, Mooi River Physical: 10 Hoog Street, Paulpietersburg Tel: 033 263 1221 Tel: 034 995 1650 Fax: 033 263 1127 Fax: 034 995 1192 Web: www.mpofana.gov.za Web: www.edumbe.gov.za

49. Msunduzi Local 50. Nongoma Local Postal: Private Bag X321, Pietermaritzburg 3200 Postal: PO Box 84, Nongoma 3950 Physical: Cnr Church & Chief Albert Luthuli Streets, Physical: Lot 103, Main Street, Nongoma Pietermaritzburg Tel: 035 831 7500 Tel: 033 392 3000 Fax: 035 831 3152 Fax: 033 392 2397 Web: www.nongoma.org.za Web: www.msunduzi.gov.za 51. Richmond Local 52. Ulundi Local Postal: Private Bag X1028, Richmond 3780 Postal: Private Bag X17, Ulundi 3838 Physical: 57 Shepstone Street, Richmond Physical: BA 81, Prince Mangosuthu Street, Ulundi Tel: 033 212 2155 Tel: 035 874 5100 Fax: 033 212 2102 Fax: 035 870 1164 Web: www.richmond.gov.za Web: www.ulundi.gov.za 53. uMngeni Local 54. uPhongolo Local Postal: PO Box 5, Howick 3290 Postal: PO Box 191, Pongola 3170 Physical: Cnr Dicks & Somme Streets, Howick Physical: 61 Martin Street, Pongola Tel: 033 239 9200 Tel: 034 413 1223 Fax: 033 330 4183 Fax: 034 413 1706 Web: www.umngeni.gov.za Web: www.uphongoloonline.gov.za

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SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 Limpopo 1. Capricorn District 2. Greater Tzaneen Local Postal: PO Box 4100, Polokwane 0700 Postal: PO Box 24, Tzaneen 0850 Physical: 41 Biccard Street, Polokwane Physical: 38 Agatha Street, Civic Centre Building, Tel: 015 294 1000 Tzaneen, 0850 Fax: 015 291 4297 Tel: 015 307 8000 Web: www.cdm.org.za Fax: 015 307 8049 Web: www.greatertzaneen.gov.za 3. Blouberg Local 4. Maruleng Local Postal: PO Box 1593, Senwabaranwa 0790 Postal: PO Box 627, Hoedspruit 1380 Physical: 2nd Building Mogwadi, Senwabaranwa Physical: 64 Springbok Street, Hoedspruit Road, Senwabaranwa Tel: 015 793 2409 Tel: 015 505 7100 Fax: 015 793 2341 Fax: 015 505 0296 Web: www.maruleng.gov.za Web: www.blouberg.gov.za 5. Lepelle-Nkumpi Local 6. Vhembe District Postal: Private Bag X07, Chuenespoort 0745 Postal: Private Bag X5006, Thohoyandou 0950 Physical: 170 BA Lebowakgomo, Chuenespoort Physical: Government Complex, Thohoyandou Ring Tel: 015 633 4500 Road, Thohoyandou Fax: 015 633 6896 Tel: 015 960 2000 Web: www.lepelle-nkumpi.gov.za Fax: 015 962 1017 Web: www.vhembe.gov.za 7. Molemole Local 8. Collins Chabane Local Postal: Private Bag X44, Mogwadi 0715 Postal: Private Bag X5066, Thohoyandou 0950 Physical: 303 Church Street, Mogwadi Physical: Thohoyandou Civic Centre, Old Agriven Tel: 015 501 0243 Building, Thohoyandou Fax: 015 501 0419 Tel: 015 962 7500 Web: www.molemole.gov.za Fax: 015 962 4020 9. Polokwane Local 10. Makhado Local Postal: PO Box 111, Polokwane 0700 Postal: Private Bag X2596, Makhado 0920 Physical: Cnr Landros Mare & Bodenstein Streets, Physical: Civic Centre, Cnr Krogh & Erasmus Streets, Polokwane Makhado Tel: 015 290 2000/1 Tel: 015 519 3000 Fax: 015 290 2106 Fax: 015 516 1195 Web: www.polokwane.gov.za Web: www.makhado.gov.za 11. Greater Sekhukhune District 12. Musina Local Postal: Private Bag X8611, Groblersdal 0470 Postal: Private Bag X611, Musina 0900 Physical: 3 West Street, Groblersdal Physical: 21 Irwin Street, Musina Tel: 013 262 7300/1/2 Fax: 013 262 3688 Tel: 015 534 6100 Fax: 015 534 2513 Web: www.sekhukhune.gov.za Web: www.musina.gov.za 13. Elias Motsoaledi Local 14. Thulamela Local Postal: PO Box 48, Groblersdal 0470 Postal: Private Bag X5066, Thohoyandou 0950 Physical: 2nd Grobler Avenue, Groblersdal Physical: Thohoyandou Civic Centre, Old Agriven Tel: 013 262 3056 Building, Thohoyandou Fax: 013 262 4530 Tel: 015 962 7500 Web: www.eliasmotsoaledi.gov.za Fax: 015 962 4020 MEMBERS OF SALGA MUNICIPAL Web: www.thulamela.gov.za 15. Ephraim Mogale Local 16. Waterberg District Postal: PO Box 111, Marble Hall 0450 Postal: Private Bag X1018, Modimolle 0510 Physical: 13 Ficus Street, Marble Hall Physical: Harry Gwala Street, Modimolle Tel: 013 261 8400 Tel: 014 718 3300 Fax: 013 261 2985 Fax: 014 717 3886 Web: www.ephraimmogalelm.gov.za Web: www.waterberg.gov.za

