Segmental Statement of Financial Performance - Municipal Votes Actual versus Budget - Capital and Operating Expenditure (Votes) Disclosure of Grants and Subsidies. I am responsible for the preparation of these annual financial statements year ended 30 June 2016, which are set out on pages 1 to 137 in terms of Section 126 (1) of the Municipal Finance Management Act and which I have signed on behalf of the Municipality. The annual financial statements have been prepared in accordance with GRAP. I acknowledge that I am ultimately responsible for the system of internal financial control and that the system of internal control provides reasonable assurance that the financial records can be relied on. I have reviewed the Municipality’s cash flow forecast for the year to 30 June 2017 and is satisfied that the Municipality can continue in operational existence for the foreseeable future. The external auditors are responsible for independently reviewing and reporting on the Municipality’s financial statements. I certify that the remuneration of Councillors and in-kind benefits are within the upper limits of the framework envisaged in Section 219 of the Constitution, read with the Remuneration of Public Officer Bearers Act and the Minister of Provincial and Local Government's determination in accordance with this Act. CASH FLOW FROM OPERATING ACTIVITIES Receipts. COMPARISON OF ACTUAL FIGURES TO FINAL BUDGET. Approved Budget) (Adjustments) (Final Budget) ASSETS. COMPARISON OF ACTUAL FIGURES TO FINAL BUDGET. Approved Budget) (Adjustments) (Final Budget) REVENUE BY SOURCE. COMPARISON OF ACTUAL FIGURES TO FINAL BUDGET. CASH FLOW FROM OPERATING ACTIVITIES Receipts. Approved Budget) (Adjustments) (Final Budget) CASH FLOW FROM OPERATING ACTIVITIES.
TRANSITIONAL PROVISIONS
PRESENTATION CURRENCY
GOING CONCERN ASSUMPTION
COMPARATIVE INFORMATION .1 Prior year comparatives
Amended Accounting Policies
Effective dates determined
Effective dates not yet determined
The Municipality resolved to develop an accounting policy as set out in note 1.35 and also adopt the disclosure requirements of this Standard. The objective of this Standard is to prescribe the accounting for service concession arrangements by the grantor and a public sector entity. The objective of this Standard is to prescribe accounting requirements for the recognition, measurement, presentation and disclosure of statutory receivables.
INVESTMENT PROPERTY .1 Initial Recognition
Subsequent Measurement – Cost Model
INVESTMENT PROPERTY (CONTINUED) .3 Depreciation – Cost Model
Impairment
Derecognition
PROPERTY, PLANT AND EQUIPMENT .1 Initial Recognition
Subsequent Measurement - Cost Model
PROPERTY, PLANT AND EQUIPMENT (CONTINUED) .3 Depreciation
Impairment
PROPERTY, PLANT AND EQUIPMENT (CONTINUED)
Derecognition
INTANGIBLE ASSETS .1 Initial Recognition
INTANGIBLE ASSETS (CONTINUED)
Subsequent Measurement - Cost Model
Amortisation
INTANGIBLE ASSETS (CONTINUED) .4 Impairment
Derecognition
IMPAIRMENT OF NON-MONETARY ASSETS
Recoverable amount of Cash-generating assets
IMPAIRMENT OF NON-MONETARY ASSETS (CONTINUED) .2 Recoverable amount of Non-cash-generating assets
Impairment loss
Reversal of an impairment loss
INVENTORIES .1 Initial Recognition
Subsequent Measurement
INVENTORIES (CONTINUED)
EMPLOYEE BENEFITS
Post-Retirement Benefits
EMPLOYEE BENEFITS (CONTINUED)
Long-term Benefits .1 Long Service Awards
Short-term Benefits .1 Provision for Staff Leave
EMPLOYEE BENEFITS (CONTINUED) .3.3 Provision for Performance Bonuses
PROVISIONS
PROVISIONS (CONTINUED)
Municipality as Lessee .1 Finance Leases
Municipality as Lessor .1 Operating Leases
FINANCIAL INSTRUMENTS .1 Initial Recognition
Subsequent Measurement
FINANCIAL INSTRUMENTS (CONTINUED)
Impairment and uncollectability of financial assets
Derecognition of financial instruments .1 Financial assets
FINANCIAL INSTRUMENTS (CONTINUED) .4.2 Financial liabilities
Offsetting of financial instruments
STATUTORY RECEIVABLES
Initial Recognition
Subsequent Measurement
Impairment and uncollectability of statutory receivables
STATUTORY RECEIVABLES (CONTINUED)
Derecognition
CASH AND CASH EQUIVALENTS
RECEIVABLES
RECEIVABLES (CONTINUED)
TAXES (VALUE ADDED TAX)
PAYABLES AND ANNUITY LOANS
CONSUMER DEPOSITS
UNSPENT CONDITIONAL GOVERNMENT GRANTS AND UNSPENT PUBLIC CONTRIBUTIONS
UNSPENT CONDITIONAL GOVERNMENT GRANTS AND UNSPENT PUBLIC CONTRIBUTIONS (CONTINUED)
RESERVES
Capital Replacement Reserve (CRR)
Revenue from Non-Exchange Transactions
REVENUE (CONTINUED)
Revenue from Exchange Transactions
Contributed assets are recognised at fair value when such items of property, plant and equipment qualifies for recognition and become available for use by the Municipality. Services in-kind include services provided by individuals to the Municipality at no charge or where the Municipality has the right to use assets at no charge. Where the Municipality was unable to take the actual month's reading of certain consumers, a provisional estimate of consumption for that month will be created, based on consumption history.
