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Title: PRESENTATION TO SELECT COMMITTEE ON APPROPRIATIONS


1
PRESENTATION TO SELECT COMMITTEE ON
APPROPRIATIONS
16 October 2012
PRESENTATION BY Cllr NG HLONGWANE EXECUTIVE
MAYOR EMFULENI LOCAL MUNICIPALITY
2
CONTENTS
3
CONTEXT AND BACKGROUND
  • Municipal Assets Value R 9 billion
  • Municipal Budget
  • 2011/12 Financial Year R 3.7 billion
  • 2012/13 Financial Year R 4.5 billion
  • Municipal Jurisdiction( area size) 987.45
    Square KM
  • Water and Sanitation Coverage 98
  • Electricity Coverage 97
  • Portable Water Quality Compliance 100
  • Waste Water Discharge Compliance 97
  • Refuse Collection Coverage 100

4
Top 10 Challenges( institutional)
  • Unemployment Rate 45
  • Water and Sanitation Infrastructure Backlog
    R10 billion
  • Roads Infrastructure Backlog R9 billion
  • Electricity Backlog R2 billion
  • Payment Levels in Poor Areas 3
  • Outstanding Debt R2 billion
  • Cash Flow Unfavorable Status

5
Top 10 Challenges( institutional)
  • Water Losses R180 million Per Annum
  • Electricity Losses R20 million Per Annum
  • Billing Functionality

6
Some Key Indicators
MUNICIPALITY GEOGRAPHIC AREA MUNICIPAL BUDGET 2011/12 POPULATION of NATIONAL GVA
Buffalo City 2 527 km² R3.9 bn 880 000 2
Mangaung 6 604 km² R4.0 bn 850 000 2
Emfuleni 987 km² R3.7 bn 652 819 1.78
7
Budget Year on Year
  • Budget from 2003/04 to 2006/07 was not credible
    and reflected either a surplus or deficit
  • Growth in budget is noticed due to increase
    service delivery demands

8
Budget Year on Year
9
MUNICIPAL CASH FLOW STATUS
8
10
Cash Flow Status- Quarter ended September 2012

R R
Bank opening Balance Bank opening Balance 13,797,520
Total Receipts 1,084,477,600
Receipts 780,064,498
Grants  
Equitable Share 248,952,000
Other Grants receipted and spent 55,461,102

Less Expenditure Less Expenditure -1,207,746,079
Eskom 571,991,951
Rand Water 163,911,425
Personnel Costs 182,020,692
Other payables 289,822,012


Operating surplus/(Deficit) for the quarter Operating surplus/(Deficit) for the quarter -109,470,959
Overdraft Facility utilized Overdraft Facility utilized 109,470,959
  • Council raised R 150 million overdraft facility
    as a bridging finance during 2012/13 financial
    year. Included within the Expenditure, are
    accruals raised at year-end amounting to /- R
    300 million. Bulk services account to 60 of
    expenditure incurred.

11
Eskom Impact (R)
  • Eskom bill has a significant effect on the
    municipalitys cash flow
  • A R 150 million overdraft was raised as a
    bridging finance to address, among others, effect
    of Eskom bill

12
Performance on Electricity
13
Performance on Water
14
Financial Sustainability
  • Managing cash flow, debtors collections,
    distribution losses on electricity
  • and water and overall financial sustainability
    of the municipality

ACTION PLAN
  AUDITOR-GENERAL FINDINGS     PLANNED ACTION BY ELM     Stage     INTERNAL AUDIT COMMENT
Distribution losses on water were incurred due to aging infrastructure, burst pipes etc. Water loss reduction programme launched. Annual target of 2 water reduction has been set. Implementation ?
Distribution losses on water were incurred due to aging infrastructure, burst pipes etc. Smart Metering procurement in progress Procurement stage ?
15
Financial Sustainability (Cont)
  • Improving the debtors collection rate
  • Cash flow concerns due to debtors write off
  • Socio economic factors affecting payment rates

16
REVENUE,COLLECTIONS AND EXPENDITURE MANAGEMENT
15
17
STATEMENT OF FIN.. PERFORMANCE
     
STATEMENT OF FINANCIAL PERFORMANCE (30 JUNE 2012) STATEMENT OF FINANCIAL PERFORMANCE (30 JUNE 2012) STATEMENT OF FINANCIAL PERFORMANCE (30 JUNE 2012) STATEMENT OF FINANCIAL PERFORMANCE (30 JUNE 2012)
Description Annual Budget (R) Actual (R) Actual to Budget YTD
REVENUE      
Assessment Rates 364 497 441 351 966 028 97
Electricity Services 1 491 729 462 1 390 378 935 93
Water Services 553 766 019 492 337 050 89
Sewer Services 220 818 683 197 320 365 89
Refuse Services 98 916 159 96 346 276 97
Rent of Facilities Equipment 9 442 544 11 439 141 121
Interest Earned Outstanding Debtors 23 309 052 21 234 644 91
Total Billing 2 762 479 360 2 561 022 439 93
Other Income 1 012 197 109 998 871 858 99
Total Revenue 3 774 676 469 3 559 894 297 94
       
EXPENDITURE      
Personeel Cost 699 503 866 722 713 867 103
Remuneration - Councillors 30 960 598 25 133 151 81
Debt Impairment 293 420 256 314 129 108 107
Depreciation 129 684 958 732 772 994 565
Repairs And Maintenance 129 527 911 120 158 199 93
Interest Expense 10 246 139 19 106 887 186
Bulk Purchases Water 370 000 000 411 834 554 111
Bulk Purchases Elect 1 156 161 403 1 162 496 093 101
Contracted Services 88 917 389 83 289 231 94
  General Expenses 866 253 949 455 385 820 53
Capital Expenditure 364 369 940    
Total Expenditure 3 774 676 469 4 047 019 904 107
Surplus/(Deficit) - (487 125 607)  
Cost Drivers
  • Included in the Budget is R 364 million for
    capital expenditure, for which, its spending
    pattern is not reflected as the expense, as it
    has been capitalized, disclosed in the following
    slide. Also the depreciation increased materially
    due to the Fixed Assets unbundling process (GRAP
    17)

18
CAPITAL SPENDINGS (2011/12 FINANCIAL YEAR)
Funding Budgeted ( R ) Expenditure ( R ) Spent
MIG Counter Funding Projects 156,248,360 144,227,937 92
MIG Projects (Allocation Roll Over) 143,885,000 144,227,937 100.00
Council Funded Projects 64,236,580 37,720,844 59.00
Capital Budget Spending 364,369,940 326,176,718 76.29
  • The under-spending of council funded projects
    was contributed by the cash-flow restrictions.
    Most of the projects were rolled over into
    2012/13 financial years

19
Revenue (2011/12 Financial year)
  • The billed revenue on all services are on par
    with the budgeted billing for the current
    financial year, except for rental of facilities
    at 121.