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SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 Limpopo 17. Fetakgomo/Greater Tubatse Local 18. Bela-Bela Local Postal: PO Box 818, Apel 0739 Postal: Private Bag X1609, Bela-Bela 0480 Physical: Stand No.1, Mashung Ga-Nkwana, Physical: Chris Hani Drive, Bela-Bela Fetakgomo Tel: 014 736 8000 Tel: 015 622 8000 Fax: 014 736 3288 Fax: 015 622 8026 Web: www.belabela.gov.za 19. Makhuduthamaga Local 20. Lephalale Local Postal: Private Bag X434, Jane Furse 1085 Postal: Private Bag X136, Lephalale 0555 Physical: Stand 1, Groblersdal Road, Jane Furse Physical: Cnr Joe Slovo Street & Douwater Avenue, Tel: 013 265 1177/1262 Civic Centre, Onverwacht Fax: 013 265 1076 Tel: 014 763 2193 Web: www.makhuduthamaga.gov.za Fax: 014 763 5662 Web: www.lephalale.gov.za 21. Mopani District 22. Lim 368 Local Postal: Private Bag X9687, Giyani 0826 Postal: Private Bag X340, Mookgophong 0560 Physical: Government Building, Main Road, Giyani Physical: Cnr Nelson Mandela Street & Sixth Avenue, Tel: 015 811 6300 Mookgophong Fax: 015 812 4302 Tel: 014 743 6600 Web: www.mopani.gov.za Fax: 014 743 2434 23. Ba-Phalaborwa Local 24. Mogalakwena Local Postal: Private Bag X01020, Phalaborwa 1390 Postal: PO Box 34, Mokopane 0600 Physical: Civic Centre, Nelson Mandela Drive, Physical: 54 Retief Street, Mokopane Phalaborwa Tel: 015 491 9600 Tel: 015 780 6302 Fax: 015 491 9755 Fax: 015 781 0726 Web: www.mogalakwena.gov.za Web: www.ba-phalaborwa.gov.za 25. Greater Giyani Local 26. Thabazimbi Local Postal: Private Bag X9559, Giyani 0826 Postal: Private Bag X530, Thabazimbi 0380 Physical: BA 59/2 Giyani Main Road, Opposite Physical: 7 Rietbok Street, Thabazimbi Nkensani Hospital, Giyani Tel: 014 777 1525 Tel: 015 811 5500 Fax: 014 777 1531 Fax: 015 812 2068 Web: www.thabazimbi.gov.za Web: www.greatergiyani.gov.za

27. Greater Letaba Local Postal: PO Box 36, Modjadjiskloof 0835 Physical: Civic Centre, 44 Botha Street, Modjadjiskloof Tel: 015 309 9246/9248 Fax: 015 309 9419 Web: www.greaterletaba.gov.za

