ANNUAL REPORT 2018/2019 FINANCIAL YEAR 1 VISION: “A developmental city of heritage focusing on good governance, socio-economic development and upholding tradition to promote sustainable service delivery” Mission • To develop the institution and to facilitate institutional transformation • To provide infrastructure and services to all, with emphasis on rural communities, in a sustainable manner • To provide infrastructure and services to all, with emphasis on rural communities, in a sustainable manner • To develop and support sustainable local economic development, through focusing on tourism development, and incorporating the youth • To develop and support social development initiatives, particularly those focused on the youth and the vulnerable • To ensure good governance through leadership excellence and community participation • To ensure continued sound financial management • To ensure effective and efficient Land Use Management, taking cognizance of sound environmental practices 2 CONTENTS Description Vision and Mission 2 Chapter 1: Mayor’s Foreword and Executive Summary 5 - 16 Chapter 2: Governance 17 - 57 Chapter 3 Service Delivery Performance 58 - 91 Chapter 4: Organizational Development Performance 92 - 98 Chapter 5: Financial Performance 99 – 106 Chapter 6: Auditor-General’s Findings 107 - 123 Appendices Appendix A : Councillors; Committee Allocation and Council Attendance 124 - 127 Appendix B : Committee and Committee Purpose 128 - 136 Appendix C : Organogram of the Administrative Structure 137 - 138 Appendix D : Municipal applicable functions 139 - 144 Appendix E : Ward Reporting 145 - 160 Appendix F : Ward Information 161 - 163 Appendix G : Recommendations of the Municipal Audit Committee 164 - 173 Appendix H : Information of largest projects, agreements, contracts and any PPP 174 - 175 Appendix I : Service Provider Performance Schedule 176 - 178 Appendix J : Disclosure of financial interest: Senior Managers 179 - 180 Appendix K : Revenue Collection Performance 181 - 186 Appendix L : Conditional Grants Received: Excluding MIG 187 - 188 Appendix M : Capital Expenditure – New & Upgrade/Renewal Programmes: Including MIG 189 - 191 Appendix N : Capital projects current financial year, adjusted budget, actual in the current year & 192 - 193 variance Appendix O : Capital Projects per ward in the current financial year, projects complete / not complete 194 - 195 Appendix P : Service connection backlogs at schools and clinics with names and location 196 - 198 3 Appendix Q : Service backlogs experienced by the community where another sphere of government is 199 - 200 responsible for providing the service Appendix R : Organizations or persons in receipt of loans and grants 201 - 202 Appendix S : Declaration of returns not made in due time under MFMA Sec 71 203 - 204 Volume II : Audited Annual Financial Statements 205 - 238 4 CHAPTER 1 5 FOREWORD BY HIS WORSHIP THE MAYOR It is with great honour and humility to present the Ulundi Local Municipality’s Annual Report for 2018/2019 financial year. Again it is truly humbling to take stock on the previous year as it shows that the Municipality has maintained the highest standards of good governance as it has been doing in the past few years. We committed ourselves that we must double our efforts as the Municipality if we want to reduce service delivery backlogs thus, ensuring that Ulundi never regress but remains one of the fastest growing predominantly rural town which is attractive to investors. Working in partnership with other spheres of government and stakeholders we have been able advocate for equitable distribution of basic services, infrastructure and resources for our diverse communities, both in the urban area and in the rural areas. We will recall that, the Council of Ulundi concluded a Memorandum of Understanding with the Department of Energy and Minerals, and Eskom to intervene in some rural areas in assisting Eskom to fast track the implementation of electricity projects especially in communities that have been waiting for too long for their homes to be electrified. I have great pleasure to report that, this intervention has left some foot print more especial in the Amakhosi Areas. The Municipality increased the EPWP budget so that we could give more people job opportunities to meet with challenges of increasing unemployment as a result of the country’s economic decline. In order to make public services accessible to our communities through our Community Services Department of the Municipality has formed partnerships with other spheres of government in programmes such as the Operation Sukuma Sakhe (OSS), Local HIV/AIDS Council, Promotion of Children’s Rights Programme which improves public participation, and public awareness campaigns. The Municipality has