The accounting officer is required by the Municipal Financial Management Act (Act 56 of 2003) to maintain adequate accounting records and is responsible for the content and integrity of the annual financial statements and related financial information included in this report. It is the responsibility of the accounting officer to ensure that the annual financial statements fairly reflect the state of affairs of the municipality as at the end of the financial year and the results of its operations and cash flow for the period then ended. The external auditors are responsible for reporting on the fair presentation of the annual financial statements.
The annual financial statements are prepared in accordance with the Standards of Generally Accepted Accounting Practices (GRAP). The accountant recognizes that he is ultimately responsible for the system of internal financial control established by the municipality and attaches great importance to maintaining a strong control environment. Based on information and explanations from management, the accountant believes that the system of internal controls provides reasonable assurance that the accounting records can be relied upon when preparing the annual financial statements.
The accounting officer has reviewed the municipality's cash flow forecast for the year to 30 June 2014 and, in the light of this review and the current financial position, is satisfied that the municipality has sufficient resources or has access to sufficient resources to continue in operational existence for the foreseeable future. The annual financial statements have been prepared on the basis of accounting policies applicable to a going concern.
SIGNIFICANT ACCOUNTING POLICIES TO THE ANNUAL FINANCIAL STATEMENTS
- BASIS OF PRESENTATION
- PRESENTATION CURRENCY
- SIGNIFICANT ESTIMATES, JUDGEMENTS AND ASSUMPTIONS
- Going Concern
- GOVERNMENT GRANT
- PROPERTY, PLANT & EQUIPMENT
- Recognition and Subsequent Measurement
- De-recognition, Sale & Disposal
- Depreciation
- INTANGIBLE ASSETS
- Research and Development
- Amortisation
- IMPAIRMENT OF FINANCIAL ASSETS
- LEASES
- FINANCIAL INSTRUMENTS
- FINANCIAL ASSETS
- FINANCIAL LIABILITIES
- Other financial liabilities
- INVENTORIES
- CASH AND CASH EQUIVALENTS
- PROVISIONS AND CONTINGENCIES
- EMPLOYEE BENEFITS
- Short-term employee benefits
- Termination Benefits
- Retirement benefits
- Defined contribution plans
- Post employment medical care benefits
- REVENUE RECOGNITION
- Revenue from exchange transactions
- Revenue from non-exchange transactions
- Transfer revenue
- Other
- VALUE ADDED TAX
- UNAUTHORISED EXPENDITURE
- IRREGULAR EXPENDITURE
- FRUITLESS AND WASTEFUL EXPENDITURE
- COMPARATIVE INFORMATION
- CONSTRUCTION OF ASSETS IN PROGRESS
- RELATED PARTIES
- HERITAGE ASSETS
All other expenses, including expenses for internally generated goodwill and trademarks, are recognized in the statement of financial operations as incurred. An impairment loss is recognized in the income statement when the book value of an individual asset or cash-generating unit exceeds its recoverable amount. Impairment losses are reversed if there has been a change in the estimates used to determine the recoverable amount of the asset or cash-generating unit.
Impairment losses are eliminated only to the extent that the book value of the asset does not exceed the book value that would have been recognized in the past. All subsequent recoveries of previously written-off amounts are credited directly to the financial performance statement. At this point, the cumulative gains or losses that have accumulated in equity are removed from equity as a reclassification adjustment and recognized in the statement of financial performance.
Financial assets are recognized in the municipality's statement of financial position when the municipality becomes a party to the contractual provisions of an instrument. Financial assets at fair value through profit or loss are shown at fair value, with any resulting gain or loss recognized in the Statement of Financial Performance. The net profit or loss recognized in the Statement of Financial Performance includes any dividend or interest earned on the financial asset.
Financial obligations are recognized in the municipality's statement of financial position when the municipality becomes a party to the instrument's contractual provisions. The municipality classifies its financial liabilities in the following categories: at fair value via the income statement and other financial liabilities. Financial liabilities at fair value via the income statement are recorded at fair value, with any resulting gains or losses recognized in the income statement.
Interest expenses are calculated using the effective interest rate method and are included among financial expenses in the income statement. Obligations for contributions to defined contribution pension plans are recognized as employee benefits expense in the statement of financial performance when they become due. Conditional grants, donations and financing were recognized as income in the statement of financial performance if the municipality fulfilled all criteria, conditions or obligations from the agreement/agreement.