REVENUE (CONTINUED) .2.5 Other Tariffs
UNAUTHORISED EXPENDITURE
IRREGULAR EXPENDITURE
FRUITLESS AND WASTEFUL EXPENDITURE
CONTINGENT LIABILITIES AND CONTINGENT ASSETS
CONTINGENT LIABILITIES AND CONTINGENT ASSETS (CONTINUED)
CAPITAL COMMITMENTS
EVENTS AFTER REPORTING DATE
RELATED PARTIES
SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS
Application of Directive 7
Impairment of Receivables
Useful lives and residual values
Impairment of non-monetary assets
SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS (CONTINUED)
- Post-Retirement and Long-term Benefits
- Provisions and Contingent Liabilities
- Financial assets and liabilities
- Revenue Recognition
Included in the outstanding balances are consumer debtors to the value of R R 746 778), who have made arrangements to repay their outstanding debt over a re- negotiated period. A credit period of 30 days are granted on initial recognition of the receivable, which is considered to be in line with industry norms. Prior Period Adjustment (Other Arrears) - Refer to note 43.01 Prior Period Adjustment (Payments in Advance) - Refer to note 43.01.
The Allowance for impairment of Receivables has been made for all consumer balances outstanding based on the payment ratio over 12 months. Based on these payment trends, management is satisfied that no further credit provision is required in excess of the current allowance. The risk of non-payment is further mitigated due to the large customer base over which the.
OPERATING LEASE ASSETS
OPERATING LEASE LIABILITIES
The loan was made to fund the upgrading of the fencing around building of this wellfare organisation. Based on the aforementioned and in line with the requirements of GRAP 1, Capitalised Restoration Cost is disclosed as a separate item on the face of the Statement of Financial Position. The carrying value of assets, which are pledged as security for outstanding liabilities, are included in the property, plant and equipment carrying value in note 9.
Equipment will be returned to the supplier at the end of the lease term when the contract is cancelled. Due to the short term nature of unspent public contributions, the carrying value approximates the fair value of the unspent public contribution at year-end. Unspent public contribution balances are recognised to the extent that conditions of the contribution are not yet met.
Due to the short term nature of unspent grant balances, the carrying value approximates the fair value of the unspent conditional grants at year-end. Performance bonuses are being paid to the Municipal Manager and Directors after an evaluation of performance by the council. The balance at year end represent to portion of the bonus that have already vested for the current salary cycle.
The current portion of rehabilitation provision relates to the landfill sites in the municipal area.
Long Service Awards
The discount rate used is a composite of all government bonds and is calculated using a technique is known as.
Other Pension Benefits
The Municipality requested detailed employee and pensioner information as well as information on the Municipality’s share of the Pension and Retirement Funds’. The fund administrator confirmed that assets of the Pension and Retirement Funds are not split per participating employer. Therefore, the Municipality is unable to determine the value of the plan assets as defined in GRAP 25.
As part of the Municipality’s process to value the defined benefit liabilities, the Municipality requested pensioner data from the fund administrator. The fund administrator claim that the pensioner data to be confidential and were not willing to share the information with the Municipality. Without detailed pensioner data the Municipality was unable to calculate a reliable estimate of the accrued liability in respect of pensioners who qualify for a defined benefit pension.
Discount rates specific to the nature of the provision is utilised to calculate the effect of time value of money. The first R 15 000 of the valuation on properties used only for residential purposes are exempted from property rates in terms of the Property Rates Act. Rebates can be defined as any income that the Municipality is entitled by law to levy, but in terms of Council's own policy opted not to collect it.
Monthly rates are payable by the 25th of the following month and annual rates are payable before 31 October.