20
Expenditure (2011/2012 Financial Year)
  • The realized expenditure is sitting at 12 above
    the realized revenue and 7 above the budget. Due
    to the revaluation process of the Fixed Assets
    (GRAP 17), our assets were re-stated at the net
    book value of R 13 billion. This led to an
    increase on Depreciation from anticipated R 130
    million to R 733 million in 2011/12 financial
    year.

21
2011/12 Financial Year
  • GRANTS SPENDINGS

22
National Grants (2011/12 financial year)
    Opening Balance Total Receipts Total Expenditure Surrendered Spent Closing Balance
Restructuring Grant   18,249,475 0 0 18,249,475 0 0
Equitable Share   0 539,842,000 539,842,000 0 100 0
Financial Management Grant   750,000 8,750,000 8,750,000 750,000 100 0
Regional Sewer Scheme Grant   -1,862,813 26,298,099 23,300,618 0 95 1,134,668
National Electrification Grant   673,525 16,256,000 16,256,000 673,525 100 0
Electricity Demand Site Management Grant   0 6,000,000 3,912,860 0 65 2,087,140
Municipal Systems Improvement Grant   500,000 800,000 800,000 500,000 100 0
DWAF Grant   1,096,474 0 165,990 0 2 930,484
DACE Grant   728,627 500,000 0 0 0 1,228,627
EPWP Grant   1,290,258 3,049,000 6,734,674   100 -2,395,416
Sedibeng Regional Sewer Scheme Grant   9,953,530 11,553,375 12,396,780 0 58 9,110,125
Municipal Infrastructure Grant   17,242,937 126,985,000 126,985,000 0 88 17,242,937
    48,622,013 740,033,474 739,143,922 20,173,000 96 29,338,565
23
Provincial District Grants (2011/12 Financial
Year)
    Opening Balance Total Receipts Total Expenditure Surrendered Spent Closing Balance
Library Grant   2,802,216 7,200,000 7,206,589 0 72 2,795,627
HIV Aids Grant   37,346 524,160 561,506 0 100 0
Health Grant   68,239 0 68,239 0 100 0
Bontle - ke - Botho Grant   743,368 4,090 930 0 0 746,528
Ex- District Grant   2,704,127 0 0 0 0 2,704,127
Social Development Grant   5,102,498 9,000,000 14,102,498 0 100 0
Sports Grant   1,118,853 0 558,722 0 50 560,131
Debtors Book Project (ALOECAP)   0 2,300,000 2,080,048 0 90 219,952
Asset Management Project (GRAP 17)   0 1,800,000 1,800,000 0 100 0
Security services subsidy(evictions)   0 26,330,339 26,330,339 0 100 0
MSIG Sedibeng   50,000 0 0 0   50,000
    12,626,647 47,158,589 52,708,871 0 88 7,076,365
24
MUNICIPAL BUDGET
23
25
Budget preparation process
  • Establishment of effective Budget Steering
    Committee
  • Approval of the IDP and Budget Process Plan,
    highlighting
  • Key Stakeholders
  • Key deadlines
  • Consultation processes
  • Mid term budget and performance review-January
    2012
  • Adjustment budget 2011/12 February 2012
  • Draft 2012/13 Multiyear Budget - March 2012
  • Public participation process
  • Final MTREF Budget adopted 28 May 2012

26
Subsequent Activities considered
  • Experienced Water losses in 2010/11
  • Inflation hikes, guidelines from budget circulars
  • IDP priorities
  • Input costs v/s Output costs (Tariffs)
  • Achieved collection rates
  • True Cost of Service Delivery
  • Direct cost
  • Indirect overhead cost

27
Tariff Modelling
  • Policy Shifts
  • Recognition of Indigents Property value below
    R150 000
  • Free Basic Water Only to Indigents
  • Equalisation of tariffs
  • Restructuring of Water Tariffs Encourage water
    saving
  • Residential Sewerage tariffs dependent on water
    consumption

28
Tariff Modelling- 2012/13 Fin... Year
  • Tariff structures approved by council together
    with Budget-May 2012
  • Tariff Increases approved with the Budget were
  • Property Rates 10
  • Electricity 13.3
  • Water 21.6 (13.5 8.1)
  • Sewerage 19.37 (13.5 70 of 8.1)
  • Refuse 10
  • Sundry Tariffs 10
  • Eskom Tariff increase 13.5
  • Rand Water Tariff increase 13.5

29
Tariff Modelling - WATER
  • Business - Restructuring of tariffs proposed -
    Water
  • Inclining block tariff (DBT) for water
  • IBT in compliance with Circular 58 and s10 of the
    Water Services Act
  • Circular 58 prescribes IBT
  • S10 (2)(d) of the Water Services Act tariffs
    should promote or achieve water conservation
  • Tariffs cheaper for initial usage but higher with
    increased consumption

30
Tariffs Business (Continue)
  • Restructuring of tariffs proposed - Sewerage
  • Equalisation of tariffs
  • Due to Impact it proposed to equalize in
    2012/13 and move towards Water consumption based
    in 2013/14
  • Additional tariffs in respect of type of business
    to be included in 2012/13 Fat Traps, etc.

31
Tariffs Business (Continue)
  • Refuse
  • Rendered at a significant loss
  • Previously subsidised through other tariffs
  • Breakeven tariff calculated at 18 increase
  • Electricity tariff
  • Nersa approved an average tariff increase of 13.3
  • Emfuleni pays 13.5 towards Eskom

32
Tariffs Residential
  • Restructuring of tariffs proposed - Water
  • Inclining block tariff (IBT) for water,
    electricity, sewerage
  • IBT in compliance with Circular 58 and s10 of the
    Water Services Act
  • Circular 58 prescribes IBT
  • S10 (2)(d) of the Water Services Act tariffs
    should promote or achieve water conservation
  • Tariffs cheaper for initial usage but higher with
    increased consumption

33
Tariffs Residential
  • Restructuring of tariffs proposed - Sewerage
  • Waterborne Sewerage principle to be followed
  • Basic Plus Sewerage tariff (billing units) linked
    to 50 of Water consumption
  • Refuse
  • Rendered at a significant loss
  • Previously subsidized through other tariffs
  • Breakeven tariff calculated at 18 increase
  • Electricity tariff
  • NERSA approved a average tariff increase of 13.3
  • Emfuleni pays 13.5 more towards Eskom

34
Tariff Structure - Residential
  • Water Tariff Structure
  • Tariff increase per block (Incremental)
  • Maximum Water consumption block Currently 30kl
  • Restructuring proposal (Tariff increments)
  • Additional Blocks 30kl-45kl and 45kl
  • Punitive tariff
  • Sewerage Consideration of water based tariff
  • Basic 50 of water consumption

35
Revenue Collections Budget 2012/13
REVENUE BY SOURCE ADJUSTMENT BUDGET 2011 / 2012 (R) BUDGET 2012 / 2013 (R) OF BUDGET
Electricity Sales 1,298,781,712 1,489,734,764 33,0
Grants 844,253,184 901,185,934 20,0
Water Sales 553,766,019 695,224,834 15.4
Assessment Rates 343,684,023 396,524,977 8,8
Sewer 220,818,683 303,809,802 6.7
Pre-paid Electricity 192,947,750 213,000,798 4,7
Refuse Removal 98,916,159 125,222,157 2.8
Other Income 169,859,395 315,865,423 7,0
Tariff Charges Other 25,234,002 47,489,427 1.0
Fines 26,415,543 32,399,049 0.7
Total 3,774,676,469 4,520,457,165 100