Mpumalanga 1. Ehlanzeni District 2. Lekwa Local Postal: PO Box 3333, Mbombela 1200 Postal: PO Box 66, Standerton 2430 Physical: 8 Van Niekerk Street, Mbombela Physical: Cnr Mbonani Mayisela & Dr Beyers Naude Tel: 013 759 8500 Streets, Standerton Fax: 013 755 8539 Tel: 017 712 9600 Web: www.ehlanzeni.gov.za Fax: 017 712 6808 Web: www.lekwalm.gov.za

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SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 Mpumalanga 3. Bushbuckridge Local 4. Mkhondo Local Postal: Private Bag X9308, Bushbuckridge 1280 Postal: PO Box 23, eMkhondo 2380 Physical: Opposite Mapulaneng DLTC Physical: 33 Mark & De Wet Streets, eMkhondo Tel: 013 799 1851/7 Tel: 017 826 8100 Fax: 013 799 1865 Fax: 017 826 3129 Web: www.bushbuckridge.gov.za Web: www.mkhondo.gov.za 5. City of Mbombela Local 6. Msukaligwa Local Postal: PO Box 33, Barberton 1300 Postal: PO Box 48, Ermelo 2350 Physical: Cnr General & De Villiers Streets, Physical: Cnr Taute & Kerk Streets, Ermelo Barberton Tel: 017 801 3500 Tel: 013 712 8800 Fax: 017 801 3851 Fax: 013 712 5120/8888 Web: www.msukaligwa.gov.za 7. Nkomazi Local 8. Nkangala District Postal: Private Bag X101, Malalane 1320 Postal: PO Box 437, Middelburg 1050 Physical: 9 Park Street, Malalane Physical: 2A Walter Sisulu Street, Middelburg Tel: 013 790 0245 Tel: 013 249 2000 Fax: 013 790 0886 Fax: 013 249 2087 Web: www.nkomazi.gov.za Web: www.nkangaladm.gov.za 9. Thaba Chweu Local 10. Dr JS Moroka Local Postal: PO Box 61, Mashishing 1120 Postal: Private Bag X4012, Siyabuswa 0472 Physical: Cnr Central & Viljoen Streets, Mashishing Physical: 2601/3 Bongimfundo Street, Siyabuswa Tel: 013 235 7300 Tel: 013 973 1101 Fax: 013 235 1108 Fax: 013 973 0974/2138 Web: www.thabachweu.gov.za Web: www.moroka.gov.za 11. Gert Sibande District 12. Emakhazeni Local Postal: PO Box 1748, Ermelo 2350 Postal: PO Box 17, eMakhazeni 1100 Physical: Cnr Joubert & Oosthuise Streets, Ermelo Physical: 25 Scheepers Street, eMakhazeni Tel: 017 801 7000 Tel: 013 253 7600 Fax: 017 801 1207 Fax: 013 253 2440 Web: www.gsibande.gov.za Web: www.emakhazeni.gov.za 13. Chief Albert Luthuli Local 14. Emalahleni Local Postal: PO Box 24, Carolina 1185 Postal: PO Box 3, eMalahleni 1035 Physical: 28 Kerk Street, Carolina Physical: Civic Centre, Cnr Mandela & Arras Streets, Tel: 017 843 4000 eMalahleni Fax: 017 843 4001 Tel: 013 690 6911 Web: www.albertluthuli.gov.za Fax: 013 690 6207 Web: www.emalahleni.gov.za 15. Dipaleseng Local 16. Steve Tshwete Local Postal: Private Bag X10005, Balfour 2410 Postal: PO Box 14, Middelburg 1050 Physical: Cnr Johnny Makoena Drive & Themba Physical: Cnr Walter Sisulu Street & Wanderers Shozi Street, Balfour Avenue, Middelburg Tel: 017 773 0055 Tel: 013 249 7000 Fax: 017 773 0169 Fax: 013 243 2550 Web: www.dipaleseng.gov.za Web: www.stevetshwetelm.gov.za MUNICIPAL MEMBERS OF SALGA MUNICIPAL 17. Dr Pixley Ka Isaka Seme Local 18. Thembisile Hani Local Postal: Private Bag X9011, Volksrust 2470 Postal: Private Bag X4041, eMpumalanga 0458 Physical: Cnr Adelaide Tambo Street & Dr Nelson Physical: Stand 24 Kwaggafontein C, eMpumalanga Mandela Drive, Volksrust Tel: 013 986 9100 Tel: 017 734 6100 Fax: 013 986 0995 Fax: 086 630 2209 Web: www.thembisilehanilm.gov.za Web: www.pixleykaseme.gov.za