Insofar as the criteria, conditions and obligations are not met, a liability is recognized in the balance sheet. Unconditional grants, donations and financing are recognized as revenue in the Statement of Financial Performance on the date of receipt or when the amount is receivable, whichever comes first.
Notes to the Financial Statements
Property, plant and equipment
Intangible assets
Construction of asset in progress
Inventories
Receivables from exchange transactions
VAT receivable
Cash and cash equivalents Cash and cash equivalents consist of
Unspent conditional grants and receipts
Provisions
Payables from exchange transactions
Revenue
Merchandise sale – The Municipality sells AVGAS and JET A1 fuel at Vereeniging Airport.
Cost of sales
Government grants and subsidies
Based on the allocations set out in the Revenue Sharing Act, no significant changes in the level of funding of state subsidies are expected in the next three financial years.
Other income
General expenses
Employee related costs
Remuneration of councillors
Debt impairment
Investment revenue
Depreciation and amortisation
Auditors’ remuneration
Contracted services
Grants and subsidies paid
Cash generated from (used in) operations
Commitments
These assumed expenditures relate to property and will be financed by available bank facilities, retained earnings, share rights issue, debenture issue, mortgage facilities, existing cash, internally generated funds, etc. Leases are concluded for an average period of three years, and rents are set for an average period of three years.
Contingencies Contingent Liability
Prior period errors
Risk management Financial risk management
Events after the reporting date
Unauthorised expenditure None incurred in reporting period
Additional disclosure in terms of Municipal Finance Management Act 1 PAYE and UIF & Skills levy
- Pension and Medical Aid Deductions
- Deviation from supply chain management regulations
- Deviation from supply chain management regulations
- Declaration of business conducted to close family members of persons in the service of the state
Otherwise, if there is no independent assessment, the risk control assesses the customer's credit quality taking into account his financial situation, past experience and other factors. Individual risk limits are determined on the basis of internal or external assessments in accordance with the limits set by the board of directors. The financial statements are prepared based on the accounting policies of the operating company.
This basis presupposes that there will be funds available to finance future operations and that realization of assets and settlement of liabilities, contingent liabilities and obligations will take place in ordinary operations. Pursuant to section 36 of the municipal supply chain management regulations, any deviation from the supply chain management policy must be approved/approved by the municipal manager and noted by the Council. 27636, issued on May 30, 2005, states that a supply chain management policy must provide for the procurement of goods and services through a competitive bidding process.
The reasons for these deviations were documented and reported to the accounting officer who considered them and. The following table lists the awards for members of the immediate family of persons in the service of the state and the bonuses for persons in the service of the state. Rewards for members of the immediate family of persons in the service of the state Company name Initials Last name and.
Awards to close family members of persons in the service of the state Company Name Initials Surname Designation and
Awards to persons in the service of the state
- Television sets in terms of the Television License Regulations under the Broadcasting act no 4 of 1999, as
- Related party transactions
Monthly declarations of actual wage costs were submitted, whereby the costs incurred over the year were as follows:.
Accumulated surplus
Statement of comparative budget and actual information
Statement of comparative and actual information (continued)
Any exceptional cases where it is impractical or impossible to follow the official procurement processes. The vehicle failed, the end user department called nissan to tow and diagnose the problem. It was impractical to get three quotes from three different dealers/panel beaters as the end user department did not know the problem.
R 15,985.57 In order to avoid future deviations for maintenance, panels of service providers will be created. The request was made very late during the tee time, it was impossible to follow normal procurement processes. The gate was disrupting the flow of traffic, it was urgent that it be repaired to avoid losses and/or possible theft.
The decision to go ahead with the opening of Taxi Rank Bophelong was only made late on Thursday last week after the taxi industry was threatening to disrupt the event. Moreover, the director and executive director were unable to attend the matter. There was a risk of health risk in Sebokeng Taxi Rank; there was a need to stop the leaking sewer pipes which were causing a health hazard.
R Four suppliers on the database were contacted to submit quotations, only one submitted due to time constraints. There are only two vendors registered to provide halaal catering service, only one was available for the day. The formal procurement process was not followed. Only one offer received from supplier database for air quality specialist to perform compliance monitoring.
1-Jun-13 The formal procurement process was followed, this was an urgent request for Flight and Car Hire to Durban. It was urgent for the procurement of Protective Clothing for Fresh Produce Market and Airport Staff Association. 4-Jun-13 Request for Printing of IDP document, the quote was above R30 000.00, Due to time constraints.