36
Expenditure Budget 2012/13
ITEM ADJUSTMENT BUDGET 2011 / 2012 (R) BUDGET 2012 / 2013 (R) OF BUDGET
Employee Costs 699,503,868 693,341,946 15,3
Remuneration of Councilors 30,960,598 32,841,255 0,7
Depreciation and Asset Impairment 129,684,958 351,444,059 7,8
Bulk Purchase Electricity 115,616,1403 1,360,317,000 30,1
Bulk Purchase Water 370,000,000 380,918,643 8,4
Provision for Doubtful Debts 293,420,256 596,271,005 13,2
Contribution to CAPEX 364,369,940 367,488,750 8,1
Repairs and Maintenance 158,301,955 141,545,790 3,1
Other 572,273,491 596,288,617 13,2
TOTAL 3,774,676469 4,520,457,165 100
37
Key Expenditure Budget components
  • Bulk purchases 38.5
  • Electricity 30.1
  • Water 8.4
  • Personnel Costs 16
  • Repairs and Maintenance 3.1
  • Capital expenditure 8.1
  • Total 2012/13 MTREF Budget R 4.5 billion

38
LEGISLATIVE COMPLIANCE
37
39
Compliance with Audit Processes the Law
  • Municipal Structures Act
  • Section 79 Establishment (1) The Council has
    appointed a functional Audit Committee and MPAC
    for the effective and efficient performance of
    its functionalities.
  • Audit Committee members appointed has requisite
    skills as follows
  • Financial Accounting and Management
  • Internal and External Audit
  • Performance and Risk Management
  • Engineering
  • Legal and Governance

40
Compliance with Audit Processes the Law (Cont)
  • Emfuleni Local Municipality is in the process to
    appoint an IT Specialist to serve as a member to
    further capacitate the Committee.
  • Audit Committee and MPAC co-ordinate their
    efforts on oversight as per MFMA Circular 32 and
    COGTA and National Treasury Instructions.

41
Compliance with Audit Processes the Law (Cont)
  • Municipal System Act
  • Section 45 The results of the performance
    measurements are audited by Internal Audit in
    terms of section 41(1).
  • Internal audit is auditing 100 not on a SAMPLE
    basis as other municipalities, the reason for
    that is to reflect the total service delivery
    efforts of the municipality it is the ONLY
    municipality which does this in the country.
  • The AG audited the performance measurements
    annually as required (part of OPCA).

42
Compliance with Audit Processes Law (Cont)
  • Municipal Systems Act
  • Section 46 The municipality has prepared a
    performance report which was subjected to IA and
    AG audits.
  • Municipal Systems Act Regulations
    14(1)(a)(c)(i)
  • The Municipality has developed and implemented
    mechanisms, systems and processes for auditing
    the results of performance measurements as part
    of its internal auditing process as already
    alluded to before.

43
Compliance with Audit Processes Law (Cont)
  • Municipal Systems Act Regulations
    14(1)(a)(c)(ii)
  • The Internal Audit Department of Emfuleni Local
    Municipality submits quarterly reports to the
    Municipal Manager and Performance Audit Committee
  • Municipal Systems Act Regulations14(2) (a)
  • Emfuleni Local Municipality has appointed
    Performance Audit Committee which meets
    quarterly, reports to Mayoral Committee (Mayco)
    on issues of Performance, and in so doing keeps
    Mayco informed in that respect

44
Compliance with Audit Processes Law (Cont)
  • The Performance Audit Committee reports to the
    Council on matters of Performance, three reports
    have already been submitted to Council for this
    financial year.

45
Compliance with Audit Processes Law (Cont)
  • Municipal Finance Management Act
  • 121(i) Preparation and adoption of annual
    reports
  • The Annual Report for Emfuleni Local Municipality
    was prepared and adopted by Council.
  • 121(3)The Annual report
  • Complied with Legislation required as per Section
    121(3)(a) and (b).
  • 122 Preparation of Financial statements
  • Emfuleni Local Municipality has compiled the
    annual financial statements on the basis as
    required by this Section basis.

46
Compliance with Audit Processes Law (Cont)
  • Municipal Finance Management Act (Cont)
  • 123 Disclosure on intergovernmental and
    other allocations
  • 124 Disclosure of Interest concerning
    Councillors, Directors and Officials
  • 125 Other compulsory disclosures
  • The Annual Financial Statements of Emfuleni Local
    Municipality complied with these abovementioned
    Sections

47
Compliance with Audit Processes Law (Cont)
  • Municipal Finance Management Act (Cont)
  • 126 Submission and auditing of Annual Financial
    Statements
  • The Annual Financial Statements of the
    Municipality was submitted within two months
    after the end of Financial Year to the
    Auditor-General for auditing purposes.

48
Compliance with Audit Processes Law (Cont)
  • Municipal Finance Management Act (Cont)
  • Section 62(1)(c)(ii) and 165(1)(a)
  • The municipality has established a functional
    internal audit department which have prepared a
    risk based annual audit plan as approved by the
    Audit Committee.
  • Section 165(1)(b)
  • The Internal Audit department has continuously
    advised the Accounting Officer and reported to
    the Audit Committee on the implementation of the
    plan in relation to internal controls, accounting
    procedures and practices, risk and risk
    management, performance, loss and compliance with
    other legislation.

49
Compliance with Audit Processes Law (Cont)
  • Municipal Finance Management Act (Cont)
  • 166 Audit Committee-
  • 166(a)The committee was established as already
    alluded.
  • 166(b) Audit Committee reviewed the AFS.
  • 166(c) Audit Committee responded to the Council
    on issues raised by AG.

50
Reporting and other compliance requirements
  • Compliance with reporting requirement
  • MFMA compliance reporting timelines adherence
  • Other Compliance issues
  • Establishment of Risk Management Framework and
    registers
  • Performance management System
  • Formulation of risk-based audit plans

51
CURRENT ASSETS AND LIABILITIES
50
52
Current Assets
ITEM 2011/12 (Unaudited) 2010/11
Cash and cash equivalents 12,857,572 18,497,047
Trade and trade receivables from exchange transactions 237,843,335 255,423,565
Trade and other receivables from non-exchange transactions 139,166,698 44,585,250
Inventories 20,536,147 19,886,954
Investments 114,928,212 106,269,517
Value added tax receivable 71,033,304 21,649,624
TOTAL 596,365,268 466,311,957
51
53
Current Liabilities
ITEM 2011/12 (unaudited) 2010/11
Trade and other payables from exchange transactions 701,169,997 526,816,744
Unspent conditional grants and receipts 21,567,411 61,248,661
Borrowings 5,268,984 6,858,622
Finance lease liability 23,161,407 62,193,495
TOTAL 751,167,799 657,117,522
  • Included in the Trade payables is the Eskom
    billing for R175 million (2011/12) and R 136
    million (2010/11), Rand Water bill for portable
    water amounted to R 23 million (2011/12)
  • The municipality managed to settle the raised
    Overdraft facility amounting to R 90 million
    during 2011/12