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SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 Mpumalanga 19. Govan Mbeki Local 20. Victor Khanye Local Postal: Private Bag X1017, Secunda 2302 Postal: PO Box 6, Delmas 2210 Physical: Horwood Street, Secunda CBD Physical: Cnr Samuel & Van der Walt Streets, Tel: 017 620 6000 Delmas Fax: 017 634 8019 Tel: 013 665 6000 Web: www.govanmbeki.gov.za Fax: 013 665 2913 Web: www.victorkhanyelm.gov.za

Northern Cape 1. Frances Baard District 2. Pixley Ka Seme District Postal: Private Bag X6088, Kimberley 8300 Postal: Private Bag X1012, De Aar 7000 Physical: 51 Drakensberg Avenue, Carters Glen, Physical: Culvert Road, De Aar Kimberley Tel: 053 631 0891 Tel: 053 838 0911 Fax: 053 631 2529 Fax: 053 861 1538 Web: www.pksdm.gov.za Web: www.francesbaard.gov.za 3. Dikgatlong Local 4. Emthanjeni Local Postal: Private Bag X5, Barkly West 8375 Postal: PO Box 42, De Aar 7000 Physical: 33 Campbell Street, Barkly West Physical: 45 Voortrekker Street, De Aar Tel: 053 531 6500 Tel: 053 632 9100 Fax: 053 531 0624 Fax: 053 631 0105 Web: www.dikgatlong.co.za Web: www.emthanjeni.co.za 5. Magareng Local 6. Kareeberg Local Postal: PO Box 10, Warrenton 8530 Postal: PO Box 10, Carnarvon 8925 Physical: Magrieta Prinsloo Street, Warrenton Physical: Hanau Street, Carnarvon Tel: 053 497 3111 Tel: 053 382 3012 Fax: 053 497 4514 Fax: 053 382 3142 Web: www.magareng.gov.za Web: www.kareeberg.co.za 7. Phokwane Local 8. Renosterberg Local Postal: Private Bag X3, Hartswater 8570 Postal: PO Box 112, Petrusville 8770 Physical: 24 Hertzog Street, Hartswater Physical: 555 School Street, Petrusville Tel: 053 474 9700 Tel: 053 663 0041 Fax: 053 474 1768 Fax: 053 663 0180 Web: www.phokwane.gov.za Web: www.renosterbergmunicipality.gov.za 9. Sol Plaatje Local 10. Siyancuma Local Postal: Private Bag X5030, Kimberley 8300 Postal: PO Box 27, Douglas 8730 Physical: Sol Plaatje Drive, Kimberley Physical: 7 Charl Street, Douglas Tel: 053 830 6911/6100 Tel: 053 298 1810 Fax: 053 833 1005 Fax: 053 298 3141 Web: www.solplaatje.org.za Web: www.siyancuma.gov.za 11. John Taolo Gaetsewe District 12. Siyathemba Local Postal: PO Box 1480, Kuruman 8460 Postal: PO Box 16, Prieska 8940 Physical: 4 Federale Mynbou Street, Kuruman Physical: Victoria Street, Prieska Tel: 053 712 8700 Tel: 053 353 5300 Fax: 053 712 2502 Fax: 053 353 1386 Web: www.taologaetsewe.gov.za Web: www.siyathemba.gov.za 13 Ga-Segonyana Local 14. Thembelihle Local Postal: Private Bag X1522, Kuruman 8460 Postal: Private Bag X3, Hopetown 8750 Physical: Cnr Voortrekker & School Streets, Physical: Church Street, Hopetown Kuruman Tel: 053 203 0005/0008 Tel: 053 712 9300 Fax: 053 203 0490 Fax: 053 712 3581 Web: www.thembelihlemunicipality.gov.za Web: www.ga-segonyana.gov.za