Equitable Share
Financial Management Grant (FMG)
Municipal Systems Improvement Grant (MSIG)
Municipal Infrastructure Grant (MIG)
Skills Development Fund
National Electrification Programme (INEP)
Expanded Public Works Program (EPWP)
Library Grant
Proclaimed Road Subsidy
Housing Grants
Other Provincial Allocations
Total Grants
Mayoral Golf Day
OK Napier
Betonmeesters
Bredasdorp Steenwerke
Haasbekkie Creshe
Total
Rebates can be defined as any income that the Municipality is entitled to levy, but in terms of Council's own policy opted not to collect it. In terms of the requirements of GRAP 23 and IGRAP1, all fines issued during the year less any cancellations or reductions identified are recognised as revenue. The total employee related cost includes temporary workers funded from the Expanded Public Works Programme Grant, Financial Management Grant, Municipal Infrastructure Grant and internal funded job creation programmes over the festive season.
All Managers are appointed on a 5-year contract, except for the current Chief Financial Officer (Mr PJ van Biljon) who is appointed on a 3 and a half year contract. There are no post-employment or termination benefits payable to them at the end of the contract period. The Executive Mayor, Deputy Executive Mayor, Speaker and one mayoral committee member are full-time.
They are provided with secretarial support and an office each at the cost of the Council. Unbilled consumption incorrectly calculated on KVA users - Refer to note 43.14 Restatement of debt impairment on 30 June 2015 where more accurate data became available and less assumptions needs to be employed - Refer to note 43.14.
RECEIVABLES FROM NON-EXCHANGE TRANSACTIONS
OPERATING LEASE ASSETS
OPERATING LEASE LIABILITIES
CURRENT PORTION OF LONG-TERM RECEIVABLES
INVENTORY
LONG-TERM RECEIVABLES
PROPERTY PLANT AND EQUIPMENT
CURRENT PORTION OF LONG-TERM LIABILITIES
PAYABLES FROM EXCHANGE TRANSACTIONS
TAXES
LONG-TERM LIABILITIES
ACCUMULATED SURPLUS
STATEMENT OF FINANCIAL PERFORMANCE
STATEMENT OF FINANCIAL PERFORMANCE
COMPARABLE BASIS
MATERIAL VARIANCES
Actual discount rate relating to the landfill site provision (linked to this asset) lower than assumptions applied to unwind the provision in the current year. Assumptions relating to the unwinding of the landfill site provision higher than the actual results for the year under review. Deviation the result of lower than anticipated expenditure levels due to cost saving measures employed by the municipality.
Higher than anticipated Cash levels contribution to a higher level of Reserves that can be maintained. Budget adjustment mainly relates to overtime previously not fully budgeted for and finance charges on Employee Benefits allocated to the correct line item. Due to the sundry nature of this line item, the actual results of the prior year is used as basis for current year budget.
Increase in debtors balances due to an slight decrease in payment percentage not accounted for in budget. Increase in finance charges relating to the landfill site provision due to the significant increase in rehabilitation costs experienced during 2014/2015. Adjustment mainly relates to an increase in debt impairment on fines as a result of the increase in activity from a revenue generating point of view.
Lower than anticipated recovery from fines combined with a significant portion of outstanding money relating to asset sales included as part of operating activities.
UNAUTHORISED EXPENDITURE
FRUITLESS AND WASTEFUL EXPENDITURE
IRREGULAR EXPENDITURE
MATERIAL LOSSES
Salga Contributions [MFMA 125 (1)(b)]
PAYE, SDL and UIF [MFMA 125 (1)(c)]
PENSION AND MEDICAL AID CONTRIBUTIONS [MFMA 125 (1)(c)]
QUOTATIONS AWARDED - DEVIATIONS FROM SCM
OTHER NON-COMPLIANCE [MFMA 125(2)(e)]
Credit Risk
Currency risk (Market Risk)
Interest rate risk (Market Risk)
Liquidity risk
Other price risk (Market Risk)
Refer to note 4 for more detail relating to the fines and rates receivables, including any provision for impairment raised against the gross amounts disclosed above. Although this event is considered significant to the municipality, it does not impact on any other disclosure or amounts disclosed in the financial statements. Court case 2226/11 in which Verrewyde EiendomS BPK instituted a claim of R33 119 510 regarding erf 599 Waenhuiskrans against the municipality has been settled through an agreement by both parties that the property be sold, that the settlement amount be linked to the selling price which will not exceed R9,5 million and that this agreement be regarded as final settlement.
However the Waenhuiskrans Rate Payers Association lodged a dispute with the municipality against the final settlement agreement. All rates, service charges and other charges in respect of related parties are in accordance with approved tariffs that were advertised to the public. As the parent entity of the Agency, the municipality resolved during the 2012/13 financial year to de-register the company.
Due to the de-registration no consolidated financial statements are prepared for the financial year under review. The municipality does not have a permit or license for Waenhuiskrans landfill site currently in use and could be liable for a penalty in terms of section 24G of the Environmental Conservation Act. The municipality is in discussion with the Department of Environmental Affairs to address the outstanding issue.
In a matter between the Council and DA Civils CC the arbitrator ruled in favour of the municipality The Contractor representative did not accept this ruling and referred the matter to the Institute of Civil Engineering for further attention which is still not finalised.