52
54
Outstanding debtors June 2012
84 debt in residential
  • Goverment Debt in the Region of R44 million
  • Total Debt Stand at almost R2.7 billion (84 is
    Residential)

55
Outstanding Government Debt
NAME OF DEPT AMOUNT OUTSTANDING AS AT JUNE 2012
GOV - EDUCATIONAL R 5,749,717.89
GOV - EDUCATIONAL RATES R 962,864.54
EDUCATIONAL (SECTION 21 SCHOOLS) R 2,994,929.25
EDUCATIONAL (SECTION 21 SCHOOLS) RATES R 100,166.38
HOSPITALS AND HEALTH R 10,100,069.93
HOSPITALS AND HEALTH RATES R 1,167,329.82
GOV - HOUSING R 2,354,086.49
GOV - HOUSING RATES R 1,363,365.86
POLICE R 924.72
S.A POST OFFICE R 21,968.11
S.A POST OFFICE RATES R 839.38
PROVINCIAL HOUSING R 532,611.13
PROVINCIAL HOUSING RATES R 394,039.77
GOV - PUBLIC WORKS NATIONAL R 233,375.07
GOV - PUBLIC WORKS NATIONAL RATES R 2,347,307.08
GOV - PUBLIC WORKS PROVINCIAL R 11,314,035.10
GOV - PUBLIC WORKS PROVINCIAL RATES R 3,428,035.26
GOV - ROADS R 39,629.32
GOV - ROADS RATES R 21,907.90
GOV - TELKOM R 4,856.92
GOV - TELKOM RATES R 8,351.83

Grand total R 44,179,411.75
56
Risk Management
  • ELM Fully functional Risk Management, Anti-Fraud
    Anti-Corruption Committee
  • Quaterly meetings are held and report is
    presented to Audit Comm and Council
  • Risk Management represented at SMT level through
    the CRO being appointed on 15/10/2011
  • Risk Management is aligned to Strategic Planning
    through the IDP, whereby strategic high level
    risks are identified
  • A Risk Management register has been developed ans
    approved by the Audit Committee and Council
  • Whistle blowing policy is in place
  • A reviewed Risk Management Framework Strategy
    has been approved by AC and RMAAC is ready for
    next Council meeting for approval
  • Risk matury has improved from 3 to 4.8 maturity
    level (NT assesment)

57
Top 10 Risks of ELM
58
Top 10 Risks of ELM (Cont)
59
Top 10 Risks of ELM (Cont)
60
Top 10 Risks of ELM (Cont)
61
Top 10 Risks of ELM (Cont)
62
Risk Management (Cont)
  • A Risk-based Internal Audit Plan was developed
    determining high risk areas of ELM based on the
    risk registers
  • Operational risks are identified through the
    SDBIPs assessed quarterly and reported to
    Audigt Commitee and Council
  • Risk Champions has been appointed for each
    cluster to monitor and report on each cluster
    risks
  • IT Risks were identified and Action Plans are in
    place to remedy some risks which include
  • Overall IT Assessment (hardware and software)
  • Disaster Recovery Plan
  • Business Continuity Plan
  • IT Governance Framework Control
  • IT Policies Procedures

63
AUDIT MATTERS
62
64
Audit Report
  • Audit Opinion
  • 2006/2007 Disclaimer
  • 2007/2008 Disclaimer
  • 2008/2009 Qualification
  • 2009/2010 Qualification
  • 2010/2011 Qualification
  • Basis of Qualification 2010/2011
  • Property, plant and equipment
  • Valuation of Property, Plant and Equipment (PPE)
  • Statement of changes in net assets
  • 2007/08 misstatements of service charges and
    employee costs that affects the 2010/11
    accumulated surplus/deficit

65
Audit Report (Cont)
  • Matters of Emphasis
  • Significant uncertainties - Civil matters
  • Restatement of corresponding figures - GRAP 17
    implementation
  • Material losses - Water 51 and Electricity 11
  • Material Impairments Irrecoverable debt
  • SCM Deviations
  • 20 deviations due to urgency.
  • 12 Irregularities reported of providers in
    service of the state.

66
Status of Audit Action Plan for 2010/2011
  • Appointment of same service provider to finalize
    GRAP 17 implementation.
  • Establishment of OPCA steering Committee (Senior
    Management Team)
  • Action Plan-Addressing Audit findings 2010/2011
  • Quarterly Internal Control assessments(dash board
    reports) AG
  • OPCA progress report presented quarterly to Audit
    Committee (CAE), MAYCO and Council (by
    Chairperson of Audit Comm)