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SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 Northern Cape 15. Gamagara Local 16. Ubuntu Local Postal: PO Box 1001, Kathu 8446 Postal: Private Bag X329, Victoria West 7070 Physical: Cnr Frikkey Meyer & Hendrik Van Eck Physical: 78 Church Street, Victoria West Roads, Civic Centre, Kathu Tel: 053 621 0026 Tel: 053 723 6000 Fax: 053 621 0368 Fax: 053 723 2021 Web: www.ubuntu.gov.za Web: www.gamagara.co.za 17. Joe Morolong Local 18. Umsobomvu Local Postal: Private Bag X117, Mothibistad 8474 Postal: Private Bag X6, Colesberg 9795 Physical: D320 Cardington Road, Churchill Village, Physical: 21A Church Street, Colesberg Mothibistad Tel: 051 753 0777 Tel: 053 773 9300 Fax: 053 773 9350 Fax: 051 753 0574 Web: www.joemorolong.gov.za Web: www.umsobomvumun.co.za 19. Namakwa District 20. ZF Mgcawu District Postal: Private Bag X20, Springbok 8240 Postal: Private Bag X6039, Upington 8800 Physical: Hendrik J Visser Building, Van Riebeeck Physical: Cnr Hill & Le Roux Streets, Upington Street, Springbok Tel: 054 337 2800 Tel: 027 712 8000 Fax: 054 337 2888 Fax: 027 712 8040 Web: www.zfm-dm.co.za Web: www.namakwa-dm.gov.za 21. Hantam Local 22. !Kheis Local Postal: Private Bag X14, Calvinia 8190 Postal: PO Box 176, Groblershoop 8850 Physical: Hope Street, Calvinia Physical: 97 Oranje Street, Groblershoop Tel: 027 341 8500 Tel: 054 833 9500 Fax: 027 341 8501 Fax: 054 833 9509 Web: www.hantam.gov.za Web: www.kheis.co.za 23. Kamiesberg Local 24. Dawid Kruiper Local Postal: Private Bag X200, Garies 8220 Postal: PO Box 178, Mier 8811 Physical: 22 Main Street, Garies Physical: 63 Loubosweg, Mier Tel: 027 652 8000 Tel: 054 531 0019 Fax: 027 652 8001 Fax: 054 531 0019 Web: www.kamiesbergmun.co.za 25. Karoo Hoogland Local 26. Kai !Garib Local Postal: Private Bag X03, Williston 8920 Postal: Private Bag X6, Kakamas 8870 Physical: 2 Mulder Street, Williston Physical: 9 11th Avenue, Kakamas Tel: 053 391 3003 Tel: 054 461 6400 Fax: 053 391 3294 Fax: 054 461 6401 Web: www.karoohoogland.gov.za Web: www.kaigarib.gov.za 27. Khai-Ma Local 28. Kgatelopele Local Postal: PO Box 108, Pofadder 8890 Postal: PO Box 43, Danielskuil 8405 Physical: New Street, Pofadder Physical: Baker Street, Danielskuil Tel: 054 933 1000 Tel: 053 384 8600 Fax: 054 933 0252 Fax: 053 384 0326 Web: www.kgatelopele.gov.za MUNICIPAL MEMBERS OF SALGA MUNICIPAL 29. Nama Khoi Local 30. Tsantsabane Local Postal: PO Box 17, Springbok 8240 Postal: PO Box 5, Postmasburg 8420 Physical: 4 Namakwa Street, Springbok Physical: 13 Springbok Street, Postmasburg Tel: 027 718 8100 Tel: 053 313 7300 Fax: 027 712 1635 Fax: 053 313 1602 Web: www.namakhoi.gov.za Web: www.tsantsabane.co.za

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SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 Northern Cape 31. Richtersveld Local Postal: Private Bag X113, Port Nolloth 8280 Physical: Main Road, Port Nolloth Tel: 027 851 1111 Fax: 027 851 1101 Web: www.richtersveld.gov.za

