Nature of business and main activities The main function of Msunduzi municipality is to provide basic services, ie. Msunduzi municipality is overseen by a mayor, deputy mayor, accountant, chairman, ten executive committee members and five general managers who contribute to day-to-day management.
Presentation of Consolidated Annual Financial Statements
Presentation currency
Going concern assumption
Significant judgements and sources of estimation uncertainty
Significant judgements and sources of estimation uncertainty (continued) Useful lives of Property Plant and Equipment
Inventories
Investments
Agricultural assets
Heritage assets
Heritage assets (continued) Initial measurement
Intangible assets
Intangible assets (continued)
Investment property
Investment property (continued) Fair value
Property plant and equipment
Property plant and equipment (continued)
Commitments
Leases
Conditional Grants and receipts
Impairment of non-cash-generating assets
Impairment of non-cash-generating assets (continued) Value in use
Impairment of non-cash-generating assets (continued) Redesignation
Impairment of cash-generating assets
Budget information
Comparative figures
First time adoption of Municipal Standard Chart of Accounts (“mSCOA”)
Employee benefits Short-term employee benefits
Employee benefits (continued) Actuarial assumptions
Employee benefits (continued)
Employee benefits (continued) Other post retirement obligations
Revenue from exchange transactions
Revenue from exchange transactions (continued) Rendering of services
Revenue from non-exchange transactions
Unauthorised expenditure
Fruitless and wasteful expenditure
Fruitless and wasteful expenditure (continued)
Irregular expenditure
Provisions and contingencies Provisions are recognised when
Housing development fund
Internal reserves
Internal reserves (continued) Self insurance reserve
Events after reporting date
Related parties
Use of estimates
Change in accounting policy, estimates and errors
Share capital / contributions from owners
Borrowing costs
Financial instruments
Financial instruments (continued) Classification
Financial instruments (continued)
New standards and interpretations
Standards and interpretations issued and adopted
Standards and interpretations issued , but not yet effective
The credit quality of cash at bank and short-term deposits, excluding cash on hand that is not overdue or impaired, can be assessed by reference to external credit ratings. Although credit quality can be assessed, the Municipality has not applied any methods to evaluate the credit quality. The municipality uses a prepaid electricity vendor, which provides a facility worth R 295,000 for the municipality to issue prepaid electricity vouchers.
Consumer debtors Gross balances
Inventories (continued)
Short term investment
Receivables from exchange transactions
Receivables from non-exchange transactions
Agricultural assets
Heritage assets
List of heritage assets where values cannot be determined 1. Collection of legal deposits in the Bessie Main Library. In 1916, the Natal Society Library (now Msunduzi Municipal Library - Bessie Main Library) was identified as one of 5 libraries in South Africa to be granted Legal Deposit status. This privilege helped make it one of South Africa's leading research and information libraries.
Legal deposit libraries play a unique and very important role as custodians, in perpetuity, of the cultural and informational wealth of this country. They should also make this information available, as widely as possible, to South African citizens. Due to the nature of the heritage asset class, the Department of Arts and Culture has confirmed that it has no monetary value as there is no active market.
Intangible assets
Investment property
The council has appointed Metgovis Integrated Property Solutions, DDP and Ducharme Consulting to seek deeds to confirm ownership of Msunduzi properties in fiscal year 2016/17. Due to incomplete property ownership information obtained from Windeed searches, 170 properties worth R13 489 890 were still under investigation at the end of the year. The investigation of assets that have not yet been verified at the end of the year will be completed in the 2017/18 financial year.
A register containing the information required by section 63 of the Municipal Finance Management Act is available for inspection at the municipality's registered office. The invested property is calculated according to GRAP 16 which includes land and buildings owned by the Municipality of Msunduzi. Investment property is not amortized, but is evaluated annually at the end of the year in order to determine their fair value as described in GRAP 16.
Property plant and equipment
Property plant and equipment (continued)
The Municipality of Msunduzi has chosen the cost model when accounting for properties, facilities and equipment with the exception of biological assets which are measured at fair value every year. For the financial periods 2013/2014 to 2016/17, the municipality has made a conditional assessment of the assets of the community and infrastructure, which culminated in the additional reduction of the remaining useful life of the assets. The municipality is required to measure the residual value of all items of property, facilities and equipment.
During the current financial year, the municipality reviewed the estimated useful lives and residual values of property, plant and equipment, where appropriate. The Municipality appointed Metgovis Integrated Property Solutions and Ducharme to carry out deed searches of all Msunduzi properties. The properties with a total value of R were derecognized in the asset register, due to the fact that they were registered in the name of private owners.
Other financial assets At amortised cost
Other financial liabilities At amortised cost
One Pangea Financials was appointed to provide the provision for the New England Road landfill closure program. The long service award provision is designed to ensure compliance with the requirements of the SALGA collective agreement. The assessment is based on the monthly salary rate as at 30 June 2017. Most members and Council contribute to the Natal Municipal Joint Pension and Provident Funds (NJMP), employees contribute to the South African Local Authority Pension Institution and the South African Pension Fund (SALALA) Fund and the Government Employees Pension Fund (GEPF).