67
SUMMARY OF FINDING!!
Cluster Number of findings Not Applicable Total Findings needed to be address during this financial year Resolved Resolved Partially Resolved Partially Resolved Not Resolved Not Resolved
Cluster Number of findings N/A Total Findings needed to be address during this financial year J K L
Internal Audit 2 0 2 2 100 0 0 0 0
Basic Services 1 0 1 1 100 0 0 0 0
Corporate Services 2 0 2 0 0 2 100 0 0
Economic Development and Planning 2 0 2 0 0 2 100 0 0
Public Safety and Community Development 2 0 2 1 50 1 50 0 0
Municipal Manager 26 6 20 11 55 8 40 1 5
Infrastructure Planning and Assets Management. 15 14 1 0 0 1 100 0 0
Finance 67 34 33 25 76 8 24 0 0
Cross Cutting findings 1 1 0 0 0 0 0 0 0
118 55 63 11 17 22 35 1 2
68
ACTION PLANS FOR 2010/11 AUDITOR GENERAL REPORT
Audit Findings Cluster Action Plan Taken Employee in charge Resolved Partially Resolved Not Resolved Not Applicable for Reviewing Remarks
Audit Findings Cluster Action Plan Taken Employee in charge J K L N/A Remarks
1. Infrastructure assets- No supporting documents for cost recorded on the financialstatements Financial Services/Infrastructure Planning and Asset Management Consultants (PWC) have being appointed to assist in all issues related to the Emfuleni Assets and afterward Auditor-General will retest the Assets Register Methodology. Bernard Langa Nil Nil Nil N/A The audit finding will be reviewed by Auditor-General after PWC (Consultants) complete the rectification of asset Register.
2. Information not submitted Financial Services/Infrastructure Planning and Asset Management Consultants (PWC) have being appointed to assist in all issues related to the Emfuleni Assets and afterward Auditor-General will retest the Assets Register Methodology. Bernard Langa Nil Nil Nil N/A The audit finding will be reviewed by Auditor-General after PWC (Consultants) complete the rectification of asset Register.
3. Assets incorrectly valued Financial Services/Infrastructure Planning and Asset Management Consultants (PWC) have being appointed to assist in all issues related to the Emfuleni Assets and afterward Auditor-General will retest the Assets Register Methodology. Bernard Langa Nil Nil Nil N/A The audit finding will be reviewed by Auditor-General after PWC (Consultants) complete the rectification of asset Register.
4. Newly identified assets Financial Services/Infrastructure Planning and Asset Management Consultants (PWC) have being appointed to assist in all issues related to the Emfuleni Assets and afterward Auditor-General will retest the Assets Register Methodology. Bernard Langa Nil Nil Nil N/A The audit finding will be reviewed by Auditor-General after PWC (Consultants) complete the rectification of asset Register.
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ACTION PLANS FOR 2010/11 AUDITOR GENERAL REPORT
Audit Findings Cluster Action Plan Taken Employee in charge Resolved Partially Resolved Not Resolved Not Applicable for Reviewing Remark
Audit Findings Cluster Action Plan Taken Employee in charge J K L N/A Remark
5. Assets recorded at incorrect amount Financial Services/Infrastructure Planning and Asset Management Consultants (PWC) have being appointed to assist in all issues related to the Emfuleni Assets and afterward Auditor-General will retest the Assets Register Methodology. Bernard Langa Nil Nil Nil N/A The audit finding will be reviewed by Auditor-General after PWC (Consultants) complete the rectification of asset Register.
6. Understatement of depreciation Financial Services/Infrastructure Planning and Asset Management Consultants (PWC) have being appointed to assist in all issues related to the Emfuleni Assets and afterward Auditor-General will retest the Assets Register Methodology. Bernard Langa Nil Nil Nil N/A The audit finding will be reviewed by Auditor-General after PWC (Consultants) complete the rectification of asset Register.
7. Assessment of Impairment for assets Financial Services/Infrastructure Planning and Asset Management Consultants (PWC) have being appointed to assist in all issues related to the Emfuleni Assets and afterward Auditor-General will retest the Assets Register Methodology. Bernard Langa Nil Nil Nil N/A The audit finding will be reviewed by Auditor-General after PWC (Consultants) complete the rectification of asset Register.
8. Assets not considered for write off Financial Services/Infrastructure Planning and Asset Management Consultants (PWC) have being appointed to assist in all issues related to the Emfuleni Assets and afterward Auditor-General will retest the Assets Register Methodology. Bernard Langa Nil Nil Nil N/A The audit finding will be reviewed by Auditor-General after PWC (Consultants) complete the rectification of asset Register.
9. Assets not bar-coded on the asset register Financial Services/Infrastructure Planning and Asset Management Consultants (PWC) have being appointed to assist in all issues related to the Emfuleni Assets and afterward Auditor-General will retest the Assets Register Methodology. Bernard Langa Nil Nil Nil N/A The audit finding will be reviewed by Auditor-General after PWC (Consultants) complete the rectification of asset Register.
10. Valuation of newly identified assets- differences on supporting documents Financial Services/Infrastructure Planning and Asset Management Consultants (PWC) have being appointed to assist in all issues related to the Emfuleni Assets and afterward Auditor-General will retest the Assets Register Methodology. Bernard Langa Nil Nil Nil N/A The audit finding will be reviewed by Auditor-General after PWC (Consultants) complete the rectification of asset Register.
11. Valuation methods for assets Financial Services/Infrastructure Planning and Asset Management Consultants (PWC) have being appointed to assist in all issues related to the Emfuleni Assets and afterward Auditor-General will retest the Assets Register Methodology. Bernard Langa Nil Nil Nil N/A The audit finding will be reviewed by Auditor-General after PWC (Consultants) complete the rectification of asset Register.
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ACTION PLANS FOR 2010/11 AUDITOR GENERAL REPORT
Audit Findings Cluster Action Plan Taken Employee in charge Resolved Partially Resolved Not Resolved Not Applicable for Reviewing Remarks
Audit Findings Cluster Action Plan Taken Employee in charge J K L N/A Remarks
12. Asset Register not GRAP Compliant Financial Services/Infrastructure Planning and Asset Management Consultants (PWC) have being appointed to assist in all issues related to the Emfuleni Assets and afterward Auditor-General will retest the Assets Register Methodology. Bernard Langa Nil Nil Nil N/A The audit finding will be reviewed by Auditor-General after PWC (Consultants) complete the rectification of asset Register.
13. Assessment of residual values Financial Services/Infrastructure Planning and Asset Management Consultants (PWC) have being appointed to assist in all issues related to the Emfuleni Assets and afterward Auditor-General will retest the Assets Register Methodology. Bernard Langa Nil Nil Nil N/A The audit finding will be reviewed by Auditor-General after PWC (Consultants) complete the rectification of asset Register.
14. Impairment of transport assets Financial Services Consultants (PWC) have being appointed to assist in all issues related to the Emfuleni Assets and afterward Auditor-General will retest the Assets Register Methodology. Bernard Langa Nil Nil Nil N/A The audit finding will be reviewed by Auditor-General after PWC (Consultants) complete the rectification of asset Register.
15. Valuation of newly identified assets Financial Services/Infrastructure Planning and Asset Management Consultants (PWC) have being appointed to assist in all issues related to the Emfuleni Assets and afterward Auditor-General will retest the Assets Register Methodology. Bernard Langa Nil Nil Nil N/A The audit finding will be reviewed by Auditor-General after PWC (Consultants) complete the rectification of asset Register.
16. Intangible assets- Classification Financial Services Consultants (PWC) have being appointed to assist in all issues related to the Emfuleni Assets and afterward Auditor-General will retest the Assets Register Methodology. Bernard Langa Nil Nil Nil N/A The audit finding will be reviewed by Auditor-General after PWC (Consultants) complete the rectification of asset Register.
17. Overstatement of landfill site Financial Services Consultants (PWC) have being appointed to assist in all issues related to the Emfuleni Assets and afterward Auditor-General will retest the Assets Register Methodology. Bernard Langa Nil Nil Nil N/A The audit finding will be reviewed by Auditor-General after PWC (Consultants) complete the rectification of asset Register.