North West 1. Bojanala Platinum District 2. Greater Taung Local Postal: PO Box 1993, Rustenburg 0300 Postal: Private Bag X1048, Taung 8580 Physical: Cnr Beyers Naude & Fatima Bhayat Drives, Physical: Main Road, Taung Station, Taung Rustenburg Tel: 053 994 9400 Tel: 014 590 4500 Fax: 053 994 3917 Fax: 014 592 6085 Web: www.greatertaung.gov.za Web: www.bojanala.gov.za 3. Kgetlengrivier Local 4. Kagisano-Molopo Local Postal: PO Box 66, Koster 0348 Postal: Private Bag X522, Ganyesa 8613 Physical: Cnr Smuts & De Wit Streets, Koster 3K\VLFDO0XQLFLSDO2ƯFHV 1H[WWR*DQ\HVD+HDOWK Tel: 014 543 2004 Clinic), Ganyesa Fax: 014 543 2480 Tel: 053 998 4455 Web: www.kgetlengrivier.gov.za Fax: 053 998 3711 Web: www.kmlm.gov.za 5. Madibeng Local 6. Lekwa-Teemane Local Postal: PO Box 106, Brits 0250 Postal: PO Box 13, Christiana 2680 Physical: 53 Van Velden Street, Brits Physical: Cnr Robyn & Dirkie Uys Streets, Christiana Tel: 012 318 9100/9500/9215 Tel: 053 441 2206 Fax: 012 318 9665 Fax: 053 441 3735 Web: www.madibengweb.co.za Web: www.lekwateemane.co.za 7. Moretele Local 8. Mamusa Local Postal: Private Bag X367, Makapanstad 0404 Postal: PO Box 5, Schweizer-Reneke 2780 Physical: 4065 B, Mathibestad, Makapanstad Physical: 2 Schweizer Street, Schweizer-Reneke Tel: 012 716 1300/1000 Tel: 053 963 1331 Fax: 012 716 9999 Fax: 053 963 2474 Web: www.moretele.org.za Web: www.mamusa.gov.za 9. Moses Kotane Local 10. Naledi Local Postal: Private Bag X1011, Mogwase 0314 Postal: PO Box 35, Vryburg 8600 Physical: Stand No.935, Railway Road, Unit 3, Physical: 19A Market Street, Vryburg Mogwase, 0314 Tel: 053 928 2200 Tel: 014 555 1300 Fax: 053 927 3482 Fax: 014 555 6368 Web: www.naledilocal.co.za Web: www.moseskotane.gov.za 11. Rustenburg Local 12. Ngaka Modiri Molema District Postal: PO Box 16, Rustenburg 0300 Postal: Private Bag X2167, Mahikeng 2745 Physical: 159 Nelson Mandela & Beyers Naude Physical: Cnr Carrington Street & 1st Avenue, Streets, Rustenburg Industrial Site, Mahikeng Tel: 014 590 3111 Tel: 018 381 9400 Fax: 014 590 3481 Fax: 018 381 0561 Web: www.rustenburg.gov.za Web: www.nmmdm.gov.za

