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City of Tshwane Metropolitan Municipality CITY OF TSHWANE METROPOLITAN MUNICIPALITY Consolidated Annual Financial Statements for the year ended 30 June 2020 City of Tshwane Metropolitan Municipality Consolidated Annual Financial Statements for the year ended 30 June 2020 General Information Legal form of entity Category A municipality in terms of Section 1 of the Local Government: Municipal Structures Act, 1998 (Act 117 of 1998) read with Section 155(1) of the Constitution of the Republic of South Africa, 1996 Nature of business and principal activities The principal activities of the City of Tshwane Metropolitan Municipality are to:- • Provide democratic and accountable government to the local communities; • Ensure sustainable service delivery to communities; • Promote social and economic development; • Provide local communities with equitable access to municipal services; • Promote and undertake development in the municipality; • Promote a safe and healthy environment; and • Encourage the involvement of communities in local government affairs. Executive Mayor Randall Williams Stevens Mokgalapa (resigned February 2020) Speaker Rachel Mathebe Chief Whip Christiaan van den Heever Mayoral committee Members of the mayoral committee Mare-Lise Fourie (MMC: Financial Services) Sakkie du Plooy (MMC: Health Services) Dana Wannenburg (MMC: Environment and Agriculture Management) Karen Meyer (MMC: Community Safety and Emergency Services) Phillip Nel(MMC: Utility Services) Sylvester Phokoje (MMC: Human Capital Management and Shared Services Thabisile Vilakazi(MMC: Community and Social Development Services) Bruce Lee(MMC: Economic Development and Spatial Planning) Mpho Mehlape-Zimu (MMC: Housing and Human Settlement) Dikeledi Selowa (MMC: Roads and Transport) Administration Body 22 March 2020- 30 June 2020 Lead Administrator Mpho Nawa Administrators Lesedi Mere Lefadi Makibinyane Rianda Kruger Lebogang Mahaye Gilberto Martins Thuli Mashanda Shiva Makotoko Mavela Alford Dlamini Mayoral committee July 2019- 21 March 2020 Anniruth Kissoonduth (Derrick) (MMC: Health Services) Abel Matshidiso Tau (MMC: Utility Services) Richard Moheta (MMC: Human Capital Management and Shared Services) Isak Petrus du Plooy (MMC: Community and Social Development Services) Isak Jacobus Pietersen (MMC: Economic Development and Spatial Planning) Samuel Maimane (MMC: Housing and Human Settlement) (from 3 July 2019 Sheila Lynn Senkubuge (Ms) (MMC: Roads and Transport)(resigned 30 November 2019) Grading of local authority Category A Grade 6 urban municipality (demarcation code - TSH) 1 City of Tshwane Metropolitan Municipality Consolidated Annual Financial Statements for the year ended 30 June 2020 General Information Accounting Officer Mmaseabata Mutlaneng (acting) Telephone: 012 358 4901 Chief Financial Officer (CFO) Umar Banda CA (SA) Telephone: 012 358 8100 Registered office Tshwane House 320 Madiba Street PRETORIA 0002 Postal address PO Box 408 PRETORIA 0002 Bankers ABSA Auditors Auditor-General South Africa (AGSA) Legislation governing the Municipality's operations Local Government: Municipal Finance Management Act, 2003 (Act 56 of 2003) Local Government: Municipal Systems Act, 2000 (Act 32 of 2000) Local Government: Municipal Structures Act, 1998 (Act 117 of 1998) Housing Act, 1997 (Act 107 of 1997) Constitution of the Republic of South Africa, 1996 Property Rates Act, 2004 (Act 6 of 2004) Division of Revenue Act, 2016 (Act 3 of 2016) Entities to be consolidated at year end Consistent with the prior financial year the following municipal entities will be included in the Consolidated Annual Financial Statements: Housing Company Tshwane NPC (Registration number 2001/029821/08) Tshwane Economic Development Agency Soc Ltd (TEDA) (Registration number 2006/019396/07) Sandspruit Works Association Soc Ltd (Registration number 1999/019160/08). Entities dormant/disestablished Was disestablished on 30 June 2017 in terms of a Council Resolution of 27 October 2016. Currently in the process of being deregistered. 2 City of Tshwane Metropolitan Municipality Consolidated Annual Financial Statements for the year ended 30 June 2020 Index The reports and statements set out below comprise the Consolidated Annual Financial Statements presented to Council: Page Accounting Officer's Responsibilities and Approval 6 Report of the Auditor General 6 Report of the chief financial officer 6 Statement of Financial Position 7 Statement of Financial Performance 8 Statement of Changes in Net Assets for the year ended 30 June 2020 9 Cash Flow Statement 10 Statement of Comparison of Budget and Actual Amounts 11 Statement of Comparison of Budget and Actual Amounts 12 - 17 Summary of significant accounting policies 18 - 49 Notes to the Consolidated Annual Financial Statements 50 - 209 The following