18. Post balance sheet-events after reporting date Financial Services The matter was resolved during the audit as the statements were updated with the recommendations of the AG. A repetitive review of the AFS will be undertaken before the submission to AG. Tsietsi Rafube J Nil Nil Nil The audit finding was resolved during the AG audit process. Portfolio of evidence was provided and verified.
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ACTION PLANS FOR 2010/11 AUDITOR GENERAL REPORT
Audit Findings Cluster Action Plan Taken Employee in charge Resolved Partially Resolved Not Resolved Not Applicable for Reviewing Remarks
Audit Findings Cluster Action Plan Taken Employee in charge J K L N/A Remarks
19. The specifications were not approved by the accounting officer prior to publication of the invitation of bids. Financial Services Supply Chain Management functions have been decentralized and different clusters have delegated powers in terms of section 8 of SCM policy were by the Bid Specification Committee get appointed by the Accounting Officer and Bid Specification Committee is delegated to draft the specification and other requirements including approving and determining advertising methods. Thabo Thwala J Nil Nil Nil The audit finding was resolved. An approved letter of delegation authority by the Accounting Officer was provided for as Portfolio of evidence was verified.
20. Registered address of the contractors is different to the one disclosed in the biddocumentation Financial Services Bid Document (MBD 4 MBD 8) requires the bidder to indicate the address where the business is operating and also declarations. The bidder is required to include Municipal Account or lease agreement to indicate were the business is operating. Thabo Thwala J Nil Nil Nil Resolved
21. Register of bids is not published on the municipality website Financial Services The awarded bids will be published on the website Thabo Thwala J Nit Nil Nil The audit finding was resolved. Printout from Website was provided as Portfolio of Evidence and Verified.
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ACTION PLANS FOR 2010/11 AUDITOR GENERAL REPORT
Audit Findings Cluster Action Plan Taken Employee in charge Resolved Partially Resolved Not Resolved Not Applicable for Reviewing Remark
Audit Findings Cluster Action Plan Taken Employee in charge J K L N/A Remark
22. Non compliance with Section 32(2) of the MFMA Municipal Manager Irregular or fruitless and wasteful expenditure Register will be developed and monitored by delegated personnel (CFO) and feedback will be provided on a quarterly basis.  ALL DMM Nil K Nil Nil Irregular or Fruitless and Wasteful expenditure Register was developed and submitted to the relevant management, monthly monitoring and evaluation process will be implemented with effect from 1st July 2012. Furthermore it is recommended that MFMA 32(2) must observe at all times in respect of unauthorized, irregular or fruitless and wasteful expenditure.
23. Suppliers not on the database Financial Services SCM department encourage suppliers to register on the data base and also our website have database forms were suppliers can print and submit to our offices during working hours Thabo Thwala Nil Nil Nil N/A Management did not agreed with the AG audit finding.
24. Operating expenditure -Transactions recorded in incorrect period Financial Services Year End procedures(SOP) will be work shopped to the Creditors personnel by Mid June Derrick Maaroganye Nil Nil Nil N/A Creditors list will be ready on the 25 July 2012. Therefore this finding will be subjected to AG processes.
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ACTION PLANS FOR 2010/11 AUDITOR GENERAL REPORT
Audit Findings Cluster Action Plan Taken Employee in charge Resolved Partially Resolved Not Resolved Not Applicable for Reviewing Remarks
Audit Findings Cluster Action Plan Taken Employee in charge J K L N/A Remarks
25. Understatement and Overstatement of Creditors Listings Financial Services SCM is supposed to complete GRN first to enable the fin system to accrue automatically. Year-end procedures to be followed up by SCM. Inter-departmental communication channels with be enhanced and regular strategic meetings with SCM will be held going forward Derrick Maaroganye Nil Nil Nil N/A Creditors list will be ready on the 25 July 2012. Therefore finding will be subjected to AG processes.
26. Expenditure-Information not submitted for audit Financial Services Documents were misfiled. An investigation of root causes is undertaken and proper record keeping is in place to prevent recurrence of such events. Derrick Maaroganye J Nil Nil Nil The finding was resolved, Documents selected from the Register was duly filed and were verified.
27. Predetermined objectives No evidence that IDP and budget are aligned Municipal Manager/Performance Management System Budget Sheets SA4, SA5 and SA6 which reconcile the budgeted amounts to the strategic objectives in the IDP will be completed and submitted with the final budget for approval. Budget Manager Nil K Nil Nil Partially resolved, the core strategic objectives are reflected in the IDP2011/12 and Budget (SA4, SA5 and SA6) as aligned and verification was done. Further verification will be subjected to AG processes.
27. Predetermined objectives No evidence that IDP and budget are aligned Municipal Manager/Performance Management System Communicate coding convention with Budget Office and IPAM IDP Manager Nil K Nil Nil Partially resolved, the core strategic objectives are reflected in the IDP2011/12 and Budget (SA4, SA5 and SA6) as aligned and verification was done. Further verification will be subjected to AG processes.
27. Predetermined objectives No evidence that IDP and budget are aligned Municipal Manager/Performance Management System Budget Office to include IDP codes into Budget Budget Manager Nil K Nil Nil Partially resolved, the core strategic objectives are reflected in the IDP2011/12 and Budget (SA4, SA5 and SA6) as aligned and verification was done. Further verification will be subjected to AG processes.
28. IDP does not include core components Municipal Manager/Performance Management System MSA determines 9 core components for the IDP. Two were not included - disaster management plan, and financial plan (7/978)   Nil K Nil Nil The audit finding partially resolved, Disaster Management Plan was provided as portfolio of evidence however the financial plan is still in a draft.
28. IDP does not include core components Municipal Manager/Performance Management System Develop disaster management plan Manager Public Safety Nil K Nil Nil The audit finding partially resolved, Disaster Management Plan was provided as portfolio of evidence however the financial plan is still in a draft.
28. IDP does not include core components Municipal Manager/Performance Management System Submit disaster management plan Manager Public Safety Nil K Nil Nil The audit finding partially resolved, Disaster Management Plan was provided as portfolio of evidence however the financial plan is still in a draft.
28. IDP does not include core components Municipal Manager/Performance Management System Develop financial plan Manager Budget Nil K Nil Nil The audit finding partially resolved, Disaster Management Plan was provided as portfolio of evidence however the financial plan is still in a draft.
28. IDP does not include core components Municipal Manager/Performance Management System Submit financial plan Manager Budget Nil K Nil Nil The audit finding partially resolved, Disaster Management Plan was provided as portfolio of evidence however the financial plan is still in a draft.
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ACTION PLANS FOR 2010/11 AUDITOR GENERAL REPORT
Audit Findings Cluster Action Plan Taken Employee in charge Resolved Partially Resolved Not Resolved Not Applicable for Reviewing Remarks
Audit Findings Cluster Action Plan Taken Employee in charge J K L N/A Remarks
29. KPI's and targets not set for all the core strategies Municipal Manager/Performance Management System The 2011/12 IDP and OSDBIP, as amended, addressed and resolved this finding Performance Specialist and IDP Manager J Nil Nil Nil The audit finding was resolved. Copy of Council Resolution was provided as Portfolio of evidence and was verified