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SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 North West 13. Dr Kenneth Kaunda District 14. Ditsobotla Local Postal: Private Bag X5017, Klerksdorp 2570 Postal: PO Box 7, Litchtenburg 2740 Physical: Civic Centre, Patmore Road, Orkney Physical: Cnr Nelson Mandela Drive & Transvaal Tel: 018 473 8000 Street, Litchtenburg Fax: 018 473 2523 Tel: 018 633 3800 Web: www.kaundadistrict.gov.za Fax: 018 632 5247 Web: www.ditsobotla.co.za 15. City of Matlosana Local 16. Mahikeng Local Postal: PO Box 99, Klerksdorp 2570 Postal: Private Bag X63, Mmabatho 2735 3K\VLFDO&QU%UDDPƬVKHU 257DPER6WUHHWV Physical: Cnr University Drive & Hector Peterson Klerksdorp Street, Mmabatho Tel: 018 487 8000 Tel: 018 389 0111 Fax: 018 464 1780 Fax: 018 384 4830 Web: www.matlosana.gov.za :HEZZZPDƬNHQJJRY]D 17. Maquassi Hills Local 18. Ramotshere Moiloa Local Postal: Private Bag X3, Wolmaransstad 2630 Postal: PO Box 92, Zeerust 2865 Physical: 19 Kruger Street, Wolmaransstad Physical: Cnr President & Coetzee Streets, Zeerust Tel: 018 596 1067 Tel: 018 642 1081 Fax: 018 596 1555 Fax: 018 642 1175 Web: www.maquassi-hills.co.za Web: www.ramotshere.gov.za 19. Tlokwe/Ventersdorp Local 20. Ratlou Local Postal: PO Box 113, Potchefstroom 2520 Postal: Private Bag X209, Madibogo, 2772 Physical: Cnr Sol Plaatje & Wolmarans Streets, Physical: Delareyville Road, Next to Setlagole Potchefstroom Library, Stella Tel: 018 299 5111 Tel: 018 330 7000 Fax: 018 299 5555 Fax: 018 330 7047 Web: www.ratlou.gov.za 21. Dr Ruth Segomotsi Mompati District 22. Tswaing Local Postal: PO Box 21, Vryburg 8600 Postal: PO Box 24, Delareyville 2770 Physical: 50 Market Street, Vryburg 8601 Physical: Cnr General Delarey & Government Tel: 053 928 4700 / 053 927 0858 Streets, Delareyville Fax: 053 927 2401 Tel: 053 948 9400 Web: www.drrsmompatidm.gov.za Fax: 053 948 1500

Western Cape 1. City of Cape Town Metropolitan 2. Kannaland Local Postal: Private Bag X9181, Cape Town 8000 Postal: PO Box 30, Ladismith 6655 Physical: Civic Centre, 12 Hertzog Boulevard, Cape Physical: 32 Church Street, Ladismith Town Tel: 028 551 1023 Tel: 021 400 1111/0860 103 089 Fax: 028 551 1766 Fax: 021 400 1313/0860 103 090 Web: www.kannaland.gov.za Web: www.capetown.gov.za 3. Cape Winelands District 4. Knysna Local Postal: PO Box 100, Stellenbosch 7599 Postal: PO Box 21, Knysna 6570 MUNICIPAL MEMBERS OF SALGA MUNICIPAL Physical: 46 Alexander Street, Stellenbosch Physical: 5 Clyde Street, Knysna Tel: 086 126 5263 Tel: 044 302 6300 Fax: 021 887 2271 Fax: 044 302 6333 Web: www.capewinelands.gov.za Web: www.knysna.gov.za