For this reason, the "Contribution Reserve is kept equal to the current value of the shortfall in terms of the Circular PF117 of the Financial Services Board for the 5 years until 2015 when it is expected that the surcharge will be discontinued. The total amount for retirement due to ill health (less than ten years, the financial benefits given greater to the extent of the member's revaluation. relates to the part of the grant where the conditions are met.
VAT receivable and payable
Unfulfilled conditions and other possible events related to state aid were recognized as a liability in the statement of financial operations. Due to a delay in receiving funds in relation to the Pietermaritzburg Airport grant from the KZN Treasury, council funds were used to complete the projects. The funds were received after the end of the year in the months of July and August 2017 for reimbursement of the municipality's funds.
See Appendix E for details of unused conditional grants, receipts and transfers from national, provincial, government and other departments.
Accumulated surplus
Based on the approval by the strategic management committee on 7 April 2015, the CRR was created by transferring funds from the accumulated surplus of R.
Revaluation reserve
The increase in bad debts written off led to a decrease in interest on trade and other receivables Interest received - external investment. This is due to the increase in asset value due to new acquisitions and increased values of depreciation for replacement costs. This item was not budgeted for as a stand-alone item, but was budgeted under several individual items Operating Costs.
Operational revenue
Fines, penalties and forfeits
Funds received from Co-operative Governance and Traditional Affairs to be used to upgrade the Advertising House due to the structural deterioration of the building. Funds received from Co-operative Governance and Traditional Affairs for Manaye Area Precinct Upgrade. Funds received from the Department of Human Settlements to provide funding for the creation of sustainable human settlements.
Funding provided by Corporate Governance and Traditional Affairs for replacement of transformers and installation of solar powered street and traffic lighting. Funds received from Cooperative Governance and Traditional Affairs to upgrade pavements, street furniture, landscaping, pedestrians and special features. Funding provided by Co-operative Governance and Traditional Affairs for replacement of transformers and installation of solar powered street and traffic lighting.
Other transfers
Funds provided by the Provincial Department of Arts and Culture for the Tatham Art Gallery to provide financial support to the municipality with a focus on the development and maintenance of museum care and the preservation of our cultural heritage. Msunduzi Municipality has launched a debt recovery plan that focuses on the main categories of industrial, commercial and government debtors. The approach is based on the fact that these categories of debtors have a greater potential to pay their service debts which should improve the cash flow situation of the municipalities.
All prescribed debts will be reviewed for their existence and assessed to determine if the consumer is using the services and benefiting but not paying, with the understanding that the council will write off the debt. Implementation of credit control policies approved by Msunduzi Municipality Msunduzi Municipality has embarked on a debt recovery plan focusing on key categories of industrial, commercial and government debtors. The approach is based on the fact that these categories of debtors have a greater potential to pay serviced debts, which must be increased.
Employee related costs (continued)
Finance costs
Transfers and Subsidies Other subsidies
In the event of such a decision, the Accounting Officer shall report this to the next meeting of the Council for record. This incurred expenditure relates to the property and will be financed from available bank facilities, retained earnings, share rights issue, debenture issue, mortgage facilities, existing cash resources, internally generated funds, etc. Safe City NPC was created in partnership with the business community to fight crime in the city.
Electricity and water paid to Msunduzi Municipality Grants to close relatives of persons employed by the state. The director of the company is married to Ms Dube MEC for Local Government and Traditional Affairs Key Management Information.
Prior period errors
Investment properties (land) that are not owned by the municipality are incorrectly included in the Fixed Assets register. Writing inventory due to understatement while recording inventory on SAP. Receivables from non-exchange transactions During 2015/16, the municipality erroneously disclosed the balance of the prepayment to IDT as a non-exchange trade receivable.
In the 2014/2015 and 2015/2016 financial years, the interest received from the housing accreditation funding investment was not capitalized into the housing accreditation subsidy. Review of useful life for fully depreciated assets according to GRAP 17 and reclassification of tangible fixed assets into investment properties. The effect of this correction increased depreciation by R. Provisions for jubilee awards are made to ensure compliance with the requirements of the SALGA collective agreement. The estimate is based on the rate of monthly wages on 30 June 2016.
Irregular expenditure
The leave pay provision is created to ensure compliance with SALGA collective agreement requirements. It states that an employee may not have more than 48 days of annual leave to his credit at the end of a leave cycle. Certain comparative figures have been reclassified as a result of corrections made in relation to prior period errors and reclassification as a result of adoption of Municipal Standard Chart of Accounts (mSCOA).
Audited Restated Revenue
Revenue from exchange transactions
Taxation revenue
Transfer revenue
Expenditure
Fruitless and wasteful expenditure
Unauthorised expenditure
Electricity and water losses (continued)
Risk management Financial risk management
June 2016
- Going concern
Legal claim: The plaintiff is suing the municipality for the alleged wrongful arrest and detention of municipal traffic officers. Contract claim: The plaintiff is suing the municipality for money owed under a contract. Contact claim: The plaintiff is suing the municipality for funds owed under a contract.
Legal claim: The plaintiff is suing the municipality for allegedly being illegally arrested and detained by municipal traffic officers. Legal claim: The plaintiff is suing the Municipality for the alleged wrongful arrest and detention of. Legal claim: Plaintiff is suing the municipality for a shooting incident that resulted in the death.