30. IDP does not include general KPI's as per regulation requirements Municipal Manager/Performance Management System The 2011/12 IDP, as amended, addressed and resolved this finding Performance Specialist and IDP Manager J Nil Nil Nil The audit finding was resolved. Copy of Council Resolution was provided as Portfolio of evidence and was verified.
31. KPI's and targets are not well-defined and verifiable Municipal Manager/Performance Management System The 2011/12 IDP and OSDBIP, as amended, addressed and resolved this finding Performance Specialist and IDP Manager J Nil Nil Nil The audit finding was resolved. Copy of Council Resolution was provided as Portfolio of evidence and was verified.
32. IDP not aligned to the SDBIP Municipal Manager/Performance Management System The 2011/12 IDP and OSDBIP, as amended, addressed and resolved this finding Performance Specialist and IDP Manager J Nil Nil Nil The audit finding was resolved. Copy of Council Resolution was provided as Portfolio of evidence and was verified.
22A. IDP not aligned to the annual performance report Municipal Manager/Performance Management System The 2011/12 IDP and OSDBIP, as amended, partially addressed and resolved this finding Performance Specialist and IDP Manager Nil Nil Nil N/A Audit finding will form part of AG processes
33. Lack of performance management system for predetermined objectives as per the IDP Municipal Manager/Performance Management System Drafting the 2011/12 performance report Specialist PM Nil Nil Nil N/A Audit finding will form part of AG processes
34. Targets in the performance contracts are not based on KPI's in the IDP. Municipal Manager/Performance Management System The creation and commissioning of the M E solution for the 2011/12 OSDBIP addressed and resolved this matter   J Nil Nil Nil The finding was resolved. Performance of section 56 employees is aligned with SDBIP and was verified.
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ACTION PLANS FOR 2010/11 AUDITOR GENERAL REPORT
Test Audit Findings Cluster Action Plan Taken Employee in charge Resolved Partially Resolved Not Resolved Not Applicable for Reviewing Remark
Test Audit Findings Cluster Action Plan Taken Employee in charge J K L N/A Remark
35. Annual performance report is not prepared in terms of Municipal Systems Act S46 Municipal Manager/Performance Management System Annual performance report must reflect comparative performance information of previous reporting period   Nil Nil Nil N/A Audit finding will form part of AG processes
35. Annual performance report is not prepared in terms of Municipal Systems Act S46 Municipal Manager/Performance Management System Determine existence of comparative performance data from 2010/11 reporting period Specialist PM Nil Nil Nil N/A Audit finding will form part of AG processes
35. Annual performance report is not prepared in terms of Municipal Systems Act S46 Municipal Manager/Performance Management System Determine performance data gap analysis Specialist PM Nil Nil Nil N/A Audit finding will form part of AG processes
35. Annual performance report is not prepared in terms of Municipal Systems Act S46 Municipal Manager/Performance Management System Report on performance data gap analysis Specialist PM Nil Nil Nil N/A Audit finding will form part of AG processes
36. Annual performance report not supported by evidence Municipal Manager/Performance Management System Annual performance report is based on Q4 OSDBIP assessment with PoE Specialist PM Nil Nil Nil N/A Audit finding will form part of AG processes
37. The prescribed process to amend the IDP was not followed. Municipal Manager/Performance Management System Deficiency not properly advertised and SDM not properly consulted IDP Manager J Nil Nil Nil The audit finding was resolved. Advert and Letter to Sedibeng was provided as portfolio of evidence and verification was done.
37. The prescribed process to amend the IDP was not followed. Municipal Manager/Performance Management System 2011/12 IDP amendment was properly advertised and SDM formally consulted IDP Manager J Nil Nil Nil The audit finding was resolved. Advert and Letter to Sedibeng was provided as portfolio of evidence and verification was done.
38. Lack of community involvement in the setting of KPI's, targets and the performance management process Municipal Manager/Performance Management System KPIs and targets of Basic Services and IPAM and EDP to be communicated during public participation process Specialist PM Nil Nil Nil N/A Audit finding will form part of AG processes
39. Cash and cash equivalents-None compliance with the Act Financial Services A letter stipulating banking details of the Municipality will be compiled and submitted to AG and Dept of Finance. Tsietsi Rafube J Nil Nil Nil Resolved, Letter stipulating banking details of the municipality was provided as portfolio of evidence
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ACTION PLANS FOR 2010/11 AUDITOR GENERAL REPORT
Audit Findings Cluster Action Plan Taken Employee in charge Resolved Partially Resolved Not Resolved Not Applicable for Reviewing Remark
Audit Findings Cluster Action Plan Taken Employee in charge J K L N/A Remark
40. Debt management not effective Financial Services C. Review Credit Control and Debt Collection Policy and By-laws Debt Manager Nil Nil Nil N/A Management did not agreed with the AG audit finding.
40. Debt management not effective Financial Services D. Indigent process Debt Manager Nil Nil Nil N/A Management did not agreed with the AG audit finding.
40. Debt management not effective Financial Services 1. Write off of arrears prior to 2011/2012 financial year Debt Manager Nil Nil Nil N/A Management did not agreed with the AG audit finding.
40. Debt management not effective Financial Services 2. Write off of arrears in abeyance on a monthly basis Debt Manager Nil Nil Nil N/A Management did not agreed with the AG audit finding.
40. Debt management not effective Financial Services 7. Finalization of Legal agreements Debt Manager Nil Nil Nil N/A Management did not agreed with the AG audit finding.
40. Debt management not effective Financial Services 8. Report to Council for approval of process Debt Manager Nil Nil Nil N/A Management did not agreed with the AG audit finding.
41. Differences between grant amount on the financial statements and the amount on the trial balance Financial Services Grants Management Committee to be established to ensure among others the correctness of grant amounts on a monthly basis. Dobe Mokgethi Nil K Nil Nil The audit finding is partially resolved. Grants Reconciliation from July 2011 to May 2012 was provided as portfolio of evidence. Review of completeness and accuracy of Trial balance will be performed by CFO to ensure that the AFS agreed to the trial balance.
42. Information not provided for Clearance Certificates Financial Services The clearance certificate costs are paid directly into applicable vote number. These payments are done when a bank guarantee is received for the capital amount payable for clearance certificate. The current receipting system does not generate the property description on the direct payment. Sam Mokoena/Laura Schmidt J Nil Nil Nil Finding was resolved. Clearance Certificate Register was established. A sample was selected and the requested portfolio of evidence was provided to support the Clearance Certificate Register.
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ACTION PLANS FOR 2010/11 AUDITOR GENERAL REPORT
Audit Findings Cluster Action Plan Taken Employee in charge Resolved Partially Resolved Not Resolved Not Applicable for Reviewing Remarks
Audit Findings Cluster Action Plan Taken Employee in charge J K L N/A Remarks
43. Incorrect and incomplete calculation of VAT Financial Services 1. Calculate the VAT apportionment rate at the end of June 2012 and affect the recalculated rate from the 1st of July 2012. 2. To run a report on all transactions zero rated, i. o.t find transactions which VAT was mistakenly not calculated. Tsietsi Rafube Nil Nil Nil N/A Management has appointed Service Provider to address the matter raised by Auditor General.
44. Incomplete disclosure of fruitless and wasteful expenditure Financial Services Post dated payments control for third parties payments is in place on Business Integration system (ABSA) on the 7th of each month. Derrick Maaroganye Nil Nil Nil N/A Fruitless and wasteful register was developed the monthly monitoring and evaluation will be effected from 1st July 2012/13.This finding will form part of AG processes.
45. Non compliance with Section 65(2)(e) Financial Services It is an on-going issue institutional challenge. First-in-first out paid principle will be enhanced on tax invoice receipt. Derrick Maaroganye Nil Nil Nil N/A The audit findings may not be resolved due to the financial constrains