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SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 Western Cape 5. Breede Valley Local 6. Mossel Bay Local Postal: Private Bag X3046, Worcester 6849 Postal: Private Bag X29, Mossel Bay 6500 Physical: 30 Baring Street, Worcester Physical: 101 Marsh Street, Mossel Bay Tel: 023 348 2600 Tel: 044 606 5000 Fax: 023 347 3671 Fax: 044 606 5062 Web: www.bvm.gov.za Web: www.mosselbay.gov.za 7. Drakenstein Local 8. Oudtshoorn Local Postal: PO Box 1, Paarl 7622 Postal: PO Box 255, Oudtshoorn 6620 Physical: Bergrivier Boulevard, Paarl Physical: Cnr Baron Van Rheede Street & Tel: 021 807 4500 Voortrekker Road, Oudtshoorn Fax: 021 870 1547 Tel: 044 203 3000 Web: www.drakenstein.gov.za Fax: 044 203 3104 Web: www.oudtmun.gov.za 9. Langeberg Local 10. Overberg District Postal: Private Bag X2, Ashton 6715 Postal: Private Bag X22, Bredasdorp 7280 Physical: 28 Main Street, Ashton Physical: 26 Long Street, Bredasdorp Tel: 023 615 8000 Tel: 028 425 1157 Fax: 023 615 1563 Fax: 028 425 1014 Web: www.langeberg.gov.za Web: www.odm.org.za 11. Stellenbosch Local 12. Cape Agulhas Local Postal: PO Box 17, Stellenbosch 7599 Postal: PO Box 51, Bredasdorp 7280 Physical: Plein Street, Stellenbosch Physical: 1 Dirkie Uys Street, Bredasdorp Tel: 021 808 8111/0861 808 911 Tel: 028 425 5500 Fax: 021 808 8026 Fax: 028 425 1019 Web: www.stellenbosch.gov.za Web: www.capeagulhas.gov.za 13. Witzenberg Local 14. Overstrand Local Postal: PO Box 44, Ceres 6835 Postal: PO Box 20, Hermanus 7200 Physical: 50 Voortrekker Street, Ceres Physical: Overstrand Civic Centre, Magnolia Street, Tel: 023 316 1854 Hermanus Fax: 023 316 1877 Tel: 028 313 8000 Web: www.witzenberg.gov.za Fax: 028 312 1894 Web: www.overstrand.gov.za 15. Central Karoo District 16. Swellendam Local Postal: Private Bag X560, Beaufort West 6970 Postal: PO Box 20, Swellendam 6740 Physical: 63 Donkin Street, Beaufort West Physical: 49 Voortrek Street, Swellendam Tel: 023 449 1000 Tel: 028 514 8500 Fax: 023 415 1253 Fax: 028 514 2694 Web: www.skdm.co.za Web: www.swellenmun.co.za 17. Beaufort West Local 18. Theewaterskloof Local Postal: Private Bag X582, Beaufort West 6970 Postal: PO Box 24, Caledon 7230 Physical: 112 Donkin Street, Beaufort West Physical: 6 Plein Street, Caledon Tel: 023 414 8020 Tel: 028 214 3300 Fax: 023 415 1373 Fax: 028 214 1289 Web: www.beaufortwestmun.co.za Web: www.twk.org.za 19. Laingsburg Local 20. West Coast District Postal: Private Bag X4, Laingsburg 6900 Postal: PO Box 242, Moorreesburg 7310 Physical: 2 Van Riebeeck Street, Laingsburg Physical: 58 Long Street, Moorreesburg Tel: 023 551 1019 Tel: 022 4338400 Fax: 023 551 1019 Fax: 086 692 6113 Web: www.laingsburg.gov.za Web: www.westcoastdm.co.za

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SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION | ANNUAL REPORT 2018/19 Western Cape 21. Prince Albert Local 22. Bergrivier Local Postal: Private Bag X53, Prince Albert 6930 Postal: PO Box 60, Piketberg 7320 Physical: 33 Church Street, Prince Albert Physical: 13 Church Street, Piketberg Tel: 023 541 1320 Tel: 022 913 6000 Fax: 023 541 1321 Fax: 022 913 1406 Web: www.princealbertmunicipality.com Web: www.bergmun.org.za 23. Eden District 24. Cederberg Local Postal: PO Box 12, George 6530 Postal: Private Bag X2, Clanwilliam 8135 Physical: 54 York Street, George Physical: 2A Voortrekker Road, Clanwilliam Tel: 044 803 1300 Tel: 027 482 8000 Fax: 086 555 6303 Fax: 027 482 1933 Web: www.edendm.co.za Web: www.cederbergmunicipality.co.za 25. Bitou Local 26. Matzikama Local Postal: Private Bag X1002, Plettenberg Bay 6600 Postal: PO Box 98, Vredendal 8160 Physical: 1 Sewell Street, Plettenberg Bay Physical: 37 Church Street, Vredendal Tel: 044 501 3000 Tel: 027 201 3300 Fax: 044 533 3485 Fax: 027 213 3238 Web: www.plett.gov.za Web: www.matzikamamun.co.za 27. George Local 28. Saldanha Bay Local Postal: PO Box 19, George 6530 Postal: Private Bag X12, Vredenburg 7380 Physical: 71 York Street, George Physical: 12 Main Road, Vredenburg 7380 Tel: 044 801 9111 Tel: 022 701 7000 Fax: 044 801 9105 Fax: 022 715 1518 Web: www.george.gov.za Web: www.sbm.gov.za 29. Hessequa Local 30. Swartland Local Postal: PO Box 29, Riversdale 6670 Postal: Private Bag X52, Malmesbury 7299 Physical: Van den Berg Street, Riversdale Physical: 1 Church Street, Malmesbury Tel: 028 713 8000 Tel: 022 487 9400 Fax: 086 401 5202 Fax: 022 487 9440 Web: www.hessequa.gov.za Web: www.swartland.org.za MUNICIPAL MEMBERS OF SALGA MUNICIPAL