also supported Indigent members of the community by offering burial support for those families on the Municipal Indigent register. In recognition of the service delivery constraints as pointed in Chapter 9 of the Medium-Term Service Framework of the National Development Plan. Ulundi Municipality has always maintained a good working relationship with its citizens as we always adhere to the Batho Pele Principles in the manner we serve our communities. Despite progress made the Municipality is acutely aware of the many challenges that await us such as strengthening people involvement in planning and decision-making process so that there is consensus; Strengthening of the Ward Committee System, accelerating and expanding quality and sustainable service delivery and focusing on revenue collection and customer care measures within the framework of Batho Pele. Finally, on behalf of Council I would like to extend a word of appreciation to the members of the communities we serve for entrusting us with this enormous responsibility of moving the barriers of poverty and the further development of Ulundi and we assure them that we are, together going to continue working hard to create a caring, strong and a vibrant Ulundi. I thank all internal and external stakeholders who continue to participate in all efforts to make Ulundi a better place to live in. Yours in Service Delivery Cllr M.W. Ntshangase MAYOR: ULUNDI LOCAL MUNICIPALITY 6 FOREWORD BY THE MUNICIPAL MANAGER The time has come to once again take stock of the events of the 2018/2019 financial year and to not only reflect on the achievements made, but also on the setbacks suffered, for it is through the lessons learned in our failures that we will be able to avoid the same pitfalls going forward. The accolades we have received as a municipality (e.g. being named the Best Run Municipality in the province), coupled with the positive audit outcomes we have been receiving during past few years, attest to our commitment to the municipality’s mission of being “A developmental city of heritage focusing on good governance, socio-economic development and upholding tradition to promote sustainable service delivery”. In terms of Section 121 of the Municipal Finance Management Act No. 56 of 2003, I, as the Accounting Officer of a municipality must prepare an annual report for each financial year the purpose of which is inter alia a) to provide a record of the activities of the municipality during the financial year; b) to provide a report of performance against the budget of the municipality for that financial year; and c) to promote accountability to the local community for the decisions made throughout the year by the municipality. It is significant to note that Ulundi Municipality has, over the past few years, been receiving “unqualified audit opinion” on its financials from the Auditor-General. The 2017/2018 audit opinion was no exception. We have worked very hard to ensure that even with the 2018/2019 audit which is due to commence soon, we obtain the same “unqualified audit opinion” if not a clean audit. This is evidence of our commitment to clean corporate governance, fiscal discipline and prudent financial management practices; and it also shows the progress we are making towards meeting the national target of “clean audit” for local government. What this means is that our internal controls are effective in enabling us to manage public monies including millions worth of grants in terms of the prescripts of the laws that govern the collection and spending of public funds. Our ability to collect revenue has enabled the municipality to provide uninterrupted quality services to the community of Ulundi (i.e. electricity, refuse collection, maintenance of roads and infrastructure, etc.) and to do more in terms of service delivery through the distribution of LED projects which has created job opportunities and has had a direct impact in the improvement in people’s lives hence Ulundi has seen no civil unrest in the form of service delivery protests contrary to what is currently happening in most parts of the country. We also established the Buy-Back Centre to which members of the community bring waste materials collected in town and other areas for payment. While this helps the people earn some income, it also contributes to keeping the town clean. Notwithstanding the aforementioned audit opinion, the Auditor-General made some findings which needed to be addressed. We have therefore put in place a compressive Action Plan with specific tasks to be performed with target dates in order to address each of those findings. Heads of Departments are required to act upon those tasks and report progress on a monthly basis. These findings in general relate to the “Material uncertainty relating