supplementary information does not form part of the Consolidated Annual Financial Statements and is unaudited: Appendices: Appendix A: Schedule of External Loans 210 Appendix B: Analysis of Property, Plant and Equipment 212 Appendix C: Budgeted Financial Performance (Revenue and Expenditure by Standard Classification) 215 Appendix D: Budgeted Financial Performance (Revenue and Expenditure by Municipal Vote) 217 Appendix E: Budgeted Financial Performance (Revenue and Expenditure) 219 Appendix F: Budgeted Capital Expenditure by Vote, Standard Classification and Funding 221 Appendix G: Budgeted Cash Flows 223 Appendix H: Disclosure of Grants and subsidies paid in terms of Section 123 of the MFMA 3 City of Tshwane Metropolitan Municipality Consolidated Annual Financial Statements for the year ended 30 June 2020 Abbreviations AGSA Auditor-General South Africa AARTO Administrative Adjudication of Road Traffic Offences AUC Assets under construction BAC Bid Adjudication Committee CFO Chief Financial Officer COGTA Department of Co-operative Governance and Traditional Affairs COID Compensation for Occupational Injuries and Diseases COO Chief Operations Officer DBSA Development Bank of South Africa DME Department Minerals and Energy DoRA Division of Revenue Act DPSA Department of Public Service and Administration EDSM Electricity demand side management EPWP Expanded Public Works Programme FMG Finance Management Grant FSP Financial sustainability plan GDHS Gauteng Department of Human Settlement GDoT Gauteng Department of Transport GLGH Gauteng Local Government and Housing GRAP Generally Recognised Accounting Practice GSO Governance and Support Officer HCT Housing Company Tshwane HSDG Human Settlement Development Grant IAS International Accounting Standards IASB International Accounting Standards Board IDC Interactive Digital Centre IFRS International Financial Reporting Standards IGRAP Interpretations on Generally Recognised Accounting Practice INEP Integrated National Electrification Programme IPSAS International Public Sector Accounting Standards IPSASB International Public Sector Accounting Standards Board JCE(s) Jointly controlled entity(ies) LGSETA Local Government Sector Education and Training Authority 4 City of Tshwane Metropolitan Municipality Consolidated Annual Financial Statements for the year ended 30 June 2020 Abbreviations MEC Member of the Executive Council MFMA Local Government: Municipal Finance Management Act, 2003 (Act 56 of 2003) MPRA Municipal Property Rates Act mSCOA Municipal Standard Chart of Accounts NDPG Neighbourhood Development Partnership Grant NRW Non-revenue water PPE Property, plant and equpment PTNG Public Transport Network Grant PTNOG Public Transport Network Operating Grant RTMC Road Traffic Management Corporation RUL Remaining useful life SALA South African Local Authorities Pension Fund SALGA South African Local Government Association SHRA Social Housing Regulatory Authority STC Secondary Tax on Companies TEDA Tshwane Economic Development Agency TRT Tshwane Rapid Transit TTC Tsela Tshweu Consortium UIF Unemployment Insurance Fund UIFW Unauthorised, irregular, fruitless and wasteful expenditure USDG Urban Settlement Development Grant VAT Value-Added Tax WULA Water use licence application 5 City of Tshwane Metropolitan Municipality Consolidated Annual Financial Statements for the year ended 30 June 2020 Accounting Officer's Responsibilities and Approval The accounting officer is required by the Municipal Finance Management Act (Act 56 of 2003), to maintain adequate accounting records and is responsible for the content and integrity of the consolidated annual financial statements and related financial information included in this report. It is the responsibility of the accounting officer to ensure that the consolidated annual financial statements fairly present the state of affairs of the municipality as at the end of the financial year and the results of its operations and cash flows for the period then ended. The external auditors are engaged to express an independent opinion on the consolidated annual financial statements and was given unrestricted access to all financial records and related data. The consolidated annual financial statements have been prepared in accordance with Standards of Generally Recognised Accounting Practice (GRAP) including any interpretations, guidelines and directives issued by the Accounting Standards Board and as required by the MFMA. The consolidated annual financial statements are based upon appropriate accounting policies consistently applied and supported by reasonable and prudent judgements and estimates. The accounting officer acknowledges that she is ultimately responsible for the system of internal financial control established by the group and place considerable importance
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