46. Information not provided for audit - Grant Expenditure Financial Services Documents were misfiled. Investigations of root causes are undertaken and proper record keeping is in place to prevent recurrence of such events. Derrick Maaroganye J Nil Nil Nil The finding was resolved selected sample was performed.
47. Some municipal councilors did not declare their interest Municipal Manager Register of Declaration of interest was developed and were issued on every Council meeting Manager Speaker Nil K Nil Nil Not all Councillorship and Personnel declare their interest.
48. Differences in amount disclosed in the financial statement and invoices Financial Services The matter was resolved during the audit as the statements were updated with the recommendations of the AG. A repetitive review of the AFS will be undertaken before the submission to AG. Tsietsi Rafube J Nil Nil Nil The audit finding was resolved during the audit. Audit finding will form part of AG processes
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ACTION PLANS FOR 2010/11 AUDITOR GENERAL REPORT
Audit Findings Cluster Action Plan Taken Employee in charge Resolved Partially Resolved Not Resolved Not Applicable for Reviewing Remarks
Audit Findings Cluster Action Plan Taken Employee in charge J K L N/A Remarks
49. Incomplete disclosure of Environmental Rehabilitation provisions Financial Services The matter was resolved during the audit as the statements were updated with the recommendations of the AG. A repetitive review of the AFS will be undertaken before the submission to AG. Tsietsi Rafube J Nil Nil Nil The audit finding was resolved during the audit. Audit finding will form part of AG processes
50. Difference between Venus and Pay Day Financial Services Reconciliation of salaries suspense control account on monthly basis including review and supervision i.o.t prevents the re- occurrence of variances. Derrick Maaroganye Nil K Nil Nil The funding is partially resolved, Currently service provider has been appointed to address the reconciliation between Venus and Payday System
Total 51 16 6 0 29  
  Percentage   73 27 0    
Number of audit findings remaining for retesting. 0  
Percentage 0          
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ACTION PLANS FOR 2010/11 AUDITOR GENERAL REPORT
Audit Finding Action Plan Taken Cluster/Department Employee in charge Resolved Partially Resolved Not Resolved Not Applicable for Reviewing Remark
Audit Finding Action Plan Taken Cluster/Department Employee in charge J K L N/A Remark
51. Bank account balances not properly disclosed The matter was resolved during the audit as the statements were updated with the recommendations of the AG. A repetitive review of the AFS will be undertaken before the submission to AG. Financial Services Tsietsi Rafube J Nil Nil Nil The audit finding was resolved during the audit. Audit finding will form part of AG processes
52. Control environment Shortcomings with regards to audit committee Finding was resolved, Clause was included in the Reviewed Audit Committee Charter. Internal Audit JS Masite J Nil Nil Nil The audit finding was resolved the relevant clause was included in the charter.
53. Risk assessment Implementations of internal audit findings The finding was resolved. Internal Audit Js Masite J Nil Nil Nil The audit finding was resolved.
54. Control environment Performance of deputy municipal managers not monitored Monitoring and evaluation of performance is done on a quarterly basis. 1st Q informal , half yearly Municipal Manager/Performance Management System Henre de Hart Nil K Nil Nil Half yearly assessment was conducted however there is one senior manager performance assessment conducted still outstanding however, management has put process is in place to finalize the performance assessments of all senior managers.
55. Control environment Weakness pertaining to preventative measures on environmentalfactors affecting the municipality The Environmental By-Laws are at the 3rd Draft and the ELM is assisted by Sedibeng and DEA. The target date for submission to ELM Legal Department is 31 August 2012. The report regarding the Environmental Plan of Action will be resubmitted to the Sec. 80 Committee and thereafter to Mayor and Council. Should be approved by 30 June 2012. Implementation will follow approval subject to funding. All the other matters raised in the Management Letter are subject to funding. The indications are that nothing will be approved for the 2012/13 financial year. Public Safety Nnete Makhubo and Benny Mhlanga Nil K Nil Nil The audit finding is partially resolved. Draft Air Quality Management By law, Climate Change Tools and draft Environment education and awareness strategy and action plan were provided as portfolio of evidence.
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ACTION PLANS FOR 2010/11 AUDITOR GENERAL REPORT
Audit Finding Action Plan Taken Cluster/Department Employee in charge Resolved Partially Resolved Not Resolved Not Applicable for Reviewing Remarks
Audit Finding Action Plan Taken Cluster/Department Employee in charge J K L N/A Remarks
56. Control environment Remuneration policy outdated Review the salary scales for 20072008 and replace them with current salary percentage Corporate Services Mr. Vincent Phalange Nil K Nil Nil The audit finding is partially resolved. Management will have an addendum to the policy to address the AG finding
57. Monthly budget statements not placed on the municipality's website The Manager Communications will be engaged in writing and the monthly budget statements will be placed on the website from February 2012. Financial Services Doe Mokgethi J Nil Nil Nil The audit finding was resolved. Print out from Emfuleni Local Municipality website was provided as Portfolio of evidence verification was conducted.
58. Monthly budget statements do not include variances and projections for the remainder of the year 1. Monthly statements to be completed on the new template (C-Schedule). 2. Comments on material variances to solicited and recorded in the template. Financial Services Senior Management Team Nil K Nil Nil The finding is partially Resolved. Template of C schedule was introduced with effect from January 2012, explanation of variance and corrective action was given, starting from May 2012. Furthermore management to ensure that the explanation for material variance and corrective actions are submitted to Budget so as to comply with Section 71 of MFMA.
59. Non compliance with section MFMA 62(1) (d). Irregular or fruitless and wastefulexpenditure Register was developed and monitored by delegated personnel (CFO) and feedback is provided on the quarterly bases. Financial Services Senior Management Team Nil K Nil Nil The Irregular or Fruitless and Wasteful expenditure Register was develop effective date for monthly monitoring and evaluation will is 1st July 2012.
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ACTION PLANS FOR 2010/11 AUDITOR GENERAL REPORT
Audit Finding Action Plan Taken Cluster/Department Employee in charge Resolved Partially Resolved Not Resolved Not Applicable for Reviewing Remarks
Audit Finding Action Plan Taken Cluster/Department Employee in charge J K L N/A Remarks
60. Fixed assets No evidence obtained of periodic review of asset register A Consultants (PWC) has being appointed to assist in all issues related to the Emfuleni Assets and afterward Auditor-General will retest the Assets Register Methodology. Financial Services Bernard Langa Nil Nil Nil N/A The audit finding will be reviewed by Auditor-General after PWC (Consultants) complete the rectification of asset Register.
61. Unidentified library books during physical verification of library books A Consultants (PWC) has being appointed to assist in all issues related to the Emfuleni Assets and afterward Auditor-General will retest the Assets Register Methodology. Financial Services Bernard Langa Nil Nil Nil N/A The audit finding will be reviewed by Auditor-General after PWC (Consultants) complete the rectification of asset Register.
62. Expenditure Contracts not available for inspection The invoice will be submitted to Internal Audit Basic Services Manager J Nil Nil Nil The audit finding was resolved. The invoice was submitted to internal audit for verification which was conducted.
63. Amount on the invoice does not agree to the amount as per General Ledger Invoices are adjusted by user depts. for CREDITOR'S section to effect payment. A letter from supplier confirming the
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